What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-05-04 compared with 2022-10-31 · 84 added, 193 removed, 506 unchanged (35% of the section changed)

3 unchanged sentences

Three Months Ended

September 30 Nine Months Ended

2022 2021 2022 2021

(thousands, except per-share data)

8 unchanged sentences

Income from operations 127,602 405,628

Foreign currency exchange loss ( 1,674 ) ( 353 ) ( 2,041 ) ( 52 )

Foreign currency exchange gain (loss) ( 73 ) 132

Pension expense (excluding service costs) ( 41 ) ( 171 )

17 unchanged sentences

Three Months Ended

September 30 Nine Months Ended

2022 2021 2022 2021

Net income $ 96,733 $ 302,600

Other comprehensive income (loss), net of tax

Other comprehensive income, net of tax

Defined benefit pension plans

Amortization of actuarial (gain) loss, net of tax of $ 6 , $( 2 ), $ 16 , and $( 4 ), respectively

15 ( 3 ) 47 ( 10 )

Amortization of actuarial loss, net of tax of $ 2 and $ 5 , respectively

Effect of settlements, net of tax of $ — and $ 32 , respectively

Other comprehensive income (loss), net of tax 15 ( 3 ) 145 ( 10 )

Other comprehensive income, net of tax 6 114

Comprehensive income $ 96,739 $ 302,714

2 unchanged sentences

Consolidated Balance Sheets

September 30,

2023 December 31,

19 unchanged sentences

Consolidated Balance Sheets (continued)

September 30,

2023 December 31,

6 unchanged sentences

Compensation and benefits 79,606 142,463

Income taxes payable 12,365 —

Interest payable 5,088 9,955

14 unchanged sentences

300,000 shares authorized, 44,983 and 44,827 shares issued, respectively

Treasury stock, 5,367 shares at cost

Treasury stock, 5,392 and 5,367 shares at cost, respectively

( 140,391 ) ( 138,909 )

7 unchanged sentences

Consolidated Statements of Cash Flows

Nine Months Ended

Three Months Ended

Cash provided by (used for) operations

7 unchanged sentences

Other ( 518 ) ( 2,412 )

Decrease (increase) in working capital, net of acquisitions

Decrease (increase) in working capital

Receivables ( 111,253 ) ( 218,018 )

8 unchanged sentences

Expenditures for property and equipment ( 30,063 ) ( 17,448 )

Acquisitions of businesses and facilities ( 516,881 ) —

Proceeds from sales of assets and other 565 2,581

1 unchanged sentence

Cash provided by (used for) financing

Borrowings of long-term debt, including revolving credit facility — 28,000

Payments of long-term debt, including revolving credit facility — ( 28,000 )

Payments of deferred financing costs ( 1,170 ) —

Dividends paid on common stock ( 8,258 ) ( 5,939 )

Tax withholding payments on stock-based awards ( 5,926 ) ( 3,930 )

Treasury stock purchased ( 1,482 ) —

Other ( 451 ) ( 395 )

12 unchanged sentences

Common stock issued 156 2 2

Treasury stock purchased 25 ( 1,482 ) ( 1,482 )

Stock-based compensation 3,324 3,324

2 unchanged sentences

Tax withholding payments on stock-based awards ( 5,926 ) ( 5,926 )

Proceeds from exercise of stock options 27 27

Other ( 2 ) ( 2 )

Balance at March 31, 2023 44,983 $ 450 5,392 $ ( 140,391 ) $ 548,611 $ ( 514 ) $ 1,736,364 $ 2,144,520

Net income 218,111 218,111

Other comprehensive income 16 16

Stock-based compensation 3,011 3,011

Common stock dividends ($ 2.62 per share)

( 104,842 ) ( 104,842 )

Balance at June 30, 2022 44,815 $ 448 5,367 $ ( 138,909 ) $ 544,748 $ ( 917 ) $ 1,359,615 $ 1,764,985

Net income 219,587 219,587

Other comprehensive income 15 15

Stock-based compensation 3,287 3,287

Common stock dividends ($ 0.12 per share)

( 4,802 ) ( 4,802 )

Balance at September 30, 2022 44,815 $ 448 5,367 $ ( 138,909 ) $ 548,035 $ ( 902 ) $ 1,574,400 $ 1,983,072

See accompanying condensed notes to unaudited quarterly consolidated financial statements.

5 unchanged sentences

Net income 302,600 302,600

Other comprehensive loss ( 4 ) ( 4 )

Other comprehensive income 114 114

Common stock issued 117 1 1

6 unchanged sentences

Balance at March 31, 2022 44,815 $ 448 5,367 $ ( 138,909 ) $ 541,737 $ ( 933 ) $ 1,246,346 $ 1,648,689

Net income 302,556 302,556

Other comprehensive loss ( 3 ) ( 3 )

Stock-based compensation 1,411 1,411

Common stock dividends ($ 2.10 per share)

( 83,514 ) ( 83,514 )

Other ( 1 ) ( 1 )

Balance at June 30, 2021 44,698 $ 447 5,367 $ ( 138,909 ) $ 538,841 $ ( 1,085 ) $ 816,416 $ 1,215,710

Net income 91,699 91,699

Other comprehensive loss ( 3 ) ( 3 )

Stock-based compensation 2,181 2,181

Common stock dividends ($ 0.10 per share)

( 3,982 ) ( 3,982 )

Balance at September 30, 2021 44,698 $ 447 5,367 $ ( 138,909 ) $ 541,022 $ ( 1,088 ) $ 904,133 $ 1,305,605

See accompanying condensed notes to unaudited quarterly consolidated financial statements.

44 unchanged sentences

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 BMD segment, costs related to shipping and handling of $ 59.5 million and $ 48.3 million, for the three months ended September 30, 2022 and 2021, respectively, and $ 171.9 million and $ 144.5 million for the nine months ended September 30, 2022 and 2021, 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.

For our BMD segment, costs related to shipping and handling of $ 53.5 million and $ 56.3 million for the three months ended March 31, 2023 and 2022, 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 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.

Customer Rebates and Allowances

1 unchanged sentence

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 September 30, 2022 and December 31, 2021, we had $ 136.1 million and $ 138.1 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 March 31, 2023 and December 31, 2022, we had $ 58.7 million and $ 92.9 million, respectively, of rebates payable to our customers recorded in "Accrued liabilities, Other" on our Consolidated Balance Sheets.

We adjust our estimate of revenue at the earlier of when the probability of rebates paid changes or when the amounts become fixed.

2 unchanged sentences

We receive rebates and allowances from our vendors under a number of different programs, including vendor marketing programs.

At September 30, 2022 and December 31, 2021, we had $ 12.8 million and $ 13.0 million, respectively, of vendor rebates and allowances recorded in "Receivables, Other" on our Consolidated Balance Sheets.

At March 31, 2023 and December 31, 2022, we had $ 9.0 million and $ 17.8 million, respectively, of vendor rebates and allowances recorded in "Receivables, Other" on our Consolidated Balance Sheets.

Rebates and allowances received from our vendors are recognized as a reduction of "Materials, labor, and other operating expenses (excluding depreciation)" when the product is sold, unless the rebates and allowances are linked to a specific incremental cost to sell a vendor's product.

22 unchanged sentences

Inventories included the following (work in process is not material):

September 30,

2023 December 31,

5 unchanged sentences

Property and equipment consisted of the following asset classes:

September 30,

2023 December 31,

8 unchanged sentences

$ 772,734 $ 770,023

As of September 30, 2022, $ 251.3 million of property and equipment relates to two plywood facilities acquired by us on July 25, 2022.

For more information, see Note 5, Acquisition.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

4 unchanged sentences

Financial Instruments

Our financial instruments are cash and cash equivalents, accounts receivable, accounts payable, long-term debt, and interest rate swaps.

Our financial instruments are cash and cash equivalents, accounts receivable, accounts payable, long-term debt, and an interest rate swap.

Our cash is recorded at cost, which approximates fair value, and our cash equivalents are money market funds.

As of September 30, 2022 and December 31, 2021, we held $ 804.3 million and $ 701.6 million, respectively, in money market funds that are measured at fair value on a recurring basis using Level 1 inputs.

As of March 31, 2023 and December 31, 2022, we held $ 981.1 million and $ 954.4 million, respectively, in money market funds that are measured at fair value on a recurring basis using Level 1 inputs.

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

At September 30, 2022 and December 31, 2021, the book value of our fixed-rate debt for each period was $ 400.0 million, and the fair value was estimated to be $ 332.5 million and $ 420.0 million, respectively.

At March 31, 2023 and December 31, 2022, the book value of our fixed-rate debt for each period was $ 400.0 million, and the fair value was estimated to be $ 348.0 million and $ 348.5 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.

2 unchanged sentences

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.

As discussed below, we also have interest rate swaps to mitigate our variable interest rate exposure, the fair value of which is measured based on Level 2 inputs.

Interest Rate Risk and Interest Rate Swaps

As discussed below, we also have an interest rate swap to mitigate our variable interest rate exposure, the fair value of which is measured based on Level 2 inputs.

Interest Rate Risk and Interest Rate Swap

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 September 30, 2022, we had $ 50.0 million of variable-rate debt outstanding based on one-month term SOFR .

At March 31, 2023, 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, 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 were due on a monthly basis at an annual fixed rate of 1.007 %, and this swap expired in February 2022 (the Initial Swap).

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

In September 2022, we amended our interest rate swap to receive variable interest rate payments based on one-month SOFR plus a spread adjustment of 0.10 % and make fixed interest rate payments.

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.

The interest rate swap amendment increased the annual fixed rate from 0.39 % to 0.41 %, 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 September 30, 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.

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).

At March 31, 2023, we had one interest rate swap agreement, which we entered into in 2020 and commenced in February 2022.

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.

The interest rate swap agreement was not designated as a cash flow hedge, 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 March 31, 2023 and December 31, 2022, we recorded long-term assets of $ 4.0 million and $ 4.8 million, respectively, in "Other assets" on our Consolidated Balance Sheets, representing the fair value of the interest rate swap agreement.

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

Concentration of Credit Risk

1 unchanged sentence

In order to manage credit risk, we consider customer concentrations and current economic trends and monitor the creditworthiness of significant customers based on ongoing credit evaluations.

At September 30, 2022, receivables from two customers accounted for approximately 18 % and 12 % of total receivables.

At March 31, 2023, receivables from two customers accounted for approximately 19 % and 12 % of total receivables.

At December 31, 2022, receivables from these two customers accounted for approximately 17 % and 14 % of total receivables.

1 unchanged sentence

New and Recently Adopted Accounting Standards

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.

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.

This ASU is applicable to our fiscal year beginning January 1, 2023, and the impact of its adoption on our consolidated financial statements will depend on the contract assets and liabilities acquired in business combinations after that date.

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.

For the three and nine months ended September 30, 2022, we recorded $ 76.0 million and $ 248.8 million, respectively, of income tax expense and had an effective rate of 25.7 % and 25.2 %, respectively.

For the three and nine months ended September 30, 2021, we recorded $ 31.2 million and $ 183.6 million, respectively, of income tax expense and had an effective rate of 25.4 % and 25.3 %, respectively.

For all periods, the primary reason for the difference between the federal statutory income tax rate of 21 % and the effective tax rate was the effect of state taxes.

During the nine months ended September 30, 2022 and 2021, cash paid for taxes, net of refunds received, were $ 189.0 million and $ 203.5 million, respectively.

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

For the three months ended March 31, 2023 and 2022, we recorded $ 33.3 million and $ 98.9 million, respectively, of income tax expense and had an effective rate of 25.6 % and 24.6 %, respectively.

For both periods, the primary reason for the difference between the federal statutory income tax rate of 21 % and the effective tax rate was the effect of state taxes.

During the three months ended March 31, 2023 and 2022, cash paid for taxes, net of refunds received, were $ 1.2 million and $ 4.2 million, respectively.

Net Income Per Common Share

6 unchanged sentences

Three Months Ended

September 30 Nine Months Ended

2022 2021 2022 2021

(thousands, except per-share data)

5 unchanged sentences

Net income per common share - Diluted $ 2.43 $ 7.61

The computation of the dilutive effect of other potential common shares excludes stock awards representing 0.1 million and no shares of common stock, respectively, in the three months ended September 30, 2022 and 2021, and 0.1 million shares of common stock for both the nine months ended September 30, 2022 and 2021.

The computation of the dilutive effect of other potential common shares excludes stock awards representing an insignificant number of shares of common stock in both the three months ended March 31, 2023 and 2022.

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

4 unchanged sentences

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 $ 516.9 million, inclusive of estimated working capital at closing of approximately $ 27 million, which is subject to post-closing adjustments (the Acquisition).

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

Acquisition-related costs of $ 0.1 million and $ 1.3 million are recorded in "General and administrative expenses" in our Consolidated Statements of Operations for the three and nine months ended September 30, 2022.

These facilities 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, from these facilities of $ 43.0 million was reported as part of the Wood Products segment for the third quarter 2022.

In addition, the Wood Products segment reported an operating loss of $ 0.8 million from these facilities for the third quarter 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, working capital, customer relationships, 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:

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, 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).

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

Acquisition Date Fair Value

12 unchanged sentences

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.

Three Months Ended

September 30 Nine Months Ended

2022 2021 2022 2021

(unaudited, thousands, except per share data)

Sales $ 2,175,930 $ 1,950,267 $ 6,989,799 $ 6,449,695

Net income (a) $ 229,125 $ 100,109 $ 809,334 $ 638,834

___________________________________

(a) The pro forma financial information for the three and nine months ended September 30, 2022 was adjusted to exclude $ 0.1 million and $ 1.3 million, respectively, of 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 $ 11,792 $ 48,590 $ 60,382

Additions (a) — 73,974 73,974

Balance at September 30, 2022 $ 11,792 $ 122,564 $ 134,356

___________________________________

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

For additional information, see Note 5, Acquisition.

At September 30, 2022 and December 31, 2021, intangible assets represented the values assigned to trade names, trademarks and customer relationships.

Balance at December 31, 2022 and March 31, 2023 $ 11,792 $ 126,166 $ 137,958

At March 31, 2023 and December 31, 2022, intangible assets represented the values assigned to trade names and trademarks and customer relationships.

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 and are not amortized.

In addition, we recently acquired a trade name and customer relationships as discussed in Note 5, Acquisition.

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

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

In 2022, we acquired a trade name and customer relationships as discussed in Note 5, Acquisition.

The 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.

Amortization expense is expected to be approximately $ 16.8 million per year for the next five years.

For the three months ended March 31, 2023 and 2022 we recognized $ 4.3 million and $ 0.3 million, respectively, of amortization expense for intangible assets.

Intangible assets consisted of the following:

September 30, 2022

March 31, 2023

Gross Carrying

12 unchanged sentences

Long-term debt consisted of the following:

September 30,

2023 December 31,

6 unchanged sentences

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.

The Amended Agreement includes a $ 400 million senior secured asset-based revolving credit facility (Revolving Credit Facility) and a $ 50.0 million term loan (ABL Term Loan) maturing on 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).

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

4 unchanged sentences

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 September 30, 2022 was $ 396.2 million.

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 (a) 20 % of the Line Cap and (b) $ 75 million or (ii) (x) pro forma Excess Availability is equal to or exceeds the greater of (a) 15 % of Line Cap and (b) $ 55 million and (y) our fixed-charge coverage ratio is greater than or equal to 1 :1 on a pro forma basis.

Availability exceeded the minimum threshold amounts required for testing of the FCCR at all times since entering into the Amended Agreement, and Availability at March 31, 2023 was $ 395.9 million.

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 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

4 unchanged sentences

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.

At both September 30, 2022 and December 31, 2021, we had no borrowings outstanding under the Revolving Credit Facility.

At September 30, 2022 and December 31, 2021, we had $ 3.8 million and $ 4.0 million, respectively, of letters of credit outstanding.

At both March 31, 2023 and December 31, 2022, we had no borrowings outstanding under the Revolving Credit Facility and $ 4.1 million and $ 3.8 million, respectively, of letters of credit outstanding.

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

5 unchanged sentences

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

During the nine months ended September 30, 2022, the average interest rate on the ABL Term Loan was approximately 2.83 %.

During the three months ended March 31, 2023, the average interest rate on the ABL Term Loan was approximately 6.36 %.

We have received and expect to continue receiving patronage credits under the ABL Term Loan.

Patronage credits are distributions of profits from banks in the Farm Credit system, which are cooperatives that are required to distribute profits to their members.

Patronage credits are distributions of profits from banks in the Farm Credit system, which are cooperatives that are required to distribute profits to

their members.

Patronage distributions, which are generally made in cash, are received in the year after they are earned.

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 1.8 % during the nine months ended September 30, 2022.

After giving effect to expected patronage distributions, the effective average net interest rate on the ABL Term Loan was approximately 5.4 % during the three months ended March 31, 2023.

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.

14 unchanged sentences

The indenture governing the 2030 Notes provides for customary events of default and remedies.

Interest Rate Swaps

For information on interest rate swaps, see Interest Rate Risk and Interest Rate Swaps of Note 2, Summary of Significant Accounting Policies.

Interest Rate Swap

For information on interest rate swap, see Interest Rate Risk and Interest Rate Swap of Note 2, Summary of Significant Accounting Policies.

Cash Paid for Interest

For the nine months ended September 30, 2022 and 2021, cash payments for interest were $ 22.1 million and $ 20.4 million, respectively.

For the three months ended March 31, 2023 and 2022, cash payments for interest were $ 10.4 million and $ 10.6 million, respectively.

The components of lease expense were as follows:

Three Months Ended

September 30 Nine Months Ended

2022 2021 2022 2021

Operating lease cost $ 3,317 $ 3,561

8 unchanged sentences

Supplemental cash flow information related to leases was as follows:

Nine Months Ended

Three Months Ended

Cash paid for amounts included in the measurement of lease liabilities

6 unchanged sentences

Other information related to leases was as follows:

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

Weighted-average remaining lease term (years)

4 unchanged sentences

Finance leases 7.6 % 7.6 %

As of September 30, 2022, our minimum lease payment requirements for noncancelable operating and finance leases are as follows:

As of March 31, 2023, our minimum lease payment requirements for noncancelable operating and finance leases are as follows:

Operating Leases Finance Leases

14 unchanged sentences

PSU and RSU Awards

During the nine months ended September 30, 2022, we granted 66,180 PSUs to our officers and other employees, subject to performance and service conditions.

During the three months ended March 31, 2023, we granted 93,282 PSUs to our officers and other employees, subject to performance and service conditions.

For the officers, the number of shares actually awarded will range from 0 % to 200 % of the target amount, depending upon Boise Cascade's 2023 return on invested capital (ROIC), as approved by our compensation committee in accordance with the related grant agreement.

1 unchanged sentence

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 our 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.

Invested capital is defined as total assets plus capitalized lease expense, less cash, cash equivalents, and 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 2023 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.

During the nine months ended September 30, 2021, we granted 73,265 PSUs to our officers and other employees, subject to performance and service conditions.

During the 2021 performance period, officers and other employees both earned 200 % of the target based on Boise Cascade's 2021 ROIC and EBITDA, as applicable, determined by our Compensation Committee and executive management in accordance with the related grant agreements.

During the three months ended March 31, 2022, we granted 66,180 PSUs to our officers and other employees, subject to performance and service conditions.

During the 2022 performance period, officers and other employees earned 152 % and 200 %, respectively, of the target based on Boise Cascade's 2022 ROIC and EBITDA, 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.

During the nine months ended September 30, 2022 and 2021, we granted an aggregate of 86,869 and 101,059 RSUs, respectively, to our officers, other employees, and nonemployee directors with only service conditions.

During the three months ended March 31, 2023 and 2022, we granted an aggregate of 115,060 and 81,523 RSUs, respectively, to our officers, other employees, and nonemployee directors with only service conditions.

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

1 unchanged sentence

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

During the nine months ended September 30, 2022 and 2021, the total fair value of PSUs and RSUs vested was $ 12.0 million and $ 9.2 million, respectively.

The following summarizes the activity of our PSUs and RSUs awarded under our incentive plan for the nine months ended September 30, 2022:

During the three months ended March 31, 2023 and 2022, the total fair value of PSUs and RSUs vested was $ 16.8 million and $ 12.0 million, respectively.

The following summarizes the activity of our PSUs and RSUs awarded under our incentive plan for the three months ended March 31, 2023:

Number of shares Weighted Average Grant-Date Fair Value Number of shares Weighted Average Grant-Date Fair Value

4 unchanged sentences

Forfeited ( 5,399 ) 68.55 ( 3,200 ) 70.32

Outstanding, September 30, 2022 317,854 $ 51.46 155,339 $ 65.17

Outstanding, March 31, 2023 290,816 $ 66.54 179,567 $ 69.96

_______________________________

(a) Represents additional PSUs granted during the nine months ended September 30, 2022, related to above-target achievement of the 2021 performance condition described above.

(a) Represents additional PSUs granted during the three months ended March 31, 2023, related to above-target achievement of the 2022 performance condition described above.

Compensation Expense

2 unchanged sentences

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:

Three Months Ended

September 30 Nine Months Ended

2022 2021 2022 2021

PSUs $ 1,814 $ 1,306

1 unchanged sentence

Total $ 3,324 $ 2,392

The related tax benefit for the nine months ended September 30, 2022 and 2021, was $ 2.2 million and $ 1.4 million respectively.

As of September 30, 2022, total unrecognized compensation expense related to nonvested share-based compensation arrangements was $ 16.9 million.

The related tax benefit for the three months ended March 31, 2023 and 2022, was $ 0.9 million and $ 0.6 million respectively.

As of March 31, 2023, total unrecognized compensation expense related to nonvested share-based compensation arrangements was $ 23.7 million.

This expense is expected to be recognized over a weighted-average period of 2.2 years.

1 unchanged sentence

On November 14, 2017, we announced that our board of directors approved a dividend policy to pay quarterly cash dividends to holders of our common stock.

For more information regarding our dividend declarations and payments made during each of the nine months ended September 30, 2022 and 2021, see "Common stock dividends" on our Consolidated Statements of Stockholders' Equity.

On October 27, 2022 , our board of directors declared a quarterly dividend of $ 0.15 per share on our common stock, as well as a special dividend of $ 1.00 per share on our common stock, both payable on December 15, 2022 , to stockholders of record on December 1, 2022 .

For more information regarding our dividend declarations and payments made during each of the three months ended March 31, 2023 and 2022, see "Common stock dividends" on our Consolidated Statements of Stockholders' Equity.

On May 4, 2023 , our board of directors declared a quarterly dividend of $ 0.15 per share on our common stock, as well as a special dividend of $ 3.00 per share on our common stock, both payable on June 15, 2023 , to stockholders of record on June 1, 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 7, Debt.

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 Program

Stock Repurchase

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

This increase is in addition to the remaining authorized shares under our prior common stock repurchase program (the Program).

The total combined authorization is approximately 2.0 million shares.

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.

Our board of directors, at its discretion, may increase or decrease the number of authorized shares or terminate the program at any time.

During the nine months ended September 30, 2022, we did not purchase any shares under the Program.

Accumulated Other Comprehensive Loss

The following table details the changes in accumulated other comprehensive loss for the three and nine months ended September 30, 2022 and 2021:

Three Months Ended

September 30 Nine Months Ended

2022 2021 2022 2021

Beginning balance, net of taxes

$ ( 917 ) $ ( 1,085 ) $ ( 1,047 ) $ ( 1,078 )

Amortization of actuarial (gain) loss, before taxes (a) 21 ( 5 ) 63 ( 14 )

Effect of settlements, before taxes (a) — — 130 —

Income taxes ( 6 ) 2 ( 48 ) 4

Ending balance, net of taxes $ ( 902 ) $ ( 1,088 ) $ ( 902 ) $ ( 1,088 )

___________________________________

(a) Represents amounts reclassified from accumulated other comprehensive loss.

These amounts are included in the computation of net periodic pension cost.

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

During the three months ended March 31, 2023, we repurchased 24,727 shares under the Program at a cost of $ 1.5 million, or an average of $ 59.91 per share.

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

As of March 31, 2023, there were 1,972,262 shares of common stock that may yet be purchased under the Program.

Transactions With Related Party

4 unchanged sentences

Accordingly, we do not consolidate LTP's results in our financial statements.

Related-party sales to LTP from our Wood Products segment in our Consolidated Statements of Operations were $ 3.4 million and $ 3.6 million, respectively, during the three months ended September 30, 2022 and 2021, and $ 10.6 million and $ 10.2 million, respectively, during the nine months ended September 30, 2022 and 2021.

Related-party sales to LTP from our Wood Products segment in our Consolidated Statements of Operations were $ 3.0 million and $ 3.7 million, respectively, during the three months ended March 31, 2023 and 2022.

These sales are recorded in "Sales" in our Consolidated Statements of Operations.

Costs and Expenses

Related-party wood fiber purchases from LTP were $ 23.1 million and $ 22.3 million, respectively, during the three months ended September 30, 2022 and 2021, and $ 67.4 million and $ 63.3 million, respectively, during the nine months ended September 30, 2022 and 2021.

Related-party wood fiber purchases from LTP were $ 20.1 million and $ 20.8 million, respectively, during the three months ended March 31, 2023 and 2022.

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

2 unchanged sentences

Wood Products and BMD.

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.

3 unchanged sentences

Three Months Ended

September 30 Nine Months Ended

2022 2021 2022 2021

Wood Products (a)

6 unchanged sentences

Other 6.5 5.2

197.8 158.3 559.2 615.3

Building Materials Distribution

8 unchanged sentences

(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 both the nine months ended September 30, 2022 and 2021, approximately 78 % of Wood Products' EWP sales volumes were to our BMD segment.

For both the three months ended March 31, 2023 and 2022, approximately 79 % of Wood Products' EWP sales volumes were to our BMD segment.

An analysis of our operations by segment is as follows:

Three Months Ended

September 30 Nine Months Ended

2022 2021 2022 2021

Net sales by segment

15 unchanged sentences

In addition, we have purchase obligations for goods and services, capital expenditures, and raw materials entered into in the normal course of business.

As of September 30, 2022, there have been no material changes to the above commitments disclosed in the 2021 Form 10-K.

As of March 31, 2023, there have been no material changes to the above commitments disclosed in the 2022 Form 10-K.

Legal Proceedings and Contingencies

4 unchanged sentences

Financial Statements and Supplementary Data" in our 2022 Form 10-K describes the nature of our guarantees, including the approximate terms of the guarantees, how the guarantees arose, the events or circumstances that would require us to perform under the guarantees, and the maximum potential undiscounted amounts of future payments we could be required to make.

As of September 30, 2022, there have been no material changes to the guarantees disclosed in the 2021 Form 10-K.

As of March 31, 2023, there have been no material changes to the guarantees disclosed in the 2022 Form 10-K.

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-Q

Item 1. Financial Statements