x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
Delaware
(State or other jurisdiction of incorporation or organization) |
91-1313292
(IRS Employer Identification Number) |
Description
|
Page
Number
|
Part
I. Financial Information
|
|
Item
1 Financial Statements (unaudited)
|
|
Condensed
Consolidated Balance Sheets
|
4
|
Condensed
Consolidated Statements of Earnings
|
5
|
Condensed
Consolidated Statements of Cash Flows
|
6
|
Notes
to Condensed Consolidated Financial Statements
|
7-13
|
Item
2. Management’s Discussion and Analysis of Financial Condition and Results
of Operations
|
14-34
|
Item
3. Quantitative and Qualitative Disclosures about Risk
|
34
|
Item
4. Controls and Procedures
|
34
|
Part
II. Other Information
|
|
Item
1. Legal Proceedings
|
35
|
Item
1A. Risk Factors
|
35
|
Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds
|
36
|
Item
3. Defaults Upon Senior Securities
|
36
|
Item
4. Submission of Matters to a Vote of Security Holders
|
36
|
Item
5. Other Information
|
37
|
Item
6. Exhibits
|
37
|
Signatures
|
38
|
CONDENSED
CONSOLIDATED BALANCE SHEETS (Unaudited)
|
|||||||
Pope
Resources
|
|||||||
June
30, 2006 and December 31, 2005
|
|||||||
(Thousands)
|
|||||||
2006
|
2005
|
||||||
Assets
|
|||||||
Current
assets:
|
|||||||
Cash
and cash equivalents
|
$
|
2,679
|
$
|
3,361
|
|||
Short-term
investments
|
20,000
|
15,000
|
|||||
Accounts
receivable
|
3,805
|
1,049
|
|||||
Land
held for sale at cost
|
2,947
|
4,371
|
|||||
Current
portion of contracts receivable
|
13
|
14
|
|||||
Prepaid
expenses and other
|
225
|
336
|
|||||
Total
current assets
|
29,669
|
24,131
|
|||||
Properties
and equipment at cost:
|
|||||||
Land
held for development
|
11,723
|
9,661
|
|||||
Land
and land improvements
|
15,359
|
15,542
|
|||||
Roads
and timber (net of accumulated depletion of $41,857 and
$37,030)
|
48,714 | 53,019 | |||||
Buildings
and equipment (net of accumulated depreciation of $6,601 and
$6,488)
|
3,434
|
3,340
|
|||||
79,230
|
81,562
|
||||||
Other
assets:
|
|||||||
Contracts
receivable, net of current portion
|
958
|
483
|
|||||
Other
|
166
|
182
|
|||||
1,124
|
665
|
||||||
Total
assets
|
$
|
110,023
|
$
|
106,358
|
|||
Liabilities
and Partners' Capital
|
|||||||
Current
liabilities:
|
|||||||
Accounts
payable
|
$
|
1,260
|
$
|
1,147
|
|||
Accrued
liabilities
|
1,400
|
3,865
|
|||||
Current
portion of long-term debt
|
1,342
|
1,602
|
|||||
Deferred
revenue
|
1,245
|
304
|
|||||
Environmental
remediation
|
47
|
152
|
|||||
Minority
interest
|
36
|
325
|
|||||
Other
current liabilities
|
73
|
59
|
|||||
Total
current liabilities
|
5,403
|
7,454
|
|||||
Long-term
debt, net of current portion
|
30,919
|
32,281
|
|||||
Other
long term liabilities
|
321
|
218
|
|||||
Partners'
capital (units outstanding 4,643 and 4,646)
|
73,380
|
66,405
|
|||||
Total
liabilities and partners' capital
|
$
|
110,023
|
$
|
106,358
|
|||
See
accompanying notes to condensed consolidated financial
statements.
|
CONDENSED
CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
|
|||||||||||||
Pope
Resources
|
|||||||||||||
For
the Three Months and Six Months Ended June 30, 2006 and
2005
|
|||||||||||||
(Thousands,
except per unit data)
|
Three
Months Ended June 30,
|
Six
Months Ended June 30,
|
|||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
Revenues
|
$
|
15,610
|
$
|
16,131
|
$
|
31,693
|
$
|
32,787
|
|||||
Cost
of sales
|
(8,414
|
)
|
(7,410
|
)
|
(14,839
|
)
|
(15,214
|
)
|
|||||
Operating
expenses
|
(2,559
|
)
|
(2,671
|
)
|
(5,028
|
)
|
(5,004
|
)
|
|||||
Environmental
remediation
|
-
|
(108
|
)
|
-
|
(108
|
)
|
|||||||
General
and administrative expenses
|
(902
|
)
|
(847
|
)
|
(1,906
|
)
|
(1,695
|
)
|
|||||
Income
from operations
|
3,735
|
5,095
|
9,920
|
10,766
|
|||||||||
Other
income (expense):
|
|||||||||||||
Interest
expense
|
(469
|
)
|
(709
|
)
|
(997
|
)
|
(1,445
|
)
|
|||||
Interest
income
|
252
|
74
|
471
|
93
|
|||||||||
(217
|
)
|
(635
|
)
|
(526
|
)
|
(1,352
|
)
|
||||||
Income
before income taxes and minority interest
|
3,518
|
4,460
|
9,394
|
9,414
|
|||||||||
Income
tax benefit (provision)
|
8
|
(263
|
)
|
(437
|
)
|
(510
|
)
|
||||||
Income
before minority interest
|
3,526
|
4,197
|
8,957
|
8,904
|
|||||||||
Minority
interest benefit (expense)
|
14
|
(128
|
)
|
(119
|
)
|
(229
|
)
|
||||||
Net
income
|
$
|
3,540
|
$
|
4,069
|
$
|
8,838
|
$
|
8,675
|
|||||
Allocable
to general partners
|
$
|
46
|
$
|
53
|
$
|
116
|
$
|
114
|
|||||
Allocable
to limited partners
|
3,494
|
4,016
|
8,722
|
8,561
|
|||||||||
Earnings
per unit:
|
|||||||||||||
Basic
|
$
|
0.76
|
$
|
0.89
|
$
|
1.91
|
$
|
1.89
|
|||||
Diluted
|
$
|
0.74
|
$
|
0.86
|
$
|
1.86
|
$
|
1.83
|
|||||
Weighted
average units outstanding:
|
|||||||||||||
Basic
|
4,641
|
4,596
|
4,638
|
4,578
|
|||||||||
Diluted
|
4,753
|
4,757
|
4,750
|
4,740
|
|||||||||
See
accompanying notes to condensed consolidated financial
statements.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
|
|||||||
Pope
Resources
|
|||||||
Six
Months Ended June 30, 2006 and 2005
|
|||||||
(Thousands)
|
2006
|
2005
|
|||||
Cash
flows provided by operating activities
|
|||||||
Net
income
|
$
|
8,838
|
$
|
8,675
|
|||
Add
back (deduct) non-cash charges (credits):
|
|||||||
Deferred
revenue
|
941
|
(685
|
)
|
||||
Depletion
|
4,692
|
7,066
|
|||||
Equity
based compensation
|
195
|
-
|
|||||
Depreciation
and amortization
|
359
|
319
|
|||||
Deferred
taxes
|
(19
|
)
|
510
|
||||
Minority
interest
|
119
|
229
|
|||||
Cost
of land sold
|
2,869
|
166
|
|||||
Change
in working capital accounts:
|
|||||||
Accounts
receivable
|
(2,756
|
)
|
(2,660
|
)
|
|||
Contracts
receivable
|
(474
|
)
|
(177
|
)
|
|||
Other
current assets
|
129
|
114
|
|||||
Accounts
payable
|
113
|
(82
|
)
|
||||
Accrued
liabilities
|
(1,039
|
)
|
(270
|
)
|
|||
Deposits
|
15
|
(5
|
)
|
||||
Environmental
remediation
|
(105
|
)
|
(362
|
)
|
|||
Other
long term liabilities
|
103
|
(25
|
)
|
||||
Other
|
1
|
1
|
|||||
Net
cash flows provided by operating activities
|
13,981
|
12,814
|
|||||
Cash
flows from investing activities:
|
|||||||
Capital
expenditures
|
(5,816
|
)
|
(1,691
|
)
|
|||
Purchase
of short-term investments
|
(5,000
|
)
|
(8,007
|
)
|
|||
Net
cash used in investing activities
|
(10,816
|
)
|
(9,698
|
)
|
|||
Cash
flows from financing activities:
|
|||||||
Option
exercises
|
248
|
1,531
|
|||||
Repayment
of operating line of credit
|
-
|
(758
|
)
|
||||
Tax
benefit from equity based compensation
|
34
|
-
|
|||||
Minority
interest distribution
|
(167
|
)
|
(26
|
)
|
|||
Repayment
of long-term debt
|
(1,623
|
)
|
(1,667
|
)
|
|||
Unitholder
distribution
|
(2,339
|
)
|
(1,379
|
)
|
|||
Net
cash used in financing activities
|
(3,847
|
)
|
(2,299
|
)
|
|||
Net
increase (decrease) in cash and cash equivalents
|
(682
|
)
|
817
|
||||
Cash
and cash equivalents at beginning of year
|
3,361
|
757
|
|||||
Cash
and cash equivalents at end of the six-month period
|
$
|
2,679
|
$
|
1,574
|
|||
See
accompanying notes to condensed consolidated financial
statements.
|
1.
|
The
condensed consolidated financial statements as of June 30, 2006 and
December 31, 2005 and for the three months (quarter) and six-month
periods
ended June 30, 2006 and June 30, 2005 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
"SEC"). 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, 2005, is derived from the Partnership’s audited consolidated financial
statements and notes thereto for the year ended December 31, 2005,
and
should be read in conjunction with such financial statements. The
results
of operations for the interim periods are not necessarily indicative
of
the results of operations that may be achieved for the entire fiscal
year
ending December 31, 2006.
|
2.
|
The
financial statements in the Partnership's 2005 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.
|
Basic
net earnings per unit are based on the weighted average number of
units
outstanding during the period. Diluted net earnings per unit are
based on
the weighted average number of units and dilutive unit options outstanding
at the end of the period.
|
Quarter
Ended
June
30,
|
Six
Months Ended
June
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
Weighted
average units outstanding (in thousands):
|
|||||||||||||
Basic
|
4,641
|
4,596
|
4,638
|
4,578
|
|||||||||
Dilutive
effect of unit options
|
112
|
161
|
112
|
162
|
|||||||||
Diluted
|
4,753
|
4,757
|
4,750
|
4,740
|
4. |
Effective
January 1, 2006, we adopted the provisions of Statement of Financial
Accounting Standards No. 123 (revised 2004) Share
Based Payment (SFAS
No. 123R) using the modified prospective approach and accordingly
have not
restated prior period results. SFAS 123R established the accounting
for
equity instruments exchanged for employee services. Under SFAS 123R,
share-based compensation cost is measured at the grant date based
on the
calculated fair value of the award. We have also changed our accounting
for equity-based compensation awarded to retirement eligible directors
and
employees to expense the award over the lesser of vesting period
or the
period between the grant date and eligibility for retirement. The
impact
of the adoption of SFAS 123R on our earnings was $100,000 or $.03
per
diluted unit for the quarter ended June 30, 2006, and $249,000 or
$.06 per
diluted unit for the six months ended June 30, 2006, which includes
$70,000 of expense related to the treatment of the 2006 restricted
unit
grant to retirement eligible employees and board members.
|
For
the Quarter
|
For
the Six Months
|
||||||||||||
Ended
June 30, 2006
|
Ended
June 30, 2006
|
||||||||||||
Following
|
If
Reported
|
Following
|
If
Reported
|
||||||||||
FAS
123R
|
Following
APB 25
|
FAS
123R
|
Following
APB 25
|
||||||||||
Condensed
statement of earnings:
|
|||||||||||||
Operating
profit
|
$
|
3,735
|
$
|
3,835
|
$
|
9,920
|
$
|
10,169
|
|||||
Income
before income taxes
|
|||||||||||||
and
minority interest
|
$
|
3,518
|
$
|
3,618
|
$
|
9,394
|
$
|
9,643
|
|||||
Net
income
|
$
|
3,540
|
$
|
3,640
|
$
|
8,838
|
$
|
9,087
|
|||||
Earnings
per unit:
|
|||||||||||||
Basic
|
$
|
0.76
|
$
|
0.78
|
$
|
1.91
|
$
|
1.96
|
|||||
Diluted
|
$
|
0.74
|
$
|
0.77
|
$
|
1.86
|
$
|
1.92
|
Quarter
ended
|
Six
months ended
|
||||||
June
30,
|
June
30,
|
||||||
(In
thousands except per unit amounts)
|
2005
|
2005
|
|||||
Net
income as reported
|
$
|
4,069
|
$
|
8,675
|
|||
Compensation
expense recognized
|
-
|
-
|
|||||
Subtract
proforma compensation
|
|||||||
expense
under SFAS 123
|
(35
|
)
|
(70
|
)
|
|||
Proforma
net income under SFAS 123
|
$
|
4,034
|
$
|
8,605
|
|||
As
reported:
|
|||||||
Basic
|
$
|
0.89
|
$
|
1.89
|
|||
Diluted
|
$
|
0.86
|
$
|
1.83
|
|||
Proforma
net income per unit:
|
|||||||
Basic
|
$
|
0.88
|
$
|
1.88
|
|||
Diluted
|
$
|
0.85
|
$
|
1.82
|
2005
|
|||
Expected
life
|
5
years
|
||
Risk
free interest rate
|
4.00%
- 4.49%
|
||
Dividend
yield
|
1.2%
- 1.6%
|
||
Volatility
|
25.0%
- 27.5%
|
||
Weighted
average value
|
$
|
8.46
|
Weighted
Average
|
|||||||
Grant
date
|
|||||||
Units
|
Fair
Value ($)
|
||||||
Outstanding
at December 31, 2005
|
20,000
|
33.44
|
|||||
Grants
|
19,000
|
34.75
|
|||||
Forfeited
|
(1,500
|
)
|
33.44
|
||||
Outstanding
at March 31, 2006
|
37,500
|
34.10
|
|||||
No
activity
|
-
|
-
|
|||||
Outstanding
at June 30, 2006
|
37,500
|
34.10
|
Options
|
Price
($)
|
||||||
Unvested
at December 31, 2005
|
77,500
|
13.02
|
|||||
Vested
at December 31, 2005
|
200,500
|
16.57
|
|||||
Outstanding
at December 31, 2005
|
278,000
|
15.58
|
|||||
Activity
Q1 2006:
|
|||||||
Forfeitures
|
(4,800
|
)
|
12.00
|
||||
Exercises
|
(12,000
|
)
|
12.44
|
||||
Oustanding
at March 31, 2006
|
261,200
|
15.79
|
|||||
Vesting
during the quarter
|
33,012
|
13.12
|
|||||
Vested
at March 31, 2006
|
221,512
|
16.28
|
|||||
Unvested
at March 31, 2006
|
39,688
|
13.06
|
|||||
Activity
Q2 2006:
|
|||||||
Exercises
|
(3,450
|
)
|
12.58
|
||||
Outstanding
at June 30, 2006
|
257,750
|
15.83
|
|||||
Vested
at June 30, 2006
|
218,062
|
16.34
|
|||||
Unvested
at June 30, 2006
|
39,688
|
13.06
|
5. |
Supplemental
disclosure of cash flow information: For the six months ended June
30,
2006 and 2005, interest paid net of amounts capitalized amounted
to
$1,221,000 and $1,444,000, respectively. Income taxes paid for the
six
months ended June 30, 2006 and 2005 amounted to $182,000 and
$4,000.
|
6. |
Revenue,
operating income, and EBITDDA which management uses as a measure
of
segment profit or loss for the quarters and six-month periods ended
June
30, 2006 and 2005, by segment are as
follows:
|
Timberland
|
||||||||||||||||
Three
Months Ended
|
Fee
|
Management
&
|
Real
|
|||||||||||||
June
30 (Thousands)
|
Timber
|
Consulting
|
Estate
|
Other
|
Consolidated
|
|||||||||||
2006
|
||||||||||||||||
Revenue
internal
|
$
|
10,451
|
$
|
546
|
$
|
4,626
|
$
|
-
|
$
|
15,623
|
||||||
Eliminations
|
(2
|
)
|
(2
|
)
|
(9
|
)
|
-
|
(13
|
)
|
|||||||
Revenue
external
|
10,449
|
544
|
4,617
|
-
|
15,610
|
|||||||||||
Cost
of sales
|
(5,368
|
)
|
-
|
(3,046
|
)
|
(8,414
|
)
|
|||||||||
Operating
expenses internal
|
(1,069
|
)
|
(519
|
)
|
(984
|
)
|
(902
|
)
|
(3,474
|
)
|
||||||
Eliminations
|
2
|
12
|
(1
|
)
|
-
|
13
|
||||||||||
Operating
expenses external
|
(1,067
|
)
|
(507
|
)
|
(985
|
)
|
(902
|
)
|
(3,461
|
)
|
||||||
Income
(loss) from operations internal
|
4,014
|
27
|
596
|
(902
|
)
|
3,735
|
||||||||||
Eliminations
|
-
|
10
|
(10
|
)
|
-
|
-
|
||||||||||
Income
(loss) from operations external
|
$
|
4,014
|
$
|
37
|
$
|
586
|
$
|
(902
|
)
|
$
|
3,735
|
|||||
EBITDDA
reconciliation:
|
||||||||||||||||
Minority
interest
|
-
|
14
|
-
|
-
|
14
|
|||||||||||
Depletion
|
2,119
|
-
|
-
|
-
|
2,119
|
|||||||||||
Depreciation
and amortization
|
62
|
20
|
43
|
50
|
175
|
|||||||||||
EBITDDA
|
$
|
6,195
|
$
|
71
|
$
|
629
|
$
|
(852
|
)
|
$
|
6,043
|
|||||
2005
|
||||||||||||||||
Revenue
internal
|
$
|
13,221
|
$
|
1,845
|
$
|
1,077
|
$
|
-
|
$
|
16,143
|
||||||
Eliminations
|
(1
|
)
|
(2
|
)
|
(9
|
)
|
-
|
(12
|
)
|
|||||||
Revenue
external
|
13,220
|
1,843
|
1,068
|
-
|
16,131
|
|||||||||||
Cost
of sales
|
(7,234
|
)
|
-
|
(176
|
)
|
-
|
(7,410
|
)
|
||||||||
Operating
expenses internal
|
(1,048
|
)
|
(1,043
|
)
|
(700
|
)
|
(847
|
)
|
(3,638
|
)
|
||||||
Eliminations
|
(8
|
)
|
20
|
-
|
-
|
12
|
||||||||||
Operating
expenses external
|
(1,056
|
)
|
(1,023
|
)
|
(700
|
)
|
(847
|
)
|
(3,626
|
)
|
||||||
Income
(loss) from operations internal
|
4,939
|
802
|
201
|
(847
|
)
|
5,095
|
||||||||||
Eliminations
|
(9
|
)
|
18
|
(9
|
)
|
-
|
-
|
|||||||||
Income
(loss) from operations external
|
$
|
4,930
|
$
|
820
|
$
|
192
|
$
|
(847
|
)
|
$
|
5,095
|
|||||
EBITDDA
reconciliation:
|
||||||||||||||||
Minority
interest
|
-
|
(128
|
)
|
-
|
-
|
(128
|
)
|
|||||||||
Depletion
|
3,123
|
100
|
-
|
3,223
|
||||||||||||
Depreciation
and amortization
|
37
|
27
|
38
|
65
|
167
|
|||||||||||
EBITDDA
|
$
|
8,090
|
$
|
719
|
$
|
330
|
$
|
(782
|
)
|
$
|
8,357
|
Timberland
|
||||||||||||||||
Six
Months Ended
|
Fee
|
Management
&
|
Real
|
|||||||||||||
June
30 (Thousands)
|
Timber
|
Consulting
|
Estate
|
Other
|
Consolidated
|
|||||||||||
2006
|
||||||||||||||||
Revenue
internal
|
$
|
24,175
|
$
|
2,587
|
$
|
4,970
|
$
|
-
|
$
|
31,732
|
||||||
Eliminations
|
(2
|
)
|
(19
|
)
|
(18
|
)
|
-
|
(39
|
)
|
|||||||
Revenue
external
|
24,173
|
2,568
|
4,952
|
-
|
31,693
|
|||||||||||
Cost
of sales
|
(11,778
|
)
|
-
|
(3,061
|
)
|
-
|
(14,839
|
)
|
||||||||
Operating
expenses internal
|
(2,165
|
)
|
(1,257
|
)
|
(1,645
|
)
|
(1,906
|
)
|
(6,973
|
)
|
||||||
Eliminations
|
16
|
22
|
1
|
-
|
39
|
|||||||||||
Operating
expenses external
|
(2,149
|
)
|
(1,235
|
)
|
(1,644
|
)
|
(1,906
|
)
|
(6,934
|
)
|
||||||
Income
(loss) from operations internal
|
10,232
|
1,330
|
264
|
(1,906
|
)
|
9,920
|
||||||||||
Eliminations
|
14
|
3
|
(17
|
)
|
-
|
-
|
||||||||||
Income
(loss) from operations external
|
$
|
10,246
|
$
|
1,333
|
$
|
247
|
$
|
(1,906
|
)
|
$
|
9,920
|
|||||
EBITDDA
reconciliation:
|
||||||||||||||||
Minority
interest
|
-
|
(119
|
)
|
-
|
-
|
(119
|
)
|
|||||||||
Depletion
|
4,692
|
-
|
-
|
-
|
4,692
|
|||||||||||
Depreciation
and amortization
|
133
|
36
|
77
|
113
|
359
|
|||||||||||
EBITDDA
|
$
|
15,071
|
$
|
1,250
|
$
|
324
|
$
|
(1,793
|
)
|
$
|
14,852
|
|||||
2005
|
||||||||||||||||
Revenue
internal
|
$
|
26,883
|
$
|
3,460
|
$
|
2,465
|
$
|
-
|
$
|
32,808
|
||||||
Eliminations
|
-
|
(3
|
)
|
(18
|
)
|
-
|
(21
|
)
|
||||||||
Revenue
external
|
26,883
|
3,457
|
2,447
|
-
|
32,787
|
|||||||||||
Cost
of sales
|
(14,767
|
)
|
-
|
(447
|
)
|
-
|
(15,214
|
)
|
||||||||
Operating
expenses internal
|
(2,144
|
)
|
(1,814
|
)
|
(1,175
|
)
|
(1,695
|
)
|
(6,828
|
)
|
||||||
Eliminations
|
-
|
19
|
2
|
-
|
21
|
|||||||||||
Operating
expenses external
|
(2,144
|
)
|
(1,795
|
)
|
(1,173
|
)
|
(1,695
|
)
|
(6,807
|
)
|
||||||
Income
(loss) from operations internal
|
9,972
|
1,646
|
843
|
(1,695
|
)
|
10,766
|
||||||||||
Eliminations
|
-
|
16
|
(16
|
)
|
-
|
-
|
||||||||||
Income
(loss) from operations external
|
$
|
9,972
|
$
|
1,662
|
$
|
827
|
$
|
(1,695
|
)
|
$
|
10,766
|
|||||
EBITDDA
reconciliation:
|
||||||||||||||||
Minority
interest and investment income
|
-
|
(229
|
)
|
-
|
-
|
(229
|
)
|
|||||||||
Depletion
|
6,961
|
-
|
105
|
-
|
7,066
|
|||||||||||
Depreciation
and amortization
|
68
|
48
|
69
|
134
|
319
|
|||||||||||
EBITDDA
|
$
|
17,001
|
$
|
1,481
|
$
|
1,001
|
$
|
(1,561
|
)
|
$
|
17,922
|
QUARTER AND YEAR TO DATE VARIANCE ANALYSIS | ||||||
(Amounts in $000's except per unit data) |
Quarter
ended
|
|
Six
months ended
|
|||||
Net
income:
|
June
30, 2006 and 2005
|
June
30, 2006 and 2005
|
|||||
2nd
Quarter 2006
|
$
|
3,540
|
$
|
8,838
|
|||
2nd
Quarter 2005
|
4,069
|
8,675
|
|||||
Variance
|
$
|
(529
|
)
|
$
|
163
|
||
Detail
of earnings variance:
|
|||||||
Fee
Timber
|
|||||||
Log
price realizations (A)
|
$
|
433
|
$
|
1,050
|
|||
Log
volumes (B)
|
(3,296
|
)
|
(3,857
|
)
|
|||
Depletion
|
1,005
|
2,275
|
|||||
Production
costs
|
862
|
714
|
|||||
Other
Fee Timber
|
80
|
91
|
|||||
Timberland
Management & Consulting
|
-
|
||||||
Management
fee changes
|
(673
|
)
|
(1,411
|
)
|
|||
Disposition
fee changes
|
-
|
1,343
|
|||||
Other
Timberland Management & Consulting
|
(110
|
)
|
(266
|
)
|
|||
Real
Estate
|
-
|
||||||
Environmental
remediation liability
|
108
|
108
|
|||||
Land
sales
|
707
|
(101
|
)
|
||||
Depletion
|
99
|
99
|
|||||
Other
Real Estate
|
(520
|
)
|
(686
|
)
|
|||
General
& administrative costs
|
(55
|
)
|
(211
|
)
|
|||
Interest
expense
|
240
|
448
|
|||||
Other
(taxes, minority int., interest inc.)
|
591
|
567
|
|||||
Total
change in earnings
|
$
|
(529
|
)
|
$
|
163
|
(A)
Price variance calculated by extending the change in average realized
price by current period volume.
|
|||||||||
(B)
Volume variance calculated by extending change in sales volume
by the
average log sales price for the comparison
period
|
Quarter
Ended:
|
Log
Sale
Revenue |
Mineral,
Cell
Tower & Other Revenue |
Total
Fee
Timber Revenue
|
Operating
Income |
June
30, 2006
|
$10.0
million
|
$0.4
million
|
$10.4
million
|
$4.0
million
|
March
31, 2006
|
13.4
million
|
0.3
million
|
13.7
million
|
6.2
million
|
June
30, 2005
|
12.9
million
|
0.3
million
|
13.2
million
|
4.9
million
|
Quarter
Ended:
|
Log
Sale
Revenue |
Mineral,
Cell
Tower & Other Revenue |
Total
Fee
Timber Revenue
|
Operating
Income |
June
30, 2006
|
$23.4
million
|
$0.8
million
|
$24.2
million
|
$10.2
million
|
June
30, 2005
|
26.2
million
|
0.7
million
|
26.9
million
|
10.0
million
|
Log
volumes (MBF):
|
Quarter
Ended
|
||||||||||||||||||
Sawlogs
|
June-06
|
%
Total
|
March-06
|
%
Total
|
June-05
|
%
Total
|
|||||||||||||
Douglas-fir
|
11,842
|
71
|
%
|
16,440
|
75
|
%
|
12,195
|
55
|
%
|
||||||||||
Whitewood
|
1,149
|
7
|
%
|
1,997
|
9
|
%
|
4,113
|
18
|
%
|
||||||||||
Cedar
|
227
|
1
|
%
|
359
|
2
|
%
|
1,730
|
8
|
%
|
||||||||||
Hardwoods
|
1,144
|
7
|
%
|
562
|
2
|
%
|
1,299
|
6
|
%
|
||||||||||
Pulp
|
|||||||||||||||||||
All
Species
|
2,288
|
14
|
%
|
2,675
|
12
|
%
|
3,026
|
13
|
%
|
||||||||||
Total
|
16,650
|
100
|
%
|
22,033
|
100
|
%
|
22,363
|
100
|
%
|
Log
volumes (MBF):
|
Six
Months Ended
|
||||||||||||
Sawlogs |
June-06
|
%
Total
|
June-05
|
%
Total
|
|||||||||
Douglas-fir
|
28,282
|
73
|
%
|
25,876
|
57
|
%
|
|||||||
Whitewood
|
3,145
|
8
|
%
|
7,528
|
17
|
%
|
|||||||
Cedar
|
586
|
2
|
%
|
3,208
|
7
|
%
|
|||||||
Hardwoods
|
1,706
|
4
|
%
|
2,788
|
6
|
%
|
|||||||
Pulp | |||||||||||||
All
Species
|
4,964
|
13
|
%
|
5,963
|
13
|
%
|
|||||||
Total |
38,683
|
100
|
%
|
45,363
|
100
|
%
|
Quarter
Ended
|
||||||||||
30-Jun-06
|
31-Mar-06
|
30-Jun-05
|
||||||||
Average
price realizations (per MBF):
|
||||||||||
Sawlogs
|
||||||||||
Douglas-fir
|
$
|
665
|
$
|
681
|
$
|
644
|
||||
Whitewood
|
452
|
439
|
487
|
|||||||
Cedar
|
1,182
|
873
|
981
|
|||||||
Hardwoods
|
670
|
598
|
563
|
|||||||
All
Species
|
260
|
251
|
205
|
|||||||
Pulp
|
||||||||||
Overall
|
603
|
608
|
577
|
Six Months
Ended
|
|||||||
30-Jun-06
|
June-05
|
||||||
Average
price realizations (per MBF):
|
|||||||
Sawlogs
|
|||||||
Douglas-fir
|
$
|
675
|
$
|
644
|
|||
Whitewood
|
443
|
480
|
|||||
Cedar
|
993
|
943
|
|||||
Hardwoods
|
646
|
597
|
|||||
Pulp
|
|||||||
All
Species
|
255
|
212
|
|||||
Overall
|
606
|
578
|
Q2
2006
|
Q1
2006
|
Q2
2005
|
|||||||||||||||||
Destination
|
Volume*
|
Price
|
Volume*
|
Price
|
Volume*
|
Price
|
|||||||||||||
Domestic
mills
|
12.7
|
$
|
651
|
18.8
|
$
|
657
|
18.9
|
$
|
635
|
||||||||||
Export
brokers
|
1.7
|
706
|
0.5
|
684
|
0.5
|
601
|
|||||||||||||
Pulp
|
2.3
|
260
|
2.7
|
251
|
3.0
|
205
|
|||||||||||||
Total
|
16.7
|
$
|
603
|
22.0
|
$
|
608
|
22.4
|
$
|
577
|
||||||||||
*
Volume in MMBF
|
Six
Months Ended
|
|||||||||||||
30-Jun-06
|
30-Jun-05
|
||||||||||||
Destination
|
Volume*
|
Price
|
Volume*
|
Price
|
|||||||||
Domestic
mills
|
31.6
|
$
|
655
|
37.3
|
$
|
634
|
|||||||
Export
brokers
|
2.1
|
701
|
2.1
|
637
|
|||||||||
Pulp
|
5.0
|
255
|
6.0
|
212
|
|||||||||
Total
|
38.7
|
$
|
606
|
45.4
|
$
|
578
|
|||||||
*
Volume in MMBF
|
Quarter
Ended:
|
Harvest,
Haul
and
Other
|
Depletion
|
Total
Cost of
Sales |
June
30, 2006
|
$3.3
million
|
$2.1
million
|
$5.4
million
|
March
31, 2006
|
3.8
million
|
2.6
million
|
6.4
million
|
June
30, 2005
|
4.1
million
|
3.1
million
|
7.2
million
|
Six
Months Ended:
|
Harvest,
Haul
and Other |
Depletion
|
Total
Cost of
Sales |
June
30, 2006
|
$7.1
million
|
$4.7
million
|
$11.8
million
|
June
30, 2005
|
7.8
million
|
7.0
million
|
14.8
million
|
Quarter
Ended:
|
Harvest
and Haul
per MBF |
Depletion
per
MBF |
Total
Cost
of Sales |
June
30, 2006
|
$195
|
$127
|
$322
|
March
31, 2006
|
174
|
117
|
291
|
June
30, 2005
|
184
|
140
|
324
|
Six
Months Ended:
|
Harvest
and Haul
per MBF |
Depletion
per
MBF |
Total
Cost
of Sales |
June
30, 2006
|
$184
|
$121
|
$305
|
June
30, 2005
|
173
|
153
|
326
|
Quarter
ended June 30, 2006
|
||||||||||
Pooled
|
Separate
|
Combined
|
||||||||
Volume
harvested (MBF)
|
13,685
|
2,965
|
16,650
|
|||||||
Rate/MBF
|
$
|
69
|
$
|
397
|
$
|
127
|
||||
Depletion
expense
|
$
|
942,000
|
$
|
1,177,000
|
$
|
2,119,000
|
Quarter
ended March 31, 2006
|
||||||||||
Pooled
|
Separate
|
Combined
|
||||||||
Volume
harvested (MBF)
|
18,820
|
3,213
|
22,033
|
|||||||
Rate/MBF
|
$
|
69
|
$
|
397
|
$
|
117
|
||||
Depletion
expense
|
$
|
1,299,000
|
$
|
1,274,000
|
$
|
2,573,000
|
Quarter
ended June 30, 2005
|
||||||||||
Pooled
|
Separate
|
Combined
|
||||||||
Volume
harvested (MBF)
|
17,284
|
5,079
|
22,363
|
|||||||
Rate/MBF
|
$
|
72
|
$
|
370
|
$
|
140
|
||||
Depletion
expense
|
$
|
1,246,000
|
$
|
1,879,000
|
$
|
3,125,000
|
Six
Months Ended June 30, 2006
|
||||||||||
Pooled
|
Separate
|
Combined
|
||||||||
Volume
harvested (MBF)
|
32,505
|
6,178
|
38,683
|
|||||||
Rate/MBF
|
$
|
69
|
$
|
397
|
$
|
121
|
||||
Depletion
expense
|
$
|
2,242,000
|
$
|
2,450,000
|
$
|
4,692,000
|
Six
Months Ended June 30, 2005
|
||||||||||
Pooled
|
Separate
|
Combined
|
||||||||
Volume
harvested (MBF)
|
32,965
|
12,398
|
45,363
|
|||||||
Rate/MBF
|
$
|
72
|
$
|
370
|
$
|
153
|
||||
Depletion
expense
|
$
|
2,376,000
|
$
|
4,586,000
|
$
|
6,962,000
|
Quarter
Ended:
|
Revenue
|
Operating
Income
|
June
30, 2006
|
$0.5
million
|
$0.0
million
|
June
30, 2005
|
1.8
million
|
0.8
million
|
Six
Months Ended:
|
Revenue
|
Operating
Income
|
June
30, 2006
|
$2.6
million
|
$1.3
million
|
June
30, 2005
|
3.5
million
|
1.7
million
|
Quarter
Ended:
|
Revenue
|
Operating
Income
|
June
30, 2006
|
$4.6
million
|
$0.6
million
|
June
30, 2005
|
1.1
million
|
0.2
million
|
Six
Months Ended:
|
Revenue
|
Operating
Income
|
June
30, 2006
|
$5.0
million
|
$0.2
million
|
June
30, 2005
|
2.4
million
|
0.8
million
|
For
the three months ended:
|
||||||||||||||||
Description
|
Revenue
|
Gross
Margin
|
Acres
Sold
|
Revenue/Acre
|
Gross
Margin/ Acre
|
|||||||||||
Rural
Residential
|
$
|
935,000
|
$
|
776,000
|