Fair Value Measurements

6 Months Ended

Jun. 30, 2012

Fair Value Disclosures [Abstract]

Fair Value Measurements

FAIR VALUE MEASUREMENTS

LP’s investments that are measured at fair value on a recurring basis are categorized below using the fair value hierarchy. The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value. Level 1 refers to fair values determined based on quoted prices in active markets for identical assets. Level 2 refers to fair values estimated using significant other observable inputs and Level 3 includes fair values estimated using significant non-observable inputs.

The following table summarizes assets measured on a recurring basis for each of the three hierarchy levels presented below.

Dollar amounts in millions	June 30, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Available for sale securities	$	1.0	$	—	$	—	$	1.0
Trading securities	2.9		2.9		—		—
Total	$	3.9	$	2.9	$	—	$	1.0
Dollar amounts in millions	December 31, 2011		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Available for sale securities	$	0.7	$	—	$	—	$	0.7
Trading securities	2.7		2.7		—		—
Total	$	3.4	$	2.7	$	—	$	0.7

Due to the lack of observable market quotations on a portion of LP’s Auction Rate Securities (ARS) portfolio, LP evaluates the structure of its ARS holdings and current market estimates of fair value, including fair value estimates from issuing banks that rely exclusively on Level 3 inputs. These inputs include those that are based on expected cash flow streams and collateral values, including assessments of counterparty credit quality, default risk underlying the security, discount rates and overall capital market liquidity. The valuation of LP’s ARS investment portfolio is subject to uncertainties that are difficult to predict. Factors that may impact LP’s valuation include changes to credit ratings of the securities as well as to the underlying assets supporting those securities, rates of default of the underlying assets, underlying collateral value, discount rates, counterparty risk and ongoing strength and quality of market credit and liquidity.

Trading securities consist of rabbi trust financial assets which are recorded in other assets in LP’s consolidated balance sheets. The rabbi trust holds the assets of the Louisiana-Pacific Corporation 2004 Executive Deferred Compensation Plan (EDC), a non-qualified deferred compensation plan which allows certain management employees to defer receipt of a portion of their compensation and contribute such amounts to one or more investment funds. 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 following table summarizes changes in assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the periods ended June 30, 2011 and June 30, 2012.

Dollar amounts in millions	Available for sale  securities
Balance at December 31, 2010	$	11.6
Total realized/unrealized gains included in other comprehensive income	3.6
Balance at June 30, 2011	$	15.2
The amount of total losses for the period included in net loss attributable to the fair value of changes in assets still held at June 30, 2011	$	—
Balance at December 31, 2011	$	0.7
Total realized/unrealized gains included in other comprehensive income	0.3
Balance at June 30, 2012	$	1.0
The amount of total losses for the period included in net loss attributable to the fair value of changes in assets still held at June 30, 2012	$	—

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

During the quarter ended March 31, 2011, LP recorded an impairment charge of $3.6 million to reduce the carrying value of the assets held for sale to the estimated selling price less selling cost. The valuation of these assets was determined using Level 1 inputs under the market approach. Additionally, LP recorded an impairment charge of $1.9 million on assets no longer used.

During the quarter ended June 30, 2011, LP recorded an impairment charge of $2.5 million on assets no longer used.