Higher Prices Boost Interfor's Results

VANCOUVER, BRITISH COLUMBIA, Apr 22 (MARKET WIRE) --
INTERNATIONAL FOREST PRODUCTS LIMITED ("Interfor" or the
"Company") (TSX: IFP.A) reported a net loss of $3.4 million or
$0.07 per share in the first quarter of 2010. The first quarter loss
includes a tax valuation allowance of $1.1 million or $0.02 per share,
which results from the Company no longer recognizing the tax benefit of
loss carry-forwards. Excluding the tax valuation allowance and other
one-time items, the loss for the first quarter was $2.2 million or $0.05
per share compared to a loss of $4.4 million or $0.09 per share in the
fourth quarter of 2009. On the same basis, the Company reported a net
loss of $10.6 million or $0.23 per share in the first quarter of 2009.

Included in the results for the first quarter was a provision of $0.4
million ($0.4 million or $0.01 per share after tax) relating to long-term
incentive compensation. Similar costs expensed in the fourth quarter
amounted to $1.5 million ($1.1 million or $0.02 per share after tax); in
the first quarter last year the Company recorded an expense of $0.4
million ($0.3 million or $0.01 per share after tax).

EBITDA for the quarter (adjusted to exclude "other income") was
$9.7 million compared to $5.7 million in the fourth quarter and negative
$8.4 million in the first quarter of 2009.

"Higher commodity prices in North America had a positive impact on
our results in the quarter," said Duncan Davies President and CEO,
"as did the new Adams Lake sawmill which operated at 12% above pro
forma in the quarter."

SPF 2X4 in the North American cash market gained US$63 or 31%
quarter-over-quarter as low in-market inventories and shipments to
offshore markets continued to limit available supply. Hem-Fir studs were
up $US49 or 22% quarter-over-quarter. Prices in offshore markets - which
tend to be sold forward on longer terms than North America - increased as
well, but not to the same extent.

Offsetting the positive impact of higher lumber prices in part were
higher log costs in the B.C. Interior and U.S. Pacific Northwest,
continued weakness in the cedar market and the rising value of the C$,
which averaged US$0.961 in the first quarter versus US$0.946 in the
fourth quarter and US$0.803 in the first quarter last year.

Lumber production increased 5% quarter-over-quarter to 258 million board
feet, representing approximately 65% of rated capacity, with Adams Lake
and Grand Forks accounting for most of the increase. In the first quarter
of 2009, production amounted to 121 million board feet.

Log production at the Company's Canadian operations was 648,000 m3 in the
first quarter compared to 533,000 m3 in the fourth quarter and 72,000 m3
in the first quarter last year. In the U.S. log procurement was matched
against mill consumption.

Lumber sales, including wholesale volumes, totalled 264 million board
feet, an increase of 30 million board feet or 13% compared to the
previous quarter, and 142 million board feet more than the first quarter
of 2009. On a volume basis, excluding wholesale programs, sales to North
America accounted for 74% of shipments in the first quarter while Pacific
Rim markets including Japan and China, accounted for 23%. Comparable
figures for the fourth quarter were 73% North American and 24% Pacific
Rim. In the first quarter of 2009, North America represented 83% of
shipments, Pacific Rim was 14%.

In the quarter Interfor generated $9.1 million in cash from operations
after changes in working capital were considered.

Net debt ended the quarter at $152.0 million or 30% of invested capital
versus $140.7 million or 28% of invested capital at the end of the fourth
quarter and $160.1 million or 29% of invested capital at the end of the
first quarter of 2009.

Business conditions have improved considerably in the last year. Consumer
confidence is showing signs of improvement and conditions in the U.S.
housing market appear to have stabilized. In-market inventories are well
below the levels of one year ago and prices continue to firm, with SPF
2X4 currently trading above US$300 and the Random Lengths
("RL") composite above US$350.

Export Duty rates on shipments from Canada to the U.S. are scheduled to
drop from 15% to 10% on May 1st as price levels in March, as measured by
the RL Composite, exceeded the threshold rate of US$315 for the first
time since the Softwood Lumber Agreement ("SLA") between Canada
and the U.S. came into effect in October 2006. The SLA provides for duty
rates to drop to 5% and 0% if the RL Composite exceeds US$335 and US$355
respectively for a sufficient period of time.

In spite of the positive news on product pricing and duty rates Interfor
remains of the view that considerable uncertainty remains. The number of
homes in the foreclosure process in the U.S. represents a significant
overhang of potential inventory and a negative influence on new
construction activity. And, with the U.S. government's housing assistance
package scheduled to end and the spectre of higher interest rates, there
is concern that activity levels could drop in the second half of the
year. Adding to the challenge is the possibility the C$ will continue to
rise in value relative to the US$ and other major international
currencies.

In the face of this uncertainty, Interfor will continue to balance
operating rates against sales activity, with a clear priority on managing
for cash and realizing on the benefits of recent strategic activities and
investments. In that regard, good progress has been made on the issues
impacting the Castlegar sawmill (which was acquired from Pope & Talbot,
Inc. in 2008). As a result, steps are now being taken for a potential
July start-up of the mill on a reduced operating basis, with the full
expectation the mill will make a positive contribution to the Company's
results once it resumes operations. Operating rates in the second quarter
will likely be similar to those achieved in the first quarter of 2010.
Discretionary capital will be restricted to small, high-return projects
for the foreseeable future.

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 2009 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 one of the Pacific Northwest's largest producers of quality
wood products. The Company has operations in British Columbia, Washington
and Oregon, including two sawmills in the Coastal region of British
Columbia, three in the B.C. Interior, two in Washington and two in
Oregon. For more information about Interfor, visit our website at
www.interfor.com.

There will be a conference call on Friday, April 23, 2010 at 8:00 AM
(Pacific Time) hosted by INTERNATIONAL FOREST PRODUCTS LIMITED for the
purpose of reviewing the Company's release of its First Quarter, 2010
Financial Results.

The dial-in number is 1-866-323-8540. The conference call will also be
recorded for those unable to join in for the live discussion, and will be
available until May 7, 2010. The number to call is 1-866-245-6755
Passcode 318617.

International Forest Products Limited

First Quarter Report

For the three months ended March 31, 2010

Management's Discussion and Analysis

Dated as of April 22, 2010

This Management's Discussion and Analysis ("MD&A") provides a
review of Interfor's financial performance for the three months ended
March 31, 2010 relative to 2009, the Company's financial condition and
future prospects. The MD&A should be read in conjunction with the interim
Consolidated Financial Statements for the three months ended March 31,
2010 and 2009, and Interfor's Annual Information Form, Consolidated
Financial Statements and Annual MD&A for the years ended December 31,
2009 and 2008 filed on SEDAR at www.sedar.com. The financial information
contained in this MD&A has been prepared in accordance with Canadian
generally accepted accounting principles ("GAAP"). In this
MD&A, reference is made to EBITDA and Adjusted EBITDA. EBITDA represents
earnings before interest, taxes, depletion, amortization, restructuring
costs, other foreign exchange gains and losses, and write-downs of
property, plant, equipment and timber ("asset write-downs").
Adjusted EBITDA represents EBITDA adjusted for other income. The Company
discloses EBITDA as it is a measure used by analysts and Interfor's
management to evaluate the Company's performance. As EBITDA is a non-GAAP
measure, it may not be comparable to EBITDA calculated by others. In
addition, as EBITDA is not a substitute for net earnings, readers should
consider net earnings in evaluating the Company's performance.

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 reports contains information and statements that are forward-looking
in nature, including, but not limited to, statements containing the words
"believe", "may", "will",
"expects", "estimates", "projects",
"continue", "anticipates", "intends", 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 current Annual
Information Form available on www.sedar.com. 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.

Review of Operating Results

Overview

The Company recorded a net loss of $3.4 million, or $0.07 per share for
the first quarter of 2010 as compared to a net loss of $13.6 million, or
$0.29 per share for the first quarter of 2009. EBITDA and Adjusted EBITDA
for the first quarter of 2010 were positive $9.7 million and $9.7
million, respectively, compared to negative $7.7 million and $8.4 million
for the same quarter of 2009.

Before restructuring costs, foreign exchange gains (losses), other
one-time items and a tax valuation allowance, the Company's net loss for
the first quarter of 2010 amounted to $2.2 million or $0.05 per share as
compared to a net loss of $10.6 million, or $0.23 per share for the first
quarter of 2009.

U.S. housing starts, still near historic lows, continue to impact overall
demand levels and product pricing. However, reduced in-market inventories
and improved demand/supply balances resulted in significant price
increases in the first quarter, 2010 as the price reported by Random
Lengths for Western SPF 2x4 #2&Btr peaked at US$287 per million board
feet ("mfbm") in February 2010, the highest price in 43 months.
The positive impact of the rising price was partially offset by the
strengthened Canadian dollar which, relative to its U.S. counterpart,
closed the first quarter, 2010 at CAD$1.0158 compared to the first
quarter, 2009 close at CAD$1.2613, an increase of almost twenty percent.

The new Adams Lake sawmill continued to ramp up in the first quarter,
2010 averaging more than 12% above pro forma production operating on a
full two shift basis. On March 15, 2010, the Company completed the
acquisition of a timber tenure in the Kamloops region from Weyerhaeuser
Company Limited, adding approximately 275,000 cubic metres of allowable
annual cut to its interior fibre supply. Acquisition of this tenure
strengthens the Company's long term timber supply for the new Adams Lake
sawmill and will help to offset anticipated declines in future supply as
a result of the Mountain Pine Beetle infestation.

Sales

Lumber shipments totalled 264 mfbm for the first quarter, 2010. Compared
to the same quarter of 2009, lumber shipments were up more than double,
reflecting the addition of production from Adams Lake, the recommenced
operations at Grand Forks and higher operating rates at the Company's
U.S. mills. Excluding wholesale programs, sales to North America
accounted for 74% of shipments in the first quarter, 2010, while Pacific
Rim markets including Japan and China, accounted for 23%. In the first
quarter of 2009, North America represented 83% of shipments and the
Pacific Rim was 14%.

The North American cash market for structural products improved
significantly quarter over quarter with the average price reported by
Random Lengths for Western SPF 2x4 #2&Btr at US$269 per mfbm or 73.5%
higher than in the first quarter, 2009 and for Hemlock-Fir studs 2x4 9'
lengths at US$273 per mfbm, higher by 64.5%. Prices in the first quarter,
2010 improved as low in-market inventories and shipments to offshore
markets continued to limit available supply. Prices in offshore markets,
which tend to be sold forward on longer terms than North America,
increased as well but not to the same extent.

Interfor's unit lumber sales values declined $55 per mfbm, reflecting the
significant relative increase in North American structural lumber sales
volumes, with cedar and Japan sales volumes having increased to a much
lesser extent. Sales values were also impacted by the stronger Canadian
dollar which appreciated by 16.4% on average relative to its U.S.
counterpart over the same quarter of 2009.

Pulp chip and other by-product revenues for the first quarter of 2010
were up $5.8 million, or 78.5%, compared to the first quarter of 2009,
with an increase in sales volumes reflecting higher sawmill operating
rates. Average chip prices were down by 13.0%, as chip prices in the U.S.
fell by 10% and magnified by the negative impact of the stronger Canadian
dollar on sales realizations.

Log sales improved by $4.6 million, or 36.0%, corresponding to an
increase of 19.3% in log sales volume for Canadian operations, with a
change in sales mix compared to the same quarter in 2009. This is
reflected in the average sales price for log sales in Canada which
improved to $64 per cubic metre in the first quarter of 2010, as compared
to $54 per cubic metre for the same period of 2009.

Operating Costs

Production costs for the first quarter of 2010 increased $43.9 million,
or 54.1% compared to the same period in 2009. Production costs in the
first quarter of 2009 reflected significant market related curtailments
in manufacturing and logging, and the curtailment of the Adams Lake
sawmill as the construction project was finalized. Production levels
increased in the second half of 2009 as the new Adams Lake sawmill ramped
up and Grand Forks resumed operations. This trend continued into the
first quarter of 2010 as lumber production increased by 137.5 million
board feet, or more than double that of the same period in 2009. B.C. log
production increased to 648,000 cubic metres compared to 71,900 cubic
metres in the first quarter, 2009 in response to increased demand for
fibre supply.

The increased production volumes drove the Company's per unit cost of
conversion down with the additional volume available to absorb fixed
costs. Unit costs were further improved by a stronger Canadian dollar on
average for the first quarter, 2010 as compared to the same quarter in
2009.

Export taxes increased by $1.3 million, or almost three times that of the
first quarter, 2009. As prices in both years were low enough to attract
the maximum rate of 15% tax, the increase in the dollar amount of export
taxes is mainly related to a fivefold increase in shipment volumes to the
U.S. and to the increase in product prices.

There was little change in selling and administrative costs for the first
quarter of 2010 compared to the first quarter of 2009. Long-term
incentive compensation ("LTIC") expense, which is impacted by
the Company's share price, showed an expense of $0.4 million for the
first quarter of 2010 (Quarter 1, 2009 - $0.4 million), reflecting a
13.0% rise in the Company's share price from December 31, 2009.

First quarter, 2010, amortization of plant and equipment at $6.5 million
was 30.4% higher than the corresponding quarter in 2009, due to the
impact of higher operating rates primarily at the Adams Lake sawmill
which did not operate in early 2009.

Road amortization and depletion expense for the first quarter of 2010
increased $3.6 million vis-a-vis the same quarter of 2009, as a result of
significantly higher logging activity on the B.C. Coast, which had been
virtually shut-down in the first quarter of 2009 to reduce inventory
levels.

Restructuring costs were negligible in the first quarter of 2010,
compared to $1.1 million in severance costs arising from downsizing its
workforce in response to reduced operating rates in the first quarter of
2009.

Interest, Other Foreign Exchange Gain (loss), Other Income (Expense)

First quarter, 2010, interest expense increased by $0.4 million compared
to the first quarter of 2009, arising from an increase in the Company's
overall lending rates in 2010 compared to 2009, partially offset by a
stronger Canadian dollar. Other foreign exchange gains (losses) were
negligible for both quarters. The Company reported a minor loss in Other
income (expense) for some disposals of surplus equipment in the first
quarter of 2010, in contrast to a gain of $0.6 million for the first
quarter of 2009 which resulted primarily from the disposal of a property
and buildings in Maple Ridge, B.C.

Equity income at $1.4 million for the first quarter, 2010, increased by
$0.8 million over the same period in the previous year. This increase was
attributable to increased equity participation in the earnings with
greater shipment volumes by the Company relative to the other
participants.

Income Taxes

In the first quarter of 2010, the Company recorded an income tax recovery
of $0.4 million (Quarter 1, 2009 - $3.1 million) and took a valuation
allowance against certain future income tax assets arising from loss
carry-forwards available to reduce future taxable income, decreasing its
income tax recovery by $1.1 million (Quarter 1, 2009 - $2.7 million).
Although the Company expects to realize the full benefit of the loss
carry-forwards, due to the cyclical nature of the wood products industry
and the economic conditions over the last several years, the Company has
provided a valuation allowance in respect of its operating loss
carry-forwards, net of temporary differences.

Cash Flow and Financial Position

Cash generated by the Company from operations, after changes in working
capital, was $9.1 million for the first quarter of 2010, compared to cash
generated of $19.2 million for the first quarter of 2009. Significant
increases in operating rates, particularly at Adams Lake and Grand Forks,
resulted in an inventory build-up of $7.1 million as log inventory
volumes in the interior of B.C. more than doubled. Substantial production
curtailments in the comparative period of 2009 caused a drawdown of
inventories by $13.3 million. In addition, $16.1 million in cash tax
refunds were received in the first quarter of 2009.

Cash expenditures on capital assets for the first quarter of 2010
totalled $19.7 million (Quarter 1, 2009 - $13.1 million) including the
acquisition of a timber tenure in the Kamloops region from Weyerhaeuser
Company Limited and road construction.

Some minor sales of surplus equipment in the first quarter of 2010
generated negligible proceeds as compared to the disposals of surplus
property and buildings in Maple Ridge, B.C. combined with disposals of
surplus equipment, which generated proceeds of $4.4 million in the first
quarter of 2009.

On January 4, 2010, the Seaboard Limited Partnership declared an income
distribution to its partners. Interfor's share was $3.1 million and was
paid to the Company by way of setoff against the promissory note payable
to the Seaboard Limited Partnership.

On January 15, 2010 the Company amended and extended its existing
syndicated credit facilities. The Company's Revolving Term Line increased
from $150 million to $200 million, and its maturity date was extended to
February 28, 2012. All other terms and conditions of the line remain
substantially unchanged.

In conjunction with the amendments to its credit facilities on January
15, 2010 the Company drew US$35.0 million ($35.8 million) on its
Revolving Term Line and repaid and cancelled its U.S. dollar
non-revolving term line (the "Non-Revolving Term Line").

To fund road construction and the acquisition of the timber tenure from
Weyerhaeuser and to convert the U.S. drawings used to repay the
Non-Revolving Term Line into Canadian dollars, the Company subsequently
drew a further $55.0 million in the first quarter, 2010, and repaid
drawings of US$35.0 million ($36.7 million).

As at March 31, 2010, the Revolving Term Line was drawn by US$30.2
million revalued at the quarter-end exchange rate to $30.7 million and
$131.0 million for total drawings of $161.7 million, leaving an unused
available line of $38.3 million.

Despite some signs of improvement in global market conditions, Interfor
continues to monitor discretionary capital expenditures carefully. Based
on current pricing and cash flow projections and existing credit lines
the Company believes it has sufficient resources to meet operating and
interest payment requirements and any essential capital expenditures.

At March 31, 2010, the Company had cash of $9.6 million. After deducting
the Company's drawings under its Revolving Term Line, the Company ended
the quarter with net debt of $152.0 million or 30.3% of invested capital.

Selected Quarterly Financial Information(1)

Quarterly Earnings Summary
2010 2009 2008
-----------------------------------------------------------
Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2
-----------------------------------------------------------
(millions of dollars except share and per share amounts)
Sales
- Lumber 107.6 93.1 76.8 62.3 56.5 65.6 73.4 82.2
- Logs 17.4 17.3 17.3 13.0 12.8 18.3 28.8 25.7
- Wood chips
and other
by-products 13.2 12.2 8.9 5.9 7.4 8.8 8.9 7.4
- Other 1.7 2.9 2.2 0.6 0.6 0.8 0.9 2.1
-----------------------------------------------------------
Total Sales 139.9 125.5 105.2 81.8 77.3 93.5 112.0 117.4
-----------------------------------------------------------
Operating loss
before
restructuring
costs
and asset
write-downs (3.1) (7.8) (7.0) (16.4) (15.2) (8.1) (12.8) (11.7)
Operating loss (3.1) (7.8) (10.4) (16.3) (16.3) (8.9) (14.1) (42.2)
Net earnings
(loss) (3.4) (5.0) 9.7 (15.0) (13.6) (18.7) (8.1) (27.7)
Net earnings
(loss) per
share - basic
and diluted (0.07) (0.11) 0.21 (0.32) (0.29) (0.40) (0.17) (0.59)
EBITDA(3) 9.7 6.3 25.3 (7.3) (7.7) 2.0 0.7 2.5
Cash flow from
operations per
share(2) 0.17 0.06 (0.07) (0.23) (0.22) 0.12 0.06 (0.06)
Shares
outstanding
- end of
period
(millions)(3) 47.1 47.1 47.1 47.1 47.1 47.1 47.1 47.1
- weighted
average
(millions) 47.1 47.1 47.1 47.1 47.1 47.1 47.1 47.1
Adjusted
EBITDA(3) 9.7 5.7 3.6 (7.3) (8.4) 1.7 0.1 1.9

1 Tables may not add due to rounding.
2 Cash generated from operations before taking account of changes in
operating working capital.
3 As at April 22, 2010, the number of shares outstanding by class are:
Class A Subordinate Voting shares - 46,101,476 Class B Common shares
- 1,015,779, Total - 47,117,255.
4 EBITDA represents earnings before interest, taxes, depletion,
amortization, restructuring costs, other foreign exchange gains and
losses, and asset write-downs. The Company discloses EBITDA as it is a
measure used by analysts to evaluate the Company's performance. As EBITDA
is a non-GAAP measure, it may not be comparable to EBITDA calculated by
others. In addition, as EBITDA is not a substitute for net earnings,
readers should consider net earnings in evaluating the Company's
performance. Adjusted EBITDA represents EBITDA adjusted for other income.

EBITDA and Adjusted EBITDA can be calculated from the Statements of
Operations as follows:

2010 2009 2008
----------------------------------------------------
Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2
----------------------------------------------------
(millions of dollars)
Net earnings (loss) (3.4) (5.0) 9.7 (15.0) (13.6) (18.7) (8.1) (27.7)
Add: Income taxes
(recovery) (0.4) (3.3) 0.1 (3.6) (3.1) 10.4 (5.2) (13.9)
Interest expense 2.0 2.0 2.2 2.0 1.6 2.5 1.5 0.8
Depletion and
amortization 11.4 12.5 9.9 9.5 6.3 7.8 11.3 13.0
Other foreign
exchange (gains)
losses - 0.1 - (0.1) - (0.9) - (0.4)
Restructuring
costs, asset
write-downs and
other - 0.1 3.3 (0.1) 1.1 0.8 1.3 30.6
----------------------------------------------------
EBITDA 9.7 6.3 25.3 (7.3) (7.7) 2.0 0.7 2.5
Deduct:
Other income
(expense) - 0.6 21.7 - 0.6 0.3 0.6 0.6
----------------------------------------------------
Adjusted EBITDA 9.7 5.7 3.6 (7.3) (8.4) 1.7 0.1 1.9
----------------------------------------------------

Volume and Price Statistics
2010 2009 2008
-----------------------------------------------------
Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2
-----------------------------------------------------
Lumber (million
sales fbm) 264 234 181 131 122 133 132 125
Lumber (million
production fbm) 258 245 180 115 121 118 148 128
Log (thousand
sales(1) cubic
metres) 239 261 242 216 200 236 372 312
Log (thousand
production cubic
(1) metres) 648 533 378 312 72 290 501 679
Average ($/
selling thousand
price - fbm)
lumber(2) $408 $ 398 $ 424 $ 477 $ 462 $ 494 $555 $ 658
Average ($/cubic
selling metre)
price -
logs(1) $64 $62 $69 $56 $54 $69 $70 $79
Average ($/
selling thousand
price - fbm)
pulp chips $40 $39 $38 $40 $46 $58 $48 $47

1 B.C. operations
2 Gross sales before export taxes

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 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.
Sawmill operations are less seasonal than logging operations but do
depend on the availability of logs from the logging operations. In
addition, the market demand for lumber and related products is generally
lower in the first quarter due to reduced construction activity, which
increases during the spring, summer and fall.

The impact of the global recession on overall demand and poor lumber
sales realizations increased the operating losses in the first three
quarters of 2009. Operating rates increased in the fourth quarter of
2009, as lumber prices rose slightly, carrying through to the first
quarter, 2010. The volatility of the Canadian dollar also impacted
results, given that historically over 75% of the Canadian operation's
sales are to export markets and priced in $US. A strong Canadian dollar
reduces the lumber sales realizations in Canada, but lessens the impact
of any losses in U.S. operations. The second quarter 2008 loss reflects a
restructuring charge of $30.6 million primarily for the Queensboro
sawmill closure. The fourth quarter of 2008 net loss includes the effect
of a valuation charge of $15.2 million against future tax assets, and
additional valuation charges continued through all quarters of 2009 and
into 2010. The third quarter of 2009 includes an after-tax gain of $19.0
million from the sale of the former Queensboro sawmill site.

Accounting Policy Changes

Effective January 1, 2010, the Company adopted three new CICA accounting
standards:

(a) Handbook Section 1582, Business Combinations which replaces CICA
Handbook Section 1581, Business Combinations, and establishes revised
standards for the recognition, measurement, presentation and disclosure
of business acquisitions and aligns Canadian GAAP with IFRS standards.

(b) Handbook Section 1601, Consolidated Financial Statements and Handbook
Section 1602, Non-Controlling Interests, which replace Handbook Section
1600, Consolidated Financial Statements, and establish revised standards
for the preparation of consolidated financial statements.

Adoption of these standards had no retrospective impact on the
consolidated financial statements.

Future Accounting Policy Changes

In February 2008, the Canadian Accounting Standards Board confirmed that
Canadian generally accepted accounting principles ("Canadian
GAAP") will be converged with International Financial Reporting
Standards ("IFRS") for fiscal years commencing January 1, 2011.
The transition from Canadian GAAP to IFRS will be applicable for the
Company for the first quarter of 2011 when the Company will prepare both
the current and comparative financial information using IFRS.

While IFRS uses a conceptual framework similar to Canadian GAAP, there
are significant differences on recognition, measurement, and disclosures.
The Company commenced its IFRS conversion project in 2008 with the
provision of training to key employees. Early in 2009, the Company
developed an implementation plan, assembled a cross functional team,
provided additional technical training to team members and commenced a
high level review of its financial statement elements to identify major
differences between Canadian GAAP and IFRS. Additional team members were
engaged and subject matter specialists were identified.

A detailed review of the impact of IFRS on Interfor's consolidated
financial statements is substantially complete. As required, the Company
has engaged outside consultants to provide expertise and assistance. As
key subject areas have been completed, recommendations have been brought
forward to the Company Executive for discussion and approval prior to
implementation.

Changes required to systems and controls, including information
technology systems, are being identified and modified as the project
progresses. Currently, no significant changes to computer systems have
been required.

An opening balance sheet prepared under IFRS at the date of transition,
January 1, 2010, is currently planned for substantial completion in the
first half of 2010 and is underway. Adjustments will be finalized during
2010 as details of some adjustments, as in the case of pensions, will not
be available until the latter half of 2010. Financial statements and
notes are in process of being prepared for each quarter of 2010 to be
used for comparative purposes in 2011. Amendments will be made as
adjustments become final.

While the effects of IFRS have not yet been finalized, the Company has
identified a number of key areas which are likely to be impacted by
changes in accounting policy, including: property, plant, and equipment;
impairment of assets; provisions, including reforestation liabilities and
asset retirement obligations; and employee future benefits.

Progress is on schedule.

Controls and Procedures

There were no changes in the Company's internal controls over financial
reporting ("ICFR") during the quarter ended March 31, 2010 that
have materially affected, or are reasonably likely to materially affect,
the Company's ICFR.

Critical Accounting Estimates

There were no material changes to the Company's critical accounting
estimates during the quarter ended March 31, 2010. For a full discussion
of critical accounting estimates, please refer to the Company's
discussion in its MD&A for the year ended December 31, 2009 as filed on
SEDAR at www.sedar.com.

Outlook

Glimmers of recovery continue to emerge in global economies laying a
foundation for better market conditions in 2010. Economic activity in
Canada, in particular, appears to be gaining traction as evidenced by a
number of indicators including a trend of improved housing starts and
gross domestic product and lower unemployment rates. The results of a
recent Bank of Canada survey of senior loan officers of the country's
major banks pointed to an overall easing of business lending conditions,
both in terms of pricing and availability.

As a result, there is a general expectation that the Bank of Canada will
raise its prime lending rate mid-year with three major banks having
already raised mortgage rates. In addition, the Canadian dollar has moved
toward parity with the U.S. dollar in recent weeks.

Activity in the U.S. housing market remains close to historic lows, with
no appreciable movement in U.S. housing starts since the fourth quarter,
2008 despite the impact of government incentives. Continued high
unemployment and tight credit in the U.S., as well as the prospect of
further sub-prime mortgage resets due in the next year leads to an
expectation that North American market conditions will remain challenging
through 2010.

Commodity lumber prices have continued to firm since the end of the first
quarter, with Western SPF 2x4 #2&Btr currently selling above US$300 per
mfbm and the Random Lengths' Composite Index above US$350 per mfbm. As a
result the export tax paid under the Softwood Lumber Agreement will
decline by a third effective May 1, 2010, from 15% to 10%, the first time
since the implementation of the agreement in October 2006.

While still relatively small in terms of volumes, there is optimism about
the growth of exports to China as it provides a new market to help offset
reduced demand in the U.S. and a strong market for lower grade products.

With the prospect of another challenging year ahead, the Company will
maintain its disciplined approach to production and strict controls on
capital spending.

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. Interfor's trading symbol on the Toronto
Stock Exchange is IFP.A.

E. Lawrence Sauder, Chairman

Duncan K. Davies, President and Chief Executive Officer

CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months ended March 31, 2010 and 2009 (unaudited)
---------------------------------------------------------------------------
(thousands of Canadian dollars except 3 Months 3 Months
earnings per share) Mar. 31, 2010 Mar. 31, 2009
---------------------------------------------------------------------------

Sales $ 139,939 $ 77,277
Costs and expenses:
Production 125,187 81,248
Selling and administration 4,169 4,095
Long term incentive compensation expense 415 401
Export taxes 1,829 501
Amortization of plant and equipment 6,489 4,975
Depletion and amortization of timber, roads
and other 4,915 1,277
--------------------------------------------------------------------------
143,004 92,497

---------------------------------------------------------------------------
Operating loss before restructuring costs (3,065) (15,220)

Restructuring costs (note 9) (33) (1,073)
---------------------------------------------------------------------------
Operating loss (3,098) (16,293)

Interest expense on long-term debt (1,905) (1,214)
Other interest expense (138) (406)
Other foreign exchange gain (loss) 7 (16)
Other income (expense) (note 8) (25) 647
Equity in earnings of investee companies 1,365 581
---------------------------------------------------------------------------
(696) (408)

---------------------------------------------------------------------------
Loss before income taxes (3,794) (16,701)
Income taxes (recovery):
Current 40 (1)
Future (445) (3,100)
---------------------------------------------------------------------------
(405) (3,101)
---------------------------------------------------------------------------
Net loss $ (3,389) $ (13,600)
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Net loss per share, basic and diluted (note 10) $ (0.07) $ (0.29)
---------------------------------------------------------------------------
---------------------------------------------------------------------------

See accompanying notes to consolidated financial statements.

CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
For the three months ended March 31, 2010 and 2009 (unaudited)
---------------------------------------------------------------------------
3 Months 3 Months
(thousands of Canadian dollars) Mar. 31, 2010 Mar. 31, 2009
---------------------------------------------------------------------------

Retained earnings, beginning of year $ 88,861 $ 112,748

Net loss (3,389) (13,600)
---------------------------------------------------------------------------

Retained earnings, end of period $ 85,472 $ 99,148
---------------------------------------------------------------------------
---------------------------------------------------------------------------

See accompanying notes to consolidated financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months ended March 31, 2010 and 2009 (unaudited)
---------------------------------------------------------------------------
3 Months 3 Months
(thousands of Canadian dollars) Mar. 31, 2010 Mar. 31, 2009
---------------------------------------------------------------------------

Cash provided by (used in):
Operating activities:
Net loss $ (3,389) $ (13,600)
Items not involving cash:
Amortization of plant and equipment 6,489 4,975
Depletion and amortization of timber, roads
and other 4,915 1,277
Future income tax recovery (445) (3,100)
Other assets - 20
Reforestation liability 1,867 1,453
Other long-term liabilities 76 (488)
Equity in earnings of investee company (1,365) (581)
Unrealized foreign exchange losses (gains) (255) 451
Other (note 8) 8 (651)
-------------------------------------------------------------------------
7,901 (10,244)
Cash generated from (used in) operating
working capital:
Accounts receivable 1,419 6,459
Inventories (7,070) 13,285
Prepaid expenses 1,374 1,319
Accounts payable and accrued liabilities 5,237 (7,672)
Income taxes 267 16,082
-------------------------------------------------------------------------
9,128 19,229
Investing activities:
Additions to property, plant and equipment (588) (12,873)
Additions to logging roads and timber (19,074) (255)
Proceeds on disposal of property, plant, and
equipment 14 4,384
Investments and other assets (1,897) 5
--------------------------------------------------------------------------
(21,545) (8,739)
Financing activities:
Additions to long-term debt (note 7(b)) 90,819 -
Repayments of long-term debt (note 7(b)) (72,534) (8,000)
Decrease in bank indebtedness - (1,955)
--------------------------------------------------------------------------
18,285 (9,955)
Foreign exchange gain (loss) on cash and cash
equivalents held in a foreign currency (42) 22
---------------------------------------------------------------------------
Increase in cash 5,826 557

Cash and cash equivalents, beginning of year 3,802 184
---------------------------------------------------------------------------

Cash and cash equivalents, end of period $ 9,628 $ 741
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Supplementary disclosures
Cash interest paid $ 2,043 $ 1,620
Cash income taxes received 267 16,082
---------------------------------------------------------------------------
---------------------------------------------------------------------------

See accompanying notes to consolidated financial statements.

CONSOLIDATED BALANCE SHEETS
March 31, 2010 (unaudited) and December 31, 2009 (audited)
---------------------------------------------------------------------------
(thousands of Canadian dollars) Mar. 31, 2010 Dec. 31, 2009
---------------------------------------------------------------------------

Assets
Current assets:
Cash and cash equivalents $ 9,628 $ 3,802
Accounts receivable 31,386 32,951
Income taxes recoverable - 230
Inventories (note 6) 66,715 60,159
Prepaid expenses 6,288 7,777
Future income taxes 2,825 2,974
--------------------------------------------------------------------------
116,842 107,893

Investments and other assets (note 5) 16,872 17,060

Property, plant and equipment, net of
accumulated amortization 346,400 357,501

Timber tenures, net of accumulated depletion 82,154 67,010

Logging roads and bridges, net of accumulated
amortization 16,302 16,485

Goodwill 13,078 13,078

Long-lived assets held for sale 3,424 3,424
---------------------------------------------------------------------------

$ 595,072 $ 582,451
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $ 48,469 $ 43,510
Income taxes payable 43 -
Payable to investee company (note 5) - 3,096
--------------------------------------------------------------------------
48,512 46,606

Reforestation liability, net of current portion 17,078 14,724
Long-term debt (note 7(b)) 161,677 144,525
Other long-term liabilities 15,380 15,316
Future income taxes 2,825 3,286

Shareholders' equity:
Share capital
Class A subordinate voting shares 284,500 284,500
Class B common shares 4,080 4,080
Contributed surplus 5,408 5,408
Accumulated other comprehensive income (loss) (29,860) (24,855)
Retained earnings 85,472 88,861
--------------------------------------------------------------------------
349,600 357,994

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

$ 595,072 $ 582,451
---------------------------------------------------------------------------
---------------------------------------------------------------------------

See accompanying notes to consolidated financial statements.

On behalf of the Board:

E.L. Sauder G.H. MacDougall
Director Director

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
For the three months ended March 31, 2010 and 2009 (unaudited)
---------------------------------------------------------------------------
3 Months 3 Months
(thousands of Canadian dollars) Mar. 31, 2010 Mar. 31, 2009
---------------------------------------------------------------------------

Net loss $ (3,389) $ (13,600)
Other comprehensive income:

Net change in unrealized foreign currency
translation gains (losses) on translation
of self-sustaining foreign subsidiaries (5,005) 6,344

---------------------------------------------------------------------------
Other comprehensive income (loss) (5,005) 6,344
---------------------------------------------------------------------------

Comprehensive loss $ (8,394) $ (7,256)
---------------------------------------------------------------------------
---------------------------------------------------------------------------

See accompanying notes to consolidated financial statements.

CONSOLIDATED STATEMENTS OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
For the three months ended March 31, 2010 and 2009 (unaudited)
---------------------------------------------------------------------------
3 Months 3 Months
(thousands of Canadian dollars) Mar. 31, 2010 Mar. 31, 2009
---------------------------------------------------------------------------

Accumulated other comprehensive loss, beginning
of year $ (24,855) $ (554)

Other comprehensive income (loss) (5,005) 6,344

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

Accumulated other comprehensive income (loss),
end of period $ (29,860) $ 5,790
---------------------------------------------------------------------------
---------------------------------------------------------------------------

See accompanying notes to consolidated financial statements.

INTERNATIONAL FOREST PRODUCTS LIMITED

Notes to Unaudited Interim Consolidated Financial Statements

(Tabular amounts expressed in thousands except per share amounts)

Three months ended March 31, 2010 and 2009 (unaudited)

1. Significant accounting policies:

These unaudited interim consolidated financial statements include the
accounts of International Forest Products Limited and its subsidiaries
(collectively referred to as "Interfor" or the
"Company"). These interim consolidated financial statements do
not include all disclosures required by Canadian generally accepted
accounting principles ("GAAP") for annual financial statements,
and accordingly, these interim consolidated financial statements should
be read in conjunction with Interfor's most recent annual consolidated
financial statements. These interim consolidated financial statements
follow the same accounting policies and methods of application used in
the Company's audited annual consolidated financial statements as at and
for the year ended December 31, 2009, except for the new accounting
policies adopted subsequent to that date, as discussed in Note 2.

2. Adoption of change in accounting policies:

Effective January 1, 2010, the Company adopted three new Canadian
Institute of Chartered Accountants ("CICA") accounting
standards:

(a) CICA Handbook Section 1582, Business Combinations which replaces CICA
Handbook Section 1581, Business Combinations, and establishes revised
standards for the recognition, measurement, presentation and disclosure
of business acquisitions and aligns Canadian GAAP with International
Financial Reporting Standards ("IFRS").

(b) CICA Handbook Section 1601, Consolidated Financial Statements and
CICA Handbook Section 1602, Non-Controlling Interests, which replace CICA
Handbook Section 1600, Consolidated Financial Statements, and establish
revised standards for the preparation of consolidated financial
statements.

Adoption of these standards has no retrospective impact on the
consolidated financial statements.

3. Comparative figures:

Certain of the prior period's figures have been reclassified to conform
to the presentation adopted in the current year.

4. Seasonality of operating results:

The Company operates in the solid wood business which includes logging
and manufacturing operations. Logging activities vary throughout the year
due to a number of factors including weather, ground and fire season
conditions. Generally, the Company operates the bulk of its logging
divisions in the latter half of the first quarter, throughout the second
and third quarters and in the first half of the fourth quarter.
Manufacturing operations are less seasonal than logging operations but do
depend on the availability of logs from the logging operations and from
third party suppliers. In addition, the market demand for lumber and
related products is generally lower in the first quarter due to reduced
construction activity which increases during the spring, summer and fall.

5. Payable to investee company:

On December 29, 2009, the Seaboard Limited Partnership ("the
Seaboard Partnership"), made an advance to its partners, with the
Company's share of the advance being $3,096,000. The Company signed an
unsecured promissory note which was payable on demand on or before
January 4, 2010 and was non-interest bearing until January 4, 2010.

On January 4, 2010, the Seaboard Partnership declared an income
distribution to its partners, of which the Company's share of $3,096,000
was received by way of setoff against the promissory note payable to the
Seaboard Partnership. In accordance with equity accounting, the income
distribution was recorded as a reduction of the investment in Seaboard.

6. Inventories:

--------------------------------------------------------------------------
M
ar. 31, 2010 Dec. 31, 2009
--------------------------------------------------------------------------

Logs $ 36,104 $ 31,011
Lumber 25,601 24,301
Other 5,010 4,847
--------------------------------------------------------------------------
$ 66,715 $ 60,159
--------------------------------------------------------------------------
--------------------------------------------------------------------------

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, 2010
was $8,112,000 (December 31, 2009 - $9,578,000).

7. Cash, bank indebtedness and long-term debt:

(a) Bank indebtedness:

--------------------------------------------------------------------------
M
arch 31, 2010 Total
--------------------------------------------------------------------------

Available line of credit $ 65,000
Maximum borrowing available 64,788
Operating Line drawings -
Outstanding letters of credit included in line utilization 5,148
Unused portion of line 59,640
--------------------------------------------------------------------------
--------------------------------------------------------------------------
December 31, 2009
--------------------------------------------------------------------------

Available line of credit $ 65,000
Maximum borrowing available 61,926
Operating Line drawings -
Outstanding letters of credit included in line utilization 4,997
Unused portion of line 56,929
--------------------------------------------------------------------------
--------------------------------------------------------------------------

The 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. Borrowing levels under the
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 and a
maximum ratio of total debt to total capitalization and a minimum net
worth calculation. As at March 31, 2010, there were no drawings under the
Operating Line (December 31, 2009 - $nil).

On January 15, 2010 the Company amended and extended its existing
syndicated credit facilities. The maturity date of the existing Canadian
operating line of credit ("Operating Line") was extended to
February 28, 2011. All other terms and conditions of the line remain
substantially unchanged.

(b) Long-term debt:

On January 15, 2010 the Company amended and extended its existing
syndicated credit facilities. The Company's Revolving Term Line increased
from $150,000,000 to $200,000,000, and its maturity date was extended to
February 28, 2012. All other terms and conditions of the line remain
substantially unchanged.

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.

As at March 31, 2010, the Revolving Term Line was drawn by US$30,200,000
(December 31, 2009 - US$30,200,000) revalued at the quarter-end exchange
rate to $30,677,000 (December 31, 2009 - $31,740,000), and $131,000,000
(December 31, 2009 - $76,000,000) for total drawings of $161,677,000
(December 31, 2009 - $107,740,000), leaving an unused available line of
$38,323,000.

In conjunction with the amendments to its credit facilities on January
15, 2010, the Company drew US$35,000,000 ($35,819,000) on its Revolving
Term Line and repaid and cancelled its U.S. dollar non-revolving term
line (the "Non-Revolving Term Line"). At December 31, 2009 the
Non-Revolving Term Line was fully drawn at US$35,000,000 and was revalued
at the year-end exchange rate to $36,785,000. The foreign exchange gain
of $966,000 realized on repayment of the Non-Revolving Term Line (March
31, 2009 - $1,516,000 unrealized foreign exchange loss on revaluation of
loan) was recognized in Other foreign exchange gain (loss) on the
Statement of Operations.

The Company subsequently drew a further $55,000,000 in the first quarter,
2010, and repaid the drawings of US$35,000,000 ($36,715,000) used to
repay the Non-Revolving Term Line, realizing a foreign exchange loss of
$896,000 which was recognized in Other foreign exchange gain (loss) on
the Statement of Operations.

The US$30,200,000 drawing under the line has been designated as a hedge
against the Company's investment in its self-sustaining U.S. operations
and unrealized foreign exchange gains of $1,063,000 (March 31, 2009 -
$1,308,000 loss) arising on revaluation of the Non-Revolving Term Line
for the quarter ending March 31, 2010 were recognized in Other
comprehensive income.

The 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 and a maximum ratio of total debt to total
capitalization and a minimum net worth calculation.

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

--------------------------------------------------------------------------
T
welve months ending
March 31, 2011 $ -
March 31, 2012 161,677
March 31, 2013 -
March 31, 2014 -
March 31, 2015 -
--------------------------------------------------------------------------
$161,677
--------------------------------------------------------------------------
--------------------------------------------------------------------------

8. Other income (expense):

--------------------------------------------------------------------------
3 Months 3 Months
Mar. 31, 2010 Mar. 31, 2009
--------------------------------------------------------------------------
Gain (loss) on disposal of surplus
property, plant and equipment $ (8) $ 651
Other (expense) (17) (4)
--------------------------------------------------------------------------
$ (25) $ 647
--------------------------------------------------------------------------
--------------------------------------------------------------------------

In the first quarter of 2010, minor disposals of surplus equipment
resulted in proceeds of $14,000 and a loss of $8,000.

In the first quarter of 2009, the Company disposed of surplus property
and buildings in Maple Ridge, B.C., previously classified as held for
sale. This disposition, combined with other sales of surplus equipment,
generated proceeds of $4,384,000 and a gain of $651,000.

9. Restructuring costs:

During the first quarter of 2010, the Company revised its estimated
severance costs and recorded $33,000 in additional restructuring costs.
During the first quarter of 2009, the Company recorded severance costs of
$1,073,000 as it downsized its workforce in response to reduced operating
rates.

10. Net earnings (loss) per share:

--------------------------------------------------------------------------
3 Months Mar. 31, 2010 3 Months Mar. 31, 2009
---------------------------- ----------------------------
Net loss Shares Per share Net loss Shares Per share
--------------------------------------------------------------------------

Basic loss
per share $ (3,389) 47,117 $ (0.07) $(13,600) 47,117 $ (0.29)
Share options - 57(i) - - - -
--------------------------------------------------------------------------

Diluted loss
per share $ (3,389) 47,117 $ (0.07) $(13,600) 47,117 $ (0.29)
--------------------------------------------------------------------------
--------------------------------------------------------------------------
(i) Where the addition of share options to the total shares outstanding has
an anti-dilutive impact on the diluted earnings (loss) per share
calculation, those share options have not been included in the total
shares outstanding for purposes of the calculation of diluted earnings
(loss) per share.

11. Segmented information:

The Company manages its business as a single operating segment, solid
wood. The Company purchases and harvests logs which are then manufactured
into lumber products at the Company's sawmills, or sold. Substantially
all of the Company's operations are located in British Columbia, Canada
and the U.S. Pacific Northwest, U.S.A.

The Company sales to both foreign and domestic markets are as follows:
--------------------------------------------------------------------------
3 Months 3 Months
Mar. 31, 2010 Mar. 31, 2009
--------------------------------------------------------------------------

Canada $ 41,781 $ 20,467
United States 60,502 34,622
Japan 13,641 11,383
Other export 24,015 10,805
--------------------------------------------------------------------------
$ 139,939 $ 77,277
--------------------------------------------------------------------------
--------------------------------------------------------------------------

Sales by product line are as follows:
--------------------------------------------------------------------------
3 Months 3 Months
Mar. 31, 2010 Mar. 31, 2009
--------------------------------------------------------------------------

Lumber $ 107,618 $ 56,443
Logs 17,435 12,823
Wood chips and other by products 13,151 7,367
Other 1,735 644
--------------------------------------------------------------------------
$ 139,939 $ 77,277
--------------------------------------------------------------------------
--------------------------------------------------------------------------

The Company has capital assets, goodwill and other intangible assets
located in:
--------------------------------------------------------------------------
Mar. 31, 2010 Dec. 31, 2009
--------------------------------------------------------------------------

Canada $ 311,152 $ 299,365
United States 150,206 158,133
--------------------------------------------------------------------------
$ 461,358 $ 457,498
--------------------------------------------------------------------------
--------------------------------------------------------------------------

12. Employee future benefits:

The total benefits cost under its various pension, retirement savings and
other post-retirement benefit plans (described in the Company's audited
annual consolidated financial statements) are as follows:

--------------------------------------------------------------------------
3 Months 3 Months
Mar. 31, 2010 Mar. 31, 2009
--------------------------------------------------------------------------

Canadian employees' deferred profit
sharing plan $ 291 $ 317
Defined benefit plan 53 112
Unionized employees' pension plan 452 282
Post-retirement benefits plan 21 18
U.S. employees' 401(k) plan 152 159
Senior management supplementary pension plan 246 124
--------------------------------------------------------------------------
Total pension expense $ 1,215 $ 1,012
--------------------------------------------------------------------------
--------------------------------------------------------------------------

13. Financial instruments:

The Company employs financial instruments such as foreign currency
forward and option contracts to manage exposure to fluctuations in
foreign exchange rates. The Company does not expect any credit losses in
the event of non-performance by counterparties as the counterparties are
the Company's Canadian bankers, which are all highly rated.

As at March 31, 2010, the Company has outstanding obligations to sell a
maximum of US$18,400,000 at an average rate of CAD$1.0441 to the USD$1.00
and sell Japanese yens 210,498,114 at an average rate of yens 88.95 to
the US$1.00 during 2010. All foreign currency gains or losses to March
31, 2010 have been recognized in the Statement of Operations and the fair
value of these foreign currency contracts being an asset of $657,000
(measured based on Level 1 of the fair value hierarchy) has been recorded
in accounts receivable (December 31, 2009 - $403,000 asset fair value
measured based on Level 1 and recorded in accounts receivable).

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

Copyright 2010, Market Wire, All rights reserved.

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