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


                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

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

                                       OR

              [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                        For the transition period from to

For the Quarterly Period                                        Commission File
Ended September 30, 1998                                       Number 001-05083

                              KANEB SERVICES, INC.
             (Exact name of registrant as specified in its charter)

           DELAWARE                                              74-1191271
(State or other jurisdiction of                               (I.R.S. Employer
 Incorporation or Organization)                           Identification Number)

                          2435 North Central Expressway
                             Richardson, Texas 75080
          (Address of principal executive offices, including zip code)

                                 (972) 699-4000
              (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

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

Class of Common Stock                           Outstanding at November 13, 1998
    no par value                                            31,413,729 shares

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

<PAGE>
KANEB SERVICES, INC. AND SUBSIDIARIES

FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 1998
--------------------------------------------------------------------------------




                                                                        Page No.
                   Part I. Financial Information

Item 1.   Financial Statements (Unaudited)

          Consolidated Statements of Income - Three and Nine Months
             Ended September 30, 1998 and 1997                              1

          Condensed Consolidated Balance Sheets - September 30, 1998
             and December 31, 1997                                          2

          Condensed Consolidated Statements of Cash Flows - Nine
             Months Ended September 30, 1998 and 1997                       3

          Notes to Consolidated Financial Statements                        4

Item 2.   Management's Discussion and Analysis of
             Financial Condition and Results of Operations                  7

                   Part II. Other Information

Item 6.   Exhibits and Reports on Form 8-K                                 11

Signature                                                                  11




<PAGE>
KANEB SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
(In Thousands - Except Per Share Amounts)
(Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                Three Months Ended         Nine Months Ended
                                                   September 30,              September 30,
                                              ----------------------    ----------------------
                                                 1998         1997          1998        1997
                                              ---------    ---------    ---------    ---------
<S>                                           <C>          <C>          <C>          <C> 
Revenues ..................................   $ 105,476    $  62,074    $ 265,469    $ 173,616
                                              ---------    ---------    ---------    ---------
Costs and expenses:
     Operating costs ......................      81,911       41,054      203,641      115,111
     Depreciation and amortization ........       4,192        4,041       12,441       12,430
     General and administrative ...........       1,466        1,284        3,892        3,691
                                              ---------    ---------    ---------    ---------
         Total costs and expenses .........      87,569       46,379      219,974      131,232
                                              ---------    ---------    ---------    ---------
Operating income ..........................      17,907       15,695       45,495       42,384

Other income (expense), net ...............          30           79           55          (16)
Interest expense ..........................      (3,918)      (3,967)     (11,554)     (11,657)
Amortization of excess of cost over fair
   value of net assets of acquired business        (500)        (482)      (1,470)      (1,405)
                                              ---------    ---------    ---------    ---------
Income before interest of outside non-
   controlling partners in KPP's net
   income and income tax expense ..........      13,519       11,325       32,526       29,306
Interest of outside non-controlling
   partners in KPP's net income ...........      (8,101)      (7,370)     (20,918)     (20,114)
Income tax expense ........................        (984)        (679)      (1,973)      (1,680)
                                              ---------    ---------    ---------    ---------

Net income ................................       4,434        3,276        9,635        7,512
Dividends applicable to preferred stock ...         131          126          439          378
                                              ---------    ---------    ---------    ---------

Net income applicable to common stock .....   $   4,303    $   3,150    $   9,196    $   7,134
                                              =========    =========    =========    =========
Earnings per common share:
   Basic ..................................   $     .14    $     .10    $     .29    $     .22
                                              =========    =========    =========    =========
   Diluted ................................   $     .13    $     .10    $     .28    $     .21
                                              =========    =========    =========    =========
</TABLE>





<PAGE>
KANEB SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
--------------------------------------------------------------------------------
                                                      September 30, December 31,
                                                          1998          1997
                                                      ------------- ------------
       ASSETS                                          (Unaudited)
Current assets:
   Cash and cash equivalents ..........................  $  18,244    $  23,025
   Accounts receivable, trade .........................     51,285       35,268
   Inventories ........................................     10,631        7,079
   Prepaid expenses and other current assets ..........      7,658        5,693
                                                         ---------    ---------
     Total current assets .............................     87,818       71,065
                                                         ---------    ---------

Property and equipment ................................    407,355      383,078
Less accumulated depreciation and amortization ........    131,627      121,717
                                                         ---------    ---------
     Net property and equipment .......................    275,728      261,361
                                                         ---------    ---------

Excess of cost over fair value of net assets
 of acquired business .................................     63,001       62,719

Other assets ..........................................      8,446        7,128
                                                         ---------    ---------
                                                         $ 434,993    $ 402,273
                                                         =========    =========
       LIABILITIES AND EQUITY

Current liabilities:
   Current portion of long-term debt ..................  $  12,113    $   5,394
   Accounts payable ...................................     16,996        9,569
   Accrued expenses ...................................     43,538       35,679
                                                         ---------    ---------
     Total current liabilities ........................     72,647       50,642
                                                         ---------    ---------

Long-term debt, less current portion:
   Industrial field services ..........................     22,711       25,268
   Pipeline, terminaling and product marketing services    139,300      132,118
   Parent company .....................................     23,666       23,666
                                                         ---------    ---------
     Total long-term debt, less current portion .......    185,677      181,052
                                                         ---------    ---------

Deferred income taxes and other liabilities ...........     17,087       15,903

Interest of outside non-controlling partners in KPP ...     75,765       76,229

Commitments and contingencies

Stockholders' equity:
   Preferred stock, without par value .................      5,792        5,792
   Common stock, without par value ....................      4,239        4,234
   Additional paid-in-capital .........................    197,268      197,242
   Accumulated deficit ................................    (92,295)    (101,491)
   Unamortized restricted stock compensation ..........       (141)        --
   Treasury stock, at cost ............................    (29,709)     (25,216)
   Accumulated other comprehensive income (loss)
     - foreign currency translation adjustment ........     (1,337)      (2,114)
                                                         ---------    ---------
       Total stockholders' equity .....................     83,817       78,447
                                                         ---------    ---------
                                                         $ 434,993    $ 402,273
                                                         =========    =========


<PAGE>
KANEB SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
--------------------------------------------------------------------------------
                                                             Nine Months Ended
                                                               September 30,
                                                           ---------------------
                                                              1998        1997
                                                           --------    ---------
Operating activities:
   Net income .............................................$  9,635    $  7,512
   Adjustments to reconcile net income to net
     cash provided by operating activities:
        Depreciation and amortization .....................  12,441      12,430
        Interest of outside non-controlling partners in KPP  20,918      20,114
        Amortization of excess of cost over fair
          value of net assets acquired ....................   1,470       1,405
        Deferred income taxes .............................     491         552
        Changes in working capital components .............  (5,652)        296
                                                           --------    --------

         Net cash provided by operating activities ........  39,303      42,309
                                                           --------    --------

Investing activities:
   Capital expenditures ................................... (10,207)     (9,261)
   Acquisitions of terminals and product
     marketing services ................................... (16,174)       --
   Other, net .............................................  (2,623)     (6,126)
                                                           --------    --------
         Net cash used in investing activities ............ (29,004)    (15,387)
                                                           --------    --------

Financing activities:
   Issuance of long-term debt .............................  21,547       7,831
   Payments on long-term debt ............................. (10,203)     (5,744)
   Preferred stock dividends paid .........................    (439)       (378)
   Distributions to outside non-controlling partners in KPP (21,382)    (20,284)
   Common stock issued ....................................     133          55
   Purchase of treasury stock .............................  (4,736)     (4,612)
                                                           --------    --------

         Net cash used in financing activities ............ (15,080)    (23,132)
                                                           --------    --------

Increase (decrease) in cash and cash equivalents ..........  (4,781)      3,790
Cash and cash equivalents at beginning of period ..........  23,025      23,693
                                                           --------    --------

Cash and cash equivalents at end of period ................$ 18,244    $ 27,483
                                                           ========    ========




<PAGE>
KANEB SERVICES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements
(Unaudited)
--------------------------------------------------------------------------------

1.   SIGNIFICANT ACCOUNTING POLICIES

     The unaudited consolidated financial statements of Kaneb Services, Inc. and
     its subsidiaries (the "Company") for the three and nine month periods ended
     September  30,  1998 and  1997,  have  been  prepared  in  accordance  with
     generally  accepted  accounting  principles  applied on a consistent basis.
     Significant   accounting   policies   followed   by  the  Company  and  its
     subsidiaries  were  disclosed  in the notes to the  consolidated  financial
     statements  included in the  Company's  Annual  Report on Form 10-K for the
     year ended  December 31, 1997. In the opinion of the Company's  management,
     the accompanying consolidated financial statements contain the adjustments,
     consisting of normal  recurring  accruals,  necessary to present fairly the
     consolidated  financial  position  of  the  Company  and  its  consolidated
     subsidiaries  at September 30, 1998 and the  consolidated  results of their
     operations  and cash flows for the  periods  ended  September  30, 1998 and
     1997.  Operating  results for the three and nine months ended September 30,
     1998 are not necessarily indicative of the results that may be expected for
     the year ending December 31, 1998.

2.   COMPREHENSIVE INCOME

     The Company has adopted the provisions of Statement of Financial Accounting
     Standards No. 130,  "Reporting  Comprehensive  Income,"  which  establishes
     standards  for the reporting  and display of  comprehensive  income and its
     components in a full set of general purpose financial statements.

     Comprehensive income for the three and nine months ended September 30, 1998
     and 1997 is as follows:

                                         Three Months Ended   Nine Months Ended
                                            September 30,        September 30,
                                         -----------------    -----------------
                                           1998      1997       1998      1997
                                         -------    ------    -------   -------
                                                      (in thousands)

     Net income                          $ 4,434   $ 3,276    $ 9,635   $ 7,512
     Other comprehensive income - foreign
        currency translation adjustment      750      (789)       777    (2,857)
                                         -------   -------    -------   -------

     Comprehensive income                $ 5,184   $ 2,487    $10,412   $ 4,655
                                         =======   =======    =======   =======


3.   EARNINGS PER SHARE

     The following is a  reconciliation  of Basic and Diluted earnings per share
     (in thousands, except for per share amounts):
                                                        Net    Common  Per-Share
                                                      Income   Shares    Amount
                                                     -------   ------  ---------
       Three Months Ended September 30, 1998
       -------------------------------------
           Net income                                $ 4,434
           Dividends applicable to preferred stock      (131)
                                                     -------

           Basic earnings per share:
              Income available to common stock         4,303   31,443  $    .14
                                                                       ========

           Effect of dilutive securities:
              Common stock options                      -         841
                                                     -------  -------
           Diluted earnings per share:
              Income available to common stock
              and assumed options exercised          $ 4,303   32,284  $    .13
                                                     =======  =======  ========

       Three Months Ended September 30, 1997
       -------------------------------------
           Net income                                $ 3,276
           Dividends applicable to preferred stock      (126)
                                                     -------

           Basic earnings per share:
              Income available to common stock         3,150   32,301  $    .10
                                                                       ========

           Effect of dilutive securities:
              Common stock options                      -         620
                                                     -------  -------
           Diluted earnings per share:
              Income available to common stock
              and assumed options exercised          $ 3,150   32,921  $    .10
                                                     =======  =======  ========

       Nine Months Ended September 30, 1998
       ------------------------------------
           Net income                                $ 9,635
           Dividends applicable to preferred stock      (439)
                                                     -------

           Basic earnings per share:
              Income available to common stock         9,196   31,856  $    .29
                                                                       ========

           Effect of dilutive securities:
              Common stock options                      -         904
                                                     -------  -------
           Diluted earnings per share:
              Income available to common stock
              and assumed options exercised          $ 9,196   32,760  $    .28
                                                     =======  =======  ========

       Nine Months Ended September 30, 1997
       ------------------------------------
           Net income                                $ 7,512
           Dividends applicable to preferred stock      (378)
                                                     -------

           Basic earnings per share:
              Income available to common stock         7,134   32,676  $    .22
                                                                       ========

           Effect of dilutive securities:
              Common stock options                      -         520
                                                     -------  -------
           Diluted earnings per share:
              Income available to common stock
              and assumed options exercised          $ 7,134   33,196  $    .21
                                                     =======  =======  ========




<PAGE>
KANEB SERVICES, INC. AND SUBSIDIARIES

Management's Discussion and Analysis of Financial Condition
and Results of Operations
--------------------------------------------------------------------------------

     This  discussion  should  be  read in  conjunction  with  the  consolidated
     financial  statements of Kaneb  Services,  Inc. (the  "Company")  and notes
     thereto included elsewhere in this report.

     Operating Results:

     Industrial Field Services

                                     Three Months Ended      Nine Months Ended
                                        September 30,           September 30,
                                   --------------------    --------------------
                                      1998        1997        1998        1997
                                   --------    --------    --------    --------
                                                  (in thousands)
     Revenues:
        United States              $  9,070    $  8,721    $ 26,910    $ 25,335
        Europe                       16,338      16,655      50,139      47,944
        Asia-Pacific                  2,896       3,209       8,253       4,736
                                   --------    --------    --------    --------
        Total Revenues             $ 28,304    $ 28,585    $ 85,302    $ 78,015
                                   ========    ========    ========    ========

     Operating income:
        United States              $    775    $    335    $  1,584    $  1,274
        Europe                        1,551       1,612       3,956       3,986
        Asia-Pacific                    442         618         815         628
        Headquarters                   (467)       (162)       (846)       (606)
                                   --------    --------    --------    --------
        Total operating income     $  2,301    $  2,403    $  5,509    $  5,282
                                   ========    ========    ========    ========

     Capital expenditures,
        excluding acquisitions     $    602    $    511    $  1,950    $  1,744
                                   ========    ========    ========    ========

     This business  segment  provides  specialized  industrial  field  services,
     including under-pressure leak sealing, on-site machining, safety and relief
     valve testing and repair,  passive fire  protection and fugitive  emissions
     inspections to the process and power industry worldwide.

     For the three months ended September 30, 1998,  revenues for the Industrial
     Field Services segment decreased  slightly,  when compared to the same 1997
     period,  due primarily to the overall  weakening of economic  conditions in
     Asia-Pacific  and Europe markets,  partially  offset by modest gains in the
     United States. In the United States, revenues increased 4%, compared to the
     same period in 1997, due primarily to improvements in on-site machining and
     leak sealing services.  Asia-Pacific revenues decreased by 10% in the third
     quarter of 1998,  compared to 1997,  due  primarily  to declines in on-site
     machining services in Australia.  In Europe,  revenues decreased by 2%, due
     to lower other process plant services in the United Kingdom and in Germany.

     For the nine months ended  September 30, 1998,  Industrial  Field  Services
     revenues  increased  by 9%,  compared  to the same  period in 1997,  due to
     overall improvements in each of the three geographical areas. In the United
     States,  revenues  increased 6% due  primarily to  improvements  in on-site
     machining and leak sealing services.  In Europe,  revenues  increased by 5%
     due  primarily to increases  in passive  fire  protection  and leak sealing
     services.  The increase in Asia-Pacific revenues is primarily  attributable
     to the operations of Australia acquired effective July 1, 1997.

     Overall,  Industrial  Field  Services  operating  income  decreased by $0.1
     million for the quarter  ended  September  30,  1998,  compared to the same
     prior year period,  due to decreases  in revenues and  operating  income in
     Asia-Pacific  and  Europe,  a result of the overall  weakening  of economic
     conditions in these regions.  For the nine months ended September 30, 1998,
     operating  income  increased  by $0.2  million,  compared  to 1997,  due to
     overall increases in revenues and operating income in the United States and
     in  Asia-Pacific  primarily  attributable  to the  operations  of Australia
     acquired effective July 1, 1997.


     Pipeline, Terminaling and Product Marketing Services

                                     Three Months Ended      Nine Months Ended
                                        September 30,           September 30,
                                   --------------------    --------------------
                                      1998        1997        1998        1997
                                   --------    --------    --------    --------
                                                  (in thousands)
     Revenues:
        Pipeline and terminaling   $ 33,709    $ 31,465    $ 92,332    $ 89,837
        Product marketing            36,027       --         75,653       --
                                   --------    --------    --------    --------
                                   $ 69,736    $ 31,465    $167,985    $ 89,837
                                   ========    ========    ========    ========

        Operating income           $ 15,896    $ 13,862    $ 41,022    $ 38,669
                                   ========    ========    ========    ========
        Capital expenditures,
           excluding acquisitions  $  2,274    $  1,919    $  8,048    $  7,162
                                   ========    ========    ========    ========

     This business  segment includes the operations of Kaneb Pipe Line Partners,
     L.P.  ("KPP")  and the  Company's  petroleum  products  marketing  business
     acquired  in late March  1998.  KPP  provides  transportation  services  of
     refined  petroleum  products through a pipeline system that extends through
     the Midwest and Eastern Rocky Mountain areas and provides  terminaling  and
     storage  services for  petroleum  products  and  specialty  chemicals.  The
     Company  operates,  manages  and  controls  the  pipeline  and  terminaling
     operations of KPP through its 2% general partner interest and a 31% limited
     partner  interest in the  partnership.  The  petroleum  products  marketing
     business provides motor fuel wholesale  marketing  services  throughout the
     Midwest and Rocky Mountain regions, as well as California.

     For the three months ended  September  30, 1998,  revenues for the Pipeline
     and Terminaling business increased by $2.2 million, or 7%, when compared to
     1997,  due to a $1.1  million  increase in revenues in each of the pipeline
     and terminaling  businesses.  For the nine months ended September 30, 1998,
     pipeline and terminaling  revenues increased by $2.5 million, or 3%, due to
     a $1.7 million increase in pipeline revenues and a $0.8 million increase in
     terminaling  revenues.  The increase in pipeline revenues for the three and
     nine  months  ended  September  30,  1998 is due to  increases  in  volumes
     shipped,  when  compared  to the same  periods  in 1997.  The  increase  in
     terminaling revenues for the three and nine months ended September 30, 1998
     is due to an increase in tank  utilization  resulting from favorable market
     conditions.

     The $2.0  million  increase  in  operating  income  for the  quarter  ended
     September  30, 1998,  compared to 1997,  is due primarily to a $0.8 million
     increase  in  pipeline   operating  income,  a  $0.9  million  increase  in
     terminaling  operating income and $0.2 million from the petroleum  products
     marketing  business  acquired  in March  1998.  For the nine  months  ended
     September 30, 1998, operating income increased by $2.4 million, compared to
     1997,  due  primarily  to a $1.4  million  increase in  pipeline  operating
     income,  a $0.2 million  increase in terminaling  operating income and $0.6
     million from the petroleum products marketing business.

     Capital  expenditures  of $2.3  million and $8.0  million for the three and
     nine  months  ended  September  30,  1998,  respectively,   relate  to  the
     maintenance of existing operations.

     Other Operations

     The Company  recorded  revenues of $7.4  million and $12.2  million for the
     three and nine months ended September 30, 1998,  respectively,  compared to
     $2.0 and $5.8  million for the three and nine months  ended  September  30,
     1997, related to subsidiaries that provide information processing,  payment
     and  collection  services  primarily  to  financial  institutions.  Related
     operating income for the three and nine months ended September 30, 1998 was
     $1.2 million and $2.9 million,  respectively,  compared to $0.8 million and
     $2.2 million for the three and nine months ended September 30, 1997

     Liquidity and Capital Resources 

     During  the  first  nine  months of 1998,  the  Company's  working  capital
     requirements   for   operations   and   capital   expenditures   (excluding
     acquisitions) were funded through the use of internally generated funds.

     Cash  provided by  operations  was $39.3  million and $42.3 million for the
     nine  months  ended  September  30,  1998 and 1997,  respectively.  Capital
     expenditures  (excluding  acquisitions)  were  $10.2  million  for the nine
     months ended September 30, 1998,  compared to $9.3 million in 1997. Capital
     expenditures  in 1998 are  expected  to be funded by  internally  generated
     funds.

     Additional information related to the sources and uses of cash is presented
     in the financial statements included in this report.

     Year 2000 Issue

     Although the Company  believes that most of its  activities  and operations
     are not  materially  impacted  by Year 2000  Issues  ("Y2K"),  the  Company
     recognizes the challenges  associated  with Y2K and has undertaken a review
     and  testing  of  its  computer  systems  to  identify  Y2K-related  issues
     associated  with any items of  software or  hardware  used in its  business
     operations.  Most of the software  systems used by the Company are licensed
     from  third  parties  and are Y2K  compliant  or  will be  upgraded  to Y2K
     compliant releases over the next year. This issue is being addressed by the
     Company in multiple phases, including assessment,  remediation, testing and
     implementation,  and progress is being  monitored by the  Company's  senior
     management.   All  material  systems,  on  a  world-wide  basis,  including
     non-information technology systems which may house non-compliant,  imbedded
     technology, such as office machines, are being evaluated.

     In addition to addressing  the Company's own systems,  as described  above,
     the  Company  must  assess the state of  readiness  of the systems of other
     entities  with which it does  business.  Failure by these third  parties to
     adequately  resolve their Y2K problems could have a material adverse effect
     on the Company's operations.

     The  Company  believes  its  success  in being  Y2K  compliant  will not be
     conclusively  known  until  the year  2000 is  actually  reached.  Although
     failure by one or more of the  Company's  own systems  could result in lost
     revenues and/or additional expenses required to carry out manual processing
     of transactions, the Company cannot predict the effect that external forces
     could  have  on  its  business.  Failures  by  banking  institutions,   the
     telecommunications  industry and others could have far-reaching  effects on
     the Company and the entire economy.

     The  Company  expects  to  complete  its Y2K  program  in a timely  manner.
     However,  the Company  believes  that it is not possible to determine  with
     certainty that all Y2K problems  affecting the Company have been identified
     or  corrected.  The  number  of  devices  that  could be  affected  and the
     interactions among these devices are simply too numerous. In addition,  the
     Company  cannot  accurately  predict how many  failures  related to the Y2K
     problem will occur or the severity,  duration or financial  consequences of
     such  failures.  The Company is in the process of evaluating  and hiring an
     outside  Y2K  consultant  to assist the Company in meeting its goals and in
     developing  contingency plans to define and address the worst-case scenario
     likely to be faced by the  Company.  The plan is expected to be in place in
     by the end of the first quarter of 1999.

     Expenses  incurred by the Company during 1997, and the first three quarters
     of 1998,  related to  assessing,  remediating  and testing its  information
     technology systems, which was not material,  have been expensed as incurred
     and funded from  operations.  The Company does not anticipate that the cost
     to become fully Y2K compliant will be material.

     This  entire   section  is  hereby   designated  a  "Year  2000   Readiness
     Disclosure",  as  defined  in  the  Year  2000  Information  and  Readiness
     Disclosure Act.



<PAGE>

                           PART II - Other Information

     Item 6.      Exhibits and Reports on Form 8-K

          (a)     Exhibits.

                      27.            Financial Data Schedule


         (b)       Reports on Form 8-K

                      Registrant's  Current Report on Form 8-K, dated August 14,
                      1998, (SEC File No.  001-05083).

                      Registrant's Current Report on Form 8-K, dated November 6,
                      1998, (SEC File No.  001-05083).



                                    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.



                                             KANEB SERVICES, INC.
                                             (Registrant)


Date:  November 16, 1998                               //s//
                                             ---------------------------
                                             Michael R. Bakke
                                             Controller