UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 F O R M 10 - K (X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1996 Commission file number 1-5057 A Delaware BOISE CASCADE CORPORATION I.R.S. Employer Corporation 1111 West Jefferson Street Identification P.O. Box 50 No. 82-0100960 Boise, Idaho 83728-0001 (208)384-6161 Securities registered pursuant to Section 12(b) of the Act: Name of each exchange Title of each class on which registered Common Stock, $2.50 par value New York, Chicago, and Pacific Stock Exchanges American & Foreign Power Company Inc. Debentures, 5% Series due 2030 New York Stock Exchange Common Stock Purchase Rights New York, Chicago, and Pacific Stock Exchanges $2.35 Depositary Shares, evidenced by Depositary Receipts for Series F, Cumulative Preferred Stock New York Stock Exchange $1.58 Depositary Shares, evidenced by Depositary Receipts for Series G, Conversion Preferred Stock New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: Cumulative Preferred Stock, Series F Conversion Preferred Stock, Series G 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 by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K [ ]. The aggregate market value of the voting stock held by non-affiliates of the registrant, computed by reference to the price at which the stock was sold as of the close of business on February 28, 1997: $1,888,287,211 Indicate the number of shares outstanding of each of the registrant's classes of common stock as of the latest practicable date. Shares Outstanding Class as of February 28, 1997 Common Stock, $2.50 par value 48,521,410 Documents incorporated by reference 1. The registrant's annual report for the fiscal year ended December 31, 1996, portions of which are incorporated by reference into Parts I, II, and IV of this Form 10-K, and 2. Portions of the registrant's proxy statement relating to its 1997 annual meeting of shareholders to be held on April 18, 1997 ("the Company's proxy statement"), are incorporated by reference into Part III of this Form 10-K. BOISE CASCADE CORPORATION TABLE OF CONTENTS PART I Item Page 1. Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . 4. Submission of Matters to a Vote of Security Holders . . . . . . . . . PART II 5. Market for Registrant's Common Equity and Related Stockholder Matters . . . . . . . . . . . . . . . . . . . . . . . . 6. Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . 7. Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . . . . . . . 8. Financial Statements and Supplementary Data . . . . . . . . . . . . . 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure . . . . . . . . . . . . . . . . PART III 10. Directors and Executive Officers of the Registrant. . . . . . . . . . 11. Executive Compensation. . . . . . . . . . . . . . . . . . . . . . . . 12. Security Ownership of Certain Beneficial Owners and Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13. Certain Relationships and Related Transactions. . . . . . . . . . . . PART IV 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PART I Item 1. Business As used in this annual report, the term "Company" includes Boise Cascade Corporation and its consolidated subsidiaries and predecessors. The terms "Boise Cascade" and "Company" refer, unless the context otherwise requires, to Boise Cascade Corporation and its consolidated subsidiaries. Boise Cascade Corporation is an integrated paper and forest products company headquartered in Boise, Idaho, with domestic and international operations. The Company manufactures and distributes paper and wood products, distributes office products and building materials, and owns and manages 2.4 million acres of timberland. The Company was incorporated under the laws of Delaware in 1931 under the name Boise Payette Lumber Company of Delaware, as a successor to an Idaho corporation formed in 1913; in 1957, its name was changed to its present form. The Company is a participant with equity affiliates in connection with certain of its businesses. The Company's principal investments in affiliates include a 47% interest in Voyageur Panel and a 25% interest in Ponderosa Fibres of Washington. (See Note 8 of the Notes to Financial Statements of the Company's 1996 Annual Report. This information is incorporated herein by reference.) Financial information pertaining to each of the Company's industry segments and to each of its geographic areas for the years 1996, 1995, and 1994 is presented in Note 10, "Segment Information," of the Notes to Financial Statements of the Company's 1996 Annual Report and is incorporated herein by reference. The Company's sales and income are affected by the industry supply of product relative to the level of demand and by changing economic conditions in the markets it serves. Demand for paper and paper products and for office products correlates closely with real growth in the gross domestic product. Paper and paper products operations are also affected by demand in international markets and by inventory levels of users of these products. The Company's building products businesses are dependent on repair-and-remodel activity, housing starts, and commercial and industrial building, which in turn are influenced by the availability and cost of mortgage funds. Declines in building activity that may occur during winter affect the Company's building products businesses. In addition, energy and some operating costs may increase at facilities affected by cold weather. However, seasonal influences are generally not significant. The management practices followed by the Company with respect to working capital conform to those of the paper and forest products industry and common business practice in the United States. The Company engages in acquisition discussions with other companies and makes acquisitions from time to time. It is the Company's policy to review its operations periodically and to dispose of assets which fail to meet its criteria for return on investment or which cease to warrant retention for other reasons. (See Notes 1, 6, and 8 of the Notes to Financial Statements of the Company's 1996 Annual Report. This information is incorporated herein by reference.) Paper and Paper Products The products manufactured by the Company, made both from virgin and recycled fibers, include uncoated business, printing, forms, and converting papers; newsprint; containerboard; and market pulp. These products are available for sale to the related paper markets, and certain of these products are sold through the Company's office products distribution operations. In addition, containerboard is used by the Company in the manufacture of corrugated containers. In November 1996, the Company completed the sale of its coated publication paper business to The Mead Corporation. (See Note 1 of the Notes to Financial Statements of the Company's 1996 Annual Report. This information is incorporated herein by reference.) The Company is a major North American pulp and paper producer with five paper mills. The total annual practical capacity of the mills was approximately 2.6 million tons at December 31, 1996. The Company's products are sold to distributors and industrial customers primarily by its own sales personnel. The Company's paper mills are supplied with pulp principally from the Company's own integrated pulp mills. Pulp mills in the Northwest manu- facture chemical pulp primarily from wood waste produced as a byproduct of wood products manufacturing. Pulp mills in the Midwest and South manufacture chemical, thermomechanical, and groundwood pulp mainly from pulpwood logs and, to some extent, from purchased wood waste and pulp from deinked recycled fiber. Wood waste is provided by Company sawmills and plywood mills in the Northwest and, to a lesser extent, in the South, and the remainder is purchased from outside sources. 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. Rainy River was accounted for on the equity method retroactive to January 1, 1994, in the Company's consolidated financial statements, and its results of operations were included in "Equity in net income (loss) of affiliates." In November 1995, the Company divested its remaining interest in Rainy River through Rainy River's merger with Stone-Consolidated Corporation and received cash of approximately $183,482,000 and Stone- Consolidated stock. The Company used the proceeds from this transaction to reduce debt. In 1996, the Company sold the Stone-Consolidated stock for $133,628,000. (See Note 8 of the Notes to Financial Statements of the Company's 1996 Annual Report. This information is incorporated herein by reference.) The Company currently manufactures corrugated containers at seven plants, which have annual practical capacity of approximately 4.8 billion square feet. The containers produced at the Company's plants are used to package fresh fruit and vegetables, processed food, beverages, and many other industrial and consumer products. The Company sells its corrugated containers primarily through its own sales personnel. The Company also has a wave flute facility which became operational in 1996. Wave flute is a substitute for many standard corrugated products. When at capacity, the facility will be capable of producing approximately 700 million square feet annually. The following table sets forth sales volumes of paper and paper products for the years indicated: 1996 1995 1994 1993 1992 Paper (thousands of short tons) Uncoated free sheet 1,167 1,177 1,271 1,215 1,110 Containerboard 563 602 595 559 560 Newsprint(1) 411 416 415 860 831 Market pulp 230 217 212 205 260 Discontinued grades(1) 260 428 447 717 716 ______ ______ ______ ______ ______ 2,631 2,840 2,940 3,556 3,477 (millions of square feet) Corrugated Containers(2) 3,201 3,114 3,237 2,961 4,715 (1) Newsprint for 1996, 1995, and 1994 excludes production from Rainy River, which was reported on the equity method from January 1, 1994, through November 1, 1995. On November 1, 1995, Rainy River merged with Stone-Consolidated Corporation. The Company's coated publication paper business was sold November 1, 1996. (2) In mid-1992, the Company sold 11 of its corrugated container plants. Office Products In April 1995, the Company's wholly owned subsidiary, Boise Cascade Office Products Corporation ("BCOP"), completed an initial public offering of 10,637,500 shares of common stock at a price of $12.50 per share (after giving effect to a two-for-one stock split in the form of a dividend in May 1996). After the offering, the Company owned 82.7% of BCOP's outstanding common stock. At December 31, 1996, the Company owned approximately 80.9% of BCOP's outstanding common stock. (See Note 6 of the Notes to Financial Statements of the Company's 1996 Annual Report. This information is incorporated herein by reference.) BCOP distributes a broad line of items for the office, including office and computer supplies and furniture, paper products, and promotional products. All of the products sold by this segment are purchased from other manufacturers or from industry wholesalers, except copier and similar papers which are sourced primarily from Boise Cascade's paper operations. BCOP sells these office products directly to corporate, government, and other offices in the United States, Canada, and Australia, as well as to individuals, home offices, and small- and medium-sized offices in the United States and the United Kingdom. Customers with multisite locations across the country are often serviced via national contracts that provide consistent pricing and product offerings and, if desired, summary billings, usage reporting, and other special services. At February 28, 1997, BCOP operated 65 distribution centers. During 1996, BCOP completed acquisitions of 19 businesses located in Australia, Canada, Maine, Michigan, New Mexico, Oklahoma, Oregon, Tennessee, Vermont, Washington, and Wisconsin. BCOP also operates four retail office supply stores in Hawaii and approximately 70 retail stores in Canada. The following table sets forth sales dollars for BCOP for the years indicated: 1996 1995 1994 1993 1992(1) Sales (millions) $1,986 $1,316 $ 909 $ 683 $ 672 (1) Early in 1992, BCOP sold essentially all of its wholesale office products distribution operations, enabling it to focus on the consumer channel. Building Products The Company is a major producer of lumber, plywood, and particleboard, together with a variety of specialty wood products. The Company also manufactures engineered wood products consisting of laminated veneer lumber (LVL), which is a high-strength engineered structural lumber product, and wood I-joists that incorporate the LVL technology. Most of the Company's production is sold to independent wholesalers and dealers and through the Company's own wholesale building materials distribution outlets. The Company's wood products are used primarily in housing, industrial construction, and a variety of manufactured products. Wood products manufacturing sales for 1996, 1995, and 1994 were $867 million, $977 million, and $997 million. The following table sets forth annual practical capacities of the Company's wood products facilities as of December 31, 1996: Number of Mills Practical Capacity (millions) Plywood 12 1,970 square feet (3/8" basis) Lumber 11 705 board feet Particleboard 1 196 square feet (3/4" basis) Engineered Wood Products(1)(2) 2 10.4 cubic feet (1) In late 1996, the Company completed construction of an LVL plant in Alexandria, Louisiana. When fully operational, the plant will have 4.4 million cubic feet of annual capacity. (2) In 1995, the Company formed a joint venture to build an oriented strand board (OSB) plant in Barwick, Ontario, Canada. The Company owns 47% of the joint venture. The plant, with 400 million square feet of annual capacity, will begin production in 1997. The Company operates 14 wholesale building materials distribution facilities. In 1996, the Company acquired facilities in Oklahoma and Texas and started up a facility in New Mexico. These operations market a wide range of building materials, including lumber, plywood, particleboard, engineered wood products, paneling, molding, windows, doors, builders' hardware, and related products. These products are distributed to retail lumber dealers, home centers specializing in the do-it-yourself market, and industrial customers. A portion (approximately 30% in 1996) of the wood products required by the Company's Building Materials Distribution Division is provided by the Company's manufacturing facilities, and the balance is purchased from outside sources. The following table sets forth sales volumes of wood products and sales dollars for engineered wood products and the building materials distribution business for the years indicated: 1996 1995 1994 1993 1992 (millions) Plywood (square feet - 3/8" basis) 1,873 1,865 1,894 1,760 1,788 Lumber (board feet) 692 711 754 760 805 Particleboard (square feet - 3/4" basis) 195 196 194 182 186 LVL (cubic feet) 2.2 1.8 1.4 1.1 .9 I-joists (eq. lineal feet) 74 61 55 49 34 Building materials distribution (sales dollars) $690 $598 $657 $590 $447 Timber Resources Boise Cascade owns and manages approximately 2.4 million acres of timberland in North America. The amount of timber harvested each year by the Company from its timber resources, compared with the amount it purchases from outside sources, varies according to the price and supply of timber for sale on the open market and according to what the Company deems to be in the interest of sound management of its timberlands. During 1996, the Company's mills processed approximately 1.1 billion board feet of sawtimber and 1.4 million cords of pulpwood; 33% of the sawtimber and 41% of the pulpwood were harvested from the Company's timber resources, and the balance was acquired from various private and government sources. Approximately 78% of the 805,000 bone-dry units of hardwood and softwood chips consumed by the Company's Northwest pulp and paper mills in 1996 were provided from a whole-log chipping facility and the Company's Northwest wood products manufacturing facilities as residuals from the processing of solid wood products. Of the 672,000 bone-dry units of residual chips used in the South, 39% were provided by the Company's Southern wood products manufacturing facilities. At December 31, 1996, the acreages of owned or controlled timber resources by geographic area and the approximate percentages of total fiber requirements available from the Company's respective timber resources in these areas and from the residuals from processed purchased logs are shown in the following table: Northwest Midwest South Total (thousands of acres) Fee 1,328 308 419 2,055 Leases and contracts 51 - 290 341 ______ ______ ______ ______ Total 1,379(1) 308(2) 709(3) 2,396(4) Approximate percentage of total fiber requirements available from: (5) Owned and controlled timber resources 21% 23% 25% 23% Residuals from processed purchased logs 14 - 6 9 ______ ______ ______ ______ Total 35% 23% 31% 32% (1) Principally sawtimber. (2) Principally pulpwood. (3) Sawtimber and pulpwood. (4) On December 31, 1996, the Company's inventory of merchantable sawtimber was approximately 7.6 billion board feet, and its inventory of pulpwood was approximately 7.6 million cords. (5) Assumes harvesting of Company-owned and controlled timber resources on a sustained timber yield basis and operation of the Company's paper and wood products manufacturing facilities at practical capacity. Percentages shown represent weighted average consumption on a cubic volume basis. Long-term leases generally provide the Company with timber harvesting rights and carry with them the responsibility for management of the timberlands. The average remaining life of all leases and contracts is in excess of 40 years. In addition, the Company has an option to purchase approximately 203,000 acres of timberland it currently has under leases and contracts in the South. The Company seeks to maximize the utilization of its timberlands through efficient management so that the timberlands will provide a continuous supply of wood for future needs. Site preparation, planting, fertilizing, thinning, and logging techniques are continually improved through a variety of methods, including genetic research and computerization. The Company assumes substantially all risks of loss from fire and other casualties on all the standing timber it owns, as do most owners of timber tracts in the U.S. Additional information pertaining to the Company's timber resources is presented under the caption "Timber Supply" of the Financial Review of the Company's 1996 Annual Report. This information is incorporated herein by reference. Competition The markets served by the Company are highly competitive, with a number of substantial companies operating in each. The Company competes in its markets principally through price, service, quality, and value-added products and services. Environmental Issues The Company's discussion of environmental issues is presented under the caption "Environmental Issues" of the Financial Review of the Company's 1996 Annual Report. This information is incorporated herein by reference. Employees As of December 31, 1996, the Company and its subsidiaries had 19,976 employees, 6,280 of whom were covered under collective bargaining agreements. Major negotiations concluded in 1996 included a new five-year contract expiring in 2001 at the Company's wood products facilities in Oakdale, Louisiana; Florein, Louisiana; and Fisher, Louisiana. No major negotiations are scheduled for 1997. Identification of Executive Officers Information with respect to the Company's executive officers is set forth in Item 10 of this Form 10-K and is incorporated into this Part I by reference. Capital Investment The Company's capital expenditures in 1996 were $832 million, compared with $428 million in 1995 and $272 million in 1994. Details of 1996 spending by segment and by type are as follows: Replacement, Quality/ Timber and Environmental, Expansion Efficiency(1)Timberlands and Other Total (expressed in millions) Paper and paper products$ 301 $ 81 $ - $ 88 $ 470 Office products(2) 227 20 - 18 265 Building products 54 15 - 16 85 Timber and timberlands - - 6 - 6 Other 1 - - 5 6 _____ _____ _____ _____ _____ Total $ 583 $ 116 $ 6 $ 127 $ 832 (1) Quality and efficiency projects include quality improvements, modernization, energy, and cost-saving projects. (2) Capital expenditures include acquisitions made by BCOP through the issuance of common stock and the recording of liabilities. The level of capital investment in 1997 is expected to be about $350 million, excluding acquisitions, and will be allocated to cost-saving, modernization, expansion, replacement, maintenance, environmental, and safety projects. Energy The paper and paper products segment is the Company's primary energy user. Self-generated energy sources in this segment, such as wood wastes, pulping liquors, and hydroelectric power, provided 53% of total 1996 energy requirements, compared with 52% in 1995 and 59% in 1994. The energy requirements fulfilled by purchased sources in 1996 were as follows: natural gas, 25%; electricity, 11%; residual fuel oil, 4%; and other sources, 7%. Item 2. Properties The Company owns substantially all of its nonoffice products operating facilities. Regular maintenance, renewal, and new construction programs have preserved the operating suitability and adequacy of those properties. The majority of the office products facilities are rented under operating leases. The Company owns substantially all equipment used in its facilities. Following is a list of the Company's facilities by segment as of December 31, 1996, except for Office Products which is as of February 28, 1997. Information concerning timber resources is presented in Item 1 of this Form 10-K. Paper and Paper Products 5 pulp and paper mills located in Alabama, Louisiana, Minnesota, Oregon, and Washington. In 1996, the Company sold its mill in Rumford, Maine. 6 regional service centers located in California, Georgia, Illinois, New Jersey, Oregon, and Texas. 2 converting facilities located in Oregon and Washington. In 1996, the Company completed the reconfiguration of its Vancouver, Washington, mill by shutting down the mill and operating it as a paper converting facility. 7 corrugated container plants located in Idaho (2), Nevada, Oregon, Utah, and Washington (2). 1 wave flute facility located in California. Office Products 65 distribution centers located in Arizona, Australia (8), California (2), Canada (9), Colorado, Connecticut, Delaware, Florida (3), Georgia, Hawaii, Idaho, Illinois, Kentucky, Maine, Maryland, Massachusetts, Michigan (3), Minnesota, Missouri (2), Montana, Nevada (2), New Jersey, New Mexico, New York, Ohio (2), Oklahoma, Oregon (2), Pennsylvania (2), South Carolina, Tennessee, Texas (2), United Kingdom, Utah, Vermont, Virginia, Washington (3), and Wisconsin. Approximately 74 retail outlets located in Canada and Hawaii. Building Products 11 sawmills located in Alabama, Idaho (2), Louisiana, Oregon (4), and Washington (3). 12 plywood and veneer plants located in Idaho, Louisiana (2), Oregon (7), and Washington (2). 1 particleboard plant located in Oregon. 2 engineered wood products plants located in Louisiana and Oregon. 1 wood beam plant located in Idaho. 14 wholesale building materials units located in Arizona, Colorado (2), Idaho (2), Montana, New Mexico, Oklahoma, Texas, Utah, and Washington (4). Item 3. Legal Proceedings 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. Payment from the last defendants in the lawsuit has been received, and the Company filed a motion to dismiss the case in its entirety on December 26, 1996. This does not affect proceedings against the insolvent London carriers because they were not defendants in the case due to their insolvency. 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. On March 12, 1996, a lawsuit purporting to be a nationwide class action was filed against the Company in the Fourth Judicial District Court, Ada County, Idaho. This lawsuit alleges, among other allegations, that hardboard siding manufactured by the Company, which was used as exterior cladding for buildings, was inherently defective. The purported class, which has not been certified, is alleged to consist of all owners of buildings or structures in the United States on which hardboard siding manufactured by the Company is installed. The Complaint seeks, among other items, to declare the Company financially responsible for the repair and replacement of all such siding, to make restitution to the class members, and to award each class member compensatory and punitive damages. The Company discontinued manufacturing the hardboard siding product which is the subject of this litigation in 1984. The Company believes that there are valid factual and legal defenses to this case and will vigorously defend all claims asserted by the Plaintiffs. The Company is presently negotiating a consent decree, which will probably be signed in the first quarter of 1997, with the U.S. Environmental Protection Agency, Region IV, to implement a remedy for environmental contamination at the THAN National Priorities List Site near Albany, Georgia. The total remedial cost is estimated at $2.5 million, of which 80- 85% will be the Company's approximate share. In August 1996, the Company paid $280,000 to the City of Salem, Oregon, as final settlement of the Company's share of environmental costs arising at the former Salem pulp and paper mill. The Company is involved in other litigation and administrative proceedings 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 proceeding, including those described in the preceding paragraphs, would not materially affect its financial condition or operations. Item 4. Submission of Matters to a Vote of Security Holders No matters were submitted to a vote of shareholders during the fourth quarter of 1996. PART II Item 5. Market for Registrant's Common Equity and Related Stockholder Matters The Company's common stock is listed on the New York, the Chicago, and the Pacific Stock Exchanges. The high and low sales prices for the Company's common stock, as well as the frequency and amount of dividends paid on such stock, is included in Note 11, "Quarterly Results of Operations (unaudited)," of the Notes to Financial Statements in the Company's 1996 Annual Report. Additional information concerning dividends on common stock is presented under the caption "Dividends" of the Financial Review section of the Company's 1996 Annual Report, and information concerning restrictions on the payments of dividends is included in Note 3, "Debt," of the Notes to Financial Statements in the Company's 1996 Annual Report. The approximate number of common shareholders, based upon actual record holders at year-end, is presented under the caption "Financial Highlights" of the Company's 1996 Annual Report. The information under these captions is incorporated herein by reference. Shareholder Rights Plan Pursuant to the shareholder rights plan adopted in December 1988 and as amended in September 1990, holders of common stock received a distribution of one right for each common share held. The rights become exercisable ten days after a person or group acquires 15% of the Company's outstanding voting securities or ten business days after a person or group commences or announces an intention to commence a tender or exchange offer that could result in the acquisition of 15% of these securities. If a person acquires 15% or more of the Company's outstanding voting securities, on the tenth day thereafter, unless this time period is extended by the board of directors, each right would, subject to certain adjustments and alternatives, entitle the rightholder to purchase common stock of the Company or the acquiring company having a market value of twice the $175 exercise price of the right (except that the acquiring person or group and other related holders would not be able to purchase common stock of the Company on these terms). The rights are nonvoting, may be redeemed by the Company at a price of 1 cent per right at any time prior to the tenth day after an individual or group acquires 15% of the Company's voting stock, unless extended, and expire in 1998. Additional details are set forth in the Amended and Restated Rights Agreement filed with the Securities and Exchange Commission as Exhibit 1 in the Company's Form 8-K dated September 25, 1990. Item 6. Selected Financial Data The following table sets forth selected financial data of the Company for the years indicated and should be read in conjunction with the disclosures in Item 7 and Item 8 of this Form 10-K: 1996 1995 1994 1993 1992 (expressed in millions, except per-common-share amounts) Assets Current assets $1,355 $1,313 $ 918 $ 887 $ 866 Property and equipment, net 2,554 2,604 2,494 3,010 3,067 Other 802 739 882 616 627 ______ ______ ______ ______ ______ $4,711 $4,656 $4,294 $4,513 $4,560 Liabilities and Shareholders' Equity Current liabilities $ 933 $ 770 $ 658 $ 688 $ 750 Long-term debt, less current portion 1,330 1,365 1,625 1,593 1,680 Guarantee of ESOP debt 196 214 231 247 262 Minority interest 82 68 - - - Other 490 545 415 480 510 Shareholders' equity 1,680 1,694 1,365 1,505 1,358 ______ ______ ______ ______ ______ $4,711 $4,656 $4,294 $4,513 $4,560 Net sales $5,108 $5,074 $4,140 $3,958 $3,716 Income (loss) before accounting change 9 352 (63) (77) (154) Net income (loss) 9 352 (63) (77) (227) Net income (loss) per common share Primary Income (loss) before accounting change $ (.63) $ 5.93 $(3.08) $(3.17) $(4.79) Effect of net accounting change (1) - - - - (1.94) ______ ______ ______ ______ ______ $ (.63) $ 5.93 $(3.08) $(3.17) $(6.73) Fully diluted (2) Income (loss) before accounting change $ (.63) $ 5.39 $(3.08) $(3.17) $(4.79) Effect of net accounting change (1) - - - - (1.94) ______ ______ ______ ______ ______ $ (.63) $ 5.39 $(3.08) $(3.17) $(6.73) Cash dividends declared per common share $ .60 $ .60 $ .60 $ .60 $ .60 (1) Consists of a one-time noncash charge of $73 million, or $1.94 per share, for the adoption of Financial Accounting Standards Board requirements to accrue postretirement benefits other than pensions. (2) The computation of fully diluted net loss per common share was antidilutive in the years 1996, 1994, 1993, and 1992; therefore, the amounts reported for primary and fully diluted loss per share are the same. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Management's discussion and analysis of financial condition and results of operations are presented under the caption "Financial Review" of the Company's 1996 Annual Report and are incorporated herein by reference. On March 11, 1997, the Company signed a new revolving credit agreement with a group of banks. The new agreement allows the Company to borrow as much as $600 million at variable interest rates based on customary indices, and expires in June 2002. The revolving credit agreement contains financial covenants relating to minimum net worth, minimum interest coverage ratios, and ceiling ratios of debt to capitalization. The new agreement replaces the Company's previous $600 million revolving credit agreement that would have expired in June 2000. Item 8. Financial Statements and Supplementary Data The Company's consolidated financial statements and related notes, together with the report of the independent public accountants, are presented in the Company's 1996 Annual Report and are incorporated herein by reference. Selected quarterly financial data is presented in Note 11, "Quarterly Results of Operations (unaudited)," of the Notes to Financial Statements in the Company's 1996 Annual Report and is incorporated herein by reference. The consolidated income statement for the three months ended December 31, 1996, is presented in the Company's Fact Book for the fourth quarter of 1996 and is incorporated herein by reference. The 10.125% Notes issued in December 1990, the 9.85% Notes issued in June 1990, the 9.9% Notes issued in March 1990, and the 9.45% Debentures issued in October 1989 each contain a provision under which in the event of the occurrence of both a designated event, as defined, and a rating decline, as defined, the holders of these securities may require the Company to redeem the securities. Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure Not applicable. PART III Item 10. Directors and Executive Officers of the Registrant Directors The directors and nominees for directors of the Company are presented under the caption "Election of Directors" in the Company's proxy statement. This information is incorporated herein by reference. Executive Officers as of February 28, 1997 Date First Elected as Name Age Position or Office an Officer George J. Harad(1) 52 Chairman of the Board and Chief Executive Officer 5/11/82 Peter G. Danis Jr.(2) 65 Executive Vice President 7/26/77 Theodore Crumley 51 Senior Vice President and Chief Financial Officer 5/10/90 A. Ben Groce 55 Senior Vice President 2/8/91 John W. Holleran 42 Senior Vice President and General Counsel 7/30/91 Terry R. Lock 55 Senior Vice President 2/17/77 Richard B. Parrish 58 Senior Vice President 2/27/80 N. David Spence 61 Senior Vice President 12/8/87 A. James Balkins III 44 Vice President and Corporate Secretary 9/5/91 J. Ray Barbee 49 Vice President 9/26/89 Stanley R. Bell 50 Vice President 9/25/90 John C. Bender 56 Vice President 2/13/90 Charles D. Blencke 53 Vice President 12/11/92 Tom E. Carlile 45 Vice President and Controller 2/4/94 J. Michael Gwartney 56 Vice President 4/25/89 Vincent T. Hannity 52 Vice President 7/26/96 H. John Leusner 61 Vice President 12/11/92 Irving Littman 56 Vice President and Treasurer 11/1/84 Jeffrey G. Lowe 55 Vice President 12/11/92 Christopher C. Milliken(3) 51 Vice President 2/3/95 Carol B. Moerdyk(4) 46 Vice President 5/10/90 Terry M. Plummer 43 Vice President 9/28/95 J. Kirk Sullivan 61 Vice President 9/30/81 Gary M. Watson 49 Vice President 2/5/93 (1) Chairman of the Board, Boise Cascade Office Products Corporation (2) President and Chief Executive Officer, Boise Cascade Office Products Corporation (3) Senior Vice President, Operations, Boise Cascade Office Products Corporation (4) Senior Vice President, Chief Financial Officer and Treasurer, Boise Cascade Office Products Corporation All of the officers named above, except Gary M. Watson, have been employees of the Company or one of its subsidiaries for at least five years. Mr. Watson joined the Company in 1992 as director of its Paper Research and Development Center in Portland, Oregon. Alice E. Hennessey, senior vice president, retired from her position with the Company effective August 1, 1996. Gary M. Curtis, vice president, resigned from his position with the Company effective November 1, 1996. Donald F. Smith, vice president, retired from his position with the Company effective December 31, 1996. D. Ray Ryden, vice president, retired from his position with the Company effective February 28, 1997. John W. Holleran was elected senior vice president and general counsel in July 1996. In 1976, Mr. Holleran received a B.A. degree in Political Science and Sociology from Gonzaga University. In 1979, he received his J.D. from the Gonzaga University School of Law. In 1990, Mr. Holleran attended the Stanford Executive Program at Stanford University. He joined the Company's legal department in 1979. Vincent T. Hannity was elected a vice president in July 1996. In 1967, Mr. Hannity received a B.A. degree from Gonzaga University. In 1989, he attended the Stanford University Executive Program. Mr. Hannity joined the Company in 1981. Mr. Hannity's current position is Vice President of Corporate Communications and Investor Relations. Item 11. Executive Compensation Information concerning compensation of the Company's executive officers for the year ended December 31, 1996, is presented under the caption "Compensation Tables" in the Company's proxy statement. This information is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management (a) Information concerning the security ownership of certain benefi- cial owners as of December 31, 1996, is set forth under the caption "Beneficial Ownership" in the Company's proxy statement and is incorporated herein by reference. (b) Information concerning security ownership of management as of December 31, 1995, is set forth under the caption "Security Ownership of Directors and Executive Officers" in the Company's proxy statement and is incorporated herein by reference. (c) Information concerning compliance with Section 16 of the Securities and Exchange Act of 1934 is set forth under the caption "Section 16(a) Beneficial Ownership Reporting Compliance" in the Company's proxy statement and is incorporated herein by reference. Item 13. Certain Relationships and Related Transactions Information concerning certain relationships and related transactions during 1996 is set forth under the caption "Consulting and Legal Services" in the Company's proxy statement and is incorporated herein by reference. PART IV Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K (a) The following documents are filed as a part of this Form 10-K for the Company: (1) Financial Statements (i) The Income Statement for the three months ended December 31, 1996, is incorporated herein by reference from the Company's Fact Book for the fourth quarter of 1996. (ii) The Financial Statements, the Notes to Financial Statements, and the Report of Independent Public Accountants listed below are incorporated herein by reference from the Company's 1996 Annual Report. - Balance Sheets as of December 31, 1996 and 1995. - Statements of Income (Loss) for the years ended December 31, 1996, 1995, and 1994. - Statements of Cash Flows for the years ended December 31, 1996, 1995, and 1994. - Statements of Shareholders' Equity for the years ended December 31, 1996, 1995, and 1994. - Notes to Financial Statements. - Report of Independent Public Accountants. (2) Financial Statement Schedules. None required. (3) 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 reference. (b) Reports on Form 8-K. No Form 8-K's were filed during the fourth quarter of 1996. (c) Exhibits. See Index to Exhibits. For the purpose of complying with the rules governing Form S-8 under the Securities Act of 1933, the undersigned registrant hereby undertakes as follows, which undertaking shall be incorporated by reference into registrant's Registration Statements on Form S-8 Nos. 33-28595 (filed May 8, 1989), 33-21964 (filed June 6, 1988), 33-31642 (filed November 7, 1989), 33-45675 (filed February 12, 1992), 33-62263 (filed August 31, 1995), and 333-22707 (filed March 4, 1997). Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers, and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer, or controlling person of the registrant in the successful defense of any action, suit, or proceeding) is asserted by such director, officer, or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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 By George J. Harad George J. Harad Chairman of the Board and Chief Executive Officer Dated: March 17, 1997 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on March 17, 1997. Signature Capacity (i) Principal Executive Officer: George J. Harad Chairman of the Board and George J. Harad Chief Executive Officer (ii) Principal Financial Officer: Theodore Crumley Senior Vice President and Theodore Crumley Chief Financial Officer (iii) Principal Accounting Officer: Tom E. Carlile Vice President Tom E. Carlile and Controller (iv) Directors: George J. Harad Paul J. Phoenix George J. Harad Paul J. Phoenix Anne L. Armstrong A. William Reynolds Anne L. Armstrong A. William Reynolds Robert E. Coleman Jane E. Shaw Robert E. Coleman Jane E. Shaw Robert K. Jaedicke Frank A. Shrontz Robert K. Jaedicke Frank A. Shrontz Donald S. Macdonald Edson W. Spencer Donald S. Macdonald Edson W. Spencer James A. McClure Ward W. Woods, Jr. James A. McClure Ward W. Woods, Jr. CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we consent to the incorporation of our report dated January 28, 1997, included or incorporated by reference in this Form 10-K for the year ended December 31, 1996, into Boise Cascade Corporation's previously filed post-effective amendment No. 1 to Form S-8 registration statement (File No. 33-28595); post-effective amendment No. 1 to Form S-8 registration statement (File No. 33-21964); the registration statement on Form S-8 (File No. 33-31642); the registration statement on Form S-8 (File No. 33-45675); the registration statement on Form S-3 (File No. 33-54533); the registration statement on Form S-3 (File No. 33-55396); the registration statement on Form S-8 (File No. 33-62263); and the registration statement on Form S-8 (File No. 333-22707). ARTHUR ANDERSEN LLP Boise, Idaho March 17, 1997 BOISE CASCADE CORPORATION INDEX TO EXHIBITS Filed with the Annual Report on Form 10-K for the Year Ended December 31, 1996 Page Number Description Number 2 (1) Acquisition Agreement Among Boise Cascade Corporation, Oxford Paper Company, Mead Oxford Corporation, and The Mead Corporation, dated September 28, 1996 - 3.1 (2) Restated Certificate of Incorporation, as restated to date - 3.2 (3) Bylaws, as amended, September 29, 1994 - 4.1 (4) Trust Indenture between Boise Cascade Corporation and Morgan Guaranty Trust Company of New York, Trustee, dated October 1, 1985, as amended - 4.2 1997 Revolving Credit Agreement -- $600,000,000, dated as of March 11, 1997 4.3 (5) Shareholder Rights Plan, as amended September 25, 1990 - 9 Inapplicable - 10.1 (6) Key Executive Performance Plan for Executive Officers, as amended through December 7, 1995 - 10.2 (6) 1986 Executive Officer Deferred Compensation Plan, as amended through December 7, 1995 - 10.3 (7) 1983 Board of Directors Deferred Compensation Plan, as amended through July 26, 1996 - 10.4 (6) 1982 Executive Officer Deferred Compensation Plan, as amended through December 7, 1995 - 10.5 (8) Executive Officer Severance Pay Policy - 10.6 (6) Supplemental Early Retirement Plan for Executive Officers, as amended through December 7, 1995 - 10.7 (9) Boise Cascade Corporation Supplemental Pension Plan, effective as of January 1, 1994 - 10.8 (7) 1987 Board of Directors Deferred Compensation Plan, as amended through July 26, 1996 - 10.9 (7) 1984 Key Executive Stock Option Plan and Form of Agreement, as amended through July 25, 1996 - 10.10 (8) Executive Officer Group Life Insurance Plan description - 10.11 (6) Executive Officer 1980 Split-Dollar Life Insurance Plan, as amended through December 7, 1995 - 10.12 (6) Forms of Agreements with Executive Officers, as amended through December 7, 1995 - 10.13 Supplemental Health Care Plan for Executive Officers, as revised July 31, 1996 10.14 (8) Nonbusiness Use of Corporate Aircraft Policy, as amended - 10.15 (8) Executive Officer Financial Counseling Program description - 10.16 (8) Family Travel Program description - 10.17 (8) Form of Directors' Indemnification Agreement - 10.18 Deferred Compensation and Benefits Trust, as amended and restated as of December 13, 1996 10.19 (6) Director Stock Compensation Plan, as amended through December 7, 1995 - 10.20 (6) Boise Cascade Corporation Director Stock Option Plan, as amended through December 7, 1995 - 10.21 (6) 1995 Executive Officer Deferred Compensation Plan, effective January 1, 1996 - 10.22 (6) 1995 Board of Directors Deferred Compensation Plan, effective January 1, 1996 - 10.23 (6) Boise Cascade Corporation 1995 Split-Dollar Life Insurance Plan, as amended through December 7, 1995 - 10.24 1996 and 1997 Performance Criteria for the Key Executive Performance Plan for Executive Officers 11 Computation of Per Share Earnings 12 Ratio of Earnings to Fixed Charges 13.1 Incorporated sections of the Boise Cascade Corporation 1996 Annual Report 13.2 Incorporated sections of the Boise Cascade Corporation Fact Book for the fourth quarter of 1996 16 Inapplicable - 18 Inapplicable - 21 Significant subsidiaries of the registrant 22 Inapplicable - 23 Consent of Arthur Andersen LLP (See page 19) - 24 Inapplicable - 27 Financial Data Schedule 99 Inapplicable - (1) Exhibit 2 was filed under the same exhibit number in the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1996, and is incorporated herein by reference. (2) The Restated Certificate of Incorporation was filed as Exhibit 3 in the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1996, and is incorporated herein by reference. (3) The Bylaws, as amended September 29, 1994, were filed as Exhibit 3 in the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1994, and are incorporated herein by reference. (4) The Trust Indenture between Boise Cascade Corporation and Morgan Guaranty Trust Company of New York, Trustee, dated October 1, 1985, as amended, was filed as Exhibit 4 in the Registration Statement on Form S-3 No. 33 5673, filed May 13, 1986. The First Supplemental Indenture, dated December 20, 1989, to the Trust Indenture between Boise Cascade Corporation and Morgan Guaranty Trust Company of New York, Trustee, dated October 1, 1985, was filed as Exhibit 4.2 in the Pre-Effective Amendment No. 1 to the Registration Statement on Form S-3 No. 33-32584, filed December 20, 1989. The Second Supplemental Indenture, dated August 1, 1990, to the Trust Indenture was filed as Exhibit 4.1 in the Company's Current Report on Form 8-K filed on August 10, 1990. Each of the documents referenced in this footnote is incorporated herein by reference. (5) The Rights Agreement, dated as of December 13, 1988, as amended September 25, 1990, was filed as Exhibit 1 in the Company's Form 8-K filed with the Securities and Exchange Commission on September 25, 1990, and is incorporated herein by reference. (6) Exhibits 10.1, 10.2, 10.4, 10.6, 10.11, 10.12, 10.19, 10.20, 10.21, 10.22, and 10.23 were filed under the same exhibit numbers in the Company's 1995 Annual Report on Form 10-K and are incorporated herein by reference. (7) The 1983 Board of Directors Deferred Compensation Plan, 1987 Board of Directors Deferred Compensation Plan, and 1984 Key Executive Stock Option Plan and Form of Agreement were filed as Exhibits 10.1, 10.2, and 10.3, respectively, in the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1996, and are incorporated herein by reference. (8) Exhibits 10.5, 10.10, 10.14, 10.15, 10.16, and 10.17 were filed under the same exhibit numbers in the Company's 1993 Annual Report on Form 10-K and are incorporated herein by reference. (9) Exhibit 10.7 was filed under the same exhibit number in the Company's 1994 Annual Report on Form 10-K and is incorporated herein by reference.