Bridgewell Resources LLC – Q3 Review 2010

Kyle Burdick, President

Bridgewell Resources LLC (“Bridgewell” or the “Company”) continues to enjoy an incident rate of zero for both Q3 and YTD.

Market conditions remain challenging in the majority of our core markets. Pricing for certain products has softened, particularly in the structural panel market, where prices have declined dramatically since the end of Q2. Flooring markets were strong in Q3 as a result of short supply rather than increasing demand, a phenomenon we are seeing across a variety of the products we trade as the broader economy lurches toward recovery. Sales volumes in domestic utility markets continue to lag prior years as domestic utility clients defer infrastructure maintenance spending.

Our Q3 financial performance saw positive momentum. Both Utility & Construction and International Wood Products posted stronger sales performance, with Panel, Domestic Wood Products and Food & Ag posting slight declines. Overall, we continue to be confident in our ability to leverage our existing cost structure as the Company grows. We believe that Bridgewell has now stabilized following the acquisition and transition out of receivership, and is poised for significant growth.

Moving into Q4, we expect to experience the traditional seasonal decline in business activity. We are well positioned to take advantage of the exciting growth prospects available to us in a variety of products in both domestic and international markets and we anticipate substantial increases in revenue and profitability in 2011.

Capital Equipment Resources LLC – Q3 Review 2010

Mike Thuon, Chief Financial Officer

We are very pleased to welcome Henrik Jensen as the new CEO of Capital Equipment Resources LLC (“CER” or the “Pangborn Group”). Henrik joins the Pangborn Group after a distinguished career with Sauer-Danfoss, where he served as Managing Director, Executive Vice President and President of the Work Function Division.

In regard to safety performance, the Pangborn Group had two lost time injuries in Q3 2010, resulting in 10 lost time days. These were the only recordable or lost time incidents in 2010. Prior to these injuries, the Pangborn Group had achieved nearly 12 months with no recordable or lost time incidents.

North American and European Union markets continue to strengthen with the economic recovery. Asian markets have recovered well and we are pursuing many new equipment order opportunities in China. Our experience from prior recessions suggests that the recovery in capital equipment orders tends to lag the improvement in the general economy and, specifically, in the recovery of our aftermarket sales of replacement parts and services.

Consolidated EBITDA was positive in Q3 2010. The positive aftermarket trends from the first half of 2010 continued into the third quarter as utilization of customer machines in our installed base was well above prior year levels. We believe that aftermarket orders will continue to exceed prior year levels and that the prospects for new orders are improving. Nonetheless, we remain cautious and very focused on cost control and liquidity. We have taken significant steps to reduce costs, and remain prepared to take further cost reduction actions if necessary as the market dictates. In the meantime, we are making a renewed push to integrate with and capitalize on the breadth of product and knowledge gained with the acquisition of the European companies, and we are making a concerted effort to expand our geographic market coverage with new manufacturer’s representatives in Asia, Europe and North America.

Finch Paper LLC – Q3 Review 2010

Joseph F. Raccuia, President and Chief Executive

Finch is well on its way to achieving its safety goals for 2010. As we approach the end of year one of a five-year plan for world-class safety performance, Finch has instituted several procedures, including hands-on participation by all members of the Senior Leadership Team, daily crew huddles in all departments and mill-wide safety meetings. Achieving and maintaining world- class safety performance, as measured by our Recordable Incident Rate (currently at 1.0) and Lost Time Days Away rate (currently below .5), will require the full engagement and participation of all Finch employees.

Overall demand for uncoated free-sheet showed signs of softening as Q3 progressed, but prices remained at their highs for the year. As the quarter closed, an oversupply of imports reduced domestic machine backlogs, although overall pricing remained above forecast entering Q4.

The Company recorded strong Adjusted EBITDA for Q3 2010. Shipments during Q3 were average and net selling prices were above average. Finch reduced the volume of natural gas consumed in the facility by 28% during Q3 compared to the same period the prior year, resulting in a net savings. Finch also posted the strongest paper mill production rate of the year during Q3. Finch’s pulp mill also continued its strong production rate throughout the quarter.

We anticipate that Finch will sustain its recent improvements in productivity and product mix and will achieve its business plan in Q4 2010. We also expect our market share to continue to grow in all focus categories. Cost increases in some commodity areas will be offset by our strategic sourcing initiatives.

Forest Resources LLC – Q3 Review 2010

Larry Richard, President and Chief Executive

Forest Resources LLC (“Forest”), which includes our majority interest in CanAmPac, is a holding company engaged in manufacturing industrial and food packaging products, including recycled corrugated medium, clay-coated boxboard, kraft, crepe and specialty packaging papers, as well as corrugated boxes and folding cartons, at six facilities in the U.S. and Canada.

Forest had 1 lost time incident and 8 total recordable incidents during Q3 2010. Forest‘s TRR (Total Recordable Rate) for Q3 2010 and nine months ended September 30, 2010, were 4.70 and 3.79, respectively, compared to the 3.2 industry average rate. Boehmer Box achieved 38 consecutive months of no lost time injuries as of the end of Q3 2010.

Forest recorded higher EBITDA for Q3 2010 compared to the same period last year while operating in a very challenging market driven by higher fiber costs and the volatile Canadian dollar. Fiber costs remain well above 2009 levels and are forecast to increase during Q4 2010 due to low generation of wastepaper and a strong fiber export market.

Forest’s Mill Division has met these market challenges with aggressive cost and spending control initiatives and adjusted production to more closely match increasing customer demand driven by low customer inventories and tight mill capacity.

Sales at CanAmPac (Strathcona Paper and Boehmer Box) remained strong with EBITDA under the same fiber cost pressures as the Mill Division. The coated recycled board (“CRB”) market in Canada is sensitive to the strong Canadian dollar, which increases competitiveness of U.S. manufacturers and fiber costs. The strengthening Canadian dollar, which depressed earnings at Strathcona Paper in Q2, has begun to decline from recent highs.

Industry-wide inventories remain at historic low volumes; demand is increasing, but only over the extremely low levels of 2009. Continued discipline will be required by major producers to maintain production/demand balance in order to support the price increases already implemented this year.

Northern Timber Nova Scotia Corp. – Q3 Review 2010

Wayne Gosse, Chief Executive and Chief Financial Officer

Northern Timber Nova Scotia Corporation (“Northern Timber” or the “Company”) owns approximately 420,000 acres of timberland in Nova Scotia, which it acquired in a transaction with Neenah Paper Company of Canada in March 2010.

The Company’s largest revenue source is from the sale of standing timber stumpage through a Stumpage Agreement with an affiliate, Northern Pulp Nova Scotia Corporation (“Northern Pulp”). In addition, the Company receives revenue from land use activities such as campsites, cell towers and gravel pit leases. The Company recognizes depletion expense on its land as the standing timber is sold. Adjusted EBITDA for Q3 2010 was positive and liquidity remains strong, with positive cash balances at quarter’s end. Average monthly sales volumes are expected to be lower in Q4, reflecting seasonally lower production rates.

Northern Pulp Nova Scotia Corp. – Q3 Review 2010

Tim Lowe, Chief Executive

Northern Pulp Nova Scotia Corporation (“Northern Pulp,” the “Company” or the “Mill”) had two recordable safety incidents in Q3 2010, yielding a year-to-date recordable incident rate of 1.92, which is better than the Mill’s target of 2.00. The Mill’s 12-month rolling RIR is 1.44. The Company continues to focus on safety on a daily basis through the ongoing promotion of its SAFESTART program. The Company is also developing a new safety management system (“SMS”), which it expects to introduce either in late 2010 or early 2011.

During Q3, demand from China declined and there were also three mill restarts in Canada — two in British Columbia and one in Ontario — resulting in an increase of approximately 1 million tonnes of pulp into the marketplace. In addition, Chile appeared to have experienced a full recovery from its February earthquake disaster with the exception of one mill. World inventories of softwood bleached kraft pulp grew by approximately eight days in August and September, while the Canadian dollar remained strong.

The Mill achieved a number of production records in the quarter, including best quarterly production; best monthly production; and the best five daily production days ever. Year-to-date, the Mill improved its daily production run-rate. Mill reliability also improved from 78.4% in 2009 to 91.5% in 2010.

Adjusted EBITDA for Q3 2010 was strong. Work continued on a number of cost saving initiatives identified under the Mill’s Continuous Improvement Program. Substantial savings in energy usage continued to be realized and chemical consumption improvements were also achieved.

In Q3, considerable effort went into advancing the Green Transformation Program projects that are funded by our grant from the Canadian government. The identified projects have been clustered into three primary groups: odor reduction; improvements to the recovery cycle; and a power boiler upgrade. In addition, the Mill continued to move forward on a proposed renewable energy project.

Looking forward, pulp prices are expected to soften in Q4 and into next year as a result of mill restarts and a potential slowdown in economic recovery. The strong Canadian dollar and high fiber costs represent the greatest risks to the business at this time.

Phoenix Services International LLC – Q3 Review 2010

Doug Lane, President and Chief Executive

Phoenix Services International LLC (“Phoenix Services” or the “Company”) experienced an OSHA recordable rate of 3.4 in Q3 2010, with a lost/restricted workday rate of 1.2. Year to date, the Company has averaged an OSHA recordable rate of 3.8 relative to a slag industry standard of 5.0 and a steel industry standard of 3.7.

The domestic steel industry has seen a falloff in production since the end of Q2 2010, with weekly production falling by approximately 10% and many mills curtailing production or announcing temporary shutdowns.

The Company recorded positive EBITDA in Q3 2010. However, performance was impacted by the temporary shutdown of the Sparrows Point facility, where the Company performs a variety of contractual services, including slag handling, scrap recovery and scrap yard management.

The financial impact of the Sparrows Point shutdown has been mitigated by cost reduction measures implemented at the site, as well as the commencement of mill service operations at the Arcelor Mittal Galati mill in Romania, which marks the launch of Phoenix Services’ international operations.

Phoenix Services continues to experience strong demand for its services, both in the U.S. and internationally. The Company is currently exploring a host of additional opportunities, predominantly in North America and Eastern Europe, and has the capitalization needed to execute its growth plans. We remain extremely optimistic about the continuation of strong performance and growth at Phoenix Services.

RedBuilt LLC – Q3 Review 2010

Kurt Liebich, President and Chief Executive

RedBuilt’s safety culture and performance remain excellent. In the third quarter, we operated incident free, and YTD we have suffered two recordable incidents, which brings our Recordable Incident Rate to 1.23, slightly above our target of less than 1.0. The 200+ associates in the business have worked over 1,000 days without a lost time accident.

The commercial construction industry, which is RedBuilt’s primary market, remains mired in the Great Recession. Most indicators suggest that the worst is behind us, but we are continuing to “bounce along bottom.” We do not expect a significant recovery until at least 2012.

Since the acquisition closed in August 2009, we have developed additional products and market segments to help us survive the downturn in the commercial construction market. We have made solid progress. We have introduced a new scaffold plank and concrete forming line, and we have received code approvals to re-enter the Canadian, Japanese and Australian markets. In 2010, we will sell into these new segments, and we expect to realize significant growth in 2011, which will help us to offset the weakness in our core commercial business.

While we will continue to experience very difficult operating conditions over the next 18 months, we remain confident that we will be able to generate long-term value.

Wood Resources LLC – Q3 Review 2010

Richard Yarbrough, President and Chief Executive,
Eric Larsen, Vice President, Finance

Q3 2010 experienced a decline in the markets served by Wood Resources LLC (the “Company”) from the market peak of Q2. Although industry-wide production remained on a decline, consumption declined even faster, as buyers returned to their practice of buying only on back-to- back business. Inventories remain nearly non-existent in the channel.

Even though pricing retreated to Q1 levels by the end of Q3, improved operating performance enabled the Company to generate positive EBITDA. The Company’s commodity business, Chester Wood Products, led the Company’s performance for the quarter. Safety performance was excellent, with no incidents during Q3. Moncure Plywood continued improving its cash cost of production, achieving its best quarter to date. In addition, Moncure’s exemplary safety performance continued, with no incidents for the quarter and only one incident in the last six quarters. Olympic continued its trend of stable performance with its sixth consecutive quarter of positive EBITDA.

With current lackluster demand across most of the Company’s markets, we are anticipating prices to drop below Q3 levels and continue to languish at these levels during Q4. We remain hopeful that a moderate pickup in demand in early 2011 will have a disproportionate impact on pricing, given the extreme tightness in the channel — similar to the experience of the first half of this year. Until then, our objective will be to maintain our highly competitive cost structure.