NOTE 3 - REVENUE

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

Customer programs and incentives are a common practice in our businesses. Our businesses incur customer program costs to obtain favorable product placement, to promote sales of products and to maintain competitive pricing. Customer program costs and incentives, including rebates and promotion and volume allowances, are accounted for as deductions from net sales at the time the program is initiated. These reductions from revenue are recorded at the later of 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 of customer volume achievement and other factors incorporated into customer agreements, such as new product purchases, store sell-through and merchandising support. Management periodically reviews accruals for these rebates and allowances, and adjusts accruals when circumstances indicate (typically as a result of a change in volume expectations). As of September 30, 2018 and December 31, 2017, we had $27.5 million and $24.2 million accrued as customer rebates recorded in Accounts payable and accrued liabilities on our Consolidated Balance Sheets.

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. The amount of consignment inventory as of September 30, 2018 and December 31, 2017 was $18.2 million and $18.3 million.

The following tables disaggregate our revenue by product line and product type by segment for the quarter and nine months ended September 30, 2018:



Quarter Ended September 30, 2018
By Product family:	Siding		OSB		EWP		South America		Other		Inter-segment		Total
SmartSide^® Strand siding	$	187.7	$	—	$	—	$	3.4	$	—	$	—	$	191.1
SmartSide^® Fiber siding	30.4		—		—		—		—		—		30.4
CanExel^® siding	7.0		—		—		—		—		—		7.0
OSB - commodity	13.3		196.5		1.0		—		—		—		210.8
OSB - value-add	0.4		150.9		3.5		30.4		—		—		185.2
LVL	—		—		35.7		—		—		—		35.7
LSL	—		—		18.1		—		—		—		18.1
I-joist	—		—		34.1		—		—		—		34.1
Plywood	—		—		7.7		—		—		—		7.7
Other	2.0		1.7		4.7		0.7		7.6		—		16.7
	$	240.8	$	349.1	$	104.8	$	34.5	$	7.6	$	—	$	736.8
By Product type:
Commodity	$	13.3	$	196.5	$	8.7	$	—	$	—	$	—	$	218.5
Value-add	225.5		150.9		91.4		33.8		—		—		501.6
Other	2.0		1.7		4.7		0.7		7.6		—		16.7
	$	240.8	$	349.1	$	104.8	$	34.5	$	7.6	$	—	$	736.8



Nine Months Ended September 30, 2018
By Product family:	Siding		OSB		EWP		South America		Other		Inter-segment		Total
SmartSide^® Strand siding	$	546.3	$	—	$	—	$	17.1	$	—	$	—	$	563.4
SmartSide^® Fiber siding	84.2		—		—		—		—		—		84.2
CanExel^® siding	33.4		—		—		—		—		—		33.4
OSB - commodity	34.4		608.5		9.0		—		—		—		651.9
OSB - value-add	22.0		435.4		11.4		102.5		—		—		571.3
LVL	—		—		112.7		—		—		—		112.7
LSL	—		—		48.8		—		—		—		48.8
I-joist	—		—		97.7		—		—		—		97.7
Plywood	—		—		23.3		—		—		—		23.3
Other	9.1		5.9		11.7		2.6		22.9		—		52.2
	$	729.4	$	1,049.8	$	314.6	$	122.2	$	22.9	$	—	$	2,238.9
By Product type:
Commodity	$	34.4	$	608.5	$	32.3	$	—	$	—	$	—	$	675.2
Value-add	685.9		435.4		270.6		119.6		—		—		1,511.5
Other	9.1		5.9		11.7		2.6		22.9		—		52.2
	$	729.4	$	1,049.8	$	314.6	$	122.2	$	22.9	$	—	$	2,238.9

The following tables disaggregate our revenue by product line and product type by segment for the quarter and nine months ended September 30, 2017:



Quarter Ended September 30, 2017
By Product family:	Siding		OSB		EWP		South America		Other		Inter-segment			Total
SmartSide^® Strand siding	$	161.6	$	—	$	—	$	3.3	$	—	$	(1.7	)	$	163.2
SmartSide^® Fiber siding	28.4		—		—		—		—		—			28.4
CanExel^® siding	13.1		—		—		—		—		—			13.1
OSB - commodity	20.2		209.5		1.8		—		—		—			231.5
OSB - value-add	—		139.1		3.4		34.0		—		—			176.5
LVL	—		—		37.7		—		—		—			37.7
LSL	—		—		12.5		—		—		—			12.5
I-joist	—		—		32.0		—		—		—			32.0
Plywood	—		—		8.2		—		—		—			8.2
Other	2.9		2.3		2.5		1.0		6.5		—			15.2
	$	226.2	$	350.9	$	98.1	$	38.3	$	6.5	$	(1.7	)	$	718.3
By Product type:
Commodity	$	20.2	$	209.5	$	10.0	$	—	$	—	$	—		$	239.7
Value-add	203.1		139.1		85.6		37.3		—		(1.7		)	463.4
Other	2.9		2.3		2.5		1.0		6.5		—			15.2
	$	226.2	$	350.9	$	98.1	$	38.3	$	6.5	$	(1.7	)	$	718.3



Nine Months Ended September 30, 2017
By Product family:	Siding		OSB		EWP		South America		Other		Inter-segment			Total
SmartSide^® Strand siding	$	482.0	$	—	$	—	$	14.1	$	—	$	(3.5	)	$	492.6
SmartSide^® Fiber siding	86.4		—		—		—		—		—			86.4
CanExel^® siding	41.6		—		—		—		—		—			41.6
OSB - commodity	53.6		551.5		6.9		—		—		—			612.0
OSB - value-add	—		384.3		9.9		97.8		—		—			492.0
LVL	—		—		107.9		—		—		—			107.9
LSL	—		—		35.1		—		—		—			35.1
I-joist	—		—		88.1		—		—		—			88.1
Plywood	—		—		18.8		—		—		—			18.8
Other	7.6		8.5		7.7		2.9		22.3		(0.2		)	48.8
	$	671.2	$	944.3	$	274.4	$	114.8	$	22.3	$	(3.7	)	$	2,023.3
By Product type:
Commodity	$	53.6	$	551.5	$	25.7	$	—	$	—	$	—		$	630.8
Value-add	610.0		384.3		241.0		111.9		—		(3.5		)	1,343.7
Other	7.6		8.5		7.7		2.9		22.3		(0.2		)	48.8
	$	671.2	$	944.3	$	274.4	$	114.8	$	22.3	$	(3.7	)	$	2,023.3