What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-02-14 compared with 2023-02-21 · 282 added, 321 removed, 886 unchanged (40% of the section changed)

18 unchanged sentences

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the Finance and Audit Committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Retirement Plans and Post-Retirement Benefits— Refer to Notes 1 and 16 to the financial statements

Revenue — Refer to Note 3 to the Financial Statements

Critical Audit Matter Description

The Company has a number of frozen defined benefit pension plans in the U.S.

and Canada covering many of their employees.

In November 2021, the Company initiated the termination of both the U.S.

and Canadian defined benefit pension plans (“Plans”).

Such Plans were substantially settled during the year ended December 31, 2022 and accordingly, the net pension obligations were removed from the Company’s consolidated balance sheet as of December 31, 2022.

Legal termination of the Plans will not occur until all regulatory requirements are satisfied, which is expected to occur in 2023.

Under the termination, Plan participants received their full accrued benefits by having elected to receive either a lump sum distribution or an annuity contract with a qualifying third-party annuity provider.

Expenses and liabilities related to the defined benefit pension obligation were recorded based on various actuarial assumptions, including discount rate, assumed rates of return, and assumptions related to the rate above mentioned by participants.

We identified the Company’s settlement of the pension plans as a critical audit matter given the subjectivity pertaining to the remeasurement period and non-routine nature of such transaction.

Performing audit procedures to evaluate the settlement required a high degree of auditor judgement and increased extent of effort, which included the need to involve an actuarial specialist.

The Company’s revenue consists of product sales and is recognized when obligations under the terms of a contract (i.e., purchase order) with the Company’s customers are satisfied.

Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods.

Auditing revenue required a significant extent of effort and the involvement of professionals with expertise in information technology ("IT") necessary for us to identify, test, and evaluate the Company's system and automated controls.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the Company’s remeasurement and settlement of the defined benefit pension obligation included the following, among others:

• We tested the effectiveness of the internal controls over the valuation of the defined benefit pension obligation at remeasurement and the settlement.

• We consulted with technical experts as to the accounting treatment

• We tested the completeness and accuracy of the underlying source information by:

• Selecting a sample of the annuity & lump sum elections and related payments

• Selecting a sample of census data changes.

• With the assistance of our actuarial specialist, we evaluated the settlement methodology utilized to select the measurement date, census date, service cost, interest cost, and amortization of prior service costs and (gain)/losses for conformity with applicable accounting guidance.

Our audit procedures related to the Company’s revenue transactions included the following, among others:

• With the assistance of our IT specialists, we:

• Identified the significant system used to process revenue transactions and tested the general IT controls over the system, including testing of user access controls, change management controls, and IT operations controls.

• Performed testing of automated controls within the relevant revenue streams, as well as the controls designated to ensure the accuracy and completeness of revenue.

• We tested the design and operating effectiveness of internal controls within the relevant revenue business processes.

• With the assistance of our data specialists, we created data visualizations to evaluate recorded revenue and evaluate trends in the transactional revenue data.

• For a sample of revenue transactions, we performed detail transaction testing by agreeing the amounts recognized to source documents and testing the mathematical accuracy of the recorded revenue.

• With the assistance of our data specialists, we performed a reconciliation of all automated revenue transactions recorded in the system, and for a sample of revenue transactions within the population, traced the transaction from the testing performed to the respective journal entry data.

/s/ Deloitte & Touche LLP

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Changes in defined benefit pension plans 4 71 5

Other 1 — ( 2 )

Other comprehensive income (loss), net of tax 10 75 ( 23 )

6 unchanged sentences

Cash and cash equivalents $ 222 $ 369

Receivables, net of allowance for doubtful accounts of $ 1 million at December 31, 2022, and 2021, respectively

Receivables, net of allowance for doubtful accounts of $ 2 million at December 31, 2023, and $ 1 million at December 31, 2022, respectively

Inventories 378 337

Prepaid expenses and other current assets 23 20

Current assets of discontinued operations — 68

Total current assets 778 854

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Other assets 20 24

Deferred tax asset 7 2

Long-term assets of discontinued operations — 87

Deferred tax assets 11 7

Total assets $ 2,437 $ 2,350

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Income taxes payable 5 19

Current liabilities of discontinued operations — 34

Total current liabilities 259 336

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Other long-term liabilities 61 53

Long term liabilities of discontinued operations — 42

Total liabilities 880 916

Commitments and contingencies (Note 14)

Redeemable noncontrolling interest — 4

Stockholders’ equity:

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Depreciation and amortization 119 132 119

Loss on impairment 1 6 16

Impairment of goodwill and long-lived assets 30 1 6

Gain on sale of assets, net ( 7 ) ( 157 ) —

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Deferred taxes 44 1 7

Foreign currency remeasurement and transaction (gains) losses 50 ( 2 ) 2

Other adjustments, net 26 35 9

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Property, plant, and equipment additions ( 300 ) ( 414 ) ( 254 )

Acquisition of facility assets ( 80 ) — —

Proceeds from business divestiture — 268 —

Redemption of insurance cash surrender value — — 10

Proceeds from sale of assets 9 — —

Other investing activities, net ( 4 ) — 5

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Purchase of stock — ( 900 ) ( 1,300 )

Other financing activities, net ( 13 ) ( 13 ) ( 7 )

Other financing activities ( 8 ) ( 13 ) ( 13 )

Net cash used in financing activities ( 77 ) ( 982 ) ( 1,388 )

1 unchanged sentence

Net increase (decrease) in cash, cash equivalents, and restricted cash ( 161 ) 12 ( 164 )

Cash, cash equivalents, and restricted cash at the beginning of the year 371 535 195

Cash, cash equivalents, and restricted cash at the end of the year $ 383 $ 371 $ 535

Cash, cash equivalents, and restricted cash at beginning of period 383 371 535

Cash, cash equivalents, and restricted cash at end of period $ 222 $ 383 $ 371

Supplemental cash flow information:

Cash paid for income taxes, net $ ( 65 ) $ ( 320 ) $ ( 421 )

Tax authority deposit applied to income taxes $ — $ — $ ( 32 )

Cash paid for interest, net $ ( 15 ) $ ( 14 ) $ ( 16 )

12 unchanged sentences

Net income attributed to LP — — — — — 1,377 — 1,377

Cash dividends on common stock paid ($ 0.145 per share quarterly)

Cash dividends on common stock paid ($ 0.16 per share for the first and second quarters and $ 0.18 per share for the third and fourth quarters)

— — — — — ( 66 ) — ( 66 )

Issuance of shares under stock plans, net of taxes withheld — — ( 1 ) 9 ( 12 ) — — ( 3 )

Issuance of shares under stock plans — — ( 1 ) 14 ( 12 ) — — 2

Taxes paid on net settlement — — — ( 7 ) — — — ( 7 )

Purchase of stock ( 21 ) ( 21 ) — — — ( 1,279 ) — ( 1,300 )

Compensation expense associated with stock-based compensation — — — — 17 — — 17

Noncontrolling interest redemption value adjustment — — — — ( 2 ) — — ( 2 )

Other comprehensive loss — — — — — — ( 23 ) ( 23 )

2 unchanged sentences

Net income attributed to LP — — — — — 1,086 — 1,086

Cash dividends on common stock paid ($ 0.16 per share for the first and second quarters and $ 0.18 per share for the third and fourth quarters)

Cash dividends on common stock paid ($ 0.22 per share quarterly)

— — — — — ( 69 ) — ( 69 )

Issuance of shares under stock plans, net of taxes withheld — — — 7 ( 12 ) — — ( 5 )

Issuance of shares under stock plans — — ( 1 ) 18 ( 15 ) — — 3

Taxes paid on net settlement — — — ( 16 ) — — — ( 16 )

Purchase of stock ( 14 ) ( 14 ) — — — ( 886 ) — ( 900 )

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— — — — — ( 69 ) — ( 69 )

Issuance of shares under stock plans, net of taxes withheld — — ( 1 ) 2 ( 15 ) — — ( 13 )

Issuance of shares under stock plans — — ( 1 ) 14 ( 10 ) — — 4

Taxes paid on net settlement — — — ( 12 ) — — — ( 12 )

Purchase of stock — — — — — — — —

6 unchanged sentences

Description Page No.

Note 1 Summary of Significant Accounting Policies

Note 2 Present and Prospective Accounting Pronouncements

Note 3 Revenue

Note 4 Earnings Per Share

Note 5 Goodwill and Other Intangible Assets

Note 6 Discontinued Operations

Note 7 Redeemable Noncontrolling Interest

Note 8 Income Taxes

Note 9 Leases

Note 10 Long-Term Debt

Note 11 Stockholders' Equity

Note 12 Other Operating and Non-Operating Income (Expense)

Note 13 Impairment of Long-Lived Assets

Note 14 Commitments and Contingencies

Note 15 Product Warranties

Note 16 Retirement Plans and Post-Retirement Benefits

Note 17 Accumulated Comprehensive Income

Note 18 Segment Information

Summary of Significant Accounting Policies

Present and Prospective Accounting Pronouncements

Earnings Per Share

Goodwill and Other Intangible Assets

Discontinued Operations

Business Exit Charges

Long-Term Debt

Stockholders' Equity

Other Operating and Non-Operating Income (Expense)

Impairment of Long-Lived Assets

Commitments and Contingencies

Product Warranties

Retirement Plans and Post-Retirement Benefits

Accumulated Comprehensive Loss

Segment Information

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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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, and reliability.

The principal customers for our building solutions are retailers, wholesalers, and homebuilding and industrial businesses, in North America and South America, with limited sales to Asia, Australia, and Europe.

The Company operates 22 plants across the U.S., Canada, Chile, and Brazil, through foreign subsidiaries, and operates additional facilities through a joint venture.

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, and we make limited sales to customers in Asia, Australia, and Europe.

The Company operates 23 plants across the U.S., Canada, Chile, and Brazil, in certain cases, through foreign subsidiaries, and operates additional facilities 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.

During the year ended December 31, 2022, we sold our 50 % equity interest in two joint ventures that produce I-joists to Resolute Forest Products Inc., and we sold the remaining assets related to the EWP segment.

Accordingly, we have classified the related assets and liabilities associated with the EWP segment as discontinued operations in our Consolidated Balance Sheets.

The results of our EWP segment have been presented as discontinued operations in our Consolidated Statements of Income for all periods presented.

See Note 6 –Discontinued Operations for additional information.

See Note 18 below for further information regarding our products and segments.

In May 2023, we acquired an idle manufacturing facility in Wawa, Ontario, Canada from a third party for $ 80 million.

We anticipate converting the Wawa manufacturing facility into an LP SmartSide Trim & Siding mill in the future according to the needs of our business.

We are evaluating project schedules and market demand to determine when we will begin related construction work.

See "Note 18 - Segment Information" below for further information regarding our products and segments.

Basis of Presentation

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All dollar amounts are in millions except per share.

Reclassifications

In addition to the classification of the EWP segment as discontinued operations, we have made certain immaterial reclassifications to prior period presentation in order to conform to the current year presentation.

Cash and Cash Equivalents

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Trade receivables $ 104 $ 106

Income tax receivables 27 4

Other receivables 26 19

Income tax receivable 4 1

Allowance for doubtful accounts ( 2 ) ( 1 )

Total $ 127 $ 169

Total Receivables $ 155 $ 127

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

receivables at December 31, 2022 and 2021 primarily consisted of sales tax receivables, vendor rebates, a receivable associated with an affiliate, and other miscellaneous receivables.

Other receivables at December 31, 2023 and 2022 primarily consisted of sales tax receivables, vendor rebates, and other miscellaneous receivables.

Fair Value Measurements

12 unchanged sentences

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.

See "Note 10 - Long Term Debt" below for further information regarding the fair value of long-term debt instruments.

Trading securities consist of rabbi trust financial assets, which are recorded in other assets in our Consolidated Balance Sheets.

4 unchanged sentences

The FIFO (first-in, first-out) or average cost methods are used to value our inventories as of December 31, 2023.

Included in the inventory balance is a lower of cost or market adjustment of $ 22 million as of December 31, 2022, and $ 6 million as of December 31, 2021.

Inventories include a lower of cost or market adjustment of $ 7 million and $ 22 million as of December 31, 2023, and 2022, respectively.

Inventory consisted of the following (dollars in millions):

3 unchanged sentences

Finished products 217 180

Total $ 337 $ 278

Total Inventories $ 378 $ 337

Timber and Timberlands

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Timber that has been severed but has not yet been delivered to a facility is included in timber and timberlands.

As of December 31, 2022, and 2021, we had timber and timberlands of $ 12 million.

Timber licenses have a life of twenty to twenty-five years .

As of December 31, 2023, and 2022, we had timber and timberlands of $ 7 million and $ 12 million, respectively.

Timber licenses have a life of 20 to 25 years.

These licenses are amortized on a straight-line basis over the life of the facilities.

12 unchanged sentences

Property, plant, and equipment, net $ 1,540 $ 1,326

Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets, which typically range from five to twenty years for buildings and land improvements, three to fifteen years for equipment, and the shorter of the lease term or estimated useful lives for leasehold improvements.

Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets, which typically range from 5 to 20 years for buildings and land improvements, 3 to 15 years for equipment, and the shorter of the lease term or estimated useful lives for leasehold improvements.

Depreciation and amortization expense on property, plant, and equipment was included in our Consolidated Statements of Income as noted below (dollars in millions):

7 unchanged sentences

When impairment is indicated, the book values of the assets are written down to their estimated fair value as calculated by the expected discounted cash flow or estimated net sales price.

See Note 13 below for a discussion of charges related to impairments of property, plant, and equipment.

See "Note 13 - Impairment of Long-Lived Assets" below for a discussion of charges related to impairments of property, plant, and equipment.

Long-lived assets that are held for sale are written down to the estimated sales proceeds less cost to sell unless the estimated net proceeds exceed the carrying value.

1 unchanged sentence

Goodwill and indefinite-lived intangible assets are assessed annually for impairment during the fourth quarter or earlier upon the occurrence of certain events or substantive changes in circumstances.

In accordance with ASC 350, Intangibles – Goodwill and Other, companies may opt to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

In accordance with Accounting Standards Codification (ASC) 350, Intangibles – Goodwill and Other, companies may opt to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

A qualitative assessment includes factors such as financial performance, industry and market metrics, and other factors affecting the reporting unit.

If this assessment concludes that it is more likely than not that the fair value of a reporting unit exceeds its carrying value, then goodwill is not considered impaired, and no further impairment testing is required.

Conversely, if the qualitative assessment concludes that it is more likely than not that the fair value of a reporting unit is less than

its carrying value, we must then compare the fair value of the reporting unit to its carrying value.

Conversely, if the qualitative assessment concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying value, we must then compare the fair value of the reporting unit to its carrying value.

Impairment is evaluated by applying a fair value-based test.

Impairment losses would be recognized when the implied fair value of goodwill is less than its carrying value.

Our 2022 annual impairment assessment did not result in impairments of our goodwill or intangible assets.

During each of the years ended December 31, 2021, and 2020, we recognized non-cash impairment charges of $ 5 million, associated with goodwill from the purchase of our off-site construction operation, Entekra.

See Note 5 below for further discussion of goodwill and intangible assets.

In 2023, we announced the shutdown of our off-site framing operation Entekra Holdings LLC (Entekra), resulting in impairment charges of $ 9 million related to definite-lived intangible assets.

During the year ended December 31, 2021, we recognized non-cash impairment charges of $ 5 million, associated with the remaining goodwill from the purchase of Entekra.

See "Note 5 - Goodwill and Other Intangible Assets" below for further discussion.

Investments in Affiliates

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Our restricted cash accounts generally secure outstanding letters of credit.

The restricted cash balance at December 31, 2022, and 2021, was $ 14 million and $ 13 million, respectively.

The restricted cash balance at December 31, 2022 was $ 14 million.

There were no restricted cash balances as of December 31, 2023.

Accounts Payable and Accrued Liabilities

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Other accrued liabilities at December 31, 2023 and 2022, primarily consisted of accrued interest, worker compensation liabilities, warranty reserves, and other items.

Additionally, included in trade accounts payable is $ 48 million and $ 46 million related to capital expenditures that had not yet been paid as of December 31, 2022, and 2021, respectively.

Additionally, trade accounts payable included $ 15 million and $ 48 million related to capital expenditures that had not yet been paid as of December 31, 2023 and 2022, respectively.

Other Long-Term Liabilities

8 unchanged sentences

Asset Retirement Obligations

We record the fair value of the legal and conditional obligations to retire and remove long-lived assets in the period in which the obligation is incurred.

We record the fair value of the legal and conditional obligations to retire and remove long-lived assets in the periods in which the obligations are incurred.

These obligations primarily consist of monitoring costs on closed landfills, timber reforestation obligations associated with our timber licenses in Canada, and site restoration costs.

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We have made an accounting election to record this tax in the period the tax arises.

Redeemable Noncontrolling Interest

Redeemable noncontrolling interest in subsidiaries that is redeemable outside of our control is classified as mezzanine equity and measured at the greater of the estimated redemption value at the end of each reporting period or the historical cost basis of the noncontrolling interest adjusted for cumulative earnings allocations.

Net income attributed to noncontrolling interest is recorded in the Consolidated Statements of Income.

Any adjustments to the redemption value of redeemable noncontrolling interest are recognized in either net income or through accumulated paid-in capital, depending on the nature of the underlying security (preferred or common units).

Stock-Based Compensation

4 unchanged sentences

The key assumptions used in this model include expected volatility, risk-free rate, and average and grant date stock prices.

The estimate of expected volatility for performance units is based upon historical stock price volatility and the length of the performance period.

The estimate of expected volatility for performance stock units is based upon historical stock price volatility and the length of the performance period.

The risk-free interest rate is based on zero-coupon U.S.

9 unchanged sentences

These transaction gains or losses are recorded in Other non-operating items on the Consolidated Statements of Income.

The functional currencies of our Chilean, Brazilian, Argentinean, Colombian, Peruvian, and Paraguayan subsidiaries are their respective local currencies, and therefore, their books and records are maintained in local currency.

The functional currencies of our Chilean, Brazilian, Colombian, Peruvian, and Paraguayan subsidiaries are their respective local currencies.

Our Argentinean subsidiary operates under a highly inflationary economy and uses the Chilean Peso as the functional currency.

Assets and liabilities are translated into U.S.

dollars using rates of exchange at the balance sheet date.

Translation adjustments, which are based upon the exchange rate at the balance sheet date for assets and liabilities and the weighted average rate for the income statement, are recorded in Accumulated comprehensive loss in stockholders’ equity on the Consolidated Balance Sheets.

Transaction gains and losses are recorded in Other non-operating items on the Consolidated Statements of Income.

Advertising costs

3 unchanged sentences

We classify amounts unrelated to ongoing core operating activities as other operating credits and charges, net in the Consolidated Statements of Income.

Such items include, but are not limited to, restructuring charges (including severance charges), charges to establish and maintain litigation or environmental reserves, product reserves, gains or losses from settlements with governmental or other organizations, and gains (loss) on the sale or disposal of long-lived assets.

Such items include, but are not limited to, restructuring charges (including severance charges), business exit charges, charges to establish and maintain litigation or environmental reserves, product reserves, gains or losses from settlements with governmental or other organizations, and gains or losses on the sale or disposal of long-lived assets.

Due to the nature of these items, amounts in the income statement can fluctuate from year to year.

7 unchanged sentences

Recent Pronouncements Not Yet Adopted

In October 2021, the FASB issued Accounting Standards Update (ASU) 2021-08– Business Combinations (Topic 805) Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to the recognition of an acquired contract liability and to payment terms and their effect on subsequent revenue recognized by the acquirer.

The amendments in ASU 2021-08 require that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606.

At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts.

The amendments in ASU 2021-08 will become effective for us as of the beginning of our 2023 fiscal year.

We do not expect that this guidance will have a material impact upon our financial position and results of operations.

The following table presents our reportable segment revenues, disaggregated by revenue source.

Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

This ASU expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, and an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets.

This pronouncement is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

We are currently evaluating the impact of adopting this ASU on our consolidated financial statements and disclosures.

Income Taxes (Topic 740):

Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which focuses on the rate reconciliation and income taxes paid.

2023-09 requires a public business entity (PBE) to disclose, on an annual basis, a tabular rate reconciliation using both percentages and currency amounts, broken out into specified categories with certain reconciling items further broken out by nature and jurisdiction to the extent those items exceed a specified threshold.

In addition, all entities are required to disclose income taxes paid, net of refunds received disaggregated by federal, state/local, and foreign and by jurisdiction if the amount is at least 5% of total income tax payments, net of refunds received.

This pronouncement is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

We are currently evaluating the impact of adopting this ASU on our consolidated financial statements and disclosures.

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

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

As noted in the segment reporting information in Note 18 below, our reportable segments are:

Siding, OSB, and South America (dollars in millions).

As noted in the segment reporting information in "Note 18 - Segment Information" below, our reportable segments are:

Siding, OSB, and LPSA.

The following table presents our reportable segment revenues, disaggregated by revenue source (dollars in millions):

Year Ended December 31, 2023

By Product type and family:

Siding OSB South America Other Inter-segment Total

Siding OSB LPSA Other Inter-segment Total

Siding Solutions $ 1,319 $ — $ 24 $ — — $ 1,343

6 unchanged sentences

By Product type and family:

Siding OSB South America Other Inter-segment Total

Siding OSB LPSA Other Inter-segment Total

Siding Solutions $ 1,463 $ — $ 23 $ — $ — $ 1,486

6 unchanged sentences

By Product type and family:

Siding OSB South America Other Inter-segment Total

Siding OSB LPSA Other Inter-segment Total

Siding Solutions $ 1,158 $ — $ 33 $ — $ — $ 1,191

4 unchanged sentences

$ 1,170 $ 2,387 $ 265 $ 95 $ ( 3 ) $ 3,915

Revenue is recognized when obligations under the terms of a contract ( i.e.

Revenue is recognized when obligations under the terms of a contract ( e.g.

, purchase orders) with our customers are satisfied;

6 unchanged sentences

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 deductions from net sales at the time the program is initiated.

These reductions from revenue are recorded at the time of sale or the implementation of the program based on management’s best estimates.

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 at the later of the time of sale or the implementation of the program based on management’s best estimates.

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

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

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).

As of December 31, 2022, and 2021, we accrued $ 46 million and $ 31 million, respectively, as customer rebates recorded in accounts payable and accrued liabilities on our Consolidated Balance Sheets.

As of December 31, 2023 and 2022, we accrued $ 37 million and $ 46 million, respectively, for customer rebates recorded in accounts payable and accrued liabilities on our Consolidated Balance Sheets.

We ship some of our products to customers' distribution centers on a consignment basis.

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Income from continuing operations $ 178 $ 885 $ 1,302

Net loss attributed to noncontrolling interest 3 4 2

Net loss attributed to non-controlling interest — 3 4

Income attributed to LP from continuing operations 178 888 1,306

Income for discontinued operations, net of income taxes 198 71 12

Income from discontinued operations, net of income taxes — 198 71

Net income attributed to LP $ 178 $ 1,086 $ 1,377

12 unchanged sentences

Changes in goodwill by segment for the years ended December 31, 2023 and 2022, are provided in the following table (dollars in millions):

Siding OSB Other Total

Siding OSB Total

Balance at December 31, 2021

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Balance at December 31, 2022

Impairment — ( 7 ) ( 2 ) ( 9 )

Amortization ( 3 ) ( 1 ) — ( 4 )

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

The Company’s goodwill is evaluated for impairment annually during the fourth quarter or more frequently if events indicate the carrying value of a reporting unit may not be recoverable.

The 2021 impairment test for Entekra indicated the carrying value exceeded the estimated fair value.

The difference was recorded as a non-cash loss on impairment of $ 5 million for the year ended December 31, 2021, within loss on impairments in the Consolidated Statements of Income.

Included in the balance of timber licenses are values allocated to Canadian forest licenses whose initial value of $ 91 million is amortized over the estimated useful life of twenty to twenty-five years .

Amortization expense related to definite-lived intangible assets was $5 million for each of the years ended December 31, 2022, 2021, and 2020.

The Company’s goodwill and other intangible assets are evaluated for impairment annually during the fourth quarter or more frequently if events indicate the carrying value of a reporting unit may not be recoverable.

During the year ended December 31, 2023, we recorded impairment charges of $ 9 million related to developed technology and trademarks related to Entekra, which is discussed further in “Note 7 - Business Exit Charges.”

Included in the balance of timber licenses are values allocated to Canadian forest licenses whose initial value of $ 91 million is amortized over the estimated useful life of 20 to 25 years.

Amortization expense related to definite-lived intangible assets was $ 4 million for the year ended December 31, 2023 and $ 5 million for each of the years ended December 31, 2022 and 2021.

Amortization of the above-described intangible assets will be $ 3 million per year over the next five years.

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The total net carrying value of our equity method investment at the date of sale was $ 19 million, and the Company recognized a gain associated with the sale of $ 39 million within Income from discontinued operations, net of income taxes in the Consolidated Statements of Income.

On August 1, 2022, the Company completed the sale of the assets related to the EWP segment to the Purchaser.

On August 1, 2022, the Company completed the sale of the assets related to the EWP segment.

As a result of the sale, the Company received $ 217 million in gross cash proceeds after taking into account working capital adjustments.

1 unchanged sentence

The net carrying value of the EWP assets at the time of sale was $ 87 million, which resulted in a pre-tax gain of approximately $ 118 million within Income from discontinued operations, net of income taxes in the Consolidated Statements of Income.

Upon closing, the Company entered into the TSA with the Purchaser, pursuant to which the Company agreed to support the various activities of the EWP segment for a period not to exceed eight months .

During the year ended December 31, 2022, the Company collected $ 76 million on the Purchaser's behalf pursuant to the TSA.

As of December 31, 2022, the Company has $ 10 million due to the Purchaser, which is included in Accounts payable and accrued liabilities within the Consolidated Balance Sheets.

The Company has classified the results of its EWP segment as discontinued operations in its Consolidated Statements of Income and has classified the related assets and liabilities associated with the EWP segment as discontinued operations in our Consolidated Balance Sheets for the prior periods presented.

Upon closing, the Company entered into a transition services agreement, pursuant to which the Company agreed to support the various activities of the EWP segment, which concluded during the year ended December 31, 2023.

The Company has classified the results of its EWP segment as discontinued operations in its Consolidated Statements of Income for the prior periods presented.

The following table presents the financial results of the EWP segment (dollars in millions):

Year Ended December 31,

2022 2021 2020

Net sales $ 455 $ 638

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Income from discontinued operations, net of income taxes $ 198 $ 71

1 Reflects operating results through August 1, 2022, when the assets related to the EWP segment were sold.

The following summarizes the total cash provided by operations and total cash used for investing activities related to the EWP segment and included in the Consolidated Statements of Cash Flows (dollars in millions):

Year Ended December 31,

2022 2021 2020

Net cash provided by discontinued operating activities $ 16 $ 71

Net cash provided by (used in) discontinued investing activities $ 261 $ ( 6 )

Net cash provided by discontinued investing activities for the year ended December 31, 2022, includes $ 59 million of proceeds from the sale of our 50 % equity interest in two joint ventures that produce I-joists and $ 205 million of net proceeds from the sale of the EWP segment assets.

Capital expenditures for discontinued operations totaled $ 3 million, $ 6 million, and $ 7 million for the years ended December 31, 2022, 2021, and 2020, respectively.

Included in Net cash provided by discontinued operating activities is depreciation and amortization of $ 3 million, $ 5 million, and $ 4 million for the years ended December 31, 2022, 2021, and 2020, respectively.

The following table presents the aggregate carrying amounts of discontinued operations related to the EWP segment in the Consolidated Balance Sheets (dollars in millions):

December 31, 2021

Carrying amounts of assets included as part of discontinued operations:

Accounts receivable, net $ 22

Inventories 46

Timber and timberlands 42

Property, plant, and equipment, net 30

Operating lease assets 1

Investments in and advances to affiliates 14

Total assets classified as discontinued operations in the Consolidated Balance Sheet $ 156

Carrying amounts of liabilities included as part of discontinued operations:

Accounts payable and accrued liabilities $ 34

Other liabilities 42

Total liabilities classified as discontinued operations in the Consolidated Balance Sheet $ 76

REDEEMABLE NONCONTROLLING INTEREST

Redeemable noncontrolling interest is interest in subsidiaries that is redeemable outside of our control, either for cash or other assets.

These interests are classified as mezzanine equity and measured at the greater of estimated redemption value or carrying value at the end of each reporting period.

Net loss attributed to noncontrolling interest is recorded in the Consolidated Statements of Income.

The components of redeemable noncontrolling interests are as follows (dollars in millions):

Beginning balance $ 4 $ 10

Adjustment to redemption value (through accumulated paid-in capital) — ( 1 )

Net loss attributable to noncontrolling interest ( 3 ) ( 3 )

Impairment charge attributed to noncontrolling interest — ( 1 )

Ending balance $ — $ 4

Net cash provided by discontinued investing activities for the year ended December 31, 2022, included $59 million of proceeds from the sale of our 50% equity interest in two joint ventures that produced I-joists and $ 205 million of net proceeds from the sale of the EWP segment assets.

Capital expenditures for discontinued operations totaled $ 3 million and $ 6 million for the years ended December 31, 2022 and 2021, respectively.

Included in net cash provided by discontinued operating activities is depreciation and amortization of $ 3 million and $ 5 million for the years ended December 31, 2022 and 2021, respectively.

BUSINESS EXIT CHARGES

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

Business exit charges were $ 32 million for year ended December 31, 2023, which consisted of the following (dollar amounts in millions):

Year Ended December 31,

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

Restructuring and other related charges:

Inventory write-down 2

Other expenses including personnel-related costs such as severance 3

Total Business exit charges $ 32

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

2 Included within cost of sales on the Consolidated Income Statements.

3 Included within other operating credits and charges, net on the Consolidated Income Statements.

Income Tax Provision

The components of income from continuing operations before income taxes, including equity in unconsolidated affiliates, were (dollars in millions):

Year Ended December 31,

Years Ended December 31,

Domestic $ 207 $ 961 $ 1,491

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The components of our income tax provision (benefit) from continuing operations were (dollars in millions):

Year Ended December 31,

Current tax provision:

Years Ended December 31,

Current tax provision (benefit):

federal $ 17 $ 180 $ 284

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We paid income taxes, net of refunds, of $ 65 million, $ 320 million, and $ 421 million during 2023, 2022, and 2021, respectively.

Included in our Consolidated Balance Sheets at December 31, 2022, and 2021, is a net income tax payable of $ 16 million, and $ 12 million, respectively.

Included in our Consolidated Balance Sheet at December 31, 2023 is a net income tax receivable of $ 22 million compared to a net income tax payable of $ 16 million at December 31, 2022.

Deferred Taxes

The tax effects of significant temporary differences creating deferred tax assets and liabilities were (dollars in millions):

Deferred tax assets:

Accrued liabilities $ 21 $ 20

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Inventories 14 9

Benefit relating to capital loss, NOL carryforward, and credit carryforwards 10 6

Operating lease liabilities 8 7

Stock-based compensation 6 4

Benefit relating to capital loss, NOL carryforwards, and credit carryforwards 6 7

Pension and post-retirement benefits 1 4

Deferred revenue 3 3

Other deferred tax assets 11 15

Total deferred tax assets 86 74

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Total deferred tax asset after valuation allowance 82 70

Deferred tax liabilities:

Property, plant, and equipment ( 188 ) ( 152 )

Timber and timberlands ( 7 ) ( 8 )

Unremitted foreign earnings ( 21 ) —

Operating lease assets ( 8 ) ( 7 )

Investment in Entekra ( 7 ) ( 7 )

Timber and timberlands ( 6 ) ( 7 )

Other deferred tax liabilities ( 4 ) ( 3 )

Total deferred tax liabilities ( 234 ) ( 176 )

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Long-term deferred tax liability ( 162 ) ( 113 )

$ ( 106 ) $ ( 84 )

Net deferred tax liabilities $ ( 152 ) $ ( 106 )

The benefit relating to capital loss, operating loss, and credit carryforwards included in the above table at December 31, 2023, consisted of (dollars in millions):

Operating Loss Benefit Amount Valuation Allowance Expiration Beginning in

State credit carryforwards $ — $ 1 $ — 2034

Chile operating loss carryforwards 8 2 — No expiration

Argentina operating loss carryforwards $ 8 $ 3 $ — 2028

Canadian capital loss carryforwards — 4 ( 4 ) No expiration

Chile operating loss carryforwards 4 1 — No expiration

State credit carryforwards — 2 — 2034

Total $ 12 $ 10 $ ( 4 )

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If future years’ earnings differ from the estimates used to establish these valuation allowances, or other objective positive or negative evidence arises, we may record an adjustment to the valuation allowance resulting in an impact on tax provision (benefit) for that period.

As of December 31, 2022, certain of our foreign subsidiaries had accumulated undistributed earnings of approximately $ 232 million, combined.

These earnings have been, and are intended to be, indefinitely reinvested in our foreign operations, and we expect future U.S.

cash generation to be sufficient to meet our future U.S.

As a result, no deferred taxes have been recorded with respect to the difference between the financial accounting value and the tax basis in these subsidiaries.

Since most of these earnings have previously been subject to the one-time U.S.

transition tax on foreign earnings required by the 2017 Tax Cuts and Jobs Act, they are eligible to be repatriated without additional U.S.

Any additional taxes due with respect to such earnings, if repatriated to the U.S., would generally be limited to foreign withholding taxes, net of U.S.

foreign tax credits, which we estimate could be up to $ 30 million.

Tax Rate Reconciliation

In the second quarter of 2023 we assessed the overall financial position of our foreign subsidiaries and management decided it no longer has the intent to indefinitely reinvest undistributed earnings in Chile and Brazil.

As a result of this change, we recorded deferred taxes relating to the tax effect of repatriating all unremitted earnings in Chile and Brazil.

The deferred tax liability is reflective of the difference between outside book and outside tax basis associated with the investments in LP Brasil, LP Chile, and LP South America.

However, LP expects the outside basis difference to reverse through dividend distributions and the primary tax impacts of these distributions are expected to be Chilean income tax withheld on dividend income received by LP Corporation, and tax related to Section 986(c) foreign exchange gain or loss on distributions of earnings subject to U.S.

GILTI tax in prior periods.

As of December 31, 2023, LP Corporation expects to incur Chilean withholding tax of approximately $ 22 million on the potential distributions of Chile and Brazil cumulative earnings and will be able to claim a foreign tax credit of $ 1 million, for a net tax deferred tax liability of $ 21 million.

The charge was recorded as a component of income tax expense from continuing operations for the year ended December 31, 2023.

In 2021 the Organization for Economic Cooperation and Development (OECD) announced an Inclusive Framework on Base Erosion and Profit Shifting including Pillar Two Model Rules defining the global minimum tax, which calls for the taxation of large multinational corporations at a minimum rate of 15%.

Subsequently multiple sets of administrative guidance have been issued.

Many non-U.S.

tax jurisdictions have either recently enacted legislation to adopt certain components of the Pillar Two Model Rules beginning in 2024 with the adoption of additional components in later years or announced their plans to enact legislation in future years.

Although we expect increased tax compliance efforts as a result of new legislation, we do not expect Pillar 2 to have a significant impact on our effective tax rate or our consolidated results of operations, financial position and cash flows.

Reconciliation of the U.S.

federal statutory tax rates to the total effective tax rates from continuing operations (dollars in millions):

Year Ended December 31,

Federal Statutory Rate to the Effective Rate

Reconciliation of the U.S.

federal statutory tax rate to the total effective tax rates from continuing operations (dollars in millions):

Years Ended December 31,

Amount ($) Percent (%) Amount ($) Percent (%) Amount ($) Percent (%)

Federal tax rate $ 53 21 % $ 243 21 % $ 358 21 %

State and local income taxes net of federal benefit 3 3 3

State and local income taxes 8 3 34 3 43 3

Effect of foreign tax rates 3 1 9 1 16 1

Uncertain tax positions 7 3 ( 2 ) — ( 1 ) —

Other, net ( 1 ) ( 1 ) ( 1 )

Effective tax rate (%) 24 % 24 % 20 %

Unremitted foreign earnings 25 10 — — — —

Non deductible compensation 6 2 6 — 3 —

Tax credits ( 5 ) ( 2 ) ( 4 ) — ( 4 ) —

Prior year changes in tax laws and positions ( 9 ) ( 3 ) — — — —

Revisions to prior year estimates ( 7 ) ( 3 ) 2 — ( 3 ) —

Other items, net ( 7 ) ( 3 ) ( 14 ) ( 1 ) ( 10 ) ( 1 )

Provision for income taxes $ 74 29 % $ 274 24 % $ 402 24 %

We are subject to U.S.

federal income tax as well as income taxes of multiple state jurisdictions.

Our foreign subsidiaries are subject to income tax in Canada, Chile, Brazil, Peru, Colombia, Argentina, and Paraguay.

Our foreign subsidiaries are subject to income tax in Canada, Chile, Brazil, Peru, Colombia, Argentina, Paraguay, and Mexico.

We generally remain subject to U.S.

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In addition to the U.S., we have tax years that remain open and subject to examination by tax authorities in the following major tax jurisdictions:

Brazil and Chile for tax years 2016 and subsequent, and Canada for tax years 2017 and subsequent.

Brazil and Chile for tax years 2017 and subsequent;

and Canada for tax years 2018 and subsequent.

Our tax returns are currently under examination by tax authorities in the U.S.

for years 2018 and 2019, in Canada for years 2017 and 2018, and in Chile for years 2016 through 2018.

for years 2018, 2019, and 2020, in Canada for year 2019, and in Chile for years 2016 and 2020.

Uncertain Tax Positions

Tabular reconciliation of the total amount of unrecognized tax benefits at the beginning and end of the years presented (dollars in millions):

Tabular reconciliation of the total amount of unrecognized tax benefits at the beginning and end of the years (dollars in millions):

Beginning balance $ 6 $ 9 $ 11

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Ending balance $ 13 $ 6 $ 9

Included in the above balances at December 31, 2022, is $ 6 million of tax benefits that, if recognized, would affect our effective tax rate.

We accrued and paid no interest during 2022 and 2021.

Included in the above balances at December 31, 2023, are $ 13 million of tax benefits that, if recognized, would affect our effective tax rate.

We accrued interest of $ 2 million and paid no interest during 2023.

We accrued and paid no interest during 2022.

Our lease portfolio consists primarily of real estate, mobile equipment at our manufacturing facilities, rail cars to transport our products, and a fleet of vehicles.

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The lease term for all our leases includes the non-cancellable period of the lease plus any additional periods covered by either an option to extend (or not to terminate) the lease that we are reasonably certain to exercise, or an option to extend (or not to terminate) the lease controlled by the lessor.

As of December 31, 2022 , our weighted average discount rate was four percent, and our weighted average remaining lease term was eleven years for operating leas es.

Our operating leases are included in our Consolidated Balance Sheets and Consolidated Statement of Incomes as follows (dollars in millions):

As of December 31, 2023 , our weighted average discount rate was 3 % , and our weighted average remaining lease term was seven years for operating leas es.

Our operating leases are included in our Consolidated Balance Sheets and Consolidated Statements of Income as follows (dollars in millions):

Classification December 31,

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We made cash payments of $ 10 million and $ 9 million during the years ended December 31, 2023 and 2022, respectively, related to our operating leases.

We further incurred operating lease expense of $ 4 million and $ 6 million related to short-term rent expense for the years ended December 31, 2023 and 2022, respectively.

We obtained right of use (ROU) assets in exchange for new operating lease liabilities of $ 4 million and $ 4 million for the years ended December 31, 2023 and 2022, respectively.

We did not enter into any financing leases during 2023 or 2022.

In connection with the Entekra shutdown described in " Note 7 - Business Exit Charges,” we terminated the related lease arrangements and derecognized the associated operating lease assets and liabilities, resulting in a non-cash pre-tax impairment charge of $ 3 million.

The following table sets forth the minimum lease payments that are expected to be made in each of the years indicated (dollars in millions):

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Long-term portion $ 350 $ ( 3 ) $ 347 $ 350 $ ( 4 ) $ 346

In March 2021, we issued $ 350 million of the 3.625 % Senior Notes due in 2029 (2029 Senior Notes).

In March 2021, we issued $ 350 million of 3.625 % Senior Notes due in 2029 (2029 Senior Notes).

We may redeem the 2029 Senior Notes, in whole or in part, prior to March 15, 2024, at a redemption price equal to 100 % of the principal amount thereof plus a “make-whole” premium set forth in the indenture governing our 2029 Senior Notes, plus accrued and unpaid interest, if any, to, but not including, the date of redemption.

On or after March 15, 2024, we may, at our option on one or more occasions, redeem all or any portion of these notes at the redemption prices set forth in the indenture governing the 2029 Senior Notes, plus accrued and unpaid interest, if any, to, but not including, the date of redemption.

The indenture governing the 2029 Senior Notes contains certain covenants that, among other things, limit our ability to grant liens to secure indebtedness, engage in sale and leaseback transactions and merge or consolidate or sell all or substantially all of our assets.

If we are subject to a "change of control," as defined in the indenture, we are required to offer to repurchase the 2029 Senior Notes at a purchase price equal to 101 % of the principal amount thereof plus accrued and unpaid interest, if any, thereon to, but not including, the date of purchase.

The indenture governing the 2029 Senior Notes contains customary events of default, including failure to make required payments on the 2029 Senior Notes, failure to comply with certain agreements or covenants contained in the indenture, failure to pay or acceleration of certain other indebtedness and certain events of bankruptcy and insolvency.

The indenture governing the 2029 Senior Notes contains certain covenants that, among other things, limit our ability to grant liens to secure indebtedness, engage in sale and leaseback transactions, merge or consolidate or sell all or substantially all of our assets.

If we are subject to a "change of control," as defined in the indenture governing our 2029 Senior Notes, we are required to offer to repurchase the 2029 Senior Notes at a purchase price equal to 101 % of the principal amount thereof plus accrued and unpaid interest, if any, thereon to, but not including, the date of purchase.

The indenture governing the 2029 Senior Notes contains customary events of default, including failure to make required payments on the 2029 Senior Notes, failure to comply with certain agreements or covenants contained in the indenture governing our 2029 Senior Notes, failure to pay or acceleration of certain other indebtedness and certain events of bankruptcy and insolvency.

An event of default in the indenture allows either the indenture trustee or the holders of at least 25 % in aggregate principal amount of the then-outstanding 2029 Senior Notes to accelerate, or in certain cases, automatically causes the acceleration of, the amounts due under the 2029 Senior Notes.

In September 2016, we issued $ 350 million aggregate principal amount of the Senior Notes due 2024 (2024 Senior Notes).

In March 2021, we used the proceeds from the issuance of the 2029 Senior Notes and cash on hand to redeem all of the outstanding 2024 Senior Notes at a redemption price of 102.438 % of the principal amount thereof plus accrued and unpaid interest to, but not including, the redemption date.

In connection with this redemption, we recorded an early debt extinguishment charge of $ 11 million, recorded within Other non-operating items on the Consolidated Statements of Income, which included $ 9 million of redemption premium and $ 2 million of unamortized debt costs associated with these notes.

Deferred debt costs are amortized over the life of the related debt using a straight-line basis which approximates the effective interest method.

If the debt is retired early, the related unamortized deferred financing costs are written off in the period the debt is retired to other non-operating items.

During the year ended December 31, 2021, $ 2 million was written off in association with the 2024 Senior Notes extinguishment, and we paid $ 4 million in debt issuance costs that will be deferred and amortized over the life of the 2029 Senior Notes.

Credit Facility

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

Credit Facilities

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

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

The Credit Agreement amended and restated the Company’s existing credit facility dated as of June 27, 2019, as amended, in its entirety to, among other things, (i) reflect the release of the collateral that secures the indebtedness evidenced by the Credit Agreement as a result of the Company’s obtaining an Investment Grade rating on November

1, 2022 (which collateral may be reinstated from time to time in accordance with the terms of the Credit Agreement), (ii) extend the maturity date to November 29, 2028, (iii) make certain changes to effect a transition from the LIBOR interest rate benchmark to Term SOFR Rate (as defined in the Credit Agreement) and (iv) provide for certain other modifications (including modifications to certain basket and threshold levels in the negative covenants) as set forth in the Credit Agreement.

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

There were no outstanding amounts borrowed under the Amended Credit Facility as of December 31, 2023.

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The Amended Credit Facility also includes an unused commitment fee, due quarterly, ranging from 0.200 % to 0.425 %.

The applicable margins and fees within these ranges are based on our ratio of consolidated Earnings before interest, depreciation and amortization (EBITDA) to cash interest charges.

The applicable margins and fees within these ranges are based on our ratio of consolidated Earnings before interest, taxes, depreciation and amortization (EBITDA) to cash interest charges.

The “base rate” is the highest of (i) the Federal funds rate plus 0.5 %, (ii) the U.S.

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

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

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

, funded debt less unrestricted cash to total capitalization) of no more than 57.5 %.

In March 2020, LP entered into a letter of credit facility agreement (Letter of Credit Facility) with Bank of America, N.A., which 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 includes a letter of credit fee, due quarterly, ranging from 0.500 % to 1.875 % of the daily available amount to be drawn on each letter of credit issued under the Letter of Credit Facility.

In March 2020, LP entered into a letter of credit facility agreement (the Letter of Credit Facility) with Bank of America, N.A., which 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 includes quarterly a letter of credit fee in an amount equal to 1.875 % of the daily available amount to be drawn on each letter of credit issued under the facility;

provided, that if all letters of credits issued under the Letter of Credit Facility have been cash collateralized, the applicable rate of the letter of credit fee is reduced to 0.500 %.

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

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We amortized deferred debt costs of $ 1 million for each of the years ended December 31, 2023, 2022, and 2021.

The weighted average interest rate for all long-term debt at December 31, 2022, and 2021, was approximately 3.6 % and 3.6 %, respectively.

The weighted average interest rate for all long-term debt at both December 31, 2023 and 2022 was approximately 3.6 %.

Required repayment of principal for long-term debt is as follows (dollars in millions):

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(Dollars in millions) 2023

Total stock-based compensation expense (costs of sales, selling, general and administrative, and other operating credits and charges, net) $ 19 $ 16 $ 11

Total stock-based compensation expense (cost of sales, selling, general and administrative, and other operating credits and charges, net) $ 13 $ 19 $ 16

Income tax benefit related to stock-based compensation $ 2 $ 8 $ 3

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We recognize the compensation costs on a straight-line basis over the requisite service period of the award, which is generally the vesting term of three years.

Prior to January 1, 2018, we granted SSARs to key employees.

Prior to January 1, 2018, we granted SSARs to key employees under the Company's then-current stock award plan.

On exercise, we generally issue these shares from treasury.

The SSARs are granted at market price at the date of grant.

SSARs become exercisable over three years and expire ten years after the date of grant.

The SSARs were granted at market price at the date of grant.

The SSARs became exercisable over three years and expire ten years after the date of grant.

All outstanding SSARs were vested as of December 31, 2023.

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We grant time-vested restricted stock units and performance stock units (PSUs) to certain key employees and time-vested restricted stock units to non-employee directors under our stock award plan.

Generally, time-vested restricted stock units granted prior to January 1, 2020, are subject to cliff-vesting on the third anniversary of the date of grant for employees and on the first anniversary for non-employee directors.

Those restricted stock units granted after January 1, 2020, vest ratably over a three-year vesting period for employees and vest in full on the first anniversary of the grant date for non-employee directors.

Restricted stock units (RSUs) vest ratably over a three-year vesting period for employees and vest in full on the first anniversary of the grant date for non-employee directors.

Certain of these awards are eligible to receive dividend equivalent shares.

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Awards based upon the achievement of the performance goals are earned ratably from 0 % to 200 %.

If the performance goals are met at the end of the performance period, the award is adjusted to reflect LP's three-year total shareholder return (TSR) performance relative to a capital market peer group.

If the performance goals are met at the end of the performance period, the award may be adjusted based on LP's three-year total shareholder return (TSR) performance relative to a capital market peer group.

This TSR modifier can increase or decrease the award by 20 %, although the TSR modifier cannot cause the award to exceed the maximum of 200 %.

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To be recognized over weighted-average period of years 0 1

______________

1 Expected to vest based upon historical forfeiture rate.

In October 2023, LP modified the performance vesting criteria of approximately 105,000 and 75,000 PSU awards outstanding that were granted in 2021 and 2022, respectively.

The original awards were canceled, and the modified awards were considered granted on the modification date.

Stock-based compensation expense related to these modified awards will be recognized over the remaining vesting period based on the expected number of awards to vest using fair values per share of between $49.36 and $53.47.

Stock-based compensation expense related to 2021 PSU modification was $4 million for the year ended December 31, 2023.

The aggregate intrinsic value of the stock options and SSARs is the total pre-tax intrinsic value (the difference between our closing stock price on the last trading day of a fiscal year and the exercise price, multiplied by the number of in-the-money options and SSARs) that would have been received by the holders had all holders exercised their awards on the last day of such fiscal year.

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Share Repurchases

On February 6, 2020, we announced that our Board of Directors authorized a share repurchase program (2020 Share Repurchase Program) under which LP had the ability to repurchase up to $ 200 million of shares of its common stock, and on November 4, 2020, we announced that our Board of Directors expanded the 2020 Share Repurchase Program by authorizing repurchases of an additional $ 300 million of our common stock.

On May 4, 2021, our Board of Directors authorized an additional share repurchase program (First 2021 Share Repurchase Program) under which we had the ability to repurchase up to $ 1 billion of shares of our common stock.

On November 2, 2021, our Board of Directors authorized an additional share repurchase plan under which we had the ability to repurchase up to $ 500 million shares of our common stock (Second 2021 Share Repurchase Program).

On May 3, 2022, we announced that our Board of Directors authorized a share repurchase program (2022 Share Repurchase Program) under which LP may repurchase up to $ 600 million of shares of its common stock.

We repurchased approximately 14 million shares of our common stock through market purchases during 2022 for a total of $ 900 million at an average price of $ 62.37 per share.

During 2021, we repurchased approximately 21 million shares of our common stock at an average price of $ 61.52 per share through market purchases and during 2020, we repurchased approximately 6 million shares of our common stock at an average price of $ 32.69 per share through market purchases.

We have remaining capacity of $ 200 million under the 2022 Share Repurchase Program as of December 31, 2022.

On May 4, 2021, our Board of Directors authorized a share repurchase program (First 2021 Share Repurchase Program) under which we had the ability to repurchase shares of our common stock totaling up to $ 1 billion.

On November 2, 2021, our Board of Directors authorized an additional share repurchase plan under which we had the ability to repurchase shares of our common stock totaling up to $ 500 million (Second 2021 Share Repurchase Program).

On May 3, 2022, we announced that our Board of Directors authorized a share repurchase program (2022 Share Repurchase Program) under which we may repurchase shares of our common stock totaling up to $ 600 million.

During 2021, we paid $ 1.3 billion to repurchase approximately 21 million shares of our common stock at an average price of $ 61.52 per share through market purchases.

During 2022, we paid $ 900 million to repurchase approximately 14 million shares of our common stock through market purchases at an average price of $ 62.37 per share.

No purchases were made under the 2022 Share Repurchase Program during 2023.

There are no amounts remaining under the First 2021 Share Repurchase Program or the Second 2021 Share Repurchase Program as of December 31, 2023.

There is $ 200 million remaining under the 2022 Share Repurchase Program as of December 31, 2023.

Employee Stock Purchase Plan

Our employee stock purchase plan (ESPP) provides our participating employees an opportunity to obtain shares of

our common stock at a discount (through payroll deductions over six-month periods).

Our employee stock purchase plan (ESPP) provides our participating employees an opportunity to obtain shares of our common stock at a discount (through payroll deductions over six-month periods).

At December 31, 2023, two million shares of common stock were reserved for issuance under the ESPP.

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Insurance recoveries $ — $ 15 $ 4

Reorganization and facility curtailment charges ( 7 ) ( 1 ) ( 5 )

Canadian wage subsidies — — 6

Product-line discontinuance charges — — ( 8 )

Legal settlement ( 16 ) — —

Reorganization charges ( 8 ) ( 7 ) ( 1 )

Environment costs — ( 2 ) ( 4 )

Product liability settlement — 8 —

Gain (loss) on asset sales 6 ( 1 ) ( 2 )

Other ( 1 ) 2 3

$ ( 19 ) $ 16 $ 1

During 2023, we agreed to pay $ 16 million to resolve certain patent-related claims and to obtain certain patent rights.

We incurred severance and other charges of $ 8 million related to certain reorganizations and recognized a $ 6 million gain on the sale of assets.

During 2022, we received $ 15 million in insurance recoveries related to business interruption claims for weather-related downtime sustained in the prior year.

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Additionally, we received $ 4 million in insurance recoveries related to business interruption claims for weather-related downtime sustained in the prior year.

During 2020, we recognized a charge of $ 3 million related to additional estimated environmental costs to be paid by a third party associated with a non-operating site.

We also incurred severance and other charges of $ 5 million related to certain reorganizations, and we recorded a charge of $ 8 million related to the discontinuance of our fiber product (primarily related to fiber inventory adjustments to net realizable values).

Additionally, we received $ 6 million of Canadian wage subsidies during 2020.

Non-operating income (expense)

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Interest income $ 18 $ 14 $ 1

Gain on sale of auction rate securities — — 3

SERP market adjustments — — ( 1 )

Investment income $ 18 $ 14 $ 1

Net periodic pension cost, excluding service cost $ — $ ( 6 ) $ ( 1 )

Foreign currency gains (losses) ( 11 ) ( 8 ) 5

Foreign currency gains (losses), net ( 40 ) ( 11 ) ( 8 )

Loss on early debt extinguishment — — ( 11 )

Pension settlement charges ( 4 ) ( 82 ) ( 2 )

Gain on acquisition of controlling interest 2 — —

Other non-operating items $ ( 43 ) $ ( 97 ) $ ( 22 )

During 2023, we completed the termination of our U.S.

and Canadian defined benefit pension plans resulting in the recognition of non-cash, pre-tax charges of $ 4 million.

Additionally, we recognized $ 40 million of foreign currency losses primarily driven by $ 32 million of transactional losses on the Argentine peso.

During 2022, we recognized $ 82 million of pension settlement expense related to a portion of the unrecognized actuarial loss that was included in accumulated comprehensive loss.

During 2021, we recorded an early debt extinguishment charge of $ 11 million, which included $ 9 million of redemption premium and $ 2 million of unamortized debt costs associated with the early redemption of the 2024 Senior Notes.

Additionally, we recognized $ 2 million of pension settlement expense related to a portion of the unrecognized actuarial loss.

During 2020, we sold our auction rate securities (ARS) and recognized a $ 3 million gain on available-for-sale-securities.

IMPAIRMENT OF LONG-LIVED ASSETS

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

As of December 31, 2022, and 2021, the fair values of LP's facilities were in excess of their carrying value, which supported the conclusion that no impairment is necessary for those facilities.

However, if demand and pricing for our products fall to levels significantly below cycle average demand and pricing, or 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.

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

We review the carrying values of our long-lived assets for potential impairments and believe we have adequate support for the carrying value of each of these assets based upon the anticipated cash flows that result from our estimates of future demand, pricing, and production costs, assuming certain levels of planned capital expenditures.

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

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

Because a determination to dispose of particular assets can require management to make assumptions regarding the transaction structure of the disposition and to estimate the net sales proceeds, which may be less than previous estimates of undiscounted future net cash flows, we may be required to record impairment charges in connection with decisions to dispose of assets.

During 2020, we recorded $ 9 million in pre-tax impairment charges primarily related to our fiber-producing assets at a Siding facility.

These impairment charges reflect the announced accelerated conversion of this facility from a fiber production facility to a finishing facility in February 2020.

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

See further discussion in “Note 7 - Business Exit Charges”.

Further, $ 6 million of non-cash, pre-tax impairment charges were recognized related to the Granite City, Illinois facility which is scheduled for closure in 2024, including $4 million of property, plant, and equipment and $2 million related

to operating lease assets.

During 2022, we recognized $1 million of pre-tax impairment charges.

These assets were written down to fair value based on Level 2 inputs under ASC 820, Fair Value Measurement, using quoted market prices.

COMMITMENTS AND CONTINGENCIES

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Other Proceedings

We and our subsidiaries are parties to legal proceedings in the ordinary course of business.

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

We are party to other legal proceedings in the ordinary course of business.

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

During the second quarter of 2023, we agreed to pay $ 16 million to resolve certain patent-related claims and to obtain certain patent rights, which is recorded within other operating credits and charges, net in our Consolidated Statements of Income.

See "Note 12 - Other Operating and Non-Operating Income (Expense)" As of December 31, 2023, $ 8 million of the settlement amount is outstanding and is included in accounts payable and accrued liabilities in the Consolidated Balance Sheets.

Self-Insurance

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Indemnities and Guarantees

We are a party to contracts in which we agree to indemnify third parties for certain liabilities that arise out of or relate to the subject matter of the contract.

We are a party to certain contracts in which we agree to indemnify third parties for certain liabilities that arise out of or relate to the subject matter of the contract.

In some cases, this indemnity extends to related liabilities arising out of the negligence of the indemnified parties, but usually excludes any liabilities caused by gross negligence or willful misconduct of the indemnified parties.

We cannot estimate the potential amount of future payments under these agreements until events arise that would trigger the liability.

Additionally, in connection with certain sales of assets and divestitures of businesses, we have agreed to indemnify the buyer and related parties for certain losses or liabilities incurred by the buyer or such related parties with respect to (1) the representations and warranties made to the buyer by us in connection with the sales and (2) liabilities related to the pre-closing operations of the assets sold.

Additionally, in connection with certain sales of assets and divestitures of businesses, we have agreed to indemnify the applicable buyer and certain related parties for certain losses or liabilities incurred by the buyer or such related parties with respect to (1) the representations and warranties made to the buyer by us in connection with the applicable sale or divestiture and (2) liabilities related to the pre-closing operations of the assets or businesses sold.

Indemnities related to pre-closing operations generally include environmental liabilities, tax liabilities, and other liabilities not assumed by the buyer.

Indemnities related to the pre-closing operations of sold assets typically do not represent added liabilities for us, but simply serve to protect the buyer from potential liability associated with the obligations that existed (known and unknown) at the time of the sale.

Indemnities related to the pre-closing operations of sold assets or divested businesses typically do not represent added liabilities for us, but simply serve to protect the buyer from potential liability associated with the obligations that existed (known and unknown) at the time of the sale.

We record accruals for those pre-closing obligations that are considered probable and estimable.

We have not accrued any additional amounts as a result of the indemnity agreements summarized below, as we believe the fair value of the guarantees is not material.

• In connection with various sales of our timberlands, we have agreed to indemnify various buyers with respect to losses resulting from breaches of limited representations and warranties contained in these agreements.

• In connection with various sales of our timberlands, we have agreed to indemnify the relevant buyers with respect to losses resulting from breaches of limited representations and warranties contained in the related agreements.

These indemnities generally are capped at a maximum potential liability and have an unspecified duration.

• In connection with the sale by LP Canada Pulp Ltd (LPCP) of its pulp mill in Chetwynd, BC, Canada, to Tembec, Ltd in October 2002, LCLP provided an indemnity of unspecified duration for liabilities arising out of pre-closing operations.

These indemnities, which do not extend to environmental liabilities, are capped at CAD$ 15 million in the aggregate.

We also have various other indemnities that are individually and in the aggregate immaterial.

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Accrued to expense during the year 2 3

Reduced to other operating credits and charges ( 1 ) —

Payments made ( 2 ) ( 3 )

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Defined Benefit Pension Plans

In November 2021, the Company initiated the termination of our frozen U.S.

During the year ended December 31, 2022, the Company initiated the termination of our frozen U.S.

and Canadian defined benefit pension plans (collectively, the Plan).

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As a result, a substantial portion of the Plan was settled during the year ended December 31, 2022, resulting in recognition of non-cash, pre-tax charges of $ 82 million from Accumulated comprehensive loss to Other non-operating items in our Consolidated Statements of Income.

Upon final termination of the Plan, we expect to recognize the remaining unrecognized pre-tax charges within Accumulated comprehensive loss ($ 6 million as of December 31, 2022).

Liquidation of remaining Plan assets in surplus of the defined benefit pension obligation will be made once the Plan satisfies all regulatory requirements, which is expected to be completed during 2023.

Upon final termination of the Plan in 2023, we recognized $ 6 million of non-cash, pre-tax charges from Accumulated comprehensive loss and realized pre-tax gains of $ 2 million related to refunds from the annuity provider to the Plan associated with the final reconciliation of participant data.

The remaining Plan asset balance of $ 2 million was refunded in 2023.

The projected benefit obligation is the actuarial present value of benefits attributable to employee service rendered to date, including the effects of estimated salary increases.

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The 2022 actuarial gains of $ 47 million were primarily related to a change in interest rates from prior year-end to those effective for settling the benefit plan obligations and actual return on Plan assets of $ 33 million was primarily related to market returns realized prior to the pension settlement dates.

The 2021 actuarial losses of $( 8 ) million were primarily related to the impact of Plan termination assumptions on the discount rate.

The year ended December 31, 2022 includes $ 247 million of benefits paid in accordance with the settlement of our defined benefit pension plan.

The changes recognized in other comprehensive loss were as follows (dollars in millions):

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Total amounts recognized in other comprehensive income $ 4 $ 71 $ 5

Weighted-average assumptions used to calculate our benefit obligations at December 31, 2022, and 2021 were as follows:

Weighted-average assumptions used to calculate our benefit obligations at December 31, 2022 was as follows:

Discount rate:

Canada 3.8 % 2.6 %

Rate of compensation increase:

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Discount rate:

2.6 % 2.3 % 3.1 %

Canada 2.6 % 2.3 %

Expected return on plan assets:

3.0 % 5.3 % 5.8 %

Canada 2.0 % 2.3 %

Rate of compensation increase:

Canada NA NA 3.5 %

The expected long-term rate of return on plan assets reflects the weighted average expected long-term rates of return for the broad categories of investments currently held in the plans (adjusted for expected changes), based on historical rates of return for each broad category, as well as factors that may constrain or enhance returns in the broad categories in the future.

The expected long-term rate of return on plan assets is adjusted when there are fundamental changes in expected returns in one or more broad asset categories and when the weighted average mix of assets in the plans changes significantly.

Asset allocation targets are established based upon the long-term returns and volatility characteristics of the investment classes and recognize the benefits of diversification and the profits of the plans’ liabilities.

The actual and target allocations at the measurement dates are as follows:

Asset category

Debt securities — % — % 76 %

Cash and cash equivalents 100 % 100 % 24 %

Total Allocation for U.S.

Plans 100 % 100 % 100 %

Debt securities — % — % 22 %

Multi-Strategy Funds — % — % 59 %

Cash and cash equivalents 100 % 100 % 19 %

Total Allocation for Non-U.S.

Plans 100 % 100 % 100 %

Our investment policies for the defined benefit pension plans are allocated to reduce risk in assets as a result of the termination and final expected settlements of the Plan in fiscal 2023.

These policies are set by an administrative committee with the goal of maximizing long-term investment returns within acceptable levels of volatility and risk.

Our plans do not currently invest directly in derivative securities, although such investments may be considered in the future to increase returns and/or reduce volatility.

To the extent the expected return on Plan assets varies from the actual return, an actuarial gain or loss results.

The fair value of our pension plan assets and fair value asset categories and the level of inputs as defined in Note 1 at December 31, 2022, and 2021, are as follows (dollars in millions):

December 31, 2022

Asset Category Total Quoted Prices in Active Markets for Identical Assets

(Level 1) Significant

(Level 2) Significant

(Level 3) Net Asset Value

Fixed-income investment funds:

Domestic bond funds — — — — —

International bond funds — — — — —

Cash and cash equivalents 6 6 — — —

Total $ 6 $ 6 $ — $ — $ —

December 31, 2021

Asset Category Total Quoted Prices in Active Markets for Identical Assets

(Level 1) Significant

(Level 2) Significant

(Level 3) Net Asset Value

Equity investment funds:

Domestic stock funds 180 — 180 — —

International stock funds 47 — 13 — 34

Cash and cash equivalents 68 58 11 — —

Total $ 296 $ 58 $ 204 $ — $ 34

The fair value of our pension plan assets was $ 6 million as of December 31, 2022, respectively, based on Level 1 inputs.

Refer to "Note 1 - Summary of Significant Accounting Policies" for further detail on the level of inputs as defined.

Defined Contribution Plans

We also sponsor defined contribution plans in the U.S.

In the U.S., these plans are primarily 401(k) plans for hourly and salaried employees that allow for pre-tax employee deferrals and a Company match of up to five percent of an employee’s eligible wages (subject to certain limits).

In the U.S., these plans are primarily 401(k) plans for hourly and salaried employees that allow for pre-tax employee deferrals and a Company match of up to 5 % of an employee’s eligible wages (subject to certain limits).

Under the profit-sharing feature of these plans, we may elect to contribute a discretionary amount as a percentage of eligible wages.

Included in the assets of the 401(k) and profit-sharing plans are one million shares of LP common stock that represented approximately eight percent of the total market value of plan assets at December 31, 2022.

Included in the assets of the 401(k) and profit-sharing plans are one million shares of LP common stock that represented approximately 8 % of the total market value of plan assets at December 31, 2023.

In Canada, we sponsor both defined contribution plans and Registered Retirement Savings Plans for hourly and salaried employees that allow for employee tax deferrals.

We provide a base contribution of three percent of eligible earnings and match 50 % of an employee’s deferrals up to a maximum of three percent of each employee’s eligible earnings (subject to certain limits).

We provide a 100 % match for employee contributions up to 4 % and provide a 50 % match of employee's contributions from 4 % to 6 % (subject to certain limits).

Expenses related to the U.S.

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In 2004, we adopted the Louisiana-Pacific Corporation 2004 Executive Deferred Compensation Plan (the Deferred Compensation Plan).

Pursuant to the Deferred Compensation Plan, participants are eligible to defer up to 90 % of their base salary and annual cash incentives that exceed the limitation as set forth by the I.R.S.

and receive a five percent match on their contributions.

Pursuant to the Deferred Compensation Plan, participants are eligible to defer up to 90 % of their base salary and annual cash incentives that exceed the limitation as set forth by the Internal Revenue Service and receive a 5 % match on their contributions.

Each Deferred Compensation Plan participant is fully vested in all employee deferred compensation and earnings credited associated with employee contributions.

Employer contributions and associated earnings vest over periods not exceeding five years .

The liability under the Deferred Compensation Plan amounted to $ 2 million as of December 31, 2022, and 2021, and is included in Other long-term liabilities on our Consolidated Balance Sheets.

The liability under the Deferred Compensation Plan amounted to $ 3 million and $ 2 million as of December 31, 2023 and 2022, respectively, and is included in other long-term liabilities on our Consolidated Balance Sheets.

ACCUMULATED COMPREHENSIVE LOSS

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Balance at December 31, 2020 $ ( 81 ) $ ( 68 ) $ ( 2 ) $ ( 151 )

Other comprehensive income before reclassifications, net of taxes 3 — ( 2 ) 1

Reclassified to income statement, net of taxes 1

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Balance at December 31, 2021 ( 76 ) ( 96 ) ( 1 ) ( 174 )

Other comprehensive income before reclassifications, net of taxes — — — —

Reclassified to income statement, net of taxes 1

Pension settlement loss — — — —

Pension settlement loss, net of taxes 71 — — 71

Translation adjustments — 2 — 2

Balance at December 31, 2022 ( 5 ) ( 94 ) — ( 99 )

Other comprehensive income before reclassifications, net of taxes — — — —

Reclassified to income statement, net of taxes 1

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

See Note 16 above for additional details.

Foreign currency translation adjustments exclude income tax expense (benefit) given that these adjustments arise out of the translation of assets into the reporting currency that is separate from the taxable income and is deemed to be reinvested for an indefinite period of time.

See "Note 16 - Retirement Plans and Post-Retirement Benefits" above for additional details.

Foreign translation adjustments exclude income tax expense (benefit) given that there are no deferred tax assets or liabilities recorded on outside basis differences on the foreign subsidiaries to which the currency translation losses relates and consequently the translation adjustments will not trigger an incremental U.S.

The pension amounts reclassified from Accumulated comprehensive loss included an income tax provision of $ 1 million, $ 23 million, and $ 2 million in 2023, 2022, and 2021, respectively.

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We operate in three segments:

Siding, OSB, and South America.

Siding, OSB, and LPSA.

Our business units have been aggregated into these three segments based upon the similarity of economic characteristics, customers, and distribution methods.

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

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

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

• Our South America segment manufactures and distributes OSB structural panel and siding products in South America and certain export markets.

This segment has manufacturing operations in two countries, Chile and Brazil, and operates sales offices in Chile, Brazil, Peru, Colombia, Argentina, and Paraguay.

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

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

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

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

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

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.

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

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

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

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

During the year ended December 31, 2023, we updated our definitions of Adjusted EBITDA, Adjusted Income, and Adjusted Diluted EPS to exclude other business exit charges not classified as discontinued operations.

Business exit charges consist of inventory and other asset impairment and exit charges related to the exit of other businesses not individually significant.

We consider business exit charges to be outside the performance of our ongoing core business operations and believe that presenting Adjusted EBITDA, Adjusted Income, and Adjusted Diluted EPS excluding business exit charges provides increased transparency as to the operating costs of our current business performance.

We did not revise prior years’ Adjusted EBITDA, Adjusted Income, and Adjusted Diluted EPS amounts because there were no significant costs similar in nature to these items.

Information about our product segments is as follows (dollars in millions):

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OSB 1,026 2,062 2,387

South America 241 265 169

LPSA 205 241 265

Other 22 84 95

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Add (deduct):

Net loss attributed to noncontrolling interest 3 4 2

Net loss attributed to non-controlling interest — 3 4

Income from discontinued operations, net of income taxes — ( 198 ) ( 71 )

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Other operating credits and charges, net 18 ( 16 ) ( 1 )

Business exit charges 32 — —

Pension settlement charges 4 82 2

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Loss on early debt extinguishment — — 11

Other non-operating items, not included above 15 9 ( 4 )

Other non-operating items 39 15 9

Adjusted EBITDA $ 478 $ 1,389 $ 1,877

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OSB 220 1,034 1,531

South America 77 113 42

LPSA 42 77 113

Other ( 17 ) ( 23 ) ( 20 )

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Siding $ 67 $ 46 $ 34

South America 8 8 7

Non-segment related — — —

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Siding $ 212 $ 316 $ 177

South America 20 20 7

LPSA 19 20 20

Non-segment related 10 21 4

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Siding $ 1,291 $ 1,045

South America 151 118

Discontinued operations — 156

Non-segment related 444 589

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Canada 610 827 613

South America 273 291 185

LPSA 241 273 291

Intercompany sales ( 535 ) ( 575 ) ( 344 )

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Canada 40 129 112

South America 70 106 36

LPSA 35 70 106

Other operating credits and charges, net and loss on impairments of assets ( 49 ) 15 ( 5 )

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data