Good morning, ladies and gentlemen, and welcome to the West Fraser Third Quarter 2025 Results Conference Call. This call is being recorded on Thursday, October 23, 2025. During this conference call, West Fraser's representatives will be making certain statements about West Fraser's future financial and operational performance, business outlook and capital plans. These statements may constitute forward-looking information or forward-looking statements within the meaning of Canadian and United States securities laws. Such statements involve certain risks, uncertainties and assumptions, which may cause West Fraser's actual or future results and performance to be materially different from those expressed or implied in these statements. Additional information about these risk factors and assumptions is included both in the accompanying webcast presentation and in our 2024 annual MD&A and annual information form as updated in our quarterly MD&A, which can be accessed on West Fraser's website or through SEDAR+ for Canadian investors and EDGAR for United States investors. I would like to turn the conference over to Mr. Sean McLaren. Thank you. Please go ahead.

Thank you, Inna. Good morning, and thank you for joining our third quarter 2025 Earnings Call. I am Sean McLaren, President and CEO of West Fraser. And joining me on the call today are Chris Virostek, Executive Vice President and Chief Financial Officer; Matt Tobin, Senior Vice President of Sales and Marketing; and other members of our leadership team. On the earnings call this morning, I will begin with a brief overview of West Fraser's Q3 2025 financial results and then pass the call to Chris for additional comments before I share some thoughts on our outlook and offer concluding remarks. West Fraser posted negative $144 million of adjusted EBITDA in the third quarter of 2025 as we continue to operate within an extended cycle trough. Of note, this quarter included a $67 million out-of-period duty expense related to the finalization of Administrative Review 6 or AR6. New home construction remained relatively stable during the period, albeit at uninspiring levels, with annualized U.S. housing starts averaging just 1.31 million units through August on a rolling 3-month seasonally-adjusted basis as mortgage and interest rates continue to present headwinds to U.S. housing demand and affordability. And as we've noted for several quarters, repair and remodeling demand was subdued once again this quarter. Despite the tough Q3, our balance sheet continues to demonstrate strength as we exited the quarter with nearly $1.6 billion of available liquidity and a healthy cash position that remains positive net of debt. A strong balance sheet and liquidity profile, along with our investment-grade rating remain key elements of our defensive capital allocation strategy, which allows us to invest in our business countercyclically and take advantage of investment opportunities if and when they arise. With that brief overview, I'll now turn the call to Chris for additional detail and comments.

Thank you, Sean. And a reminder that we report in U.S. dollars and all my references are to U.S. dollar amounts, unless otherwise indicated. The lumber segment posted adjusted EBITDA of negative $123 million in the third quarter, inclusive of the previously mentioned $67 million out-of-period duty expense. This is in comparison to $15 million of adjusted EBITDA reported in the second quarter with the sequential change driven largely by lower pricing and the AR6 duty expense. Of note, operations at our old Henderson site are winding down and the new mill is entering its commissioning phase. Our North America EWP segment posted negative $15 million of adjusted EBITDA in the third quarter, down from $68 million in the second quarter, with the sequential change largely driven by lower OSB pricing. The Pulp and Paper segment posted negative $6 million of adjusted EBITDA in the third quarter compared to negative $1 million in the second quarter, with the sequential change largely attributable to Cariboo Pulp's annual maintenance shut that occurred in the third quarter. Prior to and following the maintenance outage, we are seeing improved operating performance from Cariboo Pulp in terms of daily output. Finally, our Europe business generated $1 million of adjusted EBITDA in the third quarter similar to the $2 million reported in the second quarter. In terms of our overall Q3 results, lower product prices for our lumber and North American OSB products were the largest contributing factors as compared to Q2. We were also impacted by a number of major maintenance activities during the quarter, most significantly the Cariboo maintenance shut. Cash flow from operations was $58 million in the third quarter with our net cash balance at $212 million, down from $310 million in the prior quarter. The relative decrease in our net cash balance reflects lower earnings offset in part by a reduction of working capital plus the impact of $90 million of capital expenditures and approximately $65 million of cash deployed towards share buybacks and dividends. In terms of our 2025 shipments guidance, with the demand softness we continue to experience across our lumber product portfolio, we are narrowing our outlook by reducing the top end of the guidance range for both SPF and SYP 2025 shipments while maintaining the North American OSB and EU OSB shipment guides for 2025. We are also confirming our 2025 CapEx guidance range of $400 million to $450 million. All updated views on our 2025 outlook are presented on Slide 8. Regarding softwood lumber duties. Earlier in the third quarter, the U.S. Department of Commerce released final CVD and ADD rates for AR6 which are based on the year 2023. These rates were largely as we had anticipated and at a combined rate of 26.5%. West Fraser has the lowest duty rate in the Canadian industry. More recently, the U.S. administration issued a proclamation that imposed Section 232 tariffs of 10% on imported softwood timber and lumber into the U.S., which came into effect on October 14, 2025. This tariff is in addition to the existing softwood lumber duties. With that financial overview, I'll pass the call back to Sean.

Thank you, Chris. Looking forward, we continue to monitor macroeconomic conditions complicated by shifting trade policies. Despite such a backdrop, the company remains well positioned to navigate the dynamic and difficult business environment we face today, backstopped by a strong financial position. As a reminder, we acted early in this down cycle, optimizing our portfolio of assets to create a more resilient company. This included permanently removing 170 million board feet of capacity in our Canadian lumber business in 2022 and 650 million board feet of capacity in 2023 and 2024 through the permanent or indefinite closure of five of our leased economic lumber mills in the U.S. and Canada. Combined, these capacity removals account for 820 million board feet, representing approximately 12% of the company's lumber capacity prior to the actions taken. Considering our shipment guidance for 2025, our implied Q4 operating rate reflects the curtailment of approximately 20% to 25% of that capacity. Furthermore, we divested three pulp mills for $124 million in 2024 and acquired high-quality lumber and OSB assets. In the aggregate, all these actions to high-grade the portfolio have made us better at the bottom of the cycle. Going forward, we will continue to take this approach of managing our asset portfolio to do what is both prudent for the long term and necessary in the short term. Expect us to continue to be flexible in our operating strategy, meeting the needs of our customers and operationalizing the benefits of our strategic capital to drive down costs, all while keeping our focus on a safe working environment for our employees. We are wrapping up a number of capital projects that have been in progress during the current market and expect the start of these projects will continue to lower costs as they are operationalized. We will also continue to pursue a balanced capital allocation strategy that includes investment in value-enhancing projects, pursuit of opportunistic investments in growth, and the return of capital to shareholders as we leverage the competitive advantage of our balance sheet strength and available liquidity. In terms of our more general medium- to longer-term outlook, we will continue to lean on our industry knowledge and experience to make the decisions that we believe will not only keep the company resilient in the trough of the cycle, but will also allow the company to be better prepared for the next industry demand recovery whenever that may be. North American support lumber supply has been trending lower in recent years, with a material proportion of that capacity closed permanently due to factors including high-cost fiber supply, legacy technology, shrinking residual markets and now more recently, increased duties and tariffs. When lumber supply-demand dynamics eventually find balance and demand cyclically improves, we expect our ability to add material new supply will face the same significant obstacles, access to economically viable fiber, high capital costs that challenge returns on investment and long-term viable outlets for residual products. Shifting briefly to tariffs. Regardless of what may happen on this front, as we have said before, we continue to monitor the Canada-U.S. trade situation closely and remain agile and ready to respond as needed. We will also continue to work closely with our federal and provincial governments to support discussions when called upon as they relate to softwood lumber. In closing, at West Fraser, we aim to deliver strong financial results through the business cycle. We achieved this leveraging our product and geographic diversity, modern, well-capitalized assets and the dedication of our people and culture rooted in cost discipline and a commitment to operate responsibly and sustainably. We remain steadfast in the strategy. Although we continue to have a challenged near-term outlook, we are optimistic about the longer-term prospects for our industry and for West Fraser, and we look forward to continuing to build one of the world's leading sustainable building products companies. Thank you. And with that, we'll turn the call back to the operator for questions.

And your first question comes from Ketan Mamtora from BMO Capital Markets.

Maybe to start with and recognizing that this is a pretty tough backdrop right now. I'm just curious sort of your approach to managing production in both lumber and North America OSB, particularly in this environment, which increasingly looks like that demand is likely to remain soft here in the near term. Can you sort of just give us some part on sort of how do you approach sort of managing production, particularly as we are looking at sort of another year where EBITDA could be kind of negative in lumber?

Ketan, I'm glad to discuss that. I'll begin by reiterating some points regarding the actions we took early in this cycle, which included permanently or indefinitely closing several of our mills and adjusting our shift configurations. We have remained flexible in our lumber portfolio following these actions. As you've noted in our guidance throughout the year, we maintain a variable operating strategy across all our product lines, especially lumber and OSB, that responds to our economic situation and customer demand. This is how we manage production, and we continually make those decisions within our operations.

Understood. And then on OSB, what was sort of the implied Q4 operating rate looked like based on what you all have discussed? You talked about sort of 25% temporary curtailment in lumber. How does that look like in...

Yes. I'll let Chris touch on that one.

Yes. I think, Ketan, as you'll recall, I think when we've discussed this before, right, Q4 is always very heavy for us on maintenance shuts. We strategically take that maintenance downtime in Q4 because it is a weaker seasonal period. So I think with the shipment guide that is out there, that would imply an operating rate of somewhere around 80% in the fourth quarter.

Understood. And then just last one from me. On the balance sheet side, clearly, the balance sheet is very strong. You've got a net cash position. Curious about sort of how you think about M&A opportunity in this kind of down cycle at the moment? And where do you think you've got the most opportunity for inorganic growth?

Yes, I'll take that question first, and then Sean can chime in if he wishes. We've been consistent over the past few years in our approach to mergers and acquisitions. For us, the priority is quality. In the current environment, this quality-first strategy is crucial, given the various challenges we face, such as residual supply, asset quality, workforce availability, and timber availability. Our strong balance sheet provides us the flexibility to pursue our longstanding strategy, which has always focused on growth. However, our priority will always be on quality and measures that strengthen the company. This is evident in our actions over the past few years, where we have selectively added high-quality assets to our portfolio and removed those that do not enhance our strength during economic downturns. This emphasis on quality will guide our decisions regarding potential opportunities. Sean?

No, that's perfect, Chris, all quality and enhancing our strength at the bottom of the cycle. Those are the priorities as we think about what might be next for West Fraser.

And your next question comes from the line of Ben Isaacson from Scotiabank.

Just two questions for me. Sean, I think last conference call, so 3 months ago, the federal government was starting to talk about a possible support and conversations around that when it comes to lumber. So it's been 3 months and things have not really improved in terms of the macro backdrop. Can you talk about what you're willing to share in terms of how those conversations are going and how federal support for lumber is starting to stack up?

I can't recall the exact date, but I think it was early August in British Columbia. During that time, a small lumber business received some support measures from the premier. While I don't have all the specifics available publicly, there was funding provided for exploring different markets within the industry. We have responded as needed and, with a strong balance sheet, we are continuing to support these measures alongside the government. At the same time, we are also maintaining our own balance sheets, which is helping to reinforce our operations. I probably wouldn't add more than that, Ben.

Okay. That's fair. And then just a second question is perhaps for you or for Matt. With respect to your own customers that you talk to regularly, can you give some kind of sense in terms of how many months or days or weeks of inventory is in the U.S. channel, again, when it comes to your customers only relative to normal conditions for mid-October?

Go ahead there, Matt.

Sure. I can answer that. I would say we don't really have visibility into our customer supply chain or their inventory levels. What I can speak to is our inventory levels and they're lean in both SYP and SPF, which has been intentional in this uncertain market to run our inventories lean.

Okay. So just to be clear, from the rate of reorder, you don't have a sense of when your customers are going to come back and what their needs will be in the next two to three months.

No, I'd say they're buying as their needs come to them, and we're ready to service them in whatever regions they're in. But I would say no fundamental change or visibility to their inventory levels.

One thing I might add is that our customers have access to products readily available, so they are purchasing what they need as they need it. We are maintaining our inventories at a below-average position, so our guidance reflects that things are flowing through based on this approach.

Your next question comes from the line of Sean Steuart from TD Cowen.

Sean, I want to follow up on the M&A question, and I appreciate your comments around all the assets and building strength at the bottom of the cycle. I guess the follow-on is, we're 3 years into this lumber downturn in North America. Have you seen more opportunities coming to the surface? And if so, would those opportunities include the types of assets you're looking for? I guess I'm trying to gauge what the opportunity set looks like now and how that's changed over the last 3 to 6 months.

Sean, probably not. I think we may have addressed this question on a previous call. There hasn't been a significant change this year. Typically, in the early stages of an upswing, people consider selling quality assets, and may begin to market them. However, looking at the pipeline, I don't think there's anything that stands out beyond the usual. Higher quality assets are generally being held for a more favorable time to market. So, overall, there isn't anything immediately available that is high quality and fits our criteria.

And I also wanted to follow up with your comments on North American supply management on the lumber side and appreciating you've done a lot of work on permanent and indefinite closures over the last 3 years. Is part of the decision-making for you at this point in the cycle, we're arguably closer to the end of this downturn than the start at this point, hopefully. Is there reluctance to take more permanent or indefinite shuts at this point when maybe we can see the light at the end of the tunnel as affordability headwinds start to ease? Is that part of the thinking and the thought process when you're gauging sort of rolling downtime versus further definite or permanent closures?

Yes, that's a good question. We always consider how our assets are performing during the current down cycle and if we have a clear plan for the next one. Making decisions is challenging, and while I agree we might be closer to the end of this downturn, it's still uncertain. We have to continually evaluate whether there's a more efficient operating model that reduces costs and enhances our competitiveness at the bottom of the cycle. Specifically, when looking at our Southern Yellow Pine and OSB lines, we see that volume is decreasing but costs are lower. This is how we approach our decision-making process, and every asset faces scrutiny in this environment.

And your next question comes from the line of Matthew McKellar from RBC Capital Markets.

I appreciate all the details so far. First from me, could you maybe just share with us how conditions in the Canadian markets have evolved in the last few months, is there anything to call out in terms of differences with the band between the U.S. and Canada? And then are you seeing any of your competitors behave any differently in the Canadian market since higher U.S. duties or the tariffs took effect?

Yes, I can take that. I would say that the Canadian market remains competitive. It's a much smaller market than the U.S. market. So while it's an important market for us and we service those customers, it generally doesn't drive demand. And I would say it remains competitive just with where we are in the cycle and all the other things you've mentioned going on, but I would say nothing unusual, just having to compete every day to service our customers in that market.

And then just a couple of cleanups. If we're in an improved, but still, relatively soft wood products market next year, how should we be thinking about CapEx? I appreciate that Henderson will fade year-over-year. How does that evolve into '26 in your view? And second would be just the fire at the Cowie facility, can you help us understand what the state of that facility is today?

Sure. Yes. Thanks. So on CapEx, as we look forward, I think as we said in the comments, we've spent a lot of capital. And I think that's one of the advantages of our strong balance sheet is we've been able to be durable with our capital allocation strategy and invest for the future in what have been pretty difficult market in the last couple of years, considering that, as Sean said, we're wrapping up a lot of fairly major projects here, and our focus is shifting to operationalizing those. So I think you can sort of think about what that means relative to 2026. We'll be out in February with our 2026 CapEx guidance. We have had two pretty busy years with big projects going on. With respect to Cowie, I think, flagged in the materials, right, that incident happened about five weeks before the end of the quarter. The facility has been repaired back up and running, and I think we're pretty pleased with what we're starting to see in the European segment in terms of maybe some green shoots of things starting to turn around there.

Your next question comes from Hamir Patel from CIBC Capital Markets.

Sean, we don't have access to the U.S. trade data at the moment during the shutdown. But on the ground, are you seeing any signs of European lumber imports increasing just given that their competitive position has improved relative to Canada with all the duty and tariff changes since August.

I don't think we have a lot of visibility to that, Hamir, without the data coming in. But Matt, would you add anything to that?

No, I'd say like you said, not a lot of visibility and no meaningful change that we can see in them.

Okay, fair enough. I just want to ask about OSB demand in Europe. How are things going in both the new residential market and the repair and remodeling sector?

Yes. Chris mentioned the unfortunate incident at Cowie, but our team did an excellent job of making repairs and restoring operations at the mill. However, that event overshadowed some progress we were making in Europe. It's difficult to determine how much of the demand is driven by consumer needs versus supply issues, but we are observing a month-over-month improvement in pricing for OSB and a corresponding increase in demand. Therefore, we are feeling more optimistic about Europe in the upcoming quarters, and we will see how things develop.

And we have a follow-up question from Mr. Sean Steuart from TD Cowen.

Chris, you guys have done a good job on working capital management. And yes, I appreciate the seasonality in Q1 you'll update big log deck builds in Canada. Can you speak generally though, to, I guess, the changes you've made in terms of how you're managing working capital? Over the mid- to long-term room for more reductions there, ability to pull more cash out of that, just broader perspective on how you're thinking about that item.

Yes. Look, I got to give a lot of kudos to the operations teams across the company on this front. I think it spans all elements of the working capital, we manage our credit and receivables very tightly while still maintaining good relationships with our customers. The cycle there is pretty short. I think as Matt indicated in his comments, in many of our businesses, we're at or below target levels and operating with fairly lean inventories, which presents some challenges from time to time in terms of filling orders. But the teams are doing a remarkable job of managing through that and learning how to operate with lower inventories. Lots of work, I'll say, going on in terms of procurement as well as vendor selection and things like that. So it spans all aspects of this. I'd say it's not just something that because of the environment we're in, it's getting any more focus than it ordinarily does, I think the teams work hard on this stuff all the time. They're probably tired of hearing me talk about working capital. But it's really been, I think, a source of strength for us here in the last while, really releasing on all aspects of the balance sheet, and it helps run a more efficient and effective business. So what does that translate into going forward? Hard to say on the way out, but I think some great learnings across the business and a deep focus on strong execution.

And there are no further questions at this time. I will now hand the call back to Mr. Sean McLaren for any closing remarks.

Thank you, Inna. As always, Chris and I are available to respond to further questions as is Robert Winslow, our Director of Investor Relations and Corporate Development. Thank you for participation today. Stay well, and we look forward to reporting on our progress next quarter.

And this concludes today's call. Thank you for participating. You may all disconnect.