a50681069.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-Q

 
( X )
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2013

OR

 
(     )
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 1-9035

POPE RESOURCES, A DELAWARE
LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
 
Delaware
91-1313292
(State or other jurisdiction of  (IRS Employer 
incorporation or organization)  Identification Number) 

19950 7th Avenue NE, Suite 200, Poulsbo, WA 98370
Telephone: (360) 697-6626
(Address of principal executive offices including zip code)
(Registrant's telephone number including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes x   No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes x   No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one)
 
Large Accelerated Filer o Accelerated Filer x
Non-accelerated Filer o Smaller Reporting Company o
                                                                                                                      
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)    Yes o    No x

Partnership units outstanding at June 30, 2013: 4,442,511
 
 
 

 
 
Pope Resources
Index to Form 10-Q Filing
For the Quarter Ended June 30, 2013

Description
 
Page Number
   
     
   
 
4
 
5
 
6
 
7
     
 
12
     
 
38
     
 
38
     
   
     
 
39
     
 
39
     
 
42
     
 
42
     
 
42
     
 
42
     
 
42
     
 
44
 
 
 

 
 
P A R T I – FINANCIAL INFORMATION

ITEM 1

FINANCIAL STATEMENTS

 
3

 
 
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
           
Pope Resources, a Delaware Limited Partnership
           
June 30, 2013 and December 31, 2012
           
(in thousands)
           
   
2013
   
2012
 
ASSETS
           
Current assets
           
Partnership cash and cash equivalents
  $ 10,581     $ 2,517  
ORM Timber Funds cash and cash equivalents
    745       1,262  
Cash and cash equivalents
    11,326       3,779  
Accounts receivable, net
    1,718       1,208  
Land held for sale
    2,433       1,179  
Current portion of contracts receivable
    12       13  
Prepaid expenses and other
    1,098       1,075  
Total current assets
    16,587       7,254  
Properties and equipment, at cost
               
Timber and roads, net of accumulated depletion
               
of $88,602 and $82,094
    176,961       183,287  
Timberland
    40,726       41,201  
Land held for development
    29,187       29,039  
Buildings and equipment, net of accumulated
               
depreciation of $6,215 and $6,012
    6,021       6,154  
Total properties and equipment, at cost
    252,895       259,681  
Other assets
               
Contracts receivable, net of current portion
    221       288  
Other
    255       276  
Total other assets
    476       564  
Total assets
  $ 269,958     $ 267,499  
                 
LIABILITIES, PARTNERS' CAPITAL AND NONCONTROLLING INTERESTS
       
Current liabilities
               
Accounts payable
  $ 2,311     $ 1,673  
Accrued liabilities
    2,519       2,866  
Current portion of long-term debt
    123       125  
Deferred revenue
    2,241       2,065  
Other current liabilities
    781       993  
Total current liabilities
    7,975       7,722  
Long-term debt, net of current portion
    43,655       43,710  
Other long-term liabilities
    13,359       13,426  
Partners' capital and noncontrolling interests
               
General partners' capital (units issued and outstanding 60 and 60)
    986       902  
Limited partners' capital (units issued and outstanding 4,311 and 4,299)
    69,372       63,321  
Noncontrolling interests
    134,611       138,418  
Total partners' capital and noncontrolling interests
    204,969       202,641  
Total liabilities, partners' capital, and noncontrolling interests
  $ 269,958     $ 267,499  
                 
See accompanying notes to condensed consolidated financial statements.
 
 
4

 

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)
             
Pope Resources, a Delaware Limited Partnership
                       
For the Three Months and Six Months Ended June 30, 2013 and 2012
                       
(in thousands, except per unit data)
                       
   
Three Months Ended June 30,
   
Six Months Ended June 30,
 
   
2013
   
2012
   
2013
   
2012
 
                         
Revenue
  $ 23,197     $ 17,790     $ 39,915     $ 26,594  
Cost of sales
    (12,085 )     (10,701 )     (20,949 )     (15,120 )
Operating expenses
    (3,015 )     (2,735 )     (5,918 )     (4,886 )
Real estate environmental remediation
    -       (12,500 )     -       (12,500 )
General and administrative expenses
    (1,238 )     (1,004 )     (2,431 )     (2,168 )
Income (loss) from operations
    6,859       (9,150 )     10,617       (8,080 )
                                 
Other income (expense)
                               
Interest expense, net
    (343 )     (375 )     (698 )     (768 )
                                 
Income (loss) before income taxes
    6,516       (9,525 )     9,919       (8,848 )
Income tax benefit (expense)
    2       (170 )     16       (134 )
Net income (loss)
    6,518       (9,695 )     9,935       (8,982 )
                                 
Net (income) loss attributable to noncontrolling
                               
interests - ORM Timber Funds
    (390 )     400       (323 )     893  
Net income (loss) attributable to unitholders
    6,128       (9,295 )     9,612       (8,089 )
Other comprehensive income adjustments
    -       -       -       -  
Comprehensive income (loss) attributable to unitholders
  $ 6,128     $ (9,295 )   $ 9,612     $ (8,089 )
                                 
                                 
Allocable to general partners
  $ 84     $ (128 )   $ 132     $ (112 )
Allocable to limited partners
    6,044       (9,167 )     9,480       (7,977 )
Comprehensive income (loss) attributable to unitholders
  $ 6,128     $ (9,295 )   $ 9,612     $ (8,089 )
                                 
Basic and diluted earnings (loss) per unit attributable
                               
to unitholders
  $ 1.34     $ (2.14 )   $ 2.11     $ (1.87 )
                                 
Basic and diluted weighted average units outstanding
    4,369       4,351       4,367       4,348  
                                 
Distributions per unit
  $ 0.45     $ 0.45     $ 0.90     $ 0.80  
                                 
See accompanying notes to condensed consolidated financial statements.
 
 
5

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
           
Pope Resources, a Delaware Limited Partnership
           
Six Months Ended June 30, 2013 and 2012
           
(in thousands)
           
   
2013
   
2012
 
Net income (loss)
  $ 9,935     $ (8,982 )
Adjustments to reconcile net income (loss) to net cash provided by operating activities
               
Depletion
    6,446       5,133  
Timber depletion on land sale
    296       -  
Capitalized development activities
    (1,491 )     (482 )
Equity-based compensation
    763       519  
Depreciation and amortization
    345       337  
Deferred taxes
    (97 )     17  
Cost of land sold
    940       -  
(Gain) loss on disposal of property and equipment
    57       (15 )
Cash flows from changes in operating accounts
               
Accounts receivable, net
    (510 )     (567 )
Contracts receivable
    68       179  
Prepaid expenses and other current assets
    30       118  
Accounts payable and accrued liabilities
    291       70  
Deferred revenue
    176       115  
Other current liabilities
    39       6  
Environmental remediation
    (253 )     12,253  
Other long-term liabilities
    (25 )     (25 )
Net cash provided by operating activities
    17,010       8,676  
                 
Cash flows from investing activities
               
Reforestation and roads
    (853 )     (712 )
Buildings and equipment
    (183 )     (64 )
Proceeds from sale of fixed assets
    -       33  
Net cash used in investing activities
    (1,036 )     (743 )
                 
Cash flows from financing activities
               
Repayment of line of credit, net
    -       (2,824 )
Repayment of long-term debt
    (57 )     (17 )
Payroll taxes paid upon restricted unit vesting/option exercises
    (241 )     (300 )
Cash distributions to unitholders
    (3,999 )     (3,528 )
Cash distributions - ORM Timber Funds, net of distributions to Partnership
    (4,267 )     (2,141 )
Capital call - ORM Timber Funds, net of Partnership contribution
    137       118  
Other
    -       (16 )
Net cash used in financing activities
    (8,427 )     (8,708 )
Net increase (decrease) in cash and cash equivalents
    7,547       (775 )
Cash and cash equivalents at beginning of period
    3,779       2,653  
Cash and cash equivalents at end of period
  $ 11,326     $ 1,878  
                 
See accompanying notes to condensed consolidated financial statements.
 
 
 
6

 
 
POPE RESOURCES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
June 30, 2013

1.  
The condensed consolidated balance sheets as of June 30, 2013 and December 31, 2012 and the related condensed consolidated statements of comprehensive income (loss) for the three- and six-month periods and cash flows for the six-month periods ended June 30, 2013 and 2012 have been prepared by Pope Resources, A Delaware Limited Partnership (the “Partnership”), pursuant to the rules and regulations of the Securities and Exchange Commission. The condensed consolidated financial statements are unaudited, but, in the opinion of management, reflect all adjustments (consisting only of normal recurring adjustments and accruals) necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods. The financial information as of December 31, 2012, is derived from the Partnership’s audited consolidated financial statements and notes thereto for the year ended December 31, 2012, and should be read in conjunction with such financial statements and notes. The results of operations for the interim periods are not indicative of the results of operations that may be achieved for the entire fiscal year ending December 31, 2013.
 
In December 2012, we changed the classification of certain Real Estate operating costs related to rental revenue to Real Estate cost of sales.  As such, we have reclassified $346,000 and $624,000 from operating expenses to cost of sales for the quarter and six months ended June 30, 2012, respectively, to conform to the current year periods.  The reclassifications had no impact on total expenses or income from operations. 
 
2.
The financial statements in the Partnership's 2012 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.  
The Partnership has two general partners: Pope MGP, Inc. and Pope EGP, Inc. In total, these two entities own 60,000 partnership units. The allocation of distributions, profits and losses between the general and limited partners is pro rata across all units outstanding.

4.  
ORM Timber Fund I, LP (Fund I), ORM Timber Fund II, Inc. (Fund II), and ORM Timber Fund III (REIT) Inc. (Fund III), collectively “the Funds”, were formed by Olympic Resource Management LLC (ORMLLC), a wholly owned subsidiary of Pope Resources, for the purpose of attracting capital to purchase timberlands. The objective of these Funds is to generate a return on investments through the acquisition, management, value enhancement and sale of timberland properties. Each Fund will operate for a term of ten years from the end of the respective drawdown period, with Fund I terminating in August 2017, Fund II terminating in March 2021, and Fund III terminating on the tenth anniversary of the completion of its drawdown period.  Fund III’s drawdown period will end at the earlier of placement of all committed capital or July 31, 2015. During the fourth quarter of 2012, Fund III acquired 19,000 acres of northern California timberland for a purchase price of $45.1 million which represented a deployment of 25% of the Fund III committed capital.

 
Pope Resources and ORMLLC together own 20% of Fund I and Fund II and 5% of Fund III. The Funds are consolidated into the Partnership’s financial statements based in part on ORMLLC’s controlling role as the general partner or managing member of the Funds. The Funds’ statements of operations for the quarters ended June 30, 2013 and 2012 reflect operating income of $1.4 million and $286,000, respectively. These operating results exclude management fees paid by the Funds to ORMLLC of $740,000 and $612,000 for the second quarters of 2013 and 2012, respectively, which are eliminated in consolidation. The Funds’ statements of operations for the six months ended June 30, 2013 and 2012 reflect operating income of $2.2 million and $298,000, respectively. These operating results exclude management fees paid by the Funds to ORMLLC of $1.4 million and $1.1 million for the six months ended June 30, 2013 and 2012, respectively, which are eliminated in consolidation. The portion of these fees, among other items of income and expense, attributed to third-party investors is reflected as an adjustment to income in the Partnership’s Condensed Consolidated Statement of Comprehensive Income under the caption “(Income) loss attributable to noncontrolling interests-ORM Timber Funds.”
 
 
7

 
 
The Partnership’s consolidated balance sheet included assets and liabilities of the Funds as of June 30, 2013 and December 31, 2012, which were as follows:

(in thousands)
 
June 30, 2013
   
December 31, 2012
 
Assets:
           
Cash
  $ 745     $ 1,262  
Other current assets
    982       691  
Total current assets
    1,727       1,953  
Timber, timberland and roads (net of $25,446 and $20,664 of accumulated depletion in 2013 and 2012)
    171,120       175,410  
Other long-term assets
    104       111  
Total assets
  $ 172,951     $ 177,474  
Liabilities and equity:
               
Current liabilities excluding long-term debt
  $ 1,602     $ 1,413  
Current portion of long-term debt
    19       34  
Total current liabilities
    1,621       1,447  
Long-term debt
    11,000       11,002  
Total liabilities
    12,621       12,449  
Funds' equity
    160,330       165,025  
Total liabilities and equity
  $ 172,951     $ 177,474  

5.  
In the presentation of the Partnership’s revenue and operating income (loss) by segment, all intersegment revenue and expense is eliminated to determine operating income (loss) reported externally. The following tables reconcile internally reported income (loss) from operations to externally reported income (loss) from operations by business segment, for the three and six months ended June 30, 2013 and 2012:
 
 
8

 
 
    Fee Timber    
Timberland
                   
Three Months Ended
 
Pope
Resources
   
ORM
Timber
   
Total Fee
   
Management
&
   
Real
             
June 30, (in thousands)
 
Timber
   
Funds
   
Timber
   
Consulting
   
Estate
   
Other
   
Consolidated
 
2013
                                         
Revenue internal
  $ 8,552     $ 8,700     $ 17,252     $ 740     $ 6,127     $ -     $ 24,119  
Eliminations
    (140 )     -       (140 )     (740 )     (42 )     -       (922 )
Revenue external
    8,412       8,700       17,112       -       6,085       -       23,197  
                                                         
Cost of sales
    (3,499 )     (6,705 )     (10,204 )     -       (1,881 )     -       (12,085 )
                                                         
Operating, general and
                                                       
administrative expenses internal
    (1,115 )     (1,297 )     (2,412 )     (637 )     (858 )     (1,268 )     (5,175 )
Eliminations
    12       740       752       140       -       30       922  
Operating, general and
                                                       
administrative expenses external
    (1,103 )     (557 )     (1,660 )     (497 )     (858 )     (1,238 )     (4,253 )
                                                         
Income (loss) from operations
                                                 
internal
    3,938       698       4,636       103       3,388       (1,268 )     6,859  
Eliminations
    (128 )     740       612       (600 )     (42 )     30       -  
Income (loss) from operations
                                                 
external
  $ 3,810     $ 1,438     $ 5,248     $ (497 )   $ 3,346     $ (1,238 )   $ 6,859  
                                                         
2012
                                                       
Revenue internal
  $ 11,767     $ 5,819     $ 17,586     $ 612     $ 352     $ -     $ 18,550  
Eliminations
    (136 )     -       (136 )     (612 )     (12 )     -       (760 )
Revenue external
    11,631       5,819       17,450       -       340       -       17,790  
                                                         
Cost of sales
    (5,407 )     (4,947 )     (10,354 )     -       (347 )     -       (10,701 )
                                                         
Operating, general and
                                                       
administrative expenses internal
    (1,113 )     (1,198 )     (2,311 )     (559 )     (13,125 )*     (1,004 )     (16,999 )
Eliminations
    12       612       624       136       -       -       760  
Operating, general and
                                                       
administrative expenses external
    (1,101 )     (586 )     (1,687 )     (423 )     (13,125 )*     (1,004 )     (16,239 )
                                                         
Income (loss) from operations
                                                 
internal
    5,247       (326 )     4,921       53       (13,120 )     (1,004 )     (9,150 )
Eliminations
    (124 )     612       488       (476 )     (12 )     -       -  
Income (loss) from operations
                                                 
external
  $ 5,123     $ 286     $ 5,409     $ (423 )   $ (13,132 )   $ (1,004 )   $ (9,150 )
                                                         
*Includes $12.5 MM of environmental remediation expense
                         
 
 
9

 
 
    Fee Timber     
Timberland
                   
Six Months Ended
 
Pope
Resources
   
ORM
Timber
   
Total
   
Management
&
   
Real
             
June 30, (in thousands)
 
Timber
   
Funds
   
Fee Timber
   
Consulting
   
Estate
   
Other
   
Consolidated
 
2013
                                         
Revenue internal
  $ 19,757     $ 14,078     $ 33,835     $ 1,413     $ 6,444     $ -     $ 41,692  
Eliminations
    (281 )     -       (281 )     (1,413 )     (83 )     -       (1,777 )
Revenue external
    19,476       14,078       33,554       -       6,361       -       39,915  
                                                         
Cost of sales
    (8,020 )     (10,760 )     (18,780 )     -       (2,169 )     -       (20,949 )
                                                         
Operating, general and
                                                       
administrative expenses internal
    (2,147 )     (2,502 )     (4,649 )     (1,290 )     (1,697 )     (2,490 )     (10,126 )
Eliminations
    24       1,413       1,437       281       -       59       1,777  
Operating, general and
                                                       
administrative expenses external
    (2,123 )     (1,089 )     (3,212 )     (1,009 )     (1,697 )     (2,431 )     (8,349 )
                                                         
Income (loss) from operations
                                                 
internal
    9,590       816       10,406       123       2,578       (2,490 )     10,617  
Eliminations
    (257 )     1,413       1,156       (1,132 )     (83 )     59       -  
Income (loss) from operations
                                                 
external
  $ 9,333     $ 2,229     $ 11,562     $ (1,009 )   $ 2,495     $ (2,431 )   $ 10,617  
                                                         
2012
                                                       
Revenue internal
  $ 18,875     $ 7,355     $ 26,230     $ 1,088     $ 663     $ -     $ 27,981  
Eliminations
    (275 )     -       (275 )     (1,088 )     (24 )     -       (1,387 )
Revenue external
    18,600       7,355       25,955       -       639       -       26,594  
                                                         
Cost of sales
    (8,352 )     (6,143 )     (14,495 )     -       (625 )     -       (15,120 )
                                                         
Operating, general and
                                                       
administrative expenses internal
    (1,986 )     (2,002 )     (3,988 )     (1,082 )     (13,703 )*     (2,168 )     (20,941 )
Eliminations
    24       1,088       1,112       275       -       -       1,387  
Operating, general and
                                                       
administrative expenses external
    (1,962 )     (914 )     (2,876 )     (807 )     (13,703 )*     (2,168 )     (19,554 )
                                                         
Income (loss) from operations
                                                 
internal
    8,537       (790 )     7,747       6       (13,665 )     (2,168 )     (8,080 )
Eliminations
    (251 )     1,088       837       (813 )     (24 )     -       -  
Income (loss) from operations
                                                 
external
  $ 8,286     $ 298     $ 8,584     $ (807 )   $ (13,689 )   $ (2,168 )   $ (8,080 )
                                                         
*Includes $12.5 MM of environmental remediation expense
                         

6.
Basic and diluted earnings per unit are calculated by dividing net income attributable to unitholders, adjusted for non-forfeitable distributions paid out to unvested restricted unitholders and Fund II preferred shareholders, by the weighted average units outstanding during the period.
 
 
10

 
 
The following table shows how we arrived at basic and diluted income per unit:
 
   
Quarter Ended
   
Six Months Ended
 
   
June 30,
   
June 30,
 
(in thousands)
 
2013
   
2012
   
2013
   
2012
 
Net income (loss) attributable to Pope Resources' unitholders
  $ 6,128     $ (9,295 )   $ 9,612     $ (8,089 )
Less:
                               
Net income attributable to unvested restricted unitholders
    (263 )     (27 )     (410 )     (47 )
Dividends paid to Fund II preferred shareholders
    (4 )     (4 )     (8 )     (8 )
Net income (loss) for calculation of EPS
  $ 5,861     $ (9,326 )   $ 9,194     $ (8,144 )
                                 
Weighted average units outstanding (in thousands):
                               
Basic
    4,369       4,351       4,367       4,348  
Dilutive effect of unit equivalents
    -       -       -       -  
Diluted
    4,369       4,351       4,367       4,348  
Earnings (loss) per unit: Basic
  $ 1.34     $ (2.14 )   $ 2.11     $ (1.87 )
Earnings (loss) per unit: Diluted
  $ 1.34     $ (2.14 )   $ 2.11     $ (1.87 )
                                 
 
As of June 30, 2013 and 2012 there were no unexercised options.
 
7.  
In January 2013, the Partnership granted 30,200 restricted units pursuant to the management incentive compensation program. These restricted units vest ratably over four years with the grant date fair value equal to the market price on the date of grant. Simultaneous with the restricted unit grant to management, members of our Board of Directors received 6,000 restricted units. Restricted units granted to directors are not part of the management incentive compensation program, but are included in the calculation of total equity compensation expense. These awards to directors vest 50% on the third anniversary and 50% on the fourth anniversary of the date of grant. Total equity compensation expense is recognized over the shorter of the vesting period or the period from the date of grant to the point of retirement eligibility. We recognized $227,000 and $148,000 of equity compensation expense in the second quarter of 2013 and 2012, respectively, related to these incentive compensation programs. For the first half of 2013 and 2012, we recognized equity compensation expense of $763,000 and $519,000, respectively.
 
 
8.  
Supplemental disclosure of cash flow information: interest paid, net of amounts capitalized, totaled $614,000 and $718,000 for the first six months ended June 30, 2013 and 2012, respectively. During the six months ended June 30, 2013 the Company received an income tax refund of $240,000 compared to $247,000 paid during the six months ended June 30, 2012.

9.  
The Partnership’s financial instruments include cash and cash equivalents and accounts receivable, for which the carrying amount of each represents fair value based on current market interest rates or their short-term nature. Carrying amounts of contracts receivable, although long-term, also approximate fair value based on current market rates.
 
The Partnership’s and the Funds’ fixed-rate debt collectively have a carrying value of $43.8 million as of June 30, 2013 and December 31, 2012, respectively.   The estimated fair value of this debt, based on current interest rates for similar instruments (Level 2 inputs in the Fair Value Hierarchy), is approximately $48.1 million and $50.1 million, as of June 30, 2013 and December 31, 2012, respectively.
 
10.  
The Partnership, together with the State of Washington’s Department of Ecology (DOE), announced in March 2013 that the two parties have agreed in principle on the scope for the remaining environmental clean-up effort in and around Port Gamble Bay, a process that began in 2002.
 
 
11

 
 
Pope Resources and DOE continue to work toward a mutually acceptable consent decree, a legally binding agreement that will lay out how the remaining cleanup of allegedly impacted in-water sediments will be carried out.

The preliminary agreement, which is outlined below, includes:

·  
Removal of about 2,000 creosote pilings;
·  
Excavation of intertidal areas and dredging of wood waste from the bottom of Port Gamble Bay;
·  
Installation of a sand-cap of up to four feet in specific locations in Port Gamble Bay;
·  
Removal of all existing docks and overwater structures on and around the former Pope & Talbot Port Gamble mill site.

The clean-up effort, which will likely take a few years to complete, is estimated to cost $17 million.  We expect this cost will be shared by Pope Resources and the Washington State Department of Natural Resources (DNR), the other Potentially Liable Party as determined by DOE.  The Partnership and DNR have had preliminary discussions regarding how costs for the clean-up effort will be shared.

The Partnership had an accrual for estimated environmental remediation costs of $13.7 million as of June 30, 2013 and $13.9 million as of December 31, 2012. The environmental remediation liability primarily represents an estimate of the Partnership’s share of payments necessary to monitor and remedy certain areas in and around the town site and mill site at Port Gamble, Washington, and secondarily at Port Ludlow, Washington.

The environmental liability at June 30, 2013 includes an estimate of $497,000 that management expects to expend in the next 12 months and $13.2 million thereafter. In developing its estimate of the Port Gamble environmental liability, management has employed a Monte Carlo statistical simulation model that suggests a potential aggregate range of clean-up cost from $11.5 million to $16.1 million, which corresponds to a two-standard-deviation range from the mean of possible outcomes generated by the simulation model. This range could change as new information becomes available.


ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 
This report contains a number of projections and statements about our expected financial condition, operating results, and business plans and objectives. These statements reflect management’s estimates based upon our current goals, in light of management’s knowledge of existing circumstances and expectations about future developments. Statements about expectations and future performance are “forward looking statements” which describe our goals, objectives and anticipated performance. These statements are inherently uncertain, and some or all of these statements may not come to pass. Accordingly, you should not interpret these statements as promises that we will perform at a given level or that we will take any or all of the actions we currently expect to take. Our future actions, as well as our actual performance, will differ from our current expectations, and under various circumstances these deviations may be material and adverse. Some of the factors that may cause our actual operating results and financial condition to fall short of our expectations are set forth in the part of this report entitled “Risk Factors” in PART II, ITEM 1A below. Some of the issues that may have an adverse and material impact on our business, operating results and financial condition include economic conditions that affect consumer demand for our products and the prices we receive for them both domestically and overseas, particularly in certain parts of Asia; our ability to identify, and to estimate accurately the economic effects of, environmental and other liabilities associated with our assets and operations; government regulation that affects our ability to access our timberlands and harvest logs from those lands; the implications of indirect sales to overseas customers, including currency translation, regulatory and tax matters; the effect of financial market conditions on our investment portfolio and related liquidity; environmental and land use regulations that limit our ability to harvest timber and develop property; our ability to consummate proposed or contracted transactions, particularly in our Real Estate segment, in a manner that will yield revenue; the impacts of climate change and natural disasters on our timberlands and on surrounding areas; and the potential impacts of fluctuations in foreign currency exchange rates as they affect demand for our products and customers’ ability to pay. From time to time we identify other risks and uncertainties in our other filings with the Securities and Exchange Commission. The forward-looking statements in this report reflect our estimates and expectations as of the date of the report, and we cannot undertake to update these statements as our business operations and environment change.
 
 
12

 

This discussion should be read in conjunction with the condensed consolidated financial statements and related notes included with this report.
 
EXECUTIVE OVERVIEW

Pope Resources, A Delaware Limited Partnership (“we” or the “Partnership”), is engaged in three primary businesses. The first, and by far most significant segment in terms of owned assets and operations, is the Fee Timber segment. This segment includes timberlands owned directly by the Partnership and operations of the three private equity funds (“Funds”). When we refer to the timberland owned by the Partnership, we describe it as the Partnership’s tree farms. We refer to timberland owned by the Funds as the Funds’ tree farms. When referring collectively to the Partnership’s and Funds’ timberland we will refer to them as the Combined tree farms. Operations in this segment consist of growing timber to be harvested as logs for sale to export brokers and domestic manufacturers. The second most significant business in terms of total assets owned is the development and sale of real estate. Real Estate activities primarily take the form of securing permits, entitlements, and, in some cases, installing infrastructure for raw land development and then realizing that land’s value by selling larger parcels to buyers who will take the land further up the value chain, either to home buyers or to developers and lessors of commercial property. Since these land projects span multiple years, the Real Estate segment may incur losses for multiple years while a project is developed, and will not recognize operating income until that project is sold. In addition, within this segment we sometimes negotiate and sell development rights in the form of conservation easements (CE’s) on Fee Timber properties to preclude future development. Our third business, which we refer to as Timberland Management & Consulting, or “TM&C,” is engaged in organizing and managing private equity timber funds using capital invested by third parties and the Partnership.
 
Our current strategy for adding timberland acreage is centered on our private equity timber fund business model. We have closed and invested capital from three timber funds, with assets under management totaling $233 million in value based on appraisals for Funds I and II as of December 31, 2012 and an appraisal for Fund III as of June 30, 2013. Our original 20% co-investments in Funds I and II, and our 5% co-investment in Fund III, which collectively totaled $31 million as of June 30, 2013, afford us a share of the Funds’ operating cash flows while also allowing us to earn asset management and timberland management fees, as well as incentive fees, based upon the overall success of each fund. Management also believes that this strategy allows us to maintain more sophisticated expertise in timberland acquisition, valuation, and management than could be cost-effectively maintained for the Partnership’s timberlands alone. We believe our co-investment strategy also boosts our credibility with existing and prospective investors by demonstrating that we have both an operational and a financial commitment to the Funds’ success.
 
 
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We have closed on $180 million of committed capital for Fund III, $9 million of which represents our co-investment commitment.  In the fourth quarter of 2012 we acquired a property in northern California which represented our first acquisition with this committed capital.  As of June 30, 2013, $134 million of undrawn capital commitment remains which includes a commitment to Fund III by the Partnership of nearly $7 million.

The Funds are consolidated into our financial statements but then income or loss attributable to equity owned by third parties is removed from consolidated results in our Condensed Consolidated Statements of Comprehensive Income (Loss) under the caption “(Income) loss attributable to noncontrolling interests-ORM Timber Funds” to arrive at comprehensive income (loss) attributable to unitholders of the Partnership.

Land held for sale in western Washington by our Real Estate segment represents property that has been deemed suitable for residential and commercial building sites. The markets for these resources have suffered recently along with regional and national markets, producing a decline in segment sales. The challenge for our Real Estate segment centers around how and when to “harvest” a parcel of land and optimize value realization by selling the property, balancing the long-term risks and costs of carrying and developing a property against the potential for income and positive cash flows upon sale.

In May 2013, we entered into a purchase and sale agreement with a buyer who will acquire, for conservation purposes, approximately 535 acres of our property in Port Gamble, Washington, for $4.6 million.  We expect this transaction to close in the fourth quarter of 2013.
 
 
Second quarter highlights

·  
Harvest volume was 26.9 million board feet (MMBF) in Q2 2013 compared to 30.2 MMBF in Q2 2012, an 11% decrease.  Harvest volume for the first six months of 2013 was 53.3 MMBF compared to 44.7 MMBF for the first half of 2012, a 19% increase.   The harvest volume figures do not include two timber deed sales, one sold by one of our timber funds in Q2 2013 for 0.6 MMBF and the other from one of the Partnership’s tree farms in Q2 2012 for 4.4 MMBF.  Unless stated otherwise, all harvest volume and log price realization metrics cited below exclude these timber deed sales.

·  
Average realized log price per thousand board feet (MBF) was $620 in Q2 2013 compared to $532 per MBF in Q2 2012, a 17% increase.  For the first six months of 2013, the average realized log price per MBF was $615 compared to $541 per MBF for the first half of 2012, a 14% increase.

·  
Fund properties contributed 53% of Q2 2013 harvest volume, compared to 38% in Q2 2012.  For the first half of the 2013, Fund properties contributed 44% of harvest volume, compared to 32% for the first half of 2012.

·  
Mix of harvest volume sold to export markets in Q2 2013 increased to 33% from 15% in Q2 2012, while mix of harvest volume sold to domestic markets decreased to 49% in Q2 2013 from 69% in Q2 2012.  For the first half of the year, the relative percentages of harvest volume sold to export and domestic markets in 2013 were 30% and 54%, respectively, compared to 27% and 57% in 2012.

·  
The percentage of total harvest comprised of Douglas-fir logs dropped to 58% in Q2 2013 from 64% in Q2 2012, with a corresponding increase in the whitewood component to 23% in Q2 2013 from 19% in Q2 2012. Similarly, for the first half of 2013, the relative mix of Douglas-fir and whitewood was 64% and 18%, respectively, compared to 68% and 15% for the first half of 2012. This shift in species mix is consistent with the higher weighting of total harvest from Fund properties in both 2013’s second quarter and year-to-date periods compared to the prior year.

·  
Real Estate closed on a 2,330-acre conservation land sale for $5.7 million during Q2 2013 while last year’s second quarter for this segment had no real estate sales.
 
 
14

 
 
We expect our harvest volume for the full year 2013 to be between 88 and 91 MMBF, with the final total depending on log market conditions for the balance of the year. The projected split of this total harvest is approximately 55% from Partnership tree farms and 45% from Fund tree farms.  Generally speaking, we aim to set our annual Partnership tree farm harvest level at a long-term sustainable level, which approximates 44 MMBF based on our current timberland holdings.  During the depths of the housing downturn in 2008 through 2010, however, we deferred considerable harvest volume and now that markets appear to be recovering, we have been metering in that deferred volume.  With respect to Fund tree farms, our harvest targets are less guided by long-term sustainability models and more by ten-year harvest plans developed during property acquisition due diligence. These ten-year harvest plans are designed at a fund portfolio level to generate cash flows during the holding period with a view to optimizing total return over each Fund’s ten-year life.  Relative to the planned harvest level for the Fund tree farms, harvest volume was also deferred during the housing downturn, which we are also metering in as markets allow.

We anticipate that a number of land sales currently in the pipeline to close in 2013 will further boost net income for 2013 significantly above 2012 levels.


RESULTS OF OPERATIONS

The following table reconciles and compares key revenue and cost elements that impacted our net income (loss) for the respective quarter and year-to-date periods ended June 30, 2013 and June 30, 2012.  In addition to the table’s numerical analysis, the explanatory text that follows the table describes in detail certain of these changes by business segment.
 
 
15

 
 
         
Six Months
 
   
Quarter Ended
   
Ended
 
   
June 30,
   
June 30,
 
(in thousands)
 
Total
   
Total
 
Net income (loss) attributable to Pope Resources' unitholders:
           
2013 period
  $ 6,128     $ 9,612  
2012 period
    (9,295 )     (8,089 )
   Variance
  $ 15,423     $ 17,701  
Detail of variance:
               
Fee Timber
               
Log volumes (A)
  $ (1,764 )   $ 4,919  
Log price realizations (B)
    2,344       3,693  
Timber deed sales
    (908 )     (908 )
Production costs
    166       (2,972 )
Depletion
    (16 )     (1,314 )
Other Fee Timber
    17       (440 )
Timberland Management & Consulting
               
Other Timberland Management & Consulting
    (74 )     (202 )
Real Estate
               
Land sales
    4,253       4,253  
Timber depletion on land sale
    (295 )     (295 )
Other Real Estate
    20       (274 )
Environmental remediation costs
    12,500       12,500  
General & administrative costs
    (234 )     (263 )
Net interest expense
    32       70  
Other (taxes and noncontrolling interest)
    (618 )     (1,066 )
Total variances
  $ 15,423     $ 17,701  
 
(A)   Volume variance calculated by extending change in sales volume by the average log sales price for the comparison period.
(B)   Price variance calculated by extending the change in average realized price by current period sales volume.
 

Fee Timber
 
Fee Timber results include operations from 111,000 acres of timberland owned by the Partnership and 80,000 acres of timberland owned by the Funds. Fee Timber revenue is earned primarily from the harvest and sale of logs from these timberlands which are located in western Washington, northwestern Oregon, and northern California, and to a lesser extent, from the ground leases for cellular communication towers, gravel mines, and quarries, together with the sale of other resources from our timberlands. Our Fee Timber revenue is driven primarily by the volume of timber harvested and the average log price realized on the sale of that harvested timber. Our volume harvested is typically based on manufactured log sales to mills or log export brokers. We also occasionally sell rights to harvest timber (timber deed sale) from the Combined tree farms. During the second quarter of 2012, we executed a timber deed sale from the Partnership’s timberland, and in the second quarter of 2013, we executed a much smaller timber deed sale from the Funds’ timberland. The metrics used to calculate volumes sold and average price realized during the reporting periods exclude the timber deed sales, except where called out as including it. Harvest volumes are generally expressed in million board feet (MMBF) increments and harvest revenue and related costs are generally expressed in terms of revenue or cost per thousand board feet (MBF). Fee Timber expenses, which consist predominantly of harvest, haul, and depletion costs, vary directly and roughly proportionately with harvest volume and the resulting revenues. Revenue and costs related to harvest activities on timberland owned by the Funds are consolidated into this discussion of operations.
 
 
16

 
 
When discussing our Fee Timber operations, we compare the current quarter results to both the previous quarter and the corresponding quarter of the prior year, as well as the current year-to-date results to the prior year-to-date. These comparisons provide an opportunity to note trends in patterns of harvest volumes and log prices that affect Fee Timber operating results. Revenue and operating income for the Fee Timber segment for the quarters ended June 30, 2013, March 31, 2013, and June 30, 2012, were as follows:
 
(in millions)
Quarter ended
 
Log Sale
Revenue
   
Mineral,
Cell Tower
& Other
Revenue
   
Total Fee
Timber
Revenue
   
Operating
Income
   
Harvest
Volume
(MMBF)
 
Partnership tree farms
  $ 8.1     $ 0.3     $ 8.4     $ 3.8       12.9  
Funds' tree farms
    8.6       0.1       8.7       1.4       14.0  
Total Fee Timber June 30, 2013
  $ 16.7     $ 0.4     $ 17.1     $ 5.2       26.9  
                                         
Partnership tree farms
  $ 10.8     $ 0.3     $ 11.1     $ 5.5       17.1  
Funds' tree farms
    5.3       -       5.3       0.8       9.4  
Total Fee Timber March 31, 2013
  $ 16.1     $ 0.3     $ 16.4     $ 6.3       26.5  
                                         
Partnership tree farms
  $ 10.3     $ 1.3     $ 11.6     $ 5.1       18.8  
Funds' tree farms
    5.8       -       5.8       0.3       11.4  
Total Fee Timber June 30, 2012
  $ 16.1     $ 1.3     $ 17.4     $ 5.4       30.2  
 
Comparing Q2 2013 to Q1 2013. Both export and domestic sawlog markets continued the strength exhibited in Q1 2013 with incremental improvement in Q2 2013. As such, Fee Timber revenue in Q2 2013 increased $670,000, or 4%, from $16.4 million in Q1 2013 to $17.1 million in Q2 2013. This increase was attributable to a 2% increase in harvest volume and a 2% increase in realized log prices from Q1 2013 to Q2 2013. The revenue increase was also aided by a $118,000 timber deed sale comprising 0.6 MMBF of volume from one of the Funds’ tree farms during Q2 2013, which appears in the table above in the “Mineral, Cell Tower & Other Revenue” column.
 
Operating income of $5.2 million for Q2 2013 was $1.1 million, or 17%, lower than Q1 2013 primarily as a result of a 35% increase in depletion expense on a per MBF basis due to the increase in the proportion of harvest volume coming from the Funds, which was 53% in Q2 2013 versus 35% in Q1 2013. Since the Funds’ tree farms were acquired much more recently than the Partnership’s tree farms, the former have a significantly higher acquisition cost, and accordingly the resulting depletion rate for those properties is substantially higher.
 
Fee Timber revenue from the Funds increased $3.3 million, or 62%, from Q1 2013 to Q2 2013 on a 4.6 MMBF increase in harvest volume, stronger log pricing, and to a lesser degree, the aforementioned 0.6 MMBF timber deed sale. The increase in harvest volume is the result of decisions made during Q4 2012, when we accelerated planned Fund harvest volume from Q1 2013 to take advantage of rising log prices, thus reducing Q1 2013 volume. Operating income for the Funds increased $647,000, or 82%, from $791,000 in Q1 2013 to $1.4 million in Q2 2013.
 
Comparing Q2 2013 to Q2 2012. Fee Timber revenue declined $338,000, or 2%, from $17.4 million in Q2 2012 to $17.1 million Q2 2013. The decrease was driven primarily by a decline in timber deed sale revenue from $1.0 million on 4.4 MMBF from one of the Partnership’s tree farms in Q2 2012 to $118,000 on 0.6 MMBF from one of the Funds’ tree farms in Q2 2013. Revenue from timber deed sales appears in the table above in the “Mineral, Cell Tower & Other Revenue” column. The revenue decline was also impacted by an 11% reduction in harvest volume, partially offset by a 17% increase in realized log prices from Q2 2012 to Q2 2013. Operating income declined $161,000, or 3%, from Q2 2012 to Q2 2013 due to the decrease in revenue and a heavier mix of harvest from the Fund properties, which carry a higher depletion expense rate per MBF.
 
 
17

 
 
Fee Timber revenue from the Funds increased $2.9 million, or 50%, from Q2 2012 to Q2 2013 on a 2.6 MMBF increase in harvest volume, stronger log pricing, and to a lesser degree, the aforementioned 0.6 MMBF timber deed sale. Operating income increased from $286,000 in Q2 2012 to $1.4 million in Q2 2013 due to the increase in revenue.
 
Revenue and operating income for the Fee Timber segment for year-to-date periods ended June 30, 2013, and June 30, 2012, were as follows:
 
(in millions)
Six Months Ended
 
Log Sale
Revenue
   
Mineral,
Cell Tower
& Other
Revenue
   
Total Fee
Timber
Revenue
   
Operating
Income
   
Harvest
Volume
(MMBF)
 
Partnership tree farms
  $ 18.9     $ 0.6     $ 19.5     $ 9.4       29.9  
Funds' tree farms
    14.0       0.1       14.1       2.2       23.4  
Total Fee Timber June 30, 2013
  $ 32.9     $ 0.7     $ 33.6     $ 11.6       53.3  
                                         
Partnership tree farms
  $ 16.9     $ 1.7     $ 18.6     $ 8.3       30.5  
Funds' tree farms
    7.3       -       7.3       0.3       14.2  
Total Fee Timber June 30, 2012
  $ 24.2     $ 1.7     $ 25.9     $ 8.6       44.7  
 
Comparing YTD 2013 to YTD 2012. Fee Timber revenue for the first half of 2013 increased by $7.6 million, or 29%, over the comparable period in 2012. The increase is attributable to strengthening log markets in 2013 relative to 2012 leading to an 8.6 MMBF, or 19%, increase in harvest volume, combined with a $74/MBF, or 14%, increase in realized log price. Partially offsetting the increased log sale revenue was a $908,000 decrease in revenue from timber deed sales from the first half of 2012 to the first half of 2013, which is included in the “Mineral, Cell Tower & Other Revenue” column in the above table. These factors combined to lead to a $3.0 million, or 35%, increase in operating income in the first half of 2013 versus the comparable period in 2012. The improved operating income would have been more pronounced if not for the Funds’ share of harvest volume increasing from 32% in the first half of 2012 to 44% in the first half of 2013, which led to an increase in depletion expense.
 
Log Volume
 
We harvested the following log volumes by species from the Combined tree farms, exclusive of the aforementioned timber deed sales, for the quarters ended June 30, 2013, March 31, 2013, and June 30, 2012:
 
 
18

 
 
Volume (in MMBF)
 
Quarter Ended
 
Sawlogs
   
Jun-13
   
% Total
   
Mar-13
   
% Total
   
Jun-12
   
% Total
 
 
Douglas-fir
    15.7       58 %     18.3       69 %     19.3       64 %
 
Whitewood
    6.1       23 %     3.6       13 %     5.8       19 %
 
Cedar
    0.4       1 %     0.4       2 %     0.3       1 %
 
Hardwood
    0.8       3 %     0.6       2 %     1.1       4 %
Pulpwood
                                                 
 
All Species
    3.9       15 %     3.6       14 %     3.7       12 %
Total
      26.9       100 %     26.5       100 %     30.2       100 %
 
Comparing Q2 2013 to Q1 2013. Harvest volume increased a modest 0.4 MMBF, or 2%, from Q1 2013 to Q2 2013 which reflects the prior quarter’s decision to pull volume forward into Q1 2013 to take advantage of strong pricing, thus moderating the more typical seasonal pattern of increased harvest volume in the second quarter when weather improves. Douglas-fir harvest volume, as a percent of overall harvest, decreased from 69% in Q1 2013 to 58% in Q2 2013, while whitewood harvest volume increased from 13% in Q1 2013 to 23% in Q2 2013. This shift in mix from Douglas-fir to whitewood is due to strong demand from the China export market for whitewood, seasonally better access to high elevation stands where whitewood is more prevalent, and an increase in the Funds’ portion of the Combined harvest volume from 35% in Q1 2013 to 53% in Q2 2013. The Funds’ tree farms have a heavier mix of whitewood relative to the Partnership’s tree farms.
 
 Comparing Q2 2013 to Q2 2012. Harvest volume decreased by 3.3 MMBF, or 11%, from Q2 2012 to the comparable period in 2013. The decrease reflects decisions in 2012 to delay harvest activity from the first quarter to the second quarter due to lukewarm early-2012 demand from the China export log market.  These Q1 2012 influences led to increased Q2 2012 harvest activities relative to Q2 2013.  By contrast, in 2013 we pulled volume forward into the first quarter to take advantage of strong pricing. The mix of volume coming from the Partnership’s and Funds’ tree farms was 62% and 38%, respectively, in Q2 2012, compared with 47% and 53%, respectively, in Q2 2013. This shift in tree farm mix contributed to an overall decline in the relative percentage of Douglas-fir harvest volume from 64% in Q2 2012 to 58% in Q2 2013, and a commensurate increase in whitewood harvest volume from 19% in Q2 2012 to 23% in Q2 2013. There was a slight increase in the percentage of pulpwood volumes from 12% in Q2 2012 to 15% in Q2 2013 due primarily to the mix of the stands harvested in Q2 2013.
 
We harvested the following log volumes by species from the Combined tree farms, exclusive of the aforementioned timber deed sales, for the six months ended June 30, 2013, and June 30, 2012:
 
Volume (in MMBF)
 
Six Months Ended
 
Sawlogs
   
Jun-13
   
% Total
   
Jun-12
   
% Total
 
 
Douglas-fir
    34.0       64 %     30.4       68 %
 
Whitewood
    9.6       19 %     6.7       15 %
 
Cedar
    0.8       1 %     0.4       1 %
 
Hardwood
    1.4       4 %     1.5       3 %
Pulpwood
                                 
 
All Species
    7.5       12 %     5.7       13 %
Total
      53.3       100 %     44.7       100 %
 
Comparing YTD 2013 to YTD 2012. Harvest volume increased 8.6 MMBF, or 19%, in the first six months of 2013 versus the corresponding period in 2012. The increase in volume is in response to a stronger domestic market that was cutting lumber for the improving U.S. housing market, as well as improved demand and pricing for logs from Asian export markets.  The slight shift in mix from Douglas-fir in 2012 to whitewood in 2013 is attributable to the decline in relative harvest volume off the Partnership’s timberland from 68% in 2012 to 56% in 2013 and commensurate increase in relative harvest volume off the Funds’ timberland from 32% in 2012 to 44% in 2013.
 
 
19

 

Log Prices
 
Logs from the Combined tree farms serve a number of different domestic and export markets, with domestic mills historically representing our largest market destination. This customer mix shifted in 2010, when log exporters in the Pacific Northwest began shipping more volume to China, which accepts lower quality logs, than had traditionally been exported to other markets such as Japan. As a result, significant volumes that theretofore had been sold to domestic mills instead flowed to the China market.  As a result, our export mix surged in 2010 to 33% of total volume and peaked at 45% in 2011 before falling back to 25% in 2012. From 2010 through the third quarter of 2011, the relative strength of the China export market was a driving force for much of our log pricing. This shifted during the fourth quarter of 2011 when oversupply in China abruptly reduced demand from that now important market. As a result, a greater proportion of our log supply was sold to domestic mills beginning in 2011’s fourth quarter.  In the first quarter of 2012 most of our export volume was comprised of higher-value Douglas-fir logs going to Japan. This mix, however, shifted once again during the second quarter of 2012 with improved lumber demand from higher housing starts, and increased demand from a limited portion of the domestic market that manufactured high-grade Douglas-fir logs for high-value Japanese lumber grades. As log inventories in China were worked down during the first half of 2012, we experienced greater demand from China during the second half of 2012. This shift continued to the end of 2012 and into the first half of 2013.

We realized the following log prices by species for the quarters ended June 30, 2013, March 31, 2013, and June 30, 2012:
 
     
Quarter Ended
 
     
Jun-13
   
Mar-13
   
Jun-12
 
Average price
       
Sawlogs
                   
 
Douglas-fir
  $ 697     $ 670     $ 571  
 
Whitewood
    620       587       500  
 
Cedar
    1,253       1,125       1,037  
 
Hardwood
    521       519       598  
Pulpwood
All Species
    265       286       323  
Overall
      620       610       532  
 
The following table compares the dollar and percentage change in log prices from Q1 2013 and Q2 2012 to Q2 2013:

     
Change to June 2013 from Quarter Ended
 
     
Mar-13
   
Jun-12
 
     
$/MBF
   
%
   
$/MBF
   
%
 
Sawlogs
Douglas-fir
  $ 27       4 %   $ 126       22 %
 
Whitewood
    33       6 %     120       24 %
 
Cedar
    128       11 %     216