UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, ~~2022~~2023

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 1-7107

LOUISIANA-PACIFIC CORPORATION

(Exact name of registrant as specified in its charter)


Delaware						93-0609074
(State or other jurisdiction of incorporation or organization)						(IRS Employer Identification No.)

1610 West End Avenue, Suite 200, Nashville, TN 37203

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (615) 986 - 5600

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $1 par value	LPX	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	x	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ý

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: ~~71,695,455~~72,114,703 shares of common stock, $1 par value, outstanding as of October ~~31, 2022.~~30, 2023.

Except as otherwise specified and unless the context otherwise requires, references to "LP," the “Company,” “we,” “us,” and “our” refer to Louisiana-Pacific Corporation and its consolidated subsidiaries.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), provide a “safe harbor” for forward-looking statements to encourage companies to provide prospective information about their businesses and other matters as long as those statements are identified as forward-looking and are accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those discussed in ~~the~~such forward-looking statements. This quarterly report on Form 10-Q contains, and other reports and documents we file with, or furnish to, the Securities and Exchange Commission (SEC) may contain forward-looking statements. These statements are based upon the beliefs and assumptions of, and on information available to, our management.

The following statements are or may constitute forward-looking statements: (1) statements preceded by, followed by, or that include words like “may,” “will,” “could,” “should,” “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “project,” “potential,” “continue,” “likely,” or “future” or the negative or other variations thereof and (2) other statements regarding matters that are not historical facts, including without limitation, plans for product development, forecasts of future costs and expenditures, possible outcomes of legal proceedings, capacity expansion, and other growth initiatives, and the adequacy of reserves for loss contingencies.

Factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements include, but are not limited to, the following, which may be amplified by the invasion of Ukraine by Russia, the sanctions (including their duration), and other measures being imposed in response to this conflict, as well as any escalation or expansion of economic disruption or the conflict’s current scope:

•impacts from public health issues (including global pandemics, such as the ongoing COVID-19 pandemic) on the economy, demand for our products or our operations, including the actions and recommendations of governmental authorities to contain such public health issues;following:

•changes in governmental fiscal and monetary policies, including tariffs and levels of employment;

•changes in general and global economic conditions, including impacts from global pandemics, rising inflation, supply chain disruptions, and ongoing military conflicts including the ~~ongoing COVID-19 pandemic;~~conflict between Russia and Ukraine and the conflict in Israel and the surrounding areas;

•changes in the cost and availability of capital;

•changes in the level of home construction and repair and remodel activity;

•changes in competitive conditions and prices for our products;

•changes in the relationship between supply of and demand for building products;

•changes in the financial or business conditions of third-party wholesale distributors and dealers;

•changes in the relationship between the supply of and demand for raw materials, including wood fiber and resins, used in manufacturing our products;

•changes in the cost and availability of energy, primarily natural gas, electricity, and diesel fuel;

•changes in the cost and availability of transportation;

•impact of manufacturing our products internationally;

•difficulties in the launch or production ramp-up of newly introduced products;

•impacts from public health issues (including global pandemics) on the economy, demand for our products or our operations, including the actions and recommendations of governmental authorities to contain such public health issues;

•unplanned interruptions to our manufacturing operations, such as explosions, fires, inclement weather, natural disasters, accidents, equipment failures, labor shortages or disruptions, transportation interruptions, supply interruptions, public health issues (including pandemics and quarantines), riots, civil insurrection or social unrest, looting, protests, strikes, and street demonstrations;

•changes in other significant operating expenses;

•changes in currency values and exchange rates between the U.S. dollar and other currencies, particularly the Canadian dollar, Brazilian real, and Chilean peso;

•changes in, and compliance with, general and industry-specific laws and regulations, including environmental and health and safety laws and regulations, the U.S. Foreign Corrupt Practices Act and anti-bribery laws, laws related to our international business operations, and changes in building codes and standards;

•changes in tax laws and interpretations thereof;

•changes in circumstances giving rise to environmental liabilities or expenditures;

•warranty costs exceeding our warranty reserves;

•challenges to or exploitation of our intellectual property or other proprietary information by others in the industry;

•~~changes in the funding requirements of our defined benefit pension plans;~~

•the resolution of existing and future product-related litigation, environmental proceedings and remediation efforts, and other legal or environmental proceedings or matters;

•the effect of covenants and events of default contained in our debt instruments;

•the amount and timing of any repurchases of our common stock and the payment of dividends on our common stock, which will depend on market and business conditions and other considerations;

•cybersecurity events affecting our information technology systems or those of our third-party providers and the related costs and impact of any disruption on our business;and

•acts of public authorities, war, political or civil unrest, natural disasters, fire, floods, earthquakes, inclement weather, and other matters beyond our control.

In addition to the foregoing and any risks and uncertainties specifically identified in the text surrounding forward-looking statements, any statements in the reports and other documents filed or furnished by us with the SEC that warn of risks or uncertainties associated with future results, events, or circumstances identify important factors that could cause actual results, events, and circumstances to differ materially from those reflected in the forward-looking statements.

The forward-looking statements that we make, or that are made by others on our behalf, are based on our knowledge of our business and our operating environment and assumptions that we believe to be, or will believe to be, reasonable when such forward-looking statements ~~are~~were or will be made. As a consequence of the factors described above, the other risks, uncertainties, and factors we disclose below and in the reports and other documents filed by us with the SEC, other risks not known to us at this time, changes in facts, assumptions not being realized or other circumstances, our actual results may differ materially from those discussed in or implied or contemplated by our forward-looking statements. Consequently, this cautionary statement qualifies all forward-looking statements we make, or that are made on our behalf, including those made herein and incorporated by reference herein. We cannot assure you that the results or developments expected or anticipated by us will be realized or, even if substantially realized, that those results or developments will result in the expected consequences for us or affect us, our business, our operations or our operating results in the manner or to the extent we expect. We caution readers not to place undue reliance on such forward-looking statements, which speak only as of their dates. We undertake no obligation to revise or update any of the forward-looking statements to reflect subsequent events or circumstances except to the extent required by applicable law.

ABOUT THIRD-PARTY INFORMATION

In this quarterly report on Form 10-Q, we rely on, and refer to, information regarding industry data obtained from market research, publicly available information, industry publications, U.S. government sources, and other third parties. Although we believe the information is reliable, we cannot guarantee the accuracy or completeness of the information and have not independently verified it.

PART I - FINANCIAL INFORMATION

ITEM 1.FINANCIAL STATEMENTS

Condensed Consolidated Statements of Income

Dollar and share amounts in millions, except per share amounts

(Unaudited)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Net sales	Net sales	$	852	$	1,018	$	3,149	$	3,080	Net sales	$	728	$	852	$	1,923	$	3,149
Cost of sales	Cost of sales	(620)		(513)		(1,778)		(1,423)		Cost of sales	(514)		(620)		(1,489)		(1,778)
Gross profit	Gross profit	232		505		1,370		1,657		Gross profit	214		232		434		1,370
Selling, general, and administrative expenses	Selling, general, and administrative expenses	(67)		(58)		(196)		(155)		Selling, general, and administrative expenses	(58)		(67)		(191)		(196)
Impairment of long-lived assets, net										Impairment of long-lived assets, net	(1)		—		(25)		—

Other operating credits and charges, net	Other operating credits and charges, net	7		2		17		5		Other operating credits and charges, net	6		7		(20)		17
Income from operations	Income from operations	172		448		1,191		1,507		Income from operations	161		172		198		1,191
Interest expense	Interest expense	(3)		(4)		(9)		(12)		Interest expense	(4)		(3)		(9)		(9)
Investment income	Investment income	5		—		8		1		Investment income	4		5		10		8
Other non-operating items	Other non-operating items	(3)		(2)		(11)		(13)		Other non-operating items	—		(3)		(17)		(11)
Income before income taxes	Income before income taxes	172		442		1,178		1,482		Income before income taxes	160		172		183		1,178
Provision for income taxes	Provision for income taxes	(44)		(111)		(284)		(350)		Provision for income taxes	(44)		(44)		(66)		(284)
Equity in unconsolidated affiliate	Equity in unconsolidated affiliate	1		1		4		3		Equity in unconsolidated affiliate	1		1		3		4
Income from continuing operations	Income from continuing operations	129		332		898		1,134		Income from continuing operations	118		129		119		898
Income from discontinued operations, net of income taxes	Income from discontinued operations, net of income taxes	97		33		196		47		Income from discontinued operations, net of income taxes	—		97		—		196
Net income	Net income	$	226	$	365	$	1,093	$	1,182	Net income	$	118	$	226	$	119	$	1,093
Net loss attributed to noncontrolling interest		—		—		1		1
Net loss attributed to non-controlling interest										Net loss attributed to non-controlling interest	—		—		—		1
Net income attributed to LP	Net income attributed to LP	$	226	$	365	$	1,094	$	1,183	Net income attributed to LP	$	118	$	226	$	119	$	1,094

Net income attributed to LP per share of common stock:	Net income attributed to LP per share of common stock:									Net income attributed to LP per share of common stock:
Income per share continuing operations - basic	Income per share continuing operations - basic	$	1.75	$	3.55	$	11.23	$	11.34	Income per share continuing operations - basic	$	1.63	$	1.75	$	1.65	$	11.23
Income per share discontinued operations - basic	Income per share discontinued operations - basic	1.32		0.35		2.45		0.47		Income per share discontinued operations - basic	—		1.32		—		2.45
Net income per share - basic		$	3.07	$	3.90	$	13.67	$	11.81
Net income attributed to LP per share - basic										Net income attributed to LP per share - basic	$	1.63	$	3.07	$	1.65	$	13.67

Income per share continuing operations - diluted	Income per share continuing operations - diluted	$	1.74	$	3.52	$	11.16	$	11.26	Income per share continuing operations - diluted	$	1.63	$	1.74	$	1.65	$	11.16
Income per share discontinued operations - diluted	Income per share discontinued operations - diluted	1.31		0.35		2.43		0.47		Income per share discontinued operations - diluted	—		1.31		—		2.43
Net income per share - diluted		$	3.05	$	3.87	$	13.59	$	11.73
Net income attributed to LP per share - diluted										Net income attributed to LP per share - diluted	$	1.63	$	3.05	$	1.65	$	13.59

Average shares of common stock used to compute net income per share:
Average shares of common stock used to compute Net income per share:										Average shares of common stock used to compute Net income per share:
Basic	Basic	74		94		80		100		Basic	72		74		72		80
Diluted	Diluted	74		94		80		101		Diluted	72		74		72		80

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

Condensed Consolidated Statements of Comprehensive Income

Dollar amounts in millions

(Unaudited)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Net income	Net income	$	226	$	365	$	1,093	$	1,182	Net income	$	118	$	226	$	119	$	1,093
Other comprehensive income, net of tax
Other comprehensive income (loss), net of tax										Other comprehensive income (loss), net of tax
Foreign currency translation adjustments	Foreign currency translation adjustments	(13)		(21)		(22)		(21)		Foreign currency translation adjustments	(19)		(13)		(3)		(22)

Changes in defined benefit pension plans	Changes in defined benefit pension plans	3		2		6		3		Changes in defined benefit pension plans	—		3		4		6
Other comprehensive income (loss), net of tax	Other comprehensive income (loss), net of tax	(9)		(19)		(16)		(18)		Other comprehensive income (loss), net of tax	(19)		(9)		2		(16)
Comprehensive income	Comprehensive income	216		346		1,077		1,164		Comprehensive income	99		216		120		1,077
Comprehensive loss associated with noncontrolling interest		—		—		1		1
Comprehensive loss associated with non-controlling interest										Comprehensive loss associated with non-controlling interest	—		—		—		1
Comprehensive income attributed to LP	Comprehensive income attributed to LP	$	216	$	346	$	1,078	$	1,165	Comprehensive income attributed to LP	$	99	$	216	$	121	$	1,078

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

Condensed Consolidated Balance Sheets

Dollar amounts in millions

(Unaudited)


		September 30, 2022		December 31, 2021			September 30, 2023		December 31, 2022
ASSETS	ASSETS					ASSETS
Cash and cash equivalents	Cash and cash equivalents	$	469	$	358	Cash and cash equivalents	$	160	$	369
Receivables, net of allowance for doubtful accounts of $1 million as of September 30, 2022, and December 31, 2021		171		169
Receivables, net of allowance for doubtful accounts of $3 million and $1 million as of September 30, 2023, and December 31, 2022, respectively						Receivables, net of allowance for doubtful accounts of $3 million and $1 million as of September 30, 2023, and December 31, 2022, respectively	181		127
Inventories	Inventories	337		278		Inventories	379		337
Prepaid expenses and other current assets	Prepaid expenses and other current assets	24		17		Prepaid expenses and other current assets	25		20
Current assets of discontinued operations		—		68

Total current assets	Total current assets	1,001		890		Total current assets	745		854

Timber and timberlands	Timber and timberlands	39		42		Timber and timberlands	32		40
Property, plant, and equipment, net	Property, plant, and equipment, net	1,215		1,039		Property, plant, and equipment, net	1,512		1,326
Operating lease assets		44		50
Operating lease assets, net						Operating lease assets, net	34		44
Goodwill and other intangible assets	Goodwill and other intangible assets	37		39		Goodwill and other intangible assets	27		36
Investments in and advances to affiliates	Investments in and advances to affiliates	7		7		Investments in and advances to affiliates	6		6
Restricted cash	Restricted cash	14		13		Restricted cash	—		14
Other assets	Other assets	23		25		Other assets	19		24
Deferred tax asset	Deferred tax asset	4		2		Deferred tax asset	4		7
Long-term assets of discontinued operations		—		87

Total assets	Total assets	$	2,383	$	2,194	Total assets	$	2,380	$	2,350

LIABILITIES AND EQUITY
LIABILITIES AND STOCKHOLDERS' EQUITY						LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued liabilities	Accounts payable and accrued liabilities	$	342	$	304	Accounts payable and accrued liabilities	$	264	$	317
Income tax payable		88		13
Current liabilities of discontinued operations		—		34
Income taxes payable						Income taxes payable	2		19

Total current liabilities	Total current liabilities	430		351		Total current liabilities	266		336

Long-term debt	Long-term debt	346		346		Long-term debt	347		346
Deferred income taxes	Deferred income taxes	107		86		Deferred income taxes	152		113
Non-current operating lease liabilities	Non-current operating lease liabilities	40		44		Non-current operating lease liabilities	35		41
Contingency reserves, excluding current portion	Contingency reserves, excluding current portion	26		24		Contingency reserves, excluding current portion	25		26
Other long-term liabilities	Other long-term liabilities	69		63		Other long-term liabilities	53		53
Long-term liabilities of discontinued operations		—		42

Total liabilities	Total liabilities	$	1,019	$	955	Total liabilities	$	878	$	916

Redeemable noncontrolling interest	Redeemable noncontrolling interest	3		4		Redeemable noncontrolling interest	—		—

Stockholders’ equity:	Stockholders’ equity:					Stockholders’ equity:
Common stock, $1 par value, 200,000,000 shares authorized; 87,986,865 and 71,690,061 shares issued and outstanding, respectively, as of September 30, 2022; and 102,415,883 and 85,636,154 shares issued and outstanding, respectively, as of December 31, 2021		88		102
Common stock, $1 par value, 200,000,000 shares authorized; 87,986,865 and 72,114,051 shares issued and outstanding, respectively, as of September 30, 2023; and 87,986,865 and 71,748,200 shares issued and outstanding, respectively, as of December 31, 2022						Common stock, $1 par value, 200,000,000 shares authorized; 87,986,865 and 72,114,051 shares issued and outstanding, respectively, as of September 30, 2023; and 87,986,865 and 71,748,200 shares issued and outstanding, respectively, as of December 31, 2022	88		88
Additional paid-in capital	Additional paid-in capital	459		458		Additional paid-in capital	460		462
Retained earnings	Retained earnings	1,395		1,239		Retained earnings	1,438		1,371
Treasury stock, 16,296,804 shares and 16,779,729 shares, at cost as of September 30, 2022, and December 31, 2021, respectively		(390)		(390)
Treasury stock, 15,872,814 shares and 16,238,665 shares, at cost as of September 30, 2023, and December 31, 2022, respectively						Treasury stock, 15,872,814 shares and 16,238,665 shares, at cost as of September 30, 2023, and December 31, 2022, respectively	(387)		(388)
Accumulated comprehensive loss	Accumulated comprehensive loss	(190)		(174)		Accumulated comprehensive loss	(98)		(99)
Total stockholders’ equity	Total stockholders’ equity	1,361		1,235		Total stockholders’ equity	1,502		1,433
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	2,383	$	2,194	Total liabilities and stockholders’ equity	$	2,380	$	2,350

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

Condensed Consolidated Statements of Cash Flows

Dollar amounts in millions

(Unaudited)


		Nine Months Ended September 30,						Nine Months Ended September 30,
			2022		2021				2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES:	CASH FLOWS FROM OPERATING ACTIVITIES:						CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	Net income		$	1,093	$	1,182	Net income		$	119	$	1,093
Adjustments to net income:	Adjustments to net income:						Adjustments to net income:
Depreciation and amortization	Depreciation and amortization		99		88		Depreciation and amortization		87		99
Gain on sale of assets			(157)		—
Impairment of goodwill and long-lived assets							Impairment of goodwill and long-lived assets		25		—
Gain on sale of assets, net							Gain on sale of assets, net		(6)		(157)
Pension loss due to settlement							Pension loss due to settlement		6		4

Deferred taxes	Deferred taxes		27		15		Deferred taxes		44		27
Loss on early debt extinguishment			—		11
Other adjustments, net	Other adjustments, net		34		7		Other adjustments, net		48		29
Changes in assets and liabilities (net of acquisitions and divestitures):	Changes in assets and liabilities (net of acquisitions and divestitures):						Changes in assets and liabilities (net of acquisitions and divestitures):
Receivables	Receivables		(20)		(59)		Receivables		(52)		(20)
Inventories							Inventories		(46)		(72)
Prepaid expenses and other current assets	Prepaid expenses and other current assets		(11)		(5)		Prepaid expenses and other current assets		(5)		(11)
Inventories			(72)		(66)
Accounts payable and accrued liabilities	Accounts payable and accrued liabilities		40		64		Accounts payable and accrued liabilities		(36)		40
Income taxes payable, net of receivables	Income taxes payable, net of receivables		70		46		Income taxes payable, net of receivables		(26)		70
Net cash provided by operating activities	Net cash provided by operating activities		1,103		1,283		Net cash provided by operating activities		157		1,103
CASH FLOWS FROM INVESTING ACTIVITIES:	CASH FLOWS FROM INVESTING ACTIVITIES:						CASH FLOWS FROM INVESTING ACTIVITIES:
Property, plant, and equipment additions	Property, plant, and equipment additions		(282)		(133)		Property, plant, and equipment additions		(236)		(282)
Acquisition of facility assets							Acquisition of facility assets		(80)		—
Proceeds from sales of assets	Proceeds from sales of assets		265		—		Proceeds from sales of assets		9		—
Other investing activities			3		3
Proceeds from divestiture of business							Proceeds from divestiture of business		—		265
Other investing activities, net							Other investing activities, net		(4)		3
Net cash used in investing activities	Net cash used in investing activities		(14)		(131)		Net cash used in investing activities		(312)		(14)
CASH FLOWS FROM FINANCING ACTIVITIES:	CASH FLOWS FROM FINANCING ACTIVITIES:						CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowing of long-term debt	Borrowing of long-term debt		—		350		Borrowing of long-term debt		80		—
Repayment of long-term debt, including redemption premium			—		(359)
Repayment of long-term debt							Repayment of long-term debt		(80)		—
Payment of cash dividends	Payment of cash dividends		(53)		(50)		Payment of cash dividends		(52)		(53)
Purchase of stock	Purchase of stock		(900)		(987)		Purchase of stock		—		(900)
Other financing activities	Other financing activities		(15)		(12)		Other financing activities		(10)		(15)
Net cash used in financing activities	Net cash used in financing activities		(968)		(1,058)		Net cash used in financing activities		(61)		(968)
EFFECT OF EXCHANGE RATE ON CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	EFFECT OF EXCHANGE RATE ON CASH, CASH EQUIVALENTS, AND RESTRICTED CASH		(11)		(10)		EFFECT OF EXCHANGE RATE ON CASH, CASH EQUIVALENTS, AND RESTRICTED CASH		(6)		(11)
Net increase in cash, cash equivalents, and restricted cash			111		84
Net (decrease) increase in cash, cash equivalents, and restricted cash							Net (decrease) increase in cash, cash equivalents, and restricted cash		(223)		111
Cash, cash equivalents, and restricted cash at beginning of period	Cash, cash equivalents, and restricted cash at beginning of period		371		535		Cash, cash equivalents, and restricted cash at beginning of period		383		371
Cash, cash equivalents, and restricted cash at end of period	Cash, cash equivalents, and restricted cash at end of period		$	482	$	620	Cash, cash equivalents, and restricted cash at end of period		$	160	$	482

Supplemental cash flow information:	Supplemental cash flow information:						Supplemental cash flow information:
Cash paid for income taxes, net of cash received			$	242	$	305
Cash paid for interest, net of cash received			$	14	$	16
Cash paid for income taxes, net							Cash paid for income taxes, net		$	49	$	242
Cash paid for interest, net							Cash paid for interest, net		$	14	$	14
Unpaid capital expenditures	Unpaid capital expenditures		$	44	$	42	Unpaid capital expenditures		$	17	$	44

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

Condensed Consolidated Statements of ~~Stockholders'~~Stockholders’ Equity

Dollar and share amounts in millions, except per share amounts

(Unaudited)


		Common Stock			Treasury Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Comprehensive Loss		Total Stockholders' Equity			Common Stock			Treasury Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Comprehensive Loss		Total Stockholders' Equity
		Shares	Amount		Shares	Amount											Shares	Amount		Shares	Amount
Balance, December 31, 2021		102	$	102	17	$	(390)	$	458	$	1,239	$	(174)	$	1,235
Balance, December 31, 2022																Balance, December 31, 2022	88	$	88	16	$	(388)	$	462	$	1,371	$	(99)	$	1,433
Net income attributed to LP	Net income attributed to LP	—	—		—	—		—		484		—		484		Net income attributed to LP	—	—		—	—		—		21		—		21
Dividends paid ($0.22 per share)		—	—		—	—		—		(19)		—		(19)
Dividends paid ($0.24 per share)																Dividends paid ($0.24 per share)	—	—		—	—		—		(17)		—		(17)
Issuance of shares under stock plans	Issuance of shares under stock plans	—	—		(1)	14		(14)		—		—		—		Issuance of shares under stock plans	—	—		—	10		(10)		—		—		—
Taxes paid related to net settlement of stock-based awards	Taxes paid related to net settlement of stock-based awards	—	—		—	(15)		—		—		—		(15)		Taxes paid related to net settlement of stock-based awards	—	—		—	(10)		—		—		—		(10)
Purchase of stock	Purchase of stock	(2)	(2)		—	—		—		(102)		—		(104)		Purchase of stock	—	—		—	—		—		—		—		—
Compensation expense associated with stock-based compensation	Compensation expense associated with stock-based compensation	—	—		—	—		7		—		—		7		Compensation expense associated with stock-based compensation	—	—		—	—		4		—		—		4
Other comprehensive income	Other comprehensive income	—	—		—	—		—		—		24		24		Other comprehensive income	—	—		—	—		—		—		19		19
Balance, March 31, 2022		101	$	101	16	$	(391)	$	451	$	1,601	$	(149)	$	1,613
Balance, March 31, 2023																Balance, March 31, 2023	88	$	88	16	$	(388)	$	455	$	1,375	$	(80)	$	1,450
Net loss attributed to LP																Net loss attributed to LP	—	—		—	—		—		(20)		—		(20)
Dividends paid ($0.24 per share)																Dividends paid ($0.24 per share)	—	—		—	—		—		(17)		—		(17)
Issuance of shares under stock plans																Issuance of shares under stock plans	—	—		—	2		—		—		—		2
Taxes paid related to net settlement of stock-based awards																Taxes paid related to net settlement of stock-based awards	—	—		—	(1)		—		—		—		(1)
Purchase of stock																Purchase of stock	—	—		—	—		—		—		—		—
Compensation expense associated with stock-based compensation																Compensation expense associated with stock-based compensation	—	—		—	—		3		—		—		3
Other comprehensive income																Other comprehensive income	—	—		—	—		—		—		1		1
Balance, June 30, 2023																Balance, June 30, 2023	88	$	88	16	$	(387)	$	458	$	1,337	$	(78)	$	1,419
Net income attributed to LP	Net income attributed to LP	—	—		—	—		—		384		—		384		Net income attributed to LP	—	—		—	—		—		118		—		118
Dividends paid ($0.22 per share)		—	—		—	—		—		(18)		—		(18)
Dividends paid ($0.24 per share)																Dividends paid ($0.24 per share)	—	—		—	—		—		(17)		—		(17)
Issuance of shares under stock plans	Issuance of shares under stock plans	—	—		—	2		—		—		—		2		Issuance of shares under stock plans	—	—		—	—		—		—		—		—
Taxes paid related to net settlement of stock-based awards	Taxes paid related to net settlement of stock-based awards	—	—		—	(1)		—		—		—		(1)		Taxes paid related to net settlement of stock-based awards	—	—		—	—		—		—		—		—
Purchase of stock	Purchase of stock	(7)	(7)		—	—		—		(463)		—		(471)		Purchase of stock	—	—		—	—		—		—		—		—
Compensation expense associated with stock-based compensation	Compensation expense associated with stock-based compensation	—	—		—	—		7		—		—		7		Compensation expense associated with stock-based compensation	—	—		—	—		2		—		—		2
Other comprehensive loss	Other comprehensive loss	—	—		—	—		—		—		(31)		(31)		Other comprehensive loss	—	—		—	—		—		—		(19)		(19)
Balance, June 30, 2022		94	$	94	16	$	(390)	$	457	$	1,505	$	(181)	$	1,484
Net income attributed to LP		—	—		—	—		—		226		—		226
Dividends paid (0.22 per share)		—	—		—	—		—		(16)		—		(16)
Issuance of shares under stock plans		—	—		—	—		—		—		—		—
Purchase of stock		(6)	(6)		—	—		—		(320)		—		(325)
Compensation expense associated with stock-based compensation		—	—		—	—		2		—		—		2
Other comprehensive loss		—	—		—	—		—		—		(9)		(9)
Balance, September 30, 2022		88	$	88	16	$	(390)	$	459	$	1,395	$	(190)	$	1,361
Balance, September 30, 2023																Balance, September 30, 2023	88	$	88	16	$	(387)	$	460	$	1,438	$	(98)	$	1,502

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.


		Common Stock			Treasury Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Comprehensive Loss		Total Stockholders' Equity			Common Stock			Treasury Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Comprehensive Loss		Total Stockholders' Equity
		Shares	Amount		Shares	Amount											Shares	Amount		Shares	Amount
Balance, December 31, 2020		124	$	124	17	$	(397)	$	452	$	1,206	$	(151)	$	1,234
Balance, December 31, 2021																Balance, December 31, 2021	102	$	102	17	$	(390)	$	458	$	1,239	$	(174)	$	1,235
Net income attributed to LP	Net income attributed to LP	—	—		—	—		—		320		—		320		Net income attributed to LP	—	—		—	—		—		484		—		484
Dividends paid ($0.16 per share)		—	—		—	—		—		(17)		—		(17)
Dividends paid ($0.22 per share)																Dividends paid ($0.22 per share)	—	—		—	—		—		(19)		—		(19)
Issuance of shares under stock plans																Issuance of shares under stock plans	—	—		(1)	14		(14)		—		—		—
Taxes paid related to net settlement of stock-based awards																Taxes paid related to net settlement of stock-based awards	—	—		—	(15)		—		—		—		(15)
Purchase of stock																Purchase of stock	(2)	(2)		—	—		—		(102)		—		(104)
Compensation expense associated with stock-based compensation																Compensation expense associated with stock-based compensation	—	—		—	—		7		—		—		7
Other comprehensive income																Other comprehensive income	—	—		—	—		—		—		24		24
Balance, March 31, 2022																Balance, March 31, 2022	101	$	101	16	$	(391)	$	451	$	1,601	$	(149)	$	1,613
Net income attributed to LP																Net income attributed to LP	—	—		—	—		—		384		—		384
Dividends paid ($0.22 per share)																Dividends paid ($0.22 per share)	—	—		—	—		—		(18)		—		(18)
Issuance of shares under stock plans	Issuance of shares under stock plans	—	—		—	11		(11)		—		—		—		Issuance of shares under stock plans	—	—		—	2		—		—		—		2
Taxes paid related to net settlement of stock-based awards	Taxes paid related to net settlement of stock-based awards	—	—		—	(6)		—		—		—		(6)		Taxes paid related to net settlement of stock-based awards	—	—		—	(1)		—		—		—		(1)
Purchase of stock	Purchase of stock	(2)	(2)		—	—		—		(120)		—		(122)		Purchase of stock	(7)	(7)		—	—		—		(463)		—		(471)
Compensation expense associated with stock-based compensation	Compensation expense associated with stock-based compensation	—	—		—	—		1		—		—		1		Compensation expense associated with stock-based compensation	—	—		—	—		7		—		—		7
Other comprehensive loss	Other comprehensive loss	—	—		—	—		—		—		(6)		(6)		Other comprehensive loss	—	—		—	—		—		—		(31)		(31)
Balance, March 31, 2021		121	$	121	17	$	(393)	$	443	$	1,390	$	(157)	$	1,404
Balance, June 30, 2022																Balance, June 30, 2022	94	$	94	16	$	(390)	$	457	$	1,505	$	(181)	$	1,484
Net income attributed to LP	Net income attributed to LP	—	—		—	—		—		498		—		498		Net income attributed to LP	—	—		—	—		—		226		—		226
Dividends paid ($0.16 per share)		—	—		—	—		—		(16)		—		(16)
Dividends paid ($0.22 per share)																Dividends paid ($0.22 per share)	—	—		—	—		—		(16)		—		(16)
Issuance of shares under stock plans	Issuance of shares under stock plans	—	—		—	2		(1)		—		—		1		Issuance of shares under stock plans	—	—		—	—		—		—		—		—
Taxes paid related to net settlement of stock-based awards																Taxes paid related to net settlement of stock-based awards	—	—		—	—		—		—		—		—
Purchase of stock	Purchase of stock	(7)	(7)		—	—		—		(458)		—		(465)		Purchase of stock	(6)	(6)		—	—		—		(320)		—		(325)
Compensation expense associated with stock-based compensation	Compensation expense associated with stock-based compensation	—	—		—	—		4		—		—		4		Compensation expense associated with stock-based compensation	—	—		—	—		2		—		—		2
Other comprehensive income		—	—		—	—		—		—		8		8
Balance, June 30, 2021		114	$	114	17	$	(390)	$	446	$	1,413	$	(149)	$	1,433
Net income attributed to LP		—	—		—	—		—		365		—		365
Dividends paid ($0.18 per share)		—	—		—	—		—		(17)		—		(17)

Purchase of stock		(7)	(7)		—			—		(392)		—		(399)
Compensation expense associated with stock-based compensation		—	—		—	—		5		—		—		5
Other comprehensive income		—	—		—	—		—		—		(19)		(19)
Balance, September 30, 2021		107	$	107	17	$	(390)	$	451	$	1,369	$	(168)	$	1,368
Other comprehensive loss																Other comprehensive loss	—	—		—	—		—		—		(9)		(9)
Balance, September 30, 2022																Balance, September 30, 2022	88	$	88	16	$	(390)	$	459	$	1,395	$	(190)	$	1,361

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. NATURE OF OPERATIONS AND BASIS FOR PRESENTATION

Nature of Operations

Louisiana-Pacific Corporation and our subsidiaries are a leading provider of high-performance building solutions that meet the demands of builders, remodelers, and homeowners worldwide. Serving the new home construction, repair and remodeling, and outdoor structures markets, we have leveraged our expertise to become an industry leader known for innovation, quality, reliability, and ~~reliability. The Company~~ ~~operates 22 plants in our continuing operations across the U.S., Canada, Chile, and Brazil through foreign subsidiaries, and it operates facilities through joint ventures.~~sustainability. The principal customers for our building solutions are retailers, wholesalers, and ~~homebuilding~~home building and industrial businesses in North America and South America, with limited sales to Asia, Australia, and Europe. The Company operates 23 plants across the U.S., Canada, Chile, and Brazil through foreign subsidiaries, and operates additional facilities through a joint venture. References to "LP," the "Company," "we," "our," and "us" refer to Louisiana-Pacific Corporation and its consolidated subsidiaries as a whole.

~~In August~~During the year ended December 31, 2022, LPwe sold our 50% equity interest in two joint ventures that produce I-joists, and ~~one of its wholly-owned subsidiaries~~we sold the remaining assets related to the Engineered Wood ~~Products~~Product (EWP) ~~segment to Pacific Woodtech Corporation, a Washington corporation, and Pacific Woodtech Canada Holdings Limited, a British Columbia limited company (collectively,~~segment. Accordingly, the ~~Purchaser)~~ for $217 million in gross cash proceeds after taking into account working capital adjustments (including $3 million received subsequent to September 30, 2022). Upon closing, the Company entered into a transition services agreement (TSA) with the Purchaser, pursuant to which the Company agreed to support the various activities of the EWP segment for a period not to exceed eight months. We have classified the related assets and liabilities associated with the EWP segment as discontinued operations in our Condensed Consolidated Balance Sheets. The results of our previously owned EWP segment have been presented as discontinued operations in our Condensed Consolidated Statements of Income for all periods presented. See ~~Note~~"Note 7 –Discontinued ~~Operations~~Operations" for additional information.

In May 2023, we acquired a manufacturing facility in Wawa, Ontario, Canada from Wawa OSB, Inc. a subsidiary of Forex Inc., for $80 million, financed by a combination of cash on hand and availability under the Amended Credit Facility (defined below). The manufacturing facility is expected to be converted into an LP® SmartSide® Trim & Siding mill. We are evaluating project schedules and market demand to determine when construction will begin. The facility will remain shut down until such construction is completed.

Basis for Presentation

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP) for interim financial information. Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete consolidated financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and are of a normal and recurring nature. These Condensed Consolidated Financial Statements and related Notes should be read in conjunction with our annual report on Form 10-K for the fiscal year ended December 31, ~~2021,~~2022, filed with the SEC on February ~~22, 2022 (2021~~21, 2023 (2022 Annual Report on Form 10-K). Results of operations for interim periods are not necessarily indicative of results to be expected for an entire year.

NOTE 2. REVENUE

The following table presents our reportable segment revenues, disaggregated by revenue source. We disaggregate revenue from contracts with customers into major product lines. We have determined that disaggregating revenue into these categories ~~achieves the disclosure objective to depict~~depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors.

As noted in the segment reporting information in ~~Note~~“Note 17 - Selected Segment Data” below, our reportable segments are Siding, Oriented Strand Board (OSB), and South ~~America~~America. The following tables set forth our revenue by segment (dollar amounts in millions).


Three Months Ended September 30, 2022
By product type and family:		Siding		OSB		South America		Other		Inter-segment		Total
Three Months Ended September 30, 2023														Three Months Ended September 30, 2023
By Product type and family:														By Product type and family:	Siding		OSB		South America		Other		Inter-segment		Total
Value-add	Value-add													Value-add
Siding Solutions	Siding Solutions	$	393	$	—	$	6	$	—	$	—	$	399	Siding Solutions	$	342	$	—	$	5	$	—	$	—	$	347
OSB - Structural Solutions	OSB - Structural Solutions	—		205		47		—		—		251		OSB - Structural Solutions	—		174		40		—		—		213
		393		205		53		—		—		650			342		174		44		—		—		560
Commodity	Commodity													Commodity
OSB - commodity	OSB - commodity	—		180		—		—		—		180		OSB - commodity	—		157		—		—		—		157

Other	Other													Other
Other products	Other products	1		3		—		17		—		22		Other products	2		5		—		4		—		11
		$	394	$	388	$	53	$	17	$	(1)	$	852		$	345	$	335	$	45	$	4	$	—	$	728


Three Months Ended September 30, 2021
By product type and family:		Siding		OSB		South America		Other		Inter-segment		Total
Three Months Ended September 30, 2022														Three Months Ended September 30, 2022
By Product type and family:														By Product type and family:	Siding		OSB		South America		Other		Inter-segment		Total
Value-add	Value-add													Value-add
Siding Solutions	Siding Solutions	$	310	$	—	$	9	$	—	$	—	$	319	Siding Solutions	$	393	$	—	$	6	$	—	$	—	$	399
OSB - Structural Solutions	OSB - Structural Solutions	—		307		65		—		—		372		OSB - Structural Solutions	—		205		47		—		—		251
		310		307		75		—		—		691			393		205		53		—		—		650
Commodity	Commodity													Commodity
OSB - commodity	OSB - commodity	—		290		—		—		—		290		OSB - commodity	—		180		—		—		—		180

Other	Other													Other
Other products	Other products	3		4		2		30		(1)		38		Other products	1		3		—		17		—		22
		$	312	$	600	$	76	$	30	$	(1)	$	1,018		$	394	$	388	$	53	$	17	$	(1)	$	852


Nine Months Ended September 30, 2022
By product type and family:		Siding		OSB		South America		Other		Inter-segment		Total
Nine Months Ended September 30, 2023														Nine Months Ended September 30, 2023
By Product type and family:														By Product type and family:	Siding		OSB		South America		Other		Inter-segment		Total
Value-add	Value-add													Value-add
Siding Solutions	Siding Solutions	$	1,079	$	—	$	18	$	—	$	—	$	1,097	Siding Solutions	$	989	$	—	$	19	$	—	$	—	$	1,008
OSB - Structural Solutions	OSB - Structural Solutions	—		995		172		—		(2)		1,165		OSB - Structural Solutions	—		412		132		—		—		544
		1,079		995		190		—		(2)		2,262			989		412		151		—		—		1,552
Commodity	Commodity													Commodity
OSB - commodity	OSB - commodity	—		801		—		—		(1)		801		OSB - commodity	—		332		—		—		—		332

Other	Other													Other
Other products	Other products	4		9		—		72		—		86		Other products	7		9		2		21		—		39
		$	1,083	$	1,805	$	190	$	72	$	(2)	$	3,149		$	996	$	754	$	153	$	21	$	—	$	1,923


Nine Months Ended September 30, 2021
By product type and family:		Siding		OSB		South America		Other		Inter-segment		Total
Nine Months Ended September 30, 2022														Nine Months Ended September 30, 2022
By Product type and family:														By Product type and family:	Siding		OSB		South America		Other		Inter-segment		Total
Value-add	Value-add													Value-add
Siding Solutions	Siding Solutions	$	879	$	—	$	29	$	—	$	—	$	908	Siding Solutions	$	1,079	$	—	$	18	$	—	$	—	$	1,097
OSB - Structural Solutions	OSB - Structural Solutions	—		912		171		—		—		1,082		OSB - Structural Solutions	—		995		172		—		(2)		1,165
		879		912		200		—		—		1,991			1,079		995		190		—		(2)		2,262
Commodity	Commodity													Commodity
OSB - commodity	OSB - commodity	—		997		—		—		—		997		OSB - commodity	—		801		—		—		(1)		801

Other	Other													Other
Other products	Other products	9		9		3		73		(2)		93		Other products	4		9		—		72		—		86
		$	889	$	1,917	$	203	$	73	$	(2)	$	3,080		$	1,083	$	1,805	$	190	$	72	$	(2)	$	3,149

Revenue is recognized when obligations under the terms of a contract (i.e., purchase orders) with our customers are satisfied; generally, this occurs with the transfer of control of our products to the customer at a point in time. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods. The shipping cost incurred by us to deliver products to our customers is recorded in cost of sales. The expected costs associated with our warranties continue to be recognized as an expense when the products are sold.

Our businesses routinely incur customer program costs to obtain favorable product placement, promote sales of products, and maintain competitive pricing. Customer program costs and incentives, including rebates and promotion and volume allowances, are accounted for as deductions from ~~net~~Net sales at the time the program is initiated. These reductions from revenue are recorded at the time of sale or the implementation of the program based on management’s best estimates. Estimates are based on historical and projected experience for each type of program or customer. Volume allowances are accrued based on management’s ~~estimates~~estimation of customer volume achievement and other factors incorporated into customer agreements, such as new product purchases, store sell-through, and merchandising support. Management adjusts accruals when circumstances indicate (typically as a result of a change in sales volume expectations).

We ship some of our products to customers’ distribution centers on a consignment basis. We retain title to our products stored at the distribution centers. As our products are removed from the distribution centers by retailers and shipped to retailers’ stores, title passes from us to the retailers. At that time, we invoice the retailers and recognize revenue for these consignment transactions. We do not offer a right of return for products shipped to the retailers’ stores from the distribution centers.

NOTE 3. EARNINGS PER SHARE

Basic earnings per share is based ~~upon~~on the weighted-average number of shares of common stock outstanding. Diluted earnings per share is based upon the weighted-average number of shares of common stock outstanding, plus all potentially dilutive securities that were assumed to be converted into common shares at the beginning of the period under the treasury stock method. This method requires that the effect of potentially dilutive common stock equivalents (stock options, stock-settled appreciation rights, ~~(SSARs),~~ restricted stock units, and performance stock units) be excluded from the calculation of diluted earnings per share for the periods in which losses from continuing operations are reported because the effect is anti-dilutive.

The following table sets forth the computation of basic and diluted earnings per share (dollar and share amounts in millions, except per share amounts):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Income from continuing operations	Income from continuing operations	$	129	$	332	$	898	$	1,134	Income from continuing operations	$	118	$	129	$	119	$	898
Net loss attributed to noncontrolling interest		—		—		1		1
Net loss attributed to non-controlling interest										Net loss attributed to non-controlling interest	—		—		—		1
Income attributed to LP from continuing operations	Income attributed to LP from continuing operations	129		332		898		1,135		Income attributed to LP from continuing operations	118		129		119		898
Income for discontinued operations, net of income taxes		97		33		196		47
Income from discontinued operations, net of income taxes										Income from discontinued operations, net of income taxes	—		97		—		196
Net income attributed to LP	Net income attributed to LP	$	226	$	365	$	1,094	$	1,183	Net income attributed to LP	$	118	$	226	$	119	$	1,094

Weighted average common shares outstanding - basic	Weighted average common shares outstanding - basic	74		94		80		100		Weighted average common shares outstanding - basic	72		74		72		80
Dilutive effect of employee stock plans	Dilutive effect of employee stock plans	—		—		1		1		Dilutive effect of employee stock plans	—		—		—		1
Shares used for diluted earnings per share	Shares used for diluted earnings per share	74		94		80		101		Shares used for diluted earnings per share	72		74		72		80

Net income attributed to LP per share - basic:	Net income attributed to LP per share - basic:									Net income attributed to LP per share - basic:
Continuing operations	Continuing operations	$	1.75	$	3.55	$	11.23	$	11.34	Continuing operations	$	1.63	$	1.75	$	1.65	$	11.23
Discontinued operations	Discontinued operations	1.32		0.35		2.45		0.47		Discontinued operations	—		1.32		—		2.45
Net income attributed to LP per share - basic	Net income attributed to LP per share - basic	$	3.07	$	3.90	$	13.67	$	11.81	Net income attributed to LP per share - basic	$	1.63	$	3.07	$	1.65	$	13.67

Net income attributed to LP per share – diluted:
Net income attributed to LP per share - diluted:										Net income attributed to LP per share - diluted:
Continuing operations	Continuing operations	$	1.74	$	3.52	$	11.16	$	11.26	Continuing operations	$	1.63	$	1.74	$	1.65	$	11.16
Discontinued operations	Discontinued operations	1.31		0.35		2.43		0.47		Discontinued operations	—		1.31		—		2.43
Net income attributed to LP per share - diluted	Net income attributed to LP per share - diluted	$	3.05	$	3.87	$	13.59	$	11.73	Net income attributed to LP per share - diluted	$	1.63	$	3.05	$	1.65	$	13.59

NOTE 4. FAIR VALUE MEASUREMENTS

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. We are required to classify these financial assets and liabilities into two groups: (i) recurring—measured on a periodic basis, and (ii) non-recurring—measured on an as-needed basis.

~~Trading securities consist of rabbi trust financial assets, which are recorded in Other assets in our Condensed Consolidated Balance Sheets.~~ The ~~assets of the rabbi trust are invested in mutual funds and are reported at fair value based on active market quotations, which represent Level 1 inputs.~~

~~The fair~~net carrying value of the 3.625% Senior Notes due in 2029 (2029 Senior Notes) was ~~estimated to be $276~~$347 million and ~~$358~~$346 million as of September 30, ~~2022,~~2023 and December 31, ~~2021,~~2022, respectively. The fair value of the 2029 Senior Notes was estimated to be $295 million and $306 million as of September 30, 2023 and December 31, 2022, respectively, based on market quotations. The 2029 Senior Notes and other long-term debt are categorized as Level 1 in the U.S. GAAP fair value hierarchy. Fair values

are based on trading activity among the Company’s lenders and the average bid and ask price is determined using published rates.

~~There~~In November 2022, LP entered into a Second Amended and Restated Credit Agreement with American AgCredit, PCA, as administrative agent and sole lead arranger, and CoBank, ACB, as letter of credit issuer (the Credit

Agreement), relating to its revolving credit facility (as amended, the Amended Credit Facility). The Credit Agreement provides for a revolving credit facility in the principal amount of up to $550 million, with a $60 million sub-limit for letters of credit. All loans under the Credit Agreement become due on November 29, 2028. As of September 30, 2023, there were no outstanding ~~amounts borrowed~~borrowings under our Amended Credit ~~Facility (defined below) as of September 30, 2022.~~Facility.

Carrying amounts reported on the balance sheet for cash and cash equivalents, accounts receivables, and accounts payable approximate fair value due to the short-term maturity of these items.

NOTE 5. RECEIVABLES

Receivables consisted of the following (dollar amounts in millions):


		September 30, 2022		December 31, 2021			September 30, 2023		December 31, 2022
Trade receivables	Trade receivables	$	147	$	156	Trade receivables	$	148	$	106
Other receivables	Other receivables	24		13		Other receivables	27		19
Income tax receivable	Income tax receivable	—		1		Income tax receivable	9		4
Allowance for doubtful accounts	Allowance for doubtful accounts	(1)		(1)		Allowance for doubtful accounts	(3)		(1)
Total	Total	$	171	$	169	Total	$	181	$	127

Trade receivables are primarily generated by sales of our products to our wholesale and retail customers. Other receivables as of September 30, ~~2022,~~2023 and December 31, ~~2021,~~2022, primarily consist of sales tax receivables, vendor rebates, and other miscellaneous receivables.

NOTE 6. INVENTORIES

Inventories are valued at the lower of cost or net realizable value. Inventory cost includes materials, labor, and operating overhead. The major types of inventories (work in process is not material and is included in Semi-finished inventory) are as follows (dollar amounts in millions):


		September 30, 2022		December 31, 2021			September 30, 2023		December 31, 2022
Logs	Logs	$	45	$	50	Logs	$	75	$	59
Other raw materials	Other raw materials	95		57		Other raw materials	48		72
Semi-finished inventory		25		20
Semi-finished inventories						Semi-finished inventories	33		25
Finished products	Finished products	172		150		Finished products	222		180
Total	Total	$	337	$	278	Total	$	379	$	337

NOTE 7. DISCONTINUED OPERATIONS

~~Engineered Wood Products (EWP)~~In March 2022, the Company sold its 50% equity interest in two joint ventures that produce I-joists for $59 million, resulting in a pre-tax gain associated with the sale of $39 million recorded in the year ended December 31, 2022 within Income from discontinued operations, net of income taxes in the Condensed Consolidated Statements of Income.

On August 1, 2022, the Company completed the sale of the assets related to the EWP ~~segment to the Purchaser.~~segment. As a result of the sale, the Company received $217 million in gross cash proceeds after taking into account working capital ~~adjustments (including $3 million received subsequent to September 30, 2022).~~adjustments. The Company paid $12 million in direct transaction costs, resulting in net proceeds of $205 million. ~~The net carrying value of~~During the ~~EWP assets at~~year ended December 31, 2022, the ~~time of sale was $87 million, which resulted in~~Company recorded a pre-tax gain of approximately $118 million within Income from discontinued operations, net of income taxes in the Condensed Consolidated Statements of Income.

Upon closing, the Company entered into ~~the TSA~~a transition services agreement with the ~~Purchaser,~~purchaser of the assets, pursuant to which the Company agreed to support the various activities of the EWP segment, ~~for a period not to exceed eight months. During~~which concluded during the three months ended September 30, 2022, the Company collected $33 million on the Purchaser's behalf pursuant to the TSA. As of September 30, 2022, the Company has $14 million due to the Purchaser, which is included in the Condensed Consolidated Balance Sheets.March 31, 2023.

The Company has classified the results of its EWP segment as discontinued operations in its Condensed Consolidated Statements of Income ~~and we have classified~~for the ~~related assets and liabilities associated with the EWP segment as discontinued operations in our Condensed Consolidated Balance Sheets.~~

~~EWP Joint Ventures~~

In March 2022, we sold our 50% equity interest in two joint ventures that produce I-joists to Resolute Forest Products Inc. for $59 million. The total net carrying value of our equity method investment at the date of sale was $19 million, and we recognized a gain associated with the sale of $39 million within Income from discontinued operations in the Condensed Consolidated Statements of Income.

prior period presented. The following table presents the financial results of the EWP segment ~~(in~~for the three and nine months ended September 30, 2022 (dollar amounts in millions):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,		Nine Months Ended September 30,
		2022		2021		2022		2021			2022		2022
Net sales	Net sales	$	67	$	201	$	455	$	481	Net sales	$	67	$	455
Cost of sales	Cost of sales	(54)		(156)		(352)		(403)		Cost of sales	(54)		(352)
Gross profit	Gross profit	13		45		103		78		Gross profit	13		103
Selling, general, and administrative expenses	Selling, general, and administrative expenses	(2)		(5)		(12)		(15)		Selling, general, and administrative expenses	(2)		(12)

Income from operations of discontinued operations	Income from operations of discontinued operations	12		40		91		64		Income from operations of discontinued operations	12		91
Other non-operating items		—		5		—		(1)

Gain on disposal before income taxes	Gain on disposal before income taxes	118		—		158		—		Gain on disposal before income taxes	118		158
Income from discontinued operations before income taxes	Income from discontinued operations before income taxes	130		44		249		63		Income from discontinued operations before income taxes	130		249
Provision for income taxes	Provision for income taxes	(33)		(11)		(53)		(16)		Provision for income taxes	(33)		(53)
Income from discontinued operations, net of income taxes	Income from discontinued operations, net of income taxes	$	97	$	33	$	196	$	47	Income from discontinued operations, net of income taxes	$	97	$	196

The following summarizes the total cash provided by operations and total cash ~~used for~~provided by investing activities related to the EWP segment and included in the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 ~~and 2021 (in~~(dollar amounts in millions):

Nine Months Ended September 30,
2022 2021
Net cash provided by discontinued operating activities $ 18 $ 30
Net cash provided by (used in) discontinued investing activities $ 258 $ (25)


Net cash provided by discontinued operating activities	$	18
Net cash provided by discontinued investing activities	$	258

Net cash provided by discontinued investing activities for the nine months ended September 30, 2022, includes $59 million of proceeds from the sale of our 50% equity interest in two joint ventures that produce I-joists and $202 million of net proceeds from the sale of the EWP segment assets.

NOTE 8. BUSINESS EXIT CHARGES

During the second quarter of 2023, we ceased the manufacturing operations of Entekra Holdings, LLC (Entekra), an off-site framing operation previously reported within our “Other” category, which comprises other products that are not individually significant. Business exit charges were $1 million and $35 million for the three and nine months ended September 30, 2023, respectively, which consist of the following (dollar amounts in millions):


	Three Months Ended September 30,		Nine Months Ended September 30,
	2023			2023
Impairment of property, plant and equipment, operating lease assets, and other intangible assets1	$	—		$	24
Restructuring and other related charges:
Inventory write-down2	—			6
Other expenses including personnel-related costs such as severance3	1			4
	$	1		$	35

1Included within Impairment of long-lived assets, net on the Condensed Consolidated Income Statements.

2Included within Cost of sales on the Condensed Consolidated Income Statements.

3Included within Other operating credits and charges, net on the Condensed Consolidated Income Statements.

~~The following table presents the aggregate carrying amounts of discontinued operations related to the EWP segment in the Condensed Consolidated Balance Sheets (in millions):~~


	~~December 31, 2021~~
~~Carrying amounts of assets included as part of discontinued operations:~~
~~Accounts receivable, net~~	$	22
~~Inventories~~	46
~~Timber and timberlands~~	42
~~Property, plant, and equipment, net~~	30
~~Operating lease assets~~	1
~~Investments in and advances to affiliates~~	14
~~Total assets classified as discontinued operations in the Condensed Consolidated Balance Sheet~~	$	~~156~~

~~Carrying amounts of liabilities included as part of discontinued operations:~~
~~Accounts payable and accrued liabilities~~	$	34

~~Other liabilities~~	42
~~Total liabilities classified as discontinued operations in the Condensed Consolidated Balance Sheet~~	$	76

NOTE 8.9. GOODWILL AND OTHER INTANGIBLES

Goodwill and indefinite-lived intangible assets are not amortized and are subject to assessment for impairment by applying a fair value-based test on an annual basis, or more frequently if circumstances indicate a potential impairment. The Company’s annual assessment date is October 1. During the nine months ended September 30, 2023, we recorded impairment charges of $9 million related to developed technology and trademarks related to Entekra, which is discussed further in “Note 8 - Business Exit Charges.”

Changes in goodwill and other intangible assets for the nine months ended September 30, ~~2022,~~2023 are provided in the following table (dollar amounts in millions):

Timber licenses1
Goodwill Developed Technology Trademarks
Beginning balance December 31, 2021 $ 30 $ 19 $ 17 $ 2
Amortization (2) — (1) —
Ending balance September 30, 2022 $ 28 $ 19 $ 16 $ 2


	Timber Licenses1		Goodwill		Developed Technology		Trademarks
Beginning balance December 31, 2022	$	28	$	19	$	15	$	2

Impairment charges	—		—		(7)		(2)
Amortization	(2)		—		(1)		—
Ending balance September 30, 2023	$	25	$	19	$	7	$	—

1Timber licenses are included in Timber and timberlands on the Condensed Consolidated Balance Sheets.

~~NOTE 9. REDEEMABLE NONCONTROLLING INTEREST~~

Redeemable noncontrolling interest is interest in subsidiaries that is redeemable outside of our control, either for cash or other assets. These interests are classified as mezzanine equity and measured at the greater of estimated redemption value or carrying value at the end of each reporting period. Net loss attributed to noncontrolling interest is recorded in the Condensed Consolidated Statements of Income. Any adjustments to the redemption value of redeemable noncontrolling interest are recognized in either net income or through accumulated paid-in capital, depending on the nature of the underlying security (preferred or common units).

~~The components of redeemable noncontrolling interest as of September 30, 2022, were as follows (dollar amounts in millions):~~



~~Beginning balance December 31, 2021~~	$	4


~~Net loss attributed to noncontrolling interest~~	~~(1)~~

~~Ending balance September 30, 2022~~	$	3

NOTE 10. INCOME TAXES

For interim periods, we recognize income tax expense by applying the estimated annual effective income tax rate to ~~year-to-date~~year to date results unless this method does not result in a reliable estimate of ~~year-to-date~~year to date income tax expense. Each period, the income tax accrual is adjusted to the latest estimate, and the difference from the previously accrued ~~year-to-date~~year to date balance is adjusted in the current quarter. Changes in profitability estimates in various jurisdictions will impact our quarterly effective income tax rates.

The tax provision for income taxes from continuing operations for the nine months ended September 30, ~~2022~~2023 and ~~2021,~~2022, reflected an estimated annual effective tax rate of ~~25%~~27% and ~~24%~~25%, respectively, excluding discrete items discussed below. The total effective tax rate for continuing operationsfor the three and nine months ended September 30, ~~2022,~~2023 was 27% and 36%, respectively, compared to 26% and 24%, ~~compared to 25% and 24%~~respectively, for the comparable ~~periods~~period in ~~2021, respectively.~~

2022.

We recognized net discrete tax expense of $16 million and net discrete tax benefits of $9 ~~million and $7~~ million in the nine months ended September 30, ~~2022~~2023 and ~~2021,~~2022, respectively. The net discrete tax ~~benefits~~expense in the current year relates primarily ~~relate~~to a $22 million expense related to the second quarter change in management’s indefinite reinvestment assertion on Chile and Brazil earnings described in “Item 2 - Management's Discussion and Analysis of Financial Conditions and Results of Operation” of this quarterly report on Form 10-Q, while the net discrete tax benefit in the prior year primarily relates to excess tax benefits from stock-based ~~compensation and changes to estimates in the prior year including our deferred tax rate.~~compensation.

NOTE 11. COMMITMENTS AND CONTINGENCIES

We maintain reserves for various contingent liabilities as follows (dollar amounts in millions):


		September 30, 2022		December 31, 2021			September 30, 2023		December 31, 2022
Environmental reserves	Environmental reserves	$	27	$	25	Environmental reserves	$	26	$	27
Other reserves	Other reserves	—		—		Other reserves	—		—
Total contingencies	Total contingencies	27		25		Total contingencies	26		27
Current portion (included in Accounts payable and accrued liabilities)	Current portion (included in Accounts payable and accrued liabilities)	(1)		(1)		Current portion (included in Accounts payable and accrued liabilities)	(1)		(1)
Long-term portion	Long-term portion	$	26	$	24	Long-term portion	$	25	$	26

Estimates of our loss contingencies are based on various assumptions and judgments. Due to the numerous uncertainties and variables associated with these assumptions and judgments, both the precision and reliability of the resulting estimates of the related contingencies are subject to substantial uncertainties. We regularly monitor our

estimated exposure to contingencies and, as additional information becomes known, may change our estimates significantly. While no estimate of the range of any such change can be made at this time, the amount that we may ultimately pay in connection with these matters could materially exceed, in either the near term or the longer term, the amounts accrued to date. Our estimates of our loss contingencies do not reflect potential future recoveries from insurance carriers except to the extent that recovery may, from time to time, be deemed probable as a result of an insurer’s agreement to payment terms.

Environmental Matters

We maintain a reserve for undiscounted estimated environmental loss contingencies. This reserve is primarily for estimated future costs of remediation of hazardous or toxic substances at numerous sites currently or previously owned by the Company. Our estimates of our environmental loss contingencies are based on various assumptions and judgments, the specific nature of which varies ~~considering~~based on the particular facts and circumstances surrounding each environmental loss contingency. These estimates typically reflect assumptions and judgments as to the probable nature, magnitude, and timing of the required investigation, remediation, and/or monitoring activities and the probable cost of these activities, and in some cases, reflect assumptions and judgments as to the obligation or willingness and ability of third parties to bear a proportionate or allocated share of the cost of these activities. Due to the numerous uncertainties and variables associated with these assumptions and judgments, and the effects of changes in governmental regulation and environmental technologies, both the precision and reliability of the resulting estimates of the related contingencies are subject to substantial uncertainties. We regularly monitor our estimated exposure to environmental loss contingencies and, as additional information becomes known, may change our estimates significantly.

Other Proceedings

From time to time, we and our subsidiaries are parties to certain legal ~~proceedings.~~ proceedings arising in our ordinary course of business. During the second quarter of 2023, we agreed to pay $16 million to resolve certain patent-related claims and to obtain certain patent rights, which is recorded within Other operating credits and charges, net in our Condensed Consolidated Statements of Income. As of September 30, 2023, $12 million of the settlement amount is outstanding and is included Accounts payable and accrued liabilities in the Condensed Consolidated Balance Sheets.

Based on the information currently available, management believes the resolution of such ongoing and future proceedings will not have a material effect on our financial position, results of operations, cash flows, or liquidity.

NOTE 12. IMPAIRMENT OF LONG-LIVED ASSETS

We review the carrying values of our long-lived assets for potential impairments and believe we have adequate support for the carrying values of our long-lived assets. If demand and pricing for our products fall to levels significantly below cycle average demand and pricing, should we decide to invest capital in alternative projects, or should changes occur related to our wood supply for our mills, it is possible that future impairment charges will be required. As of September 30, ~~2022,~~2023, there were no indications of impairment.

We also review from time to time potential dispositions of various assets, considering current and anticipated economic and industry conditions, our strategic plan, and other relevant factors. Because a determination to dispose of particular assets can require management to make assumptions regarding the transaction structure of the disposition and to estimate the net sales proceeds, which may be less than previous estimates of undiscounted future net cash flows, we may be required to record impairment charges in connection with decisions to dispose of assets. During the nine months ended September 30, 2023, we recorded impairment charges of $13 million and $3 million related to property, plant, and equipment and operating lease assets, respectively, related to Entekra which were written down to fair value based on Level 2 inputs under Accounting Standards Codification 820, Fair Value Measurement (ASC 820), using quoted market prices. See further discussion in “Note 8 - Business Exit Charges.” As of September 30, 2023, there were no other indications of impairment.

NOTE 13. PRODUCT WARRANTIES

We offer warranties on the sale of most of our products and record an accrual for estimated future claims. Such accruals are based upon historical experience and management’s estimate of the level of future claims. The activity in warranty reserves for the three and nine months ended September 30, ~~2022~~2023 and ~~2021,~~2022, is summarized in the following table (dollar amounts in millions):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Beginning balance	Beginning balance	$	7	$	8	$	7	$	8	Beginning balance	$	8	$	7	$	8	$	7
Accrued to expense	Accrued to expense	1		—		3		1		Accrued to expense	—		1		2		3

Credited to other operating credits and charges										Credited to other operating credits and charges	(1)		—		(1)		—
Payments made	Payments made	(1)		—		(2)		(1)		Payments made	—		(1)		(1)		(2)
Total warranty reserves	Total warranty reserves	8		8		8		8		Total warranty reserves	7		8		7		8
Current portion of warranty reserves (included in Accounts payable and accrued liabilities)	Current portion of warranty reserves (included in Accounts payable and accrued liabilities)	(2)		(2)		(2)		(2)		Current portion of warranty reserves (included in Accounts payable and accrued liabilities)	(2)		(2)		(2)		(2)
Long-term portion of warranty reserves (included in Other long-term liabilities)	Long-term portion of warranty reserves (included in Other long-term liabilities)	$	6	$	6	$	6	$	6	Long-term portion of warranty reserves (included in Other long-term liabilities)	$	6	$	6	$	6	$	6

We continue to monitor warranty and other claims associated with our products and believe, as of September 30, ~~2022,~~2023, that the warranty reserve balances associated with these matters are adequate to cover future warranty payments. However, it is possible that additional changes may be required in the future.

NOTE 14. DEFINED BENEFIT PENSION PLANS

The following table summarizes our net periodic pension cost for our defined benefit pension and postretirement plans during the three and nine months ended September 30, ~~2022~~2023 and ~~2021~~2022 (dollar amounts in millions):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Service cost	Service cost	$	1	$	—	$	3	$	1	Service cost	$	—	$	1	$	—	$	3
Other components of net periodic pension cost1:	Other components of net periodic pension cost1:									Other components of net periodic pension cost1:
Interest cost	Interest cost	2		2		5		5		Interest cost	—		2		—		5
Expected return on plan assets	Expected return on plan assets	(2)		(3)		(5)		(10)		Expected return on plan assets	—		(2)		—		(5)
Amortization of prior service cost	Amortization of prior service cost	—		—		—		—		Amortization of prior service cost	—		—		—		—
Amortization of net loss	Amortization of net loss	1		1		4		4		Amortization of net loss	—		1		—		4
Net periodic pension costs before loss due to settlement										Net periodic pension costs before loss due to settlement	—		2		—		7
Loss due to settlement	Loss due to settlement	4		—		4		—		Loss due to settlement	—		4		6		4
Net periodic pension cost	Net periodic pension cost	$	7	$	1	$	11	$	2	Net periodic pension cost	$	—	$	7	$	6	$	11

1Other components of net periodic pension cost are included in Other non-operating items on our Condensed Consolidated Statements of Income.

In November 2021, the Company initiated the termination of our frozen U.S. and Canadian defined benefit pension plans (collectively, the Plan), which would result in the full settlement of the Company's Plan obligations.

During the year ended December 31, 2022, the Company liquidated substantially all of the Plan assets to fund lump-sum distributions to participants and purchase non-participating group annuity contracts. As a result, a substantial portion of the Plan was settled during the year ended December 31, 2022. During the three months ended ~~September 30, 2022, we made lump-sum pension distributions and purchased non-participating group annuity contracts totaling $33 million which triggered partial settlement accounting for~~March 31, 2023, the ~~Plan. Accordingly, reflected~~Company completed the termination of the Plan resulting in ~~the table above is a non-cash pre-tax loss due to settlement of $4 million for the three and nine months ended September 30, 2022 representing~~ the recognition of ~~a pro rata portion~~non-cash, pre-tax charges of ~~the unrecognized loss recorded within~~$6 million from Accumulated comprehensive ~~loss.~~loss to Other non-operating items in our Condensed Consolidated Statements of Income.

The changes recognized in Other comprehensive loss were as ~~follows:~~follows (dollar amounts in millions):

Three Months Ended September 30, Nine Months Ended September 30,
2022 2021 2022 2021
Net actuarial gain (loss) and prior service (cost) arising during the period, net of tax $ (1) $ — $ (1) $ —
Amortization of actuarial loss, prior service cost and settlements, net of tax $ 4 $ 2 $ 7 $ 3
Total amounts recognized in Other comprehensive income $ 3 $ 2 $ 6 $ 3

Remaining Plan participants will receive their full accrued benefits from Plan assets by electing either lump-sum distributions or annuity contracts with a qualifying third-party annuity provider. The remaining distribution of Plan assets pursuant to the termination will not be made until the Plan termination satisfies all regulatory requirements. The remaining Plan termination is expected to be substantially complete in the fourth quarter of 2022 and result in pension settlement expense, which will be determined based on prevailing market conditions, the actual lump-sum distributions, and annuity purchase rates at the date of distribution. Upon final settlement, we expect to recognize pre-tax pension settlement charges that will include (1) a non-cash charge for the recognition of all pre-tax actuarial losses in Accumulated comprehensive loss ($93 million as of September 30, 2022) and (2) any cash contributions to settle the Plan’s obligations ($9 million net projected benefit obligation as of September 30, 2022). The actual amount of the settlement charges and any potential cash contribution will depend on various factors, including interest rates, Plan asset returns, and the lump-sum election rate.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net actuarial gain (loss) and prior service (cost) arising during the period, net of tax	$	—	$	(1)	$	—	$	(1)
Amortization of actuarial loss, prior service cost and settlements, net of tax	—		4		4		7
Total amounts recognized in Other comprehensive income	$	—	$	3	$	4	$	6

NOTE 15. ACCUMULATED COMPREHENSIVE LOSS

Accumulated comprehensive loss is provided in the following table for the three months ended September 30, ~~2022~~2023, and ~~2021~~2022 (dollar amounts in millions):


	Pension		Translation Adjustments		Other		Total
Balance at June 30, 2023	$	—	$	(78)	$	—	$	(78)
Reclassified to income statement, net of taxes1	—		—		—		—
Translation adjustments	—		(19)		—		(19)
Balance at September 30, 2023	$	—	$	(97)	$	—	$	(98)


	Pension		Translation Adjustments		Other		Total
Balance at June 30, 2022	$	(74)	$	(105)	$	(1)	$	(181)
Reclassified to income statement, net of taxes1	3		—		—		3
Translation adjustments	—		(13)		—		(13)
Balance at September 30, 2022	$	(71)	$	(118)	$	(1)	$	(190)

Pension Translation Adjustments Other Total
Balance at June 30, 2021 $ (80) $ (68) $ (2) $ (149)
Reclassified to income statement, net of taxes1
2 — — 2
Translation adjustments — (21) — (21)
Balance at September 30, 2021 $ (78) $ (89) $ (2) $ (168)

1 Amounts of actuarial loss and prior service cost are components of net periodic benefit cost. See ~~Note~~“Note 14 - Defined Benefit Pension Plans” above for additional details.

Accumulated comprehensive loss is provided in the following table for the nine months ended September 30, ~~2022~~2023 and ~~2021~~2022 (dollar amounts in millions):


		Pension		Translation Adjustments		Other		Total			Pension		Translation Adjustments		Other		Total
Balance at December 31, 2021		$	(76)	$	(96)	$	(1)	$	(174)
Balance at December 31, 2022										Balance at December 31, 2022	$	(5)	$	(94)	$	—	$	(99)
Reclassified to income statement, net of taxes1	Reclassified to income statement, net of taxes1	6		—		—		6		Reclassified to income statement, net of taxes1	4		—		—		4
Translation adjustments	Translation adjustments	—		(22)		—		(22)		Translation adjustments	—		(3)		—		(3)
Balance at September 30, 2022		$	(71)	$	(118)	$	(1)	$	(190)
Balance at September 30, 2023										Balance at September 30, 2023	$	—	$	(97)	$	—	$	(98)


		Pension		Translation Adjustments		Other		Total			Pension		Translation Adjustments		Other		Total
Balance at December 31, 2020		$	(81)	$	(68)	$	(2)	$	(151)
Balance at December 31, 2021										Balance at December 31, 2021	$	(76)	$	(96)	$	(1)	$	(174)
Reclassified to income statement, net of taxes1	Reclassified to income statement, net of taxes1	3		—		—		3		Reclassified to income statement, net of taxes1	6		—		—		6
Translation adjustments	Translation adjustments	—		(21)		—		(21)		Translation adjustments	—		(22)		—		(22)
Balance at September 30, 2021		$	(78)	$	(89)	$	(2)	$	(168)
Balance at September 30, 2022										Balance at September 30, 2022	$	(71)	$	(118)	$	(1)	$	(190)

1 Amounts of actuarial loss and prior service cost are components of net periodic benefit cost. See ~~Note~~“Note 14 - Defined Benefit Pension Plans” above for additional details.

2019

NOTE 16. OTHER OPERATING AND NON-OPERATING ITEMS

Other operating credits and charges, net

Other operating credits and charges, net, is comprised of the following components (dollar amounts in millions):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Insurance recoveries	Insurance recoveries	$	2	$	1	$	15	$	3	Insurance recoveries	$	—	$	2	$	—	$	15
Reorganization charges	Reorganization charges	(4)		(1)		(5)		(1)		Reorganization charges	(2)		(4)		(9)		(5)
Legal settlement										Legal settlement	—		—		(16)		—

Environmental costs	Environmental costs	—		—		(2)		—		Environmental costs	—		—		—		(2)
Gain on asset sales										Gain on asset sales	6		—		6		—
Other	Other	9		1		9		3		Other	1		9		(1)		9
Other operating credits and charges, net	Other operating credits and charges, net	$	7	$	2	$	17	$	5	Other operating credits and charges, net	$	6	$	7	$	(20)	$	17

Other non-operating items

Other non-operating items is comprised of the following components (dollar amounts in millions):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2023		2022		2023		2022

Net periodic pension cost, excluding service cost	Net periodic pension cost, excluding service cost	$	(1)	$	—	$	(4)	$	—	Net periodic pension cost, excluding service cost	$	—	$	(1)	$	—	$	(4)
Pension settlement charges	Pension settlement charges	(4)		—		(4)		—		Pension settlement charges	—		(4)		(6)		(4)
Loss on early debt extinguishment		—		—		—		(11)

Foreign currency gain (loss)	Foreign currency gain (loss)	$	2	$	(2)	$	(3)	$	(2)	Foreign currency gain (loss)	$	—	$	2	$	(12)	$	(3)
Other	Other	$	1	$	—	$	1	$	—	Other	$	—	$	1	$	1	$	1
Other non-operating items	Other non-operating items	$	(3)	$	(2)	$	(11)	$	(13)	Other non-operating items	$	—	$	(3)	$	(17)	$	(11)

NOTE 17. SELECTED SEGMENT DATA

We operate in three segments: Siding, OSB, and South America. Our business units have been aggregated into these three segments based upon the similarity of economic characteristics, customers, and distribution methods. Our results of operations are summarized below for each of these segments separately, as well as for the “Other” category, which comprises other products that are not individually significant. On June 21, 2022, LP reached an agreement for the sale of its EWP segment assets which subsequently closed on August 1, 2022. As a result of this transaction, the results of the EWP segment have been reclassified to discontinued operations and EWP is no longer a reportable segment of the Company. See "Note 7 –Discontinued Operations" for additional information.

We evaluate the performance of our business segments based on ~~net~~Net sales and segment Adjusted ~~EBITDA.~~EBITDA (defined below). Accordingly, our chief operating decision maker evaluates performance and allocates resources based primarily on ~~net~~Net sales and segment Adjusted EBITDA for our business segments. The Company's chief operating decision maker is the Chief Executive Officer. Segment Adjusted EBITDA is ~~a non-GAAP financial measure and is~~ defined as ~~income~~Income attributed to LP from continuing operations before interest expense, provision for income taxes, depreciation and amortization, and excludes stock-based compensation expense, loss on impairment attributed to LP, business exit charges, product-line discontinuance charges, other operating credits and charges, net, loss on early debt extinguishment, investment income, pension settlement charges, and other non-operating items.

2120

During the nine months ended September 30, 2023, we updated our definition of Adjusted EBITDA to exclude other business exit charges not classified as exit operations. Business exit charges consist of inventory and other asset impairment and exit charges related to the exit of businesses not individually significant. We consider business exit charges to be outside the performance of our ongoing core business operations and believe that presenting Adjusted EBITDA excluding business exit charges provides increased transparency as to the operating costs of our current business performance. We did not revise prior years’ Adjusted EBITDA amounts because there were no significant costs similar in nature to these items.

Information about our business segments is as follows (dollar amounts in millions):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Net sales	Net sales									Net sales
Siding	Siding	$	394	$	312	$	1,083	$	889	Siding	$	345	$	394	$	996	$	1,083
OSB	OSB	388		600		1,805		1,917		OSB	335		388		754		1,805
South America	South America	53		76		190		203		South America	45		53		153		190
Other	Other	17		30		72		73		Other	4		17		21		72
Intersegment sales	Intersegment sales	(1)		(1)		(2)		(2)		Intersegment sales	—		(1)		—		(2)
Total sales	Total sales	$	852	$	1,018	$	3,149	3,080		Total sales	$	728	$	852	$	1,923	3,149
PROFIT BY SEGMENT
NET INCOME TO ADJUSTED EBITDA										NET INCOME TO ADJUSTED EBITDA
Net income	Net income	$	226	$	365	$	1,093	$	1,182	Net income	$	118	$	226	$	119	$	1,093
Add (deduct):	Add (deduct):									Add (deduct):
Net loss attributed to noncontrolling interest		—		—		1		1
Net loss attributed to non-controlling interest										Net loss attributed to non-controlling interest	—		—		—		1
Income from discontinued operations, net of income taxes	Income from discontinued operations, net of income taxes	(97)		(33)		(196)		(47)		Income from discontinued operations, net of income taxes	—		(97)		—		(196)
Income attributed to LP from continuing operations	Income attributed to LP from continuing operations	129		332		898		1,135		Income attributed to LP from continuing operations	118		129		119		898
Provision for income taxes	Provision for income taxes	44		111		284		350		Provision for income taxes	44		44		66		284
Depreciation and amortization	Depreciation and amortization	32		28		96		85		Depreciation and amortization	30		32		87		96
Stock-based compensation expense	Stock-based compensation expense	2		5		15		10		Stock-based compensation expense	2		2		9		15
Loss on impairment attributed to LP										Loss on impairment attributed to LP	1		—		1		—
Other operating credits and charges, net										Other operating credits and charges, net	(7)		(7)		16		(17)
Business exit charges										Business exit charges	1		—		35		—

Other operating credits and charges, net		(7)		(2)		(17)		(5)
Loss on early debt extinguishment		—		—		—		11
Interest expense	Interest expense	3		4		9		12		Interest expense	4		3		9		9
Investment income	Investment income	(5)		—		(8)		(1)		Investment income	(4)		(5)		(10)		(8)
Other non-operating items	Other non-operating items	(1)		2		7		2		Other non-operating items	—		(1)		11		7
Pension settlement charges	Pension settlement charges	4		—		4		—		Pension settlement charges	—		4		6		4
Adjusted EBITDA	Adjusted EBITDA	$	200	$	480	$	1,289	$	1,600	Adjusted EBITDA	$	190	$	200	$	349	$	1,289

SEGMENT ADJUSTED EBITDA										SEGMENT ADJUSTED EBITDA
Siding	Siding	$	90	$	73	$	251	$	240	Siding	$	71	$	90	$	198	$	251
OSB	OSB	113		381		1,021		1,300		OSB	120		113		161		1,021
South America	South America	14		37		65		91		South America	6		14		31		65
Other	Other	(7)		(3)		(19)		(11)		Other	—		(7)		(15)		(19)
Corporate	Corporate	(11)		(8)		(29)		(22)		Corporate	(7)		(11)		(26)		(29)
Adjusted EBITDA		$	200	$	480	$	1,289	$	1,600
Total Adjusted EBITDA										Total Adjusted EBITDA	$	190	$	200	$	349	$	1,289

2221

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our Condensed Consolidated Financial Statements and related Notes and other financial information appearing elsewhere in this quarterly report on Form 10-Q. The following discussion includes statements that are forward-looking statements that are based on the beliefs of our management, as well as assumptions made by and information currently available to our management. ~~See~~We encourage you to review the risks and uncertainties described in the sections titled "Risk Factors" and "Cautionary Statement Regarding Forward-Looking ~~Statements."~~Statements" included in our 2022 Annual Report on Form 10-K and in this quarterly report on Form 10-Q. Our historical results are not necessarily indicative of the results that may be expected for any period in the future, and our interim results are not necessarily indicative of the results we expect for the full fiscal year or any other period.

General

We are a leading provider of high-performance building solutions that meet the demands of builders, remodelers, and homeowners worldwide. We have leveraged our expertise in serving the new home construction, repair and remodeling, and outdoor structures markets to become an industry leader known for innovation, quality, reliability, and ~~reliability.~~sustainability. Our manufacturing facilities are located in the U.S., Canada, Chile, and Brazil.

To serve these markets, we primarily operate in three segments: Siding, OSB, and South America.

~~In March~~During the year ended December 31, 2022, we sold our 50% equity interest in ~~two~~two joint ventures that produce I-joists, and we sold the remaining assets related to ~~Resolute for $59 million.~~ ~~The joint ventures were comprised of Resolute-LP Engineered Wood Larouche Inc. in Larouche, Quebec, and Resolute-LP Engineered Wood St-Prime Limited Partnership in Saint-Prime, Quebec.~~ ~~The total net carrying value~~the EWP segment. Accordingly, the results of our equity method investment at the date of sale was $19 million. We recognized a gain on the sale of $39 million during the nine months ended September 30, 2022, within Income from discontinued operations in the Condensed Consolidated Statements of Income.previously owned

In August 2022, LP completed the sale of the EWP segment assets to the Purchaser in exchange for the Purchaser’s payment to the Company of $217 million in gross cash proceeds after taking into account working capital adjustments (including $3 million received subsequent to September 30, 2022). Upon closing, the Company entered into the TSA with the Purchaser, pursuant to which the Company agreed to support the various activities of the EWP segment for a period not to exceed eight months. We have classified the related assets and liabilities associated with the EWP segment as discontinued operations in our Condensed Consolidated Balance Sheets. The results of our EWP segment have been presented as discontinued operations in our Condensed Consolidated Statements of Income for all periods presented. See "Note 7 ~~– Discontinued~~–Discontinued Operations" ~~of the Notes to the Condensed Consolidated Financial Statements included in Item 1 of this quarterly report on Form 10-Q~~ for additional information.

In May 2023, we acquired a manufacturing facility in Wawa, Ontario, Canada from Wawa OSB, Inc. a subsidiary of Forex Inc., for $80 million, financed by a combination of cash on hand and availability under the Amended Credit Facility . The manufacturing facility is expected to be converted into an LP® SmartSide® Trim & Siding mill. We are evaluating project schedules and market demand to determine when construction will begin. The facility will remain shut down until such construction is completed.

Demand for ~~our~~ Building Products

Demand for our products correlates positively with new home construction and repair and remodeling activity in North America, which historically has been characterized by significant cyclicality. The U.S. ~~Department of~~ Census Bureau reported on October ~~19, 2022,~~18, 2023, that actual ~~single~~single-family housing starts were ~~18% lower~~7% higher for the three months ended September 30, ~~2022,~~2023, and 6%13% lower for the nine months ended September 30, ~~2022,~~2023, as compared to the same periods in ~~2021.~~2022. Actual multi-family housing starts for the three and nine months ended September 30, 2023 were about 28% lower and 11% lower, respectively, as compared to the same period in 2022. Repair and remodeling activity is difficult to reasonably measure, but many indications, ~~including the increase in LP’s retail sales,~~ suggest that repair and remodeling activity is ~~continuing~~moderating and may begin to ~~grow.~~exhibit year-over-year declines.

Future economic conditions in the United States and the demand for homes are uncertain due to inflationary impacts on the economy, including interest rates, employment levels, consumer confidence, and financial markets, among other things. Additionally, we have experienced increases in material prices, supply disruptions, and labor ~~shortages,~~challenges, which ~~will be a challenge as~~ we continue to address as we work to meet the demands of builders, remodelers, and homeowners worldwide. The potential effect of these factors on our future operational and financial performance is uncertain. As

Supply and Demand for Siding

Siding is a ~~result,~~specialty building material and is subject to competition from various siding technologies, including vinyl, stucco, wood, fiber cement, brick, and others. We believe we are the largest manufacturer in the engineered wood siding market. We have consistently grown our ~~past performance may not be indicative~~Siding above the underlying market growth rates. Siding is generally less sensitive to new housing market cyclicality since demand also comes from other markets, including sheds and repair and remodel. Our growth in this market depends upon the continued displacement of ~~future results.~~vinyl, wood,

fiber cement, stucco, bricks, and other alternatives, our product innovation and our technological expertise in wood and wood composites to address the needs of our customers.

Supply and Demand for OSB

OSB is a commodity product, and it is subject to competition from manufacturers worldwide. Product supply is influenced primarily by fluctuations in available manufacturing capacity and imports. The ratio of overall OSB demand to capacity generally drives price. We cannot predict whether the prices of our OSB products will remain at current levels or increase or decrease in the future.

For additional factors affecting our results, refer to the “Overview” within our “Management's Discussion and Analysis of Financial Condition and Results of Operations” section and our “Risk Factors” section contained in our 2021 Annual Report on Form 10-K, and to the “Cautionary Statement Regarding Forward-Looking Statements” section in this quarterly report on Form 10-Q.

Critical Accounting Policies and Significant Estimates

Note 1 of the Notes to the Condensed Consolidated Financial Statements included in our ~~2021~~2022 Annual Report on Form 10-K is a discussion of our significant accounting policies and significant accounting estimates and judgments. Throughout the preparation of the financial statements, we employ significant judgments in the application of accounting principles and methods. These judgments are primarily related to the assumptions used to arrive at various estimates.

There have been no changes in the application of principles, methods, and assumptions used to determine our significant estimates since December 31, ~~2021.~~2022.

Non-GAAP Financial Measures and Other Key Performance Indicators

In evaluating our business, we utilize non-GAAP financial measures that fall within the meaning of SEC Regulation G and Regulation S-K Item 10(e), which we believe provide users of the financial information with additional meaningful comparison to prior reported results. Non-GAAP financial measures do not have standardized definitions and are not defined by U.S. GAAP. In this quarterly report on Form 10-Q, we disclose ~~income~~Income attributed to LP from continuing operations before interest expense, provision for income taxes, depreciation and amortization, and ~~exclude~~excluding stock-based compensation expense, loss on impairment attributed to LP, business exit charges, product-line discontinuance charges, other operating credits and charges, net, loss on early debt extinguishment, investment income, pension settlement charges, and other non-operating items, as Adjusted EBITDA from continuing operations (Adjusted EBITDA), which is a non-GAAP financial measure. We have included Adjusted EBITDA in this report because we view it as an important supplemental measure of our performance and believe that it is frequently used by interested persons in the evaluation of companies that have different financing and capital structures and/or tax rates. We also disclose ~~income~~Income attributed to LP from continuing operations, excluding loss on impairment attributed to LP, business exit charges, product-line discontinuance charges, interest expense outside of normal operations, other operating credits and charges, net, loss on early debt extinguishment, gain (loss) on acquisition, and pension settlement charges, and adjusting for a normalized tax rate as Adjusted Income ~~from continuing operations~~ (Adjusted Income). We also disclose Adjusted Diluted EPS, ~~from continuing operations (Adjusted Diluted EPS),~~which is calculated as Adjusted Income divided by diluted shares outstanding. We believe that Adjusted Diluted EPS and Adjusted Income are useful measures for evaluating our ability to generate earnings and that providing these measures should allow interested persons to more readily compare the earnings for past and future periods. Reconciliations of Adjusted EBITDA, Adjusted Income and Adjusted Diluted EPS to their most directly comparable U.S. GAAP financial measure, Net income, are presented below.

Adjusted EBITDA, Adjusted Income, and Adjusted Diluted EPS are not substitutes for the U.S. GAAP measures of ~~net~~Net income, Income attributed to LP from continuing operations, and ~~net income~~Income attributed to LP from continuing operations per diluted share or for any other U.S. GAAP measures of operating performance. It should be noted that other companies may present similarly titled measures differently, and therefore, as presented by us, these measures may not be comparable to similarly titled measures reported by other companies. Adjusted EBITDA, Adjusted Income, and Adjusted Diluted EPS have material limitations as performance measures because they exclude items that are actually incurred or experienced in connection with the operation of our business.

During the nine months ended September 30, 2023, we updated our definitions of Adjusted EBITDA, Adjusted Income, and Adjusted Diluted EPS to exclude other business exit charges not classified as discontinued operations. Business exit charges consist of inventory and other asset impairment and exit charges related to the exit of other businesses not individually significant. We consider business exit charges to be outside the performance of our

ongoing core business operations and believe that presenting Adjusted EBITDA, Adjusted Income, and Adjusted Diluted EPS excluding business exit charges provides increased transparency as to the operating costs of our current business performance. We did not revise prior years’ Adjusted EBITDA, Adjusted Income, and Adjusted Diluted EPS amounts because there were no significant costs similar in nature to these items.

The following table reconciles Net income to Adjusted EBITDA (dollar amounts in millions):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Net income	Net income	$	226	$	365	$	1,093	$	1,182	Net income	$	118	$	226	$	119	$	1,093
Add (deduct):	Add (deduct):									Add (deduct):
Net loss attributed to noncontrolling interest		—		—		1		1
Net loss attributed to non-controlling interest										Net loss attributed to non-controlling interest	—		—		—		1
Income from discontinued operations, net of income taxes	Income from discontinued operations, net of income taxes	(97)		(33)		(196)		(47)		Income from discontinued operations, net of income taxes	—		(97)		—		(196)
Income attributed to LP from continuing operations	Income attributed to LP from continuing operations	129		332		898		1,135		Income attributed to LP from continuing operations	118		129		119		898
Provision for income taxes	Provision for income taxes	44		111		284		350		Provision for income taxes	44		44		66		284
Depreciation and amortization	Depreciation and amortization	32		28		96		85		Depreciation and amortization	30		32		87		96
Stock-based compensation expense	Stock-based compensation expense	2		5		15		10		Stock-based compensation expense	2		2		9		15
Loss on impairment attributed to LP										Loss on impairment attributed to LP	1		—		1		—
Other operating credits and charges, net										Other operating credits and charges, net	(7)		(7)		16		(17)
Business exit charges										Business exit charges	1		—		35		—

Other operating credits and charges, net		(7)		(2)		(17)		(5)
Loss on early debt extinguishment		—		—		—		11
Interest expense	Interest expense	3		4		9		12		Interest expense	4		3		9		9
Investment income	Investment income	(5)		—		(8)		(1)		Investment income	(4)		(5)		(10)		(8)
Other non-operating items	Other non-operating items	(1)		2		7		2		Other non-operating items	—		(1)		11		7
Pension settlement charges	Pension settlement charges	4		—		4		—		Pension settlement charges	—		4		6		4
Adjusted EBITDA	Adjusted EBITDA	$	200	$	480	$	1,289	$	1,600	Adjusted EBITDA	$	190	$	200	$	349	$	1,289

SEGMENT ADJUSTED EBITDA										SEGMENT ADJUSTED EBITDA
Siding	Siding	$	90	$	73	$	251	$	240	Siding	$	71	$	90	$	198	$	251
OSB	OSB	113		381		1,021		1,300		OSB	120		113		161		1,021
South America	South America	14		37		65		91		South America	6		14		31		65
Other	Other	(7)		(3)		(19)		(11)		Other	—		(7)		(15)		(19)
Corporate	Corporate	(11)		(8)		(29)		(22)		Corporate	(7)		(11)		(26)		(29)
Adjusted EBITDA		$	200	$	480	$	1,289	$	1,600
Total Adjusted EBITDA										Total Adjusted EBITDA	$	190	$	200	$	349	$	1,289

2524

The following table provides the reconciliation of Net income to Adjusted Income (dollar amounts in millions, except per share amounts):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Net income attributed to LP from continuing operations per share - diluted										Net income attributed to LP from continuing operations per share - diluted	$	1.63	$	1.74	$	1.65	$	11.16

Net income	Net income	$	226	$	365	$	1,093	$	1,182	Net income	$	118	$	226	$	119	$	1,093
Add (deduct):	Add (deduct):									Add (deduct):
Net loss attributed to noncontrolling interest		—		—		1		1
Loss from discontinued operations		(97)		(33)		(196)		(47)
Net loss attributed to non-controlling interest										Net loss attributed to non-controlling interest	—		—		—		1
Income from discontinued operations, net of income taxes										Income from discontinued operations, net of income taxes	—		(97)		—		(196)
Income attributed to LP from continuing operations	Income attributed to LP from continuing operations	129		332		898		1,135		Income attributed to LP from continuing operations	118		129		119		898
Loss on impairment attributed to LP										Loss on impairment attributed to LP	1		—		1		—
Other operating credits and charges, net										Other operating credits and charges, net	(7)		(7)		16		(17)
Business exit charges										Business exit charges	1		—		35		—

Other operating credits and charges, net		(7)		(2)		(17)		(5)
Loss on early debt extinguishment		—		—		—		11
Pension settlement charges	Pension settlement charges	4		—		4		—		Pension settlement charges	—		4		6		4
Reported tax provision	Reported tax provision	44		111		284		350		Reported tax provision	44		44		66		284
Adjusted income before tax	Adjusted income before tax	170		442		1,171		1,492		Adjusted income before tax	157		170		242		1,171
Normalized tax provision at 25%	Normalized tax provision at 25%	(42)		(111)		(293)		(373)		Normalized tax provision at 25%	(39)		(42)		(61)		(293)
Adjusted Income	Adjusted Income	$	127	$	331	$	878	$	1,119	Adjusted Income	$	117	$	127	$	182	$	878
Diluted shares outstanding	Diluted shares outstanding	74		94		80		101		Diluted shares outstanding	72		74		72		80
Diluted net income attributed to LP from continuing operations per share		$	1.74	$	3.52	$	11.16	$	11.26
Adjusted Diluted EPS	Adjusted Diluted EPS	$	1.72	$	3.52	$	10.91	$	11.08	Adjusted Diluted EPS	$	1.62	$	1.72	$	2.51	$	10.91

Key Performance Indicators

In addition, management monitors certain key performance indicators to evaluate our business performance, which include our Overall Equipment Effectiveness (OEE) and our sales volume relative to housing starts, as provided by reports from the U.S. ~~Department of Census.~~Census Bureau.

The following tables set forth: (1) housing starts, (2) our North American sales volume, and (3) OEE. We consider the following items to be key performance indicators because LP’s management uses these metrics to evaluate our business and trends, measure our performance, and make strategic decisions, and believes that the key performance indicators presented provide additional perspective and insights when analyzing the core operating performance of LP. These key performance indicators should not be considered superior to, as a substitute for, or as an alternative to, and should be considered in conjunction with, the U.S. GAAP financial measures presented herein. These measures may not be comparable to similarly-titled performance indicators used by other companies.

We monitor housing starts, which is a leading external indicator of residential construction in the United States that correlates with the demand for many of our products. We believe that this is a useful measure for evaluating our results and that providing this measure should allow interested persons to more readily compare our sales volume for past and future periods to an external indicator of product demand. Other companies may present housing start data differently, and therefore, housing starts data presented by us may not be comparable to similarly-titled indicators reported by other companies.

2625


		Three Months Ended September 30,		Nine Months Ended September 30,
(thousands of units)						(thousands of units)	Three Months Ended September 30,		Nine Months Ended September 30,
		2022	2021	2022	2021		2023	2022	2023	2022
Housing starts1:	Housing starts1:					Housing starts1:
Single-Family	Single-Family	242	296	812	861	Single-Family	258	242	708	812
Multi-Family	Multi-Family	146	123	416	352	Multi-Family	104	144	369	414
		388	419	1,228	1,213		362	386	1,077	1,225


1 Actual U.S. ~~Housing~~housing starts data reported by U.S. Census Bureau as published through October ~~19, 2022.~~18, 2023.

We monitor sales volumes for our products in our Siding, OSB, and ~~OSB~~South America segments, which we define as the number of units of our products sold within the applicable period. Evaluating sales volume by product type helps us identify and address changes in product demand, broad market factors that may affect our performance, and opportunities for future growth. It should be noted that other companies may present sales volumes differently and, therefore, as presented by us, sales volumes may not be comparable to similarly-titled measures reported by other companies. We believe that sales volumes can be a useful measure for evaluating and understanding our business.

The following table sets forth sales volumes for the three and nine months ended September 30, ~~2022~~2023 and ~~2021:~~2022:


		Three Months Ended September 30, 2022				Three Months Ended September 30, 2021					Three Months Ended September 30, 2023				Three Months Ended September 30, 2022
Sales Volume	Sales Volume	Siding	OSB	South America	Total	Siding	OSB	South America	Total	Sales Volume	Siding	OSB	South America	Total	Siding	OSB	South America	Total
Siding Solutions (MMSF)	Siding Solutions (MMSF)	471	—	9	480	432	—	11	443	Siding Solutions (MMSF)	398	—	6	405	471	—	9	480
OSB - Structural Solutions (MMSF)										OSB - Structural Solutions (MMSF)	—	412	115	528	—	460	127	587
OSB - commodity (MMSF)	OSB - commodity (MMSF)	—	544	—	544	—	533	—	533	OSB - commodity (MMSF)	—	401	—	401	—	544	—	544
OSB - Structural Solutions (MMSF)		—	460	127	587	—	419	149	567

		Nine Months Ended September 30, 2022				Nine Months Ended September 30, 2021					Nine Months Ended September 30, 2023				Nine Months Ended September 30, 2022
Sales Volume	Sales Volume	Siding	OSB	South America	Total	Siding	OSB	South America	Total	Sales Volume	Siding	OSB	South America	Total	Siding	OSB	South America	Total
Siding Solutions (MMSF)	Siding Solutions (MMSF)	1,340	—	25	1,365	1,241	—	79	1,320	Siding Solutions (MMSF)	1,158	—	25	1,183	1,340	—	25	1,365
OSB - Structural Solutions (MMSF)										OSB - Structural Solutions (MMSF)	—	1,151	370	1,521	—	1,499	420	1,919
OSB - commodity (MMSF)	OSB - commodity (MMSF)	—	1,441	—	1,441	—	1,470	—	1,470	OSB - commodity (MMSF)	—	1,137	—	1,137	—	1,441	—	1,441
OSB - Structural Solutions (MMSF)		—	1,499	420	1,919	—	1,222	418	1,640

We measure ~~the~~ OEE of each of our mills to track improvements in the utilization and productivity of our manufacturing assets. OEE is a composite metric that considers asset uptime (adjusted for capital project downtime and similar events), production rates, and finished product quality. ~~It should be noted that other companies may present OEE differently and, therefore, as presented by us, OEE may not be comparable to similarly-titled measures reported by other companies.~~ We believe that when used in conjunction with other metrics, OEE can be a useful measure for evaluating our ability to generate profits, and that providing this measure should allow interested persons to more readily monitor operational improvements. OEE for the three and nine months ended September 30, ~~2022~~2023 and ~~2021,~~2022, for each of our segments is listed below:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Siding	Siding	76	%	74	%	75	%	73	%	Siding	77	%	76	%	77	%	75	%
OSB	OSB	70	%	74	%	72	%	75	%	OSB	74	%	70	%	75	%	72	%
South America	South America	64	%	80	%	72	%	77	%	South America	74	%	64	%	74	%	72	%

Results of Operations

Our results of operations ~~are separately discussed below~~ for each of our segments are discussed below, as ~~well as~~are the results of operations for the ~~“Other”~~“other” category, which comprises other products that are not individually significant. See ~~Note~~"Note 17 - Selected Segment Data" of the Notes to the

Condensed Consolidated Financial Statements included in ~~Item~~"Item 1 - Financial Statements" of this quarterly report on Form 10-Q for further information regarding our segments.

Siding

The Siding segment serves diverse end markets with a broad product offering of engineered wood siding, trim, and fascia, including LP® SmartSide® Trim & Siding, LP® SmartSide® ExpertFinish® Trim & Siding, LP BuilderSeries® Lap Siding, and LP® Outdoor Building Solutions®TM (collectively referred to as Siding Solutions).

Segment Net sales ~~Adjusted EBITDA,~~ and Adjusted EBITDA ~~margin~~ for this segment were as follows (dollar amounts in millions):


		Three Months Ended September 30,								Nine Months Ended September 30,									Three Months Ended September 30,						Nine Months Ended September 30,
		2022			2021			% Change		2022			2021			% Change			2023		2022		% Change		2023		2022		% Change
Net sales	Net sales	$	394		$	312		26	%	$	1,083		$	889		22	%	Net sales	$	345	$	394	(13)	%	$	996	$	1,083	(8)	%
Adjusted EBITDA	Adjusted EBITDA	90			73			24	%	251			240			4	%	Adjusted EBITDA	71		90		(21)	%	198		251		(21)	%
Adjusted EBITDA margin		23		%	23		%			23		%	27		%

~~Sales~~Net sales in this segment by product line were as follows (dollar amounts in millions):


		Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended September 30,						Nine Months Ended September 30,
		2022		2021		% Change		2022		2021		% Change			2023		2022		% Change		2023		2022		% Change
Siding Solutions	Siding Solutions	$	393	$	310	27	%	$	1,079	$	879	23	%	Siding Solutions	$	342	$	393	(13)	%	$	989	$	1,079	(8)	%
Other	Other	1		3		(37)	%	4		9		(55)	%	Other	2		1		58	%	7		4		48	%
Total	Total	$	394	$	312	26	%	$	1,083	$	889	22	%	Total	$	345	$	394	(13)	%	$	996	$	1,083	(8)	%

Percent changes in average Net sales prices and unit shipments for the three and nine months ended September 30, ~~2022,~~2023, compared to the corresponding periods in ~~2021,~~2022, were as follows:

Three Months Ended
September 30, 2022 versus 2021 Nine Months Ended
September 30, 2022 versus 2021
Average Net
Selling Price Unit
Shipments Average Net
Selling Price Unit
Shipments
Siding Solutions 16 % 9 % 14 % 8 %


	Three Months Ended September 30, 2023 versus 2022				Nine Months Ended September 30, 2023 versus 2022
	Average Net Selling Price		Unit Shipments		Average Net Selling Price		Unit Shipments
Siding Solutions	3	%	(16)	%	6	%	(14)	%

The ~~combined~~ effects of list price increases ~~and improving mix of innovative products~~ drove year-over-year increases in the average net selling price for the three and nine months ended September 30, ~~2022.~~2023. The volume ~~increases~~decreases for the three and nine months ended September 30, ~~2022 are attributable to steady customer demand~~2023 were driven by record results in the comparable periods and ~~production increases made possible by~~challenging new and existing home selling markets in the ~~ongoing ramp-up of the Houlton facility as well as increasing operational efficiency at other Siding facilities.~~current periods.

Adjusted EBITDA decreased year-over-year ~~increase~~by $19 million in the third quarter of ~~$17~~2023, reflecting the net impact of lower volumes and $5 million ~~for the three months ended September 30, 2022 reflects price and volume growth largely~~of press rebuild costs, partially offset by ~~$32~~higher average selling prices and $9 million ofin lower inflationary costs including freight, raw ~~material, freight~~materials, and ~~labor inflation and $4 million of facility maintenance costs. The year-over-year increase in~~labor. Adjusted EBITDA ~~of $11~~decreased year-over-year by $53 million for the nine months ended September 30, ~~2022~~2023, which reflects ~~price and volume growth, offset primarily by $89 million~~the net impact of ~~raw material, freight, and labor inflation,~~lower volumes, $8 million ~~of facility maintenance costs, and $19 million of~~in discretionary investments into support of future growth ~~including~~(including siding mill conversions and sales and marketing ~~costs.~~costs), and $5 million in press rebuild costs, partially offset by higher average selling prices and $13 million in lower inflationary costs (including freight, raw materials, and labor).

OSB

The OSB segment manufactures and distributes OSB structural panel products, including our value-added OSB portfolio known as LP® Structural Solutions (which includes LP® TechShield® Radiant Barrier, LP WeatherLogic® Air & Water Barrier, LP Legacy® Premium Sub-Flooring, ~~and~~LP NovaCore®Thermal Insulated Sheathing, LP® FlameBlock® Fire-Rated ~~Sheathing)~~Sheathing, and LP® TopNotch® ~~Sub-Flooring.~~350 Durable Sub-Flooring). OSB is manufactured using wood strands arranged in layers and bonded with resins.

Segment Net sales ~~Adjusted EBITDA,~~ and Adjusted EBITDA ~~margin~~ for this segment were as follows (dollar amounts in millions):


		Three Months Ended September 30,								Nine Months Ended September 30,									Three Months Ended September 30,						Nine Months Ended September 30,
		2022			2021			% Change		2022			2021			% Change			2023		2022		% Change		2023		2022		% Change
Net sales	Net sales	$	388		$	600		(35)	%	$	1,805		$	1,917		(6)	%	Net sales	$	335	$	388	(14)	%	$	754	$	1,805	(58)	%
Adjusted EBITDA	Adjusted EBITDA	113			381			(70)	%	1,021			1,300			(21)	%	Adjusted EBITDA	120		113		6	%	161		1,021		(84)	%
Adjusted EBITDA margin		29		%	63		%			57		%	68		%

~~Sales~~Net sales in this segment by product line were as follows (dollar amounts in millions):


		Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended September 30,						Nine Months Ended September 30,
		2022		2021		% Change		2022		2021		% Change			2023		2022		% Change		2023		2022		% Change
OSB - Structural Solutions	OSB - Structural Solutions	$	205	$	307	(33)	%	$	995	$	912	9	%	OSB - Structural Solutions	$	174	$	205	(15)	%	$	412	$	995	(59)	%
OSB - commodity	OSB - commodity	180		290		(38)	%	801		997		(20)	%	OSB - commodity	157		180		(13)	%	332		801		(59)	%
Other	Other	3		4		(11)	%	9		9		1	%	Other	5		3		35	%	9		9		—	%
Total	Total	$	388	$	600	(35)	%	$	1,805	$	1,917	(6)	%	Total	$	335	$	388	(14)	%	$	754	$	1,805	(58)	%

Percent changes in average ~~net~~Net sales prices and unit shipments for the three and nine months ended September 30, ~~2022,~~2023, compared to the corresponding periods in ~~2021,~~2022, were as follows:

OSB average net selling prices decreased year-over-year by 39% on 5% higher OSB sales volume for the three months ended September 30, 2022, resulting in a 35% decrease in net sales. OSB average net selling prices decreased year-over-year by 14% on 9% higher OSB sales volume for the nine months ended September 30, 2022, resulting in a 6% decrease in net sales.


	Three Months Ended September 30, 2023 versus 2022				Nine Months Ended September 30, 2023 versus 2022
	Average Net Selling Price		Unit Shipments		Average Net Selling Price		Unit Shipments
OSB - Structural Solutions	(5)	%	(10)	%	(46)	%	(23)	%
OSB - commodity	18	%	(26)	%	(47)	%	(21)	%

The year-over-year Net sales decrease ~~in Adjusted EBITDA~~ of ~~$268~~$53 million for the three months ended September 30, ~~2022~~2023 reflects ~~$252~~a $28 million increase in OSB prices, a $33 million decrease in sales volumes primarily from ~~lower prices, $25~~market curtailments, and $43 million less production volume due to the conversion of increased raw material and wage inflation, and $10 million facility maintenance costs, partially offset by $29 million from higher sales volume and the positive incremental margin generated by Structural Solutions products comparedour Sagola, Michigan mill to ~~commodity OSB products.~~siding production. The year-over-year Net sales decrease ~~in Adjusted EBITDA~~ of ~~$279~~$1,051 million for the nine months ended September 30, ~~2022~~2023 reflects ~~$325~~an $813 million decrease in OSB prices, a $115 million decrease in sales volumes primarily from market curtailments, and a $98 million decrease related to production volumes from the conversion of the Sagola mill to siding production.

Adjusted EBITDA increased year-over-year by $7 million in the third quarter of 2023, reflecting the net impact of higher OSB commodity prices and lower mill-related costs, partially offset by lower sales volumes. Adjusted EBITDA decreased year-over-year by $860 million for the nine months ended September 30, 2023, which reflects the net impact of lower OSB commodity prices ~~$68 million of increased raw material~~ and ~~wage inflation, and $12 million facility maintenance costs,~~sales volumes, partially offset ~~partially~~ by ~~$140 million from higher sales volume.~~lower mill-related costs.

South America

Our South America segment manufactures and distributes OSB structural panel and siding products in South America and certain export markets. This segment has manufacturing operations in two countries, Chile and Brazil, and operates sales offices in Argentina, Brazil, Chile, ~~Brazil, Peru,~~ Colombia, ~~Argentina,~~Mexico, Paraguay, and ~~Paraguay.~~Peru.

Segment Net sales ~~Adjusted EBITDA,~~ and Adjusted EBITDA ~~margin~~ for this segment were as follows (dollar amounts in millions):


		Three Months Ended September 30,								Nine Months Ended September 30,									Three Months Ended September 30,						Nine Months Ended September 30,
		2022			2021			% Change		2022			2021			% Change			2023		2022		% Change		2023		2022		% Change
Net sales	Net sales	$	53		$	76		(30)	%	$	190		$	203		(6)	%	Net sales	$	45	$	53	(16)	%	$	153	$	190	(20)	%
Adjusted EBITDA	Adjusted EBITDA	14			37			(62)	%	65			91			(28)	%	Adjusted EBITDA	6		14		(54)	%	31		65		(53)	%
Adjusted EBITDA margin		26		%	49		%			34		%	45		%

2928

~~Sales~~Net sales in this segment by product ~~line~~ were as follows (dollar amounts in millions):


		Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended September 30,						Nine Months Ended September 30,
		2022		2021		% Change		2022		2021		% Change			2023		2022		% Change		2023		2022		% Change
OSB - Structural Solutions	OSB - Structural Solutions	$	47	$	65	(28)	%	$	172	$	171	1	%	OSB - Structural Solutions	$	40	$	47	(16)	%	$	132	$	172	(23)	%
Siding	Siding	6		9		(32)	%	18		29		(38)	%	Siding	5		6		(20)	%	19		18		6	%
Other	Other	—		2		(67)	%	—		3		(97)	%	Other	—		—		(11)	%	2		—		404	%
Total	Total	$	53	$	76	(30)	%	$	190	$	203	(6)	%	Total	$	45	$	53	(16)	%	$	153	$	190	(20)	%

Percent changes in average Net sales ~~prices~~price and unit shipments for the three and nine months ended September 30, ~~2022,~~2023, compared to the corresponding periods in ~~2021,~~2022, were as follows:


		Three Months Ended September 30, 2022 versus 2021				Nine Months Ended September 30, 2022 versus 2021					Three Months Ended September 30, 2023 versus 2022				Nine Months Ended September 30, 2023 versus 2022
		Average Net Selling Price		Unit Shipments		Average Net Selling Price		Unit Shipments			Average Net Selling Price		Unit Shipments		Average Net Selling Price		Unit Shipments
OSB - Structural Solutions	OSB - Structural Solutions	(19)	%	(14)	%	—	%	—	%	OSB - Structural Solutions	(7)	%	(9)	%	(13)	%	(12)	%
Siding	Siding	(18)	%	(21)	%	(13)	%	(68)	%	Siding	18	%	(32)	%	5	%	—	%

~~Net sales in~~ South America ~~decreased year-over-year by 30% for the three months ended September 30, 2022, predominantly driven by lower OSB sales volumes and $10 million of unfavorable currency movements.~~ Net sales decreased year-over-year by ~~6% for the nine months ended September 30, 2022, due in large part to lower Siding sales volumes and prices.~~

~~The year-over-year decrease in Adjusted EBITDA of $23~~$8 million and ~~$26~~$38 million for the three and nine months ended September 30, ~~2022,~~2023, respectively, ~~reflects~~predominantly driven by lower OSB sales volumes and average selling prices.

The year-over-year decreases in Adjusted EBITDA of $7 million and $34 million for the three and nine months ended September 30, 2023, respectively, reflect the lower sales volumes ~~higher raw material costs,~~ and ~~unfavorable currency movements.~~average selling prices (described above) and equipment relocation cost of $3 million.

Other ~~Products~~

Our ~~Other~~other products segment includes the off-site framing operation Entekra Holdings LLC (Entekra), remaining timber and timberlands, and other minor products, services, and closed operations, which do not qualify as discontinued operations. ~~Other net sales were $17~~During the second quarter of 2023, we announced the shutdown of Entekra and recognized business exit charges of $1 million and ~~$72~~$35 million for the three and nine months ended September 30, ~~2022, respectively, as compared to $30~~2023, respectively. These charges consisted of severance costs, inventory obsolescence, impairment of property, plant, and equipment, impairment of right-of-use lease assets, and impairment definite-lived intangible assets.

Other Net sales were $4 million and ~~$73 million for the corresponding periods in 2021. The decrease in net sales for the three months ended September 30, 2022 is primarily due to lower Entekra revenue.~~

~~Adjusted EBITDA was $(7) million and $(19)~~$21 million for the three and nine months ended September 30, ~~2022,~~2023, respectively, as compared to ~~$(3)~~$17 million and ~~$(11)~~$72 million for the corresponding periods in ~~2021.~~2022. The year-over-year decrease in other Net sales for the three and nine months ended September 30, 2023 is primarily due to lower Entekra sales volumes as a result of the aforementioned shutdown.

Adjusted EBITDA was $0 million and $(15) million for the three and nine months ended September 30, 2023, respectively, as compared to $(7) million and $(19) million for the corresponding periods in 2022, respectively.

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses were ~~$67~~$58 million and ~~$196~~$191 million for the three and nine months ended September 30, ~~2022,~~2023, respectively, compared to ~~$58~~$67 million and ~~$155~~$196 million for the corresponding periods in ~~2021.~~2022. The ~~increase~~year-over-year decrease in ~~2022~~Selling, general, and administrative expenses is ~~due to increased labor, travel, sales and marketing, and corporate overhead costs primarily~~ driven by ~~the reduction of restrictions related to the COVID-19 pandemic and costs associated with stock compensation and performance incentives.~~lower incentive based compensation.

Income Taxes

We recognized an estimated tax provision from continuing operations of $44 million and ~~$284~~$66 million for the three and nine months ended September 30, ~~2022,~~2023, respectively, compared to ~~$111~~$44 million and ~~$350~~$284 million for the corresponding periods of ~~2021.~~2022. The total effective tax rate for continuing operations for the three and nine months ended September 30, ~~2022,~~2023, was 27% and 36%, respectively, compared to 26% and 24% ~~compared to 25% and 24%~~, respectively, for the comparable periods in ~~2021, respectively.~~2022. Each quarter the income tax accrual is adjusted to the latest estimate and the difference

from the previously accrued ~~year-to-date~~year to date balance is recorded in the current quarter. For ~~2022~~2023 the primary differences between the U.S. statutory rate of 21% and ~~2021,~~the effective rate relates to the $22 million tax expense impact from a change in indefinite reinvestment assertion on Chile and Brazil earnings, which is discussed below. For 2022, the primary difference between the U.S. statutory rate of 21% and the effective rate relates to state income tax.

In the second quarter of 2023, management changed its intent and will no longer assert indefinite reinvestment related to undistributed earnings in Chile and Brazil. As a result, we established a net $22 million deferred tax liability for the expected tax consequences of repatriating all beginning-of-year cumulative Chile and Brazil earnings, which was recorded as an expense in the second quarter of 2023. Additionally, the incremental tax expense pertaining to the repatriation of current-year earnings in Chile and Brazil is accounted for within the estimated annual effective income tax rate.

Legal and Environmental Matters

For a discussion of legal and environmental matters involving us and the potential impact thereof on our financial position, results of operations, and cash flows, see Items 3, 7, and 8 in our ~~2021~~2022 Annual Report on Form 10-K and ~~Note~~"Note 11 - Commitments and Contingencies" of the Notes to the Condensed Consolidated Financial Statements included in ~~Item~~"Item 1 - Financial Statements" of this quarterly report on Form 10-Q.

Liquidity and Capital Resources

Overview

Our principal sources of liquidity are existing cash and investment balances, cash generated by our operations, and our ability to borrow under such credit facilities as we may have in effect from time to time. We assess our liquidity in terms of our ability to generate cash to fund our short- and long-term cash requirements. As such, we project our anticipated cash requirements as well as cash flows generated from operating activities to meet those needs. We anticipate long-term cash uses may also include strategic acquisitions. On a long-term basis, we will continue to rely on our credit facility for any long-term funding not provided by operating cash flows. We may also, from time to time, issue and sell equity, debt, or hybrid securities or engage in other capital market transactions.

Our principal uses of liquidity are paying the costs and expenses associated with our operations, servicing outstanding indebtedness, paying dividends, and making capital expenditures. We may also, from time to time, prepay or repurchase outstanding indebtedness or shares or acquire assets or businesses that are complementary to our operations. Any such repurchases may be commenced, suspended, discontinued, or resumed, and the method or methods of effecting any such repurchases may be changed, at any time, or from time to time, without prior notice.

We expect to fund our capital expenditures over at least the next 12 months through cash on hand, cash generated from operations, and available borrowing under our Amended Credit Facility, ~~(as defined below),~~ as necessary.

Operating Activities

During the nine months ended September 30, ~~2022~~2023 and ~~2021,~~2022, cash provided by operations was ~~$1,103~~$157 million and ~~$1,283~~$1,103 million, respectively. The decrease in cash provided by operations was primarily related ato lower income from operations, ~~offset by improvements~~increases in working ~~capital.~~capital, and timing of cash paid for income taxes.

Investing Activities

During the nine months ended September 30, ~~2022~~2023 and ~~2021,~~2022, cash used in investing activities was $312 million and $14 million, ~~and $131~~respectively. During the nine months ended September 30, 2023, we paid $80 million ~~respectively.~~to acquire the assets owned by Wawa OSB, Inc. During the nine months ended September 30, 2022, we received $265 million in proceeds from sales of assets, primarily associated with the sale of the EWP segment assets and the sale of our 50% equity interest in two joint ventures.

Capital expenditures for the nine months ended September 30, 2023 and 2022, ~~and 2021,~~ were ~~$282~~$236 million and ~~$133~~$282 million, respectively, primarily related to siding conversion expenditures and growth and maintenance capital.

Financing Activities

During the nine months ended September 30, 2023, cash used in financing activities was $61 million. We paid cash dividends of $52 million and used $10 million to repurchase stock from employees in connection with income tax withholding requirements associated with our employee stock-based compensation plans. During the nine months ended September 30, 2023, we borrowed and subsequently repaid $80 million from our Amended Credit Facility.

During the nine months ended September 30, 2022, cash used in financing activities was $968 million. On November 2, 2021, LP's Board of Directors authorized a share repurchase plan under which LP may repurchase shares of its common stock totaling up to $500 million (the Second 2021 Share Repurchase Program). In May 2022, LP's Board of Directors authorized a share repurchase plan under which LP was authorized to repurchase shares of LP's common stock totaling up to $600 million (the 2022 Share Repurchase Program). During the nine months ended September 30, 2022, we used $900 million to repurchase shares of LP common stock ($500 million from the ~~Second~~share repurchase program approved by the Board of Directors on November 2, 2021 ~~Share Repurchase Program~~ and $400 million from the 2022 Share Repurchase ~~Program)~~Program (defined below)). Additionally, we paid cash dividends of $53 million and used $15 million to repurchase stock from employees in connection with income tax withholding requirements associated with our employee stock-based compensation plans.

During the nine months ended September 30, 2021, cash used in financing activities was $1,058 million. During the nine months ended September 30, 2021, we used $300 million to repurchase shares of LP common stock under the share repurchase program authorized by LP's Board of Directors in 2020 and $687 million to repurchase shares of LP common stock under the repurchase program authorized by LP's Board of Directors in May 2021. Additionally, we paid cash dividends of $50 million and used $6 million to repurchase stock from employees in connection with income tax withholding requirements associated with our employee stock-based compensation plans. In March 2021, we issued $350 million in aggregate principal amount of the 2029 Senior Notes, and in February 2021, LP

delivered to holders of the 2024 Senior Notes a conditional notice of redemption to redeem on March 27, 2021, all of the 2024 Senior Notes outstanding at a redemption price of 102.438% of the principal amount thereof plus accrued and unpaid interest up to, but not including, the redemption date. The redemption notice became irrevocable on March 11, 2021, and the 2024 Senior Notes were fully redeemed on March 27, 2021. In connection with these aforementioned financing activities, we paid $13 million in redemption premiums and debt issuance costs.

Credit Facility and Letter of Credit Facility

In ~~June 2021 and August 2021, we~~November 2022, LP entered into the ~~third and fourth amendments to our revolving credit facility, dated as of June 27, 2019 (Credit Facility),~~Credit Agreement, with American AgCredit, PCA, as administrative agent and sole lead arranger, and CoBank, ACB, as letter of credit issuer, ~~(as amended,~~relating to the Amended Credit ~~Facility).~~Facility. The ~~Amended~~ Credit ~~Facility~~Agreement provides for a revolving credit facility in the principal amount of up to $550 million, with a $60 million sub-limit for letters of credit. ~~The Amended~~All loans under the Credit ~~Facility, and all loans thereunder,~~Agreement become due on ~~June 8, 2027.~~November 29, 2028. As of September 30, ~~2022,~~2023, we had no ~~amounts~~ outstanding borrowings under ~~the~~our Amended Credit Facility.

The ~~Amended~~ Credit ~~Facility~~Agreement contains various restrictive covenants and customary events of ~~default,~~default. The breach of restrictive covenants or the occurrence of ~~which~~any other event of default under the Credit Agreement could result in the acceleration of our obligation to repay the indebtedness outstanding thereunder. The ~~Amended~~ Credit ~~Facility~~Agreement also contains financial covenants that require us and our consolidated subsidiaries to have, as of the end of each quarter, a capitalization ratio (i.e., funded debt less unrestricted cash to total capitalization) of no more than 57.5%. As of September 30, ~~2022,~~2023, we were in compliance with all financial covenants under the ~~Amended~~ Credit ~~Facility.~~Agreement.

In March 2020, LP entered into the Letter of Credit Facility, which provides for the funding of letters of credit up to an aggregate outstanding amount of $20 million, which may be secured by certain cash collateral of LP. The Letter of Credit Facility ~~includes~~provides for an unused commitment fee, due quarterly, ranging from 0.50% to 1.875% of the daily available amount to be drawn on each letter of credit issued under the Letter of Credit Facility. The Letter of Credit Facility is subject to similar affirmative, negative, and financial covenants as those set forth in the ~~Amended~~ Credit ~~Facility,~~Agreement, including the capitalization ratio covenant. As of September 30, ~~2022,~~2023, we were in compliance with all ~~financial~~ covenants under the Letter of Credit Facility.

Other Liquidity Matters

Off-Balance Sheet Arrangements

As of September 30, ~~2022,~~2023, we had standby letters of credit of ~~$13~~$13.7 million outstanding related to collateral for environmental impact on owned properties, a deposit for a forestry license, and insurance collateral, including workers' compensation.

Potential Impairments

We review the carrying values of our long-lived assets for potential impairments and believe we have adequate support for the carrying values of our long-lived assets as of September 30, ~~2022.~~2023. In April 2023, we announced the shutdown of Entekra resulting in pre-tax, non-cash charges of $31 million for the nine months ended September 30, 2023. See further discussion in “Note 8 - Business Exit Charges.”

If demand and pricing for our products fall to levels significantly below cycle average demand and pricing, should we decide to invest capital in alternative projects, or should changes occur related to our wood supply for our mills, it is possible that future impairment charges will be required. As of September 30, ~~2022,~~2023, there were no indications of impairment.

net cash flows, we may be required to record impairment charges in connection with decisions to dispose of assets. During the nine months ended September 30, 2023, we recorded impairment charges of $13 million and $3 million related to property, plant, and equipment and operating lease assets, respectively, related to Entekra which were written down to fair value based on Level 2 inputs under ASC 820, using quoted market prices. See further discussion in “Note 8 - Business Exit Charges.”

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to fluctuations in foreign currency exchange rates, commodity prices and interest rates which could impact our results of operations and financial condition.

Foreign Currency Risk

Our international operations have exposure to foreign currency rate risks, primarily due to fluctuations in the Canadian dollar, the Brazilian real, and the Chilean peso. Although we have in the past entered into foreign exchange contracts associated with certain of our indebtedness and may continue to enter into foreign exchange contracts associated with major equipment purchases to manage a portion of the foreign currency rate risk, we historically have not entered into material currency rate hedges with respect to our exposure from operations, although we may do so in the future.

Commodity Price Risk

Some of our products are sold as commodities, and therefore sales prices fluctuate daily based on market factors over which we have little or no control. The most significant commodity product we sell is OSB. There have been no material changes to the assumed production capacity and annual average price sensitivity previously disclosed under the caption “Item 7A. Quantitative and Qualitative Disclosures about Market Risk” in our ~~2021~~2022 Annual Report on Form 10-K. We historically have not entered into material commodity futures and swaps, although we may do so in the future.

Interest Rate Risk

We are exposed to market risk associated with changes in interest rates on our variable rate long-term debt. As of September 30, ~~2022, we had~~2023, there were no outstanding ~~amounts borrowed~~borrowings under our Amended Credit Facility. We do not currently have any derivative or hedging arrangements, or other known exposures, to changes in interest rates.

~~We historically have not entered into material commodity futures and swaps, although we may do so in the future.~~

ITEM 4.CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of September 30, ~~2022,~~2023, our Chief Executive Officer and Chief Financial Officer carried out, with the participation of the Company's management, a review and evaluation of the effectiveness of our disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Exchange Act. Based upon this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of September 30, ~~2022,~~2023, LP’s disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during our most recently completed fiscal quarter, ended September 30, ~~2022,~~2023, that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

PART II-OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The description of certain legal and environmental matters involving LP set forth in ~~Item~~"Item 1 - Financial Statements" of this quarterly report on Form 10-Q under ~~Note~~"Note 11 - Commitments and Contingencies" of the Notes to the Condensed Consolidated Financial Statements contained herein is incorporated herein by reference.

ITEM 1A.RISK FACTORS

In addition to the other information set forth in this quarterly report on Form 10-Q, an investor should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” inof the Company’s ~~2021~~2022 Annual Report on Form 10-K and Part II, "Item 1A. Risk Factors" in the Company's quarterly ~~reports~~report on Form 10-Q for the ~~quarters~~quarter ended March 31, ~~2022 and June 30, 2022.~~2023. There have been no material changes to the risk factors previously disclosed under the caption "Item 1A. Risk Factors" in Part I of our ~~2021~~2022 Annual Report on Form 10-K and in Part II of our quarterly ~~reports~~report on Form 10-Q for the ~~quarters~~quarter ended March 31, ~~2022 and June 30, 2022.~~2023.

The risks as described in our ~~2021~~2022 Annual Report on Form 10-K and our quarterly ~~reports~~report on Form 10-Q for the ~~quarters~~quarter ended March 31, ~~2022 and June 30, 2022,~~2023, are not the only risks facing the Company. Additional risks and uncertainties not currently known to us or that we currently deem immaterial also may materially adversely affect our business, financial condition, operating results, or cash flows.

ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On May 3, 2022, LP's Board of Directors authorized ~~the 2022 Share Repurchase Program. Repurchases of such shares may be effected, among other ways, in open market transactions, privately negotiated transactions, or through~~ a series of forward purchase agreements, option contracts, or similar agreements and contracts, including a Rule 10b5-1 plan, in accordance with the rules and regulations of the SEC. The timing and amount ofshare repurchase ~~transactions are subject to the Company’s discretion and will depend on a variety of factors, including market and business conditions and other considerations.~~

~~The following amounts of our common stock were repurchased under this authorization during the quarter ended September 30, 2022:~~

Period Total Number of Shares Purchased Average Price Paid Per Share
Total Number of Shares Purchased as Part of Publicly Announced Purchase Plans or Programs1
Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs
(in millions)
July 1, 2022 - July 31, 2022 2,702,207 $ 57.18 2,702,207 $ 371
August 1, 2022 - August 31, 2022 2,730,497 $ 60.00 2,730,497 $ 207
September 1, 2022 - September 30, 2022 126,763 $ 54.96 126,763 $ 200
Total for Third Quarter 2022 5,559,467 5,559,467

1 ~~On May 3, 2022, LP's Board of Directors authorized the 2022 Share Repurchase Program~~program under which LP ~~may~~was authorized to repurchase shares of its common stock totaling up to $600 ~~million.~~million (the 2022 Share Repurchase Program). No purchases were made under the 2022 Share Repurchase Program during the third quarter ended September 30, 2023. As of September 30, ~~2022,~~2023, LP had ~~used~~repurchased common stock totaling $400 million under the 2022 Share Repurchase Program. LP may initiate, discontinue, or resume purchases of its common stock under the 2022 Share Repurchase Program in the open market, in block, and in privately negotiated transactions, including under Rule 10b5-1 plans, at times and in such amounts as management deems appropriate without prior notice, subject to market and business conditions, regulatory requirements, and other factors.

ITEM 5.OTHER INFORMATION

On September 14, 2023, Lizanne Gottung, a director of LP, entered into a Rule 10b5-1 trading arrangement for the sale of shares of LP’s common stock (the Plan). The Plan is intended to satisfy the affirmative defense provided in Rule 10b5-1(c) of the Exchange Act. The Plan provides for the potential sale of shares of LP’s common stock, including upon the vesting and settlement of restricted stock units between December 14, 2023 and December 31, 2024. The aggregate number of shares of common stock that will be available for sale under the Plan is 14,404, which includes the aggregate number of shares underlying Ms. Gottung’s restricted stock units that may be sold.

Aside from Ms. Gottung, none of our other directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the quarter ended September 30, 2023.

ITEM 6.EXHIBITS


~~2.1~~			Asset Purchase Agreement, dated as of June 21, 2022, by and among Louisiana-Pacific Corporation, Louisiana-Pacific Canada LTD, Pacific Woodtech Corporation and Pacific Woodtech Canada Holdings Limited. Incorporated herein by reference to Exhibit 2.1 to LP’s Current Report on Form 8-K filed on June 22, 2022.***













31.1			Certifications of Chief Executive Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934. *

31.2			Certifications of Chief Financial Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934. *

32			Certifications pursuant to § 906 of the Sarbanes-Oxley Act of 2002. **

101.INS			XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.*

101.SCH			XBRL Taxonomy Extension Schema Document.*

101.CAL			XBRL Taxonomy Extension Calculation Linkbase Document.*

101.LAB			XBRL Taxonomy Extension Label Linkbase Document.*

101.PRE			XBRL Taxonomy Extension Presentation Linkbase Document.*

101.DEF			XBRL Taxonomy Extension Definition Linkbase Document.*

104			Cover Page Interactive Data File (embedded with Inline XBRL document and contained in Exhibit 101)*

*Filed herewith.

** Furnished herewith.

*** Disclosure schedules and certain exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Asset Purchase Agreement as filed identifies such schedules and exhibits, including the general nature of their contents. Louisiana-Pacific Corporation will furnish a copy of any omitted attachment to the Securities and Exchange Commission on a confidential basis upon request.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this quarterly report on Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized.


		LOUISIANA-PACIFIC CORPORATION

Date:	November ~~3, 2022~~1, 2023	BY:	/S/ W. BRADLEY SOUTHERN
			W. Bradley Southern
			Chief Executive Officer

Date:	November ~~3, 2022~~1, 2023	BY:	/S/ ALAN J.M. HAUGHIE
			Alan J.M. Haughie
			Executive Vice President and
			Chief Financial Officer


Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Purchase Plans or Programs1	Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (in millions)
July 1, 2022 - July 31, 2022	2,702,207	$	57.18	2,702,207	$	371
August 1, 2022 - August 31, 2022	2,730,497	$	60.00	2,730,497	$	207
September 1, 2022 - September 30, 2022	126,763	$	54.96	126,763	$	200
Total for Third Quarter 2022	5,559,467			5,559,467