UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
F O R M 10 - Q
(X) Quarterly Report Pursuant to Section 13 or 15(d) of The Securities
Exchange Act of 1934
For the Quarterly Period Ended September 30, 1996
( ) Transition Report Pursuant to Section 13 or 15(d) of The Securities
Exchange Act of 1934
For the Transition Period From ___________ to _____________
Commission file number 1-5057
BOISE CASCADE CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 82-0100960
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1111 West Jefferson Street
P.O. Box 50
Boise, Idaho 83728-0001
(Address of principal executive offices) (Zip Code)
(208) 384-6161
(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.
Shares Outstanding
Class as of October 31, 1996
Common stock, $2.50 par value 48,472,210
PART I - FINANCIAL INFORMATION
STATEMENTS OF INCOME (LOSS)
BOISE CASCADE CORPORATION AND SUBSIDIARIES
(unaudited)
Item 1. Financial Statements
Three Months Ended September 30
1996 1995
(expressed in thousands,
except per share data)
Revenues
Sales $1,356,370 $1,339,110
Other income (expense), net 1,530 3,940
__________ __________
1,357,900 1,343,050
__________ __________
Costs and expenses
Materials, labor, and other operating expenses 1,119,670 968,260
Depreciation and cost of company timber
harvested 61,100 61,630
Selling and administrative expenses 143,730 112,170
__________ __________
1,324,500 1,142,060
__________ __________
Equity in net income of affiliates 850 15,860
__________ __________
Income from operations 34,250 216,850
__________ __________
Interest expense (34,270) (33,080)
Interest income 380 930
Foreign exchange loss (170) (20)
Gain on subsidiary's issuance of stock 430 6,160
__________ __________
(33,630) (26,010)
__________ __________
Income before income taxes and
minority interest 620 190,840
Income tax provision 70 70,170
__________ __________
Income before minority interest 550 120,670
Minority interest, net of income tax (2,200) (2,190)
__________ __________
Net income (loss) $ (1,650) $ 118,480
Net income (loss) per common share
Primary $ (.24) $ 2.03
Fully diluted $ (.24) $ 1.83
Dividends declared per common share $ .15 $ .15
The accompanying notes are an integral part of these Financial Statements.
SEGMENT INFORMATION
BOISE CASCADE CORPORATION AND SUBSIDIARIES
(unaudited)
Three Months Ended September 30
1996 1995
(expressed in thousands)
Segment sales
Paper and paper products $ 500,046 $ 674,682
Office products 506,694 332,037
Building products 426,177 428,679
Intersegment eliminations and other (76,547) (96,288)
__________ __________
$1,356,370 $1,339,110
Segment operating income
Paper and paper products $ 10,076 $ 164,008
Office products 21,991 21,240
Building products 12,866 29,631
Equity in net income of affiliates 850 15,860
Corporate and other (11,533) (13,889)
__________ __________
Income from operations $ 34,250 $ 216,850
The accompanying notes are an integral part of these Financial Statements.
STATEMENTS OF INCOME (LOSS)
BOISE CASCADE CORPORATION AND SUBSIDIARIES
(Unaudited)
Nine months ended September 30
1996 1995
(expressed in thousands,
except per share data)
Revenues
Sales $3,845,480 $3,832,270
Other income (expense), net 7,170 (17,310)
__________ __________
3,852,650 3,814,960
__________ __________
Costs and expenses
Materials, labor, and other
operating expenses 3,145,020 2,841,890
Depreciation and cost of company
timber harvested 174,160 182,750
Selling and administrative expenses 419,060 315,150
__________ __________
3,738,240 3,339,790
__________ __________
Equity in net income of affiliates 2,800 33,310
__________ __________
Income from operations 117,210 508,480
__________ __________
Interest expense (97,720) (105,380)
Interest income 1,130 2,210
Foreign exchange gain (loss) (830) 20
Gain on subsidiary's issuance of stock 2,450 66,160
__________ __________
(94,970) (36,990)
__________ __________
Income before income taxes
and minority interest 22,240 471,490
Income tax provision 7,720 186,520
__________ __________
Income before minority interest 14,520 284,970
Minority interest, net of income tax (7,610) (3,530)
__________ __________
Net income $ 6,910 $ 281,440
Net income (loss) per common share
Primary $ (.47) $ 4.78
Fully diluted $ (.47) $ 4.32
Dividends declared per common share $ .45 $ .45
The accompanying notes are an integral part of these Financial Statements.
SEGMENT INFORMATION
BOISE CASCADE CORPORATION AND SUBSIDIARIES
(unaudited)
Nine Months Ended September 30
1996 1995
(expressed in thousands)
Segment sales
Paper and paper products $1,462,231 $1,927,760
Office products 1,428,884 941,042
Building products 1,185,106 1,207,156
Intersegment eliminations and other (230,741) (243,688)
__________ __________
$3,845,480 $3,832,270
Segment operating income
Paper and paper products $ 48,294 $ 394,279
Office products 74,547 47,440
Building products 20,132 75,911
Equity in net income of affiliates 2,800 33,310
Corporate and other (28,563) (42,460)
__________ __________
Income from operations $ 117,210 $ 508,480
The accompanying notes are an integral part of these Financial Statements.
BOISE CASCADE CORPORATION AND SUBSIDIARIES
BALANCE SHEETS
(unaudited)
ASSETS
September 30 December 31
1996 1995 1995
(expressed in thousands)
Current
Cash and cash items $ 55,945 $ 45,778 $ 36,876
Short-term investments at cost,
which approximates market 2,233 28,609 14,593
__________ __________ __________
58,178 74,387 51,469
Receivables, less allowances of
$5,173,000, $3,377,000, and
$3,577,000 522,887 509,236 457,608
Inventories 581,088 474,550 568,905
Deferred income tax benefits 58,705 79,356 82,744
Other 131,393 25,350 152,442
__________ __________ __________
1,352,251 1,162,879 1,313,168
__________ __________ __________
Property
Property and equipment
Land and land improvements 41,260 38,674 39,482
Buildings and improvements 484,701 447,741 459,897
Machinery and equipment 4,683,226 4,216,182 4,271,306
__________ __________ __________
5,209,187 4,702,597 4,770,685
Accumulated depreciation (2,273,006) (2,193,494) (2,166,487)
__________ __________ __________
2,936,181 2,509,103 2,604,198
Timber, timberlands, and timber
deposits 371,901 399,528 383,394
__________ __________ __________
3,308,082 2,908,631 2,987,592
__________ __________ __________
Investments in equity affiliates 38,607 251,446 25,803
Other assets 445,047 301,032 329,623
__________ __________ __________
Total assets $5,143,987 $4,623,988 $4,656,186
The accompanying notes are an integral part of these Financial Statements.
BOISE CASCADE CORPORATION AND SUBSIDIARIES
BALANCE SHEETS
(unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
September 30 December 31
1996 1995 1995
(expressed in thousands)
Current
Notes payable $ 94,300 $ 183,000 $ 17,000
Current portion of long-term debt 107,427 609 20,778
Income taxes payable - 7,328 26,328
Accounts payable 424,871 352,321 379,523
Accrued liabilities
Compensation and benefits 144,072 152,409 159,514
Interest payable 25,781 25,146 27,542
Other 147,688 138,425 139,222
__________ __________ __________
944,139 859,238 769,907
__________ __________ __________
Debt
Long-term debt, less current portion 1,734,923 1,268,423 1,364,835
Guarantee of ESOP debt 210,453 228,212 213,934
__________ __________ __________
1,945,376 1,496,635 1,578,769
__________ __________ __________
Other
Deferred income taxes 270,558 306,340 302,030
Other long-term liabilities 238,530 256,851 243,259
__________ __________ __________
509,088 563,191 545,289
__________ __________ __________
Minority interest 76,481 64,968 67,783
__________ __________ __________
Shareholders' equity
Preferred stock -- no par value;
10,000,000 shares authorized;
Series D ESOP: $.01 stated
value; 5,976,459; 6,143,333;
and 6,117,774 shares outstanding 268,941 276,450 275,300
Deferred ESOP benefit (210,453) (228,212) (213,934)
Series F: $.01 stated value;
115,000 shares outstanding 111,043 111,043 111,043
Series G: $.01 stated value;
862,500 shares outstanding 176,404 176,404 176,404
Common stock -- $2.50 par value;
200,000,000 shares authorized;
48,468,998; 48,056,941; and
47,759,946 shares outstanding 121,172 120,142 119,400
Additional paid-in capital 230,655 202,870 205,107
Retained earnings 971,141 981,259 1,021,118
__________ __________ __________
Total shareholders' equity 1,668,903 1,639,956 1,694,438
__________ __________ __________
Total liabilities and shareholders'
equity $5,143,987 $4,623,988 $4,656,186
The accompanying notes are an integral part of these Financial Statements.
BOISE CASCADE CORPORATION AND SUBSIDIARIES
STATEMENTS OF CASH FLOWS
(unaudited)
Nine Months Ended September 30
1996 1995
(expressed in thousands)
Cash provided by (used for) operations
Net income $ 6,910 $ 281,440
Items in income not using (providing) cash
Equity in net income of affiliates (2,800) (33,310)
Depreciation and cost of company timber
harvested 174,160 182,750
Deferred income tax provision 6,073 139,117
Minority interest, net of income tax 7,610 3,530
Amortization and other 17,202 36,835
Gain on subsidiary's issuance of stock (2,450) (66,160)
Receivables (20,383) (79,238)
Inventories 19,807 (40,473)
Accounts payable and accrued liabilities (20,403) 47,102
Current and deferred income taxes (57,382) 3,418
Other 6,381 407
__________ __________
Cash provided by operations 134,725 475,418
__________ __________
Cash provided by (used for) investment
Expenditures for property and equipment (481,746) (191,612)
Expenditures for timber and timberlands (4,471) (3,974)
Investments in equity affiliates, net (9,386) (2,000)
Purchase of facilities (153,392) (37,095)
Other 22,136 (7,746)
__________ __________
Cash used for investment (626,859) (242,427)
__________ __________
Cash provided by (used for) financing
Cash dividends paid
Common stock (21,638) (19,916)
Preferred stock (28,378) (32,450)
__________ __________
(50,016) (52,366)
Notes payable 77,300 127,000
Additions to long-term debt 496,498 10,140
Payments of long-term debt (39,761) (423,462)
Subsidiary's issuance of stock - 123,076
Other 14,822 27,554
__________ __________
Cash provided by (used for) financing 498,843 (188,058)
__________ __________
Increase in cash and short-term
investments 6,709 44,933
Balance at beginning of the year 51,469 29,454
__________ __________
Balance at September 30 $ 58,178 $ 74,387
The accompanying notes are an integral part of these Financial Statements.
Notes to Quarterly Financial Statements
(1) BASIS OF PRESENTATION. The quarterly financial statements have been
prepared by the Company pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. These
statements should be read together with the statements and the accom-
panying notes included in the Company's 1995 Annual Report.
The quarterly financial statements have not been audited by independent
public accountants, but in the opinion of management, all adjustments
necessary to present fairly the results for the periods have been
included. The net income (loss) for the three and nine months ended
September 30, 1996 and 1995, was subject to seasonal variations and
necessarily involved estimates and accruals. Except as may be disclosed
within these "Notes to Quarterly Financial Statements," the adjustments
made were of a normal, recurring nature. Quarterly results are not
necessarily indicative of results that may be expected for the year.
(2) NET INCOME (LOSS) PER COMMON SHARE. Net income (loss) per common share
was determined by dividing net income, as adjusted, by applicable shares
outstanding. For the three and nine months ended September 30, 1996,
the computation of fully diluted net loss per share was antidilutive;
therefore, amounts reported for primary and fully diluted loss were the
same.
For the three and nine months ended September 30, 1996 and 1995, primary
average shares included common shares outstanding and, if dilutive,
common stock equivalents attributable to stock options, Series E
conversion preferred stock prior to converting to shares of the
Company's common stock on January 15, 1995, and Series G conversion
preferred stock. For the three and nine months ended September 30,
1996, common stock equivalents attributable to stock options and the
effect of the Series G conversion preferred stock were antidilutive.
Accordingly, 7,253,000 and 7,384,000 common equivalent shares are
excluded for those periods. 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.
Three Months Ended September 30
1996 1995
(expressed in thousands)
Net income (loss) as reported $ (1,650) $ 118,480
Preferred dividends (9,839) (6,403)
_________ _________
Primary income (loss) (11,489) 112,077
Assumed conversions:
Preferred dividends eliminated 7,136 3,700
Interest on 7% debentures eliminated - 805
Supplemental ESOP contribution (3,188) (3,162)
_________ _________
Fully diluted income (loss) $ (7,541) $ 113,420
Average number of common shares
Primary 48,469 55,300
Fully diluted 60,591 62,182
Nine Months Ended September 30
1996 1995
(expressed in thousands)
Net income as reported $ 6,910 $ 281,440
Preferred dividends (29,479) (19,180)
_________ _________
Primary income (loss) (22,569) 262,260
Assumed conversions:
Preferred dividends eliminated 21,371 11,072
Interest on 7% debentures eliminated - 2,502
Supplemental ESOP contribution (9,531) (9,464)
_________ _________
Fully diluted income (loss) $ (10,729) $ 266,370
Average number of common shares
Primary 48,211 54,886
Fully diluted 60,526 61,667
Primary income excludes and primary loss includes the aggregate amount
of dividends on the Company's preferred stock, if dilutive. 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 income (loss),
dividends on convertible preferred stock and interest, net of any
applicable taxes, have been added back to primary income (loss) to
reflect assumed conversions. The fully diluted income was reduced by
and 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.
(3) INVENTORIES. Inventories include the following:
September 30 December 31
1996 1995 1995
(expressed in thousands)
Finished goods and work in process $400,178 $317,893 $394,163
Logs 110,393 84,786 116,959
Other raw materials and supplies 165,622 177,086 175,877
LIFO reserve (95,105) (105,215) (118,094)
________ ________ ________
$581,088 $474,550 $568,905
(4) INCOME TAXES. The estimated tax provision rate, excluding the effect of
not providing taxes related to "Gain on subsidiary's issuance of stock,"
for the first nine months of 1996 was 39%. The estimated tax provision
rate for the first nine months of 1995, before any effects of unusual
items, was 38%.
(5) DEBT. At September 30, 1996, the Company had a $600 million revolving
credit agreement with a group of banks. Borrowing under the agreement
was $150 million. In the first quarter of 1996, the Company guaranteed
amounts outstanding under a loan agreement between a group of banks and
a wholly owned subsidiary. At September 30, 1996, amounts outstanding
under this agreement were $277 million. Additionally, the Company's
majority-owned subsidiary, Boise Cascade Office Products Corporation
("BCOP"), had a $350 million revolving credit agreement with a group of
banks. Borrowing under this agreement was $95 million. On June 5,
1996, the revolving credit agreement was amended to extend the
termination date from June 30, 1999, to June 30, 2001, and the aggregate
of all commitments that can be outstanding was increased from
$225 million to $350 million.
On January 24, 1996, the Company sold $125 million of 7.35% debentures
due 2016.
(6) BOISE CASCADE OFFICE PRODUCTS CORPORATION. During the first nine months
of 1996, BCOP, the Company's majority-owned subsidiary, made nine
acquisitions which were accounted for under the purchase method of
accounting. Accordingly, the purchase prices were allocated to the
assets acquired and liabilities assumed based upon their estimated fair
values. The excess of the purchase price over the estimated fair value
of the net assets acquired was recorded as goodwill and is being
amortized over 40 years. The results of operations of the acquired
businesses are included in BCOP's operations subsequent to the dates of
acquisition.
On January 31, 1996, BCOP acquired the contract stationer business of
Sierra Vista Office Products, Inc., based in Albuquerque, New Mexico.
On February 5, 1996, BCOP acquired Grand & Toy Limited, a Canadian
office products distributor. On February 9, 1996, BCOP acquired the
contract stationer businesses of Loring, Short & Harmon, Inc., based in
Portland, Maine, and McAuliffe's based in Burlington, Vermont. On
March 29, 1996, BCOP acquired the contract stationer and office
furniture business of Office Essentials based in Milwaukee, Wisconsin.
On April 26, 1996, BCOP acquired the contract stationer business of
Crawford's Office Supplies, based in Seattle, Washington. On May 31,
1996, BCOP acquired the contract stationer business of Zemlick Brothers,
Inc., based in Kalamazoo, Michigan. On July 1, 1996, BCOP acquired the
contract stationer business of Pedersen Contact, based in Melbourne,
Australia. On July 31, 1996, BCOP acquired the contract stationer
business of Mike Bryan Office Products, Inc., based in Oklahoma City,
Oklahoma. These acquisitions, including Grand & Toy, were purchased for
cash of $145.1 million, $1.7 million of BCOP's common stock issued to
the sellers, and the recording of $20.6 million of liabilities.
Unaudited pro forma results of operations, reflecting these
acquisitions, would have been as follows. If these businesses had been
acquired on January 1, 1996, the Company's sales for the first nine
months of 1996 would have increased by $60 million, net income and
primary and fully diluted earnings per common share would have been
unchanged. If these businesses had been acquired on January 1, 1995,
the Company's sales for the first nine months of 1995 would have
increased by $238 million, net income would have decreased by
$4 million, and primary and fully diluted earnings per common share
would have decreased by 7 cents and 6 cents, respectively. In the first
quarter of 1995, Grand & Toy Limited recorded a restructuring charge.
Excluding the impact of this restructuring charge, pro forma net income
and earnings per share would have been essentially the same as the
historical amounts reported for the nine months ended September 30,
1995. This unaudited pro forma financial information does not
necessarily represent the actual consolidated results of operations that
would have resulted if the acquisitions had occurred on the dates
assumed.
In November 1996, BCOP acquired Oregon Wholesale Novelty Company, Inc.
(OWNCO), an advertising specialties company with annual sales of
approximately $30 million. Also in October and November 1996, BCOP
acquired seven other contract stationer businesses with combined annual
sales of approximately $56 million. In the second quarter of 1996, BCOP
started up office products distribution centers in Las Vegas, Nevada,
and Miami, Florida.
In April, BCOP's board of directors authorized a two-for-one split of
BCOP common stock in the form of a 100% stock dividend. Each BCOP
shareholder of record at the close of business on May 6, 1996, received
one additional share for each share held on that date. The new shares
were distributed on May 20, 1996.
(7) SHAREHOLDER'S EQUITY. On January 15, 1995, the Company's Series E
preferred stock converted to 8,625,000 shares of common stock.
In October 1995, the Company announced that its board of directors had
authorized the Company to purchase up to 4,300,000 shares of its common
stock or common stock equivalents. In April 1996, the Company announced
that because of recent weakness in paper and wood products markets, it
had slowed the purchase of its common stock or common stock equivalents.
The repurchase program was to be in effect for 12 to 18 months, but that
period may be extended. Since October 1995, the Company purchased
622,505 shares of stock through September 30, 1996.
(8) INVESTMENTS IN EQUITY AFFILIATES. In October 1994, Rainy River Forest
Products Inc. ("Rainy River"), the Company's former Canadian subsidiary,
completed an initial public offering of units of its equity and debt
securities. As a result of the offering, the Company owned 49% of the
outstanding voting common shares and 60% of the total equity of Rainy
River. During 1995, Rainy River was accounted for on the equity method
in the Company's consolidated financial statements. For the three and
nine months ended September 30, 1995, Rainy River's results of
operations were included in "Equity in net income of affiliates." In
November 1995, the Company divested its remaining interest in Rainy
River through Rainy River's merger with Stone-Consolidated Corporation.
At September 30, 1996, the Company held 6,646,217 shares of Stone-
Consolidated common stock, representing less than 10% of Stone-
Consolidated's outstanding common stock. The Company accounts for its
holdings in Stone-Consolidated on the cost method. The investment in
Stone-Consolidated stock totaled $74.2 million at September 30, 1996.
The investment has been classified as available for sale and is being
marked to market. At September 30, 1996, "Retained Earnings" was
reduced by $14.3 million, including the impact of foreign currency
translation and deferred income taxes, for this market adjustment.
On October 16, 1995, the Company announced its intent to form a joint
venture with Companhia Suzano de Papel e Celulose ("Suzano"), a
Brazilian pulp and paper producer, to acquire, operate, and expand the
Company's pulp and paper mill, timberlands, sawmill, and wastepaper
recycling plant in Jackson, Alabama. In April 1996, the Company
announced that it had discontinued talks with Suzano regarding formation
of the joint venture. Regardless, the Company will complete the
expansion of the mill, including construction of a new uncoated free
sheet paper machine, which represents a $290 million capital investment.
The new paper machine should begin production in the second quarter of
1997.
(9) OTHER. On November 1, 1996, the Company completed the sale of its
coated publication paper operations, consisting primarily of its pulp
and paper mill in Rumford, Maine, and 667,000 acres of timberland, to
The Mead Corporation for approximately $637 million in cash. After
payment of certain related tax indemnification requirements, the net
cash proceeds from the sale will be used to reduce debt and to improve
the competitive position of the Company's remaining paper business. The
transaction resulted in a pretax gain of approximately $40 million,
which was offset, in part, by approximately $15 million of pretax
expense arising from the related tax indemnification requirements. The
gain will be recorded in the fourth quarter of 1996. (See
"Item 5. Other Information" for pro forma data.)
In April 1996, the Company completed the previously announced
reconfiguration of its Vancouver, Washington, paper mill by permanently
shutting down the mill's three paper machines and recycled wastepaper
operations. The mill will operate as a paper converting facility,
converting papers made elsewhere by the Company primarily into security
papers. In the fourth quarter of 1995, the Company recorded a pretax
charge of $74.9 million, most of which was related to the
reconfiguration of this mill.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Three Months Ended September 30, 1996, Compared With Three Months Ended
September 30, 1995
Boise Cascade Corporation's net loss for the third quarter of 1996 was
$1.7 million, compared with net income of $118.5 million for the third quarter
of 1995. Primary and fully diluted loss per common share for the third
quarter of 1996 were 24 cents. For the same quarter in 1995, primary earnings
per common share were $2.03, while fully diluted earnings per common share
were $1.83. Results for the third quarter of 1995 included a gain of
$6.2 million, or 10 cents per fully diluted share, related to the issuance of
common shares by Boise Cascade Office Products Corporation (BCOP).
Sales for the third quarter of 1996 were $1.4 billion compared with $1.3
billion for the third quarter of 1995.
The Company's paper segment reported operating income of $10.1 million in the
third quarter of 1996, compared with operating income of $164.0 million in the
third quarter of 1995. Sales fell 26% to $500.0 million in the third quarter
of 1996 from $674.7 million in the third quarter of 1995. The decline in
results was due primarily to lower paper prices. Average prices for all of
the Company's paper grades declined from third-quarter 1995 levels. Uncoated
free sheet papers fell $283 a ton, or 27%; coated papers fell $243 a ton, or
23%; containerboard fell $210 a ton, or 43%; newsprint fell $122 a ton, or
20%; and market pulp fell $349 a ton, or 49%. Sales volumes for the third
quarter of 1996 were 729,000 tons, compared with 726,000 tons in the third
quarter of 1995.
Paper segment manufacturing costs in the third quarter of 1996 were $551 per
ton compared with $577 per ton in the comparison quarter. The decrease is
primarily due to lower variable wood costs.
Operating income in the office products segment improved in the third quarter
of 1996 to $22.0 million, compared with $21.2 million in the prior-year
quarter. Total sales rose 53% to $506.7 million, compared with $332.0 million
in the third quarter of 1995. The growth in sales resulted from increased
accounts at both the national and local level, continued growth in BCOP's
direct marketing business, product line extensions, and acquisitions. Same
location sales increased 12% in the third quarter of 1996 compared with sales
in the third quarter of 1995. Gross margins were down in the third quarter of
1996 relative to the year-ago third quarter primarily because of continued
competitive pressures and sales growth in BCOP's computer consumables product
offering which has lower margins. For the third quarter of 1996, the gross
margin was 25.2% compared with 26.4% in the prior year third quarter.
Building products operating income decreased from $29.6 million for the year-
ago third quarter to $12.9 million in the third quarter of 1996. Results for
the quarter just ended were weaker than those of a year ago, largely because
of lower prices for plywood and residual wood chips. Relative to the year-ago
quarter, average prices for lumber increased 14%, while plywood prices
decreased 10%. Unit sales volumes for lumber and plywood sales volume
decreased 6% compared with the year-ago volumes. In the engineered wood
products business, sales increased 19% while the price for I-joists increased
3% compared with last year. Sales for the building products segment were
$426.2 million in the third quarter of 1996, about flat with the
$428.7 million reported in the third quarter of 1995. For the third quarter
of 1996, building materials distribution sales were up 20% from the comparison
quarter, while income was flat. The improvement in sales resulted primarily
from the addition of three new distribution centers purchased in 1996 and an
increase in housing starts.
In October 1994, Rainy River Forest Products Inc. ("Rainy River"), the
Company's former Canadian subsidiary, completed an initial public offering of
units of its equity and debt securities. As a result of the offering, the
Company owned 49% of the outstanding voting common shares and 60% of the total
equity of Rainy River. During 1995, Rainy River was accounted for on the
equity method in the Company's consolidated financial statements. For the
three and nine months ended September 30, 1995, Rainy River's results of
operations were included in "Equity in net income of affiliates." In November
1995, the Company divested its remaining interest in Rainy River through Rainy
River's merger with Stone-Consolidated Corporation.
Interest expense was $34.3 million in the third quarter of 1996, compared with
$33.1 million in the same period last year. The Company's debt is
predominately fixed rate. Consequently, when there are changes in short-term
market interest rates, the Company experiences only modest changes in interest
expense.
Nine Months Ended September 30, 1996, Compared With Nine Months Ended
September 30, 1995
The Company had net income of $6.9 million for the first nine months of 1996,
compared with net income of $281.4 million for the first nine months of 1995.
Primary and fully diluted loss per common share for the first nine months of
1996 were 47 cents. Primary earnings per common share for 1995 were $4.78 and
fully diluted earnings per common share were $4.32. Sales for the first nine
months of 1996 and 1995 were $3.8 billion.
In April 1995, the Company's wholly owned subsidiary, Boise Cascade Office
Products Corporation ("BCOP"), completed the initial public offering of
10,637,500 shares of common stock at a price of $12.50 per share. After the
offering, the Company owned 82.7% of the outstanding BCOP common stock. The
net proceeds of the offering to BCOP were approximately $123 million, of which
approximately $102 million was indirectly (through retention of accounts
receivable and a small dividend payment) available to the company for general
corporate purposes. The remainder of the proceeds was retained by BCOP for
its general corporate purposes.
From the BCOP offering, the Company recorded a gain of approximately
$60 million or 98 cents per fully diluted share in the second quarter of 1995.
In the third quarter of 1995, BCOP issued 890,610 shares of its stock to
effect various acquisitions. As a result of these share issuances, the
Company recorded a gain of $6.2 million or 10 cents per fully diluted share.
In 1996, BCOP issued 176,927 shares of its stock to effect various
acquisitions and for stock options exercised; as a result of these share
issuances, the Company recorded a gain of $2.5 million or 5 cents per fully
diluted share. In accordance with SFAS 109, Accounting for Income Taxes,
income taxes were not provided on the gains. At September 30, 1996, the
Company owned 81.2% of the outstanding BCOP common stock.
BCOP effected a two-for-one split of their common stock in the form of a 100%
stock dividend on May 20, 1996, to shareholders of record at the close of
business on May 6, 1996. All references to numbers of shares of common stock
of BCOP and common stock prices have been adjusted to reflect the stock split.
In the second quarter of 1995, the Company provided $32.5 million of income
taxes, or 53 cents per fully diluted share, for the tax effect of the
difference in the book and tax bases of its stock ownership in Rainy River,
the Company's former Canadian subsidiary. Also in the second quarter of 1995,
the Company established reserves for the write-down of certain assets in its
paper and paper products segment to their net realizable value with a pretax
charge of $19 million, or 19 cents per fully diluted share after taxes. The
Company also added to its existing reserves $5 million before taxes, or
5 cents per fully diluted share after taxes, for environmental and other
contingencies.
The net effect of the gain on the issuance of BCOP stock, the tax provision
for Rainy River, and the establishment of the above reserves increased net
income $18.8 million and fully diluted earnings per share 31 cents for the
nine months ended September 30, 1995.
Operating income in the Company's paper and paper products segment was
$48.3 million for the first nine months of 1996, compared with $394.3 million
for the first nine months of 1995. Included in the 1995 operating income is a
$19 million reserve for the write-down of certain paper-related assets.
Average prices for all of the Company's paper grades decreased sharply during
the first nine months of 1996, compared with a year ago.
Paper segment manufacturing costs for the first nine months of 1996 were $578
per ton compared with $573 per ton in the comparison period. The increase was
primarily due to higher fixed costs being spread over a smaller number of tons
of paper produced, offset, in part, by lower variable wood costs.
Paper segment sales declined 24% to $1.46 billion for the nine months ended
September 30, 1996, compared with sales of $1.93 billion for the nine months
ended September 30, 1995. Sales volumes for the first nine months of 1996
were 1,987,000 tons, compared with 2,207,000 tons for the first nine months of
1995.
Office products segment income for the first nine months of 1996 was
$74.5 million compared with $47.4 million reported for the first nine months
of 1995. Office products segment sales were up 52% to $1.43 billion for the
first nine months of 1996, compared with $941.0 million for the first nine
months of 1995. The growth in sales resulted from increased accounts at both
the national and local level, continued growth in BCOP's direct marketing
business, product line extensions, and acquisitions. Same location sales
increased 14%. Gross margins increased to 26.2% in the first nine months of
1996, from 25.0% in 1995. The increase in gross margins was primarily the
result of improved margins in office papers.
Operating income for the Company's Building Products segment dropped from
$75.9 million reported in the first nine months of 1995 to $20.1 million in
the first nine months of 1996. The decrease was mainly due to lower prices
for plywood and residual wood chips. Segment sales decreased 2% in the first
nine months of 1996 to $1.19 billion from $1.21 billion in the first nine
months of 1995. Plywood sales volumes were up 2% while lumber sales were down
3% compared to those of the same period last year. Building materials
distribution sales were up 16%, while income was up 19%. The improvement
resulted primarily from the addition of three new distribution centers
purchased in 1996 and an increase in housing starts.
Total long- and short-term debt outstanding was $2.1 billion at September 30,
1996, compared with $1.6 billion at December 31, 1995. The increase was
primarily the result of $95 million of long-term borrowings by the Company's
majority-owned subsidiary, Boise Cascade Office Products, and $277 million of
long-term debt outstanding under a loan agreement between a group of banks and
a wholly owned subsidiary.
Financial Condition
At September 30, 1996, the Company had working capital of $408.1 million.
Working capital was $303.6 million at September 30, 1995, and $543.3 million
at December 31, 1995. Cash provided by operations was $134.7 million for the
first nine months of 1996, compared with $475.4 million for the same period in
1995.
The Company's revolving credit agreement requires the Company to maintain a
minimum amount of net worth and not to exceed a maximum ratio of debt to net
worth. The Company's net worth at September 30, 1996, exceeded the defined
minimum amount by $121 million. The payment of dividends by the Company is
dependent upon the existence of and the amount of net worth in excess of the
defined minimum under this agreement. The Company is also required to
maintain a defined minimum interest coverage in each successive four-quarter
period. The Company met this requirement at September 30, 1996. In July
1996, Moody's Investors Service (Moody's) announced that it had placed the
credit ratings of the Company under review for possible downgrade. On
September 30, 1996, Moody's, as well as Standard and Poor's, confirmed the
Company's current investment grade debt ratings.
Capital expenditures for the first nine months of 1996 and 1995 were
$662.6 million and $232.7 million. Capital expenditures for the year ended
December 31, 1995, were $427.5 million. The increase in capital expenditures
is primarily due to acquisitions by the Company's majority-owned subsidiary,
Boise Cascade Office Products Corporation, and capital spending related to the
Jackson, Alabama, paper mill expansion.
On October 16, 1995, the Company announced its intent to form a joint venture
with Companhia Suzano de Papel e Celulose ("Suzano"), a Brazilian pulp and
paper producer, to acquire, operate, and expand the Company's pulp and paper
mill, timberlands, sawmill, and wastepaper recycling plant in Jackson,
Alabama. In April 1996, the Company announced that it had discontinued talks
with Suzano regarding formation of the joint venture. Regardless, the Company
will complete the expansion of the mill, including construction of a new
uncoated free sheet paper machine, which represents a $290 million capital
investment. The new paper machine should begin production in the second
quarter of 1997.
On November 1, 1996, the Company completed the sale of its coated publication
paper operations, consisting primarily of its pulp and paper mill in Rumford,
Maine, and 667,000 acres of timberland, to The Mead Corporation for
approximately $637 million in cash. Sales for the nine months ended
September 30, 1996, were $279 million, compared with $411 million in the same
period of the prior year. Sales for the year ended December 31, 1995, were
$526 million. Operating income for the nine months ended September 30, 1996
and 1995, was $31 million and $108 million, and $137 million for the year ended
December 31, 1995. After payment of certain related tax indemnification
requirements, the net cash proceeds from the sale will be used to reduce debt
and to improve the competitive position of the Company's remaining paper
business, representing a potential decrease in what annual interest expense
would otherwise be of more than $40 million. The transaction resulted in a
pretax gain of approximately $40 million, which was offset, in part, by
approximately $15 million of pretax expense arising from the related tax
indemnification requirements. The gain will be recorded in the fourth quarter
of 1996. (See "Item 5. Other Information" for pro forma data.)
An expanded discussion and analysis of financial condition is presented on
pages 18 and 19 of the Company's 1995 Annual Report under the captions
"Financial Condition" and "Capital Investment."
Market Conditions
The Company expects its paper business to remain sluggish until market
conditions improve further. The Company's office products distribution
business is expected to show higher operating income and the building products
business is likely to weaken seasonally in the fourth quarter.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Reference is made to the Company's quarterly report on Form 10-Q for the
quarter ended March 31, 1996, for information concerning certain legal
proceedings.
As reported in the Company's annual report on Form 10-K for the year ended
December 31, 1995, the Company has been notified that it is a "potentially
responsible party" under the Comprehensive Environmental Response,
Compensation and Liability Act (CERCLA) or similar federal and state laws with
respect to a number of sites where hazardous substances or other contaminants
are located. In 1993, the Company filed a lawsuit in State District Court in
Boise, Idaho, against its current and previous insurance carriers seeking
insurance coverage for response costs the Company has incurred or may incur at
these sites. The Company has settled with all carriers except the insolvent
London market carriers, where settlement negotiations are underway. The
Company anticipates dismissing this case when outstanding settlement proceeds
have been received. In the meantime, the court is holding the case in
abeyance. The Company cannot predict with certainty the total response and
remedial costs, the Company's share of the total costs, the extent to which
contributions will be available from other parties, or the amount of time
necessary to complete the cleanups. However, based on the Company's
investigations, the Company's experience with respect to cleanup of hazardous
substances, the fact that expenditures will, in many cases, be incurred over
extended periods of time, and the number of solvent potentially responsible
parties, the Company does not presently believe that the known actual and
potential response costs will, in the aggregate, have a material adverse
effect on its financial condition or the results of operations.
The Company is involved in other litigation and administrative proceedings
primarily arising in the normal course of its business. In the opinion of
management, the Company's recovery, if any, or the Company's liability, if
any, under any pending litigation or administrative proceedings, including
that described in the preceding paragraph, would not materially affect its
financial condition or operations.
Item 2. Changes in Securities
The payment of dividends by the Company is dependent upon the existence of and
the amount of net worth in excess of the defined minimum under the Company's
revolving credit agreement. At September 30, 1996, under this agreement, the
Company's net worth exceeded the defined minimum amount by $121 million.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 5. Other Information
Pro Forma Information
The following unaudited pro forma consolidated condensed balance sheet as
of September 30, 1996, and the unaudited pro forma consolidated statements
of income for the nine months ended September 30, 1996, and the twelve
months ended December 31, 1995, give effect to the following transaction:
On November 1, 1996, the Company completed the sale of its coated
publication paper operations, consisting primarily of its pulp and paper
mill in Rumford, Maine, and 667,000 acres of timberland, to The Mead
Corporation for approximately $637 million in cash (the "Sale"). After
payment of certain related tax indemnification requirements, the net cash
proceeds are assumed in these pro forma statements to be used to reduce the
Company's debt. The transaction resulted in a pretax gain of approximately
$40 million, which was offset, in part, by approximately $15 million of
pretax expense arising from the related tax indemnification requirements.
The unaudited pro forma consolidated income statements presented do not
include the nonrecurring effect of the gain from the Sale.
The unaudited pro forma consolidated financial information is presented as
if these transactions had been completed as of September 30, 1996, for the
pro forma consolidated condensed balance sheet and as of the first day of
each period for which pro forma consolidated statements of income are
presented. Amounts shown are based on preliminary closing information and
may change subject to purchase price adjustments. Any adjustments are not
expected to be significant to the pro forma financial position or pro forma
results of operations shown in this pro forma consolidated financial
information. The unaudited pro forma consolidated financial statements do
not necessarily represent the consolidated financial position and results
of operations that actually would have occurred for the periods presented
if the Company had completed the transaction on the date indicated and are
not necessarily indicative of the results of future operations.
Boise Cascade Corporation and Subsidiaries
Pro Forma Balance Sheet
September 30, 1996
(expressed in thousands)
(unaudited)
Historical Pro Forma
Boise Cascade Coated Boise Cascade
Corporation and Publication Pro Forma Corporation and
Subsidiaries Paper Operations Adjustments Subsidiaries
(Note 1) Increase (decrease)
(Notes 1 (Note 2)
and 2(a))
ASSETS
Current
Cash and cash items $ 55,945 $ - $ - $ 55,945
Short-term investments 2,233 - - 2,233
__________ __________ __________ __________
58,178 - - 58,178
Receivables, net 522,887 (41,459) - 481,428
Inventories 581,088 (77,785) - 503,303
Deferred income tax benefits 58,705 - - 58,705
Other 131,393 (2,972) (26,295)(b) 102,126
__________ __________ __________ __________
1,352,251 (122,216) (26,295) 1,203,740
__________ __________ __________ __________
Property
Property and equipment 5,209,187 (887,520) - 4,321,667
Accumulated depreciation (2,273,006) (463,985) - (1,809,021)
__________ __________ __________ __________
2,936,181 (423,535) - 2,512,646
Timber, timberlands, and timber
deposits 371,901 (71,222) - 300,679
__________ __________ __________ __________
3,308,082 (494,757) - 2,813,325
__________ __________ __________ __________
Investments in equity affiliates 38,607 (19,829) - 18,778
Other assets 445,047 (1,720) - 443,327
__________ __________ __________ __________
Total assets $5,143,987 $ (638,522) $ (26,295) $4,479,170
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Notes payable $ 94,300 $ - $ (57,000)(c) $ 37,300
Current portion of long-term debt 107,427 - - 107,427
Accounts payable 424,871 (20,302) - 404,569
Accrued liabilities 317,541 (21,530) 19,541 (b) 315,552
__________ __________ __________ __________
944,139 (41,832) (37,459) 864,848
__________ __________ __________ __________
Debt
Long-term debt, less current
portion 1,734,923 - (563,703)(c) 1,171,220
Guarantee of ESOP debt 210,453 - - 210,453
__________ __________ __________ __________
1,945,376 - (563,703) 1,381,673
__________ __________ __________ __________
Other
Deferred income taxes 270,558 - (36,471)(b) 234,087
Other long-term liabilities 238,530 - - 238,530
__________ __________ __________ __________
509,088 - (36,471) 472,617
__________ __________ __________ __________
Minority interest 76,481 - - 76,481
__________ __________ __________ __________
Shareholders' equity
Preferred stock 556,388 - - 556,388
Deferred ESOP benefit (210,453) - - (210,453)
Common stock 121,172 - - 121,172
Additional paid-in capital 230,655 - - 230,655
Retained earnings 971,141 - 14,648 (d) 985,789
__________ __________ __________ __________
Total shareholders' equity 1,668,903 - 14,648 1,683,551
__________ __________ __________ __________
Total liabilities and
shareholders' equity $5,143,987 $ (41,832) $ (622,985) $4,479,170
The accompanying notes are an integral part of this Pro Forma Financial Statement.
Boise Cascade Corporation and Subsidiaries
Pro Forma Statement of Income
Nine Months Ended September 30, 1996
(expressed in thousands, except earnings per share)
(unaudited)
Historical Pro Forma
Boise Cascade Coated Boise Cascade
Corporation and Publication Pro Forma Corporation and
Subsidiaries Paper Operations Adjustments Subsidiaries
(Note 1) Increase (decrease)
(Notes 1 (Note 3)
and 3(a))
Revenues
Sales $3,845,480 $ (278,711) $ - $3,566,769
Other income, net 7,170 (168) - 7,002
__________ __________ __________ __________
3,852,650 (278,879) - 3,573,771
__________ __________ __________ __________
Cost and expenses
Materials, labor, and other
operating expenses 3,145,020 (220,691) - 2,924,329
Depreciation and cost of company
timber harvested 174,160 (26,699) - 147,461
Selling and administrative
expenses 419,060 (3,602) - 415,458
__________ __________ __________ __________
3,738,240 (250,992) - 3,487,248
__________ __________ __________ __________
Equity in net income (loss)
of affiliates 2,800 (2,856) - (56)
__________ __________ __________ __________
Income from operations 117,210 (30,743) - 86,467
__________ __________ __________ __________
Interest expense (97,720) - (36,128)(b) (61,592)
Interest income 1,130 - - 1,130
Foreign exchange loss (830) - - (830)
Gain on subsidiary's issuance
of stock 2,450 - - 2,450
__________ __________ __________ __________
(94,970) - (36,128) (58,842)
__________ __________ __________ __________
Income before income taxes
and minority interest 22,240 (30,743) 36,128 27,625
Income tax provision 7,720 - 2,100 (c) 9,820
__________ __________ __________ __________
Income before minority interest 14,520 (30,743) 34,028 17,805
Minority interest, net of income
tax (7,610) - - (7,610)
__________ __________ __________ __________
Net income $ 6,910 $ (30,743) $ 34,028 $ 10,195
Primary net loss per share $ (.47) $ (.40)
Fully diluted net loss per share $ (.47) $ (.40)
Average primary common shares 48,211 48,211
Average fully diluted common shares 48,211 48,211
The accompanying notes are an integral part of this Pro Forma Financial Statement.
Boise Cascade Corporation and Subsidiaries
Pro Forma Statement of Income
Year Ended December 31, 1995
(expressed in thousands, except earnings per share)
(unaudited)
Historical Pro Forma
Boise Cascade Coated Boise Cascade
Corporation and Publication Pro Forma Corporation and
Subsidiaries Paper Operations Adjustments Subsidiaries
(Note 1) Increase (decrease)
(Notes 1 (Note 3)
and 3(a))
Revenues
Sales $5,074,230 $ (525,941) $ - $4,548,289
Other income (expense), net (16,560) (995) - (17,555)
__________ __________ __________ __________
5,057,670 (526,936) - 4,530,734
__________ __________ __________ __________
Cost and expenses
Materials, labor, and other
operating expenses 3,764,960 (349,211) - 3,415,749
Depreciation and cost of company
timber harvested 240,920 (40,852) - 200,068
Selling and administrative
expenses 436,260 (4,371) - 431,889
__________ __________ __________ __________
4,442,140 (394,434) - 4,047,706
__________ __________ __________ __________
Equity in net income
of affiliates 40,070 (4,110) - 35,960
__________ __________ __________ __________
Income from operations 655,600 (136,612) - 518,988
__________ __________ __________ __________
Interest expense (135,130) - (48,170)(b) (86,960)
Interest income 2,970 - - 2,970
Foreign exchange loss (300) - - (300)
Gain on subsidiary's issuance
of stock 66,270 - - 66,270
__________ __________ __________ __________
(66,190) - (48,170) (18,020)
__________ __________ __________ __________
Income before income taxes
and minority interest 589,410 (136,612) 48,170 500,968
Income tax provision 231,290 - (34,492)(c) 196,798
__________ __________ __________ __________
Income before minority interest 358,120 (136,612) 82,662 304,170
Minority interest, net of income
tax (6,260) - - (6,260)
__________ __________ __________ __________
Net income $ 351,860 $ (136,612) $ 82,662 $ 297,910
Primary net income per share $ 5.93 $ 4.95
Fully diluted net income per share $ 5.39 $ 4.51
Average primary common shares 55,028 55,028
Average fully diluted common shares 61,351 61,351
The accompanying notes are an integral part of this Pro Forma Financial Statement.
Boise Cascade Corporation
Notes to Pro Forma Financial Information
(unaudited)
1. Basis of Reporting
The following unaudited pro forma consolidated condensed balance sheet as
of September 30, 1996, and the unaudited pro forma consolidated statements
of income for the nine months ended September 30, 1996, and the twelve
months ended December 31, 1995, give effect to the following transaction:
On November 1, 1996, the Company completed the sale of its coated
publication paper operations, consisting primarily of its pulp and paper
mill in Rumford, Maine, and 667,000 acres of timberland, to The Mead
Corporation for approximately $637 million in cash (the "Sale"). After
payment of certain related tax indemnification requirements, the net cash
proceeds are assumed in these pro forma statements to be used to reduce the
Company's debt. The transaction resulted in a pretax gain of approximately
$40 million, which was offset, in part, by approximately $15 million of
pretax expense arising from the related tax indemnification requirements.
The unaudited pro forma consolidated income statements presented do not
include the nonrecurring effect of the gain from the Sale.
The unaudited pro forma consolidated financial information is presented as
if these transactions had been completed as of September 30, 1996, for the
pro forma consolidated condensed balance sheet and as of the first day of
each period for which pro forma consolidated statements of income are
presented. Amounts shown are based on preliminary closing information and
may change subject to purchase price adjustments. Any adjustments are not
expected to be significant to the pro forma financial position or pro forma
results of operations shown in this pro forma consolidated financial
information. The unaudited pro forma consolidated financial statements do
not necessarily represent the consolidated financial position and results
of operations that actually would have occurred for the periods presented
if the Company had completed the transaction on the date indicated and are
not necessarily indicative of the results of future operations.
2. Pro Forma Balance Sheet
The pro forma consolidated condensed balance sheet gives effect to the
adjustments described below:
(a) To delete the historical balances as of September 30, 1996,
related to the Sale.
(b) To record reclassifications from prepaid taxes and deferred
taxes to current taxes payable to reflect the taxes to be paid
resulting from the Sale.
(c) To record the Company's use of net cash proceeds from the Sale
to reduce notes payable and long-term debt.
(d) To record the net gain related to the Sale.
3. Pro Forma Statements of Income
The pro forma consolidated statements of income give effect to the
adjustments described below:
(a) To delete the historical amounts for the periods presented
related to the Sale.
(b) To record the reduction in interest expense resulting from
interest saved due to reducing debt by the amount of net cash
proceeds received from the Sale.
(c) To record the tax effects of the above adjustments.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
A list of the exhibits required to be filed as part of this
report is set forth in the Index to Exhibits, which immediately
precedes such exhibits and is incorporated herein by this
reference.
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the quarter ended
September 30, 1996.
SIGNATURES
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.
BOISE CASCADE CORPORATION
As Duly Authorized Officer and
Chief Accounting Officer: /s/Tom E. Carlile
Tom E. Carlile
Vice President and Controller
Date: November 13, 1996
BOISE CASCADE CORPORATION
INDEX TO EXHIBITS
Filed With the Quarterly Report on Form 10-Q
for the Quarter Ended September 30, 1996
Number Description Page Number
2 Acquisition Agreement Among Boise
Cascade Corporation, Oxford Paper
Company, Mead Oxford Corporation,
and The Mead Corporation dated
September 28, 1996
10.1 1983 Board of Directors Deferred
Compensation Plan, as amended through
July 26, 1996
10.2 1987 Board of Directors Deferred
Compensation Plan, as amended through
July 26, 1996
10.3 1984 Key Executive Stock Option Plan
and Form of Agreement, as amended
through July 25, 1996
10.4 Deferred Compensation and Benefits Trust,
as amended and restated as of July 26, 1996
12 Ratio of Earnings to Fixed Charges
27 Financial Data Schedule