Boise Cascade Holdings Reports Second Quarter 2009 Financial Results



    


    
    BOISE, Idaho, Aug. 12 /CNW/ -- Boise Cascade Holdings, L.L.C. (BC
Holdings or Company) announced net income of $9.3 million for the quarter
ended June 30, 2009.  Included in its net income was $30.3 million of noncash
income associated with the Company's equity investment in Boise Inc.

    In second quarter 2009, BC Holdings' building products subsidiary, Boise
Cascade, L.L.C., reported negative earnings before interest, taxes,
depreciation, and amortization ("EBITDA") of $3.5 million, as compared to
negative EBITDA of $31.3 million in first quarter 2009.  In stark contrast to
the first quarter when the company used $86 million of cash, the Company's
cash and net debt position improved $15.0 million during the second quarter,
with the company reporting $282.3 million of available liquidity at June 30,
2009.  The individual segment results are discussed in more detail below.

    "Our operations made great strides this quarter on a number of fronts. 
In Building Materials Distribution, sales were up 29% from the first quarter;
gross margin dollars were up 52%; and working capital came down while the
operations continued to maintain high order fill rates.  Based on the volume
of product we sold relative to the overall decline in housing starts, it also
looks like we gained market share in a number of geographies.  Wood Products
also made good progress in reducing working capital, had a strong safety
performance, and made significant productivity gains.  Our dryer project in
Medford, Oregon, is on schedule and under budget.  We also successfully
completed a couple of small acquisitions to complement our existing
operations.  We continue to operate in a very difficult demand environment,
but our employees have responded to the challenges in a positive way and it
shows," commented Duane McDougall, Chairman and CEO of Boise Cascade.
    

    Second Quarter Segment Results
    
    U.S. housing starts declined 47% in the second quarter, dropping from an
annualized rate of 1.02 million in the second quarter 2008 to 0.54 million in
the second quarter 2009.  In the second quarter, continuing foreclosures,
elevated inventories of unsold homes, falling median home prices, rising
unemployment, and low consumer confidence contributed to a weak demand
environment for the building products we manufacture and distribute.

    Sales in our Building Materials Distribution ("BMD") business during the
second quarter were $433.7 million, compared with $335.0 million in first
quarter 2009 and $610.0 million in second quarter 2008.  Compared with second
quarter 2008, the 29% decline in sales resulted from a 23% decline in product
volumes sold and an 8% decrease in product prices.  EBITDA generated by BMD
improved significantly to $9.6 million in second quarter 2009 from the
negative $6.6 million of EBITDA in first quarter 2009.  BMD's second quarter
2008 EBITDA was $17.3 million.  The segment's lower sales activity compared to
the same quarter a year ago resulted in fewer gross margin dollars being
generated to cover cash operating costs, such as occupancy, payroll, and
delivery.  However, more than half of the decline in gross profit dollars
compared to second quarter 2008 was offset by lower operating costs and cost
reduction initiatives implemented over the last year.

    Sales in our Wood Products segment during the second quarter were $134.4
million, compared with $116.5 million in first quarter 2009 and $226.0 million
in second quarter 2008.  Compared with second quarter 2008, sales of
engineered wood products, plywood, particleboard, and lumber declined due to
lower volumes and prices.  Second quarter EBITDA for Wood Products was
negative $9.8 million, a sharp improvement from the negative $28.6 million of
EBITDA reported in first quarter 2009.  Wood Products reported $3.3 million of
positive EBITDA in second quarter 2008.  The decrease in Wood Products EBITDA
from the same quarter a year ago was driven primarily by pricing and volume
declines for plywood, offset in part by lower input costs and productivity
improvements.  We have been taking rolling curtailments at all of our Wood
Products operations to maintain appropriate inventory levels, while trying to
minimize the negative impact these curtailments have on our employees and our
operating results.
    

    Outlook
    
    We are planning on end product demand remaining weak when compared to
normal historical demand levels.  We believe single-family housing starts are
unlikely to show any significant rebound during 2009 absent a change in
unemployment trends, stronger levels of consumer confidence, and a reduction
in foreclosures and housing vacancy rates.  Industry product sales volumes are
likely to remain depressed and commodity wood product prices will largely
depend on operating rates.  We expect to manage our production levels to our
sales demand, which will likely cause us to operate our facilities well below
their capacity.
    

    About Boise Cascade
    
    BC Holdings is a privately held company headquartered in Boise, Idaho. 
Our wholly owned subsidiary, Boise Cascade, L.L.C., is a leading U.S.
wholesale distributor of building products and one of the largest producers of
engineered wood products and plywood in North America.  At June 30, 2009, we
also owned approximately 47.5% of Boise Inc., a publicly traded North American
paper and packaging producer listed on the New York Stock Exchange.  For more
information, please visit our website at www.bc.com.
    

    Webcast and Conference Call
    
    BC Holdings will host a webcast and conference call on Wednesday, August
12, at 11:00 a.m. Eastern, at which time we will review the company's recent
performance.  You can join the webcast through the Boise Cascade website.  Go
to www.bc.com and click on the link to the webcast under the News & Events
heading. Please go to the website at least 15 minutes before the start of the
webcast to register.  To join the conference call, dial 800-374-0165
(international callers should dial 706-902-1407) at least 10 minutes before
the start of the call.

    The archived webcast will be available in the News & Events section of
Boise Cascade's website.  A replay of the conference call will be available
from Wednesday, August 12, at 2:00 p.m. Eastern through Wednesday, August 19,
at 11:59 p.m. Eastern.  Playback numbers are 800-642-1687 for U.S. calls and
706-645-9291 for international calls, and the passcode will be 21332940.
    

    Basis of Presentation
    
    We present our consolidated financial statements in accordance with U.S.
generally accepted accounting principles (GAAP).  Our earnings release also
supplements the GAAP presentations by reflecting EBITDA.  EBITDA represents
income (loss) before interest (interest expense, interest income, and change
in fair value of interest rate swaps), income taxes, and depreciation,
amortization, and depletion.  EBITDA is the primary measure used by our chief
operating decision makers to evaluate segment operating performance and to
decide how to allocate resources to segments.  We believe EBITDA is useful to
investors because it provides a means to evaluate the operating performance of
our segments and our company on an ongoing basis using criteria that are used
by our internal decision makers and because it is frequently used by investors
and other interested parties in the evaluation of companies.  We believe
EBITDA is a meaningful measure because it presents a transparent view of our
recurring operating performance and allows management to readily view
operating trends, perform analytical comparisons, and identify strategies to
improve operating performance.  For example, we believe that the inclusion of
items such as taxes, interest expense, and interest income distorts
management's ability to assess and view the core operating trends in our
segments.  EBITDA, however, is not a measure of our liquidity or financial
performance under GAAP and should not be considered as an alternative to net
income (loss), income (loss) from operations, or any other performance measure
derived in accordance with GAAP or as an alternative to cash flow from
operating activities as a measure of our liquidity.  The use of EBITDA instead
of net income (loss) or segment income (loss) has limitations as an analytical
tool, including the inability to determine profitability; the exclusion of
interest expense, interest income, change in the fair value of interest rate
swaps, and associated significant cash requirements; and the exclusion of
depreciation, amortization, and depletion.  Management compensates for these
limitations by relying on our GAAP results.  Our measures of EBITDA are not
necessarily comparable to other similarly titled captions of other companies
due to potential inconsistencies in the methods of calculation.
    

    Forward-Looking Statements
    
    This news release contains statements that are "forward looking" within
the Private Securities Litigation Reform Act of 1995.  These statements speak
only as of the date of this press release.  While they are based on the
current expectations and beliefs of management, they are subject to a number
of uncertainties and assumptions that could cause actual results to differ
from the expectations expressed in this release.
    



    

    
                         Boise Cascade Holdings, L.L.C.
                     Consolidated Statements of Income (Loss)
                           (unaudited, in thousands)
    

    
                                              Three Months Ended
                                     ---------------------------------------
                                              June 30              March 31,
                                     ------------------------
                                     2009                2008         2009
                                     ----                ----         ----
    Sales
    Trade                        $512,247            $743,402     $407,724
    Related parties                 8,933              13,786        5,703
                                    -----              ------        -----
                                  521,180             757,188      413,427
                                  -------             -------      -------
    Costs and expenses
    Materials, labor, and other
     operating expenses (a)       463,699             649,886      381,071
    Materials, labor, and other
     operating expenses
     from related parties           6,332              23,009       12,290
    Depreciation, amortization,
     and depletion (a)             11,448               8,684       11,119
    Selling and distribution
     expenses                      47,771              57,600       45,241
    General and administrative
     expenses                       6,863               7,859        6,925
    General and administrative
     expenses from related party    2,503               2,526        2,433
    Loss on sale of Paper and
     Packaging & Newsprint
     assets (b)                         -               3,328            -
    Other (income) expense,
     net (a) (c)                   (1,751)              8,635        2,681
                                   ------               -----        -----
                                  536,865             761,527      461,760
                                  -------             -------      -------
    

    
    Loss from operations          (15,685)             (4,339)     (48,333)
                                  -------              ------      -------
    

    
    Equity in income (loss) of
     affiliate                     30,306              (8,845)       3,005
    Impairment of investment in
     equity affiliate (d)               -                   -      (43,039)
    Foreign exchange gain (loss)      715                 890         (332)
    Change in fair value of
     contingent value rights            -                 743          194
    Gain on repurchase of
     long-term debt (e)                 -                   -        6,026
    Interest expense               (6,135)             (6,427)      (5,616)
    Interest income                   178               2,559          397
                                      ---               -----          ---
                                   25,064             (11,080)     (39,365)
                                   ------             -------      -------
    

    
    Income (loss) before income
     taxes                          9,379             (15,419)     (87,698)
    Income tax (provision)
     benefit                          (68)                 23         (483)
                                      ---                 ---         ----
    Net income (loss)              $9,311            $(15,396)    $(88,181)
                                   ======            ========     ========


    

    
                                 Segment Information
                              (unaudited, in thousands)
    

    
                                                     Three Months Ended
                                            ----------------------------------
                                                 June 30             March 31,
                                            ------------------
                                            2009          2008           2009
                                            ----          ----           ----
    Segment sales
    Building Materials Distribution     $433,662      $609,978       $335,022
    Wood Products                        134,404       226,026        116,479
    Intersegment eliminations and other  (46,886)      (78,816)       (38,074)
                                         -------       -------        -------
                                        $521,180      $757,188       $413,427
                                        ========      ========       ========
    

    
    Segment income (loss)
    Building Materials Distribution       $7,647       $15,330        $(8,544)
    Wood Products (a)                    (19,206)       (3,381)       (37,631)
    Corporate and Other (c)               (3,411)      (15,398)        (2,490)
                                          ------       -------         ------
                                         (14,970)       (3,449)       (48,665)
                                         -------        ------        -------
    

    
    Equity in net income (loss) of
     affiliate                            30,306        (8,845)         3,005
    Impairment of investment in equity
     affiliate (d)                             -             -        (43,039)
    Change in fair value of contingent
     value rights                              -           743            194
    Gain on repurchase of long-term
     debt (e)                                  -             -          6,026
    Interest expense                      (6,135)       (6,427)        (5,616)
    Interest income                          178         2,559            397
                                             ---         -----            ---
    Income (loss) before income taxes     $9,379      $(15,419)      $(87,698)
                                          ======      ========       ========
    

    
    EBITDA (h)
    Building Materials Distribution       $9,560       $17,269        $(6,611)
    Wood Products (a)                     (9,785)        3,281        (28,559)
    Corporate and Other (c)               (3,297)      (15,315)        (2,376)
    Equity in net income (loss) of
     affiliate                            30,306        (8,845)         3,005
    Impairment of investment in equity
     affiliate (d)                             -             -        (43,039)
    Change in fair value of contingent
     value rights                              -           743            194
    Gain on repurchase of long-term
     debt (e)                                  -             -          6,026
                                             ---           ---          -----
                                         $26,784       $(2,867)      $(71,360)
                                         =======       =======       ========


    

    
                         Boise Cascade Holdings, L.L.C.
                        Consolidated Statements of Loss
                           (unaudited, in thousands)
    

    
                                                          Six Months Ended
                                                              June 30
                                                          -----------------
                                                          2009     2008 (g)
                                                          ----     -------
    Sales
    Trade                                             $919,971     $1,624,202
    Related parties                                     14,636        109,568
                                                        ------        -------
                                                       934,607      1,733,770
                                                       -------      ---------
    Costs and expenses
    Materials, labor, and other operating
     expenses (a)                                      844,770      1,530,544
    Materials, labor, and other operating
     expenses from related parties                      18,622         29,189
    Depreciation, amortization, and depletion (a)       22,567         18,719
    Selling and distribution expenses                   93,012        120,965
    General and administrative expenses                 13,788         22,511
    General and administrative expenses from
     related party                                       4,936          3,504
    Gain on sale of Paper and Packaging &
     Newsprint assets (b)                                    -         (4,735)
    Other (income) expense, net (a) (c)                    930          7,693
                                                           ---          -----
                                                       998,625      1,728,390
                                                       -------      ---------
    

    
    Income (loss) from operations                      (64,018)         5,380
                                                       -------          -----
    

    
    Equity in net income (loss) of affiliate            33,311        (17,397)
    Impairment of investment in equity affiliate (d)   (43,039)             -
    Foreign exchange gain                                  383            277
    Change in fair value of contingent value rights        194         (4,030)
    Change in fair value of interest rate swaps (f)          -         (6,284)
    Gain on repurchase of long-term debt (e)             6,026              -
    Interest expense                                   (11,751)       (21,808)
    Interest income                                        575          5,160
                                                           ---          -----
                                                       (14,301)       (44,082)
                                                       -------        -------
    

    
    Loss before income taxes                           (78,319)       (38,702)
    Income tax provision                                  (551)        (1,132)
                                                          ----         ------
    Net loss                                          $(78,870)      $(39,834)
                                                      ========       ========


    

    
                             Segment Information
                          (unaudited, in thousands)
    

    
                                                Six Months Ended
                                                     June 30
                                                 ----------------
                                                 2009     2008 (g)
                                                 ----     -------
    Segment sales
    Building Materials Distribution          $768,684     $1,113,862
    Wood Products                             250,883        424,760
    Paper                                           -        253,508
    Packaging & Newsprint                           -        113,485
    Intersegment eliminations and other       (84,960)      (171,845)
                                              -------       --------
                                             $934,607     $1,733,770
                                             ========     ==========
    

    
    Segment income (loss)
    Building Materials Distribution             $(897)       $14,121
    Wood Products (a)                         (56,837)       (20,481)
    Paper                                           -         20,718
    Packaging & Newsprint                           -          5,685
    Corporate and Other (c)                    (5,901)       (14,386)
                                               ------        -------
                                              (63,635)         5,657
                                              -------          -----
    

    
    Equity in net income (loss) of
     affiliate                                 33,311        (17,397)
    Impairment of investment in equity
     affiliate (d)                            (43,039)             -
    Change in fair value of contingent
     value rights                                 194         (4,030)
    Change in fair value of interest
     rate swaps (f)                                 -         (6,284)
    Gain on repurchase of long-term
     debt (e)                                   6,026              -
    Interest expense                          (11,751)       (21,808)
    Interest income                               575          5,160
                                                  ---          -----
    Loss before income taxes                 $(78,319)      $(38,702)
                                             ========       ========
    

    
    EBITDA (h)
    Building Materials Distribution            $2,949        $17,983
    Wood Products                             (38,344)        (6,285)
    Paper                                           -         21,066
    Packaging & Newsprint                           -          5,738
    Corporate and Other                        (5,673)       (14,126)
    Equity in net income (loss) of
     affiliate                                 33,311        (17,397)
    Impairment of investment in equity
     affiliate (d)                            (43,039)             -
    Change in fair value of contingent
     value rights                                 194         (4,030)
    Gain on repurchase of long-term
     debt (e)                                   6,026              -
                                                -----            ---
                                             $(44,576)        $2,949
                                             ========         ======


    

    
                        Boise Cascade Holdings, L.L.C.
                         Consolidated Balance Sheets
                          (unaudited, in thousands)
                                                June 30,      December 31,
                                                   2009          2008
                                                   ----          ----
    ASSETS
    

    
    Current
    Cash and cash equivalents                    $204,590      $275,803
    Receivables
       Trade, less allowances of $2,002
        and $1,843                                133,715        78,393
       Related parties                              2,075         3,112
       Other                                        2,286         5,907
    Inventories                                   239,957       279,023
    Prepaid expenses and other                      6,062         1,296
                                                    -----         -----
                                                  588,685       643,534
                                                  -------       -------
    Property
    Property and equipment, net                   279,371       291,999
    Timber deposits                                 7,827         8,632
                                                    -----         -----
                                                  287,198       300,631
                                                  -------       -------
    

    
    Investment in equity affiliate                 53,156        20,985
    Deferred financing costs                        6,391         7,862
    Goodwill                                       12,170        12,170
    Intangible assets, net                          9,063         9,248
    Other assets                                    8,621         6,009
                                                    -----         -----
    Total assets                                 $965,284    $1,000,439
                                                 ========    ==========


    

    
                         Boise Cascade Holdings, L.L.C.
                     Consolidated Balance Sheets (continued)
                (unaudited, in thousands, except for equity units)
    

    
                                                      June 30,   December 31,
                                                        2009         2008
                                                        ----         ----
    LIABILITIES AND CAPITAL
    

    
    Current
    Accounts payable
       Trade                                            $118,678      $69,478
       Related parties                                     2,792        2,195
    Accrued liabilities
       Compensation and benefits                          30,349       38,228
       Interest payable                                    3,632        3,930
       Other                                              16,410       30,893
                                                          ------       ------
                                                         171,861      144,724
                                                         -------      -------
    Debt
    Long-term debt                                       303,146      315,000
                                                         -------      -------
    

    
    Other
    Compensation and benefits                            123,885      172,275
    Other long-term liabilities                           12,584       12,125
                                                          ------       ------
                                                         136,469      184,400
                                                         -------      -------
    Redeemable equity units
    Series B equity units - 2,764,854 units and
     2,920,574 units outstanding                           2,765        2,920
    Series C equity units - 19,171,470 units and
     11,016,668 units outstanding                          3,958        3,037
                                                           -----        -----
                                                           6,723        5,957
                                                           -----        -----
    Commitments and contingent liabilities
    

    
    Capital
    Series A equity units - no par value; 66,000,000
     units authorized and outstanding                     85,462       81,967
    Series B equity units - no par value; 550,000,000
     units authorized and 532,558,673 units
     and 532,414,853 units outstanding                   261,623      268,391
    Series C equity units - no par value; 44,000,000
     units authorized and 11,951,751 units
     and 11,183,000 units outstanding                          -            -
                                                             ---          ---
    Total capital                                        347,085      350,358
                                                         -------      -------
    Total liabilities and capital                       $965,284   $1,000,439
                                                        ========   ==========

    

    
                        Boise Cascade Holdings, L.L.C.
                     Consolidated Statements of Cash Flows
                          (unaudited, in thousands)
    

    
                                                        Six Months Ended
                                                            June 30
                                                        ------------------
                                                        2009          2008
                                                        ----          ----
    Cash provided by (used for) operations
    Net loss                                        $(78,870)     $(39,834)
    Items in net loss not using (providing) cash
       Equity in net (income) loss of affiliate      (33,311)       17,397
       Impairment of investment in equity affiliate   43,039             -
       Depreciation, depletion, and amortization
        of deferred financing costs and other         23,836        19,456
       Related-party interest income                       -        (2,760)
       Pension and other postretirement benefit
        expense                                        7,473         7,787
       Change in fair value of contingent value
        rights                                          (194)        4,030
       Change in fair value of interest rate swaps         -         6,284
       Management equity units expense, excluding
        expense related to the Sale                    1,496         1,086
       Gain on repurchase of long-term debt           (6,026)            -
       Gain on sale of assets, net                      (248)       (8,399)
       Facility closure and curtailment costs          1,968             -
       Loss on sale of note receivable from
        related party                                      -         8,313
       Other                                            (584)         (257)
    Decrease (increase) in working capital, net of
     acquisitions and dispositions
       Receivables                                   (52,812)      (80,234)
       Inventories                                    39,903        34,555
       Prepaid expenses and other                     (3,281)       (2,324)
       Accounts payable and accrued liabilities       41,366        17,137
    Pension and other postretirement benefit
     payments                                        (25,088)      (20,775)
    Current and deferred income taxes                    (21)       (1,129)
    Other                                             (2,573)          303
                                                      ------           ---
       Cash used for operations                      (43,927)      (39,364)
                                                     -------       -------
    Cash provided by (used for) investment
    Proceeds from sale of assets, net of cash
     contributed                                         242     1,226,698
    Proceeds from sale of note receivable from
     related party                                         -        52,781
    Expenditures for property and equipment           (8,102)      (27,869)
    Acquisition of businesses and facilities          (4,598)            -
    Increase in restricted cash                            -      (183,290)
    Decrease in restricted cash                            -       183,290
    Other                                              1,536          (742)
                                                       -----          ----
       Cash provided by (used for) investment        (10,922)    1,250,868
                                                     -------     ---------
    Cash provided by (used for) financing
    Issuances of long-term debt                       60,000       240,000
    Payments of long-term debt                       (65,627)   (1,085,563)
    Short-term borrowings                                  -       (10,500)
    Tax distributions to members                     (10,719)     (127,884)
    Repurchase of management equity units                (18)      (28,398)
    Cash paid for termination of interest
     rate swaps                                            -       (11,918)
    Other                                                  -        (4,185)
                                                         ---        ------
       Cash used for financing                       (16,364)   (1,028,448)
                                                     -------    ----------
    Increase (decrease) in cash and cash
     equivalents                                     (71,213)      183,056
    Balance at beginning of the period               275,803        57,623
                                                     -------        ------
    Balance at end of the period                    $204,590      $240,679
                                                    ========      ========

    Summary Notes to Consolidated Financial Statements and Segment Information

    
    The Consolidated Statements of Income (Loss), Consolidated Balance
Sheets, Consolidated Statements of Cash Flows, and Segment Information do not
include all Notes to Consolidated Financial Statements and should be read in
conjunction with the company's 2008 Annual Report on Form 10-K and the
company's Quarterly Report on Form 10Q for the period ended June 30, 2009. 
Net income (loss) for all periods presented involved estimates and accruals.



    
    (a)  In the first half of 2009, we closed the lumber manufacturing
         facility in La Grande, Oregon.  In connection with the closure, we
         recorded $1.7 million and $9.2 million of expense during the three
         and six months ended June 30, 2009, and $7.5 million of expense
         during the three months ended March 31, 2009, as follows:
    


    
                                      Three Months Ended
                                    ----------------------
                                    June 30     March 31      Six Months Ended
                                    -------     --------
                                            2009               June 30, 2009
                                    ----------------------    -------------
                                               (unaudited, in thousands)
    

    
    Materials, labor, and other
     operating expenses                   $-        $600              $600
    Depreciation, amortization, and
     depletion                         2,626       2,552             5,177
    Other (income) expense, net         (931)      4,352             3,422
                                        ----       -----             -----
                                      $1,695      $7,504            $9,199
                                      ======      ======            ======
    


    
    (b)  In connection with the sale of our Paper and Packaging & Newsprint
         assets, and most of our Corporate and Other assets (the Sale), to
         Boise Inc. (formerly Aldabra 2 Acquisition Corp.), we recorded $3.3
         million of expense and $4.7 million of income in "Gain (loss) on sale
         of Paper and Packaging & Newsprint assets" in the Corporate and Other
         segment in our Consolidated Statements of Loss during the three and
         six months ended June 30, 2008.  For more information related to the
         Sale, see the Notes to Consolidated Financial Statements in our Form
         10-K for the year ended December 31, 2008.
    

    
    (c)  In June 2008, we sold the promissory note from Boise Inc. for $52.8
         million, after selling expenses, and we recorded an $8.3 million loss
         on the sale in "Other (income) expense, net" in the Corporate and
         Other segment in our Consolidated Statements of Loss for the three
         and six months ended June 30, 2008.
    

    
    (d)  On March 31, 2009, we concluded that our investment in Boise Inc.
         met the definition of other than temporarily impaired as defined in
         APB Opinion No. 18, The Equity Method of Accounting for Investments
         in Common Stock.  Accordingly, we recorded a $43.0 million charge in
         "Impairment of investment in equity affiliate" in our Consolidated
         Statements of Loss for the three months ended March 31, 2009, and six
         months ended June 30, 2009.  For more information, see the Notes to
         Unaudited Quarterly Consolidated Financial Statements in our Form
         10-Q for the period ended June 30, 2009.
    

    
    (e)  For both the six months ended June 30, 2009, and the three months
         ended March 31, 2009, we recorded a $6.0 million net gain on the
         repurchase of $11.9 million of senior subordinated notes.
    

    
    (f)  The six months ended June 30, 2008, included $6.3 million of expense
         related to changes in the fair value of our interest rate swaps,
         which were terminated in February 2008.
    

    
    (g)  The equity interest that we own in Boise Inc. represents a
         significant continuing involvement as defined in Statement of
         Financial Accounting Standards No. 144, Accounting for the
         Impairment or Disposal of Long-lived Assets.  As a result, the
         Paper and Packaging & Newsprint segment results are included in
         continuing operations through February 21, 2008.
    

    
    (h)  EBITDA represents income (loss) before interest (interest expense,
         interest income, and change in fair value of interest rate swaps),
         income taxes, and depreciation, amortization, and depletion.  The
         following table reconciles BC Holdings, L.L.C., net income (loss)
         to BC Holdings, L.L.C., EBITDA and Boise Cascade, L.L.C., EBITDA
         for the three months ended June 30, 2009 and 2008, and March
         31, 2009:


    

    
                                                     Three Months Ended
                                            --------------------------------
                                                 June 30             March 31,
                                            ------------------
                                            2009          2008          2009
                                            ----          ----          ----
                                                 (unaudited, in thousands)
    BC Holdings, L.L.C., net
     income (loss)                        $9,311      $(15,396)     $(88,181)
    Interest expense                       6,135         6,427         5,616
    Interest income                         (178)       (2,559)         (397)
    Income tax provision (benefit)            68           (23)          483
    Depreciation, amortization, and
     depletion                            11,448         8,684        11,119
                                          ------         -----        ------
    BC Holdings, L.L.C., EBITDA           26,784        (2,867)      (71,360)
                                          ------        ------       -------
    Loss on sale of note receivable from
     related party                             -         8,313             -
    Equity in net (income) loss of
     affiliate                           (30,306)        8,845        (3,005)
    Impairment of investment in equity
     affiliate                                 -             -        43,039
                                             ---           ---        ------
    Boise Cascade, L.L.C., EBITDA        $(3,522)      $14,291      $(31,326)
                                         =======       =======      ========

    

    
    The following table reconciles BC Holdings, L.L.C., net loss to BC
    Holdings, L.L.C., EBITDA and Boise Cascade, L.L.C., EBITDA for the six
    months ended June 30, 2009 and 2008:
    

    
                                                    Six Months Ended
                                                        June 30
                                                        -------
                                                    2009          2008
                                                    ----          ----
                                               (unaudited, in thousands)
    

    
    BC Holdings, L.L.C., net loss               $(78,870)     $(39,834)
    Change in fair value of interest
     rate swaps                                        -         6,284
    Interest expense                              11,751        21,808
    Interest income                                 (575)       (5,160)
    Income tax provision                             551         1,132
    Depreciation, amortization, and
     depletion                                    22,567        18,719
                                                  ------        ------
    BC Holdings, L.L.C., EBITDA                  (44,576)        2,949
                                                 -------         -----
    Loss on sale of note receivable from
     related party                                     -         8,313
    Equity in net (income) loss of
     affiliate                                   (33,311)       17,397
    Impairment of investment in equity
     affiliate                                    43,039             -
                                                  ------           ---
    Boise Cascade, L.L.C., EBITDA               $(34,848)      $28,659
                                                ========       =======






    




For further information:

For further information: Investors, Wayne Rancourt of Boise Cascade,
+1-208-384-6073 Web Site: http://www.bc.com

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BOISE CASCADE HOLDINGS, L.L.C.

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