What changed in this filing

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Item 1. Financial Statements

2024-05-06 compared with 2023-10-30 · 112 added, 125 removed, 513 unchanged (32% of the section changed)

3 unchanged sentences

Three Months Ended

September 30 Nine Months Ended

2023 2022 2023 2022

(thousands, except per-share data)

13 unchanged sentences

Change in fair value of interest rate swaps ( 220 ) ( 804 )

6,440 ( 3,741 ) 14,638 ( 12,981 )

Income before income taxes 136,953 130,008

12 unchanged sentences

Three Months Ended

September 30 Nine Months Ended

2023 2022 2023 2022

Net income $ 104,124 $ 96,733

2 unchanged sentences

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

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

Other comprehensive income, net of tax 8 6

3 unchanged sentences

Consolidated Balance Sheets

September 30,

2024 December 31,

19 unchanged sentences

Consolidated Balance Sheets (continued)

September 30,

2024 December 31,

6 unchanged sentences

Compensation and benefits 69,308 149,561

Income taxes payable 21,774 —

Interest payable 5,083 9,958

24 unchanged sentences

Consolidated Statements of Cash Flows

Nine Months Ended

Three Months Ended

Cash provided by (used for) operations

12 unchanged sentences

Accounts payable and accrued liabilities 75,041 36,181

Pension contributions ( 403 ) ( 922 )

Income taxes payable 25,834 28,631

7 unchanged sentences

Cash provided by (used for) financing

Treasury stock purchased ( 26,971 ) ( 1,482 )

Dividends paid on common stock ( 11,205 ) ( 8,258 )

Tax withholding payments on stock-based awards ( 10,980 ) ( 5,926 )

Treasury stock purchased ( 1,539 ) —

Payments of deferred financing costs — ( 1,170 )

Other ( 475 ) ( 451 )

Net cash used for financing ( 49,631 ) ( 16,117 )

Net increase in cash and cash equivalents 274,619 118,157

Net increase (decrease) in cash and cash equivalents ( 59,327 ) 2,377

Balance at beginning of the period 949,574 998,344

16 unchanged sentences

Balance at March 31, 2024 45,127 $ 451 5,649 $ ( 172,377 ) $ 553,821 $ ( 509 ) $ 1,875,816 $ 2,257,202

Net income 146,320 146,320

Other comprehensive income 7 7

Treasury stock purchased 1 ( 57 ) ( 57 )

Stock-based compensation 4,194 4,194

Common stock dividends ($ 3.15 per share)

( 126,460 ) ( 126,460 )

Balance at June 30, 2023 44,983 $ 450 5,393 $ ( 140,448 ) $ 552,805 $ ( 507 ) $ 1,756,224 $ 2,168,524

Net income 143,068 143,068

Other comprehensive income 6 6

Stock-based compensation 4,000 4,000

Common stock dividends ($ 0.20 per share)

( 8,003 ) ( 8,003 )

Balance at September 30, 2023 44,983 $ 450 5,393 $ ( 140,448 ) $ 556,805 $ ( 501 ) $ 1,891,289 $ 2,307,595

See accompanying condensed notes to unaudited quarterly consolidated financial statements.

7 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.

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 $ 61.6 million and $ 59.5 million for the three months ended September 30, 2023 and 2022, respectively, and $ 175.4 million and $ 171.9 million for the nine months ended September 30, 2023 and 2022, respectively, are included in "Selling and distribution expenses" in our Consolidated Statements of Operations.

For our BMD segment, costs related to shipping and handling of $ 59.0 million and $ 53.5 million for the three months ended March 31, 2024 and 2023, 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

Customer Rebates and Allowances and Cash Discounts

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

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

Rebates are generally estimated based on the expected amount to be paid and recorded as a decrease in "Sales." At September 30, 2023 and December 31, 2022, we had $ 95.3 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.

There have not been material changes to our estimates of rebates, although it is reasonably possible that a change in the estimate may occur.

Rebates are generally estimated based on the expected amount to be paid and recorded as a decrease in "Sales." At March 31, 2024 and December 31, 2023, we had $ 90.1 million and $ 87.9 million, respectively, of rebates payable to our customers recorded in "Accrued liabilities, Other" on our Consolidated Balance Sheets.

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

There have not been significant changes to our estimates of rebates, although it is reasonably possible that a change in the estimate may occur.

Vendor Rebates and Allowances

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

At September 30, 2023 and December 31, 2022, we had $ 12.5 million and $ 17.8 million, respectively, of vendor rebates and allowances recorded in "Receivables, Other" on our Consolidated Balance Sheets.

At March 31, 2024 and December 31, 2023, we had $ 10.3 million and $ 17.4 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,

2024 December 31,

5 unchanged sentences

Property and equipment consisted of the following asset classes:

September 30,

2024 December 31,

16 unchanged sentences

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

As of September 30, 2023 and December 31, 2022, we held $ 1,057.3 million and $ 954.4 million, respectively, in money market funds that are measured at fair value on a recurring basis using Level 1 inputs.

As of March 31, 2024 and December 31, 2023, we held $ 829.8 million and $ 899.4 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, 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 $ 350.0 million and $ 348.5 million, respectively.

At March 31, 2024 and December 31, 2023, the book value of our fixed-rate debt for each period was $ 400.0 million, and the fair value was estimated to be $ 370.0 million and $ 374.5 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.

5 unchanged sentences

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, 2023, we had $ 50.0 million of variable-rate debt outstanding based on one-month term SOFR.

At March 31, 2024, 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.

2 unchanged sentences

We do not speculate using derivative instruments.

At September 30, 2023, we had one interest rate swap agreement, which we entered into in 2020 and commenced in February 2022.

At March 31, 2024, 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.

1 unchanged sentence

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 September 30, 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.

At March 31, 2024 and December 31, 2023, we recorded a long-term asset of $ 2.7 million and $ 3.0 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).

2 unchanged sentences

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, 2023, receivables from two customers accounted for approximately 19 % and 14 % of total receivables.

At March 31, 2024, receivables from two customers accounted for approximately 19 % and 11 % of total receivables.

At December 31, 2023, receivables from these two customers accounted for approximately 19 % and 13 % of total receivables.

1 unchanged sentence

New and Recently Adopted Accounting Standards

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 and nine months ended September 30, 2023, we recorded $ 49.0 million and $ 131.7 million, respectively, of income tax expense and had an effective rate of 25.5 % and 25.4 %, respectively.

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 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, 2023 and 2022, cash paid for taxes, net of refunds received, were $ 103.7 million and $ 189.0 million, respectively.

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which enhances disclosures about significant segment expenses.

The amendments in this ASU are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 on a retrospective basis.

Early adoption is permitted.

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

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which enhances the transparency and decision usefulness of income tax disclosures, primarily related to the rate reconciliation and income taxes paid.

The amendments in this ASU are effective for annual periods beginning after December 15, 2024 on a prospective basis.

Early adoption is permitted.

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

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.

Reclassifications

Certain amounts in prior year's consolidated financial statements have been reclassified to conform with current year's presentation, none of which were considered material.

For the three months ended March 31, 2024 and 2023, we recorded $ 32.8 million and $ 33.3 million, respectively, of income tax expense and had an effective rate of 24.0 % and 25.6 %, 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, 2024 and 2023, cash paid for taxes, net of refunds received, were $ 1.9 million and $ 1.2 million, respectively.

Net Income Per Common Share

2 unchanged sentences

Diluted net income per common share is computed by dividing net income by the combination of the weighted average number of common shares outstanding during the period and other potentially dilutive weighted average common shares.

Other potentially dilutive weighted average common shares include the dilutive effect of stock options, RSUs, and PSUs for each period using the treasury stock method.

Other potentially dilutive weighted average common shares include the dilutive effect of RSUs and PSUs for each period using the treasury stock method.

Under the treasury stock method, the exercise price of a share and the amount of compensation expense, if any, for future service that has not yet been recognized are assumed to be used to repurchase shares in the current period.

1 unchanged sentence

Three Months Ended

September 30 Nine Months Ended

2023 2022 2023 2022

(thousands, except per-share data)

5 unchanged sentences

Net income per common share - Diluted $ 2.61 $ 2.43

The computation of the dilutive effect of other potential common shares excludes stock awards representing an insignificant number of shares of common stock and 0.1 million shares of common stock, respectively, in the three months ended September 30, 2023 and 2022, and an insignificant number of shares of common stock and 0.1 million shares of common stock in the nine months ended September 30, 2023 and 2022.

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, 2024 and 2023.

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, 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.

We finalized the purchase price accounting as of March 31, 2023.

On October 2, 2023, our wholly-owned subsidiary, Boise Cascade Building Materials Distribution, L.L.C.

(BMD) completed the previously announced acquisition of Brockway-Smith Company (BROSCO), a wholesale distributor specializing in doors and millwork, pursuant to the Agreement and Plan of Merger, dated August 22, 2023 (Merger Agreement), by and among Firepit Merger Sub, Inc., a wholly-owned subsidiary of BMD (the Merger Sub), and BROSCO.

(BMD) completed the acquisition of Brockway-Smith Company (BROSCO), a wholesale distributor specializing in doors and millwork, pursuant to the Agreement and Plan of Merger, dated August 22, 2023 (Merger Agreement), by and among BMD, Firepit Merger Sub, Inc., a wholly-owned subsidiary of BMD (the Merger Sub), BROSCO and the representative of the BROSCO stockholders.

On the terms and subject to the conditions set forth in the Merger Agreement, on October 2, 2023, Merger Sub merged with and into BROSCO, with BROSCO surviving the merger as a wholly-owned subsidiary of BMD (the Acquisition).

The purchase price of the Acquisition was $ 168 million, inclusive of estimated working capital at closing of $ 51 million, which is subject to post-closing adjustments.

The purchase price of the Acquisition was $ 166.2 million, net of cash acquired, and inclusive of a post-transaction closing adjustment of $ 3.4 million based upon working capital and indebtedness as defined in the Merger Agreement.

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

These facilities will expand our door and millwork business in the Northeast U.S.

markets and enhance BMD's general line product mix.

As a result of the limited time since the acquisition date and the ongoing status of the valuation, the initial accounting for the business combination is incomplete at the time of this filing.

As a result, we are unable to provide the amounts recognized as of the acquisition date for the major classes of assets acquired, liabilities assumed, and goodwill.

This information will be included in our Annual Report on Form 10-K for the year ended December 31, 2023.

We have substantially completed our estimates of fair value of assets acquired and liabilities assumed.

Our estimates are subject to revisions, which may result in adjustments to the preliminary values discussed below.

The purchase price consideration was allocated to the net assets acquired based upon their respective estimated fair values as follows:

Acquisition Date Fair Value

Cash and cash equivalents $ 4,009

Accounts receivable 19,688

Inventories 36,000

Other current assets 159

Property and equipment 57,331

Other assets 508

Intangible assets:

Trade name 18,000

Customer relationships 29,000

Goodwill 32,296

Assets acquired 196,991

Accounts payable 2,144

Accrued liabilities 4,078

Deferred tax liabilities 20,121

Other long-term liabilities 478

Liabilities assumed 26,821

Net assets acquired $ 170,170

Consideration paid, net of cash acquired $ 166,161

Pro Forma Financial Information

The following pro forma financial information presents the combined results of operations as if the BROSCO facilities had been combined with us on January 1, 2022.

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, 2022.

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

(unaudited, thousands)

Sales $ 1,594,458

Net income $ 101,051

Goodwill and Intangible Assets

1 unchanged sentence

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

Balance at December 31, 2022 and September 30, 2023 $ 11,792 $ 126,166 $ 137,958

At September 30, 2023 and December 31, 2022, intangible assets represented the values assigned to trade names and trademarks and customer relationships.

Balance at December 31, 2023 and March 31, 2024 $ 44,088 $ 126,166 $ 170,254

At March 31, 2024 and December 31, 2023, intangible assets represented the values assigned to trade names and trademarks and customer relationships.

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

1 unchanged sentence

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.

The acquired trade name had a useful life of one year .

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

For the three months ended September 30, 2023 and 2022 we recognized $ 4.2 million and $ 3.1 million, respectively, of amortization expense for intangible assets.

For the nine months ended September 30, 2023 and 2022 we recognized $ 12.8 million and $ 3.7 million, respectively, of amortization expense for intangible assets.

For the three months ended March 31, 2024 and 2023 we recognized $ 4.9 million and $ 4.3 million, respectively, of amortization expense for intangible assets.

Intangible assets consisted of the following:

September 30, 2023

March 31, 2024

Gross Carrying

12 unchanged sentences

Long-term debt consisted of the following:

September 30,

2024 December 31,

7 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.

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).

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, 2023 was $ 395.9 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 March 31, 2024 was $ 395.7 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.

5 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, 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.

At both March 31, 2024 and December 31, 2023, we had no borrowings outstanding under the Revolving Credit Facility and $ 4.3 million and $ 4.1 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, 2023, the average interest rate on the ABL Term Loan was approximately 6.75 %.

During the three months ended March 31, 2024, the average interest rate on the ABL Term Loan was approximately 7.18 %.

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

2 unchanged sentences

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 5.8 % during the nine months ended September 30, 2023.

After giving effect to expected patronage distributions, the effective average net interest rate on the ABL Term Loan was approximately 6.2 % during the three months ended March 31, 2024.

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.

11 unchanged sentences

and sell or transfer certain assets.

The indenture governing the 2030 Notes 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 indenture, and (ii) our consolidated leverage ratio is no greater than 3.5 :1, or (iii) the dividend, together with other dividends since the issue date, would not exceed our "builder" basket under the indenture.

The indenture governing the 2030 Notes 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 indenture, and (ii) our consolidated leverage ratio is no greater than 3.5 :1, or (iii) the dividend, together with other dividends since the issue date, would not exceed our "builder" basket under the indenture.

In addition, the indenture includes certain specific baskets for the payment of dividends.

1 unchanged sentence

Interest Rate Swap

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

For information on our 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, 2023 and 2022, cash payments for interest were $ 21.7 million and $ 22.1 million, respectively.

For the three months ended March 31, 2024 and 2023, cash payments for interest were $ 10.0 million and $ 10.4 million, respectively.

The components of lease expense were as follows:

Three Months Ended

September 30 Nine Months Ended

2023 2022 2023 2022

Operating lease cost $ 3,475 $ 3,317

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, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Weighted-average remaining lease term (years)

4 unchanged sentences

Finance leases 7.5 % 7.6 %

As of September 30, 2023, our minimum lease payment requirements for noncancelable operating and finance leases are as follows:

As of March 31, 2024, 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, 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.

During the three months ended March 31, 2024, we granted 60,207 PSUs to our officers and other employees, subject to performance and service conditions.

For the officers, the PSUs granted are subject to a three-year performance period.

The number of shares actually awarded will range from 0 % to 200 % of the target amount.

Achievement is measured in annual sub-periods, based on Boise Cascade's return on invested capital (ROIC) for 2024, 2025, and 2026.

The average achievement for the three years included in the performance period will determine the number of earned PSUs, as approved by our compensation committee in accordance with the related grant agreement.

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

1 unchanged sentence

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.

For the other employees, the PSUs granted are subject to a one-year performance period.

The number of shares actually awarded will range from 0 % to 200 % of the target amount, depending upon Boise Cascade’s 2024 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, 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.

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.

The PSUs granted were subject to a one-year performance period.

During the 2023 performance period, officers and other employees both earned 200 % of the target based on Boise Cascade's 2023 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, 2023 and 2022, we granted an aggregate of 116,454 and 86,869 RSUs, respectively, to our officers, other employees, and nonemployee directors with only service conditions.

During the three months ended March 31, 2024 and 2023, we granted an aggregate of 71,168 and 115,060 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, 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 nine months ended September 30, 2023:

During the three months ended March 31, 2024 and 2023, the total fair value of PSUs and RSUs vested was $ 31.1 million and $ 16.8 million, respectively.

The following summarizes the activity of our PSUs and RSUs awarded under our incentive plan for the three months ended March 31, 2024:

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

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Forfeited ( 8,924 ) 72.08 ( 5,234 ) 71.90

Outstanding, September 30, 2023 288,366 $ 66.52 179,141 $ 70.12

Outstanding, March 31, 2024 299,320 $ 85.89 149,149 $ 103.54

_______________________________

(a) Represents additional PSUs granted during the nine months ended September 30, 2023, related to above-target achievement of the 2022 performance condition described above.

(a) Represents additional PSUs granted during the three months ended March 31, 2024, related to above-target achievement of the 2023

performance condition described above.

Compensation Expense

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Three Months Ended

September 30 Nine Months Ended

2023 2022 2023 2022

PSUs $ 2,277 $ 1,814

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Total $ 4,105 $ 3,324

The related tax benefit for the nine months ended September 30, 2023 and 2022, was $ 2.9 million and $ 2.2 million respectively.

As of September 30, 2023, total unrecognized compensation expense related to nonvested share-based compensation arrangements was $ 22.4 million.

The related tax benefit for the three months ended March 31, 2024 and 2023, was $ 1.0 million and $ 0.9 million respectively.

As of March 31, 2024, total unrecognized compensation expense related to nonvested share-based compensation arrangements was $ 32.5 million.

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

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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, 2023 and 2022, see "Common stock dividends" on our Consolidated Statements of Stockholders' Equity.

On October 26, 2023, our board of directors declared a quarterly dividend of $ 0.20 per share, as well as a special dividend of $ 5.00 per share, on our common stock.

The dividends will be paid on December 15, 2023, to stockholders of record on December 1, 2023.

For more information regarding our dividend declarations and payments made during each of the three months ended March 31, 2024 and 2023, see "Common stock dividends" on our Consolidated Statements of Stockholders' Equity.

On May 2, 2024, our board of directors declared a quarterly dividend of $ 0.20 per share on our common stock, payable on June 17, 2024, to stockholders of record on June 3, 2024.

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.

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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 nine months ended September 30, 2023, we repurchased 25,678 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 September 30, 2023, there were 1,971,311 shares of common stock that may yet be purchased under the Program.

During 2024, we repurchased 205,938 shares under the Program at a cost of $ 27.0 million, or an average of $ 130.97 per share.

During 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 Sheets.

As of March 31, 2024, there were 1,715,373 shares of common stock that may yet be purchased under the Program.

Transactions With Related Party

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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 $ 2.9 million and $ 3.4 million, respectively, during the three months ended September 30, 2023 and 2022, and $ 9.0 million and $ 10.6 million, respectively, during the nine months ended September 30, 2023 and 2022.

Related-party sales to LTP from our Wood Products segment in our Consolidated Statements of Operations were $ 2.6 million and $ 3.0 million, respectively, during the three months ended March 31, 2024 and 2023.

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

Costs and Expenses

Related-party wood fiber purchases from LTP were $ 20.3 million and $ 23.1 million, respectively, during the three months ended September 30, 2023 and 2022, and $ 61.5 million and $ 67.4 million, respectively, during the nine months ended September 30, 2023 and 2022.

Related-party wood fiber purchases from LTP were $ 19.8 million and $ 20.1 million, respectively, during the three months ended March 31, 2024 and 2023.

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

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Three Months Ended

September 30 Nine Months Ended

2023 2022 2023 2022

Wood Products (a)

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Other 6.2 6.5

164.2 197.8 508.0 559.2

Building Materials Distribution

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(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, 2023 and 2022, approximately 78 % of Wood Products' EWP sales volumes were to our BMD segment.

For the three months ended March 31, 2024 and 2023, approximately 77 % and 79 % , respectively, 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

2023 2022 2023 2022

Net sales by segment

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

As of March 31, 2024, there have been no material changes to the above commitments disclosed in the 2023 Form 10-K.

Legal Proceedings and Contingencies

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Financial Statements and Supplementary Data" in our 2023 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, 2023, there have been no material changes to the guarantees disclosed in the 2022 Form 10-K.

As of March 31, 2024, there have been no material changes to the guarantees disclosed in the 2023 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