Interim report
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Canfor Corporation. 2026 Quarter Three – Interim report For the three months ended September 30, 2026.
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2 2 Message to shareholders 6 Management’s discussion and analysis 22 Condensed Consolidated Balance Sheets 23 Condensed Consolidated Statements of Income (Loss) 24 Condensed Consolidated Statements of Other Comprehensive Income (Loss) 25 Condensed Consolidated Statements of Changes in Equity 26 Condensed Consolidated Statements of Cash Flows 27 Notes to the Condensed Consolidated Interim Financial Statements
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To Our Shareholders. Canfor Corporation (the "Company" or "Canfor") reported its third quarter of 2026 results: Overview. • Reported operating loss of $77 million and a shareholder net loss of $88 million, equivalent to $0.75 per share. • After taking into consideration adjusting and one-time items of $74 million, adjusted EBITDA1 was $98 million in Q3 2026, compared to $120 million in Q2 2026. • Relatively stable lumber segment results across all operating regions, while demand uncertainty persisted and North American benchmark lumber prices declined modestly. • Another quarter of strong earnings from the Company's paper business, combined with improved results from its pulp business, despite continued subdued global softwood pulp market conditions. • Completed the acquisition of PinkWood Ltd., expanding the Company's engineered wood products capacity. • Announced the permanent closures of the Fox Creek sawmill in Fox Creek, Alberta and the Northwood Northern Bleached Softwood Kraft pulp mill in Prince George, British Columbia. Fox Creek completed its wind down during the third quarter and Northwood is anticipated to close by the end of the year. Financial results. The following table summarizes selected financial information for the Company for the comparative periods: (millions of Canadian dollars, except per share amounts) Q3 2026 Q2 2026 YTD 2026 Q3 2025 YTD 2025 Sales $ 1,284.8 $ 1,526.4 $ 4,170.3 $ 1,259.8 $ 4,056.7 Reported EBITDA (loss)¹ $ 24.0 $ 100.8 $ 153.3 $ (110.7) $ (187.1) Reported operating income (loss) $ (76.6) $ 4.8 $ (144.3) $ (208.3) $ (488.2) Adjusted EBITDA (loss)¹ $ 98.1 $ 119.6 $ 226.2 $ (13.7) $ 113.6 Adjusted operating income (loss)¹ $ (43.8) $ 14.8 $ (121.5) $ (188.5) $ (271.4) Net loss² $ (88.2) $ (18.5) $ (178.8) $ (172.4) $ (406.2) Net loss per share, basic and diluted² $ (0.75) $ (0.16) $ (1.53) $ (1.48) $ (3.45) ¹. Earnings before interest, tax, depreciation and amortization ("EBITDA") is calculated for the Company as operating income (loss) before amortization. EBITDA, adjusted EBITDA, adjusted operating income (loss) as well as adjusting and one-time items referenced throughout this news release are defined as non-IFRS financial measures. For further details, refer to the "Third quarter results, including adjusting and one-time items" table and the "Non-IFRS financial measures" sections of this document. ². Attributable to equity shareholders of the Company. The Company reported an operating loss of $76.6 million for the current quarter, compared to operating income of $4.8 million for the second quarter of 2026. Third quarter results, including adjusting and one-time items. After taking account of adjusting and one-time items totaling $74.1 million, as outlined in the table below, the Company’s adjusted EBITDA for the third quarter of 2026 was $98.1 million compared to a similarly adjusted EBITDA of $119.6 million for the previous quarter. These results reflected a slight decline in results for the lumber segment and improved earnings for the pulp and paper segment. 2
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(millions of Canadian dollars) Q3 2026 Q2 2026 YTD 2026 Q3 2025 YTD 2025 Reported operating income (loss) $ (76.6) $ 4.8 $ (144.3) $ (208.3) $ (488.2) Asset write-downs and impairments - lumber segment⁴ 31.8 13.7 45.5 – 188.6 Adjusted operating income (loss)³ $ (43.8) $ 14.8 $ (121.5) $ (188.5) $ (271.4) One-time items - lumber segment³ Restructuring and closure costs⁷ 4.6 8.8 13.4 – 6.7 Duty expense related to finalized rates⁸ – – – 77.2 77.2 One-time item - pulp segment³ Restructuring and closure costs⁷ 36.7 – 36.7 – – Adjusted operating income (loss) before one-time items³ $ (2.5) $ 23.6 $ (71.4) $ (111.3) $ (187.5) Amortization 100.6 96.0 297.6 97.6 301.1 Adjusted EBITDA (loss)³ $ 98.1 $ 119.6 $ 226.2 $ (13.7) $ 113.6 ³. EBITDA is calculated for the Company as operating income (loss) before amortization. EBITDA, adjusted EBITDA, adjusted operating income (loss) as well as adjusting and one-time items referenced throughout this news release are defined as non-IFRS financial measures. For further details, refer to the “Non-IFRS financial measures” section of this news release. ⁴. For the lumber segment, an asset write-down and impairment charge totalling $31.8 million was recognized in Q3 2026 related to the permanent closure of the Company's Fox Creek sawmill (Q2 2026 - $13.7 million related to the permanent closures of Urshult and Orrefors sawmills in Europe; Q3 2025 - no asset write-down and impairment charge was recognized). ⁵. For the pulp and paper segment, an asset write-down and impairment charge totalling $10.0 million was recorded in Q3 2026 related to the permanent closure of the Company's Northwood NBSK pulp mill ("Northwood") (Q2 2026 and Q3 2025 - no asset write-down and impairment charge was recognized). ⁶. For the lumber segment, a $0.7 million net reversal of a previously recognized inventory write-down was recorded in Q3 2026 (Q2 2026 - $7.0 million net reversal of a previously recognized inventory write-down, Q3 2025 - $14.9 million net inventory write-down expense). For the pulp and paper segment, an $8.3 million net reversal of a previously recognized inventory write-down was recognized in Q3 2026 (Q2 2026 - $3.3 million net inventory write-down expense, Q3 2025 - $4.9 million net inventory write- down expense). ⁷. For the lumber segment, restructuring and closure costs of $4.6 million were recognized in Q3 2026, primarily related to the permanent closure of the Fox Creek sawmill in Alberta (Q2 2026 - restructuring and closure costs of $8.8 million, related to the permanent closures of the Urshult and Orrefors sawmills in Europe; Q3 2025 - no restructuring and closure costs were recognized). For the pulp and paper segment, $36.7 million restructuring and closure costs were recognized in Q3 2026 related to the permanent closure of the Northwood pulp mill in British Columbia (Q2 2026 and Q3 2025 - no restructuring and closure costs were recognized). ⁸. No corresponding adjustment was recognized in Q3 2026, as the final countervailing (“CVD”) and anti-dumping duty (“ADD”) rates applicable to the seventh period of review ("POR7") were finalized subsequent to quarter-end and an expense of $45.9 million (US$32.8 million) will be recognized in Q4 2026 (Q3 2025 - a net duty expense of $77.2 million (US$56.2 million) was recognized following the finalization of CVD and ADD rates applicable to the sixth period of review (“POR6”)). Third quarter lumber segment highlights. For the lumber segment, the operating loss was $19.9 million for the third quarter of 2026, compared to the previous quarter’s operating income of $41.2 million. After taking into consideration adjusting and one-time items totalling $35.7 million, as noted in the table, the lumber segment’s adjusted EBITDA was $107.9 million, compared to a similarly adjusted EBITDA of $144.7 million in the prior quarter. These earnings reflected relatively stable results across all of the Company's operating regions. The quarter-over-quarter decrease was primarily driven by lower lumber shipment volumes in Europe, largely associated with regular summer production downtime, mitigated in part by higher shipment volumes in the US South and improved lumber unit sales realizations across all of the Company's operating regions. In July 2026, the Company announced the permanent closure of its Fox Creek sawmill in Fox Creek, Alberta, with operations winding down in September 2026. As a result of this announcement, the Company recognized an asset write-down and impairment charge of $31.8 million, as well as restructuring costs of $4.6 million, during the third quarter of 2026. Throughout the third quarter of 2026, North American lumber market conditions remained relatively consistent with the previous quarter. While underlying market fundamentals were generally stable, elevated mortgage rates and continued political and economic uncertainty weighed on demand. Customer purchasing activity remained cautious, with inventories maintained at lean levels. Against this backdrop, North American benchmark lumber prices generally experienced modest declines during the current quarter, while wider-width dimensions saw some positive momentum. Activity in the repair and remodeling sector remained broadly steady throughout the current quarter. Offshore lumber market conditions in Asia continued to face pressure throughout the third quarter of 2026. In Japan, pricing was relatively stable; however, softwood lumber imports declined amid weak domestic demand and continued substitution toward domestic species. In China, persistent weakness in residential construction and real estate activity continued to dampen lumber demand. European lumber markets improved slightly through the current quarter. Pricing in Central Europe remained relatively steady, while Northern Europe strengthened modestly, benefiting from favourable weather and improved demand. In the United Kingdom (“UK”), 3 Asset write-down and impairment - pulp segment⁵ 10.0 – 10.0 – – Inventory write-down (recovery), net⁶ (9.0) (3.7) (32.7) 19.8 28.2
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however, subdued construction activity and ample supply weighed on pricing. In the Middle East and North Africa (“MENA”), lumber demand and pricing were stable through the current quarter, notwithstanding ongoing geopolitical tensions in the region. Lumber segment outlook. Looking ahead, North American lumber markets are anticipated to soften through the fourth quarter of 2026, as a seasonal slowdown in construction activity and weaker underlying demand are projected to weigh on North American benchmark lumber prices. Elevated mortgage rates and affordability challenges are anticipated to persist into 2027, while cautious purchasing behaviour continues to constrain demand. However, lower softwood lumber duty rates, effective mid-October, are projected to partially mitigate the impact of weaker Western Spruce/Pine/Fir ("Western SPF") pricing on lumber unit sales realizations through the remainder of the year. In Asia, modest improvements in Japanese lumber demand and pricing are forecast for the fourth quarter of 2026 as delayed projects advance and manufacturing activity accelerates. Demand in China is anticipated to remain subdued amid continued weakness in residential construction activity. In Europe, lumber market conditions are projected to soften through the fourth quarter of 2026, with regional pricing forecast to modestly decline. Pricing pressure in the UK is anticipated to persist and extend into Central Europe, while market conditions in Northern Europe and MENA are projected to remain relatively stable. Third quarter pulp and paper segment highlights. For the pulp and paper segment, the operating loss was $44.6 million for the third quarter of 2026, compared to an operating loss of $23.1 million for the second quarter of 2026. After taking into consideration adjusting and one-time items totaling $38.4 million, the pulp and paper segment's adjusted EBITDA for the third quarter of 2026 was $1.5 million, compared to an adjusted EBITDA loss of $12.2 million for the second quarter of 2026. Included in the third quarter adjusted EBITDA of $1.5 million is another quarter of strong earnings from the Company's paper business, with EBITDA of $10.5 million in the current quarter, compared to $8.0 million in the previous quarter. Overall, the improved quarter-over-quarter results for the pulp and paper segment primarily reflected an increase in pulp and paper production, largely the result of the scheduled maintenance downtime completed in the prior period, partially offset by a slight decline in US-dollar Northern Bleached Softwood Kraft ("NBSK") pulp list prices to China. Global softwood pulp market conditions remained relatively subdued during the third quarter of 2026, as a structural shift in pulp market fundamentals, combined with soft demand and elevated producer inventory levels continued to weigh on pricing. Supply constraints provided some relief, moderating further price declines during the current quarter. Consequently, the US-dollar NBSK pulp list prices to China, the world’s largest pulp consumer, averaged US$645 per tonne, down US$13 per tonne, or 2%, compared to the previous quarter. Global softwood pulp producer inventories remained elevated during the third quarter of 2026, ending August at 46 days of supply, two days higher than at the end of June 2026 and at the upper end of the balanced range. Typically, market conditions are considered balanced when inventories are in the 39-47 days of supply range. Conversely, global kraft paper demand continued to maintain its positive momentum in the third quarter of 2026, building on the strength seen in the prior quarter. In North America, demand benefited from growth in paper-based packaging applications, supported by higher plastic raw material costs, the ongoing substitution of plastic-based products, and stronger food packaging demand. Pulp and paper segment outlook. Looking ahead, global softwood kraft pulp market conditions are anticipated to remain subdued through the balance of the year. The ongoing structural shift in pulp market fundamentals experienced throughout 2026 is projected to persist, as additional pulp production capacity continues to enter the market. These factors, coupled with relatively soft demand, are forecast to keep market conditions challenging. Ongoing economic and geopolitical uncertainty is projected to continue to constrain purchasing activity, keeping producer inventory levels elevated and limiting near-term price recovery. However, recent and potential further supply reductions may provide some pricing relief. Demand for bleached kraft paper is anticipated to remain stable through the fourth quarter of 2026, both globally and in North American markets, supported by continued growth in paper-based packaging applications. 4
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Results in the fourth quarter of 2026 will reflect the closure of the Company's Northwood pulp mill, including the associated impact on pulp production, shipments and costs. No major maintenance outages are scheduled at the Company's facilities through the balance of 2026. The Honourable John R. Baird Susan L. Yurkovich Chairman President and Chief Executive Officer 5
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Canfor Corporation. Third quarter 2026 Management’s discussion and analysis. This interim Management’s Discussion and Analysis ("MD&A") provides a review of Canfor Corporation’s ("Canfor" or "the Company") financial performance for the quarter ended September 30, 2026 relative to the quarters ended June 30, 2026 and September 30, 2025, and the financial position of the Company at September 30, 2026. It should be read in conjunction with Canfor’s unaudited interim financial statements and accompanying notes for the quarters ended September 30, 2026 and 2025, as well as the 2025 annual MD&A and the 2025 audited consolidated financial statements and notes thereto, which are included in Canfor’s Annual Report for the year ended December 31, 2025 (available at www.canfor.com). The financial information contained in this interim MD&A has been prepared in accordance with International Financial Reporting Standards ("IFRS"), which is the required reporting framework for Canadian publicly accountable enterprises. Throughout this discussion, reference is made to EBITDA, EBITDA before Asset Write-Downs and Impairments, Adjusted EBITDA, Adjusted Operating Income (Loss), and Adjusted Operating Income (Loss) before One-Time Items, which Canfor considers to be a relevant indicator for measuring trends in the performance of each of its operating segments and the Company’s ability to generate funds to meet its debt repayment and capital expenditure requirements. Reference is also made to Adjusted Shareholder Net Income (Loss) (calculated as Shareholder Net Income (Loss) less specific items affecting comparability with prior periods – for the full calculation, see reconciliation included in the section "Selected Quarterly Financial information") and Adjusted Shareholder Net Income (Loss) per Share (calculated as Adjusted Shareholder Net Income (Loss) divided by the weighted average number of shares outstanding during the period). EBITDA, EBITDA before Asset Write-Downs and Impairments, Adjusted EBITDA, Adjusted Operating Income (Loss), Adjusted Operating Income (Loss) before One-Time Items, Adjusted Shareholder Net Income (Loss) and Adjusted Shareholder Net Income (Loss) per Share are not generally accepted earnings measures under IFRS and should not be considered as an alternative to net income (loss) or cash flows as determined in accordance with IFRS. As there is no standardized method of calculating these measures, Canfor’s EBITDA, EBITDA before Asset Write-Downs and Impairments, Adjusted EBITDA, Adjusted Operating Income (Loss), Adjusted Operating Income (Loss) before One-Time Items, Adjusted Shareholder Net Income (Loss), and Adjusted Shareholder Net Income (Loss) per Share may not be directly comparable with similarly titled measures used by other companies. Reconciliations of EBITDA, EBITDA before Asset Write-Downs and Impairments, Adjusted EBITDA, Adjusted Operating Income (Loss) to Operating Income (Loss) and Adjusted Shareholder Net Income (Loss) to Net Income (Loss) reported in accordance with IFRS are included in the "Non-IFRS financial measures" section of this interim MD&A. Throughout this discussion, reference is made to the current quarter, which refers to the results for the third quarter of 2026. Also in this interim MD&A, reference is made to net debt, net debt to total capitalization and return on invested capital ("ROIC") which the Company considers to be relevant performance indicators that are not generally accepted under IFRS. Therefore, these indicators, defined herein, may not be directly comparable with similarly titled measures used by other companies. Refer to the "Non-IFRS financial measures" section of this interim MD&A for further details. Factors that could impact future operations are also discussed. These factors may be influenced by known and unknown risks and uncertainties that could cause the actual results to be materially different from those stated in this discussion. Factors that could have a material impact on any future oriented statements made herein include, but are not limited to: general economic, market and business conditions; product selling prices; raw material and other operating costs; currency exchange rates; interest rates; changes in law and public policy; the outcome of labour and trade disputes; and opportunities available to or pursued by Canfor. All financial references are in millions of Canadian dollars unless otherwise noted. Certain comparative amounts have been reclassified to conform to current presentation. The information in this report is as at November 4, 2026. Forward-looking statements. Certain statements in this interim MD&A constitute "forward-looking statements" which involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from any future results, performance or achievements expressed or implied by such statements. Words such as "expects", "anticipates", "projects", "intends", "plans", "will", "believes", "seeks", "estimates", "should", "may", "could", and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are based on Management’s current expectations and beliefs and actual events or results may differ materially. There are many factors that could cause such actual events or results expressed or implied by such forward-looking statements to differ materially from any future results expressed or implied by such statements. Forward-looking statements are based on current expectations and Canfor assumes no obligation to update such information to reflect later events or developments, except as required by law. 6
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Third quarter 2026. Overview, including adjusting and one-time items1. (millions of Canadian dollars) Q3 2026 Q2 2026 YTD 2026 Q3 2025 YTD 2025 Inventory write-down (recovery), net⁴ (9.0) (3.7) (32.7) 19.8 28.2 Adjusted operating income (loss)¹ $ (43.8) $ 14.8 $ (121.5) $ (188.5) $ (271.4) One-time items - lumber segment¹ Restructuring and closure costs⁵ 4.6 8.8 13.4 – 6.7 Duty expense related to finalized rates⁶ – – – 77.2 77.2 One-time item - pulp segment¹ Restructuring and closure costs⁵ 36.7 – 36.7 – – Adjusted operating income (loss) before one-time items¹ $ (2.5) $ 23.6 $ (71.4) $ (111.3) $ (187.5) Amortization 100.6 96.0 297.6 97.6 301.1 Adjusted EBITDA (loss)¹ $ 98.1 $ 119.6 $ 226.2 $ (13.7) $ 113.6 ¹. Earnings before interest, tax, depreciation and amortization ("EBITDA") is calculated for the Company as operating income (loss) before amortization. EBITDA, adjusted EBITDA, adjusted operating income (loss) as well as adjusting and one-time items referenced throughout this interim MD&A are non-IFRS financial measures. Refer to the "Non-IFRS financial measures" section for further details. ². For the lumber segment, an asset write-down and impairment charge totalling $31.8 million was recognized in Q3 2026 related to the permanent closure of the Company's Fox Creek sawmill (Q2 2026 - $13.7 million related to the permanent closures of Urshult and Orrefors sawmills in Europe; Q3 2025 - no asset write-down and impairment charge was recognized). ³. For the pulp and paper segment, an asset write-down and impairment charge totalling $10.0 million was recorded in Q3 2026 related to the permanent closure of the Company's Northwood Northern Bleached Softwood Kraft ("NBSK") pulp mill (Q2 2026 and Q3 2025 - no asset write-down and impairment charge was recognized). ⁴. For the lumber segment, a $0.7 million net reversal of a previously recognized inventory write-down was recorded in Q3 2026 (Q2 2026 - $7.0 million net reversal of a previously recognized inventory write-down, Q3 2025 - $14.9 million net inventory write-down expense). For the pulp and paper segment, an $8.3 million net reversal of a previously recognized inventory write-down was recognized in Q3 2026 (Q2 2026 - $3.3 million net inventory write-down expense, Q3 2025 - $4.9 million net inventory write- down expense). ⁵. For the lumber segment, restructuring and closure costs of $4.6 million were recognized in Q3 2026, primarily related to the permanent closure of the Fox Creek sawmill in Alberta (Q2 2026 - restructuring and closure costs of $8.8 million, related to the permanent closures of the Urshult and Orrefors sawmills in Europe; Q3 2025 - no restructuring and closure costs were recognized). For the pulp and paper segment, $36.7 million restructuring and closure costs were recognized in Q3 2026 related to the permanent closure of the Northwood NBSK pulp mill in British Columbia (Q2 2026 and Q3 2025 - no restructuring and closure costs were recognized). ⁶. No corresponding adjustment was recognized in Q3 2026, as the final countervailing (“CVD”) and anti-dumping duty (“ADD”) rates applicable to the seventh period of review ("POR7") were finalized subsequent to quarter-end and an expense of $45.9 million (US$32.8 million) will be recognized in Q4 2026 (Q3 2025 - a net duty expense of $77.2 million (US$56.2 million) was recognized following the finalization of CVD and ADD rates applicable to the sixth period of review (“POR6”)). Analysis of specific items affecting comparability of shareholder net loss. After-tax impact, net of non-controlling interests (millions of Canadian dollars, except per share amounts) Q3 2026 Q2 2026 YTD 2026 Q3 2025 YTD 2025 Shareholder net loss, as reported $ (88.2) $ (18.5) $ (178.8) $ (172.4) $ (406.2) Foreign exchange (gain) loss on term debt (1.4) (7.9) (12.7) (3.4) 5.1 Foreign exchange (gain) loss on duty deposits loan 1.1 7.3 13.1 6.2 (11.0) (Gain) loss on derivative financial instruments 1.2 2.6 6.0 (1.6) (8.1) Asset write-downs and impairments, net of tax 30.7 10.9 41.6 – 143.9 Net impact of above items $ 31.6 $ 12.9 $ 48.0 $ 1.2 $ 129.9 Adjusted shareholder net loss⁷ $ (56.6) $ (5.6) $ (130.8) $ (171.2) $ (276.3) Shareholder net loss per share (EPS), as reported $ (0.75) $ (0.16) $ (1.53) $ (1.48) $ (3.45) Net impact of above items per share 0.27 0.11 0.41 0.01 1.10 Adjusted shareholder net loss per share⁷ $ (0.48) $ (0.05) $ (1.12) $ (1.47) $ (2.35) ⁷. Adjusted shareholder net loss is a non-IFRS financial measure. Refer to the "Non-IFRS financial measures" section for further details. 7 Reported operating income (loss) $ (76.6) $ 4.8 $ (144.3) $ (208.3) $ (488.2) Asset write-downs and impairments - lumber segment² 31.8 13.7 45.5 – 188.6 Asset write-down and impairment - pulp segment³ 10.0 – 10.0 – –
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Selected financial information and statistics. (millions of Canadian dollars) Q3 2026 Q2 2026 YTD 2026 Q3 2025 YTD 2025 Operating income (loss) by segment: Lumber $ (19.9) $ 41.2 $ (22.4) $ (182.2) $ (436.9) Pulp and paper (44.6) (23.1) (83.9) (16.0) (10.5) Unallocated and other (12.1) (13.3) (38.0) (10.1) (40.8) Total operating income (loss) $ (76.6) $ 4.8 $ (144.3) $ (208.3) $ (488.2) A d d : A m o r t i z a t i o n ⁸ 100.6 96.0 297.6 97.6 301.1 Add: Asset write-downs and impairments 41.8 13.7 55.5 – 188.6 Total EBITDA before asset-write downs and impairments $ 65.8 $ 114.5 $ 208.8 $ (110.7) $ 1.5 Add (deduct): Non-cash working capital movements, net 43.6 128.0 59.5 55.3 (62.0) Defined benefit plan contributions, net (1.4) (2.4) (6.0) (2.8) (8.2) Income taxes received (paid), net (6.4) (7.4) (6.3) 4.7 (16.9) D u t i e s p a i d l e s s ( g r e a t e r ) t h a n a c c r u a l s ⁹ (31.5) (24.2) (75.9) 68.0 67.0 O t h e r o p e r a t i n g c a s h f l o w s , n e t ¹ ⁰ 24.6 1.4 47.4 3.2 29.5 Cash used in operating activities $ 94.7 $ 209.9 $ 227.5 $ 17.7 $ 10.9 Add (deduct): Capital additions, net (68.7) (46.0) (180.6) (39.7) (212.7) Proceeds from sale of property, plant and equipment 0.3 22.0 22.6 1.2 3.7 Changes in term debt, net (3.9) (4.3) (12.4) 85.1 85.0 Acquisition of AB Karl Hedin Sågverk, net of cash acquired – – – (149.1) (149.1) Acquisition of PinkWood Ltd., net of cash acquired (47.0) – (47.0) – – Cash contribution from minority shareholders – – – 19.7 19.7 Finance expenses paid (11.6) (18.5) (40.7) (8.5) (24.3) Sale (purchase) of long-term investments, net 0.8 52.7 22.8 (3.0) 12.7 Payment of lease obligations (10.0) (10.3) (29.8) (8.4) (28.3) O t h e r , n e t ¹ ⁰ (9.0) 6.7 (10.3) (3.3) (4.7) Change in cash / operating loans $ (54.4) $ 212.2 $ (47.9) $ (88.3) $ (287.1) ROIC – Consolidated period-to-date¹¹ (2.2)% 0.2% (3.7)% (4.8)% (11.5)% Average exchange rate (US$ per C$1.00)¹² $ 0.715 $ 0.723 $ 0.722 $ 0.726 $ 0.715 Average exchange rate (SEK per C$1.00)¹² 6.895 6.761 6.770 6.908 7.097 ⁸. Amortization includes amortization of certain capitalized major maintenance costs. ⁹. Adjusted to true-up preliminary ADD deposits to the Company’s current accrual rates. ¹ ⁰. Further information on cash flows may be found in the Company’s unaudited condensed consolidated interim financial statements. ¹¹. Consolidated ROIC is a non-IFRS financial measure. Refer to the "Non-IFRS financial measures" section for further details. ¹². Source – Bank of Canada (monthly average rate for the period). For the third quarter of 2026, the Company reported an operating loss of $76.6 million, compared to an operating income of $4.8 million for the second quarter of 2026. After taking into consideration adjusting and one-time items totalling $74.1 million, consisting of inventory valuation adjustments, asset write-down and impairment charges, as well as restructuring and closure costs, the Company’s adjusted EBITDA for the third quarter of 2026 was $98.1 million, compared to an adjusted EBITDA of $119.6 million for the previous quarter. These results reflected a slight decline in results for the lumber segment and improved earnings for the pulp and paper segment. For the lumber segment, the operating loss was $19.9 million for the third quarter of 2026, compared to the previous quarter’s operating income of $41.2 million. After taking into consideration adjusting and one-time items totalling $35.7 million, the lumber segment's adjusted EBITDA was $107.9 million, compared to a similarly adjusted EBITDA of $144.7 million in the prior quarter. These earnings reflected relatively stable results across all of the Company's operating regions. The quarter-over-quarter decrease was primarily driven by lower lumber shipment volumes in Europe, largely associated with regular summer production downtime, mitigated in part by higher shipment volumes in the US South and improved lumber unit sales realizations across all of the Company's operating regions. In July 2026, the Company announced the permanent closure of its Fox Creek sawmill in Fox Creek, Alberta, with operations winding down in September 2026. As a result of this announcement, the Company recognized an asset write-down and impairment charge of $31.8 million, as well as restructuring costs of $4.6 million, during the third quarter of 2026. 8
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For the pulp and paper segment, the operating loss was $44.6 million for the third quarter of 2026, compared to an operating loss of $23.1 million for the second quarter of 2026. After taking into consideration adjusting and one-time items totalling $38.4 million, the pulp and paper segment's adjusted EBITDA for the third quarter of 2026 was $1.5 million, compared to an adjusted EBITDA loss of $12.2 million for the second quarter of 2026. Included in the third quarter adjusted EBITDA of $1.5 million is another quarter of strong earnings from the Company's paper business, with EBITDA of $10.5 million in the current quarter, compared to $8.0 million in the previous quarter. Overall, the improved quarter-over-quarter results for the pulp and paper segment primarily reflected an increase in pulp and paper production, largely the result of the scheduled maintenance downtime completed in the prior period, partially offset by a slight decline in US-dollar NBSK pulp list prices to China. In July 2026, the Company announced the permanent closure of its Northwood NBSK pulp mill ("Northwood") in Prince George, BC. In connection with this closure, the Company recognized an asset write-down and impairment charge of $10.0 million and restructuring costs of $36.7 million in the third quarter of 2026. Northwood continues to operate into the fourth quarter of 2026 and is anticipated to complete an orderly wind-down and cease operations by the end of the year. Compared to the third quarter of 2025, adjusted EBITDA was up $111.8 million from an adjusted EBITDA loss of $13.7 million in the comparative period, primarily consisting of a $109.9 million increase in lumber segment results, combined with a $3.8 million increase in pulp and paper segment results. After accounting for adjusting and one-time items, the lumber segment's adjusted EBITDA in the third quarter of 2026 was $107.9 million, compared to a similarly adjusted EBITDA loss of $2.0 million in the third quarter of 2025. The year-over-year improvement reflected stronger earnings across all of the Company's operating regions. In North America, results benefited from higher Western Spruce/Pine/Fir ("Western SPF") and Southern Yellow Pine ("SYP") benchmark lumber prices, increased shipment volumes in the US South and, to a lesser extent, a 2% weaker Canadian dollar (versus the US-dollar). In Europe, higher production and shipment volumes combined with lower log costs contributed to improved results. The adjusted operating results for the pulp and paper segment increased by $3.8 million compared to the third quarter of 2025, primarily driven by an improvement in pulp unit manufacturing costs, coupled with the weaker Canadian dollar in the current period. These factors were moderated, to a degree, by a decline in US-dollar NBSK pulp list prices to both China and North America. An overview of the results by business segment for the third quarter of 2026 compared to the second quarter of 2026 and the third quarter of 2025 follows. 9
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Operating results by business segment. Lumber. Selected financial information and statistics – lumber. (millions of Canadian dollars, unless otherwise noted) Q3 2026 Q2 2026 YTD 2026 Q3 2025 YTD 2025 S a l e s ¹ ⁴ $ 1,141.9 $ 1,382.3 $ 3,717.0 $ 1,095.2 $ 3,518.0 R e p o r t e d o p e r a t i n g i n c o m e ( l o s s ) ¹ ⁴ $ (19.9) $ 41.2 $ (22.4) $ (182.2) $ (436.9) Adjusting and one-time items¹³ 35.7 15.5 31.2 92.1 292.9 Adjusted operating income (loss) before one-time items¹³ $ 15.8 $ 56.7 $ 8.8 $ (90.1) $ (144.0) Amortization 92.1 88.0 272.4 88.1 271.0 A d j u s t e d E B I T D A ( l o s s ) ¹ ³ ˒ ¹ ⁴ $ 107.9 $ 144.7 $ 281.2 $ (2.0) $ 127.0 A v e r a g e W e s t e r n S P F 2 x 4 # 2 & B t r l u m b e r p r i c e i n U S $ ¹ ⁵ $ 487 $ 488 $ 479 $ 477 $ 480 A v e r a g e W e s t e r n S P F 2 x 4 # 2 & B t r l u m b e r p r i c e i n C d n $ ¹ ⁵ ˒ ¹ ⁷ $ 681 $ 675 $ 663 $ 657 $ 671 A v e r a g e S Y P 2 x 4 # 2 l u m b e r p r i c e i n U S $ ¹ ⁶ $ 495 $ 517 $ 502 $ 373 $ 434 A v e r a g e S Y P 2 x 4 # 2 l u m b e r p r i c e i n C d n $ ¹ ⁶ ˒ ¹ ⁷ $ 692 $ 715 $ 695 $ 514 $ 607 A v e r a g e S Y P 2 x 6 # 2 l u m b e r p r i c e i n U S $ ¹ ⁶ $ 415 $ 457 $ 432 $ 315 $ 348 A v e r a g e S Y P 2 x 6 # 2 l u m b e r p r i c e i n C d n $ ¹ ⁶ ˒ ¹ ⁷ $ 580 $ 632 $ 598 $ 434 $ 487 U S h o u s i n g s t a r t s ( t h o u s a n d u n i t s S A A R ) ¹ ⁸ 1,293 1,345 1,352 1,347 1,367 P r o d u c t i o n – W e s t e r n S P F l u m b e r ( M M f b m ) ¹ ⁹ 352 380 1,103 376 1,125 P r o d u c t i o n – S Y P l u m b e r ( M M f b m ) ¹ ⁹ 486 492 1,451 475 1,449 P r o d u c t i o n – E u r o p e a n l u m b e r ( M M f b m ) ¹ ⁴ ˒ ¹ ⁹ 328 415 1,111 311 1,055 S h i p m e n t s – W e s t e r n S P F l u m b e r ( M M f b m ) ² ⁰ 371 388 1,111 379 1,225 S h i p m e n t s – S Y P l u m b e r ( M M f b m ) ² ⁰ 513 446 1,403 488 1,443 S h i p m e n t s – E u r o p e a n l u m b e r ( M M f b m ) ² ⁰ 400 518 1,379 352 1,204 ¹³. EBITDA is calculated for the Company as operating income (loss) before amortization. EBITDA, adjusted EBITDA, adjusted operating income (loss) as well as adjusting and one-time items referenced throughout this interim MD&A are non-IFRS financial measures. Refer to the "Non-IFRS financial measures" section for further details. ¹ ⁴. Q3 2026 includes sales of $339.8 million, operating loss of $1.1 million, and adjusted EBITDA of $19.8 million from European operations (Q2 2026 – sales of $591.7 million, operating loss of $0.7 million, and adjusted EBITDA of $36.9 million; Q3 2025 – sales of $420.4 million, operating loss of $31.6 million, and adjusted EBITDA loss of $1.1 million). Sawmill production from European operations was 360 MMfbm in Q3 2026 (Q2 2026 – 486 MMfbm; Q3 2025 – 362 MMfbm). ¹ ⁵. Western SPF, per thousand board feet (Source – Random Lengths Publications, Inc.). ¹ ⁶. SYP, Eastside, per thousand board feet (Source – Random Lengths Publications, Inc.). ¹ ⁷. Average lumber prices in Canadian dollar ("Cdn") calculated as average price in US$ multiplied by the average exchange rate – Cdn$ per US$1.00 according to Bank of Canada monthly average for the period. ¹ ⁸. Source – US Census Bureau, seasonally adjusted annual rate ("SAAR"). ¹ ⁹. Planer production, excluding production of trim blocks. ² ⁰. Includes Canfor produced lumber, as well as lumber purchased for resale, remanufacture and engineered wood, excluding trim blocks, wholesale shipments and lumber sold on behalf of third parties. Excludes PinkWood I-joist shipments of 5.5 million lineal feet, as the unit of measurement is not directly comparable to lumber shipment volumes reported in MMfbm. Markets. Throughout the third quarter of 2026, North American lumber market conditions remained relatively consistent with the previous quarter. While underlying market fundamentals were generally stable, elevated mortgage rates and continued political and economic uncertainty weighed on demand. Customer purchasing activity remained cautious, with inventories maintained at lean levels. Against this backdrop, North American benchmark lumber prices generally experienced modest declines during the current quarter, while wider-width dimensions saw some positive momentum. Activity in the repair and remodeling sector remained broadly steady throughout the current quarter. US housing starts averaged 1,293,000 units on a seasonally adjusted basis for the current quarter, down 4% from the previous quarter, reflecting a 3% and 7% decline in single-family and multi-family starts, respectively. In Canada, housing starts averaged 246,000 units on a seasonally adjusted basis in the third quarter of 2026, down 4% from the previous quarter, as an increase in single-family starts was more than offset by reduced construction of multi-family units, particularly in major urban centers. Offshore lumber market conditions in Asia continued to face pressure throughout the third quarter of 2026. In Japan, pricing was relatively stable; however, softwood lumber imports declined amid weak domestic demand and continued substitution toward domestic species. In China, persistent weakness in residential construction and real estate activity continued to dampen lumber demand. 10
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European lumber markets improved slightly through the current quarter. Pricing in Central Europe remained relatively steady, while Northern Europe strengthened modestly, benefiting from favourable weather and improved demand. In the United Kingdom (“UK”), however, subdued construction activity and ample supply weighed on pricing. In the Middle East and North Africa (“MENA”), lumber demand and pricing were stable through the current quarter, notwithstanding ongoing geopolitical tensions in the region. Sales. Sales revenues for the lumber segment in the third quarter of 2026 were $1,141.9 million, a decrease of $240.4 million compared to the previous quarter. The 17% decline primarily reflected lower lumber shipment volumes in Europe and, to a lesser extent, Western Canada. These factors were mitigated in part by improved lumber unit sales realizations across all of the Company's operating regions, combined with higher shipment volumes in the US South and, to a lesser extent, a 1% weaker Canadian dollar (versus the US-dollar). Compared to the third quarter of 2025, sales revenues increased $46.7 million, or 4%, principally driven by a significant uplift in SYP lumber unit sales realizations, coupled with a 14% and 5% increase in shipment volumes in Europe and the US South, respectively, and to a lesser extent, a 2% weaker Canadian dollar (versus the US-dollar). These positive factors were offset in part by lower Western SPF and European lumber unit sales realizations quarter-over-quarter, and a 2% reduction in shipment volumes in Western Canada. Total lumber shipments, at 1.28 billion board feet, were 5% lower than the previous quarter, primarily reflecting a 23% decrease in European lumber shipments and a 4% decline in Western SPF shipments, both tied to reduced production in the current quarter. These declines were largely offset by a 15% increase in SYP shipment volumes, largely attributable to an inventory drawdown during the current period and adequate trucking capacity in the region following constraints experienced in the previous quarter. Compared to the third quarter of 2025, total lumber shipments increased by 5%, mainly driven by higher European and to a lesser extent, SYP lumber shipments, offset in part by lower Western SPF shipments associated with reduced production volumes quarter- over-quarter. In the US South, the uplift in SYP lumber shipments largely reflected the ongoing operational benefits from investments at the Urbana and Axis sawmills, partially offset by the impact of the Darlington and Estill sawmill closures in the prior year. The significant increase in European lumber shipments was primarily attributable to the full-quarter contribution from the AB Karl Hedin Sågverk facilities ("Hedin"), acquired in the latter part of 2025. The average North American Random Lengths Western SPF 2x4 #2&Btr price began the quarter at US$500 per Mfbm and remained relatively flat through mid-July, before increasing to a quarterly high of US$516 per Mfbm late in the month. Prices subsequently trended downward from mid-August through the remainder of the quarter, ending the period at a low of US$460 per Mfbm. For the current quarter overall, the Western SPF 2x4 #2&Btr benchmark price averaged US$487 per Mfbm, broadly in line with the previous quarter. In contrast to the relatively flat average Western SPF 2x4 #2&Btr price, the Company’s Western SPF lumber unit sales realizations increased moderately over the comparative period, primarily driven by significant pricing gains for most wider-width dimension products and, to a lesser extent, a 1% weaker Canadian dollar (versus the US-dollar). These positive factors were offset in part by lower unit sales realizations to China quarter-over-quarter. The average North American SYP East 2x4 #2 price opened the quarter at US$550 per Mfbm and was relatively stable through most of July, before declining sharply in August to a low of US$447 per Mfbm. Pricing recovered modestly over the balance of the quarter, closing the period at US$503 per Mfbm. Overall, the SYP East 2x4 #2 price averaged US$495 per Mfbm in the third quarter of 2026, down US$22 per Mfbm, or 4%, from the previous quarter. The SYP East 2x6 #2 price averaged US$415 per Mfbm for the current quarter, down US$42 per Mfbm, or 9%, from the prior period. Despite these declines in SYP lumber benchmark prices, the Company’s SYP lumber unit sales realizations increased slightly quarter-over-quarter, primarily reflecting favourable lumber unit sales realizations for certain wider-width dimensions. The Company’s European lumber unit sales realizations were slightly higher than in the previous quarter, principally reflecting improved lumber market pricing in the region, partially offset by the impact of a 2% stronger Canadian dollar (versus the Swedish Krona ("SEK")). Compared to the third quarter of 2025, the average North American Random Lengths Western SPF 2x4 #2&Btr price increased by US$10 per Mfbm, or 2%. However, the Company’s Western SPF lumber unit sales realizations were slightly lower than in the comparative period, as the marginal uplift in benchmark pricing, combined with more pronounced pricing increases for certain wider- width products, was more than offset by unfavourable offshore unit sales realizations. In the US South, a significant increase in SYP lumber unit sales realizations was primarily attributable to a US$122 per Mfbm, or 33%, uptick in the average North American SYP East 2x4 #2 price, a US$100 per Mfbm, or 32%, increase in the average SYP East 2x6 #2 average price, and significant pricing gains for wider-width SYP products. The Company’s European lumber unit sales realizations were slightly lower than in the third quarter of 2025, largely reflecting moderate declines in regional market pricing quarter-over-quarter. 11
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Other revenues for the Company’s lumber segment (which are primarily comprised of residual fibre, pulp log and pellet sales, as well as the Company’s European operations’ other related revenues) were significantly lower than the previous quarter, mainly reflecting lower sales from the Company's European operations associated with regular seasonal summer downtime, combined with the impact of a 2% stronger Canadian dollar (versus the SEK). These factors were largely offset by higher engineered wood and log sales in North America and, to a lesser extent, the benefit of a 1% weaker Canadian dollar (versus the US-dollar). The increase in engineered wood sales was most notable in Western Canada, primarily attributable to the new PinkWood I-joist facility acquired at the beginning of the current quarter. Compared to the third quarter of 2025, other revenues decreased moderately, mainly due to lower residual fibre revenue from the Company's European operations, offset in part by the aforementioned increase in engineered wood sales in Western Canada. Operations. Total lumber production, at 1.17 billion board feet, was down 9% from the prior quarter, reflecting lower production across all operating regions. In the Company's European operations, production declined by 21%, primarily due to four weeks of regular seasonal summer downtime during the current quarter. In Western Canada, a 7% decrease in production largely reflected the wind down and permanent closure of the Fox Creek sawmill towards the end of the current period. In the US South, the 1% decline in production was mainly driven by capital-related downtime at the Company's Iron Mountain sawmill in the latter part of the current quarter. Compared to the third quarter of 2025, total lumber production was broadly comparable quarter-over-quarter, as reduced production in Western Canada following the wind down and permanent closure of the Fox Creek sawmill was more than offset by higher production in the Company's European and US South operations. In the US South, the 2% increase principally reflected ongoing operational benefits from investments at the Urbana and Axis sawmills, partially offset by the impact of the Darlington and Estill sawmill closures in the prior year. In Europe, the 5% uplift in production was primarily attributable to the incremental production from the Hedin acquisition in the latter part of 2025. Lumber unit manufacturing and product costs were broadly in line with the previous quarter, as higher per-unit conversion costs were largely offset by lower log costs. The former principally reflected reduced production across all of the Company's operating regions combined with a marginal increase in spend, most notably in the US South. Log costs were slightly lower quarter-over-quarter, mainly driven by modest declines in European log prices and the benefit of a 2% stronger Canadian dollar (versus the SEK), partially offset by higher market-driven log costs in Western Canada. Compared to the third quarter of 2025, lumber unit manufacturing and product costs decreased slightly, primarily driven by lower log costs, offset in part by a modest uptick in per-unit conversion costs. The latter largely reflected higher spending in the Company's European and US South operations as well as the impact of lower production in Western Canada. These factors were moderated, to a degree, by the benefit of higher production in both Europe and the US South. The decrease in log costs was driven by lower log prices across all operating regions, most notably in Europe. 12
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Pulp and paper. Selected financial information and statistics – pulp and paper. (millions of Canadian dollars, unless otherwise noted) Q3 2026 Q2 2026 YTD 2026 Q3 2025 YTD 2025 Sales $ 142.9 $ 144.1 $ 453.3 $ 164.6 $ 538.7 Reported operating loss $ (44.6) $ (23.1) $ (83.9) $ (16.0) $ (10.5) Adjusting and one-time items²¹ 38.4 3.3 41.7 4.9 7.8 Adjusted operating loss before one-time items²¹ $ (6.2) $ (19.8) $ (42.2) $ (11.1) $ (2.7) Amortization²² 7.7 7.6 23.2 8.8 28.1 Adjusted EBITDA (loss)²¹˒²² $ 1.5 $ (12.2) $ (19.0) $ (2.3) $ 25.4 Average NBSK pulp list price delivered to China – US$²³ $ 645 $ 658 $ 663 $ 690 $ 739 Average NBSK pulp list price delivered to China – Cdn$²³ $ 902 $ 910 $ 918 $ 950 $ 1,034 Production – pulp (000 mt) 103 85 291 107 313 Production – paper (000 mt) 33 29 90 30 99 Shipments – pulp (000 mt) 90 96 303 105 319 Shipments – paper (000 mt) 34 30 94 32 100 ²¹. EBITDA is calculated for the Company as operating income (loss) before amortization. EBITDA, adjusted EBITDA, adjusted operating income (loss) as well as adjusting and one-time items referenced throughout this interim MD&A are non-IFRS financial measures. Refer to the "Non-IFRS financial measures" section for further details. ²². Amortization includes amortization of certain capitalized major maintenance costs. ²³. Per tonne, NBSK pulp list net price delivered to China (as published by Resource Information Systems, Inc. ("RISI")); Average NBSK pulp list net price delivered to China in Cdn$ calculated as average NBSK pulp list net price delivered to China – US$ multiplied by the average exchange rate – Cdn$ per US$1.00 according to Bank of Canada monthly average rate for the period. Markets. Global softwood pulp market conditions remained relatively subdued during the third quarter of 2026, as a structural shift in pulp market fundamentals, combined with soft demand and elevated producer inventory levels continued to weigh on pricing. Supply constraints provided some relief, moderating further price declines during the current quarter. Consequently, the US-dollar NBSK pulp list prices to China, the world’s largest pulp consumer, averaged US$645 per tonne, down US$13 per tonne, or 2%, compared to the previous quarter. Compared to the same period in the prior year, pulp list prices to China were down US$45 per tonne, or 7%. In North America, market conditions were generally unchanged quarter-over-quarter. Average US-dollar NBSK pulp list prices to North America were US$1,570 per tonne (before discounts) for the current quarter, broadly in line with the prior quarter, but down US$130 per tonne, or 8%, compared to the same period in the previous year. Global softwood pulp producer inventories remained elevated during the third quarter of 2026, ending August at 46 days of supply, two days higher than at the end of June 2026 and at the upper end of the balanced range² ⁴. Typically, market conditions are considered balanced when inventories are in the 39-47 days of supply range² ⁴. Conversely, global kraft paper demand continued to maintain its positive momentum in the third quarter of 2026, building on the strength seen in the prior quarter. In North America, demand benefited from growth in paper-based packaging applications, supported by higher plastic raw material costs, the ongoing substitution of plastic-based products, and stronger food packaging demand. Sales. Pulp shipments for the third quarter of 2026 totaled 90,000 tonnes, down 6,000 tonnes, or 6%, from the previous quarter, as the benefit of a 21% increase in pulp production in the current period, largely tied to the scheduled maintenance outage at the Company's Intercontinental NBSK pulp mill ("Intercon") in the previous quarter, was more than offset by a rebuild in inventory during the current period following a notable drawdown in the prior quarter. Compared to the third quarter of 2025, pulp shipments were down 15,000 tonnes, or 14%, principally attributable to a 4% decline in pulp production in the current period. ² ⁴. World 20 data is based on twenty producing countries representing 80% of world chemical market pulp capacity and is based on information compiled and prepared by the Pulp and Paper Products Council (“PPPC”). The upper and lower limits of the balanced range are the average level plus or minus one standard deviation, based on the last 60 data points (i.e. last five years). 13
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The Company's average NBSK pulp unit sales realizations in the current quarter experienced a slight decline relative to the previous quarter, principally reflecting US-dollar NBSK pricing pressure in China, slightly offset by a 1 cent, or 1%, weaker Canadian dollar. Compared to the third quarter of 2025, the Company's average NBSK pulp unit sales realizations saw a significant decline, largely associated with the aforementioned 7% and 8% drop in US-dollar NBSK pulp list prices to China and North America, respectively, offset in part by a 1 cent, or 2%, weaker Canadian dollar. Total paper shipments in the third quarter of 2026 were 34,000 tonnes, up 4,000 tonnes from the previous quarter, and 2,000 tonnes from the third quarter of 2025, principally tied to increased production in the current quarter, combined with the timing of shipments around quarter-end. Paper unit sales realizations in the third quarter of 2026 were broadly in line with the previous quarter and the third quarter of 2025. Operations. Pulp production totaled 103,000 tonnes for the third quarter of 2026, up 18,000 tonnes, or 21%, compared to the previous quarter, largely reflecting the impact of a planned maintenance outage at Intercon in the second quarter of 2026. Relative to the third quarter of 2025, pulp production declined by 4,000 tonnes, or 4%. This reduction was largely tied to operational reliability challenges at Intercon in the current quarter. Pulp unit manufacturing costs declined significantly compared to the prior quarter, largely driven by a decline in per-unit conversion costs, offset in part by slightly higher fibre costs. The notable decrease in per-unit conversion costs compared to the prior period was principally attributable to increased production, combined with reduced maintenance spend (timing-related), offset in part by higher energy costs. Compared to the third quarter of 2025, pulp unit manufacturing costs were substantially lower, primarily associated with a significant decrease in fibre costs, combined with a notable decline in per-unit conversion costs, mostly tied to reduced maintenance spend in the current period. Lower fibre costs were primarily driven by a decrease in the proportion of higher-cost whole log chips, combined with a decline in pricing for sawmill residual chips quarter-over-quarter. Paper production for the third quarter of 2026 was 33,000 tonnes, up 4,000 tonnes compared to the previous quarter, and up 3,000 tonnes compared to the third quarter of 2025, principally reflecting the impact of planned maintenance outages completed in both comparative quarters. Paper unit manufacturing costs were moderately lower than the second quarter of 2026, primarily driven by lower per-unit conversion costs period-over-period, combined with reduced slush pulp costs (correlated with the decline in Canadian dollar average NBSK pulp unit sales realizations). Compared to the third quarter of 2025, paper unit manufacturing costs saw a material decrease, primarily reflecting notably lower slush pulp costs, offset in part, by slightly higher per-unit conversion costs period-over-period. Unallocated items. Selected financial information. (millions of Canadian dollars) Q3 2026 Q2 2026 YTD 2026 Q3 2025 YTD 2025 Corporate costs $ (12.1) $ (13.3) $ (38.0) $ (10.1) $ (40.8) Finance expense, net $ (24.0) $ (31.2) $ (80.5) $ (36.5) $ (78.4) Foreign exchange gain (loss) on term debt, duty deposits loan and duty deposits recoverable, net $ 0.8 $ 1.9 $ 1.9 $ (2.3) $ 1.5 Gain (loss) on derivative financial instruments $ (2.3) $ (4.1) $ (9.6) $ 2.1 $ 12.6 Other income, net $ 1.7 $ 7.4 $ 10.4 $ 7.5 $ 5.6 Corporate costs were $12.1 million for the third quarter of 2026, down $1.2 million from the previous quarter, primarily reflecting lower consulting fees and reduced legal costs associated with the softwood lumber dispute. Compared to the same quarter in the prior year, corporate costs were up $2.0 million, largely due to higher head office general administrative expenses. 14
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Net finance expense of $24.0 million for the third quarter of 2026 was $7.2 million lower than the previous quarter, principally attributable to higher accrued interest income on net duty deposits recoverable, combined with lower interest expense associated with the Company's operating loan facilities. In the third quarter of 2025, net finance expense of $36.5 million mainly consisted of interest expense on the duty deposit loan, combined with a decline in accrued interest income on recoverable duty deposits following the finalization of CVD and ADD rates for the sixth period of review ("POR6") and, to a lesser extent, interest expense related to operating loans and term debt facilities. In the third quarter of 2026, the Company reported a net foreign exchange gain of $0.8 million, as a $0.6 million loss on its US-dollar denominated duty deposit loan and net duty deposits recoverable was more than offset by a $1.4 million gain on its US-dollar term debt, tied to the slight strengthening of the Canadian dollar at the close of the current quarter compared to the end of June 2026 (refer to the "Liquidity and financial requirements" section for additional information). At times, the Company uses a variety of derivative financial instruments as partial economic hedges against unfavourable changes in lumber prices, energy costs, interest and foreign exchange rates. In the third quarter of 2026, the Company recorded a net loss of $2.3 million related to its derivative instruments, primarily reflecting realized and unrealized mark-to-market losses on SEK foreign exchange forward contracts, mitigated in part by gains on lumber futures contracts (both realized and unrealized). Other comprehensive income (loss). The following table summarizes Canfor’s other comprehensive income (loss) for the comparable periods: (millions of Canadian dollars) Q3 2026 Q2 2026 YTD 2026 Q3 2025 YTD 2025 Defined benefit plan actuarial gain (loss), net of tax $ (7.2) $ 6.1 $ (8.1) $ 4.0 $ 9.1 Foreign exchange translation of foreign operations, net of tax (17.6) 24.1 16.7 49.7 33.1 Other comprehensive income (loss), net of tax $ (24.8) $ 30.2 $ 8.6 $ 53.7 $ 42.2 In the third quarter of 2026, the Company recorded a loss of $9.9 million (before tax) in relation to the Company's net defined benefit obligations (comprised of defined benefit pension plans as well as other benefit plans), largely as a result of changes in demographic assumptions associated with mortality expectations. This compared to a gain of $8.3 million (before tax) recognized in the second quarter of 2026, principally reflecting a higher than anticipated return on plan assets. In the third quarter of 2025, the Company recorded a gain of $5.4 million (before tax), primarily driven by a higher than anticipated return on plan assets, offset to a degree by a 0.1% decrease in the discount rate used to value the net defined benefit obligations. In addition, the Company recorded an accounting loss of $17.6 million in the third quarter of 2026 related to foreign exchange differences for foreign operations principally due to the strengthening of the Canadian dollar relative to the SEK at the close of the current quarter and, to a lesser extent, a slightly stronger Canadian dollar relative to the US-dollar at the end of the period. This compared to a gain of $24.1 million in the second quarter of 2026 and $49.7 million in the third quarter of 2025. Summary of financial position. The following table summarizes Canfor’s cash flow and selected ratios and other key financial items for and as at the end of the following periods: (millions of Canadian dollars, except ratios) Q3 2026 Q2 2026 YTD 2026 Q3 2025 YTD 2025 I n c r e a s e ( d e c r e a s e ) i n c a s h a n d c a s h e q u i v a l e n t s ² ⁵ $ (81.7) $ 174.5 $ 21.4 $ 39.2 $ (120.4) Operating activities $ 94.7 $ 209.9 $ 227.5 $ 17.7 $ 10.9 Financing activities $ (56.0) $ (72.8) $ (23.2) $ 190.9 $ 188.7 Investing activities $ (120.4) $ 37.4 $ (182.9) $ (169.4) $ (320.0) Ratio of current assets to current liabilities 1.3 :1 1.3 :1 1.3 :1 1.6 :1 1.6 :1 N e t d e b t t o t o t a l c a p i t a l i z a t i o n ² ⁶ 22.1 % 19.9 % 22.1 % 17.4 % 17.4 % Cumulative duty deposits paid (excluding Section 232 tariffs) $ 1,253.4 $ 1,199.2 $ 1,253.4 $ 1,070.7 $ 1,070.7 ² ⁵. Increase (decrease) in cash and cash equivalents shown before foreign exchange translation on cash and cash equivalents. ² ⁶. Net debt to total capitalization is a non-IFRS financial measure. Refer to the "Non-IFRS financial measures" section for further details. 15
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Operating activities. Cash generated from operating activities was $94.7 million in the third quarter of 2026, compared to $209.9 million in the previous quarter and $17.7 million in the third quarter of 2025. The $115.2 million decrease from the prior quarter primarily reflected unfavourable movements in non-cash working capital balances and, to a lesser degree, lower cash earnings quarter-over-quarter. The former was principally due to a timing-related decrease in accounts payable and accrued liabilities in the current period. Compared to the third quarter of 2025, operating cash flows were up $77.0 million, largely driven by increased cash earnings, partially offset by unfavourable movements in non-cash working capital balances. Financing activities. Cash used for financing activities in the third quarter of 2026 was $56.0 million, compared to cash used of $72.8 million in the previous quarter and cash generated of $190.9 million in the third quarter of 2025. Financing activities in the current quarter primarily comprised a $31.0 million repayment of the Company's operating loan facilities (refer to the "Liquidity and financial requirements" section for further details), as well as interest and lease payments. In the second quarter of 2026, financing activities largely consisted of a $40.2 million repayment of the Company's operating loan facilities, combined with interest and lease payments. In the third quarter of 2025, financing activities principally included a net $127.9 million draw-down on the Company's operating loan facilities and $85.1 million proceeds from term debt, offset, to a degree, by lease and interest payments and share repurchases. Investing activities. Cash used for investing activities was $120.4 million for the current quarter, compared to cash generated of $37.4 million for the previous quarter and cash used of $169.4 million for the same quarter of 2025. Investing activities in the current quarter were mainly comprised of capital additions of $68.7 million and the acquisition of PinkWood Ltd. of $47.0 million, net of cash acquired. As mentioned, capital additions in the third quarter of 2026 were $68.7 million, up $22.7 million from the previous quarter and up $29.0 million compared to the third quarter of 2025. In the lumber segment, current quarter capital expenditures largely reflected ongoing capital investment at the Company’s Iron Mountain sawmill in Arkansas. Capital spend in the current period also included maintenance- of-business capital across all lumber operating regions. In the pulp and paper segment, capital expenditures were predominantly associated with maintenance-of-business capital spend. Acquisition of PinkWood Ltd. On July 3, 2026, Canfor completed the acquisition of PinkWood's I-joist operations for total preliminary consideration of $52.8 million, plus transaction and closing costs, and including estimated net working capital. PinkWood is located in Calgary, Alberta and is the largest producer of I-joists in Canada. This acquisition was funded by cash on hand. Additional details about the acquisition are provided under Note 15 of Canfor's condensed consolidated interim financial statements. Liquidity and financial requirements. Operating loans. Operating loans – Consolidated. At September 30, 2026, on a consolidated basis, including Vida, the Company had cash and cash equivalents of $148.9 million, with $371.8 million drawn on its operating loans and facilities, and an additional $73.6 million reserved for several standby letters of credit. At the end of the quarter, the Company had available and undrawn operating loan facilities of $963.0 million. Operating loans – Canfor, excluding Vida. At September 30, 2026, Canfor, excluding Vida, had available operating loan facilities (including a revolving credit facility) totalling $1,295.1 million, with $368.6 million drawn on its operating loan and revolving credit facilities, and an additional $73.6 million reserved for several standby letters of credit, the majority of which related to unregistered pension plans, leaving $852.9 million available and undrawn at the end of the quarter. Interest is payable on Canfor’s committed operating and revolving loan facilities (excluding Vida) at floating rates based on the lenders’ Canadian prime rate, bankers’ acceptances, US-dollar base rate or US-dollar floating rate, plus a margin that varies with Canfor’s debt to total capitalization ratios. 16
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In the first quarter of 2026, Canfor executed amendments to certain terms of its credit facilities. These amendments included cancelling Canfor Pulp's standalone operating loan facility and including Canfor Pulp under Canfor’s operating loan facility. Canfor’s operating loan facility was increased from approximately $925.0 million to approximately $1.0 billion, and the maturity date of the operating loan facility was extended from June 26, 2029, to March 26, 2030. In addition, the maturity date of the Company's revolving credit facility was extended from June 28, 2026, to June 28, 2027. On June 28, 2027, any amounts drawn on the committed revolving credit facility will be converted to US-dollar denominated floating rate term debt, with a maturity date of June 28, 2030. Canfor's operating and revolving loan facilities may be drawn based on certain financial covenants, including a maximum net debt to total capitalization ratio of 50.0% and a minimum EBITDA interest coverage ratio test of two times, which becomes effective if the net debt to total capitalization ratio exceeds 42.5%. As at September 30, 2026, net debt to total capitalization was below the 42.5% threshold; therefore, Canfor was not subject to this test. Operating loans – Vida. At September 30, 2026, Vida had $3.2 million drawn on its $113.3 million operating loan facilities, leaving $110.1 million available and undrawn at the end of the quarter. Vida’s operating loan facilities are denominated in various currencies, with interest payable at fixed rates ranging from 3.0% to 7.2%. Vida also has separate overdraft facilities with fixed interest rates ranging from 2.7% to 7.8%. In the first quarter of 2026, Vida entered into a commitment with its lenders to replace its existing operating loan facilities. The terms of the new operating loan facilities include a SEK 435.0 million (approximately CAD $64.1 million based on foreign exchange rates when initially agreed upon) committed revolving overdraft facility as well as an additional uncommitted facility of SEK 400.0 million (approximately CAD $59.0 million based on foreign exchange rates when initially agreed upon). This facility is subject to an annual renewal and has a one-year term. Vida's operating loan facilities are subject to certain financial covenants, including a minimum equity ratio and a minimum inventory to interest-bearing loan ratio. As at September 30, 2026, Vida was fully in compliance with all covenants relating to its operating loan facilities. Term debt. Canfor’s term debt (excluding Vida) is unsecured. Vida's SEK term debt is secured by its property, plant and equipment and was renewed on September 30, 2026 for one year, with an option to renew for an additional four years. Vida’s Australian Dollar ("AUD") term debt is secured by its property, plant and equipment. Canfor’s term debt (excluding Vida) is subject to certain financial covenants, including a maximum net debt to total capitalization ratio. As at September 30, 2026, Canfor was fully in compliance with all covenants relating to its term debt. Vida’s term debt is subject to certain financial covenants, including a minimum equity ratio and a minimum inventory to interest-bearing loan ratio. As at September 30, 2026, Vida was fully in compliance with all covenants relating to its term debt. Substantially all borrowings of Vida are non-recourse to other entities within the Company. Debt covenants. Canfor and Vida remained in compliance with all covenants relating to their respective operating and revolving loan facilities as well as their term debt during the quarter. Net debt and liquidity. As at September 30, 2026, on a consolidated basis, including Vida, the Company had total net debt of $717.4 million, a $59.1 million increase from net debt of $658.3 million at the end of the previous quarter. Available liquidity of $1,111.9 million, decreased by $70.4 million from the previous quarter. The Company’s consolidated net debt to total capitalization at the end of the third quarter of 2026 was 22.1%. Debt in this calculation is comprised of the Company’s operating loan facilities, term debt as well as its duty deposit loan. 17
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Normal course issuer bid. On March 19, 2026, the Company announced that it had received regulatory approval for a renewal of its normal course issuer bid whereby it can purchase for cancellation up to 5,821,442 common shares, or approximately 5% of its issued and outstanding common shares as at March 16, 2026. The renewed normal course issuer bid is set to expire on March 22, 2027. The Company did not repurchase any shares under its normal course issuer bid during the three and nine months ended September 30, 2026, but did receive a $0.5 million (US$0.4 million) share tax refund relating to prior years. Shares outstanding. As at September 30, 2026, and November 4, 2026 there were 117,341,063 common shares of the Company outstanding. Canfor’s ownership interest in Vida was 77.0%. Duties and tariffs. In 2016, a petition was filed by the US Lumber Coalition to the US Department of Commerce (“DOC”) and the US International Trade Commission ("ITC") alleging certain subsidies and administered fees below the fair market value of timber that favour Canadian lumber producers. On January 1, 2026, the Company moved into the ninth period of review ("POR9"), which is based on sales and cost data in 2026. Consistent with prior periods of review, the Company was unable to estimate an applicable CVD rate separate from the US DOC's cash deposit rate. Despite cash deposits being made in 2026 at rates determined by the DOC, the final liability associated with duties is not determined until the completion of administrative reviews performed by the DOC for these periods. Subsequent to quarter end, in October 2026, the DOC announced the final results for the POR7 which indicated that the Company's final CVD rate for 2024 was 14.11% and the final ADD rate was 17.00%. As a result of this finalization, an expense of $45.9 million (US$32.8 million) will be recognized in the Company's condensed consolidated interim financial statements in the fourth quarter of 2026, to reflect the difference between the combined accrual rate of 23.36% from January to July 2024 and 28.14% for August to December 2024, and the DOC's final combined rate for POR7 of 31.11%. In addition, the Company's current combined cash deposit rate of 47.59% has been reset to the DOC rates for POR7 of 31.11%. Canfor will continue to reassess the ADD accrual estimate at each quarter-end, applying the DOC’s methodology to updated sales and cost data as this becomes available. Quarterly revisions to the ADD rate may result in a material adjustment to the condensed consolidated interim statement of income (loss) while the Administrative Reviews are taking place. Changes to the DOC’s existing CVD and ADD rates during the course of each administrative review may also result in material adjustments to the condensed consolidated interim statement of income (loss). Canfor and other Canadian forest product companies, the Federal Government and Canadian Provincial Governments continue to categorically deny the US allegations and strongly disagree with the current CVD and ADD determinations made by the DOC. Canada has proceeded with legal challenges under the Canada-United States-Mexico Agreement ("CUSMA") and through the World Trade Organization, where Canadian litigation has proven successful in the past. Outlook. Lumber. Looking ahead, North American lumber markets are anticipated to soften through the fourth quarter of 2026, as a seasonal slowdown in construction activity and weaker underlying demand are projected to weigh on North American benchmark lumber prices. Elevated mortgage rates and affordability challenges are anticipated to persist into 2027, while cautious purchasing behaviour continues to constrain demand. However, lower softwood lumber duty rates, effective mid-October, are projected to partially mitigate the impact of weaker Western SPF pricing on lumber unit sales realizations through the remainder of the year. In Asia, modest improvements in Japanese lumber demand and pricing are forecast for the fourth quarter of 2026 as delayed projects advance and manufacturing activity accelerates. Demand in China is anticipated to remain subdued amid continued weakness in residential construction activity. 18
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In Europe, lumber market conditions are projected to soften through the fourth quarter of 2026, with regional pricing forecast to modestly decline. Pricing pressure in the UK is anticipated to persist and extend into Central Europe, while market conditions in Northern Europe and MENA are projected to remain relatively stable. Pulp and paper. Looking ahead, global softwood kraft pulp market conditions are anticipated to remain subdued through the balance of the year. The ongoing structural shift in pulp market fundamentals experienced throughout 2026 is projected to persist, as additional pulp production capacity continues to enter the market. These factors, coupled with relatively soft demand, are forecast to keep market conditions challenging. Ongoing economic and geopolitical uncertainty is projected to continue to constrain purchasing activity, keeping producer inventory levels elevated and limiting near-term price recovery. However, recent and potential further supply reductions may provide some pricing relief. Demand for bleached kraft paper is anticipated to remain stable through the fourth quarter of 2026, both globally and in North American markets, supported by continued growth in paper-based packaging applications. Results in the fourth quarter of 2026 will reflect the closure of the Company's Northwood pulp mill, including the associated impact on pulp production, shipments and costs. No major maintenance outages are scheduled at the Company's facilities through the balance of 2026. Critical accounting estimates. The preparation of financial statements in conformity with IFRS requires Management to make estimates and assumptions that affect the amounts recorded in the financial statements. On an ongoing basis, Management reviews its estimates, including those related to useful lives for amortization, impairment of long-lived assets, certain receivables, pension and other employee future benefit plans, asset retirement and deferred reforestation obligations, and the determination of ADD expensed and recorded as recoverable based upon currently available information. While it is reasonably possible that circumstances may arise which cause actual results to differ from these estimates, Management does not believe it is likely that any such differences will materially affect the Company’s financial condition, other than the possibility of material effects to the income statement from the Company’s estimated ADD net duty deposits recoverable as discussed in Notes 5 and 13 of the condensed consolidated interim financial statements. Internal controls over financial reporting. During the quarter ended September 30, 2026, there were no changes in the Company’s internal controls over financial reporting that materially affected, or would be reasonably likely to materially affect, such controls. Risks and uncertainties. A comprehensive discussion of risks and uncertainties is included in the Company’s 2025 annual statutory reports which are available on canfor.com or www.sedarplus.ca. Canfor continues to monitor geopolitical developments, including ongoing tensions in the Middle East, for their potential impact on global trade flows, transportation networks, energy markets and inflationary pressures, all of which could adversely affect the Company’s financial results. In addition, the Company continues to monitor the trade situation between Canada and Europe, into the US, as tariffs or potential tariffs could impact the Company’s financial results. Please see the Company’s annual disclosures referenced above for further information. In addition to exposure to changes in product prices and foreign exchange, the Company’s financial results are impacted by seasonal factors such as weather and building activity. Adverse weather conditions, as well as forest fires, can cause logging curtailments, which can affect the supply of raw materials to sawmills and pulp mills. Market demand also varies seasonally to some degree. For example, building activity and repair and renovation work, which affects demand for lumber products, is generally stronger in the spring and fall months. Shipment volumes are affected by these factors as well as by global supply chain networks and demand conditions. Net income (loss) is also impacted by fluctuations in Canadian dollar exchange rates, and the revaluation to the period end rate of US-dollar and SEK denominated working capital balances, US-dollar and SEK denominated debt and revaluation of outstanding derivative financial instruments. 19
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Selected quarterly financial information. (millions of Canadian dollars) Q3 2026 Q2 2026 Q1 2026 Q4 2025 Q3 2025 Q2 2025 Q1 2025 Q4 2024 Sales and income (loss) Sales $ 1,284.8 $ 1,526.4 $ 1,359.1 $ 1,282.3 $ 1,259.8 $ 1,379.4 $ 1,417.5 $ 1,285.7 E B I T D A ( l o s s ) ² ⁷ $ 24.0 $ 100.8 $ 28.5 $ (306.6) $ (110.7) $ (149.0) $ 72.6 $ 52.7 Operating income (loss) $ (76.6) $ 4.8 $ (72.5) $ (415.9) $ (208.3) $ (251.4) $ (28.5) $ (45.9) Net loss $ (89.0) $ (19.0) $ (83.6) $ (460.5) $ (184.1) $ (203.0) $ (26.0) $ (62.2) Shareholder net loss $ (88.2) $ (18.5) $ (72.1) $ (390.5) $ (172.4) $ (202.8) $ (31.0) $ (63.3) Per common share (Canadian dollars) Shareholder net loss - basic and diluted $ (0.75) $ (0.16) $ (0.62) $ (3.35) $ (1.48) $ (1.71) $ (0.26) $ (0.53) B o o k v a l u e ² ⁸ $ 19.87 $ 20.86 $ 20.79 $ 21.53 $ 24.98 $ 25.98 $ 28.18 $ 27.97 Statistics L u m b e r s h i p m e n t s ( M M f b m ) ² ⁹ 1,284 1,352 1,257 1,331 1,219 1,387 1,266 1,270 Pulp shipments (000 mt) 90 96 117 90 105 102 112 97 Average exchange rate - US$/Cdn$ $ 0.715 $ 0.723 $ 0.729 $ 0.717 $ 0.726 $ 0.723 $ 0.697 $ 0.715 Average exchange rate - SEK/Cdn$ 6.895 6.761 6.658 6.748 6.908 6.980 7.426 7.708 Average Western SPF 2x4 #2&Btr lumber price (US) $ 487 $ 488 $ 463 $ 422 $ 477 $ 471 $ 492 $ 435 Average SYP (East) 2x4 #2&Btr lumber price (US) $ 495 $ 517 $ 495 $ 368 $ 373 $ 481 $ 448 $ 424 Average SYP (East) 2x6 #2&Btr lumber price (US) $ 415 $ 457 $ 425 $ 345 $ 315 $ 325 $ 404 $ 367 Average NBSK pulp list price delivered to China (US) $ 645 $ 658 $ 685 $ 671 $ 690 $ 734 $ 793 $ 767 ² ⁷. EBITDA is calculated for the Company as operating income (loss) before amortization. Amortization includes amortization of certain capitalized major maintenance costs. ² ⁸. Book value per common share is equal to shareholders’ equity at the end of the period, divided by the number of common shares outstanding at the end of the period. ² ⁹. Includes Canfor produced lumber, as well as lumber purchased for resale, remanufacture and engineered wood, excluding trim blocks, wholesale shipments and lumber sold on behalf of third parties. Excludes PinkWood I-joist shipments of 5.5 million lineal feet, as the unit of measurement is not directly comparable to lumber shipment volumes reported in MMfbm. Other factors that impact the comparability of the quarters are noted below: After-tax impact, net of non-controlling interests (millions of Canadian dollars, except per share amounts) Q3 2026 Q2 2026 Q1 2026 Q4 2025 Q3 2025 Q2 2025 Q1 2025 Q4 2024 Shareholder net loss, as reported $ (88.2) $ (18.5) $ (72.1) $ (390.5) $ (172.4) $ (202.8) $ (31.0) $ (63.3) Foreign exchange (gain) loss on term debt (1.4) (7.9) (3.4) 3.4 (3.4) 7.3 1.2 (2.7) Foreign exchange (gain) loss on duty deposits loan 1.1 7.3 4.7 (5.4) 6.2 (14.7) (2.5) 21.3 (Gain) loss on derivative financial instruments 1.2 2.6 2.2 (0.4) (1.6) (0.7) (5.8) 4.8 Asset write-downs and impairments, net of tax 30.7 10.9 – 250.6 – 143.9 – – Net impact of above items $ 31.6 $ 12.9 $ 3.5 $ 248.2 $ 1.2 $ 135.8 $ (7.1) $ 23.4 A d j u s t e d s h a r e h o l d e r n e t l o s s ³ ⁰ $ (56.6) $ (5.6) $ (68.6) $ (142.3) $ (171.2) $ (67.0) $ (38.1) $ (39.9) Shareholder net loss per share (EPS), as reported $ (0.75) $ (0.16) $ (0.62) $ (3.35) $ (1.48) $ (1.71) $ (0.26) $ (0.53) Net impact of above items per share 0.27 0.11 0.03 2.13 0.01 1.15 (0.06) 0.20 A d j u s t e d s h a r e h o l d e r n e t l o s s p e r s h a r e ³ ⁰ $ (0.48) $ (0.05) $ (0.59) $ (1.22) $ (1.47) $ (0.56) $ (0.32) $ (0.33) ³ ⁰. Adjusted shareholder net loss is a non-IFRS financial measure. Refer to the "Non-IFRS financial measures" section for further details. 20
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Non-IFRS financial measures. Throughout this interim MD&A, reference is made to certain non-IFRS financial measures which are used to evaluate the Company’s performance but are not generally accepted under IFRS. The following table provides a reconciliation of these non-IFRS financial measures to figures reported in the Company’s condensed consolidated interim financial statements: (millions of Canadian dollars) Q3 2026 Q2 2026 YTD 2026 Q3 2025 YTD 2025 Reported operating income (loss) $ (76.6) $ 4.8 $ (144.3) $ (208.3) $ (488.2) Asset write-downs and impairments - lumber segment³² 31.8 13.7 45.5 – 188.6 Asset write-down and impairment - pulp segment³³ 10.0 – 10.0 – – Inventory write-down (recovery), net³⁴ (9.0) (3.7) (32.7) 19.8 28.2 Adjusted operating income (loss) $ (43.8) $ 14.8 $ (121.5) $ (188.5) $ (271.4) One-time items - lumber segment Restructuring and closure costs³⁵ 4.6 8.8 13.4 – 6.7 Duty expense related to finalized rates³⁶ – – – 77.2 77.2 One-time item - pulp segment Restructuring and closure costs³⁵ 36.7 – 36.7 – – Adjusted operating income (loss) before one-time items $ (2.5) $ 23.6 $ (71.4) $ (111.3) $ (187.5) Amortization 100.6 96.0 297.6 97.6 301.1 Adjusted EBITDA (loss)³¹ $ 98.1 $ 119.6 $ 226.2 $ (13.7) $ 113.6 ³¹. EBITDA is calculated for the Company as operating income (loss) before amortization. ³². For the lumber segment, an asset write-down and impairment charge totalling $31.8 million was recognized in Q3 2026 related to the permanent closure of the Company's Fox Creek sawmill (Q2 2026 - $13.7 million related to the permanent closures of Urshult and Orrefors sawmills in Europe; Q3 2025 - no asset write-down and impairment charge was recognized). ³³. For the pulp and paper segment, an asset write-down and impairment charge totalling $10.0 million was recorded in Q3 2026 related to the permanent closure of the Company's Northwood pulp mill (Q2 2026 and Q3 2025 - no asset write-down and impairment charge was recognized). ³⁴. For the lumber segment, a $0.7 million net reversal of a previously recognized inventory write-down was recorded in Q3 2026 (Q2 2026 - $7.0 million net reversal of a previously recognized inventory write-down, Q3 2025 - $14.9 million net inventory write-down expense). For the pulp and paper segment, an $8.3 million net reversal of a previously recognized inventory write-down was recognized in Q3 2026 (Q2 2026 - $3.3 million net inventory write-down expense, Q3 2025 - $4.9 million net inventory write- down expense). ³⁵. For the lumber segment, restructuring and closure costs of $4.6 million were recognized in Q3 2026, primarily related to the permanent closure of the Fox Creek sawmill in Alberta (Q2 2026 - restructuring and closure costs of $8.8 million, related to the permanent closures of the Urshult and Orrefors sawmills in Europe; Q3 2025 - no restructuring and closure costs were recognized). For the pulp and paper segment, $36.7 million restructuring and closure costs were recognized in Q3 2026 related to the permanent closure of the Northwood pulp mill in British Columbia (Q2 2026 and Q3 2025 - no restructuring and closure costs were recognized). ³⁶. No corresponding adjustment was recognized in Q3 2026, as the final CVD and ADD rates applicable to the seventh period of review ("POR7") were finalized subsequent to quarter-end and an expense of $45.9 million (US$32.8 million) will be recognized in Q4 2026 (Q3 2025 - a net duty expense of $77.2 million (US$56.2 million) was recognized following the finalization of CVD and ADD rates applicable to POR6). (millions of Canadian dollars, except ratios) Q3 2026 Q2 2026 YTD 2026 Q3 2025 YTD 2025 Reported operating income (loss) $ (76.6) $ 4.8 $ (144.3) $ (208.3) $ (488.2) Realized (gain) loss on derivative financial instruments 0.4 1.8 2.8 (2.0) (5.6) Other income, net 1.7 7.4 10.4 7.5 5.6 Less: non-controlling interests 3.0 6.0 (0.5) (18.0) (26.7) Return (loss) $ (77.5) $ 8.0 $ (130.6) $ (184.8) $ (461.5) Average invested capital³⁷ $ 3,526.5 $ 3,608.6 $ 3,564.7 $ 3,833.8 $ 3,997.1 Return on invested capital (ROIC) (2.2)% 0.2% (3.7)% (4.8)% (11.5)% ³⁷. Average invested capital represents the average during the period of total assets excluding cash and cash equivalents and total liabilities excluding term debt, retirement benefit obligations, long-term deferred reforestation obligations, and deferred taxes, net of non-controlling interests. (millions of Canadian dollars, except ratios) As at September 30, 2026 As at December 31, 2025 As at September 30, 2025 Term debt $ 141.1 $ 154.9 $ 201.7 Duty deposits loan 353.4 333.8 338.7 Operating loans 371.8 307.4 289.0 Less: cash and cash equivalents 148.9 132.4 154.4 Net debt $ 717.4 $ 663.7 $ 675.0 Total equity $ 2,528.2 $ 2,724.2 $ 3,196.9 Total capitalization $ 3,245.6 $ 3,387.9 $ 3,871.9 Net debt to total capitalization 22.1% 19.6% 17.4% 21
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Canfor Corporation. Condensed Consolidated Balance Sheets (millions of Canadian dollars, unaudited) As at September 30, 2026 As at December 31, 2025 ASSETS Current assets Cash and cash equivalents $ 148.9 $ 132.4 Trade receivables 395.9 336.2 Other receivables 94.8 120.3 Income taxes recoverable 35.6 41.2 Inventories (Note 3) 879.9 955.5 Prepaid expenses and other 100.1 137.4 Total current assets 1,655.2 1,723.0 Property, plant and equipment 2,248.0 2,324.8 Right-of-use assets 125.4 125.5 Timber licenses 304.5 312.3 Goodwill and other intangible assets 266.2 237.6 Long-term investments and other (Note 5) 316.4 259.0 Total assets $ 4,915.7 $ 4,982.2 LIABILITIES Current liabilities Accounts payable and accrued liabilities $ 755.7 $ 706.8 Operating loans (Note 6(a)) 371.8 307.4 Current portion of deferred reforestation obligations 46.2 46.2 Current portion of term debt (Note 6(b)) 69.4 85.8 Current portion of lease obligations 36.4 34.8 Income taxes payable 6.7 9.0 Total current liabilities 1,286.2 1,190.0 Term debt (Note 6(b)) 71.7 69.1 Duty deposits loan 353.4 333.8 Retirement benefit obligations (Note 7) 130.1 129.8 Lease obligations 100.7 100.4 Deferred reforestation obligations 53.7 61.0 Other long-term liabilities 101.0 69.3 Put liability (Note 8) 138.5 135.5 Deferred income taxes, net 152.2 169.1 Total liabilities $ 2,387.5 $ 2,258.0 EQUITY Share capital $ 929.3 $ 918.5 Contributed surplus and other equity (106.4) (96.7) Retained earnings 1,275.8 1,467.8 Accumulated other comprehensive income 233.4 216.7 Total equity attributable to equity shareholders of the Company 2,332.1 2,506.3 Non-controlling interests 196.1 217.9 Total equity $ 2,528.2 $ 2,724.2 Total liabilities and equity $ 4,915.7 $ 4,982.2 Subsequent Event (Note 13) The accompanying notes are an integral part of these condensed consolidated interim financial statements. APPROVED BY THE BOARD Director, C. Yaremko Director, The Hon. J.R. Baird 22
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Canfor Corporation. Condensed Consolidated Statements of Income (Loss) 3 months ended September 30, 9 months ended September 30, (millions of Canadian dollars, except per share data, unaudited) 2026 2025 2026 2025 Sales $ 1,284.8 $ 1,259.8 $ 4,170.3 $ 4,056.7 Costs and expenses Manufacturing and product costs 938.7 1,097.9 3,192.9 3,341.9 Freight and other distribution costs 166.6 135.8 494.9 440.5 Duties and tariff expense, net (Note 13) 32.5 99.4 94.8 140.8 Amortization 100.6 97.6 297.6 301.1 Selling and administration costs 39.9 37.4 128.8 125.3 Restructuring costs (Note 14) 41.3 – 50.1 6.7 Asset write-downs and impairments (Note 14) 41.8 – 55.5 188.6 1,361.4 1,468.1 4,314.6 4,544.9 Operating loss (76.6) (208.3) (144.3) (488.2) Finance expense, net (24.0) (36.5) (80.5) (78.4) Foreign exchange gain (loss) on term debt 1.4 3.4 12.7 (5.1) Foreign exchange gain (loss) on duty deposits loan and duty deposits recoverable, net (0.6) (5.7) (10.8) 6.6 Gain (loss) on derivative financial instruments (Note 8) (2.3) 2.1 (9.6) 12.6 Other income, net 1.7 7.5 10.4 5.6 Net loss before income taxes (100.4) (237.5) (222.1) (546.9) Income tax recovery (Note 9) 11.4 53.4 30.5 133.8 Net loss $ (89.0) $ (184.1) $ (191.6) $ (413.1) Net loss attributable to: Equity shareholders of the Company $ (88.2) $ (172.4) $ (178.8) $ (406.2) Non-controlling interests (0.8) (11.7) (12.8) (6.9) Net loss $ (89.0) $ (184.1) $ (191.6) $ (413.1) Net loss per common share: (in Canadian dollars) Attributable to equity shareholders of the Company - Basic and diluted (Note 10) $ (0.75) $ (1.48) $ (1.53) $ (3.45) The accompanying notes are an integral part of these condensed consolidated interim financial statements. 23
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Canfor Corporation. Condensed Consolidated Statements of Other Comprehensive Income (Loss) 3 months ended September 30, 9 months ended September 30, (millions of Canadian dollars, unaudited) 2026 2025 2026 2025 Net loss $ (89.0) $ (184.1) $ (191.6) $ (413.1) Other comprehensive income (loss) Items that will not be reclassified subsequently to net income (loss): Defined benefit plan actuarial gains (losses), net (Note 7) (9.9) 5.4 (11.1) 12.4 Income tax recovery (expense) on defined benefit plan actuarial gains (losses), net (Note 9) 2.7 (1.4) 3.0 (3.3) (7.2) 4.0 (8.1) 9.1 Items that may be reclassified subsequently to net income (loss): Foreign exchange translation of foreign operations, net of tax (17.6) 49.7 16.7 33.1 Other comprehensive income (loss), net of tax (24.8) 53.7 8.6 42.2 Total comprehensive loss $ (113.8) $ (130.4) $ (183.0) $ (370.9) Total comprehensive loss attributable to: Equity shareholders of the Company $ (113.0) $ (119.2) $ (170.2) $ (365.2) Non-controlling interests (0.8) (11.2) (12.8) (5.7) Total comprehensive loss $ (113.8) $ (130.4) $ (183.0) $ (370.9) The accompanying notes are an integral part of these condensed consolidated interim financial statements. 24
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Canfor Corporation. Condensed Consolidated Statements of Changes in Equity 3 months ended September 30, 9 months ended September 30, (millions of Canadian dollars, unaudited) 2026 2025 2026 2025 Share capital Balance at beginning of period $ 929.3 $ 923.0 $ 918.5 $ 934.1 Share issuance (Note 4) – – 10.8 – Share purchases (Note 10) – (3.3) – (14.4) Balance at end of period $ 929.3 $ 919.7 $ 929.3 $ 919.7 Contributed surplus and other equity Balance at beginning of period $ (103.2) $ (93.4) $ (96.7) $ (87.6) Put liability (Note 8) (3.2) (3.1) (9.7) (8.9) Balance at end of period $ (106.4) $ (96.5) $ (106.4) $ (96.5) Retained earnings Balance at beginning of period $ 1,370.7 $ 2,028.9 $ 1,467.8 $ 2,267.5 Net loss attributable to equity shareholders of the Company (88.2) (172.4) (178.8) (406.2) Dissolution of non-controlling interests (Note 4) – 0.5 (5.6) 0.5 Defined benefit plan actuarial gains (losses), net of tax (7.2) 3.5 (8.1) 7.9 Share purchases (Note 10) 0.5 (2.7) 0.5 (11.9) Balance at end of period $ 1,275.8 $ 1,857.8 $ 1,275.8 $ 1,857.8 Accumulated other comprehensive income Balance at beginning of period $ 251.0 $ 181.2 $ 216.7 $ 197.8 Foreign exchange translation of foreign operations, net of tax (17.6) 49.7 16.7 33.1 Balance at end of period $ 233.4 $ 230.9 $ 233.4 $ 230.9 Total equity attributable to equity shareholders of the Company $ 2,332.1 $ 2,911.9 $ 2,332.1 $ 2,911.9 Non-controlling interests Balance at beginning of period $ 196.4 $ 276.2 $ 217.9 $ 272.0 Net loss attributable to non-controlling interests (0.8) (11.7) (12.8) (6.9) Defined benefit plan actuarial gains attributable to non- controlling interests, net of tax – 0.5 – 1.2 Contributions from non-controlling interests – 19.7 – 19.7 Dissolution of non-controlling interests (Note 4) – (0.5) (9.2) (0.5) Distributions from (to) non-controlling interests, net 0.5 0.8 0.2 (0.5) Balance at end of period $ 196.1 $ 285.0 $ 196.1 $ 285.0 Total equity $ 2,528.2 $ 3,196.9 $ 2,528.2 $ 3,196.9 The accompanying notes are an integral part of these condensed consolidated interim financial statements. 25
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Canfor Corporation. Condensed Consolidated Statements of Cash Flows 3 months ended September 30, 9 months ended September 30, (millions of Canadian dollars, unaudited) 2026 2025 2026 2025 Cash generated from (used in): Operating activities Net loss $ (89.0) $ (184.1) $ (191.6) $ (413.1) Items not affecting cash: Amortization 100.6 97.6 297.6 301.1 Income tax recovery (Note 9) (11.4) (53.4) (30.5) (133.8) Change in long-term portion of deferred reforestation obligations, net (21.6) (7.9) (8.6) 6.7 Foreign exchange (gain) loss on term debt (1.4) (3.4) (12.7) 5.1 Foreign exchange (gain) loss on duty deposits loan and duty deposits recoverable, net 0.6 5.7 10.8 (6.6) Duties paid (greater) less than accruals (Note 13) (31.5) 68.0 (75.9) 67.0 Changes in mark-to-market value of derivative financial instruments 1.7 (0.2) 6.7 (7.1) Employee future benefits expense 0.8 1.2 2.8 3.3 Finance expense, net 24.0 36.5 80.5 78.4 Restructuring costs (Note 14) 41.3 – 50.1 6.7 Asset write-downs and impairments (Note 14) 41.8 – 55.5 188.6 Other, net 3.0 0.5 (4.4) 1.7 Defined benefit plan contributions, net (1.4) (2.8) (6.0) (8.2) Income taxes received (paid), net (6.4) 4.7 (6.3) (16.9) 51.1 (37.6) 168.0 72.9 Net change in non-cash working capital (Note 11) 43.6 55.3 59.5 (62.0) 94.7 17.7 227.5 10.9 Financing activities Operating loan drawings (repayments), net (Note 6(a)) (31.0) 127.9 59.5 183.0 Changes in term debt, net (Note 6(b)) (3.9) 85.1 (12.4) 85.0 Payments of lease obligations (10.0) (8.4) (29.8) (28.3) Finance expenses paid (11.6) (8.5) (40.7) (24.3) Share purchases (Note 10) – (6.0) – (26.2) Distributions received from (paid to) non-controlling interests, net 0.5 0.8 0.2 (0.5) (56.0) 190.9 (23.2) 188.7 Investing activities Additions to property, plant and equipment and intangible assets (68.7) (39.7) (180.6) (212.7) Proceeds from the sale of property, plant and equipment and intangible assets 0.3 1.2 22.6 3.7 Acquisition of AB Karl Hedin Sågverk, net of cash acquired – (149.1) – (149.1) Acquisition of PinkWood Ltd., net of cash acquired (Note 15) (47.0) – (47.0) – Cash contribution from minority shareholders – 19.7 – 19.7 Sale (purchase) of long-term investments, net (Notes 5 and 8) 0.8 (3.0) 22.8 12.7 Interest income received 0.4 1.6 1.4 3.5 Cash consideration for the acquisition of Canfor Pulp's non- controlling interest (Note 4) – – (4.0) – Other, net (6.2) (0.1) 1.9 2.2 (120.4) (169.4) (182.9) (320.0) Foreign exchange gain (loss) on cash and cash equivalents (4.1) 2.3 (4.9) 15.5 Increase (decrease) in cash and cash equivalents* (85.8) 41.5 16.5 (104.9) Cash and cash equivalents at beginning of period* 234.7 112.9 132.4 259.3 Cash and cash equivalents at end of period* $ 148.9 $ 154.4 $ 148.9 $ 154.4 *Cash and cash equivalents include cash on hand less unpresented cheques. The accompanying notes are an integral part of these condensed consolidated interim financial statements. 26
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Canfor Corporation. Notes to the Condensed Consolidated Interim Financial Statements Three and nine months ended September 30, 2026 and 2025. 1. Basis of Preparation These condensed consolidated interim financial statements (the "financial statements") have been prepared in accordance with International Accounting Standards ("IAS") 34 Interim Financial Reporting, and include the accounts of Canfor Corporation and its subsidiaries, hereinafter referred to as "Canfor" or "the Company". Significant subsidiaries include Canfor Southern Pine, Inc. ("CSP"), entities related to Millar Western Forest Products Ltd. ("Millar Western"), and PinkWood Ltd. ("PinkWood"), acquired in July 2026, which are wholly owned, as well as Canfor Pulp Products Inc. ("Canfor Pulp", "CPPI") of which Canfor owned 54.8% until March 17, 2026 and 100% thereafter, and the Vida Group ("Vida") of which Canfor owned 77.0% at September 30, 2026 and November 4, 2026. These financial statements do not include all of the disclosures required by IFRS Accounting Standards ("IFRS") for annual financial statements. Additional disclosures relevant to the understanding of these financial statements, including the accounting policies applied, can be found in the Company’s Annual Report for the year ended December 31, 2025, available at www.canfor.com or www.sedarplus.ca. These financial statements were authorized for issue by the Company’s Board of Directors on November 4, 2026. New standards and interpretations not yet adopted. IFRS 18, Presentation and Disclosure in Financial Statements, is effective for annual reporting periods beginning on or after January 1, 2027 and will replace IAS 1, Presentation of Financial Statements. IFRS 18 introduces new requirements for the classification of income and expenses within operating, investing and financing categories, defined subtotals in the statement of profit or loss, enhanced aggregation and disaggregation of financial information, and disclosures relating to management-defined performance measures. The standard also includes amendments to the presentation of cash flows under IAS 7, Statement of Cash Flows. IFRS 18 will be applied retrospectively and while the Company is continuing to assess the impact of the standard, the effect on its financial statement presentation and disclosures is not anticipated to be material. 2. Seasonality of Operations Canfor’s financial results are impacted by seasonal factors such as weather and building activity. Adverse weather conditions such as forest fires, hurricanes and flooding, can cause logging curtailments which can affect the supply of raw materials to sawmills and pulp mills. Market demand also varies seasonally to some degree. Building activity and repair and renovation work, which affect demand for solid wood products, are generally stronger in the spring and fall months. Shipment volumes are affected by these factors as well as by global supply and demand conditions. 3. Inventories (millions of Canadian dollars, unaudited) As at September 30, 2026 As at December 31, 2025 Logs $ 114.5 $ 135.6 Finished products 610.3 633.7 Residual fibre 32.8 47.5 Materials and supplies¹ 122.3 138.7 $ 879.9 $ 955.5 1. Net of a $13.0 million impairment charge in 2026 (2025 – $13.2 million). The above inventory balances are stated at the lower of cost and net realizable value. For the three months ended September 30, 2026, a $0.7 million net reversal of a previously recognized inventory write-down was recognized for the lumber segment (nine months ended September 30, 2026 – $27.7 million net reversal). For the three months ended September 30, 2025, a $14.9 million net inventory write-down expense was recorded for the lumber segment (nine months ended September 30, 2025 – $20.4 million net inventory write-down expense). As a result of this remeasurement, combined with a net foreign exchange gain of $0.2 million for the three months ended September 30, 2026 (net foreign exchange gain of $0.3 million for the nine months ended September 30, 2026), (three and nine months ended September 30, 2025 – $0.3 million and $0.1 million net foreign exchange loss and gain, respectively), an inventory provision of $3.5 million has been recognized for logs and lumber as at September 30, 2026 (December 31, 2025 – provision of $31.5 million). 27
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For the three months ended September 30, 2026, an $8.3 million net reversal of a previously recognized inventory write-down was recognized for the pulp and paper segment (nine months ended September 30, 2026 – $5.0 million net reversal). For the three months ended September 30, 2025, a $4.9 million inventory write-down expense was recognized for the pulp and paper segment (nine months ended September 30, 2025 – $7.8 million inventory write-down expense). As at September 30, 2026, an inventory provision of $6.3 million has been recognized for the pulp and paper segment (December 31, 2025 – $11.3 million inventory provision). 4. Acquisition of Canfor Pulp's Non-Controlling Interest On March 17, 2026, the Company acquired the remaining non-controlling interest in CPPI, resulting in 100% ownership. Prior to the closing of the transaction, the Company held 35.8 million shares of Canfor Pulp, representing 54.8% of the outstanding common shares. Upon closing, the Company acquired the remaining 29.5 million shares, resulting in 100% ownership of Canfor Pulp. The aggregate consideration paid to former Canfor Pulp shareholders at closing consisted of approximately $4.0 million in cash and 912,217 in Canfor common shares. As control was retained, the transaction was accounted for as an equity transaction. The carrying amount of Canfor Pulp's net assets in the Company's consolidated financial statements at the date of the transaction was $20.4 million. (millions of Canadian dollars, unaudited) Carrying amount of non-controlling interest acquired ($20.4 million x 45.2%) $ 9.2 Less: Consideration paid to non-controlling interest 4.0 Canfor shares issued 10.8 A decrease in equity attributable to the shareholders of the Company $ (5.6) 5. Long-Term Investments and Other (millions of Canadian dollars, unaudited) As at September 30, 2026 As at December 31, 2025 Duty deposits recoverable, net (Note 13) $ 84.9 $ 27.6 Other deposits, loans, advances and long-term assets 29.2 35.2 Other investments 59.8 69.7 Retirement benefit surplus 13.9 25.4 Investment tax credit 1.6 1.3 Deferred income taxes, net 127.0 99.8 $ 316.4 $ 259.0 The duty deposits recoverable, net balance of $84.9 million represents US-dollar countervailing ("CVD") and anti-dumping duties ("ADD") and duty cash deposits paid in excess of the calculated expense accrued at September 30, 2026, including a net interest receivable balance of $20.2 million (December 31, 2025 – $30.7 million) (Note 13). Included in the net interest receivable balance of $20.2 million is $40.8 million in interest receivable from the US government on certain CVD and ADD related accounts receivable balances secured under the terms of the duty deposits loan related to the period from September 27, 2024 to September 30, 2026 and payable to Farallon Capital Management L.L.C. ("Farallon"). In the third quarter of 2026, the Company received $1.3 million (US$1.0 million) (nine months ended September 30, 2026 – $9.1 million (US$6.6 million)) from the US Department of Commerce ("DOC") as a partial refund of ADD for the first period of review (“POR1”) related to certain exports between August and December of 2017. These receipts reduced the duty deposits recoverable, net at September 30, 2026. During the three and nine months ended September 30, 2026, the Company sold and repurchased investments in certain funds, with net proceeds of $0.8 million and $22.8 million, respectively (three and nine months ended September 30, 2025 – net outlays and proceeds of $3.0 million and $12.7 million, respectively). These highly liquid investments with maturities exceeding one year were initially measured at cost and subsequently measured at fair value through net income (loss) and classified as Level 1 (Note 8). 28
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6. Operating Loans and Term Debt (a) Available Operating Loans Canfor (excluding Vida)² Available operating loans: Operating loan facility $ 1,001.4 $ 925.6 Revolving credit facility (US$150.0 million) 213.7 206.1 Facilities for letters of credit 80.0 80.0 Total operating loan facilities 1,295.1 1,211.7 Operating loan and revolving credit facilities drawn (368.6) (184.4) Letters of credit covered under operating loan facility (8.6) (2.7) Letters of credit covered under facilities for letters of credit (65.0) (44.1) Total available operating loan facilities – Canfor $ 852.9 $ 980.5 Vida Available operating loans: Operating loan facilities $ 72.4 $ 75.9 Overdraft facilities 40.9 35.2 Total operating loan facilities 113.3 111.1 Operating loan and overdraft facilities drawn (3.2) (4.0) Total available operating loan and overdraft facilities – Vida $ 110.1 $ 107.1 CPPI² Available operating loans: Operating loan facility $ – $ 160.0 Temporary minimum liquidity restriction – (10.0) Letters of credit – (6.2) Operating loan facility drawn – (119.0) Total available operating loan facility – CPPI $ – $ 24.8 Consolidated: Total operating loan facilities²˒³ $ 1,408.4 $ 1,472.8 Total operating loan facilities drawn $ (371.8) $ (307.4) Total letters of credit $ (73.6) $ (53.0) Total available operating loan facilities $ 963.0 $ 1,112.4 (millions of Canadian dollars, unaudited) As at September 30, 2026 As at December 31, 2025 ². On March 26, 2026, Canfor's credit facilities were amended to include CPPI's standalone facility. See further details below. ³. As at December 31, 2025, the total consolidated operating loan facility was adjusted for CPPI's temporary minimum liquidity restriction. Operating loans – Canfor, excluding Vida. Interest is payable on Canfor’s committed operating and revolving loan facilities (excluding Vida) at floating rates based on the lenders’ Canadian prime rate, bankers’ acceptances, US-dollar base rate or US-dollar floating rate, plus a margin that varies with Canfor’s debt to total capitalization ratios. In the first quarter of 2026, Canfor executed amendments to certain terms of its credit facilities. These amendments included cancelling CPPI’s standalone operating loan facility and including Canfor Pulp under Canfor’s operating loan facility. Canfor’s operating loan facility was increased from approximately $925.0 million to approximately $1.0 billion, and the maturity date of the operating loan facility was extended from June 26, 2029, to March 26, 2030. In addition, the maturity date of the Company's revolving credit facility was extended from June 28, 2026, to June 28, 2027. On June 28, 2027, any amounts drawn on the committed revolving credit facility will be converted to US-dollar denominated floating rate term debt, with a maturity date of June 28, 2030. All other terms, including pricing and covenants, are consistent with Canfor’s prior operating loan facilities. 29
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Canfor's operating and revolving loan facilities may be drawn based on certain financial covenants, including a maximum net debt to total capitalization ratio of 50.0% and a minimum earnings before interest, taxes, depreciation and amortization ("EBITDA") interest coverage ratio test of two times, which becomes effective if the net debt to total capitalization ratio exceeds 42.5%. As at September 30, 2026, net debt to total capitalization was below the 42.5% threshold; therefore, Canfor was not subject to this test. Operating loans – Vida. Vida’s operating loan facilities are denominated in various currencies, with interest payable at fixed rates ranging from 3.0% to 7.2%. Vida also has separate overdraft facilities with fixed interest rates ranging from 2.7% to 7.8%. In the first quarter of 2026, Vida entered into a commitment with its lenders to replace its existing operating loan facilities. The terms of the new operating loan facilities include a Swedish krona ("SEK") 435.0 million (approximately CAD $64.1 million based on foreign exchange rates when initially agreed upon) committed revolving overdraft facility as well as an additional uncommitted facility of SEK 400.0 million (approximately CAD $59.0 million based on foreign exchange rates when initially agreed upon). This facility is subject to an annual renewal and has a one-year term. Vida's operating loan facilities are subject to certain financial covenants, including a minimum equity ratio and a minimum inventory to interest-bearing loan ratio. As at September 30, 2026, Vida was fully in compliance with all covenants relating to its operating loan facilities. (b) Term Debt Canfor (excluding Vida) US$50.0 million, floating interest, repayable on June 28, 2031 $ 71.2 $ 68.7 Vida AUD$0.5 million, floating interest, repayable on December 2, 2027 0.5 0.4 SEK 575.0 million, floating interest, repayable on September 30, 2027 69.4 85.8 Term debt at end of period $ 141.1 $ 154.9 Less: Current portion (69.4) (85.8) Long-term portion $ 71.7 $ 69.1 (millions of Canadian dollars, unaudited) As at September 30, 2026 As at December 31, 2025 Canfor’s term debt (excluding Vida) is unsecured. Vida's SEK term debt is secured by its property, plant and equipment and was renewed on September 30, 2026 for one year, with an option to renew for an additional four years. Vida’s Australian Dollar ("AUD") term debt is secured by its property, plant and equipment. Canfor’s term debt (excluding Vida) is subject to certain financial covenants, including a maximum net debt to total capitalization ratio. As at September 30, 2026, Canfor was fully in compliance with all covenants relating to its term debt. Vida’s term debt is subject to certain financial covenants, including a minimum equity ratio and a minimum inventory to interest- bearing loan ratio. As at September 30, 2026, Vida was fully in compliance with all covenants relating to its term debt. Substantially all borrowings of Vida are non-recourse to other entities within the Company. Fair value of total term debt. As at September 30, 2026, the fair value of the Company’s term debt is $141.1 million (December 31, 2025 – $154.9 million), determined based on prevailing market rates for term debt with similar characteristics and risk profile. 7. Employee Future Benefits For the three months ended September 30, 2026, actuarial losses of $9.9 million (before tax) were recognized in other comprehensive income (loss) in relation to the Company's net defined benefit obligations (comprised of defined benefit pension plans as well as other benefit plans), largely as a result of changes in demographic assumptions associated with mortality expectations. For the nine months ended September 30, 2026, actuarial losses of $11.1 million (before tax) were recognized in other comprehensive income (loss). For the three months ended September 30, 2025, actuarial gains of $5.4 million (before tax) were recognized in other comprehensive income (loss) in relation to the Company's net defined benefit obligations (comprised of defined benefit pension plans as well as other benefit plans), principally reflecting a higher than anticipated return on plan assets, offset to a degree by a 30
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0.1% decrease in the discount rate used to value the net defined benefit obligations. For the nine months ended September 30, 2025, actuarial gains of $12.4 million (before tax) were recognized in other comprehensive income (loss). The discount rate assumptions used to estimate the changes in net retirement benefit obligations were as follows: Defined Benefit Pension Plans Other Benefit Plans September 30, 2026 5.3 % 5.3 % June 30, 2026 5.0 % 5.0 % December 31, 2025 5.0 % 5.0 % September 30, 2025 4.9 % 4.9 % June 30, 2025 5.0 % 5.0 % December 31, 2024 4.7 % 4.7 % 8. Financial Instruments IFRS 13 Fair Value Measurement requires classification of financial instruments within a hierarchy that prioritizes the inputs to fair value measurement. The three levels of the fair value hierarchy are: Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities; Level 2 – Inputs other than quoted prices that are observable for the asset or liability, directly or indirectly; Level 3 – Inputs that are not based on observable market data. The following table summarizes Canfor’s financial instruments measured at fair value at September 30, 2026 and December 31, 2025, and shows the level within the fair value hierarchy in which they have been classified: (millions of Canadian dollars, unaudited) Fair Value Hierarchy Level As at September 30, 2026 As at December 31, 2025 Financial assets measured at fair value Investments Level 1 $ 56.9 $ 67.0 Derivative financial instruments Level 2 – 2.1 Duty deposits recoverable, net (Note 5) Level 3 84.9 27.6 $ 141.8 $ 96.7 Financial liabilities measured at fair value Derivative financial instruments Level 2 $ 4.5 $ – Put liability Level 3 138.5 135.5 $ 143.0 $ 135.5 During the three and nine months ended September 30, 2026, the Company sold and repurchased investments in certain funds with net proceeds of $0.8 million and $22.8 million, respectively (three and nine months ended September 30, 2025 – net outlays and proceeds of $3.0 million and $12.7 million, respectively). These highly liquid investments with maturities exceeding one year were initially measured at cost and subsequently measured at fair value through net income (loss) and classified as Level 1. These investments are included within ‘Long-Term Investments and Other’ on the Company’s condensed consolidated interim balance sheet (Note 5). The following table summarizes the gains (losses) on derivative financial instruments recognized in the condensed consolidated interim statement of income (loss): 3 months ended September 30, 9 months ended September 30, (millions of Canadian dollars, unaudited) 2026 2025 2026 2025 Lumber futures $ 0.8 $ 2.6 $ (1.7) $ 3.3 Foreign exchange forward contracts (3.1) (0.5) (7.9) 9.3 Gain (loss) on derivative financial instruments $ (2.3) $ 2.1 $ (9.6) $ 12.6 During the three and nine months ended September 30, 2026, losses of $3.2 million and $9.7 million, respectively, were recognized in ‘Other Equity’ on the Company’s condensed consolidated interim balance sheet following remeasurement of the put liability (three and nine months ended September 30, 2025 – losses of $3.1 million and $8.9 million, respectively), primarily reflecting the passage of time. 31
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As a result of this remeasurement, combined with net foreign exchange gains of $5.0 million and $6.7 million for the three and nine months ended September 30, 2026, respectively (three and nine months ended September 30, 2025 – foreign exchange losses of $3.4 million and $14.7 million, respectively), the balance of the put liability was $138.5 million at September 30, 2026 (December 31, 2025 – $135.5 million). 9. Income Taxes The components of the Company's income tax recovery are as follows: 3 months ended September 30, 9 months ended September 30, (millions of Canadian dollars, unaudited) 2026 2025 2026 2025 Current $ (2.3) $ 5.3 $ (8.3) $ 4.7 Deferred 13.7 48.1 38.8 129.1 Income tax recovery $ 11.4 $ 53.4 $ 30.5 $ 133.8 The reconciliation of income tax calculated at the statutory rate to the actual income tax recovery is as follows: 3 months ended September 30, 9 months ended September 30, (millions of Canadian dollars, unaudited) 2026 2025 2026 2025 Income tax recovery at statutory rate of 27.0% (2025 – 27.0%) $ 27.1 $ 64.1 $ 60.0 $ 147.7 Add (deduct): Additional losses for which no deferred tax asset is recognized (12.5) – (25.0) – Non-taxable loss related to non-controlling interests (0.2) (0.2) (0.5) (0.6) Entities with different income tax rates and other tax adjustments (3.1) (10.0) (5.0) (14.8) Permanent difference from capital gains and losses and other non- deductible items 0.1 (0.5) 1.0 1.5 Income tax recovery $ 11.4 $ 53.4 $ 30.5 $ 133.8 In addition to the amounts recorded to net loss, a tax recovery of $2.7 million was recorded to other comprehensive income (loss) in relation to actuarial losses, net, on the defined benefit plans for the three months ended September 30, 2026 (three months ended September 30, 2025 – $1.4 million tax expense). For the nine months ended September 30, 2026, a tax recovery of $3.0 million was recorded to other comprehensive income (loss) in relation to actuarial losses, net, on the defined benefit plans (nine months ended September 30, 2025 – $3.3 million tax expense). 10. Earnings (Loss) Per Common Share and Normal Course Issuer Bid Basic net income (loss) per common share is calculated by dividing the net income (loss) attributable to common equity shareholders by the weighted average number of common shares outstanding during the period. 3 months ended September 30, 9 months ended September 30, 2026 2025 2026 2025 Weighted average number of common shares 117,341,063 116,757,746 117,093,795 117,864,032 On March 19, 2026, the Company announced that it had received regulatory approval for a renewal of its normal course issuer bid whereby it can purchase for cancellation up to 5,821,442 common shares, or approximately 5% of its issued and outstanding common shares as at March 16, 2026. The renewed normal course issuer bid is set to expire on March 22, 2027. The Company did not repurchase any shares under its normal course issuer bid during the three and nine months ended September 30, 2026, but did receive a $0.5 million (US$0.4 million) share tax refund relating to prior years. As at September 30, 2026, and November 4, 2026, based on the trade date, there were 117,341,063 common shares of the Company outstanding, including 912,217 shares issued as consideration for the Canfor Pulp acquisition (Note 4). Canfor’s ownership interest in Vida was 77.0%. 32
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11. Net Change in Non-Cash Working Capital 3 months ended September 30, 9 months ended September 30, (millions of Canadian dollars, unaudited) 2026 2025 2026 2025 Trade and other receivables $ 34.3 $ 44.9 $ (48.5) $ (27.7) Inventories 48.2 51.2 54.6 (8.9) Prepaid expenses and other (6.9) 5.0 30.2 (30.1) Accounts payable and accrued liabilities, and current portion of deferred reforestation obligations (32.0) (45.8) 23.2 4.7 Net change in non-cash working capital $ 43.6 $ 55.3 $ 59.5 $ (62.0) 12. Segment Information Canfor has two reportable segments, as described below, which offer different products and are managed separately because they require different production processes and marketing strategies. Sales between segments are accounted for at prices that approximate fair value. These include sales of residual fibre from the lumber segment to the pulp and paper segment for use in the pulp production process. (millions of Canadian dollars, unaudited) Lumber Pulp and paper Unallocated and other Elimination adjustment Consolidated 3 months ended September 30, 2026 Sales from contracts with customers $ 1,141.9 $ 142.9 $ – $ – $ 1,284.8 Sales to other segments 10.0 – – (10.0) – Operating loss (19.9) (44.6) (12.1) – (76.6) Amortization 92.1 7.7 0.8 – 100.6 C a p i t a l e x p e n d i t u r e s ⁴ 51.4 17.2 0.1 – 68.7 3 months ended September 30, 2025 Sales from contracts with customers $ 1,095.2 $ 164.6 $ – $ – $ 1,259.8 Sales to other segments 20.1 – – (20.1) – Operating loss (182.2) (16.0) (10.1) – (208.3) Amortization 88.1 8.8 0.7 – 97.6 C a p i t a l e x p e n d i t u r e s ⁴ 35.7 3.6 0.4 – 39.7 9 months ended September 30, 2026 Sales from contracts with customers $ 3,717.0 $ 453.3 $ – $ – $ 4,170.3 Sales to other segments 44.5 – – (44.5) – Operating loss (22.4) (83.9) (38.0) – (144.3) Amortization 272.4 23.2 2.0 – 297.6 C a p i t a l e x p e n d i t u r e s ⁴ 142.1 37.7 0.8 – 180.6 Total assets 4,085.0 300.8 529.9 – 4,915.7 9 months ended September 30, 2025 Sales from contracts with customers $ 3,518.0 $ 538.7 $ – $ – $ 4,056.7 Sales to other segments 71.2 – – (71.2) – Operating loss (436.9) (10.5) (40.8) – (488.2) Amortization 271.0 28.1 2.0 – 301.1 C a p i t a l e x p e n d i t u r e s ⁴ 194.1 17.7 0.9 – 212.7 Total assets 4,601.9 379.6 590.4 – 5,571.9 ⁴. Capital expenditures represent cash paid for capital assets during the periods, excluding assets purchased as part of acquisitions. Pulp and Paper includes capital expenditures that were partially financed by government grants. 33
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Geographic information. Canfor operates manufacturing facilities in Canada, the US and Europe. Canfor’s products are marketed worldwide, with sales made to customers in a number of different countries. In presenting information on the basis of geographical location, sales are based on the geographical location of customers. 3 months ended September 30, 9 months ended September 30, (millions of Canadian dollars, unaudited) 2026 2025 2026 2025 Sales by location of customer Canada 11 % $ 141.9 11 % $ 141.0 10 % $ 408.3 11 % $ 435.3 United States 54 % 690.4 45 % 571.7 48 % 1,984.2 47 % 1,894.2 Europe 21 % 270.5 27 % 334.3 27 % 1,141.1 27 % 1,076.0 Asia 10 % 127.0 12 % 155.1 10 % 432.8 12 % 495.7 Other 4 % 55.0 5 % 57.7 5 % 203.9 3 % 155.5 100 % $ 1,284.8 100 % $ 1,259.8 100 % $ 4,170.3 100 % $ 4,056.7 13. Duties and Tariffs In 2016, a petition was filed by the US Lumber Coalition to the US DOC and the US International Trade Commission ("ITC") alleging certain subsidies and administered fees below the fair market value of timber that favour Canadian lumber producers. Canfor was selected by the DOC as a "mandatory respondent" to the countervailing and anti-dumping investigations and is subject to company specific CVD and ADD rates. As a result of the DOC’s investigation, CVD and ADD were imposed on the Company’s Canadian lumber exports to the United States beginning in 2017. Also, effective October 2025, the US DOC began applying a 10% tariff on softwood lumber imports under Section 232 of the Trade Expansion Act. As at September 30, 2026, Canfor has paid cumulative cash deposits of $1,253.4 million, excluding Section 232 tariff payments of $33.5 million. Canfor and other Canadian forest product companies, the Federal Government and Canadian Provincial Governments continue to categorically deny the US allegations and strongly disagree with the current countervailing and anti-dumping determinations made by the DOC. Canada has proceeded with legal challenges under the Canada-United States-Mexico ("CUSMA") Agreement and through the World Trade Organization, where Canadian litigation has proven successful in the past. On January 1, 2026, the Company moved into the ninth period of review ("POR9"), which is based on sales and cost data in 2026. Consistent with prior periods of review, the Company was unable to estimate an applicable CVD rate separate from the DOC’s cash deposit rate. As a result, CVD was expensed at a rate of 12.12% and ADD was expensed at an estimated accrual rate of 8.00%. This resulted in a combined accounting rate of 20.12% for the first three quarters of 2026 (versus the DOC’s combined cash deposit rate of 47.59% for January to mid-October and 31.11% thereafter). Subsequent to quarter end, in October 2026, the DOC announced the final results for the seventh period of review ("POR7") which indicated that the Company's final CVD rate for 2024 was 14.11% and the final ADD rate was 17.00%. As a result of this finalization, an expense of $45.9 million (US$32.8 million) will be recognized in the Company's condensed consolidated interim financial statements in the fourth quarter of 2026, to reflect the difference between the combined accrual rate of 23.36% from January to July 2024 and 28.14% for August to December 2024, and the DOC's final combined rate for POR7 of 31.11%. In addition, the Company's current combined cash deposit rate of 47.59% has been reset to the DOC rates for POR7 of 31.11%. Despite cash deposits being made in 2026 at rates determined by the DOC, the final liability associated with duties is not determined until the completion of administrative reviews performed by the DOC for these periods. Summary For accounting purposes, a net duty deposits recoverable of $84.9 million is included on the Company’s condensed consolidated interim balance sheet (Note 5) as at September 30, 2026 (December 31, 2025 – $27.6 million) reflecting differences between the cash deposit rates and the Company’s combined accrual rates for each period of review, including a net interest receivable balance of $20.2 million (December 31, 2025 – $30.7 million). Included in the net interest receivable balance of $20.2 million is $40.8 million in interest receivable from the US government on certain CVD and ADD related accounts receivable balances secured under the terms of the duty deposits loan related to the period from September 27, 2024 to September 30, 2026 and payable to Farallon. 34
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In the third quarter of 2026, the Company received $1.3 million (US$1.0 million) (nine months ended September 30, 2026 – $9.1 million (US$6.6 million)) from the US DOC as a partial refund of ADD for POR1 related to certain exports between August and December of 2017. These funds were in turn remitted to Farallon in accordance with the duty loan agreement. For the three and nine months ended September 30, 2026, the Company recorded a net duties and tariff expense of $32.5 million and $94.8 million, respectively, (three and nine months ended September 30, 2025 – net duties expense of $99.4 million and $140.8 million, respectively), comprised of the following: 3 months ended September 30, 9 months ended September 30, (millions of Canadian dollars, unaudited) 2026 2026 Cash deposits paid $ 54.2 $ 142.7 D u t y r e c o v e r y a t t r i b u t a b l e t o t h e c u r r e n t p e r i o d - P O R 9 ⁵ (31.5) (75.9) Section 232 tariffs 9.8 28.0 Duties and tariff expense, net $ 32.5 $ 94.8 5. Reflects Canfor’s combined accrual rate of 20.12% compared to the DOC’s deposit rate of 47.59% for POR9. Canfor will continue to reassess the ADD accrual estimate at each quarter-end, applying the DOC’s methodology to updated sales and cost data as this becomes available. Quarterly revisions to the ADD rate may result in a material adjustment to the condensed consolidated interim statement of income (loss) while the Administrative Reviews are taking place. Changes to the DOC’s existing CVD and ADD rates during each administrative review may also result in material adjustments to the condensed consolidated interim statement of income (loss). 14. Restructuring Costs In July 2026, the Company announced its decision to permanently close its Northwood Northern Bleached Softwood Kraft ("NBSK") pulp mill in Prince George, BC and its Fox Creek sawmill in Alberta. As a result of these closures, the Company recognized restructuring costs of $41.3 million in the condensed consolidated interim statement of income (loss) for the three months ended September 30, 2026. For the nine months ended September 30, 2026, restructuring costs totalled $50.1 million relating to these closures as well as the announced closure of the Sweden facilities in the second quarter of 2026 (nine months ended September 30, 2025 – $6.7 million related to the closure of the Darlington and Estill sawmills). In addition, as a result of the aforementioned closures, asset write-down and impairment charges totalling $41.8 million were recognized in the Company's condensed consolidated interim statement of income (loss) for the three months ended September 30, 2026, as a reduction to the carrying value of the Company's property, plant and equipment, inventory and goodwill. For the nine months ended September 30, 2026, asset write-down and impairment charges totalled $55.5 million related to these closures as well as the announced closure of the Sweden facilities (nine months ended September 30, 2025 – $188.6 million as a result of the Darlington and Estill closures). 35
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15. Acquisition of PinkWood Ltd. On July 3, 2026, Canfor completed the acquisition of PinkWood's I-joist operations for total preliminary consideration of $52.8 million, plus transaction and closing costs, and including estimated net working capital. PinkWood is located in Calgary, Alberta and is the largest producer of I-joists in Canada. The transaction was accounted for as a business combination under IFRS 3 Business Combinations (“IFRS 3”) and is included in Canfor’s lumber segment. This acquisition was funded by cash on hand. The following tables summarize the preliminary consideration paid for PinkWood and preliminary recognized amounts of identifiable assets acquired and liabilities assumed at the acquisition date: (millions of Canadian dollars, unaudited) Total preliminary consideration $ 52.8 Less: consideration holdback (3.2) Total preliminary cash consideration paid $ 49.6 Less: cash acquired (2.6) Total preliminary cash consideration paid, net of cash acquired $ 47.0 (millions of Canadian dollars, unaudited) Cash $ 2.6 Property, plant and equipment 19.0 Goodwill 21.2 Intangible assets 10.7 Right-of-use assets 0.5 Non-cash working capital, net (including inventory) 6.4 Other non-current liabilities (including deferred tax) (7.6) Total preliminary net identifiable assets $ 52.8 Following integration of PinkWood and completion of final review procedures related to the valuation of property, plant and equipment and intangible assets, preliminary amounts above may be revised. The Company incurred acquisition-related costs of $0.6 million, primarily related to external legal fees and due diligence costs, which have been included in ‘Selling and administration costs’ in the condensed consolidated interim statement of income (loss) as incurred. Balances that required preliminary fair value adjustments for purchase price accounting included inventory, property, plant and equipment, intangible assets, and deferred income taxes. The preliminary goodwill of $21.2 million recognized as part of the purchase is calculated as the excess of the aggregate consideration over the fair value of the estimated identifiable assets acquired and liabilities assumed. The preliminary goodwill arising from the acquisition is attributable to management strength, expected future income and cash-flow projections. As part of the consolidation of PinkWood, a preliminary net deferred tax liability of $7.1 million was recognized for differences between tax and accounting values of property, plant and equipment, intangible assets and inventory. In addition to the above, under a separate asset purchase agreement, the Company acquired the land and building used by PinkWood Ltd. from a third party for $15.5 million, funded by cash on hand and a vendor take back mortgage of $13.0 million. 36