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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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2018
|
|
2017
|
||||
ASSETS
|
|
|
|
||||
Current assets
|
|
|
|
||||
Partnership cash
|
$
|
937
|
|
|
$
|
1,788
|
|
ORM Timber Funds cash
|
3,320
|
|
|
1,636
|
|
||
Cash
|
4,257
|
|
|
3,424
|
|
||
Restricted cash
|
1,026
|
|
|
1,860
|
|
||
Total cash and restricted cash
|
5,283
|
|
|
5,284
|
|
||
Accounts receivable, net
|
3,879
|
|
|
6,427
|
|
||
Contract assets
|
6,514
|
|
|
—
|
|
||
Land held for sale
|
10,734
|
|
|
5,728
|
|
||
Prepaid expenses and other current assets
|
1,401
|
|
|
591
|
|
||
Total current assets
|
27,811
|
|
|
18,030
|
|
||
Properties and equipment, at cost
|
|
|
|
|
|
||
Timber and roads
|
362,311
|
|
|
267,662
|
|
||
Timberland
|
69,115
|
|
|
55,056
|
|
||
Land held for development
|
15,470
|
|
|
19,311
|
|
||
Buildings and equipment, net of accumulated depreciation (2018 - $7,989; 2017 - $7,833)
|
5,521
|
|
|
5,306
|
|
||
Total property and equipment, at cost
|
452,417
|
|
|
347,335
|
|
||
Other assets
|
8,878
|
|
|
15,308
|
|
||
Total assets
|
$
|
489,106
|
|
|
$
|
380,673
|
|
|
|
|
|
||||
LIABILITIES, PARTNERS’ CAPITAL AND NONCONTROLLING INTERESTS
|
|
|
|
|
|
||
Current liabilities
|
|
|
|
|
|
||
Accounts payable
|
$
|
1,313
|
|
|
$
|
2,430
|
|
Accrued liabilities
|
3,120
|
|
|
4,451
|
|
||
Current portion of long-term debt - Partnership
|
126
|
|
|
123
|
|
||
Deferred revenue
|
451
|
|
|
197
|
|
||
Current portion of environmental remediation liability
|
2,394
|
|
|
2,160
|
|
||
Other current liabilities
|
1,078
|
|
|
401
|
|
||
Total current liabilities
|
8,482
|
|
|
9,762
|
|
||
Long-term debt, net of unamortized debt issuance costs and current portion - Partnership
|
89,796
|
|
|
70,037
|
|
||
Long-term debt, net of unamortized debt issuance costs - Funds
|
57,302
|
|
|
57,291
|
|
||
Environmental remediation and other long-term liabilities
|
4,712
|
|
|
2,957
|
|
||
Partners’ capital and noncontrolling interests
|
|
|
|
|
|
||
General partners' capital (units issued and outstanding 2018 - 60; 2017 - 60)
|
1,034
|
|
|
1,028
|
|
||
Limited partners' capital (units issued and outstanding 2018 - 4,258; 2017 - 4,251)
|
63,414
|
|
|
63,519
|
|
||
Noncontrolling interests
|
264,366
|
|
|
176,079
|
|
||
Total partners’ capital and noncontrolling interests
|
328,814
|
|
|
240,626
|
|
||
Total liabilities, partners’ capital and noncontrolling interests
|
$
|
489,106
|
|
|
$
|
380,673
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenue
|
$
|
27,912
|
|
|
$
|
15,891
|
|
|
$
|
52,899
|
|
|
$
|
33,236
|
|
Cost of sales
|
(14,575
|
)
|
|
(8,979
|
)
|
|
(26,875
|
)
|
|
(20,180
|
)
|
||||
Operating expenses
|
(5,225
|
)
|
|
(4,514
|
)
|
|
(9,334
|
)
|
|
(8,776
|
)
|
||||
Environmental remediation expense
|
(2,900
|
)
|
|
—
|
|
|
(2,900
|
)
|
|
—
|
|
||||
General and administrative expenses
|
(1,403
|
)
|
|
(1,405
|
)
|
|
(3,024
|
)
|
|
(3,106
|
)
|
||||
Gain on sale of timberland
|
—
|
|
|
—
|
|
|
—
|
|
|
12,503
|
|
||||
Income from operations
|
3,809
|
|
|
993
|
|
|
10,766
|
|
|
13,677
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Interest expense, net
|
(1,248
|
)
|
|
(1,117
|
)
|
|
(2,392
|
)
|
|
(2,127
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Income (loss) before income taxes
|
2,561
|
|
|
(124
|
)
|
|
8,374
|
|
|
11,550
|
|
||||
Income tax expense
|
(29
|
)
|
|
(3
|
)
|
|
(127
|
)
|
|
(59
|
)
|
||||
Net and comprehensive income (loss)
|
2,532
|
|
|
(127
|
)
|
|
8,247
|
|
|
11,491
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net and comprehensive (income) loss attributable to noncontrolling interests - ORM Timber Funds
|
(2,391
|
)
|
|
285
|
|
|
(2,388
|
)
|
|
(7,963
|
)
|
||||
Net and comprehensive loss attributable to noncontrolling interests - Real Estate
|
58
|
|
|
—
|
|
|
58
|
|
|
—
|
|
||||
Net and comprehensive income attributable to unitholders
|
$
|
199
|
|
|
$
|
158
|
|
|
$
|
5,917
|
|
|
$
|
3,528
|
|
|
|
|
|
|
|
|
|
||||||||
Allocable to general partners
|
$
|
3
|
|
|
$
|
2
|
|
|
$
|
82
|
|
|
$
|
49
|
|
Allocable to limited partners
|
196
|
|
|
156
|
|
|
5,835
|
|
|
3,479
|
|
||||
Net and comprehensive income attributable to unitholders
|
$
|
199
|
|
|
$
|
158
|
|
|
$
|
5,917
|
|
|
$
|
3,528
|
|
|
|
|
|
|
|
|
|
||||||||
Basic and diluted earnings per unit attributable to unitholders
|
$
|
0.04
|
|
|
$
|
0.03
|
|
|
$
|
1.35
|
|
|
$
|
0.80
|
|
|
|
|
|
|
|
|
|
||||||||
Basic and diluted weighted average units outstanding
|
4,320
|
|
|
4,327
|
|
|
4,320
|
|
|
4,326
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Distributions per unit
|
$
|
0.70
|
|
|
$
|
0.70
|
|
|
$
|
1.40
|
|
|
$
|
1.40
|
|
|
|
|
Attributable to Pope Resources
|
|
|
|
|
|||||||||||
|
Units
|
|
General Partners
|
|
Limited Partners
|
|
Noncontrolling Interests
|
|
Total
|
|||||||||
December 31, 2017
|
4,311,065
|
|
|
$
|
1,028
|
|
|
$
|
63,519
|
|
|
$
|
176,079
|
|
|
$
|
240,626
|
|
Net income
|
—
|
|
|
82
|
|
|
5,835
|
|
|
2,330
|
|
|
8,247
|
|
||||
Cash distributions
|
—
|
|
|
(85
|
)
|
|
(6,018
|
)
|
|
(6,323
|
)
|
|
(12,426
|
)
|
||||
Capital call
|
—
|
|
|
—
|
|
|
—
|
|
|
92,280
|
|
|
92,280
|
|
||||
Equity-based compensation
|
15,781
|
|
|
10
|
|
|
712
|
|
|
—
|
|
|
722
|
|
||||
Units issued under distribution reinvestment plan
|
1,687
|
|
|
—
|
|
|
120
|
|
|
—
|
|
|
120
|
|
||||
Unit repurchases
|
(9,116
|
)
|
|
—
|
|
|
(653
|
)
|
|
—
|
|
|
(653
|
)
|
||||
Payroll taxes paid on unit net settlements
|
(1,466
|
)
|
|
(1
|
)
|
|
(101
|
)
|
|
—
|
|
|
(102
|
)
|
||||
June 30, 2018
|
4,317,951
|
|
|
$
|
1,034
|
|
|
$
|
63,414
|
|
|
$
|
264,366
|
|
|
$
|
328,814
|
|
|
2018
|
|
2017
|
||||
Net income
|
$
|
8,247
|
|
|
$
|
11,491
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
|
|
|
|
|
||
Depletion
|
14,141
|
|
|
8,485
|
|
||
Equity-based compensation
|
722
|
|
|
784
|
|
||
Depreciation and amortization
|
285
|
|
|
252
|
|
||
Deferred taxes and other
|
40
|
|
|
44
|
|
||
Cost of land sold
|
75
|
|
|
301
|
|
||
Gain on sale of timberland - Funds
|
—
|
|
|
(12,503
|
)
|
||
Gain on disposal of property and equipment
|
(4
|
)
|
|
(3
|
)
|
||
Cash flows from changes in operating accounts
|
|
|
|
|
|
||
Accounts receivable, net
|
2,547
|
|
|
936
|
|
||
Prepaid expenses, contract assets, and other assets
|
(6,966
|
)
|
|
5,356
|
|
||
Real estate project expenditures
|
(1,232
|
)
|
|
(4,294
|
)
|
||
Accounts payable and accrued liabilities
|
(2,447
|
)
|
|
(1,031
|
)
|
||
Deferred revenue
|
254
|
|
|
(47
|
)
|
||
Environmental remediation accruals
|
2,900
|
|
|
—
|
|
||
Environmental remediation payments
|
(885
|
)
|
|
(4,280
|
)
|
||
Other current and long-term liabilities
|
652
|
|
|
129
|
|
||
Net cash provided by operating activities
|
18,329
|
|
|
5,620
|
|
||
|
|
|
|
||||
Cash flows from investing activities
|
|
|
|
|
|
||
Reforestation and roads
|
(1,861
|
)
|
|
(1,109
|
)
|
||
Capital expenditures
|
(462
|
)
|
|
(92
|
)
|
||
Proceeds from sale of property and equipment
|
4
|
|
|
30
|
|
||
Investment in unconsolidated real estate joint venture
|
(250
|
)
|
|
—
|
|
||
Acquisitions of timberland - Partnership
|
(6,355
|
)
|
|
(4,951
|
)
|
||
Acquisitions of timberland - Funds
|
(108,364
|
)
|
|
—
|
|
||
Proceeds from sale of timberland - Funds
|
—
|
|
|
26,444
|
|
||
Net cash provided by (used in) investing activities
|
(117,288
|
)
|
|
20,322
|
|
||
|
|
|
|
||||
Cash flows from financing activities
|
|
|
|
|
|
||
Line of credit borrowings
|
24,300
|
|
|
18,507
|
|
||
Line of credit repayments
|
(4,500
|
)
|
|
(8,000
|
)
|
||
Repayment of long-term debt
|
(61
|
)
|
|
(5,059
|
)
|
||
Debt issuance costs
|
—
|
|
|
(77
|
)
|
||
Proceeds from unit issuances - distribution reinvestment plan
|
120
|
|
|
—
|
|
||
Unit repurchases
|
(653
|
)
|
|
(57
|
)
|
||
Payroll taxes paid on unit net settlements
|
(102
|
)
|
|
(94
|
)
|
||
Cash distributions to unitholders
|
(6,103
|
)
|
|
(6,115
|
)
|
||
Cash distributions - ORM Timber Funds, net of distributions to Partnership
|
(6,323
|
)
|
|
(23,937
|
)
|
||
Capital call - ORM Timber Funds, net of Partnership contribution
|
92,280
|
|
|
825
|
|
||
Net cash provided by (used in) financing activities
|
98,958
|
|
|
(24,007
|
)
|
||
|
|
|
|
||||
Net increase in cash and restricted cash
|
(1
|
)
|
|
1,935
|
|
||
Cash and restricted cash at beginning of period
|
5,284
|
|
|
2,937
|
|
||
Cash and restricted cash at end of period
|
$
|
5,283
|
|
|
$
|
4,872
|
|
1.
|
The condensed consolidated balance sheets as of
June 30, 2018
, and
December 31, 2017
, and the related condensed consolidated statements of comprehensive income (loss) for the three- and
six-month periods
, and partners’ capital and cash flows for the
six-month periods
, ended
June 30, 2018
, and
2017
, 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, 2017
, is derived from the Partnership’s audited consolidated financial statements and notes thereto for the year ended
December 31, 2017
, 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, 2018
.
|
2.
|
The financial statements in the Partnership’s
2017
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.
|
Effective January 1, 2018, the Partnership adopted Topic 606,
Revenue from Contracts with Customers
. For revenue from the Partnership Timber and Funds Timber segments, which consists primarily of the sale of logs, there were no changes to the timing or amount of revenue recognized because contracts are legally enforceable, the transaction price is fixed, and performance is completed and control transfers at a point in time, typically when risk of loss and title passes to the customer. Similarly, no changes were identified to the timing or amount of revenue recognized from certain components of other revenue in these segments, including commercial thinning, royalties from gravel mines and quarries, and land use permits. For timber deed sales, the timing of revenue recognition was accelerated under the new standard to the effective date of the contract, whereas under the previous revenue recognition guidance the revenue was generally recognized when the timber was harvested by the customer. Under Topic 606, revenue recognized from timber deed sales, in the quarter and six months ended June 30, 2018, was
$7.5 million
greater than it would have been under the previous revenue recognition accounting standards. For the Real Estate segment, this new standard may result in accelerating the recognition of revenue for performance obligations that are satisfied over time, which generally consist of construction and landscaping activity in common areas completed after transaction closing. The Partnership adopted this standard using the cumulative effect transition method applied to uncompleted contracts as of the date of adoption. The Partnership, however, had no uncompleted contracts at the date of adoption. Accordingly, the adoption of this standard did not have a cumulative effect on the Partnership’s consolidated financial statements.
|
Contract assets, January 1, 2018
|
$
|
—
|
|
Revenue recognized from the satisfaction of performance obligations
|
8,865
|
|
|
Transferred to receivables from contract assets
|
(2,351
|
)
|
|
Contract assets, June 30, 2018
|
$
|
6,514
|
|
(in thousands)
|
Quarter ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Partnership Timber
|
|
|
|
|
|
|
|
||||||||
Log sale revenue
|
$
|
5,039
|
|
|
$
|
7,710
|
|
|
$
|
19,674
|
|
|
$
|
16,387
|
|
Other revenue
|
531
|
|
|
459
|
|
|
1,034
|
|
|
888
|
|
||||
Total revenue
|
$
|
5,570
|
|
|
$
|
8,169
|
|
|
$
|
20,708
|
|
|
$
|
17,275
|
|
|
|
|
|
|
|
|
|
||||||||
Funds Timber
|
|
|
|
|
|
|
|
||||||||
Log sale revenue
|
$
|
8,494
|
|
|
$
|
6,630
|
|
|
$
|
18,003
|
|
|
$
|
14,232
|
|
Timber deed sale revenue
|
8,865
|
|
|
638
|
|
|
8,865
|
|
|
710
|
|
||||
Other revenue
|
558
|
|
|
5
|
|
|
590
|
|
|
37
|
|
||||
Total revenue
|
$
|
17,917
|
|
|
$
|
7,273
|
|
|
$
|
27,458
|
|
|
$
|
14,979
|
|
|
Quarter ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Development rights (CE)
|
$
|
3,730
|
|
|
$
|
—
|
|
|
$
|
3,730
|
|
|
$
|
—
|
|
Residential land sales
|
151
|
|
|
170
|
|
|
151
|
|
|
455
|
|
||||
Unimproved land
|
125
|
|
|
—
|
|
|
125
|
|
|
—
|
|
||||
Total land sales
|
4,006
|
|
|
170
|
|
|
4,006
|
|
|
455
|
|
||||
Rentals and other
|
419
|
|
|
279
|
|
|
727
|
|
|
527
|
|
||||
Total revenue
|
$
|
4,425
|
|
|
$
|
449
|
|
|
$
|
4,733
|
|
|
$
|
982
|
|
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 raising 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 the end of its investment period, which will occur on the earlier of placement of all committed capital or December 31, 2019, subject to certain extension provisions.
|
(in thousands)
|
June 30, 2018
|
|
December 31, 2017
|
||||
Assets:
|
|||||||
Cash
|
$
|
3,320
|
|
|
$
|
1,636
|
|
Other current assets
|
8,595
|
|
|
2,481
|
|
||
Total current assets
|
11,915
|
|
|
4,117
|
|
||
Properties and equipment, net of accumulated depreciation
|
337,526
|
|
|
235,046
|
|
||
Other long-term assets
|
—
|
|
|
5,683
|
|
||
Total assets
|
$
|
349,441
|
|
|
$
|
244,846
|
|
Liabilities and equity:
|
|
|
|
|
|
||
Current liabilities
|
$
|
3,119
|
|
|
$
|
2,862
|
|
Long-term debt, net of unamortized debt issuance costs
|
57,302
|
|
|
57,291
|
|
||
Funds’ equity
|
289,020
|
|
|
184,693
|
|
||
Total liabilities and equity
|
$
|
349,441
|
|
|
$
|
244,846
|
|
6.
|
Other assets consisted of the following at
June 30, 2018
and
December 31, 2017
:
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
|
|
|
|
||||
Deferred tax assets, net
|
$
|
429
|
|
|
$
|
465
|
|
Cash held by like-kind exchange intermediaries
|
—
|
|
|
598
|
|
||
Deposits for acquisitions of timberland
|
—
|
|
|
5,688
|
|
||
Investment in Real Estate joint venture entity
|
6,142
|
|
|
5,895
|
|
||
Advances to Real Estate joint venture entity
|
506
|
|
|
37
|
|
||
Note receivable
|
1,801
|
|
|
2,625
|
|
||
Total
|
$
|
8,878
|
|
|
$
|
15,308
|
|
7.
|
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.
|
Quarter ended June 30, (in thousands)
|
Partnership Timber
|
|
Funds Timber
|
|
Timberland Investment Management
|
|
Real Estate
|
|
Other
|
|
Consolidated
|
|||||||||||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Revenue - internal
|
$
|
5,693
|
|
|
$
|
17,917
|
|
|
$
|
1,140
|
|
|
$
|
4,542
|
|
|
$
|
—
|
|
|
$
|
29,292
|
|
|
Eliminations
|
(123
|
)
|
|
—
|
|
|
(1,140
|
)
|
|
(117
|
)
|
|
—
|
|
|
(1,380
|
)
|
|||||||
Revenue - external
|
5,570
|
|
|
17,917
|
|
|
—
|
|
|
4,425
|
|
|
—
|
|
|
27,912
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Cost of sales
|
(1,994
|
)
|
|
(11,870
|
)
|
|
—
|
|
|
(711
|
)
|
|
—
|
|
|
(14,575
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Operating, general and administrative expenses - internal
|
(1,837
|
)
|
|
(2,525
|
)
|
|
(1,055
|
)
|
|
(1,163
|
)
|
|
(1,428
|
)
|
|
(8,008
|
)
|
|||||||
Eliminations
|
42
|
|
|
1,140
|
|
|
139
|
|
|
34
|
|
|
25
|
|
|
1,380
|
|
|||||||
Operating, general and administrative expenses - external
|
(1,795
|
)
|
|
(1,385
|
)
|
|
(916
|
)
|
|
(1,129
|
)
|
|
(1,403
|
)
|
|
(6,628
|
)
|
|||||||
Environmental remediation
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,900
|
)
|
|
—
|
|
|
(2,900
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Income (loss) from operations - internal
|
1,862
|
|
|
3,522
|
|
|
85
|
|
|
(232
|
)
|
|
(1,428
|
)
|
|
3,809
|
|
|||||||
Eliminations
|
(81
|
)
|
|
1,140
|
|
|
(1,001
|
)
|
|
(83
|
)
|
|
25
|
|
|
—
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Income (loss) from operations - external
|
$
|
1,781
|
|
|
$
|
4,662
|
|
|
$
|
(916
|
)
|
|
$
|
(315
|
)
|
|
$
|
(1,403
|
)
|
|
$
|
3,809
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Income (loss) from operations - internal
|
$
|
1,862
|
|
|
$
|
3,522
|
|
|
$
|
85
|
|
|
$
|
(232
|
)
|
|
$
|
(1,428
|
)
|
|
$
|
3,809
|
|
|
Depletion, depreciation, and amortization
|
511
|
|
|
8,947
|
|
|
17
|
|
|
68
|
|
|
11
|
|
|
9,554
|
|
|||||||
Environmental remediation
|
—
|
|
|
—
|
|
|
—
|
|
|
2,900
|
|
|
—
|
|
|
2,900
|
|
|||||||
Adjusted EBITDDA
|
$
|
2,373
|
|
|
$
|
12,469
|
|
|
$
|
102
|
|
|
$
|
2,736
|
|
|
$
|
(1,417
|
)
|
|
$
|
16,263
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Revenue - internal
|
$
|
8,253
|
|
|
$
|
7,273
|
|
|
$
|
817
|
|
|
$
|
549
|
|
|
$
|
—
|
|
|
$
|
16,892
|
|
|
Eliminations
|
(84
|
)
|
|
—
|
|
|
(817
|
)
|
|
(100
|
)
|
|
—
|
|
|
(1,001
|
)
|
|||||||
Revenue - external
|
8,169
|
|
|
7,273
|
|
|
—
|
|
|
449
|
|
|
—
|
|
|
15,891
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Cost of sales
|
(3,336
|
)
|
|
(5,190
|
)
|
|
—
|
|
|
(453
|
)
|
|
—
|
|
|
(8,979
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Operating, general and administrative expenses - internal
|
(1,466
|
)
|
|
(1,662
|
)
|
|
(852
|
)
|
|
(1,511
|
)
|
|
(1,429
|
)
|
|
(6,920
|
)
|
|||||||
Eliminations
|
40
|
|
|
817
|
|
|
101
|
|
|
19
|
|
|
24
|
|
|
1,001
|
|
|||||||
Operating, general and administrative expenses -external
|
(1,426
|
)
|
|
(845
|
)
|
|
(751
|
)
|
|
(1,492
|
)
|
|
(1,405
|
)
|
|
(5,919
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Income (loss) from operations - internal
|
3,451
|
|
|
421
|
|
|
(35
|
)
|
|
(1,415
|
)
|
|
(1,429
|
)
|
|
993
|
|
|||||||
Eliminations
|
(44
|
)
|
|
817
|
|
|
(716
|
)
|
|
(81
|
)
|
|
24
|
|
|
—
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Income (loss) from operations - external
|
$
|
3,407
|
|
|
$
|
1,238
|
|
|
$
|
(751
|
)
|
|
$
|
(1,496
|
)
|
|
$
|
(1,405
|
)
|
|
$
|
993
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Income (loss) from operations - internal
|
$
|
3,451
|
|
|
$
|
421
|
|
|
$
|
(35
|
)
|
|
$
|
(1,415
|
)
|
|
$
|
(1,429
|
)
|
|
$
|
993
|
|
|
Depletion, depreciation, and amortization
|
942
|
|
|
2,655
|
|
|
8
|
|
|
70
|
|
|
13
|
|
|
3,688
|
|
|||||||
Adjusted EBITDDA
|
$
|
4,393
|
|
|
$
|
3,076
|
|
|
$
|
(27
|
)
|
|
$
|
(1,345
|
)
|
|
$
|
(1,416
|
)
|
|
$
|
4,681
|
|
Six Months Ended June 30, (in thousands)
|
Partnership Timber
|
|
Funds Timber
|
|
Timberland Investment Management
|
|
Real Estate
|
|
Other
|
|
Consolidated
|
|||||||||||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Revenue - internal
|
$
|
20,940
|
|
|
$
|
27,458
|
|
|
$
|
2,164
|
|
|
$
|
4,985
|
|
|
$
|
—
|
|
|
$
|
55,547
|
|
|
Eliminations
|
(232
|
)
|
|
—
|
|
|
(2,164
|
)
|
|
(252
|
)
|
|
—
|
|
|
(2,648
|
)
|
|||||||
Revenue - external
|
20,708
|
|
|
27,458
|
|
|
—
|
|
|
4,733
|
|
|
—
|
|
|
52,899
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Cost of sales
|
(7,020
|
)
|
|
(18,822
|
)
|
|
—
|
|
|
(1,033
|
)
|
|
—
|
|
|
(26,875
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Operating, general and administrative expenses - internal
|
(3,347
|
)
|
|
(4,331
|
)
|
|
(2,131
|
)
|
|
(2,118
|
)
|
|
(3,079
|
)
|
|
(15,006
|
)
|
|||||||
Eliminations
|
92
|
|
|
2,164
|
|
|
268
|
|
|
69
|
|
|
55
|
|
|
2,648
|
|
|||||||
Operating, general and administrative expenses - external
|
(3,255
|
)
|
|
(2,167
|
)
|
|
(1,863
|
)
|
|
(2,049
|
)
|
|
(3,024
|
)
|
|
(12,358
|
)
|
|||||||
Environmental remediation
|
|
|
|
|
—
|
|
|
(2,900
|
)
|
|
|
|
(2,900
|
)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Income (loss) from operations - internal
|
10,573
|
|
|
4,305
|
|
|
33
|
|
|
(1,066
|
)
|
|
(3,079
|
)
|
|
10,766
|
|
|||||||
Eliminations
|
(140
|
)
|
|
2,164
|
|
|
(1,896
|
)
|
|
(183
|
)
|
|
55
|
|
|
—
|
|
|||||||
Income (loss) from operations - external
|
$
|
10,433
|
|
|
$
|
6,469
|
|
|
$
|
(1,863
|
)
|
|
$
|
(1,249
|
)
|
|
$
|
(3,024
|
)
|
|
$
|
10,766
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Income (loss) from operations - internal
|
$
|
10,573
|
|
|
$
|
4,305
|
|
|
$
|
33
|
|
|
$
|
(1,066
|
)
|
|
$
|
(3,079
|
)
|
|
$
|
10,766
|
|
|
Depletion, depreciation, and amortization
|
1,836
|
|
|
12,369
|
|
|
27
|
|
|
136
|
|
|
25
|
|
|
14,393
|
|
|||||||
Environmental remediation
|
—
|
|
|
—
|
|
|
—
|
|
|
2,900
|
|
|
—
|
|
|
2,900
|
|
|||||||
Adjusted EBITDDA
|
$
|
12,409
|
|
|
$
|
16,674
|
|
|
$
|
60
|
|
|
$
|
1,970
|
|
|
$
|
(3,054
|
)
|
|
$
|
28,059
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Revenue - internal
|
$
|
17,444
|
|
|
$
|
14,979
|
|
|
$
|
1,665
|
|
|
$
|
1,216
|
|
|
$
|
—
|
|
|
$
|
35,304
|
|
|
Eliminations
|
(169
|
)
|
|
—
|
|
|
(1,665
|
)
|
|
(234
|
)
|
|
—
|
|
|
(2,068
|
)
|
|||||||
Revenue - external
|
17,275
|
|
|
14,979
|
|
|
—
|
|
|
982
|
|
|
—
|
|
|
33,236
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Cost of sales
|
(6,878
|
)
|
|
(12,283
|
)
|
|
—
|
|
|
(1,019
|
)
|
|
—
|
|
|
(20,180
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Operating, general and administrative expenses - internal
|
(2,710
|
)
|
|
(3,435
|
)
|
|
(1,925
|
)
|
|
(2,716
|
)
|
|
(3,164
|
)
|
|
(13,950
|
)
|
|||||||
Eliminations
|
97
|
|
|
1,665
|
|
|
208
|
|
|
40
|
|
|
58
|
|
|
2,068
|
|
|||||||
Operating, general and administrative expenses - external
|
(2,613
|
)
|
|
(1,770
|
)
|
|
(1,717
|
)
|
|
(2,676
|
)
|
|
(3,106
|
)
|
|
(11,882
|
)
|
|||||||
Gain on sale of timberland
|
—
|
|
|
12,503
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,503
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Income (loss) from operations - internal
|
7,856
|
|
|
11,764
|
|
|
(260
|
)
|
|
(2,519
|
)
|
|
(3,164
|
)
|
|
13,677
|
|
|||||||
Eliminations
|
(72
|
)
|
|
1,665
|
|
|
(1,457
|
)
|
|
(194
|
)
|
|
58
|
|
|
—
|
|
|||||||
Income (loss) from operations - external
|
$
|
7,784
|
|
|
$
|
13,429
|
|
|
$
|
(1,717
|
)
|
|
$
|
(2,713
|
)
|
|
$
|
(3,106
|
)
|
|
$
|
13,677
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Income (loss) from operations - internal
|
$
|
7,856
|
|
|
$
|
11,764
|
|
|
$
|
(260
|
)
|
|
$
|
(2,519
|
)
|
|
$
|
(3,164
|
)
|
|
$
|
13,677
|
|
|
Depletion, depreciation, and amortization
|
1,964
|
|
|
6,556
|
|
|
16
|
|
|
143
|
|
|
27
|
|
|
8,706
|
|
|||||||
(Gain) loss on sale of timberland
|
—
|
|
|
(12,503
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,503
|
)
|
|||||||
Adjusted EBITDDA
|
$
|
9,820
|
|
|
$
|
5,817
|
|
|
$
|
(244
|
)
|
|
$
|
(2,376
|
)
|
|
$
|
(3,137
|
)
|
|
$
|
9,880
|
|
8.
|
Basic and diluted earnings per unit are calculated by dividing net income 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)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net and comprehensive income attributable to Pope Resources’ unitholders
|
$
|
199
|
|
|
$
|
158
|
|
|
$
|
5,917
|
|
|
$
|
3,528
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-forfeitable distributions paid to unvested restricted unitholders
|
(27
|
)
|
|
(25
|
)
|
|
(53
|
)
|
|
(56
|
)
|
||||
Preferred share dividends - ORM Timber Funds
|
(8
|
)
|
|
(8
|
)
|
|
(16
|
)
|
|
(16
|
)
|
||||
Net and comprehensive income for calculation of earnings per unit
|
$
|
164
|
|
|
$
|
125
|
|
|
$
|
5,848
|
|
|
$
|
3,456
|
|
|
|
|
|
|
|
|
|
||||||||
Basic and diluted weighted average units outstanding
|
4,320
|
|
|
4,327
|
|
|
4,320
|
|
|
4,326
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic and diluted net earnings per unit
|
$
|
0.04
|
|
|
$
|
0.03
|
|
|
$
|
1.35
|
|
|
$
|
0.80
|
|
9.
|
In the first quarter of
2018
, the Partnership issued
11,393
restricted units pursuant to the management incentive compensation program and
3,575
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, 2018
,
801
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
$199,000
and
$180,000
of equity compensation expense in the
second quarter
of
2018
and
2017
, respectively, related to these compensation programs and
$722,000
and
$784,000
for the
six months ended
June 30, 2018
and
2017
, respectively.
|
10.
|
Supplemental disclosure of cash flow information: interest paid, net of amounts capitalized, totaled
$2.0 million
and
$1.9 million
during the first
six months
of
2018
and
2017
, respectively. Income taxes paid totaled
$564,000
and
$24,000
for the first
six months
of
2018
and
2017
, respectively.
|
11.
|
During the first half of 2018, the Partnership closed on
six
acquisitions of timberland in western Washington totaling
1,342
acres for
$7.2 million
. The Partnership utilized
$598,000
of funds held by like-kind exchange intermediaries to fund a portion of these acquisitions. The aggregate purchase price was allocated
$869,000
to land and
$6.3 million
to timber and roads. Part of the consideration paid for one of these transactions involved the conveyance by the Partnership of
365
acres of non-strategic timberland to the seller, valued at
$214,000
, with the remainder paid in cash.
|
12.
|
The Partnership’s financial instruments include cash, accounts receivable, and a note receivable, included in other assets, for which the carrying amount of each represents fair value based on current market interest rates or their short-term nature.
|
13.
|
The Partnership had an accrual for estimated environmental remediation costs of
$7.0 million
and
$5.0 million
as of
June 30, 2018
and
December 31, 2017
, 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, 2016
|
16,761
|
|
|
7,700
|
|
|
(11,691
|
)
|
|
12,770
|
|
||||
Year ended December 31, 2017
|
12,770
|
|
|
—
|
|
|
(7,791
|
)
|
|
4,979
|
|
||||
Quarter ended March 31, 2018
|
$
|
4,979
|
|
|
$
|
—
|
|
|
$
|
(219
|
)
|
|
$
|
4,760
|
|
Quarter ended June 30, 2018
|
$
|
4,760
|
|
|
$
|
2,900
|
|
|
$
|
(666
|
)
|
|
$
|
6,994
|
|
|
|
|
|
|
|
|
Six Months Ended
|
||||||||||||
|
Q2 2018
|
|
Q1 2018
|
|
Q2 2017
|
|
Jun-18
|
|
Jun-17
|
||||||||||
Partnership
|
|
|
|
|
|
|
|
|
|
||||||||||
Overall log price per MBF
|
$
|
726
|
|
|
$
|
779
|
|
|
$
|
616
|
|
|
$
|
765
|
|
|
$
|
615
|
|
Total volume (in MMBF)
|
6.9
|
|
|
18.8
|
|
|
12.5
|
|
|
25.7
|
|
|
26.6
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
||||||||||
Log sale revenue
|
$
|
5,039
|
|
|
$
|
14,635
|
|
|
$
|
7,710
|
|
|
$
|
19,674
|
|
|
$
|
16,387
|
|
Other revenue
|
531
|
|
|
503
|
|
|
459
|
|
|
1,034
|
|
|
888
|
|
|||||
Total revenue
|
5,570
|
|
|
15,138
|
|
|
8,169
|
|
|
20,708
|
|
|
17,275
|
|
|||||
Cost of sales
|
(1,994
|
)
|
|
(5,026
|
)
|
|
(3,336
|
)
|
|
(7,020
|
)
|
|
(6,878
|
)
|
|||||
Operating expenses
|
(1,795
|
)
|
|
(1,460
|
)
|
|
(1,426
|
)
|
|
(3,255
|
)
|
|
(2,613
|
)
|
|||||
Operating income
|
$
|
1,781
|
|
|
$
|
8,652
|
|
|
$
|
3,407
|
|
|
$
|
10,433
|
|
|
$
|
7,784
|
|
Average price realizations (per MBF)
|
|
|
|
|
|
|
Six Months Ended
|
||||||||||||
|
Q2 2018
|
|
Q1 2018
|
|
Q2 2017
|
|
Jun-18
|
|
Jun-17
|
||||||||||
Partnership
|
|
|
|
|
|
|
|
|
|
||||||||||
Douglas-fir domestic
|
$
|
812
|
|
|
$
|
850
|
|
|
$
|
674
|
|
|
$
|
841
|
|
|
$
|
660
|
|
Douglas-fir export
|
843
|
|
|
922
|
|
|
723
|
|
|
896
|
|
|
696
|
|
|||||
Whitewood domestic
|
529
|
|
|
549
|
|
|
474
|
|
|
542
|
|
|
462
|
|
|||||
Whitewood export
|
714
|
|
|
764
|
|
|
686
|
|
|
742
|
|
|
653
|
|
|||||
Cedar
|
1,373
|
|
|
1,458
|
|
|
1,513
|
|
|
1,422
|
|
|
1,423
|
|
|||||
Hardwood
|
721
|
|
|
708
|
|
|
687
|
|
|
713
|
|
|
661
|
|
|||||
Pulpwood
|
351
|
|
|
375
|
|
|
307
|
|
|
367
|
|
|
298
|
|
|||||
Overall log price
|
726
|
|
|
779
|
|
|
616
|
|
|
765
|
|
|
615
|
|
Volume (in MMBF)
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
||||||||||||||
|
Q2 2018
|
|
Q1 2018
|
|
Q2 2017
|
|
Jun-18
|
|
Jun-17
|
|||||||||||||||
Partnership
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Douglas-fir domestic
|
3.5
|
|
51
|
%
|
|
12.2
|
|
64
|
%
|
|
6.0
|
|
49
|
%
|
|
15.7
|
|
61
|
%
|
|
12.7
|
|
49
|
%
|
Douglas-fir export
|
0.8
|
|
12
|
%
|
|
1.8
|
|
10
|
%
|
|
1.9
|
|
15
|
%
|
|
2.6
|
|
10
|
|
|
4.9
|
|
18
|
|
Whitewood domestic
|
0.2
|
|
3
|
%
|
|
0.3
|
|
2
|
%
|
|
0.4
|
|
3
|
%
|
|
0.5
|
|
2
|
|
|
0.9
|
|
3
|
|
Whitewood export
|
0.3
|
|
4
|
%
|
|
0.5
|
|
3
|
%
|
|
0.4
|
|
3
|
%
|
|
0.8
|
|
3
|
|
|
0.9
|
|
3
|
|
Cedar
|
0.3
|
|
4
|
%
|
|
0.4
|
|
2
|
%
|
|
0.3
|
|
2
|
%
|
|
0.6
|
|
2
|
|
|
0.9
|
|
3
|
|
Hardwood
|
0.4
|
|
6
|
%
|
|
0.6
|
|
3
|
%
|
|
0.8
|
|
6
|
%
|
|
1.0
|
|
4
|
|
|
1.1
|
|
4
|
|
Pulpwood
|
1.4
|
|
20
|
%
|
|
3.0
|
|
16
|
%
|
|
2.7
|
|
22
|
%
|
|
4.5
|
|
18
|
|
|
5.2
|
|
20
|
|
Log sale volume
|
6.9
|
|
100
|
%
|
|
18.8
|
|
100
|
%
|
|
12.5
|
|
100
|
%
|
|
25.7
|
|
100
|
%
|
|
26.6
|
|
100
|
%
|
Timber deed sale volume
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|||||
Total volume
|
6.9
|
|
|
|
18.8
|
|
|
|
12.5
|
|
|
|
25.7
|
|
|
|
26.6
|
|
|
(in thousands)
|
|
|
|
|
|
|
Six Months Ended
|
||||||||||||
|
Q2 2018
|
|
Q1 2018
|
|
Q2 2017
|
|
Jun-18
|
|
Jun-17
|
||||||||||
Partnership
|
|
|
|
|
|
|
|
|
|
||||||||||
Harvest, haul, and tax
|
$
|
1,513
|
|
|
$
|
3,728
|
|
|
$
|
2,428
|
|
|
$
|
5,241
|
|
|
$
|
4,948
|
|
Depletion
|
478
|
|
|
1,295
|
|
|
908
|
|
|
1,773
|
|
|
1,930
|
|
|||||
Other
|
3
|
|
|
3
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|||||
Total cost of sales
|
$
|
1,994
|
|
|
$
|
5,026
|
|
|
$
|
3,336
|
|
|
$
|
7,020
|
|
|
$
|
6,878
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Amounts per MBF *
|
|
|
|
|
|
|
|
|
|
||||||||||
Harvest, haul, and tax
|
$
|
219
|
|
|
$
|
198
|
|
|
$
|
194
|
|
|
$
|
204
|
|
|
$
|
186
|
|
Depletion
|
$
|
69
|
|
|
$
|
69
|
|
|
$
|
73
|
|
|
$
|
69
|
|
|
$
|
73
|
|
*
|
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.
|
|
|
|
|
|
|
|
Six Months Ended
|
||||||||||||
|
Q2 2018
|
|
Q1 2018
|
|
Q2 2017
|
|
Jun-18
|
|
Jun-17
|
||||||||||
Funds
|
|
|
|
|
|
|
|
|
|
||||||||||
Overall log price per MBF
|
$
|
707
|
|
|
$
|
698
|
|
|
$
|
617
|
|
|
$
|
718
|
|
|
$
|
594
|
|
Total volume (MMBF)
|
28.6
|
|
|
13.1
|
|
|
12.8
|
|
|
41.7
|
|
|
26.4
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
||||||||||
Log sale revenue
|
$
|
8,494
|
|
|
$
|
9,509
|
|
|
$
|
6,630
|
|
|
$
|
18,003
|
|
|
$
|
14,232
|
|
Other revenue
|
9,423
|
|
|
32
|
|
|
643
|
|
|
9,455
|
|
|
747
|
|
|||||
Total revenue
|
17,917
|
|
|
9,541
|
|
|
7,273
|
|
|
27,458
|
|
|
14,979
|
|
|||||
Cost of sales
|
(11,870
|
)
|
|
(6,952
|
)
|
|
(5,190
|
)
|
|
(18,822
|
)
|
|
(12,283
|
)
|
|||||
Operating expenses - internal
|
(2,525
|
)
|
|
(1,806
|
)
|
|
(1,662
|
)
|
|
(4,331
|
)
|
|
(3,435
|
)
|
|||||
Gain on sale of timberland
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,503
|
|
|||||
Operating income - internal
|
3,522
|
|
|
783
|
|
|
421
|
|
|
$
|
4,305
|
|
|
$
|
11,764
|
|
|||
Eliminations
*
|
1,140
|
|
|
1,024
|
|
|
817
|
|
|
$
|
2,164
|
|
|
$
|
1,665
|
|
|||
Operating income - external
|
$
|
4,662
|
|
|
$
|
1,807
|
|
|
$
|
1,238
|
|
|
$
|
6,469
|
|
|
$
|
13,429
|
|
|
|
|
|
|
|
|
Six Months Ended
|
||||||||||||
|
Q2 2018
|
|
Q1 2018
|
|
Q2 2017
|
|
Jun-18
|
|
Jun-17
|
||||||||||
Partnership's share of Funds
|
|
|
|
|
|
|
|
|
|
||||||||||
Total volume (MMBF)
|
3.7
|
|
|
1.7
|
|
|
1.8
|
|
|
5.4
|
|
|
3.5
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
||||||||||
Log sale revenue
|
$
|
1,091
|
|
|
$
|
1,207
|
|
|
$
|
1,076
|
|
|
$
|
2,298
|
|
|
$
|
2,038
|
|
Other revenue
|
1,255
|
|
|
5
|
|
|
32
|
|
|
1,260
|
|
|
39
|
|
|||||
Total revenue
|
2,346
|
|
|
1,212
|
|
|
1,108
|
|
|
3,558
|
|
|
2,077
|
|
|||||
Cost of sales
|
(1,463
|
)
|
|
(781
|
)
|
|
(700
|
)
|
|
(2,245
|
)
|
|
(1,465
|
)
|
|||||
Operating expenses - internal
|
(325
|
)
|
|
(201
|
)
|
|
(198
|
)
|
|
(525
|
)
|
|
(415
|
)
|
|||||
Gain on sale of timberland
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,501
|
|
|||||
Operating income - internal
|
558
|
|
|
230
|
|
|
210
|
|
|
788
|
|
|
2,698
|
|
|||||
Eliminations *
|
129
|
|
|
113
|
|
|
84
|
|
|
241
|
|
|
169
|
|
|||||
Operating income - external
|
$
|
687
|
|
|
$
|
343
|
|
|
$
|
294
|
|
|
$
|
1,029
|
|
|
$
|
2,867
|
|
Average price realizations (per MBF)
|
|
|
|
|
|
|
Six Months Ended
|
||||||||||||
|
Q2 2018
|
|
Q1 2018
|
|
Q2 2017
|
|
Jun-18
|
|
Jun-17
|
||||||||||
Funds
|
|
|
|
|
|
|
|
|
|
||||||||||
Douglas-fir domestic
|
$
|
815
|
|
|
$
|
797
|
|
|
$
|
674
|
|
|
$
|
822
|
|
|
$
|
660
|
|
Douglas-fir export
|
870
|
|
|
896
|
|
|
759
|
|
|
908
|
|
|
762
|
|
|||||
Whitewood domestic
|
662
|
|
|
622
|
|
|
585
|
|
|
664
|
|
|
553
|
|
|||||
Whitewood export
|
727
|
|
|
745
|
|
|
691
|
|
|
722
|
|
|
616
|
|
|||||
Pine
|
513
|
|
|
511
|
|
|
486
|
|
|
509
|
|
|
501
|
|
|||||
Cedar
|
1,276
|
|
|
1,161
|
|
|
1,012
|
|
|
1,326
|
|
|
1,189
|
|
|||||
Hardwood
|
778
|
|
|
758
|
|
|
660
|
|
|
753
|
|
|
651
|
|
|||||
Pulpwood
|
357
|
|
|
332
|
|
|
271
|
|
|
371
|
|
|
284
|
|
|||||
Overall log price
|
707
|
|
|
698
|
|
|
617
|
|
|
718
|
|
|
594
|
|
|||||
Timber deed sales
|
534
|
|
|
—
|
|
|
301
|
|
|
534
|
|
|
292
|
|
Volume (in MMBF)
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
||||||||||||||
|
Q2 2018
|
|
Q1 2018
|
|
Q2 2017
|
|
Jun-18
|
|
Jun-17
|
|||||||||||||||
Funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Douglas-fir domestic
|
3.4
|
|
27
|
%
|
|
3.8
|
|
29
|
%
|
|
3.7
|
|
34
|
%
|
|
7.3
|
|
29
|
%
|
|
8.8
|
|
37
|
%
|
Douglas-fir export
|
2.3
|
|
19
|
%
|
|
1.6
|
|
12
|
%
|
|
2.2
|
|
21
|
%
|
|
4.0
|
|
16
|
%
|
|
3.3
|
|
14
|
%
|
Whitewood domestic
|
2.1
|
|
18
|
%
|
|
4.9
|
|
37
|
%
|
|
1.9
|
|
18
|
%
|
|
7.0
|
|
28
|
%
|
|
5.0
|
|
21
|
%
|
Whitewood export
|
1.2
|
|
10
|
%
|
|
0.4
|
|
3
|
%
|
|
0.6
|
|
6
|
%
|
|
1.6
|
|
6
|
%
|
|
2.0
|
|
8
|
%
|
Pine
|
0.9
|
|
8
|
%
|
|
0.2
|
|
2
|
%
|
|
1.3
|
|
12
|
%
|
|
1.0
|
|
4
|
%
|
|
1.3
|
|
5
|
%
|
Cedar
|
0.1
|
|
1
|
%
|
|
0.3
|
|
2
|
%
|
|
—
|
|
—
|
%
|
|
0.4
|
|
2
|
%
|
|
0.2
|
|
1
|
%
|
Hardwood
|
0.3
|
|
3
|
%
|
|
0.2
|
|
2
|
%
|
|
—
|
|
—
|
%
|
|
0.5
|
|
2
|
%
|
|
0.2
|
|
1
|
%
|
Pulpwood
|
1.7
|
|
14
|
%
|
|
1.7
|
|
13
|
%
|
|
1.0
|
|
9
|
%
|
|
3.3
|
|
13
|
%
|
|
3.2
|
|
13
|
%
|
Log sale volume
|
12.0
|
|
100
|
%
|
|
13.1
|
|
100
|
%
|
|
10.7
|
|
100
|
%
|
|
25.1
|
|
100
|
%
|
|
24.0
|
|
100
|
%
|
Timber deed sale volume
|
16.6
|
|
|
|
—
|
|
|
|
2.1
|
|
|
|
16.6
|
|
|
|
2.4
|
|
|
|||||
Total volume
|
28.6
|
|
|
|
13.1
|
|
|
|
12.8
|
|
|
|
41.7
|
|
|
|
26.4
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Partnership’s share of funds
|
3.7
|
|
|
|
1.7
|
|
|
|
1.8
|
|
|
|
5.4
|
|
|
|
3.5
|
|
|
(in thousands)
|
|
|
|
|
|
|
Six Months Ended
|
||||||||||||
|
Q2 2018
|
|
Q1 2018
|
|
Q2 2017
|
|
Jun-18
|
|
Jun-17
|
||||||||||
Funds
|
|
|
|
|
|
|
|
|
|
||||||||||
Harvest, haul, and tax *
|
$
|
2,924
|
|
|
$
|
3,517
|
|
|
$
|
2,535
|
|
|
$
|
6,441
|
|
|
$
|
5,728
|
|
Depletion *
|
8,946
|
|
|
3,422
|
|
|
2,655
|
|
|
12,368
|
|
|
6,555
|
|
|||||
Other
|
—
|
|
|
13
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|||||
Total cost of sales
|
$
|
11,870
|
|
|
$
|
6,952
|
|
|
$
|
5,190
|
|
|
$
|
18,822
|
|
|
$
|
12,283
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Partnership’s share of Funds
|
$
|
1,465
|
|
|
$
|
782
|
|
|
$
|
700
|
|
|
$
|
2,247
|
|
|
$
|
1,465
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Amounts per MBF
|
|
|
|
|
|
|
|
|
|
||||||||||
Harvest, haul, and tax
|
$
|
244
|
|
|
$
|
268
|
|
|
$
|
237
|
|
|
$
|
257
|
|
|
$
|
239
|
|
Depletion
|
$
|
313
|
|
|
$
|
261
|
|
|
$
|
207
|
|
|
$
|
297
|
|
|
$
|
248
|
|
|
|
Quarter Ended
|
||||||
(in thousands, except invested capital, volume and acre data)
|
|
Jun-18
|
|
Jun-17
|
||||
Revenue internal
|
|
$
|
1,140
|
|
|
$
|
817
|
|
Intersegment eliminations
|
|
(1,140
|
)
|
|
(817
|
)
|
||
Revenue external
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
||||
Operating income internal
|
|
$
|
85
|
|
|
$
|
(35
|
)
|
Intersegment eliminations
|
|
(1,001
|
)
|
|
(716
|
)
|
||
Operating loss external
|
|
$
|
(916
|
)
|
|
$
|
(751
|
)
|
|
|
|
|
|
||||
Invested capital (in millions)
|
|
$
|
354
|
|
|
$
|
240
|
|
Acres owned by Funds
|
|
124,000
|
|
|
88,000
|
|
||
Harvest volume - Funds (MMBF), including timber deed sales
|
|
28.6
|
|
|
12.8
|
|
|
|
Six Months Ended
|
||||||
(in thousands, except invested capital, volume and acre data)
|
|
Jun-18
|
|
Jun-17
|
||||
Revenue internal
|
|
$
|
2,164
|
|
|
$
|
1,665
|
|
Intersegment eliminations
|
|
(2,164
|
)
|
|
(1,665
|
)
|
||
Revenue external
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
||||
Operating income (loss) internal
|
|
$
|
33
|
|
|
$
|
(260
|
)
|
Intersegment eliminations
|
|
(1,896
|
)
|
|
(1,457
|
)
|
||
Operating loss external
|
|
$
|
(1,863
|
)
|
|
$
|
(1,717
|
)
|
|
|
|
|
|
||||
Invested capital (in millions)
|
|
$
|
354
|
|
|
$
|
240
|
|
Acres owned by Funds
|
|
124,000
|
|
|
88,000
|
|
||
Harvest volume - Funds (MMBF), including timber deed sales
|
|
41.7
|
|
|
26.4
|
|
•
|
Residential and commercial 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)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Interest income - Partnership
|
$
|
34
|
|
|
$
|
1
|
|
|
$69
|
|
$3
|
Interest expense - Partnership
|
(782
|
)
|
|
(670
|
)
|
|
(1,458)
|
|
(1,229)
|
||
Interest expense - Funds
|
(581
|
)
|
|
(582
|
)
|
|
(1,157)
|
|
(1,151)
|
||
Capitalized interest - Partnership
|
81
|
|
|
134
|
|
|
154
|
|
250
|
||
Interest expense, net
|
$
|
(1,248
|
)
|
|
$
|
(1,117
|
)
|
|
$(2,392)
|
|
$(2,127)
|
•
|
a maximum debt-to-total-capitalization ratio of 30%, with total capitalization calculated using fair market (vs. carrying) value of timberland, roads and timber; and
|
•
|
a maximum debt-to-appraised value of collateral of 50%.
|
|
Six Months Ended June 30,
|
||||||||||
(in thousands)
|
2018
|
|
Change
|
|
2017
|
||||||
Cash provided by operating activities
|
$
|
18,329
|
|
|
$
|
12,709
|
|
|
$
|
5,620
|
|
|
|
|
|
|
|
||||||
Investing activities
|
|
|
|
|
|
||||||
Reforestation and roads
|
(1,861
|
)
|
|
(752
|
)
|
|
(1,109
|
)
|
|||
Capital expenditures
|
(462
|
)
|
|
(370
|
)
|
|
(92
|
)
|
|||
Proceeds from sale of property and equipment
|
4
|
|
|
(26
|
)
|
|
30
|
|
|||
Investment in unconsolidated real estate joint venture
|
(250
|
)
|
|
(250
|
)
|
|
—
|
|
|||
Acquisition of timberland - Partnership
|
(6,355
|
)
|
|
(1,404
|
)
|
|
(4,951
|
)
|
|||
Acquisition of timberland - Funds
|
(108,364
|
)
|
|
(108,364
|
)
|
|
—
|
|
|||
Proceeds from sale of timberland - Funds
|
—
|
|
|
(26,444
|
)
|
|
26,444
|
|
|||
Cash provided by (used in) investing activities
|
(117,288
|
)
|
|
(137,610
|
)
|
|
20,322
|
|
|||
Financing activities
|
|
|
|
|
|
|
|
|
|||
Line of credit borrowings
|
24,300
|
|
|
5,793
|
|
|
18,507
|
|
|||
Line of credit repayments
|
(4,500
|
)
|
|
3,500
|
|
|
(8,000
|
)
|
|||
Repayment of long-term debt
|
(61
|
)
|
|
4,998
|
|
|
(5,059
|
)
|
|||
Debt issuances costs
|
—
|
|
|
77
|
|
|
(77
|
)
|
|||
Units issued under distribution reinvestment plan
|
120
|
|
|
120
|
|
|
—
|
|
|||
Unit repurchases
|
(653
|
)
|
|
(596
|
)
|
|
(57
|
)
|
|||
Payroll taxes paid upon unit net settlements
|
(102
|
)
|
|
(8
|
)
|
|
(94
|
)
|
|||
Cash distributions to unitholders
|
(6,103
|
)
|
|
12
|
|
|
(6,115
|
)
|
|||
Cash distributions to fund investors, net of distributions to Partnership
|
(6,323
|
)
|
|
17,614
|
|
|
(23,937
|
)
|
|||
Capital call - ORM Timber Funds, net of Partnership contribution
|
92,280
|
|
|
91,455
|
|
|
825
|
|
|||
Cash provided by (used in) financing activities
|
98,958
|
|
|
122,965
|
|
|
(24,007
|
)
|
|||
Net increase (decrease) in cash and restricted cash
|
$
|
(1
|
)
|
|
$
|
(1,936
|
)
|
|
$
|
1,935
|
|
|
|
|
2018
|
|
|
||||||
|
June 30 YTD
|
|
Remainder of Year
|
|
Total
|
||||||
in millions
|
|
|
|
|
|
||||||
Harbor Hill project development
|
$
|
1.2
|
|
|
$
|
4.7
|
|
|
$
|
5.9
|
|
Reforestation and roads - Partnership
|
1.1
|
|
|
0.5
|
|
|
1.6
|
|
|||
Reforestation and roads - Funds
|
0.8
|
|
|
0.9
|
|
|
1.7
|
|
|||
Other
|
0.5
|
|
|
1.8
|
|
|
2.3
|
|
|||
|
$
|
3.6
|
|
|
$
|
7.9
|
|
|
$
|
11.5
|
|
•
|
Increasing professional fees and costs and other general and administrative expenses.
|
•
|
Distracting management and the board from the Partnership’s day to day operations.
|
•
|
Creating uncertainty among key employees, which in turn may increase the risk of either losing one or more such employees, or the Partnership’s cost of retaining them.
|
•
|
Increasing the Partnership’s litigation risk, and the accompanying insurance and compliance costs.
|
•
|
Increasing the volatility in the trading price and trading volume of the Partnership’s units.
|
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
|
|
|
|
|
|
April 2018
|
1,282
|
$70.61
|
1,282
|
$813,000
|
May 2018
|
993
|
$71.92
|
993
|
$741,000
|
June 2018
|
2,716
|
$73.31
|
2,716
|
$542,000
|
31.1
|
|
|
|
31.2
|
|
|
|
32.1
|
|
|
|
32.2
|
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/ Daemon P. Repp
|
|
|
Daemon P. Repp
|
|
|
Director of Finance
|
|
|
(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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