UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
---------------
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996
Commission File Number 1-8857
MAXXAM GROUP INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 13-1310680
(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, 1996: 100
Registrant meets the conditions set forth in General Instruction
H(1)(a) and (b) of Form 10-Q and is therefore filing this Form with the
reduced disclosure format.
MAXXAM GROUP INC.
INDEX
PART I. - FINANCIAL INFORMATION PAGE
Item 1. Financial Statements
Consolidated Balance Sheet at March 31, 1996 and
December 31, 1995 3
Consolidated Statement of Operations for the three months
ended March 31, 1996 and 1995 4
Consolidated Statement of Cash Flows for the three months
ended March 31, 1996 and 1995 5
Condensed Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
PART II. - OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
Signatures S-1
MAXXAM GROUP INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(In thousands of dollars, except share amounts)
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
------------ ------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 55,841 $ 48,396
Marketable securities 16,187 36,568
Receivables:
Trade 14,538 20,576
Other 2,261 1,624
Inventories 73,144 77,904
Prepaid expenses and other current assets 6,858 7,101
------------ ------------
Total current assets 168,829 192,169
Timber and timberlands, net of depletion of $207,478 and $204,856 at March 31,
1996 and December 31, 1995, respectively 335,613 337,390
Property, plant and equipment, net of accumulated depreciation of $69,887 and
$67,732 at March 31, 1996 and December 31, 1995, respectively 99,904 100,142
Deferred financing costs, net 26,524 27,288
Deferred income taxes 58,407 58,485
Restricted cash 31,067 31,367
Other assets 5,538 5,542
------------ ------------
$ 725,882 $ 752,383
============ ============
LIABILITIES AND STOCKHOLDER'S DEFICIT
Current liabilities:
Accounts payable $ 4,348 $ 4,166
Accrued interest 9,302 25,354
Accrued compensation and related benefits 7,500 9,611
Deferred income taxes 10,244 10,244
Other accrued liabilities 2,830 4,435
Long-term debt, current maturities 14,415 14,195
------------ ------------
Total current liabilities 48,639 68,005
Long-term debt, less current maturities 758,398 764,310
Other noncurrent liabilities 34,066 33,813
------------ ------------
Total liabilities 841,103 866,128
------------ ------------
Contingencies
Stockholder's deficit:
Common stock, $.08-1/3 par value; 1,000 shares authorized; 100 shares issued -- --
Additional capital 81,287 81,287
Accumulated deficit (196,508) (195,032)
------------ ------------
Total stockholder's deficit (115,221) (113,745)
------------ ------------
$ 725,882 $ 752,383
============ ============
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
MAXXAM GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------------
1996 1995
------------ ------------
(In thousands of dollars)
<S> <C> <C>
Net sales:
Lumber and logs $ 54,725 $ 46,983
Other 5,079 4,985
------------ ------------
59,804 51,968
------------ ------------
Operating expenses:
Costs of goods sold (exclusive of depletion and depreciation) 33,078 29,470
Selling, general and administrative 3,630 4,092
Depletion and depreciation 6,679 5,983
------------ ------------
43,387 39,545
------------ ------------
Operating income 16,417 12,423
Other income (expense):
Investment, interest and other income 3,298 1,802
Interest expense (19,498) (19,523)
------------ ------------
Income (loss) before income taxes 217 (5,298)
Credit (provision) in lieu of income taxes (93) 2,006
------------ ------------
Net income (loss) $ 124 $ (3,292)
============ ============
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
MAXXAM GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------------
1996 1995
------------ ------------
(In thousands of dollars)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 124 $ (3,292)
Adjustments to reconcile net income (loss) to net cash provided by (used for)
operating activities:
Net sales (purchases) of marketable securities 21,579 (11,258)
Depletion and depreciation 6,679 5,983
Amortization of deferred financing costs and discounts on long-term debt 3,566 3,231
Net gains on marketable securities (1,198) (656)
Decrease in receivables 5,401 11,725
Decrease in inventories, net of depletion 2,901 2,949
Decrease (increase) in prepaid expenses and other current assets 247 (1,331)
Increase in accounts payable 182 60
Decrease (increase) in accrued and deferred income taxes 93 (1,879)
Decrease in accrued interest (16,052) (16,239)
Decrease in other liabilities (3,478) (1,703)
Other (5) 406
------------ ------------
Net cash provided by (used for) operating activities 20,039 (12,004)
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net proceeds from sale of assets 42 14
Capital expenditures (2,842) (1,884)
------------ ------------
Net cash used for investing activities (2,800) (1,870)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Restricted cash deposits, net 300 77
Principal payments on long-term debt (8,494) (8,237)
Dividends paid (1,600) --
------------ ------------
Net cash used for financing activities (9,794) (8,160)
------------ ------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 7,445 (22,034)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 48,396 48,575
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 55,841 $ 26,541
============ ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid, net of capitalized interest $ 31,984 $ 32,531
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
MAXXAM GROUP INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of dollars)
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
Group Inc. with the Securities and Exchange Commission for the fiscal
year ended December 31,1995 (the "Form 10-K"). All references to the
"Company" or "MGI" include MAXXAM Group 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,
1996 and the consolidated results of operations and cash flows for the
three months ended March 31, 1996 and 1995. Certain reclassifications
of prior period information have been made to conform to the current
presentation. The Company is a wholly owned subsidiary of MAXXAM Inc.
("MAXXAM").
2. RESTRICTED CASH
Restricted cash represents the amount deposited into an
account held by the Trustee under the indenture governing the Timber Notes
of the Company's indirect wholly owned subsidiary, Scotia Pacific Holding
Company ("Scotia Pacific").
At March 31, 1996 and December 31, 1995, cash and cash
equivalents also includes $4,578 and $19,742, respectively, which is
restricted for debt service payments on the succeeding Note Payment date
for the Timber Notes.
3. INVENTORIES
Inventories consist of the following:
March 31, December 31,
1996 1995
------------ ------------
Lumber $ 59,100 $ 59,563
Logs 14,044 18,341
------------ ------------
$ 73,144 $ 77,904
============ ============
4. LONG-TERM DEBT
Long-term debt consists of the following:
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
------------ ------------
<S> <C> <C>
7.95% Scotia Pacific Timber Collateralized Notes due July 20, 2015 $ 341,740 $ 350,233
11-1/4% MGI Senior Secured Notes due August 1, 2003 100,000 100,000
12-1/4% MGI Senior Secured Discount Notes due August 1, 2003, net of discount 95,300 92,498
10-1/2% Pacific Lumber Senior Notes due March 1, 2003 235,000 235,000
Other 773 774
------------ ------------
772,813 778,505
Less: current maturities (14,415) (14,195)
------------ ------------
$ 758,398 $ 764,310
============ ============
</TABLE>
5. CONTINGENCIES
The Company's forest products operations are primarily
conducted by The Pacific Lumber Company ("Pacific Lumber") and are
subject to a variety of California and federal laws and regulations
dealing with timber harvesting, endangered species and critical habitat,
and air and water quality. While the Company does not expect that Pacific
Lumber's compliance with such existing laws and regulations will have a
material adverse effect on the Company's consolidated financial
position, results of operations or liquidity, Pacific Lumber is subject to
certain pending matters, including the pending final designation of
critical habitat for the marbled murrelet (described below), which could
have a material adverse effect on the Company's consolidated financial
position, results of operations or liquidity. Moreover, the laws and
regulations relating to the Company's forest products operations are
modified from time to time and are subject to judicial and administrative
interpretation. There can be no assurance that certain pending or future
governmental regulations, legislation or judicial or administrative
decisions would not materially and adversely affect Pacific Lumber or its
ability to sell lumber, logs or timber (see below).
In 1995, the U.S. Fish and Wildlife Service (the "USFWS")
published its proposed final designation ("Proposed Designation") of
critical habitat for the marbled murrelet, seeking to designate over
four million acres as critical habitat for the marbled murrelet,
including approximately 33,000 acres of Pacific Lumber's timberlands.
The Proposed Designation was subject to a 60-day comment period and
Pacific Lumber filed comments vigorously opposing the Proposed
Designation. The USFWS has not yet published its final designation of
critical habitat for the marbled murrelet but is under court order to do
so by May 15, 1996. Pacific Lumber is unable to predict when or if it
will be able to harvest on any acreage finally designated as critical
habitat. Furthermore, it is impossible for the Company to determine the
potential adverse impact of such designation on the Company's
consolidated financial position, results of operations or liquidity
until such time as the Proposed Designation is finalized and related
regulatory and legal issues are fully resolved. However, if Pacific
Lumber is unable to harvest, or is severely limited in harvesting, on
timberlands designated as marbled murrelet critical habitat, such
restrictions could have a material adverse effect on the Company's
consolidated financial position, results of operations or liquidity. If
Pacific Lumber is unable to harvest or is severely limited in
harvesting, it intends to seek full compensation from the appropriate
governmental agencies on the grounds that such restrictions constitute a
governmental taking.
There continue to be other regulatory actions and lawsuits
seeking to have various other species listed as threatened or endangered
under the federal Endangered Species Act and/or the California
Endangered Species Act and to designate critical habitat for such
species. It is uncertain what impact, if any, such listings and/or
designations of critical habitat would have on the Company's
consolidated financial position, results of operations or liquidity.
In 1994, the California Board of Forestry ("BOF") adopted
certain regulations regarding compliance with long-term sustained yield
objectives. These regulations require timber companies to project the
average annual growth they will have on their timberlands during the
last decade of a 100-year planning period ("Projected Annual Growth").
During any rolling ten-year period, the average annual harvest over such
ten-year period may not exceed Projected Annual Growth. The first
ten-year period began in May 1994. Pacific Lumber is required to
submit, by October 1996, a plan setting forth, among other things, its
Projected Annual Growth. Pacific Lumber has not completed its analysis
of the projected productivity of its timberlands and is therefore unable
to predict the impact that these regulations will have on its future
timber harvesting practices; however, the final results of this analysis
could require Pacific Lumber to reduce (or permit it to increase) its
timber harvest in future years from the average annual harvest that it
has experienced in recent years. Pacific Lumber believes that it would
be able to mitigate the effect of any required reduction in harvest
level by acquisitions of additional timberlands and by increasing the
productivity of its timberlands, although there can be no assurance that
it would be able to do so. The Company is unable to predict the
ultimate impact the sustained yield regulations will have on its future
consolidated financial position, results of operations or liquidity.
Various groups and individuals have filed objections with the
California Department of Forestry ("CDF") and the BOF regarding the
CDF's and the BOF's actions and rulings with respect to certain of the
Company's timber harvesting plans ("THPs"), and the Company expects that
such groups and individuals will continue to file objections to certain
of the Company's THPs. In addition, lawsuits are pending which seek to
prevent the Company from implementing certain of its approved THPs and
other harvesting operations. These challenges have severely restricted
Pacific Lumber's ability to harvest old growth timber on its property.
To date, challenges with respect to the Company's THPs relating to young
growth timber have been limited; however, no assurance can be given as
to the extent of such challenges in the future. The Company believes
that environmentally focused challenges to its THPs are likely to occur
in the future, particularly with respect to virgin and residual old
growth timber. Although such challenges have delayed or prevented the
Company from conducting a portion of its operations, they have not had a
material adverse effect on the Company's consolidated financial
position, results of operations or liquidity. It is, however,
impossible to predict the future nature or degree of such challenges or
their ultimate impact on the Company's consolidated financial position,
results of operations or liquidity.
The Company is also involved in various claims, lawsuits and
proceedings relating to a wide variety of other matters. While there
are uncertainties inherent in the ultimate outcome of such matters and
it is impossible to determine the ultimate costs that may be incurred,
management 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, results of operations or
liquidity.
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's business is seasonal in that the Company
generally experiences lower first quarter sales due largely to the
general decline in construction-related activity during the winter
months. Accordingly, the Company'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, 1996 and 1995.
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------------------
1996 1995
-------------- --------------
(In millions of dollars,
except shipments and prices)
<S> <C> <C>
Shipments:
Lumber: (1)
Redwood upper grades 10.4 10.6
Redwood common grades 57.3 51.1
Douglas-fir upper grades 2.2 1.8
Douglas-fir common grades and other 21.2 16.5
-------------- --------------
Total lumber 91.1 80.0
============== ==============
Logs (2) 5.9 .5
============== ==============
Wood chips (3) 49.0 46.9
============== ==============
Average sales price:
Lumber: (4)
Redwood upper grades $ 1,386 $ 1,544
Redwood common grades 482 427
Douglas-fir upper grades 1,153 1,368
Douglas-fir common grades 378 379
Logs (4) 469 227
Wood chips (5) 87 89
Net sales:
Lumber, net of discount $ 51.9 $ 46.9
Logs 2.8 .1
Wood chips 4.3 4.2
Cogeneration power .4 .5
Other .4 .3
--------------- --------------
Total net sales $ 59.8 $ 52.0
=============== ==============
Operating income $ 16.4 $ 12.4
=============== ==============
Operating cash flow (6) $ 23.1 $ 18.4
=============== ==============
Income (loss) before income taxes $ .2 $ (5.3)
=============== ==============
Net income (loss) $ .1 $ (3.3)
=============== ==============
- ---------------
<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."<PAGE>
</TABLE>
Shipments
Lumber shipments to third parties for the three months ended
March 31, 1996 increased by 14% from the three months ended March 31,
1995, principally due to increased shipments of redwood common lumber
and common and upper grade Douglas-fir lumber. Log shipments for the
same periods were 5.9 million feet (net Scribner scale) and .5 million
feet, respectively.
Net sales
Net sales for the three months ended March 31, 1996 increased
from the three months ended March 31, 1995, principally due to higher
average realized prices and increased shipments of redwood common
lumber, higher average realized prices and increased shipments of logs,
and increased shipments of Douglas-fir common lumber, offset by lower
average realized prices for upper grade redwood and Douglas-fir lumber.
Shipments of fencing and other value-added common lumber products from
Pacific Lumber's new remanufacturing facility were a contributing factor
in the improved redwood common lumber realizations.
Operating income
Operating income for the three months ended March 31, 1996,
which increased from the three months ended March 31, 1995, reflects the
improvement in net sales as discussed above.
Income (loss) before income taxes
Income before income taxes for the three months ended March
31, 1996, compared to the loss before income taxes for the three months
ended March 31, 1995, resulted primarily from an increase in operating
income as discussed above.
FINANCIAL CONDITION AND INVESTING AND FINANCING ACTIVITIES
The Company conducts its operations through its principal
operating subsidiaries, Pacific Lumber and Britt Lumber Co., Inc.
The indentures governing the Pacific Lumber Senior Notes and
the Timber Notes and Pacific Lumber's Revolving Credit Agreement contain
various covenants which, among other things, limit the payment of
dividends and restrict transactions between Pacific Lumber and its
affiliates. As of March 31, 1996, under the most restrictive of these
covenants, approximately $21.5 million of dividends could be paid by
Pacific Lumber.
As of March 31, 1996, $46.9 million of borrowings was
available under Pacific Lumber's Revolving Credit Agreement, of which
$3.4 million was available for letters of credit and $30.0 million for
timberland acquisitions. No borrowings were outstanding as of March 31,
1996, and letters of credit outstanding amounted to $11.6 million.
The indenture governing the MGI Notes, among other things,
restricts the ability of the Company to incur additional indebtedness,
engage in transactions with affiliates, pay dividends and make
investments. In January 1996, the Company paid dividends of $1.6
million. As of March 31, 1996, under the most restrictive of these
covenants, an additional $.4 million of dividends could be paid by the
Company.
As of March 31, 1996, the Company had consolidated long-term
debt of $727.3 million (net of current maturities and restricted cash
deposited in the Liquidity Account) as compared to $732.9 million at
December 31, 1995. The decrease in long-term debt was primarily due to
principal payments on the Timber Notes. The Company and its
subsidiaries anticipate that cash flow from operations, together with
existing cash, cash equivalents, marketable securities and available
sources of financing, will be sufficient to fund their working capital
and capital expenditure requirements for the next year. With respect to
their long-term liquidity, the Company and its subsidiaries believe that
their existing cash and cash equivalents, together with their ability to
generate sufficient cash flow from operations and obtain both short and
long-term financing, should provide sufficient funds to meet their
working capital and capital expenditure requirements. However, due to
their highly leveraged condition, the Company and its subsidiaries are
more sensitive than less leveraged companies to factors affecting their
operations, including litigation and governmental regulation affecting
their timber harvesting practices, increased competition from other
lumber producers or alternative building products and general economic
conditions.
TRENDS
The Company's forest products operations are primarily
conducted by Pacific Lumber and are subject to a variety of California
and federal laws and regulations dealing with timber harvesting,
endangered species and critical habitat, and air and water quality. While
the Company does not expect that Pacific Lumber's compliance with such
existing laws and regulations will have a material adverse effect on the
Company's consolidated financial position, results of operations or
liquidity, Pacific Lumber is subject to certain pending matters, including
the pending final designation of critical habitat for the marbled murrelet
(see Note 5 to the Consolidated Financial Statements set forth in Part I,
Item 1 of this Report), which could have a material adverse effect on the
Company's consolidated financial position, results of operations or
liquidity. Moreover, the laws and regulations relating to the Company's
forest products operations are modified from time to time and are subject
to judicial and administrative interpretation. There can be no assurance
that certain pending or future governmental regulations, legislation or
judicial or administrative decisions would not materially and adversely
affect Pacific Lumber or its ability to sell lumber, logs or timber. See
also Note 5 to the Consolidated Financial Statements set forth in Part I,
Item 1 of this Report.
Judicial or regulatory actions adverse to Pacific Lumber,
increased regulatory delays and inclement weather in northern
California, independently or collectively, could impair Pacific Lumber's
ability to maintain adequate log inventories and force Pacific Lumber to
temporarily idle or curtail operations at certain of its lumber mills
from time to time.
See also Part II, Item 1. "Legal Proceedings -- Timber
Harvesting Litigation" regarding a government takings action recently
filed by a subsidiary of Pacific Lumber and additional takings claims
which could be filed by Pacific Lumber and its subsidiaries.
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.
TIMBER HARVESTING LITIGATION
In connection with the Kayes/Miller actions and the DOL civil
action, a definitive agreement has been reached and approved by the
Board of Directors of Pacific Lumber and MAXXAM. The principal terms of
the proposed settlement involve the payment to class plaintiffs and
their counsel of $7.0 million in cash by Pacific Lumber in exchange for
full releases by the plaintiffs of defendants and dismissal of the
Kayes/Miller and DOL actions. In addition, the Court has scheduled a
hearing for preliminary approval of the settlement agreement on May 10,
1996, and a final hearing on the settlement agreement on July 12, 1996.
In connection with the Marbled Murrelet action, on April 3,
1996, the Court granted a preliminary injunction preventing harvesting
on the eight THPs to the extent each relies on the Owl Plan; Pacific
Lumber is appealing the preliminary injunction.
On April 22, 1996, Salmon Creek Corporation, a wholly owned
subsidiary of Pacific Lumber ("Salmon Creek"), filed a lawsuit entitled
Salmon Creek Corporation v. California State Board of Forestry, et al.
(No. 96CS01057) in the Superior Court of Sacramento County. This action
seeks to overturn the BOF's decision denying approval of a THP for
approximately 8 acres of virgin old growth timber in the area commonly
known as the Headwaters Forest. Salmon Creek seeks a court order
requiring approval of the THP so that it may harvest in accordance with
the THP. Salmon Creek also seeks constitutional "just compensation"
damages to the extent that its old growth timber within and surrounding
the THP has been "taken" by reason of this regulatory denial and
previous actions of governmental authorities. In addition, on May 7, 1996,
Pacific Lumber, Scotia Pacific and Salmon Creek filed a lawsuit entitled
The Pacific Lumber Company, et. al. v. The United States of America
in the United States Court of Federal Claims. The suit alleges that
the federal government has "taken" over 3,800 acres of Pacific Lumber's old
growth timberlands through its application of the ESA (including the
Headwaters Forest). Pacific Lumber, Scotia Pacific and Salmon Creek seek
constitutional "just compensation" damages for the taking of these
timberlands by the federal government's actions. The Company is uncertain
as to the timing or the ultimate resolution of the foregoing actions.
Pacific Lumber and its subsidiaries intend to file additional takings
claims with respect to any of their timberlands which are finally
designated as critical habitat for the marbled murrelet.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A. EXHIBITS:
27 Financial Data Schedule
B. REPORTS ON FORM 8-K:
None.
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 GROUP INC.
Date: May 8, 1996 By: /S/ GARY L. CLARK
----------------------------------------
Gary L. Clark
Vice President
<TABLE> <S> <C>
<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.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<EXCHANGE-RATE> 1
<CASH> 55,841
<SECURITIES> 16,187
<RECEIVABLES> 14,538
<ALLOWANCES> 0
<INVENTORY> 73,144
<CURRENT-ASSETS> 168,829
<PP&E> 169,791
<DEPRECIATION> 69,887
<TOTAL-ASSETS> 725,882
<CURRENT-LIABILITIES> 48,639
<BONDS> 772,813
0
0
<COMMON> 0
<OTHER-SE> (115,221)
<TOTAL-LIABILITY-AND-EQUITY> 725,882
<SALES> 59,804
<TOTAL-REVENUES> 59,804
<CGS> 33,078
<TOTAL-COSTS> 33,078
<OTHER-EXPENSES> 10,309
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 19,498
<INCOME-PRETAX> 217
<INCOME-TAX> 93
<INCOME-CONTINUING> 124
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 124
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
