The number of Common shares and Class B Common shares outstanding at April 22, 2024 was 81,530,998.

For the three months ended March 29, 2024 and March 31, 2023

1.Nature of operations

West Fraser Timber Co. Ltd. ("West Fraser", the “Company”, "we", "us" or "our") is a diversified wood products company with more than 60 facilities in Canada, the United States (“U.S.”), the United Kingdom (“U.K.”), and Europe. From responsibly sourced and sustainably managed forest resources, we produce lumber, engineered wood products (OSB, LVL, MDF, plywood, and particleboard), pulp, newsprint, wood chips, other residuals and renewable energy. Our products are used in home construction, repair and remodelling, industrial applications, papers, tissue, and box materials. Our executive office is located at 885 West Georgia Street, Suite 1500, Vancouver, British Columbia. West Fraser was formed by articles of amalgamation under the Business Corporations Act (British Columbia) and is registered in British Columbia, Canada. Our Common shares are listed for trading on the Toronto Stock Exchange (“TSX”) and on the New York Stock Exchange (“NYSE”) under the symbol WFG.

2.Basis of presentation

These condensed consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS Accounting Standards”) applicable to the preparation of interim financial statements, under International Accounting Standard (“IAS”) 34, Interim Financial Reporting. These condensed consolidated financial statements use the same accounting policies as the most recent audited annual consolidated financial statements.

These condensed consolidated interim financial statements were authorized for issue by the Audit Committee of the Company’s Board of Directors on April 23, 2024. These condensed consolidated interim financial statements should be read in conjunction with our audited annual consolidated financial statements for the year ended December 31, 2023.

Figures have been rounded to millions of dollars to reflect the accuracy of the underlying balances and as a result certain tables may not add due to rounding impacts.

Assets and liabilities transferred or subject to transfer as a result of the sales of the Hinton pulp mill, Quesnel River Pulp mill, and Slave Lake Pulp mill have been presented as part of assets held for sale and liabilities held for sale respectively (see note 6) and are not included in the other balance sheet amounts presented as at March 29, 2024 and December 31, 2023.

In January 2020, the IASB issued Classification of Liabilities as Current or Non-current (Amendments to IAS 1). The amendments clarify that the classification of liabilities as current or non-current should be based on rights that exist at the end of the reporting period. The amendments also clarify the definition of a settlement and provide situations that would be considered as a settlement of a liability. In October 2022, the IASB issued Non-current Liabilities with Covenants (Amendments to IAS 1). These further amendments clarify how to address the effects on classification and disclosure of covenants that an entity is required to comply with on or before the reporting date and covenants that an entity must comply with only after the reporting date. We have adopted these amendments effective January 1, 2024. These amendments did not have a material impact on our consolidated financial statements.

In April 2024, the IASB issued IFRS 18, Presentation and Disclosure in Financial Statements ("IFRS 18"), which replaces IAS 1, Presentation of Financial Statements. IFRS 18 introduces new requirements to improve comparability in the reporting of financial performance to give investors a better basis for analyzing and comparing entities.

The standard impacts the presentation of the financial statements and notes, in particular the income statement where entities will be required to present separate categories of income and expense for operating, investing, and financing activities with prescribed subtotals for each new category. IFRS 18 will also require management-defined performance measures to be explained and included in a separate note within the financial statements. IFRS 18 is effective for reporting periods beginning on or after January 1, 2027. We are currently assessing the impact of this amendment on our consolidated financial statements.

3.Business combinations

CPP produces northern bleached softwood kraft (“NBSK”) pulp, related by-products, and energy. Prior to the CPP agreement, we accounted for the CPP JV under IFRS Accounting Standards by recognizing our share of the assets, liabilities, revenues, and expenses related to this joint operation.

Prior to the CPP agreement, the CPP JV was a joint operation under IFRS Accounting Standards that met the definition of a business. Accordingly, we applied the requirements for a business combination achieved in stages in accordance with IFRS 3, Business Combinations.

This required us to first remeasure the carrying value of our 50% interest in the CPP JV to fair value and then recognize an additional 50% interest in CPP at fair value in accordance with the requirements of IFRS 3.

The determination of the fair value of identifiable assets and liabilities required management to use estimates that contain uncertainty and critical judgments. We applied the income approach in determining the fair value of property, plant, and equipment. Cash flow forecasts were based on internal estimates for 2024 through 2027 and estimated mid-cycle earnings for subsequent years. Assumptions included production volume, product pricing, raw material input cost, production cost, terminal multiple, and discount rate. Key assumptions were determined using external sources and historical data from internal sources.

We recognized a net gain on the business combination as the estimated fair value of 100% of CPP’s identifiable assets and liabilities exceeded the carrying value of our 50% interest in the CPP JV prior to the CPP agreement.

The net gain resulting from the CPP agreement is recognized as other income. Our valuation of property, plant and equipment remains preliminary as at March 29, 2024.

On November 17, 2023, we acquired 100 percent of the shares in Spray Lake Sawmills (1980) Ltd., which operates a lumber mill located in Cochrane, Alberta, and the associated timber licenses (“Spray Lake Acquisition”) for preliminary cash consideration of $102 million (CAD$140 million). This acquisition has been accounted for as an acquisition of a business in accordance with IFRS 3 Business Combinations. We have allocated the purchase price based on our preliminary estimated fair value of the assets acquired and the liabilities assumed as follows:

Purchase consideration is preliminary as at March 29, 2024 and is subject to finalization of certain post-close working capital adjustments. Our valuation of property, plant and equipment and intangible assets remains preliminary as at March 29, 2024.

4.Seasonality of operations

Our operating results are subject to seasonal fluctuations that may impact quarter-to-quarter comparisons. Consequently, interim operating results may not proportionately reflect operating results for a full year.

Market demand varies seasonally, as home building activity and repair-and-remodelling work are generally stronger in the spring and summer months. Extreme weather conditions, including wildfires in Western Canada and hurricanes in the U.S. South, may periodically affect operations, including logging, manufacturing and transportation. Log inventory is typically built up in the northern regions of North America and Europe during the winter to sustain our lumber and EWP production during the second quarter when logging is curtailed due to wet and inaccessible land conditions. This inventory is generally consumed in the spring and summer months.

5.Inventories

Inventories at March 29, 2024 were subject to a valuation reserve of $24 million (December 31, 2023 - $31 million) to reflect net realizable value being lower than cost.

6.Disposal groups held for sale    

Under the terms of the agreement, Mondi purchased specified assets, including property, plant and equipment and working capital, and assumed certain liabilities related to the Hinton pulp mill in exchange for a base purchase price of $5 million prior to working capital and other adjustments specified in the asset purchase agreement. Pursuant to the transaction, we will continue to supply fibre to the Hinton pulp mill under long-term contract, via residuals from our Alberta lumber mills.

An impairment reversal of $1 million in relation to the sale of the Hinton pulp mill has been included in Restructuring and impairment charges in the three months ended March 29, 2024 (see note 11). The impairment reversal relates to the remeasurement of working capital adjustments specified in the asset purchase agreement.

On September 22, 2023, we announced an agreement to sell our two bleached chemithermomechanical pulp (“BCTMP”) mills, Quesnel River Pulp mill in Quesnel, B.C. and Slave Lake Pulp mill in Slave Lake, Alberta to an affiliate of a fund managed by Atlas Holdings (“Atlas”). The transaction closed on April 20, 2024 following the completion of regulatory reviews and satisfaction of customary closing conditions (see note 19). The facilities are presented as a disposal group held for sale at March 29, 2024.

Under the terms of the agreement, Atlas purchased specified assets, including property, plant and equipment, working capital, and certain timber licenses in Alberta, and assumed certain liabilities related to the mills and timber licenses in exchange for a base purchase price of $120 million prior to working capital adjustments specified in the asset purchase agreement. Pursuant to the transaction, we will continue to supply fibre to the Quesnel River Pulp mill under long-term contract.

An impairment reversal of $1 million in relation to the sale of the Quesnel River Pulp mill and Slave Lake Pulp mill has been included in Restructuring and impairment charges in the three months ended March 29, 2024 (see note 11). The impairment reversal relates to the remeasurement of estimated working capital adjustments specified in the asset purchase agreement.

As at March 29, 2024, the carrying value of the disposal group, which comprised only of assets and liabilities subject to transfer as a result of the sale of Quesnel River Pulp mill and Slave Lake Pulp mill, comprised the following assets and liabilities:

7.Operating loans and long-term debt

As at March 29, 2024, our revolving credit facilities were undrawn (December 31, 2023 - undrawn) and the associated deferred financing costs of $2 million (December 31, 2023 - $2 million) were recorded in other assets. Interest on the facilities is payable at floating rates based on Prime Rate Advances, Base Rate Advances, Bankers’ Acceptances, or Secured Overnight Financing Rate (“SOFR”) Advances at our option.

The fair value of the long-term debt at March 29, 2024 was $496 million (December 31, 2023 - $494 million) based on rates available to us at the balance sheet date for long-term debt with similar terms and remaining maturities.

We have interest rate swap contracts that have the effect of fixing the interest rate on the $200 million term loan disclosed in the long-term debt table above. In January 2024, these interest rate swaps were amended to extend their maturity from August 2024 to July 2025. Following this amendment, the weighted average fixed interest rate payable under the contract was 2.61% (previously 0.91%).

The interest rate swap contracts are accounted for as a derivative, with the related changes in the fair value included in other income or expense in our consolidated statements of earnings. For the three months ended March 29, 2024, a nominal gain (three months ended March 31, 2023 - a loss of $2 million) was recognized in relation to the interest rate swap contracts. The fair value of the interest rate swap contracts at March 29, 2024 was an asset of $6 million (December 31, 2023 - asset of $6 million).

8.Other liabilities

9.Retirement benefits

We maintain defined benefit and defined contribution pension plans covering most of our employees. The defined benefit plans generally do not require employee contributions and provide a guaranteed level of pension payable for life based either on length of service or on earnings and length of service, and in most cases do not increase after commencement of retirement. We also provide group life insurance, medical and extended health benefits to certain employee groups.

The table below summarizes the status of the defined benefit pension plans and other retirement benefit plans in aggregate.

The significant actuarial assumptions used to determine our balance sheet date retirement assets and liabilities are as follows:

The actuarial gain on retirement benefits, included in other comprehensive earnings, is as follows:

10.Share capital

400,000,000 Common shares, without par value

20,000,000 Class B Common shares, without par value

10,000,000 Preferred shares, issuable in series, without par value

For the three months ended March 29, 2024, we issued 7,000 Common shares under our share option plans (three months ended March 31, 2023 - 383 Common shares) and no Common shares under our employee share purchase plan (three months ended March 31, 2023 - no Common shares).

On February 27, 2024, we renewed our normal course issuer bid (“2024 NCIB”) allowing us to acquire up to 3,971,380 Common shares for cancellation from March 1, 2024 until the expiry of the bid on February 28, 2025.

For the three months ended March 29, 2024, we repurchased for cancellation 105,666 Common shares (2023 - no Common shares) at an average price of $79.37 per share under our 2023 NCIB and 2024 NCIB program.

11.Restructuring and impairment charges

In the three months ended March 29, 2024, we recorded restructuring and impairment charges of $10 million.

We recorded an impairment reversal of $1 million in relation to the sale of the Hinton pulp mill (see note 6). In addition, we recorded an impairment reversal of $1 million in relation to the sale of the Quesnel River Pulp mill and Slave Lake Pulp mill (see note 6).

We recorded restructuring and impairment charges of $12 million associated with the announcement of the permanent closure of our Fraser Lake lumber mill and the permanent closure of our lumber mill in Maxville, Florida and the indefinite curtailment of operations at our lumber mill in Huttig, Arkansas.

Restructuring charges of $3 million were recorded in the three months ended March 31, 2023 relating to the closure of a regional corporate office in our lumber segment and the closure of a distribution centre in our pulp & paper segment.

12.Finance income, net

13.Other income (expense)

14.Tax recovery (provision)

The tax recovery (provision) differs from the amount that would have resulted from applying the B.C. statutory income tax rate to earnings (loss) before tax as follows:

15.Earnings (loss) per share

Basic earnings (loss) per share is calculated based on earnings (loss) available to Common shareholders, as set out below, using the weighted average number of Common shares and Class B Common shares outstanding.

Certain of our equity-based compensation plans may be settled in cash or Common shares at the holder’s option and for the purposes of calculating diluted earnings (loss) per share, the more dilutive of the cash-settled and equity-settled method is used, regardless of how the plan is accounted for. Plans that are accounted for using the cash-settled method will require adjustments to the numerator and denominator if the equity-settled method is determined to have a dilutive effect as compared to the cash-settled method.

The numerator under the equity-settled method is calculated based on earnings (loss) available to Common shareholders adjusted to remove the cash-settled equity-based compensation expense or recovery that has been charged or credited to earnings (loss) and deducting a notional charge using the equity‑settled method, as set out below. Adjustments to earnings (loss) are tax-effected as applicable. The denominator under the equity-settled method is calculated using the treasury stock method. Share options under the equity-settled method are considered dilutive when the average market price of our Common shares for the period exceeds the exercise price of the share option.

The cash-settled method was more dilutive for the three months ended March 29, 2024 and therefore no adjustment was required for the numerator and denominator. The equity-settled method was more dilutive for the three months ended March 31, 2023 and an adjustment was required for both the numerator and denominator.

A reconciliation of the numerator and denominator used for the purposes of calculating diluted earnings per share is as follows:

16.Segment and geographical information

The geographic distribution of external sales based on the location of product delivery is as follows:

17.Countervailing (“CVD”) and antidumping (“ADD”) duty dispute

Additional details, including our accounting policy, can be found in note 26 - Countervailing (“CVD”) and antidumping (“ADD”) duty dispute of our audited annual consolidated financial statements for the year ended December 31, 2023.

We began paying CVD and ADD duties in 2017 based on the determination of duties payable by the USDOC. The CVD and ADD cash deposit rates are updated upon the finalization of the USDOC’s Administrative Review (“AR”) process for each Period of Inquiry (“POI”), as summarized in the tables below. On March 5, 2024, the USDOC initiated AR6 POI covering the 2023 calendar year. West Fraser was selected as a mandatory respondent, which will result in West Fraser continuing to be subject to a company-specific rate.

On February 1, 2024, the USDOC released the preliminary results from AR5 POI covering the 2022 calendar year, which indicated a rate of 6.74% for CVD and 5.33% for ADD for West Fraser. The duty rates are subject to an appeal process, and we will record an adjustment once the rates are finalized. If the AR5 rates were to be confirmed, it would result in an expense of $35 million before the impact of interest for the POI covered by AR5. This adjustment would reduce the export duties receivable recorded on our balance sheet. If these rates were finalized, our combined cash deposit rate would be 12.07%.

The Cash Deposit Rates and the West Fraser Estimated ADD Rate for the periods presented are as follows:

1.The CVD rate for the AR6 POI will be adjusted when AR6 is complete and the USDOC finalizes the rate, which is not expected until 2025.

2.The CVD rate for the AR7 POI will be adjusted when AR7 is complete and the USDOC finalizes the rate, which is not expected until 2026.

1.The ADD rate for the AR6 POI will be adjusted when AR6 is complete and the USDOC finalizes the rate, which is not expected until 2025.

2.The ADD rate for the AR7 POI will be adjusted when AR7 is complete and the USDOC finalizes the rate, which is not expected until 2026.

The following table reconciles our cash deposits paid during the period to export duties, net:

1.Represents combined CVD and ADD cash deposit rate of 9.25% for Q1-24 and 8.25% for Q1-23

2.No adjustments were required as the West Fraser Estimated ADD rate of 7.06% for Q1-24 and 4.63% for Q1-23 equalled the cash deposit rate.

As of March 29, 2024, our export duties paid and payable on deposit with the USDOC were $850 million.

Each POI is subject to independent administrative review by the USDOC, and the results of each POI may not be offset but the results within a POI in respect of ADD and CVD may be offset.

Export duty deposits receivable is represented by:

Export duties payable is represented by:

Notwithstanding the deposit rates assigned under the investigations, our final liability for CVD and ADD will not be determined until each annual administration review process is complete and the related appeal processes are concluded.

18.Contingencies

We are subject to various investigations, claims and legal, regulatory and tax proceedings covering matters that arise in the ordinary course of business activities, including civil claims and lawsuits, regulatory examinations, investigations, audits and requests for information by governmental regulatory agencies and law enforcement authorities in various jurisdictions. Each of these matters is subject to uncertainties and it is possible that some of these matters may be resolved unfavourably. Certain conditions may exist as of the date the financial statements are issued, which may result in an additional loss. In the opinion of management none of these matters are expected to have a material effect on our results of operations or financial condition.

19.Subsequent events

On April 20, 2024, the sale of our two BCTMP mills, Quesnel River Pulp mill in Quesnel, B.C. and Slave Lake Pulp mill in Slave Lake, Alberta, to Atlas closed following the successful completion of regulatory reviews and satisfaction of customary closing conditions.

This discussion and analysis by management (“MD&A”) of West Fraser Timber Co. Ltd.’s (“West Fraser”, the “Company”, “we”, “us”, or “our”) financial performance for the three months ended March 29, 2024 should be read in conjunction with: (i) our unaudited condensed consolidated interim financial statements and accompanying notes for the three months ended March 29, 2024 (“Interim Financial Statements”); (ii) our audited annual consolidated financial statements and accompanying notes for the year ended December 31, 2023 (“Annual Financial Statements”), which have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board ("IFRS Accounting Standards"); and (iii) our related 2023 annual MD&A (“Annual MD&A”).

Unless otherwise indicated, the financial information contained in this MD&A is derived from our Interim Financial Statements, which have been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting as issued by the International Accounting Standards Board. This MD&A uses various Non-GAAP and other specified financial measures, including “Adjusted EBITDA”, “Adjusted EBITDA by segment”, “available liquidity”, “total debt to capital ratio”, “net debt to capital ratio”, and “expected capital expenditures”. An explanation with respect to the use of these Non-GAAP and other specified financial measures is set out in the section titled “Non-GAAP and Other Specified Financial Measures”.

This MD&A includes statements and information that constitute “forward-looking information” within the meaning of Canadian securities laws and “forward-looking statements” within the meaning of United States securities laws (collectively, “forward-looking statements”). Please refer to the cautionary note titled “Forward-Looking Statements” for a discussion of these forward-looking statements and the risks that impact these forward-looking statements.

This MD&A uses capitalized terms, abbreviations and acronyms that are defined under “Glossary of Key Terms”. Dollar amounts are expressed in the United States (“U.S.”) currency unless otherwise indicated. Figures have been rounded to millions of dollars to reflect the accuracy of the underlying balances and as a result certain tables may not add due to rounding impacts. The information in this MD&A is as at April 23, 2024 unless otherwise indicated.

West Fraser is a diversified wood products company with facilities in Canada, the U.S., the U.K. and Europe, manufacturing, selling, marketing and distributing lumber, engineered wood products (OSB, LVL, MDF, plywood, particleboard), pulp, newsprint, wood chips and other residuals and renewable energy. As at March 29, 2024, our business is comprised of 33 lumber mills, 15 OSB facilities, 5 renewable energy facilities, 3 plywood facilities, 3 MDF facilities, 2 treated wood facilities, 1 particleboard facility, 1 LVL facility, 1 veneer facility, and 4 pulp and paper mills (as at March 29, 2024, two of our pulp mills are held for sale, both of which were sold on April 20, 2024).

Our goal at West Fraser is to generate strong financial results through the business cycle, supported by robust product and geographic diversity, and relying on our committed workforce, the quality of our assets and our well-established people and culture. This culture emphasizes cost control in all aspects of the business and operating in a responsible, sustainable, financially conservative and prudent manner.

The North American wood products industry is cyclical and periodically faces difficult market conditions. Our earnings are sensitive to changes in world economic conditions, primarily those in North America, Asia and Europe and particularly to the U.S. housing market for new construction and repair and renovation spending. Most of our revenues are from sales of commodity products for which prices are sensitive to variations in supply and demand. As many of our costs are denominated in Canadian dollars, British pounds sterling and Euros, exchange rate fluctuations of the Canadian dollar, British pound sterling and Euro against the United States dollar can and are anticipated to be a significant source of earnings volatility for us.

West Fraser strives to make sustainability a central principle upon which we and our people operate, and we believe our renewable building materials that sequester carbon are a truly natural solution in the fight against climate change. There are numerous government initiatives and proposals globally to address climate-related issues. Within the jurisdictions of our operations, some of these initiatives would regulate, and do regulate and/or tax the production of carbon dioxide and other greenhouse gases to facilitate the reduction of carbon emissions, providing incentives to produce and use cleaner energy. In April 2023, the Science Based Targets Initiative (“SBTi”) completed its validation of the science-based targets we set in the first quarter of 2022. This validation further supports West Fraser’s plan to achieve near-term greenhouse gas (“GHG”) reductions across all our operations located in the United States, Canada, U.K. and Europe.

We believe that maintaining a strong balance sheet and liquidity profile, along with our investment-grade debt rating, enables us to execute a balanced capital allocation strategy. Our goal is to reinvest in our operations across all market cycles to strategically enhance productivity, product mix, and capacity and to maintain a leading cost position. We believe that a strong balance sheet also provides the financial flexibility to capitalize on growth opportunities, including the pursuit of opportunistic acquisitions and larger-scale strategic growth initiatives, and is a key tool in managing our business over the long term including returning capital to shareholders.

In North America, changes in new home construction activity in the U.S. are a significant driver of lumber and OSB demand. According to the U.S. Census Bureau, the seasonally adjusted annualized rate of U.S. housing starts averaged 1.32 million units in March 2024, with permits issued averaging 1.46 million units. U.S. housing starts were 1.41 million units for full year 2023 and 1.55 million units in 2022. Levels of new housing construction have been relatively robust in recent months, continuing to track above pre-pandemic levels with strength carrying into early 2024 on market expectations that interest rates and inflation will moderate through the remainder of the year. Low supply of existing homes for sale and a large cohort of the population entering the typical home buying age demographic are expected to support longer-term core demand for home construction activity. Notwithstanding these factors, should the economy and employment slow more broadly, interest rates stay meaningfully higher for longer or housing prices not adjust sufficiently lower to offset a potential rise in mortgage rates, housing affordability may be adversely impacted, which could reduce near-term demand for new home construction and thus near-term demand for our wood-based building products.

In the first quarter, demand for our products used in repair and remodelling applications was moderately weaker than the prior quarter. This is in contrast to relative strength from new home construction, which has supported robust demand for OSB. Softer demand from repair and remodelling also appears to be contributing to a weaker pricing environment for SYP lumber than for SPF products. There is a risk that historically low rates of existing home sales and a slowing economy will put further downward pressure on short-term repair and remodelling demand, consistent with near-term industry forecasts for repair and remodelling spending. However, over the medium and longer term, an aging housing stock and stabilization of inflation and interest rates are expected to stimulate renovation and repair spending that supports growth in lumber, plywood and OSB demand.

Regarding lumber supply fundamentals, several new capacity announcements in the U.S. South have not translated into a meaningful increase in overall North American supply in recent years. Capacity contraction within other key lumber producing regions of North America has contributed to this trend, as have meaningful reductions in production from less competitive mills in the U.S. South, a region that is generally lower cost but is also heterogeneous in terms of mill costs associated with fibre supply, modernization levels and labour reliability. It’s also noteworthy that due to lengthy lumber supply chains, particularly for SPF products being railed from Western Canada, the impact of facility closures can take several weeks or months before the supply effects are realized by the market. Lower demand from offshore markets for North American lumber is also a continuing factor, resulting in more domestically produced lumber remaining in the continent. Imports of lumber from Europe continue to ease from the elevated levels experienced in early 2023. However, should this import trend reverse and imports head higher again, the rebalancing of supply and demand for lumber products in North America could experience an even further extended time to recovery. As noted last quarter, unusually warm weather in Western Canada has hampered logging activities this winter, limiting the accumulation of log inventories at some of our mills.

This required us to take downtime at select SPF mills in Q1-24 and may constrain our ability to manufacture and ship SPF lumber in the coming quarters.

A number of OSB mill greenfield and re-start projects have been announced in recent years, although actual new supply has been slow to come to market. We believe this is largely a function of extended vendor equipment backlogs and limited contractor availability, coupled with the 18-24 month start-up curves typical of OSB mills. While some of the announced mill projects are apt to be completed over the near-to-medium term, we continue to see meaningful constraints to significant new available OSB supply in the near term. However, should new OSB supply come to market sooner, and production ramp more quickly than is typical for mill start-ups, OSB markets may experience a period of imbalance between supply and demand.

On September 22, 2023, we announced an agreement to sell our two bleached chemithermomechanical pulp (“BCTMP”) mills, Quesnel River Pulp mill in Quesnel, B.C. and Slave Lake Pulp mill in Slave Lake, Alberta to an affiliate of a fund managed by Atlas Holdings (“Atlas”). The transaction closed on April 20, 2024 following the completion of regulatory reviews and satisfaction of customary closing conditions.

We applied the requirements for a business combination achieved in stages in accordance with IFRS 3, Business Combinations. See note 3 to our interim financial statements for additional details.

On February 27, 2024, we renewed our normal course issuer bid (“2024 NCIB”) allowing us to acquire up to 3,971,380 Common shares for cancellation effective from March 1, 2024 until the expiry of the bid on February 28, 2025.

For the three months ended March 29, 2024, we repurchased for cancellation 105,666 Common shares at an average price of $79.37 per share under our 2023 NCIB and 2024 NCIB program.

1.This is a non-GAAP financial measure. Refer to the “Non-GAAP and Other Specified Financial Measures” section of this document for more information on this measure.

Decreases in sales and earnings through Q2-23 were driven primarily by decreases in lumber and OSB pricing, inventory write-downs, maintenance-related costs and downtime in our pulp segment, and impairment charges. Earnings improved in Q3-23, driven primarily by improvements in OSB pricing, lower impairment charges, the impacts of AR4 finalization, and lower maintenance-related expenditures in our pulp segment. Sales and earnings decreased in Q4-23 due primarily to decreases in lumber and OSB pricing, higher export duties, and impairment charges related to announced facility closures and curtailments in our lumber segment. Sales and earnings improved in Q1-24 due primarily to improvements in OSB and SPF lumber pricing and lower impairment charges.

1.This is a non-GAAP financial measure. Refer to the “Non-GAAP and Other Specified Financial Measures” section of this document for more information on this measure.

Lumber sales increased compared to Q4-23 due primarily to higher SPF product pricing and shipment volumes. SPF is preferred for new home construction activity where demand has been better. Although SYP product pricing improved modestly compared to Q4-23, SYP demand has remained weak resulting in SYP being priced at a discount to SPF, which is an inversion of the normal pattern. Lumber sales decreased compared to Q1-23 due primarily to lower SYP shipment volumes and lower SYP product pricing.

The price variance resulted in an increase in operating earnings and Adjusted EBITDA by $46 million compared to Q4-23, and a decrease by $17 million compared to Q1-23.

SPF shipment volumes increased compared to Q4-23 and Q1-23 due primarily to higher production volumes, discussed further in the section below.

SYP shipment volumes were comparable versus Q4-23. SYP shipment volumes decreased compared to Q1-23 due primarily to lower production volumes, discussed further in the section below.

The volume variance resulted in an increase in operating earnings and Adjusted EBITDA of $1 million compared to Q4-23 and an increase of $7 million compared to Q1-23.

We ship SPF to certain export markets, while our SYP sales are almost entirely within the U.S. The relative proportion of shipments of SPF by destination remained broadly comparable versus comparative periods. Exports of SPF outside North America have declined in recent years due to reduced exports of low-grade lumber to China.

Wood chips, logs, and other sales were comparable versus Q4-23. Wood chips and other residuals sales decreased compared to Q1-23 due to lower chip pricing. Logs and other sales decreased compared to Q1-23 due primarily to lower log sale volumes in Alberta.

SPF production volumes increased versus comparative quarters due primarily to the inclusion of a full quarter of production from our recently acquired Spray Lake lumber mill located in Cochrane, Alberta. This impact was offset in part by reduction of operating schedules at certain of our mills due to log shortages resulting from unusually warm weather. We expect the previously announced permanent closure of our Fraser Lake, B.C. lumber mill to be complete by the end of Q2-24.

SYP production volumes increased compared to Q4-23 due to more operating days in Q1-24 and reliability improvements, which more than offset the impacts of the previously announced indefinite curtailment of operations at our Huttig, Arkansas lumber mill and permanent closure of our Maxville, Florida lumber mill, both of which completed during Q1-24. SYP production volumes decreased compared to Q1-23 due primarily to the aforementioned curtailment and permanent closure.

Cost of products sold was broadly comparable to Q4-23 due primarily to higher SPF shipment volumes offset by lower B.C. stumpage rates, lower SYP unit manufacturing costs, and a favourable $5 million variance relating to inventory write-downs. Required inventory valuation reserves were lower at the end of Q1-24 due primarily to improvements in SPF product pricing during Q1-24.

Cost of products sold decreased compared to Q1-23 due to lower SYP shipment volumes, lower B.C. stumpage rates, offset in part by higher SYP unit manufacturing costs.

Most of our SPF log requirements are harvested from crown lands owned by the provinces of B.C. or Alberta. B.C.’s stumpage system is tied to reported lumber prices, with a time lag, and publicly auctioned timber harvesting rights. Alberta’s stumpage system is correlated to published lumber prices with a shorter time lag.

SPF log costs decreased versus comparative periods due primarily to lower B.C. stumpage rates. The decrease compared to Q1-23 was significant as high lumber pricing at the end of 2022 resulted in elevated stumpage costs for our B.C. operations in Q1-23.

SPF unit manufacturing costs were broadly consistent versus comparative periods.

SYP log costs were comparable to Q4-23 and decreased slightly compared to Q1-23 as availability of logs improved.

SYP unit manufacturing costs decreased compared to Q4-23 due to higher production and the favourable cost impact of curtailing and closing of our Huttig, Arkansas and Maxville, Florida mills, offset in part by higher maintenance and labour costs. Completing the curtailment and closure of our Huttig, Arkansas and Maxville, Florida mills resulted in a cost improvement as we replaced higher-cost volumes at these locations with lower-cost production elsewhere in our manufacturing platform. SYP unit manufacturing costs increased compared to Q1-23 due to higher maintenance and labour costs.

Freight and other distribution costs increased compared to Q4-23 due to higher SPF shipment volumes and changes in customer mix, offset in part by lower fuel prices. Freight and other distribution costs decreased compared to Q1-23 due primarily to lower SYP shipment volumes and lower fuel prices, offset in part by changes in customer mix.

We recorded a higher export duties expense in Q1-24 versus comparative periods. Export duties increased compared to Q4-23 as a recovery relating to a reduction in our estimated rate was recorded in Q4-23. Higher shipment volumes to the U.S. in Q1-24 was also a contributing factor. Export duties increased compared to Q1-23 primarily due to an increased cash deposit rate resulting from the finalization of AR4, offset by lower shipment volumes to the U.S.

The following table reconciles our cash deposits paid during the period to the amount recorded in our statements of earnings:

1.Represents combined CVD and ADD cash deposit rate of 9.25% for Q1-24 and Q4-23 and 8.25% for January 1, 2023 to March 31, 2023.

2.Represents adjustment to West Fraser Estimated ADD rate of 7.06% for Q1-24, 8.84% for Q4-23 and 4.63% for Q1-23.

Amortization expense was broadly consistent versus Q4-23. Amortization expense increased compared to Q1-23 due to the completion of capital investments in our U.S. operations.

Selling, general and administration costs decreased versus comparative periods due primarily to changes in the amount of corporate overhead costs allocated to the segment.

Restructuring and impairment charges of $128 million were recorded in Q4-23 related to facility closures and curtailments due to availability of economic fibre sources in the U.S. South and B.C. Restructuring charges of $12 million relating to these aforementioned closures and curtailments, primarily employee termination benefits, were recorded in Q1-24 upon public announcement of the actions in January 2024.

Operating earnings for the Lumber Segment increased by $176 million compared to Q4-23 and decreased by $4 million compared to Q1-23 for the reasons explained above.

Adjusted EBITDA for the Lumber Segment increased by $61 million compared to Q4-23 and increased by $10 million compared to Q1-23. The following table shows the Adjusted EBITDA variance for the period.

On November 25, 2016, a coalition of U.S. lumber producers petitioned the USDOC and the USITC to investigate alleged subsidies to Canadian softwood lumber producers and levy CVD and ADD duties against Canadian softwood lumber imports. The USDOC has and continues to choose us as a “mandatory respondent” to both the countervailing and antidumping investigations, and as a result, we have received unique company-specific rates.

Developments in CVD and ADD rates

We began paying CVD and ADD duties in 2017 based on the determination of duties payable by the USDOC. The CVD and ADD cash deposit rates are updated upon the finalization of the USDOC’s AR process for each POI.

The respective Cash Deposit Rates, the AR POI Final Rate and the West Fraser Estimated ADD Rate for each period are as follows:

1.The CVD rate for the AR6 POI will be adjusted when AR6 is complete and the USDOC finalizes the rate, which is not expected until 2025.

2.The CVD rate for the AR7 POI will be adjusted when AR7 is complete and the USDOC finalizes the rate, which is not expected until 2026.

1.The ADD rate for the AR6 POI will be adjusted when AR6 is complete and the USDOC finalizes the rate, which is not expected until 2025.

2.The ADD rate for the AR7 POI will be adjusted when AR7 is complete and the USDOC finalizes the rate, which is not expected until 2026.

.

Accounting policy for duties

The CVD and ADD rates apply retroactively for each POI. We record CVD as export duty expense at the cash deposit rate until an AR finalizes a new applicable rate for each POI. We record ADD as export duty expense by estimating the rate to be applied for each POI by using our actual results and a similar calculation methodology as the USDOC and adjust when an AR finalizes a new applicable rate for each POI. The difference between the cumulative cash deposits paid and cumulative export duty expense recognized for each POI is recorded on our balance sheet as export duty deposits receivable or payable.

The difference between the cash deposit amount and the amount that would have been due based on the final AR rate will incur interest based on the U.S. federally published interest rate. We record interest income on our duty deposits receivable, net of any interest expense on our duty deposits payable, based on this rate.

Appeals

Our 2023 annual MD&A includes additional details on Softwood Lumber Dispute appeals.

Notwithstanding the deposit rates assigned under the investigations, our final liability for CVD and ADD will not be determined until each annual administrative review process is complete and related appeals processes are concluded.

1.This is a non-GAAP financial measure. Refer to the “Non-GAAP and Other Specified Financial Measures” section of this document for more information on this measure.

Our NA EWP segment includes our North American OSB, plywood, MDF, and LVL operations.

Sales increased versus comparative periods due primarily to higher OSB pricing and shipment volumes. Buoyed by new home demand, OSB demand has remained robust, with pricing improving through Q1-24.

The price variance resulted in an increase in operating earnings and Adjusted EBITDA of $32 million compared to Q4-23, and an increase of $132 million compared to Q1-23.

OSB shipment volumes increased versus comparative periods due primarily to higher production volumes, discussed further in the section below. Plywood shipment volumes were comparable versus Q4-23 and increased versus Q1-23 due to improved availability of transportation.

The volume variance resulted in an increase in operating earnings and Adjusted EBITDA of $8 million compared to Q4-23, and an increase of $8 million compared to Q1-23.

OSB production volumes increased compared to Q4-23 due to fewer major maintenance shutdowns, lower production curtailments taken to manage inventory levels, and the continued ramp-up of our Allendale, South Carolina mill. OSB production volumes increased compared to Q1-23 due primarily to the continued ramp-up of our Allendale, South Carolina mill.

Plywood production volumes were comparable versus comparative periods.

Cost of products sold decreased compared to Q4-23 due primarily to lower OSB unit manufacturing costs resulting from higher production and lower maintenance spend, offset in part by higher OSB shipment volumes.

Cost of products sold was comparable versus Q1-23 due primarily to higher OSB shipment volumes, offset by a $17 million favourable impact relating to inventory valuation adjustments. OSB unit manufacturing costs were comparable versus Q1-23 as higher labour costs and maintenance costs were offset by lower resin and energy costs. Q1-23 was impacted by an increase in inventory valuation reserves relating to raw materials and OSB finished goods inventory due to decreases in pricing during that period.

Freight and other distribution costs were consistent versus comparative periods as higher OSB shipment volumes were offset by lower fuel costs.

Amortization expense and selling, general and administration costs were consistent versus comparative periods.

Operating earnings for the NA EWP Segment increased by $43 million compared to Q4-23 and increased by $155 million compared to Q1-23 due to the reasons explained above.

Adjusted EBITDA for the NA EWP Segment increased by $45 million compared to Q4-23 and increased by $157 million compared to Q1-23. The following table shows the Adjusted EBITDA variance for the period.

1.This is a non-GAAP financial measure. Refer to the “Non-GAAP and Other Specified Financial Measures” section of this document for more information on this measure.

The Pulp & Paper segment results include the results of the Quesnel River Pulp mill and Slave Lake Pulp mill held for sale as the transactions had not completed as at March 29, 2024. The segment results also include the results of Hinton pulp mill up to its sale to Mondi on February 3, 2024.

The segment results above include our 50% interest in the CPP JV. Following our attaining control of CPP, the Pulp & Paper segment will include 100% of the results of CPP (see note 3 to our interim financial statements).

Sales decreased compared to Q4-23 due to lower shipment volumes offset in part by higher BCTMP pricing. Sales decreased compared to Q1-23 due to lower product pricing and lower shipment volumes.

The price variance resulted in an increase in operating earnings and Adjusted EBITDA of $6 million compared to Q4-23 and a decrease of $34 million compared to Q1-23.

Pulp shipments decreased versus comparative periods due primarily to the sale of the Hinton pulp mill during Q1-24.

The volume variance resulted in a decrease in operating earnings and Adjusted EBITDA of $1 million compared to Q4-23, and an increase of $1 million compared to Q1-23.

Pulp production volumes decreased versus comparative periods due primarily to the sale of the Hinton pulp mill during Q1-24.

Cost of products sold decreased compared to Q4-23 due primarily to lower shipment volumes, lower maintenance costs, and a $2 million favourable inventory valuation adjustment, offset in part by higher fibre costs. Cost of products sold decreased compared to Q1-23 due to lower shipment volumes, a $12 million favourable inventory valuation adjustment, and lower fibre and maintenance costs. The favourable inventory valuation adjustment was driven by decreases in required inventory valuation reserves during Q1-24 as product pricing improved.

Freight and other distribution costs generally trended with changes in shipment volumes. Lower ocean freight costs contributed to a decrease in unit freight rates compared to Q1-23.

Amortization expense was comparable to Q4-23 and decreased versus Q1-23. The decrease in amortization expense relates to the write-down and transfer of property, plant and equipment associated with the Hinton pulp mill, Quesnel River Pulp mill, and Slave Lake Pulp mill to a disposal group held for sale. No further amortization expense was taken on the assets upon transfer to the disposal group held for sale.

Selling, general and administration costs decreased versus comparative periods due to changes in the amount of allocated corporate overhead costs resulting from the dispositions in the Pulp & Paper segment.

We recorded an impairment reversal of $2 million in Q1-24 upon completion of the Hinton pulp mill sale and remeasurement of estimated working capital adjustments specified in the asset purchase agreements for the Quesnel River Pulp mill and Slave Lake Pulp mill.

Operating earnings for the Pulp & Paper Segment increased by $9 million compared to Q4-23 and increased by $5 million compared to Q1-23 due to the reasons explained above.

Adjusted EBITDA for the Pulp & Paper Segment increased by $2 million compared to Q4-23 and decreased by $4 million compared to Q1-23. The following table shows the Adjusted EBITDA variance for the period.

1.This is a non-GAAP financial measure. Refer to the “Non-GAAP and Other Specified Financial Measures” section of this document for more information on this measure.

Our Europe EWP segment includes our U.K. and Belgium OSB, MDF, and particleboard operations. Revenues and expenses of our European operations, which have British pound sterling and Euro functional currencies, are translated at the average rate of exchange prevailing during the period.

Sales increased compared to Q4-23 due to higher OSB and particleboard shipment volumes and the strengthening of the GBP against the USD, offset in part by lower product pricing. Sales decreased compared to Q1-23 due primarily to significantly lower product pricing and shipment volumes, offset in part by the strengthening of the GBP against the USD.

The price variance resulted in a decrease in operating earnings and Adjusted EBITDA of $5 million compared to Q4-23 and a decrease of $26 million compared to Q1-23. The price variance represents the impact of changes in product pricing in local currency terms, with any associated foreign exchange impact from the strengthening or weakening of the GBP against USD presented under Other in the Adjusted EBITDA variance table.

Shipment volumes increased compared to Q4-23 due to modest improvements in demand for OSB. Shipment volumes decreased compared to Q1-23 due to weaker demand driven by higher interest rates over the past year. Shipment volumes of MDF and particleboard in particular are highly correlated to home building activity and decreased significantly compared to Q1-23.

The volume variance resulted in an increase in operating earnings and Adjusted EBITDA of $5 million compared to Q4-23 and a decrease of $5 million compared to Q1-23.

Production volumes increased versus Q4-23 due to lower production curtailments taken to manage inventory in the current period. Production volumes decreased compared to Q1-23 as higher levels of production curtailments taken to manage inventory were taken in the current period relative to Q1-23.

Cost of products sold increased versus Q4-23 due primarily to higher shipment volumes. Modest improvements in resin and labour costs provided a partial offsetting factor. Cost of products sold decreased compared to Q1-23 due to lower shipment volumes and lower fibre, resin, and energy costs, offset in part by the strengthening of the GBP against the USD.

Freight and other distribution costs generally trended with changes in shipment volumes. Amortization expense was broadly consistent with comparable periods.

Selling, general and administration costs increased versus comparative periods due primarily to changes in the amount of corporate overhead costs allocated to the segment.

Operating earnings for the Europe EWP Segment decreased by $3 million compared to Q4-23 and decreased by $22 million compared to Q1-23 due to the reasons explained above.

Adjusted EBITDA for the Europe EWP Segment decreased by $4 million compared to Q4-23, and decreased by $21 million compared to Q1-23. The following table shows the Adjusted EBITDA variance for the period. The variances presented represent the impact of changes in price, volume and cost in local currency terms, with any associated foreign exchange impact from the strengthening or weakening of the GBP against USD presented under Other. The impact of the sale of carbon allowances is also included under Other.

Selling, general and administration costs for Q1-24 was $76 million (Q4-23 - $80 million; Q1-23 - $76 million).

Selling, general and administration costs decreased compared to Q4-23 as many of our community investment programs take place in the fourth quarter. Selling, general and administration costs were comparable versus Q1-23. Neither our 2023 or 2024 results include any provision for variable compensation expense.

Selling, general and administration costs related to our operating segments are also discussed under “Discussion & Analysis of Quarterly Results by Product Segment”.

Our equity-based compensation includes our share purchase option, phantom share unit, and deferred share unit plans (collectively, the “Plans”). Our Plans are fair valued at each period-end, and the resulting expense or recovery is recorded in equity-based compensation expense over the vesting period.

Our valuation models consider various factors, with the most significant being the change in the market value of our shares from the beginning to the end of the relevant period. The expense or recovery does not necessarily represent the value that the holders of options and units will ultimately receive.

We recorded an expense of $4 million during Q1-24 (Q4-23 - expense of $15 million; Q1-23 - expense of $2 million). The expense in the current period reflects an increase in the price of our common shares traded on the TSX and additional vesting of units granted.

Finance income, net includes interest earned on short-term investments and interest income recognized on our Canadian lumber duty deposits. We recorded finance income, net of $9 million in Q1-24 compared to finance income, net of $14 million in Q4-23 and finance income, net of $7 million in Q1-23.

Finance income, net decreased compared to Q4-23 due primarily to lower interest income on our cash equivalents. Finance income increased compared to Q1-23 due primarily to fluctuations in interest expense relating to export duties offset in part by the impact of decreases in the overall funded position of our defined-benefit pension plans.

Other expense of $7 million was recorded in Q1-24 (Q4-23 - other expense of $30 million; Q1-23 - other income of $14 million).

Other expense in Q1-24 relates primarily to losses on our electricity swaps driven by decreases in forward electricity prices over the remaining term of the contracts, offset in part by foreign exchange gains recorded on our CAD-denominated monetary assets and liabilities as the USD appreciated against the CAD.

Q1-24 results include an income tax expense of $15 million, compared to income tax recovery of $50 million in Q4-23 and income tax recovery of $21 million in Q1-23, resulting in an effective tax rate of 31% in the current quarter compared to 25% in Q4-23 and 33% in Q1-23.

We recorded a translation loss of $9 million during Q1-24 (Q4-23 - translation gain of $27 million; Q1-23 - translation gain of $13 million).

In general, a strengthening (weakening) of the USD against the Canadian dollar, British pound sterling or Euro results in a translation loss (gain). The translation loss in the current quarter reflects a strengthening of the USD against the aforementioned currencies at period-end.

We recorded an after-tax actuarial gain of $18 million during Q1-24 (Q4-23 - after-tax actuarial loss of $57 million; Q1-23 - after-tax actuarial gain of $8 million). The actuarial gain in Q1-24 reflects an increase in the discount rate used to calculate our plan liabilities, offset in part by lower returns on plan assets.

Canadian softwood lumber exports to the U.S. have been the subject of trade disputes and managed trade arrangements for several decades. Countervailing and antidumping duties have been in place since April 2017, and we are required to make deposits in respect of these duties. Whether and to what extent we can realize a selling price to recover the impact of duties payable will largely depend on the strength of demand for softwood lumber. The USDOC commenced Administrative Review 6 (“AR6”) in March 2024, with final rates expected in August 2025. Additional details can be found under the section “Discussion & Analysis of Quarterly Results by Product Segment - Lumber Segment - Softwood Lumber Dispute".

Anticipated shipment levels assume no significant change from current market demand conditions, sufficient availability of logs within our economic return criteria, and no additional temporary, indefinite or permanent curtailments. Our operations and results could be negatively affected by increasing or elevated interest rates, softening demand, the availability of transportation, the availability of labour, disruption to the global economy resulting from the conflicts in Ukraine and the Middle East, inflationary pressures, including increases in energy prices, adverse weather conditions in our operating areas, intense competition for logs, elevated stumpage fees and production disruptions due to other uncontrollable factors.

We continue to expect total lumber shipments in 2024 will be largely similar to 2023 levels. The acquisition of Spray Lake lumber mill and reliability and capital improvement gains across our lumber mill portfolio will be largely offset by capacity reductions from the recently announced permanent closures and indefinite curtailments. However, persistently weak market conditions have increased the downside risk to our current shipments guidance, particularly for SYP. That notwithstanding, for now we reiterate 2024 SPF shipments guidance of 2.6 to 2.8 billion board feet and SYP shipments of 2.7 to 2.9 billion board feet. On April 1, 2024, stumpage rates increased moderately in B.C., albeit from depressed levels, due to the market-based adjustments related to lumber prices; inflationary pressures on development, logging and delivery costs also continue to provide upward bias to fibre costs. Given the current commodity price environment, B.C. stumpage rates are expected to track modestly higher through Q2-24. In Alberta, Q2-24 stumpage rates are also expected to be moderately higher than Q1-24 levels as they too are closely linked to the price of lumber but with a quicker response to changing lumber prices. Note, however, that given the seasonal nature of logging activities in Western Canada, our fibre costs for the second quarter are largely determined by the build up of log inventories in the first quarter and as a result, changes in stumpage in the second quarter have limited effect on our financial results. We continue to expect average 2024 log costs across the U.S. South to be largely similar to those of 2023, while region-specific log costs are likely to vary depending on the unique conditions in each procurement zone.

We will continue to regularly evaluate the factors above as well as evolving market conditions in making production decisions across the business.

We continue to anticipate levels of operating cash flows and available liquidity will support our capital spending estimate for 2024. Based on our current outlook, assuming no deterioration from current market demand conditions during the year and no additional lengthening of lead times for projects underway or planned, we continue to anticipate that we will invest approximately $450 million to $550 million in 20241. Our total capital budget consists of various improvement projects and maintenance expenditures, projects focused on optimization and automation of the manufacturing process, and projects targeted to reduce greenhouse gas emissions. Expected capital expenditures1 in 2024 include approximately $80 million for the modernization of the Henderson, Texas lumber manufacturing facility, which we expect will be ready for ramp-up starting in H1-25.

1.This is a supplementary financial measure. Refer to the “Non-GAAP and Other Specified Financial Measures” section of this document for more information on this measure.

We expect to maintain our investment grade debt rating and intend to preserve sufficient liquidity to be able to take advantage of strategic growth opportunities that may arise.

Under our 2023 NCIB that expired February 26, 2024 we purchased 1,907,510 Common shares of the Company.

On February 27, 2024, we renewed our normal course issuer bid (“2024 NCIB”) allowing us to acquire up to 3,971,380 Common shares for cancellation effective from March 1, 2024 until the expiry of the bid on February 28, 2025. As of April 22, 2024, 223,598 Common shares have been repurchased for cancellation, leaving 3,747,782 available to purchase at our discretion until the expiry of the 2024 NCIB.

As of April 22, 2024, we have repurchased for cancellation 41,872,902 of the Company’s Common shares since the closing of the Norbord Acquisition on February 1, 2021 through the completion of the 2021 SIB, the 2022 SIB and normal course issuer bids, equalling 77% of the shares issued in respect of the Norbord Acquisition.

We have paid a dividend in every quarter since we became a public company in 1986 and expect to continue this practice. At the latest declared quarterly dividend rate of $0.30 per share, the total anticipated cash payment of dividends in 2024 is $98 million based on the number of Common and Class B Common shares outstanding on March 29, 2024.

We will continue to consider share repurchases with excess cash, subject to regulatory approvals, if we are satisfied that this will enhance shareholder value and not compromise our financial flexibility.

Our business is cyclical and is subject to significant changes in cash flow over the business cycle. In addition, financial performance can be materially influenced by changes in product prices and the relative values of the Canadian and U.S. dollars. Our objective in managing capital is to ensure adequate liquidity and financial flexibility at all times, particularly at the lower points in the business cycle.

Our main policy relating to capital management is to maintain a strong balance sheet and otherwise meet financial tests that rating agencies commonly apply for investment-grade issuers of public debt. Our debt is currently rated as investment grade by three major rating agencies.

We monitor and assess our financial performance to ensure that debt levels are prudent, taking into account the anticipated direction of the business cycle. When financing acquisitions, we combine cash on hand, debt, and equity financing in a proportion that is intended to maintain an investment-grade rating for debt throughout the cycle. Debt repayments are arranged, where possible, on a staggered basis that takes into account the uneven nature of anticipated cash flows. We have established committed revolving lines of credit that provide liquidity and flexibility when capital markets are restricted. In addition, as a normal part of our business, we have in the past and may from time to time seek to repurchase our outstanding securities through issuer bids or tender offers, open market purchases, privately negotiated transactions or otherwise. Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual and legal restrictions and other factors.

A strong balance sheet and liquidity profile, along with our investment-grade debt rating, are key elements of our goal to maintain a balanced capital allocation strategy. Priorities within this strategy include: reinvesting in our operations across all market cycles to strategically enhance productivity, product mix, and capacity; optimizing our portfolio of assets to reduce the variability of cash flows across market cycles; maintaining a leading cost position; maintaining financial flexibility to capitalize on growth opportunities, including the pursuit of acquisitions and larger-scale strategic growth initiatives; and returning capital to shareholders through dividends and share repurchases.

Our capital structure consists of Common share equity and long-term debt, and our liquidity includes our operating facilities.

1.Excludes demand line of credit dedicated to our jointly-owned newsprint operation as West Fraser cannot draw on it.

2.This is a capital management measure. Refer to the “Non-GAAP and Other Specified Financial Measures” section of this document for more information on this measure.

Available liquidity as at March 29, 2024 was $1,755 million (December 31, 2023 - $1,954 million). Available liquidity includes cash and cash equivalents, cheques issued in excess of funds on deposit, and amounts available on our operating loans, excluding the demand line of credit dedicated to our 50% jointly-owned newsprint operation.

Please refer to the “Cash Flow” section for analysis of the changes in cash and cash equivalents. Total debt to total capital was comparable to prior year and we remain well positioned with a strong balance sheet and liquidity profile.

As at March 29, 2024, our revolving credit facilities were undrawn (December 31, 2023 - undrawn) and the associated deferred financing costs of $2 million (December 31, 2023 - $2 million) were recorded in other assets. Interest on the facilities is payable at floating rates based on Prime Rate Advances, Base Rate Advances, Bankers’ Acceptances, Secured Overnight Financing Rate (“SOFR”) Advances at our option.

In October 2014, we issued $300 million of fixed-rate senior unsecured notes, bearing interest at 4.35% and due October 2024, pursuant to a private placement in the U.S. The notes are redeemable, in whole or in part, at our option at any time as provided in the indenture governing the notes.

We have a $200 million term loan maturing July 2025. Interest is payable at floating rates based on Base Rate Advances or SOFR Advances at our option. This loan is repayable at any time, in whole or in part, at our option and without penalty but cannot be redrawn after payment.

We have interest rate swap contracts to pay fixed interest rates and receive variable interest rates on $200 million notional principal amount of indebtedness. These swap agreements have the effect of fixing the interest rate on the $200 million 5-year term loan discussed above. In January 2024, these interest rate swaps were amended to extend their maturity from August 2024 to July 2025. Following this amendment, the weighted average fixed interest rate payable under the contract was 2.61% (previously 0.91%).

We are considered investment grade by three leading rating agencies. On March 26, 2024, Moody’s changed our outlook from stable to positive. The ratings in the table below are as at April 22, 2024.

These ratings are not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the rating agencies.

Our outstanding Common share equity consists of 79,249,520 Common shares and 2,281,478 Class B Common shares for a total of 81,530,998 Common shares issued and outstanding as at April 22, 2024. As of April 22, 2024, we held 99,309 Common shares as treasury shares for cancellation.

On February 22, 2023, we renewed our 2023 NCIB allowing us to acquire up to 4,063,696 Common shares for cancellation from February 27, 2023 until the expiry of the bid on February 26, 2024. Under this program, we repurchased 1,907,510 common shares for cancellation.

On February 27, 2024, we renewed our 2024 NCIB allowing us to acquire up to 3,971,380 Common shares for cancellation from March 1, 2024 until the expiry of the bid on February 28, 2025. For the three months ended March 29, 2024, we repurchased for cancellation 105,666 Common shares under our 2023 NCIB program and our 2024 NCIB program.

The following table shows our purchases under our NCIB programs in 2023 and 2024:

As at April 22, 2024, there were 935,962 share purchase options outstanding with exercise prices ranging from CAD$40.97 to CAD$123.63 per Common share.

Our cash is deployed primarily for operating purposes, interest payments, repayment of debt, investments in property, plant, equipment, acquisitions, share repurchases, and dividends. In normal business cycles and in years without a major acquisition or debt repayment, cash on hand and cash provided by operations have typically been sufficient to meet these uses.

We are exposed to commodity price changes. To manage our liquidity risk, we maintain adequate cash and cash equivalents balances and appropriate lines of credit. In addition, we regularly monitor and review both actual and forecasted cash flows. Refinancing risks are managed by extending maturities through regular renewals and refinancing when market conditions are supportive.

The table above shows the main components of cash flows used for or provided by operating activities for each period. The significant factors affecting the comparison to prior year were higher earnings and changes in working capital.

Earnings, after adjusting for non-cash items, were higher versus the comparative period due primarily to higher product pricing.

Working capital increased in Q1-24 due primarily to increases in inventories and receivables.

The current quarter inventory change was driven primarily by increases in the volume of log inventory on hand. Log inventory in the northern regions of North America is built up in the first quarter to sustain SPF lumber and EWP operations during the second quarter when logging is curtailed due to wet and inaccessible land conditions. Our operations typically consume this log inventory in the spring and summer months.

Accounts receivable increased due primarily to higher product pricing and higher shipment activity towards the end of Q1-24 versus Q4-23.

Cash used in financing activities increased compared to Q1-23 due primarily to common share repurchases. We returned $7 million during the three months ended March 29, 2024 to our shareholders through Common shares repurchased under our NCIB, whereas no repurchases took place during the three months ended March 31, 2023.

We returned a total of $24 million during the three months ended March 29, 2024 to our shareholders through dividend payments, which is comparable to Q1-23.

Capital expenditures of $122 million in Q1-24 (Q1-23 - $99 million) reflect our philosophy of continued reinvestment in our mills.

Our business is subject to a number of risks and uncertainties. Risks and uncertainties are included in our Annual MD&A, as updated in the disclosures in our quarterly MD&A, our public filings with securities regulatory authorities, and also include additional risks and uncertainties identified in this MD&A.

West Fraser is responsible for establishing and maintaining disclosure controls and procedures and internal control over financial reporting, each as defined in NI 52-109 in Canada and under the Securities Exchange Act of 1934, as amended, in the United States.

In accordance with the provisions of NI 52-109, our management has limited the scope of its design of the Company’s disclosure controls and procedures and internal control over financial reporting to exclude controls, policies and procedures of Spray Lake Sawmills (1980) Ltd., which was acquired on November 17, 2023.

Spray Lake’s contribution to our consolidated financial statements for the period ended March 29, 2024 was $35 million of sales, representing approximately 2.2% of consolidated sales, and $3 million of earnings, representing 7.7% of consolidated earnings. Additionally, assets attributed to Spray Lake’s assets were $131 million, representing approximately 1.4% of our total assets as at March 29, 2024.

We have designed our disclosure controls and procedures to provide reasonable assurance that information that is required to be disclosed by us in our annual filings, interim filings and other reports that we file or submit under securities legislation is recorded, processed, summarized and reported within the time periods specified in the securities legislation. These include controls and procedures designed to ensure that information that we are required to disclose under securities legislation is accumulated and communicated to our management, including our President and Chief Executive Officer (“CEO”) and the Senior Vice-President, Finance and Chief Financial Officer (“CFO”), as appropriate to allow timely decisions regarding required disclosure.

Management, under the supervision of the CEO and CFO, is responsible for establishing and maintaining adequate internal control over financial reporting, as defined under NI 52-109 in Canada and the Securities Exchange Act of 1934, as amended, in the United States, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external reporting purposes in accordance with IFRS Accounting Standards.

There has been no change in our internal control over financial reporting during the three months ended March 29, 2024, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Due to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements on a timely basis. Additionally, projections of any evaluation of the effectiveness of internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Throughout this MD&A, we make reference to (i) certain non-GAAP financial measures, including Adjusted EBITDA and Adjusted EBITDA by segment (our “Non-GAAP Financial Measures”), (ii) certain capital management measures, including available liquidity, total debt to capital ratio, and net debt to capital ratio (our “Capital Management Measures”), and (iii) certain supplementary financial measures, including our expected capital expenditures (our “Supplementary Financial Measures”). We believe that these Non-GAAP Financial Measures, Capital Management Measures, and Supplementary Financial Measures (collectively, our “Non-GAAP and other specified financial measures”) are useful performance indicators for investors to understand our operating and financial performance and our financial condition. These Non-GAAP and other specified financial measures are not generally accepted financial measures under IFRS Accounting Standards and do not have standardized meanings prescribed by IFRS Accounting Standards. Investors are cautioned that none of our Non-GAAP Financial Measures should be considered as an alternative to earnings or cash flow, as determined in accordance with IFRS Accounting Standards. As there is no standardized method of calculating any of these Non-GAAP and other specified financial measures, our method of calculating each of them may differ from the methods used by other entities and, accordingly, our use of any of these Non-GAAP and other specified financial measures may not be directly comparable to similarly titled measures used by other entities. Accordingly, these Non-GAAP and other specified financial measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS Accounting Standards. The reconciliation of the Non-GAAP measures used and presented by the Company to the most directly comparable measures under IFRS Accounting Standards is provided in the tables set forth below.

Adjusted EBITDA is used to evaluate the operating and financial performance of our operating segments, generate future operating plans, and make strategic decisions. Adjusted EBITDA is defined as earnings determined in accordance with IFRS adding back the following line items from the consolidated statements of earnings and comprehensive earnings: finance income or expense, tax provision or recovery, amortization, equity-based compensation, restructuring and impairment charges, and other income or expense.

EBITDA is commonly reported and widely used by investors and lending institutions as an indicator of a company’s operating performance, ability to incur and service debt, and as a valuation metric. We calculate Adjusted EBITDA and Adjusted EBITDA by segment to exclude items that do not reflect our ongoing operations and should not, in our opinion, be considered in a long-term valuation metric or should not be included in an assessment of our ability to service or incur debt.

We believe that disclosing these measures assists readers in measuring performance relative to other entities that operate in similar industries and understanding the ongoing cash generating potential of our business to provide liquidity to fund working capital needs, service outstanding debt, fund future capital expenditures and investment opportunities, and pay dividends. Adjusted EBITDA is used as an additional measure to evaluate the operating and financial performance of our reportable segments.

The following table reconciles Adjusted EBITDA to the most directly comparable IFRS measure, earnings.

Quarterly Adjusted EBITDA by Segment ($ millions)

Available liquidity is the sum of our cash and cash equivalents and funds available under our committed and uncommitted bank credit facilities. We believe disclosing this measure assists readers in understanding our ability to meet uses of cash resulting from contractual obligations and other commitments at a point in time.

1.Excludes demand line of credit dedicated to our jointly-owned newsprint operation as West Fraser cannot draw on it.

Total debt to total capital ratio is total debt divided by total capital, expressed as a percentage. Total capital is defined as the sum of total debt plus total equity. This calculation is defined in certain of our bank covenant agreements. We believe disclosing this measure assists readers in understanding our capital structure, financial solvency, and degree of leverage at a point in time.

1.Letters of credit facilities and the fair value of derivative liabilities are part of our bank covenants’ total debt calculation.

Net debt to capital ratio is net debt divided by total capital, expressed as a percentage. Net debt is calculated as total debt less cash and cash equivalents, open letters of credit, and the fair value of any derivative liabilities. Total capital is defined as the sum of net debt plus total equity. We believe disclosing this measure assists readers in understanding our capital structure, financial solvency, and degree of leverage at a point in time. We believe that using net debt in the calculation is helpful because net debt represents the amount of debt obligations that are not covered by available cash and cash equivalents.

1.Letters of credit facilities and the fair value of derivative liabilities are part of our bank covenants’ total debt calculation.

This measure represents our best estimate of the amount of cash outflows relating to additions to capital assets for the current year based on our current outlook. This amount is comprised primarily of various improvement projects and maintenance-of-business expenditures, projects focused on optimization and automation of the manufacturing process, and projects targeted to reduce greenhouse gas emissions. This measure assumes no deterioration in market conditions during the year and that we are able to proceed with our plans on time and on budget. This estimate is subject to the risks and uncertainties identified in this MD&A.

We use the following terms in this MD&A:

This MD&A includes statements and information that constitutes “forward-looking information” within the meaning of Canadian securities laws and “forward-looking statements” within the meaning of United States securities laws (collectively, “forward-looking statements”). Forward-looking statements include statements that are forward-looking or predictive in nature and are dependent upon or refer to future events or conditions. We use words such as “expects,” “anticipates,” “plans,” “believes,” “estimates,” “seeks,” “intends,” “targets,” “projects,” “forecasts,” or negative versions thereof and other similar expressions, or future or conditional verbs such as “may,” “will,” “should,” “would,” and “could,” to identify these forward-looking statements.

These forward-looking statements generally include statements which reflect management’s expectations regarding the operations, business, financial condition, expected financial results, performance, prospects, opportunities, priorities, targets, goals, ongoing objectives, strategies and outlook of West Fraser and its subsidiaries, as well as the outlook for North American and international economies for the current fiscal year and subsequent periods.

Forward-looking statements included in this MD&A include references to:

•assumptions in connection with the economic and financial conditions in the U.S., Canada, U.K., Europe and globally and consequential demand for our products, including the impact of persistently weak market conditions on our ability to meet our current lumber shipment guidance, in particular downside risk to shipment guidance, particularly for SYP, and variability of operating schedules and the impact of the conflicts in Ukraine and the Middle East;

•continued increases in interest rates and inflation and sustained higher interest rates and rates of inflation could impact housing affordability and repair and remodelling demand, which could reduce demand for our products;

•global supply chain issues may result in increases to our costs and may contribute to a reduction in near-term demand for our products;

•continued governmental approvals and authorizations to access timber supply, and the impact of forest fires, infestations, environmental protection measures and actions taken by government respecting Indigenous rights, title and/or reconciliation efforts on these approvals and authorizations;

•risks inherent in our product concentration and cyclicality;

•effects of competition for logs, availability of fibre and fibre resources and product pricing pressures, including continued access to log supply and fibre resources at competitive prices and the impact of third-party certification standards; including reliance on fibre off-take agreements and third party consumers of wood chips;

•effects of variations in the price and availability of manufacturing inputs, including energy, employee wages, resin and other input costs, and the impact of inflationary pressures on the costs of these manufacturing costs, including increases in stumpage fees and log costs;

•availability and costs of transportation services, including truck and rail services, and port facilities, and impacts on transportation services of wildfires and severe weather events, and the impact of increased energy prices on the costs of transportation services;

•transportation constraints may continue to negatively impact our ability to meet projected shipment volumes;

•the timing of our planned capital investments may be delayed, the ultimate costs of these investments may be increased as a result of inflation, and the projected rates of return may not be achieved;

•various events that could disrupt operations, including natural, man-made or catastrophic events including drought, wildfires, cyber security incidents, any state of emergency and/or evacuation orders issued by governments, and ongoing relations with employees;

•risks inherent to customer dependence;

•impact of future cross border trade rulings or agreements;

•implementation of important strategic initiatives and identification, completion and integration of acquisitions;

•impact of changes to, or non-compliance with, environmental or other regulations;

•the impact of the COVID-19 pandemic on our operations and on customer demand, supply and distribution and other factors;

•government restrictions, standards or regulations intended to reduce greenhouse gas emissions and our inability to achieve our SBTi commitment for the reduction of greenhouse gases as planned;

•the costs and timeline to achieve our greenhouse gas emissions objectives may be greater and take longer than anticipated;

•changes in government policy and regulation, including actions taken by the Government of British Columbia pursuant to recent amendments to forestry legislation and initiatives to defer logging of forests deemed “old growth” and the impact of these actions on our timber supply;

•impact of weather and climate change on our operations or the operations or demand of our suppliers and customers;

•ability to implement new or upgraded information technology infrastructure;

•impact of information technology service disruptions or failures;

•impact of any product liability claims in excess of insurance coverage;

•risks inherent to a capital intensive industry;

•impact of future outcomes of tax exposures;

•potential future changes in tax laws, including tax rates;

•risks associated with investigations, claims and legal, regulatory and tax proceedings covering matters which if resolved unfavourably may result in a loss to the Company;

•effects of currency exposures and exchange rate fluctuations;

•fair values of our electricity swaps may be volatile and sensitive to fluctuations in forward electricity prices and changes in government policy and regulation;

•future operating costs;

•availability of financing, bank lines, securitization programs and/or other means of liquidity;

•continued access to timber supply in the traditional territories of Indigenous Nations;

•our ability to continue to maintain effective internal control over financial reporting;

•finalization of certain post-close working capital adjustments and purchase price allocation relating to the sale of Quesnel River Pulp mill and Slave Lake Pulp mill;

•continued access to timber supply in the traditional territories of Indigenous Nations;

•our ability to continue to maintain effective internal control over financial reporting;

•finalization of certain post-close working capital adjustments and purchase price allocation relating to the purchase of Spray Lake Sawmills (1980) Ltd.;

•the risks and uncertainties described in the MD&A and the 2023 Annual MD&A; and

•other risks detailed from time to time in our annual information forms, annual reports, MD&A, quarterly reports and material change reports filed with and furnished to securities regulators.

In addition, actual outcomes and results of these statements will depend on a number of factors including those matters described under “Risks and Uncertainties” in our 2023 Annual MD&A and this interim MD&A and may differ materially from those anticipated or projected. This list of important factors affecting forward‑looking statements is not exhaustive and reference should be made to the other factors discussed in public filings with securities regulatory authorities. Accordingly, readers should exercise caution in relying upon forward‑looking statements and we undertake no obligation to publicly update or revise any forward‑looking statements, whether written or oral, to reflect subsequent events or circumstances except as required by applicable securities laws.

Additional information on West Fraser, including our Annual Information Form and other publicly filed documents, is available on the Company’s website at www.westfraser.com, on SEDAR+ at www.sedarplus.ca and on the EDGAR section of the SEC website at www.sec.gov/edgar.

Where this MD&A includes information from third parties, we believe that such information (including information from industry and general publications and surveys) is generally reliable. However, we have not independently verified any such third-party information and cannot assure you of its accuracy or completeness.

I, Sean McLaren, President and Chief Executive Officer of West Fraser Timber Co. Ltd., certify the following:

1.    Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of West Fraser Timber Co. Ltd. (the “issuer”) for the interim period ended March 29, 2024.

2.     No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

3.Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

4.Responsibility: The issuer’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.

5.Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer and I have, as at the end of the period covered by the interim filings

(i)    material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

(ii)    information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

5.1    Control framework: The control framework the issuer’s other certifying officer and I used to design the issuer’s ICFR is the Internal Control – Integrated Framework (2013 COSO Framework) published by The Committee of Sponsoring Organizations of the Treadway Commission (COSO).

5.2    “N/A”

5.3    Limitation on scope of design: The issuer has disclosed in its interim MD&A

(a)    the fact that the issuer’s other certifying officer(s) and I have limited the scope of our design of DC&P and ICFR to exclude controls, policies and procedures of Spray Lake Sawmills (1980) Ltd.(“Spray Lake”), which was acquired on November 17, 2023, being not more than 365 days before the last day of the period covered by the interim filings; and

(b)    summary financial information about Spray Lake has been proportionately consolidated or consolidated in the issuer’s financial statements.

6.    Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on January 1, 2024 and ended on March 29, 2024 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

/s/ Sean McLaren
Sean McLaren
President and Chief Executive Officer

I, Christopher A. Virostek, Senior Vice-President, Finance and Chief Financial Officer of West Fraser Timber Co. Ltd., certify the following:

1.    Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of West Fraser Timber Co. Ltd. (the “issuer”) for the interim period ended March 29, 2024.

2.     No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

3.Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

4.Responsibility: The issuer’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.

5.Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer and I have, as at the end of the period covered by the interim filings

(i)    material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

(ii)    information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

5.1    Control framework: The control framework the issuer’s other certifying officer and I used to design the issuer’s ICFR is the Internal Control – Integrated Framework (2013 COSO Framework) published by The Committee of Sponsoring Organizations of the Treadway Commission (COSO).

5.2    “N/A”

5.3    Limitation on scope of design: The issuer has disclosed in its interim MD&A

(a)    the fact that the issuer’s other certifying officer(s) and I have limited the scope of our design of DC&P and ICFR to exclude controls, policies and procedures of Spray Lake Sawmills (1980) Ltd.(“Spray Lake”), which was acquired on November 17, 2023, being not more than 365 days before the last day of the period covered by the interim filings; and

(b)    summary financial information about Spray Lake has been proportionately consolidated or consolidated in the issuer’s financial statements.

6.    Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on January 1, 2024 and ended on March 29, 2024 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

/s/ Christopher A. Virostek
Christopher A. Virostek
Senior Vice-President, Finance and Chief Financial Officer

VANCOUVER, B.C., April 23, 2024 – West Fraser Timber Co. Ltd. ("West Fraser" or the "Company") (TSX and NYSE: WFG) reported today the first quarter results of 2024 ("Q1-24"). All dollar amounts in this news release are expressed in U.S. dollars unless noted otherwise. 

•Sales of $1.627 billion and earnings of $35 million, or $0.42 per diluted share 

•Adjusted EBITDA1 of $200 million, representing 12% of sales 

•Lumber segment Adjusted EBITDA1 of $10 million  

•North America Engineered Wood Products (“NA EWP”) segment Adjusted EBITDA1 of $188 million

•Pulp & Paper segment Adjusted EBITDA1 of $3 million 

•Europe Engineered Wood Products (“Europe EWP”) segment Adjusted EBITDA1 of $(1) million

•Repurchased 105,666 shares for aggregate consideration of $8 million

•Completed sale of Hinton pulp mill to Mondi Group plc

•Subsequent to quarter-end, completed sale of Quesnel River Pulp mill and Slave Lake Pulp mill to Atlas Holdings

•Subsequent to quarter-end, announced dissolution of Cariboo Pulp & Paper ("CPP") 50/50 JV with Mercer, and West Fraser's continuation as sole owner/operator of CPP

“Our North American OSB, plywood and other engineered products had another strong quarter in Q1-24, with robust demand driven by strength in new home construction, which carried over from the fourth quarter. This was in contrast to ongoing demand softness in our European EWP business and North American lumber business, particularly for SYP lumber with its greater relative exposure to repair and remodelling applications,” said Sean McLaren, West Fraser’s President and CEO.

"While some of our wood building products still face near-term demand uncertainties, we remain optimistic in our ability to continue managing through current markets, executing on our strategy with the strong balance sheet, people and expertise to handle whatever comes our way. We continue to make progress optimizing our portfolio of assets and investing capital to modernize mills and lower costs across our platform, creating a more resilient organization. Of note, we are already seeing early financial benefits from the recent closures of some of our higher-cost lumber mills. Finally, we completed the disposition of three of our pulp and paper mills and are now the sole owner and operator of CPP following the dissolution of our joint venture. These developments took considerable effort and perseverance across the organization and are a key part of our ongoing optimization strategy, making the company stronger and benefiting all our stakeholders.”