<PAGE> 1
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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 SEPTEMBER 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
------------ ----------
Commission file number 1-10934
LAKEHEAD PIPE LINE PARTNERS, L.P.
(Exact name of registrant as specified in its charter)
DELAWARE 39-1715850
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
LAKE SUPERIOR PLACE
21 WEST SUPERIOR STREET
DULUTH, MN 55802-2067
(Address of principal executive offices and zip code)
(218) 725-0100
(Registrant's telephone number, including area code )
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
--- ---
The Registrant had 22,290,000 Class A Common Units outstanding as of November
13, 1997.
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
PART I. FINANCIAL INFORMATION
<S> <C> <C>
ITEM 1. Financial Statements
Consolidated Statement of Income
for the three-month and nine-month periods ended September 30, 1997 and 1996........... 1
Consolidated Statement of Cash Flows
for the nine-month periods ended September 30, 1997 and 1996........................... 2
Consolidated Statement of Financial Position
at September 30, 1997 and December 31, 1996............................................ 3
Consolidated Statement of Partners' Capital
for the nine months ended September 30, 1997........................................... 4
Notes to Consolidated Financial Statements............................................... 4
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations............................................ 7
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings.......................................................................... 10
ITEM 6. Exhibits and Reports on Form 8-K........................................................... 10
SIGNATURE ........................................................................................... 11
</TABLE>
When used in this document, the words "anticipate," "believe," "expect,"
"estimate," and similar expressions are intended to identify forward-looking
statements. Such statements are subject to certain risks, uncertainties and
assumptions. Should one or more of these risks or uncertainties materialize,
or should underlying assumptions prove incorrect, actual results may vary
materially from those anticipated, believed, expected or estimated. For
additional discussion of such risks, uncertainties and assumptions, see the
Partnership's 1996 Annual Report on Form 10-K.
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
LAKEHEAD PIPE LINE PARTNERS, L.P.
CONSOLIDATED STATEMENT OF INCOME
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Three months ended Nine months ended
September 30, September 30,
(unaudited; dollars in millions, except per unit amounts) 1997 1996 1997 1996
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operating Revenue $ 72.3 $ 67.9 $207.9 $201.8
- ----------------------------------------------------------------------------------------------------------------------
Expenses
Power 16.2 13.6 48.0 44.5
Operating and administrative 19.2 19.5 50.9 49.7
Depreciation 9.8 9.1 29.3 29.0
Provision for prior years' rate refunds (Note 4) - - - 20.1
- ----------------------------------------------------------------------------------------------------------------------
45.2 42.2 128.2 143.3
- ----------------------------------------------------------------------------------------------------------------------
Operating Income 27.1 25.7 79.7 58.5
Interest Income 2.0 2.5 7.1 7.1
Interest Expense (9.5) (10.3) (29.8) (34.6)
Minority Interest (0.2) (0.2) (0.7) (0.4)
- ----------------------------------------------------------------------------------------------------------------------
Net Income (Note 4) $ 19.4 $ 17.7 $ 56.3 $ 30.6
======================================================================================================================
Net Income Per Unit (Note 2) $ 0.76 $ 0.72 $ 2.22 $ 1.23
======================================================================================================================
Cash Distributions Paid Per Unit (Note 3) $ 0.78 $ 0.64 $ 2.14 $ 1.92
======================================================================================================================
</TABLE>
See accompanying notes to the consolidated financial statements.
1
<PAGE> 4
LAKEHEAD PIPE LINE PARTNERS, L.P.
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Nine months ended
September 30,
(unaudited; dollars in millions) 1997 1996
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operating Activities
Net income $ 56.3 $ 30.6
Adjustments to reconcile net income to
cash provided from operating activities:
Depreciation 29.3 29.0
Accrued rate refunds and related interest (Note 4) 2.8 39.5
Other 1.1 (0.2)
Changes in operating assets and liabilities:
Accounts receivable and other 6.1 (0.4)
Materials and supplies (0.2) 0.1
General Partner and affiliates (0.2) 0.4
Accounts payable and other (0.3) 2.8
Interest payable 8.8 5.9
Property and other taxes (1.0) (2.8)
Payment of rate refunds and related interest (Note 4) (20.4) -
- -------------------------------------------------------------------------------------------------------------------
82.3 104.9
- -------------------------------------------------------------------------------------------------------------------
Investing Activities
Additions to property, plant and equipment (79.5) (52.5)
Short-term investments, net 29.5 11.1
- -------------------------------------------------------------------------------------------------------------------
(50.0) (41.4)
- -------------------------------------------------------------------------------------------------------------------
Financing Activities
Issuance of variable rate financing - 41.0
Distributions to partners (53.5) (47.1)
Minority interest (0.6) (0.5)
- -------------------------------------------------------------------------------------------------------------------
(54.1) (6.6)
- -------------------------------------------------------------------------------------------------------------------
Increase (Decrease) in Cash and Cash Equivalents * (21.8) 56.9
Cash and Cash Equivalents at Beginning of Period 89.6 77.0
- -------------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Period $ 67.8 $ 133.9
===================================================================================================================
</TABLE>
* Cash equivalents are defined as all highly marketable securities with a
maturity of three months or less when purchased. Short-term investments are
those marketable securities which have a maturity of more than three months
when purchased.
See accompanying notes to the consolidated financial statements.
2
<PAGE> 5
LAKEHEAD PIPE LINE PARTNERS, L.P.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
September 30, December 31,
(unaudited, except for December 31, 1996; dollars in millions) 1997 1996
- ------------------------------------------------------------------------------------------------------------------------
ASSETS
<S> <C> <C>
Current Assets
Cash and cash equivalents $ 67.8 $ 89.6
Short-term investments 54.2 83.7
Accounts receivable and other 21.1 27.2
Materials and supplies 7.2 7.0
- ------------------------------------------------------------------------------------------------------------------------
150.3 207.5
- ------------------------------------------------------------------------------------------------------------------------
Deferred Charges and Other 4.5 4.9
- ------------------------------------------------------------------------------------------------------------------------
Property, Plant and Equipment
At cost 962.0 884.2
Accumulated depreciation (148.3) (120.7)
- ------------------------------------------------------------------------------------------------------------------------
813.7 763.5
- ------------------------------------------------------------------------------------------------------------------------
$ 968.5 $ 975.9
========================================================================================================================
LIABILITIES AND PARTNERS' CAPITAL
Current Liabilities
Due to General Partner and affiliates $ 1.3 $ 1.5
Accounts payable and other 16.5 16.8
Interest payable 12.0 3.2
Property and other taxes 10.1 11.1
Current portion of accrued rate refunds and related interest 29.0 29.0
- ------------------------------------------------------------------------------------------------------------------------
68.9 61.6
Long-Term Debt 463.0 463.0
Accrued Rate Refunds and Related Interest (Note 4) 32.7 50.3
Minority Interest 1.5 1.4
Contingencies (Note 5)
- ------------------------------------------------------------------------------------------------------------------------
566.1 576.3
- ------------------------------------------------------------------------------------------------------------------------
Partners' Capital
General Partner 2.4 1.6
Class B Common Unitholder (units issued - 3,912,750) (Note 6) 23.5 21.7
Class A Common Unitholders (units issued - 20,090,000) (Note 6) 376.5 376.3
- ------------------------------------------------------------------------------------------------------------------------
402.4 399.6
- ------------------------------------------------------------------------------------------------------------------------
$ 968.5 $ 975.9
========================================================================================================================
</TABLE>
See accompanying notes to the consolidated financial statements.
3
<PAGE> 6
LAKEHEAD PIPE LINE PARTNERS, L.P.
CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Class B Class A
(unaudited, except for December 31, 1996; General Common Common
dollars in millions) Partner Unitholder Unitholders Total
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Partners' Capital at December 31, 1996 $ 1.6 $ 21.7 $ 376.3 $ 399.6
Net Income Allocation 3.0 10.1 43.2 56.3
Distributions to Partners (2.2) (8.3) (43.0) (53.5)
- -------------------------------------------------------------------------------------------------------------------
Partners' Capital at September 30, 1997 $ 2.4 $ 23.5 $376.5 $ 402.4
===================================================================================================================
</TABLE>
See accompanying notes to the consolidated financial statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with United States generally accepted accounting
principles for interim financial information and with the instructions to
Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not
include all the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, they contain all adjustments, consisting of normal recurring
adjustments and a non-recurring adjustment to the first quarter of 1996 to
reflect a tariff rate agreement entered into between the Partnership and
customer representatives (the "Settlement Agreement") and approved by the
Federal Energy Regulatory Commission ("FERC") in October 1996, which
management considers necessary to present fairly the financial position as
at September 30, 1997 and December 31, 1996; the results of operations for
the three and nine-month periods ended September 30, 1997 and 1996; and
cash flows for the nine-month periods ended September 30, 1997 and 1996.
The results of operations for the nine months ended September 30, 1997
should not be taken as indicative of the results to be expected for the
full year. The interim financial statements should be read in conjunction
with the Partnership's consolidated financial statements and notes thereto
presented in the Partnership's 1996 Annual Report on Form 10-K.
2. Net Income Per Unit
Net income per unit is computed by dividing net income, after deduction of
the General Partner's allocation, by the number of Class A and Class B
Common Units outstanding (24,002,750). Net income allocated to the General
Partner for the three and nine-month periods ended September 30, 1997, was
$1.2 million and $3.0 million, respectively, as compared to $0.5 million
and $1.1 million for the same periods last year. These increases were a
result of the additional incentive income allocated to the General Partner
due to the increases in cash distributions per unit as provided for in the
Partnership Agreement.
4
<PAGE> 7
3. Cash Distribution
On October 16, 1997, the Board of Directors of the General Partner
announced a cash distribution for the quarter ended September 30, 1997 of
$0.78 per unit. The distribution will be made on November 14, 1997 to
unitholders of record on November 6, 1997.
4. Accrued Rate Refunds and Related Interest
Net income for the first quarter of 1996 was restated to reflect the rate
refunds and related interest accrued in response to the Settlement
Agreement, which reduced net income by $23.0 million, or $0.95 per unit. As
provided in the Settlement Agreement, refunds are being paid through a 10%
reduction on current rates. This reduction will continue until all refunds
have been made. Based on the $61.7 million remaining balance at September
30, 1997 and projected deliveries, the 10% credit is expected to remain
effective until sometime during the third or fourth quarter of 1999. With
the exception of interest that continues to accrue on the unpaid balance,
all refunds due as a result of the Settlement Agreement were accrued and
reflected in net income prior to 1997.
5. Environmental Contingencies
The Partnership is subject to federal and state laws and regulations
relating to the protection of the environment. Environmental risk is
inherent to crude oil pipeline operations, and the Partnership could, at
times, be subject to environmental cleanup and enforcement actions. The
General Partner manages this environmental risk through appropriate
environmental policies and practices to minimize the impact to the
Partnership. To the extent that the Partnership is unable to recover
environmental costs in its rates or through insurance, the General Partner
has agreed to indemnify the Partnership from and against any costs relating
to environmental liabilities associated with the pipeline system prior to
its transfer to the Partnership in 1991. This excludes any liabilities
resulting from a change in laws after such transfer. The Partnership
continues to voluntarily investigate past leak sites for the purpose of
assessing whether any remediation is required in light of current
regulations, and to date no material environmental risks have been
identified.
6. Common Units
As previously announced, the period during which the Partnership's
Preference Units had certain cash distribution priorities over the
Partnership's Common Units expired with the distribution paid in February
1997, in accordance with the terms of the Partnership Agreement. Since
then, all Partnership units have equal rights with respect to cash
distributions. To more accurately reflect this status, the Preference Units
were renamed Class A Common Units and the existing Common Units were
renamed Class B Common Units. This name change does not affect any
Unitholder's ownership rights in the Partnership. Unitholders need not
exchange Preference Unit certificates for Class A Common Unit certificates,
as the Preference Unit certificates will automatically be treated as such.
On October 24, 1997, the Partnership issued an additional 2,200,000 Class A
Common Units, increasing the total number of Class A Common Units
outstanding to 22,290,000, which, combined with the General Partner's
contribution, provided net proceeds of $99.1 million. Proceeds are being
used to finance, in part, the $370 million System Expansion Program II
("SEP II") consisting primarily of a new pipeline from Superior, Wisconsin
to the Chicago, Illinois area ("Line 14").
Prior to this additional issuance of Class A Common A Units, the General
Partner had retained a 1% general partner interest and 16.1% limited
partner interest in the Partnership, as well as a 1% general partner
interest in Lakehead Pipe Line Company, Limited Partnership (the "Operating
Partnership"). This resulted in an effective 18.0% combined interest in the
Partnership by the General Partner. The Partnership owns a 99% limited
interest in the Operating Partnership.
5
<PAGE> 8
Subsequent to this additional issuance of Class A Common Units, the General
Partner has a 1% general partner and 14.8% limited partner interest in the
Partnership, as well as a 1% general partner interest in the Operating
Partnership. This results in an effective 16.6% combined interest in the
Partnership.
6
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED WITH NINE MONTHS ENDED SEPTEMBER
30, 1996
Net income for the nine months ended September 30, 1997 was $56.3 million, or
$2.22 per unit. The first nine months of last year included provisions for prior
years' rate refunds ($20.1 million) and interest ($3.2 million) recorded to
reflect the retroactive aspects of a tariff rate agreement entered into
between the Partnership and customer representatives ( the "Settlement
Agreement") and approved by the Federal Energy Regulatory Commission ("FERC").
Excluding these provisions, "recalculated" net income for the first nine months
of 1996 was $53.7 million, or $2.18 per unit. Net income for the nine months
ended September 30, 1997 was $2.6 million higher than the recalculated amount
for the same period last year due to higher operating revenue and lower
interest expense, partially offset by higher total operating expenses.
Operating revenue increased $6.1 million, primarily due to a greater proportion
of heavy crude oil deliveries, which increased 26% to 561,000 barrels per day.
Because heavy crude oil is more expensive to pump due to its higher viscosity,
the tariff rate for heavy crude oil is greater than that for lighter crude oils.
Total deliveries averaged 1,496,000 barrels per day for the first nine months of
1997, up 5% from the 1,421,000 averaged for the same period last year. This
increase is primarily attributable to capacity added during the Partnership's
1996 System Expansion Program, combined with an increase in western Canadian
crude oil production. While deliveries were up 5%, system utilization, measured
in barrel miles, only increased 1.4% from last year due to a higher proportion
of shorter haul deliveries to the Midwest markets served by the Partnership.
Excluding the provision for prior years' rate refunds ($20.1 million) from 1996,
total operating expenses for the first nine months of 1997 were $5.0 million
higher than the same period of 1996 primarily due to increased power costs.
Power costs increased due to higher deliveries, operational considerations and a
higher proportion of heavy crude oil deliveries. Depreciation expense increased
slightly despite growth in property, plant and equipment, due to the impact of
revised depreciation rates put in effect July 1, 1996. The depreciation rates
were revised to better represent the expected service life of the pipeline
system.
Excluding the provision for interest related to prior years' rate refunds ($3.2
million) from 1996, interest expense for the first nine months of 1997 was less
than the same period last year primarily due to lower balances with respect to
rate refunds payable, partially offset by interest on increased borrowings under
the Partnership's credit facility.
THREE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED WITH THREE MONTHS ENDED SEPTEMBER
30, 1996
Net income for the three months ended September 30, 1997 was $1.7 million higher
compared to the same period last year due to higher operating revenue, partially
offset by higher total operating expenses.
Operating revenue increased $4.4 million, due to an increase in total deliveries
and a greater proportion of heavy crude oil deliveries, which increased 19% to
557,000 barrels per day. Total deliveries averaged 1,527,000 barrels per day for
the third quarter, up 8% from the 1,416,000 averaged for the third quarter of
1996. System utilization, measured in barrel miles, increased 4% primarily due
to an increase in deliveries.
Total operating expenses for the three months ended September 30, 1997 were $3.0
million greater than the corresponding period in 1996 primarily due to increased
power costs. Power costs increased for the same reasons noted in the previous
section. Depreciation increased due to the growth in property, plant and
equipment.
7
<PAGE> 10
Interest expense for the three months ended September 30, 1997 was $0.8 million
less than the same period last year primarily due to lower balances with respect
to rate refunds payable, partially offset by interest on increased borrowings
under the Partnership's credit facility.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1997, cash, cash equivalents and short-term investments totaled
$122.0 million, down $51.3 million since December 31, 1996, as cash required for
distributions to partners and capital expenditures exceeded cash generated from
operating activities. Of this $122.0 million, $20.1 million ($0.78 per unit) was
set aside for the cash distribution payable November 14, 1997, with the
remaining $101.9 million available for capital expenditures or other business
needs.
Cash flow from operating activities for the first nine months of 1997 decreased
$22.6 million from the corresponding period in 1996, primarily due to the
payment of accrued rate refunds and related interest in 1997 and the collection
of operating revenue in 1996 that was subject to refund.
Capital expenditures for the first nine months of 1997 totaled $79.5 million, of
which $50.0 million was for SEP II. The General Partner believes that the
majority of the estimated expenditures of $370.0 million for SEP II will be
incurred in 1998, with completion planned for the second half of that year. In
addition to the offering of Partnership Units effective October 24, 1997, the
Partnership is considering other sources of capital to finance this expansion,
including the use of existing cash balances, borrowings and another issuance of
additional Partnership Units during 1998. Excluding expenditures for SEP II, the
Partnership expects 1997 capital expenditures to total approximately $45.0
million. These expenditures are expected to be financed with existing cash and
borrowed funds.
GENERAL
On May 7, 1997, the Illinois Commerce Commission ("ICC") denied the
Partnership's application for a "Certificate of Public Convenience and Necessity
/ Certificate in Good Standing". This Certificate is a necessary first step
toward receiving condemnation authority, should the Partnership need such
authority, in order to purchase easements from landowners along the Illinois
portion for Line 14. The ICC does not have jurisdiction to decide whether or not
the Partnership can build the new line through Illinois. The Partnership is
continuing with its plans to build Line 14 while challenging the ICC's decision.
The Partnership is currently seeking and acquiring environmental and
construction permits, which are separate from the ICC proceedings.
Thus far, approximately 90 percent of the 450-mile Wisconsin-Illinois route has
been secured or contractually committed. The remaining 10 percent of the
easements needed are largely in northeastern Illinois. Purchase orders have been
placed for the initial construction materials, and $57.1 million has been
expended on SEP II thus far. Construction commenced October 1, 1997 on a portion
of Line 14. Approximately 11 miles of 24-inch pipe will be installed this fall
at six major river crossings and other selected segments of the pipeline route.
The Partnership, in conjunction with its Canadian affiliate, Interprovincial
Pipe Line Inc. ("Interprovincial"), continues to make plans on the Terrace
Expansion Program to increase western Canadian crude oil pipeline
capacity with a view to accelerating the program. Commencement of the program
is contingent on obtaining the approval of the National Energy Board of Canada
("NEB"), and Interprovincial intends to submit an application to the NEB for
such approval this fall. The expansion could provide an additional 270,000
barrels per day of heavy crude oil capacity at an estimated cost of Cdn. $800
million. A majority of the expenditures will be spent in Canada by
Interprovincial, although approximately Cdn. $160 million, or U.S. $115
million, is projected to be spent by the Partnership. It is anticipated that
this project will be completed in September 1999. Current plans allow for
additional expansion with relatively small, cost effective projects.
8
<PAGE> 11
Interprovincial, the parent company of the General Partner, has petitioned by
application dated May 1, 1997 to the NEB for authorization to reverse the
direction of flow of the Montreal Extension ("Line 9"). A NEB hearing regarding
Line 9 commenced on August 5, 1997 and a decision is expected in the fourth
quarter of 1997. A reversal of the Montreal Extension is not anticipated to have
a material adverse impact on the Partnership, as displaced volumes are expected
to be redirected to existing U.S. markets served by the Partnership. The
Partnership's December 31, 1996 Form 10-K provides a more detailed discussion of
the Montreal Extension.
Effective July 1, 1997, in compliance with the indexed rate ceilings allowed by
FERC, the Partnership increased its rates for transportation approximately 1.6%.
An increase in rates is allowed under terms of the Settlement Agreement, which
provides that tariff rates are subject to indexing as prescribed by FERC. The
Partnership's December 31, 1996 Form 10-K provides a more detailed discussion of
FERC regulation, the indexed rate methodology, and the Settlement Agreement.
9
<PAGE> 12
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On October 21, 1997, the General Partner received from the Environmental
Protection Agency ("EPA") two Requests for Information pursuant to the federal
Clean Water Act relating to two separate pipeline leaks that happened in
Minnesota in 1994. The Partnership previously addressed these leak incidents
with the Minnesota Pollution Control Agency's oversight; no civil penalty was
issued by the State in either case. The Partnership intends to cooperatively
respond the EPA's Requests for Information.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits
27.1 Financial Data Schedule as of and for the nine months ended
September 30, 1997.
b) Reports on Form 8-K
A report on Form 8-K was filed on September 25, 1997 submitting an audited
Consolidated Statement of Financial Position of Lakehead Pipe Line Company,
Inc., the General Partner of Lakehead Pipe Line Partners, L.P., at December
31, 1996 and 1995, together with the Report of Independent Public
Accountants.
10
<PAGE> 13
SIGNATURE
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.
LAKEHEAD PIPE LINE PARTNERS, L.P.
(Registrant)
By: Lakehead Pipe Line Company, Inc.
as General Partner
/s/ M.A. Maki
--------------------------------------------
M. A. Maki
Chief Accountant
(Principal Financial and
Accounting Officer)
Dated: November 13, 1997
---------------------------------
11
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 67,800
<SECURITIES> 54,200
<RECEIVABLES> 21,100
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 150,300
<PP&E> 962,000
<DEPRECIATION> 148,300
<TOTAL-ASSETS> 968,500
<CURRENT-LIABILITIES> 68,900
<BONDS> 463,000
0
0
<COMMON> 0
<OTHER-SE> 402,400
<TOTAL-LIABILITY-AND-EQUITY> 968,500
<SALES> 0
<TOTAL-REVENUES> 207,900
<CGS> 0
<TOTAL-COSTS> 128,200
<OTHER-EXPENSES> 700
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 29,800
<INCOME-PRETAX> 56,300
<INCOME-TAX> 0
<INCOME-CONTINUING> 56,300
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 56,300
<EPS-PRIMARY> 2.22
<EPS-DILUTED> 2.22
</TABLE>
