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Record Production and Tax Recovery Boost Interfor's Q1 Results

Earnings Tempered by Transportation Issues

VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 05/06/14 -- INTERNATIONAL FOREST PRODUCTS LIMITED ("Interfor" or the "Company") (TSX: IFP.A) reported net earnings of $27.5 million or $0.43 per share in the first quarter of 2014, compared to net earnings of $11.4 million or $0.18 per share and $15.2 million or $0.27 per share in the fourth and first quarters of 2013, respectively.

EBITDA, adjusted to exclude the effects of long-term incentive compensation and other items, was $39.2 million compared with $36.2 million and $37.1 million in the fourth and first quarters of 2013, respectively.

Lumber production in the first quarter was a record 495 million board feet, up 27% over the same period of 2013. This growth reflects a realization on strategic capital investments over the past several years and production capacity added through the acquisition of six mills in the US Southeast over the past 14 months.

Lumber sales of 439 million board feet, including wholesale and agency volumes, lagged production by 11% during the quarter due to transportation bottlenecks, including a strike in the Port of Vancouver and limited availability of both trucks and railcars. Consequently, the Company held excess lumber inventory of approximately 70 million board feet at the end of the first quarter. Container truck drivers servicing the Port of Vancouver returned to work near the end of March 2014 and throughput volumes are expected to return to normal levels in the second quarter as congestion dissipates. Railcar availability should improve as weather in the US returns to seasonal norms.

On March 14, 2014, the Company completed the acquisition of Tolleson Ilim Lumber Company ("Tolleson") from Ilim Timber Continental, S.A. The operations acquired include two sawmills in Perry and Preston, Georgia, plus a remanufacturing facility in Perry. This acquisition is consistent with Interfor's strategy of adding capacity in attractive regional markets and brings Interfor's annual capacity to more than 2.6 billion board feet. Non-recurring transaction costs of $1.1 million related to the acquisition were deductions from net earnings and EBITDA in the first quarter.

Net earnings includes a deferred income tax recovery of $16.6 million. In conjunction with recognizing a deferred tax liability in accounting for the acquisition of Tolleson, the Company recognized previously unrecognized deferred tax assets related to its US operations.

Average commodity lumber prices in US dollar terms for the quarter were mixed as compared to the fourth quarter of 2013, with Hem-Fir studs up 16% while SPF 2x4 and SYP 2x4 East were down 1% and 3%, respectively. However, first quarter results benefited from a strengthening of the US dollar against the Canadian dollar by an average of 5.2% compared to the fourth quarter of 2013 as the majority of sales are denominated in US dollars.

Long-term incentive compensation amounted to $6.9 million or $0.11 per share in the first quarter.

In the first quarter, Interfor generated $32.1 million in cash from operations before working capital changes and $16.0 million after working capital changes. Capital spending, excluding the Tolleson acquisition, amounted to $15.3 million during the quarter.

Net debt closed the quarter at $269.5 million or 30.7% of invested capital. The increase in net debt as compared to December 31, 2013, reflects drawings of US$112.5 million on the Company's credit lines during the first quarter to fund the acquisition of Tolleson, as well as the impact of the undershipments of lumber inventory.

The decline in US housing starts reported for the first quarter of 2014 is considered temporary, with a gradual improvement in starts and associated lumber demand anticipated throughout the remainder of the year. Japan could see a moderate decline in housing activity following the implementation of a VAT increase in April 2014 as consumers adjust to higher housing prices. Business activity in China is expected to be reasonably stable in the near term as the market adjusts to tightening credit policies and recent changes in currency values. Long-term interest rates are expected to increase while continued weakness in the Canadian dollar relative to the US dollar is anticipated.

Interfor will continue its disciplined approach to production, cost control, inventory management, and capital spending to help position the Company to deliver above average returns on invested capital as conditions improve. At the same time, Interfor will remain alert to opportunities to position the Company for long-term success.

FORWARD-LOOKING STATEMENTS

This release contains information and statements that are forward-looking in nature, including, but not limited to, statements containing the words "will" and "is expected" and similar expressions. Such statements involve known and unknown risks and uncertainties that may cause Interfor's actual results to be materially different from those expressed or implied by those forward-looking statements. Such risks and uncertainties include, among others: general economic and business conditions, product selling prices, raw material and operating costs, changes in foreign-currency exchange rates, and other factors referenced herein and in Interfor's Annual Report and Management Information Circular available on www.sedar.com. The forward-looking information and statements contained in this report are based on Interfor's current expectations and beliefs. Readers are cautioned not to place undue reliance on forward-looking information or statements. Interfor undertakes no obligation to update such forward-looking information or statements, except where required by law.

ABOUT INTERFOR

Interfor is a growth-oriented lumber company with operations in Canada and the United States. Our Company has annual production capacity of more than 2.6 billion board feet and offers one of the most diverse lines of lumber products to customers around the world. For more information about Interfor, visit our website at www.interfor.com.

There will be a conference call on Wednesday, May 07, 2014 at 8:00 a.m. (Pacific Time) hosted by INTERNATIONAL FOREST PRODUCTS LIMITED for the purpose of reviewing the Company's release of its first quarter 2014 financial results.

The dial-in number is 1-866-782-8903. The conference call will also be recorded for those unable to join in for the live discussion, and will be available until May 21, 2014. The number to call is 1-866-245-6755, Passcode 928739.

Financial and Operating Highlights (1)


                                                           For the 3 months
                                                            ended March 31,
                                                        --------------------
                                Unit                         2014      2013
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Financial Highlights(2)
Total sales                     $mm                         294.8     242.5
  Lumber                        $mm                         230.4     191.4
  Logs                          $mm                          37.6      26.1
  Wood chips and other          $mm
   residual products                                         22.4      16.6
  Ocean freight and other       $mm                           4.4       8.4
Operating earnings              $mm                          13.3      17.2
Net earnings                    $mm                          27.5      15.2
Net earnings per share, basic   $/share
 and diluted                                                 0.43      0.27
EBITDA(3)                       $mm                          32.3      30.6
Adjusted EBITDA(3)              $mm                          39.2      37.1
Adjusted EBITDA margin(3)       %                            13.3%     15.3%

Total assets                    $mm                       1,079.3     754.3
Total long-term debt            $mm                         274.8     213.8
Pre-tax return on total         %
 assets(3)                                                    4.4%      8.2%
Net debt to invested            %
 capital(3)                                                  30.7%     34.0%

Operating Highlights
Lumber production               million fbm                   495       390
Lumber sales                    million fbm                   439       383
Lumber - average selling        $/thousand fbm
 price(4)                                                     525       500
Log production(5)               thousand cubic metres         834       902
Log sales(5)                    thousand cubic metres         398       289
Logs - average selling          $/cubic metre
 price(5)                                                      82        76
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Notes:


(1)  Figures in this table may not add due to rounding.
(2)  Financial information presented for quarterly periods in this MD&A is
     prepared in accordance with IFRS but is unaudited.
(3)  Refer to the Non-GAAP Measures section of this MD&A for definitions and
     reconciliations of these measures to figures reported in the Company's
     consolidated financial statements.
(4)  Gross sales before export taxes.
(5)  For B.C. operations only.

Summary of First Quarter 2014 Financial Performance

Sales

Interfor realized $294.8 million of total sales, up 21.6% from $242.5 million in the first quarter of 2013, driven by the sale of 439 million board feet of lumber at an average price of $525 per mfbm. Lumber sales volume and average selling price increased 56 million board feet and 5.0%, respectively, over the same quarter of 2013.

The growth in lumber sales volume was primarily in the U.S. market, where sales increased by 63 million board feet or 26.9% over the first quarter of 2013. This growth is mostly attributable to our six sawmills in Georgia acquired since March of 2013.

The increase in the average selling price of lumber is primarily related to the strengthening of the U.S. dollar against the Canadian dollar by 9.5% and higher prices realized in China and Japan as compared to the first quarter of 2013, partially offset by a change in species sales mix with a higher proportion of Southern Yellow Pine.

Log sales of $37.6 million represent an increase of $11.5 million or 43.9% compared to the same quarter of 2013. Increases of 37.7% and 7.9% in B.C. log sales volume and average selling price, respectively, contributed to this sales growth.

Sales of wood chips and other residual products increased to $22.4 million, up $5.8 million over the comparable quarter of 2013. This increase mainly reflects the 26.9% increase in lumber production from Q1'13.

Operations

Production costs increased by $48.5 million or 24.5% over the first quarter of 2013, explained primarily by the 14.6% and 37.7% increases in lumber and B.C. log sales volumes, respectively. The remainder of the cost increase relates to generally higher log and conversion costs across our operations.

Amortization of plant and equipment was $12.3 million, up 44.0% from the first quarter of 2013. The majority of this increase is explained by the inclusion of depreciation on the six mills in the U.S. Southeast acquired since March 2013, and generally elevated operating rates.

Depletion and amortization of timber, roads and other was $6.3 million, up 37.2% from the similar quarter of 2013. This increase is mostly related to additional amortization of timber licenses in our B.C. Interior operations.

Corporate and Other

Selling and administration expenses were $8.9 million, up $1.8 million from the first quarter of 2013. This increase includes $1.1 million of non-recurring expenses related to the Tolleson acquisition.

Long term incentive compensation expense was $6.9 million, up $0.3 million from the comparable 2013 period, reflecting changes in the fair value of the Company's share-based incentive compensation plans.

Finance costs were $1.8 million, in-line with the first quarter of 2013 based on similar average debt levels for the two periods.

Income Taxes

The Company recorded an income tax recovery of $16.2 million, comprised of $0.4 million of current tax expense net of a $16.6 million deferred tax recovery. In conjunction with recognizing a $24.3 million deferred tax liability in accounting for the acquisition of Tolleson, the Company recognized $19.3 million of previously unrecognized deferred tax assets related to its U.S. operations.

Net Earnings

The Company recorded net earnings of $27.5 million or $0.43 per share, higher compared to net earnings of $15.2 million or $0.27 per share in the first quarter of 2013. Lower operating earnings in Q1'14 were more than offset by the $16.6 million deferred tax recovery discussed above.

Liquidity

Balance Sheet

Interfor completed the first quarter of 2014 in a strong financial position, with $269.5 million of net debt representing 30.7% of invested capital. Net debt increased $128.8 million from December 31, 2013, primarily due to borrowings for the acquisition of Tolleson.

As at March 31, 2014, the Company had net working capital of $130.9 million and available capacity on operating and term facilities of $119.1 million. These resources, in addition to cash generated from operations, will be used to support our working capital requirements, debt servicing commitments and capital expenditures. We believe that Interfor will have sufficient liquidity to fund operating and capital requirements for the foreseeable future.

Cash Flow from Operating Activities

The Company generated $32.1 million of cash flow from operations, before changes in working capital, down $0.8 million from the comparable quarter of 2013. Higher sales were offset by log and conversion cost increases. A $1.8 million increase in selling and administration costs also contributed to the decline, with $1.1 million of this being of a non-recurring nature related to the Tolleson acquisition.

Total cash generated from operations after changes in working capital was $16.0 million, up from $9.4 million in the comparable quarter of 2013. This improvement is attributable to a net working capital increase of $16.1 million, down from the $23.4 million increase during the same quarter of 2013.

Cash Flow from Investing Activities

Investing activities totaled $137.4 million in Q1'14, including $122.3 million related to the Tolleson acquisition, $10.1 million for mill improvements and $4.4 million for development of logging roads. Discretionary mill improvements during the quarter included work on a new kiln at the Thomaston sawmill and a Weinig moulder at the Gilchrist sawmill.

Investing activities totaled $90.7 million in Q1'13, including $82.8 million related to the Rayonier acquisition, $5.2 million for improvements primarily at the Grand Forks and Castlegar sawmills, and $2.6 million for development of logging roads.

Cash Flow from Financing Activities

During Q1'14, the Company funded its acquisition of Tolleson in part with total drawings of US$112.5 million from its Revolving Term Line and Operating Line. Interfor also utilized its credit facilities in operating activities for total net drawings of $123.8 million.

In Q1'13, Interfor funded its acquisition of Rayonier's Wood Products Business with total drawings of $79.3 million from its Revolving Term Line and Operating Line.

Capital Resources

In conjunction with the acquisition of Tolleson, Interfor increased the credit available on two of its facilities to ensure sufficient liquidity and flexibility post-transaction. On March 31, 2014, the Company increased the credit available under its Revolving Term Line from $200 million to $250 million, without change to other terms and conditions. On March 21, 2014, the Company increased the credit available under its U.S. Operating Line from US$20 million to US$30 million, without significant change to other terms and conditions. The following table summarizes Interfor's credit facilities and availability as of March 31, 2014:


                                      Revolving   Senior       U.S.
Thousands of Canadian      Operating       Term  Secured  Operating
 dollars                        Line       Line    Notes       Line    Total
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Available line of credit
 and maximum borrowing
 available                    65,000    250,000   55,265     33,159  403,424
Less:
  Drawings                    31,443    188,122   55,265          -  274,830
  Outstanding letters of
   credit included in
   line utlization             8,882          -        -        608    9,490
----------------------------------------------------------------------------
Unused portion of
 facility                     24,675     61,878        -     32,551  119,104
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Interfor continues to maintain its disciplined focus on monitoring discretionary capital expenditures, optimizing inventory levels and matching production with offshore and domestic demand. Based on current pricing, cash flow projections and existing credit lines, the Company believes it has sufficient liquidity to meet all of its financial obligations.

Transactions Between Related Parties

The Company did not have any transactions between related parties in the quarter ended March 31, 2014.

Off-Balance Sheet Arrangements

The Company has off-balance sheet arrangements which include letters of credit and surety performance bonds, primarily for timber sales. At March 31, 2014, such instruments aggregated $28.5 million (December 31, 2013 - $26.7 million). Off-balance sheet arrangements have not had, and are not reasonably likely to have, any material impact on the Company's current or future financial condition, results of operations or cash flows.

Financial Instruments and Other Instruments

From time to time, the Company employs financial instruments, such as interest rate swaps and foreign currency forward and option contracts, to manage exposure to fluctuations in interest rates and foreign exchange rates. The Company also trades lumber futures to manage price risk. The Company's policy is not to use derivatives for trading or speculative purposes. Risk management strategies and relationships are formally documented and assessed on a regular, ongoing basis to ensure derivatives are effective in offsetting changes in fair values or cash flows of hedged items. The counter-parties for all derivative contracts, except lumber futures, are the Company's Canadian bankers who are highly-rated and, hence, the risk of credit loss on such instruments is mitigated.

On April 14, 2014, the Company entered into two additional interest rate swaps, each with a notional value of US$25 million and maturing on April 14, 2016. Under the terms of these swaps, the Company pays an amount based on a fixed annual interest rate of 0.58% and receives a 90 day LIBOR which is recalculated at set interval dates.

Outstanding Shares

As of May 6, 2014, Interfor had 66,730,455 Class A Subordinate Voting Shares issued and outstanding. These shares are listed on the Toronto Stock Exchange under the symbol IFP.A.

Controls and Procedures

There have been no changes in the Company's internal controls over financial reporting ("ICFR") during the three months ended March 31, 2014, that have materially affected, or are reasonably likely to materially affect, its ICFR.

As of March 31, 2014, the scope of our design of disclosure controls and procedures ("DC&P") and ICFR has been limited to exclude controls, policies and procedures of Tolleson, as we have not yet completed evaluating these controls and procedures or designing and implementing any necessary changes. The Company intends to include such controls, policies and procedures within the design of DC&P and ICFR during 2014. Tolleson accounted for less than 2.0% and 3.0%, respectively, of the Company's total consolidated sales and net earnings before income tax for the first quarter of 2014. Additional information about the acquisition is provided in Note 4 to Interfor's consolidated financial statements as at and for the quarter ended March 31, 2014.

Critical Accounting Estimates

There were no significant changes to the Company's critical accounting estimates during the quarter ended March 31, 2014. Interfor's critical accounting estimates are described in its MD&A for the year ended December 31, 2013, filed under the Company's profile on www.sedar.com.

Accounting Policy Changes

A number of new standards, and amendments to existing standards and interpretations, were not yet effective for the quarter ended March 31, 2014, and have not been applied in preparing the Company's consolidated financial statements. The following pronouncement is considered by the Company to be the most significant of several pronouncements that may affect the financial statements.

IFRS 9, Financial Instruments, replaces the multiple classification and measurement models in IAS 39, Financial Instruments: Recognition and Measurement, with a single model that has only two classification categories: amortized cost and fair value. This standard will be in effect for accounting periods beginning on or after January 1, 2015, with earlier adoption permitted. The Company does not expect this standard to have a significant effect on its financial statements.

Non-GAAP Measures

This MD&A makes reference to the following non-GAAP measures: EBITDA, Adjusted EBITDA, Pre-tax return on total assets and Net debt to invested capital, which are used by the Company and certain investors to evaluate operating performance and financial position. These non-GAAP measures do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers. The following table provides a reconciliation of these non-GAAP measures to figures as reported in the Company's unaudited interim consolidated financial statements prepared in accordance with IFRS:


                                                           For the 3 months
                                                            ended March 31,
                                                      ----------------------
Thousands of Canadian dollars                               2014       2013
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Adjusted EBITDA
Net earnings                                              27,488     15,179
Add:
  Depreciation of plant and equipment                     12,331      8,564
  Depletion and amortization of timber, roads and
   other                                                   6,309      4,599
  Restructuring costs                                        329        103
  Finance costs                                            1,763      1,788
  Other foreign exchange loss                                274        715
  Income tax recovery                                    (16,197)      (355)
----------------------------------------------------------------------------
EBITDA                                                    32,297     30,593
Add:
  Long term incentive compensation                         6,917      6,620
  Other income                                               (56)       (89)
----------------------------------------------------------------------------
Adjusted EBITDA                                           39,158     37,124
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Pre-tax return on total assets
Earnings before income taxes                              11,291     14,824
Add:
  Restructuring costs                                        329        103
  Other foreign exchange loss                                274        715
  Other income                                               (56)       (89)
----------------------------------------------------------------------------
                                                          11,838     15,553
Total assets, period end                               1,079,282    754,347
----------------------------------------------------------------------------
Pre-tax return on total assets(1)                            4.4%       8.2%
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net debt to invested capital
Net debt
  Long term debt                                         274,830    213,835
  Cash and cash equivalents                               (8,051)   (10,998)
  Current bank indebtedness                                2,764          -
----------------------------------------------------------------------------
Total net debt                                           269,543    202,837
Invested capital
  Net debt                                               269,543    202,837
  Shareholders' equity                                   609,397    393,137
----------------------------------------------------------------------------
Total invested capital                                   878,940    595,974
----------------------------------------------------------------------------
Net debt to invested capital                                30.7%      34.0%
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Notes:


(1)  Annualized rate.

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

For the three months ended March 31, 2014 and 2013 (unaudited)


----------------------------------------------------------------------------
(thousands of Canadian dollars except earnings per
 share)                                                3 Months    3 Months
                                                       Mar. 31,    Mar. 31,
                                                           2014        2013
----------------------------------------------------------------------------

Sales                                                $  294,840  $  242,499
Costs and expenses:
  Production                                            246,800     198,302
  Selling and administration                              8,882       7,075
  Long term incentive compensation                        6,917       6,620
  Export taxes (recovery)                                     -          (2)
  Depreciation of plant and equipment (note 10)          12,331       8,564
  Depletion and amortization of timber, roads and
   other (note 10)                                        6,309       4,599
  --------------------------------------------------------------------------
                                                        281,239     225,158
----------------------------------------------------------------------------
Operating earnings before restructuring costs            13,601      17,341

Restructuring costs                                        (329)       (103)
----------------------------------------------------------------------------
Operating earnings                                       13,272      17,238

Finance costs (note 9)                                   (1,763)     (1,788)
Other foreign exchange loss                                (274)       (715)
Other income                                                 56          89
----------------------------------------------------------------------------
                                                         (1,981)     (2,414)
----------------------------------------------------------------------------

Earnings before income taxes                             11,291      14,824
Income tax expense (recovery):
    Current                                                 394        (269)
    Deferred (note 4)                                   (16,591)        (86)
    ------------------------------------------------------------------------
                                                        (16,197)       (355)
----------------------------------------------------------------------------

Net earnings                                         $   27,488  $   15,179
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Net earnings per share, basic and diluted (note 11)  $     0.43  $     0.27
----------------------------------------------------------------------------
----------------------------------------------------------------------------

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the three months ended March 31, 2014 and 2013 (unaudited)


                                                       3 Months    3 Months
                                                       Mar. 31,    Mar. 31,
                                                           2014        2013
----------------------------------------------------------------------------

Net earnings                                         $   27,488  $   15,179

Other comprehensive income:
Items that will not be reclassified subsequently to
 Net earnings:
  Defined benefit plan actuarial losses                    (141)       (394)
  --------------------------------------------------------------------------

Items that are or may be reclassified subsequently
 to Net earnings:
  Foreign currency translation differences - foreign
   operations                                             5,241       2,752
  Gain (loss) in fair value of interest rate swaps
   (note 13)                                                 32        (375)
  Income tax expense on other comprehensive income            -         (55)
  --------------------------------------------------------------------------
  Total items that are or may be reclassified
   subsequently to Net earnings                           5,273       2,322
----------------------------------------------------------------------------
Total other comprehensive income, net of tax              5,132       1,928
----------------------------------------------------------------------------

Total comprehensive income for the period            $   32,620  $   17,107
----------------------------------------------------------------------------
----------------------------------------------------------------------------

See accompanying notes to consolidated financial statements

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the three months ended March 31, 2014 and 2013 (unaudited)


----------------------------------------------------------------------------
(thousands of Canadian dollars)                        3 Months    3 Months
                                                       Mar. 31,    Mar. 31,
                                                           2014        2013
----------------------------------------------------------------------------

Cash provided by (used in):
Operating activities:
  Net earnings                                       $   27,488  $   15,179
  Items not involving cash:
    Depreciation of plant and equipment (note 10)        12,331       8,564
    Depletion and amortization of timber, roads and
     other (note 10)                                      6,309       4,599
    Income tax recovery                                 (16,197)       (355)
    Finance costs (note 9)                                1,763       1,788
    Other assets                                            281         152
    Reforestation liability                               2,739       2,662
    Provisions and other liabilities                     (2,457)         (6)
    Unrealized foreign exchange losses (gains)              (90)        338
    Other                                                   (46)        (48)
  --------------------------------------------------------------------------
                                                         32,121      32,873
  Cash generated from (used in) operating working
   capital:
    Trade accounts receivable and other                  16,186     (22,154)
    Inventories                                         (24,257)    (19,038)
    Prepayments                                          (4,370)     (1,820)
    Trade accounts payable and provisions                (3,373)     19,956
    Income taxes paid                                      (264)       (368)
  --------------------------------------------------------------------------
                                                         16,043       9,449

Investing activities:
  Additions to property, plant and equipment            (10,108)     (5,180)
  Additions to logging roads                             (4,423)     (2,615)
  Additions to timber and other intangible assets          (799)       (245)
  Proceeds on disposal of property, plant, and
   equipment                                                353          62
  Acquisition of subsidiary, net of cash acquired
   (note 4)                                            (122,335)    (82,766)
  Investments and other assets                              (69)         20
  --------------------------------------------------------------------------
                                                       (137,381)    (90,724)
Financing activities:
  Increase in bank indebtedness                           2,764           -
  Interest payments                                      (1,309)     (1,482)
  Debt refinancing costs                                   (809)       (799)
  Additions to long-term debt (notes 4 and 7)           208,911      84,418
  Repayments of long-term debt (note 7)                 (85,154)     (5,083)
  --------------------------------------------------------------------------
                                                        124,403      77,054
Foreign exchange gain on cash and cash equivalents
 held in a foreign currency                                 269         225
----------------------------------------------------------------------------
Increase (decrease) in cash                               3,334      (3,996)

Cash and cash equivalents, beginning of period            4,717      14,994
----------------------------------------------------------------------------

Cash and cash equivalents, end of period             $    8,051  $   10,998
----------------------------------------------------------------------------
----------------------------------------------------------------------------

See accompanying notes to consolidated financial statements

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

March 31, 2014 and December 31, 2013 (unaudited)


(thousands of Canadian dollars)                        Mar. 31,     Dec. 31,
                                                           2014         2013
----------------------------------------------------------------------------

Assets
Current assets:
  Cash and cash equivalents                         $     8,051  $     4,717
  Trade accounts receivable and other                    53,983       62,735
  Inventories (note 6)                                  185,394      149,509
  Prepayments                                            17,430       11,374
  --------------------------------------------------------------------------
                                                        264,858      228,335

Employee future benefits                                  4,463        3,980
Other investments and assets                              4,326        3,960
Property, plant and equipment (note 4)                  550,444      460,930
Logging roads and bridges                                16,427       16,224
Timber licences                                          82,532       84,344
Other intangible assets (note 4)                         25,089        2,420
Goodwill (note 4)                                       131,143       23,715
Deferred income taxes                                         -          218
----------------------------------------------------------------------------

                                                    $ 1,079,282  $   824,126
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Liabilities and Shareholders' Equity
Current liabilities:
  Bank indebtedness                                 $     2,764  $         -
  Trade accounts payable and provisions                 115,957       98,017
  Reforestation liability                                12,638       11,754
  Income taxes payable                                    2,641          395
  --------------------------------------------------------------------------
                                                        134,000      110,166

Reforestation liability                                  23,544       20,662
Long-term debt (note 7)                                 274,830      145,479
Employee future benefits                                  7,649        7,006
Provisions and other liabilities                         22,413       25,676
Deferred income taxes (note 4)                            7,449            -
Equity:
  Share capital (note 8)                                490,363      428,723
  Contributed surplus                                     7,476        7,476
  Translation reserve                                     5,802          561
  Hedge reserve                                             199          167
  Retained earnings                                     105,557       78,210
  --------------------------------------------------------------------------
                                                        609,397      515,137
----------------------------------------------------------------------------


                                                    $ 1,079,282  $   824,126
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Commitment (note 14)

See accompanying notes to consolidated financial statements

On behalf of the Board:


                          L. Sauder                D. Whitehead
                          Director                 Director

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

For the three months ended March 31, 2014 and 2013 (unaudited)


                          Class A       Class B
(thousands of               Share         Share   Contributed   Translation
 Canadian dollars)        Capital       Capital       Surplus       Reserve
----------------------------------------------------------------------------
Balance at December
 31, 2013            $    428,723  $          -  $      7,476  $        561
Net earnings for the
 period:                        -             -             -             -
Other comprehensive
 earnings:
Foreign currency
 translation
 differences, net of
 tax                            -             -             -         5,241
Defined benefit plan
 actuarial losses
Gain in fair value
 of interest rate
 swaps
Contributions:
Shares issued in
 business
 combination (notes
 4 and 8)                  61,640             -             -             -
----------------------------------------------------------------------------


Balance at March 31,
 2014                $    490,363  $          -  $      7,476  $      5,802
----------------------------------------------------------------------------
----------------------------------------------------------------------------


Balance at December
 31, 2012            $    342,285  $      4,080  $      7,476  $     (7,818)
Net earnings for the
 period:                        -             -             -             -
Other comprehensive
 earnings:
Foreign currency
 translation
 differences, net of
 tax                            -             -             -         2,697
Defined benefit plan
 actuarial losses               -             -             -             -
Loss in fair value
 of interest rate
 swaps                          -             -             -             -
----------------------------------------------------------------------------


Balance at March 31,
 2013                $    342,285  $      4,080  $      7,476  $     (5,121)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

(thousands of               Hedge      Retained
 Canadian dollars)        Reserve      Earnings         Total
--------------------------------------------------------------
Balance at December
 31, 2013            $        167  $     78,210  $    515,137
Net earnings for the
 period:                        -        27,488        27,488
Other comprehensive
 earnings:
Foreign currency
 translation
 differences, net of
 tax                            -             -         5,241
Defined benefit plan
 actuarial losses                          (141)         (141)
Gain in fair value
 of interest rate
 swaps                         32             -            32
Contributions:
Shares issued in
 business
 combination (notes
 4 and 8)                       -             -        61,640
--------------------------------------------------------------


Balance at March 31,
 2014                $        199  $    105,557  $    609,397
--------------------------------------------------------------
--------------------------------------------------------------


Balance at December
 31, 2012            $       (132) $     30,139  $    376,030
Net earnings for the
 period:                        -        15,179        15,179
Other comprehensive
 earnings:
Foreign currency
 translation
 differences, net of
 tax                            -             -         2,697
Defined benefit plan
 actuarial losses               -          (394)         (394)
Loss in fair value
 of interest rate
 swaps                       (375)            -          (375)
--------------------------------------------------------------


Balance at March 31,
 2013                $       (507) $     44,924  $    393,137
--------------------------------------------------------------
--------------------------------------------------------------

See accompanying notes to consolidated financial statements


INTERNATIONAL FOREST PRODUCTS LIMITED
Notes to Unaudited Condensed Consolidated Interim Financial Statements
(Tabular amounts expressed in thousands except number of shares and per
share amounts)
Three months ended March 31, 2014 and 2013 (unaudited)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

1. Nature of operations:

International Forest Products Limited and its subsidiaries (the "Company" or "Interfor") produce wood products in British Columbia, the U.S. Pacific Northwest and the U.S. Southeast for sale to markets around the world.

The Company is incorporated under the Business Corporations Act (British Columbia) with shares listed on the Toronto Stock Exchange. Its head office, principal address and records office are located at Suite 3500, 1055 Dunsmuir Street, Vancouver, British Columbia, Canada, V7X 1H7.

The condensed consolidated interim financial statements of the Company as at and for the three months ended March 31, 2014, comprise the Company and its subsidiaries. The consolidated financial statements of the Company as at and for the year ended December 31, 2013, are available on www.sedar.com.

2. Basis of Preparation:

(a) Statement of compliance:

These condensed consolidated interim financial statements, including comparatives, have been prepared in accordance with IAS 34 Interim Financial Reporting using accounting policies consistent with the International Financial Reporting Standards ("IFRS") issued by the International Accounting Standards Board ("IASB") and Interpretations of the International Financial Reporting Interpretations Committee ("IFRIC"). These condensed consolidated interim financial statements were approved by the Board of Directors on May 6, 2014.

(b) Basis of measurement:

The condensed consolidated interim financial statements have been prepared on the historical cost basis except for the following material items in the Statement of Financial Position:


(i)   Derivative financial instruments are measured at fair value;
(ii)  Liabilities for cash-settled share-based payment arrangements are
      measured at fair value; and
(iii) Employee benefit plan assets and liabilities are recognized as the net
      of the fair value of the plan assets and the present value of the
      benefit obligations on a plan by plan basis.

The functional and presentation currency of the parent company is Canadian dollars.

4. Significant accounting policies:

These condensed consolidated interim financial statements have been prepared using the significant accounting policies and methods of computation consistent with those applied in the Company's December 31, 2013, annual consolidated financial statements.

5. Acquisition:

On March 14, 2014, a wholly-owned subsidiary of Interfor acquired all of the outstanding common shares of Tolleson Ilim Lumber Company ("Tolleson") from Ilim Timber Continental, S.A. ("Ilim"), pursuant to a Share Purchase Agreement for total consideration estimated to value $188,627,000. Tolleson, through its wholly-owned subsidiary, owns and operates two sawmills in Perry and Preston, Georgia, and a remanufacturing facility in Perry, Georgia. This acquisition is consistent with Interfor's strategy of adding capacity in attractive regional markets.

The acquisition has been accounted for as a business combination and the estimated value of consideration transferred is preliminarily allocated as follows:


----------------------------------------------------------------------------
----------------------------------------------------------------------------

Assets acquired:
  Cash and cash equivalents                                      $    2,484
  Other current assets                                               16,790
  Property, plant and equipment                                      86,561
  Other intangible assets                                            22,190
  Goodwill                                                          107,419
----------------------------------------------------------------------------
                                                                    235,444
Liabilities assumed:
  Current liabilities                                               (15,847)
  Long term provisions and other liabilities                         (6,697)
  Deferred income taxes                                             (24,273)
----------------------------------------------------------------------------

                                                                 $  188,627
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Consideration funded by:
  Current liabilities                                            $    2,168
  Operating Line                                                     24,964
  Revolving Term Line                                                99,855
  Share capital (3,680,000 Class A Subordinate Voting Shares)        61,640
----------------------------------------------------------------------------

                                                                 $  188,627
----------------------------------------------------------------------------
----------------------------------------------------------------------------

As part of the acquisition, the Company entered into a non-competition agreement with Ilim under which Ilim and its associates are prohibited from carrying on various activities within Canada and the U.S. that would be in competition with the Company's operating activities for a period of five years from the acquisition date. An intangible asset of $22,190,000 was recognized in respect of this non-competition agreement, which will be amortized to expense over its five year term.

The goodwill of $107,419,000 recognized in the transaction is calculated as the excess of the estimated purchase consideration transferred over the preliminary fair values of the identifiable assets acquired and liabilities assumed. The factors that contribute to the recognition of goodwill include Tolleson's historical cash flows and income levels, reputation in its markets, management team strength, efficiency of operations, and future cash flows and income growth projections. None of the goodwill is expected to be tax deductible.

In conjunction with recognizing a $24,273,000 deferred tax liability in accounting for the acquisition of Tolleson, the Company recognized $19,253,000 of previously unrecognized deferred tax assets related to its U.S. operations. The recognition of these deferred income tax assets is included within the $16,591,000 deferred income tax recovery in the Company's Consolidated Statements of Earnings.

The Company incurred acquisition related costs of approximately $1,100,000 during the three months ended March 31, 2014, which are included in Selling and administration expenses in the Company's Consolidated Statements of Earnings.

Tolleson accounted for less than 2.0% and 3.0%, respectively, of the Company's total consolidated sales and net earnings before income tax for the three months ended March 31, 2014.

5. Seasonality of operating results:

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 woods 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.

6. Inventories:


----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                        Mar. 31,    Dec. 31,
                                                            2014        2013
----------------------------------------------------------------------------

Logs                                                  $   90,633  $   89,170
Lumber                                                    84,779      51,449
Other                                                      9,982       8,890
----------------------------------------------------------------------------
                                                      $  185,394  $  149,509
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Inventory expensed in the period includes production costs, amortization of plant and equipment, and depletion and amortization of timber, roads and other. The inventory writedown in order to record inventory at the lower of cost and net realizable value at March 31, 2014, was $7,534,000 (December 31, 2013 - $7,926,000).

7. Cash and borrowings:


----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                Senior       U.S.
                       Operating  Revolving    Secured  Operating
March 31, 2014              Line  Term Line      Notes       Line      Total
----------------------------------------------------------------------------
Available line of
 credit and maximum
 borrowing available  $   65,000 $  250,000 $   55,265 $   33,159 $  403,424
Drawings                  31,443    188,122     55,265          -    274,830
Outstanding letters
 of credit included
 in line utilization       8,882          -          -        608      9,490
----------------------------------------------------------------------------
Unused portion of
 facility             $   24,675 $   61,878 $        - $   32,551 $  119,104
----------------------------------------------------------------------------
----------------------------------------------------------------------------

December 31, 2013
----------------------------------------------------------------------------
Available line of
 credit and maximum
 borrowing available  $   65,000 $  200,000 $   53,180 $   21,272 $  339,452
Drawings                     936     90,619     53,180        744    145,479
Outstanding letters
 of credit included
 in line utilization       7,529          -          -          -      7,529
----------------------------------------------------------------------------
Unused portion of
 facility             $   56,535 $  109,381 $        - $   20,528 $  186,444
----------------------------------------------------------------------------
----------------------------------------------------------------------------

(a) Operating Line:

The Canadian operating line of credit ("Operating Line") may be drawn in either CAD$ or US$ advances, and bears interest at bank prime plus a margin or, at the Company's option, at rates for Bankers' Acceptances or LIBOR based loans plus a margin, and in all cases dependent upon a financial ratio of total debt divided by twelve months' trailing EBITDA(1). Borrowing levels under the Operat ing Line are subject to a borrowing base calculation dependent on certain accounts receivable and inventories.

The Operating Line is secured by a general security agreement which includes a security interest in all accounts receivable and inventories, charges against timber tenures, and mortgage security on sawmills. The Operating Line is subject to certain financial covenants including a minimum working capital requirement, a maximum ratio of total debt to total capitalization and a minimum net worth calculation. The Operating Line matures on February 27, 2017.

As at March 31, 2014, the Operating Line was drawn by $15,456,000 and US$22,500,000, revalued at the quarter-end exchange rate to $24,869,000, for a total of $40,325,000, including outstanding letters of credit (December 31, 2013 - drawings of $8,465,000).

During the first quarter of 2014, the Company drew US$22,500,000 under its Operating Line to fund its acquisition in the U.S. (see note 4), which it designated as a hedge against the Company's investment in its U.S. operations and unrealized foreign exchange gains of $72,000 for the three months ended March 31, 2014, (March 31, 2013 - $nil) were recognized in Foreign currency translation differences in Other comprehensive income.

(b) Revolving Term Line:

The Revolving Term Line may be drawn in either CAD$ or US$ advances, and bears interest at bank prime plus a margin or, at the Company's option, at rates for Bankers' Acceptances or LIBOR based loans plus a margin, and in all cases dependent upon a financial ratio of total debt divided by twelve months' trailing EBITDA(1). The Revolving Term Line matures on February 27, 2017.

The Revolving Term Line is secured by a general security agreement which includes a security interest in all accounts receivable and inventories, charges against timber tenures, and mortgage security on sawmills. The term line is subject to certain financial covenants including a minimum working capital requirement, a maximum ratio of total debt to total capitalization and a minimum net worth calculation.

On March 31, 2014, the Company increased the credit available under its Revolving Term Line from $200,000,000 to $250,000,000. All other terms and conditions of this line remained unchanged.

As at March 31, 2014, the Revolving Term Line was drawn by US$170,200,000 (December 31, 2013 - US$85,200,000), revalued at the quarter-end exchange rate to $188,122,000 (December 31, 2013 - $90,619,000).

During the first quarter, 2014, the Company drew US$90,000,000 under its Revolving Term Line to fund its acquisition in the U.S. (see note 4), which it designated as a hedge against the Company's investment in its U.S. operations, bringing total drawings under the Revolving Term Line designated as hedges against the Company's investment in its U.S. operations to US$170,200,000. Unrealized foreign exchange losses of $3,228,000 for the three months ended March 31, 2014, (March 31, 2013 - $441,000 gain) arising on revaluation of the Revolving Term Line were recognized in Foreign currency translation differences in Other comprehensive income.

(c) Senior Secured Notes:

The Series A Senior Secured Notes ("Senior Secured Notes") bear interest at 4.33% and are subject to certain financial covenants including a minimum working capital requirement, a maximum ratio of total debt to total capitalization and a minimum net worth calculation. Payments of US$16,667,000 are required on each of June 26, 2021 and 2022, with the balance due on June 26, 2023.

As at March 31, 2014, Senior Secured Notes of US$50,000,000 were outstanding (December 31, 2013 - US$50,000,000) and revalued at the quarter-end exchange rate to $55,265,000 (December 31, 2013 - $53,180,000).

The Senior Secured Notes have been designated as a hedge against the Company's investment in its U.S. operations and unrealized foreign exchange losses of $2,085,000 (March 31, 2013 - $nil) arising on their revaluation were recognized in Foreign currency translation differences in Other comprehensive income for the three months ended March 31, 2014.

(d) U.S. Operating Line

The U.S. Operating Line is secured by accounts receivable and inventories of wholly-owned subsidiary, Interfor U.S. Inc., and matures on April 28, 2015. The U.S. Operating Line is subject to a minimum net worth calculation, with borrowing levels subject to a collateral calculation dependent upon certain accounts receivable and inventories.

On March 21, 2014, the Company increased the credit available under this agreement from US$20,000,000 to US$30,000,000.

As at March 31, 2014, the U.S. Operating Line was drawn by US$550,000 representing outstanding letters of credit, revalued at the quarter-end exchange rate to $608,000 (December 31, 2013 - $744,000).

Minimum principal amounts due on long-term debt within the next five years are follows:


----------------------------------------------------------------------------
----------------------------------------------------------------------------
Twelve months ending
  March 31, 2015                                                           -
  March 31, 2016                                                           -
  March 31, 2017                                                   $ 219,565
  March 31, 2018                                                           -
  March 31, 2019                                                           -
----------------------------------------------------------------------------
                                                                   $ 219,565
----------------------------------------------------------------------------
----------------------------------------------------------------------------

(1)  EBITDA represents earnings before interest, taxes, depreciation,
     depletion and amortization.

8. Share capital:

The transactions in share capital are described below:


----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                             Number
                               ----------------------------------
                                   Class A    Class B       Total     Amount
----------------------------------------------------------------------------
Balance, December 31, 2012      54,847,176  1,015,779  55,862,955  $ 346,365
Share exchange                   1,015,779 (1,015,779)          -          -

Shares issued for cash, net of
 share issue costs               7,187,500          -   7,187,500     82,358
----------------------------------------------------------------------------

Balance, December 31, 2013      63,050,455          -  63,050,455    428,723

Shares issued in business
 combination (see Note 4)        3,680,000          -   3,680,000     61,640
----------------------------------------------------------------------------
Balance, March 31, 2014         66,730,455          -  66,730,455  $ 490,363
----------------------------------------------------------------------------
----------------------------------------------------------------------------

On August 23, 2013, the Company's controlling shareholder, Sauder Industries Limited ("SIL") exercised its right under the Company's Articles to exchange its Class B Common Shares for Class A Subordinate Voting Shares on a share for share basis without any cash or non-cash consideration. As a result of the exchange by SIL, all remaining Multiple Voting Shares were automatically converted to Class A Shares.

On March 31, 2013, the Company closed a public offering of 7,187,500 Class A Subordinate Voting shares at a price of $12.00 per share for net cash proceeds of $82,358,000.

On March 14, 2014, the Company issued 3,680,000 Class A Subordinate Voting shares as a result of the acquisition of Tolleson Lumber Company (see note 4) at the listed share price of $16.75 per share as at March 14, 2014.

9. Finance costs:


----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                        3 Months    3 Months
                                                        Mar. 31,    Mar. 31,
                                                            2014        2013
----------------------------------------------------------------------------

Interest on borrowing                                 $    1,451  $    1,513
Interest (income) on defined benefit obligations             (18)         48
Accretion expense                                            170          96
Amortization of prepaid finance costs                        160         131
----------------------------------------------------------------------------
                                                      $    1,763  $    1,788
----------------------------------------------------------------------------
----------------------------------------------------------------------------

10. Depreciation, depletion and amortization:

Depreciation, depletion and amortization can be allocated by function as follows:


----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                         3 Months   3 Months
                                                         Mar. 31,   Mar. 31,
                                                             2014       2013
----------------------------------------------------------------------------

Production                                             $   18,275 $   12,903
Selling and administration                                    365        260
----------------------------------------------------------------------------
                                                       $   18,640 $   13,163
----------------------------------------------------------------------------
----------------------------------------------------------------------------

11. Net earnings per share:


----------------------------------------------------------------------------
----------------------------------------------------------------------------
                        3 Months March 31, 2014      3 Months March 31, 2013
                  ----------------------------------------------------------
                               Weighted                     Weighted
                                Average                      Average
                         Net  Number of     Per       Net  Number of     Per
                    earnings     Shares   share  earnings     Shares   share
----------------------------------------------------------------------------

Issued shares at
 January 1                       63,050                       55,863
Effect of shares
 issued on March
 14, 2014                           736                            -
----------------------------------------------------------------------------
Basic and diluted
 earnings per
 share             $  27,488     63,786 $  0.43 $  15,179     55,863 $  0.27
----------------------------------------------------------------------------
----------------------------------------------------------------------------

The Company has no dilutive securities.

12. Segmented information:

The Company manages its business as a single operating segment, solid wood. The Company harvests and purchases logs which are sorted by species, size and quality and then either manufactured into lumber products at the Company's sawmills, or sold. Substanti ally all operations are located in British Columbia, Canada and the Pacific Northwest and Southeast regions of the United States.

The Company's sales to both foreign and domestic markets are as follows:


----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                        3 Months    3 Months
                                                        Mar. 31,    Mar. 31,
                                                            2014        2013
----------------------------------------------------------------------------

Canada                                                $   53,514  $   55,152
United States                                            167,577     125,792
China/Taiwan                                              33,481      23,560
Japan                                                     29,211      26,168
Other export                                              11,057      11,827
----------------------------------------------------------------------------
                                                      $  294,840  $  242,499
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Sales by product line are as follows:



----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                        3 Months    3 Months
                                                        Mar. 31,    Mar. 31,
                                                            2014        2013
----------------------------------------------------------------------------

Lumber                                                $  230,464  $  191,406
Logs                                                      37,588      26,128
Wood chips and other by products                          22,400      16,597
Ocean freight and other                                    4,388       8,368
----------------------------------------------------------------------------
                                                      $  294,840  $  242,499
----------------------------------------------------------------------------
----------------------------------------------------------------------------

13. Financial instruments:

At March 31, 2014, the fair value of the Company's long-term debt and bank indebtedness approximated its carrying value of $277,594,000 (December 31, 2013 - $145,479,000) measured based on Level 2 of the fair value hierarchy.

As at March 31, 2014, the Company has outstanding obligations to sell a maximum of US$9,065,000 at an average rate of CAD$1.1132 to US$1.00 during 2014 and yen 153,220,000 at an average rate of yen 102.15 to US$1.00 during 2014. All foreign currency gains or losses to March 31, 2014, have been recognized in Other foreign exchange gain (loss) in Net earnings and the fair value of these foreign currency contracts, being an asset of $85,000 (measured based on Level 2 of the fair value hierarchy), has been recorded in Trade accounts receivable and other (December 31, 2013 - $136,000 asset).

As at March 31, 2014, the Company had obligations under two interest rate swaps, each with notional value of US$25,000,000 and maturing February 27, 2017. Under the terms of these swaps the Company pays an amount based on a fixed annual interest rate of 0.84% and receives a 90 day LIBOR which is recalculated at set interval dates. The intent of the interest rate swaps is to convert floating-rate interest expense to fixed-rate interest expense.

As these swaps have been designated as cash flow hedges, the fair value of these interest rate swaps at March 31, 2014, being an asset of $198,000 (measured based on Level 2 of the fair value hierarchy), has been recorded in Trade accounts receivable and other (December 31, 2013 - $166,000 asset) and a gain of $32,000 (March 31, 2013 - $375,000 loss) has been recognized in Other comprehensive income for the first quarter of 2014.

The Company trades lumber futures to manage price risk. These were designated as held for trading with changes in fair value recorded in Other income in Net earnings. At March 31, 2014, the Company recognized $10,000 in Trade accounts receivable and other in respect of the fair value of the outstanding contracts measured based on Level 2 of the fair value hierarchy (December 31, 2013 - $nil) and a gain of $10,000 was recognized in Other income for the first quarter of 2014 (March 31, 2013 - gain of $41,000).

14. Commitment:

On acquisition of the Thomaston sawmill operations from Keadle Lumber Enterprises, Inc., the Company agreed to pay an additional US$7,000,000, contingent upon receipt of an upgrade to the air permit which will allow the Company to operate a second shift. Receipt of this approval was received on February, 28, 2014, with the payment to be made February 27, 2015. The liability, revalued at the quarter-end exchange rate to $7,737,000, is included in Trade accounts payable and provisions as at March 31, 2014.

Additional Information

Additional information relating to the Company and its operations can be found on its website at www.interfor.com, in the Annual Information Form and on SEDAR at www.sedar.com.

Contacts:
International Forest Products Limited
John A. Horning
Executive Vice President and Chief Financial Officer
(604) 689-6829
www.interfor.com

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