United States of America
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________
FORM 8-K
__________________________________
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: February 13, 2018
Commission File Number 1-7107
__________________________________
LOUISIANA-PACIFIC CORPORATION
(Exact name of registrant as specified in its charter)
__________________________________
DELAWARE | 1-7107 | 93-0609074 | ||
(State or other jurisdiction of incorporation or organization) | Commission File Number | (IRS Employer Identification No.) | ||
414 Union Street, Suite 2000, Nashville, TN 37219
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (615) 986-5600
__________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
å | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
å | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
å | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
å | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Item 2.02 Results of Operations and Financial Condition
The information in this item and Exhibit 99.1, Exhibit 99.2 and Exhibit 99.3, attached hereto, is being furnished to the Securities and Exchange Commission and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.
On February 13, 2018, Louisiana - Pacific Corporation issued a press release announcing financial results for the quarter and year ended December 31, 2017, a copy of which is attached hereto as Exhibit 99.1 and incorporated herein by reference.
In addition to disclosing financial results calculated in accordance with U.S. generally accepted accounting principles (“GAAP”), the attached press release discloses continuing earnings before interest expense, taxes, depreciation and amortization (“EBITDA from continuing operations”) which is a non-GAAP financial measure. Additionally, it discloses Adjusted EBITDA from continuing operations which further adjusts EBITDA from continuing operations to exclude stock based compensation expense, (gain) loss on sale or impairment of long lived assets, other operating credits and charges, early debt extinguishment and investment income. It also discloses adjusted income from continuing operations which excludes (gain) loss on sale or impairment of long-lived assets, interest outside of normal operations, other operating credits and charges, net, early debt extinguishment and adjusts for a normalized tax rate. EBITDA from continuing operations, Adjusted EBITDA from continuing operations and adjusted income from continuing operations are not a substitute for the GAAP measure of net income or operating cash flows or other GAAP measures of operating performance or liquidity. A copy of the reconciliation of EBITDA from continuing operations, Adjusted EBITDA from continuing operations and adjusted income from continuing operations for the quarter and twelve months ended December 31, 2017 and 2016 is attached hereto as Exhibit 99.2 and Exhibit 99.3 and incorporated herein by reference.
We have EBITDA from continuing operations and Adjusted EBITDA from continuing operations in the press release because we use them as important supplemental measures of our performance and believe that similarly-titled measures are frequently used by securities analysts, investors and other interested persons in the evaluation of companies in our industry, some of which present similarly-titled measures when reporting their results. We use EBITDA from continuing operations and Adjusted EBITDA from continuing operations to evaluate our performance as compared to other companies in our industry that have different financing and capital structures and/or tax rates. It should be noted that companies calculate similarly-titled measures differently and, therefore, as presented by us may not be comparable to similarly-titled measures reported by other companies. In addition, EBITDA has material limitations as a performance measure because it excludes interest expense, income tax (benefit) expense and depreciation and amortization which are necessary to operate our business or which we otherwise incurred or experienced in connection with the operation of our business.
We believe that adjusted income from continuing operations, which excludes (gain) loss on sale or impairment of long-lived assets, interest outside of normal operations, other operating credits and charges, net and early debt extinguishment, adjusted for a normalized tax rate is a useful measure for evaluating our ability to generate earnings and that providing this measure will allow investors to more readily compare the earnings referred to in the press release to our earnings for past and future periods. We believe that this measure is particularly useful where the amounts of the excluded items are not consistent between the periods presented. It should be noted that other companies may present similarly-titled measures differently and, therefore, as presented by us may not be comparable to similarly-titled measures reported by other companies. In addition, adjusted income (loss) from continuing operations has material limitations as a performance measure because it excludes items that are actually incurred or experienced in connection with the operations of our business.
Item 9.01 Financial Statements, Pro Forma Financial Statements and Exhibits.
Exhibit Number | Description |
99.1 | |
99.2 | |
99.3 | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
LOUISIANA-PACIFIC CORPORATION | ||
By: | /s/ Sallie B. Bailey | |
Sallie B. Bailey | ||
Executive Vice President and Chief | ||
Financial Officer | ||
(Principal Financial Officer) | ||
Date: February 13, 2018
LP Reports Fourth Quarter and Year End 2017 Results
Louisiana-Pacific Corporation (LP) (NYSE: LPX) reported today results for the fourth quarter and year ended December 31, 2017, which included the following:
• | Total net sales for the fourth quarter of $711 million, 29 percent higher than the year ago quarter. Total net sales for the year were $2.7 billion, 22 percent higher than the previous year. |
• | Income from continuing operations for the fourth quarter was $131 million ($0.89 per diluted share) and income of $391 million ($2.67 per diluted share) for the year. |
• | Non-GAAP adjusted income from continuing operations was $107 million ($0.73 per diluted share) for the fourth quarter and income of $341 million ($2.33 per diluted share) for the year. |
• | Adjusted EBITDA from continuing operations for the fourth quarter was $199 million compared to $85 million in the fourth quarter of 2016. For the year, Adjusted EBITDA from continuing operations was $667 million compared to $346 million the previous year. |
“2017 was a strong year for LP, with double-digit growth across all of our business segments," said Brad Southern, LP Chief Executive Officer. "Our consistent performance enabled investment in growth initiatives, including $150 million into our existing plants and new capacity, and the reinstatement of our quarterly dividend. We finished the year with a robust balance sheet and made continued progress on our goal of transforming LP into a leading building solutions company. We enter 2018 with strong momentum, and stand well-positioned to drive shareholder value.”
FOURTH QUARTER RESULTS
For the quarter ended December 31, 2017, LP reported net sales of $711 million, up from $550 million in the fourth quarter of 2016. For the fourth quarter, the company reported operating income of $155 million as compared to income of $56 million in 2016. For the fourth quarter of 2017, LP reported income from continuing operations of $131 million, or $0.89 per diluted share, compared to $43 million, or $0.29 per diluted share, for the fourth quarter of 2016. Adjusted EBITDA from continuing operations for the fourth quarter of 2017 was $199 million compared to $85 million in the fourth quarter of 2016.
YEAR END RESULTS
For the year ended December 31, 2017, LP reported net sales of $2.7 billion. For the year ended 2017, the company reported operating income of $523 million compared to $204 million in 2016. For 2017, LP reported an income from continuing operations of $391 million, or $2.67 per diluted share, compared to income of $150 million, or $1.03 per diluted share, for 2016. Adjusted EBITDA from continuing operations for 2017 was $667 million compared to $346 million for 2016.
SIDING SEGMENT
The Siding segment consists of LP SmartSide® trim and siding, LP CanExel® prefinished siding, as well as LP Outdoor Building Solutions® innovative products for premium outdoor buildings. The Siding segment reported net sales of $213 million in the fourth quarter of 2017 compared to $169 million of net sales in the fourth quarter of 2016. For the fourth quarter of 2017, the Siding segment reported operating income of $45 million compared to $22 million in the fourth quarter of 2016. For the fourth quarter, adjusted EBITDA from continuing operations for this segment was $53 million compared to $29 million in the fourth quarter of 2016. The increase in OSB sales prices sold in this segment accounted for approximately $3 million of the increase in both operating results and adjusted EBITDA from continuing operations.
For the full year, Siding reported sales of $884 million, up 18 percent from the prior year, and had operating income of $187 million compared to $126 million in 2016. Adjusted EBITDA from continuing operations for 2017 was $219 million compared to $154 million in 2016. The increase in OSB sales price sold in this segment accounted for approximately $14 million of the increase in both operating results and adjusted EBITDA from continuing operations.
ORIENTED STRAND BOARD (OSB) SEGMENT
The OSB segment manufactures and distributes OSB structural panel products including LP OSB, LP TechShield® radiant barrier, LP TopNotch® sub-flooring, LP Legacy® super tough, moisture-resistant sub-flooring and LP FlameBlock® fire-rated sheathing. The OSB segment reported net sales for the fourth quarter of 2017 of $358 million, up 30% compared to $276 million of net sales in the fourth quarter of 2016. For the fourth quarter of 2017, the OSB segment reported operating income of $136 million compared to income of $60 million in the fourth quarter of 2016. For the fourth quarter, adjusted EBITDA from continuing operations for this segment was $153 million compared to $74 million in the fourth quarter of 2016. The increase in selling prices favorably impacted operating results and adjusted EBITDA from continuing operations by approximately $92 million for the quarter as compared to the fourth quarter of 2016.
For the full year, OSB reported sales of $1.3 billion, up 27% from the prior year and had operating income of $426 million compared to income of $186 million in 2016. Adjusted EBITDA for 2017 was $488 million compared to $246 million in 2016. The increase in selling prices favorably impacted operating results and adjusted EBITDA from continuing operations by approximately $293 million for the year as compared to 2016.
ENGINEERED WOOD PRODUCTS SEGMENT (EWP)
The EWP segment is comprised of LP SolidStart® I-Joist (IJ), Laminated Veneer Lumber (LVL) and Laminated Strand Lumber (LSL) and other related products. The EWP segment reported net sales in the fourth quarter of 2017 totaling $92 million, up 38% from the year-ago quarter. Operating income increased to $3 million for the fourth quarter of 2017 from a loss of $4 million in the fourth quarter of 2016. For the fourth quarter, the EWP segment showed an increase of $8 million in adjusted EBITDA from continuing operations as compared to the same quarter of 2016.
For the full year, EWP reported sales of $366 million, up 23% from the prior year and an operating income of $15 million in 2017 as compared to a loss of $6 million in 2016. Adjusted EBITDA for 2017 was $31 million compared to $8 million in 2016.
SOUTH AMERICA
The South America segment is comprised of facilities in Chile and Brazil. The segment reported net sales in the fourth quarter of 2017 of $41 million, up 20% from the fourth quarter of 2016. Operating income was $8 million for the fourth quarter of 2017, up from $2 million in the fourth quarter of 2016. For the fourth quarter, LP reported adjusted EBITDA from continuing operations in this segment of $10 million compared to $4 million from the fourth quarter of 2016.
For the full year, South America reported sales of $155 million, up 13% from the prior year and operating income of $24 million compared to operating income of $17 million in 2016. Adjusted EBITDA for 2017 was $33 million compared to $26 million in 2016.
COMPANY OUTLOOK
"Looking ahead, we expect housing demand to remain strong in 2018,” Southern said. “As LP looks to the future for new products, major trends such as urbanization and the continued shortage of skilled labor will influence our decisions. We remain focused on growing our specialty products business and are committed to producing value-added products and solutions that deliver distinct value for our customers, as well as our shareholders.”
About LP
Louisiana-Pacific Corporation is a leading building products solutions company that invents, manufactures and delivers uniquely engineered, innovative building products that are backed by unparalleled service, strong customer support and industry leading warranties. With operations in the U.S., Canada, Chile and Brazil, LP helps builders, contractors, architects, engineers and home owners build smarter, better, faster and more efficiently. Founded in 1973, LP is headquartered in Nashville, Tennessee and traded on the New York Stock Exchange under LPX. For more information, visit www.lpcorp.com.
###
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.
CONSOLIDATED STATEMENTS OF INCOME
LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES
(AMOUNTS IN MILLIONS EXCEPT PER SHARE AMOUNTS(UNAUDITED)
Quarter Ended December 31, | Year Ended December 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net sales | $ | 710.6 | $ | 550.0 | $ | 2,733.9 | $ | 2,233.4 | |||||||
Operating costs and expenses: | |||||||||||||||
Cost of sales (exclusive of depreciation and amortization shown separately below) | 465.8 | 422.8 | 1,882.0 | 1,724.0 | |||||||||||
Depreciation and amortization | 32.0 | 26.8 | 123.3 | 112.8 | |||||||||||
Selling and administrative | 45.6 | 47.8 | 190.4 | 183.6 | |||||||||||
(Gain) loss on sale or impairment of long-lived assets, net | 8.6 | (9.4 | ) | 6.8 | (8.4 | ) | |||||||||
Other operating credits and charges, net | 3.5 | 6.0 | 8.0 | 17.4 | |||||||||||
Total operating costs and expenses | 555.5 | 494.0 | 2,210.5 | 2,029.4 | |||||||||||
Income (loss) from operations | 155.1 | 56.0 | 523.4 | 204.0 | |||||||||||
Non-operating income (expense): | |||||||||||||||
Interest expense, net of capitalized interest | (4.5 | ) | (5.8 | ) | (19.3 | ) | (32.1 | ) | |||||||
Investment income | 3.3 | 1.8 | 10.5 | 8.2 | |||||||||||
Other non-operating items | (2.0 | ) | (3.4 | ) | (4.4 | ) | (15.2 | ) | |||||||
Total non-operating income (expense) | (3.2 | ) | (7.4 | ) | (13.2 | ) | (39.1 | ) | |||||||
Income (loss) from continuing operations before income taxes and equity in income of unconsolidated affiliates | 151.9 | 48.6 | 510.2 | 164.9 | |||||||||||
Provision (benefit) for income taxes | 21.2 | 6.7 | 119.1 | 19.8 | |||||||||||
Equity in income of unconsolidated affiliates | — | (0.8 | ) | — | (5.2 | ) | |||||||||
Income (loss) from continuing operations | 130.7 | 42.7 | 391.1 | 150.3 | |||||||||||
Loss from discontinued operations before taxes | (0.3 | ) | (0.8 | ) | (2.0 | ) | (0.8 | ) | |||||||
Benefit for income taxes | (0.1 | ) | (0.3 | ) | (0.7 | ) | (0.3 | ) | |||||||
Loss from discontinued operations | (0.2 | ) | (0.5 | ) | (1.3 | ) | (0.5 | ) | |||||||
Net income (loss) | $ | 130.5 | $ | 42.2 | $ | 389.8 | $ | 149.8 | |||||||
Net income (loss) per share of common stock (basic): | |||||||||||||||
Income (loss) from continuing operations | $ | 0.90 | $ | 0.30 | $ | 2.71 | $ | 1.05 | |||||||
Loss from discontinued operations | — | (0.01 | ) | (0.01 | ) | (0.01 | ) | ||||||||
Net income (loss) per share - basic | $ | 0.90 | $ | 0.29 | $ | 2.70 | $ | 1.04 | |||||||
Net income (loss) per share of common stock (diluted): | |||||||||||||||
Income (loss) from continuing operations | $ | 0.89 | $ | 0.29 | $ | 2.67 | $ | 1.03 | |||||||
Loss from discontinued operations | — | — | (0.01 | ) | — | ||||||||||
Net income (loss) per share - diluted | $ | 0.89 | $ | 0.29 | $ | 2.66 | $ | 1.03 | |||||||
Weighted average shares of stock outstanding - basic | 144.6 | 143.7 | 144.4 | 143.4 | |||||||||||
Weighted average shares of stock outstanding - diluted | 146.6 | 145.5 | 146.4 | 145.3 | |||||||||||
CONSOLIDATED BALANCE SHEET
LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES
(AMOUNTS IN MILLIONS EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
December 31, | |||||||
2017 | 2016 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 928.0 | $ | 659.3 | |||
Receivables, net of allowance for doubtful accounts of $0.9 million and $1.0 million at December 31, 2017 and 2016 | 142.5 | 108.3 | |||||
Inventories | 259.1 | 234.6 | |||||
Prepaid expenses and other current assets | 7.8 | 6.1 | |||||
Current portion of notes receivable from asset sales | 22.2 | — | |||||
Total current assets | 1,359.6 | 1,008.3 | |||||
Timber and timberlands | 55.7 | 53.5 | |||||
Property, plant and equipment | 2,586.1 | 2,468.4 | |||||
Accumulated depreciation | (1,660.0 | ) | (1,577.0 | ) | |||
Net property, plant and equipment | 926.1 | 891.4 | |||||
Goodwill and other intangible assets | 26.7 | 9.7 | |||||
Notes receivable from asset sales | — | 22.2 | |||||
Investments in and advances to affiliates | 7.8 | 6.2 | |||||
Restricted cash | 13.3 | 13.2 | |||||
Other assets | 56.8 | 22.4 | |||||
Deferred tax asset | 2.5 | 4.3 | |||||
Total assets | $ | 2,448.5 | $ | 2,031.2 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Current portion of long-term debt | $ | 25.1 | $ | 2.6 | |||
Accounts payable and accrued liabilities | 237.1 | 191.5 | |||||
Income taxes payable | 4.5 | 31.3 | |||||
Current portion of contingency reserves | 3.4 | 3.4 | |||||
Total current liabilities | 270.1 | 228.8 | |||||
Long-term debt, excluding current portion | 350.8 | 374.4 | |||||
Deferred income taxes | 33.4 | 27.7 | |||||
Contingency reserves, excluding current portion | 11.7 | 12.7 | |||||
Other long-term liabilities | 178.0 | 191.9 | |||||
Stockholders’ equity: | |||||||
Common stock | 153.4 | 153.4 | |||||
Additional paid-in capital | 470.6 | 478.2 | |||||
Retained earnings | 1,280.1 | 890.3 | |||||
Treasury stock | (177.5 | ) | (189.0 | ) | |||
Accumulated comprehensive loss | (122.1 | ) | (137.2 | ) | |||
Total stockholders’ equity | 1,604.5 | 1,195.7 | |||||
Total liabilities and stockholders’ equity | $ | 2,448.5 | $ | 2,031.2 | |||
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES
(Dollar amounts in millions) (Unaudited)
Quarter Ended December 31, | Year Ended December 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||||||
Net income (loss) | $ | 130.5 | $ | 42.2 | $ | 389.8 | $ | 149.8 | |||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||||||
Depreciation and amortization | 32.0 | 26.8 | 123.3 | 112.8 | |||||||||||
Equity in income (loss) of unconsolidated affiliates, including dividends | 0.4 | 1.2 | (0.8 | ) | 1.5 | ||||||||||
Other operating credits and charges, net | 3.5 | 6.0 | 8.0 | 17.4 | |||||||||||
(Gain) loss on sale or impairment of long-lived assets, net | 8.6 | (9.4 | ) | 6.8 | (8.4 | ) | |||||||||
Loss on early debt extinguishment | — | 4.1 | — | 17.3 | |||||||||||
Stock-based compensation related to stock plans | 1.7 | 3.6 | 9.7 | 13.0 | |||||||||||
Exchange (gain) loss on remeasurement | 0.5 | (1.1 | ) | 2.1 | (2.0 | ) | |||||||||
Cash settlements of warranty, net of accruals | (1.3 | ) | (2.2 | ) | (6.8 | ) | (13.6 | ) | |||||||
Pension expense (payments), net of contributions | 2.1 | 2.3 | (1.8 | ) | 3.7 | ||||||||||
Non-cash interest expense, net | 0.1 | 2.2 | 0.4 | 3.8 | |||||||||||
Other adjustments, net | 0.6 | 0.2 | 0.1 | (1.1 | ) | ||||||||||
Changes in assets and liabilities, net of acquisition: | |||||||||||||||
(Increase) decrease in receivables | 26.9 | 28.1 | (35.0 | ) | (8.9 | ) | |||||||||
Increase in inventories | (27.2 | ) | (7.8 | ) | (22.7 | ) | (11.0 | ) | |||||||
Decrease in prepaid expenses | 1.1 | 2.9 | (1.6 | ) | 1.0 | ||||||||||
Increase (decrease) in accounts payable and accrued liabilities | 9.7 | 0.5 | 22.5 | 53.8 | |||||||||||
Increase (decrease) in deferred income taxes | (20.5 | ) | 2.4 | (20.3 | ) | 13.2 | |||||||||
Net cash provided by operating activities | 168.7 | 102.0 | 473.7 | 342.3 | |||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||||||
Property, plant, and equipment additions | (67.9 | ) | (46.1 | ) | (148.6 | ) | (124.8 | ) | |||||||
Proceeds from asset sales | — | 0.2 | 3.2 | 0.3 | |||||||||||
Acquisition of businesses, net of cash acquired | (20.8 | ) | — | (20.8 | ) | — | |||||||||
Receipt of proceeds from notes receivable from asset sales | — | 410.0 | — | 410.0 | |||||||||||
Payment of long-term deposit | — | — | (32.0 | ) | — | ||||||||||
(Increase) decrease in restricted cash under letters of credit | — | 1.3 | — | 1.2 | |||||||||||
Decrease in restricted cash for redemption of long-term debt | — | 93.4 | — | — | |||||||||||
Other investing activities, net | (0.6 | ) | (0.1 | ) | (0.4 | ) | (0.4 | ) | |||||||
Net cash provided by (used in) investing activities | (89.3 | ) | 458.7 | (198.6 | ) | 286.3 | |||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||||||
Borrowings of long-term debt | — | — | — | 350.0 | |||||||||||
Repayment of long-term debt | (0.1 | ) | (459.8 | ) | (2.6 | ) | (742.5 | ) | |||||||
Payment of debt issuance fees | (0.5 | ) | (0.2 | ) | (0.5 | ) | (5.2 | ) | |||||||
Taxes paid related to net share settlement of equity awards | (0.6 | ) | (0.3 | ) | (5.9 | ) | (9.2 | ) | |||||||
Sale of common stock, net of cash payments under equity plans | — | — | (0.4 | ) | (0.1 | ) | |||||||||
Net cash provided (used in) in financing activities | (1.2 | ) | (460.3 | ) | (9.4 | ) | (407.0 | ) | |||||||
Effect of exchange rate on cash and cash equivalents | 1.1 | (0.8 | ) | 3.0 | 3.0 | ||||||||||
Net increase (decrease) in cash and cash equivalents | 79.3 | 99.6 | 268.7 | 224.6 | |||||||||||
Cash and cash equivalents at beginning of year | 848.7 | 559.7 | 659.3 | 434.7 | |||||||||||
Cash and cash equivalents at end of year | $ | 928.0 | $ | 659.3 | $ | 928.0 | $ | 659.3 | |||||||
LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES
SELECTED SEGMENT INFORMATION
(Dollar amounts in millions) (Unaudited)
Quarter Ended December 31, | Year Ended December 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net sales: | |||||||||||||||
Siding | $ | 212.8 | $ | 169.0 | $ | 884.0 | $ | 752.3 | |||||||
OSB | 358.2 | 275.8 | 1,302.5 | 1,027.7 | |||||||||||
Engineered Wood Products | 91.5 | 66.4 | 365.9 | 296.9 | |||||||||||
South America | 40.5 | 33.7 | 155.3 | 136.9 | |||||||||||
Other | 7.7 | 6.6 | 30.0 | 26.9 | |||||||||||
Intersegment sales | (0.1 | ) | (1.5 | ) | (3.8 | ) | (7.3 | ) | |||||||
$ | 710.6 | $ | 550.0 | $ | 2,733.9 | $ | 2,233.4 | ||||||||
Operating profit (loss): | |||||||||||||||
Siding | $ | 45.3 | $ | 22.2 | $ | 186.8 | $ | 126.1 | |||||||
OSB | 136.3 | 59.5 | 425.7 | 186.2 | |||||||||||
Engineered Wood Products | 2.9 | (3.8 | ) | 14.9 | (5.8 | ) | |||||||||
South America | 7.9 | 1.7 | 24.3 | 17.0 | |||||||||||
Other | (0.7 | ) | (0.6 | ) | (3.4 | ) | (1.6 | ) | |||||||
Other operating credits and charges, net | (3.5 | ) | (6.0 | ) | (8.0 | ) | (17.4 | ) | |||||||
Gain (loss) on sale or impairment of long-lived assets | (8.6 | ) | 9.4 | (6.8 | ) | 8.4 | |||||||||
General corporate and other expenses, net | (24.5 | ) | (25.6 | ) | (110.1 | ) | (103.7 | ) | |||||||
Interest expense, net of capitalized interest | (4.5 | ) | (5.8 | ) | (19.3 | ) | (32.1 | ) | |||||||
Investment income | 3.3 | 1.8 | 10.5 | 8.2 | |||||||||||
Other non-operating income (expense) | (2.0 | ) | (3.4 | ) | (4.4 | ) | (15.2 | ) | |||||||
Income (loss) from continuing operations before taxes | 151.9 | 49.4 | 510.2 | 170.1 | |||||||||||
Provision (benefit) for income taxes | 21.2 | 6.7 | 119.1 | 19.8 | |||||||||||
Income (loss) from continuing operations | $ | 130.7 | $ | 42.7 | $ | 391.1 | $ | 150.3 | |||||||
LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES
SUMMARY OF PRODUCTION VOLUMES
The following table sets forth production volumes for the quarters and years ended December 31, 2017 and 2016.
Quarter Ended December 31, | Year Ended December 31, | ||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||
Oriented strand board, million square feet 3/8" basis | 1,086 | 1,061 | 4,354 | 4,323 | |||||||
Oriented strand board, million square feet 3/8" basis (produced by North America non-OSB segment mills) | 62 | 43 | 306 | 219 | |||||||
Wood-based siding, million square feet 3/8" basis | 327 | 281 | 1,365 | 1,282 | |||||||
Engineered I-Joist, million lineal feet(1) | 21 | 17 | 87 | 78 | |||||||
Laminated veneer lumber (LVL), thousand cubic feet(1) | 2,117 | 1,491 | 8,069 | 6,844 | |||||||
Laminated strand lumber (LSL), thousand cubic feet | 862 | 562 | 3,275 | 2,708 | |||||||
(1) | Includes volumes produced by joint venture operations or under sales arrangements and sold to LP. |
Exhibit 99.2 Reconciliation of EBITDA from continuing operations and Adjusted EBITDA from continuing operations for the quarters and years ended December 31, 2017 and 2016.
Three Months Ended December 31, 2017 (Dollar amounts in millions) | Siding | OSB | EWP | South America | Other | Corporate | Total | ||||||||||||||||||||
Income (loss) from continuing operations | $ | 45.3 | $ | 136.3 | $ | 2.9 | $ | 7.9 | $ | (0.7 | ) | $ | (61.0 | ) | $ | 130.7 | |||||||||||
Provision for income taxes | — | — | — | — | — | 21.2 | 21.2 | ||||||||||||||||||||
Interest expense, net of capitalized interest | — | — | — | — | — | 4.5 | 4.5 | ||||||||||||||||||||
Depreciation and amortization | 7.2 | 16.8 | 4.2 | 2.3 | 0.7 | 0.8 | 32.0 | ||||||||||||||||||||
EBITDA from continuing operations | 52.5 | 153.1 | 7.1 | 10.2 | — | (34.5 | ) | 188.4 | |||||||||||||||||||
Stock-based compensation expense | 0.3 | 0.3 | 0.1 | — | — | 1.1 | 1.8 | ||||||||||||||||||||
Gain on sale or impairment of long-lived assets, net | — | — | — | — | — | 8.6 | 8.6 | ||||||||||||||||||||
Other operating credits and charges, net | — | — | — | — | — | 3.5 | 3.5 | ||||||||||||||||||||
Investment income | — | — | — | — | — | (3.3 | ) | (3.3 | ) | ||||||||||||||||||
Adjusted EBITDA from continuing operations | $ | 52.8 | $ | 153.4 | $ | 7.2 | $ | 10.2 | $ | — | $ | (24.6 | ) | $ | 199.0 | ||||||||||||
Three Months Ended December 31, 2016 (Dollar amounts in millions) | Siding | OSB | EWP | South America | Other | Corporate | Total | ||||||||||||||||||||
Income (loss) from continuing operations | $ | 22.2 | $ | 59.5 | $ | (3.8 | ) | $ | 1.7 | $ | (0.6 | ) | $ | (36.3 | ) | $ | 42.7 | ||||||||||
Benefit for income taxes | — | — | — | — | — | 6.7 | 6.7 | ||||||||||||||||||||
Interest expense, net of capitalized interest | — | — | — | — | — | 5.8 | 5.8 | ||||||||||||||||||||
Depreciation and amortization | 6.7 | 14.0 | 2.5 | 2.0 | 0.6 | 1.0 | 26.8 | ||||||||||||||||||||
EBITDA from continuing operations | 28.9 | 73.5 | (1.3 | ) | 3.7 | — | (22.8 | ) | 82.0 | ||||||||||||||||||
Stock-based compensation expense | 0.2 | 0.3 | 0.1 | — | — | 3.0 | 3.6 | ||||||||||||||||||||
Loss on sale or impairment of long-lived assets, net | — | — | — | — | — | (9.4 | ) | (9.4 | ) | ||||||||||||||||||
Loss on early debt extinguishment | — | — | — | — | — | 4.1 | 4.1 | ||||||||||||||||||||
Other operating credits and charges, net | — | — | — | — | — | 6.0 | 6.0 | ||||||||||||||||||||
Investment income | — | — | — | — | — | (1.8 | ) | (1.8 | ) | ||||||||||||||||||
Adjusted EBITDA from continuing operations | $ | 29.1 | $ | 73.8 | $ | (1.2 | ) | $ | 3.7 | $ | — | $ | (20.9 | ) | $ | 84.5 | |||||||||||
Year Ended December 31, 2017 (Dollar amounts in millions) | Siding | OSB | EWP | South America | Other | Corporate | Total | ||||||||||||||||||||
Income (loss) from continuing operations | $ | 186.8 | $ | 425.7 | $ | 14.9 | $ | 24.3 | $ | (3.4 | ) | $ | (257.2 | ) | $ | 391.1 | |||||||||||
Provision for income taxes | — | — | — | — | — | 119.1 | 119.1 | ||||||||||||||||||||
Interest expense, net of capitalized interest | — | — | — | — | — | 19.3 | 19.3 | ||||||||||||||||||||
Depreciation and amortization | 30.9 | 61.6 | 15.8 | 9.1 | 2.8 | 3.1 | 123.3 | ||||||||||||||||||||
EBITDA from continuing operations | 217.7 | 487.3 | 30.7 | 33.4 | (0.6 | ) | (115.7 | ) | 652.8 | ||||||||||||||||||
Stock-based compensation expense | 0.9 | 0.9 | 0.3 | — | — | 7.6 | 9.7 | ||||||||||||||||||||
Loss on sale or impairments of long-lived assets, net | — | — | — | — | — | 6.8 | 6.8 | ||||||||||||||||||||
Other operating credits and charges, net | — | — | — | — | — | 8.0 | 8.0 | ||||||||||||||||||||
Investment income | — | — | — | — | — | (10.5 | ) | (10.5 | ) | ||||||||||||||||||
Adjusted EBITDA from continuing operations | $ | 218.6 | $ | 488.2 | $ | 31.0 | $ | 33.4 | $ | (0.6 | ) | $ | (103.8 | ) | $ | 666.8 | |||||||||||
Year Ended December 31, 2016 (Dollar amounts in millions) | Siding | OSB | EWP | South America | Other | Corporate | Total | ||||||||||||||||||||
Income (loss) from continuing operations | $ | 126.1 | $ | 186.2 | $ | (5.8 | ) | $ | 17.0 | $ | (1.6 | ) | $ | (171.6 | ) | $ | 150.3 | ||||||||||
Provision for income taxes | — | — | — | — | — | 19.8 | 19.8 | ||||||||||||||||||||
Interest expense, net of capitalized interest | — | — | — | — | — | 32.1 | 32.1 | ||||||||||||||||||||
Depreciation and amortization | 27.4 | 58.6 | 12.7 | 8.6 | 2.3 | 3.2 | 112.8 | ||||||||||||||||||||
EBITDA from continuing operations | 153.5 | 244.8 | 6.9 | 25.6 | 0.7 | (116.5 | ) | 315.0 | |||||||||||||||||||
Stock-based compensation expense | 0.9 | 1.0 | 0.6 | — | — | 10.5 | 13.0 | ||||||||||||||||||||
Gain on sale or impairments of long-lived assets, net | — | — | — | — | — | (8.4 | ) | (8.4 | ) | ||||||||||||||||||
Other operating credits and charges, net | — | — | — | — | — | 17.4 | 17.4 | ||||||||||||||||||||
Loss on early debt extinguishment | — | — | — | — | — | 17.3 | 17.3 | ||||||||||||||||||||
Investment income | — | — | — | — | — | (8.2 | ) | (8.2 | ) | ||||||||||||||||||
Adjusted EBITDA from continuing operations | $ | 154.4 | $ | 245.8 | $ | 7.5 | $ | 25.6 | $ | 0.7 | $ | (87.9 | ) | $ | 346.1 | ||||||||||||
Exhibit 99.3 Reconciliation of Adjusted income from continuing operations
(Dollar amounts in millions, except per share amounts) | Quarter Ended | ||||||||||
December 31, 2017 | September 30, 2017 | December 31, 2016 | |||||||||
Net income (loss) | 130.5 | 109.8 | 42.2 | ||||||||
Add (deduct): | |||||||||||
Loss from discontinued operations | 0.2 | 1.1 | 0.5 | ||||||||
(Gain) loss on sale or impairment of long-lived assets, net | 8.6 | 0.7 | (9.4 | ) | |||||||
Other operating credits and charges, net | 3.5 | (0.9 | ) | 6 | |||||||
Interest expense outside of normal operations | — | — | 0.3 | ||||||||
Early debt extinguishment | — | — | 4.1 | ||||||||
Reported tax provision | 21.2 | 46.4 | 6.7 | ||||||||
Normalized tax provision at 35% | (57.4 | ) | (55.0 | ) | (17.6 | ) | |||||
Adjusted income (loss) from continuing operations | $ | 106.6 | $ | 102.1 | $ | 32.8 | |||||
Diluted shares outstanding | 146.6 | 146.5 | 145.5 | ||||||||
Adjusted income (loss) from continuing operations per diluted share | $ | 0.73 | $ | 0.70 | $ | 0.23 | |||||
Year Ended | |||||||
(Dollar amounts in millions, except per share amounts) | December 31, 2017 | December 31, 2016 | |||||
Net income (loss) | $ | 389.8 | $ | 149.8 | |||
Add (deduct): | |||||||
Loss from discontinued operations | 1.3 | 0.5 | |||||
(Gain) loss on sale or impairment of long-lived assets, net | 6.8 | (8.4 | ) | ||||
Other operating credits and charges, net | 8.0 | 17.4 | |||||
Interest expense outside of normal operations | — | 2.8 | |||||
Early debt extinguishment | — | 17.3 | |||||
Reported tax provision | 119.1 | 19.8 | |||||
Normalized tax provision at 35% | (183.8 | ) | (69.7 | ) | |||
Adjusted income (loss) from continuing operations | $ | 341.2 | $ | 129.5 | |||
Diluted shares outstanding | 146.4 | 145.3 | |||||
Adjusted income (loss) from continuing operations per diluted share | $ | 2.33 | $ | 0.89 | |||