UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-10239
PLUM CREEK TIMBER COMPANY, L.P.
(Exact name of registrant as specified in its charter)
Delaware 91-1443693
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
999 Third Avenue, Seattle, Washington 98104-4096
Telephone: (206) 467-3600
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
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PLUM CREEK TIMBER COMPANY, L.P.
COMBINED STATEMENT OF INCOME
(UNAUDITED)
<TABLE>
Quarter Ended March 31,
------------------------------
1998 1997
---- ----
(In Thousands, Except Per Unit)
<S> <C> <C>
Revenues.......................... $ 164,325 $ 171,248
--------- --------
Costs and Expenses:
Cost of Goods Sold.............. 118,644 117,484
Selling, General and
Administrative................ 9,640 10,542
--------- --------
Total Costs and Expenses.... 128,284 128,026
--------- --------
Operating Income.................. 36,041 43,222
Interest Expense.................. (14,973) (15,465)
Interest Income................... 238 257
Other Expense - Net............... 1 (238)
--------- --------
Income before Income Taxes........ 21,307 27,776
Provision for Income Taxes........ 27 418
--------- --------
Net Income........................ $ 21,280 $ 27,358
General Partner Interest.......... 8,099 7,211
--------- --------
Net Income Allocable to
Unitholders....................... $ 13,181 $ 20,147
========== =========
Net Income per Unit............... $ 0.28 $ 0.43
========== =========
</TABLE>
See accompanying Notes to Combined Financial Statements
PLUM CREEK TIMBER COMPANY, L. P.
COMBINED BALANCE SHEET
(UNAUDITED)
<TABLE>
March 31, December 31,
1998 1997
---- ----
(In Thousands)
<S> <C> <C>
ASSETS
Current Assets:
Cash and Cash Equivalents....... $ 125,535 $ 135,381
Accounts Receivable............. 35,074 28,698
Inventories..................... 55,686 58,956
Timber Contract Deposits........ 4,781 3,711
Other Current Assets............ 6,154 5,508
--------- --------
227,230 232,254
Timber and Timberlands - Net...... 880,061 887,694
Property, Plant and
Equipment - Net................. 166,854 163,556
Other Assets...................... 15,859 17,393
--------- --------
Total Assets................. $1,290,004 $ 1,300,897
========== ===========
LIABILITIES
Current Liabilities:
Current Portion of
Long-Term Debt.................. $ 18,400 $ 18,400
Accounts Payable................ 12,093 12,990
Interest Payable................ 17,137 9,556
Wages Payable................... 10,928 17,156
Taxes Payable................... 6,604 4,757
Workers' Compensation
Liabilities................... 1,450 1,450
Other Current Liabilities....... 9,202 9,683
--------- --------
75,814 73,992
Long-Term Debt.................... 584,000 584,000
Line of Credit.................... 161,000 161,000
Workers' Compensation Liabilities. 8,414 8,466
Other Liabilities................. 3,146 3,102
--------- --------
Total Liabilities............... 832,374 830,560
--------- --------
Commitments and Contingencies
PARTNERS' CAPITAL
Limited Partners' Units........... 457,527 469,824
General Partner................... 103 513
--------- --------
Total Partners' Capital......... 457,630 470,337
--------- --------
Total Liabilities and
Partners' Capital............. $1,290,004 $1,300,897
========== ===========
</TABLE>
See accompanying Notes to Combined Financial Statements
PLUM CREEK TIMBER COMPANY, L. P.
COMBINED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
Quarter Ended March 31,
------------------------------
1998 1997
---- ----
(In Thousands)
<S> <C> <C>
Cash Flows From Operating Activities:
Net Income........................ $ 21,280 $ 27,358
Adjustments to Reconcile
Net Income to
Net Cash Provided
By Operating Activities:
Depreciation, Depletion
and Amortization............. 16,383 16,929
Gain on Asset Dispositions - Net (28) (13)
Working Capital Changes:
Accounts Receivable.......... (6,376) (9,259)
Inventories.................. 3,270 2,616
Timber Contract Deposits and
Other Current Assets....... (1,716) 8,211
Accounts Payable............. (897) (4,394)
Other Accrued Liabilities.... 2,719 9,764
Other.......................... 1,550 138
--------- --------
Net Cash Provided By
Operating Activities............ 36,185 51,350
--------- --------
Cash Flows From Investing Activities:
Additions to Properties......... (12,098) (2,057)
Proceeds from Asset Dispositions 54 16
--------- --------
Net Cash Used In Investing
Activities...................... (12,044) (2,041)
--------- --------
Cash Flows From Financing Activities:
Cash Distributions.............. (33,987) (31,046)
Borrowings on Lines of Credit... 192,500 165,250
Repayments on Lines of Credit... (192,500) (165,250)
--------- --------
Net Cash Used In Financing
Activities...................... (33,987) (31,046)
--------- --------
Increase (Decrease) In Cash
and Cash Equivalents............ (9,846) 18,263
Cash and Cash Equivalents:
Beginning of Period............. 135,381 123,892
--------- --------
End of Period................... $ 125,535 $ 142,155
========= ==========
</TABLE>
See accompanying Notes to Combined Financial Statements
PLUM CREEK TIMBER COMPANY, L.P.
NOTES TO COMBINED FINANCIAL STATEMENTS
(UNAUDITED)
1. Organization and Basis of Presentation
The combined financial statements include all the accounts
of Plum Creek Timber Company, L.P. (the "Partnership"), Plum
Creek Manufacturing, L.P. ("Manufacturing") and Plum Creek
Marketing, Inc. ("Marketing"). All significant intercompany
transactions have been eliminated in the combination.
The Partnership owns 98 percent of Manufacturing and 96
percent of Marketing. Plum Creek Management Company, L.P. (the
"General Partner") manages the businesses of the Partnership,
Manufacturing and Marketing and owns the remaining two percent
general partner interest of Manufacturing and four percent of
Marketing. As used herein, "Company" refers to the combined
entities of the Partnership, Manufacturing and Marketing.
The financial statements included in this Form 10-Q are
unaudited and do not contain all of the information required by
generally accepted accounting principles to be included in a full
set of financial statements. The financial statements in the
Partnership's 1997 annual report on Form 10-K include a summary
of significant accounting policies of the Company and should be
read in conjunction with this Form 10-Q. In the opinion of
management, all material adjustments necessary to present fairly
the results of operations for such periods have been included.
All such adjustments are of a normal and recurring nature. The
results of operations for any interim period are not necessarily
indicative of the results of operations for the entire year.
The taxable income, deductions, and credits of the
Partnership and Manufacturing are allocated to the Unitholders
based on the number of depositary units representing limited
partner interests ("Units") held and the holding period.
Distributions of cash to a Unitholder are considered a non-taxable
return of capital to the extent of the Unitholder's basis in
the Units (as such basis is increased by the allocable share
of the Partnership's and Manufacturing's taxable income).
However, Unitholders are required to include in their income tax
filings their allocable share of the Partnership's and
Manufacturing's income, regardless of whether cash distributions
are made. In virtually all cases, a Unitholder's 1998 cash
distribution will significantly exceed the tax liability related
to the Unitholder's allocated taxable income from the Partnership
and Manufacturing. For tax-exempt entities, such as IRAs, most
of the Partnership's and Manufacturing's taxable income is
treated as Unrelated Business Taxable Income ("UBTI"). To the
extent a tax-exempt entity has more than $1,000 of UBTI for a tax
year, it may be required to pay federal income taxes. Marketing,
as a separate taxable corporation, provides for income taxes on a
separate company basis. Marketing provides for deferred taxes in
order to reflect the tax consequences in future years of the
difference between the financial statement and tax basis of
assets and liabilities at year-end.
Net Income per Unit is calculated using the weighted average
number of Units outstanding, divided into the combined Company
net income, after adjusting for the General Partner interest.
The weighted average number of Units outstanding was 46,323,300
for the three month periods ended March 31, 1998 and 1997,
respectively.
2. Inventories
Inventories consisted of the following (in thousands):
March 31, December 31,
1998 1997
-------- -----------
Raw materials (logs) $ 25,854 $ 29,177
Work-in-process 6,713 6,108
Export logs 587 715
Finished goods 14,775 15,295
------ ------
47,929 51,295
Supplies 7,757 7,661
------ ------
Total $ 55,686 $ 58,956
======= =======
Excluding supplies, which are valued at average cost, the
cost of the LIFO inventories valued at the lower of average cost
or market (which approximates current cost) at March 31, 1998 and
December 31, 1997 was $46.6 million and $50.0 million,
respectively.
3. Timber and Timberlands and Property, Plant and Equipment
Timber and timberlands consisted of the following (in
thousands):
March 31, December 31,
1998 1997
-------- -----------
Timber and logging roads - net $ 781,704 $ 789,513
Timberlands 98,357 98,181
------- -------
Timber and Timberlands - net $ 880,061 $ 887,694
======= =======
Property, plant and equipment consisted of the following (in
thousands):
March 31, December 31,
1998 1997
-------- -----------
Land, buildings and improvements $ 61,143 $ 61,155
Machinery and equipment 244,719 235,349
------- -------
305,862 296,504
Accumulated depreciation (139,008) (132,948)
------- -------
Property, Plant and
Equipment - net $166,854 $163,556
======= ========
4. Borrowings
As of March 31, 1998, the Company had $161.0 million of
borrowings under its revolving line of credit ("Line of Credit").
The Line of Credit allows the Partnership to borrow $225 million,
including up to $20 million of standby letters of credit issued
on behalf of the Partnership or Manufacturing, through December
13, 2001. As of March 31, 1998, $64 million remained available
for borrowing under the Line of Credit. As of April 3, 1998,
$125 million of borrowings on the Line of Credit were repaid.
5. Subsequent Events
On April 17, 1998, the fifth and final Unit Value Target
("UVT") was achieved under the Company's Long-Term Incentive Plan
and the Key Employee Long-Term Incentive Plan (collectively, the
"Plans"). Total compensation expense with respect to the
achievement of this UVT will be $9.7 million, of which $8.8
million will be recognized in the second quarter of 1998. The
remaining compensation expense will be recognized over the
remaining performance period under the Plans ending December 31,
1998.
On April 21, 1998, the Board of Directors of the General
Partner authorized the Partnership to make a distribution of
$0.57 per Unit for the first quarter of 1998. Total
distributions will equal approximately $35.5 million (including
$9.1 million to the General Partner) and will be paid on May 28,
1998 to Unitholders of record on May 15, 1998.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Overview
As used herein, "Company" refers to the combined entities of
the Partnership, Manufacturing, and Marketing. "Resources
Segment" refers to the combined timber and land management
businesses of the Partnership and "Manufacturing Segment" refers
to the combined businesses of Manufacturing and Marketing.
Current Market Conditions
Prices for domestic logs (primarily Douglas-fir) in the
Cascades Region have declined compared to the first quarter of
1997 and the fourth quarter of 1997 primarily due to declining
lumber prices and excess supply. The supply of logs in the
domestic market has increased due to the diversion of export
quality logs to the U.S. market as a result of a weak Japanese
economy. Domestic log prices in the Rocky Mountain Region have
remained relatively flat from those experienced in the first
quarter of 1997. Pulp log and chip prices in the Rocky Mountain
Region have improved modestly compared to the first quarter of
1997 primarily due to declining chip inventories. First quarter
domestic and pulp log prices in the Southern Region improved
significantly (over 15%) compared to first quarter 1997 prices
and were comparable to fourth quarter 1997 prices. The
improvement over first quarter 1997 prices was primarily due to a
regional log supply shortage as a result of weather-related
harvesting curtailments.
Export log prices for the first quarter of 1998 were
significantly (approximately 25%) below first quarter 1997 prices
due to weak demand in Japan and an abundant supply of logs. The
Japanese demand for logs remains weak due to a stagnant domestic
economy, which has resulted in unusually low housing starts and
low consumer confidence. Additionally, there remains a steady
supply of lower cost substitutes from global sources including
Russian logs and Scandinavian and Canadian lumber.
First quarter 1998 industry composite indices for lumber
prices were 16% lower than first quarter of 1997 primarily due to
excess supply. First quarter 1998 demand for lumber has remained
extremely strong due to a robust U.S. economy, high consumer
confidence, low interest rates, steady job growth, and a low
inventory of unsold houses. Additionally, housing starts during
the first quarter of 1998 were 9% above the first quarter of
1997. However, due to an excess supply of lumber, prices have
been under downward pressure since the third quarter of 1997.
North American lumber supply increased approximately 3% in 1997
and is expected to decline only slightly in 1998. Board prices
in the repair and remodel markets have also been under downward
pressure since the third quarter of 1997. First quarter 1998
board prices have declined from the prior year first quarter
primarily due to increased imports from European producers as a
result of weak Japanese markets and increased production from
domestic producers due to declining dimension lumber prices.
First quarter 1998 industry composite indices for structural
panel prices were comparable to first quarter 1997 and fourth
quarter 1997 prices; however, commodity plywood prices have
declined slightly from first quarter 1997 levels. The downward
price pressure is due to continued OSB capacity expansion. OSB
production set another record in 1997 and has now captured 46% of
the North American Structural Panel market, up from 41% of the
market in 1996. This trend is expected to continue as additional
OSB capacity comes on line.
First quarter 1998 MDF prices decreased by 10% compared to
the prior year first quarter and were slightly lower than fourth
quarter 1997 prices. Despite improving demand for MDF, prices
were under downward pressure in the first quarter due to excess
supply. The North American supply of MDF continues to increase
primarily due to the construction of new capacity (four new
facilities are expected to begin operations in 1998), better
operating performance by newer mills, and the diversion of MDF
into U.S. markets and away from weak Asian markets.
RESULTS OF OPERATIONS
First Quarter 1998 Compared to First Quarter 1997
The following table compares operating income by segment for
the quarters ended March 31, 1998 and 1997.
Operating Income by Segment
Quarter Ended March 31,
----------------------
(In Thousands)
1998 1997
---- ----
Resources Segment................. $ 32,767 $ 39,099
Manufacturing Segment............. 6,104 11,725
Other Costs and Eliminations...... (2,830) (7,602)
-------- --------
Total $ 36,041 $ 43,222
======== ========
Resources Segment revenues decreased by $8.4 million, or 9%,
to $86.0 million for the quarter ended March 31, 1998, compared
to $94.4 million for the quarter ended March 31, 1997. This
decrease was primarily due to lower export log sales volume, a
decline in Rocky Mountain Region log sales volume and a $2.0
million decrease in land sales revenue, offset in part by higher
Southern Region sawlog prices and increased Cascades Region
domestic log sales volume. Export log sales volume decreased by
approximately 60% compared to the first quarter of 1997 primarily
due to the diversion of lower quality export logs to the domestic
market as a result of the depressed Japanese economy. Log sales
volume in the Rocky Mountain Region decreased by approximately 7%
compared to the first quarter of 1997 primarily due to favorable
harvesting conditions during the first quarter of 1997 which
allowed the Company to build internal mill log inventories.
Southern Region sawlog prices increased by approximately 17%
compared to the first quarter of 1997 primarily due to record
rainfall during the first quarter of 1998 which severely
restricted harvesting activities throughout the region. Domestic
log sales volume in the Cascades Region increased by
approximately 20% compared to the first quarter of 1997 primarily
due to the diversion of export quality logs to the domestic
market and favorable harvesting conditions.
Resources Segment operating income was 38% and 41% as a
percentage of revenues for the quarters ended March 31, 1998 and
1997, respectively. The decrease was primarily due to a 26%
decrease in export log sales prices, a 12% decrease in Cascades
Region domestic log sales prices, and lower land sales.
Resources Segment costs and expenses decreased by $2.0 million,
or 4%, to $53.3 million for the quarter ended March 31, 1998,
compared to $55.3 million for the quarter ended March 31, 1997.
This decrease was primarily due to lower export and Rocky
Mountain Region domestic log sales volume, offset in part by 7%
higher log and haul costs in the Rocky Mountain Region due
primarily to more costly logging methods required in the areas
harvested.
Manufacturing Segment revenues increased by $0.7 million, or
1%, to $119.6 million for the quarter ended March 31, 1998,
compared to $118.9 million for the quarter ended March 31, 1997.
This increase was primarily due to higher Northwest plywood,
lumber, and MDF sales volumes, and higher Northwest plywood sales
prices, offset in part by lower Northwest lumber sales prices.
Northwest plywood sales volume increased by 8% compared to the
prior year first quarter primarily due to increased production
that resulted from capital improvements and additional production
shifts. Northwest lumber sales volume increased by 3% compared
to the prior year first quarter primarily due to increased
production resulting from additional production shifts.
Northwest MDF sales volume increased by 14% compared to the prior
year first quarter. Northwest plywood prices increased by 4%
compared to first quarter 1997 primarily due to the increased
percentage of higher-value products manufactured. Northwest
lumber prices decreased by 12% compared to the prior year first
quarter primarily due to excess supply. The supply of lumber
increased due to increased production by manufacturers in all
major producing regions in North America and increased imports of
common boards from European producers.
Manufacturing Segment operating income was 5% and 10% as a
percentage of revenues for the quarters ended March 31, 1998 and
1997, respectively. The decrease is primarily due to a 12%
decline in Northwest lumber sales prices and a 14% increase in
log costs in the Company's Southern Region lumber mills. Log
costs increased primarily due to a weather-related log shortage.
Manufacturing Segment costs and expenses increased by $6.3
million, or 6%, to $113.5 million for the quarter ended March 31,
1998, compared to $107.2 for the quarter ended March 31, 1997.
This increase was primarily due to higher Northwest plywood,
lumber, and MDF sales volumes, and higher Southern Region log
costs.
Other Costs and Eliminations (which consists of corporate
overhead, intercompany log profit elimination, and intercompany
LIFO elimination) decreased operating income by $2.8 million in
the first quarter of 1998, compared to $7.6 million in the first
quarter of 1997. The variance of $4.8 million is primarily due to
intercompany log profit elimination. The profit on intercompany
log sales is deferred (eliminated) until Manufacturing converts
existing log inventories into finished products and sells them to
third parties (at which time intercompany profit is released).
During the first quarter of 1998, intercompany log profit of $3.4
million was released while $0.7 million of intercompany log profit
was eliminated in the first quarter of 1997. The increase in
operating income due to intercompany log profit is primarily due to
the build-up of log inventories in the Company's Southern Region
during the fourth quarter of 1997 and the subsequent processing of
these logs during the first quarter of 1998 as a result of weather-
related harvest restrictions during the first quarter.
The income allocated to the General Partner increased by
$0.9 million to $8.1 million for the quarter ended March 31,
1998, compared to $7.2 million for the quarter ended March 31,
1997. This increase was due to higher quarterly distributions to
Unitholders. The General Partner's incentive distribution is
based on the number of outstanding Units times a percentage of
the per Unit distribution paid to Limited Partners. The
distribution for the fourth quarter 1997, which was paid during
the first quarter of 1998, was $0.55 per Unit, compared to $0.51
per Unit paid during the first quarter of 1997. Net income is
allocated to the General Partner based on 2 percent of the
Company's net income (after adjusting for the incentive
distribution), plus the incentive distribution.
FINANCIAL CONDITION AND LIQUIDITY
During the first three months of 1998, net cash provided by
operating activities totaled $36.2 million compared to $51.4
million for the same period in 1997. The decrease of $15.2
million was primarily due to unfavorable working capital changes
of $9.9 million and lower net income of $6.1 million. The
unfavorable working capital variance was primarily due to an
$11.4 million fluctuation in Other Current Assets, which was
primarily due to the collection of an installment note receivable
during the first quarter of 1997 related to a fourth quarter 1996
"higher and better use" land sale.
The Partnership has an unsecured Line of Credit with a group
of banks that permits the Partnership to borrow up to $225
million for general corporate purposes, including up to $20
million of standby letters of credit issued on behalf of the
Partnership or Manufacturing. The Line of Credit matures on
December 13, 2001 and bears a floating rate of interest. As of
March 31, 1998, the Partnership had $161.0 million outstanding
under the Line of Credit. As of April 3, 1998, the Partnership
had repaid $125.0 million of the borrowings under the Line of
Credit.
The Company's borrowing agreements contain certain
restrictive covenants, including limitations on harvest levels,
sales of assets, cash distributions and the amount of future
indebtedness. In addition, the Line of Credit requires the
maintenance of a required interest coverage ratio. The Company
was in compliance with its debt covenants as of March 31, 1998.
The Partnership will distribute $0.57 per Unit for the first
quarter of 1998. The distribution will equal $35.5 million
(including $9.1 million to the General Partner), and will be paid
on May 28, 1998 to Unitholders of record on May 15, 1998. The
computation of cash available for distribution includes required
reserves for the payment of principal and interest, as well as
other reserves established at the discretion of the General
Partner for working capital, capital expenditures, and future
cash distributions.
Cash required to meet the Company's quarterly cash
distributions, capital expenditures and principal and interest
payments will be significant. The General Partner expects that
cash distributions will be funded from cash on hand and cash
generated from operations. The General Partner anticipates that
all debt service and future capital expenditures will be funded
from cash on hand, cash generated from operations, and borrowings
under the Line of Credit.
CAPITAL EXPENDITURES
Capital expenditures for the first three months of 1998
totaled $12.1 million compared to $2.1 million for the same
period in 1997. Total 1998 capital expenditures are expected to
range between $47 million and $58 million, compared to $28.3
million expended in 1997. Planned capital expenditures for the
Resources Segment in 1998 are primarily for road construction and
reforestation. The Manufacturing Segment's 1998 principal
capital projects include a $20.0 million investment at the Joyce,
Louisiana facility in order to expand lumber operations, as well
as replacements and upgrades of equipment in several of the
manufacturing facilities.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There is no pending or threatened litigation involving
the Partnership which the General Partner believes would have a
material adverse effect on the financial position, the results of
operations or liquidity of the Company.
Items 2, 3, 4 and 5 of Part II are not applicable and have
been omitted.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) List of Exhibits
Each exhibit set forth below in the Index to Exhibits is
filed as a part of this report. Exhibits not incorporated by
reference to a prior filing are designated by an asterisk ("*");
all exhibits not so designated are incorporated herein by
reference to a prior filing as indicated.
INDEX TO EXHIBITS
Exhibit
Designation Nature of Exhibit
- ----------- -----------------
3.1 Amended and Restated Agreement of Limited Partnership of
Plum Creek Timber Company, L.P. dated June 8, 1989, as
amended and restated through October 17, 1995 (Form 10-Q,
File No. 1-10239, for the quarter ended September 30, 1995).
3.2 Certificate of Limited Partnership of Plum Creek Timber
Company, L.P., as filed with the Secretary of State of the
state of Delaware on April 12, 1989 (Form S-1, Regis. No.
33-28094, filed May, 1989).
27* Financial Data Schedule for the quarter ended March 31, 1998.
See attached exhibit.
(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.
PLUM CREEK TIMBER COMPANY, L.P.
(Registrant)
By: Plum Creek Management Company, L.P.
as General Partner
By: /s/ Diane M. Irvine
--------------------------
DIANE M. IRVINE
Vice President and
Chief Financial Officer
(Duly Authorized Officer and
Principal Financial and
Accounting Officer)
Date: May 8 , 1998
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary information extracted from the Combined
Financial Statements of Plum Creek Timber Company, L.P. for the three
months ended March 31, 1998 and is qualified in its entirety by reference
to such financial statements.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 125,535
<SECURITIES> 0
<RECEIVABLES> 36,359
<ALLOWANCES> 1,285
<INVENTORY> 55,686
<CURRENT-ASSETS> 227,230
<PP&E> 1,185,923
<DEPRECIATION> 139,008
<TOTAL-ASSETS> 1,290,004
<CURRENT-LIABILITIES> 75,814
<BONDS> 745,000
0
0
<COMMON> 0
<OTHER-SE> 457,630
<TOTAL-LIABILITY-AND-EQUITY> 1,290,004
<SALES> 164,325
<TOTAL-REVENUES> 164,325
<CGS> 118,644
<TOTAL-COSTS> 128,284
<OTHER-EXPENSES> (1)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 14,973
<INCOME-PRETAX> 21,307
<INCOME-TAX> 27
<INCOME-CONTINUING> 21,280
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 21,280
<EPS-PRIMARY> 0.28
<EPS-DILUTED> 0
</TABLE>
