UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-K

Annual Report Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934



|                                            |  |                              
|------------------------------------------- |  | -----------------------------
|For the fiscal year ended December 31, 2010 |  | Commission File Number 1-7107





Louisiana-Pacific Corporation

(Exact name of registrant as specified in its charter)



|                                                 |  |                                                    
|------------------------------------------------ |  | ---------------------------------------------------
|Delaware                                         |  | 93-0609074                                         
|(State of Incorporation)                         |  | (I.R.S. Employer Identification No.)               
|                                                 | 
|414 Union Street, Suite 2000 Nashville, TN 37219 |  | 615-986-5600                                       
|(Address of principal executive offices)         |  | Registrants telephone number
(including area code)

Securities registered pursuant to Section 12(b) of the Act:



|                                |  |                                          
|------------------------------- |  | -----------------------------------------
|Title of Each Class             |  | Name of Each Exchange on Which Registered
|Common Stock, $1 par value      |  | New York Stock Exchange                  
|Preferred Stock Purchase Rights |  | New York Stock Exchange                  

Securities registered pursuant to Section 12(g) of the Act: None





Indicate by check mark if the registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities
Act.    Yes  x    No   ̈

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act.    Yes   ̈    No  x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days.    Yes  x    No   ̈

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and
will not be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.   ̈

Indicate by check mark if the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of accelerated filer, large accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act (Check one):

Large accelerated
filer  x          Accelerated
filer   ̈          Non-accelerated
filer   ̈          Smaller reporting company   ̈

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act):    Yes   ̈    No  x

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at
which the common equity was sold, or the average bid and asked price of such common equity, as of the last business day of the registrants most recently completed second fiscal quarter: $848,725,000

Indicate the number of shares outstanding of each of the registrants classes of common stock as of the latest practicable date:
132,145,701 shares of Common Stock, $1 par value, outstanding as of February 28, 2011.

Documents Incorporated by Reference

Definitive Proxy Statement for 2011 Annual Meeting: Part III

Except as otherwise specified and unless the context otherwise requires, references to LP, the Company, we, us, and our refer to
Louisiana-Pacific Corporation and its subsidiaries.









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ABOUT FORWARD-LOOKING STATEMENTS

Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 provide a safe
harbor for forward-looking statements to encourage companies to provide prospective information about their businesses and other matters as long as those statements are identified as forward-looking and are accompanied by meaningful cautionary
statements identifying important factors that could cause actual results to differ materially from those discussed in the statements. This report contains, and other reports and documents filed by us with the Securities and Exchange Commission may
contain, forward-looking statements. These statements are or will be based upon the beliefs and assumptions of, and on information available to, our management.

The following statements are or may constitute forward-looking statements: (1) statements preceded by, followed by or that include words like may, will, could,
should, believe, expect, anticipate, intend, plan, estimate, potential, continue or future or the negative or other variations
thereof and (2) other statements regarding matters that are not historical facts, including without limitation, plans for product development, forecasts of future costs and expenditures, possible outcomes of legal proceedings, capacity
expansion and other growth initiatives and the adequacy of reserves for loss contingencies.

Factors that could cause actual
results to differ materially from those expressed or implied by the forward-looking statements include, but are not limited to the following:



| |  |  | changes in general economic conditions;
| | - |  | ---------------------------------------



| |  |  | changes in the cost and availability of capital;
| | - |  | ------------------------------------------------



| |  |  | changes in the level of home construction 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;
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| |  |  | changes in the cost of and availability of energy, primarily natural gas, electricity and diesel fuel;
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| |  |  | changes in other significant operating expenses;
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| |  |  | changes in exchange rates between the U.S. dollar and other currencies, particularly the Canadian dollar, Australian dollar, EURO, Brazilian realand the 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.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------

In addition to the foregoing and any risks and uncertainties specifically identified in the text
surrounding forward-looking statements, any statements in the reports and other documents filed by us with the Commission that warn of risks or uncertainties associated with future results, events or circumstances identify important factors that
could cause actual results, events and circumstances to differ materially from those reflected in the forward-looking statements.

ABOUT THIRD-PARTY INFORMATION

In this report, we rely on and refer to
information regarding industry data obtained from market research, publicly available information, industry publications, U.S. government sources and other third parties. Although we believe the information is reliable, we cannot guarantee the
accuracy or completeness of the information and have not independently verified it.



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PART I



|ITEM 1. | Business
|------- | --------

General

Our company, founded in 1973 and headquartered in Nashville, Tennessee, is a leading manufacturer of building products. As
of December 31, 2010, we had approximately 3,800 employees. We currently own 21 modern, strategically located facilities in the U.S. and Canada. We also own two facilities in Chile and a 75% ownership interest in a Brazilian facility. We also
operate three facilities through joint ventures, for which we are the exclusive provider of product distribution for North America. Additionally, we participate in a joint venture operation that produces cellulose insulation. Our focus is on
delivering innovative, high-quality commodity and specialty building products to retail, wholesale, home building and industrial customers. Our products are used primarily in new home construction, repair and remodeling, and manufactured housing.

Business Segments

We operate in three segments: Oriented Strand Board (OSB); Siding; and Engineered Wood Products (EWP). In general, our businesses are affected by the level of housing starts; the level of home repairs;
the availability and cost of financing; changes in industry capacity; changes in the prices we pay for raw materials and energy; changes in foreign exchange rates (primarily the Canadian dollar); and other operating costs.

OSB

Our OSB segment
manufactures and distributes OSB structural panel products.

OSB is an innovative, affordable and environmentally smart
product made from wood strands arranged in layers and bonded with resin. OSB serves many of the same uses as plywood, including roof decking, sidewall sheathing and floor underlayment, but can be produced at a significantly lower cost. In the past
decade, land use regulations, endangered species and environmental concerns have resulted in reduced supplies and higher costs for domestic timber, causing many plywood mills to close or divert their production to other uses. OSB has replaced most
of the volume lost from these mills. It is estimated for 2010 that OSB accounted for approximately 58% of the structural panel consumption in North America with plywood accounting for the remainder. We estimate that the overall North American
structural panel market (based upon 2010 housing starts) was 26.9 billion square feet with the OSB market comprising an estimated 15.5 billion square feet of this market. Based upon our production in 2010 of 3.0 billion square feet (including our
joint venture OSB mill with Canfor Corporation), we estimate that we account for 19% of the North American OSB market and 11% of the overall North American structural panel market. We believe we have the largest installed capacity and are one of the
most efficient producers of OSB in North America.

Siding

Our siding offerings fall into two categories: SmartSide® siding products and related accessories; and Canexel siding and accessory products. Our SmartSide® products consist of a full line of wood-based sidings, trim, soffit and fascia. These products have quality and performance characteristics similar to solid wood at
more attractive prices due to lower raw material and production costs. Our Canexel siding and accessory product offerings include a number of mainly pre-finished lap, panel and trim products in a variety of patterns and textures.

Additionally, as market demand warrants, amounts of commodity OSB are produced and sold in this segment.



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Engineered Wood Products

Our Engineered Wood Products (EWP) segment manufactures and distributes laminated veneer lumber (LVL), I-Joists, laminated strand lumber (LSL) (which began production in the first half of 2008) and other
related products. This segment also includes the sale of I-Joist and LVL products produced by our joint venture with AbitibiBowater or under a contract manufacturing arrangement. We believe that in North America we are one of the top three producers
(including our joint venture production) of I-Joists, LVL and LSL. A plywood mill associated with our LVL operations in British Columbia is also included in this segment.

We believe that our engineered I-joists, which are used primarily in residential and commercial flooring and roofing systems and other structural applications, are stronger, lighter and straighter than
conventional lumber joists. Our LVL and LSL are high-grade, value-added structural products used in applications where extra strength and quality is required, such as headers and beams. It is also used, together with OSB and lumber, in the
manufacture of engineered I-joists.

Other Products

Our other products category includes our decorative moulding, Chile and Brazil operations and our joint venture that produces cellulose insulation. Additionally, our other products category includes our
remaining timber and timberlands, and other minor products, services and closed operations.

Sales, Marketing and Distribution

Our sales and marketing efforts are primarily focused on traditional two-step distribution, professional building products
dealers, home centers, third-party wholesale buying groups and other retailers. The wholesale distribution channel includes a variety of specialized and broad-line wholesale distributors and dealers focused primarily on the supply of products for
use by professional builders and contractors. The retail distribution channel includes large retail chains catering to the do-it-yourself (DIY) and repair and remodeling markets as well as smaller independent retailers.

Customers

We seek to
maintain a broad customer base and a balanced approach to national distribution through both wholesale and retail channels. In 2010, our top 10 customers accounted for approximately 49% of our sales, with our largest customer, Taiga Buildings
Products, Ltd. accounting for 11% of our sales. Because a significant portion of our sales are from OSB, a commodity product sold primarily on the basis of price and availability, we are not dependent on any one customer. Our principal customers
include the following:



| |  |  | Wholesale distribution companies, which supply building materials to retailers on a regional, state or local basis;
| | - |  | -------------------------------------------------------------------------------------------------------------------



| |  |  | Two-step distributors, who provide building materials to smaller retailers, contractors and others;
| | - |  | ---------------------------------------------------------------------------------------------------



| |  |  | Building materials professional dealers, that specialize in sales to professional builders, remodeling firms and trade contractors that are involved in
residential home construction and light commercial building;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Retail home centers, that provide access to consumer markets with a broad selection of home improvement materials and increasingly serve professional
builders, remodelers and trade contractors; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Manufactured housing and shed producers, who design, construct and distribute prefabricated residential and light commercial structures, including
fully manufactured, modular and panelized structures, for consumer and professional markets.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Seasonality

Our business is subject to seasonal variances, with demand for many of our products tending to be greater during the building season, which generally occurs in the second and third quarters. From time to
time, we engage in promotional activities designed to stimulate demand for our products, such as reducing our selling prices and providing extended payment terms, particularly at times when demand is otherwise relatively soft. We do this in an
effort to better balance our inventory levels with demand, manage the logistics of our product shipments, allow our production facilities to run efficiently, be competitive, and/or obtain initial orders from customers.

Competitors / Competition

The building products industry is highly competitive. We compete internationally with several thousand forest and building products firms,
ranging from very large, fully integrated firms to smaller enterprises that may manufacture only one or a few items. We also compete less directly with firms that manufacture substitutes for wood building products. Some competitors have
substantially greater financial and other resources than we do that could, in some instances, give them a competitive advantage over us.

In terms of our commodity OSB, we compete based upon price, quality and availability of products. In terms of our specialty products, including EWP, siding and various value added OSB products, we compete
based upon price, quality, and availability of products as well as features offered.

Raw Materials

Wood fiber is the primary raw material used in most of our operations, and the primary source of wood fiber is timber. The primary
end-markets for timber harvested in the U.S. are manufacturers who supply: (1) the housing market, where it is used in the construction of new housing and the repair and remodeling of existing housing; (2) the pulp and paper market;
(3) commercial and industrial markets; (4) export markets; and (5) emerging biomass energy production markets. The supply of timber is limited by access to timber and by the availability of timberlands. The availability of
timberlands, in turn, is limited by several factors, including forest management policies, alternate uses of land, and loss to urban or suburban real estate development.

In Canada, we harvest enough timber annually under long-term harvest rights with various Canadian governments and other third parties to support our Canadian production facilities. The weighted average
remaining life of our Canadian timber rights is 13.3 years, without taking into account provisions for renewal.

We purchase
approximately 73% of our wood fiber requirements on the open market, through either private cutting contracts or purchased wood arrangements. Our remaining wood fiber requirements (27%) are fulfilled through government contracts, principally in
Canada. Because wood fiber is subject to commodity pricing, the cost of various types of timber that we purchase in the market has at times fluctuated greatly due to weather, governmental, economic or other industry conditions. However, our mills
are generally located in areas that are in close proximity to large and diverse supplies of timber. Our mills generally have the ability to procure wood fiber at competitive prices from third-party sources.

In addition to wood fiber, we use a significant quantity of various resins in our manufacturing processes. Resin product costs are
influenced by changes in the prices of raw materials used to produce resin, primarily petroleum products, as well as competing demand for resin products. Currently, we purchase the majority of our resin from three major suppliers and believe our
relationships with those suppliers to be good. However there can be no assurance that pricing or availability of resins will not be impacted based upon competing demand.

While the majority of our energy requirements are generated at our plants through the conversion of wood waste, we also purchase substantial amounts of energy in our operations, primarily electricity and
natural gas. Energy prices have experienced significant volatility in recent years, particularly in deregulated markets. We attempt to mitigate our exposure to energy price changes through the selective use of long-term supply agreements.



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Environmental Compliance

Our operations are subject to many environmental laws and regulations governing, among other things, discharges of pollutants and other emissions on or into land, water and air, the disposal of hazardous
substances or other contaminants, the remediation of contamination and the restoration and reforestation of timberlands. In addition, certain environmental laws and regulations impose liability and responsibility on present and former owners,
operators or users of facilities and sites for contamination at such facilities and sites without regard to causation or knowledge of contamination. Compliance with environmental laws and regulations can significantly increase the costs of our
operations and otherwise result in significant costs and expenses. In some cases, plant closures can result in more onerous compliance requirements becoming applicable to a facility or a site. Violations of environmental laws and regulations can
subject us to additional costs and expenses, including defense costs and expenses and civil and criminal penalties. We cannot assure you that the environmental laws and regulations to which we are subject will not become more stringent, or be more
stringently implemented or enforced, in the future.

Our policy is to comply fully with all applicable environmental laws and
regulations. We devote significant management attention to achieving full compliance. In addition, from time to time, we undertake construction projects for environmental control equipment or incur other environmental costs that extend an
assets useful life, improve its efficiency or improve the marketability of certain properties.

Additional information
concerning environmental matters is set forth under item 3, Legal Proceedings, and in Note 18 of the Notes to the financial statements included in item 8 of this report.

Employees

We employ approximately 3,800 people, about 1,000 of whom are
members of unions, primarily in Canada. We consider our relationship with our employees generally to be good. As of December 31, 2010, we were operating on expired collective bargaining agreements at three facilities in Canada. While we do not
currently anticipate any work stoppage, there can be no assurance that work stoppages will not occur.

Available Information

We file annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements and
other information with the Securities and Exchange Commission (SEC). Our SEC filings are available to the public over the Internet at the SECs website at http://www.sec.gov. You may also read and copy any document we file at
the SECs public reference room at 100 F Street, NE., Washington, D.C. 20549. You may obtain information on the operation of the SECs public reference room in Washington, D.C. by calling the SEC at 1-800-SEC-0330.

In addition, we will make available our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on
Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act through our internet website at http://www.lpcorp.com as soon as reasonably practicable after we electronically file
such material with, or furnish it to, the SEC.



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Segment and Price Trend Data

The following table sets forth, for each of the last three years: (1) our production volumes; (2) the estimated average wholesale price of OSB sold in the United States; and (3) our logs
procured by source. In addition, information concerning our: (1) consolidated net sales by business segment; (2) consolidated profit (loss) by business segment; (3) identifiable assets by segment; (4) depreciation, amortization
and cost of timber harvested; (5) capital expenditures; and (6) geographic segment information is included at Note 25 of the Notes to the financial statements included in item 8 of this report and information concerning our sales by
product line is included in item 7 of this report.

Product Information Summary

For Years Ended December 31

(Dollar amounts in millions, except per unit)



|                                                                         |  |      |       |  |      |   |       |      |  |   |       | 
|------------------------------------------------------------------------ |  | ---- | ----- |  | ---- | - | ----- | ---- |  | - | ----- | 
|                                                                         |  | 2010 |       |  | 2009 |   |       | 2008 | 
|PRODUCTION VOLUMES(1)                                                    |  |      |       |  |      |   |       |      |  |   |       | 
|OSB,3/8 basis, million square feet(2)                                   |  |      | 3,207 |  |      |   | 2,741 |      |  |   | 4,026 | 
|Wood-based siding,3/8 basis, million square feet                        |  |      | 756   |  |      |   | 707   |      |  |   | 758   | 
|Engineered I-joists, million lineal feet                                 |  |      | 66    |  |      |   | 60    |      |  |   | 84    | 
|Laminated veneer lumber and laminated strand lumber, thousand cubic feet |  |      | 5,859 |  |      |   | 4,757 |      |  |   | 6,790 | 
|                                                                         |  |      |      
|COMMODITY PRODUCT PRICE TRENDS(3)                                        |  |      |       |  |      |   |       |      |  |   |       | 
|OSB, MSF,
7/16 span rating (North Central
price)                        |  | $    | 220   |  |      | $ | 163   |      |  | $ | 172   | 
|                                                                         |  |      |      
|% LOGS BY SOURCES(4)                                                     |  |      |       |  |      |   |       |      |  |   |       | 
|Private cutting contracts                                                |  |      | 10    |  |      |   | 13    |      |  |   | 24    | 
|Government contracts                                                     |  |      | 27    |  |      |   | 21    |      |  |   | 26    | 
|Purchased logs                                                           |  |      | 63    |  |      |   | 66    |      |  |   | 50    | 
|Total volumesmillion board feet                                         |  |      | 1,135 |  |      |   | 833   |      |  |   | 1,562 | 



|(1) | Includes purchases of products from our joint ventures or purchased under contract manufacturing arrangements
|--- | -------------------------------------------------------------------------------------------------------------

|(2) | Includes production at both our commodity and specialty mills in North America but excludes South American production.
|--- | ----------------------------------------------------------------------------------------------------------------------

|(3) | Prices represent yearly averages stated in dollars per thousand square feet (MSF). Source: Random Lengths.
|--- | ----------------------------------------------------------------------------------------------------------

|(4) | Stated as a percentage of total log volume.
|--- | -------------------------------------------



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|ITEM 1A. | Risk Factors
|-------- | ------------

You should be aware that the occurrence of any of the events described in this Risk Factors section and elsewhere in this report or in any other of our filings with the SEC could have a material adverse
effect on our business, financial position, results of operations and cash flows. In evaluating us, you should consider carefully, among other things, the risks described below and the matters described in About Forward-Looking
Statements.

Cyclical industry conditions and commodity pricing have and may continue to adversely affect our
financial condition and results of operations. Our operating results reflect the general cyclical pattern of the building products industry. Demand for our products correlates to a significant degree to the level of residential construction
activity in North America, which historically has been characterized by significant cyclicality. This cyclicality is influenced by a number of factors, including the supply of new and existing homes on the market, with existing home supply currently
being greater than normal, the level of unemployment, which is currently higher than normal, longer-term interest rates, which are currently at relatively low levels, and mortgage foreclosure rates which are currently higher than normal. The
cyclicality is also influenced by the availability of mortgage financing, which is currently more restrictive than normal and which could be adversely affected by the implementation of one or more proposals to eliminate or reduce the mortgage market
roles of or levels of support for government-sponsored enterprises such as Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation. A significant increase in longer-term interest rates, a prolonged decline in the
availability of mortgage financing, or the occurrence of other events that reduce levels of residential construction activity could have a material adverse effect on our financial condition, results of operations and cash flows. Our primary product,
OSB, and a significant portion of our raw materials are globally traded commodity products. In addition, our products are subject to competition from manufacturers worldwide. Historical prices for our products have been volatile, and we, like other
participants in the building products industry, have limited influence over the timing and extent of price changes for our products. Product pricing is significantly affected by the relationship between supply and demand in the building products
industry. Product supply is influenced primarily by fluctuations in available manufacturing capacity. Demand is affected by the state of the economy in general and a variety of other factors. The level of new residential construction activity and
home repair and remodeling activity primarily affects the demand for our building products. Demand is also subject to fluctuations due to changes in economic conditions, interest rates, population growth, weather conditions and other factors. We are
not able to predict with certainty market conditions and selling prices for our products. In this competitive environment with so many variables for which we do not control, we cannot assure you that prices for our products will not decline from
current levels. A prolonged and severe weakness in the markets for one or more of our principal products, particularly OSB, could seriously harm our financial condition and results of operations and our ability to satisfy our cash requirements,
including the payment of interest and principal on our debt.

We have a high degree of product concentration.OSB
accounted for about 51%, 45% and 50% of our North American sales in 2010, 2009 and 2008 and we expect OSB sales to continue to account for a substantial portion of our revenues and profits in the future. Concentration of our business in the OSB
market further increases our sensitivity to commodity pricing and price volatility. In this competitive environment with so many variables for which we do not control, we cannot assure you that pricing for OSB or our other products will not decline
from current levels.

Intense competition in the building products industry could prevent us from increasing or sustaining
our net sales and profitability.The markets for our products are highly competitive. Our competitors range from very large, fully integrated forest and building products firms to smaller firms that may manufacture only one or a few types of
products. We also compete less directly with firms that manufacture substitutes for wood building products. Many of our competitors have greater financial and other resources than we do, and certain of the mills operated by our competitors may be
lower-cost producers than the mills operated by us.



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Our results of operations may be harmed by potential shortages of raw materials and
increases in raw material costs.The most significant raw material used in our operations is wood fiber. We currently obtain about 73% of our wood fiber requirements in the open market. Wood fiber is subject to commodity pricing, which
fluctuates on the basis of market factors over which we have no control. In addition, the cost of various types of wood fiber that we purchase in the market has at times fluctuated greatly because of governmental, economic or industry conditions,
and may be affected by increased demand resulting from initiatives to increase the use of biomass materials in the production of heat, power, biobased products and biofuels. In addition to wood fiber, we also use a significant quantity of various
resins in our manufacturing processes. Resin product costs are influenced by changes in the prices or availability of raw materials used to produce resins, primarily petroleum products, as well as demand for and availability of resin products.
Selling prices of our products have not always increased in response to raw material cost increases. We are unable to determine to what extent, if any, we will be able to pass any future raw material cost increases through to our customers through
product price increases. Our inability to pass increased costs through to our customers could have a material adverse effect on our financial condition, results of operations and cash flows.

Many of the Canadian forestlands also are subject to the constitutionally protected treaty or common-law rights of the aboriginal peoples
of Canada. Most of British Columbia is not covered by treaties and, as a result, the claims of British Columbias aboriginal peoples relating to forest resources are largely unresolved, although many aboriginal groups are actively engaged in
treaty discussions with the governments of British Columbia and Canada. Final or interim resolution of claims brought by aboriginal groups are expected to result in additional restrictions on the sale or harvest of timber and may increase operating
costs and affect timber supply and prices in Canada. It is possible that, over the long term, such claims could have an adverse effect on our business, financial condition and results of operations. In addition, there is proposed legislation in
Quebec which could be enacted as early as 2013 which could materially impact our ability to harvest and therefore the valuation of our associated timber licenses in Quebec.

We depend on our senior management team and other key employees, and significant attrition within our management team could adversely affect our business.Our success depends in part on our ability
to attract, retain and motivate senior management and other key employees. Achieving this objective may be difficult due to many factors, including fluctuations in global economic and industry conditions, competitors hiring practices, cost
reduction activities, and the effectiveness of our compensation programs. Competition for qualified personnel can be very intense. We must continue to recruit, retain and motivate senior management and other key employees sufficient to maintain our
current business and support our future projects. Cost-cutting measures that have reduced compensation make us vulnerable to attrition among our current senior management team and other key employees, and may make it difficult for us to hire
additional senior managers and other key employees. A loss of any such personnel, or the inability to recruit and retain qualified personnel in the future, could have an adverse effect on our business, financial condition and results of operations.

Our operations require substantial capital. Capital expenditures for expansion or replacement of existing facilities
or equipment or to comply with future changes in environmental laws and regulations may be substantial. Although we maintain our production equipment with regular periodic and scheduled maintenance, we cannot assure you that key pieces of equipment
in our various production processes will not need to be repaired or replaced or that we will not incur significant additional costs associated with environmental compliance. The costs of repairing or replacing such equipment and the associated
downtime of the affected production line could have a material adverse effect on our financial condition, results of operations and cash flow. If for any reason we are unable to provide for our operating needs, capital expenditures and other cash
requirements on economic terms, we could experience a material adverse effect on our business, financial condition, results of operations and cash flows.

Our pension and health care costs are subject to numerous factors which could cause these costs to change. We have defined benefit pension plans covering substantially all U.S. and Canadian
employees. We provide retiree health care benefits to certain of our U.S. salaried and certain hourly employees. Our pension costs are



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dependent upon numerous factors resulting from actual plan experience and assumptions of future experience. Pension plan assets are primarily made up of equity and fixed income investments.
Fluctuations in actual equity market returns; changes in general interest rates and changes in the number of retirees may result in increased pension costs in future periods. Likewise, changes in assumptions regarding current discount rates and
expected rates of return on plan assets could also increase pension and health care costs. Although we froze our U.S. defined benefit plan in January 2010 in terms of future service credits, we continue to be subject to market risk on pension plan
assets as well as discount rates on long-term obligations. Significant changes in any of these factors could adversely affect our cash flows, financial condition and results of operations.

Our pension plans are currently underfunded, and over time we will be required to make cash payments to the plans, reducing the cash
available for our business. We record a liability associated with our pension plans equal to the excess of the benefit obligation over the fair value of plan assets. The benefit liability recorded under the provisions of Accounting Standards
Codification (ASC) 715, CompensationRetirement Benefits, at December 31, 2010 was $61 million. Although we expect to have no obligation to fund our plans in 2011, we continually reassess the amount and timing of any
discretionary contributions and have elected to make such a contribution in 2011. Regardless of whether we make a discretionary contribution in 2011, over the next several years we will make contributions to the plans that are likely to be material.
The amount of such contributions will depend upon a number of factors, principally the actual earnings and changes in values of plan assets, changes in interest rates and the impact of possible funding relief legislation currently under
consideration in the U.S. Congress.

A portion of our operations are conducted by joint ventures that we cannot operate
solely for our benefit.We conduct a portion of our operations through joint ventures. In joint ventures we share ownership and management of a company with one or more parties who may or may not have the same goals, strategies, priorities or
resources as we do. In general, joint ventures are intended to be operated for the benefit of all co-owners, rather than for our exclusive benefit. Operating a business as a joint venture often requires additional organizational formalities as well
as time-consuming procedures for sharing information and making decisions. In joint ventures, we are required to pay more attention to our relationship with our co-owners as well as with the joint venture, and if a co-owner changes, our relationship
may be adversely affected. In addition, the benefits from a successful joint venture are shared among the co-owners, so that we do not receive all the benefits from our joint ventures.

We depend on third parties for transportation services and increases in costs and the availability of transportation could materially
and adversely affect our business and operations.Our business depends on the transportation of a large number of products, both domestically and internationally. We rely primarily on third parties for transportation of the products we
manufacture and/or distribute as well as for delivery of our raw materials. In particular, a significant portion of the goods we manufacture and raw materials we use are transported by railroad or trucks, which are highly regulated. If any of our
third-party transportation providers were to fail to deliver the goods we manufacture or distribute in a timely manner, we may be unable to sell those products at full value or at all. Similarly, if any of these providers were to fail to
deliver raw materials to us in a timely manner, we may be unable to manufacture our products in response to customer demand. In addition, if any of these third parties were to cease operations or cease doing business with us, we may be unable to
replace them at reasonable cost. Any failure of a third-party transportation provider to deliver raw materials or finished products in a timely manner could harm our reputation, negatively affect our customer relationships and have a material
adverse effect on our financial condition and results of operation. In addition, an increase in transportation rates or fuel surcharges could materially and adversely affect our sales and profitability.

We are subject to significant environmental regulation and environmental compliance expenditures and liabilities.Our businesses
are subject to many environmental laws and regulations, particularly with respect to discharges of pollutants and other emissions on or into land, water and air, and the disposal and remediation of hazardous substances or other contaminants and the
restoration and reforestation of timberlands. Compliance with these laws and regulations is a significant factor in our business. We have incurred and expect to continue to



9



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incur significant expenditures to comply with applicable environmental laws and regulations. Moreover, some or all of the environmental laws and regulations to which we are subject could become
more stringent in the future. Our failure to comply with applicable environmental laws and regulations and permit requirements could result in civil or criminal fines or penalties or enforcement actions, including regulatory or judicial orders
enjoining or curtailing operations or requiring corrective measures, installation of pollution control equipment or remedial actions.

Some environmental laws and regulations impose liability and responsibility on present and former owners, operators or users of facilities and sites for contamination at such facilities and sites without
regard to causation or knowledge of contamination. In addition, we occasionally evaluate various alternatives with respect to our facilities, including possible dispositions or closures. Investigations undertaken in connection with these activities
may lead to discoveries of contamination that must be remediated, and closures of facilities may trigger compliance requirements that are not applicable to operating facilities. Consequently, we cannot assure you that existing or future
circumstances or developments with respect to contamination will not require significant expenditures by us.

We are
involved in various environmental matters, product liability and other legal proceedings. The outcome of these matters and proceedings and the magnitude of related costs and liabilities are subject to uncertainties.The conduct of our business
involves the use of hazardous substances and the generation of contaminants and pollutants. In addition, the end-users of many of our products are members of the general public. We currently are and from time to time in the future will be involved
in a number of environmental matters and legal proceedings, including legal proceedings involving anti-trust, warranty or non-warranty product liability claims, negligence and other claims, including claims for wrongful death, personal injury and
property damage alleged to have arisen out of the use by others of our or our predecessors products or the release by us or our predecessors of hazardous substances. Environmental matters and legal matters and proceedings, including class
action settlements relating to certain of our products, have in the past caused and in the future may cause us to incur substantial costs. We have established contingency reserves in our consolidated financial statements with respect to the
estimated costs of existing environmental matters and legal proceedings to the extent that our management has determined that such costs are both probable and reasonably estimable as to amount. However, such reserves are based upon various estimates
and assumptions relating to future events and circumstances, all of which are subject to inherent uncertainties. We regularly monitor our estimated exposure to environmental and litigation loss contingencies and, as additional information becomes
known, may change our estimates significantly. However, no estimate of the range of any such change can be made at this time. We may incur costs in respect of existing and future environmental matters and legal proceedings as to which no contingency
reserves have been established. We cannot assure you that we will have sufficient resources available to satisfy the related costs and expenses associated with these matters and proceedings.

The valuation of our investment in auction-rate securities (ARS) is subject to uncertainties that are difficult to predict. With
the liquidity issues experienced in global credit and capital markets, the ARS held by us have experienced multiple failed auctions as the amount of securities submitted for sale has exceeded the amount of purchase orders. Given the failed auctions,
the values of our ARS have been adversely affected. Factors that may further impact the valuation of our ARS include changes to credit ratings of the securities as well as to the underlying assets supporting those securities, rates of default of the
underlying assets, underlying collateral value, discount rates, counterparty risk and ongoing strength and quality of market credit and liquidity. If uncertainties in the credit and capital markets continue, these markets deteriorate further or we
experience additional ratings downgrades on any investments in our portfolio (including our ARS), we may incur additional impairments to our investment portfolio, which could negatively affect our financial condition, results of operations and cash
flows.

Settlements of tax exposures may exceed the amounts we have established for known estimated tax exposures.We
maintain reserves for known estimated tax exposures in federal, state and international jurisdictions and uncertain tax positions. Significant income tax exposures may include potential challenges to



10



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intercompany pricing, the treatment of financing, acquisition and disposition transactions, the use of hybrid entities and other matters. These exposures are settled primarily through the closure
of audits with the taxing jurisdictions and, on occasion, through the judicial process, either of which may produce a result inconsistent with past estimates. We believe that we have established appropriate reserves for estimated exposures; however,
if actual results differ materially from our estimates we could experience a material adverse effect on our financial condition, results of operations and cash flows.

Fluctuations in foreign currency exchange rates could result in currency exchange losses and reductions in stockholders equity.A significant portion of our operations are conducted through
foreign subsidiaries. The functional currency for our Canadian subsidiary is the U.S. dollar. The financial statements of this foreign subsidiary are remeasured into U.S. dollars using the historical exchange rate for property, plant and equipment,
timber and timberlands, equity and certain other non-monetary assets and liabilities and related depreciation and amortization on these assets and liabilities. These transaction gains or losses are recorded in foreign exchange gains (losses) in the
income statement. The functional currency of our Chilean subsidiary is the Chilean pesoand the functional currency in our Brazil subsidiary is the Brazilian real. Translation adjustments, which are based upon the exchange rate at the
balance sheet date for assets and liabilities and the weighted average rate for the income statement, are recorded in the Accumulated Comprehensive Income (Loss) section of Stockholders Equity. Therefore, changes in the Canadian dollar, the
Chilean pesoor the Brazilian realrelative to the U.S. dollar may have a material adverse effect on our financial condition and results of operations.

Our ability to service our indebtedness, to refinance our indebtedness or to fund our other liquidity needs is subject to various risks.Our ability to make scheduled payments on and to refinance
our indebtedness depends on and is subject to our financial and operating performance, which in turn is affected by general and regional economic, financial, competitive, business and other factors, including the availability of financing in the
banking and capital markets as well as the other risks described herein. In particular, demand for our products correlates to a significant degree to the level of residential construction activity in North America, which historically has been
characterized by significant cyclicality. Over the last several years, housing starts remained below normal levels. This reduced level of building was caused, in part, by an increase in the inventory of homes for sale, a more restrictive
mortgage market and a slowed economy. There can be no assurance as to when, or if the housing market, will rebound to normal levels. We have experienced significant losses from operations and significant net cash used in operating
activities in recent periods. Accordingly, we cannot assure you that our business will generate sufficient cash flows from operations or that future borrowings will be available to us in an amount sufficient to enable us to service our debt, to
refinance our debt or to fund our other liquidity needs. If we are unable to service our debt obligations or to fund our other liquidity needs, we could be forced to curtail our operations, reorganize our capital structure or liquidate some or all
of our assets in a manner that could cause the holders of our securities to experience a partial or total loss of their investment in us.

We have not independently verified the results of third-party research or confirmed assumptions or judgments upon which it may be based, and the forecasted and other forward-looking information
contained therein is subject to inherent uncertainties.We refer in this report and other documents that we file with the SEC to historical, forecasted and other forward-looking information published by sources such as RISI, FEA, Random
Lengthsand the U.S. Census Bureau that we believe to be reliable. However, we have not independently verified this information and, with respect to the forecasted and forward-looking information, have not independently confirmed the assumptions
and judgments upon which it is based. Forecasted and other forward looking information is necessarily based on assumptions regarding future occurrences, events, conditions and circumstances and subjective judgments relating to various matters, and
is subject to inherent uncertainties. Actual results may differ materially from the results expressed or implied by, or based upon, such forecasted and forward-looking information.



|ITEM 1B. | Unresolved Staff Comments
|-------- | -------------------------

None.



11



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|ITEM 2. | Properties
|------- | ----------

Information regarding our principal properties and facilities is set forth in the following tables. Information regarding production capacities is based on normal operating rates and normal production
mixes under current market conditions, taking into account known constraints such as log supply. Market conditions, fluctuations in log supply, and the nature of current orders may cause actual production rates and mixes to vary significantly from
the production rates and mixes shown.

ORIENTED STRAND BOARD

Oriented Strand Board Panel Plants1

10 plants5,060 million square feet annual capacity, 3/8 basis



|                              |  |                        |     | 
|----------------------------- |  | ---------------------- | --- | 
|                              |  | Square feetin millions |    
|Carthage, TX                  |  |                        | 500 | 
|Chambord, Quebec, Canada2     |  |                        | 470 | 
|Dawson Creek, BC, Canada      |  |                        | 390 | 
|Hanceville, AL                |  |                        | 420 | 
|Jasper, TX                    |  |                        | 450 | 
|Maniwaki, Quebec, Canada      |  |                        | 650 | 
|Roxboro, NC                   |  |                        | 500 | 
|Sagola, MI                    |  |                        | 410 | 
|Swan Valley, Manitoba, Canada |  |                        | 520 | 
|Thomasville, AL2              |  |                        | 750 | 

SIDING

Siding and Specialty Plants

6 plants1,320 million square feet annual capacity, 3/8 basis



|                                |  |                        |     | 
|------------------------------- |  | ---------------------- | --- | 
|                                |  | Square feetin millions |    
|Newberry, MI                    |  |                        | 150 | 
|Hayward, WI3                    |  |                        | 475 | 
|Tomahawk, WI                    |  |                        | 140 | 
|Two Harbors, MN                 |  |                        | 155 | 
|Roaring River, NC               |  |                        | 300 | 
|East River, Nova Scotia, Canada |  |                        | 100 | 

ENGINEERED WOOD PRODUCTS

I-joist Plants4

1
plant80 million lineal feet annual capacity



|                                       |  |                        |    | 
|-------------------------------------- |  | ---------------------- | -- | 
|1 to 3 shifts per day, 5 days per week |  | Lineal feetin millions |   
|Red Bluff, CA                          |  |                        | 80 | 



12



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LVL Plants

2 plants9,400 thousand cubic feet annual capacity



|                   |  |                        |       | 
|------------------ |  | ---------------------- | ----- | 
|                   |  | Cubic feetin thousands |      
|Golden, BC, Canada |  |                        | 4,800 | 
|Wilmington, NC     |  |                        | 4,600 | 

LSL Plant

1 plant7,000 thousand cubic feet annual capacity



|            |  |                        |       | 
|----------- |  | ---------------------- | ----- | 
|            |  | Cubic feetin thousands |      
|Houlton, ME |  |                        | 7,000 | 

OTHER5

Plastic Mouldings Plant

1 plant300 million lineal feet annual capacity



|               |  |                        |     | 
|-------------- |  | ---------------------- | --- | 
|               |  | Lineal feetin millions |    
|Middlebury, IN |  |                        | 300 | 

South American Operations

3 plants680 million square feet
annual capacity. 3/8 basis



|                     |  |                        |     | 
|-------------------- |  | ---------------------- | --- | 
|                     |  | Square feetin millions |    
|Panguipulli, Chile   |  |                        | 130 | 
|Lautaro, Chile       |  |                        | 160 | 
|Ponta Grossa, Brazil |  |                        | 390 | 



|        |  |  |                    |  |  |  |  | 
|------- |  |  | ------------------ |  |  |  |  | 
|Plywood |  |  | Golden, BC, Canada |  |  |  |  | 



|1 | In addition to the plants described, our 50/50 joint venture with Canfor Corporation owns and operates a plant in Ft. St. John, British Columbia,
Canada, that has an annual production capacity of 820 million square feet of OSB.
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2 | Facility indefinitely curtailed as of December 31, 2010.
|- | --------------------------------------------------------

|3 | The Hayward, WI siding facility produces both commodity OSB and OSB siding.
|- | ---------------------------------------------------------------------------

|4 | In addition to the plant described, our 50/50 joint venture with AbitibiBowater owns and operates a plant in St. Prime, Quebec, Canada and a plant in
La Rouche, Quebec, Canada. The combined annual production capacity of these facilities is 140 million lineal feet.
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5 | The above table does not reflect the 12 cellulose insulation facilities that are operated by U.S. GreenFiber, LLC, our 50/50 joint venture with Casella
Waste Systems.
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------



13



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CANADIAN TIMBERLAND LICENSE AGREEMENTS



|                                                     |  |       |            | 
|---------------------------------------------------- |  | ----- | ---------- | 
|Location                                             |  | Acres |           
|British Columbia                                     |  |       | 9,200,000  | 
|Manitoba                                             |  |       | 8,900,000  | 
|Nova Scotia                                          |  |       | 900,000    | 
|Quebec                                               |  |       | 27,600,000 | 
|                                                     |  |       |            | 
|Total timberlands under license agreements in Canada |  |       | 46,600,000 | 
|                                                     |  |       |            | 

We also have timber-cutting rights on 20,483 acres on government and privately owned timberlands in the U.S.

Our Canadian subsidiary has arrangements with four Canadian provincial governments which give our subsidiary the right to
harvest a volume of wood off public land from defined forest areas under supply and forest management agreements, long-term pulpwood agreements, and various other timber licenses. The acreage noted above is the gross amount of the licenses and is
not reflective of the amount of timber acreage that we currently manage. We also obtain wood from private parties in certain cases where the provincial governments require us to obtain logs from private parties prior to harvesting from the licenses
to meet our raw materials needs. The timberland licenses above do not include the timber we have under license associated with our joint venture OSB mill with Canfor Corporation located in British Columbia.



|ITEM 3. | Legal Proceedings
|------- | -----------------

Certain environmental matters and legal proceedings are discussed below.

ENVIRONMENTAL
MATTERS

We are involved in a number of environmental proceedings and activities, and may be wholly or partially
responsible for known or unknown contamination existing at a number of other sites at which we have conducted operations or disposed of wastes. Based on the information currently available, management believes that any fines, penalties or other
costs or losses resulting from these matters will not have a material adverse effect on our financial position, results of operations, cash flows or liquidity.

ARS LITIGATION

On July 31, 2009, LP filed suit in the United States
District Court for the Northern District of California captioned, Louisiana Pacific Corporation v. Money Market 1 Institutional Investment Dealer; Merrill Lynch & Co., Inc.; Merrill Lynch, Pierce, Fenner & Smith Incorporated; and
Deutsche Bank Securities Inc. (Civil Action No.09cv3529). This matter arose out of LPs acquisition of certain ARS structured and underwritten by Merrill Lynch and Deutsche Bank with an approximate par value of $145.9 million. In the lawsuit,
LP alleges that the defendants made misrepresentations and omissions of material facts in connection with the issuance of and the auctions for the ARS which constitute a violation of both state and federal securities laws, as well as common law
fraud. LP seeks recovery of compensatory damages, rescission of the purchase of the securities at par value, consequential damages, punitive damages, attorneys fees and any other damages the court deems appropriate under the circumstances.

OTHER PROCEEDINGS

LP is party to other legal proceedings. Based on the information currently available, LP believes that the resolution of such proceedings will not have a material adverse effect on its financial position,
results of operations, cash flows or liquidity.



14



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CONTINGENCY RESERVES

We maintain reserves for the estimated cost of the legal and environmental matters referred to above. However, as with any estimate, there is uncertainty of predicting the outcomes of claims and
litigation and environmental investigations and remediation efforts that could cause actual costs to vary materially from current estimates. Due to various uncertainties, we cannot predict to what degree actual payments will exceed the recorded
liabilities related to these matters. However, it is possible that, in either the near term or the longer term, revised estimates or actual payments will significantly exceed the recorded liabilities.

For information regarding our financial statement reserves for the estimated costs of the environmental and legal matters referred to
above, see Note 18 of the Notes to financial statements included in item 8 in this report.



|ITEM 4. | 
|------- | 



15



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PART II



|ITEM 5. | Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|------- | ------------------------------------------------------------------------------------------------------------

The common stock of LP is listed on the New York Stock Exchange with the ticker symbol LPX. The Dow-Jones newspaper quotations
symbol for the common stock is LaPac. Information regarding the high and low sales prices for the common stock for each quarter of the last two years is as follows:



|                          |  |         |      |  |         |   |       |         |  |   |         |  |  |   |       | 
|------------------------- |  | ------- | ---- |  | ------- | - | ----- | ------- |  | - | ------- |  |  | - | ----- | 
|                          |  | 1ST QTR |      |  | 2ND QTR |   |       | 3RD QTR |  |   | 4TH QTR | 
|HIGH AND LOW STOCK PRICES |  |         |      |  |         |   |       |         |  |   |         |  |  |   |       | 
|2010 High                 |  | $       | 9.20 |  |         | $ | 13.44 |         |  | $ | 8.46    |  |  | $ | 10.09 | 
|Low                       |  | $       | 6.87 |  |         | $ | 6.48  |         |  | $ | 6.25    |  |  | $ | 7.40  | 
|                          |  |         |      | 
|2009 High                 |  | $       | 2.50 |  |         | $ | 4.91  |         |  | $ | 7.77    |  |  | $ | 7.36  | 
|Low                       |  | $       | 1.19 |  |         | $ | 2.25  |         |  | $ | 3.03    |  |  | $ | 5.17  | 

As of
February 9, 2011, there were approximately 8,763 holders of record of our common stock. No dividends were paid in 2010 or 2009. Our ability to pay dividends in the future is subject to limitations set forth in the agreement governing our bank
credit facilities and the indenture governing our Senior Notes due in 2017.

ISSUER PURCHASES OF EQUITY SECURITIES

None.



16



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PERFORMANCE GRAPH

The following graph compares the total cumulative return to investors, including dividends paid (assuming reinvestment of dividends) and appreciation or depreciation in stock price, from an investment in
LP Common Stock for the period December 31, 2005 through December 31, 2010, to the total cumulative return to investors from the Standard & Poors 500 Stock Index and the Standard & Poors Paper and Forest
Products Index for the same period. Stockholders are cautioned that the graph shows the returns to investors only as of the dates noted and may not be representative of the returns for any other past or future period.

LOGO



|                              |  |        |     |  |        |   |     |        |  |   |        |  |  |        |    |  |        |   |    |  |  |   |     | 
|----------------------------- |  | ------ | --- |  | ------ | - | --- | ------ |  | - | ------ |  |  | ------ | -- |  | ------ | - | -- |  |  | - | --- | 
|                              |  | Dec-05 |     |  | Dec-06 |   |     | Dec-07 |  |   | Dec-08 |  |  | Dec-09 |    |  | Dec-10 |  
|LOUISIANA-PACIFIC CORPORATION |  | $      | 100 |  |        | $ | 80  |        |  | $ | 53     |  |  | $      | 6  |  |        | $ | 28 |  |  | $ | 37  | 
|S&P 500 INDEX                 |  | $      | 100 |  |        | $ | 116 |        |  | $ | 122    |  |  | $      | 77 |  |        | $ | 97 |  |  | $ | 112 | 
|PAPER & FOREST PRODUCTS       |  | $      | 100 |  |        | $ | 106 |        |  | $ | 110    |  |  | $      | 44 |  |        | $ | 87 |  |  | $ | 92  | 



17



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|ITEM 6. | Selected Financial Data
|------- | -----------------------



|                                                                                                                      |  |         |         |   |      |   |         |      |  |   |         |   |  |         |         |   |  |   |         |  
|--------------------------------------------------------------------------------------------------------------------- |  | ------- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | - |  | ------- | ------- | - |  | - | ------- | -
|Dollar amounts in millions, except per shareYear ended December 31                                                    |  | 2010(3) |         |   | 2009 |   |         | 2008 |  |   | 2007(2) |   |  | 2006(1) |        
|SUMMARY INCOME STATEMENT DATA                                                                                         |  |         |         |   |      |   |         |      |  |   |         |   |  |         |         |   |  |   |         |  
|Net sales                                                                                                             |  | $       | 1,383.6 |   |      | $ | 1,061.0 |      |  | $ | 1,379.2 |   |  | $       | 1,708.1 |   |  | $ | 2,188.6 |  
|Income (loss) from continuing operations before cumulative effect of change in accounting principle                   |  |         | (32.2   | ) |      |   | (116.5  | )    |  |   | (563.1  | ) |  |         | (151.7  | ) |  |   | 136.1   |  
|Income (loss) from discontinued operations                                                                            |  |         | (6.4    | ) |      |   | (5.3    | )    |  |   | (13.7   | ) |  |         | (24.6   | ) |  |   | (10.2   | )
|Net income (loss)                                                                                                     |  |         | (38.6   | ) |      |   | (121.8  | )    |  |   | (576.8  | ) |  |         | (176.3  | ) |  |   | 125.9   |  
|Net loss attributed to Louisiana-Pacific Corporation                                                                  |  |         | (39.0   | ) |      |   | (120.9  | )    |  |   | (576.6  | ) |  |         | (176.3  | ) |  |   | 125.9   |  
|Income (loss) from continuing operations before cumulative effect of change in accounting principle per
sharebasic   |  |         | ($0.25  | ) |      |   | ($1.06  | )    |  |   | ($5.47  | ) |  |         | ($1.46  | ) |  |   | $1.30   |  
|Net income (loss) per sharebasic                                                                                     |  |         | ($0.30  | ) |      |   | ($1.11  | )    |  |   | ($5.60  | ) |  |         | ($1.70  | ) |  |   | $1.20   |  
|Income (loss) from continuing operations before cumulative effect of change in accounting principle per
sharediluted |  |         | ($0.25  | ) |      |   | ($1.06  | )    |  |   | ($5.47  | ) |  |         | ($1.46  | ) |  |   | $1.29   |  
|Net income (loss) per sharediluted                                                                                   |  |         | ($0.30  | ) |      |   | ($1.11  | )    |  |   | ($5.60  | ) |  |         | ($1.70  | ) |  |   | $1.19   |  
|Average shares of common stock outstanding (millions)                                                                 |  |         |         |   |      |   |         |      |  |   |         |   |  |         |         |   |  |   |         |  
|Basic                                                                                                                 |  |         | 129.1   |   |      |   | 108.5   |      |  |   | 102.9   |   |  |         | 103.7   |   |  |   | 105.1   |  
|Diluted                                                                                                               |  |         | 129.1   |   |      |   | 108.5   |      |  |   | 102.9   |   |  |         | 103.7   |   |  |   | 105.5   |  
|                                                                                                                      |  |         |         |   |     
|Cash dividends declared per common share                                                                              |  |         |        |   |      |   |        |      |  | $ | 0.30    |   |  | $       | 0.60    |   |  | $ | 0.60    |  
|                                                                                                                      |  |         |         |   |     
|SUMMARY BALANCE SHEET INFORMATION                                                                                     |  |         |         |   |      |   |         |      |  |   |         |   |  |         |         |   |  |   |         |  
|Total assets                                                                                                          |  | $       | 2,410.6 |   |      | $ | 2,620.3 |      |  | $ | 2,601.6 |   |  | $       | 3,648.5 |   |  | $ | 3,845.5 |  
|Long-term debt, excluding current portion                                                                             |  | $       | 714.5   |   |      | $ | 706.3   |      |  | $ | 841.3   |   |  | $       | 854.5   |   |  | $ | 1,013.3 |  
|Contingency reserves, excluding current portion                                                                       |  | $       | 25.9    |   |      | $ | 30.8    |      |  | $ | 30.5    |   |  | $       | 15.8    |   |  | $ | 25.6    |  
|Stockholders equity                                                                                                  |  | $       | 1,217.8 |   |      | $ | 1,253.5 |      |  | $ | 1,224.2 |   |  | $       | 1,860.5 |   |  | $ | 2,110.0 |  



|1 | As of January 1, 2006, LP adopted the fair value recognition provisions of SFAS No. 123 (revised 2004), Share-Based Payment
(SFAS 123R) and as of December 31, 2006, LP adopted the recognition and disclosure provisions of SFAS No. 158 Employers Accounting for Defined Benefit Pension and Other Postretirement Plansan amendment of
FASB Statements No. 87, 88, 106 and 132(R).
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2 | As of January 1, 2007, LP adopted FASB Staff Position AUG AIR-1, Accounting for Planned Major Maintenance Activities (FSP AUG AIR-1)
and Financial Accounting Standards Board (FASB) Interpretation No. 48, Accounting for Uncertainty in Income Taxesan Interpretation of FASB Statement No. 109 (FIN 48).
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3 | As of January 1, 2010, LP adopted guidance codified under ASC Topic 860, Transfers and Servicing (ASC 860) which eliminated the
concept of a qualifying special-purpose entity (QSPE) for accounting purposes.
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



18



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|ITEM 7. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

OVERVIEW

General

Our products are used primarily in new home construction, repair and remodeling, and manufactured housing. We also market and sell our
products in light industrial and commercial construction and we have a modest export business. Our manufacturing facilities are primarily located in the U.S. and Canada, but we also operate two facilities in Chile and have a 75% ownership interest
in facility in Brazil.

To serve these markets, we operate in three segments: Oriented Strand Board (OSB); Siding; and
Engineered Wood Products (EWP). OSB is the most significant segment, accounting for 44% of continuing sales in 2010, 39% in 2009 and 45% in 2008.

OSB is sold as a commodity for which sales prices fluctuate daily based on market factors over which we have little or no control. We cannot predict whether the prices of our products will remain at
current levels, increase or decrease in the future.

2010 was characterized by low demand for all of our products. The housing
market improved slightly from the severe weakness experienced in 2009. The market channel continued to experience numerous site closures and location consolidations. The continued disruption in the credit market forced inventory liquidations by our
customers, and the continuing overall economic pessimism adversely affected the sales of our products.

Factors Affecting Our Results

Revenues and Operating Costs.

We derive our revenues from sales of our products. The unit volumes of products sold and the prices at which sales are made determine the amount of our revenues. These volumes and prices are affected by
the overall level of demand for, and supply of, products of the type we sell and comparable or substitute products, and by competitive conditions.

Our operating results reflect the relationship between the amount of our revenues and our costs of production and other operating costs and expenses. Our costs of production are affected by, among other
factors, costs of raw materials (primarily wood fiber and various petroleum-based resins) and energy costs, which in turn are affected by the overall market supply of and demand for these manufacturing inputs.

Demand for Building Products

Demand for our products correlates to a significant degree to the level of residential construction activity in North America, which historically has been characterized by significant cyclicality. This
activity can be further delineated into three areas: (1) new home construction; (2) repair and remodeling; and (3) manufactured housing.

New Home Construction. Demand for our products correlates to a significant degree to the level of new home construction activity in North America, which historically has been characterized by
significant cyclicality. The U.S. Census Bureau reported that actual single and multi-family housing starts in 2010 were about 6% higher than 2009 and 35% lower than 2008. We believe that the reduced level of building is due to the increase in the
inventory of unoccupied homes for sale coupled with a much more restrictive mortgage market. Additionally, the current recession and related job losses and the reduction in home values have increased the number of foreclosures, which has added to
the stock of homes for sale. Building activity is unlikely to improve until the number of homes available for sale is reduced, foreclosure activity subsides, the level of unemployment stabilizes and housing prices stop declining.



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While near term residential construction is constrained in the U.S., positive long-term fundamentals
persist. Increased immigration, the changing age distribution of the population, additional minority home ownership and historically low interest rates are expected to lead to more household formations. The chart below, which is based on data
published by U.S. Census Bureau, provides a graphical summary of new housing starts for single and multi-family in the U.S. showing actual and rolling five and ten year averages for housing starts in thousands.

LOGO

Repair and Remodeling. Demand for building materials to support home improvement projects is largely
tied to the size and age of the existing housing stock in North America and consumer confidence. In this regard, the 1970s and 1980s had some of the highest levels of building activity. This puts these homes at an age of approximately 30-40 years,
which has been shown to be consistent with the highest per home expenditure rate on repair and remodeling. With the rise in the number and scale of home improvement stores in North America, individuals now have ready and convenient access to obtain
the building materials needed for repair and remodeling, as well as increased access to installation services. Although this market weakened in 2009 and 2010 due to reduced home sales and reduced financing to fund repair and remodel expenditures, it
did not decline as significantly as new home construction activity.

Manufactured Housing. Over the last several years,
manufactured housing has suffered. There are several factors that have led to the decline in the number of manufactured housing units produced, including a lack of available financing, increased ability of potential customers to purchase site-built
starter homes and financial difficulties at some of the larger manufactured housing producers.

Supply of Building Products

OSB is a commodity product, and it is, along with all of our products, subject to competition from manufacturers worldwide. Product supply
is influenced primarily by fluctuations in available manufacturing capacity and imports. According to FEA (Forest Economic Advisors, LLC), total North American OSB annual production capacity is projected to increase by approximately 3.9 billion
square feet in the period from 2011 to 2015 while plywood production capacity is projected to increase by 0.7 billion square feet for the same period. According to FEA, OSB accounted for approximately 64% of North American structural panel
production capacity in 2010, with plywood accounting for the remainder. Going forward, it is expected that OSB will continue to capture market share from plywood. FEA forecasts, as of December 2010, that OSB will comprise approximately 66% of the
structural panel market by 2015. The chart below, which is based on data and forecasts published by FEA, depicts past and forecasted North America structural wood production capacities in billions of square feet.



20



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LOGO

Putting Demand and Supply Together

As noted above, demand for building products is influenced by the general economy, demographics and need for housing. In the case of OSB, generally, lower demand coupled with higher production capacity
will result in lower pricing. The chart below, as calculated by FEA (as of December 2010), shows the demand capacity (demand divided by supply) for OSB in 2005 through 2010 as well as FEAs forecast through 2015 based upon estimated future
demand and supply.

LOGO

Product Pricing.

Historical prices for our products have been volatile, and we, like other participants in the building products industry, have limited influence over the timing and extent of price changes for our
products. The estimated average North Central wholesale price for OSB (per thousand square feet 7/16 basis) from 2006 through 2010, as published by Random Lengths, an industry publication, is presented below. FEAs forecast (as of
December 2010) for average North Central wholesale pricing for OSB (per thousand square feet 7/16 basis) through 2015 is also shown.



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LOGO

CRITICAL ACCOUNTING POLICIES AND SIGNIFICANT ESTIMATES

A discussion of our significant accounting policies and significant accounting estimates and judgments is presented in Note 1 of the Notes
to the financial statements in item 8 of this report. Throughout the preparation of the financial statements, we employ significant judgments in the application of accounting principles and methods. These judgments are primarily related to the
assumptions used to arrive at various estimates. For 2010, these significant accounting estimates and judgments include:

Legal Contingencies. Our estimates of loss contingencies for legal proceedings are based on various judgments and assumptions
regarding the potential resolution or disposition of the underlying claims and associated costs. In making judgments and assumptions regarding legal contingencies for ongoing class action settlements, we consider, among other things, discernible
trends in the rate of claims asserted and related damage estimates and information obtained through consultation with statisticians and economists, including statistical analyses of potential outcomes based on experience to date and the experience
of third parties who have been subject to product-related claims judged to be comparable. Due to the numerous variables associated with these judgments and assumptions, both the precision and reliability of the resulting estimates of the related
loss contingencies are subject to substantial uncertainties. We regularly monitor our estimated exposure to these contingencies and, as additional information becomes known, may change our estimates significantly.

Environmental Contingencies. Our estimates of loss contingencies for environmental matters are based on various judgments and
assumptions. These estimates typically reflect judgments and assumptions relating 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 judgments and assumptions relating to the obligation or willingness and ability of third parties to bear a proportionate or allocated share of the cost of these activities, including third parties who purchased assets from us subject
to environmental liabilities. We consider the ability of third parties to pay their apportioned cost when developing our estimates. In making these judgments and assumptions related to the development of our loss contingencies, we consider, among
other things, the activity to date at particular sites, information obtained through consultation with applicable regulatory authorities and third-party consultants and contractors and our historical experience at other sites that are judged to be
comparable. Due to the numerous variables associated with these judgments and assumptions, 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. We regularly monitor our estimated exposure to environmental loss contingencies and, as additional information becomes known, may change our estimates significantly. At
December 31, 2010, we excluded from our estimates approximately $1.0 million of potential environmental liabilities that we estimate will be allocated to third parties pursuant to existing and anticipated future cost sharing arrangements.



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Impairment of Long-Lived Assets. We review the long-lived assets held and used by us
(primarily property, plant and equipment and timber and timberlands) for impairment when events or changes in circumstances indicate that the carrying amount of assets may not be recoverable. We consider the necessity of undertaking such a review at
least quarterly, and also when certain events or changes in circumstances occur. Events and changes in circumstances that may necessitate such a review include, but are not limited to: a significant decrease in the market price of a long-lived asset
or group of long-lived assets; a significant adverse change in the extent or manner in which a long-lived asset or group of long-lived assets is being used or in its physical condition; a significant adverse change in legal factors or in the
business climate that could affect the value of a long-lived asset or group of long-lived assets, including an adverse action or assessment by a regulator; an accumulation of costs significantly in excess of the amount originally expected for the
acquisition or construction of a long-lived asset or group of long-lived assets; current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses
associated with the use of a long-lived asset or group of long-lived assets; and current expectation that, more likely than not, a long-lived asset or group of long-lived assets will be sold or otherwise disposed of significantly before the end of
its previously estimated useful life. Identifying these events and changes in circumstances, and assessing their impact on the appropriate valuation of the affected assets under accounting principles generally accepted in the U.S., requires us to
make judgments, assumptions and estimates.

In general, for assets held and used in our operations, impairments are recognized
when the carrying amount of the long-lived asset or groups of long-lived assets is not recoverable and exceeds the fair value of the asset or group of assets. The carrying amount of a long-lived asset or groups of long-lived assets is not
recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the assets or group of assets. The key assumptions in estimating these cash flows relate to future production volumes,
pricing of commodity or specialty products and future estimates of expenses to be incurred as reflected in our long-range internal planning models. Our assumptions regarding pricing are based upon the average pricing over the commodity cycle
(generally five years) due to the inherent volatility of commodity product pricing, and reflect our assessment of information gathered from industry research firms, research reports published by investment analysts and other published forecasts. Our
assumptions regarding expenses reflect our expectation that we will continue to reduce production costs to offset inflationary impacts.

When impairment is indicated for assets held and used in our operations, the book values of the affected assets are written down to their estimated fair value, which is generally based upon discounted
future cash flows associated with the affected assets. When impairment is indicated for assets to be disposed of, the book values of the affected assets are written down to their estimated fair value, less estimated selling costs. Consequently, a
determination to dispose of particular assets can require us to estimate the net sales proceeds expected to be realized upon such disposition, which may be less than the estimated undiscounted future net cash flows associated with such assets prior
to such determination, and thus require an impairment charge. In situations where we have experience in selling assets of a similar nature, we may estimate net sales proceeds on the basis of that experience. In other situations, we hire independent
appraisers to estimate net sales proceeds.

Due to the numerous variables associated with our judgments and assumptions
relating to the valuation of assets in these circumstances, and the effects of changes in circumstances affecting these valuations, both the precision and reliability of the resulting estimates of the related impairment charges are subject to
substantial uncertainties and, as additional information becomes known, we may change our estimates significantly.

Income
Taxes.The determination of the provision for income taxes, and the resulting current and deferred tax assets and liabilities, involves significant management judgment, and is based upon information and estimates available to management at the
time of such determination. The final income tax liability to any taxing jurisdiction with respect to any calendar year will ultimately be determined long after our financial statements have been published for that year. We maintain reserves for
known estimated tax exposures in federal, state and international jurisdictions; however, actual results may differ materially from our estimates.



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Judgment is also applied in determining whether deferred tax assets will be realized in full
or in part. When we consider it to be more likely than not that all or some portion of a deferred tax asset will not be realized, a valuation allowance is established for the amount of the deferred tax asset that is estimated not to be realizable.
As of December 31, 2010, we had established valuation allowances against certain deferred tax assets, primarily related to state and foreign carryovers of net operating losses, credits and capital losses. We have not established valuation
allowances against other deferred tax assets based upon tax strategies implemented or deferred tax liabilities which we anticipate to reverse within the carry forward period. Accordingly, changes in facts or circumstances affecting the likelihood of
realizing a deferred tax asset could result in the need to record additional valuation allowances.

Auction Rate
Securities: Our auction-rate securities represent interests in collateralized debt obligations, a portion of which are supported by pools of residential and commercial mortgages, bank trust preferred notes and other securities.
Historically, liquidity for these auction-rate securities was typically provided by an auction process that reset the applicable interest rate at pre-determined intervals, usually every 7, 28, 35 or 90 days. As of December 31, 2010,
auction-rate securities that we hold had experienced multiple failed auctions as the amount of securities for sale exceeded the amount of purchase orders. Consequently, we have classified $15.4 million ($61.5 million, par value) of auction-rate
securities as long-term available-for-sale securities.

Our estimates of the valuation of our current holdings of auction rate
securities are based upon our evaluation of the structure of our auction rate securities and current market estimates of fair value, including fair value estimates from the issuing banks and indicative pricing from other parties. We review several
factors to determine whether a loss is other-than-temporary. These factors include but are not limited to: (i) the length of time a security is in an unrealized loss position, (ii) the extent to which fair value is less than cost,
(iii) the financial condition and near term prospects of the issuer, and (iv) our intent and ability to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value. Due to the numerous variables
associated with these judgments, both the precision and reliability of the resulting estimates of the related valuation allowance are subject to substantial uncertainties. We regularly monitor our estimated exposure to these investments and, as
additional information becomes known, may change our estimates significantly.

Pension Plans. Most of our U.S.
employees and many of our Canadian employees participate in defined benefit pension plans sponsored by LP. We account for the consequences of our sponsorship of these plans in accordance with accounting principles generally accepted
in the U.S., which require us to make actuarial assumptions that are used to calculate the related assets, liabilities and expenses recorded in our financial statements. While we believe we have a reasonable basis for these assumptions,
which include assumptions regarding long-term rates of return on plan assets, life expectancies, rates of increase in salary levels, rates at which future values should be discounted to determine present values and other matters, the amounts of our
pension related assets, liabilities and expenses recorded in our financial statements would differ if we used other assumptions. See further discussion related to pension plans below under the heading Defined Benefit Pension
Plans and in Note 14 of the Notes to the financial statements included in item 8 of this report.

Workers
Compensation. We are self insured for most of our U.S. employees workers compensation claims. We account for these plans in accordance with accounting principles generally accepted in the U.S., which require us to make actuarial
assumptions that are used to calculate the related assets, liabilities and expenses recorded in our financial statements. While we believe we have a reasonable basis for these assumptions, which include assumptions regarding rates at which
future values should be discounted to determine present values, expected future health care costs and other matters, the amounts of our liabilities and related expenses recorded in our financial statements would differ if we used other
assumptions.

Warranty Obligations.Customers are provided with a limited warranty against certain defects associated
with our products for periods of up to fifty years. We estimate the costs to be incurred under these warranties and record a liability in the amount of such costs at the time product revenue is recognized. Factors that affect our warranty liability
include the historical and anticipated rates of warranty claims and the cost of resolving such.



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We periodically assess the adequacy of our recorded warranty liability for each product and adjust the amounts as necessary. While we believe we have a reasonable basis for these assumptions,
actual warranty costs in the future could differ from our estimates.

NON-GAAP FINANCIAL MEASURES

In evaluating our business, we utilize several non-GAAP financial measures. A non-GAAP financial measure is generally defined by the SEC
as one that purports to measure historical or future financial performance, financial position or cash flows, but excludes or includes amounts that would not be so excluded or included under applicable GAAP guidance. In this report on Form 10-K, we
disclose earnings (loss) from continuing operations before interest expense, taxes, depreciation and amortization (EBITDA from continuing operations) which is a non-GAAP financial measure. Additionally, we disclose Adjusted EBITDA from
continuing operations which further adjusts EBITDA from continuing operations to exclude stock based compensation expense, (gain) loss on sales or impairment of long lived assets, other operating charges and credits, other-than-temporary investment
impairment, (gain) loss on early debt extinguishment, investment income and realized gain on sale of long-term investments and goodwill impairment. Neither EBITDA from continuing operations nor Adjusted EBITDA from continuing operations is a
substitute for the GAAP measure of net income or operating cash flows or for any other GAAP measures of operating performance or liquidity.

We have included EBITDA from continuing operations and Adjusted EBITDA from continuing operations in this report on Form 10-K because we use them as important supplemental measures of our performance and
believe that they are frequently used by securities analysts, investors and other interested persons in the evaluation of companies in our industry, some of which present EBITDA when reporting their results. We use EBITDA from continuing operations
and Adjusted EBITDA from continuing operations to evaluate our performance as compared to other companies in our industry that have different financing and capital structures and/or tax rates. It should be noted that companies calculate EBITDA and
Adjusted EBITDA differently and, therefore, our EBITDA and Adjusted EBITDA measures may not be comparable to EBITDA and Adjusted EBITDA reported by other companies. Our EBITDA and Adjusted EBITDA measures have material limitations as performance
measures because they exclude interest expense, income tax (benefit) expense and depreciation and amortization which are necessary to operate our business or which we otherwise incur or experience in connection with the operation of our business.



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The following table represents significant items by operating segment and reconciles results
from continuing operations to EBITDA from continuing operations and Adjusted EBITDA from continuing operations:



|                                                                                                         |  |     |       |  |        |   |       |     |  |   |       |   |  |           |       |  |       |   |        |   |  |   |         |  
|-------------------------------------------------------------------------------------------------------- |  | --- | ----- |  | ------ | - | ----- | --- |  | - | ----- | - |  | --------- | ----- |  | ----- | - | ------ | - |  | - | ------- | -
|(Dollar amounts in millions)
Year Ended December 31, 2010                                                |  | OSB |       |  | Siding |   |       | EWP |  |   | Other |   |  | Corporate |       |  | Total |  
|Sales                                                                                                    |  | $   | 602.7 |  |        | $ | 427.8 |     |  | $ | 192.0 |   |  | $         | 167.6 |  |       | $ | (6.5   | ) |  | $ | 1,383.6 |  
|                                                                                                         |  |     |       |  |        |   |       |     |  |   |       |   |  |           |       |  |       |   |        |   |  |   |         |  
|Depreciation and amortization                                                                            |  |     | 37.4  |  |        |   | 18.1  |     |  |   | 13.1  |   |  |           | 11.1  |  |       |   | 2.3    |   |  |   | 82.0    |  
|Cost of sales and selling and administrative                                                             |  |     | 537.7 |  |        |   | 358.4 |     |  |   | 199.3 |   |  |           | 146.7 |  |       |   | 64.6   |   |  |   | 1,306.7 |  
|(Gain) loss on sale or impairment of long lived assets                                                   |  |     |       |  |        |   |       |     |  |   |       |   |  |           |       |  |       |   | 2.4    |   |  |   | 2.4     |  
|Other operating credits and charges, net                                                                 |  |     |       |  |        |   |       |     |  |   |       |   |  |           |       |  |       |   | 0.1    |   |  |   | 0.1     |  
|                                                                                                         |  |     |       |  |        |   |       |     |  |   |       |   |  |           |       |  |       |   |        |   |  |   |         |  
|Total operating costs                                                                                    |  |     | 575.1 |  |        |   | 376.5 |     |  |   | 212.4 |   |  |           | 157.8 |  |       |   | 69.4   |   |  |   | 1,391.2 |  
|                                                                                                         |  |     |       |  |        |   |       |     |  |   |       |   |  |           |       |  |       |   |        |   |  |   |         |  
|Income (loss) from operations                                                                            |  |     | 27.6  |  |        |   | 51.3  |     |  |   | (20.4 | ) |  |           | 9.8   |  |       |   | (75.9  | ) |  |   | (7.6    | )
|Total non-operating income (expense)                                                                     |  |     |       |  |        |   |       |     |  |   |       |   |  |           |       |  |       |   | (40.3  | ) |  |   | (40.3   | )
|Income (loss) before income taxes and equity in earnings of unconsolidated affiliates                    |  |     | 27.6  |  |        |   | 51.3  |     |  |   | (20.4 | ) |  |           | 9.8   |  |       |   | (116.2 | ) |  |   | (47.9   | )
|Provision (benefit) for income taxes                                                                     |  |     |       |  |        |   |       |     |  |   |       |   |  |           |       |  |       |   | (22.1  | ) |  |   | (22.1   | )
|Equity in (income) loss of unconsolidated affiliates                                                     |  |     | 1.8   |  |        |   |      |     |  |   | 0.9   |   |  |           | 3.7   |  |       |   |       |   |  |   | 6.4     |  
|                                                                                                         |  |     |       |  |        |   |       |     |  |   |       |   |  |           |       |  |       |   |        |   |  |   |         |  
|Income (loss) from continuing operations                                                                 |  |     | 25.8  |  |        |   | 51.3  |     |  |   | (21.3 | ) |  |           | 6.1   |  |       |   | (94.1  | ) |  |   | (32.2   | )
|                                                                                                         |  |     |       |  |        |   |       |     |  |   |       |   |  |           |       |  |       |   |        |   |  |   |         |  
|Reconciliation of income (loss) from continuing operations to adjusted EBITDA from continuing operations |  |     |       |  |        |   |       |     |  |   |       |   |  |           |       |  |       |   |        |   |  |   |         |  
|Income (loss) from continuing operations                                                                 |  |     | 25.8  |  |        |   | 51.3  |     |  |   | (21.3 | ) |  |           | 6.1   |  |       | $ | (94.1  | ) |  |   | (32.2   | )
|Income tax benefit                                                                                       |  |     |       |  |        |   |       |     |  |   |       |   |  |           |       |  |       |   | (22.1  | ) |  |   | (22.1   | )
|Interest expense, net of capitalized interest                                                            |  |     |       |  |        |   |       |     |  |   |       |   |  |           |       |  |       |   | 63.9   |   |  |   | 63.9    |  
|Depreciation and amortization                                                                            |  |     | 37.4  |  |        |   | 18.1  |     |  |   | 13.1  |   |  |           | 11.1  |  |       |   | 2.3    |   |  |   | 82.0    |  
|                                                                                                         |  |     |       |  |        |   |       |     |  |   |       |   |  |           |       |  |       |   |        |   |  |   |         |  
|EBITDA from continuing operations                                                                        |  |     | 63.2  |  |        |   | 69.4  |     |  |   | (8.2  | ) |  |           | 17.2  |  |       |   | (50.0  | ) |  |   | 91.6    |  
|                                                                                                         |  |     |       |  |        |   |       |     |  |   |       |   |  |           |       |  |       |   |        |   |  |   |         |  
|Stock based compensation expense                                                                         |  |     | 1.0   |  |        |   | 0.6   |     |  |   | 0.6   |   |  |           |      |  |       |   | 6.6    |   |  |   | 8.8     |  
|(Gain) loss on sale or impairment of long lived assets                                                   |  |     |       |  |        |   |       |     |  |   |       |   |  |           |       |  |       |   | 2.4    |   |  |   | 2.4     |  
|Realized gain on long term investments (ARS)                                                             |  |     |       |  |        |   |       |     |  |   |       |   |  |           |       |  |       |   | (19.0  | ) |  |   | (19.0   | )
|Investment income                                                                                        |  |     |       |  |        |   |       |     |  |   |       |   |  |           |       |  |       |   | (19.4  | ) |  |   | (19.4   | )
|Other operating credits and charges, net                                                                 |  |     |       |  |        |   |       |     |  |   |       |   |  |           |       |  |       |   | 0.1    |   |  |   | 0.1     |  
|Other than temporary investment impairment                                                               |  |     |       |  |        |   |       |     |  |   |       |   |  |           |       |  |       |   | 17.0   |   |  |   | 17.0    |  
|                                                                                                         |  |     |       |  |        |   |       |     |  |   |       |   |  |           |       |  |       |   |        |   |  |   |         |  
|Adjusted EBITDA from continuing operations                                                               |  | $   | 64.2  |  |        | $ | 70.0  |     |  | $ | (7.6  | ) |  | $         | 17.2  |  |       | $ | (62.3  | ) |  | $ | 81.5    |  
|                                                                                                         |  |     |       |  |        |   |       |     |  |   |       |   |  |           |       |  |       |   |        |   |  |   |         |  



26



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|                                                                                                         |  |     |       |   |        |   |       |     |  |   |       |   |  |           |       |  |       |   |        |   |  |   |         |  
|-------------------------------------------------------------------------------------------------------- |  | --- | ----- | - | ------ | - | ----- | --- |  | - | ----- | - |  | --------- | ----- |  | ----- | - | ------ | - |  | - | ------- | -
|(Dollar amounts in millions)
Year Ended December 31, 2009                                                |  | OSB |       |   | Siding |   |       | EWP |  |   | Other |   |  | Corporate |       |  | Total |  
|Sales                                                                                                    |  | $   | 408.8 |   |        | $ | 379.4 |     |  | $ | 157.7 |   |  | $         | 117.0 |  |       | $ | (1.9   | ) |  | $ | 1,061.0 |  
|                                                                                                         |  |     |       |   |        |   |       |     |  |   |       |   |  |           |       |  |       |   |        |   |  |   |         |  
|Depreciation and amortization                                                                            |  |     | 35.2  |   |        |   | 18.5  |     |  |   | 12.2  |   |  |           | 10.7  |  |       |   | 3.4    |   |  |   | 80.0    |  
|Cost of sales and selling and administrative                                                             |  |     | 430.6 |   |        |   | 331.6 |     |  |   | 177.7 |   |  |           | 104.1 |  |       |   | 71.2   |   |  |   | 1,115.2 |  
|(Gain) loss on sale or impairment of long lived assets                                                   |  |     |       |   |        |   |       |     |  |   |       |   |  |           |       |  |       |   | (2.5   | ) |  |   | (2.5    | )
|Other operating credits and charges, net                                                                 |  |     |       |   |        |   |       |     |  |   |       |   |  |           |       |  |       |   | 1.6    |   |  |   | 1.6     |  
|                                                                                                         |  |     |       |   |        |   |       |     |  |   |       |   |  |           |       |  |       |   |        |   |  |   |         |  
|Total operating costs                                                                                    |  |     | 465.8 |   |        |   | 350.1 |     |  |   | 189.9 |   |  |           | 114.8 |  |       |   | 73.7   |   |  |   | 1,194.3 |  
|                                                                                                         |  |     |       |   |        |   |       |     |  |   |       |   |  |           |       |  |       |   |        |   |  |   |         |  
|Income (loss) from operations                                                                            |  |     | (57.0 | ) |        |   | 29.3  |     |  |   | (32.2 | ) |  |           | 2.2   |  |       |   | (75.6  | ) |  |   | (133.3  | )
|Non-operating income (expense)                                                                           |  |     |       |   |        |   |       |     |  |   |       |   |  |           |       |  |       |   | (36.2  | ) |  |   | (36.2   | )
|Income (loss) before income taxes and equity in earnings of unconsolidated affiliates                    |  |     | (57.0 | ) |        |   | 29.3  |     |  |   | (32.2 | ) |  |           | 2.2   |  |       |   | (111.8 | ) |  |   | (169.5  | )
|Provision (benefit) for income taxes                                                                     |  |     |       |   |        |   |       |     |  |   |       |   |  |           |       |  |       |   | (63.4  | ) |  |   | (63.4   | )
|Equity in (income) loss of unconsolidated affiliates                                                     |  |     | 8.1   |   |        |   |      |     |  |   | 0.9   |   |  |           | 1.4   |  |       |   |       |   |  |   | 10.4    |  
|                                                                                                         |  |     |       |   |        |   |       |     |  |   |       |   |  |           |       |  |       |   |        |   |  |   |         |  
|Income (loss) from continuing operations                                                                 |  |     | (65.1 | ) |        |   | 29.3  |     |  |   | (33.1 | ) |  |           | 0.8   |  |       |   | (48.4  | ) |  |   | (116.5  | )
|                                                                                                         |  |     |       |   |        |   |       |     |  |   |       |   |  |           |       |  |       |   |        |   |  |   |         |  
|Reconciliation of income (loss) from continuing operations to adjusted EBITDA from continuing operations |  |     |       |   |        |   |       |     |  |   |       |   |  |           |       |  |       |   |        |   |  |   |         |  
|Income (loss) from continuing operations                                                                 |  |     | (65.1 | ) |        |   | 29.3  |     |  |   | (33.1 | ) |  |           | 0.8   |  |       |   | (48.4  | ) |  |   | (116.5  | )
|Income tax benefit                                                                                       |  |     |       |   |        |   |       |     |  |   |       |   |  |           |       |  |       |   | (63.4  | ) |  |   | (63.4   | )
|Interest expense, net of capitalized interest                                                            |  |     |       |   |        |   |       |     |  |   |       |   |  |           |       |  |       |   | 74.6   |   |  |   | 74.6    |  
|Depreciation and amortization                                                                            |  |     | 35.2  |   |        |   | 18.5  |     |  |   | 12.2  |   |  |           | 10.7  |  |       |   | 3.4    |   |  |   | 80.0    |  
|                                                                                                         |  |     |       |   |        |   |       |     |  |   |       |   |  |           |       |  |       |   |        |   |  |   |         |  
|EBITDA from continuing operations                                                                        |  |     | (29.9 | ) |        |   | 47.8  |     |  |   | (20.9 | ) |  |           | 11.5  |  |       |   | (33.8  | ) |  |   | (25.3   | )
|                                                                                                         |  |     |       |   |        |   |       |     |  |   |       |   |  |           |       |  |       |   |        |   |  |   |         |  
|Stock based compensation expense                                                                         |  |     | 0.7   |   |        |   | 0.6   |     |  |   | 0.5   |   |  |           |      |  |       |   | 5.6    |   |  |   | 7.4     |  
|(Gain) loss on sale or impairment of long lived assets                                                   |  |     |       |   |        |   |       |     |  |   |       |   |  |           |       |  |       |   | (2.5   | ) |  |   | (2.5    | )
|Realized gain on long term investments                                                                   |  |     |       |   |        |   |       |     |  |   |       |   |  |           |       |  |       |   | (18.7  | ) |  |   | (18.7   | )
|Investment income                                                                                        |  |     |       |   |        |   |       |     |  |   |       |   |  |           |       |  |       |   | (29.0  | ) |  |   | (29.0   | )
|Other operating credits and charges, net                                                                 |  |     |       |   |        |   |       |     |  |   |       |   |  |           |       |  |       |   | 1.6    |   |  |   | 1.6     |  
|Other than temporary investment impairment                                                               |  |     |       |   |        |   |       |     |  |   |       |   |  |           |       |  |       |   | 2.0    |   |  |   | 2.0     |  
|Early debt extinguishment                                                                                |  |     |       |   |        |   |       |     |  |   |       |   |  |           |       |  |       |   | 20.7   |   |  |   | 20.7    |  
|                                                                                                         |  |     |       |   |        |   |       |     |  |   |       |   |  |           |       |  |       |   |        |   |  |   |         |  
|Adjusted EBITDA from continuing operations                                                               |  | $   | (29.2 | ) |        | $ | 48.4  |     |  | $ | (20.4 | ) |  | $         | 11.5  |  |       | $ | (54.1  | ) |  | $ | (43.8   | )
|                                                                                                         |  |     |       |   |        |   |       |     |  |   |       |   |  |           |       |  |       |   |        |   |  |   |         |  



27



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|                                                                                                         |  |     |        |   |        |   |       |     |  |   |       |   |  |           |       |   |       |   |        |   |  |   |         |  
|-------------------------------------------------------------------------------------------------------- |  | --- | ------ | - | ------ | - | ----- | --- |  | - | ----- | - |  | --------- | ----- | - | ----- | - | ------ | - |  | - | ------- | -
|Year Ended December 31, 2008                                                                             |  | OSB |        |   | Siding |   |       | EWP |  |   | Other |   |  | Corporate |       |   | Total |  
|Sales                                                                                                    |  | $   | 623.2  |   |        | $ | 428.6 |     |  | $ | 234.5 |   |  | $         | 96.4  |   |       | $ | (3.5   | ) |  | $ | 1,379.2 |  
|                                                                                                         |  |     |        |   |        |   |       |     |  |   |       |   |  |           |       |   |       |   |        |   |  |   |         |  
|Depreciation and amortization                                                                            |  |     | 49.6   |   |        |   | 20.5  |     |  |   | 15.8  |   |  |           | 9.0   |   |       |   | 5.5    |   |  |   | 100.4   |  
|Cost of sales and selling and administrative                                                             |  |     | 717.5  |   |        |   | 405.3 |     |  |   | 259.4 |   |  |           | 91.1  |   |       |   | 76.3   |   |  |   | 1,549.6 |  
|(Gain) loss on sale or impairment of long lived assets                                                   |  |     |        |   |        |   |       |     |  |   |       |   |  |           |       |   |       |   | 9.0    |   |  |   | 9.0     |  
|Goodwill impairment                                                                                      |  |     |        |   |        |   |       |     |  |   |       |   |  |           |       |   |       |   | 273.5  |   |  |   | 273.5   |  
|Other operating credits and charges, net                                                                 |  |     |        |   |        |   |       |     |  |   |       |   |  |           |       |   |       |   | 90.3   |   |  |   | 90.3    |  
|                                                                                                         |  |     |        |   |        |   |       |     |  |   |       |   |  |           |       |   |       |   |        |   |  |   |         |  
|Total operating costs                                                                                    |  |     | 767.1  |   |        |   | 425.8 |     |  |   | 275.2 |   |  |           | 100.1 |   |       |   | 454.6  |   |  |   | 2,022.8 |  
|                                                                                                         |  |     |        |   |        |   |       |     |  |   |       |   |  |           |       |   |       |   |        |   |  |   |         |  
|Loss from operations                                                                                     |  |     | (143.9 | ) |        |   | 2.8   |     |  |   | (40.7 | ) |  |           | (3.7  | ) |       |   | (458.1 | ) |  |   | (643.6  | )
|Investment income                                                                                        |  |     |        |   |        |   |       |     |  |   |       |   |  |           |       |   |       |   |        |   |  |   |        |  
|Total non-operating income (expense)                                                                     |  |     |        |   |        |   |       |     |  |   |       |   |  |           |       |   |       |   | (108.4 | ) |  |   | (108.4  | )
|Income (loss) before income taxes and equity in earnings of unconsolidated affiliates                    |  |     | (143.9 | ) |        |   | 2.8   |     |  |   | (40.7 | ) |  |           | (3.7  | ) |       |   | (566.5 | ) |  |   | (752.0  | )
|Provision (benefit) for income taxes                                                                     |  |     |        |   |        |   |       |     |  |   |       |   |  |           |       |   |       |   | (201.5 | ) |  |   | (201.5  | )
|Equity in (income) loss of unconsolidated affiliates                                                     |  |     | 10.1   |   |        |   |       |     |  |   | (0.7  | ) |  |           | 3.2   |   |       |   |        |   |  |   | 12.6    |  
|                                                                                                         |  |     |        |   |        |   |       |     |  |   |       |   |  |           |       |   |       |   |        |   |  |   |         |  
|Income (loss) from continuing operations                                                                 |  |     | (154.0 | ) |        |   | 2.8   |     |  |   | (40.0 | ) |  |           | (6.9  | ) |       |   | (365.0 | ) |  |   | (563.1  | )
|                                                                                                         |  |     |        |   |        |   |       |     |  |   |       |   |  |           |       |   |       |   |        |   |  |   |         |  
|Reconciliation of income (loss) from continuing operations to adjusted EBITDA from continuing operations |  |     |        |   |        |   |       |     |  |   |       |   |  |           |       |   |       |   |        |   |  |   |         |  
|Income (loss) from continuing operations                                                                 |  |     | (154.0 | ) |        |   | 2.8   |     |  |   | (40.0 | ) |  |           | (6.9  | ) |       |   | (365.0 | ) |  |   | (563.1  | )
|Income tax benefit                                                                                       |  |     |        |   |        |   |       |     |  |   |       |   |  |           |       |   |       |   | (201.5 | ) |  |   | (201.5  | )
|Interest expense, net of capitalized interest                                                            |  |     |        |   |        |   |       |     |  |   |       |   |  |           |       |   |       |   | 61.2   |   |  |   | 61.2    |  
|Depreciation and amortization                                                                            |  |     | 49.6   |   |        |   | 20.5  |     |  |   | 15.8  |   |  |           | 9.0   |   |       |   | 5.5    |   |  |   | 100.4   |  
|                                                                                                         |  |     |        |   |        |   |       |     |  |   |       |   |  |           |       |   |       |   |        |   |  |   |         |  
|EBITDA from continuing operations                                                                        |  |     | (104.4 | ) |        |   | 23.3  |     |  |   | (24.2 | ) |  |           | 2.1   |   |       |   | (499.8 | ) |  |   | (603.0  | )
|                                                                                                         |  |     |        |   |        |   |       |     |  |   |       |   |  |           |       |   |       |   |        |   |  |   |         |  
|Stock based compensation expense                                                                         |  |     | 1.3    |   |        |   | 0.7   |     |  |   | 0.6   |   |  |           | 0.1   |   |       |   | 7.0    |   |  |   | 9.7     |  
|(Gain) loss on sale or impairment of long lived assets                                                   |  |     |        |   |        |   |       |     |  |   |       |   |  |           |       |   |       |   | 9.0    |   |  |   | 9.0     |  
|Other operating credits and charges, net                                                                 |  |     |        |   |        |   |       |     |  |   |       |   |  |           |       |   |       |   | 90.3   |   |  |   | 90.3    |  
|Investment income                                                                                        |  |     |        |   |        |   |       |     |  |   |       |   |  |           |       |   |       |   | (51.8  | ) |  |   | (51.8   | )
|Other than temporary investment impairment                                                               |  |     |        |   |        |   |       |     |  |   |       |   |  |           |       |   |       |   | 118.6  |   |  |   | 118.6   |  
|Goodwill impairment                                                                                      |  |     |        |   |        |   |       |     |  |   |       |   |  |           |       |   |       |   | 273.5  |   |  |   | 273.5   |  
|                                                                                                         |  |     |        |   |        |   |       |     |  |   |       |   |  |           |       |   |       |   |        |   |  |   |         |  
|Adjusted EBITDA from continuing operations                                                               |  | $   | (103.1 | ) |        | $ | 24.0  |     |  | $ | (23.6 | ) |  | $         | 2.2   |   |       | $ | (53.2  | ) |  | $ | (153.7  | )
|                                                                                                         |  |     |        |   |        |   |       |     |  |   |       |   |  |           |       |   |       |   |        |   |  |   |         |  

RESULTS OF OPERATIONS

We reported a net loss attributable to LP of $39.0 million ($0.30 per diluted share) in 2010, which was comprised of a loss from continuing operations attributed to LP of $32.6 million ($0.25 per diluted
share) and a loss from discontinued operations of $6.4 million ($0.05 per diluted share). This compares to a net loss attributable to LP of $120.9 million ($1.11 per diluted share) in 2009, which was comprised of a loss from continuing operations
attributed to LP of $115.6 million ($1.06 per diluted share) and a loss from discontinued operations of $5.3 million ($0.05 per diluted share). We reported a net loss attributable to LP of $576.6 million ($5.60 per diluted share) in 2008, which was
comprised of loss from continuing operations attributed to LP of $562.9 million ($5.47 per diluted share) and a loss from discontinued operations of $13.7 million ($0.13 per diluted share).



28



---

Net sales in 2010 were $1.4 billion, an increase of 30% from 2009 sales of
$1.1 billion. Sales in 2009 as compared to 2008 were lower by 23%. The increase in sales in 2010 as compared to 2009 was driven by higher sales across all product lines as the North American housing market improved slightly over the prior year.
The decrease in 2009 was primarily due to significantly reduced volumes across all product lines as the North America housing market slowed significantly as compared to 2008 with product sales prices remaining relatively flat.

Our results of operations for each of our segments are discussed below, as are results of operations for the other category
which comprises other products that are not individually significant. See Note 25 of the Notes to the financial statements included in item 8 of this report for further information regarding our segments.

OSB

Our OSB segment
manufactures and distributes OSB structural panel products. OSB is an innovative, affordable and environmentally smart product made from wood strands arranged in layers and bonded with resin. We believe we are the largest and one of the most
efficient producers of OSB in North America.

According to FEA, it is estimated for 2010 that OSB accounted for approximately
58% of the structural panel consumption in North America with plywood accounting for the remainder. We estimate that the overall North American structural panel market (based upon 2010 housing starts) was 26.9 billion square feet with the OSB market
comprising an estimated 15.5 billion square feet of this market. Based upon our production in 2010 of 3.0 billion square feet (including our joint venture OSB mill with Canfor Corporation), we estimate that we account for 19% of the North American
OSB market and 11% of the overall North American structural panel market.

To enhance our industry leading position in the OSB
business, we plan to: (1) leverage our expertise in OSB to capitalize on new opportunities for revenue growth through new product lines; (2) improve net realizations relative to weighted-average OSB regional pricing; (3) reduce costs
and improve throughput and recovery by continuing to focus on efficiency, raw materials cost reductions and logistics; and (4) manage our capacity to meet our customers expected needs for OSB demand.

OSB is manufactured through the use of wood strands arranged in layers and bonded with resins and wax. Significant cost inputs to produce
OSB and approximate breakdown percentages for the year ended December 31, 2010 include wood (31%), resin and wax (21%), labor and burden (17%), utilities (7%) and manufacturing and other (24%).

Segment sales, operating profits (losses) and adjusted EBITDA from continuing operations for this segment were as follows:



|                                           |  |      |       |  |      |   |       |      |  |   |                     |   |  |             |     |   |  |  |     |   
|------------------------------------------ |  | ---- | ----- |  | ---- | - | ----- | ---- |  | - | ------------------- | - |  | ----------- | --- | - |  |  | --- | --
|Dollar amounts in millions                 |  |      |       |  |      |   |       |      |  |   | Increase (decrease) |  
|Year ended December 31,                    |  | 2010 |       |  | 2009 |   |       | 2008 |  |   | 2010  2009         |   |  | 2009  2008 |    
|Sales                                      |  | $    | 602.7 |  |      | $ | 408.8 |      |  | $ | 623.2               |   |  |             | 47  | % |  |  | (34 | %)
|Operating profits (losses)                 |  | $    | 25.8  |  |      | $ | (65.1 | )    |  | $ | (154.0              | ) |  |             | 140 | % |  |  | 58  | % 
|Adjusted EBITDA from continuing operations |  | $    | 64.2  |  |      | $ | (29.2 | )    |  | $ | (103.1              | ) |  |             | 320 | % |  |  | 72  | % 

Percent changes in average
sales prices and unit shipments for the year ended 2010 compared to 2009 and 2009 compared to 2008 were as follows:



|    |  |                          |    |   |                  |  |    |                          |  |  |               |    |  |  |     |   
|--- |  | ------------------------ | -- | - | ---------------- |  | -- | ------------------------ |  |  | ------------- | -- |  |  | --- | --
|    |  | 2010 versus 2009         |    |   | 2009 versus 2008 | 
|    |  | Average NetSelling Price |    |   | UnitShipments    |  |    | Average NetSelling Price |  |  | UnitShipments |   
|OSB |  |                          | 28 | % |                  |  | 15 | %                        |  |  | (1            | %) |  |  | (31 | %)



29



---

2010 compared to 2009

OSB prices increased compared to the corresponding periods of 2009. The increase in OSB prices was likely due to narrowing of the gap between supply and demand based upon currently operating facilities
across the industry, as well as raw material shortages due to weather related issues during the second quarter of 2010. The increase in selling price favorably impacted net sales by approximately $124 million and operating profits by $107 million
for the year as compared to the corresponding period of 2009. As compared to 2009, the increase in sales volume was primarily due to increased demand as well as inventory restocking by our customers after dramatic declines in 2009.

Compared to 2009, the primary factor that led to improved operating results was the increase in commodity OSB sales prices. This increase
was offset by an increase in our Canadian dollar denominated manufacturing costs and certain raw materials. The Canadian dollar has strengthened significantly from 2009, which causes our Canadian production costs stated in U.S. dollars to increase.

2009 compared to 2008

OSB prices remained relatively flat in 2009 as compared to 2008; however the pricing is significantly below cycle average pricing due to dramatically lower demand from housing. The decrease in selling
prices unfavorably impacted net sales and operating losses by about $5 million for the year ended December 31, 2009 as compared to the corresponding period of 2008. As compared to 2008, the decline in sales volume was primarily due to our
decision to operate our facilities to maximize cash flow, and accordingly, to set minimum pricing levels in various regions which we would not sell below. In order to manage to lower sales demand, we continued the curtailment of our Silsbee, TX;
Athens, GA; Chambord, Quebec, and Thomasville, AL operations as well as other production curtailments throughout our system to balance supply and demand. Prior to year end, we decided to permanently shut down the Silsbee, TX and Athens, GA
operations and now hold those facilities for sale for non-OSB production.

Compared to 2008, the primary factors for decreased
operating losses were reductions in operating costs due to reduced sales volumes, lower prices on petroleum based raw materials used in manufacturing and a decrease in our Canadian dollar denominated manufacturing costs.

Siding

Our siding
segment produces and markets wood-based siding and related accessories, interior hardboard (exited in mid-2009) and commodity OSB products. We believe that we are a leading wood composite exterior siding producer in North America. We manufacture
exterior siding and other cladding products for the residential and commercial building markets. Additionally, we are seeking to optimize our current capacity by extending the hardboard lifecycle through innovative new products and features.

Our strategy is to drive product innovation by utilizing our technological expertise in wood and wood composites to better
address the needs of our customers. We intend to increase our product offerings and production capacity of higher margin, value-added products through the addition of lower cost plants or the conversion of OSB plants from commodity structural panel
production to OSB-based exterior siding products.

Segment sales, operating profits and adjusted EBITDA from continuing
operations for this segment were as follows:



|                                           |  |      |       |  |      |   |       |      |  |   |                     |  |  |             |    |   |  |  |     |   
|------------------------------------------ |  | ---- | ----- |  | ---- | - | ----- | ---- |  | - | ------------------- |  |  | ----------- | -- | - |  |  | --- | --
|Dollar amounts in millions                 |  |      |       |  |      |   |       |      |  |   | Increase (decrease) | 
|Year ended December 31,                    |  | 2010 |       |  | 2009 |   |       | 2008 |  |   | 2010  2009         |  |  | 2009  2008 |   
|Sales                                      |  | $    | 427.8 |  |      | $ | 379.4 |      |  | $ | 428.6               |  |  |             | 13 | % |  |  | (11 | %)
|Operating profits (losses)                 |  | $    | 51.3  |  |      | $ | 29.3  |      |  | $ | 2.8                 |  |  |             | 75 | % |  |  | 946 | % 
|Adjusted EBITDA from continuing operations |  | $    | 70.0  |  |      | $ | 48.4  |      |  | $ | 24.0                |  |  |             | 45 | % |  |  | 102 | % 



30



---

Sales in this segment by product line were as follows:



|                                                    |  |      |       |  |      |   |       |      |  |   |                     |  |  |             |    |   |  |  |     |   
|--------------------------------------------------- |  | ---- | ----- |  | ---- | - | ----- | ---- |  | - | ------------------- |  |  | ----------- | -- | - |  |  | --- | --
|Dollar amount in millions                           |  |      |       |  |      |   |       |      |  |   | Increase (decrease) | 
|Year ended December 31,                             |  | 2010 |       |  | 2009 |   |       | 2008 |  |   | 2010  2009         |  |  | 2009  2008 |   
|SmartSide®
siding                                   |  | $    | 324.2 |  |      | $ | 293.9 |      |  | $ | 317.2               |  |  |             | 10 | % |  |  | (7  | %)
|Commodity OSB                                       |  |      | 38.6  |  |      |   | 28.2  |      |  |   | 36.4                |  |  |             | 37 | % |  |  | (23 | %)
|Canexel siding and other hardboard related products |  |      | 65.0  |  |      |   | 57.3  |      |  |   | 75.0                |  |  |             | 13 | % |  |  | (24 | %)
|                                                    |  |      |       |  |      |   |       |      |  |   |                     |  |  |             |    |   |  |  |     |   
|Total                                               |  | $    | 427.8 |  |      | $ | 379.4 |      |  | $ | 428.6               |  |  |             |    |   |  |  |     |   
|                                                    |  |      |       |  |      |   |       |      |  |   |                     |  |  |             |    |   |  |  |     |   

Percent changes in average sales prices and unit shipments for the year ended 2010 compared to
2009 and 2009 compared to 2008 are as follows:



|                  |  |                          |    |   |                  |  |    |                          |  |  |               |    |  |  |     |   
|----------------- |  | ------------------------ | -- | - | ---------------- |  | -- | ------------------------ |  |  | ------------- | -- |  |  | --- | --
|                  |  | 2010 versus 2009         |    |   | 2009 versus 2008 | 
|                  |  | Average NetSelling Price |    |   | UnitShipments    |  |    | Average NetSelling Price |  |  | UnitShipments |   
|SmartSide®
siding |  |                          |   |   |                  |  | 11 | %                        |  |  | 3             | %  |  |  | (8  | %)
|Commodity OSB     |  |                          | 32 | % |                  |  | (2 | %)                       |  |  | (2            | %) |  |  | (15 | %)
|Canexel siding    |  |                          | 9  | % |                  |  | 8  | %                        |  |  | (4            | %) |  |  | (20 | %)

2010 compared to 2009

Sales volumes were higher across SmartSide® siding and Canexel siding due to slightly improved housing starts as well as increased market penetration in non-traditional markets such as storage sheds. Our
Canexel sales volumes increased in 2010 as compared to 2009 due to increases in export sales and continued penetration in Canadian markets. Sales prices in our SmartSide® siding product line for 2010 as compared to 2009 remained constant. In our Canexel product line, sales prices increased in 2010 as compared to 2009 due to the impact
of the strengthening Canadian dollar as a majority of these sales are made in Canada. Additionally, one of the siding mills in this segment also produces commodity OSB, which in 2010 experienced a significant increase in price on generally flat
volumes.

Overall, the improvement in operating results for our siding segment for 2010 compared to 2009 was primarily due to
increased sales volume and improved efficiencies in operations. Additionally, the OSB produced in this segment provided approximately a $9 million improvement in profits as a result of the improvement in OSB price.

2009 compared to 2008

Sales volumes were lower across SmartSide® siding, commodity OSB
and Canexel siding due to significantly reduced housing starts. Our SmartSide business was able to partially offset these declines through improvements in the repair and remodel markets. Our Canexel sales were also adversely affected by our decision
to exit our doorskin and 16 siding business in early 2009. Sales prices in our SmartSide® siding product
line for 2009 as compared to 2008 were slightly higher due to changes in product mix with specific product prices remaining generally constant. In our Canexel product line, sales prices decreased in 2009 as compared to 2008 due to the impact of the
weakening Canadian dollar as a majority of these sales are made in Canada, as well as the changing product mix as we exited the doorskin and 16 siding lines.

Overall, the improvement in operating results for our siding segment for 2009 compared to 2008 was primarily due to reductions in the cost of petroleum-based raw materials, optimized production scheduling
and efficiencies in other manufacturing costs that offset volume declines.



31



---

Engineered Wood Products

Our EWP segment manufactures and distributes LVL, I-Joists, LSL (which began production in the second quarter of 2008) and other related products. This segment also includes the sale of I-Joist and LVL
products produced by our joint venture with AbitibiBowater and under a sales and marketing arrangement with Murphy Plywood. Included in this segment is a plywood mill, which primarily produces plywood as a by-product from the LVL production process.

Our strategy is to strengthen our brand name recognition in the EWP market by enhancing our product mix and quality,
providing superior technical support to our customers and leveraging our sales and marketing relationships to cross-sell our EWP products. Additionally, we are seeking to drive costs down by rationalizing our production capacity across geographic
areas and improving operating efficiencies in our manufacturing facilities.

Segment sales, operating profits (losses) and
adjusted EBITDA from continuing operations for this segment were as follows:



|                                           |  |      |       |   |      |   |       |      |  |   |                     |   |  |             |    |   |  |  |     |   
|------------------------------------------ |  | ---- | ----- | - | ---- | - | ----- | ---- |  | - | ------------------- | - |  | ----------- | -- | - |  |  | --- | --
|Dollar amount in millions                  |  |      |       |   |      |   |       |      |  |   | Increase (decrease) |  
|Year ended December 31,                    |  | 2010 |       |   | 2009 |   |       | 2008 |  |   | 2010  2009         |   |  | 2009  2008 |   
|Sales                                      |  | $    | 192.0 |   |      | $ | 157.7 |      |  | $ | 234.5               |   |  |             | 22 | % |  |  | (33 | %)
|Operating profits (losses)                 |  | $    | (21.3 | ) |      | $ | (33.1 | )    |  | $ | (40.0               | ) |  |             | 36 | % |  |  | 17  | % 
|Adjusted EBITDA from continuing operations |  | $    | (7.6  | ) |      | $ | (20.4 | )    |  | $ | (23.6               | ) |  |             | 63 | % |  |  | 14  | % 

Sales in this segment by
product line were as follows:



|                          |  |      |       |  |      |   |       |      |  |   |                     |  |  |             |    |   |  |  |     |   
|------------------------- |  | ---- | ----- |  | ---- | - | ----- | ---- |  | - | ------------------- |  |  | ----------- | -- | - |  |  | --- | --
|Dollar amount in millions |  |      |       |  |      |   |       |      |  |   | Increase (decrease) | 
|Year ended December 31,   |  | 2010 |       |  | 2009 |   |       | 2008 |  |   | 2010  2009         |  |  | 2009  2008 |   
|LVL / LSL                 |  | $    | 92.2  |  |      | $ | 74.0  |      |  | $ | 96.2                |  |  |             | 25 | % |  |  | (23 | %)
|I-joist                   |  |      | 70.4  |  |      |   | 63.6  |      |  |   | 92.1                |  |  |             | 11 | % |  |  | (31 | %)
|Related products          |  |      | 29.4  |  |      |   | 20.1  |      |  |   | 46.2                |  |  |             | 46 | % |  |  | (56 | %)
|                          |  |      |       |  |      |   |       |      |  |   |                     |  |  |             |    |   |  |  |     |   
|Total                     |  | $    | 192.0 |  |      | $ | 157.7 |      |  | $ | 234.5               |  |  |             |    |   |  |  |     |   
|                          |  |      |       |  |      |   |       |      |  |   |                     |  |  |             |    |   |  |  |     |   

Percent changes in average sales prices and unit shipments for the year ended 2010 compared to
2009 and 2009 compared to 2008 are as follows:



|        |  |                          |   |   |                  |  |    |                          |  |  |               |    |  |  |     |   
|------- |  | ------------------------ | - | - | ---------------- |  | -- | ------------------------ |  |  | ------------- | -- |  |  | --- | --
|        |  | 2010 versus 2009         |   |   | 2009 versus 2008 | 
|        |  | Average NetSelling Price |   |   | UnitShipments    |  |    | Average NetSelling Price |  |  | UnitShipments |   
|LVL/LSL |  |                          | 9 | % |                  |  | 12 | %                        |  |  | (7            | %) |  |  | (18 | %)
|I-joist |  |                          | 6 | % |                  |  | 3  | %                        |  |  | (4            | %) |  |  | (28 | %)

2010 compared to 2009

Sales volumes in both LVL/LSL and I-Joist increased during 2010 as compared to 2009 due to higher housing demand as well as customer
inventory increases. Net average selling prices increased in I-Joist and LVL due to price adjustments implemented in the early part of the second quarter of 2010 and, in LVL/LSL, due to changes in product mix.

Results of operations for 2010 as compared to the prior year improved primarily due to continued improvements at our LSL mill and
increases in sales price and volumes across all product lines.



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2009 compared to 2008

Sales volumes declined in both LVL/LSL and I-joist products during 2009 as compared to 2008. These declines were attributed to significantly reduced level of housing starts. Net average selling prices
declined as we continued to see price pressure caused by lower demand. Additionally, during the second half of 2008, we introduced LSL which is a lower priced substitute for LVL in certain applications.

Results of operations for EWP for the year ended December 31, 2009 as compared to the prior year improved primarily due to continued
progress at our LSL mill and reductions in segment selling and administrative costs. Offsetting these improvements were the reductions in sales prices.

Other

Our other products category includes our moulding business, our
Brazilian joint venture and Chilean OSB facilities and our joint venture that produces and sells cellulose insulation. This category also includes our remaining timber and timberlands and other minor products, services and operations closed prior to
January 1, 2002.

Segment sales, operating profits (losses) and adjusted EBITDA from continuing operations for this
segment were as follows:



|                                           |  |      |       |  |      |   |       |      |  |   |                     |   |  |             |     |   |  |  |     |  
|------------------------------------------ |  | ---- | ----- |  | ---- | - | ----- | ---- |  | - | ------------------- | - |  | ----------- | --- | - |  |  | --- | -
|Dollar amount in millions                  |  |      |       |  |      |   |       |      |  |   | Increase (decrease) |  
|Year ended December 31,                    |  | 2010 |       |  | 2009 |   |       | 2008 |  |   | 2010  2009         |   |  | 2009  2008 |    
|Sales                                      |  | $    | 167.6 |  |      | $ | 117.0 |      |  | $ | 96.4                |   |  |             | 43  | % |  |  | 21  | %
|Operating profits (losses)                 |  | $    | 6.1   |  |      | $ | 0.8   |      |  | $ | (6.9                | ) |  |             | 688 | % |  |  | 112 | %
|Adjusted EBITDA from continuing operations |  | $    | 17.2  |  |      | $ | 11.5  |      |  | $ | 2.2                 |   |  |             | 51  | % |  |  | 379 | %

Sales in this segment by
product line were as follows:



|                          |  |      |       |  |      |   |       |      |  |   |                     |  |  |             |    |   |  |  |     |   
|------------------------- |  | ---- | ----- |  | ---- | - | ----- | ---- |  | - | ------------------- |  |  | ----------- | -- | - |  |  | --- | --
|Dollar amount in millions |  |      |       |  |      |   |       |      |  |   | Increase (decrease) | 
|Year ended December 31,   |  | 2010 |       |  | 2009 |   |       | 2008 |  |   | 2010  2009         |  |  | 2009  2008 |   
|Mouldings                 |  | $    | 32.2  |  |      | $ | 29.3  |      |  | $ | 31.2                |  |  |             | 10 | % |  |  | (6  | %)
|Chilean operations        |  |      | 79.5  |  |      |   | 46.3  |      |  |   | 49.5                |  |  |             | 72 | % |  |  | (6  | %)
|Brazilian operation       |  |      | 45.2  |  |      |   | 32.8  |      |  |   | 4.3                 |  |  |             | 38 | % |  |  | 663 | % 
|Other                     |  |      | 10.7  |  |      |   | 8.6   |      |  |   | 11.4                |  |  |             | 26 | % |  |  | (25 | %)
|                          |  |      |       |  |      |   |       |      |  |   |                     |  |  |             |    |   |  |  |     |   
|Total                     |  | $    | 167.6 |  |      | $ | 117.0 |      |  | $ | 96.4                |  |  |             |    |   |  |  |     |   
|                          |  |      |       |  |      |   |       |      |  |   |                     |  |  |             |    |   |  |  |     |   

2010 compared to 2009

In our moulding business, we experienced an increase in sales due to continued strength in retail markets. In our Chilean operations, we saw significantly higher volumes as compared to 2009 due to
continued penetration in local markets, as well as response to the rebuilding efforts resulting from the Chilean earthquake. However, increased imports into Chile put pressure on our selling prices. We continue to see improvements in our Brazil
operations in terms of sales prices, volumes and manufacturing efficiencies. In our joint venture that produces and sells cellulose insulation, results of operations were relatively flat with the previous year. Overall, operating results associated
with these activities were positively impacted by improvements in our Chilean operations and reductions in carrying costs of our non-operating facilities.

2009 compared to 2008

In our moulding business, we saw a slight decline in
sales due to several one-time charges associated with customer incentives related to development of a new business relationship with Home Depot. In our Chilean operations, we saw lower volumes and pricing as compared to 2008 due to increased imports
into Chile, however



33



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operating results increased significantly due to one of our Chilean operations being curtailed during 2009 which reduced our costs and allowed us to maximize the production at the one operating
facility. For the Brazil operations, this was our first full year of operations. In our joint venture that produces and sells cellulose insulation, operations improved from the previous year as there was increased demand through retail channels.
Overall, operating results associated with these activities were positively impacted by improvements in our Chilean operations, the performance of our U.S. Greenfiber joint venture and reductions in carrying costs of our non-operating facilities.

GENERAL CORPORATE AND OTHER EXPENSE, NET

Net general corporate expense was $73.4 million in 2010 as compared to $76.5 million in 2009 and $85.3 million in 2008. General corporate and other expenses primarily consist of corporate overhead such as
wages and benefits for corporate personnel, professional fees, insurance, travel costs, non-product specific marketing and other expenses. The decrease in 2010 as compared to 2009 was due to reductions in pension costs associated with our freezing
our U.S. defined benefit pension plans as well as continued cost containment. The decrease in 2009 as compared to 2008 was due to the right sizing initiatives implemented in the later portion of 2008 which reduced management headcount,
eliminated corporate aircraft operations, limited corporate research and development and significantly reduced discretionary spending.

OTHER OPERATING CREDITS AND CHARGES, NET

For a discussion of other operating credits and charges, net, see Notes 1 and 16 of the Notes to the financial statements included in item 8 of this report.

GAIN (LOSS) ON SALES OF AND IMPAIRMENTS OF LONG-LIVED ASSETS

For a discussion of gain (loss) on sales of and impairments of long-lived assets, see Notes 1 and 17 of the Notes to the financial statements included in item 8 of this report.

NON-OPERATING INCOME (EXPENSE)

In 2010, net non-operating expense was $40.3 million compared to $36.2 million in 2009 and $108.4 million in 2008. Components of non-operating income (expenses) were as follows:



|                                               |  |                         |       |   |      |   |       |      |  |   |        |  
|---------------------------------------------- |  | ----------------------- | ----- | - | ---- | - | ----- | ---- |  | - | ------ | -
|                                               |  | Year ended December 31, |      
|Dollar amounts in millions                     |  | 2010                    |       |   | 2009 |   |       | 2008 | 
|Investment income                              |  | $                       | 18.0  |   |      | $ | 26.0  |      |  | $ | 56.0   |  
|Realized gains from sale of investments        |  |                         | 19.0  |   |      |   | 18.7  |      |  |   |       |  
|SERP market adjustments                        |  |                         | 1.4   |   |      |   | 3.0   |      |  |   | (4.2   | )
|                                               |  |                         |       |   |      |   |       |      |  |   |        |  
|Investment income                              |  |                         | 38.4  |   |      |   | 47.7  |      |  |   | 51.8   |  
|                                               |  |                         |       |   |      |   |       |      |  |   |        |  
|Other than temporary impairment of investments |  |                         | (17.0 | ) |      |   | (2.0  | )    |  |   | (118.6 | )
|                                               |  |                         |       |   |      |   |       |      |  |   |        |  
|Interest expense                               |  |                         | (60.8 | ) |      |   | (71.7 | )    |  |   | (64.2  | )
|Amortization of debt charges                   |  |                         | (3.1  | ) |      |   | (3.0  | )    |  |   | (0.6   | )
|Capitalized interest                           |  |                         |      |   |      |   | 0.1   |      |  |   | 3.6    |  
|                                               |  |                         |       |   |      |   |       |      |  |   |        |  
|Interest expense, net of capitalized interest  |  |                         | (63.9 | ) |      |   | (74.6 | )    |  |   | (61.2  | )
|                                               |  |                         |       |   |      |   |       |      |  |   |        |  
|Foreign currency gains (losses)                |  |                         | 2.2   |   |      |   | 13.4  |      |  |   | 19.6   |  
|Early debt extinguishment                      |  |                         |      |   |      |   | (20.7 | )    |  |   |       |  
|                                               |  |                         |       |   |      |   |       |      |  |   |        |  
|Other non-operating expense                    |  |                         | 2.2   |   |      |   | (7.3  | )    |  |   | 19.6   |  
|                                               |  |                         |       |   |      |   |       |      |  |   |        |  
|Total non-operating income (expense)           |  | $                       | (40.3 | ) |      | $ | (36.2 | )    |  | $ | (108.4 | )
|                                               |  |                         |       |   |      |   |       |      |  |   |        |  



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EQUITY IN EARNINGS OF UNCONSOLIDATED AFFILIATES

Over the last several years, we have entered into several joint venture arrangements. These include: (1) a joint venture with Casella
Waste Management Systems, Inc. to produce cellulose insulation; (2) a joint venture with Canfor Corporation to construct and operate an OSB mill in British Columbia; and (3) a joint venture with AbitibiBowater Inc. to construct and operate
two I-joist facilities in Quebec.

In August 2000, we and Casella Waste Management Systems, Inc., each contributed most of the
assets of our respective cellulose insulation operations to a joint venture, U.S. GreenFiber, LLC (GreenFiber). Pursuant to the Limited Liability Company Agreement, each company owns 50% of GreenFiber. GreenFiber elected to be treated as a
partnership for income tax purposes and therefore the entity is not taxed directly. The results of this operation are included within Other Products.

In 2003, we and Canfor Corporation, entered into an agreement to jointly construct an 820 million square foot OSB facility in British Columbia, Canada. Pursuant to the joint venture agreement, each
company owns 50% of the venture with LP being responsible for all North America sales from this facility. The joint venture with Canfor commenced operations as of November 2005. The results of this operation are included in our OSB segment.

In November 2002, we sold some of our I-joist manufacturing equipment to our joint venture with AbitibiBowater Inc. to
construct and operate an I-joist facility in Eastern Canada. Pursuant to the joint venture agreement, each company owns 50% of the venture. This venture commenced operations during 2003. In 2004, we initiated the construction of a second I-joist
facility with AbitibiBowater, Inc. that commenced operations in October 2005. The results of these operations are included in the EWP segment.

DISCONTINUED OPERATIONS

Included in discontinued operations for 2010, 2009 and 2008 are the carrying and warranty costs of mills that have been closed and
divested under our various restructuring plans. These operations include residual losses of mills divested in past years and associated warranty and other liabilities associated with these operations. The results of operations were as follows:



|                           |  |                         |       |   |      |   |      |      |  |   |       |  
|-------------------------- |  | ----------------------- | ----- | - | ---- | - | ---- | ---- |  | - | ----- | -
|                           |  | Year ended December 31, |      
|Dollar amounts in millions |  | 2010                    |       |   | 2009 |   |      | 2008 | 
|Sales                      |  |                         |      |   |      |   |     |      |  |   |      |  
|Operating losses           |  | $                       | (10.4 | ) |      | $ | (8.6 | )    |  | $ | (22.3 | )
|                           |  |                         |       |   |      |   |      |      |  |   |       |  
|                           |  | $                       | (10.4 | ) |      | $ | (8.6 | )    |  | $ | (22.3 | )
|                           |  |                         |       |   |      |   |      |      |  |   |       |  

2010 compared to 2009

Included in the loss on discontinued operations for 2010 is an increase in our warranty reserves associated with discontinued products of $7.1 million as well as residual costs associated with mills that
have been previously discontinued and sold.

2009 compared to 2008

Included in the loss on discontinued operations for 2009 is an increase in our warranty reserves associated with discontinued products of
$4.9 million as well as residual costs associated with mills that have been previously discontinued and sold.



35



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INCOME TAXES

In total, we recorded a tax benefit in continuing operations of $22.1 million in 2010, $63.4 million in 2009 and $201.5 million in 2008. For the year ended December 31, 2010, the primary difference
between the U.S. statutory rate of 35% and the effective rate on our continuing operations related to a non-deductible impairment loss related to LPs equity investment in Greenfiber, state income taxes and the effect of foreign tax rates and
the foreign currency translation. For the year ended December 31, 2009, the primary difference between the U.S. statutory rate of 35% and the effective rate on our continuing operations related to our foreign debt structure, state income taxes
and a valuation allowance established on state net operating loss carry forwards. For the year ended December 31, 2008, the primary difference between the U.S. statutory rate of 35% and the effective rate on our continuing operations related to
our foreign debt structure, state income taxes and the write-off of our goodwill. We paid $5.7 million of cash taxes and received $51.4 million in cash tax refunds in 2010 and expect to receive $18.7 million in related refunds from prior years in
2011.

DEFINED BENEFIT PENSION PLANS

We maintain several qualified and non-qualified defined benefit pension plans in the U.S. and Canada that cover a substantial portion of our employees. The measurement of liabilities related to these
plans is based on managements assumptions related to future events, including expected return on plan assets and rate of compensation increases. The discount rate reflects the rate at which benefits could be effectively settled on the
measurement date. We use corporate bond yields published by a recognized financial institution as an indicator of potential settlement rates. The projected payment for each year is discounted using the rates specified by the yield curve. The sum of
these discounted payments is the benefit obligation. The discount rate disclosed is the single rate applied to all projected payments that creates an equivalent obligation. Actual pension plan asset investment performance will either reduce or
increase unamortized pension losses at the end of any fiscal year, which ultimately affects future pension costs. See Note 13 of the Notes to the financial statements included in item 8 of this report for further information on these plans.

The table below quantifies the approximate impact on the U.S. plans (which account for approximately 82% of plan assets), as
of December 31, 2010, of a one-half percentage point decrease in our assumptions for discount rate and expected return on assets, holding other assumptions constant:



|                                          |  |   |      | 
|----------------------------------------- |  | - | ---- | 
|Dollars in millions                       |  |   |     
|Increase in annual costs for 2011:        |  |   |      | 
|Discount rate                             |  | $ | 0.1  | 
|Expected long-term rate of return         |  | $ | 1.0  | 
|                                          | 
|Increase in projected benefit obligation: |  |   |      | 
|Discount rate                             |  | $ | 14.3 | 

For our U.S. plans,
we used a long term rate of return assumption of 7.5% to calculate the 2009 and 2010 net periodic pension costs. For our Canadian plans, we used a long-term rate of return of 4.8% to 6.3% to calculate 2009 and 2010 net periodic pension costs. For
2010, our net periodic pension cost was $4.1 and we estimate for 2011, our net periodic pension cost will be $5.7 million. This estimate assumes that we will have no curtailment or settlement expenses in 2011. If a settlement or curtailment does
occur in 2011, this estimate may change significantly. We estimate in 2011, we will contribute approximately $10 to $12 million to our defined benefit pension plans.

LEGAL AND ENVIRONMENTAL MATTERS

For a discussion of legal and
environmental matters involving us and the potential impact thereof on our financial position, results of operations and cash flows, see Item 3 in this report as well as Note 18 in the Notes to the financial statements included in item 8 of
this report.



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Hardboard Siding Settlement Update

The following discussion should be read in conjunction with the discussion of our hardboard siding litigation set forth in Note 18 in the
Notes to the financial statements included in item 8 of this report.

Cumulative statistics as of December 31, 2010 under
hardboard settlements were as follows:



|                          |  |                  |        | 
|------------------------- |  | ---------------- | ------ | 
|                          |  | December 31,2010 |       
|Completed claims received |  |                  | 86,000 | 
|Claims dismissed          |  |                  | 13,000 | 
|Claims settled            |  |                  | 73,000 | 

The average payment
amount for settled claims as of December 31, 2010 was approximately $1,000. Dismissal of claims is typically the result of claims for products not produced by LP or claims that lack sufficient information or documentation after repeated efforts
to correct those deficiencies.

LIQUIDITY AND CAPITAL RESOURCES

Overview

Our principal sources of liquidity are existing cash and
investment balances, cash generated by our operations and our ability to borrow under such credit facilities as we may have in effect from time to time. We may also from time to time issue and sell equity, debt or hybrid securities or engage in
other capital market transactions.

Our principal uses of liquidity are paying the costs and expenses associated with our
operations, servicing outstanding indebtedness and making capital expenditures. We may also from time to time prepay or repurchase outstanding indebtedness, repurchase shares of our common stock and acquire assets or businesses that are
complementary to our operations. Any such repurchases may be commenced, suspended, discontinued or resumed, and the method or methods of effecting any such repurchases may be changed, at any time or from time to time without prior notice.

Operating Activities

During 2010, we generated $47.8 million of cash from operations as compared to $60.8 million in 2009. The decrease in cash provided from operations was related to higher inventories and higher pension
payments and lower tax refunds, as partially offset by lower operating losses. During the year, we received tax refunds of $45.7 million (net of payments). Trade receivables increased by $8.8 million due to higher sales in December of 2010 as
compared to the same period of 2009. As of December 31, 2010, our trade receivables balance was 99% current, which is comparable with prior years with no substantial changes in terms of sales. Non-trade receivables decreased by $1.8 million due
to lower interest receivables due to payments during 2010. Our accounts payable increased from the prior year primarily due to the increases in inventory as well as changes in our funding of our employee benefit programs. During the year, we made
$9.8 million in contingency payments.

During 2009, we generated $60.8 million of cash from operations as compared to a use of
cash of $142.5 million in 2008. The increase in cash provided by operations was related to an intense focus on cash generation as well as lower operating losses. During 2009, due to the depressed new construction market, we curtailed operating
production schedules at many of our facilities and reduced inventories throughout our process which allowed us to reduce our inventories by $57.2 million. During the year, we received tax refunds of $79.3 million (net of payments). Trade receivables
increased by $20.0 million due to higher sales in December of 2009 as compared to the same period of 2008. As of December 31, 2009, our trade receivables balance was 99% current, which is comparable with prior years with no substantial changes
in terms of sales. Non-trade receivables decreased by $51.9 million due to lower income tax receivables due to lower losses. Our accounts payable



37



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increased from the prior year primarily due to the increases in interest payable associated with the debt issued in 2009 and accruals for management incentive programs, with minimal increases in
trade payables. During the year, we made $12.9 million in contingency payments.

During 2008, we used $142.5 million of cash
in operations as compared to $9.6 million in 2007. The increase in cash used in operations was due to continued operating losses and increases in cash payments for contingencies. During 2008, inventories decreased by $29.9 million resulting from the
reductions in demand caused by slowing new construction activities offset by an increase in inventories associated with the inclusion of the Brazil operation in late 2008. Accounts receivable declined by $35.4 million due to significantly reduced
sales during December 2008 compared to 2007, with the percentage current remaining consistent with prior years. During 2008, we received $124.5 million in tax refunds and paid $73 million in legal settlements.

Investing Activities

During 2010, we generated $120.3 million in cash from investing activities. Capital expenditures for 2010 were $14.5 million primarily
related to maintenance capital. Additionally, our joint ventures refunded $4.9 million in advances made in past years. We received $21.8 million on the sale of investments with maturities in excess of 90 days. We received $115.1 million in principal
payments on our notes receivable from asset sales. We also received $3.3 million on the sale of assets and used $10.3 million in cash to collaterize certain long-term obligations. Additionally, included in accounts payable is $1.2 million related to
capital expenditures that had not yet been paid as of December 31, 2010.

During 2009, we generated $125.6 million in
cash from investing activities. Capital expenditures for 2009 were $9.6 million primarily related to maintenance capital. We received $50.3 million on the sale of investments with maturities in excess of 90 days. We also generated $57.5 million in
cash from the release of restricted cash related to the resolution of certain litigation matters as well as the refinancing of certain long-term obligations which no longer required cash collateralization. We received $20.0 million in principal
payments on our notes receivable from asset sales and $7.8 million on the sale of assets. Additionally, included in accounts payable is $1.2 million related to capital expenditures that had not yet been paid as of December 31, 2009.

During 2008, we generated approximately $111.0 million in cash from investing activities. Capital expenditures for 2008 were $99.4
million and related primarily to the costs associated with our LSL facility in Houlton, Maine. We also paid $56.5 million to purchase a 75% interest in an OSB mill in Brazil. Additionally, we contributed $5.5 million to our joint ventures for
working capital requirements. We also used approximately $216.0 million to purchase investments with maturities in excess of 90 days and received $421.6 million on the sale of these types of investments. We received $74.4 million in principal
payments on our notes receivable from asset sales. Additionally, included in accounts payable is $2.0 million related to capital expenditures that had not yet been paid as of December 31, 2008.

Capital expenditures in 2011 are expected not to exceed $50 million related to projects critical for continuing operations. Additionally
we anticipate paying $20 to $25 million in 2011 to purchase the remaining 25% of the Brazil operations, based upon the mandatory put and call associated with the original purchase agreement.

Financing Activities

In 2010, net cash used in financing activities was
$174.3 million. During 2010, we repaid $173.7 million in long-term debt which was comprised of $113.4 million of long-term debt associated with our limited recourse notes payable and $60.2 million of Senior Notes due in August of 2010.

In 2009, net cash provided by financing activities was $115.9 million. During 2009, we borrowed $320.5 million in long-term debt which
was comprised of $281.3 million from the sale of 375,000 units (discussed



38



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below) and $39.0 million of Chilean long-term debt and various other debt and capital lease obligations. We also repaid $318.8 million in long-term debt which included $20.0 million associated
with our limited recourse notes payable, $39 million outstanding under a credit facility associated with our Chilean facility, $139.8 million associated with our Senior Notes due in 2010, $95.3 million associated with Senior Secured Notes due in
2017 and $7.6 million associated with an industrial revenue bond. Additionally, we received net proceeds of $132.3 million from the issuance and sale of 20.7 million shares of stock through a public offering and paid $15.8 million in
transaction costs associated with the various financing activities.

In March 2009, we issued and sold 375,000 Units
consisting of (1) $375 million principal amount at maturity of 13% Senior Secured Notes due 2017 and (2) warrants to purchase 18,395,963 shares of our common stock at an exercise price of $1.39 per share, subject to adjustment in certain
circumstances and to mandatory cashless exercise provisions. The units were issued at a discount to the principal amount at maturity of the notes included therein resulting in aggregate gross proceeds of $281.3 million. Simultaneous with the closing
of the unit sale, we used a portion of the proceeds to retire $126.6 million aggregate principal amount of our 8.875% Senior Notes due 2010 for $126.0 million. Under the terms of the indenture governing our Senior Secured Notes due in 2017, we were
permitted, with the net proceeds of certain equity offerings, to redeem up to 35% of the aggregate principal amount at maturity of such Notes at a redemption price equal to 113% of their accreted value, plus accrued and unpaid interest. In September
2009, we completed a public offering of 20.7 million shares of common stock, which included the exercise of the overallotment option of 2.7 million shares, at a per share price of $6.75, raising $139.7 million before offering costs. In
connection with the offering, we paid $7.0 million in underwriting discounts and commissions and approximately $0.4 million in expenses. The net proceeds of the offering were $132.3 million a portion of which were used (in November 2009) to redeem
35% of our Senior Secured Notes due in 2017 ($131.3 million principal amount at maturity) at a price of $858.14 per $1,000 principal amount at maturity or $112.6 million. In connection with this repurchase, we recorded a loss on early debt
extinguishment of $21.1 million which included $3.7 million associated with the write-off of the related financing costs.

In
2008, net cash used in financing activities was $230.5 million. During 2008, we repaid our $125 million Canadian term loan (equivalent to $100.8 million in U.S. dollars at the time of payment) at maturity and also terminated and paid all amounts
outstanding under our Canadian demand facility. We also repaid $74 million of our limited recourse notes payable and paid cash dividends of $31.0 million. Additionally, we borrowed $14.0 million under a long term credit facility to fund our Chilean
expansion.

CREDIT AGREEMENTS

We have a credit facility which provides for a committed asset-based borrowing capacity of up to $100 million, with a $60 million sublimit for U.S. letters of credit and a $10 million sublimit for
Canadian letters of credit. The credit facility will end in September of 2012.

The availability of credit under the credit
facility is subject to a borrowing base, which is calculated based on certain percentages of accounts receivable and inventory and at any given time may limit the amount of borrowings and letters of credit otherwise available under the facility. In
addition, the credit facility contains a covenant requiring us to maintain a fixed charge coverage ratio of at least 1.1 to 1.0 at any time that our unused borrowing base capacity after adjustment to exclude certain past due trade payables falls
below $15 million. At December 31, 2010, we had $69.8 million of unused borrowing base capacity under the credit facility. This covenant effectively precludes us from using all or a portion of the last $15 million of our unused borrowing base
capacity, if, before or immediately after such use, we would not satisfy the minimum fixed charge coverage ratio. The credit facility allows us to pledge, as security for our reimbursement obligations in respect of letters of credit issued under the
facility, cash collateral in an amount not less than 105% of the of the stated amount of such letters of credit. The above-described preclusion to our utilization of $15 million of the capacity otherwise available under the facility does not apply
to such cash collateralized letters of credit. At December 31, 2010, we had no borrowings outstanding under the facility. Outstanding under this facility at December 31, 2010, were



39



---

$24.7 million in letters of credit which were collateralized by $26.3 million of cash. Based upon our available cash balances, we do not currently anticipate using this facility except to obtain
and maintain letters of credit. Additionally, we expect that our fixed charge coverage ratio may fall below 1.1 to 1.0 from time to time during 2011, and, accordingly we will be subject to the limitation on our ability to fully utilize our adjusted
borrowing base capacity as described above during such time. As a result, our ability to obtain and maintain non-cash collateralized letters of credit under this facility may become constrained to an amount that does not exceed the excess of our
adjusted borrowing base over $15 million.

Subject to certain exceptions, obligations under the credit facility are secured
by, among other things, a first-priority lien on our present and future receivables, inventory and certain general intangibles, and by a second-priority lien on substantially all of our domestic property, plant and equipment, and are guaranteed by
certain of our subsidiaries.

The credit facility contains customary covenants applicable to us and our subsidiaries, other
than certain unrestricted subsidiaries, including certain financial covenants as well as restrictions on, among other things, our ability to: incur debt; incur liens; declare or make distributions to our stockholders; make loans and investments;
repay debt; enter into mergers, acquisitions and other business combinations; form or acquire subsidiaries; amend or modify our governing documents; enter into hedging arrangements; engage in other businesses other than our business as currently
conducted; and enter into transactions with affiliates. The credit facility also contains customary events of default, the occurrence of which could result in the acceleration of our obligation to repay the indebtedness outstanding thereunder.

Obligations under the indenture governing our Senior Secured Notes due 2017 are, in general, secured by a first-priority lien
on the collateral that secures obligations under the credit facility on a second-priority basis, and by a second-priority lien on the collateral that secures obligations under the credit facility on a first-priority basis, subject to the terms of an
intercreditor agreement, and are guaranteed by the subsidiaries that guarantee obligations under the credit facility.

The
indenture contains customary covenants applicable to us and our subsidiaries, other than certain unrestricted subsidiaries, including restrictions on actions and activities that are restricted under the credit facility. The indenture also contains
customary events of default, the occurrence of which could result in acceleration of our obligations to repay the indebtedness outstanding thereunder.

As part of our refinancing strategy, LP Chile entered into a term loan agreement with Banco de Credito e Inversiones for UF 943,543.7391 (equivalent to $39 million at the time of inception). The loan
agreement has a term of 10 years with semi annual principal payments beginning in June of 2012. The loan bears interest at UF plus 5.50% per annum, and is secured by a first priority security interest in substantially all of the real property
owned by LP Chile. Additionally, we are required to maintain a letter of credit for the benefit of the lender in an amount equal to $12.6 million, subject to reduction based upon attainment of certain financial tests. We established such letter of
credit in the amount of $12.6 million, which is cash collateralized by approximately $13.2 million of cash. The loan contains various restrictive covenants and requires the maintenance by LP Chile of a debt to equity ratio of less than or equal to
1. If LP Chile is late in making payments, we will also be required to maintain a ratio of net debt to earnings before interest, taxes, depreciation and amortization (EBITDA) of less than or equal to 5.5 for 2010, 3.2 for 2011 and 2.5 for the
remainder of the loan period and a ratio of EBITDA to financial costs of at least 3. The loan agreement also contains customary events of default, the occurrence of which could result in acceleration of our obligations to repay the indebtedness
outstanding thereunder. Since this loan is denominated in other than U.S. dollars, the balance fluctuates based upon changes in the underlying currency rates. As of December 31, 2010, the balance of this loan was $42.3 million.



40



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OTHER LIQUIDITY MATTERS

As of December 31, 2010, we had $15.4 million ($61.5 million, par value) of principal invested in auction rate securities (ARS). The ARS held by us are securities with long-term nominal maturities
for which the interest rates were historically reset through a Dutch auction each month.

We review our marketable securities
routinely for other-than-temporary impairment. The primary factors LP uses to determine if an impairment charge must be recorded because a decline in value of the security is other-than-temporary include (i) whether the fair value of the
investment is significantly below its cost basis, (ii) the financial condition of the issuer of the security (including its credit rating), (iii) the length of time that the cost of the security has exceeded its fair value and
(iv) LPs intent and ability to retain the investment for a period of time sufficient to allow for any anticipated recovery in market value.

The table below provides additional detail as to the composition of our auction rate securities as well as the year of issue.



|                               |  |               |      |  |               |  |             | 
|------------------------------ |  | ------------- | ---- |  | ------------- |  | ----------- | 
|Dollar amounts in millions     |  |               |      |  |               | 
|As of December 31, 2010        |  | Original cost |      |  | Year of Issue | 
|Bank Trust Preferred notes     |  | $             | 30.0 |  |               |  | 2003 - 2004 | 
|Collateriazed Debt Obligations |  |               | 25.6 |  |               |  | 2003 - 2004 | 
|Corporate                      |  |               | 5.9  |  |               |  | 2006        | 
|                               |  |               |      |  |               |  |             | 
|                               |  | $             | 61.5 |  |               |  |             | 
|                               |  |               |      |  |               |  |             | 

During 2010, we sold $35.3 million (par value) of our ARS to a third party in an open market
transaction for $21.8 million plus accrued interest. As part of this transaction, we recorded a gain on sale of securities of $18.9 million, which represents a recovery of losses previously recorded as an Other-than-temporary impairment.

During 2009, we sold $55.0 million (par value) of our ARS pursuant to a tender offer for $21.5 million plus accrued interest. As part of
this transaction, we recorded a gain on sale of securities of $18.7 million, which represents a recovery of losses previously recorded as an Other-than-temporary impairment.

The estimated market value of our ARS holdings at December 31, 2010 was $15.4 million, which reflects a $46.1 million adjustment to the par value of $61.5 million. We intend to continue to offer our
ARS at auction and to consider other options, including alternative buyers and other potential transactions. We do not currently require our ARS to be liquidated in order to fund our day-to-day operations and we are prepared to hold them until
maturity, if necessary.

If uncertainties in the credit and capital markets continue, these markets deteriorate further or we
experience any ratings downgrades on any investments in our portfolio (including on ARS), we may incur additional impairments to our investment portfolio, which could negatively affect our financial condition, results of operations and cash flow.

Contingency Reserves

Contingency reserves, which represent an estimate of future cash needs for various contingencies (principally, payments for siding litigation settlements), totaled $32.9 million at December 31,
2010, of which $7 million is estimated to be payable within one year. As with all accounting estimates, there is inherent uncertainty concerning the reliability and precision of such estimates. As described above and in Note 18 of the
Notes to the financial statements included in item 8 of this report, the amounts ultimately paid in resolving these contingencies could exceed the current reserves by a material amount.



41



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Contractual Obligations

The table below summarizes our contractual obligations as of December 31, 2010 over the next several years. See discussion above concerning provisions that could accelerate the due dates on our
long-term debt.



|                                   |  |                        |      |  |      |   |      |      |  |   |       |  |  |      |      |  |  |   |      | 
|---------------------------------- |  | ---------------------- | ---- |  | ---- | - | ---- | ---- |  | - | ----- |  |  | ---- | ---- |  |  | - | ---- | 
|Dollars amounts in millions        |  | Payments due by period |     
|Contractual obligations            |  | 2011                   |      |  | 2012 |   |      | 2013 |  |   | 2014  |  |  | 2015 |     
|Long-term debt1                    |  | $                      | 12.4 |  |      | $ | 24.9 |      |  | $ | 103.1 |  |  | $    | 9.6  |  |  | $ | 8.8  | 
|Operating leases                   |  |                        | 6.8  |  |      |   | 3.6  |      |  |   | 3.3   |  |  |      | 3.3  |  |  |   | 3.4  | 
|Purchase obligations2              |  |                        | 1.0  |  |      |   |      |      |  |   |       |  |  |      |      |  |  |   |      | 
|Other long-term obligations3       |  |                        | 2.0  |  |      |   |      |      |  |   |       |  |  |      |      |  |  |   |      | 
|                                   |  |                        |      |  |      |   |      |      |  |   |       |  |  |      |      |  |  |   |      | 
|Total contractual cash obligations |  | $                      | 22.2 |  |      | $ | 28.5 |      |  | $ | 106.4 |  |  | $    | 12.9 |  |  | $ | 12.2 | 
|                                   |  |                        |      |  |      |   |      |      |  |   |       |  |  |      |      |  |  |   |      | 



|1 | Includes expected
interest payments as well as debt maturities.
|- | ---------------------------------------------------------------

|2 | The majority of our purchase obligations are take-or-pay contracts made in the ordinary course of business related to raw materials and utility
contracts. Other significant items included in the above table reflect purchase obligations related to legally binding commitments for capital projects. Purchase orders made in the ordinary course of business are excluded from the above table and
are cancelable without significant penalty.
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3 | Represents other
long-term liability amounts reflected in our consolidated balance sheet that have known payment streams including items such as pension contributions. Current pension funding regulations require LP to contribute $1-$2 million in 2011 to its defined
benefit pension plans, and we have included $2 million in the table above. However, LP anticipates contributing approximately $10 million to $12 million in 2011. Future years are not estimable due to the large number of factors involved in
determining minimum pension funding.
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Other Financing Arrangements

In connection with the sale of southern timber and timberlands in 2003, we received $26 million in cash and $410 million in notes
receivable from the purchasers of such timber and timberlands. In order to borrow funds in a cost-effective manner, LP issued $368.7 million of senior debt in 2003 in a private placement to unrelated third parties. Both the notes receivable and
notes payable mature in 2018. The notes payable are supported by a bank letter of credit. LPs reimbursement obligations under the letter of credit are secured by the notes receivable. In general, the creditors under this arrangement have no
recourse to LPs assets, other than the notes receivable. However, under certain circumstances, LP may be liable for certain liabilities (including liabilities associated with the marketing or remarketing of the notes payable and reimbursement
obligations, which are fully cash collateralized under the letter of credit supporting the notes payable) in an amount not to exceed 10% of the aggregate principal amount of the notes receivable. LPs maximum exposure in this regard was
approximately $41 million as of December 31, 2010 and December 31, 2009. The notes receivable are classified as long-term Notes receivable from asset sales and the notes payable are classified as long-term debt on the financial
statements included in item 8 of this report.

In connection with the sales of timberlands in California in 1997 and 1998, we
received notes from the purchasers totaling $403.8 million. The notes receivable were monetized through the issuance of notes payable in a private placement secured by the notes. Proceeds from the notes receivable from the purchasers are used to
fund payments required for the notes payable. To date, all installments under these notes have been received and the corresponding installments under the notes payable have been paid. The next installment is due in 2012. The notes receivable are
classified as long-term Notes receivable from asset sales and the notes payable are classified as long-term debt on the financial statements included in item 8 of this report.



42



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POTENTIAL IMPAIRMENTS

We continue to review several mills and investments for potential impairments. Management currently believes we have adequate support for the carrying value of each of these assets based upon the
anticipated cash flows that result from our estimates of future demand, pricing and production costs assuming certain levels of planned capital expenditures. As of December 31, 2010, the undiscounted cash flows for the facilities indefinitely
curtailed support the conclusion that no impairment is necessary for those facilities. However, should the markets for our products continue to remain at levels significantly below cycle average pricing or should we decide to invest capital in
alternative projects, it is possible that we will be required to record further impairment charges.

We also review from time
to time possible dispositions of various assets in light of current and anticipated economic and industry conditions, our strategic plan and other relevant factors. 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, we may be required to record impairment charges in
connection with decisions to dispose of assets.

PROSPECTIVE ACCOUNTING PRONOUNCEMENTS

See Note 1 for discussion of prospective accounting pronouncements in the Notes to the financial statements included in item 8 of this
report.



43



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|ITEM 7A. | Quantitative and Qualitative Disclosures about Market Risk
|-------- | ----------------------------------------------------------

A portion of our outstanding debt bears interest at variable rates and accordingly is sensitive to changes in interest rates. Interest
rate changes would result in gains or losses in the market value of our debt portfolio due to differences in market interest rates and the rates at the inception of the debt agreements. Offsetting the variable rate debt are variable rate notes
receivable from asset sales. Based upon the balances of the variable rate notes receivable from asset sales and the variable rate debt at December 31, 2010, a 100 basis point interest change would impact pre-tax net income and cash flows by
$0.4 million annually.

Our international operations have exposure to foreign currency rate risks, primarily due to
fluctuations in the Canadian dollar, Brazilian real and the Chilean peso. Although we have in the past entered into foreign exchange contracts associated with certain of our indebtedness and may continue to enter into foreign exchange contracts
associated with major equipment purchases to manage a portion of the foreign currency rate risk, we historically have not entered into material currency rate hedges with respect to our exposure from operations, although we may do so in the future.

Some of our products are sold as commodities and therefore sales prices fluctuate daily based on market factors over which we
have little or no control. The most significant commodity product we sell is OSB. Based upon an assumed annual production capacity (including our joint venture operation) of 5.0 billion square feet (3/8 basis) or 4.3 billion square feet
(7/16 basis), a $1 change in the annual average price on 7/16 basis would change annual pre-tax profits by approximately $4.3 million. Because of the decline in the housing market and related indefinitely curtailed facilities in our OSB
business, expected volumes will be significantly below our capacity.

We historically have not entered into material commodity
futures and swaps, although we may do so in the future.



44



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|ITEM 8. | Financial Statements and Supplementary Data
|------- | -------------------------------------------

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and
Stockholders of

Louisiana-Pacific Corporation

We have audited the accompanying consolidated balance sheets of Louisiana-Pacific Corporation and subsidiaries (the Company) as of December 31, 2010 and 2009, and the related consolidated
statements of income, cash flows, stockholders equity, and comprehensive income for each of the three years in the period ended December 31, 2010. These financial statements are the responsibility of the Companys management. Our
responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in
accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Louisiana-Pacific Corporation and subsidiaries as of December 31, 2010 and
2009, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2010, in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 1 to the consolidated financial statements, the Company adopted accounting guidance codified under Financial
Accounting Standards Codification Topic (ASC) 860, Transfers and Servicing and ASC 810, Consolidation on January 1, 2010.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Companys internal control over financial reporting as of
December 31, 2010, based on the criteria established in Internal ControlIntegrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 28, 2011 expressed an
unqualified opinion on the Companys internal control over financial reporting.

/s/ DELOITTE & TOUCHE LLP

Nashville, Tennessee

February 28, 2011



45



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Consolidated Balance Sheets

Dollar amounts in millions



|                                                                                                                                |  |              |          |   |      |   |          |  
|------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | -------- | - | ---- | - | -------- | -
|                                                                                                                                |  | December 31, |         
|                                                                                                                                |  | 2010         |          |   | 2009 |  
|ASSETS                                                                                                                          | 
|Current assets:                                                                                                                 |  |              |          |   |      |   |          |  
|Cash and cash equivalents                                                                                                       |  | $            | 389.3    |   |      | $ | 394.1    |  
|Receivables, net of allowance for doubtful accounts of $1.3 million and $1.2 million at December 31, 2010 and
December 31, 2009 |  |              | 66.8     |   |      |   | 59.9     |  
|Income tax receivable                                                                                                           |  |              | 18.7     |   |      |   | 52.7     |  
|Inventories                                                                                                                     |  |              | 151.9    |   |      |   | 140.4    |  
|Prepaid expenses and other current assets                                                                                       |  |              | 5.6      |   |      |   | 6.2      |  
|Deferred income taxes                                                                                                           |  |              | 23.4     |   |      |   | 1.4      |  
|Current portion of notes receivable from asset sales                                                                            |  |              |         |   |      |   | 115.1    |  
|Assets held for sale                                                                                                            |  |              | 57.9     |   |      |   | 69.1     |  
|                                                                                                                                |  |              |          |   |      |   |          |  
|Total current assets                                                                                                            |  |              | 713.6    |   |      |   | 838.9    |  
|                                                                                                                                |  |              |          |   |      |   |          |  
|Timber and timberlands                                                                                                          |  |              | 46.8     |   |      |   | 50.6     |  
|                                                                                                                                |  |              |          |   |      |   |          |  
|Property, plant and equipment, at cost:                                                                                         |  |              |          |   |      |   |          |  
|Land, land improvements and logging roads, net of road amortization                                                             |  |              | 125.3    |   |      |   | 123.4    |  
|Buildings                                                                                                                       |  |              | 280.2    |   |      |   | 283.0    |  
|Machinery and equipment                                                                                                         |  |              | 1,702.2  |   |      |   | 1,671.3  |  
|Construction in progress                                                                                                        |  |              | 4.8      |   |      |   | 3.4      |  
|                                                                                                                                |  |              |          |   |      |   |          |  
|                                                                                                                                |  |              | 2,112.5  |   |      |   | 2,081.1  |  
|Accumulated depreciation                                                                                                        |  |              | (1,195.4 | ) |      |   | (1,116.6 | )
|                                                                                                                                |  |              |          |   |      |   |          |  
|Net property, plant and equipment                                                                                               |  |              | 917.1    |   |      |   | 964.5    |  
|                                                                                                                                |  |              |          |   |      |   |          |  
|Notes receivable from asset sales                                                                                               |  |              | 533.5    |   |      |   | 533.5    |  
|Investments in and advances to affiliates                                                                                       |  |              | 110.0    |   |      |   | 138.5    |  
|Deferred debt costs                                                                                                             |  |              | 10.1     |   |      |   | 13.2     |  
|Long-term investments                                                                                                           |  |              | 15.4     |   |      |   | 26.3     |  
|Restricted cash                                                                                                                 |  |              | 31.1     |   |      |   | 20.8     |  
|Intangible assets, net of amortization                                                                                          |  |              | 2.2      |   |      |   | 3.0      |  
|Other assets                                                                                                                    |  |              | 24.9     |   |      |   | 23.6     |  
|Long-term deferred tax asset                                                                                                    |  |              | 5.9      |   |      |   | 7.4      |  
|                                                                                                                                |  |              |          |   |      |   |          |  
|Total assets                                                                                                                    |  | $            | 2,410.6  |   |      | $ | 2,620.3  |  
|                                                                                                                                |  |              |          |   |      |   |          |  

See Notes to the Financial Statements.



46



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Consolidated Balance Sheets (Continued)

Dollar amounts in millions, except per share



|                                                                                                     |  |              |         |   |      |   |         |  
|---------------------------------------------------------------------------------------------------- |  | ------------ | ------- | - | ---- | - | ------- | -
|                                                                                                     |  | December 31, |        
|                                                                                                     |  | 2010         |         |   | 2009 |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                 | 
|Current liabilities:                                                                                 |  |              |         |   |      |   |         |  
|Current portion of long-term debt                                                                    |  | $            | 0.2     |   |      | $ | 60.3    |  
|Current portion of limited recourse notes payable                                                    |  |              |        |   |      |   | 113.4   |  
|Short-term notes payable                                                                             |  |              |        |   |      |   | 0.4     |  
|Accounts payable and accrued liabilities                                                             |  |              | 127.8   |   |      |   | 123.0   |  
|Current portion of contingency reserves                                                              |  |              | 7.0     |   |      |   | 10.0    |  
|                                                                                                     |  |              |         |   |      |   |         |  
|Total current liabilities                                                                            |  |              | 135.0   |   |      |   | 307.1   |  
|                                                                                                     |  |              |         |   |      |   |         |  
|Long-term debt, excluding current portion                                                            |  |              | 714.5   |   |      |   | 706.3   |  
|Deferred income taxes                                                                                |  |              | 164.8   |   |      |   | 164.3   |  
|Contingency reserves, excluding current portion                                                      |  |              | 25.9    |   |      |   | 30.8    |  
|Other long-term liabilities                                                                          |  |              | 129.8   |   |      |   | 137.2   |  
|                                                                                                     |  |             
|Redeemable non-controlling interest                                                                  |  |              | 22.8    |   |      |   | 21.1    |  
|                                                                                                     |  |             
|Stockholders equity:                                                                                |  |              |         |   |      |   |         |  
|Preferred stock, $1 par value, 15,000,000 shares authorized, no shares issued                        |  |              |        |   |      |   |        |  
|Common stock, $1 par value, 200,000,000 shares authorized, 144,836,996 and 139,728,584 shares issued |  |              | 144.8   |   |      |   | 139.7   |  
|Additional paid-in capital                                                                           |  |              | 559.4   |   |      |   | 562.4   |  
|Retained earnings                                                                                    |  |              | 863.1   |   |      |   | 902.1   |  
|Treasury stock, 12,890,125 shares and 13,156,746 shares, at cost                                     |  |              | (279.9  | ) |      |   | (286.1  | )
|Accumulated comprehensive loss                                                                       |  |              | (69.6   | ) |      |   | (64.6   | )
|                                                                                                     |  |              |         |   |      |   |         |  
|Total stockholders equity                                                                           |  |              | 1,217.8 |   |      |   | 1,253.5 |  
|                                                                                                     |  |              |         |   |      |   |         |  
|Total liabilities and stockholders equity                                                           |  | $            | 2,410.6 |   |      | $ | 2,620.3 |  
|                                                                                                     |  |              |         |   |      |   |         |  



See Notes to the Financial
Statements.



47



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Consolidated Statements of Income

Dollar amounts in millions, except per share



|                                                                           |  |                         |         |   |      |   |         |      |  |   |         |  
|-------------------------------------------------------------------------- |  | ----------------------- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | -
|                                                                           |  | Year ended December 31, |        
|                                                                           |  | 2010                    |         |   | 2009 |   |         | 2008 | 
|Net sales                                                                  |  | $                       | 1,383.6 |   |      | $ | 1,061.0 |      |  | $ | 1,379.2 |  
|                                                                           |  |                         |         |   |      |   |         |      |  |   |         |  
|Operating costs and expenses:                                              |  |                         |         |   |      |   |         |      |  |   |         |  
|Cost of sales                                                              |  |                         | 1,187.9 |   |      |   | 999.3   |      |  |   | 1,407.8 |  
|Depreciation, amortization and cost of timber harvested                    |  |                         | 82.0    |   |      |   | 80.0    |      |  |   | 100.4   |  
|Selling and administrative                                                 |  |                         | 118.8   |   |      |   | 115.9   |      |  |   | 141.8   |  
|Impairment of goodwill                                                     |  |                         |        |   |      |   |        |      |  |   | 273.5   |  
|(Gain) loss on sale or impairment of long lived assets                     |  |                         | 2.4     |   |      |   | (2.5    | )    |  |   | 9.0     |  
|Other operating credits and charges, net                                   |  |                         | 0.1     |   |      |   | 1.6     |      |  |   | 90.3    |  
|                                                                           |  |                         |         |   |      |   |         |      |  |   |         |  
|Total operating costs and expenses                                         |  |                         | 1,391.2 |   |      |   | 1,194.3 |      |  |   | 2,022.8 |  
|                                                                           |  |                         |         |   |      |   |         |      |  |   |         |  
|Loss from operations                                                       |  |                         | (7.6    | ) |      |   | (133.3  | )    |  |   | (643.6  | )
|                                                                           |  |                         |         |   |      |   |         |      |  |   |         |  
|Non-operating income (expense):                                            |  |                         |         |   |      |   |         |      |  |   |         |  
|Interest expense, net of capitalized interest                              |  |                         | (63.9   | ) |      |   | (74.6   | )    |  |   | (61.2   | )
|Investment income                                                          |  |                         | 38.4    |   |      |   | 47.7    |      |  |   | 51.8    |  
|Other-than-temporary investment impairment                                 |  |                         | (17.0   | ) |      |   | (2.0    | )    |  |   | (118.6  | )
|Other non-operating income (expense)                                       |  |                         | 2.2     |   |      |   | (7.3    | )    |  |   | 19.6    |  
|                                                                           |  |                         |         |   |      |   |         |      |  |   |         |  
|Total non-operating income (expense)                                       |  |                         | (40.3   | ) |      |   | (36.2   | )    |  |   | (108.4  | )
|                                                                           |  |                         |         |   |      |   |         |      |  |   |         |  
|Loss before income taxes and equity in losses of unconsolidated affiliates |  |                         | (47.9   | ) |      |   | (169.5  | )    |  |   | (752.0  | )
|Benefit for income taxes                                                   |  |                         | (22.1   | ) |      |   | (63.4   | )    |  |   | (201.5  | )
|Equity in loss of unconsolidated affiliates                                |  |                         | 6.4     |   |      |   | 10.4    |      |  |   | 12.6    |  
|                                                                           |  |                         |         |   |      |   |         |      |  |   |         |  
|Loss from continuing operations                                            |  |                         | (32.2   | ) |      |   | (116.5  | )    |  |   | (563.1  | )
|                                                                           |  |                         |         |   |      |   |         |      |  |   |         |  
|Loss from discontinued operations before tax                               |  |                         | (10.4   | ) |      |   | (8.6    | )    |  |   | (22.3   | )
|Benefit for income taxes                                                   |  |                         | (4.0    | ) |      |   | (3.3    | )    |  |   | (8.6    | )
|                                                                           |  |                         |         |   |      |   |         |      |  |   |         |  
|Loss from discontinued operations                                          |  |                         | (6.4    | ) |      |   | (5.3    | )    |  |   | (13.7   | )
|                                                                           |  |                         |         |   |      |   |         |      |  |   |         |  
|Net loss                                                                   |  |                         | (38.6   | ) |      |   | (121.8  | )    |  |   | (576.8  | )
|                                                                           |  |                         |         |   |      |   |         |      |  |   |         |  
|Less: Net income (loss) attributed to non-controlling interest             |  |                         | 0.4     |   |      |   | (0.9    | )    |  |   | (0.2    | )
|                                                                           |  |                         |         |   |      |   |         |      |  |   |         |  
|Net loss attributed to Louisiana-Pacific Corporation                       |  | $                       | (39.0   | ) |      | $ | (120.9  | )    |  | $ | (576.6  | )
|                                                                           |  |                         |         |   |      |   |         |      |  |   |         |  
|Amounts attributed to LP Corporation common shareholders:                  |  |                         |         |   |      |   |         |      |  |   |         |  
|Loss from continuing operations, net of tax                                |  | $                       | (32.6   | ) |      | $ | (115.6  | )    |  | $ | (562.9  | )
|Loss from discontinued operations, net of tax                              |  |                         | (6.4    | ) |      |   | (5.3    | )    |  |   | (13.7   | )
|                                                                           |  |                         |         |   |      |   |         |      |  |   |         |  
|                                                                           |  | $                       | (39.0   | ) |      | $ | (120.9  | )    |  | $ | (576.6  | )
|                                                                           |  |                         |         |   |      |   |         |      |  |   |         |  
|Basic and diluted net loss per share:                                      |  |                         |         |   |      |   |         |      |  |   |         |  
|Loss per share from continuing operations                                  |  | $                       | (0.25   | ) |      | $ | (1.06   | )    |  | $ | (5.47   | )
|Loss per share from discontinued operations                                |  |                         | (0.05   | ) |      |   | (0.05   | )    |  |   | (0.13   | )
|                                                                           |  |                         |         |   |      |   |         |      |  |   |         |  
|Net loss per share                                                         |  | $                       | (0.30   | ) |      | $ | (1.11   | )    |  | $ | (5.60   | )
|                                                                           |  |                         |         |   |      |   |         |      |  |   |         |  
|Cash dividends per share of common stock                                   |  | $                       |        |   |      | $ |        |      |  | $ | 0.30    |  
|                                                                           |  |                         |         |   |      |   |         |      |  |   |         |  
|Average shares of common stock used to compute net loss per share:         |  |                         |         |   |      |   |         |      |  |   |         |  
|Basic and diluted                                                          |  |                         | 129.1   |   |      |   | 108.5   |      |  |   | 102.9   |  
|                                                                           |  |                         |         |   |      |   |         |      |  |   |         |  

See Notes to the Financial Statements.



48



---

Consolidated Statements of Cash Flows

Dollar amounts in millions



|                                                                                          |  |                         |        |   |      |   |        |      |  |   |        |  
|----------------------------------------------------------------------------------------- |  | ----------------------- | ------ | - | ---- | - | ------ | ---- |  | - | ------ | -
|                                                                                          |  | Year ended December 31, |       
|                                                                                          |  | 2010                    |        |   | 2009 |   |        | 2008 | 
|CASH FLOWS FROM OPERATING ACTIVITIES                                                      |  |                         |        |   |      |   |        |      |  |   |        |  
|Net loss                                                                                  |  | $                       | (38.6  | ) |      | $ | (121.8 | )    |  | $ | (576.8 | )
|Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |  |                         |        |   |      |   |        |      |  |   |        |  
|Depreciation, amortization and cost of timber harvested                                   |  |                         | 82.0   |   |      |   | 80.0   |      |  |   | 100.4  |  
|Loss from unconsolidated affiliates                                                       |  |                         | 6.4    |   |      |   | 10.4   |      |  |   | 12.6   |  
|Other operating credits and charges, net                                                  |  |                         | (1.2   | ) |      |   | 12.2   |      |  |   | 44.0   |  
|(Gain) loss on sale or impairment of long-lived assets                                    |  |                         | (1.2   | ) |      |   | (2.5   | )    |  |   | 9.1    |  
|Loss on early debt extinguishment                                                         |  |                         |       |   |      |   | 20.7   |      |  |   |       |  
|Realized gain on sale of long term investments                                            |  |                         | (19.0  | ) |      |   | (18.7  | )    |  |   |       |  
|Goodwill impairment                                                                       |  |                         |       |   |      |   |       |      |  |   | 273.5  |  
|Other-than-temporary impairment of investments                                            |  |                         | 17.0   |   |      |   | 2.0    |      |  |   | 118.6  |  
|Stock-based compensation related to stock plans                                           |  |                         | 8.8    |   |      |   | 7.3    |      |  |   | 9.7    |  
|Exchange (gain) loss on remeasurement                                                     |  |                         | 0.9    |   |      |   | (7.0   | )    |  |   | (35.7  | )
|Cash settlements of contingencies                                                         |  |                         | (9.8   | ) |      |   | (12.9  | )    |  |   | (26.0  | )
|Other adjustments, net                                                                    |  |                         | (4.2   | ) |      |   | 11.1   |      |  |   | 20.7   |  
|(Increase) decrease in receivables                                                        |  |                         | (0.9   | ) |      |   | (9.5   | )    |  |   | 36.3   |  
|(Increase) decrease in income tax receivables                                             |  |                         | 34.0   |   |      |   | 41.5   |      |  |   | 63.0   |  
|(Increase) decrease in inventories                                                        |  |                         | (8.5   | ) |      |   | 57.2   |      |  |   | 29.9   |  
|Decrease in prepaid expenses                                                              |  |                         | 1.2    |   |      |   | 4.0    |      |  |   | 0.3    |  
|Increase (decrease) in accounts payable and accrued liabilities                           |  |                         | (2.8   | ) |      |   | 6.2    |      |  |   | (66.8  | )
|Decrease in deferred income taxes                                                         |  |                         | (16.3  | ) |      |   | (19.4  | )    |  |   | (155.3 | )
|                                                                                          |  |                         |        |   |      |   |        |      |  |   |        |  
|Net cash provided by (used in) operating activities                                       |  |                         | 47.8   |   |      |   | 60.8   |      |  |   | (142.5 | )
|                                                                                          |  |                         |        |   |      |   |        |      |  |   |        |  
|CASH FLOWS FROM INVESTING ACTIVITIES                                                      |  |                         |        |   |      |   |        |      |  |   |        |  
|Property, plant, and equipment additions                                                  |  |                         | (14.5  | ) |      |   | (9.6   | )    |  |   | (99.4  | )
|Proceeds from asset sales                                                                 |  |                         | 3.3    |   |      |   | 7.8    |      |  |   | 7.9    |  
|Purchase of a business                                                                    |  |                         |       |   |      |   | (0.1   | )    |  |   | (56.5  | )
|Receipt of proceeds from notes receivable                                                 |  |                         | 115.1  |   |      |   | 20.0   |      |  |   | 74.4   |  
|(Increase) decrease in restricted cash under letters of credit                            |  |                         | (10.3  | ) |      |   | 57.5   |      |  |   | (1.5   | )
|Cash paid for purchase of investments                                                     |  |                         |       |   |      |   |       |      |  |   | (216.0 | )
|Proceeds from sale of investments                                                         |  |                         | 21.8   |   |      |   | 50.3   |      |  |   | 421.6  |  
|Investment in and advances to joint ventures                                              |  |                         | 4.9    |   |      |   | (0.3   | )    |  |   | (5.5   | )
|Other investing activities, net                                                           |  |                         |       |   |      |   |       |      |  |   | (14.0  | )
|                                                                                          |  |                         |        |   |      |   |        |      |  |   |        |  
|Net cash provided by investing activities                                                 |  |                         | 120.3  |   |      |   | 125.6  |      |  |   | 111.0  |  
|                                                                                          |  |                         |        |   |      |   |        |      |  |   |        |  
|CASH FLOWS FROM FINANCING ACTIVITIES                                                      |  |                         |        |   |      |   |        |      |  |   |        |  
|Borrowings of long-term debt                                                              |  |                         |       |   |      |   | 320.5  |      |  |   |       |  
|Payments under revolving credit lines and short-term notes payable                        |  |                         | (0.4   | ) |      |   | (2.3   | )    |  |   | (24.7  | )
|Repayment of long-term debt                                                               |  |                         | (173.7 | ) |      |   | (318.8 | )    |  |   | (174.8 | )
|Payment of debt issuance fees                                                             |  |                         | (0.1   | ) |      |   | (15.8  | )    |  |   |       |  
|Payment of cash dividends                                                                 |  |                         |       |   |      |   |       |      |  |   | (31.0  | )
|Sale of common stock under equity plans                                                   |  |                         |       |   |      |   | 132.3  |      |  |   |       |  
|Other financing activities, net                                                           |  |                         | (0.1   | ) |      |   |       |      |  |   |       |  
|                                                                                          |  |                         |        |   |      |   |        |      |  |   |        |  
|Net cash provided by (used in) financing activities                                       |  |                         | (174.3 | ) |      |   | 115.9  |      |  |   | (230.5 | )
|                                                                                          |  |                         |        |   |      |   |        |      |  |   |        |  
|Effect of exchange rate on cash and cash equivalents                                      |  |                         | 1.4    |   |      |   | (5.9   | )    |  |   | 7.6    |  
|                                                                                          |  |                         |        |   |      |   |        |      |  |   |        |  
|Net increase (decrease) in cash and cash equivalents                                      |  |                         | (4.8   | ) |      |   | 296.4  |      |  |   | (254.4 | )
|Cash and cash equivalents at beginning of year                                            |  |                         | 394.1  |   |      |   | 97.7   |      |  |   | 352.1  |  
|                                                                                          |  |                         |        |   |      |   |        |      |  |   |        |  
|Cash and cash equivalents at end of year                                                  |  | $                       | 389.3  |   |      | $ | 394.1  |      |  | $ | 97.7   |  
|                                                                                          |  |                         |        |   |      |   |        |      |  |   |        |  

See Notes to the Financial Statements.



49



---

Consolidated Statements of Stockholders Equity

Dollar and share amounts in millions, except per share amounts



|                                                                                          |  |              |       |  |                |   |       |                          |  |  |                  |   |  |                              |        |   |                          |   |       |                                  |  |   |         |   |  |   |       |   |  |   |         |   |  |   |      |  
|----------------------------------------------------------------------------------------- |  | ------------ | ----- |  | -------------- | - | ----- | ------------------------ |  |  | ---------------- | - |  | ---------------------------- | ------ | - | ------------------------ | - | ----- | -------------------------------- |  | - | ------- | - |  | - | ----- | - |  | - | ------- | - |  | - | ---- | -
|                                                                                          |  | Common Stock |       |  | Treasury Stock |   |       | AdditionalPaid-InCapital |  |  | RetainedEarnings |   |  | AccumulatedComprehensiveLoss |        |   | TotalStockholdersEquity |   |       | RedeemableNonControllingInterest | 
|                                                                                          |  | Shares       |       |  | Amount         |   |       | Shares                   |  |  | Amount           |   |  |                              |        |   |                         
|BALANCE AS OF DECEMBER 31, 2007                                                           |  |              | 116.9 |  |                | $ | 116.9 |                          |  |  | 13.8             |   |  | $                            | (302.0 | ) |                          | $ | 439.0 |                                  |  | $ | 1,628.6 |   |  | $ | (64.5 | ) |  | $ | 1,818.0 |   |  | $ |     |  
|                                                                                          |  |              |       |  |                |   |       |                          |  |  |                  |   |  |                              |        |   |                          |   |       |                                  |  |   |         |   |  |   |       |   |  |   |         |   |  |   |      |  
|Correction of beginning balance (see Note 24)                                             |  |              |       |  |                |   |       |                          |  |  |                  |   |  |                              |        |   |                          |   |       |                                  |  |   | 2.8     |   |  |   |       |   |  |   | 2.8     |   |  |   |      |  
|Net loss                                                                                  |  |              |       |  |                |   |       |                          |  |  |                  |   |  |                              |        |   |                          |   |       |                                  |  |   | (576.6  | ) |  |   |       |   |  |   | (576.6  | ) |  |   | (0.2 | )
|Issuance of shares for employee stock plans and for other purposes and other transactions |  |              |       |  |                |   |       |                          |  |  | (0.2             | ) |  |                              | 4.7    |   |                          |   | 0.5   |                                  |  |   |         |   |  |   |       |   |  |   | 5.2     |   |  |   |      |  
|Amortization of restricted stock grants                                                   |  |              |       |  |                |   |       |                          |  |  |                  |   |  |                              |        |   |                          |   | 2.1   |                                  |  |   |         |   |  |   |       |   |  |   | 2.1     |   |  |   |      |  
|Cash dividends, $0.30 per share                                                           |  |              |       |  |                |   |       |                          |  |  |                  |   |  |                              |        |   |                          |   |       |                                  |  |   | (31.0   | ) |  |   |       |   |  |   | (31.0   | ) |  |   |      |  
|Tax benefit of employee stock plan transactions                                           |  |              |       |  |                |   |       |                          |  |  |                  |   |  |                              |        |   |                          |   | (0.3  | )                                |  |   |         |   |  |   |       |   |  |   | (0.3    | ) |  |   |      |  
|Acquisition of redeemable non controlling interest                                        |  |              |       |  |                |   |       |                          |  |  |                  |   |  |                              |        |   |                          |   |       |                                  |  |   |         |   |  |   |       |   |  |   |        |   |  |   | 18.5 |  
|Accretion of redeemable non controlling interest                                          |  |              |       |  |                |   |       |                          |  |  |                  |   |  |                              |        |   |                          |   |       |                                  |  |   |         |   |  |   |       |   |  |   |        |   |  |   | 0.4  |  
|Other comprehensive loss                                                                  |  |              |       |  |                |   |       |                          |  |  |                  |   |  |                              |        |   |                          |   |       |                                  |  |   |         |   |  |   | (33.6 | ) |  |   | (33.6   | ) |  |   |      |  
|Adjustment to initially apply SFAS 158, net of tax                                        |  |              |       |  |                |   |       |                          |  |  |                  |   |  |                              |        |   |                          |   |       |                                  |  |   | (0.8    | ) |  |   |       |   |  |   | (0.8    | ) |  |   |      |  
|                                                                                          |  |              |       |  |                |   |       |                          |  |  |                  |   |  |                              |        |   |                          |   |       |                                  |  |   |         |   |  |   |       |   |  |   |         |   |  |   |      |  
|BALANCE as of December 31, 2008                                                           |  |              | 116.9 |  |                |   | 116.9 |                          |  |  | 13.6             |   |  |                              | (297.3 | ) |                          |   | 441.3 |                                  |  |   | 1,023.0 |   |  |   | (98.1 | ) |  |   | 1,185.8 |   |  |   | 18.7 |  
|                                                                                          |  |              |       |  |                |   |       |                          |  |  |                  |   |  |                              |        |   |                          |   |       |                                  |  |   |         |   |  |   |       |   |  |   |         |   |  |   |      |  
|Net loss                                                                                  |  |              |       |  |                |   |       |                          |  |  |                  |   |  |                              |        |   |                          |   |       |                                  |  |   | (120.9  | ) |  |   |       |   |  |   | (120.9  | ) |  |   | (0.9 | )
|Issuance of shares for public offering                                                    |  |              | 20.7  |  |                |   | 20.7  |                          |  |  |                  |   |  |                              |        |   |                          |   | 111.6 |                                  |  |   |         |   |  |   |       |   |  |   | 132.3   |   |  |   |      |  
|Issuance of shares for employee stock plans and for other purposes                        |  |              |       |  |                |   |       |                          |  |  | (0.5             | ) |  |                              | 11.2   |   |                          |   | (2.2  | )                                |  |   |         |   |  |   |       |   |  |   | 9.0     |   |  |   |      |  
|Amortization of restricted stock grants                                                   |  |              |       |  |                |   |       |                          |  |  |                  |   |  |                              |        |   |                          |   | 1.7   |                                  |  |   |         |   |  |   |       |   |  |   | 1.7     |   |  |   |      |  
|Issuance and exercise of stock warrants in connection with debt issuance                  |  |              | 2.1   |  |                |   | 2.1   |                          |  |  |                  |   |  |                              |        |   |                          |   | 11.4  |                                  |  |   |         |   |  |   |       |   |  |   | 13.5    |   |  |   |      |  
|Tax benefit of employee stock plan transactions                                           |  |              |       |  |                |   |       |                          |  |  |                  |   |  |                              |        |   |                          |   | (1.4  | )                                |  |   |         |   |  |   |       |   |  |   | (1.4    | ) |  |   |      |  
|Other comprehensive income                                                                |  |              |       |  |                |   |       |                          |  |  |                  |   |  |                              |        |   |                          |   |       |                                  |  |   |         |   |  |   | 33.5  |   |  |   | 33.5    |   |  |   | 3.3  |  
|                                                                                          |  |              |       |  |                |   |       |                          |  |  |                  |   |  |                              |        |   |                          |   |       |                                  |  |   |         |   |  |   |       |   |  |   |         |   |  |   |      |  
|BALANCE as of December 31, 2009                                                           |  |              | 139.7 |  |                |   | 139.7 |                          |  |  | 13.1             |   |  |                              | (286.1 | ) |                          |   | 562.4 |                                  |  |   | 902.1   |   |  |   | (64.6 | ) |  |   | 1,253.5 |   |  |   | 21.1 |  
|                                                                                          |  |              |       |  |                |   |       |                          |  |  |                  |   |  |                              |        |   |                          |   |       |                                  |  |   |         |   |  |   |       |   |  |   |         |   |  |   |      |  
|Net loss                                                                                  |  |              |       |  |                |   |       |                          |  |  |                  |   |  |                              |        |   |                          |   |       |                                  |  |   | (39.0   | ) |  |   |       |   |  |   | (39.0   | ) |  |   | 0.4  |  
|Issuance of shares for employee stock plans and for other purposes                        |  |              |       |  |                |   |       |                          |  |  | (0.2             | ) |  |                              | 6.2    |   |                          |   | 0.8   |                                  |  |   |         |   |  |   |       |   |  |   | 7.0     |   |  |   |      |  
|Amortization of restricted stock grants                                                   |  |              |       |  |                |   |       |                          |  |  |                  |   |  |                              |        |   |                          |   | 1.7   |                                  |  |   |         |   |  |   |       |   |  |   | 1.7     |   |  |   |      |  
|Issuance and exercise of stock warrants in connection with debt issuance                  |  |              | 5.1   |  |                |   | 5.1   |                          |  |  |                  |   |  |                              |        |   |                          |   | (5.1  | )                                |  |   |         |   |  |   |       |   |  |   |        |   |  |   |      |  
|Tax benefit of employee stock plan transactions                                           |  |              |       |  |                |   |       |                          |  |  |                  |   |  |                              |        |   |                          |   | (0.4  | )                                |  |   |         |   |  |   |       |   |  |   | (0.4    | ) |  |   |      |  
|Other comprehensive income (loss)                                                         |  |              |       |  |                |   |       |                          |  |  |                  |   |  |                              |        |   |                          |   |       |                                  |  |   |         |   |  |   | (5.0  | ) |  |   | (5.0    | ) |  |   | 1.3  |  
|                                                                                          |  |              |       |  |                |   |       |                          |  |  |                  |   |  |                              |        |   |                          |   |       |                                  |  |   |         |   |  |   |       |   |  |   |         |   |  |   |      |  
|BALANCE as of December 31, 2010                                                           |  |              | 144.8 |  |                | $ | 144.8 |                          |  |  | 12.9             |   |  | $                            | (279.9 | ) |                          | $ | 559.4 |                                  |  | $ | 863.1   |   |  | $ | (69.6 | ) |  | $ | 1,217.8 |   |  | $ | 22.8 |  
|                                                                                          |  |              |       |  |                |   |       |                          |  |  |                  |   |  |                              |        |   |                          |   |       |                                  |  |   |         |   |  |   |       |   |  |   |         |   |  |   |      |  

See Notes to the Financial Statements



50



---

Consolidated Statements of Comprehensive Income

Dollar amounts in millions



|                                                                                |  |                         |       |   |      |   |        |      |  |   |        |  
|------------------------------------------------------------------------------- |  | ----------------------- | ----- | - | ---- | - | ------ | ---- |  | - | ------ | -
|                                                                                |  | Year ended December 31, |      
|                                                                                |  | 2010                    |       |   | 2009 |   |        | 2008 | 
|Net loss                                                                        |  | $                       | (38.6 | ) |      | $ | (121.8 | )    |  | $ | (576.8 | )
|                                                                                |  |                         |       |   |      |   |        |      |  |   |        |  
|Other comprehensive (loss) income, net of tax                                   |  |                         |       |   |      |   |        |      |  |   |        |  
|Foreign currency translation adjustments                                        |  |                         | 9.0   |   |      |   | 26.1   |      |  |   | (13.3  | )
|Unrealized gains (losses) on derivative financial instruments                   |  |                         | (0.2  | ) |      |   | 1.2    |      |  |   | (1.8   | )
|Unrealized gains (losses) on securities, net of reversals                       |  |                         | (4.9  | ) |      |   | 11.8   |      |  |   | 19.1   |  
|Defined benefit pension and post retirement plans:                              |  |                         |       |   |      |   |        |      |  |   |        |  
|Prior service cost (credit)                                                     |  |                         |      |   |      |   | 0.3    |      |  |   | 1.2    |  
|Amortization of prior service cost                                              |  |                         | 0.2   |   |      |   | 0.2    |      |  |   | 0.6    |  
|Net (loss) gain                                                                 |  |                         | (9.2  | ) |      |   | (4.5   | )    |  |   | (42.5  | )
|Amortization of net loss                                                        |  |                         | 1.7   |   |      |   | 2.5    |      |  |   | 1.5    |  
|Change in measurement date                                                      |  |                         |      |   |      |   |       |      |  |   | 0.3    |  
|Exchange (loss) gain on remeasurement                                           |  |                         | (0.3  | ) |      |   | (0.8   | )    |  |   | 1.3    |  
|                                                                                |  |                         |       |   |      |   |        |      |  |   |        |  
|Other comprehensive income (loss), net of tax                                   |  |                         | (3.7  | ) |      |   | 36.8   |      |  |   | (33.6  | )
|                                                                                |  |                         |       |   |      |   |        |      |  |   |        |  
|Net (income) loss attributable to noncontrolling interest                       |  |                         | (0.4  | ) |      |   | 0.9    |      |  |   | 0.2    |  
|Foreign currency translation adjustments attributed to non-controlling interest |  |                         | (1.3  | ) |      |   | (3.3   | )    |  |   |       |  
|                                                                                |  |                         |       |   |      |   |        |      |  |   |        |  
|Comprehensive loss                                                              |  | $                       | (44.0 | ) |      | $ | (87.4  | )    |  | $ | (610.2 | )
|                                                                                |  |                         |       |   |      |   |        |      |  |   |        |  

See Notes to the Financial Statements.



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NOTES TO THE FINANCIAL STATEMENTS



|1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|-- | ------------------------------------------

Nature of Operations

Louisiana-Pacific Corporation and its subsidiaries (collectively LP or the Company) are principally engaged in the manufacture of building
products. In addition to its U.S. operations, the Company also maintains manufacturing facilities in Canada, Chile and Brazil through foreign subsidiaries and joint ventures. The principal customers for the Companys building products are
retail home centers, manufactured housing producers, distributors and wholesalers in North America and South America, with minor sales to Asia, Australia and Europe.

See Note 25 below for further information regarding LPs products and segments.

Use of
Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with accounting
principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. See discussion of specific estimates in this Note under the headings Asset Impairments, and Other
Operating Credits and Charges, Net and in the Notes entitled Income Taxes, Retirement Plans and Postretirement Benefits, Stockholders Equity, Other Operating Credits and Charges, Net,
Gain (Loss) on Sale of and Impairment of Long-Lived Assets, Net and Contingencies.

Consolidation

The consolidated financial statements include the accounts of LP and its majority-owned subsidiaries after elimination of intercompany
transactions. The equity method of accounting is used for joint ventures and investments in associated companies over which LP has significant influence but does not have effective control. Significant influence is deemed to exist generally when the
Company has an ownership interest in the voting stock of an investee of between 20 percent and 50 percent. LPs equity in the income and losses of these investments is recorded in Equity in loss of unconsolidated affiliates on the
Consolidated Statements of Income. See Note 9 for further discussion of these investments and advances. Where our ownership interest is less than 100 percent but more than 50 percent, the outside shareholders interests are shown as
non-controlling interest. See Note 19 for further discussion of this investment.



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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. This method requires that the effect of potentially dilutive common stock
equivalents (employee stock options, stock settled stock appreciation rights, incentive shares and warrants) be excluded from the calculation of diluted earnings per share for the periods in which losses from continuing operations are reported
because the effect is anti-dilutive. The following table sets forth the computation of basic and diluted earnings per share:



|                                                               |  |                         |       |   |      |   |        |      |  |   |        |  
|-------------------------------------------------------------- |  | ----------------------- | ----- | - | ---- | - | ------ | ---- |  | - | ------ | -
|                                                               |  | Year ended December 31, |      
|Dollar and share amounts in millions, except per share amounts |  | 2010                    |       |   | 2009 |   |        | 2008 | 
|Numerator:                                                     |  |                         |       |   |      |   |        |      |  |   |        |  
|Income (loss) attributed to LP common shares:                  |  |                         |       |   |      |   |        |      |  |   |        |  
|Loss from continuing operations                                |  | $                       | (32.6 | ) |      | $ | (115.6 | )    |  | $ | (562.9 | )
|Loss from discontinued operations                              |  |                         | (6.4  | ) |      |   | (5.3   | )    |  |   | (13.7  | )
|                                                               |  |                         |       |   |      |   |        |      |  |   |        |  
|Net loss                                                       |  | $                       | (39.0 | ) |      | $ | (120.9 | )    |  | $ | (576.6 | )
|                                                               |  |                         |       |   |      |   |        |      |  |   |        |  
|Denominator:                                                   |  |                         |       |   |      |   |        |      |  |   |        |  
|Basicweighted average common shares outstanding               |  |                         | 129.1 |   |      |   | 108.5  |      |  |   | 102.9  |  
|Dilutive effect of employee stock plans                        |  |                         |      |   |      |   |       |      |  |   |       |  
|                                                               |  |                         |       |   |      |   |        |      |  |   |        |  
|Diluted shares outstanding                                     |  |                         | 129.1 |   |      |   | 108.5  |      |  |   | 102.9  |  
|                                                               |  |                         |       |   |      |   |        |      |  |   |        |  
|Basic earnings per share:                                      |  |                         |       |   |      |   |        |      |  |   |        |  
|Loss from continuing operations                                |  | $                       | (0.25 | ) |      | $ | (1.06  | )    |  | $ | (5.47  | )
|Loss from discontinued operations                              |  |                         | (0.05 | ) |      |   | (0.05  | )    |  |   | (0.13  | )
|                                                               |  |                         |       |   |      |   |        |      |  |   |        |  
|Net loss per share                                             |  | $                       | (0.30 | ) |      | $ | (1.11  | )    |  | $ | (5.60  | )
|                                                               |  |                         |       |   |      |   |        |      |  |   |        |  
|Diluted earnings per share:                                    |  |                         |       |   |      |   |        |      |  |   |        |  
|Loss from continuing operations                                |  | $                       | (0.25 | ) |      | $ | (1.06  | )    |  | $ | (5.47  | )
|Loss from discontinued operations                              |  |                         | (0.05 | ) |      |   | (0.05  | )    |  |   | (0.13  | )
|                                                               |  |                         |       |   |      |   |        |      |  |   |        |  
|Net loss per share                                             |  | $                       | (0.30 | ) |      | $ | (1.11  | )    |  | $ | (5.60  | )
|                                                               |  |                         |       |   |      |   |        |      |  |   |        |  

Stock options, warrants and stock settled stock appreciation rights (SSARs) related to approximately
9.1 million, 7.4 million and 5.0 million common shares for years ended December 31, 2010, 2009 and 2008 were considered anti-dilutive for purposes of LPs earnings per share calculation due to LPs loss position in
continuing operations.

Cash and Cash Equivalents

Cash and cash equivalents consist of money market and other high quality investments with an initial maturity of three months or less. Such investments are stated at cost, which approximates market value.

Investments

LPs long-term investments are classified as available-for-sale and are reported at estimated fair value. LP may invest in securities
including U.S. treasury notes, bank obligations, corporate obligations, auction rate securities and commercial paper. Under LPs investment criteria at purchase, bank and corporate obligations carry a rating of at least A-1 and commercial paper
must have the highest rating obtainable from one or more rating agencies. Unrealized gains and losses, net of tax, on these investments are reported as a separate component of Accumulated comprehensive loss in Stockholders Equity
until realized. Impairment losses are



53



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charged to income for other-than-temporary declines in fair value. Realized gains and losses (including impairments) are recorded in Investment income in the Consolidated Statements
of Income. For purposes of computing realized gains and losses, cost is identified on a specific identification basis. See Note 2 for further discussion.

Fair Value of Financial Instruments

LP has, where appropriate,
estimated the fair value of financial instruments. These fair value amounts may be significantly affected by the assumptions used, including the discount rate and estimates of cash flows. Accordingly, the estimates presented are not necessarily
indicative of the amounts that could be realized in a current market exchange.

Inventory

Inventories are valued at the lower of cost or market. Inventory costs include materials, labor and operating overhead. The LIFO (last-in,
first-out) method is used for a minor portion of the Companys log inventories with the remaining inventories valued at FIFO (first-in, first-out) or average cost. See Note 5 for further discussion.

Timber and Timberlands

Timber and timberlands is comprised of timber deeds and allocations of purchase price to Canadian timber harvesting licenses. Timber deeds
are transactions in which LP purchases timber, but not the underlying land. The cost of timber deeds are capitalized in timber and timberlands and charged to cost of timber harvested as the volume is removed. Timber that has been severed but has not
yet been delivered to a facility is included in timber and timberlands. The values associated with timber licenses were allocated in the purchase price allocations for both Le Groupe Forex (Forex) and the assets of Evans Forest Products. These
licenses have a life of twenty to twenty-five years and may be renewable every five years. These licenses are amortized on a straight-line basis over the life of the license. Cost of timber harvested also includes the amortization of the timber
licenses.

Assets Held for Sale

Over the last several years, LP has adopted and implemented plans to sell selected assets in order to improve its operating results. LP is required to classify assets held for sale which are not part of a
discontinued business separately on the face of the financial statements outside of Property, plant and equipment. As of December 31, 2010 and 2009, LP included three OSB mills and various non-operating sites in its held for sale
category. The current book values of assets held for sale by category is as follows:



|                                                                    |      |              |        |      |  |   |        |  
|------------------------------------------------------------------- | ---- | ------------ | ------ | ---- |  | - | ------ | -
|Dollar amounts in millions                                          |      | December 31, |       
|                                                                    | 2010 |              |        | 2009 | 
|Property, plant and equipment, at cost:                             |      |              |        |      |  |   |        |  
|Land, land improvements and logging roads, net of road amortization |      | $            | 13.4   |      |  | $ | 15.9   |  
|Buildings                                                           |      |              | 24.5   |      |  |   | 35.7   |  
|Machinery and equipment                                             |      |              | 197.7  |      |  |   | 212.1  |  
|                                                                    |      |              |        |      |  |   |        |  
|                                                                    |      |              | 235.6  |      |  |   | 263.7  |  
|Accumulated depreciation                                            |      |              | (177.7 | )    |  |   | (194.6 | )
|                                                                    |      |              |        |      |  |   |        |  
|Net property, plant and equipment                                   |      | $            | 57.9   |      |  | $ | 69.1   |  
|                                                                    |      |              |        |      |  |   |        |  

LP believes that the net realizable sales value of the aforementioned assets exceeds their carrying values.



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Property, Plant and Equipment

Property, plant and equipment, including capitalized interest, are recorded at cost. Depreciation for financial statement purposes is
provided principally using the units of production method for machinery and equipment which amortizes the cost of equipment over the estimated units that will be produced during its useful life. Provisions for depreciation of buildings, land
improvements and the remaining machinery and equipment have been computed using straight-line rates based on the estimated service lives. The effective straight-line lives for the principal classes of property range from three to twenty years.

Logging road construction costs are capitalized and included in land and land improvements. These costs are amortized as the
timber volume adjacent to the road system is harvested.

LP capitalizes interest on borrowed funds during construction
periods. Capitalized interest is charged to machinery and equipment accounts and amortized over the lives of the related assets. There was no interest capitalized during 2010 due to LPs reduced capital programs and interest capitalized during
2009 and 2008 was $0.1 million and $3.6 million.

Asset Impairments

Long-lived assets to be held and used by LP (primarily property, plant and equipment and timber and timberlands) are reviewed for
impairment when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. When impairment is indicated, the book values of the assets are written down to their estimated fair value as calculated by
the expected discounted cash flow or estimated net sales price. See Note 17 for a discussion of charges in 2010, 2009 and 2008 related to impairments of property, plant and equipment. Long-lived assets that are held for sale are written down to
the estimated sales proceeds less cost to sell unless the estimated net proceeds exceed the carrying value.

Income Taxes

LP accounts for income taxes under an asset and liability approach that requires the recognition of deferred tax assets and liabilities
for the expected future tax consequences of events that have been recognized in LPs financial statements or tax returns. In estimating future tax consequences, LP generally considers all expected future events other than the enactment of
changes in tax laws or rates. The effect on deferred tax assets and liabilities of a change in tax rates will be recognized as income or expense in the period that includes the enactment date. Additionally, deferred tax assets are reduced by a
valuation allowance when it is more likely than not that some portion of the deferred tax assets will not be realized. See Note 10 for further discussion of deferred taxes.

Stock-Based Compensation

LP recognizes the cost of employee services
received in exchange for awards of equity instruments, such as stock options, restricted stock or restricted stock units and stock settled stock appreciation rights (SSAR), based upon the fair value of those awards at the date of grant over the
requisite service period. LP uses the Black-Scholes-Merton (Black Scholes) option pricing model to determine the fair value of the stock option and SSAR awards. Stock-based compensation plans, related expenses and assumptions used in the
Black-Scholes option pricing model are more fully described in Note 14.

Treasury Stock

LP records treasury stock purchased at cost. LP did not repurchase stock during 2010, 2009 or 2008.



55



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Derivative Financial Instruments

To reduce foreign currency exchange and interest rate risks, LP occasionally utilizes derivative financial instruments. LP has established
policies and procedures for risk assessment and for approving, reporting and monitoring of derivative financial instrument activities. Derivative instruments, which include forward exchange, options and futures contracts, are recorded in the
Consolidated Balance Sheets as either an asset or a liability measured at fair value. To the extent that a derivative is designated and effective as a cash flow hedge of an exposure to future changes in value, the change in the fair value of the
derivative is reported in Accumulated comprehensive loss. In general, LP does not utilize financial instruments for trading or speculative purposes.

U.S. GreenFiber, LLC (GreenFiber), a fifty percent owned joint venture between LP and Casella Waste Management, Inc. (accounted for under the equity method of accounting), entered into a swap
contract for the purchase of raw materials. As of December 31, 2010, GreenFiber recognized $0.8 million in Other comprehensive income to adjust these contracts to fair market value and, accordingly, LP has recorded its share, $0.4
million, in LPs Other comprehensive income. Additionally, LP has provided deferred taxes of $0.1 million associated with this swap.

Foreign Currency Translation

The functional currency for the
Companys Canadian subsidiaries is the U.S. dollar; however the books and records for these subsidiaries are maintained in the Canadian dollar. The financial statements of these foreign subsidiaries are remeasured into U.S. dollars using the
historical exchange rate for property, plant and equipment, timber and timberlands, goodwill, and certain other non-monetary assets and related depreciation and amortization on these assets and liabilities. LP uses the exchange rate at the balance
sheet date for the remaining assets and liabilities, including deferred taxes. A weighted-average exchange rate is used for each period for revenues and expenses. These transaction gains or losses are recorded in Other non-operating income
(expense) on the Consolidated Statements of Income. The functional currencies of LPs Chilean, Brazil and Peru subsidiaries are the Chilean Peso, Brazil Real and Peru Nuevo Sol and their books and records are maintained in the local
currency. Translation adjustments, which are based upon the exchange rate at the balance sheet date for assets and liabilities and the weighted-average rate for the income statement, are recorded in Accumulated comprehensive loss in
Stockholders equity.

Goodwill and Intangible Assets

Goodwill is not amortized. Intangible assets with finite useful lives are amortized generally on a straight-line basis over the periods benefited.

Based on economic factors in 2008, LP recorded an impairment charge of $273.5 million eliminating the Companys goodwill with the
exception of the goodwill associated with an equity method investee. Impairment of the investment (including goodwill) is evaluated when factors indicate impairment may exist.

Restricted Cash

In accordance with LPs credit facilities, discussed
at Note 12, LP has established restricted cash accounts. As of December 31, 2010, a portion of the restricted cash secures a letter of credit that supports outstanding borrowings under a credit facility associated with its Chilean operations as
well as outstanding letters of credit under LPs U.S. and Canadian credit facilities.

Revenue Recognition

Revenue is recognized when customers receive products and title has passed. The following criteria are used to determine that title has
passed: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the price to the buyer is fixed or determinable; and (4) the collection is reasonably assured.



56



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During 2010, LPs top ten customers accounted for approximately 49% of its sales, with
its largest customer, Taiga Buildings Products, Ltd. accounting for 10.9% of our sales. During 2009, LPs top ten customers accounted for approximately 51% of its sales, with its two largest customers, Home Depot, Inc. accounting for 10.9% and
Taiga Buildings Products, Ltd. accounting for 10.1% of our sales. During 2008, LPs top ten customers accounted for 44% of its sales and no customer accounted for more than 10% of its sales.

Pricing and Sales Incentives

LP records estimated reductions to revenue for customer programs and incentive offerings, including pricing arrangements, promotions and other volume-based incentives, at the date revenue is recognized.
Some of these incentives are negotiated up front with the customer and are redeemable only if the customer achieves a specified cumulative level of sales (measured in dollars or units) or sales increase. Under these incentive programs, at the time
of sale, LP estimates the anticipated rebate to be paid based upon forecasted sales levels. These forecasts are updated on a regular basis. If the forecasted sales for a customer change significantly, the accrual for rebates is adjusted to reflect
the revised estimate.

Asset Retirement Obligations

LP records the fair value of the legal obligations and the conditional obligations to retire and remove long-lived assets in the period which the obligation is incurred. These obligations primarily
consist of monitoring costs on closed landfills, timber reforestation obligations associated with LPs timber licenses in Canada and certain site restoration costs. When the related liability is initially recorded, LP capitalizes the cost by
increasing the carrying amount of the related long-lived asset. Over time, the liability is accreted to its settlement value and the capitalized cost is depreciated over the useful life of the related asset. Upon settlement of the liability, LP
recognizes a gain or loss for any difference between the settlement amount and the liability recorded. See Note 15 for further discussion.

Deferred Debt Costs

Deferred debt costs are amortized over the life of the related debt using a straight line basis which approximates the effective interest
method. If the debt is retired early, the related unamortized deferred financing costs are written off in the period the debt is retired to other non-operating income (expense). LP amortized deferred debt costs of $3.1 million, $3.0 million and $0.6
million for the years ended December 31, 2010, 2009 and 2008. Additionally, in connection with the retirement of a portion of the Senior Secured Notes due in 2017 in November 2009, LP recorded a charge of $3.8 million which is included in the
loss on early debt extinguishment within the Other non-operating income (expense). See Note 11 for further discussion.

Other
Operating Credits and Charges, Net

LP classifies significant amounts that management considers unrelated to ongoing core
operating activities as Other operating credits and charges, net in the Consolidated Statements of Income. Such items include, but are not limited to, amounts related to restructuring charges (including severance charges), charges to
establish and maintain litigation or environmental reserves, gains from insurance recoveries and gains or losses from settlements with governmental or other organizations. Due to the nature of these items, amounts in the income statement can
fluctuate from year to year. The determination of which items are considered significant and unrelated to core operations is based upon managements judgment. See Note 16 for a discussion of specific amounts in 2010, 2009 and 2008.

Retirement Benefits

LP is required to use actuarial methods and assumptions in the valuation of defined benefit obligations and the determination of expense. Difference between actual and expected results or changes in the
values of the obligations and plan assets are not recognized in earnings as they occur but, rather, systematically and gradually



57



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over subsequent periods. Prior to January 1, 2010, the cost of retiree benefits was recognized over the employees service period. As of January 1, 2010, LP froze the U.S. defined
benefit plan and accordingly changed the method of accounting for such amounts to be amortized over the period until retirement as opposed to the estimated service period. The change in this method lengthened the amortization period for U.S. plans.
See Note 13 for further information.

Comprehensive Income

Comprehensive income consists of net income (loss) and other gains and losses affecting shareholders equity that are excluded from net income (loss), including foreign currency translation
adjustments, prior service costs and credits, transition assets or obligations associated with pension or other post retirement benefits that have not been recognized as components of net periodic benefit costs, net unrealized gains or losses on
securities, and unrealized gains and losses on financial instruments qualifying for cash flow hedge accounting, and is presented in the accompanying Consolidated Statements of Comprehensive Income. See Note 23 for further discussion.

Present and Prospective Accounting Pronouncements

In March 2008, the FASB issued guidance now codified under ASC Topic 815-10 Derivatives and HedgingOverall (ASC 815-10). ASC 815-10 amends and expands the disclosure requirements of
previous standards to provide a better understanding of how and why an entity uses derivative instruments, how derivative instruments and related hedged items are accounted for, and their effect on an entitys financial position, financial
performance, and cash flows. ASC 815-10 is effective for fiscal years beginning after November 15, 2008. LP adopted this statement as of January 1, 2009 and it did not have a material effect on LPs consolidated financial
statements.

In December 2008, the FASB issued guidance now codified under ASC Topic 715-20 CompensationRetirement
Benefits (ASC 715-20). ASC 715-20 amends Statement of Financial Accounting Standards SFAS 132(R), Employers Disclosures about Pensions and Other Postretirement Benefits, to provide guidance on an employers
disclosures about plan assets of a defined benefit pension or other postretirement plan. LP adopted this statement as of December 31, 2009, and it did not have a material effect on LPs consolidated financial statements.

In April 2009, the FASB issued guidance now codified under ASC Topic 820-10 Fair Value Measurements and
DisclosuresOverall (ASC 820-10) . ASC 820-10 provides additional guidance for estimating fair value in accordance with ASC 820 when the volume and level of activity for the asset or liability have significantly decreased. This standard
also includes guidance on identifying circumstances that indicate a transaction is not orderly. If a market is determined to be inactive and market price is reflective of a distressed price then an alternative method of pricing can be used, such as
a present value technique to estimate fair value. ASC 820-10 identifies factors to be considered when determining whether or not a market is inactive. ASC 820-10 was effective for interim and annual periods ending after June 15, 2009 and shall
be applied prospectively. LP adopted this statement as of April 1, 2009, and it did not have a material effect on LPs consolidated financial statements.

In April 2009, the FASB issued guidance now codified under ASC Topic 825-10 Financial InstrumentsOverall (ASC 825-10), to require disclosures about fair value of financial
instruments in interim and annual reporting periods. ASC 825-10 was effective for interim reporting periods ending after June 15, 2009. LP adopted these disclosure requirements in 2009.

In April 2009, the FASB issued guidance now codified under ASC Topic 320-10 InvestmentsDebt and Equity
SecuritiesOverall (ASC 320-10) which amends the other-than-temporary impairment guidance for debt securities to make the guidance more operational and to improve the presentation and disclosure of



58



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other-than-temporary impairments on debt and equity securities in the financial statements. ASC 320-10 is effective for interim reporting periods ending after June 15, 2009. LP adopted these
statements as of April 1, 2009 and this did not have a material effect on LPs consolidated financial statements.

In June 2009, the FASB issued guidance now codified under ASC Topic 860, Transfers and Servicing (ASC 860) and ASC Topic 810
Consolidation. Under ASC 860, the concept of a qualifying special-purpose entity (QSPE) is no longer relevant for accounting purposes, and formerly qualifying special purpose entities need to be evaluated for consolidation. ASC 810
requires an enterprise to perform an analysis to determine whether the enterprises variable interest gives it a controlling financial interest. As of January 1, 2010, LP adopted ASC 860 and 810 and consolidated a former QSPE established
in connection with the sale of southern timber and timberlands in 2003. The consolidation of the former QSPE results in adjustments to LPs consolidated financial statements to increase LPs assets by $368.1 million, to increase LPs
liabilities by $368.9 million and to reduce LPs net equity by $0.8 million. Specifically, Notes receivable from asset sales increased by $410 million; Advances to and investments in affiliates declined by $44.5 million;
Restricted cash increased $1.6 million; Deferred debt cost increased by $0.9 million; Accounts payable and accrued liabilities increased by $0.2 million; Long-term debt increased by $368.7 million and
Retained earnings declined of $0.8 million. The retroactive application of ASC 860 and 810 resulted in the recognition of additional net (income) loss for the year ended December 31, 2009 and December 31, 2008 of $0.1 million
and ($0.8) million, respectively.

Reclassifications

Certain prior year amounts have been reclassified to conform to the current year presentation associated with certain sales incentives or warranty accruals which previously were classified as sales
deductions and now classified to either cost of good sold or selling and administrative expenses. Additionally, intersegment sales have been reclassified to be shown on a gross basis within the segment reporting. Such reclassifications were not
considered material.



|2. | INVESTMENTS
|-- | -----------

Short-term
and long-term investments held by LP are debt securities designated as available for sale and are reported at fair market value using the specific identification method. The following table summarizes unrealized gains and losses related to these
investments as of December 31, 2010 and December 31, 2009:



|                            |  |               |     |  |                      |   |      |                       |  |   |           |  |  |   |      | 
|--------------------------- |  | ------------- | --- |  | -------------------- | - | ---- | --------------------- |  | - | --------- |  |  | - | ---- | 
|Dollar amounts in millions  |  | AmortizedCost |     |  | GrossUnrealizedGains |   |      | GrossUnrealizedLosses |  |   | FairValue | 
|December 31, 2010           |  |               |     |  |                      |   |      |                       |  |   |           |  |  |   |      | 
|Auction rate securities     |  | $             | 4.8 |  |                      | $ | 10.6 |                       |  | $ |          |  |  | $ | 15.4 | 
|                            |  |               |     |  |                      |   |      |                       |  |   |           |  |  |   |      | 
|Total marketable securities |  | $             | 4.8 |  |                      | $ | 10.6 |                       |  | $ |          |  |  | $ | 15.4 | 
|                            |  |               |     |  |                      |   |      |                       |  |   |           |  |  |   |      | 
|December 31, 2009           |  |               |     |  |                      |   |      |                       |  |   |           |  |  |   |      | 
|Auction rate securities     |  | $             | 7.5 |  |                      | $ | 18.8 |                       |  | $ |          |  |  | $ | 26.3 | 
|                            |  |               |     |  |                      |   |      |                       |  |   |           |  |  |   |      | 
|Total marketable securities |  | $             | 7.5 |  |                      | $ | 18.8 |                       |  | $ |          |  |  | $ | 26.3 | 
|                            |  |               |     |  |                      |   |      |                       |  |   |           |  |  |   |      | 

As of December 31, 2010, LP had $15.4 million ($61.5 million, par value) invested in auction rate
securities (ARS). The ARS held by LP are securities with long-term nominal maturities for which the interest rates are reset through a Dutch auction each month. LPs investments in ARS represent interests in collateralized debt obligations
supported by pools of residential and commercial mortgages, bank trust preferred notes and other securities.

During 2010, LP
sold $35.3 million (par value) of our ARS in an open market transaction for $21.8 million. LP recorded a gain on sale of securities of $19.0 million, which represents a recovery of losses previously recorded as an Other-than-temporary
impairment.



59



---

During 2009, LP sold $55.0 million (par value) of our ARS to pursuant to a tender offer for
$21.5 million plus accrued interest. LP recorded a gain on sale of securities of $18.7 million, which represented a recovery of losses previously recorded as an Other-than-temporary impairment.

LP reviews its marketable securities routinely for other-than-temporary impairment. The primary factors LP used to determine if an
impairment charge must be recorded, because a decline in value of the security is other than temporary, include (i) whether the fair value of the investment is significantly below its cost basis, (ii) the financial condition of the issuer
of the security (including its credit rating) and the underlying collateral, (iii) the length of time that the cost of the security has exceeded its fair value and (iv) LPs intent and ability to retain the investment for a period of
time sufficient to allow for any anticipated recovery in market value.

The contractual maturities of debt securities
classified as available for sale at December 31, 2010 were as follows:



|                            |               |      |     |           |  |   |      | 
|--------------------------- | ------------- | ---- | --- | --------- |  | - | ---- | 
|Dollar amounts in millions  |               | 2010 |    
|                            | AmortizedCost |      |     | FairValue | 
|Due in one year or less     |               | $    |    |           |  | $ |     | 
|Due in more than one year   |               |      | 4.8 |           |  |   | 15.4 | 
|                            |               |      |     |           |  |   |      | 
|Total marketable securities |               | $    | 4.8 |           |  | $ | 15.4 | 
|                            |               |      |     |           |  |   |      | 

Proceeds from sales and maturities of short-term investments for the years ended December 31, 2010 and
December 31, 2009 totaled $21.8 million and $50.3 million. There were no purchases of short-term and long-term investments for the years ended December 31, 2010 and December 31, 2009. The gross realized gains and losses related to the
sales of short-term investments, other than the sale of ARS described above, were not material for the year ended December 31, 2009. During 2010, LP did not own any short-term investments. Net unrealized gains and losses on derivative
instruments are reported as a separate component of Accumulated comprehensive loss in Stockholders equity.



|3. | FAIR VALUE MEASUREMENTS
|-- | -----------------------

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the
principal or most advantageous market for the asset or liability in an orderly 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. LP is required to classify these financial assets and liabilities into two groups: recurringmeasured on a periodic basis and 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.                                  



60



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Assets measured at fair value on a recurring basis as of December 31, 2010 and
December 31, 2009 is summarized in the following tables.



|                              |  |                  |      |  |                                                             |   |     |                                            |  |   |                                         |  |  |   |      | 
|----------------------------- |  | ---------------- | ---- |  | ----------------------------------------------------------- | - | --- | ------------------------------------------ |  | - | --------------------------------------- |  |  | - | ---- | 
|Dollar amounts in millions    |  | December 31,2010 |      |  | Quoted Prices inActive Marketsfor IdenticalAssets (Level 1) |   |     | SignificantOther ObservableInputs(Level 2) |  |   | SignificantUnobservableInputs (Level 3) | 
|Available for sale securities |  | $                | 15.4 |  |                                                             | $ |    |                                            |  | $ | 3.8                                     |  |  | $ | 11.6 | 
|Trading securities            |  |                  | 2.6  |  |                                                             |   | 2.6 |                                            |  |   |                                        |  |  |   |     | 
|                              |  |                  |      |  |                                                             |   |     |                                            |  |   |                                         |  |  |   |      | 
|Total                         |  | $                | 18.0 |  |                                                             | $ | 2.6 |                                            |  | $ | 3.8                                     |  |  | $ | 11.6 | 
|                              |  |                  |      |  |                                                             |   |     |                                            |  |   |                                         |  |  |   |      | 



|                              |  |                  |      |  |                                                             |   |     |                                            |  |   |                                         |  |  |   |      | 
|----------------------------- |  | ---------------- | ---- |  | ----------------------------------------------------------- | - | --- | ------------------------------------------ |  | - | --------------------------------------- |  |  | - | ---- | 
|Dollar amounts in millions    |  | December 31,2009 |      |  | Quoted Prices inActive Marketsfor IdenticalAssets (Level 1) |   |     | SignificantOther ObservableInputs(Level 2) |  |   | SignificantUnobservableInputs (Level 3) | 
|Available for sale securities |  | $                | 26.3 |  |                                                             | $ |    |                                            |  | $ |                                        |  |  | $ | 26.3 | 
|Trading securities            |  |                  | 2.3  |  |                                                             |   | 2.3 |                                            |  |   |                                        |  |  |   |     | 
|                              |  |                  |      |  |                                                             |   |     |                                            |  |   |                                         |  |  |   |      | 
|Total                         |  | $                | 28.6 |  |                                                             | $ | 2.3 |                                            |  | $ |                                        |  |  | $ | 26.3 | 
|                              |  |                  |      |  |                                                             |   |     |                                            |  |   |                                         |  |  |   |      | 

Available for sale securities measured at fair value as of December 31, 2010 and December 31, 2009
are recorded in cash and cash equivalents, long-term investments and restricted cash on LPs consolidated balance sheets. Included in available for sale securities are auction rate securities.

Due to the lack of observable market quotations on a portion of LPs auction rate securities (ARS) portfolio, LP evaluates the
structure of its ARS holdings and current market estimates of fair value, including fair value estimates from issuing banks that rely exclusively on Level 3 inputs. These inputs include those that are based on expected cash flow streams and
collateral values, including assessments of counterparty credit quality, default risk underlying the security, discount rates and overall capital market liquidity. The valuation of LPs ARS investment portfolio is subject to uncertainties that
are difficult to predict. Factors that may impact LPs valuation include changes to credit ratings of the securities as well as to the underlying assets supporting those securities, rates of default of the underlying assets, underlying
collateral value, discount rates, counterparty risk and ongoing strength and quality of market credit and liquidity.

Trading
securities consist of rabbi trust financial assets which are recorded in other assets in LPs consolidated balance sheets. The rabbi trust holds the assets of the Louisiana-Pacific Corporation 2004 Executive Deferred Compensation Plan (EDC), a
non-qualified deferred compensation plan which allows certain management employees to defer receipt of a portion of their compensation and contribute such amounts to one or more investment funds. 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.



61



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The following table summarizes assets measured at fair value on a recurring basis using
significant unobservable inputs (Level 3) during the periods ended December 31, 2010 and December 31, 2009.



|                                                                                                                                                   |  |                              |       |  
|-------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------- | ----- | -
|Dollar amounts in millions                                                                                                                         |  | Available forsale securities |      
|Balance at December 31, 2008                                                                                                                       |  | $                            | 12.3  |  
|                                                                                                                                                   |  |                              |       |  
|Sale of ARS                                                                                                                                        |  |                              | (21.5 | )
|Total realized/unrealized gains (losses)                                                                                                           |  |                              |       |  
|Included in other-than-temporary investment impairment                                                                                             |  |                              | (2.0  | )
|Included in investment income                                                                                                                      |  |                              | 18.7  |  
|Included in other comprehensive income                                                                                                             |  |                              | 18.8  |  
|                                                                                                                                                   |  |                              |       |  
|Balance at December 31, 2009                                                                                                                       |  |                              | 26.3  |  
|                                                                                                                                                   |  |                              |       |  
|Sale of ARS                                                                                                                                        |  |                              | (21.8 | )
|Total realized/unrealized gains (losses)                                                                                                           |  |                              |       |  
|Reclass from Level 3 to Level 2 based upon market conditions                                                                                       |  |                              | (3.8  | )
|Included in investment income                                                                                                                      |  |                              | 19.0  |  
|Included in other comprehensive income                                                                                                             |  |                              | (8.1  | )
|                                                                                                                                                   |  |                              |       |  
|Balance at December 31, 2010                                                                                                                       |  | $                            | 11.6  |  
|                                                                                                                                                   |  |                              |       |  
|The amount of total losses for the period included in net loss attributable to the fair value of changes in assets still held at
December 31, 2009 |  | $                            | (2.0  | )
|                                                                                                                                                   |  |                              |       |  
|The amount of total losses for the period included in net loss attributable to the fair value of changes in assets still held at
December 31, 2010 |  | $                            |      |  
|                                                                                                                                                   |  |                              |       |  

Carrying amounts reported on the balance sheet for cash, cash equivalents, receivables and accounts payable
approximate fair value due to the short-term maturity of these instruments.

During the year ended December 31, 2010, LP
recorded an impairment of $0.9 million to reduce the carrying value of assets held and used to their net realizable value. The valuation of these assets was determined using level two inputs under the market approach.

During the year ended December 31, 2010, LP recorded an Other-than-temporary impairment charge of $17.0 million to reduce the
carrying value of an equity method investment to the estimated sales price. This sales price was based upon LPs decision (based upon decisions by its joint venture partner) to sell this investment. The estimated sales price of this
investment was below the then current book value and therefore impairment was required. While the sale of this investment is currently delayed, LP determined that the impairment recorded was still appropriate as of December 31, 2010.
The valuation of these assets was determined using level two inputs under the market approach



|4. | RECEIVABLES
|-- | -----------

Receivables
consist of the following:



|                                |  |              |      |   |      |   |      |  
|------------------------------- |  | ------------ | ---- | - | ---- | - | ---- | -
|                                |  | December 31, |     
|Dollar amounts in millions      |  | 2010         |      |   | 2009 |  
|Trade receivables               |  | $            | 56.2 |   |      | $ | 47.4 |  
|Interest receivables            |  |              | 1.1  |   |      |   | 1.9  |  
|Other receivables               |  |              | 10.8 |   |      |   | 11.8 |  
|Allowance for doubtful accounts |  |              | (1.3 | ) |      |   | (1.2 | )
|                                |  |              |      |   |      |   |      |  
|                                |  | $            | 66.8 |   |      | $ | 59.9 |  
|                                |  |              |      |   |      |   |      |  



62



---

Other receivables at December 31, 2010 and 2009 primarily consist of short-term notes
receivable, settlements, Canadian sales tax receivables and other items.



|5. | INVENTORIES
|-- | -----------

Inventories
consisted of the following (work-in-process is not material):



|                           |  |              |       |   |      |   |       |  
|-------------------------- |  | ------------ | ----- | - | ---- | - | ----- | -
|                           |  | December 31, |      
|Dollar amounts in millions |  | 2010         |       |   | 2009 |  
|Logs                       |  | $            | 22.4  |   |      | $ | 15.3  |  
|Other raw materials        |  |              | 21.4  |   |      |   | 18.6  |  
|Finished products          |  |              | 100.3 |   |      |   | 98.4  |  
|Supplies                   |  |              | 8.5   |   |      |   | 9.0   |  
|LIFO reserve               |  |              | (0.7  | ) |      |   | (0.9  | )
|                           |  |              |       |   |      |   |       |  
|Total                      |  | $            | 151.9 |   |      | $ | 140.4 |  
|                           |  |              |       |   |      |   |       |  

During 2010 and 2009, liquidation of LIFO layers reduced cost of sales by $0.2 million and $0.9 million.



|6. | NOTES RECEIVABLE FROM ASSET SALES
|-- | ---------------------------------

Notes receivable from asset sales are related to transactions that occurred during 1997, 1998 and 2003. The 1997 and 1998 notes receivable provide collateral for LPs limited recourse notes payable
and the 2003 notes receivable provide collateral for LPs non-recourse notes payable (see Note 12). LP monitors the collectability of these notes on a regular basis.



|                                                                     |  |                    |           |   |              |   |       |  |  |   |       | 
|-------------------------------------------------------------------- |  | ------------------ | --------- | - | ------------ | - | ----- |  |  | - | ----- | 
|Dollar amounts in millions                                           |  | Interest 
Rate2010 |           |   | December 31, |  
|                                                                     |  | 2010               |           |   | 2009         |  
|Notes receivable (unsecured), maturing 2012, interest rates fixed    |  |                    | 5.6       | % |              | $ | 9.9   |  |  | $ | 9.9   | 
|Notes receivable (secured), maturing 2013-2018, interest rates fixed |  |                    | 7.1  7.3 | % |              |   | 113.6 |  |  |   | 228.7 | 
|Notes receivable (secured), maturing 2018, interest rate variable    |  |                    |           |   |              |   | 410.0 |  |  |   | 410.0 | 
|                                                                     |  |                    |           |   |              |   |       |  |  |   |       | 
|Total                                                                |  |                    |           |   |              |   | 533.5 |  |  |   | 648.6 | 
|Current portion                                                      |  |                    |           |   |              |   |      |  |  |   | 115.1 | 
|                                                                     |  |                    |           |   |              |   |       |  |  |   |       | 
|Long-term portion                                                    |  |                    |           |   |              | $ | 533.5 |  |  | $ | 533.5 | 
|                                                                     |  |                    |           |   |              |   |       |  |  |   |       | 

The weighted average interest rate for all notes receivable from asset sales at December 31, 2010 and
2009 was approximately 2.1% and 3.0%. The notes mature as follows:



|                                                   |  |   |       | 
|-------------------------------------------------- |  | - | ----- | 
|Dollar amounts in millions
Year ended December 31, |  |   |      
|2011                                               |  | $ |      | 
|2012                                               |  |   | 9.9   | 
|2013                                               |  |   | 91.4  | 
|2014                                               |  |   |      | 
|2015                                               |  |   |      | 
|2016 and after                                     |  |   | 432.2 | 
|                                                   |  |   |       | 
|Total                                              |  | $ | 533.5 | 
|                                                   |  |   |       | 

LP estimates that the fair value of these notes at December 31, 2010 and 2009 was approximately $548.7
million and $654.5 million.



63



---

|7. | OTHER INTANGIBLE ASSETS
|-- | -----------------------

Intangible assets (other than goodwill) are reflected in the Consolidated Balance Sheets as follows:



|                                                                                                                        |  |              |     |  |      |   |      | 
|----------------------------------------------------------------------------------------------------------------------- |  | ------------ | --- |  | ---- | - | ---- | 
|                                                                                                                        |  | December 31, |    
|Dollar amounts in millions                                                                                              |  | 2010         |     |  | 2009 |  
|Goodwill associated with equity investment in U.S. GreenFiber (recorded in Investments in and advances to
affiliates) |  | $            |    |  |      | $ | 16.4 | 
|                                                                                                                        |  |              |     |  |      |   |      | 
|Customer relationships, net of amortization                                                                             |  |              | 2.2 |  |      |   | 3.0  | 
|                                                                                                                        |  |              |     |  |      |   |      | 
|Total intangible assets                                                                                                 |  | $            | 2.2 |  |      | $ | 19.4 | 
|                                                                                                                        |  |              |     |  |      |   |      | 

Customer relationships are amortized on a straight line basis over the estimated period of economic benefit,
generally five years. The initial value of the customer relationships were at $3.9 million. Amortization expense was $0.8 million for the year ended December 31, 2010 and $0.8 million for the year ended December 31, 2009.

During 2010, LP wrote off the $16.4 million of goodwill associated with its equity investment in U.S. Greenfiber. See Note 3 for further
discussion.



|8. | INVESTMENTS IN AND ADVANCES TO AFFILIATES
|-- | -----------------------------------------

LP has investments in affiliates that are accounted for under the equity method based upon the specific terms of the agreement as well as advances to affiliates. The significant components of these
investments and advances are as follows:

At December 31, 2010, LPs significant equity method investees, its
approximate ownership interest and principal business activity in each investee were as follows:



|                |  |             |    |   |  |                                                                                               
|--------------- |  | ----------- | -- | - |  | ----------------------------------------------------------------------------------------------
|                |  | Ownership % |    |   | 
|U.S. GreenFiber |  |             | 50 | % |  | Established to manufacture and sell cellulose insulation products.                            
|AbitibiLP      |  |             | 50 | % |  | Established to construct and operate jointly owned I-Joist facilities in Quebec, Canada.      
|CanforLP       |  |             | 50 | % |  | Established to construct and operate a jointly owned OSB facility in British Columbia, Canada.

These investments do not meet the Regulation S-X significance test requiring the inclusion of the separate investee financial statements,
however based upon the aggregation requirements under S-X, aggregated summarized financial information is required as follows:



|                             |  |                         |       |   |      |   |       |      |  |   |       |  
|---------------------------- |  | ----------------------- | ----- | - | ---- | - | ----- | ---- |  | - | ----- | -
|                             |  | Year Ended December 31, |      
|Dollars in millions          |  | 2010                    |       |   | 2009 |   |       | 2008 | 
|Net sales                    |  | $                       | 241.9 |   |      | $ | 213.7 |      |  | $ | 248.2 |  
|                             |  |                         |       |   |      |   |       |      |  |   |       |  
|Net loss                     |  | $                       | (12.8 | ) |      | $ | (21.8 | )    |  | $ | (31.5 | )
|                             |  |                         |       |   |      |   |       |      |  |   |       |  
|                             |  |                        
|                             |  | As of December 31,      |       |   |      |  
|Current assets               |  | $                       | 57.3  |   |      | $ | 45.7  |      |  |   |       |  
|Long term assets             |  |                         | 211.4 |   |      |   | 217.2 |      |  |   |       |  
|                             |  |                         |       |   |      |   |       |      |  |   |       |  
|Total assets                 |  | $                       | 268.7 |   |      | $ | 262.9 |      |  |   |       |  
|                             |  |                         |       |   |      |   |       |      |  |   |       |  
|Total liabilities            |  | $                       | 45.1  |   |      | $ | 34.4  |      |  |   |       |  
|Equity                       |  |                         | 223.6 |   |      |   | 228.5 |      |  |   |       |  
|                             |  |                         |       |   |      |   |       |      |  |   |       |  
|Total liabilities and equity |  | $                       | 268.7 |   |      | $ | 262.9 |      |  |   |       |  
|                             |  |                         |       |   |      |   |       |      |  |   |       |  



64



---

LP sells products and raw materials to the Abitibi-LP entity and purchases products for
resale from the Abitibi-LP and Canfor-LP entities. LP eliminates profits on these sales and purchases, to the extent the inventory has not been sold through to third parties, on the basis of its 50% interest. For the years ended December 31,
2010, 2009 and 2008, LP sold $5.6 million, $5.5 million and $7.9 million of products to Abitibi-LP and purchased $39.6 million, $32.5 million and $45.8 million of I-joists from Abitibi-LP. LP also purchased $109.5 million, $51.0 million and $77.6
million of OSB from Canfor-LP for the years ended December 31, 2010, 2009 and 2008. Included in LPs Consolidated Balance Sheets at December 31, 2010 and 2009 are $1.6 million in accounts receivable and $2.4 million and $1.0 million in
accounts payable from these affiliates.



|9. | ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
|-- | ----------------------------------------

Accounts payable and accrued liabilities were as follows:



|                                               |  |              |       |  |      |   |       | 
|---------------------------------------------- |  | ------------ | ----- |  | ---- | - | ----- | 
|                                               |  | December 31, |      
|Dollar amounts in millions                     |  | 2010         |       |  | 2009 |  
|Accounts payable                               |  | $            | 53.8  |  |      | $ | 47.7  | 
|Salaries and wages payable                     |  |              | 29.3  |  |      |   | 31.0  | 
|Taxes other than income taxes                  |  |              | 5.0   |  |      |   | 6.5   | 
|Workers compensation                          |  |              | 2.7   |  |      |   | 2.0   | 
|Accrued interest                               |  |              | 10.0  |  |      |   | 11.7  | 
|Other accrued liabilities                      |  |              | 26.9  |  |      |   | 23.9  | 
|Income taxes payable                           |  |              | 0.1   |  |      |   | 0.2   | 
|                                               |  |              |       |  |      |   |       | 
|Total Accounts payable and accrued liabilities |  | $            | 127.8 |  |      | $ | 123.0 | 
|                                               |  |              |       |  |      |   |       | 

Other accrued liabilities at December 31, 2010 and 2009 primarily consist of accrued rent, accrued
rebates, timber liabilities, current portion of warranty reserves and other items.



|10. | INCOME TAXES
|--- | ------------

The
following presents the domestic and foreign components of income (loss) before tax.



|                           |  |                         |       |   |      |   |        |      |  |   |        |  
|-------------------------- |  | ----------------------- | ----- | - | ---- | - | ------ | ---- |  | - | ------ | -
|                           |  | Year ended December 31, |      
|Dollar amounts in millions |  | 2010                    |       |   | 2009 |   |        | 2008 | 
|Domestic                   |  | $                       | (46.3 | ) |      | $ | (129.4 | )    |  | $ | (447.2 | )
|Foreign                    |  |                         | (18.8 | ) |      |   | (58.2  | )    |  |   | (339.5 | )
|                           |  |                         |       |   |      |   |        |      |  |   |        |  
|Total                      |  | $                       | (65.1 | ) |      | $ | (187.6 | )    |  | $ | (786.7 | )
|                           |  |                         |       |   |      |   |        |      |  |   |        |  

Income before taxes is reflected in the Consolidated Statements of Income as follows:



|                                                                                             |  |                         |       |   |      |   |        |      |  |   |        |  
|-------------------------------------------------------------------------------------------- |  | ----------------------- | ----- | - | ---- | - | ------ | ---- |  | - | ------ | -
|                                                                                             |  | Year ended December 31, |      
|Dollar amounts in millions                                                                   |  | 2010                    |       |   | 2009 |   |        | 2008 | 
|Loss from continuing operations before taxes and equity in loss of unconsolidated affiliates |  | $                       | (47.9 | ) |      | $ | (169.5 | )    |  | $ | (752.0 | )
|Equity in loss of unconsolidated affiliates                                                  |  |                         | (6.4  | ) |      |   | (10.4  | )    |  |   | (12.6  | )
|                                                                                             |  |                         |       |   |      |   |        |      |  |   |        |  
|Loss from continuing operations                                                              |  |                         | (54.3 | ) |      |   | (179.9 | )    |  |   | (764.6 | )
|Loss from discontinued operations                                                            |  |                         | (10.4 | ) |      |   | (8.6   | )    |  |   | (22.3  | )
|                                                                                             |  |                         |       |   |      |   |        |      |  |   |        |  
|Net loss                                                                                     |  |                         | (64.7 | ) |      |   | (188.5 | )    |  |   | (786.9 | )
|Less: (Income) loss attributable to non-controlling interest                                 |  |                         | (0.4  | ) |      |   | 0.9    |      |  |   | 0.2    |  
|                                                                                             |  |                         |       |   |      |   |        |      |  |   |        |  
|Net income (loss) attributable to LP shareholders                                            |  | $                       | (65.1 | ) |      | $ | (187.6 | )    |  | $ | (786.7 | )
|                                                                                             |  |                         |       |   |      |   |        |      |  |   |        |  



65



---

Income tax benefit is reflected in the Consolidated Statements of Income as follows:



|                           |  |                         |       |   |      |   |       |      |  |   |        |  
|-------------------------- |  | ----------------------- | ----- | - | ---- | - | ----- | ---- |  | - | ------ | -
|                           |  | Year ended December 31, |      
|Dollar amounts in millions |  | 2010                    |       |   | 2009 |   |       | 2008 | 
|Continuing operations      |  | $                       | (22.1 | ) |      | $ | (63.4 | )    |  | $ | (201.5 | )
|Discontinued operations    |  |                         | (4.0  | ) |      |   | (3.3  | )    |  |   | (8.6   | )
|                           |  |                         |       |   |      |   |       |      |  |   |        |  
|Total income tax benefit   |  | $                       | (26.1 | ) |      | $ | (66.7 | )    |  | $ | (210.1 | )
|                           |  |                         |       |   |      |   |       |      |  |   |        |  

The following presents the components of LPs total income tax provision (benefit):



|                                            |  |                         |       |   |      |   |       |      |  |   |        |  
|------------------------------------------- |  | ----------------------- | ----- | - | ---- | - | ----- | ---- |  | - | ------ | -
|                                            |  | Year ended December 31, |      
|Dollar amounts in millions                  |  | 2010                    |       |   | 2009 |   |       | 2008 | 
|Current tax provision (benefit):            |  |                         |       |   |      |   |       |      |  |   |        |  
|U.S. federal                                |  | $                       | (1.1  | ) |      | $ | (46.9 | )    |  | $ | (62.0  | )
|State and local                             |  |                         | 1.1   |   |      |   | (1.6  | )    |  |   | 1.6    |  
|Foreign                                     |  |                         | (13.4 | ) |      |   | 0.5   |      |  |   | (5.9   | )
|                                            |  |                         |       |   |      |   |       |      |  |   |        |  
|Net current tax benefit                     |  |                         | (13.4 | ) |      |   | (48.0 | )    |  |   | (66.3  | )
|                                            |  |                         |       |   |      |   |       |      |  |   |        |  
|Deferred tax provision (benefit):           |  |                         |       |   |      |   |       |      |  |   |        |  
|U.S. federal                                |  |                         | (10.4 | ) |      |   | 5.6   |      |  |   | (78.1  | )
|State and local                             |  |                         | (3.9  | ) |      |   | (2.4  | )    |  |   | (19.0  | )
|Foreign                                     |  |                         | 2.5   |   |      |   | (29.4 | )    |  |   | (32.4  | )
|Net valuation allowance increase (decrease) |  |                         | (0.9  | ) |      |   | 7.5   |      |  |   | (14.3  | )
|                                            |  |                         |       |   |      |   |       |      |  |   |        |  
|Net deferred tax benefit                    |  |                         | (12.7 | ) |      |   | (18.7 | )    |  |   | (143.8 | )
|                                            |  |                         |       |   |      |   |       |      |  |   |        |  
|Total income tax benefit                    |  | $                       | (26.1 | ) |      | $ | (66.7 | )    |  | $ | (210.1 | )
|                                            |  |                         |       |   |      |   |       |      |  |   |        |  

LP received income tax refunds during 2010, 2009 and 2008 of $51.4 million, $91.1 million and $141.5 million
and paid cash taxes of $5.7 million, $11.8 million and $17.0 million. Included in the Consolidated Balance Sheet at December 31, 2010 and 2009 are income tax receivables of $18.7 million and $52.7 million.

The income tax effects of LPs share of the income or loss of U.S. GreenFiber and Canfor-LP OSB Limited Partnership in 2010, 2009
and 2008 are recorded in Benefit for income taxes on the Consolidated Statements of Income, while LPs share of such pre-tax income is recorded in Equity in loss of unconsolidated affiliates.



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The tax effects of significant temporary differences creating deferred tax (assets) and
liabilities at December 31 were as follows:



|                                                 |  |              |        |   |      |   |        |  
|------------------------------------------------ |  | ------------ | ------ | - | ---- | - | ------ | -
|                                                 |  | December 31, |       
|Dollar amounts in millions                       |  | 2010         |        |   | 2009 |  
|Property, plant and equipment                    |  | $            | 175.9  |   |      | $ | 164.9  |  
|Timber and timberlands                           |  |              | 12.8   |   |      |   | 13.5   |  
|Inventories                                      |  |              | (14.0  | ) |      |   | (12.5  | )
|Accrued liabilities                              |  |              | (67.4  | ) |      |   | (72.5  | )
|Benefit of capital loss and NOL carryovers       |  |              | (118.1 | ) |      |   | (124.9 | )
|Benefit of federal & state tax credit carryovers |  |              | (30.2  | ) |      |   | (29.7  | )
|Installment sale gain deferral                   |  |              | 166.7  |   |      |   | 208.5  |  
|Deferred financial income/loss                   |  |              | (6.9   | ) |      |   | 2.6    |  
|Market value write down of ARS                   |  |              | (21.9  | ) |      |   | (34.5  | )
|Other                                            |  |              | 18.4   |   |      |   | 19.0   |  
|Valuation allowance                              |  |              | 20.2   |   |      |   | 21.1   |  
|                                                 |  |              |        |   |      |   |        |  
|Net deferred tax liabilities                     |  | $            | 135.5  |   |      | $ | 155.5  |  
|                                                 |  |              |        |   |      |   |        |  
|Balance sheet classification                     |  |              |        |   |      |   |        |  
|Current deferred tax asset                       |  | $            | (23.4  | ) |      | $ | (1.4   | )
|Long-term deferred tax asset                     |  |              | (5.9   | ) |      |   | (7.4   | )
|Long-term deferred tax liability                 |  |              | 164.8  |   |      |   | 164.3  |  
|                                                 |  |              |        |   |      |   |        |  
|                                                 |  | $            | 135.5  |   |      | $ | 155.5  |  
|                                                 |  |              |        |   |      |   |        |  

The $118.1 million of benefit relating to capital loss and net operating loss (NOL) carryovers included in
the above table at December 31, 2010 consists of $25.4 million for federal NOL carryovers which will expire in 2029, $31.0 million (net of federal taxes) for state NOL carryovers which will expire in various years through 2025, $52.3 million
for Canadian NOL carryovers which will expire in 2029 and $9.4 million for Canadian capital loss carryovers which may be carried forward indefinitely. At December 31, 2010 LP has recorded valuation allowances of $10.5 million against the state
NOL carryover benefit, $8.2 million against the Canadian capital loss benefit and $1.5 million against the state tax credit carryovers.

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. Based upon review
of earnings history and trends, tax planning strategies already implemented, reversal of deferred tax liabilities and the relevant expiration of carry forwards, LP believes that the valuation allowances provided are appropriate. If future
years taxable income differs from the estimates used to establish these valuation allowances, LP may be required to record an adjustment resulting in an impact on current tax expense.

The current tax cost recognized upon the vesting of employee stock programs is a reduction in additional paid in capital of $
0.4 million, $1.4 million and $0.3 million for 2010 and 2009 and 2008.

U.S. taxes have not been provided on
approximately $20.4 million of undistributed earnings of LPs foreign subsidiaries, which under existing law are not subject to U.S. tax until distributed as dividends. These earnings have been, and are intended to be, indefinitely reinvested
in LPs foreign operations. Furthermore, any taxes paid to the foreign governments on these earnings may be used, in whole or in part, as credits against the U.S. tax on any dividends distributed from such earnings.



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The following table summarizes the differences between the statutory U.S. federal and
effective income tax rates:



|                                               |  |                         |     |    |      |  |     |      |  |  |     |   
|---------------------------------------------- |  | ----------------------- | --- | -- | ---- |  | --- | ---- |  |  | --- | --
|                                               |  | Year ended December 31, |    
|                                               |  | 2010                    |     |    | 2009 |  |     | 2008 | 
|U.S. Federal tax rate                          |  |                         | (35 | %) |      |  | (35 | %)   |  |  | (35 | %)
|State and local income taxes                   |  |                         | (6  | )  |      |  | (2  | )    |  |  | (2  | ) 
|Effect of non-deductible goodwill impairments  |  |                         | 9   |    |      |  |    |      |  |  | 12  |   
|Effect of foreign debt structure               |  |                         |    |    |      |  | (4  | )    |  |  | (3  | ) 
|Effect of foreign tax rates / foreign exchange |  |                         | (11 | )  |      |  |    |      |  |  | 1   |   
|Valuation allowance                            |  |                         | (1  | )  |      |  | 3   |      |  |  |    |   
|Other, net                                     |  |                         | 4   |    |      |  | 3   |      |  |  |    |   
|                                               |  |                         |     |    |      |  |     |      |  |  |     |   
|Effective tax rate (%)                         |  |                         | (40 | %) |      |  | (35 | %)   |  |  | (27 | %)
|                                               |  |                         |     |    |      |  |     |      |  |  |     |   

LPs policy is to record interest paid or received with respect to income taxes or uncertain tax
positions as interest expense or interest income, respectively, in the Consolidated Statements of Income. Penalties related to unrecognized tax benefits or assessments are charged to income tax expense.

LP and its domestic subsidiaries are subject to U.S. federal income tax as well as income taxes of multiple state jurisdictions. Its
foreign subsidiaries are subject to income tax in Canada, Chile, Peru and Brazil. The U.S. Internal Revenue Service has completed its examination of the U.S. Federal income tax returns of LP for all years through 2006, and has notified LP that it
will begin an audit of the tax years 2007 through 2009 in the first quarter of 2011. LP settled various state income tax audits during 2010 and is subject to various state and local income tax examinations for the tax years 2005 through 2009.
Canadian federal income tax returns have been audited and effectively settled through 2004. Quebec provincial audits have been effectively settled through 2009. No Canadian federal or provincial audits are currently in progress.

In accordance with the accounting for uncertain tax positions, the following is a tabular reconciliation of the total amount of
unrecognized tax benefits at the beginning and end of the years presented:



|                                    |  |              |      |   |      |   |      |      |  |   |      | 
|----------------------------------- |  | ------------ | ---- | - | ---- | - | ---- | ---- |  | - | ---- | 
|                                    |  | December 31, |     
|Dollar amounts in millions          |  | 2010         |      |   | 2009 |   |      | 2008 | 
|Beginning balance                   |  | $            | 13.0 |   |      | $ | 14.4 |      |  | $ | 13.6 | 
|Increases:                          |  |              |      |   |      |   |      |      |  |   |      | 
|Tax positions taken in prior years  |  |              | 0.7  |   |      |   | 1.3  |      |  |   | 0.8  | 
|Decreases:                          |  |              |      |   |      |   |      |      |  |   |      | 
|Tax positions taken in current year |  |              | (0.7 | ) |      |   | (1.6 | )    |  |   |     | 
|Settlements during the year         |  |              | (1.7 | ) |      |   | (1.1 | )    |  |   |     | 
|                                    |  |              |      |   |      |   |      |      |  |   |      | 
|Ending balance                      |  | $            | 11.3 |   |      | $ | 13.0 |      |  | $ | 14.4 | 
|                                    |  |              |      |   |      |   |      |      |  |   |      | 

Included in the above balances at December 31, 2010 and 2009 is $1.2 million and $2.2 million of tax
benefits that, if recognized, would affect LPs effective tax rate, and no penalties. LP accrued interest of $1.0 million and $1.8 million during 2010 and 2009 and in total LP has recognized a liability of $2.5 million and $1.7 million for
accrued interest related to its uncertain tax positions as of December 31, 2010 and December 31, 2009. At this point, it is not possible to reasonably estimate whether the unrecognized tax benefit will change significantly within the next
twelve months.



68



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|11. | NON-OPERATING INCOME (EXPENSE)
|--- | ------------------------------

Included in LPs Consolidated Statements of Income is a non-operating expense of $40.3 million, $36.2 million and $108.4 million for the years ended December 31, 2009, 2008 and 2007. This
expense is comprised of the following components:



|                                              |  |                         |       |   |      |   |       |      |  |   |        |  
|--------------------------------------------- |  | ----------------------- | ----- | - | ---- | - | ----- | ---- |  | - | ------ | -
|                                              |  | Year ended December 31, |      
|Dollar amounts in millions                    |  | 2010                    |       |   | 2009 |   |       | 2008 | 
|Interest expense                              |  | $                       | (60.8 | ) |      | $ | (71.7 | )    |  | $ | (64.2  | )
|Amortization of debt charges                  |  |                         | (3.1  | ) |      |   | (3.0  | )    |  |   | (0.6   | )
|Capitalized interest                          |  |                         |      |   |      |   | 0.1   |      |  |   | 3.6    |  
|                                              |  |                         |       |   |      |   |       |      |  |   |        |  
|Interest expense, net of capitalized interest |  |                         | (63.9 | ) |      |   | (74.6 | )    |  |   | (61.2  | )
|                                              |  |                         |       |   |      |   |       |      |  |   |        |  
|Investment income                             |  |                         | 18.0  |   |      |   | 26.0  |      |  |   | 56.0   |  
|Realized gains from the sales of investments  |  |                         | 19.0  |   |      |   | 18.7  |      |  |   |       |  
|SERP market adjustments                       |  |                         | 1.4   |   |      |   | 3.0   |      |  |   | (4.2   | )
|                                              |  |                         |       |   |      |   |       |      |  |   |        |  
|Investment income                             |  |                         | 38.4  |   |      |   | 47.7  |      |  |   | 51.8   |  
|                                              |  |                         |       |   |      |   |       |      |  |   |        |  
|Other than temporary impairment               |  |                         | (17.0 | ) |      |   | (2.0  | )    |  |   | (118.6 | )
|Foreign currency gains (losses)               |  |                         | 2.2   |   |      |   | 13.4  |      |  |   | 19.6   |  
|Early debt extinguishment                     |  |                         |      |   |      |   | (20.7 | )    |  |   |       |  
|                                              |  |                         |       |   |      |   |       |      |  |   |        |  
|Other non-operating expense                   |  |                         | 2.2   |   |      |   | (7.3  | )    |  |   | 19.6   |  
|                                              |  |                         |       |   |      |   |       |      |  |   |        |  
|Total non-operating income (expense)          |  | $                       | (40.3 | ) |      | $ | (36.2 | )    |  | $ | (108.4 | )
|                                              |  |                         |       |   |      |   |       |      |  |   |        |  

For the year ended December 31, 2010, LP recorded an impairment charge of $17.0 million associated with
the anticipated sale of an equity investment in a joint venture to reduce the carrying value of this investment to it estimated fair value. See Note 3 for further discussion of this investment.

For the year ended December 31, 2009 and 2008, LP record impairment charges of $2.0 million and $118.6 million associated with
auction rate securities. See Note 2 for further discussion of these securities.

For the year ended December 31, 2009, LP
recognized $20.7 million in loss on early debt extinguishment associated with the repurchase of debt issued in early 2009. See note 12 for further discussion of this transaction.



|12. | LONG-TERM DEBT
|--- | --------------



|                                                                  |  |                    |           |   |              |      |       |   |  |   |        |  
|----------------------------------------------------------------- |  | ------------------ | --------- | - | ------------ | ---- | ----- | - |  | - | ------ | -
|                                                                  |  | InterestRate 
2010 |           |   | December 31, |     
|Dollar amounts in millions                                        |  |                    | 2010      |   |              | 2009 |      
|Debentures:                                                       |  |                    |           |   |              |      |       |   |  |   |        |  
|Senior notes, matured 2010                                        |  |                    |           |   |              | $    |      |   |  | $ | 60.0   |  
|Senior secured notes, maturing 2017, interest rates fixed         |  |                    | 13        | % |              |      | 183.5 |   |  |   | 178.2  |  
|Bank credit facilities:                                           |  |                    |           |   |              |      |       |   |  |   |        |  
|Chilean term credit facility, maturing 2019, interest rates fixed |  |                    | UF+5.5    | % |              |      | 42.3  |   |  |   | 39.0   |  
|Limited recourse notes payable:                                   |  |                    |           |   |              |      |       |   |  |   |        |  
|Senior notes, payable 2012, interest rates fixed                  |  |                    | 7.1       | % |              |      | 7.9   |   |  |   | 7.9    |  
|Senior notes, payable 2010-2018, interest rates fixed             |  |                    | 7.1  7.3 | % |              |      | 112.0 |   |  |   | 225.4  |  
|Senior notes payable 2018, interest rates variable                |  |                    | 0.3       | % |              |      | 368.7 |   |  |   | 368.7  |  
|Other financing                                                   |  |                    |           |   |              |      | 0.3   |   |  |   | 0.8    |  
|                                                                  |  |                    |           |   |              |      |       |   |  |   |        |  
|Total                                                             |  |                    |           |   |              |      | 714.7 |   |  |   | 880.0  |  
|Less: current portion                                             |  |                    |           |   |              |      | (0.2  | ) |  |   | (173.7 | )
|                                                                  |  |                    |           |   |              |      |       |   |  |   |        |  
|Net long-term portion                                             |  |                    |           |   |              | $    | 714.5 |   |  | $ | 706.3  |  
|                                                                  |  |                    |           |   |              |      |       |   |  |   |        |  



69



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LP believes the carrying amounts of its variable rate long-term debt approximates fair
market value. LP estimated the limited recourse notes payable to have a fair value of approximately $126 million and $229 million at December 31, 2010 and 2009. LP estimated the senior secured notes maturing in 2017 to have a fair value of
$263 million at December 31, 2010 and December 31, 2009 based upon market quotations.

In 1997, LP issued
$47.9 million of senior notes in a private placement to institutional investors. The remaining $7.9 million of notes mature in 2012. They are secured by the remaining $9.9 million of notes receivable from Sierra Pacific Industries. In the event
of a default by Sierra Pacific Industries, LP is fully liable for the notes payable.

LP issued $348.6 million of senior
debt in June 1998 in a private placement to institutional investors. The remaining $112.0 million of notes mature in principal amounts of $90.0 million in 2013 and $22.0 million in 2018. The notes are secured by $113.7 million of
notes receivable from Green Diamond Resource Company (Green Diamond). Pursuant to the terms of the notes payable, in the event of a default by Green Diamond, LP would be liable to pay only 10% of the indebtedness represented by the notes payable.

LP issued $368.7 million of senior debt in 2003 in a private placement to unrelated third parties. The notes mature in 2018.
The notes are supported by a bank letter of credit. LPs reimbursement obligations under the letter of credit are secured by $410 million in notes receivable from assets sales. In general, the creditors under this arrangement have no recourse
to LPs assets, other than the notes receivable. However, under certain circumstances, LP may be liable for certain liabilities (including liabilities associated with the marketing or remarketing of the notes payable and reimbursement
obligations, which are fully cash collateralized, under the letter of credit supporting the notes payable) in an amount not to exceed 10% of the aggregate principle amount of the notes receivable.

During 2009, LP issued and sold 375,000 Units consisting of (1) $375 million principal amount at maturity of 13% Senior Secured
Notes due 2017 and (2) warrants to purchase 18,395,963 shares of our common stock at an exercise price of $1.39 per share, subject to adjustment in certain circumstances and to mandatory cashless exercise provisions. The units were issued at a
discount to the principal amount at maturity of the notes included therein resulting in aggregate gross proceeds of $281.3 million. The effective interest rate of this debt is 19.1% (or 19.7% including the warrants). Simultaneous with the closing of
the unit sale, LP used a portion of the proceeds to retire $126.6 million aggregate principal amount of our 8.875% Senior Notes due 2010 for $126.0 million. Subsequently in 2009, LP redeemed 35% of the outstanding Senior Secured Notes ($131.3
million principal amount at maturity) at a price of $858.14 per $1,000 principal amount at maturity or $112.6 million with a portion of the proceeds from the issuance and sale of 20,700,000 shares of common stock through a public offering. In
connection with this repurchase, LP recorded a loss on early debt extinguishment of $21.1 million which included $3.7 million associated with the write off the related financing costs.

LP has a credit facility which provides for a committed asset-based borrowing capacity of up to $100 million, with a $60 million sublimit
for U.S. letters of credit and a $10 million sublimit for Canadian letters of credit. The credit facility will end in September of 2012.

The availability of credit under the credit facility is subject to a borrowing base, which is calculated based on certain percentages of accounts receivable and inventory and at any given time may limit
the amount of borrowings and letters of credit otherwise available under the facility. In addition, the credit facility contains a covenant requiring us to maintain a fixed charge coverage ratio of at least 1.1 to 1.0 at any time that our unused
borrowing base capacity after adjustment to exclude certain past due trade payables falls below $15 million. At December 31, 2010, LP had $69.8 million of unused borrowing base capacity under the credit facility. The credit facility allows LP
to pledge, as security for its reimbursement obligations in respect of letters of credit issued under the facility, cash collateral in an amount not less than 105% of the of the stated amount of such letters of credit. The above-described preclusion
to LPs utilization of $15 million of the capacity otherwise available under the facility does not apply to such cash collateralized letters of credit. At December 31, 2010, LP had no



70



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borrowings outstanding under the facility. Outstanding under this facility at December 31, 2010, were $24.7 million in letters of credit which were collateralized by $26.3 million of cash.
Based upon LPs available cash balances, LP does not currently anticipate using this facility except to obtain and maintain letters of credit. Additionally, LP expects its fixed charge coverage ratio, may at times, be below 1.1 to 1.0
throughout 2011, and, accordingly be subject to the limitation on its ability to fully utilize the adjusted borrowing base capacity as described above. As a result, LPs ability to obtain and maintain non-cash collateralized letters of credit
under this facility may become constrained to an amount that does not exceed the excess of its adjusted borrowing base over $15 million.

The credit facility contains customary covenants applicable to LP and its subsidiaries, other than certain unrestricted subsidiaries, including certain financial covenants as well as restrictions on,
among other things, our ability to: incur debt; incur liens; declare or make distributions to our stockholders; make loans and investments; repay debt; enter into mergers, acquisitions and other business combinations; form or acquire subsidiaries;
amend or modify our governing documents; enter into hedging arrangements; engage in other businesses other than our business as currently conducted; and enter into transactions with affiliates. The credit facility also contains customary events of
default, the occurrence of which could result in the acceleration of our obligation to repay the indebtedness outstanding.

Obligations under the indenture governing our Senior Secured Notes due 2017 are, in general, secured by a first-priority lien on the
collateral that secures obligations under the credit facility on a second-priority basis, and by a second-priority lien on the collateral that secures obligations under the credit facility on a first-priority basis, subject to the terms of an
intercreditor agreement, and are guaranteed by the subsidiaries that guarantee obligations under the credit facility.

The
indenture contains customary covenants applicable to us and our subsidiaries, other than certain unrestricted subsidiaries, including restrictions on actions and activities that are restricted under the credit facility. The indenture also contains
customary events of default, the occurrence of which could result in acceleration of our obligations to repay the indebtedness outstanding thereunder.

LP Chile entered into a term loan agreement with Banco de Credito e Inversiones for UF 943,543.7391 (equivalent to $39 million at the time of inception). The loan agreement has a term of 10 years with
semi annual principal payments beginning in June of 2012. The loan bears interest at UF plus 5.50% per annum, and is secured by a first priority security interest in substantially all of the real property owned by LP Chile. Additionally, LP is
required to maintain a letter of credit for the benefit of the lender in an amount equal to $12.6 million, subject to reduction based upon attainment of certain financial tests. LP established such letter of credit in the amount of $12.6 million,
which is cash collateralized by approximately $13.2 million of cash. The loan contains various restrictive covenants and requires the maintenance by LP Chile of a debt to equity ratio of less than or equal to 1. If LP Chile is late in making
payments, it will also be required to maintain a ratio of net debt to earnings before interest, taxes, depreciation and amortization (EBITDA) of less than or equal to 5.5 for 2010, 3.2 for 2011 and 2.5 for the remainder of the loan period and a
ratio of EBITDA to financial costs of at least 3. The loan agreement also contains customary events of default, the occurrence of which could result in acceleration of LPs obligations to repay the indebtedness outstanding. Since this loan is
denominated in other than U.S. dollars, the balance fluctuates based upon the underlying currency rates. As of December 31, 2010, the balance of this loan is $42.3 million, however no additional monies have been borrowed nor loan payments made
on this loan.



71



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The weighted average interest rate for all long-term debt at December 31, 2010 and 2009
was approximately 5.7 percent and 5.6 percent. Required repayment of principal for long-term debt is as follows:



|                                                   |  |   |       | 
|-------------------------------------------------- |  | - | ----- | 
|Dollar amounts in millions
Year ended December 31, |  |   |      
|2011                                               |  | $ | 0.2   | 
|2012                                               |  |   | 13.2  | 
|2013                                               |  |   | 95.3  | 
|2014                                               |  |   | 5.3   | 
|2015                                               |  |   | 5.3   | 
|2016 and after                                     |  |   | 595.4 | 
|                                                   |  |   |       | 
|Total                                              |  | $ | 714.7 | 
|                                                   |  |   |       | 

Cash paid during 2010, 2009 and 2008 for interest (net of capitalized interest) was $57.0 million,
$63.7 million and $66.7 million.



|13. | RETIREMENT PLANS AND POSTRETIREMENT BENEFITS
|--- | --------------------------------------------

LP sponsors various defined benefit and defined contribution retirement plans that provide retirement benefits to substantially all of its employees. Most regularly scheduled employees are eligible to
participate in these plans except those covered by a collective bargaining agreement, unless the collective bargaining agreement specifically allows for participation in LPs plans. LP contributes to a multiemployer plan for certain employees
covered by collective bargaining agreements. LP also provides other post retirement benefits consisting primarily of healthcare benefits to certain retirees who meet age and service requirements.

LP adopted the recognition and plan asset disclosure requirements guidance now codified under ASC 715-20
CompensationRetirement Benefits (ASC 715-20) to recognize the measurement date and plan asset presentation requirements of ASC 715-20. The recognition of the measurement date was adopted as of December 31, 2008 and resulted in
a charge to ending retained earnings of $0.8 million after tax.

Defined Benefit Plans

Pension benefits are earned generally based upon years of service and compensation during active employment. Contributions to the
qualified defined benefit pension plans are based on actuarial calculations of amounts to cover current service costs and amortization of prior service costs over periods ranging up to 20 years. LP contributes additional funds as necessary to
maintain desired funding levels.

Benefit accruals under our most significant plans, which account for approximately 82% of
the assets and 77% of the benefit obligations in the tables below, had been credited at the rate of 5% of eligible compensation with an interest credit based upon the 30-year U.S. Treasury rate. The Company discontinued providing contribution
credits effective January 1, 2010 to these plans. The remaining defined benefit pension plans (primarily in Canada) use a variety of benefit formulas.

LP also maintains a Supplemental Executive Retirement Plan (SERP), an unfunded, non-qualified defined benefit plan intended to provide supplemental retirement benefits to key executives. Benefits are
generally based on compensation in the years immediately preceding normal retirement. LP has established a grantor trust that provides funds for the benefits payable under the SERP. The assets of the grantor trust are invested in corporate-owned
life insurance policies. At December 31, 2010 and 2009, the trust assets were valued at $16.5 million and $15.1 million and are included in Other assets on the Consolidated Balance Sheets. LP did not contribute to this
trust in 2010 or 2009.



72



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The components of LPs net periodic pension costs and the assumptions related to those
costs consisted of the following:



|                                                            |  |                         |       |   |      |   |       |      |  |   |       |  
|----------------------------------------------------------- |  | ----------------------- | ----- | - | ---- | - | ----- | ---- |  | - | ----- | -
|                                                            |  | Year ended December 31, |      
|Dollar amounts in millions                                  |  | 2010                    |       |   | 2009 |   |       | 2008 | 
|Service cost                                                |  | $                       | 2.8   |   |      | $ | 7.5   |      |  | $ | 8.3   |  
|Interest cost                                               |  |                         | 16.5  |   |      |   | 16.3  |      |  |   | 16.6  |  
|Expected return on plan assets                              |  |                         | (18.2 | ) |      |   | (17.9 | )    |  |   | (20.5 | )
|Amortization of prior service cost and net transition asset |  |                         | 0.3   |   |      |   | 0.4   |      |  |   | 1.2   |  
|Amortization of net actuarial loss                          |  |                         | 2.7   |   |      |   | 4.2   |      |  |   | 2.0   |  
|                                                            |  |                         |       |   |      |   |       |      |  |   |       |  
|Net periodic pension cost                                   |  | $                       | 4.1   |   |      | $ | 10.5  |      |  | $ | 7.6   |  
|                                                            |  |                         |       |   |      |   |       |      |  |   |       |  
|Loss (gain) due to curtailment                              |  | $                       | 0.2   |   |      | $ | 0.3   |      |  | $ | 2.0   |  
|                                                            |  |                         |       |   |      |   |       |      |  |   |       |  
|Discount rate                                               |  |                         | 5.95  | % |      |   | 6.14  | %    |  |   | 5.67  | %
|                                                            |  |                         |       |   |      |   |       |      |  |   |       |  
|Rate of compensation increase                               |  |                         | 0.6   | % |      |   | 0.5   | %    |  |   | 4.0   | %
|                                                            |  |                         |       |   |      |   |       |      |  |   |       |  
|Expected return on plan assets                              |  |                         | 7.17  | % |      |   | 7.28  | %    |  |   | 7.28  | %
|                                                            |  |                         |       |   |      |   |       |      |  |   |       |  

Other changes in plan assets and benefit obligations recognized in other comprehensive income:



|                                             |  |                         |      |   |      |   |      |      |  |   |      |  
|-------------------------------------------- |  | ----------------------- | ---- | - | ---- | - | ---- | ---- |  | - | ---- | -
|                                             |  | Year ended December 31, |     
|Dollar amounts in millions                   |  | 2010                    |      |   | 2009 |   |      | 2008 | 
|Net actuarial (gain) loss                    |  | $                       | 13.1 |   |      | $ | 5.8  |      |  | $ | 69.5 |  
|Amortization of net actuarial loss           |  |                         | (2.7 | ) |      |   | (4.2 | )    |  |   | (2.0 | )
|Prior service cost                           |  |                         |     |   |      |   |     |      |  |   | (2.0 | )
|Amortization of prior service cost           |  |                         | (0.4 | ) |      |   | (0.4 | )    |  |   | (1.2 | )
|Adjustment due to change in measurement date |  |                         |     |   |      |   |     |      |  |   | (0.5 | )
|Foreign exchange rate changes                |  |                         | 0.2  |   |      |   | 0.9  |      |  |   | (1.3 | )
|                                             |  |                         |      |   |      |   |      |      |  |   |      |  
|Total recognized in OCI                      |  | $                       | 10.2 |   |      | $ | 2.1  |      |  | $ | 62.5 |  
|                                             |  |                         |      |   |      |   |      |      |  |   |      |  

LP calculates the net periodic pension cost for a given fiscal year based upon assumptions developed at the
end of the previous fiscal year. LP made the decision in the fourth quarter of 2008 to freeze future contribution credits as of January 1, 2010 to its qualified U.S. defined benefit pension plans. The decrease in net periodic pension cost
from 2009 to 2010 was attributable to the decrease in service cost and a decrease in the amount of net actuarial loss amortized due to the lengthening of the amortization period based upon the frozen U.S. plans. LP recognized curtailment charges of
$0.2 million, $0.3 million and $2.0 million in 2010, 2009 and 2008. In 2008, the curtailment charge was related to immediate recognition of the prior service cost due to the elimination of future contribution credits to the U.S. pension plans as of
December 31, 2008.

The expected long-term rate of return on plan assets reflects the weighted-average expected long-term
rates of return for the broad categories of investments currently held in the plans (adjusted for expected changes), based on historical rates of return for each broad category, as well as factors that may constrain or enhance returns in the broad
categories in the future. The expected long-term rate of return on plan assets is adjusted when there are fundamental changes in expected returns in one or more broad asset categories and when the weighted-average mix of assets in the plans changes
significantly.



73



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The projected benefit obligation is the actuarial present value of benefits attributable to
employee service rendered to date, including the effects of estimated salary increases. The benefit plan obligation, funded status and the assumptions related to the obligations as of the measurement date for each year presented as of
December 31 follow:



|                                                                    |  |              |       |   |      |    |       |  
|------------------------------------------------------------------- |  | ------------ | ----- | - | ---- | -- | ----- | -
|                                                                    |  | December 31, |      
|Dollar amounts in millions                                          |  | 2010         |       |   | 2009 |   
|Change in benefit obligation:                                       |  |              |       |   |      |    |       |  
|Beginning of year balance                                           |  | $            | 290.9 |   |      | $  | 261.5 |  
|Service cost                                                        |  |              | 2.8   |   |      |    | 7.5   |  
|Interest cost                                                       |  |              | 16.5  |   |      |    | 16.3  |  
|Actuarial (gain)/loss                                               |  |              | 21.4  |   |      |    | 21.4  |  
|Curtailments/settlements                                            |  |              | 0.2   |   |      |    | (0.3  | )
|Foreign exchange rate changes                                       |  |              | 2.6   |   |      |    | 5.6   |  
|Benefits paid                                                       |  |              | (18.2 | ) |      |    | (21.1 | )
|                                                                    |  |              |       |   |      |    |       |  
|End of year balance                                                 |  | $            | 316.2 |   |      | $  | 290.9 |  
|                                                                    |  |              |       |   |      |    |       |  
|Change in assets (fair value):                                      |  |              |       |   |      |    |       |  
|Beginning of year balance                                           |  | $            | 232.7 |   |      | $  | 213.3 |  
|Actual return on plan assets                                        |  |              | 26.4  |   |      |    | 33.5  |  
|Employer contribution                                               |  |              | 11.8  |   |      |    | 1.4   |  
|Foreign exchange rate changes                                       |  |              | 2.5   |   |      |    | 5.6   |  
|Benefits paid                                                       |  |              | (18.2 | ) |      |    | (21.1 | )
|                                                                    |  |              |       |   |      |    |       |  
|End of year balance                                                 |  | $            | 255.2 |   |      | $  | 232.7 |  
|                                                                    |  |              |       |   |      |    |       |  
|Funded status                                                       |  | ($           | 61.0  | ) |      | ($ | 58.2  | )
|Weighted average assumptions for obligations as of measurement date |  |              |       |   |      |    |       |  
|Discount rate for obligations                                       |  |              | 5.16  | % |      |    | 5.86  | %
|Rate of compensation increase                                       |  |              | 0.62  | % |      |    | 0.44  | %

The amounts recognized in
LPs Consolidated Balance Sheets as of December 31 consist of the following:



|                                                                                    |  |      |       |   |      |    |       |  
|----------------------------------------------------------------------------------- |  | ---- | ----- | - | ---- | -- | ----- | -
|Dollar amounts in millions                                                          |  | 2010 |       |   | 2009 |   
|Noncurrent pension assets, included in Other assets                               |  | $    | 0.8   |   |      | $  | 2.5   |  
|Current pension liabilities, included in Accounts payable and accrued liabilities |  |      | (0.2  | ) |      |    | (0.2  | )
|Noncurrent pension liabilities, included in Other long-term liabilities           |  |      | (61.6 | ) |      |    | (60.5 | )
|                                                                                    |  |      |       |   |      |    |       |  
|Total                                                                               |  | ($   | 61.0  | ) |      | ($ | 58.2  | )
|                                                                                    |  |      |       |   |      |    |       |  
|Amounts recognized in other comprehensive incomepre-tax                            |  |      |       |   |      |    |       |  
|Net actuarial loss                                                                  |  | $    | 115.1 |   |      | $  | 104.2 |  
|Prior service cost                                                                  |  |      | 1.0   |   |      |    | 1.4   |  
|                                                                                    |  |      |       |   |      |    |       |  
|Total                                                                               |  | $    | 116.1 |   |      | $  | 105.6 |  
|                                                                                    |  |      |       |   |      |    |       |  

The total accumulated benefit obligation for all pension plans as of December 31, 2010 and 2009 was
$312.2 million and $285.3 million.

The accumulated benefit obligation and fair value of plan assets for pension plans with
accumulated benefit obligations in excess of plan assets were $299.7 million and $242.3 million at December 31, 2010 and $270.6 million and $215.3 million at December 31, 2009. The projected benefit obligations and fair value of plan
assets of plans with projected benefit obligations in excess of plan assets were $303.6 million and $242.3 million at December 31, 2010 and $275.9 million and $215.3 million at December 31, 2009.



74



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The amounts of accumulated other comprehensive income that is expected to be amortized as
expense during 2011 is:



|                           |  |   |     | 
|-------------------------- |  | - | --- | 
|Dollar amounts in millions |  |   |    
|Net actuarial loss         |  | $ | 2.6 | 
|Prior service cost         |  |   | 0.3 | 
|                           |  |   |     | 
|Total                      |  | $ | 2.9 | 
|                           |  |   |     | 

LP expects to contribute approximately $10 to $12 million to its pension plans in 2011.

The benefits expected to be paid from the benefit plans, which reflect expected future service, in millions of dollars are as follows:



|                           |  |   |       | 
|-------------------------- |  | - | ----- | 
|Dollar amounts in millions |  |   |      
|Year                       |  |   |       | 
|2011                       |  | $ | 17.5  | 
|2012                       |  |   | 18.5  | 
|2013                       |  |   | 28.5  | 
|2014                       |  |   | 23.9  | 
|2015                       |  |   | 19.9  | 
|2016  2020                |  |   | 111.1 | 

These estimated
benefit payments are based upon assumptions about future events. Actual benefit payments may vary significantly from these estimates.

Asset allocation targets are established based upon the long-term returns and volatility characteristics of the investment classes and recognize the benefits of diversification and the profits of the
plans liabilities. The actual and target allocations at the measurement dates are as follows:



|                                           |  |                      |       |   |                  |  |       |   |  |  |       |  
|------------------------------------------ |  | -------------------- | ----- | - | ---------------- |  | ----- | - |  |  | ----- | -
|Dollar amounts in millions                 |  | TargetAllocation2010 |       |   | ActualAllocation | 
|                                           |  | 2010                 |       |   | 2009             | 
|Asset category                             |  |                      |       |   |                  |  |       |   |  |  |       |  
|Equity securities                          |  |                      | 49.9  | % |                  |  | 54.3  | % |  |  | 53.7  | %
|Debt securities                            |  |                      | 23.7  |   |                  |  | 21.4  |   |  |  | 21.7  |  
|Real estate                                |  |                      | 8.2   |   |                  |  | 5.4   |   |  |  | 5.3   |  
|Other, including cash and cash equivalents |  |                      | 18.2  |   |                  |  | 18.9  |   |  |  | 19.3  |  
|                                           |  |                      |       |   |                  |  |       |   |  |  |       |  
|Total                                      |  |                      | 100.0 | % |                  |  | 100.0 | % |  |  | 100.0 | %
|                                           |  |                      |       |   |                  |  |       |   |  |  |       |  

LPs investment policies for the defined benefit pension plans provide target asset allocations by
broad categories of investment and ranges of acceptable allocations. These policies are set by an administrative committee with the goal of maximizing long-term investment returns within acceptable levels of volatility and risk. LPs U.S. plans
include real estate, hedge funds and real return investment strategies to increase returns and reduce volatility. LPs plans do not currently invest directly in derivative securities, although such investments may be considered in the future to
increase returns and/or reduce volatility. To the extent the expected return on plan assets varies from the actual return, an actuarial gain or loss results.



75



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The fair value of LPs pension plan assets at December 31, 2010 and
December 31, 2009, fair value asset categories and the level of inputs as defined in Note 3 are as follows:



|                                          |  |                  |       |  |                                                           |   |       |                                      |  |   |                                        |  |  |   |      | 
|----------------------------------------- |  | ---------------- | ----- |  | --------------------------------------------------------- | - | ----- | ------------------------------------ |  | - | -------------------------------------- |  |  | - | ---- | 
|Dollar amounts in millions
Asset Category |  | December 31,2010 |       |  | Quoted Pricesin ActiveMarkets forIdenticalAssets(Level 1) |   |       | SignificantObservableInputs(Level 2) |  |   | SignificantUnobservableInputs(Level 3) | 
|Equity investments(a)                     |  | $                | 138.5 |  |                                                           | $ | 81.1  |                                      |  | $ | 57.4                                   |  |  | $ |     | 
|Fixed income investments(b)               |  |                  | 54.6  |  |                                                           |   | 25.8  |                                      |  |   | 28.8                                   |  |  |   |     | 
|Real estate(c)                            |  |                  | 13.9  |  |                                                           |   |      |                                      |  |   |                                       |  |  |   | 13.9 | 
|Multi-strategy funds(d)                   |  |                  | 45.4  |  |                                                           |   |      |                                      |  |   |                                       |  |  |   | 45.4 | 
|Cash & cash equivalents                   |  |                  | 2.8   |  |                                                           |   |      |                                      |  |   | 2.8                                    |  |  |   |     | 
|                                          |  |                  |       |  |                                                           |   |       |                                      |  |   |                                        |  |  |   |      | 
|Total                                     |  | $                | 255.2 |  |                                                           | $ | 106.9 |                                      |  | $ | 89.0                                   |  |  | $ | 59.3 | 
|                                          |  |                  |       |  |                                                           |   |       |                                      |  |   |                                        |  |  |   |      | 



|                                          |  |                  |       |  |                                                           |   |       |                                      |  |   |                                        |  |  |   |      | 
|----------------------------------------- |  | ---------------- | ----- |  | --------------------------------------------------------- | - | ----- | ------------------------------------ |  | - | -------------------------------------- |  |  | - | ---- | 
|Dollar amounts in millions
Asset Category |  | December 31,2009 |       |  | Quoted Pricesin ActiveMarkets forIdenticalAssets(Level 1) |   |       | SignificantObservableInputs(Level 2) |  |   | SignificantUnobservableInputs(Level 3) | 
|Equity investments(a)                     |  | $                | 125.0 |  |                                                           | $ | 84.9  |                                      |  | $ | 40.1                                   |  |  | $ |     | 
|Fixed income investments(b)               |  |                  | 50.3  |  |                                                           |   | 25.1  |                                      |  |   | 25.2                                   |  |  |   |     | 
|Real estate(c)                            |  |                  | 12.3  |  |                                                           |   |      |                                      |  |   |                                       |  |  |   | 12.3 | 
|Multi-strategy funds(d)                   |  |                  | 42.5  |  |                                                           |   |      |                                      |  |   |                                       |  |  |   | 42.5 | 
|Cash & cash equivalents                   |  |                  | 2.6   |  |                                                           |   |      |                                      |  |   | 2.6                                    |  |  |   |     | 
|                                          |  |                  |       |  |                                                           |   |       |                                      |  |   |                                        |  |  |   |      | 
|Total                                     |  | $                | 232.7 |  |                                                           | $ | 110.0 |                                      |  | $ | 67.9                                   |  |  | $ | 54.8 | 
|                                          |  |                  |       |  |                                                           |   |       |                                      |  |   |                                        |  |  |   |      | 



|(a) | Equity investments include investments in funds that are primarily invested in large capitalization U.S. and international equity securities and a
mutual fund.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | Fixed income investments include investments in funds that are primarily invested in a diversified portfolio of investment grade U.S. and international
debt securities.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | Real estate investments are primarily invested in U.S. commercial real estate.
|--- | ------------------------------------------------------------------------------

|(d) | The multi-strategy funds invest in various hedge funds of fund strategies.
|--- | --------------------------------------------------------------------------

Level 1 investments are valued based on active market quotations.

Level 2 investments are valued based on the unit prices quoted by the funds, representing the fair value of underlying investments.

Due to the lack of observable market quotations on real estate and multi-strategy funds, LP evaluates their structure and
current market estimates of fair value, including fair value estimates from the funds that rely exclusively on Level 3 inputs. These inputs include those that are based on expected cash flow streams and property values, including assessments of
overall market liquidity. The valuations are subject to uncertainties that are difficult to predict.



76



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The following table summarizes assets measured at fair value on a recurring basis using
significant unobservable inputs (Level 3) during the period.



|                                |  |                     |      |   |             |   |      |       |  |   |      |  
|------------------------------- |  | ------------------- | ---- | - | ----------- | - | ---- | ----- |  | - | ---- | -
|Dollar amounts in millions      |  | Multi-StrategyFunds |      |   | Real Estate |   |      | Total | 
|Balance at January 1, 2009      |  | $                   | 36.4 |   |             | $ | 17.8 |       |  | $ | 54.2 |  
|Total unrealized gains (losses) |  |                     | 6.3  |   |             |   | (6.1 | )     |  |   | 0.2  |  
|Net income                      |  |                     |     |   |             |   | 1.0  |       |  |   | 1.0  |  
|Transfers in (out)              |  |                     |     |   |             |   | (0.3 | )     |  |   | (0.3 | )
|Management fees                 |  |                     | (0.2 | ) |             |   | (0.1 | )     |  |   | (0.3 | )
|                                |  |                     |      |   |             |   |      |       |  |   |      |  
|Balance at December 31, 2009    |  | $                   | 42.5 |   |             | $ | 12.3 |       |  | $ | 54.8 |  
|                                |  |                     |      |   |             |   |      |       |  |   |      |  
|Total unrealized gains (losses) |  |                     | 2.9  |   |             |   | 1.6  |       |  |   | 4.5  |  
|Net income                      |  |                     |     |   |             |   | 0.9  |       |  |   | 0.9  |  
|Transfers in (out)              |  |                     |     |   |             |   | (0.7 | )     |  |   | (0.7 | )
|Management fees                 |  |                     |     |   |             |   | (0.2 | )     |  |   | (0.2 | )
|                                |  |                     |      |   |             |   |      |       |  |   |      |  
|Balance at December 31, 2010    |  | $                   | 45.4 |   |             | $ | 13.9 |       |  | $ | 59.3 |  
|                                |  |                     |      |   |             |   |      |       |  |   |      |  

Defined Contribution Plans

LP also sponsors defined contribution plans in the U.S. and Canada. In the U.S., these plans are primarily 401(k) plans for hourly and salaried employees that allow for pre-tax employee deferrals and a
company match of up to 3.5% of an employees eligible wages (subject to certain limits). Effective January 2009, LP discontinued its company match feature for its U.S. plans. Effective January 1, 2010, LP reinstated a match of up to 2% of
an employees eligible wages. Under the profit sharing feature of these plans, LP may elect to contribute a discretionary amount as a percentage of eligible wages. Included in the assets of the 401(k) and profit sharing plans are
3.9million shares of LP common stock that represented approximately 16.1% of the total market value of plan assets at December 31, 2010.

In Canada, LP sponsors both defined contribution plans and Registered Retirement Savings Plans for hourly and salaried employees that allow for pre-tax employee deferrals. LP provides a base contribution
of 2.5% of eligible earnings and matches 50% of an employees deferrals up to a maximum of 3% of each employees eligible earnings (subject to certain limits).

Expenses related to defined contribution plans and the multiemployer plan in 2010, 2009 and 2008 were $4.2 million, $2.2 million and $7.9 million.

Other Benefit Plans

LP
has several plans that provide postretirement benefits other than pensions, primarily for salaried employees in the U.S. and certain groups of Canadian employees. The funded status at December 31, 2010 and 2009 was $8.5 million and
$7.6 million. Net expense related to these plans was not significant in 2010 or 2009.

Effective August 16, 2004, LP
adopted the Louisiana-Pacific Corporation 2004 Executive Deferred Compensation Plan (the Plan). Pursuant to the Plan, certain management employees are eligible to defer up to 90% of their regular salary and annual cash incentives that exceed the
limitation as set forth by the Internal Revenue Service. Each plan participant is fully vested in all employee deferred compensation and earnings credited associated with employee contributions. Employer contributions and associated earnings vest
over periods not exceeding five years. The liability under this plan amounted to $2.1 million at December 31, 2010 and $1.9 million at December 31, 2009 and is included in Other long-term liabilities on LPs Consolidated
Balance Sheets.



77



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|14. | STOCKHOLDERS EQUITY
|--- | --------------------

Preferred
Stock

The Company is authorized to issue up to 15,000,000 shares of preferred stock at $1.00 par value. At
December 31, 2010, no shares of preferred stock have been issued; however, 2,000,000 shares of Series A Junior Participating Preferred Stock have been reserved for issuance in connection with the Companys Shareholder Rights Plan.
Additional series of preferred stock may be designated and the related rights and preferences fixed by action of the Board of Directors.

Shareholder Rights Plan

In May 2008, the Board of Directors approved a shareholder rights plan and declared a dividend of one preferred share purchase right for
each outstanding share of common stock. Each right represents the right to purchase one-hundredth of a share Preferred Stock, at an exercise price of $100.00,subject to adjustment. The rights are only exercisable ten days after a person or
group acquires, or commences a tender or exchange offer to acquire, beneficial ownership of 15% or more of the Companys outstanding common stock.

Subject to the terms of the shareholder rights plan and the discretion of the Board of Directors, each right would entitle the holder to purchase a number of additional shares of common stock of LP having
a total market value of twice the exercise price of each right. The rights expire in June 2018, but can be redeemed by action of the Board of Directors prior to that time at $.01 per right.

Sale of Common Stock

On September 29, 2009, LP completed a public
offering of 20,700,000 shares of common stock, which included the exercise of the overallotment option of 2,700,000 shares, at a price per share of $6.75, raising $139.7 million before offering costs. In connection with the offering, LP paid $7.0
million in underwriting discounts and commissions and approximately $0.4 million in expenses.

Warrants

As part of the unit issuance described in Note 12 above, LP issued warrants to purchase 18,395,963 shares of LP common stock at an
exercise price of $1.39 per share subject to mandatory cashless exercise provisions. During the years ended December 31, 2010 and December 31, 2009, warrant exercises resulted in the issuances of 5,108,412 and 2,089,634 shares. At
December 31, 2010, the remaining outstanding warrants were exercisable to purchase approximately 9,932,348 shares, at an exercise price of $1.39 per share subject to mandatory cashless exercise provisions. The warrant was valued based upon
Black-Scholes option pricing model using expected stock price volatility of 53%; no expected dividends; risk-free interest rate of 2.6%; and an expected life of 8 years which resulted in a fair value per share of $0.72.

Common Stock Plans

At
December 31, 2010, LP had stock-based employee compensation plans as described below. The total compensation expense related to all of LPs stock-based compensation plans was $8.8 million for the year ended December 31, 2010; $7.3
million for the year ended December 31, 2009 and $9.7 million for the year ended December 31, 2008.

LP recognizes
these compensation costs net of an estimated forfeiture rate and recognizes the compensation costs for only those shares expected to vest on a straight-line basis over the requisite service period of the award, which is generally the vesting term of
three years. During 2010, LP changed the service requirement for future awards for its current Chief Executive Officer which allows awards to vest regardless of service period. For these awards, LP is required to expense the entire amount of the
award as of the date of grant. LP estimated the forfeiture rate for 2010, 2009 and 2008 based on its historical experience during the preceding three years.



78



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Stock Compensation Plans

LP grants options and stock settled stock appreciation rights (SSARs) to key employees and directors to purchase LP common stock. On exercise or issuance, LP generally issues these shares from treasury.
The options and SSARs are granted at market price at the date of grant. For employees, options and SSARs become exercisable over three years and expire ten years after the date of grant. For directors, these options become exercisable in 10%
increments every three months, starting three months after the date of grant, and expire ten years after the date of grant. At December 31, 2010, 5,917,225 shares were available under the current stock award plans for stock-based awards. The
following table sets out the weighted average assumptions used to estimate the fair value of the options and SSARs granted using the Black-Scholes option-pricing model:



|                                                         |  |      |      |   |      |   |      |      |  |   |      |  
|-------------------------------------------------------- |  | ---- | ---- | - | ---- | - | ---- | ---- |  | - | ---- | -
|                                                         |  | 2010 |      |   | 2009 |   |      | 2008 | 
|Expected stock price volatility                          |  |      | 59   | % |      |   | 50   | %    |  |   | 30   | %
|Expected dividend yield                                  |  |      |     | % |      |   |     | %    |  |   | 4.0  | %
|Risk-free interest rate                                  |  |      | 2.4  | % |      |   | 1.8  | %    |  |   | 3.0  | %
|Expected life of options (in years)                      |  |      | 5.1  |   |      |   | 5.0  |      |  |   | 5.0  |  
|Weighted average fair value of options and SSARs granted |  | $    | 3.73 |   |      | $ | 1.00 |      |  | $ | 2.85 |  

Expected Stock
Price Volatility:The fair values of stock-based payments were valued using the Black-Scholes valuation method with a volatility factor based on LPs historical stock prices.

Expected Dividend Yield:The Black-Scholes valuation model calls for a single expected dividend yield as an input. This is
determined based upon current annual dividend as of the date of grant compared to the grant price.

Risk-Free Interest
Rate: LP bases the risk-free interest rate used in the Black-Scholes valuation method on U.S. Treasury issues with an equivalent term. Where the expected term of LPs stock-based awards do not correspond with the terms for which
interest rates are quoted, LP performed a straight-line interpolation to determine the rate from the available maturities.

Expected Life of Options:Expected life represents the period that LPs stock-based awards are expected to be outstanding and
was determined based on historical experience of similar awards, giving consideration to the contractual terms of the stock-based awards, vesting schedules and expectations of future employee behavior as influenced by changes to the terms of its
stock-based awards.

Estimated Pre-vesting Forfeitures:When estimating forfeitures, LP considers voluntary termination
behavior as well as workforce reduction programs.



79



---

The following table summarizes stock options and SSARs outstanding as of December 31,
2010 as well as activity during the three year period then ended.



|                                                    |  |               |       |   |                               |   |       |                                           |  |  |                                      |  |  |   |      | 
|--------------------------------------------------- |  | ------------- | ----- | - | ----------------------------- | - | ----- | ----------------------------------------- |  |  | ------------------------------------ |  |  | - | ---- | 
|Share amounts in thousands                          |  | Options/SSARs |       |   | WeightedAverageExercise Price |   |       | WeightedAverageContractualTerm (in years) |  |  | AggregateIntrinsicValue(in millions) | 
|Options outstanding at January 1, 2008              |  |               | 2,993 |   |                               | $ | 22.02 |                                           |  |  |                                      |  |  |   |      | 
|Options granted                                     |  |               | 2,630 |   |                               | $ | 15.20 |                                           |  |  |                                      |  |  |   |      | 
|Options exercised                                   |  |               | (1    | ) |                               | $ | 7.30  |                                           |  |  |                                      |  |  |   |      | 
|Options cancelled                                   |  |               | (185  | ) |                               | $ | 19.78 |                                           |  |  |                                      |  |  |   |      | 
|                                                    |  |               |       |   |                               |   |       |                                           |  |  |                                      |  |  |   |      | 
|Options outstanding at December 31, 2008            |  |               | 5,437 |   |                               | $ | 18.79 |                                           |  |  |                                      |  |  |   |      | 
|Options granted                                     |  |               | 1,912 |   |                               | $ | 2.21  |                                           |  |  |                                      |  |  |   |      | 
|Options exercised                                   |  |               |      |   |                               |   |      |                                           |  |  |                                      |  |  |   |      | 
|Options cancelled                                   |  |               | (738  | ) |                               | $ | 18.82 |                                           |  |  |                                      |  |  |   |      | 
|                                                    |  |               |       |   |                               |   |       |                                           |  |  |                                      |  |  |   |      | 
|Options outstanding at December 31, 2009            |  |               | 6,611 |   |                               | $ | 13.99 |                                           |  |  |                                      |  |  |   |      | 
|Options granted                                     |  |               | 1,160 |   |                               | $ | 7.05  |                                           |  |  |                                      |  |  |   |      | 
|Options exercised                                   |  |               | (83   | ) |                               | $ | 2.17  |                                           |  |  |                                      |  |  |   |      | 
|Options cancelled                                   |  |               | (108  | ) |                               | $ | 11.36 |                                           |  |  |                                      |  |  |   |      | 
|                                                    |  |               |       |   |                               |   |       |                                           |  |  |                                      |  |  |   |      | 
|Options outstanding at December 31, 2010            |  |               | 7,580 |   |                               | $ | 13.10 |                                           |  |  | 6.91                                 |  |  | $ | 16.3 | 
|                                                    |  |               |       |   |                               |   |       |                                           |  |  |                                      |  |  |   |      | 
|Vested and expected to vest at December 31, 2010(1) |  |               | 7,201 |   |                               | $ | 13.10 |                                           |  |  | 6.91                                 |  |  | $ | 15.5 | 
|                                                    |  |               |       |   |                               |   |       |                                           |  |  |                                      |  |  |   |      | 
|Options exercisable at December 31, 2010            |  |               | 4,477 |   |                               | $ | 17.29 |                                           |  |  | 5.98                                 |  |  | $ | 4.5  | 
|                                                    |  |               |       |   |                               |   |       |                                           |  |  |                                      |  |  |   |      | 



|(1) | Options or SSARS expected to vest based upon historical forfeiture rate
|--- | -----------------------------------------------------------------------

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between LPs closing
stock price on the last trading day of 2010 and the exercise price, multiplied by the number of in-the-money options and SSARs) that would have been received by the holders had all holders exercised their awards on December 31, 2010. This
amount changes based on the market value of LPs stock as reported by the New York Stock Exchange.

As of
December 31, 2010, there was $3.1 million of total unrecognized compensation costs related to stock options and SSARs. These costs are expected to be recognized over a weighted-average period of 1.1 years. LP recognized $4.9 million, $5.2
million and $6.0 million in compensation expense associated with these awards for the years ended December 31, 2010, 2009 and 2008.

Incentive Share Awards

LP has granted incentive share stock awards (restricted stock units) to certain key employees as allowed under the current stock award
plans. The awards entitle the participant to receive a specified number of shares of LP common stock at no cost to the participant. Awards granted under this plan vest three years from the date of grant. The market value of these grants approximates
the fair value. LP recorded compensation expense related to these awards in 2010, 2009 and 2008 of $1.9 million, $0.6 million and $1.1 million. As of December 31, 2010, there was $2.0 million of total unrecognized compensation cost related to
unvested incentive share awards. This expense will be recognized over a weighted-average period of 1.3 years.



80



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The following table summarizes incentive share awards outstanding as of December 31,
2010 as well as activity during the three year period then ended.



|                                                        |  |        |         |   |                                           |  |      |                                      |  |   |     | 
|------------------------------------------------------- |  | ------ | ------- | - | ----------------------------------------- |  | ---- | ------------------------------------ |  | - | --- | 
|                                                        |  | Shares |         |   | WeightedAverageContractualTerm (in years) |  |      | AggregateIntrinsicValue(in millions) | 
|Incentive share awards outstanding at January 1, 2008   |  |        | 104,408 |   |                                           |  |      |                                      |  |   |     | 
|Incentive shares awards granted                         |  |        | 126,000 |   |                                           |  |      |                                      |  |   |     | 
|Incentive share awards vested                           |  |        | (28,780 | ) |                                           |  |      |                                      |  |   |     | 
|Incentive share awards cancelled                        |  |        | (7,641  | ) |                                           |  |      |                                      |  |   |     | 
|                                                        |  |        |         |   |                                           |  |      |                                      |  |   |     | 
|Incentive share awards outstanding at December 31, 2008 |  |        | 193,987 |   |                                           |  |      |                                      |  |   |     | 
|Incentive shares awards granted                         |  |        | 459,072 |   |                                           |  |      |                                      |  |   |     | 
|Incentive share awards vested                           |  |        | (56,477 | ) |                                           |  |      |                                      |  |   |     | 
|Incentive share awards cancelled                        |  |        | (26,013 | ) |                                           |  |      |                                      |  |   |     | 
|                                                        |  |        |         |   |                                           |  |      |                                      |  |   |     | 
|Incentive share awards outstanding at December 31, 2009 |  |        | 570,569 |   |                                           |  |      |                                      |  |   |     | 
|Incentive shares awards granted                         |  |        | 400,907 |   |                                           |  |      |                                      |  |   |     | 
|Incentive share awards vested                           |  |        | (4,236  | ) |                                           |  |      |                                      |  |   |     | 
|Incentive share awards cancelled                        |  |        | (11,304 | ) |                                           |  |      |                                      |  |   |     | 
|                                                        |  |        |         |   |                                           |  |      |                                      |  |   |     | 
|Incentive share awards outstanding at December 31, 2010 |  |        | 955,936 |   |                                           |  | 1.39 |                                      |  | $ | 8.4 | 
|                                                        |  |        |         |   |                                           |  |      |                                      |  |   |     | 
|Vested and expected to vest at December 31, 2010(1)     |  |        | 908,139 |   |                                           |  | 1.39 |                                      |  | $ | 8.0 | 
|                                                        |  |        |         |   |                                           |  |      |                                      |  |   |     | 
|Incentive share awards exercisable at December 31, 2010 |  |        |        |   |                                           |  |     |                                      |  |   |     | 
|                                                        |  |        |         |   |                                           |  |      |                                      |  |   |     | 



|(1) | Incentive shares expected to vest based upon historical forfeitures rate
|--- | ------------------------------------------------------------------------

Restricted Stock

LP grants restricted stock to certain senior executive
employees. The shares vest three years from the date of grant. During the vesting period, the participants have voting rights and receive dividends, but the shares may not be sold, assigned, transferred, pledged or otherwise encumbered.
Additionally, granted but unvested shares are forfeited upon termination of employment. The fair value of the restricted shares on the date of the grant is amortized ratably over the vesting period which is generally three years. As of
December 31, 2010, there was $1.9 million of total unrecognized compensation costs related to restricted stock. This expense will be recognized over the next 1.1 years.



81



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The following table summarizes restricted stock awards outstanding as of December 31,
2010 as well as activity during the three year period then ended.



|                                                       |  |                 |          |   |                                      |   |       | 
|------------------------------------------------------ |  | --------------- | -------- | - | ------------------------------------ | - | ----- | 
|                                                       |  | Numberof Shares |          |   | Weighted AverageGrant
DateFair Value |  
|Restricted stock awards outstanding at January 1, 2008 |  |                 | 203,480  |   |                                      | $ | 25.84 | 
|Restricted stock awards granted                        |  |                 | 192,880  |   |                                      |   | 15.27 | 
|Restrictions lapsing                                   |  |                 | (56,500  | ) |                                      |   | 27.04 | 
|Restricted stock awards cancelled                      |  |                 | (3,410   | ) |                                      |   | 22.99 | 
|                                                       |  |                 |          |   |                                      |   |       | 
|Restricted stock awards at December 31, 2008           |  |                 | 336,450  |   |                                      |   | 19.61 | 
|Restricted stock awards granted                        |  |                 | 457,314  |   |                                      |   | 2.40  | 
|Restrictions lapsing                                   |  |                 | (103,073 | ) |                                      |   | 18.62 | 
|Restricted stock awards cancelled                      |  |                 | (25,170  | ) |                                      |   | 17.34 | 
|                                                       |  |                 |          |   |                                      |   |       | 
|Restricted stock awards at December 31, 2009           |  |                 | 665,521  |   |                                      |   | 8.02  | 
|Restricted stock awards granted                        |  |                 | 210,536  |   |                                      |   | 7.00  | 
|Restrictions lapsing                                   |  |                 | (77,320  | ) |                                      |   | 22.99 | 
|Restricted stock awards cancelled                      |  |                 | (15,448  | ) |                                      |   | 5.93  | 
|                                                       |  |                 |          |   |                                      |   |       | 
|Restricted stock awards at December 31, 2010           |  |                 | 783,289  |   |                                      | $ | 6.31  | 
|                                                       |  |                 |          |   |                                      |   |       | 

LP recorded compensation expense related to these awards in 2010, 2009 and 2008 of $1.7 million, $1.5
million, and $2.2 million

LP annually grants to each director restricted stock or restricted stock units. As of
December 31, 2010, LP has 97,404 shares (or restricted stock units) outstanding under this program. Compensation expense recognized in 2010 related to these grants was $0.3 million.



|15. | ASSET RETIREMENT OBLIGATIONS
|--- | ----------------------------

The activity in LPs asset retirement obligation liability for 2010 and 2009 is summarized in the following table. These are included in Other long-term liabilities in the Consolidated
Balance Sheets.



|                                   |      |                         |      |      |  |   |      |  
|---------------------------------- | ---- | ----------------------- | ---- | ---- |  | - | ---- | -
|Dollar amounts in millions         |      | Year ended December 31, |     
|                                   | 2010 |                         |      | 2009 | 
|Beginning balance                  |      | $                       | 6.7  |      |  | $ | 6.0  |  
|Accretion expense                  |      |                         | 0.3  |      |  |   | 0.6  |  
|Accrued to expense during the year |      |                         | 0.2  |      |  |   | 0.3  |  
|Payments made                      |      |                         | (0.4 | )    |  |   | (0.4 | )
|Translation                        |      |                         | 0.2  |      |  |   | 0.2  |  
|                                   |      |                         |      |      |  |   |      |  
|Ending balance                     |      | $                       | 7.0  |      |  | $ | 6.7  |  
|                                   |      |                         |      |      |  |   |      |  



82



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|16. | OTHER OPERATING CREDITS AND CHARGES, NET
|--- | ----------------------------------------

The major components of Other operating credits and charges, net in the Consolidated Statements of Income for the years ended December 31 are reflected in the table below and described in
the paragraphs following the table:



|                                                               |      |                         |      |      |  |   |      |   |  |   |       |  
|-------------------------------------------------------------- | ---- | ----------------------- | ---- | ---- |  | - | ---- | - |  | - | ----- | -
|Dollar amounts in millions                                     |      | Year ended December 31, |     
|                                                               | 2010 |                         |      | 2009 |  |   | 2008 |  
|Additions to litigation reserves                               |      | $                       | (2.2 | )    |  | $ |     |   |  | $ | (48.4 | )
|Gain on settlement of insurance litigation                     |      |                         |     |      |  |   | 8.4  |   |  |   | 0.7   |  
|(Additions) reductions to product related contingency reserves |      |                         | 2.5  |      |  |   | (3.3 | ) |  |   | (32.6 | )
|Additions to environmental related contingency reserves        |      |                         |     |      |  |   | (7.6 | ) |  |   |      |  
|Gain on insurance recoveries                                   |      |                         |     |      |  |   | 2.0  |   |  |   | 5.7   |  
|Loss on facility explosion                                     |      |                         |     |      |  |   |     |   |  |   | (4.8  | )
|Charges associated with corporate right sizing               |      |                         |     |      |  |   | (1.5 | ) |  |   | (10.9 | )
|Other                                                          |      |                         | (0.4 | )    |  |   | 0.4  |   |  |   |      |  
|                                                               |      |                         |      |      |  |   |      |   |  |   |       |  
|                                                               |      | $                       | (0.1 | )    |  | $ | (1.6 | ) |  | $ | (90.3 | )
|                                                               |      |                         |      |      |  |   |      |   |  |   |       |  

2010

During 2010, LP recorded $0.1 million in Other operating credits and charges, net. The components of the net charges include:



| |  |  | a loss of $1.0 million associated with an assessment in connection with one of its indefinitely curtailed OSB mills;
| | - |  | --------------------------------------------------------------------------------------------------------------------



| |  |  | a loss of $2.2 million associated with LPs settlement of an anti-trust litigation matter;
| | - |  | ------------------------------------------------------------------------------------------



| |  |  | a gain of $2.5 million related to a reduction in product related contingency reserves associated with the National hardboard class action settlement
(see Note 20 for further discussion); and
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | a gain of $0.5 million associated with the reduction of certain liabilities associated with the acquisition of Forex.
| | - |  | ---------------------------------------------------------------------------------------------------------------------

2009

During 2009, LP
recorded $1.6 million loss in Other operating credits and charges, net. The components of the net charges include:



| |  |  | a net gain of $8.4 million associated with reimbursements of legal expenses related to an environmental litigation matter;
| | - |  | --------------------------------------------------------------------------------------------------------------------------



| |  |  | a gain of $2.0 gain on an insurance recovery associated with a facility explosion that occurred in the second quarter of 2008;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------



| |  |  | a loss of $7.6 million associated with increases in environmental reserves related to previously operated facilities;
| | - |  | ---------------------------------------------------------------------------------------------------------------------



| |  |  | a loss of $3.3 million from increases in product related contingency reserves associated with the National hardboard class action settlement (see Note
20 for further discussion);
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | a gain of $0.4 million associated with a contractor default on a construction project; and
| | - |  | ------------------------------------------------------------------------------------------



| |  |  | a loss of $1.5 million related to severance charges associated to LPs right sizing initiative as well as a loss on sublease
associated with leasing excess office space due to the right sizing.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



83



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2008

During 2008, LP recorded $90.3 million loss in Other operating credits and charges, net. The components of the net charges include:



| |  |  | a loss of $48.4 million associated with LPs settlement of an anti-trust litigation matter;
| | - |  | -------------------------------------------------------------------------------------------



| |  |  | a gain of $0.7 million in connection with a favorable judgment on a lawsuit associated with LPs insurance on hardboard siding;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------



| |  |  | a net loss of $32.6 million from increases in product related contingency reserves associated with the National hardboard class action settlement (see
Note 20 for further discussion);
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | a gain of $5.7 million related to insurance settlement associated with a product related suit;
| | - |  | ----------------------------------------------------------------------------------------------



| |  |  | a loss of $4.8 million associated with a facility explosion and related costs; and
| | - |  | ----------------------------------------------------------------------------------



| |  |  | a loss of $10.9 million related to severance charges associated to LPs right sizing initiative as well as severance related to
indefinite facility curtailments due to market conditions.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Severance

Over the course of the last three years, LP has entered into several restructuring plans in an effort to sell selected businesses and
reduce overall expenses. The detail of the severance accrual and related expense and payments for the last three years is as follows:



|                                          |      |                         |      |      |  |   |      |   |  |   |      |  
|----------------------------------------- | ---- | ----------------------- | ---- | ---- |  | - | ---- | - |  | - | ---- | -
|Dollar amounts in millions                |      | Year ended December 31, |     
|                                          | 2010 |                         |      | 2009 |  |   | 2008 |  
|Beginning balance                         |      | $                       | 2.1  |      |  | $ | 8.8  |   |  | $ | 1.6  |  
|Charged to expense, continuing operations |      |                         | 0.5  |      |  |   | 2.6  |   |  |   | 13.9 |  
|Payments                                  |      |                         | (2.0 | )    |  |   | (9.3 | ) |  |   | (6.7 | )
|                                          |      |                         |      |      |  |   |      |   |  |   |      |  
|Ending balance                            |      | $                       | 0.6  |      |  | $ | 2.1  |   |  | $ | 8.8  |  
|                                          |      |                         |      |      |  |   |      |   |  |   |      |  

The balance of the accrued severance is included in Accounts payable and accrued liabilities on
the Consolidated Balance Sheets. The balance as of December 31, 2010 is payable under contract through 2011. Severance expense is across all businesses.



|17. | GAIN (LOSS) ON SALE OF AND IMPAIRMENT OF LONG-LIVED ASSETS, NET
|--- | ---------------------------------------------------------------

The major components of Gain (loss) on sale of and impairment of long-lived assets, net in the Consolidated Statements of Income for the years ended December 31 are reflected in the table
below and are described in the paragraphs following the table:



|                                               |      |                         |      |      |  |   |      |  |  |   |       |  
|---------------------------------------------- | ---- | ----------------------- | ---- | ---- |  | - | ---- |  |  | - | ----- | -
|Dollar amounts in millions                     |      | Year ended December 31, |     
|                                               | 2010 |                         |      | 2009 |  |   | 2008 | 
|Impairment charges on long-lived assets        |      | $                       | (2.4 | )    |  | $ |     |  |  | $ | (14.0 | )
|Gain (loss) on sale of other long-lived assets |      |                         |     |      |  |   | 2.5  |  |  |   | 5.0   |  
|                                               |      |                         |      |      |  |   |      |  |  |   |       |  
|                                               |      | $                       | (2.4 | )    |  | $ | 2.5  |  |  | $ | (9.0  | )
|                                               |      |                         |      |      |  |   |      |  |  |   |       |  

2010

During 2010, LP recorded a loss on sale of and impairment of long-lived assets of $2.4 million. This net loss includes the following items:



| |  |  | a loss of $0.9 million associated with the valuation of certain road systems in Canada; and
| | - |  | -------------------------------------------------------------------------------------------



| |  |  | a loss of $1.5 million associated with assets held and used or held for sale.
| | - |  | -----------------------------------------------------------------------------



84



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2009

During 2009, LP recorded a net gain on sale of and impairment of long-lived assets of $2.5 million. This net gain includes the following items:



| |  |  | a gain of $1.0 million associated with the sale of certain corporate assets as part of LPs right sizing initiative; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------



| |  |  | a gain of $1.5 million associated with the sale of various timberlands
| | - |  | ----------------------------------------------------------------------

2008

During 2008, LP recorded a net loss on sale of and impairment of
long-lived assets of $9.0 million. This net loss includes the following items:



| |  |  | an impairment charge of $14.0 million associated with a non-operating manufacturing complex in Quebec, Canada to reduce the carrying value of this
equipment to its estimated sales price, net of related selling expenses; and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | a gain of $5.0 million associated with the sale of certain corporate assets as part of LPs right sizing.
| | - |  | -----------------------------------------------------------------------------------------------------------



|18. | CONTINGENCIES
|--- | -------------

LP
maintains reserves for various contingent liabilities as follows:



|                           |  |              |      |   |      |   |       |  
|-------------------------- |  | ------------ | ---- | - | ---- | - | ----- | -
|                           |  | December 31, |     
|Dollar amounts in millions |  | 2010         |      |   | 2009 |  
|Environmental reserves     |  | $            | 14.3 |   |      | $ | 14.7  |  
|Hardboard siding reserves  |  |              | 17.8 |   |      |   | 24.2  |  
|Other                      |  |              | 0.8  |   |      |   | 1.9   |  
|                           |  |              |      |   |      |   |       |  
|Total contingencies        |  |              | 32.9 |   |      |   | 40.8  |  
|Current portion            |  |              | (7.0 | ) |      |   | (10.0 | )
|                           |  |              |      |   |      |   |       |  
|Long-term portion          |  | $            | 25.9 |   |      | $ | 30.8  |  
|                           |  |              |      |   |      |   |       |  

LPs estimates of its loss contingencies are based on various assumptions and judgments. Due to the
numerous uncertainties and variables associated with these assumptions and judgments, 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 contingencies and, as additional information becomes known, may change its estimates significantly. While no estimate of the range of any such change can be made at this time, the amount that LP may ultimately pay in connection
with these matters could materially exceed, in either the near term or the longer term, the amounts accrued to date. LPs estimates of its loss contingencies do not reflect potential future recoveries from insurance carriers except to the
extent that recovery may from time to time be deemed probable as a result of an insurers agreement to payment terms.

Environmental
Proceedings

LP is involved in a number of environmental proceedings and activities, and may be wholly or partially
responsible for known or unknown contamination existing at a number of other sites at which it has conducted operations or disposed of wastes. Based on the information currently available, management believes that any fines, penalties or other costs
or losses resulting from these matters will not have a material adverse effect on the financial position, results of operations, cash flows or liquidity of LP.

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



85



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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.

In those instances in which LPs estimated exposure reflects actual or anticipated cost-sharing arrangements with third parties, LP
does not believe that it will be exposed to additional material liability as a result of non-performance by such third parties. There are three forms of cost-sharing arrangements under which costs are apportioned to others and are therefore not
reflected in LPs environmental reserves. The amounts involved, the number of sites and a description of each are as follows:



| |  |  | Approximately $1.2 million of costs, relating to three sites, pursuant to formal cost-sharing arrangements between LP and one or more third parties.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Approximately $2.4 million of costs, related to four transactions each covering multiple sites, pursuant to agreements contained in purchase and sale
documents where LP has sold an asset to a third party and that third party has assumed responsibility for all or a portion of any remediation costs required for the sold asset.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Approximately $0.2 million of costs, related to one site undergoing cleanup pursuant to federal or state environmental laws, where multiple parties are
involved.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------

LP considers the financial condition of third parties subject to the cost-sharing arrangements
discussed above in determining the amounts to be reflected in LPs environmental reserves. In addition, LP is a party to clean-up activities at two additional sites for which LP does not believe that the failure of a third party to discharge
its allocated responsibility would significantly increase LPs financial responsibility based on the manner in which financial responsibility has been, or is expected to be, allocated.

LPs estimates of its environmental loss contingencies do not reflect potential future recoveries from insurance carriers except to
the extent that recovery may from time to time be deemed probable as a result of a carriers agreement to payment terms.

The activity in LPs reserve for estimated environmental loss contingency reserves for the last three years is summarized in the
following table.



|                                             |  |                         |      |   |      |   |      |      |  |   |      |  
|-------------------------------------------- |  | ----------------------- | ---- | - | ---- | - | ---- | ---- |  | - | ---- | -
|                                             |  | Year ended December 31, |     
|Dollar amounts in millions                   |  | 2010                    |      |   | 2009 |   |      | 2008 | 
|Beginning balance                            |  | $                       | 14.7 |   |      | $ | 6.5  |      |  | $ | 9.4  |  
|Adjusted to expense (income) during the year |  |                         | 0.3  |   |      |   | 8.7  |      |  |   | (0.2 | )
|Payments made                                |  |                         | (0.7 | ) |      |   | (0.5 | )    |  |   | (2.7 | )
|                                             |  |                         |      |   |      |   |      |      |  |   |      |  
|Ending balance                               |  | $                       | 14.3 |   |      | $ | 14.7 |      |  | $ | 6.5  |  
|                                             |  |                         |      |   |      |   |      |      |  |   |      |  

During 2010, 2009 and 2008, LP adjusted its reserves at a number of sites to reflect current estimates of
remediation costs.



86



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ABT Hardboard Siding Matters

Between 1995 and 1999, ABT Building Products Corporation (ABT), ABTco, Inc., a wholly owned subsidiary of ABT (ABTco and, together with ABT, the ABT
Entities), Abitibi-Price Corporation (Abitibi), a predecessor of ABT, and certain affiliates of Abitibi (the Abitibi Affiliates and, together with Abitibi, the Abitibi Entities) were named as defendants in
numerous class action and non-class action proceedings brought on behalf of various persons or purported classes of persons (including nationwide classes in the United States and Canada) who own or have purchased or installed hardboard siding
manufactured or sold by the defendants. In general, the plaintiffs in these actions have claimed unfair business practices, breach of warranty, fraud, misrepresentation, negligence, and other theories related to alleged defects, deterioration, or
other failure of such hardboard siding, and seek unspecified compensatory, punitive, and other damages (including consequential damage to the structures on which the siding was installed), attorneys fees and other relief.

LP acquired ABT in February 1999 and ABT was merged into LP in January of 2001. On September 21, 2000, the Circuit Court of Choctaw
County, Alabama, under the caption Foster, et al. v. ABTco, Inc., ABT Building Products Corporation, Abitibi-Price, Inc. and Abitibi-Price Corporation (No. CV95-151-M), approved a settlement agreement among the defendants and
attorneys representing a nationwide class composed of all persons who own or formerly owned homes or, subject to limited exceptions, other buildings or structures on which hardboard siding manufactured by the defendants was installed between
May 15, 1975 and May 15, 2000. Except for approximately 30 persons who timely opted out, the settlement includes and binds all members of the settlement class and resolves all claims asserted in the various proceedings described above.
Under the settlement agreement, class members will have twenty-five years after their siding was installed to file a claim.

Under the settlement agreement, the defendants will be entitled to elect to make an offer of settlement to an eligible claimant based on the information set forth in the claim submitted by such claimant,
and such claimant will be entitled to accept or reject the offer. If an eligible claimant declines the offer, or if no offer is made, such claimant will be entitled to a payment based on an independent inspection. Such payments will be based on a
specified dollar amount (calculated on the basis of statewide averages and ranging from $2.65 to $6.21, depending upon the state) per square foot of covered siding that has experienced specified types of damage, subject to reduction based on the age
of the damaged siding and any failure to paint the damaged siding within stated intervals (except in the case of damaged siding installed on mobile homes, as to which a uniform 50% reduction will apply in all circumstances). If applicable, payments
under the settlement will also be subject to reduction to reflect any warranty payments or certain other payments previously recovered by a claimant on account of the damaged siding. Under the settlement agreement, LP (as a successor to ABT) will be
required to pay the expenses of administering the settlement and certain other costs.

ABT and Abitibi were parties to an
agreement of an allocation of liability with respect to claims related to siding sold prior to October 22, 1992. On June 13, 2001, in exchange for a cash payment from Abitibi of approximately $19 million which was received in July 2001,
LPC, a wholly owned subsidiary of LP, agreed to accept a transfer of all of Abitibis rights and obligations under the settlement agreement and the allocation agreement; and LP and LPC agreed to indemnify and hold harmless Abitibi from any cost
or liability arising from its sale of hardboard siding in the United States. From the date of the agreement, Abitibi has no further rights, obligations or liabilities under either the class action settlement agreement or the allocation agreement.
All such rights, obligations and liabilities have been assigned to and accepted and assumed by LPC.

During 2008 and 2009, LP
increased its reserves in connection with this class action settlement. The additional reserves reflect revised estimates of undiscounted future claim payments and related administrative costs. During 2010, LP decreased its reserves in connection
with this settlement due to reductions in claims activity. LP believes that the reserve balance at December 31, 2010 will be adequate to cover future payments to claimants and related administrative costs. However, it is possible that
additional charges may be required in the future.



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The activity in the portion of LPs loss contingency reserves relating to hardboard
siding contingencies for the last three years is summarized in the following table. Included in this table for 2010 and 2009 are reimbursements received by LP from an insurance company for a portion of the claims payments and administrative costs
covered under a court judgment related to production and sales of the specific products for specific years.



|                                       |  |                         |      |   |      |   |       |      |  |   |       |  
|-------------------------------------- |  | ----------------------- | ---- | - | ---- | - | ----- | ---- |  | - | ----- | -
|                                       |  | Year ended December 31, |     
|Dollar amounts in millions             |  | 2010                    |      |   | 2009 |   |       | 2008 | 
|Beginning balance                      |  | $                       | 24.2 |   |      | $ | 31.2  |      |  | $ | 12.8  |  
|Accrued (reversed) to expense          |  |                         | (2.5 | ) |      |   | 3.3   |      |  |   | 32.6  |  
|Claims reimbursement                   |  |                         | 1.0  |   |      |   | 4.0   |      |  |   |      |  
|Payments made for claims               |  |                         | (3.6 | ) |      |   | (10.6 | )    |  |   | (11.2 | )
|Payments made for administrative costs |  |                         | (1.3 | ) |      |   | (3.7  | )    |  |   | (3.0  | )
|                                       |  |                         |      |   |      |   |       |      |  |   |       |  
|Ending balance                         |  | $                       | 17.8 |   |      | $ | 24.2  |      |  | $ | 31.2  |  
|                                       |  |                         |      |   |      |   |       |      |  |   |       |  

Antitrust Litigation

LP was named as one of a number of defendants in multiple class action complaints filed on or after February 26, 2006 in the United States District Court for the Eastern District of Pennsylvania.
These complaints were dismissed or consolidated into two complaints under one caption: In Re OSB Anti-Trust Litigation, Master File No. 06-CV-00826 (PD). The first complaint is a consolidated amended class action complaint filed on
March 31, 2006 on behalf of plaintiffs who directly purchased OSB from the defendants from May 1, 2002 through the date the complaint was filed (the direct purchaser complaint). The second complaint is a consolidated amended class action
complaint, filed on June 15, 2006, on behalf of plaintiffs who indirectly purchased OSB from the defendants from May 1, 2002 through the date the complaint was filed (the indirect purchaser complaint). The plaintiffs in both amended and
consolidated complaints described above moved for and received class certification and sought damages alleged to have resulted from a conspiracy among the defendants to fix, raise, maintain and stabilize the prices at which OSB is sold in the United
States, in violation of Section 1 of the Sherman Act, 15 U.S.C. §1 and similar remedies under individual state anti-trust, competition and consumer protection laws. LP believed that the claims asserted were without merit, but after being
ordered to settlement conference by the judge, LP decided that in order to limit the risks and costs associated with a prolonged trial schedule; it would settle the direct and indirect lawsuits. These settlements were accrued and paid in 2008.

As part of the class action process, individual purchasers are able to opt-out of the class action claims and pursue their
own suit. On December 1, 2008, LP was named as one of a number of defendants in Bailey Lumber & Supply and 84 Lumber Company v. Georgia-Pacific Corporation et. al. (Civil Action No. 1:08cv1394) filed in the United States District
Court for the Southern District of Mississippi Southern Division. The plaintiffs, who opted out of a class action settlement of substantially identical claims that was implemented in 2008, seek treble damages alleged to have resulted from a
conspiracy among the defendants to fix, raise, maintain and stabilize the prices at which OSB and Plywood are sold in the United States during the period of 2002 into 2006, in violation of Section 1 of the Sherman Act, 15 U.S.C. §1,
together with costs and attorneys fees. LP believes that the claims asserted were without merit. However, LP decided that in order to limit the risks and costs associated with a prolonged trial schedule, it would settle this lawsuit. LP
accrued and paid the settlements in 2010.

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.



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|19. | REDEEMABLE NON-CONTROLLING INTEREST
|--- | -----------------------------------

In May 2008, LP completed the initial phase of its purchase of a 75% ownership interest in Masisa OSB Industria e Comercio S.A., which operates OSB assets located in Ponta Grossa, Brazil. The purchase was
made through LP Brasil Participacoes Ltda., a former limited liability company and indirect subsidiary of LP. The non controlling ownership is subject to a put and call option that becomes exercisable in 2011, is being accounted for as a redeemable
non controlling interest and is accreted over the life of the put and call to the estimated price which is the greater of $18.5 million plus interest plus the greater of $2.0 million or 25% of related working capital or a multiple of earnings before
interest and taxes (subject to certain adjustments). The purchase price in 2008 was approximately $56.5 million (including expenses). LP took over operations in November 2008.



|20. | COMMITMENTS AND CONTINGENT LIABILITIES
|--- | --------------------------------------

LP is obligated to purchase timber under certain cutting contracts that extend to 2011. LPs best estimate of its commitment at current contract rates under these contracts at December 31, 2010
is approximately $1.0 million for approximately 10.6 million board feet of timber.

LP is primarily self-insured for
workers compensation and employee health care liability costs. Self-insurance liabilities for workers compensation are determined based upon a valuation performed by an actuarial firm. The estimate of future workers compensation
liabilities incorporates loss development and an estimate associated with incurred but not yet reported claims. These claims are discounted. Self-insurance liabilities for employee health costs are determined actuarially based upon claims filed and
estimated claims incurred but not yet reported. These claims are not discounted.

The Company and its subsidiaries lease
certain office, manufacturing, warehousing and other plant sites and equipment. The leases generally provide for the lessee to pay taxes, maintenance, insurance and certain other operating costs of the leased properties.

At December 31, 2010, future minimum annual rent commitments are as follows:



|                           |  |   |      | 
|-------------------------- |  | - | ---- | 
|Dollar amounts in millions |  |   |     
|Year ended December 31,    |  |   |     
|2011                       |  | $ | 6.8  | 
|2012                       |  |   | 3.6  | 
|2013                       |  |   | 3.3  | 
|2014                       |  |   | 3.3  | 
|2015                       |  |   | 3.4  | 
|2016 and after             |  |   | 0.8  | 
|                           |  |   |      | 
|Total                      |  | $ | 21.2 | 
|                           |  |   |      | 

As of December 31, 2010, LP has entered into several non-cancelable subleases for a portion of its
former corporate headquarters in Portland, Oregon as well as its current Nashville, Tennessee corporate headquarters. Minimum annual rent commitments have not been reduced by minimum sublease rentals of $2.9 million (in total for all years) due in
the future. Rental expense for operating leases amounted to $9.6 million, $9.5 million and $11.3 million in 2010, 2009 and 2008.



|21. | GUARANTEES AND INDEMNIFICATIONS
|--- | -------------------------------

LP is a party to contracts in which LP agrees to indemnify third parties for certain liabilities that arise out of or relate to the subject matter of the contract. In some cases, this indemnity extends to
related liabilities arising out of the negligence of the indemnified parties, but usually excludes any liabilities caused by gross negligence or willful misconduct of the indemnified parties. LP cannot estimate the potential amount of future
payments under these agreements until events arise that would trigger the liability.



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Additionally, in connection with certain sales of assets and divestures of businesses, LP
has agreed to indemnify the buyer and related parties for certain losses or liabilities incurred by the buyer or such related parties with respect to (1) the representations and warranties made to the buyer by LP in connection with the sales
and (2) liabilities related to the pre-closing operations of the assets sold. Indemnities related to pre-closing operations generally include environmental liabilities, tax liabilities and other liabilities not assumed by the buyer.

Indemnities related to the pre-closing operations of sold assets normally do not represent added liabilities for LP, but simply serve to
protect the buyer from potential liability associated with the obligations that existed (known and unknown) at the time of the sale. LP records accruals for those pre-closing obligations that are considered probable and estimable. LP is required to
record a liability for the fair value of the guarantees that are entered into subsequent to December 31, 2002. LP has not accrued any additional amounts as a result of the indemnity agreements summarized below as LP believes the fair value of
the guarantees entered into after December 31, 2002 is not material.



| |  |  | In connection with various sales of LPs timberlands, LP has agreed to indemnify various buyers with respect to losses resulting from breaches of
limited representations and warranties contained in these agreements. These indemnities generally are capped at a maximum potential liability and have an unspecified duration.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In connection with the sale of LPs two inter-related interior hardboard facilities to Decorative Panels International Inc. in 2004, LP provided a
10-year indemnity for unknown environmental claims, capped at $4 million with a $0.3 million deductible. This indemnity will expire in May 2014.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In connection with the sale by LP Canada Pulp Ltd (LPCP) of its pulp mill in Chetwynd, BC, Canada to Tembec, Ltd in October 2002, LP provided an
indemnity of unspecified duration provided by LPCP for liabilities arising out of pre-closing operations. These indemnities, which do not extend to environmental liabilities, are capped at C$15 million in the aggregate.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

LP also has various other indemnities that are individually and in the aggregate immaterial.

LP will record a liability related to specific indemnification when future payment is probable and the amount is estimable.

Additionally, LP offers 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 last three years is summarized in the following table.



|                                   |  |                         |       |   |      |   |       |      |  |   |       |  
|---------------------------------- |  | ----------------------- | ----- | - | ---- | - | ----- | ---- |  | - | ----- | -
|                                   |  | Year ended December 31, |      
|Dollar amounts in millions         |  | 2010                    |       |   | 2009 |   |       | 2008 | 
|Beginning balance                  |  | $                       | 32.9  |   |      | $ | 33.7  |      |  | $ | 26.2  |  
|Accrued to expense during the year |  |                         | 11.2  |   |      |   | 9.5   |      |  |   | 18.7  |  
|Payments made                      |  |                         | (14.6 | ) |      |   | (10.3 | )    |  |   | (11.2 | )
|                                   |  |                         |       |   |      |   |       |      |  |   |       |  
|Total warranty reserves            |  |                         | 29.5  |   |      |   | 32.9  |      |  |   | 33.7  |  
|Current portion                    |  |                         | (10.0 | ) |      |   | (7.0  | )    |  |   | (7.0  | )
|                                   |  |                         |       |   |      |   |       |      |  |   |       |  
|Long term portion                  |  | $                       | 19.5  |   |      | $ | 25.9  |      |  | $ | 26.7  |  
|                                   |  |                         |       |   |      |   |       |      |  |   |       |  

The current portion of the warranty reserve is included in Accounts payable and accrued
liabilities and the long-term portion is included in Other long-term liabilities on the Consolidated Balance Sheets.

During 2010, LP increased the warranty reserves related to discontinued composite decking products by $5.2 million following an increase of $2.3 million in 2009. The additional reserves reflect revised
estimates of future claim payments based upon an increase in decking warranty claims related to a specific operation and



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specific time period. During the fourth quarter of 2008, LP established a voluntary recall of the affected decking. During the second quarter of 2009, LP established a formal recall program under
the Consumer Products Safety Board requirements for these products. No additional reserve increase was required in connection with the establishment of the formal program. LP continues to monitor warranty and other claims associated with these
products and with the recall program (see Note 19ContingenciesOther Proceedings) and believe as of December 31, 2010 that the reserves associated with these matters are adequate.

Additionally in 2009 and 2010, LP increased the warranty reserve related to its discontinued vinyl siding products based upon an increase
in warranty claims. The additional reserves reflect revised estimates of future claims.

LP believes that the warranty reserve
balance at December 31, 2010 is adequate to cover future warranty payments. However, it is possible that additional charges may be required.



|22. | DISCONTINUED OPERATIONS
|--- | -----------------------

Over the last several years, LP has adopted and implemented plans to sell selected businesses and assets in order to improve its operating
results. For all periods presented, these operations include residual losses of mills divested in past years and associated warranty and other liabilities associated with these operations.

Included in the operating losses of discontinued operations for the year ended December 31, 2010 is an increase in warranty reserves
of $7.1 million associated with products previously discontinued based upon significant increases in recent warranty claim activity.

Included in the operating losses of discontinued operations for the year ended December 31, 2009 is an increase in warranty reserves of $4.9 million associated with products previously discontinued
based upon significant increases in recent warranty claim activity.

Included in the operating losses of discontinued
operations for the year ended December 31, 2008 is an increase in our decking warranty reserves of $17.2 million based upon significant increases in recent warranty claim activity.



|23. | ACCUMULATED COMPREHENSIVE LOSS
|--- | ------------------------------

Accumulated comprehensive loss consists of cumulative translation adjustments, unrealized gains (losses) on certain derivative instruments and pension and post retirement adjustments. The table below
breaks down these balances, net of tax:



|                             |  |                                       |       |   |                    |   |       |                                              |  |   |       |   |  |       |       |   |  |   |       |  
|---------------------------- |  | ------------------------------------- | ----- | - | ------------------ | - | ----- | -------------------------------------------- |  | - | ----- | - |  | ----- | ----- | - |  | - | ----- | -
|Dollar amounts in millions   |  | Foreigncurrencytranslationadjustments |       |   | Pensionadjustments |   |       | Unrealizedgain (loss)onderivativeinstruments |  |   | Other |   |  | Total |      
|Balance at December 31, 2007 |  | $                                     | (17.6 | ) |                    | $ | (25.7 | )                                            |  | $ | 0.5   |   |  | $     | (21.7 | ) |  | $ | (64.5 | )
|Activity                     |  |                                       | (13.3 | ) |                    |   | (37.6 | )                                            |  |   | (1.8  | ) |  |       | 19.1  |   |  |   | (33.6 | )
|                             |  |                                       |       |   |                    |   |       |                                              |  |   |       |   |  |       |       |   |  |   |       |  
|Balance at December 31, 2008 |  |                                       | (30.9 | ) |                    |   | (63.3 | )                                            |  |   | (1.3  | ) |  |       | (2.6  | ) |  |   | (98.1 | )
|Activity                     |  |                                       | 22.8  |   |                    |   | (2.3  | )                                            |  |   | 1.2   |   |  |       | 11.8  |   |  |   | 33.5  |  
|                             |  |                                       |       |   |                    |   |       |                                              |  |   |       |   |  |       |       |   |  |   |       |  
|Balance at December 31, 2009 |  |                                       | (8.1  | ) |                    |   | (65.6 | )                                            |  |   | (0.1  | ) |  |       | 9.2   |   |  |   | (64.6 | )
|Activity                     |  |                                       | 7.7   |   |                    |   | (7.6  | )                                            |  |   | (0.2  | ) |  |       | (4.9  | ) |  |   | (5.0  | )
|                             |  |                                       |       |   |                    |   |       |                                              |  |   |       |   |  |       |       |   |  |   |       |  
|Balance at December 31, 2010 |  | $                                     | (0.4  | ) |                    | $ | (73.2 | )                                            |  | $ | (0.3  | ) |  | $     | 4.3   |   |  | $ | (69.6 | )
|                             |  |                                       |       |   |                    |   |       |                                              |  |   |       |   |  |       |       |   |  |   |       |  

Foreign currency translation adjustments exclude income tax expense (benefit) given that these adjustments
arise out of the translation of assets into the reporting currency that is separate from the taxable income and is



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deemed to be reinvested for an indefinite period of time. The pension adjustments included income tax benefit of $3.0 million, $0.9 million and $24.5 million in 2010, 2009 and 2008. The
unrealized gain (loss) on derivatives included income tax benefit of $1.1 million in 2008. Included in Other in 2010 and 2009 was the reversal of the unrealized loss on auction rate securities recorded in 2007.



|24. | IMMATERIAL RESTATEMENT
|--- | ----------------------

During 2010, LP identified an error in the calculation of the Equity in income (losses) of affiliates relating to the foreign currency
translation of income and losses of LPs foreign joint ventures. This error was related to foreign currency rates applied to depreciation expense which is included as a component of Equity in income and losses of unconsolidated
affiliates. As Equity in income (losses) of unconsolidated affiliates is a non-cash item, this error did not impact net cash provided by (used in) operations in any period. This error resulted in the understatement of Equity
in (income) losses in unconsolidated affiliates in the amount of $0.6 million and $1.4 million for the years ended December 31, 2009 and December 31, 2008 and $2.8 million in previous years with an accumulated understatement of
the Investment in and advances to affiliates in the amounts of $4.8 million and $4.2 million as of December 31, 2009 and December 31, 2008. Since this adjustment is related to the foreign currency process, there is no impact on
LPs tax provision or related tax accounts.

LP believes the correction of the error is not material to its previously
issued historical financial statements. However, LP made the decision to correct the error though an immaterial restatement of the previously issued financial statements. The effects of this restatement on the audited Consolidated Balance sheet as
previously presented in LPs Form 10-K as of December 31, 2009 is as follows:



|                                           |  |             |         |  |            |   |     |             |  |   |         | 
|------------------------------------------ |  | ----------- | ------- |  | ---------- | - | --- | ----------- |  | - | ------- | 
|                                           |  | 2009        |        
|Dollar amounts in millions                 |  | As Reported |         |  | Adjustment |   |     | As Adjusted | 
|Investments in and advances to affiliates  |  | $           | 133.7   |  |            | $ | 4.8 |             |  | $ | 138.5   | 
|                                           |  |             |         |  |            |   |     |             |  |   |         | 
|Total assets                               |  | $           | 2,615.5 |  |            | $ | 4.8 |             |  | $ | 2,620.3 | 
|                                           |  |             |         |  |            |   |     |             |  |   |         | 
|Retained earnings                          |  | $           | 897.3   |  |            | $ | 4.8 |             |  | $ | 902.1   | 
|                                           |  |             |         |  |            |   |     |             |  |   |         | 
|Total stockholders equity                 |  | $           | 1,248.7 |  |            | $ | 4.8 |             |  | $ | 1,253.5 | 
|                                           |  |             |         |  |            |   |     |             |  |   |         | 
|Total liabilities and stockholders equity |  | $           | 2,615.5 |  |            | $ | 4.8 |             |  | $ | 2,620.3 | 
|                                           |  |             |         |  |            |   |     |             |  |   |         | 



|25. | SEGMENT INFORMATION
|--- | -------------------

LP
operates in three segments: Oriented Strand Board (OSB); Siding; and Engineered Wood Products (EWP). LPs business units have been aggregated into these three 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. LP evaluates the performance of its business segments based upon operating profits excluding other operating credits and charges, net, gain (loss) on sales
of and impairments of long-lived assets, general corporate and other expenses, translation gains and losses, interest and income taxes.

The OSB segment includes OSB products produced in North America. The siding segment includes Smart Side® siding products; Canexel siding products; and other related products. The engineered wood products segment includes laminated veneer lumber and laminated strand
lumber; I-joists; plywood; and other related products.



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Information about LPs product segments is as follows:



|                                                                    |  |                         |         |   |      |   |         |      |  |   |         |  
|------------------------------------------------------------------- |  | ----------------------- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | -
|                                                                    |  | Year ended December 31, |        
|Dollar amounts in millions                                          |  | 2010                    |         |   | 2009 |   |         | 2008 | 
|SALES BY BUSINESS SEGMENT                                           |  |                         |         |   |      |   |         |      |  |   |         |  
|OSB                                                                 |  | $                       | 602.7   |   |      | $ | 408.8   |      |  | $ | 623.2   |  
|Siding                                                              |  |                         | 427.8   |   |      |   | 379.4   |      |  |   | 428.6   |  
|Engineered Wood Products                                            |  |                         | 192.0   |   |      |   | 157.7   |      |  |   | 234.5   |  
|Other products                                                      |  |                         | 167.6   |   |      |   | 117.0   |      |  |   | 96.4    |  
|Intersegment Sales                                                  |  |                         | (6.5    | ) |      |   | (1.9    | )    |  |   | (3.5    | )
|                                                                    |  |                         |         |   |      |   |         |      |  |   |         |  
|Total sales                                                         |  | $                       | 1,383.6 |   |      | $ | 1,061.0 |      |  | $ | 1,379.2 |  
|                                                                    |  |                         |         |   |      |   |         |      |  |   |         |  
|PROFIT (LOSS) BY BUSINESS SEGMENT                                   |  |                         |         |   |      |   |         |      |  |   |         |  
|OSB                                                                 |  | $                       | 25.8    |   |      | $ | (65.1   | )    |  | $ | (154.0  | )
|Siding                                                              |  |                         | 51.3    |   |      |   | 29.3    |      |  |   | 2.8     |  
|Engineered Wood Products                                            |  |                         | (21.3   | ) |      |   | (33.1   | )    |  |   | (40.0   | )
|Other products                                                      |  |                         | 6.1     |   |      |   | 0.8     |      |  |   | (6.9    | )
|Other operating credits and charges, net and impairment of goodwill |  |                         | (0.1    | ) |      |   | (1.6    | )    |  |   | (363.8  | )
|Gain (loss) on sales of and impairments of long-lived assets        |  |                         | (2.4    | ) |      |   | 2.5     |      |  |   | (9.0    | )
|General corporate and other expense, net                            |  |                         | (73.4   | ) |      |   | (76.5   | )    |  |   | (85.3   | )
|Foreign currency exchange gains (losses)                            |  |                         | 2.2     |   |      |   | 13.4    |      |  |   | 19.6    |  
|Investment income                                                   |  |                         | 19.4    |   |      |   | 29.0    |      |  |   | 51.8    |  
|Gain on early debt extinguishment                                   |  |                         |        |   |      |   | (20.7   | )    |  |   |        |  
|Realized gain on long term investment                               |  |                         | 19.0    |   |      |   | 18.7    |      |  |   |        |  
|Interest expense, net of capitalized interest                       |  |                         | (63.9   | ) |      |   | (74.6   | )    |  |   | (61.2   | )
|Other-than-temporary impairment of investments                      |  |                         | (17.0   | ) |      |   | (2.0    | )    |  |   | (118.6  | )
|                                                                    |  |                         |         |   |      |   |         |      |  |   |         |  
|Income (loss) from continuing operations before taxes               |  |                         | (54.3   | ) |      |   | (179.9  | )    |  |   | (764.6  | )
|Provision (benefit) for income taxes                                |  |                         | (22.1   | ) |      |   | (63.4   | )    |  |   | (201.5  | )
|                                                                    |  |                         |         |   |      |   |         |      |  |   |         |  
|Income (loss) from continuing operations                            |  | $                       | (32.2   | ) |      | $ | (116.5  | )    |  | $ | (563.1  | )
|                                                                    |  |                         |         |   |      |   |         |      |  |   |         |  
|                                                                    | 
|                                                                    |  | Year ended December 31, |        
|                                                                    |  | 2010                    |         |   | 2009 |   |         | 2008 | 
|DEPRECIATION, AMORTIZATION AND COST OF TIMBER HARVESTED             |  |                         |         |   |      |   |         |      |  |   |         |  
|OSB                                                                 |  | $                       | 37.4    |   |      | $ | 35.2    |      |  | $ | 49.6    |  
|Siding                                                              |  |                         | 18.1    |   |      |   | 18.5    |      |  |   | 20.5    |  
|Engineered Wood Products                                            |  |                         | 13.1    |   |      |   | 12.2    |      |  |   | 15.8    |  
|Other products                                                      |  |                         | 11.1    |   |      |   | 10.7    |      |  |   | 9.0     |  
|Non-segment related                                                 |  |                         | 2.3     |   |      |   | 3.4     |      |  |   | 5.5     |  
|                                                                    |  |                         |         |   |      |   |         |      |  |   |         |  
|Total depreciation, amortization and cost of timber harvested       |  | $                       | 82.0    |   |      | $ | 80.0    |      |  | $ | 100.4   |  
|                                                                    |  |                         |         |   |      |   |         |      |  |   |         |  
|CAPITAL EXPENDITURES                                                |  |                         |         |   |      |   |         |      |  |   |         |  
|OSB                                                                 |  | $                       | 7.1     |   |      | $ | 2.5     |      |  | $ | 34.5    |  
|Siding                                                              |  |                         | 5.6     |   |      |   | 4.5     |      |  |   | 9.5     |  
|Engineered Wood Products                                            |  |                         | 0.4     |   |      |   | 0.2     |      |  |   | 42.6    |  
|Other products                                                      |  |                         | 1.1     |   |      |   | 2.3     |      |  |   | 9.5     |  
|Non-segment related                                                 |  |                         | 0.3     |   |      |   | 0.1     |      |  |   | 3.3     |  
|                                                                    |  |                         |         |   |      |   |         |      |  |   |         |  
|Total capital expenditures                                          |  | $                       | 14.5    |   |      | $ | 9.6     |      |  | $ | 99.4    |  
|                                                                    |  |                         |         |   |      |   |         |      |  |   |         |  



93



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Information concerning identifiable assets by segment is as follows:



|                         |      |              |         |      |  |   |         | 
|------------------------ | ---- | ------------ | ------- | ---- |  | - | ------- | 
|In millions              |      | December 31, |        
|                         | 2010 |              |         | 2009 | 
|IDENTIFIABLE ASSETS      |      |              |         |      |  |   |         | 
|OSB                      |      | $            | 617.2   |      |  | $ | 560.6   | 
|Siding                   |      |              | 177.2   |      |  |   | 195.9   | 
|Engineered Wood Products |      |              | 223.7   |      |  |   | 240.0   | 
|Other products           |      |              | 257.5   |      |  |   | 190.2   | 
|Non-segment related      |      |              | 1,135.0 |      |  |   | 1,433.6 | 
|                         |      |              |         |      |  |   |         | 
|Total assets             |      | $            | 2,410.6 |      |  | $ | 2,620.3 | 
|                         |      |              |         |      |  |   |         | 

Non-segment related assets include long-term notes receivable, cash and cash equivalents, short-term and
long-term investments, corporate assets, assets held for sale and other items.

Export sales are primarily to customers in
Asia, Australia, South America and Europe. Information concerning LPs geographic segments is as follows:



|                                                                                                                                                                                               |  |                         |       |   |      |   |       |      |  |   |       |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------- | ----- | - | ---- | - | ----- | ---- |  | - | ----- | -
|                                                                                                                                                                                               |  | Year ended December 31, |      
|Dollars in millions                                                                                                                                                                            |  | 2010                    |       |   | 2009 |   |       | 2008 | 
|GEOGRAPHIC SEGMENTS:                                                                                                                                                                           |  |                         |       |   |      |   |       |      |  |   |       |  
|Total SalesPoint of origin                                                                                                                                                                    |  |                         |       |   |      |   |       |      |  |   |       |  
|U.S.                                                                                                                                                                                           |  | $                       | 1,015 |   |      | $ | 813   |      |  | $ | 1,034 |  
|Canada and other                                                                                                                                                                               |  |                         | 439   |   |      |   | 352   |      |  |   | 501   |  
|Intersegment sales to U.S.                                                                                                                                                                     |  |                         | (70   | ) |      |   | (104  | )    |  |   | (156  | )
|                                                                                                                                                                                               |  |                         |       |   |      |   |       |      |  |   |       |  
|Total Sales                                                                                                                                                                                    |  | $                       | 1,384 |   |      | $ | 1,061 |      |  | $ | 1,379 |  
|                                                                                                                                                                                               |  |                         |       |   |      |   |       |      |  |   |       |  
|Export sales (included in above)                                                                                                                                                               |  | $                       | 8     |   |      | $ | 43    |      |  | $ | 75    |  
|                                                                                                                                                                                               |  |                         |       |   |      |   |       |      |  |   |       |  
|Operating profit (loss)                                                                                                                                                                        |  |                         |       |   |      |   |       |      |  |   |       |  
|U.S.                                                                                                                                                                                           |  | $                       | 55    |   |      | $ | (6    | )    |  | $ | (106  | )
|Canada and other                                                                                                                                                                               |  |                         | 7     |   |      |   | (62   | )    |  |   | (94   | )
|Other operating credits and charges, net and gain (loss) on sales of and impairments of long-lived assets                                                                                      |  |                         | (3    | ) |      |   | 1     |      |  |   | (373  | )
|General corporate expense, other-than-temporary investment impairment, loss on early debt extinguishment, realized gain on long
term investments, translation gains (losses) and interest, net |  |                         | (113  | ) |      |   | (113  | )    |  |   | (192  | )
|                                                                                                                                                                                               |  |                         |       |   |      |   |       |      |  |   |       |  
|                                                                                                                                                                                               |  |                         | (54   | ) |      |   | (180  | )    |  |   | (765  | )
|Provision (benefit) for income taxes                                                                                                                                                           |  |                         | (22   | ) |      |   | (63   | )    |  |   | (202  | )
|                                                                                                                                                                                               |  |                         |       |   |      |   |       |      |  |   |       |  
|Income (loss) from continuing operations                                                                                                                                                       |  | $                       | (32   | ) |      | $ | (117  | )    |  | $ | (563  | )
|                                                                                                                                                                                               |  |                         |       |   |      |   |       |      |  |   |       |  
|Identifiable tangible long-lived assets                                                                                                                                                        |  |                         |       |   |      |   |       |      |  |   |       |  
|U.S.                                                                                                                                                                                           |  | $                       | 683   |   |      | $ | 729   |      |  | $ | 779   |  
|Canada and other                                                                                                                                                                               |  |                         | 383   |   |      |   | 356   |      |  |   | 356   |  
|                                                                                                                                                                                               |  |                         |       |   |      |   |       |      |  |   |       |  
|Total assets                                                                                                                                                                                   |  | $                       | 1,066 |   |      | $ | 1,085 |      |  | $ | 1,135 |  
|                                                                                                                                                                                               |  |                         |       |   |      |   |       |      |  |   |       |  

The amounts included in the tables above for Canada and others are primarily related to Canada or South
American operations.



94



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Interim Financial Results (unaudited)



|                                                                                                       |  |         |       |   |         |   |       |         |  |   |         |   |  |      |       |   |      |   |       |      |  |   |       |   |  |   |       |   |  |   |       |  
|------------------------------------------------------------------------------------------------------ |  | ------- | ----- | - | ------- | - | ----- | ------- |  | - | ------- | - |  | ---- | ----- | - | ---- | - | ----- | ---- |  | - | ----- | - |  | - | ----- | - |  | - | ----- | -
|                                                                                                       |  | 1ST QTR |       |   | 2ND QTR |   |       | 3RD QTR |  |   | 4TH QTR |  
|(Dollars in millions, except per share)                                                                |  | 2010    |       |   | 2009    |   |       | 2010    |  |   | 2009    |   |  | 2010 |       |   | 2009 |   |       | 2010 |  |   | 2009  |  
|QUARTERLY DATA                                                                                         |  |         |       |   |         |   |       |         |  |   |         |   |  |      |       |   |      |   |       |      |  |   |       |   |  |   |       |   |  |   |       |  
|Net sales                                                                                              |  | $       | 297.0 |   |         | $ | 205.2 |         |  | $ | 447.5   |   |  | $    | 267.7 |   |      | $ | 322.8 |      |  | $ | 310.7 |   |  | $ | 316.3 |   |  | $ | 277.4 |  
|Income (loss) from continuing operations before taxes, equity in earnings of unconsolidated affiliates |  |         | (32.1 | ) |         |   | (47.0 | )       |  |   | 35.4    |   |  |      | (39.9 | ) |      |   | (43.6 | )    |  |   | (20.4 | ) |  |   | (7.6  | ) |  |   | (62.2 | )
|Income (loss) from continuing operations                                                               |  |         | (22.5 | ) |         |   | (30.3 | )       |  |   | 23.6    |   |  |      | (27.2 | ) |      |   | (30.9 | )    |  |   | (12.5 | ) |  |   | (2.4  | ) |  |   | (46.5 | )
|Net income (loss)                                                                                      |  | $       | (22.7 | ) |         | $ | (30.7 | )       |  | $ | 22.4    |   |  | $    | (29.5 | ) |      | $ | (31.7 | )    |  | $ | (12.7 | ) |  | $ | (6.6  | ) |  | $ | (48.9 | )
|Income (loss) from continuing operations per sharebasic                                               |  | $       | (0.18 | ) |         | $ | (0.29 | )       |  | $ | 0.18    |   |  | $    | (0.26 | ) |      | $ | (0.23 | )    |  | $ | (0.12 | ) |  | $ | (0.02 | ) |  | $ | (0.37 | )
|Income (loss) from continuing operations per sharediluted                                             |  | $       | (0.18 | ) |         | $ | (0.29 | )       |  | $ | 0.17    |   |  | $    | (0.26 | ) |      | $ | (0.23 | )    |  | $ | (0.12 | ) |  | $ | (0.02 | ) |  | $ | (0.37 | )
|Net income (loss) per sharebasic                                                                      |  | $       | (0.18 | ) |         | $ | (0.30 | )       |  | $ | 0.17    |   |  | $    | (0.28 | ) |      | $ | (0.24 | )    |  | $ | (0.12 | ) |  | $ | (0.05 | ) |  | $ | (0.39 | )
|Net income (loss) per sharediluted                                                                    |  | $       | (0.18 | ) |         | $ | (0.30 | )       |  | $ | 0.16    |   |  | $    | (0.28 | ) |      | $ | (0.24 | )    |  | $ | (0.12 | ) |  | $ | (0.05 | ) |  | $ | (0.39 | )
|Cash dividends per share                                                                               |  |         |      |   |         |   |      |         |  |   |        |   |  |      |      |   |      |   |      |      |  |   |      |   |  |   |      |   |  |   |      |  
|SALES BY SEGMENT:                                                                                      |  |         |       |   |         |   |       |         |  |   |         |   |  |      |       |   |      |   |       |      |  |   |       |   |  |   |       |   |  |   |       |  
|OSB                                                                                                    |  | $       | 117.6 |   |         | $ | 72.4  |         |  | $ | 217.8   |   |  | $    | 98.7  |   |      | $ | 140.1 |      |  | $ | 123.3 |   |  | $ | 127.2 |   |  | $ | 114.4 |  
|Siding                                                                                                 |  |         | 89.8  |   |         |   | 74.7  |         |  |   | 130.6   |   |  |      | 103.6 |   |      |   | 104.6 |      |  |   | 112.8 |   |  |   | 102.8 |   |  |   | 88.3  |  
|Engineered wood products                                                                               |  |         | 48.8  |   |         |   | 30.0  |         |  |   | 55.9    |   |  |      | 35.8  |   |      |   | 38.0  |      |  |   | 47.8  |   |  |   | 49.3  |   |  |   | 44.1  |  
|Other products                                                                                         |  |         | 41.3  |   |         |   | 28.5  |         |  |   | 47.6    |   |  |      | 30.1  |   |      |   | 41.2  |      |  |   | 27.4  |   |  |   | 37.5  |   |  |   | 31.0  |  
|Intersegment sales                                                                                     |  |         | (0.5  | ) |         |   | (0.4  | )       |  |   | (4.4    | ) |  |      | (0.5  | ) |      |   | (1.1  | )    |  |   | (0.6  | ) |  |   | (0.5  | ) |  |   | (0.4  | )
|                                                                                                       |  |         |       |   |         |   |       |         |  |   |         |   |  |      |       |   |      |   |       |      |  |   |       |   |  |   |       |   |  |   |       |  
|Total net sales                                                                                        |  | $       | 297.0 |   |         | $ | 205.2 |         |  | $ | 447.5   |   |  | $    | 267.7 |   |      | $ | 322.8 |      |  | $ | 310.7 |   |  | $ | 316.3 |   |  | $ | 277.4 |  
|                                                                                                       |  |         |       |   |         |   |       |         |  |   |         |   |  |      |       |   |      |   |       |      |  |   |       |   |  |   |       |   |  |   |       |  
|PROFIT (LOSS) BY BUSINESS SEGMENT                                                                      |  |         |       |   |         |   |       |         |  |   |         |   |  |      |       |   |      |   |       |      |  |   |       |   |  |   |       |   |  |   |       |  
|OSB                                                                                                    |  | $       | (4.5  | ) |         | $ | (24.2 | )       |  | $ | 47.9    |   |  | $    | (18.4 | ) |      | $ | (5.0  | )    |  | $ | (5.8  | ) |  | $ | (12.6 | ) |  | $ | (16.7 | )
|Siding                                                                                                 |  |         | 8.5   |   |         |   | 2.1   |         |  |   | 21.8    |   |  |      | 6.5   |   |      |   | 9.3   |      |  |   | 16.1  |   |  |   | 11.7  |   |  |   | 4.6   |  
|Engineered wood products                                                                               |  |         | (6.6  | ) |         |   | (9.2  | )       |  |   | (4.4    | ) |  |      | (8.6  | ) |      |   | (4.9  | )    |  |   | (6.2  | ) |  |   | (5.4  | ) |  |   | (9.1  | )
|Other products                                                                                         |  |         | 0.2   |   |         |   | 1.6   |         |  |   | 3.7     |   |  |      | 0.6   |   |      |   | 0.7   |      |  |   | 0.2   |   |  |   | 1.5   |   |  |   | (1.6  | )
|Other operating credits and charges, net                                                               |  |         | 0.1   |   |         |   | 3.8   |         |  |   | (0.6    | ) |  |      | 1.9   |   |      |   | (2.3  | )    |  |   | 1.6   |   |  |   | 2.7   |   |  |   | (8.9  | )
|Gain (loss) on sale of and impairment of long-lived assets                                             |  |         | (1.3  | ) |         |   | (0.1  | )       |  |   | 0.1     |   |  |      | 1.0   |   |      |   | (0.8  | )    |  |   | 1.2   |   |  |   | (0.4  | ) |  |   | 0.4   |  
|General corporate and other expenses, net                                                              |  |         | (19.8 | ) |         |   | (19.1 | )       |  |   | (18.7   | ) |  |      | (18.5 | ) |      |   | (16.5 | )    |  |   | (17.8 | ) |  |   | (18.4 | ) |  |   | (21.1 | )
|Non-operating income (expense)                                                                         |  |         | 1.5   |   |         |   | 3.2   |         |  |   | (0.1    | ) |  |      | 6.7   |   |      |   | (0.4  | )    |  |   | 0.8   |   |  |   | 1.2   |   |  |   | (18.0 | )
|Other-than-temporary investment impairment                                                             |  |         |      |   |         |   | (0.9  | )       |  |   |        |   |  |      | (0.8  | ) |      |   | (17.0 | )    |  |   | (0.1  | ) |  |   |      |   |  |   | (0.2  | )
|Realized gain on sale of long term investments                                                         |  |         |      |   |         |   |      |         |  |   |        |   |  |      |      |   |      |   |      |      |  |   |      |   |  |   | 19.0  |   |  |   | 18.7  |  
|Investment income                                                                                      |  |         | 5.9   |   |         |   | 6.1   |         |  |   | 4.3     |   |  |      | 8.3   |   |      |   | 4.9   |      |  |   | 8.0   |   |  |   | 4.3   |   |  |   | 6.6   |  
|Interest expense, net of capitalized interest                                                          |  |         | (16.8 | ) |         |   | (12.9 | )       |  |   | (17.7   | ) |  |      | (21.9 | ) |      |   | (15.3 | )    |  |   | (21.0 | ) |  |   | (14.1 | ) |  |   | (18.8 | )
|                                                                                                       |  |         |       |   |         |   |       |         |  |   |         |   |  |      |       |   |      |   |       |      |  |   |       |   |  |   |       |   |  |   |       |  
|Loss from operations before taxes                                                                      |  |         | (32.8 | ) |         |   | (49.6 | )       |  |   | 36.3    |   |  |      | (43.2 | ) |      |   | (47.3 | )    |  |   | (23.0 | ) |  |   | (10.5 | ) |  |   | (64.1 | )
|Provision (benefit) for income taxes                                                                   |  |         | (10.3 | ) |         |   | (19.3 | )       |  |   | 12.7    |   |  |      | (16.0 | ) |      |   | (16.4 | )    |  |   | (10.5 | ) |  |   | (8.1  | ) |  |   | (17.6 | )
|                                                                                                       |  |         |       |   |         |   |       |         |  |   |         |   |  |      |       |   |      |   |       |      |  |   |       |   |  |   |       |   |  |   |       |  
|Loss from continuing operations                                                                        |  | $       | (22.5 | ) |         | $ | (30.3 | )       |  | $ | 23.6    |   |  | $    | (27.2 | ) |      | $ | (30.9 | )    |  | $ | (12.5 | ) |  | $ | (2.4  | ) |  | $ | (46.5 | )
|                                                                                                       |  |         |       |   |         |   |       |         |  |   |         |   |  |      |       |   |      |   |       |      |  |   |       |   |  |   |       |   |  |   |       |  

Included in Other operating credits and charges, net and (Gain) loss on sale or impairment
of long-lived assets for continuing operations are the following:

In the second quarter of 2010, LP
recorded a loss of $0.6 million associated with an assessment in connection with one of its indefinitely curtained OSB mill.



95



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In the third quarter of 2010, LP recorded a loss of $2.2 million associated
with LPs settlement of a product related anti-trust litigation matter.

In the fourth quarter of 2010, LP
recorded a gain of $2.5 million associated with the reversal of reverses associated with product related contingency reserves in connection with LPs settlement of a hardboard class action suit; a gain of $0.5 million associated with the
resolution of liability related to the acquisition of Forex; and a loss of $0.4 million associated with an assessment in connection with one of its indefinitely curtained OSB mill

In the first quarter of 2009, LP recorded a net gain of $4.3 million associated with reimbursements of legal expenses
related to an environmental litigation matter and a loss $0.5 million for severance obligations associated with LPs right sizing initiatives.

In the second quarter of 2009, LP recorded a further gain of $4.1 million associated with reimbursement of legal expenses related to an environmental litigation matter, a loss of $2.6 million associated
with environmental reserves for two sites which LP no longer operates and a gain of $0.4 million associated with a contractor default on a construction project.

In the third quarter of 2009, LP recorded $2.0 gain on an insurance recovery associated with a facility explosion that occurred in the second quarter of 2008 and a loss of $0.4 million for severance
obligations associated with LPs right sizing initiatives.

In the fourth quarter of 2009, LP
recorded $3.3 million loss associated with product related contingency reserves in connection with LPs settlement of a hardboard class action suit; $5.0 million associated with increases in environmental contingency reserves associated with a
previously owned site and $0.7 million associated with a loss on a sublease associated with LPs Corporate headquarters.

See Notes 16 and 17 for further discussion on the other operating charges and credits, net and the gains and losses on sale of and impairment of long-lived assets mentioned above.



96



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|ITEM 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|------- | ------------------------------------------------------------------------------------

None



|ITEM 9A. | Controls and Procedures
|-------- | -----------------------

Evaluation of Disclosure Controls and Procedures

As of December 31,
2010, our Chief Executive Officer and Chief Financial Officer carried out, with the participation of the Companys Disclosure Practices Committee and the Companys management, an evaluation of the effectiveness of our disclosure controls
and procedures, as defined in Rule 13a-15(e) under the Securities Exchange Act (Act). Based upon this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Companys disclosure controls and procedures
are effective to provide reasonable assurance that material information required to be disclosed by us in reports we file under the Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and
that information required to be disclosed by us in the reports we file or submit under the Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely
decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in LPs internal control over financial reporting that occurred during LPs most recently completed fiscal
quarter that have materially affected, or are reasonably likely to materially affect, the Companys internal control over financial reporting.

Managements Report on Internal Control Over Financial Reporting

The
Companys management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in the Exchange Act Rule 13a-15(f). The Companys management conducted an assessment of the Companys
internal control over financial reporting based on the framework established by the Committee of Sponsoring Organizations of the Treadway Commission in Internal ControlIntegrated Framework. Based on this assessment, the Companys
management has concluded that, as of December 31, 2010, the Companys internal control over financial reporting is effective. The Companys independent registered public accounting firm, Deloitte & Touche LLP, has audited the
Companys consolidated financial statements and has issued an attestation report the Companys internal control over financial reporting, as stated in their report included herein.

The certifications of LPs Chief Executive Officer and Chief Financial Officer required under Section 302 of the Sarbanes-Oxley
Act have been filed as Exhibits 31.1 and 31.2 to this report. Additionally, in 2010 LPs Chief Executive Officer certified to the New York Stock Exchange (NYSE) that he was not aware of any violation by LP of the NYSE corporate
governance listing standards.



97



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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Louisiana-Pacific Corporation

We have audited the internal control over financial reporting of Louisiana-Pacific Corporation and subsidiaries (the Company)
as of December 31, 2010, based on criteria established in Internal ControlIntegrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission. The Companys management is responsible for
maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Managements Report on Internal Control Over Financial
Reporting. Our responsibility is to express an opinion on the Companys internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a
reasonable basis for our opinion.

A companys internal control over financial reporting is a process designed by, or
under the supervision of, the companys principal executive and principal financial officers, or persons performing similar functions, and effected by the companys board of directors, management, and other personnel 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. A companys internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with
authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material
effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting,
including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the
internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of
December 31, 2010, based on the criteria established in Internal ControlIntegrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated
financial statements as of and for the year ended December 31, 2010 of the Company and our report dated February 28, 2011 expressed an unqualified opinion on those financial statements and included an explanatory paragraph regarding the
Companys adoption of accounting guidance codified under Financial Accounting Standards Codification Topic (ASC) 860, Transfers and Servicing and ASC 810, Consolidation on January 1, 2010.

/s/ DELOITTE & TOUCHE LLP

Nashville,
Tennessee

February 28, 2011



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PART III



|ITEM 10. | Directors and Executive Officers of the Registrant
|-------- | --------------------------------------------------

Information regarding LPs directors is incorporated herein by reference to the material included under the caption Item 1Election of Directors in the definitive proxy statement
filed by LP for its 2011 annual meeting of stockholders (the 2011 Proxy Statement). Information regarding compliance with Section 16(a) of the Securities Exchange Act of 1934 is incorporated herein by reference to the material
included under the caption Section 16(a) Beneficial Ownership Reporting Compliance in the 2011 Proxy Statement. Information regarding LPs audit committee is incorporated herein by reference to the material included under the
captions Board and Committee Meetings, Finance and Audit Committee and Audit Committee Financial Experts in the 2011 Proxy Statement.

Information regarding each of LPs executive officers as of February 28, 2011, including employment history for the past five years, is set forth below:



|                     |  |     |    |  |       |                                                                     
|-------------------- |  | --- | -- |  | ----- | --------------------------------------------------------------------
|Name                 |  | Age |    |  | Title
|Richard W. Frost     |  |     | 59 |  |       | Chief Executive Officer                                             
|Curtis M. Stevens    |  |     | 58 |  |       | Executive Vice President, Administration and Chief Financial Officer
|Richard S. Olszewski |  |     | 54 |  |       | Executive Vice President, Specialty Products and Sales              
|Jeffrey N. Wagner    |  |     | 56 |  |       | Executive Vice President, OSB                                       

Richard
W. Frost has been Chief Executive Officer since November 2004. He was Executive Vice President, Commodity Products, Engineered Wood, Procurement and Engineering since March 2003 and Executive Vice President, OSB, Procurement and Engineering from
May 2002 through February 2003. He previously was Vice President, Timberlands and Procurement from 1996 to April 2002.

Curtis M. Stevens has been Executive Vice President, Administration and Chief Financial Officer since May 2002. He previously
served as Vice President, Treasurer and Chief Financial Officer from September 1997 to April 2002.

Richard S.
Olszewskihas been Executive Vice President, Specialty Products and Sales since September 2007. Previously he was Vice President of the Fasson Roll Division, North America, a division of Avery Dennison Corporation.

Jeffrey N. Wagner has been Executive Vice President of OSB since May 2006 and previously Vice President OSB since November 2004.
He served as Vice President, Forest Resources, Supply Management and Logistics from 2003 to 2004. Previously, Mr. Wagner served as Director of Supply Management.

In January 2004, the Board adopted a Code of Ethics applicable to LPs principal executive officer, principal financial officer and principal accounting officer. The Code of Ethics is disclosed at
LPs website at www.lpcorp.com.

In January 2005, the Board adopted revised charters for the Nominating Committee and the
Compensation Committee and also adopted a Code of Business Conduct and Ethics and Corporate Governance Guidelines, each of which is disclosed at LPs website at www.lpcorp.com.



|ITEM 11. | Executive Compensation
|-------- | ----------------------

Information regarding executive compensation is incorporated herein by reference to the material under the captions Compensation of Executive Officers, and Directors
Compensation, in the 2011 Proxy Statement.



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|ITEM 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|-------- | ----------------------------------------------------------------------------------------------

Information regarding security ownership of certain beneficial owners and management and LPs existing equity compensation plans and
arrangements is incorporated herein by reference to the material under the captions Holders of Common Stock and Equity Compensation Plan Information in the 2011 Proxy Statement.



|ITEM 13. | Certain Relationships and Related Transactions, and Director Independence
|-------- | -------------------------------------------------------------------------

There are no transactions of the type required to be disclosed by Item 404(a) of Regulation S-K.

Information regarding transactions with related persons and director independence is incorporated herein by reference to the material
under the captions Nominees, Continuing Directors, Corporate Governance, Audit Committee Financial Experts and Related Person Transactions in the 2011 Proxy Statement.



|ITEM 14. | Principal Accountant Fees and Services
|-------- | --------------------------------------

Information regarding fees and services provided by LPs principal accountant and the LP Audit Committees pre-approval policies and procedures relating thereto is incorporated herein by
reference to the material under the caption Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors in the 2011 Proxy Statement. In November 2006, the Board adopted a revised charter for the Audit Committee which
is disclosed at LPs website at www.lpcorp.com.



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PART IV



|ITEM 15. | Exhibits and Financial Statement Schedules
|-------- | ------------------------------------------

A. Financial Statements and Financial Statement Schedules

The following
financial statements of LP are included in this report:

Consolidated Balance SheetsDecember 31, 2010, and 2009.

Consolidated Statements of Incomeyears ended December 31, 2010, 2009, and 2008.

Consolidated Statements of Cash Flowsyears ended December 31, 2010, 2009, 2008.

Consolidated Statements of Stockholders Equityyears ended December 31, 2010, 2009 and 2008.

Consolidated Statements of Comprehensive Incomeyears ended December 31, 2010, 2009 and 2008.

Notes to the Financial Statements.

Report of Independent Registered Public Accounting Firm.

Interim Financial
Results (unaudited).

No other financial statement schedules are required to be filed.

B. Exhibits

The
exhibits filed as part of this report or incorporated by reference herein are listed in the accompanying exhibit index. Each management contract or compensatory plan or arrangement is identified by an asterisk (*).



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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Louisiana-Pacific Corporation, a Delaware corporation (the registrant), has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.



|                        |  |  |  |                                                                                        
|----------------------- |  |  |  | ---------------------------------------------------------------------------------------
|Date: February 28, 2011 |  |  |  | LOUISIANA-PACIFIC CORPORATION (Registrant)                                             
|                        |  | 
|                        |  |  |  | /s/    CURTIS M.
STEVENS                                                               
|                        |  |  |  | Curtis M. Stevens Executive Vice President, Administration, and Chief Financial
Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.



|                  |  |  |  |                                                                                                                      
|----------------- |  |  |  | ---------------------------------------------------------------------------------------------------------------------
|Date              |  |  |  | Signature and Title                                                                                                  
|                  |  | 
|February 28, 2011 |  |  |  | /s/    RICHARD W.
FROST                                                                                              
|                  |  |  |  | Richard W. Frost Chief Executive Officer, Director
(Principal Executive Officer)                                     
|                  |  | 
|February 28, 2011 |  |  |  | /s/    CURTIS M.
STEVENS                                                                                             
|                  |  |  |  | Curtis M. Stevens Executive Vice President, Administration,
and Chief Financial Officer (Principal Financial Officer)
|                  |  | 
|February 28, 2011 |  |  |  | /s/    REBECCA A.
BARCKLEY                                                                                           
|                  |  |  |  | Rebecca A. Barckley Controller, Financial Reporting (Principal
Accounting Officer)                                   
|                  |  | 
|February 28, 2011 |  |  |  | /s/    E. GARY
COOK                                                                                                  
|                  |  |  |  | E. Gary Cook Chairman of the Board                                                                                   
|                  |  | 
|February 28, 2011 |  |  |  | /s/    COLIN
D.WATSON                                                                                                
|                  |  |  |  | Colin D.Watson Director                                                                                              
|                  |  | 
|February 28, 2011 |  |  |  | /s/    ARCHIE W.
DUNHAM                                                                                              
|                  |  |  |  | Archie W. Dunham Director                                                                                            
|                  |  | 
|February 28, 2011 |  |  |  | /s/    LIZANNE C.
GOTTUNG                                                                                            
|                  |  |  |  | Lizanne C. Gottung Director                                                                                          
|                  |  | 
|February 28, 2011 |  |  |  | /s/    DUSTAN E.
MCCOY                                                                                               
|                  |  |  |  | Dustan E. McCoy Director                                                                                             



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|                  |  |  |  |                            
|----------------- |  |  |  | ---------------------------
|Date              |  |  |  | Signature and Title        
|                  |  | 
|February 28, 2011 |  |  |  | /s/    DANIEL K.
FRIERSON  
|                  |  |  |  | Daniel K. Frierson Director
|                  |  | 
|February 28, 2011 |  |  |  | /s/    KURT M.
LANDGRAF    
|                  |  |  |  | Kurt M. Landgraf Director  
|                  |  | 
|February 28, 2011 |  |  |  | /s/    JOHN W.
WEAVER      
|                  |  |  |  | John W. Weaver Director    



103



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EXHIBIT INDEX

On written request, Louisiana-Pacific Corporation (LP) will furnish to any record holder or beneficial holder of its common stock any
exhibit to this report upon the payment of a fee equal to LPs costs of copying such exhibit plus postage. Any such request should be sent to: Louisiana-Pacific Corporation, 414 Union Street, Suite 2000, Nashville, TN 37219.

Items identified with an asterisk (*) are management contracts or compensatory plans or arrangements. Each prior LP filing which
contains an exhibit is incorporated by reference herein is filed under SEC File No. 001-07107.



|        |  |                                                                                                                                                                                                                                                                                                                                                                                        
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        | 
|3.1     |  | Restated Certificate of Incorporation of LP. Incorporated herein by reference to Exhibit 3.1 to LPs Annual Report on Form 10-K for the year ended December 31,
2007.                                                                                                                                                                                                                  
|        | 
|3.1 (a) |  | Amended Certificate of Designation of Series A Junior Participating Cumulative Preferred Stock. Incorporated herein by reference to Exhibit 3.3 to LPs Quarterly Report on Form
10-Q for the quarter ended June 30, 2009.                                                                                                                                                             
|        | 
|3.2     |  | Bylaws of LP, as amended and restated effective November 5, 2010. Incorporated herein by reference to Exhibit 3.2 to LPs Current Report on Form 8-K dated November 4,
2010.                                                                                                                                                                                                           
|        | 
|4.1     |  | Rights Agreement, dated as of May 23, 2008, between LP and Computershare Trust Company, N.A., as Rights Agent, including the form of Right Certificate as Exhibit A and the Summary
of Rights to Purchase Preferred Shares as Exhibit B. Incorporated herein by reference to Exhibit 4.1 to LPs Registration Statement on Form 8-A filed June 17, 2008.                               
|        | 
|4.2(a)  |  | Indenture, dated as of April 2, 1999, between LP and First National Bank of Chicago, N.A., as trustee (predecessor to Bank One Trust Company, N.A.). Incorporated herein by reference
to Exhibit 4.2(a) to LPs Quarterly Report on Form 10-Q for the quarter ended September 30, 2001.                                                                                                
|        | 
|4.2(b)  |  | Second Supplemental Indenture, dated August 18, 2000, between LP and Bank One Trust Company, N.A., as trustee. Incorporated herein by reference to Exhibit 4.2 to LPs Quarterly
Report on Form 10-Q for the quarter ended September 30, 2000.                                                                                                                                         
|        | 
|4.2(c)  |  | Fifth Supplemental Indenture, dated as of March 10, 2009, between Louisiana-Pacific Corporation and The Bank of New York Mellon Trust
Company, N.A. Incorporated herein by reference to Exhibit 4.1 to LPs Current Report on Form 8-K dated March 10,
2009.                                                                                                                           
|        | 
|4.3     |  | Indenture, dated as of March 10, 2009, between Louisiana-Pacific Corporation, and its subsidiaries, GreenStone Industries, Inc.,
Ketchikan Pulp Company, Louisiana-Pacific International, Inc., and LPS Corporation and The Bank of New York Mellon Trust Company, N.A.
Incorporated herein by reference to Exhibit 4.2 to LPs Current Report on Form 8-K dated March 10, 2009.       
|        | 
|4.4     |  | Security Agreement, dated as of March 10, 2009, among Louisiana-Pacific Corporation, and its subsidiaries, GreenStone Industries, Inc., Ketchikan Pulp Company, Louisiana-Pacific
International, Inc., and LPS Corporation and The Bank of New York Mellon Trust Company, N.A. Incorporated herein by reference to Exhibit 4.3 to LPs Current Report on Form 8-K dated March 10, 2009.
|        | 
|4.5     |  | Warrant Agreement, dated as of March 10, 2009, between Louisiana-Pacific Corporation and Computershare Trust Company, N.A., as warrant
agent. Incorporated herein by reference to Exhibit 4.4 to LPs Current Report on Form 8-K dated March 10, 2009.                                                                                                                                 
|        | 
|4.6     |  | 2017 Notes Registration Rights Agreement, dated as of March 10, 2009, by and among Louisiana-Pacific Corporation and Banc of America Securities LLC, Goldman, Sachs & Co.
and RBC Capital Markets Corporation. Incorporated herein by reference to Exhibit 4.6 to LPs Current Report on Form 8-K dated March 10, 2009.                                                                



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|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        | 
|4.7     |  | Warrant Registration Rights Agreement, dated as of March 10, 2009, by and among Louisiana-Pacific Corporation and Banc of America Securities LLC, Goldman, Sachs & Co. and RBC
Capital Markets Corporation. Incorporated herein by reference to Exhibit 4.7 to LPs Current Report on Form 8-K dated March 10, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                  
|        | 
|10.1(a) |  | Loan and Security Agreement, dated March 10, 2009, among Louisiana-Pacific Corporation, and its subsidiaries, GreenStone Industries, Inc., Ketchikan Pulp Company, Louisiana-Pacific
International, Inc., LPS Corporation, 3047525 Nova Scotia Company, 3047526 Nova Scotia Company, Louisiana-Pacific Limited Partnership, Louisiana-Pacific Canada Ltd., Louisiana-Pacific (OSB) Ltd., Louisiana-Pacific Canada Pulp Co. and
Louisiana-Pacific Canada Sales ULC and Bank of America, N.A. Portions of this Exhibit have been omitted pursuant to a request for confidential treatment. The confidential portions have been furnished to the SEC. Incorporated herein by reference to
10.1(a) to LPs Form 10-K for the year ended December 31, 2009.
|        | 
|10.1(b) |  | First Amendment to Loan and Security Agreement, dated June 8, 2009, among Louisiana-Pacific Corporation, and its subsidiaries, GreenStone Industries, Inc., Ketchikan Pulp
Company, Louisiana-Pacific International, Inc., LPS Corporation, 3047525 Nova Scotia Company, 3047526 Nova Scotia Company, Louisiana-Pacific Limited Partnership, Louisiana-Pacific Canada Ltd., Louisiana-Pacific (OSB) Ltd., Louisiana-Pacific Canada
Pulp Co. and Louisiana-Pacific Canada Sales ULC and Bank of America, N.A. Incorporated herein by reference to 10.1(b) to LPs Form 10-K for the year ended December 31, 2009.                                                                                                                                      
|        | 
|10.1(c) |  | Second Amendment of the Loan and Security Agreement, dated January 27, 2010, among the Company, and its subsidiaries, GreenStone Industries, Inc., Ketchikan Pulp Company,
Louisiana-Pacific International, Inc., LPS Corporation, 3047525 Nova Scotia Company, 3047526 Nova Scotia Company, Louisiana-Pacific Limited Partnership, Louisiana-Pacific Canada Ltd., Louisiana-Pacific (OSB) Ltd., Louisiana-Pacific Canada Pulp Co.
and Louisiana-Pacific Canada Sales ULC and Bank of America, N.A. Incorporated herein by reference to 10.1(c) to LPs Form 10-K for the year ended December 31, 2009.                                                                                                                                               
|        | 
|10.1(d) |  | Third Amendment to Loan and Security Agreement, dated November 5, 2010, among the Company, and its subsidiaries, GreenStone Industries, Inc., Ketchikan Pulp Company,
Louisiana-Pacific International, Inc., LPS Corporation, 3047525 Nova Scotia Company, 3047526 Nova Scotia Company, Louisiana-Pacific Limited Partnership, Louisiana-Pacific Canada Ltd., Louisiana-Pacific (OSB) Ltd., Louisiana-Pacific Canada Pulp Co.
and Louisiana-Pacific Canada Sales ULC and Bank of America, N.A.. Incorporated by reference to 10.1 to LPs Current Report on Form 8-K dated November 4, 2010.                                                                                                                                                          
|        | 
|10.2    |  | Canadian Security Agreement, dated March 10, 2009, among Louisiana-Pacific Corporation, 3047525 Nova Scotia Company, 3047526 Nova Scotia Company, Louisiana-Pacific Limited
Partnership, Louisiana-Pacific Canada Ltd., Louisiana-Pacific (OSB) Ltd., Louisiana-Pacific Canada Pulp Co. and Louisiana-Pacific Canada Sales ULC and Bank of America, N.A. Incorporated herein by reference to Exhibit 10.2 to LPs Current Report
on Form 8-K dated March 10, 2009.                                                                                                                                                                                                                                                                                    
|        | 
|10.3    |  | Intercreditor Agreement, dated March 10, 2009, among Louisiana-Pacific Corporation, GreenStone Industries, Inc., Ketchikan Pulp Company, Louisiana-Pacific International, Inc. LPS
Corporation and Bank of America, N.A. and The Bank of New York Mellon Trust Company, N.A Incorporated herein by reference to Exhibit 10.3 to LPs Current Report on Form 8-K dated March 10, 2009.                                                                                                                                                                                                                                                                                                                                                                 
|        | 
|10.4    |  | Note Purchase Agreement, dated June 30, 1998, among LP, LP SPV2, LLC and the Purchasers named therein. Incorporated herein by reference to Exhibit 4 to LPs Quarterly Report on
Form 10-Q for the quarter ended June 30, 1998.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       



105



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|         |  |                                                                                                                                                                                                                                                                                                                                                                           
|-------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|         | 
|10.5     |  | Undertaking Letter between Phemus Corporation and LP, dated July 2, 2003. Incorporated herein by reference to Exhibit 10.22 to LPs Quarterly Report on Form 10-Q for the
quarter ended June 30, 2003.                                                                                                                                                                    
|         | 
|10.6(a)  |  | Settlement Agreement, dated May 3, 2000, among ABT Building Products Corporation, ABTco, Inc., Abitibi-Price Corporation, attorneys representing plaintiffs in hard board siding
class action litigation and the other parties named therein. Incorporated herein by reference to Exhibit 10.2 to LPs Quarterly Report on Form 10-Q for the quarter ended March 30, 2000.
|         | 
|10.7     |  | 1992 Non-Employee Director Stock Option Plan (as amended and restated as of May 8, 2009). Incorporated herein by reference to Exhibit 10.10 to LPs Quarterly Report on Form
10-Q for the fiscal quarter ended June 30, 2009. *                                                                                                                                           
|         | 
|10.8     |  | 2000 Non-Employee Director Restricted Stock Plan Effective May 1, 2000 (as amended and restated as of May 8, 2009). Incorporated herein by reference to Exhibit 10.15 to LPs
Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2009. *                                                                                                                 
|         | 
|10.9     |  | 1997 Incentive Stock Award Plan, as amended and restated effective May 7, 2009. Incorporated herein by reference to Appendix A B to LPs Proxy Statement dated March 23, 2009.
*                                                                                                                                                                                          
|         | 
|10.9(a)  |  | Form of Award Agreement under the 1997 Incentive Stock Award Plan for Non-Qualified Stock Options. Incorporated herein by reference to Exhibit 10.1 to LPs Current Report on
Form 8-K dated February 4, 2005. *                                                                                                                                                          
|         | 
|10.9(b)  |  | General Form of Award Agreement under the 1997 Incentive Stock Award Plan for Incentive Shares. Incorporated herein by reference to Exhibit 10.3 to LP Current Report on Form 8-K
dated February 4, 2005. *                                                                                                                                                               
|         | 
|10.9(c)  |  | Form of Award Agreement for Richard W. Frost under the 1997 Incentive Stock Award Plan for Incentive Shares. Incorporated herein by reference to Exhibit 10.11(e) to LPs
Current Report on Form 8-K dated February 4, 2010.*                                                                                                                                             
|         | 
|10.9 (d) |  | Form of Award Agreement under the 1997 Incentive Stock Award Plan for Restricted Stock. Incorporated herein by reference to Exhibit 10.11(c) to LPs Annual Report on Form 10-K
for the fiscal year ended December 31, 2007.*                                                                                                                                             
|         | 
|10.9(e)  |  | Form of Award Agreement under the 1997 Incentive Stock Award Plan for Stock Settled Stock Appreciation Rights. Incorporated herein by reference to Exhibit 10.11(d) to LPs
Annual Report on Form 10-K for the fiscal year ended December 31, 2007.*                                                                                                                      
|         | 
|10.9(f)  |  | Form of Award Agreement for Richard W. Frost under the 1997 Incentive Stock Award Plan for Stock Settled Stock Appreciation Rights. Incorporated herein by reference to Exhibit
10.11(f) to LPs Current Report on Form 8-K dated February 4, 2010.*                                                                                                                      
|         | 
|10.10    |  | Annual Cash Incentive Award Plan, as amended and restated as of February 12, 2009. Incorporated herein by reference to Appendix B to LPs Proxy Statement dated March 23, 2009.
*                                                                                                                                                                                         
|         | 
|10.11    |  | Letter Agreement, dated July 16, 1997, relating to the employment of Curtis M. Stevens. Incorporated herein by reference to Exhibit 10.O to LPs Annual Report on Form 10-K for
the fiscal year ended December 31, 1997. *                                                                                                                                                
|         | 
|10.12    |  | Form of Change of Control Employment Agreement between LP and each of Richard W. Frost, Curtis M. Stevens, Richard S. Olszeski and Mr. Jeffrey M. Wagner. Incorporated herein by
reference to Exhibit 10.1 to LPs Current Report on Form 8-K. *                                                                                                                          



106



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|      |  |                                                                                                                                                                                                                                
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      | 
|10.13 |  | 2004 Executive Deferred Compensation Plan, amended and restated effective January 1, 2005. Incorporated herein by reference to Exhibit
10.1 to LPs Current Report on Form 8-K dated August 30, 2004. *                        
|      | 
|10.14 |  | 2008 Supplemental Executive Retirement Plan, amended and restated effective January 1, 2008. Incorporated herein by reference to Exhibit 10.24 to LPs Annual Report on Form
10-K for the fiscal year ended December 31, 2007.*
|      | 
|21    |  | List of LPs subsidiaries. Incorporated by reference to Exhibit 21 to LPs Annual Report on Form 10-K for the fiscal year ended December 31, 2004.                                                                             
|      | 
|23    |  | Consent of Deloitte & Touche LLP.                                                                                                                                                                                              
|      | 
|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.                                                                                                                                                             



LP hereby agrees to furnish
supplementally to the SEC upon its request any schedules and similar documents omitted pursuant to Item 601(b)(2) of Regulation S-K and any instruments omitted pursuant to Item 601(b)(4)(iii) of Regulation S-K.



107