LOUISIANA-PACIFIC CORP 10-Q

ITEM 1. FINANCIAL STATEMENTS Condensed Consolidated Statements of Income Amounts in millions, except per share amounts (Unaudited) Three Months Ended March 31, 2024 2023 Net sales $ 724 $ 584 Cost of sales ( 511 ) ( 483 ) Gross profit 214 101 Selling, general, and administrative expenses ( 69 ) ( 66 ) Other operating credits and charges, net 1 ( 5 ) Income from operations 145 30 Interest expense ( 4 ) ( 3 ) Investment income 6 5 Other non-operating income (expense) 1 ( 8 ) Income before income taxes 148 23 Provision for income taxes ( 41 ) ( 1 ) Equity in unconsolidated affiliate 1 — Net income $ 108 $ 22 Net income attributed to non-controlling interest — ( 1 ) Net income attributed to LP $ 108 $ 21 Net income attributed to LP per share of common stock: Basic $ 1.49 $ 0.29 Diluted $ 1.48 $ 0.29 Average shares of common stock used to compute Net income per share: Basic 72 72 Diluted 72 72 The accompanying Notes are an integral part of these unaudited Condensed Consolidated Financial Statements. 4 Condensed Consolidated Statements of Comprehensive Income Amounts in millions (Unaudited) Three Months Ended March 31, 2024 2023 Net income $ 108 $ 22 Other comprehensive income (loss), net of tax Foreign currency translation adjustments ( 15 ) 15 Other — 4 Other comprehensive income (loss), net of tax ( 15 ) 19 Comprehensive income 93 42 Comprehensive income associated with non-controlling interest — ( 1 ) Comprehensive income attributed to LP $ 93 $ 41 The accompanying Notes are an integral part of these unaudited Condensed Consolidated Financial Statements. 5 Condensed Consolidated Balance Sheets Amounts in millions, except per share amounts (Unaudited) March 31, 2024 December 31, 2023 ASSETS Cash and cash equivalents $ 244 $ 222 Receivables, net of allowance for doubtful accounts of $ 2 as of March 31, 2024 and December 31, 2023. 180 155 Inventories 398 378 Prepaid expenses and other current assets 19 23 Total current assets 842 778 Property, plant, and equipment, net 1,533 1,540 Timber and timberlands 31 32 Operating lease assets, net 24 25 Goodwill and other intangible assets 27 27 Investments in and advances to affiliates 6 5 Other assets 20 20 Deferred tax asset 5 11 Total assets $ 2,487 $ 2,437 LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable and accrued liabilities $ 242 $ 254 Income taxes payable 11 5 Total current liabilities 254 259 Long-term debt 347 347 Deferred income taxes 162 162 Non-current operating lease liabilities 24 25 Contingency reserves, excluding current portion 25 25 Other long-term liabilities 57 61 Total liabilities $ 869 $ 880 Stockholders’ equity: Common stock, $ 1 par value, 200 shares authorized; 88 and 72 shares issued and outstanding, respectively, as of March 31, 2024 and December 31, 2023 88 88 Additional paid-in capital 465 465 Retained earnings 1,555 1,479 Treasury stock, 16 shares at cost as of March 31, 2024 and December 31, 2023 ( 386 ) ( 386 ) Accumulated comprehensive loss ( 104 ) ( 89 ) Total stockholders’ equity 1,617 1,557 Total liabilities and stockholders’ equity $ 2,487 $ 2,437 The accompanying Notes are an integral part of these unaudited Condensed Consolidated Financial Statements. 6 Condensed Consolidated Statements of Cash Flows Amounts in millions (Unaudited) Three Months Ended March 31, 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 108 $ 22 Adjustments to net income: Depreciation and amortization 31 28 Pension loss due to settlement — 6 Deferred taxes 9 ( 2 ) Foreign currency remeasurement and transaction gains (1) — Other adjustments, net 5 9 Changes in assets and liabilities (net of acquisitions and divestitures): Receivables ( 47 ) ( 8 ) Inventories ( 23 ) ( 76 ) Prepaid expenses and other current assets 1 ( 2 ) Accounts payable and accrued liabilities — ( 66 ) Income taxes payable, net of receivables 22 ( 30 ) Net cash provided by (used in) operating activities 105 ( 119 ) CASH FLOWS FROM INVESTING ACTIVITIES: Property, plant, and equipment additions ( 41 ) ( 114 ) Proceeds from sales of assets — 1 Net cash used in investing activities ( 41 ) ( 113 ) CASH FLOWS FROM FINANCING ACTIVITIES: Payment of cash dividends ( 19 ) ( 17 ) Repurchase of common stock ( 13 ) — Other financing activities ( 6 ) ( 10 ) Net cash used in financing activities ( 39 ) ( 27 ) EFFECT OF EXCHANGE RATE ON CASH, CASH EQUIVALENTS, AND RESTRICTED CASH ( 3 ) 3 Net increase (decrease) in cash, cash equivalents, and restricted cash 22 ( 257 ) Cash, cash equivalents, and restricted cash at beginning of period 222 383 Cash, cash equivalents, and restricted cash at end of period $ 244 $ 126 Supplemental cash flow information: Cash paid for income taxes, net $ 10 $ 33 Cash paid for interest, net $ 7 $ 7 Unpaid capital expenditures $ 7 $ 28 The accompanying Notes are an integral part of these unaudited Condensed Consolidated Financial Statements. 7 Condensed Consolidated Statements of Stockholders’ Equity Amounts in millions, except per share amounts (Unaudited) Common Stock Treasury Stock Additional Paid-in Capital Retained Earnings Accumulated Comprehensive Loss Total Stockholders' Equity Shares Amount Shares Amount Balance, December 31, 2023 88 $ 88 16 $ ( 386 ) $ 465 $ 1,479 $ ( 89 ) $ 1,557 Net income attributed to LP — — — — — 108 — 108 Dividends paid ($ 0.26 per share) — — — — — ( 19 ) — ( 19 ) Issuance of shares under stock plans — — — 6 ( 6 ) — — — Taxes paid related to net settlement of stock-based awards — — — ( 6 ) — — — ( 6 ) Purchase of stock — — — — — ( 13 ) — ( 13 ) Compensation expense associated with stock-based compensation — — — — 6 — — 6 Other comprehensive income — — — — — — ( 15 ) ( 15 ) Balance, March 31, 2024 88 $ 88 16 $ ( 386 ) $ 465 $ 1,555 $ ( 104 ) $ 1,617 Common Stock Treasury Stock Additional Paid-in Capital Retained Earnings Accumulated Comprehensive Loss Total Stockholders' Equity Shares Amount Shares Amount Balance, December 31, 2022 88 $ 88 16 $ ( 388 ) $ 462 $ 1,371 $ ( 99 ) $ 1,433 Net income attributed to LP — — — — — 21 — 21 Dividends paid ($ 0.24 per share) — — — — — ( 17 ) — ( 17 ) Issuance of shares under stock plans — — — 10 ( 10 ) — — — Taxes paid related to net settlement of stock-based awards — — — ( 10 ) — — — ( 10 ) Compensation expense associated with stock-based compensation — — — — 4 — — 4 Other comprehensive income — — — — — — 19 19 Balance, March 31, 2023 88 $ 88 16 $ ( 388 ) $ 455 $ 1,375 $ ( 80 ) $ 1,450 The accompanying Notes are an integral part of these unaudited Condensed Consolidated Financial Statements. 8 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1. NATURE OF OPERATIONS AND BASIS FOR PRESENTATION Nature of Operations Louisiana-Pacific Corporation and our subsidiaries are a leading provider of high-performance building solutions that meet the demands of builders, remodelers, and homeowners worldwide. Serving the new home construction, repair and remodeling, and outdoor structures markets, we have leveraged our expertise to become an industry leader known for innovation, quality, reliability, and sustainability. The principal customers for our building solutions are retailers, wholesalers, and home building and industrial businesses in North America and South America, and we make limited sales to customers in Asia, Australia, and Europe. The Company operates 22 plants across the U.S., Canada, Chile, and Brazil, in certain cases, through foreign subsidiaries, an d operates additional facilities through a joint venture. References to "LP," the "Company," "we," "our," and "us" refer to Louisiana-Pacific Corporation and its consolidated subsidiaries as a whole. See "Note 14 - Selected Segment Data" below for further information regarding our products and segments. Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information. Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete consolidated financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and are of a normal and recurring nature. These Condensed Consolidated Financial Statements and related Notes should be read in conjunction with our annual report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 14, 2024 (2023 Annual Report on Form 10-K). Results of operations for interim periods are not necessarily indicative of results to be expected for an entire year. The Condensed Consolidated Financial Statements include the accounts of LP and our controlled subsidiaries. All intercompany transactions, profits, and balances have been eliminated. All dollar amounts included in tables in the Notes are in millions except per share amounts. NOTE 2. REVENUE We disaggregate revenue from contracts with customers into major product lines. 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. 9 As noted in the segment reporting information in “Note 14 - Selected Segment Data” below, our reportable segments are Siding, Oriented Strand Board (OSB), and LP South America (LPSA). The following tables present our reportable segment revenues, disaggregated by revenue source (dollar amounts in millions): Three Months Ended March 31, 2024 By product type and family: Siding OSB LPSA Other Total Value-add Siding Solutions $ 359 $ — $ 7 $ — $ 366 OSB - Structural Solutions — 174 38 — 213 359 174 46 — 579 Commodity OSB - commodity — 134 — — 134 Other Other products 2 5 2 3 12 $ 361 $ 313 $ 47 $ 3 $ 724 Three Months Ended March 31, 2023 By product type and family: Siding OSB LPSA Other Total Value-add Siding Solutions $ 329 $ — $ 8 $ — $ 337 OSB - Structural Solutions — 104 46 — 150 329 104 54 — 487 Commodity OSB - commodity — 83 — — 83 Other Other products 2 2 1 8 14 $ 331 $ 189 $ 55 $ 8 $ 584 Revenue is recognized when obligations under the terms of a contract (e.g. , purchase orders) with our customers are satisfied; generally, this occurs with the transfer of control of our products at a point in time. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods. The shipping cost incurred by us to deliver products to our customers is recorded in cost of sales. The expected costs associated with our warranties continue to be recognized as an expense when the products are sold. Our businesses routinely incur customer program costs to obtain favorable product placement, promote sales of products, and maintain competitive pricing. Customer program costs and incentives, including rebates and promotion and volume allowances, are accounted for as a reduction in net sales at the time the program is initiated and/or the revenue is recognized. The costs include, but are not limited to, volume allowances and rebates, promotional allowances, and cooperative advertising programs. These costs are recorded at the later of (i) the time of sale or (ii) the implementation of the program based on management’s best estimates. Estimates are based on historical and projected experience for each type of program or customer. Volume allowances are accrued based on our estimates of customer volume achievement and other factors incorporated into customer agreements, such as new product purchases, store sell-through, merchandising support, and customer training. Management adjusts accruals when circumstances indicate (typically as a result of a change in volume expectations). We ship some of our products to customers’ distribution centers on a consignment basis. We retain title to our products stored at the distribution centers. As our products are removed from the distribution centers by retailers and 10 shipped to retailers’ stores, title passes from us to the retailers. At that time, we invoice the retailers and recognize revenue for these consignment transactions. We do not offer a right of return for products shipped to the retailers’ stores from the distribution centers. NOTE 3. EARNINGS PER SHARE Basic earnings per share is based on the weighted-average number of shares of common stock outstanding. 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, restricted stock units, and performance stock units) be excluded from the calculation of diluted earnings per share for the periods in which losses 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 March 31, 2024 2023 Net income attributed to LP $ 108 $ 21 Weighted average common shares outstanding - basic 72 72 Dilutive effect of employee stock plans — — Shares used for diluted earnings per share 72 72 Earnings per share: Basic $ 1.49 $ 0.29 Diluted $ 1.48 $ 0.29 NOTE 4. FAIR VALUE MEASUREMENTS Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. We are required to classify these financial assets and liabilities into two groups: (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 as of March 31, 2024 and December 31, 2023. Based on market quotations, the fair value of the 2029 Senior Notes was estimated to be $ 319 million and $ 314 million as of March 31, 2024 and December 31, 2023, respectively. The 2029 Senior Notes and other long-term debt are categorized as Level 1 in the U.S. GAAP fair value hierarchy. Fair values are based on trading activity among the Company’s lenders and the average bid and ask price is determined using published rates. In November 2022, LP entered into a Second Amended and Restated Credit Agreement with American AgCredit, PCA, as administrative agent and sole lead arranger, and CoBank, ACB, as letter of credit issuer (the Credit Agreement), relating to its revolving credit facility (as amended, the Amended Credit Facility). 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. All loans under the Credit Agreement become due on November 29, 2028. As of March 31, 2024, 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. 11 NOTE 5. RECEIVABLES Receivables consisted of the following (dollar amounts in millions): March 31, 2024 December 31, 2023 Trade receivables $ 148 $ 104 Other receivables 26 26 Income tax receivable 8 27 Allowance for doubtful accounts ( 2 ) ( 2 ) Total Receivables $ 180 $ 155 Trade receivables are primarily generated by sales of our products to our wholesale and retail customers. Other receivables as of March 31, 2024 and December 31, 2023 primarily consist of sales tax receivables, vendor rebates, and other miscellaneous receivables. NOTE 6. INVENTORIES Inventories are valued at the lower of cost or net realizable value. Inventory cost includes materials, labor, and operating overhead. 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): March 31, 2024 December 31, 2023 Logs $ 97 $ 81 Other raw materials 46 53 Semi-finished inventories 27 27 Finished products 228 217 Total Inventories $ 398 $ 378 NOTE 7. GOODWILL AND OTHER INTANGIBLES Goodwill and indefinite-lived intangible assets are not amortized and are subject to assessment for impairment by applying a fair value-based test on an annual basis, or more frequently if circumstances indicate a potential impairment. The Company’s annual assessment date is October 1. Changes in goodwill and other intangible assets for the three months ended March 31, 2024 are provided in the following table (dollar amounts in millions): Timber Licenses 1 Goodwill Developed Technology Beginning balance December 31, 2023 $ 25 $ 19 $ 7 Amortization ( 1 ) — — Ending balance March 31, 2024 $ 24 $ 19 $ 7 1 Timber licenses are included in Timber and timberlands on the Condensed Consolidated Balance Sheets. NOTE 8. INCOME TAXES For interim periods, we recognize income tax expense by applying the estimated annual effective income tax rate to year-to-date results unless this method does not result in a reliable estimate of year-to-date income tax expense. Each period, the income tax accrual is adjusted to the latest estimate, and the difference from the previously accrued year-to-date balance is adjusted in the current quarter. Changes in profitability estimates in various jurisdictions will impact our quarterly effective income tax rates. 12 The provision for income taxes for the three months ended March 31, 2024 and 2023 reflected an estimated annual effective tax rate of 25 % and 28 % , respectively, excluding discrete items discussed below. The total effective tax rate for the three months ended March 31, 2024 was 28 % , compared to 5 % for the comparable period in 2023. We recognized a net discrete tax expense of $ 4 million and a net discrete tax benefit of $ 5 million in the three months ended March 31, 2024 and 2023, respectively. The net discrete tax expense and benefit primarily relates to an excess tax benefit from stock-based compensation and inflationary tax adjustments in certain South American entities. In 2021 the Organization for Economic Cooperation and Development announced an Inclusive Framework on Base Erosion and Profit Shifting including Pillar Two Model Rules defining the global minimum tax, which calls for the taxation of large multinational corporations at a minimum rate of 15%. As of March 31, 2024 none of the jurisdictions in which LP operates has enacted Pillar Two legislation and one jurisdiction has issued proposed legislation. We are continuing to evaluate the impact of proposed legislative changes as new guidance becomes available. If proposed Pillar Two model rules are enacted, they are not expected to have a material impact on our 2024 financial statements. NOTE 9. COMMITMENTS AND CONTINGENCIES We maintain reserves for various contingent liabilities as follows (dollar amounts in millions): March 31, 2024 December 31, 2023 Environmental reserves $ 26 $ 26 Other reserves — — Total contingencies 26 26 Current portion (included in Accounts payable and accrued liabilities) ( 1 ) ( 1 ) Long-term portion $ 25 $ 25 Estimates of our loss contingencies are based on various assumptions and judgments. 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. 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. Environmental Matters We maintain a reserve for undiscounted estimated environmental loss contingencies. 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 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. Due to the numerous uncertainties and variables associated with these assumptions and judgments, and the effects of changes in governmental regulation and environmental technologies, 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 environmental loss contingencies and, as additional information becomes known, may change our estimates significantly. 13 Other Proceedings From time to time, we and our subsidiaries are parties to certain legal proceedings arising in our ordinary course of business. 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. NOTE 10. IMPAIRMENT OF LONG-LIVED ASSETS We review the carrying values of our long-lived assets for potential impairments and believe we have adequate support for such carrying values. 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 March 31, 2024, 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. NOTE 11. PRODUCT WARRANTIES We offer warranties on the sale of most of our products and record an accrual for estimated future claims. 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 months ended March 31, 2024 and 2023, is summarized in the following table (dollar amounts in millions): Three Months Ended March 31, 2024 2023 Beginning balance $ 8 $ 8 Accrued to expense 1 1 Payments made — — Total warranty reserves 8 8 Current portion of warranty reserves (included in Accounts payable and accrued liabilities) ( 2 ) ( 2 ) Long-term portion of warranty reserves (included in Other long-term liabilities) $ 6 $ 7 We continue to monitor warranty and other claims associated with our products and believe, as of March 31, 2024, 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. 14 NOTE 12. ACCUMULATED COMPREHENSIVE LOSS Accumulated comprehensive loss is provided in the following table for the three months ended March 31, 2024 and 2023 (dollar amounts in millions): Translation Adjustments Other Total Balance at December 31, 2023 $ ( 89 ) $ ( 1 ) $ ( 89 ) Translation adjustments ( 15 ) — ( 15 ) Balance at March 31, 2024 $ ( 104 ) $ — $ ( 104 ) Translation Adjustments Other Total Balance at December 31, 2022 $ ( 94 ) $ ( 5 ) $ ( 99 ) Reclassified to income statement, net of taxes 1 — 4 4 Translation adjustments 15 — 15 Balance at March 31, 2023 $ ( 79 ) $ ( 1 ) $ ( 80 ) 1 Amounts of actuarial loss and prior service cost are components of net periodic benefit cost. NOTE 13. OTHER OPERATING AND NON-OPERATING ITEMS Other operating credits and charges, net Other operating credits and charges, net, is comprised of the following components (dollar amounts in millions): Three Months Ended March 31, 2024 2023 Reorganization charges ( 2 ) ( 2 ) Other 3 ( 3 ) Other operating credits and charges, net $ 1 $ ( 5 ) Other non-operating items Other non-operating items is comprised of the following components (dollar amounts in millions): Three Months Ended March 31, 2024 2023 Pension settlement charges $ — $ ( 6 ) Foreign currency gain (loss) 1 ( 3 ) Other — 1 Other non-operating items $ 1 $ ( 8 ) 15 NOTE 14. SELECTED SEGMENT DATA We operate in three segments: Siding, OSB, and LPSA. Our business units have been aggregated into these three segments based upon the similarity of economic characteristics, customers, and distribution methods. Our 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. • Our Siding segment serves diverse end markets with a broad product offering, 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). Our Siding Solutions products consist of a full line of engineered wood siding, trim, soffit, and fascia. • Our OSB segment manufactures and distributes OSB structural panel products, including the innovative value-added OSB product portfolio known as LP ® Structural Solutions (which includes LP TechShield ® Radiant Barrier, LP WeatherLogic ® Air & Water Barrier, LP Legacy ® Premium Sub-Flooring, LP NovaCore ® Thermal Insulated Sheathing, LP FlameBlock ® Fire-Rated Sheathing, and LP TopNotch ® 350 Durable Sub-Flooring). OSB is manufactured using wood strands arranged in layers and bonded with resins. • Our LPSA segment manufactures and distributes LP OSB structural panel and Siding Solutions products in South America and certain export markets. This segment also sells and distributes a variety of companion products to support the region’s transition to wood frame construction. The LPSA segment carries out manufacturing operations in Chile and Brazil and operates sales offices in Argentina, Brazil, Chile, Colombia, Mexico, Paraguay, and Peru. We evaluate the performance of our business segments based on net sales and segment Adjusted EBITDA. 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 attributed to LP 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. 16 Information about our business segments is as follows (dollar amounts in millions): Three Months Ended March 31, 2024 2023 NET SALES BY BUSINESS SEGMENT Siding $ 361 $ 331 OSB 313 189 LPSA 47 55 Other 3 8 Total sales $ 724 $ 584 NET INCOME TO ADJUSTED EBITDA RECONCILIATION Net income $ 108 $ 22 Add (deduct): Net income attributed to non-controlling interest — ( 1 ) Income attributed to LP 108 21 Provision for income taxes 41 1 Depreciation and amortization 31 28 Stock-based compensation expense 6 4 Other operating credits and charges, net — 5 Business exit charges ( 1 ) — Interest expense 4 3 Investment income ( 6 ) ( 5 ) Pension settlement charges — 6 Other non-operating items ( 1 ) 3 Adjusted EBITDA $ 182 $ 66 SEGMENT ADJUSTED EBITDA Siding $ 90 $ 67 OSB 90 5 LPSA 10 12 Other ( 1 ) ( 9 ) Corporate ( 7 ) ( 9 ) Adjusted EBITDA $ 182 $ 66 NOTE 15. SUBSEQUENT EVENTS On May 3, 2022, LP's Board of Directors authorized a share repurchase program under which LP was authorized to repurchase shares of its common stock totaling up to $600 million (the 2022 Share Repurchase Program). Subsequent to March 31, 2024, through May 7, 2024, we used $37 million to repurchase 0.5 million shares of LP common stock under the 2022 Share Repurchase Program. 17