In the first quarter of 2013, the Company recorded an after-tax credit to the statements of other comprehensive income (loss) of $5.8 million in relation to changes in the valuation of its defined benefit post-employment compensation plans. The gain reflects the return on plan assets partly offset by a slightly lower discount rate used to value the net defined benefit obligation. Defined benefit actuarial losses, net of taxes, were recorded in both the comparable periods, with an after-tax charge of $3.6 million in the fourth quarter of 2012 and an after-tax loss of $3.3 million in the first quarter of 2012.
In addition, the Company recorded $3.5 million of other comprehensive income in the quarter for foreign exchange differences for foreign operations and $1.9 million in the previous quarter, reflecting the weakening of the Canadian dollar by 2% over the quarter. The first quarter of 2012 included other comprehensive loss of $3.6 million, when the Canadian dollar strengthened over the period.
SUMMARY OF FINANCIAL POSITION
The following table summarizes Canfor's cash flow and selected ratios for and as at the end of the following periods(24):
(millions of Canadian dollars, Q1 Q4 Q1except for ratios) 2013 2012 2012--------------------------------------------------------------------------Increase (decrease) in cash and cash equivalents $ 23.3 $ (7.2) $ (19.8) Operating activities $ 56.0 $ 27.6 $ (51.8) Financing activities $ 8.1 $ 2.0 $ 137.0 Investing activities $ (40.8) $ (36.8) $ (105.0)Ratio of current assets to current liabilities 1.5:1 1.3:1 1.6:1Net debt to capitalization 18.8% 20.0% 22.0%ROIC - Consolidated 4.8% 2.4% (1.5)%ROCE - Canfor solid wood business(25) 5.6% 1.9% (1.6)%--------------------------------------------------------------------------(24) Certain prior period amounts have been restated due to the adoption ofIFRS 11, Joint Arrangements. Further details can be found in the Company'sunaudited interim consolidated financial statements.(25) Return on Capital Employed ("ROCE") for the Canfor solid wood businessrepresents consolidated ROCE adjusted to remove the Company's interest inCanfor-LP OSB and pulp and paper operations, including Canfor Pulp and theTaylor pulp mill. Consolidated ROCE is equal to shareholder net income forthe period plus finance expense, after tax, divided by the average capitalemployed during the period (which consists of current and long-term debt andoperating loans, and shareholders' equity, less cash and temporaryinvestments).Changes in Financial Position
Cash generated from operating activities was $56.0 million in the first quarter of 2013, compared to cash generated of $27.6 million in the previous quarter and cash used of $51.8 million in the same quarter of 2012. Higher cash operating earnings in the current quarter were partly offset by an increase in working capital largely reflecting a seasonal build in log inventories ahead of spring break-up and higher trade accounts receivable in the lumber segment due to higher lumber prices.
Financing activities generated cash of $8.1 million in the current quarter, compared to $2.0 million in the previous quarter and $137.0 in the first quarter of 2012. The current quarter's financing cash flows included an additional draw of $13.0 million on the Company's operating loans, $81.0 million less than the draw in the same quarter of 2012 due to stronger operating cash flows in the current period. Finance expenses paid in the current quarter were $2.5 million, down $5.1 million from the previous quarter and down $0.6 million from first quarter of 2012, principally reflecting the timing of scheduled interest payments on long-term debt. Cash distributions to non-controlling interests were $2.4 million, up $2.0 million from the fourth quarter of 2012 largely reflecting the reinstatement of CPPI's quarterly dividend in February 2013, but down $1.9 million from the same period of 2012. The first quarter of 2012 financing cash flows also included $100.0 million of new term debt as well as a $49.9 million (US$50.0 million) repayment on term debt made that quarter.
