STATEMENTS OF INCOME (LOSS) (UNAUDITED) Boise Cascade Corporation and Subsidiaries
THREE MONTHS ENDED DECEMBER 31 YEAR ENDED DECEMBER 31
1993 1992 1993 1992
(EXPRESSED IN THOUSANDS)
REVENUES
Sales $ 996,900 $ 904,960 $ 3,958,300 $ 3,715,590
Other income (expense), net (410) (3,470) 24,140 14,800
996,490 901,490 3,982,440 3,730,390
COSTS AND EXPENSES
Materials, labor, and other operating expenses 853,800 761,370 3,373,300 3,223,910
Depreciation and cost of company timber harvested 67,190 69,340 267,710 265,790
Selling and administrative expenses 79,810 80,560 321,650 335,170
1,000,800 911,270 3,962,660 3,824,870
INCOME (LOSS) FROM OPERATIONS (4,310) (9,780) 19,780 (94,480)
Interest expense (35,590) (40,600) (148,310) (166,450)
Interest income 330 370 1,330 1,830
Foreign exchange gain (loss) (420) 1,490 1,610 6,590
(35,680) (38,740) (145,370) (158,030)
LOSS BEFORE INCOME TAXES (39,990) (48,520) (125,590) (252,510)
Income tax benefit (16,310) (18,920) (48,450) (98,480)
LOSS BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE (23,680) (29,600) (77,140) (154,030)
CUMULATIVE EFFECT OF ACCOUNTING CHANGE, NET OF TAX -- -- -- (73,450)
NET LOSS $ (23,680) $ (29,600) $ (77,140) $ (227,480)
NET LOSS PER COMMON SHARE
Primary
Loss before cumulative effect of accounting change $ (.98) $ (.97) $ (3.17) $ (4.79)
Cumulative effect of accounting change, net of tax -- -- -- (1.94)
Net loss per share $ (.98) $ (.97) $ (3.17) $ (6.73)
Fully diluted
Loss before cumulative effect of accounting change $ (.98) $ (.97) $ (3.17) $ (4.79)
Cumulative effect of accounting change, net of tax -- -- -- (1.94)
Net loss per share $ (.98) $ (.97) $ (3.17) $ (6.73)
SEGMENT INFORMATION
SEGMENT SALES
Paper and paper products $ 476,323 $ 463,397 $ 1,920,653 $ 1,930,243
Office products 179,888 162,077 682,819 672,220
Building products 388,278 316,076 1,530,824 1,269,465
Intersegment eliminations and other (47,589) (36,590) (175,996) (156,338)
$ 996,900 $ 904,960 $ 3,958,300 $ 3,715,590
SEGMENT OPERATING INCOME (LOSS)
Paper and paper products $ (34,169) $ (33,722) $ (137,770) $ (186,537)
Office products 7,710 4,562 35,631 18,847
Building products 32,540 30,821 158,773 114,891
Joint ventures, corporate, and other (10,391) (11,441) (36,854) (41,681)
INCOME (LOSS) FROM OPERATIONS $ (4,310) $ (9,780) $ 19,780 $ (94,480)
BALANCE SHEETS (Unaudited) Boise Cascade Corporation and Subsidiaries
DECEMBER 31
ASSETS 1993 1992
(EXPRESSED IN THOUSANDS)
CURRENT
Cash and cash items $ 14,860 $ 12,588
Short-term investments at cost,
which approximates market 7,569 7,744
22,429 20,332
Receivables, less allowances of
$1,264,000 and $1,757,000 366,187 366,891
Inventories 446,609 415,930
Deferred income tax benefits 38,831 49,518
Other 13,397 12,993
887,453 865,664
PROPERTY
Property and equipment
Land and land improvements 56,871 56,601
Buildings and improvements 571,712 556,266
Machinery and equipment 4,642,434 4,498,287
5,271,017 5,111,154
Accumulated depreciation (2,261,360) (2,044,189)
3,009,657 3,066,965
Timber, timberlands, and timber
deposits 366,054 385,955
3,375,711 3,452,920
OTHER ASSETS 249,809 241,122
TOTAL ASSETS $ 4,512,973 $ 4,559,706
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT
Notes payable $ 31,000 $ 4,000
Current portion of long-term debt 145,185 243,723
Accounts payable 288,300 268,962
Accrued liabilities
Compensation and benefits 103,188 107,007
Interest payable 32,194 42,847
Other 88,568 83,192
688,435 749,731
DEBT
Long-term debt, less current portion 1,593,348 1,680,183
Guarantee of ESOP debt 246,856 261,695
1,840,204 1,941,878
OTHER
Deferred income taxes 222,464 279,011
Other long-term liabilities 257,346 231,490
479,810 510,501
SHAREHOLDERS' EQUITY
Preferred stock -- no par value;
10,000,000 shares authorized;
Series D ESOP: $.01 stated
value; 6,395,047 and
6,475,198 shares outstanding 287,777 291,384
Deferred ESOP benefit (246,856) (261,695)
Series E: $.01 stated value;
862,500 shares outstanding in
each period 191,466 191,471
Series F: $.01 stated value;
115,000 shares outstanding in
1993 111,043 --
Series G: $.01 stated value;
862,500 shares outstanding in
1993 176,404 --
Common stock -- $2.50 par value;
200,000,000 shares authorized;
37,987,529 and 37,940,312 shares
outstanding 94,969 94,851
Retained earnings 889,721 1,041,585
Total shareholders' equity 1,504,524 1,357,596
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $ 4,512,973 $ 4,559,706
SHAREHOLDERS' EQUITY PER COMMON SHARE $25.92 $29.95
STATEMENTS OF CASH FLOWS (Unaudited) Boise Cascade Corporation and
Subsidiaries
YEAR ENDED DECEMBER 31
1993 1992
(EXPRESSED IN THOUSANDS)
CASH PROVIDED BY (USED FOR) OPERATIONS
Net loss $ (77,140) $ (227,480)
Items in loss not using (providing) cash
Cumulative effect of accounting change,
net of tax -- 73,450
Depreciation and cost of company timber
harvested 267,710 265,790
Deferred income tax benefit (46,243) (59,815)
Amortization and other 11,547 28,549
Gain on sales of operating assets (8,300) (25,020)
Receivables (116) (46,322)
Inventories (30,679) (3,319)
Accounts payable and accrued liabilities 15,696 9,216
Current and deferred income taxes 13,137 53,572
Other (14,391) (1,947)
Cash provided by operations 131,221 66,674
CASH PROVIDED BY (USED FOR) INVESTMENT
Expenditures for property and equipment (216,818) (275,414)
Expenditures for timber and timberlands (4,663) (7,537)
Sales of operating assets 23,992 202,156
Other 8,867 (31,387)
Cash used for investment (188,622) (112,182)
CASH PROVIDED BY (USED FOR) FINANCING
Cash dividends paid
Common stock (22,772) (22,765)
Preferred stock (44,731) (32,712)
(67,503) (55,477)
Notes payable 27,000 (54,000)
Additions to long-term debt 83,807 130,937
Payments of long-term debt (269,180) (164,380)
Issuance of preferred stock 287,442 191,471
Other (2,068) (4,722)
Cash provided by financing 59,498 43,829
INCREASE (DECREASE) IN CASH AND
SHORT-TERM INVESTMENTS 2,097 (1,679)
BALANCE AT BEGINNING OF YEAR 20,332 22,011
BALANCE AT END OF YEAR $ 22,429 $ 20,332
NOTES TO QUARTERLY FINANCIAL STATEMENTS Boise Cascade Corporation
and Subsidiaries
Operating Highlights. These statements are unaudited statements
which do not include all Notes to Financial Statements and should
be read in conjunction with the 1993 Annual Report of the
Company. The 1993 Annual Report will be available in March 1994.
The net loss for the three months ended December 31, 1993 and
1992, was subject to seasonal variations and necessarily involved
adjustments to estimates made at interim periods for accruals and
allocations.
In the fourth quarter of 1993, the Company adopted Financial
Accounting Standards Board requirements to accrue certain
severance, disability, and other benefits provided to former or
inactive employees. Adoption of these requirements did not have
a material effect on the Company's fourth-quarter loss.
Results for the third quarter of 1993 included a net pretax
gain of $5,300,000, or 9 cents per fully diluted common share
after tax, which was primarily attributable to an asset sale.
Late in the third quarter of 1993, the Company issued
862,500 Series G conversion preferred shares for $176,404,000,
net of issuance costs. Unless previously redeemed or converted,
these shares will automatically convert to 8,625,000 shares of
the Company's common stock in 1997.
Early in the first quarter of 1993, the Company issued
$111,043,000, net of issuance costs, of 9.4% nonconvertible
Series F preferred stock.
During the first quarter of 1993, the Company sold its interest
in a specialty paper producer at a pretax gain of $8,644,000, or
14 cents per fully diluted common share after taxes.
Effective as of January 1, 1993, the Company adopted new
Financial Accounting Standards Board requirements that govern the
way deferred taxes are calculated and reported. Adoption of
these requirements entailed a one-time adjustment that had no
effect on the Company's first quarter 1993 net loss. Financial
statements for prior periods have not been restated.
In the second quarter of 1993, the Canadian federal government
reduced the statutory tax rate applicable to the Company.
Effective as of the beginning of 1993, the rate decreased from
23.8% to 22.8%, and a further reduction to 21.8% was effective at
the beginning of 1994. In the third quarter of 1993, the U.S.
federal government increased the statutory tax rate from 34% to
35%, effective as of the beginning of 1993. In accordance with
the provisions of the newly adopted accounting standard, net
deferred tax liabilities are adjusted when rate changes are
adopted. The one-time second-quarter adjustment resulted in a
benefit of $5,020,000, or 13 cents per fully diluted common
share, and the third-quarter adjustment resulted in a charge of
$7,120,000, or 19 cents per fully diluted common share.
The effective tax rate for 1993, exclusive of the impact of the
adjustments to deferred taxes, was 40.3%, compared with a rate of
39% in 1992.
During the fourth quarter of 1992, the Company adopted,
effective as of January 1, 1992, the Financial Accounting
Standards Board requirements applicable to accounting for
postretirement benefits other than pensions. The Company's
retiree health care costs that had previously been recorded when
paid are now accrued. The cumulative present value of costs
payable in the future that are attributable to employee service
prior to January 1, 1992, is shown on the Company's Statements of
Income (Loss) under the caption "Cumulative effect of accounting
change, net of tax." The Company's 1992 retiree health care
costs increased by $3,000,000 before taxes, or 5 cents per fully
diluted common share after taxes, as a result of adoption of the
new requirements. Net loss reported for each of the first three
quarters of 1992 has been restated to include a proportionate
share of these costs.
At the end of the second quarter of 1992, the Company completed
the sale of 11 corrugated container plants. The pretax gain of
$25,020,000, or 41 cents per fully diluted common share after
taxes, from that sale was largely offset by the write-off of
certain pulp and paper mill start-up costs that had been
capitalized prior to 1987. The write-off reflects a change in
the estimated period benefited by such expenditures.
Early in the first quarter of 1992, the Company completed the
sale of essentially all of its wholesale office products
distribution operations.
Net Loss Per Common Share. Net loss per common share was
determined by dividing net loss, as adjusted below, by applicable
shares outstanding.
YEAR ENDED DECEMBER 31
1993 1992
(EXPRESSED IN THOUSANDS)
Net loss as reported $ (77,140) $ (227,480)
Preferred dividends (43,076) (27,711)
Primary loss (120,216) (255,191)
Assumed conversions:
Preferred dividends eliminated 33,407 27,711
Interest on 7% debentures eliminated 3,644 4,108
Supplemental ESOP contribution (12,381) (10,285)
Fully diluted loss $ (95,546) $ (233,657)
Average number of common shares
Primary 37,958 37,942
Fully diluted 55,825 53,283
NOTES TO QUARTERLY FINANCIAL STATEMENTS Boise Cascade Corporation
and Subsidiaries
The computation of fully diluted net loss per share was
antidilutive in each of the periods presented; therefore, the
amounts reported for primary and fully diluted loss are the same.
For 1993 and 1992, primary average shares include only common
shares outstanding. For these years, common stock equivalents
attributable to stock options, Series E conversion preferred
stock subsequent to issuance in January 1992, and Series G
conversion preferred stock subsequent to issuance in September
1993 were excluded because they were antidilutive. Excluded
common equivalent shares were 10,840,000 at December 31, 1993,
compared with 7,998,000 shares at the same date in the prior
year. In addition to common and common equivalent shares, fully
diluted average shares include common shares that would be
issuable upon conversion of the Company's other convertible
securities.
Primary loss includes the aggregate amount of dividends on the
Company's preferred stock. The dividend attributable to the
Company's Series D convertible preferred stock held by the
Company's ESOP (employee stock ownership plan) is net of a tax
benefit. To determine the fully diluted loss, dividends and
interest, net of any applicable taxes, have been added back to
primary loss to reflect assumed conversions. The fully diluted
loss was increased by the after-tax amount of additional
contributions that the Company would be required to make to its
ESOP if the Series D ESOP preferred shares were converted to
common stock.
The pages of this report are printed on 60 lb Cascade [register
mark] Offset, produced by Boise Cascade's papermakers in Wallula,
Washington.