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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

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FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2000

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

93-1161833(State or other jurisdiction
of incorporation or organization)

(I.R.S. Employer Identification No.)121 SW Morrison Street, Suite 1500,
Portland, Oregon

97204(Address of principal executive offices)

(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

30,410,906(Class)

(Outstanding at August 14, 2000)


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## 

CROWN PACIFIC PARTNERS, L.P.  FORM 10-Q  INDEX

|                             |  |                                                                                           |  | Page
|---------------------------- |  | ----------------------------------------------------------------------------------------- |  | ----
|PART IFINANCIAL INFORMATION |  |                                                                                          
|Item 1.                      |  | Financial Statements                                                                      |  |     
|                             |  | Consolidated Statement of IncomeThree and Six Month Periods Ended June 30, 2000 and 1999 |  | 2   
|                             |  | Consolidated Balance SheetJune 30, 2000 and December 31, 1999                            |  | 4   
|                             |  | Consolidated Statement of Cash FlowsSix Months Ended June 30, 2000 and 1999              |  | 5   
|                             |  | Notes to Consolidated Financial Statements                                                |  | 6   
|Item 2.                      |  | Management's Discussion and Analysis of Financial Condition and Results of Operations     |  | 9   
|Item 3.                      |  | Quantitative and Qualitative Disclosures About Market Risk                                |  | 17  
|PART IIOTHER INFORMATION    |  |                                                                                          
|Item 6.                      |  | Exhibits and Reports on Form 8-K                                                          |  | 18  
|Signatures                   |  | 19                                                                                       
|                             |  |                                                                                           |  |     

1

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## 

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 June 30,
|------------------------------------- | -------------------------------------------- | -----------------------------------
|
|Revenues                              |                                              | $                                  
|Operating costs:                      |                                              |                                    
|                                      | Cost of products sold                        |                                    
|                                      | Selling, general and administrative expenses |                                    
|                                      |                                              |                                    
|Operating income                      |                                              |                                    
|Interest expense                      |                                              |                                    
|Amortization of debt issuance costs   |                                              |                                    
|Other (income) expense, net           |                                              |                                    
|                                      |                                              |                                    
|Net income                            |                                              | $                                  
|                                      |                                              |                                    
|Basic and diluted net income per unit |                                              | $                                  
|                                      |                                              |                                    
|Weighted average units outstanding    |                                              |                                    
|                                      |                                              |                                    

See
accompanying Notes to Consolidated Financial Statements.

2

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Crown Pacific Partners, L.P.

Consolidated Statement of Income

(In thousands, except unit and per unit data)

(Unaudited)

|                                      |                                              | For the Six Months
Ended June 30,
|------------------------------------- | -------------------------------------------- | ---------------------------------
|
|Revenues                              |                                              | $                                
|Operating costs:                      |                                              |                                  
|                                      | Cost of products sold                        |                                  
|                                      | Selling, general and administrative expenses |                                  
|                                      |                                              |                                  
|Operating income                      |                                              |                                  
|Interest expense                      |                                              |                                  
|Amortization of debt issuance costs   |                                              |                                  
|Other (income) expense, net           |                                              |                                  
|                                      |                                              |                                  
|Net income                            |                                              | $                                
|                                      |                                              |                                  
|Basic and diluted net income per unit |                                              | $                                
|                                      |                                              |                                  
|Weighted average units outstanding    |                                              |                                  
|                                      |                                              |                                  

See
accompanying Notes to Consolidated Financial Statements.

3

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Crown Pacific Partners, L.P.

Consolidated Balance Sheet

(In thousands, except unit data)

|                                                                                      |                                                                                                                     | June 30,
2000
(Unaudited)               |         | December 31,
1999
|------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------- | --------------------------------------- | ------- | -----------------
|Assets                                                                               
|Current assets:                                                                       |                                                                                                                     |                                         |         |                  
|                                                                                      | Cash and cash equivalents                                                                                           |                                         | $       | 25,068           
|                                                                                      | Accounts receivable, net of allowances for doubtful accounts of $1,192 and $1,091                                   |                                         |         | 106,706          
|                                                                                      | Notes receivable                                                                                                    |                                         |         | 3,309            
|                                                                                      | Inventories                                                                                                         |                                         |         | 70,166           
|                                                                                      | Deposits on timber cutting contracts                                                                                |                                         |         | 2,955            
|                                                                                      | Prepaid and other current assets                                                                                    |                                         |         | 1,953            
|                                                                                      |                                                                                                                     |                                         |         |                  
|                                                                                      |                                                                                                                     | Total current assets                    |         |                  
|Property, plant and equipment, net of accumulated depreciation of $40,004 and $35,863 |                                                                                                                     |                                         | 66,583  |                  
|Timber, timberlands and roads, net                                                    |                                                                                                                     |                                         | 632,376 |                  
|Intangible assets, net of accumulated amortization                                    |                                                                                                                     |                                         | 34,198  |                  
|Other assets                                                                          |                                                                                                                     |                                         | 21,886  |                  
|                                                                                      |                                                                                                                     |                                         |         |                  
|                                                                                      |                                                                                                                     | Total assets                            |         | $                
|                                                                                      |                                                                                                                     |                                         |         |                  
|Liabilities and Partners' Capital                                                    
|Current liabilities:                                                                  |                                                                                                                     |                                         |         |                  
|                                                                                      | Notes payable                                                                                                       |                                         | $       | 28,000           
|                                                                                      | Accounts payable                                                                                                    |                                         |         | 45,287           
|                                                                                      | Accrued expenses                                                                                                    |                                         |         | 20,057           
|                                                                                      | Accrued interest                                                                                                    |                                         |         | 10,512           
|                                                                                      | Current portion of long-term debt                                                                                   |                                         |         | 162              
|                                                                                      |                                                                                                                     |                                         |         |                  
|                                                                                      |                                                                                                                     | Total current liabilities               |         |                  
|Long-term debt                                                                        |                                                                                                                     |                                         | 671,055 |                  
|Other non-current liabilities                                                         |                                                                                                                     |                                         | 1,476   |                  
|                                                                                      |                                                                                                                     |                                         |         |                  
|                                                                                      |                                                                                                                     |                                         | 776,549 |                  
|                                                                                      |                                                                                                                     |                                         |         |                  
|Commitments and contingent liabilities                                                |                                                                                                                     |                                         |         |                  
|Partners' capital:                                                                    |                                                                                                                     |                                         |         |                  
|                                                                                      | General partners                                                                                                    |                                         |         | 816              
|                                                                                      | Limited partners (30,410,906 and 30,301,248 units outstanding at June 30, 2000 and December 31, 1999, respectively) |                                         |         | 187,835          
|                                                                                      |                                                                                                                     |                                         |         |                  
|                                                                                      |                                                                                                                     | Total partners' capital                 |         |                  
|                                                                                      |                                                                                                                     |                                         |         |                  
|                                                                                      |                                                                                                                     | Total liabilities and partners' capital |         | $                
|                                                                                      |                                                                                                                     |                                         |         |                  

See
accompanying Notes to Consolidated Financial Statements.

4

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Crown Pacific Partners, L.P.

Consolidated Statement of Cash Flows

(In thousands)

(Unaudited)

|                                                     |                                                                                   | For the Six Months
Ended June 30,        |         
|---------------------------------------------------- | --------------------------------------------------------------------------------- | ---------------------------------------- | --------
|
|Cash flows from operating activities:                |                                                                                   |                                          |         
|                                                     | Net income                                                                        |                                          | $       
|                                                     | Adjustments to reconcile net income to net cash provided by operating activities: |                                          |         
|                                                     |                                                                                   | Depletion, depreciation and amortization |         
|                                                     |                                                                                   | Gain on sale of property                 |         
|                                                     |                                                                                   | Other                                    |         
|                                                     | Net change in current assets and current liabilities:                             |                                          |         
|                                                     |                                                                                   | Accounts and notes receivable            |         
|                                                     |                                                                                   | Inventories                              |         
|                                                     |                                                                                   | Deposits on timber cutting contracts     |         
|                                                     |                                                                                   | Prepaid and other current assets         |         
|                                                     |                                                                                   | Accounts payable and accrued expenses    |         
|                                                     |                                                                                   |                                          |         
|Net cash provided by operating activities            |                                                                                   |                                          | 13,630  
|                                                     |                                                                                   |                                          |         
|Cash flows from investing activities:                |                                                                                   |                                          |         
|                                                     | Additions to timberlands                                                          |                                          |         
|                                                     | Additions to timber cutting rights                                                |                                          |         
|                                                     | Additions to equipment                                                            |                                          |         
|                                                     | Proceeds from sales of property                                                   |                                          |         
|                                                     | Deposit on future asset sale                                                      |                                          |         
|                                                     | Principal payments received on notes                                              |                                          |         
|                                                     | Purchase of businesses                                                            |                                          |         
|                                                     | Other investing activities                                                        |                                          |         
|                                                     |                                                                                   |                                          |         
|Net cash used in investing activities                |                                                                                   |                                          | (102,975
|                                                     |                                                                                   |                                          |         
|Cash flows from financing activities:                |                                                                                   |                                          |         
|                                                     | Net increase in short-term borrowings                                             |                                          |         
|                                                     | Proceeds from issuance of long-term debt                                          |                                          |         
|                                                     | Repayments of long-term debt                                                      |                                          |         
|                                                     | Contributions of capital                                                          |                                          |         
|                                                     | Distributions to partners                                                         |                                          |         
|                                                     | Debt and equity issuance costs                                                    |                                          |         
|                                                     | Other financing activities                                                        |                                          |         
|                                                     |                                                                                   |                                          |         
|Net cash used in financing activities                |                                                                                   |                                          | 92,797  
|                                                     |                                                                                   |                                          |         
|Net increase (decrease) in cash and cash equivalents |                                                                                   |                                          | 3,452   
|Cash and cash equivalents at beginning of period     |                                                                                   |                                          | 21,616  
|                                                     |                                                                                   |                                          |         
|Cash and cash equivalents at end of period           |                                                                                   | $                                        | 25,068  
|                                                     |                                                                                   |                                          |         

See accompanying Notes to Consolidated Financial Statements.

5

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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 1999 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 six-month periods ended June 30, 2000 and 1999 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 units outstanding divided into net income, after adjusting for the General Partner
interest.The General Partner income allocation was $70 and $99 for the three months ended June 30, 2000 and 1999, respectively, and $152
and $176 for the six months ended June 30, 2000 and 1999, respectively. There is no significant difference between basic and diluted earnings per unit.

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:

June 30, 2000

December 31, 1999Lumber

$
13,018

$
9,103Logs


20,779


22,732Supplies


3,431


3,437LIFO reserve


1,967


2,017Manufacturing inventory


39,195


37,289Wholesale products


30,971


18,485Total

$
70,166

$
55,774


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 increase in depletion costs
for the first six months of 2000 of approximately $0.5 million, or $0.02 per unit, and a net decrease in depletion costs for the first six months of 1999 of approximately $0.6 million,
or $0.02 per unit, with no impact on cash flow.

6

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Note 4:  Supplemental Cash Flow Information

Supplemental disclosure of cash flow information is as follows:

Six Months Ended June 30,2000

1999Cash paid during the period for interest

$
27,930

$
23,967Business assets acquired with debt and equity


2,000


19,200


Note 5:  Acquisitions

On January 6, 2000 Crown Pacific acquired Cheshire Sales Company Inc. of Albuquerque, New Mexico for $5.5 million, consisting of
$3.7 million in cash, $1.2 million in Partnership units and $0.6 million in assumed debt. The acquisition was accounted for as a purchase. Pro forma results of operations are not
significantly different from actual results of operations for the first six months of 2000 and 1999.

On
January 14, 2000 Crown Pacific acquired 91 thousand acres of timberland in Idaho from Plum Creek Timber Company for $73.4 million. The acquisition was financed
using the Partnership's Acquisition Line of Credit.

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. Corporate and Other includes general corporate overhead and expenses (such as LIFO) not allocated to the segments and miscellaneous operations not significant
enough to be classified as a separate segment. The Partnership does not show assets by segment, as historic costs are not used by management to allocate resources or assess performance. Transfers
between segments are generally at prices which management believes reflect current market prices.

7

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The following summarizes the Partnership's segment information:

Three Months Ended June 30,

Six Months Ended June 30,Revenues (in thousands)

2000

1999

2000

1999Timberlands:Trade

$
33,982

$
24,025

$
68,978

$
57,119Intersegment


44,979


44,803


108,413


84,16678,961


68,828


177,391


141,285Manufacturing:Trade


55,977


69,779


123,912


125,064Intersegment


3,833


3,419


7,515


7,06559,810


73,198


131,427


132,129Wholesale Marketing:Trade


120,515


101,916


246,212


182,090Intersegment


12,276


7,246


24,256


14,957132,791


109,162


270,468


197,047Corporate and Other:Trade


3,791


3,350


6,886


7,073Intersegment


888


1,131


1,703


1,9294,679


4,481


8,589


9,002Total:Total Revenue


276,241


255,669


587,875


479,463Less Intersegment


(61,976
)

(56,599
)

(141,887
)

(108,117
)Net Revenue

$
214,265

$
199,070

$
445,988

$
371,346


Three Months Ended June 30,

Six Months Ended June 30,Operating income (in thousands)

2000

1999

2000

1999Timberlands

$
19,942

$
14,106

$
38,317

$
30,836Manufacturing


463


8,929


5,482


11,503Wholesale


3,635


3,357


8,265


6,658Corporate and Other


(2,509
)

(3,752
)

(8,326
)

(6,230
)Operating Income


21,531


22,640


43,738


42,767Interest Expense


(14,677
)

(12,183
)

(28,803
)

(24,320
)Other


131


(556
)

313


(851
)Net Income

$
6,985

$
9,901

$
15,248

$
17,596


Note 7:  Related Party Transaction

On June 30, 2000, the Partnership completed a property sale with an unrelated party for total proceeds of $5.5 million. Bridge financing was
provided to the buyer by an officer of the Partnership. The Partnership is not responsible or liable for any amount of the resulting note payable.

Note 8:  Distributions

On April 18, 2000, the Board of Control authorized the Partnership to make a distribution of $0.564 per unit. The total distribution was
$17.5 million (including $355 thousand to the General Partners) and was paid on May 15, 2000 to unitholders of record on May 5, 2000.

Note 9:  Subsequent Event

On July 18, 2000, the Board of Control authorized the Partnership to make a distribution of $0.564 per unit. The total distribution will be
$17.5 million (including $355 thousand to the General Partners) and will be paid on August 14, 2000 to unitholders of record on August 4, 2000.

8

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## 

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 reports filed from time to time on forms
10-K, 8-K and 10-Q and reports to unitholders, 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.

Cash
provided by operating activities was $13.6 million for the six-month period ended June 30, 2000 and resulted primarily from net income of
$15.2 million and net non-cash expenses of $20.9 million, offset by an increase in accounts and notes receivable of $11.0 million and an increase in inventories of
$12.6 million. Working capital decreased to $106.1 million at June 30, 2000 compared to $111.3 million at December 31, 1999.

Net
cash used in investing activities of $103.0 million resulted primarily from the acquisition of 91 thousand acres of timberland in Idaho from Plum Creek Timber
Company for $73.4 million, the acquisition of Cheshire Sales Company, Inc. for $3.5 million and the construction of a new small log line at the Gilchrist saw mill and other
additions to timberlands, equipment and timber cutting rights of $39.3 million.

Net
cash provided by financing activities of $92.8 million resulted primarily from a $28.0 million net increase in short-term borrowings and
$99.4 million net increase in long-term debt, offset by distributions to partners of $35.0 million.

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, will be significant. Additions to property, plant and equipment totaled $19.6 million in the first six months of 2000 and are expected to total approximately
$37.0 million during 2000. Additions to timber and timberland purchases are evaluated as opportunities arise and totaled $93.1 million in the first six months of 2000. 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

9

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borrowings. The Partnership expects to make cash distributions from its current funds and from cash generated by operating activities. Property and stumpage sales are expected to comprise a
significant portion of the Partnership's operating income during the remainder of 2000 and 2001 if lumber prices remain at present levels.

The
Partnership plans to spend approximately $20.0 million (included in the $37.0 million total above) in 2000 on a new small log line at its Gilchrist mill, which is
being funded with bank financing. In addition, the Partnership closed its acquisition of approximately 91 thousand acres of northern Idaho timberlands in January 2000 for
$73.4 million (included in the $93.1 million total above), which was funded with bank borrowings under the Partnership's acquisition facility.

The
Partnership has a $58 million revolving credit facility with a group of banks for working capital purposes and stand-by letters of credit that expire on
December 1, 2002. The revolving credit facility was increased by $2.0 million in January 2000 due to an additional bank joining the credit group. The credit facility bears a
floating rate and is unsecured. At June 30, 2000, the Partnership had $28.0 million outstanding under this facility, with a weighted average interest rate of 8.10%.

The
Partnership has a revolving acquisition line of credit with a group of banks to provide for a $232 million, three-year revolving line of credit for the
acquisition of additional timber, timberlands and related assets and capital expenditures. The acquisition line was increased by $8.0 million in January 2000 due to an additional bank
joining the credit group. The acquisition facility bears a floating rate of interest, is unsecured and expires December 1, 2002. 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 June 30, 2000, the Partnership had $182.3 million outstanding under this facility, with a weighted average interest rate of 8.20%.

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. The senior notes are redeemable prior to maturity, subject to a premium on redemption based on
interest rates of U.S. Treasury securities having a similar average maturity as the senior notes, plus 50 basis points.

C.P.
Air, a subsidiary of the Partnership, borrowed $2.7 million in January 2000 to finance a new aircraft. The debt bears interest at 8.25%, is secured by the aircraft
and requires monthly payments of $26,000 including interest.

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 June 30, 2000.

Results of Operations
Three Months Ended June 30, 2000 compared to Three Months Ended June 30, 1999

General

Net revenues during the second quarter ended June 30, 2000 increased 7.6% to $214.3 million, from $199.1 million in the same quarter of
1999. The $15.2 million increase reflects improved sales from the Partnership's timberland and wholesale marketing operations, offset in part by a decrease in sales from the manufacturing
operations.

Cost
of sales as a percentage of sales increased to 85.4% in the second quarter of 2000, compared to 83.4% in the same quarter of 1999. The increase is primarily the result of a
larger portion of the Partnership's revenue being derived from its wholesale operations, which operate at a lower margin,

10

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increased purchased log volume (which are typically higher cost than fee logs) and significantly lower lumber sales realizations, which were partially offset by lower per unit manufacturing costs.

Selling,
general and administrative expenses ("SG&A") decreased $0.7 million to $9.8 million (4.6% of revenues) in the second quarter of 2000, compared to
$10.5 million (5.3% of revenues) in the second quarter of 1999. The year over year decrease reflects a number of factors. The second quarter of 1999 SG&A includes an accrual for deferred
compensation and the write off of certain bad debts. The second quarter of 2000 SG&A reflects the absence of these expenses plus a downward adjustment in accrued bonus and profit sharing expenses.

Interest
expense increased $2.5 million to $14.7 million in the second quarter of 2000, from $12.2 million in the second quarter of 1999. The increase is a result
of higher debt balances in the first six months of 2000 due primarily to the purchase of the timberlands from Plum Creek in the first quarter of 2000 for $73.4 million, which was financed using
the Partnership's acquisition line of credit.

Other
income was $0.4 million in the second quarter of 2000 compared to an expense of $0.4 million in the second quarter of 1999. The 1999 expense amount includes a
$0.9 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 log sales, including property and stumpage sales, increased 41.4% to $34.0 million, or 15.9% of revenue in the second quarter of 2000,
compared to $24.0 million, or 12.1% of revenue in the second quarter of 1999. The higher revenues reflect increased property sales, stumpage and higher log sales realization. Internal sales of
logs to manufacturing remained relatively flat at $45.0 million in the second quarter of 2000 compared to $44.8 million in the second quarter of 1999 primarily as a result of a 1.4%
increase in volume, offset by a 1.1% decrease in realization. The increase in volume is related to increased consumption at the Coeur d'Alene, Idaho sawmill and the decrease in realization is
attributable to a slight mix change in logs delivered to the mills.

Overall
operating income from timberlands, including property sales, increased 41.4% to $19.9 million in the second quarter of 2000 from $14.1 million in the second
quarter of 1999, primarily as a result property sales income of $5.6 million in the second quarter of 2000 compared to $62 thousand in the second quarter of 1999 and a 14.1% increase in
average sales realization compared to the second quarter of 1999, which were partially offset by higher purchased log costs and increased administrative expenses. The increased sales realization is
due to a combination of mix and market pricing improvements for the grade and sorts of external logs sold during the second quarter of 2000.

Domestic Log Sales

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

Quarter Ended June 30,% ChangeTree Farm

2000

1999Oregon

$
490/MBF

$
403/MBF

21.6
%Inland

$
350/MBF

$
375/MBF

(6.7
)%Hamilton

$
400/MBF

$
337/MBF

18.7
%Olympic

$
460/MBF

$
402/MBF

14.4
%Weighted average

$
430/MBF

$
369/MBF

16.5
%


The
decrease at the Inland tree farm is a result of increased stumpage sales (which typically have lower realizations but higher margins), which were partially offset by higher market
prices for delivered logs.

11

---

Domestic external log sales volumes increased 2.4% in the second quarter of 2000 to 51.1 million board feet (MMBF), compared to 49.9 MMBF in the same quarter of 1999, primarily
as a result of increased stumpage sales at the Inland and Oregon tree farms, offset in part by decreased stumpage sales at the Olympic and Hamilton tree farms. The external volume from each of the
Partnership's tree farms was as follows (in thousands of board feet (MBF)):

Quarter Ended June 30,% ChangeTree Farm

2000

1999Oregon tree farm

16,201

4,719

243.3
%Inland tree farm

11,785

11,995

(1.8
)%Hamilton tree farm

12,036

20,071

(40.0
)%Olympic tree farm

11,086

13,133

(15.6
)%Total

51,108

49,918

2.4
%


Export Log Sales

Sales of logs to customers involved in exporting activities (included in total log sales above) were approximately $1.0 million, or 0.5% of sales in the
second quarter of 2000, compared to $1.8 million, or 0.9% of sales for the same quarter of 1999. Prices received for export logs increased 6.1% to $623/MBF while sales volumes decreased 46.5%
to 1.6 MMBF in the second quarter of 2000 from levels experienced in the same quarter of 1999. The increase in average realization reflects an improved sales mix, while the decrease in volume is a
result of more sales and consumption of the Partnership's logs to internal and other domestic purchasers.

Property Sales

Revenue and operating income from property sales in the second quarter of 2000 were $8.4 million and $5.6 million, respectively, compared to
$0.1 million and $0.06 million, respectively in the second quarter of 1999. Property and stumpage sales are expected to comprise a significant portion of the Partnership's operating
income during the remainder of 2000 and 2001 if lumber prices remain at present levels.

Manufacturing

Sawmill sales, excluding sales of lumber products through the wholesale division, were $56.0 million, or 26.1% of sales in the second quarter of 2000,
compared to $69.8 million, or 35.1% of sales in the same quarter of 1999. The decreased revenues reflect lower shipments, sales realizations and wood chip by-product prices.

Operating
income from manufacturing decreased 94.8% to $0.5 million in the second quarter of 2000 from $8.9 million in the second quarter of 1999. The decrease is
primarily a result of a 4.8% decrease in lumber sales volume and a 17.0% decrease in overall sales realization, offset in part by lower unit manufacturing costs.

Average
external prices received for lumber in the various regions were as follows:

Quarter Ended June 30,% ChangeRegion

2000

1999Oregon

$
556/MBF

$
646/MBF

(14.0
)%Inland

$
332/MBF

$
401/MBF

(17.1
)%Washington

$
290/MBF

$
318/MBF

(9.0
)%Weighted average

$
382/MBF

$
461/MBF

(17.0
)%


12

---

External sales volumes from the various regions were as follows (in MBF):

Quarter Ended June 30,% ChangeRegion

2000

1999Oregon

36,496

47,382

(23.0
)%Inland

64,925

56,153

15.6
%Washington

33,193

37,918

(12.5
)%Total

134,614

141,453

(4.8
)%


The
increased sales volume at the Inland region is primarily the result of improved production and operating efficiencies at the Coeur d'Alene sawmill. Sales volume in the Oregon
region was negatively impacted in the second quarter of 2000 by the indefinite closure of the Prineville sawmill and downtime at the Gilchrist sawmill to accommodate the scheduled installation of the
new $20 million small log line. The large log side was restarted in mid July 2000 and the new small log side is scheduled to commence production late in the third quarter of 2000. The
lower Washington region volume reflects soft demand and the Partnership's decision not to sell into declining markets.

Wood
chip revenues accounted for 1.8% of sales in the second quarter of 2000, compared to 2.4% of sales in the same quarter of 1999. Residual wood chip volume increased 6.1% in the
second quarter of 2000 compared to the second quarter of 1999, while prices decreased to $67/BDU in the second quarter of 2000 compared to $70/BDU in the second quarter of 1999. The lower average
realization reflects increased competition in the Inland Region, while the higher sales volume reflects increased residual chip production in both the Inland and Washington regions.

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 $120.5 million, or 56.2% of sales in the second quarter of 2000, compared to $101.9 million, or 51.2% of sales in the second quarter of 1999. Operating income
from wholesale operations increased 8.3% to $3.6 million in the second quarter of 2000 from $3.4 million in the second quarter of 1999. The increased operating income reflects improved
profit and margin from the Partnership's existing operation and the addition of the New Mexico operation in January 2000. Overall profit margins decreased to 3.0% in the second quarter of 2000
compared to 3.3% in the second quarter of 1999 as a result of lower lumber prices.

Results of Operations
Six Months Ended June 30, 2000 compared to Six Months Ended June 30, 1999

General

Net revenues during the six months ended June 30, 2000 increased 20.1% to $446.0 million, from $371.3 million in the same period of 1999.
The increase reflects improved sales from the Partnership's timberland, manufacturing and wholesale marketing operations.

Cost
of sales as a percentage of sales increased to 85.4% in the first six months of 2000, compared to 83.2% in the same period of 1999. The increase is primarily the result of a
larger portion of the Partnership's revenue being derived from its wholesale operations, which operate at a lower margin, increased purchased log volume (which are typically higher cost than fee logs)
and significantly lower lumber sales prices, which were only partially offset by lower per unit manufacturing costs.

Selling,
general and administrative expenses increased $1.8 million to $21.3 million (4.8% of revenues) in the first six months of 2000, from $19.5 million (5.2%
of revenues) in the same period of 1999. The increase is primarily a result of the growth of the wholesale operations, higher corporate overhead expenses and costs incurred in relation to the
Partnership's strategic initiative to boost unitholder value.

13

---

Interest expense increased $4.5 million to $28.8 million in the first six months of 2000, from $24.3 million in the first six months of 1999. The increase is a
result of higher debt balances in the first six months of 2000 due primarily to the purchase of the timberlands from Plum Creek in the first quarter of 2000 for $73.4 million, which was
financed using the Partnership's acquisition line of credit.

Other
income was $0.8 million in the first six months of 2000 compared to other expense of $0.5 million in the first six months of 1999. The 1999 amount 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 log sales, including property and stumpage sales, increased 20.8% to $69.0 million, or 15.5% of revenue in the first six months of 2000,
compared to $57.1 million, or 15.4% of revenue in the first six months of 1999. The higher revenues reflect increased property and stumpage sales activity. Internal sales of logs to
manufacturing increased $24.2 million to $108.4 million in the first six months of 2000 from $84.2 million in the first six months of 1999 as a result of increased demand and
utilization at all of the Partnership's mills, particularly the Bonners Ferry, Idaho and Port Angeles, Washington sawmills, and a transfer of internal ownership of log inventories to the sawmills from
the tree farms.

Overall
operating income from timberlands, including property sales, increased 24.3% to $38.3 million in the first six months of 2000 from $30.8 million in the first six
months of 1999, primarily as a result of increased property sales and a 10.7% increase in external log sales volume compared to the first six months of 1999, which were partially offset by higher
purchased log costs, lower average sales realizations and increased administrative expenses.

Domestic Log Sales

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

Six Months Ended June 30,% ChangeTree Farm

2000

1999Oregon

$
493/MBF

$
399/MBF

23.6
%Inland

$
304/MBF

$
451/MBF

(32.5
)%Hamilton

$
447/MBF

$
343/MBF

30.3
%Olympic

$
465/MBF

$
373/MBF

24.7
%Weighted average

$
397/MBF

$
389/MBF

2.1
%


Increases
at the Oregon, Hamilton and Olympic tree farms are primarily a result of higher market prices for delivered logs.

The
decrease at the Inland tree farm is a result of increased stumpage sales (which typically have lower realizations but higher margins), which were partially offset by higher market
prices for delivered logs.

Domestic
external log sales volumes increased 12.4% in the first six months of 2000 to 126.3 million board feet (MMBF), compared to 112.3 MMBF in the first six months of 1999,
primarily as a result of increased stumpage sales at the Inland and Oregon tree farms, offset in part by decreased stumpage sales

14

---

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

Six Months Ended June 30,% ChangeTree Farm

2000

1999Oregon tree farm

22,885

6,471

253.7
%Inland tree farm

54,575

34,473

58.3
%Hamilton tree farm

22,383

35,118

(36.3
)%Olympic tree farm

26,412

36,247

(27.1
)%Total

126,255

112,309

12.4
%


Export Log Sales

Sales of logs to customers involved in exporting activities (included in total log sales above) were approximately $3.2 million, or 0.7% of sales in the
first six months of 2000, compared to $3.8 million, or 1.0% of sales in the first six months of 1999. Prices received for export logs increased 6.6% to $646/MBF while sales volumes decreased
20.9% to 5.0 MMBF in the first six months of 2000 from levels experienced in the same period of 1999. The increase in average realization reflects an improved sales mix, while the decrease in volume
is a result of more sales and consumption of the Partnership's logs to internal and other domestic purchasers.

Property Sales

Revenue and operating income from property sales in the first six months of 2000 were $9.5 million and $6.3 million, respectively, compared to
$2.8 million and $1.3 million, respectively in the first six months of 1999. Property and stumpage sales are expected to comprise a significant portion of the Partnership's operating
income during the remainder of 2000 and 2001 if lumber prices remain at present levels.

Manufacturing

Sawmill sales, excluding sales of lumber products through the wholesale division, were $123.9 million, or 27.8% of sales in the first six months of
2000, compared to $125.1 million, or 33.7% of sales in the first six months of 1999. The decreased revenues primarily reflect weak lumber prices.

Operating
income from manufacturing decreased 52.3% to $5.5 million in the first six months of 2000 from $11.5 million in the first six months of 1999, primarily as a
result of lower lumber sales realizations.

Average
external prices received for lumber in the various regions were as follows:

Six Months Ended June 30,% ChangeRegion

2000

1999Oregon

$
587/MBF

$
623/MBF

(5.9
)%Inland

$
356/MBF

$
377/MBF

(5.6
)%Washington

$
304/MBF

$
305/MBF

(0.5
)%Weighted average

$
411/MBF

$
446/MBF

(7.8
)%


15

---

External lumber sales volumes increased 6.7% in the first six months of 2000 to 279.1 MMBF compared to 261.7 MMBF in the same period of 1999. External sales volumes from the various
regions were as follows (in MBF):

Six Months Ended June 30,% ChangeRegion

2000

1999Oregon

82,649

91,706

(9.9
)%Inland

127,790

106,968

19.5
%Washington

68,695

63,027

9.0
%Total

279,134

261,701

6.7
%


The
increases are primarily the result of improved production and operating efficiencies, especially at the Coeur d'Alene, Idaho, Bonners Ferry, Idaho and Port Angeles, Washington
sawmills. Sales volume in the Oregon region was negatively impacted in the second quarter of 2000 by the indefinite closure of the Prineville sawmill and downtime at the Gilchrist sawmill to
accommodate the scheduled installation of the new $20 million small log side. The large log side was restarted in mid July 2000 and the new small log side is scheduled to commence
production late in the third quarter of 2000.

Wood
chip revenues accounted for 1.7% of sales in the first six months of 2000, compared to 2.3% of sales in first six months of 1999. Residual wood chip prices decreased to $67/BDU
in the first six months of 2000 compared to $70/BDU in the first six months of 1999. The lower average realizations reflect increased competition in the Inland Region, while the higher sales volume
reflects increased residual chip production in both the Inland and Washington regions.

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 $246.2 million, or
55.2% of sales in the first six months of 2000, compared to $182.1 million, or 49.0% of sales in the first six months of 1999. Operating income from wholesale operations increased 24.1% to
$8.3 million in the first six months of 2000 from $6.7 million in the first six months of 1999. The increases in revenue and operating income are a result of higher revenues and returns
from existing operations as well as the acquisition Cheshire Sales Company Inc. in January 2000. Overall profit margins decreased to 3.4% in the first six months of 2000 compared to 3.7%
in the first six months of 1999 as a result of lower lumber prices, increased competition and proportionately more lower margin trading business.

New Accounting Pronouncements

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.

On
December 3, 1999, the Securities and Exchange Commission released Staff Accounting Bulletin No. 101 ("SAB 101"), Revenue Recognition, to provide guidance on the
recognition, presentation and disclosure of revenue in financial statements. SAB 101 outlines basic criteria that must be met before registrants may recognize revenue, including persuasive evidence of
the existence of an arrangement, the delivery of products or services, a fixed and determinable sales price and reasonable assurance of collection. As amended on June 26, 2000, SAB 101 is
effective beginning the fourth fiscal quarter of the first fiscal year beginning after December 15, 1999. The Partnership does not expect the adoption of SAB 101 to have a significant impact on
its financial position or results of operations.

16

---

In April 2000, the Financial Accounting Standards Board ("FASB") issued Interpretation No. 44,Accounting for Certain Transactions Involving
Stock Compensationan Interpretation of APB Opinion No. 25("FIN 44"). FIN 44 clarifies and modifies APB Opinion No. 25, Accounting for Stock Issued to Employees.
FIN 44 is effective for the Partnership in the fourth quarter of fiscal 2000. The Partnership has not yet
determined the effect, if any, the implementation of FIN 44 will have on its financial condition or results of operations.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

The Partnership's only financial instruments with market risk exposure are its variable rate lines of credit. At June 30, 2000, the Partnership had
$210.3 million outstanding under its lines of credit with a weighted average interest rate of 8.19%. A hypothetical 10 percent increase in interest rates to 9.01% would not have a
material impact on the Partnership's cash flows.

17

---

## 

PART IIOTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K

(a) The exhibits filed as part of this report are listed below and this list is intended to serve as the exhibit index:

Exhibit No. and Description10

Assumption Agreement dated February 18, 2000 between Crown Pacific Limited Partnership and Bank Hapoalim B.M. Incorporated by reference to the Partnership's Form 10-Q for the quarter ended March 31,
2000.27

Financial Data Schedule


(b) Reports on Form 8-K:

There were no reports on Form 8-K filed during the quarter ended June 30, 2000.

18

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## 

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: August 14, 2000 |  | CROWN PACIFIC PARTNERS, L.P.
|--------------------- |  | ----------------------------
|                      |  | By:                         
|                      |  | By:                         
|                      |  |                             

19

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