Good morning, ladies and gentlemen. Welcome to the West Fraser Timber Co. Ltd. Fourth Quarter 2011 Results Conference Call. During this conference call, West Fraser's representatives will be making certain statements about potential future developments. These forward-looking statements are intended to provide reasonable guidance to investors, but the accuracy of these statements depends on a number of assumptions and is subject to various risks and uncertainties. Actual outcomes will depend on a number of factors that could affect the ability of the company to execute its business plans, including those matters described under Risks and Uncertainties in the company's annual MD&A, which can be accessed on West Fraser's website or through SEDAR and as is supplemented by the company's quarterly MD&As. Accordingly, listeners should exercise caution in relying upon forward-looking statements. I would now like to turn the meeting over to Mr. Hank Ketcham, Chairman, President and Chief Executive Officer. Please go ahead, Mr. Ketcham.

Thank you, operator. Good morning, and welcome to West Fraser's fourth quarter conference call. Joining me this morning is Larry Hughes, our CFO; and some of our other senior management team. West Fraser earned $6.1 million or $0.14 a share in the quarter. This includes a gain recorded on the sale of certain assets related to our Eurocan operation. We recorded a loss from continuing operations of $11 million. EBITDA in the quarter was $18 million or 2.8% of sales. The primary reasons for our substantially lower earnings in the fourth quarter versus the previous quarter were as follows. First, the benchmark 2x4 SPF lumber price in U.S. dollars was 3% lower versus the third quarter. However, our mill nets were even lower than that due to a 32% drop in the value of lower-grade lumber in the fourth quarter. This had a particularly significant effect at our mills that are processing high volumes of Mountain Pine Beetle timber. In addition, while the benchmark Southern Yellow Pine 2x4 price was up 8% in the quarter, our overall mill nets in the U.S. were actually slightly lower than the third quarter due to the substantial discount of wide-width lumber teneros [ph]. The very low price we're achieving for wide-width lumber in the South has also had the effect of eliminating the traditional premium that Southern Yellow Pine price have enjoyed over SPF prices. We expect that the Southern Yellow Pine premium will return as lumber markets begin to improve. Second, the Northern Bleached Softwood Kraft list price dropped 7% in the fourth quarter. This was partially offset by a 4% decline in the value of the Canadian dollar. Third, lumber production was down 5% in the fourth quarter due primarily to capital projects being carried out at several of our Alberta…

Thank you, Hank, and thanks to everyone joining us today. Please refer to our advisory contained in our annual MD&A concerning our use of terms such as EBITDA, adjusted earnings or loss and adjusted basic earnings per share. As Hank has noted, for the fourth quarter, we reported a loss from continuing operations of $11 million resulting in a basic loss per share of $0.25. There are tables found on Pages 3 and 12 of our annual MD&A, which describe and quantify several nonoperational items which affected our results. For the fourth quarter, which is the table on Page 12, if we adjust the $11 million loss from continuing operations, which doesn't include the Eurocan industrial site sale, to add back the charge on equity-based compensation and then reverse the $9 million gain related to the translation of the U.S. dollar-denominated debt, the result, on an after-tax basis, is an adjusted loss from continuing operations of $15 million or an adjusted loss on a per-share basis of $0.35 for the quarter. For the full year, as shown on the table on Page 3 of our annual MD&A, adjusted earnings from continuing operations were $23 million or $0.54 per share. We have used the basic rather than the diluted weighted average number of shares in this calculation. Other nonoperational items include interest, which was essentially unchanged compared to the third quarter, reflecting ongoing low borrowings; a loss on the translation of current U.S. dollar-denominated monetary items of $4 million compared to a gain of $12 million in the third quarter, reflecting a weakening of the U.S. dollar against the Canadian dollar; and a $6 million recovery for income taxes compared to a recovery of $4 million in the previous quarter. Year end inventories were adjusted to the lower cost and net…

Okay. Thanks, Larry. And we'll now open the -- open it up for questions.

[Operator Instructions] The first question is from Paul Quinn from RBC Capital Markets.

Just in the release, you described Q4 as a difficult quarter. Has anything changed in Q1? And what's your assessment for the balance of 2012?

Well, Paul, Q1, I think we're seeing an increase in the price of low-grade lumber. So that's going to be a positive, particularly for us. Well, that's going to be a positive for us, particularly because we do have -- in our beetle -- in our Mountain Pine Beetle operations, we're getting a significant amount of low grades. So that had a real negative effect that dropped in Q4, and we're seeing that come back in Q1. I think prices have firmed a little bit in Q1 versus Q4 for lumber. We don't expect to see much more of a drop in pulp prices. And so -- and fundamentally, we expect to benefit from the CapEx that we've spent in 2011, and we're going to be spending more in 2012. So we don't really -- can anticipate the housing market, but I think there is a little bit of an improvement in Q1.

Okay. And just on the CapEx, it looks like you spent about $90 million in CapEx in 2011. What part of that was maintenance? What was under your capital program? What's left to spend under your capital program? And if you could give us some specifics on some of these projects that you've been encouraged by the results from, that would be great.

Well -- so CapEx was around $213 million, and that was primarily in -- part of it was GTP funding for our pulp mills, and those were energy-related projects. And a significant project at our Hinton pulp mill, which reduced cost, expanded out our pulp production. We had a difficult time starting that plant up, but it seems to be going pretty well now. So that was a major project in our -- on our pulp side. But on the lumber side, which is where we've concentrated, we've expanded production in 3 of our mills in Alberta. Some of those projects are still underway. And we have done some significant CapEx in 4 fiber mills down in the U.S., and we expect that to result in improved -- primarily in improved lumber values and also in improved -- our production efficiencies.

Okay. And just last question. You've got a chart in your MD&A showing North American lumber production that -- which looks like it'll shake out somewhere around 50 million board feet in 2011. Just wondering what your assessment of the average operating rate is. And where do you think that operating rate has to be to get some significant pricing traction?

We've been into this for 6 years now, so it's hard to know. I can't give you a good answer, Paul, but we're operating at about 75% of capacity in the U.S. I would suspect that that's roughly what the U.S. is operating at, maybe 70% to 75%. In Canada, there's a -- there is -- the operatings are significantly reduced from where they were. But we have cut the reductions coming in the British Columbian interior, and certainly, there's been a reduction in available timber in the East. So I don't really know what it's going to come back to, Paul. But fundamentally, with lumber -- with housing starts of 600,000, 650,000 units, I think, really, what we have to look at is when is that new home construction going to start to come back. When it does, pricing will probably be somewhat restrained by more capacity coming on, but I don't know how much there is to come on.

[Operator Instructions] The next question is from Sean Steuart from TD Securities.

A couple of questions. The Q4 pulp and paper, I guess, overall, average mill nets, they were down, but they actually held up better than we would have guessed. And I'm wondering if you can speak, I guess, to not just NBSK price trends that you saw, that you touched on, but what you're seeing in the mechanical pulp market right now.

So I'm going to let Ted Seraphim answer that question, Sean.

Just in terms of our different businesses, everybody knows what's happening with the NBSK pricing. But BCTMP pricing actually fell much earlier in the cycle, really towards the end of 2010 and to the first half of '11. So second half of the year, BCTMP pricing, on average, was pretty darn flat. And going forward, we've seen the -- we believe we've seen the bottom of the market there, and we start to see some small price improvements. So I think when you compare Q3 to Q4, the reason the drop isn't as much as you may have anticipated is because of our BCTMP pricing.

Right. Larry, I'm wondering if you can give us any guidance on pension contributions in 2012 given different discount rate assumptions, those sorts of things.

Yes. I -- Sean, I think that we're looking at something that's similar to what we saw in 2011. We made a prepayment in 2011. And I think our expectations is that there'll be another payment over in the second half of 2012 in that same order of magnitude. We're not expecting any significant changes in discount rates. We're at a very low rate right now. So it's -- we shouldn't see any increase in contribution requirements upcoming.

Okay. And then the last question. The 2 biomass projects, and you addressed it in the MD&A. And I think it was the last quarterly call, you weren't quite ready to put any parameters around construction cost and I guess expected EBITDA benefit. Are you any closer to giving detail on that front?

Yes. I think those 2 plants are going to end up between $80 million and $100 million, probably something like that.

Okay. I know you've got the ETAs in place, and there's some general figures around, I guess, what we can expect in terms of pricing. But can you disclose that yet?

No, I don't think we can, Sean. I'm sorry.

The next question is from Mark Kennedy from CIBC World Markets.

First of all, just a couple of questions, again, just on guidance issued for this year. So what would your total capital guidance be for 2012 between both maintenance and discretionary capital?

I think we're going to be roughly the same as where we were in 2011, Mark. $180 million to $200 million, something like that.

Okay. And then you've had a lot of fluctuation, obviously, in that corporate and other category. But as a baseline, looking forward, what sort of the baseline we should use in that category?

Corporate and other? I wouldn't think it would be much different than last year.

Hank, maybe I can answer this. In corporate and other, Mark, for the most, we allocate our corporate cost out to our segments. It's only unusual items that end up in there, for example, our equity-based compensation, which depends on our share price, primarily. So we can't really predict that. So essentially, with allocating everything out, we should be flat, barring unusual items.

Okay. Okay. And then just a question on the -- just a couple of questions, I guess, on the Southern Yellow Pine front. Firstly, if you're seeing wider discounts on the wider-dimension lumber, are there solutions to that just in terms of cutting it up into more stead-like products? And then secondly, in terms of these design changes, do you have additional capital to do MER -- or MSR lumber there? Or is that already sort of in your budget?

So Mark, on the first question, we would look -- we continually look at our cutting patterns to extract the most value. So if -- we do that all the time. It's not just on our wide-width 2x10, but it's on all the products we make. So if we feel that the value would be enhanced, our margins would be enhanced by doing that, we will do it. So we're looking at that all the time. And with respect to the strength values, we do have MSR and -- available at some of our mills, and we've just got to see this thing play out. And we will -- if we need to spend capital to -- at certain mills, we will, but we're capable at some of our mills right now in MSR.

The next question is from Daryl Swetlishoff from Raymond James.

I just had one question with respect to logging conditions in the B.C. Interior and U.S. South, and just maybe give us an idea of where you are on your winter logging program.

It's -- in the U.S. South, we -- it's quite geographic in the U.S. South specific. In some areas, it's been quite wet. And in some areas, we are under pressure, because pulp mills are bringing in inventory, because some of them are low on inventories. That's creating, in certain specific areas, a tightness in supply. But I think we're going to be okay, and we have taken a little bit of downtime in certain U.S. South mills due to a lack of logs but nothing really different than last year. In the B.C. Interior, I think our primary concern is the availability of contractors, both logging contractors and truckers and just because of the very, very tight labor market in the interiors. So that -- that's making things tight in some of our operations, but we expect that we will bring in our required log inventory.

Are those -- is that tightness leading to any sort of cost pressures?

Yes, it is. Yes. No. We're under cost pressure on the logging side, yes.

Any you would do -- could you hazard a -- even a percentage change year-over-year, what we might expect for modeling purposes there?

I could hazard it, but I don't think I should at this point in time. But I think there's going to be -- there will be some cost pressure there.

[Operator Instructions] There are no further questions at this time. I would like to turn the meeting back over to Mr. Ketcham.

Okay. Well, again, thank you very much for joining us, and we'll talk to you in 3 months. Thanks. Bye.