Mr. Peter Wijnbergen reports

NORBORD REPORTS 2014 RESULTS; DECLARES QUARTERLY DIVIDEND

Norbord Inc. had adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $90-million in 2014 compared with $287-million in 2013 on 31 per cent lower North American benchmark oriented strand board prices. North American operations generated adjusted EBITDA of $54-million versus $255-million in the prior year and European operations delivered adjusted EBITDA of $47-million versus $46-million in the prior year. In the fourth quarter of 2014, Norbord recorded adjusted EBITDA of $15-million, unchanged from the previous quarter and $14-million lower than the fourth quarter of 2013.

Note: Financial references in U.S. dollars unless otherwise indicated.

Highlights from 2014:

• Full-year earnings per share (diluted) of 48 cents on adjusted EBITDA of $90-million;
• Margin improvement program gains of $24-million;
• Record annual production at six of 11 operating mills; production volume up 6 per cent;
• Returned $116-million in dividends to shareholders in 2014; declared quarterly dividend of 25 Canadian cents per share to shareholders of record on March 1, 2015;
• Best-ever safety recordable rate of 0.69; received APA's 2013 Safest Company Award;
• Merger with Ainsworth announced last month -- shareholders from both companies voted over 99 per cent in favour of transaction on Jan. 27, 2015.

"U.S. housing continues to recover, albeit at a more gradual pace than originally anticipated. This put pressure on the North American OSB market, which in turn impacted our financial results," said Peter Wijnbergen, Norbord's president and chief executive officer. "However, Norbord's mills in both North America and Europe delivered excellent operational results this year, with six mills setting annual production records. We achieved $24-million in margin improvement gains, reflecting the ongoing effort across our company to reduce manufacturing costs and increase productivity. Our European panel business also had another strong year in the face of an increasingly challenging macroeconomic environment.

"Looking ahead, I remain positive about the unfolding housing recoveries in all our core markets. Customer feedback suggests the North American OSB supply chain is lean, which should support improving demand as we head into the spring building season. I am confident our European business will deliver continued strong results, in spite of the pressure in Continental OSB markets, as OSB substitution is accelerating and the economy in our largest market, the U.K., is outperforming the rest of Europe.

"As previously announced yesterday, I'm pleased to report that over 99 per cent of all shareholders and over 98 per cent of minority shareholders voted in favour of the proposed Ainsworth merger. We look forward to executing on our vision to create a leading global wood products company focused on OSB across North America, Europe and Asia."

Norbord generated earnings of $26-million or 49 cents per share (48 cents per share diluted) for the full year 2014 compared with $149-million or $2.92 per share ($2.79 per share diluted) in 2013. The company recorded earnings of $3-million or six cents per share (basic and diluted) in the fourth quarter of 2014 versus $2-million or four cents per share (basic and diluted) in the same quarter of 2013.

Market conditions

U.S. housing starts totalled approximately 1.01 million in 2014, up 9 per cent from 930,000 in 2013. Permits were also 4 per cent higher year over year. Single-family starts, which use approximately three times more OSB than multifamily, increased by 5 per cent. The U.S. housing economists' consensus forecast for 2015 starts is approximately 1.15 million, which would be a 15-per-cent year-over-year improvement.

The North Central benchmark OBS price averaged $218 per thousand square feet (seven-16ths-inch basis) in 2014 compared with $315 in 2013, a $97 decrease. North Central prices traded in a tight range for most of 2014 -- from a high of $235 in May, decreasing to the $220 range during the fall before finishing the year at $205. In the southeast region, where more than half of Norbord's North American OSB capacity is located, benchmark prices averaged $188 compared with $277 in the prior year.

In the fourth quarter, North Central benchmark OSB prices averaged $216 per thousand square feet, unchanged from the prior quarter and down $29 from the fourth quarter of 2013. Southeast prices averaged $181 in the quarter, up $4 from the prior quarter and down $11 from the fourth quarter of 2013.

Norbord's core European panel markets in the United Kingdom, Germany and Benelux all saw demand growth in 2014, despite the increasingly negative economic news coming from the eurozone. The United Kingdom, where three out of Norbord's four European mills are located, led the recovery with unemployment falling below 6 per cent, GDP growth of over 2 per cent and housing starts increased by 17 per cent compared with the prior year, supported by first-time homebuyer incentives and improved consumer confidence. In Germany, Norbord's largest Continental European market, housing starts increased by 5 per cent, the sixth-consecutive year of growth.

Year over year, particleboard prices increased 7 per cent while medium-density fibreboard prices, which are less directly impacted by the recovering housing sector, improved 2 per cent. OSB prices, however, decreased 6 per cent as Eastern European supply was redirected toward the west due to the conflict in the Ukraine.

Performance

Norbord achieved record safety performance with a companywide Occupational Safety and Health Administration recordable rate of 0.69 in 2014. In addition, four mills completed the year injury-free.

North American OSB shipments for the full year increased 5 per cent compared with the prior year. Fourth-quarter shipments were in line with the third quarter and modestly higher than the same quarter last year as higher mill productivity partially offset a reduced production schedule. For the full year, Norbord's operating OSB mills produced at approximately 100 per cent of stated capacity (excluding the two curtailed mills in Huguley, Ala., and Val d'Or, Que.) compared with 95 per cent in 2013. Annual production records were achieved at three of the company's North American OSB mills.

Effective at year-end 2014, Norbord's stated annual North American OSB capacity was increased by 150 million square feet (three-eights-inch basis), reflecting a significant capital investment to rebuild the wood-handling end at the Joanna, S.C., mill.

Norbord's full-year North American OSB cash production costs per unit (before mill profit share) decreased 1 per cent versus 2013 as improved productivity and lower raw material use more than offset higher raw material prices. Excluding the impact of uncontrollable higher raw material prices, unit costs decreased 3 per cent.

Norbord continues to rebuild the press line at the curtailed Huguley, Ala., mill to prepare it for a future restart. The company has not set a restart date, however, and will do so only when it is sufficiently clear that customers require more product. Norbord does not currently expect to restart its curtailed mill in Val d'Or, Que., in 2015, but will continue to monitor market conditions.

In Europe, shipments increased 6 per cent over the prior year. Production was 5 per cent higher as Norbord's panel mills ran on full operating schedules in 2014, excluding maintenance and holiday shutdowns. The European mills produced at approximately 105 per cent of stated capacity in 2014, compared with 100 per cent in 2013. Annual production records were achieved at the two OSB mills and both the particleboard and MDF lines.

Effective at year-end 2014, Norbord's stated annual European capacity was increased by a total of 170 million square feet (three-eights-inch basis), reflecting recent capital investments and improved operating efficiencies at the Cowie, Scotland, particleboard line, the Genk, Belgium, OSB mill and the Inverness, Scotland, OSB mill.

Norbord's mills delivered margin improvement program gains of $24-million in 2014, primarily from improved productivity, lower raw material use and a richer value-added product mix. Paybacks from recent investments in fines screening technology across several mills and the rebuild of the wood-handling end at the Joanna, S.C., mill also contributed to this year's strong MIP result.

Capital investments totalled $78-million in 2014 versus $83-million in 2013 and included the Joanna mill project, preliminary work to rebuild the press line at the mothballed Huguley, Ala., mill and other strategic projects across the company's mills. Given the slower than expected pace of the U.S. housing recovery, further investment to prepare the Huguley mill for restart has been deferred to 2015 and beyond. Following two years of significant capital investment, Norbord's 2015 planned capital expenditures are expected to be reduced to $50-million, which includes three fines screening projects and further debottlenecking and cost reduction projects under the company's multiyear capital reinvestment strategy.

Operating working capital increased by $21-million during the year to $65-million at year-end. This was largely driven by the impact of lower mill profit share accruals and the timing of payments on accounts payable. Working capital continues to be managed at minimal levels across the company.

At year-end, Norbord had unutilized liquidity of $367-million, consisting of $25-million in cash and $342-million in unused credit lines. The company's tangible net worth was $404-million and net debt to total capitalization on a book basis was 51 per cent. Both ratios remain well within bank covenants.

Dividend

On Dec. 8, 2014, in conjunction with the announcement of the combination with Ainsworth Lumber Co. Ltd., the company also announced that it anticipates that the board of directors of the combined entity will continue with Norbord's variable dividend policy. Taking into account growth and other attractive capital investment opportunities, and to maintain flexibility in the company's capital structure, the board of the company announced that it expected to set the quarterly dividend at 25 Canadian cents per common share in the first quarter of 2015. In the arrangement agreement with Ainsworth, the company has agreed to not pay more than 25 Canadian cents per common share for any future quarterly dividends with a record date prior to the closing of the merger, after which the board of the merged entity will determine the appropriate level of dividends on a quarterly basis.

Accordingly, on Jan. 27, 2015, Norbord's board declared a quarterly dividend of 25 Canadian cents per common share, payable on March 21, 2015, to shareholders of record on March 1, 2015.

The amount of future dividends under the company's dividend policy, and the declaration and payment thereof, will be based upon the company's financial position, results of operations, cash flow, capital requirements and restrictions under the company's existing revolving bank lines and senior notes, as well as broader market and economic conditions, among other factors, and shall be in compliance with applicable law. The board retains the power to amend the company's dividend policy in any manner and at any time as it may deem necessary or appropriate in the future. For these reasons, as well as others, there can be no assurance that dividends in the future will be equal or similar to the amount described above or that the board will not decide to suspend or discontinue the payment of cash dividends in the future.

Developments

On Dec. 8, 2014, the company and Ainsworth announced that they had entered into an arrangement agreement under which the company and Ainsworth will merge to create a leading global wood products company focused on OSB across North America, Europe and Asia. Under the terms of the transaction, the company has agreed to acquire all of the outstanding common shares of Ainsworth in an all-share transaction in which Ainsworth shareholders will receive 0.1321 of a share of the company for each Ainsworth share pursuant to a plan of arrangement under the B.C. Business Corporations Act.

On Jan. 27, 2015, the transaction was approved by the required majorities of shareholders of each of Ainsworth and the company. The transaction remains subject to customary conditions to closing, including court approval of the plan of arrangement. In addition, while the transaction is not reportable under the U.S. Hart-Scott-Rodino Antitrust Improvement Act of 1976 or the Canadian Competition Act, the U.S. Department of Justice has requested information about the transaction and the companies, as it is entitled to do. The company and Ainsworth are providing the DOJ with the information it has requested and are working pro-actively with the DOJ to ensure an expedited review process. Subject to approval of the plan of arrangement by the Supreme Court of British Columbia and the satisfaction or waiver of all closing conditions, the transaction is expected to close by the end of the first quarter of 2015. Further information on the transaction and its expected effects on the company can be found in the joint management information circular dated as of Dec. 18, 2014.

Brookfield and its affiliated entities, which control approximately 52 per cent and 55 per cent of the outstanding common shares of the company and Ainsworth, respectively, will control approximately 53 per cent of the outstanding common shares of the combined company upon closing. Based on the number of Ainsworth common shares outstanding as at Dec. 8, 2014 (the date of the arrangement agreement), approximately 31.8 million Norbord common shares will be issued to Ainsworth shareholders on closing.

Conference call

Norbord will hold a conference call for analysts and institutional investors on Wednesday, Jan. 28, 2015, at 11 a.m. ET. The call will be broadcast live over the Internet. A replay number will be available approximately one hour after completion of the call and will be accessible until Feb. 27, 2015, by dialling 1-888-203-1112 or 647-436-0148. The passcode is 8883760. Audio playback and a written transcript will be available on the Norbord website.

Mr. Wijnbergen said: "Our 2014 financial performance did not live up to our expectations. Still, I am excited by our strategic and operational accomplishments in the past year. We negotiated a transformational, growth-oriented merger with Ainsworth, a West Coast-based OSB producer with four high-quality, competitive mills. We also made significant continuous improvements in our own mills' cost structure. Our efforts this year have set us up well to capture the benefits of the improving market environment we see ahead.

"In 2014, Norbord delivered earnings of 48 cents per diluted share on adjusted EBITDA of $90-million. U.S. housing continues to recover, although at a more gradual pace than most experts originally anticipated. This put pressure on North American panel demand and OSB prices, which in turn impacted our financial results. While this is disappointing, we have continued to see double-digit year-over-year growth in our sales to home improvement centre and industrial customers, which has partially offset the slower-than-expected housing recovery.

"We made considerable progress this year improving the efficiency of our operations. Six of our mills set annual production records in 2014, including all of our European panel mills. Our operations also delivered $24-million of margin improvement program, or MIP, gains this year, reflecting the ongoing companywide effort to reduce manufacturing costs and increase productivity. Our strong operational performance demonstrates that we are 'in control of our controllables' at Norbord. We will continue to push hard for MIP each and every year as it remains our primary tool to offset input cost inflation.

"I have always believed that safety goes hand in hand with operating performance. Our safety record continued to improve in 2014 with a best-ever Occupational Safety and Health Administration recordable incident rate of 0.69. Four mills -- Genk, Inverness, South Molton and Nacogdoches -- completed the year injury-free. In addition, Norbord received the 2013 APA -- the Engineered Wood Association award for being the safest company in our industry. I want to thank all our employees for their commitment to continually raising the bar on safety performance.

"Margin improvements were complemented by a number of investments made over the past two years that are delivering tangible results. Last year, we completely rebuilt the wood-handling end of our Joanna, S.C., plant to debottleneck the continuous press and allow us to run at higher line speeds. We had a unique opportunity at this mill to make a step change in capacity that positions us well to serve the growing mid-Atlantic region. We also implemented fines screening technology at four more mills, which positively impacts our manufacturing costs by lowering our wood and resin use."

The Ainsworth merger

"In addition to our operational achievements, the big story of the year is our pending merger with Ainsworth. This transaction adds a new dimension to our growth story and will make us one of the largest and lowest-cost OSB producers in the world. Combining our two companies brings together Norbord's manufacturing cost leadership with Ainsworth's product development innovation. It will also allow us to better serve customers across North America and gain access to growing Asian markets.

"We are pleased that shareholders have recently voted overwhelmingly in support of the merger. We continue to work pro-actively with the regulatory authorities to expedite their review of this combination and expect to be able to close the transaction at the end of the first quarter."

What to expect in 2015

Market outlook

"We remain optimistic about the unfolding housing recoveries in all our core markets in North America and Europe.

"U.S. housing economists forecast 2015 starts in the 1.15 million range, a 15-per-cent improvement over last year. This reflects expectations that new home construction will grow at a more gradual pace than in previous cyclical recoveries as builders struggle with labour and lot availability. The U.S. economy appears poised for more impressive growth this year which should spur household formations, the biggest driver of new home demand. Customer feedback suggests the North American OSB supply chain is lean, which should support improving demand in the near term as we head into the spring building season. The recent plunge in oil prices is also providing some cost relief as the resins which account for one-quarter of our cash manufacturing costs are becoming less expensive each month.

"In our European panel business, we also see positive trends in spite of the re-emergence of negative headlines in parts of the eurozone. Our core markets (the U.K., Germany and Benelux) all saw improving OSB demand in 2014. OSB represents less than 40 per cent of structural panel demand in Europe today and the rate of substitution has recently accelerated. The long-term market fundamentals for OSB in Europe remain favourable, and we have advanced our plans to expand capacity at both our Belgian and Scottish OSB mills to keep pace with this growing demand."

Capital allocation

"After two years of significant capital reinvestment, we are pulling back our planned 2015 capital expenditures to about $50-million as our management team focuses on the integration with Ainsworth. Our capital program primarily involves the ongoing rollout of fines screening technology as well as several productivity improvement investments, all as part of our multiyear strategy to debottleneck and lower manufacturing costs across our mills. The rebuild of the Huguley, Ala., mill also continues, but at a slow pace given the more gradual recovery in U.S. housing.

"In today's press release, you will see that the board has set the current dividend payout to 25 Canadian cents per share for the first quarter of 2015. Our variable dividend policy allows Norbord to balance compelling investment opportunities in our business with our continuing commitment to returning cash to shareholders. It is the board's intention to maintain this policy following the close of the Ainsworth merger."

Moving forward as a global OSB leader

"Heading into 2015, our mills are lower cost and more productive -- and we expect our ongoing progress in these areas to pay off as market conditions improve.

"Our top priority this year will be to complete the merger with Ainsworth. We have great respect for Ainsworth, its people and its mills and are eager to begin working together with our new colleagues to quickly and seamlessly integrate the two businesses and deliver substantial synergies for all shareholders.

"We look forward to the coming year as one of continued progress and opportunity for our shareholders, customers and employees. On behalf of Norbord, I thank you for your vote of confidence as we build the world's leading OSB company."

                      CONSOLIDATED STATEMENTS OF EARNINGS
           (in millions of U.S. dollars, except per share information)

                                                          Years ended Dec. 31,
                                                                2014     2013

Sales                                                        $ 1,198  $ 1,343
Cost of sales                                                 (1,097)  (1,042)
General and administrative expenses                              (11)     (14)
                                                             -------- --------
Earnings before finance costs, costs
related to Ainsworth combination,
costs on early debt extinguishment,
income tax and depreciation                                       90      287

Finance costs                                                    (30)     (37)
Costs related to Ainsworth combination                            (5)       -
Costs on early debt extinguishment                                 -      (20)
                                                             -------- --------
Earnings before income tax and depreciation                       55      230
Depreciation                                                     (60)     (56)
Income tax recovery (expense)                                     31      (25)
                                                             -------- --------
Earnings                                                     $    26  $   149
                                                             ======== ========
Earnings per common share
Basic                                                        $  0.49  $  2.92
Diluted                                                         0.48     2.79

We seek Safe Harbor.