October 24, 2012

Uncoated Freesheet Production at St. Helens Mill Ends

“This is a difficult but necessary decision to focus our efforts and resources on the products and machines elsewhere in our system that drive the financial performance and cash flow of our paper operations,” said Alexander Toeldte, president and CEO of Boise. “Despite the dedication and hard work of our employees, we have concluded the machine cannot compete in the marketplace over the long-term. We thank all of our employees, customers, suppliers, and the community who have supported this operation over so many years. We will work closely with our customers and suppliers to ensure a smooth transition.”

The company expects to stop production on the machine by Dec. 31, 2012. Eligible salaried employees will be offered severance packages and outplacement assistance. Negotiations will be scheduled with the Association of Western Pulp and Paper Workers Union (AWPPW) Local 1 to determine the effect for union employees.

In third quarter 2012, we recognized approximately $31 million of pretax costs related to ceasing operations at the mill. This includes approximately $7 million of employee-related and other costs, most of which we expect to pay in early 2013; approximately $10 million of cash costs for future site remediation, which the company expects to pay out over a longer term; and approximately $14 million in noncash charges related primarily to the impairment of property, plant, and equipment.

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