Income Taxes

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

Income Tax Provision

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

	Years Ended December 31,
	2024		2023		2022
Domestic	$	469	$	207	$	961
Foreign	91		45		198
Total	$	560	$	252	$	1,159

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

	Years Ended December 31,
	2024		2023		2022
Current tax provision (benefit):
U.S. federal	$	97	$	17	$	180
State and local	18		(1)		51
Foreign	29		14		42
Net current tax provision	144		30		273
Deferred tax provision (benefit):
U.S. federal	(8)		22		(1)
State and local	(3)		1		(4)
Foreign	2		21		12
Net valuation allowance increase (decrease)	5		—		(6)
Net deferred tax provision (benefit)	(4)		44		1
Total income tax provision	$	140	$	74	$	274

We paid income taxes, net of refunds, of $124 million, $65 million, and $320 million during 2024, 2023, and 2022, respectively. Included in our Consolidated Balance Sheet at December 31, 2024 is a net income tax receivable of $1 million, compared to a net income tax receivable of $22 million at December 31, 2023.

Deferred Taxes

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

	December 31,
	2024		2023
Deferred tax assets:
Accrued liabilities	$	22	$	21
Research expenditures	26		19
Inventories	11		14
Benefit relating to capital loss, operating loss, and credit carryforwards	9		10
Operating lease liabilities	7		8
Deferred revenue	3		3
Other deferred tax assets	13		11
Total deferred tax assets	91		86
Valuation allowance	(10)		(4)
Total deferred tax asset after valuation allowance	81		82
Deferred tax liabilities:
Property, plant and equipment	(192)		(194)
Unremitted foreign earnings	(19)		(21)
Operating lease assets	(7)		(8)
Investment in Entekra	—		(7)
Other deferred tax liabilities	(4)		(4)
Total deferred tax liabilities	(222)		(234)
Net deferred tax liabilities	$	(141)	$	(152)
Balance sheet classification:
Long-term deferred tax asset	$	4	$	11
Long-term deferred tax liability	(145)		(162)
Net deferred tax liabilities	$	(141)	$	(152)

The benefit relating to capital loss, operating loss, and credit carryforwards included in the above table at December 31, 2024, consisted of (dollars in millions):

	Operating Loss	Benefit Amount		Valuation Allowance		Expiration Beginning in
Canadian capital loss carryforwards	—	4		(4)		No expiration
Mexico operating loss carryforwards	2	1		(1)		2033
State credit carryforwards	—	4		(2)		2034
Total		$	9	$	(7)

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, 2024, the deferred tax liability related to unremitted foreign earnings was $19 million.

Over the last several years, the Organization for Economic Cooperation and Development (OECD) has developed an Inclusive Framework on Base Erosion and Profit Shifting including Pillar Two model rules applicable to large multinational corporations which would establish a global per-country minimum tax of 15%. While the United States has not enacted legislation to adopt Pillar Two and it is uncertain if it will do so in the future, certain countries in which we operate have enacted such legislation. Specifically, the Canadian government enacted legislation in 2024 implementing aspects of the OECD’s minimum tax rules effective in the 2024 fiscal year and released draft legislation proposed to implement further aspects effective for the 2025 fiscal year. In addition, in 2024, the Brazilian National Congress approved legislation implementing a tax measure to take effect in the 2025 fiscal year that is largely aligned with certain aspects of the OECD’s minimum tax rules under the Pillar Two framework. No other jurisdictions in which LP operates have enacted Pillar Two legislation at this time. At this time, we do not expect Pillar Two legislation to have a material impact on our effective tax rate or our consolidated results of operations, financial position or cash flows. The Company will continue to monitor future developments to determine any potential impact in the countries in which we operate.

Reconciliation of the U.S. 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,
	2024				2023				2022
	Amount ($)		Percent (%)		Amount ($)		Percent (%)		Amount ($)		Percent (%)
U.S. Federal tax rate	$	118	21	%	$	53	21	%	$	243	21	%
State and local income taxes	13		2		8		3		34		3
Effect of foreign tax rates	9		2		3		1		9		1
Uncertain tax positions	(2)		—		7		3		(2)		—
Unremitted foreign earnings	1		—		25		10		—		—
Non deductible compensation	3		1		6		2		6		—
Tax credits	(5)		(1)		(5)		(2)		(4)		—
Prior year changes in tax laws and positions	3		—		(9)		(3)		—		—
Revisions to prior year estimates	—		—		(7)		(3)		2		—
Other items, net	—		—		(7)		(3)		(14)		(1)
Provision for income taxes	$	140	25	%	$	74	29	%	$	274	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, 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 2019 and subsequent. Our tax returns are currently under examination by tax authorities in the U.S. for years 2018, 2019, and 2020, 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 (dollars in millions): 

	December 31,
	2024		2023		2022
Beginning balance	$	13	$	6	$	9
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	—		—		(4)
Ending balance	$	11	$	13	$	6

Included within other long-term liabilities on our Consolidated Balance Sheets at December 31, 2024, are $11 million of tax benefits that, if recognized, would affect our effective tax rate. We accrued and paid no interest during 2024. We accrued interest of $2 million and paid no interest during 2023.