Consolidating Guarantor and Nonguarantor Financial Information

3 Months Ended

Mar. 31, 2014

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. Additionally, in accordance with the terms of the indenture governing the Senior Notes, the guarantee of BC Holdings was automatically released when Boise Cascade Company's common stock was registered under the Exchange Act and was listed on the NYSE in February 2013.

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. As such, Chester Wood Products LLC and Moncure Plywood LLC are 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 March 31, 2014

(unaudited)



	Boise Cascade Company (Parent)			Guarantor Subsidiaries			Non- guarantor Subsidiaries			Eliminations			Consolidated
	(thousands)
Sales
Trade	$	—		$	764,070		$	3,110		$	—		$	767,180
Intercompany	—			—			2,565			(2,565		)	—
	—			764,070			5,675			(2,565		)	767,180

Costs and expenses
Materials, labor, and other operating expenses (excluding depreciation)	—			669,750			5,398			(2,540		)	672,608
Depreciation and amortization	34			11,979			307			—			12,320
Selling and distribution expenses	—			58,275			655			—			58,930
General and administrative expenses	4,275			6,415			—			(25		)	10,665
Other (income) expense, net	9			(1,630		)	(279		)	—			(1,900		)
	4,318			744,789			6,081			(2,565		)	752,623

Income (loss) from operations	(4,318		)	19,281			(406		)	—			14,557

Foreign currency exchange gain (loss)	(62		)	9			(36		)	—			(89		)
Interest expense	(5,512		)	—			—			—			(5,512		)
Interest income	5			65			—			—			70
	(5,569		)	74			(36		)	—			(5,531		)

Income (loss) before income taxes and equity in net income of affiliates	(9,887		)	19,355			(442		)	—			9,026
Income tax (provision) benefit	(3,479		)	18			—			—			(3,461		)

Income (loss) before equity in net income of affiliates	(13,366		)	19,373			(442		)	—			5,565
Equity in net income of affiliates	18,931			—			—			(18,931		)	—
Net income (loss)	5,565			19,373			(442		)	(18,931		)	5,565

Other comprehensive income, net of tax
Defined benefit pension plans
Amortization of actuarial gain	(4		)	—			—			—			(4		)
Other comprehensive loss, net of tax	(4		)	—			—			—			(4		)
Comprehensive income (loss)	$	5,561		$	19,373		$	(442	)	$	(18,931	)	$	5,561

Boise Cascade Company and Subsidiaries

Consolidating Statements of Comprehensive Income (Loss)

For the Three Months Ended March 31, 2013

(unaudited)



	Boise Cascade Company (Parent)			Guarantor Subsidiaries			Non- guarantor Subsidiaries			Eliminations			Consolidated
	(thousands)
Sales
Trade	$	—		$	742,383		$	2,495		$	—		$	744,878
Intercompany	—			—			2,638			(2,638		)	—
	—			742,383			5,133			(2,638		)	744,878

Costs and expenses
Materials, labor, and other operating expenses (excluding depreciation)	—			641,587			5,970			(2,710		)	644,847
Depreciation and amortization	46			8,124			307			—			8,477
Selling and distribution expenses	—			56,372			632			—			57,004
General and administrative expenses	4,103			5,871			—			72			10,046
Other (income) expense, net	2			226			(362		)	—			(134		)
	4,151			712,180			6,547			(2,638		)	720,240

Income (loss) from operations	(4,151		)	30,203			(1,414		)	—			24,638

Foreign currency exchange loss	(30		)	(44		)	(6		)	—			(80		)
Interest expense	(4,891		)	—			—			—			(4,891		)
Interest income	28			34			—			—			62
	(4,893		)	(10		)	(6		)	—			(4,909		)

Income (loss) before income taxes and equity in net income of affiliates	(9,044		)	30,193			(1,420		)	—			19,729
Income tax benefit	61,107			—			—			—			61,107

Income (loss) before equity in net income of affiliates	52,063			30,193			(1,420		)	—			80,836
Equity in net income of affiliates	28,773			—			—			(28,773		)	—
Net income (loss)	80,836			30,193			(1,420		)	(28,773		)	80,836

Other comprehensive income, net of tax
Defined benefit pension plans
Amortization of actuarial loss	1,395			—			—			—			1,395
Amortization of prior service costs	14			—			—			—			14
Other comprehensive income, net of tax	1,409			—			—			—			1,409
Comprehensive income (loss)	$	82,245		$	30,193		$	(1,420	)	$	(28,773	)	$	82,245

Boise Cascade Company and Subsidiaries Consolidating Balance Sheets at March 31, 2014 (unaudited)

	Boise Cascade Company (Parent)		Guarantor Subsidiaries		Non- guarantor Subsidiaries		Eliminations			Consolidated
	(thousands)
ASSETS
Current
Cash and cash equivalents	$	85,940	$	39	$	6	$	—		$	85,985
Receivables
Trade, less allowances	56		198,813		1,232		—			200,101
Related parties	—		660		—		—			660
Other	30		5,745		245		—			6,020
Inventories	—		415,449		5,610		—			421,059
Deferred income taxes	18,177		—		8		—			18,185
Prepaid expenses and other	8,921		715		71		—			9,707
	113,124		621,421		7,172		—			741,717

Property and equipment, net	1,195		348,976		7,736		—			357,907
Timber deposits	—		6,461		—		—			6,461
Deferred financing costs	8,051		—		—		—			8,051
Goodwill	—		21,823		—		—			21,823
Intangible assets, net	—		10,253		—		—			10,253
Deferred income taxes	85		—		—		—			85
Other assets	36		8,174		—		—			8,210
Investments in affiliates	778,471		—		—		(778,471		)	—
Total assets	$	900,962	$	1,017,108	$	14,908	$	(778,471	)	$	1,154,507

Boise Cascade Company and Subsidiaries Consolidating Balance Sheets at March 31, 2014 (continued) (unaudited)

	Boise Cascade Company (Parent)			Guarantor Subsidiaries		Non- guarantor Subsidiaries		Eliminations			Consolidated
	(thousands)
LIABILITIES AND STOCKHOLDERS' EQUITY
Current
Accounts payable
Trade	$	6,082		$	190,552	$	846	$	—		$	197,480
Related parties	—			2,143		—		—			2,143
Accrued liabilities	—			—		—		—
Compensation and benefits	20,347			27,174		397		—			47,918
Interest payable	8,080			—		—		—			8,080
Other	2,658			27,015		913		—			30,586
	37,167			246,884		2,156		—			286,207

Debt
Long-term debt	301,565			—		—		—			301,565

Other
Compensation and benefits	93,125			—		—		—			93,125
Other long-term liabilities	10,181			4,505		—		—			14,686
	103,306			4,505		—		—			107,811

Commitments and contingent liabilities

Stockholders' equity
Preferred stock	—			—		—		—			—
Common stock	433			—		—		—			433
Treasury stock	(100,000		)	—		—		—			(100,000		)
Additional paid-in capital	497,474			—		—		—			497,474
Accumulated other comprehensive loss	(55,253		)	—		—		—			(55,253		)
Retained earnings	116,270			—		—		—			116,270
Subsidiary equity	—			765,719		12,752		(778,471		)	—
Total stockholders' equity	458,924			765,719		12,752		(778,471		)	458,924
Total liabilities and stockholders' equity	$	900,962		$	1,017,108	$	14,908	$	(778,471	)	$	1,154,507

Boise Cascade Company and Subsidiaries Consolidating Balance Sheets at December 31, 2013

	Boise Cascade Company (Parent)			Guarantor Subsidiaries		Non- guarantor Subsidiaries		Eliminations			Consolidated
	(thousands)
ASSETS
Current
Cash and cash equivalents	$	118,198		$	25	$	26	$	—		$	118,249
Receivables
Trade, less allowances	13			151,225		1,002		—			152,240
Related parties	17			566		—		—			583
Other	(30		)	7,115		183		—			7,268
Inventories	(101		)	379,012		4,448		—			383,359
Deferred income taxes	18,143			—		8		—			18,151
Prepaid expenses and other	2,819			4,983		53		—			7,855
	139,059			542,926		5,720		—			687,705

Property and equipment, net	1,113			351,838		8,034		—			360,985
Timber deposits	—			6,266		—		—			6,266
Deferred financing costs	8,334			—		—		—			8,334
Goodwill	—			21,823		—		—			21,823
Intangible assets, net	—			10,277		—		—			10,277
Deferred income taxes	760			—		—		—			760
Other assets	36			8,000		—		—			8,036
Investments in affiliates	739,420			—		—		(739,420		)	—
Total assets	$	888,722		$	941,130	$	13,754	$	(739,420	)	$	1,104,186

Boise Cascade Company and Subsidiaries Consolidating Balance Sheets at December 31, 2013 (continued)

	Boise Cascade Company (Parent)			Guarantor Subsidiaries		Non- guarantor Subsidiaries		Eliminations			Consolidated
	(thousands)
LIABILITIES AND STOCKHOLDERS' EQUITY
Current
Accounts payable
Trade	$	5,396		$	133,724	$	516	$	—		$	139,636
Related parties	402			2,082		—		—			2,484
Accrued liabilities
Compensation and benefits	17,262			42,784		481		—			60,527
Interest payable	3,294			—		—		—			3,294
Other	1,421			30,341		1,314		—			33,076
	27,775			208,931		2,311		—			239,017

Debt
Long-term debt	301,613			—		—		—			301,613

Other
Compensation and benefits	96,536			—		—		—			96,536
Other long-term liabilities	10,317			4,222		—		—			14,539
	106,853			4,222		—		—			111,075

Commitments and contingent liabilities

Stockholders' equity
Preferred stock	—			—		—		—			—
Common stock	432			—		—		—			432
Treasury stock	(100,000		)	—		—		—			(100,000		)
Additional paid-in capital	496,593			—		—		—			496,593
Accumulated other comprehensive loss	(55,249		)	—		—		—			(55,249		)
Retained earnings	110,705			—		—		—			110,705
Subsidiary equity	—			727,977		11,443		(739,420		)	—
Total stockholders' equity	452,481			727,977		11,443		(739,420		)	452,481
Total liabilities and stockholders' equity	$	888,722		$	941,130	$	13,754	$	(739,420	)	$	1,104,186

Boise Cascade Company and Subsidiaries Consolidating Statements of Cash Flows For the Three Months Ended March 31, 2014 (unaudited)

	Boise Cascade Company (Parent)			Guarantor Subsidiaries			Non- guarantor Subsidiaries			Eliminations			Consolidated
	(thousands)
Cash provided by (used for) operations
Net income (loss)	$	5,565		$	19,373		$	(442	)	$	(18,931	)	$	5,565
Items in net income (loss) not using (providing) cash
Equity in net income of affiliates	(18,931		)	—			—			18,931			—
Depreciation and amortization, including deferred financing costs and other	442			11,980			307			—			12,729
Stock-based compensation	842			—			—			—			842
Pension expense	278			—			—			—			278
Deferred income taxes	643			—			—			—			643
Other	—			(1,908		)	—			—			(1,908		)
Decrease (increase) in working capital
Receivables	(103		)	(46,311		)	(293		)	—			(46,707		)
Inventories	(101		)	(36,437		)	(1,162		)	—			(37,700		)
Prepaid expenses and other	(6,531		)	1,669			(18		)	—			(4,880		)
Accounts payable and accrued liabilities	7,096			41,369			(150		)	—			48,315
Pension contributions	(390		)	—			—			—			(390		)
Income taxes payable	2,319			—			(5		)	—			2,314
Other	(2,806		)	(245		)	—			—			(3,051		)
Net cash used for operations	(11,677		)	(10,510		)	(1,763		)	—			(23,950		)
Cash provided by (used for) investment
Expenditures for property and equipment	(105		)	(12,425		)	(9		)	—			(12,539		)
Proceeds from sales of assets	—			4,520			—			—			4,520
Other	—			60			1			—			61
Net cash used for investment	(105		)	(7,845		)	(8		)	—			(7,958		)
Cash provided by (used for) financing
Issuances of long-term debt, including revolving credit facility	13,000			—			—			—			13,000
Payments of long-term debt, including revolving credit facility	(13,000		)	—			—			—			(13,000		)
Financing costs	(11		)	—			—			—			(11		)
Other	(345		)	—			—			—			(345		)
Due to (from) affiliates	(20,120		)	18,369			1,751			—			—
Net cash provided by (used for) financing	(20,476		)	18,369			1,751			—			(356		)
Net increase (decrease) in cash and cash equivalents	(32,258		)	14			(20		)	—			(32,264		)
Balance at beginning of the period	118,198			25			26			—			118,249
Balance at end of the period	$	85,940		$	39		$	6		$	—		$	85,985

Boise Cascade Company and Subsidiaries Consolidating Statements of Cash Flows For the Three Months Ended March 31, 2013 (unaudited)

	Boise Cascade Company (Parent)			Guarantor Subsidiaries			Non- guarantor Subsidiaries			Eliminations			Consolidated
	(thousands)
Cash provided by (used for) operations
Net income (loss)	$	80,836		$	30,193		$	(1,420	)	$	(28,773	)	$	80,836
Items in net income (loss) not using (providing) cash
Equity in net income of affiliates	(28,773		)	—			—			28,773			—
Depreciation and amortization, including deferred financing costs and other	457			8,124			307			—			8,888
Stock-based compensation	243			—			—			—			243
Pension expense	2,726			—			—			—			2,726
Deferred income taxes	(68,018		)	—			—			—			(68,018		)
Other	—			(232		)	—			—			(232		)
Decrease (increase) in working capital
Receivables	274			(68,680		)	(229		)	—			(68,635		)
Inventories	—			(59,913		)	(1,384		)	—			(61,297		)
Prepaid expenses and other	(1,734		)	1,386			(36		)	—			(384		)
Accounts payable and accrued liabilities	(327		)	54,531			(411		)	—			53,793
Pension contributions	(9,663		)	—			—			—			(9,663		)
Income taxes payable	6,772			—			—			—			6,772
Other	(1,709		)	(761		)	(2		)	—			(2,472		)
Net cash used for operations	(18,916		)	(35,352		)	(3,175		)	—			(57,443		)
Cash provided by (used for) investment
Expenditures for property and equipment	—			(5,336		)	20			—			(5,316		)
Proceeds from sales of assets	—			72			417			—			489
Other	2			8			12			—			22
Net cash provided by (used for) investment	2			(5,256		)	449			—			(4,805		)
Cash provided by (used for) financing
Net proceeds from issuance of common stock	262,736			—			—			—			262,736
Issuances of long-term debt, including revolving credit facility	55,000			—			—			—			55,000
Payments of long-term debt, including revolving credit facility	(80,000		)	—			—			—			(80,000		)
Financing costs	(149		)	—			—			—			(149		)
Due to (from) affiliates	(43,174		)	40,607			2,567			—			—
Net cash provided by financing	194,413			40,607			2,567			—			237,587
Net increase (decrease) in cash and cash equivalents	175,499			(1		)	(159		)	—			175,339
Balance at beginning of the period	45,680			35			178			—			45,893
Balance at end of the period	$	221,179		$	34		$	19		$	—		$	221,232