LOUISIANA-PACIFIC CORPLPX

LOUISIANA-PACIFIC CORP Leases Disclosure

10-KFiled Feb 17, 20262 min read
.    LEASES
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. We determine if an arrangement is a lease at contract inception. A lease exists when a contract conveys to the customer the right to control the use of identified property, plant, or equipment for a period of time in exchange for consideration.
As most of our leases do not provide an implicit rate, we used our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. 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.
For each of the years ended December 31, 2025 and 2024, our weighted average discount rate was 4%, and our weighted average remaining lease term was five years for operating leases.
Our operating leases are included in our Consolidated Balance Sheets and Consolidated Statements of Income as follows (dollar amounts in millions):
December 31,
Balance Sheet Classification
2025
2024
Assets:
Operating lease assetsOperating lease assets, net$23 $25 
Total lease assets$23 $25 
Liabilities:
Current operating lease liability
Accounts payable and accrued liabilities$9 $8 
Non-current operating lease liability
Non-current operating lease liabilities22 24 
Total lease liabilities$30 $32 
For the years ended December 31, 2025 and 2024, we incurred operating lease expenses of $9 million and $8 million, respectively, included within costs of sales and selling, general and administrative expenses. We made cash payments of $9 million and $7 million during the years ended December 31, 2025 and 2024, respectively, related to our operating leases. We further incurred operating lease expense of $2 million and $5 million related to short-term rent expense for the years ended December 31, 2025 and 2024, respectively.
We obtained right of use (ROU) assets in exchange for new operating lease liabilities of $5 million and $7 million for the years ended December 31, 2025 and 2024, respectively. We did not enter into any financing leases during 2025 or 2024.
The following table sets forth the minimum operating lease payments that are expected to be made in each of the years indicated (dollar amounts in millions):
2026$10 
20277 
20285 
20293 
20303 
2031 and thereafter
4 
Total operating lease payments
32 
Less: Interest (2)
Present value of operating lease liabilities
$30 

Historical Timeline

Fiscal YearFiled
2025Feb 17, 2026Showing above
2024Feb 19, 2025
2023Feb 14, 2024
2022Feb 21, 2023
2021Feb 22, 2022

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

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