Good afternoon ladies and gentlemen .Welcome to the third quarter 2014 Louisiana Pacific Corporation earnings conference call. My name is Chris and I will be your conference moderator for today. At this time all participants are on a listen only mode. Later we will conduct a question-and-answer session. (Operator Instructions) And at this time I would now like to turn the conference over to your host for today Ms. Sallie Bailey, Chief Financial Officer and you may proceed.

Thank you very much, Chris and good morning. Thank you for joining our conference call to discuss LP's financial results for the third quarter of 2014 and year-to-date results. I am Sallie Bailey, LP's Chief Financial Officer, and with me today are Curt Stevens, LP's Chief Executive Officer; as well as Mike Kinney and Becky Barckley, our primary Investor Relations contact. I'll begin our discussion with a review of the financial results for the third quarter of 2014 and the first nine months of 2014. This will be followed by some comments on the performance of individual segments and selected balance sheet items. After I finish my remarks, Curt will discuss the general market environment in which LP has been operating, provide his perspective on our operating results for the third quarter of 2014 and give some thoughts on the outlook. As we have done in the past we have opened up this call to the public and are doing a webcast. That webcast can be accessed at www.lpcorp.com. Additionally, to help with the discussion, we provided a presentation with supplemental information that should be reviewed in conjunction with the earnings release. I will be referencing these slides this morning in my comments. We have also filed an 8-K this morning with some supplemental information as well as our third quarter 10-Q. I want to remind all the participants about the forward-looking statement comment on Slide 2 of the presentation. Please also be aware of the discussion of our use of non-GAAP financial information included on Slide 3 of the presentation. The appendix attached to the presentation has some of the necessary reconciliations that have been supplemented by the Form 8-K filing we made this morning. Rather than reading these 2 statements, I incorporate them with this reference. Couple of…

Thank you for the review of the third quarter, Sallie and welcome to our call. My brief comments today will focus on our accomplishments and challenges in the quarter, talk about the current state of the housing market and provide you with my views on what is ahead for the rest of 2014 and into next year. From a safety perspective, LP had a year-to-date total incident rate of 0.38 for the first nine months of 2014. Within that number we had zero recordable injuries in all of our South American operations and all of our administrative functions, including our field sales and forestry groups. As in Sallie just discussed, we did experience sinking OSB prices throughout the third quarter which hurt both our topline revenue and our bottom-line profit. On a year-to-date basis, decline in OSB pricing accounted for reduction in sales and operating earnings of about $280 million. The good news is that OSB pricing has been increasing since the end of the last quarter and further demand should come from steadily increasing housing starts in the future. It leaves me with a few comments on the housing market where most of the news is positive. US housing starts in September were once again over 1 million and permits were even all higher than that. The Case-Shiller Index to home prices was up about – between 6.5% and 7% compared to one year ago. The average mortgage rate at the end of October fell under 4%, the lowest level we’ve seen since the spike in rates in May of 2013. We mentioned last quarter, and continues to be a lot of the talk by the homebuilders about increasing the pace of new home closures by focusing on bringing back the first time homebuyer in the market. Just within…

Great. Thank you Curt. Chris, we are ready for questions that we could go to the queue.

(Operator Instructions) Our first question comes from the line of Chip Dillon with Vertical Research Partners.

Yes, good morning, Curt and Sallie. If I add these numbers up, it looks like your CapEx for next year could range between $110 million and $130 million, and I would guess -- I know on the last call you were feeling a little more cautious than you sounded today, I think you all were assuming $1.05 million for 2015. And so I guess what I'm asking is between this CapEx budget increase and what you missed about October, are you starting to sense that maybe it will be a better year next year? And let's say it turns out not to be, would you be able to push out at least the $60 million to $70 million of the growth capital? And I'm asking all these questions, is that $60 million to $70 million kind of the placeholder for Manitoba and Chile, or is there more in there -- that you can touch on?

Chip, your last statement is exactly correct. That 60 million to 70 million is what we expect to spend to convert Swan Valley to siding production and to begin the construction of the third mill in Chile. So that growth capital is dependent at least in South America on when we get the environmental permitting, so that could move further out. We like it to start middle of the year but it could move out based on permitting. On the siding we simply have to have more production. We’ve had very good growth in our SmartSide and we need to get that mill converted as quickly as we can. The rest of the capital is a really pretty much following up on regular maintenance. There are some regulatory needs we have to comply with MACT, that's about a 4 million to 5 million of that number. And then in Canada as you’re probably aware there's been a lot of increased emphasis on dust and so we do have some dust prevention programs to help with our safety.

And then I guess just it makes -- totally understand the siding need, and you all have a great business there and have telegraphed that very well. But just looking at the numbers and not to get too short-term, but it looks like Chile, and you mentioned some of it might be due to some political changes, but really was weak. And could there be -- is there a possibility that maybe it may warrant a delay in adding capacity? I'm just kind of curious with the market being as weak as it's been recently down there, why would now be a good time? Is there a strategic imperative or risk of another competitor doing the same thing?

No, I don’t think we have any risk of any competitor putting in production there. What we experienced in Chile is with the change in the leadership of the country it has turned more socialist and as a result the housing activity has slowed. What we are seeing – looking forward is we are seeing in that that will cover a little bit. From a timing standpoint we started talking about Chile about a year and a half ago. So we basically already have pushed this 6 to 9 months based on what we saw going on in the country. The weakness in their operating results were two factors. One was we lost the month of production due to the waferizer going out at Lautaro and the second is we are seeing imports because of the weak pricing environment in North America -- coming from North America into Chile and putting a little more pricing pressure on there.

That's helpful, and then I guess the last question is on the buyback, if you, let's say for example you pursue these projects and you generate the cash to do so, and let's say you generate another $100 million above your $250 million to $300 million balance you like to keep, could we see you exercise that entire buyback next year if those conditions took hold? Or would there be reason to think that this might stretch out longer than that?

Well as Sallie said what the board has given us the authority to do is to manage that based on what we see as market conditions and cash flow coming into the company. So I think you can rest assured will take all that into consideration.

The next question comes from the line of Gail Glazerman with UBS. Gail Glazerman – UBS: Can you talk a little bit more about the wood issues that you've been having in siding? What caused them? Are they getting better? I guess you mentioned confidence that you would be able to build your decks during the winter. And how significant -- I mean can you balance -- is the worst of it over, and do you expect to recover in the fourth quarter to any extent?

Well what we need is we need the cold weather but not a frigid winter. So let me just talk about a little bit. It’s mainly in the lake states and what we had in the lake states is we had the arctic freeze came through in the first quarter which limited our ability and our contractors’ ability to bring logs into the mills. So while we had limited production coming out of the words we also had increased demand primarily from some of the pulp producers, that’s who we compete with for those woods. And then we got into the spring and we had all the rail. And again they couldn’t get into the woods to pull the wood in. And so we lost production in the first quarter and the second quarter at Hayward and then coming into the summer we also had to divert woods from some of our OSB mills into Hayward to run their production. But as Sallie mentioned, we’re about 20 million bit short of where we expected to be. So where we are right now is that it’s starting to get cold up there but it’s also raining, so that again rain limits your ability to get into the woods. But if we have a reasonable winter we should be able to pull up our log decks appropriately over the winter and into the spring, for the spring breakup. So I am pretty confident that our foresters have a plan. It does require us to bring wood from further out, that's why we had an increase in the wood costs in the third quarter. Gail Glazerman – UBS: Okay, and are you having any of these issues in other segments and generally maybe some perspective on inflation, particularly given the recent decline in oil prices?

Well from the wood issues, we haven't really -- we had a little bit of wood issues in Manitoba, again it was very wet during the summer but I don't expect any problems there in the US south, their wood costs were actually down a little bit. So I think we are in good position in our southern mills. As far as what the impact on oil pricing, that affects us in a couple different ways. One, we would expect resin pricing to come down, it’s tailing adjustment, so we’ll get the advantage of the $80 oil more in the first half of next year than we will this quarter. And then the other impact on that is on the freight side, both incoming and outgoing, there's freight – there is oil surcharges on some of our freight costs. That generally benefits our customers more than us as they pay the brick in general. Gail Glazerman – UBS: Okay, and turning to OSB a little bit, can you give a sense of downtime and maybe how it would have compared to the second quarter and any sort of outlook for the fourth quarter?

Sure. Gail, in the second quarter we took 50 days of downtime – I am sorry in the third quarter we took 50 days of downtime. So it was – which is about the equivalent of 75 million square feet in the second quarter, we took about the equivalent of 125 million square feet. So we took less downtime and as for the fourth quarter, we don’t give – make statements about what our downtime is going to be but we will just continue to manage the supply and demand as we traditionally do in our OSB business. Gail Glazerman – UBS: Okay, and just on the Swan Valley conversion, can you give a sense of, a) what type of utilization rate it's been running at recently? And when would you expect, based on your current plan, appreciate it hasn't been formally approved by the board, to be able to produce some siding on the line?

Well we have – Swan Valley – or our Canadian mills have taken most of our downtime through this last couple years. So Maniwaki in Quebec as well as Dawson Creek in British Columbia and Swan have all taken downtime. I think typically we’ve run Swan at the 60% to 65% in the utilization level. From a timing standpoint we would like to be producing siding in the beginning of the fourth quarter of next year. Gail Glazerman – UBS: And your expectation was that you'd still be able to produce OSB during the conversion for most of the time?

Well certainly – well through most of the conversion we will need to take the mill down to do the tie-in. So we will probably lose 30 to 35 days of production late in the third quarter but we would anticipate running Swan on OSB through August probably.

Next question comes from the line of Mike Roxland with Bank of America. Mike Roxland – Bank of America Merrill Lynch: Thanks for taking my questions. Just a follow up to Gail's on the downtime, is there a particular reason you took less downtime in 3Q? The reason I ask, it seems like many of your peers took increasing amounts of downtime during the quarter and also pointed to the potential for them to take more downtime in 4Q.

The way I would address that Michael, is we have contractual obligation to our customers but generally what we did in the third quarter was we met those contractual obligations. We had a little bit of open market wood, which meant we produced above those contracts but not significantly above. So if you look at the increase in our volume wood by 10% or 11%, the market overall if you look at the demand from the EPA was up about 9% to 11%. So we were kind of right where the market is in Q3. Mike Roxland – Bank of America Merrill Lynch: But you produced a little bit more because of the contractual obligations that you have with your customers, is that why those contracts I guess required more square footage in the third quarter?

We had better pulls from the home centers in the third quarter. Mike Roxland – Bank of America Merrill Lynch: My final question, just on the EWP business, continue to be surprised by some of the weakness you have in that business relative to the results that some of your peers have posted within the last week or two. Can you just comment on what you are seeing in EWP and what some of the constraints are that you are experiencing on why we wouldn't see a more robust EWP performance relative to some your competitors?

Well actually I am pretty pleased with the performance. You need to remember about our EWP business is about 40% of that is through either a joint venture or marketing arrangement. So what we get on that is we share the margin with the Abitibi JV for I-Joist and the arrangement we have with Murphy Plywood to sell their LVL, we basically get a sales commission on that. So we’re not going to enjoy the manufacturing margins – the full manufacturing margins on either the JV which we split or on the marketing arrangement. But if you also look at it on a return on capital we don't have big capital investment. We have no capital investment in the Murphy arrangement and just half of the JV. So really adjust those margins for what is if you will contract manufacturing versus our own production.

Our next question comes from the line of Kapam Amtura with BMO Capital Markets.

Good morning, thanks for taking my question. Curt, I was wondering if you can comment at all in terms of just inventories in the supply chain in OSB and how, if at all, you've seen any noticeable change in the last quarter?

If you are asking for inventory in the channel, we have not seen any noticeable change in that. I think as we go into the fourth quarter we will be pulling down their inventories but in the third quarter I didn’t see any big changes.

And how would you categorize, at this moment, in terms of maybe on an absolute level or relative to what you have seen historically?

I would say and it’s all anecdotal but based on what I've heard from our salespeople the inventory in the channel is above where it was the same time last year.

That’s right. We haven’t seen any build – just they are pulling as they need it.

And as my follow up, can you just tell us at what operating rate are you running Dawson Creek and maybe Clark County?

Yeah we don’t tell how we are running mill by mill. Our OSB business for the operating mills in the quarter ran about 79% of our total –

And this is both the US and Canadian mills combined?

Yes.

Our next question comes from the line of Steve Chercover with Davidson. Steven Chercover – D.A. Davidson & Company: I think it's appropriate that you are budgeting for no more than 1.1 million starts. However, I think current capacity is still sufficient to satisfy 1.2 million, which means we are about 1 billion square feet too much. So, how are you going to adjust your operating stance or does the conversion of Swan Valley address this?

Well I think there’s two things. One, we won't be producing any OSB at Hayward at all next year. We produced a little bit the first half, as Sallie said we didn’t produce any in the third quarter. So that production has been taken out of the equation and then the conversion of Swan Valley will take 550 million square feet of ancillary totally off OSB market. Steven Chercover – D.A. Davidson & Company: And is it offline next year as you do the work, or does it still produce until you switch?

As I just said we probably wouldn't take it off-line until September. So we will run at reduced levels until September and then we will take it offline, do the conversion and hopefully come upon on siding in October timeframe. Steven Chercover – D.A. Davidson & Company: So with Hayward out, I mean you are making a little bit of a dent, but we probably still need to see some other people step up with either downtime or it would be great to see a mill go down?

Well if we are really on 1.1., that’s another r 1.1 billion square feet of demand from those 100,000 housing starts and if we are anywhere north of that, then that either will cut into that excess capacity. So we are aware of that. Steven Chercover – D.A. Davidson & Company: And then if I'm not mistaken, your sales to the big boxes like Home Depot are linked to benchmark 7/16 North Central. That's probably served you well this year.

No, Steve, they are linked to whatever region we are selling into. Steven Chercover – D.A. Davidson & Company: Oh, they are linked by region, okay.

Very little wood actually gets sold in North Central. Steven Chercover – D.A. Davidson & Company: Well, we know that. But I think people focus too much on that, it's like West Texas intermediate, I guess.

Our last question comes from the line of Alex Ovshey with Goldman Sachs.

A couple of questions for you guys. If housing starts, let's say, come in better than where the base case is now, how quickly do you think you can react to that demand? How long would it take to be able to react to any sort of upside surprise in the demand side?

Well we’ve just talked about Alex – it gets to 1.2, as Steve said I think there is sufficient capacity in the market to handle. As it gets north of that then there will be need to be some of the idle mills will need to come back online. Again there is another 200,000 housing starts, that’s 2.2 billion square feet of capacity, uses up a lot of what is excess at the current time.

Right, but I guess my question really is -- if you guys are budgeting for 1.1 though, we have no idea what everybody is doing. If that's really what you guys are doing, so if it's at 1.2, do you lose share next year because you budgeted for 1.1, or is it not really the way we work?

Well what you do is add back the ships that you have taken off – that’s a relatively short term. What takes time and takes money is to bring up a mill that’s been idled and the only mill that we have that’s been idled that could come back online is [Shambore] and it’s been down since 2008. That’s been the type of hire the crew back and to do the necessary maintenance on that mill. So it’s probably a 12 to 14 month kind of process.

That's long, but adding a shift, is that a week or is that a couple of months?

Depends on where it is, but it’s generally 6 to 8 weeks.

Alex, one of the other ways we supplement that is by having our teams work overtime. So you can sort of have a shift in the half by adding overtime, or taking the overtime away if the demand is not there.

Okay, and then just on Clark County, so would that mill be running 24/7 right now, but maybe not running all the shifts 24/7? How does that sort of facility, your newest and best facility, so how does that facility actually run right now?

Well as I just talked a minute ago, is what we’ve been doing in satisfying our contract woods, because we brought that mill up, we didn't heavily contract that, so it’s a fair amount of open market wood and as a result of the weakness in the market we will take some downtime there, but of course we’ve had some logistics issues at that mill getting service from the rail road which continue to be something that all of us -- over the winter is the railroad service levels.

I just wanted to ask on siding because it's interesting, you really have seen a very significant improvement in profitability there even through, obviously though housing is well below where we were in the previous cycle, so it's really secularly driven. If you start to think about what the earnings power of that business would be in siding when housing does get back to a more normal 1.4, 1.5 level? Can you help us frame that opportunity for Louisiana-Pacific?

Well I think you have to look at it -- for housing we’re going to get a little bit greater than the recovery in housing. So housing goes up 10% we should get more than 10% because we have a better product. In repair remodel that activity is generally kind of a 5 to 10% growth rate and then in the big boxes you get to repair -- you get kind of their growth rate which Home Depot I think gave guidance out that they expect 6% to 7% and the store to store revenue growth in the coming couple of years. And then the new markets like sheds, that’s an area that we’ve been growing in the high teens. So overall we would expect our siding business to be north of 14% to 15% growth on an annualized basis.

And would the incremental margins be above where it's running right now, or would there have to be investment that you would have to put into the business, so margin profile would be similar? Maybe even a little bit lower than where it is on that 15% of topline growth?

Well for the first part of next year, we will be using existing assets that we’ve already made the capital investment. As you get to the end of the next year then we will add on the additional capital of Swan Valley to that. So there will be a little more capital required but these should be good margins all the way through the cycle.

And our last question comes from the line of Paul Quinn with RBC Capital Markets. Paul Quinn – RBC Capital Markets: I've been on and off this call, so hopefully these questions haven’t been asked. So just talking about the Swan Valley conversion, if you look at 2016, and we've seen great growth in the siding market in terms of volume pick up, and it’s positive here that Hayward won't be producing siding next year. But do you expect a 90%, 10% OSB siding mix out of that mill depending on the operating rate in 2016 once you are fully up and running on siding?

Well it’s a good question, Paul. That is a [24 foot press] which makes it ideal for doing our panel products. So we’d likely do is move the panel production that’s in our other mills, Swan and Swan probably will be primarily a siding mill and then we will go back to Hayward and shift that between siding and OSB. Paul Quinn – RBC Capital Markets: That makes a lot of sense. Okay, and then the other question I had is just on the pricing premium that we're still seeing in the marketplace between plywood and OSB, whether you can comment whether you see that shrinking anytime soon?

It’s surprising to be – it’s been as large as it has, I would've thought that there would've been more substitution but I don't have a good answer for you. It seems like plywoods found its equilibrium in non-construction markets, so that’s what’s driving that pricing. Paul Quinn – RBC Capital Markets: Yes, and everybody points to higher operating rates as the real prime difference. Okay, thanks very much, best of luck going forward.

Great, thanks Paul and thanks everyone. Well, Chris, I think that was the final question. So if you could please provide the replay number that would be great and we would like to thank everyone for participating on the call. As always, Mike and Becky are there to answer any of your follow up questions. Thank you. Have a great day.