===========================================================================
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1995
Commission File Number 1-3924
MAXXAM INC.
(Exact name of Registrant as Specified in its Charter)
DELAWARE 95-2078752
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification Number)
organization)
5847 SAN FELIPE, SUITE 2600 77057
HOUSTON, TEXAS (Zip Code)
(Address of Principal
Executive
Offices)
Registrant's telephone number, including area code: (713) 975-7600
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the Registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes /X/ No / /
Number of shares of common stock outstanding at May 1, 1995: 8,707,591
===========================================================================<PAGE>
<PAGE>
MAXXAM INC.
INDEX
<TABLE>
<CAPTION>
PART I. - FINANCIAL INFORMATION PAGE
<S> <C>
Item 1. Financial Statements
Consolidated Balance Sheet at March 31, 1995 and December
31, 1994 3
Consolidated Statement of Operations for the three months
ended March 31, 1995 and 1994 4
Consolidated Statement of Cash Flows for the three months
ended March 31, 1995 and 1994 5
Condensed Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 11
<CAPTION>
PART II. - OTHER INFORMATION
<S> <C>
Item 1. Legal Proceedings 20
Item 5. Other Information 20
Item 6. Exhibits and Reports on Form 8-K 20
Signatures S-1
/TABLE
<PAGE>
<PAGE>
CONSOLIDATED BALANCE SHEET<PAGE>
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
------------- --------------
(Unaudited)
(In millions of dollars)
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 42.2 $ 84.6
Marketable securities 53.6 40.3
Receivables:
Trade, net of allowance for
doubtful accounts of $4.7 and
$4.4 at March 31, 1995 and
December 31, 1994,
respectively 218.5 176.8
Other 76.3 62.9
Inventories 572.4 541.4
Prepaid expenses and other current
assets 131.6 185.3
------------- --------------
Total current assets 1,094.6 1,091.3
Property, plant and equipment, net of
accumulated depreciation of $604.4 and
$579.9 at March 31, 1995 and December
31, 1994, respectively 1,220.6 1,231.6
Timber and timberlands, net of depletion of
$126.2 and $123.9 at March 31, 1995 and
December 31, 1994, respectively 323.6 325.2
Investments in and advances to unconsolidated
affiliates 178.6 169.7
Deferred income taxes 436.3 425.6
Long-term receivables and other assets 483.0 447.4
------------- --------------
$ 3,736.7 $ 3,690.8
============= ==============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 156.0 $ 161.8
Accrued interest 28.5 62.0
Accrued compensation and related
benefits 129.7 138.3
Other accrued liabilities 178.5 200.2
Payable to affiliates 83.6 81.8
Long-term debt, current maturities 31.5 33.7
------------- --------------
Total current liabilities 607.8 677.8
Long-term debt, less current maturities 1,647.9 1,582.5
Accrued postretirement benefits 746.5 743.1
Other noncurrent liabilities 658.5 618.4
------------- --------------
Total liabilities 3,660.7 3,621.8
------------- --------------
Commitments and contingencies
Minority interests 351.9 344.3
Stockholders' deficit:
Preferred stock, $.50 par value;
12,500,000 shares authorized; Class
A $.05 Non-Cumulative Participating
Convertible Preferred Stock; shares
issued: 669,957 .3 .3
Common stock, $.50 par value; 28,000,000
shares authorized; shares issued:
10,063,359 5.0 5.0
Additional capital 53.6 53.2
Accumulated deficit (303.9) (302.9)
Pension liability adjustment (11.4) (11.4)
Treasury stock, at cost (shares held:
preferred - 845; common -
1,355,768) (19.5) (19.5)
------------- --------------
Total stockholders' deficit (275.9) (275.3)
------------- --------------
$ 3,736.7 $ 3,690.8
============= ==============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
CONSOLIDATED STATEMENT OF OPERATIONS
(IN MILLIONS OF DOLLARS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------------
1995 1994
------------ -----------
(Unaudited)
<S> <C> <C>
Net sales:
Aluminum operations $ 513.0 $ 415.1
Forest products operations 52.0 56.7
Real estate operations 16.3 17.2
------------ -----------
581.3 489.0
------------ -----------
Costs and expenses:
Costs of sales and operations (exclusive of
depreciation and depletion):
Aluminum operations 426.7 387.8
Forest products operations 29.5 33.2
Real estate operations 12.1 12.4
Selling, general and administrative
expenses 42.6 39.4
Depreciation and depletion 29.8 31.2
------------ -----------
540.7 504.0
------------ -----------
Operating income (loss) 40.6 (15.0)
Other income (expense):
Investment, interest and other income 3.6 11.4
Interest expense (45.4) (43.5)
------------ -----------
Loss before income taxes, minority interests
and extraordinary item (1.2) (47.1)
Credit for income taxes 7.2 16.5
Minority interests (7.0) (3.9)
------------ -----------
Loss before extraordinary item (1.0) (34.5)
Extraordinary item:
Loss on early extinguishment of debt, net
of related benefit for income taxes
of $2.9 - (5.4)
------------ -----------
Net loss $ (1.0) $ (39.9)
============ ===========
Per common and common equivalent share:
Loss before extraordinary item $ (.11) $ (3.65)
Extraordinary item - (.57)
------------ -----------
Net loss $ (.11) $ (4.22)
============ ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
CONSOLIDATED STATEMENT OF CASH FLOWS
(IN MILLIONS OF DOLLARS)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------
1995 1994
-------- --------
(Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (1.0) $ (39.9)
Adjustments to reconcile net loss to net
cash used for operating activities:
Depreciation and depletion 29.8 31.2
Minority interests 7.0 3.9
Amortization of deferred financing
costs and discounts on long-term
debt 4.7 5.3
Net purchases of marketable
securities (17.3) (16.9)
Equity in losses (income) of
unconsolidated affiliates (1.8) 1.1
Incurrence of financing costs (.9) (17.1)
Extraordinary loss on early
extinguishment of debt, net - 5.4
Decrease (increase) in prepaid
expenses and other assets 43.6 (5.1)
Increase in receivables (55.6) (4.1)
Decrease in accrued interest (33.5) (25.8)
Decrease (increase) in inventories (32.1) 20.7
Decrease in payable to affiliates and
other liabilities (11.1) (5.7)
Increase in accrued and deferred
income taxes (5.9) (18.4)
Decrease in accounts payable (5.3) (9.4)
Other 5.7 (4.7)
-------- --------
Net cash used for operating
activities (73.7) (79.5)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net proceeds from disposition of property
and investments 2.8 5.1
Capital expenditures (16.7) (14.8)
Other (1.2) (3.5)
-------- --------
Net cash used for investing
activities (15.1) (13.2)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings (payments) under revolving
credit agreements 76.3 (190.8)
Proceeds from issuance of long-term debt 1.7 225.5
Principal payments on long-term debt (18.2) (14.9)
Dividends paid to Kaiser's minority
preferred stockholders (10.3) (3.8)
Redemption of preference stock (3.1) (7.4)
Proceeds from issuance of Kaiser preferred
stock - 100.4
-------- --------
Net cash provided by financing
activities 46.4 109.0
-------- --------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS (42.4) 16.3
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD 84.6 83.9
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 42.2 $ 100.2
======== ========
SUPPLEMENTARY SCHEDULE OF NON-CASH INVESTING
AND FINANCING ACTIVITIES:
Net margin borrowings (payments) for
marketable securities $ (5.6) $ 1.9
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Interest paid, net of capitalized interest $ 74.1 $ 64.1
Income taxes paid 4.3 2.4
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN MILLIONS OF DOLLARS, EXCEPT SHARE AMOUNTS)
1. GENERAL
The information contained in the following notes to the
consolidated financial statements is condensed from that which would appear
in the annual consolidated financial statements; accordingly, the
consolidated financial statements included herein should be reviewed in
conjunction with the consolidated financial statements and related notes
thereto contained in the Annual Report on Form 10-K filed by MAXXAM Inc.
with the Securities and Exchange Commission for the fiscal year ended
December 31, 1994 (the "Form 10-K"). All references to the "Company"
include MAXXAM Inc. and its subsidiary companies unless otherwise indicated
or the context indicates otherwise. Accounting measurements at interim
dates inherently involve greater reliance on estimates than at year end.
The results of operations for the interim periods presented are not
necessarily indicative of the results to be expected for the entire year.
The consolidated financial statements included herein are
unaudited; however, they include all adjustments of a normal recurring
nature which, in the opinion of management, are necessary to present fairly
the consolidated financial position of the Company at March 31, 1995 and
the consolidated results of operations and cash flows for the three months
ended March 31, 1995 and 1994. Certain reclassifications of prior period
information have been made to conform to the current presentation.
2. CASH AND CASH EQUIVALENTS
At March 31, 1995 and December 31, 1994, cash and cash
equivalents includes $4.8 and $19.4, respectively, which is restricted for
debt service payments on the 7.95% Timber Collateralized Notes due 2015.
3. INVENTORIES
Inventories consist of the following:<PAGE>
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
----------- -------------
<S> <C> <C>
Aluminum Operations:
Finished fabricated products $ 55.8 $ 49.4
Primary aluminum and work in
process 222.8 203.1
Bauxite and alumina 110.3 102.3
Operating supplies and repair and
maintenance parts 114.2 113.2
----------- -------------
503.1 468.0
----------- -------------
Forest Products Operations:
Lumber 64.2 61.3
Logs 5.1 12.1
----------- -------------
69.3 73.4
----------- -------------
$ 572.4 $ 541.4
=========== =============
</TABLE>
<PAGE>
4. LONG-TERM DEBT
Long-term debt consists of the following:
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
----------- -------------
<S> <C> <C>
Corporate:
14% Senior Subordinated Reset
Notes due May 20, 2000 $ 25.0 $ 25.0
12-1/2% Subordinated Debentures
due December 15, 1999, net
of discount 16.3 20.9
Other .2 .2
Aluminum Operations:
1994 Credit Agreement 84.0 6.7
9-7/8% Senior Notes due February
15, 2002, net of discount 223.7 223.6
Alpart CARIFA Loan 60.0 60.0
12-3/4% Senior Subordinated Notes
due February 1, 2003 400.0 400.0
Other 65.6 69.2
Forest Products Operations:
7.95% Timber Collateralized Notes
due July 20, 2015 355.6 363.8
11-1/4% Senior Secured Notes due
August 1, 2003 100.0 100.0
12-1/4% Senior Secured Discount
Notes due August 1, 2003,
net of discount 85.3 82.8
10-1/2% Senior Notes due March 1,
2003 235.0 235.0
Other .8 .9
Real Estate Operations:
Secured notes due December 31,
1999, interest at prime plus
3% 11.2 10.0
Other notes and contracts,
secured by
receivables, buildings, real
estate and equipment 16.7 18.1
----------- -------------
1,679.4 1,616.2
Less: current maturities (31.5) (33.7)
----------- -------------
$ 1,647.9 $ 1,582.5
=========== =============
</TABLE>
5. CREDIT FOR INCOME TAXES
The credit for income taxes for the three months ended March 31,
1995 includes a credit relating to reserves the Company no longer believes
are necessary.
6. PER SHARE INFORMATION
Per share calculations are based on the weighted average number
of common shares outstanding in each period and, if dilutive, weighted
average common equivalent shares assumed to be issued from the exercise of
common stock options based upon the average price of the Company's common
stock during the period.
<PAGE>
7. CONTINGENCIES
Environmental Contingencies
Kaiser Aluminum Corporation ("Kaiser," a majority owned
subsidiary of the Company) and its principal operating subsidiary, Kaiser
Aluminum & Chemical Corporation ("KACC"), are subject to a wide variety of
environmental laws and regulations and to fines or penalties assessed for
alleged breaches of the environmental laws and to claims and litigation
based on such laws. KACC is currently subject to a number of lawsuits
under the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended by the Superfund Amendments Reauthorization Act of
1986 ("CERCLA") and, along with certain other entities, has been named as a
potentially responsible party for remedial costs at certain third-party
sites listed on the National Priorities List under CERCLA.
Based on Kaiser's evaluation of these and other environmental
matters, Kaiser has established environmental accruals primarily related to
potential solid waste disposal and soil and groundwater remediation
matters. At March 31, 1995, the balance of such accruals, which is
primarily included in other noncurrent liabilities, was $40.8. These
environmental accruals represent Kaiser's estimate of costs reasonably
expected to be incurred based on presently enacted laws and regulations,
currently available facts, existing technology and Kaiser's assessment of
the likely remediation action to be taken. Kaiser expects that these
remediation actions will be taken over the next several years and estimates
that annual expenditures to be charged to these environmental accruals will
be approximately $3.0 to $11.0 for the years 1995 through 1999 and an
aggregate of approximately $11.0 thereafter.
As additional facts are developed and definitive remediation
plans and necessary regulatory approvals for implementation of remediation
are established or alternative technologies are developed, changes in these
and other factors may result in actual costs exceeding the current
environmental accruals. Kaiser believes that it is reasonably possible
that costs associated with these environmental matters may exceed current
accruals by amounts that could range, in the aggregate, up to approximately
$20.0. While uncertainties are inherent in the final outcome of these
environmental matters, and it is presently impossible to determine the
actual costs that ultimately may be incurred, management currently believes
that the resolution of such uncertainties should not have a material
adverse effect on the Company's consolidated financial position or results
of operations.
Asbestos Contingencies
KACC is a defendant in a number of lawsuits in which the
plaintiffs allege that certain of their injuries were caused by, among
other things, exposure to asbestos during, and as a result of, their
employment or association with KACC or exposure to products containing
asbestos produced or sold by KACC. The lawsuits generally relate to
products KACC has not manufactured for at least 15 years. At March 31,
1995, the number of such lawsuits pending was approximately 29,200.
Based on past experience and reasonably anticipated future
activity, KACC has established an accrual for estimated asbestos-related
costs for claims filed and estimated to be filed and settled through 2007.
KACC's accrual was calculated based on the current and anticipated number
of asbestos-related claims, the prior timing and amounts of asbestos-
related payments, the current state of case law related to asbestos claims
and the advice of counsel. Accordingly, an asbestos-related cost accrual
of $135.1, before considerations for insurance recoveries, is included
primarily in other noncurrent liabilities at March 31, 1995. KACC
estimates that annual future cash payments in connection with such
litigation will be approximately $11.0 to $13.0 for each of the years 1995
through 1999, and an aggregate of approximately
<PAGE>
$74.0 thereafter through 2007. KACC does not presently believe there is a
reasonable basis for estimating such costs beyond 2007 and, accordingly, no
accrual has been recorded for such costs which may be incurred beyond 2007.
KACC believes that it has insurance coverage available to recover
a substantial portion of its asbestos-related costs. While claims for
recovery from some of KACC's insurance carriers are currently subject to
pending litigation and other carriers have raised certain defenses, KACC
believes, based on prior insurance-related recoveries in respect of
asbestos-related claims, existing insurance policies and the advice of
counsel, that substantial recoveries from the insurance carriers are
probable. Accordingly, an estimated aggregate insurance recovery of $119.5,
determined on the same basis as the asbestos-related cost accrual, is
recorded primarily in long-term receivables and other assets at March 31,
1995.
While uncertainties are inherent in the final outcome of these
asbestos matters and it is presently impossible to determine the actual
costs that ultimately may be incurred and the insurance recoveries that
will be received, management currently believes that, based on the factors
discussed in the preceding paragraphs, the resolution of the asbestos-
related uncertainties and the incurrence of asbestos-related costs net of
related insurance recoveries should not have a material adverse effect on
the Company's consolidated financial position or results of operations.
Other Contingencies
The Company is involved in various other claims, lawsuits and
other proceedings relating to a wide variety of matters. While
uncertainties are inherent in the final outcome of such matters and it is
presently impossible to determine the actual costs that ultimately may be
incurred, management currently believes that the resolution of such
uncertainties and the incurrence of such costs should not have a material
adverse effect on the Company's consolidated financial position or results
of operations.
8. DERIVATIVE FINANCIAL INSTRUMENTS AND RELATED HEDGING PROGRAMS
KACC enters into primary metal hedging transactions with
off-balance sheet risk in the normal course of business. The prices
realized by Kaiser under certain sales contracts for alumina, primary
aluminum and fabricated aluminum products as well as the costs incurred by
Kaiser on certain items, such as aluminum scrap, rolling ingot, power
and bauxite, fluctuate with the market price of primary aluminum, together
resulting in a "net exposure" of earnings. The primary metal hedging
transactions are designed to mitigate the net exposure of earnings to
declines in the market price of primary aluminum, while retaining the
ability to participate in favorable environments that may materialize.
KACC has developed strategies which include forward sales of primary
aluminum at fixed prices and the purchase or sale of options for primary
aluminum. In this regard, in respect of its remaining 1995 anticipated net
exposure, at March 31, 1995, KACC had net forward sales contracts for
235,800 tons (all references to tons in this report refer to metric tons of
2,204.6 pounds) of primary aluminum at fixed prices, purchased call options
in respect of 47,250 tons of primary aluminum, purchased put options to
establish a minimum price for 160,250 tons of primary aluminum and entered
into option contracts that established a price range for 71,000 tons of
primary aluminum. In respect of its 1996 anticipated net exposure, at
March 31, 1995, KACC had sold forward 15,000 tons of primary aluminum at
fixed prices.
<PAGE>
KACC also enters into hedging transactions in the normal course
of business that are designed to reduce its exposure to fluctuations in
foreign exchange rates. At March 31, 1995, KACC had net forward foreign
exchange contracts totaling approximately $139.5 for the purchase of 192.0
Australian dollars through March 1997.
At March 31, 1995, the net unrealized loss on KACC's position in
aluminum forward sales and option contracts (based on a market price of
$1,859 per ton of primary aluminum) and forward foreign exchange contracts
was $16.3.
KACC has established margin accounts with its counterparties
related to aluminum forward sales and option contracts. KACC is entitled
to receive advances from counterparties related to unrealized gains and, in
turn, is required to make margin deposits with counterparties to cover
unrealized losses related to these contracts. At March 31, 1995, KACC had
$7.5, compared with $50.5 at December 31, 1994, on deposit with various
counterparties in respect of such unrealized losses. These amounts are
recorded in prepaid expenses and other current assets.
MAXXAM INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following should be read in conjunction with the response to
Part I, Item 1 of this Report and Items 7 and 8 of the Form 10-K. Any
capitalized terms used but not defined in this Item have the same meaning
given to them in the Form 10-K.
RESULTS OF OPERATIONS
The Company operates in three industries: aluminum, through its
majority owned subsidiary Kaiser, a fully integrated aluminum producer;
forest products, through MAXXAM Group Inc. ("MGI") and its wholly owned
subsidiaries, principally The Pacific Lumber Company ("Pacific Lumber") and
Britt Lumber Co., Inc. ("Britt"); and real estate investment and
development, principally through MAXXAM Property Company and various other
wholly owned subsidiaries.
ALUMINUM OPERATIONS
Kaiser's operating results are sensitive to changes in prices of
alumina, primary aluminum and fabricated aluminum products, and also depend
to a significant degree upon the volume and mix of all products sold and on
hedging strategies. Kaiser, through its principal subsidiary KACC,
operates in two business segments: bauxite and alumina, and aluminum
processing. Aluminum operations account for a substantial portion of the
Company's revenues and operating results. The following table presents
selected operational and financial information for the three months ended
March 31, 1995 and 1994. The information presented in the table is in
millions of dollars except shipments and prices.
<TABLE>
<CAPTION>
Three Months Ended
March 31,
----------------------------
1995 1994
------------ -------------
<S> <C> <C>
Shipments: (1)
Alumina 446.5 468.2
Aluminum products:
Primary aluminum 47.7 64.3
Fabricated aluminum products 94.5 96.8
------------ -----------
Total aluminum products 142.2 161.1
============ ===========
Average realized sales price:
Alumina (per ton) $ 197 $ 155
Primary aluminum (per pound) .81 .55
Net sales:
Bauxite and alumina:
Alumina $ 87.9 $ 72.5
Other (2) (3) 19.1 20.4
------------ -----------
Total bauxite and
alumina 107.0 92.9
------------ -----------
Aluminum processing:
Primary aluminum 85.0 77.3
Fabricated aluminum products 316.2 241.5
Other (3) 4.8 3.4
------------ -----------
Total aluminum
processing 406.0 322.2
------------ -----------
Total net sales $ 513.0 $ 415.1
============ ===========
Operating income (loss) $ 34.1 $ (24.1)
============ ===========
Income (loss) before income taxes,
minority interests and
extraordinary item $ 9.8 $ (43.4)
============ ===========
Capital expenditures $ 13.7 $ 9.6
============ ===========
<FN>
- --------------------
(1) Shipments are expressed in thousands of metric tons. A metric ton is
equivalent to 2,204.6 pounds.
(2) Includes net sales of bauxite.
(3) Includes the portion of net sales attributable to minority interests in
consolidated subsidiaries.
</TABLE>
<PAGE>
Net sales
Bauxite and alumina. Revenues from net sales to third parties
for the bauxite and alumina segment in the three months ended March 31,
1995 were 15% higher than in the three months ended March 31, 1994.
Revenues from alumina increased 21% in the three months ended March 31,
1995 from the three months ended March 31, 1994, principally due to
increased average realized prices, partially offset by lower shipments.
Aluminum processing. Revenues from net sales to third parties
for the aluminum processing segment in the three months ended March 31,
1995 were 26% higher than in the three months ended March 31, 1994.
Revenues from primary aluminum increased 10% in the three months ended
March 31, 1995 from the three months ended March 31, 1994, principally due
to higher average realized prices, significantly offset by decreased
shipments caused by the strike by the United Steelworkers of America
("USWA") discussed below and by a mid-1994 partial curtailment of
production at Kaiser's 90%-owned Valco smelter. Shipments of primary
aluminum to third parties were approximately 34% of total aluminum products
shipments in the three months ended March 31, 1995, compared to
approximately 40% in the three months ended March 31, 1994. Revenues from
fabricated aluminum products increased 31% in the three months ended March
31, 1995 from the three months ended March 31, 1994, due to higher average
realized prices, partially offset by lower shipments for most of these
products.
Operating income (loss)
Kaiser's corporate general and administrative expenses of $18.1
million and $17.2 million for the three months ended March 31, 1995 and
1994, respectively, were allocated by the Company to the bauxite and
alumina and aluminum processing segments based on those segments' ratio of
sales to unaffiliated customers.
First quarter results were adversely affected by (i) an eight-day
strike at five major domestic locations by the USWA, (ii) a six-day strike
by the National Workers Union at Kaiser's 65%-owned Alpart alumina refinery
in Jamaica, and (iii) a four-day disruption of alumina production at Alpart
caused by a boiler failure. The combined impact of these events on the
first quarter results was approximately $17.0 million in the aggregate (on
a pre-tax basis) principally from lower production volume and other related
costs.
Bauxite and alumina. This segment's operating loss was $1.8
million in the three months ended March 31, 1995 as compared to $5.6
million in the three months ended March 31, 1994, principally due to higher
revenues, partially offset by the effect of the strikes and boiler failure.
Aluminum processing. This segment had operating income of $35.9
million in the three months ended March 31, 1995, compared with an
operating loss of $18.5 million in the three months ended March 31, 1994,
principally due to higher revenues, partially offset by the effect of the
strike by the USWA.
Income (loss) before income taxes, minority interests and
extraordinary item
Income before income taxes, minority interests and extraordinary
item for the three months ended March 31, 1995, as compared to a loss for
the three months ended March 31, 1994, resulted from the improvement in
operating income previously described.
FOREST PRODUCTS OPERATIONS
The Company's forest products operations are conducted by MGI
through its principal operating subsidiaries. MGI's business is highly
seasonal in that the forest products business has historically
<PAGE>
experienced lower first and fourth quarter sales due largely to the general
decline in construction related activity during the winter months.
Accordingly, MGI's results for any one quarter are not necessarily
indicative of results to be expected for the full year. The following
table presents selected operational and financial information for the three
months ended March 31, 1995 and 1994. The information presented in the
table is in millions of dollars except shipments and prices.<PAGE>
<TABLE>
<CAPTION>
Three Months Ended
March 31,
----------------------------
1995 1994
------------ -------------
<S> <C> <C>
Shipments:
Lumber: (1)
Redwood upper grades 10.6 12.9
Redwood common grades 51.1 49.4
Douglas-fir upper grades 1.8 2.5
Douglas-fir common grades
and other 16.5 15.4
------------ -------------
Total lumber 80.0 80.2
============ =============
Logs (2) .5 5.5
============ =============
Wood chips (3) 46.9 30.3
============ =============
Average sales price:
Lumber: (4)
Redwood upper grades $ 1,544 $ 1,406
Redwood common grades 427 448
Douglas-fir upper grades 1,368 1,405
Douglas-fir common grades 379 460
Logs (4) 227 676
Wood chips (5) 89 71
Net sales:
Lumber, net of discount $ 46.9 $ 50.0
Logs .1 3.7
Wood chips 4.2 2.1
Cogeneration power .5 .6
Other .3 .3
------------ -------------
Total net sales $ 52.0 $ 56.7
============ =============
Operating income $ 12.6 $ 13.4
============ =============
Operating cash flow (6) $ 18.4 $ 19.2
============ =============
Income (loss) before income taxes,
minority interests and
extraordinary item $ (5.1) $ 2.0
============ =============
Capital expenditures $ 1.9 $ 4.0
============ =============
<FN>
- --------------------
(1) Lumber shipments are expressed in millions of board feet.
(2) Log shipments are expressed in millions of feet, net Scribner scale.
(3) Wood chip shipments are expressed in thousands of bone dry units of
2,400 pounds.
(4) Dollars per thousand board feet.
(5) Dollars per bone dry unit.
(6) Operating income before depletion and depreciation, also referred to as
"EBITDA."
</TABLE>
Shipments
Lumber shipments to third parties for the three months ended
March 31, 1995 were virtually unchanged from the three months ended March
31, 1994. Decreased shipments of upper grade redwood lumber were mostly
offset by increased shipments of redwood common lumber. Log shipments for
the three months ended March 31, 1995 were .5 million feet (net Scribner
scale), a decrease from 5.5 million feet for the three months ended March
31, 1994.
<PAGE>
Net sales
Revenues from net sales for the three months ended March 31, 1995
decreased as compared to the three months ended March 31, 1994. This
decrease was principally due to lower shipments of logs and upper grade
redwood lumber and decreases in the average realized prices for common
grade Douglas-fir and redwood common lumber, partially offset by increased
sales of wood chips, an increase in the average realized price for upper
grade redwood lumber and increased shipments of redwood common lumber.
Operating income
Operating income for the three months ended March 31, 1995
decreased as compared to the three months ended March 31, 1994. This
decrease was principally due to lower sales of lumber and logs, partially
offset by lower costs of lumber sales and increased sales of wood chips.
Costs of lumber sales decreased due to lower purchases of logs from third
parties and improved sawmill productivity.
Income (loss) before income taxes, minority interests and
extraordinary item
The loss before income taxes, minority interests and
extraordinary item for the three months ended March 31, 1995, as compared
to income for the three months ended March 31, 1994, resulted from a
decrease in investment, interest and other income and the decrease in
operating income as discussed above. Investment, interest and other income
for the three months ended March 31, 1994 included a franchise tax refund
of $7.2 million (the substantial portion of which represented interest)
from the State of California.
REAL ESTATE OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------------
1995 1994
----------- -----------
(In millions of dollars)
<S> <C> <C>
Net sales $ 16.3 $ 17.2
Operating loss (3.3) (1.9)
Loss before income taxes, minority
interests and extraordinary item (2.7) (1.3)
</TABLE>
Net sales
Net sales for the three months ended March 31, 1995 decreased
from the three months ended March 31, 1994. This decrease was primarily
due to lower sales at the Company's Palmas del Mar development in Puerto
Rico.
Operating loss
The operating loss for the three months ended March 31, 1995
increased from the three months ended March 31, 1994. This increase was
primarily due to lower sales of real estate.
Loss before income taxes, minority interests and extraordinary
item
The loss before income taxes, minority interests and
extraordinary item for the three months ended March 31, 1995 was $2.7
million, an increase from the three months ended March 31, 1994. This
increase was primarily due to the increased operating loss.
<PAGE>
OTHER ITEMS NOT DIRECTLY RELATED TO INDUSTRY SEGMENTS<PAGE>
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------
1995 1994
-------- ---------
(In millions of
dollars)
<S> <C> <C>
Operating loss $ (2.8) $ (2.4)
Loss before income taxes, minority
interests and extraordinary item (3.2) (4.4)
</TABLE>
Operating loss
The operating losses represent corporate general and
administrative expenses that are not allocated to the Company's industry
segments. The operating loss for the three months ended March 31, 1995 was
$2.8 million, an increase from the three months ended March 31, 1994. This
increase was primarily due to higher overhead costs.
Loss before income taxes, minority interests and extraordinary
item
The loss before income taxes, minority interests and
extraordinary item includes operating losses, investment, interest and
other income and interest expense, including amortization of deferred
financing costs, that are not allocated to the Company's industry segments.
The loss for the three months ended March 31, 1995 was $3.2 million, a
decrease from the three months ended March 31, 1994. This decrease was
primarily due to higher investment, interest and other income.
Minority interests
Minority interests represent the minority stockholders' interest
in the Company's aluminum operations.
FINANCIAL CONDITION AND INVESTING AND FINANCING ACTIVITIES
PARENT COMPANY
Certain of the Company's subsidiaries, principally Kaiser and
MGI, are restricted by their various debt agreements as to the amount of
funds that can be paid in the form of dividends or loaned to the Company.
KACC's 1994 Credit Agreement and the indentures governing the KACC Senior
Notes and the KACC Notes contain covenants which, among other things, limit
Kaiser's ability to pay cash dividends and restrict transactions between
Kaiser and its affiliates. Under the most restrictive of these covenants,
Kaiser is not currently permitted to pay dividends on its common stock.
The indenture governing the MGI Notes contains various covenants which,
among other things, limit the payment of dividends and restrict
transactions between MGI and its affiliates. As of March 31, 1995, under
the most restrictive of these covenants, approximately $3.3 million of
dividends could be paid by MGI. Under the most restrictive covenants
governing debt of the Company's real estate subsidiaries, approximately
$21.4 million could be paid as of March 31, 1995.
As of March 31, 1995, the Company (excluding its aluminum, forest
products and real estate subsidiary companies) had cash and marketable
securities of approximately $32.3 million and available borrowings under
its demand loan and pledge agreement of $25.0 million. See "--Investment
in Sam Houston Race Park" below. The Company believes that its existing
cash and marketable securities (excluding its aluminum, forest products and
real estate subsidiaries), together with the funds available to it, will be
sufficient to fund its working capital requirements for the foreseeable
future.
<PAGE>
ALUMINUM OPERATIONS
In March 1995, the 1994 Credit Agreement was amended by the
Second Amendment to Credit Agreement (the "Second Amendment"). The Second
Amendment provided, among other things, for an increase in the revolving
line of credit from $275.0 million to $325.0 million. At March 31, 1995,
$173.4 million (of which $57.5 million could have been used for letters of
credit) was available to KACC under the 1994 Credit Agreement.
Kaiser expects that cash flows from operations and borrowings
under available sources of financing will be sufficient to satisfy its
working capital and capital expenditures requirements for the foreseeable
future.
FOREST PRODUCTS OPERATIONS
MGI anticipates that cash flows from operations, together with
existing cash, marketable securities and available sources of financing,
will be sufficient to fund the working capital and capital expenditures
requirements of MGI and its respective subsidiaries for the foreseeable
future; however, due to its highly leveraged condition, MGI is more
sensitive than less leveraged companies to factors affecting its
operations, including governmental regulation affecting its timber
harvesting practices, increased competition from other lumber producers or
alternative building products and general economic conditions.
As of March 31, 1995, $20.0 million of borrowings was available
under Pacific Lumber's Revolving Credit Agreement, of which $5.0 million
was available for letters of credit. No borrowings were outstanding as of
March 31, 1995, and letters of credit outstanding amounted to $10.0
million. Pacific Lumber has signed a commitment letter with the bank which
will amend the Revolving Credit Agreement to extend its maturity date to
May 31, 1998 and provide for an additional $30.0 million of available
borrowings.
REAL ESTATE OPERATIONS
As of March 31, 1995, the Company's real estate subsidiaries had
approximately $28.4 million available for use under various credit
agreements. A substantial portion of the availability was attributable to
the credit availability pursuant to the loan agreement secured by real
properties, and certain loans secured by income producing real property.
INVESTMENT IN SAM HOUSTON RACE PARK
Since July 1993, the Company has, through various subsidiaries,
controlled the general partner of, and held an equity interest in, Sam
Houston Race Park, Ltd. ("SHRP"), which owns and operates a Class 1 horse
racing track in northwest Houston (the "Race Park"). On April 17, 1995
(the "Filing Date"), SHRP and its wholly owned subsidiary SHRP Capital
Corp. ("Capital"), together with SHRP Acquisition, Inc. ("SHRP
Acquisition"), a wholly owned subsidiary of the Company and SHRP's largest
limited partner, filed voluntary petitions in the United States Bankruptcy
Court for the District of Delaware (the "Bankruptcy Court"), case number
95-433 (HSB), each seeking to reorganize under the provisions of Chapter 11
of the United States Bankruptcy Code (the "Bankruptcy Code"). SHRP, Capital
and SHRP Acquisition also filed a consolidated plan of reorganization (the
"Plan") and a proposed disclosure statement relating to the Plan with the
Bankruptcy Court on April 21, 1995. SHRP, Capital and SHRP Acquisition are
currently being operated as debtors-in-possession under the Bankruptcy
Code. Prior to the Filing Date, certain of the
<PAGE>
holders of $75.0 million aggregate principal amount of SHRP's 11-3/4%
Senior Secured Notes (the "SHRP Notes") formed an unofficial committee (the
"Committee"), which Committee retained counsel and a financial advisor at
the expense of SHRP. The Committee represents in excess of two-thirds of
the aggregate principal amount of the SHRP Notes. The members of the Committee
have informed SHRP's general partner that they have not been appointed by,
and do not purport to act on behalf of, any holders of SHRP Notes other
than the members of the Committee. SHRP's general partner has reached an
agreement in principle with the Committee regarding a restructuring of the
SHRP Notes. The agreement in principle is reflected in the Plan and calls
for, among other things, a significant modification of the SHRP Notes (the
"New SHRP Notes"), an additional capital infusion and a reorganization of
SHRP (the "Reorganized SHRP").
The New SHRP Notes will have an aggregate principal amount of
$37.5 million, mature on September 1, 2001, and bear interest at the rate
of 11% per annum. The maturity date of the New SHRP Notes may be extended
to September 1, 2003 (with an increase in the rate of interest to 13%
percent per annum) if the Texas legislature passes off track betting or
significant gaming legislation during the 2001 legislative session.
Interest on the New SHRP Notes would accrue in-kind and not be payable in
cash until a certain level of cash flow from operations has been achieved.
Once cash interest payments commence, interest payments could not
thereafter be paid in-kind. Certain modifications would be made to the
existing covenants under the New SHRP Notes, including additional latitude
for SHRP to incur indebtedness and make investments in gaming,
entertainment and other ventures.
A new investor group (the "New SHRP Investor Group") would
provide additional capital which would include a cash infusion of $5.8
million (the amount necessary to fund SHRP's projected cash flow
requirements for the next three years). The current SHRP partnership
interests would be eliminated, although the current partners in SHRP would
be entitled to participate in the New SHRP Investor Group in proportion to
their prefiling interests in SHRP. An affiliate of the Company would
contribute to SHRP (for fair market value) an adjoining approximately 87
acre tract of land, a portion of which the Race Park utilizes for parking
by Race Park patrons. The New SHRP Investor Group would be required
to provide an unsecured line of credit for an additional $1.7 million to
fund future operating requirements, if necessary. Borrowings on the line
of credit would bear interest at 11% per annum and would be subordinate to
the New SHRP Notes. The Company would underwrite the capital infusion and
line of credit portion of the new investment. In addition, the Company and
its affiliates would be required to allow the holders of the New SHRP Notes
the opportunity to participate in up to 19.9% of any gaming ventures in
the Houston area by the Company and its affiliates.
The Reorganized SHRP would issue 33 1/3% of the equity in the
Reorganized SHRP to the holders of the New SHRP Notes (the "SHRP Noteholder
Equity"). The New SHRP Investor Group would receive 65 2/3% of the equity
in the Reorganized SHRP (the "Investor Group Equity"). The remaining 1% of
equity in the Reorganized SHRP would be issued to the new managing general
partner (which would be an affiliate of the Company). In the event of a
capital call by the Reorganized SHRP to fund operating losses, holders of
the New SHRP Notes could contribute New SHRP Notes in lieu of cash in order
to maintain their equity position in the Reorganized SHRP. So long as the
New SHRP Notes are outstanding, the holders of the SHRP Noteholder Equity
would be entitled to designate one-third of the directors of the managing
general partner of the Reorganized SHRP (the "SHRP Noteholder Directors"),
subject to the reasonable approval of the remaining directors. Certain
significant events (e.g. mergers, consolidations, the sale of all or the
substantial portion of SHRP's assets, reorganizations, incurrence of debt
in excess of $5.0 million and voluntary acts of insolvency) would require
the approval of a majority of all of the directors, including a majority of
the SHRP Noteholder Directors voting as a separate class.
The ultimate impact of the Chapter 11 proceedings on the results
of operations and financial position for each of SHRP, Capital and SHRP
Acquisition cannot be presently determined. The ability of each of SHRP,
Capital and SHRP Acquisition to continue in existence as going concerns is
dependent upon a successful reorganization under Chapter 11 of the Bankruptcy
Code. Management for each of SHRP, Capital and SHRP Acquisition believes
that a successful reorganization will be achieved; however, no assurance can be
given as to the timing or as to the terms of any such reorganization.
<PAGE>
TRENDS
ALUMINUM OPERATIONS
In March 1995, the Bonneville Power Administration (the "BPA")
offered to its industrial customers, including KACC, surplus firm power at
a discounted rate for the period April 1, 1995, through July 31, 1995, to
enable such customers to restart idle industrial loads. In April 1995,
KACC and the BPA entered into a contract for an amount of such power, and
KACC expects to restart one-half of an idle potline (approximately 9,000
tons of annual capacity) at its Tacoma, Washington, smelter in the near
future.
In February 1995, the BPA issued an initial rate increase
announcement which proposed a 5.4% increase to its direct service industry
customers (the "DSIs") to apply during a two-year period beginning October
1, 1995. In April 1995, the DSIs, including KACC, entered into agreements
with the BPA pursuant to which (i) the proposed 5.4% rate increase was
replaced by an agreed 4% rate increase to be in effect for the one-year
period October 1, 1995, through September 30, 1996, which will increase
production costs at KACC's Mead and Tacoma smelters by an aggregate of
approximately $4.0 million per year, based on the operating rate of those
smelters after the restart of one-half of a potline at the Tacoma smelter,
discussed above, (ii) the variable rate structure currently in effect was
extended through September 30, 1996, (iii) the BPA rate proceedings were
deferred, (iv) the DSIs waived their rights to assert certain claims in
respect of past interruptible service by the BPA, and (v) the BPA agreed to
allow each DSI to supply a portion of its requirement for electric power
from sources other than the BPA, up to 50% of its top quartile
(interruptible) service beginning October 1, 1995, and up to 100% of its
top quartile service beginning October 1, 1996, which will help to assure
the supply of power and encourage more competitive power rates.
Separately, the BPA has offered to contract with each of the DSIs to
provide transmission services for power purchased from sources other than
the BPA to replace all or any portion of the power now purchased from the
BPA under its existing power contract. The amount of power available from
the BPA under such an existing power contract would be permanently reduced
by the amount of power purchased from such other sources. KACC has entered
into a transmission services contract with the BPA, but has not now elected
to replace any portion of the power which it purchases from the BPA with
power from another source. These new arrangements may help to assure the
supply of power and encourage more competitive power rates.
FOREST PRODUCTS OPERATIONS
During the first quarter, severe weather conditions in northern
California hampered Pacific Lumber's timber harvesting operations and
shipments of lumber. Heavy rainfall impeded access to logging roads which
prevented normal harvesting operations, and caused extended rail shutdowns
and other transportation delays, thereby affecting deliveries and shipments
of lumber. Continued rainfall in April and early May created conditions
not conducive to conducting harvesting operations as Pacific Lumber had
initially planned. Timber harvesting is highly seasonal in that Pacific
Lumber conducts the material portion of its logging operations in the
months of April through November of each year; accordingly, log inventories
are generally at or near their lowest levels by the end of March.
Compounding the seasonally low log inventories and weather-related
constraints on its log supplies and deliveries, a temporary restraining
order ("TRO") was granted which required Pacific Lumber to cease all timber
harvesting operations on one of the few all-season harvest sites from which
it has been able to supplement its declining log inventories. A
preliminary injunction hearing was held on May 5, 1995 at which the court
did not issue a preliminary injunction or lift the TRO but took the matter
under advisement. Further, delays in the regulatory process have resulted
from both objections filed with, and litigation against, the CDF by
environmentally active groups regarding the CDF's actions with respect to
the CDF's timber harvesting plan ("THP") approval process in general, and
certain of Pacific Lumber's THPs in particular. Such delays have impeded
Pacific Lumber's ability to conduct normal timber harvesting operations on
its timberlands. This combination of seasonal operations, severe weather,
judicial action and regulatory delays forced Pacific Lumber to curtail
operations at one of its four sawmills, and to temporarily idle another
sawmill for the period from April 17 to May 2, 1995.
<PAGE>
Additional judicial actions adverse to Pacific Lumber, further
regulatory delays and/or continued inclement weather in northern California
could further exacerbate the problems experienced during the first quarter
and affect Pacific Lumber's results of operations in the second quarter.
Furthermore, the collective impact of such judicial actions and regulatory
delays, together with difficulties caused by bad weather, may again force
Pacific Lumber to temporarily idle or curtail operations at certain of its
lumber mills from time to time until it can secure an adequate supply of
logs to sustain operations.
RECENT ACCOUNTING PRONOUNCEMENT
In March 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of
("SFAS 121"). SFAS 121 requires that long-lived assets and certain
identifiable intangibles to be held and used by an entity be reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. If the sum of the
estimated future cash flows expected to result from the use and eventual
disposition of an asset is less than the carrying amount of the asset, an
impairment loss is recognized. Measurement of an impairment loss is based
on the fair value of the asset. SFAS 121 requires that long-lived assets
and certain identifiable intangibles to be disposed of be reported at the
lower of carrying amount or fair value less cost to sell. The Company is
required to adopt SFAS 121 no later than January 1, 1996. The Company is
currently evaluating certain of its real estate properties with respect to
application of SFAS 121; accordingly, the effect of SFAS 121 on the
Company's financial statements is not known at this time.<PAGE>
<PAGE>
MAXXAM INC.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Reference is made to Item 3 of the Form 10-K for information
concerning material legal proceedings with respect to the Company. The
following material developments have occurred with respect to such legal
proceedings. Any capitalized or italicized terms used but not defined in
this Item have the same meaning given to them in the Form 10-K.
In connection with the Miller action, on April 10, 1995, the U.S.
Ninth Circuit Court of Appeals reversed the dismissal of this case; the
appellate court made other findings reversing in part and
affirming in part the other decisions made by the U.S. District Court in
response to plaintiffs' and defendants' motions for summary judgment.
Defendants have sought rehearing of this decision by the U.S. Circuit Court
of Appeals. Presently, the U.S. Ninth Circuit Court of Appeal has formal
jurisdiction of the case and it is uncertain whether the case will be
remanded to the U.S. District Court for trial preparation and trial on the
merits while the motion for rehearing or any further appeal is pending.
RANCHO MIRAGE LITIGATION
In connection with the In Re: MAXXAM Inc./Federated Development
Shareholders Litigation, the Court has scheduled a hearing for May 24,
1995, to consider defendants' motions to dismiss certain of plaintiffs'
claims. In connection with the similar NL Industries Inc., et al. v.
Federated Development Co., et al. action, the parties have agreed to stay
this action pending proceedings in the In Re: MAXXAM Inc./Federated
Development Shareholders Litigation.
ITEM 5. OTHER INFORMATION
On March 27, 1995, the United States Department of Justice issued
Civil Investigative Demand No. 12503 (the "CID"), as part of an industry-
wide investigation, requesting information from KACC regarding (i) any
actual or contemplated changes in its method of pricing can stock from
January 1, 1994, through March 31, 1995, (ii) the percentage of aluminum
scrap and primary aluminum ingot used by KACC to produce can stock and the
manner in which KACC's cost of acquiring aluminum scrap is factored into
its can stock prices, and (iii) any communications with others regarding
any actual or contemplated changes in its method of pricing can stock from
January 1, 1994, through March 31, 1995. KACC is gathering documents and
preparing interrogatory answers in order to comply with the CID.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A. EXHIBITS:
10.1 Form of Kaiser 1995 Employee Incentive
Compensation Program (incorporated herein by
reference to Exhibit 10.1 to the
Quarterly Report on Form 10-Q of Kaiser Aluminum
Corporation for the quarter ended March 31, 1995;
File No. 1-9447)
*11 Computation of Net Loss Per Common and Common
Equivalent Share
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (CONTINUED)
*27 Financial Data Schedule
--------------------
* Included with this filing.
B. REPORTS ON FORM 8-K:
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized, who has signed this report on
behalf of the Registrant and as the principal accounting officer of the
Registrant.
MAXXAM INC.
Date: May 15, 1995 By: TERRY L. FREEMAN
Terry L. Freeman
Assistant Controller
EXHIBIT 11
MAXXAM INC.
COMPUTATION OF NET LOSS PER COMMON AND
COMMON EQUIVALENT SHARE
(IN MILLIONS OF DOLLARS, EXCEPT SHARE AND PER SHARE AMOUNTS)<PAGE>
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------------------
1995 1994
------------- -------------
<S> <C> <C>
Weighted average common and common
equivalent shares outstanding during
each period 9,376,703 9,376,703
Common equivalent shares attributable to
stock options and convertible
securities 71,175 71,175
------------- -------------
Total common and common equivalent
shares 9,447,878 9,447,878
============= =============
Loss before extraordinary item $ (1.0) $ (34.5)
Extraordinary item - (5.4)
------------- -------------
Net loss $ (1.0) $ (39.9)
============= =============
Per common and common equivalent share:
Loss before extraordinary item $ (.11) $ (3.65)
Extraordinary item - (.57)
------------- -------------
Net loss $ (.11) $ (4.22)
============= =============
</TABLE>
<TABLE> <S> <C>
<CAPTION>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial information extracted
from the Company's consolidated balance sheet and consolidated
statement of operations and is qualified in its entirety by
reference to such consolidated financial statements together with
the related footnotes thereto.
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<EXCHANGE-RATE> 1
<CASH> 42,200
<SECURITIES> 53,600
<RECEIVABLES> 223,200
<ALLOWANCES> 4,700
<INVENTORY> 572,400
<CURRENT-ASSETS> 1,094,600
<PP&E> 1,825,000
<DEPRECIATION> 604,400
<TOTAL-ASSETS> 3,736,700
<CURRENT-LIABILITIES> 607,800
<BONDS> 1,679,400
<COMMON> 5,000
0
300
<OTHER-SE> (281,200)
<TOTAL-LIABILITY-AND-EQUITY> 3,736,700
<SALES> 581,300
<TOTAL-REVENUES> 581,300
<CGS> 468,300
<TOTAL-COSTS> 468,300
<OTHER-EXPENSES> 72,400
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 45,400
<INCOME-PRETAX> (1,200)
<INCOME-TAX> (7,200)
<INCOME-CONTINUING> (1,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,000)
<EPS-PRIMARY> (.11)
<EPS-DILUTED> (.11)
</TABLE>
