HispanicBusiness

Unless otherwise noted, all financial references in this MD&A are in Canadian dollars.

References in this MD&A to "Interfor" and the "Company" mean International Forest Products Limited, together with its subsidiaries.

Forward-Looking Statements

This report contains forward-looking statements. Forward-looking statements are statements that address or discuss activities, events or developments that the Company expects or anticipates may occur in the future. Forward-looking statements are included in the description of areas which are likely to be impacted by the description of future cash flows and liquidity under the headings "Overview", "Income Taxes", "Cash Flow and Financial Position", "Acquisition of Rayonier's Wood Products Business" and "Agreement to Purchase Springer Creek Timber Tenure"; changes in accounting policy under the heading "Accounting Policy Changes"; and in the description of economic conditions under the headings "Sales" and "Outlook". These forward-looking statements reflect management's current expectations and beliefs and are based on certain assumptions including assumptions as to general business and economic conditions in the U.S. and Canada, as well as other factors management believes are appropriate in the circumstances including, among others: product selling prices, raw material and operating costs, changes in foreign currency exchange rates, and other factors referenced herein. Such forward-looking statements are subject to risks and uncertainties and no assurance can be given that any of the events anticipated by such statements will occur or, if they do occur, what benefit the Company will derive from them. A number of factors could cause actual results, performance or developments to differ materially from those expressed or implied by such forward-looking statements, including those matters described herein and in Interfor's current Annual Information Form available on www.sedar.com. Accordingly, readers should exercise caution in relying upon forward-looking statements and the Company undertakes no obligation to publicly revise them to reflect subsequent events or circumstance, except as required by law.

Review of Operating Results

Overview

The Company recorded net earnings of $15.2 million, or $0.27 per share, for the first quarter of 2013 as compared to a net loss of $6.7 million, or $0.12 per share for the first quarter of 2012. Adjusted net earnings for the first quarter, 2013 was $17.8 million, or $0.32 per share, in contrast to an adjusted net loss of $4.1 million, or $0.07 per share for the first quarter, 2012.

EBITDA and Adjusted EBITDA for the first quarter of 2013 increased to $30.6 million and $37.1 million, compared to $5.8 million and $7.0 million, respectively, for the same quarter of 2012.

Building off positive momentum in the fourth quarter of 2012, U.S. housing starts and demand for lumber continued to strengthen during the first quarter, 2013. The strength of the market in North America was further bolstered by ongoing demand in offshore markets and limited supply, resulting in the strongest pricing environment experienced since the first quarter of 2005.

The average price reported by Random Lengths for SPF 2x4 #2&Btr was US$391 per mfbm for the first quarter of 2013 as compared to US$266 per mfbm for the same quarter in 2012, and US$335 per mfbm for the fourth quarter of 2012. Higher lumber prices also resulted in a zero rate export tax in the first quarter of 2013 as compared to a 15% rate in the first quarter of 2012.