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Item 1. Financial Statements

2025-05-06 compared with 2024-11-05 · 142 added, 243 removed, 264 unchanged (59% of the section changed)

2 unchanged sentences

Amounts in millions, except per share amounts

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

Net sales $ 724 $ 724

2 unchanged sentences

Selling, general, and administrative expenses ( 75 ) ( 69 )

Impairment of long-lived assets — ( 1 ) — ( 25 )

Other operating credits and charges, net ( 2 ) 1

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Net income $ 91 $ 108

Net income attributed to non-controlling interest — — — —

Net income attributed to LP $ 90 $ 118 $ 358 $ 119

Net income attributed to LP per share of common stock:

Net income per share of common stock:

Basic $ 1.30 $ 1.49

Diluted $ 1.30 $ 1.48

Average shares of common stock used to compute net income (loss) per share:

Basic 70 72 71 72

Average shares of common stock used to compute net income per share:

Diluted 70 72

2 unchanged sentences

Amounts in millions

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

Net income $ 91 $ 108

1 unchanged sentence

Foreign currency translation adjustments 12 ( 15 )

Other — — — 4

Other comprehensive income (loss), net of tax 9 ( 19 ) ( 11 ) 2

Comprehensive income $ 103 $ 93

Comprehensive income associated with non-controlling interest — — — —

Comprehensive income attributed to LP $ 99 $ 99 $ 347 $ 121

The accompanying Notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

1 unchanged sentence

Amounts in millions, except per share amounts

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Cash and cash equivalents $ 256 $ 340

Receivables, net of allowance for doubtful accounts of $ 2 as of September 30, 2024 and December 31, 2023

Receivables, net of allowance for doubtful accounts of $ 2 as of March 31, 2025 and $ 1 as of December 31, 2024

Inventories 399 357

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Common stock, $ 1 par value per share, 200 shares authorized;

70 shares issued and outstanding, respectively, as of September 30, 2024;

and 88 and 72 shares issued and outstanding, respectively, as of December 31, 2023

85 shares issued and 70 shares issued and outstanding, respectively, as of March 31, 2025;

and 86 shares issued and 70 shares issued and outstanding, respectively, as of December 31, 2024

Additional paid-in capital 480 478

Retained earnings 1,625 1,615

Treasury stock, 16 shares at cost as of September 30, 2024 and December 31, 2023

Treasury stock, 15 shares and 16 shares at cost as of March 31, 2025 and December 31, 2024, respectively

( 388 ) ( 386 )

Accumulated comprehensive gain (loss) ( 100 ) ( 89 )

Accumulated comprehensive loss ( 110 ) ( 122 )

Total stockholders’ equity 1,692 1,671

3 unchanged sentences

Amounts in millions

Nine Months Ended September 30,

Three Months Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES:

2 unchanged sentences

Depreciation and amortization 35 31

Impairment of goodwill and long-lived assets — 25

Gain on sale of assets, net — ( 6 )

Pension loss due to settlement — 6

Deferred taxes — 9

Foreign currency remeasurement and transaction loss (gain) ( 2 ) 20

Other adjustments, net 5 4

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Property, plant, and equipment additions ( 64 ) ( 41 )

Acquisition of facility assets — ( 80 )

Proceeds from sales of assets — 9

Investment in affiliates ( 17 ) —

Other investing activities, net 16 ( 4 )

Net cash used in investing activities ( 64 ) ( 41 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Borrowing of long-term debt — 80

Repayment of long-term debt — ( 80 )

Payment of cash dividends ( 20 ) ( 19 )

13 unchanged sentences

Amounts in millions, except per share amounts

Common Stock Treasury Stock Additional

Capital Retained

Earnings Accumulated

Comprehensive

Stockholders'

Common Stock Treasury Stock Additional Paid-in Capital Retained Earnings Accumulated Comprehensive (Loss) Income Total Stockholders’ Equity

Shares Amount Shares Amount

Balance, December 31, 2024 86 $ 86 16 $ ( 386 ) $ 478 $ 1,615 $ ( 122 ) $ 1,671

88 $ 88 16 $ ( 386 ) $ 465 $ 1,479 $ ( 89 ) $ 1,557

Net income attributed to LP — — — — — 108 — 108

Net Income — — — — — 91 — 91

Dividends paid ($ 0.28 per share)

4 unchanged sentences

Compensation expense associated with stock-based compensation — — — — 5 — — 5

Other comprehensive loss — — — — — — ( 15 ) ( 15 )

Other comprehensive (loss) income — — — — — — 12 12

Balance, March 31, 2025 85 $ 85 15 $ ( 388 ) $ 480 $ 1,625 $ ( 110 ) $ 1,692

88 $ 88 16 $ ( 386 ) $ 465 $ 1,555 $ ( 104 ) $ 1,617

Net income attributed to LP — — — — — 160 — 160

Dividends paid ($ 0.26 per share)

— — — — — ( 19 ) — ( 19 )

Issuance of shares under stock plans — — — 1 1 — — 3

Taxes paid related to net settlement of stock-based awards — — — — — — — —

Purchase of stock ( 1 ) ( 1 ) — — — ( 101 ) — ( 103 )

Compensation expense associated with stock-based compensation — — — — 4 — — 4

Other comprehensive loss — — — — — — ( 4 ) ( 4 )

Balance, June 30, 2024

87 $ 87 16 $ ( 385 ) $ 471 $ 1,595 $ ( 109 ) $ 1,658

Net income attributed to LP — — — — — 90 — 90

Dividends paid ($ 0.26 per share)

— — — — — ( 18 ) — ( 18 )

Issuance of shares under stock plans — — — 3 ( 3 ) — — —

Taxes paid related to net settlement of stock-based awards — — — ( 4 ) — — — ( 4 )

Purchase of stock ( 1 ) ( 1 ) — — — ( 73 ) — ( 74 )

Compensation expense associated with stock-based compensation — — — — 4 — — 4

Other comprehensive loss — — — — — — 9 9

Balance, September 30, 2024

86 $ 86 16 $ ( 386 ) $ 472 $ 1,594 $ ( 100 ) $ 1,666

Common Stock Treasury Stock Additional

Capital Retained

Earnings Accumulated

Comprehensive

Stockholders'

Common Stock Treasury Stock Additional Paid-in Capital Retained Earnings Accumulated Comprehensive (Loss) Income Total Stockholders’ Equity

Shares Amount Shares Amount

Balance, December 31, 2023 88 $ 88 16 $ ( 386 ) $ 465 $ 1,479 $ ( 89 ) $ 1,557

88 $ 88 16 $ ( 388 ) $ 462 $ 1,371 $ ( 99 ) $ 1,433

Net income attributed to LP — — — — — 21 — 21

Net Income — — — — — 108 — 108

Dividends paid ($ 0.26 per share)

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Taxes paid related to net settlement of stock-based awards — — — ( 6 ) — — — ( 6 )

Purchase of stock — — — — — ( 13 ) — ( 13 )

Compensation expense associated with stock-based compensation — — — — 6 — — 6

Other comprehensive income — — — — — — 19 19

Other comprehensive (loss) income — — — — — — ( 15 ) ( 15 )

Balance, March 31, 2024 88 $ 88 16 $ ( 386 ) $ 465 $ 1,555 $ ( 104 ) $ 1,617

88 $ 88 16 $ ( 388 ) $ 455 $ 1,375 $ ( 80 ) $ 1,450

Net loss attributed to LP — — — — — ( 20 ) — ( 20 )

Dividends paid ($ 0.24 per share)

— — — — — ( 17 ) — ( 17 )

Issuance of shares under stock plans — — — 2 — — — 2

Taxes paid related to net settlement of stock-based awards — — — ( 1 ) — — — ( 1 )

Compensation expense associated with stock-based compensation — — — — 3 — — 3

Other comprehensive income — — — — — — 1 1

Balance, June 30, 2023

88 $ 88 16 $ ( 387 ) $ 458 $ 1,337 $ ( 78 ) $ 1,419

Net income attributed to LP — — — — — 118 — 118

Dividends paid ($ 0.24 per share)

— — — — — ( 17 ) — ( 17 )

Issuance of shares under stock plans — — — — — — — —

Taxes paid related to net settlement of stock-based awards — — — — — — — —

Compensation expense associated with stock-based compensation — — — — 2 — — 2

Other comprehensive loss — — — — — — ( 19 ) ( 19 )

Balance, September 30, 2023

88 $ 88 16 $ ( 387 ) $ 460 $ 1,438 $ ( 98 ) $ 1,502

The accompanying Notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

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References to "LP," the "Company," "we," "our," and "us" refer to Louisiana-Pacific Corporation and its consolidated subsidiaries as a whole.

See "Note 15 - Selected Segment Data" below for further information regarding our products and segments.

See "Note 15.

Selected Segment Data" below for further information regarding our products and segments.

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S.

GAAP) for interim financial information.

Accordingly, they do not include all the information and footnotes required by U.S.

The unaudited Condensed Consolidated Financial Statements presented here have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S.

GAAP) for interim financial reporting.

As such, they do not include all the information and footnotes required by U.S.

GAAP for complete consolidated financial statements.

In the opinion of management, all adjustments considered necessary for a fair presentation have been included and are of a normal and recurring nature.

These Condensed Consolidated Financial Statements and related Notes should be read in conjunction with our annual report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 14, 2024 (2023 Annual Report on Form 10-K).

Results of operations for interim periods are not necessarily indicative of results to be expected for an entire year.

Management believes that all necessary adjustments for a fair presentation have been included and are of a normal and recurring nature.

These Condensed Consolidated Financial Statements and the accompanying Notes should be reviewed in conjunction with our annual report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 19, 2025 (2024 Annual Report on Form 10-K).

The results of operations for interim periods are not necessarily indicative of the results that may be expected for the full fiscal year.

The Condensed Consolidated Financial Statements include the accounts of LP and our controlled subsidiaries.

All intercompany transactions, profits, and balances have been eliminated.

All dollar amounts included in tables in the Notes are in millions except per share amounts.

We disaggregate revenue from contracts with customers into major product lines.

We have determined that disaggregating revenue into these categories depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors.

As noted in the segment reporting information in “Note 15 - Selected Segment Data” below, our reportable segments are Siding, Oriented Strand Board (OSB), and LP South America (LPSA).

As noted in the segment reporting information in “Note 15.

Selected Segment Data” below, our reportable segments are Siding, Oriented Strand Board (OSB), and LP South America (LPSA).

The following tables present our reportable segment revenues, disaggregated by revenue source (dollar amounts in millions):

Three Months Ended September 30, 2024

By product type and family:

Siding OSB LPSA Other Total

Siding Solutions $ 418 $ — $ 6 $ — $ 423

OSB - Structural Solutions — 136 40 — 175

418 136 46 — 599

OSB - commodity — 112 — — 112

Other products 3 5 1 2 11

$ 420 $ 253 $ 47 $ 2 $ 722

Three Months Ended September 30, 2023

By product type and family:

Siding OSB LPSA Other Total

Siding Solutions $ 342 $ — $ 5 $ — $ 347

OSB - Structural Solutions — 174 40 — 213

342 174 44 — 560

OSB - commodity — 157 — — 157

Other products 2 5 — 4 11

$ 345 $ 335 $ 45 $ 4 $ 728

Nine Months Ended September 30, 2024

Three Months Ended March 31, 2025

By product type and family:

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$ 402 $ 267 $ 52 $ 2 $ 724

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2024

By product type and family:

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Estimates are based on historical and projected experience for each type of program or customer.

Volume allowances are accrued based on our estimates of customer volume achievement and other factors incorporated into customer agreements, such as new product purchases, store sell-through, merchandising support, and customer training.

Volume allowances are accrued based on our estimates of customer volume achievement and other factors

incorporated into customer agreements, such as new product purchases, store sell-through, merchandising support, and customer training.

Management adjusts accruals when circumstances indicate (typically as a result of a change in volume expectations).

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The following table sets forth the computation of basic and diluted earnings per share (dollar and share amounts in millions, except per share amounts):

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Net income attributed to LP $ 90 $ 118 $ 358 $ 119

Three Months Ended March 31,

Net Income $ 91 $ 108

Weighted average common shares outstanding - basic 70 72

1 unchanged sentence

Shares used for diluted earnings per share 70 72

Earnings per share:

Net income per share of common stock:

Basic $ 1.30 $ 1.49

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(i) recurring—measured on a periodic basis, and (ii) non-recurring—measured on an as-needed basis.

The net carrying value of the 3.625 % Senior Notes due in 2029 (2029 Senior Notes) was $ 347 million as of September 30, 2024 and December 31, 2023.

Based on market quotations, the fair value of the 2029 Senior Notes was estimated to be $ 333 million and $ 314 million as of September 30, 2024 and December 31, 2023, respectively.

There are three levels of inputs that may be used to measure fair value:

Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2 Quoted prices for similar assets or liabilities in active markets;

quoted prices for identical or similar assets or liabilities in inactive markets;

or valuations based on models where the significant inputs are observable or can be corroborated by observable market data.

Level 3 Valuations based on models where significant inputs are not observable.

Unobservable inputs are used when little or no market data is available and reflect the Company’s own assumptions about the assumptions market participants would use.

The Company's financial instruments consist of cash and cash equivalents, short-term receivables, trade payables, debt instruments, and trading securities.

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

The net carrying value of the 3.625 % Senior Notes due in 2029 (2029 Senior Notes) was $ 348 million as of March 31, 2025 and December 31, 2024.

Based on market quotations, the fair value of the 2029 Senior Notes was estimated to be $ 328 million and $ 323 million as of March 31, 2025 and December 31, 2024, respectively.

The 2029 Senior Notes and other long-term debt are categorized as Level 1 in the U.S.

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Fair values are based on trading activity among the Company’s lenders and the average bid and ask price is determined using published rates.

In November 2022, LP entered into a Second Amended and Restated Credit Agreement with American AgCredit, PCA, as administrative agent and sole lead arranger, and CoBank, ACB, as letter of credit issuer (the Credit Agreement), relating to its revolving credit facility (as amended, the Amended Credit Facility).

The Credit Agreement provides for the Amended Credit Facility in the principal amount of up to $ 550 million, with a $ 60 million sub-limit for letters of credit.

All loans under the Credit Agreement become due on November 29, 2028.

As of September 30, 2024, there were no outstanding borrowings under our Amended Credit Facility.

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

In March 2025, LP entered into that certain First Amendment to Second Amended and Restated Credit Agreement (the First Amendment) with American AgCredit, PCA, as administrative agent, CoBank, ACB, as letter of credit issuer, and the lenders and voting participants party thereto, which amends that certain Second Amended and Restated Credit Agreement (the Credit Agreement) that was entered into in November 2022.

The First Amendment amends the Credit Agreement to (1) increase the aggregate principal amount for the credit facility from $ 550 million to $ 750 million, (2) increase the sub-limit for letters of credit from $ 60 million to $ 75 million, (3) change the interest rate for revolving borrowing, (4) change the capitalization ratio limit, and (5) extend the maturity date to March 26, 2032.

As of March 31, 2025, there were no outstanding borrowings pursuant to the credit facility as amended by the First Amendment (the Amended Credit Facility).

Receivables consisted of the following (dollar amounts in millions):

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Trade receivables $ 138 $ 100

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Trade receivables are primarily generated by sales of our products to our wholesale and retail customers.

Other receivables as of September 30, 2024 and December 31, 2023 primarily consist of sales tax receivables, vendor rebates, and other miscellaneous receivables.

Other receivables as of March 31, 2025, and December 31, 2024, primarily consist of sales tax receivables, vendor rebates, and other miscellaneous receivables.

Inventories are valued at the lower of cost or net realizable value.

Inventory cost includes materials, labor, and operating overhead.

The major types of inventories (work in process is not material and is included in semi-finished inventory) are as follows (dollar amounts in millions):

September 30, 2024 December 31, 2023

The first-in, first-out or average cost methods are used to value our inventories as of March 31, 2025.

Inventory consisted of the following (dollar amounts in millions):

March 31, 2025 December 31, 2024

Logs $ 86 $ 64

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Total Inventories $ 399 $ 357

BUSINESS EXIT CREDITS AND CHARGES

During the second quarter of 2023, we ceased the manufacturing operations of Entekra Holdings, LLC (Entekra), an off-site framing operation previously reported within our “Other” category, which comprises other products that are not individually significant.

During the second quarter of 2024, the equity method investment held by Entekra sold substantially all of its net assets resulting in a $ 16 million distribution to LP and a gain of $ 11 million, which was recorded within equity in unconsolidated affiliate on the Condensed Consolidated Statements of Income.

Business exit credits and charges consisted of the following (dollar amounts in millions):

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Impairment of property, plant and equipment, operating lease assets, and other intangible assets 1

$ — $ — $ — $ ( 24 )

Gain on sale of assets from an equity method investment 2

Restructuring and other related charges:

Inventory write-down 3

Other expenses including personnel-related costs such as severance 4

— ( 1 ) 3 ( 4 )

$ — $ ( 1 ) $ 14 $ ( 35 )

1 Included within impairment of long-lived assets on the Condensed Consolidated Statements of Income.

2 Included within equity in unconsolidated affiliate on the Condensed Consolidated Statements of Income.

3 Included within cost of sales on the Condensed Consolidated Statements of Income.

4 Included within other operating credits and charges, net on the Condensed Consolidated Statements of Income.

GOODWILL AND OTHER INTANGIBLES

GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill and indefinite-lived intangible assets are not amortized and are subject to assessment for impairment by applying a fair value-based test on an annual basis, or more frequently if circumstances indicate a potential impairment.

The Company’s annual assessment date is October 1.

Changes in goodwill and other intangible assets for the nine months ended September 30, 2024 are provided in the following table (dollar amounts in millions):

Changes in goodwill and other intangible assets for the three months ended March 31, 2025 are provided in the following table (dollar amounts in millions):

Timber Licenses 1

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Amortization ( 1 ) — —

Ending balance September 30, 2024

Ending balance March 31, 2025

$ 22 $ 19 $ 7

1 Timber licenses are included in timber and timberlands on the Condensed Consolidated Balance Sheets.

ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities were as follows (dollars amounts in millions):

March 31, 2025 December 31, 2024

Trade accounts payable $ 146 $ 139

Salaries and wages payable 53 80

Accrued customer incentives 42 48

Taxes other than income taxes 9 4

Current portion of operating lease liabilities 8 8

Other accrued liabilities 6 9

Total Accounts payable and accrued liabilities $ 265 $ 287

Other accrued liabilities at March 31, 2025 and December 31, 2024, primarily consisted of accrued interest, worker compensation liabilities, warranty reserves, and other items.

Additionally, trade accounts payable included $ 12 million and $ 32 million related to capital expenditures that had not yet been paid as of March 31, 2025 and December 31, 2024, respectively.

For interim periods, we recognize income tax expense by applying the estimated annual effective income tax rate to year-to-date results unless this method does not result in a reliable estimate of year-to-date income tax expense.

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Changes in profitability estimates in various jurisdictions will impact our quarterly effective income tax rates.

T he provision for income taxes for the nine months ended September 30, 2024 and 2023 reflected an estimated annual effective tax rate of 25 % and 27 %, respectively, excluding discrete items discussed below.

The total tax provision for the three and nine months ended September 30, 2024 was $ 23 million and $ 117 million, respectively, compared to $ 44 million and $ 66 million for the comparable periods in 2023, respectively.

The total effective tax

rate for the three and nine months ended September 30, 2024 was 20 % and 25 %, respectively, compared to 27 % and 36 %, respectively, for the comparable period in 2023.

The year-to-date decrease in the effective tax rate was primarily a result of a discrete tax expense of $ 22 million recorded in the quarter ended June 30, 2023 relating to the change in indefinite reinvestment assertion on Chile and Brazil earnings.

During the nine months ended September 30, 2024, we recognized a $ 1 million net discrete tax benefit and during the nine months ended September 30, 2023, we recognized a net discrete tax expense of $ 16 million.

The current year net tax benefit related primarily to stock based compensation while the net discrete tax expense in the prior year primarily related to the $ 22 million second quarter expense recognized in connection with the change in management’s indefinite reinvestment assertion described in "Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

In 2021, the Organization for Economic Cooperation and Development (OECD) announced an Inclusive Framework on Base Erosion and Profit Shifting including Pillar Two Model Rules defining the global minimum tax, which establishes a global minimum effective tax rate of 15% for multinational enterprise groups with annual global revenue exceeding 750 million Euros.

On June 20, 2024, the Canadian government enacted legislation implementing aspects of the OECD’s minimum tax rules under the Pillar Two Framework, effective in 2024.

We considered the new Canadian legislation as part of our third quarter 2024 tax provision and concluded that (i) it had no impact on our consolidated financial statements for the nine months ended September 30, 2024, and (ii) we expect there to be no impact on our Consolidated Financial Statements for the year ending December 31, 2024.

The Canadian government issued draft legislative proposals in August of 2024 to implement remaining OECD Pillar Two framework enforcement mechanisms proposed to take effect in 2025 for calendar year companies.

No other jurisdictions in which LP operates have enacted Pillar Two legislation at this time.

The Company is continuously monitoring the expanding adoptions of Pillar Two legislation and assessing its potential impact on our future tax liability.

The provision for income taxes for the three months ended March 31, 2025, and 2024, reflected an estimated annual effective tax rate of 24 % and 25 %, respectively, excluding discrete items discussed below.

The total tax provision for the three months ended March 31, 2025, was $ 26 million, compared to $ 41 million for the comparable period in 2024.

The total effective tax rate for the three months ended March 31, 2025, was 22 %, compared to 28 % for the comparable period in 2024.

The decrease in the total effective tax rate primarily resulted from the discrete tax benefits and expenses discussed below.

During the three months ended March 31, 2025, we recognized a $ 3 million net discrete tax benefit, and during the three months ended March 31, 2024, we recognized a net discrete tax expense of $ 4 million.

The current year net tax benefit related primarily to inflationary and foreign currency exchange-related effects and stock-based compensation while the net discrete tax expense in the prior year primarily related to inflationary and foreign currency exchange-related effects.

In 2021, the Organization for Economic Cooperation and Development (OECD) announced an Inclusive Framework on Base Erosion and Profit Shifting including Pillar Two Model Rules (Pillar Two) applicable to large multinational corporations which would establish a global per-country minimum tax of 15%.

While the United States has not enacted legislation to adopt the Pillar Two framework and it is uncertain if it will do so in the future, certain countries in which we operate have enacted such legislation.

Specifically, the Canadian government enacted legislation in 2024 implementing aspects of the OECD’s minimum tax rules under the Pillar Two framework effective in the 2024 fiscal year and released draft legislation proposed to implement further aspects of the framework effective for the 2025 fiscal year.

In addition, in 2024, the Brazilian Congress approved legislation implementing a tax measure that took effect in 2025, that is largely aligned with certain aspects of the OECD’s minimum tax rules under the Pillar Two framework.

To date, no other jurisdictions in which LP operates have enacted Pillar Two legislation.

At this time, we do not expect Pillar Two legislation to have a material impact on our effective tax rate or our consolidated results of operations, financial position or cash flows.

The Company will continue to monitor future developments related to Pillar Two legislation to determine any potential impact in the countries in which we operate.

OTHER OPERATING AND NON-OPERATING ITEMS

Other operating credits and charges, net

Other operating credits and charges, net, is comprised of the following components (dollar amounts in millions):

Three Months Ended March 31,

Reorganization charges $ ( 1 ) $ ( 2 )

Legal settlement — 3

Loss on asset disposal ( 1 ) —

Other operating credits and charges, net $ ( 2 ) $ 1

Other non-operating items

Other non-operating items is comprised of the following components (dollar amounts in millions):

Three Months Ended March 31,

Foreign currency gain (loss) ( 5 ) 1

Other non-operating items $ ( 5 ) $ 1

IMPAIRMENT OF LONG-LIVED ASSETS

We review the carrying values of our long-lived assets for potential impairments and believe 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.

However, if demand and pricing for our products fall to levels significantly below cycle average demand and pricing, should we decide to invest capital in alternative projects, or should changes occur related to our wood supply for our mills, it is possible that future impairment charges will be required.

No impairment was recognized as of March 31, 2025.

We also review from time to time potential dispositions of various assets, considering current and anticipated economic and industry conditions, our strategic plan, and other relevant factors.

net cash flows, we may be required to record impairment charges in connection with decisions to dispose of such assets.

COMMITMENTS AND CONTINGENCIES

We maintain reserves for various contingent liabilities as follows (dollar amounts in millions):

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Environmental reserves $ 27 $ 28

Other reserves — —

Total contingencies 27 28

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Our estimates of our environmental loss contingencies are based on various assumptions and judgments, the specific nature of which varies based on 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 the 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.

These estimates typically reflect assumptions and judgments as to the probable nature, magnitude, and timing of the 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.

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From time to time, we and our subsidiaries are parties to certain legal proceedings arising in our ordinary course of business.

Based on the information currently available, management believes the resolution of such ongoing and future proceedings will not have a material effect on our financial position, results of operations, cash flows, or liquidity.

IMPAIRMENT OF LONG-LIVED ASSETS

We review the carrying values of our long-lived assets for potential impairments and believe we have adequate support for such carrying values.

If demand and pricing for our products fall to levels significantly below cycle average demand and pricing, should we decide to invest capital in alternative projects, or should changes occur related to our wood supply for our mills, it is possible that future impairment charges will be required.

As of September 30, 2024, there were no indicators of impairment.

We also review from time to time potential dispositions of various assets, considering 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.

Based on the information currently available, management does not believe that the resolution of such proceedings could reasonably be expected to have a material adverse effect on our financial position, results of operations, cash flows, or liquidity.

PRODUCT WARRANTIES

1 unchanged sentence

Such accruals are based upon historical experience and management’s estimate of the level of future claims.

The activity in warranty reserves for the three and nine months ended September 30, 2024 and 2023, is summarized in the following table (dollar amounts in millions):

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

The activity in warranty reserves for the three months ended March 31, 2025 and 2024, is summarized in the following table (dollar amounts in millions):

Three Months Ended March 31,

Beginning balance $ 6 $ 8

Change in warranty provision — 1

Payments made ( 1 ) — ( 1 ) ( 1 )

Total warranty reserves 6 8

1 unchanged sentence

Long-term portion of warranty reserves (included in other long-term liabilities) $ 5 $ 6

We continue to monitor warranty and other claims associated with our products and believe, as of September 30, 2024, that the warranty reserve balances associated with these matters are adequate to cover future warranty payments.

We continue to monitor warranty and other claims associated with our products and believe, as of March 31, 2025, that the warranty reserve balances associated with these matters are adequate to cover future warranty payments.

However, it is possible that additional changes may be required in the future.

ACCUMULATED COMPREHENSIVE LOSS

Accumulated comprehensive loss is provided in the following table for the three months ended September 30, 2024 and 2023 (dollar amounts in millions):

Translation Adjustments Other Total

Balance at June 30, 2024

$ ( 108 ) $ — $ ( 109 )

Translation adjustments 9 — 9

Balance at September 30, 2024

$ ( 100 ) $ — $ ( 100 )

Translation Adjustments Other Total

Balance at June 30, 2023

$ ( 78 ) $ ( 1 ) $ ( 78 )

Translation adjustments ( 19 ) — ( 19 )

Balance at September 30, 2023

$ ( 97 ) $ ( 1 ) $ ( 98 )

Accumulated comprehensive loss is provided in the following table for the nine months ended September 30, 2024 and 2023 (dollar amounts in millions):

Accumulated comprehensive loss is provided in the following table for the three months ended March 31, 2025 and 2024 (dollar amounts in millions):

Translation Adjustments Other Total

2 unchanged sentences

Translation adjustments 12 — 12

Balance at September 30, 2024

Balance at March 31, 2025

$ ( 110 ) $ — $ ( 110 )

2 unchanged sentences

$ ( 89 ) $ ( 1 ) $ ( 89 )

Reclassified to income statement, net of taxes 1

Translation adjustments ( 15 ) — ( 15 )

Balance at September 30, 2023

$ ( 97 ) $ ( 1 ) $ ( 98 )

1 Amounts of actuarial loss and prior service cost are components of net periodic benefit cost.

OTHER OPERATING AND NON-OPERATING ITEMS

Other operating credits and charges, net

Other operating credits and charges, net, is comprised of the following components (dollar amounts in millions):

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Reorganization charges $ ( 1 ) $ ( 2 ) $ ( 1 ) $ ( 9 )

Legal settlement — — 3 ( 16 )

Gain on asset sales — 6 — 6

Other — 1 — ( 1 )

Other operating credits and charges, net $ ( 1 ) $ 6 $ 2 $ ( 20 )

Other non-operating items

Other non-operating items is comprised of the following components (dollar amounts in millions):

Three Months Ended September 30, Nine Months Ended September 30,

Balance at March 31, 2024

$ ( 104 ) $ — $ ( 104 )

Pension settlement charges $ — $ — $ — $ ( 6 )

Foreign currency gain (loss) ( 4 ) — 2 ( 12 )

Other — — — 1

Other non-operating items $ ( 4 ) $ — $ 2 $ ( 17 )

SELECTED SEGMENT DATA

3 unchanged sentences

Our 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.

• Our Siding segment serves diverse end markets with a broad product offering, including LP ® SmartSide ® Trim & Siding, LP ® SmartSide ® ExpertFinish ® Trim & Siding, LP BuilderSeries ® Lap Siding, and LP ® Outdoor Building Solutions ® (collectively referred to as Siding Solutions).

Our Siding Solutions products consist of a full line of engineered wood siding, trim, soffit, and fascia.

• Our OSB segment manufactures and distributes OSB structural panel products, including the innovative value-added OSB product portfolio known as LP ® Structural Solutions (which includes LP TechShield ® Radiant Barrier, LP WeatherLogic ® Air & Water Barrier, LP Legacy ® Premium Sub-Flooring, LP NovaCore ® Thermal Insulated Sheathing, LP FlameBlock ® Fire-Rated Sheathing, and LP TopNotch ® 350 Durable Sub-Flooring).

OSB products are manufactured using wood strands arranged in layers and bonded with resins.

• Our LPSA segment manufactures and distributes LP OSB structural panel and Siding Solutions products in South America and certain export markets.

• The Siding segment serves diverse end markets with a broad product portfolio of engineered wood siding, trim, soffit, and fascia, including LP ® SmartSide ® Trim & Siding, LP ® SmartSide ® ExpertFinish ® Trim & Siding, LP BuilderSeries ® Lap Siding, and LP ® Outdoor Building Solutions ® (collectively referred to as Siding Solutions).

• The OSB segment manufactures and distributes OSB structural panel products, including the innovative value-added OSB product portfolio known as LP ® Structural Solutions (which includes LP ® TechShield ® Radiant Barrier, LP WeatherLogic ® Air & Water Barrier, LP Legacy ® Premium Sub-Flooring, LP NovaCore ® Thermal Insulated Sheathing, LP ® FlameBlock ® Fire-Rated Sheathing, and LP ® TopNotch ® 350 Durable Sub-Flooring).

• The LPSA segment manufactures and distributes OSB structural panel and Siding Solutions products in South America and certain export markets.

This segment also sells and distributes a variety of companion products to support the region’s transition to wood frame construction.

1 unchanged sentence

We evaluate the performance of our business segments based on net sales and segment Adjusted EBITDA.

Accordingly, our chief operating decision maker evaluates performance and allocates resources based primarily on net sales and segment Adjusted EBITDA for our business segments.

Segment Adjusted EBITDA is defined as income attributed to LP before interest expense, provision for income taxes, depreciation and amortization, and excludes stock-based compensation expense, loss on impairment attributed to LP, business exit credits and charges, product-line discontinuance charges, other operating credits and charges, net, loss on early debt extinguishment, investment income, pension settlement charges, and other non-operating items.

Accordingly, our chief operating decision maker, the chief executive officer, evaluates performance and allocates resources based primarily on net sales and segment Adjusted EBITDA for our business segments.

Segment Adjusted EBITDA is defined as income attributed to LP excluding interest expense, provision for income taxes, depreciation and amortization, stock-based compensation expense, loss on impairment attributed to LP, business exit credits and charges, product-line discontinuance charges, other operating credits and charges, net, loss on early debt extinguishment, investment income, pension settlement charges, other non-operating items, income from discontinued operations, net of income taxes, and net income attributed to noncontrolling interest.

Information about our business segments is as follows (dollar amounts in millions):

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

NET SALES BY BUSINESS SEGMENT

Siding $ 420 $ 345 $ 1,196 $ 996

OSB 253 335 917 754

LPSA 47 45 140 153

Other 2 4 7 21

Total sales $ 722 $ 728 $ 2,261 1,923

Three Months Ended March 31, 2025

Siding OSB LPSA Segment Total Other Consolidated

Net sales $ 402 $ 267 $ 52 $ 722 $ 2 $ 724

Cost of sales ( 276 ) ( 211 ) ( 37 ) ( 524 ) ( 3 ) ( 526 )

Selling, general, and administrative expenses ( 42 ) ( 16 ) ( 6 ) ( 64 ) ( 11 ) ( 75 )

Adjustments to Adjusted EBITDA:

Depreciation and Amortization 20 13 2 35 — 35

Other charges 1

Adjusted EBITDA $ 106 $ 54 $ 12 $ 172 $ ( 10 ) $ 162

Three Months Ended March 31, 2024

Siding OSB LPSA Segment Total Other Consolidated

Net sales $ 361 $ 313 $ 47 $ 721 $ 3 $ 724

Cost of sales ( 254 ) ( 219 ) ( 35 ) ( 508 ) ( 3 ) ( 511 )

Selling, general, and administrative expenses ( 36 ) ( 16 ) ( 5 ) ( 56 ) ( 13 ) ( 69 )

Adjustments to Adjusted EBITDA:

Depreciation and Amortization 18 11 2 31 — 31

Other charges 1

Adjusted EBITDA $ 90 $ 90 $ 10 $ 190 $ ( 8 ) $ 182

1 Other charges includes stock compensation and income from equity in unconsolidated affiliates.

Three Months Ended March 31,

NET INCOME TO ADJUSTED EBITDA RECONCILIATION

1 unchanged sentence

Add (deduct):

Net income attributed to non-controlling interest — — — —

Income attributed to LP 90 118 358 119

Provision for income taxes 26 41

1 unchanged sentence

Stock-based compensation expense 5 6

Loss on impairment attributed to LP — 1 — 1

Other operating credits and charges, net 2 —

Business exit credits and charges — 1 ( 14 ) 35

Business exit credits — ( 1 )

Interest expense 3 4

Investment income ( 4 ) ( 6 )

Pension settlement charges — — — 6

Other non-operating items 5 ( 1 )

Adjusted EBITDA $ 162 $ 182

SEGMENT ADJUSTED EBITDA

Information concerning identifiable assets by segment is as follows (dollar amounts in millions):

March 31, 2025 December 31, 2024

Identifiable Assets

Siding $ 1,352 $ 1,319

OSB 33 120 249 161

LPSA 9 6 29 31

Other 500 551

Corporate ( 9 ) ( 7 ) ( 26 ) ( 26 )

Adjusted EBITDA $ 153 $ 190 $ 564 $ 349

Total assets $ 2,570 $ 2,569

Other segment related assets include cash and cash equivalents, short-term and long-term investments, corporate assets, and other items.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements