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MAXXAM INC. REPORTS RESULTS OR SECOND QUARTER, FIRST HALF OF 1992

 MAXXAM INC. REPORTS RESULTS OR SECOND QUARTER, FIRST HALF OF 1992
 HOUSTON, July 28 /PRNewswire/ -- MAXXAM Inc. (AMEX: MXM) today reported net income of $1.4 million, or $.15 per share, for the second quarter of 1992, compared to net income of $17.5 million, or $1.85 per share, for the second quarter of 1991. For the first six months of 1992, net income was $2.3 million, or $.24 per share, compared to $42.2 million, or $4.45 per share, for the first half of 1991.
 Sales totaled $565.0 million for the second quarter and $1,094.5 for the first six months of 1992, compared to $577.5 million and $1,141.0 million for the comparable periods of 1991.
 "MAXXAM's second-quarter and first-half sales and net income declined primarily as a result of lower realized prices in our aluminum business," said Charles E. Hurwitz, chairman of the board and chief executive officer. "The lower realized prices reflect a cyclical worldwide overcapacity in that business."
 MAXXAM operates in three industries: aluminum (through Kaiser Aluminum Corp. (NYSE: KLU), an 87.3 percent-owned, fully integrated aluminum producer); forest products (primarily through The Pacific Lumber Co., a wholly owned subsidiary); and real estate management and development (primarily through MAXXAM Property Co. and various wholly owned subsidiaries). ALUMINUM OPERATIONS
 Operating income for the company's aluminum operations was $30.0 million for the second quarter and $59.9 million for the first six months of 1992, compared to $51.3 million and $111.2 million for the same periods of 1991. Sales were $490.9 million for the second quarter and $954.6 million for the first six months of 1992, compared to $507.2 million and $1,019.8 million for the comparable periods of 1991. Compared to the second quarter of 1991, the decline in operating income was largely the result of lower realized prices for alumina, primary aluminum, and fabricated aluminum products. The lower price realizations reflect the impact of recent additions to industry capacity combined with a continuing high level of exports from the former Soviet Union and sluggishness in many industrial economies.
 (NOTE: A separate press release, providing greater detail on Kaiser Aluminum Corp.'s results, also is being released today.) FOREST PRODUCTS OPERATIONS
 Operating income for the company's forest products operations was $17.5 million for the second quarter and $31.5 million for the first six months of 1992, compared to $17.0 million and $27.4 million for the same periods of 1991. Sales by forest products operations amounted to $57.5 million in the second quarter and $109.0 million in the first six months of 1992, compared to $57.5 million and $100.5 million for the same periods of 1991.
 Compared to the second quarter of 1991, sales and operating income increased modestly despite the temporary disruption of some of the company's manufacturing operations caused by a series of strong earthquakes in Northern California in late April. Contributing to the improved results for the quarter and the first half of 1992 were higher prices for redwood common lumber. REAL ESTATE OPERATIONS
 The company's real estate operations reported an operating loss of $2.2 million for the second quarter and $4.0 million for the first half of 1992, compared to operating losses of $3.4 million and $9.8 million for the


comparable periods of 1991. Sales for MAXXAM's real estate operations were $16.6 million for the second quarter of 1992 and $30.9 million for the first half of the year, compared to $12.8 million and $20.7 million for the same periods in 1991.
 Compared to the second quarter of 1991, the improvement in financial results reflects the favorable impact of revenue generated by the company's portfolio of Texas-based income-producing properties that was acquired from the Resolution Trust Corp. in June of 1991. CORPORATE
 At the corporate level, certain costs and interest expenses that are not allocated to the company's business segments resulted in losses before income taxes and minority interests of $12.3 million for the second quarter and $17.4 million for the first half of 1992, compared to $15.8 million and $27.5 million for the same periods of 1991.
 The reduced loss was mainly attributable to a reduction in outstanding indebtedness, lower interest rates associated with that indebtedness, and lower administrative costs. OUTLOOK
 Looking ahead, Hurwitz said, "We expect MAXXAM's results in the second half to continue to be unfavorably affected by an ongoing imbalance of supply and demand in world aluminum markets, particularly in light of recent additions to industry capacity and indications that aluminum exports from the former Soviet Union may be on the increase once again."
 MAXXAM
 CONDENSED CONSOLIDATED STATEMENT OF INCOME (Unaudited)
 (In millions of dollars, except per share amounts)
 Three Months Ended Six Months Ended
 June 30, June 30,
 1992 1991 1992 1991
 Sales $565.0 $577.5 $1,094.5 $1,141.0
 Costs and expenses 523.1 516.1 1,016.1 1,023.5
 Operating income 41.9 61.4 78.4 117.5
 Other income (expense):
 Investment, interest and
 other income 13.5 9.4 28.3 38.3
 Interest expense (49.6) (51.4) (99.8) (104.2)
 Income before income
 taxes and minority
 interests 5.8 19.4 6.9 51.6
 Provision for income taxes (2.9) (1.2) (1.8) (7.7)
 Minority interests (1.5) (0.7) (2.8) (1.7)
 Net income (loss) $1.4 $17.5 $2.3 $42.2
 Net income (loss) per
 common and common
 equivalent share $0.15 $1.85 $0.24 $ 4.45
 Common and common
 equivalent shares
 (in thousands) 9,428 9,462 9,431 9,490
 -0- 7/28/92
 /CONTACT: Scott Lamb of MAXXAM, 713-267-3826/
 (MXM KLU) CO: MAXXAM ST: Texas IN: MNG SU: ERN


RM -- SF005 -- 3902 07/28/92 09:24 EDT
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Date:Jul 28, 1992
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