BCC 3.31.2014 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, 2014
 
 
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 x     No o
 
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 39,405,177 shares of the registrant's $0.01 par value common stock outstanding on May 7, 2014.



Table of Contents
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5. Acquisitions
 
 
 
 
 
 
 
 
 
 
 
 
9. Accumulated Other Comprehensive Loss
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


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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
 
2014
 
2013
 
(thousands, except per-share data)
Sales
$
767,180

 
$
744,878

 
 
 
 
Costs and expenses
 

 
 

Materials, labor, and other operating expenses (excluding depreciation)
672,608

 
644,847

Depreciation and amortization
12,320

 
8,477

Selling and distribution expenses
58,930

 
57,004

General and administrative expenses
10,665

 
10,046

Other (income) expense, net
(1,900
)
 
(134
)
 
752,623

 
720,240

 
 
 
 
Income from operations
14,557

 
24,638

 
 
 
 
Foreign currency exchange loss
(89
)
 
(80
)
Interest expense
(5,512
)
 
(4,891
)
Interest income
70

 
62

 
(5,531
)
 
(4,909
)
 
 
 
 
Income before income taxes
9,026

 
19,729

Income tax (provision) benefit
(3,461
)
 
61,107

Net income
$
5,565

 
$
80,836

 
 
 
 
Weighted average common shares outstanding:
 
 
 
Basic
39,372

 
37,569

Diluted
39,452

 
37,569

 
 
 
 
Net income per common share:
 
 
 
Basic
$
0.14

 
$
2.15

Diluted
$
0.14

 
$
2.15

 
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
 
2014
 
2013
 
(thousands)
Net income
$
5,565

 
$
80,836

Other comprehensive income (loss), net of tax
 
 
 
  Defined benefit pension plans
 
 
 
Amortization of actuarial (gain) loss, net of tax of ($2) and $861, respectively
(4
)
 
1,395

Amortization of prior service costs, net of tax of $- and $9, respectively

 
14

Other comprehensive income (loss), net of tax
(4
)
 
1,409

Comprehensive income
$
5,561

 
$
82,245


See accompanying condensed notes to unaudited quarterly consolidated financial statements.


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Boise Cascade Company
Consolidated Balance Sheets
(unaudited)
 
 
March 31,
2014
 
December 31,
2013
 
 
(thousands)
ASSETS
 
 

 
 

Current
 
 

 
 

Cash and cash equivalents
 
$
85,985

 
$
118,249

Receivables
 
 
 
 

Trade, less allowances of $2,808 and $2,509
 
200,101

 
152,240

Related parties
 
660

 
583

Other
 
6,020

 
7,268

Inventories
 
421,059

 
383,359

Deferred income taxes
 
18,185

 
18,151

Prepaid expenses and other
 
9,707

 
7,855

Total current assets
 
741,717

 
687,705

 
 
 
 
 
Property and equipment, net
 
357,907

 
360,985

Timber deposits
 
6,461

 
6,266

Deferred financing costs
 
8,051

 
8,334

Goodwill
 
21,823

 
21,823

Intangible assets, net
 
10,253

 
10,277

Deferred income taxes
 
85

 
760

Other assets
 
8,210

 
8,036

Total assets
 
$
1,154,507

 
$
1,104,186

 
See accompanying condensed notes to unaudited quarterly consolidated financial statements.


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Boise Cascade Company
Consolidated Balance Sheets (continued)
(unaudited)
 
 
March 31,
2014
 
December 31,
2013
 
 
(thousands, except per-share data)
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
 
Current
 
 
 
 
Accounts payable
 
 
 
 
Trade
 
$
197,480

 
$
139,636

Related parties
 
2,143

 
2,484

Accrued liabilities
 
 
 
 
Compensation and benefits
 
47,918

 
60,527

Interest payable
 
8,080

 
3,294

Other
 
30,586

 
33,076

Total current liabilities
 
286,207

 
239,017

 
 
 
 
 
Debt
 
 
 
 
Long-term debt
 
301,565

 
301,613

 
 
 
 
 
Other
 
 
 
 
Compensation and benefits
 
93,125

 
96,536

Other long-term liabilities
 
14,686

 
14,539

 
 
107,811

 
111,075

 
 
 
 
 
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, 43,269 and 43,229 shares issued, respectively
 
433

 
432

Treasury stock, 3,864 shares at cost
 
(100,000
)
 
(100,000
)
Additional paid-in capital
 
497,474

 
496,593

Accumulated other comprehensive loss
 
(55,253
)
 
(55,249
)
Retained earnings
 
116,270

 
110,705

Total stockholders' equity
 
458,924

 
452,481

Total liabilities and stockholders' equity
 
$
1,154,507

 
$
1,104,186


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
 
 
2014
 
2013
 
 
(thousands)
Cash provided by (used for) operations
 
 
 
 
Net income
 
$
5,565

 
$
80,836

Items in net income not using (providing) cash
 
 
 
 

Depreciation and amortization, including deferred financing costs and other
 
12,729

 
8,888

Stock-based compensation
 
842

 
243

Pension expense
 
278

 
2,726

Deferred income taxes
 
643

 
(68,018
)
Other
 
(1,908
)
 
(232
)
Decrease (increase) in working capital
 
 
 
 

Receivables
 
(46,707
)
 
(68,635
)
Inventories
 
(37,700
)
 
(61,297
)
Prepaid expenses and other
 
(4,880
)
 
(384
)
Accounts payable and accrued liabilities
 
48,315

 
53,793

Pension contributions
 
(390
)
 
(9,663
)
Income taxes payable
 
2,314

 
6,772

Other
 
(3,051
)
 
(2,472
)
Net cash used for operations
 
(23,950
)
 
(57,443
)
 
 
 
 
 
Cash provided by (used for) investment
 
 

 
 

Expenditures for property and equipment
 
(12,539
)
 
(5,316
)
Proceeds from sales of assets
 
4,520

 
489

Other
 
61

 
22

Net cash used for investment
 
(7,958
)
 
(4,805
)
 
 
 
 
 
Cash provided by (used for) financing
 
 
 
 
Net proceeds from issuance of common stock
 

 
262,736

Issuances of long-term debt, including revolving credit facility
 
13,000

 
55,000

Payments of long-term debt, including revolving credit facility
 
(13,000
)
 
(80,000
)
Financing costs
 
(11
)
 
(149
)
Other
 
(345
)
 

  Net cash provided by (used for) financing
 
(356
)
 
237,587

 
 
 
 
 
Net increase (decrease) in cash and cash equivalents
 
(32,264
)
 
175,339

 
 
 
 
 
Balance at beginning of the period
 
118,249

 
45,893

 
 
 
 
 
Balance at end of the period
 
$
85,985

 
$
221,232

 
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 plywood and engineered wood products (EWP) 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 the initial public offering, the common stock held by Boise Cascade Holdings, L.L.C. (BC Holdings) represented 68.7% of our outstanding common stock. In the July 2013 and November 2013 secondary offerings, we registered a combined 18,050,000 shares of common stock sold by BC Holdings. Concurrent with the close of the July 2013 secondary offering, we also repurchased 3,864,062 shares of common stock from BC Holdings (the Repurchase). Following the secondary offerings and the Repurchase, the common stock held by BC Holdings represented 19.8% of our outstanding common stock.    On March 3, 2014, BC Holdings distributed 7,785,938 shares of common stock to its members, including its controlling member Forest Products Holdings, L.L.C. (FPH), an entity controlled by Madison Dearborn Capital Partners IV, L.P. (MDP). Following this distribution, BC Holdings does not own any shares of Boise Cascade’s common stock. All of the distributed shares were in turn distributed by FPH and MDP to their respective members and partners.
 
We operate our business using three reportable segments: (1) Wood Products, which manufactures plywood, EWP, 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 currency exchange gains and losses. For more information, see Note 12, 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 2013 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 2013 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,

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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.  

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, 2014, and December 31, 2013, we had $3.1 million and $4.7 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." At March 31, 2014, and December 31, 2013, we had $19.5 million and $24.2 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 $3.9 million and $3.6 million for the three months ended March 31, 2014 and 2013, respectively. Sublease rental income was not material in any of the periods presented.

Inventories
 
Inventories include the following (work in process is not material):
 
 
 
March 31,
2014
 
December 31,
2013
 
 
(thousands)
Finished goods and work in process
 
$
345,475

 
$
292,218

Logs
 
49,046

 
65,423

Other raw materials and supplies
 
26,538

 
25,718

 
 
$
421,059

 
$
383,359



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Property and Equipment
 
Property and equipment consisted of the following asset classes:
 
 
 
March 31,
2014
 
December 31,
2013
 
 
(thousands)
Land
 
$
37,160

 
$
37,345

Buildings
 
92,800

 
91,594

Improvements
 
41,594

 
41,372

Office equipment and vehicles
 
82,386

 
80,340

Machinery and equipment
 
383,740

 
380,456

Construction in progress
 
11,424

 
10,063

 
 
649,104

 
641,170

Less accumulated depreciation
 
(291,197
)
 
(280,185
)
 
 
$
357,907

 
$
360,985


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, 2014, and December 31, 2013, we held $56.7 million and $85.8 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, 2014, the book value of our fixed-rate debt was $300.0 million, and the fair value was estimated to be $321.7 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 our debt (Level 1 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, 2014, and December 31, 2013, the receivables from a single customer accounted for approximately 11% and 13%, respectively, of total receivables. No other customer accounted for 10% or more of total receivables.


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New and Recently Adopted Accounting Standards
 
In April 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. This ASU defines a discontinued operation as a disposal of a component or group of components that is disposed of or is classified as held for sale and represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. The standard also requires additional disclosures about discontinued operations. This guidance is effective for annual and interim reporting periods beginning after December 15, 2014. The provisions of this guidance are not expected to have a material effect on our financial statements.
    
In July 2013, the FASB issued ASU 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (Topic 740). This ASU requires that liabilities related to unrecognized tax benefits offset deferred tax assets for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward if such settlement is required or expected in the event the uncertain tax position is disallowed. In situations in which a carryforward cannot be used or the deferred tax asset is not intended to be used for such purpose, the unrecognized tax benefit should be recorded as a liability and should not offset deferred tax assets. We adopted the provisions of this guidance January 1, 2014, 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

For the three months ended March 31, 2014, we recorded $3.5 million of income tax expense and had an effective rate of 38.3%. As a result of our conversion to a corporation in February 2013, we recorded net deferred tax assets of $68.7 million, the effect of which was recorded as an income tax benefit in our Consolidated Statement of Operations 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 tax rate of 38.3% for the three months ended March 31, 2013. During the three months ended March 31, 2014 and 2013, the primary reason for the difference between the federal statutory income tax rate of 35% and the effective tax rate, excluding the deferred discrete item, was the effect of state taxes.

During the three months ended March 31, 2014 and 2013, cash paid for taxes, net of refunds received, was $0.5 million and $0.1 million, respectively.

Income Tax Uncertainties

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, 2014, and December 31, 2013, we had no unrecognized tax benefits recorded on our Consolidated Balance Sheets. During the three months ended March 31, 2014 and 2013, we did not record any interest or penalties related to uncertain tax positions.

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. 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.


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

 
Three Months Ended
March 31
 
2014
 
2013
 
(thousands, except per-share data)
Net income
$
5,565

 
$
80,836

Weighted average common shares outstanding during the period (for basic calculation)
39,372

 
37,569

Dilutive effect of other potential common shares
80

 

Weighted average common shares and potential common shares (for diluted calculation)
39,452

 
37,569

 
 
 
 
Net income per common share - Basic
$
0.14

 
$
2.15

Net income per common share - Diluted
$
0.14

 
$
2.15


The computation of the dilutive effect of other potential common shares excludes stock awards representing 0.2 million shares and 0.1 million shares of common stock, respectively, in the three months ended March 31, 2014 and 2013. Under the treasury stock method, the inclusion of these stock awards would have been antidilutive.

5.
Acquisitions
 
On September 30, 2013, our wholly owned subsidiary, Boise Cascade Wood Products, L.L.C., completed the acquisition of 100% of the outstanding limited liability company interests of both Chester Wood Products LLC and Moncure Plywood LLC (Wood Resources LLC Southeast Operations) for an aggregate purchase price of $103.0 million, including a post-closing adjustment of $1.0 million based upon a working capital target (the Acquisition).

The following pro forma financial information presents the combined results of operations as if the Wood Resources LLC Southeast Operations had been combined with us on January 1, 2013. The pro forma financial information also gives effect to the issuance of $50 million in aggregate principal amount of our 6.375% senior notes due November 1, 2020 (Senior Notes) on August 15, 2013, and the $25.0 million borrowed under our revolving credit facility to partially finance the Acquisition, as if such transactions had occurred on January 1, 2013. The pro forma results are intended for information purposes only and do not purport to represent what the combined companies' results of operations would actually have been had the related transactions in fact occurred on January 1, 2013. They also do not reflect any cost savings, operating synergies, or revenue enhancements that we may achieve or the costs necessary to achieve those cost savings, operating synergies, revenue enhancements, or integration efforts.

 
 
Pro Forma
 
 
Three Months Ended
March 31, 2013
 
 
 
Sales
 
$
781,063

Net income (a)
 
$
83,169

Net income per common share - Basic and Diluted
 
$
2.21

___________________________________ 

(a)
The three months ended March 31, 2013, includes a $68.7 million income tax benefit associated with the recording of net deferred tax assets upon our conversion to a corporation in connection with our initial public offering.


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6.
Debt
 
Long-term debt consisted of the following:
 
 
 
March 31,
2014
 
December 31,
2013
 
 
(thousands)
Asset-based revolving credit facility
 
$

 
$

6.375% senior notes
 
299,990

 
299,990

Unamortized premium on 6.375% senior notes
 
1,575

 
1,623

Long-term debt
 
$
301,565

 
$
301,613

 
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 $350 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). On February 6, 2014, we entered into a sixth amendment to our Revolving Credit Facility that primarily provides more administrative flexibility and reduces the notice period we must provide to receive London Interbank Offered Rate (LIBOR) based advances under the facility.

The Revolving Credit Facility 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 LIBOR or a base rate, as defined in the credit agreement, plus a spread over the index elected that ranges from 1.50% to 2.00% for loans based on LIBOR and from 0.50% to 1.00% 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 0.25% to 0.375% 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 equityholders, 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 10% of the aggregate lending commitments (or $35 million). 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, 2014, was $341.3 million.

The Revolving Credit Facility generally permits dividends only if certain conditions are met, including complying with either (i) pro forma Excess Availability (as defined in the Revolving Credit Facility) equal to or exceeding 25% of the aggregate Revolver Commitments (as defined in the Revolving Credit Facility) or (ii) (x) pro forma Excess Availability equal to or exceeding 15% of the aggregate Revolver Commitment and (y) a fixed-charge coverage ratio of 1:1 on a pro forma basis.

At both March 31, 2014, and December 31, 2013, we had no borrowings outstanding under the Revolving Credit Facility and $8.7 million and $8.4 million, respectively, of letters of credit outstanding. These letters of credit and borrowings, if any, reduced our borrowing capacity under the Revolving Credit Facility by an equivalent amount. The maximum borrowings outstanding under the Revolving Credit Facility was $13.0 million during the three months ended March 31, 2014. During the three months ended March 31, 2014, the average interest rate on borrowings was approximately 1.66%.


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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 Senior Notes through a private placement that was 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, 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 August 15, 2013, we issued an additional $50 million in aggregate principal amount of Senior Notes in a private offering that was exempt from registration under the Securities Act. The additional $50 million of Senior Notes were priced at 103.5% of their principal amount plus accrued interest from May 1, 2013, and were issued as additional Senior Notes under the indenture dated as of October 22, 2012.

On May 8, 2013 and November 26, 2013, we completed an offer to exchange any and all of our $250 million and $50 million, respectively, outstanding Senior Notes for a like principal amount of new 6.375% Senior Notes due 2020 having substantially identical terms to those of the Senior Notes. $250 million and $49,990,000 in aggregate principal amount (or 100% and 99.98%, respectively) of the outstanding Senior Notes were tendered and accepted for exchange upon closing of the related exchange offers and have been registered under the Securities Act.

Cash Paid for Interest

For the three months ended March 31, 2014 and 2013, cash payments for interest were $0.3 million and $0.5 million, respectively.

7.
Retirement and Benefit Plans
 
The following table presents the pension benefit costs:
 
 
Three Months Ended March 31
 
2014
 
2013
 
(thousands)
Service cost
$
401

 
$
671

Interest cost
5,151

 
4,642

Expected return on plan assets
(5,268
)
 
(4,866
)
Amortization of actuarial (gain) loss
(6
)
 
2,256

Amortization of prior service costs

 
23

Net periodic benefit cost
$
278

 
$
2,726

 
In the first three months of 2014, we contributed $0.4 million in cash to the pension plans. For the remainder of 2014, we expect to make approximately $13 million in contributions to the pension plans.

8.
Stock-Based Compensation

In February 2013, we granted three types of stock-based awards under the 2013 Incentive Compensation Plan (2013 Incentive Plan): performance stock units (PSUs), restricted stock units (RSUs), and stock options. In February 2014, we granted two types of stock-based awards under the 2013 Incentive Plan: PSUs and RSUs.

PSU and RSU Awards
    
In February 2014, we granted 100,692 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 Boise Cascade’s 2014 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

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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.
    
In February 2013, we granted 90,124 PSUs to our officers and other employees, subject to performance and service conditions. During the 2013 performance period, participants earned 112% of the target based on Boise Cascade’s 2013 EBITDA, determined by our Compensation Committee in accordance with the related grant agreement.

In February 2014, we granted an aggregate of 121,804 RSUs to our officers, other employees, and nonemployee directors with only service conditions. In February 2013, we granted an aggregate of 14,161 RSUs to our nonemployee directors with only service conditions.

The PSUs, if earned, vest in three equal tranches on December 31 of each year after the grant date, subject to final determination of meeting the performance condition by the Compensation Committee of our board of directors. The RSUs granted to officers and other employees vest in three equal tranches on December 31 of each year after the grant date. However, 100% of PSUs and RSUs granted to retirement-eligible employees (age 62 or older with 15 years of service, or age 65 or older) vest on the later of December 31 after grant date or the date upon which they become retirement eligible. The RSUs granted to nonemployee directors vest over a one-year period, provided that such vested shares will not be delivered to the directors until six months following termination from the board of directors.

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. During the three months ended March 31, 2014, the total fair market value of PSUs vested was $1.5 million.

The following summarizes the activity of our PSUs and RSUs awarded under the 2013 Incentive Plan for the three months ended March 31, 2014:
 
 
PSUs
 
RSUs
 
 
Number of shares
 
Weighted Average Grant-Date Fair Value
 
Number of shares
 
Weighted Average Grant-Date Fair Value
Outstanding, December 31, 2013
 
90,124

 
$
26.65

 
14,161

 
$
26.65

Performance true-up
 
10,765

 
26.65

 

 

Vested
 
(53,080
)
 
26.65

 
(14,161
)
 
26.65

Granted
 
100,692

 
30.32

 
121,804

 
30.32

Outstanding, March 31, 2014
 
148,501

 
$
29.14

 
121,804

 
$
30.32


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. 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, 2013
 
161,257

 
$
27.19

 

 

Exercised
 
(440
)
 
27.19

 
 
 
 
Cancelled/Forfeited
 
(6,801
)
 
27.19

 
 
 
 
Outstanding, March 31, 2014
 
154,016

 
$
27.19

 
8.9
 
$
223

Vested and expected to vest, March 31, 2014
 
133,631

 
$
27.19

 
8.9
 
$
194

Exercisable, March 31, 2014
 
52,686

 
$
27.19

 
8.9
 
$
76


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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 estimated forfeiture rates in the period in which we change such estimated rates. Most of our share-based compensation expense was recorded in "General and administrative expenses" in our Consolidated Statements 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
 
 
2014
 
2013
 
 
(thousands)
PSUs
 
$
367

 
$
135

RSUs
 
282

 
35

Stock options
 
193

 
73

Total
 
$
842

 
$
243


The related tax benefit for the three months ended March 31, 2014 and 2013, was $0.3 million and $0.1 million, respectively. As of March 31, 2014, total unrecognized compensation expense related to nonvested share-based compensation arrangements was $7.9 million, net of estimated forfeitures. This expense is expected to be recognized over a weighted-average period of 2.0 years.

9.    Accumulated Other Comprehensive Loss    

The following table details the changes in accumulated other comprehensive loss for the three months ended March 31, 2014 and 2013:

 
 
Three Months Ended
March 31
 
 
2014
 
2013
 
 
(thousands)
Beginning Balance
 
$
(55,249
)
 
$
(121,229
)
Defined benefit pension plans, amounts reclassified from accumulated other comprehensive loss, net of tax of ($2) and $870, respectively (a)
 
(4
)
 
1,409

Ending Balance
 
$
(55,253
)
 
$
(119,820
)
___________________________________ 
 
(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 7, Retirement and Benefit Plans.

10.
Outsourcing Services Agreement

Under an Outsourcing Services Agreement, Packaging Corporation of America (PCA) provides a number of corporate staff services to us. These services include information technology, accounting, and human resource transactional services. The Outsourcing Services Agreement is currently set to expire on February 22, 2016. 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 PCA) 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, for both the three months ended March 31, 2014 and 2013.


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11.
Transactions With Related Party
 
Louisiana Timber Procurement Company, L.L.C. (LTP) is an unconsolidated variable-interest entity that is 50% owned by us and 50% owned by PCA. LTP procures sawtimber, pulpwood, residual chips, and other residual wood fiber to meet the wood and fiber requirements of us and PCA 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 $7.2 million and $6.1 million, respectively, during the three months ended March 31, 2014 and 2013. These pulpwood and chip sales were made at prices designed to approximate market. These sales are recorded in "Sales" in our Consolidated Statements of Operations.

Costs and Expenses

Related-party wood fiber purchases from LTP were $16.1 million and $15.7 million, respectively, during the three months ended March 31, 2014 and 2013. We purchased wood fiber at prices designed to approximate market. These costs are recorded in "Materials, labor, and other operating expenses (excluding depreciation)" in our Consolidated Statements of Operations.

12.
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 15, Segment Information, of the Notes to Consolidated Financial Statements in "Item 8. Financial Statements and Supplementary Data" in our 2013 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, 2014
 
 

 
 

 
 

 
 

 
 

Wood Products
 
$
181.7

 
$
111.6

 
$
293.3

 
$
13.0

 
$
10.0

 
$
23.0

Building Materials Distribution
 
585.5

 

 
585.5

 
5.9

 
2.3

 
8.2

Corporate and Other
 

 

 

 
(4.4
)
 

 
(4.4
)
Intersegment eliminations
 

 
(111.6
)
 
(111.6
)
 

 

 

 
 
$
767.2

 
$

 
$
767.2

 
14.5

 
$
12.3

 
$
26.8

Interest expense
 
 
 
 
 
 
 
(5.5
)
 
 
 


Interest income
 
 
 
 
 
 
 
0.1

 
 
 


 
 

 


 


 
$
9.0

 


 
 


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Table of Contents

 
 
 
 
 
 
 
 
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

 


 
 
___________________________________ 

(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 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 for the consolidated company:
 
 
 
Three Months Ended
March 31
 
 
2014
 
2013
 
 
(millions)
Net income(1)
 
$
5.6

 
$
80.8

Interest expense
 
5.5

 
4.9

Interest income
 
(0.1
)
 
(0.1
)
Income tax provision (benefit)(1)
 
3.5

 
(61.1
)
Depreciation and amortization
 
12.3

 
8.5

EBITDA
 
$
26.8

 
$
33.0

 _______________________________________ 

(1)
The three months ended March 31, 2013, includes a $68.7 million of income tax benefit associated with the recording of net deferred tax assets upon our conversion to a corporation.


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13.    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 6, Debt. We are a party to a number of long-term log and wood fiber supply agreements that are discussed in Note 16, Commitments, Legal Proceedings and Contingencies, and Guarantees, of the Notes to Consolidated Financial Statements in "Item 8. Financial Statements and Supplementary Data" in our 2013 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, 2014, there have been no material changes to the commitments disclosed in the 2013 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 16, Commitments, Legal Proceedings and Contingencies, and Guarantees, of the Notes to Consolidated Financial Statements in "Item 8. Financial Statements and Supplementary Data" in our 2013 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, 2014, there have been no material changes to the guarantees disclosed in the 2013 Form 10-K.  

14.
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 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. Additionally, in accordance with the terms of the indenture governing the Senior Notes, the guarantee of BC Holdings was automatically released when Boise Cascade Company's common stock was registered under the Exchange Act and was listed on the NYSE in February 2013.

On October 1, 2013, we entered into a supplemental indenture (Supplemental Indenture) with certain of our subsidiaries and U.S. Bank National Association, the trustee for our Senior Notes, to add Chester Wood Products LLC and Moncure Plywood LLC as guarantors of the Senior Notes. Entry into the Supplemental Indenture was consummated in connection with the Acquisition on September 30, 2013, as described in Note 5, Acquisitions. As such, Chester Wood Products LLC and Moncure Plywood LLC are included as guarantor subsidiaries in the consolidating guarantor and nonguarantor financial statements effective October 1, 2013.


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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, 2014
(unaudited) 
 
 
Boise
Cascade Company (Parent)
 
Guarantor
Subsidiaries
 
Non-
guarantor
Subsidiaries
 
Eliminations
 
Consolidated
 
 
(thousands)
Sales
 
 

 
 

 
 

 
 

 
 

Trade
 
$

 
$
764,070

 
$
3,110

 
$

 
$
767,180

Intercompany
 

 

 
2,565

 
(2,565
)
 

 
 

 
764,070

 
5,675

 
(2,565
)
 
767,180

 
 
 
 
 
 
 
 
 
 
 
Costs and expenses
 
 

 
 

 
 

 
 

 
 

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

 
669,750

 
5,398

 
(2,540
)
 
672,608

Depreciation and amortization
 
34

 
11,979

 
307

 

 
12,320

Selling and distribution expenses
 

 
58,275

 
655

 

 
58,930

General and administrative expenses
 
4,275

 
6,415

 

 
(25
)
 
10,665

Other (income) expense, net
 
9

 
(1,630
)
 
(279
)
 

 
(1,900
)
 
 
4,318

 
744,789

 
6,081

 
(2,565
)
 
752,623

 
 
 
 
 
 
 
 
 
 
 
Income (loss) from operations
 
(4,318
)
 
19,281

 
(406
)
 

 
14,557

 
 
 
 
 
 
 
 
 
 
 
Foreign currency exchange gain (loss)
 
(62
)
 
9

 
(36
)
 

 
(89
)
Interest expense
 
(5,512
)
 

 

 

 
(5,512
)
Interest income
 
5

 
65

 

 

 
70

 
 
(5,569
)
 
74

 
(36
)
 

 
(5,531
)
 
 
 
 
 
 
 
 
 
 
 
Income (loss) before income taxes and equity in net income of affiliates
 
(9,887
)
 
19,355

 
(442
)
 

 
9,026

Income tax (provision) benefit
 
(3,479
)
 
18

 

 

 
(3,461
)
 
 
 
 
 
 
 
 
 
 
 
Income (loss) before equity in net income of affiliates
 
(13,366
)
 
19,373

 
(442
)
 

 
5,565

Equity in net income of affiliates
 
18,931

 

 

 
(18,931
)
 

Net income (loss)
 
5,565

 
19,373

 
(442
)
 
(18,931
)
 
5,565

 
 
 
 
 
 
 
 
 
 
 
Other comprehensive income, net of tax
 
 
 
 
 
 
 
 
 
 
  Defined benefit pension plans
 
 
 
 
 
 
 
 
 
 
     Amortization of actuarial gain
 
(4
)
 

 

 

 
(4
)
Other comprehensive loss, net of tax
 
(4
)
 

 

 

 
(4
)
Comprehensive income (loss)
 
$
5,561

 
$
19,373

 
$
(442
)
 
$
(18,931
)
 
$
5,561



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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 currency 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 of affiliates
 
52,063

 
30,193

 
(1,420
)
 

 
80,836

Equity in net income 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










19

Table of Contents

Boise Cascade Company and Subsidiaries
Consolidating Balance Sheets at March 31, 2014
(unaudited)
 
 
Boise
Cascade Company (Parent)
 
Guarantor
Subsidiaries
 
Non-
guarantor
Subsidiaries
 
Eliminations
 
Consolidated
 
 
(thousands)
ASSETS
 
 

 
 

 
 

 
 

 
 

Current
 
 

 
 

 
 

 
 

 
 

Cash and cash equivalents
 
$
85,940

 
$
39

 
$
6

 
$

 
$
85,985

Receivables
 
 
 
 
 
 
 
 
 
 

Trade, less allowances
 
56

 
198,813

 
1,232

 

 
200,101

Related parties
 

 
660

 

 

 
660

Other
 
30

 
5,745

 
245

 

 
6,020

Inventories
 

 
415,449

 
5,610

 

 
421,059

Deferred income taxes
 
18,177

 

 
8

 

 
18,185

Prepaid expenses and other
 
8,921

 
715

 
71

 

 
9,707

 
 
113,124

 
621,421

 
7,172

 

 
741,717

 
 
 
 
 
 
 
 
 
 
 
Property and equipment, net
 
1,195

 
348,976

 
7,736

 

 
357,907

Timber deposits
 

 
6,461

 

 

 
6,461

Deferred financing costs
 
8,051

 

 

 

 
8,051

Goodwill
 

 
21,823

 

 

 
21,823

Intangible assets, net
 

 
10,253

 

 

 
10,253

Deferred income taxes
 
85

 

 

 

 
85

Other assets
 
36

 
8,174

 

 

 
8,210

Investments in affiliates
 
778,471

 

 

 
(778,471
)
 

Total assets
 
$
900,962

 
$
1,017,108

 
$
14,908

 
$
(778,471
)
 
$
1,154,507



20

Table of Contents


Boise Cascade Company and Subsidiaries
Consolidating Balance Sheets at March 31, 2014 (continued)
(unaudited)
 
 
Boise
Cascade Company (Parent)
 
Guarantor
Subsidiaries
 
Non-
guarantor
Subsidiaries
 
Eliminations
 
Consolidated
 
 
(thousands)
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 

 
 

 
 

 
 

 
 

Current
 
 

 
 

 
 

 
 

 
 

Accounts payable
 
 

 
 

 
 

 
 

 
 

Trade
 
$
6,082

 
$
190,552

 
$
846

 
$

 
$
197,480

Related parties
 

 
2,143

 

 

 
2,143

Accrued liabilities
 

 

 

 

 
 

Compensation and benefits
 
20,347

 
27,174

 
397

 

 
47,918

Interest payable
 
8,080

 

 

 

 
8,080

Other
 
2,658

 
27,015

 
913

 

 
30,586

 
 
37,167

 
246,884

 
2,156

 

 
286,207

 
 
 
 
 
 
 
 
 
 
 
Debt
 
 

 
 

 
 

 
 

 
 

Long-term debt
 
301,565

 

 

 

 
301,565

 
 
 
 
 
 
 
 
 
 
 
Other
 
 

 
 

 
 

 
 

 
 

Compensation and benefits
 
93,125

 

 

 

 
93,125

Other long-term liabilities
 
10,181

 
4,505

 

 

 
14,686

 
 
103,306

 
4,505

 

 

 
107,811

 
 
 
 
 
 
 
 
 
 
 
Commitments and contingent liabilities
 


 


 


 


 


 
 
 
 
 
 
 
 
 
 
 
Stockholders' equity
 
 

 
 

 
 

 
 

 
 

Preferred stock