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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 10-Q

                           ---------------------------


               QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2001

                        Commission File Number 333-63825


                           SCOTIA PACIFIC COMPANY LLC
             (Exact name of Registrant as specified in its charter)



             DELAWARE                                   68-0414690
   (State or other jurisdiction                      (I.R.S. Employer
 of incorporation or organization)                Identification Number)


               P. O. BOX 712
        125 MAIN STREET, 2ND FLOOR                        95565
            SCOTIA, CALIFORNIA                          (Zip Code)
 (Address of Principal Executive Offices)



       Registrant's telephone number, including area code: (707) 764-2330



      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 / /



REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(A) AND (B)
OF FORM 10-Q AND IS THEREFORE FILING THIS FORM WITH THE REDUCED DISCLOSURE
FORMAT.


-------------------------------------------------------------------------------


                                TABLE OF CONTENTS



PART I.  -  FINANCIAL INFORMATION

         Item 1.   Financial Statements:
                   Balance Sheet at March 31, 2001 and December 31, 2000
                   Statement of Income for the three months ended March 31, 2001 and 2000
                   Statement of Cash Flows for the three months ended March 31, 2001 and 2000
                   Condensed Notes to Financial Statements

         Item 2.   Management's Discussion and Analysis of Financial Condition and
                       Results of Operations

PART II.  -  OTHER INFORMATION

         Item 1.   Legal Proceedings
         Item 6.   Exhibits and Reports on Form 8-K
         Signature

APPENDIX A - GLOSSARY OF DEFINED TERMS


                           SCOTIA PACIFIC COMPANY LLC

                                  BALANCE SHEET
                            (IN MILLIONS OF DOLLARS)



                                                                                          MARCH 31,   DECEMBER 31,
                                                                                            2001          2000
                                                                                        ------------- -------------
                                                                                         (UNAUDITED)
ASSETS
Current assets:
   Cash and cash equivalents........................................................... $        9.1  $       98.1
   Marketable securities, restricted...................................................         16.7          16.3
   Receivables from Pacific Lumber.....................................................          4.9          11.2
   Prepaid timber harvesting costs.....................................................          6.5           5.7
   Other prepaid expenses and other current assets.....................................          0.3           0.5
                                                                                        ------------- -------------
      Total current assets.............................................................         37.5         131.8
Timber and timberlands, net of accumulated depletion of $252.8 and
   $251.8, respectively................................................................        254.6         255.0
Property and equipment, net of accumulated depreciation of $11.8 and
   $11.3, respectively.................................................................         19.0          19.0
Deferred financing costs, net..........................................................         17.5          17.8
Restricted cash, marketable securities and other investments...........................         84.9          94.6
Other assets...........................................................................          7.3           7.4
                                                                                        ------------- -------------
                                                                                        $      420.8  $      525.6
                                                                                        ============= =============

Liabilities and Member Deficit
Current liabilities:
   Due to Pacific Lumber............................................................... $        0.8  $        0.3
   Accrued interest....................................................................         11.2          26.3
   Other accrued liabilities...........................................................          1.6           3.4
   Current maturities of long-term debt................................................         16.8          16.4
                                                                                        ------------- -------------
      Total current liabilities........................................................         30.4          46.4
Long-term debt, less current maturities and excluding $58.2 and $59.9, respectively,
   of Timber Notes held in SAR Account.................................................        755.5         767.2
                                                                                        ------------- -------------
      Total liabilities................................................................        785.9         813.6
                                                                                        ------------- -------------

Contingencies (See Note 3)

Member deficit.........................................................................       (365.1)       (288.0)
                                                                                        ------------- -------------
                                                                                        $      420.8  $      525.6
                                                                                        ============= =============



   The accompanying notes are an integral part of these financial statements.


                           SCOTIA PACIFIC COMPANY LLC

                           STATEMENT OF INCOME (LOSS)
                            (IN MILLIONS OF DOLLARS)



                                                                                              THREE MONTHS ENDED
                                                                                                  MARCH 31,
                                                                                            -----------------------
                                                                                               2001        2000
                                                                                            ----------  -----------
                                                                                                  (UNAUDITED)

Log sales to Pacific Lumber...............................................................  $    13.1   $     20.3
                                                                                            ----------  -----------

Operating expenses:
   General and administrative.............................................................        3.6          3.4
   Depletion, depreciation and amortization...............................................        1.7          2.5
                                                                                            ----------  -----------
                                                                                                  5.3          5.9
                                                                                            ----------  -----------

Operating income..........................................................................        7.8         14.4

Other income (expense):
   Interest and other income..............................................................        2.4          1.5
   Interest expense.......................................................................       (14.8)      (16.1)
                                                                                            ----------  -----------
Loss before extraordinary item............................................................       (4.6)        (0.2)
Extraordinary item:
   Gains on repurchases of debt...........................................................          -          2.4
                                                                                            ----------  -----------
Net income (loss).........................................................................  $    (4.6)  $      2.2
                                                                                            ==========  ===========


   The accompanying notes are an integral part of these financial statements.


                           SCOTIA PACIFIC COMPANY LLC

                             STATEMENT OF CASH FLOWS
                            (IN MILLIONS OF DOLLARS)



                                                                                               THREE MONTHS ENDED
                                                                                                   MARCH 31,
                                                                                             ----------------------
                                                                                                2001       2000
                                                                                             ---------- -----------
                                                                                                   (UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income (loss).......................................................................  $    (4.6) $      2.2
   Adjustments to reconcile net income (loss) to net cash used for operating activities:
      Extraordinary gains on repurchases of debt...........................................          -        (2.4)
      Depletion, depreciation and amortization.............................................        1.7         2.5
      Amortization of deferred financing costs.............................................        0.3         0.4
      Increase (decrease) in cash resulting from changes in:
        Receivables from Pacific Lumber....................................................        6.3        (5.1)
        Prepaid timber harvest costs.......................................................       (0.8)       (1.1)
        Due to Pacific Lumber..............................................................        0.1         0.1
        Accrued interest...................................................................      (15.1)      (16.2)
        Other accrued liabilities..........................................................       (1.8)       (0.4)
      Other................................................................................        0.2           -
                                                                                             ---------- -----------
      Net cash used for operating activities...............................................      (13.7)      (20.0)
                                                                                             ---------- -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Capital expenditures....................................................................       (0.7)       (1.4)
   Restricted cash withdrawals used to acquire timberlands.................................          -         0.3
                                                                                             ---------- -----------
      Net cash used for investing activities...............................................       (0.7)       (1.1)
                                                                                             ---------- -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Principal payments on Timber Notes and other timber related debt........................      (11.4)      (13.0)
   Net borrowings under line of credit agreement...........................................          -        23.2
   Member distribution.....................................................................      (73.1)          -
   Net changes in debt related restricted cash, marketable securities and other
      investments..........................................................................        9.9        11.4
                                                                                             ---------- -----------
      Net cash provided by (used for) financing activities.................................      (74.6)       21.6
                                                                                             ---------- -----------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS.......................................      (89.0)        0.5
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD...........................................       98.1         1.3
                                                                                             ---------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD.................................................  $     9.1  $      1.8
                                                                                             ========== ===========

SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
   Repurchases of debt using restricted cash...............................................  $       -  $     18.6
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
   Interest paid...........................................................................  $    29.5  $     31.9



   The accompanying notes are an integral part of these financial statements.


                           SCOTIA PACIFIC COMPANY LLC

                     CONDENSED NOTES TO FINANCIAL STATEMENTS

1.    GENERAL

      The information contained in the following notes to the financial
statements is condensed from that which would appear in the annual financial
statements; accordingly, the financial statements included herein should be
reviewed in conjunction with the financial statements and related notes thereto
contained in the Form 10-K. Any capitalized terms used but not defined in these
Condensed Notes to Financial Statements are defined in the "Glossary of Defined
Terms" contained in Appendix A. Accounting measurements at interim dates
inherently involve greater reliance on estimates than at year end. The results
of operations for the interim periods presented are not necessarily indicative
of the results to be expected for the entire year.

      The financial statements included herein are unaudited; however, they
include all adjustments of a normal recurring nature which, in the opinion of
management, are necessary to present fairly the financial position of the
Company at March 31, 2001, and the results of operations and cash flows for the
three months ended March 31, 2001 and 2000. The Company is a wholly owned
subsidiary of Pacific Lumber which is a wholly owned subsidiary of MGI. MGI is a
wholly owned subsidiary of MGHI which is a wholly owned subsidiary of MAXXAM.

2.    CASH, MARKETABLE SECURITIES AND OTHER INVESTMENTS

      Cash, marketable securities and other investments include the following
amounts which are restricted (in millions):


                                                                                          March 31,    DECEMBER 31,
                                                                                            2001           2000
                                                                                        -------------  ------------
                                                                                         (UNAUDITED)
Current assets:
   Cash and cash equivalents, restricted..............................................  $        5.2   $      29.2
   Marketable securities, restricted:
      Amounts held in SAR Account.....................................................          16.7          16.3
                                                                                        -------------  ------------
                                                                                                21.9          45.5
Long-term restricted cash, marketable securities and other investments:
   Amounts held in SAR Account........................................................         134.1         144.4
   Amounts held in Prefunding Account.................................................           2.5           2.5
   Other amounts restricted under the Indenture.......................................           0.3           0.4
   Less: Amounts attributable to Timber Notes held in SAR Account.....................         (52.0)        (52.7)
                                                                                        -------------  ------------
                                                                                                84.9          94.6
                                                                                        -------------  ------------
Total restricted cash, marketable securities and other investments....................  $      106.8   $     140.1
                                                                                        =============  ============

      Funds held in the SAR Account include a limited partnership interest in an
investment fund (the "Equity Fund Partnership") which invests in a diversified
portfolio of common stocks and other equity securities whose issuers are
included in merger, tender offer, spin-off or recapitalization transactions. The
following table shows the Company's investment in the Equity Fund Partnership
and the ownership interest (dollars in millions):


                                                                                          MARCH 31,      DECEMBER 31,
                                                                                            2001             2000
                                                                                        -------------   --------------

Investment in Equity Fund Partnership................................................   $       10.2    $        10.1
Percentage of ownership held.........................................................            3.5%            10.8%


3.    CONTINGENCIES

      Regulatory and environmental matters play a significant role in the
Company's business, which is subject to a variety of California and federal laws
and regulations, as well as the HCP and SYP and Pacific Lumber's timber
operator's license, dealing with timber harvesting practices, threatened and
endangered species and habitat for such species, and air and water quality. On
March 1, 1999, Pacific Lumber and MAXXAM consummated the Headwaters Agreement
with the United States and California. In addition to the transfer of the
Headwaters Timberlands, the SYP and HCP were approved and the Permits were
issued.


       The SYP complies with certain California Board of Forestry and Fire
Protection regulations requiring timber companies to project timber growth and
harvest on their timberlands over a 100-year planning period and to demonstrate
that their projected average annual harvest for any decade within a 100-year
planning period will not exceed the average annual harvest level during the last
decade of the 100-year planning period. The SYP is effective for 10 years
(subject to review after five years) and may be amended by Pacific Lumber,
subject to approval by the CDF. Revised SYPs will be prepared every decade that
address the harvest level based upon reassessment of changes in the resource
base and other factors. The HCP and the Permits allow incidental "take" of
certain species located on the Company's timberlands which species have been
listed as endangered or threatened under the ESA and/or the CESA so long as
there is no "jeopardy" to the continued existence of such species. The HCP
identifies the measures to be instituted in order to minimize and mitigate the
anticipated level of take to the greatest extent practicable. The SYP is also
subject to certain of these provisions. The HCP and related Permits have a term
of 50 years. The Company believes that the SYP and the HCP should in the
long-term expedite the preparation and facilitate approval of its THPs, although
the Company is experiencing difficulties in the THP approval process as it
implements these agreements.

      Under the CWA, the EPA is required to establish TMDLs in water courses
that have been declared to be "water quality impaired." The EPA and the North
Coast Regional Water Quality Control Board are in the process of establishing
TMDLs for 17 northern California rivers and certain of their tributaries,
including nine water courses that flow within the Company's timberlands. The
Company expects this process to continue into 2010. In the December 1999 EPA
report dealing with TMDLs on two of the nine water courses, the agency indicated
that the requirements under the HCP would significantly address the sediment
issues that resulted in TMDL requirements for these water courses. However, the
September 2000 report by the staff of the North Coast Regional Water Quality
Control Board proposed various actions, including restrictions on harvesting
beyond those required under the HCP. Dates for hearings concerning these matters
have not been scheduled. Establishment of the final TMDL requirements applicable
to the Company's timberlands will be a lengthy process, and the final TMDL
requirements applicable to the Company's timberlands may require aquatic
protection measures that are different from or in addition to the prescriptions
to be developed pursuant to the watershed analysis process provided for in the
HCP.

      Lawsuits are pending and threatened which seek to prevent the Company from
implementing the HCP and/or the SYP, implementing certain of the Company's
approved THPs or carrying out certain other operations. On December 2, 1997, the
Wrigley lawsuit was filed. This action alleges, among other things, that the
defendants' logging practices have contributed to an increase in flooding and
damage to domestic water systems in a portion of the Elk River watershed. The
Company believes that it has strong factual and legal defenses with respect to
the Wrigley lawsuit; however, there can be no assurance that it will not have a
material adverse effect on the Company's financial position, results of
operations or liquidity.

      On March 31, 1999, the EPIC-SYP/Permits lawsuit was filed alleging various
violations of the CESA and the California Environmental Quality Act, and
challenging, among other things, the validity and legality of the Permits issued
by California and the SYP. On March 31, 1999, the USWA lawsuit was filed also
challenging the validity and legality of the SYP. The Company believes that
appropriate procedures were followed throughout the public review and approval
process concerning the HCP and the SYP, and the Company is working with the
relevant government agencies to defend these challenges. Although uncertainties
are inherent in the final outcome of the EPIC-SYP/Permits lawsuit and the USWA
lawsuit, the Company believes that the resolution of these matters should not
result in a material adverse effect on its financial condition, results of
operations or the ability to harvest timber.

      On or about February 23, 2001, the Company and Pacific Lumber received a
letter from the Environmental Protection Information Association of its 60-day
notice of intent to sue the Company and Pacific Lumber under the CWA. The letter
alleges a number of violations of the CWA by the Company and Pacific Lumber in
certain watersheds since 1990. If filed, the lawsuit will purportedly seek
declarative and injunction relief for past violations and to prevent future
violations, as well as civil penalties. Such civil penalties could be up to
$25,000 per day for each continuing violation. The Company does not know when or
if a lawsuit will be filed regarding this matter, or if a lawsuit is filed, the
ultimate impact of such lawsuit on its financial condition or results of
operations.

      While the Company expects environmentally focused objections and lawsuits
to continue, it believes that the HCP, the SYP and the Permits should enhance
its position in connection with these continuing challenges and, over time,
reduce or minimize such challenges.

4.    COMPREHENSIVE INCOME (LOSS) AND MEMBER DEFICIT

      Comprehensive income includes the following (in millions):

                                                                                          THREE MONTHS ENDED
                                                                                    MARCH 31, 2001   MARCH 31, 2000
                                                                                    ---------------  --------------
Net income (loss).................................................................. $         (4.6)  $         2.2
Other comprehensive income:
   Change in value of available-for-sale investments...............................            0.6               -
                                                                                    ---------------  --------------
Total comprehensive income (loss).................................................. $         (4.0)  $         2.2
                                                                                    ===============  ==============


      A reconciliation of the activity in member deficit is as follows (in
millions):

                                                                                           THREE MONTHS ENDED
                                                                                     MARCH 31, 2001  MARCH 31, 2000
                                                                                     --------------  --------------
Balance at beginning of period...................................................... $      (288.0)  $      (399.4)
Comprehensive income (loss).........................................................          (4.0)            2.2
Member distribution.................................................................         (73.1)              -
                                                                                     --------------  --------------
Balance at end of period............................................................ $      (365.1)  $      (397.2)
                                                                                     ==============  ==============



ITEM 2.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
              RESULTS OF OPERATIONS

      The following should be read in conjunction with the response to Part I,
Item 1 of this Report, Item 7. "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and Item 8. "Financial Statements
and Supplementary Data" of the Form 10-K. Any capitalized terms used but not
defined in this Item are defined in the "Glossary of Defined Terms" contained in
Appendix A.

      This Quarterly Report on Form 10-Q contains statements which constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements appear in a number of places in
this section and in Part II. Item 1. "Legal Proceedings." Such statements can be
identified by the use of forward- looking terminology such as "believes,"
"expects," "may," "estimates," "will," "should," "plans" or "anticipates" or the
negative thereof or other variations thereon or comparable terminology, or by
discussions of strategy. Readers are cautioned that any such forward-looking
statements are not guarantees of future performance and involve significant
risks and uncertainties, and that actual results may vary materially from the
forward-looking statements as a result of various factors. These factors include
the effectiveness of management's strategies and decisions, general economic and
business conditions, developments in technology, new or modified statutory or
regulatory requirements and changing prices and market conditions. This Form
10-Q and the Form 10-K identify other factors that could cause such differences
between such forward-looking statements and actual results. No assurance can be
given that these are all of the factors that could cause actual results to vary
materially from the forward-looking statements.

RESULTS OF OPERATIONS

      General
      Mbfe Concept. The Mbfe concept was used in structuring the Timber Notes in
order to take account of the relative values of the species and categories of
timber included in the Company Timber. Under the Mbfe concept, one thousand
board feet, net Scribner scale, of old growth redwood timber equates to one
Mbfe. One thousand board feet, net Scribner scale, of each other species and
category of timber included in the Company Timber was assigned a value in Mbfe
equal to a fraction of an Mbfe. This fraction was generally determined by
dividing the SBE Price applicable to such species and category for the first
half of 1998 by the SBE Price applicable to old growth redwood for the first
half of 1998. Historical harvest volumes reflected in this report are stated on
an Mbfe basis.

      Master Purchase Agreement Governing Log Sales to Pacific Lumber. The
Master Purchase Agreement generally contemplates that all sales of logs by the
Company to Pacific Lumber will be at the SBE Price. Harvest Value Schedules
setting forth the SBE Prices are published by the California State Board of
Equalization twice a year for the purpose of computing a yield tax imposed on
timber harvested between January 1 and June 30 and July 1 and December 31.
Harvest Value Schedules are based on twenty-four months of actual log and timber
sales that occur within nine specified timber value areas. These sales are arms
length transactions adjusted for time by indexing the prices (using log and
lumber price trends) to a specific date, which is approximately sixty days prior
to the effective date of the Harvest Value Schedules. However, SBE prices may
not necessarily be representative of actual prices that would be realized from
unrelated parties at subsequent dates.

      Seasonality. Logging operations on the Company's timberlands are highly
seasonal and have historically been significantly higher in the months of April
through November than in the months of December through March. Management
expects that the Company's revenues and cash flows will continue to be markedly
seasonal because of the harvesting, road use, wet weather and other restrictions
imposed by the HCP. As a result, a substantial majority of the future harvesting
on the Company's timberlands can be expected to be concentrated during the
period from June through October of each year. Some of these restrictions may be
modified under the adaptive management provision contained in the HCP, and as a
result of the watershed analysis process to be performed over the five-year
period beginning March 1, 1999. See Note 3 to the Condensed Financial
Statements.

      Log sales to Pacific Lumber
      Net sales from logs were $13.1 million and $20.3 million for the three
months ended March 31, 2001 and 2000, respectively. The decrease was largely due
to a reduction of log delivery volumes. The volume of log deliveries for such
periods was 12,700 Mbfe and 21,000 Mbfe, respectively. The decrease in volume
was predominantly due to a decrease in available-to-log THPs. Seasonal
harvesting restrictions imposed under the HCP reduced the number of
available-to-log THPs as compared to the prior year. See "--Trends" for further
discussion of the factors affecting the supply of approved THPs.

   Operating Income and Net Income (Loss)
   Operating income was $7.8 million and $14.4 million for the three months
ended March 31, 2001 and 2000, respectively. Net income (loss) was $(4.6)
million and $2.2 million for the three months ended March 31, 2001 and 2000,
respectively. The decrease in operating income is largely attributable to the
decrease in net sales discussed above but slightly offset by a decrease in
depletion resulting from the lower harvest. The Company had a net loss for the
three months ended March 31, 2001, as compared to net income for the comparable
prior year period as a result of the decrease in operating income discussed
previously. In addition, results for the three months ended March 31, 2000,
included a $2.2 million extraordinary item related to gains on repurchases of
Timber Notes.

FINANCIAL CONDITION AND INVESTING AND FINANCING ACTIVITIES

      This section contains statements which constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. See above for cautionary information with respect to such
forward-looking statements.

      The Line of Credit expires on July 15, 2001, but it is expected to be
renewed annually, subject to approval of the bank group. At March 31, 2001, the
Company could have borrowed a maximum of $61.1 million under the Line of Credit,
and there were no borrowings outstanding under the Line of Credit.

      On the January 22, 2001, note payment date for the Timber Notes, the
Company had $40.8 million set aside in the note payment account to pay the $31.0
million of interest due as well as $9.8 million of principal. The Company repaid
an additional $3.3 million of principal on the Timber Notes using funds held in
the SAR Account, resulting in a total principal payment of $13.1 million, an
amount equal to Scheduled Amortization. In addition, the Company made a
distribution in the amount of $73.1 million to its parent, Pacific Lumber, $63.9
million of which was made using funds from the December 2000 sale of the Owl
Creek grove and $9.2 million of which was made using excess funds released from
the SAR Account.

      With respect to short-term liquidity, the Company believes that it will
generate sufficient cash from operations to pay all of the interest and required
principal on the Timber Notes on the July 20, 2001 payment date; however, given
the uncertainties concerning the ability of the Company to obtain THP approvals,
restrictions on winter harvesting operations and other matters, there can be no
assurance that this will be the case. Any shortfall in funds available to pay
interest would be borrowed under the Line of Credit. The Company also expects
that all or a portion of the funds used to pay the Scheduled Amortization amount
will be provided from the SAR Account.

      Pacific Lumber's financial condition will affect its ability to purchase
logs from the Company and to meet its obligations under the Services Agreement.
Pacific Lumber's liquidity improved significantly as a result of the $73.1
million distribution paid January 22, 2001. Nevertheless, Pacific Lumber expects
that near-term cash flows from operations will be adversely affected by an
inadequate supply of logs and a related slowdown in lumber production. Pacific
Lumber may require funds available under Pacific Lumber's revolving credit
agreement, repayments by MGI of an intercompany loan and/or capital
contributions from MGI to enable it to meet its working capital and capital
expenditure requirements for 2001. With respect to long-term liquidity, although
Pacific Lumber expects that its existing cash and cash equivalents should
provide sufficient funds to meet its working capital and capital expenditure
requirements, until such time as Pacific Lumber has adequate cash flows from
operations and/or dividends from the Company, there can be no assurance that
this will be the case.

      With respect to long-term liquidity, the Company believes that its
existing cash, including cash available for principal payments from the SAR
Account, and funds available under the Line of Credit, together with its ability
to generate sufficient levels of cash flows from operations over the long term,
should provide sufficient funds to meet its long-term working capital, capital
expenditures and required debt service obligations. If the Company generates
excess funds after the payment of operating expenses, capital expenditures,
interest, premiums, required principal payments and replenishment of the SAR
Account, it may at its option either pay dividends, retain these funds for
internal purposes or make voluntary principal payments. Cash flows from
operations may continue to be adversely affected if the Company does not
experience improvements in the THP submission and approval process, or if
inclement weather conditions or seasonal operating restrictions under the HCP
hamper harvesting operations. Cash flows from operations would also be adversely
affected if additional judicial or regulatory restrictions are imposed on the
Company's harvesting activities, or if the Environmental Plans are not
implemented in accordance with the Company's expectations.


TRENDS

      This section contains statements which constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. See above for cautionary information with respect to such
forward-looking statements.

      Regulatory and environmental matters play a significant role in the
Company's operations. See Note 3 to the Condensed Financial Statements and Item
1. "Business--Regulatory and Environmental Factors" of the Form 10-K for a
discussion of these matters. Regulatory compliance and related litigation have
increased the cost of logging operations, and the Company has also been
adversely affected by a lack of available logs as a result of a severely
diminished supply of available THPs, resulting in delayed or reduced harvest and
lower net sales.

      Since the consummation of the Headwaters Agreement on March 1, 1999, there
has been a significant amount of work required in connection with the
implementation of the Environmental Plans. As a result of the implementation
process, 1999 and 2000 were transition years for the Company with respect to the
filing and approval of its THPs. The rate of approvals of THPs during the three
months ended March 31, 2001 continues to be below what the Company requires to
meet its targeted harvest levels under the SYP, principally because government
agencies have failed to approve THPs in a timely manner. Nevertheless, the
Company anticipates that once they are fully implemented, the Environmental
Plans will streamline the process of preparing THPs and potentially shorten the
time to obtain approval of THPs.

      There can be no assurance that the Company will not continue to experience
difficulties in receiving approvals of its THPs similar to those it has been
experiencing. Furthermore, there can be no assurance that certain pending legal,
regulatory and environmental matters or future governmental regulations,
legislation or judicial or administrative decisions, or adverse weather
conditions, would not have a material adverse effect on the Company's financial
position, results of operations or liquidity. See Note 3 to the Condensed
Financial Statements for further information regarding regulatory and legal
proceedings affecting the Company.


                           PART II. OTHER INFORMATION

ITEM 1.       LEGAL PROCEEDINGS

      Reference is made to Item 3 of the Form 10-K for information concerning
material legal proceedings with respect to the Company. No material developments
have occurred with respect to such legal proceedings subsequent to the filing of
the Form 10-K.


ITEM 6.       EXHIBITS AND REPORTS ON FORM 8-K

      A.   EXHIBITS:

           None

      B.      REPORTS ON FORM 8-K:

      On January 2, 2001, the Company filed a current report on Form 8-K (under
Item 9), dated December 29, 2000, related to the sale of approximately 1,200
acres of timberlands known as the Owl Creek grove.

      On January 23, 2001, the Company filed a current report on Form 8-K (under
Item 9), dated January 22, 2001, related to the filing of two certificates in
respect of the Company's Timber Notes.

      On February 21, 2001, the Company filed a current report on Form 8-K
(under Item 9), dated February 20, 2001, related to a filing of a certificate in
respect of the Company's Timber Notes.

      On March 23, 2001, the Company filed a current report on Form 8-KA (under
Item 9), dated March 21, 2001, related to the filing of a certificate in respect
of the Company's Timber Notes.

      On April 23, 2001, the Company filed a current report on Form 8-K (under
Item 9), dated April 20, 2001, related to the filing of a certificate in respect
of the Company's Timber Notes.


                                    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, who has signed this report on behalf of
the Registrant and as the principal financial and accounting officer of the
Registrant.



                                                    SCOTIA PACIFIC COMPANY LLC



Date: May 11, 2001                 By:                   /S/ GARY L. CLARK
                                       ------------------------------------------------------
                                                            Gary L. Clark
                                             Vice President - Finance and Administration
                                            (Principal Financial and Accounting Officer)



                                                                     APPENDIX A


                            GLOSSARY OF DEFINED TERMS


CDF:  California Department of Forestry and Fire Protection

CESA:  California Endangered Species Act

Company: Scotia Pacific Company LLC, a limited liability company wholly
owned by Pacific Lumber

Company Timber: The timber located on the Company's timberlands which is
not subject to harvesting rights by Pacific Lumber

CWA: Federal Clean Water Act

Environmental Plans:  The HCP and the SYP

EPA:  Environmental Protection Agency

EPIC - SYP/Permits lawsuit: An action entitled Environmental Protection
Information Association, Sierra Club v.California Department of Forestry and
Fire Protection, California Department of Fish and Game, The Pacific Lumber
Company, Salmon Creek Corporation, et al. (No. 99CS00639) filed March 31, 1999
in the Superior Court of Sacramento County

Equity Fund Partnership: A partnership investing in equity securities in
which the Company holds a limited partnership interest

ESA:  The federal Endangered Species Act

Forest Practice Act:  The California Forest Practice Act

Form 10-K: The Company's Annual Report on Form 10-K filed with the Securities
and Exchange Commission for the fiscal year ended December 31, 2000

Harvest Value Schedule: A schedule setting forth the SBE Prices published
bi-annually by the California Board of Equalization applicable to the timber
sold during the period covered by the schedule for purposes of computing timber
yield taxes

HCP: The habitat conservation plan covering multiple species approved on
March 1, 1999, in connection with the consummation of the Headwaters Agreement

Headwaters Agreement: The September 28, 1996, agreement between Pacific Lumber,
Scotia LLC, Salmon Creek, the United States and California which provided the
framework for the acquisition by the United States and California of the
Headwaters Timberlands

Headwaters Timberlands: Approximately 5,600 acres of Pacific Lumber timberlands
consisting of two forest groves commonly referred to as the Headwaters Forest
and the Elk Head Springs Forest which were sold to the United States and
California on March 1, 1999

Indenture:  The indenture governing the Timber Notes

Line of Credit: The agreement between a group of lenders and the Company
pursuant to which the Company may borrow in order to pay up to one year's
interest on the Timber Notes

Master Purchase Agreement: The agreement entered into between Pacific
Lumber and the Company that governs all purchases of logs by Pacific Lumber from
the Company

MAXXAM:  MAXXAM Inc.

Mbfe: A concept developed for use in structuring the Timber Notes; under
this concept one thousand board feet, net Scribner scale, of residual old growth
redwood timber equates to one Mbfe

MGHI:  MAXXAM Group Holdings Inc., a wholly owned subsidiary of MAXXAM

MGI:  MAXXAM Group Inc., a wholly owned subsidiary of MGHI

Pacific Lumber:  The Pacific Lumber Company, a wholly owned subsidiary of MGI

Permits: The incidental take permits issued by the United States and
California pursuant to the HCP

Prefunding Account: Restricted cash held in an account by the trustee under
the Indenture to enable the Company to acquire timberlands

Salmon Creek:  Salmon Creek LLC, a wholly owned subsidiary of Pacific Lumber

SAR Account: Funds held in a reserve account to support principal payments
on the Timber Notes

SBE Price: The applicable stumpage price for a particular species and category
of log, as set forth in the most recent Harvest Value Schedule published by the
California State Board of Equalization at six month intervals for the purpose of
computing yield taxes imposed on the harvesting of timber

Scheduled Amortization: The amount of principal which the Company must pay
through each Timber Note payment date in order to avoid prepayment or deficiency
premiums

Services Agreement: An agreement whereby Pacific Lumber is to provide
operational, management and related services with respect to the Company's
timberlands and for which Pacific Lumber is paid a fee

SYP: The sustained yield plan approved on March 1, 1999, in connection with
the consummation of the Headwaters Agreement

THP: Timber harvesting plan required to be filed with and approved by the
CDF prior to the harvesting of timber

Timber Notes: The Company's $867.2 million original aggregate principal amount
of 6.55% Series B Class A-1 Timber Collateralized Notes, 7.11% Series B Class
A-2 Timber Collateralized Notes and 7.71% Series B Class A-3 Timber
Collateralized Notes due July 20, 2028

TMDLs:  Total maximum daily load limits

USWA lawsuit: An action entitled United Steelworkers of America, AFL-CIO, CLC,
and Donald Kegley v. California Department of Forestry and Fire Protection, The
Pacific Lumber Company, Scotia Pacific Company LLC and Salmon Creek Corporation
(No. 99CS00626) filed on March 31, 1999 in the Superior Court of Sacramento
County

Wrigley lawsuit: An action entitled Kristi Wrigley, et al. v. Charles
Hurwitz, John Campbell, Pacific Lumber, MAXXAM Group Holdings Inc., Scotia
Pacific Holding Company, MAXXAM Group Inc., MAXXAM Inc., Scotia Pacific Company
LLC and Federated Development Company (No. 9700399) filed December 2, 1997 in
the Superior Court of Humboldt County`