Good day, ladies and gentlemen, and welcome to the Fourth Quarter 2017 Louisiana-Pacific Corporation Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I'd now like to turn the conference over to your host for today Mike Kinney, Director of Investor Relations. You may begin.

Thank you for joining our conference call today to discuss LP's financial results for the fourth quarter 2017. I am Mike Kinney, LP's Director of Investor Relations, and with me today are Brad Southern, LP's Chief Executive Officer; as well as Sallie Bailey, our Chief Financial Officer. As we've done in the past, we've opened up this call to the public and are doing a webcast. The webcast can be accessed at www.lpcorp.com. Additionally, to help with the discussion, we've provided a presentation with supplemental information that should be reviewed in conjunction with the earnings release. Sallie will be referencing these slides in her comments this morning. We plan on filing our 10-K later this afternoon and have already filed the 8-K this morning with some supplemental information. I do want to remind everybody all participants on the call about the forward-looking statements comment on Slide 2 of the presentation. Please also be aware of the discussion of our use of non-GAAP financial information included on Slide 3 of the presentation. The appendix attached to the presentation has some of the necessary reconciliations that have been supplemented by the Form 8-K filing we made this morning. Rather than reading these two statements, I incorporate them with this reference. Now let me turn the call over to Brad.

Thanks Mike, and thank you all for joining us this morning. I'll begin today's call with an overview of significant strategic and operational progress we made in 2017, review the current market environment and touch on our outlook for the year including our capital allocation priorities. I'll then hand the call over to Sallie to provide a more in-depth review of our financial results followed by the question-and-answer session. In 2017, was, by all accounts, a year of significant growth and development at LP, highlighted by continued progress on our goal to transform LP into a leading building solutions company. In fact, it was our strongest year since 2005, a meaningful achievement when considering the fact that there were half as many new housing starts in 2017 compared to 2005. Our performance for the year was broad-based and we ended the fourth quarter with increases in revenue, adjusted EBITDA, and EBITDA margins in all four of our segments; OSB, Siding, EWP, and South America. We are also pleased to announce that our board has reinstated a quarterly dividend of $0.13 per share, which I will discuss in more detail when I review our capital allocation strategy. While OSB continues to be the largest revenue contributor on a consolidated basis and we benefited from a positive pricing environment as well as other factors including increasing mix from our value added products in OSB. It is our strategic shift in the specialty products, specifically Siding, the best characterizes the future of LP. Our purpose on growing Siding and specialty products is not new, what is new is the degree to which we are aligning all aspects of our business to achieve this goal from internal target setting to how we measure our performance. As Siding and specialty products continue to increase as…

Thank you, Brad. I will begin the discussion with the review of the financial results for the fourth quarter and full-year 2017. This will be followed by some comments on the performance of the individual segments and selective balance sheet items. We will then take your questions. Moving to Slide 4 of the presentation for discussion of the fourth quarter 2017 consolidated results. We reported net income of $711 million for the fourth quarter of 2017, a 29% increase from net sales of $550 million in the fourth quarter of 2016. Fourth quarter 2017 net income of $131 million or $0.89 per diluted share compared to net income of $42 million or $0.29 per diluted share in the fourth quarter of 2016. Adjusted income from continuing operations for the quarter was $107 million or $0.73 per diluted share based upon a normalized tax rate of 35% as compared to $33 million or $0.23 per diluted share reported in the fourth quarter of 2016. Adjusted EBITDA from continuing operations was $199 million from the quarter compared to $85 million in the fourth quarter of 2016. For the full-year, we reported net sales of $2.7 billion, a 22% increase from net sales of $2.2 billion in 2016. Net income was $390 million or $2.66 per diluted share for the year compared to net income of $150 million or $1.03 per diluted share in 2016. Adjusted income from continuing operations for 2017 was $341 million or $2.33 per diluted share based upon a normalized tax rate of 35% and compared to $130 million or $0.89 per diluted share reported in 2016. Adjusted EBITDA from continuing operations for 2017 was $660 million compared to $346 million in 2016. I would like to give a couple of highlights before I move into the individual segment…

Thank you. [Operator Instructions] Our first question comes from Sean Steuart of TD Securities. Your line is now open.

Thanks. Good morning.

Good morning.

Few questions, let's start within the OSB segment, you touched on the progress you've made around the specialty products transition and couple questions on that front. I'm wondering if you can put some numbers on it in terms of percentage of volume, and then comment on your ability to decouple pricing for that type of product from the Random Lengths print?

Sure. Sean I think the best way to think about the specialty sales, we tend to call it value added, so it's about 37% of sales in the fourth quarter, it was about that same percentage in the third quarter of 2017 and that comes from about 33% in the fourth quarter of 2016.

And I'll speak to the pricing, Sean. So we have two kind of value add products in our portfolio. There are a couple FlameBlock and legacy flooring are the best examples where we have the couple those from Random Lengths and price that those products offer price sheet, but for the rest of our value add mix, they're all priced as a adder to Random Lengths and the adder can be adjusted not weekly sometimes, we'll have contracts, but from the information you'll see through the years. They are still tied someway at a random.

Okay. Thanks for that. Question on South America, the Chilean expansion project, I think previous guidance calls for Q3 2018 start up, can you remind us of the incremental capacity there and the expected ramp up period for that project?

So the capacity is 300 million square feet. You're right, we're looking at a start up in Q3, the middle of Q3. I would expect to be run in kind of by maybe half of that, after six months half of that capacity and then pushing full capacity by the end of 2019.

Okay. Thanks for that. I'll get back in the queue.

Okay. Thank you.

Thank you. Our next question comes from Mark Connelly of Stephens. Your line is now open.

Thank you. You've obviously been bringing a lot more of your Engineered Wood Products revenue to the bottom line. Can you talk a little bit more about the market balances that you have in LSL and the other products, and also how OSB pricing swings are going to flow through for Q1 maybe?

The OSB pricing swings flows through EWP is that your question?

Yes, exactly.

Okay.

How well you'll be - are you going to seeing the prices around on I-Joists?

Okay. So the finished product pricing in our EWP business is off the price sheet and we are pricing that pretty much especially in the short-term independent of swings in OSB pricing or lumber pricing. So there is margin impacts as we see lumber and OSB pricing move for our I-Joists businesses, but beginning last year we have been able to keep pace with those increases through improved pricing for the finished products in our EWP business.

That means that your supply and demand balances across your EWP businesses are a lot better than they were a year ago?

I'm not sure I got that question Mark. Are you trying to figure out why there is such a great improvement in the business and whether it relates to the market?

I mean you are clearly passing things through more consistently, so I'm just trying to understand what - is your supply and demand balance are fixed or are you selling differently and something has changed a lot?

Mark. I understood. Yes. So look definitely the pricing we got last year and we're getting this year as a result of tighter markets for our EWP product line. The increase in lumber pricing last year really helped our ability to recover pricing in LVL and EWP, I'm sorry in I-Joists. So the market dynamics around pricing are favorable and then also we have been increasing shifting in our LVL plants, we have - both LVL plants are now running for shifting and we've been able to increase volume through it, our LSL plant in Houlton, Maine. So the market dynamics of that industry has improved with the recovering - with the increase in lumber prices kind of covering single-family housing starts.

Okay. That's super helpful, especially the higher lumber thing, I hadn't thought about that. I'm done. Thank you.

Thanks Mark.

Thank you. Our next question comes from Chip Dillon of Vertical Research. Your line is now open.

Yes. So thanks so much for the details. I just missed one number, Sallie would you again reiterate what the CapEx for this year is? I know you mentioned maintenance was around $130 million. What was the other growth part?

Well internal, Chip we're looking at $200 million to $250 million and about $115 million is for growth projects, primarily Dawson and the third mill in Chile and most of that actually is Dawson.

Okay. All right. That's helpful. And then you mentioned you sold 40 million board feet of OSB in the Siding segment both - I'm sorry produced that both this fourth quarter and 2016 fourth quarter. Could you tell us what the sales volume, I guess, base wise, I know you said it went up, yes, you gave us a percentage change on that. But I just didn't know if you could give us an idea of where the sales more than 40 million less because I know the volumes were up 12% over the same period.

Yes. Chip, we ran on this a couple quarters ago that the volumes of OSB historically, that's sold in the Siding business have been so small, but the percentage increases look really large. You raised a really good point, going forward we will start being more explicit about the OSB in the segment, particularly because of Dawson Creek, but on quarter-to-quarter basis, it really the sales in the production tend to be pretty similar.

Okay. That's helpful. And then when you do put Dawson in there starting in January. I know Brad was mentioning the ramp face starting I guess in the mid-third quarter. As you ramp it, will that line still make commodity OSB when it's not making SmartSide or is it 100% dedicated, and therefore, we will see some drop off in OSB at some point as a result of the startup.

Chip, just let me kind of go through the timeline and then answer your question directly. So we are planning to run OSB if that plant through Q3 of this year, though it is now in our SmartSide segment for reporting purposes. We will take the plant down in Q4 for two to three months to do all the conversions and bring it up early Q1 on Siding. Our plan is to run it as full as possible on Siding, but we are retaining the capability to make commodity OSB in that plant.

I was getting mixed up with another one, I'm sorry. So there's not a long start up curve is what you're saying. It could be if the market is good enough, you could pretty much run it all the time on Siding which I know that's not realistic day one, but that's physically possible right?

Well, so a great question. So think about it, we're not rebuilding the green end of the plant and doing a whole lot of work on the press. So we're essentially running strand panels like we are today with OSB through it. So most of the engineering and design work goes into the back end of the plant around conversion. So usually what limits us is more of getting the quality parameters right on Siding. Now our plan is to load that plant as much as possible early. We like the fact that it's on the West Coast, so there will be some immediate logistics savings by moving production volume out there. And then our plan would be to move OSB volume back into Hayward, which is in north central region of the country and it's an exciting mill. So we will try to run Dawson as much as possible in Siding throughout 2019 in order to get all the quality parameters lined out in the cruise trained, and we would like to have any incremental OSB that we run due to Dawson move back into the north central region.

Makes total sense. Thanks very much.

Thank you. Our next question comes from George Staphos of Bank of America Merrill Lynch. Your line is now open.

Hey. Good morning. This is actually John Babcock on for George. Just want to start out on the OSB here. I was wondering if you - clearly we've heard a lot about transportation issues on the West Coast, I think you referenced that a little bit earlier. Just want to get a sense whether you're starting to see signs of improvement there or this is something that could persist for some time?

We're seeing signs of improvement there and we don't believe at the end of the day there will be any significant impact on our Q1. We've had to build a little inventory of sold product in our warehouses as we've had issues with rail, but we're beginning to see that clean out over the last week or so.

Okay. And then also as we kind of look ahead to the year and realizing not really provide guidance, but just want to get a sense. If you guys announced any increase in EWP or Siding pricing for the year?

I can speak to that since we are public on that. So we have announced the 6% to 8% price increase in EWP effect of February 1. And then with a 5% price increase announced for strand Siding in March. And then a more robust price increase for our fiber product, which is less volume than we have been strand.

Okay, so how much of the volume - does that increase account for?

So well $200 million feet of fiber product, it was a 9% and then close to 1 billion feet of strand at 5%. We will realize 5% in strand. We negotiate that that can get somewhat negotiate away as it hits the market. So I would think 2% to 3% realization for this year would be what we're really shooting for is brand

Thanks for that. And then last question, I just had was on the dividend and want to get a sense for what factors you're considering in setting the level of the dividend and also how you think about the sustainability, particularly should the markets often?

Let me start there and then Sallie can follow-up. The way I'm thinking about the dividend, obviously we have a very healthy balance sheet right now. But we really - my thinking is, this is based on the strength of our Siding business. We see that stable earnings and stable cash flow generation as it means to reliably fund the dividend in the future. So primarily I would hook it into - I'm thinking about it as evidence of our confidence and ability to sustain and grow our Siding business. But obviously the improvement we've seen in EWP this year and the continued growth we're getting are specially products in OSB gives us even more confidence that the dividend is sustainable and a realistic thing for our investors to expect from us as we transition into more of a building products type company.

And then John, as we reflected on the level of the dividend, we really look to say what the S&P 500 companies were doing and what other building products company deals were and those appeared to be around the 2% yield and so we looked at last year's average share price and copulate when 2% yield would be and came up with the $0.13 a quarter.

Yes. Thank you. That's all I have.

Thank you.

Thank you. Our next question comes from Mark Weintraub of Buckingham Research. Your line is the open.

Thank you. First on the Siding business, you had a very good 16% volume growth in the fourth quarter, nice step up from what we've seen in the second and third quarters and also that was against a very strong 18% prior year comp, maybe provide a little bit more color was there and the additional activity you post the Hurricane and/or I mean it sounds like a March price increase. I'm not quite sure why there would have been pre-buy, but what else might have been going on in that quarter that the volumes for SmartSide had that nice pick up?

So there was no impact on Hurricane that we that - we saw. I do think the confidence in the building sector for home single-family homes was strong in Q4, activity around construction continued into the November, December timeframe, I should mention that we do have some rebates with distributor partners that are annually based with stair steps up as I hit certain sales figures. So there was some last minute ordering and order for some of those higher rebates, it would be effective for some of our distributor partners. So which would have been a little bit a pull forward obviously but we didn't really see a lot of that in perspective to the whole quarter. Sales revenue and we're not seeing kind of any lag lagging of that as we move through Q1.

And hey, Mark, one other thing to add to that about the first quarter, last year we allowed people to buy up to 20% of their prior year's purchases. And this year we've decreased that number to 10%.

Yes, 110%...?

Yes, 110%.

Okay, so previously it was 120% and now this year it's 110%?

And you're right Mark, with the large price increase, we've seen very little of that in December. It's really January and February where that's impactful.

Right. And I think you sort of indicated order of magnitude. There was about 1 billion of strand siding in 2017. And it sounds like Dawson Creek really doesn't kick in mostly until 2019. How much capacity or assuming demand holds nice and strong, how much production potentially could you get out of your strand siding business relative to 2017 and 2018?

Plenty, we have the OSB that we're running at Hayward that could all be converted into Siding. And then our Swan Valley plant that we converted in 2015. It did not run at full capacity in 2017. So there will be no limit on our ability to sell SmartSide this year in 2018 based on capacity.

And so based on the type of housing markets that you described 1.3 million type start, is it viable to anticipate 10% to 15% type volume increases again for 2018?

Well we speak to revenue versus volume and we're sticking with our 12% to 14% revenue growth for 2018.

Okay.

The target.

Great. And I guess just lastly. So on Dawson Creek, if I understood correctly that's pretty much going to be making OSB this year, but it's going to be reported in your Siding business?

That is correct. We moved it over to the segment January 1, and the reason we did that was that there are some operating cost expense that goes early into the project and we wanted to make sure we were capturing that expense in our Siding segment rather than OSB was one of the reasons we did it. And Sallie may have other thing she should mention, but that was the reason for the move over. It will be running all OSB this year while it's running.

Right. And I guess what I certainly appreciate that that is going to be a Siding plant, and so we're sort of maybe get a sense of the type of earnings power can generate in Siding. Will you be providing us with some sense as to the magnitude of contribution from Dawson as a lot of us kind of look at that segments differently and think about multiples for the different businesses, and I guess it gets a little bit confused when we have a facility that's pretty much exclusively going to be making OSB this year in the Siding segment?

Yes. Mark, that's why we added in the presentation, we've added the volume and the price for OSB and we'll also include information in our Q's as we go forward about that for that to facilitate the understanding of the impact of the Dawson on the Siding segments results. And as we did with Swan, we'll talk about the impact of the conversion cost that are expensed on the segments.

Great. Thank you very much.

Thank you. Our next question comes from Gail Glazerman of ROE Equity Research. Your line is now open.

Hi. Good morning.

Good morning.

Just quickly on OSB pricing, it seem that it was a bit stronger then maybe the random print, would have suggested you kind of imply that your mix with value added was pretty flat quarter-on-quarter. So I'm just wondering I assume that was timing and I'm just wondering if you can give some perspective on I guess where current pricing might be verses the 4Q average and if that wasn't timing what else would have explain the performance?

Yes. Gail, as you were coming our conference call last quarter, we spend a lot of time talking about what happened over quarter and then the fact that we price off of random one to two week behind when the random is actually printed and we foreshadowed that that was a negative to the third quarter and are positive to the fourth quarter and that's in fact what happened.

Okay, but would there be an impact in the first quarter from that perspective, I mean based on where we are?

I don't think there was a dramatic change between the fourth quarter to first quarter as there was between the third quarter and fourth quarter.

Okay. And just another kind of quick keeping note, there was a fire at Peace Valley, I think in the fourth quarter, was there any material financial impact and would there be any legacy impact in the first quarter?

No. We lost about 11 days of downtime due to the fire and about 20 million feet. We made up 4 million of that by running over the Christmas break in December, and then we moved some maintenance downtime that we had scheduled in January into that outage. So we'll pick up some volume in Peace Valley in January that we weren't expecting. So across the two quarters, the Q4 and Q1 will be minimal impact to us.

Okay. And Brad can you give us some further perspective as you think about the next Siding conversion project, is that just in terms of timing is that decision you expect to make this year, and does the tax changes impact your thought process and you think about doing something in Quebec or Minnesota?

That's a great question. So let me do timing first. I'd see us being able to talk more about where and when next year as we get the Dawson conversion behind us and get another look at our growth rates in 2018 as well as, as I mentioned before the mix differences because that is very important to the decision where to put the next mill. So from an operating standpoint, I mentioned this before, but if we see growth that is more lap and trim related, that will bias us to a Val-d'Or start up earlier because that mill has a 16-foot press. If we see the growth in more panel like products that would go against the Val-d'Or decision, that kind of pushes into Cook. Secondly, Cook will most certainly be a larger plant as far as capacity goes then Val-d'Or and require a longer engineering and construction phase. So we would want to get started on that a little bit earlier and it would be more costly to do it there. As far as the tax change, we do look at these investments on an after tax basis, so by definition the lower tax rate in the U.S. have made investment options in the U.S. more competitive than they were in the past. So that will play into the decision as far as calculating the financial - the differences in financial return between those two options.

Okay. And if could just squeeze in one last one. Just as I look at housing, it's a bit more aggressive than I think you've seen in the past. I am just wondering how confident you are in that and how worried you are about labor constraints and the potential impact of rising interest rates?

Gail, it's another good question. And I don't think we have successfully predicted housing starts in our budget cycle for the last three or four years. We've consistently overshot it and so I would say the current consensus is probably a little bit below what establishes our budget number back in October. So I would say there is a little downside to that. I don't think it will materially impact our expectations around Siding and OSB, and because I think the weakness will be bias to multi-family if we don't hit the 1.3 million, and obviously we are much more dependent on a single-family across all our different product segments. I do agree with you that the primary constraint right now is what I hear when talking to builders as labor. I have begun to hear some success stories in addressing that, but I don't think it will be in anyway resolved in 2018. And so I think as an industry, we don't hit 1.3 million starts, it won't be a demand issue for housing, but it could just be the ability of the homebuilders to actually build that many homes given the labor constraints they're facing.

Okay. Thank you.

Thanks Gail.

Thank you. Our next question comes from Steve Chercover of D.A. Davidson. Your line is now open.

Thanks. Good morning, everyone.

Good morning, Steve.

So I want to talk a little bit about input costs, manufacturing costs in OSB, and I think you alluded to it by discussing the number of down days in Q4 because it was a great year, but absent price, it looks like EBITDA would have actually been down, so was it maintenance or downtime that caused it or are there other inflationary pressures we should be aware off?

Steve, we did have some pretty significant cost increases in 2017. We pretty much gave up everything we got back in 2016, so somewhere around $30 million. Most of that showed up in MDI, resin and waxes. So you're right, we did have some significant headwind.

And do you expect that to persist this year?

Yes, we do. We do expect - in general that we'll see a raw material cost increases that are pretty similar to the same level maybe a little maybe around $20 million, $25 million. We do see that in MDI being the biggest piece of that, but also PF solids and lacks.

So that's over and above 2017 levels?

That is correct.

And how about wood?

Well, interestingly wood actually was a net positive in 2017, most of that in the OSB business. But in 2018 we think OSB will be similar to where we were in 2017 maybe a little bit better. But we do expect to see some increased cost in our Siding business and also in our EWP business.

Okay and it's late in the session, so this is kind of big picture. But in your effort to be “ a building solutions company”. Are there any products that are currently in your portfolio that you'd like to enter into or maybe grow?

Yes, so the key focus for us right now is smooth Siding for our Siding products, for strand Siding portfolio that would be a major opportunity for us to put incremental volume into that business. We are in the testing phase of the product now. And so with that we have all hands on deck on developing that products like that in both OSB and in Siding.

Great. Okay, thank you.

Thank you, Steve.

You're welcome.

Thank you. Our next question comes from Paul Quinn of Louisiana-Pacific Corporation. Your line is now open.

Actually I've got a new job.

Welcome aboard Paul.

Yes, exactly.

Yes, send the checks up to Canada here. I got a couple questions I want to add. Just investors seem to be very sensitive to any kind of OSB capacity additions or withdraws, maybe if I try to figure out the downtime associated with the conversion to Dawson Creek, if I take that mills capacity at 380 and assume it's 70% operating rate and take it for three months, I get about 65 million square feet is that about close to what you think you'll lose?

Yes. I would do the math to two out of the 12 - it will be down two out of the 12 months.

Okay, so maybe a little bit less. And then just on the addition side, if you could give us some color on what you're hearing, we've obviously got the Norbord mill in Alabama and the Tolko mill up in Alberta. What are you hearing on Martco in Texas and Forex in Quebec?

We are obviously not saying either one of those mills producing any product into the market that we're aware of, and so there is some type of delay against expectations for both of those mills. But I don't really have much more information probably all the new deal on what's happening there.

Okay, and then just turning you to, I guess OSB - you made OSB in Q4, just a contribution on EBITDA basis in the quarter?

Why Paul? I don't have that I would say that a lot of the contribution probably came from the overall capacity utilization within the mill rather than something maybe played to that to the bottom line. I mean really what caused the improvement in EWP and the quarter was impact of the price increases, okay.

So OSB contribution is not going to be on par with what we're seeing from Hayward on the Siding side, right?

No, that's correct.

Okay, and then last question I just run South America and I like the split between OSB and Siding but if you could give us some kind of metric to follow on the size of those two respective businesses. I suspect OSB towards Siding?

I don't know that off the top of my head. I would have guess that it is primarily OSB, because all of Brazil is OSB.

Okay. That's all I have. Best of luck. Thanks.

Great. Thank you.

Thank you. Our next question comes from Ketan Mamtora of BMO Capital Markets. Your line is now open.

Hi, thank you. Congrats on a very strong year Brad and Sallie.

Thank you.

Thank you.

First question, I want to come back to this - the next project on Siding, whatever that maybe either Cook or Val-d'Or, can you just remind us if you were to let's say the - just hypothetically that at the start of next year you start working on it. So if it were to be Cook, can you just help us understand when that might start producing and then the same for Val-d'Or?

Yes. So Cook, if we get bored approval next year, if we were to and I would say Cook would be a 20 - early 2021 start up and Val-d'Or would be early 2020 start up to be about years difference plus or minus a quarter.

Got it. And then - so when the mills come up is it fair to say that they will produce OSB for a period of time and can you remind us because Cook would be almost like a new mill. How much time you will have to produce OSB initially?

Yes. That's great question, Ketan. So we would want to run OSB initially at either mill on a start up to get our quality systems all lined out and get the manufacturing systems lined out. And I would like to run OSB as long as possible once we start up, because I think that would take some time from a quality perspective. So playing into our decision on starting those plants up will be what we believe will be sufficient time to run OSB. I would say we would want a minimum of six months, we would not need a year, so somewhere between two to four quarters of running OSB would be ideal.

Got it. And then is it fair to say that the incremental supply from Dawson Creek, you will be able to - you would basically be maxed out by the end of 2020 or mid-2021, is that the right way to think about it?

Well, when I say that if we go to Cook, we'll need the plant operating confidently in 2022 and that's where we would look at without a mill expansion our current system being at full capacity. I mean obviously Ketan that depends on the growth rate and the product mix, but with the Dawson conversion in 2019 we feel like we'll have sufficient capacity to get us to 2021 or 2022.

Got it. And then just one other clarification, on the 300 million organic growth number that you always talked about, so is that Dawson Creek CapEx included in that or is it separate from that?

We think about the CapEx that we need for Dawson for the Chilean mill that we're building now as well as possible Cook or Val-d'Or restart being part of that 300 million. We try to separate that from the maintenance capital guidance that Sallie has given in the past.

So Dawson Creek CapEx was also in that number?

Correct.

Got it. And then just one last question. When I think about sort of M&A from your standpoint, can you just talk just in general terms what is more interesting to you, you talked about from an existing part of the smooth Siding, but kind of OSB mills in the Aspen Wood Basket or something, which will give you more of a presence in, in kind of multi-family construction or something like cross laminated timber. Just give us some sense of what is most interesting to you?

Okay. So two things, you're right about one. We would be interested in OSB mills and Aspen Wood basis that we believe we could in the future convert or deciding that would be a key priority for us. And I was using the example Ketan of the barrier acquisition, which with small compared to our balance sheet, but was a really key investment to secure our leadership in the play resistant OSB category. So acquisitions that would complement businesses that we know and customers that we know and markets that we understand in either structural panels Siding or Engineered Wood would be something that we're interested in pursuing.

Got it. That's helpful. And just last question and I'll turn it over. One of your competitors in Siding is adding quite a bit of supply, are you seeing any impact of it at all in the market place at the moment?

No impact yet.

Okay. Very helpful. Sorry go ahead Sallie.

I think most of those factories are not intended to start up until 2019.

Gotcha. Okay. That's very helpful. I'll turn it over. Good luck in 2018.

Thank you.

Thank you.

Thank you. [Operator Instructions] Our next question comes from Mark Weintraub of Buckingham Research.

Thank you. I wanted to just quickly revisit the math on the capital allocation. And in particular I think you mentioned $300 million for return of capital of which the dividend now would presumably at least in one-year represent about $75 million, and so then that would seem to suggest you've got well over $200 million, which would that primarily should we think about as the share repurchase bucket, because I know you mentioned and I wasn't quite sure if you had $100 million or $150 million on the share repurchase program?

So our current authorization is $100 million and then I would think - so that's $175 million that we've discussed today and then for the remaining $125 million, we would say that's for future dividends because we plan to pay dividends forever now and then if we want to execute the share repurchase if we do then we would go back to our Board if we thought that was a wise thing to do to get further authorization.

And presumably you will be generating free cash particularly in the types of markets that we're seeing right now, which would lead to even meeting the various capital goals or capital investments you have. How might we think about? Where is that free cash, which buckets they're most likely to be directed to? That's a fair question.

Well, free cash above the $600 million of the liquidity capital and growth capital, would be - we would think of that as cash that should be returned to our shareholders in some form. Now in M&A can change that, but more opportunities for us, but as we continue to grow Siding and make the investments in the mills and we would look at M&A opportunities, it's a big dynamic situation that we'll talk about every quarter as we go through this. But we do are stating today that above the $600 million we are looking at returning that that capital back to shareholders in an effective way.

Okay, thank you.

Thank you. And we do have a follow-up question from Chip Dillon of Vertical Research. Your line is now open.

Yes and thanks for your patience. This is the along cause. I just had one more clarification Brad you mentioned Dawson Creek would probably bridge you to if I heard you right to a Cook. If the market grows as you expect of course to where you would need to capacity of Cook. But I thought Val-d'Or was tucked in there in between. Did I misunderstand that and I know they more might make different types of product, but could you explain that 20/20 project?

Yes. So what I was attempting to explain there was just sort of thinking on when we need capacity in any form next and so given our current growth, given the conversion at Dawson we would look - would be running that new system essentially for around 2021. Okay, so now I'm not making a statement on the sequence of Val-d'Or versus Cook, because that's back to I want to take a look at mix as we get through this year before we start by saying or thinking to one mill or the other. Maybe the point that was confusing was, in Cook that's essentially a Brownfield start up. So that the construction time for that facility would be about a year longer than, always thought of Val-d'Or, so if we did into next year and we decide Cook is the best option. We're going to have to get working on it earlier then we would have to with Val-d'Or.

Makes perfect sense and the way to really think about it is, is that you would pick one of those two and then as the market grows maybe mid-decade, next decade then the other or some other option might make sense, but that's left for a day long away?

Correct, Chip, exactly…

Okay. Sorry about the confusion. Thank you.

My apologies if I caused it.

Okay. Sonia, I think that's all the time we have for questions. So if you could please provide the replay number like to thank everybody for participating in our call. We are always here with any follow-up questions you may have. Thank you and I hope you have a good day.

Ladies and gentlemen, thank you for participating in today's conference. This conclude today's program. You may all disconnect. Everyone have a great day.