Consolidating Guarantor and Nonguarantor Financial Information

9 Months Ended

Sep. 30, 2013

Consolidating Guarantor and Nonguarantor Financial Information [Abstract]

Consolidating Guarantor and Nonguarantor Financial Information

The following consolidating financial information presents the Statements of Comprehensive Income (Loss), Balance Sheets, and Cash Flows related to Boise Cascade. The Senior Notes are 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 is a guarantor of the Senior 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. The reclassifications to net income from accumulated other comprehensive loss are recorded primarily in our guarantor subsidiaries.

Furthermore, the cancellation provisions in the related indenture regarding guarantor subsidiaries are customary, and they do not include an arrangement that permits a guarantor subsidiary to opt out of the obligation prior to or during the term of the debt. Each guarantor subsidiary is 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 if the issuer exercises its legal defeasance option or the discharge of its obligations in accordance with the indenture governing the Senior Notes.

On October 1, 2013, we entered into a supplemental indenture (Supplemental Indenture) with certain of our subsidiaries and U.S. Bank National Association, the trustee for our Senior Notes, to add Chester Wood Products LLC and Moncure Plywood LLC as guarantors of the Senior Notes. Entry into the Supplemental Indenture was consummated in connection with the Acquisition on September 30, 2013, as described in Note 5, Acquisitions. Additionally, Chester Wood Products LLC and Moncure Plywood LLC executed guarantees to our Revolving Credit Facility. As such, Chester Wood Products LLC and Moncure Plywood LLC will be included as guarantor subsidiaries in the consolidating guarantor and nonguarantor financial statements effective October 1, 2013.

Boise Cascade Company and Subsidiaries

Consolidating Statements of Comprehensive Income (Loss)

For the Three Months Ended September 30, 2013

(unaudited)



	Boise Cascade Company (Parent)			Guarantor Subsidiaries		Non- guarantor Subsidiaries			Eliminations			Consolidated
	(thousands)
Sales
Trade	$	—		$	873,834	$	4,145		$	—		$	877,979
Intercompany	—			—		3,462			(3,462		)	—
	—			873,834		7,607			(3,462		)	877,979

Costs and expenses
Materials, labor, and other operating expenses (excluding depreciation)	—			755,757		7,713			(3,693		)	759,777
Depreciation and amortization	30			8,632		300			—			8,962
Selling and distribution expenses	—			65,635		609			—			66,244
General and administrative expenses	5,422			7,214		—			231			12,867
Other (income) expense, net	(158		)	3		(195		)	—			(350		)
	5,294			837,241		8,427			(3,462		)	847,500

Income (loss) from operations	(5,294		)	36,593		(820		)	—			30,479

Foreign exchange gain (loss)	(3		)	39		33			—			69
Interest expense	(5,174		)	—		—			—			(5,174		)
Interest income	18			70		—			—			88
	(5,159		)	109		33			—			(5,017		)

Income (loss) before income taxes and equity in net income of affiliates	(10,453		)	36,702		(787		)	—			25,462
Income tax (provision) benefit	(9,708		)	128		(22		)	—			(9,602		)

Income (loss) before equity in net income of affiliates	(20,161		)	36,830		(809		)	—			15,860
Equity in net income of affiliates	36,021			—		—			(36,021		)	—
Net income (loss)	15,860			36,830		(809		)	(36,021		)	15,860

Other comprehensive income, net of tax
Defined benefit pension plans
Amortization of actuarial loss	1,443			—		—			—			1,443
Amortization of prior service costs	14			—		—			—			14
Other comprehensive income, net of tax	1,457			—		—			—			1,457
Comprehensive income (loss)	$	17,317		$	36,830	$	(809	)	$	(36,021	)	$	17,317

Boise Cascade Company and Subsidiaries

Consolidating Statements of Comprehensive Income (Loss)

For the Three Months Ended September 30, 2012

(unaudited)



	Boise Cascade Company (Parent)			Guarantor Subsidiaries			Non- guarantor Subsidiaries			Eliminations			Consolidated
	(thousands)
Sales
Trade	$	—		$	760,795		$	3,801		$	—		$	764,596
Intercompany	—			—			3,327			(3,327		)	—
	—			760,795			7,128			(3,327		)	764,596

Costs and expenses
Materials, labor, and other operating expenses (excluding depreciation)	—			649,386			7,711			(3,972		)	653,125
Depreciation and amortization	32			8,071			358			—			8,461
Selling and distribution expenses	—			61,708			864			—			62,572
General and administrative expenses	4,561			6,980			(1		)	645			12,185
Other (income) expense, net	16			513			(408		)	—			121
	4,609			726,658			8,524			(3,327		)	736,464

Income (loss) from operations	(4,609		)	34,137			(1,396		)	—			28,132

Foreign exchange gain (loss)	198			(73		)	103			—			228
Interest expense	(4,840		)	—			—			—			(4,840		)
Interest income	43			44			—			—			87
	(4,599		)	(29		)	103			—			(4,525		)

Income (loss) before income taxes and equity in net income of affiliates	(9,208		)	34,108			(1,293		)	—			23,607
Income tax (provision) benefit	(109		)	5			—			—			(104		)

Income (loss) before equity in net income of affiliates	(9,317		)	34,113			(1,293		)	—			23,503
Equity in net income of affiliates	32,820			—			—			(32,820		)	—
Net income (loss)	23,503			34,113			(1,293		)	(32,820		)	23,503

Other comprehensive income, net of tax
Defined benefit pension plans
Amortization of actuarial loss	1,824			—			—			—			1,824
Amortization of prior service costs	41			—			—			—			41
Other comprehensive income, net of tax	1,865			—			—			—			1,865
Comprehensive income (loss)	$	25,368		$	34,113		$	(1,293	)	$	(32,820	)	$	25,368

Boise Cascade Company and Subsidiaries

Consolidating Statements of Comprehensive Income (Loss)

For the Nine Months Ended September 30, 2013

(unaudited)



	Boise Cascade Company (Parent)			Guarantor Subsidiaries			Non- guarantor Subsidiaries			Eliminations			Consolidated
	(thousands)
Sales
Trade	$	—		$	2,464,732		$	10,420		$	—		$	2,475,152
Intercompany	—			—			9,020			(9,020		)	—
	—			2,464,732			19,440			(9,020		)	2,475,152

Costs and expenses
Materials, labor, and other operating expenses, (excluding depreciation)	—			2,143,883			21,375			(9,638		)	2,155,620
Depreciation and amortization	109			25,185			911			—			26,205
Selling and distribution expenses	—			181,468			1,882			—			183,350
General and administrative expenses	13,570			18,976			—			618			33,164
Other (income) expense, net	(151		)	490			(862		)	—			(523		)
	13,528			2,370,002			23,306			(9,020		)	2,397,816

Income (loss) from operations	(13,528		)	94,730			(3,866		)	—			77,336

Foreign exchange gain (loss)	(233		)	(74		)	5			—			(302		)
Interest expense	(14,846		)	—			—			—			(14,846		)
Interest income	73			139			—			—			212
	(15,006		)	65			5			—			(14,936		)

Income (loss) before income taxes and equity in net income of affiliates	(28,534		)	94,795			(3,861		)	—			62,400
Income tax (provision) benefit	44,602			128			(22		)	—			44,708

Income (loss) before equity in net income of affiliates	16,068			94,923			(3,883		)	—			107,108
Equity in net income of affiliates	91,040			—			—			(91,040		)	—
Net income (loss)	107,108			94,923			(3,883		)	(91,040		)	107,108

Other comprehensive income, net of tax
Defined benefit pension plans
Amortization of actuarial loss	4,249			—			—			—			4,249
Amortization of prior service costs	42			—			—			—			42
Other comprehensive income, net of tax	4,291			—			—			—			4,291
Comprehensive income (loss)	$	111,399		$	94,923		$	(3,883	)	$	(91,040	)	$	111,399

Boise Cascade Company and Subsidiaries

Consolidating Statements of Comprehensive Income (Loss)

For the Nine Months Ended September 30, 2012

(unaudited)



	Boise Cascade Company (Parent)			Guarantor Subsidiaries			Non- guarantor Subsidiaries			Eliminations			Consolidated
	(thousands)
Sales
Trade	$	—		$	2,074,837		$	9,645		$	—		$	2,084,482
Intercompany	—			—			9,854			(9,854		)	—
	—			2,074,837			19,499			(9,854		)	2,084,482

Costs and expenses
Materials, labor, and other operating expenses, (excluding depreciation)	—			1,786,481			20,242			(10,867		)	1,795,856
Depreciation and amortization	96			23,568			1,254			—			24,918
Selling and distribution expenses	—			174,458			2,396			—			176,854
General and administrative expenses	12,264			18,645			—			1,013			31,922
Other (income) expense, net	94			1,709			(1,397		)	—			406
	12,454			2,004,861			22,495			(9,854		)	2,029,956

Income (loss) from operations	(12,454		)	69,976			(2,996		)	—			54,526

Foreign exchange gain (loss)	224			(132		)	33			—			125
Interest expense	(14,471		)	—			—			—			(14,471		)
Interest income	132			149			—			—			281
	(14,115		)	17			33			—			(14,065		)

Income (loss) before income taxes and equity in net income of affiliates	(26,569		)	69,993			(2,963		)	—			40,461
Income tax provision	(236		)	(7		)	—			—			(243		)

Income (loss) before equity in net income of affiliates	(26,805		)	69,986			(2,963		)	—			40,218
Equity in net income of affiliates	67,023			—			—			(67,023		)	—
Net income (loss)	40,218			69,986			(2,963		)	(67,023		)	40,218

Other comprehensive income, net of tax
Defined benefit pension plans
Amortization of actuarial loss	5,808			—			—			—			5,808
Amortization of prior service costs and other	124			—			—			—			124
Other comprehensive income, net of tax	5,932			—			—			—			5,932
Comprehensive income (loss)	$	46,150		$	69,986		$	(2,963	)	$	(67,023	)	$	46,150

Boise Cascade Company and Subsidiaries Consolidating Balance Sheets at September 30, 2013 (unaudited)

	Boise Cascade Company (Parent)		Guarantor Subsidiaries		Non- guarantor Subsidiaries (a)		Eliminations			Consolidated
	(thousands)
ASSETS
Current
Cash and cash equivalents	$	156,986	$	28	$	5	$	—		$	157,019
Receivables
Trade, less allowances	12		194,998		8,925		—			203,935
Related parties	17		453		—		—			470
Other	1,007		7,391		245		—			8,643
Inventories	—		356,674		12,506		—			369,180
Deferred income taxes	21,316		—		8		—			21,324
Prepaid expenses and other	2,730		6,144		123		—			8,997
	182,068		565,688		21,812		—			769,568

Property and equipment, net	842		261,092		93,157		—			355,091
Timber deposits	—		5,537		164		—			5,701
Deferred financing costs	8,437		—		—		—			8,437
Goodwill	—		12,170		8,307		—			20,477
Intangible assets	—		8,900		1,400		—			10,300
Deferred income taxes	41,133		—		—		—			41,133
Other assets	36		7,215		1		—			7,252
Investments in affiliates	723,840		—		—		(723,840		)	—
Total assets	$	956,356	$	860,602	$	124,841	$	(723,840	)	$	1,217,959

Boise Cascade Company and Subsidiaries Consolidating Balance Sheets at September 30, 2013 (continued) (unaudited)

	Boise Cascade Company (Parent)			Guarantor Subsidiaries		Non- guarantor Subsidiaries (a)		Eliminations			Consolidated
	(thousands)
LIABILITIES AND STOCKHOLDERS' EQUITY
Current
Accounts payable
Trade	$	14,862		$	171,441	$	5,310	$	—		$	191,613
Related parties	402			1,757		—		—			2,159
Accrued liabilities	—			—		—		—
Compensation and benefits	17,100			39,353		2,724		—			59,177
Interest payable	8,073			—		—		—			8,073
Other	3,854			35,099		1,840		—			40,793
	44,291			247,650		9,874		—			301,815

Debt
Long-term debt	326,694			—		—		—			326,694

Other
Compensation and benefits	194,346			—		—		—			194,346
Other long-term liabilities	11,067			4,065		14		—			15,146
	205,413			4,065		14		—			209,492

Commitments and contingent liabilities

Stockholders' equity
Preferred stock	—			—		—		—			—
Common stock	432			—		—		—			432
Treasury stock	(100,000		)	—		—		—			(100,000		)
Additional paid-in capital	495,587			—		—		—			495,587
Accumulated other comprehensive loss	(116,938		)	—		—		—			(116,938		)
Retained earnings	100,877			—		—		—			100,877
Subsidiary equity	—			608,887		114,953		(723,840		)	—
Total stockholders' equity	379,958			608,887		114,953		(723,840		)	379,958
Total liabilities and stockholders' equity	$	956,356		$	860,602	$	124,841	$	(723,840	)	$	1,217,959


(a)	As of September 30, 2013, Chester Wood Products LLC and Moncure Plywood LLC are included as nonguarantor subsidiaries. On October 1, 2013, we entered into the Supplemental Indenture for the Senior Notes, which will result in the inclusion of these subsidiaries as guarantor subsidiaries in the consolidating guarantor and nonguarantor financial statements effective October 1, 2013.

Boise Cascade Company and Subsidiaries Consolidating Balance Sheets at December 31, 2012

	Boise Cascade Company (Parent)		Guarantor Subsidiaries		Non- guarantor Subsidiaries		Eliminations			Consolidated
	(thousands)
ASSETS
Current
Cash and cash equivalents	$	54,294	$	35	$	178	$	—		$	54,507
Receivables
Trade, less allowances	65		133,554		1,124		—			134,743
Related parties	16		658		—		—			674
Other	25		5,631		548		—			6,204
Inventories	—		320,279		5,527		—			325,806
Deferred income taxes	—		—		2		—			2
Prepaid expenses and other	914		4,576		31		—			5,521
	55,314		464,733		7,410		—			527,457

Property and equipment, net	1,284		255,869		8,771		—			265,924
Timber deposits	—		6,221		—		—			6,221
Deferred financing costs	7,562		—		—		—			7,562
Goodwill	—		12,170		—		—			12,170
Intangible assets	—		8,900		—		—			8,900
Other assets	729		7,435		—		—			8,164
Investments in affiliates	565,355		—		—		(565,355		)	—
Total assets	$	630,244	$	755,328	$	16,181	$	(565,355	)	$	836,398

Boise Cascade Company and Subsidiaries Consolidating Balance Sheets at December 31, 2012 (continued)

	Boise Cascade Company (Parent)			Guarantor Subsidiaries		Non- guarantor Subsidiaries		Eliminations			Consolidated
	(thousands)
LIABILITIES AND STOCKHOLDER'S EQUITY
Current
Accounts payable
Trade	$	11,072		$	128,565	$	555	$	—		$	140,192
Related parties	402			1,548		—		—			1,950
Accrued liabilities
Compensation and benefits	17,272			43,938		604		—			61,814
Interest payable	3,188			—		—		—			3,188
Other	2,082			25,873		1,088		—			29,043
	34,016			199,924		2,247		—			236,187

Debt
Long-term debt	275,000			—		—		—			275,000

Other
Compensation and benefits	206,668			—		—		—			206,668
Other long-term liabilities	10,353			3,983		—		—			14,336
	217,021			3,983		—		—			221,004

Redeemable equity	6,443			—		—		—			6,443

Commitments and contingent liabilities

Stockholder's equity
Preferred stock	—			—		—		—			—
Common stock	297			—		—		—			297
Additional paid-in capital	256,927			—		—		—			256,927
Accumulated other comprehensive loss	(121,229		)	—		—		—			(121,229		)
Accumulated deficit	(38,231		)	—		—		—			(38,231		)
Subsidiary equity	—			551,421		13,934		(565,355		)	—
Total stockholder's equity	97,764			551,421		13,934		(565,355		)	97,764
Total liabilities and stockholder's equity	$	630,244		$	755,328	$	16,181	$	(565,355	)	$	836,398

Boise Cascade Company and Subsidiaries Consolidating Statements of Cash Flows For the Nine Months Ended September 30, 2013 (unaudited)

	Boise Cascade Company (Parent)			Guarantor Subsidiaries			Non- guarantor Subsidiaries			Eliminations			Consolidated
	(thousands)
Cash provided by (used for) operations
Net income (loss)	$	107,108		$	94,923		$	(3,883	)	$	(91,040	)	$	107,108
Items in net income (loss) not using (providing) cash
Equity in net income of affiliates	(91,040		)	—			—			91,040			—
Depreciation and amortization, including deferred financing costs and other	1,477			25,185			911			—			27,573
Stock-based compensation	1,862			—			—			—			1,862
Pension expense	8,104			—			—			—			8,104
Deferred income taxes	(65,095		)	—			—			—			(65,095		)
Other	(161		)	(490		)	23			—			(628		)
Decrease (increase) in working capital, net of acquisitions
Receivables	(853		)	(62,955		)	(179		)	—			(63,987		)
Inventories	—			(36,395		)	(45		)	—			(36,440		)
Prepaid expenses and other	14			(1,568		)	(70		)	—			(1,624		)
Accounts payable and accrued liabilities	6,849			47,466			(115		)	—			54,200
Pension contributions	(10,352		)	—			—			—			(10,352		)
Income taxes payable	2,221			(12		)	9			—			2,218
Other	(1,239		)	378			(1		)	—			(862		)
Net cash provided by (used for) operations	(41,105		)	66,532			(3,350		)	—			22,077
Cash provided by (used for) investment
Expenditures for property and equipment	(223		)	(29,374		)	(338		)	—			(29,935		)
Acquisitions of businesses and facilities	—			(102,002		)	—			—			(102,002		)
Proceeds from sales of assets	831			288			417			—			1,536
Other	—			4			5			—			9
Net cash provided by (used for) investment	608			(131,084		)	84			—			(130,392		)
Cash provided by (used for) financing
Net proceeds from issuance of common stock	262,488			—			—			—			262,488
Treasury stock purchased	(100,000		)	—			—			—			(100,000		)
Issuances of long-term debt	130,000			—			—			—			130,000
Payments of long-term debt	(80,000		)	—			—			—			(80,000		)
Financing costs	(1,854		)	—			—			—			(1,854		)
Other	—			—			193			—			193
Due to (from) affiliates	(67,445		)	64,545			2,900			—			—
Net cash provided by financing	143,189			64,545			3,093			—			210,827
Net increase (decrease) in cash and cash equivalents	102,692			(7		)	(173		)	—			102,512
Balance at beginning of the period	54,294			35			178			—			54,507
Balance at end of the period	$	156,986		$	28		$	5		$	—		$	157,019

Boise Cascade Company and Subsidiaries Consolidating Statements of Cash Flows For the Nine Months Ended September 30, 2012 (unaudited)

	Boise Cascade Company (Parent)			Guarantor Subsidiaries			Non- guarantor Subsidiaries			Eliminations			Consolidated
	(thousands)
Cash provided by (used for) operations
Net income (loss)	$	40,218		$	69,986		$	(2,963	)	$	(67,023	)	$	40,218
Items in net income (loss) not using (providing) cash
Equity in net income of affiliates	(67,023		)	—			—			67,023			—
Depreciation and amortization, including deferred financing costs and other	1,910			23,568			1,254			—			26,732
Pension expense	9,398			—			—			—			9,398
Other	(46		)	(139		)	(315		)	—			(500		)
Decrease (increase) in working capital, net of acquisitions
Receivables	952			(52,580		)	(1,624		)	(56		)	(53,308		)
Inventories	—			(33,703		)	(896		)	—			(34,599		)
Prepaid expenses and other	(9		)	(1,938		)	(26		)	—			(1,973		)
Accounts payable and accrued liabilities	6,047			75,948			282			56			82,333
Pension contributions	(8,181		)	—			—			—			(8,181		)
Income taxes payable	56			7			4			—			67
Other	4,049			635			1			—			4,685
Net cash provided by (used for) operations	(12,629		)	81,784			(4,283		)	—			64,872
Cash provided by (used for) investment
Expenditures for property and equipment	(28		)	(17,563		)	(91		)	—			(17,682		)
Acquisitions of businesses and facilities	—			(2,355		)	—			—			(2,355		)
Proceeds from sales of assets	—			171			—			—			171
Other	(3		)	1			(1		)	—			(3		)
Net cash used for investment	(31		)	(19,746		)	(92		)	—			(19,869		)
Cash provided by (used for) financing
Distribution to Boise Cascade Holdings, L.L.C.	(2,790		)	—			—			—			(2,790		)
Credit facility financing costs	(250		)	—			—			—			(250		)
Due to (from) affiliates	57,655			(62,009		)	4,354			—			—
Net cash provided by (used for) financing	54,615			(62,009		)	4,354			—			(3,040		)
Net increase (decrease) in cash and cash equivalents	41,955			29			(21		)	—			41,963
Balance at beginning of the period	182,326			20			109			—			182,455
Balance at end of the period	$	224,281		$	49		$	88		$	—		$	224,418