(X)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2000

(  )

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 incorporation or organization)

(I.R.S. Employer Identification No.)

1111 West Jefferson Street
P.O. Box 50
Boise, Idaho

83728-0001

(Address of principal executive officers)

(208) 384-6161

(Registrant's telephone number, including area code)

(Zip Code)

Class
Common Stock, $2.50 par value

Shares Outstanding
as of April 30, 2000
57,220,893

ITEM 1.

FINANCIAL STATEMENTS

Three Months Ended
March 31

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

2000

1999

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

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

(unaudited)

Revenues

   Sales

$

1,946,313

$

1,611,153

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

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

Costs and expenses

   Materials, labor, and other operating expenses  

1,531,789

1,253,623

   Depreciation, amortization, and cost of company
      timber harvested

73,716

69,035

   Selling and distribution expenses

200,686

182,896

   General and administrative expenses

29,036

29,986

   Other (income) expense, net

5,154

6,367

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

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

1,840,381

1,541,907

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

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

Equity in net income of affiliates

2,321

746

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

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

Income from operations

108,253

69,992

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

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

Interest expense

(36,685

)

(37,117

)

Interest income

504

616

Foreign exchange gain (loss)

(226

)

44

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

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

(36,407

)

(36,457

)

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

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

Income before income taxes and minority interest

71,846

33,535

Income tax provision

(28,738

)

(14,043

)

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

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

Income before minority interest

43,108

19,492

Minority interest, net of income tax

(3,544

)

(3,339

)

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

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

Net income

$

39,564

$

16,153

=========

==========

Net income per common share

Basic net income

$

0.63

$

0.23

=========

==========

Diluted net income

$

0.60

$

0.22

=========

==========

March 31

December 31

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

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

2000

1999

1999

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

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

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

(unaudited)

Current

   Cash

$

73,911

$

48,526

$

57,720

   Cash equivalents

8,022

8,349

9,215

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

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

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

81,933

56,875

66,935

   Receivables, less allowances

      of $11,196, $10,411, and $11,289

698,454

592,746

663,609

   Inventories

687,997

561,490

703,984

   Deferred income tax benefits

57,276

88,802

53,148

   Other

43,981

70,535

43,432

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

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

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

1,569,641

1,370,448

1,531,108

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

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

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

Property

   Property and equipment

      Land and land improvements

73,049

62,732

70,441

      Buildings and improvements

621,111

583,003

613,729

     Machinery and equipment

4,331,169

4,106,202

4,300,250

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

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

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

5,025,329

4,751,937

4,984,420

   Accumulated depreciation

(2,475,109

)

(2,197,160

)

(2,427,415

)

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

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

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

2,550,220

2,554,777

2,557,005

   Timber, timberlands, and timber deposits

292,187

270,028

294,663

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

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

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

2,842,407

2,824,805

2,851,668

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

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

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

Goodwill, net of amortization

   of $56,159, $41,112, and $52,506

476,219

493,114

488,339

Investments in equity affiliates

39,732

31,923

37,418

Other assets

231,524

229,394

229,881

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

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

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

Total assets

$

5,159,523

$

4,949,684

$

5,138,414

==========

==========

===========

March 31

December 31

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

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

2000

1999

1999

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

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

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

(unaudited)

Current

   Short-term borrowings

$

77,752

$

164,935

$

71,800

   Current portion of long-term debt

22,825

122,285

118,168

   Income taxes payable

24,609

1,560

19,998

   Accounts payable

600,727

486,527

589,278

   Accrued liabilities

      Compensation and benefits

131,692

124,046

148,035

      Interest payable

28,154

32,653

29,606

      Other

170,453

218,082

147,794

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

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

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

1,056,212

1,150,088

1,124,679

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

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

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

Debt

   Long-term debt, less current portion

1,643,943

1,548,027

1,584,528

   Guarantee of ESOP debt

132,809

155,731

132,809

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

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

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

1,776,752

1,703,758

1,717,337

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

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

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

Other

   Deferred income taxes

317,498

253,999

311,346

   Other long-term liabilities

237,281

296,299

239,940

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

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

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

554,779

550,298

551,286

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

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

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

Minority interest

134,705

120,092

130,999

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

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

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

Shareholders' equity

   Preferred stock -- no par value; 10,000,000       shares authorized;

      Series D ESOP: $.01 stated value; 4,880,791;
         5,236,527; and 4,982,209 shares outstanding

219,636

235,644

224,199

      Deferred ESOP benefit

(132,809

)

(155,731

)

(132,809

)

   Common stock -- $2.50 par value; 200,000,000
      shares authorized; 57,219,461; 56,391,396;
      and 57,157,558 shares outstanding

143,049

140,978

142,894

   Additional paid-in capital

451,079

422,291

449,040

   Retained earnings

971,705

796,767

942,702

   Accumulated other comprehensive income (loss)

(15,585

)

(14,501

)

(11,913

)

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

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

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

Total shareholders' equity

1,637,075

1,425,448

1,614,113

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

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

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

Total liabilities and shareholders' equity

$

5,159,523

$

4,949,684

$

5,138,414

=========

=========

===========

Three Months Ended
March 31

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

2000

1999

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

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

(unaudited)

Cash provided by (used for) operations

   Net income

$

39,564

$

16,153

   Items in net income not using (providing) cash

      Equity in net income of affiliates

(2,321

)

(746

)

      Depreciation, amortization, and costs of
         company timber harvested

73,716

69,035

      Deferred income tax provision

5,696

10,463

      Minority interest, net of income tax

3,544

3,339

      Restructuring activity

-

4,400

      Other

226

41

   Receivables

(34,845

)

(66,387

)

   Inventories

15,987

64,349

   Accounts payable and accrued liabilities

11,802

13,389

   Current and deferred income taxes

4,635

(7,645

)

   Other

(2,284

)

(10,363

)

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

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

      Cash provided by operations

115,720

96,028

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

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

Cash provided by (used for) investment

   Expenditures for property and equipment

(64,934

)

(48,380

)

   Expenditures for timber and timberlands

(1,935

)

(392

)

   Purchases of assets

-

(6,328

)

   Other

6,965

(12,510

)

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

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

      Cash used for investment

(59,904

)

(67,610

)

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

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

Cash provided by (used for) financing

   Cash dividends paid

      Common stock

(8,574

)

(8,451

)

      Preferred stock

(59

)

(80

)

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

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

(8,633

)

(8,531

)

   Short-term borrowings

5,952

35,423

   Additions to long-term debt

105,154

105,921

   Payments of long-term debt

(140,894

)

(174,673

)

   Other

(2,397

)

(4,051

)

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

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

      Cash used for financing

(40,818

)

(45,911

)

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

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

Increase (decrease) in cash and cash equivalents

14,998

(17,493

)

Balance at beginning of year

66,935

74,368

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

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

Balance at March 31

$

81,933

$

56,875

===========

===========

(1)

BASIS OF PRESENTATION. We have prepared the quarterly financial statements pursuant to the rules and regulations of the Securities and Exchange Commission. Some 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 accompanying notes included in our 1999 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. Net income for the three months ended March 31, 2000 and 1999, necessarily involved estimates and accruals. Actual results may vary from those estimates. 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)

OTHER (INCOME) EXPENSE, NET. "Other (income) expense, net" includes gains and losses on the sale and disposition of property and other miscellaneous income and expense items. The components of "Other (income) expense, net" in the Statements of Income are as follows:

For discussion of the restructuring activity, see Note 13.

(3)

NET INCOME PER COMMON SHARE. Net income per common share was determined by dividing net income, as adjusted, by applicable shares outstanding.

(4)

COMPREHENSIVE INCOME (LOSS). Comprehensive income (loss) for the periods include the following:

(5)

RECEIVABLES. In late September 1998, we sold fractional ownership interests in a defined pool of trade accounts receivable. At March 31, 2000 and 1999, and December 31, 1999, $100 million of sold accounts receivable were excluded from receivables in the accompanying balance sheets. The portion of fractional ownership interest retained by us is included in accounts receivable in the balance sheets. The increase of $21 million in sold accounts receivable over the amount at December 31, 1998, also represents an increase in cash provided by operations for the three months ended March 31, 1999. This program represents a revolving sale of receivables committed to by the purchasers for 364 days and is subject to renewal. Costs related to the program are included in "Other (income) expense, net" in the Statements of Income. Under the accounts receivable sale agreement, the maximum amount available from time to time is subject to change based on the level of eligible receivables, restrictions on concentrations of receivables, and the historical performance of the receivables we sell.

(6)

DEFERRED SOFTWARE COSTS. We defer software costs that benefit future years. These costs are amortized on the straight-line method over the expected life of the software. "Other assets" in the balance sheets includes deferred software costs of $50.3 million, $48.2 million, and $53.1 million at March 31, 2000 and 1999, and December 31, 1999. Amortization of deferred software costs totaled $3.4 million and $3.2 million for the three months ended March 31, 2000 and 1999.

(7)

INVENTORIES. Inventories include the following:

(8)

INCOME TAXES. We used an estimated annual tax provision rate of 40.0% and 41.9% for the three months ended March 31, 2000 and 1999. In 1999, our actual annual tax provision rate was 40.0%.

For the three months ended March 31, 2000 and 1999, we paid income taxes, net of refunds received, of $12.1 million and $5.5 million.

(9)

DEBT. At March 31, 2000, we had a revolving credit agreement with 25 major banks that permits us to borrow as much as $600 million at variable interest rates based on the London Interbank Offered Rate (LIBOR). At March 31, 2000, the rate was 6.4%. This agreement 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. Under this agreement, the payment of dividends is dependent upon the existence of and the amount of net worth in excess of the defined minimum. Our net worth at March 31, 2000, exceeded the defined minimum by $225.0 million. At March 31, 2000, there were $290 million of borrowings outstanding under this agreement. At April 30, 2000, borrowings had increased to $465 million due to borrowings to fund the purchase of the Boise Cascade Office Products Corporation ("BCOP") minority public shares (see Note 10). At April 30, 2000, our net worth exceeded the defined minimum by $93.2 million.

Our wholly owned subsidiary, BCOP, has a $450 million revolving credit agreement with 17 major banks that expires in June 2001 and provides variable interest rates based on LIBOR. At March 31, 2000, the rate was 6.4%. The BCOP revolving credit facility contains customary restrictive financial and other covenants, including a negative pledge and covenants specifying a minimum fixed charge coverage ratio and a maximum leverage ratio. Borrowings under BCOP's agreement were $150 million at March 31, 2000.

In October 1998, we entered into an interest rate swap with a notional amount of $75 million and an effective fixed rate of 5.1% with respect to $75 million of our revolving credit agreement borrowings. BCOP also entered into an interest rate swap with a notional amount of $25 million, and an effective fixed interest rate of 5.0% with respect to $25 million of their revolving credit agreement borrowings. Both swaps expire in October 2000. We are exposed to modest credit-related risks in the event of nonperformance by counterparties to these swaps; however, we do not expect the counterparties, who are all major financial institutions, to fail to meet their obligations.

Also at March 31, 2000, we had $77.8 million of short-term borrowings outstanding. At March 31, 1999, we had $164.9 million of short-term borrowings outstanding. The maximum amount of short-term borrowings outstanding during the three months ended March 31, 2000 and 1999, was $156.2 million and $293.3 million. The average amount of short-term borrowings outstanding during the three months ended March 31, 2000 and 1999, was $80.7 million and $177.6 million. The average interest rate for these borrowings was 6.2% for 2000 and 5.4% for 1999. At April 30, 2000, short-term borrowings had increased to $120.1 million due to borrowings to fund the purchase of the BCOP minority public shares (see Note 10).


At March 31, 2000, we had $430.0 million of unused borrowing capacity registered with the Securities and Exchange Commission for additional debt securities.

In April 1998, BCOP registered $300 million of shelf capacity with the SEC. In May 1998, BCOP issued $150 million of 7.05% notes under this registration statement. The notes are due in May 2005. BCOP has no intent to use the remaining shelf capacity.

In March 1999, we filed a registration statement covering $300 million in universal shelf capacity with the Securities and Exchange Commission. In March 2000, we refiled this registration statement. The filing is still under review by the Securities and Exchange Commission. If approved, we may offer and sell in one or more offerings common stock, preferred stock, debt securities, warrants, and purchase contracts.

In March 2000, we retired our $100 million 9.9% notes. In February 1999, we redeemed our $100 million, 9.875% notes.

Cash payments for interest, net of interest capitalized, were $38.1 million and $40.6 million for the three months ended March 31, 2000 and 1999.

(10)

BOISE CASCADE OFFICE PRODUCTS CORPORATION. At March 31, 2000, we owned 81.1% of BCOP's outstanding common stock. The public held the remaining 18.9% of BCOP stock. In December 1999, we announced a proposal to acquire the minority public shares. In March 2000, we commenced a tender offer for these shares, with the recommendation of BCOP's board of directors, at $16.50 per share in cash. The tender offer was successfully completed on April 19, 2000, with about 96% of the minority shares tendered and accepted for payment. Combined with our shares of BCOP stock, this amounted to more than 90% of the outstanding shares, thus allowing us to proceed with a short form merger without shareholder approval. As a result of this merger, all non-tendering shareholders became entitled to receive $16.50 per share in cash for each BCOP share they surrendered. Effective April 20, 2000, BCOP became a wholly owned subsidiary of Boise Cascade Corporation.

The acquisition of the minority public shares was accounted for under the purchase method of accounting. The purchase price, including payments to shareholders and stock option holders and transaction costs, totaled approximately $216.0 million and was funded from borrowings under our revolver and short-term borrowings. The excess of the purchase price over the estimated fair value of the assets and liabilities acquired was recorded as goodwill and will be amortized over 40 years. On a pro forma basis, if the acquisition had occurred on January 1, 1999, there would have been no change in our reported sales. Net income for the three months ended March 31, 2000 and 1999, would have increased approximately $1.0 million. Earnings per basic and diluted share would have increased approximately $0.01 for the same periods.

BCOP made no acquisitions in the first quarter of 2000. On January 11, 1999, BCOP acquired the office supply business of Wallace Computer Services, based in Lisle, Illinois. This transaction was completed for cash of $6.3 million and the recording of $0.2 million of acquisition liabilities. This acquisition was accounted for under the purchase method of accounting. Accordingly, the purchase price was 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 business are included in our operations subsequent to the date of acquisition. On a pro forma basis, if the 1999 acquisition had occurred on January 1, 1999, there would have been no significant change in the results of operations for the first three months of 1999.

The unaudited pro forma financial information does not necessarily represent the actual results of operations that would have occurred if the acquisitions had taken place on the dates assumed.

(11)

ACQUISITION. On September 16, 1999, we completed the acquisition of Furman Lumber, Inc., a U.S. building materials distributor headquartered in Billerica, Massachusetts, with 12 locations in the East, Midwest, and South. The purchase price was approximately $92.7 million, including cash payments of $90.2 million and assumption of $2.5 million of debt.


This acquisition was accounted for under the purchase method of accounting.  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 business are included in our operations subsequent to the date of acquisition.

If this acquisition had occurred on January 1, 1999, pro forma sales for the three months ended March 31, 1999, would have increased $156.2 million, and pro forma net income and pro forma basic and diluted earnings per share would not have materially changed. This unaudited pro forma financial information does not necessarily represent the actual results of operations that would have resulted if the acquisition had occurred on the date assumed.

(12)

NEW ACCOUNTING STANDARDS. In June 1998, the Financial Accounting Standards Board (FASB) issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities." In June 1999, the FASB issued SFAS No. 137, "Accounting for Derivative Instruments and Hedging Activities - Deferral of the Effective Date of FASB Statement No. 133" delaying the effective date of SFAS No. 133. We plan to adopt SFAS No. 133 in the first quarter of 2001. Adoption of this statement is not expected to have a significant impact on our results of operations or financial position.

(13)

RESTRUCTURING ACTIVITIES. In the first quarter of 1999, our corporate and other segment recorded $4.4 million of additional restructuring expense related to the early retirement program announced in fourth quarter 1998. The noncash charge was for the present value of unrecorded early retirement benefits. These charges were accrued when the retiring individuals legally accepted the early retirement offer.

In 1998, restructuring reserves were established to close down two sawmills in our building products segment, to revalue assets in our paper and paper products segment, and to implement a companywide cost-reduction initiative and restructuring of several operations in our paper and paper products, building products, and corporate and other segments. In addition, reserves were established for restructuring of our European operations in our office products segment. For more detailed information on these reserves, see our 1999 Annual Report on Form 10-K. Restructuring reserve liability activity related to the 1998 charges through March 31, 2000, was as follows:

(14)

SEGMENT INFORMATION. There are no differences from our last annual report in our basis of segmentation or in our basis of measurement of segment profit or loss. An analysis of our operations by segment is as follows:

Income

(Loss)

Before

Sales

Taxes and

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

Minority

Trade

Intersegment

Total

Interest (a)

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

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

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

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

(expressed in thousands)

Three Months Ended March 31, 2000

   Office products

$

941,417

$

203

$

941,620

$

39,470

   Building products

612,129

8,377

620,506

29,185

   Paper and paper products

386,005

99,107

485,112

48,683

   Corporate and other

6,762

11,167

17,929

(8,807

)

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

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

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

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

      Total

1,946,313

118,854

2,065,167

108,531

   Intersegment eliminations

-

(118,854

)

(118,854

)

-

   Interest expense

-

-

-

(36,685

)

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

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

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

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

      Consolidated totals

$

1,946,313

$

-

$

1,946,313

$

71,846

============

===========

============

============

Three Months Ended March 31,1999

   Office products

$

848,264

$

126

$

848,390

$

38,662 

   Building products

436,552

6,916

443,468

40,299 

   Paper and paper products

319,934

79,423

399,357

4,794 

   Corporate and other

6,403

14,201

20,604

(13,103)

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

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

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

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

      Total

1,611,153

100,666

1,711,819

70,652 

   Intersegment eliminations

-

(100,666

)

(100,666

)

- 

   Interest expense

-

-

-

(37,117

)

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

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

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

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

      Consolidated totals

$

1,611,153

$

-

$

1,611,153

$

33,535 

============

===========

============

============

(a)

Interest income has been allocated to our segments in the amounts of $504,000 for the three months ended March 31, 2000 and $616,000 for the three months ended March 31, 1999.

ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Three Months Ended
March 31

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

2000

1999

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

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

Sales

   $   1.9 billion

$   1.6 billion

Net income

$39.6 million

$16.2 million

Net income per basic share

$0.63

$0.23

Net income per diluted share

 $0.60

$0.22

Net income before nonroutine items

$39.6 million

$18.9 million

Net income per basic share before nonroutine items

$0.63

$0.27

Net income per diluted share before nonroutine items

$0.60

$0.26

(percentage of sales)

Materials, labor, and other operating expenses

78.7%

77.8%

Selling and distribution

10.3%

11.4%

General and administrative expenses

1.5%

1.9%

Three Months Ended
March 31

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

2000

1999

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

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

Sales

$

941.6 million

$

848.4 million

Segment income

$

39.5 million

$

38.7 million

(percentage of sales)

Gross profit

24.5%

25.8%

Operating expenses

20.3%

21.3%

Operating profit

4.2%

4.6%

Three Months Ended
March 31

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

2000

1999

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

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

Sales

$

620.5 million

$

443.5 million

Segment income

$

29.2 million

$

40.3 million

Sales Volumes

Plywood (1,000 sq. ft. 3/8" basis)

460,651

398,558

OSB (1,000 sq. ft. 3/8" basis) (1)

101,439

91,377

Lumber (1,000 board ft.)

124,564

122,766

LVL (100 cubic ft.)

15,811

12,748

I-joists (1,000 equivalent lineal ft.)

28,842

29,501

Particleboard (1,000 sq. ft. 3/4" basis)

47,214

46,495

Building materials distribution (in millions)

$

395

$

224

Average Net Selling Prices

Plywood (1,000 sq. ft. 3/8" basis)

$

244

$

267

OSB (1,000 sq. ft. 3/8" basis)

$

214

$

155

Lumber (1,000 board ft.)

$

530

$

502

LVL (100 cubic ft.)

$

1,550

$

1,582

I-joists (1,000 equivalent lineal ft.)

$

983

$

993

Particleboard (1,000 sq. ft. 3/4" basis)

$

299

$

266

Three Months Ended
March 31

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

2000

1999

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

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

Sales

$

485.1 million

$

399.4 million