Business News

Canfor Announces Asset Impairment Charge

Thursday 10. January 2008 - Canfor Corporation (TSX:CFP) today announced that as discussed in the management discussion and analysis contained in its third quarter report, Canfor reviews the carrying value of its long lived assets on a regular basis as events or changes in circumstances may warrant.

Accordingly in view of the ongoing operating losses and expected market conditions including exchange rates going forward, a review of the carrying value of all assets was undertaken. Where the carrying value of assets is not expected to be recoverable from future cash flows, they are written down to fair value. As a result Canfor expects its fourth quarter results to include a pre-tax impairment charge of approximately $256 million ($188 million net of future income taxes) related to its long-lived assets and other assets. Of the pre-tax impairment charge, approximately $90 million relates to the lumber segment, $141 million to the panels segment and $25 million to corporate and other segments.

The amount related to corporate and other segments includes a write-down of $10.6 million in the fair value of investments in asset-backed commercial paper, (ABCP), which is in addition to the amount recorded in the third quarter, with the result that a total provision of 20% of the face value of the investments will have been recorded. This impairment charge is based on current estimates and is subject to change.

Canfor’s fourth quarter and fiscal 2007 results are expected to be released on February 22, 2008.