Segment Information

12 Months Ended

Dec. 31, 2019

We operate our business using two reportable segments: Wood Products and Building Materials Distribution. These segments represent distinct businesses that are managed separately because of differing products and services. Each of these businesses requires distinct operating and marketing strategies. Management reviews the performance of the company based on these segments. For a description of the products sold by our segments, see Note 3, Revenues.

Unallocated corporate costs include corporate support staff services, related assets and liabilities, and pension plan activity. Support services include, but are not limited to, information technology, human resources, finance, accounting, and legal functions. Specified expenses are allocated to the segments. For many of these allocated expenses, the related assets and liabilities remain in corporate.

The segments follow the accounting principles described in Note 2, Summary of Significant Accounting Policies.

For the years ended December 31, 2019, 2018, and 2017, no customers accounted for 10% or more of total sales. Sales to foreign unaffiliated customers were approximately $76 million, $96 million, and $94 million, respectively, for the years ended December 31, 2019, 2018, and 2017.

At December 31, 2019, 2018, and 2017, and for the years then ended, long-lived assets located in foreign countries and net sales originating in foreign countries were not material.

Wood Products and Building Materials Distribution segment sales to external customers, including related parties, by product line are as follows:



	Year Ended December 31
	2019		2018		2017
	(millions)
Wood Products (a)
LVL	$	39.5	$	42.2	$	45.5
I-joists	22.1		29.3		35.2
Other engineered wood products	26.8		25.3		22.0
Plywood and veneer	255.1		336.2		324.4
Lumber (b)	52.5		86.0		87.6
Byproducts (c)	75.1		87.3		53.2
Particleboard (b)	—		37.5		46.0
Other	34.7		63.9		44.4
	505.7		707.7		658.3

Building Materials Distribution
Commodity	1,725.4		2,070.1		1,808.2
General line	1,580.7		1,421.5		1,269.5
Engineered wood products	831.6		796.0		696.0
	4,137.7		4,287.6		3,773.7
	$	4,643.4	$	4,995.3	$	4,432.0

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(a)

Amounts represent sales to external customers. Sales are calculated after intersegment sales eliminations to our Building Materials Distribution segment, as well as the cost of EWP rebates and sales allowances provided at various stages of the supply chain (including distributors, retail lumberyards, and professional builders). For the year ended December 31, 2019, approximately 77% of Wood Products' EWP sales volumes were to our Building Materials Distribution segment.


(b)	In fourth quarter 2018, we sold two lumber mills and our particleboard plant located in Northeast Oregon. For additional information, see Note 7, Sale of Manufacturing Facilities.


(c)	As discussed in Note 3, Revenues, upon adoption of ASC Topic 606, Revenue from Contracts with Customers, under the modified retrospective method on January 1, 2018, amounts recorded in 2017 have not been adjusted.

An analysis of our operations by segment is as follows:



	Year Ended December 31
	2019			2018			2017
	(thousands)
Net sales by segment
Wood Products	$	1,275,167		$	1,533,270		$	1,373,760
Building Materials Distribution	4,137,719			4,287,702			3,773,810
Intersegment eliminations and other (a)	(769,482		)	(825,682		)	(715,579		)
Total net sales	$	4,643,404		$	4,995,290		$	4,431,991

Segment operating income (loss)
Wood Products (b)	$	54,197		$	(10,022	)	$	53,629
Building Materials Distribution	116,236			112,510			116,760
Total segment operating income	170,433			102,488			170,389
Unallocated corporate costs	(33,974		)	(30,450		)	(28,976		)
Income from operations	$	136,459		$	72,038		$	141,413

Depreciation and amortization
Wood Products (c)	$	57,671		$	126,989		$	63,115
Building Materials Distribution	20,769			18,280			15,504
Corporate	1,701			1,568			1,760
Total depreciation and amortization	$	80,141		$	146,837		$	80,379

Capital expenditures
Wood Products	$	53,460		$	53,392		$	54,600
Building Materials Distribution (d)	40,722			51,306			19,301
Corporate	4,214			771			1,549
Total capital expenditures	$	98,396		$	105,469		$	75,450

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(a)	Primarily represents intersegment sales from our Wood Products segment to our Building Materials Distribution segment. During 2019, 2018, and 2017, approximately 60%, 54%, and 52%, respectively, of Wood Products' overall sales were to our Building Materials Distribution segment.

(b)

Wood Products segment operating loss for the year ended December 31, 2018, includes pre-tax facility impairment and sales related losses of $35.5 million, as well as $57.8 million of accelerated depreciation and other curtailment costs related to the permanent curtailment of LVL production at our Roxboro, North Carolina facility. For more information, see Note 6, Curtailment of Manufacturing Facilities and Note 7, Sale of Manufacturing Facilities.


(c)	Depreciation and amortization for Wood Products includes $55.0 million of accelerated depreciation to fully depreciate the curtailed LVL production assets at our Roxboro, North Carolina facility during fourth quarter 2018. For more information, see Note 6, Curtailment of Manufacturing Facilities.


(d)	Capital spending in 2019 and 2018 for Building Materials Distribution includes $15.7 million and $25.5 million, respectively, for the acquisition of wholesale building material distribution locations. For more information, see Note 8, Acquisitions.



	December 31
	2019		2018
	(thousands)
Assets
Wood Products	$	635,475	$	690,400
Building Materials Distribution	768,095		699,261
Corporate	289,781		191,587
Total assets	$	1,693,351	$	1,581,248