West Fraser Timber Co. Ltd.

Good morning, ladies and gentlemen, and welcome to West Fraser's Q1 2022 results conference call. Please note that all lines have been placed on mute to prevent any background noise. 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 contain forward-looking information or forward-looking statements within the meaning of Canadian and United States securities law. 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 2021 Annual MD&A and Annual Information Form, which can be accessed on Wes Fraser's website or through CDAR for Canadian investors and EDGAR for United States investors. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by one on your touchtone phone. And if you would like to withdraw yourself from the question queue, please press star followed by two. Thank you. Mr. Farris, you may begin your conference.

Well, thank you, Sylvie. Good morning, and thank you, everyone, for joining our first quarter 2022 earnings call. My name is Ray Farris, West Fraser's President and CEO, and I'm joined today by Chris Verostik, our Chief Financial Officer, Chris McKeever, Senior VP of Marketing, Corporate Development, and a number of other members of our executive team. Before we get into the results today, I'd like to mention a couple of housekeeping items. Then after, I'll pass the call to Chris, who will provide an update to our Q1 results before wrapping up and moving to Q&A. Today, we'll limit the scope of our comments to those already provided in our Q1 disclosures. and we will refrain from addressing any questions related to our company or market outlook beyond what has been provided in those disclosures. Further, after this morning's call, and in the absence of any material developments that would require a news release, we do not intend to make any additional comments to investors or analysts until after our substantial issuer bid expires, which is currently expected to be June 2, 2022. With that, I am pleased to report that the first quarter 2022 is another strong quarter for West Fraser. And with that, I'm going to pass the call to Chris to take us through our results.

Thanks, Ray. Good morning, everyone. In the first quarter, West Fraser achieved strong financial results in the face of ongoing transportation and logistics constraints in Western Canada. As you may recall, these challenges were an impediment to our Q4 2021 shipments of SPF lumber, and pulp. However, the typical weather issues that challenge our Canadian shipments each winter, these constraints lasted longer than we originally expected, carrying well through the first quarter. While our ability to supply markets was constrained, demand for our wood-based building products remained robust in the first quarter, and as such, we generated US $1.59 billion of adjusted EBITDA, representing a margin of 51% of sales. The benefits of our product and geographic diversity of production were evident once again this quarter, and we saw robust sequential gains across three of our segments, with our lumber segment EBITDA up more than threefold from the prior quarter to $796 million, and our North American EWP EBITDA more than doubling to $730 million. In Europe, adjusted EBITDA was $78 million, the second best result ever for that business. Price was the single largest driver for the gains in North America, while in Europe the gains were supported by improving seasonal volume trends and recapture of lost downtime for a large capital project that impacted the fourth quarter. Cash flow from operations in the first quarter was $563 million, and cash, net of debt, increased quarter over quarter to nearly $1.3 billion. In the first quarter, we repurchased another $233 million of West Fraser shares and declared a $0.25 per share dividend up from $0.20 per share in the prior quarter. You also will have seen that we announced a substantial issuer bid subsequent to quarter end. Under the SIB, we have offered to purchase up to $1.25 billion of our common stock. by way of a modified Dutch auction with a tender price range of 80 to 95 US per share and that is set to expire on June 2nd. We look forward to sharing with you results of the SIB tender process when those results become available. In terms of our 2022 operational outlook, we are trimming the range of expected SPF shipments to 2.8 to 3.0 billion board feet from our original range of 3.0 to 3.2 billion board feet, as the transportation constraints in Western Canada have been more acute and of longer duration than originally anticipated. We are reiterating the outlook for our Southern Yellow Pine, North American OSB, and European OSB shipments, as well as planned capital expenditures for 2022. As we identified in our earnings release, we continue to see logistics and transportation constraints affecting our business early in the second quarter, particularly in Western Canada. Currently, it's not possible to estimate when full transportation services will be available or when the backlogs will be cleared, and so further reductions of operating schedules across our production platform may be required to manage inventory levels, raw material supplies, and our integrated fiber supply chain. Rest assured, we continue to actively seek out and utilize all alternative transportation routes and methods to the extent they are available to continue to service our customers and to operate our facilities. With that overview, I'll return the call to Ray.