Good morning, ladies and gentlemen. Welcome to the West Fraser Timber Company Limited Fourth Quarter 2010 Results Conference Call. During this conference call, we will be making certain statements about potential future developments. These forward-looking statements are intended to provide reasonable guidance to investors, but the accuracy of these statements depends on a number of assumptions and are subject to various risks and uncertainties. Actual outcomes will depend on a number of factors that could affect the ability of the company to execute its business plans, including those matters described under Risks and Uncertainties in our annual MD&A, which can be accessed on our website or through SEDAR and as supplemented by our quarterly MD&As. Accordingly, listeners should exercise caution in relying upon forward-looking statements. I would now like to turn the meeting over to Mr. Hank Ketcham, Chairman, President and Chief Executive Officer. Please go ahead, Mr. Ketcham.

Thank you, operator. Welcome to our Q4 conference call. There is a summary presentation on our website for those of you who would like to follow along as we talk. Yesterday, we announced our results for the fourth quarter. We earned $39 million or $0.89 a share after discontinued operations on sales of $719 million. Earnings from continuing operations were $27 million or $0.61 a share. Earnings for the year were $166 million or $3.84 per share after discontinued operations on sales of $2.9 billion. Our earnings for 2010 represent a significant improvement over the last few years despite the continuing poor new housing market in the U.S. As a result of our improved earnings, cash flows and our balance sheet and our outlook for our businesses going forward, our board of directors approved an increase in our quarterly dividend to $0.14 yesterday. This brings our dividend back to the level it was before the dividend reduction announced in May of 2009. In September and again in December, we announced that we have resumed our reinvestment program across the company. A key element of our long-term business strategy has always been to invest in our businesses to ensure that we have the most efficient and lowest cost operations possible. We believe that this strategy allowed us to operate at higher rates and achieve higher margins through the most significant downturn in generations. The capital programs that have been announced are directed mainly at improving our Solid Wood business, with capital focused on high payback projects across our Lumber business in Canada and the U.S. In addition to the capital investments and our Solid Wood business, we're planning to invest the $88 million that we have been allocated as part of the federal government's Green Transformation Program and profit improvement projects…

Thanks, Hank, and good morning, everyone. In the quarter, we earned $39 million after discontinued operations on sales of $719 million. EBITDA in the quarter was $75 million, representing an EBITDA margin of 10.5%. EBITDA and earnings were lower in the quarter compared to the third quarter, mainly as a result of lower prices per pulp, plywood and MDF and a stronger Canadian dollar. Our EBITDA and EBITDA margin in this quarter compared to the previous quarter were lower in each of the lumber panels and Pulp & Paper segments. Our lower consolidated EBITDA and earnings compared to the third quarter were partially the result of higher selling, general and administrative expenses which relate mostly to an increase in equity-based compensation cost. The equity-based compensation cost was $20 million in the quarter, representing about $0.33 per share compared to $8 million in the previous quarter. This higher expense reflects an increase in our share price, which closed the quarter up 24% from the beginning of the quarter. Amortization costs in the quarter and for the year were lower than in comparable periods as a result of changes in the rates of amortization for certain groups of assets and because certain assets became fully amortized in 2010. In the quarter, we were able to renegotiate our committed revolving line of credit to extend the term to December 2014, adjust future borrowing limits and take advantage of more favorable borrowing and standby rates. In the quarter, we recorded a foreign exchange gain on our long-term debt of $10 million or $0.20 per share. The gain is a result of the strengthening of the Canadian dollar by just over $0.03 from the beginning of the quarter to the end of the quarter and the translation effect on our USD $300 million denominated debt.…

Okay. Thank you, Gerry. And I think we're now ready to take some questions, operator.

[Operator Instructions] The first question is from Rick Skidmore of Goldman Sachs.

First, Gerry, just on the unallocated corporate costs, is that largely just the share-based comp staying so high in the quarter?

No, in corporate is the share-based, equity-based compensation. We have not allocated that to the other divisions.

So that $14 million in the quarter, 20 of that is share-based comp. Is that right?

Yes.

So as you think about that line going forward, it’s couple of million dollars a quarter, that corporate and other?

The remaining?

Yes. Sort of thinking about it for my modeling purposes, as we go forward, that corporate another line, excluding changes in the share-based comp, what will that look like?

Maybe a couple million dollars.

And then maybe just shifting, Hank, to the Lumber business, on the beetle kill wood, how long into the future do you expect to be able to be harvesting beetle kill wood and to be processing it in the lumber mill?

Well, obviously, it is deteriorating. So we expect that -- we're still harvesting at fairly high levels, and we expect that to continue for an indeterminate time. The province is reducing the annual allowable cut. There's been an announcement in our Cornell and Prince George operating areas of reductions. But it partly relates to the market. The higher the price, the more and longer you can salvage the stuff. So we see a gradual reduction in the production of beetle killed timber over the next five to 10 years, Rick.

And then lastly, Hank, just in terms of operating rates in the Lumber business. Did you run full across the system? Or was it full in B.C. and less so in the South?

Yes, we ran full in Canada, and we ran somewhere between 70%, 80% in the South.

[Operator Instructions] The following question is from Sean Steuart of TD Newcrest.

Hank, you touched on what you're seeing in pulp markets in general with resilient pricing. Wondering if you can differentiate a little bit between what you're seeing with NBSK, which is obviously quite strong right now, and BCTMP. I guess it’s our impression there's still some slack in that market. Can you touch a little bit more on the dynamics in BCTMP?

Fundamentally, BCTMP is more related to hardwood kraft. So hardwood kraft is under pricing pressure and as a result, so is BCTMP. The opposite is the case for softwood, which is in high demand, and inventories are in good shape.

And it looks like you drew down your BCTMP inventories quite a bit this quarter. You’re comfortable with where those inventories are now?

Yes, definitely.

And then, Hank, just one other question. You touched on higher percentages of construction grade lumber going to China. Can you put some numbers around that to help give us context of the percentage now versus where it might have been a quarter ago or six months ago?

In our case, and I’m only speaking from West Fraser's case, but in our case, probably somewhere between a 20% and 30% increase versus earlier in the year -- increase over what we would have shipped earlier in the year, so a significant increase.

The following question is from Paul Quinn of RBC Capital Markets.

Maybe you could give a little bit more color around the CapEx spend of the $230 million, where that's directed sort of on a maybe a segment or country basis.

Well, well over 50% would be in Canada, and so significantly under 50% will be in the U.S.

And then in terms of lumber panels, not really too much in panels and expect the bulk of that in the Lumber segment?

Yes, it's almost entirely in the Lumber segment.

Then just turning to panels, the weakness in the quarter, you mentioned the increased imports from the U.S. Also, I guess slowing Canadian housing market going forward, is a factor, but what do you see about that business going forward? Is it going to be sort of weak? Do you expect 2011 like Q4?

I think we're not expecting strength. The issue is the strong Canadian dollar allows the Americans to divert plywood up here given the fact that housing is so weak in the U.S. And if housing falls off up here as well, that will create further weakness.

And just on the Softwood Lumber dispute ongoing, do you see that as a material impact to the company in that it sounds like you feel pretty strong about the Canadian case and then the timing of that is still -- it seems to be well off into the future?

It's really very, very difficult to predict both timing and the effect, if any. We do believe we have a very strong case, and so I can't give you anything more than that. I can't put any more color around it than that. But we do think we have a very strong case.

The following question is from Joe Dekersy [ph] of BMO Capital Markets.

Stephen Atkinson. Can you give us some color on as to what is being sold?

We're selling a couple of -- well, there were two paper machines there. We're selling them. Other peripheral assets and, of course, we're still working on a couple of other more major assets up there, Stephen.

So I can assume it's relatively small?

Yes.

And I hope you could give a bit more color on the schedules for the projects or the, particularly, operators of the U.S. soft lumber mills in terms of timing and spending, things like that?

I think, predominantly, that's going to happen second half of this year and first half of 2012.

And so we'll see the benefits obviously '12 and '13, more like '13?

Correct.

And in terms of China, do you see any -- well, obviously, it's growing very quickly. What's your experience in 2011 so far?

As you said, it's growing very quickly. It's really been a -- it's growing significantly, and we see that growth continuing.

And were there any [indiscernible] pickups in terms of freight, transportation and so on? Have you seen anything unusual on that side in terms of being able to ship lumber?

I wouldn't say unusual, I'd say usual. And you're right. There are hiccups during the winter as bad weather causes problems in the supply chain, but it's not unusual and we have built a little bit of inventory due to car supply and so forth but nothing that we can't solve over the next couple of quarters.

[Operator Instructions] The following question is from Rick Skidmore of Goldman Sachs.

In terms of the returns, what type of returns do you anticipate on that capital spending that you're going to be doing?

No, I think in general, there's going to be -- it's a big program. Some are very, very fast, under a year. We kind of look at two to three years. I think you can count on a bulk of it and then there’s some of it would be somewhat more than that because it’d be some strategic capital.

And then lastly, just coming back to the beetle killed discussion. How does that impact your lumber production in Canada over time? Will the beetle killed kind of continue in terms of the amount that you can harvest at a relatively steady state? Or is that declining over time? And how does that impact your lumber production in Canada over time?

Well, so we're very heavily into beetle wood in our central interior British Columbia operations very heavily. And over time, we will cycle out of out into a more balanced diet of beetle wood and green wood. That's going to happen over time. The cut’s going to be reduced, so in general, production in the interior British Columbia will be reduced. We believe that over time, we peaked at 15 billion feet of production out of the interior British Columbia, not West Fraser, which we had but it was the whole industry. And we believe that over time, we're going to be more of like around 10 billion feet, which is kind where we're at today because of the market.

[Operator Instructions] The following question is from Benoit Laprade of Scotia Capital.

Gerry, a quick one for you. Depreciation was down Q4 versus the prior quarter. Is $37 million we saw there a good proxy going forward? Or I assume it's going to be ramping up as you spend the $230 million. How should we think about depreciation in 2011?

I think for 2011, around $180 million, and as we get the capital spent, that number will be adjusted accordingly. It'll probably increase a little bit.

So $180 million for 2011 is a good number?

Yes, I think so.

There are no further questions registered at this time.

Okay. Thank you, operator, and thank you, everybody, for joining our call. And I guess we'll talk to you in the next quarter. Thanks. Bye.