EX-99.1 2 bz033113exhibit991.htm BOISE INC. NEWS RELEASE DATED MAY 2, 2013 BZ 03.31.13 Exhibit 99.1


Exhibit 99.1
Boise Inc.
Investor Relations
1111 West Jefferson PO Box 990050 Boise, ID 83799-0050
T 208 384 7141 F 208 395 7400
News Release
For Immediate Release: May 2, 2013
 
 
Media Contact
Investor Relations Contact
Virginia Aulin - 208 384 7837
Greg Jones - 208 384 7141
 
 
Boise Inc. Reports Financial Results for First Quarter 2013 and Announces an Investment at DeRidder and Changes at International Falls
BOISE, Idaho - Boise Inc. (NYSE: BZ) today reported a net loss of $(1.2) million, or $(0.01) per diluted share, for first quarter 2013, compared with net income of $21.3 million, or $0.21 per diluted share, for the same period in 2012. EBITDA(1) was $56.2 million for first quarter 2013, compared with $87.4 million for first quarter 2012. The pre-tax maintenance cold outage costs at our mill in DeRidder, Louisiana, which occur once every five years, reduced our first quarter results by $22.4 million. In addition, incremental depreciation expense related to shortening the useful lives of some of our assets, primarily at our mill in International Falls, Minnesota, reduced our results by $5.3 million.
 
 
 
 
Financial Highlights
 
 
(in millions, except per-share data)
 
 
 
 
 
 
 
 
 
 
 
1Q 2013
 
1Q 2012
 
4Q 2012
 
 
Sales
$
607.0

 
$
644.8

 
$
627.5

 
 
Net income (loss)
$
(1.2
)
 
$
21.3

 
$
13.5

 
 
Net income (loss) per diluted share
$
(0.01
)
 
$
0.21

 
$
0.13

 
 
Net income excluding special items (1)
$
2.0

 
$
21.3

 
$
13.8

 
 
Net income per diluted share excluding special items (1)
$
0.02

 
$
0.21

 
$
0.14

 
 
Weighted average diluted shares outstanding (1)
100.2

 
101.4

 
101.2

 
 
EBITDA (1)
$
56.2

 
$
87.4

 
$
78.3

 
 
EBITDA excluding special items (1)
$
56.2

 
$
87.4

 
$
78.7

 
 
(1) For reconciliations of non-GAAP measures, see "Summary Notes to Consolidated Financial Statements and Segment Information."
 
 
 
 

"We completed the DeRidder outage safely and on budget. Nevertheless, our first quarter results fell short of our expectations," said Alexander Toeldte, president and chief executive officer. “We experienced unfavorable mix changes in our Packaging segment that partially offset the benefits of the fall 2012 linerboard price increase. In addition, decreasing prices for uncoated freesheet negatively affected our results in Paper.”

“In pursuit of our long-term strategic objectives, we are pleased to announce our decision to invest between $110 and $120 million in the conversion of our idled newsprint machine at DeRidder to produce lightweight linerboard and corrugating medium. We will also install an OCC pulping facility at the mill as part of the project. The investment adds approximately 270,000 tons of lightweight containerboard capacity to our system and allows us to optimize the product mix on our current linerboard machine, increasing the mill's overall containerboard output by approximately 300,000 tons. We are targeting a mid-2014 start-up for the completed project, which we expect will create about 50 jobs.”

“To improve the cost competitiveness of our Paper business, where we operate against the background of secularly declining demand for our products, we have made the difficult decision to close two paper machines and an off-machine coater at our International Falls mill. These closures, which we expect to occur no later than

1


fourth quarter 2013, will reduce our annual uncoated freesheet capacity by approximately 115,000 tons, or 9%, and allow us to focus our efforts on key products and machines that drive our profitability, improve our cash flow, and enhance the overall competitiveness of our International Falls mill and our Paper business. This decision will result in the loss of approximately 300 jobs. We understand the impact this decision has on our dedicated employees, as well as the community of International Falls. We appreciate their efforts and support over the years.”
 
Packaging Segment

Packaging segment sales for first quarter 2013 were $287.0 million, an increase of $14.8 million, or 5%, compared with first quarter 2012. The increase was related primarily to 5% sales volume growth in our network of box plants and the benefit from implementation of the 2012 fall linerboard price increase, offset partially by unfavorable mix changes in our corrugated products and decreases in sales prices and volumes of newsprint. Prices for our corrugated containers and sheets increased $2 per msf or 3% in first quarter 2013, compared with first quarter 2012. Unfavorable mix changes in our corrugated products include the effect of lower prices due to competitive pressures in some of the markets we serve.

Packaging segment EBITDA was $17.2 million for first quarter 2013, a decrease compared with $37.9 million for the same period last year. The decrease resulted from maintenance cold outage costs at DeRidder of approximately $22.4 million in first quarter 2013, compared with $1.8 million of outage costs in the prior-year quarter. These costs include both maintenance costs and lost sales volume resulting from the downtime. The benefit from the implementation of the 2012 fall linerboard price increase was offset partially by unfavorable mix changes in our corrugated products, higher medium costs, and decreases in sales prices and volumes of newsprint. We expect the combination of announced price increases, business improvements, and lower maintenance outage costs to improve our results for the rest of the year.

Paper Segment

Lower uncoated freesheet net sales prices affected our first quarter 2013 sales, compared with first quarter and fourth quarter 2012. Paper segment sales for first quarter 2013 were $332.7 million, a decrease of $49.7 million, or 13%, compared with first quarter 2012. Our average net sales price for uncoated freesheet declined from $976 per short ton in first quarter 2012 to $929 in first quarter 2013, or 5%. Total uncoated freesheet sales volumes decreased 8% versus the prior-year period, and 1% compared with fourth quarter 2012. Sales volumes and prices in first quarter were also lower due to our decision to cease paper production at our St. Helens, Oregon, mill in 2012, which represented approximately 5% of our annual paper capacity. Excluding St. Helens, our volumes declined 5% and our prices declined $43 per short ton, or 4%.
In first quarter 2013, Paper segment EBITDA was $45.6 million, a decrease of $9.5 million, or 17% compared with first quarter 2012. The decrease was due primarily to lower net sales prices of uncoated freesheet papers.
Webcast and Conference Call
Boise Inc. will host a webcast and conference call on Thursday, May 2, 2013, at 11:00 a.m. ET, at which time we will review the company's recent performance and long-term strategic objectives. To participate in the conference call, dial 866-841-1001 (international callers should dial 832-445-1689). The webcast may be accessed through Boise's Internet site and will be archived for four weeks following the call. Go to www.BoiseInc.com and click on About Boise Inc. to reach the link to the webcast under Webcasts & Presentations on the Investors menu.
A replay of the conference call will be available in Webcasts & Presentations from May 2, 2013, at 2:00 p.m. ET through June 2, 2012, at 11:45 p.m. ET. Playback numbers are 855-859-2056 for U.S. callers and 404-537-3406 for international callers. The passcode is 33461765.
About Boise Inc.
Headquartered in Boise, Idaho, Boise Inc. (NYSE: BZ) manufactures a wide variety of packaging and paper products. Boise's range of packaging products includes linerboard and corrugating medium, corrugated containers and sheets, and protective packaging products. Boise's paper products include imaging papers for the office and home, printing and converting papers, and papers used in packaging, such as label and release papers. Our

2


employees are committed to delivering excellent value while managing our businesses to sustain environmental resources for future generations. Visit our website at www.BoiseInc.com.
Forward-Looking Statements
This news release contains statements that are “forward looking,” as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate, or imply future results, performance, or achievements. Statements regarding announced price increases on our products, asset configuration changes, and the benefits we expect to derive from such outcomes and actions are forward looking. Given the risks and uncertainties involved, there can be no assurance we will be able to achieve our stated goals or realize any benefits. For example, changes in the economy and competitive influences may result in our being unable to implement or realize any additional benefit from our announced price increases. Economic and competitive influences, availability of equipment and suppliers, the performance of the equipment once installed, order pattern, customer service requirements, machine product loading, timing of cost reductions, and other factors could cause the outcome of our asset configuration projects, the related costs, the effect on our labor pool, and the timing to differ materially from what we have predicted in this release. For further information about the risks and uncertainties associated with our business, please refer to our filings with the Securities and Exchange Commission. We undertake no obligation to update the forward-looking statements in this release whether as a result of new information, future events, or otherwise.


3


Boise Inc.
Segment Highlights
(unaudited, dollars in millions)
 
 
Three Months Ended
 
 
March 31
 
December 31,
 
 
2013
 
2012
 
2012
Packaging
 
 
 
 
 
Sales volumes (thousands of short tons, except corrugated)
 
 
 
 
 
 
Linerboard, Total
138.9

 
152.6

 
156.8

 
Linerboard, External sales
36.8

 
53.0

 
31.2

 
Newsprint
53.8

 
54.8

 
60.3

 
Corrugated containers and sheets (mmsf)
2,552

 
2,433

 
2,578

 
Key input costs
 
 
 
 
 
 
   Fiber, including purchased rollstock (a)
$
74.2

 
$
65.4

 
$
57.4

 
   Energy
16.3

 
15.0

 
16.4

 
   Chemicals
10.9

 
10.2

 
10.9

 
Outage costs
22.4

 
1.8

 
(0.3
)
EBITDA and EBITDA excluding special items (b)
17.2

 
37.9

 
47.1

Assets
959.7

 
932.0

 
958.0

Paper
 
 
 
 
 
Sales volumes (thousands of short tons)
 
 
 
 
 
 
Uncoated freesheet (c)
298.8

 
325.1

 
302.4

 
Corrugating medium
33.2

 
32.5

 
34.9

 
Market pulp, External sales
1.3

 
8.5

 
15.6

 
Key input costs
 
 
 
 
 
 
   Fiber
$
69.5

 
$
84.9

 
$
66.4

 
   Energy
34.4

 
35.0

 
34.2

 
   Chemicals
50.8

 
53.3

 
49.6

 
Outage costs
0.4

 
—

 
4.6

EBITDA (b)
45.6

 
55.2

 
38.2

EBITDA excluding special items (b)
45.6

 
55.2

 
38.7

Assets
1,142.6

 
1,207.6

 
1,144.7

 
 
1Q 2013 vs. 1Q 2012
 
1Q 2013 vs. 4Q 2012
Packaging
 
 
 
Change in net sales prices (dollars per short ton, except corrugated) (d)
 
 
 
 
Linerboard, Total
$
56

 
$
3

 
Linerboard, External sales
66

 
12

 
Newsprint
(17
)
 
(17
)
 
Corrugated containers and sheets ($/msf)
2

 
1

Paper
 
 
 
Change in net sales prices (dollars per short ton) (d)
 
 
 
 
Uncoated freesheet (c)
$
(47
)
 
$
(19
)
 
Corrugating medium
79

 
(1
)
 
Market pulp, External sales
(14
)
 
20

____________
(a) Includes purchases of corrugating medium from our Paper segment, which are eliminated in consolidation.
(b) For reconciliations of non-GAAP measures, see "Summary Notes to Consolidated Financial Statements and Segment Information."
(c) Includes cut-size office papers, printing and converting papers, and label and release papers. Excluding St. Helens, our uncoated freesheet sales volumes were 309.5 thousand short tons and 287.9 thousand short tons, respectively, for the three months ended March 31, 2012, and December 31, 2012. Excluding St. Helens, the change in our net sales price of uncoated freesheet was ($43) per short ton and ($12) per short ton, respectively, when comparing the three months ended March 31, 2013, with the three months ended March 31, 2012, and December 31, 2012.
(d) Average net selling prices for our principal products represent sales less freight costs, discounts, and allowances.

4


Boise Inc.
Consolidated Statements of Operations
(unaudited, dollars and shares in thousands, except per-share data)
 
 
Three Months Ended
 
March 31
 
December 31,
 
2013
 
2012
 
2012
Sales
 
 
 
 
 
Trade
$
591,321

 
$
633,528

 
$
611,925

Related party
15,697

 
11,318

 
15,567

 
607,018

 
644,846

 
627,492

 
 
 
 
 
 
Costs and expenses
 
 
 
 
 
Materials, labor, and other operating expenses (excluding depreciation)
496,269

 
502,299

 
491,554

Fiber costs from related party
6,146

 
4,946

 
5,094

Depreciation, amortization, and depletion (1)
43,428

 
37,556

 
39,907

Selling and distribution expenses
28,849

 
30,642

 
30,602

General and administrative expenses
18,923

 
20,008

 
20,492

Other (income) expense, net
331

 
(300
)
 
1,093

 
593,946

 
595,151

 
588,742

 
 
 
 
 
 
Income from operations
13,072

 
49,695

 
38,750

 
 
 
 
 
 
Foreign exchange gain (loss)
(341
)
 
157

 
(376
)
Interest expense
(15,419
)
 
(15,365
)
 
(15,484
)
Interest income
27

 
44

 
59

 
(15,733
)
 
(15,164
)
 
(15,801
)
 
 
 
 
 
 
Income (loss) before income taxes
(2,661
)
 
34,531

 
22,949

Income tax (provision) benefit
1,436

 
(13,193
)
 
(9,402
)
Net income (loss)
$
(1,225
)
 
$
21,338

 
$
13,547

 
 
 
 
 
 
Weighted average common shares outstanding:
 
 
 
 
 
Basic
100,242

 
99,052

 
100,167

Diluted
100,242

 
101,414

 
101,180

 
 
 
 
 
 
Net income (loss) per common share:
 
 
 
 
 
Basic
$
(0.01
)
 
$
0.22

 
$
0.14

Diluted
$
(0.01
)
 
$
0.21

 
$
0.13

For Footnotes, see Summary Notes to Consolidated Financial Statements and Segment Information.

5


Boise Inc.
Segment Information
(unaudited, dollars in thousands)
 
Three Months Ended
 
March 31
 
December 31,
 
2013
 
2012
 
2012
Segment sales
 
 
 
 
 
Packaging
$
287,047

 
$
272,293

 
$
287,332

Paper
332,742

 
382,432

 
352,702

Intersegment eliminations and other
(12,771
)
 
(9,879
)
 
(12,542
)
 
$
607,018

 
$
644,846

 
$
627,492

 
 
 
 
 
 
Segment income (loss)
 
 
 
 
 
Packaging
$
893

 
$
22,435

 
$
31,630

Paper
19,675

 
33,949

 
14,926

Corporate and Other
(7,837
)
 
(6,532
)
 
(8,182
)
 
12,731

 
49,852

 
38,374

 
 
 
 
 
 
Interest expense
(15,419
)
 
(15,365
)
 
(15,484
)
Interest income
27

 
44

 
59

Income (loss) before income taxes
$
(2,661
)
 
$
34,531

 
$
22,949

 
 
 
 
 
 
EBITDA (2)
 
 
 
 
 
Packaging
$
17,224

 
$
37,920

 
$
47,089

Paper
45,626

 
55,164

 
38,244

Corporate and Other
(6,691
)
 
(5,676
)
 
(7,052
)
 
$
56,159

 
$
87,408

 
$
78,281

 
 
 
 
 
 
EBITDA excluding special items (2)
 
 
 
 
 
Packaging
$
17,224

 
$
37,920

 
$
47,089

Paper
45,626

 
55,164

 
38,701

Corporate and Other
(6,691
)
 
(5,676
)
 
(7,052
)
 
$
56,159

 
$
87,408

 
$
78,738

For Footnotes, see Summary Notes to Consolidated Financial Statements and Segment Information.


6


Boise Inc.
Consolidated Balance Sheets
(unaudited, dollars in thousands)

 
March 31, 2013
 
December 31, 2012
ASSETS
 
 
 
 
 
 
 
Current
 
 
 
Cash and cash equivalents
$
57,416

 
$
49,707

Receivables
 
 
 
Trade, less allowances of $1,425 and $1,382
247,172

 
240,459

Other
9,289

 
8,267

Inventories
306,752

 
294,484

Deferred income taxes
9,521

 
17,955

Prepaid and other
10,321

 
8,828

 
640,471

 
619,700

 
 
 
 
Property
 
 
 
Property and equipment, net
1,214,785

 
1,223,001

Fiber farms
24,170

 
24,311

 
1,238,955

 
1,247,312

 
 
 
 
Deferred financing costs
25,528

 
26,677

Goodwill
160,219

 
160,130

Intangible assets, net
144,598

 
147,564

Other assets
6,802

 
7,029

Total assets
$
2,216,573

 
$
2,208,412

 
For Footnotes, see Summary Notes to Consolidated Financial Statements and Segment Information.

7


Boise Inc.
Consolidated Balance Sheets (continued)
(unaudited, dollars and shares in thousands, except per-share data)

 
March 31, 2013
 
December 31, 2012
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
 
 
 
Current
 
 
 
Current portion of long-term debt
$
10,000

 
$
10,000

Accounts payable
206,778

 
185,078

Accrued liabilities
 
 
 
Compensation and benefits
54,669

 
70,950

Interest payable
23,724

 
10,516

Other
21,145

 
20,528

 
316,316

 
297,072

 
 
 
 
Debt
 
 
 
Long-term debt, less current portion
765,000

 
770,000

 
 
 
 
Other
 
 
 
Deferred income taxes
190,541

 
198,370

Compensation and benefits
121,311

 
121,682

Other long-term liabilities
73,076

 
73,102

 
384,928

 
393,154

 
 
 
 
Commitments and contingent liabilities
 
 
 
 
 
 
 
Stockholders’ equity
 
 
 
Preferred stock, $0.0001 par value per share: 1,000 shares authorized; none issued
—

 
—

Common stock, $0.0001 par value per share: 250,000 shares authorized; 100,885 shares and 100,503 shares issued and outstanding
12

 
12

Treasury stock, 21,151 shares held
(121,423
)
 
(121,423
)
Additional paid-in capital
869,540

 
868,840

Accumulated other comprehensive income (loss)
(98,682
)
 
(101,304
)
Retained earnings
100,882

 
102,061

Total stockholders’ equity
750,329

 
748,186

 
 
 
 
Total liabilities and stockholders’ equity
$
2,216,573

 
$
2,208,412

For Footnotes, see Summary Notes to Consolidated Financial Statements and Segment Information.

8


Boise Inc.
Consolidated Statements of Cash Flows
(unaudited, dollars in thousands)

 
Three Months Ended March 31
 
2013
 
2012
Cash provided by (used for) operations
 
 
 
Net income (loss)
$
(1,225
)
 
$
21,338

Items in net income (loss) not using (providing) cash
 
 
 
Depreciation, depletion, and amortization of deferred financing costs and other
44,659

 
38,702

Share-based compensation expense
1,324

 
1,233

Pension expense
1,348

 
2,771

Deferred income taxes
(1,003
)
 
8,838

Other
(92
)
 
(429
)
Decrease (increase) in working capital
 
 
 
Receivables
(7,070
)
 
(12,313
)
Inventories
(12,316
)
 
(12,467
)
Prepaid expenses
746

 
(21
)
Accounts payable and accrued liabilities
13,965

 
(7,585
)
Current and deferred income taxes
(770
)
 
(684
)
Pension payments
(49
)
 
(9,094
)
Other
346

 
1,190

Cash provided by operations
39,863

 
31,479

Cash provided by (used for) investment
 
 
 
Expenditures for property and equipment
(26,610
)
 
(23,133
)
Other
412

 
590

Cash used for investment
(26,198
)
 
(22,543
)
Cash provided by (used for) financing
 
 
 
Payments of long-term debt
(5,000
)
 
(2,500
)
Payments of special dividend
—

 
(47,483
)
Other
(956
)
 
(1,300
)
Cash used for financing
(5,956
)
 
(51,283
)
Increase (decrease) in cash and cash equivalents
7,709

 
(42,347
)
Balance at beginning of the period
49,707

 
96,996

Balance at end of the period
$
57,416

 
$
54,649

For Footnotes, see Summary Notes to Consolidated Financial Statements and Segment Information.

9


Summary Notes to Consolidated Financial Statements and Segment Information
The Consolidated Statements of Operations, 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 2012 Annual Report on Form 10-K and the Company's Quarterly Report on Form 10-Q for the period ended March 31, 2013, as well as other reports the Company files with the SEC. Net income (loss) for all periods presented involved estimates and accruals.

1.
During the three months ended March 31, 2013, we recognized $5.3 million of incremental depreciation expense related to shortening the useful lives of some of our assets, primarily at International Falls, Minnesota.

2.
This release contains several financial measures that are not measures under U.S. generally accepted accounting principles (GAAP). These measures include EBITDA, EBITDA excluding special items, net income excluding special items, free cash flow, and other similar measures. Management uses these measures to evaluate ongoing operations and believes they are useful to investors because they enable them to perform meaningful comparisons of past and present operating results. The tables that follow reconcile these non-GAAP measures with the most directly comparable GAAP measures.

EBITDA represents income (loss) before interest (interest expense and interest income), income taxes, and depreciation, amortization, and depletion. The following table reconciles net income (loss) to EBITDA and EBITDA excluding special items (unaudited, dollars in thousands):
 
Three Months Ended
 
March 31
 
December 31,
 
2013
 
2012
 
2012
Net income (loss)
$
(1,225
)
 
$
21,338

 
$
13,547

Interest expense
15,419

 
15,365

 
15,484

Interest income
(27
)
 
(44
)
 
(59
)
Income tax provision (benefit)
(1,436
)
 
13,193

 
9,402

Depreciation, amortization, and depletion
43,428

 
37,556

 
39,907

EBITDA
$
56,159

 
$
87,408

 
$
78,281

 
 
 
 
 
 
St. Helens charges (a)
$
—

 
$
—

 
$
457

EBITDA excluding special items
$
56,159

 
$
87,408

 
$
78,738

___________
(a)
In December 2012, we ceased paper production on our one remaining paper machine at our St. Helens, Oregon paper mill. During the three months ended December 31, 2012, we recorded $0.5 million, of pretax costs primarily related to ceasing operations at the mill. These costs are recorded in our Paper segment in "Materials, labor, and other operating expenses (excluding depreciation)" and "Other (income) expense, net" in our Consolidated Statements of Operations.

10


The following table reconciles segment income (loss) and EBITDA to EBITDA excluding special items (unaudited, dollars in thousands):
 
Three Months Ended
 
March 31
 
December 31,
 
2013
 
2012
 
2012
Packaging
 
 
 
 
 
Segment income
$
893

 
$
22,435

 
$
31,630

Depreciation, amortization, and depletion
16,331

 
15,485

 
15,459

EBITDA
$
17,224

 
$
37,920

 
$
47,089

 
 
 
 
 
 
Paper
 
 
 
 
 
Segment income
$
19,675

 
$
33,949

 
$
14,926

Depreciation, amortization, and depletion
25,951

 
21,215

 
23,318

EBITDA
$
45,626

 
$
55,164

 
$
38,244

St. Helens charges
—

 
—

 
457

EBITDA excluding special items
$
45,626

 
$
55,164

 
$
38,701

 
 
 
 
 
 
Corporate and Other
 
 
 
 
 
Segment loss
$
(7,837
)
 
$
(6,532
)
 
$
(8,182
)
Depreciation, amortization, and depletion
1,146

 
856

 
1,130

EBITDA
$
(6,691
)
 
$
(5,676
)
 
$
(7,052
)
 
 
 
 
 
 
EBITDA
$
56,159

 
$
87,408

 
$
78,281

 
 
 
 
 
 
EBITDA excluding special items
$
56,159

 
$
87,408

 
$
78,738

The following table reconciles net income (loss) to net income excluding special items and presents net income per diluted share excluding special items (unaudited, dollars and shares in thousands, except per-share data):
 
Three Months Ended
 
March 31
 
December 31,
 
2013
 
2012
 
2012
Net income (loss)
$
(1,225
)
 
$
21,338

 
$
13,547

Incremental depreciation due to changes in estimated useful lives

5,316

 
—

 
—

St. Helens charges
—

 
—

 
457

Tax provision for special items (a)
(2,057
)
 
—

 
(177
)
Net income excluding special items
$
2,034

 
$
21,338

 
$
13,827

 
 
 
 
 
 
Weighted average diluted shares outstanding: (b)
100,890

 
101,414

 
101,180

Net income per diluted share excluding special items
$
0.02

 
$
0.21

 
$
0.14

____________
(a)
Taxes are applied to special items in the aggregate at the combined federal and state statutory rate in effect for the period.
(b)
For the three months ended March 31, 2013, both basic and diluted weighted average common shares outstanding reported in our Consolidated Statements of Operations were 100.2 million, as we reported a net loss. Adjusting for the special items above, diluted weighted average common shares outstanding increased 0.6 million shares to reflect the incremental effect of dilutive common stock equivalents.

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The following table reconciles cash provided by operations to free cash flow (unaudited, dollars in thousands):
 
Three Months Ended March 31
 
2013
 
2012
Cash provided by operations
$
39,863

 
$
31,479

Expenditures for property and equipment
(26,610
)
 
(23,133
)
Free cash flow
$
13,253

 
$
8,346



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