POULSBO, Wash., Aug. 5, 2019 /PRNewswire/ -- Pope Resources
(NASDAQ:POPE) reported net income attributable to unitholders of
$2.2 million, or $0.50 per ownership unit, on consolidated revenue
of $28.0 million, for Q2 2019. This
compares to net income attributable to unitholders of $199,000, or $0.04
per ownership unit, on consolidated revenue of $27.9 million, for Q2 2018. The 2018 results
include a $2.9 million environmental
remediation expense for the former millsite at Port Gamble, Washington. Excluding this
charge, adjusted net income attributable to unitholders1
for Q2 2018 was $3.1 million, or
$0.71 per ownership unit.
Consolidated cash provided by operations during Q2 2019 was
$10.0 million compared to
$7.7 million during Q2 2018.
Cash available for distribution (CAD)2 was
$5.1 million during Q2 2019 compared
to $3.3 million during Q2 2018.
"Log prices in the Pacific Northwest continue to be held down by
a combination of uncertainty around tariff levels on logs exported
to China, plentiful log supply due
to favorable weather conditions, and inconsistent takeaway keeping
lumber inventories elevated," said Tom
Ringo, President and CEO. "Meanwhile, our operating
results for the first half of 2019 reflect an increase in our
annual sustainable harvest combined with our decision to front load
the 2019 harvest in anticipation of second-half log market
weakness."
The following tables summarize key metrics for the quarters
ended June 30, 2019, and 2018. Metrics presented on a
look-through2 basis consist of the sum of the
Partnership on a stand-alone basis plus the Partnership's share of
its three private equity timber funds, based on the Partnership's
percentage ownership interest in each fund, which ranges from 5% to
20%.
(in millions, except
volume and price data)
|
|
|
|
Q2 2019
|
Q2 2018
|
Volume (MMBF) -
Partnership
|
22.2
|
6.9
|
Volume (MMBF) -
Funds
|
20.3
|
28.6
|
Volume (MMBF) -
Look-through 3
|
24.3
|
10.6
|
Delivered log price
($/MBF) - Partnership
|
$618
|
$726
|
Delivered log price
($/MBF) - Funds
|
$585
|
$707
|
Delivered log price
($/MBF) - Look-through 3
|
$613
|
$728
|
Revenue -
Consolidated
|
$28.0
|
$27.9
|
Net income (loss) -
Consolidated
|
($1.2)
|
$2.5
|
Net income
attributable to unitholders
|
$2.2
|
$0.2
|
Adjusted net income
attributable to unitholders 1
|
$2.2
|
$3.1
|
Cash flow from
operations - Consolidated
|
$10.0
|
$7.7
|
Cash available for
distribution (CAD) 2
|
$5.1
|
$3.3
|
|
|
|
June 30,
2019
|
December 31,
2018
|
Debt, net of
unamortized debt issuance costs - Partnership
|
$98.9
|
$94.1
|
Debt, net of
unamortized debt issuance costs - Funds
|
$57.3
|
$57.3
|
Partnership Timber
Partnership Timber operating income during Q2 2019 was
$5.9 million, compared to
$1.8 million in Q2 2018. Adjusted
EBITDDA4 for this segment during Q2 2019 was
$7.6 million, versus $2.4 million in Q2 2018. Harvest volume in Q2
2019 was more than three times that of Q2 2018, as we implemented
our higher annual sustainable cut level in the first quarter of the
year and pulled forward harvest volume in anticipation of lower
prices for the second half of the year. Average realized log
prices, however, slipped downward by 15% between the two periods.
Compared to the historically high log prices we enjoyed in the
first half of 2018, we saw Q2 2019 prices impacted by a reduction
in export demand due to continued uncertainty around tariffs on
exports to China, which resulted
in an increased log supply available to domestic mills.
Funds Timber
Funds Timber operating loss during Q2 2019 was $1.8 million, compared to income of $4.7 million in Q2 2018. Adjusted EBITDDA for
this segment during Q2 2019 was $4.1
million, versus $12.5 million
in Q2 2018. The Funds recognized revenue of $8.9 million from the sale of 16.6 MMBF of volume
from timber deed sales in Q2 2018 compared to only $194,000 in Q2 2019. Delivered log volume, which
excludes timber deed sales, increased by 8.0 MMBF, or 67%, in Q2
2019 due to commencing operations on two of Fund IV's recently
acquired properties. This was not enough, however, to offset the
decrease in timber deed sales. Moreover, average realized log
prices were down 17% due to the aforementioned uncertainty around
tariffs applied to logs exported to China and the related increase in log supply
available to the domestic market. The Partnership's share of
Adjusted EBITDDA for Q2 2019 was $399,000, versus $1.7
million during Q2 2018.
Timberland Investment Management (TIM)
Total revenue, on an internal reporting basis, which is
eliminated in consolidation, amounted to $1.5 million during Q2 2019 versus $1.1 million in Q2 2018. The increase in revenue
is attributable to management fees generated from recent
acquisitions by Fund IV. After eliminations, TIM generated an
operating loss of $1.2 million during
Q2 2019, compared to an operating loss of $916,000 in Q2 2018. The increase in operating
loss is due primarily to increased costs associated with managing
the additional properties acquired by Fund IV and placing its
remaining committed capital. Adjusted EBITDDA during Q2 2019 was
$259,000 versus $102,000 in Q2 2018.
Real Estate
Real Estate generated an operating loss of $907,000 during Q2 2019, compared to an operating
loss of $315,000 in Q2 2018. The
results for Q2 2019 included the sale of five lots from a
single-family development project in northern Kitsap County. During the second quarter of
2019, we continued to make investments in our Harbor Hill project
in order to complete the sale of the final 65 residential lots in
the second half of the year. The Q2 2018 results included a
$3.7 million conservation easement
sale and $2.9 million of
environmental remediation expense, each of which had no counterpart
in Q2 2019. Adjusted EBITDDA for the Real Estate segment was
negative $753,000 during Q2 2019,
versus positive $2.7 million in Q2
2018, primarily as a result of the $3.7
million conservation easement sale in Q2 2018.
General & Administrative (G&A)
G&A expenses were $1.8 million
during Q2 2019 compared to $1.4
million in Q2 2018. The increase in G&A expenses is due
primarily to higher legal and professional fees.
Partnership Capital Allocation and Liquidity
In June 2019, the Partnership paid
a cash distribution to unitholders of $4.4
million. During Q2 2019, the Partnership repurchased 7,334
units at a weighted average price of $68.20 per unit, totaling $500,000, paid down its line of credit by
$200,000, and acquired a small
timberland parcel for $200,000.
These Q2 2019 capital outflows were financed primarily by CAD of
$5.1 million (that is net of Real
Estate development project expenditures of $1.3 million and environmental remediation
payments totaling $203,000).
In April, we refinanced the Partnership's $9.8 million, September
2019 debt maturity with Northwest Farm Credit Services by
entering into a 12-year note of the same amount with the same
lender. The refinancing lowers the Partnership's weighted average
interest rate on its debt to 3.58% from 3.78%, resulting in a
$205,000 annual reduction in interest
expense, net of expected annual patronage payments from the Farm
Credit system.
Outlook
We expect 2019 harvest volume will range between 61-65 MMBF for
the Partnership, and 78-82 MMBF for the Funds, including timber
deed sales. The Partnership volume includes 4-8 MMBF of volume from
timber located on real estate properties that is not factored into
our long-term, sustainable harvest plan of 57 MMBF. On a
look-through basis, total 2019 harvest volume, including timber
deed sales, is expected to be 72-76 MMBF. We expect choppiness at
best in log prices over the balance of 2019 with no predictability
to easing of U.S. - China trade
tensions, although this uncertainty may be mitigated by some
weather-related shutdowns as the summer fire season progresses.
We expect the Partnership to close on the sale of the remaining
65 residential lots from our Harbor Hill project in Gig Harbor, Washington; a parcel of timberland
in Kitsap County; and an
assortment of conservation easement, industrial lot, and
residential lot sales.
We will soon post an updated investor presentation to the
Investor Relations section of our web site at
www.poperesources.com.
About Pope Resources
Pope Resources, a publicly traded limited partnership, and its
subsidiaries Olympic Resource Management and Olympic Property
Group, own and manage 120,000 acres of timberland and 2,000 acres
of development property in Washington. In addition, Pope Resources
co-invests in and consolidates three private equity timber funds
that own 141,000 acres of timberland in Washington, Oregon, and California. The Partnership and its
predecessor companies have owned and managed timberlands and
development properties for over 165 years. Additional information
on the company can be found at www.poperesources.com. The contents
of our website are not incorporated into this release or into our
filings with the Securities and Exchange Commission.
Forward Looking Statements
This press release contains a number of projections and
statements about our expected financial condition, operating
results, business plans and objectives, and about management's
plans for future operations and strategies. These statements
reflect management's estimates and intentions based on current
goals and expectations about future developments. Because these
statements describe our goals, objectives, and anticipated
performance, they are inherently uncertain, and some or all of
these statements may not come to pass. Accordingly, they should not
be interpreted as promises of future management actions or
financial performance. Our future actions and actual performance
will vary from current expectations and under various circumstances
the results of these variations may be material and adverse. Among
those forward-looking statements contained in this report are
statements about management's expectations for future log prices,
harvest volumes and markets, and statements about our expectations
for future sales in our Real Estate segment and our Fund
operations. Readers, however, should note that all statements
other than expressions of historical fact are forward-looking in
nature. Some of the factors that may cause actual operating results
and financial condition to fall short of expectations, or that may
cause us to deviate from our current plans, include our ability to
accurately predict fluctuations in log markets domestically and
internationally, and to adjust our harvest volumes in a timely and
appropriate manner; political sensitivities and events, such as
tariffs and trade disputes, and threats of same, as those events
affect the reactions of foreign governments and international
treaty organizations and similar bodies, and which in turn may
affect the cost of competing products and demand for our products;
our ability to anticipate and manage interest rate risk as it
affects our borrowing costs; fluctuations in interest rates and
other factors that affect the U.S. housing market and related
demand for our products from that market; our ability to estimate
the cost of ongoing and changing environmental remediation
obligations, including our ability to anticipate and address the
political and regulatory climate that impacts these obligations;
increasing reliance on engineered, recycled, and other alternative
products as a competitive factor for our products; housing market
conditions that affect demand for both our forest products and our
real estate offerings; our ability to manage our timber funds and
their assets in a manner that our investors consider acceptable,
and to raise additional capital or establish new funds on terms
that are advantageous to the Partnership; conditions in the housing
construction and wood-products markets, both domestically and
globally, that affect demand for our products; our ability to
consummate various pending and anticipated real estate transactions
on the terms management expects; the effects of competition,
particularly by larger and better-financed competitors;
fluctuations in foreign currency exchange rates that affect both
competition for sales of our products and our customers' demand for
them; conditions affecting credit markets as they affect the
availability of capital and costs of borrowing for us, and the
related impacts on purchasers of forest products and development
properties; localized housing market conditions in the Puget Sound
region of Washington State, which
affect demand for our real estate offerings; our ability to manage
our timber funds and their assets in a manner that our investors
consider acceptable, and to raise additional capital or establish
new funds on terms that are advantageous to the Partnership;the
costs and potential management distraction associated with
continuing activities of our activist investor; labor, equipment
and transportation costs that affect our net income; our ability to
anticipate and mitigate potential impacts of our operations on
adjacent properties; and our ability to discover and to accurately
estimate other liabilities associated with our assets. Other
factors are set forth in that part of our Annual Report on Form
10-K entitled "Risk Factors," and in our other filings with the
Securities and Exchange Commission from time to time.
Forward-looking statements in this release are made only as of
the date shown above, and we cannot undertake to update these
statements.
1 As disclosed in our Form 10-K, our
environmental remediation project at Port
Gamble is the result of operations conducted by the former
owner of the site. As such, it does not result from our continuing
operations and will not impact our operating results once the
project is completed. Moreover, this item represents our only
non-core operating activity and is a matter over which management
has limited control. We believe that eliminating this expense from
our financial metrics provides management (and thus investors) with
insight into results from our core operating activities.
2 Management uses cash available for distribution
(CAD) as a meaningful indicator of liquidity and, as such, has
provided this information in addition to the generally accepted
accounting principles (GAAP)-based presentation of cash provided by
operating activities. Management considers CAD in evaluating
capital allocation alternatives. CAD is calculated for the
Partnership only and is a measure of cash generated by the
Partnership that starts with GAAP-based consolidated cash provided
by operating activities and subtracts cash provided by operating
activities for the Funds and capital expenditures of the
Partnership only, and adds distributions received by the
Partnership from the Funds. CAD represents cash generated that is
available to the Partnership for capital allocation alternatives,
such as distributions to unitholders, repurchasing units, paying
down debt, co-investing in the Funds, acquisition of timberland and
real estate, and other discretionary and nondiscretionary
activities. Our definition of CAD is limited in that it does not
solely represent residual cash flows available for discretionary
expenditures since the measure does not deduct required principal
payments on the Partnership's debt and other contractual
obligations. We believe, therefore, it is important to view CAD as
a measure that provides supplemental information to our
Consolidated Statements of Cash Flows. Our definition of CAD may be
different from similarly titled measures reported by other
companies, including those in our industry. CAD is not necessarily
indicative of the CAD that may be generated in future periods. CAD
is a non-GAAP liquidity measure which is reconciled to the GAAP
measure of cash provided by operating activities in the tables
below.
3"Look-through" results present the Partnership on
a stand-alone basis plus the Partnership's minority share of each
fund: 20% for Fund II, 5% for Fund III, and 15% for Fund
IV.
4We define Adjusted EBITDDA as earnings before
interest, taxes, depletion, depreciation, amortization, gain or
loss on timberland sold, and environmental remediation expense. In
addition, we reflect Adjusted EBITDDA on an internal reporting
basis without eliminating inter-segment activity, which has no net
impact on total Adjusted EBITDDA. Accordingly, fees earned from
managing the funds are reflected in the Timberland Investment
Management segment and this same amount is reflected as expense in
the Funds Timber segment. We believe Adjusted EBITDDA captures the
ongoing operations of each of our segments and is a useful
supplemental metric to assess the segments' financial performance.
Our definition of Adjusted EBITDDA may be different from similarly
titled measures reported by other companies, including those in our
industry. Adjusted EBITDDA is not necessarily indicative of the
Adjusted EBITDDA that may be generated in future periods. Adjusted
EBITDDA is a non-GAAP performance measure which is reconciled to
the GAAP measure of operating income in the tables below.
CONDENSED
CONSOLIDATING STATEMENTS OF INCOME (LOSS)
(in millions, except
per unit amounts)
|
|
Quarter Ended June
30, 2019
|
|
Quarter Ended June
30, 2018
|
|
Partner-ship
|
|
ORM Timber
Funds
|
|
Consol-idating
Entries
|
|
Consol-idated
|
|
Partner-ship
|
|
ORM Timber
Funds
|
|
Consol-idating
Entries
|
|
Consol-idated
|
Revenue
|
$17.0
|
|
|
$12.8
|
|
|
($1.8)
|
|
|
$28.0
|
|
|
$11.4
|
|
|
$17.9
|
|
|
($1.4)
|
|
|
$27.9
|
|
Cost of
sales
|
(7.6)
|
|
|
(13.2)
|
|
|
—
|
|
|
(20.8)
|
|
|
(2.7)
|
|
|
(11.9)
|
|
|
—
|
|
|
(14.6)
|
|
Operating
expenses
|
(6.0)
|
|
|
(2.7)
|
|
|
1.8
|
|
|
(7.0)
|
|
|
(5.5)
|
|
|
(2.5)
|
|
|
1.4
|
|
|
(6.6)
|
|
Environmental
remediation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.9)
|
|
|
—
|
|
|
—
|
|
|
(2.9)
|
|
Operating income
(loss)
|
3.4
|
|
|
(3.2)
|
|
|
—
|
|
|
0.2
|
|
|
0.3
|
|
|
3.5
|
|
|
—
|
|
|
3.8
|
|
Net interest
expense
|
(0.9)
|
|
|
(0.6)
|
|
|
—
|
|
|
(1.5)
|
|
|
(0.7)
|
|
|
(0.6)
|
|
|
—
|
|
|
(1.2)
|
|
Income tax
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net income
(loss)
|
2.6
|
|
|
(3.8)
|
|
|
—
|
|
|
(1.2)
|
|
|
(0.4)
|
|
|
2.9
|
|
|
—
|
|
|
2.5
|
|
Net (income) loss
attributable to noncontrolling interests
|
|
|
|
|
|
|
3.4
|
|
|
|
|
|
|
|
|
(2.3)
|
|
Net income
attributable to unitholders
|
|
|
|
|
|
|
$2.2
|
|
|
|
|
|
|
|
|
$0.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
weighted average units outstanding
|
|
|
|
|
|
|
4.323
|
|
|
|
|
|
|
|
|
4.320
|
|
Basic and diluted
earnings per unit
|
|
|
|
|
|
|
$0.50
|
|
|
|
|
|
|
|
|
$0.04
|
|
CONDENSED
CONSOLIDATING BALANCE SHEETS
(in
millions)
|
|
June 30,
2019
|
|
December 31,
2018
|
Assets:
|
Partner-ship
|
|
ORM
Timber
Funds
|
|
Consol-idating
Entries
|
|
Consol-idated
|
|
Partner-ship
|
|
ORM
Timber
Funds
|
|
Consol-idating
Entries
|
|
Consol-idated
|
Cash
|
$1.7
|
|
|
$3.5
|
|
|
$—
|
|
|
$5.2
|
|
|
$1.8
|
|
|
$3.3
|
|
|
$—
|
|
|
$5.1
|
|
Restricted
cash
|
0.8
|
|
|
—
|
|
|
—
|
|
|
0.8
|
|
|
0.9
|
|
|
—
|
|
|
—
|
|
|
0.9
|
|
Land and timber held
for sale
|
7.9
|
|
|
—
|
|
|
—
|
|
|
7.9
|
|
|
5.7
|
|
|
—
|
|
|
—
|
|
|
5.7
|
|
Other current
assets
|
4.6
|
|
|
4.9
|
|
|
(1.2)
|
|
|
8.3
|
|
|
4.6
|
|
|
4.9
|
|
|
(1.0)
|
|
|
8.6
|
|
Total current
assets
|
14.9
|
|
|
8.4
|
|
|
(1.2)
|
|
|
22.1
|
|
|
13.1
|
|
|
8.3
|
|
|
(1.0)
|
|
|
20.4
|
|
Timber and
roads
|
69.9
|
|
|
311.4
|
|
|
—
|
|
|
381.3
|
|
|
72.4
|
|
|
305.6
|
|
|
—
|
|
|
378.0
|
|
Timberland
|
19.6
|
|
|
57.4
|
|
|
—
|
|
|
77.1
|
|
|
19.7
|
|
|
54.5
|
|
|
—
|
|
|
74.3
|
|
Land held for
development
|
20.7
|
|
|
—
|
|
|
—
|
|
|
20.7
|
|
|
20.9
|
|
|
—
|
|
|
—
|
|
|
20.9
|
|
Buildings and
equipment, net
|
5.6
|
|
|
—
|
|
|
—
|
|
|
5.6
|
|
|
5.5
|
|
|
—
|
|
|
—
|
|
|
5.5
|
|
Investments in ORM
Timber Funds
|
35.7
|
|
|
—
|
|
|
(35.7)
|
|
|
—
|
|
|
34.2
|
|
|
—
|
|
|
(34.2)
|
|
|
—
|
|
Other
assets
|
9.4
|
|
|
—
|
|
|
(1.8)
|
|
|
7.6
|
|
|
9.1
|
|
|
2.0
|
|
|
(1.8)
|
|
|
9.3
|
|
Total assets
|
$175.9
|
|
|
$377.2
|
|
|
($38.7)
|
|
|
$514.4
|
|
|
$174.9
|
|
|
$370.4
|
|
|
($37.0)
|
|
|
$508.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
$6.2
|
|
|
$3.9
|
|
|
($1.2)
|
|
|
$8.9
|
|
|
$6.5
|
|
|
$3.2
|
|
|
($1.0)
|
|
|
$8.8
|
|
Current portion of
long-term debt
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
Current portion of
environmental remediation
|
0.8
|
|
|
—
|
|
|
—
|
|
|
0.8
|
|
|
1.1
|
|
|
—
|
|
|
—
|
|
|
1.1
|
|
Total current
liabilities
|
7.2
|
|
|
3.9
|
|
|
(1.2)
|
|
|
9.9
|
|
|
7.7
|
|
|
3.2
|
|
|
(1.0)
|
|
|
10.0
|
|
Long-term debt, net
of current portion and unamortized debt issuance costs
|
98.7
|
|
|
57.3
|
|
|
—
|
|
|
156.1
|
|
|
93.9
|
|
|
57.3
|
|
|
—
|
|
|
151.2
|
|
Environmental
remediation and other long-term liabilities
|
8.1
|
|
|
—
|
|
|
—
|
|
|
8.1
|
|
|
8.1
|
|
|
0.3
|
|
|
—
|
|
|
8.4
|
|
Total
liabilities
|
114.0
|
|
|
61.2
|
|
|
(1.2)
|
|
|
174.0
|
|
|
109.8
|
|
|
60.9
|
|
|
(1.0)
|
|
|
169.6
|
|
Partners'
capital
|
61.9
|
|
|
316.0
|
|
|
(323.5)
|
|
|
54.3
|
|
|
59.2
|
|
|
309.5
|
|
|
(311.3)
|
|
|
57.5
|
|
Noncontrolling
interests
|
—
|
|
|
—
|
|
|
286.0
|
|
|
286.0
|
|
|
5.9
|
|
|
—
|
|
|
275.2
|
|
|
281.1
|
|
Total liabilities and equity
|
$175.9
|
|
|
$377.2
|
|
|
($38.7)
|
|
|
$514.4
|
|
|
$174.9
|
|
|
$370.4
|
|
|
($37.0)
|
|
|
$508.2
|
|
RECONCILIATION
BETWEEN NET INCOME AND CASH FLOWS FROM OPERATIONS
(in
millions)
|
|
Quarter ended June
30,
|
|
2019
|
|
2018
|
|
|
|
|
Net income
(loss)
|
($1.2)
|
|
$2.5
|
Add back
(deduct):
|
|
|
|
Depletion
|
9.0
|
|
9.4
|
Equity-based
compensation
|
0.2
|
|
0.2
|
Real estate project
expenditures
|
(1.3)
|
|
(1.0)
|
Depreciation and
amortization
|
0.2
|
|
0.1
|
Deferred
taxes
|
—
|
|
(0.1)
|
Cost of land
sold
|
0.4
|
|
0.1
|
Loss on early
extinguishment of debt
|
0.1
|
|
—
|
Loss from
unconsolidated real estate joint venture
|
—
|
|
0.1
|
Environmental
remediation accruals
|
—
|
|
2.9
|
Environmental
remediation payments
|
(0.2)
|
|
(0.7)
|
Change in other
operating accounts
|
2.9
|
|
(6.0)
|
Cash provided by
operations
|
$10.0
|
|
$7.7
|
RECONCILIATION
BETWEEN NET INCOME ATTRIBUTABLE TO UNITHOLDERS AND ADJUSTED NET
INCOME ATTRIBUTABLE TO UNITHOLDERS, INCLUDING PER UNIT
AMOUNTS
(in millions, except
per unit amounts)
|
|
Quarter ended June
30,
|
|
2019
|
|
2018
|
|
|
|
|
GAAP net income
attributable to unitholders
|
$
|
2.2
|
|
$
|
0.2
|
Added
back:
|
|
|
|
Environmental
remediation
|
—
|
|
2.9
|
Adjusted net income
attributable to unitholders
|
$
|
2.2
|
|
$
|
3.1
|
|
|
|
|
Per unit
amounts:
|
|
|
|
GAAP basic and
diluted net income per unit
|
$
|
0.50
|
|
$
|
0.04
|
Added
back:
|
|
|
|
Environmental
remediation
|
—
|
|
0.67
|
Adjusted basic and
diluted net income per unit
|
$
|
0.50
|
|
$
|
0.71
|
SEGMENT ADJUSTED
EBITDDA
(in
millions)
|
|
Partnership
Timber
|
Funds
Timber
|
|
TIM
|
|
Real
Estate
|
|
G&A and
Other
|
|
Consolidated
|
Q2 2019
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss) - external
|
$5.9
|
|
($1.8)
|
|
|
($1.2)
|
|
|
($0.9)
|
|
|
($1.8)
|
|
|
$0.2
|
|
Intersegment
activity
|
—
|
|
(1.4)
|
|
|
1.4
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
Operating income
(loss) - internal
|
5.8
|
|
(3.2)
|
|
|
0.2
|
|
|
(0.8)
|
|
|
(1.8)
|
|
|
0.2
|
|
Depletion,
depreciation, and amortization
|
1.8
|
|
7.3
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
9.2
|
|
Adjusted
EBITDDA
|
7.6
|
|
4.1
|
|
|
0.3
|
|
|
(0.8)
|
|
|
(1.8)
|
|
|
9.4
|
|
Less Adjusted EBITDDA
attributable to NCI
|
—
|
|
(3.7)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.7)
|
|
Look-through Adjusted
EBITDDA
|
$7.6
|
|
$0.4
|
|
|
$0.3
|
|
|
($0.8)
|
|
|
($1.8)
|
|
|
$5.7
|
|
|
|
|
|
|
|
|
|
|
|
|
Q2 2018
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss) - external
|
$1.8
|
|
$4.7
|
|
|
($0.9)
|
|
|
($0.3)
|
|
|
($1.4)
|
|
|
$3.8
|
|
Intersegment
activity
|
0.1
|
|
(1.1)
|
|
|
1.0
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
Operating income
(loss) - internal
|
1.9
|
|
3.5
|
|
|
0.1
|
|
|
(0.2)
|
|
|
(1.4)
|
|
|
3.8
|
|
Depletion,
depreciation, and amortization
|
0.5
|
|
8.9
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
9.6
|
|
Environmental
remediation expense
|
—
|
|
—
|
|
|
—
|
|
|
2.9
|
|
|
—
|
|
|
2.9
|
|
Adjusted
EBITDDA
|
2.4
|
|
12.5
|
|
|
0.1
|
|
|
2.7
|
|
|
(1.4)
|
|
|
16.3
|
|
Less Adjusted EBITDDA
attributable to NCI
|
—
|
|
(10.7)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10.7)
|
|
Look-through Adjusted
EBITDDA
|
$2.4
|
|
$1.7
|
|
|
$0.1
|
|
|
$2.7
|
|
|
($1.4)
|
|
|
$5.6
|
|
CASH AVAILABLE FOR
DISTRIBUTION (CAD)
(In
millions)
|
|
Quarter ended June
30,
|
|
2019
|
|
2018
|
|
|
|
|
Cash provided by
operations - consolidated
|
$10.0
|
|
$7.7
|
Less: Cash provided
by operations - Funds
|
(4.8)
|
|
(4.0)
|
Less: Partnership
capital expenditures (1)
|
(0.6)
|
|
(0.8)
|
Add: Partnership's
share of Fund distributions
|
0.4
|
|
0.4
|
Cash available for
distribution (CAD)
|
$5.1
|
|
$3.3
|
|
(1) Capital
expenditures by the Partnership only and excluding timberland
acquisitions.
|
The following two tables reflect the Partnership's share of the
Funds' assets, liabilities, and operating results based on its 20%,
5%, and 15% ownership interest in Fund II, Fund III, and Fund IV,
respectively. We present this as additional information to help
readers understand the financial benefit we receive from investing
in these private equity vehicles and the resulting economics of
owning Pope Resources units. These results will fluctuate between
periods based on the relative activity in each fund and the
Partnership's different ownership interest in each fund:
PARTNERSHIP'S
SHARE OF TIMBER FUNDS - ASSETS AND LIABILITIES
(In
millions)
|
|
June 30,
2019
|
|
December 31,
2018
|
|
|
|
|
Cash
|
$0.4
|
|
$0.7
|
Other current
assets
|
0.6
|
|
0.6
|
Timber and
roads
|
35.4
|
|
34.0
|
Timberland
|
6.9
|
|
6.4
|
Other
assets
|
—
|
|
1.9
|
|
|
|
|
Current liabilities,
excluding current portion of long-term debt
|
0.6
|
|
0.4
|
Total debt
|
7.1
|
|
7.1
|
PARTNERSHIP'S
SHARE OF TIMBER FUNDS - REVENUE AND EXPENSES
(In
millions)
|
|
Quarter ended June
30,
|
|
2019
|
|
2018
|
|
|
|
|
Revenue
|
$1.4
|
|
$2.3
|
Cost of
sales
|
(1.4)
|
|
(1.5)
|
Operating
expenses
|
(0.3)
|
|
(0.2)
|
Interest expense,
net
|
(0.1)
|
|
(0.1)
|
VOLUME DATA -
LOOK-THROUGH BASIS
|
|
Quarter ended June
30,
|
|
2019
|
|
2018
|
Volumes by species
(million board feet):
|
|
|
|
Douglas-fir
domestic
|
13.9
|
|
4.0
|
Douglas-fir
export
|
3.7
|
|
1.1
|
Whitewood
domestic
|
1.1
|
|
0.5
|
Whitewood
export
|
0.5
|
|
0.4
|
Pine
|
0.1
|
|
—
|
Cedar
|
0.6
|
|
0.3
|
Hardwood
|
0.7
|
|
0.5
|
Pulpwood - all
species
|
3.7
|
|
1.6
|
Total log sale
volume
|
24.3
|
|
8.4
|
Timber deed sale
volume
|
—
|
|
2.2
|
Total
volume
|
24.3
|
|
10.6
|
PRICE DATA -
LOOK-THROUGH BASIS
|
|
Quarter ended June
30,
|
|
2019
|
|
2018
|
Average price
realizations by species (per thousand board feet):
|
|
|
|
Douglas-fir
domestic
|
$
|
662
|
|
$
|
813
|
Douglas-fir
export
|
688
|
|
859
|
Whitewood
domestic
|
451
|
|
608
|
Whitewood
export
|
536
|
|
719
|
Pine
|
432
|
|
516
|
Cedar
|
994
|
|
1,368
|
Hardwood
|
545
|
|
729
|
Pulpwood - all
species
|
360
|
|
348
|
Overall delivered log
price
|
613
|
|
728
|
Timber deed
sales
|
—
|
|
518
|
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SOURCE Pope Resources