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


                                  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, 2002

                        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, 2002 and December 31, 2001
              Statement of Income for the three months ended March 31, 2002
                and 2001
              Statement of Cash Flows for the three months ended March 31, 2002
                and 2001
              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,
                                                                                            2002          2001
                                                                                        ------------- -------------
                                                                                                (UNAUDITED)

ASSETS
Current assets:
   Cash, cash equivalents, and restricted cash......................................... $        8.0  $       37.8
   Marketable securities, restricted...................................................         17.7          17.1
   Receivables from Pacific Lumber.....................................................          6.1           3.8
   Prepaid timber harvesting costs.....................................................          8.0           7.9
   Other current assets................................................................          0.2           0.6
                                                                                        ------------- -------------
      Total current assets.............................................................         40.0          67.2
Timber and timberlands, net of accumulated depletion of $264.4 and
   $261.6, respectively................................................................        246.1         247.9
Property and equipment, net of accumulated depreciation of $13.5 and
    $13.0, respectively................................................................         21.2          20.9
Deferred financing costs, net..........................................................         16.1          16.4
Restricted cash, marketable securities and other investments...........................         54.6          87.6
Other assets...........................................................................          6.3           6.5
                                                                                        ------------- -------------
                                                                                        $      384.3  $      446.5
                                                                                        ============= =============

LIABILITIES AND MEMBER DEFICIT
Current liabilities:
   Due to Pacific Lumber............................................................... $        0.9  $        1.0
   Accrued interest....................................................................         11.0          25.4
   Other accrued liabilities...........................................................          2.5           3.0
   Current maturities of long-term debt, excluding $2.4 and $2.3, respectively, of
      repurchased Timber Notes held in the SAR Account.................................         15.4          14.9
                                                                                        ------------- -------------
      Total current liabilities........................................................         29.8          44.3
Long-term debt, less current maturities and excluding $53.5 and $55.4, respectively,
      of repurchased Timber Notes held in the SAR Account..............................        742.3         754.5
                                                                                        ------------- -------------
      Total liabilities................................................................        772.1         798.8
                                                                                        ------------- -------------

Contingencies (See Note 3)

Member deficit.........................................................................       (387.8)       (352.3)
                                                                                        ------------- -------------
                                                                                        $      384.3  $      446.5
                                                                                        ============= =============



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




                           SCOTIA PACIFIC COMPANY LLC

                               STATEMENT OF INCOME
                            (IN MILLIONS OF DOLLARS)



                                                                                              THREE MONTHS ENDED
                                                                                                  MARCH 31,
                                                                                            -----------------------
                                                                                               2002        2001
                                                                                            ----------  -----------
                                                                                                  (UNAUDITED)


Log sales to Pacific Lumber...............................................................  $    15.9   $     13.1
                                                                                            ----------  -----------

Operating expenses:
   General and administrative.............................................................        4.5          3.6
   Depletion, depreciation and amortization...............................................        3.4          1.7
                                                                                            ----------  -----------
                                                                                                  7.9          5.3
                                                                                            ----------  -----------

Operating income..........................................................................        8.0          7.8

Other income (expense):
   Interest and other income..............................................................        1.4          2.4
   Interest expense.......................................................................      (14.5)       (14.8)
                                                                                            ----------  -----------
                                                                                                (13.1)       (12.4)
                                                                                            ----------  -----------

Net loss..................................................................................  $    (5.1)  $     (4.6)
                                                                                            ==========  ===========


   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,
                                                                                             ----------------------
                                                                                                2002       2001
                                                                                             ---------- -----------
                                                                                                   (UNAUDITED)

CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss................................................................................  $    (5.1) $     (4.6)
   Adjustments to reconcile net loss to net cash used for operating activities:
      Depletion, depreciation and amortization.............................................        3.4         1.7
      Amortization of deferred financing costs.............................................        0.3         0.3
      Increase (decrease) in cash resulting from changes in:
        Receivables from Pacific Lumber....................................................       (2.3)        6.3
        Prepaid timber harvesting costs....................................................       (0.1)       (0.8)
        Due to Pacific Lumber..............................................................       (0.3)        0.1
        Accrued interest...................................................................      (14.4)      (15.1)
        Other accrued liabilities..........................................................       (0.5)       (1.8)
        Other..............................................................................        0.3         0.2
                                                                                             ---------- -----------
        Net cash used for operating activities.............................................      (18.7)      (13.7)
                                                                                             ---------- -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Capital expenditures....................................................................       (1.3)       (0.7)
                                                                                             ---------- -----------
        Net cash used for investing activities.............................................       (1.3)       (0.7)
                                                                                             ---------- -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Principal payments on Timber Notes and other timber related debt........................      (11.6)      (11.4)
   Other changes in restricted cash........................................................       31.2         9.9
   Member distributions....................................................................      (29.4)      (73.1)
                                                                                             ---------- -----------
        Net cash used for financing activities.............................................       (9.8)      (74.6)
                                                                                             ---------- -----------

NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH.................................      (29.8)      (89.0)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD..........................       37.8        98.1
                                                                                             ---------- -----------
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD................................  $     8.0  $      9.1
                                                                                             ========== ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
   Interest paid...........................................................................  $    28.5  $     29.5


   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 for a fair presentation of the financial position of
the Company at March 31, 2002, and the results of operations and cash flows for
the three months ended March 31, 2002 and 2001. 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.

      NEW ACCOUNTING STANDARDS

      In June 2001, the FASB issued SFAS No. 143, which addresses accounting and
reporting standards for obligations associated with the retirement of tangible
long-lived assets and the related asset retirement costs. The Company is
required to adopt SFAS no. 143 beginning on January 1, 2003. In general, SFAS
No. 143 requires the recognition of a liability resulting from anticipated asset
retirement obligations, offset by an increase in the value of the associated
productive asset for such anticipated costs. Over the life of the asset,
depreciation applies to all legal obligations associated with the retirement of
a tangible long-lived asset that results from the acquisition, construction, or
development and (or) the normal operation of a long-lived asset, except for
certain lease obligations. Excluded from this statement are obligations arising
solely from a plan to dispose of a long-lived asset and obligations that result
from the improper operation of an asset (i.e. certain types of environmental
obligations). The Company is continuing its evaluation of SFAS No. 143. However,
the Company does not currently expect the adoption of SFAS No. 143 to have a
material impact on its future financial statements.

      In April 2002, the FASB issued SFAS No. 145, which rescinds the previous
guidance for debt extinguishments. This statement also amends other existing
authoritative pronouncements to make various technical corrections, clarify
meanings, or describe applicability under changed conditions. SFAS No. 145
eliminates the requirement that gains and losses from extinguishment of debt be
aggregated and, if material, classified as an extraordinary item, net of related
income tax effect. However, transactions would not be prohibited from
extraordinary item classification if they meet the criteria in APB Opinion 30,
"Reporting the Results of Operations - Reporting the Effects of Disposal of a
Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring
Events and Transactions." Applying the provisions of APB 30 will distinguish
transactions that are part of an entity's recurring operations from those that
are unusual or infrequent or that meet the criteria for classification as an
extraordinary item. This statement is effective for fiscal years beginning after
May 15, 2002. The Company does not expect the adoption of SFAS No. 145 to have a
material impact on its financial statements.

2.    CASH, MARKETABLE SECURITIES AND OTHER INVESTMENTS

      Restricted Cash, Marketable Securities and Other Investments
      Cash, marketable securities and other investments include the following
amounts which are restricted under the terms of the Company's debt agreements
(in millions):

                                                                                          March 31,    DECEMBER 31,
                                                                                            2002           2001
                                                                                        -------------  ------------
Current assets:
   Cash and cash equivalents, restricted..............................................  $        6.0   $      35.3
   Marketable securities, restricted:
      Amounts held in SAR Account.....................................................          17.7          17.1
                                                                                        -------------  ------------
                                                                                                23.7          52.4
Long-term restricted cash, marketable securities and other investments:
   Amounts held in SAR Account........................................................         102.5         137.8
   Other amounts restricted under the Indenture.......................................           2.7           2.8
   Less: Amounts attributable to Timber Notes held in SAR Account.....................         (50.6)        (53.0)
                                                                                        -------------  ------------
                                                                                                54.6          87.6
                                                                                        -------------  ------------
Total restricted cash, marketable securities and other investments....................  $       78.3   $     140.0
                                                                                        =============  ============

      Other Investments
      Funds held in the SAR Account include a limited partnership interest in
the Equity Fund Partnership, which invests in a diversified portfolio of common
stocks and other equity securities whose issuers are involved in merger, tender
offer, spin-off or recapitalization transactions. This investment is accounted
for under the equity method. The following table shows the Company's investment
in the Equity Fund Partnership and the ownership interest (dollars in millions).

                                                                                          MARCH 31,     DECEMBER 31,
                                                                                            2002            2001
                                                                                        -------------   -------------

Investment in Equity Fund Partnership................................................   $        7.7    $       10.6

Percentage of ownership held.........................................................            2.4%            3.1%

      As of March 31, 2002, long-term restricted cash, marketable securities,
and other investments also included $4.9 million related to an investment in a
limited partnership which invests in, among other things, debt and equity
securities associated with developed and emerging markets.

3.    CONTINGENCIES

      Regulatory and environmental matters play a significant role in the
Company's forest products business, which is subject to a variety of California
and federal laws and regulations, as well as the HCP and SYP, dealing with
timber harvesting practices, threatened and endangered species and habitat for
such species, and air and water quality.

       The SYP complies with regulations of the California Board of Forestry and
Fire Protection 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 assessment of changes in the resource base and other
factors. The HCP and incidental take permits related to the HCP 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.

      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 Water 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 December 1999, the EPA issued a 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. The North Coast Water Board has begun
the process of establishing the final TMDL requirements applicable to the
Company's timberlands. This 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.

      Since the consummation of the Headwaters Agreement in March 1999, there
has been a significant amount of work required in connection with the
implementation of the Environmental Plans, and this work is expected to continue
for several more years. During the implementation period, government agencies
had until recently failed to approve THPs in a timely manner. The rate of
approvals of THPs during 2001 improved over that for the prior year, and further
improvements have been experienced thus far in 2002. Although delays in the
approvals of THPs may from time to time continue to impact the Company's ability
to meet its harvesting goals, the Company anticipates that once the
Environmental Plans are fully implemented, the process of preparing THPs will
become more streamlined, and the time to obtain approval of THPs will
potentially be shortened.

      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, among
other things, various violations of the CESA and the California Environmental
Quality Act, and challenging, among other things, the validity and legality of
the SYP and the Permits issued by California. August 5, 2002, has been set as
the trial date. On March 31, 1999, the USWA lawsuit was filed also challenging
the validity and legality of the SYP. June 10, 2002, has been set as the trial
date. 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 July 24, 2001, the Bear Creek lawsuit was filed. The lawsuit alleges
that Pacific Lumber's harvesting and other activities under certain of its
approved and proposed THPs will result in discharges of pollutants in violation
of the CWA. The plaintiff asserts that the CWA requires the defendants to obtain
a permit from the North Coast Water Board before beginning timber harvesting and
road construction activities in the Bear Creek watershed, and is seeking to
enjoin these activities until such permit has been obtained. The plaintiff also
seeks civil penalties of up to $27,000 per day for the defendant's alleged
continued violation of the CWA. The EPA has been joined as a defendant in this
case. The Company believes that the requirements under the HCP are adequate to
ensure that sediment and pollutants from its harvesting activities will not
reach levels harmful to the environment. Furthermore, EPA regulations
specifically provide that such activities are not subject to CWA permitting
requirements. The Company believes that it has strong legal defenses in this
matter; however, there can be no assurance that this lawsuit will not have a
material adverse effect 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 LOSS AND MEMBER DEFICIT

      Comprehensive loss includes the following (in millions):

                                                                                            THREE MONTHS ENDED
                                                                                                 MARCH 31,
                                                                                        ---------------------------
                                                                                            2002           2001
                                                                                        ------------   ------------
Net loss..............................................................................  $      (5.1)   $      (4.6)
Other comprehensive income (loss):
   Net change in fair value of available-for-sale investments.........................         (1.0)           0.6
                                                                                        ------------   ------------
Total comprehensive loss..............................................................  $      (6.1)   $      (4.0)
                                                                                        ============   ============

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

                                                                                            THREE MONTHS ENDED
                                                                                                 MARCH 31,
                                                                                            2002           2001
                                                                                        ------------   ------------
Balance at beginning of period........................................................  $    (352.3)   $    (288.0)

Comprehensive loss....................................................................         (6.1)          (4.0)
Member distribution...................................................................        (29.4)         (73.1)
                                                                                        ------------   ------------
Balance at end of period..............................................................  $    (387.8)   $    (365.1)
                                                                                        ============   ============


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

      The following should be read in conjunction with the financial statements
in 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. Except as otherwise noted, all references to notes
represent the Notes to the Condensed Financial Statements included in Item 1.

      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 the 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.

BACKGROUND

      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
caused delays in obtaining approvals of THPs and delays in harvesting on THPs
once they are approved. This has resulted in a decline in harvest, an increase
in the cost of logging operations, and lower net sales.

      Since the consummation of the Headwaters Agreement in March 1999, there
has been a significant amount of work required in connection with the
implementation of the Environmental Plans, and this work is expected to continue
for several more years. During the implementation period, government agencies
had until recently failed to approve THPs in a timely manner. The rate of
approvals of THPs during 2001 improved over that for the prior year, and further
improvements have been experienced thus far in 2002. Although delays in the
approvals of THPs may from time to time continue to impact the Company's ability
to meet its harvesting goals, the Company anticipates that once the
Environmental Plans are fully implemented, the process of preparing THPs will
become more streamlined, and the time to obtain approval of THPs will
potentially be shortened.

      While the Company has experienced recent improvements in the THP approval
process, there can be no assurance that the Company will not in the future have
difficulties in receiving approvals of its THPs similar to those experienced in
the past. 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 Part II. Item 1. "Legal
Proceedings" and Note 3 to the Condensed Financial Statements for further
information regarding regulatory and legal proceedings affecting the Company.

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 which began March 1, 1999. See Note 3 to the Condensed Financial
Statements.

      Log Sales to Pacific Lumber
      Net sales from logs were $15.9 million and $13.1 million for the three
months ended March 31, 2002 and 2001, respectively. The increase in sales was
due to a 19,400 Mbfe increase in the volume of log deliveries over the first
quarter of 2001. However, this increase was almost completely offset by a
significant decrease in log prices. The SBE Prices published for the six months
beginning January 1, 2002, reflected declines in the prices for redwood logs in
the range of 40% to 50% from the six month period beginning January 1, 2001. The
volume of log deliveries for the quarters ended March 31, 2002 and 2001, were
32,100 Mbfe and 12,700 Mbfe, respectively. The increase in volume was
predominantly due to an increase in THP approvals beginning in the third quarter
of 2001.

      Operating Income and Net Loss
      Operating income was $8.0 million and $7.8 million for the three months
ended March 31, 2002 and 2001, respectively. The increase was principally due to
the increase in log sales discussed above offset by an increase in depletion
which is directly related to the increase in log volume.

      Net losses were $5.1 million and $4.6 million for the three months ended
March 31, 2002 and 2001, respectively. The increase between periods is due to a
decrease in interest income realized from cash and investments. This decrease in
income was offset by a slight decrease in interest expense.

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.

      At March 31, 2002, the Company could have borrowed a maximum of $60.0
million under the Line of Credit, and there were no borrowings outstanding under
the Line of Credit. The Company has requested that the Scotia LLC Line of Credit
be extended for a period of not less than 364 days beginning July 12, 2002. If
not extended, the Company may draw upon the full amount available. The amount
drawn would be repayable in 12 semiannual installments on each note payment date
(after the payment of certain other items, including the Aggregate Minimum
Principal Amortization Amount, as defined, then due), commencing approximately
two and one-half years following the date of the draw.

      On the note payment date in January 2002, the Company had $33.9 million
set aside in the note payment account to pay the $28.4 million of interest due
as well as $5.5 million of principal. The Company repaid an additional $6.1
million of principal on the Timber Notes using funds held in the SAR Account,
resulting in a total principal payment of $11.6 million, an amount equal to
Scheduled Amortization (as defined in the Indenture).

      With respect to the note payment due in July 2002, the Company expects
that it will require funds from the Line of Credit to pay a portion of the
interest due, and that all of the funds used to pay the Scheduled Amortization
amount will be provided from the SAR Account.

      On March 5, 2002, the Company notified the trustee for the Timber Notes
that the Company had met all of the requirements of the SAR Reduction Date, as
defined in the Indenture. Accordingly, on March 20, 2002, the Company released
$29.4 million from the SAR Account and distributed this amount to Pacific
Lumber.

      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 2001 cash flows from operations were adversely affected by
operating inefficiencies, lower lumber prices, an inadequate supply of logs and
a related slowdown in lumber production. During 2001, comprehensive external and
internal reviews were conducted of Pacific Lumber's business operations. These
reviews were conducted in an effort to identify ways in which Pacific Lumber
could operate on a more efficient and cost effective basis. Based upon the
results of these reviews, Pacific Lumber has, among other things, indefinitely
curtailed two of its four operating sawmills, eliminated certain of its
operations, including its soil amendment and concrete block manufacturing
operations, begun utilizing more efficient harvesting methods and adopted
certain other cost saving measures. Most of these operational changes were
implemented by Pacific Lumber during the last quarter of 2001, or during the
first quarter of 2002. Pacific Lumber also terminated its internal logging
operations (which performed approximately half of Pacific Lumber's logging
operations) as of March 31, 2002, and intends to rely on third party contract
loggers to conduct these activities.

      The $29.4 million release from the SAR Account discussed above improved
Pacific Lumber's liquidity. However, Pacific Lumber may require funds available
under Pacific Lumber's revolving credit agreement, additional 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 the next year.
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.

      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 make
distributions, 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 SBE Price,
continuation of the recent improvements in the THP 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.

CRITICAL ACCOUNTING POLICIES

      See Item 7. "Management's Discussion and Analysis of Financial Condition
and Results of Operations--Critical Accounting Policies" of the Form 10-K for a
discussion of the Company's critical accounting policies.


                           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 22, 2002, the Company filed a current report on Form 8-K (under
Item 9), related to the filing of two certificates in respect of the Company's
Timber Notes.

      On February 20, 2002, the Company filed a current report on Form 8-K
(under Item 9), related to the filing of a certificate in respect of the
Company's Timber Notes.

      On March 20, 2002, the Company filed a current report on Form 8-K (under
Item 9), related to the filing of a certificate in respect of the Company's
Timber Notes.

      On April 22, 2002, the Company filed a current report on Form 8-K (under
Item 9), related to the filing of a certificate in respect of the Company's
Timber Notes.

      On May 2, 2002, the Company filed a current report on Form 8-K dated as of
April 30, 2002 (under Item 4), related to the change of Registrant's certifying
accountant.




                                    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 15, 2002          By:                      /S/ GARY L. CLARK
                                    ---------------------------------------------------
                                                      Gary L. Clark
                                        Vice President - Finance and Administration
                                       (Principal Financial and Accounting Officer)




                                                                      APPENDIX A


                            GLOSSARY OF DEFINED TERMS


Bear Creek lawsuit: An action entitled Environmental Protection Information
Association v. Pacific Lumber, Scotia Pacific Company LLC (No. C01-2821), filed
July 24, 2001, in the U.S. District Court in the Northern District of California

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, Scotia Pacific Company LLC, 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

FASB:  Financial Accounting Standards Board

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, 2001

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

North Coast Water Board:  North Coast Regional Water Quality Control Board

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

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

SFAS No. 143: Statement of Financial Accounting Standard No. 143, "Accounting
for Asset Retirement Obligations"

SFAS No. 145: Statement of Financial Accounting Standard No. 145, "Rescission of
FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and
Technical Corrections"

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 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