BCC 3.31.2013 10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 
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 March 31, 2013
 
 
o
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:  001-35805 
Boise Cascade Company
(Exact name of registrant as specified in its charter)
 
Delaware
20-1496201
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
 
1111 West Jefferson Street
Suite 300
Boise, Idaho 83702-5389
(Address of principal executive offices) (Zip Code)
 
(208) 384-6161
(Registrant's telephone number, including area code)


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 o     No x
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).      Yes x     No o
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer o    Accelerated filer o    Non-accelerated filer x    Smaller reporting company o
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).       Yes o     No x
 
There were 43,229,412 shares of the registrant's $0.01 par value common stock outstanding on April 29, 2013.



Table of Contents
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


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PART I—FINANCIAL INFORMATION
 
ITEM 1.
FINANCIAL STATEMENTS
 
Boise Cascade Company
Consolidated Statements of Operations
(unaudited) 
 
 
 
 
 
Three Months Ended
March 31
 
2013
 
2012
 
(thousands, except per-share data)
Sales
 

 
 

Trade
$
744,878

 
$
586,986

 
 
 
 
Costs and expenses
 

 
 

Materials, labor, and other operating expenses (excluding depreciation)
644,847

 
510,124

Depreciation and amortization
8,477

 
8,119

Selling and distribution expenses
57,004

 
53,814

General and administrative expenses
10,046

 
9,048

Other (income) expense, net
(134
)
 
(368
)
 
720,240

 
580,737

 
 
 
 
Income from operations
24,638

 
6,249

 
 
 
 
Foreign exchange gain (loss)
(80
)
 
186

Interest expense
(4,891
)
 
(4,813
)
Interest income
62

 
107

 
(4,909
)
 
(4,520
)
 
 
 
 
Income before income taxes
19,729

 
1,729

Income tax (provision) benefit
61,107

 
(61
)
Net income
$
80,836

 
$
1,668

 
 
 
 
Weighted average common shares outstanding:
 
 
 
Basic
37,569

 
29,700

Diluted
37,569

 
29,700

 
 
 
 
Net income per common share:
 
 
 
Basic
$
2.15

 
$
0.06

Diluted
$
2.15

 
$
0.06

 
See accompanying condensed notes to unaudited quarterly consolidated financial statements.


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Boise Cascade Company
Consolidated Statements of Comprehensive Income
(unaudited) 
 
Three Months Ended
March 31
 
2013
 
2012
 
(thousands)
Net income
$
80,836

 
$
1,668

Other comprehensive income, net of tax
 
 
 
  Defined benefit pension plans
 
 
 
  Amortization of actuarial loss, net of tax of $861 and $0, respectively
1,395

 
2,026

  Amortization of prior service costs and other, net of tax of $9 and $0, respectively
14

 
41

Other comprehensive income, net of tax
1,409

 
2,067

Comprehensive income
$
82,245

 
$
3,735


See accompanying condensed notes to unaudited quarterly consolidated financial statements.


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Boise Cascade Company
Consolidated Balance Sheets
(unaudited)
 
 
March 31,
2013
 
December 31,
2012
 
 
(thousands)
ASSETS
 
 

 
 

Current
 
 

 
 

Cash and cash equivalents
 
$
233,547

 
$
54,507

Receivables
 
 
 
 

Trade, less allowances of $2,776 and $2,696
 
205,575

 
134,743

Related parties
 
430

 
674

Other
 
3,905

 
6,204

Inventories
 
387,103

 
325,806

Deferred income taxes
 
19,023

 
2

Prepaid expenses and other
 
8,279

 
5,521

Total current assets
 
857,862

 
527,457

 
 
 
 
 
Property and equipment, net
 
261,221

 
265,924

Timber deposits
 
7,027

 
6,221

Deferred financing costs
 
7,441

 
7,562

Goodwill
 
12,170

 
12,170

Intangible assets
 
8,900

 
8,900

Deferred income taxes
 
48,128

 

Other assets
 
7,048

 
8,164

Total assets
 
$
1,209,797

 
$
836,398

 
See accompanying condensed notes to unaudited quarterly consolidated financial statements.


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Boise Cascade Company
Consolidated Balance Sheets (continued)
(unaudited)
 
 
March 31,
2013
 
December 31,
2012
 
 
(thousands, except per-share data)
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
 
Current
 
 
 
 
Accounts payable
 
 
 
 
Trade
 
$
216,388

 
$
140,192

Related parties
 
2,092

 
1,950

Accrued liabilities
 
 
 
 
Compensation and benefits
 
42,779

 
61,814

Interest payable
 
7,160

 
3,188

Other
 
32,692

 
29,043

 
 
301,111

 
236,187

 
 
 
 
 
Debt
 
 
 
 
Long-term debt
 
250,000

 
275,000

 
 
 
 
 
Other
 
 
 
 
Compensation and benefits
 
195,169

 
206,668

Other long-term liabilities
 
14,084

 
14,336

 
 
209,253

 
221,004

 
 
 
 
 
Redeemable equity
 

 
6,443

 
 
 
 
 
Commitments and contingent liabilities
 


 


 
 
 
 
 
Stockholders' equity
 
 
 
 
Preferred stock, $0.01 par value per share; 50,000 shares authorized, no shares issued and outstanding
 

 

Common stock, $0.01 par value per share; 300,000 shares authorized, 43,229 and 29,700 shares issued and outstanding, respectively
 
432

 
297

Additional paid-in capital
 
494,216

 
256,927

Accumulated other comprehensive loss
 
(119,820
)
 
(121,229
)
Retained earnings (accumulated deficit)
 
74,605

 
(38,231
)
Total stockholders' equity
 
449,433

 
97,764

Total liabilities and stockholders' equity
 
$
1,209,797

 
$
836,398


See accompanying condensed notes to unaudited quarterly consolidated financial statements.


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Boise Cascade Company
Consolidated Statements of Cash Flows
(unaudited)
 
 
Three Months Ended
March 31
 
 
2013
 
2012
 
 
(thousands)
Cash provided by (used for) operations
 
 
 
 
Net income
 
$
80,836

 
$
1,668

Items in net income not using (providing) cash
 
 
 
 

Depreciation and amortization, including deferred financing costs and other
 
8,888

 
8,720

Pension expense
 
2,726

 
3,235

Deferred income taxes
 
(68,018
)
 

Other
 
11

 
(428
)
Decrease (increase) in working capital, net of acquisitions
 
 
 
 

Receivables
 
(68,635
)
 
(42,486
)
Inventories
 
(61,297
)
 
(34,617
)
Prepaid expenses and other
 
(384
)
 
(196
)
Accounts payable and accrued liabilities
 
57,494

 
58,784

Pension contributions
 
(9,663
)
 
(3,941
)
Current and deferred income taxes
 
6,772

 
64

Other
 
(2,472
)
 
(764
)
Net cash used for operations
 
(53,742
)
 
(9,961
)
 
 
 
 
 
Cash provided by (used for) investment
 
 

 
 

Expenditures for property and equipment
 
(5,316
)
 
(4,727
)
Acquisitions of businesses and facilities
 

 
(2,355
)
Proceeds from sales of assets
 
489

 
88

Other
 
22

 
(1,059
)
Net cash used for investment
 
(4,805
)
 
(8,053
)
 
 
 
 
 
Cash provided by (used for) financing
 
 
 
 
Net proceeds from issuance of common stock
 
262,736

 

Issuances of long-term debt
 
55,000

 

Payments of long-term debt
 
(80,000
)
 

Financing costs
 
(149
)
 

  Net cash provided by financing
 
237,587

 

 
 
 
 
 
Net increase (decrease) in cash and cash equivalents
 
179,040

 
(18,014
)
 
 
 
 
 
Balance at beginning of the period
 
54,507

 
182,455

 
 
 
 
 
Balance at end of the period
 
$
233,547

 
$
164,441

 
See accompanying condensed notes to unaudited quarterly consolidated financial statements.


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Condensed Notes to Unaudited Quarterly Consolidated Financial Statements

1.
Nature of Operations and Consolidation
 
Nature of Operations
 
We are a building products company headquartered in Boise, Idaho. As used in this Form 10-Q, the terms "Boise Cascade," "we," and "our" refer to Boise Cascade, L.L.C., and its consolidated subsidiaries prior to our conversion to a Delaware corporation and to Boise Cascade Company and its consolidated subsidiaries on or after such conversion. On February 4, 2013, we converted to a Delaware corporation from a Delaware limited liability company by filing a certificate of conversion in Delaware. The common stock authorized and outstanding, par values, net income per share amounts, and other per-share disclosures for all periods presented have been adjusted to reflect the impact of this conversion. We are one of the largest producers of engineered wood products (EWP) and plywood in North America and a leading U.S. wholesale distributor of building products.

On February 11, 2013, we issued 13,529,412 shares of common stock in our initial public offering. Following this initial public offering, the common stock held by Boise Cascade Holdings, L.L.C. (BC Holdings) represents 68.7% of our common stock outstanding. BC Holdings is controlled by Forest Products Holdings, L.L.C. (FPH).
 
We operate our business using three reportable segments: (1) Wood Products, which manufactures and sells EWP, plywood, studs, particleboard, and ponderosa pine lumber, (2) Building Materials Distribution, which is a wholesale distributor of building materials, and (3) Corporate and Other, which includes corporate support staff services, related assets and liabilities, and foreign exchange gains and losses. For more information, see Note 11, Segment Information.
 
Consolidation
 
The accompanying quarterly consolidated financial statements have not been audited by an independent registered public accounting firm but, in the opinion of management, include all adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods presented. Except as disclosed within these condensed notes to unaudited quarterly consolidated financial statements, the adjustments made were of a normal, recurring nature. Certain information and footnote disclosures normally included in our annual consolidated financial statements have been condensed or omitted. The quarterly consolidated financial statements include the accounts of Boise Cascade and its subsidiaries after elimination of intercompany balances and transactions. Quarterly results are not necessarily indicative of results that may be expected for the full year. These condensed notes to unaudited quarterly consolidated financial statements should be read in conjunction with our 2012 Form 10-K and the other reports we file with the Securities and Exchange Commission (SEC).

2.
Summary of Significant Accounting Policies

Accounting Policies

The complete summary of significant accounting policies is included in Note 2, Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements in "Item 8. Financial Statements and Supplementary Data" in our 2012 Form 10-K.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. Such estimates include the valuation of accounts receivable, inventories, goodwill, intangible assets, and other long-lived assets; legal contingencies; guarantee obligations; indemnifications; assumptions used in retirement benefits; income taxes; and vendor and customer rebates, among others. These estimates and assumptions are based on management's best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. We adjust such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in these estimates resulting from continuing changes in the economic environment will be reflected in the consolidated financial statements in future periods.  

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Vendor and Customer Rebates and Allowances
 
We receive rebates and allowances from our vendors under a number of different programs, including vendor marketing programs. At March 31, 2013, and December 31, 2012, we had $1.7 million and $4.1 million, respectively, of vendor rebates and allowances recorded in "Receivables, Other" on our Consolidated Balance Sheets. Rebates and allowances received from our vendors are recognized as a reduction of "Materials, labor, and other operating expenses (excluding depreciation)" when the product is sold, unless the rebates and allowances are linked to a specific incremental cost to sell a vendor's product. Amounts received from vendors that are linked to specific selling and distribution expenses are recognized as a reduction of "Selling and distribution expenses" in the period the expense is incurred.

We also provide rebates to our customers and our customers' customers based on the volume of their purchases. We provide the rebates to increase the sell-through of our products. The rebates are recorded as a decrease in "Sales, Trade." At March 31, 2013, and December 31, 2012, we had $16.6 million and $19.7 million, respectively, of rebates payable to our customers recorded in "Accrued liabilities, Other" on our Consolidated Balance Sheets.

Leases
 
We lease a portion of our distribution centers as well as other property and equipment under operating leases. For purposes of determining straight-line rent expense, the lease term is calculated from the date we first take possession of the facility, including any periods of free rent and any renewal option periods we are reasonably assured of exercising. Rental expense for operating leases was $3.6 million for each of the three-month periods ended March 31, 2013 and 2012. Sublease rental income was not material in any of the periods presented.

Inventories
 
Inventories included the following (work in process was not material):
 
 
 
March 31,
2013
 
December 31,
2012
 
 
(thousands)
Finished goods and work in process
 
$
326,782

 
$
267,115

Logs
 
38,278

 
37,273

Other raw materials and supplies
 
22,043

 
21,418

 
 
$
387,103

 
$
325,806


Property and Equipment
 
Property and equipment consisted of the following asset classes:
 
 
 
March 31,
2013
 
December 31,
2012
 
 
(thousands)
Land
 
$
34,992

 
$
35,662

Buildings
 
88,306

 
88,129

Improvements
 
34,652

 
34,526

Office equipment and vehicles
 
83,573

 
80,857

Machinery and equipment
 
269,723

 
264,084

Construction in progress
 
6,268

 
11,176

 
 
517,514

 
514,434

Less accumulated depreciation
 
(256,293
)
 
(248,510
)
 
 
$
261,221

 
$
265,924



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Fair Value

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy under U.S. generally accepted accounting principles (GAAP) gives the highest priority to quoted market prices (Level 1) and the lowest priority to unobservable inputs (Level 3). In general, and where applicable, we use quoted prices in active markets for identical assets or liabilities to determine fair value (Level 1). If quoted prices in active markets for identical assets or liabilities are not available to determine fair value, we use quoted prices for similar assets and liabilities or inputs that are observable either directly or indirectly (Level 2). If quoted prices for identical or similar assets are not available or are unobservable, we may use internally developed valuation models, whose inputs include bid prices, and third-party valuations utilizing underlying asset assumptions (Level 3).

Financial Instruments
 
Our financial instruments are cash and cash equivalents, accounts receivable, accounts payable, and long-term debt. Our cash is recorded at cost, which approximates fair value, and our cash equivalents are money market funds measured at fair value. As of March 31, 2013, and December 31, 2012, we held $175.7 million and $10.6 million, respectively, in money market funds that are measured at fair value on a recurring basis using Level 1 inputs. The recorded values of accounts receivable and accounts payable approximate fair values based on their short-term nature. At March 31, 2013, the book value of our fixed-rate debt was $250.0 million, and the fair value was estimated to be $270.8 million. The difference between the book value and the fair value is derived from the difference between the period-end market interest rate and the stated rate of our fixed-rate, long-term debt. We estimated the fair value based on quoted market prices for similar traded debt (Level 2 measurement).

Concentration of Credit Risk
 
We are exposed to credit risk related to customer accounts receivable. In order to manage credit risk, we consider customer concentrations and current economic trends and monitor the creditworthiness of significant customers based on ongoing credit evaluations. At March 31, 2013, and December 31, 2012, the receivables from a single customer accounted for approximately 12% and 14%, respectively, of total receivables. No other customer accounted for 10% or more of total receivables.

New and Recently Adopted Accounting Standards
 
In February 2013, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. This ASU requires entities to disclose additional information about changes in and significant items reclassified out of accumulated other comprehensive income. We adopted the provisions of this guidance January 1, 2013, and it had no effect on our financial position and results of operations. For additional information, see Note 8, Stockholders' Equity.

In July 2012, the FASB issued ASU 2012-02, Intangibles—Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment, which gives entities the option first to assess qualitative factors to determine whether the existence of events and circumstances indicates that it is more likely than not that the indefinite-lived intangible asset is impaired. If, after assessing the totality of events and circumstances, an entity concludes that it is not more likely than not that the indefinite-lived intangible asset is impaired, the entity is not required to take further action. However, if an entity concludes otherwise, then it is required to determine the fair value of the indefinite-lived intangible asset and perform the quantitative impairment test by comparing the fair value with the carrying amount. We adopted the provisions of this guidance January 1, 2013, and it had no effect on our financial position and results of operations.

There were no other accounting standards recently issued that had or are expected to have a material impact on our consolidated financial statements and associated disclosures.

3.
Income Taxes

Income Tax Provision

On February 4, 2013, we converted from a limited liability company to a corporation. In addition, we elected to be treated as a corporation for federal and state income tax purposes effective as of January 1, 2013. Therefore, we are subject to federal and state income tax expense beginning January 1, 2013. As a limited liability company, we were treated as a disregarded entity for federal income tax purposes and, as such, were included in the income tax return for BC Holdings. Our

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income tax provision generally consisted of income taxes payable to state jurisdictions that did not allow for the income tax liability to be passed through to our former sole member as well as income taxes payable by our separate subsidiaries that are taxed as corporations. As a limited liability company, we had an effective tax rate of less than 1%. For the three months ended March 31, 2012, income tax expense was $0.1 million.

The conversion from a limited liability company to a corporation, for tax purposes, was deemed a nontaxable transfer of Boise Cascade, L.L.C., assets and liabilities to Boise Cascade Company. As a result of our conversion to a corporation, we recorded total deferred tax assets of $101.9 million and total deferred tax liabilities of $33.2 million on our Consolidated Balance Sheet, the effect of which was recorded as an income tax benefit in our Consolidated Statement of Operations. These deferred tax items largely consist of a $69.8 million deferred tax asset related to the pension liability, a $27.4 million deferred tax liability related to property and equipment, and $18.0 million of deferred tax assets related to other employee benefits. No valuation allowance was recorded on our domestic deferred tax assets, except for capital loss carryforwards of $6.1 million, as it is more likely than not that the results of future operations will generate sufficient taxable income to realize the deferred tax assets.

As a corporation, we are subject to typical corporate U.S. federal and state income tax rates, which results in a statutory tax rate of approximately 38% under current tax law. Boise Cascade Company will file tax returns as a corporation for the year ending December 31, 2013. For the three months ended March 31, 2013, excluding the discrete establishment of net deferred tax assets, we recorded $7.6 million of income tax expense and had an effective rate of 38.3%. During the three months ended March 31, 2013, the primary reason for the difference from the federal statutory income tax rate of 35% was the effect of state taxes.

A reconciliation of the statutory U.S. federal tax provision and the reported tax provision is as follows (dollars in thousands):
 
 
Three Months Ended
March 31, 2013
 
 
 
Income before income taxes
 
$
19,729

Statutory U.S. income tax rate
 
35.0
 %
 
 
 
Statutory tax provision
 
$
6,905

State taxes
 
625

Other
 
29

Total
 
$
7,559

 
 
 
Effective income tax rate excluding discrete item
 
38.3
 %
 
 
 
Recognition of beginning deferred tax balances
 
$
(68,666
)
 
 
 
Income tax benefit with discrete item
 
$
(61,107
)
 
 
 
Effective income tax rate with discrete item
 
(309.7
)%


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The income tax provision (benefit) shown in the Consolidated Statements of Operations includes the following (dollars in thousands):
 
 
Three Months Ended
March 31, 2013
 
 
 
Current income tax provision (benefit)
 
 
Federal
 
$
5,948

State
 
963

Foreign
 

Total current
 
$
6,911

 
 
 
Deferred income tax provision (benefit)
 
 
Federal
 
$
(62,348
)
State
 
(5,670
)
Foreign
 

Total deferred
 
$
(68,018
)
Income tax benefit
 
$
(61,107
)

Income Tax Uncertainties

Boise Cascade, or one of its subsidiaries, files federal income tax returns in the U.S. and Canada and various state income tax returns. The significant state jurisdictions are California, Idaho, Oregon, and Texas.

We recognize tax liabilities and adjust these liabilities when our judgment changes as a result of the evaluation of new information not previously available or as new uncertainties occur. As of March 31, 2013, we had an insignificant amount of unrecognized tax benefits recorded on our Consolidated Balance Sheets, and we do not expect a significant change to the amount of unrecognized tax benefits over the next 12 months. We had no unrecognized tax benefits recorded as of December 31, 2012.

We recognize interest and penalties related to uncertain tax positions as income tax expense in our Consolidated Statements of Operations. During each of the three months ended March 31, 2013 and 2012, we recognized an insignificant amount of interest and penalties related to taxes.

4.
Net Income Per Common Share
 
Basic net income per common share is computed by dividing net income by the weighted average number of common shares outstanding during the period. For more information about common share activity during the period, see Note 8, Stockholders' Equity. Diluted net income per common share is computed by dividing net income by the combination of other potentially dilutive weighted average common shares and the weighted average number of common shares outstanding during the period. Other potentially dilutive weighted average common shares include the dilutive effect of stock options, restricted stock units (RSUs), and performance stock units (PSUs) for each period using the treasury stock method. Under the treasury stock method, the exercise price of a share, the amount of compensation expense, if any, for future service that has not yet been recognized, and the amount of tax benefits that would be recorded in additional paid-in-capital, if any, when the share is exercised are assumed to be used to repurchase shares in the current period.

The following table sets forth the computation of basic and diluted net income per common share:


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Three Months Ended
March 31
 
2013
 
2012
 
(thousands)
Net income
$
80,836

 
$
1,668

Weighted average common shares outstanding during the period (for basic calculation)
37,569

 
29,700

Dilutive effect of other potential common shares

 

Weighted average common shares and potential common shares (for diluted calculation)
37,569

 
29,700

 
 
 
 
Net income per common share - Basic
$
2.15

 
$
0.06

Net income per common share - Diluted
$
2.15

 
$
0.06


The computation of the dilutive effect of other potential common shares excluded options, RSUs, and PSUs representing 0.1 million shares and no shares of common stock, respectively, in the three months ended March 31, 2013 and 2012. Under the treasury stock method, the inclusion of these stock awards would have been antidilutive.

5.
Debt
 
Long-term debt consisted of the following:
 
 
 
March 31,
2013
 
December 31,
2012
 
 
(thousands)
Asset-based revolving credit facility
 
$

 
$
25,000

6.375% senior notes
 
250,000

 
250,000

Long-term debt
 
$
250,000

 
$
275,000

 
Asset-Based Revolving Credit Facility

Boise Cascade and its principal operating subsidiaries, Boise Cascade Wood Products, L.L.C., and Boise Cascade Building Materials Distribution, L.L.C., are borrowers, and Boise Cascade Wood Products Holdings Corp., is guarantor, under a $300 million senior secured asset-based revolving credit facility (Revolving Credit Facility). Borrowings under the Revolving Credit Facility are constrained by a borrowing base formula dependent upon levels of eligible receivables and inventory reduced by outstanding borrowings and letters of credit (Availability).

The Revolving Credit Facility has a maturity date of July 13, 2016, and is secured by a first-priority security interest in substantially all of our assets, except for property and equipment. The proceeds of borrowings under the agreement are available for working capital and other general corporate purposes.

Interest rates under the Revolving Credit Facility are based, at the company's election, on either the London Interbank Offered Rate (LIBOR) or a base rate, as defined in the agreement, plus a spread over the index elected that ranges from 1.75% to 2.25% for loans based on LIBOR and from 0.75% to 1.25% for loans based on the base rate. The spread is determined on the basis of a pricing grid that results in a higher spread as average quarterly Availability declines. Letters of credit are subject to a fronting fee payable to the issuing bank and a fee payable to the lenders equal to the LIBOR margin rate. In addition, we are required to pay an unused commitment fee at a rate ranging from 0.375% to 0.50% per annum (based on facility utilization) of the average unused portion of the lending commitments.

The Revolving Credit Facility contains customary nonfinancial covenants, including a negative pledge covenant and restrictions on new indebtedness, investments, distributions to equity holders, asset sales, and affiliate transactions, the scope of which are dependent on the Availability existing from time to time. The Revolving Credit Facility also contains a requirement that we meet a 1:1 fixed-charge coverage ratio (FCCR) if Availability falls below the greater of $31.25 million or 12.5% of the aggregate lending commitments. Availability exceeded the minimum threshold amounts required for testing of the FCCR at all times since entering into the Revolving Credit Facility, and Availability at March 31, 2013, was $290.2 million. At March 31, 2013, our aggregate liquidity from cash and cash equivalents and unused borrowing capacity (net of the Availability threshold amount for testing of the FCCR, as applicable) under the Revolving Credit Facility totaled $523.8 million.


11

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The Revolving Credit Facility generally permits dividends only if certain conditions are met, including complying with the minimum Availability requirements and having a fixed-charge coverage ratio of 1:1 on a pro forma basis.

At March 31, 2013, and December 31, 2012, we had no borrowings and $25.0 million outstanding, respectively, under the Revolving Credit Facility and $9.8 million and $10.0 million, respectively, of letters of credit outstanding. These letters of credit and borrowings reduced our borrowing capacity under the Revolving Credit Facility by an equivalent amount. The maximum borrowings under the Revolving Credit Facility were $75.0 million during the three months ended March 31, 2013.

Senior Notes

On October 22, 2012, Boise Cascade and its wholly owned subsidiary, Boise Cascade Finance Corporation (Boise Finance and together with Boise Cascade, the Co-issuers), issued $250 million of 6.375% senior notes due November 1, 2020 (Senior Notes) through a private placement that is exempt from the registration requirements of the Securities Act of 1933, as amended (Securities Act). Interest on our Senior Notes is payable semiannually in arrears on May 1 and November 1, commencing on May 1, 2013. On March 28, 2013, in accordance with the terms of the indenture governing the Senior Notes, Boise Finance was merged with and into Boise Cascade, with Boise Cascade as the surviving entity and sole issuer of the Senior Notes. The Senior Notes are guaranteed by each of our existing and future direct or indirect domestic subsidiaries that is a guarantor or co-borrower under our Revolving Credit Facility.

On April 9, 2013, we commenced an offer to exchange any and all of our outstanding Senior Notes for a like principal amount of new 6.375% Senior Notes due 2020. The exchange offer has been registered under the Securities Act of 1933, as amended, pursuant to an effective registration statement on Form S-4 (File No. 333-187651) filed with the U.S. Securities and Exchange Commission.

Cash Paid for Interest

For the three months ended March 31, 2013 and 2012, cash payments for interest were $0.5 million and $0.3 million, respectively.

6.
Retirement and Benefit Plans
 
The following table presents the pension benefit costs:
 
 
Three Months Ended March 31
 
2013
 
2012
 
(thousands)
Service cost
$
671

 
$
1,169

Interest cost
4,642

 
4,843

Expected return on plan assets
(4,866
)
 
(4,844
)
Amortization of actuarial loss
2,256

 
2,026

Amortization of prior service costs
23

 
41

Net periodic benefit cost
$
2,726

 
$
3,235

 
In the first three months of 2013, we contributed $9.7 million in cash to the pension plans. For the remainder of 2013, we expect to make approximately $1 million in additional contributions to the pension plans.

7.
Stock-Based Compensation

In connection with our initial public offering, we adopted the 2013 Incentive Compensation Plan (2013 Incentive Plan). The 2013 Incentive Plan provides for grants of stock options, stock appreciation rights, restricted stock, other stock-based awards, other cash-based compensation, and performance awards. Directors, officers, and other employees, as well as others performing consulting or advisory services for us, are eligible for grants under the 2013 Incentive Plan. These awards are at the discretion of the Compensation Committee of our board of directors, and they vest and expire in accordance with terms established at the time of grant. All awards under the 2013 Incentive Plan are eligible to participate in dividend or dividend equivalent payments, if any, which we would accrue to be paid when the awards vest.
    

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Shares issued pursuant to awards under the 2013 Incentive Plan are from our authorized but unissued shares. The maximum number of shares approved for grant under the 2013 Incentive Plan is 3.1 million shares. As of March 31, 2013, 2.8 million shares remained available for future issuance under the 2013 Incentive Plan.

In February 2013, we granted three types of stock-based awards: stock options, performance stock units (PSUs), and restricted stock units (RSUs).

Stock Options

In February 2013, we granted 161,257 nonqualified stock options to our officers and other employees, subject to service conditions. The stock options generally vest and become exercisable on a pro rata basis over a three-year period from the date of grant. Our stock options generally have a contractual term of ten years, meaning the option must be exercised by the holder before the tenth anniversary of the grant date, subject to earlier expiration for vested options not exercised following termination of employment. No options were vested and exercisable at March 31, 2013. The following is a summary of our stock option activity:
 
 
Number of Options
 
Weighted Average Exercise Price Per Option
 
Weighted Average Remaining Contractual Life
 
Aggregate Intrinsic Value
 
 
 
 
 
 
(years)
 
(thousands)
Outstanding, December 31, 2012
 

 
$

 
 
 
 
Granted
 
161,257

 
27.19

 
 
 
 
Outstanding, March 31, 2013
 
161,257

 
$
27.19

 
9.9

 
$
1,088

Vested and expected to vest, March 31, 2013
 
132,484

 
$
27.19

 
9.9

 
$
894

Exercisable, March 31, 2013
 

 
$

 

 
$


The fair value for stock option awards was estimated at the grant date using the Black-Scholes option valuation model with the following weighted average assumptions:
 
Three Months Ended
March 31, 2013
Expected volatility
60.9
%
Expected life (in years)
6.0

Risk-free interest rate
1.0
%
Expected dividends

Weighted average fair value per option granted
$
14.87


The expected volatility of our stock price is based on the volatility of related industry stocks. As these 2013 grants were our first issuances of stock options and our equity shares have been traded for a short period of time, we did not have sufficient historical data to provide a reasonable basis upon which to estimate the expected life. Therefore, we used the simplified method as allowed by the Securities and Exchange Commission. The risk-free interest rate is based on the yields of U.S. Treasury issues with terms similar to the expected life of the options.

PSU and RSU Awards
    
In February 2013, we granted 90,124 PSUs to our officers and other employees, subject to performance and service conditions. The number of shares actually awarded will range from 0% to 200% of the target amount, depending upon the Company’s 2013 EBITDA, defined as income before interest (interest expense and interest income), income taxes, and depreciation and amortization, determined in accordance with the related grant agreement. Because the EBITDA component contains a performance condition, we record compensation expense, net of estimated forfeitures, over the requisite service period based on the most probable number of shares expected to vest. The PSUs, if earned, will vest in three equal tranches on December 31, 2013, 2014, and 2015.

In February 2013, we granted 14,161 RSUs to our directors with only service conditions. The RSUs vest over a one-year period.


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We based the fair value of PSU and RSU awards on the closing market price of our common stock on the grant date, and we record compensation expense over the awards' vesting period. Any shares not vested are forfeited.

The following summarizes the activity of our PSUs and RSUs awarded under the 2013 Incentive Plan for the three months ended March 31, 2013:
 
 
Number of shares
 
Weighted Average Grant-Date Fair Value
Unvested, December 31, 2012
 

 
$

Granted
 
104,285

 
26.65

Unvested, March 31, 2013
 
104,285

 
$
26.65


Compensation Expense

Stock-based compensation expense is recognized only for those awards that are expected to vest, with forfeitures estimated at the date of grant based on our historical experience and future expectations. We recognize the effect of adjusting the forfeiture rate for all expense amortization in the period that we change the forfeiture estimate. Most of our share-based compensation expense was recorded in "General and administrative expenses" in our Consolidated Statement of Operations. Total stock-based compensation recognized from stock options, PSUs, and RSUs, net of estimated forfeitures, was as follows:
 
 
Three Months Ended
March 31, 2013
 
 
(thousands)
Stock options
 
$
73

PSUs and RSUs
 
170

Total
 
$
243


The related tax benefit for the three months ended March 31, 2013, was $0.1 million. As of March 31, 2013, total unrecognized compensation expense related to nonvested share-based compensation arrangements was $4.5 million, net of estimated forfeitures. This expense is expected to be recognized over a weighted-average period of 2.5 years.

8.    Stockholders' Equity

On February 11, 2013, we issued 13,529,412 shares of common stock in our initial public offering. Following this initial public offering, we received proceeds of $262.7 million, after deducting underwriting discounts and commissions of approximately $19.2 million and offering expenses of approximately $2.2 million.

Upon our conversion from a limited liability company to a corporation, our certificate of incorporation authorized 300,000,000 shares of common stock and 50,000,000 shares of preferred stock. No preferred stock was issued or outstanding as of March 31, 2013 and December 31, 2012. We had 43,229,412 and 29,700,000 shares of common stock issued and outstanding as of March 31, 2013 and December 31, 2012, respectively. Each share of common stock entitles the holder to one vote on matters to be voted on by the stockholders of Boise Cascade.

See Note 3, Income Taxes, for a discussion of our conversion from a limited liability company to a corporation. The common stock authorized and outstanding, par values, net income per share amounts, and other per share disclosures for all periods presented have been adjusted to reflect the impact of this conversion. Upon this conversion, we reclassified $32.0 million of accumulated deficits through February 4, 2013, to additional paid-in capital.

Redeemable Equity

Redeemable equity represented equity units of FPH held by certain members of our senior management team, which units were redeemable at the option of the holder in the event of death or disability or the sale of a division resulting in the termination of his or her employment. We had historically classified these units outside of our permanent equity because these units were subject to mandatory redemption (and could have been subject to repayment by us) upon an event outside our control (i.e., death or disability). Following our initial public offering, we reclassified these equity units as permanent equity because we no longer have an obligation to satisfy this redemption obligation on FPH's behalf.

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Accumulated Other Comprehensive Loss

The following tables detail the changes in accumulated other comprehensive loss for the three months ended March 31, 2013 and 2012, respectively:

 
 
Accumulated Other Comprehensive Loss
 
 
(thousands)
Balance at December 31, 2012, net of tax
 
$
(121,229
)
 
Defined benefit pension plans, amounts reclassified from accumulated other comprehensive loss, net of tax of $870
 
1,409

(a)
Balance at March 31, 2013, net of tax
 
$
(119,820
)
 

 
 
Accumulated Other Comprehensive Loss
 
 
(thousands)
Balance at December 31, 2011, net of tax
 
$
(120,845
)
 
Defined benefit pension plans, amounts reclassified from accumulated other comprehensive loss, net of tax of $0
 
2,067

(a)
Balance at March 31, 2012, net of tax
 
$
(118,778
)
 
___________________________________ 
 
(a)
Represents amounts reclassified from accumulated other comprehensive loss. These amounts are included in the computation of net periodic pension cost. For additional information, see Note 6, Retirement and Benefit Plans.

9.
Outsourcing Services Agreement

Under an Outsourcing Services Agreement, Boise Inc. provides a number of corporate staff services to us at cost. These services include information technology, accounting, and human resource transactional services. The agreement, as extended, expires on February 22, 2015. The agreement automatically renews for successive one-year terms unless either party provides notice of termination to the other party at least 12 months in advance of the expiration date. The Outsourcing Services Agreement gives us (but not Boise Inc.) the right to terminate all or any portion of the services provided to us on 30 days' notice. Total expenses incurred under the Outsourcing Services Agreement were $3.9 million and $3.7 million, respectively, for the three months ended March 31, 2013 and 2012.

10.
Transactions With Related Party
 
Transactions with Louisiana Timber Procurement Company, L.L.C. (LTP) represent the only significant related-party activity recorded in our consolidated financial statements. LTP is an unconsolidated variable-interest entity that is 50% owned by us and 50% owned by Boise Inc. LTP procures sawtimber, pulpwood, residual chips, and other residual wood fiber to meet the wood and fiber requirements of us and Boise Inc. in Louisiana. We are not the primary beneficiary of LTP, as we do not have power to direct the activities that most significantly affect the economic performance of LTP. Accordingly, we do not consolidate LTP's results in our financial statements.

Sales
Related-party sales to LTP from our Wood Products segment in our Consolidated Statements of Operations were $6.1 million and $4.9 million, respectively, during the three months ended March 31, 2013 and 2012. These pulpwood and chip sales were made at prices designed to approximate market. These sales are recorded in "Trade" in our Consolidated Statements of Operations.

Costs and Expenses

Related-party wood fiber purchases from LTP were $15.7 million and $11.3 million, respectively, during the three months ended March 31, 2013 and 2012. We purchased wood fiber at prices designed to approximate market. These costs are

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recorded in "Materials, labor, and other operating expenses (excluding depreciation)" in our Consolidated Statements of Operations.

11.
Segment Information
 
We operate our business using three reportable segments: Wood Products, Building Materials Distribution, and Corporate and Other. There are no differences in our basis of measurement of segment profit or loss from those disclosed in Note 14, Segment Information, of the Notes to Consolidated Financial Statements in "Item 8. Financial Statements and Supplementary Data" in our 2012 Form 10-K.
 
An analysis of our operations by segment is as follows:
 
 
 
 
 
 
 
 
 
Income
 
 
 
 
 
 
 
 
 
 
 
 
(Loss)
 
 
 
 
 
 
Sales
 
Before
 
Depreciation
 
 
 
 
 
 
Inter-
 
 
 
Income
 
and
 
EBITDA
 
 
Trade
 
segment
 
Total
 
Taxes
 
Amortization
 
(a)
 
 
(millions)
Three Months Ended March 31, 2013
 
 

 
 

 
 

 
 

 
 

Wood Products
 
$
163.8

 
$
105.5

 
$
269.2

 
$
20.8

 
$
6.3

 
$
27.1

Building Materials Distribution
 
581.1

 

 
581.1

 
8.0

 
2.2

 
10.2

Corporate and Other
 

 

 

 
(4.2
)
 

 
(4.2
)
Intersegment eliminations
 

 
(105.5
)
 
(105.5
)
 

 

 

 
 
$
744.9

 
$

 
$
744.9

 
24.6

 
$
8.5

 
$
33.0

Interest expense
 
 
 
 
 
 
 
(4.9
)
 
 
 


Interest income
 
 
 
 
 
 
 
0.1

 
 
 


 
 

 


 


 
$
19.7

 


 
 

 
 
 
 
 
 
 
 
Income
 
 
 
 
 
 
 
 
 
 
 
 
(Loss)
 
 
 
 
 
 
Sales
 
Before
 
Depreciation
 
 
 
 
 
 
Inter-
 
 
 
Income
 
and
 
EBITDA
 
 
Trade
 
segment
 
Total
 
Taxes
 
Amortization
 
(a)
 
 
(millions)
Three Months Ended March 31, 2012
 
 

 
 

 
 

 
 

 
 

Wood Products
 
$
135.6

 
$
75.6

 
$
211.1

 
$
10.8

 
$
5.9

 
$
16.7

Building Materials Distribution
 
451.4

 

 
451.4

 
(0.8
)
 
2.2

 
1.4

Corporate and Other
 

 

 

 
(3.6
)
 

 
(3.5
)
Intersegment eliminations
 

 
(75.6
)
 
(75.6
)
 

 

 

 
 
$
587.0

 
$

 
$
587.0

 
6.4

 
$
8.1

 
$
14.6

Interest expense
 
 
 
 
 
 
 
(4.8
)
 
 
 
 
Interest income
 
 
 
 
 
 
 
0.1

 
 
 
 
 
 


 


 


 
$
1.7

 


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

(a)
EBITDA is defined as income (loss) before interest (interest expense and interest income), income taxes, and depreciation and amortization. EBITDA is the primary measure used by our chief operating decision maker to evaluate segment operating performance and to decide how to allocate resources to segments. We believe EBITDA is useful to investors because it provides a means to evaluate the operating performance of our segments and our company on an ongoing basis using criteria that are used by our internal decision makers and because it is frequently used by investors and other interested parties when comparing companies in our industry that have different financing and capital structures and/or tax rates. We believe EBITDA is a meaningful measure because it presents a transparent view of our recurring operating performance and allows management to readily view operating trends, perform analytical comparisons, and identify strategies to improve operating performance. EBITDA, however, is not a measure of our liquidity or financial performance under generally accepted accounting principles (GAAP) and should not be

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considered as an alternative to net income (loss), income (loss) from operations, or any other performance measure derived in accordance with GAAP or as an alternative to cash flow from operating activities as a measure of our liquidity. The use of EBITDA instead of net income (loss) or segment income (loss) has limitations as an analytical tool, including the inability to determine profitability; the exclusion of interest expense, interest income, and associated significant cash requirements; and the exclusion of depreciation and amortization, which represent unavoidable operating costs. Management compensates for the limitations of EBITDA by relying on our GAAP results. Our measure of EBITDA is not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the methods of calculation.

The following is a reconciliation of net income to EBITDA:
 
 
 
Three Months Ended
March 31
 
 
2013
 
2012
 
 
(millions)
Net income(1)
 
$
80.8

 
$
1.7

Interest expense
 
4.9

 
4.8

Interest income
 
(0.1
)
 
(0.1
)
Income tax provision (benefit)(1)
 
(61.1
)
 
0.1

Depreciation and amortization
 
8.5

 
8.1

EBITDA
 
$
33.0

 
$
14.6

 _______________________________________ 

(1)
First quarter 2013 includes $68.7 million of income tax benefit associated with the recording of net deferred tax assets upon our conversion to a corporation.

12.    Commitments, Legal Proceedings and Contingencies, and Guarantees
 
Commitments
 
We have commitments for leases and long-term debt that are discussed further under "Leases" in Note 2, Summary of Significant Accounting Policies, and Note 5, Debt. We are a party to a number of long-term log and fiber supply agreements that are discussed in Note 15, Commitments, Legal Proceedings and Contingencies, and Guarantees, of the Notes to Consolidated Financial Statements in "Item 8. Financial Statements and Supplementary Data" in our 2012 Form 10-K. In addition, we have purchase obligations for goods and services, capital expenditures, and raw materials entered into in the normal course of business. At March 31, 2013, there have been no material changes to the commitments disclosed in the 2012 Form 10-K.
 
Legal Proceedings and Contingencies
 
We are a party to routine legal proceedings that arise in the ordinary course of our business. We are not currently a party to any legal proceedings or environmental claims that we believe would, individually or in the aggregate, have a material adverse effect on our financial position, results of operations, or cash flows.  

Guarantees
 
We provide guarantees, indemnifications, and assurances to others. Note 15, Commitments, Legal Proceedings and Contingencies, and Guarantees, of the Notes to Consolidated Financial Statements in "Item 8. Financial Statements and Supplementary Data" in our 2012 Form 10-K describes the nature of our guarantees, including the approximate terms of the guarantees, how the guarantees arose, the events or circumstances that would require us to perform under the guarantees, and the maximum potential undiscounted amounts of future payments we could be required to make. As of March 31, 2013, there have been no material changes to the guarantees disclosed in the 2012 Form 10-K.  

13.
Consolidating Guarantor and Nonguarantor Financial Information
 
The following consolidating financial information presents the Statements of Comprehensive Income (Loss), Balance Sheets, and Cash Flows related to Boise Cascade. The Senior Notes are guaranteed fully and unconditionally, and jointly and severally by each of our existing and future subsidiaries (other than our foreign subsidiaries). Each of our existing subsidiaries that is a guarantor of the Senior Notes is 100% owned by Boise Cascade. Other than the consolidated financial statements and

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Table of Contents


footnotes for Boise Cascade and the consolidating financial information, financial statements and other disclosures concerning the guarantors have not been presented because management believes that such information is not material to investors. The reclassifications to net income from accumulated other comprehensive loss are recorded primarily in our guarantor subsidiaries.

Furthermore, the cancellation provisions in the related indenture regarding guarantor subsidiaries are customary, and they do not include an arrangement that permits a guarantor subsidiary to opt out of the obligation prior to or during the term of the debt. Each guarantor subsidiary is automatically released from its obligations as a guarantor upon the sale of the subsidiary or substantially all of its assets to a third party, the designation of the subsidiary as an unrestricted subsidiary for purposes of the covenants included in the indenture, the release of the indebtedness under the indenture, or if the issuer exercises its legal defeasance option or the discharge of its obligations in accordance with the indenture governing the Senior Notes.


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Table of Contents


Boise Cascade Company and Subsidiaries
Consolidating Statements of Comprehensive Income (Loss)
For the Three Months Ended March 31, 2013
(unaudited) 
 
 
Boise
Cascade Company (Parent)
 
Guarantor
Subsidiaries
 
Non-
guarantor
Subsidiaries
 
Eliminations
 
Consolidated
 
 
(thousands)
Sales
 
 

 
 

 
 

 
 

 
 

Trade
 
$

 
$
742,383

 
$
2,495

 
$

 
$
744,878

Intercompany
 

 

 
2,638

 
(2,638
)
 

 
 

 
742,383

 
5,133

 
(2,638
)
 
744,878

 
 
 
 
 
 
 
 
 
 
 
Costs and expenses
 
 

 
 

 
 

 
 

 
 

Materials, labor, and other operating expenses (excluding depreciation)
 

 
641,587

 
5,970

 
(2,710
)
 
644,847

Depreciation and amortization
 
46

 
8,124

 
307

 

 
8,477

Selling and distribution expenses
 

 
56,372

 
632

 

 
57,004

General and administrative expenses
 
4,103

 
5,871

 

 
72

 
10,046

Other (income) expense, net
 
2

 
226

 
(362
)
 

 
(134
)
 
 
4,151

 
712,180

 
6,547

 
(2,638
)
 
720,240

 
 
 
 
 
 
 
 
 
 
 
Income (loss) from operations
 
(4,151
)
 
30,203

 
(1,414
)
 

 
24,638

 
 
 
 
 
 
 
 
 
 
 
Foreign exchange loss
 
(30
)
 
(44
)
 
(6
)
 

 
(80
)
Interest expense
 
(4,891
)
 

 

 

 
(4,891
)
Interest income
 
28

 
34

 

 

 
62

 
 
(4,893
)
 
(10
)
 
(6
)
 

 
(4,909
)
 
 
 
 
 
 
 
 
 
 
 
Income (loss) before income taxes and equity in net income of affiliates
 
(9,044
)
 
30,193

 
(1,420
)
 

 
19,729

Income tax benefit
 
61,107

 

 

 

 
61,107

 
 
 
 
 
 
 
 
 
 
 
Income (loss) before equity in net income (loss) of affiliates
 
52,063

 
30,193

 
(1,420
)
 

 
80,836

Equity in net income (loss) of affiliates
 
28,773

 

 

 
(28,773
)
 

Net income (loss)
 
80,836

 
30,193

 
(1,420
)
 
(28,773
)
 
80,836

 
 
 
 
 
 
 
 
 
 
 
Other comprehensive income, net of tax
 
 
 
 
 
 
 
 
 
 
  Defined benefit pension plans
 
 
 
 
 
 
 
 
 
 
     Amortization of actuarial loss
 
1,395

 

 

 

 
1,395

Amortization of prior service costs
 
14

 

 

 

 
14

Other comprehensive income, net of tax
 
1,409

 

 

 

 
1,409

Comprehensive income (loss)
 
$
82,245

 
$
30,193

 
$
(1,420
)
 
$
(28,773
)
 
$
82,245



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Table of Contents


Boise Cascade Company and Subsidiaries
Consolidating Statements of Comprehensive Income (Loss)
For the Three Months Ended March 31, 2012
(unaudited) 
 
 
Boise
Cascade Company (Parent)
 
Guarantor
Subsidiaries
 
Non-
guarantor
Subsidiaries
 
Eliminations
 
Consolidated
 
 
(thousands)
Sales
 
 

 
 

 
 

 
 

 
 

Trade
 
$

 
$
584,248

 
$
2,738

 
$

 
$
586,986

Intercompany
 

 

 
3,251

 
(3,251
)
 

 
 

 
584,248

 
5,989

 
(3,251
)
 
586,986

 
 
 
 
 
 
 
 
 
 
 
Costs and expenses
 
 

 
 

 
 

 
 

 
 

Materials, labor, and other operating expenses (excluding depreciation)
 

 
507,340

 
6,179

 
(3,395
)
 
510,124

Depreciation and amortization
 
32

 
7,640

 
447

 

 
8,119

Selling and distribution expenses
 

 
53,059

 
755

 

 
53,814

General and administrative expenses
 
3,663

 
5,241

 

 
144

 
9,048

Other (income) expense, net
 
47

 
243

 
(658
)
 

 
(368
)
 
 
3,742

 
573,523

 
6,723

 
(3,251
)
 
580,737

 
 
 
 
 
 
 
 
 
 
 
Income (loss) from operations
 
(3,742
)
 
10,725

 
(734
)
 

 
6,249

 
 
 
 
 
 
 
 
 
 
 
Foreign exchange gain
 
51

 
75

 
60

 

 
186

Interest expense
 
(4,813
)
 

 

 

 
(4,813
)
Interest income
 
51

 
56

 

 

 
107

 
 
(4,711
)
 
131

 
60

 

 
(4,520
)
 
 
 
 
 
 
 
 
 
 
 
Income (loss) before income taxes and equity in net income (loss) of affiliates
 
(8,453
)
 
10,856

 
(674
)
 

 
1,729

Income tax provision
 
(52
)
 
(9
)
 

 

 
(61
)
 
 
 
 
 
 
 
 
 
 
 
Income (loss) before equity in net income (loss) of affiliates
 
(8,505
)
 
10,847

 
(674
)
 

 
1,668

Equity in net income (loss) of affiliates
 
10,173

 

 

 
(10,173
)
 

Net income (loss)
 
1,668

 
10,847

 
(674
)
 
(10,173
)
 
1,668

 
 
 
 
 
 
 
 
 
 
 
Other comprehensive income, net of tax
 
 
 
 
 
 
 
 
 
 
  Defined benefit pension plans
 
 
 
 
 
 
 
 
 
 
     Amortization of actuarial loss
 
2,026

 

 

 

 
2,026

Amortization of prior service costs
 
41

 

 

 

 
41

Other comprehensive income, net of tax
 
2,067

 

 

 

 
2,067

Comprehensive income (loss)
 
$
3,735

 
$
10,847

 
$
(674
)
 
$
(10,173
)
 
$
3,735


 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 

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Table of Contents


Boise Cascade Company and Subsidiaries
Consolidating Balance Sheets at March 31, 2013
(unaudited)
 
 
Boise
Cascade Company (Parent)
 
Guarantor
Subsidiaries
 
Non-
guarantor
Subsidiaries
 
Eliminations
 
Consolidated
 
 
(thousands)
ASSETS
 
 

 
 

 
 

 
 

 
 

Current
 
 

 
 

 
 

 
 

 
 

Cash and cash equivalents
 
$
233,494

 
$
34

 
$
19

 
$

 
$
233,547

Receivables
 
 
 
 
 
 
 
 
 
 

Trade, less allowances
 

 
204,330

 
1,245

 

 
205,575

Related parties
 
17

 
413

 

 

 
430

Other
 
(114
)
 
3,780

 
239

 

 
3,905

Inventories
 

 
380,192

 
6,911

 

 
387,103

Deferred income taxes
 
19,021

 

 
2

 

 
19,023

Prepaid expenses and other
 
5,022

 
3,190

 
67

 

 
8,279

 
 
257,440

 
591,939

 
8,483

 

 
857,862

 
 
 
 
 
 
 
 
 
 
 
Property and equipment, net
 
613

 
252,176

 
8,432

 

 
261,221

Timber deposits
 

 
7,027

 

 

 
7,027

Deferred financing costs
 
7,441

 

 

 

 
7,441

Goodwill
 

 
12,170

 

 

 
12,170

Intangible assets
 

 
8,900

 

 

 
8,900

Deferred income taxes
 
48,128

 

 

 

 
48,128

Other assets
 
20

 
7,026

 
2

 

 
7,048

Investments in affiliates
 
637,302

 

 

 
(637,302
)
 

Total assets
 
$
950,944

 
$
879,238

 
$
16,917

 
$
(637,302
)
 
$
1,209,797



21

Table of Contents



Boise Cascade Company and Subsidiaries
Consolidating Balance Sheets at March 31, 2013 (continued)
(unaudited)
 
 
Boise
Cascade Company (Parent)
 
Guarantor
Subsidiaries
 
Non-
guarantor
Subsidiaries
 
Eliminations
 
Consolidated
 
 
(thousands)
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 

 
 

 
 

 
 

 
 

Current
 
 

 
 

 
 

 
 

 
 

Accounts payable
 
 

 
 

 
 

 
 

 
 

Trade
 
$
14,357

 
$
201,128

 
$
903

 
$

 
$
216,388

Related parties
 
402

 
1,690

 

 

 
2,092

Accrued liabilities
 

 

 

 

 
 

Compensation and benefits
 
15,880

 
26,511

 
388

 

 
42,779

Interest payable
 
7,160

 

 

 

 
7,160

Other
 
8,454

 
23,693

 
545

 

 
32,692

 
 
46,253

 
253,022

 
1,836

 

 
301,111

 
 
 
 
 
 
 
 
 
 
 
Debt
 
 

 
 

 
 

 
 

 
 

Long-term debt
 
250,000

 

 

 

 
250,000

 
 
 
 
 
 
 
 
 
 
 
Other