DELAWARE | 93-0609074 | |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
Large accelerated filer | x | Accelerated filer | o |
Non-accelerated filer | o | Smaller reporting company | o |
Emerging growth company | o |
• | changes in governmental fiscal and monetary policies and levels of employment; |
• | changes in general economic conditions; |
• | changes in the cost and availability of capital; |
• | changes in the level of home construction and repair activity; |
• | changes in competitive conditions and prices for our products; |
• | changes in the relationship between supply of and demand for building products; |
• | changes in the relationship between supply of and demand for raw materials, including wood fiber and resins, used in manufacturing our products; |
• | changes in the cost of and availability of energy, primarily natural gas, electricity and diesel fuel; |
• | changes in the cost of and availability of transportation; |
• | changes in other significant operating expenses; |
• | changes in exchange rates between the U.S. dollar and other currencies, particularly the Canadian dollar, Brazilian real and Chilean peso; |
• | changes in general and industry-specific environmental laws and regulations; |
• | changes in tax laws, and interpretations thereof; |
• | changes in circumstances giving rise to environmental liabilities or expenditures; |
• | the resolution of existing and future product-related litigation and other legal proceedings; and |
• | acts of public authorities, war, civil unrest, natural disasters, fire, floods, earthquakes, inclement weather and other matters beyond our control. |
Item 1. | Financial Statements. |
March 31, 2017 | December 31, 2016 | ||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 649.5 | $ | 659.3 | |||
Receivables, net of allowance for doubtful accounts of $1.0 million at March 31, 2017 and December 31, 2016 | 149.1 | 108.3 | |||||
Inventories | 260.0 | 234.6 | |||||
Prepaid expenses and other current assets | 7.3 | 6.1 | |||||
Assets held for sale | 8.1 | 8.2 | |||||
Total current assets | 1,074.0 | 1,016.5 | |||||
Timber and timberlands | 52.4 | 53.5 | |||||
Property, plant and equipment | 2,426.4 | 2,410.8 | |||||
Accumulated depreciation | (1,549.5 | ) | (1,527.6 | ) | |||
Property, plant and equipment, net | 876.9 | 883.2 | |||||
Goodwill | 9.7 | 9.7 | |||||
Notes receivable from asset sales | 22.2 | 22.2 | |||||
Investments in and advances to affiliates | 6.8 | 6.2 | |||||
Restricted cash | 13.1 | 13.2 | |||||
Other assets | 23.4 | 22.4 | |||||
Long-term deferred tax asset | 1.7 | 4.3 | |||||
Total assets | $ | 2,080.2 | $ | 2,031.2 | |||
LIABILITIES AND EQUITY | |||||||
Current portion of long-term debt | $ | 1.6 | $ | 2.6 | |||
Accounts payable and accrued liabilities | 210.5 | 222.8 | |||||
Current portion of contingency reserves | 3.4 | 3.4 | |||||
Total current liabilities | 215.5 | 228.8 | |||||
Long-term debt, excluding current portion | 374.6 | 374.4 | |||||
Deferred income taxes | 28.5 | 27.7 | |||||
Contingency reserves, excluding current portion | 12.5 | 12.7 | |||||
Other long-term liabilities | 195.0 | 191.9 | |||||
Stockholders’ equity: | |||||||
Common stock, $1 par value, 200,000,000 shares authorized, 153,358,542 shares issued | 153.4 | 153.4 | |||||
Additional paid-in capital | 469.0 | 478.2 | |||||
Retained earnings | 945.3 | 890.3 | |||||
Treasury stock, 8,694,673 shares and 9,041,733 shares, at cost | (180.4 | ) | (189.0 | ) | |||
Accumulated comprehensive loss | (133.2 | ) | (137.2 | ) | |||
Total stockholders’ equity | 1,254.1 | 1,195.7 | |||||
Total liabilities and stockholders’ equity | $ | 2,080.2 | $ | 2,031.2 |
Quarter Ended March 31, | |||||||
2017 | 2016 | ||||||
Net sales | $ | 610.9 | $ | 504.6 | |||
Operating costs and expenses: | |||||||
Cost of sales | 455.0 | 415.5 | |||||
Depreciation and amortization | 30.6 | 27.9 | |||||
Selling and administrative | 48.6 | 42.3 | |||||
Loss on sale or impairment of long-lived assets, net | 0.6 | — | |||||
Other operating credits and charges, net | 3.4 | — | |||||
Total operating costs and expenses | 538.2 | 485.7 | |||||
Income from operations | 72.7 | 18.9 | |||||
Non-operating income (expense): | |||||||
Interest expense, net of capitalized interest | (5.0 | ) | (8.0 | ) | |||
Investment income | 2.0 | 1.8 | |||||
Other non-operating items | (0.3 | ) | 0.5 | ||||
Total non-operating income (expense) | (3.3 | ) | (5.7 | ) | |||
Income before taxes and equity in income of unconsolidated affiliates | 69.4 | 13.2 | |||||
Provision for income taxes | 15.5 | 4.4 | |||||
Equity in income of unconsolidated affiliates | (1.1 | ) | (1.5 | ) | |||
Net income | $ | 55.0 | $ | 10.3 | |||
Net income per share of common stock: | |||||||
Net income per share - basic | $ | 0.38 | $ | 0.07 | |||
Net income per share - diluted | $ | 0.38 | $ | 0.07 | |||
Weighted average shares of stock outstanding - basic | 144.2 | 142.9 | |||||
Weighted average shares of stock outstanding - diluted | 145.9 | 145.2 |
Quarter Ended March 31, | |||||||
2017 | 2016 | ||||||
Net income | $ | 55.0 | $ | 10.3 | |||
Other comprehensive income (loss): | |||||||
Foreign currency translation adjustments | 2.8 | 6.1 | |||||
Unrealized loss on investments, net of tax | 0.3 | — | |||||
Defined benefit pension plans: | |||||||
Change benefit obligations, translation adjustment | (0.2 | ) | (0.8 | ) | |||
Amortization of amounts included in net periodic benefit cost: | |||||||
Actuarial loss, net of tax | 0.9 | 0.8 | |||||
Prior service cost, net of tax | 0.2 | 0.1 | |||||
Other comprehensive income | 4.0 | 6.2 | |||||
Comprehensive income | $ | 59.0 | $ | 16.5 |
Quarter Ended March 31, | |||||||
2017 | 2016 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net income | $ | 55.0 | $ | 10.3 | |||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||
Depreciation and amortization | 30.6 | 27.9 | |||||
Equity in income of unconsolidated affiliates, including dividends | (0.6 | ) | 0.5 | ||||
Loss on sale or impairment of long-lived assets, net | 0.6 | — | |||||
Other operating credits and charges, net | 3.4 | — | |||||
Stock-based compensation related to stock plans | 4.1 | 3.0 | |||||
Exchange loss on remeasurement | 0.2 | 0.1 | |||||
Cash settlements of warranties, net of accruals | (3.2 | ) | (3.5 | ) | |||
Pension expense, net of contributions | 1.4 | 0.4 | |||||
Non-cash interest expense, net | 0.1 | 0.4 | |||||
Other adjustments, net | 0.3 | (0.3 | ) | ||||
Changes in assets and liabilities: | |||||||
Increase in receivables | (39.7 | ) | (47.8 | ) | |||
Increase in inventories | (24.8 | ) | (26.9 | ) | |||
(Increase) decrease in prepaid expenses | (0.6 | ) | 1.1 | ||||
Increase (decrease) in accounts payable and accrued liabilities | (19.9 | ) | 26.0 | ||||
Increase in income taxes | 13.9 | 3.9 | |||||
Net cash provided by (used in) operating activities | 20.8 | (4.9 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Property, plant and equipment additions | (26.1 | ) | (26.3 | ) | |||
Other investing activities | 0.1 | 0.1 | |||||
Net cash used in investing activities | (26.0 | ) | (26.2 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Repayment of long-term debt | (1.2 | ) | (1.1 | ) | |||
Sale of common stock under equity plans | 0.4 | 0.1 | |||||
Taxes paid related to net share settlement of equity awards | (4.7 | ) | (0.9 | ) | |||
Net cash used in financing activities | (5.5 | ) | (1.9 | ) | |||
EFFECT OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS | 0.9 | 2.5 | |||||
Net decrease in cash and cash equivalents | (9.8 | ) | (30.5 | ) | |||
Cash and cash equivalents at beginning of period | 659.3 | 434.7 | |||||
Cash and cash equivalents at end of period | $ | 649.5 | $ | 404.2 |
Quarter Ended March 31, | |||||||
Dollar amounts in millions | 2017 | 2016 | |||||
Total stock-based compensation expense (costs of sales and general and administrative) | $ | 4.1 | $ | 3.0 | |||
Income tax provision related to stock-based compensation | $ | — | $ | 1.9 | |||
Impact on cash flow due to taxes paid related to net share settlement of equity awards | $ | 4.7 | $ | 0.9 |
Dollar and share amounts in millions, except per share amounts | Quarter Ended March 31, | ||||||
2017 | 2016 | ||||||
Numerator: | |||||||
Net income | $ | 55.0 | $ | 10.3 | |||
Denominator: | |||||||
Denominator for basic earnings per share: | |||||||
Weighted average common shares outstanding - basic | 144.2 | 142.9 | |||||
Effect of dilutive securities: | |||||||
Dilutive effect of stock warrants | — | 0.3 | |||||
Dilutive effect of employee stock plans | 1.7 | 2.0 | |||||
Dilutive potential common shares | 1.7 | 2.3 | |||||
Denominator for diluted earnings per share: | |||||||
Weighted average shares outstanding - diluted | 145.9 | 145.2 | |||||
Basic earnings per share: | |||||||
Net income per share - basic | $ | 0.38 | $ | 0.07 | |||
Diluted earnings per share: | |||||||
Net income per share - diluted | $ | 0.38 | $ | 0.07 |
Dollar amounts in millions | March 31, 2017 | December 31, 2016 | |||||
Trade receivables | $ | 137.4 | $ | 96.1 | |||
Income tax receivable | 2.2 | 1.7 | |||||
Other receivables | 10.5 | 11.5 | |||||
Allowance for doubtful accounts | (1.0 | ) | (1.0 | ) | |||
Total | $ | 149.1 | $ | 108.3 |
Dollar amounts in millions | March 31, 2017 | December 31, 2016 | |||||
Logs | $ | 76.0 | $ | 54.6 | |||
Other raw materials | 22.2 | 23.0 | |||||
Semi-finished inventory | 15.5 | 16.8 | |||||
Finished products | 146.3 | 140.2 | |||||
Total | $ | 260.0 | $ | 234.6 |
Quarter Ended March 31, | |||||||
Dollar amounts in millions | 2017 | 2016 | |||||
Net Sales | |||||||
OSB | $ | 268.4 | $ | 217.0 | |||
Siding | 214.0 | 181.3 | |||||
EWP | 82.1 | 71.8 | |||||
South America | 37.8 | 30.5 | |||||
Other | 8.7 | 6.1 | |||||
Intersegment Sales | (0.1 | ) | (2.1 | ) | |||
$ | 610.9 | $ | 504.6 | ||||
Operating profit (loss): | |||||||
OSB | $ | 60.4 | $ | 15.3 | |||
Siding | 40.2 | 26.9 | |||||
EWP | 0.6 | (2.5 | ) | ||||
South America | 5.1 | 5.1 | |||||
Other | (0.2 | ) | (0.4 | ) | |||
Other operating credits and charges, net | (3.4 | ) | — | ||||
Loss on sale or impairment of long-lived assets, net | (0.6 | ) | — | ||||
General corporate and other expenses, net | (28.3 | ) | (24.0 | ) | |||
Interest expense, net of capitalized interest | (5.0 | ) | (8.0 | ) | |||
Investment income | 2.0 | 1.8 | |||||
Other non-operating items | (0.3 | ) | 0.5 | ||||
Income from operations before taxes | 70.5 | 14.7 | |||||
Provision for income taxes | 15.5 | 4.4 | |||||
Net income | $ | 55.0 | $ | 10.3 |
Quarter Ended March 31, | |||||||
Dollar amounts in millions | 2017 | 2016 | |||||
Service cost | $ | 1.4 | $ | 1.2 | |||
Interest cost | 3.2 | 3.3 | |||||
Expected return on plan assets | (3.3 | ) | (3.3 | ) | |||
Amortization of prior service cost 1 | 0.2 | 0.1 | |||||
Amortization of net loss 1 | 1.4 | 1.4 | |||||
Net periodic pension cost | $ | 2.9 | $ | 2.7 |
Quarter Ended March 31, | |||||||
Dollar amounts in millions | 2017 | 2016 | |||||
Beginning balance | $ | 24.1 | $ | 21.0 | |||
Accrued to expense | 0.2 | 0.1 | |||||
Accrued to other operating credits and charges | 3.4 | — | |||||
Foreign currency translation | 0.2 | 0.6 | |||||
Payments made | (3.4 | ) | (3.6 | ) | |||
Total warranty reserves | 24.5 | 18.1 | |||||
Current portion of warranty reserves | (9.0 | ) | (6.0 | ) | |||
Long-term portion of warranty reserves | $ | 15.5 | $ | 12.1 |
Pension Adjustments | ||||||||||||||||||||||||
Dollar amounts in millions | Foreign currency translation adjustments | Actuarial losses | Prior service costs | Unrealized gain (loss) on investments | Other | Total | ||||||||||||||||||
Balance at December 31, 2016 | $ | (46.3 | ) | $ | (87.7 | ) | $ | (5.2 | ) | $ | 2.7 | $ | (0.7 | ) | $ | (137.2 | ) | |||||||
Other comprehensive income (loss) before reclassifications | 2.8 | (0.2 | ) | — | 0.5 | — | 3.1 | |||||||||||||||||
Income taxes | — | — | — | (0.2 | ) | — | (0.2 | ) | ||||||||||||||||
Net other comprehensive income (loss) before reclassifications | 2.8 | (0.2 | ) | — | 0.3 | — | 2.9 | |||||||||||||||||
Amounts reclassified from accumulated comprehensive income (loss) | — | 1.4 | 0.3 | — | — | 1.7 | ||||||||||||||||||
Income taxes | — | (0.5 | ) | (0.1 | ) | — | — | (0.6 | ) | |||||||||||||||
Net amounts reclassified from cumulative other comprehensive income (loss) | — | 0.9 | 0.2 | — | — | 1.1 | ||||||||||||||||||
Total other comprehensive income (loss) | 2.8 | 0.7 | 0.2 | 0.3 | — | 4.0 | ||||||||||||||||||
Balance at March 31, 2017 | $ | (43.5 | ) | $ | (87.0 | ) | $ | (5.0 | ) | $ | 3.0 | $ | (0.7 | ) | $ | (133.2 | ) |
Pension Adjustments | ||||||||||||||||||||||||
Dollar amounts in millions | Foreign currency translation adjustments | Actuarial losses | Prior service costs | Unrealized gain (loss) on investments | Other | Total | ||||||||||||||||||
Balance at December 31, 2015 | $ | (55.1 | ) | $ | (87.8 | ) | $ | (5.5 | ) | $ | 3.3 | $ | (1.0 | ) | $ | (146.1 | ) | |||||||
Net other comprehensive income (loss) before reclassifications | 6.1 | (0.8 | ) | — | — | — | 5.3 | |||||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | — | 1.4 | 0.1 | — | — | 1.5 | ||||||||||||||||||
Income taxes | — | (0.6 | ) | — | — | — | (0.6 | ) | ||||||||||||||||
Net amounts reclassified from cumulative other comprehensive income (loss) | — | 0.8 | 0.1 | — | — | 0.9 | ||||||||||||||||||
Total other comprehensive income (loss) | 6.1 | — | 0.1 | — | — | 6.2 | ||||||||||||||||||
Balance at March 31, 2016 | $ | (49.0 | ) | $ | (87.8 | ) | $ | (5.4 | ) | $ | 3.3 | $ | (1.0 | ) | $ | (139.9 | ) |
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations |
Three Months Ended March 31, 2017 (Dollar amounts in millions) | OSB | Siding | EWP | South America | Other | Corporate | Total | ||||||||||||||||||||
Net Sales | $ | 268.4 | $ | 214.0 | $ | 82.1 | $ | 37.8 | $ | 8.7 | $ | (0.1 | ) | $ | 610.9 | ||||||||||||
Depreciation and amortization | 14.7 | 8.1 | 3.8 | 2.2 | 0.9 | 0.9 | 30.6 | ||||||||||||||||||||
Cost of sales and selling and administrative | 193.3 | 165.7 | 78.8 | 30.5 | 8.0 | 27.3 | 503.6 | ||||||||||||||||||||
Loss on sale or impairment of long lived assets, net | — | — | — | — | — | 0.6 | 0.6 | ||||||||||||||||||||
Other operating credits and charges, net | — | — | — | — | — | 3.4 | 3.4 | ||||||||||||||||||||
Total operating costs | 208.0 | 173.8 | 82.6 | 32.7 | 8.9 | 32.2 | 538.2 | ||||||||||||||||||||
Income (loss) from operations | 60.4 | 40.2 | (0.5 | ) | 5.1 | (0.2 | ) | (32.3 | ) | 72.7 | |||||||||||||||||
Total non-operating expense | — | — | — | — | — | (3.3 | ) | (3.3 | ) | ||||||||||||||||||
Income (loss) before income taxes and equity in income of unconsolidated affiliates | 60.4 | 40.2 | (0.5 | ) | 5.1 | (0.2 | ) | (35.6 | ) | 69.4 | |||||||||||||||||
Income tax provision | — | — | — | — | — | 15.5 | 15.5 | ||||||||||||||||||||
Equity in income of unconsolidated affiliates | — | — | (1.1 | ) | — | — | — | (1.1 | ) | ||||||||||||||||||
Net income (loss) | $ | 60.4 | $ | 40.2 | $ | 0.6 | $ | 5.1 | $ | (0.2 | ) | $ | (51.1 | ) | $ | 55.0 | |||||||||||
Reconciliation of net income (loss) to Adjusted EBITDA | |||||||||||||||||||||||||||
Net income (loss) | $ | 60.4 | $ | 40.2 | $ | 0.6 | $ | 5.1 | $ | (0.2 | ) | $ | (51.1 | ) | $ | 55.0 | |||||||||||
Income tax provision | — | — | — | — | — | 15.5 | 15.5 | ||||||||||||||||||||
Interest expense, net of capitalized interest | — | — | — | — | — | 5.0 | 5.0 | ||||||||||||||||||||
Depreciation and amortization | 14.7 | 8.1 | 3.8 | 2.2 | 0.9 | 0.9 | 30.6 | ||||||||||||||||||||
EBITDA | 75.1 | 48.3 | 4.4 | 7.3 | 0.7 | (29.7 | ) | 106.1 | |||||||||||||||||||
Stock-based compensation expense | 0.2 | 0.2 | 0.1 | — | — | 3.6 | 4.1 | ||||||||||||||||||||
Loss on sale or impairment of long lived assets, net | — | — | — | — | — | 0.6 | 0.6 | ||||||||||||||||||||
Investment income | — | — | — | — | — | (2.0 | ) | (2.0 | ) | ||||||||||||||||||
Other operating credits and charges, net | — | — | — | — | — | 3.4 | 3.4 | ||||||||||||||||||||
Adjusted EBITDA | $ | 75.3 | $ | 48.5 | $ | 4.5 | $ | 7.3 | $ | 0.7 | $ | (24.1 | ) | $ | 112.2 |
Three Months Ended March 31, 2016 (Dollar amounts in millions) | OSB | Siding | EWP | South America | Other | Corporate | Total | ||||||||||||||||||||
Net Sales | $ | 217.0 | $ | 181.3 | $ | 71.8 | $ | 30.5 | $ | 6.1 | $ | (2.1 | ) | $ | 504.6 | ||||||||||||
Depreciation and amortization | 14.5 | 7.2 | 3.1 | 1.9 | 0.4 | 0.8 | 27.9 | ||||||||||||||||||||
Cost of sales and selling and administrative | 187.2 | 147.2 | 72.7 | 23.5 | 6.1 | 21.1 | 457.8 | ||||||||||||||||||||
Total operating costs | 201.7 | 154.4 | 75.8 | 25.4 | 6.5 | 21.9 | 485.7 | ||||||||||||||||||||
Income (loss) from operations | 15.3 | 26.9 | (4.0 | ) | 5.1 | (0.4 | ) | (24.0 | ) | 18.9 | |||||||||||||||||
Total non-operating expense | — | — | — | — | — | (5.7 | ) | (5.7 | ) | ||||||||||||||||||
Income (loss) before taxes and equity in income of unconsolidated affiliates | 15.3 | 26.9 | (4.0 | ) | 5.1 | (0.4 | ) | (29.7 | ) | 13.2 | |||||||||||||||||
Income tax provision | — | — | — | — | — | 4.4 | 4.4 | ||||||||||||||||||||
Equity in income of unconsolidated affiliates | — | — | (1.5 | ) | — | — | — | (1.5 | ) | ||||||||||||||||||
Net income (loss) | $ | 15.3 | $ | 26.9 | $ | (2.5 | ) | $ | 5.1 | $ | (0.4 | ) | $ | (34.1 | ) | $ | 10.3 | ||||||||||
Reconciliation of net income (loss) to Adjusted EBITDA | |||||||||||||||||||||||||||
Net income (loss) | $ | 15.3 | $ | 26.9 | $ | (2.5 | ) | $ | 5.1 | $ | (0.4 | ) | $ | (34.1 | ) | $ | 10.3 | ||||||||||
Income tax provision | — | — | — | — | — | 4.4 | 4.4 | ||||||||||||||||||||
Interest expense, net of capitalized interest | — | — | — | — | — | 8.0 | 8.0 | ||||||||||||||||||||
Depreciation and amortization | 14.5 | 7.2 | 3.1 | 1.9 | 0.4 | 0.8 | 27.9 | ||||||||||||||||||||
EBITDA | 29.8 | 34.1 | 0.6 | 7.0 | — | (20.9 | ) | 50.6 | |||||||||||||||||||
Stock-based compensation expense | 0.2 | 0.3 | 0.2 | — | — | 2.3 | 3.0 | ||||||||||||||||||||
Investment income | — | — | — | — | — | (1.8 | ) | (1.8 | ) | ||||||||||||||||||
Adjusted EBITDA | $ | 30.0 | $ | 34.4 | $ | 0.8 | $ | 7.0 | $ | — | $ | (20.4 | ) | $ | 51.8 |
Quarter Ended March 31, | ||||||||||
2017 | 2016 | Change | ||||||||
Net sales | $ | 268.4 | $ | 217.0 | 24 | % | ||||
Operating income | $ | 60.4 | $ | 15.3 | 295 | % | ||||
Adjusted EBITDA | $ | 75.3 | $ | 30.0 | 151 | % |
Quarter Ended March 31, 2017 versus 2016 | |||||
Average Net Selling Price | Unit Shipments | ||||
OSB | 25 | % | (1 | )% |
Quarter Ended March 31, | ||||||||||
2017 | 2016 | Change | ||||||||
Net sales | $ | 214.0 | $ | 181.3 | 18 | % | ||||
Operating income | $ | 40.2 | $ | 26.9 | 49 | % | ||||
Adjusted EBITDA | $ | 48.5 | $ | 34.4 | 41 | % |
Quarter Ended March 31, | ||||||||||
2017 | 2016 | Change | ||||||||
SmartSide siding | $ | 184.8 | $ | 159.0 | 16 | % | ||||
CanExel siding | 14.3 | 11.7 | 22 | % | ||||||
Commodity OSB | 12.4 | 9.6 | 29 | % | ||||||
Other | 2.5 | 1.0 | 150 | % | ||||||
Total | $ | 214.0 | $ | 181.3 | 18 | % |
Quarter Ended March 31, 2017 versus 2016 | |||||
Average Net Selling Price | Unit Shipments | ||||
SmartSide siding | 2 | % | 16 | % | |
CanExel siding | 6 | % | 16 | % | |
OSB | 26 | % | 1 | % |
Quarter Ended March 31, | ||||||||||
2017 | 2016 | Change | ||||||||
Net sales | $ | 82.1 | $ | 71.8 | 14 | % | ||||
Operating income (loss) | $ | 0.6 | $ | (2.5 | ) | NM | ||||
Adjusted EBITDA | $ | 4.5 | $ | 0.8 | 463 | % |
Quarter Ended March 31, | ||||||||||
2017 | 2016 | Change | ||||||||
LVL/LSL | $ | 43.6 | $ | 41.4 | 5 | % | ||||
I-Joist | 25.7 | 23.5 | 9 | % | ||||||
OSB | 4.0 | 2.7 | 48 | % | ||||||
Related products | 8.8 | 4.2 | 110 | % | ||||||
Total | $ | 82.1 | $ | 71.8 | 14 | % |
Quarter Ended March 31, 2017 versus 2016 | |||||
Average Net Selling Price | Unit Shipments | ||||
LVL/LSL | 2 | % | 2 | % | |
I-Joist | 1 | % | 11 | % | |
OSB | (2 | )% | 45 | % |
Quarter Ended March 31, | ||||||||||
2017 | 2016 | Change | ||||||||
Net sales | $ | 37.8 | $ | 30.5 | 24 | % | ||||
Operating income | $ | 5.1 | $ | 5.1 | — | % | ||||
Adjusted EBITDA | $ | 7.3 | $ | 7.0 | 4 | % |
Quarter Ended March 31, | ||||||||||
2017 | 2016 | Change | ||||||||
Chile | $ | 28.0 | $ | 22.2 | 26 | % | ||||
Brazil | 9.8 | 8.3 | 18 | % | ||||||
Total | $ | 37.8 | $ | 30.5 | 24 | % |
Quarter Ended March 31, 2017 versus 2016 | |||||
Average Net Selling Price | Unit Shipments | ||||
Chile | 4 | % | 23 | % | |
Brazil | 11 | % | 1 | % |
Quarter Ended March 31, | ||||||||||
2017 | 2016 | Change | ||||||||
Net sales | $ | 8.7 | $ | 6.1 | 43 | % | ||||
Operating losses | $ | (0.2 | ) | $ | (0.4 | ) | 50 | % | ||
Adjusted EBITDA | $ | 0.7 | $ | — | NM |
Quarter Ended March 31, | |||||||
Dollar amounts in millions | 2017 | 2016 | |||||
Investment income | $ | 1.7 | $ | 1.8 | |||
SERP market adjustments | 0.3 | — | |||||
Investment income | 2.0 | 1.8 | |||||
Interest expense | (5.2 | ) | (8.1 | ) | |||
Amortization of debt charges | (0.2 | ) | (0.3 | ) | |||
Capitalized interest | 0.4 | 0.4 | |||||
Interest expense, net of capitalized interest | (5.0 | ) | (8.0 | ) | |||
Foreign currency gain (loss) | (0.3 | ) | 0.5 | ||||
Total non-operating expense | $ | (3.3 | ) | $ | (5.7 | ) |
Quarter Ended March 31, | |||||||
Dollar amounts in millions | 2017 | 2016 | |||||
Foreign currency translation adjustments | $ | 2.8 | $ | 6.1 | |||
Unrealized gain (loss) on marketable securities | 0.3 | — | |||||
Defined benefit plans | 0.9 | 0.1 | |||||
Comprehensive income (loss) | $ | 4.0 | $ | 6.2 |
Item 3. | Quantitative and Qualitative Disclosures about Market Risk |
Quarter Ended | |||||
March 31, | |||||
2017 | 2016 | ||||
Oriented strand board, million square feet 3/8" basis | 1,055 | 1,052 | |||
Oriented strand board, million square feet 3/8" basis (produced by North America non-OSB segment mills) | 67 | 64 | |||
Wood-based siding, million square feet 3/8" basis | 350 | 331 | |||
Engineered I-Joist, million lineal feet (1) | 21 | 19 | |||
Laminated veneer lumber (LVL), thousand cubic feet and laminated strand lumber (LSL), thousand cubic feet (1) (2) | 2,754 | 2,529 |
OSB Western Canada 7/16" Basis | OSB Southwest 7/16" Basis | OSB N. Central 7/16" Basis | |||||||
Average | |||||||||
2016 1st Qtr. Avg. | $ | 191 | $ | 230 | $ | 226 | |||
2017 1st Qtr. Avg. | $ | 263 | $ | 308 | $ | 292 |
Source: | Random Lengths |
Item 1. | Legal Proceedings. |
Item 1A. | Risk Factors. |
Item 3. | Defaults Upon Senior Securities. |
Item 4. | Mine Safety Disclosures. |
Item 5. | Other Information. |
Item 6. | Exhibits. |
10.29 | Form of Award Agreement under the 2013 Omnibus Stock Plan for Restricted Stock Awards for Directors. |
31.1 | Certification of Chief Executive Officer Pursuant to Rule 13a-14(a). |
31.2 | Certification of Chief Financial Officer Pursuant to Rule 13a-14(a). |
32.1 | Certifications pursuant to § 906 of the Sarbanes-Oxley Act of 2002. |
100.INS | XBRL Instance Document |
100.SCH | XBRL Taxonomy Extension Schema Document |
100.CAL | XBRL Taxonomy Extension Calculation Linkbase Document |
100.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
100.LAB | XBRL Taxonomy Extension Label Linkbase Document |
100.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
LOUISIANA-PACIFIC CORPORATION | |||
Date: | May 5, 2017 | BY: | /S/ CURTIS M. STEVENS |
Curtis M. Stevens | |||
Chief Executive Officer | |||
Date: | May 5, 2017 | BY: | /S/ SALLIE B. BAILEY |
Sallie B. Bailey | |||
Executive Vice President and Chief Financial Officer | |||
(Principal Financial Officer) |
Award: | «Shares» Share units having a value equal to such number of Shares (“Restricted Stock Units”) |
1. | I have reviewed this report on Form 10-Q of Louisiana-Pacific Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | May 5, 2017 | /S/ CURTIS M. STEVENS |
CURTIS M. STEVENS | ||
Chief Executive Officer |
1. | I have reviewed this report on Form 10-Q of Louisiana-Pacific Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | May 5, 2017 | /S/ SALLIE B. BAILEY |
SALLIE B. BAILEY | ||
Chief Financial Officer |
Re: | Certification Pursuant to § 906 of the Sarbanes-Oxley Act of 2002 |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report. |
/S/ CURTIS M. STEVENS |
Name: CURTIS M. STEVENS Title: Chief Executive Officer |
/S/ SALLIE B. BAILEY |
Name: SALLIE B. BAILEY Title: Chief Financial Officer |
Document and Entity Information |
3 Months Ended |
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Mar. 31, 2017
shares
| |
Entity Information [Line Items] | |
Entity Registrant Name | LOUISIANA-PACIFIC CORP |
Entity Central Index Key | 0000060519 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Large Accelerated Filer |
Document Type | 10-Q |
Document Period End Date | Mar. 31, 2017 |
Document Fiscal Year Focus | 2017 |
Document Fiscal Period Focus | Q1 |
Amendment Flag | false |
Entity Common Stock, Shares Outstanding | 144,747,004 |
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Allowance for doubtful accounts | $ 1.0 | $ 1.0 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Net income | $ 55.0 | $ 10.3 |
Other comprehensive income (loss) | ||
Foreign currency translation adjustments | 2.8 | 6.1 |
Unrealized loss on investments, net of tax | 0.3 | 0.0 |
Defined benefit pension plans: | ||
Change benefit obligations, translation adjustment | (0.2) | (0.8) |
Amortization of amounts included in net periodic benefit cost, net of tax | 1.1 | 0.9 |
Other comprehensive income | 4.0 | 6.2 |
Comprehensive income | 59.0 | 16.5 |
Actuarial loss, net of tax | ||
Defined benefit pension plans: | ||
Amortization of amounts included in net periodic benefit cost, net of tax | 0.9 | 0.8 |
Other comprehensive income | 0.7 | 0.0 |
Prior service cost, net of tax | ||
Defined benefit pension plans: | ||
Amortization of amounts included in net periodic benefit cost, net of tax | 0.2 | 0.1 |
Other comprehensive income | $ 0.2 | $ 0.1 |
Basis For Presentation |
3 Months Ended |
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Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis for Presentation | BASIS FOR PRESENTATION The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, in the opinion of management, include all adjustments (consisting of normal recurring adjustments) necessary to present fairly, in all material respects, the consolidated financial position, results of operations and cash flows of LP and its subsidiaries for the interim periods presented. Results of operations for interim periods are not necessarily indicative of results to be expected for an entire year. These consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in LP’s Annual Report on Form 10-K for the year ended December 31, 2016. |
Stock-Based Compensation |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | STOCK-BASED COMPENSATION LP has a Management Incentive Plan (MIP) that is administered by the Compensation Committee of the Board of Directors. The Compensation Committee authorizes the grants of restricted stock (shares or units), performance share awards payable in stock based upon the attainment of specified performance goals, stock settled stock appreciation rights (SSARs), other stock-based awards and cash-based awards at the discretion of the Compensation Committee. A detailed discussion of this is included in Note 14 to the consolidated financial statements included in LP's Annual Report on Form 10-K for the fiscal year ended December 31, 2016. As of March 31, 2017, 2.7 million shares were available for grant under the 2013 Omnibus Plan.
At March 31, 2017, $15.9 million of compensation cost related to unvested performance shares, restricted stock and SSARs attributable to future service had not yet been recognized. Grants of awards During the first three months of 2017, the Company granted 121,724 performance units at an average grant date fair value of $24.87 per share, 277,931 SSARs at an average grant date fair value of $8.02 per share and 295,702 restricted stock awards (shares or units) at an average grant date fair value of $19.15 per share. |
Fair Value Measurements |
3 Months Ended |
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Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures [Text Block] | FAIR VALUE MEASUREMENTS LP estimated its Senior Notes due in 2024 to have a fair value of $352.6 million at March 31, 2017 and $344.3 million at December 31, 2016 based upon market quotations. 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. |
Earnings per Share |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per Share | EARNINGS PER SHARE Basic earnings per share are based on the weighted-average number of shares of common stock outstanding. Diluted earnings per share are 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. LP's potentially dilutive securities consist of restricted stock, restricted stock units, performance share awards, and SSARs.
For the quarter ended March 31, 2017 and 2016, restricted stock (shares or units), performance share awards, SSARs and warrants relating to approximately 0.6 million and 2.6 million shares of LP common stock were considered not in-the-money for purposes of LP's earnings per share calculation. |
Receivables |
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables | RECEIVABLES Receivables consist of the following:
Other receivables at March 31, 2017 and December 31, 2016 primarily consist of sales tax receivables, vendor rebates, interest receivables, a receivable associated with an affiliate and other miscellaneous receivables. |
Inventories |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | 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 are as follows (work in process is not material):
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Income Taxes |
3 Months Ended |
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Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Accounting standards state that companies account for income taxes using the asset and liability approach, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities. This method also requires the recognition of future tax benefits, such as net operating loss carryforwards and other tax credits. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse. Valuation allowances are recorded as necessary to reduce deferred tax assets to the amount thereof that is more likely than not to be realized. The likelihood of realizing deferred tax assets is evaluated by, among other things, estimating future taxable income, considering the future reversal of existing deferred tax liabilities to which the deferred tax assets may be applied and assessing the impact of tax planning strategies. For interim periods, accounting standards require that income tax expense be determined 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. An exception is provided for situations in which an enterprise anticipates a loss in a separate jurisdiction for which no tax benefit can be recognized. 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 to the current quarter. Changes in the profitability estimates in various jurisdictions will impact our quarterly effective income tax rates. For the first three months of 2017, the primary differences between the U.S. statutory rate of 35% and the effective rate applicable to LP’s income relate to foreign tax rates, changes in Canadian valuation allowances, and recognition of research and development tax credits from prior years. For the first three months of 2016, the primary differences between the U.S. statutory rate of 35% and the effective rate applicable to LP’s continuing operations relate to foreign tax rates, changes in Canadian valuation allowances and a charge for excess tax deficiencies in connection with LP's stock-based compensation plans. LP periodically reviews the need for valuation allowances against deferred tax assets and recognizes these deferred tax assets to the extent that the realization is more likely than not. As part of our review, we consider all positive and negative evidence, including earnings history, the future reversal of deferred tax liabilities, and the relevant expirations of carryforwards. LP believes that the valuation allowances provided are appropriate. If in future periods our earnings estimates differ from the estimates used to establish these valuation allowances, or other objective positive or negative evidence arises, LP may be required to record an adjustment resulting in an impact on tax expense (benefit) for that period. |
Other Operating Credits and Charges, Net |
3 Months Ended |
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Mar. 31, 2017 | |
Other Operating Credits And Charges, Net [Abstract] | |
Other Operating Credits and Charges Net [Table Text Block] | OTHER OPERATING CREDITS AND CHARGES During the first quarter of 2017, LP recorded an expense of $3.4 million related to an increase in product related warranty reserves associated with CanExel products sold in specific geographic locations and for a specific time period. |
Legal and Environmental Matters |
3 Months Ended |
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Mar. 31, 2017 | |
Legal and Environmental Matters [Abstract] | |
Legal and Environmental Matters | LEGAL AND ENVIRONMENTAL MATTERS Certain environmental matters and legal proceedings are discussed below. Environmental Matters LP maintains 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. LP’s estimates of its environmental loss contingencies are based on various assumptions and judgments, the specific nature of which varies in light of 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 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. LP regularly monitors its estimated exposure to environmental loss contingencies and, as additional information becomes known, may change its estimates significantly. However, no estimate of the range of any such change can be made at this time. Other Proceedings LP and its subsidiaries are parties to other legal proceedings. Based on the information currently available, management believes that the resolution of such proceedings will not have a material adverse effect on the financial position, results of operations, cash flows or liquidity of LP. |
Selected Segment Data |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Selected Segment Data | SELECTED SEGMENT DATA LP operates in four segments: North America Oriented Strand Board (OSB), Siding, Engineered Wood Products (EWP) and South America. LP’s business units have been aggregated into these four segments based upon the similarity of economic characteristics, customers and distribution methods. LP’s 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. Segment information was prepared in accordance with the same accounting principles as those described in Note 1 of the Notes to the financial statements included in LP’s Annual Report on Form 10-K for the year ended December 31, 2016.
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Potential Impairments |
3 Months Ended |
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Mar. 31, 2017 | |
Asset Impairment Charges [Abstract] | |
Potential Impairments | POTENTIAL IMPAIRMENTS LP continues to review certain operations and investments for potential impairments. LP’s management currently believes it has adequate support for the carrying value of each of these operations and investments based upon the anticipated cash flows that result from estimates of future demand, pricing and production costs assuming certain levels of planned capital expenditures. LP also reviews from time to time possible dispositions of various assets in light of current and anticipated economic and industry conditions, its strategic plan and other relevant circumstances. 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, LP may be required to record impairment charges in connection with decisions to dispose of assets. |
Defined Benefit Pension Plans |
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Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation and Employee Benefit Plans | DEFINED BENEFIT PENSION PLANS The following table sets forth the net periodic pension cost for LP’s defined benefit pension plans during the quarter ended March 31, 2017 and 2016. The net periodic pension cost included the following components:
1The amortization of prior service costs and net loss are included in the amounts reclassified from accumulated other comprehensive income (loss); see Note 13 for additional details. The net periodic pension cost is included in Cost of sales and Selling and administrative expense in the Consolidated Statements of Income. During the three months ended March 31, 2017, LP made $1.5 million in pension contributions to its defined benefit pension plans. LP expects to contribute between $7.0 million and $9.0 million to its defined benefit pension plans in the remaining months of 2017. |
Product Warranty |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Guarantees and Indemnifications | LP provides warranties on the sale of most of its products and records 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 quarter ended March 31, 2017 and 2016 are summarized in the following table:
LP continues to monitor warranty and other claims associated with these products and believes as of March 31, 2017 that the reserves associated with these matters are adequate. However, it is possible that additional charges may be required in the future. The current portion of the warranty reserve is included in the caption “Accounts payable and accrued liabilities” and the long-term portion is included in the caption “Other long-term liabilities” on LP’s Consolidated Balance Sheets. |
Other Comprehensive Income Other Comprehensive Income |
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Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive Income (Loss) Note [Text Block] | NOTE 14 - OTHER COMPREHENSIVE INCOME Other comprehensive income activity, net of tax, is provided in the following table for the quarter ended March 31, 2017:
Other comprehensive income activity, net of tax, is provided in the following table for the quarter ended March 31, 2016:
The amounts reclassified from accumulated other comprehensive income (loss) are included in the computation of net periodic pension cost; see Note 11 for additional details. The net periodic pension cost is included in Cost of sales and Selling and administrative expense in the Consolidated Statements of Income. |
Recent and Prospective Accounting Pronouncements (Notes) |
3 Months Ended |
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Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
New Accounting Pronouncements, Policy [Policy Text Block] | RECENT AND PROSPECTIVE ACCOUNTING PRONOUNCEMENTS In January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other (Topic 350). The standard simplifies the accounting for goodwill impairments by eliminating step 2 from the goodwill impairment test. Instead, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The new standard is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. LP does not expect the adoption of this new standard to have a material impact on its consolidated results of operations and financial position. In March 2017, the FASB issued ASU 2017-07, Compensation—Retirement Benefits (Topic 715). The standard amends the requirements in ASC 715 related to the income statement presentation of the components of net periodic benefit cost for an entity's sponsored defined benefit pension and other postretirement plans. The new standard is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. LP does not expect the adoption of this new standard to have a material impact on its consolidated results of operations and financial position as only the presentation of the income statement will be affected. |
Stock-Based Compensation (Tables) |
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] |
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Earnings per Share (Tables) (Tables) |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | Basic earnings per share are based on the weighted-average number of shares of common stock outstanding. Diluted earnings per share are 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. LP's potentially dilutive securities consist of restricted stock, restricted stock units, performance share awards, and SSARs.
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Receivables (Tables) |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | Receivables consist of the following:
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Inventories (Tables) |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventory, Current [Table Text Block] | The major types of inventories are as follows (work in process is not material):
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Selected Segment Data (Tables) |
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Schedule of Segment Reporting Information, by Segment [Table Text Block] |
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Defined Benefit Pension Plans (Tables) |
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Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Defined Benefit Plans Disclosures [Table Text Block] | The net periodic pension cost included the following components:
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Product Warranty (Tables) |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Product Warranty Liability [Table Text Block] | The activity in warranty reserves for the quarter ended March 31, 2017 and 2016 are summarized in the following table:
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Other Comprehensive Income Other Comprehensive Income (Tables) |
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Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] |
Other comprehensive income activity, net of tax, is provided in the following table for the quarter ended March 31, 2016:
|
Stock-Based Compensation (Details) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation expense (costs of sales and general and administrative) | $ 4,100,000 | $ 3,000,000 |
Income tax benefit related to stock-based compensation | 0 | (1,900,000) |
Impact on cash flow due to taxes paid related to net share settlement of equity awards | $ 4,700,000 | $ 900,000 |
Fair Value Measurements (Details) - USD ($) $ in Millions |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Senior unsecured notes, maturing 2024 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Notes Payable, Fair Value Disclosure | $ 352.6 | $ 344.3 |
Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Net income | $ 55.0 | $ 10.3 |
Weighted average common shares outstanding - basic | 144.2 | 142.9 |
Dilutive effect of stock warrants | 0.0 | 0.3 |
Dilutive effect of employee stock plans | 1.7 | 2.0 |
Dilutive potential common shares | 1.7 | 2.3 |
Weighted average shares outstanding - diluted | 145.9 | 145.2 |
Net income per share of common stock: | ||
Net income per share - basic | $ 0.38 | $ 0.07 |
Net income per share - diluted | $ 0.38 | $ 0.07 |
Earnings per Share Narrative (Details) - shares shares in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0.6 | 2.6 |
Receivables (Details) - USD ($) $ in Millions |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Receivables [Abstract] | ||
Trade receivables | $ 137.4 | $ 96.1 |
Income tax receivable | 2.2 | 1.7 |
Other receivables | 10.5 | 11.5 |
Allowance for doubtful accounts | (1.0) | (1.0) |
Total | $ 149.1 | $ 108.3 |
Inventories (Details) - USD ($) $ in Millions |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Logs | $ 76.0 | $ 54.6 |
Other raw materials | 22.2 | 23.0 |
Semi-finished inventory | 15.5 | 16.8 |
Finished products | 146.3 | 140.2 |
Total | $ 260.0 | $ 234.6 |
Income Taxes (Details) |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate | 35.00% | 35.00% |
Other Operating Credits and Charges, Net (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Other Operating Credits And Charges, Net [Abstract] | ||
Standard and Extended Product Warranty Accrual, Period Increase (Decrease) | $ 3.4 | $ 0.0 |
Other operating credits and charges, net | $ 3.4 | $ 0.0 |
Defined Benefit Pension Plans (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract] | ||
Service cost | $ 1.4 | $ 1.2 |
Interest cost | 3.2 | 3.3 |
Expected return on plan assets | (3.3) | (3.3) |
Amortization of prior service cost 1 | 0.2 | 0.1 |
Amortization of net loss 1 | 1.4 | 1.4 |
Net periodic pension cost | 2.9 | 2.7 |
Pension Expense | 2.9 | $ 2.7 |
Pension Contributions | 1.5 | |
Minimum [Member] | ||
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract] | ||
Defined Benefit Plans, Estimated Future Employer Contributions in Current Fiscal Year | 7.0 | |
Maximum [Member] | ||
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract] | ||
Defined Benefit Plans, Estimated Future Employer Contributions in Current Fiscal Year | $ 9.0 |
Product Warranty (Details) - USD ($) $ in Millions |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) [Roll Forward] | ||||
Beginning Balance | $ 24.1 | $ 21.0 | ||
Accrued to expense | 0.2 | 0.1 | ||
Accrued to other operating credits and charges | 3.4 | 0.0 | ||
Foreign currency translation | 0.2 | 0.6 | ||
Payments made | (3.4) | (3.6) | ||
Total warranty reserves | $ 24.1 | $ 21.0 | $ 24.5 | $ 18.1 |
Current portion of warranty reserves | (9.0) | (6.0) | ||
Long-term portion of warranty reserves | $ 15.5 | $ 12.1 |
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