September 24, 2009

Dear Friend,

Attached you will find our LPX report.  On September 21, 2009 LPX announced a common stock offering and priced it at $6.75 per share on September 23, 2009.  The offering adds 20.7 MM common shares bringing fully diluted shares outstanding to 144.1 MM.  We view this dilution as a blemish to future valuation potential.  Additionally, we no longer believe that macro improvements will drag all stocks upward and that more justification would be needed for LPX’s current stock price of $7.12.  

We lowered our rating to underweight from neutral as future refinancing risks, potential additional share dilution, and a poor OSB price do not bode well for LPX’s future.  We are maintaining our price target of $5 despite improved earnings forecasts due to dilution and a late seasonal peak for OSB prices.

Faithfully,