SEGMENT INFORMATION

LP operates in four segments: North America Oriented Strand Board (OSB); Siding; Engineered Wood Products (EWP) and South America. LP’s business units have been aggregated into these four segments based upon the similarity of economic characteristics, customers and distribution methods. LP’s 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. Segment information was prepared in accordance with the same accounting principles as those described in Note 1. LP evaluates the performance of its business segments based upon operating profits excluding other operating credits and charges, net, gain (loss) on sales of and impairments of long-lived assets, general corporate and other expenses, translation gains and losses, interest and income taxes.

The OSB segment includes OSB products produced in North America. The siding segment includes Smart Side^® siding products; Canexel siding products; and other related products. The engineered wood products segment includes laminated veneer lumber and laminated strand lumber; I-joists; plywood; and other related products. The South America segment includes products produced and or sold (generally OSB) in South America.

Information about LP’s product segments is as follows:



	Year ended December 31,
Dollar amounts in millions	2013			2012			2011
SALES BY BUSINESS SEGMENT
OSB	$	1,068.1		$	814.1		$	542.0
Siding	573.8			500.9			429.8
Engineered Wood Products	267.6			213.4			203.3
South America	171.5			168.8			144.9
Other products	13.4			12.8			11.2
Intersegment Sales	(9.2		)	(18.8		)	(2.5		)
Total sales	$	2,085.2		$	1,691.2		$	1,328.7
PROFIT (LOSS) BY BUSINESS SEGMENT
OSB	$	230.3		$	124.0		$	(63.5	)
Siding	85.8			67.4			42.0
Engineered Wood Products	(14.3		)	(13.9		)	(15.5		)
South America	20.0			18.0			11.6
Other products	(6.4		)	(8.9		)	(18.1		)
Other operating credits and charges, net	(3.8		)	2.9			11.2
Gain (loss) on sales of and impairments of long-lived assets	(0.2		)	(4.9		)	(73.9		)
General corporate and other expense, net	(96.7		)	(78.7		)	(66.4		)
Investment income	10.3			14.8			28.7
Interest expense, net of capitalized interest	(36.0		)	(49.3		)	(56.9		)
Other-than-temporary investment impairment	—			—			(14.8		)
Other non-operating income (expense)	29.5			(34.9		)	(1.0		)
Income (loss) from continuing operations before taxes	218.5			36.5			(216.6		)
Provision (benefit) for income taxes	41.1			7.0			(41.1		)
Income (loss) from continuing operations	$	177.4		$	29.5		$	(175.5	)



	Year ended December 31,
	2013		2012		2011
DEPRECIATION AND AMORTIZATION
OSB	$	49.9	$	33.1	$	36.3
Siding	16.4		15.5		15.5
Engineered Wood Products	12.6		11.0		12.6
South America	10.5		12.0		11.6
Other products	0.1		0.1		0.2
Non-segment related	1.8		1.7		2.1
Total depreciation and amortization	$	91.3	$	73.4	$	78.3

CAPITAL EXPENDITURES
OSB	$	36.5	$	10.1	$	8.9
Siding	22.8		8.7		5.9
Engineered Wood Products	2.2		2.5		2.0
South America	3.9		4.6		2.7
Other products	—		0.9		0.2
Non-segment related	10.2		4.4		1.7
Total capital expenditures	$	75.6	$	31.2	$	21.4

Information concerning identifiable assets by segment is as follows:



Dollar amounts in millions	December 31,
Dollar amounts in millions	2013		2012
IDENTIFIABLE ASSETS
OSB	$	668.9	$	532.0
Siding	189.4		178.1
Engineered Wood Products	135.1		136.5
South America	137.5		168.1
Other products	33.6		25.2
Non-segment related	1,328.8		1,291.1
Total assets	$	2,493.3	$	2,331.0

Non-segment related assets include long-term notes receivable, cash and cash equivalents, short-term and long-term investments, corporate assets, assets held for sale and other items.

Information concerning LP’s geographic segments is as follows:



	Year ended December 31,
Dollar amounts in millions	2013			2012			2011
GEOGRAPHIC SEGMENTS
Total Sales—Point of origin
U.S.	$	1,611		$	1,317		$	963
Canada	303			331			280
South America	172			164			145
Intersegment sales	(1		)	(121		)	(59		)
Total Sales	$	2,085		$	1,691		$	1,329
Operating profit (loss)
U.S.	$	247		$	166		$	8
Canada	48			3			(64		)
South America	20			18			12
Other operating credits and charges, net and gain (loss) on sales of and impairments of long-lived assets	(4		)	(2		)	(63		)
General corporate expense, other-than-temporary investment impairment, loss on early debt extinguishment, realized gain on long term investments, translation gains (losses) and interest, net	(93		)	(148		)	(110		)
	219			37			(217		)
Provision (benefit) for income taxes	41			7			(41		)
Income (loss) from continuing operations	$	177		$	30		$	(176	)

IDENTIFIABLE TANGIBLE LONG LIVED ASSETS
U.S.	$	544		$	540		$	576
Canada	313			144			158
South America	83			100			107
Total assets	$	940		$	784		$	841

Interim Financial Results (unaudited)



	1ST QTR						2ND QTR						3RD QTR						4TH QTR
(Dollars in millions, except per share)	2013			2012			2013			2012			2013			2012			2013			2012
QUARTERLY DATA
Net sales	$	531.1		$	354.1		$	567.0		$	421.1		$	507.4		$	462.1		$	479.7		$	453.9
Income (loss) from continuing operations before taxes, equity in (income) loss of unconsolidated affiliates	81.0			(11.7		)	114.0			(47.0		)	41.9			36.7			(30.3		)	56.9
Income (loss) from continuing operations	65.0			(11.9		)	94.1			(38.2		)	37.5			31.0			(19.2		)	48.6
Net income (loss)	$	65.1		$	(11.3	)	$	94.3		$	(37.3	)	$	38.1		$	31.3		$	(20.4	)	$	46.1
Income (loss) from continuing operations per share—basic	$	0.47		$	(0.08	)	$	0.67		$	(0.28	)	$	0.27		$	0.23		$	(0.14	)	$	0.35
Income (loss) from continuing operations per share—diluted	$	0.45		$	(0.08	)	$	0.65		$	(0.28	)	$	0.26		$	0.22		$	(0.14	)	$	0.34
Net income (loss) per share—basic	$	0.47		$	(0.08	)	$	0.68		$	(0.27	)	$	0.27		$	0.23		$	(0.15	)	$	0.33
Net income (loss) per share—diluted	$	0.45		$	(0.08	)	$	0.65		$	(0.27	)	$	0.26		$	0.22		$	(0.15	)	$	0.32
Cash dividends per share	—			—			—			—			—			—			—			—
SALES BY SEGMENT:
OSB	$	286.7		$	149.0		$	306.2		$	195.4		$	245.4		$	226.6		$	229.8		$	243.1
Siding	133.8			113.1			152.7			137.0			149.0			134.1			138.3			116.7
Engineered wood products	63.4			48.6			60.9			51.7			71.8			61.5			71.5			51.6
South America	45.1			42.4			44.3			42.7			41.5			42.0			40.6			41.7
Other	2.7			2.6			3.7			4.1			3.9			3.4			3.1			2.7
Intersegment sales	(0.6		)	(1.6		)	(0.8		)	(9.8		)	(4.2		)	(5.5		)	(3.6		)	(1.9		)
Total net sales	$	531.1		$	354.1		$	567.0		$	421.1		$	507.4		$	462.1		$	479.7		$	453.9
PROFIT (LOSS) BY BUSINESS SEGMENT
OSB	$	98.1		$	(0.3	)	$	95.4		$	17.0		$	30.2		$	49.3		$	6.6		$	58.0
Siding	20.7			16.8			27.1			19.4			22.5			20.3			15.5			11.0
Engineered wood products	(3.5		)	(2.8		)	(5.1		)	(3.4		)	(2.0		)	(3.0		)	(3.7		)	(4.6		)
South America	6.3			3.1			6.3			3.6			5.3			4.5			2.1			6.8
Other	(1.8		)	(1.8		)	(2.2		)	(3.4		)	(2.1		)	(2.6		)	(0.3		)	(1.1		)
Other operating credits and charges, net	(1.6		)	0.2			(5.4		)	(0.2		)	16.1			(1.2		)	(12.9		)	4.1
Loss on sale of and impairment of long-lived assets	—			(0.1		)	0.7			(0.1		)	(0.3		)	(4.3		)	(0.6		)	(0.4		)
General corporate and other expenses, net	(22.5		)	(20.1		)	(24.0		)	(18.2		)	(22.1		)	(18.1		)	(28.1		)	(22.4		)
Non-operating income (expense)	(0.7		)	(0.1		)	32.3			(54.8		)	0.2			0.4			(2.3		)	19.6
Investment income	3.5			4.2			3.1			3.4			1.7			4.1			2.0			3.1
Interest expense, net of capitalized interest	(10.6		)	(12.6		)	(9.8		)	(13.1		)	(7.6		)	(10.7		)	(8.0		)	(12.9		)
Income (loss) from operations before taxes	87.9			(13.5		)	118.4			(49.8		)	41.9			38.7			(29.7		)	61.2
Provision (benefit) for income taxes	22.9			(1.6		)	24.3			(11.6		)	4.4			7.7			(10.5		)	12.6
Income (loss) from continuing operations	$	65.0		$	(11.9	)	$	94.1		$	(38.2	)	$	37.5		$	31.0		$	(19.2	)	$	48.6

Included in “Other operating credits and charges, net” and “(Gain) loss on sale or impairment of long-lived assets” for continuing operations are the following:

In the first quarter of 2013, LP recorded a loss of $1.6 million related to a prior year inventory adjustment.

In the second quarter of 2013, LP recorded a loss of $1.6 million related to a correction of prior years depreciation amounts associated with LP's South American operations; a loss of $4.1 million related to an increase in product related warranty reserves associated with Canexel products sold in certain geographic areas from 2004 to 2008; a loss of $1.8 million associated with a valuation allowance on the joint venture's books associated with deferred tax assets, and a loss of $0.9 million associated with the recording of a contingent liability from prior years.

In the third quarter of 2013, LP recorded a gain of $0.4 million related to proceeds received from an insurance claim associated with an OSB mill and a reduction in the fair value of $17.3 million payable in relation to the contingent consideration associated with a business combination (as discussed in Note 19); a loss of $1.0 million associated with a workers compensation reserve adjustment; a loss of $2.0 million during the quarter related to an increase in product related warranty reserves associated with CanExel products sold in certain geographic areas from 2004 through 2008; and a gain of $1.4 million related to value added taxes.

In the fourth quarter of 2013, LP recognized a loss of $4.8 million related to a change in inventory convention for spare parts; a loss of $11.6 million related to an increase in product related to warranty reserves associated with LP's South American operations; a gain of $1.5 million related to proceeds received from an insurance claim associated with an OSB mill from Chile; and a gain of $3.2 million in relation to the contingent consideration associated with a business combination.

In the first quarter of 2012, LP recorded a loss of $0.3 million associated with severance related to an indefinitely curtailed OSB mill in British Columbia, Canada as well as a reversal of a $0.5 million loss associated with an assessment related to one of its indefinitely curtailed OSB mills.

In the third quarter of 2012, LP recorded a loss of $1.0 million related to an increase in product related warranty reserves associated with Canexel products sold in Europe in prior years; a loss of $4.4 million related to the impairment of assets associated with an OSB mill in Quebec, Canada, held for sale based upon a change in the plan of their sale to reduce their carrying value to the estimated selling price less selling costs.

In the fourth quarter of 2012, LP recognized a gain of $20.0 million from the settlement of its ARS litigation with Deutsche Bank Securities, Inc.; a loss of $1.5 million related to a prior year inventory adjustment; a loss of $3.8 million consisting of $2.2 million related to a SERP curtailment associated with the retirement of LP's previous CEO and $1.6 million related to termination indemnities in South America; a gain of $5.0 million related to a reduction in product related contingency reserves associated with the national hardboard class action settlement; a gain of $3.6 million is related to a reduction in hardboard siding trim reserve and a loss of $0.8 million for additions to warranty reserves associated with a discontinued line of OSB siding.

See Notes 16 and 17 for further discussion on the other operating charges and credits, net and the gains and losses on sale of and impairment of long-lived assets mentioned above.