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The definition of Adjusted EBITDA was changed in the fourth quarter, 2012 to include an adjustment for long term incentive compensation expense (recovery). Prior periods have been restated to reflect this change.
Volume and Price Statistics 2012 2011 ------------------------------------------ Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 ------------------------------------------Lumber sales (million fbm) 384 366 363 320 318 336 334 313Lumber production (million fbm) 347 350 333 323 294 313 325 332Log sales(1) (thousand cubic metres) 267 345 379 361 310 430 314 301Log production(1) (thousand cubic metres) 748 817 840 892 795 1,002 796 816Average selling price ($/thousand - lumber(2) fbm) $452 $442 $448 $418 $420 $ 415 $400 $419Average selling price ($/cubic - logs(1) metre) $ 76 $ 75 $ 75 $ 64 $ 69 $ 74 $ 82 $ 61Average selling price ($/thousand - pulp chips fbm) $ 39 $ 43 $ 46 $ 48 $ 51 $ 48 $ 44 $ 401. B.C. operations2. Gross sales before duties and export taxes
Quarterly trends normally reflect the seasonality of the Company's operations. Logging operations are seasonal due to a number of factors including weather, ground conditions and fire season closures. Generally, the Company's B.C. Coastal logging divisions experience higher production levels in the latter half of the first quarter, throughout the second and third quarters and in the first half of the fourth quarter. Logging activity in the B.C. Interior is generally higher in the first half of the first quarter, slows during spring thaw and increases in the third and fourth quarters. Sawmill operations are less seasonal than logging operations but are dependent on the availability of logs from logging operations, including those from suppliers. In addition, the market demand for lumber and related products is generally lower in the winter due to reduced construction activity, which increases during the spring, summer and fall.
Operating rates started strong in the first quarter, 2011, with rapid growth in demand from export markets, particularly China, offset by weak North American demand due to the languishing housing sector and record low starts. Rates tapered marginally through the end of the third quarter, 2011, as China introduced measures to cool its overheated housing market and U.S. demand remained weak. Demand from China stabilized through 2012, and modest but steady recoveries in the U.S. housing market helped drive up domestic demand and pricing through the end of 2012.
The volatility of the Canadian dollar also impacted results, given that historically over 75% of the Canadian operation's lumber sales are to U.S. and export markets and are priced in U.S. dollars. A weaker Canadian dollar increases the lumber sales realizations in Canada, but increases the impact of losses in U.S. operations when converted to Canadian dollars.
No deferred tax assets arising from loss carry-forwards were recognized during 2011 or 2012, with one minor exception in the fourth quarter, 2012.
Quarter 4, 2012 Compared to Quarter 4, 2011
