LOUISIANA-PACIFIC CORP

Previous wording

We are a leading provider of high-performance building solutions that meet the demands of builders, remodelers, and homeowners worldwide. We have leveraged our expertise serving the new home construction, repair and remodeling, and outdoor structures markets to become an industry leader known for innovation, quality, and reliability. Our manufacturing facilities are located in the U.S., Canada, Chile, and Brazil. To serve these markets, we operate in three segments: Siding, OSB, and LPSA.

Current wording

We are a leading provider of high-performance building solutions that meet the demands of builders, remodelers, and homeowners worldwide. We have leveraged our expertise serving the new home construction, repair and remodeling, and outdoor structures markets to become an industry leader known for innovation, quality, and reliability. Our manufacturing facilities are located in the U.S., Canada, Chile, and Brazil. To serve these markets, we operate in three segments: Siding, Oriented Strand Board (OSB), and LP South America (LPSA).

Previous wording

Demand for our products correlates positively with new home construction and repair and remodeling activity in North America, which historically has been characterized by significant cyclicality. The U.S. Census Bureau reported on April 17, 2025, that actual single-family housing starts were 6% lower for the three months ended March 31, 2025, as compared to the same period in 2024. Actual multi-family housing starts for the three months ended March 31, 2025, were 11% higher, as compared to the same period in 2024. Repair and remodeling activity is difficult to reasonably measure, but many indicators suggest that it has increased slightly year-over-year.

Current wording

Demand for our products correlates positively with new home construction and repair and remodeling activity in North America, which historically has been characterized by significant cyclicality. The U.S. Census Bureau reported on July 18, 2025, that actual single-family housing starts were 9% and 7% lower, respectively, for the three and six months ended June 30, 2025, as compared to the same periods in 2024. Actual multi-family housing starts for the three and six months ended June 30, 2025, were 22% and 17% higher, respectively, as compared to the same periods in 2024. Repair and remodeling activity is difficult to reasonably measure, but the general sentiment among repair and remodeling contractors is more cautious than expected earlier in the year.

Previous wording

Future economic conditions in the United States and the demand for homes are uncertain due to various macroeconomic factors, including interest rates, employment levels, changing trade policy in various jurisdictions (including the imposition of new tariffs and the modification of existing tariffs), consumer confidence, and financial markets, among other things. Additionally, we have experienced increases in material prices, supply disruptions, and labor challenges, which we continue to address as we work to meet the demands of builders, remodelers, and homeowners worldwide.

Current wording

Future economic conditions in the United States and the demand for homes are uncertain due to various macroeconomic factors, including interest rates, employment levels, changing trade policy in various jurisdictions (including the imposition of trade barriers, new tariffs and the modification of existing tariffs), consumer confidence, and financial markets, among other things. Additionally, we have experienced increases in material prices, supply disruptions, and labor challenges, which we continue to address as we work to meet the demands of builders, remodelers, and homeowners worldwide.

Previous wording

The international trade landscape currently is extremely volatile. The United States government has recently announced significant changes to U.S. trade policy, including the implementation or planned implementation of new or increased tariffs on a broad range of goods imported from international markets, including Canada and China, as well as the potential modification or termination of existing trade agreements between the United States and certain other countries. These actions, and potential retaliatory tariffs imposed by other countries on U.S. export products, could negatively affect our sales and our competitive position in markets outside the United States. Further, changing trade policy in the United States and other countries, particularly Canada and China, could increase the cost of certain raw materials or components that are critical to our manufacturing process, which could have a material negative impact on our manufacturing costs and our overall financial performance. While we are actively exploring opportunities to mitigate these increased costs, there can be no guarantee that we will be able to achieve successful mitigation strategies or meaningfully offset the financial impact of new or increased tariffs, or other adverse changes to trade policy, in the United States or other countries. In the three months ended March 31, 2025, our cost of sales in the Siding segment was impacted by $2 million related to new or increased tariffs. Based on a preliminary analysis of the potential effects of the tariffs that are currently in force, in the U.S. as well as in other markets in which we operate, we estimate incremental costs of approximately $12 million in 2025, most of which will be incurred by the Siding segment.

Current wording

The international trade landscape has been extremely volatile in recent periods. The U.S. government has recently announced significant changes to U.S. trade policy, including the implementation or planned imposition of new or increased tariffs on a broad range of goods imported from international markets, including Canada and China, as well as the potential modification or termination of existing trade agreements between the U.S. and certain other countries. In response, certain countries have imposed, or are considering, retaliatory tariffs on U.S. exports. The global tariff landscape continues to shift rapidly, with changes impacting businesses and markets around the world. These changes could negatively affect our sales and our competitive position within the U.S. market and in markets outside the U.S. Further, changing trade policy in the U.S. and other countries, particularly Canada and China, could increase the cost of certain raw materials or components that are critical to our manufacturing process, which could have a material negative impact on our manufacturing costs and our overall financial performance. While we are actively exploring opportunities to mitigate these increased costs, there can be no guarantee that we will be able to achieve successful mitigation strategies or meaningfully offset the financial impact of new or increased tariffs, or other adverse changes to trade policy, in the U.S. or other countries. In the six months ended June 30, 2025, our cost of sales in the Siding segment was negatively impacted by $5 million related to new or increased tariffs. Based on a preliminary analysis of the potential effects of the tariffs that are currently in force in the United States, as well as in other markets where we operate, we estimate that we could incur potential incremental costs of approximately $12 million in 2025, most of which would likely be incurred by the Siding segment. The potential impact of these factors on our future operational and financial performance is uncertain. As a result, our past performance may not be indicative of future results.

Previous wording

The following table sets forth housing starts for the three months ended March 31, 2025 and 2024 (in thousands):

Current wording

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

Previous wording

The following table sets forth sales volumes for the three months ended March 31, 2025 and 2024:

Current wording

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

Previous wording

We measure OEE of each of our mills to track improvements in the utilization and productivity of our manufacturing assets. OEE is a composite metric that considers asset uptime (adjusted for capital project downtime and similar events), production rates, and finished product quality. We believe that when used in conjunction with other metrics, OEE can be a useful measure for evaluating our ability to generate profits, and that providing this measure should allow interested persons to monitor operational improvements. We use a best-in-class target across all LP sites that allows us to optimize capital investments, focus maintenance and reliability improvements, and improve overall equipment efficiency. It should be noted that other companies may present OEE data differently, and therefore, as presented by us, OEE data may not be comparable to similarly titled measures reported by other companies.

Current wording

We measure Overall Equipment Effectiveness (OEE) of each of our mills to track improvements in the utilization and productivity of our manufacturing assets. OEE is a composite metric that considers asset uptime (adjusted for capital project downtime and similar events), production rates, and finished product quality. We believe that when used in conjunction with other metrics, OEE can be a useful measure for evaluating our ability to generate profits, and that providing this measure should allow interested persons to monitor operational improvements. We use a best-in-class target across all LP sites that allows us to optimize capital investments, focus maintenance and reliability improvements, and improve overall equipment efficiency. It should be noted that other companies may present OEE data differently, and therefore, as presented by us, OEE data may not be comparable to similarly titled measures reported by other companies.

Previous wording

OEE for the three months ended March 31, 2025, and 2024, for each of our segments is listed below:

Current wording

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

Previous wording

Percent changes in average net sales prices and unit shipments for the three months ended March 31, 2025, compared to the corresponding period in 2024, were as follows:

Current wording

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

Previous wording

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

Current wording

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

Previous wording

Percent changes in average net sales prices and unit shipments for the three months ended March 31, 2025, compared to the corresponding period in 2024, were as follows:

Current wording

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

Previous wording

Adjusted EBITDA for the three months ended March 31, 2025 decreased year-over-year by $36 million, primarily reflecting the impact of lower OSB prices and volumes.

Current wording

Adjusted EBITDA for the OSB segment for the same periods decreased year-over-year by $106 million and $143 million, respectively, also reflecting the impact of lower OSB prices.

Previous wording

Our other products segment includes other minor products, services, and closed operations, which do not qualify as discontinued operations. Additionally, this segment includes corporate expenses that are not allocated, such as general administrative costs and stock-based compensation. During 2024, the equity method investment held by Entekra Holdings LLC, our off-site framing operation, sold substantially all of its net assets. Other net sales were $2 million for the three months ended March 31, 2025, as compared to $3 million for the corresponding period in 2024. Adjusted EBITDA was $(10) million for the three months ended March 31, 2025, as compared to $(8) million for the corresponding period in 2024.

Current wording

Our other products segment includes other minor products, services, and closed operations, which do not qualify as discontinued operations. Additionally, this segment includes corporate expenses that are not allocated, such as general administrative costs and stock-based compensation. During 2024, the equity method investment held by Entekra Holdings LLC, our off-site framing operation, sold substantially all of its net assets. Other net sales were $2 million and $4 million for the three and six months ended June 30, 2025, respectively, as compared to $2 million and $5 million for the corresponding periods in 2024, respectively. Adjusted EBITDA was $(10) million and $(20) million for the three and six months ended June 30, 2025, respectively, as compared to $(11) million and $(19) million for the corresponding periods in 2024, respectively.

Previous wording

Selling, general, and administrative expenses were $75 million for the three months ended March 31, 2025, compared to $69 million for the corresponding period in 2024. The year-over-year increase in selling, general, and administrative expenses was driven by higher employee compensation and marketing expenses.

Current wording

Selling, general, and administrative expenses were $79 million and $154 million for the three and six months ended June 30, 2025, respectively, compared to $71 million and $140 million for the corresponding periods in 2024, respectively. The year-over-year increase in selling, general, and administrative expenses for both periods was driven by higher employee compensation.

Previous wording

We recognized an estimated tax provision of $26 million in the three months ended March 31, 2025, as compared to $41 million for the corresponding period in 2024. Each quarter the income tax accrual is adjusted to the latest estimate and the difference from the previously accrued year-to-date balance is recorded in the current quarter. For the three months ended March 31, 2025, and 2024, the primary differences between the U.S. statutory rate of 21% and the total effective tax rates of 22% and 28%, respectively, relate to state income tax and inflationary and foreign currency exchange adjustments.

Current wording

We recognized an estimated tax provision of $19 million and $45 million in the three and six months ended June 30, 2025, respectively, as compared to $53 million and $94 million for the comparable periods in 2024, respectively. Each quarter the income tax accrual is adjusted to the latest estimate and the difference from the previously accrued year-to-date balance is recorded in the current quarter. For the six months ended June 30, 2025, and 2024, the primary differences between the U.S. statutory rate of 21% and the total effective tax rates of 26% and 25%, respectively, relate to state income tax and inflationary and foreign currency exchange adjustments.

Previous wording

During the three months ended March 31, 2025 and 2024, cash provided by operations was $64 million and $105 million, respectively. The decrease in cash provided by operations was primarily related to lower net income and changes in working capital.

Current wording

During the six months ended June 30, 2025 and 2024, cash provided by operations was $226 million and $317 million, respectively. The decrease in cash provided by operations was primarily related to lower net income and changes in working capital.

Previous wording

During the three months ended March 31, 2025 and 2024, cash used in investing activities was $64 million and $41 million, respectively, relating to capital expenditures. The year-over-year increase in capital expenditures was primarily related to higher spend on growth and sustaining maintenance projects in the current year.

Current wording

During the six months ended June 30, 2025 and 2024, cash used in investing activities was $132 million and $61 million, respectively, relating to capital expenditures. The year-over-year increase in capital expenditures was primarily related to higher spend on growth and sustaining maintenance projects in the current year.

Previous wording

Capital expenditures in 2025 are expected to be approximately $410 million. We expect to fund our short-term and long-term capital expenditures in 2025 through cash on hand, cash generated from operations, and available borrowing under our Amended Credit Facility, as necessary.

Current wording

Capital expenditures in 2025 are expected to be approximately $350 million. We expect to fund our short-term and long-term capital expenditures in 2025 through cash on hand, cash generated from operations, and available borrowing under our Amended Credit Facility, as necessary.

Previous wording

Additionally, we paid cash dividends of $20 million and used $5 million to repurchase stock from employees in connection with income tax withholding requirements associated with our employee stock-based compensation plans. In connection with other financing activities, we paid $2 million of debt issuance costs related to the amendment of our credit facility.

Current wording

During the six months ended June 30, 2025, cash used in financing activities was $105 million, which includes $61 million to repurchase shares of LP common stock under the 2024 Share Repurchase Program (defined below) in the three months ended March 31, 2025. Additionally, we paid cash dividends of $39 million and used $3 million to repurchase stock from employees in connection with income tax withholding requirements associated with our employee stock-based compensation plans. In connection with other financing activities, we paid $2 million of debt issuance costs related to the amendment of our credit facility.

Previous wording

During the three months ended March 31, 2024, cash used in financing activities was $39 million, which includes $19 million of dividend payments and $6 million of stock repurchases from employees in connection with income tax withholding requirements associated with our employee stock-based compensation plans. Additionally, during this period we used $13 million to repurchase shares of LP common stock under the share repurchase program authorized by LP's Board of Directors in May 2022.

Current wording

During the six months ended June 30, 2024, cash used in financing activities was $157 million, which includes $115 million to repurchase shares of LP common stock under the share repurchase program authorized by LP's Board of Directors in May 2022. Additionally, during this period we had $37 million of dividend payments and $5 million of stock repurchases from employees in connection with income tax withholding requirements associated with our employee stock-based compensation plans.

Previous wording

In November 2022, LP entered into the Credit Agreement with American AgCredit, PCA, as administrative agent, CoBank, ACB, as letter of credit issuer, and the lenders and the guarantors from time to time party thereto relating to its revolving credit facility. On March 26, 2025, LP entered into the First Amendment with American AgCredit, PCA, as administrative agent, CoBank, ACB, as letter of credit issuer, and the lenders and voting participants party thereto, which amends the Credit Agreement. The First Amendment amended the Credit Agreement (the Amended Credit Agreement) to (1) increase the aggregate principal amount for the credit facility from $550 million to $750 million, (2) increase the sub-limit for letters of credit from $60 million to $75 million, (3) change the interest rate for revolving borrowing, (4) change the capitalization ratio limit, and (5) extend the maturity date to March 26, 2032. As of March 31, 2025, there were no outstanding borrowings pursuant to the Amended Credit Facility.

Current wording

In November 2022, LP entered into the Credit Agreement with American AgCredit, PCA, as administrative agent, CoBank, ACB, as letter of credit issuer, and the lenders and the guarantors from time to time party thereto relating to its revolving credit facility. On March 26, 2025, LP entered into the First Amendment with American AgCredit, PCA, as administrative agent, CoBank, ACB, as letter of credit issuer, and the lenders and voting participants party thereto, which amended the Credit Agreement (the Amended Credit Agreement) to (1) increase the aggregate principal amount for the credit facility from $550 million to $750 million, (2) increase the sub-limit for letters of credit from $60 million to $75 million, (3) change the interest rate for revolving borrowing, (4) change the capitalization ratio limit, and (5) extend the maturity date to March 26, 2032. As of June 30, 2025, there were no outstanding borrowings under the Amended Credit Facility.

Previous wording

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. No impairment was recognized during the three-months ended March 31, 2025.

Current wording

The carrying values of our long-lived assets are reviewed for potential impairments, and adequate support is believed by management to exist for each asset's carrying value based on anticipated cash flows derived from estimates of future demand, pricing, and production costs, assuming certain levels of planned capital expenditures. However, if demand and pricing for our products decline significantly below cycle-average levels, if capital is allocated to alternative projects, or if changes occur in the wood supply for mills, future impairment charges may be required.

Previous wording

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. 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 such assets.

Current wording

Potential asset dispositions are also periodically reviewed, taking into account current and anticipated economic and industry conditions, the strategic plan, and other relevant factors. A decision to dispose of specific assets may require assumptions regarding the transaction structure of the disposition to estimate the net sales proceeds, which could be lower than prior estimates of undiscounted future net cash flows. As a result, impairment charges may be necessary in connection with such dispositions.