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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

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FORM 10-Q

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

For the quarterly period ended September 30, 1999
OR

|/ / | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|--- | ----------------------------------------------------------------------------------------

For the transition period from  to

Commission file number 0-24976

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CROWN PACIFIC PARTNERS, L.P.

(Exact name of registrant as specified in its charter)

|Delaware(State or other jurisdiction
of incorporation or organization)                       |  | 93-1161833(I.R.S. Employer Identification No.)
|-------------------------------------------------------------------------------------------- |  | ----------------------------------------------
|121 SW Morrison Street, Suite 1500, Portland, Oregon(Address of principal executive offices) |  | 97204(Zip Code)                               
|Registrant's telephone number, including area code:503-274-2300                             

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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
the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date.

|Common Units(Class) |  | 27,414,704(Outstanding at November 4, 1999)
|------------------- |  | -------------------------------------------

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## 

FORM 10-Q

INDEX

|                             |  |                                                                                        |  | Page
|---------------------------- |  | -------------------------------------------------------------------------------------- |  | ----
|PART IFINANCIAL INFORMATION
|Item 1.                      |  | Financial Statements                                                                   |  |     
|                             |  | Consolidated Statement of IncomeThree Month Periods Ended September 30, 1999 and 1998 |  | 3   
|                             |  | Consolidated Statement of IncomeNine Month Periods Ended September 30, 1999 and 1998  |  | 4   
|                             |  | Consolidated Balance SheetSeptember 30, 1999 and December 31, 1998                    |  | 5   
|                             |  | Consolidated Statement of Cash FlowsNine Months Ended September 30, 1999
and 1998     |  | 6   
|                             |  | Notes to Consolidated Financial Statements                                             |  | 7   
|Item 2.                      |  | Management's Discussion and Analysis of Financial Condition and Results of Operations  |  | 11  
|Item 3.                      |  | Quantitative and Qualitative Disclosures About Market Risk                             |  | 20  
|PART IIOTHER INFORMATION   
|Item 6.                      |  | Exhibits and Reports on Form 8-K                                                       |  | 21  
|Signature                    |  | 22                                                                                    

2

## 

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Crown Pacific Partners, L.P.

Consolidated Statement of Income

(In thousands, except unit and per unit data)
(Unaudited)

|                                             |  | For the Three Months Ended September 30, |           
|-------------------------------------------- |  | ---------------------------------------- | ----------
|
|Revenues                                     |  | $                                        | 219,087   
|Operating costs:                             |  |                                          |           
|Cost of products sold                        |  |                                          | 187,872   
|Selling, general and administrative expenses |  |                                          | 10,326    
|                                             |  |                                          |           
|Operating income                             |  |                                          | 20,889    
|Interest expense                             |  |                                          | 12,399    
|Amortization of debt issuance costs          |  |                                          | 186       
|Other (income) expense, net                  |  |                                          | (293      
|                                             |  |                                          |           
|Net income                                   |  | $                                        | 8,597     
|                                             |  |                                          |           
|Net income per unit                          |  | $                                        | 0.28      
|                                             |  |                                          |           
|Weighted average units outstanding           |  |                                          | 30,301,248
|                                             |  |                                          |           

See
accompanying Notes to Consolidated Financial Statements.

3

Crown Pacific Partners, L.P.

Consolidated Statement of Income

(In thousands, except unit and per unit data)
(Unaudited)

|                                             |  | For the Nine Months Ended September 30, |           
|-------------------------------------------- |  | --------------------------------------- | ----------
|
|Revenues                                     |  | $                                       | 590,433   
|Operating costs:                             |  |                                         |           
|Cost of products sold                        |  |                                         | 496,992   
|Selling, general and administrative expenses |  |                                         | 29,785    
|                                             |  |                                         |           
|Operating income                             |  |                                         | 63,656    
|Interest expense                             |  |                                         | 36,719    
|Amortization of debt issuance costs          |  |                                         | 506       
|Other (income) expense, net                  |  |                                         | 238       
|                                             |  |                                         |           
|Net income                                   |  | $                                       | 26,193    
|                                             |  |                                         |           
|Net income per unit                          |  | $                                       | 0.86      
|                                             |  |                                         |           
|Weighted average units outstanding           |  |                                         | 30,209,500
|                                             |  |                                         |           

See
accompanying Notes to Consolidated Financial Statements.

4

Crown Pacific Partners, L.P.

Consolidated Balance Sheet

(In thousands, except unit data)

|                                                                                                                         |  | (Unaudited) |         | 
|------------------------------------------------------------------------------------------------------------------------ |  | ----------- | ------- | 
|
|Assets                                                                                                                  
|Current assets:                                                                                                          |  |             |         | 
|Cash and cash equivalents                                                                                                |  | $           | 18,146  | 
|Accounts receivable, net of allowances of $576 and $340                                                                  |  |             | 114,004 | 
|Notes receivable                                                                                                         |  |             | 6,543   | 
|Inventories                                                                                                              |  |             | 63,600  | 
|Deposits on timber cutting contracts                                                                                     |  |             | 2,241   | 
|Prepaid and other current assets                                                                                         |  |             | 3,048   | 
|                                                                                                                         |  |             |         | 
|Total current assets                                                                                                     |  |             | 207,582 | 
|Property, plant and equipment, net of accumulated depreciation of $34,114 and $29,475                                    |  |             | 51,324  | 
|Timber, timberlands and roads, net                                                                                       |  |             | 570,542 | 
|Intangible assets, net of accumulated amortization of $1,135 and $607                                                    |  |             | 30,635  | 
|Other assets                                                                                                             |  |             | 22,590  | 
|                                                                                                                         |  |             |         | 
|Total assets                                                                                                             |  | $           | 882,673 | 
|                                                                                                                         |  |             |         | 
|Liabilities and Partners' Capital                                                                                       
|Current liabilities:                                                                                                     |  |             |         | 
|Notes payable                                                                                                            |  | $           | 25,500  | 
|Accounts payable                                                                                                         |  |             | 43,404  | 
|Accrued expenses                                                                                                         |  |             | 24,196  | 
|Accrued interest                                                                                                         |  |             | 13,091  | 
|Current portion of long-term debt                                                                                        |  |             | 65      | 
|                                                                                                                         |  |             |         | 
|Total current liabilities                                                                                                |  |             | 106,256 | 
|Long-term debt                                                                                                           |  |             | 560,308 | 
|Other non-current liabilities                                                                                            |  |             | 807     | 
|                                                                                                                         |  |             |         | 
|                                                                                                                         |  |             | 667,371 | 
|                                                                                                                         |  |             |         | 
|Commitments and contingent liabilities                                                                                   |  |             |         | 
|Partners' capital:                                                                                                       |  |             |         | 
|General partners                                                                                                         |  |             | 1,833   | 
|Limited partners (30,301,248 and 29,876,720 units outstanding at September 30, 1999 and December 31, 1998, respectively) |  |             | 213,469 | 
|                                                                                                                         |  |             |         | 
|Total partners' capital                                                                                                  |  |             | 215,302 | 
|                                                                                                                         |  |             |         | 
|Total liabilities and partners' capital                                                                                  |  | $           | 882,673 | 
|                                                                                                                         |  |             |         | 

See
accompanying Notes to Consolidated Financial Statements.

5

Crown Pacific Partners, L.P.

Consolidated Statement of Cash Flows

(In thousands)
(Unaudited)

|                                                                                  |  | For the Nine Months Ended September 30, |        
|--------------------------------------------------------------------------------- |  | --------------------------------------- | -------
|
|Cash flows from operating activities:                                             |  |                                         |        
|Net income                                                                        |  | $                                       | 26,193 
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                                         |        
|Depletion, depreciation and amortization                                          |  |                                         | 44,482 
|Gain on sale of property                                                          |  |                                         | (922   
|Other                                                                             |  |                                         | 2      
|Net change in current assets and current liabilities:                             |  |                                         |        
|Accounts and notes receivable                                                     |  |                                         | (35,282
|Inventories                                                                       |  |                                         | (9,947 
|Deposits on timber cutting contracts                                              |  |                                         | 1,251  
|Prepaid and other current assets                                                  |  |                                         | (54    
|Accounts payable and accrued expenses                                             |  |                                         | 16,896 
|                                                                                  |  |                                         |        
|Net cash provided by operating activities                                         |  |                                         | 42,619 
|                                                                                  |  |                                         |        
|Cash flows from investing activities:                                             |  |                                         |        
|Additions to timberlands                                                          |  |                                         | (11,649
|Additions to timber cutting rights                                                |  |                                         | (12,623
|Additions to equipment                                                            |  |                                         | (12,097
|Proceeds from sales of property                                                   |  |                                         | 5,515  
|Principal payments received on notes                                              |  |                                         | 11,634 
|Purchase of a business                                                            |  |                                         | (3,114 
|Other investing activities                                                        |  |                                         | (796   
|                                                                                  |  |                                         |        
|Net cash used in investing activities                                             |  |                                         | (23,130
|                                                                                  |  |                                         |        
|Cash flows from financing activities:                                             |  |                                         |        
|Net increase (decrease) in short-term borrowings                                  |  |                                         | 15,500 
|Proceeds from issuance of long-term debt                                          |  |                                         | 13,403 
|Repayments of long-term debt                                                      |  |                                         | (30    
|Proceeds from sale of partnership interests                                       |  |                                         |       
|Contributions of capital                                                          |  |                                         | 184    
|Distributions to partners                                                         |  |                                         | (51,736
|Debt and equity issuance costs                                                    |  |                                         | (173   
|Other financing activities                                                        |  |                                         | (33    
|                                                                                  |  |                                         |        
|Net cash used in financing activities                                             |  |                                         | (22,885
|                                                                                  |  |                                         |        
|Net decrease in cash and cash equivalents                                         |  |                                         | (3,396 
|Cash and cash equivalents at beginning of period                                  |  |                                         | 21,542 
|                                                                                  |  |                                         |        
|Cash and cash equivalents at end of period                                        |  | $                                       | 18,146 
|                                                                                  |  |                                         |        

See
accompanying Notes to Consolidated Financial Statements.

6

CROWN PACIFIC PARTNERS, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per unit amounts or as otherwise indicated)
(Unaudited)

1:  Organization and Basis of Presentation

Crown Pacific Partners, L.P. ("Crown Pacific" or the "Partnership"), a Delaware limited partnership, through its 99% owned subsidiary, Crown Pacific Limited
Partnership (the "Operating Partnership"), was formed in 1994 to acquire, own and operate timberlands and wood product manufacturing facilities located in the northwest United States. The
Partnership's business consists primarily of growing and harvesting timber for sale as logs in domestic and export markets and the manufacturing and selling of lumber and other wood products.

The
financial statements included in this Form 10-Q are unaudited and reflect the consolidated financial position, results of operations and cash flows of the
Partnership. These financial statements include all the accounts of the Partnership but do not contain all of the information required by generally accepted accounting principles to be included in a
full set of financial statements. The financial statements in the Partnership's 1998 annual report on Form 10-K, which includes a summary of significant accounting policies of the
Partnership, should be read in conjunction with this Form 10-Q. In the opinion of management, all material adjustments necessary to present fairly the results of operations for the
three and nine month periods ended September 30, 1999 and 1998 have been included. All such adjustments are of a normal and recurring nature and all significant intercompany transactions have
been eliminated. The results of operations for any interim period are not necessarily indicative of the results of operations for the entire year.

Net
income per unit was calculated using the weighted average number of common and subordinated units outstanding, divided into net income, after adjusting for the General Partner
interest. The General Partner income allocation was $86 and $68 for the three months ended September 30, 1999 and 1998, respectively, and $262 and $212 for the nine months ended
September 30, 1999 and 1998, respectively. There is no significant difference between basic and diluted earnings per unit as net income is allocated proportionately to both subordinated and
common units.

Note 2: Inventories

Inventories, consisting of lumber and logs, are stated at the lower of LIFO cost or market. Supplies and inventories maintained at
non-manufacturing locations are valued at the lower of average cost or market. Inventories consisted of the following:

|                        |  | September 30, 1999 |        | December 31, 1998
|----------------------- |  | ------------------ | ------ | -----------------
|Lumber                  |  | $                  | 9,199  |                  
|Logs                    |  |                    | 27,579 |                  
|Supplies                |  |                    | 3,361  |                  
|LIFO adjustment         |  |                    | 2,223  |                  
|                        |  |                    |        |                  
|Manufacturing inventory |  |                    | 42,362 |                  
|Wholesale products      |  |                    | 21,238 |                  
|                        |  |                    |        |                  
|Total                   |  | $                  | 63,600 |                  
|                        |  |                    |        |                  

7

Note 3: Timber, Timberlands and Roads

In the first quarter of each year, the Partnership performs an update of its timber inventory system. The update resulted in a net decrease in depletion costs
for the first nine months of 1999 of approximately $0.7 million, or $0.02 per unit, and a net increase in depletion costs for the first nine months of 1998 of approximately $6.3 million,
or $0.23 per unit, with no impact on cash flow.

Note 4: Supplemental Cash Flow Information

Supplemental disclosure of cash flow information is as follows:

|                                              |  | Nine months ended September 30,
|--------------------------------------------- |  | -------------------------------
|
|Cash paid during the period for interest      |  | $                              
|Business assets acquired with debt and equity |  |                                

Note 5: Acquisition of Desert Lumber, Inc. and Reno Lumber Service, Inc.

In March 1999, the Partnership acquired Desert Lumber, Inc. and Reno Lumber Service, Inc. (collectively "Desert Lumber"), which operate
contractor service yards in Las Vegas and Reno, Nevada, for approximately $24.3 million (excluding contingent future payments of $3.0 million), which consisted of $5.1 million of
cash, $9.0 million in Partnership units and the assumption of $10.2 million of debt and other liabilities. The acquisition was accounted for as a purchase and the results of Desert
Lumber have been included since the acquisition date. Goodwill related to this acquisition was $10.0 million and is being amortized over 40 years. The unaudited pro forma results for the
nine months ended September 30, 1999 and 1998, had the Partnership acquired Desert Lumber on January 1, 1998, are as follows:

|                    |  | Nine Months Ended September 30,
|------------------- |  | -------------------------------
|
|Revenue             |  | $                              
|Net income          |  |                                
|Net income per unit |  |                                

Note 6: Segment Reporting

The Partnership classifies its operations into three fundamental businesses: (1) Timberlands, consisting of the sale of logs to the Partnership's
manufacturing facilities and to third parties, and the sale of timber and timberlands to third parties; (2) Manufacturing, consisting of the manufacture of logs into lumber and the sale of
residual chips to pulp and paper mills; and (3) Wholesale Marketing, consisting of the trading of various forest products and distribution of lumber and panel products through the Partnership's
professional contractor service yards. Transfers between segments are generally at prices which management believes reflect current market prices.
8

The
following summarizes the Partnership's segment information:

|                     |  | Three Months Ended September 30, |         | Nine Months Ended September 30, |  
|-------------------- |  | -------------------------------- | ------- | ------------------------------- | -
|
|
|Timberlands:         |  |                                  |         |                                 |  
|Trade                |  | $                                | 21,124  |                                 | $
|Intersegment         |  |                                  | 48,504  |                                 |  
|                     |  |                                  |         |                                 |  
|                     |  |                                  | 69,628  |                                 |  
|Manufacturing:       |  |                                  |         |                                 |  
|Trade                |  |                                  | 77,307  |                                 |  
|Intersegment         |  |                                  | 3,073   |                                 |  
|                     |  |                                  |         |                                 |  
|                     |  |                                  | 80,380  |                                 |  
|Wholesale Marketing: |  |                                  |         |                                 |  
|Trade                |  |                                  | 116,656 |                                 |  
|Intersegment         |  |                                  | 15,755  |                                 |  
|                     |  |                                  |         |                                 |  
|                     |  |                                  | 132,411 |                                 |  
|Corporate and Other: |  |                                  |         |                                 |  
|Trade                |  |                                  | 4,000   |                                 |  
|Intersegment         |  |                                  | 545     |                                 |  
|                     |  |                                  |         |                                 |  
|                     |  |                                  | 4,545   |                                 |  
|Total:               |  |                                  |         |                                 |  
|Total Revenue        |  |                                  | 286,964 |                                 |  
|Less Intersegment    |  |                                  | (67,877 | )                               |  
|                     |  |                                  |         |                                 |  
|Net Revenue          |  | $                                | 219,087 |                                 | $
|                     |  |                                  |         |                                 |  

|                    |  | Three Months Ended September 30, |         | Nine Months Ended September 30, |  
|------------------- |  | -------------------------------- | ------- | ------------------------------- | -
|
|
|Timberlands         |  | $                                | 9,741   |                                 | $
|Manufacturing       |  |                                  | 11,801  |                                 |  
|Wholesale           |  |                                  | 2,685   |                                 |  
|Corporate and Other |  |                                  | (3,338  | )                               |  
|                    |  |                                  |         |                                 |  
|Operating Income    |  |                                  | 20,889  |                                 |  
|Interest Expense    |  |                                  | (12,399 | )                               |  
|Other               |  |                                  | 107     |                                 |  
|                    |  |                                  |         |                                 |  
|Net Income          |  | $                                | 8,597   |                                 | $
|                    |  |                                  |         |                                 |  

9

Note 7: Distributions

In
both the first and second quarters of 1999, the Board of Control of the Managing General Partner authorized the Partnership to make distributions of $0.564 per unit. The
distributions in each quarter totaled $17.4 million (including $0.4 million to the General Partners) and were paid on May 14, 1999 and August 13, 1999.

Note 8: Subsequent Events

On October 19, 1999, the Board of Control authorized the Partnership to make a distribution of $0.564 per unit. The total distribution will be
$17.4 million (including $0.4 million to the General Partners) and will be paid on November 12, 1999 to unitholders of record on November 4, 1999.

10

Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations

General

Crown Pacific's principal operations consist of the growing and harvesting of timber, the sale of logs and the processing and sale of lumber and other wood
products. The Partnership's ability to implement its business strategy over the long term and its results of operations depend upon a number of factors, many of which are beyond its control. These
factors include general industry conditions, domestic and international prices and supply and demand for logs, lumber and other wood products, seasonality and competition from other supplying regions
and substitute products.

Forward-Looking Statements

Information contained in Item 2 and other sections of this report include forward-looking statements including statements regarding the Partnership's
expectations, hopes, beliefs, intentions or strategies regarding the future that are not purely historical, but are based on assumptions that in the future may prove not to be accurate. The
Partnership's business and prospects are subject to a number of risks, including the volatility of global timber and lumber prices and supplies, factors limiting harvesting of timber including
contractual obligations, governmental restrictions, weather and access limitations, as well as the substantial capital expenditures required to supply its operations.

Additional
factors that could affect future performance include environmental risks, operating risks normally associated with the timber industry, competition, government regulation
and economic changes in the regions where the Partnership's products are sold, including Southeast Asia and Japan. Other risk factors include the value of the U.S. dollar against foreign currencies
and the ability of the Partnership to implement its business strategy. These and other risks are described in the Partnership's registration statements and in reports filed from time to time on
forms 10-K, 8-K and 10-Q, which are available from the Partnership or the United States Securities and Exchange Commission.

Financial Condition

The Partnership's primary sources of liquidity have been cash provided by operating activities as well as debt and equity financings. Working capital increased
to $101.3 million at September 30, 1999 compared to $97.7 million at December 31, 1998. Cash provided by operating activities was $42.6 million and
$43.2 million for the nine-month periods ended September 30, 1999 and 1998, respectively. The net decrease in cash provided by operating activities is primarily a result of
increased accounts receivable and inventory, partially offset by an increase in accounts payable balances related to the Partnership's wholesale operations.

Net
cash used in investing activities of $23.1 million resulted from additions to timberlands and timber cutting rights, equipment and acquisition of Desert Lumber, partially
offset by proceeds from sales of properties and principal payments received on notes.

Net
cash used by financing activities of $22.9 million resulted primarily from distributions to partners of $51.7 million, partially offset by a $15.5 million net
increase in short-term borrowings and $13.4 million in net proceeds from long-term debt.

Cash
required to meet the Partnership's quarterly cash distributions (as required by the Partnership Agreement), to pay for capital expenditures and to satisfy interest and principal
payments on indebtedness, has been and will continue to be significant. Capital expenditures, consisting of additions to timber cutting rights and additions to property, plant and equipment, were
$24.7 million in the first nine months of 1999, and are expected to total approximately $30.0 million during all of 1999. Additions to timber and timberland purchases are evaluated as
opportunities arise and totaled $11.6 million in the first nine months of 1999. The Managing General Partner expects that capital expenditures will be funded by a combination of any or
all of the following: property sales, cash generated from operations, current funds or bank
11borrowings. The Partnership expects to make cash distributions from its current funds and from cash generated by operating activities.

The
Partnership plans to spend approximately $20.0 million in 2000 on a new small log line at its Gilchrist mill, which will be funded either with lease or bank financing. In
addition, the Partnership is planning to close its acquisition of approximately 91,000 acres of northern Idaho timberlands in January 2000 for $73.0 million, which will be funded with
bank borrowings under the Partnership's acquisition facility.

The
Partnership has a $40 million revolving credit facility with a group of banks for working capital purposes and stand-by letters of credit that expire on
September 30, 2000. The credit facility bears a floating rate of interest, 7.21% at September 30, 1999, and among other provisions, requires the Partnership to repay all outstanding
indebtedness under the facility for at least 30 consecutive days during any twelve-month period. The last 30 day consecutive period without borrowing was the 30 days ended
May 13, 1999. The line of credit is secured by the Partnership's inventories and receivables. At September 30, 1999, the Partnership had $25.5 million outstanding under this
facility.

The
Partnership also has an acquisition facility with a group of banks to provide for a $150 million revolving line of credit for the acquisition of businesses, additional
timber, timberlands and related assets. The acquisition facility is unsecured and expires September 30, 2000. At the end of the revolving period, the Partnership may elect to convert any
outstanding borrowings under this facility to a four-year term loan, requiring quarterly principal payments equal to 6.25% of the outstanding principal balance
on the conversion date. At September 30, 1999, the Partnership had $74.1 million outstanding under this facility, with a weighted average interest rate of 6.2% at September 30,
1999.

The
Partnership is currently renegotiating its bank credit facilities. The amended facilities, expected to close in November 1999, will include a $50 million to
$60 million working capital facility and a $200 million to $240 million acquisition facility. The acquisition facility will be extended and will expire approximately
November 2002, at which time it may be converted into a four-year term loan requiring quarterly payments. The amended facilities are expected to have covenants similar to the
existing facilities, except that the working capital facility is expected to be unsecured and will not require an annual 30 day period without borrowing. The interest rate on the amended credit
facilities will be .0125% higher than on the existing credit facilities.

The
Partnership's 9.78%, 9.60%, 8.17% and 7.8% senior notes, issued in 1994, 1995, 1996 and 1998, respectively, are unsecured and require semi-annual interest payments
through 2018. These senior notes, with an aggregate $486 million principal amount, require the Partnership to make an aggregate principal payment of $37.5 million on December 1,
2002, and annual principal payments in various amounts from December 1, 2003 through 2018.

All
of the Partnership's senior note agreements and bank lines of credit contain certain restrictive covenants, including limitations on harvest levels, land sales, cash distributions
and the amount of future indebtedness. The Partnership was in compliance with such covenants at September 30, 1999.

Results of Operations

Three Months Ended September 30, 1999 compared to Three Months Ended September 30, 1998

General

Net revenues during the third quarter ended September 30, 1999 increased 27.6% to $219.1 million, from $171.8 million in the same quarter
in 1998. The $47.3 million increase was principally due to increases in revenues from the Partnership's wholesale and manufacturing operations, which were partially offset by decreases in log
and property sales from the timberland operations.
12

Selling,
general and administrative expenses increased $3.1 million to $10.3 million (4.7% of revenues) in the third quarter of 1999, compared to $7.2 million
(4.2% of revenues) in the third quarter of 1998. The increases are primarily a result of the growth of the wholesale operations including the addition of Desert Lumber in March 1999.

Operating
income as a percentage of revenues decreased to 9.5% in the third quarter of 1999, compared to 11.5% in the same quarter of 1998 due to a higher percentage of wholesale
activities and lower revenues from timber operations. Excluding wholesale operations, operating income as a percent of revenue was 17.8% in the third quarter of 1999 as well as for the same quarter
in 1998.

Interest
expense decreased $0.5 million to $12.4 million in the third quarter of 1999, from $12.9 million in the third quarter of 1998. The decrease is primarily
a result of lower average debt balances during the third quarter of 1999 as a result of the payoff of approximately $50 million of debt at the end of the fourth quarter of 1998 following the
receipt of proceeds from an equity offering.

The
Partnership pays no significant income taxes and does not include a provision for income taxes in its financial statements.

Timberlands

Total external sales decreased $22.0 million to $21.1 million, or 9.6% of revenue in the third quarter of 1999, compared to $43.1 million,
or 25.1% of revenue in the comparable quarter of 1998. Internal sales of logs to manufacturing increased $14.9 million to $48.5 million in the third quarter of 1999, compared to
$33.6 million in the third quarter of 1998, primarily as a result of increased intersegment sales to the Port Angeles and Bonners Ferry sawmills.

Overall
operating income from timberlands, including property sales, decreased 47.9% to $9.7 million in the third quarter of 1999 from $18.7 million in the comparable
quarter of 1998, primarily as a result of a 43% reduction in fee harvest. The Partnership was able to reduce the fee harvest because of favorable results achieved by the manufacturing operations.

Domestic Log Sales

Average external domestic prices received for logs, including stumpage but excluding pulpwood, from the various tree farms were as follows (dollars per
thousand board feet "MBF"):

|                 |  | Quarter Ended September 30, |  |          | 
|---------------- |  | --------------------------- |  | -------- | 
|
|
|Oregon           |  | $428/MBF                    |  | $502/MBF | 
|Inland           |  | $447/MBF                    |  | $413/MBF | 
|Hamilton         |  | $390/MBF                    |  | $355/MBF | 
|Olympic          |  | $404/MBF                    |  | $397/MBF | 
|Weighted average |  | $416/MBF                    |  | $430/MBF | 

Decreases
in the average sales price received for domestic logs in the third quarter of 1999 are primarily the result of a shift in the stumpage sales species mix compared to the same
quarter in 1998, which was generally offset by an overall increase in prices received for domestic logs.

Domestic
external log sales volumes, including stumpage sales, but excluding pulpwood sales, decreased 57.5% in the third quarter of 1999 to 36.9 million board feet (MMBF),
compared to 86.8 MMBF in the same quarter of 1998, as a result of increased internal sales to the new Bonners Ferry and Port
13Angeles saw mills and a 37.6 MMBF reduction in stumpage sales. The external volume from each of the tree farms was as follows (in thousands of board feet (MBF)):

|         |  | Quarter Ended September 30, |  |        | 
|-------- |  | --------------------------- |  | ------ | 
|
|
|Oregon   |  | 3,793                       |  | 36,494 | 
|Inland   |  | 12,813                      |  | 10,005 | 
|Hamilton |  | 15,070                      |  | 25,551 | 
|Olympic  |  | 5,206                       |  | 14,735 | 
|         |  |                             |  |        | 
|Total    |  | 36,882                      |  | 86,785 | 
|         |  |                             |  |        | 

Export Log Sales

Sales of logs to customers involved in exporting activities were $0.7 million, or 0.3% of revenue in the third quarter of 1999, compared to
$2.6 million, or 1.5% of revenue for the same quarter in 1998. Prices received for export logs increased 16.3% to $657/MBF while sales volumes decreased to 1.1 MMBF in the
third quarter of 1999 from 4.6 MMBF in the same quarter of 1998. The increase in the price is primarily a result of improving market conditions in Asian markets. The Partnership does not
expect the volume of sales in the export log market to improve much above current levels.

Property Sales

Revenue and operating income from property sales in the third quarter of 1999 were $1.8 million and $0.9 million, respectively, compared to none
in the comparable quarter of 1998. As part of its ongoing strategy of reinvesting the value of non-strategic timberlands, the Partnership will continue to sell or trade properties in
Oregon, Idaho and northwest Washington.

Manufacturing

Sawmill sales, excluding sales of lumber products to the wholesale division, were $77.3 million, or 35.3% of revenue in the third quarter of 1999,
compared to $47.1 million, or 27.4% of revenue in the comparable quarter of 1998. Intersegment sales of lumber products to the wholesale marketing group increased to $3.1 million in the
third quarter of 1999 from $1.9 million in the comparable quarter of 1998.

Operating
income from manufacturing increased to $11.8 million in the third quarter of 1999 from $1.7 million in the comparable quarter of 1998. The increase is
primarily a result of efficiencies and cost reductions realized at existing mills, achieving production goals at the new Bonners Ferry and Port Angeles mills and improved market conditions for lumber
products. The Partnership expects a decrease in operating income in the fourth quarter of 1999 compared to the third quarter of 1999 as a result of the seasonal winter slowdown and decreasing lumber
prices.

Average
prices received for all lumber sales, including wholesale transactions, in the various regions were as follows:

|                 |  | Quarter Ended September 30, |         |  |  
|---------------- |  | --------------------------- | ------- |  | -
|
|
|Oregon           |  | $                           | 687/MBF |  | $
|Inland           |  | $                           | 420/MBF |  | $
|Washington       |  | $                           | 347/MBF |  | $
|Weighted average |  | $                           | 493/MBF |  | $

14

Lumber
prices began declining during the middle part of the third quarter of 1999 after reaching twenty-one month highs in July 1999.

Lumber
sales volumes increased 53.2% in the third quarter of 1999 to 151.8 MMBF compared to 99.0 MMBF in the comparable quarter of 1998. Sales volumes from the various regions
were as follows (in MBF):

|           |  | Quarter Ended September 30, |  |        | 
|---------- |  | --------------------------- |  | ------ | 
|
|
|Oregon     |  | 51,606                      |  | 43,013 | 
|Inland     |  | 63,794                      |  | 47,992 | 
|Washington |  | 36,376                      |  | 8,041  | 
|           |  |                             |  |        | 
|Total      |  | 151,776                     |  | 99,046 | 
|           |  |                             |  |        | 

The
increases at the Inland and Washington regions are primarily a result of production from the newly constructed Bonners Ferry and Port Angeles sawmills that came on line during the
fourth quarter of 1998.

By-product
revenues, consisting primarily of residual wood chips, accounted for 2.2% of revenue in the third quarter of 1999, compared to 1.2% of revenue in the comparable
quarter of 1998. Average prices for residual wood chips increased to $67 per bone dry unit (BDU) in the third quarter of 1999 compared to $52/BDU in the comparable quarter of 1998. Prices are expected
to remain at, or slightly above, current levels during the fourth quarter of 1999 as the Partnership benefits from improved profitability at the pulp and paper operations that purchase the
Partnership's by-products.

Wholesale Marketing

External revenues from sales by the Partnership's wholesale operations consisted of lumber and other wood products, most of which were not manufactured by the
Partnership, and totaled $116.7 million, or 53.2% of revenue in the third quarter of 1999, compared to $77.2 million, or 44.9% of revenue in the comparable quarter of 1998. Operating
income from wholesale operations decreased 9.1% to $2.7 million in the third quarter of 1999 from $3.0 million in the comparable quarter of 1998. The increase in revenue is a result of
the acquisition of Desert Lumber and Reno Lumber in March 1999,
which added two new contractor service yards, as well as internal growth at existing operations. Operating income decreased as a result of a sharp downturn in both lumber and panel markets in the
second half of the third quarter, which led to lower profits on new jobs that were being supplied with inventory purchased at higher prices.

Results of Operations

Nine Months Ended September 30, 1999 compared to Nine Months Ended September 30, 1998

General

Net revenues during the nine months ended September 30, 1999 increased 18.7% to $590.4 million, from $497.4 million in the comparable
period of 1998. The $93.0 million increase was principally due to increases in revenues from the Partnership's wholesale and manufacturing operations, which were partially offset by decreases
in log and property sales from the timberland operations.

Selling,
general and administrative expenses increased $8.0 million to $29.8 million (5.0% of revenues) in the nine months ended September 30, 1999, from
$21.8 million (4.4% of revenues) in the comparable 1998 period, primarily as a result of the growth of the wholesale operations including the addition of Desert Lumber in March 1999 and
$650,000 of recorded expense related to front end stock options
15granted at the time of the Partnership's initial public offering, which were partially offset by operating efficiencies achieved within the administrative functions as operations have increased.

Operating
income as a percentage of revenues decreased to 10.8% for the nine months ended September 30, 1999 compared to 12.0% for the comparable period in 1998 as a result of
a higher percentage of revenue coming from the lower margin wholesale operations. Excluding wholesale operations, operating income as a percentage of revenue increased to 18.6% for the nine months
ended September 30, 1999 compared to 17.2% for the comparable period in 1998 as a result of favorable increases in log and lumber prices and improved manufacturing efficiencies.

Interest
expense decreased $2.1 million to $36.7 million in the first nine months of 1999, from $38.8 million in the comparable period of 1998. The
decrease is primarily a result of lower average debt balances during the first three quarters of 1999 compared to the first three quarters of 1998 as a result of the payoff of
approximately $50 million of debt at the end of the fourth quarter of 1998 following the receipt of proceeds from an equity offering.

Other
expense, net of $0.2 million in the first nine months of 1999 includes a $1.4 million charge related to the closing and auctioning off of the Partnership's
Colburn mill during the second quarter of 1999.

The
Partnership pays no significant income taxes and does not include a provision for income taxes in its financial statements.

Timberlands

Total external sales decreased to $78.2 million, or 13.3% of revenue in first nine months of 1999, compared to $146.3 million, or 29.4% of
revenue in the comparable period of 1998. Internal sales of logs to manufacturing increased $22.3 million to $132.7 million in the first nine months of 1999 from
$110.4 million in the comparable period of 1998 as a result of intersegment sales to the new Port Angeles sawmill.

Overall
operating income from timberlands, including property sales, decreased 34.9% to $40.6 million in the first nine months of 1999 from $62.3 million in the
comparable period of 1998, primarily as a result of decreases in fee harvest, lower external log sales and fewer property sales in the first nine months of 1999 compared to the first
nine months of 1998.

Domestic Log Sales

Average external domestic prices received for logs sold from the various tree farms, including stumpage but excluding pulpwood, were as follows:

|                 |  | Nine Months Ended September 30, |         |  |  
|---------------- |  | ------------------------------- | ------- |  | -
|
|
|Oregon           |  | $                               | 410/MBF |  | $
|Inland           |  | $                               | 450/MBF |  | $
|Hamilton         |  | $                               | 357/MBF |  | $
|Olympic          |  | $                               | 377/MBF |  | $
|Weighted average |  | $                               | 396/MBF |  | $

Log
prices for any period of time are influenced by the species of logs sold and the form in which they are soldas stumpage (i.e. a standing tree) or as a
delivered log. Market prices for logs for the nine month period ended September 30, 1999 are generally higher than for the comparable period in 1998 in response to the higher lumber prices. The
weighted average price received by the Partnership decreased in the nine months ended September 30, 1999 compared to the nine months ended September 30, 1998 despite the
16higher log prices as a result of differences in the type mix (i.e. changes in the percentage of delivered logs vs. stumpage sales) and changes in the species mix.

Domestic
external log sales volumes decreased 42.1% in the first nine months of 1999 to 149.2 MMBF, compared to 257.7 MMBF in the comparable period of 1998,
primarily as a result of increased internal
sales to the new Bonners Ferry and Port Angeles sawmills and a 21.6% decrease in the 1999 fee harvest. Outside sales from the Oregon tree farm decreased 64.9 MMBF in the first
nine months of 1999 primarily as a result of a significant decrease in stumpage sales in the first nine months of 1999 compared to the first nine months of 1998.

The
external volume from each of the Partnership's tree farms was as follows (in thousands of board feet (MBF)):

|         |  | Nine Months Ended September 30, |  |         | 
|-------- |  | ------------------------------- |  | ------- | 
|
|
|Oregon   |  | 10,264                          |  | 75,205  | 
|Inland   |  | 47,286                          |  | 55,977  | 
|Hamilton |  | 50,188                          |  | 69,907  | 
|Olympic  |  | 41,453                          |  | 56,640  | 
|         |  |                                 |  |         | 
|Total    |  | 149,191                         |  | 257,729 | 
|         |  |                                 |  |         | 

Export Log Sales

Sales of logs to customers involved in exporting activities were $4.5 million, or 0.8% of revenues in the first nine months of 1999, compared to
$6.2 million, or 1.3% of revenues for the comparable period of 1998. Prices received for export logs increased $23/MBF to $613/MBF while sales volumes decreased to 7.4 MMBF in the first
nine months of 1999 compared to 10.5 MMBF in the comparable period of 1998.

Property Sales

Revenue and operating income from property sales in the first nine months of 1999 were $4.6 million and $2.2 million, respectively, compared to
$24.4 million and $8.0 million, respectively in the first nine months of 1998. As part of its ongoing strategy of reinvesting the value of non-strategic timberlands, the
Partnership will continue to sell or trade properties in Oregon, Idaho and northwest Washington.

Manufacturing

Sawmill sales, excluding sales of lumber products to the wholesale division, were $202.4 million, or 34.3% of revenue in the first nine months of
1999, compared to $146.8 million, or 29.5% of revenue in the comparable period of 1998.

Operating
income from manufacturing increased to $23.3 million in the first nine months of 1999 compared to $60,000 in the comparable period of 1998. The increase is primarily
a result of efficiencies, cost reductions realized at existing mills, production increases, increases in average sales prices and exceeding production goals at the new Bonners Ferry and Port Angeles
mills.
17

Average
prices received for all lumber, including sales to the wholesale division, in the various regions were as follows:

|                 |  | Nine Months Ended September 30, |         |  |  
|---------------- |  | ------------------------------- | ------- |  | -
|
|
|Oregon           |  | $                               | 641/MBF |  | $
|Inland           |  | $                               | 389/MBF |  | $
|Washington       |  | $                               | 320/MBF |  | $
|Weighted average |  | $                               | 457/MBF |  | $

Lumber
prices are generally higher for the nine month period ended September 30, 1999 than for the comparable period in 1998. Average prices are often influenced by the
species manufactured, particularly at the Inland mills. In 1999, the Inland mills manufactured only an incidental volume of cedar and pine compared to about 20% in 1998. These species have average
sales prices that exceed the average sales prices of currently manufactured species by $200 to $300 per MBF.

Total
lumber sales volumes increased 42.7% in the first nine months of 1999 to 434.5 MMBF compared to 304.5 MMBF in the comparable period of 1998. Sales volumes
from the various regions were as follows (in MBF):

|           |  | Nine Months Ended September 30, |  |         | 
|---------- |  | ------------------------------- |  | ------- | 
|
|
|Oregon     |  | 145,324                         |  | 134,886 | 
|Inland     |  | 186,816                         |  | 143,776 | 
|Washington |  | 102,329                         |  | 25,802  | 
|           |  |                                 |  |         | 
|Total      |  | 434,469                         |  | 304,464 | 
|           |  |                                 |  |         | 

The
increases in the Inland and Washington regions are primarily as a result of production from the newly constructed Bonners Ferry and Port Angeles sawmills that came on line during
the fourth quarter of 1998.

By-product
revenues accounted for 2.2% of revenue in the first nine months of 1999, compared to 1.3% of revenue in the comparable period of 1998. Residual wood chip prices
increased to $68 per bone dry unit (BDU) in the first nine months of 1999 compared to $57/BDU in the comparable period of 1998. Prices are expected to remain at, or slightly above, current levels
throughout the fourth quarter of 1999.

Wholesale Marketing

External revenues from sales by the Partnership's wholesale operations consisted of lumber and other wood products, most of which were not manufactured by the
Partnership. Sales totaled $298.7 million, or 50.6% of revenue in the first nine months of 1999, compared to $191.4 million, or 38.5% of revenue in the comparable period of 1998.
Operating income from wholesale operations increased 30.0% to $9.3 million in the first nine months of 1999 compared to $7.2 million in the comparable period of 1998. The
increases in revenue and operating income are a result of the acquisition of Desert Lumber and Reno Lumber in March 1999, which added two new contractor service yards, as well as internal
growth at existing service yards. Increases in operating income were partially offset by a sharp downturn in both lumber and panel markets in the second half of the third quarter, which led to lower
profits on new jobs that were being supplied with inventory purchased at higher prices.
18

USFS Exchange of Timberlands

On June 8, 1999 the Partnership exchanged 35,283 acres of timberland in central Oregon with the U.S. Forest Service for 31,220 acres also located
in central Oregon. The Partnership gave timberland
with an appraised value of approximately $39.2 million and received timberland of like value. There was no impact on the financial position, results of operations or cash flows as a result of
the exchange. The exchange allowed the Partnership to block up non-contiguous parcels of timberland, which will allow for more efficient management of the tree farm.

Year 2000 Issues

Many currently installed computer systems and software products are coded to accept only two digit entries in the date code field. As the year 2000 approaches,
these code fields will need to accept four digit entries to distinguish years beginning with "19" from those beginning with "20". As a result, computer systems and/or software products used by many
companies may need to be upgraded to comply with such year 2000 requirements.

The
Partnership has established a plan to address the year 2000 issue, which consists of the following phases:



For
implementation of its year 2000 Plan, the Partnership has divided its computer systems and equipment in the following categories:



The
Partnership has completed its identification and assessment of all operating systems and data servers, business and financial reporting systems, personal computer and peripheral
equipment and communication and other facility support systems. The majority of all business and financial reporting systems have been replaced with third-party, year 2000 compliant software. The
balance of the financial reporting systems have been modified to be year 2000 compliant. All other non-manufacturing systems have been or are in the process of being modified for year
2000. The identification, assessment, modification and testing of manufacturing systems has been completed.

Total
costs incurred to date, and expected to be incurred, with respect to compliance with year 2000 issues, excluding the cost of new software that was scheduled for replacement, has
been and will be less than $200,000.

The
Partnership does not anticipate major interruptions in its business as a result of year 2000 issues. The Partnership is, however, dependent on systems outside of its control such
as power, transportation,
financial services and telecommunications. The Partnership has inquired of its major critical vendors and suppliers and has received responses confirming their year 2000 readiness. There can be no
assurance that the Partnership will not experience disruptions that would have a negative effect on its operations and financial condition. The Partnership believes that the financial impact of an
outside system failure would be mitigated to some degree by the geographic distribution of its operations and it is unlikely that all areas would be impacted in the same manner. The Partnership will
continue to monitor the progress that providers of critical outside systems make in achieving year 2000 compliance and evaluate the need for
19implementing contingency plans. Such plans could include increasing levels of inventory, arranging for alternative transportation and shifting production to unaffected operations.

The
estimates and conclusions herein contain forward-looking statements and are based on management's best estimates of future events. These forward-looking statements are based on
numerous assumptions regarding future events including, among others, expectations regarding third-party modification plans, the nature and amount of testing required by the Partnership, continued
availability of trained personnel and other resources, as well as expectations with respect to the Partnership's ability to discover and correct the potential year 2000 sensitive problems which could
have a serious impact on specific facilities, and the ability of suppliers to bring their systems into year 2000 compliance.

The
above disclosure is a "Year 2000 Readiness Disclosure" made with the intention to comply fully with the Year 2000 Information and Readiness Disclosure Act of 1998,
Pub. L. No. 105-271, 112 Stat, 2386, signed into law October 19, 1998. All statements made herein shall be construed within the confines of that
Act. To the extent any reader of the above Year 2000 Readiness Disclosure is other than an investor or potential investor in the Partnership equity or debt securities, this disclosure is made
for the sole purpose of communicating or disclosing information aimed at correcting, helping to correct and avoiding Year 2000 failures.

New Accounting Pronouncement

In June 1999, the FASB issued Statement of Financial Accounting Standards No. 137, "Accounting for Derivative Instruments and Hedging Activities"
("SFAS 137"). SFAS 137 is an amendment to Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities". SFAS 137
establishes accounting and reporting standards for all derivative instruments. SFAS 137 is effective for fiscal years beginning after June 15, 2000. The Partnership does not currently
have any derivative instruments and, accordingly, does not expect the adoption of SFAS 137 to have an impact on its financial position or results of operations.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

None.
20

## 

PART IIOTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K

|Exhibit No. and Description
|---------------------------
|10.1                       
|10.2                       
|10.3                       
|10.4                       
|10.5                       
|10.6                       
|10.7                       
|10.8                       
|10.9                       
|27                         

There
were no reports on Form 8-K filed during the quarter ended September 30, 1999.
21

## 

SIGNATURES

Pursuant to the requirements 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.

|Date: November 10, 1999 |  | CROWN PACIFIC PARTNERS, L.P.
|----------------------- |  | ----------------------------
|                        |  | By:                         
|                        |  | By:                         

22

## QuickLinks

INDEX

PART I. FINANCIAL INFORMATION

PART IIOTHER INFORMATION

SIGNATURES