( X ) | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
( ) | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 91-1313292 |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification Number) |
Large Accelerated Filer o | Accelerated Filer x | Emerging growth company o | |
Non-accelerated Filer o | Smaller Reporting Company o |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Depositary Receipts (Units) | POPE | NASDAQ Capital Market |
Description | Page Number |
2019 | 2018 | ||||||
ASSETS | |||||||
Current assets | |||||||
Partnership cash | $ | 1,977 | $ | 1,784 | |||
ORM Timber Funds cash | 2,813 | 3,330 | |||||
Cash | 4,790 | 5,114 | |||||
Restricted cash | 844 | 943 | |||||
Total cash and restricted cash | 5,634 | 6,057 | |||||
Accounts receivable, net | 7,062 | 4,670 | |||||
Contract assets | 2,866 | 2,872 | |||||
Land held for sale | 6,656 | 5,697 | |||||
Prepaid expenses and other current assets | 957 | 1,070 | |||||
Total current assets | 23,175 | 20,366 | |||||
Properties and equipment, at cost | |||||||
Timber and roads | 389,180 | 377,970 | |||||
Timberland | 77,011 | 74,267 | |||||
Land held for development | 20,954 | 20,891 | |||||
Buildings and equipment, net of accumulated depreciation (2019 - $8,108; 2018 - $8,223) | 5,605 | 5,500 | |||||
Total property and equipment, at cost | 492,750 | 478,628 | |||||
Other assets | 7,825 | 9,255 | |||||
Total assets | $ | 523,750 | $ | 508,249 | |||
LIABILITIES, PARTNERS’ CAPITAL AND NONCONTROLLING INTERESTS | |||||||
Current liabilities | |||||||
Accounts payable | $ | 2,681 | $ | 2,379 | |||
Accrued liabilities | 4,004 | 5,191 | |||||
Current portion of long-term debt - Partnership | 129 | 128 | |||||
Deferred revenue | 422 | 336 | |||||
Current portion of environmental remediation liability | 925 | 1,082 | |||||
Other current liabilities | 1,284 | 865 | |||||
Total current liabilities | 9,445 | 9,981 | |||||
Long-term debt, net of unamortized debt issuance costs and current portion - Partnership | 99,013 | 93,928 | |||||
Long-term debt, net of unamortized debt issuance costs - Funds | 57,318 | 57,313 | |||||
Environmental remediation and other long-term liabilities | 8,293 | 8,427 | |||||
Partners’ capital and noncontrolling interests | |||||||
General partners' capital (units issued and outstanding 2019 - 60; 2018 - 60) | 936 | 944 | |||||
Limited partners' capital (units issued and outstanding 2019 - 4,266; 2018 - 4,253) | 55,858 | 56,533 | |||||
Noncontrolling interests | 292,887 | 281,123 | |||||
Total partners’ capital and noncontrolling interests | 349,681 | 338,600 | |||||
Total liabilities, partners’ capital and noncontrolling interests | $ | 523,750 | $ | 508,249 |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Revenue | $ | 25,042 | $ | 24,987 | |||
Cost of sales | (16,608 | ) | (12,300 | ) | |||
Operating expenses | (4,294 | ) | (4,109 | ) | |||
General and administrative expenses | (1,764 | ) | (1,621 | ) | |||
Income from operations | 2,376 | 6,957 | |||||
Interest expense, net | (1,515 | ) | (1,144 | ) | |||
Income before income taxes | 861 | 5,813 | |||||
Income tax expense | (94 | ) | (98 | ) | |||
Net and comprehensive income | 767 | 5,715 | |||||
Net and comprehensive loss attributable to noncontrolling interests - ORM Timber Funds | 2,528 | 3 | |||||
Net and comprehensive loss attributable to noncontrolling interests - Real Estate | 16 | — | |||||
Net and comprehensive income attributable to unitholders | $ | 3,311 | $ | 5,718 | |||
Allocable to general partners | $ | 46 | $ | 79 | |||
Allocable to limited partners | 3,265 | 5,639 | |||||
Net and comprehensive income attributable to unitholders | $ | 3,311 | $ | 5,718 | |||
Basic and diluted earnings per unit attributable to unitholders | $ | 0.75 | $ | 1.31 | |||
Basic and diluted weighted average units outstanding | 4,325 | 4,321 | |||||
Distributions per unit | $ | 1.00 | $ | 0.70 |
Attributable to Pope Resources | ||||||||||||||||||
Units | General Partners | Limited Partners | Noncontrolling Interests | Total | ||||||||||||||
December 31, 2018 | 4,313 | $ | 944 | $ | 56,533 | $ | 281,123 | $ | 338,600 | |||||||||
Net income | — | 46 | 3,265 | (2,544 | ) | 767 | ||||||||||||
Cash distributions | — | (61 | ) | (4,305 | ) | (3,076 | ) | (7,442 | ) | |||||||||
Capital call | — | — | — | 17,259 | 17,259 | |||||||||||||
Preferred stock issuance | — | — | — | 125 | 125 | |||||||||||||
Equity-based compensation | 17 | 8 | 585 | — | 593 | |||||||||||||
Units issued under distribution reinvestment plan | — | — | 24 | — | 24 | |||||||||||||
Unit repurchases | (3 | ) | — | (166 | ) | — | (166 | ) | ||||||||||
Payroll taxes paid on unit net settlements | (1 | ) | (1 | ) | (78 | ) | — | (79 | ) | |||||||||
March 31, 2019 | 4,326 | $ | 936 | $ | 55,858 | $ | 292,887 | $ | 349,681 |
Attributable to Pope Resources | ||||||||||||||||||
Units | General Partners | Limited Partners | Noncontrolling Interests | Total | ||||||||||||||
December 31, 2017 | 4,311 | $ | 1,028 | $ | 63,519 | $ | 176,079 | $ | 240,626 | |||||||||
Net income | — | 79 | 5,639 | (3 | ) | 5,715 | ||||||||||||
Cash distributions | — | (42 | ) | (3,010 | ) | (3,481 | ) | (6,533 | ) | |||||||||
Capital call | — | — | — | 92,280 | 92,280 | |||||||||||||
Equity-based compensation | 15 | 7 | 516 | — | 523 | |||||||||||||
Units issued under distribution reinvestment plan | 1 | — | 59 | — | 59 | |||||||||||||
Unit repurchases | (4 | ) | — | (292 | ) | — | (292 | ) | ||||||||||
Payroll taxes paid on unit net settlements | (1 | ) | (1 | ) | (101 | ) | — | (102 | ) | |||||||||
March 31, 2018 | 4,322 | $ | 1,071 | $ | 66,330 | $ | 264,875 | $ | 332,276 |
2019 | 2018 | ||||||
Net income | $ | 767 | $ | 5,715 | |||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||
Depletion | 6,534 | 4,717 | |||||
Equity-based compensation | 593 | 523 | |||||
Depreciation and amortization | 166 | 140 | |||||
Deferred taxes and other | 23 | 45 | |||||
Cost of land sold | 2 | — | |||||
Loss from unconsolidated real estate joint venture | 9 | — | |||||
Gain on disposal of property and equipment | (61 | ) | (4 | ) | |||
Cash flows from changes in operating accounts | |||||||
Accounts receivable, net | (2,026 | ) | 1,943 | ||||
Prepaid expenses, contract assets, and other assets | 517 | (203 | ) | ||||
Real estate project expenditures | (1,023 | ) | (278 | ) | |||
Accounts payable and accrued liabilities | (736 | ) | (1,979 | ) | |||
Deferred revenue | 86 | 245 | |||||
Environmental remediation payments | (158 | ) | (219 | ) | |||
Other current and long-term liabilities | 285 | 27 | |||||
Net cash provided by operating activities | 4,978 | 10,672 | |||||
Cash flows from investing activities | |||||||
Reforestation and roads | (644 | ) | (892 | ) | |||
Capital expenditures | (252 | ) | (274 | ) | |||
Proceeds from sale of property and equipment | 71 | 4 | |||||
Deposit for acquisition of timberland - Partnership | (5 | ) | — | ||||
Acquisitions of timberland - Partnership | (16 | ) | (4,626 | ) | |||
Acquisitions of timberland - Funds | (19,344 | ) | (108,379 | ) | |||
Net cash used in investing activities | (20,190 | ) | (114,167 | ) | |||
Cash flows from financing activities | |||||||
Line of credit borrowings | 4,500 | 19,800 | |||||
Line of credit repayments | (2,400 | ) | (1,500 | ) | |||
Proceeds from issuance of long-term debt | 3,000 | — | |||||
Repayment of long-term debt | (32 | ) | (31 | ) | |||
Proceeds from unit issuances - distribution reinvestment plan | 24 | 59 | |||||
Unit repurchases | (166 | ) | (292 | ) | |||
Proceeds from preferred stock issuance - ORM Timber Funds | 125 | — | |||||
Payroll taxes paid on unit net settlements | (79 | ) | (102 | ) | |||
Cash distributions to unitholders | (4,366 | ) | (3,052 | ) | |||
Cash distributions - ORM Timber Funds, net of distributions to Partnership | (3,076 | ) | (3,481 | ) | |||
Capital call - ORM Timber Funds, net of Partnership contribution | 17,259 | 92,280 | |||||
Net cash provided by financing activities | 14,789 | 103,681 | |||||
Net increase (decrease) in cash and restricted cash | (423 | ) | 186 | ||||
Cash and restricted cash at beginning of period | 6,057 | 5,284 | |||||
Cash and restricted cash at end of period | $ | 5,634 | $ | 5,470 |
1. | The condensed consolidated balance sheets as of March 31, 2019, and December 31, 2018, and the related condensed consolidated statements of comprehensive income, partners’ capital, and cash flows for the three-month periods ended March 31, 2019, and 2018, 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, 2018, is derived from the Partnership’s audited consolidated financial statements and notes thereto for the year ended December 31, 2018, 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, 2019. |
2. | The financial statements in the Partnership’s 2018 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. | Revenue is measured based on the consideration specified in a contract with a customer. The Partnership recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. Included in “Accounts receivable, net” are $6.1 million and $3.0 million of receivables from contracts with customers as of March 31, 2019, and December 31, 2018, respectively. |
Contract assets, December 31, 2018 | $ | 3,829 | |
Transferred to receivables from contract assets | (720 | ) | |
Contract assets, March 31, 2019 | 3,109 | ||
Less: noncurrent portion included in other assets | (243 | ) | |
Current portion of contract assets, March 31, 2019 | $ | 2,866 |
(in thousands) | Quarter ended March 31, | ||||||
2019 | 2018 | ||||||
Partnership Timber | |||||||
Log sale revenue | $ | 14,722 | $ | 14,635 | |||
Other revenue | 449 | 503 | |||||
Total revenue | $ | 15,171 | $ | 15,138 | |||
Funds Timber | |||||||
Log sale revenue | $ | 8,860 | $ | 9,509 | |||
Other revenue | 580 | 32 | |||||
Total revenue | $ | 9,440 | $ | 9,541 |
Quarter ended March 31, | |||||||
2019 | 2018 | ||||||
Unimproved land | $ | 22 | $ | — | |||
Rentals and other | 409 | 308 | |||||
Total revenue | $ | 431 | $ | 308 |
4. | The Partnership is both a lessee and a lessor. A contract is determined to contain a lease if there is an identified asset to which the lessee has the right to substantially all of the economic benefits and has control over how the asset is used throughout the contract period. The Partnership elected the practical expedients to not separate lease and non-lease components for all of its leases. |
March 31, 2019 | Balance Sheet caption | ||||
Right of use assets | $ | 250 | Other assets | ||
Lease liability - current | $ | 159 | Other current liabilities | ||
Lease liability - long-term | $ | 91 | Environmental remediation and other long-term liabilities |
(In thousands, except weighted-average information) | |||
Lease cost | |||
Operating lease cost | $ | 47 | |
Variable lease cost | 2 | ||
Total lease cost | $ | 49 | |
Other lease information | |||
Cash paid for amounts included in the measurement of lease liabilities | $ | 49 | |
Right-of-use asset obtained in exchange for new leases | $ | 16 | |
Weighted-average remaining lease term in years | 1.7 | ||
Weighted average discount rate | 4.2 | % |
2019 | $ | 164 | |
2020 | 78 | ||
2021 | 14 | ||
2022 | — | ||
2023 | — | ||
Thereafter | — | ||
Unamortized discount | (6 | ) | |
Total lease liability at March 31, 2019 | $ | 250 |
Lease Income | |||
Operating lease income | $ | 403 | |
Variable lease income | 20 | ||
Total lease income | $ | 423 |
2019 | $ | 835 | |
2020 | 759 | ||
2021 | 673 | ||
2022 | 630 | ||
2023 | 587 | ||
Thereafter | 4,045 | ||
Total | $ | 7,529 |
5. | The Partnership has two general partners: Pope MGP, Inc. and Pope EGP, Inc. In total, these two entities own 60,000 limited partner units. The allocation of distributions, profits, and losses among the general and limited partners is pro rata across all units outstanding. |
6. | ORM Timber Fund II, Inc. (Fund II), ORM Timber Fund III (REIT) Inc. (Fund III), and ORM Timber Fund IV LLC (Fund IV), collectively “the Funds”, were formed by Olympic Resource Management LLC (ORMLLC), a wholly owned subsidiary of the Partnership, for the purpose of raising capital to purchase timberlands. The objective of these Funds is to generate a return on investments through the acquisition, management, value enhancement, and sale of timberland properties. Each fund is organized to operate for a specific term from the end of its respective investment period; 10 years for each of Fund II and Fund III, and 15 years for Fund IV. Fund II and Fund III are scheduled to terminate in March 2021 |
(in thousands) | March 31, 2019 | December 31, 2018 | |||||
Assets: | |||||||
Cash | $ | 2,813 | $ | 3,330 | |||
Contract assets | 2,799 | 2,780 | |||||
Other current assets | 3,503 | 2,151 | |||||
Total current assets | 9,115 | 8,261 | |||||
Properties and equipment, net of accumulated depreciation | 375,556 | 360,163 | |||||
Other long-term assets | 243 | 1,962 | |||||
Total assets | $ | 384,914 | $ | 370,386 | |||
Liabilities and equity: | |||||||
Current liabilities | $ | 3,866 | $ | 3,237 | |||
Long-term debt, net of unamortized debt issuance costs | 57,318 | 57,313 | |||||
Other long-term liabilities | 100 | 300 | |||||
Funds’ equity | 323,630 | 309,536 | |||||
Total liabilities and equity | $ | 384,914 | $ | 370,386 |
7. | Other assets consisted of the following at March 31, 2019 and December 31, 2018: |
March 31, 2019 | December 31, 2018 | ||||||
Investment in Real Estate joint venture entity | $ | 5,882 | $ | 5,891 | |||
Advances to Real Estate joint venture entity | 873 | 804 | |||||
Deferred tax assets, net | 518 | 541 | |||||
Right-of-use assets | 250 | — | |||||
Contract assets | 243 | 957 | |||||
Note receivable | 54 | 57 | |||||
Deposits for acquisitions of timberland | 5 | 1,005 | |||||
Total | $ | 7,825 | $ | 9,255 |
8. | In the presentation of the Partnership’s revenue and operating income (loss) by segment, all intersegment revenue and expense is eliminated to determine operating income (loss) reported externally. The following tables reconcile internally reported income (loss) from operations to externally reported income (loss) from operations by business segment. |
Quarter ended March 31, (in thousands) | Partnership Timber | Funds Timber | Timberland Investment Management | Real Estate | Other | Consolidated | ||||||||||||||||||
2019 | ||||||||||||||||||||||||
Revenue - internal | $ | 15,372 | $ | 9,440 | $ | 1,363 | $ | 551 | $ | — | $ | 26,726 | ||||||||||||
Eliminations | (201 | ) | — | (1,363 | ) | (120 | ) | — | (1,684 | ) | ||||||||||||||
Revenue - external | 15,171 | 9,440 | — | 431 | — | 25,042 | ||||||||||||||||||
Cost of sales | (7,188 | ) | (9,139 | ) | — | (281 | ) | — | (16,608 | ) | ||||||||||||||
Operating, general and administrative expenses - internal | (1,317 | ) | (2,489 | ) | (1,290 | ) | (856 | ) | (1,790 | ) | (7,742 | ) | ||||||||||||
Eliminations | 245 | 1,311 | 69 | 33 | 26 | 1,684 | ||||||||||||||||||
Operating, general and administrative expenses - external | (1,072 | ) | (1,178 | ) | (1,221 | ) | (823 | ) | (1,764 | ) | (6,058 | ) | ||||||||||||
Income (loss) from operations - internal | 6,867 | (2,188 | ) | 73 | (586 | ) | (1,790 | ) | 2,376 | |||||||||||||||
Eliminations | 44 | 1,311 | (1,294 | ) | (87 | ) | 26 | — | ||||||||||||||||
Income (loss) from operations - external | $ | 6,911 | $ | (877 | ) | $ | (1,221 | ) | $ | (673 | ) | $ | (1,764 | ) | $ | 2,376 | ||||||||
2018 | ||||||||||||||||||||||||
Revenue - internal | $ | 15,247 | $ | 9,541 | $ | 1,024 | $ | 443 | $ | — | $ | 26,255 | ||||||||||||
Eliminations | (109 | ) | — | (1,024 | ) | (135 | ) | — | (1,268 | ) | ||||||||||||||
Revenue - external | 15,138 | 9,541 | — | 308 | — | 24,987 | ||||||||||||||||||
Cost of sales | (5,026 | ) | (6,952 | ) | — | (322 | ) | — | (12,300 | ) | ||||||||||||||
Operating, general and administrative expenses - internal | (1,510 | ) | (1,806 | ) | (1,076 | ) | (955 | ) | (1,651 | ) | (6,998 | ) | ||||||||||||
Eliminations | 159 | 1,024 | 20 | 35 | 30 | 1,268 | ||||||||||||||||||
Operating, general and administrative expenses -external | (1,351 | ) | (782 | ) | (1,056 | ) | (920 | ) | (1,621 | ) | (5,730 | ) | ||||||||||||
Income (loss) from operations - internal | 8,711 | 783 | (52 | ) | (834 | ) | (1,651 | ) | 6,957 | |||||||||||||||
Eliminations | 50 | 1,024 | (1,004 | ) | (100 | ) | 30 | — | ||||||||||||||||
Income (loss) from operations - external | $ | 8,761 | $ | 1,807 | $ | (1,056 | ) | $ | (934 | ) | $ | (1,621 | ) | $ | 6,957 |
9. | Basic and diluted earnings per unit are calculated by dividing net income attributable to unitholders, adjusted for non-forfeitable distributions paid out to unvested restricted unitholders and preferred shareholders of Fund II and Fund III, by the weighted average units outstanding during the period. There were no dilutive securities outstanding during the periods presented. The following table shows the calculation of basic and diluted earnings per unit: |
Quarter Ended March 31, | |||||||
(in thousands, except per unit amounts) | 2019 | 2018 | |||||
Net and comprehensive income attributable to Pope Resources’ unitholders | $ | 3,311 | $ | 5,718 | |||
Less: | |||||||
Non-forfeitable distributions paid to unvested restricted unitholders | (38 | ) | (45 | ) | |||
Preferred share dividends - ORM Timber Funds | (12 | ) | (8 | ) | |||
Net and comprehensive income for calculation of earnings per unit | $ | 3,261 | $ | 5,665 | |||
Basic and diluted weighted average units outstanding | 4,325 | 4,321 | |||||
Basic and diluted net earnings per unit | $ | 0.75 | $ | 1.31 |
10. | In the first quarter of 2019, the Partnership issued 11,504 restricted units pursuant to the management incentive compensation program and 3,600 restricted units to members of the Board of Directors. These restricted units vest ratably over four years with the grant date fair value equal to the market price on the date of grant. During the three months ended March 31, 2019, 432 units were granted with no restrictions to certain board members who elected to receive their quarterly board compensation in the form of units rather than cash. Units granted to directors are included in the calculation of total equity compensation expense which is recognized over the vesting period, for restricted units, or immediately for unrestricted units. Grants to retirement-eligible individuals on the date of grant are expensed immediately. The Partnership recognized $593,000 and $523,000 of equity compensation expense in the first quarter of 2019 and 2018, respectively, related to these compensation programs. |
11. | Supplemental disclosure of cash flow information: interest paid, net of amounts capitalized, totaled $415,000 and $508,000 during the first three months of 2019 and 2018, respectively. Income taxes paid totaled $20,000 and $338,000 for the first three months of 2019 and 2018, respectively. |
12. | The Partnership’s financial instruments include cash, accounts receivable, and a note receivable, included in other assets, for which the carrying amount of each represents fair value based on current market interest rates or their short-term nature. |
13. | The Partnership had an accrual for estimated environmental remediation costs of $8.9 million and $9.1 million as of March 31, 2019 and December 31, 2018, respectively. The environmental remediation liability represents management’s estimate of payments to be made to remedy and monitor certain areas in and around Port Gamble Bay, Washington. The liability at March 31, 2019 is comprised of $925,000 that management expects to expend in the next 12 months and $8.0 million thereafter. |
(in thousands) | Balance at Beginning of the Period | Additions to Accrual | Expenditures for Remediation | Balance at Period-end | |||||||||||
Year ended December 31, 2017 | $ | 12,770 | $ | — | $ | (7,791 | ) | $ | 4,979 | ||||||
Year ended December 31, 2018 | 4,979 | 5,600 | (1,496 | ) | 9,083 | ||||||||||
Quarter ended March 31, 2019 | 9,083 | — | (158 | ) | 8,925 |
14. | In April 2019, the Partnership refinanced a $9.8 million debt tranche with Northwest Farm Credit Services that was originally due in September 2019. As refinanced, this debt has an ultimate maturity of April 2031. The $9.8 million refinancing is divided into three tranches with fixed rates, gross of patronage rebates, for specific periods, as follows: |
• | $3.0 million at 4.35% through April 2027 |
• | $3.0 million at 4.51% through April 2029 |
• | $3.8 million at 4.60% through April 2031 |
Quarter ended March 31, (in thousands) | Partnership Timber | Funds Timber | Timberland Investment Management | Real Estate | Other | Consolidated | ||||||||||||||||||
2019 | ||||||||||||||||||||||||
Income (loss) from operations - external | $ | 6,911 | $ | (877 | ) | $ | (1,221 | ) | $ | (673 | ) | $ | (1,764 | ) | $ | 2,376 | ||||||||
Reversal of segment eliminations | (44 | ) | (1,311 | ) | 1,294 | 87 | (26 | ) | — | |||||||||||||||
Income (loss) from operations - internal | 6,867 | (2,188 | ) | 73 | (586 | ) | (1,790 | ) | 2,376 | |||||||||||||||
Depletion, depreciation, and amortization | 1,641 | 4,935 | 19 | 67 | 12 | 6,674 | ||||||||||||||||||
Adjusted EBITDDA | $ | 8,508 | $ | 2,747 | $ | 92 | $ | (519 | ) | $ | (1,778 | ) | $ | 9,050 | ||||||||||
2018 | ||||||||||||||||||||||||
Income (loss) from operations - external | $ | 8,761 | $ | 1,807 | $ | (1,056 | ) | $ | (934 | ) | $ | (1,621 | ) | $ | 6,957 | |||||||||
Reversal of segment eliminations | (50 | ) | (1,024 | ) | 1,004 | 100 | (30 | ) | — | |||||||||||||||
Income (loss) from operations - internal | 8,711 | 783 | (52 | ) | (834 | ) | (1,651 | ) | 6,957 | |||||||||||||||
Depletion, depreciation, and amortization | 1,330 | 3,422 | 10 | 68 | 14 | 4,844 | ||||||||||||||||||
Adjusted EBITDDA | $ | 10,041 | $ | 4,205 | $ | (42 | ) | $ | (766 | ) | $ | (1,637 | ) | $ | 11,801 |
Q1 2019 | Q4 2018 | Q1 2018 | |||||||||
Partnership | |||||||||||
Overall log price per MBF | $ | 629 | $ | 643 | $ | 779 | |||||
Total volume (in MMBF) | 23.4 | 18.6 | 18.8 | ||||||||
(in thousands) | |||||||||||
Log sale revenue | $ | 14,722 | $ | 11,726 | $ | 14,635 | |||||
Timber deed sale revenue | — | 92 | — | ||||||||
Other revenue | 449 | 657 | 503 | ||||||||
Total revenue | 15,171 | 12,475 | 15,138 | ||||||||
Cost of sales | (7,188 | ) | (5,832 | ) | (5,026 | ) | |||||
Operating expenses | (1,072 | ) | (1,693 | ) | (1,351 | ) | |||||
Operating income | $ | 6,911 | $ | 4,950 | $ | 8,761 |
Average price realizations (per MBF) | |||||||||||
Q1 2019 | Q4 2018 | Q1 2018 | |||||||||
Partnership | |||||||||||
Douglas-fir domestic | $ | 655 | $ | 660 | $ | 850 | |||||
Douglas-fir export | 730 | 776 | 922 | ||||||||
Whitewood domestic | 528 | 610 | 549 | ||||||||
Whitewood export | 544 | 622 | 764 | ||||||||
Cedar | 973 | 996 | 1,458 | ||||||||
Hardwood | 650 | 742 | 708 | ||||||||
Pulpwood | 385 | 371 | 375 | ||||||||
Overall log price | 629 | 643 | 779 |
Volume (in MMBF) | ||||||||||||||
Q1 2019 | Q4 2018 | Q1 2018 | ||||||||||||
Partnership | ||||||||||||||
Douglas-fir domestic | 12.4 | 53 | % | 9.8 | 55 | % | 12.2 | 64 | % | |||||
Douglas-fir export | 4.8 | 21 | % | 3.1 | 17 | % | 1.8 | 10 | % | |||||
Whitewood domestic | 0.5 | 2 | % | 0.8 | 4 | % | 0.3 | 2 | % | |||||
Whitewood export | 0.2 | 1 | % | 0.6 | 3 | % | 0.5 | 3 | % | |||||
Cedar | 0.4 | 2 | % | 0.2 | 1 | % | 0.4 | 2 | % | |||||
Hardwood | 1.3 | 6 | % | 1.1 | 6 | % | 0.6 | 3 | % | |||||
Pulpwood | 3.8 | 15 | % | 2.6 | 14 | % | 3.0 | 16 | % | |||||
Log sale volume | 23.4 | 100 | % | 18.2 | 100 | % | 18.8 | 100 | % | |||||
Timber deed sale volume | — | 0.4 | — | |||||||||||
Total volume | 23.4 | 18.6 | 18.8 |
(in thousands) | |||||||||||
Q1 2019 | Q4 2018 | Q1 2018 | |||||||||
Partnership | |||||||||||
Harvest, haul, and tax | $ | 5,586 | $ | 4,545 | $ | 3,728 | |||||
Depletion | 1,599 | 1,284 | 1,295 | ||||||||
Other | 3 | 3 | 3 | ||||||||
Total cost of sales | $ | 7,188 | $ | 5,832 | $ | 5,026 | |||||
Amounts per MBF * | |||||||||||
Harvest, haul, and tax | $ | 239 | $ | 250 | $ | 198 | |||||
Depletion | $ | 68 | $ | 69 | $ | 69 |
* | Timber deed sale volumes are excluded in the per MBF computation for harvest, haul and tax costs but included in the per MBF computation for depletion. |
Q1 2019 | Q4 2018 | Q1 2018 | |||||||||
Funds | |||||||||||
Overall log price per MBF | $ | 631 | $ | 650 | $ | 728 | |||||
Total volume (MMBF) | 14.1 | 16.6 | 13.1 | ||||||||
(in thousands) | |||||||||||
Log sale revenue | $ | 8,860 | $ | 7,907 | $ | 9,509 | |||||
Timber deed sale revenue | — | 935 | — | ||||||||
Other revenue | 580 | 266 | 32 | ||||||||
Total revenue | 9,440 | 9,108 | 9,541 | ||||||||
Cost of sales | (9,139 | ) | (8,221 | ) | (6,952 | ) | |||||
Operating expenses - internal | (2,489 | ) | (2,473 | ) | (1,806 | ) | |||||
Operating income (loss) - internal | (2,188 | ) | (1,586 | ) | 783 | ||||||
Eliminations * | 1,311 | 1,191 | 1,024 | ||||||||
Operating income (loss) - external | $ | (877 | ) | $ | (395 | ) | $ | 1,807 |
Average price realizations (per MBF) | |||||||||||
Q1 2019 | Q4 2018 | Q1 2018 | |||||||||
Funds | |||||||||||
Douglas-fir domestic | $ | 647 | $ | 661 | $ | 829 | |||||
Douglas-fir export | 731 | 767 | 963 | ||||||||
Whitewood domestic | 513 | 605 | 665 | ||||||||
Whitewood export | 547 | 628 | 707 | ||||||||
Pine | 432 | 562 | 480 | ||||||||
Cedar | 961 | 1,095 | 1,343 | ||||||||
Hardwood | 530 | 664 | 722 | ||||||||
Pulpwood | 359 | 359 | 384 | ||||||||
Overall log price | 631 | 650 | 728 | ||||||||
Timber deed sales | — | 215 | — |
Volume (in MMBF) | ||||||||||||||
Q1 2019 | Q4 2018 | Q1 2018 | ||||||||||||
Funds | ||||||||||||||
Douglas-fir domestic | 7.4 | 52 | % | 3.9 | 31 | % | 3.8 | 29 | % | |||||
Douglas-fir export | 2.9 | 21 | % | 2.9 | 24 | % | 1.6 | 12 | % | |||||
Whitewood domestic | 1.3 | 9 | % | 3.4 | 28 | % | 4.9 | 37 | % | |||||
Whitewood export | 0.4 | 3 | % | 0.5 | 4 | % | 0.4 | 3 | % | |||||
Pine | 0.1 | 1 | % | 0.3 | 2 | % | 0.2 | 2 | % | |||||
Cedar | 0.5 | 4 | % | 0.2 | 2 | % | 0.3 | 2 | % | |||||
Hardwood | 0.2 | 1 | % | 0.1 | 1 | % | 0.2 | 2 | % | |||||
Pulpwood | 1.3 | 9 | % | 1.0 | 8 | % | 1.7 | 13 | % | |||||
Log sale volume | 14.1 | 100 | % | 12.3 | 100 | % | 13.1 | 100 | % | |||||
Timber deed sale volume | — | 4.3 | — | |||||||||||
Total volume | 14.1 | 16.6 | 13.1 | |||||||||||
Partnership’s share of Funds | 1.8 | 1.6 | 1.7 |
(in thousands) | |||||||||||
Q1 2019 | Q4 2018 | Q1 2018 | |||||||||
Funds | |||||||||||
Harvest, haul, and tax * | $ | 3,817 | $ | 3,046 | $ | 3,517 | |||||
Depletion * | 4,935 | 4,976 | 3,422 | ||||||||
Other | 387 | 199 | 13 | ||||||||
Total cost of sales | $ | 9,139 | $ | 8,221 | $ | 6,952 | |||||
Partnership’s share of Funds | $ | 1,091 | $ | 713 | $ | 782 | |||||
Amounts per MBF | |||||||||||
Harvest, haul, and tax | $ | 271 | $ | 248 | $ | 268 | |||||
Depletion | $ | 350 | $ | 300 | $ | 261 |
Q1 2019 | Q4 2018 | Q1 2018 | |||||||||
Partnership's share of Funds | |||||||||||
Total volume (MMBF) | 1.8 | 1.6 | 1.7 | ||||||||
(in thousands) | |||||||||||
Log sale revenue | $ | 1,103 | $ | 606 | $ | 1,207 | |||||
Timber deed sale revenue | — | 140 | — | ||||||||
Other revenue | 86 | 42 | 5 | ||||||||
Cost of sales | (1,091 | ) | (713 | ) | (782 | ) | |||||
Operating expenses - internal | (314 | ) | (301 | ) | (200 | ) | |||||
Eliminations * | 159 | 129 | 112 |
Quarter Ended | ||||||||
(in thousands, except invested capital, volume and acre data) | Mar-19 | Mar-18 | ||||||
Revenue internal | $ | 1,363 | $ | 1,024 | ||||
Intersegment eliminations | (1,363 | ) | (1,024 | ) | ||||
Revenue external | $ | — | $ | — | ||||
Operating income internal | $ | 73 | $ | (52 | ) | |||
Intersegment eliminations | (1,294 | ) | (1,004 | ) | ||||
Operating loss external | $ | (1,221 | ) | $ | (1,056 | ) | ||
Invested capital (in millions) | $ | 407 | $ | 354 | ||||
Acres owned by Funds | 141,000 | 124,000 | ||||||
Harvest volume - Funds (MMBF), including timber deed sales | 14.1 | 13.1 |
• | Residential and commercial plat land sales represent land sold after development rights have been obtained and are generally sold with prescribed infrastructure improvements. |
• | Rural residential lot sales that generally require some capital improvements such as zoning, road building, or utility access improvements prior to completing the sale. |
• | The sale of unimproved land, which generally consists of larger acreage sales rather than single lot sales, is normally completed with very little capital investment prior to sale. |
(in thousands, except units sold and per unit amounts) | |||||||||||||||||||
Description | Revenue | Gross Margin | Units Sold | Revenue per unit | Gross Margin per unit | ||||||||||||||
Unimproved land | $ | 22 | $ | 16 | Acres: | 3 | 7,333 | 5,333 | |||||||||||
Rentals and other | 409 | 134 | |||||||||||||||||
March 31, 2019 total | $ | 431 | $ | 150 | |||||||||||||||
Rentals and other | $ | 308 | $ | (14 | ) | ||||||||||||||
March 31, 2018 total | $ | 308 | $ | (14 | ) |
Quarter ended March 31, | |||||||
(in thousands) | 2019 | 2018 | |||||
Interest income - Partnership | $ | — | $ | 35 | |||
Interest expense - Partnership | (1,025 | ) | (676 | ) | |||
Interest expense - Funds | (556 | ) | (576 | ) | |||
Capitalized interest - Partnership | 66 | 73 | |||||
Interest expense, net | $ | (1,515 | ) | $ | (1,144 | ) |
• | a maximum debt-to-total-capitalization ratio of 30%, with total capitalization calculated using fair market (vs. carrying) value of timberland, roads and timber; and |
• | a maximum loan-to-appraised value of timberland collateral of 50%. |
Three Months Ended March 31, | |||||||||||
(in thousands) | 2019 | Change | 2018 | ||||||||
Cash provided by operating activities | $ | 4,978 | $ | (5,694 | ) | $ | 10,672 | ||||
Investing activities | |||||||||||
Reforestation and roads | (644 | ) | 248 | (892 | ) | ||||||
Capital expenditures | (252 | ) | 22 | (274 | ) | ||||||
Proceeds from sale of property and equipment | 71 | 67 | 4 | ||||||||
Proceeds from insurance recovery | — | — | — | ||||||||
Deposit for acquisition of timberland - Partnership | (5 | ) | (5 | ) | — | ||||||
Acquisition of timberland - Partnership | (16 | ) | 4,610 | (4,626 | ) | ||||||
Acquisition of timberland - Funds | (19,344 | ) | 89,035 | (108,379 | ) | ||||||
Cash used in investing activities | (20,190 | ) | 93,977 | (114,167 | ) | ||||||
Financing activities | |||||||||||
Line of credit borrowings | 4,500 | (15,300 | ) | 19,800 | |||||||
Line of credit repayments | (2,400 | ) | (900 | ) | (1,500 | ) | |||||
Repayment of long-term debt | (32 | ) | (1 | ) | (31 | ) | |||||
Proceeds from issuance of long-term debt | 3,000 | 3,000 | — | ||||||||
Units issued under distribution reinvestment plan | 24 | (35 | ) | 59 | |||||||
Unit repurchases | (166 | ) | 126 | (292 | ) | ||||||
Proceeds from preferred stock issuance - ORM Timber Funds | 125 | 125 | — | ||||||||
Payroll taxes paid upon unit net settlements | (79 | ) | 23 | (102 | ) | ||||||
Cash distributions to unitholders | (4,366 | ) | (1,314 | ) | (3,052 | ) | |||||
Cash distributions to fund investors, net of distributions to Partnership | (3,076 | ) | 405 | (3,481 | ) | ||||||
Capital call - ORM Timber Funds, net of Partnership contribution | 17,259 | (75,021 | ) | 92,280 | |||||||
Cash provided by financing activities | 14,789 | (88,892 | ) | 103,681 | |||||||
Net increase (decrease) in cash and restricted cash | $ | (423 | ) | $ | (609 | ) | $ | 186 |
2019 | |||||||||||
March 31 YTD | Remainder of Year | Total | |||||||||
in millions | |||||||||||
Harbor Hill project development | $ | 1.0 | $ | 2.1 | $ | 3.1 | |||||
Reforestation and roads - Partnership | 0.3 | 0.8 | 1.1 | ||||||||
Reforestation and roads - Funds | 0.3 | 1.5 | 1.8 | ||||||||
Other Real Estate development projects | — | 0.5 | 0.5 | ||||||||
Other | 0.3 | 0.2 | 0.5 | ||||||||
$ | 1.9 | $ | 5.1 | $ | 7.0 |
• | Increasing professional fees and costs and other general and administrative expenses. |
• | Distracting management and the board from the Partnership’s day-to-day operations. |
• | Creating uncertainty among key employees, which in turn may increase the risk of either losing one or more such employees, or the Partnership’s cost of retaining them. |
• | Increasing the volatility in the trading price and trading volume of the Partnership’s units. |
Period | (a) Total Number of Units Purchased | (b) Average Price Paid per Unit | (c) Total Number of Units Purchased as Part of Publicly Announced Plans or Programs (1) | (d) Maximum Approximate Dollar Value of Units that May Yet Be Purchased Under the Plans or Programs |
March 2019 | 2,456 | $67.56 | 2,456 | $1,834,000 |
31.1 | |
31.2 | |
32.1 | |
32.2 |
101.INS | XBRL Instance Document |
101.SCH | XBRL Taxonomy Extension Schema Document |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
POPE RESOURCES, | ||
A Delaware Limited Partnership | ||
By: | POPE MGP, Inc. | |
Managing General Partner | ||
By: /s/ Thomas M. Ringo | ||
Thomas M. Ringo | ||
President and Chief Executive Officer | ||
(Principal Executive Officer) | ||
By: /s/ Daemon P. Repp | ||
Daemon P. Repp | ||
Vice President and Chief Financial Officer | ||
(Principal Financial Officer) | ||
By: /s/ Sean M. Tallarico | ||
Sean M. Tallarico | ||
Controller | ||
(Principal Accounting Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of Pope Resources; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | May 8, 2019 | /s/Thomas M. Ringo |
Thomas M. Ringo Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Pope Resources; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | May 8, 2019 | /s/ Daemon P. Repp |
Daemon P. Repp Vice President and Chief Financial Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company as of, and for, the periods presented in the Report. |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company as of, and for, the periods presented in the Report. |
Document and Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Apr. 30, 2019 |
|
Document And Entity Information [Abstract] | ||
Trading Symbol | POPE | |
Entity Registrant Name | POPE RESOURCES LTD PARTNERSHIP | |
Entity Central Index Key | 0000784011 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding | 4,362,993 |
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Buildings and equipment, accumulated depreciation | $ 8,108 | $ 8,223 |
General partners’ capital, units issued | 60,000 | 60,000 |
General partners’ capital, units outstanding | 60,000 | 60,000 |
Limited partners’ capital, units issued | 4,266,000 | 4,253,000 |
Limited partners’ capital, units outstanding | 4,266,000 | 4,253,000 |
Organization, Consolidation and Presentation of Financial Statements Disclosure |
3 Months Ended |
---|---|
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure | The condensed consolidated balance sheets as of March 31, 2019, and December 31, 2018, and the related condensed consolidated statements of comprehensive income, partners’ capital, and cash flows for the three-month periods ended March 31, 2019, and 2018, 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, 2018, is derived from the Partnership’s audited consolidated financial statements and notes thereto for the year ended December 31, 2018, 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, 2019. |
Significant Accounting Policies |
3 Months Ended |
---|---|
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | The financial statements in the Partnership’s 2018 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. In February 2016, the FASB established Topic 842, Leases, which requires lessees to recognize leases on the balance sheet and disclose certain information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases; and ASU No. 2018-11, Targeted Improvements. The new standard establishes a right-of-use (ROU) model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as financing or operating, with classification affecting the pattern and classification of expense recognition in the income statement. For lessors, leases will be classified as a sales-type, direct financing, or operating lease. The Partnership adopted this new standard effective January 1, 2019 and utilized the effective date as the date of initial application. Consequently, financial information was not updated, and the disclosures required under the new standard are not provided for dates and periods prior to January 1, 2019. The new standard provides a number of optional practical expedients in transition. We elected the ‘package of practical expedients’, which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification, and initial direct costs. We did not elect the use-of-hindsight or the practical expedient pertaining to land easements, that latter not being applicable to us. The Partnership recognized a ROU asset and lease liability of $294,000 as of January 1, 2019 in connection with the adoption of this standard and all of its leases continue to be classified as operating leases. Accordingly, the adoption of this standard did not have a cumulative effect, or material effect, on the Partnership’s consolidated financial statements. |
Revenue from Contract with Customer |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer | Revenue is measured based on the consideration specified in a contract with a customer. The Partnership recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. Included in “Accounts receivable, net” are $6.1 million and $3.0 million of receivables from contracts with customers as of March 31, 2019, and December 31, 2018, respectively. Significant changes in the contract asset balance during the period were as follows, and there were no contract liabilities as of March 31, 2019, and December 31, 2018 (in thousands):
The contract assets in the table above represent rights to consideration for timber deeds transferred to the customer and are related primarily to the Funds Timber segment. These contracts provide the customer the legal right to harvest timber on the Partnership’s and Funds’ property. The value of a timber deed contract is determined based on the estimated timber volume by tree species multiplied by the contracted price. The contract consideration is considered variable because the timber volume by species is an estimate until the harvest is completed. The contract assets are transferred to receivables when the rights to consideration become due under the contract. Customers may harvest the timber at their discretion, within a time period and operational parameters stated in the contract. The following is a description of principal activities, separated by reportable segments, from which the Partnership generates its revenue. Partnership Timber and Funds Timber Log sale revenue in these two segments is recognized when control is transferred, and title and risk of loss passes to the customer, which typically occurs when logs are delivered to the customer. Revenue in these two segments is earned primarily from the harvest and sale of logs from the Partnership’s and Funds’ timberland. Other revenue in these segments is generated from the sale of rights to harvest timber (timber deed sales), commercial thinning, ground leases for cellular communication towers, royalties from gravel mines and quarries, and land use permits. Timber deed sales are generally structured so that the customer pays a contracted price per volume, measured in thousands of board feet (MBF), and revenue is recognized when control is transferred to the customer, which generally occurs on the effective date of the contract. Commercial thinning consists of the selective cutting of timber stands that have not yet reached optimal harvest age. However, this timber does have some commercial value and revenue is based on the volume harvested. Royalty revenue from gravel mines and quarries is recognized monthly based on the quantity of material extracted. The following table presents log sale and other revenue for the Partnership Timber and Funds Timber Segments:
Timberland Investment Management (TIM) Fee revenue generated by the TIM segment for managing the Funds includes fixed components related to invested capital and acres under management, and a variable component related to harvest volume from the Funds’ tree farms. These fees, which represent an expense in the Funds Timber segment, are eliminated in consolidation. The TIM segment occasionally earns revenue from providing timberland management-related consulting services to third-parties and recognizes such revenue as the related services are provided. Real Estate The Real Estate segment’s activities consist of investing in and later selling improved properties, holding properties for later development and sale, and managing commercial properties. Revenue is generated primarily from sales of land, sales of development rights known as conservation easements (CE’s), sales of unimproved land from the Partnership’s timberland portfolio, and residential and commercial rents. Revenue on real estate sales is recorded on the date the sale closes. When a real estate transaction is closed with obligations to complete infrastructure or other construction, the portion of the total contract allocated to the post-closing obligations may be recognized over time as that work is performed, provided the customer either simultaneously receives and consumes the benefits as we perform under the contract, our performance creates or enhances the asset controlled by the customer, or we do not create an asset with an alternative use to the customer and we have an enforceable right to payment for the performance completed. Progress towards the satisfaction of our performance obligations is generally measured based on costs incurred relative to the total cost expected to be incurred for the performance obligations. The following table breaks down revenue for the Real Estate segment:
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Leases (Notes) |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | The Partnership is both a lessee and a lessor. A contract is determined to contain a lease if there is an identified asset to which the lessee has the right to substantially all of the economic benefits and has control over how the asset is used throughout the contract period. The Partnership elected the practical expedients to not separate lease and non-lease components for all of its leases. Lessee lease information As a lessee, the Partnership’s leases consist of office equipment and office space and are classified as operating leases. Leases for some printers have a variable payment for printing in excess of a page allowance set in the lease contract. The discount rate for leases was determined based on Northwest Farm Credit Services’ (NWFCS), the Partnership’s lender, cost of funds for the lease period plus a margin of 1.60%, as provided for in the Partnership’s credit agreement with NWFCS. The following table presents the balances of our right-of-use assets and lease liabilities and the balance sheet captions in which they are reported (in thousands):
The following table presents the components of lease costs and other lease information for the quarter ended March 31, 2019:
Payments due under lease contracts for the next five years and thereafter are as follows (in thousands):
Lessor lease information As a lessor, the Partnership’s leases consist of leases of commercial and residential real estate, reported in the Real Estate segment under “rentals and other”, and land leases on the Partnership’s and Funds’ timberland for cellular communication towers (Tower Leases), reported in the Partnership Timber and Funds Timber segments under “other revenue”. All these leases are classified as operating leases. Tower Leases have a variable payment component for revenue sharing from subleases of space on the tower. Tower Leases typically have a five-year term and two to five automatic five-year extensions. Commercial real estate leases have non-lease components of taxes, insurance and common area maintenance. Tower Leases have non-lease components for real property taxes related to tenant improvements. The following table presents the components of lease income for the quarter ended March 31, 2019 (in thousands):
Buildings subject to operating leases had a cost of $2.1 million and accumulated depreciation of $1.2 million at March 31, 2019. Lease income maturities at March 31, 2019, based on payments due by period under the lease contracts, are presented in the following table (in thousands):
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Leases | The Partnership is both a lessee and a lessor. A contract is determined to contain a lease if there is an identified asset to which the lessee has the right to substantially all of the economic benefits and has control over how the asset is used throughout the contract period. The Partnership elected the practical expedients to not separate lease and non-lease components for all of its leases. Lessee lease information As a lessee, the Partnership’s leases consist of office equipment and office space and are classified as operating leases. Leases for some printers have a variable payment for printing in excess of a page allowance set in the lease contract. The discount rate for leases was determined based on Northwest Farm Credit Services’ (NWFCS), the Partnership’s lender, cost of funds for the lease period plus a margin of 1.60%, as provided for in the Partnership’s credit agreement with NWFCS. The following table presents the balances of our right-of-use assets and lease liabilities and the balance sheet captions in which they are reported (in thousands):
The following table presents the components of lease costs and other lease information for the quarter ended March 31, 2019:
Payments due under lease contracts for the next five years and thereafter are as follows (in thousands):
Lessor lease information As a lessor, the Partnership’s leases consist of leases of commercial and residential real estate, reported in the Real Estate segment under “rentals and other”, and land leases on the Partnership’s and Funds’ timberland for cellular communication towers (Tower Leases), reported in the Partnership Timber and Funds Timber segments under “other revenue”. All these leases are classified as operating leases. Tower Leases have a variable payment component for revenue sharing from subleases of space on the tower. Tower Leases typically have a five-year term and two to five automatic five-year extensions. Commercial real estate leases have non-lease components of taxes, insurance and common area maintenance. Tower Leases have non-lease components for real property taxes related to tenant improvements. The following table presents the components of lease income for the quarter ended March 31, 2019 (in thousands):
Buildings subject to operating leases had a cost of $2.1 million and accumulated depreciation of $1.2 million at March 31, 2019. Lease income maturities at March 31, 2019, based on payments due by period under the lease contracts, are presented in the following table (in thousands):
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Partners' Capital Notes Disclosure |
3 Months Ended |
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Mar. 31, 2019 | |
Equity [Abstract] | |
Partners' Capital Notes Disclosure | The Partnership has two general partners: Pope MGP, Inc. and Pope EGP, Inc. In total, these two entities own 60,000 limited partner units. The allocation of distributions, profits, and losses among the general and limited partners is pro rata across all units outstanding. |
Supplemental Balance Sheet Disclosures |
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Supplemental Balance Sheet Disclosures | ORM Timber Fund II, Inc. (Fund II), ORM Timber Fund III (REIT) Inc. (Fund III), and ORM Timber Fund IV LLC (Fund IV), collectively “the Funds”, were formed by Olympic Resource Management LLC (ORMLLC), a wholly owned subsidiary of the Partnership, for the purpose of raising capital to purchase timberlands. The objective of these Funds is to generate a return on investments through the acquisition, management, value enhancement, and sale of timberland properties. Each fund is organized to operate for a specific term from the end of its respective investment period; 10 years for each of Fund II and Fund III, and 15 years for Fund IV. Fund II and Fund III are scheduled to terminate in March 2021 and December 2025, respectively. Fund IV will terminate on the fifteenth anniversary of the end of its investment period, which will occur on the earlier of placement of all committed capital or December 31, 2019, subject to certain extension provisions. Pope Resources and ORMLLC together own equity interests totaling 20% of Fund II, 5% of Fund III, and 15% of Fund IV. The Funds are considered variable interest entities because their organizational and governance structures are the functional equivalent of a limited partnership. As the managing member of the Funds, the Partnership is the primary beneficiary of each of the Funds as it has the authority to direct the activities that most significantly impact their economic performance, as well as the right to receive benefits and the obligation to absorb losses that could potentially be significant to the Funds. Accordingly, the Funds are consolidated into the Partnership’s financial statements. The obligations of each of the Funds are non-recourse to the Partnership. In January 2019, Fund IV closed on the acquisition of 7,100 acres of timberland in south central Washington for $20.3 million, of which the Partnership’s share was $3.0 million. At December 31, 2018, Fund IV had paid a deposit of $1.0 million in connection with the transaction, which was included in other assets. The purchase price was allocated $17.5 million to timber and roads, and $2.8 million to the underlying land. The assets and liabilities of the Funds as of March 31, 2019, and December 31, 2018, were as follows:
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Other Assets Disclosure |
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Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Assets Disclosure | Other assets consisted of the following at March 31, 2019 and December 31, 2018:
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Segment Reporting Disclosure |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting Disclosure | 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. In the fourth quarter of 2018, the Partnership changed its method of reporting costs incurred by the Partnership Timber segment on behalf of the TIM segment, and reclassified $109,000 of operating expenses for the first quarter of 2018 from the Partnership Timber segment to the TIM segment to conform to the current year presentation.
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Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Basic and diluted earnings per unit are calculated by dividing net income attributable to unitholders, adjusted for non-forfeitable distributions paid out to unvested restricted unitholders and preferred shareholders of Fund II and Fund III, by the weighted average units outstanding during the period. There were no dilutive securities outstanding during the periods presented. The following table shows the calculation of basic and diluted earnings per unit:
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Disclosure of Compensation Related Costs, Share Based Payments |
3 Months Ended |
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Mar. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Disclosure of Compensation Related Costs, Share Based Payments | In the first quarter of 2019, the Partnership issued 11,504 restricted units pursuant to the management incentive compensation program and 3,600 restricted units to members of the Board of Directors. These restricted units vest ratably over four years with the grant date fair value equal to the market price on the date of grant. During the three months ended March 31, 2019, 432 units were granted with no restrictions to certain board members who elected to receive their quarterly board compensation in the form of units rather than cash. Units granted to directors are included in the calculation of total equity compensation expense which is recognized over the vesting period, for restricted units, or immediately for unrestricted units. Grants to retirement-eligible individuals on the date of grant are expensed immediately. The Partnership recognized $593,000 and $523,000 of equity compensation expense in the first quarter of 2019 and 2018, respectively, related to these compensation programs. |
Cash Flow, Supplemental Disclosures |
3 Months Ended |
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Mar. 31, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
Cash Flow, Supplemental Disclosures | Supplemental disclosure of cash flow information: interest paid, net of amounts capitalized, totaled $415,000 and $508,000 during the first three months of 2019 and 2018, respectively. Income taxes paid totaled $20,000 and $338,000 for the first three months of 2019 and 2018, respectively. |
Fair Value Disclosures |
3 Months Ended |
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Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures | The Partnership’s financial instruments include cash, accounts receivable, and a note receivable, included in other assets, for which the carrying amount of each represents fair value based on current market interest rates or their short-term nature. Collectively, the Partnership’s and the Funds’ fixed-rate debt has a carrying value of $125.5 million as of March 31, 2019 and December 31, 2018. 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 $129.4 million and $126.3 million as of March 31, 2019 and December 31, 2018, respectively. |
Commitments and Contingencies Disclosure |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure | The Partnership had an accrual for estimated environmental remediation costs of $8.9 million and $9.1 million as of March 31, 2019 and December 31, 2018, respectively. The environmental remediation liability represents management’s estimate of payments to be made to remedy and monitor certain areas in and around Port Gamble Bay, Washington. The liability at March 31, 2019 is comprised of $925,000 that management expects to expend in the next 12 months and $8.0 million thereafter. In December 2013, a consent decree and Clean-up Action Plan (CAP) related to Port Gamble Bay were finalized with the Washington State Department of Ecology (DOE) and filed with Kitsap County Superior Court. Construction activity commenced in late September 2015 and the required in-water portion of the cleanup was completed in January 2017. By the end of the third quarter of 2017, the sediments dredged from the Bay were moved to their permanent storage location on property owned by the Partnership a short distance from the town of Port Gamble. This effectively concluded the component of the project related to the in-water cleanup of Port Gamble Bay. In February 2018, the Partnership and DOE entered into an agreed order with respect to the millsite under which the Partnership has performed a remedial investigation and feasibility study (RI/FS) and drafted a CAP. As with the in-water portion of the project, the CAP defines the scope of the remediation activity for the millsite. As disclosed previously, certain environmental laws allow state, federal, and tribal trustees (collectively, the Trustees) to bring suit against property owners to recover damages for injuries to natural resources. Like the liability that attaches to current property owners in the cleanup context, liability for natural resource damages (NRD) can attach to a property owner simply because an injury to natural resources resulted from releases of hazardous substances on that owner’s property, regardless of culpability for the release. In the case of Port Gamble, the Trustees are alleging that the Partnership has NRD liability because of releases that occurred on its property. The Partnership has been in discussions with the Trustees regarding their claims and the alleged conditions in Port Gamble Bay, and has also been discussing restoration alternatives that might address the damages the Trustees allege. These discussions have progressed to the point where management has identified a short list of restoration projects that may resolve the Trustees’ NRD claims. The RI/FS and CAP for the millsite will be reviewed by DOE prior to being finalized, which will be codified in a consent decree. For the NRD component of the project, discussions with the Trustees are continuing, and management expects those discussions will ultimately result in a settlement agreement. At present, management expects the CAP and consent decree for the millsite and the NRD settlement agreement to be finalized in 2019. In both cases, it is reasonably possible that cost estimates could change as a result of changes to either the millsite cleanup or the NRD restoration components of the liability, or both. Management currently expects the millsite cleanup and NRD restoration projects to occur over the next two to three years. Finally, there will be a monitoring period that is expected to be approximately 15 years during which the Partnership will monitor conditions in the Bay, on the millsite, and at the storage location of the dredged and excavated sediments. During this monitoring phase, conditions may arise that require corrective action, and monitoring protocols may change over time. In addition, extreme weather events could cause damage to the sediment caps that would need to be repaired. These factors could result in additional costs. Activity in the environmental liability is as follows:
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Subsequent Events |
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Subsequent Events [Abstract] | |||||||||||||
Subsequent Events | In April 2019, the Partnership refinanced a $9.8 million debt tranche with Northwest Farm Credit Services that was originally due in September 2019. As refinanced, this debt has an ultimate maturity of April 2031. The $9.8 million refinancing is divided into three tranches with fixed rates, gross of patronage rebates, for specific periods, as follows:
On the expiration of the fixed-rate periods, the tranches can be repaid or refinanced without penalty, or revert to a floating rate or be fixed at then-current rates for periods not to exceed the ultimate maturity of April 2031. The Partnership paid a prepayment fee of $61,000 in connection with this refinancing. |
Significant Accounting Policies (Policies) |
3 Months Ended |
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Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
New Accounting Pronouncements | In February 2016, the FASB established Topic 842, Leases, which requires lessees to recognize leases on the balance sheet and disclose certain information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases; and ASU No. 2018-11, Targeted Improvements. The new standard establishes a right-of-use (ROU) model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as financing or operating, with classification affecting the pattern and classification of expense recognition in the income statement. For lessors, leases will be classified as a sales-type, direct financing, or operating lease. The Partnership adopted this new standard effective January 1, 2019 and utilized the effective date as the date of initial application. Consequently, financial information was not updated, and the disclosures required under the new standard are not provided for dates and periods prior to January 1, 2019. The new standard provides a number of optional practical expedients in transition. We elected the ‘package of practical expedients’, which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification, and initial direct costs. We did not elect the use-of-hindsight or the practical expedient pertaining to land easements, that latter not being applicable to us. The Partnership recognized a ROU asset and lease liability of $294,000 as of January 1, 2019 in connection with the adoption of this standard and all of its leases continue to be classified as operating leases. Accordingly, the adoption of this standard did not have a cumulative effect, or material effect, on the Partnership’s consolidated financial statements. |
Revenue from Contract with Customer (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Contract Assets | Significant changes in the contract asset balance during the period were as follows, and there were no contract liabilities as of March 31, 2019, and December 31, 2018 (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | The following table presents log sale and other revenue for the Partnership Timber and Funds Timber Segments:
The following table breaks down revenue for the Real Estate segment:
|
Leases (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Classification of Operating Lease Assets and Liabilities | The following table presents the balances of our right-of-use assets and lease liabilities and the balance sheet captions in which they are reported (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease Cost and Other Lease Information | The following table presents the components of lease costs and other lease information for the quarter ended March 31, 2019:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating Lease Maturity | Payments due under lease contracts for the next five years and thereafter are as follows (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease Income | The following table presents the components of lease income for the quarter ended March 31, 2019 (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating Lease Income Maturity | Lease income maturities at March 31, 2019, based on payments due by period under the lease contracts, are presented in the following table (in thousands):
|
Supplemental Balance Sheet Disclosures (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Partnership's Consolidated Balance Sheet included Assets and Liabilities of Funds | The assets and liabilities of the Funds as of March 31, 2019, and December 31, 2018, were as follows:
|
Other Assets Disclosure (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Assets | Other assets consisted of the following at March 31, 2019 and December 31, 2018:
|
Segment Reporting Disclosure (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Internally Reported Income (Loss) from Operations to Externally Reported Income (Loss) from Operations by Business Segment | The following tables reconcile internally reported income (loss) from operations to externally reported income (loss) from operations by business segment. In the fourth quarter of 2018, the Partnership changed its method of reporting costs incurred by the Partnership Timber segment on behalf of the TIM segment, and reclassified $109,000 of operating expenses for the first quarter of 2018 from the Partnership Timber segment to the TIM segment to conform to the current year presentation.
|
Earnings Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basic and Diluted Earnings per Unit | The following table shows the calculation of basic and diluted earnings per unit:
|
Commitments and Contingencies Disclosure (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Activity in Environmental Liability | Activity in the environmental liability is as follows:
|
Significant Accounting Policies (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Jan. 01, 2019 |
---|---|---|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease, right-of-use asset | $ 250 | |
Accounting Standards Update 2016-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease, right-of-use asset | $ 294 | |
Operating lease liability | $ 294 |
Revenue from Contract with Customer (Narrative) (Details) - USD ($) |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Disaggregation of Revenue [Line Items] | ||
Accounts receivable, net | $ 7,062,000 | $ 4,670,000 |
Contract liabilities | 0 | 0 |
Receivables from contracts with customers | ||
Disaggregation of Revenue [Line Items] | ||
Accounts receivable, net | $ 6,100,000 | $ 3,000,000 |
Revenue from Contract with Customer (Contract Assets) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Dec. 31, 2018 |
|
Contract With Customer, Asset And Liability [Roll Forward] | ||
Contract assets, December 31, 2018 | $ 3,829 | |
Transferred to receivables from contract assets | (720) | |
Contract assets, March 31, 2019 | 3,109 | |
Less: noncurrent portion included in other assets | (243) | $ (957) |
Current portion of contract assets, March 31, 2019 | $ 2,866 | $ 2,872 |
Revenue from Contract with Customer (Log Sale and Other Revenue) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 25,042 | $ 24,987 |
Partnership Timber | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 15,171 | 15,138 |
Funds Timber | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 9,440 | 9,541 |
Log sale revenue | Partnership Timber | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 14,722 | 14,635 |
Log sale revenue | Funds Timber | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 8,860 | 9,509 |
Other revenue | Partnership Timber | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 449 | 503 |
Other revenue | Funds Timber | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 580 | $ 32 |
Revenue from Contract with Customer (Real Estate Revenue) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 25,042 | $ 24,987 |
Real Estate | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 431 | 308 |
Real Estate | Unimproved land | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 22 | 0 |
Real Estate | Rentals and other | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 409 | $ 308 |
Leases (Narrative) (Details) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019
USD ($)
renewal_option
|
Dec. 31, 2018
USD ($)
|
|
Leases [Abstract] | ||
Basis spread on discount rate | 1.60% | |
Lessor, Lease, Description [Line Items] | ||
Building accumulated depreciation | $ 8,108 | $ 8,223 |
Land | ||
Lessor, Lease, Description [Line Items] | ||
Lessor, operating lease, term | 5 years | |
Lessor, operating lease, renewal term | 5 years | |
Land | Minimum | ||
Lessor, Lease, Description [Line Items] | ||
Lessor, operating lease, number of renewal options | renewal_option | 2 | |
Land | Maximum | ||
Lessor, Lease, Description [Line Items] | ||
Lessor, operating lease, number of renewal options | renewal_option | 5 | |
Assets Leased to Others [Member] | ||
Lessor, Lease, Description [Line Items] | ||
Building cost | $ 2,100 | |
Building accumulated depreciation | $ 1,200 |
Leases (Balance Sheet Classification of Operating Lease Assets and Liabilities) (Details) $ in Thousands |
Mar. 31, 2019
USD ($)
|
---|---|
Leases [Abstract] | |
Right of use assets | $ 250 |
Lease liability - current | 159 |
Lease liability - long-term | $ 91 |
Leases (Lease Cost and Other Lease Information) (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2019
USD ($)
| |
Leases [Abstract] | |
Operating lease cost | $ 47 |
Variable lease cost | 2 |
Total lease cost | 49 |
Cash paid for amounts included in the measurement of lease liabilities | 49 |
Right-of-use asset obtained in exchange for new leases | $ 16 |
Weighted-average remaining lease term in years | 1 year 8 months |
Weighted average discount rate | 4.20% |
Leases Operating Lease Maturity (Details) $ in Thousands |
Mar. 31, 2019
USD ($)
|
---|---|
Leases [Abstract] | |
2019 | $ 164 |
2020 | 78 |
2021 | 14 |
2022 | 0 |
2023 | 0 |
Thereafter | 0 |
Unamortized discount | (6) |
Total lease liability at March 31, 2019 | $ 250 |
Leases (Lease Income) (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2019
USD ($)
| |
Leases [Abstract] | |
Operating lease income | $ 403 |
Variable lease income | 20 |
Total lease income | $ 423 |
Leases (Operating Lease Income Maturity) (Details) $ in Thousands |
Mar. 31, 2019
USD ($)
|
---|---|
Leases [Abstract] | |
2019 | $ 835 |
2020 | 759 |
2021 | 673 |
2022 | 630 |
2023 | 587 |
Thereafter | 4,045 |
Total | $ 7,529 |
Partners' Capital Notes Disclosure (Details) |
Mar. 31, 2019
Partner
shares
|
Dec. 31, 2018
shares
|
---|---|---|
Equity [Abstract] | ||
Number of general partners | Partner | 2 | |
Number of partnership units owned by two general partners | shares | 60,000 | 60,000 |
Other Assets Disclosure (Details) - USD ($) $ in Thousands |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Investment in Real Estate joint venture entity | $ 5,882 | $ 5,891 |
Advances to Real Estate joint venture entity | 873 | 804 |
Deferred tax assets, net | 518 | 541 |
Right of use assets | 250 | |
Contract assets | 243 | 957 |
Note receivable | 54 | 57 |
Deposits for acquisitions of timberland | 5 | 1,005 |
Total | $ 7,825 | $ 9,255 |
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Earnings Per Share [Abstract] | ||
Net income attributable to unitholders | $ 3,311 | $ 5,718 |
Comprehensive income attributable to unitholders | 3,311 | 5,718 |
Less: | ||
Non-forfeitable distributions paid to unvested restricted unitholders | (38) | (45) |
Preferred share dividends - ORM Timber Funds | (12) | (8) |
Net and comprehensive income for calculation of earnings per unit | $ 3,261 | $ 5,665 |
Basic and diluted weighted average units outstanding (units) | 4,325 | 4,321 |
Basic and diluted net earnings per unit (in dollars per unit) | $ 0.75 | $ 1.31 |
Disclosure of Compensation Related Costs, Share Based Payments (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Director | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Equity compensation units, granted in period (in shares) | 432 | |
Restricted Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Equity compensation units, granted in period (in shares) | 11,504 | |
Vesting period of restricted stock unit award | 4 years | |
Restricted Units | Long Term Incentive Plans | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Equity compensation expense | $ 593 | $ 523 |
Restricted Units | Director | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Equity compensation units, granted in period (in shares) | 3,600 |
Cash Flow, Supplemental Disclosures (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2018 |
|
Supplemental Cash Flow Elements [Abstract] | ||
Interest paid, net of amounts capitalized | $ 415 | $ 508 |
Income taxes paid | $ 20 | $ 338 |
Fair Value Disclosures (Details) - Fixed-Rate Debt - USD ($) $ in Millions |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt outstanding carrying value | $ 125.5 | $ 125.5 |
Fair Value, Inputs, Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt outstanding fair value | $ 129.4 | $ 126.3 |
Commitments and Contingencies Disclosure (Narrative) (Details) - USD ($) $ in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Site Contingency [Line Items] | ||||
Accrual for estimated environmental remediation costs | $ 8,925 | $ 9,083 | $ 4,979 | $ 12,770 |
Environmental liability, next 12 months | 925 | |||
Environmental liability thereafter | $ 8,000 | |||
Remediation activity monitoring period | 15 years | |||
Minimum | ||||
Site Contingency [Line Items] | ||||
Remediation period | 2 years | |||
Maximum | ||||
Site Contingency [Line Items] | ||||
Remediation period | 3 years |
Commitments and Contingencies Disclosure (Changes in Environmental Liability) (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Accrual for Environmental Loss Contingencies [Roll Forward] | |||
Balance at Beginning of the Period | $ 9,083 | $ 4,979 | $ 12,770 |
Additions to Accrual | 0 | 5,600 | 0 |
Expenditures for Remediation | (158) | (1,496) | (7,791) |
Balance at Period-end | $ 8,925 | $ 9,083 | $ 4,979 |
Subsequent Events (Details) - Consolidated Entity Excluding Variable Interest Entities (VIE) - Line of Credit - Subsequent Event $ in Thousands |
1 Months Ended |
---|---|
Apr. 30, 2019
USD ($)
| |
Credit Agreement Due September 2019 | |
Subsequent Event [Line Items] | |
Debt outstanding carrying value | $ 9,800 |
Prepayment fee paid | 61 |
Credit Agreement, Tranche 1, Due April 2027 | |
Subsequent Event [Line Items] | |
Debt outstanding carrying value | $ 3,000 |
Interest rate | 4.35% |
Credit Agreement, Tranche 2, Due April 2029 | |
Subsequent Event [Line Items] | |
Debt outstanding carrying value | $ 3,000 |
Interest rate | 4.51% |
Credit Agreement, Tranche 3, Due April 2031 | |
Subsequent Event [Line Items] | |
Debt outstanding carrying value | $ 3,800 |
Interest rate | 4.60% |
Credit Agreement Due April 2031 | |
Subsequent Event [Line Items] | |
Debt outstanding carrying value | $ 9,800 |
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