Revenue (Notes)

3 Months Ended

Mar. 31, 2024

Disaggregation of Revenue [Abstract]

Revenue from Contract with Customer [Text Block]

REVENUE

We disaggregate revenue from contracts with customers into major product lines. We have determined that disaggregating revenue into these categories depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors.

As noted in the segment reporting information in “Note 14 - Selected Segment Data” below, our reportable segments are Siding, Oriented Strand Board (OSB), and LP South America (LPSA). The following tables present our reportable segment revenues, disaggregated by revenue source (dollar amounts in millions):

	Three Months Ended March 31, 2024
By product type and family:	Siding		OSB		LPSA		Other		Total
Value-add
Siding Solutions	$	359	$	—	$	7	$	—	$	366
OSB - Structural Solutions	—		174		38		—		213
	359		174		46		—		579
Commodity
OSB - commodity	—		134		—		—		134
Other
Other products	2		5		2		3		12
	$	361	$	313	$	47	$	3	$	724

	Three Months Ended March 31, 2023
By product type and family:	Siding		OSB		LPSA		Other		Total
Value-add
Siding Solutions	$	329	$	—	$	8	$	—	$	337
OSB - Structural Solutions	—		104		46		—		150
	329		104		54		—		487
Commodity
OSB - commodity	—		83		—		—		83
Other
Other products	2		2		1		8		14
	$	331	$	189	$	55	$	8	$	584

Revenue is recognized when obligations under the terms of a contract (e.g., purchase orders) with our customers are satisfied; generally, this occurs with the transfer of control of our products at a point in time. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods. The shipping cost incurred by us to deliver products to our customers is recorded in cost of sales. The expected costs associated with our warranties continue to be recognized as an expense when the products are sold.

Our businesses routinely incur customer program costs to obtain favorable product placement, promote sales of products, and maintain competitive pricing. Customer program costs and incentives, including rebates and promotion and volume allowances, are accounted for as a reduction in net sales at the time the program is initiated and/or the revenue is recognized. The costs include, but are not limited to, volume allowances and rebates, promotional allowances, and cooperative advertising programs. These costs are recorded at the later of (i) the time of sale or (ii) the implementation of the program based on management’s best estimates. Estimates are based on historical and projected experience for each type of program or customer. Volume allowances are accrued based on our estimates of customer volume achievement and other factors incorporated into customer agreements, such as new product purchases, store sell-through, merchandising support, and customer training. Management adjusts accruals when circumstances indicate (typically as a result of a change in volume expectations).

We ship some of our products to customers’ distribution centers on a consignment basis. We retain title to our products stored at the distribution centers. As our products are removed from the distribution centers by retailers and

shipped to retailers’ stores, title passes from us to the retailers. At that time, we invoice the retailers and recognize revenue for these consignment transactions. We do not offer a right of return for products shipped to the retailers’ stores from the distribution centers.