ACCOUNTING STANDARDS ISSUED AND NOT APPLIED
In May 2011, the International Accounting Standards Board ("IASB") issued IFRS 9, Financial Instruments, which is effective for annual periods beginning on or after January 1, 2015, with early adoption permitted. IFRS 9 is not expected to have a material impact on amounts recorded in the financial statements of Canfor.
Further details of the new accounting Standard and the potential impact on Canfor can be found in the Company's Annual Report for the year ended December 31, 2012.
INTERNAL CONTROLS OVER FINANCIAL REPORTING
During the quarter ended March 31, 2013, there were no changes in the Company's internal controls over financial reporting that materially affected, or would be reasonably likely to materially affect, such controls.
RISKS AND UNCERTAINTIES
A comprehensive discussion of risks and uncertainties is included in the Company's 2012 annual statutory reports which are available on www.canfor.com or www.sedar.com.
SELECTED QUARTERLY FINANCIAL INFORMATION(26)
-------------------------------------------------------------------------- Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 2013 2012 2012 2012 2012 2011 2011 2011--------------------------------------------------------------------------Sales and income (millions of Canadian dollars)Sales $786.3 $700.3 $663.7 $685.0 $ 593.8 $ 576.2 $ 602.1 $619.1Operating income (loss) $100.0 $ 49.0 $ 18.1 $ 22.6 $(18.4) $(63.1) $ 15.4 $ 27.4Net income (loss) $ 67.5 $ 24.7 $ 18.8 $ 5.0 $(12.9) $(38.1) $ (9.6) $ 26.2Shareholder net income (loss) $ 61.9 $ 21.3 $ 20.5 $ 2.6 $(18.0) $(44.1) $(21.6) $ 2.1Per common share (dollars)Shareholder net income (loss) - basic and diluted $ 0.43 $ 0.15 $ 0.14 $ 0.02 $(0.13) $(0.31) $(0.15) $ 0.01--------------------------------------------------------------------------StatisticsLumber shipments (MMfbm) 1,135 1,149 1,133 1,158 994 974 969 973Pulp shipments (000 mt) 308 298 269 282 328 275 291 303--------------------------------------------------------------------------Average exchange rate - US$/Cdn$ $0.991 $1.009 $1.005 $0.990 $ 0.999 $ 0.977 $ 1.020 $1.033--------------------------------------------------------------------------Average Western SPF 2x4 #2&Btr lumber price (US$) $ 391 $ 335 $ 300 $ 295 $ 266 $ 238 $ 246 $ 240Average SYP (East) 2x4 #2 lumber price (US$) $ 452 $ 386 $ 322 $ 325 $ 298 $ 260 $ 259 $ 251Average OSB price - North Central (US$) $ 418 $ 332 $ 312 $ 235 $ 202 $ 190 $ 184 $ 172Average NBSK pulp list price delivered to U.S. (US$) $ 897 $ 863 $ 853 $ 900 $ 870 $ 920 $ 993 $1,025----------------------------------------------------------------------------------------------------------------------------------------------------(26) Certain 2012 amounts have been restated due to the adoption of amendedIAS 19, Employee Benefits and IFRS 11, Joint Arrangements. 2011 amounts havenot been restated. Further details can be found in the Company's unauditedinterim consolidated financial statements.
In addition to exposure to changes in product prices and foreign exchange, the Company's financial results are impacted by seasonal factors such as weather and building activity. Adverse weather conditions can cause logging curtailments, which can affect the supply of raw materials to manufacturing facilities. Market demand also varies seasonally to some degree. For example, building activity and repair and renovation work, which affects demand for lumber products, is generally stronger in the spring and summer months. These factors, along with global supply and demand conditions, affect the Company's shipment volumes.
