Jennifer Egan - Director of Investor Relations Mario Plourde - President and Chief Executive Officer Allan Hogg - Chief Financial Officer Charles Malo - President and Chief Operating Officer, Containerboard Packaging Group Luc Langevin - President and Chief Operating Officer, Specialty Products Group Jean Jobin - President and Chief Operating Officer, Tissue Papers Group

Hamir Patel - CIBC World Markets Paul Quinn - RBC Capital Markets Keith Howlett - Desjardins Securities Sean Steuart - TD Securities

Good morning. My name is Sully and I will be your conference operator today. At this time, I would like to welcome everyone to the Cascades Fourth Quarter and Full Year 2017 Financial Results Conference Call. All lines have been are currently in a listen-only mode. After the speakers’ remarks, there will be a question-and-answer session. I will now pass the call to Jennifer Egan, Director of Investor Relations for Cascades. Ms. Egan, you may begin your conference.

Thank you, Operator. Good morning, everyone. And thank you for joining our fourth quarter and full year 2017 financial results conference call. Our speaker on this morning's call are Mario Plourde, President and CEO; Allan Hogg, CFO; Charles Malo, President and COO of our Containerboard Packaging Group; Luc Langevin, President and COO of our Specialty Products Group; and Jean Jobin, President and COO of our Tissue Papers Group. After discussion surrounding our North American operations, Mario will review results from our European Boxboard segment, followed by some concluding remarks, after which we will begin the question period. Before I turn the call over to my colleagues, I would like to highlight that Reno De Medici’s fourth quarter financial report released on February 13th, can be viewed on Reno’s Web site. I would also note that certain statements made during this call will discuss historical and forward-looking matters. The accuracy of these statements is subject to risk factors that can have a material impact on actual results. These risks are listed in our public filings. These statements, the Investor Presentation, and the press release also include data that are not measures of performance under IFRS. Please refer to our accompanying Q4 2017 Investor Presentation for details. This presentation along with our fourth quarter press release can be found on the Investor section of our Web site. I would like to remind members of the media and those of you accessing this call via the Internet that you are in listen-only mode, and can therefore only listen to the call. If you have any questions, please feel free to call us once the call has been completed. I will now turn the call over to our CEO, Mario.

Thank you, Jennifer, and good afternoon, everyone. Earlier this morning, we published our fourth quarter and full year 2017 results. On a consolidated basis, our operation generated year-over-year increases in shipments, sales and operating income in Q4. This was largely driven by strong performance in Containerboard and European Boxboard where improved pricing and sales mix offset higher average raw material cost compared to the prior year. Containerboard results similarly benefited from the Q2 2017 consolidation of the Greenpac Mill. Touching briefly on our specialty product segment, quarterly results were below those of last year due to slightly higher production cost and a lower contribution from recovery in recycling activity. Finally, our tissue segment face challenging market condition during the quarter. Looking briefly at our sequential performance, Q4 sales declined by 2% on a consolidated basis. That was largely due to a lower contributions from recovery and recycling activity, following the decrease in OCC market pricing and the competitive market in tissue that led this division to take productions down time during the period to manage inventory. On a net adjusted basis, fourth quarter EBITDA was essentially unchanged from Q3 levels, reflecting improvements in our containerboard and European Boxboard segment. The businesses of which were offset by lower result in our tissue segment. Jack will discuss the factor driving performance in tissue later in the call. On the KPI front, fourth quarter shipment decreased by a marginal 1% from Q3. This reflected higher shipment levels in containerboard, driven by a strong demand and a stable performance in European boxboard, highlighting solid industry fundamentals. These were offset by seasonality and market conditions in tissue. On a year-over-year basis, Q4 shipment increased 14% compared to last year, driven primarily by the consolidation of Greenpac and slightly higher shipment in the European boxboard and tissue. Our Q4 capacity utilization rate of 91% was 1% below Q3, largely driven by a decrease in tissue. Compared to the fourth quarter of last year, capacity utilization increased by 2%. On the raw material side, the average Q4 index price for OCC Brown paper grade fell by a significant 39% from Q3 and decreased 2% year-over-year. The average price of white recycled grade decreased by 5% compared to Q3 and 4% year-over-year. Conversely, Virgin Pulp prices increased both sequentially and compared to prior year levels. Hardwood Virgin Pulp was up 7% from Q3 and 27% year-over-year, while softwood Virgin Pulp increased 7% and 19%, respectively. Looking more specifically at OCC, price fluctuated quite substantially in the month following its high of $175 in March 2017. Price felled by a total of $65 from September through November, ending the year at an index level of $100 in the Northeast U.S., which I would note is an average quarterly level that we have not experienced since mid-2016. I will now pass the call over to Allan who will provide more details regarding our financial results. Allan?

Thank you, Mario and good morning everyone. So I will begin with sales as detailed on slide 12 and 13 of our fourth quarter conference call presentation, which can be found in the investor section of our of our Web site. And also, please note that all reconciliation of non-IFRS measures are also available on our Web site. On a year-over-year basis, fourth quarter sales increased by $103 million or 11%. This reflects the consolidation of Greenpac, improvements in pricing and sales mix in all of our segments with the exception of tissue. A less favorable foreign exchange rate for our North American operations was an offsetting factor. Sequentially, Q4 sales decreased by 21 million or 2%, lower volumes mainly in tissue and a lower contribution from our recovery and recycling activities were the reasons for this decrease. Favorable foreign exchange rates and acquisition in our Containerboard segment were the main positive contributor to sale sequentially. Moving now to operating income and adjusted EBITDA as highlighted on slide 14. Q4 operating income was $12 million above last year while adjusted EBITDA of $105 million increased $23 million from prior year levels. The president of each our segments will provide more details regarding performances of their respective groups. On a consolidated basis the benefit derived from the full conclusion of Greenpac results in the favorable average selling prices and product mix in Containerboard and European Boxboard were partially offset by higher raw material costs in Containerboard, higher energy cost in Europe and a lower commissions from the Tissue segment. Depreciation expense was also higher due to the Greenpac consolidation while corporate activities contribution was positive in Q4. Sequentially, Q4 adjusted EBITDA decreased by a marginal $1 million. The performance of our tissue segment was offset by improvement in our European Boxboard and Containerboard segments, both of which benefited from lower raw material pricing. Corporate activity volumes was also positive. Slide 16 and 17 of the presentation illustrate the year-over-year and sequential volumes of our Q4 earnings per share and the details of the specific item that affected our quarterly results. As reported, earnings per share totaled $0.60 in the fourth quarter, including specific items that I will detail in a moment. This compares to reported earnings per share of $0.04 last year. Our fourth quarter adjusted EPS decreased to $0.14% from $0.16 last year. Our higher EBITDA was offset by higher depreciation and slightly higher financing expense, both due to the full consolidation of Greenpac. Also the mix of contributor to our results has also changed compared to last year, as Greenpac and our Boxboard Europe segment represent a higher proportion of operating income. Consequently, net earnings attributable to non-controlling interest in Greenpac and Reno de Medici was higher compared to last year, thus reducing our share of the net results. On a sequential basis, fourth quarter adjusted earnings per share decreased by $0.06 from the adjusted earnings per share of $0.20 in the third quarter of 2017. This reflects our sequentially lower operating income and stronger results from our Boxboard Europe segment and Greenpac, which resulted in higher non-controlling interest. Slide 18 and 19 of the presentation illustrates specific items recorded during the quarter, which were not significant when looking at our operating income. With regards to net earnings, the main items are a $14 million loss related to the early repurchase of our U.S. denominated long-term debt and $57 million income tax gain resulting from the U.S. tax reform announced at the end of 2017. Cash flow from operations decreased by $8 million year-over-year to $77 million. Adjusted free cash flow remained stable with last year's level. For the year, adjusted free cash flow is lower due to the lower EBITDA, higher cash tax and interest payments compared to last year. As illustrated on slide 20, you can see that CapEx spread were also higher than last year and the $4 million increase in dividends is related to the dividends paid to the non-controlling shareholders in Greenpac and Reno de Medici. Our net debt decreased slightly in Q4 due to business acquisition completed during the quarter in Containerboard in Boxboard Europe segment, and also our ownership increase in Greenpac. These were partially offset by our cash flow from operations and lower working capital requirements. Our net debt leverage ratio stood at 3.6 at the end of 2017, on a pro forma basis to include our recent business acquisitions. Slide 23 through 28 provide details of our fourth quarter performance on a segmented basis and our near term outlook is detailed on slide 31. Thank you and I will ask Charles to discuss our third quarter results from our containerboard packaging group.

Good morning, everyone and thank you, Allan. The Containerboard Group shipments increased 4% sequentially in the fourth quarter of 2017 to reach 372,000 tons. The paper shipments to external customers increased by 700,000 tons from the previous quarter, which reflect a 1% increase in our operating rate during Q4 combined with a 3% reduction in our integration rate. To this end, when including paper sold to our associated company, our Q4 integration rate totaled 64%, down from 67% in the previous quarter. Planned and unplanned downtime during the quarter subtracted 800,000 tons of production compared to the previous quarter. On the conversion side, shipments decreased by 400,000 tons or 2% sequentially, which is in line with the 2% decrease reported to the Canadian market but underperformed the 1% increase reported for the U.S. market. I would remind you that 65% of the containerboard segment sales are generated in Canada. On the pricing front, our average selling price decreased by $4 on a sequential basis, reflecting a less favorable product sales mix in the fourth quarter compared to the prior quarter. On a segment basis, our average Canadian selling price for the Containerboard increased by $18 or 2% in the fourth quarter, while our corrugated product average selling price in Canadian remained stable compared to previous period. The Canadian dollar weakness helped to partially mitigate the impact of the unfavorable product mix. The containerboard group generated an EBITDA of $74 million during the fourth quarter, which represents a margin of 17%. This represents a 1% increase on a sequentially basis and a 4% increase compared to the same quarter of last year. The sequential increase in our results was mostly driven by improvement in raw material costs, mainly due to lower OCC prices, which added $60 million to profitability. This more than offset the lower average selling price, which negatively impacted profitability by $6 million and higher energy costs which also reduced profitability by $2 million. Higher operation costs during the period also reduced our results by $6 million, mainly due to repair and maintenance, and increased labor costs. We're optimistic with regard to the short term outlook as we expect demand levels to be in line with historical trends, and our results should continue to benefit from the more favorable OCC pricing. In addition, we will begin to realize benefit from the recently announced price increase of $50 of linerboard, $60 per short ton on medium and 8% on boxes, beginning in April and May. Unfortunately, these positive economic impacts will be partially offset by lower than anticipated shipments in the first quarter of 2018 following on planned downtime in some of our mills. We estimate that these one-time mechanical issues and related repairs will result in a production shortfall of 14,000 short ton in the first two months of the year. Looking briefly at our strategic initiatives during the quarter, we announced the acquisition of four facility and the purchase of 30% ownership position in Tencorr Holdings Corporation in Ontario on December 4th that will strengthen our position in Ontario containerboard packaging sector. I’m also pleased to note that we successfully increased our equity holding of the Greenpac mill from 62.5 to 66.1 during the quarter. Finally, a word on the construction of the new corrugated plant in Piscataway, New Jersey. The construction is well underway and we continue to expect to start operating in the second quarter of 2018 within our announced $80 million budget. Thank you for your attention. And I will now ask Mario to provide you with an overview of our boxboard activity in Europe. Mario?

Thank you, Charles. The European Boxboard segment generated strong result in Q4 with sales and EBITDA up year-over-year. This performance was driven by increase in both average selling prices and shipped volumes, both of which reflect the more favorable market condition throughout 2017. On a year-over-year basis, recycled boxboard shipment increased by 2% in the fourth 2017 with strong demand in Italy and Eastern Europe, while shipments of virgin boxboard increased by 1% during the period. The average selling price rose by 8% in Canadian dollar and 4% in euro when compared to Q4, 2016. This was driven by the €28 increase in the average selling price in recycled boxboard, partially offset by a €7 year-over-year decrease in the average selling price of virgin boxboard during the period. The 11% year-over-year increase in sales in Canadian dollar reflect higher volume, higher average recycled boxboard selling prices and a more favorable exchange rate. Fourth quarter adjusted EBITDA increased by $8 million year-over-year, largely due to higher selling prices and volume in recycled boxboard. Higher raw material costs, primarily from recycle material, partially offset these benefits during the quarter. On a sequential basis Q4 sales increased 5% as shipment levels were unchanged from Q3. This was driven by a more favorable sales mix and the 3% increase in the average selling price in euro. In Canadian dollar, the average selling price increased 5% sequentially, reflecting the more advantageous foreign exchange rate during the period. Adjusted EBITDA increased by 36% sequentially to $19 million in the fourth quarter, reflecting the already mentioned factor and a lower raw material costs. The near-term outlook continue to be very positive for Europe with order inflow and order backlog both higher than prior year levels as a additional support to our positive macroeconomic forecasts for the euro area for 2018 and the 8% sequential decrease in average recycled fiber cost in Q4, both of which should support performance and result in Q1. Furthermore, the acquisition of the residual ownership of the Italian cardboard processing and shipping company, Pac Services, January 1, 2018 is expected to positively contribute to results going forward. Finally, on the pricing front, first quarter results will continue to benefit from price increases implemented over the course of 2017. I will now pass the call to Luc who will provide you with an overview of the performance of the specialty products group. Luc?

Thank you, Mario. Good morning. For the fourth quarter of 2017, the Specialty Product Group reported sales of $161 million, slightly above the prior year but 10% below Q3 sales level. This sequential decrease is largely attributable to the impact of lower fiber prices on results from the recovery activities and to lesser degree seasonally lower sales, primarily in the consumer product packaging segment. Our fourth quarter EBITDA of $14 million, which represents a margin of 8%, decreased slightly from $15 million in Q3. Again, lower volumes in our packaging activity and lower contribution from our recovery operations explain this variance. Looking at performance on a segmented basis, the industrial packaging subsegment EBITDA in Q4 was marginally higher than Q3. This reflects slightly lower volumes and higher maintenance cost at our URB mill, the effect of which were more than offset by higher spread. The EBITDA of our consumer product packaging subsegment was sequentially lower. Lower seasonal volume in the rigid and flexible packaging market combined with lower spread due to less favorable product mix were the contributing factors. Finally, results from our recovery subsegment were lower as the favorable evolution of foreign exchange during the quarter and the slightly higher volumes were more than offset by lower spreads higher maintenance cost and increased logistics cost. Regarding the near term outlook, our recovery subsegment performance will be negatively impacted in Q1 by declines in recovered paper prices. Since Q3 2017, OCC has been in abundant supply in North America even during February when generation is typically as its lowest. Inventories are very good at our mills, near term OCC pricing could potentially continue to decline. This is certainly good news for Cascades as a whole, but it will make it harder for the recovery subsegment to replicate last year's outstanding Q1 performance. For white fibers, the market is currently more balanced in regions where we are active with supply being generally more limited. The situation for mix grade is challenging, pricing varies according to quality and region and inventories are generally high. The domestic market concurrently absorbed all the quality and quantity being generated and residual volumes are moving to alternative export markets. I would note that our exposure to this market is limited as we sell only small volume of this grade. In the long term, the Chinese requirement for cleaner recycle material will be tighter and we believe that this trend is here to stay. Consequently, pricing for higher quality materials could be impacted. Future exports to volumes to China remained unclear at this moment as Q2 import licenses have not yet been communicated to the market. Moving to our other business area, I'm pleased to note that our plants are currently busy and we expect demand for our product to remain solid. The recently announced price increase for uncoated recycled board is positive for packaging operations, and we are entering into a favorable quarter for demand in our converting facility. Recent price increase for polystyrene and polyethylene resins are keeping material costs at a higher level in our consumer product packaging segment. We continue to closely manage our selling price to counterbalance this negative input cost impact. Finally, looking ahead to Q1, we expect our results to be sequentially positive but to be below our Q1 2017 performance. Thank you for your attention. And I will now pass the call to Jean who will present the results of our Tissue group.

Thank you, Luc. Good morning, everyone. The tissue group faced challenging market conditions during 2017 with an adjusted EBITDA of $94 million or a margin of 7.4%. This compares to an adjusted EBITDA of $150 million and a margin of 11.5% in 2016. During the fourth quarter of 2017, we generated $12 million of adjusted EBITDA, which represent a margin of 3.9%. I will note that our fourth quarter is always less profitable than Q3 due to lower seasonal volumes and winter related costs. On a year-over-year basis, our Q4 performance was also below the adjusted EBITDA of $30 million and related 10.2% margin that we generated in Q4 2016. Our overall performance both sequentially and year-over-year was negatively impacted by higher raw material prices, lower volumes, the continued ramp up of our new Oregon converting facility and higher maintenance costs. I will touch on each of those key drivers one-by-one beginning with volume. Fourth quarter shipment decreased by 4% compared to Q3 in the parent roll segment and 8% in both the away from home and the retail segment, largely due to the usual year end seasonality. However, on a year-over-year basis, parent roll shipment increased by 15% while shipment of converted product decreased by three. As we have note in previous quarterly conference call, we are presently faced with overcapacity in the hand towel segment, and expect that this will remain the case as we integrate our Oregon converting plant. Throughout managed inventory levels during the quarter, we scheduled paper machine shutdown, representing 11,000 tons and also temporarily sold limited amount of hand towel and bathroom tissue overseas. In terms of pricing, our fourth quarter average selling price decreased by 1% on a sequential basis. This reflects a less favorable customer mix and a less favorable product mix that was mainly driven by a lower percentage of converted products in our overall sales. We have finalized the price increase in the Canadian consumer product segment that we announced in Q3, representing up to 10.5% and we will begin to see the positive impact in Q1, mainly due to the agreement’s date. On a year-over-year basis, our average selling price decreased by 4% in Q4, which reflects the same factors that I've just outlined in addition to the competitive market environment. On the material side, Q4 pulp prices remained very high. The significant price increases seen in both recycled fiber and virgin pulp, coupled with our higher utilization of virgin pulp in our products to enhance quality, negatively impacted our performance by increasing our total raw material by $7 million compared to last year’s Q4. While OCC pricing has decrease in Q4, this has only a limited benefit for the Tissue group as OCC accounts for less than 20% of our overall raw material usage in terms of mix. On the other hand, the steadily increasing prices in pulp and other white fiber have a more pronounced negative effect on our results as these fibers make up more than 80% of our raw materials. Lastly, I would note that our growing use of virgin pulp is both purposeful and strategic as this supports important growth with our key retail customers, while also helping us to increase the quality of our products, making us more competitive. Looking ahead, even though the first quarter is usually our lowest season we expect higher shipment, primarily in the converting segment. In terms of raw materials, we expect an increase in virgin fiber prices and white recycled fibers, and a reduction in OCC reflecting recent index pricing changes. Moving now to our West Coast converting plant. This new facility and the St. Helens paper mill negatively contributed to our EBITDA for approximately $15 million in 2017. Market development efforts are progressing. And while penetrating and developing a new market always takes time, we are making in-road and are steadily growing our market share. Therefore, we expect to significantly reverse this trend by the end of December. While we expect continued challenging market condition it the next quarter, we are focused on execution. Our efficiency levels are at the same level of 2016 and our variable costs are also in line with 2016. We are proactively managing our controllable fixed cost and continue to grow our West Coast market penetration. We are also anticipating higher volume in our CP division starting in Q2 as we have successfully secured new important strategic customers. Thank you. I will now turn the call back to Mario for the conclusion. Mario?

Thank you, Jean. We expect near term results to benefit from several favorable external factors. The first of these are the change related to the recent corporate tax reform in the U.S., which will reduce our U.S. corporate tax rate to approximately 25% in 2018 from 38% previously. The second is the current lower average price of OCC, which accounts for a large portion of the raw material we use across our operation and the recently announced price increase in our Containerboard segment that will benefit that would be effective on March 5, 2018. Providing additional support for near-term performance are positive underlying industry fundamentals for both Containerboard businesses in North America and Boxboard operation in Europe. As discussed earlier in the call, our tissue division continued to face difficult market conditions, new industry capacity addition and the sales ramp-up of the Oregon converting facility. That said, our sales and marketing effort on the West Coast are generating positive results and we are confident that this facility will become a solid contributor to our tissue division in the future. We have provided an overview of our near-term outlook for each of our business segment in slide 31 in our investor presentation. The slide highlights the expected net impact of various factors on our operational performance, both on a sequential and year-over-year basis. To summarize, Q1 results in European Boxboard and Containerboard are expected to be stronger both year-over-year and sequentially. First quarter results in the specialty product group are expected to be positive sequentially and slightly below prior year levels. And finally, for the reason highlighted throughout the call, Q1 results from our tissue paper segment are expected to decrease year-over-year, but increase sequentially. Before we open the call for questions, let me touch briefly on some of our plans for 2018. As highlighted on slide 30 our investor presentation, we are planning to invest between $250 million and $300 million during the year. Note that this amount is net of the proceeds from the sales of our New York facility. We are planning additional investment in tissue over the next several years that will further modernize both the retail and the away from home platform and equip this segment with an active base that is positioned for the long term growth. In summary, as we move forward we are focusing on project that will increase integration, modernize our operation base and optimize our geographical footprint. I will now open the line for questions. Operator?

Thank you [Operator Instructions]. Your first question comes from the line of Hamir Patel of CIBC Capital Markets. Please go ahead.

I had a couple of questions, perhaps we start with Allan. The CapEx spend this year potentially offset $385 million, seems a lot higher than I think the $200 million figure that you guys were previously pointing to. So could you elaborate more on maybe where that incremental increase is coming from in terms of the various divisions and what step down in CapEx should we expect in 2019?

Some of the CapEx you see on the envelope we have this year are carry over from 2017 as we have large project going on as the strategic projects and this project is still ongoing, so we’re still installing equipment. So a good chunk of this is part of the envelope. Secondly, as we said on the call, we want to accelerate the modernization on our tissue, both retail and away from home. As you know, this market is getting very active. There is a lot of activities and investment so we want to make sure that we stay competitive in this field of activity. And so a large portion of the CapEx we announced today will be directed to the same area. At the time, we have to protect our recovery and recycling division on SPG and we will be investing as well to increase our capacity on the recycling side. What will be the envelope for 2019? It's a little early to talk about this. I think we will just finish 2018, see how we progress in the installation of all these large projects. Most of the envelope is directed towards large investment, large CapEx. So it's not spread all over the company so that's basically my answer.

And I guess some of that might be capital to just maintain your competitive position. So what incremental EBITDA you expect from the growth CapEx and then what's timing for that to show up in your results?

Well, in terms of numbers, that's not something we’re going to disclose right now. But in terms of delivery to our results, you know that if we modernize and we add new lines, let's say in tissue, it takes a few months or even a year to order and then to install. So we should the main impact in 2019. So some projects are still to be finalized and defined so when we’ll have more clarity we can be a bit more precise on the where and the when of the CapEx will be put into operations. But so far that's what we can say.

And Mario another question for you on the Boxboard Europe business. Just curious how much mix paper gets actually used in producing boxboard versus OCC and is the mix paper effectively free right now for producers?

We have the same dynamic in terms of recycling. I would say it’s probably on the average of the 50-50 depending of the grade they’re producing. Don't forget that we are also producing virgin boxboard in Europe. So on the next side I would say probably 40% mix, 40% OCC and 20% virgin. But that’s an average and I would have to come back to you to be a little more precise, that’s my take.

And how do mix paper prices in Europe fare relative to North America?

I would say similar to what we lived in North America.

And just final question I had on the containerboard business for Charles. The RISI benchmarks look like they average about hundred bucks in Q4. And I am assuming you guys have some high cost inventory that perhaps you’re working through in the fourth quarter. But can you help us understand what OCC -- maybe what that OCC price that showed up in your P&L was and how long will it take before your results reflect spot pricing?

In the Q4, you’re talking about Q1 2018 compared to Q4?

Even the benchmark look like it averaged about hundred bucks, but it perhaps maybe you guys have some higher cost inventory going into the quarter, I know there’s a lot. Have you in the industry myself included that perhaps OCC was going to run up by the end the Q4 and it didn't happening. So just curious if maybe you positioned yourselves with some higher cost inventory?

You’re right about that. The impact for the Q4 is around Q2 to Q4 about $8 of principal that’s what we -- about $8 and we’re going to have additional impact in Q1 2018.

Your next question comes from the line of Paul Quinn of RBC Capital Markets. Please go ahead.

I just had a couple questions. One on Containerboard, just if you could give us an idea of how you've been operating in January and what that rate has been?

As I mention at the start of 2018 in January and February, we did have some issues in our paper mills, two of our paper mills, one with a major electrical break down which will bring our operating rates about the same level of the Q4, including our shutdown. So we’re going to be around 90% to 92%.

In terms of the conversations you've been having with your customers on the March 5th price increase. Can you give us some color on how that's going?

I'm not going to comment on too much detail, but what I can tell you is we made the announcement. As you know, we made $50 on liner, $60 on the medium. We also made an announcement of 8% on our converted products and as we speak, we’re still focusing on making that happen.

And then maybe we can switch over to recover paper. And just I guess maybe overall forecast on Chinese recover paper imports in 2018, what you’ve seen for the Q1 import permits versus what you expected and what you expect for the balance of the year and how that’s going to affect pricing, pretty easy question overall.

I wish I would have the crystal ball to answer your question. I think something that is clear -- and actually the real start date of the application of the new regulation was today March 3rd. And speaking with my team, we’re very anxious to see what’s going to happen over the next two months to see exactly how the China authorities will be applying the new rules for contaminants. As you’re aware, the actual percentage that I’ll put in these are extremely low, very difficult to achieve even in almost idle condition. So we’re very anxious to see what exactly will be happening over the next two months. With regards to -- as I said in my earlier presentation, I haven’t seen yet the import licenses for the second quarter. As you are aware, the first quarter was 26% below last year. I think we need to keep the same trend. Honestly, I don't have the answer for that. While we do see always that it’s for sure higher quality OCC will be something that will be become more desirable for this type of exports. The average OCC coming from [Mirth] will likely not going to be able to do the job and its going to be very difficult for that volume to move to China with the quality coming up on the lines now. So it’s likely going to be more a domestic volume.

So it sounds like you might have a split in the market between the really super high quality stuff that can get to China and the domestic stuff…

The perceptions we have at this moment, I don’t know how this going to translate into market conditions and pricing, but this is definitely something that we see coming.

And then just flipping back to your use of OCC is that -- are you -- to the most extent, domestic or do you use quite a bit of the higher premium OCC?

Well, we’re using both actually. We have large part of our supplies coming from our own recovery operations.

One question just on tissue, sound like you outlined $15 million in losses from Oregon in 2017, stated significantly reversing this. Do you expect to get back that $15 million in 2018 or is that going to be even more positive than that as you fill up your order file at the mills?

Well, obviously it will go fall at the rhythm that we're going to be able to bring sales in, but we don’t expect to reverse it all this year only partial of that. Our volume in 2018 is about twice what we expect to have or what we had as a run rate by the year end. So it’s going to help a lot but still have a lot of room before getting to possibility over there.

Just to be clear, the $15 million we stated includes also the impact on the paper mill in St. Helens because we had to adapt -- modernize and adapt the product there. And we said that the trend should be reversing by the end of the year. So on a trend basis yes will be positive but overall not positive again this year.

Your next question comes from the line of Keith Howlett of Desjardins Securities. Please go ahead. Q – Keith Howlett: I was wondering if you can provide a breakdown by the segments on the capital spending of 250 to 300 plus, the proceeds of the plant sale?

No, Keith, honestly we can't provide this detail at this moment, but later during the year we might be in a better position to give you more clarity around it, so.

But you can see by the project that we highlighted on the slide that you can have an appreciation but in terms of dollar amounts, we still have some work to finalize. Q – Keith Howlett: Perhaps just on specifically on the tissue division. Would you focus there be on additional converting capacity or is it modernization of some of your parent roll mills?

During the year what we will do in the CapEx in the tissue group will be towards converting facility, modernizing lines that we already have. So shut down lines that are older lines and bringing in new lines more efficient that will provide us, that will give us more ability to give good quality. Standardizing capacity, to answer your question, we are just replacing capacity with newer equipment. Q – Keith Howlett: And will that be bolt in your converting capacity in U.S. and Canada?

Yes.

Your next question comes from the line of Sean Steuart of TD Securities. Please go ahead.

A couple of questions, it sounds like your ERP program is wrapped up. Will Q4 corporate costs be typical of what we can expect going forward?

Well, in the corporate costs Sean, there is FX gains in that number of about $5 million resulting from the cash movement we had when we sold the Boralex investment. However, as we have said the cost related to everything we did is starting to ramp down, starting in Q1. So it should come back not at a level that we saw maybe in Q2 and Q3, but closer to what we see in Q4 and a bit lower once the costs are all removed.

And just a question on your blended tax rate, you mentioned the U.S. tax rate goes to 25 from 38. How should we think about your blended effective tax rate for the whole company in appreciating it depends on the relative contribution from each region and can you also review the NOLs you have available across your region as well?

The overall tax rate that’s about 27, so 25 in the U.S. so it will be allowing tat U.S. that 26%, 27%, 28% depending on the mix, and the NOL we have a few in the U.S. But today on the U.S. side, we don't expect to pay tax on field 2021. This might change depending on the level of CapEx we’ll do in the U.S. And in Canada, we expect the current trend to be with our NOLs in the next two three years. So that no cash, no significant cash taxes are coming two three years.

[Operator Instructions] Your next question comes from the line of Hamir Patel with CIBC Capital Markets. Please go ahead.

I just had a couple follow-up, Charles on the containerboard side, you referenced that you guys announced that converted I guess box price hike. It seem that recent pulp and paper I think it was only a week ago that only IP had announced. Have we seen other major integrators announce box likes as well yet?

Hamir, I’m not going to comment with what the others are doing. But what I can tell you is once we a container board price increase as a converter, we are going to work in increasing also the converted product. And so that’s our focus and we’re going to make that priority in the next quarter.

And then Charles typically the box price hike what that usually follows 30 days the announcement follows -- 30 days after the parent rolls and then what’s -- can you remind us the timing of how you expect that to flow through realizing the full increase down on the box?

I’m going to try to -- first the 30 days it start of the price increase on the converting product for the main product. But as I mentioned in the past, it takes about four or five months to get to the full benefit of the price increase due to contracts and the sequence of the price increase that’s usually the time that it takes to get the full benefit.

And just final question I have for John, on the tissue side. And I appreciate the comments about, just curious when we look at EBITDA for the tissue segment for the year just under $95 million, just given how weak Q4 was should we be bracing for 2018 to be down year-over-year in tissue?

It's a good question and I don’t want to speak relate a lot of things that are moving right now. One thing for sure we are affected by the pulp price and the [indiscernible] [sorted office suite] price drastically. So depending on this, this is for us the main driver. We are finding solution for the volume part. So volume part will get better. So it's really tough for me to answer that but my answer would be look at the raw material price and that’s going to be the main driver for us this year.

So certainly we can have that product, productivity is good. Volume is all positive we are making inroad. So it’s a matter of input cost that is the main driver maybe for several few next years.

And maybe just a question for Mario. On the investor slides during the past, you targeted a longer-term EBITDA margin of 15%. Do you still see that as line of sight and how long you think it takes to get there?

So as you know when we presented this to market, we give ourselves five years, it’s a five year split. And yes, we keep on the same objective and the investment we’re making today, mainly Piscataway or Scappoose, will benefit the company long term no doubt. So no, we have not changed our objective of 15% and the target is still in five years by 2022.

Your next question comes from the line of Keith Howlett of Desjardins Securities. Please go ahead.

I was just wonder if you could explain the interrelationship between the away from home tissue market and the retail tissue market. Are they priced independently or if there is capacity or overcapacity issues in retail does that flow over to away from home? And can you introduce away from home price increases if tissue -- if the retail segment is not experiencing any price increase?

Well, that’s a very good question, Keith. Normally, the two sectors are totally different because you will see more version on the retail side than the away from home side. So normally, they are very independent and they're not necessarily using the same raw material a lot more OCC in away from home and retail there is basically none. So that’s one of the first things. The relationship between the two is as you know there is so much capacity addition in terms of the retail U.S. producer on the jumbo roll side that those guys right now have nothing to do with their jumbo roll. So what do they do with that? They sell it to away from home converter. And they sell it at a good price, because they have too much capacity. They don’t want to stop their machines. So based on that, it is tough to increase prices in the away from home market because the converter are not having price increase in their input costs. This is a producer that have the input cost that is going up. So that’s the relationship that we feel that we see and in our case, its hand tower that is our biggest problem. But in general that what is happening retail producer are selling bath napkin towel to converter that maintain their prices at the same level. So that’s what we see right now. That’s the worst timing for us with the pulp and [indiscernible] [sorted office suite] very high and having hard time to push price increases in the market.

Thank you. There are no further questions at this time. Mr. Plourde, please continue.

Thank you, everyone. Have a good day. And we’re looking forward to see you in the next call. Have a good day.

Thank you, ladies and gentlemen. This concludes today’s conference call. You may now disconnect.