Mark Bishop – President and Chief Executive Office Erika Reilly – Chief Financial Officer

Daryl Swetlishoff – Raymond James Andrew Kuske – Credit Suisse Paul Quinn – RBC Capital Markets

Thank you operator, and good morning or afternoon to everyone. Welcome to Acadian’s third quarter conference call for 2015.

Before we start, I’d like to take a moment to welcome back Erika Reilly into her role as Acadian’s Chief Financial Officer. And I’ll also note that Brian Banfill, who is also joining us on the call today, will continue as Acadian’s Chief Operating Officer.

Erika has returned from maternity leave at the beginning of October and is fully back up to speed. She’ll now proceed with the formal remarks, then I will add my comments and take your questions.

Erika?

Thanks, Mark. Before we get started, I’d like to remind everyone of the following.

This conference call is being webcast simultaneously through our website at acadiantimber.com, where you can also find a copy of the press release including the financial statements. Please note that in responding to questions and talking about our third quarter financial and operating performance, as well as our market outlook, we may make forward-looking statements.

These statements are subject to known and unknown risks and future results may differ materially. For further information on known risk factors, I encourage you to review Acadian’s annual information form dated March 24, 2015 and other filings of Acadian with securities regulatory authorities, which are available on CEDAR at cedar.com and on our website.

I will now start by outlining the financial highlights for the third quarter, then Mark will provide some comments about our operations, market conditions, business development activities, and our outlook for the remainder of 2015 and into 2016. Acadian’s operations continued to perform well this quarter, generating the highest third quarter adjusted EBITDA conception.

Operating conditions were typical of the summer season and the continued strength in hardwood market contributed to improved financial performance. Net sales for the third quarter totaled $22.6 million, a $1 million or 5% increase compared to the same period in 2014.

The year-over-year increase in net sales reflects a 8% increase in weighted average log selling price, partially offset by 4% lower sales volumes. The selling price for all products increased year-over-year with the exception of softwood sawtimber, which would impacted by a lower proportion of higher value logs from Maine.

Hardwood pulpwood once again showed the biggest gain with prices up 18% year-over-year. With variable costs up only 2% year-over-year in Canadian dollar terms, adjusted EBITDA margin improved from 26% to 29% compared to the same period last year.

Acadian’s net loss for the third quarter totaled $2.9 million, or $0.17 per share, an increase of $2.3 million from the prior year with higher operating earnings and a lower fair value adjustment to timber, offset by a higher unrealized exchange loss on long-term debt. Free cash flow was up $600,000 from the third quarter of 2014 to $5.2 million, or $0.31 per share.

This strong cash generation pushed the year-to-date payout ratio down to 72% compared to 91% for the same period last year. We are pleased to announce that in recognition of the strong performance along with expectation of continued strong performance over the next several years.

Acadian’s Board of Directors has reached the decision to increase the Acadian’s annual dividend by $0.10 to $1 per share. This new dividend will be effective in the fourth quarter of 2015.

I will now briefly review the segmented results for Acadian's New Brunswick and Maine operations. Net sales from our New Brunswick operation for the third quarter totaled $17 million compared to $16.3 million for the same period last year.

This 4% improvement was driven by a 6% increase in the weighted average log selling price, partially offset by 2% lower log sales volumes. Operations were focused on hardwood harvest given strong hardwood pulpwood market, which resulted in a modest increase in hardwood log inventories compared with the prior year.

Overall, harvest volume for the third quarter of 2015 was in line with the prior year. The weighted average log selling price was $64.98 per cubic meter in the third quarter of 2015, up $3.43 per cubic meter from the same period last year.

This year-over-year average price increase reflects gains in hardwood pulpwood. Costs for the third quarter of 2015 were $11.1 million, down $700,000 from the comparable quarter of 2014 with a benefit of 5% lower variable cost per cubic meter offset by higher harvest volumes at primary products.

Third quarter adjusted EBITDA for the New Brunswick operation was $6 million, up $1.5 million from the third quarter of 2014, again reflecting improved prices and lower per unit costs. Adjusted EBITDA margin increased to 35% from 28% in the prior year.

[Indiscernible] New Brunswick operation, the Maine operations focused on hardwood harvest to take advantage of the strong hardwood pulp market. As a result, softwood harvest and sales volumes slipped 23% year-over-year.

Net sales for the third quarter of 2015 increased 6% year-over-year to $5.6 million from $5.3 million in the third quarter of the prior year, with reduced overall sales volumes more than offset by improved hardwood pulpwood prices, and the positive impact of the weaker Canadian dollar. The weighted average log selling price in Canadian dollar terms was $79.58 per cubic meter in the third quarter compared to $69.95 per cubic meter in the same period of 2014.

Weighted average log selling prices in the U.S. dollar terms was $60.84 per cubic meter, 5% lower year-over-year.

Strong hardwood pulpwood prices were offset by a lower proportion of softwood sawlogs in the sales mix. Costs for the third quarter of 2015 were $4.6 million, up $800,000 from the comparable period of 2014, reflecting the effect of adverse foreign exchange movements as harvest volumes were almost unchanged and variable costs per cubic meter were up just 4% in the U.S.

dollar terms. Adjusted EBITDA for the Maine operation was $1 million, $500,000 lower than the same period last year and adjusted EBITDA margin was lower at 18% compared to 29% in the prior year, reflecting the impact of less valuable sales mix.

Switching over from the operations to our cash position, at the end of the third quarter, Acadian had cash on hand totaling $16 million, which is $3.1 million higher than the cash balance at the same time last year. The primary driver for this increased cash balance was the generation of free cash in excess of dividend payments over the last 12 months.

The current cash balance is $3.3 million higher than the balance at the end of 2014, again reflecting free cash in excess of dividend payments year-to-date. As at September 26, 2015, Acadian had net liquidity of $93.7 million, including funds available under Acadian's revolving facility, and our standby equity commitment with Brookfield.

The balance sheet remains strong leaving Acadian well positioned for the future. As noted in our press release, we completed a five year extension of Acadian’s loan facilities with more favorable terms than the prior agreement, including a lower fixed rate of 3.01% on the US$72.5 million term facility, down from 3.97%.

This results in an interest savings of approximately US$700,000 per year. During the quarter, we distributed a dividend of $0.225 per share to our shareholders.

As I noted earlier, we will be distributing $0.25 per share effective in the fourth quarter of 2015. I will now turn the call over to Mark.

Thank you, Erika. During the quarter, Acadian's operations experienced one recordable incident involving employees and one involving contractors.

I'm pleased to confirm that the resulting injuries were limited to cuts requiring stitches, but they did have the potential to be more serious. The incidents were thoroughly investigated and appropriate corrective actions were implemented.

We continue to work with all our contractors and employees to ensure the highest standards of workplace safety are maintained. We're also pleased to note that in mid-September, the Maine operation has successfully completed a surveillance audit to the 2015 to 2019 Sustainable Forest Initiative Standard with no non-conformances.

The operation has been recommended for continuing registration to the SFI standard. We're also pleased to note that during the quarter, the Maine operation became the third timberland owner in the state to enter into an outcome-based forestry agreement with the Maine Forest Service.

The agreement provides an alternative to prescriptive regulation under the current forest practices rules. It allows landowners more flexibility to achieve objectives while achieving state-wide sustainability goals and providing for the conservation of public, trust resources, and the public forest values.

As Erika noted, Acadian's weighted average log selling price for the third quarter increased 8% year-over-year. Realized Canadian dollar prices were up 1% for softwood sawlogs, but up 3% for hardwood sawlogs, 8% for softwood pulplogs, and 18% for hardwood pulplogs.

While a big portion of the credit goes to the weaker Canadian dollar, the hardwood pulp price reflects continued strong market for this product during the quarter. While softwood pulplog prices have improved modestly year-over-year, this product remains our most challenging as the number of ground wood pulp customers operating in the region has declined over the last few years.

As we've noted many times in the past, however, this product makes up the small portion of our total sales, 5% in this latest third quarter and an even smaller portion of our gross margin. Biomass gross margins continue to show strength of 49% year-over-year growth as the New Brunswick operations continue to sell to the higher margin export markets as compared to the prior year.

After strengthening significantly early in the third quarter, North American lumber pricing decline to multiyear lows during August and September. Regional sawmills continued to operate on full shifts, but do appear to be carrying log inventories above normal seasonal levels.

The combination of weak offshore export markets, the weak Canadian dollar, and the end of the U.S.-Canada Softwood Lumber Agreement, resulting in a temporary removal of Canadian export taxes, is expected to maintain pressure on lumber prices into 2016. This has begun to put some pressure on markets for softwood sawlogs, although pricing has remained stable to date.

While near-term markets for Acadian’s softwood sawlogs may experience modest headwinds, demand fundamentals do remain strong. To date, in 2015, U.S.

housing starts are up 12% year-over-year, and consensus expectations are for increases of a further 10% to 15% in 2016. Markets for hardwood sawlogs are expected to remain stable at their current positive levels, while the current very favorable demand and pricing for hardwood pulpwood may experience some softness as the region adapts to the recently announced pulp and paper mill closures and bankruptcy proceedings.

Biomass markets remain positive and we anticipate demand to remain stable, supporting improved margin levels. Interestingly, a small portion of our biomass volume is exported to Turkey, which used in the production of composite panels rather than fuel.

We do note that there are also positive developments in the region, which include the start-up of two new tissue machines in 2016, expected to increase pulpwood demand from the mill, as well as a newly announced Track Rehabilitation Project that will allow the State of Maine’s railroads to offer faster and more reliable freight service to its customers, which include a meaningful cross-section of the pulp and paper forest sector and forest product sector in the Northeast region. On the business development front, we continue to actively pursue opportunities in support of Acadian's growth strategy in the U.S., Australasia and South America, but continue to face aggressive competition in a best part and challenge to effect a transaction for Acadian.

During the third quarter, we worked on six opportunities across these regions. We will remain active in this pursue and Acadian's shareholders can be confident that we must stay focused and disciplined in our search for growth.

In closing, we remain very pleased with Acadian's exceptionally strong operating performance over the past several quarters, and look forward to reporting ongoing strong performance in the coming quarters. We thank you all for your continued support of Acadian.

That concludes our formal remarks and we’re available to take any questions from participants on the line. Operator?

Well, thanks, and good morning. Mark, first question is just on operations.

I was a bit surprised by the strength in the hardwood pulp prices. Can you remind us just on your flexibility to quickly change your log mills to take adverting of relative price moves when they incurred quickly?

Daryl, within the year, we certainly have a fair bit of flexibility, and have focused on the stronger hardwood pulp markets. So, we certainly can respond, and change our harvest plans.

Clearly over the longer-term, we have a long-term sustained harvest level and profile that we need to harvest too, but we can certainly within fairly short periods of time, move our harvest plans and respond to those markets. So you certainly did see that activity thus far in year-to-date 2015.

Makes sense. Switching gears a bit, you mentioned some of the impacts from the duties coming off.

Could you hazard a view on the Softwood Lumber Agreement, mostly with potential outcomes and how that might impact Acadian’s business?

Daryl, our expectation is really similar to the last round of softwood lumber in terms of the next year. We do expect the full year of no duties to proceed until we see the two sides ultimately try to get back together and negotiate a new agreement.

At this point, we don’t expect to see a different outcome with respect to the Atlantic provinces. So we would expect to see ultimately a similar outcome with not a significant change in the impact to our customers.

Okay, it’s fair. And lastly, Mark, on the business development front, we’ve seen quite a few changes, currency driven and other that effected log prices, especially in North America.

Has that really changed your view on where you’re focusing and where you’re looking for growth opportunities?

Well, as we’ve continued to I think indicate in our materials, we continue to look both in North America and outside of North America, particularly in Australasia and in South America. I’m not sure within the U.S., if we had specific interest or but clearly we’re continuing to find challenging acquisition – very challenging acquisition environment, particularly in the U.S.

with the size and the quality of the offerings.

Okay, that is fair. I’ll turn it over, Mark.

Thank you.

Thank you. Good morning.

I guess the question is just to start off with on the payout ratio and how you think about the payout ratio on other normalized EPS basis or in a cash flow basis and how we should think about that go forward?

We calculate our payout ratio based on free cash flow. I think free cash flow is the meaningful measure for Acadian.

Our net income or losses are always impacted by non-cash items that really are FX related and really not an indicator of the business and the business performance. That really encourage everyone to continue to look at our free cash flow generation and calculate payout ratio as such.

As was stated, since inception of the company and in a perspective, our payout ratio target is 95%, but just that strong cash generation over the past 12 months, we’ve just certainly outperformed that target.

So then that segue my second question. Obviously, the currency had a big impact on some of the numbers.

And so how do you think about may be a “normalized dollar.” How do you think about that relationship and how that affects the payout ratio?

Well, I think, so I guess two things, FX had a significant impact on the presentation of our financial statements, but a lot of that presentation is really not cash, they are non-cash item. So, we don’t get too stressed about those types of movements.

We see them quarter-over-quarter, but they don’t impact cash. As it relates to our business and the cash generation, we’ve only stated and believe that there is a bit of a natural hedge between FX movement and the way our operations are able to perform, under different FX levels.

So while – for example our Maine operation that operates in U.S. dollars is currently facing a bit of pressure because Canadian dollar logs are now viewed as cheaper, when we convert the Maine operation, financials are profits into Canadian dollars and report them they’re still quite strong.

So there is a bit of a natural hedge there. So that’s kind of how we view the business today.

That’s helpful. And then continuing with the FX scene but in a different – a lot of questions just on the acquisitions.

I know Mark you have mentioned about the aggressive competition for deals and the number of things you looked out in Q3. Are you seeing less competition in places like Brazil where there has been massive devaluation of BRL and really capital flight, is that market looking more attractive now and less competitive?

Andrew, I think you’ve got a couple of things still happening in Brazil that certainly the currency has, I think, attracted some additional interest in Brazil, in the timber sector, in the timber space. But there’s still an awful lot of uncertainty with some of the smaller or newer timber investors uncertain still about the foreign ownership environment in Brazil.

And that certainly has an influence. But I would say we’ve seen some new entrants and some of the same parties competing and the environment does remain in a competitive in terms of valuation.

And certainly in some segments some of the industry, other than pulpwood tree remains very, very strong in Brazil. As you know some of the other segments have had some particular challenges, which we remain hopeful that we’ll see some additional properties on to the market, but at the same time make the cash flow purple of some of those properties in short-term somewhat more, more challenge.

So I would say, certainly there is some new competition in terms of financial buyers but it’s overall not substantially different than what we’ve been facing over the last couple of years.

Okay, that’s very helpful. Thank you.\

Yes, thanks for mention. Good morning.

Just an easy question just on lumber market has been under a lot of pressure through 2015 here your log prices seem to have stayed up especially on the softwood side. Is that typical for you guys in past business cycles and what’s your expectations going forward?

Well a couple of things, Paul, I mean You are aware of New Brunswick company agreements we have with our customer – major customer there that does allow us to have less volatile pricing given our six-month contract period. So we have less volatile pricing there.

But we are seeing generally a very stable pricing, a little bit of short-term impact from the pulp mill closure which has resulted in fewer opportunities to find sawmill residuals homes in an established market. So there has been a little bit of impact from mills needing to offset some of the impact of that, we think that’s short term.

And clearly we’re seeing recovery now in lumber pricing in North America which hopefully supports rather log pricing through 2016. There is no question, we haven’t yet seen the wall whether it was expected from Canada since the expiry of Softwood Lumber Agreement whether that’s starts to ramp up remains to be seen.

And clearly we’ve seen a recovery in lumber pricing here and it looks like inventories at least on the lumber side are well-positioned for the mill to continue to build for the construction season in the Spring – to continue to and to build for the construction season in the Spring. So all in all, I think, we are seeing stable maybe some slight down with pressure in the beginning of the year.

But generally stable a lot pricing in [indiscernible] sawlogs side for the year.

Okay. And just on the M&A side just looking at the U.S.

market, U.S. sold prices on the log side have been flat for it seems like year and a half or more now.

We’ve seen some pretty high transaction pricing but some other stuff that’s been closing lately seems to be a little bit softer for various reasons. Are you seeing any kind of drop in the market in the U.S.

so – a sort of apparent drop or less compensation in that market at all?

In terms of the Timberland acquisition environment?

Yes.

I would say, we have really seen much change Paul it’s still very compete market not just in the South East, but all over the U.S. Now there’s obviously not an awful lot of transparency or detail in terms of some of the inventory information, particular that is associated with some of these transactions.

But I wouldn’t say, we’re seeing any real change in the landscape in that market.

Okay. That’s all I had give results.

Thanks.

Thank you all again for dialing-in and we look forward to talking to you again at the end of our next quarter.