LOUISIANA-PACIFIC CORP MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS (Form 10-Q)

This Management's Discussion and Analysis of Financial Condition and Results of
Operations should be read in conjunction with our Condensed Consolidated
Financial Statements and related Notes and other financial information appearing
elsewhere in this quarterly report on Form 10-Q. The following discussion
includes statements that are forward-looking statements that are based on the
beliefs of our management, as well as assumptions made by and information
currently available to our management. See "Cautionary Statement Regarding
Forward-Looking Statements."

General


We are a leading provider of high-performance building solutions that meet the
demands of builders, remodelers, and homeowners worldwide. We have leveraged our
expertise serving the new home construction, repair and remodeling, and outdoor
structures markets to become an industry leader known for innovation, quality,
and reliability. Our manufacturing facilities are located in the U.S., Canada,
Chile, and Brazil.

To serve these markets, we operate in three segments: Siding, OSB and South America.


In March 2022, we sold our 50% equity interest in two joint ventures that
produce I-joists to Resolute Forest Products Inc. (Resolute) for $59 million.
The joint ventures were comprised of Resolute-LP Engineered Wood Larouche Inc.
in Larouche, Quebec, and Resolute-LP Engineered Wood St-Prime Limited
Partnership in Saint-Prime, Quebec. The total net carrying value of our equity
method investment at the date of sale was $19 million. We recognized a gain on
the sale of $39 million during the six months ended June 30, 2022, within Income
from discontinued operations in the Condensed Consolidated Statements of Income.

In June 2022, LP and one of its wholly-owned subsidiaries entered into an asset
purchase agreement with Pacific Woodtech Corporation, a Washington corporation,
and Pacific Woodtech Canada Holdings Limited, a British Columbia limited company
(collectively, the Purchaser). Pursuant to the terms and conditions of the asset
purchase agreement, LP agreed to sell to the Purchaser the assets related to its
Engineered Wood Products (EWP) segment in exchange for the Purchaser's payment
to the Company of $210 million in cash, subject to certain purchase price
adjustments, and the Purchaser's assumption of certain liabilities of the EWP
segment. On August 1, 2022, the Company completed the sale of the EWP assets to
the Purchaser. Upon closing, the Company entered into a transition services
agreement with the Purchaser, pursuant to which the Company agreed to support
the various activities of the EWP segment for a period not to exceed eight
months.

As of June 30, 2022, we have classified the related assets and liabilities
associated with the EWP segment as held for sale in our Condensed Consolidated
Balance Sheets. The results of our EWP segment have been presented as
discontinued operations in our Condensed Consolidated Statements of Income for
all periods presented. See "Note 7 - Discontinued Operations" of the Notes to
the Condensed Consolidated Financial Statements included in Item 1 of this
quarterly report on Form 10-Q for additional information.

Request for our construction products


Demand for our products correlates positively with new home construction and
repair and remodeling activity in North America, which historically has been
characterized by significant cyclicality. The U.S. Department of Census reported
on July 19, 2022, that actual single housing starts were 3% lower for the three
months ended June 30, 2022, and flat for the six months ended June 30, 2022, as
compared to the same periods in 2021. Repair and remodeling activity is
difficult to reasonably measure, but many indications, including the increase in
LP's retail sales, suggest that repair and remodeling activity is continuing to
grow.

Although housing market demand has recently been strong, future economic
conditions in the United States and the demand for homes remain uncertain due to
inflationary impacts on the economy, including interest rates, employment
levels, consumer confidence, and financial markets, among other things.
Additionally, we have experienced increases in material prices, supply
disruptions, and labor shortages, which will be a challenge as we continue to
work to meet the demands of builders, remodelers, and homeowners worldwide. The
potential effect of

                                       22
--------------------------------------------------------------------------------

these factors on our future operating and financial performance is uncertain. Therefore, our past performance may not be indicative of future results.

Supply and demand of OSB panels


OSB is a commodity product, and it is subject to competition from manufacturers
worldwide. Product supply is influenced primarily by fluctuations in available
manufacturing capacity and imports. The ratio of overall OSB demand to capacity
generally drives price. We cannot predict whether the prices of our OSB products
will remain at current levels or increase or decrease in the future.

For additional factors affecting our results, refer to the "Overview" within our
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" section and our "Risk Factors" section contained in our 2021 Annual
Report on Form 10-K, and to the "Cautionary Statement Regarding Forward-Looking
Statements" section in this quarterly report on Form 10-Q.

Significant Accounting Policies and Estimates


Note 1 of the Notes to the Condensed Consolidated Financial Statements included
in our 2021 Annual Report on Form 10-K is a discussion of our significant
accounting policies and significant accounting estimates and judgments.
Throughout the preparation of the financial statements, we employ significant
judgments in the application of accounting principles and methods. These
judgments are primarily related to the assumptions used to arrive at various
estimates.

There have been no changes in the application of the principles, methods and assumptions used to determine our significant estimates since December 31, 2021.

Non-GAAP Financial Measures and Other Key Performance Indicators


In evaluating our business, we utilize non-GAAP financial measures that fall
within the meaning of SEC Regulation G and Regulation S-K Item 10(e), which we
believe provide users of the financial information with additional meaningful
comparison to prior reported results. Non-GAAP financial measures do not have
standardized definitions and are not defined by U.S. GAAP. In this quarterly
report on Form 10-Q, we disclose income attributed to LP from continuing
operations before interest expense, provision for income taxes, depreciation and
amortization, and exclude stock-based compensation expense, loss on impairment
attributed to LP, product-line discontinuance charges, other operating credits
and charges, net, loss on early debt extinguishment, investment income, pension
settlement charges, and other non-operating items as Adjusted EBITDA from
continuing operations (Adjusted EBITDA), which is a non-GAAP financial measure.
We have included Adjusted EBITDA in this report because we view it as an
important supplemental measure of our performance and believe that it is
frequently used by interested persons in the evaluation of companies that have
different financing and capital structures and/or tax rates. We also disclose
income attributed to LP from continuing operations, excluding loss on impairment
attributed to LP, product-line discontinuance charges, interest expense outside
of normal operations, other operating credits and charges, net, loss on early
debt extinguishment, gain (loss) on acquisition, pension settlement charges, and
adjusting for a normalized tax rate as Adjusted Income from continuing
operations (Adjusted Income). We also disclose Adjusted Diluted EPS from
continuing operations (Adjusted Diluted EPS), calculated as Adjusted Income
divided by diluted shares outstanding. We believe that Adjusted Diluted EPS and
Adjusted Income are useful measures for evaluating our ability to generate
earnings and that providing these measures should allow interested persons to
more readily compare the earnings for past and future periods.

Adjusted EBITDA, Adjusted Income, and Adjusted Diluted EPS are not substitutes
for the U.S. GAAP measures of net income and net income per diluted share or for
any other U.S. GAAP measures of operating performance. It should be noted that
other companies may present similarly titled measures differently, and
therefore, as presented by us, these measures may not be comparable to similarly
titled measures reported by other companies. Adjusted EBITDA, Adjusted Income,
and Adjusted Diluted EPS have material limitations as performance measures
because they exclude items that are actually incurred or experienced in
connection with the operation of our business.

The following table reconciles net income to adjusted EBITDA (amounts in millions of dollars):



                                       23
--------------------------------------------------------------------------------
                                              Three Months Ended June 30,                  Six Months Ended June 30,
                                               2022                   2021                  2022                 2021
Net income                               $          385          $       497          $         868          $     817
Add (deduct):
Net loss attributed to noncontrolling
interest                                              -                    -                      1                  1
Income from discontinued operations, net
of income taxes                                     (37)                 (11)                   (99)               (14)
Income attributed to LP from continuing
operations                                          348                  486                    770                803
Provision for income taxes                          116                  144                    240                239
Depreciation and amortization                        32                   29                     64                 57
Stock-based compensation expense                      6                    3                     13                  5

Other operating credits and charges, net            (11)                  (3)                   (10)                (3)
Loss on early debt extinguishment                     -                    -                      -                 11
Interest expense                                      3                    4                      6                  9
Investment income                                    (2)                   -                     (3)                (1)
Other non-operating items                            (2)                   3                      8                  -
Adjusted EBITDA                          $          491          $       665          $       1,089          $   1,119

Siding                                   $           78          $        77          $         160          $     168
OSB                                                 403                  565                    908                919

South America                                        26                   34                     51                 54
Other                                                (7)                  (4)                   (13)                (8)
Corporate                                            (9)                  (7)                   (17)               (14)
Adjusted EBITDA                          $          491          $       665          $       1,089          $   1,119


                                       24
--------------------------------------------------------------------------------

The following table provides a reconciliation of net earnings to adjusted earnings (amounts in millions of dollars, except per share amounts):

                                                 Three Months Ended June 30,                  Six Months Ended June 30,
                                                  2022                   2021                  2022                 2021
Net income                                 $           385          $       497          $          868          $    817
Add (deduct):
Net loss attributed to noncontrolling
interest                                                 -                    -                       1                 1
Loss from discontinued operations                      (37)                 (11)                    (99)              (14)
Income attributed to LP from continuing
operations                                             348                  486                     770               803

Other operating credits and charges, net               (11)                  (3)                    (10)               (3)
Loss on early debt extinguishment                        -                    -                       -                11
Reported tax provision                                 116                  144                     240               239
Adjusted income before tax                             453                  627                   1,001             1,050
Normalized tax provision at 25%                       (113)                (157)                   (250)             (263)
Adjusted Income                            $           340          $       470          $          751          $    788
Diluted shares outstanding                              81                  102                      84               104
Diluted net income attributed to LP per
share                                      $          4.73          $      4.90          $        10.36          $   7.85
Adjusted Diluted EPS                       $          4.19          $      4.63          $         8.96          $   7.56

Key performance indicators


In addition, management monitors certain key performance indicators to evaluate
our business performance, which include our Overall Equipment Effectiveness
(OEE) and our sales volume relative to housing starts, as provided by reports
from the U.S. Department of Census.

The following tables set forth: (1) housing starts, (2) our North American sales
volume, and (3) OEE. We consider the following items to be key performance
indicators because LP's management uses these metrics to evaluate our business
and trends, measure our performance, and make strategic decisions, and believes
that the key performance indicators presented provide additional perspective and
insights when analyzing the core operating performance of LP. These key
performance indicators should not be considered superior to, as a substitute
for, or as an alternative to, and should be considered in conjunction with, the
U.S. GAAP financial measures presented herein. These measures may not be
comparable to similarly-titled performance indicators used by other companies.

We monitor housing starts, which is a leading external indicator of residential
construction in the United States that correlates with the demand for many of
our products. We believe that this is a useful measure for evaluating our
results and that providing this measure should allow interested persons to more
readily compare our sales volume for past and future periods to an external
indicator of product demand. Other companies may present housing start data
differently, and therefore, housing starts data presented by us may not be
comparable to similarly-titled indicators reported by other companies.

                         Three Months Ended June 30,             Six Months Ended June 30,
                        2022                    2021           2022                    2021
Housing starts1:
Single-Family           299                     309            566                     565
Multi-Family            151                     126            274                     229
                        450                     436            840                     793

1 Actual housing in the United States starts reported data with United States Census Bureau as published by
July 19, 2022.



                                       25
--------------------------------------------------------------------------------

We monitor sales volumes for our products in our Siding and OSB segments, which
we define as the number of units of our products sold within the applicable
period. Evaluating sales volume by product type helps us identify and address
changes in product demand, broad market factors that may affect our performance,
and opportunities for future growth. It should be noted that other companies may
present sales volumes differently and, therefore, as presented by us, sales
volumes may not be comparable to similarly-titled measures reported by other
companies. We believe that sales volumes can be a useful measure for evaluating
and understanding our business.

The following table sets forth sales volumes for the three and six months ended
June 30, 2022 and 2021:

                                                Three Months Ended June 30, 2022                                  Three Months Ended June 30, 2021
Sales Volume                           Siding        OSB                     South America       Total                    Siding        OSB                 South America       Total
Siding Solutions (MMSF)                 448            -                               9           457                     406            -                        13             419

OSB - commodity (MMSF)                    -               460                          -           460                       -          481                         -             481
OSB - Structural Solutions (MMSF)         -               514                        149           664                       -          403                       147             550

                                                 Six Months Ended June 30, 2022                                    Six Months Ended June 30, 2021
Sales Volume                           Siding        OSB                     South America       Total                    Siding        OSB                 South America       Total
Siding Solutions (MMSF)                 869            -                              16           885                     810            -                        26             836

OSB - commodity (MMSF)                    -          897                               -           897                       -          936                         -             936
OSB - Structural Solutions (MMSF)         -        1,040                             293         1,333                       -          804                       296           1,100


We measure the OEE of each of our mills to track improvements in the utilization
and productivity of our manufacturing assets. OEE is a composite metric that
considers asset uptime (adjusted for capital project downtime and similar
events), production rates, and finished product quality. It should be noted that
other companies may present OEE differently and, therefore, as presented by us,
OEE may not be comparable to similarly-titled measures reported by other
companies. We believe that when used in conjunction with other metrics, OEE can
be a useful measure for evaluating our ability to generate profits, and
providing this measure should allow interested persons to more readily monitor
operational improvements. OEE for the three and six months ended June 30, 2022
and 2021, for each of our segments is listed below:

                         Three Months Ended June 30,               Six Months Ended June 30,
                                2022                 2021                2022                2021
    Siding                                 76  %     74  %                         75  %     74  %
    OSB                                    71  %     77  %                         73  %     75  %

    South America                          75  %     78  %                         75  %     76  %


Results of Operations

Our results of operations are separately discussed below for each of our
segments, as well as for the "Other" category, which comprises other products
that are not individually significant. See Note 17 of the Notes to the Condensed
Consolidated Financial Statements included in Item 1 of this quarterly report on
Form 10-Q for further information regarding our segments.

Cladding


The Siding segment serves diverse end markets with a broad product offering of
engineered wood siding, trim, and fascia, including LP® SmartSide® Trim &
Siding, LP® SmartSide® ExpertFinish® Trim & Siding, LP BuilderSeries® Lap
Siding, and LP® Outdoor Building Solutions® (collectively referred to as Siding
Solutions).

Segment sales, Adjusted EBITDA and Adjusted EBITDA margin for this segment were as follows (amounts in millions of dollars):

                                       26
--------------------------------------------------------------------------------
                                                Three Months Ended June 30,                                  Six Months Ended June 30,
                                        2022                 2021              Change                2022               2021              Change
Net sales                         $        358            $   291                   23  %       $      689           $   576                   20  %
Adjusted EBITDA                             78                 77                    -  %              160               168                   (5) %
Adjusted EBITDA margin                      22    %            27  %                                    23   %            29  %


Sales in this segment by product line were as follows (dollar amounts in
millions):

                                                Three Months Ended June 30,                                   Six Months Ended June 30,
                                         2022                2021              Change                 2022                2021              Change
Siding Solutions                   $         356          $   288                   24  %       $         686          $   570                   20  %
Other                                          1                3                  (63) %                   3                6                  (48) %
Total                              $         358          $   291                   23  %       $         689          $   576                   20  %


Percent changes in average sales prices and unit shipments for the three and six
months ended June 30, 2022, compared to the corresponding periods in 2021, were
as follows:

                                                      Three Months Ended                                          Six Months Ended
                                                  June 30, 2022 versus 2021                                  June 30, 2022 versus 2021
                                           Average Net                      Unit                      Average Net                      Unit
                                          Selling Price                   Shipments                  Selling Price                   Shipments
Siding Solutions                                        12  %                       10  %                          12  %                        7  %


The combined effects of list price increases and improving mix of innovative
products drove year-over-year increases in the average net selling price for the
three and six months ended June 30, 2022. Additionally, the production ramp-up
of the Houlton facility was ahead of schedule and contributed almost half of the
year-over-year sales volume increase during the three months ended June 30,
2022.

Adjusted EBITDA increased for the three months ended June 30, 2022, reflecting
price and volume growth largely offset by $29 million of raw material and
freight inflation and $7 million of discretionary investments in support of
future growth, including siding mill conversions and sales and marketing costs.
The decrease in Adjusted EBITDA of $8 million for the six months ended June 30,
2022, reflects price and volume growth offset primarily by $55 million of raw
material and freight inflation and $19 million of discretionary investments in
support of future growth, including siding mill and sales and marketing costs.

OSB


The OSB segment manufactures and distributes OSB structural panel products,
including our value-added OSB portfolio known as LP Structural Solutions (which
includes LP® TechShield® Radiant Barrier, LP WeatherLogic® Air & Water Barrier,
LP Legacy® Premium Sub-Flooring, and LP® FlameBlock® Fire-Rated Sheathing) and
LP® TopNotch® Sub-Flooring. OSB is manufactured using wood strands arranged in
layers and bonded with resins.

Segment sales, Adjusted EBITDA and Adjusted EBITDA margin for this segment were as follows (amounts in millions of dollars):

                                                Three Months Ended June 30,                                   Six Months Ended June 30,
                                        2022                 2021              Change                2022                2021              Change
Net sales                         $        673            $   778                  (14) %       $     1,417           $ 1,317                    8  %
Adjusted EBITDA                            403                565                  (29) %               908               919                   (1) %
Adjusted EBITDA margin                      60    %            73  %                                     64   %            70  %


                                       27
--------------------------------------------------------------------------------

Sales in this segment by product line were as follows (dollar amounts in
millions):

                                                 Three Months Ended June 30,                                   Six Months Ended June 30,
                                          2022                2021              Change                2022                2021              Change
OSB - Structural Solutions          $         384          $   350                   10  %       $        791          $   605                   31  %
OSB - commodity                               287              425                  (32) %                621              707                  (12) %
Other                                           2                2                  (21) %                  5                5                    2  %
Total                               $         673          $   778                  (14) %       $      1,417          $ 1,317                    8  %


Percent changes in average sales prices and unit shipments for the three and six
months ended June 30, 2022, compared to the corresponding periods in 2021, were
as follows:

                                                       Three Months Ended                                          Six Months Ended
                                                   June 30, 2022 versus 2021                                  June 30, 2022 versus 2021
                                            Average Net                      Unit                      Average Net                      Unit
                                           Selling Price                   Shipments                  Selling Price                   Shipments
OSB - Structural Solutions                              (14) %                       28  %                           1  %                       29  %
OSB - Commodity                                         (30) %                       (4) %                          (8) %                       (4) %


OSB average net selling prices decreased year-over-year by 22% on 10% higher OSB
sales volume for the three months ended June 30, 2022, resulting in a 14%
decrease in net sales. OSB average net selling prices decreased year-over-year
by 3% on 11% higher OSB sales volume for the six months ended June 30, 2022,
resulting in an 8% increase in net sales.

The decrease in Adjusted EBITDA of $162 million for the three months ended June
30, 2022, reflects $195 million from lower prices and $22 million of increased
raw material inflation offset partially by $54 million from higher sales volume.
The decrease in Adjusted EBITDA of $11 million for the six months ended June 30,
2022, reflects $65 million from lower prices and $45 million of increased raw
material inflation offset partially by $96 million from higher sales volume.

South America


Our South America segment manufactures and distributes OSB structural panel and
siding products in South America and certain export markets. This segment has
manufacturing operations in two countries, Chile and Brazil, and operates sales
offices in Chile, Brazil, Peru, Colombia, Argentina, and Paraguay.

Segment sales, Adjusted EBITDA and Adjusted EBITDA margin for this segment were as follows (amounts in millions of dollars):

                                               Three Months Ended June 30,                                  Six Months Ended June 30,
                                        2022                2021              Change                2022               2021              Change
Net sales                         $        70            $    74                   (5) %       $      137           $   126                    8  %
Adjusted EBITDA                            26                 34                  (23) %               51                54                   (5) %
Adjusted EBITDA margin                     37    %            46  %                                    37   %            43  %


                                       28
--------------------------------------------------------------------------------

Sales in this segment by product line were as follows (dollar amounts in
millions):

                                                 Three Months Ended June 30,                                  Six Months Ended June 30,
                                         2022                2021              Change                 2022                2021              Change
OSB - Structural Solutions          $         64          $    63                    2  %       $         123          $   104                   17  %
Siding                                         6               10                  (39) %                  12               20                  (41) %
Other                                          -                -                 (100) %                   2                3                  (15) %
Total                               $         70          $    74                   (5) %       $         137          $   126                    8  %


Percent changes in average sales prices and unit shipments for the three and six
months ended June 30, 2022, compared to the corresponding periods in 2021, were
as follows:

                                                       Three Months Ended                                          Six Months Ended
                                                   June 30, 2022 versus 2021                                  June 30, 2022 versus 2021
                                            Average Net                      Unit                      Average Net                      Unit
                                           Selling Price                   Shipments                  Selling Price                   Shipments
OSB - Structural Solutions                                4  %                       (4) %                          15  %                       (1) %
Siding                                                  (14) %                      (32) %                          (3) %                      (37) %


Net sales in South America decreased year-over-year by 5% for the three months
ended June 30, 2022, predominately due to 6% lower sales volume. Net sales
increased year-over-year by 8% for the six months ended June 30, 2022, due in
large part to higher OSB prices.

The year-over-year decrease in Adjusted EBITDA of $8 million for the three
months ended June 30, 2022, reflects lower sales volume and higher costs for raw
material costs. The year-over-year decrease in Adjusted EBITDA of $3 million for
the first six months of 2022 reflects the net effect of lower sales volume,
higher raw materials costs, and higher OSB prices.

Others products


Our Other products segment includes off-site framing operation Entekra Holdings
LLC (Entekra), remaining timber and timberlands, and other minor products,
services, and closed operations, which do not qualify as discontinued
operations. Other net sales were $30 million and $55 million for the three and
six months ended June 30, 2022, respectively, as compared to $26 million and $43
million for the corresponding periods in 2021. These increases are primarily due
to increases in Entekra sales volumes.

Adjusted EBITDA was $(7) million and $(13) million for the three and six months
ended June 30, 2022, respectively, as compared to $(4) million and $(8) million
for the corresponding periods in 2021.

Selling, general and administrative expenses


Selling, general, and administrative expenses were $67 million and $129 million
for the three and six months ended June 30, 2022, respectively, compared to $53
million and $97 million for the corresponding periods in 2021. The increase in
2022 is due to increased travel, sales and marketing, and corporate overhead
primarily driven by the reduction of restrictions related to the COVID-19
pandemic and costs associated with stock compensation and performance
incentives.

Income taxes


We recognized an estimated tax provision from continuing operations of $116
million and $240 million for the three and six months ended June 30, 2022,
respectively, compared to $144 million and $239 million for the corresponding
periods of 2021. The total effective tax rate for continuing operations for the
three and six months ended June 30, 2022, was 25% and 24% compared to the 23%
for the comparable periods in 2021, respectively. Each quarter the income tax
accrual is adjusted to the latest estimate, and the difference from the
previously accrued year-to-date balance is recorded in the current quarter. For
2022 and 2021, the primary difference between the U.S. statutory rate of 21% and
the effective rate relates to state income tax.

                                       29
--------------------------------------------------------------------------------

Legal and environmental issues


For a discussion of legal and environmental matters involving us and the
potential impact thereof on our financial position, results of operations, and
cash flows, see Items 3, 7, and 8 in our 2021 Annual Report on Form 10-K and
Note 11 of the Notes to the Condensed Consolidated Financial Statements included
in Item 1 of this quarterly report on Form 10-Q.

Cash and capital resources

Insight


Our principal sources of liquidity are existing cash and investment balances,
cash generated by our operations, and our ability to borrow under such credit
facilities as we may have in effect from time to time. We may also, from time to
time, issue and sell equity, debt, or hybrid securities or engage in other
capital market transactions.

Our principal uses of liquidity are paying the costs and expenses associated
with our operations, servicing outstanding indebtedness, paying dividends, and
making capital expenditures. We may also, from time to time, prepay or
repurchase outstanding indebtedness or shares or acquire assets or businesses
that are complementary to our operations. Any such repurchases may be commenced,
suspended, discontinued, or resumed, and the method or methods of effecting any
such repurchases may be changed, at any time, or from time to time, without
prior notice.

We expect to fund our capital expenditures through cash on hand, cash generated
from operations, and available borrowing under our Amended Credit Facility, as
necessary.

Operating Activities

During the six months ended June 30, 2022 and 2021, cash provided by operations
was $908 million and $772 million, respectively. The improvement in cash
provided by operations for the period ended June 30, 2022, was primarily related
to changes in working capital and lower income payments.

Investing activities


During the six months ended June 30, 2022 and 2021, cash used in investing
activities was $135 million and $63 million, respectively. During the six months
ended June 30, 2022, we received $59 million in proceeds from the sale of our
50% equity interest in two joint ventures.

Capital expenditures for the six months ended June 30, 2022 and 2021, were $196
million and $65 million, respectively, primarily related to siding conversion
expenditures and growth and maintenance capital.

Fundraising activities


During the six months ended June 30, 2022, cash used in financing activities was
$626 million. On May 3, 2022, LP's Board of Directors authorized a share
repurchase plan under which LP was authorized to repurchase shares of LP's
common stock totaling up to $600 million (the 2022 Share Repurchase Program).
During the six months ended June 30, 2022, we used $575 million to repurchase
shares of LP common stock ($500 million from the Second 2021 Share Repurchase
Program (defined below) and $75 million from the 2022 Share Repurchase Program
(defined below)). Additionally, we paid cash dividends of $37 million and used
$15 million to repurchase stock from employees in connection with income tax
withholding requirements associated with our employee stock-based compensation
plans.

During the six months ended June 30, 2021, cash used in financing activities was
$642 million. During the six months ended June 30, 2021, we used $300 million to
repurchase shares of LP common stock under the share repurchase program
authorized by LP's Board of Directors in 2020 and $288 million to repurchase
shares of LP common stock under the repurchase program authorized by LP's Board
of Directors in May 2021. Additionally, we paid cash dividends of $33 million
and used $12 million to repurchase stock from employees in connection with
income tax withholding requirements associated with our employee stock-based
compensation plans. In March 2021, we issued $350 million in aggregate principal
amount of the 2029 Senior Notes, and in February 2021, LP delivered to holders
of the 2024 Senior Notes a conditional notice of redemption to redeem on March
27, 2021, all of the 2024 Senior Notes outstanding at a redemption price of
102.438% of the principal amount thereof plus

                                       30
--------------------------------------------------------------------------------

accrued and unpaid interest up to, but not including, the redemption date. The
redemption notice became irrevocable on March 11, 2021, and the 2024 Senior
Notes were fully redeemed on March 27, 2021. In connection with these
aforementioned financing activities, we paid $13 million in redemption premiums
and debt issuance costs.

Credit facility and letter of credit facility


In June 2021 and August 2021, we entered into the third and fourth amendments to
our revolving credit facility, dated as of June 27, 2019 (Credit Facility), with
American AgCredit, PCA, as administrative agent, and CoBank, ACB, as letter of
credit issuer (as amended, the Amended Credit Facility). The Amended Credit
Facility provides for a revolving credit facility in the principal amount of up
to $550 million, with a $60 million sub-limit for letters of credit. The Amended
Credit Facility, and all loans thereunder, become due on June 8, 2027. As of
June 30, 2022, we had no amounts outstanding under the Amended Credit Facility.

The Amended Credit Facility contains various restrictive covenants and customary
events of default, the occurrence of which could result in the acceleration of
our obligation to repay the indebtedness outstanding thereunder. The Amended
Credit Facility also contains financial covenants that require us and our
consolidated subsidiaries to have, as of the end of each quarter, a
capitalization ratio (i.e., funded debt less unrestricted cash to total
capitalization) of no more than 57.5%. As of June 30, 2022, we were in
compliance with all financial covenants under the Amended Credit Facility.

In March 2020, LP entered into the Letter of Credit Facility, which provides for
the funding of letters of credit up to an aggregate outstanding amount of $20
million, which may be secured by certain cash collateral of LP. The Letter of
Credit Facility includes an unused commitment fee, due quarterly, ranging from
0.50% to 1.875% of the daily available amount to be drawn on each letter of
credit issued under the Letter of Credit Facility. The Letter of Credit Facility
is subject to similar affirmative, negative, and financial covenants as those
set forth in the Amended Credit Facility, including the capitalization ratio
covenant. As of June 30, 2022, we were in compliance with all financial
covenants under the Letter of Credit Facility.

Other liquidity issues

Off-balance sheet arrangements


As of June 30, 2022, we had standby letters of credit of $13 million outstanding
related to collateral for environmental impact on owned properties, a deposit
for a forestry license, and insurance collateral, including workers'
compensation.

Potential deficiencies

We review our plant and investment assets for potential impairments at least annually and believe we have adequate support for the book value of our assets as of June 30, 2022.


If demand and pricing for our products are significantly below cycle average
demand and pricing, should we decide to invest capital in alternative projects,
should changes occur related to our wood supply for these locations, or should
demand and pricing of our products fall as a result of the long-term effects of
the COVID-19 pandemic, it is possible that future impairment charges will be
required. As of June 30, 2022, there were no indications of impairment.

We also review from time to time possible dispositions of various assets,
considering current and anticipated economic and industry conditions, our
strategic plan, and other relevant factors. Because a determination to dispose
of particular assets can require management to make assumptions regarding the
transaction structure of the disposition and to estimate the net sales proceeds,
which may be less than previous estimates of undiscounted future net cash flows,
we may be required to record impairment charges in connection with decisions to
dispose of assets.


                                       31

————————————————– ——————————

© Edgar Online, source Previews

About Larry Noble

Check Also

Cron’s 3-point HR lets Rockies edge past Diamondbacks 4-1

DENVER (AP) — CJ Cron hit a three-run home run, José Ureña gave up a …