LOUISIANA-PACIFIC CORPLPX
LOUISIANA-PACIFIC CORP Income Taxes Disclosure
INCOME TAXES
Income Tax Provision
The components of income from continuing operations before income taxes, including equity in unconsolidated affiliates, were (dollar amounts in millions):
Year Ended December 31, | |||||||||||||||||
2025 | 2024 | 2023 | |||||||||||||||
| Domestic | $ | 163 | $ | 469 | $ | 207 | |||||||||||
| Foreign | 32 | 91 | 45 | ||||||||||||||
| Total | $ | 196 | $ | 560 | $ | 252 | |||||||||||
The components of our income tax provision (benefit) from continuing operations were (dollar amounts in millions):
Year Ended December 31, | |||||||||||||||||
2025 | 2024 | 2023 | |||||||||||||||
| Current tax provision (benefit): | |||||||||||||||||
| U.S. federal | $ | 9 | $ | 97 | $ | 17 | |||||||||||
| State and local | (4) | 18 | (1) | ||||||||||||||
| Foreign | 21 | 29 | 14 | ||||||||||||||
| Net current tax provision | 26 | 144 | 30 | ||||||||||||||
| Deferred tax provision (benefit): | |||||||||||||||||
| U.S. federal | 26 | (8) | 22 | ||||||||||||||
| State and local | 5 | (3) | 1 | ||||||||||||||
| Foreign | (11) | 2 | 21 | ||||||||||||||
| Net valuation allowance increase (decrease) | 4 | 5 | — | ||||||||||||||
| Net deferred tax provision (benefit) | 24 | (4) | 44 | ||||||||||||||
| Total income tax provision | $ | 50 | $ | 140 | $ | 74 | |||||||||||
Deferred Taxes
The tax effects of significant temporary differences creating deferred tax assets and liabilities were (dollar amounts in millions):
| December 31, | |||||||||||
2025 | 2024 | ||||||||||
| Deferred tax assets: | |||||||||||
| Accrued liabilities | $ | 21 | $ | 22 | |||||||
| Benefit relating to capital loss, operating loss, and credit carryforwards | 21 | 9 | |||||||||
| Inventories | 15 | 11 | |||||||||
| Operating lease liabilities | 7 | 7 | |||||||||
| Stock-based compensation | 6 | 2 | |||||||||
| Currency remeasurement loss | 4 | 2 | |||||||||
| Deferred revenue | — | 3 | |||||||||
| Research expenditures | — | 26 | |||||||||
| Other deferred tax assets | 8 | 9 | |||||||||
| Total deferred tax assets | 82 | 91 | |||||||||
| Valuation allowance | (14) | (10) | |||||||||
| Total deferred tax asset net of valuation allowance | $ | 68 | $ | 81 | |||||||
| Deferred tax liabilities: | |||||||||||
| Property, plant and equipment | (201) | (192) | |||||||||
| Unremitted foreign earnings | (25) | (19) | |||||||||
| Operating lease assets | (7) | (7) | |||||||||
| Other deferred tax liabilities | (4) | (4) | |||||||||
| Total deferred tax liabilities | (237) | (222) | |||||||||
| Net deferred tax liabilities | $ | (169) | $ | (141) | |||||||
| Balance sheet classification: | |||||||||||
| Long-term deferred tax asset | $ | 8 | $ | 4 | |||||||
| Long-term deferred tax liability | (177) | (145) | |||||||||
| Net deferred tax liabilities | $ | (169) | $ | (141) | |||||||
The benefit relating to capital loss, operating loss, and credit carryforwards included in the above table at December 31, 2025, consisted of (dollar amounts in millions):
| Operating Loss | Benefit Amount | Valuation Allowance | Expiration Beginning in | ||||||||||||||||||||
| Federal credit carryforwards | $ | — | $ | 6 | $ | — | No expiration | ||||||||||||||||
| State credit carryforwards | — | 5 | (3) | 2034 | |||||||||||||||||||
| Canadian capital loss carryforwards | — | 4 | (4) | No expiration | |||||||||||||||||||
| Chile foreign tax credit carryforwards | — | 4 | — | No expiration | |||||||||||||||||||
| Foreign operating loss carryforwards | 7 | 2 | (1) | 2030 | |||||||||||||||||||
| Total | $ | 7 | $ | 21 | $ | (8) | |||||||||||||||||
We periodically review the need for valuation allowances against deferred tax assets and recognize these deferred tax assets to the extent that their realization is more likely than not. As part of our review, we consider all positive and negative evidence, including earnings history, the future reversal of deferred tax liabilities, and the relevant expirations of carryforwards. We believe that the valuation allowances provided are appropriate. 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.
In 2023 we made the determination that a substantial portion of unremitted foreign earnings was no longer indefinitely reinvested and as of December 31, 2023, we recorded a deferred tax liability of $21 million related to the taxes expected to be imposed upon the repatriation of such foreign earnings to the United States. As of December 31, 2025, and 2024, the deferred tax liability related to unremitted foreign earnings was $25 million and $19 million, respectively.
In 2021, the Organization for Economic Cooperation and Development (OECD) announced an Inclusive Framework on Base Erosion and Profit Shifting, including the Pillar Two Model Rules (Pillar Two), applicable to large multinational corporations. These rules establish a global per-country minimum tax of 15%. Although, the United States has not enacted legislation to adopt the Pillar Two framework, and future adoption remains uncertain, certain countries where our operations are conducted have enacted such legislation.
Specifically, the Canadian and Brazilian governments enacted legislation in 2024 implementing certain aspects of the OECD’s minimum tax rules under the Pillar Two Framework. To date, no other jurisdictions in which LP operates have enacted Pillar Two legislation. At this time, Pillar Two legislation is not expected to have a material impact on the Company’s effective tax rate, consolidated results of operations, financial position, or cash flows. The Company will continue to monitor future developments related to Pillar Two legislation to assess any potential impact in the relevant jurisdictions.
On July 4, 2025, H.R. 1, a bill to provide for reconciliation pursuant to title II of H. Con. Res. 14, informally known as the One Big Beautiful Bill Act (“The Tax Act”), was enacted in the U.S., introducing a series of corporate tax changes in the U.S., including significant provisions such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act of 2017, modifications to the international tax framework, and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented thereafter through 2027. The provisions of The Tax Act effective in 2025 include 100% bonus depreciation on qualified property and full expensing for research and experimental expenditures. The impacts of The Tax Act are reflected in our results for the year ended December 31, 2025, and have no material impact on our income tax expense or effective tax rate. Certain provisions of The Tax Act decreased cash taxes paid during the year and may change the timing of cash tax payments in future periods.
Reconciliation of the U.S. Federal Statutory Rate to the Effective Rate
As further described in “Note 2 - Present and Prospective Accounting Pronouncements,” the Company has elected to prospectively adopt the guidance in ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Taxes Disclosures. The following table is a reconciliation of the U.S. federal statutory tax rate to the total effective tax rates from continuing operations for the year ended December 31, 2025 in accordance with the guidance in ASU 2023-09 (dollar amounts in millions):
Year Ended December 31, | |||||||||||
| 2025 | |||||||||||
| Amount ($) | Percent (%) | ||||||||||
| U.S. federal statutory tax rate | $ | 41 | 21 | % | |||||||
State and local income taxes1 | 9 | 4 | |||||||||
Foreign tax effects | |||||||||||
| Chile | |||||||||||
| Unremitted foreign earnings | 4 | 2 | |||||||||
| Inflationary adjustments | (3) | (1) | |||||||||
| Other | (1) | — | |||||||||
Canada | 3 | 2 | |||||||||
Argentina | |||||||||||
| Changes in valuation allowances | 3 | 1 | |||||||||
| Other | (2) | (1) | |||||||||
| Other foreign jurisdictions | 1 | — | |||||||||
| U.S. Tax credits | |||||||||||
Research and development tax credits | (3) | (2) | |||||||||
| U.S. Nontaxable or nondeductible items | |||||||||||
Nondeductible compensation | 3 | 2 | |||||||||
Changes in unrecognized tax benefits | (7) | (3) | |||||||||
Other adjustments | 2 | 1 | |||||||||
| Provision for income taxes | $ | 50 | 26 | % | |||||||
1State taxes in Arizona, California, Georgia, Indiana, Maine, Minnesota, North Carolina, and Pennsylvania made up the majority (greater than 50%) of the tax effect in this category.
The following table is a reconciliation of the U.S. federal statutory tax rate to the total effective tax rates from continuing operations for the years ended December 31, 2024 and 2023 in accordance with the guidance prior to the adoption of ASU 2023-09 (dollar amounts in millions):
Year Ended December 31, | |||||||||||||||||||||||
2024 | 2023 | ||||||||||||||||||||||
| Amount ($) | Percent (%) | Amount ($) | Percent (%) | ||||||||||||||||||||
| U.S. Federal tax rate | $ | 118 | 21 | % | $ | 53 | 21 | % | |||||||||||||||
| State and local income taxes | 13 | 2 | 8 | 3 | |||||||||||||||||||
| Effect of foreign tax rates | 9 | 2 | 3 | 1 | |||||||||||||||||||
| Uncertain tax positions | (2) | — | 7 | 3 | |||||||||||||||||||
| Unremitted foreign earnings | 1 | — | 25 | 10 | |||||||||||||||||||
| Non deductible compensation | 3 | 1 | 6 | 2 | |||||||||||||||||||
| Tax credits | (5) | (1) | (5) | (2) | |||||||||||||||||||
| Prior year changes in tax laws and positions | 3 | — | (9) | (3) | |||||||||||||||||||
| Revisions to prior year estimates | — | — | (7) | (3) | |||||||||||||||||||
| Other items, net | — | — | (7) | (3) | |||||||||||||||||||
| Provision for income taxes | $ | 140 | 25 | % | $ | 74 | 29 | % | |||||||||||||||
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, Paraguay, and Mexico.
We generally remain subject to U.S. federal and state examinations for tax years 2018 and subsequent. 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 2017 and subsequent; and Canada for tax years 2020 and subsequent. Our tax returns are currently under examination by tax authorities in the U.S. for years 2022 and 2023, Canada for year 2022, and in Chile for years 2016 and 2020.
Income Tax Payments
The following table is a summary of income taxes paid (net of refunds) by jurisdiction pursuant to the disclosure requirements of ASU 2023-09 for the year ended December 31, 2025 (dollar amounts in millions):
December 31, | |||||
2025 | |||||
Federal | $ | 7 | |||
State | 6 | ||||
Foreign | |||||
| Canada | 18 | ||||
| Chile | 5 | ||||
| Brazil | 5 | ||||
| Other | 1 | ||||
Income Tax Payments | $ | 42 | |||
We paid income taxes, net of refunds, of $42 million, $124 million, and $65 million during 2025, 2024, and 2023, respectively. Included in our Consolidated Balance Sheet at December 31, 2025 is a net income tax receivable of $11 million, compared to $1 million at December 31, 2024.
Uncertain Tax Positions
The following is a tabular reconciliation of the total amount of unrecognized tax benefits at the beginning and end of the years (dollar amounts in millions):
Year Ended December 31, | |||||||||||||||||
2025 | 2024 | 2023 | |||||||||||||||
| Beginning balance | $ | 11 | $ | 13 | $ | 6 | |||||||||||
| Increases: | |||||||||||||||||
| Tax positions taken in current year | 1 | 1 | 1 | ||||||||||||||
| Tax positions taken in prior years | — | — | 6 | ||||||||||||||
| Decreases: | |||||||||||||||||
| Settlements with taxing authorities in current year | — | (3) | — | ||||||||||||||
| Lapse of statute in current year | (8) | — | — | ||||||||||||||
| Ending balance | $ | 4 | $ | 11 | $ | 13 | |||||||||||
Included within other long-term liabilities on our Consolidated Balance Sheets at December 31, 2025, are $4 million of tax benefits that, if recognized, would affect our effective tax rate. We accrued and paid no interest during 2025 or 2024.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 17, 2026 | Showing above |
| 2024 | Feb 19, 2025 | |
| 2022 | Feb 21, 2023 | |
| 2021 | Feb 22, 2022 | |
| 2020 | Feb 18, 2021 | |
| 2019 | Feb 13, 2020 | |
| 2018 | Feb 14, 2019 | |
| 2017 | Feb 13, 2018 | |
| 2016 | Feb 15, 2017 | |
| 2015 | Feb 24, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.