Income Taxes

9 Months Ended

Sep. 30, 2025

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

For interim periods, income tax expense is recognized by applying the estimated annual effective tax rate to year-to-date results, unless doing so does not yield a reliable estimate. Each period, the income tax accrual is updated based on the latest estimate, and any difference from the previously accrued year-to-date balance is recorded in the current quarter. Changes in profitability estimates across jurisdictions may affect quarterly effective tax rates.

The provision for income taxes for the nine months ended September 30, 2025, and 2024, reflected estimated annual effective tax rates of 27% and 25%, respectively, excluding discrete items discussed below. The total tax provision for the three and nine months ended September 30, 2025, was $9 million and $54 million, respectively, compared to $23 million and $117 million for the corresponding periods in 2024, respectively. The effective tax rate, including discrete items, for the three and nine months ended September 30, 2025, was 52% and 26%, respectively, compared to 20% and 25% for the comparable periods in 2024, respective.

During the nine months ended September 30, 2025, and 2024, we recognized net discrete tax benefits of $2 million and $1 million, respectively. The current year net tax benefit is primarily related to inflationary and foreign currency exchange-related effects, as well as stock-based compensation. The prior year net tax benefit related primarily to stock-based compensation.

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 government enacted legislation in 2024 implementing aspects of the OECD’s minimum tax rules under the Pillar Two framework, effective for the 2024 fiscal year, and proposed additional legislation to implement further aspects effective in the 2025 fiscal year. Additionally, in 2024, the Brazilian Congress approved legislation, effective in 2025, that is largely aligned with 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 development expenditures. The impacts of The Tax Act are reflected in our results for the nine months ended September 30, 2025, and have no material impact on our income tax expense or effective tax rate. We expect certain provisions of The Tax Act will decrease cash taxes paid in the current fiscal year and may change the timing of cash tax payments in future periods.