What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-02-21 compared with 2022-02-22 · 174 added, 200 removed, 956 unchanged (28% of the section changed)

38 unchanged sentences

Net income $ 857,658 $ 712,486 $ 174,979

Other comprehensive income (loss), net of tax

Other comprehensive income, net of tax

Defined benefit pension plans

Actuarial gain (loss), net of tax of $ 15 , $ 1,728 , and $( 1,176 ), respectively

46 5,104 ( 3,466 )

Actuarial gain, net of tax of $ 122 , $ 15 , and $ 1,728 , respectively

Amortization of actuarial (gain) loss, net of tax of $ 21 , $( 4 ), and $ 204 , respectively

1 unchanged sentence

Effects of settlements, net of tax of $ 32 , $ — , and $ 1,581 , respectively

— 4,669 1,001

Stranded tax effects of pension plan termination — — 38,794

Other comprehensive income (loss), net of tax 31 49,170 ( 2,596 )

Other comprehensive income, net of tax 527 31 49,170

Comprehensive income $ 858,185 $ 712,517 $ 224,149

29 unchanged sentences

Compensation and benefits 142,463 128,518

Income taxes payable — 8,101

Interest payable 9,955 9,886

49 unchanged sentences

Acquisitions of businesses and facilities ( 515,237 ) — —

Proceeds from sale of facilities — — 2,493

Proceeds from sales of assets and other 3,898 932 713

18 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

41 unchanged sentences

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions about future events.

The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) 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.

35 unchanged sentences

No other customer accounted for 10% or more of total receivables.

Adjustments to the valuation allowance are charged to income.

Adjustments to allowances are charged to income.

Trade accounts receivable balances that remain outstanding after we have used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to accounts receivable.

15 unchanged sentences

We estimated the fair value of our fixed-rate debt using quoted market prices of our debt in inactive markets (Level 2 inputs).

The interest rate on our variable-rate debt is based on market conditions such as the London Interbank Offered Rate (LIBOR) or a base rate.

The interest rate on our variable-rate debt is based on market conditions such as the Secured Overnight Financing Rate (SOFR) or a base rate.

Because the interest rate on the variable-rate debt is based on current market conditions, we believe that the estimated fair value of the outstanding balance on our variable-rate debt approximates book value.

30 unchanged sentences

Variable lease expense generally includes reimbursement of actual costs for common area maintenance, property taxes, and insurance on leased real estate and are recorded as incurred.

Most of our operating lease expense was recorded in "Selling and distribution expenses" in our Consolidated Statements of Operations.

Most of our operating lease expense is recorded in "Selling and distribution expenses" in our Consolidated Statements of Operations.

In addition, we do not separate lease and non-lease components for all of our leases.

43 unchanged sentences

$ 770,023 $ 495,240

As of December 31, 2022, property and equipment includes two plywood facilities acquired by us on July 25, 2022.

For more information, see Note 7, Acquisition.

Long-Lived Asset Impairment

38 unchanged sentences

As of December 31, 2022, we had ten collective bargaining agreements.

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.

One agreement covering approximately 90 employees at our Canadian EWP facility expired on December 31, 2022, but the terms and conditions of this agreement remain in effect pending negotiation of a new agreement.

We may not be able to renew this agreement or may renew it on terms that are less favorable to us than the current agreement.

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.

8 unchanged sentences

New and Recently Adopted Accounting Standards

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):

In October 2021, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (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.

1 unchanged sentence

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.

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

The updated guidance is effective for interim and annual reporting periods beginning after December 15, 2022.

We adopted this standard in first quarter 2023, and it did not have a material effect on our financial statements.

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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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 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.

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 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.

22 unchanged sentences

For our BMD segment, costs related to shipping and handling of $ 226.1 million, $ 195.7 million, and $ 177.1 million for the years ended December 31, 2022, 2021, and 2020, 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.

In our BMD segment, our activities relate to the purchase and resale of finished products, 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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Foreign rate differential 370 236 65

Share-based compensation ( 563 ) ( 411 ) ( 532 )

Stock-based compensation ( 1,529 ) ( 563 ) ( 411 )

Nondeductible executive compensation 2,433 1,664 808

5 unchanged sentences

(a) In December 2020, we eliminated our qualified defined benefit pension plan (Plan Termination), as discussed in Note 11, Retirement and Benefit Plans.

Prior to the Plan Termination, "Accumulated other comprehensive loss" on our Consolidated Balance Sheet included the stranded tax effects of our conversion from a limited liability company to a corporation in 2013 and the adoption of the Tax Cuts and Jobs Act (the "Tax Act") in 2017.

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

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 years ended December 31, 2022, 2021, and 2020, cash paid for taxes, net of refunds received, was $ 260.0 million, $ 260.1 million, and $ 75.1 million, respectively.

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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The foreign net operating loss and state credit carryforwards in the income tax returns filed included unrecognized tax benefits.

The deferred tax assets recognized for those net operating loss and state credit carryforwards are presented net of these unrecognized tax benefits.

The deferred tax assets recognized for those net operating losses and state credit carryforwards are presented net of these unrecognized tax benefits.

Income Tax Uncertainties

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For the years ended December 31, 2022, 2021, and 2020, we recognized an insignificant amount of interest and penalties related to taxes.

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.

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.

We do not expect the unrecognized tax benefits to change significantly over the next twelve months.

21 unchanged sentences

Net income per common share - Diluted $ 21.56 $ 17.97 $ 4.44

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.

The computation of the dilutive effect of other potential common shares excludes stock awards representing 0.1 million shares of common stock in the year ended December 31, 2022, and no shares of common stock in both the years ended December 31, 2021 and 2020.

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

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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.

We account for acquisition transactions in accordance with ASC 805, Business Combinations .

Accordingly, the results of operations of the acquiree are included in our consolidated financial statements from the acquisition date.

The consideration transferred is allocated to the identifiable assets acquired and liabilities assumed based on estimated fair values at the acquisition date, with any excess recorded as goodwill.

Transaction-related costs are expensed in the period the costs are incurred.

During the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed with the corresponding adjustment to goodwill.

On July 25, 2022, our wholly-owned subsidiary, Boise Cascade Wood Products, L.L.C., completed the acquisition of 100 % of the equity interest in Coastal Plywood Company (Coastal Plywood), and its plywood manufacturing operations located in Havana, Florida, and Chapman, Alabama for a purchase price of $ 515.2 million, including a post-closing adjustment of $ 1.6 million based upon a working capital target (the Acquisition).

We funded the Acquisition and related costs with cash on hand.

Acquisition-related costs of $ 1.3 million are recorded in "General and administrative expenses" in our Consolidated Statements of Operations for the year ended December 31, 2022.

The facilities acquired in the Acquisition will provide incremental stress-rated veneer needed to optimize and expand our southeastern U.S.

EWP production capacity.

In addition, the Havana plywood operation will improve our mix of specialty plywood products and is well positioned geographically to support plywood demand in the southeastern U.S.

Sales, including sales to our BMD segment, of $ 82.1 million from these facilities was reported as part of the Wood Products segment for the year ended December 31, 2022.

In addition, the Wood Products segment reported operating income of $ 0.4 million from these facilities for the year ended December 31, 2022, which included $ 9.4 million of expense related to the sell-through of inventory recorded at fair market value in connection with the Acquisition.

Goodwill represents the excess of the purchase price and related costs over the fair value of the net tangible and intangible assets of businesses acquired.

The primary qualitative factor that contributed to the recognition of goodwill relates to the incremental stress-rated veneer and assembled workforce the facilities provide to allow us to expand our EWP capacity and improve our mix of plywood offerings to serve future and existing customers.

The facilities are geographically located in an area that allows us to optimize our mill system and realize freight and other cost synergies.

All of the goodwill was assigned to the Wood Products reporting unit and is deductible for U.S.

income tax purposes.

The Acquisition purchase price allocations are preliminary and subject to post-closing adjustments.

Our estimates and assumptions are subject to change as more information becomes available.

The primary areas of the purchase price allocation that are not yet finalized relate to the valuation of fixed assets, identifiable intangible assets, and residual goodwill.

The following table summarizes the allocations of the purchase price to the assets acquired and liabilities assumed, based on our current estimates of the fair value at the date of the Acquisition:

Acquisition Date Fair Value

Accounts receivable $ 16,123

Inventories 22,977

Property and equipment 251,329

Other assets 1,809

Intangible assets:

Trade name 700

Customer relationships 153,600

Goodwill 77,576

Assets acquired 524,114

Accounts payable and accrued liabilities 6,299

Other long-term liabilities 2,578

Liabilities assumed 8,877

Net assets acquired $ 515,237

Pro Forma Financial Information

The following pro forma financial information presents the combined results of operations as if the two Coastal Plywood facilities had been combined with us on January 1, 2021.

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 transaction in fact occurred on January 1, 2021.

They also do not reflect any cost savings, operating synergies, or revenue enhancements that we may achieve or the costs necessary to achieve these cost savings, operating synergies, revenue enhancements, or integration efforts.

Year Ended December 31

(unaudited, thousands)

Sales $ 8,618,105 $ 8,303,754

Net income (a) $ 932,352 $ 818,476

___________________________________

(a) The pro forma financial information for the year ended December 31, 2022 was adjusted to exclude $ 1.3 million of pre-tax acquisition-related costs for legal, accounting, and other advisory-related services .

Goodwill and Intangible Assets

1 unchanged sentence

The carrying amount of our goodwill by segment is as follows:

Balance at December 31, 2021 and 2020 $ 11,792 $ 48,590 $ 60,382

Balance at December 31, 2021 $ 11,792 $ 48,590 $ 60,382

Additions (a) — 77,576 77,576

Balance at December 31, 2022 $ 11,792 $ 126,166 $ 137,958

___________________________________

(a) Represents the acquisition of two Coastal Plywood facilities.

For additional information, see Note 7, Acquisition .

At December 31, 2022 and 2021, intangible assets represented the values assigned to trade names and trademarks and customer relationships.

The trade names and trademarks have indefinite lives and are not amortized.

We maintain trademarks for our manufactured wood products, particularly EWP.

Our key registered trademarks are perpetual in duration as long as we continue to timely file all post registration maintenance documents related thereto.

These trade names and trademarks have indefinite lives, are not amortized, and have a carrying amount of $ 8.9 million.

In addition, in 2022, we acquired a trade name and customer relationships as discussed in Note 7, Acquisition.

This acquired trade name has a useful life of one year .

The weighted-average useful life for customer relationships from the date of purchase is approximately 10 years.

During the years ended December 31, 2022 and 2021, we recognized $ 8.2 million and $ 1.2 million, respectively, of amortization expense for intangible assets.

Amortization expense is expected to be approximately $ 16.3 million per year for the next five years.

24 unchanged sentences

Asset-Based Credit Facility

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.

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.

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, (the Amended Agreement) with Wells Fargo Capital Finance, LLC, as administrative agent, and the banks named therein as lenders.

On September 9, 2022, we entered into the Eighth Amendment to the Amended Agreement (the Amendment) to increase the maximum amount available for revolving loans from $ 350 million to $ 400 million (the Revolving Credit Facility) and to extend the maturity date of the Amended Agreement to the earlier of (a) September 9, 2027 and (b) 90 days prior to the maturity of our $ 400 million of 4.875 % senior notes due July 1, 2030 (or the maturity date of any permitted refinancing indebtedness or permitted upsized refinancing indebtedness in respect thereof).

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

The Amendment also replaced the LIBOR rate with SOFR.

In addition, the Amendment reduced the unused commitment fee and modified certain financial covenants.

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

3 unchanged sentences

The Amended Agreement contains customary nonfinancial covenants, including a negative pledge covenant and restrictions on new indebtedness, investments, distributions to equity holders, asset sales, and affiliate transactions, the scope of which are dependent on the Availability existing from time to time.

The Amended Agreement also contains a requirement that we meet a 1 :1 fixed-charge coverage ratio (FCCR), applicable only if Availability falls below 10 % of the aggregate revolving lending commitments (or $ 35 million).

The Amended Agreement also contains a requirement that we meet a 1 :1 fixed-charge coverage ratio (FCCR), applicable only if Availability falls below the greater of (a) 10 % of the Line Cap (as defined in the Amended Agreement) and (b) $ 35 million.

Availability exceeded the minimum threshold amounts required for testing of the FCCR at all times since entering into the Amended Agreement, and Availability at December 31, 2022, was $ 396.2 million.

The Amended Agreement permits us to pay dividends only if at the time of payment (i) no default has occurred or is continuing (or would result from such payment) under the Amended Agreement, and (ii) pro forma Excess Availability (as defined in the Amended Agreement) is equal to or exceeds 25 % of the aggregate Revolver Commitments (as defined in the Amended Agreement) or (iii) (x) pro forma Excess Availability is equal to or exceeds 15 % of the aggregate Revolver Commitment and (y) our fixed-charge coverage ratio is greater than or equal to 1 :1 on a pro forma basis.

The Amended Agreement permits us to pay dividends only if at the time of payment (a) no default has occurred or is continuing (or would result from such payment) under the Amended Agreement, and (b) either (i) pro forma Excess Availability (as defined in the Amended Agreement) is equal to or exceeds the greater of (x) 20 % of the Line Cap and (y) $ 75 million or (ii) (x) pro forma Excess Availability is equal to or exceeds the greater of (1) 15 % of the Line Cap and (2) $ 55 million and (y) our fixed-charge coverage ratio is greater than or equal to 1 :1 on a pro forma basis.

Revolving Credit Facility

Interest rates under the Revolving Credit Facility are based, at our election, on either LIBOR or a base rate, as defined in the Amended Agreement, plus a spread over the index elected that ranges from 1.25 % to 1.50 % for loans based on LIBOR and from 0.25 % to 0.50 % for loans based on the base rate.

Interest rates under the Revolving Credit Facility are based, at our election, on either Daily Simple SOFR, Term SOFR, or a base rate, as defined in the Amended Agreement, plus a spread over the index elected that ranges from 1.25 % to 1.50 % for loans based on SOFR and from 0.25 % to 0.50 % 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.

Both SOFR options include an additional credit spread adjustment of 0.10 %.

Letters of credit are subject to a fronting fee payable to the issuing bank and a fee payable to the lenders equal to the Term SOFR margin rate.

In addition, we are required to pay an unused commitment fee at a rate of 0.20 % per annum of the average unused portion of the lending commitments.

1 unchanged sentence

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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However, any principal amount of ABL Term Loan repaid may not be subsequently re-borrowed.

Interest rates under the ABL Term Loan are based, at our election, on either LIBOR or a base rate, as defined in the Amended Agreement, plus a spread over the index elected that ranges from 1.75 % to 2.00 % for LIBOR rate loans and from 0.75 % to 1.00 % for base rate loans, both dependent on the amount of Average Excess Availability (as defined in the Amended Agreement).

Interest rates under the ABL Term Loan are based, at our election, on either Daily Simple SOFR, Term SOFR, or a base rate, as defined in the Amended Agreement, plus a spread over the index elected that ranges from 1.75 % to 2.00 % for SOFR rate loans and from 0.75 % to 1.00 % for base rate loans, both dependent on the amount of Average Excess Availability (as defined in the Amended Agreement).

Both SOFR options include an additional credit spread adjustment of 0.10 %.

During the year ended December 31, 2022, the average interest rate on the ABL Term Loan was approximately 3.48 %.

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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 0.9 % during the year ended December 31, 2021.

After giving effect to expected patronage distributions, the effective average net interest rate on the ABL Term Loan was approximately 2.5 % during the year ended December 31, 2022.

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.

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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:

Nonqualified Salaried Pension Plans

We recognize and record the underfunded status of our defined benefit pension plans in "Accrued liabilities, Compensation and benefits" and "Other, Compensation and benefits" on our Consolidated Balance Sheets.

The total accumulated benefit obligation for all unfunded nonqualified defined benefit pension plans was $ 3.0 million and $ 4.5 million at December 31, 2022 and 2021, respectively.

In addition, we recognize changes in funded status in the year the changes occur through other comprehensive income (loss).

For the years ended December 31, 2022 and 2021, we recognized $ 0.7 million and $ 1.4 million, respectively, in accumulated other comprehensive loss related to our nonqualified defined benefit pension plans.

Furthermore, the components of net periodic benefit cost and other amounts recognized in other comprehensive income related to our nonqualified defined pension plans for the years ended December 31, 2022 and 2021 were immaterial.

Qualified Defined Benefit Pension Plan

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 had any further obligations to those participants.

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

When the Buy-Out became effective on December 31, 2020, we irrevocably transferred to Prudential the future benefit obligations and annuity administration for all remaining plan participants (or their beneficiaries) in the Pension Plan.

These transactions fully eliminated the liabilities of our Pension Plan, resulting in a non-cash settlement charge of $ 6.2 million in fourth quarter 2020.

• On September 30, 2019, we transferred $ 19.8 million of our Pension Plan assets to Prudential for the purchase of a group annuity contract.

Under the arrangement, Prudential assumed ongoing responsibility for administration and benefit payments for approximately 10 % of our U.S.

qualified pension plan projected benefit obligations at the time of the transaction.

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

These transactions fully eliminated the liabilities of our Pension Plan.

For the year ended December 31, 2020, we recognized $ 8.1 million in net periodic benefit cost, which was primarily due to a $ 6.2 million non-cash settlement charge resulting from the Plan Termination described above.

In addition, for the year ended December 31, 2020, we recognized $ 13.9 million in other comprehensive income, primarily related to a net actuarial gain and the effect of the settlement described above.

For the years ended December 31, 2022 and 2021, we paid $ 1.1 million and $ 0.5 million, respectively, in cash to the nonqualified pension plan participants.

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

During 2020, cash contributions included $ 11.4 million for the repurchase of two of the real property locations we previously had contributed to our Pension Plan and $ 0.6 million of lease payments.

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

All nonqualified pension benefit payments are paid by the Company, and all future cash payments are immaterial.

Defined Contribution Plans

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In addition, beginning in 2012, for the years that a performance target is met, we contribute an additional amount of the employee's eligible compensation, depending on company performance and the employee's years of service.

During the years ended December 31, 2021, 2020, and 2019, company performance resulted in additional contributions in the range of 2 % to 4 %, 2 % to 4 %, and 1.6 % to 3.1 %, respectively, of eligible compensation.

During the years ended December 31, 2022, 2021, and 2020, company performance resulted in additional contributions in the range of 2 % to 4 % of eligible compensation.

The company contributions for union and nonunion hourly employees vary by location.

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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 2022, 2021, and 2020.

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

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

Company contributions to the multiemployer defined contributory trust plan were $ 2.0 million, $ 1.9 million, and $ 2.4 million, respectively, for each of the years ended December 31, 2022, 2021, and 2020.

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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, approximately 475 of our employees participated in this plan.

Per the terms of the representative collective bargaining agreements, we were required to contribute $ 6.70 per hour per active employee from June 1, 2019, to May 31, 2020.

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 and 2019, company contributions to the multiemployer health and welfare plan were $ 5.8 million and $ 6.7 million, respectively.

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

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

The trustees of the plan determine the allocation of benefits between active and retired employees.

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.

We recognize the underfunded status of our defined benefit pension plans on our Consolidated Balance Sheets.

We recognize changes in funded status in the year changes occur through other comprehensive income (loss).

Change in benefit obligation

Benefit obligation at beginning of year $ 4,887 $ 192,061

Service cost — 668

Interest cost 95 5,893

Actuarial loss ( 61 ) 18,605

Group annuity transactions (a) — ( 76,650 )

Benefits paid (b) ( 470 ) ( 135,690 )

Benefit obligation at end of year 4,451 4,887

Change in plan assets

Fair value of plan assets at beginning of year — 168,651

Actual return on plan assets — 30,930

Employer contributions 470 12,759

Group annuity transactions (a) — ( 76,650 )

Benefits paid (b) ( 470 ) ( 135,690 )

Fair value of plan assets at end of year — —

Underfunded status $ ( 4,451 ) $ ( 4,887 )

Amounts recognized on our Consolidated Balance Sheets

Current liabilities $ ( 1,054 ) $ ( 367 )

Noncurrent liabilities ( 3,397 ) ( 4,520 )

Net liability $ ( 4,451 ) $ ( 4,887 )

Amounts recognized in accumulated other comprehensive loss

Net actuarial loss $ 1,401 $ 1,443

Prior service cost — —

Net loss recognized $ 1,401 $ 1,443

______________________________________

(a) See Defined Benefits Plans above for description of group annuity transactions.

(b) See Defined Benefits Plans above for description of lump-sum payments.

The accumulated benefit obligation for all defined benefit pension plans was $ 4.5 million and $ 4.9 million at December 31, 2021 and 2020, respectively.

After the Plan Termination, the remaining accumulated benefit obligations are from our unfunded nonqualified defined benefit pension plans.

Net Periodic Benefit Cost and Other Comprehensive (Income) Loss

The components of net periodic benefit cost and other amounts recognized in other comprehensive (income) loss are as follows:

Year Ended December 31

2021 2020 2019

Net periodic benefit cost

Service cost $ — $ 668 $ 647

Interest cost 95 5,893 7,210

Expected return on plan assets — ( 5,493 ) ( 5,903 )

Amortization of actuarial (gain) loss ( 19 ) 807 ( 175 )

Plan settlement expense (a) — 6,250 1,342

Net periodic benefit cost 76 8,125 3,121

Changes in plan assets and benefit obligations recognized in other comprehensive (income) loss

Net actuarial (gain) loss ( 61 ) ( 6,832 ) 4,642

Amortization of actuarial gain (loss) 19 ( 807 ) 175

Effect of settlements — ( 6,250 ) ( 1,342 )

Total recognized in other comprehensive (income) loss ( 42 ) ( 13,889 ) 3,475

Total recognized in net periodic cost and other comprehensive (income) loss $ 34 $ ( 5,764 ) $ 6,596

______________________________________

(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:

Weighted average assumptions

Discount rate 3.10 % 4.15 %

Expected long-term rate of return on plan assets 3.50 % 3.85 %

Rate of compensation increases (a) — % — %

_______________________________________

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

Discount Rate Assumption .

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 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.

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 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.

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 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.

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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These awards are at the discretion of the compensation committee of our board of directors, and they vest and expire in accordance with terms established at the time of grant.

All awards under the 2016 Incentive Plan, other than stock options or stock appreciation rights, are eligible to participate in dividend or dividend equivalent payments, if any, which we accrue to be paid when the awards vest.

Shares issued pursuant to awards under the incentive plans are from our authorized, but unissued shares.

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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.

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 2022 EBITDA, defined as income before interest (interest expense and interest income), income taxes, and depreciation and amortization, as approved by executive management, determined 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 2021 and 2020, we granted 73,265 and 94,850 PSUs, at a weighted average grant date fair value of $ 52.45 and $ 36.45 , respectively, to our officers and other employees, subject to performance and service conditions.

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.

During the 2021 and 2020 performance periods, officers and other employees both earned 200 % of the target based on Boise Cascade’s 2021 and 2020 ROIC and EBITDA results, as applicable, determined by our compensation committee and executive management, as applicable, 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.

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The RSUs granted to officers and other employees vest in three equal tranches each year after the grant date.

The RSUs granted to nonemployee directors vest over a one year period.

We based the fair value of PSU and RSU awards on the closing market price of our common stock on the grant date.

The RSUs granted to nonemployee directors vest in a single installment after a one year period.

We based the fair value of the PSU and RSU awards on the closing market price of our common stock on the grant date.

During the years ended December 31, 2022, 2021, and 2020, the total fair value of PSUs and RSUs vested was $ 12.0 million, $ 9.2 million, and $ 11.1 million, respectively.

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__________________

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

(a) Represents additional PSUs granted during the year ended December 31, 2022, related to above-target achievement of the 2021 performance condition described above.

Compensation Expense

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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.

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

Total stock-based compensation recognized from PSUs and RSUs, net of forfeitures, was as follows:

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Total $ 11,870 $ 7,911 $ 7,820

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.

For the year ended December 31, 2022, the related tax benefit was $ 3.0 million.

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

As of December 31, 2022, total unrecognized

compensation expense related to nonvested share-based compensation arrangements was $ 13.8 million.

This expense is expected to be recognized over a weighted-average period of 1.8 years.

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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.

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 by executive management in accordance with the related grant agreement.

Under the LTI Cash Plan, the award is paid in three equal installments each year after the grant date, with continued employment as a precondition for receipt of each award installment.

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

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

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 2022, 2021, and 2020, we recognized $ 5.9 million, $ 5.3 million, and $ 3.9 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.

During the 2021 and 2020 performance periods, cash awards earned 200 % of the target based on Boise Cascade’s 2021 and 2020 EBITDA, respectively, determined by executive management in accordance with the related grant agreements.

Stockholders' Equity

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Second Quarter (b) 2.62 103,352

Third Quarter (b) 0.10 82,596

Third Quarter 0.12 4,734

Fourth Quarter (b) 1.15 45,539

1 unchanged sentence

First Quarter (a) $ 0.10 $ 4,440

Second Quarter 0.10 3,917

Second Quarter (c) 2.10 3,933

Third Quarter (c) 0.10 82,596

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Second Quarter 0.10 3,917

Third Quarter 0.09 3,508

Third Quarter (d) 1.70 3,991

Fourth Quarter (d) 0.10 66,642

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

(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.

(b) During second quarter 2022, our board of directors declared and paid a special dividend of $ 2.50 per share on our common stock.

During fourth quarter 2022, our board of directors declared and paid a special dividend of $ 1.00 per share on our common stock.

(c) During second quarter 2021, our board of directors declared a special 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 special dividend of $ 3.00 per share on our common stock.

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

On February 7, 2023 , our board of directors declared a dividend of $ 0.15 per share of our common stock, payable on March 15, 2023 , to stockholders of record on February 22, 2023 .

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.

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.

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

On February 25, 2015, our board of directors authorized a two million share repurchase program (Program) pursuant to which we may, from time to time, purchase shares of our common stock through various means including, without limitation, open market transactions, privately negotiated transactions, or accelerated share repurchase transactions.

On July 28, 2022, our board of directors authorized the repurchase of an additional 1.5 million shares of our common stock.

This increase was in addition to the remaining authorized shares under our prior common stock repurchase program that was authorized on February 25, 2015 (the Program).

Share repurchases may be made on an opportunistic basis, through open market transactions, privately negotiated transactions, or by other means in accordance with applicable federal securities laws.

We are not obligated to purchase any shares and there is no set date that the Program will expire.

The board may increase or decrease the number of shares under the Program or terminate the Program in its discretion at any time.

Our board may increase or decrease the number of shares under the Program or terminate the Program in its discretion at any time.

During 2022, 2021 and 2020, we did not purchase any shares under the Program.

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$ ( 1,047 ) $ ( 1,078 ) $ ( 50,248 )

Net actuarial gain (loss), before taxes 61 6,832 ( 4,642 )

Net actuarial gain, before taxes 489 61 6,832

Amortization of actuarial (gain) loss, before taxes (a)

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Effect of settlements, before taxes (a)

— 6,250 1,342

Income taxes (b) ( 175 ) ( 11 ) 35,281

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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 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.

The markets for most of these commodities are cyclical and are primarily affected by economic uncertainties, industry operating rates, transportation constraints or disruptions, net import and export activity, 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, 2021, we had $ 50.0 million of variable-rate debt outstanding based on one-month LIBOR.

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

At December 31, 2022, we had $ 50.0 million of variable-rate debt outstanding based on one-month term SOFR.

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

To meet this objective, we enter into receive-variable, pay-fixed interest rate swaps to change the variable-rate cash flow exposure to fixed-rate cash flows.

To meet this objective, we enter into receive-variable, pay-fixed interest rate swaps to mitigate the variable-rate cash flow exposure with fixed-rate cash flows.

In accordance with our risk management strategy, we actively monitor our interest rate exposure and use derivative instruments from time to time to manage the related risk.

We do not speculate using derivative instruments.

At December 31, 2022, we had one interest rate swap agreement.

Under the interest rate swap, we receive one-month SOFR plus a spread adjustment of 0.10 % 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 this interest rate swap, with a notional principal amount of $ 50.0 million, are due on a monthly basis at an annual fixed rate of 0.41 %, and this swap expires in June 2025.

We entered into this forward interest rate swap in 2020 (the 2020 Swap) and it was amended in September 2022.

Prior to the amendment we received one-month LIBOR-based variable interest rate payments and made fixed interest rate payments at an annual fixed rate of 0.39 % on the 2020 Swap.

At December 31, 2021, we had two interest rate swap agreements.

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 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 this swap expires in June 2025.

Under these interest rate swaps, we received one-month LIBOR -based variable interest rate payments and made fixed interest rate payments.

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

The 2020 Swap, as mentioned above, commenced on the expiration of the Initial Swap in February 2022.

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, 2022, we recorded a long-term asset of $ 4.8 million in "Other assets" on our Consolidated Balance Sheets, representing the fair value of the interest rate swap agreement.

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.

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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Each of these businesses requires distinct operating and marketing strategies.

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 nonqualified pension plan activity.

We measure and evaluate our reportable segments based on net sales and segment operating income (loss).

Accordingly, our chief operating decision maker reviews the performance of the company and allocates resources based primarily on net sales and segment operating income (loss) for our business segments.

Unallocated corporate costs are presented as reconciling items to arrive at operating income.

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.

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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, 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.

For the years ended December 31, 2022, 2021, and 2020, one customer accounted for 12 %, 12 % and 11 %, respectively, of total sales when combining sales from Wood Products and BMD to those customers.

Sales to foreign unaffiliated customers were approximately $ 142 million, $ 128 million, and $ 71 million, respectively, for the years ended December 31, 2022, 2021, and 2020.

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Depreciation and amortization

Wood Products (c) $ 55,249 $ 71,141 $ 57,671

Wood Products (b) $ 73,308 $ 55,249 $ 71,141

Building Materials Distribution 27,005 24,007 22,460

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Capital expenditures

Wood Products $ 48,280 $ 38,230 $ 53,460

Wood Products (c) $ 51,934 $ 48,280 $ 38,230

Building Materials Distribution (d) 60,463 57,557 39,976

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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.

Wood Products $ 720,811 $ 605,359

For more information, see Note 7, Acquisition.

(d) Capital spending in 2022 for BMD includes approximately $ 13 million to purchase a previously leased BMD property in Milton, Florida.

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

Wood Products (a) $ 1,120,188 $ 720,811

Building Materials Distribution 1,075,628 1,192,365

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Total assets $ 3,240,514 $ 2,572,640

__________________

(a) As of December 31, 2022, Wood Products assets includes the acquisition of two plywood facilities.

For more information, see Note 7, Acquisition.

Commitments, Legal Proceedings and Contingencies, and Guarantees

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We are a party to legal proceedings that arise in the ordinary course of our business, including commercial liability claims, premises claims, environmental claims, and employment-related claims, among others.

As of the date of this filing, we believe it is not reasonably possible that any of the legal actions against us will, individually or in the aggregate, have a material adverse effect on our financial position, results of operations, or cash flows.

As of the date of this filing, we do not believe that we are party to any legal action that could reasonably be expected to have, individually or in the aggregate, a material adverse effect on our financial position, results of operations, or cash flows.

We provide guarantees, indemnifications, and assurances to others.

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We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2022, and the related notes (collectively, the consolidated financial statements), and our report dated February 21, 2023 expressed an unqualified opinion on those consolidated financial statements.

The Company acquired Coastal Plywood Company during 2022, and management excluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2022, Coastal Plywood Company’s internal control over financial reporting associated with approximately 8% of consolidated total assets and approximately 1% of consolidated revenues included in the consolidated financial statements of the Company as of and for the year ended December 31, 2022.

Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of Coastal Plywood Company.

Basis for Opinion

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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