What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-02-22 compared with 2021-02-22 · 152 added, 277 removed, 1004 unchanged (30% of the section changed)

11 unchanged sentences

General and administrative expenses 83,228 78,636 71,072

Loss on sale and curtailment of facilities 1,707 — 38,314

Loss on curtailment of facility — 1,707 —

Other (income) expense, net ( 765 ) ( 33 ) ( 783 )

102 unchanged sentences

Change in fair value of interest rate swaps ( 1,745 ) 2,426 2,963

Loss on sale and curtailment of facilities (excluding severance) 1,476 — 37,331

Loss on curtailment of facility (excluding severance) — 1,476 —

Other 712 169 ( 353 )

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Payments of deferred financing costs — ( 6,222 ) —

Treasury stock purchased — — ( 4,930 )

Other ( 1,463 ) ( 1,155 ) ( 488 )

10 unchanged sentences

Net income 80,925 80,925

Other comprehensive income 29,050 29,050

Other comprehensive loss ( 2,596 ) ( 2,596 )

Common stock issued 277 3 3

Treasury stock purchased 200 ( 4,930 ) ( 4,930 )

Stock-based compensation 7,973 7,973

6 unchanged sentences

Net income 174,979 174,979

Other comprehensive loss ( 2,596 ) ( 2,596 )

Other comprehensive income 49,170 49,170

Common stock issued 215 2 2

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As used in these consolidated financial statements, the terms "Boise Cascade," "we," and "our" refer to Boise Cascade Company and its consolidated subsidiaries.

We are one of the largest producers of engineered wood products (EWP) and plywood in North America and a leading United States (U.S.) wholesale distributor of building products.

We are one of the largest producers of engineered wood products (EWP) and plywood in North America and a leading United States wholesale distributor of building products.

We operate our business using two reportable segments:

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assumptions used in retirement, medical, and workers' compensation benefits;

assumptions used in the determination of right-of-use assets and related lease liabilities;

assumptions used in the determination of right-of-use (ROU) assets and related lease liabilities;

stock-based compensation;

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Cash and Cash Equivalents

Cash equivalents consist of short-term investments that have a maturity of three months or less at the date of purchase.

At December 31, 2020 and 2019, the majority of our cash and cash equivalents were invested in money market funds that are broadly diversified and invested in high-quality, short-duration securities, including commercial paper, certificates of deposit, U.S.

Cash equivalents consist of short-term investments that have an original maturity of three months or less at the date of purchase.

At December 31, 2021 and 2020, the majority of our cash and cash equivalents were comprised of money market funds that are broadly diversified and invested in high-quality, short-duration securities, including commercial paper, certificates of deposit, U.S.

government agency securities, and similar instruments.

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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).

See Note 12, Retirement and Benefit Plans, for the fair value measurements of our defined benefit plans' assets.

Financial Instruments

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The recorded values of accounts receivable and accounts payable approximate fair values based on their short-term nature.

At December 31, 2020 and 2019, the book value of our fixed-rate debt was $ 400.0 million and $ 350.0 million, respectively, and the fair value was estimated to be $ 432.0 million and $ 364.7 million, respectively.

At December 31, 2021 and 2020, the book value of our fixed-rate debt for each period was $ 400.0 million, and the fair value was estimated to be $ 420.0 million and $ 432.0 million, respectively.

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.

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Substantially all of our leases with initial terms greater than one year are for real estate, including distribution centers, corporate headquarters, land, and other office space.

Substantially all of these lease agreements have fixed payment terms based on the passage of time and are recorded in our Building Materials Distribution segment.

Substantially all of these lease agreements have fixed payment terms based on the passage of time and are recorded in our BMD segment.

Many of our leases include fixed escalation clauses, renewal options and/or termination options that are factored into our determination of lease term and lease payments when appropriate.

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Our lease agreements do not contain any residual value guarantees.

Right-of-use (ROU) assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.

ROU assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of fixed lease payments over the lease term.

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No triggering event was identified during the years ended December 31, 2021, 2020, and 2019.

For a description of the impairment losses recorded during the year ended December 31, 2018, see Note 7, Sale of Manufacturing Facilities.

Goodwill and Intangible Assets Impairment

We maintain two reporting units for purposes of our goodwill impairment testing, Wood Products and Building Materials Distribution, which are the same as our operating segments discussed in Note 17, Segment Information.

We maintain two reporting units for purposes of our goodwill impairment testing, Wood Products and BMD, which are the same as our operating segments discussed in Note 16, Segment Information.

We test goodwill in each of our reporting units and intangible assets with indefinite lives for impairment annually in the fourth quarter or sooner if events or changes in circumstances indicate that the carrying value of the asset may exceed fair value.

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We will recognize a liability in the period in which sufficient information becomes available to reasonably estimate the fair value of these obligations.

Pension Benefits

Several estimates and assumptions are required to record pension costs and liabilities, including discount rates, expected return on plan assets, expected rate of compensation increases, retirement and mortality rates, expected contributions, and other factors.

We review and update these assumptions annually unless a plan curtailment or other event occurs requiring that we update the estimates on an interim basis.

See Note 12, Retirement and Benefit Plans, for additional information related to our pension plan.

Deferred Software Costs

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"Other assets" in the Consolidated Balance Sheets includes $ 4.7 million and $ 4.1 million, respectively, of deferred software costs at December 31, 2021 and 2020.

During the year ended December 31, 2020, we amortized $ 1.9 million of deferred software costs.

We amortized $ 2.0 million of deferred software costs for both of the years ended December 31, 2019 and 2018.

We amortized $ 1.7 million, $ 1.9 million, and $ 2.0 million of deferred software costs for the years ended December 31, 2021, 2020, and 2019, respectively.

Labor Concentration and Unions

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As of December 31, 2021, we had ten collective bargaining agreements.

Two agreements covering approximately 740 employees at our Oakdale and Florien plywood plants are set to expire on July 15, 2021.

Two agreements covering approximately 760 employees at our Oakdale and Florien plywood plants expired on July 15, 2021, but the terms and conditions of these agreements remain in effect pending negotiation of new agreements.

One agreement covering approximately 115 employees at our Canadian EWP facility is set to expire on December 31, 2022.

We may not be able to renew these agreements or may renew them on terms that are less favorable to us than the current agreements.

If any of these agreements are not renewed or extended upon their termination, we could experience a material labor disruption, strike, or significantly increased labor costs at one or more of our facilities, either in the course of negotiations of a labor agreement or otherwise.

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New and Recently Adopted Accounting Standards

In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2020-04, Reference Rate Reform (Topic 848):

In November 2021, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2020-10, Government Assistance (Topic 832):

Disclosures by Business Entities about Government Assistance, which is intended to increase the transparency of government assistance including the disclosure of the types of assistance, the entity's accounting for the assistance, and the effect of the assistance on an entity's financial statements.

Government assistance can include tax credits, cash grants, grants of other assets, and project grants.

The updated guidance is effective for financial statements issued for annual periods beginning after December 15, 2021, with early application permitted.

We adopted this standard in fourth quarter of 2021 and it did not have a material effect on our financial statements and disclosures.

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which is intended to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to recognition of an acquired contract liability and payment terms and their effect on subsequent revenue recognized by the acquirer.

This ASU requires an acquirer to account for revenue contracts in accordance with Topic 606 as if it had originated the contracts.

To achieve this, an acquirer may assess how the acquiree applied Topic 606 to determine what to record for the acquired revenue contracts.

The updated guidance is effective for fiscal years beginning after December 15, 2022, with early adoption permitted.

We are currently evaluating the effects of this ASU on our consolidated financial statements and disclosures.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.

The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform.

In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848):

Scope , which refines the scope of Topic 848 and clarifies some of its guidance as it related to recent rate reform activities.

Our current contracts that reference LIBOR include certain debt instruments and interest rate swaps.

The amendments are effective for eligible contract modifications subsequent to March 12, 2020, and through December 31, 2022.

The adoption of this standard did not have a material effect on our financial statements, but we will assess any eligible contract modifications in the future.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes , which is intended to reduce complexity in accounting for income taxes.

This ASU removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application.

The updated guidance is effective for interim and annual reporting periods beginning after December 15, 2020, with early adoption permitted.

We adopted this standard in first quarter of 2021 and it did not have a material effect on our financial statements.

In August 2018, the FASB issued ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Topic 715-20):

Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans .

This ASU amends ASC 715 to remove disclosures that are no longer considered cost beneficial, clarifies the specific requirements of

disclosures, and adds disclosure requirements identified as relevant related to defined benefit pension and other postretirement plans.

The ASU's changes related to disclosures are part of the FASB's disclosure framework project.

The updated guidance is effective retrospectively for annual reporting periods ending after December 15, 2020, with early adoption permitted.

We adopted this standard in fourth quarter of 2020 and it did not have a material effect on our financial statement disclosures.

The adoption of these standards did not have a material effect on our financial statements, but we will assess any eligible contract modifications in the future.

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.

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Our Wood Products segment manufactures EWP, consisting of laminated veneer lumber (LVL), I-joists, and laminated beams, which are structural products used in applications where extra strength and consistent quality are required, such as headers and beams.

LVL is also used in the manufacture of I-joists, which are assembled by combining a vertical web of oriented strand board (OSB) with top and bottom LVL or solid wood flanges.

LVL is also used in the manufacture of I-joists, which are assembled by combining a vertical web of OSB with top and bottom LVL or solid wood flanges.

In addition, we manufacture structural, appearance, and industrial plywood panels, and ponderosa pine lumber.

Our wood products are used primarily in new residential construction, residential repair-and-remodeling markets, and light commercial construction.

The majority of our wood products are sold to leading wholesalers (including our Building Materials Distribution segment), home improvement centers, retail lumberyards, and industrial converters.

The majority of our wood products are sold to leading wholesalers (including our BMD segment), home improvement centers, dealers, and industrial converters.

For EWP, plywood and veneer, byproducts, and other products, we transfer control and recognize a sale when we ship the product from our manufacturing facility to our customer.

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Building Materials Distribution Segment

Our Building Materials Distribution segment is a leading national stocking wholesale distributor of building materials.

Our BMD segment is a leading national stocking wholesale distributor of building materials.

We distribute a broad line of building materials, including OSB, plywood, and lumber (collectively referred to as commodities);

general line items such as siding, composite decking, doors, metal products, insulation, and roofing;

Except for EWP, we purchase most of these building materials from third-party suppliers and market them primarily to retail lumberyards, home improvement centers, and specialty distributors that then sell the products to the final end customers, who are typically homebuilders, independent contractors, and homeowners engaged in residential construction projects.

Substantially all of Building Materials Distribution's EWP is sourced from our Wood Products segment.

Except for EWP, we purchase most of these building materials from third-party suppliers and market them primarily to dealers, home improvement centers, and specialty distributors that then sell the products to the final end customers, who are typically homebuilders, independent contractors, and homeowners engaged in residential construction projects.

Substantially all of BMD's EWP is sourced from our Wood Products segment.

We sell products using two primary distribution methods:

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Rebates an d Cash Discounts

Rebates are provided to our customers and our customers' customers based on the volume of their purchases, among other factors such as customer loyalty, conversion, and commitment.

Rebates are provided to our customers and our customers' customers based on the volume of their purchases, among other factors such as customer loyalty, conversion, and commitment, as well as temporary protection from price increases.

We provide the rebates to increase the sell-through of our products.

Rebates are generally estimated based on the expected amount to be paid and recorded as a decrease in "Sales." At December 31, 2020 and 2019, we had $ 56.3 million and $ 49.4 million, respectively, of rebates payable to our customers

recorded in "Accrued liabilities, Other" on our Consolidated Balance Sheets .

Rebates are generally estimated based on the expected amount to be paid and recorded as a decrease in "Sales." At December 31, 2021 and 2020, we had $ 138.1 million and $ 56.3 million, respectively, of rebates payable to our customers recorded in "Accrued liabilities, Other" on our Consolidated Balance Sheets .

We also estimate expected cash discounts on trade accounts receivable based on an analysis of historical experience and record cash discounts as a decrease in "Sales." We adjust our estimate of revenue at the earlier of when the probability of rebates paid and cash discounts provided ch anges or when the amounts become fixed.

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In our Wood Products segment, we view our shipping and handling costs as a cost of the manufacturing process and the movement of product to our end customers.

For our Building Materials Distribution segment, costs related to shipping and handling of $ 177.1 million, $ 169.2 million, and $ 156.5 million for the years ended December 31, 2020, 2019, and 2018, respectively, are included in "Selling and distribution expenses" in our Consolidated Statements of Operations.

In our Building Materials Distribution segment, our activities relate to the purchase and resale of finished product, and excluding shipping and handling costs from “Materials, labor, and other operating expenses (excluding depreciation)” provides us a clearer view of our operating performance and the effectiveness of our sales and purchasing functions.

For our BMD segment, costs related to shipping and handling of $ 195.7 million, $ 177.1 million, and $ 169.2 million for the years ended December 31, 2021, 2020, and 2019, respectively, are included in "Selling and distribution expenses" in our Consolidated Statements of Operations.

In our BMD segment, our activities relate to the purchase and resale of finished product, and excluding shipping and handling costs from “Materials, labor, and other operating expenses (excluding depreciation)” provides us a clearer view of our operating performance and the effectiveness of our sales and purchasing functions.

Our payment terms vary by the type of customer and the products offered.

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Unrecognized tax benefits 2 87 ( 178 )

Benefit from enactment of the Tax Act (b) — — ( 3,806 )

Tax credits ( 620 ) ( 712 ) ( 725 )

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Upon Plan Termination, these stranded tax effects of $ 38.8 million were required to be released into income tax expense under GAAP.

(b) As of December 31, 2018, we completed our assessment of the effects of the Tax Act on our financial statements.

In connection with our analysis of the Tax Act, we recorded a discrete tax benefit of $ 3.8 million during the year ended December 31, 2018.

The $ 3.8 million reduction in income tax expense resulted from the remeasurement of deferred income taxes to the new federal statutory

rate of 21 %, which mostly related to a $ 20.0 million discretionary pension contribution made during 2018, for which we received a tax deduction at the 2017 federal income tax rate of 35 %.

During the year ended December 31, 2020, cash paid for taxes, net of refunds received, was $ 75.1 million.

During the years ended December 31, 2021 and 2020, cash paid for taxes, net of refunds received, was $ 260.1 million and $ 75.1 million, respectively.

During the year ended December 31, 2019, income tax refunds received, net of cash taxes paid, was $ 1.4 million.

During the year ended December 31, 2018, cash paid for taxes, net of refunds received, was $ 14.5 million.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts for income tax purposes.

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Deferred tax liabilities $ ( 63,497 ) $ ( 77,029 )

Total deferred tax liabilities, net $ ( 10,803 ) $ ( 18,742 )

Total deferred tax assets (liabilities), net $ 2,948 $ ( 10,803 )

As of December 31, 2021, we have foreign net operating loss carryforwards of $ 11.1 million, which if unused, will expire in years 2032 through 2041.

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As of December 31, 2021, 2020, and 2019, we had $ 1.8 million, $ 1.8 million, and $ 1.7 million, respectively, of unrecognized tax benefits recorded on our Consolidated Balance Sheets, excluding interest and penalties.

unrecognized tax benefits recorded, $ 1.8 million, $ 1.7 million, and $ 1.8 million (net of the federal benefit for state taxes), respectively, would impact the effective tax rate if recognized.

Of the total unrecognized tax benefits recorded, $ 1.8 million, $ 1.8 million, and $ 1.7 million (net of the federal benefit for state taxes), respectively, would impact the effective tax rate if recognized.

We recognize interest and penalties related to uncertain tax positions as income tax expense in our Consolidated Statements of Operations.

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Net income per common share - Diluted $ 17.97 $ 4.44 $ 2.06

The computation of the dilutive effect of other potential common shares excludes stock awards representing no shares of common stock in the year ended December 31, 2020, and 0.1 million shares of common stock in both the years ended December 31, 2019 and 2018.

The computation of the dilutive effect of other potential common shares excludes stock awards representing no shares of common stock in both the years ended December 31, 2021 and 2020, and 0.1 million shares of common stock in the year ended December 31, 2019.

Under the treasury stock method, the inclusion of these stock awards would have been antidilutive.

Curtailment of Manufacturing Facilities

Curtailment of Manufacturing Facility

On February 20, 2020, we decided to permanently curtail I-joist production at our Roxboro, North Carolina facility by March 31, 2020.

As a result of the curtailment, we recorded $ 15.0 million of accelerated depreciation during first quarter 2020 to fully depreciate the curtailed I-joist assets.

In addition, we recorded $ 1.7 million of various closure-related costs in "Loss on sale and curtailment of facilities" in our Consolidated Statements of Operations.

On November 2, 2018 , we decided to permanently curtail LVL production at our Roxboro, North Carolina facility by December 31, 2018 .

As a result of the curtailment, we recorded $ 55.0 million of accelerated depreciation during fourth quarter 2018 to fully depreciate the curtailed LVL production assets.

In addition, we recorded $ 2.6 million of construction in progress

and spare parts write-offs, as well as $ 0.2 million of severance-related expenses, recorded in "Loss on sale and curtailment of facilities" in our Consolidated Statements of Operations.

Sale of Manufacturing Facilities

In December 2018, we committed to sell a hardwood plywood facility located in Moncure, North Carolina, and subsequently entered into a definitive sale agreement in January 2019 (the Moncure Sale).

This facility generated net sales and operating loss of approximately $ 5.5 million and $ 1.4 million, respectively, during the year ended December 31, 2019, and net sales and operating loss of approximately $ 32.7 million and $ 7.0 million, respectively, during the year ended December 31, 2018.

These results are included in the operating results of our Wood Products segment.

On March 1, 2019, we closed on the Moncure Sale and received proceeds of $ 2.5 million.

The disposal group met the criteria to be classified as held for sale in December 2018.

Upon classification as held for sale, we discontinued depreciation of the long-lived assets, and performed an assessment of impairment to identify and expense any excess of carrying value over fair value less costs to sell.

As a result, we recorded pre-tax impairment and sale-related losses of $ 24.0 million during the year ended December 31, 2018, recorded in "Loss on sale and curtailment of facilities" in our Consolidated Statements of Operations.

On September 10, 2018, we entered into an agreement to sell two lumber mills and a particleboard plant located in Northeast Oregon (the Sale).

These facilities generated net sales and operating loss of approximately $ 74.1 million and $ 0.2 million, respectively, for the year ended December 31, 2018.

These results are included in the operating results of our Wood Products segment.

On November 2, 2018, we closed on the Sale and received proceeds of $ 15.0 million.

As a result, we recorded a pre-tax loss of $ 11.5 million during the year ended December 31, 2018, recorded in "Loss on sale and curtailment of facilities" in our Consolidated Statements of Operations.

In addition, we recorded $ 1.7 million of various closure-related costs in "Loss on curtailment of facility" in our Consolidated Statements of Operations.

During the year ended December 31, 2019, our wholly owned subsidiary, Boise Cascade Building Materials Distribution, L.L.C., completed the acquisition of a wholesale building material distribution location in Birmingham, Alabama (the Acquisition).

The purchase price of the Acquisition was $ 15.7 million, including a post-closing adjustment of less than $ 0.1 million based upon a working capital target.

During the year ended December 31, 2018, our wholly owned subsidiary, Boise Cascade Building Materials Distribution, L.L.C., completed the acquisition of wholesale building material distribution locations in Nashville, Tennessee, Medford, Oregon, and Cincinnati, Ohio (collectively, the 2018 Acquisitions).

The purchase price of the 2018 Acquisitions was $ 25.5 million.

Goodwill and Intangible Assets

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Asset-based credit facility term loan due 2025 50,000 50,000

Term loan due 2026 — 45,000

4.875% senior notes due 2030 400,000 400,000

5.625% senior notes due 2024 — 350,000

Deferred financing costs ( 5,372 ) ( 6,208 )

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On May 15, 2015, Boise Cascade and its principal operating subsidiaries, Boise Cascade Wood Products, L.L.C., and Boise Cascade Building Materials Distribution, L.L.C., as borrowers, and Boise Cascade Wood Products Holdings Corp., as guarantor, entered into an Amended and Restated Credit Agreement, as amended, (Amended Agreement) with Wells Fargo Capital Finance, LLC, as administrative agent, and the banks named therein as lenders.

On March 13, 2020, we entered into the sixth amendment to the Amended Agreement to reduce the maximum amount available for revolving loans from $ 370 million to $ 350 million (Revolving Credit Facility) and to extend the maturity date of the Credit Agreement from May 1, 2022, to March 13, 2025.

The term loan within the Amended Agreement remains at $ 50.0 million (ABL Term Loan).

borrowings under our Revolving Credit Facility and ABL Term Loan are payable monthly.

The Amended Agreement includes a $ 350 million senior secured asset-based revolving credit facility (Revolving Credit Facility) and a $ 50.0 million term loan (ABL Term Loan) maturing on March 13, 2025.

Interest on borrowings under our Revolving Credit Facility and ABL Term Loan are payable monthly.

Borrowings under the Amended Agreement are constrained by a borrowing base formula dependent upon levels of eligible receivables and inventory reduced by outstanding borrowings and letters of credit (Availability).

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These letters of credit and borrowings, if any, reduce Availability under the Revolving Credit Facility by an equivalent amount.

During the year ended December 31, 2021, the minimum and maximum borrowings under the Revolving Credit Facility were zero and $ 28.0 million, respectively, and the average interest rate on borrowings was approximately 1.37 %.

ABL Term Loan

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Patronage credits are recorded as a reduction to interest expense in the year earned.

After giving effect to expected patronage distributions, the effective average net interest rate on the ABL Term Loan was approximately 1.3 % during the year ended December 31, 2020.

On March 30, 2016 (Closing Date), Boise Cascade and its principal operating subsidiaries, Boise Cascade Wood Products, L.L.C., and Boise Cascade Building Materials Distribution, L.L.C., as borrowers, and the guarantors party thereto, entered into a term loan agreement, as amended, (Term Loan Agreement) with American AgCredit, PCA, as administrative agent and sole lead arranger, and other banks in the Farm Credit system named therein as lenders.

The original Term Loan

Agreement was for a $ 75.0 million secured term loan (Term Loan).

In December 2016, we repaid $ 30 million of the Term Loan.

In July 2020, we paid off the remaining balance on the Term Loan of $ 45.0 million, thus satisfying and discharging our obligations under the Term Loan.

Interest rates under the Term Loan Agreement were based, at our election, on either the LIBOR or a base rate, as defined in the Term Loan Agreement, plus a spread over the index.

The applicable spread for the Term Loan ranges from 1.875 % to 2.125 % for LIBOR rate loans, and 0.875 % to 1.125 % for base rate loans, both dependent on our Interest Coverage Ratio (as defined in the Term Loan Agreement).

During the year ended December 31, 2020, the average interest rate on the Term Loan was approximately 2.82 %.

We have received and expect to receive patronage credits through the period in which the Term Loan was outstanding.

After giving effect to expected patronage distributions, the effective average net interest rate on the Term Loan was approximately 1.8 %.

On August 29, 2016, Boise Cascade issued $ 350 million of 5.625 % senior notes due September 1, 2024 (2024 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 2024 Notes was payable semiannually in arrears on March 1 and September 1.

In connection with the issuance of the $ 400 million of 4.875 % senior notes due July 1, 2030 (2030 Notes) described below, we commenced a tender offer to purchase any and all of our $ 350 million aggregate principal amount of 2024 Notes then outstanding.

On July 27, 2020, we accepted for purchase an aggregate principal amount of $ 212.5 million of the 2024 Notes that were tendered.

On September 1, 2020, we redeemed the remaining $ 137.5 million in aggregate principal amount of the 2024 Notes outstanding and our obligations under the indenture, pursuant to which the 2024 Notes were issued, were satisfied and discharged.

In connection with these transactions, we recognized a pre-tax loss on the extinguishment of debt of $ 14.0 million during the year ended December 31, 2020.

The loss includes $ 10.8 million of debt extinguishment premium payments and $ 3.2 million for the write-off of unamortized deferred financing costs.

On July 27, 2020, we issued the 2030 Notes through a private placement that was exempt from the registration requirements of the Securities Act.

The 2030 Notes mature on July 1, 2030, with interest payable semiannually in arrears on January 1 and July 1, commencing on January 1, 2021.

After giving effect to expected patronage

distributions, the effective average net interest rate on the ABL Term Loan was approximately 0.9 % during the year ended December 31, 2021.

On July 27, 2020, we issued $ 400 million of 4.875 % senior notes due July 1, 2030 (2030 Notes) through a private placement that was exempt from the registration requirements of the Securities Act.

Interest on our 2030 Notes is payable semiannually in arrears on January 1 and July 1.

The 2030 Notes are guaranteed by each of our existing and future direct or indirect domestic subsidiaries that is a guarantor under our Amended Agreement.

Following the sale of our 2030 Notes, as noted above, we used the net proceeds of the sale to repurchase or redeem any and all of our 2024 Notes, to pay off our Term Loan of $ 45.0 million, and to pay related financing fees and expenses related to the offering of the 2030 Notes and incurred in connection with the repurchase or redemption of the 2024 Notes.

The 2030 Notes are senior unsecured obligations and rank equally with all of the existing and future senior indebtedness of Boise Cascade Company and of the guarantors, senior to all of their existing and future subordinated indebtedness, effectively subordinated to all of their present and future senior secured indebtedness (including all borrowings with respect to our Amended Agreement to the extent of the value of the assets securing such indebtedness), and structurally subordinated to the indebtedness of any subsidiaries that do not guarantee the 2030 Notes.

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Interest Rate Swaps

For information on interest rate swaps, see Interest Rate Risk and Interest Rate Swaps of Note 16, Financial Instrument Risk.

For information on interest rate swaps, see Interest Rate Risk of Note 15, Financial Instrument Risk.

Cash Paid for Interest

For the years ended December 31, 2021, 2020, and 2019, cash payments for interest were $ 21.5 million, $ 22.2 million, and $ 24.1 million, respectively.

Adoption of ASC Topic 842, "Leases"

On January 1, 2019, we adopted Topic 842 using the modified retrospective transition method and used the effective date as our date of initial application.

Consequently, leases for reporting periods beginning after January 1, 2019 are presented under Topic 842, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 840.

The components of lease expense were as follows:

Year Ended December 31

2021 2020 2019

Operating lease cost $ 13,817 $ 13,339 13,541

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Year Ended December 31

2021 2020 2019

Cash paid for amounts included in the measurement of lease liabilities

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Weighted-average discount rate

Operating leases (a) 6.4 % 6.5 %

Operating leases 5.9 % 6.4 %

Finance leases 7.5 % 7.7 %

___________________________________

(a) Upon adoption of the new lease standard, discount rates used for existing leases were established at January 1, 2019.

As of December 31, 2021, our minimum lease payment requirements for noncancelable operating and finance leases are as follows:

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Long-term lease obligations $ 55,263 $ 31,898

As of December 31, 2020, the minimum lease payment amount for leases signed but not yet commenced was $ 7.3 million.

Disclosures Related to Periods Prior to Adoption of ASC Topic 842, "Leases"

Rental expense for operating leases was $ 18.2 million for the year ended December 31, 2018, and sublease rental income was not material.

During the year ended December 31, 2018, we recorded two capital leases for distribution centers with initial lease terms of 13 and 20 years, respectively, in the amount of $ 18.9 million, which represents non-cash investing and financing activities.

Retirement and Benefit Plans

Our retirement plans consist of noncontributory defined benefit pension plans, contributory defined contribution savings plans, a deferred compensation plan, and a multiemployer health and welfare plan.

Our retirement plans consist of noncontributory defined benefit pension plans, contributory defined contribution savings plans, and deferred compensation plans.

Prior to 2021, our retirement plans also included a multiemployer health and welfare plan.

Defined Benefit Plans

Some of our employees are covered by noncontributory defined benefit pension plans, including a qualified defined benefit pension plan (Pension Plan) which was eliminated in December 2020 (Plan Termination).

Benefits under the Pension Plan have been frozen for salaried employees since 2009 and substantially all eligible hourly employees since 2012.

The following summarizes recent activity of each individual plan:

Some of our current or former employees are covered by noncontributory defined benefit pension plans.

This includes nonqualified salaried pension plans, which were frozen so that no future benefits have accrued since December 31, 2009.

We also had a qualified defined benefit pension plan (Pension Plan) that was eliminated in December 2020 (Plan Termination).

Benefits under the Pension Plan were frozen for salaried employees since 2009 and substantially all eligible hourly employees since 2012.

The following summarizes the recent Pension Plan activity:

• In conjunction with the Plan Termination, we purchased a buy-in group annuity contract (Buy-In) from The Prudential Insurance Company of America (Prudential), which was funded with plan assets on August 6, 2020.

In addition, we froze accrual of all remaining benefits of hourly employees on our Pension Plan effective August 31, 2020.

In anticipation of the Plan Termination, the Buy-In funded lump-sum payments made to eligible plan participants at their election, on or about December 2, 2020, after which, neither the Pension Plan nor Prudential has any further obligations to those participants.

After completion of the lump-sum program, we exercised our option to convert the Buy-In to a buy-out group annuity contract (Buy-Out) for no additional premium.

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As a result of the transaction, we recognized a non-cash settlement charge of $ 1.3 million in third quarter 2019.

• On April 25, 2018, and August 10, 2018, we transferred $ 151.8 million and $ 124.8 million, respectively, of our Pension Plan assets to Prudential for the purchase of group annuity contracts.

Under the arrangements, Prudential assumed ongoing responsibility for administration and benefit payments for over 60 % of our U.S.

qualified pension plan projected benefit obligations.

As a result of the transfers of pension plan assets, we recorded settlement expense in second and third quarters 2018 of $ 12.0 million and $ 11.3 million, respectively.

See "Assumptions" below for the impact on our discount rate and expected return on plan asset assumptions.

We also have nonqualified salaried pension plans, which were frozen so that no future benefits have accrued since December 31, 2009.

Defined Contribution Plans

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Defined Contributory Trust

We participated in a multiemployer defined contributory trust plan for certain union hourly employees since 2013.

We have participated in a multiemployer defined contributory trust plan for certain union hourly employees since 2013.

As of December 31, 2021, 2020, and 2019 approximately 760 , 735 , and 1,215 , respectively, of our employees participated in this plan.

For certain of these employees, per the terms of the representative collective bargaining agreements, we were required to contribute $ 0.90 , $ 0.90 , and $ 0.85 , respectively, per hour per active employee during 2020, 2019, and 2018.

For certain other of these employees, we were required to contribute 4.5 % of the employee's earnings during 2020, 2019, and 2018.

Effective in 2020, through collective bargaining negotiations, some of our employees no longer participate in this plan.

For certain of these employees, per the terms of the representative collective bargaining agreements, we were required to contribute 4.5 % of the employee's earnings during 2021, 2020, and 2019.

For certain other of these employees, we were required to contribute $ 0.90 per hour per active employee during 2020 and 2019.

Company contributions to the multiemployer defined contributory trust plan were $ 1.9 million, $ 2.4 million, and $ 2.6 million, respectively, for each of the years ended December 31, 2021, 2020, and 2019.

Effective fourth quarter 2020, through collective bargaining negotiations, some of our employees no longer participate in this plan.

In addition, for the remaining plan participants, we expect to contribute 4.5 % of the employees earnings.

After required contributions, we have no further obligation to the plan.

The plan and its assets are managed by a joint board of trustees.

Deferred Compensation Plan

We sponsor a deferred compensation plan.

Under the plan, participating employees and directors irrevocably elect each year to defer receipt of a portion of their compensation.

Deferred Compensation Plans

We sponsor deferred compensation plans.

Under the plans, participating employees and directors irrevocably elect each year to defer receipt of a portion of their compensation.

A participant's account is credited with imputed interest at a rate equal to 130 % of Moody's Composite Average of Yields on Corporate Bonds.

Participants may receive payment of their deferred compensation plan balance in a lump sum or in monthly installments over a specified period of years following the termination of their employment with the company.

In addition, subject to plan revisions that became effective January 1, 2019, participants may also receive distributions of their deferred compensation accounts while still employed by the company.

The deferred compensation plan is unfunded;

In addition, subject to plan revisions that became effective January 1, 2019, employee participants may also receive distributions of their deferred compensation accounts while still employed by the company.

The deferred compensation plans are unfunded;

therefore, benefits are paid from our general assets.

For the years ended December 31, 2020, 2019, and 2018, we recognized $ 1.0 million, $ 1.1 million, and $ 1.0 million, respectively, of interest expense related to the plan.

At December 31, 2020 and 2019, we had liabilities related to the plan of $ 5.9 million and $ 2.1 million, respectively, recorded in "Accrued liabilities, Compensation and benefits" and $ 19.8 million and $ 21.6 million, respectively, recorded in "Other, Compensation and benefits" on our Consolidated Balance Sheets.

For the years ended December 31, 2021, 2020, and 2019, we recognized $ 0.9 million, $ 1.0 million, and $ 1.1 million, respectively, of interest expense related to the plans.

At December 31, 2021 and 2020, we had liabilities related to the plans of $ 3.3 million and $ 5.9 million, respectively, recorded in "Accrued liabilities, Compensation and benefits" and $ 21.1 million and $ 19.8 million, respectively, recorded in "Other, Compensation and benefits" on our Consolidated Balance Sheets.

Multiemployer Health and Welfare Plan

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Effective November 30, 2020, through collective bargaining negotiations, our employees no longer participate in this plan.

As of December 31, 2019 and 2018, approximately 475 and 604 , respectively, of our employees participated in this plan.

Per the terms of the representative collective bargaining agreements, we were required to contribute $ 6.10 per hour per active employee from January 1, 2018, to May 31, 2018.

From June 1, 2018, to May 31, 2019, we were required to contribute $ 6.40 per hour per active employee.

As of December 31, 2019, approximately 475 of our employees participated in this plan.

Per the terms of the representative collective bargaining agreements, we were required to contribute $ 6.40 per hour per active employee from June 1, 2018, to May 31, 2019.

From June 1, 2019, to May 31, 2020, we were required to contribute $ 6.70 per hour per active employee.

From June 1, 2020, to November 30, 2020, we were required to contribute $ 7.00 per hour per active employee.

During the years ended December 31, 2020, 2019, and 2018 company contributions to the multiemployer health and welfare plan were $ 5.8 million, $ 6.7 million, and $ 7.7 million, respectively.

During the years ended December 31, 2020 and 2019, company contributions to the multiemployer health and welfare plan were $ 5.8 million and $ 6.7 million, respectively.

After required contributions, we have no further obligation to the plan.

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Defined Benefit Obligations and Funded Status

At December 31, 2021 and 2020, our only remaining defined benefit plan obligations relate to unfunded nonqualified salaried pension plans that were frozen so that no future benefits have accrued since December 31, 2009.

The following table, which includes only company-sponsored defined benefit plans, reconciles the beginning and ending balances of our projected benefit obligation and fair value of plan assets.

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(a) Plan settlement expense during the years ended December 31, 2020, 2019, and 2018 includes $ 6.3 million, $ 1.3 million and $ 23.3 million, respectively, of settlement charges related to the transfers of pension plan assets to Prudential for the purchase of group annuity contracts, as well as lump-sum payments in 2020.

The assumptions used in accounting for our plans are estimates of factors that will determine, among other things, the amount and timing of future contributions.

The following table presents the assumptions used in the measurement of our benefit obligations:

Weighted average assumptions

Discount rate 2.00 % 3.10 %

Rate of compensation increases (a) — % — %

(a) Plan settlement expense during the years ended December 31, 2020, and 2019 includes $ 6.3 million and $ 1.3 million, respectively, of settlement charges related to the transfers of pension plan assets to Prudential for the purchase of group annuity contracts, as well as lump-sum payments in 2020.

Assumptions for Qualified Defined Benefit Pension Plan

As discussed above, we eliminated our qualified defined benefit pension plan in December 2020.

The historical assumptions used in accounting for our qualified defined benefit pension plan were estimates of factors that determined, among other things, the amount and timing of contributions.

The following table presents the assumptions used in the measurement of net periodic benefit cost:

2020 2019 2018 (b)

Weighted average assumptions

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(a) Pension benefits for all salaried employees are frozen, resulting in an assumption for the rate of compensation increase of zero .

(b) Prior to the remeasurements of our qualified defined benefit pension plan on April 25, 2018, and August 10, 2018, the discount rates were 3.40 % and 4.05 %, respectively, and the expected rates of return on plan assets were 4.75 % and 4.50 %, respectively.

The discount rate and expected rate of return on plan assets after the August 10, 2018 remeasurement were 3.95 % and 3.85 %, respectively.

Discount Rate Assumption .

The discount rate reflects the current rate at which the pension obligations could be settled at each measurement date of the plan.

The discount rate reflected the current rate at which the pension obligations could have been settled at each measurement date of the plan.

In all years presented, the discount rates were determined by matching the expected plan benefit payments against a spot rate yield curve constructed to replicate the yields of Aa-graded corporate bonds.

Asset Return Assumption .

Prior to the Plan Termination, we based our expected long-term rate of return on plan assets on a weighted average of our expected returns for the major asset classes in which we invest.

Prior to the Plan Termination, we based our expected long-term rate of return on plan assets on a weighted average of our expected returns for the major asset classes in which assets were invested.

The weights we assigned each asset class were based on our investment strategy.

Expected returns for the asset classes were based on long-term historical returns, inflation expectations, forecasted gross domestic product, earnings growth, and other economic factors.

We developed our return assumption based on a review of the fund manager's estimates of future market expectations by broad asset class and expected long-term rates of return from external investment managers.

developed our return assumption based on a review of the fund manager's estimates of future market expectations by broad asset class and expected long-term rates of return from external investment managers.

Retirement and Mortality Rates .

These rates are developed to reflect actual and projected plan experience.

These rates were developed to reflect actual and projected plan experience.

In 2020, we used the Pri-2012 mortality tables projected forward using MP-2020 on a generational basis.

In 2019, we used the Pri-2012 mortality tables projected forward using MP-2019 on a generational basis.

Fair Value Measurements of Plan Assets

The following table sets forth by level, within the fair value hierarchy, the pension plan assets, by major asset category, at fair value at December 31, 2019:

December 31, 2019

Quoted Prices in Active Markets for Identical Assets

(Level 1) Significant Other Observable Inputs

(Level 2) (a) Significant Unobservable Inputs

(Level 3) Total

Fixed-income securities (b) $ — $ 152,530 $ — $ 152,530

Multi-asset class fund (c) — 16,361 — 16,361

Total investments at fair value $ — $ 168,891 $ — 168,891

Receivables and accrued expenses, net ( 240 )

Fair value of plan assets $ 168,651

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(a) Securities represent common collective trusts managed and valued by Russell Trust Company, the administrator of the funds.

While the underlying assets are actively traded on an exchange, the funds are not.

The investments in equity and fixed-income securities are considered to have a readily determinable fair value because the fair value per share (unit) is determined and published and is the basis for current transactions.

We had the ability to redeem these securities with a 1 day notice.

(b) Invested in the Russell Long Duration Fixed Income Fund, which is designed to provide current income and capital appreciation through diversified strategies including sector rotation, modest interest rate timing, security selection, and tactical use of high-yield, emerging market bonds and other non-index securities.

In addition, our investments in this category included the Russell 14 Year LDI Fixed Income Fund.

We also were invested in the Russell 8 Year LDI Fixed Income Fund.

These LDI funds invest primarily in investment grade bonds that closely match those found in discount rate curves used to value U.S.

pension liabilities and seeks to provide additional incremental return through modest interest rate timing, security selection, and tactical use of non-credit sectors.

In addition, our investments in this category included Russell STRIPS Fixed Income Funds with duration profiles of 10 , 15 , and 28 years.

These funds invest in a subset of the STRIPS universe with a similar duration profile as their respective Bloomberg Barclays U.S.

STRIPS Index.

(c) Invested in the Russell Multi-Asset Core Plus Fund, which is designed to provide long-term growth by providing a diversified portfolio of investments that has an overall strategic allocation of 75 % global equity, 15 % marketable real assets, and 10 % global fixed income.

Since 2012, we contributed a total of four company-owned real property locations from our Building Materials Distribution segment to our Pension Plan, which we then leased from the Pension Plan.

Since 2012, we contributed a total of four company-owned real property locations from our BMD segment to our Pension Plan, which we then leased from the Pension Plan.

These contributions constituted related party transactions.

We determined that these contributed properties did not meet the accounting definition of a plan asset within the scope of Accounting Standards Codification 715, Compensation - Retirement Benefits , and, therefore, were not included in plan assets and had no impact on the net pension liability.

However, the lease payments and payments for the repurchase of the contributed properties are recorded as pension contributions.

During the years ended December 31, 2020, 2019, and 2018, we repurchased two , one , and one , respectively, of the real property locations we previously had contributed to our Pension Plan for approximately $ 11.4 million (the 2020 Repurchases), $ 3.6 million (the 2019 Repurchase) and $ 4.0 million (the 2018 Repurchase), respectively, which were recorded as pension contributions.

Our practice is to fund the pension plans in amounts sufficient to meet the minimum requirements of U.S.

federal laws and regulations.

For the years ended December 31, 2020, 2019, and 2018, we made cash contributions to our pension plans totaling $ 12.8 million, $ 5.2 million, and $ 26.1 million, respectively.

However, the lease payments and payments for the repurchase of the contributed properties were recorded as pension contributions.

During the years ended December 31, 2020 and 2019, we repurchased two and one , respectively, of the real property locations we previously had contributed to our Pension Plan for approximately $ 11.4 million (the 2020 Repurchases) and $ 3.6 million (the 2019 Repurchase), respectively, which were recorded as pension contributions.

For the year ended December 31, 2021, we paid $ 0.5 million in cash to the nonqualified pension plan participants.

For the years ended December 31, 2020 and 2019, we made cash contributions to both our qualified and nonqualified pension plans totaling $ 12.8 million and $ 5.2 million, respectively.

During 2020, cash contributions include $ 11.4 million for the 2020 Repurchases and $ 0.6 million of lease payments.

During 2019, cash contributions include $ 3.6 million for the 2019 Repurchase and $ 1.1 million of lease payments.

During 2018, cash contributions include a $ 20.0 million discretionary contribution, $ 4.0 million for the 2018 Repurchase, and $ 1.5 million of lease payments.

After the Plan Termination, we will have no federally required contributions to the Pension Plan.

For 2021, we expect to make cash contributions of approximately $ 0.4 million to our nonqualified pension plans, reflecting benefit payments to plan participants.

Nonqualified pension benefit payments are paid by the company.

The following benefit payments are expected to be paid to nonqualified plan participants (in thousands):

Years 2026-2030 1,373

Since Plan Termination, we have no federally required contributions to the Pension Plan.

All nonqualified pension benefit payments are paid by company, and we expect to make cash payments of approximately $ 1 million to the nonqualified pension plan participants in 2022.

Long-Term Incentive Compensation Plans

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In April 2016, we adopted the 2016 Boise Cascade Omnibus Incentive Plan (2016 Incentive Plan), which superseded the 2013 Incentive Compensation Plan (2013 Incentive Plan).

After the effective date of the 2016 Incentive Plan, no awards were granted under the 2013 Incentive Plan.

After the effective date of the 2016 Incentive Plan, no awards may be granted under the 2013 Incentive Plan.

The 2016 Incentive Plan provides for grants of stock options, stock appreciation rights, restricted stock, other stock-based awards, cash-based compensation, and performance awards.

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In 2021, we granted 73,265 PSUs to our officers and other employees, subject to performance and service conditions, at a weighted average grant date fair value of $ 52.45 .

For the officers, the number of shares actually awarded will range from 0 % to 200 % of the target amount, dependent upon Boise Cascade's 2020 return on invested capital (ROIC), as approved by our Compensation Committee in accordance with the related grant agreement.

For the other employees, the number of shares actually awarded will range from 0 % to 200 % of the target amount, depending upon Boise Cascade's 2020 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 ROIC and EBITDA components contain a performance condition, we record compensation expense over the requisite service period based on the most probable number of shares expected to vest.

For the officers, the number of shares actually awarded will range from 0 % to 200 % of the target amount, depending upon Boise Cascade's 2021 return on invested capital (ROIC), as approved by our Compensation Committee in accordance with the related grant agreement.

We define ROIC as net operating profit after taxes (NOPAT) divided by average invested capital (based on a rolling thirteen-month average).

We define NOPAT as net income plus after-tax financing expense.

Invested capital is defined as total assets plus capitalized lease expense, less current liabilities, excluding short-term debt.

For the other employees, the number of shares actually awarded will range from 0 % to 200 % of the target amount, depending upon Boise Cascade's 2021 EBITDA, defined as income before interest (interest expense and interest income), income taxes, and depreciation and amortization, as approved by our Compensation Committee in accordance with the related grant agreement.

Because the PSUs contain a performance condition, we record compensation expense over the requisite service period based on the most probable number of shares expected to vest.

In 2020 and 2019, we granted 94,850 and 110,923 PSUs, at a weighted average grant date fair value of $ 36.45 and $ 29.48 , respectively, to our officers and other employees, subject to performance and service conditions.

During the 2019 performance period, officers and other employees earned 93 % and 96 %, respectively, of the target based on Boise Cascade’s 2019 ROIC and EBITDA, determined by our Compensation Committee in accordance with the related grant agreements.

During the 2018 performance period, officers and other employees earned 100 % and 110 %, respectively, of the target based on Boise Cascade’s 2018 ROIC and EBITDA, determined by our Compensation Committee in accordance with the related grant agreements.

The PSUs granted to officers generally vest in a single installment three years from the grant date, while the PSUs granted to other employees vest in three equal tranches each year after the grant date.

During the 2020 performance period, officers and other employees both earned 200 % of the target based on Boise Cascade’s 2020 ROIC and EBITDA, as applicable, determined by our Compensation Committee in accordance with the related grant agreements.

During the 2019 performance period, officers and other employees earned 93 % and 96 %, respectively, of the target based on Boise Cascade’s 2019 ROIC and EBITDA, as applicable, determined by our Compensation Committee in accordance with the related grant agreements.

The PSUs granted to officers generally vest in a single installment three years from the date of grant, while the PSUs granted to other employees vest in three equal tranches each year after the grant date.

In 2021, 2020, and 2019, we granted an aggregate of 101,059 , 125,716 , and 167,861 RSUs, at a weighted average grant date fair value of $ 52.95 , $ 36.45 , and $ 29.13 , respectively, to our officers, other employees, and nonemployee directors with only service conditions.

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__________________

(a) Represents total PSUs forfeited during the year ended December 31, 2020, related to the 2019 performance condition adjustment described above .

(a) Represents additional PSUs granted during the year ended December 31, 2021, related to the 2020 performance condition adjustment described above.

Compensation Expense

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Any shares not vested are forfeited.

We recognize stock awards with only service conditions on a straight-line basis over the requisite service period.

We recognize compensation expense for stock awards with only service conditions on a straight-line basis over the requisite service period.

Most of our share-based compensation expense was recorded in "General and administrative expenses" in our Consolidated Statements of Operations.

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Total $ 7,911 $ 7,820 $ 7,973

For the years ended December 31, 2020, 2019, and 2018, the related tax benefit was $ 2.0 million, $ 2.0 million, and $ 2.2 million, respectively.

For each of the years ended December 31, 2021, 2020, and 2019, the related tax benefit was $ 2.0 million.

As of December 31, 2021, total unrecognized compensation expense related to nonvested share-based compensation arrangements was $ 10.4 million.

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In 2021, 2020, and 2019, certain non-executive employees participated in a long-term incentive plan that pays awards in cash (LTI Cash Plan).

The LTI Cash Plan provides an award notice to participants granting them the opportunity to earn a cash award, half of which is subject to service conditions only, with the other half subject to performance and service conditions.

The LTI Cash Plan provides participants with the opportunity to earn a cash award, half of which is subject to service conditions only, with the other half subject to performance and service conditions.

For the performance based cash award, the amount of cash actually awarded will range from 0 % to 200 % of the target amount, depending upon Boise Cascade's EBITDA, determined in accordance with the related grant agreement.

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Cash awards subject to performance conditions are also recognized on a straight-line basis over the requisite service period, based on the most probable amount of cash to be paid subject to achievement of the performance condition.

In 2020, 2019, and 2018, we recognized $ 3.9 million, $ 2.2 million, and $ 1.4 million, respectively, of LTI Cash Plan expense, primarily recorded in "General and administrative expenses" in our Consolidated Statements of Operations.

In 2021, 2020, and 2019, we recognized $ 5.3 million, $ 3.9 million, and $ 2.2 million, respectively, of LTI Cash Plan expense, which is recorded in "Materials, labor, and other operating expenses (excluding depreciation)," "Selling and distribution expenses," or "General and administrative expenses" in our Consolidated Statements of Operations.

During the 2020 and 2019 performance periods, cash awards earned 200 % and 96 %, respectively, of the target based on Boise Cascade’s 2020 and 2019 EBITDA, respectively, determined by our Compensation Committee in accordance with the related grant agreements.

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First Quarter (a) $ 0.10 $ 4,440

Second Quarter 0.10 3,917

Second Quarter (b) 2.10 3,933

Third Quarter (b) 0.10 82,596

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Second Quarter 0.10 3,917

Third Quarter 0.09 3,508

Third Quarter (c) 1.70 3,991

Fourth Quarter (c) 0.10 66,642

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Second Quarter 0.09 3,509

Third Quarter (c) 1.07 41,632

Fourth Quarter 0.09 3,502

Third Quarter 0.09 3,508

Fourth Quarter (d) 1.10 42,884

Total $ 1.37 $ 53,954

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(a) Includes payments of dividend equivalents on RSUs and PSUs which vested in first quarter of each year.

(b) During third quarter 2020, our board of directors declared a supplemental dividend of $ 1.60 per share on our common stock, which was paid in fourth quarter 2020.

(c) During each fourth quarter 2019 and third quarter 2018, our board of directors declared and paid a supplemental dividend of $ 1.00 per share of our common stock .

(b) During second quarter 2021, our board of directors declared a supplemental dividend of $ 2.00 per share on our common stock, which was paid in the third quarter 2021.

During fourth quarter 2021, our board of directors declared and paid a supplemental dividend of $ 3.00 per share on our common stock.

(c) During third quarter 2020, our board of directors declared a supplemental dividend of $ 1.60 per share on our common stock, which was paid in fourth quarter 2020.

(d) During fourth quarter 2019, our board of directors declared and paid a supplemental dividend of $ 1.00 per share of our common stock.

On February 7, 2022 , our board of directors declared a dividend of $ 0.12 per share of our common stock, payable on March 15, 2022 , to stockholders of record on February 22, 2022 .

For a description of the restrictions in our asset-based credit facility and the indenture governing our senior notes on our ability to pay dividends, see Note 9, Debt.

Future quarterly dividend declarations, including amount per share, record date and payment date, will be made at the discretion of our board of directors and will depend upon, among other things, legal capital requirements and surplus, our future operations and earnings, general financial condition, contractual obligations, restrictions imposed by our asset-based credit

facility and the indenture governing our senior notes, applicable laws, and other factors that our board of directors may deem relevant.

Future dividend declarations, including amount per share, record date and payment date, will be made at the discretion of our board of directors and will depend upon, among other things, legal capital requirements and surplus, our future

operations and earnings, general financial condition, material cash requirements, restrictions imposed by our asset-based credit facility and the indenture governing our senior notes, applicable laws, and other factors that our board of directors may deem relevant.

Stock Repurchase

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During 2021, 2020 and 2019, we did not purchase any shares under the Program.

During 2018, we repurchased 200,000 shares under the program at a cost of $ 4.9 million, or an average of $ 24.65 per share.

The shares were purchased with cash on hand and are recorded as "Treasury stock" on our Consolidated Balance Sheet.

As of December 31, 2021, there were 496,989 shares of common stock that may yet be purchased under the Program.

Accumulated Other Comprehensive Loss

Changes in accumulated other comprehensive loss are as follows:

The following table details the changes in accumulated other comprehensive loss for the years ended December 31, 2021, 2020, and 2019:

Changes in Accumulated Other Comprehensive Loss

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For additional information, see Note 11, Retirement and Benefit Plans.

(b) For the year ended December 31, 2020, income taxes include $ 38.8 million related to the release of stranded tax effects upon Plan Termination, as discussed in Note 4, Income Taxes .

(b) For the year ended December 31, 2020, income taxes included $ 38.8 million related to the release of stranded tax effects upon Plan Termination, as discussed in Note 4, Income Taxes .

Transactions With Related Party

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Price fluctuations in our selling prices and key costs have a significant effect on our financial performance.

The markets for most of these commodities are cyclical and are primarily affected by various economic and industry factors, including the strength of the U.S.

housing market, net import and export activity, changes in or disruptions to industry production capacity, changes in inventory levels, and other factors beyond our control.

The markets for most of these commodities are cyclical and are primarily affected by various economic and industry factors, including industry operating rates, the impact of COVID-19 on residential construction, net import and export activity, transportation constraints or disruptions, inventory levels in various distribution channels, and seasonal demand patterns.

Interest Rate Risk

We are exposed to interest rate risk arising from fluctuations in variable-rate LIBOR on our term loan and when we have loan amounts outstanding on our Revolving Credit Facility.

At December 31, 2020, we had $ 50.0 million of variable-rate debt outstanding based on one-month LIBOR after the pay-off of our $ 45.0 million term loan in July 2020, described in Note 10, Debt.

During the year ended December 31, 2020, we liquidated our interest rate swap agreements with notional principal amounts of $ 45.0 million in conjunction with the pay-off of the $ 45.0 million term loan.

At December 31, 2021, we had $ 50.0 million of variable-rate debt outstanding based on one-month LIBOR.

Our objective is to limit the variability of interest payments on our debt.

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Under the interest rate swaps, we receive one-month LIBOR -based variable interest rate payments and make fixed interest rate payments, thereby fixing the interest rate on $ 50.0 million of variable rate debt exposure.

Payments on one interest rate swap, entered into in 2016, with a notional principal amount of $ 50.0 million is due on a monthly basis at an annual fixed rate of 1.007 % and expires in February 2022 (Initial Swap).

Payments on one interest rate swap, entered into in 2016, with a notional principal amount of $ 50.0 million are due on a monthly basis at an annual fixed rate of 1.007 %, and this swap expires in February 2022 (Initial Swap).

During second quarter 2020, we entered into another forward interest rate swap agreement which commences on the expiration date of the Initial Swap.

Payments on this interest rate swap with a notional principal amount of $ 50.0 million will be due on a monthly basis at an annual fixed rate of 0.39 % and expires in June 2025.

Payments on this interest rate swap with a notional principal amount of $ 50.0 million will be due on a monthly basis at an annual fixed rate of 0.39 %, and this swap expires in June 2025.

The interest rate swap agreements were not designated as cash flow hedges, and as a result, all changes in the fair value are recognized in "Change in fair value of interest rate swaps" in our Consolidated Statements of Operations rather than through other comprehensive income.

At December 31, 2021, we recorded a long-term asset of $ 1.2 million in "Other assets" on our Consolidated Balance Sheets, and we also recorded a long-term liability of $ 0.1 million in "Other long-term liabilities" on our Consolidated Balance Sheets, representing the fair value of the interest rate swap agreements.

At December 31, 2020, we recorded a long-term liability of $ 0.6 million in "Other long-term liabilities" on our Consolidated Balance Sheets, representing the fair value of the interest rate swap agreements.

At December 31, 2019, we recorded a long-term asset of $ 0.8 million in "Other assets" on our Consolidated Balance Sheets, representing the fair value of the interest rate swap agreements.

The swaps were valued based on observable inputs for similar assets and liabilities and other observable inputs for interest rates and yield curves (Level 2 inputs).

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We operate our business using two reportable segments:

Wood Products and Building Materials Distribution.

Wood Products and BMD.

These segments represent distinct businesses that are managed separately because of differing products and services.

Each of these businesses requires distinct operating and marketing strategies.

Management reviews the performance of the company based on these segments.

Our chief operating decision maker reviews the performance of the company based on these segments.

For a description of the products sold by our segments, see Note 3, Revenues.

Unallocated corporate costs include corporate support staff services, related assets and liabilities, and pension plan activity.

Support services include, but are not limited to, information technology, human resources, finance, accounting, and

legal functions.

Unallocated corporate costs include corporate support staff services, related assets and liabilities, and nonqualified pension plan activity.

Support services include, but are not limited to, information technology, human resources, finance, accounting, and legal functions.

Specified expenses are allocated to the segments.

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The segments follow the accounting principles described in Note 2, Summary of Significant Accounting Policies.

For the year ended December 31, 2020, one customer accounted for 11 % of total sales, when combining sales from Wood Products and BMD to that customer.

For the years ended December 31, 2019 and 2018, no customers accounted for 10% or more of total sales.

For the year ended December 31, 2021, one customer accounted for 12 % of total sales and for the year ended December 31, 2020, one customer accounted for 11 % of total sales, when combining sales from Wood Products and BMD to those customers.

For the year ended December 31, 2019, no customers accounted for 10% or more of total sales.

Sales to foreign unaffiliated customers were approximately $ 128 million, $ 71 million, and $ 76 million, respectively, for the years ended December 31, 2021, 2020, and 2019.

At December 31, 2021, 2020, and 2019, and for the years then ended, long-lived assets located in foreign countries and net sales originating in foreign countries were not material.

Wood Products and Building Materials Distribution segment sales to external customers, including related parties, by product line are as follows:

Wood Products and BMD segment sales to external customers, including related parties, by product line are as follows:

Year Ended December 31

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Wood Products (a)

LVL $ 18.4 $ 39.5 $ 42.2

I-joists 7.3 22.1 29.3

Other engineered wood products 23.9 26.8 25.3

LVL (b) $ 4.3 $ 18.4 $ 39.5

I-joists (b) ( 6.8 ) 7.3 22.1

Other engineered wood products (b) 43.0 23.9 26.8

Plywood and veneer 539.3 332.7 255.1

Lumber (b) 54.7 52.5 86.0

Lumber 81.8 54.7 52.5

Byproducts 71.2 68.6 75.1

Particleboard (b) — — 37.5

Other 19.3 17.1 34.7

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(a) Amounts represent sales to external customers.

Sales are calculated after intersegment sales eliminations to our Building Materials Distribution segment, as well as the cost of EWP rebates and sales allowances provided at various stages of the supply chain (including distributors, retail lumberyards, and homebuilders).

For the years ended December 31, 2020, 2019, and 2018, approximately 80 %, 77 %, and 74 %, respectively, of Wood Products' EWP sales volumes were to our Building Materials Distribution segment.

(b) In fourth quarter 2018, we sold two lumber mills and our particleboard plant located in Northeast Oregon.

For additional information, see Note 7, Sale of Manufacturing Facilities.

Sales are calculated after intersegment sales eliminations to our BMD segment.

(b) Sales of EWP to external customers are net of the cost of all EWP rebates and sales allowances provided at various stages of the supply chain (including distributors, dealers, and homebuilders).

For the years ended December 31, 2021, 2020, and 2019, approximately 78 %, 80 %, and 77 %, respectively, of Wood Products' EWP sales volumes were to our BMD segment.

An analysis of our operations by segment is as follows:

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__________________

(a) Primarily represents intersegment sales from our Wood Products segment to our Building Materials Distribution segment.

During 2020, 2019, and 2018, approximately 61 %, 60 %, and 54 %, respectively, of Wood Products' overall sales were to our Building Materials Distribution segment.

(b) Wood Products segment operating income for the year ended December 31, 2020, includes $ 15.0 million of accelerated depreciation and $ 1.7 million of other closure-related costs due to the permanent curtailment of I-joist production at our Roxboro, North Carolina facility.

In addition, Wood Products segment operating loss for the year ended December 31, 2018, includes pre-tax facility impairment and sales related losses of $ 35.5 million, as well as $ 57.8 million of accelerated depreciation and other curtailment costs related to the permanent curtailment of LVL production at our Roxboro, North Carolina facility.

For more information, see Note 6, Curtailment of Manufacturing Facilities and Note 7, Sale of Manufacturing Facilities.

(c) Depreciation and amortization for Wood Products includes $ 15.0 million and $ 55.0 million, respectively, of accelerated depreciation to fully depreciate the curtailed I-joist and LVL production assets at our Roxboro, North Carolina facility during first quarter 2020 and fourth quarter 2018, respectively.

For more information, see Note 6, Curtailment of Manufacturing Facilities.

(d) Capital spending in 2019 and 2018 for Building Materials Distribution includes $ 15.7 million and $ 25.5 million , respectively, for the acquisition of wholesale building material distribution locations.

(a) Primarily represents intersegment sales from our Wood Products segment to our BMD segment.

During 2021, 2020, and 2019, approximately 62 %, 61 %, and 60 %, respectively, of Wood Products' overall sales were to our BMD segment.

(b) Wood Products segment operating income for the year ended December 31, 2020, included $ 15.0 million of accelerated depreciation and $ 1.7 million of other closure-related costs due to the permanent curtailment of I-joist production at our Roxboro, North Carolina facility.

For more information, see Note 6, Curtailment of Manufacturing Facility.

(c) Depreciation and amortization for Wood Products includes $ 15.0 million of accelerated depreciation to fully depreciate the curtailed I-joist production assets at our Roxboro, North Carolina facility during first quarter 2020.

For more information, see Note 6, Curtailment of Manufacturing Facility.

(d) Capital spending in 2021 for BMD includes approximately $ 15 million to purchase a BMD property in Walton, Kentucky to expand our service capabilities in the Cincinnati and surrounding markets.

Capital spending in 2019 for BMD includes $ 15.7 million for the acquisition of a wholesale building material distribution location in Birmingham, Alabama.

For more information, see Note 7, Acquisitions.

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At December 31, 2021, we are not aware of any material liabilities arising from these indemnifications.

Quarterly Results of Operations (unaudited)

First Quarter (a) Second Quarter Third Quarter (b) Fourth Quarter (c)

(millions, except per-share amounts)

Net sales $ 1,170.5 $ 1,242.8 $ 1,589.3 $ 1,472.2

Income from operations $ 25.5 $ 51.8 $ 158.6 $ 99.1

Net income $ 12.2 $ 33.6 $ 103.2 $ 26.0

Net income per common share – Basic $ 0.31 $ 0.85 $ 2.62 $ 0.66

Net income per common share – Diluted $ 0.31 $ 0.85 $ 2.61 $ 0.66

First Quarter Second Quarter Third Quarter Fourth Quarter

(millions, except per-share amounts)

Net sales $ 1,042.1 $ 1,230.1 $ 1,269.5 $ 1,101.7

Income from operations $ 21.7 $ 45.1 $ 44.9 $ 24.8

Net income $ 11.4 $ 27.7 $ 27.2 $ 14.6

Net income per common share – Basic $ 0.29 $ 0.71 $ 0.70 $ 0.37

Net income per common share – Diluted $ 0.29 $ 0.71 $ 0.69 $ 0.37

__________________

(a) First quarter 2020 results include $ 15.0 million and $ 1.7 million, respectively, of pre-tax accelerated depreciation and other curtailment related costs, or $ 0.32 per share after-tax, related to the permanent curtailment of I-joist production at our Roxboro, North Carolina facility, as discussed in Note 6, Curtailment of Manufacturing Facilities.

(b) Third quarter 2020 results include $ 14.0 million of pre-tax losses on extinguishment of debt, or $ 0.27 per share after-tax, as we refinanced our senior notes at a lower interest rate with an extended maturity, as discussed in Note 10, Debt.

(c) Fourth quarter 2020 results include $ 6.2 million of pre-tax losses, or $ 0.12 per share after-tax, from a non-cash pension settlement charge related to the Plan Termination, as discussed in Note 12, Retirement and Benefit Plans.

Fourth quarter 2020 results also include $ 38.8 million, or $ 0.98 per share, of incremental income tax expense related to the release of stranded tax effects upon Plan Termination, as discussed in Note 4, Income Taxes.

Report of Independent Registered Public Accounting Firm

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We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 22, 2022 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Change in Accounting Principle

As discussed in Note 11 to the consolidated financial statements, the Company has changed its method of accounting for leases as of January 1, 2019 due to the adoption of FASB Accounting Standards Update ASU No.

2016-02, Leases (Topic 842).

Basis for Opinion

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As discussed in Note 3 to the consolidated financial statements, the Company records an accrual for estimated rebates payable to third parties.

The Company provides engineered wood products (EWP) rebates at various stages of the supply chain (including distributors, retail lumberyards, and homebuilders) as a means to increase sales.

The Company provides engineered wood products (EWP) rebates at various stages of the supply chain (including dealers and homebuilders) as a means to increase sales.

EWP rebates are based on the volume of purchases (measured in dollars or units), among other factors such as customer loyalty, conversion, and commitment incentives, as well as temporary protection from price increases.

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We identified the rebates payable for EWP as a critical audit matter.

Evaluating the Company's estimate of the year-end rebates payable for EWP, which is based on a sell-through model as EWP products transition through the supply chain, required a high degree of subjective auditor judgement.

Specifically, the estimate required significant auditor judgement because it is challenging, due to the time lag of information, to estimate sales subject to rebate as the products transition through the supply chain from the Company's wholesale distribution customers to retail lumberyards, and homebuilders.

Specifically, the estimate required significant auditor judgment because it is challenging, due to the time lag of information, to estimate sales subject to rebate as the products transition through the supply chain from the Company's wholesale distribution customers to dealers and homebuilders.

The following are the primary procedures we performed to address this critical audit matter.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data