<PAGE> 1
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[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
For the transition period from to
--------------- --------------
Commission File Number
-----------------------
TRANSTAR HOLDINGS, L.P.
TRANSTAR CAPITAL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 13-3486874
DELAWARE 13-3745313
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
345 PARK AVENUE
NEW YORK, NY 10154
(Address and zip code of principal executive offices)
(212) 935-2626
(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
------ -----
- -------------------------------------------------------------------------------
<PAGE> 2
Transtar Holdings, L.P.
Transtar Capital Corporation
Form 10-Q
Quarterly Period Ended March 31, 1998
INDEX
-----
<TABLE>
<CAPTION>
PAGE
----
PART I - FINANCIAL INFORMATION
<S> <C>
A. TRANSTAR HOLDINGS, L.P.
Consolidated Balance Sheet 3
Consolidated Statements of Income and Partners' Equity 4
Consolidated Statement of Cash Flows 5
Notes to Consolidated Financial Statements 6
Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
B. TRANSTAR, INC.
Consolidated Balance Sheet 9
Consolidated Statements of Income and Retained Earnings 10
Consolidated Statement of Cash Flows 11
Notes to Consolidated Financial Statements 12
Management's Discussion and Analysis of Financial
Condition and Results of Operations 13
PART II - OTHER INFORMATION 15
SIGNATURE 16
</TABLE>
<PAGE> 3
PART I - FINANCIAL INFORMATION
- ------------------------------
A. TRANSTAR HOLDINGS, L.P.
TRANSTAR HOLDINGS, L.P.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
--------- ---------
(dollars in thousands)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1,210 $ 260
Restricted cash 45,398 45,694
Investment in Transtar 25,368 23,825
Other assets 4,183 4,367
--------- ---------
Total assets $ 76,159 $ 74,146
========= =========
LIABILITIES
Current liabilities:
Accounts payable and other current liabilities $ 253 $ 186
Long-term debt 174,959 169,330
--------- ---------
Total liabilities 175,212 169,516
PARTNERS' EQUITY (DEFICIT) (99,053) (95,370)
--------- ---------
Total liabilities and partners' equity $ 76,159 $ 74,146
========= =========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE> 4
TRANSTAR HOLDINGS, L.P.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
For the quarter ended
March 31,
---------
1998 1997
------- -------
(dollars in thousands)
<S> <C> <C>
Revenues $ - $ -
------- -------
Operating expenses:
Selling, general and administrative expenses 55 114
------- -------
Operating (loss) (55) (114)
Interest income 654 596
Interest and other financial expenses (5,813) (5,130)
------- -------
(Loss) before equity in earnings of Transtar (5,214) (4,648)
Equity in earnings of Transtar 2,319 935
------- -------
Net (loss) $(2,895) $(3,713)
======= =======
</TABLE>
CONSOLIDATED STATEMENT OF PARTNERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
Partners' equity (deficit), beginning of period $(95,370) $ (98,606)
Distribution to partners - (5,250)
Net (loss) (2,895) (3,713)
Other adjustments to partners' equity (788) -
-------- ---------
Partners' equity (deficit), end of period $(99,053) $(107,569)
======== =========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE> 5
TRANSTAR HOLDINGS, L.P.
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
For the quarter ended
March 31,
--------------------
1998 1997
------- ---------
(dollars in thousands)
<S> <C> <C>
OPERATING ACTIVITIES:
Net (loss) $(2,895) $(3,713)
Adjustments to reconcile to net cash used
for operating activities:
Amortization - 86
Non-cash interest and other financial expenses 5,813 5,130
Non-cash interest income (649) (594)
Equity in earnings of Transtar (2,319) (935)
Changes in:
Accounts payable 67 (370)
Other assets and liabilities (12) -
------- -------
Net cash provided by (used for) operating activities 5 (396)
------- -------
INVESTING ACTIVITIES:
Net cash provided by investing activities - -
------- -------
FINANCING ACTIVITIES:
Distribution to partners - (5,250)
Withdrawal from restricted cash 945 5,550
------- -------
Net cash provided by financing activities 945 300
------- -------
Increase (decrease) in cash and cash equivalents 950 (96)
Cash and cash equivalents at beginning of period 260 386
------- -------
Cash and cash equivalents at end of period $ 1,210 $ 290
======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
5
<PAGE> 6
TRANSTAR HOLDINGS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
MARCH 31, 1998
NOTE 1: BASIS OF FINANCIAL STATEMENT PRESENTATION:
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial statements
and with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all normal recurring adjustments considered
necessary for a fair statement of the results of operations for the three month
period ended March 31, 1998 have been included. The results of operations for
the three month period ended March 31, 1998 are not necessarily indicative of
the results of operations for the full year. When reading the financial
information contained in this quarterly report, reference should be made to the
financial statements, schedules and notes contained in Transtar Holdings, L.P.'s
(Holdings) Annual Report on Form 10-K for the year ended December 31, 1997.
Transtar Capital Corporation (TCC), a subsidiary of Holdings, is a shell
corporation which has nominal assets and no liabilities, operations or cash
flows. Accordingly, the financial statements of TCC are not presented because
they do not provide material information to investors.
NOTE 2: LONG-TERM DEBT:
On December 7, 1993, Holdings and TCC (Issuers) issued $218 million aggregate
principal amount of 13.375% Senior Discount Notes due December 15, 2003 (Notes).
The Notes are the joint and several obligations of the Issuers. An original
issue discount of $118 million will be amortized over a six year period
commencing December 15, 1993 and ending December 15, 1999. Interest will be
payable semi-annually in arrears on June 15 and December 15 commencing on June
15, 2000. The Notes have a principal amount at maturity of $218 million. The
carrying value represents the principal at maturity less the unamortized
discount. The Notes are not guaranteed by Transtar, Inc. (Transtar) or any of
its subsidiaries and are subordinated to all existing and future liabilities of
the Issuers' subsidiaries. Interest expense attributable to the Notes was $5.6
million and $4.9 million in the first quarter of 1998 and 1997, respectively.
NOTE 3: RELATED PARTY TRANSACTIONS:
On October 27, 1997, Transtar declared a cash dividend in the amount of $625 per
share on both its Class A Voting Common Stock (Voting Stock) and its Class B
Nonvoting Common Stock (Nonvoting Stock) to holders of record of the stock on
October 27, 1997. Holdings received $6.4 million on October 30, 1997,
representing its 53% economic interest in the Transtar dividend. Pursuant to an
Indenture Agreement relating to the issuance of the Notes (the Notes Indenture),
the dividend payment was paid into an escrow account. On December 16, 1997,
Transtar declared a cash dividend of $625 per share on both its Voting Stock and
its Nonvoting Stock to holders of record of the stock on December 16, 1997.
Holdings received $6.4 million on December 19, 1997, representing its 53%
economic interest in the Transtar dividend. In accordance with the Notes
Indenture, this dividend was paid into the escrow account.
In February 1998, in accordance with the Notes Indenture, Holdings offered to
repurchase a portion of the Notes at an offer price equal to 101% of the
accreted value of such Notes on the date of purchase. The offer to purchase the
Notes was made by a notice to holders of the Notes and was held open for 20
business Days. No notes were tendered for repurchase. In March 1998, in
accordance with the Notes Indenture and an agreement governing the escrow
account, Holdings withdrew from the escrow account $0.7 million to distribute to
its partners at a future date and $0.2 million to pay certain administrative
expenses.
In February, 1997, in accordance with the Notes Indenture and related to certain
dividends paid into the escrow account in 1996, Holdings offered to repurchase a
portion of the Notes at an offer price equal to 101% of the accreted value of
such Notes on the date of purchase. The offer to purchase the Notes was made by
a notice to holders of the Notes and was
6
<PAGE> 7
TRANSTAR HOLDINGS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED
held open for 20 business days. No Notes were tendered for repurchase. In March
1997, in accordance with the Notes Indenture and the agreement governing the
escrow account, Holdings withdrew from the escrow account $5.3 million to
distribute to its partners and $0.3 million to pay certain administrative
expenses.
Funds in the escrow account are invested in cash equivalents and may only be
released to pay interest and principal on the Notes, make a Restricted Payment
(as defined by the Notes Indenture), purchase or optimally redeem Notes or to
pay administrative expenses of Holdings. Interest earned on the escrow balance
was $0.6 million in both the first quarter of 1998 and the first quarter of
1997.
NOTE 4: PARTNERS EQUITY
In the first quarter of 1998, Holdings recorded an adjustment to Partners Equity
of $(0.8) million. This adjustment was recorded as a result of a change in
ownership related to a Transtar purchase of treasury stock from its Management
Stock Trusts.
7
<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Management's Discussion and Analysis of Financial Condition and Results of
Operations includes an analysis of Holdings' equity investment in Transtar, Inc.
(Transtar). Holdings is a Delaware limited partnership. It was originally formed
in 1988 as Blackstone Transportation Partners L. P. (BTP) for the sole purpose
of holding voting and nonvoting stock of Transtar. BTP was renamed Transtar
Holdings, L. P. in November 1993. Holdings earnings are derived solely from its
53.0 percent economic interest in Transtar. The following discussion should be
read in conjunction with Holdings' Consolidated Financial Statements and the
notes related hereto included within this filing.
Transtar Holdings L.P. Results
For the Three Months ended March 31, 1998
Compared to the
Three Months ended March 31, 1997
Overall
- -------
Holdings recorded a net loss in the first quarter of 1998 of $2.9 million. This
represents a $0.8 million improvement from the $3.7 million net loss recorded
during the same period of 1997. Holdings' results include its equity investment
in Transtar. For a discussion of results of operations of Transtar, see
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" for Transtar, Inc.
Revenues and Expenses
- ---------------------
Holdings did not record any revenues in the first quarters of 1998 or 1997.
Holdings' selling, general and administrative expenses of $0.1 million during
the first three months of 1998 were slightly lower than those incurred during
the first quarter of 1997. Both the equity earnings of Transtar and interest
income improved from the first quarter of 1997 by $1.4 million and $0.1 million,
respectively. Interest and other financial expense increased during the first
quarter by $0.7 million to $5.8 million when compared to the similar period in
the prior year.
Liquidity and Capital Resources
- -------------------------------
During 1997, Transtar declared two cash dividends, each in the amount of $625
per share, on both its Class A Voting Common Stock and its Class B Nonvoting
Common Stock. Holdings received dividends totaling $12.8 million, representing
its 53 percent economic interest in the Transtar dividend. Pursuant to an
Indenture Agreement relating to the issuance of the Notes (Notes Indenture),
both dividends were deposited into an escrow account. In accordance with the
Notes Indenture and an agreement governing the escrow account, during the first
quarter of 1998 Holdings withdrew from the escrow account $0.7 million to make
future distributions to its partners and $0.2 million to pay administrative
expenses. In the first quarter of 1997, Holdings distributed $5.3 million to its
partners and paid $0.3 million of administrative expenses from dividends
received from Transtar in 1996.
In February of both 1998 and 1997, Holdings offered to repurchase a portion of
its Senior Discount Notes at an offer price equal to 101 percent of the accreted
value of such notes on the date of purchase. These offers to purchase the notes
were made by a notice to holders of the Senior Discount Notes and were held open
for 20 business days. No notes were tendered for repurchase. During the first
quarter of 1998, Holdings earned $0.6 million in interest from the balance in
the escrow account, similar to the first quarter of 1997.
The only business activity of Holdings is its investment in Transtar. Holdings
does not require any additional liquidity or capital resources, other than for
professional fees and certain other administrative expenses, until the first
cash interest payment is due on the Notes on June 15, 2000.
8
<PAGE> 9
B. TRANSTAR, INC.
TRANSTAR, INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
---------- -----------
(dollars in thousands)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 24,798 $ 24,316
Accounts receivable from related parties 14,449 16,274
Accounts receivable from others 49,334 56,459
Other current assets 16,913 9,726
--------- ---------
Total current assets 105,494 106,775
Property, plant, and equipment,
less accumulated depreciation 379,974 384,118
Operating parts and supplies 16,994 15,551
Other assets 16,513 15,548
--------- ---------
Total assets $ 518,975 $ 521,992
========= =========
LIABILITIES
Current liabilities:
Accounts payable $ 72,155 $ 73,663
Payroll and benefits payable 38,295 38,456
Accrued taxes 9,839 12,143
Accrued interest 2,238 2,177
Current portion of long-term debt 61,466 68,464
Other current liabilities 4,960 1,096
--------- ---------
Total current liabilities 188,953 195,999
Long-term debt less current portion 128,749 128,766
Postretirement benefits other than pensions 107,473 106,270
Deferred credits and other liabilities 45,829 45,887
--------- ---------
Total liabilities 471,004 476,922
STOCKHOLDERS' EQUITY
Common stock 1,000 1,000
Paid-in capital 24,220 23,979
Retained earnings 30,906 26,538
Treasury stock (8,155) (6,447)
--------- ---------
Total stockholders' equity 47,971 45,070
--------- ---------
Total liabilities and stockholders' equity $ 518,975 $ 521,992
========= =========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
9
<PAGE> 10
TRANSTAR, INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
For the quarter ended
March 31,
----------------------
1998 1997
-------- --------
(dollars in thousands)
<S> <C> <C>
Revenues from related parties $ 58,022 $ 53,225
Revenues from others 41,063 42,856
-------- --------
Total revenues 99,085 96,081
-------- --------
Operating expenses (excluding items shown below) 78,567 79,327
Selling, general, and administrative expenses 2,909 2,620
Depreciation and amortization 6,717 6,633
-------- --------
Total operating expenses 88,193 88,580
-------- --------
Operating income 10,892 7,501
Other income 297 189
Interest income 247 133
Interest and other financial expenses (3,826) (4,654)
-------- --------
Income before income taxes 7,610 3,169
Less provision for income taxes 3,242 1,405
-------- --------
Net income $ 4,368 $ 1,764
======== ========
CONSOLIDATED STATEMENT OF RETAINED EARNINGS
(UNAUDITED)
Retained earnings (deficit), beginning of period $26,538 $(17,822)
Net income 4,368 1,764
------- --------
Retained earnings (deficit), end of period $30,906 $(16,058)
======= ========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
10
<PAGE> 11
TRANSTAR, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
For the quarter ended
March 31,
-----------------------
1998 1997
----------- ---------
(dollars in thousands)
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 4,368 $ 1,764
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 6,717 6,633
Amortization 124 165
Deferred taxes 359 (271)
(Gain) on sale of assets (73) (36)
Changes in other assets and liabilities (53) (3,433)
-------- --------
Net cash provided by operating activities 11,442 4,822
-------- --------
INVESTING ACTIVITIES:
Capital expenditures (3,166) (1,277)
Proceeds from the sale of assets 778 (31)
-------- --------
Net cash used for investing activities (2,388) (1,308)
-------- --------
FINANCING ACTIVITIES:
Repayment of debt (7,015) (10,054)
Payments to acquire Treasury Stock (1,557) -
-------- --------
Net cash used for financing activities (8,572) (10,054)
-------- --------
Increase (Decrease) in cash and cash equivalents 482 (6,540)
Cash and cash equivalents at beginning of period 24,316 24,691
-------- --------
Cash and cash equivalents at end of period $ 24,798 $ 18,151
======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
11
<PAGE> 12
TRANSTAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
MARCH 31, 1998
NOTE 1: BASIS OF FINANCIAL STATEMENT PRESENTATION:
Separate consolidated financial statements of Transtar are included in this 10-Q
because Transtar is a majority owned subsidiary of Holdings which is not
consolidated in the consolidated financial statements of Holdings. The
accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial statements
and with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all normal recurring adjustments considered
necessary for a fair statement of the results of operations for the three month
period ended March 31, 1998 have been included. The results of operations for
the three month period ended March 31, 1998 are not necessarily indicative of
the results of operations for the full year. When reading the financial
information contained in this quarterly report, reference should be made to the
Transtar financial statements, schedules and notes contained in Holdings' Annual
Report on Form 10-K for the year ended December 31, 1997.
12
<PAGE> 13
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Transtar, Inc. Results
For the Three Months ended March 31, 1998
Compared to the
Three Months ended March 31, 1997
Overall
Transtar is a transportation holding company composed of two business groups:
the Railroad Group and the Marine Group. Transtar's net income for the quarter
ending March 31, 1998 was $4.4 million, the best first quarter in Transtar's
history and an increase of $2.6 million when compared with the same period of
1997. Operating income of $10.9 million recorded in the first quarter of 1998
was $3.4 million greater than the comparable period of 1997. Transtar's first
quarter 1998 operating results were favorably affected by increased tonnage,
reduced fuel costs and an improvement in car hire earnings.
Operating Revenues
- ------------------
Operating revenues totaled $99.1 million in the first quarter of 1998, an
increase of $3.0 million over the first quarter of 1997. The operating revenue
increase between these two periods was driven by the Railroad Group while Marine
Group revenues were 13 percent behind last year's first quarter. The Railroad
Group's improvement was achieved as a result of increased shipments of ore,
coal, coke and steel and general merchandise. The Marine Group's operating
revenue decrease from the first quarter of 1997 of $2.4 million was a result of
tonnage advanced to the fourth quarter of 1997 because of favorable weather
conditions during that period.
Operating Expenses
- ------------------
Transtar's operating expenses decreased $0.4 million during the first quarter of
1998, when compared to the same period of 1997. The Railroad Group's operating
expenses increased by $0.7 million for the first quarter of 1998 to $65.9
million. These cost increases were driven by higher employment and maintenance
expenses associated with increased business volumes, partially offset by reduced
fuel prices and a 13 percent increase in car hire earnings (a contra to cost).
The Marine Group's first quarter operating costs decreased by $1.1 million in
1998 to $22.3 million primarily as a result of lower maintenance expenses and
reduced fuel prices among other items. These cost decreases were partially
offset by increases in operating costs resulting from high water conditions on
the Alabama river system during the first quarter of 1998.
Other Income, net
- -----------------
Transtar's other income, net, improved by $1.1 million during the first quarter
of 1998 when compared with the first three months of 1997. Interest expense
recognized during the first quarter of 1998 was $3.8 million, or $0.8 million
less than the same period in 1997. A reduction in interest expense was
attributable to lower outstanding debt and slightly lower interest rates during
the first quarter of 1998.
Provision for Income Taxes
- --------------------------
Transtar's provision for income taxes increased $1.8 million during the first
quarter of 1998, when compared to the same period of 1997, directly as a result
of higher before tax earnings in 1998.
13
<PAGE> 14
Liquidity and Capital Resources
- -------------------------------
Transtar's cash and temporary investments were $24.8 million at March 31, 1998,
or $6.6 million greater than at the end of the first quarter of 1997. Cash flow
from operating activities during the three months ended March 31, 1998 was $11.4
million or $6.6 million more than was generated during the same period of 1997.
Contributing to this improvement was a decrease in accounts receivable levels,
which were $6.8 million lower than receivables at March 31, 1997. Gross capital
expenditures were $3.2 million in the first quarter of 1998, an increase of $1.9
million from the same period of 1997. Proceeds from the disposition of assets
were $0.8 million greater in the first quarter of 1998 than 1997.
During the first quarter of 1998, Transtar retired $7.0 million of debt compared
to the $10.0 million retired during 1997's first three months. Since a December
7, 1993 refinancing, Transtar has retired $256.0 million of its long-term
obligations. Only nominal letters of credit are currently outstanding against
Transtar's $25.0 million Revolving Credit Facility.
Year 2000
- ---------
Transtar is committed to addressing the Year 2000 issue that could impact its
existing computer and operating systems. A plan to identify and correct Year
2000 problems was completed in mid-1997, and an outside contractor was hired to
progress the project during 1997 and 1998. Transtar expects to spend
approximately $3.8 million to make the Company Year 2000 compliant. While
Transtar management believes that it will succeed in its plan to make Transtar,
a Year 2000 compliant company, there is no guarantee that it will be completely
successful. Transtar's management believes it is too difficult to determine at
this time the impact of partial non-compliance on the operating results of
Transtar.
14
<PAGE> 15
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Holdings and TCC had no reportable events of material pending legal proceedings
other than ordinary routine litigation incidental to the business during the
three month period ended March 31, 1998.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27. Financial Data Schedule
(b) Reports on 8-K
Holdings and TCC did not file any Current Reports on Form 8-K during the
quarter ended March 31, 1998.
15
<PAGE> 16
SIGNATURE
- ---------
Pursuant to the requirements of the Securities Exchange Act of 1934, Registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
Dated: May 11, 1998
TRANSTAR HOLDINGS, L.P.
TRANSTAR CAPITAL CORPORATION
By: /s/ HOWARD A. LIPSON
-------------------------------
Howard A. Lipson, Treasurer
16
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 1,210
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,210
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 76,159
<CURRENT-LIABILITIES> 253
<BONDS> 174,959
0
0
<COMMON> 0
<OTHER-SE> (99,053)
<TOTAL-LIABILITY-AND-EQUITY> 76,159
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 55
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,813
<INCOME-PRETAX> (2,895)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,895)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,895)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
