LOUISIANA-PACIFIC CORP 10-Q

ITEM 1. FINANCIAL STATEMENTS Condensed Consolidated Statements of Income Amounts in millions, except per share amounts (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Net sales $ 664 $ 755 $ 1,239 $ 1,478 Cost of sales ( 549 ) ( 577 ) ( 1,008 ) ( 1,103 ) Gross profit 116 178 231 375 Selling, general, and administrative expenses ( 80 ) ( 79 ) ( 158 ) ( 154 ) Loss on impairment — ( 17 ) — ( 17 ) Other operating credits and charges, net ( 5 ) ( 2 ) ( 7 ) ( 4 ) Income from operations 31 80 66 200 Interest expense ( 4 ) ( 4 ) ( 8 ) ( 7 ) Investment income 6 4 8 8 Other non-operating (expense) income 1 ( 7 ) 4 ( 12 ) Income before income taxes 34 73 70 189 Provision for income taxes ( 8 ) ( 19 ) ( 17 ) ( 45 ) Equity in unconsolidated affiliate — — — 1 Net income $ 26 $ 54 $ 53 $ 145 Net income per share of common stock: Basic $ 0.38 $ 0.77 $ 0.76 $ 2.08 Diluted $ 0.38 $ 0.77 $ 0.76 $ 2.07 Average shares of common stock used to compute net income per share: Basic 70 70 70 70 Diluted 70 70 70 70 The accompanying Notes are an integral part of these unaudited Condensed Consolidated Financial Statements. 4 Condensed Consolidated Statements of Comprehensive Income Amounts in millions (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Net income $ 26 $ 54 $ 53 $ 145 Other comprehensive income (loss), net of tax Foreign currency translation adjustments 1 6 ( 5 ) 18 Comprehensive income $ 27 $ 60 $ 49 $ 163 The accompanying Notes are an integral part of these unaudited Condensed Consolidated Financial Statements. 5 Condensed Consolidated Balance Sheets Amounts in millions (Unaudited) June 30, 2026 December 31, 2025 ASSETS Cash and cash equivalents $ 228 $ 292 Receivables, net of allowance for doubtful accounts of $ 1 as of June 30, 2026 and December 31, 2025 143 127 Inventories 373 363 Prepaid expenses and other current assets 28 28 Total current assets 773 809 Property, plant, and equipment, net 1,728 1,709 Timber and timberlands 9 13 Operating lease assets, net 23 23 Goodwill and other intangible assets 19 22 Investments in and advances to affiliates 18 17 Other assets 26 25 Deferred tax asset 11 8 Total assets $ 2,607 $ 2,627 LIABILITIES AND STOCKHOLDERS’ EQUITY Accounts payable and accrued liabilities $ 240 $ 285 Income taxes payable — 5 Total current liabilities 240 291 Long-term debt 348 348 Deferred income taxes 195 177 Non-current operating lease liabilities 20 22 Contingency reserves, excluding current portion 26 26 Other long-term liabilities 33 33 Total liabilities 863 896 Stockholders’ equity: Common stock, $ 1 par value per share, 200 shares authorized; 85 shares issued and 70 shares issued and outstanding as of June 30, 2026 and December 31, 2025 85 85 Additional paid-in capital 515 508 Retained earnings 1,633 1,621 Treasury stock, 15 shares at cost as of June 30, 2026 and December 31, 2025 ( 386 ) ( 385 ) Accumulated comprehensive loss ( 103 ) ( 98 ) Total stockholders’ equity 1,744 1,731 Total liabilities and stockholders’ equity $ 2,607 $ 2,627 The accompanying Notes are an integral part of these unaudited Condensed Consolidated Financial Statements. 6 Condensed Consolidated Statements of Cash Flows Amounts in millions (Unaudited) Six Months Ended June 30, 2026 2025 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 53 $ 145 Adjustments to net income: Depreciation and amortization 77 70 Impairment of goodwill and long-lived assets — 17 Stock-based compensation expense 12 12 Deferred taxes 17 ( 4 ) Foreign currency remeasurement and transaction (gains) losses ( 6 ) 7 Other adjustments, net 1 2 Changes in assets and liabilities (net of acquisitions and divestitures): Receivables ( 12 ) ( 37 ) Inventories ( 10 ) ( 18 ) Prepaid expenses and other current assets 1 6 Accounts payable and accrued liabilities ( 21 ) 4 Income taxes payable, net of receivables ( 9 ) 21 Net cash provided by operating activities 102 226 CASH FLOWS FROM INVESTING ACTIVITIES: Property, plant, and equipment additions ( 120 ) ( 132 ) Net cash used in investing activities ( 120 ) ( 132 ) CASH FLOWS FROM FINANCING ACTIVITIES: Payment of cash dividends ( 42 ) ( 39 ) Purchase of stock — ( 61 ) Other financing activities ( 5 ) ( 4 ) Net cash used in financing activities ( 47 ) ( 105 ) EFFECT OF EXCHANGE RATE ON CASH, CASH EQUIVALENTS, AND RESTRICTED CASH 1 3 Net increase (decrease) in cash, cash equivalents, and restricted cash ( 63 ) ( 7 ) Cash, cash equivalents, and restricted cash at beginning of period 292 340 Cash, cash equivalents, and restricted cash at end of period $ 228 $ 333 Supplemental cash flow information: Cash paid for income taxes, net $ 9 $ 28 Cash paid for interest, net $ 7 $ 7 Unpaid capital expenditures $ 14 $ 26 The accompanying Notes are an integral part of these unaudited Condensed Consolidated Financial Statements. 7 Condensed Consolidated Statements of Stockholders’ Equity Amounts in millions, except per share amounts (Unaudited) Common Stock Treasury Stock Additional Paid-in Capital Retained Earnings Accumulated Comprehensive (Loss) Income Total Stockholders’ Equity Shares Amount Shares Amount Balance, December 31, 2025 85 $ 85 15 $ ( 385 ) $ 508 $ 1,621 $ ( 98 ) $ 1,731 Net income — — — — — 27 — 27 Dividends paid ($ 0.30 per share) — — — — — ( 21 ) — ( 21 ) Issuance of shares under stock plans — — — 6 ( 6 ) — — — Taxes paid related to net settlement of stock-based awards — — — ( 8 ) — — — ( 8 ) Compensation expense associated with stock-based compensation — — — — 7 — — 7 Other comprehensive income (loss) — — — — — — ( 5 ) ( 5 ) Balance, March 31, 2026 85 $ 85 15 $ ( 388 ) $ 509 $ 1,627 $ ( 103 ) $ 1,730 Net income — — — — — 26 — 26 Dividends paid ($ 0.30 per share) — — — — — ( 21 ) — ( 21 ) Issuance of shares under stock plans — — — 2 1 — — 3 Compensation expense associated with stock-based compensation — — — — 5 — — 5 Other comprehensive income (loss) — — — — — — 1 1 Balance, June 30, 2026 85 $ 85 15 $ ( 386 ) $ 515 $ 1,633 $ ( 103 ) $ 1,744 8 Common Stock Treasury Stock Additional Paid-in Capital Retained Earnings Accumulated Comprehensive (Loss) Income Total Stockholders’ Equity Shares Amount Shares Amount Balance, December 31, 2024 86 $ 86 16 $ ( 386 ) $ 478 $ 1,615 $ ( 122 ) $ 1,671 Net income — — — — — 91 — 91 Dividends paid ($ 0.28 per share) — — — — — ( 20 ) — ( 20 ) Issuance of shares under stock plans — — — 3 ( 3 ) — — — Taxes paid related to net settlement of stock-based awards — — — ( 5 ) — — — ( 5 ) Purchase of stock ( 1 ) ( 1 ) — — — ( 61 ) — ( 62 ) Compensation expense associated with stock-based compensation — — — — 5 — — 5 Other comprehensive income (loss) — — — — — — 12 12 Balance, March 31, 2025 85 $ 85 15 $ ( 388 ) $ 480 $ 1,625 $ ( 110 ) $ 1,692 Net income — — — — — 54 — 54 Dividends paid ($ 0.28 per share) — — — — — ( 19 ) — ( 19 ) Issuance of shares under stock plans — — — 2 1 — — 3 Taxes paid related to net settlement of stock-based awards — — — ( 1 ) — — — ( 1 ) Compensation expense associated with stock-based compensation — — — — 7 — — 7 Other comprehensive income (loss) — — — — — — 6 6 Balance, June 30, 2025 85 $ 85 15 $ ( 386 ) $ 488 $ 1,659 $ ( 104 ) $ 1,742 The accompanying Notes are an integral part of these unaudited Condensed Consolidated Financial Statements. 9 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION Nature of Operations Louisiana-Pacific Corporation and our subsidiaries are a leading provider of high-performance building solutions that meet the demands of builders, remodelers, and homeowners worldwide. Serving the new home construction, repair and remodeling, and outdoor structures markets, we have leveraged our expertise to become an industry leader known for innovation, quality, reliability, and sustainability. The principal customers for our building solutions are retailers, wholesalers, and home building and industrial businesses in North America and South America. The Company operates more than 20 manufacturing facilities across North and South America and operates an additional facility through a joint venture . References to “ LP,” the “ Company,” “ we,” “ our,” and “ us” refer to Louisiana-Pacific Corporation and its consolidated subsidiaries as a whole. See “ Note 11. Selected Segment Data” below for further information regarding our products and segments. Basis of Presentation The unaudited Condensed Consolidated Financial Statements presented here have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial reporting. As such, they do not include all the information and footnotes required by U.S. GAAP for complete consolidated financial statements. Management believes that all necessary adjustments for a fair presentation have been included and are of a normal and recurring nature. These Condensed Consolidated Financial Statements and the accompanying Notes should be reviewed in conjunction with our annual report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on February 17, 2026 (2025 Annual Report on Form 10-K). The results of operations for interim periods are not necessarily indicative of the results that may be expected for the full fiscal year. The Condensed Consolidated Financial Statements include the accounts of LP and our consolidated subsidiaries. All intercompany transactions, profits, and balances have been eliminated. Certain reclassifications have been made to prior years to conform to the current year presentation. NOTE 2. REVENUE Revenue from contracts with customers is disaggregated into major product lines. We believe disaggregation into these categories provides insight into how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. The following tables present our reportable segment revenues, disaggregated by revenue source (dollar amounts in millions): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Siding $ 439 $ 458 $ 798 $ 857 Other 2 2 3 5 Net sales attributable to Siding 441 460 801 862 OSB - Structural Solutions 97 143 190 286 OSB - Commodity 82 104 155 224 Other 2 3 5 7 Net sales attributable to OSB 182 250 350 517 Other 41 45 87 99 Total Sales $ 664 $ 755 $ 1,239 $ 1,478 10 Revenue is recognized when obligations under the terms of a contract (e.g. , purchase orders) with our customers are satisfied; generally, this occurs with the transfer of control of our products at a point in time. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods. The shipping cost incurred by us to deliver products to our customers is recorded in cost of sales. The expected costs associated with our warranties continue to be recognized as an expense when the products are sold. Our businesses routinely incur customer program costs to obtain favorable product placement, promote sales of products, and maintain competitive pricing. Customer program costs and incentives, including rebates and promotion and volume allowances, are accounted for as a reduction in net sales at the time the program is initiated and/or the revenue is recognized. The costs include, but are not limited to, volume allowances and rebates, promotional allowances, and cooperative advertising programs. These costs are recorded using management’s best estimates, which are based on historical and projected experience for each type of program or customer. Volume allowances are accrued based on our estimates of customer volume achievement and other factors incorporated into customer agreements, such as new product purchases, store sell-through, merchandising support, and customer training. Management adjusts accruals when circumstances indicate (typically as a result of a change in volume expectations). We ship some of our products to customers’ distribution centers on a consignment basis. We retain title to our products stored at the distribution centers. As our products are removed from the distribution centers by retailers and shipped to retailers’ stores, title passes from us to the retailers. At that point, we invoice the retailer and recognize revenue for these consignment transactions. No right of return is offered for products shipped to the retailers’ stores from the distribution centers. NOTE 3. EARNINGS PER SHARE Basic earnings per share is based on the weighted-average number of shares of common stock outstanding. Diluted earnings per share is based upon the weighted-average number of shares of common stock outstanding plus all potentially dilutive securities that were assumed to be converted into common shares at the beginning of the period under the treasury stock method. This method requires that the effect of potentially dilutive common stock equivalents (stock options, stock-settled appreciation rights (SSARs), restricted stock units, and performance stock units) be excluded from the calculation of diluted earnings per share for the periods in which losses are reported because the effect is anti-dilutive. The following table sets forth the computation of basic and diluted earnings per share (dollar and share amounts in millions, except per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Net income $ 26 $ 54 $ 53 $ 145 Weighted average common shares outstanding - basic 70 70 70 70 Dilutive effect of employee stock plans — — — — Shares used for diluted earnings per share 70 70 70 70 Net income per share of common stock: Basic $ 0.38 $ 0.77 $ 0.76 $ 2.08 Diluted $ 0.38 $ 0.77 $ 0.76 $ 2.07 11 NOTE 4. SUPPLEMENTAL BALANCE SHEET INFORMATION Receivables Trade receivables are primarily generated by sales of our products to our wholesale and retail customers. Receivables consisted of the following (dollar amounts in millions): June 30, 2026 December 31, 2025 Trade receivables $ 111 $ 95 Income tax receivable 20 16 Other receivables 13 17 Allowance for doubtful accounts ( 1 ) ( 1 ) Total Receivables $ 143 $ 127 Other receivables as of June 30, 2026, and December 31, 2025, primarily consisted of sales tax receivables and other miscellaneous receivables. Inventories Inventories are valued at the lower of cost or net realizable value. Inventory cost includes materials, labor, and operating overhead. The first-in, first-out or average cost methods are used to value our inventories. Inventories include a lower of cost or market adjustment of $ 19 million and $ 23 million as of June 30, 2026, and December 31, 2025, respectively. Inventory consisted of the following (dollar amounts in millions): June 30, 2026 December 31, 2025 Logs $ 63 $ 62 Other raw materials 41 42 Semi-finished inventories 33 38 Finished products 236 222 Total Inventories $ 373 $ 363 Property, Plant, and Equipment Property, plant, and equipment, including capitalized interest, are recorded at cost and consisted of the following (dollar amounts in millions): June 30, 2026 December 31, 2025 Land, land improvements, and logging roads, net of road amortization $ 231 $ 225 Buildings 530 525 Machinery and equipment 2,672 2,602 Construction in progress 300 298 Property, plant, and equipment 3,733 3,650 Accumulated depreciation ( 2,005 ) ( 1,941 ) Property, plant, and equipment, net $ 1,728 $ 1,709 12 Goodwill and Intangible Assets Goodwill and indefinite-lived intangible assets are not amortized and are subject to assessment for impairment by applying a fair value-based test on an annual basis, or more frequently if circumstances indicate a potential impairment. The Company’s annual assessment date is October 1. Changes in goodwill and other intangible assets for the six months ended June 30, 2026, are provided in the following table (dollar amounts in millions): Goodwill Developed Technology Total Goodwill and Intangibles Beginning balance December 31, 2025 $ 19 $ 3 $ 22 Amortization — ( 3 ) ( 3 ) Ending balance June 30, 2026 $ 19 $ — $ 19 Timber and Timberlands Timber and timberlands are comprised of timber deeds and allocations of the purchase price to Canadian timber harvesting licenses. Timber deeds are transactions in which we purchase timber but not the underlying land. We had timber and timberlands of $ 2 million and $ 5 million as of June 30, 2026, and December 31, 2025, respectively. Timber licenses have a life of 20 to 25 years and are amortized on a straight-line basis over the life of the agreement. Changes in timber licenses for the six months ended June 30, 2026, are provided in the following table (dollar amounts in millions): 2026 2025 Beginning balance $ 8 $ 23 Amortization ( 1 ) ( 1 ) Ending balance 1 $ 7 $ 22 1 Timber licenses are included in timber and timberlands on the Condensed Consolidated Balance Sheets. Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities were as follows (dollars amounts in millions): June 30, 2026 December 31, 2025 Trade accounts payable $ 122 $ 129 Salaries and wages payable 54 84 Accrued customer incentives 40 50 Taxes other than income taxes 6 5 Current portion of operating lease liabilities 9 9 Other accrued liabilities 9 9 Total accounts payable and accrued liabilities $ 240 $ 285 Other accrued liabilities as of June 30, 2026, and December 31, 2025, primarily consisted of accrued interest, the short-term portion of workers' compensation liabilities, the current portion of product warranties, and other items. Additionally, trade accounts payable included $ 14 million and $ 33 million related to capital expenditures that had not yet been paid as of June 30, 2026, and December 31, 2025, respectively. 13 Other Long-Term Liabilities Other long-term liabilities were as follows (dollar amounts in millions): June 30, 2026 December 31, 2025 Post-retirement obligations $ 6 $ 6 Asset retirement obligations 9 9 Uncertain tax positions 5 5 Warranty reserves 5 5 Other 8 8 Total other long-term liabilities $ 33 $ 33 Other long-term liabilities as of June 30, 2026, and December 31, 2025, consisted primarily of executive deferred compensation and the long-term portion of workers’ compensation liabilities. See “Note 10. Product Warranties” below for further information regarding our product warranty claims. NOTE 5. FAIR VALUE MEASUREMENTS Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. We are required to classify these financial assets and liabilities into two groups: (i) recurring—measured on a periodic basis, and (ii) non-recurring—measured on an as-needed basis. There are three levels of inputs that may be used to measure fair value: Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Level 2 Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets; or valuations based on models where the significant inputs are observable or can be corroborated by observable market data. Level 3 Valuations based on models where significant inputs are not observable. Unobservable inputs are used when little or no market data is available and reflect the Company’s own assumptions about the assumptions market participants would use. The Company’s financial instruments consist of cash and cash equivalents, short-term receivables, trade payables, debt instruments, and trading securities. Carrying amounts reported on the balance sheet for cash and cash equivalents, receivables, and accounts payable approximate fair value due to the short-term maturity of these instruments. The net carrying value of the Company's 3.625 % Senior Notes due in 2029 (2029 Senior Notes) was $ 348 million as of June 30, 2026 and December 31, 2025. Based on market quotations, the fair value of the 2029 Senior Notes was estimated to be $ 335 million and $ 341 million as of June 30, 2026 and December 31, 2025, respectively. The 2029 Senior Notes and other long-term debt are categorized as Level 1 in the U.S. GAAP fair value hierarchy. Fair values are based on trading activity among the Company’s lenders and the average bid and ask price is determined using published rates. In March 2025, LP entered into that certain First Amendment to Second Amended and Restated Credit Agreement (the First Amendment) with American AgCredit, PCA, as administrative agent, CoBank, ACB, as letter of credit issuer, and the lenders and voting participants party thereto, which amends that certain Second Amended and Restated Credit Agreement (the Credit Agreement) that was entered into in November 2022. The First Amendment amended the 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) 14 extend the maturity date to March 26, 2032. As of June 30, 2026, there were no outstanding borrowings pursuant to the Amended Credit Facility. NOTE 6. INCOME TAXES For interim periods, income tax expense is recognized by applying the estimated annual effective tax rate to year-to-date results, unless doing so does not yield a reliable estimate. 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. Changes in profitability estimates across jurisdictions may affect quarterly effective tax rates. The provision for income taxes for the six months ended June 30, 2026, and 2025, reflected an estimated annual effective tax rate of 26 % excluding discrete items discussed below. The total tax provision for the three and six months ended June 30, 2026, was $ 8 million and $ 17 million, respectively, compared to $ 19 million and $ 45 million for the corresponding periods in 2025. The total effective tax rate for the three and six months ended June 30, 2026, was 22 % and 24 %, respectively, compared to 26 % and 24 % for the corresponding periods in 2025. During the six months ended June 30, 2026, we recognized a $ 1 million net discrete tax benefit primarily related to inflationary and foreign currency exchange-related effects. During the six months ended June 30, 2025, we recognized a $ 4 million net discrete tax benefit primarily related to inflationary and foreign currency exchange-related effects and stock-based compensation. NOTE 7. OTHER OPERATING AND NON-OPERATING ITEMS Other operating credits and charges, net Other operating credits and charges, net, is comprised of the following components (dollar amounts in millions): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Reorganization charges $ ( 1 ) $ ( 3 ) $ ( 3 ) $ ( 5 ) Product-line discontinuance charges — — ( 1 ) — Loss on asset disposal ( 4 ) — ( 4 ) ( 1 ) Other — 2 1 2 Other operating credits and charges, net $ ( 5 ) $ ( 2 ) $ ( 7 ) $ ( 4 ) Non-operating income (expense) Non-operating income (expense) is comprised of the following components (dollar amounts in millions): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Foreign currency gain (loss) $ 1 $ ( 7 ) $ 4 $ ( 12 ) Other non-operating income (expense) $ 1 $ ( 7 ) $ 4 $ ( 12 ) NOTE 8. IMPAIRMENT OF LONG-LIVED ASSETS 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 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 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, 15 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. NOTE 9. COMMITMENTS AND CONTINGENCIES Reserves for various contingent liabilities were as follows (dollar amounts in millions): June 30, 2026 December 31, 2025 Environmental reserves $ 27 $ 27 Total contingencies $ 27 $ 27 Current portion (included in accounts payable and accrued liabilities) ( 1 ) ( 1 ) Long-term portion $ 26 $ 26 Estimates of loss contingencies are based on various assumptions and judgments. Due to the numerous uncertainties and variables associated with these assumptions and judgments, both the precision and reliability of the resulting estimates are subject to substantial uncertainty. Estimated exposure to contingencies is regularly monitored, and as additional information becomes available, estimates may change significantly. Although no estimate of the range of any such change can be made at this time, the amount ultimately paid in connection with these matters could materially exceed, in either the near term or the longer term, the amounts accrued to date. Estimates of loss contingencies do not reflect potential future recoveries from insurance carriers, except to the extent that recovery is deemed probable based on an insurer’s agreement to payment terms. Environmental Matters A reserve is maintained for undiscounted estimated environmental loss contingencies. This reserve is primarily maintained for estimated future costs of remediation of hazardous or toxic substances at numerous sites currently or previously owned by the Company. Estimates of environmental loss contingencies are based on various assumptions and judgments, the specific nature of which varies considering the particular facts and circumstances surrounding each environmental loss contingency. These estimates typically reflect management's assumptions and judgments as to the probable nature, magnitude, and timing of the required investigation, remediation, and/or monitoring activities, as well as the probable costs associated with those activities. In some cases, estimates also consider the obligation, willingness, or ability of third parties to bear a proportionate or allocated share of the costs. Due to the numerous uncertainties and variables associated with these assumptions and judgments, and the potential effects of changes in governmental regulation and environmental technologies, both the precision and reliability of the resulting estimates of the related contingencies are subject to substantial uncertainties. Estimated exposure to environmental loss contingencies is regularly monitored, and estimates may be revised significantly as additional information becomes available. Other Proceedings From time to time, the Company and its subsidiaries are parties to certain legal proceedings arising in the ordinary course of business. Based on the information currently available, management does not believe that the resolution of such proceedings could reasonably be expected to have a material adverse effect on the Company’s financial position, results of operations, cash flows, or liquidity. 16 NOTE 10. PRODUCT WARRANTIES Warranties are offered on the sale of most of our products, and an accrual is recorded for estimated future claims. Such accruals are based upon historical experience and management’s estimate of the level of future claims. The activity in the warranty reserves is summarized in the following table for the three and six months ended June 30, 2026 and 2025 (dollar amounts in millions): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Beginning balance $ 7 $ 6 $ 6 $ 6 Change in warranty provision — — 1 — Payments made — — — ( 1 ) Total warranty reserves 7 6 7 6 Current portion of warranty reserves (included in accounts payable and accrued liabilities) ( 1 ) ( 2 ) ( 1 ) ( 2 ) Long-term portion of warranty reserves (included in other long-term liabilities) $ 5 $ 4 $ 5 $ 4 Warranty and other product-related claims continue to be monitored by management, and as of June 30, 2026, the warranty reserve balances associated with these matters are considered adequate to cover future warranty payments. However, it is possible that additional adjustments may be required in the future. NOTE 11. SELECTED SEGMENT DATA The Company defines its operating segments as those operations that engage in business activities from which revenues are earned and expenses incurred, for which discrete financial information is available, and that are regularly reviewed to analyze performance and allocate resources by the chief operating decision maker (“CODM”), the Company's Chief Executive Officer. The Company conducts business through two reportable segments: Siding and OSB. Other comprises our South American operations and other products and services that are not individually significant. • 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. • 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). The results of our business segments are evaluated based on segment Adjusted EBITDA, which the CODM uses to assess performance and make decisions regarding the allocation of operating and capital resources. Additionally, the budgeting and forecasting process monitors budget versus actual results, with emphasis on Adjusted EBITDA. Segment Adjusted EBITDA is defined as income attributed to LP excluding interest expense, provision for income taxes, depreciation and amortization, stock-based compensation expense, loss on impairment, 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. 17 Information regarding the Company’s business segments is presented below (dollar amounts in millions): Three Months Ended June 30, 2026 Siding OSB Total Revenues from external customers $ 441 $ 182 $ 623 Reconciliation of revenue Other revenues 1 41 Total consolidated revenues $ 664 Less: Cost of sales ( 308 ) ( 200 ) Selling, general, and administrative expenses ( 44 ) ( 17 ) Depreciation and amortization 22 13 Other segment items 2 2 1 Reportable segment Adjusted EBITDA $ 113 $ ( 21 ) $ 92 Three Months Ended June 30, 2025 Siding OSB Total Revenues from external customers $ 460 $ 250 $ 710 Reconciliation of revenue Other revenues 1 45 Total consolidated revenues $ 755 Less: Cost of sales ( 314 ) ( 229 ) Selling, general, and administrative expenses ( 44 ) ( 18 ) Depreciation and amortization 20 13 Other segment items 2 2 2 Reportable segment Adjusted EBITDA $ 125 $ 19 $ 143 1 Other revenues include sales from the Company's South American operations and other products and services that are not individually significant. 2 Other segment items include stock compensation expense. 18 Six Months Ended June 30, 2026 Siding OSB Total Revenues from external customers $ 801 $ 350 $ 1,151 Reconciliation of revenue Other revenues 1 87 Total consolidated revenues $ 1,239 Less: Cost of sales ( 552 ) ( 379 ) Selling, general, and administrative expenses ( 83 ) ( 34 ) Depreciation and amortization 44 28 Other segment items 2 4 2 Reportable segment Adjusted EBITDA $ 214 $ ( 33 ) $ 181 Six Months Ended June 30, 2025 Siding OSB Total Revenues from external customers $ 862 $ 517 $ 1,379 Reconciliation of revenue Other revenues 1 99 Total consolidated revenues $ 1,478 Less: Cost of sales ( 590 ) ( 440 ) Selling, general, and administrative expenses ( 85 ) ( 34 ) Depreciation and amortization 40 26 Other segment items 2 3 3 Reportable segment Adjusted EBITDA $ 230 $ 73 $ 303 1 Other revenues include sales from the Company's South American operations and other products and services that are not individually significant. 2 Other segment items include stock compensation expense. 19 The following table presents significant items and reconciles reportable segment Adjusted EBITDA to income before income taxes (dollar amounts in millions): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Reconciliation of profit (loss) Reportable segment Adjusted EBITDA $ 92 $ 143 $ 181 $ 303 Add (deduct): Other Adjusted EBITDA 1 ( 13 ) ( 1 ) ( 19 ) 1 Equity in unconsolidated affiliate — — — ( 1 ) Depreciation and amortization ( 39 ) ( 36 ) ( 77 ) ( 70 ) Stock-based compensation expense ( 5 ) ( 7 ) ( 12 ) ( 12 ) Loss on impairment — ( 17 ) — ( 17 ) Other operating credits and charges, net ( 5 ) ( 2 ) ( 6 ) ( 4 ) Product-line discontinuance charges — — ( 1 ) — Interest expense ( 4 ) ( 4 ) ( 8 ) ( 7 ) Investment income 6 4 8 8 Other non-operating (expense) income 2 1 ( 7 ) 4 ( 12 ) Income before income taxes $ 34 $ 73 $ 70 $ 189 1 Other Adjusted EBITDA includes the Company's South American operations, unallocated corporate expenses, and other products and services that are not individually significant. Information concerning identifiable assets by segment is as follows (dollar amounts in millions): June 30, 2026 December 31, 2025 Identifiable Assets Siding $ 1,461 $ 1,419 OSB 522 531 Total segment assets 1,983 1,950 Other 624 677 Total assets $ 2,607 $ 2,627 Other assets include cash and cash equivalents, accounts receivable, South American assets, short-term and long-term investments, corporate assets, and other items. 20