Industry Note

Equity Research July 26, 2022

Paper & Forest Products

North American Paper & Forest Products: Q2/22 Preview Sean Steuart, CFA
Expect Moderating Wood Product Margins Before Steeper Q3 Decline Kasia Trzaski Kopytek, CFA, CPA, CA
Lumber and OSB Commodity Price Round Trip Complete
Q2/22 earnings season for our forest products coverage universe starts later
this week. Our estimates are generally in line with consensus forecasts this quarter
(a rarity). Notwithstanding capitulating lumber and panel prices, we forecast above-
trend results for seven of 10 names in our coverage universe, as price-realization
timing lags soften the landing. Our Q2/22 estimates are below consensus for six
of 10 equities, but variances are generally immaterial. We highlight IFP as a small
earnings upside surprise candidate this earnings season.
Expected prominent themes in Q2/22 earnings reports: 1) weaker, but still well
above-trend, wood product price realizations; 2) progress towards lowering inflated
end product inventories in western Canada (partly via production downtime); 3)
strong pulp & paper pricing momentum; and 4) broad cost inflation (e.g., freight, fibre,
chemicals, and labour). We believe that most investor attention will shift towards
the potential for accelerating earnings pressure during Q3/22, as the full impact of
the wood products price collapse flows through to price realizations. Following an
extended period of aggressive capital deployment - including share buybacks - we
expect that management teams will temper expectations for incremental returns of
capital to shareholders, given moderating FCF yields.
Earnings forecast revisions are minor. We previously adjusted our outlook on
June 23. We are raising target prices for three companies: CFP, IFP, and LPX.
We believe that the consolidation theme will continue to buoy sector sentiment and
are comfortable expanding valuation parameters for these names. Given the recent
share price volatility, we acknowledge that the returns to targets for some names are
relatively high; we will reassess our ratings/targets in the coming weeks.
We reiterate our sector OVERWEIGHT bias. Canadian forest product equities
have rebounded in recent weeks, as the Paper Excellence bid for RFP and press
speculation that Kronospan/CVC Capital will make a privatization offer for WFG have
lifted sector valuations - especially for lumber and panel producers. Despite recent
gains and an expectation of ongoing commodity market volatility this year (a factor
that we believe alienates a contingent of potential investors), valuations based on
mid-cycle estimates remain below long-term averages. Our coverage universe is
trading at 4.0x estimated trend EV/EBITDA, adjusted for FCF forecasts through 2023
vs. the long-term average of 5.3x. Our top picks are IFP and LPX.

Exhibit 1. Target Prices and Recommendations

Share Market Target Total
Company Name Ticker Price Cap Revised Previous Return Rating
Pulp, Paper and Packaging Companies
Canfor Pulp Products Inc. C$ CFX-T $5.72 $373.1 $6.00 $6.00 5% HOLD
Cascades Inc. C$ CAS-T $9.45 $960.2 $10.50 $10.50 16% HOLD
KP Tissue Inc. C$ KPT-T $10.26 $706.6 $11.50 $11.50 19% HOLD
Mercer International Inc. US$ MERC-Q $16.21 $1,074.8 $16.50 $16.50 4% HOLD
Wood Products Companies
Canfor Corp. C$ CFP-T $26.37 $3,275.8 $34.00 $30.00 29% BUY
Interfor Corp. C$ IFP-T $30.23 $1,663.1 $43.00 $40.00 42% BUY
Louisiana-Pacific Corp. US$ LPX-N $61.31 $5,180.7 $80.00 $75.00 32% BUY
Resolute Forest Products Inc. US$ RFP-N,T $20.28 $1,583.9 $23.00 $23.00 13% HOLD
Western Forest Products Inc. C$ WEF-T $1.47 $483.5 $1.75 $1.75 22% HOLD
West Fraser Timber Co. Ltd. US$ WFG-N,T $100.03 $9,014.8 $120.00 $120.00 21% BUY
Note: (1) Target EV/EBITDA multiple is based on trend EBITDA, adjusted for free cash flows expected through 2023.
Source: TD Securities Inc., Thomson One.

Please see the final pages of this document for important disclosure information. Page 1 of 15
 July 26, 2022

Exhibit 2. Q2/22 Earnings Forecasts versus Consensus Expectations and Prior-period Figures

EBITDA (1) EPS (1)

Reporting TD vs. Q2/22E Q2/22E
Q2/22 Earnings Estimates Currency Consensus TD Cons. Q2/21A Q1/22A TD Cons. Q2/21A Q1/22A

Pulp, Paper & Packaging Companies

Canfor Pulp Products Inc. C$ Below $13.6 $19.4 $72.9 ($5.9) ($0.11) ($0.1) $0.55 ($0.31)
Cascades Inc. C$ In Line $94.3 $91.9 $98.0 $58.0 $0.09 $0.1 $0.07 ($0.15)
KP Tissue Inc. (2) C$ Below $18.7 $21.4 $37.3 $29.1 ($0.26) ($0.2) $0.03 ($0.12)
Mercer International Inc. US$ In Line $144.8 $142.3 $83.8 $154.5 $0.98 $1.0 $0.32 $1.34
Wood Products Companies
Canfor Corp. C$ Below $549.2 $577.6 $1,134.6 $830.7 $2.70 $2.7 $5.76 $4.25
Interfor Corp. C$ Above $385.1 $377.0 $611.3 $570.1 $4.77 $4.4 $6.67 $6.61
Louisiana-Pacific Corp. US$ Below $504.1 $518.3 $684.0 $636.0 $4.35 $4.3 $4.74 $5.08
Resolute Forest Products Inc. US$ In Line $211.0 $209.7 $388.0 $227.0 $1.64 $1.7 $3.21 $1.84
Western Forest Products Inc. C$ Below $76.6 $79.9 $120.4 $65.4 $0.14 $0.2 $0.21 $0.11
West Fraser Timber Co. Ltd. US$ Below $976.7 $1,049.6 $2,160.0 $1,592.0 $6.33 $6.9 $12.32 $10.25

Q2/22 Reporting Dates & Conference Report Call Call

Call Details Date Date Time (ET) Dial-in Replay and Pass Code

Pulp, Paper & Packaging Companies

Canfor Pulp Products Inc. July 28 July 29 11:00 AM 888-390-0546 888-390-0541 code: 049770#
Cascades Inc. Aug 4 Aug 4 12:00 PM 888-390-0620 888-390-0541 code: 567197#
KP Tissue Inc. Aug 11 Aug 11 8:30 AM 888-396-8049 877-674-7070 code: 464389
Mercer International Inc. July 28 July 29 11:00 AM 888-378-4398 www.mercerint.com
Wood Products Companies
Canfor Corp. July 28 July 29 11:00 AM 888-390-0546 888-390-0541 code: 049770#
Interfor Corp. Aug 4 Aug 5 11:00 AM 888-396-8049 877-674-7070 code: 637113#
Louisiana-Pacific Corp. Aug 9 Aug 9 11:00 AM 855-513-1368 investor.lpcorp.com/past-events
Resolute Forest Products Inc. Aug 4 Aug 4 9:00 AM Conference call details have not been released yet
Western Forest Products Inc. Aug 3 Aug 4 12:00 PM 800-952-5114 800-408-3053 code: 7954287#
West Fraser Timber Co. Ltd. July 27 July 28 11:30 AM 888-390-0605 www.westfraser.com

Notes:
1) Figures exclude non-recurring items.
2) Figures shown are for Kruger Products LP.
Source: Company reports, Bloomberg, TD Securities Inc.

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 Exhibit 3. North American Paper & Forest Products Commodity Summary

Reference Current Quarterly Average Price Annual Average Price

Commodity Segment Grade(s) Momentum Current Q2/22 Q2/21 Q1/22 2019A 2020A 2021A 2022E 2023E Comments

Pulp, Paper & Packaging

Softwood Market Pulp North America NBSK $1,805 $1,750 $1,598 $1,527 $1,239 $1,138 $1,479 $1,657 $1,500 The current list price of US$1,805/tonne is a nominal record. Market
(US$/metric tonne) % ∆ vs. 3% 13% 18% -7% -8% 30% 12% -9% sentiment has slowed following the H1/22 price surge.

Hardwood Market Pulp North America BEK $1,620 $1,520 $1,307 $1,312 $1,041 $896 $1,244 $1,411 $1,333 The current list price of US$1,620/tonne is a nominal record. Hardwood
(US$/metric tonne) % ∆ vs. 7% 24% 23% -15% -14% 39% 13% -6% pulp markets are exhibiting relative strength versus softwood.

Newsprint North America, East $870 $855 $687 $802 $732 $632 $708 $849 $828 North American newsprint markets remain tight. Price hikes have been
(US$/metric tonne) % ∆ vs. 2% 27% 8% -1% -14% 12% 20% -3% proposed for August and September (US$25/tonne each).

Uncoated Groundwood SC-A 35-lb $1,140 $1,070 $803 $993 $823 $762 $835 $1,083 $1,170 Prices have increased 40% since March 2021 to all-time nominal records.
(US$/short ton) % ∆ vs. 7% 42% 15% 4% -7% 10% 30% 8% US$70-$100/ton price hikes on deck beginning in August.

Linerboard 42-lb Unbleached Kraft $930 $930 $820 $890 $729 $718 $827 $920 $890 Markets are balanced ahead of material planned capacity additions.
(US$/short ton) % ∆ vs. 0% 13% 4% -2% -2% 15% 11% -3%

Wood Products
Softwood Lumber Western SPF, #2 & Btr. $670 $875 $1,319 $1,285 $358 $553 $875 $809 $525 Western SPF lumber prices have plateaued over the past week after rising
(US$/Mfbm) % ∆ vs. -23% -49% -48% -26% 55% 58% -8% -35% 21% since the mid-June low (current price is 52% below the March peak).

Oriented Strand Board 7/16" North Central $440 $725 $1,213 $1,099 $209 $439 $807 $681 $405 The current benchmark North Central price of US$440/Msf has improved
(US$/Msf) % ∆ vs. -39% -64% -60% -40% 110% 84% -16% -41% 17% over the past month (still down 65% vs. the late-March peak).

Recovered Paper (input costs)

Old Corrugated Containers New York $130 $130 $97 $135 $38 $59 $123 $124 $135 OCC prices have been relatively unchanged since January 2022, but
(US$/ton) % ∆ vs. 0% 34% -4% -47% 55% 110% 0% 9% current prices are 53% above the average over the preceding five years.

Sorted Office Paper New York $240 $230 $112 $200 $125 $106 $130 $223 $190 Current SOP prices are at the highest level since September 2011.
(US$/ton) % ∆ vs. 4% 114% 20% -33% -16% 23% 72% -15%

Exchange Rates
U.S. dollar/Canadian dollar $0.78 $0.78 $0.81 $0.79 $0.75 $0.75 $0.80 $0.79 $0.80 The CAD is near the lowest levels since late-2020.
% ∆ vs. -1% -4% -1% -2% -1% 7% -1% 1%

U.S. dollar/euro $1.02 $1.06 $1.21 $1.12 $1.11 $1.14 $1.18 $1.09 $1.11
% ∆ vs. -3% -15% -9% -6% 2% 4% -8% 2%

Source: Fastmarkets RISI, Random Lengths, Bloomberg, TD Securities Inc.

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We Expect Weaker Sequential Q2/22 Results for Most Forest Product

Equities; Still Above Trend in Most Cases
Our Q2/22 earnings estimates are close to consensus in most cases (a rarity
given high volatility for forest product commodity prices). The expected dominant
theme affecting Q2/22 results is the collapse in North American wood-product markets.
Between late-March and late-June, composite North American lumber and OSB prices
declined 57% and 71%, respectively, as affordability deteriorated in tandem with rapid
interest rate increases and excessive finished goods supply built up at the mill level –
especially in western Canada. We expect that these pressures, margin deterioration
associated with ongoing downtime, and cost inflation more than offset benefits tied to
strong pulp and paper price momentum during the quarter. Context remains important:
we still expect that Q2/22 earnings will be substantially above trend (mid-cycle)
quarterly potential for 70% of our coverage universe.

Exhibits 6 and 7 provide company-specific estimates for Q2/22 results compared with
prior periods and consensus forecasts. We also provide some qualitative commentary
regarding the factors expected to influence results.

Key Themes Affecting Q2/22 Results

• Sharp pullback for wood product prices from unsustainable peaks. Average
Q2/22 North American lumber and OSB composite prices declined 31-34% on a q/q
basis. Lumber-price weakness was weighted to the U.S. South with the Southern
Yellow Pine composite price down 38% q/q (vs. 26% for the Western SPF composite).
We expect that producers' actual price realization declines will be softened by order
file timing lags that accompany volatile price swings over short durations.

Exhibit 4. Indexed Forest Product Commodity Prices (U.S. dollar-denominated)

4.5
Lumber and OSB panel prices have
4.0 improved from June lows but are below
Indexed to 1.0 at January 2018

March peaks.
3.5

3.0 Pulp price momentum has slowed following

strong H1/22 gains. Paper markets remain
2.5 tight.

2.0

1.5

1.0

0.5
Jan-18 Jan-19 Jan-20 Jan-21 Jan-22
Lumber Composite (N.A., US$) NBSK Pulp (China, US$)
Newsprint (N.A., US$) OSB Composite (N.A., US$)
Canadian Plywood (C$)
Source: Fastmarkets RISI, Random Lengths

• Improved q/q wood product shipments as companies worked through Q1/22

inventory build and transportation conditions slowly improve. Recall that mill-
level lumber inventories increased significantly during Q1/22 – especially in western
Canada. The data that we track suggests a sharp uptick in Q2/22 shipments on a q/q
basis, consistent with anecdotal reports of normalizing distribution networks. Q2/22
Canadian wood product rail carloads (CN and CP data) increased 11.5% q/q and

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 July 26, 2022

declined 3.0% y/y. These trends are broadly consistent with the 11.8% q/q increase
in Canadian lumber shipments to the U.S. as tracked by Global Affairs Canada.

• Ongoing strength for pulp and paper prices. Average Q2/22 benchmark pulp and
paper prices increased 8-16% q/q and 6-7% q/q, respectively. Pulp momentum has
waned in recent weeks, while paper markets remain tight into Q3/22, with price
increases already proposed for some grades.

Exhibit 5. Canadian Lumber Shipment and Wood Products Carload Trends

Canada Lumber Shipments to U.S. CN & CP Wood Products Carloads
5,500 40% 65,000 30%

5,000 30% 60,000

20%
Quarterly Shipments (MMfbm)

4,500 55,000
20%
10%

Quarterly Carloads
4,000 50,000
10%
3,500 45,000 0%
0%
3,000 40,000 -10%
-10%
2,500 35,000
-20%
Q2/22 shipments: -20%
2,000 30,000 Q2/22 carloads:
- up 11.8% q/q - up 11.5% q/q
1,500 - down 9.3% y/y -30% -30%
25,000 - down 3.0% y/y
1,000 -40% 20,000 -40%
Dec-06 Dec-09 Dec-12 Dec-15 Dec-18 Dec-21 Jun-06 Jun-09 Jun-12 Jun-15 Jun-18 Jun-21
Canada Shipments to U.S. Y/Y Growth Quarterly Carloads Y/Y Growth
Source: Global Affairs Canada, Association of American Railroads, TD Securities Inc.

• Ongoing broad-based cost inflation. We expect sequential margin pressure from

higher freight, chemical, resin, labour, and other input costs. For tissue producers,
cost inflation headwinds (including virgin and recycled fibre prices) are expected to
offset price hike initiatives by many months. Temporary Western Canadian sawmill
curtailments, scheduled pulp mill outages and capex-related downtime are also
expected to undermine margins.

Changes to our earnings estimates are shown in Exhibit 9. We are not making any
major revisions following several large-scale changes we made in late-June. We
expect more pronounced lumber/panel earnings declines in Q3/22 as lower wood
product prices are fully reflected in sales realizations and sharp stumpage inflation (a
temporary factor) in B.C. takes hold.

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Exhibit 6. Q2/22 Earnings Preview Summary for Wood-weighted Companies

Target Return EBITDA ($mm) Q/Q Earnings Reporting Conference Conference
Wood Products Companies Ticker Recomm. Price to Target Q2/22E TD Q2/22E Cons. Q1/22A Momentum Date Call Date Call Time
Canfor Corp. CFP-T BUY $34.00 29% $549.2 $577.6 $830.7 Negative 28-Jul 29-Jul 11:00 am ET
Key Positive Factors: • Accelerating q/q pulp price momentum: N.A. NBSK +14%; China NBSK +16% and BCTMP +24%.
• North American lumber price realization lag expected to mitigate sharp cash market price decline.
• Better lumber prices in Europe; realizations up 10%-15% q/q. • Lower Q2/22 pulp downtime burden than Q4/21 and Q1/22.
• Full quarter of Millar Western sawmills in operating results. • Progress towards lowering western Canadian sawmill inventories.

Key Negative Factors: • Steep North American lumber price declines: Western SPF composite = -26% q/q and Southern Pine composite = -38% q/q.
• Ongoing Western Canadian sawmill downtime (~80% operating rate during Q2/22). • Cost inflation (fibre, freight, fuel, labour).
• Higher slush pulp (kraft paper input) costs.
Interfor Corp. IFP-T BUY $43.00 42% $385.1 $377.0 $570.1 Negative 4-Aug 5-Aug 11:00 am ET
Key Positive Factors: • North American lumber price realization lag expected to mitigate sharp cash market price decline.
• Q2/22 was the first full quarter to include EACOM acquisition. • Addition of second shift at DeQuincy, LA starting in April.
• Contrast to peers: minimal downtime taken in B.C./U.S. PNW. • Progress towards lowering finished good inventories.

Key Negative Factors: • Sharp Q2/22 sequential lumber price declines: Western SPF composite = -26%; Southern Pine composite = -38%; Eastern SPF composite = -23%.
• Cost pressure; most notably fibre costs in U.S. PNW and contractor shortages. • Est. $17mm EBITDA headwind tied to EACOM inventory valuation provision.
• Some eastern Canadian downtime (Timmins flooding). • Slow ramp-up at Eatonton, GA sawmill.
Louisiana-Pacific Corp. (1) LPX-N BUY $80.00 32% $504.1 $518.3 $636.0 Negative 9-Aug 9-Aug 11:00 am ET
Key Positive Factors: • Management guided to Q2/22 adjusted EBITDA of >$540 million in tandem with Q1/22 earnings release (OSB prices fell sharply since then).
• Gradual ramp-up of Houlton siding production. • OSB price realization lag expected to mitigate sharp cash market price decline.
• Seasonal siding order file strength. • Lower I-joist webstock costs.

Key Negative Factors: • Much lower OSB prices: North American composite price declined 34% q/q. • Cost inflation: inputs (especially wax/resin), labour, and freight.
Resolute Forest Products Inc. (1) RFP-N,T HOLD $23.00 13% $211.0 $209.7 $227.0 Negative 4-Aug 4-Aug 9:00 am ET
Key Positive Factors: • Positive q/q paper price momentum: North American newsprint = +4%; uncoated groundwood = +8%.
• Average q/q pulp prices up 14-17% across relevant grades and regions.
• Lumber price realization lag expected to mitigate sharp cash market price decline.

Key Negative Factors: • Q2/22 sequential lumber price declines: Southern Pine composite = -38%; Eastern SPF composite = -23%.
• Significant cost inflation, including fuel surcharges. • Intermittent downtime at St-Félicien pulp mill.
• Minimal easing of transportation bottlenecks.
Western Forest Products Inc. WEF-T HOLD $1.75 22% $76.6 $79.9 $65.4 Positive 3-Aug 4-Aug 12:00 pm ET
Key Positive Factors: • Pockets of relative lumber price resilience for Japan, specialty, and niche grades. • Expect modest q/q lumber shipment growth.

Key Negative Factors: • Sharp price declines for commodity lumber grades. • Below-normal Q2 shift towards Western Red Cedar.
• Difficult log harvesting conditions (lower than normal log decks). • Intermittent sawmill downtime.
West Fraser Timber Co. Ltd. (1) WFG-N,T BUY $120.00 21% $976.7 $1,049.6 $1,592.0 Negative 27-Jul 28-Jul 11:30 am ET
Key Positive Factors: • Accelerating q/q pulp price momentum: N.A. NBSK +14%; China NBSK +16% and BCTMP +24%.
• North American lumber and OSB price realization lag expected to mitigate sharp cash market price decline.
• Ongoing strong European panel contributions despite seasonal slowdown.

Key Negative Factors: • Steep North American lumber price declines: Western SPF composite = -26% q/q and Southern Pine composite = -38% q/q.
• Much lower OSB prices: North American composite price declined 34% q/q.
• Western Canadian wood products downtime continued during Q2/22. • Cost inflation (fibre, freight, fuel, labour).
Notes:
1) Target prices and earnings for Louisiana-Pacific, West Fraser and Resolute are denominated in U.S. dollars.
3) Figures are in Canadian dollars unless indicated otherwise.
Source: TD Securities Inc., Bloomberg, company reports.

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Exhibit 7. Q2/22 Earnings Preview Summary for Pulp & Paper-weighted Companies
Pulp, Paper & Target Return EBITDA ($mm) Q/Q Earnings Reporting Conference Conference
Packaging Companies Ticker Recomm. Price to Target Q2/22E TD Q2/22E Cons. Q1/22A Momentum Date Call Date Call Time
Canfor Pulp Products Inc. CFX-T HOLD $6.00 5% $13.6 $19.4 ($5.9) Positive 28-Jul 29-Jul 11:00 am ET
Key Positive Factors: • Accelerating q/q pulp price momentum: N.A. NBSK +14%; China NBSK +16% and BCTMP +24%.
• Persistent kraft paper price strength.

Key Negative Factors: • Extended pulp production curtailments at Taylor and Northwood. • Elevated pulp fibre input costs & slush pulp costs (kraft paper input).
• Shipping constraints related to persistent transportation issues. • Sales price realization lags tied to extended order files.
• Cost inflation (fibre, freight, fuel, labour).
Cascades Inc. CAS-T HOLD $10.50 16% $94.3 $91.9 $58.0 Positive 4-Aug 4-Aug 12:00 pm ET
Key Positive Factors: • Follow through from March containerboard hike (avg. Q2/22 ref. prices +4-6% q/q). • Modest q/q OCC cost relief.
• Positive price momentum for specialty packaging segment. • Gradual implementation of tissue price increase efforts.

Key Negative Factors: • SOP (tissue input) costs up 15% q/q to 10 year-highs. • Broad cost inflation across fuel, labour, logistics, supplies.
KP Tissue Inc. KPT-T HOLD $11.50 19% $18.7 $21.4 $29.1 Negative 11-Aug 11-Aug 8:30 am ET
Key Positive Factors: • Gradual roll out of cost-push price increase initiatives (U.S. retail and AFH). • Ongoing waste reduction, equipment efficiency and cost reduction initiatives.
• Steady gains tied to the Sherbrooke TAD & converting lines ramp up. • Normalizing AFH tissue demand.

Key Negative Factors: • Broad-based cost escalation across fibre, packaging, freight, labour and energy. • SOP (tissue input) costs up 15% q/q to 10 year-highs.
• Accelerating pulp input cost pressure. • North American eucalyptus pulp prices up 3% q/q.
Mercer International Inc. (1) MERC-Q HOLD $16.50 4% $144.8 $142.3 $154.5 Negative 28-Jul 29-Jul 11:00 am ET
Key Positive Factors: • Accelerating q/q pulp price momentum: N.A. NBSK +14%; China NBSK +16% and Europe NBSK +8%.
• Strong German energy prices support surplus electricity sales from Rosenthal and Stendal.
• Relatively resilient European lumber markets.

Key Negative Factors: • Heavy pulp downtime scheduled for Q2/22 (>51,000 tonnes). • Broad cost inflation (freight, chemicals, fibre).

Notes:
1) Target price and earnings for Mercer are denominated in U.S. dollars.
2) Figures are in Canadian dollars unless indicated otherwise.
Source: TD Securities Inc., Bloomberg, company reports.

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Exhibit 8. Commodity Price Forecasts & Exchange Rate Outlook

2022E 2023E Trend
Forest Product Commodity 2018A 2019A 2020A 2021A Revised Previous % Δ Revised Previous % Δ Revised Previous % Δ
Pulp & Paper
Market Pulp (US$/tonne)
NBSK (N.A., list) $1,337 $1,239 $1,138 $1,479 $1,655 $1,657 <1% $1,500 $1,500 - $1,150 $1,150 -
NBSK (Europe, list) $1,182 $944 $847 $1,241 $1,372 $1,379 -1% $1,150 $1,166 -1% $1,110 $1,110 -
NBSK (China, transaction) $878 $624 $589 $849 $886 $880 1% $755 $755 - $750 $750 -
BCTMP (China, transaction) $655 $494 $464 $533 $664 $629 5% $610 $598 2% $535 $535 -
Paper
Newsprint (N.A, East, US$/tonne) $740 $732 $632 $708 $849 $849 - $845 $828 2% $650 $650 -
UGW (SCA 35-lb., US$/ton) $1,095 $823 $762 $835 $1,112 $1,083 3% $1,170 $1,170 - $770 $770 -
Linerboard (42-lb. unbleached, US$/ton) $823 $729 $718 $827 $913 $920 -1% $890 $890 - $750 $750 -
Wood Products
Softwood Lumber (US$/Mfbm)
Western SPF (2x4, #2 & better) $481 $358 $553 $875 $833 $809 3% $525 $525 - $460 $460 -
Southern Pine (2x4, #2 & better) $525 $406 $599 $926 $853 $795 7% $520 $510 2% $505 $505 -
Eastern SPF (Great Lakes, 2x4, #2 & better) $565 $440 $641 $978 $939 $911 3% $616 $605 2% $550 $550 -
Oriented Strand Board (US$/Msf, 7/16")
North Central $351 $209 $439 $807 $678 $681 -1% $405 $405 - $295 $295 -
South East $315 $188 $425 $736 $641 $649 -1% $380 $385 -1% $265 $265 -
Western Canada $307 $165 $418 $898 $668 $678 -1% $370 $380 -3% $285 $285 -
Recovered Paper (Input Costs, US$/ton)
Old Corrugated Container (New York) $72 $38 $59 $123 $132 $124 6% $135 $135 - $80 $80 -
Sorted Office Paper (New York) $188 $125 $106 $130 $223 $223 - $190 $190 - $120 $120 -
Currency (US$/C$) $0.772 $0.754 $0.747 $0.798 $0.787 $0.787 - $0.797 $0.797 - $0.800 $0.800 -
Notes: 1) NBSK = Northern Bleached Softwood Kraft; BCTMP = Bleached Chemical Thermo-Mechanical Pulp; SPF = Spruce Pine Fir; UGW = Uncoated Groundwood.
Source: TD Securities Inc., RISI Inc., Random Lengths, Bloomberg.

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Exhibit 9. Changes to EPS and EBITDA Estimates and Comparison with Consensus Expectations
TD 2022E 2022E TD 2023E 2023E TD
EPS Changes Revised Previous %Δ Consensus TD vs. Revised Previous %Δ Consensus TD vs. Trend
Pulp, Paper & Packaging Companies
Canfor Pulp Products Inc. C$ ($0.42) ($0.33) -25% ($0.15) 181% $0.09 $0.11 -12% $0.23 -60% $0.30
Cascades Inc. C$ $0.60 $0.71 -16% $0.71 -16% $1.14 $1.19 -4% $1.28 -10% $1.17
KP Tissue Inc. C$ (1) ($0.30) ($0.23) -27% ($0.31) -6% $0.33 $0.39 -16% $0.23 41% $1.42
Mercer International Inc. US$ $3.84 $3.84 - $3.96 -3% $2.42 $2.42 - $2.57 -6% $1.95
Wood Products Companies
Canfor Corp. C$ $8.75 $8.04 9% $8.58 2% $4.35 $4.21 3% $4.06 7% $1.56
Interfor Corp. C$ $14.87 $13.23 12% $12.68 17% $7.01 $6.76 4% $5.07 38% $4.41
Louisiana-Pacific Corp. US$ $14.44 $14.54 -1% $13.52 7% $8.05 $8.16 -1% $6.69 20% $5.66
Resolute Forest Products Inc. US$ $5.19 $4.93 5% $5.61 -7% $2.93 $2.82 4% $3.05 -4% $1.16
Western Forest Products Inc. C$ $0.34 $0.36 -6% $0.40 -14% $0.27 $0.27 - $0.32 -16% $0.20
West Fraser Timber Co. Ltd. US$ $21.25 $20.37 4% $21.99 -3% $8.78 $8.65 2% $12.94 -32% $7.36

TD 2022E 2022E TD 2023E 2023E TD

EBITDA Changes (mm) Revised Previous %Δ Consensus TD vs. Revised Previous %Δ Consensus TD vs. Trend
Pulp, Paper & Packaging Companies
Canfor Pulp Products Inc. C$ $55.8 $62.8 -11% $75.4 -26% $102.5 $103.5 -1% $121.2 -15% $117.3
Cascades Inc. C$ $411.5 $427.3 -4% $420.4 -2% $508.2 $513.9 -1% $530.6 -4% $516.2
KP Tissue Inc. C$ (1) $143.7 $149.8 -4% $136.5 5% $214.5 $220.3 -3% $213.5 <1% $327.3
Mercer International Inc. US$ $552.9 $552.9 - $542.4 2% $460.1 $460.1 - $442.6 4% $419.7
Wood Products Companies
Canfor Corp. C$ $1,899.0 $1,787.7 6% $1,901.3 <1% $1,192.2 $1,169.2 2% $1,115.6 7% $742.8
Interfor Corp. C$ $1,297.1 $1,179.6 10% $1,229.3 6% $672.9 $667.0 1% $614.2 10% $502.6
Louisiana-Pacific Corp. US$ $1,713.7 $1,722.9 -1% $1,632.1 5% $934.3 $944.6 -1% $827.8 13% $720.5
Resolute Forest Products Inc. US$ $690.1 $662.8 4% $698.5 -1% $451.4 $440.0 3% $458.5 -2% $266.2
Western Forest Products Inc. C$ $209.3 $218.5 -4% $224.6 -7% $175.8 $175.8 - $173.2 1% $135.3
West Fraser Timber Co. Ltd. US$ $3,473.9 $3,366.8 3% $3,486.3 <1% $1,741.9 $1,725.6 1% $1,860.2 -6% $1,560.2

Notes:
1) Figures shown are for Kruger Products LP.
Source: TD Securities Inc., Bloomberg.

Page 9 of 15
 July 26, 2022

Exhibit 10. TD Securities Paper and Forest Products Universe

Estimates
Current Price Reporting Target Risk Total EPS (excl. extraordinary items) EBITDA (mm)
Pulp, Paper & Packaging Ticker Price Curr. Curr. Rec. Price Rating Return (%) 20A 21A 22E 23E Trend 20A 21A 22E 23E Trend

Canfor Pulp Products Inc. CFX-T $5.72 C$ C$ HOLD $6.00 HIGH 5% ($0.35) $0.38 ($0.42) $0.09 $0.30 $26 $117 $56 $103 $117
Cascades Inc. CAS-T $9.45 C$ C$ HOLD $10.50 HIGH 16% $1.95 $0.26 $0.60 $1.14 $1.17 $675 $389 $411 $508 $516
KP Tissue Inc. (1) KPT-T $10.26 C$ C$ HOLD $11.50 HIGH 19% $0.97 $0.01 ($0.30) $0.33 $1.42 $198 $153 $144 $214 $327
Mercer International Inc. MERC-Q $16.21 US$ US$ HOLD $16.50 HIGH 4% ($0.26) $3.03 $3.84 $2.42 $1.95 $193 $479 $553 $460 $420

Average 11%

Current Price Reporting Target Risk Total EPS (excl. extraordinary items) EBITDA (mm)
Wood Products Ticker Price Curr. Curr. Rec. Price Rating Return (%) 20A 21A 22E 23E Trend 20A 21A 22E 23E Trend

Canfor Corp. CFP-T $26.37 C$ C$ BUY $34.00 HIGH 29% $4.43 $12.15 $8.75 $4.35 $1.56 $1,124 $2,563 $1,899 $1,192 $743
Interfor Corp. IFP-T $30.23 C$ C$ BUY $43.00 HIGH 42% $4.28 $12.81 $14.87 $7.01 $4.41 $510 $1,247 $1,297 $673 $503
Louisiana-Pacific Corp. LPX-N $61.31 US$ US$ BUY $80.00 HIGH 32% $4.34 $13.86 $14.44 $8.05 $5.66 $781 $1,972 $1,714 $934 $721
Resolute Forest Products Inc. RFP-N,T $20.28 US$ US$ HOLD $23.00 HIGH 13% ($0.02) $5.07 $5.19 $2.93 $1.16 $257 $767 $690 $451 $266
Western Forest Products Inc. WEF-T $1.47 C$ C$ HOLD $1.75 HIGH 22% $0.02 $0.55 $0.34 $0.27 $0.20 $117 $302 $209 $176 $135
West Fraser Timber Co. Ltd. WFG-N,T $100.03 US$ US$ BUY $120.00 HIGH 21% $8.43 $26.61 $21.25 $8.78 $7.36 $1,813 $4,569 $3,474 $1,742 $1,560

Average 27%

Multiples
Price Reporting Target (2) Trailing Trailing Trailing P/E Multiple TEV/EBITDA
Pulp, Paper & Packaging Currency Currency EV/EBITDA D/D+E BVPS P/BV 20A 21A 22E 23E Trend 20A 21A 22E 23E Trend

Canfor Pulp Products Inc. C$ C$ 3.5x 7% $7.39 0.8x nmf 17.6x nmf nmf 19.2x 15.7x 3.5x 7.3x 4.0x 3.5x
Cascades Inc. C$ C$ 5.0x 45% $18.28 0.5x 7.5x nmf 15.8x 8.3x 8.1x 3.8x 6.6x 6.2x 5.6x 5.5x
KP Tissue Inc. (1) C$ C$ 5.7x 56% $9.86 1.0x 12.4x nmf nmf nmf 7.2x 8.0x 10.3x 11.0x 7.4x 5.9x
Mercer International Inc. US$ US$ 4.6x 60% $11.59 1.4x nmf 4.0x 4.2x 6.7x 8.3x 11.4x 4.6x 4.0x 4.8x 5.3x

Average 4.7x 42% 0.9x 9.9x 10.8x 10.0x 7.5x 10.7x 9.7x 6.2x 7.1x 5.4x 5.0x

Price Reporting Target (2) Trailing Trailing Trailing P/E Multiple TEV/EBITDA
Wood Products Currency Currency EV/EBITDA D/D+E BVPS P/BV 20A 21A 22E 23E Trend 20A 21A 22E 23E Trend

Canfor Corp. C$ C$ 3.5x nmf $31.96 0.8x 5.2x 2.6x 3.0x 6.1x 16.9x 2.7x 1.2x 1.6x 2.5x 4.0x
Interfor Corp. C$ C$ 4.0x 16% $33.03 0.9x 5.6x 2.4x 2.0x 4.3x 6.9x 3.9x 1.6x 1.5x 3.0x 4.0x
Louisiana-Pacific Corp. US$ US$ 7.5x nmf $19.09 3.2x 8.6x 5.7x 4.2x 7.6x 10.8x 6.3x 2.5x 2.9x 5.3x 6.8x
Resolute Forest Products Inc. US$ US$ - 7% $22.39 0.9x nmf 4.0x 3.9x 6.9x 17.5x 6.7x 2.3x 2.5x 3.8x 6.5x
Western Forest Products Inc. C$ C$ 2.6x nmf $1.95 0.8x nmf 3.8x 4.3x 5.4x 7.5x 3.5x 1.4x 2.0x 2.4x 3.1x
West Fraser Timber Co. Ltd. US$ US$ - nmf $83.92 1.2x 7.6x 3.6x 4.7x 11.4x 13.6x 4.9x 1.9x 2.5x 5.1x 5.7x

Average 4.4x nmf 1.3x 6.7x 3.7x 3.7x 6.9x 12.2x 4.7x 1.8x 2.2x 3.7x 5.0x

Notes:
1) Figures shown are for Kruger Products LP.
2) Target EV/EBITDA multiple is based on trend EBITDA, adjusted for free cash flows expected through 2023.
Source: TD Securities Inc., Company reports, Thomson One.

Page 10 of 15

Exhibit 11. Justification of and Key Risks to Target Prices
Company
Risk
Name and Target Price Rec. Justification of Target Price
Rating
Ticker
In deriving our $34.00 target price for Canfor, we separate
the company’s 54.8% equity stake in Canfor Pulp from the
core wood products business. We value Canfor’s stake in
CFX using our 12-month target price of $6.00 for that
Canfor Corp. investment. We then apply a 3.5x EV/EBITDA multiple to
$34.00 BUY HIGH
(CFP-T) our estimate of trend EBITDA for the remaining wood
products business unit and adjust for free cash flow through
2023 to capture the impact of changing net debt
expectations. Our average target multiple for relevant
lumber and panel producers is 4.5x.
Our 12-month target price of $6.00 for Canfor Pulp is based
on a 3.5x target EV/EBITDA multiple using our trend
Canfor Pulp EBITDA estimate. To capture the impact of changing net
Products Inc. $6.00 HOLD HIGH debt expectations, we adjust our enterprise value calculation
(CFX-T) with expected free cash flows through 2023. The target
multiple compares with an average of 4.6x applied across
our coverage universe.
Our 12-month target price of $10.50 for Cascades is based
on a 5.0x target EV/EBITDA multiple using our trend
Cascades EBITDA estimate. To capture the impact of changing net
Inc. $10.50 HOLD HIGH debt expectations, we adjust our enterprise value calculation
(CAS-T) with expected free cash flows through 2023. The target
multiple compares with an average of 4.6x applied across
our coverage universe.
Our 12-month target price of $43.00 for Interfor is based on
a 4.0x target EV/EBITDA multiple using our trend EBITDA
Interfor Corp. estimate. To capture the impact of changing net debt
$43.00 BUY HIGH
(IFP-T) expectations, we adjust our enterprise value calculation with
expected free cash flows through 2023. Our average target
multiple for relevant lumber and panel producers is 4.5x.
Our 12-month target price of $11.50 for KP Tissue is based
on a 5.7x target EV/EBITDA multiple using our trend
EBITDA estimate for KPLP. To capture the impact of
changing net debt expectations, we adjust our enterprise
KP Tissue value calculation with expected free cash flows through
Inc. $11.50 HOLD HIGH 2023, including all capex associated with the Sherbrooke
(KPT-T) expansion. Our trend EBITDA estimate includes a full
contribution from the TAD Sherbrooke asset, plus the LDC
paper machine/converting line expansion of this site. The
target multiple compares with an average of 4.6x applied
across our coverage universe.
Our 12-month target price of US$80.00 for Louisiana-Pacific
is based on a 7.5x target EV/EBITDA multiple using our
Louisiana- trend EBITDA estimate. To capture the impact of changing
Pacific Corp. US$80.00 BUY HIGH net debt expectations, we adjust our enterprise value
(LPX-N) calculation with expected free cash flows through 2023. Our
average target multiple for relevant lumber and panel
producers is 4.5x.
Source: TD Securities Inc.
July 26, 2022
Key Risks to Target Price
Key risks to our target price include: 1) a slower-than-expected
recovery in the U.S. housing market; 2) a stronger Canadian dollar; 3)
input cost pressures, including labour and raw materials; 4) long-term
shortage of fibre in Western Canada; 5) potential slowdown in lumber
export markets; 6) potential First Nations land entitlement issues in
Western Canada; 7) trade dispute with the U.S. regarding softwood
lumber; 8) highly competitive markets; 9) potential labour disruptions;
10) share price performance of Canfor Pulp (CFX-T); and 11) potential
direct and indirect downtime tied to COVID-19. Key risks to our target
price for Canfor Pulp include: 1) weaker-than-expected pulp
demand/pricing; 2) a stronger Canadian dollar; 3) input cost
pressures, including fibre cost inflation in B.C.; 4) higher interest rates;
5) inconsistent implementation of the dividend policy; 6) unplanned
production disruptions; 7) control by Canfor Corp. (owns 54.8% of the
common shares); 8) highly competitive markets; 9) execution risk
associated with significant discretionary capex; and 10) potential direct
and indirect downtime tied to COVID-19.
Key risks to our target price include: 1) weaker-than-expected pulp
demand/pricing; 2) a stronger Canadian dollar; 3) input cost
pressures, including fibre cost inflation in B.C.; 4) higher interest rates;
5) inconsistent implementation of the dividend policy; 6) unplanned
production disruptions; 7) control by Canfor Corp. (owns 54.8% of the
common shares); 8) highly competitive markets; 9) execution risk
associated with significant discretionary capex; and 10) potential direct
and indirect downtime tied to COVID-19.
Key risks to our target price include: 1) a potential decline in
packaging and tissue prices; 2) input cost inflation; 3) a potentially
stronger Canadian dollar; 4) weakness in the North American
manufacturing sectors; 5) high financial leverage; 6) highly
competitive markets; 7) acquisition integration risk; 8) execution risk
associated with significant discretionary capex; and 9) potential direct
and indirect downtime tied to COVID-19.
Key risks to our target price include: 1) a slower-than-anticipated U.S.
housing recovery; 2) an erosion in offshore lumber demand; 3) a
faster-than-expected response in North American lumber production;
4) a strengthening Canadian dollar; 5) input cost pressures, including
labour and raw materials (e.g., fibre costs); 6) acquisition integration
risk; 7) potential First Nations timber claims; 8) trade dispute with the
U.S. regarding softwood lumber; 9) highly competitive markets; and
10) potential direct and indirect downtime tied to COVID-19.
Key risks to our target price include: 1) poor disclosure; 2) control of
KPLP by Kruger Inc. — 85.3% ownership, majority Board and senior
management representation; 3) commercial contracts between KPLP,
KP Tissue, and Kruger; 4) sensitivity of the North American tissue
market to growth in capacity; 5) input cost pressures, including labour
and raw materials; 6) negative exposure to weaker Canadian dollar; 7)
equipment failure, production/labour disruptions, natural disasters, and
environmental liabilities; 8) potential equity dilution tied to organic
growth initiatives; 9) highly competitive markets; 10) risks associated
with the TAD Sherbrooke and expansion projects; 11) high financial
leverage; and 12) potential direct and indirect downtime tied to COVID-
19.
Key risks to our target price include: 1) the earnings sensitivity to
weaker OSB, siding, and engineered wood prices; 2) weaker U.S.
housing or renovation related demand; 3) weaker South American
demand; 4) fluctuating exchange rates; 5) restarts of idled North
American OSB capacity; 6) equipment failures and production
disruptions; 7) input cost inflation, including labour and raw materials;
8) highly competitive markets; and 9) potential direct and indirect
downtime tied to COVID-19.
Page 11 of 15
 July 26, 2022

Exhibit 12. Justification of and Key Risks to Target Prices

Company
Risk
Name and Target Price Rec. Justification of Target Price Key Risks to Target Price
Rating
Ticker
Key risks to our target price include: 1) weaker-than-expected pulp
Our 12-month target price of US$16.50 for Mercer is based
demand and pricing; 2) currency fluctuation; 3) input cost inflation –
on a 4.6x target EV/EBITDA multiple using our trend
Mercer mostly related to potential fibre supply restrictions; 4) equipment
EBITDA estimate. To capture the impact of changing net
International failures, production disruptions, and/or environmental liabilities; 5) high
US$16.50 HOLD HIGH debt expectations, we adjust our enterprise value calculation
Inc. financial leverage; 6) risks associated with capital investment projects;
with expected free cash flows through 2023. The target
(MERC-O) 7) highly competitive markets; 8) potential direct and indirect
multiple compares with an average of 4.6x applied across
downtime tied to COVID-19; and 9) failure to attain synergies from
our coverage universe.
acquisitions.

Key risks to our target price include: 1) structural demand decline for
newsprint/groundwood paper; 2) inconsistent capacity discipline from
Our 12-month target price of US$23.00 for Resolute is
paper producers; 3) currency fluctuations; 4) liabilities associated with
Resolute based on the US$20.50/share cash bid plus a risk-adjusted
the company’s pension plans and benefit obligations; 5) input-cost
Forest value of US$2.50/share (rounded) for the CVR. We believe
US$23.00 HOLD HIGH inflation; 6) highly competitive markets; 7) project execution risk
Products Inc. that there is a high likelihood that the transaction will be
associated with discretionary capex; 8) softwood lumber trade dispute
(RFP-N, T) approved and a minimal probability that a superior bid will
with the U.S.; 9) potential direct and indirect downtime tied to COVID-
emerge.
19; and 10) failure to consummate the privatization transaction with
Paper Excellence.

Key risks to our target price include: 1) changes in lumber/log demand

Our 12-month target price of $1.75 for Western is based on and pricing; 2) stronger Canadian dollar; 3) input cost inflation; 4)
Western a 2.6x target EV/EBITDA multiple using our trend EBITDA production disruptions at sawmills; 5) potential First Nations land
Forest estimate. To capture the impact of changing net debt entitlement issues; 6) proposed margin-improvement initiatives that
$1.75 HOLD HIGH
Products Inc. expectations, we adjust our enterprise value calculation with may not yield the expected returns; 7) concentration of by-product
(WEF-T) expected free cash flows through 2023. Our average target sales; 8) softwood lumber trade dispute with the U.S.; 9) highly
multiple for relevant lumber and panel producers is 4.5x. competitive markets; and 10) potential direct and indirect downtime
tied to COVID-19.

Our 12-month target price of US$120.00 for West Fraser is

Key risks to our target price include: 1) weaker-than-expected North
based on a probability-weighted blended approach. We
American wood products demand; 2) North American lumber and
assign a 50% weighting to our view of West Fraser’s status
OSB market competition; 3) changing commodity prices; 4) foreign
quo value of US$105.00/share. This is derived by applying a
currency fluctuations; 5) a long-term B.C. fibre shortage; 6) equipment
4.7x target EV/EBITDA multiple to our trend EBITDA
West Fraser failures, production disruptions, environmental liabilities, labour
estimate and adjusting the resultant enterprise value with
Timber Co. disruptions, and/or natural disasters; 7) input cost pressure; 8)
US$120.00 BUY HIGH expected free cash flow through 2023. We assign a 50%
Ltd. acquisition integration risk; 9) failure to achieve the anticipated
weighting to a potential takeout at US$130.00/share. Our
(WFG-N,T) synergies; 10) potential First Nations claims to timber; 11) softwood
takeout offer price assumption is based on an estimated
lumber trade dispute between Canada and the U.S.; 12) potential
trend EV/EBITDA multiple of 6.5x (consistent with recent
direct and indirect downtime tied to COVID-19; and 13) a formal
M&A transactions for North American forest product assets)
privatization proposal with Kronospan and CVC Capital Partners, or
and adjusted for free-cash-flow expectations through the
other interested parties, failing to materialize.
end of 2022.
Source: TD Securities Inc.

Page 12 of 15
Industry Note
Equity Research July 26, 2022

TD Securities Equity Research Disclosures

 Company Ticker Disclosures
Canfor Corp. CFP-T 9
Canfor Pulp Products Inc. CFX-T n/a
Cascades Inc. CAS-T 1, 2, 4, 9
Interfor Corp. IFP-T 9
KP Tissue Inc. KPT-T n/a
Louisiana-Pacific Corp. LPX-N n/a
Mercer International Inc. MERC-Q n/a
Resolute Forest Products Inc. RFP-N | RFP-T n/a
Western Forest Products Inc. WEF-T 9
West Fraser Timber Co. Ltd. WFG-N | WFG-T 2, 4, 9

1. TD Securities Inc., TD Securities (USA) LLC or an affiliated company has managed or co-managed a public offering of securities within the last 12 months with respect to the subject
company.
2. TD Securities Inc., TD Securities (USA) LLC or an affiliated company has received compensation for investment banking services within the last 12 months with respect to the
subject company.
3. TD Securities Inc., TD Securities (USA) LLC or an affiliated company expects to receive compensation for investment banking services within the next three months with respect to
the subject company.
4. TD Securities Inc. or TD Securities (USA) LLC has provided investment banking services within the last 12 months with respect to the subject company.
5. A long position in the securities of the subject company is held by the research analyst, by a member of the research analyst’s household, or in an account over which the research
analyst has discretion or control.
6. A short position in the securities of the subject company is held by the research analyst, by a member of the research analyst’s household, or in an account over which the research
analyst has discretion or control.
7. A long position in the derivative securities of the subject company is held by the research analyst, by a member of the research analyst’s household, or in an account over which the
research analyst has discretion or control.
8. A short position in the derivative securities of the subject company is held by the research analyst, by a member of the research analyst’s household, or in an account over which
the research analyst has discretion or control.
9. TD Securities Inc. and/or an affiliated company is a market maker, or is associated with the specialist that makes a market, in the securities of the subject company.
10. TD Securities Inc. and/or affiliated companies own 1% or more of the equity securities of the subject company.
11. A partner, director or officer of TD Securities Inc. or TD Securities (USA) LLC, or a research analyst involved in the preparation of this report has, during the preceding 12 months,
provided services to the subject company for remuneration.
12. This security has Subordinate voting shares.
13. This security has Restricted voting shares.
14. This security has Non-voting shares.
15. This security has Variable voting shares.
16. This security has Limited voting shares.

Additional Important Disclosures

Price Graphs
Full disclosures for all companies covered by TD Securities can be viewed at https://portal.tdsecurities.com/alpha/important-disclosures by TD Securities' institutional equity clients.

Distribution of Research Ratings^ Investment Services Provided*

100%
82.21%
REDUCE - 1.2%
NOT RATED - 0.3%
75%

HOLD - 20.8% 50%

BUY - 77.7%
25% 16.56%

0.61% 0.61%
0%
BUY HOLD NOT REDUCE
RATED

Current as of: July 26, 2022

^ Percentage of subject companies under each rating category: BUY (covering ACTION LIST BUY,
BUY and SPECULATIVE BUY ratings), HOLD, and REDUCE (covering TENDER and REDUCE
ratings) and NOT RATED (covering UNDER REVIEW, SUSPENDED, and NOT RATED).

Page 13 of 15
Industry Note
Equity Research July 26, 2022

* Percentage of subject companies within each of the four categories (BUY, HOLD, REDUCE, and
NOT RATED) for which TD Securities Inc. has provided investment banking services within the last
12 months.

Definition of Research Ratings

ACTION LIST BUY: The stock's total return is expected to exceed a minimum of 15% (with higher thresholds for less liquid, more risky securities) over the next 12 months and it is a
top pick in the Analyst's sector.
BUY: The stock's total return is expected to exceed a minimum of 10% (with higher thresholds for less liquid, more risky securities) over the next 12 months.
SPECULATIVE BUY: The stock's total return is expected to exceed a minimum of 30% over the next 12 months (with higher thresholds for less liquid securities); however, there is material
event risk associated with the investment that could result in a significant loss.
HOLD: The stock's total return is expected to be between 0% and 10%, (with higher thresholds for less liquid, more risky securities) over the next 12 months.
TENDER: Investors are advised to tender their shares to a specific offer for the company's securities or to support a proposed combination reflecting our view that a superior offer
is not forthcoming.
REDUCE: The stock's total return is expected to be negative over the next 12 months.
SUSPENDED: Due to evolving circumstances, we can no longer generate what we consider a defensible target price and rating at the current time.
UNDER REVIEW: Our rating is under review pending additional information and/or analysis. The prior rating should not be relied on.
NOT RATED: We do not currently produce a recommendation and a target price on this security.
Risk ratings are relative to other companies in the TD Securities Equity Research coverage universe. In order of increasing risk, our risk ratings are LOW, MEDIUM, HIGH, and
SPECULATIVE. These risk ratings are not meant to be compared to ratings on other securities and asset classes outside our Equity Research coverage universe.
Overall Risk Rating in order of increasing risk: Low (6.8% of coverage universe), Medium (43.4%), High (42.5%), Speculative (7.4%)

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Page 14 of 15
Industry Note
Equity Research July 26, 2022

Australia
If you receive this document and you are domiciled in Australia, please note that this report is intended to be issued for general information purposes only and distributed through Toronto Dominion
(South East Asia) Limited ("TDSEA"). TDSEA does not hold itself out to be providing financial advice in these circumstances. TD Securities is a trademark and represents certain investment dealing
and advisory activities of Toronto-Dominion Bank and its subsidiaries, including TDSEA. The Toronto-Dominion Bank is not an authorized deposit-taking or financial services institution in Australia.
TDSEA is a holder of an Australian Financial Services Licence (528885) and is regulated in Australia by the Australian Securities and Investments Commission.
Canada
Canadian clients wishing to effect transactions in any security discussed herein should do so through a qualified salesperson of TD Securities or TD Securities Inc. TD Securities Inc. is a member
of the Canadian Investor Protection Fund.
China, India, and South Korea
Insofar as the document is received by any persons in the People's Republic of China (“PRC”), India and South Korea, it is intended only to be issued to persons who have the relevant qualifications to
engage in the investment activity mentioned in this document. The recipient is responsible for obtaining all relevant government regulatory approvals/licenses themselves, and represents and warrants
to The Toronto-Dominion Bank that the recipient's investments in those securities do not violate any law or regulation, including, but not limited to, any relevant foreign exchange regulations and/or
overseas investment regulations. The Toronto-Dominion Bank has a representative office in Shanghai, Mumbai and Seoul which should be contacted for any general enquiry related to The Toronto-
Dominion Bank or its business. However, neither any of the Toronto-Dominion Bank offshore branches/subsidiaries nor its representative offices are permitted to conduct business within the borders
of the PRC, India and South Korea. In locations in Asia where the Bank does not hold licenses to conduct business in financial services, it is not our intention to, and the information contained in this
document should not be construed as, conducting any regulated financial activity, including dealing in, or the provision of advice in relation to, any regulated instrument or product. This publication is
for general information only, without addressing any particular needs of any individual or entity, and should not be relied upon without obtaining specific advice in the context of specific circumstances.
Hong Kong SAR (China)
This document, which is intended to be issued in Hong Kong SAR (China) ("Hong Kong") only to Professional Investors within the meaning of the Securities and Futures Ordinance (the "SFO") and the
Securities and Futures (Professional Investor) Rules made under the SFO, has been distributed through Toronto-Dominion Bank, Hong Kong Branch, which is regulated by the Hong Kong Monetary
Authority and the Securities and Futures Commission.
Japan
For Japanese residents, please note that if you have received this document from The Toronto-Dominion Bank entities based outside Japan, it is being provided to qualified financial institutions (“QFI”)
only under a relevant exemption to the Financial Instruments and Exchange Act.
If you have received this document from TD Securities (Japan) Co., Ltd., it is being provided only to institutional investors. TD Securities (Japan) Co., Ltd. is regulated by the Financial Services Agency
of Japan and is distributing this document in Japan as a Type 1 Financial Instruments Business Operator registered with the Kanto Local Finance Bureau under registration number, Kinsho 2992,
and a member of Japan Securities Dealers Association.
New Zealand
The Toronto-Dominion Bank is not a “registered bank” in New Zealand under the Reserve Bank Act 1989.
Singapore
This report is distributed in Singapore by The Toronto-Dominion Bank, Singapore Branch, and recipients in Singapore of this report are to contact The Toronto-Dominion Bank, Singapore Branch in
respect of any matters arising from, or in connection with, this report. The Toronto-Dominion Bank, Singapore Branch is regulated by the Monetary Authority of Singapore. Where this report is issued or
promulgated in Singapore, it is only intended for distribution to a person who is an accredited investor, expert investor or institutional investor as defined in the Securities and Futures Act (Cap. 289), the
Securities and Futures (Prescribed Specific Classes of Investors) Regulations 2005, or the Securities and Futures (Classes of Investors) Regulations 2018 issued by the Monetary Authority of Singapore.
United Kingdom and Europe
This document is prepared, issued or approved for issuance in the UK by TD Securities Limited and in Europe by TD Global Finance unlimited company in respect of investment business. The
Toronto-Dominion Bank is authorised by the Prudential Regulation Authority and subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority.
TD Securities Limited is authorised and regulated by the Financial Conduct Authority. TD Global Finance unlimited company, trading as TD Securities, is regulated by the Central Bank of Ireland.
Insofar as the document is issued in or to the United Kingdom, it is intended only to be issued to persons who (i) are persons falling within Article 19(5) ("Investment professional") of the Financial
Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the "Financial Promotion Order"), (ii) are persons falling within Article 49(2)(a) to (d) ("High net worth companies,
unincorporated associations, etc.") of the Financial Promotion Order, or (iii) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the
Financial Services and Markets Act 2000) in connection with the issue or sale of any securities may otherwise lawfully be communicated or caused to be communicated. Insofar as the document is
issued in or to the European Union, it is intended only to be issued to persons categorised as 'Per Se Professional' or 'Eligible Counterparties' as defined in S.I. No 375 of 2017, European Union (Markets
in Financial Instruments) Regulations 2017, Schedule 2. Clients in the United Kingdom wishing to effect transactions in any security discussed herein should do so through a qualified salesperson of
TD Securities Limited. European clients wishing to effect transactions in any security discussed herein should do so through a qualified salesperson of TD Global Finance unlimited company. Insofar as
the information in this report is issued in (i) the UK, it has been issued with the prior approval of TD Securities Limited and (ii) in Europe, it has been issued with the prior approval of TD Global Finance
unlimited company. Article 20 Market Abuse Regulation 596/2014 ("MAR") requires market participants who produce or disseminate Investment Recommendations or other information recommending
or suggesting an investment strategy to take reasonable care that such information is objectively presented, and to disclose their interests or indicate conflicts of interest. In accordance with the MAR
requirements, see the Investment Recommendations Disclaimer for relevant information in relation to The Toronto-Dominion Bank – London Branch, TD Bank Europe Limited, TD Securities Limited
and TD Global Finance unlimited company. https://www.tdsecurities.com/tds/document/MAR-IR-Disclaimer
United States
U.S. clients wishing to effect transactions in any security discussed herein must do so through a registered representative of TD Securities (USA) LLC.
TD Securities is a trademark of The Toronto-Dominion Bank and represents TD Securities Inc., TD Securities (USA) LLC and TD Securities Limited and certain investment and corporate banking
activities of The Toronto-Dominion Bank and its subsidiaries.
© Copyright 2022 The Toronto-Dominion Bank. All rights reserved.
Full disclosures for all companies covered by TD Securities can be viewed at https://portal.tdsecurities.com/alpha/important-disclosures

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