BOISE CASCADE OFFICE PRODUCTS CORP, 10-K, 2000-03-29

BOISE CASCADE OFFICE PRODUCTS CORP
10-K, 2000-03-29
PAPER & PAPER PRODUCTS

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<PAGE>

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 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, 1999

Commission File number 1-13662

BOISE CASCADE OFFICE PRODUCTS CORPORATION
800 West Bryn Mawr Avenue
Itasca, Illinois 60143
(630) 773 - 5000

A Delaware Corporation 82-0477390

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Name of exchange on which registered
Common Stock, $.01 par value New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:
None

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 nonaffiliates of the
registrant, computed by reference to the price at which the stock was sold as of
the close of business on February 29, 2000: $184,684,073.

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 29, 2000
----- -----------------------
Common Stock, $.01 par value 65,814,460

DOCUMENTS INCORPORATED BY REFERENCE

1. The registrant's Income Statement and Notes to Quarterly Financial
Statements from the fourth quarter Fact Book for the three months ended
December 31, 1999, are incorporated by reference into Parts II and IV of
this Form 10-K.
<PAGE>

BOISE CASCADE OFFICE PRODUCTS CORPORATION

TABLE OF CONTENTS

PART I
<TABLE>
<CAPTION>
Item Page
- ---- ----
<S> <C>
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.................................................

7A. Quantitative and Qualitative Disclosures About Market Risk.............

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.......
</TABLE>
<PAGE>

This Form 10-K contains "forward-looking statements" that involve uncertainties
and risks. When used in this document, the words "believe," "intend," "expect,"
"plan," and similar expressions are intended to identify forward-looking
statements. There can be no assurance that actual results will not differ from
the results expressed in, or implied by, these forward-looking statements.
Factors which could cause or contribute to such differences include, among
others: the success of developing business with new customers and of cross-
selling efforts to existing customers; the successful development and
implementation of electronic commerce business strategies; the timing and amount
of any price changes in paper or fuel; the pace of acquisitions and the success
of integrating acquisitions; continued same-location sales growth; the success
of new initiatives; the availability of financing for future acquisitions; the
mix of our sales by product category and country; the pace of cost structure
improvements; the capabilities of operating and computer systems; the impact of
Boise Cascade Corporation's ("BCC") offer to purchase our outstanding public
shares; and the uncertainties of expansion into international markets, including
currency exchange rates, legal and regulatory requirements, and other factors.

PART I

ITEM 1. BUSINESS
- ------ --------

Overview

Boise Cascade Office Products Corporation ("BCOP" and together with its
subsidiaries, the "Company" or "we") is one of the world's premier business-to-
business distributors of products for the office. We sell a broad line of
branded and private label office supplies, office furniture, paper, computer
supplies, and promotional products. We purchase most of our products directly
from manufacturers and distribute them directly to business customers.

Throughout our 36-year history, our primary marketing focus has been and remains
business customers. For much of that time, we concentrated on serving the
commodity office supply needs of large businesses in the United States. More
recently, we have broadened our marketing focus to include small and medium-
sized businesses, expanded our array of products and services, and entered
several international office products distribution markets.

Until 1996, we operated only in the U.S., where we are one of the premier
distributors of office products. Since 1996, we have expanded into Australia,
Belgium (under the name JPG), Canada (under the name Grand & Toy), France (under
the names JPG and Boise Cascade Office Products France), Spain (under the name
Sistemas Kalamazoo), and the United Kingdom (under the names Neat Ideas and
Boise Cascade Office Products UK). In 1999, foreign operations accounted for
approximately 24% of our total net sales. For financial information about our
foreign operations, see Note 10, "Segment Information," of the Notes to
Financial Statements in Part II, Item 8 of this Form 10-K.

Our integrated network of 45 distribution centers in the U.S. enables us to
provide consistent products, prices, and service to our national account
customers. It also enables us to provide next-day delivery of virtually all
orders to our large business customers and over 75% of orders to our small
business customers. In Canada, we have a national network of seven distribution
centers. In Australia, we have a national network of seven distribution
centers. In the U.K. and Western Europe, we have five distribution centers that
form the nucleus of our network in Europe.

unless it is extended. If BCC is successful in obtaining a majority of the
minority shares, it will purchase the remaining shares through a short-form
merger. If BCC completes the tender and merger, we will again become a wholly-
owned subsidiary of BCC.

Business Strategy

We have grown rapidly due to both acquisitions and same-location sales
increases. For the last three years, our year-over-year increases in net sales,
sales on a same-location basis, and operating income have been as follows:

Year-Over-Year Growth
---------------------
<TABLE>
<CAPTION>

Year Net Sales Same-Location Sales Operating Income
---- --------- ------------------- ----------------
<S> <C> <C> <C>
1999 10% 8% 14% (1)
1998 18% 11% 10% (1)
1997 31% 14% 18%
</TABLE>

(1) Before the impact of our European restructuring and joint
venture dissolution. See "Other operating (income) expense" in
Footnote 1, "Summary of Significant Accounting Policies," of the
Notes to Financial Statements in Part II, Item 8 of this Form 10-K.

We believe that the distribution of office products to business customers
continues to present growth opportunities. Our business strategy for exploiting
these opportunities includes the following elements:

Increase Sales of Core Products and Add New Products and Services

We plan to increase sales of core products, such as computer supplies,
promotional products, office furniture, and office paper. Growth potential
also exists in developing procurement management offerings for our
customers, including components of integrated supply and expansion of our
electronic commerce capabilities. By broadening our products and services,
we are better able to meet the needs of those customers interested in
reducing their supplier base and taking advantage of "one-stop shopping."
This also leverages our distribution and systems infrastructure.

In response to our customers' needs for computer supplies, we market
computer-related products from 31 of our U.S. distribution centers under
the name Boise Technology. Our sales of computer supplies represented
approximately 16 percent of our net sales in 1999. In our U.S. promotional
products business, Boise Marketing Services, Inc. ("BMSI"), we repositioned
our efforts to focus on large program customers. Our sales of promotional
products represented approximately three percent of our net sales in 1999.
Our growth strategy also targets increasing office furniture sales across
the system. Our office furniture sales in 1999 represented approximately
12 percent of our net sales. Office paper is also an important part of our
strategy. Our sales of office paper represented approximately 15 percent
of our net sales in 1999.

For several years, we have offered customers the ability to place orders
with us via the Internet. We are continuing to improve and expand our
Internet ordering platform. As more customers choose to conduct business
electronically, we believe our infrastructure and electronic commerce
capabilities give us an advantage in this area.
<PAGE>

Broaden Our Customer Base

. We plan to increase our national account business. We define a "national
account" as a multi-site customer served by two or more of our distribution
centers under a single contract. Large businesses with many office sites
across the U.S. are increasingly seeking to reduce product and process
costs by purchasing all of their office products needs from a single
company with national distribution capability under one centrally-
negotiated national contract.

We believe that we currently have a competitive advantage with respect to
such businesses. In the U.S., our network of integrated distribution
centers enables us to provide consistent delivery of products, prices, and
service across all customer locations. A key element of our strategy is to
use this advantage to expand our business with national account customers.

We have a specialized national account marketing staff dedicated to
building and maintaining our business with national accounts. Our sales to
such customers have grown significantly.

We are pursuing a similar national account strategy in our foreign
operations, which may serve multi-national accounts as well.

. We plan to increase our business with middle-size customers. These are
businesses with 25 to 100 employees. Our Boise-Express initiative is a
custom-designed sales effort aimed specifically at middle-size customers.
We believe that the Boise-Express initiative provides the most convenient
and cost-effective way for middle-size customers to purchase office
products. An important element in our growth strategy is to expand our
business with middle-size customers, in both geographic coverage and
product offerings. To accelerate this opportunity, we opened a new outbound
telesales center in Norman, Oklahoma, during the first quarter of 2000.

. We plan to increase our business with small business customers. Starting
with our April 1994 acquisition of the office products distribution
business of Reliable, we have expanded our direct marketing capabilities,
both in the U.S. and abroad. In December 1995, we acquired Neat Ideas, the
United Kingdom's second largest office products direct marketer. In July
1997, we purchased Jean-Paul Guisset S.A. ("JPG"), France's third largest
office products direct marketer. In January 1998, we expanded our product
offering when we purchased the business of Fidelity Products Inc., a direct
marketer of graphic arts supplies and warehouse and shipping supplies. Also
in 1998, we acquired Sistemas Kalamazoo, a direct marketer of office
products in Spain. We also began direct marketing office products in
Belgium in 1998. Our sales to small business customers represented
approximately 16 percent of our net sales in 1999.

Expand Our Geographic Scope

We have businesses in Australia, Belgium, Canada, France, Spain, and the
United Kingdom, as well as the United States. We intend to enter the
office products distribution business in other countries where practical
and profitable, as well as to expand our operations in those countries
where we currently operate. We expect to do this through a combination of
acquisitions, joint ventures, alliances, start-ups, and same-location
growth.
<PAGE>

Our growth strategy has both an acquisition and an internal growth
component; the mix for any given element will be different year to year
because of business opportunities, capital availability, and other
priorities.

Acquisitions have been, and we expect them to continue to be, an important
element of our strategy. Acquisition decisions will be driven by our desire
to provide quality service to our customers and by the availability of
opportunities which suit our requirements. The near-term focus of our
acquisition program is to increase our presence abroad as well as to expand
our offerings in the United States. We typically seek to retain management
of each acquired business and to draw upon its specialized knowledge. In
addition, we intend to integrate acquired businesses into our distribution
networks to the extent it is appropriate and cost-effective.

In the U.S., we have opened new distribution centers in selected
metropolitan areas to establish or expand our presence where we could not
find an appropriate acquisition candidate. While a start-up typically
requires a smaller initial capital investment than an acquisition, it may
take two to four years to achieve profitability. We have transferred a base
of business from existing distribution centers to our recent start-ups in
order to speed this process. In the next few years, we expect to relocate
certain existing distribution centers into new and larger facilities to
support our growth.

An aggressive acquisition and expansion program such as ours is not without
risk. Competition, availability of suitable candidates, or capital
availability all may affect our ability to complete targeted acquisitions.
In addition, we encounter various risks associated with each acquisition
which we do complete, including the possible inability to integrate the
acquired business into our distribution network, increased goodwill
amortization, diversion of management's attention, and unanticipated
problems, costs, or liabilities, some or all of which could have a material
adverse effect on our operations and financial performance. The management
and integration risks of foreign acquisitions are greater. Additional risks
in foreign countries include those associated with currency exchange rates,
new and different legal and regulatory requirements, and language and
cultural differences.

Business Model

United States. Our objective is to be the preferred supplier of office
products to business customers of all sizes by outperforming our
competitors at all levels - to "out-national" our national competitors and
"out-local" our local competitors. Our business model is designed to take
maximum advantage of both our centralized national capabilities and our
local presence in major markets across the country. We manage centrally
where it is efficient and cost effective to do so or where there is value
to our customers in nationwide consistency, and we manage locally where it
meets local market needs and opportunities or local customer requirements.

During 1998, we completed the implementation of a new order-entry computer
system in our integrated U.S. distribution centers. We can provide
consistent next-day delivery of virtually all products offered in our full-
line catalog, at agreed-upon prices and service levels, to all of our large
business customers. Over 75% of orders to our small business customers can
be delivered the next day. Our integrated system facilitates the delivery
of consistent products, pricing, service, and reporting to our national
account customers. In addition, it enables us to reduce operating costs by
centralizing certain administrative, logistical, and other management
functions. For example, we are able to centrally monitor inventory levels
and forecast future demand for items stocked at our distribution centers.
As a result, the
<PAGE>

responsibility for rebuying our most frequently ordered items is a
centralized function. This has reduced our inventory restocking costs and
improved inventory turn rates. We plan to continue converting recently and
newly acquired distribution centers to this common system.

Our merchandising activities are centralized, including product selection;
catalog preparation; and vendor selection, management, and evaluation.
Sales training, marketing programs, activity-based cost management
programs, accounting, logistics, and human resources management are other
functions that are primarily or totally managed centrally and can benefit
from economies of scale as we grow.

Providing responsive and cost-effective customer service is a critical
element of our business model. We must maintain an appropriate balance
between centralization and local autonomy in serving our customers. Our
integrated computer system enables us to organize certain customer support
functions in a centralized, cost-effective manner without compromising
customer focus. We provide customer service at each distribution center to
handle location-specific matters, and operate centralized call centers
which enter customer orders and respond to customer inquiries about product
alternatives, order status, billing, and other matters. We have centralized
call centers at Peru and Ottawa, Illinois; Bristol, Virginia; and Casper,
Wyoming; to handle inbound orders and inquiries for our customers. During
the first quarter of 2000, we opened a new outbound telesales center in
Norman, Oklahoma.

A substantial part of our internal capital spending is dedicated to
improving operating efficiency. In addition to seeking to improve the
efficiency of our individual distribution centers, our logistics experts
focus on the efficiency of our distribution network as a whole in each of
the countries where we operate. Stocking strategies, distribution center
configurations, and delivery methods are all being designed to serve
customers better while minimizing our investment and controlling our
operating costs. In the U.S., we continue to consolidate our order
fulfillment operations. We have an intercompany agreement under which nine
of BCOP's distribution centers fill orders for Reliable. Our steps to date
have increased the next-day delivery coverage of Reliable's operations and
have reduced our overall occupancy and delivery costs (as a percentage of
net sales).

We believe that a local distribution center presence is important to many
of our customers and can provide a competitive advantage within a specific
metropolitan area. While national accounts are coordinated centrally, our
sales force is distributed across our national network and supervised
locally. Each distribution center is a profit center. Its general manager
is responsible for local account targeting, pricing, and servicing;
distribution center productivity; sales management; and location-specific
or customer-specific products and services, alliances, and promotions. In
each local market, our management team and sales representatives develop
and offer customized services, from stocking customer-unique products to
special reporting and delivery services, to meet the needs of their
customers.

Our business model is data intensive. Through our activity-based cost
management system ("ABCM"), we measure our costs by activity, and then by
customer and by product. ABCM facilitates cost comparisons across all
distribution centers so that "best practices" can be identified and
replicated where appropriate. The ABCM system enables us to directly
attribute over 90% of our actual costs to specific customer-related
activities. We also measure on an ongoing basis on-time delivery, order
accuracy and completeness, supplier performance by location, customer
satisfaction, associate satisfaction, and key process stability and
capability. We believe that these measurement systems, including ABCM,
provide us with a competitive advantage.
<PAGE>

International. In the foreign countries where we have operations, we are
applying the major elements of our domestic business model: to take maximum
advantage of our centralized national capabilities and our local presence,
to link each of the facilities via computer, to offer similar products
across the entire system, to serve the full range of customers from each
facility, and to centralize a variety of functions where it is efficient
and cost effective to do so, while performing certain other functions
locally.

Products

Our net sales by product category, expressed as a percentage of our total
net sales, during each of the last three years were as follows:
<TABLE>
<CAPTION>
Year Ended December 31
-------------------------
1999 1998 1997
------- ------- -------
<S> <C> <C> <C>
Office Supplies (1) 54% 61% 66%
Office Paper 15% 13% 13%
Office Furniture (2) 12% 12% 11%
Computer Supplies 16% 10% 7%
Promotional Products 3% 4% 3%
---- ---- ----
100% 100% 100%
==== ==== ====
</TABLE>

(1) Includes, among many other products, pens, staplers, file folders,
binders, and calculators
(2) Includes desks, chairs, file cabinets, computer stations, and
furniture accessories

Sales and Marketing

Electronic Commerce. As part of our overall program for electronic data
interchange with our large business customers, we developed and offer an
Internet-based ordering system. This system allows customers to order our
complete range of products "on-line." It provides customers with customized
levels of security and authorizations to ensure that each order has the
proper approval. Features include multi-tiered approvals, user-customized
security, credit card capabilities, a variety of viewing options, and true
electronic data interchange ("EDI") capabilities. To use it, customers only
need access to the Internet and browser software.

We also developed and offer a CD-ROM version of our annual full-line
catalog. Interactive features of the CD-ROM catalog provide customers, by
computer, the same information on each item as the printed version of the
catalog provides. The features also permit a customer to view complementary
items, see prices specific to that customer, and order electronically.

EDI between our mainframe computer and our large business customers'
systems, local-area-network-based electronic commerce systems, and the
systems mentioned above accounted for approximately 20% of our domestic
inbound order volume in 1999.

Operations

Logistics and systems support. Advanced information technology is critical
in a nationwide distribution business involving thousands of different
products being delivered under tight time constraints. We were a pioneer in
our industry in the use of computer systems to facilitate this process. We
have developed and use customized software applications to carry out or
assist in performing a great variety of business
<PAGE>

functions. During 1998, we completed the implementation of a new order-
entry computer system in our integrated U.S. distribution centers.

Order entry. We offer a wide range of order entry options to our customers.
Customers wishing to place an order with us in the U.S. may (1) enter the
order by using a personal computer or other computer interface, including
on-line ordering; (2) convey the order by telephone or fax to a customer
service representative at a local distribution center or toll-free to a
customer service facility; or (3) give the order in person to a sales
associate.

Stocking, order fulfillment, and delivery. Our distribution centers receive
and store inventory and fill customer orders. Many of our distribution
centers regularly stock all of the core items offered in our full-line
catalog. Our stocking strategy at each distribution center is designed to
ensure our ability to provide delivery of all catalog items at the lowest
cost on a next-day basis to large business customers and on a next- or
second-day basis to our other customers. Our stocking strategy reflects a
rigorously analyzed economic tradeoff between carrying a particular item in
inventory at a particular distribution center or sourcing it from one of
our nearby distribution centers or a wholesaler.

Orders received during the day are picked, packed, and assembled using a
variety of automated equipment. This is performed at the appropriate
distribution center for delivery the following day to customers within the
next-day service area for that center. Depending on population density and
logistical factors, the next-day service area can cover up to a 400-mile
radius from the distribution center. Based on an optimized route structure
allowing us to schedule specific vehicles and delivery times, our software
can determine the optimal sequence in which orders are to be loaded into
delivery vehicles. The vehicles are owned or leased by us or operated by
common or contract carriers, depending on the cost effectiveness of each
alternative. In 1998, we began converting a portion of our dedicated
delivery routes in the U.S. to our private delivery fleet. This delivery
strategy allows us to gain better efficiency on our routes and provides our
customers with better service.

Procurement. Our computer system monitors inventory levels and forecasts
demand for each item we stock and recommends the timing and amount of
future purchases. We have centralized the rebuying function for those items
most frequently ordered by our customers, which we believe contributes to
more efficient purchasing decisions and lower procurement costs.

To assist vendor selection decisions and reduce inventory cost, we have
developed and use a detailed vendor management and evaluation program. This
program enables our central purchasing staff to measure and evaluate the
performance of our vendors in a number of key areas.

Foreign operations. In Australia and Canada, our operations are structured
similarly to our domestic operations. Within those countries, most
distribution facilities are integrated on the same computer system. This
allows us to take advantage of efficiencies and centralize many common
administrative processes. It also positions these foreign operations to
serve large corporate customers on a coordinated national basis.

In the U.K., we have restructured our warehouse and delivery network and
have installed a new order-management system with cross-border
capabilities. In France, our contract stationer subsidiary is benefiting
from improved warehousing processes. These operations, along with our
strong JPG subsidiary in France, will provide a foundation for a successful
Pan-European business.
<PAGE>

Employees

At December 31, 1999, we had approximately 12,200 full-time and part-time
employees ("associates") worldwide. Of these, approximately 4,700 were
employed primarily in marketing and sales, order processing, and customer
service; approximately 3,800 were located at our distribution centers in
inventory receipt and storage, order filling, and as delivery vehicle
drivers; and approximately 3,700 were employed in other operations,
management, and administration. Part-time employees supplement our
associates in customer service and order filling during those periods each
day when there are surges in incoming calls or outgoing orders.

Competition

We face a highly competitive environment. Competition is based principally
on price, service, and customer relationships. We are one of the premier
distributors of products for the office with operations in Australia,
Belgium, Canada, France, Spain, the United Kingdom and the United States.

United States. During the last several years, a number of major, publicly
held participants have acquired other participants in order to establish
national distribution networks similar to our own. A number of these major
participants have grown at rapid rates. During 1999, two large office
products companies merged. Some of our competitors have greater financial
resources and potential purchasing leverage than we do. The contract
stationer and direct marketing efforts of the office products superstores
also benefit from their national advertising and franchising programs. We
also compete with numerous local and regional contract stationers, many of
which have long-standing customer relationships.

We believe our ability to link together our network of domestic
distribution centers into an integrated national system makes us distinctly
competent in our ability to deliver consistent products, prices, and
service across all locations of multi-site customers.

As indicated earlier, some companies are starting to use integrated
procurement systems and Internet-based systems to purchase office products
and office-related services and supplies. Other companies that provide
office-related services and supplies, including document management,
printing services, industrial supplies, information technology and computer
supplies, and companies that provide Internet ordering functionality are
providing some competition today and will likely provide increased
competition in the future. We have developed systems for multi-vendor,
integrated procurement. In addition, we continue to enhance electronic
ordering functionality for our customers and actively encourage our
customers to expand their use of electronic ordering with us.

International. In our operations in Australia, Belgium, Canada, France,
Spain, and the United Kingdom, we compete with many local distributors and
with several U.S.-based office products distribution companies. We compete
through the strength of our integrated systems, customer service, and
competitive pricing.
<PAGE>

ITEM 2. PROPERTIES
- ------ ----------

Our corporate headquarters and our Chicago metropolitan area distribution center
are located in a combined facility that we own at 800 W. Bryn Mawr Avenue in
Itasca, Illinois, a suburb northwest of Chicago (1). As of February 29, 2000,
we operated 64 distribution centers, including the suburban Chicago distribution
center, at the following locations:

AUSTRALIA CANADA (4)
---------- ------
Adelaide, South Australia Calgary, Alberta
Brisbane, Queensland Moncton, New Brunswick
Canberra, Australian Capital Montreal, Quebec
Territory Ottawa, Ontario
Kalgoorlie, Western Australia Toronto, Ontario
Melbourne, Victoria Vancouver, British Columbia
Perth, Western Australia Winnipeg, Manitoba
Sydney, New South Wales

FRANCE UNITED KINGDOM
------ --------------
Paris (2) Chorley, England
Doncaster, England (5)

SPAIN
-----
Madrid (Bilbao)

UNITED STATES
-------------
Albuquerque, New Mexico Miami, Florida
Atlanta (Smyrna), Georgia Milwaukee (New Berlin), Wisconsin
Boise, Idaho Minneapolis (Golden Valley), Minnesota
Boston (Billerica), Massachusetts Nashville, Tennessee
Burlington, Vermont New Castle, Delaware
Charlotte, North Carolina New York (Carlstadt, New Jersey),
Chicago (Itasca), Illinois New York
Cleveland (Independence), Ohio Norfolk (Chesapeake), Virginia
Columbus, Ohio Oklahoma City, Oklahoma
Dallas (Garland), Texas Orlando, Florida
Denver, Colorado Philadelphia (Bristol), Pennsylvania
Detroit (Warren), Michigan Phoenix, Arizona
Hartford (Naugatuck), Connecticut Pittsburgh, Pennsylvania
Honolulu, Hawaii (3) Portland, Maine
Houston, Texas Portland, Oregon (2)
Indianapolis, Indiana Reno, Nevada
Kansas City, Missouri Rochester, New York
Las Vegas, Nevada St. Louis, Missouri
Los Angeles (Garden Grove), Salt Lake City, Utah
California San Francisco (Menlo Park),
Louisville, Kentucky California
Maumee, Ohio Seattle (Kent), Washington (2)
Memphis (Southaven, Mississippi), Washington (Elkridge, Maryland), DC
Tennessee
<PAGE>

(1) Some headquarters departments are located in leased office space in
Schaumburg, Illinois.

(2) Consists of two facilities.

(3) Consists of three owned facilities located on the islands of Oahu, Maui,
and Hawaii and two leased facilities on the islands of Oahu and Kauai. We
also lease and operate three retail stores on the island of Oahu.

(4) We also operate approximately 70 retail stores throughout Canada.

(5) Land subject to a long leasehold, with a lease term in excess of 50 years.

The majority of our distribution centers are leased with lease terms expiring
between 2000 and 2006. We own facilities in Arizona, California, Florida,
Georgia, Hawaii, Illinois, Massachusetts, Michigan, Minnesota, Missouri, North
Carolina, Ohio, Pennsylvania, Texas, and Washington and in Australia, Canada,
France, Spain, and the United Kingdom.

In addition to the distribution centers listed above, we lease office space in
Ottawa, Illinois, and own facilities in Peru, Illinois; Bristol, Virginia; and
Casper, Wyoming; where we operate central telephone calling centers for incoming
orders and customer service. We also own a facility in Norman, Oklahoma, where
we operate an outbound telesales center. We also lease several sales offices
throughout the United States.

We own substantially all equipment used in our facilities.

ITEM 3. LEGAL PROCEEDINGS
- ------ -----------------

In December 1999, nine lawsuits were filed against the company, our directors,
and Boise Cascade Corporation arising out of BCC's proposal to acquire our
outstanding minority public shares. All nine cases were filed in New Castle
County, Delaware. The lawsuits allege, among other things, that BCC's proposal
was wrongful, unfair, and harmful to our public stockholders. On January 19,
2000, the court, upon stipulation of the parties, signed a consolidation order
that combined the nine cases into one matter. We believe there are valid factual
and legal defenses to these lawsuits and will vigorously defend all claims
alleged by the plaintiffs.

We are also involved in other litigation and administrative proceedings arising
in the normal course of our business. In the opinion of management, our
recovery, if any, or our liability, if any, under any pending litigation or
administrative proceedings, including that described in the preceding paragraph,
would not materially affect our 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
1999.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
- ------ -------------------------------------------------------------
MATTERS
-------

Our common stock is listed on the New York Stock Exchange. The high and low
sales prices for our common stock are presented in Note 11, "Quarterly Results
of Operations (unaudited)," of the Notes to Financial Statements in Part II,
Item 8 of this Form 10-K. At February 29, 2000, the approximate number of
holders of common shares was 6,400.

We intend to retain our earnings to finance our growth and for general corporate
purposes and, therefore, do not anticipate paying cash dividends in the
foreseeable future.
<PAGE>

ITEM 6. SELECTED FINANCIAL DATA
- ------ -----------------------

The following table sets forth selected historical financial data for the
Company for each of the five years 1999 through 1995. The selected historical
income statement data and balance sheet data as of December 31, 1999, 1998,
1997, 1996, and 1995, have been derived from our audited financial statements.
The data set forth below should be read in conjunction with, and are qualified
in their entirety by reference to, the disclosures in Items 7 and 8 of this Form
10-K.
<TABLE>
<CAPTION>

Year Ended December 31
---------------------------------------------------------------
1999 (1) 1998 (2) 1997 (3) 1996 (4) 1995 (5)
----------- ----------- ----------- ----------- -----------
(in thousands, except share and operating data)
<S> <C> <C> <C> <C> <C>
Income Statement Data
Net Sales $3,381,725 $3,067,327 $2,596,732 $1,985,564 $1,315,953
Income from operations 153,443 120,494 119,250 101,300 69,467
Net income 74,857 53,067 56,886 55,349 43,179

Basic and diluted earnings per share
(pro forma 1995) (6): $1.14 $.81 $.89 $.88 $.70

Balance Sheet Data
December 31
--------------------------------------------------------------
1999 1998 1997 1996 1995
---------- ---------- ---------- ---------- ----------
Working capital $ 227,069 $ 230,016 $ 231,357 $ 168,641 $ 145,824
Total assets 1,536,317 1,461,745 1,291,488 905,362 544,124
Total long-term obligations 360,133 420,250 384,790 170,030 14,358
Shareholders' equity 633,106 562,914 505,635 404,785 339,417
</TABLE>
(1) During 1999, we revised the amount of the restructuring reserve that we
established in the fourth quarter of 1998 for our U.K. operations. As a
result, we recorded an increase to operating income of approximately $4.0
million ($2.7 million, net of tax benefit, or $.04 per share-diluted). For
more information about our restructuring and joint venture dissolution, see
"Other operating (income) expense" in Footnote 1, "Summary of Significant
Accounting Policies," of our Notes to Financial Statements in Part II, Item
8 of this Form 10-K. During 1999, we acquired two businesses. The
acquisitions were accounted for as purchases. Data for the year ended
December 31, 1999, include the results of operations of the acquired
businesses for the periods subsequent to their acquisitions.

(2) During 1998, we initiated a plan to restructure our operations in the
United Kingdom and terminated our joint venture with Otto Versand. As a
result, we estimated and recorded charges of $11.1 million ($7.4 million,
net of tax benefit, or $0.11 per share-diluted). Information about the
restructuring and joint venture dissolution are included in "Other
operating (income) expense" in Footnote 1, "Summary of Significant
Accounting Policies," of the Notes to Financial Statements included in Part
II, Item 8 of this form 10-K. During 1998, we acquired six businesses. The
acquisitions were accounted for as purchases. Data for the year ended
December 31, 1998, include the results of operations of the acquired
businesses for the periods subsequent to their acquisitions.
<PAGE>

(3) During 1997, we acquired eight businesses and entered into a joint venture.
The acquisitions were accounted for as purchases. Data for the year ended
December 31, 1997, include the results of operations of the acquired
businesses for the periods subsequent to their acquisitions.

(4) During 1996, we acquired 19 businesses. The acquisitions were accounted for
as purchases. Data for the year ended December 31, 1996, include the
results of operations of the acquired businesses for the periods subsequent
to their acquisitions.

(5) During 1995, we acquired 10 businesses. The acquisitions were accounted for
as purchases. Data for the year ended December 31, 1995, include the
results of operations of the acquired businesses for the periods subsequent
to their acquisitions.

(6) Information concerning basic and diluted earnings per share is included in
Note 1, "Summary of Significant Accounting Policies," of the Notes to
Financial Statements in Part II, Item 8 of this Form 10-K.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
- ------ ------------------------------------------------------------
AND RESULTS OF OPERATIONS
-------------------------

Financial Review
<TABLE>
<CAPTION>
Results of Operations
- -------------------------------------------------------------------------------------------
Excluding Excluding
As Non-routine As Non-routine
Reported Items Reported Items
1999 1999(1) 1998 1998(1) 1997
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net sales $3,381.7 $3,381.7 $3,067.3 $3,067.3 $2,596.7
Percent increase 10.2% 10.2% 18.1% 18.1% 30.8%

Cost of sales 2,511.9 2,512.7 2,278.8 2,277.9 1,941.7
Percent of net sales 74.3% 74.3% 74.3% 74.3% 74.8%

Gross profit 869.8 869.0 788.5 789.4 655.0
Percent of net sales 25.7% 25.7% 25.7% 25.7% 25.2%

Operating expenses 716.4 719.6 668.0 657.9 535.8
Percent of net sales 21.2% 21.3% 21.8% 21.4% 20.6%

Income from operations 153.4 149.4 120.5 131.6 119.3
Percent of net sales 4.5% 4.4% 3.9% 4.3% 4.6%

Interest expense 24.4 24.4 25.9 25.9 20.2

Income tax expense 55.6 54.2 42.8 46.5 42.9
Tax provision rate 42.7% 43.0% 44.8% 43.5% 43.0%

Net income $ 74.9 $ 72.2 $ 53.1 $ 60.5 $ 56.9
Percent of net sales 2.2% 2.1% 1.7% 2.0% 2.2%
- -------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

(1) Before impact of European restructuring and joint venture dissolution (see
'Restructuring Charge' section)

Net Sales Our business strategy over the past three years has included
aggressive sales growth. This has been accomplished principally by increasing
sales in existing operations and completing acquisitions. Same-location sales
growth was 8% for 1999 compared to 1998 and 11% for 1998 compared to 1997. Both
paper price changes and foreign currency fluctuations impact same-location sales
growth. Paper represents approximately 15% of net sales. Revenues from
operations outside the United States represent about 24% of net sales. Holding
paper prices constant and excluding the impact of foreign currency changes, our
same-location sales growth was not materially affected for 1999 and would have
been 12% for 1998. We completed two acquisitions in 1999, six acquisitions in
1998, and eight acquisitions in 1997(see "Acquisitions" section). Businesses
acquired during 1998 contributed approximately $36 million to our 1998 net sales
and approximately $65 million to our 1999 net sales. Businesses acquired during
1997 contributed approximately $167 million to our 1997 net sales and
approximately $356 million to our 1998 net sales. The increases are primarily
due to a full calendar year of ownership in the second year.

Cost of Sales and Gross Profit Cost of sales includes the cost of merchandise
sold, the cost to deliver products to customers, and the occupancy costs of our
facilities. Gross profit as a percent of net sales in 1999 was essentially flat
compared to 1998. Margins in several of our businesses improved in 1999,
primarily due to lower procurement costs. The improvements, however, were offset
by increasing global paper prices, which were not entirely passed on to
customers, and growth in our technology business, which has lower gross margins.

The 1998 increase in gross profit as a percent of net sales over 1997 was due,
in part, to having a full calendar year of results of our French direct
marketing subsidiary, Jean-Paul Guisset S.A. ("JPG"), included in 1998 (see
"Acquisitions" section). JPG has higher gross margins and higher operating
expenses than our other operations. The 1998 increase in gross profit was also
due to lower procurement costs and to leveraging our fixed occupancy costs over
a higher sales volume.

Operating Expenses Operating expenses primarily include selling, warehouse, and
administrative payroll; prospecting for direct marketing customers; systems
expenses and software amortization; travel and entertainment; and goodwill
amortization. The 1999 decrease in operating expenses as a percent of net sales,
before nonroutine items, compared to 1998, was partly due to lower operating
costs in Canada as we resolved operational challenges associated with the move
into our Toronto warehouse. The improvement was partly offset by increased
investment in our growth initiatives, including Boise Express, our middle-market
sales effort, and expansion of our electronic commerce capabilities. Goodwill
amortization was 0.4% of net sales in both 1999 and 1998.

The 1998 increase in operating expenses as a percent of net sales over 1997 was
partly due to having a full year of operating expenses for JPG. JPG has higher
gross margins and higher operating expenses than our other operations. The
increase was also due to higher operating cost structures, relative to revenues,
for several of our European operations; additional costs as a result of
operational challenges associated with the move into a new Toronto warehouse;
and costs for customer prospecting as part of our entry into the Belgium direct
marketing business. In addition, operating expenses were negatively impacted by
costs related to our European restructuring and joint venture dissolution (see
"Restructuring Charge" section). Goodwill amortization was 0.4% of net sales in
both 1998 and 1997.
<PAGE>

Income from Operations Excluding the impact of nonroutine items, income from
operations for 1999 as a percent of net sales was flat compared to 1998. Income
from operations for 1999 includes an improvement of approximately $4.2 million
in our European operations affected by our restructuring efforts. This
improvement is primarily non-cash and is mainly due to the elimination of losses
from our joint venture with Otto Versand. Excluding the impact of nonroutine
items, income from operations for 1998 as a percent of net sales was relatively
flat compared to 1997.

Interest Expense Interest expense decreased in 1999 over 1998 primarily due to
lower debt levels. Interest expense increased in 1998 over 1997 due, in part,
to debt incurred in conjunction with our acquisition and capital spending
programs. The increase in 1998 was also due to our issuance of $150 million of
7.05% Notes in May 1998 which have a slightly higher interest rate than the
debt, which was displaced, under our revolving credit agreement.

Income Tax Expense The decrease in our tax rate in 1999 was partly due to the
decreased impact of nondeductible goodwill relative to earnings and to a
reduction in the tax rate in France. The increase in our tax rate in 1998
resulted partly from a shift in earnings among our foreign operations and the
impact of nondeductible goodwill. The 1998 tax rate was also significantly
increased by the European restructuring and joint venture dissolution (see
"Restructuring Charge" section).

Net Income Excluding nonroutine items associated with restructuring, net income
for 1999 increased 19% over net income for 1998. Excluding the impact of the
European restructuring and joint venture dissolution, 1998 net income increased
6% over net income for 1997.

BUSINESS OUTLOOK
Our core North American operations experienced solid same-location sales growth
and operating profits in 1999. We continue to expect our cross-selling efforts
in computer supplies, furniture, paper, and promotional products to result in
additional sales to our existing customers. We have developed an approach to
serve the middle-market, which represents businesses of 25 to 100 employees.
Boise Express, our custom-designed sales effort, targets this market. To
accelerate this opportunity, we are opening a new outbound telesales center in
the first quarter of 2000. Growth potential also exists in developing
procurement management offerings for our customers, including further
investments in components of integrated supply and expansion of our electronic
commerce capabilities. The pace of our revenue growth will partially depend on
the success of these initiatives. We are seeing merger-driven consolidations not
only among some of our large customers but also among some of our key
competitors. As a result, continued same-location sales growth will depend, in
part, on conditions outside our control.

Our sales growth also depends, in part, on our ability to identify appropriate
acquisition candidates in the U.S. and internationally. Over the past several
years, acquisitions have contributed significantly to our revenue growth.
Although our acquisition pace has slowed, acquisitions remain an important part
of our growth strategy. We will continue to pursue acquisitions of businesses
that fit our business model.

Our French and Australian operations are performing well, posting double-digit
sales growth and operating income improvement. We are continuing to develop our
direct marketing operations in Spain and Belgium, both of which are progressing
nicely. In the U.K., our sales are lower after the restructuring, which is
consistent with our expectations, but our operating cost structure is much
improved. We plan to
<PAGE>

use the new order-management system we recently installed in the U.K. to support
our pan-European contract operations.

We believe our gross margins will continue to be impacted principally by the
competitive environment in which we operate, including the pricing strategies
established by our competitors. While we believe our efforts to lower our
procurement costs will be successful over time, there is no assurance that our
gross margins may not decline under competitive pressure. In addition, office
paper, which represents about 15% of our net sales, has historically impacted
our gross margins and operating margins as paper prices rise or fall. We are
uncertain as to the timing or magnitude of any future changes in paper prices.
Also, it is difficult to accurately predict what favorable or adverse impact
changes in paper prices might have on our future gross margins or financial
results. However, we believe our office paper business can be managed to
maintain acceptable margins and cost effectively provide our customers with this
important product. To a lesser extent, our gross margins will be impacted by our
ability to lower our delivery costs and leverage our fixed occupancy costs.
Continued increases in fuel prices will likely have an adverse affect on our
delivery costs. Gross margins and operating expense ratios generally vary among
product categories, distribution channels, and geographic locations. As a
result, we expect some fluctuation in these ratios over time as our sales mix
evolves.

We believe inflation has not had a material impact on our financial condition or
results of operations. However, there can be no assurance that our business will
not be affected by inflation in the future.

Although particular items we sell are seasonal (e.g. calendars and specialty
gift items), our sales overall are not subject to significant seasonal
variations.

RESTRUCTURING CHARGE
In the fourth quarter of 1998, we initiated a plan to restructure our operations
in the United Kingdom (the "restructuring"). The restructuring involved closing
seven small facilities and an administrative office and integrating selected
functions of our U.K. subsidiaries. The closures were completed during 1999.
Also during December 1998, we terminated our joint venture with Otto Versand
("Otto") at a cost of approximately $4.0 million. As a result of the dissolution
of the joint venture, Otto acquired our 50% interest in the joint venture. In
addition, we repurchased Otto's 10% ownership interest in JPG. Now JPG is 100%
owned by the Company.

As a result of the restructuring and joint venture dissolution, we estimated and
recorded charges of $11.1 million ($7.4 million, net of tax benefit or $.11 per
share-diluted). These charges, with the exception of inventory-related amounts,
were included in "Other operating expense" in the Statements of Income. The
inventory-related amounts totaled about $1.0 million and were reflected in "Cost
of Sales" in the Statements of Income.

During the second quarter of 1999, we revised the amount of the restructuring
reserve that we established in the fourth quarter of 1998 for our U.K.
operations. The restructuring program was less costly than originally
anticipated due to lower legal and professional fees, a sublease on one of the
facilities, a decision to retain a small printing portion of the business, and
fewer terminations of employees. As a result, we recorded an increase to
operating income of approximately $4.0 million ($2.7 million, net of tax benefit
or $.04 per share-diluted) in the second quarter of 1999. Of this amount, about
$3.2 million was
<PAGE>

included in "Other operating income" and about $0.8 million was included in
"Cost of sales" in the Statements of Income.

<S> <C> <C> <C> <C> <C> <C>
1998 Expense recorded $ 1,400 $ 900 $ 3,400 $ 4,400 $ 1,000 $11,100
Charges against
reserve (200) - - (3,600) - (3,800)
Balance at ------- ------- ------- ------- ------- -------
December 31, 1998 1,200 900 3,400 800 1,000 7,300
Charges against
reserve (700) (200) (400) (300) (200) (1,800)
Reserves credited
to income (500) (600) (1,600) (500) (800) (4,000)
------- ------- ------- ------- ------- -------
Balance at
December 31, 1999 $ - $ 100 $ 1,400 $ - $ - $ 1,500
======== ======= ======= ======= ======= =======
</TABLE>
Termination payments to employees are the result of workforce reductions of
about 90 warehouse and administrative support associates.

ACQUISITIONS
In January 1999, we acquired the office supply business of Wallace Computer
Services, with annualized sales of about $40 million at the time of
announcement. In September 1999, we acquired Supply West, based in Australia,
with annualized sales of about US$10 million at the time of announcement.

In 1998, we acquired six businesses, including one in Spain and two in Canada.
The annualized sales of the acquisitions completed in 1998 were approximately
US$62 million at the time of announcement. In December 1998, the Company and
Otto Versand dissolved the joint venture that we entered into in 1997. Otto
acquired our 50% interest in the joint venture. In addition, we repurchased
Otto's 10% interest in JPG. JPG is now 100% owned by the Company.

In 1997, we acquired eight businesses and entered into a joint venture,
including two companies in France and one in the United Kingdom. The annualized
sales of the acquisitions completed in 1997 were US$340 million at the time of
announcement.

Goodwill, net of amortization, was $475 million at December 31, 1999 and $495
million at December 31, 1998. We used purchase accounting to record our
acquisitions. For more information on our acquisitions, see Note 8 in our Notes
to Financial Statements.
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES
Our principal requirements for cash have been to make acquisitions, fund
technology development and working capital needs, expand our facilities at
existing locations, and open new distribution centers. The execution of our
strategy for growth, including acquisitions, technology developments, expansion
at existing locations, and the relocation of several existing distribution
centers into new and larger facilities, is expected to require capital outlays
over the next several years. In 1999, capital expenditures, excluding
acquisitions, were approximately $12 million for capitalized software and
approximately $48 million for facility expansions and relocations and equipment.
Capital expenditures in 2000 are expected to approach $100 million, excluding
acquisitions, and to include the same types of items as in the past few years.

To finance our capital requirements, we expect to rely upon funds from a
combination of sources. In addition to cash flow from operations, we have a $450
million revolving credit agreement that expires in 2001 and provides for
variable rates of interest based on customary indices. The revolving credit
agreement is available for acquisitions and general corporate purposes. It
contains financial and other covenants, including a negative pledge and
covenants specifying a minimum fixed charge coverage ratio and a maximum
leverage ratio. The amount outstanding under this agreement totaled $190 million
at December 31, 1999. The weighted average interest rate for these borrowings
was 5.5% at December 31, 1999. We may, subject to the covenants contained in the
credit agreement and to market conditions, refinance existing debt or raise
additional funds through the agreement and through other external debt or equity
financings in the future. In October 1998, we entered into an interest rate swap
with a notional amount of $25 million that expires in 2000. The swap results in
an effective fixed interest rate of 5.0% with respect to $25 million of our
revolving credit agreement borrowings.

In addition to the amount outstanding under the revolving credit agreement and
Notes, we had short-term notes payable of $19.3 million at December 31, 1999.
The maximum amount of short-term notes payable outstanding during the year ended
December 31, 1999, was $111.9 million. The average amount of short-term notes
payable during the 12 months ended December 31, 1999, was $66.6 million. The
weighted average interest rate for these borrowings was 5.5%. For more
information about our debt, see Note 4 in our Notes to Financial Statements.

During 1998, we filed a registration statement with the Securities and Exchange
Commission to register $300 million of shelf capacity for debt securities. In
May 1998, we issued $150 million of 7.05% Notes ("Notes") under this
registration statement. The Notes are due May 15, 2005. Proceeds from the
issuance were used to repay borrowings under our revolving credit agreement. We
have $150 million remaining under this registration statement.

In addition to borrowings under the revolving credit agreement, Notes, and
short-term borrowings, debt assumed through acquisitions was $3.4 million and
$6.1 million at December 31, 1999 and 1998. As a result of our acquisition
activity, we also had short-term acquisition liabilities of $48.3 million,
primarily for the JPG price supplement, and $5.7 million at December 31, 1999
and 1998, which were included in "Other accrued liabilities." We had no long-
term acquisition liabilities at December 31, 1999. We had long-term acquisition
liabilities of $51.6 million, primarily for the JPG price supplement, at
December 31, 1998, which were included in "Other long-term liabilities."

On June 17, 1996, we filed a registration statement with the Securities and
Exchange Commission for 4.4 million shares of common stock to be offered by the
Company from time to time in connection with future acquisitions. At December
31, 1999, 3.8 million shares remain unissued under this registration statement.
<PAGE>

On September 25, 1997, we issued 2.25 million shares of common stock at $21.55
per share to Boise Cascade Corporation for total proceeds of $48.5 million. At
December 31, 1999, Boise Cascade Corporation owned 81.1% of our outstanding
common stock. In December 1999, BCC announced a proposal to acquire our
outstanding public shares. On March 12, 2000, BCC and BCOP entered into an
Agreement and Plan of Merger in which BCC would purchase all of BCOP's publicly
held shares for $16.50 in cash. In accordance with that Agreement, BCC commenced
a tender offer for our minority public shares on March 22, 2000. The offer will
expire on April 19, 2000, unless it is extended. If BCC is successful in
obtaining a majority of the minority shares, it will purchase the remaining
shares through a short-form merger. If BCC completes the tender and merger, we
will again become a wholly-owned subsidiary of BCC.

FINANCIAL CONDITION
Cash provided by operations in 1999 was $137 million. This was the result of
$125 million of net income, depreciation and amortization, and other noncash
items and a $12 million net decrease in certain components of working capital.
Net cash used for investment was $83 million, which included $48 million for
facility expansions and relocations and equipment and $9 million for
acquisitions. Net cash used for financing was $61 million, which included a $53
million decrease in short-term borrowings and a $9 million net decrease in long-
term debt.

Cash provided by operations in 1998 was $73 million. This was the result of $107
million of net income, depreciation and amortization, and other noncash items,
offset by a $34 million net increase in certain components of working capital.
Net cash used for investment was $115 million, which included $66 million for
facility expansions and relocations and equipment and $27 million for
acquisitions. Net cash provided by financing was $44 million, which included a
$49 million increase in short-term borrowings, offset by a $4 million net
decrease in long-term debt.

Cash provided by operations in 1997 was $120 million. This was the result of $98
million of net income, depreciation and amortization, and other noncash items,
and a $22 million net decrease in certain components of working capital. Net
cash used for investment was $350 million, which included $67 million for
facility expansions and relocations and equipment and $254 million for
acquisitions. Net cash provided by financing was $246 million, which included
$212 million borrowed under the revolving credit agreement and $48 million of
proceeds from the issuance of our common stock, offset by the payment of $13
million of short-term borrowings.

DISCLOSURES OF CERTAIN FINANCIAL MARKET RISKS
Changes in interest rates and currency rates expose the company to financial
market risk. Our debt is a combination of variable-rate and fixed-rate debt. We
experience only modest changes in interest expense when market interest rates
change. Consequently, our market risk-sensitive instruments do not subject us to
material market risk exposure. Approximately 24% of our 1999 revenues were
generated from operations outside the United States. Our operations in
Australia, Belgium, Canada, France, Spain, and the United Kingdom are
denominated in currencies other than U.S. dollars. Most foreign currency
transactions have been conducted in the local currency, with minimal cross-
border product movement, limiting our exposure to changes in currency rates.
Changes in our debt and our continued international expansion could increase
these risks. To manage volatility relating to these exposures, we may enter into
various derivative transactions such as interest rate swaps, rate hedge
agreements, and forward exchange contracts. We use interest rate swaps and rate
hedge agreements to hedge underlying debt obligations or anticipated
transactions. For qualifying hedges, our financial statements reflect interest
rate differentials as adjustments to interest expense over the life of the swap
or underlying debt. We defer gains and losses related to qualifying hedges of
foreign currency firm commitments and anticipated transactions, and we
<PAGE>

recognize such gains and losses in income or as adjustments of carrying amounts
when the hedged transaction occurs. We mark to market all other forward exchange
contracts and include unrealized gains and losses in current period net income.
We had no material exposure to losses from derivative financial instruments held
at December 31, 1999. We do not use derivative financial instruments for trading
purposes.

The following table provides information about our derivative financial
instruments and other financial instruments that are sensitive to changes in
interest rates, including interest rate swaps and debt obligations. For debt
obligations, the table presents principal cash flows and related weighted
average interest rates by expected maturity dates. For interest rate swaps, the
table presents notional amounts and weighted average interest rates by expected
maturity dates. Notional amounts are used to calculate the contractual payments
to be exchanged under the contract. For obligations with variable interest
rates, the table sets forth payout amounts based on the current rates and does
not attempt to project future interest rates.
<TABLE>
<CAPTION>

December 31 December 31
1999 1998
------------ ------------
Fair Fair
(in millions) 2000 2001 2002 2003 2004 Thereafter Total Value Total Value
----- ------ ----- ----- ----- ---------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Debt
Short-term borrowings $19.3 - - - - - $ 19.3 $ 19.3 $ 72.1 $ 72.1
Average interest rates 5.7% - - - - - 5.7% - 6.3% -
Long-term debt
Fixed rate debt $ 2.2 $ 1.0 $25.7 $ 0.4 $ 0.2 $150.6 $180.1 $171.2 $177.7 $173.8
Average interest rates 6.0% 5.5% 5.0% 6.6% 2.9% 7.0% 6.7% - 6.7% -
Variable rate debt $ 0.7 $165.7 $ 0.7 $ 0.3 - - $167.4 $167.4 $178.6 $178.6
Average interest rates 3.7% 6.9% 3.7% 3.7% - - 6.8% - 5.8% -

Interest rate swaps
Notional principal
amount of interest
rate exchange agreements
(variable to fixed) $25.0 - - - - - $ 25.0 $ 0.4 $ 25.0 $ 0.2

Average pay rate 4.6% - - - - - 4.6% - 4.6% -
Average receive rate 5.2% - - - - - 5.2% - 5.2% -

</TABLE>

NEW ACCOUNTING STANDARDS
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities." This Statement establishes accounting and reporting
standards requiring that every derivative instrument (including certain
derivative instruments embedded in other contracts) be recorded in the balance
sheet as either an asset or liability measured at its fair value. In July 1999,
the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 137 that delayed the effective date of Statement 133
until fiscal years beginning after June 15, 2000. We plan to adopt this
Statement in the first quarter of
<PAGE>

2001. We are in the process of reviewing this Statement. Adoption of this
Statement is not expected to have a significant impact on our results of
operations or financial position.

YEAR 2000 ISSUE
We have incurred costs over the last several years for year 2000-compliant
computer system additions, replacements, and upgrades in order to realize
efficiencies and process improvements. These costs were generally capitalized
and amortized over the expected useful life of the software (see Note 1 in the
Notes to Financial Statements). Many of our existing computer systems were
already year 2000-compliant, and we modified noncompliant systems before the end
of 1999. The overall incremental costs to make our systems year 2000-compliant
were about $4.5 million. These costs were expensed as incurred. Our critical
business systems operated smoothly through the transition to the year 2000, and
service to our customers was not interrupted.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
- ------- ----------------------------------------------------------

Information concerning quantitative and qualitative disclosures about market
risk is included under the caption "Disclosures of Certain Financial Market
Risks" of our management's discussion and analysis of financial condition and
results of operations.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
- ------ -------------------------------------------

INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>

Page
----
<S> <C>
Report of Independent Public Accountants F-1
Balance Sheets as of December 31, 1999 and 1998 F-2
Statements of Income for the years ended December 31, 1999, 1998, and 1997 F-3
Statements of Cash Flows for the years ended December 31, 1999, 1998, and 1997 F-4
Statements of Shareholders' Equity for the years ended December 31, 1999, 1998, and 1997 F-5
Notes to Financial Statements F-6
Report of Management F-7
</TABLE>
<PAGE>

Report of Independent Public Accountants

To the Shareholders of Boise Cascade Office Products Corporation:

We have audited the accompanying balance sheets of Boise Cascade Office Products
Corporation (a Delaware corporation) and subsidiaries as of December 31, 1999
and 1998, and the related statements of income, cash flows, and shareholders'
equity for the years ended December 31, 1999, 1998, and 1997. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Boise Cascade Office Products
Corporation and subsidiaries as of December 31, 1999 and 1998, and the results
of their operations and their cash flows for each of the three years in the
period ended December 31, 1999, in conformity with generally accepted accounting
principles.

/s/Arthur Andersen LLP

Boise, Idaho
January 28, 2000

F-1
<PAGE>

Balance Sheets
<TABLE>
<CAPTION>

December 31
1999 1998
---- ----
(in thousands, except share information)
<S> <C> <C>
Assets
- ------
Current
Cash and cash equivalents $ 25,038 $ 31,838
Receivables, less allowances of $9,112 and $9,539 449,753 394,013
Inventories 234,313 226,955
Deferred income tax benefits 17,121 14,335
Other 34,285 31,532
---------- ----------
760,510 698,673
---------- ----------
Property
Land 28,292 28,572
Buildings and improvements 155,798 143,192
Furniture and equipment 244,481 214,611
Accumulated depreciation (182,190) (149,071)
---------- ----------
246,381 237,304
---------- ----------
Goodwill, net of amortization of $51,908 and $37,108 475,271 494,883
Other assets 54,155 30,885
---------- ----------
Total assets $1,536,317 $1,461,745
========== ==========

Liabilities and Shareholders' Equity
- ------------------------------------
Current
Notes payable $ 19,300 $ 72,100
Current portion of long-term debt 2,810 2,065
Accounts payable
Trade and other 328,412 279,928
Boise Cascade Corporation 35,608 29,297
---------- ----------
364,020 309,225
---------- ----------
Accrued liabilities
Compensation and benefits 47,256 38,144
Income taxes payable 16,910 796
Taxes, other than income 11,691 9,466
Other 71,454 36,861
---------- ----------
147,311 85,267
---------- ----------
533,441 468,657
---------- ----------
Other
Long-term debt, less current portion 344,386 354,224
Other 25,384 75,950
---------- ----------
369,770 430,174
---------- ----------
Commitments and contingent liabilities
Shareholders' Equity
Common stock, $.01 par value, 200,000,000 shares
authorized; 65,806,612 and 65,758,524 shares issued
and outstanding at December 31, 1999 and 1998 658 658
Additional paid-in capital 359,643 359,224
Retained earnings 283,337 208,480
Accumulated other comprehensive loss (10,532) (5,448)
---------- ----------
Total shareholders' equity 633,106 562,914
---------- ----------

Total liabilities and shareholders' equity $1,536,317 $1,461,745
========== ==========
</TABLE>
The accompanying notes are an integral part of these Financial Statements.

F-2
<PAGE>

Statements of Income
<TABLE>
<CAPTION>

Year ended December 31
1999 1998 1997
------------- ------------ ------------
(in thousands, except share information)
<S> <C> <C> <C>

Net sales $3,381,725 $3,067,327 $2,596,732
Cost of sales, including inventory purchased from
Boise Cascade Corporation of $306,414,
$278,720, and $228,189 2,511,882 2,278,845 1,941,702
---------- ---------- ----------
Gross profit 869,843 788,482 655,030
---------- ---------- ----------
Selling and warehouse operating expense 653,575 593,672 483,241
Corporate general and administrative expense,
including amounts paid to Boise Cascade
Corporation of $3,272, $2,578, and $2,578 51,220 51,505 41,606
Goodwill amortization 14,800 12,673 10,933
Other operating (income) expense (3,195) 10,138 -
---------- ---------- ----------
716,400 667,988 535,780
---------- ---------- ----------
Income from operations 153,443 120,494 119,250
Interest expense 24,387 25,914 20,165
Other income, net 1,371 1,331 699
---------- ---------- ----------
Income before income taxes 130,427 95,911 99,784
Income tax expense 55,570 42,844 42,898
---------- ---------- ----------
Net income $ 74,857 $ 53,067 $ 56,886
========== ========== ==========

Earnings per share-basic $1.14 $.81 $.89
===== ==== ====

Average common shares outstanding-basic 65,795,674 65,741,572 64,133,989
========== ========== ==========

Earnings per share-diluted $1.14 $.81 $.89
===== ==== ====

Average common shares outstanding-diluted 65,811,833 65,791,840 64,252,359
========== ========== ==========
</TABLE>

The accompanying notes are an integral part of these Financial Statements.

F-3
<PAGE>

Statements of Cash Flows
<TABLE>
<CAPTION>
Year ended December 31
1999 1998 1997
--------- ---------- ----------
(in thousands)
<S> <C> <C> <C>
Cash provided by (used for) operations
Net income $ 74,857 $ 53,067 $ 56,886
Items in income not using (providing) cash
Depreciation and amortization 60,698 50,911 41,088
Deferred income taxes (6,544) (5,087) (167)
Restructuring charge and writedown of assets (3,988) 7,981 -
Receivables (55,740) (30,398) 2,230
Inventories (3,909) (26,007) 555
Accounts payable and accrued liabilities 62,100 28,250 35,912
Current and deferred income taxes 4,635 896 (9,039)
Other, net 5,022 (6,243) (7,558)
-------- --------- ---------
Cash provided by operations 137,131 73,370 119,907
-------- --------- ---------

Cash used for investment
Expenditures for property and equipment (47,628) (65,974) (66,876)
Acquisitions (9,369) (27,282) (254,025)
Other, net (25,580) (21,488) (29,047)
-------- --------- ---------
Cash used for investment (82,577) (114,744) (349,948)
-------- --------- ---------

Cash provided by (used for) financing
Additions to long-term debt 80,800 210,000 211,988
Payments of long-term debt (89,893) (214,385) -
Notes payable (52,800) 48,800 (13,400)
Sale of stock - - 48,463
Other, net 539 42 (1,017)
-------- --------- ---------
Cash provided by (used for) financing (61,354) 44,457 246,034
-------- --------- ---------

Increase (decrease) in cash and cash equivalents (6,800) 3,083 15,993
Balance at beginning of the year 31,838 28,755 12,762
-------- --------- ---------
Balance at end of the year $ 25,038 $ 31,838 $ 28,755
======== ========= =========
</TABLE>
The accompanying notes are an integral part of these Financial Statements.

F-4
<PAGE>

Statements of Shareholders' Equity
(in thousands, except share information)
<TABLE>
<CAPTION>

Accumulated
Total Additional Other
Shares For the years ended Shareholders' Common Paid-In Retained Comprehensive
Outstanding December 31, 1997, 1998, and 1999 Equity Stock Capital Earnings Income (Loss)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
62,750,318 Balance at December 31, 1996 $404,785 $628 $304,134 $ 98,527 $ 1,496
- ------------------------------------------------------------------------------------------------------------------------
Comprehensive income
Net income 56,886 56,886
Other comprehensive income (loss),
net of tax
Cumulative foreign currency
translation adjustment (8,135) (8,135)
Minimum pension liability adjustment (394) (394)
--------
Other comprehensive loss (8,529)
--------
Comprehensive income 48,357
--------
563,472 Stock issued for acquisitions 3,632 5 3,627
24,468 Stock options exercised 374 374
2,250,000 Issuance of stock 48,487 23 48,464
- ------------------------------------------------------------------------------------------------------------------------
65,588,258 Balance at December 31, 1997 505,635 656 356,599 155,413 (7,033)
- ------------------------------------------------------------------------------------------------------------------------
Comprehensive income
Net income 53,067 53,067
Other comprehensive income (loss),
net of tax
Cumulative foreign currency
translation adjustment,
net of reclassification 2,218 2,218
Minimum pension liability adjustment (633) (633)
--------
Other comprehensive income 1,585
--------
Comprehensive income 54,652
--------
17,932 Stock issued for acquisitions 20 20
152,334 Stock options exercised 2,607 2 2,605
- ------------------------------------------------------------------------------------------------------------------------
65,758,524 Balance at December 31,1998 562,914 658 359,224 208,480 (5,448)
- ------------------------------------------------------------------------------------------------------------------------
Comprehensive income
Net income 74,857 74,857
Other comprehensive income (loss),
net of tax
Cumulative foreign currency
translation adjustment (5,653) (5,653)
Minimum pension liability adjustment 569 569
--------
Other comprehensive loss (5,084)
--------
Comprehensive income 69,773
--------
41,688 Stock issued for acquisitions 333 333
6,400 Stock options exercised 86 86
- ------------------------------------------------------------------------------------------------------------------------
65,806,612 Balance at December 31, 1999 $633,106 $658 $359,643 $283,337 $(10,532)
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these Financial Statements.

F-5
<PAGE>

NOTES TO FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies

CONSOLIDATION AND USE OF ESTIMATES The financial statements include the accounts
of BCOP and all subsidiaries after elimination of intercompany balances and
transactions. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results may vary from those
estimates.

CASH AND CASH EQUIVALENTS Cash and cash equivalents include time deposits and
highly liquid investments with original maturities of three months or less.

INVENTORIES Inventories consist of finished goods and are valued at the lower of
cost or market, with cost based on an approximation of the first-in, first-out
valuation method.

PROPERTY Property and equipment are recorded at cost. Cost consists of
expenditures for major improvements and replacements, including interest cost
associated with capital additions. Capitalized interest was $204,000 in 1999 and
$1,025,000 in 1998. Gains and losses from sales and retirements are included in
income as they occur. Depreciation is computed using the straight-line method
over the following estimated useful lives:

Buildings and improvements 5 to 40 years
Furniture and fixtures 3 to 5 years
Machinery, equipment, and
delivery trucks 5 to 10 years
Leasehold improvements 5 to 10 years

GOODWILL Costs in excess of values assigned to the underlying net assets of
acquired companies are being amortized on the straight-line method over 40
years. Annually, we review the recoverability of goodwill. The measurement of
possible impairment is based primarily on the ability to recover the balance of
the goodwill from expected future operating cash flows of the businesses
acquired on an undiscounted basis. In management's opinion, no material
impairment exists at December 31, 1999.

DEFERRED SOFTWARE COSTS We defer certain software costs that benefit future
years. These costs are amortized on the straight-line method over the expected
useful life of the product. Balance Sheets include deferred software costs of
$31,989,000 and $26,932,000 at December 31, 1999 and 1998. Amortization of
deferred software costs totaled $8,645,000, $6,542,000, and $3,596,000 in 1999,
1998, and 1997 and is included in "Selling and warehouse operating expense."

REVENUE RECOGNITION Revenues are recorded at the time of shipment of products or
performance of services.

COST OF SALES Cost of sales related to merchandise inventory is primarily
determined using estimated product costs and adjusted to actual costs at the
time of physical inventories, which are taken at all locations at least
annually. Additional adjustments to reflect actual experience are recognized as
appropriate throughout the year. Cost of sales also includes the cost to deliver
products to customers and the occupancy costs of our facilities.
<PAGE>

ADVERTISING AND CATALOGS We expense the cost of advertising the first time the
advertising takes place, except for catalog costs. Costs of producing and
distributing sales catalogs are capitalized and charged to expense in the
periods in which the related sales occur. Advertising expense was $74,284,000 in
1999, $70,492,000 in 1998, and $54,776,000 in 1997 and is included in "Selling
and warehouse operating expense." Capitalized catalog costs totaled $16,121,000
and $14,636,000 at December 31, 1999 and 1998, and are included in "Other
current assets."

OTHER OPERATING (INCOME) EXPENSE In the fourth quarter of 1998, we initiated a
plan to restructure our operations in the United Kingdom (the "restructuring").
The restructuring involved closing seven small facilities and an administrative
office and integrating selected functions of our U.K. subsidiaries. The closures
were completed during 1999. Also during December 1998, we terminated our joint
venture with Otto Versand ("Otto") at a cost of approximately $4,000,000. As a
result of the dissolution of the joint venture, Otto acquired our 50% interest
in the joint venture. In addition, we repurchased Otto's 10% ownership interest
in Jean-Paul Guisset S.A. ("JPG"), our direct marketing subsidiary in France. We
now own 100% of JPG.

As a result of the restructuring and joint venture dissolution, we estimated and
recorded charges of $11,098,000 ($7,446,000, net of tax benefit or $.11 per
share-diluted). These charges, with the exception of inventory-related amounts,
were included in "Other operating expense" in the Statements of Income. The
inventory-related amounts totaled about $960,000 and were reflected in "Cost of
sales" in the Statements of Income.

During the second quarter of 1999, we revised the amount of the restructuring
reserve that we established in the fourth quarter of 1998 for our U.K.
operations. The restructuring program was less costly than originally
anticipated due to lower legal and professional fees, a sublease on one of the
facilities, a decision to retain a small printing portion of the business, and
fewer terminations of employees. As a result, we recorded an increase to
operating income of approximately $4,000,000 ($2,700,000, net of tax benefit or
$.04 per share-diluted) in the second quarter of 1999. Of this amount, about
$3,200,000 was included in "Other operating income" and about $800,000 was
included in "Cost of sales" in the Statements of Income.

The restructuring liability is included in "Accrued liabilities, other" in the
Balance Sheets. Changes in the reserve balance through December 31, 1999, were
as follows:
<TABLE>
<CAPTION>
Termination Legal and
payments to professional Leasehold Other Inventory
employees fees terminations costs writedown Total
----------- ------------ ------------ ------- --------- -------
(in thousands)
<S> <C> <C> <C> <C> <C> <C>
1998 Expense recorded $ 1,400 $ 900 $ 3,400 $ 4,400 $ 1,000 $ 11,100
Charges against
reserve (200) - - (3,600) - (3,800)
Balance at ------- ------- -------- -------- -------- ---------
December 31, 1998 1,200 900 3,400 800 1,000 7,300
Charges against
reserve (700) (200) (400) (300) (200) (1,800)
Reserves credited
to income (500) (600) (1,600) (500) (800) (4,000)
-------- ------- -------- -------- -------- --------
Balance at
December 31, 1999 $ - $ 100 $ 1,400 $ - $ - $ 1,500
======= ======= ======== ======== ======== ==========
</TABLE>

<PAGE>

Termination payments to employees are the result of workforce reductions of
about 90 warehouse and administrative support associates.

EARNINGS PER SHARE Basic earnings per share was computed by dividing net income
by the weighted average number of shares of common stock outstanding during the
year. Diluted earnings per share includes the weighted average impact of stock
options assumed exercised using the treasury method.
<TABLE>
<CAPTION>

Year ended December 31
1999 1998 1997
---------- ---------- ----------
(in thousands, except share data)
<S> <C> <C> <C>
Basic
Net income $74,857 $53,067 $56,886
======= ======= =======

Weighted average shares outstanding 65,781,647 65,715,120 63,788,448
Effect of contingent shares 14,027 26,452 345,541
---------- ---------- ----------
65,795,674 65,741,572 64,133,989
========== ========== ==========

Basic earnings per share $1.14 $ .81 $ .89
===== ===== =====

Diluted
Net income $74,857 $53,067 $56,886
======= ======= =======

Weighted average shares outstanding 65,781,647 65,715,120 63,788,448
Effect of contingent shares 14,027 26,452 345,541
Effect of options 16,159 50,268 118,370
---------- ---------- ----------
65,811,833 65,791,840 64,252,359
========== ========== ==========

Diluted earnings per share $1.14 $ .81 $ .89
===== ===== =====

</TABLE>

FOREIGN CURRENCY TRANSLATION Local currencies are considered the functional
currencies for our operations outside the United States. Assets and liabilities
are translated into U.S. dollars at the rate of exchange in effect at the
balance sheet date. Revenues and expenses are translated into U.S. dollars at
average monthly exchange rates prevailing during the year. Resulting translation
adjustments are included in "Accumulated other comprehensive loss" in the
Balance Sheets.

PRE-OPENING COSTS Costs associated with opening new locations are expensed as
incurred.

FINANCIAL INSTRUMENTS At December 31, 1999, the estimated current market value
of our debt, based on then current interest rates for similar obligations with
like maturities, was approximately $9,000,000 less than the amount of debt
reported on the Balance Sheet. At December 31, 1999, we had an interest rate
swap. The liquidation value of the swap, based on interest rates available for
instruments with similar characteristics, would have resulted in a payment to us
of approximately $400,000. The estimated fair values of our other financial
instruments, cash and cash equivalents, and short-term borrowings are the same
as their carrying values. In the opinion of management, we do not have any
significant concentration of credit risks. Concentration of credit risks with
respect to trade receivables is limited due
<PAGE>

to the wide variety of customers and channels to and through which our products
are sold, as well as their dispersion across many geographic areas. We have only
limited involvement with derivative financial instruments and do not use them
for trading purposes. Financial instruments such as interest rate swaps, rate
hedge agreements, and forward exchange contracts are used periodically to manage
well-defined risks. Interest swaps and rate hedge agreements are used to hedge
underlying debt obligations or anticipated transactions. For qualifying hedges,
the interest rate differential is reflected as an adjustment to interest expense
over the life of the swap or underlying debt. Gains and losses related to
qualifying hedges of foreign currency firm commitments and anticipated
transactions are deferred and are recognized in income or as adjustments of
carrying amounts when the hedged transaction occurs. All other forward exchange
contracts are marked to market, and unrealized gains and losses are included in
current period net income. We had no material exposure to losses from derivative
financial instruments held at December 31, 1999. We do not use derivative
financial instruments for trading purposes.

NEW ACCOUNTING STANDARDS In June 1998, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities." This Statement establishes
accounting and reporting standards requiring that every derivative instrument
(including certain derivative instruments embedded in other contracts) be
recorded in the Balance Sheet as either an asset or liability measured at its
fair value. In July 1999, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 137 that delayed the effective
date of Statement 133 until fiscal years beginning after June 15, 2000. We plan
to adopt this Statement in the first quarter of 2001. We are in the process of
reviewing this statement. Adoption of this statement is not expected to have a
significant impact on our results of operations or financial position.

2. Transactions with Boise Cascade Corporation

The Company was incorporated on January 3, 1995, and until April 13, 1995, was a
wholly-owned subsidiary of Boise Cascade Corporation ("BCC"). On April 13, 1995,
we completed an initial public offering in the U.S. and a concurrent
international offering (the "Offerings"). After the Offerings, BCC owned 82.7%
of our outstanding common stock. At December 31, 1999, BCC owned 81.1% of our
outstanding common stock. In December 1999, BCC announced a proposal to acquire
our outstanding public shares. On March 12, 2000, BCC and BCOP entered into an
Agreement and Plan of Merger in which BCC would purchase all of BCOP's publicly
held shares for $16.50 in cash. In accordance with that Agreement, BCC commenced
a tender offer for our minority public shares on March 22, 2000. The offer will
expire on April 19, 2000, unless it is extended. If BCC is successful in
obtaining a majority of the minority shares, it will purchase the remaining
shares through a short-form merger. If BCC completes the tender and merger, we
will again become a wholly-owned subsidiary of BCC.

We have entered into intercompany agreements with BCC under which BCC, among
other things, provides to us certain administrative support functions, certain
paper and paper products under a long-term sales agreement, and use (without
charge) of the trade names and trademark of BCC. We have also entered into a tax
matters agreement with BCC (see Note 3).

Under the Administrative Services Agreement ("Admin Agreement"), BCC provides
various services to us. The services will be provided for varying periods, from
one to five years, as identified in the Admin Agreement, subject to renewal or
termination in accordance with the terms of that agreement. We will pay for each
of these services at rates set forth in the agreement. These rates are generally
consistent with amounts that have been charged by BCC in the past. For the years
ended December 31, 1999, 1998, and 1997, charged costs amounted to $3,272,000,
$2,578,000, and $2,578,000 and have been included in "Corporate general and
administrative expense" in the Statements of Income.
<PAGE>

Under the Paper Sales Agreement, we agreed to purchase, and BCC agreed to sell,
subject to certain exceptions, all of our cut-size paper requirements. The price
we pay is based upon a formula meant to approximate prevailing market prices for
the paper. The agreement has an initial term of 20 years and will be
automatically renewed for five-year periods thereafter, subject to certain
conditions.

We supplied office products to BCC and purchased certain paper and paper
products from BCC. During the year ended December 31, 1999, our sales to BCC
were $2,021,000, and our purchases from BCC were $306,072,000. Sales and
purchases during the same period of 1998 were $1,077,000 and $281,914,000 and in
1997 were $1,589,000 and $231,188,000.

We are included as a participating employer in certain broad-based employee
benefit plans sponsored by BCC, which cover our work force. Most assets and
liabilities under BCC's employee benefit plans for retirement and postretirement
costs arising out of service with the Company were not transferred to us by BCC.
Accordingly, no significant assets or liabilities related to retirement and
postretirement benefits are included in these financial statements.

During each of the years presented, most of our employees participated in a
defined benefit pension plan sponsored by BCC. In addition, certain of our
employees were eligible for participation in defined contribution plans
sponsored by BCC. The Statements of Income for the years ended December 31,
1999, 1998, and 1997, include expenses of $10,747,000, $9,788,000, and
$7,995,000 attributable to participation by our employees in these plans.
Postretirement expenses attributable to participation in BCC's postretirement
plans included in the Statements of Income totaled $86,000, $68,000, and $88,000
for the years ended December 31, 1999, 1998, and 1997.

3. Income Taxes

Pursuant to a tax matters agreement entered into with BCC, income taxes are
provided based on a pro forma calculation of the income tax expense that we
would incur as a non-affiliated taxpayer. However, as long as BCC owns at least
80% of our outstanding common stock, we will be included in the consolidated
federal income tax return of the BCC affiliated group. Accordingly, we remit to
BCC amounts representing the current tax liability that we would incur if we
were a non-affiliated taxpayer. Pursuant to this agreement, we paid BCC
$49,409,000 in 1999, $32,729,000 in 1998, and $40,610,000 in 1997.

Income tax expense includes the following:
<TABLE>
<CAPTION>

Year ended December 31
(in thousands)
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Current income tax expense:
Federal $40,972 $33,433 $28,519
State 7,664 6,288 5,355
Foreign 13,478 8,210 9,191
------- ------- -------
Total current income tax expense 62,114 47,931 43,065

Deferred income tax expense (benefit):
Federal (2,866) 2,018 2,976
State (504) 185 561
Foreign (3,174) (7,290) (3,704)
------- ------- -------
Total deferred income tax benefit (6,544) (5,087) (167)
------- ------- -------
Total income tax expense $55,570 $42,844 $42,898
======= ======= =======

</TABLE>
<PAGE>

A reconciliation of the statutory U.S. federal tax expense and our actual tax
expense is as follows:

Year ended December 31
(in thousands)
1999 1998 1997
---- ---- ----
Statutory expense $45,549 $33,570 $34,917
Increases in taxes resulting from:
Foreign income taxed at
rate higher than U.S. rate 4,174 2,680 3,141
State tax expense 4,654 4,207 3,846
All other, net 1,193 2,387 994
------- ------- -------
Actual tax expense $55,570 $42,844 $42,898
======= ======= =======

The components of the deferred tax assets and liabilities on the Balance
Sheets are as follows:
December 31
(in thousands)
1999 1998
Assets Liabilities Assets Liabilities
------ ----------- ------ -----------

Property and equipment $ 1,111 $ 4,304 $ 1,104 $ 4,701
Accounts receivable and unearned
revenue 7,852 - 3,817 -
Deferred charges 11 1,689 2 3,735
Inventories 2,106 - 2,074 -
Accrued liabilities 1,550 - 3,163 -
Compensation 9,620 812 8,894 325
Goodwill - 9,541 - 9,711
State taxes 746 - 138 -
Foreign net operating losses 16,871 - 10,666 -
Cumulative translation adjustment 6,713 - 2,842 -
Other 8,431 2,724 4,382 3,753
------- ------- ------- -------
$55,011 $19,070 $37,082 $22,225
======= ======= ======= =======

At December 31, 1999, our foreign subsidiaries had approximately $11,458,000 of
undistributed earnings, which are intended to be indefinitely reinvested. If
these earnings were distributed, foreign tax credits should become available
under current law to reduce or eliminate the resulting U.S. income tax
liability.

Our pretax income (loss) from domestic and foreign sources is as follows:

Year ended December 31
(in thousands)
1999 1998 1997
-------- --------- -------
Domestic $116,536 $112,890 $98,368
Foreign 13,891 (16,979) 1,416
-------- -------- -------
Pretax income $130,427 $ 95,911 $99,784
======== ======== =======
<PAGE>

4. Debt

On June 26, 1997, we entered into a $450,000,000 revolving credit agreement with
a group of banks that expires in June 2001, and provides for variable rates of
interest based on customary indices. The revolving credit agreement is available
for acquisitions and general corporate purposes. It contains financial and other
covenants, including a negative pledge and covenants specifying a minimum fixed
charge coverage ratio and a maximum leverage ratio. As of December 31, 1999,
borrowings under the agreement totaled $190,000,000. The weighted average
interest rate of borrowings under the agreement was 5.5% at December 31, 1999.
In October 1998, we entered into an interest rate swap with a notional amount of
$25,000,000 that expires in 2000. The swap results in an effective fixed
interest rate of 5.0% with respect to $25,000,000 of our revolving credit
agreement borrowings. We are exposed to credit-related gains or losses in the
event of nonperformance by the counterparty to this swap; however, we do not
expect the counterparty to fail to meet their obligations.

In addition to the amount outstanding under the revolving credit agreement,
short-term borrowings at December 31, 1999 and 1998, totaled $19,300,000 and
$72,100,000. The maximum amount of short-term notes payable outstanding during
the year ended December 31, 1999 and 1998, was $111,900,000 and $116,600,000.
The average amount of short-term notes payable during the 12 months ended
December 31, 1999 and 1998, was $67,000,000 and $68,000,000. The average
interest rate of these short-term borrowings was 5.5% and 5.8% at December 31,
1999 and 1998. Substantially all of our debt is unsecured.

During 1998, we filed a registration statement with the Securities and Exchange
Commission to register $300,000,000 of shelf capacity for debt securities. In
May 1998, we issued $150,000,000 of 7.05% Notes ("Notes") under this
registration statement. The Notes are due May 15, 2005. Proceeds from the
issuance were used to repay borrowings under our revolving credit agreement. We
have $150,000,000 remaining under this registration statement.

In addition to borrowings under the revolving credit agreement, short-term
borrowings, and Notes, debt assumed through acquisitions was $3,400,000 and
$6,100,000 at December 31, 1999 and 1998. Scheduled payments of long-term debt,
excluding our revolving credit agreement and Notes, are $2,810,000 in 2000,
$1,702,000 in 2001, $1,381,000 in 2002, $777,000 in 2003, and $730,000 in 2004.

Cash paid for interest, net of interest capitalized, for the years ended
December 31, 1999, 1998, and 1997, was $24,432,000, $27,808,000, and
$19,487,000.

5. Shareholders' Equity

COMMON STOCK We are authorized to issue 200,000,000 shares of common stock, of
which 65,806,612 shares were issued and outstanding at December 31, 1999. On
June 17, 1996, we filed a registration statement with the Securities and
Exchange Commission covering approximately 4,400,000 shares of common stock to
be offered by BCOP from time to time in connection with acquisitions. As of
December 31, 1999, we had 3,828,000 unissued shares remaining under this
registration statement.

On September 25, 1997, we issued 2,250,000 shares of common stock to BCC at the
price of $21.55 per share for proceeds of approximately $48,500,000. At December
31, 1999, BCC owned 81.1% of our outstanding common stock.

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) At December 31, 1999, the balance
shown on the Statements of Shareholders' Equity for Accumulated Other
Comprehensive Income (Loss) consisted of a minimum pension liability adjustment
of ($482,000) and a cumulative foreign currency translation adjustment of
($10,050,000).
<PAGE>

6. Accounting for Stock-Based Compensation

We have two stock option plans, the Key Executive Stock Option Plan ("KESOP")
and the Director Stock Option Plan ("DSOP"). We account for these plans under
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees." Under this opinion, no compensation cost has been recognized.

If we had determined compensation cost for these plans consistent with Statement
of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation," 1999 net income would have been reduced pro forma by $2,859,000
and earnings per share would have been reduced pro forma by $.05. Our 1998 net
income would have been reduced pro forma by $2,840,000, and earnings per share
would have been reduced pro forma by $.04. Our 1997 net income would have been
reduced pro forma by $2,464,000 and earnings per share would have been reduced
pro forma by $.04. The pro forma compensation cost may not be representative of
that to be expected in future years.

The KESOP provides for the grant of options to purchase shares of our common
stock to key employees of the Company. The exercise price of the options is
equal to the fair market value of our common stock on the date the options are
granted. One-third of the options become exercisable in each of the three years
following the grant date and expire, at the latest, 10 years following the grant
date.

A summary of the status of the KESOP at December 31, 1999, 1998, and 1997, and
changes during the years then ended is presented in the table and narrative
below.

<TABLE>
<CAPTION>
1999 1998 1997
Wtd. Avg. Wtd. Avg. Wtd. Avg.
Shares Ex. Price Shares Ex. Price Shares Ex. Price
------ --------- ------ --------- ------ ---------
<S> <C> <C> <C> <C> <C> <C>
Balance at beginning of the year 2,021,105 $19.86 1,490,139 $20.10 1,059,442 $18.66
Options granted 1,031,300 12.81 782,200 18.22 495,700 23.08
Options exercised (6,400) 12.50 (152,334) 12.50 (24,468) 12.50
Options expired (95,540) 17.78 (98,900) 21.92 (40,535) 22.38
--------- --------- ---------
Balance at end of the year 2,950,465 17.48 2,021,105 19.86 1,490,139 20.10
--------- --------- ---------

Exercisable at end of the year 1,330,965 20.11 826,305 19.13 483,039 16.72
Weighted average fair value of
options granted (Black-Scholes) $4.58 $6.78 $8.61
</TABLE>

The 2,950,465 options outstanding at December 31, 1999, have exercise prices
between $12.50 and $26.625 and a weighted average remaining contractual life of
7.7 years.

The fair value of each option grant is estimated on the date of grant using the
Black-Scholes option pricing model, with the following weighted average
assumptions used for grants in 1999, 1998, and 1997: risk-free interest rates of
5.1%, 5.5%, and 6.1%; no expected dividends; expected lives of 4.2 years for
each year; and expected stock price volatility of 35% for each year.

The DSOP, available only to our nonemployee directors, provides for annual
grants of options. The exercise price of options under this plan is equal to the
fair market value of our common stock on the date the options are granted. The
options expire the earlier of three years after the director ceases to be a
director or 10 years after the grant date. Total shares outstanding at December
31, 1999, 1998, and 1997, were 89,000, 64,000, and 39,000 with weighted average
exercise prices of $15.31, $16.99, and $18.58.
<PAGE>

Under both of the plans, options may not, except under unusual circumstances, be
exercised until one year following the grant date.

7. Leases

Rental expenses for operating leases, net of sublease rentals, were $34,175,000
in 1999, $33,898,000 in 1998, and $29,920,000 in 1997.

We have various operating leases with remaining terms of more than one year.
These leases have minimum lease payment requirements, net of sublease rentals,
of $25,457,000 for 2000, $18,054,000 for 2001, $11,230,000 for 2002, $8,403,000
for 2003, and $5,587,000 for 2004, with total payments thereafter of
$21,326,000.

Substantially all lease agreements have fixed payment terms based upon the lapse
of time. Certain lease agreements provide us with the option to purchase the
leased property. In addition, certain lease agreements contain renewal options
exercisable by the Company ranging up to 15 years, with fixed payment terms
similar to those in the original lease agreements.

We also lease certain equipment and buildings under capital leases; aggregate
obligations under capital leases were not material at December 31, 1999 and
1998.

8. Acquisitions

In 1999, 1998, and 1997, we made various acquisitions, all of 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 initial purchase price allocations may be
adjusted within one year of the date of purchase for changes in estimates of the
fair values of assets and liabilities. Such adjustments are not expected to be
significant to our results of operations or financial position. 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 operations subsequent to
the dates of acquisitions.

We acquired two businesses during 1999, six businesses during 1998, and eight
businesses and entered into a joint venture during 1997. Amounts paid,
acquisition liabilities recorded, debt assumed, and stock issued for these
acquisitions were as follows:

($'s in thousands)
1999 1998 1997
---- ---- ----

Cash paid $9,369 $27,282 $254,025
Acquisition liabilities
recorded $7,237 $49,062 $ 12,674
Debt assumed $ - $ 162 $ 10,137
Stock issued
shares - - 135,842
value $ - $ - $ 2,882

In January 1999, we acquired the office supply business of Wallace Computer
Services, based in Lisle, Illinois. In September 1999, we acquired Supply West,
based in Perth, Western Australia. The transactions were completed for cash of
$9,369,000 and the recording of $361,000 of acquisition liabilities.
<PAGE>

The 1998 amounts include the acquisition of three contract stationer businesses,
two direct marketing businesses, and one computer consumables business. These
transactions were completed for cash of $19,897,000, debt assumed of $162,000,
and the recording of $8,062,000 of acquisition liabilities.

The 1997 amounts include the acquisition of 100% of the shares of Jean-Paul
Guisset S.A. ("JPG"). JPG is a direct marketer of office products in France. The
negotiated purchase price was approximately FF850,000,000, which translated to
about US$144,000,000 at the time of purchase, plus a price supplement payable in
April 2000 if certain earnings and sales growth targets are reached. The maximum
amount of the price supplement is FF300,000,000, which translates to
approximately US$46,000,000 at December 31, 1999. In 1998, we made a partial
payment of the price supplement of FF27,000,000, which translated to
approximately US$4,430,000 at the time of payment. In 1998, we also recorded a
liability for the estimated remaining amount of the price supplement of
FF229,000,000, which translated to about US$41,000,000 at December 31, 1998. The
liability was based on the results of 1998 and 1997 and was included in "Other
long-term liabilities" in the Balance Sheet. During 1999, we increased the
liability for the price supplement by an additional FF44,000,000, which
translated to about US$6,876,000. At December 31, 1999, we have a liability for
the maximum remaining amount of the price supplement, FF273,000,000, which
translates to approximately US$42,000,000. This amount is included in "Other
accrued liabilities" in the Balance Sheet. Approximately FF128,500,000
(US$20,500,000) was repatriated to us from JPG during the third quarter of 1997.
In 1997, in addition to the cash paid, we recorded approximately US$5,800,000 of
acquisition liabilities and assumed US$10,137,000 of long-term debt.

Also included in the 1997 amounts is the purchase of the promotional products
business of OstermanAPI, Inc., based in Maumee, Ohio, for cash of $56,000,000
and the recording of $882,000 of liabilities. In conjunction with the
acquisition of Osterman, we formed a majority-owned subsidiary, Boise Marketing
Services, Inc. ("BMSI"), of which we own 88%. Our previously acquired
promotional products company, OWNCO, also became part of BMSI.

In January 1997, we formed a joint venture with Otto Versand ("Otto"), of which
we owned 50%, to direct market office products in Europe, initially in Germany.
In December 1997, Otto purchased a 10% interest in JPG for approximately
FF72,200,000 (US$13,000,000). The sale of our interest to Otto was at book
value. In December 1998, the Company and Otto dissolved the joint venture. Otto
acquired our 50% interest in the joint venture. In addition, we repurchased
Otto's 10% interest in JPG for $2,955,000 and repaid a loan and accrued interest
to Otto of $13,700,000. We now own 100% of JPG. (see "Other operating (income)
expense" in Note 1).

Unaudited pro forma results of operations reflecting the acquisitions would have
been as follows. If the 1999 acquisitions had occurred January 1, 1999, sales
for the year ended December 31, 1999, would have increased to $3,388,000,000,
net income would have decreased to $74,713,000, and diluted earnings per share
would have remained $1.14. If the 1999 and 1998 acquisitions had occurred
January 1, 1998, sales for the year ended December 31, 1998, would have
increased to $3,161,000,000, net income would have increased to $53,088,000, and
diluted earnings per share would have remained $.81. If the 1998 and 1997
acquisitions had occurred January 1, 1997, sales for the year ended December 31,
1997, would have increased to $2,814,000,000, net income would have decreased to
$56,869,000, and diluted earnings per share would have remained $.89. This
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.

As a result of our acquisition activity, we had short-term acquisition
liabilities of $48,310,000, primarily for the JPG price supplement, and
$5,710,000 at December 31, 1999 and 1998, which were included in "Other accrued
liabilities." We had no long-term acquisition liabilities at December 31, 1999,
and long-term acquisition liabilities of $51,621,000, primarily for the JPG
price supplement, at December 31, 1998, which were included in "Other long-term
liabilities."

<PAGE>

9. Litigation and Legal Matters

10. Segment Information

In 1997, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 131 ("SFAS 131"), "Disclosures About Segments of an
Enterprise and Related Information." This Statement establishes standards for
the way that public business enterprises report information about operating
segments in annual financial statements and requires that those enterprises
report selected information about operating segments in interim financial
reports issued to shareholders. We adopted this statement at December 31, 1998.

The Statement defines operating segments as components of an enterprise about
which separate financial information is available which is evaluated regularly
by the chief operating decision maker to assess performance and to decide how to
allocate resources. Our chief operating decision maker is the group that
consists of the Chief Executive Officer, Senior Vice Presidents of each of our
operating segments, Chief Financial Officer, Chief Information Officer,
Controller, and Vice Presidents of Logistics and Human Resources. This group of
executives works together to allocate resources and assess the performance of
the various business areas of the Company. Our senior vice presidents
responsible for operations have broad responsibility for multiple operating
segments.

While we have multiple operating segments, SFAS 131 provides for aggregation of
operating segments when they have similar economic characteristics and if they
are similar in the areas of product/services, production processes, types of
customers, distribution methods, and regulatory environment. Our businesses have
historically had similar operating income, as a percent of net sales, which is
the ultimate measure of performance used by our chief operating decision maker.
Our businesses provide substantially similar products and services for the
office. We do not manufacture products, but we procure products for sale to
business customers. Our businesses procure products directly from similar
manufacturers and wholesalers. The target customer group for our businesses is
business customers. Our order fulfillment and distribution processes are
essentially the same for our businesses. To the extent applicable, the
regulatory environment is the same for our businesses. Because our operating
segments are similar in the areas outlined in the Statement, we have aggregated
our operating segments into one reportable segment.

The following table summarizes our geographic information:

(in thousands) United States Canada France Other(1)
------------- ------ -------- --------
1999
Net sales $2,584,966 $382,670 $240,500 $173,589
Long-lived assets 453,612 99,668 167,510 55,017

1998
Net sales $2,371,639 $322,855 $220,102 $152,731
Long-lived assets 418,973 98,488 190,947 54,664

<PAGE>

1997
Net sales $2,079,530 $298,587 $ 74,675 $143,940
Long-lived assets 378,425 93,771 142,618 54,577

(1) 1999 and 1998 amounts include operations in Australia, Belgium, Spain, and
the United Kingdom. 1997 amounts include operations in Australia, Germany,
and the United Kingdom.

Revenues are attributed to geographic areas based on the location of the
distribution centers producing the revenue. Export sales to foreign unaffiliated
customers are immaterial. No single customer accounts for 10% or more of net
sales.

Our revenues from external customers by product category, expressed as a
percentage of our total net sales, were:

1999 1998 1997
---- ---- ----
Office supplies 54% 61% 66%
Office paper 15% 13% 13%
Office furniture 12% 12% 11%
Computer supplies 16% 10% 7%
Promotional products 3% 4% 3%

11. Quarterly Results of Operations (unaudited)

1999
4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr.
-------- -------- -------- --------
(in thousands, except share information)
Net sales $893,256 $838,521 $801,559 $848,389
Cost of sales 663,685 630,516 588,420 629,261
-------- -------- -------- --------
Gross profit 229,571 208,005 213,139 219,128
-------- -------- -------- --------
Operating expenses 185,550 173,670 176,525 180,655
-------- -------- -------- --------
Income from operations 44,021 34,335 36,614 38,473
-------- -------- -------- --------
Interest expense 6,207 5,932 5,796 6,452
Other income, net 85 487 484 315
-------- -------- -------- --------
Income before income taxes 37,899 28,890 31,302 32,336
Income tax expense 16,193 12,507 13,024 13,846
-------- -------- -------- --------
Net income $ 21,706 $ 16,383 $ 18,278 $ 18,490
======== ======== ======== ========

Earnings per share-basic and diluted $.33 $.25 $.28 $.28
Common stock prices (1)
High $15 5/16 $ 12 1/2 $ 12 3/4 $ 15 3/8
Low $ 9 9/16 $ 9 5/8 $ 9 7/8 $ 10 3/4
<PAGE>

1998
4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr.
-------- -------- -------- --------
(in thousands, except share information)
Net sales $814,219 $760,437 $732,863 $759,808
Cost of sales 598,083 571,978 544,554 564,230
-------- -------- -------- --------
Gross profit 216,136 188,459 188,309 195,578
-------- -------- -------- --------
Operating expenses 189,671 160,701 158,074 159,542
-------- -------- -------- --------
Income from operations 26,465 27,758 30,235 36,036
-------- -------- -------- --------
Interest expense 6,011 6,553 6,885 6,465
Other income, net 30 422 211 668
-------- -------- -------- --------
Income before income taxes 20,484 21,627 23,561 30,239
Income tax expense 10,561 9,800 9,833 12,650
-------- -------- -------- --------
Net income $ 9,923 $ 11,827 $ 13,728 $ 17,589
======== ======== ======== ========

Earnings per share-basic and diluted $.15 $.18 $.21 $.27
Common stock prices (1)
High $13 7/16 $16 9/16 $ 20 1/2 $ 20 1/4
Low $ 8 9/16 $ 7 3/8 $ 15 1/2 $ 14 7/8

(1) Our common stock is traded principally on the New York Stock Exchange.

F-6
<PAGE>

Report of Management

The management of Boise Cascade Office Products Corporation is primarily
responsible for the information and representations contained in this annual
report. The financial statements and related notes were prepared in conformity
with generally accepted accounting principles appropriate in the circumstances.
In preparing the financial statements, management has, when necessary, made
judgments and estimates based on currently available information.

Management maintains a comprehensive system of internal controls based on
written policies and procedures and the careful selection and training of
employees. The system is designed to provide reasonable assurance that assets
are safeguarded against loss or unauthorized use and that transactions are
executed in accordance with management's authorization. The concept of
reasonable assurance is based on recognition that the cost of a particular
accounting control should not exceed the benefit expected to be derived.

The Internal Audit staff of Boise Cascade Corporation monitors the Company's
financial reporting system and the related internal accounting controls, which
are also selectively tested by Arthur Andersen LLP, Boise Cascade Office
Products' independent public accountants, for purposes of planning and
performing their audit of the Company's financial statements.

The Audit Committee of the board of directors, which is composed solely of
nonemployee directors, meets periodically with management, representatives of
the Internal Audit Department, and Arthur Andersen LLP representatives to assure
that each group is carrying out its responsibilities. The Internal Audit staff
and the independent public accountants have access to the Audit Committee,
without the presence of management, to discuss the results of their audits,
recommendations concerning the system of internal accounting controls, and the
quality of financial reporting.

F-7
<PAGE>

The unaudited Income Statement for the three months ended December 31, 1999, and
Notes to Quarterly Financial Statements are presented in our Fact Book for the
fourth quarter of 1999 and are incorporated by reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Directors

Structure

Our board of directors, comprised of eight persons, is divided into three
classes for purposes of election. One class is elected at each annual meeting of
shareholders to serve for a three-year term.

Two directors are nominees for reelection in 2000, each to hold office until the
annual meeting of shareholders in 2003. Our other directors are not up for
election this year and will continue in office for the remainder of their terms.

Directors Nominated This Year for Terms Expiring in 2003

James G. Connelly III, 54, joined our board of directors in 1995. In 1999, he
became a partner in Garrett Capital Advisors LLC, a private equity firm. Mr.
Connelly served as the president and chief operating officer of USFreightways
Corporation, a diversified transportation and logistics company, during 1998. He
was the president and chief operating officer of Caremark International Inc., a
wholly owned subsidiary of MedPartners, Inc., and a national provider of health
care management and services, from 1992 to 1997.

Peter G. Danis Jr., 68, became a director in 1995. He was the president and
chief executive officer of BCOP from 1995 to 1998. Mr. Danis served as an
executive vice president of Boise Cascade Corporation from 1993 to 1998. He is
also a director and the nonexecutive chairman of the board of Payless Cashways,
Inc.

Directors Whose Terms Expire in 2002

Theodore Crumley, 54, joined our board of directors in 1995. He is currently
senior vice president and chief financial officer of Boise Cascade Corporation
and has been an executive officer of Boise Cascade Corporation since 1990. Mr.
Crumley is also a director of Hecla Mining Company.

A. William Reynolds, 66, joined our board of directors in 1995. He is the chief
executive of Old Mill Group, a private investment firm. Mr. Reynolds was the
chairman of the board and chief executive officer of GenCorp Inc., a diversified
manufacturing and service company, from 1987 to 1995. He is also a director of
Boise Cascade Corporation and Eaton Corporation and former chairman of the
Federal Reserve Bank of Cleveland.
<PAGE>

Donald E. Roller, 62, joined our board of directors in 1998. He served as acting
chief executive officer of Payless Cashways, Inc., a building materials and home
improvement products retailer, during 1998. Mr. Roller was an executive vice
president of USG Corporation, the world's largest manufacturer of gypsum panels,
joint compound, and related construction products, during 1996. He served as the
president and chief executive officer of United States Gypsum Company, USG's
largest business unit, from 1993 to 1996. Mr. Roller is also a director of
Payless Cashways, Inc., and The Jacksonville Bank.

Directors Whose Terms Expire in 2001

John B. Carley, 66, joined our board of directors in 1995. In January 1999, Mr.
Carley retired as chairman of the Executive Committee of the board of directors
(an officer position) of Albertson's, Inc., a retail food and drug company. He
served as the president and chief operating officer of Albertson's, Inc., from
1990 to 1996. Mr. Carley is also a director of Albertson's, Inc., and Idaho
Power Company.

George J. Harad, 55, became a director and chairman of the board in 1995. He is
chairman of the board and chief executive officer of Boise Cascade Corporation
and has been an executive officer of Boise Cascade Corporation since 1982. Mr.
Harad is also a director of FM Global and US West, Inc.

Christopher C. Milliken, 54, became a director and president and chief executive
officer of the company in 1998 after serving as senior vice president,
operations, since 1995. He has been an executive officer of Boise Cascade
Corporation since 1995, having previously served as the eastern region manager
of its Office Products Division from 1990 to 1995. Mr. Milliken is also a
director of Cabot Industrial Trust.

Executive Officers as of February 29, 2000:

Date
First Elected
Name Age Position as an Officer
- ---- --- -------- -------------
Christopher C. Milliken (1) 54 President and Chief
Executive Officer 4/1/95

A. James Balkins III (2) 47 Senior Vice President, Chief
Financial Officer, and Treasurer 4/1/95

Richard L. Black 54 Senior Vice President, Direct
Marketing and Europe 4/1/95

Kenneth W. Cupp 53 Senior Vice President,
U.S. Contract Operations 4/22/97

Carol B. Moerdyk (2) 49 Senior Vice President, U.S.,
Canadian, and Australian
Contract Operations 4/1/95

Darrell R. Elfeldt 56 Vice President, Corporate Planning 4/1/95

David A. Goudge 52 Vice President, Marketing 4/22/97

William E. Gruber 54 Vice President and Region Manager 4/21/98

Larry L. Gunther 57 Vice President and
Chief Information Officer 7/29/97

<PAGE>

Thomas J. Jaszka 38 Vice President and Controller 2/16/99

David Kelly 47 Vice President, Managing
Director of Australian Operations 8/3/99

John A. Love 59 Vice President, Human Resources 4/1/95

Gary A. Massel 60 Vice President, Logistics 7/29/97

Michael F. Meehan 51 Vice President and Region Manager 4/22/97

Stephen M. Thompson 57 Vice President and Region Manager 4/1/95

Peter D. Vanexan 53 Vice President, BCOP and
President, Grand & Toy 4/22/97

Matthew R. Broad 40 Corporate Secretary 4/21/98

(1) Senior Vice President, Boise Cascade Corporation.

(2) Vice President, Boise Cascade Corporation.

Christopher C. Milliken was elected President of the Company in February 1998
and assumed the role of Chief Executive Officer in April 1998 upon Pete Danis'
retirement. Previously, Mr. Milliken served as Senior Vice President,
Operations, of the Company since 1995. Prior to 1995, Mr. Milliken served as a
Region Manager of Boise Cascade Office Products Distribution Division (the
"Division") since 1991 and in various positions with the Division since 1977.

A. James Balkins III was elected Senior Vice President, Chief Financial Officer,
and Treasurer in February 1998. Prior to 1998, Mr. Balkins served as Corporate
Secretary of the Company since 1995 and Vice President, Corporate Planning and
Development of Boise Cascade Corporation since 1996. Previously, Mr. Balkins
served in various capacities at Boise Cascade Corporation since 1979 including
Corporate Secretary from 1991 to 1997 and Associate General Counsel from 1984 to
1996.

Richard L. Black was elected Senior Vice President, Direct Marketing and Europe,
in February 1998. Mr. Black has served as President of The Reliable
Corporation, a wholly-owned subsidiary of the Company, since 1994. Prior to
1994, Mr. Black served as Vice President, Marketing of Rivertown Trading Company
from 1992 to 1994 and, prior thereto, as Vice President, New Business
Development of Fingerhut Corporation, both direct marketing companies.

Kenneth W. Cupp has served as Senior Vice President, U.S. Contract Operations,
since January 2000. Previously, Mr. Cupp served as Senior Vice President and
Region Manager since 1998. Prior to 1998, Mr. Cupp has served as Vice President
and Region Manager since 1997, Region Manager of Boise Cascade Office Products
Corporation since 1995, and in various positions with the Division since 1967.

Carol B. Moerdyk has served as Senior Vice President, U.S., Canadian, and
Australian Contract Operations since January 2000. Previously, Ms. Moerdyk
served as Senior Vice President, North American and Australian Contract
Operations, since 1998. Prior to 1998, Ms. Moerdyk served as Senior Vice
President, Chief Financial Officer, and Treasurer of the Company since 1995.
Previously, Ms.
<PAGE>

Moerdyk served as Vice President and Assistant to the General Manager of Office
Products of Boise Cascade Corporation since 1992 and in various capacities at
Boise Cascade Corporation since 1981 including Vice President, Corporate
Planning and Development from 1990 to 1992 and Corporate Planning and
Development Director from 1986 to 1990.

Darrell R. Elfeldt has served as Vice President, Corporate Planning since 1998.
Previously, Mr. Elfeldt served as Vice President and Controller since 1995.
Prior to 1995, Mr. Elfeldt served as Finance and Distribution Director of Boise
Cascade Office Products Distribution Division since 1993 and in various
positions with the Division since 1980 and with Boise Cascade Corporation since
1970.

Prior to being elected an officer of the Company, David A. Goudge served as the
Director of Product Marketing of Boise Cascade Office Products Distribution
Division since 1993. Prior to 1993, Mr. Goudge has served in various positions
with the Division since 1980.

Prior to being elected an officer of the Company, William E. Gruber served as a
Region Manager of Boise Cascade Office Products since 1996. Prior to 1996, Mr.
Gruber has served in various positions with the Division since 1970.

Larry L. Gunther served as the Chief Information Officer of Boise Cascade Office
Products Corporation since 1997. In March 2000, Mr. Gunther resigned as Chief
Information Officer and as an employee of BCOP. Previously, Mr. Gunther served
as Chief Information Officer of the North Atlantic Group of Gillette for five
years and as Chief Information Officer of the Consumer Products Group of
Bristol- Myers Squibb for 11 years.

Thomas J. Jaszka was elected Vice President and Controller in February 1999.
Prior to being elected an officer of the Company, Mr. Jaszka served as Director
of Accounting since 1998. Previously, Mr. Jaszka has served in various
positions with the Division since 1986.

David Kelly was elected Vice President, Managing Director of Australian
Operations, in August 1999. Prior to being elected an officer of the Company,
Mr. Kelly served as Managing Director of BCOP Australia since 1996.

Prior to being elected an officer of the Company, John A. Love served as the
Human Resources Director of Boise Cascade Office Products Distribution Division
since 1978. Previously, Mr. Love served as Human Resource Manager for the
Division since 1974.

Gary A. Massel served as Vice President, Logistics since 1997. In March 2000,
Mr. Massel became Chief Information Officer. Prior to being elected an officer
of the Company, Mr. Massel served as the Director of Logistics of Boise Cascade
Office Products Corporation since 1995.

Prior to being elected an officer of the Company, Michael A. Meehan served as a
Region Manager of Boise Cascade Office Products Corporation since 1995.
Previously, Mr. Meehan has served in various positions with the Division since
1978.

Prior to being elected an officer of the Company, Stephen M. Thompson served as
a Region Manager of Boise Cascade Office Products Distribution Division since
1976. Previously, Mr. Thompson served in various positions with the Division
since 1970.

Prior to being elected an officer of the Company, Peter D. Vanexan served as the
Managing Director of Grand & Toy since 1991. Prior to 1991, Mr. Vanexan served
as President of Innova Envelope since 1986.
<PAGE>

Matthew R. Broad was elected Corporate Secretary in April 1998. Prior to 1998,
Mr. Broad has served as counsel for the Company since 1989 and in the legal
department of Boise Cascade Corporation since 1984.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires our directors and
executive officers, and any person who owns more than 10% of a registered class
of our equity securities, to file reports of holdings and transactions in Boise
Cascade Office Products shares with the SEC and the New York Stock Exchange.
Based on our records and other information, we believe that in 1999 our
directors and executive officers met all applicable SEC filing requirements,
except for Mr. Danis. Mr. Danis filed an amended Form 5 for 1998 on February
10, 2000, reporting a stock option grant received in February 1998 while he was
our chief executive officer. This grant should have been reported on his Form 5
filed with the SEC on February 1, 1999.

ITEM 11. EXECUTIVE COMPENSATION

Director Compensation

Of our current board members, only Mr. Milliken is a salaried employee of Boise
Cascade Office Products. Board members that are not salaried employees or BCC
officers receive separate compensation for board service. In 1999, that
compensation included:

Annual Retainer: $21,000

Attendance Fees: $1,000 for each board meeting
$1,000 for each committee meeting held on a day
other than the board meeting date
Expenses related to attendance

Stock Options: 5,000 annually

During 1999, the members of the Committee of Independent Directors also received
a special retainer of $20,000 plus a $1,000 fee for each committee meeting
related to BCC's proposal to purchase our outstanding shares not owned by BCC.

Our directors receive no additional compensation for attending other committee
meetings held on the same day as a board meeting.

Director Stock Option Plan

Through our shareholder-approved Director Stock Option Plan, each director who
is not an employee of either the company or BCC receives an annual stock option
grant on July 31. Directors appointed between August 1 and December 31 receive
a grant when they join our board. The options are exercisable one year after
the grant date, and they expire the earlier of (a) three years after the
director's retirement, resignation, death, or termination as a director or (b)
ten years after the grant date.

In 1999, each nonemployee director was granted an option to purchase 5,000
shares of our common stock at a price equal to the stock's closing market price
on the grant date.
<PAGE>

Director Deferred Compensation Program

Our directors' deferred compensation program allows each nonemployee director to
defer all or a portion of his cash compensation.

Under this program, nonemployee directors may defer from a minimum of $5,000 to
a maximum of 100% of their cash compensation in a calendar year. Interest is
imputed on deferred compensation at a rate equal to 130% of Moody's Composite
Average of Yields on Corporate Bonds. A minimum death benefit of 1.5 times a
participant's total deferral amount between February 14, 1995, and December 31,
1995, is also provided. The benefits under this program are not funded and are
payable from our general assets. Participants in the program are unsecured
general creditors of the company with respect to these benefits.

As of December 31, 1999, four directors were participating in the deferred
compensation program.

Other

During 1995, the company entered into a number of ongoing transactions with BCC
which are described under Part III, Item 13, "Certain Relationships and Related
Transactions." None of the transactions constitutes compensation for Messrs.
Crumley, Harad, or Reynolds.

Compensation Committee Report

The Compensation Committee of the board of directors approves the individual
salaries and compensation programs for executive officers. The following report
explains the basis for the committee's compensation decisions during 1999.

The company's salary policy provides for compensation at competitive levels for
all employees. Our executive compensation program is designed to:

. attract, motivate, reward, and retain the broad-based management
talent critical to achieving the company's business goals;

. link a portion of each executive officer's compensation to the
performance of both the company and the individual executive officer;
and

. encourage ownership of company common stock by executive officers.

To ensure that compensation levels remain competitive, the company reviews
various reports and other information on the executive compensation practices of
15 other companies within office products and general distribution industries.
These companies are selected primarily because comparable levels of
responsibility can be identified for executives within those companies. Of
these, one is included in the industry comparables index shown in the
performance graph following this report.

The company also collects information on the compensation practices of 74 other
distribution and retail companies. Together, these office products
distribution, general distribution, and retail companies are referred to as
"peer group" companies in this report. In addition to the peer group companies'
compensation information, the company and committee use information regarding
executive compensation programs provided by human resource consulting firms,
including in 1999, Hewitt Associates, Management Compensation Group, and Stern
Stewart & Co.
<PAGE>

The company's executive compensation program has four principal components:

. base salary;

. annual variable incentive compensation;

. stock options; and

. other compensation plans.

During 1999, the cash-based annual variable (at-risk) incentive component linked
executive compensation directly to the company's financial performance, and the
stock option component tied executive compensation to growth in its stock value.

The company's compensation plans reflect the committee's intent that the
compensation paid to executive officers will qualify for federal income tax
deduction by the company. Executive compensation decisions, however,
necessarily involve some subjective judgment. The committee reserves the
authority to make compensation payments that may not be deductible under federal
tax law.

Base Salary

A salary guideline is established for each salaried position in the company,
including each executive officer position. The midpoint of each salary
guideline approximates the average salary, adjusted for company size (in sales),
of equivalent positions at the peer group companies. Annual base salary is
designed to compensate executives for their level of responsibility, sustained
individual performance, and performance of the business or staff unit which the
executive heads. Business or staff unit performance is measured by economic
value added, return on total capital, achievement of sales or operating targets,
effectiveness of cost-containment measures, implementation of Total Quality
process improvements, and other factors relevant to the specific position. In
weighing these factors, the committee must make inherently subjective judgments.

Each year, the committee reviews the criteria discussed above and establishes
the chief executive officer's base salary. Mr. Milliken's salary reflects his
22 years of combined experience with the company and BCC, his responsibilities
as chief executive officer, and his role in the company's strategic growth,
cost-effectiveness programs, and Total Quality evolution. In 1999, the
committee set Mr. Milliken's base salary at $450,000 per year. This salary rate
was approximately 14.7% below the midpoint of the designated salary guideline
($527,800) for the company's chief executive officer.

Annual Variable Incentive Compensation

The committee establishes objective performance criteria for the variable
incentive compensation program and oversees the program's administration. This
program applies to a majority of the company's salaried and hourly employees.

The criteria for the program specify percentages of the participants'
compensation to be paid as additional cash compensation based on improvements in
the company's "economic value added." Economic value added is determined by
calculating the company's operating profit and then subtracting a pretax charge
for the capital used to generate that profit.
<PAGE>

The committee establishes target payouts for each participating position. The
target payout for the chief executive officer, over time, should average
approximately 60% of the chief executive officer's base salary, assuming the
company performs satisfactorily. The actual payout under the plan varies from
year to year depending on the company's financial performance for the year.
Target payout amounts for executive officers also vary, depending on their
levels of responsibility and on competitive compensation practices.

Based on our 1999 review of competitive compensation data covering the peer
group companies, the committee determined that certain of the target payouts
under the company's annual variable incentive compensation program required
adjustment, beginning with the 1999 plan year. The committee awarded a special
discretionary incentive payment to executive officers to reflect this
adjustment.

Under the 1999 program, Mr. Milliken received a payment equal to 52.5% of his
base salary, as reported in the Summary Compensation Table. The Summary
Compensation Table reflects amounts paid under this variable incentive program.

Stock Options

The purpose of the stock option plan is to further align management's interests
with the company's long-term performance and, therefore, the long-term interests
of the shareholders. The committee administers this plan and grants stock
options to executive officers and other key managers. The exercise price of all
grants represents the fair market value of the common stock when granted.

The committee determines the number of stock options to grant by:

. analyzing peer group companies' competitive compensation;

. considering consultants' recommendations; and

. taking each individual's salary guideline and responsibilities into
account.

The committee may also consider the number and exercise price of options granted
to an individual in the past. Corporate or business unit measures are not used
to determine the size of individual option grants.

The stock option plan limits the number of shares issued to any individual over
the life of the plan to 20% of the total number of shares authorized by
shareholders for issuance under the plan. This provision reflects the
committee's view that the plan is intended to provide long-term incentive
compensation to a relatively broad spectrum of the company's management.

In 1999, Mr. Milliken received a grant of an option to purchase 118,000 shares
of the company's common stock. In determining the number of shares to include
in Mr. Milliken's grant, the committee considered:

. information about stock option grants to chief executive officers
of the peer group companies and a representative group of distribution
and other operating companies;

. the company's financial performance;

. the number of shares granted to other chief executive officers and
the value of those options;
<PAGE>

. the size of grants offered to the company's other executive officers;
and

. the number and exercise price of shares previously granted to Mr.
Milliken.

Other Compensation Plans

The company's executive officers are entitled to receive additional compensation
in the form of payments, allocations, or accruals under various other
compensation and benefit plans. The plans are described more fully in the
footnotes to the Summary Compensation Table and under "Other Benefit Plans" in
this section. Each of these plans is an integral part of the company's
compensation program.

Compensation Committee of the Board of Directors

Donald E. Roller, Chairman
John B. Carley
James G. Connelly III
A. William Reynolds

Performance Graph

The following graph compares the five-year cumulative total return
beginning April 7, 1995 (the date that our common stock began trading on the New
York Stock Exchange), through December 31, 1999, for the company, the Standard &
Poor's 500 index, and a selected group of office products companies. The
selected companies include Office Depot, OfficeMax, Staples, and U.S. Office
Products Company. The graph plots the growth in value of an initial $100
investment over the indicated time period, assuming the reinvestment of
dividends, if any.

[Performance Graph Appears Here]

Base
Period Return Return Return Return Return
Company\Index Name 4/7/95 1995 1996 1997 1998 1999
- ------------------ ------- ------- ------- ------- ------- -------
Boise Cascade Office
Products Corp. $100 $171.00 $166.00 $119.50 $108.00 $120.00
Industry Comparables Index* 100 107.07 102.63 135.15 195.13 116.19
S&P 500 Index 100 123.79 152.21 202.99 261.00 315.93

*Industry Comparables Index includes Office Depot, OfficeMax, Staples, and U.S.
Office Products Company.
<PAGE>

Compensation Tables
- -------------------

The following tables present compensation information for our chief executive
officer and the four next most highly compensated executive officers during
1999.

This table sets forth compensation earned during each of the last three years.

Summary Compensation Table
<TABLE>
<CAPTION>

Long-Term
Compensation
Annual Compensation Awards
----------------------------------------------- -------------
Securities All
Other Underlying Other
Annual Options/ Compen-
Name and Salary ($) Bonus ($) Compensation ($) SARs (#) sation ($)
Principal Position Year (2) (3) (4) (5) (6)
- ------------------ ---- -------- -------- ---------------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Christopher C. Milliken, 1999 $435,000 $236,295 $ -- 118,000 $32,997
President and Chief 1998 371,250 202,722 -- 90,000 26,050
Executive Officer (1) 1997 233,757 87,840 -- 28,000 22,042

Carol B. Moerdyk, 1999 267,528 109,606 -- 42,000 33,735
Senior Vice President, 1998 252,507 99,818 -- 39,000 27,363
North American and 1997 223,002 83,448 -- 28,000 27,217
Australian Contract
Operations (1)

Richard L. Black, 1999 263,694 107,541 -- 42,000 21,161
Senior Vice President, 1998 252,507 99,818 -- 39,000 16,751
Direct Marketing and 1997 223,002 78,134 -- 28,000 16,356
Europe

A. James Balkins III, 1999 223,755 92,899 -- 42,000 29,677
Senior Vice President, 1998 202,061 81,543 54,068 39,000 25,412
Chief Financial Officer, 1997 175,104 72,331 -- 0 23,946
and Treasurer (1)

Kenneth W. Cupp, 1999 225,000 72,698 52,448 34,000 12,834
Senior Vice President, 1998 175,959 73,097 -- 12,500 8,429
U.S. Contract Operations 1997 152,517 39,661 -- 8,100 8,275
</TABLE>
(1) Mr. Milliken is also a senior vice president and Mr. Balkins and Ms.
Moerdyk are also vice presidents of BCC.

(2) Includes amounts deferred under the SSRP, Key Executive Deferred
Compensation Plan, and 1995 Executive Officer Deferred Compensation Plan. Mr.
Balkins joined the company on February 10, 1998. His compensation figures
include amounts earned by him during the period from 1997 through February 9,
1998, when he was employed by BCC.
<PAGE>

(3) Payments, if any, under the company's variable incentive compensation
program. See "Annual Variable Incentive Compensation" in this section. See
footnote (2) for a discussion of Mr. Balkins' compensation.

(4) For 1998, the aggregate cost to the company of providing perquisites
received by Mr. Balkins is reported and includes $50,567 for a moving expense
reimbursement. For 1999, the aggregate cost to the company of providing
perquisites received by Mr. Cupp is reported and includes $48,296 for a moving
expense reimbursement. If any federal income taxes were incurred by the
executive and paid by the company relating to various executive officer
benefits, the amounts would be shown in this column. The cost incurred by the
company during these years for various other perquisites provided to each of the
named executive officers, except for Mr. Balkins in 1998 and Mr. Cupp in 1999,
is not included in this column because the amount did not exceed the lesser of
$50,000 or 10% of the executive's compensation during each year.

(5) Grants under the company's Key Executive Stock Option Plan. During 1997,
Mr. Balkins was not granted options to purchase shares of Boise Cascade Office
Products' common stock. He was, however, granted options by the Executive
Compensation Committee of the Boise Cascade Corporation board of directors to
purchase 8,800 shares of BCC's common stock under its Key Executive Stock Option
Plan.

(6) Amounts disclosed in this column include the following:
<TABLE>
<CAPTION>

Accruals
Company of Above- Allocations Company-
Matching Market to Paid
Contributions Interest on Boise Cascade Portion
to the Deferred Corporation of Executive
Deferred Compensation Employee Officer Life
Compensation or Plans Stock Ownership Insurance
Name Year SSRP Plans ($)(*) Balances ($) Plan ($) Programs ($)
- ---- ---- ---------------- ------------ --------------- ------------
<S> <C> <C> <C> <C> <C>
Christopher C. Milliken 1999 $18,961 $10,588 $ 0 $3,448
1998 13,773 8,072 0 4,205
1997 12,993 6,356 0 2,693

Carol B. Moerdyk
1999 11,020 16,441 0 6,274
1998 10,079 11,031 0 6,253
1997 12,475 7,156 0 7,586

Richard L. Black 1999 10,905 9,404 0 852
1998 9,919 5,701 0 1,131
1997 11,832 3,537 0 987

A. James Balkins III 1999 9,165 13,788 0 6,724
1998 9,366 9,282 0 6,764
1997 8,082 6,119 1,674 8,071

Kenneth W. Cupp 1999 8,943 3,145 0 746
1998 6,001 1,794 0 634
1997 6,756 953 0 566
</TABLE>
<PAGE>

(*) The company's 1995 Executive Officer Deferred Compensation Plan is an
unfunded plan. Executive officers may irrevocably elect to defer receipt of a
portion (6% to 20%) of their base salary until termination of employment or
beyond. Amounts so deferred are generally credited with imputed interest at a
rate equal to 130% of Moody's Composite Average of Yields on Corporate Bonds.
The SSRP is a profit-sharing plan qualified under Section 401(a) of the Internal
Revenue Code which contains a cash or deferred arrangement meeting the
requirements of Section 401(k) of the Code.

Stock Option Tables

This table details the 1999 option grants under our Key Executive Stock Option
Plan ("KESOP") to the five executives named in the Summary Compensation Table,
as well as to all executive officers as a group and nonofficer employees as a
group.

Option/SAR Grants In 1999
<TABLE>
<CAPTION>
Grant
Individual Grants Date Value
---------------------------------------------------------- ----------
Number of
Securities Percent of
Underlying Total Options/ Exercise Grant Date
Options/SARs SARs Granted to or Base Present
Granted Employees in Price Expiration Value (2)
Name (#) Fiscal Year ($/Sh) (1) Date ($)
- ---- ------------ --------------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Christopher C. Milliken 118,000 11.44% $12.8125 2/17/09 $ 540,440

Carol B. Moerdyk 42,000 4.07 12.8125 2/17/09 192,360

Richard L. Black 42,000 4.07 12.8125 2/17/09 192,360

A. James Balkins III 42,000 4.07 12.8125 2/17/09 192,360

Kenneth W. Cupp 34,000 3.30 12.8125 2/17/09 155,720

Executive officers
as a group 469,000 45.48 12.8125 2/17/09 2,148,020

Nonofficer employees
as a group 562,300 54.52 12.8125 2/17/09 2,575,334
</TABLE>
<PAGE>

(1) Under the KESOP, the exercise price must be the fair market value at the
date of grant. Options granted under this plan during 1999 were fully
vested when granted. However, except under limited circumstances, the
options are exercisable only as follows: one-third of each option is
exercisable after one year from the grant date, two-thirds of each option
is exercisable after two years from the grant date, and the entire option
is exercisable after three years from the grant date. Under the plan, no
options may be granted after February 20, 2005. The expiration dates are
10 years after the grant date of each option grant.

(2) "Grant Date Value" has been calculated using the Black-Scholes model of
option valuation, with assumptions of: (a) risk-free interest rate of
5.05%, (b) expected stock price volatility of 35%, (c) expected option term
of 4.2 years, and (d) no dividends. Based on this model, the calculated
value of the options on February 16, 1999 (grant date), is $4.58 per share
granted. This value does not necessarily represent the amount an option
holder may ultimately realize upon exercise of an option.

The following table sets forth the shares acquired and gross value (without
adjustment for personal income taxes and fees, if any) realized by the top five
executives when they exercised their stock options during 1999 and also states
the year-end gross value of unexercised stock options held by these executives.

Aggregate Option/SAR Exercises For 1999 and 1999 Option/SAR Values
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs
12/31/99 (#) at 12/31/99 ($)
Shares Acquired Value Exercisable/ Exercisable/
Name Upon Exercise Realized (1) Unexercisable Unexercisable (2)
- ------------------------- --------------- ------------ --------------- ----------------
<S> <C> <C> <C> <C>
Christopher C. Milliken 0 $0 109,067/187,333 $ 71,000/258,125

Carol B. Moerdyk 0 0 106,067/ 77,333 107,250/ 94,375

Richard L. Black 0 0 97,467/ 77,333 85,750/ 94,375

A. James Balkins III 0 0 13,000/ 68,000 1,250/ 94,375

Kenneth W. Cupp 0 0 25,517/ 45,033 21,979/ 75,583
</TABLE>
(1) The "value realized" represents the difference between the option's
exercise price and the value of the company's common stock at the time of
exercise.

(2) This column indicates the aggregate amount, if any, by which the common
stock share price on December 31, 1999, $15.00, exceeded the options'
exercise price.
<PAGE>

Other Benefit Plans

Pension Plan

We are a participating employer in the Boise Cascade Corporation Pension
Plan for Salaried Employees. The estimated annual benefits payable upon
retirement at age 65 under this plan for specified levels of average
remuneration and years-of-service classifications are set out in the following
table.

Pension Plan Table

- --------------------------------------------------------------------------------
Years of Service
-------------------------------------------------------------------
Remuneration 5 10 15 20 25 30 35
- --------------------------------------------------------------------------------
$175,000 $10,938 $ 21,875 $ 32,813 $ 43,750 $ 54,688 $ 65,625 $ 76,563
200,000 12,500 25,000 37,500 50,000 62,500 75,000 87,500
250,000 15,625 31,250 46,875 62,500 78,125 93,750 109,375
300,000 18,750 37,500 56,250 75,000 93,750 112,500 131,250
400,000 25,000 50,000 75,000 100,000 125,000 150,000 175,000
500,000 31,250 62,500 93,750 125,000 156,250 187,500 218,750
600,000 37,500 75,000 112,500 150,000 187,500 225,000 262,500
700,000 43,750 87,500 131,250 175,000 218,750 262,500 306,250
800,000 50,000 100,000 150,000 200,000 250,000 300,000 350,000
- --------------------------------------------------------------------------------

The pension plan entitles each vested employee, including executive officers, to
receive a pension benefit at normal retirement equal to 1 1/4% of the highest
average of any five consecutive years of compensation (as defined in the plan)
out of the last ten years of employment, multiplied by the employee's years of
service.

Under the plan, "compensation" is the employee's base salary plus any amounts
earned under the company's variable incentive compensation program (only
"Salary" and "Bonus" from the Summary Compensation Table). As of December 31,
1999, the highest average of annual compensation during any five consecutive
years for 1990 through 1999 and the years of service for the named executives
are as follows:

Name Compensation Years of Service
---- ------------ ----------------
Christopher C. Milliken $422,224 22
Carol B. Moerdyk 342,253 19
Richard L. Black 336,934 6
A. James Balkins III 254,802 21
Kenneth W. Cupp 224,389 31

As shown in the Pension Plan Table above, benefits are computed on a straight-
life annuity basis and are not offset by social security or other retirement-
type benefits. An employee is 100% vested in his or her pension benefit after
five years of service, except for certain breaks in service. If an employee is
entitled to a greater benefit under the plan's formula than the Internal Revenue
Code allows for tax-qualified
<PAGE>

plans, the excess benefits will be paid from the company's general assets under
the unfunded Supplemental Pension Plan. The benefit under the qualified pension
plan is reduced by compensation deferred under any nonqualified deferred
compensation plan. The Supplemental Pension Plan will also provide payments to
the extent that participation in these deferred compensation plans has the
effect of reducing an individual's pension benefit under the qualified plan.

In the event of a change in control (as defined in the plan) of BCC, the plan
restricts the ability of the plan sponsor or its successor to recoup surplus
plan assets, if any exist. In general, after a change in control, the
participants and beneficiaries will receive the plan's surplus assets, if any,
on a pro rata basis if the plan is terminated, merged or consolidated with
another plan, or the assets are transferred to another plan.

After a change in control, a majority (in both number and interest) of plan
participants and beneficiaries must consent to amend this provision.

Early Retirement Plan

The Early Retirement Plan applies to:

. executive officers 55 years old or older who are also executive
officers of BCC;

. who have ten or more years of service;

. who have served as an executive officer for at least five full years;
and

. who retire before age 65.

Eligible officers receive an early retirement benefit prior to age 65 equal to
the benefit calculated under the Pension Plan for Salaried Employees without
reduction due to the officer's early retirement. Messrs. Milliken and Balkins
and Ms. Moerdyk participate in this plan.

Executive Officer Agreements

We have entered into agreements with Messrs. Milliken and Balkins and Ms.
Moerdyk who are also executive officers (but not employees) of BCC. These
agreements formalize their severance benefits if any of those persons'
employment is terminated after a change in control (as defined in the
agreements) of BCC. The agreements provide certain severance benefits and
protect other benefits that the named officers have already earned or reasonably
expect to receive under our employee benefit plans. The officer will receive
the benefits provided under the agreement if, after a change in control of BCC,
the officer's employment is terminated other than for cause or disability (as
defined in the agreement) or if the officer terminates employment after actions,
specified in the agreement, which adversely affect the officer are taken. Under
the agreement, the officer must remain employed with us for six months following
the first potential change in control of BCC.

These agreements help ensure that we will have the benefit of these officers'
services without distraction in the face of a potential change in control of our
majority shareholder. The board of directors believes that the agreements are
in the best interests of our shareholders and the company. BCC has entered into
similar agreements with all its executive officers.
<PAGE>

The benefits under the agreements include:

. the officer's salary through the termination date;

. severance pay equal to three times the officer's annual base salary
and target incentive pay, less any severance pay that the officer
receives under the Severance Pay Policy for Executive Officers, which
is currently the amount of the officer's annual base salary;

. vacation pay according to our Paid Time Off Policy;

. any earned but unpaid bonus under the Key Executive Performance Plan
(or any substitute plan) for the year preceding termination;

. an award under the Key Executive Performance Plan (or any substitute
plan) equal to the greater of:

(a) the officer's target award prorated through the month in which the
officer is terminated; or

(b) the actual award through the end of the month prior to termination
based upon the award criteria for the applicable plan, prorated
through the month in which the officer is terminated;

. accelerated exercisability of the officer's stock options;

. benefits under the Supplemental Early Retirement Plan; and

. certain additional retirement and other employee benefits.

The agreements provide four additional benefits. First, we will maintain for up
to one year all employee benefit plans and programs in which the officer was
entitled to participate immediately prior to termination or we will substitute
similar arrangements. Second, we will maintain our participation in the Split-
Dollar Life Insurance Plan until the officer's insurance policy under that plan
is fully paid. Third, we will pay legal fees and expenses which the officer
incurs to enforce his or her rights or benefits under the agreement. Fourth, we
will increase the officer's total payments under the agreement to cover any
excise taxes imposed by the Internal Revenue Service as a result of such
payments.

The estimated amount of payments and other benefits (not including legal fees,
if any) each named executive officer would receive under the agreement based on
1999 compensation figures (in excess of the benefits to which the officer is
entitled without the agreement) is:

. Christopher C. Milliken $3,313,484
. Carol B. Moerdyk 1,740,925
. A. James Balkins III 1,436,722

(Payments which would be made subsequent to the termination date have been
discounted as of December 31, 1999, at a rate of 7.12%, according to the
requirements of Section 280G of the Internal Revenue Code.) Actual payments
made under the agreements at any future date would vary, depending in part upon
what the executive has accrued under the variable compensation plans and benefit
plans.
<PAGE>

Each agreement is effective until December 31, 2002. The agreements are
automatically extended each January 1 for a new three-year period, unless we
notify the officers by September 30 of the preceding year that we do not wish to
extend the agreements.

Deferred Compensation and Benefits Trust

The company has established a deferred compensation and benefits trust. This
trust is intended to ensure that participants and beneficiaries under several of
our nonqualified and unfunded deferred compensation plans and the executive
officer agreements will receive the benefits they have earned in the event of a
change in control of BCC (as defined in the plans and the agreements). The
trust will not increase the benefits to which any individual participant is
entitled under the covered plans and agreements. If a potential change in
control occurs, the trust will be revocably funded. If an actual change in
control occurs, the trust will be irrevocably funded and will pay benefits to
participants in accordance with the plans and agreements. The trustee will
receive fees and expenses either from us or from the trust assets. If the
company become bankrupt or insolvent, the trust assets will be accessible to the
claims of the company's creditors.

Indemnification

To the extent that Delaware law permits, we will indemnify our directors and
officers against liabilities they incur in connection with actual or threatened
proceedings to which they are or may become parties and which arise from their
status as directors and officers. We insure, within stated limits, the
directors and officers against these liabilities. The aggregate premium on the
insurance policies for 1999 was $64,272.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Stock Ownership

Majority Shareholder

As of December 31, 1999, BCC, a Delaware corporation headquartered in Boise,
Idaho, beneficially owned an aggregate of 53,398,724 shares, or 81.1%, of our
outstanding common stock. BCC has sole voting and investment power over all of
these shares. Because of their relationship with BCC, Messrs. Crumley, Harad,
and Reynolds may be deemed by the Securities and Exchange Commission to
beneficially own the shares of our common stock owned by BCC. Each of these
three people disclaims any beneficial ownership of those shares.
<PAGE>

Directors and Executive Officers

The directors, nominees for director, and executive officers furnished the
following information to us regarding the shares of our common stock which they
beneficially owned on December 31, 1999.

Ownership of Boise Cascade Office Products Corporation Stock

- --------------------------------------------------------------------------------
Amount and Nature of Percent
Name of Beneficial Owner Beneficial Ownership of Class
- --------------------------------------------------------------------------------

Directors (1)
- -------------
John B. Carley............................. 47,000 *
James G. Connelly III...................... 26,000 *
Theodore Crumley........................... 1,000 *
Peter G. Danis Jr.......................... 324,800 *
George J. Harad............................ 2,000 *
Christopher C. Milliken.................... 318,639(2) *
A. William Reynolds........................ 43,000 *
Donald E. Roller........................... 11,000 *

Other Named Executives
- ----------------------
Carol B. Moerdyk........................... 192,689(2) *
Richard L. Black........................... 176,294(2) *
A. James Balkins III....................... 91,254(2) *
Kenneth W. Cupp............................ 75,522(2) *

All directors, nominees for director, and
executive officers as a group (1)(2)..... 1,882,336 2.73%

*Less than 1% of class
- --------------------------------------------------------------------------------

(1) Beneficial ownership for the directors includes all shares held of record
or in street name, plus options granted but unexercised under the Director
Stock Option Plan ("DSOP"), described under "Director Compensation" in Part
III, Item 11. The number of shares subject to options under the DSOP
included in the beneficial ownership table is as follows: Messrs. Carley,
23,000 shares; Connelly, 23,000 shares; Danis, 10,000 shares; Reynolds,
23,000 shares; Roller, 10,000 shares; and directors as a group, 89,000
shares.

(2) The beneficial ownership for these executive officers includes all shares
held of record or in street name, plus options granted but unexercised
under the Key Executive Stock Option Plan ("KESOP"), described under "Stock
Option Tables" in Part III, Item 11, and interests in shares of common
stock held in the Boise Cascade Office Products Common Stock Fund by the
trustee of the Savings and
<PAGE>

Supplemental Retirement Plan ("SSRP"), a defined contribution plan qualified
under Section 401(a) of the Internal Revenue Code. The following table
indicates the nature of each executive's stock ownership.

Common Unexercised SSRP
Shares Option (Common
Owned Shares Stock)
------ ----------- -------
Christopher C. Milliken 8,400 296,400 13,839
Carol B. Moerdyk 5,000 183,400 4,289
Richard L. Black 1,494 174,800 0
A. James Balkins III 200 81,000 10,054
Kenneth W. Cupp 1,660 70,550 3,312

All executive officers
as a group 25,759 1,362,050 39,727

On December 31, 1999, the following directors, nominees for director, and
executive officers beneficially owned or held options for the following number
of shares of BCC's common and preferred stock.

Ownership of Boise Cascade Corporation Stock
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
Total
Common Unexercised Deferred SSRP Shares ESOP
Shares Option Stock (Common Common (Preferred
Name of Beneficial Owner Owned Shares Units Stock) Stock (1) Stock) (2)
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>

Directors
- ---------
Theodore Crumley 1,247 189,300 1,547 19,369 211,463 616
George J. Harad 3,511 743,500 8,719 7,972 763,702 863
Christopher C. Milliken 0 0 0 0 0 974
A. William Reynolds 10,000 16,864 0 0 26,864 0

Other Named Executives
- ----------------------
Carol B. Moerdyk 0 42,700 0 43 42,743 285
A. James Balkins III 65 31,200 0 0 31,265 483
Kenneth W. Cupp 0 0 0 14 14 856

All directors, nominees for
director, and executive
officers as a group 17,173 1,208,424 13,055 30,128 1,268,780 13,178
- -----------------------------------------------------------------------------------------------
</TABLE>

(1) Mr. Harad beneficially owns about 1.24% of BCC's common stock. All of our
executive officers, directors, or nominees for director (as a group)
beneficially own 2.05% of BCC's common stock.
<PAGE>

(2) Our executive officers (individually or as a group) do not own more than 1%
of BCC's Series D preferred stock (ESOP).

Ownership of More than 5% of Boise Cascade Office Products Stock

As of December 31, 1999, the table below describes each person or entity that we
know to be the beneficial owner of more than 5% of any class of our voting
securities.

- ------------------------------------------------------------------------------
Voting Dispositive
Authority Authority Total Amount Percent
----------------- ----------------- of Beneficial of
Name and Address Sole Shared Sole Shared Ownership Class
- ------------------------------------------------------------------------------

Common Stock, $.01 Par Value
- ----------------------------

Boise Cascade
Corporation 53,398,724 0 53,398,724 0 53,398,724 81.1%
1111 W. Jefferson
Street
P.O. Box 50
Boise, ID 83728
- ------------------------------------------------------------------------------

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

As of December 31, 1999, BCC owned 81.1% of the outstanding shares of our common
stock. We supply office products to BCC and purchase certain paper and paper
products from them. During the year ended December 31, 1999, our sales to BCC
were $2,021,000 and our purchases from them were $306,072,000. We anticipate
that our sales and purchases with BCC during 2000 will exceed those in 1999.

In December 1999, BCC announced a proposal to acquire our outstanding public
shares. On March 12, 2000, BCC and BCOP entered into an Agreement and Plan of
Merger in which BCC would purchase all of BCOP's publicly held shares for $16.50
in cash. In accordance with that Agreement, BCC commenced a tender offer
for our minority public shares on March 22, 2000. The offer will expire on April
19, 2000, unless it is extended. If BCC is successful in obtaining a majority of
the minority shares, it will purchase the remaining shares through a short-form
merger. If BCC completes the tender and merger, we will again become a wholly-
owned subsidiary of BCC.

We have entered into a number of agreements with BCC regarding our ongoing
relationship. Because our various relationships with BCC are so complex, each
agreement or the transactions within it, considered separately, may contain
terms less favorable to us than we might have obtained from an unaffiliated
third party. Nevertheless, the company and BCC intend that these interrelated
agreements and transactions, taken as a whole, should fairly accommodate our
respective interests while continuing certain mutually beneficial joint
arrangements.

We may enter into additional or modified arrangements and transactions with BCC.
While we expect any future arrangements and transactions to be negotiated,
conflicts of interest may occur. Although we have not adopted any formal
procedures to prevent conflicts of interest, we intend to seek our independent
directors' approval for any agreement which our management or any independent
director believes to be materially important to us and to involve a significant
conflict of interest with BCC.
<PAGE>

Certain arrangements and transactions between us and BCC or its affiliates are
summarized below.

Paper Sales Agreement

The majority of our purchases from BCC are under a Paper Sales Agreement whereby
BCC sells us office papers. We calculate the prices for these papers with a
formula meant to approximate prevailing market prices. The agreement has an
initial term of 20 years, commencing April 1, 1995. It will automatically renew
for five-year periods, subject to termination rights under specific
circumstances.

Administrative Services Agreement

We also have an agreement under which BCC provides various administrative
services to us. These services include, among others, financial reporting, cash
management, human resources services, legal and corporate secretarial functions,
internal audit, benefits administration, transfer agent functions, and
insurance. These services are provided for varying periods, from one to five
years, and may be renewed or terminated from time to time. BCC charges us rates
for these services which reasonably approximate the cost to BCC of providing
these services to us. During 1999, we paid BCC $3,272,000 under this agreement.

Tax Matters Agreement

We have entered into an agreement with BCC which allocates state and federal tax
liabilities and obligations between us. Since April 1, 1995, we have been
responsible for all tax liability which we incur. BCC must provide tax
administration for us, and we must reimburse them for the administration costs.

Shareholder Agreement

Finally, we have an agreement with BCC which establishes certain rights for BCC
to purchase shares of voting stock or securities convertible into voting stock
which we may wish to sell from time to time. In addition, this agreement gives
BCC certain demand and participation registration rights for the shares of our
stock which it holds.

Additional information concerning certain relationships and related transactions
during 1999 is set forth in Note 2, "Transactions With Boise Cascade
Corporation," of the Notes to Financial Statements in Part II, Item 8 of this
Form 10-K.

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
Boise Cascade Office Products Corporation:

(1) Financial Statements
See listing of Financial Statements included in this Form 10-K in
Part II, Item 8.
<PAGE>

(2) Financial Statement Schedules

None required.

(3) Exhibits

Required exhibits are listed in the Index to Exhibits and are
incorporated by reference.

(b) Reports on Form 8-K

No Form 8-K's were filed during the fourth quarter of 1999.

See Index to Exhibits.
<PAGE>

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 Office Products Corporation

By /s/ Christopher C. Milliken
----------------------------
Christopher C. Milliken
Chief Executive Officer
Dated: March 29, 2000

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 29, 2000.
<TABLE>
<CAPTION>
Signature Capacity
<S> <C> <C>
(i) Principal Executive Officer:

/s/ Christopher C. Milliken
--------------------------------------- Chief Executive Officer
Christopher C. Milliken

(ii) Principal Financial Officer:

/s/ A. James Balkins III
--------------------------------------- Senior Vice President and
A. James Balkins III Chief Financial Officer

(iii) Principal Accounting Officer:

/s/ Thomas J. Jaszka
--------------------------------------- Vice President and Controller
Thomas J. Jaszka

(iv) Directors:

/s/ Christopher C. Milliken
---------------------------------------
Christopher C. Milliken

/s/ George J. Harad
---------------------------------------
George J. Harad

/s/ John B. Carley
---------------------------------------
John B. Carley

/s/ James G. Connelly III
---------------------------------------
James G. Connelly III

/s/ Theodore Crumley
---------------------------------------
Theodore Crumley

/s/ Peter G. Danis Jr.
---------------------------------------
Peter G. Danis Jr.

/s/ A. William Reynolds
---------------------------------------
A. William Reynolds

/s/ Donald E. Roller
---------------------------------------
Donald E. Roller
</TABLE>
<PAGE>

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation of our
report dated January 28, 2000, included in this Form 10-K for the year ended
December 31, 1999, into Boise Cascade Office Products Corporation's previously
filed registration statement on Form S-8 (File No. 33-96348); registration
statement on Form S-8 (File No. 333-1132); registration statement on Form S-8
(File No. 333-1134); registration statement on Form S-8 (File No. 333-1152);
post-effective amendment No. 1 to registration statement on Form S-1 (File No.
333-3660); registration statement on Form S-3 (File No. 333-50131); and
registration statement on Form S-8 (File No. 333-80989).

/s/Arthur Andersen LLP

Boise, Idaho
March 29, 2000

<PAGE>

BOISE CASCADE OFFICE PRODUCTS CORPORATION
INDEX TO EXHIBITS
Filed With the Annual Report on Form 10-K
for the Year Ended December 31, 1999
<TABLE>
<CAPTION>

Number Description Page Number
- ------ ----------- -----------
<S> <C> <C> <C>

2.1 (1) Asset Transfer and Subscription Agreement
dated April 1, 1995 --
2.2 (2) Share Purchase Agreement dated July 2, 1997,
by and among Boise Cascade Office Products
Corporation, Jean-Paul Guisset, and Mrs.
Marie Annick Guisset --
3.1 (3) Restated Certificate of Incorporation --
3.2 (4) Bylaws, as amended October 11, 1995 --
4.1 (1) Specimen Certificate Representing Shares of
Common Stock --
4.2 (5) Credit Agreement dated June 26, 1997 --
9 Inapplicable --
10.1 (6) Form of Executive Officer Severance Agreement,
as amended through August 3, 1999 --
10.2 (3) Administrative Services Agreement dated
April 1, 1995 --
10.3 (7) Paper Sales Agreement dated April 1, 1995 --
10.4 (3) License Agreement dated April 1, 1995 --
10.5 (3) Shareholder Agreement dated April 1, 1995 --
10.6 (3) Tax Matters Agreement dated April 1, 1995 --
10.7 (8) Key Executive Stock Option Plan, as amended
through February 16, 1999 --
10.8 (9) Director Stock Option Plan, as amended through
December 17, 1996 --
10.9 (3) Form of Confidential Information and Noncompetitive
Agreement, approved February 20, 1995 --
10.10 (6) Early Retirement Plan for Executive Officers, as
amended through August 3, 1999 --
10.11 (6) Supplemental Pension Plan, as amended
through August 3, 1999 --
10.12 (3) Key Executive Deferred Compensation Plan,
effective February 20, 1995 --
10.13 Executive Officer Financial Counseling Program, as
amended through August 3, 1999
10.14 (4) Split-Dollar Life Insurance Plan, as amended
July 27, 1995 --
10.15 (9) Supplemental Health Care Plan for Executive
Officers, revised July 31, 1996 --
10.16 (3) Executive Officer Severance Pay Policy, adopted
February 20, 1995 --
10.17 (3) Key Executive Performance Plan, adopted
February 20, 1995 --
</TABLE>
<PAGE>

<TABLE>

<S> <C> <C> <C>
10.18 1999 and 2000 Performance Criteria for the Key
Executive Performance Plan
10.19 (3) Board of Directors Deferred Compensation Plan,
effective February 14, 1995 --
10.20 (4) 1995 Executive Officer Deferred Compensation
Plan, effective January 1, 1996 --
10.21 (4) 1995 Board of Directors Deferred Compensation
Plan, effective January 1, 1996 --
10.22 (10) Form of Deferred Compensation and
Benefits Trust dated January 30, 1996 --
10.23 Executive Officer Wellness Program,
adopted August 3, 1999
11 Inapplicable --
12 Ratio of Earnings to Fixed Charges
13 Incorporated sections of the Boise Cascade Office
Products Corporation Fact Book for the fourth
quarter of 1999
16 Inapplicable --
18 Inapplicable --
21 Significant subsidiaries of the registrant
22 Inapplicable --
23 Consent of Arthur Andersen LLP (see page 65)
24 Inapplicable --
27 Financial Data Schedule
28 Inapplicable --
99 Inapplicable --
</TABLE>

(1) Exhibits 2.1 and 4.1 were filed under the same exhibit numbers in our
Amendment No. 1 to the Registration Statement on Form S-1 filed on March
28, 1995, and are incorporated by reference.

(2) Exhibit 2.2 was filed as Exhibit 2 in our current report on Form 8-K filed
on July 17, 1997, and is incorporated by reference.

(3) Exhibits 3.1, 10.2, 10.4, 10.5, 10.6, 10.9, 10.12, 10.16, 10.17, and 10.19
were filed under the same exhibit numbers in our Registration Statement on
Form S-1 filed on February 22, 1995, and are incorporated by reference.

(4) Exhibits 3.2, 10.14, 10.20, and 10.21 were filed under the same exhibit
numbers in our 1995 Annual Report on Form 10-K and are incorporated by
reference.

(5) The Credit Agreement dated June 26, 1997, was filed as Exhibit 4 in our
Quarterly Report on Form 10-Q for the quarter ended June 30, 1997, and is
incorporated by reference.

(6) The Form of Executive Officer Severance Agreement, Early Retirement Plan
for Executive Officers, and Supplemental Pension Plan were filed as
Exhibits 10.1, 10.2, and 10.3 in our Quarterly Report on Form 10-Q for the
quarter ended September 30, 1999, and are incorporated by reference.

(7) Exhibit 10.3 was filed under the same exhibit number in our Amendment No. 1
to the Registration
<PAGE>

Statement on Form S-1 filed on March 28, 1995, and is incorporated by
reference. The Company has been granted an order of confidential treatment
with respect to a portion of Exhibit 10.3.

(8) Exhibit 10.7 was filed under the same exhibit number in our 1998 Annual
Report on Form 10-K and is incorporated by reference.

(9) Exhibits 10.8 and 10.15 were filed under the same exhibit numbers in our
1996 Annual Report on Form 10-K and are incorporated by reference.

(10) The Form of Deferred Compensation and Benefits Trust dated January 30,
1996, was filed as Exhibit 10 in our Quarterly Report on Form 10-Q for the
quarter ended March 31, 1996, and is incorporated by reference.

<PAGE>

Exhibit 10.13

Boise Cascade Office Products Corporation
Executive Officer Financial Counseling Program
(As Amended Through August 3, 1999)

The Executive Officer Financial Counseling Program provides an annual allowance
for tax preparation, investment planning, tax planning and compliance, and
estate planning. An initial allowance of $8,000 is available through December
31, 2000. Beginning January 1, 2001, a $4,000 annual allowance is available and
will be added to any remaining balance up to a maximum of $8,000. All Boise
Cascade Office Products Corporation executive officers may participate in this
program.

Invoices for financial counseling must be personally approved for payment and be
signed by the executive officer. Payment will normally be made directly to the
provider. Invoices must be submitted to:

Executive Compensation
Boise Cascade Corporation
P.O. Box 50
Boise, ID 83728-0001

Payment or reimbursement for these services is generally not deductible for
federal income tax purposes. Reimbursement includes a tax gross-up of 39%. The
total payment or reimbursement amount (including the gross-up) is taxable income
to the executive officer and is reported in W-2 earnings. Maximum allowances
under the program include the gross-up amount.

<PAGE>

Exhibit 10.18

BOISE CASCADE OFFICE PRODUCTS CORPORATION
KEY EXECUTIVE PERFORMANCE PLAN

1999 Payout Criteria
--------------------

PAYOUT AS A PERCENT OF SALARY

<TABLE>
<CAPTION>
Financial
Improvement CEO SVP VP
----------- --- --- --
<S> <C> <C> <C>
($57,988,000) 0.0% 0.0% 0.0%
($23,037,000) 14.5% 11.1% 8.9%
$11,963,000 79.5% 61.1% 48.9%
$11,963,001 109.5% 84.3% 67.4%
$46,963,000 131.2% 100.9% 80.7%
</TABLE>

. For Financial Improvement in excess of $47 million, the payout increases
proportionally to the increase from $12 million to $47 million.

. The payout is interpolated on a straight line for Financial Improvement not
shown in the table.

. Financial Improvement is measured by calculating the company's economic
value added.

Economic Value Added = Net Operating Profit Before Tax - Capital Charge

Net Operating Profit
Before Tax (NOPBT)* = Income from operating assets
+ Imputed interest of capitalized lease obligations
- Amortization of restructuring losses

* Unusual nonrecurring and nonoperating income or expense items do not affect
NOPBT

Capital Charge = Capital x 16%

Capital** = Operating Capital
+ Imputed capital value of lease obligations
- Gain from the sale of assets
+ Unamortized restructuring losses

** Nonrecurring and nonoperating losses do not affect Operating Capital. There
may be adjustments to Operating Capital for strategic investments while
they are under construction and up to two additional years subject to
approval by the Compensation Committee of the Board.
<PAGE>

BOISE CASCADE OFFICE PRODUCTS CORPORATION
KEY EXECUTIVE PERFORMANCE PLAN

2000 Payout Criteria
--------------------

PAYOUT AS A PERCENT OF SALARY
<TABLE>
<CAPTION>
Financial
Improvement CEO SVP VP
----------- --- --- --
<S> <C> <C> <C>
($36,651,500) 0.0% 0.0% 0.0%
($25,000,000) 7.2% 5.5% 4.4%
$14,514,000 80.6% 62.0% 49.6%
$14,514,001 107.5% 82.7% 66.2%
$34,514,000 129.2% 99.4% 79.5%
</TABLE>

. For Financial Improvement in excess of $34 million, the payout increases
proportionally to the increase from $14 million to $34 million.

. The payout is interpolated on a straight line for Financial Improvement not
shown in the table.

. Financial Improvement is measured by calculating the company's economic
value added.

Economic Value Added = Net Operating Profit Before Tax - Capital Charge

Net Operating Profit
Before Tax (NOPBT)* = Income from operating assets
+ Imputed interest of capitalized lease obligations
- Amortization of restructuring losses

* Unusual nonrecurring and nonoperating income or expense items do not affect
NOPBT

Capital Charge = Capital x 16%

Capital** = Operating Capital
+ Imputed capital value of lease obligations
- Gain from the sale of assets
+ Unamortized restructuring losses

<PAGE>

Exhibit 10.23

BOISE CASCADE OFFICE PRODUCTS CORPORATION

EXECUTIVE OFFICER WELLNESS PROGRAM

(Adopted August 3, 1999)
<PAGE>

BOISE CASCADE OFFICE PRODUCTS CORPORATION
EXECUTIVE OFFICER WELLNESS PROGRAM

INTRODUCTION

Boise Cascade Office Products Corporation ("BCOP" or the "Company") has adopted
an Executive Officer Wellness Program (the "Plan") to encourage executive
officers to monitor their health status, establish active dialogues with their
physicians, and engage in appropriate health screening based on various factors.
Participation in the Plan is voluntary and confidential. Reports to BCOP are
not required.

WHO IS ELIGIBLE

Executive officers of BCOP who are not also officers of Boise Cascade
Corporation are automatically eligible to participate in the Plan.

WHAT THE PLAN PROVIDES

The Plan provides a limited reimbursement allowance for annual wellness
examinations by a physician, a Health Risk Appraisal questionnaire for use by
you and your physician, and an annual subscription to the Harvard Health Letter.

The initial reimbursement allowance is $1000 for services provided in connection
with a wellness examination through December 31, 2000. Beginning January 31,
2001, $500 per year will be added to the reimbursement allowance. However, at
no time will your reimbursement allowance exceed $1000.

CLAIMS

You may make a claim for reimbursement from your reimbursement allowance by
sending your request for reimbursement together with an itemized billing from
your physician to Boise Cascade HR Services at the following address:

Boise Cascade HR Services
Attention: Sally Wyman
P.O. Box 61
Boise, ID 83707

Boise Cascade HR Services will coordinate the reimbursement to you through
Regence (Blue Cross/Blue Shield). Reimbursement payments are not subject to any
deductible.

PLAN ADMINISTRATION, ERISA RIGHTS

The BCOP Benefits Health Care booklet (the summary plan description) identifies
the plan administrator and explains your ERISA rights under this Plan. If a
dispute or

<PAGE>

disagreement arises regarding terms of coverage, or benefits provided under this
Plan, you must use the "claims/appeal" processes described in that booklet.

SOURCE OF FUNDING

This Plan is self-insured by the Company. Payments for benefits under this Plan
are made from the general assets of the Company as benefits become payable.

TAXABILITY

All benefits payable under this Plan are considered taxable income to you, are
subject to tax withholding requirements, and will be reflected in your Form W-2
earnings.

COVERAGE DURING A LEAVE OF ABSENCE

Your medical coverages may be continued while you are still employed by the
Company but are not actively at work because of an accident or illness or
certain other company-approved leaves of absence. Under such conditions,
coverage under this Plan will continue in keeping with the provisions of the
leave.

WHEN YOUR COVERAGE ENDS

Your coverage under the Plan ends on the earliest of the following dates:
--------

. On the date your employment with BCOP ends.
. On the date you become ineligible to participate in these coverages --
for example, if you cease to be an executive officer of BCOP.
. On the date BCOP elects to discontinue this Plan.

The Company expressly reserves the right to amend or terminate this Plan at
any time. Coverage under this Plan is not and should not be deemed to
create a contract of employment and under no circumstances shall be
construed to give any participant a right to remain an employee or officer
of the Company for any period. Any participant in this Plan is employed
solely at the will of the Company.

To the extent not governed by federal law, this Plan will be construed
according to the laws of the state of Idaho. In the event any lawsuit or
legal action is brought (by any party, person, or entity regarding this
Plan, benefits hereunder, or any related issue), such action or suit may be
brought only in Federal District Court in the District of Idaho.

<PAGE>

EXHIBIT 12

BOISE CASCADE OFFICE PRODUCTS CORPORATION
RATIO OF EARNINGS TO FIXED CHARGES

<TABLE>
<CAPTION>
For the Year Ended December 31
-------------------------------------------------
1999 1998 1997 1996 1995
--------- --------- -------- -------- -------
(dollars in thousands)
<S> <C> <C> <C> <C> <C>
Interest costs and amortization
of debt costs $ 24,940 $ 26,273 $ 20,308 $ 7,868 $ 725
Interest costs capitalized
during the period 204 1,025 - - -
Interest factor related to
noncapitalized leases (1) 6,265 5,207 4,456 4,839 2,203
-------- -------- -------- -------- -------
Total fixed charges $ 31,409 $ 32,505 $ 24,764 $ 12,707 $ 2,928
======== ======== ======== ======== =======

Income before income taxes $130,427 $ 95,911 $ 99,784 $ 93,812 $71,370
Total fixed charges 31,409 32,505 24,764 12,707 2,928
Less: Interest capitalized (204) (1,025) - - -
-------- -------- -------- -------- -------
Total earnings before
fixed charges $161,632 $127,391 $124,548 $106,519 $74,298
======== ======== ======== ======== =======

Ratio of earnings to fixed charges 5.1 3.9 5.0 8.4 25.4
</TABLE>

(1) Interest expense for operating leases with terms of one year or longer is
based on an imputed interest rate for each lease.

<PAGE>

Exhibit 13

Statements of Income (Unaudited) Boise Cascade Office Products Corporation
================================================================================

<TABLE>
<CAPTION>
Three Months Ended Year Ended
December 31 December 31
------------------ -----------------------
1999 1998 1999 1998
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
(expressed in thousands,
except share information)

Net sales $893,256 $814,219 $3,381,725 $3,067,327
Cost of sales 663,685 598,083 2,511,882 2,278,845
- ----------------------------------------------------------------------------------------------------------------------------
Gross profit 229,571 216,136 869,843 788,482
- ----------------------------------------------------------------------------------------------------------------------------
Selling and warehouse operating expense 168,761 162,509 653,575 593,672
Corporate general and administrative expense 13,122 13,708 51,220 51,505
Goodwill amortization 3,667 3,316 14,800 12,673
Other operating (income) expense -- 10,138 (3,195) 10,138
- ----------------------------------------------------------------------------------------------------------------------------
185,550 189,671 716,400 667,988
- ----------------------------------------------------------------------------------------------------------------------------
Income from operations 44,021 26,465 153,443 120,494
Interest expense 6,207 6,011 24,387 25,914
Other income, net 85 30 1,371 1,331
- ----------------------------------------------------------------------------------------------------------------------------
Income before income taxes 37,899 20,484 130,427 95,911
Income tax expense 16,193 10,561 55,570 42,844
- ----------------------------------------------------------------------------------------------------------------------------
Net income $ 21,706 $ 9,923 $ 74,857 $ 53,067
- ----------------------------------------------------------------------------------------------------------------------------

Net income before nonroutine items (1) $ 21,706 $ 17,369 $ 72,193 $ 60,513
- ----------------------------------------------------------------------------------------------------------------------------

Earnings per share--basic and diluted $ .33 $ .15 $ 1.14 $ .81
- ----------------------------------------------------------------------------------------------------------------------------

Earnings per share--basic and diluted before nonroutine items (1) $ .33 $ .26 $ 1.10 $ .92
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) See `Other Operating (Income) Expense' in Notes to Quarterly Financial
Statements.
<PAGE>

Balance Sheets Boise Cascade Office Products Corporation
================================================================================

<TABLE>
<CAPTION>
(Unaudited)
December 31
---------------------------
1999 1998
------------- ------------
(expressed in thousands,
except share information)
<S> <C> <C>
Assets
Current
Cash and cash equivalents $ 25,038 $ 31,838
Receivables, less allowances of $9,112 and $9,539 449,753 394,013
Inventories 234,313 226,955
Deferred income tax benefits 17,121 14,335
Other 34,285 31,532
- ------------------------------------------------------------------------------------------------------
760,510 698,673
- ------------------------------------------------------------------------------------------------------

Property
Land 28,292 28,572
Buildings and improvements 155,798 143,192
Furniture and equipment 244,481 214,611
Accumulated depreciation (182,190) (149,071)
- ------------------------------------------------------------------------------------------------------
246,381 237,304
- ------------------------------------------------------------------------------------------------------
Goodwill, net of amortization $51,908 and $37,108 475,271 494,883
Other assets 54,155 30,885
- ------------------------------------------------------------------------------------------------------
Total assets $1,536,317 $1,461,745
- ------------------------------------------------------------------------------------------------------

Liabilities and Shareholders' Equity
Current
Notes payable $ 19,300 $ 72,100
Current portion of long-term debt 2,810 2,065
Accounts payable
Trade and other 328,412 279,928
Boise Cascade Corporation 35,608 29,297
- ------------------------------------------------------------------------------------------------------
364,020 309,225
- ------------------------------------------------------------------------------------------------------

Accrued liabilities
Compensation and benefits 47,256 38,144
Income taxes payable 16,910 796
Taxes, other than income 11,691 9,466
Other 71,454 36,861
- ------------------------------------------------------------------------------------------------------
147,311 85,267
- ------------------------------------------------------------------------------------------------------
533,441 468,657
- ------------------------------------------------------------------------------------------------------

Other
Long-term debt, less current portion 344,386 354,224
Other 25,384 75,950
- ------------------------------------------------------------------------------------------------------
369,770 430,174
- ------------------------------------------------------------------------------------------------------

Shareholders' equity
Common stock, $.01 par value, 200,000,000 shares authorized; 65,806,612
and 65,758,524 and shares issued and outstanding 658 658
Additional paid-in capital 359,643 359,224
Retained earnings 283,337 208,480
Accumulated other comprehensive income (10,532) (5,448)
- ------------------------------------------------------------------------------------------------------
Total shareholders' equity 633,106 562,914
- ------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $1,536,317 $1,461,745
- ------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

Statements of Cash Flows (Unaudited) Boise Cascade Office Products Corporation
================================================================================

Year Ended December 31
--------------------------
1999 1998
------------ ------------
(expressed in thousands)
<S> <C> <C>
Cash provided by (used for) operations
Net income $ 74,857 $ 53,067
Items in income not using (providing) cash
Depreciation and amortization 60,698 50,911
Deferred income taxes (6,544) (5,087)
Restructuring charge and writedown of assets (3,988) 7,981
Receivables (55,740) (30,398)
Inventories (3,909) (26,007)
Accounts payable and accrued liabilities 62,100 28,250
Current and deferred income taxes 4,635 896
Other, net 5,022 (6,243)
- -----------------------------------------------------------------------------
Cash provided by operations 137,131 73,370
- -----------------------------------------------------------------------------

Cash used for investment
Expenditures for property and equipment (47,628) (65,974)
Acquisitions (9,369) (27,282)
Other, net (25,580) (21,488)
- -----------------------------------------------------------------------------
Cash used for investment (82,577) (114,744)
- -----------------------------------------------------------------------------

Cash provided by (used for) financing
Additions to long-term debt 80,800 210,000
Payments of long-term debt (89,893) (214,385)
Notes payable (52,800) 48,800
Other, net 539 42
- -----------------------------------------------------------------------------
Cash provided by (used for) financing (61,354) 44,457
- -----------------------------------------------------------------------------

Increase (decrease) in cash and cash equivalents (6,800) 3,083
Balance at beginning of the period 31,838 28,755
- -----------------------------------------------------------------------------
Balance at December 31 $ 25,038 $ 31,838
- -----------------------------------------------------------------------------
</TABLE>
<PAGE>

Notes to Quarterly Financial Statements Boise Cascade Office Products
=====================================================================
Corporation
===========

Organization and Basis of Presentation. Boise Cascade Office Products
Corporation (together with its subsidiaries, the "Company" or "we")
headquartered in Itasca, Illinois, is one of the world's premier business-to-
business distributors of products for the office with operations in Australia,
Belgium, Canada, France, Spain, the United Kingdom, and the United States. At
December 31, 1999, Boise Cascade Corporation owned approximately 81% of our
outstanding common stock. These financial statements are unaudited statements
which do not include all Notes to Financial Statements and should be read in
conjunction with our 2000 Form 10-K. The 2000 Form 10K will be available in
March 2000.

Other Operating (Income) Expense. During the second quarter of 1999, we revised
the amount of a restructuring reserve that we established in the fourth quarter
of 1998 for our U.K. operations. The restructuring program was less costly than
originally anticipated. As a result, we recorded an increase to operating
income of approximately $4.0 million ($2.7 million, net of tax benefit or $.04
per share - diluted) in the second quarter of 1999. The increase to income
included a favorable adjustment to "Cost of sales" in the Statements of Income
of about $0.8 million, which resulted from a lower than expected inventory
write-down. The remaining $3.2 million of income is included in "Other
operating income" in the Statements of Income.

Earnings Per Share. Unaudited basic earnings per share for the three months and
year ended December 31, 1999 and 1998, were computed by dividing net income by
the weighted average number of shares of common stock outstanding during the
periods. Unaudited diluted earnings per share for the three months and year
ended December 31, 1999 and 1998, include the weighted average impact of stock
options assumed exercised using the treasury method.

Acquisitions. In January 1999, we acquired the office supply business of
Wallace Computer Services. In September 1999, we acquired the office supply
business of Supply West. The annual sales of these acquisitions were
approximately $50 million at the time of announcement. The results of
operations of acquired businesses are included in our operations subsequent to
the dates of acquisition.

Income Taxes. The tax provision rate for the twelve months ended December 31,
1999, was 42.7%, compared with a tax provision rate of 44.75% for the same
period in the prior year.

<PAGE>

EXHIBIT 21

BOISE CASCADE OFFICE PRODUCTS CORPORATION
SIGNIFICANT SUBSIDIARIES

<TABLE>
<CAPTION>
State or Other
Jurisdiction Percentage of
of Incorporation Voting Securities
or Organization Owned
---------------- -----------------
<S> <C> <C>
BCOP Nevada Company Nevada 100.0

Boise Marketing Services, Inc. Delaware 88.0

Grand & Toy Limited Ontario, Canada 100.0

Jean-Paul Guisset-JPG S.A. France 100.0

The Reliable Corporation Delaware 100.0

Reliable Deutschland GmbH Hamburg, Germany 100.0

Reliable France S.A. France 100.0

</TABLE>

<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BOISE
CASCADE OFFICE PRODUCTS CORPORATION'S BALANCE SHEET AT DECEMBER 31, 1999, AND
FROM ITS STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31, 1999, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 25,038
<SECURITIES> 0
<RECEIVABLES> 449,753
<ALLOWANCES> 9,112
<INVENTORY> 234,313
<CURRENT-ASSETS> 760,510
<PP&E> 428,571
<DEPRECIATION> (182,190)
<TOTAL-ASSETS> 1,536,317
<CURRENT-LIABILITIES> 533,441
<BONDS> 344,386
0
0
<COMMON> 658
<OTHER-SE> 632,448
<TOTAL-LIABILITY-AND-EQUITY> 1,536,317
<SALES> 3,381,725
<TOTAL-REVENUES> 3,381,725
<CGS> 2,511,882
<TOTAL-COSTS> 2,511,882
<OTHER-EXPENSES> 716,400
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 24,387
<INCOME-PRETAX> 130,427
<INCOME-TAX> 55,570
<INCOME-CONTINUING> 74,857
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 74,857
<EPS-BASIC> 1.14
<EPS-DILUTED> 1.14

</TABLE>