What changed in this filing

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Item 1. Financial Statements

2023-11-01 compared with 2023-08-02 · 120 added, 99 removed, 459 unchanged (32% of the section changed)

2 unchanged sentences

Dollar and share amounts in millions, except per share amounts

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

9 unchanged sentences

Other non-operating items — ( 3 ) ( 17 ) ( 11 )

Income (loss) before income taxes ( 1 ) 463 22 1,007

Income before income taxes 160 172 183 1,178

Provision for income taxes ( 44 ) ( 44 ) ( 66 ) ( 284 )

Equity in unconsolidated affiliate 1 1 3 4

Income (loss) from continuing operations ( 21 ) 348 1 769

Income from continuing operations 118 129 119 898

Income from discontinued operations, net of income taxes — 97 — 196

Net income (loss) $ ( 21 ) $ 385 $ 1 $ 868

Net income $ 118 $ 226 $ 119 $ 1,093

Net loss attributed to non-controlling interest — — — 1

Net income (loss) attributed to LP $ ( 20 ) $ 384 $ 1 $ 868

Net income (loss) attributed to LP per share of common stock:

Income (loss) per share continuing operations - basic $ ( 0.28 ) $ 4.30 $ 0.02 $ 9.25

Net income attributed to LP $ 118 $ 226 $ 119 $ 1,094

Net income attributed to LP per share of common stock:

Income per share continuing operations - basic $ 1.63 $ 1.75 $ 1.65 $ 11.23

Income per share discontinued operations - basic — 1.32 — 2.45

Net income (loss) attributed to LP per share - basic $ ( 0.28 ) $ 4.76 $ 0.02 $ 10.43

Income (loss) per share continuing operations - diluted $ ( 0.28 ) $ 4.28 $ 0.02 $ 9.19

Net income attributed to LP per share - basic $ 1.63 $ 3.07 $ 1.65 $ 13.67

Income per share continuing operations - diluted $ 1.63 $ 1.74 $ 1.65 $ 11.16

Income per share discontinued operations - diluted — 1.31 — 2.43

Net income (loss) attributed to LP per share - diluted $ ( 0.28 ) $ 4.73 $ 0.02 $ 10.36

Average shares of common stock used to compute Net income (loss) per share:

Net income attributed to LP per share - diluted $ 1.63 $ 3.05 $ 1.65 $ 13.59

Average shares of common stock used to compute Net income per share:

Basic 72 74 72 80

3 unchanged sentences

Dollar amounts in millions

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Net income (loss) $ ( 21 ) $ 385 $ 1 $ 868

Net income $ 118 $ 226 $ 119 $ 1,093

Other comprehensive income (loss), net of tax

2 unchanged sentences

Other comprehensive income (loss), net of tax ( 19 ) ( 9 ) 2 ( 16 )

Comprehensive income (loss) ( 20 ) 354 22 861

Comprehensive income 99 216 120 1,077

Comprehensive loss associated with non-controlling interest — — — 1

Comprehensive income (loss) attributed to LP $ ( 19 ) $ 354 $ 22 $ 862

Comprehensive income attributed to LP $ 99 $ 216 $ 121 $ 1,078

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

1 unchanged sentence

Dollar amounts in millions

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Cash and cash equivalents $ 160 $ 369

Receivables, net of allowance for doubtful accounts of $ 3 million and $ 1 million as of June 30, 2023, and December 31, 2022, respectively

Receivables, net of allowance for doubtful accounts of $ 3 million and $ 1 million as of September 30, 2023, and December 31, 2022, respectively

Inventories 379 337

23 unchanged sentences

Common stock, $ 1 par value, 200,000,000 shares authorized;

87,986,865 and 72,103,762 shares issued and outstanding, respectively, as of June 30, 2023;

87,986,865 and 72,114,051 shares issued and outstanding, respectively, as of September 30, 2023;

and 87,986,865 and 71,748,200 shares issued and outstanding, respectively, as of December 31, 2022

1 unchanged sentence

Retained earnings 1,438 1,371

Treasury stock, 15,883,103 shares and 16,238,665 shares, at cost as of June 30, 2023, and December 31, 2022, respectively

Treasury stock, 15,872,814 shares and 16,238,665 shares, at cost as of September 30, 2023, and December 31, 2022, respectively

( 387 ) ( 388 )

5 unchanged sentences

Dollar amounts in millions

Six Months Ended June 30,

Nine Months Ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

13 unchanged sentences

Income taxes payable, net of receivables ( 26 ) 70

Net cash (used) provided by operating activities ( 30 ) 908

Net cash provided by operating activities 157 1,103

CASH FLOWS FROM INVESTING ACTIVITIES:

11 unchanged sentences

Other financing activities ( 10 ) ( 15 )

Net cash provided by (used in) financing activities ( 14 ) ( 626 )

Net cash used in financing activities ( 61 ) ( 968 )

EFFECT OF EXCHANGE RATE ON CASH, CASH EQUIVALENTS, AND RESTRICTED CASH ( 6 ) ( 11 )

37 unchanged sentences

88 $ 88 16 $ ( 387 ) $ 458 $ 1,337 $ ( 78 ) $ 1,419

Net income attributed to LP — — — — — 118 — 118

Dividends paid ($0.24 per share)

— — — — — ( 17 ) — ( 17 )

Issuance of shares under stock plans — — — — — — — —

Taxes paid related to net settlement of stock-based awards — — — — — — — —

Purchase of stock — — — — — — — —

Compensation expense associated with stock-based compensation — — — — 2 — — 2

Other comprehensive loss — — — — — — ( 19 ) ( 19 )

Balance, September 30, 2023

88 $ 88 16 $ ( 387 ) $ 460 $ 1,438 $ ( 98 ) $ 1,502

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

27 unchanged sentences

94 $ 94 16 $ ( 390 ) $ 457 $ 1,505 $ ( 181 ) $ 1,484

Net income attributed to LP — — — — — 226 — 226

Dividends paid ($0.22 per share)

— — — — — ( 16 ) — ( 16 )

Issuance of shares under stock plans — — — — — — — —

Taxes paid related to net settlement of stock-based awards — — — — — — — —

Purchase of stock ( 6 ) ( 6 ) — — — ( 320 ) — ( 325 )

Compensation expense associated with stock-based compensation — — — — 2 — — 2

Other comprehensive loss — — — — — — ( 9 ) ( 9 )

Balance, September 30, 2022

88 $ 88 16 $ ( 390 ) $ 459 $ 1,395 $ ( 190 ) $ 1,361

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

10 unchanged sentences

See "Note 7 –Discontinued Operations" for additional information.

In May 2023, we acquired a manufacturing facility in Wawa, Ontario from Wawa OSB, Inc.

In May 2023, we acquired a manufacturing facility in Wawa, Ontario, Canada from Wawa OSB, Inc.

a subsidiary of Forex Inc., for $ 80 million, financed by a combination of cash on hand and availability under the Amended Credit Facility (defined below).

1 unchanged sentence

We are evaluating project schedules and market demand to determine when construction will begin.

The facility will remain shut down until such time construction is completed.

The facility will remain shut down until such construction is completed.

Basis for Presentation

9 unchanged sentences

We have determined that disaggregating revenue into these categories depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors.

As noted in the segment reporting information in “Note 17 - Selected Segment Data” below, our reportable segments are Siding, Oriented Strand Board (OSB), and South America (dollar amounts in millions).

Three Months Ended June 30, 2023

As noted in the segment reporting information in “Note 17 - Selected Segment Data” below, our reportable segments are Siding, Oriented Strand Board (OSB), and South America.

The following tables set forth our revenue by segment (dollar amounts in millions).

Three Months Ended September 30, 2023

By Product type and family:

6 unchanged sentences

$ 345 $ 335 $ 45 $ 4 $ — $ 728

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

By Product type and family:

6 unchanged sentences

$ 394 $ 388 $ 53 $ 17 $ ( 1 ) $ 852

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

By Product type and family:

6 unchanged sentences

$ 996 $ 754 $ 153 $ 21 $ — $ 1,923

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

By Product type and family:

8 unchanged sentences

, purchase orders) with our customers are satisfied;

generally, this occurs with the transfer of control of our products at a point in time.

generally, this occurs with the transfer of control of our products to the customer at a point in time.

Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods.

6 unchanged sentences

Volume allowances are accrued based on management’s estimation of customer volume achievement and other factors incorporated into customer agreements, such as new product purchases, store sell-through, and merchandising support.

Management adjusts accruals when circumstances indicate (typically as a result of a change in volume expectations).

Management adjusts accruals when circumstances indicate (typically as a result of a change in sales volume expectations).

We ship some of our products to customers’ distribution centers on a consignment basis.

6 unchanged sentences

Diluted earnings per share is based upon the weighted-average number of shares of common stock outstanding, plus all potentially dilutive securities that were assumed to be converted into common shares at the beginning of the period under the treasury stock method.

This method requires that the effect of potentially dilutive common stock equivalents (stock options, stock-settled appreciation rights (SSARs), restricted stock units, and performance stock units) be excluded from the calculation of diluted earnings per share for the periods in which losses from continuing operations are reported because the effect is anti-dilutive.

This method requires that the effect of potentially dilutive common stock equivalents (stock options, stock-settled appreciation rights, restricted stock units, and performance stock units) be excluded from the calculation of diluted earnings per share for the periods in which losses from continuing operations are reported because the effect is anti-dilutive.

The following table sets forth the computation of basic and diluted earnings per share (dollar and share amounts in millions, except per share amounts):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Income (loss) from continuing operations $ ( 21 ) $ 348 $ 1 $ 769

Income from continuing operations $ 118 $ 129 $ 119 $ 898

Net loss attributed to non-controlling interest — — — 1

Income (loss) attributed to LP from continuing operations ( 20 ) 348 1 770

Income attributed to LP from continuing operations 118 129 119 898

Income from discontinued operations, net of income taxes — 97 — 196

Net income (loss) attributed to LP $ ( 20 ) $ 384 $ 1 $ 868

Net income attributed to LP $ 118 $ 226 $ 119 $ 1,094

Weighted average common shares outstanding - basic 72 74 72 80

1 unchanged sentence

Shares used for diluted earnings per share 72 74 72 80

Net income (loss) attributed to LP per share - basic:

Net income attributed to LP per share - basic:

Continuing operations $ 1.63 $ 1.75 $ 1.65 $ 11.23

Discontinued operations — 1.32 — 2.45

Net income (loss) attributed to LP per share - basic $ ( 0.28 ) $ 4.76 $ 0.02 $ 10.43

Net income (loss) attributed to LP per share - diluted:

Net income attributed to LP per share - basic $ 1.63 $ 3.07 $ 1.65 $ 13.67

Net income attributed to LP per share - diluted:

Continuing operations $ 1.63 $ 1.74 $ 1.65 $ 11.16

Discontinued operations — 1.31 — 2.43

Net income (loss) attributed to LP per share - diluted $ ( 0.28 ) $ 4.73 $ 0.02 $ 10.36

Net income attributed to LP per share - diluted $ 1.63 $ 3.05 $ 1.65 $ 13.59

FAIR VALUE MEASUREMENTS

3 unchanged sentences

(i) recurring—measured on a periodic basis, and (ii) non-recurring—measured on an as-needed basis.

The net carrying value of the 3.625 % Senior Notes due in 2029 (2029 Senior Notes) was $ 347 million and $ 346 million as of June 30, 2023 and December 31, 2022, respectively.

The fair value was estimated to be $ 307 million and $ 306 million as of June 30, 2023 and December 31, 2022, respectively, based on market quotations.

The net carrying value of the 3.625 % Senior Notes due in 2029 (2029 Senior Notes) was $ 347 million and $ 346 million as of September 30, 2023 and December 31, 2022, respectively.

The fair value of the 2029 Senior Notes was estimated to be $ 295 million and $ 306 million as of September 30, 2023 and December 31, 2022, respectively, based on market quotations.

The 2029 Senior Notes and other long-term debt are categorized as Level 1 in the U.S.

4 unchanged sentences

The Credit Agreement 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 Credit Agreement, and all loans thereunder, become due on November 29, 2028.

As of June 30, 2023, there was $ 30 million in outstanding borrowings under our Amended Credit Facility.

The carrying value of the Amended Credit Facility approximates fair value.

All loans under the Credit Agreement become due on November 29, 2028.

As of September 30, 2023, there were no outstanding borrowings under our Amended Credit Facility.

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

Receivables consisted of the following (dollar amounts in millions):

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Trade receivables $ 148 $ 106

4 unchanged sentences

Trade receivables are primarily generated by sales of our products to our wholesale and retail customers.

Other receivables as of June 30, 2023 and December 31, 2022, primarily consist of sales tax receivables, vendor rebates, and other miscellaneous receivables.

Other receivables as of September 30, 2023 and December 31, 2022, primarily consist of sales tax receivables, vendor rebates, and other miscellaneous receivables.

Inventories are valued at the lower of cost or net realizable value.

1 unchanged sentence

The major types of inventories (work in process is not material and is included in Semi-finished inventory) are as follows (dollar amounts in millions):

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Logs $ 75 $ 59

9 unchanged sentences

During the year ended December 31, 2022, the Company recorded a pre-tax gain of approximately $ 118 million within Income from discontinued operations, net of income taxes in the Condensed Consolidated Statements of Income.

Upon closing, the Company entered into the transition services agreement with the purchaser of the assets, pursuant to which the Company agreed to support the various activities of the EWP segment, which concluded during the

three months ended March 31, 2023.

Upon closing, the Company entered into a transition services agreement with the purchaser of the assets, pursuant to which the Company agreed to support the various activities of the EWP segment, which concluded during the three months ended March 31, 2023.

The Company has classified the results of its EWP segment as discontinued operations in its Condensed Consolidated Statements of Income for the prior period presented.

The following table presents the financial results of the EWP segment for the three and six months ended June 30, 2022 (dollar amounts in millions):

Three Months Ended June 30, Six Months Ended June 30,

The following table presents the financial results of the EWP segment for the three and nine months ended September 30, 2022 (dollar amounts in millions):

Three Months Ended September 30, Nine Months Ended September 30,

Net sales $ 67 $ 455

7 unchanged sentences

Income from discontinued operations, net of income taxes $ 97 $ 196

The following summarizes the total cash provided by operations and total cash provided by investing activities related to the EWP segment and included in the Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2022 (dollar amounts in millions):

The following summarizes the total cash provided by operations and total cash provided by investing activities related to the EWP segment and included in the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 (dollar amounts in millions):

Net cash provided by discontinued operating activities $ 18

Net cash provided by (used in) discontinued investing activities $ 56

Net cash provided by discontinued investing activities for the six months ended June 30, 2022, includes $ 59 million of proceeds from the sale of our 50 % equity interest in two joint ventures that produce I-joists .

Net cash provided by discontinued investing activities $ 258

Net cash provided by discontinued investing activities for the nine months ended September 30, 2022, includes $ 59 million of proceeds from the sale of our 50 % equity interest in two joint ventures that produce I-joists and $ 202 million of net proceeds from the sale of the EWP segment assets.

BUSINESS EXIT CHARGES

During the second quarter of 2023, we ceased the manufacturing operations of Entekra Holdings, LLC (Entekra), an off-site framing operation previously reported within our “Other” category, which comprises other products that are not individually significant.

Business exit charges were $ 34 million, which include the following for the three months ended June 30, 2023 (dollar amounts in millions):

Three Months Ended June 30,

Business exit charges were $ 1 million and $ 35 million for the three and nine months ended September 30, 2023, respectively, which consist of the following (dollar amounts in millions):

Three Months Ended September 30, Nine Months Ended September 30,

Impairment of property, plant and equipment, operating lease assets, and other intangible assets 1

Restructuring and other related charges:

Inventory write-down 2

6 unchanged sentences

The Company’s annual assessment date is October 1.

During the three months ended June 30, 2023, we recorded impairment charges of $ 9 million related to developed technology and trademarks related to Entekra, which is discussed further in “Note 8 - Business Exit Charges.”

Changes in goodwill and other intangible assets for the six months ended June 30, 2023, are provided in the following table (dollar amounts in millions):

During the nine months ended September 30, 2023, we recorded impairment charges of $9 million related to developed technology and trademarks related to Entekra, which is discussed further in “Note 8 - Business Exit Charges.”

Changes in goodwill and other intangible assets for the nine months ended September 30, 2023 are provided in the following table (dollar amounts in millions):

Timber Licenses 1

4 unchanged sentences

Amortization ( 2 ) — ( 1 ) —

Ending balance June 30, 2023

Ending balance September 30, 2023

$ 25 $ 19 $ 7 $ —

3 unchanged sentences

Changes in profitability estimates in various jurisdictions will impact our quarterly effective income tax rates.

The tax provision for income taxes from continuing operations for the six months ended June 30, 2023 and 2022, reflected an estimated annual effective tax rate of 34 % and 25 %, respectively, excluding discrete items discussed below.

The total tax provision for the three and six months ended June 30, 2023 was $ 21 million and $ 22 million, compared to $ 116 million and $ 240 million for the comparable periods in 2022, respectively.

The total effective tax rate for continuing operations for the six months ended June 30, 2023 was 95 %, compared to 24 % for the comparable period in 2022.

The total tax provision as a percentage of income from continuing operations is significantly higher for the six months ended June 30, 2023 when compared to same period in 2022.

This is primarily a result of a discrete tax expense of $ 22 million being recorded in the quarter ended June 30, 2023 relating to the change in indefinite reinvestment assertion on Chile and Brazil earnings described in “Item 2 - Management's Discussion and Analysis of Financial Conditions and Results of Operation”.

We recognized net discrete tax expense of $ 15 million and discrete tax benefits of $ 9 million in the six months ended June 30, 2023 and 2022, respectively.

The net discrete tax expense in the current year relates primarily to the second quarter change in management’s indefinite reinvestment assertion on Chile and Brazil earnings described in “Item 2 - Management's Discussion and Analysis of Financial Conditions and Results of Operation” of this quarterly report on Form 10-Q, while the net discrete tax benefit in the prior year primarily relates to excess tax benefits from stock-based compensation.

The tax provision for income taxes from continuing operations for the nine months ended September 30, 2023 and 2022, reflected an estimated annual effective tax rate of 27 % and 25 %, respectively, excluding discrete items discussed below.

The total effective tax rate for continuing operations for the three and nine months ended September 30, 2023 was 27 % and 36 %, respectively, compared to 26 % and 24 %, respectively, for the comparable period in 2022.

We recognized net discrete tax expense of $ 16 million and net discrete tax benefits of $ 9 million in the nine months ended September 30, 2023 and 2022, respectively.

The net discrete tax expense in the current year relates primarily to a $ 22 million expense related to the second quarter change in management’s indefinite reinvestment assertion on Chile and Brazil earnings described in “Item 2 - Management's Discussion and Analysis of Financial Conditions and Results of Operation” of this quarterly report on Form 10-Q, while the net discrete tax benefit in the prior year primarily relates to excess tax benefits from stock-based compensation.

COMMITMENTS AND CONTINGENCIES

We maintain reserves for various contingent liabilities as follows (dollar amounts in millions):

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Environmental reserves $ 26 $ 27

5 unchanged sentences

Due to the numerous uncertainties and variables associated with these assumptions and judgments, both the precision and reliability of the resulting estimates of the related contingencies are subject to substantial uncertainties.

We regularly monitor our estimated exposure to contingencies and, as additional information becomes known, may change our estimates significantly.

While no estimate of the range of any such change can be made at this time, the amount that we may

ultimately pay in connection with these matters could materially exceed, in either the near term or the longer term, the amounts accrued to date.

We regularly monitor our

estimated exposure to contingencies and, as additional information becomes known, may change our estimates significantly.

While no estimate of the range of any such change can be made at this time, the amount that we may ultimately pay in connection with these matters could materially exceed, in either the near term or the longer term, the amounts accrued to date.

Our estimates of our loss contingencies do not reflect potential future recoveries from insurance carriers except to the extent that recovery may, from time to time, be deemed probable as a result of an insurer’s agreement to payment terms.

2 unchanged sentences

This reserve is primarily for estimated future costs of remediation of hazardous or toxic substances at numerous sites currently or previously owned by the Company.

Our estimates of our environmental loss contingencies are based on various assumptions and judgments, the specific nature of which varies considering the particular facts and circumstances surrounding each environmental loss contingency.

Our estimates of our environmental loss contingencies are based on various assumptions and judgments, the specific nature of which varies based on the particular facts and circumstances surrounding each environmental loss contingency.

These estimates typically reflect assumptions and judgments as to the probable nature, magnitude, and timing of the required investigation, remediation, and/or monitoring activities and the probable cost of these activities, and in some cases, reflect assumptions and judgments as to the obligation or willingness and ability of third parties to bear a proportionate or allocated share of the cost of these activities.

2 unchanged sentences

Other Proceedings

From time to time, we and our subsidiaries are parties to certain legal proceedings.

During the second quarter of 2023, we agreed to pay $ 16 million to resolve certain patent-related claims and to obtain certain patent rights, which is recorded within Other operating credits and charges.

From time to time, we and our subsidiaries are parties to certain legal proceedings arising in our ordinary course of business.

As of September 30, 2023, $ 12 million of the settlement amount is outstanding and is included Accounts payable and accrued liabilities in the Condensed Consolidated Balance Sheets.

Based on the information currently available, management believes the resolution of such ongoing and future proceedings will not have a material effect on our financial position, results of operations, cash flows, or liquidity.

2 unchanged sentences

If demand and pricing for our products fall to levels significantly below cycle average demand and pricing, should we decide to invest capital in alternative projects, or should changes occur related to our wood supply for our mills, it is possible that future impairment charges will be required.

As of June 30, 2023, there were no indications of impairment.

As of September 30, 2023, there were no indications of impairment.

We also review from time to time potential 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.

During the three months ended June 30, 2023, we recorded impairment charges of $ 12 million and $ 3 million related to property, plant, and equipment and operating lease assets related to Entekra which were written down to fair value based on Level 2 inputs under ASC 820 using quoted market prices.

See further discussion in “Note 8 - Business Exit Charges.” As of June 30, 2023, there were no other indications of impairment.

During the nine months ended September 30, 2023, we recorded impairment charges of $ 13 million and $ 3 million related to property, plant, and equipment and operating lease assets, respectively, related to Entekra which were written down to fair value based on Level 2 inputs under Accounting Standards Codification 820, Fair Value Measurement (ASC 820), using quoted market prices.

See further discussion in “Note 8 - Business Exit Charges.” As of September 30, 2023, there were no other indications of impairment.

PRODUCT WARRANTIES

1 unchanged sentence

Such accruals are based upon historical experience and management’s estimate of the level of future claims.

The activity in warranty reserves for the three and six months ended June 30, 2023 and 2022, is summarized in the following table (dollar amounts in millions):

Three Months Ended June 30, Six Months Ended June 30,

The activity in warranty reserves for the three and nine months ended September 30, 2023 and 2022, is summarized in the following table (dollar amounts in millions):

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

1 unchanged sentence

Accrued to expense — 1 2 3

Credited to other operating credits and charges ( 1 ) — ( 1 ) —

Payments made — ( 1 ) ( 1 ) ( 2 )

2 unchanged sentences

Long-term portion of warranty reserves (included in Other long-term liabilities) $ 6 $ 6 $ 6 $ 6

We continue to monitor warranty and other claims associated with our products and believe, as of June 30, 2023, that the warranty reserve balances associated with these matters are adequate to cover future warranty payments.

We continue to monitor warranty and other claims associated with our products and believe, as of September 30, 2023, that the warranty reserve balances associated with these matters are adequate to cover future warranty payments.

However, it is possible that additional changes may be required in the future.

DEFINED BENEFIT PENSION PLANS

The following table summarizes our net periodic pension cost for our defined benefit pension and postretirement plans during the three and six months ended June 30, 2023 and 2022 (dollar amounts in millions):

Three Months Ended June 30, Six Months Ended June 30,

The following table summarizes our net periodic pension cost for our defined benefit pension and postretirement plans during the three and nine months ended September 30, 2023 and 2022 (dollar amounts in millions):

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

14 unchanged sentences

During the three months ended March 31, 2023, the Company completed the termination of the Plan resulting in the recognition of non-cash, pre-tax charges of $ 6 million from Accumulated comprehensive loss to Other non-operating items in our Condensed Consolidated Statements of Income.

Liquidation of remaining Plan assets in surplus of the defined benefit pension obligation will be made once the Plan satisfies all regulatory requirements, which is expected to be completed during 2023.

The changes recognized in Other comprehensive loss were as follows (dollar amounts in millions):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

3 unchanged sentences

ACCUMULATED COMPREHENSIVE LOSS

Accumulated comprehensive loss is provided in the following table for the three months ended June 30, 2023, and 2022 (dollar amounts in millions):

Accumulated comprehensive loss is provided in the following table for the three months ended September 30, 2023, and 2022 (dollar amounts in millions):

Pension Translation Adjustments Other Total

Balance at March 31, 2023

Balance at June 30, 2023

$ — $ ( 78 ) $ — $ ( 78 )

1 unchanged sentence

Translation adjustments — ( 19 ) — ( 19 )

Balance at June 30, 2023

Balance at September 30, 2023

$ — $ ( 97 ) $ — $ ( 98 )

Pension Translation Adjustments Other Total

Balance at March 31, 2022

Balance at June 30, 2022

$ ( 74 ) $ ( 105 ) $ ( 1 ) $ ( 181 )

1 unchanged sentence

Translation adjustments — ( 13 ) — ( 13 )

Balance at June 30, 2022

Balance at September 30, 2022

$ ( 71 ) $ ( 118 ) $ ( 1 ) $ ( 190 )

1 unchanged sentence

See “Note 14 - Defined Benefit Pension Plans” above for additional details.

Accumulated comprehensive loss is provided in the following table for the six months ended June 30, 2023 and 2022 (dollar amounts in millions):

Accumulated comprehensive loss is provided in the following table for the nine months ended September 30, 2023 and 2022 (dollar amounts in millions):

Pension Translation Adjustments Other Total

3 unchanged sentences

Translation adjustments — ( 3 ) — ( 3 )

Balance at June 30, 2023

Balance at September 30, 2023

$ — $ ( 97 ) $ — $ ( 98 )

4 unchanged sentences

Translation adjustments — ( 22 ) — ( 22 )

Balance at June 30, 2022

Balance at September 30, 2022

$ ( 71 ) $ ( 118 ) $ ( 1 ) $ ( 190 )

4 unchanged sentences

Other operating credits and charges, net, is comprised of the following components (dollar amounts in millions):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

3 unchanged sentences

Environmental costs — — — ( 2 )

Gain on asset sales 6 — 6 —

Other 1 9 ( 1 ) 9

2 unchanged sentences

Other non-operating items is comprised of the following components (dollar amounts in millions):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

11 unchanged sentences

Accordingly, our chief operating decision maker evaluates performance and allocates resources based primarily on Net sales and segment Adjusted EBITDA for our business segments.

Segment Adjusted EBITDA is defined as Income (loss) attributed to LP from continuing operations before interest expense, provision for income taxes, depreciation and amortization, and excludes stock-based compensation expense, loss on impairment attributed to LP, business exit charges, 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.

During the three months ended June 30, 2023, we updated our definition of Adjusted EBITDA to exclude other business exit charges not classified as exit operations.

The Company's chief operating decision maker is the Chief Executive Officer.

Segment Adjusted EBITDA is defined as Income attributed to LP from continuing operations before interest expense, provision for income taxes, depreciation and amortization, and excludes stock-based compensation expense, loss on impairment attributed to LP, business exit charges, 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.

During the nine months ended September 30, 2023, we updated our definition of Adjusted EBITDA to exclude other business exit charges not classified as exit operations.

Business exit charges consist of inventory and other asset impairment and exit charges related to the exit of businesses not individually significant.

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Information about our business segments is as follows (dollar amounts in millions):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

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NET INCOME TO ADJUSTED EBITDA

Net income (loss) $ ( 21 ) $ 385 $ 1 $ 868

Net income $ 118 $ 226 $ 119 $ 1,093

Add (deduct):

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Income from discontinued operations, net of income taxes — ( 97 ) — ( 196 )

Income (loss) attributed to LP from continuing operations ( 20 ) 348 1 770

Income attributed to LP from continuing operations 118 129 119 898

Provision for income taxes 44 44 66 284

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Stock-based compensation expense 2 2 9 15

Loss on impairment attributed to LP 1 — 1 —

Other operating credits and charges, net ( 7 ) ( 7 ) 16 ( 17 )

13 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements