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Morning, ladies and gentlemen, welcome to the West Fraser Q1 2026 results conference call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, April 30, 2026. 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 U.S. 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 accompanying webcast presentation and in our 2025 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 U.S. investors. I would now like to turn the conference over to Sean McLaren. Please go ahead.

Thank you, Ina. Good morning, everyone, and thank you for joining our first quarter 2026 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 first quarter and then pass the call to Chris for additional comments before I share some thoughts on our outlook and offer concluding remarks. As we entered 2026, we saw a seasonal improvement in the lumber market. Southern Yellow Pine in particular, saw a better balance between available supply and seasonal demand.

While underlying demand for new residential construction and repair and remodel remained subdued, we experienced healthier market conditions compared with the second half of 2025. In OSB, Q1 market conditions remained challenging, though modest signs of improvement began to appear toward the end of the quarter as seasonal demand increased. Against this backdrop, West Fraser saw a positive sequential turnaround in first quarter results, led by stronger lumber pricing and operational progress. We generated negative $66 million of Adjusted EBITDA, this result includes $114 million of prior period duty adjustments, which Chris will get into shortly. Removing the impact of these adjustments, the underlying business generated $48 million, with all three of our segments, lumber, North American Engineered Wood Products, and Europe, contributing to the positive results.

This reflects a significant improvement from the $79 million loss in the fourth quarter, representing a turnaround of over $120 million. We continued to high-grade our portfolio during the quarter. We have completed production activities at our High Level OSB mill in Alberta and are four months into the production ramp-up at our new Henderson lumber mill in Texas. Our U.S. lumber portfolio optimization continues to lower our cost structure with five mill closures and two brownfield modernizations over the past five years. Our balance sheet remains strong, providing us with the flexibility through the cycle and optionality for the future. We ended the quarter with liquidity close to $900 million. The change in Q1 reflects the normal seasonal buildup of log inventory in Western Canada, which is consistent with our typical working capital cycle.

We expect this inventory investment to reduce in the second and third quarters as our mills work through their log inventories. We continue to operate with a strong balance sheet, allowing us to execute our capital allocation strategy. Our financial position also provides optionality for value-creating opportunities should they arise. As always, we will be disciplined on execution and returns. With that high-level overview, I'll now turn the call to Chris for additional detail and comments.

Thank you, Sean, and good morning, everyone. A reminder that we report in US dollars and all my references are to US dollar amounts unless otherwise indicated. In Q1, we generated -$66 million of Adjusted EBITDA. As Sean discussed, we had two large softwood lumber duty-related adjustments in Q1 totaling $114 million. Both adjustments are non-cash in nature. The first is based on preliminary rates released by the U.S. Department of Commerce for the 2024 calendar year, and the second due to a change in our estimate of amounts recoverable and payable as a result of the liquidation process covering the last half of 2017. I would point you to our news release of April 16 and our first quarter MD&A and financials for further details.

The Lumber segment posted Adjusted EBITDA of negative $84 million in the first quarter, but removing the duties impact results in positive $30 million compared to negative $57 million in the fourth quarter, an improvement of $87 million. This improvement is largely a result of higher SYP and SPF pricing. North America EWP segment delivered $11 million of Adjusted EBITDA in the first quarter, an improvement from the prior quarter's negative $24 million. This $35 million improvement is due largely to better OSB pricing in the quarter. In Europe, we generated $10 million of Adjusted EBITDA in the first quarter, more than doubling the $4 million we generated in the fourth quarter, and we've seen an improved environment in Europe with better demand and higher prices. This marks the highest level of Adjusted EBITDA in Europe since the second quarter of 2023.

We have moved our previously named Pulp and Paper segment to Other in the first quarter as the business has become a less significant part of our total operations and will no longer be specifically addressing the results of that segment. Bridging our results from Q4 to Q1, a majority of the improvement came from higher prices in lumber in North American EWP. In addition, higher volumes in U.S. lumber in Europe and a favorable inventory adjustment represented the biggest variances. Costs were flat relative to Q4. Lower SYP costs were offset by repair costs due to the fire at Blue Ridge, and in North American OSB, we saw higher costs from resin and energy-related inputs.

Resin plays a significant role in our panel cost structure, and the recent rise in methanol-based resin pricing is a factor we anticipate will be more visible in our Q2 results. Our U.S. lumber business continues to show improved operating efficiency stemming from the actions we have taken. In the U.S. South, total cost per 1,000 board feet have reduced by approximately 6% in the last two years. During this period, we have closed five lumber mills, completed a full brownfield modernization, and successfully completed a number of smaller but significant capital projects and cost reduction initiatives. This better enables us to react to changes in the external environment and improves our ability to compete more effectively and help provide low-cost supply to our customers. In Q1, our SYP shipments were 4% higher than Q4 on better operating efficiencies.

Excluding the impact of the downtime at Blue Ridge in Q1, our overall shipment volumes remained consistent with expectations. We saw higher shipments in both OSB and in both North American OSB and European OSB. North American volumes increased due to the normal seasonal patterns, and in Europe, we increased shipments to meet higher demand. Cash flow from operations was impacted by the seasonal builds in working capital, resulting in negative $170 million in the first quarter and a net debt position of $457 million. We expect this working capital position to reverse in the second and third quarters. Net debt was influenced by two dividend payments made during the quarter, which occurred as a result of our fiscal quarter ending on April third rather than March 31st.

Our net debt to capital ratio remains in single digits, and our balance sheet is robust. With respect to share repurchases, we did not repurchase shares in the first quarter as we prioritize liquidity through the cycle. Our commitment to returning capital to shareholders through a combination of both dividends and tactical share repurchases has not changed. Regarding our operational outlook for 2026, we have made no changes to our shipment guidance across our main products as well as our capital expenditure range. Transportation and resin costs have been influenced by evolving geopolitical dynamics, and we expect these factors to be more fully reflected in our second quarter results as we manage through the current environment. Due to the fluidity of the situation, it is hard to quantify what that impact may be, but we are actively managing where we can.

With that overview, I'll pass the call back to Sean.

Thank you, Chris. I'll now shift to our general outlook and offer some concluding remarks. Our first quarter results showed a solid improvement relative to the last half of 2025. The $120 million turnaround relative to Q4 shows what the underlying potential of our business is. Our strong balance sheet and a well-invested, diversified portfolio positions us well to adapt to changing market conditions and capitalize on operating leverage while also mitigating downside risk. We manage for the long run by reinvesting in our business and are improving our operating efficiency. In the first quarter, we continued to advance our heat energy and dryer project at Bemidji, a project that, when complete, will improve safety, increase throughput, lower costs, and lower energy usage and emissions.

For our lumber assets in the U.S. South, as Chris discussed, we are seeing the results of the continued portfolio optimization work we are doing by removing costs, increasing margins, and repositioning our production to lower cost and more efficient mills. We continue to ramp up our modernized Henderson Mill, which we believe is positioned to be one of the lowest-cost mills in our fleet once it achieves full operating rates. In Canada, production at Blue Ridge was temporarily paused due to a fire, and the mill has since resumed full operational capacity. We have also seen preliminary duty rates poised to come down later this year by approximately 6% with the release of the proposed AR7 rates. We continue to hold a cost advantage in SPF relative to other Canadian exporters.

In our North American EWP business, the indefinite curtailment of our High Level, Alberta OSB mill is complete. Our wind down of High Level, a less competitive and higher-cost mill representing approximately 860 million sq ft, will allow us to focus our operations on our most efficient production. In Europe, we are encouraged by the progress achieved in Q1 and continue to navigate market dynamics, including managing energy and fiber costs. We are focused on operational improvements and cost reduction and expect our European operations to continue to be competitive through the cycle. Of course, this takes place in a dynamic environment influenced by developments in the Middle East. Against this backdrop, global market conditions remain fluid, and we continue to assess how broader trends may influence end market demand and energy-related cost inputs across our business.

In the near term, we expect costs to be influenced by inputs linked to energy prices, and we are adapting our logistics approach to reflect the current operating environment. We continue to closely monitor these developments and remain focused on managing controllable costs, maintaining operational flexibility, and supporting our customers as conditions evolve. We are realistic about the demand environment. Housing remains challenged in the near term. We believe the longer-term demand drivers remain favorable. Since the start of the conflict, long-term mortgage rates have moved above 6% and gas prices have risen, reflecting current economic conditions that continue to shape consumer sentiment. Despite ongoing macroeconomic and affordability pressures, lumber pricing improved modestly on a sequential basis in Q1. While uncertainties remain, the seasonally better supply-demand balance combined with our cost reduction focus gives us cautious confidence as we navigate near-term uncertainties.

To summarize, first, our Q1 results demonstrate the operating leverage in our business as markets improve. Second, our balance sheet and diversified portfolio are strengths that continue to differentiate us in this environment. Third, we are focused on lowering costs and investing in capital projects that improve the quality of our portfolio. Thank you again for your time and continued interest. We look forward to updating you next quarter. With that, we will turn the call back to the operator for questions.

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press star followed by the one on your telephone keypad. Should you wish to cancel your request, please press star followed by the two. If you're using a speakerphone, please lift the handset before pressing any keys. One moment please for your first question. Thank you. Your first question comes from the line of Sean Steuart from TD Cowen. Please go ahead.

Thanks. Good morning, everyone. A few questions. Sean, hoping we can pull apart the costs inflation piece a little bit. You know, the freight part I think I understand, but I'm hoping you can give a little bit more perspective around the magnitude of resin cost pressure and how that flows through and how higher diesel will feed into delivered wood costs as well.

Okay. Good morning. Good morning, Sean. I'm gonna make a few comments here then ask Chris to add anything more, fill in what I miss. First off, on the magnitude, you know, I would say, you know, a few comments here. First off, I would talk geographically that it's different in Europe than it is in North America. We saw the impact more quickly in Europe, but our team in Europe, you know, quickly began navigating through that. Hard to really have a lot of exact visibility on Q2, other than the pressure continues to build and our team continues to react and kinda navigate through that cost structure.

Our assets in Europe are, all of this affects everybody. Our assets are well-positioned to compete in this environment of higher costs. In North America, I think we're still seeing that evolve. We've got, you know, obviously, large relationships with our suppliers. We're working with them to navigate the impact of that. You know, again, difficult to quantify for Q2. Resin is a significant component of, you know, of OSB costs. To date, we've been able to navigate it effectively and to be determined to see how significant that is in the coming months.

You know, on diesel pricing, again, in Western Canada, our wood supply is delivered, you know, this will be a Q3 issue as we begin to replenish log inventories. We'll see where things are at at that moment. In the South, I think so far, we've been able to navigate that through and have not seen a material change in our cost structure yet, but it's something we're monitoring and watching closely. Chris, anything to add to that?

No, that's a great summary. Thank you.

Okay. Thanks for those details. Second question I have is around chip offtake for your sawmills. We saw a recent announcement of a sawmill closure in the South, and I'm not asking you to speak to that initiative specifically, but Sean, can you give us general comfort with respect to the strength of your wood chip offtake agreements across your sawmill system?

Yeah, you bet, Sean. I know we've maybe spoke about this on prior calls, but, you know, clearly over the last several years, both in the U.S. and in Canada, you know, the restructuring of the pulp industry has implications not only on sawmills, but on landowners, but in any number of areas where they operate and those closures happen. From a West Fraser perspective, I'd maybe leave you with a few comments. One is our diverse portfolio, not only geographically between Western Canada and the U.S. South, but across both of those regions, and particularly in Western Canada as we're integrated in British Columbia with Cariboo Pulp.

You know, we've got lots of optionality depending on where the impacts happen on how we reposition our production or our residuals and react to that. In the South, we have a number of long-term relationships as well as a number of other kind of offtake agreements that we look to, and we've been successfully able to navigate each of these changes. Does it create pressure and pinch points? Absolutely. Our team's doing a terrific job navigating that. Finally, just as a reminder that as pulp mills restructure our OSB business also purchases pulpwood, so we have an offset or a hedge in our system that allows us to press on costs where those opportunities present themselves.

Okay. That's great detail. That's all I have for now. Thanks very much, Sean.

Thank you.

Thank you. Your next question comes from the line of Ketan Mamtora from BMO Capital Markets. Please go ahead.

Good morning, thanks for taking my question. Maybe to start with, not trying to put too fine a point on the resin issue. Sean, to the extent it's possible, can you talk about sort of how you all are navigating this dynamic environment? Is it using different types of resins in manufacturing OSB? If it is possible at all to maybe just give us some rough sensitivity in terms of what it means for, I don't know, like a 10% move in resin cost. Is there a way for us to think about it?

Yeah. Good morning, Ketan. This might again be a little repetitive from the last question. There's a lot of moving parts, as you can imagine within this. You know, resin, I think, is roughly 25% of the cost structure of an OSB mill. Saying that, there are different types of resins, there are different ways for the team to be able to build the board. First and foremost is us working with our resin suppliers to navigate through this period. This is an issue that affects sort of everybody, you know, the same. Like, it's not a unique West Fraser issue. I think it all comes back to how we feel our assets are positioned on the cost curve, and we feel like they're positioned pretty well, and we're gonna be able to navigate this and compete through.

Understood. Okay. Just maybe looking back at Q1, the price differential or not just the price differential, but the change in prices in Southern Yellow Pine versus SPF that we saw in Q1, can you talk about sort of what drove that particularly against the backdrop of what's going on with supply cuts? I'm curious whether you are seeing any signs that Southern Yellow Pine is gaining share in the new residential market.

I'm gonna turn it over to Matt to make a few comments on that, Ketan.

Sure. Good morning. Yeah, we saw Southern Yellow Pine prices rise off a low point from Q4. This has been a, you know, pretty typical, I'd say, seasonal uplift with tree activity picking up in their first quarter. It's something we've seen, I'd say, the last few years, is that rise in first quarter demand. You know, I think that watching it and talking to customers, we don't see a structural shift in demand. I'd say it's just typical seasonal activities in the first quarter around SYP.

Understood. Okay. Then just last question from me. Chris, you talked about on the repurchase side, you know, prioritizing liquidity. How should we think about sort of your approach over the next and the coming quarters, against the backdrop of, you know, kind of weaker than expected housing demand? Should we expect that in the near term this is on pause, or is it sort of something that you are evaluating every quarter?

I think, Ketan, the best guide would be, you know, to look at what we've done historically, right? We take a lot of pride in having a durable capital allocation strategy. You know, throughout this cycle, which, you know, we're three years in lumber now, we've been very disciplined in what we've done, right? With whether that's share repurchases or the level of the dividend or the management of the debt, the debt load and the cash balance. Look, we came through two negative quarters in the back half of last year. First quarters turned positive the way that we look at it, excluding this $114 million on the duties. Clearly there's a lot of uncertainty out there. You know, how we look at the intrinsic value of the company hasn't changed.

You know, we're not a buyer necessarily at all times, but we're a buyer opportunistically when the flexibility is at a level on our balance sheet that we think is right and the shares are priced attractively. I think you can count on us to continue to operate that way, no differently today than over the past two or three years.

Got it. No, that's helpful perspective. I'll turn it over. Good luck.

Thank you, Ketan.

Thank you. Your next question comes from the line of Ben Isaacson from Scotiabank. Please go ahead.

Thank you very much, good morning, everyone. I just wanted to extend Ketan's question. You talked about SYP didn't talk about SPF. Can you talk about whether you were surprised at the relative underperformance of SPF to SYP, or was it kind of consistent with your thinking and why?

Good morning. I would say in the SPF, I mean, we saw steady markets, you know, some slight price improvement over the quarter. I would say seasonally kind of normal tightening of those spreads in the first quarter, like I said, more to do with trader activity. You know, I think we see those dislocations and price changes change, you know, relative to their kind of regional supply or their end user supply demand structure. I would say, you know, not necessarily unexpected to see, you know, a pickup in SYP and SPF just to be continued to be steady.

Thank you for that. My second question is, coming back to this cost pressure. I was just hoping you could frame it, or provide some goalposts. If nothing were to change from today, can you give some magnitude in terms of the goalposts for cost? I mean, should we expect a CAD 30-CAD 50 per MBF change or CAD 0-CAD 10? I mean, how should we be thinking about it?

Yeah, you know, I'll make a few more comments here then Chris, please fill in if we can add more. You know, again. You know, I know the conflicts few months here. You know, we've been able to navigate these pressures so far, you know. The pressure is building, and it's hard to predict, you know, where energy fuel prices might go. I'm very reluctant to kind of, you know, speculate on magnitude because we just don't know, so we won't do that. What I would say is we've been so far able to navigate through the cost pressure. Chris, would you add anything to that?

Yeah, not really. You know, I think as Sean indicated, you know, resin is about 25% of the input cost in OSB manufacturing. I think the other factors that he's raised that, you know, look, this isn't something that uniquely affects West Fraser. It affects the entire industry because everybody uses resin to make OSB. There's not, you know, in our view, a disproportionate impact in any you know, in one aspect, right? Like our fleet of assets and how they exist in different markets and make different products gives us a degree of flexibility that operators with smaller fleets may not have in order for us to mitigate more of this impact, you know, as we navigate this.

I think very difficult to speculate when you see oil price moving around the way that it's moving around on a day-to-day, week-to-week basis. You know, trying to pin a number on this and say, "This is discreetly what it's gonna be in Q2," there's as much likelihood that we're wrong as we're right in trying to give that guidance. I think it goes back to, look, we've throughout this cycle, we've made investments to lower costs consistently, which gives us more headroom to deal with these shocks when they happen. We like how we're positioned to be able to deal with this.

Thank you. My final question, Sean, can you just give a quick outlook for OSB as it relates to North America versus Europe? How are you feeling about kind of each of those regions? Thanks.

Yeah. No, no. Thank you. Thank you, Ben. Yeah, maybe just a few comments. You know, first off, in Europe, as Chris mentioned in his comments, our best quarter since mid 2023. It's been three years. The macro in Europe continues to be difficult like North America. Saying that, you know, our two OSB assets over in Europe are pretty well positioned. We have a terrific management team. We're located in good markets, good raw material areas. You know, so our cost position, we feel quite good about. At the same time, you know, there's cost pressure in other regions, you know, that have resulted, we believe, in better market conditions over in Europe.

The macro continues to be challenging over there, but some good sequential improvement in those markets over the last, you know, 12-18 months. Then in North America, you know, a lot of uncertainty, and I can tell you again from West Fraser's perspective, you know, we are just leaning into the things that we can control. You know, our, you know, our asset ramp up at Allendale, the work we've done at Chambord, the adjustments we made at High Level, all those things make our platform in OSB stronger and continue to push down costs, continue to give us the ability to navigate, you know, like Chris talked about the spike in resins costs or whatever comes our way. Hard to say on the market.

All I would say is, without any change, we're putting ourselves in a better position to compete.

Great. Thank you very much.

Thank you. Once again, should you have a question, please press star followed by one on your telephone keypad. Your next question comes from the line of Nikolai Goroupich from CIBC Capital Markets. Please go ahead.

Hi. Good morning. Given the attractive margin dynamics for lumber in the U.S. South, do you suspect that meaningful production has already come back online across the industry in the region?

Good morning, Nikolai. You know, again, hard for, you know, for us to speculate on what others are doing. I'll only maybe speak to our platform and, you know, and we were navigating to the demands of our customers the last two quarters to the second half of last year. You know, as Matt touched on, things improved seasonally. We were able to respond to that. Saying that, our ability to add other than the ramp-ups we're in, the capital execution we're in, our operating excellence focus, you know, our ability to quickly react, you know, I think you saw that in Q1. You know, if you look compared to Q3 and Q4, you see the difference there.

You know, others may be in a little different spot, hard for me to speculate on that, but, you know, I know from our perspective we're gonna continue to be cautious and we, you know, haven't seen a fundamental change in the underlying fundamentals, so we'll continue to manage our business against that backdrop.

Great. I see. Any more color you could provide what you're hearing from customers regarding the health of our demand?

Might ask Matt to maybe comment on that.

Sure. I'd say, you know, customers, you know, are mixed. You know, I'd say you get some customers, thinking it's gonna be flat, others are more positive. I would say, you know, across the, the customer base, really kind of mixed visibility there. From what we see with our treated customers that we think are a decent lens into that market, you know, it remains subdued.

Okay, I see. Thanks. I'll turn it over.

Thank you.

Thank you. Your next question comes from the line of Matthew McKellar from RBC Capital Markets. Please go ahead.

Good morning. Thanks for taking my questions, and thanks to you for all the details so far, particularly on costs. I'd like to, I guess, follow on that theme just a little bit, but from a slightly different angle, and ask about capital equipment. Can you provide any perspective on if or how capital costs to build, or even maintain lumber and OSB mills in the U.S. specifically, may have evolved over the past few quarters, what with new tariffs and tariffs that have changed in scope and magnitude? Thanks.

Yeah. Good morning, Matthew. Maybe just a few comments on that. You know, first comment I would make is, you know, we've done a lot of work, a lot of capital work the last three, four years, and we're really in the mode of operationalizing that capital and start up getting the benefit from all the money we've spent. Our exposure to some of those costs today are considerably less than they've been the last couple of years. You know, the 1 big project we have underway is Bemidji, and that equipment is largely delivered. You know, we're again, our exposure there is, we've very little exposure left on that project.

Saying that, I don't, I don't think it's fundamentally different today if you were gonna do a major project and then you add on the potential of steel and other tariff issues for equipment that comes from outside of the U.S. Pressure's probably higher, but we're largely into the operational phase of our capital program.

Great. Thanks. Thanks very much. Just one more from me. Appreciate I guess that diesel's pushing transportation costs higher pretty generally and that the impact remains hard to quantify. Are you seeing any actual scarcity of capacity beyond that that would potentially create any bottlenecks for you or your customers? Thanks.

Maybe I'll turn that one over to Matt.

Sure. Good morning. Yeah, I would say, you know, it's been a challenging market in freight market and I think if we look back to the end of last year, you know, there's been, you know, quite a few publications talk about, you know, the uptick in bankruptcies in trucking companies to end 2025. You know, I'd say logistics, you know, will always kind of correct to the size of the demand. You know, we've definitely seen a little bit more tightness and when you layer on top of as well, you know, end of Q1, early Q2 is a seasonally tight period for trucks anyway. You get uptick in produce and other things.

You know, you layer on a spike in fuel, and it's certainly created tightness in the market. You know, we're working with our vendors and our customers to try to continue to provide on-time shipments of our products every day.

Thanks very much for the color. I'll turn it back.

Thank you.

Thank you. 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, Ina. As always, Chris and I are available to respond to further questions, as is Anil Aggarwal, our new Director of Treasury and Investor Relations. Thank you for your participation today. Stay well, and we look forward to reporting on our progress next quarter.

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

Good morning, ladies and gentlemen, and welcome to the West Fraser Q4 2025 Results Conference Call. [Operator Instructions]. This call is being recorded on February 12, 2026. 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 2025 annual MD&A and annual information form as updated in our quarterly MD&A which can be accessed on West Fraser's website or SEDAR+ for Canadian investors and EDGAR for United States investors. I would now like to turn the conference over to Mr. Sean McLaren, President and CEO. Thank you. Please go ahead.

Thank you, Mina. Good morning, everyone, and thank you for joining our fourth 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 CFO, and 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 Q4 and fiscal 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 generated negative $79 million of adjusted EBITDA in the fourth quarter of 2025, an improvement from the negative $144 million reported in the prior quarter, which had included a $67 million out-of-period duty expense relating to the calendar 2023 duty year. Results remained soft across our business in Q4 as broader housing and repair and remodeling markets continued to face affordability pressures. For full year 2025, we generated $56 million of adjusted EBITDA -- down from the $673 million reported in 2024. The lumber segment had a challenging 2025 with the protracted down cycle in lumber among the toughest we've experienced in many years. During the year, we made meaningful progress high-grading our mill portfolio, which included a number of closures or curtailments of higher cost assets, but more importantly, the completion of the ramp-up of our Allendale OSB mill in South Carolina and the completion and commissioning of our new Henderson lumber mill in Texas. In terms of our balance sheet, we had more than $1.2 billion of available liquidity at year-end, which offers us the financial flexibility and strength to support a consistent capital allocation strategy through the cycle. With that high-level 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 $57 million in the fourth quarter compared to negative $123 million in the third quarter. The Q4 result is actually quite comparable with the prior quarter. If one excludes the $67 million export duty expense reported in the third quarter, which had related to the 2023 calendar year. While not included in our adjusted EBITDA, we reported $473 million of noncash restructuring and impairment charges in the lumber segment in the fourth quarter. This was related to a goodwill impairment of our U.S. lumber business as well as the closure of 2 of our sawmills. The North America EWP segment reported negative $24 million of adjusted EBITDA in the fourth quarter compared to negative $15 million in the third quarter. Not included in this EBITDA, you will also have seen that we reported a $239 million noncash restructuring and impairment charge in this segment in the fourth quarter, which was related to the indefinite curtailment of our OSB mill in High Level, Alberta. The Pulp & Paper segment reported negative $1 million of adjusted EBITDA in the fourth quarter compared to negative $6 million in the third quarter. Sequential improvement in this segment was largely owing to the major maintenance shutdown at the mill in the third quarter. In our Europe segment, adjusted EBITDA was $4 million in the fourth quarter versus $1 million in the third quarter as that business experienced a moderately improved business environment. In terms of our overall Q4 results, the sequential EBITDA improvement was supported by reduced SPF log costs, lower Southern Yellow Pine manufacturing costs and lower OSB labor costs as well as the absence of the $67 million out-of-period duty expense that we reported last quarter, partially offset by lower lumber and North American OSB prices. Our lumber business continued to benefit from the portfolio optimization actions we have taken in recent years. In some instances, we have been able to replace output from now closed mills with production from our more modern, larger scale and lower-cost mills, helping to enhance the overall cost structure of the operation. For instance, in the U.S. South, our Q4 2025 Southern Yellow Pine shipments were 6% lower quarter-over-quarter, while SYP unit manufacturing costs were also lower. Cash flow from operations was negative $172 million in the fourth quarter, with net debt at $131 million compared to a net cash position of $212 million reported last quarter. This change in our net debt is attributed to a normal seasonal build in working capital, $139 million of capital expenditures and $32 million of cash deployed towards share buybacks and dividends. With respect to our operational outlook for 2026, we have reiterated previously released guidance for the year, as shown on Slide 8 and as detailed further in our earnings release. Note that if and as the U.S. administration's tariffs and other policies evolve, we will evaluate the impact of the tariffs on our operations and determine revisions to our 2026 forecast as appropriate. With that financial overview, I will pass the call back to Sean.

Thank you, Chris. Before I shift to concluding remarks, I'd like to make a few comments on our liquidity. As you can see on Slide 9, we had a healthy balance sheet and total liquidity exceeding $1.2 billion as we exited 2025. While our liquidity has trended lower over the last few years during this extended down cycle, our financial position remains strong, providing us with sufficient flexibility to navigate further economic challenges should they unfold. I think it's also important to reflect upon the history of attractive returns West Fraser has generated for our shareholders. As you can see in the figure at bottom of Slide 10, our shareholders have been rewarded for their patience as we have continued to execute on our plans to grow the business, optimize our portfolio through dispositions and/or closures of highly variable or uneconomic assets and return surplus capital through dividends and buybacks. With the total annualized return approaching 9% since the beginning of 2006, a which includes share price appreciation and reinvested dividends, we remain proud of what the West Fraser team has been able to accomplish. I'll now shift to our general outlook and add some concluding remarks. There's no avoiding the fact that we face difficult end markets in 2025, but we manage our business for the long run. We have not been resting waiting for a market recovery. We've been actively investing in and improving the business. And because of that, we remain optimistic about West Fraser's future. For our lumber assets in the U.S. South, we continue to refine and optimize our operations by removing costs and looking for additional margin opportunities. We are also ramping up our modernized Henderson mill, which we believe is positioned to be one of the best mills in our fleet once it achieves full operating rates. In Canada, the supply and demand for SPF products continues to show relative advantages compared to SYP as the U.S. South absorbs the new capacity introduced in the region in recent years. We continue to execute on our portfolio optimization strategy, which includes the reduction of higher cost capacity across our lumber platform. Since 2022, we have removed over 1.1 billion board feet of capacity through mill closures and permanent shift reductions, representing a 16% decrease in the company's lumber operating capacity. We've also reduced the number of shifts or hours of operations at various lumber mills across our platform as a means to manage cost. At the same time, we have invested nearly $1 billion of capital into our lumber business over the last 4 years, modernizing assets, adding flexibility to our production platform, removing costs, implementing margin expansion projects and making our mill safer for our employees. Specifically with the startup of Henderson, we are nearing completion of the major U.S. lumber investment we have made over the past number of years with our focus increasingly turned towards operationalizing the capital we have invested in the region. Taking such a proactive approach to portfolio management has further strengthened our cost position and competitiveness. In our North American EWP business, we have largely completed the ramp-up of our Allendale OSB mill, while more recently, we announced the planned indefinite curtailment of our high-level OSB mill this spring, which will remove 860 million square feet of currently uneconomic capacity in an effort to balance our production with customer demand. In conclusion, while we rise to meet the needs of our customers every day, we are also dealing with limited macro visibility. In response, we have been actively managing our portfolio to be low cost and diverse by both geography and product to mitigate uncertainties. We remain optimistic about our longer-term prospects and we'll continue to focus on operational excellence, creating a leading wood building products company that is resilient and sustainable through the cycle. And we will do all this while maintaining the type of financial strength that gives us the flexibility to be able to take advantage of growth opportunities as they arise. Thank you. And with that, we'll turn the call back to the operator for questions.

[Operator Instructions]. And your first question comes from the line of Ben Isaacson from Scotiabank.

Just 2 questions for me. The first question, can you give a little bit of qualitative color as to how balanced or imbalanced margins were between SPF and SYP in Q4? And how does that look right now?

Ben, we don't specifically call out our different segments, saying that as we saw through the quarter, you've seen -- you've watched the spreads start to close between the pricing between the products. So I think that's reflective of things kind of moving as customers adjust their needs and demand patterns depending on the end users of the products. Saying that, I think we're -- as we look to this year on both sides of the border, both products we're actively looking to make cost -- reducing costs, as you saw with both 100 Mile and Augusta in Q4. And we believe both those businesses are positioned to operate through the bottom of the cycle here.

Great. And then I think you mentioned lower log costs for SPF, lower manufacturing for SYP and lower labor for OSB. Among those 3, how much of that is sustainable going forward versus a one-off for Q4?

Ben, I'd say we've been very active in -- across all 3 segments on not only adjusting capacity on uneconomic assets, but modernizing assets through investment as well as reducing costs through flexible operating schedules. And I think the trends you are seeing in our cost structure are really the result of the work we've done over the last several years to lower cost.

And your next question comes from the line of Ketan Mamtora from BMO Capital Markets.

Maybe to start with, Sean, can you talk about sort of the M&A opportunities that you are seeing right now, given how depressed lumber prices have been for the last couple of years? Would that be an area of interest at this point, which certainly looks like bottom of the cycle? And related to that, any interest in growing outside of North America in lumber?

Yes, I'll make a couple of comments here, and Chris, please add anything I miss. And I think we maybe talked about this a few times over the quarters. For us, it's really about how do we make the company stronger at the bottom of the cycle in the current conditions we're in. So asset quality is very important. And over the last number of years, we've actioned a few things, but not very many. And every one of those things has been designed to make us stronger at the bottom. We have a balance sheet to be able to react to anything of quality that presents itself saying that we typically, the stronger assets are going to wait for a better time to be available. So those would be the only comments that I would say on M&A. Chris, anything to add there?

No, that's a great point. Thanks, Sean.

Yes. And then in terms of any outside of North America, of course, even though the macro environment in Europe continues to be slow, we are pleased with our team, pleased with our assets over in Europe, and they're performing well at the bottom of the market. We continue to work with them to look at how we make our European business stronger. And I think I would just leave it there. There would be nothing in front of us today that we would talk about. It would be the same conditions we would look at in North America, makes us stronger at the bottom of the cycle, and it's a good return and our team is ready to take it on. We've got the flexibility to be able to consider it.

Understood. That's helpful. And then just one more from me. How should we think about ramp-up of the Henderson mill in the context of demand environment, which is quite muted?

Yes. And I think -- so it's very early days in Henderson. The mill began commissioning at the end of Q4. So we're in the early stages of startup. And as a reminder, it replaces an existing mill. So that volume had been in the market, and we expect through this year to be ramping up to replace that volume. And I think we will continue to look at our customer needs as we move beyond that. And this just gives us another low-cost asset to be able to adjust our full platform with.

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

A question for Sean or for Matt. We've seen a good lift in North American lumber and OSB prices the past couple of months. Interested in your perspective on how much of that you would attribute to seasonal activity picking up in advance of the spring building season versus maybe the initial stages of the cyclical recovery as supply is rationalized in the market.

Maybe, Matt, I'll hand that one over to you.

Sure. I think what we've seen is just from what we hear from our customers is just a little bit more difficult to get what they're looking for at the time they're looking for it. And so just as I think supply shrinks and demand stays relatively steady over the last couple of quarters, just a little bit harder for our customer to get the product they're looking for when they're looking for it, and it's had an impact on pricing. And as far as spring, I would say, probably a little early to say today. I said, you usually see a bump in buying in the spring. But as you know, spring is usually defined by that warmer weather. And so just coming out of a couple of weeks of freeze in the U.S., I'd say, we're still a little early to see there. And once the weather turns, we'll have a better idea of what spring looks like.

And Matt, any perspective on the relative strength we've seen for U.S. South pricing of late versus Canada?

Like I said, I think from what we hear from our customers, it's a little harder for them to find the product they need when they need it. I think a lot of curtailment that Sean has talked about that we and the industry has taken that make it a little harder to find the product. And so just reflecting in the pricing based on that available supply.

Okay. Chris, I wanted to follow up on the prior question around M&A. And I appreciate you guys aren't -- you don't want to tip your hand too much in terms of thing of what you'd be looking at or specific areas or products. But I know the priority here is sort of sustaining a balance sheet that's flexible. Can you give us any perspective on how thoughts are evolving around minimum liquidity thresholds or maximum leverage targets that the company might be comfortable with as acquisition opportunities are considered in the initial stages of an upturn?

Thanks, Sean. I think there's a lot of latent financial flexibility in the business on the leverage side. I think anything that we would consider on leverage would -- we'd have to see a very clear path to getting leverage metrics and interest burden to a level that's very manageable through the cycle. So I wouldn't say that we would rule out putting leverage on to do something. But there'd have to be a pretty clear path through that to a deleveraging quickly afterwards, through value creation, and that really translates to quality assets, right, is, as Sean said, things that make us better, generate cash flow, there's a synergy opportunity. And if we incur some leverage to do something, a path to quickly pay that down to metrics that are very durable through the cycle for us and maintain that flexibility for us. So it's not off the table, but have to be a very clear path.

Okay. Understood. And then I guess just following on that, when you talk about anticipation of more opportunities on acquisitions coming to the table in the initial stages of an upturn. Is that you need to see that initial upturn to get comfortable that there will be a deleveraging path? Or is it in anticipation of more potential sellers looking to take advantage of a better valuation environment in the initial stages of an upturn. I'm just trying to sort of scale that up and how you think about the timing?

Sean, maybe I'll jump in on that one. Again, you never know what might be available when. I think our comments around quality and every one of our assets gets pressure tested at the bottom of the market. So we have an opportunity to see what the level of quality is of an asset. And it's hard to say when those assets become available, whether it's in the early stages of recovery or whatever is happening. I think that is the criteria for us. So it's not -- I think we have a balance sheet that regardless of timing, we'll be able to consider and look at it. And it's just hard for us to predict when those opportunities may present themselves. I would say, for us, we are focused on operationalizing what we've invested inside West Fraser and ready if something presents itself that makes us stronger.

And your next question comes from the line of Hamir Patel from CIBC Capital Markets.

Sean, there's been a lot of discussion around potential housing measures, the Trump administration may implement to boost affordability. What do you think would be the most meaningful initiatives that they could bring about? And how soon could that translate into real-world incremental lumber demand?

Well, first off, Hamir, we would like all of them. So it's hard to pick and choose which ones would be the best, but we are pleased to see the attention the administration is paying to housing affordability and the different ideas that are being talked about and the different measures that are being taken. Anything that allows homebuyers to be able to get into a single-family or multifamily home and improves demand, and that is good for our industry and obviously good for West Fraser. So hard to predict how quickly what will happen, when it will happen, how long it will take effect. I would say from our perspective, we're just pleased. It's being talked about quite a bit with the administration on both sides of the border, frankly.

Fair enough. And Sean, it sounded like from your outlook, a bit more cautious on the demand outlook for the year ahead for OSB versus lumber. Can you speak to maybe what drives the difference there and maybe what you're hearing from your customers for growth on the R&R side?

Yes. Maybe before I answer that, I might just ask Matt to maybe a few comments on the R&R side.

Sure. I'd say kind of mixed from our customers. I mean, some projecting low growth, others flat. So I'd say we're seeing a mix of sentiment on the year, but I don't know, consensus on a shift from what we've seen recently in the R&R markets.

And in terms of our outlook, Hamir, again, I think we would always take a cautious view because we really don't know, and we are going to manage our business to be competitive at the bottom of the market. And if it lasts, we're going to continue to look to take out -- remove cost and make ourselves more competitive. And I really think that's been our focus the last 3 years and will continue to be our focus.

Fair enough. Thanks a lot.

Thank you. That ends our question-and-answer session. I will now hand the call back to Sean McLaren for any closing remarks.

Thank you, Mina. 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 your participation today. Stay well, and we look forward to reporting on our progress next quarter.

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