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Name | Symbol | Market | Type |
---|---|---|---|
Pope Resources LP | NASDAQ:POPE | NASDAQ | Trust |
Price Change | % Change | Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 98.00 | 0.01 | 199,999.99 | 0 | 01:00:00 |
(
X
)
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
( )
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
91-1313292
|
(State or other jurisdiction of
incorporation or organization)
|
(IRS Employer
Identification Number)
|
|
Large Accelerated Filer
o
|
Accelerated Filer
x
|
Emerging growth company
o
|
|
Non-accelerated Filer
o
|
Smaller Reporting Company
o
|
|
Description
|
Page Number
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
2016
|
||||
ASSETS
|
|
|
|
||||
Current assets
|
|
|
|
||||
Partnership cash
|
$
|
1,627
|
|
|
$
|
1,871
|
|
ORM Timber Funds cash
|
3,245
|
|
|
1,066
|
|
||
Cash
|
4,872
|
|
|
2,937
|
|
||
Accounts receivable, net
|
3,445
|
|
|
4,381
|
|
||
Land and timber held for sale
|
9,416
|
|
|
20,503
|
|
||
Prepaid expenses and other current assets
|
707
|
|
|
4,385
|
|
||
Total current assets
|
18,440
|
|
|
32,206
|
|
||
Properties and equipment, at cost
|
|
|
|
|
|
||
Timber and roads, net of accumulated depletion (2017 - $118,987; 2016 - $110,533)
|
276,604
|
|
|
279,793
|
|
||
Timberland
|
55,152
|
|
|
54,369
|
|
||
Land held for development
|
25,530
|
|
|
24,390
|
|
||
Buildings and equipment, net of accumulated depreciation (2017 - $7,913; 2016 - $7,713)
|
5,452
|
|
|
5,628
|
|
||
Total property and equipment, at cost
|
362,738
|
|
|
364,180
|
|
||
Other assets
|
|
|
|
||||
Deferred tax and other assets
|
943
|
|
|
2,664
|
|
||
Total assets
|
$
|
382,121
|
|
|
$
|
399,050
|
|
|
|
|
|
||||
LIABILITIES, PARTNERS’ CAPITAL AND NONCONTROLLING INTERESTS
|
|
|
|
|
|
||
Current liabilities
|
|
|
|
|
|
||
Accounts payable
|
$
|
1,403
|
|
|
$
|
2,620
|
|
Accrued liabilities
|
4,031
|
|
|
3,843
|
|
||
Current portion of long-term debt
|
121
|
|
|
5,119
|
|
||
Deferred revenue
|
372
|
|
|
418
|
|
||
Current portion of environmental remediation liability
|
4,569
|
|
|
8,650
|
|
||
Other current liabilities
|
536
|
|
|
398
|
|
||
Total current liabilities
|
11,032
|
|
|
21,048
|
|
||
Long-term debt, net of unamortized debt issuance costs and current portion
|
135,690
|
|
|
125,291
|
|
||
Environmental remediation and other long-term liabilities
|
4,038
|
|
|
4,247
|
|
||
Partners’ capital and noncontrolling interests
|
|
|
|
|
|
||
General partners' capital (units issued and outstanding 2017 - 60; 2016 - 60)
|
908
|
|
|
934
|
|
||
Limited partners' capital (units issued and outstanding 2017 - 4,267; 2016 - 4,255)
|
56,271
|
|
|
58,199
|
|
||
Noncontrolling interests
|
174,182
|
|
|
189,331
|
|
||
Total partners’ capital and noncontrolling interests
|
231,361
|
|
|
248,464
|
|
||
Total liabilities, partners’ capital and noncontrolling interests
|
$
|
382,121
|
|
|
$
|
399,050
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Revenue
|
$
|
15,891
|
|
|
$
|
12,713
|
|
|
$
|
33,236
|
|
|
$
|
23,782
|
|
Cost of sales
|
(8,979
|
)
|
|
(7,471
|
)
|
|
(20,180
|
)
|
|
(14,611
|
)
|
||||
Operating expenses
|
(4,514
|
)
|
|
(4,041
|
)
|
|
(8,776
|
)
|
|
(7,414
|
)
|
||||
General and administrative expenses
|
(1,405
|
)
|
|
(1,059
|
)
|
|
(3,106
|
)
|
|
(2,663
|
)
|
||||
Gain on sale of timberland
|
—
|
|
|
—
|
|
|
12,503
|
|
|
226
|
|
||||
Income (loss) from operations
|
993
|
|
|
142
|
|
|
13,677
|
|
|
(680
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Interest expense, net
|
(1,117
|
)
|
|
(747
|
)
|
|
(2,127
|
)
|
|
(1,405
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Income (loss) before income taxes
|
(124
|
)
|
|
(605
|
)
|
|
11,550
|
|
|
(2,085
|
)
|
||||
Income tax expense
|
(3
|
)
|
|
—
|
|
|
(59
|
)
|
|
(50
|
)
|
||||
Net income (loss)
|
(127
|
)
|
|
(605
|
)
|
|
11,491
|
|
|
(2,135
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Net and comprehensive (income) loss attributable to noncontrolling interests - ORM Timber Funds
|
285
|
|
|
1,041
|
|
|
(7,963
|
)
|
|
1,536
|
|
||||
Net and comprehensive income (loss) attributable to unitholders
|
$
|
158
|
|
|
$
|
436
|
|
|
$
|
3,528
|
|
|
$
|
(599
|
)
|
|
|
|
|
|
|
|
|
||||||||
Allocable to general partners
|
$
|
2
|
|
|
$
|
6
|
|
|
$
|
49
|
|
|
$
|
(8
|
)
|
Allocable to limited partners
|
156
|
|
|
430
|
|
|
3,479
|
|
|
(591
|
)
|
||||
Net and comprehensive income (loss) attributable to unitholders
|
$
|
158
|
|
|
$
|
436
|
|
|
$
|
3,528
|
|
|
$
|
(599
|
)
|
|
|
|
|
|
|
|
|
||||||||
Basic and diluted earnings (loss) per unit attributable to unitholders
|
$
|
0.03
|
|
|
$
|
0.09
|
|
|
$
|
0.80
|
|
|
$
|
(0.15
|
)
|
|
|
|
|
|
|
|
|
||||||||
Basic and diluted weighted average units outstanding
|
4,327
|
|
|
4,313
|
|
|
4,326
|
|
|
4,312
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Distributions per unit
|
$
|
0.70
|
|
|
$
|
0.70
|
|
|
$
|
1.40
|
|
|
$
|
1.40
|
|
|
Attributable to Pope Resources
|
|
|
|
|
||||||||||
|
General Partners
|
|
Limited Partners
|
|
Noncontrolling Interests
|
|
Total
|
||||||||
December 31, 2016
|
$
|
934
|
|
|
$
|
58,199
|
|
|
$
|
189,331
|
|
|
$
|
248,464
|
|
Net income
|
49
|
|
|
3,479
|
|
|
7,963
|
|
|
11,491
|
|
||||
Cash distributions
|
(85
|
)
|
|
(6,030
|
)
|
|
(23,937
|
)
|
|
(30,052
|
)
|
||||
Capital call
|
—
|
|
|
—
|
|
|
825
|
|
|
825
|
|
||||
Equity-based compensation
|
11
|
|
|
773
|
|
|
—
|
|
|
784
|
|
||||
Unit repurchases
|
—
|
|
|
(57
|
)
|
|
—
|
|
|
(57
|
)
|
||||
Payroll taxes paid on unit net settlements
|
(1
|
)
|
|
(93
|
)
|
|
—
|
|
|
(94
|
)
|
||||
June 30, 2017
|
$
|
908
|
|
|
$
|
56,271
|
|
|
$
|
174,182
|
|
|
$
|
231,361
|
|
|
2017
|
|
2016
|
||||
Net income (loss)
|
$
|
11,491
|
|
|
$
|
(2,135
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities
|
|
|
|
|
|
||
Depletion
|
8,485
|
|
|
4,193
|
|
||
Equity-based compensation
|
784
|
|
|
594
|
|
||
Depreciation and amortization
|
252
|
|
|
371
|
|
||
Deferred taxes
|
44
|
|
|
—
|
|
||
Cost of land sold
|
301
|
|
|
1,037
|
|
||
Gain on sale of timberland
|
(12,503
|
)
|
|
(226
|
)
|
||
Gain on disposal of property and equipment
|
(3
|
)
|
|
(24
|
)
|
||
Cash flows from changes in operating accounts
|
|
|
|
|
|
||
Accounts receivable, net
|
936
|
|
|
638
|
|
||
Prepaid expenses and other assets
|
5,356
|
|
|
188
|
|
||
Real estate project expenditures
|
(4,294
|
)
|
|
(5,225
|
)
|
||
Accounts payable and accrued liabilities
|
(1,031
|
)
|
|
447
|
|
||
Deferred revenue
|
(47
|
)
|
|
40
|
|
||
Environmental remediation
|
(4,280
|
)
|
|
(4,175
|
)
|
||
Other current and long-term liabilities
|
129
|
|
|
(20
|
)
|
||
Net cash provided by (used in) operating activities
|
5,620
|
|
|
(4,297
|
)
|
||
|
|
|
|
||||
Cash flows from investing activities
|
|
|
|
|
|
||
Reforestation and roads
|
(1,109
|
)
|
|
(918
|
)
|
||
Capital expenditures
|
(92
|
)
|
|
(140
|
)
|
||
Proceeds from sale of property and equipment
|
30
|
|
|
—
|
|
||
Deposit for acquisition of timberland - Partnership
|
—
|
|
|
(1,581
|
)
|
||
Acquisition of timberland - Partnership
|
(4,951
|
)
|
|
(1,069
|
)
|
||
Proceeds from sale of timberland - Funds
|
26,444
|
|
|
723
|
|
||
Net cash provided by (used in) investing activities
|
20,322
|
|
|
(2,985
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities
|
|
|
|
|
|
||
Line of credit borrowings
|
18,507
|
|
|
9,250
|
|
||
Line of credit repayments
|
(8,000
|
)
|
|
—
|
|
||
Repayment of long-term debt
|
(5,059
|
)
|
|
(57
|
)
|
||
Debt issuance costs
|
(77
|
)
|
|
—
|
|
||
Unit repurchases
|
(57
|
)
|
|
—
|
|
||
Payroll taxes paid on unit net settlements
|
(94
|
)
|
|
(152
|
)
|
||
Cash distributions to unitholders
|
(6,115
|
)
|
|
(6,088
|
)
|
||
Cash distributions - ORM Timber Funds, net of distributions to Partnership
|
(23,937
|
)
|
|
(2,573
|
)
|
||
Capital call - ORM Timber Funds, net of Partnership contribution
|
825
|
|
|
—
|
|
||
Net cash provided by (used in) financing activities
|
(24,007
|
)
|
|
380
|
|
||
|
|
|
|
||||
Net increase (decrease) in cash
|
1,935
|
|
|
(6,902
|
)
|
||
Cash at beginning of period
|
2,937
|
|
|
9,706
|
|
||
Cash at end of period
|
$
|
4,872
|
|
|
$
|
2,804
|
|
1.
|
The condensed consolidated balance sheets as of
June 30, 2017
and
December 31, 2016
and the related condensed consolidated statements of comprehensive income (loss) for the
three- and six-month periods
and partners’ capital and cash flows for
six-month periods
ended
June 30, 2017
and
2016
, have been prepared by Pope Resources, A Delaware Limited Partnership (the “Partnership”), pursuant to the rules and regulations of the Securities and Exchange Commission. The condensed consolidated financial statements are unaudited but, in the opinion of management, reflect all adjustments (consisting only of normal recurring adjustments and accruals) necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods. The financial information as of
December 31, 2016
is derived from the Partnership’s audited consolidated financial statements and notes thereto for the year ended
December 31, 2016
, and should be read in conjunction with such financial statements and notes. The results of operations for the interim periods are not indicative of the results of operations that may be achieved for the entire fiscal year ending
December 31, 2017
.
|
2.
|
The financial statements in the Partnership’s
2016
annual report on Form 10-K include a summary of significant accounting policies of the Partnership and should be read in conjunction with this Quarterly Report on Form 10-Q.
|
3.
|
Prepaid expenses and other current assets included
$850,000
held by Internal Revenue Code Section 1031 like-kind exchange intermediaries at
December 31, 2016
. Deferred tax and other assets included
$1.9 million
held by like-kind exchange intermediaries at
December 31, 2016
. There were
no
amounts held by like-kind exchange intermediaries at
June 30, 2017
.
|
4.
|
The Partnership has
two
general partners: Pope MGP, Inc. and Pope EGP, Inc. In total, these two entities own
60,000
partnership units. The allocation of distributions, profits and losses among the general and limited partners is pro rata across all units outstanding.
|
5.
|
ORM Timber Fund II, Inc. (Fund II), ORM Timber Fund III (REIT) Inc. (Fund III) and ORM Timber Fund IV LLC (Fund IV), collectively “the Funds”, were formed by Olympic Resource Management LLC (ORMLLC), a wholly owned subsidiary of the Partnership, for the purpose of attracting capital to purchase timberlands. The objective of these Funds is to generate a return on investments through the acquisition, management, value enhancement and sale of timberland properties. Each fund is organized to operate for a specific term from the end of its respective investment period;
ten
years for each of Fund II and Fund III and
fifteen
years for Fund IV. Fund II and Fund III are scheduled to terminate in
March 2021
and
December 2025
, respectively. Fund IV will terminate on the fifteenth anniversary of its investment period. Fund
|
(in thousands)
|
June 30, 2017
|
|
December 31, 2016
|
||||
Assets:
|
|||||||
Cash
|
$
|
3,245
|
|
|
$
|
1,066
|
|
Land and timber held for sale
|
—
|
|
|
13,941
|
|
||
Other current assets
|
1,569
|
|
|
2,195
|
|
||
Total current assets
|
4,814
|
|
|
17,202
|
|
||
Properties and equipment, net of accumulated depletion and depreciation (2017 - $44,862; 2016 - $38,306)
|
243,130
|
|
|
249,197
|
|
||
Total assets
|
$
|
247,944
|
|
|
$
|
266,399
|
|
Liabilities and equity:
|
|
|
|
|
|
||
Current liabilities
|
$
|
2,248
|
|
|
$
|
2,256
|
|
Long-term debt, net of unamortized debt issuance costs
|
57,279
|
|
|
57,268
|
|
||
Total liabilities
|
59,527
|
|
|
59,524
|
|
||
Funds’ equity
|
188,417
|
|
|
206,875
|
|
||
Total liabilities and equity
|
$
|
247,944
|
|
|
$
|
266,399
|
|
6.
|
In the presentation of the Partnership’s revenue and operating income (loss) by segment, all intersegment revenue and expense is eliminated to determine operating income (loss) reported externally. The following tables reconcile internally reported income (loss) from operations to externally reported income (loss) from operations by business segment, for the
three and six months ended
June 30, 2017
and
2016
:
|
|
Fee Timber
|
|
|
|||||||||||||||||||||||
Three Months Ended June 30, (in thousands)
|
Pope Resources
|
ORM Timber Funds
|
Total Fee Timber
|
|
Timberland Investment Management
|
|
Real Estate
|
|
Other
|
|
Consolidated
|
|||||||||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Revenue - internal
|
$
|
8,253
|
|
$
|
7,273
|
|
$
|
15,526
|
|
|
$
|
817
|
|
|
$
|
549
|
|
|
$
|
—
|
|
|
$
|
16,892
|
|
|
Eliminations
|
(84
|
)
|
—
|
|
(84
|
)
|
|
(817
|
)
|
|
(100
|
)
|
|
—
|
|
|
(1,001
|
)
|
||||||||
Revenue - external
|
8,169
|
|
7,273
|
|
15,442
|
|
|
—
|
|
|
449
|
|
|
—
|
|
|
15,891
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Cost of sales
|
(3,336
|
)
|
(5,190
|
)
|
(8,526
|
)
|
|
—
|
|
|
(453
|
)
|
|
—
|
|
|
(8,979
|
)
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Operating, general and administrative expenses - internal
|
(1,466
|
)
|
(1,662
|
)
|
(3,128
|
)
|
|
(852
|
)
|
|
(1,511
|
)
|
|
(1,429
|
)
|
|
(6,920
|
)
|
||||||||
Eliminations
|
40
|
|
817
|
|
857
|
|
|
101
|
|
|
19
|
|
|
24
|
|
|
1,001
|
|
||||||||
Operating, general and administrative expenses - external
|
(1,426
|
)
|
(845
|
)
|
(2,271
|
)
|
|
(751
|
)
|
|
(1,492
|
)
|
|
(1,405
|
)
|
|
(5,919
|
)
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Income (loss) from operations - internal
|
3,451
|
|
421
|
|
3,872
|
|
|
(35
|
)
|
|
(1,415
|
)
|
|
(1,429
|
)
|
|
993
|
|
||||||||
Eliminations
|
(44
|
)
|
817
|
|
773
|
|
|
(716
|
)
|
|
(81
|
)
|
|
24
|
|
|
—
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Income (loss) from operations - external
|
$
|
3,407
|
|
$
|
1,238
|
|
$
|
4,645
|
|
|
$
|
(751
|
)
|
|
$
|
(1,496
|
)
|
|
$
|
(1,405
|
)
|
|
$
|
993
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Revenue - internal
|
$
|
8,186
|
|
$
|
4,136
|
|
$
|
12,322
|
|
|
$
|
788
|
|
|
$
|
516
|
|
|
$
|
—
|
|
|
$
|
13,626
|
|
|
Eliminations
|
(52
|
)
|
—
|
|
(52
|
)
|
|
(788
|
)
|
|
(73
|
)
|
|
—
|
|
|
(913
|
)
|
||||||||
Revenue - external
|
8,134
|
|
4,136
|
|
12,270
|
|
|
—
|
|
|
443
|
|
|
—
|
|
|
12,713
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Cost of sales
|
(3,789
|
)
|
(3,197
|
)
|
(6,986
|
)
|
|
—
|
|
|
(485
|
)
|
|
—
|
|
|
(7,471
|
)
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Operating, general and administrative expenses - internal
|
(1,597
|
)
|
(1,544
|
)
|
(3,141
|
)
|
|
(665
|
)
|
|
(1,133
|
)
|
|
(1,074
|
)
|
|
(6,013
|
)
|
||||||||
Eliminations
|
32
|
|
794
|
|
826
|
|
|
62
|
|
|
10
|
|
|
15
|
|
|
913
|
|
||||||||
Operating, general and administrative expenses -external
|
(1,565
|
)
|
(750
|
)
|
(2,315
|
)
|
|
(603
|
)
|
|
(1,123
|
)
|
|
(1,059
|
)
|
|
(5,100
|
)
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Income (loss) from operations - internal
|
2,800
|
|
(605
|
)
|
2,195
|
|
|
123
|
|
|
(1,102
|
)
|
|
(1,074
|
)
|
|
142
|
|
||||||||
Eliminations
|
(20
|
)
|
794
|
|
774
|
|
|
(726
|
)
|
|
(63
|
)
|
|
15
|
|
|
—
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Income (loss) from operations - external
|
$
|
2,780
|
|
$
|
189
|
|
$
|
2,969
|
|
|
$
|
(603
|
)
|
|
$
|
(1,165
|
)
|
|
$
|
(1,059
|
)
|
|
$
|
142
|
|
|
Fee Timber
|
|
|
|||||||||||||||||||||||
Six Months Ended June 30, (in thousands)
|
Pope Resources
|
ORM Timber Funds
|
Total Fee Timber
|
|
Timberland Investment Management
|
|
Real Estate
|
|
Other
|
|
Consolidated
|
|||||||||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Revenue - internal
|
$
|
17,444
|
|
$
|
14,979
|
|
$
|
32,423
|
|
|
$
|
1,665
|
|
|
$
|
1,216
|
|
|
$
|
—
|
|
|
$
|
35,304
|
|
|
Eliminations
|
(169
|
)
|
—
|
|
(169
|
)
|
|
(1,665
|
)
|
|
(234
|
)
|
|
—
|
|
|
(2,068
|
)
|
||||||||
Revenue - external
|
17,275
|
|
14,979
|
|
32,254
|
|
|
—
|
|
|
982
|
|
|
—
|
|
|
33,236
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Cost of sales
|
(6,878
|
)
|
(12,283
|
)
|
(19,161
|
)
|
|
—
|
|
|
(1,019
|
)
|
|
—
|
|
|
(20,180
|
)
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Operating, general and administrative expenses - internal
|
(2,710
|
)
|
(3,435
|
)
|
(6,145
|
)
|
|
(1,925
|
)
|
|
(2,716
|
)
|
|
(3,164
|
)
|
|
(13,950
|
)
|
||||||||
Eliminations
|
97
|
|
1,665
|
|
1,762
|
|
|
208
|
|
|
40
|
|
|
58
|
|
|
2,068
|
|
||||||||
Operating, general and administrative expenses - external
|
(2,613
|
)
|
(1,770
|
)
|
(4,383
|
)
|
|
(1,717
|
)
|
|
(2,676
|
)
|
|
(3,106
|
)
|
|
(11,882
|
)
|
||||||||
Gain on sale of timberland
|
—
|
|
12,503
|
|
12,503
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,503
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Income (loss) from operations - internal
|
7,856
|
|
11,764
|
|
19,620
|
|
|
(260
|
)
|
|
(2,519
|
)
|
|
(3,164
|
)
|
|
13,677
|
|
||||||||
Eliminations
|
(72
|
)
|
1,665
|
|
1,593
|
|
|
(1,457
|
)
|
|
(194
|
)
|
|
58
|
|
|
—
|
|
||||||||
Income (loss) from operations - external
|
$
|
7,784
|
|
$
|
13,429
|
|
$
|
21,213
|
|
|
$
|
(1,717
|
)
|
|
$
|
(2,713
|
)
|
|
$
|
(3,106
|
)
|
|
$
|
13,677
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Revenue - internal
|
$
|
12,624
|
|
$
|
9,498
|
|
$
|
22,122
|
|
|
$
|
1,611
|
|
|
$
|
1,900
|
|
|
$
|
—
|
|
|
$
|
25,633
|
|
|
Eliminations
|
(100
|
)
|
—
|
|
(100
|
)
|
|
(1,603
|
)
|
|
(148
|
)
|
|
—
|
|
|
(1,851
|
)
|
||||||||
Revenue - external
|
12,524
|
|
9,498
|
|
22,022
|
|
|
8
|
|
|
1,752
|
|
|
—
|
|
|
23,782
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Cost of sales
|
(5,397
|
)
|
(7,482
|
)
|
(12,879
|
)
|
|
—
|
|
|
(1,732
|
)
|
|
—
|
|
|
(14,611
|
)
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Operating, general and administrative expenses - internal
|
(2,797
|
)
|
(2,787
|
)
|
(5,584
|
)
|
|
(1,406
|
)
|
|
(2,241
|
)
|
|
(2,697
|
)
|
|
(11,928
|
)
|
||||||||
Eliminations
|
59
|
|
1,609
|
|
1,668
|
|
|
129
|
|
|
20
|
|
|
34
|
|
|
1,851
|
|
||||||||
Operating, general and administrative expenses - external
|
(2,738
|
)
|
(1,178
|
)
|
(3,916
|
)
|
|
(1,277
|
)
|
|
(2,221
|
)
|
|
(2,663
|
)
|
|
(10,077
|
)
|
||||||||
Gain on sale of timberland
|
—
|
|
226
|
|
226
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
226
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Income (loss) from operations - internal
|
4,430
|
|
(545
|
)
|
3,885
|
|
|
205
|
|
|
(2,073
|
)
|
|
(2,697
|
)
|
|
(680
|
)
|
||||||||
Eliminations
|
(41
|
)
|
1,609
|
|
1,568
|
|
|
(1,474
|
)
|
|
(128
|
)
|
|
34
|
|
|
—
|
|
||||||||
Income (loss) from operations - external
|
$
|
4,389
|
|
$
|
1,064
|
|
$
|
5,453
|
|
|
$
|
(1,269
|
)
|
|
$
|
(2,201
|
)
|
|
$
|
(2,663
|
)
|
|
$
|
(680
|
)
|
7.
|
Basic and diluted earnings per unit are calculated by dividing net income (loss) attributable to unitholders, adjusted for non-forfeitable distributions paid out to unvested restricted unitholders and preferred shareholders of Fund II and Fund III, by the weighted average units outstanding during the period. There were no dilutive securities outstanding during the periods presented. The following table shows the calculation of basic and diluted earnings per unit:
|
|
Quarter Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
(in thousands, except per unit amounts)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net and comprehensive income (loss) attributable to Pope Resources’ unitholders
|
$
|
158
|
|
|
$
|
436
|
|
|
$
|
3,528
|
|
|
$
|
(599
|
)
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net and comprehensive income attributable to unvested restricted unitholders
|
(25
|
)
|
|
(25
|
)
|
|
(56
|
)
|
|
(50
|
)
|
||||
Preferred share dividends - ORM Timber Funds
|
(8
|
)
|
|
(8
|
)
|
|
(16
|
)
|
|
(16
|
)
|
||||
Net and comprehensive income (loss) for calculation of earnings per unit
|
$
|
125
|
|
|
$
|
403
|
|
|
$
|
3,456
|
|
|
$
|
(665
|
)
|
|
|
|
|
|
|
|
|
||||||||
Basic and diluted weighted average units outstanding
|
4,327
|
|
|
4,313
|
|
|
4,326
|
|
|
4,312
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic and diluted earnings (loss) per unit
|
$
|
0.03
|
|
|
$
|
0.09
|
|
|
$
|
0.80
|
|
|
$
|
(0.15
|
)
|
8.
|
In the first quarter of
2017
, the Partnership issued
14,860
restricted units pursuant to the management incentive compensation program and
3,820
restricted units to members of the Board of Directors. These restricted units vest ratably over
four years
with the grant date fair value equal to the market price on the date of grant. During the
six months ended
June 30, 2017
,
1,088
units were granted with no restrictions to certain board members who elected to receive their quarterly board compensation in the form of units rather than cash. Units granted to directors are included in the calculation of total equity compensation expense which is recognized over the vesting period, for restricted units, or immediately for unrestricted units. Grants to retirement-eligible individuals on the date of grant are expensed immediately. The Partnership recognized
$180,000
and
$178,000
of equity compensation expense in the
second quarter
of
2017
and
2016
, respectively, related to these compensation programs and
$784,000
and
$594,000
for the
six months ended
June 30, 2017
and
2016
, respectively,
|
9.
|
In May 2017, the Partnership adopted a unit repurchase plan under Rule 10b5-1 of the Securities Exchange Act of 1934. The plan allows for the repurchase of units with an aggregate value of up to
$1.2 million
through June 1, 2018. The Partnership repurchased units with an aggregate value of
$57,000
in the second quarter of 2017.
|
10.
|
Supplemental disclosure of cash flow information: interest paid, net of amounts capitalized, totaled
$1.9 million
and
$1.2 million
during the first
six months
of
2017
and
2016
, respectively. Income taxes paid totaled
$24,000
and
$146,000
during the first
six months
of
2017
and
2016
, respectively.
|
11.
|
During the first quarter of 2017, the Partnership closed on acquisitions of timberland in western Washington totaling
1,648
acres for
$5.0 million
. The aggregate purchase price was allocated
$783,000
to land and
$4.2 million
to timber and roads.
|
12.
|
In June 2017, the Partnership amended its
$21.0 million
credit facility with Northwest Farm Credit Services to increase the borrowing capacity to
$31.0 million
and restructure the facility to a revolving line of credit through December 31, 2019, at which time it may be repaid or converted to a term loan facility with multiple tranches that have an ultimate maturity in July 2027. Advances under the loan require quarterly interest-only payments with principal due at maturity. These advances may bear interest at a variable rate based on the one-month LIBOR plus a margin of
1.85%
(base rate loan segment) or at fixed rates based on the lender's rate pricing index, for terms of one through ten years, plus a margin of
1.95%
(fixed rate loan segment). In addition, base rate loan segments may be converted to fixed rate loan segments, though no more than
six
fixed rate loan segments may be outstanding at any time. The Partnership had
$6.0 million
outstanding under this facility as a base rate loan segment at
June 30, 2017
and
December 31, 2016
.
|
13.
|
The Partnership’s financial instruments include cash and accounts receivable, for which the carrying amount of each represents fair value based on current market interest rates or their short-term nature.
|
14.
|
The Partnership had an accrual for estimated environmental remediation costs of
$8.5 million
and
$12.8 million
as of
June 30, 2017
and
December 31, 2016
, respectively. The environmental remediation liability represents management’s estimate of payments to be made to remediate and monitor certain areas in and around Port Gamble Bay, Washington.
|
(in thousands)
|
Balance at Beginning of the Period
|
|
Additions to Accrual
|
|
Expenditures for Remediation
|
|
Balance at Period-end
|
||||||||
Year ended December 31, 2015
|
$
|
21,651
|
|
|
$
|
—
|
|
|
$
|
4,890
|
|
|
$
|
16,761
|
|
Year ended December 31, 2016
|
16,761
|
|
|
7,700
|
|
|
11,691
|
|
|
12,770
|
|
||||
Quarter ended March 31, 2017
|
12,770
|
|
|
—
|
|
|
3,329
|
|
|
9,441
|
|
||||
Quarter ended June 30, 2017
|
$
|
9,441
|
|
|
$
|
—
|
|
|
$
|
951
|
|
|
$
|
8,490
|
|
•
|
Harvest volume was
23.3 million
board feet (MMBF) in
Q2
2017
compared to
20.9 MMBF
in
Q2
2016
, an
11%
increase. Harvest volume for the first
six months
of
2017
was
50.6 MMBF
compared to
36.6 MMBF
for the corresponding period of
2016
, a
38%
increase. These harvest volume figures do not include timber deed sales, sold by Fund III, of 2.1 MMBF and 2.4 MMBF for the quarter and six months ended June 30, 2017, respectively. The harvest volume and log price realization metrics cited below also exclude these timber deed sales, except as noted otherwise.
|
•
|
The average realized log price was
$616
per thousand board feet (MBF) in
Q2
2017
, a 9% increase compared to
$563
per MBF in
Q2
2016
. For the first
six months
of
2017
, the average realized log price was
$605
per MBF compared to
$575
per MBF for the corresponding period of
2016
, a
5%
increase.
|
•
|
As a percentage of total harvest, volume sold to domestic markets in
Q2
2017
decreased to
59%
from
66%
in
Q2
2016
, while the mix of volume sold to export markets increased to
21%
in
Q2
2017
from
15%
in
Q2
2016
. For the first
six months
of
2017
, the relative percentages of volume sold to domestic and export markets were
59%
and
22%
, respectively,
|
•
|
In June 2017, we modified a credit facility to increase the Partnership’s borrowing capacity under that particular facility from $21.0 million to $31.0 million. We also worked with the lender to amend this facility’s structure. Between now and December 31, 2019, it will operate as a revolving line of credit and thereafter it will convert to a term loan with multiple tranches that have an ultimate maturity in July 2027.
|
•
|
During the quarter, the Partnership repurchased 744 units at an average price of $76.52 per unit under a unit repurchase plan, leaving $1.1 million remaining under the plan through June 2018.
|
(in thousands)
|
Quarter Ended
June 30, |
|
Six Months Ended
June 30, |
||||
Net income (loss) attributable to Pope Resources’ unitholders:
|
|
|
|
||||
2017 period
|
$
|
158
|
|
|
$
|
3,528
|
|
2016 period
|
436
|
|
|
(599
|
)
|
||
Variance
|
$
|
(278
|
)
|
|
$
|
4,127
|
|
Detail of variance:
|
|
|
|
|
|
||
Fee Timber
|
|
|
|
|
|
||
Log volumes (A)
|
$
|
1,351
|
|
|
$
|
8,050
|
|
Log price realizations (B)
|
1,235
|
|
|
1,518
|
|
||
Gain on sale of timberland
|
—
|
|
|
12,277
|
|
||
Timber deed sales
|
638
|
|
|
710
|
|
||
Production costs
|
160
|
|
|
(1,990
|
)
|
||
Depletion
|
(1,700
|
)
|
|
(4,292
|
)
|
||
Other Fee Timber
|
(8
|
)
|
|
(513
|
)
|
||
Timberland Investment Management
|
(148
|
)
|
|
(448
|
)
|
||
Real Estate
|
|
|
|
|
|
||
Land sales
|
62
|
|
|
(23
|
)
|
||
Other Real Estate
|
(393
|
)
|
|
(489
|
)
|
||
General and administrative costs
|
(346
|
)
|
|
(443
|
)
|
||
Net interest expense
|
(370
|
)
|
|
(722
|
)
|
||
Income taxes
|
(3
|
)
|
|
(9
|
)
|
||
Noncontrolling interests
|
(756
|
)
|
|
(9,499
|
)
|
||
Total variances
|
$
|
(278
|
)
|
|
$
|
4,127
|
|
(A)
|
Volume variance calculated by multiplying the change in sales volume by the average log sales price for the comparison period.
|
(B)
|
Price variance calculated by multiplying the change in average realized price by current period sales volume.
|
(in millions)
Quarter ended
|
|
Log Sale
Revenue
|
|
Other
Revenue
|
|
Total Fee
Timber
Revenue
|
|
Gain on Sale of
Timberland
|
|
Operating
Income
|
|
Harvest
Volume
(MMBF)
|
|
Timber Deed Sale Volume (MMBF)
|
||||||||||||
Partnership
|
|
$
|
7.7
|
|
|
$
|
0.5
|
|
|
$
|
8.2
|
|
|
$
|
—
|
|
|
$
|
3.4
|
|
|
12.5
|
|
|
—
|
|
Funds
|
|
6.6
|
|
|
0.6
|
|
|
7.2
|
|
|
—
|
|
|
1.2
|
|
|
10.8
|
|
|
2.1
|
|
|||||
Total June 2017
|
|
$
|
14.3
|
|
|
$
|
1.1
|
|
|
$
|
15.4
|
|
|
$
|
—
|
|
|
$
|
4.6
|
|
|
23.3
|
|
|
2.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Partnership
|
|
$
|
8.7
|
|
|
$
|
0.4
|
|
|
$
|
9.1
|
|
|
$
|
—
|
|
|
$
|
4.4
|
|
|
14.1
|
|
|
—
|
|
Funds
|
|
7.6
|
|
|
0.1
|
|
|
7.7
|
|
|
12.5
|
|
|
12.2
|
|
|
13.2
|
|
|
0.3
|
|
|||||
Total March 2017
|
|
$
|
16.3
|
|
|
$
|
0.5
|
|
|
$
|
16.8
|
|
|
$
|
12.5
|
|
|
$
|
16.6
|
|
|
27.3
|
|
|
0.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Partnership
|
|
$
|
7.7
|
|
|
$
|
0.5
|
|
|
$
|
8.2
|
|
|
$
|
—
|
|
|
$
|
2.8
|
|
|
13.7
|
|
|
—
|
|
Funds
|
|
4.1
|
|
|
—
|
|
|
4.1
|
|
|
—
|
|
|
0.2
|
|
|
7.2
|
|
|
—
|
|
|||||
Total June 2016
|
|
$
|
11.8
|
|
|
$
|
0.5
|
|
|
$
|
12.3
|
|
|
$
|
—
|
|
|
$
|
3.0
|
|
|
20.9
|
|
|
—
|
|
(in millions) Six Months Ended
|
|
Log Sale Revenue
|
|
Other Revenue
|
|
Total Fee Timber Revenue
|
|
Gain (loss) on Sale of Timberland
|
|
Operating Income
|
|
Harvest Volume (MMBF)
|
|
Timber Deed Sale Volume (MMBF)
|
||||||||||||
Partnership
|
|
$
|
16.4
|
|
|
$
|
0.9
|
|
|
$
|
17.3
|
|
|
$
|
—
|
|
|
$
|
7.8
|
|
|
26.6
|
|
|
—
|
|
Funds
|
|
14.2
|
|
|
0.7
|
|
|
14.9
|
|
|
12.5
|
|
|
13.4
|
|
|
24.0
|
|
|
2.4
|
|
|||||
Total June 2017
|
|
$
|
30.6
|
|
|
$
|
1.6
|
|
|
$
|
32.2
|
|
|
$
|
12.5
|
|
|
$
|
21.2
|
|
|
50.6
|
|
|
2.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Partnership
|
|
$
|
11.6
|
|
|
$
|
0.9
|
|
|
$
|
12.5
|
|
|
$
|
—
|
|
|
$
|
4.4
|
|
|
20.0
|
|
|
—
|
|
Funds
|
|
9.4
|
|
|
0.1
|
|
|
9.5
|
|
|
0.2
|
|
|
1.1
|
|
|
16.6
|
|
|
—
|
|
|||||
Total June 2016
|
|
$
|
21.0
|
|
|
$
|
1.0
|
|
|
$
|
22.0
|
|
|
$
|
0.2
|
|
|
$
|
5.5
|
|
|
36.6
|
|
|
—
|
|
Volume (in MMBF)
|
Quarter Ended
|
||||||||||||||
|
|
Jun-17
|
% Total
|
|
Mar-17
|
% Total
|
|
|
Jun-16
|
% Total
|
|||||
Sawlogs
|
Douglas-fir
|
13.7
|
|
59
|
%
|
|
16.0
|
|
59
|
%
|
|
9.4
|
|
45
|
%
|
|
Whitewood
|
3.3
|
|
14
|
%
|
|
5.5
|
|
20
|
%
|
|
5.4
|
|
26
|
%
|
|
Pine
|
1.3
|
|
5
|
%
|
|
—
|
|
—
|
%
|
|
1.2
|
|
6
|
%
|
|
Cedar
|
0.4
|
|
2
|
%
|
|
0.7
|
|
2
|
%
|
|
1.0
|
|
5
|
%
|
|
Hardwood
|
0.9
|
|
4
|
%
|
|
0.5
|
|
2
|
%
|
|
0.7
|
|
3
|
%
|
Pulpwood
|
All Species
|
3.7
|
|
16
|
%
|
|
4.6
|
|
17
|
%
|
|
3.2
|
|
15
|
%
|
Total
|
|
23.3
|
|
100
|
%
|
|
27.3
|
|
100
|
%
|
|
20.9
|
|
100
|
%
|
Volume (in MMBF)
|
Six Months Ended
|
|||||||||
|
|
Jun-17
|
% Total
|
|
Jun-16
|
% Total
|
||||
Sawlogs:
|
Douglas-fir
|
29.7
|
|
59
|
%
|
|
18.2
|
|
50
|
%
|
|
Whitewood
|
8.8
|
|
17
|
%
|
|
8.0
|
|
22
|
%
|
|
Pine
|
1.3
|
|
3
|
%
|
|
1.2
|
|
3
|
%
|
|
Cedar
|
1.1
|
|
2
|
%
|
|
1.9
|
|
5
|
%
|
|
Hardwood
|
1.4
|
|
3
|
%
|
|
1.3
|
|
4
|
%
|
Pulpwood:
|
All Species
|
8.3
|
|
16
|
%
|
|
6.0
|
|
16
|
%
|
Total
|
|
50.6
|
|
100
|
%
|
|
36.6
|
|
100
|
%
|
|
|
Quarter Ended
|
||||||||||
|
|
Jun-17
|
|
Mar-17
|
|
Jun-16
|
||||||
Average price realizations (per MBF):
|
|
|
||||||||||
Sawlogs:
|
Douglas-fir
|
$
|
694
|
|
|
$
|
663
|
|
|
$
|
596
|
|
|
Whitewood
|
602
|
|
|
548
|
|
|
550
|
|
|||
|
Pine
|
486
|
|
|
—
|
|
|
500
|
|
|||
|
Cedar
|
1,414
|
|
|
1,369
|
|
|
1,271
|
|
|||
|
Hardwood
|
685
|
|
|
615
|
|
|
521
|
|
|||
Pulpwood:
|
All Species
|
297
|
|
|
290
|
|
|
290
|
|
|||
Overall
|
|
616
|
|
|
596
|
|
|
563
|
|
|
|
Change to Q2 2017 from Quarter Ended
|
||||||||||||
|
|
Mar-17
|
|
Jun-16
|
||||||||||
|
|
$/MBF
|
|
%
|
|
$/MBF
|
|
%
|
||||||
Sawlogs:
|
Douglas-fir
|
$
|
31
|
|
|
5
|
%
|
|
$
|
98
|
|
|
16
|
%
|
|
Whitewood
|
54
|
|
|
10
|
%
|
|
52
|
|
|
9
|
%
|
||
|
Pine
|
486
|
|
|
NA
|
|
|
(14
|
)
|
|
(3
|
%)
|
||
|
Cedar
|
45
|
|
|
3
|
%
|
|
143
|
|
|
11
|
%
|
||
|
Hardwood
|
70
|
|
|
11
|
%
|
|
164
|
|
|
31
|
%
|
||
Pulpwood:
|
All Species
|
7
|
|
|
2
|
%
|
|
7
|
|
|
2
|
%
|
||
Overall
|
|
20
|
|
|
3
|
%
|
|
53
|
|
|
9
|
%
|
|
|
Six Months Ended
|
|||||||||||||
|
|
Jun-17
|
|
|
|
|
|
Jun-16
|
|||||||
|
|
|
|
|
∆ from Jun -17 to Jun -16
|
|
|
|
|||||||
|
|
|
|
$/MBF
|
|
%
|
|
|
|||||||
Sawlogs:
|
Douglas-fir
|
$
|
677
|
|
|
$
|
69
|
|
|
11
|
%
|
|
$
|
608
|
|
|
Whitewood
|
568
|
|
|
38
|
|
|
7
|
%
|
|
530
|
|
|||
|
Pine
|
501
|
|
|
1
|
|
|
—
|
%
|
|
500
|
|
|||
|
Cedar
|
1,384
|
|
|
—
|
|
|
—
|
%
|
|
1,384
|
|
|||
|
Hardwood
|
660
|
|
|
131
|
|
|
25
|
%
|
|
529
|
|
|||
Pulpwood:
|
All species
|
293
|
|
|
(7
|
)
|
|
(2
|
%)
|
|
300
|
|
|||
Overall
|
|
605
|
|
|
30
|
|
|
5
|
%
|
|
575
|
|
|
Q2 2017
|
|
Q1 2017
|
|
Q2 2016
|
|||||||||||||||||||||
|
Volume
|
|
|
|
|
Volume
|
|
|
|
Volume
|
|
|
||||||||||||||
Destination
|
MMBF
|
%
|
|
Price
|
|
MMBF
|
%
|
|
Price
|
|
MMBF
|
%
|
|
Price
|
||||||||||||
Domestic mills
|
13.7
|
|
59
|
%
|
|
$
|
657
|
|
|
16.1
|
|
59
|
%
|
|
$
|
653
|
|
|
13.8
|
|
66
|
%
|
|
$
|
618
|
|
Export brokers
|
5.0
|
|
21
|
%
|
|
731
|
|
|
6.1
|
|
22
|
%
|
|
670
|
|
|
3.2
|
|
15
|
%
|
|
607
|
|
|||
Hardwood
|
0.9
|
|
4
|
%
|
|
685
|
|
|
0.5
|
|
2
|
%
|
|
615
|
|
|
0.7
|
|
4
|
%
|
|
521
|
|
|||
Pulpwood
|
3.7
|
|
16
|
%
|
|
297
|
|
|
4.6
|
|
17
|
%
|
|
290
|
|
|
3.2
|
|
15
|
%
|
|
290
|
|
|||
Total
|
23.3
|
|
100
|
%
|
|
616
|
|
|
27.3
|
|
100
|
%
|
|
596
|
|
|
20.9
|
|
100
|
%
|
|
563
|
|
|||
Timber deed sale
|
2.1
|
|
|
|
|
301
|
|
|
0.3
|
|
|
|
|
229
|
|
|
—
|
|
|
|
|
—
|
|
|||
Total
|
25.4
|
|
|
|
|
|
|
|
27.6
|
|
|
|
|
|
|
|
20.9
|
|
|
|
|
|
|
|
Six Months Ended
|
||||||||||||||||
|
June 2017
|
|
June 2016
|
||||||||||||||
|
Volume
|
|
|
|
Volume
|
|
|
||||||||||
Destination
|
MMBF
|
%
|
|
Price
|
|
MMBF
|
%
|
|
Price
|
||||||||
Domestic mills
|
29.8
|
|
59
|
%
|
|
$
|
655
|
|
|
23.2
|
|
63
|
%
|
|
$
|
632
|
|
Export brokers
|
11.1
|
|
22
|
%
|
|
698
|
|
|
6.1
|
|
17
|
%
|
|
636
|
|
||
Hardwood
|
1.4
|
|
3
|
%
|
|
660
|
|
|
1.3
|
|
4
|
%
|
|
529
|
|
||
Pulpwood
|
8.3
|
|
16
|
%
|
|
293
|
|
|
6.0
|
|
16
|
%
|
|
300
|
|
||
Subtotal
|
50.6
|
|
100
|
%
|
|
605
|
|
|
36.6
|
|
100
|
%
|
|
575
|
|
||
Timber deed sale
|
2.4
|
|
|
|
|
292
|
|
|
—
|
|
|
|
—
|
|
|||
Total
|
53.0
|
|
|
|
|
|
|
|
36.6
|
|
|
|
|
|
(in thousands) Quarter Ended
|
|
Harvest, Haul and Tax
|
|
Depletion
|
|
Other
|
|
Total Fee Timber Cost of Sales
|
|
Harvest Volume (MMBF)
|
|
Timber Deed Sale Volume (MMBF)
|
||||||||||
Partnership
|
|
$
|
2,428
|
|
|
$
|
908
|
|
|
$
|
—
|
|
|
$
|
3,336
|
|
|
12.5
|
|
|
—
|
|
Funds
|
|
2,535
|
|
|
2,655
|
|
|
—
|
|
|
5,190
|
|
|
10.8
|
|
|
2.1
|
|
||||
Total June 2017
|
|
$
|
4,963
|
|
|
$
|
3,563
|
|
|
$
|
—
|
|
|
$
|
8,526
|
|
|
23.3
|
|
|
2.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Partnership
|
|
$
|
2,520
|
|
|
$
|
1,022
|
|
|
$
|
—
|
|
|
$
|
3,542
|
|
|
14.1
|
|
|
—
|
|
Funds
|
|
3,193
|
|
|
3,900
|
|
|
—
|
|
|
7,093
|
|
|
13.2
|
|
|
0.3
|
|
||||
Total March 2017
|
|
$
|
5,713
|
|
|
$
|
4,922
|
|
|
$
|
—
|
|
|
$
|
10,635
|
|
|
27.3
|
|
|
0.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Partnership
|
|
$
|
3,188
|
|
|
$
|
586
|
|
|
$
|
15
|
|
|
$
|
3,789
|
|
|
13.7
|
|
|
—
|
|
Funds
|
|
1,921
|
|
|
1,277
|
|
|
—
|
|
|
3,198
|
|
|
7.2
|
|
|
—
|
|
||||
Total June 2016
|
|
$
|
5,109
|
|
|
$
|
1,863
|
|
|
$
|
15
|
|
|
$
|
6,987
|
|
|
20.9
|
|
|
—
|
|
(Amounts per MBF) Quarter Ended
|
|
Harvest, Haul and Tax *
|
|
Depletion *
|
||||
Partnership
|
|
$
|
194
|
|
|
$
|
72
|
|
Funds
|
|
235
|
|
|
206
|
|
||
Total June 2017
|
|
$
|
213
|
|
|
$
|
140
|
|
|
|
|
|
|
||||
Partnership
|
|
$
|
179
|
|
|
$
|
72
|
|
Funds
|
|
242
|
|
|
289
|
|
||
Total March 2017
|
|
$
|
209
|
|
|
$
|
178
|
|
|
|
|
|
|
||||
Partnership
|
|
$
|
233
|
|
|
$
|
43
|
|
Funds
|
|
267
|
|
|
177
|
|
||
Total June 2016
|
|
$
|
244
|
|
|
$
|
89
|
|
*
|
Timber deed sale volumes are excluded in the per MBF computation for harvest, haul and tax costs but included in the per MBF computation for depletion.
|
•
|
The Funds’ share of relative harvest volume (including timber deed sales) increased to 51% in Q2 2017 from 34% in Q2 2016. Depletion rates are higher for the Funds’ tree farms because they were purchased more recently than the Partnership’s tree farms and thus have a higher cost basis.
|
•
|
The mix of harvest volume from the Funds’ tree farms shifted to tree farms with higher depletion rates.
|
•
|
The Partnership’s pooled depletion rate increased 70% due to the Q3 2016 purchase of the Carbon River tree farm. Prior to that acquisition, the Partnership’s pooled depletion rate was based on tree farms that were acquired many years ago at much lower costs relative to current timberland values.
|
(in thousands) Six Months Ended
|
|
Harvest, Haul and Tax
|
|
Depletion
|
|
Other
|
|
Total Fee Timber Cost of Sales
|
|
Harvest Volume (MMBF)
|
|
Timber Deed Sale Volume (MMBF)
|
||||||||||
Partnership
|
|
$
|
4,948
|
|
|
$
|
1,930
|
|
|
$
|
—
|
|
|
$
|
6,878
|
|
|
26.6
|
|
|
—
|
|
Funds
|
|
5,728
|
|
|
6,555
|
|
|
—
|
|
|
12,283
|
|
|
24.0
|
|
|
2.4
|
|
||||
Total June 2017
|
|
$
|
10,676
|
|
|
$
|
8,485
|
|
|
$
|
—
|
|
|
$
|
19,161
|
|
|
50.6
|
|
|
2.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Partnership
|
|
$
|
4,511
|
|
|
$
|
857
|
|
|
$
|
29
|
|
|
$
|
5,397
|
|
|
20
|
|
|
—
|
|
Funds
|
|
4,147
|
|
|
3,336
|
|
|
—
|
|
|
7,483
|
|
|
16.6
|
|
|
—
|
|
||||
Total June 2016
|
|
$
|
8,658
|
|
|
$
|
4,193
|
|
|
$
|
29
|
|
|
$
|
12,880
|
|
|
36.6
|
|
|
—
|
|
(Amounts per MBF) Six Months Ended
|
|
Harvest, Haul and Tax *
|
|
Depletion *
|
||||
Partnership
|
|
$
|
186
|
|
|
$
|
73
|
|
Funds
|
|
239
|
|
|
248
|
|
||
Total June 2017
|
|
$
|
211
|
|
|
$
|
160
|
|
|
|
|
|
|
||||
Partnership
|
|
$
|
226
|
|
|
$
|
43
|
|
Funds
|
|
250
|
|
|
201
|
|
||
Total June 2016
|
|
$
|
237
|
|
|
$
|
115
|
|
*
|
Timber deed sale volumes are excluded in the per MBF computation for harvest, haul and tax costs but included in the per MBF computation for depletion.
|
•
|
The Fund’s share of relative harvest volume (including timber deed sales) increased to 50% in 2017 from 45% in 2016.
|
•
|
The mix of harvest volume among the Funds’ tree farms shifted to tree farms with higher depletion rates.
|
•
|
The Partnership’s pooled depletion rate increased 69% due to the Q3 2016 purchase of the Carbon River tree farm.
|
(in thousands, except invested
|
|
Quarter Ended
|
||||||
capital, volume and acre data)
|
|
Jun-17
|
|
Jun-16
|
||||
Revenue internal
|
|
$
|
817
|
|
|
$
|
788
|
|
Intersegment eliminations
|
|
(817
|
)
|
|
(788
|
)
|
||
Revenue external
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
||||
Operating income (loss) internal
|
|
$
|
(35
|
)
|
|
$
|
123
|
|
Intersegment eliminations
|
|
(716
|
)
|
|
(726
|
)
|
||
Operating loss external
|
|
$
|
(751
|
)
|
|
$
|
(603
|
)
|
|
|
|
|
|
||||
Invested capital (in millions)
|
|
$
|
240
|
|
|
$
|
258
|
|
Acres owned by Funds
|
|
88,000
|
|
|
94,000
|
|
||
Harvest volume - Funds (MMBF), including timber deed sales
|
|
12.9
|
|
|
7.2
|
|
(in thousands, except invested
|
|
Six Months Ended
|
||||||
capital, volume and acre data)
|
|
Jun-17
|
|
Jun-16
|
||||
Revenue internal
|
|
$
|
1,665
|
|
|
$
|
1,611
|
|
Intersegment eliminations
|
|
(1,665
|
)
|
|
(1,603
|
)
|
||
Revenue external
|
|
$
|
—
|
|
|
$
|
8
|
|
|
|
|
|
|
||||
Operating income internal
|
|
$
|
(260
|
)
|
|
$
|
205
|
|
Intersegment eliminations
|
|
(1,457
|
)
|
|
(1,474
|
)
|
||
Operating loss external
|
|
$
|
(1,717
|
)
|
|
$
|
(1,269
|
)
|
|
|
|
|
|
||||
Invested capital (in millions)
|
|
$
|
240
|
|
|
$
|
258
|
|
Acres owned by Funds
|
|
88,000
|
|
|
94,000
|
|
||
Harvest volume - Funds (MMBF), including timber deed sales
|
|
26.4
|
|
|
16.6
|
|
•
|
Residential, commercial, and business park plat land sales represent land sold after development rights have been obtained and are generally sold with prescribed infrastructure improvements.
|
•
|
Rural residential lot sales that generally require some capital improvements such as zoning, road building, or utility access improvements prior to completing the sale.
|
•
|
The sale of unimproved land, which generally consists of larger acreage sales rather than single lot sales, is normally completed with very little capital investment prior to sale.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(in thousands)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Interest income
|
$
|
1
|
|
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
6
|
|
Interest expense
|
(1,252
|
)
|
|
(933
|
)
|
|
(2,380
|
)
|
|
(1,744
|
)
|
||||
Capitalized interest
|
134
|
|
|
183
|
|
|
250
|
|
|
333
|
|
||||
Interest expense, net
|
$
|
(1,117
|
)
|
|
$
|
(747
|
)
|
|
$
|
(2,127
|
)
|
|
$
|
(1,405
|
)
|
|
Six Months Ended June 30,
|
||||||||||
(in thousands)
|
2017
|
|
Change
|
|
2016
|
||||||
Cash provided by (used in) operating activities
|
$
|
5,620
|
|
|
$
|
9,917
|
|
|
$
|
(4,297
|
)
|
|
|
|
|
|
|
||||||
Investing activities
|
|
|
|
|
|
||||||
Reforestation and roads
|
(1,109
|
)
|
|
(191
|
)
|
|
(918
|
)
|
|||
Capital expenditures
|
(92
|
)
|
|
48
|
|
|
(140
|
)
|
|||
Proceeds from sale of property and equipment
|
30
|
|
|
30
|
|
|
—
|
|
|||
Deposit for acquisition of timberland - Partnership
|
—
|
|
|
1,581
|
|
|
(1,581
|
)
|
|||
Acquisition of timberland - Partnership
|
(4,951
|
)
|
|
(3,882
|
)
|
|
(1,069
|
)
|
|||
Proceeds from sale of timberland - Funds
|
26,444
|
|
|
25,721
|
|
|
723
|
|
|||
Cash provided by (used in) investing activities
|
20,322
|
|
|
23,307
|
|
|
(2,985
|
)
|
|||
Financing activities
|
|
|
|
|
|
|
|
|
|||
Line of credit borrowings
|
18,507
|
|
|
9,257
|
|
|
9,250
|
|
|||
Line of credit repayments
|
(8,000
|
)
|
|
(8,000
|
)
|
|
—
|
|
|||
Repayment of long-term debt
|
(5,059
|
)
|
|
(5,002
|
)
|
|
(57
|
)
|
|||
Debt issuances costs
|
(77
|
)
|
|
(77
|
)
|
|
—
|
|
|||
Unit repurchase
|
(57
|
)
|
|
(57
|
)
|
|
—
|
|
|||
Payroll taxes paid upon unit net settlements
|
(94
|
)
|
|
58
|
|
|
(152
|
)
|
|||
Cash distributions to unitholders
|
(6,115
|
)
|
|
(27
|
)
|
|
(6,088
|
)
|
|||
Cash distributions to fund investors, net of distributions to Partnership
|
(23,937
|
)
|
|
(21,364
|
)
|
|
(2,573
|
)
|
|||
Capital call - ORM Timber Funds, net of Partnership contribution
|
825
|
|
|
825
|
|
|
—
|
|
|||
Cash provided by (used in) financing activities
|
(24,007
|
)
|
|
(24,387
|
)
|
|
380
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
$
|
1,935
|
|
|
$
|
8,837
|
|
|
$
|
(6,902
|
)
|
|
YTD
|
|
Remainder of Year
|
|
Total
|
||||||
in millions
|
|
|
|
|
|
||||||
Harbor Hill project development
|
$
|
2.7
|
|
|
$
|
2.9
|
|
|
$
|
5.6
|
|
Port Gamble wastewater treatment plant
|
1.4
|
|
|
0.2
|
|
|
1.6
|
|
|||
Reforestation and roads
|
1.1
|
|
|
1.4
|
|
|
2.5
|
|
|||
Other
|
0.3
|
|
|
1.2
|
|
|
1.5
|
|
|||
|
$
|
5.5
|
|
|
$
|
5.7
|
|
|
$
|
11.2
|
|
Period
|
(a) Total Number of Units Purchased
|
(b) Average Price Paid per Unit
|
(c) Total Number of Units Purchased as Part of Publicly Announced Plans or Programs (1)
|
(d) Maximum Approximate Dollar Value of Units that May Yet Be Purchased Under the Plans or Programs
|
|
|
|
|
|
June 2017
|
744
|
$76.52
|
744
|
$1,143,595
|
(a)
|
There have been no material changes in the procedures for shareholders of the Partnership’s general partner to nominate directors to the board.
|
(b)
|
On August 3, 2017, the board of directors of the registrant’s managing general partner adopted an Amended and Restated Agreement of Limited Partnership, the form of which is filed herewith as Exhibit 3.1. This agreement is intended to subsume into a single document the various amendments that have been adopted from time to time since the Partnership’s formation in 1985. The sole purpose of this action was to provide for a more convenient and comprehensive form of agreement to govern the Partnership’s operations, management and corporate structure. Management does not believe the Amended and Restated Agreement of Limited Partnership effects any material change to the registrant’s operations, corporate structure or management, and the revisions were completed by the managing general partner without a vote of the limited partners as permitted under the existing partnership agreement.
|
3.1
|
Amended and Restated Limited Partnership Agreement of Pope Resources, A Delaware Limited Partnership dated August 3, 2017.
|
|
|
10.1
|
Amended and Restated Note between Pope Resources and Northwest Farm Credit Services, FLCA dated June 27, 2017.
|
|
|
31.1
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a).
|
|
|
31.2
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a).
|
|
|
32.1
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(b) and 18 U.S.C. Section 1350 (furnished with this report in accordance with SEC Rel. No. 33-8238).
|
|
|
32.2
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(b) and 18 U.S.C. Section 1350 (furnished with this report in accordance with SEC Rel. No. 33-8238).
|
101.INS
|
XBRL Instance Document
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
POPE RESOURCES,
|
|
|
A Delaware Limited Partnership
|
|
|
|
|
|
By:
|
POPE MGP, Inc.
|
|
|
Managing General Partner
|
|
|
|
|
|
|
|
|
By:
/s/ Thomas M. Ringo
|
|
|
Thomas M. Ringo
|
|
|
President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
|
By:
/s/ John D. Lamb
|
|
|
John D. Lamb
|
|
|
Vice President and Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
|
|
By:
/s/ Sean M. Tallarico
|
|
|
Sean M. Tallarico
|
|
|
Controller
|
|
|
(Principal Accounting Officer)
|
1 Year Pope Resources Chart |
1 Month Pope Resources Chart |
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