Louisiana-Pacific (LPX) appears an attractive pick, as it has been recently upgraded to a Zacks Rank #1 (Strong Buy). This upgrade is essentially a reflection of an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices.A company's changing earnings picture is at the core of the Zacks rating. The system tracks the Zacks Consensus Estimate -- the consensus measure of EPS estimates from the sell-side analysts covering the stock -- for the current and following years.Indiv ...

Looking for a stock that has been consistently beating earnings estimates and might be well positioned to keep the streak alive in its next quarterly report? Louisiana-Pacific (LPX) , which belongs to the Zacks Building Products - Wood industry, could be a great candidate to consider.This home construction supplier has seen a nice streak of beating earnings estimates, especially when looking at the previous two reports. The average surprise for the last two quarters was 26.54%.For the last reported quarter, ...

Financial Data and Key Metrics Changes - In Q4 2023, the company generated $658 million in sales and $129 million in EBITDA, bringing full-year totals to $2.6 billion in sales and $478 million in EBITDA, translating to $0.71 earnings per share for Q4 and $3.22 for the full year [33][35][36] - The full-year comparisons were negative largely due to normalized OSB prices, but the company demonstrated exceptional management of controllable elements [33][34] - The EBITDA margin for Siding in Q4 was 22%, the highest of the year, reinforcing confidence in a long-term target of 25% [45] Business Line Data and Key Metrics Changes - Siding achieved its highest EBITDA margin of the year in Q4, returning to growth after a destocking cycle in the first half of the year [28][35] - The Siding business finished Q4 with $72 million of EBITDA, while full-year EBITDA for Siding was $269 million, representing a robust margin of 20% [44][47] - OSB prices fell early in Q4 but rebounded later, contributing to a year-over-year EBITDA increase of about $17 million [48] Market Data and Key Metrics Changes - The new residential construction markets saw a meaningful recovery in the second half of 2023, with improved optimism about single-family housing starts due to a drop in interest rates [35][36] - The Repair and Remodel sector remains softer than new construction, but lower rates may encourage more sales of existing homes [36] - The current consensus for total housing starts is flat at just below 1.4 million, with expectations for a higher single-family mix [37] Company Strategy and Development Direction - The company invested $300 million in capital in 2023, focusing on growth in Siding and Structural Solutions, including the conversion of a mill in Michigan and the construction of a new facility in New York [29][30] - The strategy emphasizes a strong portfolio of products and a long runway for profitable growth, with investments in new capacity and process technologies to enhance productivity and margins [30][31] - The company aims to operate with discipline and agility, strategically investing in growth while returning cash to shareholders [38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that interest rate reductions would significantly impact housing, potentially freeing up existing homes for sale and encouraging new construction [13][14] - The sentiment among large national builders is optimistic, with infrastructure in place to support growth [8][9] - The company anticipates a year of resumed growth in Siding, expecting revenue growth of about 8% to 10% for the full year [55] Other Important Information - The company ended 2023 with $222 million in cash and over $770 million in liquidity, despite significant investments and returns to shareholders [34] - The operations team achieved a world-class total incident rate of 0.5, reflecting improved efficiency and safety performance [39] Q&A Session Summary Question: What are the key elements affecting 2024 Siding EBITDA guidance? - Management highlighted volume increases, investments in selling and marketing, and the impact of carrying an extra mill in the network as key factors [70][71][72] Question: How is the shed business performing? - Demand for sheds recovered in the second half of last year, but it is currently the weakest sector in the order file [74][76] Question: What is the focus of the increased sales and marketing spend? - The focus is on new construction and Repair and Remodel, with a significant portion directed towards personalized marketing support for contractors [79][80] Question: What is the expected mix for Structural Solutions in 2024? - Management aims for Structural Solutions to account for 55% of the overall mix, focusing on margin management [96] Question: How does the company view the impact of sales and marketing investments? - Investments in sales and marketing are expected to create demand that will materialize later, with a bias towards improved EBITDA margins as the year progresses [92][93]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934: For the Fiscal Year Ended December 31, 2023 Or o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 1-7107 LOUISIANA-PACIFIC CORPORATION (Exact name of registrant as specified in its charter) (State of Incorporation) (I.R.S. Employer 1610 West End ...

PART I - FINANCIAL INFORMATION [ITEM 1. FINANCIAL STATEMENTS](index=4&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) The company reported a significant decline in net sales and net income for the nine months ended September 30, 2023, compared to the prior year Condensed Consolidated Statements of Income (Unaudited) | (In millions) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | **Net sales** | $728 | $852 | $1,923 | $3,149 | | **Gross profit** | $214 | $232 | $434 | $1,370 | | **Income from operations** | $161 | $172 | $198 | $1,191 | | **Income from continuing operations** | $118 | $129 | $119 | $898 | | **Net income attributed to LP** | $118 | $226 | $119 | $1,094 | | **Net income per share - diluted** | $1.63 | $3.05 | $1.65 | $13.59 | Condensed Consolidated Balance Sheets (Unaudited) | (In millions) | September 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Total current assets** | $745 | $854 | | **Total assets** | $2,380 | $2,350 | | **Total current liabilities** | $266 | $336 | | **Total liabilities** | $878 | $916 | | **Total stockholders' equity** | $1,502 | $1,433 | Condensed Consolidated Statements of Cash Flows (Unaudited) | (In millions) | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $157 | $1,103 | | **Net cash used in investing activities** | ($312) | ($14) | | **Net cash used in financing activities** | ($61) | ($968) | | **Net (decrease) increase in cash** | ($223) | $111 | [Note 2. Revenue](index=10&type=section&id=Note%202.%20Revenue) Total revenue decreased significantly in Q3 and year-to-date 2023, primarily driven by a sharp decline in the OSB segment Revenue by Segment (in millions) | Segment | Q3 2023 | Q3 2022 | YTD 2023 | YTD 2022 | | :--- | :--- | :--- | :--- | :--- | | Siding | $345 | $394 | $996 | $1,083 | | OSB | $335 | $388 | $754 | $1,805 | | South America | $45 | $53 | $153 | $190 | | Other | $4 | $17 | $21 | $72 | | **Total** | **$728** | **$852** | **$1,923** | **$3,149** | [Note 7. Discontinued Operations](index=14&type=section&id=Note%207.%20Discontinued%20Operations) The company recognized significant income from discontinued operations in 2022 from asset sales, with no such income in 2023 - On August 1, 2022, the company completed the sale of assets related to the EWP segment for **$217 million** in gross cash proceeds, resulting in a pre-tax gain of approximately **$118 million**[51](index=51&type=chunk) - In March 2022, the company sold its 50% equity interest in two I-joist joint ventures for **$59 million**, resulting in a pre-tax gain of **$39 million**[50](index=50&type=chunk) [Note 8. Business Exit Charges](index=15&type=section&id=Note%208.%20Business%20Exit%20Charges) The company incurred $35 million in business exit charges during the nine months ended September 30, 2023, primarily from ceasing Entekra Holdings operations Business Exit Charges for Nine Months Ended Sep 30, 2023 (in millions) | Charge Type | Amount | | :--- | :--- | | Impairment of assets | $24 | | Inventory write-down | $6 | | Other expenses (severance, etc.) | $4 | | **Total** | **$35** | [Note 17. Selected Segment Data](index=20&type=section&id=Note%2017.%20Selected%20Segment%20Data) Adjusted EBITDA significantly declined for the nine months ended September 30, 2023, primarily due to a sharp drop in the OSB segment's performance Segment Adjusted EBITDA (in millions) | Segment | Q3 2023 | Q3 2022 | YTD 2023 | YTD 2022 | | :--- | :--- | :--- | :--- | :--- | | Siding | $71 | $90 | $198 | $251 | | OSB | $120 | $113 | $161 | $1,021 | | South America | $6 | $14 | $31 | $65 | | **Total Adjusted EBITDA** | **$190** | **$200** | **$349** | **$1,289** | - The definition of Adjusted EBITDA was updated in 2023 to exclude business exit charges, which are considered outside the performance of ongoing core business operations[76](index=76&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=22&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management attributes performance changes to cyclical market conditions, with varied segment results and a decline in cash from operations despite strong liquidity - Demand for building products is correlated with new home construction. For the nine months ended Sep 30, 2023, single-family housing starts were **13%** lower and multi-family starts were **11%** lower compared to the same period in 2022[83](index=83&type=chunk) - In May 2023, the company acquired a manufacturing facility in Wawa, Ontario, for **$80 million**, which is expected to be converted into an LP SmartSide Trim & Siding mill[31](index=31&type=chunk)[82](index=82&type=chunk) Key Performance Indicator: Overall Equipment Effectiveness (OEE) | Segment | YTD 2023 | YTD 2022 | | :--- | :--- | :--- | | Siding | 77% | 75% | | OSB | 75% | 72% | | South America | 74% | 72% | [Results of Operations](index=26&type=section&id=Results%20of%20Operations) Overall performance was mixed, with Siding sales down due to lower volumes, while OSB and South America segments experienced significant declines in sales and EBITDA Siding Segment Performance (YTD 2023 vs YTD 2022) | Metric | Change | | :--- | :--- | | Net Sales | -8% | | Adjusted EBITDA | -21% | | Average Net Selling Price | +6% | | Unit Shipments | -14% | OSB Segment Performance (YTD 2023 vs YTD 2022) | Metric | Change | | :--- | :--- | | Net Sales | -58% | | Adjusted EBITDA | -84% | | Structural Solutions Avg. Price | -46% | | Commodity Avg. Price | -47% | South America Segment Performance (YTD 2023 vs YTD 2022) | Metric | Change | | :--- | :--- | | Net Sales | -20% | | Adjusted EBITDA | -53% | | OSB Avg. Selling Price | -13% | | OSB Unit Shipments | -12% | [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity decreased due to lower cash from operations and significant investing activities, though the company maintains an undrawn $550 million credit facility - Cash provided by operations decreased to **$157 million** in YTD 2023 from **$1,103 million** in YTD 2022, primarily due to lower income from operations and increases in working capital[119](index=119&type=chunk) - Capital expenditures were **$236 million** for the nine months ended September 30, 2023, compared to **$282 million** in the prior year period[121](index=121&type=chunk) - As of September 30, 2023, the company had no outstanding borrowings under its **$550 million** Amended Credit Facility and was in compliance with all financial covenants[124](index=124&type=chunk)[125](index=125&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=33&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company faces market risks from foreign currency, commodity price volatility, and interest rate changes, with no material profile changes since 2022 - The company has exposure to foreign currency risk from its international operations, primarily related to the Canadian dollar, Brazilian real, and Chilean peso[133](index=133&type=chunk) - OSB is a significant commodity product, and its sales prices fluctuate based on market factors beyond the company's control[134](index=134&type=chunk) - The company is exposed to interest rate risk on variable-rate debt, but had no outstanding borrowings under its credit facility as of September 30, 2023[135](index=135&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=34&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls and procedures were effective as of September 30, 2023, with no material changes to internal control over financial reporting - The CEO and CFO concluded that as of September 30, 2023, LP's disclosure controls and procedures were effective[137](index=137&type=chunk) - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[138](index=138&type=chunk) PART II - OTHER INFORMATION [ITEM 1. LEGAL PROCEEDINGS](index=35&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) Legal and environmental matters are incorporated by reference from Note 11 of the Condensed Consolidated Financial Statements - The description of legal and environmental matters is incorporated by reference from 'Note 11 - Commitments and Contingencies' in the financial statements[140](index=140&type=chunk) [ITEM 1A. RISK FACTORS](index=35&type=section&id=ITEM%201A.%20RISK%20FACTORS) No material changes to previously disclosed risk factors have occurred since the 2022 Annual Report on Form 10-K and Q1 2023 Form 10-Q - There have been no material changes to the risk factors previously disclosed in the 2022 Annual Report on Form 10-K and the Q1 2023 10-Q[141](index=141&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=36&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) The company has a $600 million share repurchase program, with $400 million repurchased to date, but no activity in Q3 2023 - A **$600 million** share repurchase program was authorized on May 3, 2022. As of September 30, 2023, **$400 million** of stock has been repurchased under this program[144](index=144&type=chunk) - No share repurchases were made under the 2022 Share Repurchase Program during the third quarter ended September 30, 2023[144](index=144&type=chunk) [ITEM 5. OTHER INFORMATION](index=36&type=section&id=ITEM%205.%20OTHER%20INFORMATION) Director Lizanne Gottung entered a Rule 10b5-1 trading plan for 14,404 shares, with no other such plans adopted or terminated by directors or officers - Director Lizanne Gottung entered into a Rule 10b5-1 trading plan for the sale of up to **14,404 shares** of common stock[145](index=145&type=chunk) [ITEM 6. EXHIBITS](index=37&type=section&id=ITEM%206.%20EXHIBITS) This section lists exhibits filed with the quarterly report, including CEO/CFO certifications and XBRL data files - The report includes exhibits such as CEO/CFO certifications (**31.1**, **31.2**, **32**) and XBRL interactive data files (101 series)[150](index=150&type=chunk)

Financial Data and Key Metrics Changes - In Q2 2023, the company generated $611 million in net sales, $93 million in EBITDA, and $0.55 in adjusted diluted earnings per share [52][61] - EBITDA margin was 18%, which would have been 3 points higher without mill conversion and ramp-up costs [37][61] - Siding revenue was 11% below the prior year, with a 16% volume decline offset by a 6% increase in siding prices [61][67] Business Line Data and Key Metrics Changes - The Siding business experienced a 16% volume drop compared to the prior year, which was equal to the drop in single-family starts [61][67] - OSB segment saw improved demand due to increased single-family new construction, leading to higher prices and contributing $37 million in EBITDA in Q2 [54][61] - ExpertFinish prefinished siding maintained flat volume in Q2 compared to the prior year despite a general slowdown in repair and remodeling [79] Market Data and Key Metrics Changes - Single-family starts dropped 22% on a trailing 12-month basis, while Siding volume remained flat and prices increased by 11% [35][51] - Existing home sales were down 23% for the first half of the year, impacting the shed market, which closely follows existing home sales [60][61] - The repair and remodeling market appears to be softening due to constrained home inventory and reduced home sales [51][60] Company Strategy and Development Direction - The company is focused on growth through innovation, managing capacity with discipline, and maintaining a strong balance sheet to invest in the future [64][88] - The acquisition of the Wawa mill is part of the strategy to meet growing customer demand and enhance production capabilities [55][88] - The company aims to grow Siding through product innovation and direct access to large national builders [22][106] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth in Siding, citing product innovation and a low market share in the repair and remodel area [2][22] - The company noted that while the current market environment is softer than anticipated, their long-term growth trajectory remains strong [64][136] - Management highlighted that cash flow has improved due to increased OSB prices, and they expect continued demand in the housing market [44][51] Other Important Information - The company reported a $34 million charge related to the exit of Entekra, mostly noncash [38] - Safety performance was emphasized, with only one recordable injury in Q2, showcasing the company's commitment to safety [36][81] - The company plans to continue investing in capacity and product innovation while managing capital expenditures [70][86] Q&A Session Summary Question: Can you talk about the volumes in Siding for the back half of the year? - Management indicated that channel inventories are still elevated but expect to work through them in Q3 [91] Question: What are the expectations for margins in Siding in the back half? - Management noted potential relief in raw materials and transportation costs, which could help margins approach the 20% range [92] Question: How is the company performing relative to competitors in the siding market? - Management stated that while the company is not growing as fast as desired, they are confident in their long-term growth strategy and market share gains [129][130]

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 June 30, 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 E ...

Financial Data and Key Metrics Changes - In Q1 2023, the company reported sales of $584 million, significantly lower than the previous year's figures, primarily due to a drop in OSB prices [31][24] - EBITDA for the quarter was $66 million, with earnings per share at $0.34, reflecting a challenging comparison to last year's high OSB prices [24][31] - Operating cash outflow was $119 million, with capital expenditures of $114 million, marking the heaviest spending quarter of 2023 [18][32] Business Line Data and Key Metrics Changes - The Siding segment delivered $67 million in EBITDA with a margin of 20%, despite a 9% drop in volume [15][12] - OSB volume decreased by nearly 300 million square feet, approximately 30% of nameplate capacity, due to a 29% drop in Single-Family housing starts [16][31] - ExpertFinish volumes increased by 26% year-over-year, contributing positively to the product mix [12][26] Market Data and Key Metrics Changes - Single-Family housing starts in the U.S. fell by almost 30% year-over-year, impacting overall market conditions [3][9] - Commodity OSB prices dropped by more than 75%, while structural solutions prices fell by only 58%, indicating a stronger performance in the structural solutions segment [17][31] - The company noted that while the housing market remains uncertain, there are encouraging signs of strength, including improving commodity prices [23][38] Company Strategy and Development Direction - The company plans to continue investing in siding capacity, with the recent acquisition of the Wawa OSB facility expected to enhance growth potential [8][35] - The strategy focuses on growing specialty components of the business to reduce dependence on cyclical housing starts and volatile commodity prices [69][70] - Future expansions, including the Houlton facility, are planned to meet increasing customer demand [37][8] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging macroeconomic environment and uncertainties in the housing market but expressed confidence in the company's strategy and execution [10][40] - The company expects Siding's second-quarter revenue to be similar to the first quarter, with volumes down year-over-year but outperforming the anticipated drop in Single-Family housing starts [50][51] - OSB prices have recently improved, and if they hold, the business anticipates a 20% sequential revenue increase in the second quarter [51][50] Other Important Information - The company incurred $10 million in conversion costs for the Sagola mill, which is expected to contribute to future growth [14][13] - The decision to close the Entekra facility was made due to the deteriorating housing environment in Northern California [20] - The company ended the quarter with $126 million in cash and just under $700 million in liquidity [32][46] Q&A Session Summary Question: What is the outlook for the second quarter regarding revenue and volume? - Management indicated that while there are signs of strength in the order file, elevated inventory levels may take time to work through, impacting revenue [56] Question: Can you provide details on the shed business performance in Q1? - The shed business is currently underperforming compared to other segments, although there has been some recent recovery [59] Question: What are the anticipated conversion costs for the Wawa facility? - Management is still assessing the conversion costs but expects them to be sizable, similar to the Houlton conversion [60] Question: How is the competitive environment affecting order files? - There has been increased competitive activity, but management has not seen a direct loss in volume due to this competition [80] Question: What is the expected impact of the Wawa conversion on production? - The Wawa facility is expected to be flexible in production, servicing a broader geography than Houlton, with a focus on both panel and lap products [121][122]

[PART I - FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=4&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) Q1 2023 financial performance declined significantly, with net sales down 50% to $584 million, net income at $22 million, and operating cash flow negative Condensed Consolidated Statements of Income (Q1 2023 vs Q1 2022) | Metric | Three Months Ended March 31, 2023 (millions) | Three Months Ended March 31, 2022 (millions) | | :--- | :--- | :--- | | Net sales | $584 | $1,167 | | Gross profit | $101 | $620 | | Income from operations | $30 | $556 | | Net income | $22 | $483 | | Net income attributed to LP | $21 | $484 | | Diluted EPS | $0.29 | $5.60 | Condensed Consolidated Balance Sheet Highlights (As of March 31, 2023) | Metric | March 31, 2023 (millions) | December 31, 2022 (millions) | | :--- | :--- | :--- | | Cash and cash equivalents | $126 | $369 | | Total current assets | $713 | $854 | | Total assets | $2,259 | $2,350 | | Total liabilities | $808 | $916 | | Total stockholders' equity | $1,450 | $1,433 | Condensed Consolidated Statements of Cash Flows (Q1 2023 vs Q1 2022) | Metric | Three Months Ended March 31, 2023 (millions) | Three Months Ended March 31, 2022 (millions) | | :--- | :--- | :--- | | Net cash (used) provided by operating activities | ($119) | $425 | | Net cash used in investing activities | ($113) | ($33) | | Net cash used in financing activities | ($27) | ($137) | | Net (decrease) increase in cash | ($257) | $266 | - The company completed the termination of its frozen U.S. and Canadian defined benefit pension plans in Q1 2023, resulting in a non-cash, pre-tax charge of **$6 million**[62](index=62&type=chunk) - Subsequent to the quarter end, the company announced the shutdown of its Entekra off-site framing operation, expecting a pre-tax, non-cash charge of **$25-$30 million** in Q2 2023. Additionally, in May 2023, it acquired the assets of Wawa OSB Inc. for **$80 million**[70](index=70&type=chunk)[71](index=71&type=chunk) [Note 2. Revenue](index=9&type=section&id=Note%202.%20Revenue) Total revenue for Q1 2023 decreased sharply to $584 million, primarily due to a significant decline in the OSB segment, while Siding revenue remained stable Revenue by Reportable Segment (Q1 2023 vs Q1 2022) | Segment | Q1 2023 Revenue (millions) | Q1 2022 Revenue (millions) | | :--- | :--- | :--- | | Siding | $331 | $332 | | OSB | $189 | $744 | | South America | $55 | $67 | | Other | $8 | $26 | | **Total** | **$584** | **$1,167** | [Note 7. Discontinued Operations](index=12&type=section&id=Note%207.%20Discontinued%20Operations) The EWP segment, sold in 2022, is now discontinued operations, generating $170 million net sales and $62 million income in Q1 2022, with no Q1 2023 activity - In 2022, the company sold its **50% equity interest** in two I-joist joint ventures and the remaining assets of the EWP segment[46](index=46&type=chunk)[47](index=47&type=chunk) EWP Segment Financial Results (Q1 2022) | Metric | Three Months Ended March 31, 2022 | | :--- | :--- | | Net sales | $170 million | | Income from discontinued operations, net of taxes | $62 million | [Note 16. Selected Segment Data](index=17&type=section&id=Note%2016.%20Selected%20Segment%20Data) Adjusted EBITDA for Q1 2023 plummeted to $66 million from $598 million, primarily driven by a drastic decline in the OSB segment's Adjusted EBITDA Segment Adjusted EBITDA (Q1 2023 vs Q1 2022) | Segment | Q1 2023 Adjusted EBITDA (millions) | Q1 2022 Adjusted EBITDA (millions) | | :--- | :--- | :--- | | Siding | $67 | $83 | | OSB | $5 | $505 | | South America | $12 | $25 | | Other | ($9) | ($6) | | Corporate | ($9) | ($9) | | **Total Adjusted EBITDA** | **$66** | **$598** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management attributes the downturn to a challenging housing market and sharp OSB price declines, resulting in a 75% drop in OSB net sales and negative operating cash flow, while Siding sales remained flat - Demand for building products was negatively impacted by a **29% year-over-year decline** in single-family housing starts for the three months ended March 31, 2023[76](index=76&type=chunk) - OSB commodity prices fell significantly during Q1 2023 due to a decline in market demand[79](index=79&type=chunk) Reconciliation of Net Income to Adjusted EBITDA | Metric | Three Months Ended March 31, 2023 (millions) | Three Months Ended March 31, 2022 (millions) | | :--- | :--- | :--- | | Net income | $22 | $483 | | Adjusted EBITDA | $66 | $598 | [Results of Operations - Siding](index=23&type=section&id=Results%20of%20Operations%20-%20Siding) Siding segment net sales remained flat at $331 million in Q1 2023, as a 10% price increase offset a 9% decrease in unit shipments, while Adjusted EBITDA declined 18% to $67 million Siding Segment Performance (Q1 2023 vs Q1 2022) | Metric | Q1 2023 | Q1 2022 | % Change | | :--- | :--- | :--- | :--- | | Net sales | $331M | $332M | 0% | | Adjusted EBITDA | $67M | $83M | (18)% | Siding Solutions Price and Volume Changes (YoY) | Metric | Change vs Q1 2022 | | :--- | :--- | | Average Net Selling Price | +10% | | Unit Shipments | -9% | [Results of Operations - OSB](index=24&type=section&id=Results%20of%20Operations%20-%20OSB) The OSB segment's net sales plummeted 75% to $189 million due to dramatic price declines and reduced shipment volumes, causing Adjusted EBITDA to collapse by 99% to $5 million OSB Segment Performance (Q1 2023 vs Q1 2022) | Metric | Q1 2023 | Q1 2022 | % Change | | :--- | :--- | :--- | :--- | | Net sales | $189M | $744M | (75)% | | Adjusted EBITDA | $5M | $505M | (99)% | OSB Price and Volume Changes (YoY) | Product Line | Average Net Selling Price Change | Unit Shipments Change | | :--- | :--- | :--- | | OSB - Structural Solutions | (56)% | (38)% | | OSB - commodity | (74)% | (13)% | - The **$555 million decrease** in net sales was attributed to a **$470 million decrease** in OSB prices and a combined **$78 million decrease** in sales volume from production curtailments and a mill conversion[97](index=97&type=chunk) [Results of Operations - South America](index=25&type=section&id=Results%20of%20Operations%20-%20South%20America) South America net sales decreased 17% to $55 million due to lower OSB volumes and pricing, leading to a 53% Adjusted EBITDA decline to $12 million, despite strong Siding volume growth South America Segment Performance (Q1 2023 vs Q1 2022) | Metric | Q1 2023 | Q1 2022 | % Change | | :--- | :--- | :--- | :--- | | Net sales | $55M | $67M | (17)% | | Adjusted EBITDA | $12M | $25M | (53)% | [Liquidity and Capital Resources](index=26&type=section&id=Liquidity%20and%20Capital%20Resources) Q1 2023 liquidity weakened, with operating cash flow turning negative at $119 million used, capital expenditures increasing to $114 million, and no outstanding revolving credit facility borrowings - Cash used by operating activities was **$119 million** in Q1 2023, compared to cash provided by operating activities of **$425 million** in Q1 2022, mainly due to lower income[109](index=109&type=chunk) - Capital expenditures were **$114 million** for the quarter, primarily for siding conversion projects and maintenance[110](index=110&type=chunk) - As of March 31, 2023, there were no outstanding amounts under the **$550 million** Amended Credit Facility, and the company was in compliance with all financial covenants[113](index=113&type=chunk)[114](index=114&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=29&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company faces market risks from foreign currency, commodity price volatility (OSB), and interest rate changes, with no outstanding variable-rate debt as of March 31, 2023 - Key market risks include foreign currency rate fluctuations, commodity price volatility (especially for OSB), and interest rate changes[121](index=121&type=chunk)[122](index=122&type=chunk)[123](index=123&type=chunk) [Item 4. Controls and Procedures](index=30&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls and procedures were effective as of March 31, 2023, with no material changes to internal control over financial reporting - The CEO and CFO concluded that as of March 31, 2023, the company's disclosure controls and procedures were effective[125](index=125&type=chunk) [PART II - OTHER INFORMATION](index=31&type=section&id=PART%20II-OTHER%20INFORMATION) [Item 1A. Risk Factors](index=31&type=section&id=ITEM%201A.%20RISK%20FACTORS) A new risk factor addresses potential adverse effects on cash and investments from financial institution failures, prompted by recent banking system events, despite no direct exposure - A new risk factor was disclosed regarding the potential impact of financial institution failures on the company's ability to access its cash, which is often held in balances exceeding FDIC insurance limits[130](index=130&type=chunk)[131](index=131&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=32&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) No shares were repurchased in Q1 2023; $400 million of the $600 million 2022 Share Repurchase Program was utilized as of March 31, 2023, with $200 million remaining - No shares were repurchased during Q1 2023. As of March 31, 2023, **$400 million** of the **$600 million** authorized under the 2022 Share Repurchase Program had been utilized[134](index=134&type=chunk)

Financial Performance - In 2022, the company's net sales totaled $3,854 million, with the Oriented Strand Board (OSB) segment contributing 54% ($2,062 million) and the Siding segment contributing 38% ($1,469 million) to total sales[23]. - Net sales for the year ended December 31, 2022, were $3,854 million, a decrease of 1.6% compared to $3,915 million in 2021[216]. - Gross profit for 2022 was $1,498 million, down from $1,963 million in 2021, reflecting a gross margin of approximately 38.9%[216]. - Net income for 2022 was $1,083 million, a decrease of 21.1% from $1,373 million in 2021[218]. - Income from continuing operations was $885 million in 2022, compared to $1,302 million in 2021, representing a decline of 31.9%[216]. - Adjusted EBITDA for 2022 was $1,389 million, down 26% from $1,877 million in 2021[166]. - Income attributed to LP from continuing operations decreased by $418 million to $888 million, or $11.34 per diluted share, reflecting a $488 million drop in Adjusted EBITDA and non-cash pension settlement charges of $82 million[148]. - Cash generated from operations in 2022 was $1,144 million, down from $1,484 million in 2021[183]. - The company recognized a tax provision of $274 million in 2022, compared to $402 million in 2021[179]. - The company reported a basic net income per share of $13.94 for 2022, down from $14.19 in 2021, a decrease of 1.8%[216]. - Other comprehensive income for 2022 was $75 million, compared to a loss of $23 million in 2021, showing a significant recovery[218]. Sales and Market Trends - The company's sales volume for Siding Solutions in 2022 was 1,830 MMSF, an increase from 1,667 MMSF in 2021[67]. - Siding segment net sales increased by 26% to $1,469 million in 2022, with Adjusted EBITDA rising 17% to $339 million[169]. - OSB segment net sales decreased by 14% to $2,062 million, with Adjusted EBITDA falling 32% to $1,034 million[171]. - South America segment net sales declined by 9% to $241 million, with Adjusted EBITDA decreasing 32% to $77 million[173]. - The overall siding market is estimated to be a $15 billion industry, with the company being the largest manufacturer in the engineered wood siding market[154]. - Housing starts for single-family homes in 2022 were 1,005, a decrease of 10.9% from 1,127 in 2021, while multi-family housing starts increased to 550 from 474[65]. - The U.S. Census Bureau reported that 2022 actual single-family housing starts were 11% lower than in 2021, while multi-family housing starts were about 16% higher[150]. Operational Efficiency and Capacity Expansion - The company plans to increase Siding production capacity by approximately 720 million square feet through conversions and expansions of existing facilities[29]. - The company expanded its Green Bay, Wisconsin facility to add 50 million square feet of ExpertFinish capacity and is constructing new facilities in Bath, New York, and Spokane, Washington, expected to add 190 million square feet of capacity[30]. - Overall Equipment Effectiveness (OEE) for Siding improved to 76% in 2022 from 73% in 2021, while OEE for OSB decreased to 72% from 74%[71]. - The company operates 22 plants across the U.S., Canada, Chile, and Brazil, focusing on high-quality service and on-time shipments[22][30]. Financial Management and Capital Expenditures - Cash used in financing activities in 2022 was $982 million, including $900 million for share repurchases and $69 million in cash dividends[186]. - The company repurchased $900 million in shares during 2022, with $500 million from the Second 2021 Share Repurchase Program and $400 million from the 2022 Share Repurchase Program[186]. - Capital expenditures for the year ended December 31, 2022, were $414 million, up from $254 million in 2021, with 2023 expected to be between $385 million and $485 million[185]. - The company anticipates long-term cash uses may include strategic acquisitions and will continue to rely on its credit facility for long-term funding[181]. Risks and Challenges - Unplanned events, such as natural disasters or equipment failures, could interrupt manufacturing operations, potentially affecting production capacity and customer delivery[75]. - Cybersecurity risks pose a significant threat, with potential breaches leading to operational disruptions and financial liabilities[80]. - The company may face challenges in launching new products, which could disrupt manufacturing processes and affect customer service and financial performance[79]. - Financial difficulties faced by wholesale distributors and dealers may lead to reduced revenues and increased write-offs of accounts receivable, negatively impacting operating cash flow[77]. - Climate change and related regulations could increase operating costs and compliance burdens, potentially impacting financial results[87]. - Supply chain disruptions due to global pandemics have led to delays and increased costs for raw materials, affecting the ability to meet customer demand[92]. - Rising inflation may increase costs of raw materials, labor, and other expenses, potentially reducing profitability if price increases cannot be implemented[112]. - Intense competition in the building products industry could lead to pricing pressures, adversely affecting net sales and profitability[96]. - The company is subject to significant environmental regulations, which may lead to increased compliance costs and operational restrictions[100]. Employee and Safety Initiatives - As of December 31, 2022, the company employed approximately 4,300 team members, with 3,400 in manufacturing facilities and 1,300 under collective bargaining agreements[51]. - The Total Incident Rate (TIR) for the year ended December 31, 2022, was 0.8, which is better than the targeted TIR of <1.0, indicating industry-leading safety performance[53]. - The company has implemented a Serious Injury and Fatality (SIF) prevention program to enhance safety measures and reduce workplace incidents[53]. - The company focuses on diversity, equity, and inclusion, aiming to cultivate a culture that supports the recruitment and retention of diverse talent[54]. - The company’s talent strategy emphasizes attracting and retaining high-performing employees through competitive compensation and benefits programs[57]. Environmental and Sustainability Commitment - The company is committed to sustainable sourcing of wood fiber, certified against the Sustainable Forestry Initiative (SFI) and the Programme for the Endorsement of Forest Certification (PEFC) standards[41]. - The company is subject to risks associated with increased ESG reporting requirements, which may affect supplier capabilities and operational costs[88].