EXHIBIT 13.2
STATEMENTS OF INCOME (LOSS)
Boise Cascade Corporation and Subsidiaries
Three Months Ended Year Ended
December 31 December 31
_______________________ _______________________
1997 1996 1997 1996
__________ __________ __________ __________
(expressed in thousands)
Revenues
Sales $1,444,860 $1,262,740 $5,493,820 $5,108,220
Other income (expense), net 120 7,350 (710) 14,520
__________ __________ __________ __________
1,444,980 1,270,090 5,493,110 5,122,740
__________ __________ __________ __________
Costs and expenses
Materials, labor, and other
operating expenses 1,129,610 1,016,890 4,436,650 4,152,150
Depreciation, amortization,
and cost of company timber
harvested 70,770 63,050 256,570 255,000
Selling and distribution expenses 152,240 121,720 553,240 446,530
General and administrative expenses 33,180 33,640 139,060 119,860
__________ __________ __________ __________
1,385,800 1,235,300 5,385,520 4,973,540
__________ __________ __________ __________
Equity in net income (loss)
of affiliates (1,820) 140 (5,180) 2,940
__________ __________ __________ __________
Income from operations 57,360 34,930 102,410 152,140
__________ __________ __________ __________
Interest expense (39,160) (30,640) (137,350) (128,360)
Interest income 640 2,300 6,000 3,430
Foreign exchange gain (loss) 130 (370) 10 (1,200)
Gain on subsidiary's issuance
of stock - 2,880 - 5,330
__________ __________ __________ __________
(38,390) (25,830) (131,340) (120,800)
__________ __________ __________ __________
Income (loss) before income taxes
and minority interest 18,970 9,100 (28,930) 31,340
Income tax (provision) benefit (8,460) (4,240) 9,260 (11,960)
__________ __________ __________ __________
Income (loss) before minority
interest 10,510 4,860 (19,670) 19,380
Minority interest, net of income tax (3,280) (2,720) (10,740) (10,330)
__________ __________ __________ __________
Net income (loss) $ 7,230 $ 2,140 $ (30,410) $ 9,050
Net income (loss) per common share
Basic $ (.02) $ (.16) $ (1.19) $ (.63)
Diluted $ (.02) $ (.16) $ (1.19) $ (.63)
SEGMENT INFORMATION
Segment sales
Paper and paper products $ 442,484 $ 411,016 $1,604,600 $1,873,247
Office products 718,514 556,680 2,596,732 1,985,564
Building products 382,404 372,021 1,645,236 1,557,127
Intersement eliminations and other (98,542) (76,977) (352,748) (307,718)
__________ __________ __________ __________
$1,444,860 $1,262,740 $5,493,820 $5,108,220
Segment operating income (loss)
Paper and paper products $ 25,060 $ 26,600 $ (11,551) $ 74,894
Office products 39,148 26,986 122,249 101,533
Building products 5,987 15,942 47,742 36,074
Equity in net income (loss) of
affiliates (1,820) 140 (5,180) 2,940
Intersement eliminations and other (11,015) (34,738) (50,850) (63,301)
__________ __________ __________ __________
Income from operations $ 57,360 $ 34,930 $ 102,410 $ 152,140
BALANCE SHEETS (Unaudited) Boise Cascade Corporation and Subsidiaries
December 31
__________________________
1997 1996
___________ ___________
(expressed in thousands,
except per-share data)
ASSETS
Current
Cash and cash items $ 56,429 $ 40,066
Short-term investments at cost, which approximates market 7,157 220,785
__________ __________
63,586 260,851
Receivables, less allowances of $9,689,000, $5,173,000 and $4,911,000 570,424 476,339
Inventories 633,290 540,433
Deferred income tax benefits 54,312 53,728
Other 32,061 24,053
__________ __________
1,353,673 1,355,404
__________ __________
Property
Property and equipment
Land and land improvements 57,260 40,393
Buildings and improvements 554,712 452,578
Machinery and equipment 4,055,065 3,859,124
__________ __________
4,667,037 4,352,095
Accumulated depreciation (2,037,352) (1,798,349)
__________ __________
2,629,685 2,553,746
Timber, timberlands, and timber deposits 273,001 293,028
__________ __________
2,902,686 2,846,774
__________ __________
Goodwill, net of amortization 445,722 262,533
Investments in equity affiliates 32,848 19,430
Other assets 234,995 226,568
__________ __________
Total assets $4,969,924 $4,710,709
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Notes payable $ 94,800 $ 36,700
Current portion of long-term debt 30,176 157,304
Income taxes payable 3,692 3,307
Accounts payable 470,445 427,224
Accrued liabilities
Compensation and benefits 126,780 119,282
Interest payable 39,141 31,585
Other 128,714 157,156
__________ __________
893,748 932,558
__________ __________
Debt
Long-term debt, less current portion 1,725,865 1,330,011
Guarantee of ESOP debt 176,823 196,116
__________ __________
1,902,688 1,526,127
__________ __________
Other
Deferred income taxes 230,840 249,676
Other long-term liabilities 224,663 240,323
__________ __________
455,503 489,999
__________ __________
Minority interest 105,445 81,534
__________ __________
Shareholders' equity
Preferred stock - no par value; 10,000,000 shares authorized;
Series D ESOP: $.01 stated value; 5,569,684 and 5,904,788 shares outstanding 250,636 265,715
Series D ESOP benefit (176,823) (196,116)
Series F: $.01 stated value; 115,000 shares outstanding in each period 111,043 111,043
Series G: $.01 stated value; 862,500 shares outstanding in 1996 - 176,404
Common stock - $2.50 par value; 200,000,000 shares authorized; 56,223,923
and 48,476,366 shares outstanding 140,560 121,191
Additional paid-in capital 416,691 230,728
Retained earnings 870,433 971,526
__________ __________
Total shareholders' equity 1,612,540 1,680,491
__________ __________
Total liabilities and shareholders' equity $4,969,924 $4,710,709
_______________________________________________________________________________________________________________
Shareholders' equity per common share $ 25.39 $ 27.30
STATEMENTS OF CASH FLOWS (Unaudited)
Boise Cascade Corporation and Subsidiaries
Year Ended December 31
______________________
1997 1996
________ ________
(expressed in thousands)
Cash provided by (used for) operations
Net income (loss) $ (30,410) $ 9,050
Items in income (loss) not using (providing) cash
Equity in net income (loss) of affiliates 5,180 (2,940)
Depreciation and cost of company timber harvested 256,570 255,000
Deferred income tax provision (benefit) (18,593) (13,498)
Minority interest, net of income tax 10,740 10,330
Write-down of assets - 9,955
Other 1,265 3,322
Gain on sale of assets - (25,054)
Gain on subsidiary's issuance of stock - (5,330)
Receivables (12,291) (3,298)
Inventories (66,060) (15,914)
Accounts payable and accrued liabilities (10,523) 6,045
Current and deferred income taxes 2,735 (37,394)
Other (9,577) 3,229
_______ _______
Cash provided by operations 129,036 193,503
_______ _______
Cash provided by (used for) investment
Expenditures for property and equipment (279,557) (595,253)
Expenditures for timber and timberlands (6,232) (5,510)
Investments in equity affiliates, net (20,276) (9,736)
Purchases of facilities (246,861) (188,463)
Sale of assets - 781,401
Other (27,687) (26,271)
_______ _______
Cash used for investment (580,613) (43,832)
_______ _______
Cash provided by (used for) financing
Cash dividends paid
Common stock (30,176) (28,909)
Preferred stock (39,808) (44,389)
_______ _______
(69,984) (73,298)
Notes payable 58,100 19,700
Additions to long-term debt 417,989 611,158
Payments of long-term debt (159,201) (509,456)
Other 7,408 11,607
_______ _______
Cash provided by financing 254,312 59,711
_______ _______
Increase (decrease) in cash and short-term
investments (197,265) 209,382
Balance at the beginning of the year 260,851 51,469
_______ _______
Balance at December 31 $ 63,586 $260,851
NOTES TO QUARTERLY FINANCIAL STATEMENTS
Boise Cascade Corporation and Subsidiaries
FINANCIAL HIGHLIGHTS. The Statements of Income (Loss) and Segment Information
are unaudited statements which do not include all Notes to Financial
Statements and should be read in conjunction with the 1997 Annual Report of
the company. The 1997 Annual Report will be available in March 1998. Net
income (loss) for the three months and the years ended December 31, 1997 and
1996, involved estimates and accruals.
In the fourth quarter of 1997, the company's effective annual tax benefit rate
was decreased to 32% from the 37% rate used in the first nine months of 1997.
The rate decrease was due primarily to the sensitivity of the rate to income
levels and the mix of income sources. The impact of the fourth-quarter change
to the rate, which otherwise would have been recorded in prior 1997 quarters,
was to reduce net income by approximately $2,390,000, or 4 cents per diluted
share.
In the fourth quarter of 1996, the company completed the sale of its coated
publication paper business, consisting primarily of its pulp and paper mill in
Rumford, Maine, and 667,000 acres of timberland, to The Mead Corporation for
approximately $639,000,000 in cash. After payment of certain related tax
indemnification requirements, net cash proceeds from the sale were 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
$40,395,000, which was recorded in the paper and paper products segment. In
addition, approximately $15,341,000 of pretax expense arising from the related
tax indemnification was recorded in the corporate and other caption in segment
operating income. The net gain per diluted share was 32 cents.
Also in the fourth quarter of 1996, the company recorded a pretax write-down
totaling $9,955,000, or 13 cents per diluted share for certain paper assets.
In the fourth quarter of 1996, the company recorded a gain of $2,880,000, or
6 cents per diluted share, related to the issuance of stock by Boise Cascade
Office Products Corporation ("BCOP").
In the fourth quarter of 1996, the company's effective annual tax provision
rate, excluding the effect of not providing taxes related to "Gain on
subsidiary's issuance of stock," was increased to 46% from the 39% rate used
in the first three quarters of 1996. The rate increase was due primarily to
the sensitivity of the rate to lower income levels and the mix of income
sources. The impact of the fourth-quarter change to the rate, which otherwise
would have been recorded in prior 1996 quarters, was to reduce net income by
approximately $1,379,000, or 3 cents per diluted share.
The net effect on the fourth quarter of 1996 of the items discussed above was
to increase net income by $10,700,000, or 22 cents per diluted share.
NET LOSS PER COMMON SHARE. Net loss per common share was determined by
dividing net loss, as adjusted, by applicable shares outstanding. For the
three months and the years ended December 31, 1997 and 1996, the computation
of diluted net loss per share was antidilutive; therefore, amounts reported
for basic and diluted loss were the same. Due to the impact on average shares
outstanding of the conversion of Series G preferred stock to common stock in
July 1997, year-to-date basic and diluted loss per share for the year ended
December 31, 1997, is 6 cents less than the amount that would be arrived at by
adding together the three independently calculated quarters.
Three Months Ended Year Ended
December 31 December 31
___________________ ____________________
1997 1996 1997 1996
_______ _______ _______ ________
(expressed in thousands)
Net income (loss) as reported $ 7,230 $ 2,140 $(30,410) $ 9,050
Preferred dividends(1) (6,229) (9,769) (31,775) (39,248)
_______ _______ ________ ________
Basic and diluted income (loss) $ 1,001 $(7,629) $(62,185) $(30,198)
Average shares outstanding used to
determine basic and diluted
income (loss) per common share 56,191 48,473 52,049 48,277
(1) 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.
In the fourth quarter of 1997, the company adopted SFAS No. 128, Earnings Per
Share. The accounting change had no effect on previously reported 1997 and
1996 loss per share amounts.