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Item 7. Management’s Discussion and Analysis

2026-02-17 compared with 2025-02-19 · 107 added, 115 removed, 185 unchanged (55% of the section changed)

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This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our Consolidated Financial Statements and related Notes and other financial information appearing elsewhere in this annual report on Form 10-K, and with Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our annual report on Form 10-K for our fiscal year ended December 31, 2024, filed with the SEC on February 19, 2025, which provides a discussion of our financial condition and results of operations for fiscal year 2024 compared to fiscal year 2023.

The changes to our reportable segments in the current year did not have a material impact on our previously reported consolidated results of operations or financial position.

Prior‑period segment information has been recast to conform to the current period presentation.

The following discussion includes forward-looking statements that are based on the beliefs of our management, as well as assumptions made by, and information currently available to, our management.

We encourage you to review the risks and uncertainties described in the sections titled "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Statements" above.

We encourage you to review the risks and uncertainties described in the sections titled “Cautionary Statement Regarding Forward-Looking Statements” and “Risk Factors” above.

Our historical results are not necessarily indicative of the results that may be expected for any period in the future.

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We have leveraged our expertise serving the new home construction, repair and remodeling, and outdoor structures markets to become an industry leader known for innovation, quality, and reliability.

Our manufacturing facilities are located in the U.S., Canada, Chile, and Brazil.

To serve these markets, we operate in three segments:

Siding, OSB, and LPSA.

To serve these markets, we operate in two reportable segments:

Siding and OSB.

Executive Summary

Net sales for 2024 increased year-over-year by $360 million (or 14%) to $2.9 billion.

Siding revenue increased by $230 million (or 17%) to $1.6 billion due to 11% higher volumes and 6% higher prices.

OSB revenue increased by $159 million (or 15%) to $1.2 billion, due to 10% higher volumes and 4% higher prices.

Net income increased year-over-year by $243 million (or 137%) to $420 million ($5.89 per diluted share).

The increase primarily reflects a $210 million increase in Adjusted EBITDA, a $46 million improvement in business exit credits and charges, and the non-recurrence of OSB patent-related settlement claims of $16 million paid in 2023.

This was partially offset by a $66 million increase in the provision for income taxes.

The year-over-year increase in Adjusted EBITDA includes $143 million from higher Siding net sales, $55 million from higher OSB sales volumes, and $35 million due to higher OSB selling prices.

In 2025, net sales dropped year over year by $233 million to $2.7 billion.

Siding revenue increased by $131 million, or 8%, to $1.7 billion, attributable to 4% higher sales volumes and a 4% increase in prices.

OSB revenue fell by $352 million to $832 million, primarily due to lower prices and sales volumes.

Net income declined year over year by $275 million to $146 million ($2.08 per diluted share).

The primary drivers behind this decrease were a $252 million reduction in Adjusted EBITDA, and increases of $38 million in impairment charges, $24 million in foreign currency losses, $19 million in depreciation expense, and $10 million in stock-based compensation.

Additionally, the absence of $14 million in business exit credits recognized in 2024 and a $7 million decrease in investment income contributed to the overall decline.

These impacts were partially offset by a $90 million reduction in the tax provision.

The year-over-year decrease in Adjusted EBITDA was driven by several factors, including a $292 million adverse effect from lower OSB prices and reduced sales volumes, partially offset by $91 million from higher Siding sales volumes and improved sales mix.

In addition to price and volume impacts, the change in Adjusted EBITDA included increases of $11 million in marketing investments, $9 million in selling, general, and administrative expenses, $7 million of mill overhead and inventory absorption, and $8 million in tariff costs.

The remaining decrease in Adjusted EBITDA relates to a decline of $15 million in Other Adjusted EBITDA, which primarily includes LPSA, corporate, and other minor products and services.

Adjusted EBITDA is a non-GAAP Financial measure.

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Demand for our products correlates positively with new home construction and repair and remodeling activity in North America, which historically have been characterized by significant cyclicality.

Census Bureau reported on January 17, 2025, that 2024 actual single-family housing starts were 7% higher than those in 2023.

Actual multi-family housing starts in 2024 were about 25% lower than those in 2023.

Census Bureau published actual U.S.

housing starts data on January 9, 2026.

Census Bureau reported on January 9, 2026, that 2025 actual single-family housing starts were 6% lower than those in 2024.

Actual multi-family housing starts in 2025 were about 18% higher than those in 2024.

Repair and remodeling activity is difficult to reasonably measure, but many indications suggest that repair and remodeling activity has declined modestly year-over-year.

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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).

November and December 2025 housing starts have not yet been published by the U.S.

Census Bureau, and therefore, for the purpose of the chart above, we have used October 2025 housing starts previously published by the U.S.

Census Bureau as the November and December 2025 actual housing starts.

Supply and Demand for Siding

Our Siding Solutions products are specialty building materials and are subject to competition from various siding technologies, including vinyl, stucco, wood, fiber cement, brick, and others.

Our Siding products are specialty building materials and are subject to competition from various siding technologies, including vinyl, stucco, wood, fiber cement, brick, and others.

We believe we are the largest manufacturer of engineered wood siding in North America and South America.

The global siding market is estimated to be approximately $120 billion of annual expenditure.

We have consistently grown our Siding segment above the underlying market growth rates.

Our Siding segment is generally less sensitive to new housing market cyclicality since a majority of its demand comes from other markets, including off-site structure producers and repair and remodel.

Our growth in this market depends upon the continued displacement of vinyl, wood, fiber cement, stucco, bricks, and other alternatives, our product innovation and our technological expertise in wood and wood composites to address the needs of our customers.

We have consistently grown our Siding business above the underlying market growth rates.

Our Siding business is generally less sensitive to new housing market cyclicality since a majority of its demand comes from other markets, including off-site structure producers and repair and remodel.

Our growth in this market depends upon the continued displacement of vinyl, stucco, wood, fiber cement, brick, and other alternatives, our product innovation and our technological expertise in wood and wood composites to address the needs of our customers.

Supply and Demand for OSB

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In the event estimates or assumptions prove to be different from actual amounts, adjustments are made in subsequent periods to reflect more current information.

Our significant accounting policies are disclosed in the Consolidated Financial Statements and Item 8 of this annual report on Form 10-K.

Our significant accounting policies are disclosed in “Note 1 - Summary of Significant Accounting Policies” of the Notes to the Consolidated Financial Statements and included in Item 8 of this annual report on Form 10-K.

The following discussion addresses our most critical accounting policies, which are those that are both important to the portrayal of our financial condition and results of operations and that require significant judgment or use of complex estimates.

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Non-GAAP financial measures do not have standardized definitions and are not defined by U.S.

In this annual report on Form 10-K, we disclose income attributed to LP from continuing operations before interest expense, provision for income taxes, depreciation and amortization, and excluding 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, as Adjusted EBITDA from continuing operations (Adjusted EBITDA), which is a non-GAAP financial measure.

In this annual report on Form 10-K, we disclose net income excluding interest expense, provision for income taxes, depreciation and amortization, stock-based compensation expense, loss on impairment, 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 income (expense), income from discontinued operations, net of income taxes, and net income attributed to noncontrolling interest, as Adjusted EBITDA (Adjusted EBITDA), which is a non-GAAP financial measure.

We have included Adjusted EBITDA in this report because we view it as an important supplemental measure of our performance and believe that it is frequently used by interested persons in the evaluation of companies that have different financing and capital structures and/or tax rates.

We also disclose income attributed to LP from continuing operations, excluding loss on impairment attributed to LP, business exit credits and charges, product-line discontinuance charges, interest expense outside of normal operations, other operating credits and charges, net, loss on early debt extinguishment, gain (loss) on acquisition, and pension settlement charges, and adjusting for a normalized tax rate, as Adjusted Income from continuing operations (Adjusted Income).

We also disclose Adjusted Diluted EPS from continuing operations (Adjusted Diluted EPS), which is calculated as Adjusted Income divided by diluted shares outstanding.

We also disclose net income, excluding loss on impairment, business exit credits and charges, product-line discontinuance charges, interest expense outside of normal operations, other operating credits and charges, net, loss on early debt extinguishment, gain (loss) on acquisition, pension settlement charges, income from discontinued operations, net of income taxes, and net income attributed to noncontrolling interest, and adjusting for a normalized tax rate, as Adjusted Income (Adjusted Income), which is a non-GAAP financial measure.

In addition, we disclose Adjusted Diluted EPS, calculated as Adjusted Income divided by diluted shares outstanding (Adjusted Diluted EPS), which is a non-GAAP financial measure.

We believe that Adjusted Diluted EPS and Adjusted Income are useful measures for evaluating our ability to generate earnings and that providing these measures should allow interested persons to more readily compare the earnings for past and future periods.

Reconciliations of Adjusted EBITDA, Adjusted Income and Adjusted Diluted EPS to their most directly comparable U.S.

GAAP financial measures, net income, income attributed to LP and income attributed to LP per diluted share, respectively, are presented below.

GAAP financial measures, net income, and net income per share of common stock - diluted, respectively, are presented below.

Adjusted EBITDA, Adjusted Income, and Adjusted Diluted EPS are not substitutes for the U.S.

GAAP measures of net income, income attributed to LP from continuing operations, and income attributed to LP from continuing operations per diluted share, or for any other U.S.

GAAP measures of net income and net income per share of common stock - diluted or for any other U.S.

GAAP measures of operating performance.

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Adjusted EBITDA, Adjusted Income, and Adjusted Diluted EPS have material limitations as performance measures because they exclude items that are actually incurred or experienced in connection with the operation of our business.

The following table presents significant items by operating segment and reconciles net income to Adjusted EBITDA (dollar amounts in millions):

The following table presents significant items and reconciles net income to Adjusted EBITDA (dollar amounts in millions):

Year Ended December 31,

2025 2024 2023

Net income $ 146 $ 420 $ 178

Add (deduct):

Net loss attributed to non-controlling interest — — 3

Income from discontinued operations, net of income taxes — — (198)

Income attributed to LP from continuing operations $ 420 $ 178 $ 888

Provision for income taxes 50 140 74

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Stock-based compensation expense 30 20 13

Loss on impairment attributed to LP 5 6 1

Loss on impairment 44 5 6

Other operating credits and charges, net 6 8 18

Product-line discontinuance charges

Business exit credits and charges — (14) 32

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Investment income (16) (22) (18)

Other non-operating items (9) 39 15

Other non-operating expense (income) 15 (9) 39

Adjusted EBITDA $ 436 $ 688 $ 478

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OSB 7 298 220

LPSA 42 42 77

Other (15) — (11)

General corporate and other expenses, net (34) (36) (38)

Total Adjusted EBITDA $ 688 $ 478 $ 1,389

Adjusted EBITDA $ 436 $ 688 $ 478

The following table provides the reconciliation of net income to Adjusted Income (dollar amounts in millions, except earnings per share):

Year Ended December 31,

Net income attributed to LP from continuing operations per share - diluted $ 5.89 $ 2.46 $ 11.34

2025 2024 2023

Net income per share of common stock - diluted $ 2.08 $ 5.89 $ 2.46

Net income $ 146 $ 420 $ 178

Add (deduct):

Net loss attributed to non-controlling interest — — 3

Income from discontinued operations, net of income taxes — — (198)

Income attributed to LP from continuing operations 420 178 888

Loss on impairment attributed to LP 5 6 1

Loss on impairment 44 5 6

Other operating credits and charges, net 6 8 18

Product-line discontinuance charges

Business exit credits and charges — (14) 32

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Normalized tax provision at 25% 1

(62) (140) (78)

Adjusted Income

$ 185 $ 419 $ 233

Diluted shares outstanding 70 71 72

Adjusted Diluted EPS $ 2.65 $ 5.88 $ 3.22

1 We estimate a normalized effective tax rate of approximately 25%, reflecting the blended federal, state, and generally higher foreign tax rates applicable to our operations, though this rate may vary depending on our actual geographic mix of income and any unforeseen factors such as changes in tax legislation.

OUR OPERATING RESULTS

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 18 - Segment Information" of the Notes to the Consolidated Financial Statements included in Item 8 of this annual report on Form 10-K for further information regarding our segments.

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).

Segment net sales and Adjusted EBITDA for this segment were as follows:

Dollar amounts in millions Increase (decrease)

Year Ended December 31, 2024 2023 2024 - 2023

The Company conducts business through three operating segments:

Siding, OSB, and LP South America (LPSA).

In the fourth quarter of 2025, the Company determined that LPSA did not meet the reportable segment criteria and beginning with the fourth quarter of 2025, the financial information for the LPSA operating segment is included in Other.

These changes had no impact on our consolidated results of operations or financial position.

Prior period segment information has been recast to conform to our current presentation.

Our other operating segments, Siding and OSB remain reportable operating segments.

Other now comprises our South American operations and other products that are not individually significant.

See “Note 15 - Segment Information” of the Notes to the Consolidated Financial Statements included in Item 8 of this annual report on Form 10-K for further information regarding our reportable segments.

The results of operations for each of our reporting segments are discussed below, as are results of operations for Other.

The Siding segment serves diverse end markets with a broad product portfolio of engineered wood siding, trim, soffit, and fascia.

Our Siding is offered primed (LP ® SmartSide ® Trim & Siding, LP BuilderSeries ® Lap Siding, and LP ® Outdoor Building Solutions ® ) and pre-finished (LP ® SmartSide ® ExpertFinish ® Trim & Siding) to meet the needs of builders and installers in new construction and repair and remodeling applications.

Segment net sales and Adjusted EBITDA for this segment were as follows (dollar amounts in millions):

Year Ended December 31, Increase

2025 2024 2025 - 2024

Net sales $ 1,689 $ 1,558 8 %

Adjusted EBITDA 444 390 14 %

Net sales in this segment by product line were as follows:

Dollar amounts in millions Increase (decrease)

Net sales in this segment by product line were as follows (dollar amounts in millions):

Year Ended December 31,

Siding Solutions $ 1,549 $ 1,319 17 %

2025 2024 2025 - 2024

Siding $ 1,679 $ 1,549 8 %

Other 10 9 8 %

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Selling Price Unit

Siding Solutions 6 % 11 %

The year-over-year net sales increase for the Siding segment for the twelve months ended December 31, 2024 reflects increased sales volumes and higher average selling prices.

Approximately half of the 6% price improvement was the result of annual list price increases, and half due to favorable mix.

ExpertFinish accounted for 9% of volume and 13% of sales in the twelve months ended December 31, 2024, respectively, contributing significantly to this favorable mix.

For the twelve months ended December 31, 2024, the full year increase in Adjusted EBITDA of $121 million, primarily reflects the impact of the net sales increase, partially offset by ongoing investments in sales and marketing and maintenance costs.

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).

Siding 4 % 4 %

Siding net sales increased for the year ended December 31, 2025 due to higher sales volumes and selling prices.

Increases in the average sales price were primarily due to a combination of list price increases and favorable mix.

ExpertFinish accounted for 10% of sales volume and 16% of net sales for the year ended December 31, 2025, contributing significantly to this favorable mix.

For the year ended December 31, 2025, Adjusted EBITDA increased $54 million compared to prior-year.

This growth was driven by higher sales volume and higher selling prices of $91 million, partially offset by strategic investments in sales and marketing of $11 million, a $9 million increase of selling, general, and administrative expenses, $7 million of mill overhead and inventory absorption, and $7 million of tariff expenses.

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 ® FlameBlock ® Fire-Rated Sheathing, LP WeatherLogic ® Air & Water Barrier, LP ® TechShield ® Radiant Barrier, LP Legacy ® Premium Sub-Flooring, and LP ® TopNotch ® 350 Durable Sub-Flooring).

Significant cost inputs to produce OSB (including approximate breakdown percentages for 2025) were as follows:

wood fiber (26%), resin and wax (20%), labor and burden (20%), utilities (5%), and other manufacturing costs (29%).

Segment net sales and Adjusted EBITDA for this segment were as follows:

Dollar amounts in millions Increase (decrease)

Segment net sales and Adjusted EBITDA for this segment were as follows (dollar amounts in millions):

Year Ended December 31,

2025 2024 2025 - 2024

Net sales $ 832 $ 1,184 (30) %

Adjusted EBITDA 7 298 (98) %

Net sales in this segment by product line were as follows:

Dollar amounts in millions Increase (decrease)

Net sales in this segment by product line were as follows (dollar amounts in millions):

Year Ended December 31,

2025 2024 2025 - 2024

OSB - Structural Solutions $ 472 $ 650 (27) %

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OSB - Commodity (26) % (8) %

For the twelve months ended December 31, 2024, the year-over-year increase in net sales of $159 million (or 15%), reflecting an increase in revenue due to 10% higher sales volumes and 4% higher OSB selling prices.

Adjusted EBITDA for the twelve months ended December 31, 2024 increased year-over-year by $78 million, reflecting the impact of higher average selling prices and volumes.

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.

The LPSA segment carries out manufacturing operations in Chile and Brazil and operates sales offices in Argentina, Brazil, Chile, Colombia, Mexico, Paraguay, and Peru.

Segment net sales and Adjusted EBITDA for this segment were as follows:

Dollar amounts in millions Increase (decrease)

Year Ended December 31, 2024 2023 2024 - 2023

Net sales $ 190 $ 205 (8) %

Adjusted EBITDA 42 42 — %

Net sales in this segment by product were as follows:

Dollar amounts in millions Increase (decrease)

Year Ended December 31, 2024 2023 2024 - 2023

OSB - Structural Solutions $ 163 $ 177 (8) %

Siding Solutions

Other 6 4 61 %

Total $ 190 $ 205

Percent changes in average net sales prices and unit shipments for 2024 compared to 2023 were as follows:

2024 versus 2023

Selling Price Unit

OSB (16) % 9 %

Siding (18) % 6 %

The year-over-year net sales decrease and flat Adjusted EBITDA for the twelve months ended December 31, 2024, reflect lower selling prices and unfavorable currency fluctuations, partially offset by higher sales volumes and the non-recurrence of equipment transfer costs from the prior year.

Our other products segment includes timber and timberlands as well as other minor products, services, and closed operations, which do not qualify as discontinued operations.

During the second quarter of 2023, we announced the shutdown of our off-site framing operation Entekra Holdings LLC (Entekra) and recognized business exit charges, net of $(32) million for the twelve months ended December 31, 2023.

These 2023 charges consisted of severance costs, inventory obsolescence, impairment of property, plant, and equipment, impairment of right-of-use lease assets, and impairment of definite-lived intangible assets.

During 2024, the equity method investment held by Entekra sold substantially all of its net assets.

For the twelve months ended December 31, 2024, we recognized business exit credits, net of $14 million as a result of an $11 million gain on investment recorded within equity in unconsolidated affiliate on the Consolidated Statements of Income.

Net sales decreased year-over-year by $12 million (or 56%) to $9 million primarily due to lower Entekra sales volumes as a result of the aforementioned shutdown.

Adjusted EBITDA was $(8) million for 2024, as compared to $(17) million in 2023.

For the year ended December 31, 2025, net sales decreased by $352 million due to a $260 million decrease in OSB prices and an $84 million decrease in sales volumes.

Adjusted EBITDA for the year ended December 31, 2025 decreased year-over-year by $291 million, due to lower average prices and sales volumes.

Our other operations include our LPSA business that manufactures and distributes OSB structural panels and siding products in South America and certain export markets.

Previously, all LPSA activity was presented as a separate reportable segment.

Financial information related to LPSA is now included in Other.

Additionally, Other includes unallocated corporate expenses, such as general administrative costs and stock-based compensation, along with other minor products, services, and closed operations that do not meet the criteria for discontinued operations.

For the year ended December 31, 2025, net sales and Adjusted EBITDA decreased year over year by $12 million and $15 million, respectively.

GENERAL CORPORATE AND OTHER EXPENSE, NET

General corporate and other expenses primarily comprise corporate overhead unrelated to business activities such as wages and benefits, professional fees, insurance, and other expenses for corporate functions, including certain executive officers, public company activities, tax, internal audits, and other corporate functions.

General corporate and other expenses are primarily comprised of corporate overhead unrelated to business activities such as wages and benefits, professional fees, insurance, and other expenses for corporate functions, including executive officers, public company activities, tax, internal audits, and other corporate functions.

General corporate and other expense, net, was $51 million in 2025, as compared to $46 million in 2024.

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LOSS ON IMPAIRMENTS

During 2024, we recorded $5 million of non-cash, pre-tax impairment charges related to property, plant, and equipment, at our Wawa facility.

During 2023, we recorded $30 million of non-cash, pre-tax impairment charges, $24 million of which was related to the shutdown of Entekra, including $13 million of property, plant, and equipment, $9 million of intangible assets, and $3 million related to operating lease assets.

See further discussion in “Note 7 - Business Exit Credits and Charges” of the Notes to the Consolidated Financial Statements included in Item 8 of this annual report on Form 10-K.

Further, $6 million of non-cash, pre-tax impairment charges were recognized related to the Granite City, Illinois facility closure, including $4 million of property, plant, and equipment and $2 million related to operating lease assets.

During 2025, we recorded $44 million of non-cash, pre-tax impairment charges.

These charges included $24 million related to equipment that will not be utilized in future operations, $13 million related to the expiration and non-renewal of certain timber licenses, $4 million related to property, plant, and equipment associated with a facility closure, and $2 million primarily related to an operating lease asset associated with a previously closed facility.

During 2024, we recorded $5 million of non-cash, pre-tax impairment charges related to property, plant, and equipment that will not be utilized in future operations.

See further discussion in “Note 11 - Impairment of Long-Lived Assets” and “Note 1 - Summary of Significant Accounting Policies” of the Notes to the Consolidated Financial Statements included in Item 8 of this annual report on Form 10-K.

OTHER OPERATING CREDITS AND CHARGES, NET

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For 2025, the primary differences between the U.S.

statutory rate of 21% and the effective rate was related to state and foreign income taxes.

statutory rate of 21% and the effective rate was related to state and foreign income taxes, partially offset by changes in uncertain tax positions.

For 2024, the primary difference between the U.S.

statutory rate of 21% and the effective tax rate was related to a change in management’s intent to indefinitely reinvest undistributed earnings in Chile and Brazil.

See “Note 8 – Income Taxes” below for further discussion.

statutory rate of 21% and the effective tax rate was related to state and foreign income taxes.

See “Note 6 – Income Taxes” of the Notes to the Consolidated Financial Statements included in Item 8 of this annual report on Form 10-K for further discussion.

We paid $42 million and $124 million of income taxes net of refunds in 2025 and 2024, respectively.

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During 2025, we generated $382 million of cash from operations, as compared to $605 million in 2024.

The increase in cash provided by operations was primarily related to higher net income and changes in working capital.

The decrease in cash provided by operations was primarily related to lower net income.

At December 31, 2025 and 2024, we had working capital of $227 million and $216 million, respectively.

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During 2025, net cash used for investing activities was $291 million, as compared to $183 million in 2024.

Capital expenditures for the year ended December 31, 2025, and 2024, were $291 million and $183 million, respectively, primarily related to siding conversion expenditures and growth and maintenance capital.

During 2024, we received $16 million in proceeds from our share of the sale of certain assets from an equity method investment.

We also paid $17 million for an equity method investment in South America.

During 2023, we paid $80 million to acquire an idle manufacturing facility in Wawa, Ontario, Canada.

Capital expenditures for the year ended December 31, 2024, and 2023, were $183 million and $300 million, respectively, primarily related to siding conversion expenditures and growth and maintenance capital.

Capital expenditures in 2026 are expected to be approximately $400 million.

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During 2025, cash used in financing activities was $141 million.

We paid cash dividends of $74 million and $212 million to repurchase shares of LP common stock under the 2022 Share Repurchase Program and 2024 Share Repurchase Program during the year ended December 31, 2024.

The remaining financing activities were primarily related to funds used to repurchase stock from employees in connection with income tax withholding requirements associated with our employee stock-based compensation plans.

We paid cash dividends of $78 million and $61 million to repurchase shares of LP common stock under the 2024 Share Repurchase Program during the year ended December 31, 2025.

The remaining financing activities were primarily related to income tax withholding requirements associated with our employee stock-based compensation plans.

During 2024, cash used in financing activities was $292 million.

We paid cash dividends of $69 million and borrowed and subsequently repaid $80 million from our Amended Credit Facility during the year ended December 31, 2023.

We paid cash dividends of $74 million and $212 million to repurchase shares of LP common stock under the share repurchase programs authorized by LP's Board of Directors in 2022 and 2024, respectively, during the year ended December 31, 2024.

The remaining financing activities were primarily related to income tax withholding requirements associated with our employee stock-based compensation plans.

CREDIT FACILITIES

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

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

The Credit Agreement amended and restated the Amended and Restated Credit Agreement entered into by the Company and certain other parties dated as of June 27, 2019, as amended prior to the effectiveness of the Credit Agreement (as defined above), in its entirety to, among other things, (i) reflect the release of the collateral that secures the indebtedness evidenced by the Credit Agreement as a result of the Company’s obtaining an Investment Grade rating in November 2022 (which collateral may be reinstated from time to time in accordance with the terms of the Credit Agreement), (ii) extend the maturity date to November 29, 2028, (iii) make certain changes to effect a transition from the LIBOR interest rate benchmark to Term SOFR Rate (as defined in the Credit Agreement) and (iv) provide for certain other modifications (including modifications to certain basket and threshold levels in the negative covenants) as set forth in the Credit Agreement.

As of December 31, 2024, we had no amounts outstanding under the Amended Credit Facility.

The Credit Agreement contains various restrictive covenants and customary events of default, the occurrence of which could result in the acceleration of our obligation to repay the indebtedness outstanding thereunder.

The Credit Agreement also contains certain financial covenants that, among other things, require us and our consolidated subsidiaries to have, as of the end of each fiscal quarter, a capitalization ratio ( i.e.

On March 26, 2025, LP entered into the 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 amended the Credit Agreement (the Amended Credit Agreement) to (1) increase the aggregate principal amount for the credit facility (the Amended 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 December 31, 2025, we had no outstanding borrowings pursuant to the Amended Credit Facility.

The Amended Credit Agreement contains various restrictive covenants and customary events of default, the occurrence of which could result in the acceleration of our obligation to repay the indebtedness outstanding thereunder.

The Amended Credit Agreement also contains certain financial covenants that, among other things, require us and our consolidated subsidiaries to have, as of the end of each fiscal quarter, a capitalization ratio ( i.e.

, funded debt less unrestricted cash to total capitalization) of no more than 65%.

As of December 31, 2024, we were in compliance with all financial covenants under the Credit Agreement.

In May 2024, LP entered into a new letter of credit facility agreement, replacing the letter of credit facility agreement dated May 2020.

This agreement provides for the funding of letters of credit up to an aggregate outstanding amount of $20 million, which may be secured by certain cash collateral of LP (the Letter of Credit Facility).

The Letter of Credit Facility provides for a letter of credit fee, due quarterly, ranging from 1.000% to 1.875% of the daily available amount to be drawn on each letter of credit issued under the Letter of Credit Facility.

The Letter of Credit Facility is subject to similar affirmative, negative, and financial covenants as those set forth in the Credit Agreement, including the capitalization ratio covenant.

As of December 31, 2025, we were in compliance with all financial covenants under the Amended Credit Agreement.

In May 2024, LP entered into a new letter of credit facility agreement (the LOC Facility Agreement), replacing the letter of credit facility agreement dated May 2020.

The LOC Facility Agreement provides for the funding of letters of credit up to an aggregate outstanding amount of $20 million, which may be secured by certain cash collateral of LP (the Letter of Credit Facility).

The LOC Facility Agreement provides for a letter of credit fee, due quarterly, ranging from 1.000% to 1.875% of the daily available amount to be drawn on each letter of credit issued under the Letter of Credit Facility.

The LOC Facility Agreement contains similar affirmative, negative, and financial covenants as those set forth in the Amended Credit Agreement, including the capitalization ratio covenant.

All amounts outstanding under the Letter of Credit Facility become due on April 15, 2029.

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2029 Senior Notes

In March 2021, we issued the 3.625% Senior notes due in 2029 in the aggregate principal amount of $350 million, which mature on March 15, 2029 (2029 Senior Notes).

In March 2021, we issued the 3.625% Senior Notes due in 2029 in the aggregate principal amount of $350 million, which mature on March 15, 2029 (the 2029 Senior Notes).

As of December 31, 2025, future interest payments associated with the 2029 Senior Notes totaled $41 million, with $13 million payable within 12 months of such date.

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Off-Balance Sheet Arrangements

As of December 31, 2024, we had standby letters of credit of $14 million outstanding related to collateral for environmental impact on owned properties, deposit for forestry license, and insurance collateral, including workers' compensation.

As of December 31, 2025, we had standby letters of credit of $14 million outstanding related to collateral for environmental impact on owned properties, a deposit for forestry license, and insurance collateral, including workers’ compensation.

Potential Impairments

For a discussion of potential impairments, see "Note 13 - Impairment of Long-Lived Assets" and "Note 5 - Goodwill and Other Intangibles Assets" of the Notes to the Consolidated Financial Statements included in Item 8 of this annual report on Form 10-K.

For a discussion of potential impairments, see “Note 11 - Impairment of Long-Lived Assets” and “Note 1 - Summary of Significant Accounting Policies” of the Notes to the Consolidated Financial Statements included in Item 8 of this annual report on Form 10-K.

PROSPECTIVE ACCOUNTING PRONOUNCEMENTS

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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-K

Item 7. Management’s Discussion and Analysis