UNITED STATES
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, 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 1-3872
STORER COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 59-2638096
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1500 Market Street, Philadelphia, PA 19102-2148
- --------------------------------------------------------------------------------
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code: (215) 665-1700
--------------------------
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 twelve months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such requirements
for the past 90 days.
Yes _X_ No ___
--------------------------
As of March 31, 1997, there were 239.99 shares of Common Stock outstanding.
The Registrant meets the conditions set forth in General Instructions H (1)(a)
and (b) of Form 10-Q and is therefore filing this form with the reduced
disclosure format.
<PAGE>
STORER COMMUNICATIONS, INC. AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED MARCH 31, 1997
TABLE OF CONTENTS
Page
Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheet
as of March 31, 1997 and December 31,
1996 (Unaudited)..........................................2
Condensed Consolidated Statement of
Operations and Accumulated Deficit for
the Three Months Ended March 31, 1997
and 1996 (Unaudited)......................................3
Condensed Consolidated Statement of Cash
Flows for the Three Months Ended March 31, 1997
and 1996 (Unaudited)......................................4
Notes to Condensed Consolidated
Financial Statements (Unaudited)......................5 - 6
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations............................................7 - 9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings........................................10
Item 6. Exhibits and Reports on Form 8-K.........................10
SIGNATURE .........................................................11
-----------------------------------
This Quarterly Report on Form 10-Q contains forward looking statements made
pursuant to the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995. Readers are cautioned that such forward looking statements
involve risks and uncertainties which could significantly affect expected
results in the future from those expressed in any such forward looking
statements made by, or on behalf of the Company. Certain factors that could
cause actual results to differ materially include, without limitation, the
effects of legislative and regulatory changes; the potential for increased
competition; technological changes; the need to generate substantial growth in
the subscriber base by successfully launching, marketing and providing services
in identified markets; pricing pressures which could affect demand for the
Company's services; the Company's ability to expand its distribution; changes in
labor, programming, equipment and capital costs; the Company's continued ability
to acquire programming that customers will find attractive; general business and
economic conditions; and other risks detailed from time to time in the Company's
periodic reports filed with the Securities and Exchange Commission.
<PAGE>
STORER COMMUNICATIONS, INC. AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED MARCH 31, 1997
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
<TABLE>
<CAPTION>
(Dollars in thousands, except share data)
March 31, December 31,
1997 1996
<S> <C> <C>
ASSETS
Cash and cash equivalents.................................................... $2,650 $1,435
Accounts receivable, less allowance for
doubtful accounts of $2,671 and $2,552..................................... 11,571 15,007
Other current assets......................................................... 5,955 5,689
Property and equipment....................................................... 662,701 643,540
Accumulated depreciation................................................... (293,823) (285,206)
---------- ----------
Property and equipment, net................................................ 368,878 358,334
---------- ----------
Deferred charges............................................................. 1,567,264 1,566,577
Accumulated amortization .................................................. (368,821) (358,103)
---------- ----------
Deferred charges, net...................................................... 1,198,443 1,208,474
---------- ----------
Due from affiliates.......................................................... 345,023 304,853
Investment................................................................... 20,701
Other assets................................................................. 4,144 4,426
---------- ----------
$1,936,664 $1,918,919
========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Accounts payable and accrued expenses........................................ $60,963 $56,615
Accrued interest............................................................. 5,231 1,748
Other liabilities............................................................ 20,464 20,766
Debt......................................................................... 127,148 126,609
Deferred income taxes........................................................ 484,137 479,546
---------- ----------
Total liabilities........................................................ 697,943 685,284
---------- ----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDER'S EQUITY
Common stock, $.01 par value - authorized, 10,000
shares; issued and outstanding, 239.99 shares..............................
Additional capital........................................................... 3,045,956 3,019,227
Accumulated deficit.......................................................... (1,091,946) (1,095,972)
Unrealized loss on marketable securities..................................... (1,390)
Finance Sub securities....................................................... (715,289) (688,230)
---------- ----------
Total stockholder's equity............................................... 1,238,721 1,233,635
---------- ----------
$1,936,664 $1,918,919
========== ==========
</TABLE>
See notes to condensed consolidated financial statements.
2
<PAGE>
STORER COMMUNICATIONS, INC. AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED MARCH 31, 1997
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
(Unaudited)
<TABLE>
<CAPTION>
(Dollars in thousands)
Three Months Ended March 31,
1997 1996
<S> <C> <C>
SERVICE INCOME.................................................................. $115,782 $103,880
----------- -----------
COSTS AND EXPENSES
Operating.................................................................... 53,070 46,164
Selling, general and administrative.......................................... 23,059 20,786
Depreciation and amortization................................................ 25,814 26,256
----------- -----------
101,943 93,206
----------- -----------
OPERATING INCOME................................................................ 13,839 10,674
OTHER (INCOME) EXPENSE
Interest expense............................................................. 4,176 4,189
Investment loss (income), net................................................ 1,500 (109)
----------- -----------
5,676 4,080
----------- -----------
INCOME BEFORE INCOME TAX EXPENSE................................................ 8,163 6,594
INCOME TAX EXPENSE.............................................................. 4,137 4,008
----------- -----------
NET INCOME...................................................................... 4,026 2,586
ACCUMULATED DEFICIT
Beginning of period ......................................................... (1,095,972) (1,128,642)
----------- -----------
End of period................................................................ ($1,091,946) ($1,126,056)
=========== ===========
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE>
STORER COMMUNICATIONS, INC. AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED MARCH 31, 1997
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
(Dollars in thousands)
Three Months Ended March 31,
1997 1996
<S> <C> <C>
OPERATING ACTIVITIES
Net income................................................................... $4,026 $2,586
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization.............................................. 25,814 26,256
Loss on sale of investment................................................. 1,657
Non-cash interest expense.................................................. 661 707
Deferred income tax expense................................................ 3,512 3,508
------- -------
35,670 33,057
Decrease in accounts receivable, other current assets
and other assets......................................................... 3,452 2,617
Increase (decrease) in accounts payable and accrued expenses,
accrued interest and other liabilities................................... 7,407 (3,974)
------- -------
Net cash provided by operating activities............................ 46,529 31,700
------- -------
FINANCING ACTIVITIES
Net transactions with affiliates............................................. (40,170) (15,098)
------- -------
Net cash used in financing activities................................ (40,170) (15,098)
------- -------
INVESTING ACTIVITIES
Capital expenditures and other............................................... (26,327) (16,767)
Proceeds from sale of investment............................................. 21,183
------- -------
Net cash used in investing activities................................ (5,144) (16,767)
------- -------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS................................ 1,215 (165)
CASH AND CASH EQUIVALENTS, beginning of period.................................. 1,435 1,386
------- -------
CASH AND CASH EQUIVALENTS, end of period........................................ $2,650 $1,221
======= =======
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE>
STORER COMMUNICATIONS, INC. AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED MARCH 31, 1997
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Basis of Presentation
The condensed consolidated balance sheet as of December 31, 1996 has been
condensed from the audited balance sheet as of that date. The condensed
consolidated balance sheet as of March 31, 1997 and the condensed
consolidated statements of operations and accumulated deficit and of cash
flows for the three months ended March 31, 1997 and 1996 have been prepared
by Storer Communications, Inc. (the "Company") and have not been audited by
the Company's independent auditors. In the opinion of management, all
adjustments (which include only normal recurring adjustments) necessary to
present fairly the financial position, results of operations and cash flows
as of March 31, 1997 and for all periods presented have been made.
Certain information and note disclosures normally included in the Company's
annual financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. These condensed
consolidated financial statements should be read in conjunction with the
financial statements and notes thereto included in the Company's December
31, 1996 Annual Report on Form 10-K filed with the Securities and Exchange
Commission. The results of operations for the period ended March 31, 1997
are not necessarily indicative of operating results for the full year.
2. INVESTMENT
In October 1996, the Company received 552,014 shares of Time Warner, Inc.
("Time Warner") common stock (the "Time Warner Stock") in exchange (the
"Exchange") for all of the shares of Turner Broadcasting System, Inc.
("TBS") stock (the "TBS Stock") held by the Company as a result of the
merger of Time Warner and TBS. As a result of the Exchange, the Company
recognized a pre-tax gain of $19.8 million in the fourth quarter of 1996,
representing the difference between the Company's historical cost basis in
the TBS Stock of $3.0 million and the new basis for the Company's
investment in Time Warner Stock of $22.8 million, which was based on the
closing price of the Time Warner Stock on the merger date of $41.375 per
share. As of December 31, 1996, the shares of Time Warner Stock held by the
Company were recorded at fair value of $20.7 million. The unrealized loss
on this investment of $2.1 million was reported in the Company's condensed
consolidated balance sheet as of December 31, 1996 as a decrease in
stockholder's equity, net of deferred income tax benefit of $0.7 million.
In January 1997, the Company sold its entire interest in Time Warner for
$21.2 million and recognized a pre-tax loss of $1.6 million.
3. RELATED PARTY TRANSACTIONS
The Company receives sales commissions from QVC, Inc. ("QVC"), an
electronic retailer and a majority owned and controlled subsidiary of
Comcast Corporation ("Comcast"), the Company's indirect parent, based on a
percentage of QVC sales to the Company's subscribers. In addition, the
Company recognizes revenues relating to the carriage of certain QVC
programming. For the three months ended March 31, 1997 and 1996, the
Company's service income includes $305,000 and $220,000, respectively,
relating to QVC.
Comcast, through a management agreement, manages the operations of the
Company's subsidiaries, including rebuilds and upgrades. The management
agreement generally provides that Comcast will supervise the management and
operations of the cable systems and arrange for and supervise (but not
necessarily perform itself) certain administrative functions. As
compensation for such services, the agreement provides for Comcast to
charge management fees of 6% of gross revenues. Comcast charged the
Company's subsidiaries management fees of $6.9 million and $6.2 million
during the three months ended March 31, 1997 and 1996, respectively.
5
<PAGE>
STORER COMMUNICATIONS, INC. AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED MARCH 31, 1997
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONCLUDED
(Unaudited)
These management fees are included in selling, general and administrative
expenses in the Company's condensed consolidated statement of operations
and accumulated deficit.
On behalf of the Company, Comcast Storer, Inc. ("CSI"), the Company's
parent and an indirect wholly owned subsidiary of Comcast, seeks and
secures, through Comcast, long-term programming contracts that generally
provide for payment based on either a monthly fee per subscriber per
channel or a percentage of certain subscriber revenues. CSI charges each of
the Company's subsidiaries for programming on a basis which generally
approximates the amount each such subsidiary would be charged if it
purchased directly from the supplier and did not benefit from the
purchasing power of Comcast's consolidated operations. Amounts charged to
the Company by CSI for programming (the "Programming Charges") are included
in operating expenses in the Company's condensed consolidated statement of
operations and accumulated deficit. The Company purchases certain other
services, including insurance and employee benefits, from Comcast under
cost-sharing arrangements on terms that reflect Comcast's actual cost. The
Company reimburses Comcast for certain other costs (primarily salaries)
under cost-reimbursement arrangements. Under all of these arrangements, the
Company incurred total expenses of $40.9 million and $35.2 million,
including $36.3 million and $31.0 million of Programming Charges, during
the three months ended March 31, 1997 and 1996, respectively.
Due from affiliates in the Company's condensed consolidated balance sheet
primarily consists of cash transfers to CSI under a cash management
program, net of expenses charged under the cost-sharing arrangements
described above and amounts payable to Comcast and its affiliates as
reimbursement for payments made, in the ordinary course of business, by
such affiliates on behalf of the Company.
4. STATEMENT OF CASH FLOWS - SUPPLEMENTAL INFORMATION
The Company recognized non-cash dividends on the preferred stock of Comcast
Storer Finance Sub, Inc., a wholly owned subsidiary of CSI, of $26.1
million and $22.3 million during the three months ended March 31, 1997 and
1996, respectively. The preferred stock dividends recognized were credited
to additional capital in the Company's condensed consolidated balance
sheet.
5. CONTINGENCIES
The Company is subject to claims which arise in the ordinary course of its
business and other legal proceedings. In the opinion of management, the
amount of ultimate liability with respect to these actions will not
materially affect the financial position, results of operations or
liquidity of the Company.
The Company currently is seeking to justify rates for basic cable services
and equipment in its cable systems in the State of Connecticut on the basis
of a cost-of-service showing. The State of Connecticut has ordered the
Company to reduce such rates and to make refunds to subscribers. The
Company has appealed the Connecticut decision to the Federal Communications
Commission ("FCC"). Recent pronouncements from the FCC, which generally
support the Company's position on appeal, have caused the State of
Connecticut to reexamine its prior ruling. While the Company cannot predict
the outcome of this action, the Company believes that the ultimate
resolution of this pending regulatory matter will not have a material
adverse impact on the Company's financial position, results of operations
or liquidity.
6
<PAGE>
STORER COMMUNICATIONS, INC. AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED MARCH 31, 1997
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Liquidity and Capital Resources
The Company's business is capital intensive and continually requires cash for
development and expansion. The Company has historically met its cash needs
through its cash and cash equivalents, cash flows from operating activities as
well as interest and principal received on certain securities issued by Comcast
Storer Finance Sub, Inc., an indirect wholly owned subsidiary of Comcast
Corporation ("Comcast"), the Company's indirect parent, to the Company (the
"Finance Sub Securities").
In October 1996, the Company received 552,014 shares of Time Warner, Inc. ("Time
Warner") common stock (the "Time Warner Stock") in exchange (the "Exchange") for
all of the shares of Turner Broadcasting System, Inc. ("TBS") stock (the "TBS
Stock") held by the Company as a result of the merger of Time Warner and TBS. As
a result of the Exchange, the Company recognized a pre-tax gain of $19.8 million
in the fourth quarter of 1996, representing the difference between the Company's
historical cost basis in the TBS Stock of $3.0 million and the new basis for the
Company's investment in Time Warner Stock of $22.8 million, which was based on
the closing price of the Time Warner Stock on the merger date of $41.375 per
share. As of December 31, 1996, the shares of Time Warner Stock held by the
Company were recorded at fair value of $20.7 million. The unrealized loss on
this investment of $2.1 million was reported in the Company's condensed
consolidated balance sheet as of December 31, 1996 as a decrease in
stockholder's equity, net of deferred income tax benefit of $0.7 million. In
January 1997, the Company sold its entire interest in Time Warner for $21.2
million and recognized a pre-tax loss of $1.6 million.
The Company believes that it will be able to meet its current and long-term
liquidity needs and capital requirements, including fixed charges, through its
cash flows from operating activities, existing cash and cash equivalents,
interest and principal received on the Finance Sub Securities, amounts due from
affiliates and other external financing.
Results of Operations
Summarized consolidated financial information for the Company for the three
months ended March 31, 1997 and 1996 is as follows (dollars in millions, "NM"
denotes percentage is not meaningful):
<TABLE>
<CAPTION>
Three Months Ended
March 31, Increase/(Decrease)
1997 1996 $ %
<S> <C> <C> <C> <C>
Service income............................................ $115.8 $103.9 $11.9 11.5%
Operating, selling, general and administrative
expenses............................................... 76.1 67.0 9.1 13.6
------ ------
Operating income before depreciation and
amortization (1) ...................................... 39.7 36.9 2.8 7.6
Depreciation and amortization............................. 25.9 26.2 (0.3) (1.1)
------ ------
Operating income.......................................... 13.8 10.7 3.1 29.0
------ ------
Interest expense.......................................... 4.2 4.2
Investment loss (income), net............................. 1.5 (0.1) 1.6 NM
Income tax expense........................................ 4.1 4.0 0.1 2.5
------ ------
Net income................................................ $4.0 $2.6 $1.4 53.8%
====== ======
</TABLE>
- ------------
7
<PAGE>
STORER COMMUNICATIONS, INC. AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED MARCH 31, 1997
(1) Operating income before depreciation and amortization is commonly referred
to in the Company's business as "operating cash flow." Operating cash flow
is a measure of a company's ability to generate cash to service its
obligations, including debt service obligations, and to finance capital and
other expenditures. In part due to the capital intensive nature of the
Company's business and the resulting significant level of non-cash
depreciation and amortization expense, operating cash flow is frequently
used as one of the bases for comparing businesses in the Company's
industry. Operating cash flow does not purport to represent net income or
net cash provided by operating activities, as those terms are defined under
generally accepted accounting principles, and should not be considered as
an alternative to such measurements as an indicator of the Company's
performance.
Of the $11.9 million increase in service income for the three month period from
1996 to 1997, $1.8 million is attributable to subscriber growth, $9.4 million
relates to an increase in rates and $700,000 relates to growth in other product
offerings.
The Company receives sales commissions from QVC, Inc. ("QVC"), an electronic
retailer and a majority owned and controlled subsidiary of Comcast, based on a
percentage of QVC sales to the Company's subscribers. In addition, the Company
recognizes revenues relating to the carriage of certain QVC programming. For the
three months ended March 31, 1997 and 1996, the Company's service income
includes $305,000 and $220,000, respectively, relating to QVC.
Of the $9.1 million increase in operating, selling, general and administrative
expenses for the three month period from 1996 to 1997, $5.3 million is
attributable to an increase in the cost of cable programming as a result of
subscriber growth, additional programming offerings and changes in rates and
$3.8 million results from an increase in the cost of labor and other volume
related expenses. Comcast charged the Company's subsidiaries management fees of
$6.9 million and $6.2 million during the three months ended March 31, 1997 and
1996, respectively. These management fees are included in selling, general and
administrative expenses in the Company's condensed consolidated statement of
operations and accumulated deficit.
On behalf of the Company, Comcast Storer, Inc. ("CSI"), the Company's parent and
an indirect wholly owned subsidiary of Comcast, seeks and secures, through
Comcast, long-term programming contracts that generally provide for payment
based on either a monthly fee per subscriber per channel or a percentage of
certain subscriber revenues. CSI charges each of the Company's subsidiaries for
programming on a basis which generally approximates the amount each such
subsidiary would be charged if it purchased directly from the supplier and did
not benefit from the purchasing power of Comcast's consolidated operations.
Amounts charged to the Company by CSI for programming (the "Programming
Charges") are included in operating expenses in the Company's condensed
consolidated statement of operations and accumulated deficit. The Company
purchases certain other services, including insurance and employee benefits,
from Comcast under cost-sharing arrangements on terms that reflect Comcast's
actual cost. The Company reimburses Comcast for certain other costs (primarily
salaries) under cost-reimbursement arrangements. Under all of these
arrangements, the Company incurred total expenses of $40.9 million and $35.2
million, including $36.3 million and $31.0 million of Programming Charges,
during the three months ended March 31, 1997 and 1996, respectively. It is
anticipated that the Company's cost of cable programming will increase in the
future as cable programming rates increase and additional sources of cable
programming become available.
The $300,000 decrease in depreciation and amortization expense for the three
month period from 1996 to 1997 is primarily due to the timing and extent of the
rebuild and upgrade of the Company's cable plant.
8
<PAGE>
STORER COMMUNICATIONS, INC. AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED MARCH 31, 1997
The $1.6 million increase in net investment loss (income) for the three month
period from 1996 to 1997 is primarily attributable to the loss recognized on the
sale of the Time Warner Stock.
The $100,000 increase in income tax expense for the three month period from 1996
to 1997 is primarily attributable to the increase in income before income tax
expense.
For the three months ended March 31, 1997 and 1996, the Company's earnings
before income tax expense and fixed charges (interest expense) of $12.3 million
and $10.8 million, respectively, exceeded its fixed charges of $4.2 million in
each period.
The Company believes that its operations are not materially affected by
inflation.
Regulatory Developments
The Company currently is seeking to justify rates for basic cable services and
equipment in its cable systems in the State of Connecticut on the basis of a
cost-of-service showing. The State of Connecticut has ordered the Company to
reduce such rates and to make refunds to subscribers. The Company has appealed
the Connecticut decision to the Federal Communications Commission ("FCC").
Recent pronouncements from the FCC, which generally support the Company's
position on appeal, have caused the State of Connecticut to reexamine its prior
ruling. While the Company cannot predict the outcome of this action, the Company
believes that the ultimate resolution of this pending regulatory matter will not
have a material adverse impact on the Company's financial position, results of
operations or liquidity.
9
<PAGE>
STORER COMMUNICATIONS, INC. AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED MARCH 31, 1997
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
The Company is not party to litigation which, in the opinion of the
Company's management, will have a material adverse effect on the Company's
financial position, results of operations or liquidity.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits required to be filed by Item 601 of Regulation S-K:
27.1 Financial Data Schedule.
(b) Reports on Form 8-K - None.
10
<PAGE>
STORER COMMUNICATIONS, INC. AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED MARCH 31, 1997
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
STORER COMMUNICATIONS, INC.
------------------------------------------
/s/ Lawrence S. Smith
------------------------------------------
Lawrence S. Smith
Senior Vice President
Accounting and Administration
(Principal Financial and Accounting Officer)
Date: May 14, 1997
11
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated statement of operations and consolidated balance sheet and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000094679
<NAME> STORER COMMUNICATIONS, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 2,650
<SECURITIES> 0
<RECEIVABLES> 14,242
<ALLOWANCES> (2,671)
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 662,701
<DEPRECIATION> (293,823)
<TOTAL-ASSETS> 1,936,664
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 127,148
0
0
<COMMON> 0
<OTHER-SE> 1,238,721
<TOTAL-LIABILITY-AND-EQUITY> 1,936,664
<SALES> 115,782
<TOTAL-REVENUES> 115,782
<CGS> 0
<TOTAL-COSTS> (101,943)
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (4,176)
<INCOME-PRETAX> 8,163
<INCOME-TAX> (4,137)
<INCOME-CONTINUING> 4,026
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,026
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>The company utilizes an unclassified balance sheet. As a result, a zero value
is reported for both current assets and current liabilities.
</FN>
</TABLE>
