Company: LPX
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0000060519-25-000005
Chunk: 76

Company: LOUISIANA-PACIFIC CORP
Filing Date: 2025-02-19
Form: 10-K
Item: Item 8
Chunk 76
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 transaction between market participants on the measurement date. The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. We are required to classify these financial assets and liabilities into two groups: (1) recurring, measured on a periodic basis, and (2) non-recurring, measured on an as-needed basis.There are three levels of inputs that may be used to measure fair value:Level 1    Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.Level 2    Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets; or valuations based on models where the significant inputs are observable or can be corroborated by observable market data.Level 3    Valuations based on models where significant inputs are not observable. Unobservable inputs are used when little or no market data is available and reflect the Company’s own assumptions about the assumptions market participants would use.The Company's financial instruments consist of cash and cash equivalents, short-term receivables, trade payables, debt instruments, and trading securities. Carrying amounts reported on the balance sheet for cash and cash equivalents, receivables, and accounts payable approximate fair value due to the short-term maturity of these instruments. See "Note 10 - Long Term Debt" below for further information regarding the fair value of long-term debt instruments.Trading securities consist of rabbi trust financial assets, which are recorded in other assets in our Consolidated Balance Sheets. The rabbi trust holds assets attributable to the elections of certain management employees to defer the receipt of a portion of their compensation. The assets of the rabbi trust are invested in mutual funds and are reported at fair value based on active market quotations, which represent Level 1 inputs.InventoriesInventories are valued at the lower of cost or net realizable value. Inventory costs include materials, labor, and operating overhead. The FIFO (first-in, first-out) or average cost methods are used to value our inventories as of December 31, 2024. Inventories include a lower of cost or market adjustment of $9 million and $7 million as of December 31, 2024, and 2023, respectively. Inventory consisted of the following (dollars in millions): December 31,20242023Logs$64 $81 Other raw materials41 53 Semi-finished inventory33 27