BOISE CASCADE CO MANAGEMENT REPORT OF FINANCIAL POSITION AND RESULTS OF OPERATIONS (Form 10-Q)

Understanding our financial information

  This Management's Discussion and Analysis of Financial Condition and Results
of Operations should be read in conjunction with our consolidated financial
statements and related notes in "Item 1. Financial Statements" of this
Form 10-Q, as well as our 2021 Form 10-K. The following discussion includes
statements regarding our expectations with respect to our future performance,
liquidity, and capital resources. Such statements, along with any other
nonhistorical statements in the discussion, are forward-looking. These
forward-looking statements include, without limitation, any statement that may
predict, indicate, or imply future results, performance, or achievements and may
contain the words "may," "will," "expect," "believe," "should," "plan,"
"anticipate," and other similar expressions. All of these forward-looking
statements are based on estimates and assumptions made by our management that,
although believed by us to be reasonable, are inherently uncertain. These
forward-looking statements are subject to numerous risks and uncertainties,
including, but not limited to, the risks and uncertainties described in
"Item 1A. Risk Factors" in our 2021 Form 10-K, as well as those factors listed
in other documents we file with the Securities and Exchange Commission (SEC). We
do not assume an obligation to update any forward-looking statement. Our future
actual results may differ materially from those contained in or implied by any
of the forward-looking statements in this Form 10-Q.

Background

  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. Boise
Cascade is a large, vertically-integrated wood products manufacturer and
building materials distributor. We have two reportable segments: (i) Wood
Products, which primarily manufactures engineered wood products (EWP) and
plywood; and (ii) Building Materials Distribution (BMD), which is a wholesale
distributor of building materials. Our products are used in the construction of
new residential housing, including single-family, multi-family, and manufactured
homes, the repair-and-remodeling of existing housing, the construction of light
industrial and commercial buildings, and industrial applications. For more
information, see Note 10, Segment Information, of the Condensed Notes to
Unaudited Quarterly Consolidated Financial Statements in "Item 1. Financial
Statements" of this Form 10-Q.

Executive Overview

  We recorded income from operations of $405.6 million during the three months
ended March 31, 2022, compared with income from operations of $205.3 million
during the three months ended March 31, 2021. In our Wood Products segment,
income increased $93.1 million to $190.1 million for the three months ended
March 31, 2022, from $97.1 million for the three months ended March 31, 2021,
due primarily to higher EWP and plywood sales prices, offset partially by higher
wood fiber and other manufacturing costs. In our BMD segment, income increased
$105.7 million to $225.9 million for the three months ended March 31, 2022, from
$120.2 million for the three months ended March 31, 2021, driven by a gross
margin increase of $133.6 million, resulting from improved gross margins across
substantially all product lines. The margin improvement was offset partially by
increased selling and distribution expenses and general and administrative
expenses of $25.5 million and $1.6 million, respectively. These changes are
discussed further in "Our Operating Results" below.

  We ended first quarter 2022 with $922.7 million of cash and cash equivalents
and $346.0 million of undrawn committed bank line availability, for total
available liquidity of $1,268.7 million. We had $444.8 million of outstanding
debt at March 31, 2022. We generated $173.8 million of cash during the three
months ended March 31, 2022, as cash provided by operations was offset partially
by capital spending, dividends paid on our common stock, and tax withholding
payments on stock-based awards. A further description of our cash sources and
uses for the three month comparative periods are discussed in "Liquidity and
Capital Resources" below.

  Demand for the products we manufacture, as well as the products we purchase
and distribute, is correlated with new residential construction, residential
repair-and-remodeling activity and light commercial construction. Current
demographics in the United States (U.S.), as well as continuation of
work-from-home practices by many in the economy, continue to create a favorable
demand environment for new residential construction. We expect demand to remain
strong during 2022, with April 2022 Blue Chip Economic Indicators consensus
forecasts for 2022 single- and multi-family housing starts in the U.S. of 1.65
million units compared with actual housing starts of 1.60 million in 2021, as
reported by the U.S. Census Bureau. In addition, limited new and existing home
inventory availability and the age of the U.S. housing stock will continue to
provide a favorable
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backdrop for residential construction and repair-and-remodel spending. Although
we believe that current U.S. demographics support the forecasted level of
housing starts, and many national home builders are reporting strong near-term
backlogs, labor shortages and supply induced constraints on residential
construction activity may continue to extend build times and limit activity. In
addition, the pace of residential construction and repair-and-remodeling
activity may be affected by the economic impact of the cost of building
materials and construction, housing affordability, increasing mortgage interest
rates, wage growth, prospective home buyers' access to financing, and consumer
confidence, as well as other factors.

  As a manufacturer of certain commodity products, we have sales and
profitability exposure to declines in commodity product prices and rising input
costs. Our distribution business purchases and resells a broad mix of commodity
products with periods of increasing prices providing the opportunity for higher
sales and increased margins, while declining price environments expose us to
declines in sales and profitability. Our first quarter 2022 financial results
were favorably impacted by higher commodity wood products pricing compared to
pricing in the same period last year, as well as rising prices for EWP and
general line products. Current composite panel and lumber prices have declined
by approximately 24% and 15% from levels at the end of first quarter 2022. We
expect future commodity product pricing and commodity input costs to be volatile
in response to capacity restoration and industry operating rates, transportation
constraints or disruptions, net import and export activity, inventory levels in
various distribution channels, and seasonal demand patterns. EWP and general
line products have historically experienced limited price volatility, and we
expect the firm pricing environment to continue during 2022.

Factors that affect our operating results and trends

Our results of operations and financial performance are influenced by a variety of factors, including the following:

•the commodity nature of some of our products and their price fluctuations, which are largely dependent on industry capacity and operating rates, industry cycles that affect supply and demand, and net import and export activity;

•general economic conditions, including but not limited to housing starts,
repair-and-remodeling activity, light commercial construction, inventory levels
of new and existing homes for sale, foreclosure rates, interest rates,
unemployment rates, household formation rates, prospective home buyers' access
to and cost of financing, and housing affordability, that ultimately affect
demand for our products;

•the highly competitive nature of our industry;

• decline in demand for our products due to competing technologies or materials, as well as changes in building code provisions;

•the duration and magnitude of impacts of the ongoing COVID-19 pandemic and
related variants, including the impact of any government mandates relating to
vaccines and testing;

•disruptions to information systems used to process and store customer, employee and supplier information, as well as the technology that drives our operations and other business processes;

•material disruptions and/or major equipment failures at our manufacturing facilities;

• labor disruptions, shortages of skilled and technical labor or increased labor costs;

•the need to formulate and successfully implement succession plans for key members of our management team;

•product shortages, loss of key suppliers and our dependence on third-party suppliers and manufacturers;

•the cost and availability of third-party transportation services used to deliver the goods we manufacture and distribute, as well as our raw materials;

•cost and availability of raw materials, including wood fiber and glues and resins;

•our ability to successfully and efficiently complete and integrate acquisitions;

•the concentration of our sales to a relatively small group of customers, as well as the financial condition and creditworthiness of our customers;

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•impairment of our long-lived assets, goodwill, and/or intangible assets;

•substantial ongoing investment costs, including those associated with acquisitions, and the difficulty of offsetting the fixed costs associated with these investments;

•our indebtedness, including the possibility that we may not generate sufficient
cash flows from operations or that future borrowings may not be available in
amounts sufficient to fulfill our debt obligations and fund other liquidity
needs;

•the covenants contained in our debt agreements;

• compliance with privacy and data security laws and regulations;

•the impacts of climate change, and the associated legislative and regulatory responses aimed at reducing climate change;

•cost of compliance with government regulations, including environmental regulations;

• adoption of tax reform legislation;

•exposure to product liability, product warranty, accidents, construction defects and other claims;

•fluctuations in the market for our shares; and

•the other factors described in “Item 1A. Risk Factors” of our 2021 Form 10-K.

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Contents

Our operating results

The following tables present our results of operations in dollars and as a percentage of sales for the three months ended March 31, 2022 and 2021:

                                                                                Three Months Ended
                                                                                     March 31
                                                                             2022                2021
                                                                                    (millions)
Sales                                                                    $  2,326.3          $ 1,821.3

Costs and expenses Materials, labor and other operating expenses (excluding depreciation) 1,729.9

            1,450.4
Depreciation and amortization                                                  20.5               19.5
Selling and distribution expenses                                             146.7              120.9
General and administrative expenses                                            26.1               25.3

Other (income) expense, net                                                    (2.5)              (0.1)
                                                                            1,920.7            1,616.1

Income from operations                                                   $    405.6          $   205.3

                                                                              (percentage of sales)
Sales                                                                         100.0  %           100.0  %

Costs and expenses
Materials, labor, and other operating expenses (excluding depreciation)        74.4  %            79.6  %
Depreciation and amortization                                                   0.9                1.1
Selling and distribution expenses                                               6.3                6.6
General and administrative expenses                                             1.1                1.4

Other (income) expense, net                                                    (0.1)                 -
                                                                               82.6  %            88.7  %

Income from operations                                                         17.4  %            11.3  %



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Sales Volumes and Prices

  Set forth below are historical U.S. housing starts data, segment sales volumes
and average net selling prices for the principal products sold by our Wood
Products segment, and sales mix and gross margin information for our BMD segment
for the three months ended March 31, 2022 and 2021.

                                                                                 Three Months Ended
                                                                                      March 31
                                                                              2022                   2021
                                                                                     (thousands)
U.S. Housing Starts (a)
Single-family                                                                  265.3                  255.4
Multi-family                                                                   129.5                  102.4
                                                                               394.8                  357.8

                                                                                     (thousands)
Segment Sales
Wood Products                                                          $     558,944            $   432,335
Building Materials Distribution                                            2,111,833              1,634,777

Intersegment eliminations                                                   (344,495)              (245,796)
Total sales                                                            $   2,326,282            $ 1,821,316

Wood Products                                                                        (millions)
Sales Volumes
Laminated veneer lumber (LVL) (cubic feet)                                       4.6                    4.4
I-joists (equivalent lineal feet)                                                 65                     72
Plywood (sq. ft.) (3/8" basis)                                                   317                    303

Wood Products                                                                    (dollars per unit)
Average Net Selling Prices
Laminated veneer lumber (LVL) (cubic foot)                             $       26.40            $     19.00
I-joists (1,000 equivalent lineal feet)                                        1,877                  1,319
Plywood (1,000 sq. ft.) (3/8" basis)                                             689                    556

                                                                          

(percent of Construction materials

                                                                                 Distribution sales)
Building Materials Distribution
Product Line Sales
Commodity                                                                       52.2    %              55.4  %
General line                                                                    29.1    %              28.9  %
Engineered wood                                                                 18.7    %              15.7  %

Gross margin percentage (b)                                                     18.0    %              15.1  %


_________________________________________

(a) Real WE data on housing starts reported by United States Census Bureau.

(b)  We define gross margin as "Sales" less "Materials, labor, and other
operating expenses (excluding depreciation)." Substantially all costs included
in "Materials, labor, and other operating expenses (excluding depreciation)" for
our BMD segment are for inventory purchased for resale. Gross margin percentage
is gross margin as a percentage of segment sales.

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Sales

  For the three months ended March 31, 2022, total sales increased $505.0
million, or 28%, to $2,326.3 million from $1,821.3 million during the three
months ended March 31, 2021. As described below, the increase in sales was
driven by the changes in sales prices and volumes for the products we
manufacture and distribute with single-family residential construction activity
being the key demand driver of our sales. In first quarter 2022, U.S. housing
starts increased 10%, with single-family starts up 4% from the same period in
2021. Average composite lumber and average composite panel prices for the three
months ended March 31, 2022 were 26% and 23% higher, respectively, than in the
same period in the prior year, as reflected by Random Lengths composite lumber
and panel pricing.

  Wood Products.  Sales, including sales to our BMD segment, increased $126.6
million, or 29%, to $558.9 million for the three months ended March 31, 2022,
from $432.3 million for the three months ended March 31, 2021. The increase in
sales was driven by higher sales prices for I-joists and LVL (collectively
referred to as EWP) of 42% and 39%, respectively, resulting in increased sales
of $36.4 million and $34.3 million, respectively. The increase in EWP pricing
was due to realizations of previously announced price increases and the
expiration of certain temporary price protection arrangements. Higher sales
prices for plywood of 24% resulted in increased sales of $42.1 million. In
addition, sales volumes for plywood and LVL increased 4% and 6%, respectively,
resulting in increased sales of $7.6 million and $5.4 million, respectively.
Price increases for laminated beam and OSB rimboard combined increased sales by
$10.1 million. These increases were offset partially by a 9% decrease in sales
volumes for I-joists, resulting in decreased sales of $8.2 million.

  Building Materials Distribution.  Sales increased $477.1 million, or 29%, to
$2,111.8 million for the three months ended March 31, 2022, from $1,634.8
million for the three months ended March 31, 2021. Compared with the same
quarter in the prior year, the overall increase in sales was driven by sales
price increases of 29%, as sales volumes were flat. By product line, commodity
sales increased 22%, or $195.9 million; general line product sales increased
30%, or $142.4 million; and sales of EWP (substantially all of which are sourced
through our Wood Products segment) increased 54%, or $138.8 million.

Costs and expenses

  Materials, labor, and other operating expenses (excluding depreciation)
increased $279.5 million, or 19%, to $1,729.9 million for the three months ended
March 31, 2022, compared with $1,450.4 million during the same period in the
prior year. In our Wood Products segment, materials, labor, and other operating
expenses increased due to higher per-unit costs of logs of approximately 9%
compared with first quarter 2021, as well as increased other manufacturing
costs. However, materials, labor, and other operating expenses as a percentage
of sales (MLO rate) in our Wood Products segment decreased by 990 basis points,
which was primarily due to higher EWP and plywood sales prices, resulting in
improved leveraging of wood fiber costs, labor costs, and other manufacturing
costs. In BMD, the increase in materials, labor, and other operating expenses
was driven by higher purchased materials costs as a result of higher product
prices, compared with first quarter 2021. However, the BMD segment MLO rate
improved 290 basis points compared with first quarter 2021 due primarily by
improved gross margin percentages across substantially all product lines, driven
by an increasing price environment during first quarter 2022.

  Depreciation and amortization expenses increased $1.0 million, or 5%, to $20.5
million for the three months ended March 31, 2022, compared with $19.5 million
during the same period in the prior year. The increase was due primarily to
purchases of property and equipment.

  Selling and distribution expenses increased $25.7 million, or 21%, to $146.7
million for the three months ended March 31, 2022, compared with $120.9 million
during the same period in the prior year, due primarily to higher
employee-related expenses, including base pay increases, special bonuses, and
sales and incentive compensation of $17.4 million, as well as higher shipping
and handling costs of $5.2 million. In addition, travel and entertainment
expenses and occupancy expenses increased $1.3 million and $1.2 million,
respectively.

  General and administrative expenses increased $0.8 million, or 3%, to $26.1
million for the three months ended March 31, 2022, compared with $25.3 million
for the same period in the prior year. The increase was due primarily to higher
employee wages and travel and entertainment expenses of $1.1 million and $0.5
million, respectively, offset partially by lower officer incentive compensation
accruals of $0.6 million.

  For the three months ended March 31, 2022 other (income) expense, net, was
$2.5 million of income, which primarily included earn-out income related to a
previous asset sale in our Wood Products segment.

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Income From Operations

Operating profit increased $200.4 million for $405.6 million for the three months ended March 31, 2022compared to $205.3 million for the three months ended March 31, 2021.

  Wood Products.  Segment income increased $93.1 million to $190.1 million for
the three months ended March 31, 2022, compared with $97.1 million for the three
months ended March 31, 2021. The increase in segment income was due primarily to
higher EWP and plywood sales prices. These increases in segment income were
offset partially by higher wood fiber costs and other manufacturing costs.

  Building Materials Distribution.  Segment income increased $105.7 million to
$225.9 million for the three months ended March 31, 2022, from $120.2 million
for the three months ended March 31, 2021. The increase in segment income was
driven by a gross margin increase of $133.6 million, resulting from improved
gross margins across substantially all product lines compared with first quarter
2021. The margin improvement was offset partially by increased selling and
distribution expenses and general and administrative expenses of $25.5 million
and $1.6 million, respectively.

  Corporate.  Unallocated corporate expenses decreased $1.6 million to $10.4
million for the three months ended March 31, 2022, from $12.0 million for the
same period in the prior year. The decrease was due primarily to lower officer
incentive compensation accruals.

Other

  Change in fair value of interest rate swaps. For information related to our
interest rate swaps, see the discussion under "Interest Rate Risk and Interest
Rate Swaps" of Note 2, Summary of Significant Accounting Policies, of
the Condensed Notes to Unaudited Quarterly Consolidated Financial Statements in
"Item 1. Financial Statements" of this Form 10-Q.

Provision for income tax

  For the three months ended March 31, 2022 and 2021, we recorded $98.9 million
and $51.4 million, respectively, of income tax expense and had an effective rate
of 24.6% and 25.6%, respectively. For both periods, the primary reason for the
difference between the federal statutory income tax rate of 21% and the
effective tax rate was the effect of state taxes.

Cash and capital resources

  We ended first quarter 2022 with $922.7 million of cash and cash equivalents
and $444.8 million of debt. At March 31, 2022, we had $1,268.7 million of
available liquidity (cash and cash equivalents and undrawn committed bank line
availability). We generated $173.8 million of cash during the three months ended
March 31, 2022, as cash provided by operations was offset partially by capital
spending, dividends paid on our common stock, and tax withholding payments on
stock-based awards. Further descriptions of our cash sources and uses for the
three month comparative periods are noted below.

  We believe that our cash flows from operations, combined with our current cash
levels and available borrowing capacity, will be adequate to fund debt service
requirements and provide cash, as required, to support our ongoing operations,
capital expenditures, lease obligations, working capital, income tax payments,
and to pay cash dividends to holders of our common stock over the next
12 months. We expect to fund our seasonal and intra-month working capital
requirements in 2022 from cash on hand and, if necessary, borrowings under our
revolving credit facility. We also estimate remitting between $165 million and
$185 million of income tax payments during second quarter 2022 for estimated
payments on 2022 income.

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Sources and Uses of Cash

  We generate cash primarily from sales of our products, as well as short-term
and long-term borrowings. Our primary uses of cash are for expenses related to
the manufacture and distribution of building products, including inventory
purchased for resale, wood fiber, labor, energy, and glues and resins. In
addition to paying for ongoing operating costs, we use cash to invest in our
business, service our debt and lease obligations, and return cash to our
shareholders through dividends or common stock repurchases. Below is a
discussion of our sources and uses of cash for operating activities, investing
activities, and financing activities.

                                        Three Months Ended
                                             March 31
                                        2022           2021
                                           (thousands)
Net cash provided by operations     $  198,945      $ 72,251
Net cash used for investment           (14,867)      (13,165)
Net cash used for financing            (10,264)       (7,486)



Operating Activities

  For the three months ended March 31, 2022, our operating activities generated
$198.9 million of cash, compared with $72.3 million of cash generated in the
same period in 2021. The $126.7 million increase in cash provided by operations
was due primarily to an improvement in income from operations. See "Our
Operating Results" in this Management's Discussion and Analysis of Financial
Condition and Results of Operations for more information related to factors
affecting our operating results. This increase in cash was offset partially by
an increase in working capital of $217.8 million during the three months ended
March 31, 2022, compared with a $147.4 million increase for the same period in
the prior year. In addition, cash paid for taxes, net of refunds received,
increased $3.2 million compared to the prior year.

  The increase in working capital during both periods was primarily attributable
to higher receivables and inventories, offset by an increase in accounts payable
and accrued liabilities. The increases in receivables in both periods primarily
reflect increased sales of approximately 49% and 46%, comparing sales for the
months of March 2022 and 2021 with sales for the months of December 2021 and
2020, respectively. Inventories increased during both periods primarily due to
increased cost of inventory purchased for resale and higher production costs for
our manufactured products. The increase in accounts payable and accrued
liabilities provided $147.4 million of cash during the three months ended
March 31, 2022, compared with $125.1 million in the same period a year ago. The
increase in accounts payable and accrued liabilities as of March 31, 2022 was
related to the increase in inventories and higher accrued rebates, offset
partially by employee incentive compensation payouts made during the quarter.
During the three months ended March 31, 2021, seasonal increases in inventory in
preparation for the spring building season and extended terms offered by major
vendors to our BMD segment led to the increase in accounts payable. This
increase in accounts payable was offset partially by decreases in accrued
liabilities, most notably annual employee incentive compensation payouts made
during first quarter 2021.

Investment Activities

  During the three months ended March 31, 2022 and 2021, we used $17.4 million
and $13.3 million, respectively, of cash for purchases of property and
equipment, including business improvement and quality/efficiency projects,
replacement and expansion projects, and ongoing environmental compliance. During
the three months ended March 31, 2022, we received $2.5 million of earn-out
income related to a previous asset sale in our Wood Products segment.

  We expect capital expenditures in 2022 to total approximately $110 million to
$130 million. We expect our capital spending in 2022 will be for business
improvement and quality/efficiency projects, replacement and expansion projects,
and ongoing environmental compliance. Our 2022 capital expenditures range
includes funding to complete our BMD organic expansions in Ohio, Kentucky, and
Minnesota, and a new dryer at our Chester, South Carolina, veneer and plywood
plant. This level of capital expenditures could increase or decrease as a result
of a number of factors, including acquisitions, efforts to further accelerate
organic growth, exercise of lease purchase options, our financial results,
future economic conditions, availability of engineering and construction
resources, and timing and availability of equipment purchases.

Fundraising activities

  During the three months ended March 31, 2022, our financing activities used
$10.3 million of cash, including $5.9 million for common stock dividend payments
and $3.9 million of tax withholding payments on stock-based awards. During the
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three months ended March 31, 2022, we did not borrow under our revolving credit
facility, and therefore have no borrowing outstanding on the facility as of
March 31, 2022.

  During the three months ended March 31, 2021, our financing activities used
$7.5 million of cash, including $4.4 million for common stock dividend payments
and $2.7 million of tax withholding payments on stock-based awards. During the
three months ended March 31, 2021, we did not borrow under our revolving credit
facility.

  Future dividend declarations, including amount per share, record date and
payment date, will be made at the discretion of our board of directors and will
depend upon, among other things, legal capital requirements and surplus, our
future operations and earnings, general financial condition, material cash
requirements, restrictions imposed by our asset-based credit facility and the
indenture governing our senior notes, applicable laws, and other factors that
our board of directors may deem relevant.

  For more information related to our debt transactions and structure, and our
dividend policy, see the discussion in Note 5, Debt, and Note 8, Stockholders'
Equity, respectively, of the Condensed Notes to Unaudited Quarterly Consolidated
Financial Statements in "Item 1. Financial Statements" of this Form 10-Q.

Other significant cash requirements

  For information about other material cash requirements, see Liquidity and
Capital Resources in "Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations" in our 2021 Form 10-K. As of March 31,
2022, there have been no material changes in other material cash requirements
outside the ordinary course of business since December 31, 2021.

Warranties

  Note 9, Debt, and Note 17, Commitments, Legal Proceedings and Contingencies,
and Guarantees, of the Notes to Consolidated Financial Statements in "Item 8.
Financial Statements and Supplementary Data" in our 2021 Form 10-K describe 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 March 31, 2022, there have
been no material changes to the guarantees disclosed in our 2021 Form 10-K.

Seasonal influences

  We are exposed to fluctuations in quarterly sales volumes and expenses due to
seasonal factors. These seasonal factors are common in the building products
industry. Seasonal changes in levels of building activity affect our building
products businesses, which are dependent on housing starts,
repair-and-remodeling activities, and light commercial construction activities.
We typically report lower sales volumes in the first and fourth quarters due to
the impact of poor weather on the construction market, and we generally have
higher sales volumes in the second and third quarters, reflecting an increase in
construction due to more favorable weather conditions. We typically have higher
working capital in the first and second quarters in preparation and response to
the building season. Seasonally cold weather increases costs, especially energy
consumption costs, at most of our manufacturing facilities.

Employees

  As of May 1, 2022, we had approximately 6,140 employees. Approximately 23% of
these employees work pursuant to collective bargaining agreements. As of May 1,
2022, we had ten collective bargaining agreements. Two agreements covering
approximately 780 employees at our Oakdale and Florien plywood plants expired on
July 15, 2021, but the terms and conditions of these agreements remain in effect
pending negotiation of new agreements. One agreement covering approximately 120
employees at our Canadian EWP facility is set to expire on December 31, 2022. We
may not be able to renew these agreements or may renew them on terms that are
less favorable to us than the current agreements. If any of these agreements are
not renewed or extended upon their termination, we could experience a material
labor disruption, strike, or significantly increased labor costs at one or more
of our facilities, either in the course of negotiations of a labor agreement or
otherwise. Labor disruptions or shortages could prevent us from meeting customer
demands or result in increased costs, thereby reducing our sales and
profitability.

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Disclosures of Financial Market Risks

  In the normal course of business, we are exposed to financial risks such as
changes in commodity prices, interest rates, and foreign currency exchange
rates. As of March 31, 2022, there have been no material changes to financial
market risks disclosed in our 2021 Form 10-K.

Environment

From March 31, 2022there have been no material changes to the environmental issues disclosed in our 2021 Form 10-K. and Results of Operations” in our 2021 Form 10-K.

Critical accounting estimates

  Critical accounting estimates are those that are most important to the
portrayal of our financial condition and results. These estimates require
management's most difficult, subjective, or complex judgments, often as a result
of the need to estimate matters that are inherently uncertain. We review the
development, selection, and disclosure of our critical accounting estimates with
the Audit Committee of our board of directors. For information about critical
accounting estimates, see Critical Accounting Estimates in "Item 7. Management's
Discussion and Analysis of Financial Condition and Results of Operations" in our
2021 Form 10-K. At March 31, 2022, there have been no material changes to our
critical accounting estimates from those disclosed in our 2021 Form 10-K.

New and recently adopted accounting standards

  For information related to new and recently adopted accounting standards, see
"New and Recently Adopted Accounting Standards" in Note 2, Summary of
Significant Accounting Policies, of the Condensed Notes to Unaudited Quarterly
Consolidated Financial Statements in "Item 1. Financial Statements" in this
Form 10-Q.

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