What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-06 compared with 2025-11-05 · 101 added, 159 removed, 141 unchanged (65% of the section changed)

6 unchanged sentences

We are a leading provider of high-performance building solutions that meet the demands of builders, remodelers, and homeowners worldwide.

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.

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, reliability, and sustainability.

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

To serve these markets, we operate in three segments:

Siding, Oriented Strand Board (OSB), and LP South America (LPSA).

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

Siding and Oriented Strand Board (OSB).

Demand for Building Products

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

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

Census Bureau published actual U.S.

housing starts data on September 17, 2025.

September 2025 housing starts have not yet been published by the U.S.

Census Bureau, and therefore, we have calculated September housing starts as the average of July and August 2025 actual housing starts.

Actual single-family housing starts were approximately 4% and 5% lower, respectively, for the three and nine months ended September 30, 2025, as compared to the same periods in 2024.

Actual multi-family housing starts for the three and nine months ended September 30, 2025, were approximately 24% and 20% higher, respectively, as compared to the same periods in 2024.

Repair and remodeling activity is difficult to reasonably measure, but the general sentiment among repair and remodeling contractors is more cautious than expected earlier in the year.

Future economic conditions in the United States and the demand for homes are uncertain due to various macroeconomic factors, including interest rates, employment levels, changing trade policy in various jurisdictions (including the imposition of trade barriers, new tariffs and the modification of existing tariffs), consumer confidence, and financial markets, among other things.

Additionally, we have experienced increases in material prices, supply disruptions, and labor challenges, which we continue to address as we work to meet the demands of builders, remodelers, and homeowners worldwide.

The international trade landscape has been extremely volatile in recent periods.

Earlier this year, the U.S.

government announced significant changes to U.S.

trade policy, including the implementation or planned imposition of new or increased tariffs and trade barriers on a broad range of goods imported from international markets, including Canada and China, as well as the potential modification or termination of existing trade agreements between the U.S.

and certain other countries.

In response, certain countries have imposed, or are considering, retaliatory tariffs on U.S.

The global tariff landscape continues to shift rapidly, with changes impacting businesses and markets around the world.

These changes could negatively affect our sales and our competitive position within the U.S.

market and in markets outside the U.S.

Further, changing trade policy in the U.S.

and other countries, particularly Canada and China, could continue to increase the cost of certain raw materials or components that are critical to our manufacturing process, which could have a material negative impact on our manufacturing costs and our overall financial performance.

While we are actively exploring opportunities to mitigate these increased costs, there can be no guarantee that we will be able to achieve successful mitigation strategies or meaningfully offset the financial impact of new or increased tariffs, or other adverse changes to trade policy, in the U.S.

or other countries.

In the nine months ended September 30, 2025, our cost of sales in the Siding segment was negatively impacted by $7 million related to new or increased tariffs.

Based on a preliminary analysis of the potential effects of the tariffs that are currently in force in the United States, as well as in other markets where we operate, we estimate that we could incur potential incremental costs of approximately $8 million in 2025, most of which would likely be incurred by the Siding segment.

The potential impact of these factors on our future operational and financial performance is uncertain.

As a result, our past performance may not be indicative of future results.

housing starts data on April 29, 2026.

Actual single-family housing starts were approximately 6% lower for the three months ended March 31, 2026, as compared to the same period in 2025.

Actual multi-family housing starts for the three months ended March 31, 2026, were approximately 19% higher as compared to the same period in 2025.

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

Future economic conditions in the United States and the demand for homes are uncertain due to various macroeconomic factors, including interest rates, employment levels, changing trade policy in various jurisdictions, consumer confidence, and financial markets, among other things.

Additionally, we have experienced fluctuating material prices, supply disruptions, and labor challenges, which we continue to address as we work to meet the demands of builders, remodelers, and homeowners worldwide.

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 and cladding 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.

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Non-GAAP Financial Measures and Other Key Performance Indicators

In evaluating our business, we utilize non-GAAP financial measures that fall within the meaning of SEC Regulation G and Regulation S-K Item 10(e), which we believe provide users of the financial information with additional meaningful comparison to prior reported results.

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

In this quarterly report on Form 10-Q, we disclose net income 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, as Adjusted EBITDA (Adjusted EBITDA), which is a non-GAAP financial measure.

When evaluating the Company's performance on a GAAP basis, management utilizes certain non-GAAP financial measures as defined by SEC Regulation G and Regulation S-K Item 10(e).

These measures exclude the impact of specific costs, expenses, gains, and losses to evaluate our overall operating performance.

Management believes these non-GAAP measures provide users of the financial information with additional meaningful comparison to prior periods, as they generally exclude items that are outside of the normal course of our business or beyond management's control.

It is important to note that non-GAAP financial measures do not have standardized definitions and are not defined by U.S.

In this quarterly report on Form 10-Q, Adjusted EBITDA, Adjusted Income, and Adjusted Diluted EPS (as each defined below) are non-GAAP measures that are used by management and external users of our condensed consolidated financial statements such as investors, industry analysts, and lenders.

Adjusted EBITDA is defined as 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.

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 net income 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, 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, which is calculated as Adjusted Income divided by diluted shares outstanding (Adjusted Diluted EPS).

Adjusted Income is defined as 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, net income attributed to noncontrolling interest, foreign currency gains and losses, and adjusting for a normalized tax rate.

Adjusted Diluted EPS is calculated as Adjusted Income divided by diluted shares outstanding, 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.

During the first quarter of 2026, the Company updated the definition of Adjusted Income to exclude foreign currency gains and losses.

These gains and losses primarily arise from the remeasurement of all monetary assets and liabilities including intercompany notes that are denominated in a different currency than the entity's functional currency.

The exclusion of these items helps management compare changes in operating results between periods that might otherwise be obscured due to currency fluctuations.

The Company believes this exclusion provides investors with a clearer view of underlying operating performance by removing the effects of currency fluctuations that are largely outside of the Company's control and do not reflect its core business activities.

For comparability and consistency, all prior period Adjusted Income and Adjusted Diluted EPS measures have been recast to conform to the current presentation.

The impact of this update for the three months ended March 31, 2025, resulted in an increase to Adjusted Income and Adjusted Diluted EPS of $4 million and $0.06, respectively.

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

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

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

2025 2024 2025 2024

Three Months Ended March 31,

Net income $ 27 $ 91

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Stock-based compensation expense 7 5

Loss on impairment 13 — 31 —

Other operating credits and charges, net 2 2

Business exit credits and charges 1 — 1 (14)

Product-line discontinuance charges 1 —

Interest expense 4 3

Investment income (2) (4)

Other non-operating items 1 4 13 (2)

Other non-operating expense (income) (3) 5

Adjusted EBITDA $ 82 $ 162

ADJUSTED EBITDA BY SEGMENT

Siding $ 101 $ 106

OSB (27) 33 46 249

LPSA 5 9 25 29

Other (13) (12) (33) (32)

Adjusted EBITDA $ 82 $ 162

The following table reconciles net income to Adjusted Income (dollar amounts in millions, except per share amounts):

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

2025 2024 2025 2024

Three Months Ended March 31,

Net income per share of common stock - diluted $ 0.39 $ 1.30

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Add (deduct):

Loss on impairment 13 — 31 —

Other operating credits and charges, net 2 2

Business exit credits and charges 1 — 1 (14)

Product-line discontinuance charges 1 —

Foreign currency (gain) loss (3) 5

Reported tax provision 9 26

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Other companies may present housing start data differently, and therefore, as presented by us, our housing start data may not be comparable to similarly titled performance indicators reported by other companies.

The following table sets forth housing starts for the three and nine months ended September 30, 2025 and 2024 (in thousands):

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

2025 2024 2025 2024

The following table sets forth housing starts for the three months ended March 31, 2026 and 2025 (in thousands):

Three Months Ended March 31,

Housing starts 1 :

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Multi-Family 106 89

365 353 1,057 1,045

1 Actual U.S.

housing starts data, in thousands, reported by the U.S.

Census Bureau as published through September 17, 2025.

September 2025 housing starts have not yet been published by the U.S.

Census Bureau, and therefore, we have calculated September housing starts as the average of July and August 2025 actual housing starts.

We monitor sales volumes for our products in our Siding, OSB, and LPSA segments, which we define as the amount of our products sold within the applicable period measured in million square feet (MMSF) on a standard 3/8" thickness basis.

Census Bureau as published through April 29, 2026.

We monitor sales volumes for our products in our Siding and OSB segments, which we define as the amount of our products sold within the applicable period measured in million square feet (MMSF) on a standard 3/8" thickness basis.

Evaluating sales volume by product type helps us identify and address changes in product demand, broad market factors that may affect our performance, and opportunities for future growth.

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We believe that sales volumes can be a useful measure for evaluating and understanding our business.

The following table sets forth sales volumes for the three and nine months ended September 30, 2025 and 2024 (in MMSF):

Three Months Ended September 30, 2025 Three Months Ended September 30, 2024

Sales Volume Siding OSB LPSA Total Siding OSB LPSA Total

Siding Solutions

461 — 35 496 460 — 11 470

OSB - Structural Solutions

— 379 121 500 — 402 130 532

OSB - commodity

— 376 — 376 — 431 — 431

Nine Months Ended September 30, 2025 Nine Months Ended September 30, 2024

Sales Volume Siding OSB LPSA Total Siding OSB LPSA Total

Siding Solutions

1,393 — 53 1,446 1,318 — 29 1,347

The following table sets forth sales volumes for the three months ended March 31, 2026 and 2025 (in MMSF):

Three Months Ended March 31,

Total Siding sales volume

OSB - Structural Solutions

— 1,227 400 1,627 — 1,297 397 1,693

OSB - Commodity 374 426

— 1,232 — 1,232 — 1,261 — 1,261

Total OSB sales volume

We measure OEE of each of our mills to track improvements in the utilization and productivity of our manufacturing assets.

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It should be noted that other companies may present OEE data differently, and therefore, as presented by us, OEE data may not be comparable to similarly titled measures reported by other companies.

OEE for the three and nine months ended September 30, 2025 and 2024, for each of our segments is listed below:

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

2025 2024 2025 2024

OEE for the three months ended March 31, 2026 and 2025, for each of our reportable segments is listed below:

Three Months Ended March 31,

Siding 83 % 80 %

OSB 79 % 77 %

LPSA 72 % 68 % 69 % 73 %

Results of Operations

Our results of operations for each of our segments are discussed below, as are the results of operations for the “Other” category, which comprises other products that are not individually significant.

The Company conducts business through two reportable segments:

Siding and OSB.

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

See “Note 11.

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Financial Statements” of this quarterly report on Form 10-Q 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).

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 prefinished (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):

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

2025 2024 % Change 2025 2024 % Change

Three Months Ended March 31,

2026 2025 % Change

Net sales $ 360 $ 402 (10) %

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

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

2025 2024 % Change 2025 2024 % Change

Siding Solutions $ 440 $ 418 5 % $ 1,298 $ 1,190 9 %

Other 2 3 (11) % 7 7 8 %

Total $ 443 $ 420 5 % $ 1,305 $ 1,196 9 %

Percent changes in average net sales prices and unit shipments for the three and nine months ended September 30, 2025, compared to the corresponding periods in 2024, were as follows:

Three Months Ended March 31,

2026 2025 % Change

$ 359 $ 400 (10) %

$ 360 $ 402 (10) %

Percent changes in average net sales prices and unit shipments for the three months ended March 31, 2026, compared to the corresponding period in 2025, were as follows:

Three Months Ended

September 30, 2025 versus 2024 Nine Months Ended

September 30, 2025 versus 2024

Selling Price Unit

Shipments Average Net

March 31, 2026 versus 2025

Selling Price Unit

Siding Solutions 5 % — % 3 % 6 %

For the three and nine months ended September 30, 2025, Siding net sales increased year over year by $22 million and $108 million, respectively, reflecting higher selling prices.

The nine-month increase also included a benefit from higher sales volume.

Within the Siding segment, ExpertFinish ® net sales increased by 31% and 24% for the three and nine months ended September 30, 2025, respectively, compared to the prior-year periods.

Adjusted EBITDA for the Siding segment decreased year over year by $6 million for the three months ended September 30, 2025, with improved pricing of $18 million more than offset by $13 million mill overhead and inventory absorption, $5 million of strategic investments in sales and marketing, $3 million of SG&A, and $2 million of tariff expenses.

Adjusted EBITDA increased $30 million for the nine months ended September 30, 2025, compared to the prior-year period.

This growth was driven by higher sales volume and higher selling prices of $70 million, partially offset by strategic investments in sales and marketing of $12 million, $13 million of mill overhead and inventory absorption, $7 million of tariff expenses, and $5 million of SG&A.

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

For the three months ended March 31, 2026, Siding net sales decreased year over year by $42 million reflecting higher prices offset by lower volumes.

The increase in pricing was attributable to the annual price increase, favorable sales mix, and a slight reduction in rebate expense compared to the prior year.

Adjusted EBITDA for the Siding segment decreased year over year by $5 million, with pricing improvements contributing $27 million, which were more than offset by $35 million of lower volumes.

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 BurnGuard™ FRT OSB, LP WeatherLogic ® Air & Water Barrier, LP ® TechShield ® Radiant Barrier Sheathing, LP Legacy ® Premium Sub-Flooring, and LP ® TopNotch ® 350 Durable Sub-Flooring).

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

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

2025 2024 % Change 2025 2024 % Change

Three Months Ended March 31,

2026 2025 % Change

Net sales $ 168 $ 267 (37) %

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

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

2025 2024 % Change 2025 2024 % Change

Three Months Ended March 31,

2026 2025 % Change

OSB - Structural Solutions $ 92 $ 143 (36) %

OSB - Commodity

73 120 (39) %

Other 3 5 (34) %

Total $ 168 $ 267 (37) %

Percent changes in average net sales prices and unit shipments for the three and nine months ended September 30, 2025, compared to the corresponding periods in 2024, were as follows:

Percent changes in average net sales prices and unit shipments for the three months ended March 31, 2026, compared to the corresponding period in 2025, were as follows:

Three Months Ended

September 30, 2025 versus 2024

Nine Months Ended

September 30, 2025 versus 2024

Selling Price Unit

Shipments Average Net

March 31, 2026 versus 2025

Selling Price Unit

1 unchanged sentence

OSB - Commodity

For the three and nine months ended September 30, 2025, OSB net sales decreased year over year by $74 million and $221 million, respectively.

These decreases were primarily driven by lower OSB prices and a decline in sales volume.

Adjusted EBITDA for the OSB segment for the same periods decreased year over year by $60 million and $203 million, respectively, also reflecting the impact of lower OSB prices and a decline in sales volume.

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):

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

2025 2024 % Change 2025 2024 % Change

Net sales $ 39 $ 47 (17) % $ 134 $ 140 (4) %

Adjusted EBITDA 5 9 (50) % 25 29 (13) %

For the three and nine months ended September 30, 2025, net sales decreased year over year by $8 million and $6 million, respectively, primarily due to lower OSB prices.

For the three and nine months ended September 30, 2025, Adjusted EBITDA decreased by $5 million and $4 million year over year, respectively, primarily due to lower OSB prices.

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

Additionally, this segment includes corporate expenses that are not allocated, such as general administrative costs and stock-based compensation.

During 2024, the equity method investment held by Entekra Holdings LLC, our off-site framing operation, sold substantially all of its net assets.

Other net sales were $2 million and $6 million for the three and nine months ended September 30, 2025, respectively, as compared to $2 million and $7 million for the corresponding periods in 2024, respectively.

Adjusted EBITDA was $(13) million and $(33) million for the three and nine months ended September 30, 2025, respectively, as compared to $(12) million and $(32) million for the corresponding periods in 2024, respectively.

(31) % (12) %

For the three months ended March 31, 2026, OSB net sales decreased year over year by $99 million primarily driven by lower OSB prices and a decline in sales volume.

Adjusted EBITDA for the OSB segment for the same period decreased year over year by $66 million reflecting the impact of lower OSB prices and a decline in sales volumes.

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

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

Additionally, other includes unallocated corporate expenses.

Other net sales decreased by $8 million for the three months ended March 31, 2026, primarily due to a decline in OSB sales volumes.

Adjusted EBITDA for the same period decreased year over year by $9 million, driven primarily by a decline in Other net sales.

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses were $95 million and $250 million for the three and nine months ended September 30, 2025, respectively, compared to $75 million and $215 million for the corresponding periods in 2024, respectively.

The year-over-year increase in selling, general, and administrative expenses for both periods was primarily driven by higher employee compensation.

We recognized an estimated tax provision of $ 9 million and $ 54 million in the three and nine months ended September 30, 2025, respectively, as compared to $ 23 million and $ 117 million for the comparable periods in 2024, respectively.

Each quarter the income tax accrual is adjusted to the latest estimate and the difference from the previously accrued year-to-date balance is recorded in the current quarter.

For the nine months ended September 30, 2025, the primary difference between the U.S.

statutory rate of 21% and the total effective tax rate of 26 % relates to state income tax and non-deductible compensation.

For the nine months ended September 30, 2024, the primary difference between the U.S.

Selling, general, and administrative expenses were $78 million for the three months ended March 31, 2026, compared to $75 million for the corresponding period in 2025.

The year-over-year increase in selling, general, and administrative expenses was primarily driven by higher stock compensation expense.

We recognized a total tax provision of $ 9 million in the three months ended March 31, 2026, compared to $ 26 million for the corresponding period in 2025.

Each quarter, the income tax accrual is updated based on the latest estimate, and any difference from the previously accrued year-to-date balance is recorded in the current quarter.

For the three months ended March 31, 2026, the primary difference between the U.S.

statutory rate of 21% and the total effective tax rate of 25 % relates to state income tax.

For the three months ended March 31, 2025, the primary differences between the U.S.

statutory rate of 21% and the total effective tax rate of 22 % relate to state income tax and inflationary and foreign currency exchange adjustments.

Legal and Environmental Matters

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Operating Activities

During the nine months ended September 30, 2025 and 2024, cash provided by operations was $315 million and $500 million, respectively.

During the three months ended March 31, 2026, cash used in operations was $38 million.

During the same period in 2025, cash provided by operations was $64 million.

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

Investing Activities

During the nine months ended September 30, 2025 and 2024, cash used in investing activities was $216 million and $122 million, respectively, relating to capital expenditures.

The year-over-year increase in capital expenditures was primarily related to higher spend on growth and sustaining maintenance projects in the current year.

During the three months ended March 31, 2026 and 2025, cash used in investing activities was $61 million and $64 million, respectively, relating to capital expenditures.

Capital expenditures in 2026 are expected to be approximately $390 million.

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Financing Activities

During the nine months ended September 30, 2025, cash used in financing activities was $124 million, which included $61 million for share repurchases of LP common stock under the 2024 Share Repurchase Program (defined below) in the three months ended March 31, 2025.

Additionally, we paid cash dividends of $58 million and used $3 million to repurchase stock from employees in connection with income tax withholding requirements associated with our employee stock-based compensation plans.

In connection with other financing activities, we paid $2 million of debt issuance costs related to the amendment of our credit facility.

During the nine months ended September 30, 2024, cash used in financing activities was $252 million, which included $188 million for share repurchases of LP common stock under the share repurchase program authorized by LP’s Board of Directors in May 2022.

Additionally, during this period we had $56 million of dividend payments and $8 million of stock repurchases from employees in connection with income tax withholding requirements associated with our employee stock-based compensation plans.

During the three months ended March 31, 2026, cash used in financing activities was $29 million, which included $21 million of cash dividends paid and $8 million to repurchase stock from employees in connection with income tax withholding requirements associated with our employee stock-based compensation plans.

During the three months ended March 31, 2025, cash used in financing activities was $87 million, which included $61 million for share repurchases of LP common stock under the 2024 Share Repurchase Program (as defined below).

Additionally, we paid cash dividends of $20 million and $5 million to repurchase stock from employees in connection with income tax withholding requirements associated with our employee stock-based compensation plans.

Credit Facility and Letter of Credit Facility

In November 2022, LP entered into the Credit Agreement with American AgCredit, PCA, as administrative agent, CoBank, ACB, as letter of credit issuer, and the lenders and the guarantors from time to time party thereto relating to its revolving credit facility.

On March 26, 2025, LP entered into 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 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 September 30, 2025, there were no outstanding borrowings under the Amended Credit Facility.

The Amended Credit Agreement contains various restrictive covenants and customary events of default.

The breach of restrictive covenants or the occurrence of any other event of default under the Amended Credit Agreement could result in the acceleration of our obligation to repay the indebtedness outstanding thereunder.

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

In November 2022, LP entered into the 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.

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 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, 2026, there were no outstanding borrowings under 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 financial covenants that, among other things, require us and our consolidated subsidiaries to have, as of the end of each quarter, a capitalization ratio ( i.e.

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

As of September 30, 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, 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 Amended Credit Agreement, including the capitalization ratio covenant.

As of March 31, 2026, 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.

As of September 30, 2025, we were in compliance with all covenants under the Letter of Credit Facility.

As of March 31, 2026, we were in compliance with all covenants under the Letter of Credit Facility.

Other Liquidity Matters

Off-Balance Sheet Arrangements

As of September 30, 2025, we had standby letters of credit of $14 million outstanding related to collateral for environmental impact on owned properties, a deposit for a forestry license, and insurance collateral, including workers’ compensation.

As of March 31, 2026, we had standby letters of credit of $15 million outstanding related to collateral for environmental impact on owned properties, a deposit for a forestry license, and insurance collateral, including workers’ compensation.

Potential Impairments

The carrying values of our long-lived assets are reviewed for potential impairments, and adequate support is believed by management to exist for each asset’s carrying value based on anticipated cash flows derived from estimates of future demand, pricing, and production costs, assuming certain levels of planned capital expenditures.

However, if demand and pricing for our products decline significantly below cycle-average levels, if capital is allocated to alternative projects, or if changes occur in the wood supply for mills, future impairment charges may be required.

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.

Potential asset dispositions are also periodically reviewed, taking into account current and anticipated economic and industry conditions, the strategic plan, and other relevant factors.

A decision to dispose of specific assets may require assumptions regarding the transaction structure of the disposition to estimate the net sales proceeds, which could be lower than prior estimates of undiscounted future net cash flows.

A decision to dispose of specific assets may 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.

As a result, impairment charges may be necessary in connection with such dispositions.

During the third quarter ended September 30, 2025, $13 million in non-cash, pre-tax impairment charges were recorded related to equipment that will not be utilized in future operations.

During the second quarter ended June 30.

2025, $17 million in non-cash, pre-tax impairment charges were recorded.

These included $11 million related to acquired equipment that will not be utilized in future operations, $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.

No impairment was recognized during the three months ended March 31, 2026.

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 2. Management’s Discussion and Analysis