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TheStreet Open House

LP Reports Third Quarter 2012 Results

LP is a premier supplier of building materials, delivering innovative, high-quality commodity and specialty products to its retail, wholesale, homebuilding and industrial customers. Visit LP's web site at www.lpcorp.com for additional information on the company as well as reconciliation of non-GAAP results.

FORWARD LOOKING STATEMENTS

This news release contains statements concerning Louisiana-Pacific Corporation's (LP) future results and performance that are forward- looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The matters addressed in these statements are subject to a number of risks, uncertainties and assumptions that may cause actual results to differ materially from those projected, including, but not limited to, the effect of general economic conditions, including the level of interest rates and housing starts, market demand for the company's products, and prices for structural products; the availability, cost and other terms of capital; the efficiency and consequences of operations improvement initiatives and cash conservation measures; the effect of forestry, land use, environmental and other governmental regulations; the ability to obtain regulatory approvals; and the risk of losses from fires, floods and other natural disasters. These and other factors that could cause or contribute to actual results differing materially from those contemplated by such forward-looking statements are discussed in greater detail in the company's Securities and Exchange Commission filings.

LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES

FINANCIAL AND QUARTERLY DATA

(Dollar amounts in millions, except per share amounts) (Unaudited)

   

Quarter EndedSeptember 30,

Nine Months EndedSeptember 30,

2012   2011 2012   2011
Net sales $ 467.8 $ 350.6 $ 1,257.1 $ 1,044.7
 
Income (loss) from operations $ 43.5 $ (72.7 ) $ 60.4 $ (114.5 )
 
Income (loss) from continuing operations before taxes and equity in (income) losses of unconsolidated affiliates $ 37.3 $ (74.2 ) $ (18.8 ) $ (134.5 )
 
Non-GAAP Adjusted income (loss) from continuing operations $ 29.1 $ (26.1 ) $ 23.1 $ (68.0 )
 
Income (loss) from continuing operations $ 31.4 $ (59.3 ) $ (17.0 ) $ (115.1 )
 
Net income (loss) attributed to LP $ 31.3 $ (65.6 ) $ (17.3 ) $ (124.1 )
 
Net income (loss) per share - basic $ 0.23 $ (0.49 ) $ (0.13 ) $ (0.94 )
 
Net income (loss) per share - fully diluted $ 0.22 $ (0.49 ) $ (0.13 ) $ (0.94 )
 
Average shares of stock outstanding - basic 137.1 134.5 136.9 132.4
 
Average shares of stock outstanding - fully diluted 142.6 134.5 136.9 132.4

CONSOLIDATED STATEMENTS OF INCOME

LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES

(Dollar amounts in millions, except per share amounts) (Unaudited)

   

Quarter EndedSeptember 30,

Nine Months EndedSeptember 30,

2012   2011 2012   2011
Net sales $ 467.8 $ 350.6 $ 1,257.1 $ 1,044.7
Operating costs and expenses:
Cost of sales 369.3 322.0 1,042.5 953.3
Depreciation and amortization 18.9 19.6 55.9 61.2
Selling and administrative 30.6 26.5 92.6 82.9
Loss on sale or impairment of long-lived assets, net 4.3 65.0 4.5 73.0
Other operating credits and charges, net 1.2   (9.8 ) 1.2   (11.2 )
Total operating costs and expenses 424.3   423.3   1,196.7   1,159.2  
Income (loss) from operations 43.5   (72.7 ) 60.4   (114.5 )
 
Non-operating income (expense):
Interest expense, net of capitalized interest (10.7 ) (14.2 ) (36.4 ) (42.6 )
Investment income 4.1 16.7 11.7 24.2
Early debt extinguishment (52.2 )
Other non-operating items 0.4   (4.0 ) (2.3 ) (1.6 )
Total non-operating expense (6.2 ) (1.5 ) (79.2 ) (20.0 )
 
Income (loss) from continuing operations before taxes and equity in (income) losses of unconsolidated affiliates 37.3 (74.2 ) (18.8 ) (134.5 )
Provision (benefit) for income taxes 7.9 (20.9 ) (4.4 ) (36.1 )
Equity in (income) loss of unconsolidated affiliates (2.0 ) 6.0   2.6   16.7  
Income (loss) from continuing operations 31.4   (59.3 ) (17.0 ) (115.1 )
 
Loss from discontinued operations before taxes (0.2 ) (10.3 ) (0.5 ) (14.4 )
Benefit for income taxes (0.1 ) (4.0 ) (0.2 ) (5.6 )
Loss from discontinued operations (0.1 ) (6.3 ) (0.3 ) (8.8 )
 
Net income (loss) 31.3 (65.6 ) (17.3 ) (123.9 )
Less: Net income attributed to non-controlling interest       0.2  
Income (loss) attributed to Louisiana-Pacific Corporation $ 31.3   $ (65.6 ) $ (17.3 ) $ (124.1 )
 
Income (loss) per share of common stock (basic):
Income (loss) from continuing operations $ 0.23 $ (0.44 ) $ (0.13 ) $ (0.87 )
Loss from discontinued operations   (0.05 )   (0.07 )
Net income (loss) per share $ 0.23   $ (0.49 ) $ (0.13 ) $ (0.94 )
 
Net income (loss) per share of common stock (diluted):
Income (loss) from continuing operations $ 0.22 $ (0.44 ) $ (0.13 ) $ (0.87 )
Loss from discontinued operations   (0.05 )   (0.07 )
Net income (loss) per share $ 0.22   $ (0.49 ) $ (0.13 ) $ (0.94 )
 
Average shares of stock outstanding - basic 137.1 134.5 136.9 132.4
Average shares of stock outstanding - diluted 142.6 134.5 136.9 132.4
 
Amounts attributed to LP Corporation common shareholders
Income (loss) from continuing operations, net of tax $ 31.4 $ (59.3 ) $ (17.0 ) $ (115.3 )
Loss from discontinued operations, net of tax (0.1 ) (6.3 ) (0.3 ) (8.8 )
$ 31.3   $ (65.6 ) $ (17.3 ) $ (124.1 )

CONDENSED CONSOLIDATED BALANCE SHEETS

LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES

(Dollar amounts in millions) (Unaudited)

   
September 30, 2012 December 31, 2011
ASSETS
Cash and cash equivalents $ 490.5 $ 340.0
Receivables 104.6 65.1
Income tax receivable 3.6 3.5
Inventories 209.3 163.6
Prepaid expenses and other current assets 8.2 5.7
Deferred income taxes 13.3 17.0
Current portion of notes receivable from asset sales 101.4 10.0
Assets held for sale 32.5   51.9  
Total current assets 963.4   656.8  
 
Timber and timberlands 40.2 45.5
 
Property, plant and equipment, at cost 2,066.8 2,028.1
Accumulated depreciation (1,314.6 ) (1,245.9 )
Net property, plant and equipment 752.2   782.2  
 
Notes receivable from asset sales 432.2 523.5
Long-term investments 1.8 0.7
Restricted cash 11.9 12.9
Investments in and advances to affiliates 70.4 79.1
Deferred debt costs 9.5 8.9
Other assets 27.8 26.3
Long-term deferred tax asset 4.0   4.0  
Total assets $ 2,313.4   $ 2,139.9  
 
LIABILITIES AND EQUITY
Current portion of long-term debt $ 7.8 $ 5.3
Current portion of limited recourse notes payable 97.9 7.9
Accounts payable and accrued liabilities 165.5 122.3
Current portion of contingency reserves 4.0   4.0  
Total current liabilities 275.2   139.5  
 
Long-term debt, excluding current portion 785.4 715.9
Contingency reserves, excluding current portion 16.1 17.2
Other long-term liabilities 140.7 160.4
Deferred income taxes 103.1 106.0
 
Stockholders’ equity:
Common stock 150.4 149.8
Additional paid-in capital 536.5 549.9
Retained earnings 664.5 681.8
Treasury stock (256.7 ) (274.4 )
Accumulated comprehensive loss (101.8 ) (106.2 )
Total stockholders’ equity 992.9   1,000.9  
Total liabilities and stockholders’ equity $ 2,313.4   $ 2,139.9  

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES

(Dollar amounts in millions) (Unaudited)

   

Quarter EndedSeptember 30,

 

Nine Months EndedSeptember 30,

2012   2011 2012   2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 31.3 $ (65.6 ) $ (17.3 ) $ (123.9 )
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization 18.9 19.6 55.9 61.2
(Income) loss from unconsolidated affiliates (2.0 ) 6.0 2.6 16.7
Loss on sale or impairment of long-lived assets 4.3 65.0 4.5 73.0
Other operating credits and charges, net 1.2 (9.8 ) 1.2 (11.2 )
Realized gain on sale of long-term investments (15.2 ) (15.2 )
Stock-based compensation related to stock plans 1.8 1.6 6.4 6.4
Exchange (gain) loss on remeasurement 5.7 (3.8 ) 4.8 (1.1 )
Early debt extinguishment 52.2
Cash settlement of contingencies (0.4 ) (0.4 ) (1.6 ) (1.3 )
Cash settlements of warranties, net of accruals (3.0 ) 4.9 (6.9 ) 5.2
Pension expense, net of cash payments 2.2 (10.4 ) 6.3 (10.0 )
Non-cash interest expense, net 0.5 3.6 1.9 7.3
Other adjustments, net (1.8 ) 0.6 (0.7 ) 4.2
(Increase) decrease in receivables (3.3 ) 2.5 (38.2 ) (22.2 )
(Increase) decrease in income tax receivable 0.5 9.6 (0.1 ) 14.3
(Increase) decrease in inventories (5.6 ) 14.6 (41.6 ) (6.0 )
(Increase) decrease in prepaid expenses 0.6 (0.3 ) (2.4 ) (3.2 )
Increase in accounts payable and accrued liabilities 7.2 3.6 26.6 1.3
Increase (decrease) in deferred income taxes 7.7     (21.0 )   (4.8 )   (29.3 )
Net cash provided by (used in) operating activities 65.8     5.1     48.8     (33.8 )
CASH FLOWS FROM INVESTING ACTIVITIES:
Property, plant and equipment additions (9.3 ) (5.4 ) (16.1 ) (13.4 )
Receipt of proceeds (investments) in joint ventures 8.8 (1.5 ) 6.6 (4.6 )
Proceeds from sales of assets 0.9 9.1 1.2
Proceeds from sale of investments 19.1 19.1
Decrease in restricted cash under letters of credit/credit facility   0.2   1.0   16.6  
Net cash provided by (used in) investing activities (0.5 ) 13.3   0.6   18.9  
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings of long-term debt 10.0 350.0 10.0
Repayment of long-term debt (0.2 ) (0.1 ) (242.3 ) (0.2 )
Short term borrowings, net of repayments (4.5 )
Sale of common stock under equity plans 0.8 1.2
Redemption of non-controlling interest (24.0 )
Payment of debt issuance fees     (6.3 ) (1.0 )
Net cash provided by (used in) financing activities 0.6   5.4   102.6   (15.2 )
EFFECT OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS (2.5 ) 2.3   (1.5 ) 0.9  
Net increase (decrease) in cash and cash equivalents 63.4 26.1 150.5 (29.2 )
Cash and cash equivalents at beginning of period 427.1   334.0   340.0   389.3  
Cash and cash equivalents at end of period $ 490.5   $ 360.1   $ 490.5   $ 360.1  

LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES

SELECTED SEGMENT INFORMATION

(Dollar amounts in millions) (Unaudited)

   

Quarter EndedSeptember 30,

Nine Months EndedSeptember 30,

Dollar amounts in millions 2012   2011 2012   2011
Net sales:
OSB $ 226.6 $ 138.8 $ 571.0 $ 411.4
Siding 134.1 112.0 384.2 336.6
Engineered Wood Products 61.5 54.9 161.8 156.9
South America 42.0 36.3 127.1 111.1
Other 9.1 9.5 29.9 30.4
Intersegment sales (5.5 ) (0.9 ) (16.9 ) (1.7 )
$ 467.8   $ 350.6   $ 1,257.1   $ 1,044.7  
Operating profit (loss):
OSB $ 49.3 $ (16.0 ) $ 66.0 $ (48.0 )
Siding 20.3 11.8 56.4 35.9
Engineered Wood Products (3.0 ) (3.2 ) (9.3 ) (11.9 )
South America 4.5 2.3 11.2 10.1
Other (2.0 ) (3.2 ) (4.5 ) (5.9 )
Other operating credits and charges, net (1.2 ) 9.8 (1.2 ) 11.2
Loss on sale or impairment of long-lived assets (4.3 ) (65.0 ) (4.5 ) (73.0 )
General corporate and other expenses, net (18.1 ) (15.2 ) (56.3 ) (49.6 )
Foreign currency gains (losses) 0.4 (4.0 ) (2.3 ) (1.6 )
Early debt extinguishment (52.2 )
Investment income 4.1 16.7 11.7 24.2
Interest expense, net of capitalized interest (10.7 ) (14.2 ) (36.4 ) (42.6 )
Income (loss) from continuing operations before taxes 39.3 (80.2 ) (21.4 ) (151.2 )
Provision (benefit) for income taxes 7.9     (20.9 )   (4.4 )   (36.1 )
Income (loss) from continuing operations $ 31.4     $ (59.3 )   $ (17.0 )   $ (115.1 )

LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES

SUMMARY OF PRODUCTION VOLUMES (1)

 

   

The following table sets forth production volumes for the quarter and nine months ended September 30, 2012 and 2011.

 

Quarter Ended

Nine Months Ended

September 30,   September 30,
2012   2011 2012   2011
Oriented strand board, million square feet 3/8" basis(1) 903 804 2,625 2,375
Oriented strand board, million square feet 3/8" basis (produced by wood-based siding mills) 51 53 146 140
Wood-based siding, million square feet 3/8" basis 229 192 704 613
Engineered I-Joist, million lineal feet(1) 18 15 50 43
Laminated veneer lumber (LVL), thousand cubic feet(1) and laminated strand lumber (LSL), thousand cubic feet 1,752 1,640 5,163 4,995

(1) Includes volumes produced by joint venture operations or under sales arrangements and sold to LP.



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