LOUISIANA-PACIFIC CORP

6. DISCONTINUED OPERATIONS

Engineered Wood Products (EWP)

In March 2022, the Company sold its 50% equity interest in two joint ventures that produce I-joists to Resolute Forest Products Inc. for $59 million. The total net carrying value of our equity method investment at the date of sale was $19 million, and the Company recognized a gain associated with the sale of $39 million within Income from discontinued operations, net of income taxes in the Consolidated Statements of Income.

On August 1, 2022, the Company completed the sale of the assets related to the EWP segment. As a result of the sale, the Company received $217 million in gross cash proceeds after taking into account working capital adjustments. The Company paid $12 million in direct transaction costs, resulting in net proceeds of $205 million. The net carrying value of the EWP assets at the time of sale was $87 million, which resulted in a pre-tax gain of approximately $118 million within Income from discontinued operations, net of income taxes in the Consolidated Statements of Income.

Upon closing, the Company entered into a transition services agreement, pursuant to which the Company agreed to support the various activities of the EWP segment, which concluded during the year ended December 31, 2023.

The Company has classified the results of its EWP segment as discontinued operations in its Consolidated Statements of Income for the prior periods presented.

The following table presents the financial results of the EWP segment (dollars in millions):

1 Reflects operating results through August 1, 2022, when the assets related to the EWP segment were sold.

The following summarizes the total cash provided by operations and total cash used for investing activities related to the EWP segment and included in the Consolidated Statements of Cash Flows (dollars in millions):

Net cash provided by discontinued investing activities for the year ended December 31, 2022, included $59 million of proceeds from the sale of our 50% equity interest in two joint ventures that produced I-joists and $205 million of net proceeds from the sale of the EWP segment assets. Capital expenditures for discontinued operations totaled $3 million and $6 million for the years ended December 31, 2022 and 2021, respectively. Included in net cash provided by discontinued operating activities is depreciation and amortization of $3 million and $5 million for the years ended December 31, 2022 and 2021, respectively.