SEGMENT INFORMATION

LP operates in four segments: 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. In the current year, the Company recast the prior year presentation of its reportable segments to show South American operations as a separate segment based upon the attainment of certain thresholds as defined by the Financial Accounting Standards Board (“FASB”). 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	2012			2011			2010
SALES BY BUSINESS SEGMENT
OSB	$	814.1		$	542.0		$	602.7
Siding	500.9			429.8			427.8
Engineered Wood Products	213.4			203.3			192.0
South America	168.8			144.9			124.7
Other products	37.4			39.4			42.9
Intersegment Sales	(18.8		)	(2.5		)	(6.5		)
Total sales	$	1,715.8		$	1,356.9		$	1,383.6
PROFIT (LOSS) BY BUSINESS SEGMENT
OSB	$	124.0		$	(63.5	)	$	25.8
Siding	67.4			42.0			51.3
Engineered Wood Products	(13.9		)	(15.5		)	(21.3		)
South America	18.0			11.6			7.2
Other products	(5.7		)	(12.5		)	(1.1		)
Other operating credits and charges, net	2.9			11.2			(0.1		)
Gain (loss) on sales of and impairments of long-lived assets	(4.9		)	(73.9		)	(2.4		)
General corporate and other expense, net	(78.7		)	(66.4		)	(73.4		)
Investment income	14.8			28.7			38.4
Interest expense, net of capitalized interest	(49.3		)	(56.9		)	(63.9		)
Other-than-temporary investment impairment	—			(14.8		)	(17.0		)
Other non-operating income (expense)	(34.9		)	(1.0		)	2.2
Income (loss) from continuing operations before taxes	39.7			(211.0		)	(54.3		)
Provision (benefit) for income taxes	7.6			(39.1		)	(22.1		)
Income (loss) from continuing operations	$	32.1		$	(171.9	)	$	(32.2	)

	Year ended December 31,
	2012			2011			2010
DEPRECIATION AND AMORTIZATION
OSB	$	33.1		$	36.3		$	37.4
Siding	15.5			15.5			18.1
Engineered Wood Products	11.0			12.6			13.1
South America	12.0			11.6			10.0
Other products	0.6			0.8			1.1
Non-segment related	1.7			2.1			2.3
Total depreciation and amortization	$	73.9		$	78.9		$	82.0

CAPITAL EXPENDITURES
OSB	$	10.1		$	8.9		$	7.1
Siding	8.7			5.9			5.6



Engineered Wood Products	2.5		2.0		0.4
South America	4.6		2.7		1.1
Other products	0.9		0.2		—
Non-segment related	4.4		1.7		0.3
Total capital expenditures	$	31.2	$	21.4	$	14.5

Information concerning identifiable assets by segment is as follows:



Dollar amounts in millions	December 31,
Dollar amounts in millions	2012		2011
IDENTIFIABLE ASSETS
OSB	$	532.0	$	525.6
Siding	178.1		167.1
Engineered Wood Products	136.5		141.4
South America	168.1		156.6
Other products	25.2		33.6
Non-segment related	1,291.1		1,115.6
Total assets	$	2,331.0	$	2,139.9

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	2012			2011			2010
GEOGRAPHIC SEGMENTS
Total Sales—Point of origin
U.S.	$	1,342		$	991		$	1,015
Canada	331			280			314
South America	164			145			125
Intersegment sales	(121		)	(59		)	(70		)
Total Sales	$	1,716		$	1,357		$	1,384
Operating profit (loss)
U.S.	$	169		$	14		$	55
Canada	3			(64		)	—
South America	18			12			7
Other operating credits and charges, net and gain (loss) on sales of and impairments of long-lived assets	(2		)	(63		)	(3		)
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	(148		)	(110		)	(113		)
	40			(211		)	(54		)
Provision (benefit) for income taxes	8			(39		)	(22		)
Income (loss) from continuing operations	$	32		$	(172	)	$	(32	)

IDENTIFIABLE TANGIBLE LONG LIVED ASSETS
U.S.	$	540		$	576		$	683
Canada	144			158			172
South America	100			107			127
Total assets	$	784		$	841		$	982

Interim Financial Results (unaudited)



	1ST QTR						2ND QTR						3RD QTR						4TH QTR
(Dollars in millions, except per share)	2012			2011			2012			2011			2012			2011			2012			2011
QUARTERLY DATA
Net sales	$	361.5		$	331.7		$	427.8		$	362.4		$	467.8		$	350.6		$	458.7		$	312.2
Income (loss) from continuing operations before taxes, equity in (income) loss of unconsolidated affiliates	(10.6		)	(26.4		)	(45.5		)	(33.9		)	37.3			(74.2		)	56.8			(49.6		)
Income (loss) from continuing operations	(11.2		)	(22.9		)	(37.2		)	(32.9		)	31.4			(59.3		)	49.1			(56.8		)
Net income (loss)	$	(11.3	)	$	(22.9	)	$	(37.3	)	$	(35.4	)	$	31.3		$	(65.6	)	$	46.1		$	(57.2	)
Income (loss) from continuing operations per share—basic	$	(0.08	)	$	(0.18	)	$	(0.27	)	$	(0.25	)	$	0.23		$	(0.44	)	$	0.35		$	(0.42	)
Income (loss) from continuing operations per share—diluted	$	(0.08	)	$	(0.18	)	$	(0.27	)	$	(0.25	)	$	0.22		$	(0.44	)	$	0.34		$	(0.42	)
Net income (loss) per share—basic	$	(0.08	)	$	(0.18	)	$	(0.27	)	$	(0.27	)	$	0.23		$	(0.49	)	$	0.33		$	(0.42	)
Net income (loss) per share—diluted	$	(0.08	)	$	(0.18	)	$	(0.27	)	$	(0.27	)	$	0.22		$	(0.49	)	$	0.32		$	(0.42	)
Cash dividends per share	—			—			—			—			—			—			—			—
SALES BY SEGMENT:
OSB	$	149.0		$	132.1		$	194.9		$	140.6		$	226.6		$	138.8		$	243.1		$	130.6
Siding	113.1			106.2			137.0			118.6			134.1			112.0			116.7			93.0
Engineered wood products	48.6			48.3			51.7			53.6			61.5			54.9			51.6			46.4
South America	42.4			35.3			42.7			39.5			42.0			36.3			41.7			33.8
Other	10.0			10.5			10.7			10.4			9.1			9.5			7.5			9.1
Intersegment sales	(1.6		)	(0.7		)	(9.2		)	(0.3		)	(5.5		)	(0.9		)	(1.9		)	(0.7		)
Total net sales	$	361.5		$	331.7		$	427.8		$	362.4		$	467.8		$	350.6		$	458.7		$	312.2
PROFIT (LOSS) BY BUSINESS SEGMENT
OSB	$	(0.3	)	$	(9.1	)	$	17.0		$	(22.9	)	$	49.3		$	(16.0	)	$	58.0		$	(15.5	)
Siding	16.8			12.7			19.4			11.3			20.3			11.8			11.0			6.2
Engineered wood products	(2.8		)	(5.5		)	(3.4		)	(3.2		)	(3.0		)	(3.2		)	(4.6		)	(3.6		)
South America	3.1			3.6			3.6			4.2			4.5			2.3			6.8			1.5
Other	(0.7		)	(0.7		)	(1.9		)	(2.0		)	(2.0		)	(3.2		)	(1.2		)	(6.6		)
Other operating credits and charges, net	0.2			0.8			(0.2		)	0.6			(1.2		)	9.8			4.1			—
Loss on sale of and impairment of long-lived assets	(0.1		)	(5.5		)	(0.1		)	(2.5		)	(4.3		)	(65.0		)	(0.4		)	(0.9		)
General corporate and other expenses, net	(20.1		)	(17.8		)	(18.2		)	(16.5		)	(18.1		)	(15.2		)	(22.4		)	(16.9		)
Non-operating income (expense)	(0.1		)	1.8			(54.8		)	0.6			0.4			(4.0		)	19.6			0.6
Other-than-temporary investment impairment	—			—			—			—			—			—			—			(14.8		)
Investment income	4.2			4.0			3.4			3.5			4.1			16.7			3.1			4.5
Interest expense, net of capitalized interest	(12.6		)	(14.0		)	(13.1		)	(14.4		)	(10.7		)	(14.2		)	(12.9		)	(14.3		)
Income (loss) from operations before taxes	(12.4		)	(29.7		)	(48.3		)	(41.3		)	39.3			(80.2		)	61.1			(59.8		)
Provision (benefit) for income taxes	(1.2		)	(6.8		)	(11.1		)	(8.4		)	7.9			(20.9		)	12.0			(3.0		)
Income (loss) from continuing operations	$	(11.2	)	$	(22.9	)	$	(37.2	)	$	(32.9	)	$	31.4		$	(59.3	)	$	49.1		$	(56.8	)

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 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 $3.8 million consisting of $2.2 million related to 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.

In the first quarter of 2011, LP recorded a gain of $0.8 million associated with an action against a previous claim inspector associated with LP's hardboard class action for various states.

In the second quarter of 2011, LP recorded a gain of $1.5 million related to reductions in reforestation liabilities associated with LP's Canadian timber obligations and an increase of $0.9 million in environmental reserves associated with a facility currently held for sale.

In the third quarter of 2011, LP recorded a loss of $0.4 million associated with severance related to an indefinitely curtailed OSB mill in British Columbia, Canada. Additionally, LP recorded a gain of $10.7 million related to a reduction in product related contingency reserves associated with the national hardboard class action settlement.

In the fourth quarter of 2011, LP recorded an other than temporary impairment of an equity investment of $14.8 million.

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.