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:  July 29, 2003

 

Commission File Number 1-7107

 

LOUISIANA-PACIFIC CORPORATION

(Exact name of registrant as specified in its charter)

 

 

 

Item 9.  Regulation FD Disclosure

 

Continuing its focus on core operations, LP has announced its intent to divest its non-strategic lumber operations as well as its interior hardboard operations. In accordance with Statement of Financial Accounting Standards (SFAS) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” LP is required to account for the businesses anticipated to be sold within one year as discontinued operations. Accordingly, commencing with the quarter ended June 30, 2003, LP is classifying eight of its remaining lumber operations and its tile board facilities as discontinued operations. Additionally, as a result of the planned divestitures, LP was required to modify its segment reporting under SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information.”

 

In order to facilitate comparisons between LP’s results of operations and segment data for periods ended before June 30, 2003 and after June 29, 2003, LP has included as Exhibit 99.2 hereto unaudited condensed consolidated statements of income for the years ended December 31, 2000, 2001 and 2002, and for each quarter included in the years 2001, 2002 and year-to-date 2003, together with related selected segment information, all of which have been restated for informational purposes to conform to the presentation for the quarter ended June 30, 2003.  The information contained in Exhibit 99.2 is not a substitute for, and should be read in conjunction with, the historical financial statements (including the notes thereto) and other information contained in LP’s annual reports on Form 10-K and quarterly reports on Form 10-Q as filed with the Securities and Exchange Commission for the corresponding periods.

 

The balance of the information contained in this Item is intended to be included under “Item 12. Disclosure of Results of Operations and Financial Condition” and is included under Item 9 in accordance with Securities and Exchange Commission Release No. 33-8216.

 

Attached as Exhibit 99.1 and incorporated herein by reference is a copy of a press release of LP dated July 29, 2003, reporting LP’s financial results for the second quarter of 2003.

 

Attached as Exhibit 99.2 and incorporated herein by reference are unaudited consolidated statements of income of LP, and selected segment information of LP, for the years ended December 31, 2002, 2001 and 2000 and for the three months ended March 31, June 30, September 30, and December 31, 2001 and for the three months ended March 31, June 30, September 30 and December 31, 2002 and for the three months ended March 31 and June 30, 2003.  The data for all such periods ended prior to June 30, 2002 have been reclassified to conform to reflect the application of SFAS Nos. 144 and 131 as described above.

 

The information in this Form 8-K the exhibits attached hereto 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.

 

2

 

EXHIBIT INDEX

 

Exhibit No.		Description
99.1		Press release of LP dated April 23, 2003 reporting LP’s earnings for the second quarter 2003.
99.2		Unaudited consolidated statements of income of LP, and selected segment information, for the years ended December 31, 2002, 2001 and 2000 and for the three months ended March 31, June 30, September 30, and December 31, 2001 and for the three months ended March 31, June 30, September 30, and December 31, 2002 and for the three months ended March 31 and June 30, 2003.

 

3

 

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

	LOUISIANA-PACIFIC CORPORATION
Date:  July 29, 2003	By:			/s/ Mark A. Suwyn
				Mark A. Suwyn
				Chairman and Chief Executive Officer
Date:  July 29, 2003	By:		/s/ Curtis M. Stevens
		Curtis M. Stevens
		Executive Vice President and Chief Financial Officer (Principal Financial Officer)

 

4

Exhibit 99.1

 

	NEWS RELEASE
	Release No. 127-7-3
805 SW Broadway	Contact:
Portland, OR 97205	David Dugan  (Media Relations)
503.821.5100	503.821.5285
Fax: 503.821.5107	Bill Hebert (Investor Relations)
	503.821.5100

 

 

FOR RELEASE AT 8:00 A.M. (EDT) TUESDAY, JULY 29, 2003

 

LP Reports Second Quarter 2003 Results

 

Portland, Ore. (July 29, 2003) - Louisiana-Pacific Corporation (LP) (NYSE: LPX) today reported a second quarter net loss of $17.2 million, or $0.16 per diluted share, on sales of $479 million.  In the second quarter of 2002, LP’s net loss was $13.2 million, or $0.13 per diluted share, on sales of $432 million. For the first six months of 2003, LP reported a net loss of $15.7 million, or $0.15 per diluted share, on sales of $892 million compared to a net loss of $22.7 million, or $0.22 per diluted share, on sales of $822 million for the first six months of 2002.  All sales figures are from continuing operations only.

 

For the second quarter of 2003, income from continuing operations was $8.9 million, or $0.09 per share. In the second quarter of 2002, LP’s income from continuing operations was $7.5 million, or $0.07 per diluted share.  For the first six months of 2003, income from continuing operations before cumulative effect of accounting principle was $10.9 million, or $0.10 per share. For the first six months of 2002, income from continuing operations before cumulative effect of accounting principle was $7.6 million, or $0.07 per share.

 

“Our continuing businesses showed significant strength exiting the quarter.  However, during the first two months, poor weather conditions disrupted construction activity and seasonal demand for building products.  In late May and June, demand surged for oriented strand board, siding and engineered wood products.  That momentum has continued to build into the third quarter,” said Mark A. Suwyn, LP’s chairman & CEO.

 

Suwyn continued, “In addition to poor weather conditions, our operations were negatively impacted by elevated costs, compared to second quarter 2002, in energy, other petroleum-based expenses, wood costs, and the continued strengthening of the Canadian dollar.

 

“We are making excellent progress toward achieving the objectives of our divestiture plan.  During the second quarter we sold approximately $110 million of timberland. Also, earlier this month we announced a definitive agreement to sell 465,000 acres of timberland, which represents the last significant portion of our timberland that was not under contract or sold,” Suwyn stated. “We are on track to divest the remaining assets and

 

 

generate more than $700 million in total value (including cash, liquidation of working capital and reduction of liabilities) from this program for our shareholders.”

 

LP also announced today that it is moving its remaining lumber and interior decorative panel facilities to discontinued operations, reflecting its intent to divest or discontinue operating these facilities within the next year.  LP has signed letters of intent with interested buyers for the majority of the facilities and expects to complete most of the transactions by the end of 2003.  As a result of these actions, LP was required to evaluate these facilities for impairment based on expected net sales proceeds.  Based on that evaluation, LP recorded impairment charges associated with certain of these planned divestitures and shutdowns during the second quarter.

 

At 11:00 a.m. EDT (8:00 a.m. PDT) today, LP will host a webcast on its second quarter 2003 financial results.  To access the live webcast and accompanying presentation, visit www.lpcorp.com and go to the “Investor Relations” section from the main menu.

 

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

 

###

 

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 contemplated by these, 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 effect of forestry, land use, environmental and other governmental regulations; the ability to obtain regulatory approvals; and the risk of losses from fires, floods and other natural disasters. These and other factors that could cause or contribute to actual results differing materially from those contemplated by such forward-looking statements are discussed in greater detail in the company’s Securities and Exchange Commission filings.

 

 

 

LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES

 

FINANCIAL AND QUARTERLY DATA

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

 

		Quarter Ended June 30,						Six Months Ended June 30,
		2003			2002			2003			2002
Net sales		$	478.5		$	432.3		$	891.6		$	821.5
Income (loss) before taxes, minority interest, and equity in earnings of unconsolidated affiliate		$	19.3		$	11.1		$	22.4		$	13.9
Income (loss) before taxes, minority interest, and equity in earnings of unconsolidated affiliate excluding (gain) loss on sale or impairment of long-lived assets, other operating credits and charges, net		$	15.5		$	6.8		$	6.1		$	9.3
Income (loss) from continuing operations before cumulative effect of change in accounting principle		$	8.9		$	7.5		$	10.9		$	7.6
Net income (loss)		$	(17.2	)	$	(13.2	)	$	(15.7	)	$	(22.7	)
Net income (loss) per share - basic and diluted		$	(0.16	)	$	(0.13	)	$	(0.15	)	$	(0.22	)
Average shares outstanding
Basic		104.6			104.6			104.6			104.6
Diluted		105.1			104.7			104.9			104.6

 

Calculation of income from continuing operations before taxes, minority interest and equity in earnings of unconsolidated affiliate, excluding gain or loss on sale or impairment of long-lived assets and other operating credits and charges, net:

 

Income before taxes, minority interest, and equity in earnings of unconsolidated affiliate		$	19.3		$	11.1		$	22.4		$	13.9
(Gain) loss on sale or impairment of long-lived assets		(29.2		)	(5.8		)	(41.7		)	(4.2		)
Other operating credits and charges, net		25.4			1.5			25.4			(0.4		)
Income (loss) before taxes, minority interest, and equity in earnings of unconsolidated affiliate excluding (gain) loss on sale or impairment of long-lived assets, other operating credits and charges, net		$	15.5		$	6.8		$	6.1		$	9.3

 

 

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

 

LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES

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

 

		Quarter Ended June 30,						Six Months Ended June 30,
		2003			2002			2003			2002
Net Sales		$	478.5		$	432.3		$	891.6		$	821.5
OPERATING COSTS AND EXPENSES
Cost of sales		376.9			339.0			712.9			639.4
Depreciation, amortization and cost of timber harvested		32.1			32.4			65.0			68.7
Selling and administrative		39.9			36.7			76.5			70.5
(Gain) loss on sale or impairment of long lived assets		(29.2		)	(5.8		)	(41.7		)	(4.2		)
Other operating credits and charges, net		25.4			1.5			25.4			(0.4		)
Total operating costs and expenses		445.1			403.8			838.1			774.0
Income (loss) from operations		33.4			28.5			53.5			47.5
NON-OPERATING INCOME (EXPENSE)
Foreign currency exchange gain (loss)		0.2			(0.8		)	(1.7		)	(1.1		)
Interest expense		(22.3		)	(24.4		)	(45.2		)	(48.2		)
Interest income		8.0			7.8			15.8			15.7
Total non-operating income (expense)		(14.1		)	(17.4		)	(31.1		)	(33.6		)
Income (loss) before taxes, minority interest, and equity in earnings of unconsolidated affliates		19.3			11.1			22.4			13.9
Provision (benefit) for income taxes		10.0			4.3			11.1			8.4
Equity in (income) loss of unconsolidated affliates		—			(0.5		)	—			(1.4		)
Minority interest in net income (loss) of consolidated subsidiary		0.4			(0.2		)	0.4			(0.7		)
Income (loss) from continuing operations before cumulative effect of change in accounting principle		8.9			7.5			10.9			7.6
DISCONTINUED OPERATIONS
Income (loss) from discontinued operations		(42.3		)	(33.4		)	(43.2		)	(42.8		)
Provision (benefit) for income taxes		(16.2		)	(12.7		)	(16.5		)	(16.3		)
Income (loss) from discontinued operations		(26.1		)	(20.7		)	(26.7		)	(26.5		)
Income (loss) before cumulative effect of change in accounting principle		(17.2		)	(13.2		)	(15.8		)	(18.9		)
Cumulative effect of change in accounting principle		—			—			0.1			(3.8		)
Net income (loss)		$	(17.2	)	$	(13.2	)	$	(15.7	)	$	(22.7	)
Net income (loss) per share of common stock:
Income (loss) from continuing operations		$	0.09		$	0.07		$	0.10		$	0.07
Income (loss) from discontinued operations		(0.25		)	(0.20		)	(0.25		)	(0.26		)
Cumulative effect of change in accounting principle		—			—			—			(0.03		)
Net Income (Loss) Per Share - Basic and Diluted		$	(0.16	)	$	(0.13	)	$	(0.15	)	$	(0.22	)
Average shares of common stock outstanding - Basic		104.6			104.6			104.6			104.6
- Diluted		105.1			104.7			104.9			104.6

 

 

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 

LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES

(Dollar amounts in millions) (Unaudited)

 

		June 30, 2003			December 31, 2002
ASSETS
Cash and cash equivalents		$	158.0		$	137.3
Receivables, net		139.3			99.3
Inventories		166.2			163.5
Prepaid expenses		14.4			11.3
Deferred income taxes		46.2			38.6
Current assets of discontinued operations		14.5			41.3
Total current assets		538.6			491.3
Timber and timberlands
Forest licenses		95.8			97.3
Deposits and other		15.4			15.1
Timber and timberlands held for sale		278.1			377.5
Total timber and timberlands		389.3			489.9
Property, plant and equipment		1,786.7			1,770.1
Accumulated depreciation		(981.0		)	(928.6		)
Net property, plant and equipment		805.7			841.5
Goodwill		276.7			276.7
Other intangible assets		26.9			29.9
Notes receivable from asset sales		403.9			403.9
Assets transferred under contractual arrangement		—			29.1
Restricted cash		92.8			46.8
Other assets		120.3			63.9
Long-term assets of discontinued operations		54.3			100.2
Total assets		$	2,708.5		$	2,773.2
LIABILITIES AND EQUITY
Current portion of long-term debt		$	1.1		$	35.3
Accounts payable and accrued liabilities		215.7			211.1
Current portion of contingency reserves		40.0			20.0
Total current liabilities		256.8			266.4
Long-term debt, excluding current portion:
Limited recourse notes payable		396.5			396.5
Other long-term debt		643.8			673.6
Total long-term debt, excluding current portion		1,040.3			1,070.1
Contingency reserves, excluding current portion		85.3			106.1
Liabilities transferred under contractual arrangement		—			15.3
Deferred income taxes and other		342.6			309.1
Commitments and contingencies
Stockholders’ equity:
Common stock		116.9			116.9
Additional paid-in capital		447.8			446.8
Retained earnings		730.1			745.8
Treasury stock		(228.4		)	(230.2		)
Accumulated comprehensive loss		(82.9		)	(73.1		)
Total stockholders’ equity		983.5			1,006.2
Total liabilities and equity		$	2,708.5		$	2,773.2

 

 

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES

(Dollar amounts in millions) (Unaudited)

 

		Six Months Ended June 30,
		2003			2002
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)		$	(15.7	)	$	(22.7	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, amortization and cost of timber harvested		69.9			83.9
(Gain) loss on sale or impairment on long-lived assets		(24.8		)	23.2
Other operating charges and credits		35.4			3.1
Exchange loss on remeasurement		10.0			3.7
Increase in contingency reserves		8.4			2.2
Cash settlement of contingencies		(8.0		)	(24.8		)
Cumulative effect of change in accounting principle		(0.1		)	6.3
Other adjustments		(3.0		)	(10.6		)
Increase in certain working capital components and deferred taxes		(24.8		)	(3.2		)
Net cash provided by operating activities		47.3			61.1
CASH FLOWS FROM INVESTING ACTIVITIES:
Property, plant and equipment additions		(25.9		)	(15.5		)
Proceeds from timber & timberland sales		54.1			1.1
Proceeds from asset sales		30.2			19.5
Increase in restricted cash from asset sales		(46.0		)	—
Return of capital from unconsolidated subsidiary		27.1			—
Other investing activities, net		(1.8		)	5.9
Net cash provided by investing activities		37.7			11.0
CASH FLOWS FROM FINANCING ACTIVITIES:
Net payments under revolving credit facilities		(30.0		)	(32.0		)
Long term borrowings		—			17.1
Repayment of long-term debt		(37.1		)	(17.0		)
Other financing activities, net		1.5			(4.2		)
Net cash used in financing activities		(65.6		)	(36.1		)
EFFECT OF EXCHANGE RATE ON CASH:		1.3			0.1
Net increase in cash and cash equivalents		20.7			36.1
Cash and cash equivalents at beginning of period		137.3			61.6
Cash and cash equivalents at end of period		$	158.0		$	97.7

 

 

 

LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES

 

SELECTED SEGMENT INFORMATION

(Dollar amounts in millions) (Unaudited)

 

		Quarter Ended June 30,						Six Months Ended June 30,
		2003			2002			2003			2002
Net sales:
OSB		$	229.2		$	194.8		$	423.5		$	383.6
Composite Wood Products		100.8			101.8			189.5			188.1
Plastic Building Products		57.6			43.7			100.2			73.8
Engineered Wood Products		72.8			67.8			137.3			121.3
Pulp		—			0.6			—			0.7
Other		25.6			40.1			52.4			84.0
Less: Intersegment sales		(7.5		)	(16.5		)	(11.3		)	(30.0		)
		$	478.5		$	432.3		$	891.6		$	821.5
Operating profit (loss):
OSB		$	37.1		$	25.0		$	50.9		$	48.1
Composite Wood Products		10.5			17.6			20.2			28.4
Plastic Building Products		6.1			1.3			9.3			2.0
Engineered Wood Products		(1.1		)	2.0			(2.1		)	4.3
Pulp		—			(2.3		)	—			(3.6		)
Other		(1.0		)	1.9			2.3			5.7
Other operating credits and charges, net		(25.4		)	(1.5		)	(25.4		)	0.4
Gain (loss) on sale or impairment of long-lived assets		29.2			5.8			41.7			4.2
General corporate and other expenses, net		(21.8		)	(22.1		)	(45.1		)	(43.1		)
Interest income (expense), net		(14.3		)	(16.6		)	(29.4		)	(32.5		)
Income (loss) before taxes, minority interest and equity in earnings of unconsolidated subsidiary		$	19.3		$	11.1		$	22.4		$	13.9

 

 

 

LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES

 

NOTES TO FINANCIAL DATA

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

 

1.               Results of operations for interim periods are not necessarily indicative of results to be expected for an entire year.

 

2.               On May 8, 2002, LP announced that its board of directors had approved a plan to sell selected businesses and assets in order to significantly reduce LP’s current debt. As revised in May 2003, the plan involves divesting LP’s plywood, industrial panels, timber and timberlands, wholesale and distribution businesses and certain lumber mills. In accordance with Statement of Financial Accounting Standards (SFAS) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, LP is required to account for the businesses sold or anticipated to be sold within one year as discontinued operations. Additionally, as a result of the planned divestitures, LP was required to modify its segment reporting under SFAS No. 131, “Disclosures about Segments of Enterprise and Related Information”.

 

3.               Other Operating Charges and Credits, Net:

 

The major components of  “Other operating charges and credits, net” in the Condensed Consolidated Statements Of Income for the quarter and six months ended June 30 are reflected in the table below and are described in the paragraphs following the table:

 

Quarter Ended June 30,		2003						2002
		Pre-tax			After tax			Pre-tax			After tax
Additions to product related contingency reserves		$	(6.7	)	$	(4.1	)	$	—		$	—
Additions to environmental contingency reserves		(2.7		)	(1.6		)	—			—
Loss related to assets and liabilities transferred under contractual arrangement		(16.0		)	(9.8		)	—			—
Severance charges		—			—			(1.5		)	(0.9		)
		$	(25.4	)	$	(15.5	)	$	(1.5	)	$	(0.9	)

 

Six Months Ended June 30,		2003						2002
		Pre-tax			After tax			Pre-tax			After tax
Insurance recoveries		$	—		$	—		$	1.9		$	1.1
Additions to product related contingency reserves		(6.7		)	(4.1		)	—			—
Additions to environmental contingency reserves		(2.7		)	(1.6		)	—			—
Loss related to assets and liabilities transferred under contractual arrangement		(16.0		)	(9.8		)	—			—
Severance charges		—			—			(1.5		)	(0.9		)
		$	(25.4	)	$	(15.5	)	$	0.4		$	0.2

 

In the first quarter of 2002, LP recorded a net gain of $1.9 million ($1.1 million after taxes, or $0.01 per diluted share) from business interruption insurance recoveries related to incidents at facilities that occurred in past years.

 

 

 

In the second quarter of 2002, LP recorded a loss of  $1.5 million ($1.0 million after tax, or $.01 per share) on severance accrued as part of the divestiture plan.

 

In the second quarter of 2003, LP recorded a loss of $16.0 million ($9.8 million after taxes, or $0.15 per share) related to assets and liabilities transferred under contractual arrangement due to the increase in a valuation allowance associated with notes receivable from Samoa Pacific; a loss of $6.7 million ($4.1 million after taxes, or $0.04 per share) from increases in product related contingency reserves associated with the National OSB class action settlement and a loss of $2.7 million ($1.6 million after taxes, or $0.01 per diluted share) associated with environmental reserves at our Ketchikan Pulp Company operations.

 

4.               Gain (Loss) on Sale or Impairment of Long-Lived Assets:

 

The major components of  “Gain (loss) on sale or impairment of long-lived assets” in the Condensed Consolidated Statements Of Income for the quarter and year ended December 31 are reflected in the table below and are described in the paragraphs following the table:

 

Quarter Ended June 30,		2003						2002
		Pre-tax			After tax			Pre-tax			After tax
Gain on sales of timber		$	29.3		$	17.9		$	—		$	—
Loss on other long-lived assets		(0.1		)	(0.1		)	7.1			4.3
Impairment charges on fixed assets		—			—			(1.3		)	(0.8		)
		$	29.2		$	17.8		$	5.8		$	3.5

 

Six months ended June 30,		2003						2002
		Pre-tax			After tax			Pre-tax			After tax
Gain on sales of timber		$	41.8		$	25.5		$	—		$	—
Loss on other long-lived assets		(0.1		)	(0.1		)	7.1			4.3
Impairment charges on fixed assets		—			—			(2.9		)	(1.8		)
		$	41.7		$	25.4		$	4.2		$	2.5

 

In the first quarter of 2002, LP recorded a loss of $1.6 million ($0.9 million after taxes, or $0.01 per diluted share) associated with impairment charges on assets held.

 

In the second quarter of 2002, LP recorded a loss of $1.3 million ($0.8 million after taxes, or $0.01 per diluted share) associated with impairment charges on assets held and a gain of $7.1 million ($4.3 million after taxes, or $0.04 per share) on the sale of certain assets.

 

In the first quarter of 2003, LP recorded a gain of $12.5 million ($7.7 million after taxes, or $0.07 per diluted share) associated with the sale of a portion of LP’s timberlands as part of LP’s divestiture plan.

 

 

 

In the second quarter of 2003, LP recorded a gain of $29.3 million ($17.9 million after taxes, or $0.17 per  share) associated with the sale of a portion of LP’s timberlands as part of LP’s divestiture plan and a loss of $0.1 million ($0.1 million after taxes, or $0.00 per diluted share) associated with the sale of certain other assets.

 

5.               Income Taxes

 

		Quarter Ended June 30,						Six months ended June 30,
		2003			2002			2003			2002
Continuing operations		$	18.9		$	11.8		$	22.0		$	16.0
Discontinued operations		(42.3		)	(33.4		)	(43.2		)	(42.8		)
Cumulative effect of change in accounting principle		—			—			0.2			(6.3		)
		(23.4		)	(21.6		)	(21.0		)	(33.1		)
Total tax provision (benefit)		(6.2		)	(8.4		)	(5.3		)	(10.4		)
Net income (loss)		$	(17.2	)	$	(13.2	)	$	(15.7	)	$	(22.7	)

 

Accounting standards require that the estimated effective income tax rate (based upon estimated annual amounts of taxable income and expense) by income component for the year be applied to year-to-date income or loss at the end of each quarter. The primary difference between the statutory rate (38%) on continuing operations and the calculated rate relates to permanent difference associated with certain inter-company debt which is denominated in Canadian dollars. The components and associated estimated effective income tax rates applied to each period are as follows:

 

		Quarter Ended June 30,
		2003					2002
		Tax Provision			Tax Rate		Tax Provision			Tax Rate
Continuing operations		$	10.0		53	%	$	4.3		36	%
Discontinued operations		(16.2		)	38	%	(12.7		)	38	%
Cumulative effect of accounting change		—			—		—			—
		$	(6.2	)	26	%	$	(8.4	)	39	%

 

		Six Months Ended June 30,
		2003					2002
		Tax Provision			Tax Rate		Tax Provision			Tax Rate
Continuing operations		$	11.1		50	%	$	8.4		53	%
Discontinued operations		(16.5		)	38	%	(16.3		)	38	%
Cumulative effect of accounting change		0.1			38	%	(2.5		)	38	%
		$	(5.3	)	26	%	$	(10.4	)	31	%

 

 

 

6.               Cumulative Effect of Change in Accounting Principles:

 

LP adopted Statement of Financial Accounting Standards No. 143, “Accounting for Asset Retirement Obligations”, as of January 1, 2003. This statement addresses the retirement of long-lived assets and the associated retirement costs. Under this statement, we will record both an initial asset and a liability for the present value of estimated costs of legal obligations associated with the retirement of long-lived assets. These initial assets will be depreciated over the expected useful life of the asset. Upon adoption of this statement, we changed our accounting for landfill closures, reforestation obligations associated with certain timber licenses in Canada and other assets. Implementation of this standard resulted in income of $0.2 million (or $0.1 million after tax) recorded as a  “cumulative effect of change in accounting principle” as of January 1, 2003.

 

LP adopted Statement of Financial Accounting Standards No. 142, “Goodwill and other Intangible Assets”, as of January 1, 2002. As of January 1, 2002, LP discontinued amortization of goodwill. LP has determined that $6.3 million of goodwill recorded in the Engineered Wood Products business was impaired as of January 1, 2002 and this amount is recorded net of income tax effects as a “cumulative effect of change in accounting principle” as of January 1, 2002.

 

 

 

LOUISIANA-PACIFIC CORPORATION

 

SUMMARY OF PRODUCTION VOLUMES

 

		Quarter Ended June 30,				Six Months Ended June 30,
		2003		2002		2003		2002
Oriented strand board, million square feet 3/8” basis		1,298		1,363		2,587		2,723
Wood-based siding, million square feet 3/8” basis		213		202		420		389
Engineered I-Joist, million lineal feet		21		23		43		41
Laminated veneer lumber (LVL), thousand cubic feet		2,551		2,277		4,755		4,293
Composite Decking, thousand lineal feet		8,462		5,773		16,444		8,449
Vinyl Siding, squares		747		722		1,302		1,205

 

 

Exhibit 99.2

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES

(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE) (UNAUDITED)

 

		For the year ended December 31,
		2002			2001			2000
Net sales		$	1,595,200		$	1,591,600		$	2,197,400
Operating costs and expenses:
Cost of sales		1,284,600			1,348,100			1,650,900
Depreciation, depletion and amortization		132,600			163,400			189,700
Selling and administrative		133,900			146,700			213,100
(Gain) loss on sale of and impairment of long-lived assets, net		(61,300		)	37,200			56,700
Other operating credits and charges, net		29,500			57,800			13,900
Total operating costs and expenses		1,519,300			1,753,200			2,124,300
Income (loss) from operations		75,900			(161,600		)	73,100
Non-operating income (expense):
Foreign currency exchange gains (losses)		(3,200		)	2,400			(1,200		)
Interest expense, net of capitalized interest		(95,800		)	(93,100		)	(81,000		)
Interest income		32,800			33,300			37,900
Total non-operating income (expense)		(66,200		)	(57,400		)	(44,300		)
Income (loss) from continuing operations before taxes, minority interest, and equity in earnings of unconsolidated affiliates		9,700			(219,000		)	28,800
Provision (benefit) for income taxes		16,100			(85,100		)	8,800
Minority interest in net income (loss) of consolidated subsidiaries		(2,800		)	(5,100		)	—
Equity in (earnings) losses of unconsolidated affiliates		(900		)	—			7,100
Income (loss) from continuing operations before cumulative effect of change accounting principle		(2,700		)	(128,800		)	12,900
Discontinued operations
Income (loss) from discontinued operations		(90,600		)	(70,100		)	(43,600		)
Income tax (benefit) provision		(35,100		)	(27,300		)	(16,900		)
Income (loss) from discontinued operations		(55,500		)	(42,800		)	(26,700		)
Income (loss) before cumulative effect of change in accounting principle		(58,200		)	(171,600		)	(13,800		)
Cumulative effect of change in accounting principle, net of tax		(3,800		)	—			—
Net income (loss)		(62,000		)	(171,600		)	(13,800		)
Net income (loss) per share of common stock - basic and diluted:
Income (loss) from continuing operations		$	(0.03	)	$	(1.23	)	$	0.13
Income (loss) from discontinued operations		(0.53		)	(0.41		)	(0.26		)
Cumulative effect of change in accounting principle		(0.03		)	—			—
Net income (loss) - per share - basic and diluted		$	(0.59	)	$	(1.64	)	$	(0.13	)

 

 

LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE) (UNAUDITED)

 

SEGMENT REPORT:

 

		For the year ended December 31,
		2002			2001			2000
Net sales:
OSB		$	727,300		$	732,200		$	938,100
Composite Wood Products		355,300			319,000			240,000
Plastic Building Products		152,000			131,000			128,900
Engineered Wood Products		263,000			237,500			323,500
Other		147,400			163,400			430,700
Pulp		1,300			48,000			151,500
Less Intersegment Sales		(51,100		)	(39,500		)	(15,300		)
Net sales		$	1,595,200		$	1,591,600		$	2,197,400
Operating profit (loss):
OSB		$	61,100		$	28,200		$	228,900
Composite Wood Products		45,100			27,500			31,100
Plastic Building Products		5,000			(5,800		)	(6,000		)
Engineered Wood Products		5,200			(400		)	(16,000		)
Other		7,900			(300		)	(9,200		)
Pulp		(2,000		)	(27,300		)	12,800
Other operating charges and credits		(29,500		)	(57,800		)	(13,900		)
Gain (loss) on sale or impairment of long lived assets		61,300			(37,200		)	(56,700		)
General corporate and other expenses, net		(81,400		)	(86,100		)	(99,100		)
Interest income (expense), net		(63,000		)	(59,800		)	(43,100		)
Income (loss) before taxes, minority interest and equity in earnings of unconsolidated subsidiary		$	9,700		$	(219,000	)	$	28,800

 

 

 

LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES

(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE) (UNAUDITED)

 

OTHER INFORMATION:

 

		For the year ended December 31,
		2002			2001			2000
Depreciation, Amortization and Cost of Timber Harvested
OSB		$	74,500		$	95,800		$	91,300
Composite Wood Products		16,000			20,200			19,000
Plastic Building Products		6,200			5,100			4,400
Engineered Wood Products		17,100			15,700			19,000
Other		8,100			12,700			35,800
Pulp		—			3,000			10,400
Non-segment related		10,700			10,900			9,800
		$	132,600		$	163,400		$	189,700
Production Information
Oriented strand board, million square feet 3/8” basis		5,122			5,240			5396
Wood-based siding, million square feet 3/8” basis		786			733			651
Composite Decking, thousand lineal feet		21,991			8,082			9,313
Vinyl Siding, squares		2,419			2,246			1,986
Engineered I-Joist, million lineal feet		84			71			70
Laminated veneer lumber (LVL), thousand cubic feet		8,394			6,924			7008

 

 

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES

(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE) (UNAUDITED)

 

		First Quarter									Second Quarter									Third Quarter						Fourth Quarter
		2003			2002			2001			2003			2002			2001			2002			2001			2002			2001
Net sales		$	413,100		$	389,200		$	378,100		$	478,500		$	432,300		$	446,400		$	415,300		$	429,700		$	358,400		$	337,400
Operating costs and expenses:
Cost of sales		336,000			300,400			355,700			376,900			339,000			350,200			344,100			343,700			301,100			298,500
Depreciation, depletion and amortization		32,900			36,300			42,000			32,100			32,400			39,100			31,900			42,600			32,000			39,700
Selling and administrative		36,600			33,800			38,900			39,900			36,700			43,500			32,900			33,300			30,500			31,000
(Gain) loss on sale of and impairment of long-lived assets, net		(12,500		)	1,600			11,200			(29,200		)	(5,800		)	200			(38,800		)	(2,000		)	(18,300		)	27,800
Other operating credits and charges, net		—			(1,900		)	6,400			25,400			1,500			9,900			2,600			8,600			27,300			32,900
Total operating costs and expenses		393,000			370,200			454,200			445,100			403,800			442,900			372,700			426,200			372,600			429,900
Income (loss) from operations		20,100			19,000			(76,100		)	33,400			28,500			3,500			42,600			3,500			(14,200		)	(92,500		)
Non-operating income (expense):
Foreign currency exchange gains (losses)		(1,900		)	(300		)	2,100			200			(800		)	(3,800		)	(500		)	1,600			(1,600		)	2,500
Interest expense, net of capitalized interest		(22,900		)	(23,800		)	(22,800		)	(22,300		)	(24,400		)	(20,800		)	(23,900		)	(23,600		)	(23,700		)	(25,900		)
Interest income		7,800			7,900			7,700			8,000			7,800			7,200			8,300			8,000			8,800			10,400
Total non-operating income (expense)		(17,000		)	(16,200		)	(13,000		)	(14,100		)	(17,400		)	(17,400		)	(16,100		)	(14,000		)	(16,500		)	(13,000		)
Income (loss) from continuing operations before taxes, minority interest, and equity in earnings of unconsolidated affiliates		3,100			2,800			(89,100		)	19,300			11,100			(13,900		)	26,500			(10,500		)	(30,700		)	(105,500		)
Provision (benefit) for income taxes		1,100			4,100			(13,000		)	10,000			4,300			(3,200		)	9,800			(14,700		)	(2,100		)	(54,200		)
Minority interest in net income (loss) of consolidated subsidiaries		—			(900		)	(1,300		)	—			(500		)	(1,300		)	(900		)	(1,300		)	(500		)	(1,200		)
Equity in (earnings) losses of unconsolidated affiliates		—			(500		)	—			400			(200		)	400			(200		)	400			—			(800		)
Income (loss) from continuing operations before cumulative effect of change accounting principle		2,000			100			(74,800		)	8,900			7,500			(9,800		)	17,800			5,100			(28,100		)	(49,300		)
Discontinued operations
Income (loss) from discontinued operations		(900		)	(9,400		)	(24,000		)	(42,300		)	(33,400		)	300			(23,500		)	(11,200		)	(24,300		)	(35,200		)
Income tax (benefit) provision		(300		)	(3,600		)	(9,400		)	(16,200		)	(12,700		)	200			(9,000		)	(4,400		)	(9,800		)	(13,700		)
Income (loss) from discontinued operations		(600		)	(5,800		)	(14,600		)	(26,100		)	(20,700		)	100			(14,500		)	(6,800		)	(14,500		)	(21,500		)
Income (loss) before cumulative effect of change in accounting principle		1,400			(5,700		)	(89,400		)	(17,200		)	(13,200		)	(9,700		)	3,300			(1,700		)	(42,600		)	(70,800		)
Cumulative effect of change in accounting principle, net of tax		100			(3,800		)	—			—			—			—			—			—			—			—
Net income (loss)		1,500			(9,500		)	(89,400		)	(17,200		)	(13,200		)	(9,700		)	3,300			(1,700		)	(42,600		)	(70,800		)
Net income (loss) per share of common stock - basic and diluted:
Income (loss) from continuing operations		$	0.02		$	0.00		$	(0.72	)	$	0.09		$	0.07		$	(0.09	)	$	0.17		$	0.05		$	(0.27	)	$	(0.47	)
Income (loss) from discontinued operations		(0.01		)	(0.06		)	(0.14		)	(0.25		)	(0.20		)	0.00			(0.14		)	(0.07		)	(0.14		)	(0.21		)
Cumulative effect of change in accounting principle		0.00			(0.03		)	—			—			—			—			—			—			—			—
Net income (loss) - per share - basic and diluted		$	0.01		$	(0.09	)	$	(0.86	)	$	(0.16	)	$	(0.13	)	$	(0.09	)	$	0.03		$	(0.02	)	$	(0.41	)	$	(0.68	)

 

 

 

LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES

(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE) (UNAUDITED)

 

SEGMENT REPORT:

 

		First Quarter									Second Quarter									Third Quarter						Fourth Quarter
		2003			2002			2001			2003			2002			2001			2002			2001			2002			2001
Net sales:
OSB		$	194,500		$	188,800		$	165,100		$	229,200		$	194,800		$	208,800		$	173,000		$	197,300		$	170,700		$	161,000
Composite Wood Products		88,700			86,300			64,600			100,800			101,800			98,100			90,000			90,800			77,200			65,500
Plastic Building Products		42,600			30,100			26,800			57,600			43,700			37,800			47,000			39,800			31,200			26,600
Engineered Wood Products		64,500			53,500			56,000			72,800			67,800			63,700			81,600			66,300			60,100			51,500
Other		26,700			43,900			39,500			25,600			40,100			36,900			36,700			44,100			26,700			42,900
Pulp		—			100			32,900			—			600			9,900			600			3,900			—			1,300
Less Intersegment Sales		(3,900		)	(13,500		)	(6,800		)	(7,500		)	(16,500		)	(8,800		)	(13,600		)	(12,500		)	(7,500		)	(11,400		)
Net sales		$	413,100		$	389,200		$	378,100		$	478,500		$	432,300		$	446,400		$	415,300		$	429,700		$	358,400		$	337,400
Operating profit (loss):
OSB		$	13,800		$	23,100		$	(14,100	)	$	37,100		$	25,000		$	30,800		$	8,000		$	22,600		$	5,000		$	(11,100	)
Composite Wood Products		9,700			10,800			800			10,500			17,600			13,700			9,600			8,800			7,100			4,200
Plastic Building Products		3,200			700			(2,700		)	6,100			1,300			(300		)	3,400			(400		)	(400		)	(2,400		)
Engineered Wood Products		(1,000		)	2,300			700			(1,100		)	2,000			(1,300		)	2,600			900			(1,700		)	(700		)
Other		3,300			3,800			(3,800		)	(1,000		)	1,900			(1,900		)	1,100			2,600			1,100			2,800
Pulp		—			(1,300		)	(12,800		)	—			(2,300		)	(6,300		)	1,400			(4,900		)	200			(3,300		)
Other operating charges and credits		—			1,900			(6,400		)	(25,400		)	(1,500		)	(10,000		)	(2,600		)	(8,500		)	(27,300		)	(32,900		)
Gain (loss) on sale or impairment of long lived assets		12,500			(1,600		)	(11,200		)	29,200			5,800			(200		)	38,800			2,000			18,300			(27,800		)
General corporate and other expenses, net		(23,300		)	(21,000		)	(24,500		)	(21,800		)	(22,100		)	(24,800		)	(20,200		)	(18,000		)	(18,100		)	(18,800		)
Interest income (expense), net		(15,100		)	(15,900		)	(15,100		)	(14,300		)	(16,600		)	(13,600		)	(15,600		)	(15,600		)	(14,900		)	(15,500		)
Income (loss) before taxes, minority interest and equity in earnings of unconsolidated subsidiary		$	3,100		$	2,800		$	(89,100	)	$	19,300		$	11,100		$	(13,900	)	$	26,500		$	(10,500	)	$	(30,700	)	$	(105,500	)

 

 

 

LOUISIANA-PACIFIC CORPORATION AND SUBSIDIARIES

(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE) (UNAUDITED)

 

OTHER INFORMATION:

 

		First Quarter									Second Quarter									Third Quarter						Fourth Quarter
		2003			2002			2001			2003			2002			2001			2002			2001			2002			2001
Depreciation, Amortization and Cost of Timber Harvested
OSB		$	18,700		$	20,900		$	23,700		$	17,300		$	18,000		$	23,900		$	17,500		$	24,800		$	18,100		$	23,400
Composite Wood Products		4,100			4,000			4,900			4,300			4,100			5,400			4,200			5,000			3,700			4,900
Plastic Building Products		1,700			1,300			1,200			1,900			1,600			1,300			1,700			1,200			1,600			1,400
Engineered Wood Products		4,000			4,200			3,500			3,600			4,100			3,800			4,200			4,600			4,600			3,800
Other		2,000			3,100			3,500			2,200			2,100			3,000			1,600			3,200			1,300			3,000
Pulp		—			—			1,600			—			—			600			—			400			—			400
Non-segment related		2,400			2,800			3,600			2,800			2,500			1,100			2,700			3,400			2,700			2,800
		$	32,900		$	36,300		$	42,000		$	32,100		$	32,400		$	39,100		$	31,900		$	42,600		$	32,000		$	39,700
Production Information
Oriented strand board, million square feet 3/8” basis		1,289			1,360			1,367			1,298			1,363			1,361			1,191			1,309			1,208			1,203
Wood-based siding, million square feet 3/8” basis		207			187			154			213			202			193			203			208			194			178
Composite Decking, thousand lineal feet		7,982			2,676			4,180			8,462			5,773			1,948			6,660			896			6,882			1,058
Vinyl Siding, squares		555			483			461			747			722			663			708			689			506			433
Engineered I-Joist, million lineal feet		21			18			14			21			23			23			24			21			19			13
Laminated veneer lumber (LVL), thousand cubic feet		2,204			2,016			1,694			2,551			2,277			2,079			2,116			1,914			1,985			1,237