Financial Data and Key Metrics Changes - West Fraser reported an adjusted EBITDA of -$79 million in Q4 2025, an improvement from -$144 million in the previous quarter, which included a $67 million out-of-period duty expense [4] - For the full year 2025, adjusted EBITDA was $56 million, down from $673 million in 2024 [4] - Cash flow from operations was negative $172 million in Q4, with net debt at $131 million, compared to a net cash position of $212 million reported last quarter [10] Business Line Data and Key Metrics Changes - The lumber segment posted an adjusted EBITDA of -$57 million in Q4, compared to -$123 million in Q3, excluding the $67 million export duty expense [7] - The North America EWP segment reported -$24 million of adjusted EBITDA in Q4, compared to -$15 million in Q3, with a $239 million non-cash restructuring charge related to the curtailment of the OSB mill in High Level, Alberta [8] - The pulp and paper segment reported -$1 million of adjusted EBITDA in Q4, an improvement from -$6 million in Q3 [8] - The Europe segment's adjusted EBITDA was $4 million in Q4, up from $1 million in Q3, indicating a moderately improved business environment [8] Market Data and Key Metrics Changes - The overall Q4 results showed sequential EBITDA improvement supported by reduced log costs and lower manufacturing costs, although offset by lower lumber and OSB prices [9] - Southern yellow pine shipments were 6% lower quarter-over-quarter, while unit manufacturing costs were also lower [10] Company Strategy and Development Direction - The company has focused on high-grading its mill portfolio, including closures of higher-cost assets and ramping up the Allendale OSB mill in South Carolina and the new Henderson lumber mill in Texas [5][15] - West Fraser has removed over 1.1 billion board feet of capacity since 2022, representing a 16% decrease in lumber operating capacity [15] - The company has invested nearly $1 billion in capital over the last four years to modernize assets and improve operational flexibility [16] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the difficult end markets in 2025 but emphasized a long-term focus on operational excellence and cost management [14][15] - The company remains optimistic about its future, particularly with the ramp-up of the Henderson Mill and ongoing portfolio optimization [15][17] - Management is cautious about the demand outlook for OSB compared to lumber, reflecting mixed sentiment from customers regarding growth in the repair and remodeling markets [51][53] Other Important Information - The company had over $1.2 billion of available liquidity at year-end, providing financial flexibility to navigate economic challenges [5][13] - Management is actively managing the portfolio to be low-cost and diverse to mitigate uncertainties in the market [17] Q&A Session Summary Question: Can you provide insights on margins between SPF and SYP in Q4? - Management noted that the spread between pricing for SPF and SYP has started to close as customer demand patterns adjust [20][21] Question: How sustainable are the lower costs observed in Q4? - Management indicated that the trends in cost structure are a result of efforts made over the last several years to lower costs [23] Question: What are the M&A opportunities given the current lumber market? - Management emphasized the importance of asset quality and the ability to react to quality opportunities that may arise [26][27] Question: How should we view the ramp-up of the Henderson Mill in a muted demand environment? - Management stated that the Henderson Mill is in early stages of startup and is expected to replace existing volume in the market [30] Question: What is the outlook for housing measures from the administration? - Management expressed optimism about discussions on housing affordability and its potential positive impact on lumber demand [49][50] Question: What drives the difference in demand outlook for OSB versus lumber? - Management noted mixed customer sentiment regarding growth in the R&R side, maintaining a cautious view on demand [51][53]

Financial Data and Key Metrics Changes - For the full year 2025, the company reported GAAP earnings of $324 million, or $0.45 per diluted share, on net sales of $6.9 billion. Excluding special items, earnings totaled $143 million, or $0.20 per diluted share, with adjusted EBITDA of $1 billion [3] - In the fourth quarter, GAAP earnings were $74 million, or $0.10 per diluted share, on net sales of $1.5 billion. Excluding special items, the company reported a loss of $67 million, or $0.09 per diluted share, with adjusted EBITDA of $140 million [3][4] Business Line Data and Key Metrics Changes - Timberlands contributed $50 million to fourth quarter earnings, with adjusted EBITDA of $114 million, a $34 million decrease compared to the third quarter, primarily due to lower sales volumes and realizations in the West [7] - Adjusted EBITDA for Southern Timberlands was $69 million, a $5 million decrease compared to the third quarter, with stable fiber markets but muted sawlog markets [10] - Real Estate and ENR contributed $84 million to earnings in the fourth quarter, with adjusted EBITDA of $95 million, driven by high-value transactions and a record average price for real estate sales at over $8,200 per acre [11][12] Market Data and Key Metrics Changes - In the Western domestic market, log demand and pricing softened in the fourth quarter due to ample supply and elevated log inventories, leading to a moderate decrease in average domestic sales realizations [7][8] - In Japan, demand for logs softened in the fourth quarter due to elevated finished goods inventories, although average sales realizations for export logs were moderately higher [8][9] - The company expects stable domestic log pricing in the first quarter, with potential upside if lumber prices improve [8] Company Strategy and Development Direction - The company launched an ambitious growth strategy through 2030, focusing on optimizing its Timberlands portfolio and expanding Climate Solutions offerings [4][6] - A new target was set to grow the Climate Solutions business to $250 million of annual EBITDA by 2030, with significant progress made in 2025 [12][13] - The company is committed to returning cash to shareholders, having returned $766 million in 2025, including a 5% increase in the base dividend and $160 million in share repurchases [4][19] Management's Comments on Operating Environment and Future Outlook - Management remains constructive on long-term fundamentals supporting the business, despite challenging market conditions in 2025 [6] - The housing market is expected to improve in 2026, driven by federal policies and potential decreases in mortgage rates, although near-term uncertainty remains [34][35] - The company anticipates a slight increase in housing starts in 2026, with a favorable long-term outlook supported by demographic trends [35][36] Other Important Information - The company completed two divestiture transactions covering non-core Timberlands for total proceeds of $406 million and expects to close another transaction for approximately 108,000 acres in Virginia for $193 million [6] - The company has reduced its pension obligations significantly since 2018, with gross pension plan obligations decreasing from approximately $5 billion to $1.9 billion by year-end 2025 [21][22] Q&A Session Summary Question: Pricing improvement for lumber and OSB - Management indicated that the pricing improvement is primarily driven by curtailment activity rather than underlying demand, although some demand pickup is expected as the spring building season approaches [42] Question: Constraints on production response in Southern markets - Management acknowledged that while Southern lumber prices have increased, the industry has been restrained in production, but there is potential for increased production as demand picks up [43][44] Question: Inventory levels for lumber and OSB - Management stated that inventory levels across the channel are reasonable for this time of year, with expectations for inventory building as the spring building season approaches [50][51] Question: Timberland acquisition and divestiture decisions - Management noted a solid market for timberland transactions and expects continued activity in 2026, capitalizing on high-value acreage opportunities [52][54] Question: Operating rates in lumber and OSB - Management reported mid-70% operating rates for lumber and mid-90% for OSB in Q4, with expectations for improved profitability as market conditions stabilize [62][63]

Financial Performance - Q2 2025 vs Q2 2024 - Net sales decreased by 7% from $814 million to $755 million[14, 34] - Adjusted EBITDA decreased by $(87) million from $229 million to $142 million[14, 35] - Adjusted EPS decreased by $(1.10) from $2.09 to $0.99[14, 36] Segment Performance - Siding - Siding Solutions sales increased by 11%[14] - Siding net sales increased from $415 million to $460 million[22, 37] - Siding adjusted EBITDA increased from $105 million to $125 million[21, 37] Segment Performance - OSB - OSB price impact decreased by $(102) million[14] - OSB net sales decreased from $351 million to $250 million, a (30)% decrease[25, 37] - OSB adjusted EBITDA decreased from $125 million to $19 million[25, 37] Cash Flow - Operating cash flow decreased from $212 million to $162 million[14, 27] - Capital expenditures increased from $36 million to $68 million[14, 27] - The company returned $19 million to shareholders[14] 2025 Guidance - Siding revenue is expected to be approximately $430 million in Q3 2025, representing approximately 3% growth[28] - Full year siding revenue is projected to be approximately $1.7 billion, representing approximately 9% growth[28] - Full year total LP adjusted EBITDA is expected to be approximately $405 million[28]

Financial Data and Key Metrics Changes - West Fraser generated $84 million of adjusted EBITDA in Q2 2025, representing an approximate 6% margin, continuing to operate within a cyclical downturn [4] - The company exited Q2 with nearly $1.7 billion of available liquidity and a strong cash position net of debts [5][6] - Cash flow from operations was $85 million in Q2, with a net cash balance of $310 million, up from $156 million in the prior quarter [9] Business Line Data and Key Metrics Changes - The lumber segment posted adjusted EBITDA of $15 million in Q2, down from $66 million in Q1, primarily due to lower pricing and higher fiber costs [8] - The North America EWP segment generated $68 million of adjusted EBITDA in Q2, down from $125 million in Q1, driven by lower OSB pricing [8] - The Pulp and Paper segment generated negative $1 million of adjusted EBITDA in Q2, compared to $7 million in Q1, largely due to an inventory write-down [8] - The European business posted $2 million of adjusted EBITDA in Q2, improving from negative $2 million in Q1, linked to higher OSB pricing and shipments [8] Market Data and Key Metrics Changes - U.S. housing starts averaged 1,320,000 units on a seasonally adjusted basis in Q2, reflecting a decline in new home construction due to elevated mortgage and interest rates [4] - Repair and remodeling demand remained subdued, impacted by broader macro factors [5] Company Strategy and Development Direction - The company aims to maintain a strong balance sheet and liquidity profile, allowing for counter-cyclical investments and growth opportunities [6] - West Fraser is focused on controlling costs and optimizing its mill portfolio to create a more resilient company [13] - The company is prepared to support discussions regarding softwood lumber tariffs and is actively scenario planning for various trade-related outcomes [15][16] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing challenges with housing affordability and repair and remodeling markets, leading to modified shipment guidance for 2025 [10] - The company remains optimistic about the longer-term prospects for the industry despite a cloudy near-term outlook due to global trade complexities [17] Other Important Information - The U.S. Department of Commerce released preliminary combined rates for softwood lumber duties at 26.05%, which could result in an expense of $65 million if confirmed [12] - The company successfully amended and extended its $1 billion credit facility and increased its $300 million term loan [9] Q&A Session Summary Question: What have you learned about the substitutability between SPF and SYP? - Management noted that price spreads between products tend to close during high demand and separate during low demand, driven by supply and demand dynamics [20][21] Question: What are your views on a possible lumber export quota? - Management indicated that all options are on the table for discussions regarding lumber and that they are prepared to support the government in these discussions [24][25] Question: Are you cash flow positive in the North American lumber and OSB business? - Management refrained from discussing specific segment cash flow but emphasized the strength of their diversified product portfolio and counter-cyclical investments [27][29] Question: What do you need to do to improve the European business? - Management expressed confidence in their European assets and team, noting that they are well-positioned for recovery as demand improves [47][49] Question: What is the M&A opportunity set looking like? - Management stated they are ready to acquire quality assets if they become available, emphasizing a focus on quality and synergies rather than opportunistic purchases [68][70]

Financial Performance Overview - Net sales remained flat year-over-year at $724 million[11] - Adjusted EBITDA decreased to $162 million compared to $182 million in Q1 2024[11, 37] - Adjusted EPS decreased to $1.27 from $1.53 in Q1 2024[11, 38] Siding Solutions - Siding Solutions net sales increased by $41 million to $402 million, compared to $361 million in Q1 2024[22, 39] - Siding Solutions sales volume increased by 9%[12] - Siding Solutions adjusted EBITDA increased to $106 million, up from $90 million in Q1 2024[22, 39] - Siding Solutions EBITDA margin was 26%[12] OSB (Oriented Strand Board) - OSB net sales decreased to $267 million, compared to $313 million in Q1 2024[26, 39] - OSB adjusted EBITDA decreased to $54 million, down from $90 million in Q1 2024[26, 39] - Overall OSB volume decreased by 10%[26] Capital Allocation and Liquidity - Capital expenditures totaled $64 million[11] - The company returned $81 million to shareholders, including $20 million in dividends and $61 million in share repurchases[11, 12] - The company has $1 billion in total liquidity[12]