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Analysis of Specific Material Items Affecting Comparability of Shareholder Net Income (Loss)(1)
After-tax impact, net of non- controlling interests(millions of Canadian dollars, Q1 Q4 Q1except per share amounts) 2013 2012 2012--------------------------------------------------------------------------Shareholder Net Income (Loss) $ 61.9 $ 21.3 $ (18.0)Foreign exchange (gain) loss on long-term debt and investments, net $ 2.3 $ 1.2 $ (2.7)(Gain) loss on derivative financial instruments $ (2.2) $ 6.5 $ (5.1)Canfor's 50% interest in Canfor-LP OSB's income, net of tax(6) $ 8.3 $ - $ -Net gain on post retirement and pension plan amendments $ - $ (8.7) $ -Increase in fair value of ABCP $ - $ - $ (1.1)Costs related to Tembec acquisition $ - $ - $ 2.8--------------------------------------------------------------------------Net impact of above items $ 8.4 $ (1.0) $ (6.1)--------------------------------------------------------------------------Adjusted Shareholder Net Income (Loss) $ 70.3 $ 20.3 $ (24.1)----------------------------------------------------------------------------------------------------------------------------------------------------Shareholder Net Income (Loss) per share (EPS), as reported $ 0.43 $ 0.15 $ (0.13)Net impact of above items per share $ 0.06 $ (0.01) $ (0.05)--------------------------------------------------------------------------Adjusted Shareholder Net Income (Loss) per share $ 0.49 $ 0.14 $ (0.18)--------------------------------------------------------------------------
The Company reported operating income of $100.0 million (adjusted $111.0(6) million) for the first quarter of 2013, more than double the $49.0(1) million recorded for the fourth quarter of 2012. Improved results reflected a strengthening U.S. housing market and improved operating performances at the Company's lumber and pulp mills. Lumber sales realizations experienced strong gains during the quarter, with both Western Spruce/Pine/Fir ("SPF") and Southern Yellow Pine ("SYP") products appreciating to levels not seen in almost eight years. The previous quarter results included a one-time accounting gain related to the Company's salaried post retirement benefit plans.
Lumber markets continued to strengthen through the first quarter of 2013 as a result of the recovering U.S. housing market and solid offshore lumber demand. U.S. housing activity reached the highest levels in over five years, with total U.S. housing starts averaging 969,000 units SAAR (seasonally adjusted annual rate), up 7% from the previous quarter. U.S. housing starts ended the quarter at 1,036,000 units SAAR in March, the highest monthly starts since mid-2008. Offshore demand remained strong through the quarter. In contrast, the Canadian housing market showed some weakness in the quarter, falling 26,000 units, or 13%, from the fourth quarter of 2012, to 178,000 units SAAR in the first quarter of 2013. Global softwood pulp markets remained fairly challenging, although conditions improved slightly through the quarter, resulting in modest price gains in all regions.
