Condensed Notes to Unaudited Quarterly Consolidated Financial Statements
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1.
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Nature of Operations and Consolidation
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Nature of Operations
Boise Cascade Company is a building products company headquartered in Boise, Idaho. As used in this Form 10-Q, the terms "Boise Cascade," "we," and "our" refer to Boise Cascade Company and its consolidated subsidiaries. We are one of the largest producers of engineered wood products (EWP) and plywood in North America and a leading U.S. wholesale distributor of building products.
We operate our business using
three
reportable segments: (1) Wood Products, which manufactures EWP, plywood, ponderosa pine lumber, studs, and particleboard; (2) Building Materials Distribution, which is a wholesale distributor of building materials; and (3) Corporate and Other, which includes corporate support staff services, related assets and liabilities, pension plan activity, and foreign currency exchange gains and losses. For more information, see Note 12, Segment Information.
Consolidation
The accompanying quarterly consolidated financial statements have not been audited by an independent registered public accounting firm but, in the opinion of management, include all adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods presented. Except as disclosed within these condensed notes to unaudited quarterly consolidated financial statements, the adjustments made were of a normal, recurring nature. Certain information and footnote disclosures normally included in our annual consolidated financial statements have been condensed or omitted. The quarterly consolidated financial statements include the accounts of Boise Cascade and its subsidiaries after elimination of intercompany balances and transactions. Quarterly results are not necessarily indicative of results that may be expected for the full year. These condensed notes to unaudited quarterly consolidated financial statements should be read in conjunction with our
2015
Form 10-K and the other reports we file with the Securities and Exchange Commission (SEC).
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2.
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Summary of Significant Accounting Policies
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Accounting Policies
The complete summary of significant accounting policies is included in Note 2, Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements in "Item 8. Financial Statements and Supplementary Data" in our
2015
Form 10-K.
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. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. Such estimates include the valuation of accounts receivable, inventories, goodwill, intangible assets, and other long-lived assets; legal contingencies; guarantee obligations; indemnifications; assumptions used in retirement, medical, and workers' compensation benefits; stock-based compensation; fair value measurements; income taxes; and vendor and customer rebates, among others. These estimates and assumptions are based on management's best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. We adjust such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in these estimates resulting from continuing changes in the economic environment will be reflected in the consolidated financial statements in future periods.
Vendor and Customer Rebates and Allowances
We receive rebates and allowances from our vendors under a number of different programs, including vendor marketing programs. At
September 30, 2016
, and
December 31, 2015
, we had
$5.9 million
and
$7.7 million
, respectively, of
vendor rebates and allowances recorded in "Receivables, Other" on our Consolidated Balance Sheets. Rebates and allowances received from our vendors are recognized as a reduction of "Materials, labor, and other operating expenses (excluding depreciation)" when the product is sold, unless the rebates and allowances are linked to a specific incremental cost to sell a vendor's product. Amounts received from vendors that are linked to specific selling and distribution expenses are recognized as a reduction of "Selling and distribution expenses" in the period the expense is incurred.
We also provide rebates to our customers and our customers' customers based on the volume of their purchases. We provide the rebates to increase the sell-through of our products. The rebates are recorded as a decrease in "Sales." At
September 30, 2016
, and
December 31, 2015
, we had
$34.4 million
and
$27.7 million
, respectively, of rebates payable to our customers recorded in "Accrued liabilities, Other" on our Consolidated Balance Sheets.
Leases
We lease a portion of our distribution centers as well as other property and equipment under operating leases. For purposes of determining straight-line rent expense, the lease term is calculated from the date we first take possession of the facility, including any periods of free rent and any renewal option periods we are reasonably assured of exercising. Rental expense for operating leases was
$4.6 million
and
$4.8 million
for the
three
months ended
September 30, 2016
and
2015
, respectively, and
$13.5 million
and
$13.8 million
for the
nine
months ended
September 30, 2016
and
2015
, respectively. Sublease rental income was not material in any of the periods presented.
Inventories
Inventories included the following (work in process is not material):
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September 30,
2016
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December 31,
2015
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(thousands)
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Finished goods and work in process
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$
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346,905
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$
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292,826
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Logs
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63,892
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58,299
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Other raw materials and supplies
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40,259
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33,732
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$
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451,056
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$
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384,857
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Property and Equipment
Property and equipment consisted of the following asset classes:
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September 30,
2016
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December 31,
2015
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(thousands)
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Land
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$
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38,696
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$
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36,876
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Buildings
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135,001
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106,269
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Improvements
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50,240
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46,205
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Mobile equipment, information technology, and office furniture
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121,101
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109,702
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Machinery and equipment
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600,461
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437,433
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Construction in progress
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25,551
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34,661
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971,050
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771,146
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Less accumulated depreciation
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(413,837
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)
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(368,480
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$
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557,213
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$
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402,666
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As of
September 30, 2016
,
$149.1 million
of property and equipment relates to two EWP facilities acquired by us on March 31, 2016. For more information, see Note 5, Acquisitions.
Fair Value
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy under GAAP gives the highest priority to quoted market prices (Level 1) and the lowest priority to unobservable inputs (Level 3). In general, and where applicable, we use quoted prices in active markets for identical assets or liabilities to determine fair value (Level 1). If quoted prices in active markets for identical assets or liabilities are not available to determine fair value, we use quoted prices for similar assets and liabilities or inputs that are observable either directly or indirectly (Level 2). If quoted prices for identical or similar assets are not available or are unobservable, we may use internally developed valuation models, whose inputs include bid prices, and third-party valuations utilizing underlying asset assumptions (Level 3).
Financial Instruments
Our financial instruments are cash and cash equivalents, restricted cash, accounts receivable, accounts payable, long-term debt, and interest rate swaps. Our cash and restricted cash is recorded at cost, which approximates fair value, and our cash equivalents are money market funds measured at fair value. As of
September 30, 2016
, and
December 31, 2015
, we held
$98.4 million
and
$170.2 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, 2016
and
December 31, 2015
, the book value of our fixed-rate debt was
$465.5 million
and
$300.0 million
, respectively, and the fair value was estimated to be
$474.6 million
and
$309.0 million
, respectively. The difference between the book value and the fair value is derived from the difference between the period-end market interest rate and the stated rate of our fixed-rate, long-term debt. 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 term loans and revolving credit facility are based on market rates such as the London Interbank Offered Rate (LIBOR) or a base rate. Because the interest rate on the term loans and revolving credit facility are based on current market rates, we believe that the estimated fair value of the outstanding balance on our term loans and revolving credit facility 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
We are exposed to interest rate risk arising from fluctuations in variable-rate LIBOR on our term loans and when we have loan amounts outstanding on our revolving credit facility. Our objective is to limit the variability of interest payments on our debt. To meet this objective, management may enter into receive-variable, pay-fixed interest rate swaps to change the variable-rate cash flow exposure to 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.
On February 16, 2016 and March 31, 2016, we entered into interest rate swap agreements with notional principal amounts of
$50.0 million
and
$75.0 million
, respectively, to offset risks associated with the variability in cash flows relating to interest payments that are based on one-month LIBOR. Under the interest rate swaps, we receive LIBOR-based variable interest rate payments and make fixed interest rate payments, thereby fixing the interest rate on
$125.0 million
of debt. Payments on the interest rate swaps with notional principal amounts of
$50.0 million
and
$75.0 million
are due on a monthly basis at a fixed rate of
1.007%
and
1.256%
, respectively, and expire in February 2022 and March 2022, respectively. 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 the Consolidated Statements of Operations rather than through other comprehensive income. At
September 30, 2016
, we recorded a long-term asset of
$44 thousand
recorded in "Other assets" on our Consolidated Balance Sheets and a long-term liability of
$809 thousand
recorded in "Other long-term liabilities" on our Consolidated Balance Sheets, each 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).
Concentration of Credit Risk
We are exposed to credit risk related to customer accounts receivable. In order to manage credit risk, we consider customer concentrations and current economic trends and monitor the creditworthiness of significant customers based on ongoing credit evaluations. At
September 30, 2016
, and
December 31, 2015
, receivables from two customers each accounted for approximately
12%
and
10%
, respectively, of total receivables. No other customer accounted for 10% or more of total receivables.
New and Recently Adopted Accounting Standards
In August 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-15,
Statement of Cash Flows (Topic 230)
. This ASU is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. This new standard is effective for annual periods beginning after December 15, 2017, and interim periods within that reporting period. Early adoption is permitted, provided that all of the amendments are adopted in the same period. The guidance requires application using a retrospective transition method. We are evaluating the effect that this guidance will have on our consolidated statements of cash flows.
In March 2016, the FASB issued ASU 2016-09,
Improvements to Employee Share-Based Payment Accounting
. This ASU simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. This new standard is effective for annual periods beginning after December 15, 2016, and interim periods within that reporting period. Early adoption is permitted in any interim or annual period, with adjustments reflected as of the beginning of the fiscal year of adoption. We are evaluating the effect that this guidance will have on our consolidated financial statements and related disclosures.
In February 2016, the FASB issued ASU 2016-02,
Leases
. This amendment requires a lessee to recognize substantially all leases (whether operating or finance leases) on the balance sheet as a right-of-use asset and an associated lease liability. Short-term leases of 12 months or less are excluded from this amendment. For leases defined as finance leases under the new standard, the lessee subsequently recognizes interest expense and amortization of the right-of-use asset, similar to accounting for capital leases under current GAAP. For leases defined as operating leases under the new standard, the lessee subsequently recognizes straight-line lease expense over the life of the lease. This new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The guidance is to be applied using a modified retrospective transition method with the option to elect a package of practical expedients. The adoption of this ASU will result in a significant increase to our balance sheet for lease liabilities and right-of-use assets, which has not yet been quantified. We are currently evaluating this and the other effects of this ASU on our financial statements.
In July 2015, the FASB issued ASU 2015-11,
Simplifying the Measurement of Inventory
. This ASU requires entities to measure most inventory "at the lower of cost or net realizable value," thereby simplifying the current guidance under which an entity must measure inventory at the lower of cost or market. Although the new standard is not effective until annual and interim reporting periods beginning after December 15, 2016, early adoption is permitted. We do not expect the adoption of this guidance to have a material effect on our financial statements.
In May 2015, the FASB issued ASU 2015-07,
Fair Value Measurement (Topic 820): Disclosures of Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent).
This ASU removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. This ASU also removes the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the net asset value per share practical expedient. Although we adopted the new standard on January 1, 2016, there was no effect on our interim reporting periods. The adoption of this standard will affect certain pension asset disclosures in our annual reporting period and will have no impact on our results of operations, financial position, or cash flows.
In May 2014, the FASB issued ASU 2014-09,
Revenue from Contracts with Customers
. This ASU requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in GAAP when it becomes effective. At its July 9, 2015, meeting, the FASB decided to delay the effective date of the revenue recognition standard by one year. The new standard is now effective for annual and interim reporting periods beginning after December 15, 2017. However, reporting entities may choose to adopt the standard as of the original effective date. The standard permits the use of either the retrospective or cumulative effect transition method. We are evaluating the effect that this guidance will have on our consolidated financial statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of the standard 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.
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
and
nine
months ended
September 30, 2016
, we recorded
$5.5 million
and
$19.2 million
, respectively, of income tax expense and had an effective rate of
35.6%
and
36.0%
, respectively. For the
three
and
nine
months ended
September 30, 2015
, we recorded
$12.6 million
and
$28.8 million
, respectively, of income tax expense and had an effective rate of
36.5%
and
36.6%
, respectively. During the
three
and
nine
months ended
September 30, 2016
, the primary reason for the difference between the federal statutory income tax rate of
35%
and the effective tax rate was the effect of state taxes, offset partially by other tax credits. During the
three
and
nine
months ended
September 30, 2015
, the primary reason for the difference between the federal statutory income tax rate of
35%
and the effective tax rate was the effect of state taxes, offset partially by the domestic production activities deduction.
During the
nine
months ended
September 30, 2016
and
2015
, refunds received, net of cash paid for taxes, were
$1.4 million
and
$4.9 million
, respectively.
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4.
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Net Income Per Common Share
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Basic net income per common share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Weighted average common shares outstanding for the basic net income per common share calculation includes certain vested restricted stock units (RSUs) as there are no conditions under which those shares will not be issued. Diluted net income per common share is computed by dividing net income by the combination of other potentially dilutive weighted average common shares and the weighted average number of common shares outstanding during the period. Other potentially dilutive weighted average common shares include the dilutive effect of stock options, RSUs, and performance stock units (PSUs) for each period using the treasury stock method. Under the treasury stock method, the exercise price of a share, the amount of compensation expense, if any, for future service that has not yet been recognized, and the amount of tax benefits that would be recorded in additional paid-in capital, if any, when the share is exercised are assumed to be used to repurchase shares in the current period.
The following table sets forth the computation of basic and diluted net income per common share:
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Three Months Ended
September 30
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Nine Months Ended
September 30
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2016
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2015
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2016
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2015
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(thousands, except per-share data)
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Net income
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$
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9,981
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$
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22,007
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$
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34,159
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$
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49,854
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Weighted average common shares outstanding during the period (for basic calculation)
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38,814
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39,127
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|
38,827
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|
|
39,372
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Dilutive effect of other potential common shares
|
306
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|
113
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123
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|
101
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Weighted average common shares and potential common shares (for diluted calculation)
|
39,120
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39,240
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38,950
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39,473
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Net income per common share - Basic
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$
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0.26
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$
|
0.56
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$
|
0.88
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|
|
$
|
1.27
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Net income per common share - Diluted
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$
|
0.26
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$
|
0.56
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$
|
0.88
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$
|
1.26
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The computation of the dilutive effect of other potential common shares excludes stock awards representing
0.2 million
shares and
no
shares of common stock, respectively, in the
three
months ended
September 30, 2016
and
2015
, and
0.2 million
shares and
0.1 million
shares of common stock, respectively, in the
nine
months ended
September 30, 2016
and
2015
. Under the treasury stock method, the inclusion of these stock awards would have been antidilutive.
On March 31, 2016, our wholly owned subsidiary, Boise Cascade Wood Products, L.L.C., completed the acquisition of Georgia-Pacific LLC's and certain of its affiliates' (collectively, "GP") EWP facilities located in Thorsby, Alabama, and Roxboro, North Carolina, for an aggregate purchase price of
$215.9 million
, including a post-closing adjustment of
$0.3 million
based upon a working capital target (the Acquisition). We funded the Acquisition and related costs with cash on hand, a new
$75.0 million
term loan, and a
$55.0 million
draw under our revolving credit facility. For additional information on the new term loan and draw under our revolving credit facility, see Note 7, Debt. Acquisition-related costs of
$3.6 million
are recorded in "General and administrative expenses" in our Consolidated Statements of Operations for the
nine
months ended
September 30, 2016
.
These facilities complement our existing EWP business and position us to support customers as the U.S. housing recovery continues in the years ahead. The additional EWP capacity will also help us cost effectively deliver products to our customers in the eastern and southeastern United States. Sales, including sales to our Building Materials Distribution segment, and income from operations (excluding sales and marketing costs) from these facilities of
$49.0 million
and
$0.3 million
, respectively, were reported as part of the Wood Products segment for the period of April 1, 2016 through September 30, 2016.
Goodwill represents the excess of the purchase price and related costs over the fair value of the net tangible and intangible assets of businesses acquired. The primary qualitative factor that contributed to the recognition of goodwill relates to additional capacity and an assembled workforce in key product lines to serve future and existing customers. The facilities are geographically located in a high growth housing area that allows us to optimize our mill system and realize freight and other cost synergies. All of the goodwill was assigned to the Wood Products segment and is deductible for U.S. income tax purposes.
The following table summarizes the final allocations of the purchase price to the assets acquired and liabilities assumed, based on our estimates of the fair value at the date of the Acquisition:
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Acquisition Date Fair Value
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(thousands)
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Accounts receivable
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$
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10,467
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|
|
Inventories
|
|
17,837
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|
|
Property and equipment
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|
149,135
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Other assets
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619
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|
Intangible assets:
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Customer relationships
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|
6,000
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|
Goodwill
|
|
33,610
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|
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Assets acquired
|
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217,668
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|
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|
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|
Accrued liabilities
|
|
1,768
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|
|
Liabilities assumed
|
|
1,768
|
|
|
|
|
|
|
Net assets acquired
|
|
$
|
215,900
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|
Pro Forma Financial Information
The following pro forma financial information gives effect to the Acquisition as if it had occurred on January 1, 2015. The pro forma financial information also gives effect to the issuance of a
$75.0 million
term loan due March 30, 2026 and a
$55.0 million
draw under our revolving credit facility incurred to partially finance the Acquisition, as if such transactions had occurred on January 1, 2015. The pro forma results are intended for informational purposes only and do not purport to represent what our results of operations would actually have been had the Acquisition and related financing transactions occurred on January 1, 2015. They also do not reflect any revenue enhancements or cost savings, operating synergies, customer attrition, or incremental depreciation upon the restart of laminated veneer lumber assets at Roxboro.
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Pro Forma
|
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Three Months Ended
September 30
|
|
Nine Months Ended
September 30
|
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|
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2015
|
|
2016
|
|
2015
|
|
|
|
(unaudited, thousands, except per-share data)
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|
Sales
|
|
$
|
1,018,421
|
|
|
$
|
3,018,876
|
|
|
$
|
2,825,278
|
|
|
Net income (a)
|
|
$
|
22,483
|
|
|
$
|
37,305
|
|
|
$
|
50,382
|
|
|
Net income per common share - Basic
|
|
$
|
0.57
|
|
|
$
|
0.96
|
|
|
$
|
1.28
|
|
|
Net income per common share - Diluted
|
|
$
|
0.57
|
|
|
$
|
0.96
|
|
|
$
|
1.28
|
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___________________________________
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(a)
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The pro forma financial information for the
nine
months ended
September 30, 2016
, was adjusted to exclude
$3.6 million
of pre-tax acquisition-related costs for legal, accounting, and other advisory-related services.
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6.
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Goodwill and Intangible Assets
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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 carrying amount of our goodwill by segment is as follows:
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Building
Materials
Distribution
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Wood
Products
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Corporate
and
Other
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Total
|
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(thousands)
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|
Balance at December 31, 2015
|
|
$
|
5,593
|
|
|
$
|
16,230
|
|
|
$
|
—
|
|
|
$
|
21,823
|
|
|
Additions
|
|
—
|
|
|
33,610
|
|
(a)
|
—
|
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|
33,610
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|
|
Balance at September 30, 2016
|
|
$
|
5,593
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|
|
$
|
49,840
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|
|
$
|
—
|
|
|
$
|
55,433
|
|
___________________________________
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(a)
|
Represents the acquisition of GP's two EWP facilities. For additional information, see Note 5, Acquisitions.
|
At
September 30, 2016
and
December 31, 2015
, intangible assets represent the values assigned to trade names and trademarks and customer relationships. The trade names and trademarks have indefinite lives and are not amortized. The weighted-average useful life for customer relationships from the date of purchase is approximately
11
years. Amortization expense is expected to be approximately
$0.7 million
per year for the next five years.
Intangible assets consisted of the following:
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|
September 30, 2016
|
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Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Carrying
Amount
|
|
|
|
(thousands)
|
|
Trade names and trademarks
|
|
$
|
8,900
|
|
|
$
|
—
|
|
|
$
|
8,900
|
|
|
Customer relationships
|
|
7,400
|
|
|
(580
|
)
|
|
6,820
|
|
|
|
|
$
|
16,300
|
|
|
$
|
(580
|
)
|
|
$
|
15,720
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2015
|
|
|
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Carrying
Amount
|
|
|
|
(thousands)
|
|
Trade names and trademarks
|
|
$
|
8,900
|
|
|
$
|
—
|
|
|
$
|
8,900
|
|
|
Customer relationships
|
|
1,400
|
|
|
(210
|
)
|
|
1,190
|
|
|
|
|
$
|
10,300
|
|
|
$
|
(210
|
)
|
|
$
|
10,090
|
|
Long-term debt consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2016
|
|
December 31,
2015
|
|
|
(thousands)
|
|
Asset-based revolving credit facility
|
$
|
—
|
|
|
$
|
—
|
|
|
Asset-based credit facility term loan
|
50,000
|
|
|
50,000
|
|
|
Term loan
|
75,000
|
|
|
—
|
|
|
6.375% senior notes due 2020
|
115,493
|
|
|
299,990
|
|
|
Unamortized premium on 6.375% senior notes
|
393
|
|
|
1,215
|
|
|
5.625% senior notes due 2024
|
350,000
|
|
|
—
|
|
|
Deferred financing costs
|
(9,312
|
)
|
|
(6,616
|
)
|
|
Total debt
|
581,574
|
|
|
344,589
|
|
|
Less current portion of long-term debt, including premium and deferred financing costs
|
(114,342
|
)
|
|
—
|
|
|
Total long-term debt
|
$
|
467,232
|
|
|
$
|
344,589
|
|
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., Chester Wood Products LLC, and Moncure Plywood LLC, as guarantors, entered into an Amended and Restated Credit Agreement (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) maturing on April 30, 2020 and a
$50.0 million
term loan (ABL Term Loan) maturing on May 1, 2022. Interest on borrowings under our Revolving Credit Facility and ABL Term Loan are payable monthly. Borrowings under the Amended Agreement are constrained by a borrowing base formula dependent upon levels of eligible receivables and inventory reduced by outstanding borrowings and letters of credit (Availability). On February 11, 2016, we entered into the second amendment to the Amended Agreement so that the LIBOR rate for the ABL Term Loan is determined and adjusted on a monthly basis rather than a daily basis. On June 30, 2016, we entered into a joinder and revolver increase agreement that increased the aggregate revolving commitments from
$350 million
to
$370 million
. Also on June 30, 2016, we entered into the third amendment to the Amended Agreement to make certain modifications to the definition of eligible accounts in the Amended Agreement to increase the concentration limit related to certain accounts owed to the borrowers for purposes of determining borrowing base.
The Amended Agreement is secured by a first-priority security interest in substantially all of our assets, except for property and equipment. The proceeds of borrowings under the agreement are available for working capital and other general corporate purposes.
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
$37 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, 2016
, was
$354.8 million
.
The Amended Agreement generally permits dividends only if certain conditions are met, including complying with either (i) pro forma Excess Availability (as defined in the Amended Agreement) equal to or exceeding
25%
of the aggregate Revolver Commitments (as defined in the Amended Agreement) or (ii) (x) pro forma Excess Availability equal to or exceeding
15%
of the aggregate Revolver Commitment and (y) a fixed-charge coverage ratio of
1
:1 on a pro forma basis.
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
1.75%
for loans based on LIBOR
and from
0.25%
to
0.75%
for loans based on the base rate. The spread is determined on the basis of a pricing grid that results in a higher spread as average quarterly Availability declines. Letters of credit are subject to a fronting fee payable to the issuing bank and a fee payable to the lenders equal to the LIBOR margin rate. In addition, we are required to pay an unused commitment fee at a rate ranging from
0.25%
to
0.375%
per annum (based on facility utilization) of the average unused portion of the lending commitments.
At both
September 30, 2016
and
December 31, 2015
, we had
no
borrowings outstanding under the Revolving Credit Facility and
$5.9 million
and
$5.6 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. During the
nine
months ended
September 30, 2016
, the minimum and maximum borrowings under the Revolving Credit Facility were
zero
and
$101.5 million
, respectively, and the average interest rate on borrowings was approximately
1.71%
.
ABL Term Loan
The ABL Term Loan was provided by institutions within the Farm Credit system. Borrowings under the ABL Term Loan may be repaid from time to time at the discretion of the borrowers without premium or penalty. 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
2.25%
for LIBOR rate loans and from
0.75%
to
1.25%
for base rate loans, both dependent on the amount of Average Excess Availability (as defined in the Amended Agreement). During the
nine
months ended
September 30, 2016
, the average interest rate on the ABL Term Loan was approximately
2.20%
.
We have received and expect to continue receiving patronage credits under the ABL Term Loan. 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
1.5%
.
Term Loan
On March 30, 2016 (Closing Date), Boise Cascade and its principal operating subsidiaries, Boise Cascade Wood Products, L.L.C., and Boise Cascade Building Materials Distribution, L.L.C., as borrowers, and the guarantors party thereto, entered into a term loan agreement (Term Loan Agreement) with American AgCredit, PCA, as administrative agent and sole lead arranger, and the banks named therein as lenders. The Term Loan Agreement was for a
$75.0 million
secured term loan (Term Loan). The outstanding principal balance of the Term Loan amortizes and is payable in equal installments of
$10 million
per year on each of the sixth, seventh, eighth, and ninth anniversaries of the Closing Date. The remaining principal balance is due and payable on March 30, 2026. The Term Loan may be repaid from time to time at the discretion of the borrowers without premium or penalty. However, any principal amount of the Term Loan repaid may not be subsequently re-borrowed. Interest on our Term Loan is payable monthly.
Pursuant to the Term Loan Agreement, the borrowers are required to maintain, as of the end of any fiscal quarter, a Capitalization Ratio lower than
60%
, a Consolidated Net Worth greater than
$350 million
, and Available Liquidity greater than
$100 million
(each as defined in the Term Loan Agreement). In addition, under the Term Loan Agreement, and subject to certain exceptions, the borrowers may not, among other things, (i) incur indebtedness, (ii) incur liens, (iii) make junior payments, (iv) make certain investments, and (v) under certain circumstances, make capital expenditures in excess of
$50 million
during four consecutive quarters. The Term Loan Agreement also includes customary representations of the borrowers and provides for certain events of default customary for similar facilities.
Interest rates under the Term Loan Agreement are based, at our election, on either the LIBOR or a base rate, as defined in the Term Loan Agreement, plus a spread over the index. The applicable spread for the Term Loan ranges from
1.875%
to
2.125%
for LIBOR rate loans, and
0.875%
to
1.125%
for base rate loans, both dependent on our Interest Coverage Ratio (as defined in the Term Loan Agreement). The Term Loan was issued by three institutions within the Farm Credit system and will be eligible for patronage credits. During the period for which the Term Loan was outstanding, the average interest rate on the Term Loan was approximately
2.34%
.
We expect to receive patronage credits under the 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 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 Term Loan was approximately
1.6%
.
Proceeds from the Term Loan were used to partially finance the purchase of Georgia-Pacific LLC’s engineered wood products facilities in Thorsby, Alabama and Roxboro, North Carolina (Acquired Facilities). The Term Loan is secured by a first priority mortgage on the Acquired Facilities and a first priority security interest on the equipment and certain tangible personal property located therein. For additional information on the Acquired Facilities, see Note 5, Acquisitions.
2020 Notes
On October 22, 2012, Boise Cascade and its wholly owned subsidiary, Boise Cascade Finance Corporation (Boise Finance and together with Boise Cascade, the Co-issuers), issued
$250 million
of
6.375%
senior notes due November 1, 2020 (2020 Notes) through a private placement that was exempt from the registration requirements of the Securities Act of 1933, as amended (Securities Act). Interest on our 2020 Notes is payable semiannually in arrears on May 1 and November 1. On March 28, 2013, Boise Finance was merged with and into Boise Cascade, with Boise Cascade as the surviving entity and sole issuer of the 2020 Notes. The 2020 Notes are guaranteed by each of our existing and future direct or indirect domestic subsidiaries that is a guarantor or co-borrower under our Amended Agreement.
On August 15, 2013, we issued an additional
$50 million
in aggregate principal amount of 2020 Notes in a private placement that was exempt from registration under the Securities Act. The additional
$50 million
of 2020 Notes were priced at
103.5%
of their principal amount plus accrued interest from May 1, 2013, and were issued as additional 2020 Notes under the related indenture dated as of October 22, 2012.
On May 8, 2013 and November 26, 2013, we completed offers to exchange any and all of our
$250 million
and
$50 million
, respectively, outstanding 2020 Notes for a like principal amount of new
6.375%
Senior Notes due 2020 having substantially identical terms to those of the 2020 Notes.
$250 million
and
$49,990,000
in aggregate principal amount (or
100%
and
99.98%
, respectively) of the outstanding 2020 Notes were tendered and accepted for exchange upon closing of the related exchange offers and have been registered under the Securities Act.
In connection with the issuance of the
$350 million
of
5.625%
senior notes due September 1, 2024 (2024 Notes) described below, we commenced a tender offer to purchase any and all of our
$300.0 million
aggregate principal amount of 2020 Notes then outstanding. On August 29, 2016, we accepted for purchase an aggregate principal amount of
$184.5 million
of the 2020 Notes that were tendered. In connection with these transactions, we recognized a pre-tax loss on the extinguishment of debt of
$9.5 million
during the third quarter of 2016. The loss includes a
$7.6 million
tender premium paid and
$1.9 million
for the net write-off of a portion of the unamortized deferred financing costs and unamortized premium related to the 2020 Notes.
On August 29, 2016, we irrevocably instructed the trustee for the 2020 notes to issue a redemption notice to holders of the remaining
$115.5 million
in aggregate principal amount of the 2020 Notes outstanding and irrevocably deposited
$122.9 million
of cash received upon the issuance of the 2024 Notes, representing the remaining principal amount, call premium, and all interest payable through
November 1, 2016
(Redemption Date), with the trustee for the 2020 Notes. Upon our irrevocable redemption instructions and deposit, our obligations under the indenture pursuant to which the 2020 Notes were issued were satisfied and discharged, the indenture generally ceased to be of further effect, and we have no further obligations to the 2020 Notes holders. The 2020 Notes have been classified within "Current portion of long-term debt" and the cash on deposit has been recorded as "Restricted cash deposits with trustee," each on our Consolidated Balance Sheet as of September 30, 2016.
On the Redemption Date, the trustee for the 2020 Notes will remit payment to holders of the 2020 Notes. Accordingly, we will recognize an additional pre-tax loss on the extinguishment of debt of
$4.8 million
in the fourth quarter of 2016 which includes a
$3.7 million
redemption premium and
$1.1 million
for the net write-off of the remaining unamortized deferred financing costs and unamortized premium to the 2020 Notes.
2024 Notes
On August 29, 2016, Boise Cascade issued the 2024 Notes through a private placement that was exempt from the registration requirements of the Securities Act. The 2024 Notes mature on September 1, 2024 with interest payable semiannually in arrears on March 1 and September 1, commencing on March 1, 2017. The 2024 Notes are guaranteed by each of our existing and future direct or indirect domestic subsidiaries that is a guarantor under our Amended Agreement.
Following the sale of our 2024 Notes, as noted above, we used the net proceeds of the sale to repurchase or redeem any and all of the 2020 Notes, to pay fees and expenses related to the offering of the 2024 Notes and incurred in connection with the repurchase or redemption of the 2020 Notes, and for general corporate purposes.
The 2024 Notes are senior unsecured obligations and rank equally with all of the existing and future senior indebtedness of Boise Cascade Company and of the guarantors, senior to all of their existing and future subordinated indebtedness, effectively subordinated to all of their present and future senior secured indebtedness (including all borrowings with respect to our Amended Agreement to the extent of the value of the assets securing such indebtedness), and structurally subordinated to the indebtedness of any subsidiaries that do not guarantee the 2024 Notes.
The terms of the indenture governing the 2024 Notes, among other things, limit the ability of Boise Cascade and our restricted subsidiaries to: incur additional debt; declare or pay dividends; redeem stock or make other distributions to stockholders; make investments; create liens on assets; consolidate, merge or transfer substantially all of their assets; enter into transactions with affiliates; and sell or transfer certain assets.
The indenture governing the 2024 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.
Cash Paid for Interest
For the
nine
months ended
September 30, 2016
and
2015
, cash payments for interest were
$16.2 million
and
$10.6 million
, respectively.
8. Retirement and Benefit Plans
The following table presents the pension benefit costs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30
|
|
Nine Months Ended
September 30
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
(thousands)
|
|
Service cost
|
$
|
279
|
|
|
$
|
12
|
|
|
$
|
846
|
|
|
$
|
726
|
|
|
Interest cost
|
4,805
|
|
|
4,808
|
|
|
14,376
|
|
|
14,259
|
|
|
Expected return on plan assets
|
(5,131
|
)
|
|
(5,844
|
)
|
|
(15,310
|
)
|
|
(16,539
|
)
|
|
Amortization of actuarial loss
|
584
|
|
|
987
|
|
|
1,540
|
|
|
3,897
|
|
|
Plan settlement loss
|
—
|
|
|
—
|
|
|
297
|
|
|
501
|
|
|
Net periodic benefit expense
|
$
|
537
|
|
|
$
|
(37
|
)
|
|
$
|
1,749
|
|
|
$
|
2,844
|
|
During the
nine
months ended
September 30, 2016
, we contributed
$3.3 million
in cash to the pension plans. For the remainder of
2016
, we expect to make approximately
$0.5 million
in additional cash contributions to the pension plans.
During the third quarter 2016, we offered a program whereby certain terminated vested participants and active employees of the Boise Cascade Company Pension Plan could elect to take a one-time voluntary lump-sum payment equal to the present value of future benefits. Active employees are required to retire on or before November 1, 2016 to receive their lump-sum benefits. This program closed on September 30, 2016 with participants electing lump-sum payments totaling approximately
$21 million
. Plan participants who elected to participate in the program will receive their lump-sum benefits on November 1, 2016. Settlement expense will be recorded in fourth quarter 2016.
|
|
|
|
9.
|
Stock-Based Compensation
|
In February 2016 and 2015, we granted
two
types of stock-based awards under the 2013 Incentive Plan: performance stock units (PSUs) and restricted stock units (RSUs).
PSU and RSU Awards
During the
nine
months ended
September 30, 2016
, we granted
418,344
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%
and
200%
of the target amount, depending upon Boise Cascade's 2016 return on invested capital (ROIC), determined 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 2016 EBITDA, defined as income before interest (interest expense, interest income, change in fair value of interest rate swaps, and loss on extinguishment of debt), income taxes, and depreciation and amortization, determined in accordance with the related grant agreement. Because the ROIC and EBITDA components contain a performance condition, we record compensation expense, net of estimated forfeitures, over the requisite service period based on the most probable number of shares expected to vest.
During the
nine
months ended
September 30, 2015
, we granted
116,636
PSUs to our officers and other employees, subject to performance and service conditions. During the 2015 performance period, participants earned
63%
of the target based on Boise Cascade’s 2015 EBITDA, determined by our Compensation Committee in accordance with the related grant agreement.
During the
nine
months ended
September 30, 2016
and
2015
, we granted an aggregate of
334,587
and
139,846
RSUs, respectively, to our officers, other employees, and nonemployee directors with only service conditions.
The PSUs granted to officers, if earned, generally vest over
one
to
three
year periods from the date of grant, while the PSUs granted to other employees vest in
three
equal tranches each year after the grant date. All PSU grants are subject to final determination of meeting the performance condition by the Compensation Committee of our board of directors. The RSUs granted to officers and other employees vest in
three
equal tranches each year after the grant date. The RSUs granted to nonemployee directors vest over a
one
-year period, provided that such vested shares will not be delivered to the directors until
six
months following termination from the board of directors.
We based the fair value of PSU and RSU awards on the closing market price of our common stock on the grant date, and we record compensation expense over the awards' vesting period. Any shares not vested are forfeited. During the
nine
months ended
September 30, 2016
and
2015
, the total fair value of PSUs and RSUs vested was
$1.8 million
and
$3.2 million
, respectively.
The following summarizes the activity of our PSUs and RSUs awarded under the 2013 Incentive Plan for the
nine
months ended
September 30, 2016
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PSUs
|
|
RSUs
|
|
|
Number of shares
|
|
Weighted Average Grant-Date Fair Value
|
|
Number of shares
|
|
Weighted Average Grant-Date Fair Value
|
|
Outstanding, December 31, 2015
|
134,786
|
|
|
$
|
35.09
|
|
|
153,343
|
|
|
$
|
35.41
|
|
|
Granted
|
418,344
|
|
|
16.56
|
|
|
334,587
|
|
|
16.70
|
|
|
Vested
|
(32,057
|
)
|
|
36.12
|
|
|
(71,956
|
)
|
|
36.14
|
|
|
Forfeited (a)
|
(44,029
|
)
|
|
35.04
|
|
|
(3,481
|
)
|
|
22.01
|
|
|
Outstanding, September 30, 2016
|
477,044
|
|
|
$
|
18.78
|
|
|
412,493
|
|
|
$
|
20.22
|
|
__________________
|
|
|
|
(a)
|
Total PSUs forfeited during the
nine
months ended
September 30, 2016
includes
40,726
shares related to the performance condition adjustment, as participants earned
63%
of the target based on Boise Cascade’s 2015 EBITDA.
|
Compensation Expense
Stock-based compensation expense is recognized only for those awards that are expected to vest, with forfeitures estimated at the date of grant based on our historical experience and future expectations. We recognize the effect of adjusting the estimated forfeiture rates in the period in which we change such estimated rates. We recognize 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. Total stock-based compensation recognized from PSUs, RSUs, and stock options net of estimated forfeitures, was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30
|
|
Nine Months Ended
September 30
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
(thousands)
|
|
PSUs
|
$
|
1,081
|
|
|
$
|
505
|
|
|
$
|
2,955
|
|
|
$
|
1,719
|
|
|
RSUs
|
1,033
|
|
|
800
|
|
|
2,944
|
|
|
2,203
|
|
|
Stock options
|
—
|
|
|
127
|
|
|
81
|
|
|
408
|
|
|
Total
|
$
|
2,114
|
|
|
$
|
1,432
|
|
|
$
|
5,980
|
|
|
$
|
4,330
|
|
The related tax benefit for the
nine
months ended
September 30, 2016
and
2015
, was
$2.3 million
and
$1.6 million
, respectively. As of
September 30, 2016
, total unrecognized compensation expense related to nonvested share-based compensation arrangements was
$10.6 million
, net of estimated forfeitures. This expense is expected to be recognized over a weighted-average period of
1.8
years.
10. Stockholders' Equity
Stock Repurchase
On February 25, 2015, our Board of Directors (Board) 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. 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. During the
nine
months ended
September 30, 2016
, we repurchased
180,100
shares under the Program at a cost of
$2.6 million
, or an average of
$14.62
per share. During 2015, we repurchased
722,911
shares under the Program at a cost of
$23.7 million
, or
$32.80
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, 2016
, there were
1,096,989
shares of common stock that may yet be purchased 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, 2016
and
2015
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30
|
|
Nine Months Ended
September 30
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
(thousands)
|
|
Beginning Balance, net of taxes
|
$
|
(92,244
|
)
|
|
$
|
(87,473
|
)
|
|
$
|
(93,015
|
)
|
|
$
|
(101,498
|
)
|
|
Net actuarial gain, before taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
19,345
|
|
|
Amortization of actuarial loss, before taxes (a)
|
584
|
|
|
987
|
|
|
1,540
|
|
|
3,897
|
|
|
Effect of settlements, before taxes (a)
|
—
|
|
|
—
|
|
|
297
|
|
|
501
|
|
|
Income taxes
|
(225
|
)
|
|
(379
|
)
|
|
(707
|
)
|
|
(9,110
|
)
|
|
Ending Balance, net of taxes
|
$
|
(91,885
|
)
|
|
$
|
(86,865
|
)
|
|
$
|
(91,885
|
)
|
|
$
|
(86,865
|
)
|
___________________________________
|
|
|
|
(a)
|
Represents amounts reclassified from accumulated other comprehensive loss. These amounts are included in the computation of net periodic pension cost. For additional information, see Note 8, Retirement and Benefit Plans.
|
|
|
|
|
11.
|
Transactions With Related Party
|
Louisiana Timber Procurement Company, L.L.C. (LTP) is an unconsolidated variable-interest entity that is
50%
owned by us and
50%
owned by Packaging Corporation of America (PCA). LTP procures sawtimber, pulpwood, residual chips, and other residual wood fiber to meet the wood and fiber requirements of us and PCA in Louisiana. We are not the primary beneficiary of LTP as we do not have power to direct the activities that most significantly affect the economic performance of LTP. Accordingly, we do not consolidate LTP's results in our financial statements.
Sales
Related-party sales to LTP from our Wood Products segment in our Consolidated Statements of Operations were
$4.0 million
and
$5.0 million
, respectively, during the
three
months ended
September 30, 2016
and
2015
, and
$13.3 million
and
$16.3 million
, respectively, during the
nine
months ended
September 30, 2016
and
2015
. These sales are recorded in "Sales" in our Consolidated Statements of Operations.
Costs and Expenses
Related-party wood fiber purchases from LTP were
$21.2 million
and
$25.2 million
, respectively, during the
three
months ended
September 30, 2016
and
2015
, and
$64.7 million
and
$70.3 million
, respectively, during the
nine
months ended
September 30, 2016
and
2015
. These costs are recorded in "Materials, labor, and other operating expenses (excluding depreciation)" in our Consolidated Statements of Operations.
We operate our business using
three
reportable segments: Wood Products, Building Materials Distribution, and Corporate and Other. There are no differences in our basis of measurement of segment profit or loss from those disclosed in Note 15, Segment Information, of the Notes to Consolidated Financial Statements in "Item 8. Financial Statements and Supplementary Data" in our
2015
Form 10-K.
An analysis of our operations by segment is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)
|
|
|
|
|
|
|
|
Sales
|
|
Before
|
|
Depreciation
|
|
|
|
|
|
|
|
Inter-
|
|
|
|
Income
|
|
and
|
|
EBITDA
|
|
|
|
Trade
|
|
segment
|
|
Total
|
|
Taxes
|
|
Amortization
|
|
(a)
|
|
|
|
(millions)
|
|
Three Months Ended September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wood Products
|
|
$
|
178.1
|
|
|
$
|
162.8
|
|
|
$
|
340.9
|
|
|
$
|
11.6
|
|
|
$
|
15.6
|
|
|
$
|
27.2
|
|
|
Building Materials Distribution
|
|
889.0
|
|
|
—
|
|
|
889.0
|
|
|
26.4
|
|
|
3.5
|
|
|
29.9
|
|
|
Corporate and Other
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|
(6.7
|
)
|
|
0.3
|
|
|
(6.4
|
)
|
|
Intersegment eliminations
|
|
—
|
|
|
(162.8
|
)
|
|
(162.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
$
|
1,067.2
|
|
|
$
|
—
|
|
|
$
|
1,067.2
|
|
|
31.3
|
|
|
$
|
19.5
|
|
|
$
|
50.7
|
|
|
Interest expense
|
|
|
|
|
|
|
|
(7.1
|
)
|
|
|
|
|
|
|
Interest income
|
|
|
|
|
|
|
|
0.1
|
|
|
|
|
|
|
|
Change in fair value of interest rate swaps
|
|
|
|
|
|
|
|
0.8
|
|
|
|
|
|
|
Loss on extinguishment of debt
|
|
|
|
|
|
|
|
(9.5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
15.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)
|
|
|
|
|
|
|
|
Sales
|
|
Before
|
|
Depreciation
|
|
|
|
|
|
|
|
Inter-
|
|
|
|
Income
|
|
and
|
|
EBITDA
|
|
|
|
Trade
|
|
segment
|
|
Total
|
|
Taxes
|
|
Amortization
|
|
(a)
|
|
|
|
(millions)
|
|
Three Months Ended September 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wood Products
|
|
$
|
192.6
|
|
|
$
|
148.0
|
|
|
$
|
340.6
|
|
|
$
|
21.9
|
|
|
$
|
11.0
|
|
|
$
|
32.9
|
|
|
Building Materials Distribution
|
|
799.0
|
|
|
—
|
|
|
799.0
|
|
|
22.7
|
|
|
3.1
|
|
|
25.8
|
|
|
Corporate and Other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.3
|
)
|
|
0.1
|
|
|
(4.2
|
)
|
|
Intersegment eliminations
|
|
—
|
|
|
(148.0
|
)
|
|
(148.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
$
|
991.6
|
|
|
$
|
—
|
|
|
$
|
991.6
|
|
|
40.3
|
|
|
$
|
14.2
|
|
|
$
|
54.5
|
|
|
Interest expense
|
|
|
|
|
|
|
|
(5.7
|
)
|
|
|
|
|
|
Interest income
|
|
|
|
|
|
|
|
0.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
34.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)
|
|
|
|
|
|
|
|
Sales
|
|
Before
|
|
Depreciation
|
|
|
|
|
|
|
|
Inter-
|
|
|
|
Income
|
|
and
|
|
EBITDA
|
|
|
|
Trade
|
|
segment
|
|
Total
|
|
Taxes
|
|
Amortization
|
|
(a)
|
|
|
|
(millions)
|
|
Nine Months Ended September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wood Products
|
|
$
|
535.0
|
|
|
$
|
455.7
|
|
|
$
|
990.7
|
|
|
$
|
33.8
|
|
|
$
|
42.0
|
|
|
$
|
75.8
|
|
|
Building Materials Distribution
|
|
2,456.3
|
|
|
—
|
|
|
2,456.3
|
|
|
68.9
|
|
|
10.1
|
|
|
79.0
|
|
|
Corporate and Other
|
|
0.4
|
|
|
—
|
|
|
0.4
|
|
|
(19.9
|
)
|
|
1.1
|
|
|
(18.8
|
)
|
|
Intersegment eliminations
|
|
—
|
|
|
(455.7
|
)
|
|
(455.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
$
|
2,991.7
|
|
|
$
|
—
|
|
|
$
|
2,991.7
|
|
|
82.8
|
|
|
$
|
53.2
|
|
|
$
|
136.0
|
|
|
Interest expense
|
|
|
|
|
|
|
|
(19.4
|
)
|
|
|
|
|
|
Interest income
|
|
|
|
|
|
|
|
0.2
|
|
|
|
|
|
|
Change in fair value of interest rate swaps
|
|
|
|
|
|
|
|
(0.8
|
)
|
|
|
|
|
|
Loss on extinguishment of debt
|
|
|
|
|
|
|
|
(9.5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
53.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)
|
|
|
|
|
|
|
|
Sales
|
|
Before
|
|
Depreciation
|
|
|
|
|
|
|
|
Inter-
|
|
|
|
Income
|
|
and
|
|
EBITDA
|
|
|
|
Trade
|
|
segment
|
|
Total
|
|
Taxes
|
|
Amortization
|
|
(a)
|
|
|
|
(millions)
|
|
Nine Months Ended September 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wood Products
|
|
$
|
573.1
|
|
|
$
|
416.7
|
|
|
$
|
989.8
|
|
|
$
|
66.5
|
|
|
$
|
32.2
|
|
|
$
|
98.7
|
|
|
Building Materials Distribution
|
|
2,183.8
|
|
|
0.2
|
|
|
2,184.0
|
|
|
45.6
|
|
|
8.7
|
|
|
54.3
|
|
|
Corporate and Other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16.8
|
)
|
|
0.2
|
|
|
(16.6
|
)
|
|
Intersegment eliminations
|
|
—
|
|
|
(416.9
|
)
|
|
(416.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
$
|
2,756.9
|
|
|
$
|
—
|
|
|
$
|
2,756.9
|
|
|
95.3
|
|
|
$
|
41.1
|
|
|
$
|
136.4
|
|
|
Interest expense
|
|
|
|
|
|
|
|
(16.8
|
)
|
|
|
|
|
|
Interest income
|
|
|
|
|
|
|
|
0.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
78.7
|
|
|
|
|
|
__________________
|
|
|
|
(a)
|
EBITDA is defined as income (loss) before interest (interest expense, interest income, change in fair value of interest rate swaps, and loss on extinguishment of debt), income taxes, and depreciation and amortization. EBITDA is the primary measure used by our
|
chief operating decision maker to evaluate segment operating performance and to decide how to allocate resources to segments. We believe EBITDA is useful to investors because it provides a means to evaluate the operating performance of our segments and our company on an ongoing basis using criteria that are used by our internal decision makers and because it is frequently used by investors and other interested parties when comparing companies in our industry that have different financing and capital structures and/or tax rates. We believe EBITDA is a meaningful measure because it presents a transparent view of our recurring operating performance and allows management to readily view operating trends, perform analytical comparisons, and identify strategies to improve operating performance. EBITDA, however, is not a measure of our liquidity or financial performance under GAAP and should not be considered as an alternative to net income (loss), income (loss) from operations, or any other performance measure derived in accordance with GAAP or as an alternative to cash flow from operating activities as a measure of our liquidity. The use of EBITDA instead of net income (loss) or segment income (loss) has limitations as an analytical tool, including the inability to determine profitability; the exclusion of interest expense, interest income, and
associated significant cash requirements; and the exclusion of depreciation and amortization, which represent unavoidable operating costs. Management compensates for the limitations of EBITDA by relying on our GAAP results. Our measure of EBITDA is not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the methods of calculation.
The following is a reconciliation of net income to EBITDA for the consolidated company:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30
|
|
Nine Months Ended
September 30
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
(millions)
|
|
Net income
|
$
|
10.0
|
|
|
$
|
22.0
|
|
|
$
|
34.2
|
|
|
$
|
49.9
|
|
|
Interest expense
|
7.1
|
|
|
5.7
|
|
|
19.4
|
|
|
16.8
|
|
|
Interest income
|
(0.1
|
)
|
|
(0.1
|
)
|
|
(0.2
|
)
|
|
(0.2
|
)
|
|
Change in fair value of interest rate swaps
|
(0.8
|
)
|
|
—
|
|
|
0.8
|
|
|
—
|
|
|
Loss on extinguishment of debt
|
9.5
|
|
|
—
|
|
|
9.5
|
|
|
—
|
|
|
Income tax provision
|
5.5
|
|
|
12.6
|
|
|
19.2
|
|
|
28.8
|
|
|
Depreciation and amortization
|
19.5
|
|
|
14.2
|
|
|
53.2
|
|
|
41.1
|
|
|
EBITDA
|
$
|
50.7
|
|
|
$
|
54.5
|
|
|
$
|
136.0
|
|
|
$
|
136.4
|
|
13. Commitments, Legal Proceedings and Contingencies, and Guarantees
Commitments
We are a party to a number of long-term log and wood fiber supply agreements that are discussed in Note 16, Commitments, Legal Proceedings and Contingencies, and Guarantees, of the Notes to Consolidated Financial Statements in "Item 8. Financial Statements and Supplementary Data" in our
2015
Form 10-K. In addition, we have purchase obligations for goods and services, capital expenditures, and raw materials entered into in the normal course of business. As of
September 30, 2016
, there have been no material changes to the above commitments disclosed in the
2015
Form 10-K.
Legal Proceedings and Contingencies
We are a party to routine legal proceedings that arise in the ordinary course of our business. We are not currently a party to any legal proceedings or environmental claims that we believe would, individually or in the aggregate, have a material adverse effect on our financial position, results of operations, or cash flows.
Guarantees
We provide guarantees, indemnifications, and assurances to others. Note 16, Commitments, Legal Proceedings and Contingencies, and Guarantees, of the Notes to Consolidated Financial Statements in "Item 8. Financial Statements and Supplementary Data" in our
2015
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, 2016
, there have been no material changes to the guarantees disclosed in the
2015
Form 10-K, except for debt transactions disclosed in Note 7, Debt.
|
|
|
|
14.
|
Consolidating Guarantor and Nonguarantor Financial Information
|
The following consolidating financial information presents the Statements of Comprehensive Income, Balance Sheets, and Statements of Cash Flows related to Boise Cascade and the guarantor and nonguarantor subsidiaries of the 2020 Notes. On August 29, 2016, we irrevocably instructed the trustee for the 2020 Notes to issue a redemption notice to holders of outstanding 2020 Notes and irrevocably deposited funds sufficient to pay and discharge the entire indebtedness due on the 2020 Notes on the Redemption Date. As a result, the indenture governing the 2020 Notes was satisfied and discharged in accordance with its terms.
The 2020 Notes were guaranteed fully and unconditionally and jointly and severally by each of our existing and future subsidiaries (other than our foreign subsidiaries). Each of our existing subsidiaries that was a guarantor of the 2020 Notes is
100%
owned by Boise Cascade. Other than the consolidated financial statements and footnotes for Boise Cascade and the consolidating financial information, financial statements and other disclosures concerning the guarantors have not been presented because management believes that such information is not material to investors.
Furthermore, the cancellation provisions in the related indenture regarding guarantor subsidiaries were customary, and did not include an arrangement that permitted a guarantor subsidiary to opt out of the obligation prior to or during the term of the debt. Under the indenture, each guarantor subsidiary was to be automatically released from its obligations as a guarantor upon the sale of the subsidiary or substantially all of its assets to a third party, the designation of the subsidiary as an unrestricted subsidiary for purposes of the covenants included in the indenture, the release of the indebtedness under the indenture, or upon the issuer's exercise of its legal defeasance option or the discharge of its obligations in accordance with the indenture governing the 2020 Notes. In connection with the issuance of the irrevocable notice of redemption of the 2020 Notes and the irrevocable deposit of funds to satisfy and discharge the indenture, the guarantees of the guarantors under the 2020 Notes were automatically released.
Boise Cascade Company and Subsidiaries
Consolidating Statements of Comprehensive Income
For the Three Months Ended
September 30, 2016
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Boise
Cascade Company (Parent)
|
|
Guarantor
Subsidiaries
|
|
Non-
guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
|
|
|
(thousands)
|
|
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade
|
|
$
|
74
|
|
|
$
|
1,062,962
|
|
|
$
|
4,178
|
|
|
$
|
—
|
|
|
$
|
1,067,214
|
|
|
Intercompany
|
|
—
|
|
|
—
|
|
|
5,588
|
|
|
(5,588
|
)
|
|
—
|
|
|
|
|
74
|
|
|
1,062,962
|
|
|
9,766
|
|
|
(5,588
|
)
|
|
1,067,214
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Materials, labor, and other operating expenses (excluding depreciation)
|
|
291
|
|
|
918,400
|
|
|
9,018
|
|
|
(5,608
|
)
|
|
922,101
|
|
|
Depreciation and amortization
|
|
321
|
|
|
18,862
|
|
|
276
|
|
|
—
|
|
|
19,459
|
|
|
Selling and distribution expenses
|
|
194
|
|
|
79,536
|
|
|
296
|
|
|
—
|
|
|
80,026
|
|
|
General and administrative expenses
|
|
5,918
|
|
|
8,429
|
|
|
—
|
|
|
20
|
|
|
14,367
|
|
|
Other (income) expense, net
|
|
8
|
|
|
(231
|
)
|
|
177
|
|
|
—
|
|
|
(46
|
)
|
|
|
|
6,732
|
|
|
1,024,996
|
|
|
9,767
|
|
|
(5,588
|
)
|
|
1,035,907
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations
|
|
(6,658
|
)
|
|
37,966
|
|
|
(1
|
)
|
|
—
|
|
|
31,307
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency exchange gain (loss)
|
|
(29
|
)
|
|
(15
|
)
|
|
4
|
|
|
—
|
|
|
(40
|
)
|
|
Interest expense
|
|
(7,099
|
)
|
|
(36
|
)
|
|
—
|
|
|
—
|
|
|
(7,135
|
)
|
|
Interest income
|
|
19
|
|
|
41
|
|
|
—
|
|
|
—
|
|
|
60
|
|
|
Change in fair value of interest rate swaps
|
|
836
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
836
|
|
|
Loss on extinguishment of debt
|
|
(9,525
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,525
|
)
|
|
|
|
(15,798
|
)
|
|
(10
|
)
|
|
4
|
|
|
—
|
|
|
(15,804
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes and equity in net income of affiliates
|
|
(22,456
|
)
|
|
37,956
|
|
|
3
|
|
|
—
|
|
|
15,503
|
|
|
Income tax (provision) benefit
|
|
(5,551
|
)
|
|
29
|
|
|
—
|
|
|
—
|
|
|
(5,522
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before equity in net income of affiliates
|
|
(28,007
|
)
|
|
37,985
|
|
|
3
|
|
|
—
|
|
|
9,981
|
|
|
Equity in net income of affiliates
|
|
37,988
|
|
|
—
|
|
|
—
|
|
|
(37,988
|
)
|
|
—
|
|
|
Net income
|
|
9,981
|
|
|
37,985
|
|
|
3
|
|
|
(37,988
|
)
|
|
9,981
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
Defined benefit pension plans
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of actuarial loss
|
|
359
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
359
|
|
|
Other comprehensive income, net of tax
|
|
359
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
359
|
|
|
Comprehensive income
|
|
$
|
10,340
|
|
|
$
|
37,985
|
|
|
$
|
3
|
|
|
$
|
(37,988
|
)
|
|
$
|
10,340
|
|
Boise Cascade Company and Subsidiaries
Consolidating Statements of Comprehensive Income
For the Three Months Ended
September 30, 2015
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Boise
Cascade Company (Parent)
|
|
Guarantor
Subsidiaries
|
|
Non-
guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
|
|
|
(thousands)
|
|
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade
|
|
$
|
—
|
|
|
$
|
988,725
|
|
|
$
|
2,855
|
|
|
$
|
—
|
|
|
$
|
991,580
|
|
|
Intercompany
|
|
—
|
|
|
—
|
|
|
5,306
|
|
|
(5,306
|
)
|
|
—
|
|
|
|
|
—
|
|
|
988,725
|
|
|
8,161
|
|
|
(5,306
|
)
|
|
991,580
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Materials, labor, and other operating expenses (excluding depreciation)
|
|
(37
|
)
|
|
852,733
|
|
|
7,052
|
|
|
(5,614
|
)
|
|
854,134
|
|
|
Depreciation and amortization
|
|
79
|
|
|
13,899
|
|
|
271
|
|
|
—
|
|
|
14,249
|
|
|
Selling and distribution expenses
|
|
20
|
|
|
72,197
|
|
|
451
|
|
|
—
|
|
|
72,668
|
|
|
General and administrative expenses
|
|
4,159
|
|
|
6,878
|
|
|
—
|
|
|
308
|
|
|
11,345
|
|
|
Other (income) expense, net
|
|
(136
|
)
|
|
(1,068
|
)
|
|
(52
|
)
|
|
—
|
|
|
(1,256
|
)
|
|
|
|
4,085
|
|
|
944,639
|
|
|
7,722
|
|
|
(5,306
|
)
|
|
951,140
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations
|
|
(4,085
|
)
|
|
44,086
|
|
|
439
|
|
|
—
|
|
|
40,440
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency exchange gain (loss)
|
|
(169
|
)
|
|
126
|
|
|
(105
|
)
|
|
—
|
|
|
(148
|
)
|
|
Interest expense
|
|
(5,690
|
)
|
|
(39
|
)
|
|
—
|
|
|
—
|
|
|
(5,729
|
)
|
|
Interest income
|
|
36
|
|
|
37
|
|
|
—
|
|
|
—
|
|
|
73
|
|
|
|
|
(5,823
|
)
|
|
124
|
|
|
(105
|
)
|
|
—
|
|
|
(5,804
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes and equity in net income of affiliates
|
|
(9,908
|
)
|
|
44,210
|
|
|
334
|
|
|
—
|
|
|
34,636
|
|
|
Income tax (provision) benefit
|
|
(12,650
|
)
|
|
21
|
|
|
—
|
|
|
—
|
|
|
(12,629
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before equity in net income of affiliates
|
|
(22,558
|
)
|
|
44,231
|
|
|
334
|
|
|
—
|
|
|
22,007
|
|
|
Equity in net income of affiliates
|
|
44,565
|
|
|
—
|
|
|
—
|
|
|
(44,565
|
)
|
|
—
|
|
|
Net income
|
|
22,007
|
|
|
44,231
|
|
|
334
|
|
|
(44,565
|
)
|
|
22,007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
Defined benefit pension plans
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of actuarial loss
|
|
608
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
608
|
|
|
Other comprehensive income, net of tax
|
|
608
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
608
|
|
|
Comprehensive income
|
|
$
|
22,615
|
|
|
$
|
44,231
|
|
|
$
|
334
|
|
|
$
|
(44,565
|
)
|
|
$
|
22,615
|
|
Boise Cascade Company and Subsidiaries
Consolidating Statements of Comprehensive Income
For the Nine Months Ended
September 30, 2016
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Boise
Cascade Company (Parent)
|
|
Guarantor
Subsidiaries
|
|
Non-
guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
|
|
|
(thousands)
|
|
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade
|
|
$
|
363
|
|
|
$
|
2,979,173
|
|
|
$
|
12,146
|
|
|
$
|
—
|
|
|
$
|
2,991,682
|
|
|
Intercompany
|
|
—
|
|
|
—
|
|
|
16,827
|
|
|
(16,827
|
)
|
|
—
|
|
|
|
|
363
|
|
|
2,979,173
|
|
|
28,973
|
|
|
(16,827
|
)
|
|
2,991,682
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Materials, labor, and other operating expenses, (excluding depreciation)
|
|
791
|
|
|
2,576,522
|
|
|
26,426
|
|
|
(17,379
|
)
|
|
2,586,360
|
|
|
Depreciation and amortization
|
|
1,119
|
|
|
51,289
|
|
|
841
|
|
|
—
|
|
|
53,249
|
|
|
Selling and distribution expenses
|
|
531
|
|
|
223,289
|
|
|
1,102
|
|
|
—
|
|
|
224,922
|
|
|
General and administrative expenses
|
|
17,920
|
|
|
27,559
|
|
|
—
|
|
|
552
|
|
|
46,031
|
|
|
Other (income) expense, net
|
|
21
|
|
|
(1,823
|
)
|
|
343
|
|
|
—
|
|
|
(1,459
|
)
|
|
|
|
20,382
|
|
|
2,876,836
|
|
|
28,712
|
|
|
(16,827
|
)
|
|
2,909,103
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations
|
|
(20,019
|
)
|
|
102,337
|
|
|
261
|
|
|
—
|
|
|
82,579
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency exchange gain
|
|
38
|
|
|
84
|
|
|
64
|
|
|
—
|
|
|
186
|
|
|
Interest expense
|
|
(19,254
|
)
|
|
(110
|
)
|
|
—
|
|
|
—
|
|
|
(19,364
|
)
|
|
Interest income
|
|
138
|
|
|
98
|
|
|
—
|
|
|
—
|
|
|
236
|
|
|
Change in fair value of interest rate swaps
|
|
(765
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(765
|
)
|
|
Loss on extinguishment of debt
|
|
(9,525
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,525
|
)
|
|
|
|
(29,368
|
)
|
|
72
|
|
|
64
|
|
|
—
|
|
|
(29,232
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes and equity in net income of affiliates
|
|
(49,387
|
)
|
|
102,409
|
|
|
325
|
|
|
—
|
|
|
53,347
|
|
|
Income tax (provision) benefit
|
|
(19,274
|
)
|
|
86
|
|
|
—
|
|
|
—
|
|
|
(19,188
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before equity in net income of affiliates
|
|
(68,661
|
)
|
|
102,495
|
|
|
325
|
|
|
—
|
|
|
34,159
|
|
|
Equity in net income of affiliates
|
|
102,820
|
|
|
—
|
|
|
—
|
|
|
(102,820
|
)
|
|
—
|
|
|
Net income
|
|
34,159
|
|
|
102,495
|
|
|
325
|
|
|
(102,820
|
)
|
|
34,159
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
Defined benefit pension plans
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of actuarial loss
|
|
947
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
947
|
|
|
Effect of settlements
|
|
183
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
183
|
|
|
Other comprehensive income, net of tax
|
|
1,130
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,130
|
|
|
Comprehensive income
|
|
$
|
35,289
|
|
|
$
|
102,495
|
|
|
$
|
325
|
|
|
$
|
(102,820
|
)
|
|
$
|
35,289
|
|
Boise Cascade Company and Subsidiaries
Consolidating Statements of Comprehensive Income
For the Nine Months Ended
September 30, 2015
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Boise
Cascade Company (Parent)
|
|
Guarantor
Subsidiaries
|
|
Non-
guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
|
|
|
(thousands)
|
|
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade
|
|
$
|
—
|
|
|
$
|
2,748,180
|
|
|
$
|
8,700
|
|
|
$
|
—
|
|
|
$
|
2,756,880
|
|
|
Intercompany
|
|
—
|
|
|
—
|
|
|
15,198
|
|
|
(15,198
|
)
|
|
—
|
|
|
|
|
—
|
|
|
2,748,180
|
|
|
23,898
|
|
|
(15,198
|
)
|
|
2,756,880
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses
|
|
|
|
|
|
|
|
|
|
|
|
Materials, labor, and other operating expenses, (excluding depreciation)
|
|
1,218
|
|
|
2,377,618
|
|
|
20,751
|
|
|
(15,831
|
)
|
|
2,383,756
|
|
|
Depreciation and amortization
|
|
201
|
|
|
40,064
|
|
|
852
|
|
|
—
|
|
|
41,117
|
|
|
Selling and distribution expenses
|
|
889
|
|
|
200,453
|
|
|
1,460
|
|
|
—
|
|
|
202,802
|
|
|
General and administrative expenses
|
|
14,595
|
|
|
20,143
|
|
|
—
|
|
|
633
|
|
|
35,371
|
|
|
Other (income) expense, net
|
|
(383
|
)
|
|
(915
|
)
|
|
(355
|
)
|
|
—
|
|
|
(1,653
|
)
|
|
|
|
16,520
|
|
|
2,637,363
|
|
|
22,708
|
|
|
(15,198
|
)
|
|
2,661,393
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations
|
|
(16,520
|
)
|
|
110,817
|
|
|
1,190
|
|
|
—
|
|
|
95,487
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency exchange gain (loss)
|
|
(424
|
)
|
|
303
|
|
|
(93
|
)
|
|
—
|
|
|
(214
|
)
|
|
Interest expense
|
|
(16,749
|
)
|
|
(52
|
)
|
|
—
|
|
|
—
|
|
|
(16,801
|
)
|
|
Interest income
|
|
75
|
|
|
146
|
|
|
—
|
|
|
—
|
|
|
221
|
|
|
|
|
(17,098
|
)
|
|
397
|
|
|
(93
|
)
|
|
—
|
|
|
(16,794
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes and equity in net income of affiliates
|
|
(33,618
|
)
|
|
111,214
|
|
|
1,097
|
|
|
—
|
|
|
78,693
|
|
|
Income tax (provision) benefit
|
|
(28,917
|
)
|
|
78
|
|
|
—
|
|
|
—
|
|
|
(28,839
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before equity in net income of affiliates
|
|
(62,535
|
)
|
|
111,292
|
|
|
1,097
|
|
|
—
|
|
|
49,854
|
|
|
Equity in net income of affiliates
|
|
112,389
|
|
|
—
|
|
|
—
|
|
|
(112,389
|
)
|
|
—
|
|
|
Net income
|
|
49,854
|
|
|
111,292
|
|
|
1,097
|
|
|
(112,389
|
)
|
|
49,854
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
Defined benefit pension plans
|
|
|
|
|
|
|
|
|
|
|
|
Actuarial gain
|
|
11,923
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,923
|
|
|
Amortization of actuarial loss
|
|
2,401
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,401
|
|
|
Effect of settlements
|
|
309
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
309
|
|
|
Other comprehensive income, net of tax
|
|
14,633
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,633
|
|
|
Comprehensive income
|
|
$
|
64,487
|
|
|
$
|
111,292
|
|
|
$
|
1,097
|
|
|
$
|
(112,389
|
)
|
|
$
|
64,487
|
|
|
Boise Cascade Company and Subsidiaries
Consolidating Balance Sheets at September 30, 2016
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Boise
Cascade Company (Parent)
|
|
Guarantor
Subsidiaries
|
|
Non-
guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
|
|
|
(thousands)
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
131,133
|
|
|
$
|
8
|
|
|
$
|
43
|
|
|
$
|
—
|
|
|
$
|
131,184
|
|
|
Restricted cash deposits with trustee
|
|
122,856
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
122,856
|
|
|
Receivables
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade, less allowances
|
|
24
|
|
|
262,391
|
|
|
784
|
|
|
—
|
|
|
263,199
|
|
|
Related parties
|
|
—
|
|
|
439
|
|
|
—
|
|
|
—
|
|
|
439
|
|
|
Other
|
|
912
|
|
|
7,460
|
|
|
315
|
|
|
—
|
|
|
8,687
|
|
|
Inventories
|
|
—
|
|
|
445,670
|
|
|
5,386
|
|
|
—
|
|
|
451,056
|
|
|
Prepaid expenses and other
|
|
6,941
|
|
|
2,850
|
|
|
51
|
|
|
—
|
|
|
9,842
|
|
|
Total current assets
|
|
261,866
|
|
|
718,818
|
|
|
6,579
|
|
|
—
|
|
|
987,263
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
4,915
|
|
|
545,941
|
|
|
6,357
|
|
|
—
|
|
|
557,213
|
|
|
Timber deposits
|
|
—
|
|
|
11,545
|
|
|
—
|
|
|
—
|
|
|
11,545
|
|
|
Goodwill
|
|
—
|
|
|
55,433
|
|
|
—
|
|
|
—
|
|
|
55,433
|
|
|
Intangible assets, net
|
|
—
|
|
|
15,720
|
|
|
—
|
|
|
—
|
|
|
15,720
|
|
|
Other assets
|
|
754
|
|
|
10,877
|
|
|
—
|
|
|
—
|
|
|
11,631
|
|
|
Investments in affiliates
|
|
1,033,717
|
|
|
—
|
|
|
—
|
|
|
(1,033,717
|
)
|
|
—
|
|
|
Total assets
|
|
$
|
1,301,252
|
|
|
$
|
1,358,334
|
|
|
$
|
12,936
|
|
|
$
|
(1,033,717
|
)
|
|
$
|
1,638,805
|
|
|
Boise Cascade Company and Subsidiaries
Consolidating Balance Sheets at September 30, 2016 (continued)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Boise
Cascade Company (Parent)
|
|
Guarantor
Subsidiaries
|
|
Non-
guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
|
|
|
(thousands)
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current portion of long-term debt
|
|
$
|
114,342
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
114,342
|
|
|
Accounts payable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade
|
|
9,149
|
|
|
234,844
|
|
|
1,098
|
|
|
—
|
|
|
245,091
|
|
|
Related parties
|
|
—
|
|
|
2,176
|
|
|
—
|
|
|
—
|
|
|
2,176
|
|
|
Accrued liabilities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
Compensation and benefits
|
|
17,791
|
|
|
43,838
|
|
|
378
|
|
|
—
|
|
|
62,007
|
|
|
Interest payable
|
|
4,998
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,998
|
|
|
Other
|
|
2,709
|
|
|
45,384
|
|
|
1,540
|
|
|
—
|
|
|
49,633
|
|
|
Total current liabilities
|
|
148,989
|
|
|
326,242
|
|
|
3,016
|
|
|
—
|
|
|
478,247
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt, less current portion
|
|
467,232
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
467,232
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and benefits
|
|
93,374
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
93,374
|
|
|
Other long-term liabilities
|
|
19,183
|
|
|
7,740
|
|
|
555
|
|
|
—
|
|
|
27,478
|
|
|
|
|
112,557
|
|
|
7,740
|
|
|
555
|
|
|
—
|
|
|
120,852
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingent liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Common stock
|
|
435
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
435
|
|
|
Treasury stock
|
|
(126,343
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(126,343
|
)
|
|
Additional paid-in capital
|
|
513,212
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
513,212
|
|
|
Accumulated other comprehensive loss
|
|
(91,885
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(91,885
|
)
|
|
Retained earnings
|
|
277,055
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
277,055
|
|
|
Subsidiary equity
|
|
—
|
|
|
1,024,352
|
|
|
9,365
|
|
|
(1,033,717
|
)
|
|
—
|
|
|
Total stockholders' equity
|
|
572,474
|
|
|
1,024,352
|
|
|
9,365
|
|
|
(1,033,717
|
)
|
|
572,474
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
1,301,252
|
|
|
$
|
1,358,334
|
|
|
$
|
12,936
|
|
|
$
|
(1,033,717
|
)
|
|
$
|
1,638,805
|
|
|
Boise Cascade Company and Subsidiaries
Consolidating Balance Sheets at December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Boise
Cascade Company (Parent)
|
|
Guarantor
Subsidiaries
|
|
Non-
guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
|
|
|
(thousands)
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
184,434
|
|
|
$
|
11
|
|
|
$
|
51
|
|
|
$
|
—
|
|
|
$
|
184,496
|
|
|
Receivables
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade, less allowances
|
|
8
|
|
|
186,488
|
|
|
642
|
|
|
—
|
|
|
187,138
|
|
|
Related parties
|
|
—
|
|
|
1,065
|
|
|
—
|
|
|
—
|
|
|
1,065
|
|
|
Other
|
|
925
|
|
|
9,712
|
|
|
224
|
|
|
—
|
|
|
10,861
|
|
|
Inventories
|
|
—
|
|
|
378,589
|
|
|
6,268
|
|
|
—
|
|
|
384,857
|
|
|
Prepaid expenses and other
|
|
15,032
|
|
|
7,620
|
|
|
1
|
|
|
(5,500
|
)
|
|
17,153
|
|
|
Total current assets
|
|
200,399
|
|
|
583,485
|
|
|
7,186
|
|
|
(5,500
|
)
|
|
785,570
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
5,020
|
|
|
391,057
|
|
|
6,589
|
|
|
—
|
|
|
402,666
|
|
|
Timber deposits
|
|
—
|
|
|
15,848
|
|
|
—
|
|
|
—
|
|
|
15,848
|
|
|
Goodwill
|
|
—
|
|
|
21,823
|
|
|
—
|
|
|
—
|
|
|
21,823
|
|
|
Intangible assets, net
|
|
—
|
|
|
10,090
|
|
|
—
|
|
|
—
|
|
|
10,090
|
|
|
Other assets
|
|
1,503
|
|
|
11,091
|
|
|
15
|
|
|
—
|
|
|
12,609
|
|
|
Investments in affiliates
|
|
801,934
|
|
|
—
|
|
|
—
|
|
|
(801,934
|
)
|
|
—
|
|
|
Total assets
|
|
$
|
1,008,856
|
|
|
$
|
1,033,394
|
|
|
$
|
13,790
|
|
|
$
|
(807,434
|
)
|
|
$
|
1,248,606
|
|
|
Boise Cascade Company and Subsidiaries
Consolidating Balance Sheets at December 31, 2015
(continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Boise
Cascade Company (Parent)
|
|
Guarantor
Subsidiaries
|
|
Non-
guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
|
|
|
(thousands)
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade
|
|
$
|
4,552
|
|
|
$
|
153,953
|
|
|
$
|
524
|
|
|
$
|
—
|
|
|
$
|
159,029
|
|
|
Related parties
|
|
—
|
|
|
1,442
|
|
|
—
|
|
|
—
|
|
|
1,442
|
|
|
Accrued liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and benefits
|
|
16,034
|
|
|
38,399
|
|
|
279
|
|
|
—
|
|
|
54,712
|
|
|
Interest payable
|
|
3,389
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,389
|
|
|
Other
|
|
1,958
|
|
|
36,617
|
|
|
7,003
|
|
|
(5,500
|
)
|
|
40,078
|
|
|
Total current liabilities
|
|
25,933
|
|
|
230,411
|
|
|
7,806
|
|
|
(5,500
|
)
|
|
258,650
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
344,589
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
344,589
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and benefits
|
|
93,355
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
93,355
|
|
|
Other long-term liabilities
|
|
10,309
|
|
|
7,033
|
|
|
—
|
|
|
—
|
|
|
17,342
|
|
|
|
|
103,664
|
|
|
7,033
|
|
|
—
|
|
|
—
|
|
|
110,697
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingent liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Common stock
|
|
434
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
434
|
|
|
Treasury stock
|
|
(123,711
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(123,711
|
)
|
|
Additional paid-in capital
|
|
508,066
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
508,066
|
|
|
Accumulated other comprehensive loss
|
|
(93,015
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(93,015
|
)
|
|
Retained earnings
|
|
242,896
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
242,896
|
|
|
Subsidiary equity
|
|
—
|
|
|
795,950
|
|
|
5,984
|
|
|
(801,934
|
)
|
|
—
|
|
|
Total stockholders' equity
|
|
534,670
|
|
|
795,950
|
|
|
5,984
|
|
|
(801,934
|
)
|
|
534,670
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
1,008,856
|
|
|
$
|
1,033,394
|
|
|
$
|
13,790
|
|
|
$
|
(807,434
|
)
|
|
$
|
1,248,606
|
|
|
Boise Cascade Company and Subsidiaries
Consolidating Statements of Cash Flows
For the Nine Months Ended September 30, 2016
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Boise
Cascade Company (Parent)
|
|
Guarantor
Subsidiaries
|
|
Non-
guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
|
|
|
(thousands)
|
|
Cash provided by (used for) operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
34,159
|
|
|
$
|
102,495
|
|
|
$
|
325
|
|
|
$
|
(102,820
|
)
|
|
$
|
34,159
|
|
|
Items in net income not using (providing) cash
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in net income of affiliates
|
|
(102,820
|
)
|
|
—
|
|
|
—
|
|
|
102,820
|
|
|
—
|
|
|
Depreciation and amortization, including deferred financing costs and other
|
|
2,479
|
|
|
51,289
|
|
|
841
|
|
|
—
|
|
|
54,609
|
|
|
Stock-based compensation
|
|
5,980
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,980
|
|
|
Pension expense
|
|
1,749
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,749
|
|
|
Deferred income taxes
|
|
7,008
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,008
|
|
|
Change of fair value of interest rate swaps
|
|
765
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
765
|
|
|
Other
|
|
25
|
|
|
42
|
|
|
—
|
|
|
—
|
|
|
67
|
|
|
Loss on extinguishment of debt
|
|
9,525
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,525
|
|
|
Decrease (increase) in working capital, net of acquisitions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Receivables
|
|
(3
|
)
|
|
(62,558
|
)
|
|
(233
|
)
|
|
—
|
|
|
(62,794
|
)
|
|
Inventories
|
|
—
|
|
|
(49,244
|
)
|
|
882
|
|
|
—
|
|
|
(48,362
|
)
|
|
Prepaid expenses and other
|
|
(2,898
|
)
|
|
4,770
|
|
|
(50
|
)
|
|
(5,500
|
)
|
|
(3,678
|
)
|
|
Accounts payable and accrued liabilities
|
|
8,091
|
|
|
93,504
|
|
|
(4,782
|
)
|
|
5,500
|
|
|
102,313
|
|
|
Pension contributions
|
|
(3,338
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,338
|
)
|
|
Income taxes payable
|
|
13,629
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
13,623
|
|
|
Restricted cash deposits with trustee for interest payments
|
|
(3,681
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,681
|
)
|
|
Other
|
|
1,558
|
|
|
3,181
|
|
|
570
|
|
|
—
|
|
|
5,309
|
|
|
Net cash provided by (used for) operations
|
|
(27,772
|
)
|
|
143,479
|
|
|
(2,453
|
)
|
|
—
|
|
|
113,254
|
|
|
Cash provided by (used for) investment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenditures for property and equipment
|
|
(991
|
)
|
|
(53,822
|
)
|
|
(613
|
)
|
|
—
|
|
|
(55,426
|
)
|
|
Acquisitions of businesses and facilities
|
|
—
|
|
|
(215,900
|
)
|
|
—
|
|
|
—
|
|
|
(215,900
|
)
|
|
Proceeds from sales of assets and other
|
|
30
|
|
|
514
|
|
|
2
|
|
|
—
|
|
|
546
|
|
|
Net cash used for investment
|
|
(961
|
)
|
|
(269,208
|
)
|
|
(611
|
)
|
|
—
|
|
|
(270,780
|
)
|
|
Cash provided by (used for) financing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings of long-term debt, including revolving credit facility
|
|
835,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
835,000
|
|
|
Payments on long-term debt, including revolving credit facility
|
|
(602,096
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(602,096
|
)
|
|
Restricted cash deposits with trustee for debt payments
|
|
(119,175
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(119,175
|
)
|
|
Treasury stock purchased
|
|
(2,632
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,632
|
)
|
|
Financing costs
|
|
(6,319
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,319
|
)
|
|
Tax withholding payments on stock-based awards
|
|
(383
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(383
|
)
|
|
Other
|
|
—
|
|
|
(181
|
)
|
|
—
|
|
|
—
|
|
|
(181
|
)
|
|
Due to (from) affiliates
|
|
(128,963
|
)
|
|
125,907
|
|
|
3,056
|
|
|
—
|
|
|
—
|
|
|
Net cash provided by (used for) financing
|
|
(24,568
|
)
|
|
125,726
|
|
|
3,056
|
|
|
—
|
|
|
104,214
|
|
|
Net decrease in cash and cash equivalents
|
|
(53,301
|
)
|
|
(3
|
)
|
|
(8
|
)
|
|
—
|
|
|
(53,312
|
)
|
|
Balance at beginning of the period
|
|
184,434
|
|
|
11
|
|
|
51
|
|
|
—
|
|
|
184,496
|
|
|
Balance at end of the period
|
|
$
|
131,133
|
|
|
$
|
8
|
|
|
$
|
43
|
|
|
$
|
—
|
|
|
$
|
131,184
|
|
|
Boise Cascade Company and Subsidiaries
Consolidating Statements of Cash Flows
For the Nine Months Ended September 30, 2015
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Boise
Cascade Company (Parent)
|
|
Guarantor
Subsidiaries
|
|
Non-
guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
|
|
|
(thousands)
|
|
Cash provided by (used for) operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
49,854
|
|
|
$
|
111,292
|
|
|
$
|
1,097
|
|
|
$
|
(112,389
|
)
|
|
$
|
49,854
|
|
|
Items in net income not using (providing) cash
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in net income of affiliates
|
|
(112,389
|
)
|
|
—
|
|
|
—
|
|
|
112,389
|
|
|
—
|
|
|
Depreciation and amortization, including deferred financing costs and other
|
|
1,398
|
|
|
40,064
|
|
|
852
|
|
|
—
|
|
|
42,314
|
|
|
Stock-based compensation
|
|
4,330
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,330
|
|
|
Pension expense
|
|
2,844
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,844
|
|
|
Deferred income taxes
|
|
20,722
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,722
|
|
|
Other
|
|
(587
|
)
|
|
(1,266
|
)
|
|
—
|
|
|
—
|
|
|
(1,853
|
)
|
|
Decrease (increase) in working capital
|
|
|
|
|
|
|
|
|
|
|
|
Receivables
|
|
(496
|
)
|
|
(58,777
|
)
|
|
(108
|
)
|
|
—
|
|
|
(59,381
|
)
|
|
Inventories
|
|
—
|
|
|
(8,275
|
)
|
|
(1,879
|
)
|
|
—
|
|
|
(10,154
|
)
|
|
Prepaid expenses and other
|
|
(2,081
|
)
|
|
(184
|
)
|
|
24
|
|
|
—
|
|
|
(2,241
|
)
|
|
Accounts payable and accrued liabilities
|
|
2,311
|
|
|
74,184
|
|
|
(10
|
)
|
|
—
|
|
|
76,485
|
|
|
Pension contributions
|
|
(53,701
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(53,701
|
)
|
|
Income taxes payable
|
|
13,488
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
13,489
|
|
|
Other
|
|
(1,635
|
)
|
|
(3,132
|
)
|
|
(15
|
)
|
|
—
|
|
|
(4,782
|
)
|
|
Net cash provided by (used for) operations
|
|
(75,942
|
)
|
|
153,906
|
|
|
(38
|
)
|
|
—
|
|
|
77,926
|
|
|
Cash provided by (used for) investment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenditures for property and equipment
|
|
(2,176
|
)
|
|
(54,397
|
)
|
|
(125
|
)
|
|
—
|
|
|
(56,698
|
)
|
|
Proceeds from sales of assets and other
|
|
—
|
|
|
2,975
|
|
|
(16
|
)
|
|
—
|
|
|
2,959
|
|
|
Net cash used for investment
|
|
(2,176
|
)
|
|
(51,422
|
)
|
|
(141
|
)
|
|
—
|
|
|
(53,739
|
)
|
|
Cash provided by (used for) financing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings of long-term debt
|
|
50,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
50,000
|
|
|
Treasury stock purchased
|
|
(23,711
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(23,711
|
)
|
|
Financing costs
|
|
(702
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(702
|
)
|
|
Tax withholding payments on stock-based awards
|
|
(1,160
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,160
|
)
|
|
Other
|
|
698
|
|
|
(77
|
)
|
|
—
|
|
|
—
|
|
|
621
|
|
|
Due to (from) affiliates
|
|
102,210
|
|
|
(102,387
|
)
|
|
177
|
|
|
—
|
|
|
—
|
|
|
Net cash provided by (used for) financing
|
|
127,335
|
|
|
(102,464
|
)
|
|
177
|
|
|
—
|
|
|
25,048
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
49,217
|
|
|
20
|
|
|
(2
|
)
|
|
—
|
|
|
49,235
|
|
|
Balance at beginning of the period
|
|
163,512
|
|
|
23
|
|
|
14
|
|
|
—
|
|
|
163,549
|
|
|
Balance at end of the period
|
|
$
|
212,729
|
|
|
$
|
43
|
|
|
$
|
12
|
|
|
$
|
—
|
|
|
$
|
212,784
|
|