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Share Name | Share Symbol | Market | Type |
---|---|---|---|
CatchMark Timber Trust Inc | NYSE:CTT | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 10.37 | 0 | 01:00:00 |
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x
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Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2018
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or
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o
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Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Period from ______ to _______.
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Maryland
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20-3536671
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification Number)
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5 Concourse Parkway, Suite 2650, Atlanta, GA
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30328
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
|
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Name of exchange on which registered
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Class A Common Stock, $0.01 Par Value Per Share
|
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New York Stock Exchange
|
Large accelerated filer
o
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Accelerated filer
x
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Non-accelerated filer
o
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Smaller reporting company
x
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Emerging growth company
o
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Page No.
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Mine Safety Disclosures
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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Item 16.
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Form 10-K Summary
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AFM
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American Forestry Management, Inc.
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AgFirst
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Agfirst Farm Credit Bank
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ASC
|
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Accounting Standards Codification
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ASU
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Accounting Standards Update
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CoBank
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CoBank, ACB
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Code
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Internal Revenue Code
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EBITDA
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Earnings from Continuing Operations before Interest, Taxes, Depletion, and Amortization
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FASB
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Financial Accounting Standards Board
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FCCR
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Fixed Charge Coverage Ratio
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FRC
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Forest Resource Consultants, Inc.
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GAAP
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Generally Accepted Accounting Principles in the United States
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HBU
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Higher and Better Use
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HLBV
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Hypothetical Liquidation at Book Value
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IP
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International Paper Company
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IPO
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Initial Listed Public Offering
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IRS
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Internal Revenue Service
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LIBOR
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London Interbank Offered Rate
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LTV
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Loan-to-Value
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MBF
|
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Thousand Board Feet
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MPERS
|
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Missouri Department of Transportation & Patrol Retirement System
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NCREIF
|
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National Council of Real Estate Investment Fiduciaries
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NYSE
|
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New York Stock Exchange
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Rabobank
|
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Cooperatieve Centrale Raiffeisen-Boerenleenbank, B.A.
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REIT
|
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Real Estate Investment Trust
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RSU
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Restricted Stock Unit
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SEC
|
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Securities and Exchange Commission
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SFI
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Sustainable Forest Initiative
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TRS
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Taxable REIT Subsidiary
|
TSR
|
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Total Shareholder Return
|
U.S.
|
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United States
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VIE
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Variable Interest Entity
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WestRock
|
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WestRock Company (formerly known as MeadWestvaco Corporation)
|
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2018
|
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2017
|
|
2016
|
|||
Timber sales
|
|
71
|
%
|
|
78
|
%
|
|
80
|
%
|
Timberland sales
|
|
18
|
%
|
|
16
|
%
|
|
15
|
%
|
Asset management fees
|
|
6
|
%
|
|
—
|
%
|
|
—
|
%
|
Other revenues
|
|
5
|
%
|
|
6
|
%
|
|
5
|
%
|
Total
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
For the Year Ended December 31,
|
||||||||||
(in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Harvest
|
$
|
74,734
|
|
|
$
|
76,419
|
|
|
$
|
69,340
|
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Real Estate
|
17,520
|
|
|
14,768
|
|
|
12,515
|
|
|||
Investment Management
|
5,603
|
|
|
108
|
|
|
—
|
|
|||
Total
|
$
|
97,857
|
|
|
$
|
91,295
|
|
|
$
|
81,855
|
|
•
|
Predominantly softwood merchantable inventory mix;
|
•
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Merchantable inventory/mix (tons per-acre);
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•
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Sustainable productivity (on a tons per-acre, per-year basis);
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•
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Quality of existing and prospective customers; and
|
•
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Target cash yields (near-term/long-term).
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•
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Inventory stocking below portfolio average;
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•
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Predominantly hardwood merchantable inventory mix; and
|
•
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Poor productivity.
|
•
|
Maintaining sufficient liquidity through borrowing capacity under our credit facilities and cash-on-hand;
|
•
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Minimizing the amount of near-term debt maturities in a single year;
|
•
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Maintaining low to modest leverage;
|
•
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Managing interest rate risk through an appropriate mix of fixed and variable rate debt instruments, either directly or using interest rate swaps, caps or other arrangements; and
|
•
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Maintaining access to diverse sources of capital.
|
•
|
changes in domestic and international economic conditions;
|
•
|
interest and currency rates;
|
•
|
population growth and changing demographics; and
|
•
|
seasonal weather cycles (for example, dry summers and wet winters).
|
•
|
general economic conditions;
|
•
|
availability of funding for governmental agencies, developers, conservation organizations, individuals and others to purchase our timberlands for recreational, conservation, residential or other purposes;
|
•
|
local real estate market conditions, such as oversupply of, or reduced demand for, properties sharing the same or similar characteristics as our timberlands;
|
•
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competition from other sellers of land and real estate developers;
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•
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weather conditions or natural disasters having an adverse effect on our properties;
|
•
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relative illiquidity of real estate investments;
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•
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forestry management costs associated with maintaining and managing timberlands;
|
•
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changes in interest rates and in the availability, cost and terms of debt financing;
|
•
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impact of federal, state and local land use and environmental protection laws;
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•
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changes in governmental laws and regulations, fiscal policies and zoning ordinances, and the related costs of compliance with laws and regulations, fiscal policies and ordinances; and
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•
|
it may be necessary to delay sales in order to minimize the risk that gains would be subject to the 100% prohibited transactions tax.
|
•
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the Triple T Joint Venture’s dependency on, and obligations under, long-term third-party customer contracts;
|
•
|
our partners in the Triple T Joint Venture have significant governance rights, including major decision rights on management and operational matters, and we may arrive at an impasse with these partners relating to one or more of these matters;
|
•
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our asset management fees from the Triple T Joint Venture are subject to deferral if certain financial objectives are not obtained;
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•
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the right of the preferred investors to receive a preferred return and a return of capital in priority to us;
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•
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our asset management agreement with the Triple T Joint Venture is subject to termination, including upon the failure of the Triple T Joint Venture to meet certain financial and operational performance objectives;
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•
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volatility in the market prices of forest products;
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•
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challenges in keeping existing customers and obtaining new customers;
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•
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challenges in retaining, attracting and assimilating key personnel, including personnel that are considered key to the future success of the business of the Triple T Joint Venture;
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•
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obligations and restrictions imposed by the financing arrangements of the Triple T Joint Venture; and
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•
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challenges in keeping key business relationships in place.
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•
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the risk that a joint venture may not be able to make payments under, or refinance on attractive terms or at all, its financing arrangements, including secured financings pursuant to which defaults could result in lenders foreclosing on the joint venture's assets;
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•
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the risk that a joint venture partner may at any time have economic or business interests or goals which are, or which become, inconsistent with our business interests or goals;
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•
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the risk that a joint venture partner may be in a position to take actions that are contrary to the agreed upon terms of the joint venture, our instructions or our policies or objectives;
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•
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the risk that we may incur liabilities as a result of an action taken by a joint venture partner;
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•
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the risk that disputes between us and a joint venture partner may result in litigation or arbitration that would increase our expenses and occupy the time and attention of our officers and directors;
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•
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the risk that no joint venture partner may have the ability to unilaterally control the joint venture with respect to certain major decisions, and as a result an irreconcilable impasse may be reached with respect to certain decisions;
|
•
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the risk that we may not be able to sell our interest in a joint venture when we desire to exit the joint venture, or at an attractive price; and
|
•
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the risk that, if we have a contractual right or obligation to acquire a joint venture partner’s ownership interest in the joint venture, we may be unable to finance such an acquisition if it becomes exercisable or we may be required to purchase such ownership interest at a time when it would not otherwise be in our best interest to do so.
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•
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effects of exposure to currency other than U.S. dollars, due to having non-U.S. customers and foreign operations;
|
•
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potentially adverse tax consequences and restrictions on the repatriation of earnings;
|
•
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regulatory, social, political, labor or economic conditions in a specific country or region; and
|
•
|
trade protection laws, policies and measures, and other regulatory requirements affecting trade and investment, including loss or modification of exemptions for taxes and tariffs, and import and export licensing requirements.
|
•
|
“business combination” provisions that, subject to limitations, prohibit certain business combinations between us and an “interested stockholder” (defined generally as any person who beneficially owns 10% or more of the voting power of our outstanding voting stock or an affiliate or associate of ours who, at any time within the two-year period prior to the date in question, was the beneficial owner of 10% or more of our then outstanding stock) or an affiliate of an interested stockholder for five years after the most recent date on which the stockholder becomes an interested stockholder, and thereafter may impose super majority stockholder voting requirements unless certain minimum price conditions are satisfied; and
|
•
|
“control share” provisions that provide that “control shares” of our company (defined as shares which, when aggregated with other shares controlled by the stockholder, entitle the stockholder to exercise one of three increasing ranges of voting power in electing directors) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of outstanding “control shares”) have no voting rights except to the extent approved by our stockholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding all interested shares.
|
•
|
actual receipt of an improper benefit or profit in money, property or services; or
|
•
|
a final judgment based upon a finding of active and deliberate dishonesty by the director or officer that was material to the cause of action adjudicated.
|
•
|
limiting our ability to borrow additional amounts for working capital, capital expenditures, debt service requirements, execution of our growth strategy or other purposes;
|
•
|
limiting our ability to use operating cash flow in other areas of our business because we must dedicate a portion of these funds to service the debt;
|
•
|
increasing our vulnerability to general adverse economic and industry conditions, including increases in interest rates;
|
•
|
limiting our ability to capitalize on business opportunities, including the acquisition of additional properties, and to react to competitive pressures and adverse changes in government regulation;
|
•
|
limiting our ability or increasing the costs to refinance indebtedness;
|
•
|
limiting our ability to enter into marketing and hedging transactions by reducing the number of counterparties with whom we can enter into such transactions as well as the volume of those transactions;
|
•
|
forcing us to dispose of one or more properties, possibly on disadvantageous terms;
|
•
|
forcing us to sell additional equity securities at prices that may be dilutive to existing stockholders;
|
•
|
causing us to default on our obligations or violate restrictive covenants, in which case the lenders or mortgagees may accelerate our debt obligations, foreclose on the properties that secure their loans and take control of our properties that secure their loans and collect rents and other property income; and
|
•
|
in the event of a default under any of our recourse indebtedness or in certain circumstances under our mortgage indebtedness, we would be liable for any deficiency between the value of the property securing such loan and the principal and accrued interest on the loan.
|
•
|
the holders of our debt could declare all outstanding principal and interest to be due and payable;
|
•
|
the holders of our secured debt could commence foreclosure proceedings against our assets; and
|
•
|
we could be forced into bankruptcy or liquidation.
|
•
|
In order to qualify as a REIT, we must distribute annually at least 90% of our REIT taxable income to our stockholders (determined without regard to the dividends-paid deduction or net capital gain). To the extent that we satisfy the distribution requirement but distribute less than 100% of our REIT taxable income (including net capital gain), we will be subject to federal and state corporate income tax on the undistributed income.
|
•
|
We will be subject to a 4% nondeductible excise tax on the amount, if any, by which distributions we pay in any calendar year are less than the sum of 85% of our ordinary income, 95% of our capital gain net income, and 100% of our undistributed income from prior years.
|
•
|
If we have net income from the sale of foreclosure property that we hold primarily for sale to customers in the ordinary course of business or other non-qualifying income from foreclosure property, we must pay a tax on that income at the highest corporate income tax rate.
|
•
|
If we sell a property, other than foreclosure property, that we hold primarily for sale to customers in the ordinary course of business, our gain may be subject to the 100% “prohibited transaction” tax.
|
•
|
Our taxable REIT subsidiaries will be subject to tax on their taxable income.
|
•
|
the annual yield from distributions on our common stock as compared to yields on other financial instruments;
|
•
|
equity issuances by us, or future sales of substantial amounts of our common stock by our existing or future stockholders, or the perception that such issuances or future sales may occur;
|
•
|
short sales or other derivative transactions with respect to our common stock;
|
•
|
the ability of our share repurchase program to improve stockholder value over the long term;
|
•
|
changes in market valuations of companies in the timberland, homebuilding or real estate industries;
|
•
|
increases in market interest rates or a decrease in our distributions to stockholders that lead purchasers of our common stock to demand a higher yield;
|
•
|
fluctuations in stock market prices and volumes;
|
•
|
additions or departures of key management personnel;
|
•
|
our operating performance and the performance of other similar companies;
|
•
|
actual or anticipated differences in our quarterly operating results;
|
•
|
changes in expectations of future financial performance or changes in estimates of securities analysts;
|
•
|
publication of research reports about us or our industry by securities analysts or failure of our results to meet expectations of securities analysts;
|
•
|
failure to qualify as a REIT;
|
•
|
adverse market reaction to any indebtedness we incur in the future;
|
•
|
strategic decisions by us or our competitors, such as acquisitions, divestments, spin-offs, joint ventures, strategic investments or changes in business strategy;
|
•
|
the passage of legislation or other regulatory developments that adversely affect us or our industry;
|
•
|
speculation in the press or investment community;
|
•
|
changes in our earnings;
|
•
|
failure to satisfy the listing requirements of the NYSE;
|
•
|
failure to comply with the requirements of the Sarbanes-Oxley Act;
|
•
|
actions by institutional stockholders;
|
•
|
changes in accounting principles; and
|
•
|
general market conditions, including factors unrelated to our performance.
|
ITEM 1B.
|
UNRESOLVED STAFF COMMENTS
|
ITEM 2.
|
PROPERTIES
|
Acres by state as of December 31, 2018
(1)
|
|
Fee
|
|
Lease
|
|
Total
|
|||
South
|
|
|
|
|
|
|
|||
Alabama
|
|
72,900
|
|
|
5,300
|
|
|
78,200
|
|
Florida
|
|
2,000
|
|
|
—
|
|
|
2,000
|
|
Georgia
|
|
261,300
|
|
|
24,900
|
|
|
286,200
|
|
North Carolina
|
|
600
|
|
|
—
|
|
|
600
|
|
South Carolina
|
|
77,700
|
|
|
—
|
|
|
77,700
|
|
Tennessee
|
|
300
|
|
|
—
|
|
|
300
|
|
|
|
414,800
|
|
|
30,200
|
|
|
445,000
|
|
Pacific Northwest
|
|
|
|
|
|
|
|||
Oregon
|
|
18,100
|
|
|
—
|
|
|
18,100
|
|
Total
|
|
432,900
|
|
|
30,200
|
|
|
463,100
|
|
(in millions)
|
Tons
|
|||||||
Merchantable timber inventory
(1)
|
Fee
|
|
Lease
|
|
Total
|
|||
Pulpwood
|
9.2
|
|
|
0.6
|
|
|
9.8
|
|
Sawtimber
(2)
|
9.6
|
|
|
0.4
|
|
|
10.0
|
|
Total
|
18.8
|
|
|
1.0
|
|
|
19.8
|
|
|
As of December 31, 2018
|
||
|
Dawsonville Bluffs Joint Venture
|
|
Triple T Joint Venture
|
Ownership percentage
|
50.0%
|
|
21.6%
(1)
|
Acreage owned by the joint venture
|
5,000
|
|
1,099,800
|
Merchantable timber inventory (million tons)
|
0.3
|
|
42.9
(2)
|
Location
|
Georgia
|
|
Texas
|
(1)
|
Acres presented in the graph includes fee timberland only and excludes 11,700 acres of non-forest land.
|
(2)
|
Natural Pine and Hardwood represents acres that have been seeded by standing older pine trees near the site through the natural process of seeds dropping from the cones of the older trees. Natural pine sites generally include some mix of natural occurring hardwood trees as well.
|
(3)
|
Pine Plantation represents acres planted or to be planted with pine seedlings to maximize the growth potential and inventory carrying capacity of the soils. Pine Plantation acre inventory is devoted to pine species only.
|
(1)
|
Acres presented in the graph includes fee timberland only and excludes 1,800 acres of non-productive forest land.
|
ITEM 3.
|
LEGAL PROCEEDINGS
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES
|
|
12/31/2013
|
12/31/2014
|
12/31/2015
|
12/31/2016
|
12/31/2017
|
12/31/2018
|
||||||||||||
CatchMark Timber Trust, Inc.
|
$
|
100
|
|
$
|
84
|
|
$
|
88
|
|
$
|
92
|
|
$
|
112
|
|
$
|
64
|
|
Russell 3000
|
$
|
100
|
|
$
|
110
|
|
$
|
109
|
|
$
|
120
|
|
$
|
143
|
|
$
|
133
|
|
S&P Global Timber & Forestry Index
|
$
|
100
|
|
$
|
100
|
|
$
|
91
|
|
$
|
100
|
|
$
|
132
|
|
$
|
106
|
|
Period
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
(1)
|
|
Average Price Paid per Share
(1)
|
|
Maximum Number (Or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
(1)
|
||||||
October 1 - October 31
|
|
98,459
|
|
|
$
|
10.16
|
|
|
$
|
18.7
|
|
million
|
November 1 - November 30
|
|
—
|
|
|
$
|
—
|
|
|
$
|
18.7
|
|
million
|
December 1 - December 31
|
|
—
|
|
|
$
|
—
|
|
|
$
|
18.7
|
|
million
|
Total
|
|
98,459
|
|
|
|
|
|
|
(1)
|
See
Item 7— Management Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources
for details of our publicly announced share repurchase program.
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
Capital expenditures-acquisitions
(3)
|
$
|
91,821
|
|
|
$
|
52,260
|
|
|
$
|
141,570
|
|
|
$
|
75,793
|
|
|
$
|
237,527
|
|
Capital expenditures-other
|
$
|
4,571
|
|
|
$
|
5,617
|
|
|
$
|
3,195
|
|
|
$
|
2,668
|
|
|
$
|
906
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
For the Year Ended December 31,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
Selected Operating Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Timber Sales Volume (tons)
(5)
|
|
|
|
|
|
|
|
|
|
||||||||||
Pulpwood
|
1,356,128
|
|
|
1,424,017
|
|
|
1,360,437
|
|
|
1,131,475
|
|
|
885,980
|
|
|||||
Sawtimber
(4)
|
816,717
|
|
|
927,191
|
|
|
867,055
|
|
|
708,764
|
|
|
479,460
|
|
|||||
Total
|
2,172,845
|
|
|
2,351,208
|
|
|
2,227,492
|
|
|
1,840,239
|
|
|
1,365,440
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Delivered % as of total volume
|
80
|
%
|
|
74
|
%
|
|
64
|
%
|
|
60
|
%
|
|
70
|
%
|
|||||
Stumpage % as of total volume
|
20
|
%
|
|
26
|
%
|
|
36
|
%
|
|
40
|
%
|
|
30
|
%
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net Timber Sales Price ($ per ton)
(5)
|
|
|
|
|
|
|
|
|
|
||||||||||
Pulpwood
|
$
|
14
|
|
|
$
|
13
|
|
|
$
|
14
|
|
|
$
|
13
|
|
|
$
|
13
|
|
Sawtimber
(4)
|
$
|
24
|
|
|
$
|
24
|
|
|
$
|
24
|
|
|
$
|
26
|
|
|
$
|
24
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Timberland Sales
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross sales ('000)
|
$
|
17,520
|
|
|
$
|
14,768
|
|
|
$
|
12,515
|
|
|
$
|
11,845
|
|
|
$
|
10,650
|
|
Basis of timberland sold
|
$
|
12,380
|
|
|
$
|
9,890
|
|
|
$
|
9,728
|
|
|
$
|
8,886
|
|
|
$
|
5,072
|
|
Acres sold
|
8,500
|
|
|
7,700
|
|
|
7,300
|
|
|
6,400
|
|
|
3,800
|
|
|||||
% of fee acres
|
1.8%
|
|
|
1.7
|
%
|
|
1.7
|
%
|
|
1.7
|
%
|
|
1.4
|
%
|
|||||
Price per acre
|
$
|
2,064
|
|
|
$
|
1,924
|
|
|
$
|
1,718
|
|
|
$
|
1,849
|
|
|
$
|
2,832
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Large Dispositions
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross sales ('000)
|
$
|
79,301
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Basis of timberland sold
|
$
|
79,524
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Acres sold
|
56,100
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Price per acre
(6)
|
$
|
1,414
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Direct Timberland Acquisitions
|
|
|
|
|
|
|
|||||||||||||
Gross acquisitions
|
$
|
89,700
|
|
|
$
|
71,648
|
|
|
$
|
141,013
|
|
|
$
|
73,305
|
|
|
$
|
235,158
|
|
Acres acquired
|
18,100
|
|
|
30,600
|
|
|
81,900
|
|
|
42,900
|
|
|
121,600
|
|
|||||
Price per acre ($/acre)
|
$
|
4,956
|
|
|
$
|
2,341
|
|
|
$
|
1,721
|
|
|
$
|
1,709
|
|
|
$
|
1,934
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Joint Venture Timberland Acquisitions
(1)
|
|
|
|
|
|
|
|||||||||||||
Gross acquisitions
|
$
|
1,389,500
|
|
|
$
|
20,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Acres acquired
|
1,099,800
|
|
|
11,031
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Price per acre ($/acre)
|
$
|
1,263
|
|
|
$
|
1,813
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
Represents properties owned by Dawsonville Bluffs, LLC, a joint venture in which CatchMark owns a 50% membership interest, and Triple T Joint Venture in which CatchMark owns a 21.6% equity interest. CatchMark serves as the manager for both of these joint ventures.
|
(2)
|
See
Item 7 —Management’s Discussion and Analysis of Financial Condition and Results of Operations —
Adjusted EBITDA
for the definition and information regarding why we present Adjusted EBITDA and for a reconciliation of this non-GAAP financial measure from net income (loss).
|
(3)
|
Includes transaction costs.
|
(4)
|
Includes chip-n-saw and sawtimber.
|
(5)
|
Excludes approximately 2,000 tons harvested from the Bandon Property, which generated timber sales revenue of $0.1 million. The Bandon Property was acquired at the end of August 2018. Harvest volume and timber sales revenue from the Bandon Property for as of December 31, 2018 accounted for less than 1% of our consolidated total harvest volume and total timber sales revenue.
|
(6)
|
Excludes value of timber reservations.
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
a continuation of $35.0 million five-year revolving credit facility (the “Revolving Credit Facility”);
|
•
|
a reduced $200.0 million seven-year multi-draw term credit facility (the “Multi-Draw Term Facility”);
|
•
|
a continuation of $100.0 million ten-year term loan (the “Term Loan A-1”);
|
•
|
a continuation of $100.0 million nine-year term loan (the “Term Loan A-2”);
|
•
|
a continuation of $68.6 million ten-year term loan (the “Term Loan A-3”); and
|
•
|
a new $140.0 million seven-year term loan (the "Term Loan A-4").
|
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Facility Name
|
|
Maturity Date
|
|
Interest Rate
(1)
|
|
Unused Commitment Fee
(1)
|
|
Total Availability
|
|
Outstanding Balance
|
|
Remaining Availability
|
||||||
Revolving Credit Facility
|
|
12/1/2022
|
|
LIBOR + 2.20%
|
|
0.35%
|
|
$
|
35,000
|
|
|
$
|
—
|
|
|
$
|
35,000
|
|
Multi-Draw Term Facility
|
|
12/1/2024
|
|
LIBOR + 2.20%
|
|
0.35%
|
|
200,000
|
|
|
70,000
|
|
|
$
|
130,000
|
|
||
Term Loan A-1
|
|
12/23/2024
|
|
LIBOR + 1.75%
|
|
N/A
|
|
100,000
|
|
|
100,000
|
|
|
—
|
|
|||
Term Loan A-2
|
|
12/1/2026
|
|
LIBOR + 1.90%
|
|
N/A
|
|
100,000
|
|
|
100,000
|
|
|
—
|
|
|||
Term Loan A-3
|
|
12/1/2027
|
|
LIBOR + 2.00%
|
|
N/A
|
|
68,619
|
|
|
68,619
|
|
|
—
|
|
|||
Term Loan A-4
|
|
8/22/2025
|
|
LIBOR + 1.70%
|
|
N/A
|
|
$
|
140,000
|
|
|
$
|
140,000
|
|
|
|
||
Total
|
|
|
|
|
|
|
|
$
|
643,619
|
|
|
$
|
478,619
|
|
|
$
|
165,000
|
|
(1)
|
The applicable LIBOR margin on the Revolving Credit Facility and the Multi-Draw Term Facility ranges from a base rate plus between 0.50% and 1.20% or a LIBOR rate plus 1.50% to 2.20%, depending on the LTV ratio. The unused committee fee rates also depend on the LTV ratio.
|
•
|
limit the LTV Ratio to (i)
50%
at any time prior to the last day of the fiscal quarter corresponding to December 1, 2021, and (ii)
45%
at any time thereafter;
|
•
|
require that we maintain a FCCR of not less than 1.05:1:00;
|
•
|
require maintenance of a minimum liquidity balance of no less than
$25.0 million
at any time; and
|
•
|
limit the aggregate capital expenditures to
1%
of the value of the timberlands during any fiscal year.
|
(in thousands)
|
|
Payments Due by Period
|
||||||||||||||||||
Contractual Obligations
|
|
Total
|
|
2019
|
|
2020-2021
|
|
2022-2023
|
|
Thereafter
|
||||||||||
Debt obligations
(1) (2)
|
|
$
|
478,619
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
478,619
|
|
Estimated interest on debt obligations
(1) (2)
|
|
143,020
|
|
|
20,637
|
|
|
41,297
|
|
|
40,998
|
|
|
40,088
|
|
|||||
Operating lease obligations
|
|
6,186
|
|
|
823
|
|
|
1,731
|
|
|
1,312
|
|
|
2,320
|
|
|||||
Other liabilities
(3)
|
|
548
|
|
|
140
|
|
|
280
|
|
|
128
|
|
|
—
|
|
|||||
Total
|
|
$
|
628,373
|
|
|
$
|
21,600
|
|
|
$
|
43,308
|
|
|
$
|
42,438
|
|
|
$
|
521,027
|
|
(1)
|
Represents respective obligations under our 2018 Amended Credit Agreement as of
December 31, 2018
, of which $408.6 million was outstanding under the term loans and $70.0 million was outstanding under the Multi-Draw Term Facility (see
Item 7 — Management's Discussion and Analysis of financial Condition and Results of Operations — Liquidity and Capital Resources — Credit Agreement Amendment
above).
|
(2)
|
Amounts include the impact of interest rate swaps. See
Note 6 — Interest Rate Swaps
to our accompanying consolidated financial statements for additional information.
|
(3)
|
Represents future payments to satisfy a liability that expires in May 2022 which was assumed upon a timberland acquisition.
|
Declaration Date
|
|
Record Date
|
|
Payment Date
|
|
Distribution Per Share
|
February 15, 2018
|
|
February 28, 2018
|
|
March 16, 2018
|
|
$0.135
|
May 3, 2018
|
|
May 31, 2018
|
|
June 15, 2018
|
|
$0.135
|
August 2, 2018
|
|
August 30, 2018
|
|
September 14, 2018
|
|
$0.135
|
November 1, 2018
|
|
November 30, 2018
|
|
December 13, 2018
|
|
$0.135
|
|
Years Ended December 31,
|
|
Change
|
|||||||
|
2018
|
|
2017
|
|
%
|
|||||
Timber sales volume (tons)
(1)
|
|
|
||||||||
Pulpwood
|
1,356,128
|
|
|
1,424,017
|
|
|
(5
|
)%
|
||
Sawtimber
(2)
|
816,717
|
|
|
927,191
|
|
|
(12
|
)%
|
||
|
2,172,845
|
|
|
2,351,208
|
|
|
(8
|
)%
|
||
|
|
|
|
|
|
|||||
Harvest Mix
(1)
|
|
|
||||||||
Pulpwood
|
62
|
%
|
|
61
|
%
|
|
|
|||
Sawtimber
(2)
|
38
|
%
|
|
39
|
%
|
|
|
|||
|
|
|
|
|
|
|||||
Delivered % as of total volume
|
80
|
%
|
|
74
|
%
|
|
|
|||
Stumpage % as of total volume
|
20
|
%
|
|
26
|
%
|
|
|
|||
|
|
|
|
|
|
|||||
Net timber sales price (per ton)
(1) (3)
|
|
|
||||||||
Pulpwood
|
$
|
14
|
|
|
$
|
13
|
|
|
6
|
%
|
Sawtimber
(2)
|
$
|
24
|
|
|
$
|
24
|
|
|
—
|
%
|
|
|
|
|
|
|
|||||
Timberland sales
|
|
|
|
|
|
|||||
Gross sales (000's)
|
$
|
17,520
|
|
|
$
|
14,768
|
|
|
|
|
Sales volumes (acres)
|
8,500
|
|
|
7,700
|
|
|
|
|||
% of fee acres
|
1.8
|
%
|
|
1.7
|
%
|
|
|
|||
Sales price (per acre)
(4)
|
$
|
2,064
|
|
|
$
|
1,924
|
|
|
|
|
|
|
|
|
|
|
|||||
Large Dispositions
|
|
|
|
|
|
|||||
Gross sales (000's)
|
$
|
79,301
|
|
|
$
|
—
|
|
|
|
|
Sales volumes (acres)
|
56,100
|
|
|
$
|
—
|
|
|
|
||
Sales price (per acre)
(4)
|
$
|
1,414
|
|
|
$
|
—
|
|
|
|
(1)
|
Excludes approximately 2,000 tons harvested from the Bandon Property, which generated timber sales revenue of $0.1 million. The Bandon Property was acquired at the end of August 2018. Harvest volume and timber sales revenue from the Bandon Property since acquisition accounted for less than 1% of our consolidated total harvest volume and total timber sales revenue.
|
(2)
|
Includes chip-n-saw and sawtimber.
|
(3)
|
Prices per ton are rounded to the nearest dollar and shown on a stumpage basis (i.e., net of contract logging and hauling costs) and, as such, the sum of these prices multiplied by the tons sold does not equal timber sales in the accompanying consolidated statements of operations for the years ended
December 31, 2018
, and
2017
.
|
(4)
|
Excludes value of timber reservations.
|
|
Years Ended December 31,
|
|
Change
|
|||||||
|
2017
|
|
2016
|
|
%
|
|||||
Timber sales volume (tons)
|
|
|
||||||||
Pulpwood
|
1,424,017
|
|
|
1,360,437
|
|
|
5
|
%
|
||
Sawtimber
(1)
|
927,191
|
|
|
867,055
|
|
|
7
|
%
|
||
|
2,351,208
|
|
|
2,227,492
|
|
|
6
|
%
|
||
|
|
|
|
|
|
|||||
Harvest Mix
|
|
|
||||||||
Pulpwood
|
61
|
%
|
|
61
|
%
|
|
|
|||
Sawtimber
(1)
|
39
|
%
|
|
39
|
%
|
|
|
|||
|
|
|
|
|
|
|||||
Delivered % as of total volume
|
74%
|
|
|
64
|
%
|
|
|
|||
Stumpage % as of total volume
|
26%
|
|
|
36
|
%
|
|
|
|||
|
|
|
|
|
|
|||||
Net timber sales price (per ton)
(2)
|
|
|
||||||||
Pulpwood
|
$
|
13
|
|
|
$
|
14
|
|
|
(7
|
)%
|
Sawtimber
(1)
|
$
|
24
|
|
|
$
|
24
|
|
|
—
|
%
|
|
|
|
|
|
|
|||||
Timberland sales
|
|
|
|
|
|
|||||
Gross sales (000's)
|
$
|
14,768
|
|
|
$
|
12,515
|
|
|
|
|
Sales volumes (acres)
|
7,700
|
|
|
7,300
|
|
|
|
|||
% of fee acres
|
1.7
|
%
|
|
1.7
|
%
|
|
|
|||
Sales price (per acre)
(3)
|
$
|
1,924
|
|
|
$
|
1,718
|
|
|
|
(1)
|
Includes chip-n-saw and sawtimber.
|
(2)
|
Prices per ton are rounded to the nearest dollar and shown on a stumpage basis (i.e., net of contract logging and hauling costs) and, as such, the sum of these prices multiplied by the tons sold does not equal timber sales in the accompanying consolidated statements of operations for the years ended December 31,
2017
and
2016
.
|
(3)
|
Excludes value of timber reservations.
|
|
For the Year Ended
December 31, 2017
|
|
Changes attributable to:
|
|
For the Year Ended December 31, 2018
|
||||||||||
(in thousands)
|
|
Price/Mix
|
|
Volume
(3)
|
|
||||||||||
Timber sales
(1)
|
|
|
|
|
|
|
|
||||||||
Pulpwood
|
$
|
37,432
|
|
|
$
|
933
|
|
|
$
|
(56
|
)
|
|
$
|
38,309
|
|
Sawtimber
(2)
|
33,921
|
|
|
381
|
|
|
(3,156
|
)
|
|
31,146
|
|
||||
|
$
|
71,353
|
|
|
$
|
1,314
|
|
|
$
|
(3,212
|
)
|
|
$
|
69,455
|
|
(1)
|
Timber sales are presented on a gross basis.
|
(2)
|
Includes chip-n-saw and sawtimber.
|
(3)
|
Changes in timber sales revenue related to properties acquired or disposed within the last 12 months are attributed to volume changes.
|
|
For the Year Ended
December 31, 2016
|
|
Changes attributable to:
|
|
For the Year Ended
December 31, 2017
|
||||||||||
(in thousands)
|
|
Price/Mix
|
|
Volume
(3)
|
|
||||||||||
Timber sales
(1)
|
|
|
|
|
|
|
|
||||||||
Pulpwood
|
$
|
34,969
|
|
|
$
|
(773
|
)
|
|
$
|
3,236
|
|
|
$
|
37,432
|
|
Sawtimber
(2)
|
30,066
|
|
|
1,330
|
|
|
2,525
|
|
|
33,921
|
|
||||
|
$
|
65,035
|
|
|
$
|
557
|
|
|
$
|
5,761
|
|
|
$
|
71,353
|
|
(1)
|
Timber sales are presented on a gross basis.
|
(2)
|
Includes chip-n-saw and sawtimber.
|
(3)
|
Changes in timber sales revenue related to properties acquired or disposed within the last 12 months are attributed to volume change.
|
•
|
Adjusted EBITDA does not reflect our capital expenditures, or our future requirements for capital expenditures;
|
•
|
Adjusted EBITDA does not reflect changes in, or our interest expense or the cash requirements necessary to service interest or principal payments on, our debt;
|
•
|
Although depletion is a non-cash charge, we will incur expenses to replace the timber being depleted in the future, and Adjusted EBITDA does not reflect all cash requirements for such expenses; and
|
•
|
Although HLBV income and losses are primarily hypothetical and non-cash in nature, Adjusted EBITDA does not reflect cash income or losses from unconsolidated joint ventures for which we use the HLBV method of accounting to determine our equity in earnings.
|
(in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Net loss
|
$
|
(122,007
|
)
|
|
$
|
(13,510
|
)
|
|
$
|
(11,070
|
)
|
Add:
|
|
|
|
|
|
||||||
Depletion
|
25,912
|
|
|
29,035
|
|
|
28,897
|
|
|||
Basis of timberland sold, lease terminations and other
(1)
|
13,053
|
|
|
10,112
|
|
|
10,089
|
|
|||
Amortization
(2)
|
2,821
|
|
|
1,270
|
|
|
1,093
|
|
|||
Depletion, amortization, and basis of timberland and mitigation credits sold included in loss from unconsolidated joint venture
(3)
|
4,195
|
|
|
865
|
|
|
—
|
|
|||
HLBV loss from unconsolidated joint venture
(4)
|
109,550
|
|
|
—
|
|
|
—
|
|
|||
Stock-based compensation expense
|
2,689
|
|
|
2,786
|
|
|
1,724
|
|
|||
Interest expense
(2)
|
13,643
|
|
|
10,093
|
|
|
5,753
|
|
|||
(Gain) loss from large dispositions
(5)
|
390
|
|
|
—
|
|
|
—
|
|
|||
Other
(6)
|
(460
|
)
|
|
1,319
|
|
|
322
|
|
|||
Adjusted EBITDA
|
$
|
49,786
|
|
|
$
|
41,970
|
|
|
$
|
36,808
|
|
(1)
|
Includes non-cash basis of timber and timberland assets written-off related to timberland sold, terminations of timberland leases and casualty losses.
|
(2)
|
For the purpose of the above reconciliation, amortization includes amortization of deferred financing costs, amortization of intangible lease assets, and amortization of mainline road costs, which are included in either interest expense, land rent expense, or other operating expenses in the accompanying consolidated statements of operations.
|
(3)
|
Reflects our share of depletion, amortization, and basis of timberland and mitigation credits sold of the unconsolidated Dawsonville Bluffs Joint Venture.
|
(4)
|
Reflects HLBV (income) losses from the Triple T Joint Venture, which is determined based on a hypothetical liquidation of the underlying joint venture at book value as of the reporting date.
|
(5)
|
Large dispositions are defined as larger transactions in acreage and gross sales price than recurring HBU sales. Large dispositions are not part of core operations, are infrequent in nature and would cause material variances in comparative results if not reported separately. Large dispositions may or may not have a higher or better use than timber production or result in a price premium above the land’s timber production value.
|
(6)
|
Includes certain cash expenses paid, or reimbursement received, that management believes do not directly reflect the core business operations of our timberland portfolio on an on-going basis, including costs required to be expensed by GAAP related to acquisitions, transactions, joint ventures or new business initiatives.
|
•
|
Mahrt Timber Agreements;
|
•
|
Timberland operating agreements;
|
•
|
Obligations under operating leases; and
|
•
|
Litigation.
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
||
Interest Rate Swap
|
|
Effective Date
|
|
Maturity Date
|
|
Pay Rate
|
|
Receive Rate
|
|
Notional Amount
|
||
2017 Swap - 3YR
|
|
3/28/2017
|
|
3/28/2020
|
|
1.800%
|
|
one-month LIBOR
|
|
$
|
30,000
|
|
2018 Swap - 2YR
|
|
9/6/2018
|
|
9/6/2020
|
|
2.796%
|
|
one-month LIBOR
|
|
$
|
50,000
|
|
2018 Swap - 3YR
|
|
9/6/2018
|
|
9/6/2021
|
|
2.869%
|
|
one-month LIBOR
|
|
$
|
50,000
|
|
2017 Swap - 4YR
|
|
3/28/2017
|
|
11/28/2021
|
|
2.045%
|
|
one-month LIBOR
|
|
$
|
20,000
|
|
2018 Swap - 4YR
|
|
2/28/2018
|
|
11/28/2022
|
|
2.703%
|
|
one-month LIBOR
|
|
$
|
30,000
|
|
2017 Swap - 7YR
|
|
3/23/2017
|
|
3/23/2024
|
|
2.330%
|
|
one-month LIBOR
|
|
$
|
20,000
|
|
2014 Swap - 10YR
|
|
12/23/2014
|
|
12/23/2024
|
|
2.395%
|
|
one-month LIBOR
|
|
$
|
35,000
|
|
2016 Swap - 8YR
|
|
8/23/2016
|
|
12/23/2024
|
|
1.280%
|
|
one-month LIBOR
|
|
$
|
45,000
|
|
2018 Swap - 8YR
|
|
2/28/2018
|
|
11/28/2026
|
|
2.884%
|
|
one-month LIBOR
|
|
$
|
20,000
|
|
2018 Swap - 9YR
|
|
8/28/2018
|
|
8/28/2027
|
|
3.014%
|
|
one-month LIBOR
|
|
$
|
50,000
|
|
Total
|
|
|
|
|
|
|
|
|
|
$
|
350,000
|
|
|
|
Expected Maturity Date
|
|
|
||||||||||||||||||||||||
(dollars in thousands)
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
|
Total
|
||||||||||||||
Maturing debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Variable-rate debt
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
128,619
|
|
|
$
|
128,619
|
|
Effectively fixed-rate debt
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
350,000
|
|
|
$
|
350,000
|
|
Average interest rate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Variable-rate debt
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
4.46
|
%
|
|
4.46
|
%
|
|||||||
Effectively fixed-rate debt
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
4.26
|
%
|
|
4.26
|
%
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
|
•
|
"Your Board of Directors — Proposal No. 1: Election of Directors — Director Nominees,"
|
•
|
"Your Board of Directors — Board Committees — Audit Committee."
|
•
|
"Stock Ownership", and
|
•
|
"Corporate Governance — Code of Business Conduct and Ethics."
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
•
|
"Executive Compensation — Report of the Compensation Committee,"
|
•
|
"Executive Compensation — Compensation Discussion and Analysis," and
|
•
|
"Executive Compensation — Summary of Executive Compensation."
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
•
|
"Executive Compensation — Summary of Executive Compensation," and
|
•
|
"Stock Ownership."
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTION, AND DIRECTOR INDEPENDENCE
|
•
|
"Corporate Governance — Related Person Transactions Policy," and
|
•
|
"Corporate Governance — Director Independence."
|
ITEM 14
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
Financial Statements
|
|
Page
|
|
|
|
Reports of Independent Registered Public Accounting Firm
|
|
|
|
|
|
Consolidated Balance Sheets as of December 31, 2018 and 2017
|
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
Exhibit
Number
|
|
Description
|
|
|
|
2.1
|
|
|
|
|
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
3.3
|
|
|
|
|
|
3.4
|
|
|
|
|
|
Exhibit
Number
|
|
Description
|
|
|
|
3.5
|
|
|
|
|
|
3.6
|
|
|
|
|
|
10.1*
|
|
|
|
|
|
10.2
+
|
|
|
|
|
|
10.3
+*
|
|
|
|
|
|
10.4
+
|
|
|
|
|
|
10.5
+*
|
|
|
|
|
|
10.6
+
|
|
|
|
|
|
10.7
+
|
|
|
10.8
+
|
|
|
|
|
|
10.9
+
|
|
|
|
|
|
10.10
+*
|
|
|
|
|
|
10.11
+*
|
|
|
|
|
|
10.12
+*
|
|
|
|
|
|
10.13
+*
|
|
|
|
|
|
10.14
+*
|
|
|
|
|
|
10.15
+*
|
|
|
|
|
|
10.16
+
|
|
|
|
|
|
10.17
+*
|
|
|
|
|
|
10.18
+
|
|
|
|
|
|
Exhibit
Number |
|
Description
|
|
|
|
10.31*^
|
|
|
|
|
|
10.32*
|
|
|
|
|
|
10.33
|
|
|
|
|
|
10.34*
|
|
|
|
|
|
10.35*
|
|
|
|
|
|
10.36*
|
|
|
|
|
|
10.37
|
|
|
|
|
|
10.38*
|
|
|
|
|
|
10.39*
|
|
|
|
|
|
10.40*
|
|
|
|
|
|
10.41
|
|
|
|
|
|
10.42*
|
|
|
|
|
|
10.43*
|
|
|
|
|
|
10.44*
|
|
|
|
|
|
10.45^
|
|
|
|
|
|
10.46^
|
|
|
|
|
|
21.1*
|
|
|
|
|
|
23.1*
|
|
|
|
|
|
23.2*
|
|
|
|
|
|
31.1*
|
|
|
|
|
|
Exhibit
Number |
|
Description
|
|
|
|
31.2*
|
|
|
|
|
|
32.1*
|
|
|
|
|
|
99.1*
|
|
|
|
|
|
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
|
|
|
|
*
|
|
Filed herewith.
|
+
|
|
Management contract or compensatory plan or arrangement.
|
^
|
|
Confidential treatment requested as to portions of the exhibit. Confidential materials omitted and filed separately with the SEC.
|
ITEM 16.
|
FORM 10-K SUMMARY
|
|
|
CATCHMARK TIMBER TRUST, INC.
(Registrant)
|
||
|
|
|
|
|
Date:
|
March 1, 2019
|
By:
|
|
/s/ JERRY BARAG
|
|
|
|
|
Jerry Barag
Chief Executive Officer, President, and Director
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/S/ JERRY BARAG
|
|
Chief Executive Officer, President, and Director
|
|
March 1, 2019
|
Jerry Barag
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/S/ BRIAN M. DAVIS
|
|
Senior Vice President and Chief Financial Officer
|
|
March 1, 2019
|
Brian M. Davis
|
|
(Principal Financial Officer and Principal Accounting Officer)
|
|
|
|
|
|
|
|
/S/ WILLIS J. POTTS, JR.
|
|
Chairman of the Board
|
|
March 1, 2019
|
Willis J. Potts, Jr.
|
|
|
|
|
|
|
|
|
|
/S/ DONALD S. MOSS
|
|
Independent Director
|
|
March 1, 2019
|
Donald S. Moss
|
|
|
|
|
|
|
|
|
|
/S/ DOUGLAS D. RUBENSTEIN
|
|
Independent Director
|
|
March 1, 2019
|
Douglas D. Rubenstein
|
|
|
|
|
|
|
|
|
|
/S/ HENRY G. ZIGTEMA
|
|
Independent Director
|
|
March 1, 2019
|
Henry G. Zigtema
|
|
|
|
|
|
|
|
|
|
/S/ PAUL S. FISHER
|
|
Independent Director
|
|
March 1, 2019
|
Paul S. Fisher
|
|
|
|
|
|
|
|
|
|
/S/ MARY E. MCBRIDE
|
|
Independent Director
|
|
March 1, 2019
|
Mary E. McBride
|
|
|
|
|
|
|
|
|
|
Financial Statements
|
|
Page
|
|
|
|
Reports of Independent Registered Public Accounting Firm
|
|
|
|
|
|
Consolidated Balance Sheets as of December 31, 2018 and 2017
|
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
5,614
|
|
|
$
|
7,805
|
|
Accounts receivable
|
7,355
|
|
|
4,575
|
|
||
Prepaid expenses and other assets
|
7,369
|
|
|
5,436
|
|
||
Deferred financing costs
|
327
|
|
|
403
|
|
||
Timber assets (Note 3):
|
|
|
|
||||
Timber and timberlands, net
|
687,851
|
|
|
710,246
|
|
||
Intangible lease assets, less accumulated amortization of $945 and $941 as of December 31, 2018 and 2017, respectively
|
12
|
|
|
16
|
|
||
Investments in unconsolidated joint ventures (Note 4)
|
96,244
|
|
|
11,677
|
|
||
Total assets
|
$
|
804,772
|
|
|
$
|
740,158
|
|
|
|
|
|
||||
Liabilities:
|
|
|
|
||||
Accounts payable and accrued expenses
|
$
|
4,936
|
|
|
$
|
4,721
|
|
Other liabilities
|
5,940
|
|
|
2,969
|
|
||
Notes payable and lines of credit, less net deferred financing costs (Note 5)
|
472,240
|
|
|
330,088
|
|
||
Total liabilities
|
483,116
|
|
|
337,778
|
|
||
|
|
|
|
||||
Commitments and Contingencies (Note 7)
|
—
|
|
|
—
|
|
||
|
|
|
|
||||
Stockholders’ Equity:
|
|
|
|
||||
Class A common stock, $0.01 par value; 900,000 shares authorized; 49,127 and 43,425 shares issued and outstanding as of December 31, 2018 and 2017, respectively
|
492
|
|
|
434
|
|
||
Additional paid-in capital
|
730,416
|
|
|
661,222
|
|
||
Accumulated deficit and distributions
|
(409,260
|
)
|
|
(261,652
|
)
|
||
Accumulated other comprehensive income
|
8
|
|
|
2,376
|
|
||
Total stockholders’ equity
|
321,656
|
|
|
402,380
|
|
||
Total liabilities and stockholders’ equity
|
$
|
804,772
|
|
|
$
|
740,158
|
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Timber sales
|
$
|
69,455
|
|
|
$
|
71,353
|
|
|
$
|
65,035
|
|
Timberland sales
|
17,520
|
|
|
14,768
|
|
|
12,515
|
|
|||
Asset management fees
|
5,603
|
|
|
108
|
|
|
—
|
|
|||
Other revenues
|
5,279
|
|
|
5,066
|
|
|
4,305
|
|
|||
|
97,857
|
|
|
91,295
|
|
|
81,855
|
|
|||
Expenses:
|
|
|
|
|
|
||||||
Contract logging and hauling costs
|
31,469
|
|
|
31,108
|
|
|
25,918
|
|
|||
Depletion
|
25,912
|
|
|
29,035
|
|
|
28,897
|
|
|||
Cost of timberland sales
|
13,512
|
|
|
10,423
|
|
|
10,405
|
|
|||
Forestry management expenses
|
6,283
|
|
|
6,758
|
|
|
6,092
|
|
|||
General and administrative expenses
|
12,425
|
|
|
11,660
|
|
|
9,309
|
|
|||
Land rent expense
|
660
|
|
|
621
|
|
|
625
|
|
|||
Other operating expenses
|
6,303
|
|
|
5,264
|
|
|
5,017
|
|
|||
|
96,564
|
|
|
94,869
|
|
|
86,263
|
|
|||
Operating income (loss)
|
1,293
|
|
|
(3,574
|
)
|
|
(4,408
|
)
|
|||
|
|
|
|
|
|
||||||
Other income (expense):
|
|
|
|
|
|
||||||
Interest income
|
262
|
|
|
113
|
|
|
44
|
|
|||
Interest expense
|
(16,255
|
)
|
|
(11,187
|
)
|
|
(6,706
|
)
|
|||
|
(15,993
|
)
|
|
(11,074
|
)
|
|
(6,662
|
)
|
|||
|
|
|
|
|
|
||||||
Loss before large dispositions and joint ventures
|
(14,700
|
)
|
|
(14,648
|
)
|
|
(11,070
|
)
|
|||
Gain (loss) on large dispositions
|
(390
|
)
|
|
—
|
|
|
—
|
|
|||
Income (loss) from unconsolidated joint ventures
|
(106,917
|
)
|
|
1,138
|
|
|
—
|
|
|||
Net loss
|
$
|
(122,007
|
)
|
|
$
|
(13,510
|
)
|
|
$
|
(11,070
|
)
|
|
|
|
|
|
|
||||||
Weighted-average common shares outstanding
—basic and diluted |
47,937
|
|
|
39,751
|
|
|
38,830
|
|
|||
|
|
|
|
|
|
||||||
Net loss per share - basic and diluted
|
$
|
(2.55
|
)
|
|
$
|
(0.34
|
)
|
|
$
|
(0.29
|
)
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net loss
|
$
|
(122,007
|
)
|
|
$
|
(13,510
|
)
|
|
$
|
(11,070
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Market value adjustment to interest rate swaps
|
(2,368
|
)
|
|
629
|
|
|
3,167
|
|
|||
Comprehensive loss
|
$
|
(124,375
|
)
|
|
$
|
(12,881
|
)
|
|
$
|
(7,903
|
)
|
|
Class A
Common Stock |
|
Additional
Paid-In Capital |
|
Accumulated
Deficit and Distributions |
|
Accumulated Other Comprehensive Income (Loss)
|
|
Total
Stockholders’ Equity |
|||||||||||||
|
Shares
|
|
Amount
|
|
|
|||||||||||||||||
Balance, December 31, 2015
|
38,975
|
|
|
$
|
390
|
|
|
$
|
607,409
|
|
|
$
|
(195,341
|
)
|
|
$
|
(1,420
|
)
|
|
$
|
411,038
|
|
Issuance of common stock pursuant to:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
LTIP, net of forfeitures and amounts withheld for income taxes
|
131
|
|
|
1
|
|
|
1,524
|
|
|
—
|
|
|
$
|
—
|
|
|
1,525
|
|
||||
Dividends on common stock ($0.53 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(20,382
|
)
|
|
$
|
—
|
|
|
(20,382
|
)
|
||||
Repurchase of common stock
|
(309
|
)
|
|
(3
|
)
|
|
(3,205
|
)
|
|
—
|
|
|
$
|
—
|
|
|
(3,208
|
)
|
||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,070
|
)
|
|
—
|
|
|
(11,070
|
)
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,167
|
|
|
3,167
|
|
|||||
Balance, December 31, 2016
|
38,797
|
|
|
$
|
388
|
|
|
$
|
605,728
|
|
|
$
|
(226,793
|
)
|
|
$
|
1,747
|
|
|
$
|
381,070
|
|
Issuance of common stock pursuant to:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Equity offering
|
4,600
|
|
|
46
|
|
|
56,764
|
|
|
—
|
|
|
—
|
|
|
56,810
|
|
|||||
LTIP, net of forfeitures and amounts withheld for income taxes
|
125
|
|
|
1
|
|
|
2,474
|
|
|
—
|
|
|
—
|
|
|
2,475
|
|
|||||
Stock issuance cost
|
|
|
|
|
(2,709
|
)
|
|
|
|
|
|
(2,709
|
)
|
|||||||||
Dividends on common stock ($0.54 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(21,349
|
)
|
|
—
|
|
|
(21,349
|
)
|
|||||
Repurchase of common stock
|
(97
|
)
|
|
(1
|
)
|
|
(1,035
|
)
|
|
—
|
|
|
—
|
|
|
(1,036
|
)
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,510
|
)
|
|
—
|
|
|
(13,510
|
)
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
629
|
|
|
629
|
|
|||||
Balance, December 31, 2017
|
43,425
|
|
|
$
|
434
|
|
|
$
|
661,222
|
|
|
$
|
(261,652
|
)
|
|
$
|
2,376
|
|
|
$
|
402,380
|
|
Issuance of common stock pursuant to:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Equity offering
|
5,750
|
|
|
58
|
|
|
72,392
|
|
|
—
|
|
|
—
|
|
|
72,450
|
|
|||||
LTIP, net of forfeitures and amounts withheld for income taxes
|
50
|
|
|
1
|
|
|
1,341
|
|
|
—
|
|
|
—
|
|
|
1,342
|
|
|||||
Stock issuance cost
|
—
|
|
|
—
|
|
|
(3,537
|
)
|
|
—
|
|
|
—
|
|
|
(3,537
|
)
|
|||||
Dividends on common stock ($0.54 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(25,601
|
)
|
|
—
|
|
|
(25,601
|
)
|
|||||
Repurchase of common stock
|
(98
|
)
|
|
(1
|
)
|
|
(1,002
|
)
|
|
—
|
|
|
—
|
|
|
(1,003
|
)
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(122,007
|
)
|
|
—
|
|
|
(122,007
|
)
|
|||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,368
|
)
|
|
(2,368
|
)
|
|||||
Balance, December 31, 2018
|
49,127
|
|
|
$
|
492
|
|
|
$
|
730,416
|
|
|
$
|
(409,260
|
)
|
|
$
|
8
|
|
|
$
|
321,656
|
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Cash Flows from Operating Activities:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(122,007
|
)
|
|
$
|
(13,510
|
)
|
|
$
|
(11,070
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depletion
|
25,912
|
|
|
29,035
|
|
|
28,897
|
|
|||
Basis of timberland sold, lease terminations and other
|
13,053
|
|
|
10,112
|
|
|
10,089
|
|
|||
Stock-based compensation expense
|
2,689
|
|
|
2,786
|
|
|
1,724
|
|
|||
Noncash interest expense
|
2,612
|
|
|
1,094
|
|
|
954
|
|
|||
Other amortization
|
210
|
|
|
176
|
|
|
139
|
|
|||
Loss (income) from unconsolidated joint ventures
|
106,917
|
|
|
(1,138
|
)
|
|
—
|
|
|||
Operating distributions from unconsolidated joint ventures
|
3,771
|
|
|
—
|
|
|
—
|
|
|||
Loss from large dispositions
|
390
|
|
|
—
|
|
|
—
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
(3,449
|
)
|
|
(1,208
|
)
|
|
(1,201
|
)
|
|||
Prepaid expenses and other assets
|
(260
|
)
|
|
160
|
|
|
(224
|
)
|
|||
Accounts payable and accrued expenses
|
122
|
|
|
279
|
|
|
1,141
|
|
|||
Other liabilities
|
(164
|
)
|
|
(367
|
)
|
|
400
|
|
|||
Net cash provided by operating activities
|
29,796
|
|
|
27,419
|
|
|
30,849
|
|
|||
|
|
|
|
|
|
||||||
Cash Flows from Investing Activities:
|
|
|
|
|
|
||||||
Timberland acquisitions and earnest money paid
|
(91,821
|
)
|
|
(52,260
|
)
|
|
(141,570
|
)
|
|||
Capital expenditures (excluding timberland acquisitions)
|
(4,571
|
)
|
|
(5,617
|
)
|
|
(3,195
|
)
|
|||
Investment in unconsolidated joint ventures
|
(200,000
|
)
|
|
(10,539
|
)
|
|
—
|
|
|||
Distributions from unconsolidated joint ventures
|
4,744
|
|
|
—
|
|
|
—
|
|
|||
Net proceeds from large dispositions
|
79,134
|
|
|
—
|
|
|
—
|
|
|||
Net cash used in investing activities
|
(212,514
|
)
|
|
(68,416
|
)
|
|
(144,765
|
)
|
|||
|
|
|
|
|
|
||||||
Cash Flows from Financing Activities:
|
|
|
|
|
|
||||||
Proceeds from notes payable
|
289,000
|
|
|
304,119
|
|
|
143,500
|
|
|||
Repayment of notes payable
|
(148,000
|
)
|
|
(292,156
|
)
|
|
(2,846
|
)
|
|||
Financing costs paid
|
(1,434
|
)
|
|
(3,674
|
)
|
|
(1,866
|
)
|
|||
Issuance of common stock
|
72,450
|
|
|
56,810
|
|
|
—
|
|
|||
Dividends paid to common stockholders
|
(25,601
|
)
|
|
(21,349
|
)
|
|
(20,382
|
)
|
|||
Repurchase of common shares under the share repurchase program
|
(1,003
|
)
|
|
(1,036
|
)
|
|
(3,208
|
)
|
|||
Repurchase of common shares for minimum tax withholdings
|
(1,348
|
)
|
|
(311
|
)
|
|
(199
|
)
|
|||
Other offering costs paid
|
(3,537
|
)
|
|
(2,709
|
)
|
|
—
|
|
|||
Net cash provided by financing activities
|
180,527
|
|
|
39,694
|
|
|
114,999
|
|
|||
Net change in cash and cash equivalents
|
(2,191
|
)
|
|
(1,303
|
)
|
|
1,083
|
|
|||
Cash and cash equivalents, beginning of period
|
7,805
|
|
|
9,108
|
|
|
8,025
|
|
|||
Cash and cash equivalents, end of period
|
$
|
5,614
|
|
|
$
|
7,805
|
|
|
$
|
9,108
|
|
1.
|
Organization
|
3.
|
Timber Assets
|
|
As of December 31, 2018
|
||||||||||
(in thousands)
|
Gross
|
|
Accumulated
Depletion or
Amortization
|
|
Net
|
||||||
Timber
|
$
|
345,972
|
|
|
$
|
25,912
|
|
|
$
|
320,060
|
|
Timberlands
|
367,488
|
|
|
—
|
|
|
367,488
|
|
|||
Mainline roads
|
954
|
|
|
651
|
|
|
303
|
|
|||
Timber and timberlands
|
$
|
714,414
|
|
|
$
|
26,563
|
|
|
$
|
687,851
|
|
|
As of December 31, 2017
|
||||||||||
(in thousands)
|
Gross
|
|
Accumulated
Depletion or
Amortization
|
|
Net
|
||||||
Timber
|
$
|
332,253
|
|
|
$
|
29,035
|
|
|
$
|
303,218
|
|
Timberlands
|
406,284
|
|
|
—
|
|
|
406,284
|
|
|||
Mainline roads
|
1,349
|
|
|
604
|
|
|
744
|
|
|||
Timber and timberlands
|
$
|
739,886
|
|
|
$
|
29,639
|
|
|
$
|
710,246
|
|
Acres Acquired In
(1)
:
|
|
2018
|
|
2017
|
|
2016
(2)
|
|||
South
|
|
|
|
|
|
|
|||
Alabama
|
|
—
|
|
|
—
|
|
|
4,500
|
|
Georgia
|
|
—
|
|
|
15,000
|
|
|
13,500
|
|
South Carolina
|
|
—
|
|
|
4,600
|
|
|
63,900
|
|
|
|
—
|
|
|
19,600
|
|
|
81,900
|
|
Pacific Northwest
|
|
|
|
|
|
|
|||
Oregon
|
|
18,100
|
|
|
—
|
|
|
—
|
|
Total
|
|
18,100
|
|
|
19,600
|
|
|
81,900
|
|
Acres Sold In:
|
|
2018
|
|
2017
|
|
2016
|
|||
South
|
|
|
|
|
|
|
|||
Alabama
|
|
1,500
|
|
|
2,300
|
|
|
600
|
|
Florida
|
|
—
|
|
|
—
|
|
|
600
|
|
Georgia
|
|
2,300
|
|
|
5,000
|
|
|
6,100
|
|
Louisiana
|
|
20,900
|
|
|
400
|
|
|
—
|
|
North Carolina
|
|
1,000
|
|
|
—
|
|
|
—
|
|
South Carolina
|
|
3,300
|
|
|
—
|
|
|
—
|
|
Texas
|
|
35,600
|
|
|
—
|
|
|
—
|
|
Total
|
|
64,600
|
|
|
7,700
|
|
|
7,300
|
|
Acres by state as of December 31, 2018
(1)
|
|
Fee
|
|
Lease
|
|
Total
|
|||
South
|
|
|
|
|
|
|
|||
Alabama
|
|
72,900
|
|
|
5,300
|
|
|
78,200
|
|
Florida
|
|
2,000
|
|
|
—
|
|
|
2,000
|
|
Georgia
|
|
261,300
|
|
|
24,900
|
|
|
286,200
|
|
North Carolina
|
|
600
|
|
|
—
|
|
|
600
|
|
South Carolina
|
|
77,700
|
|
|
—
|
|
|
77,700
|
|
Tennessee
|
|
300
|
|
|
—
|
|
|
300
|
|
|
|
414,800
|
|
|
30,200
|
|
|
445,000
|
|
Pacific Northwest
|
|
|
|
|
|
|
|||
Oregon
|
|
18,100
|
|
|
—
|
|
|
18,100
|
|
Total:
|
|
432,900
|
|
|
30,200
|
|
|
463,100
|
|
|
As of December 31, 2018
|
||||
|
Dawsonville Bluffs Joint Venture
|
|
Triple T Joint Venture
|
||
Ownership percentage
|
50.0%
|
|
21.6
|
%
|
(1)
|
Acreage owned by the joint venture
|
5,000
|
|
1,099,800
|
|
|
Merchantable timber inventory (million tons)
|
0.3
|
|
42.9
|
|
(2)
|
Location
|
Georgia
|
|
Texas
|
|
|
|
As of
|
||
(in thousands)
|
December 31, 2018
|
||
Triple T Joint Venture:
|
|
||
Total assets
|
$
|
1,607,413
|
|
Total liabilities
|
$
|
754,610
|
|
Total equity
|
$
|
852,803
|
|
CatchMark:
|
|
||
Carrying value of investment
|
$
|
90,450
|
|
|
From Inception through
|
||
(in thousands)
|
December 31, 2018
|
||
Triple T Joint Venture:
|
|
||
Total revenues
|
$
|
56,977
|
|
Operating loss
|
$
|
(7,900
|
)
|
Net loss
|
$
|
(20,646
|
)
|
CatchMark:
|
|
||
Equity share of net loss
|
$
|
(109,550
|
)
|
|
From Inception through
|
||
(in thousands)
|
December 31, 2018
|
||
Triple T Joint Venture:
|
|
||
Net cash used in operating activities
|
$
|
(8,982
|
)
|
Net cash used in investing activities
|
$
|
(1,413,082
|
)
|
Net cash provided by financing activities
|
$
|
1,461,364
|
|
Net change in cash and cash equivalents
|
$
|
39,300
|
|
Cash and cash equivalents, beginning of period
|
$
|
—
|
|
Cash and cash equivalents, end of period
|
$
|
39,300
|
|
(in thousands)
|
|
|
||||
Triple T Joint Venture:
|
|
|
||||
Total equity as of December 31, 2018
|
|
$
|
852,803
|
|
||
Preferred Investors:
|
|
|
||||
Equity in Triple T Joint Venture, beginning balance
|
$
|
725,866
|
|
|
||
Minimum preferred return as of December 31, 2018
|
$
|
36,487
|
|
|
||
HLBV distribution as of December 31, 2018
|
|
$
|
762,353
|
|
||
CatchMark:
|
|
|
||||
Equity in Triple T Joint Venture as of December 31, 2018
|
|
$
|
90,450
|
|
||
Equity in Triple T Joint Venture, beginning balance
|
|
$
|
200,000
|
|
||
Equity share of Triple T Joint Venture's net loss
|
|
$
|
(109,550
|
)
|
|
Year Ended December 31,
|
||||||
(in thousands)
|
2018
|
|
2017
|
||||
Dawsonville Bluffs Joint Venture:
|
|
|
|
||||
Total assets
|
$
|
12,164
|
|
|
$
|
24,014
|
|
Total liabilities
|
$
|
575
|
|
|
$
|
660
|
|
Total equity
|
$
|
11,589
|
|
|
$
|
23,354
|
|
CatchMark:
|
|
|
|
||||
Carrying value of investment
|
$
|
5,795
|
|
|
$
|
11,677
|
|
|
Year Ended December 31,
|
||||||
(in thousands)
|
2018
|
|
2017
|
||||
Dawsonville Bluffs Joint Venture:
|
|
|
|
||||
Total Revenues
|
$
|
14,852
|
|
|
$
|
4,886
|
|
Net Income
|
$
|
5,267
|
|
|
$
|
2,275
|
|
CatchMark:
|
|
|
|
||||
Equity share of net income (loss)
|
$
|
2,634
|
|
|
$
|
1,138
|
|
|
Year Ended December 31,
|
||||||
(in thousands)
|
2018
|
|
2017
|
||||
Dawsonville Joint Venture:
|
|
|
|
||||
Net cash provided by operating activities
|
$
|
13,388
|
|
|
$
|
4,645
|
|
Net cash used in investing activities
|
$
|
—
|
|
|
$
|
(20,348
|
)
|
Net cash (used in) provided by financing activities
|
$
|
(17,032
|
)
|
|
$
|
21,078
|
|
Net change in cash and cash equivalents
|
$
|
(3,644
|
)
|
|
$
|
5,375
|
|
Cash and cash equivalents, beginning of period
|
$
|
5,375
|
|
|
$
|
—
|
|
Cash and cash equivalents, end of period
|
$
|
1,731
|
|
|
$
|
5,375
|
|
(in thousands)
|
2018
|
|
2017
|
||||
Triple T Joint Venture
(1)
|
$
|
5,496
|
|
|
$
|
—
|
|
Dawsonville Bluffs Joint Venture
|
$
|
107
|
|
|
$
|
108
|
|
|
$
|
5,603
|
|
|
$
|
108
|
|
(1)
|
Includes approximately
$0.2
million of reimbursements of compensation costs for the year ended December 31, 2018.
|
5.
|
Notes Payable and Lines of Credit
|
(in thousands)
|
|
Maturity Date
|
|
|
|
Current Interest Rate
(1)
|
|
Outstanding Balance As of December 31,
|
||||||
Credit Facility
|
|
|
Interest Rate
|
|
|
2018
|
|
2017
|
||||||
Term Loan A-1
|
|
12/23/2024
|
|
LIBOR + 1.75%
|
|
4.25%
|
|
$
|
100,000
|
|
|
$
|
100,000
|
|
Term Loan A-2
|
|
12/01/2026
|
|
LIBOR + 1.90%
|
|
4.41%
|
|
100,000
|
|
|
118,809
|
|
||
Term Loan A-3
|
|
12/01/2027
|
|
LIBOR + 2.00%
|
|
4.51%
|
|
68,619
|
|
|
118,810
|
|
||
Term Loan A-4
|
|
08/22/2025
|
|
LIBOR + 1.70%
|
|
4.09%
|
|
140,000
|
|
|
—
|
|
||
Multi-Draw Term Facility
|
|
12/01/2024
|
|
LIBOR + 2.20%
|
|
4.65%
|
|
70,000
|
|
|
—
|
|
||
Total Principal Balance
|
|
|
|
|
|
|
|
$
|
478,619
|
|
|
$
|
337,619
|
|
Less: Net Unamortized Deferred Financing Costs
|
|
|
|
|
|
$
|
(6,379
|
)
|
|
$
|
(7,531
|
)
|
||
Total
|
|
|
|
|
|
|
|
$
|
472,240
|
|
|
$
|
330,088
|
|
(1)
|
Represents weighted-average interest rate as of December 31, 2018. The weighted-average interest rate excludes the impact of interest rate swaps (see
Note 6
— Interest Rate Swaps
), amortization of deferred financing costs, unused commitment fees, and estimated patronage refunds.
|
•
|
a continuation of a
$35.0 million
five
-year revolving credit facility (the “Revolving Credit Facility”);
|
•
|
a reduced
$200.0 million
seven
-year multi-draw term credit facility (the “Multi-Draw Term Facility”);
|
•
|
a continuation of a
$100.0 million
ten
-year term loan (the “Term Loan A-1”);
|
•
|
a continuation of a
$100.0 million
nine
-year term loan (the “Term Loan A-2”);
|
•
|
a continuation of a
$68.6 million
ten
-year term loan (the “Term Loan A-3”); and
|
•
|
a new
$140.0 million
seven
-year term loan (the "Term Loan A-4").
|
(in thousands)
|
As of
|
||||||
Patronage refunds classified as:
|
December 31, 2018
|
|
December 31, 2017
|
||||
Accounts receivable
|
$
|
3,323
|
|
|
$
|
2,694
|
|
Prepaid expenses and other assets
(1)
|
1,499
|
|
|
831
|
|
||
Total
|
$
|
4,822
|
|
|
$
|
3,525
|
|
•
|
limit the LTV Ratio to (i)
50%
at any time prior to the last day of the fiscal quarter corresponding to December 1, 2021, and (ii)
45%
at any time thereafter;
|
•
|
require maintenance of a FCCR of not less than 1.05:1; and
|
•
|
require maintenance of a minimum liquidity balance of no less than
$25.0 million
at any time; and
|
•
|
limit the aggregated capital expenditures to
1%
of the value of the timberlands during any fiscal year.
|
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Cash paid for interest
|
|
$
|
15,816
|
|
|
$
|
11,412
|
|
|
$
|
7,119
|
|
(in thousands)
|
|
|
|
Estimated Fair Value
as of December 31,
|
||||||
Instrument Type
|
|
Balance Sheet Classification
|
|
2018
|
|
2017
|
||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
||||
Interest rate swaps
|
|
Prepaid expenses and other assets
|
|
$
|
3,643
|
|
|
$
|
2,935
|
|
Interest rate swaps
|
|
Other liabilities
|
|
$
|
(3,635
|
)
|
|
$
|
(559
|
)
|
(in thousands)
|
Required Payments
|
||
2019
|
$
|
511
|
|
2020
|
511
|
|
|
2021
|
511
|
|
|
2022
|
453
|
|
|
2023 and thereafter
|
—
|
|
|
|
$
|
1,986
|
|
(in thousands)
|
Required Payments
|
||
2019
|
$
|
312
|
|
2020
|
397
|
|
|
2021
|
412
|
|
|
2022
|
424
|
|
|
2023
|
435
|
|
|
Thereafter
|
2,320
|
|
|
|
$
|
4,300
|
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Total Cash Distributions per Common Share
|
|
$
|
0.54
|
|
|
$
|
0.54
|
|
|
$
|
0.53
|
|
|
|
|
|
|
|
|
||||||
Tax Characterization
|
|
|
|
|
|
|
||||||
Capital Gain
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Return of Capital
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
(dollars in thousands, except for per share amounts)
|
2018
|
|
2017
|
|
2016
|
||||||
Fully-vested shares granted
|
26,568
|
|
|
24,412
|
|
|
25,089
|
|
|||
Weighted-average grant date fair value per share
|
$
|
12.42
|
|
|
$
|
11.47
|
|
|
$
|
12.04
|
|
Shares of restricted stock granted
|
—
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
Grant date fair value of fully vested stock granted in period
|
$
|
330
|
|
|
$
|
280
|
|
|
$
|
302
|
|
Grant date fair value of restricted stock vested in period
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
146
|
|
Cash used to repurchase common shares for minimum tax withholdings
|
$
|
53
|
|
|
$
|
59
|
|
|
$
|
66
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Shares granted
|
175,729
|
|
|
133,591
|
|
|
125,123
|
|
|||
Weighted-average grant date fair value per share
|
$
|
10.60
|
|
|
$
|
11.19
|
|
|
$
|
10.51
|
|
Grant date fair value of restricted stock vested in period ('000)
|
$
|
1,756
|
|
|
$
|
1,294
|
|
|
$
|
422
|
|
Cash used to repurchase common shares for minimum tax withholdings ('000)
|
$
|
445
|
|
|
$
|
252
|
|
|
$
|
133
|
|
|
Number of
Underlying Shares
|
|
Weighted-Average
Grant Date
Fair Value
|
|||
Unvested at December 31, 2017
|
278,633
|
|
|
$
|
11.05
|
|
Granted
|
175,729
|
|
|
$
|
10.60
|
|
Vested
(1)
|
(153,967
|
)
|
|
$
|
11.41
|
|
Forfeited
|
—
|
|
|
$
|
—
|
|
Unvested at December 31, 2018
|
300,395
|
|
|
$
|
10.60
|
|
(1)
|
Includes
12,983
shares of service-based restricted stock held by John Rasor, the vesting of which was accelerated upon his resignation as Chief Operating Officer of CatchMark on July 6, 2018, the date Mr. Rasor was named President of the Triple T Joint Venture. Also includes the vesting of
57,940
shares of service-based restricted stock issued to Mr. Rasor in April 2017. These vesting events are non-recurring in nature.
|
|
Number of
Underlying Shares
|
|
Weighted-Average
Grant Date
Fair Value
|
|||
Unvested at December 31, 2017
|
112,900
|
|
|
$
|
7.01
|
|
Granted
|
—
|
|
|
$
|
—
|
|
Vested
(1)
|
(36,938
|
)
|
|
$
|
7.21
|
|
Forfeited
|
(54,930
|
)
|
|
$
|
7.21
|
|
Unvested at December 31, 2018
|
21,032
|
|
|
$
|
7.21
|
|
(1)
|
Includes
7,953
shares of accelerated vesting of Mr. Rasor's remaining 2015 Performance Awards previously scheduled to vest in January 2019, upon his resignation as Chief Operating Officer of CatchMark on July 6, 2018, the date Mr. Rasor was named President of the Triple T Joint Venture.
|
Grant date market price (November 29, 2018)
|
$
|
8.47
|
|
Weighted-average fair value per granted share
|
$
|
1.84
|
|
Assumptions:
|
|
||
Volatility
|
25.30
|
%
|
|
Expected term (years)
|
3.0
|
|
|
Risk-free interest rate
|
2.89
|
%
|
Grant date market price (May 2, 2017)
|
$
|
11.73
|
|
Assumptions:
|
|
||
Volatility
|
21.85
|
%
|
|
Expected term (years)
|
3.0
|
|
|
Dividend yield
|
4.6
|
%
|
|
Risk-free interest rate
|
1.57
|
%
|
Grant date market price (November 29, 2018)
|
$
|
8.47
|
|
Weighted-average fair value per granted share
|
$
|
1.31
|
|
Assumptions:
|
|
||
Volatility
|
25.30
|
%
|
|
Expected term (years)
|
3.0
|
|
|
Risk-free interest rate
|
2.89
|
%
|
Grant date market price (November 29, 2018)
|
$
|
8.47
|
|
Weighted-average fair value per granted share
|
$
|
1.82
|
|
Assumptions:
|
|
||
Volatility
|
25.30
|
%
|
|
Expected term (years)
|
3.0
|
|
|
Risk-free interest rate
|
2.89
|
%
|
(in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
General and administrative expenses
|
$
|
2,356
|
|
|
$
|
1,956
|
|
|
$
|
1,411
|
|
Forestry management expenses
|
333
|
|
|
830
|
|
|
313
|
|
|||
Total
|
$
|
2,689
|
|
|
$
|
2,786
|
|
|
$
|
1,724
|
|
(in millions)
|
Federal
|
|
State
|
|
Total
|
||||||
CatchMark Timber Trust
|
$
|
121.9
|
|
(1)
|
$
|
102.8
|
|
|
$
|
224.7
|
|
CatchMark TRS
|
$
|
35.5
|
|
(2)
|
$
|
27.0
|
|
|
$
|
62.5
|
|
Total
|
$
|
157.4
|
|
|
$
|
129.8
|
|
|
$
|
287.2
|
|
|
As of December 31,
|
||||||
(in thousands)
|
2018
|
|
2017
|
||||
Deferred tax assets:
|
|
|
|
||||
Net operating loss carryforward
|
$
|
8,612
|
|
|
$
|
10,075
|
|
Gain on timberland sales
|
8
|
|
|
9
|
|
||
Other
|
418
|
|
|
468
|
|
||
Total gross deferred tax asset
|
9,038
|
|
|
10,552
|
|
||
|
|
|
|
||||
Valuation allowance
|
(8,949
|
)
|
|
(10,371
|
)
|
||
Total net deferred tax asset
|
$
|
89
|
|
|
$
|
181
|
|
|
|
|
|
||||
Deferred tax liability:
|
|
|
|
||||
Timber depletion
|
89
|
|
|
181
|
|
||
Total gross deferred tax liability
|
$
|
89
|
|
|
$
|
181
|
|
|
|
|
|
||||
Deferred tax asset, net
|
$
|
—
|
|
|
$
|
—
|
|
|
2018
|
|
2017
|
|
2016
|
|||
Federal statutory income tax rate
|
21.0
|
%
|
|
34.0
|
%
|
|
34.0
|
%
|
State income taxes, net of federal benefit
|
—
|
|
|
—
|
%
|
|
—
|
%
|
Other temporary differences
|
(0.2
|
)%
|
|
(0.4
|
)%
|
|
1.3
|
%
|
Other permanent differences
|
5.4
|
%
|
|
(0.1
|
)%
|
|
(0.1
|
)%
|
Effects of federal rate change
|
—
|
%
|
|
(83.8
|
)%
|
|
—
|
%
|
Valuation allowance
|
(26.2
|
)%
|
|
50.3
|
%
|
|
(35.2
|
)%
|
Effective tax rate
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
14.
|
Customer Concentration
|
15.
|
Segment Information
|
|
For the Years Ended December 31,
|
||||||||||
(in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Harvest
|
$
|
74,734
|
|
|
$
|
76,419
|
|
|
$
|
69,340
|
|
Real Estate
|
17,520
|
|
|
14,768
|
|
|
12,515
|
|
|||
Investment Management
|
5,603
|
|
|
108
|
|
|
—
|
|
|||
Total
|
$
|
97,857
|
|
|
$
|
91,295
|
|
|
$
|
81,855
|
|
|
For the Years Ended December 31,
|
||||||||||
(in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Harvest
|
$
|
31,191
|
|
|
$
|
33,855
|
|
|
$
|
32,472
|
|
Real Estate
|
16,388
|
|
|
14,235
|
|
|
11,838
|
|
|||
Investment Management
|
12,431
|
|
|
2,111
|
|
|
—
|
|
|||
Non-allocated / Corporate EBITDA
|
$
|
(10,224
|
)
|
|
$
|
(8,231
|
)
|
|
$
|
(7,502
|
)
|
Total
|
$
|
49,786
|
|
|
$
|
41,970
|
|
|
$
|
36,808
|
|
(in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Adjusted EBITDA
|
$
|
49,786
|
|
|
$
|
41,970
|
|
|
$
|
36,808
|
|
Subtract:
|
|
|
|
|
|
||||||
Depletion
|
25,912
|
|
|
29,035
|
|
|
28,897
|
|
|||
Basis of timberland sold, lease terminations and other
(1)
|
13,053
|
|
|
10,112
|
|
|
10,089
|
|
|||
Amortization
(2)
|
2,821
|
|
|
1,270
|
|
|
1,093
|
|
|||
Depletion, amortization, and basis of timberland and mitigation credits sold included in loss from unconsolidated joint venture
(3)
|
4,195
|
|
|
865
|
|
|
—
|
|
|||
HLBV loss from unconsolidated joint venture
(4)
|
109,550
|
|
|
—
|
|
|
—
|
|
|||
Stock-based compensation expense
|
2,689
|
|
|
2,786
|
|
|
1,724
|
|
|||
Interest expense
(2)
|
13,643
|
|
|
10,093
|
|
|
5,753
|
|
|||
(Gain) loss from large dispositions
(5)
|
390
|
|
|
—
|
|
|
—
|
|
|||
Other
(6)
|
(460
|
)
|
|
1,319
|
|
|
322
|
|
|||
Net loss
|
$
|
(122,007
|
)
|
|
$
|
(13,510
|
)
|
|
$
|
(11,070
|
)
|
(1)
|
Includes non-cash basis of timber and timberland assets written-off related to timberland sold, terminations of timberland leases and casualty losses.
|
(2)
|
For the purpose of the above reconciliation, amortization includes amortization of deferred financing costs, amortization of intangible lease assets, and amortization of mainline road costs, which are included in either interest expense, land rent expense, or other operating expenses in the consolidated statements of operations.
|
(3)
|
Reflects our share of depletion, amortization, and basis of timberland and mitigation credits sold of the unconsolidated Dawsonville Bluffs Joint Venture.
|
(4)
|
Reflects HLBV (income) losses from the Triple T Joint Venture, which is determined based on a hypothetical liquidation of the underlying joint venture at book value as of the reporting date.
|
(5)
|
Large dispositions are defined as larger transactions in acreage and gross sales price than recurring HBU sales. Large dispositions are not part of core operations, are infrequent in nature and would cause material variances in comparative results if not reported separately. Large dispositions may or may not have a higher or better use than timber production or result in a price premium above the land’s timber production value.
|
(6)
|
Includes certain cash expenses paid, or reimbursement received, that management believes do not directly reflect the core business operations of our timberland portfolio on an on-going basis, including costs required to be expensed by GAAP related to acquisitions, transactions, joint ventures or new business initiatives.
|
16.
|
Subsequent Event
|
1 Year CatchMark Timber Chart |
1 Month CatchMark Timber Chart |
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