What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-05 compared with 2026-05-06 · 90 added, 64 removed, 178 unchanged (46% of the section changed)

13 unchanged sentences

Census Bureau published actual U.S.

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.

housing starts data on July 17, 2026.

Actual single-family housing starts were approximately 4% and 5% lower for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025.

Actual multi-family housing starts for the three and six months ended June 30, 2026, were approximately 8% and 15% higher, respectively, as compared to the same periods in 2025.

Repair and remodeling demand is difficult to measure precisely due to diversity of remodeling projects, however, available market indicators suggest activity is roughly flat compared to the prior 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.

4 unchanged sentences

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 Siding segment is generally less sensitive to 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.

10 unchanged sentences

Non-GAAP Financial Measures and Other Key Performance Indicators

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).

When evaluating the Company's performance on a U.S.

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.

12 unchanged sentences

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.

The impact of this update for the three and six months ended June 30, 2025, was an increase to Adjusted Income of $6 million and $9 million, respectively, and an increase to Adjusted Diluted EPS of $0.08 per share and $0.14 per share, respectively.

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

6 unchanged sentences

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

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Net income $ 26 $ 54 $ 53 $ 145

3 unchanged sentences

Stock-based compensation expense 5 7 12 12

Loss on impairment — 17 — 17

Other operating credits and charges, net 5 2 6 4

5 unchanged sentences

Siding $ 113 $ 125 $ 214 $ 230

OSB (21) 19 (33) 73

Other (13) (1) (19) 1

Adjusted EBITDA $ 79 $ 142 $ 161 $ 304

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

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Net income per share of common stock - diluted $ 0.38 $ 0.77 $ 0.76 $ 2.07

1 unchanged sentence

Add (deduct):

Loss on impairment — 17 — 17

Other operating credits and charges, net 5 2 6 4

19 unchanged sentences

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 months ended March 31, 2026 and 2025 (in thousands):

Three Months Ended March 31,

Housing starts 1 :

The following table sets forth actual housing starts data reported by the U.S.

Census Bureau, as published through July 17, 2026, for the three and six months ended June 30, 2026 and 2025 (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Single-Family 253 264 467 493

Multi-Family 119 111 229 200

1 Actual U.S.

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

Census Bureau as published through April 29, 2026.

372 375 696 692

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.

2 unchanged sentences

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 months ended March 31, 2026 and 2025 (in MMSF):

Three Months Ended March 31,

The following table sets forth sales volumes for the three and six months ended June 30, 2026 and 2025 (in MMSF):

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

446 500 804 935

Total Siding sales volume

446 500 804 935

OSB - Structural Solutions

342 450 669 848

OSB - Commodity 425 430 799 856

Total OSB sales volume

768 880 1,468 1,704

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

1 unchanged sentence

We believe that when used in conjunction with other metrics, OEE can be a useful measure for evaluating our ability to generate profits, and that providing this measure should allow interested persons to monitor operational improvements.

We use a best-in-class target across all LP sites that allows us to optimize capital investments, focus maintenance and reliability improvements, and improve overall equipment efficiency.

We use a best-in-class target across all LP sites that allows us to optimize capital investments, focus on maintenance and reliability improvements, and improve overall equipment efficiency.

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

Three Months Ended March 31,

OEE for the three and six months ended June 30, 2026 and 2025, for each of our reportable segments is listed below:

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Siding 85 % 83 % 84 % 81 %

3 unchanged sentences

Siding and OSB.

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

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

See “Note 11.

4 unchanged sentences

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

Three Months Ended March 31,

2026 2025 % Change

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 % Change 2026 2025 % Change

Net sales $ 441 $ 460 (4) % $ 801 $ 862 (7) %

1 unchanged sentence

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

Three Months Ended March 31,

2026 2025 % Change

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 % Change 2026 2025 % Change

$ 439 $ 458 (4) % $ 798 $ 857 (7) %

2 2 (15) % 3 5 (31) %

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:

Total $ 441 $ 460 (4) % $ 801 $ 862 (7) %

Percent changes in average net sales prices and unit shipments in Siding for the three and six months ended June 30, 2026, compared to the corresponding periods in 2025, were as follows:

Three Months Ended

March 31, 2026 versus 2025

June 30, 2026 versus 2025 Six Months Ended

June 30, 2026 versus 2025

Selling Price Unit

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.

Shipments Average Net

Selling Price Unit

7 % (11) % 8 % (14) %

Siding net sales decreased for the three and six months ended June 30, 2026 due to lower volumes, partially offset by higher prices.

The increase in pricing was attributable to both the annual price increase and favorable mix.

Adjusted EBITDA declined by $12 million in the quarter and $16 million year to date compared with the same periods in 2025.

Net price increases contributed $27 million in the quarter and $54 million year to date, while lower volumes reduced results by $24 million and $59 million, respectively.

Raw material, freight, and labor costs also increased by $10 million in the quarter and $15 million year to date, including a $4 million impact from higher crude oil costs in the second quarter.$16 million, respectively.

Net price increases contributed $27 million in the quarter and $54 million year to date, which were offset by lower volumes of $24 million for the quarter and $59 million year to date.

For the three and six months ended June 30, 2026, costs for raw materials, freight, and labor increased by $10 million and $12 million, respectively, including $4 million related to higher crude oil prices in the second quarter.

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 March 31,

2026 2025 % Change

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 % Change 2026 2025 % Change

Net sales $ 182 $ 250 (27) % $ 350 $ 517 (32) %

1 unchanged sentence

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

Three Months Ended March 31,

2026 2025 % Change

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 % Change 2026 2025 % Change

OSB - Structural Solutions $ 97 $ 143 (32) % $ 190 $ 286 (34) %

3 unchanged sentences

Total $ 182 $ 250 (27) % $ 350 $ 517 (32) %

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:

Percent changes in average net sales prices and unit shipments in OSB for the three and six months ended June 30, 2026, compared to the corresponding periods in 2025, were as follows:

Three Months Ended

March 31, 2026 versus 2025

June 30, 2026 versus 2025

Six Months Ended

June 30, 2026 versus 2025

Selling Price Unit

Shipments Average Net

Selling Price Unit

OSB - Structural Solutions (10) % (24) % (16) % (21) %

1 unchanged sentence

(20) % (1) % (26) % (7) %

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.

For the three and six months ended June 30, 2026, OSB net sales decreased year over year by $68 million and $167 million, respectively, primarily driven by lower OSB prices and a decline in sales volumes.

Adjusted EBITDA for the same periods decreased year over year by $40 million and $106 million, respectively, 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.

Other operations also include timber and timberlands as well as other 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.

Other net sales decreased by $3 million and $12 million, for the three and six months ended June 30, 2026, respectively, primarily due to a decline in OSB selling prices in South America.

Adjusted EBITDA for the same periods decreased year over year by $12 million and $20 million, respectively, driven by a decline in South America net sales along with higher costs incurred in that market.

Selling, General, and Administrative Expenses

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.

Selling, general, and administrative expenses were $80 million and $158 million for the three and six months ended June 30, 2026, respectively, compared to $79 million and $154 million for the corresponding periods in 2025.

The year-over-year increase in selling, general, and administrative expenses was due to higher inflationary costs.

We recognized a total tax provision of $ 8 million and $ 17 million in the three and six months ended June 30, 2026, respectively, compared to $ 19 million and $ 45 million for the corresponding periods 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.

For the six months ended June 30, 2026, the primary differences between the U.S.

statutory rate of 21% and the total effective tax rate of 24 % relate to foreign income tax and inflationary and foreign currency exchange-related adjustments.

For the six months ended June 30, 2025, the primary differences between the U.S.

statutory rate of 21% and the total effective tax rate of 24 % relate to state income tax and inflationary and foreign currency exchange-related adjustments.

Legal and Environmental Matters

6 unchanged sentences

As such, we project our anticipated cash requirements as well as cash flows generated from operating activities to meet those needs.

We anticipate long-term cash uses may also include strategic acquisitions.

We anticipate that long-term cash uses may also include strategic acquisitions.

On a long-term basis, we expect to rely on our credit facilities in effect from time to time for any long-term funding not provided by operating cash flows.

5 unchanged sentences

Operating Activities

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

During the six months ended June 30, 2026, cash provided by operations was $102 million.

During the same period in 2025, cash provided by operations was $226 million.

1 unchanged sentence

Investing Activities

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.

During the six months ended June 30, 2026 and 2025, cash used in investing activities was $120 million and $132 million, respectively, relating to capital expenditures.

Capital expenditures in 2026 are expected to be approximately $320 million.

1 unchanged sentence

Financing Activities

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.

During the six months ended June 30, 2026, cash used in financing activities was $47 million, which included $42 million of cash dividends paid and $5 million to repurchase stock from employees in connection with income tax withholding requirements associated with our employee stock-based compensation plans.

During the six months ended June 30, 2025, cash used in financing activities was $105 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 $39 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.

Credit Facility and Letter of Credit Facility

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.

In November 2022, LP entered into a 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 (the Amended Credit Facility), (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 June 30, 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.

1 unchanged sentence

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

As of March 31, 2026, we were in compliance with all financial covenants under the Amended Credit Agreement.

As of June 30, 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.

3 unchanged sentences

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

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

As of June 30, 2026, we were in compliance with all covenants under the Letter of Credit Facility.

Other Liquidity Matters

Off-Balance Sheet Arrangements

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.

As of June 30, 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

1 unchanged sentence

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 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.

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

Potential changes to our strategic plans, including decisions regarding the continued use or disposition of specific assets, are also periodically evaluated, taking into account current and anticipated economic and industry conditions, and other relevant factors.

Such decisions may require management to revise assumptions regarding expected future cash flows or estimated recoverable values.

If revised estimates indicate that the carrying amount of an asset is not recoverable, impairment charges may be required.

No impairment was recognized during the three and six months ended June 30, 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