SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

For the Transition Period fromto

(Registrant’s telephone number, including area code)

(Former name, former address, and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol	Name of exchange on which registered
Class A Common Stock, $0.01 Par Value Per Share	CTT	New York Stock Exchange

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 every Interactive Data File required to be submitted 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 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, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer," “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

o☐

Accelerated filer

x☒

Non-accelerated filer

o☐

Smaller reporting company

x☒

Emerging growth company

o☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 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☒

Number of shares outstanding of the registrant’s common stock, as of ~~October 31, 2019: 49,007,142~~April 30, 2020: 48,742,034 shares

Table of Contents

~~FORM 10-Q~~

~~CATCHMARK TIMBER TRUST, INC.~~

~~TABLE OF CONTENTS~~




			~~Page No.~~
~~PART I. FINANCIAL INFORMATION~~

	~~Item 1.~~	~~Condensed Consolidated Financial Statements~~	4

		~~Consolidated Balance Sheets as of~~ ~~September 30, 2019 (unaudited) and December 31, 2018~~	5

		~~Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2019 (unaudited) and 2018 (unaudited)~~	6

		~~Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2019 (unaudited) and 2018 (unaudited)~~	7

		~~Consolidated Statements of Stockholders' Equity for the Three and Nine Months Ended September 30, 2019 (unaudited) and 2018 (unaudited)~~	8

		~~Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2019 (unaudited) and 2018 (unaudited)~~	10

		~~Condensed Notes to Consolidated Financial Statements (unaudited)~~	11

	~~Item 2.~~	~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~	28

	~~Item 3.~~	~~Quantitative and Qualitative Disclosures About Market Risk~~	40

	~~Item 4.~~	~~Controls and Procedures~~	41

~~PART II. OTHER INFORMATION~~

	~~Item 1.~~	~~Legal Proceedings~~	42

	~~Item 1A.~~	~~Risk Factors~~	42

	~~Item 2.~~	~~Unregistered Sales of Equity Securities and Use of Proceeds~~	42

	~~Item 6.~~	~~Exhibits~~	42

GLOSSARY

The following abbreviations or acronyms may be used in this document and shall have the adjacent meanings set forth below:



AFM						American Forestry Management, Inc.
ASC						Accounting Standards Codification
ASU						Accounting Standards Update
CoBank						CoBank, ACB
~~Code~~Common Stock						Class A common stock, $0.01 par value per share of CatchMark Timber Trust, Inc.
Code						Internal Revenue Code of 1986, as amended
EBITDA						Earnings before Interest, Taxes, Depletion, and Amortization
FASB						Financial Accounting Standards Board
FCCR						Fixed Charge Coverage Ratio
FRC						Forest Resource Consultants, Inc.
GAAP						U.S. Generally Accepted Accounting Principles
HBU						Higher and Better Use
HLBV						Hypothetical Liquidation at Book Value
IP						International Paper Company
LIBOR						London Interbank Offered Rate
~~LTIP~~LTC						Long-Term Contract
LTIP						Long-Term Incentive Plan
LTV						Loan-to-Value
MBF						Thousand Board Feet
MPERS						Missouri Department of Transportation & Patrol Retirement System
NYSE						New York Stock Exchange
Rabobank						Cooperatieve Centrale Raiffeisen-Boerenleenbank, B.A.
REIT						Real Estate Investment Trust
SEC						Securities and Exchange Commission
~~TRS~~SRP						Share Repurchase Program
TRS						Taxable REIT Subsidiary
TSR						Total Shareholder Return
U.S.						United States
VIE						Variable Interest Entity
WestRock						WestRock Company

Table of Contents

FORM 10-Q

CATCHMARK TIMBER TRUST, INC.

TABLE OF CONTENTS

Page No.

PART I. FINANCIAL INFORMATION

Item 1.

Condensed Consolidated Financial Statements

Consolidated Balance Sheets as of March 31, 2020 (unaudited) and December 31, 2019

Consolidated Statements of Operations for the Three Months Ended March 31, 2020 (unaudited) and 2019 (unaudited)

Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31, 2020 (unaudited) and 2019 (unaudited)

Consolidated Statements of Equity for the Three Months Ended March 31, 2020 (unaudited) and 2019 (unaudited)

Consolidated Statements of Cash Flows for the Three Months Ended March 3 1 , 20 20 (unaudited) and 201 9 (unaudited)

Condensed Notes to Consolidated Financial Statements (unaudited)

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Item 4.

Controls and Procedures

PART II. OTHER INFORMATION

Item 1.

Legal Proceedings

Item 1A.

Risk Factors

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

Item 5.

Other Information

Item 6.

Exhibits

Table of Contents

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this Quarterly Report on Form 10-Q of CatchMark Timber Trust, Inc. and subsidiaries (“CatchMark,” “we,” “our,” or “us”) may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In addition, ~~we,~~CatchMark, or ~~our~~its executive officers on ~~our~~CatchMark's behalf, may from time to time make forward-looking statements in other reports and documents ~~we file~~CatchMark files with the SEC or in connection with written or oral statements made to the press, potential investors, or others. We intend for all such forward-looking statements to be covered by the applicable safe harbor provisions for forward-looking statements contained in the Securities Act and the Exchange Act.

Forward-looking statements can generally be identified by our use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “continue,” or other similar words. However, the absence

of these or similar words or expressions does not mean that a statement is not forward-looking. ~~Forward-looking~~Forward looking statements are not guarantees of performance and are based on certain assumptions, discuss future expectations, describe plans and strategies, contain projections of results of operations or of financial condition or state other forward-looking information. Forward-looking statements in this report, include, but are not limited to, that we manage our ~~desire~~operations to ~~deliver superior, consistent,~~generate highly-predictable and ~~predictable per-share~~stable cash flow growth through disciplined acquisitions, active management, sustainable harvests, and well-timed real estate sales; our intent to grow over time through selective acquisitions and investments in high-demand fiber markets and to efficiently integrate new acquisitions and investments into our operations; our focus on generating cash flows from sustainable harvests, ~~and improved harvest mix on high-quality industrial timberlands, as well as~~ opportunistic land sales and asset management ~~fees;~~fees that comfortably cover our dividend throughout the business cycle; improved harvest mix and biological growth of our forests; ~~creating~~our intent to create additional value through joint ventures; ~~sales~~the impact of ~~large timberland properties to generate capital to fund capital allocation priorities;~~the new coronavirus (COVID-19) on our business and the businesses of our unconsolidated joint ventures; property performance and anticipated growth in our portfolio; expected uses of cash generated from operations, debt financings and debt and equity offerings; expected sources and adequacy of capital resources and liquidity; our anticipated distribution policy; change in depletion rates, merchantable timber book value and standing timber inventory volume; anticipated harvest volume and mix of harvest volume; and other factors that may lead to fluctuations in future net income (loss). Forward-looking statements in this report also relate to the Triple T Joint Venture (as defined herein) and include, but are not limited to, statements about our ability to find a suitable replacement for former chief executive officer to serve as “key man” under our asset management agreement with the expected benefits of the joint venture, including anticipated harvest volume, financial and operating results and future returns to stockholders; and our plans, objectives, expectations, projections and intentions.Triple T Joint Venture.

Forward-looking statements are based on a number of assumptions involving judgments and are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from our historical experience and our present expectations. Such risks and uncertainties related to us and the Triple T Joint Venture include those discussed in Part II, Item 1A. Risk Factors in this Quarterly Report on Form 10-Q, as well as in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, ~~2018 and our subsequent reports filed with the SEC.~~2019. Accordingly, readers are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date that this report is filed with the SEC. We do not intend to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.


~~PART I.~~	~~FINANCIAL INFORMATION~~

Table of Contents

PART I FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The information furnished in the accompanying consolidated balance sheets and related consolidated statements of operations, comprehensive ~~income (loss), stockholders’~~loss, equity, and cash flows reflects all adjustments, consisting solely of normal and recurring adjustments, that are, in management’s opinion, necessary for a fair and consistent presentation of the aforementioned financial statements.

The accompanying consolidated financial statements should be read in conjunction with the condensed notes to our consolidated financial statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in this Quarterly Report on Form 10-Q and with our Annual Report on Form 10-K for the year ended December 31, ~~2018.~~2019. Our results of operations for the three ~~and nine~~ months ended ~~September 30, 2019~~March 31, 2020 are not necessarily indicative of the operating results expected for the full year.

Table of Contents

CATCHMARK TIMBER TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except for per-share amounts)



	(Unaudited) September 30, 2019			December 31, 2018				(Unaudited) March 31, 2020		December 31, 2019
Assets:							Assets:
Cash and cash equivalents	$	17,074		$	5,614		Cash and cash equivalents	$	10,412	$	11,487
Accounts receivable	4,519			7,355			Accounts receivable	5,374		7,998
Prepaid expenses and other assets	4,591			7,369			Prepaid expenses and other assets	6,162		5,459
Operating lease right-of-use asset, less accumulated amortization of $209 as of September 30, 2019 (Note 2)	3,191			—
Operating lease right-of-use asset (Note 7)							Operating lease right-of-use asset (Note 7)	3,049		3,120
Deferred financing costs	266			327			Deferred financing costs	228		246
Timber assets (Note 3):							Timber assets (Note 3):
Timber and timberlands, net	643,663			687,851			Timber and timberlands, net	606,461		633,581
Intangible lease assets, less accumulated amortization of $948 and $945 as of September 30, 2019 and December 31, 2018, respectively	9			12
Intangible lease assets, less accumulated amortization of $949 and $948 as of March 31, 2020 and December 31, 2019, respectively							Intangible lease assets, less accumulated amortization of $949 and $948 as of March 31, 2020 and December 31, 2019, respectively	8		9
Investments in unconsolidated joint ventures (Note 4)	10,425			96,244			Investments in unconsolidated joint ventures (Note 4)	1,478		1,965
Total assets	$	683,738		$	804,772		Total assets	$	633,172	$	663,865

Liabilities:							Liabilities:
Accounts payable and accrued expenses	$	5,047		$	4,936		Accounts payable and accrued expenses	$	6,739	$	3,580
Operating lease liability (Note 2)	3,302			—			Operating lease liability (Note 2)	3,181		3,242
Other liabilities	17,636			5,940			Other liabilities	34,745		10,853
Notes payable and lines of credit, net of deferred financing costs (Note 5)	452,768			472,240			Notes payable and lines of credit, net of deferred financing costs (Note 5)	432,326		452,987
Total liabilities	478,753			483,116			Total liabilities	476,991		470,662

Commitments and Contingencies (Note 7)	—			—			Commitments and Contingencies (Note 7)	—		—

Stockholders’ Equity:							Stockholders’ Equity:
Class A Common stock, $0.01 par value; 900,000 shares authorized; 49,007 and 49,127 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively	490			492
Class A Common stock, $0.01 par value; 900,000 shares authorized; 48,747 and 49,008 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively							Class A Common stock, $0.01 par value; 900,000 shares authorized; 48,747 and 49,008 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively	487		490
Additional paid-in capital	729,000			730,416			Additional paid-in capital	726,939		729,274
Accumulated deficit and distributions	(510,488		)	(409,260		)	Accumulated deficit and distributions	(539,660)		(528,847)
Accumulated other comprehensive income (loss)	(14,017		)	8
Accumulated other comprehensive loss							Accumulated other comprehensive loss	(32,754)		(8,276)
Total stockholders’ equity	204,985			321,656			Total stockholders’ equity	155,012		192,641
Total liabilities and stockholders’ equity	$	683,738		$	804,772
Noncontrolling Interests							Noncontrolling Interests	1,169		562
Total equity							Total equity	156,181		193,203
Total liabilities and equity							Total liabilities and equity	$	633,172	$	663,865

See accompanying notes.

Table of Contents

CATCHMARK TIMBER TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except for per-share amounts)


	(Unaudited) Three Months Ended March 31,
	2020		2019
Revenues:
Timber sales	$	18,166	$	16,551
Timberland sales	4,779		2,090
Asset management fees	2,975		2,842
Other revenues	1,052		1,090
	26,972		22,573
Expenses:
Contract logging and hauling costs	7,277		7,356
Depletion	6,941		5,268
Cost of timberland sales	3,422		1,560
Forestry management expenses	1,834		1,734
General and administrative expenses	7,267		3,363
Land rent expense	124		142
Other operating expenses	1,636		1,644
	28,501		21,067

Other income (expense):
Interest income	46		30
Interest expense	(3,957)		(4,622)
Gain on large dispositions	1,279		—
	(2,632)		(4,592)

Loss before unconsolidated joint ventures	(4,161)		(3,086)
Loss from unconsolidated joint ventures (Note 4)	(88)		(27,309)
Net loss	$	(4,249)	$	(30,395)

Weighted-average common shares outstanding - basic and diluted	48,989		49,063

Net loss per share - basic and diluted	$	(0.09)	$	(0.62)

(Unaudited)
Three Months Ended
September 30,

(Unaudited)
Nine Months Ended
September 30,
2019 2018 2019 2018
Revenues:
Timber sales $ 19,706
$ 16,742
$ 52,530
$ 53,140
Timberland sales 2,264
3,818
12,578
14,904
Asset management fees 3,436
2,698
9,119
2,759
Other revenues 974
1,319
3,386
4,127
26,380
24,577
77,613
74,930
Expenses:
Contract logging and hauling costs 8,269
7,613
22,778
24,154
Depletion 8,235
6,224
19,533
19,884
Cost of timberland sales 2,081
3,210
10,562
11,590
Forestry management expenses 1,656
1,370
4,982
4,622
General and administrative expenses 2,984
2,484
9,550
8,602
Land rent expense 125
153
400
490
Other operating expenses 1,341
1,356
4,614
4,197
24,691
22,410
72,419
73,539

Other income (expense):
Interest income 80
20
142
180
Interest expense (4,472 ) (4,321 ) (13,803 ) (11,125 )
Gain on large dispositions 7,197
—
7,961
—
2,805
(4,301 ) (5,700 ) (10,945 )

Income (loss) before unconsolidated joint ventures 4,494
(2,134 ) (506 ) (9,554 )
Loss from unconsolidated joint ventures (Note 4) (25,051 ) (76,765 ) (81,011 ) (74,235 )
Net loss $ (20,557 ) $ (78,899 ) $ (81,517 ) $ (83,789 )

Weighted-average common shares outstanding - basic and diluted 49,008
49,118
49,049
47,551

Net loss per share - basic and diluted $ (0.42 ) $ (1.61 ) $ (1.66 ) $ (1.76 )

See accompanying notes.

Table of Contents

CATCHMARK TIMBER TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE ~~INCOME (LOSS)~~LOSS

(in thousands)


	(Unaudited) Three Months Ended March 31,
	2020		2019
Net loss	$	(4,249)	$	(30,395)
Other comprehensive loss:
Market value adjustment to interest rate swaps	(24,478)		(3,941)
Comprehensive loss	$	(28,727)	$	(34,336)

(Unaudited)
Three Months Ended
September 30,

(Unaudited)
Nine Months Ended
September 30,
2019 2018 2019 2018
Net loss $ (20,557 ) $ (78,899 ) $ (81,517 ) $ (83,789 )
Other comprehensive income (loss):
Market value adjustment to interest rate swaps (3,104 ) 891
(14,025 ) 4,342
Comprehensive loss $ (23,661 ) $ (78,008 ) $ (95,542 ) $ (79,447 )

See accompanying notes.

Table of Contents

CATCHMARK TIMBER TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF ~~STOCKHOLDERS’~~ EQUITY (UNAUDITED)

(in thousands, except for per-share amounts)


	Common Stock					Additional Paid-In Capital		Accumulated Deficit and Distributions		Accumulated Other Comprehensive Income (Loss)		Total Stockholders’ Equity		Noncontrolling Interests		Total Equity
	Shares	Amount
Balance, December 31, 2019	49,008	$	490	$	729,274	$	(528,847)	$	(8,276)	$	192,641	$	562	$	193,203
Common stock issued pursuant to:
LTIP, net of forfeitures and amounts withheld for income taxes	91	1		215		—		—		216		691		907
Dividends/distributions on common stock/limited partnership units ($0.135 per share/unit)	—	—		—		(6,564)		—		(6,564)		(84)		(6,648)
Repurchase of common stock	(352)	(4)		(2,550)						(2,554)		—		(2,554)
Net loss	—	—		—		(4,249)		—		(4,249)		—		(4,249)
Other comprehensive loss	—	—		—		—		(24,478)		(24,478)		—		(24,478)
Balance, March 31, 2020	48,747	$	487	$	726,939	$	(539,660)	$	(32,754)	$	155,012	$	1,169	$	156,181


	Common Stock					Additional Paid-In Capital		Accumulated Deficit and Distributions		Accumulated Other Comprehensive Income (Loss)		Total Stockholders’ Equity		Noncontrolling Interests		Total Equity
	Shares	Amount
Balance, December 31, 2018	49,127	$	492	$	730,416	$	(409,260)	$	8	$	321,656	$	—	$	321,656
Common stock issued pursuant to:
LTIP, net of forfeitures and amounts withheld for income taxes	92	1		292		—		—		293		—		293
Dividends to common stockholders ($0.135 per share)	—	—		—		(6,578)		—		(6,578)		—		(6,578)
Repurchase of common stock	(136)	(1)		(1,003)						(1,004)		—		(1,004)
Net loss	—	—		—		(30,395)		—		(30,395)		—		(30,395)
Other comprehensive loss	—	—		—		—		(3,941)		(3,941)		—		(3,941)
Balance, March 31, 2019	49,083	$	492	$	729,705	$	(446,233)	$	(3,933)	$	280,031	$	—	$	280,031

See accompanying notes.

Common Stock Additional
Paid-In
Capital Accumulated
Deficit and Distributions Accumulated Other Comprehensive Income (Loss) Total
Stockholders’
Equity
Shares Amount
Balance, December 31, 2018 49,127
$ 492
$ 730,416
$ (409,260 ) $ 8
$ 321,656
Common stock issued pursuant to:
LTIP, net of forfeitures and amounts withheld for income taxes 92
1
292
—
—
293
Dividends to common stockholders ($0.135 per share) —
—
—
(6,578 ) —
(6,578 )
Repurchase of common stock (136 ) (1 ) (1,003 ) (1,004 )
Net loss —
—
—
(30,395 ) —
(30,395 )
Other comprehensive loss —
—
—
—
(3,941 ) (3,941 )
Balance, March 31, 2019 49,083
$ 492
$ 729,705
$ (446,233 ) $ (3,933 ) $ 280,031
Common stock issued pursuant to:
LTIP, net of forfeitures and amounts withheld for income taxes 17
—
490
—
—
490
Dividends to common stockholders ($0.135 per share) —
—
—
(6,578 ) —
(6,578 )
Repurchase of common stock (135 ) (2 ) (1,403 ) —
—
(1,405 )
Net loss —
—
—
(30,565 ) —
(30,565 )
Other comprehensive loss —
—
—
—
(6,980 ) (6,980 )
Balance, June 30, 2019 48,965
$ 490
$ 728,792
$ (483,376 ) $ (10,913 ) $ 234,993
Common stock issued pursuant to:
LTIP, net of forfeitures and amounts withheld for income taxes 100
1
802
—
—
803
Dividends to common stockholders ($0.135 per share) —
—
—
(6,555 ) —
(6,555 )
Repurchase of common stock (58 ) (1 ) (594 ) —
—
(595 )
Net loss —
—
—
(20,557 ) —
(20,557 )
Other comprehensive loss —
—
—
—
(3,104 ) (3,104 )
Balance, September 30, 2019 49,007
$ 490
$ 729,000
$ (510,488 ) $ (14,017 ) $ 204,985

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CATCHMARK TIMBER TRUST, INC. AND SUBSIDIARIES

~~CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED) (CONTINUED)~~

~~(in thousands, except for per-share amounts)~~

Common Stock Additional
Paid-In
Capital Accumulated
Deficit and Distributions Accumulated Other Comprehensive Income Total
Stockholders’
Equity
Shares Amount
Balance, December 31, 2017 43,425
$ 434
$ 661,222
$ (261,652 ) $ 2,376
$ 402,380
Common stock issued pursuant to:
Equity Offering 5,750
58
72,392
—
—
72,450
LTIP, net of forfeitures and amounts withheld for income taxes (46 ) (1 ) (85 ) —
—
(86 )
Stock issuance cost —
—
(3,490 ) —
—
(3,490 )
Dividends to common stockholders ($0.135 per share) —
—
—
(5,815 ) —
(5,815 )
Net loss —
—
—
(3,385 ) (3,385 )
Other comprehensive income —
—
—
—
1,931
1,931
Balance, March 31, 2018 49,129
$ 491
$ 730,039
$ (270,852 ) $ 4,307
$ 463,985
Common stock issued pursuant to:
LTIP, net of forfeitures and amounts withheld for income taxes (6 ) —
422
—
—
422
Stock issuance cost —
—
(100 ) —
—
(100 )
Dividends to common stockholders ($0.135 per share) —
—
—
(6,597 ) —
(6,597 )
Net loss —
—
—
(1,505 ) —
(1,505 )
Other comprehensive income —
—
—
—
1,520
1,520
Balance, June 30, 2018 49,123
$ 491
$ 730,361
$ (278,954 ) $ 5,827
$ 457,725
Common stock issued pursuant to:
LTIP, net of forfeitures and amounts withheld for income taxes 2
—
486
—
—
486
Stock issuance cost —
—
(33 ) —
—
(33 )
Dividends to common stockholders ($0.135 per share) —
—
—
(6,601 ) —
(6,601 )
Net loss —
—
—
(78,899 ) —
(78,899 )
Other comprehensive income —
—
—
—
891
891
Balance, September 30, 2018 49,125
$ 491
$ 730,814
$ (364,454 ) $ 6,718
$ 373,569

~~See accompanying notes.~~

~~CATCHMARK TIMBER TRUST, INC. AND SUBSIDIARIES~~

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)


	(Unaudited) Three Months Ended March 31,
	2020		2019
Cash Flows from Operating Activities:
Net loss	$	(4,249)	$	(30,395)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depletion	6,941		5,268
Basis of timberland sold, lease terminations and other	3,276		1,807
Stock-based compensation expense	1,872		659
Noncash interest expense	707		250
Other amortization	51		208
Gain on large dispositions	(1,279)		—
Income from unconsolidated joint ventures	88		27,309
Operating distributions from unconsolidated joint ventures	—		179
Interest paid under swaps with other-than-insignificant financing element	340		—
Changes in assets and liabilities:
Accounts receivable	1,619		1,363
Prepaid expenses and other assets	359		513
Accounts payable and accrued expenses	2,576		(1,109)
Other liabilities	(1,042)		(805)
Net cash provided by operating activities	11,259		5,247

Cash Flows from Investing Activities:
Capital expenditures (excluding timberland acquisitions)	(2,712)		(1,259)
Distributions from unconsolidated joint ventures	400		796
Net proceeds from large dispositions	20,863		—
Net cash provided by (used in) investing activities	18,551		(463)

Cash Flows from Financing Activities:
Repayment of notes payable	(20,850)		—
Financing costs paid	(30)		(31)
Interest paid under swaps with other-than-insignificant financing element	(340)		—
Dividends/distributions paid	(6,648)		(6,578)
Repurchase of common shares	(2,052)		(1,004)
Repurchase of common shares for minimum tax withholding	(965)		(365)
Net cash used in financing activities	(30,885)		(7,978)
Net change in cash and cash equivalents	(1,075)		(3,194)
Cash and cash equivalents, beginning of period	11,487		5,614
Cash and cash equivalents, end of period	$	10,412	$	2,420

(Unaudited)
Nine Months Ended
September 30,
2019 2018
Cash Flows from Operating Activities:
Net loss $ (81,517 ) $ (83,789 )
Adjustments to reconcile net loss to net cash provided by operating activities:
Depletion 19,533
19,884
Basis of timberland sold, lease terminations and other 10,329
10,771
Stock-based compensation expense 1,952
2,171
Noncash interest expense 816
2,371
Other amortization 170
160
Loss from unconsolidated joint ventures 81,011
74,235
Operating distributions from unconsolidated joint ventures 789
3,658
Gain on large dispositions (7,961 ) —
Changes in assets and liabilities:
Accounts receivable 2,007
(2,643 )
Prepaid expenses and other assets 221
(295 )
Accounts payable and accrued expenses 138
1,627
Other liabilities 1,025
1,121
Net cash provided by operating activities 28,513
29,271

Cash Flows from Investing Activities:
Timberland acquisitions and earnest money paid —
(91,424 )
Capital expenditures (excluding timberland acquisitions) (3,031 ) (2,821 )
Investment in unconsolidated joint ventures —
(200,000 )
Distributions from unconsolidated joint ventures 4,019
4,858
Net proceeds from large dispositions 25,151
—
Net cash provided by (used in) investing activities 26,139
(289,387 )

Cash Flows from Financing Activities:
Repayments of notes payable (20,064 ) (69,000 )
Proceeds from note payable —
289,000
Financing costs paid (48 ) (832 )
Issuance of common stock —
72,450
Other offering costs paid —
(3,623 )
Dividends paid to common stockholders (19,711 ) (19,013 )
Repurchase of common shares under the share repurchase program (3,004 ) —
Repurchase of common shares for minimum tax withholdings (365 ) (1,348 )
Net cash provided by (used in) financing activities (43,192 ) 267,634
Net change in cash and cash equivalents 11,460
7,518
Cash and cash equivalents, beginning of period 5,614
7,805
Cash and cash equivalents, end of period $ 17,074
$ 15,323

See accompanying notes.

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CATCHMARK TIMBER TRUST, INC. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~SEPTEMBER 30, 2019~~MARCH 31, 2020 (unaudited)

1. Organization

CatchMark Timber Trust Inc. ("CatchMark Timber Trust") (NYSE: CTT) owns and operates timberlands located in the United States and has elected to be taxed as a REIT for federal income tax purposes. CatchMark Timber Trust acquires, owns, operates, manages, and disposes of timberland directly, through wholly-owned subsidiaries, or through joint ventures. CatchMark Timber Trust was incorporated in Maryland in 2005 and commenced operations in 2007. CatchMark Timber Trust conducts substantially all of its business through CatchMark Timber Operating Partnership, L.P. (“CatchMark Timber OP”), a Delaware limited partnership. CatchMark Timber Trust is the general partner of CatchMark Timber OP, possesses full legal control and authority over its operations, and owns ~~99.99%~~99.85% of its common partnership units. CatchMark LP Holder, LLC (“CatchMark LP Holder”), a Delaware limited liability company and wholly-owned subsidiary of CatchMark Timber Trust, is the sole limited partner of CatchMark Timber OP and owns ~~the remaining~~ 0.01% of its common partnership units. The remaining 0.14% of CatchMark Timber OP’s common partnership units are owned by current and former officers and directors of CatchMark Timber Trust as a result of CatchMark’s LTIP Unit compensation program (see Note 8 — Stock-based Compensation). In addition, CatchMark Timber TRS, Inc. (“CatchMark TRS”), a Delaware corporation formed as a wholly-owned subsidiary of CatchMark Timber OP in 2006, is our taxable REIT subsidiary. Unless otherwise noted, references herein to ~~“CatchMark”~~CatchMark shall include CatchMark Timber Trust and all of its subsidiaries, including CatchMark Timber OP, and the subsidiaries of CatchMark Timber OP, including CatchMark TRS.

Risks and Uncertainties

CatchMark is subject to risks and uncertainties as a result of the COVID-19 pandemic. The extent of the impact of the COVID-19 pandemic on CatchMark’s business and that of its customers and contractors is highly uncertain and difficult to predict, as the response to the pandemic is in its incipient stages and information is rapidly evolving. Furthermore, capital markets and economies worldwide have also been negatively impacted by the COVID-19 pandemic, and it is possible that it could cause a local and/or global economic recession. Such economic disruption could have a material adverse effect on CatchMark’s business due to declines in sawtimber harvest volumes resulting from a deterioration in the housing market; a decline in production level at CatchMark’s customers' mills due to instances of COVID-19 among their employees or decreased demand for their products; the inability to complete timberland sales due to state and local government office closures limiting the ability of potential buyers to complete title searches and other customary due diligence; effects on key employees, including operational management personnel and those charged with preparing, monitoring and evaluating CatchMark’s financial reporting and internal controls; and market volatility and market downturns negatively impacting the trading of CatchMark’s common stock. Policymakers around the globe have responded with fiscal policy actions to support the economy; however, the magnitude and overall effectiveness of these actions remains uncertain.

The severity of the impact of the COVID-19 pandemic on CatchMark’s business will depend on a number of factors, including, but not limited to, the duration and severity of the pandemic and the extent and severity of the impact on CatchMark’s customers, all of which are uncertain and cannot be predicted. CatchMark’s future results of operations and liquidity could be adversely impacted by uncertain customer demand and the impact of any initiatives or programs that CatchMark may undertake to address financial and operational challenges faced by its customers. As of the date of issuance of these condensed consolidated financial statements, the extent to which the COVID-19 pandemic may materially impact CatchMark’s financial condition, liquidity, or results of operations is uncertain. See Note 5 — Notes Payable and Lines of Credit for additional information on CatchMark’s outstanding indebtedness and debt covenants.

2. Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

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The consolidated financial statements of CatchMark have been prepared in accordance with the rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X and do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the financial statements for the unaudited interim periods presented include all adjustments, which are of a normal and recurring nature, necessary for a fair and consistent presentation of the results for such periods. Results for these interim periods are not necessarily indicative of results for a full year.

CatchMark’s consolidated financial statements include the accounts of CatchMark and any VIE in which CatchMark is deemed the primary beneficiary. With respect to entities that are not VIEs, CatchMark's consolidated financial statements also include the accounts of any entity in which CatchMark owns a controlling financial interest and any limited partnership in which CatchMark owns a controlling general partnership interest. In determining whether a controlling interest exists, CatchMark considers, among other factors, the ownership of voting interests, protective rights, and participatory rights of the investors. All intercompany balances and transactions have been eliminated in consolidation. For further information, refer to the audited financial statements and footnotes included in CatchMark’s Annual Report on Form 10-K for the year ended December 31, ~~2018.~~2019.

Investments in Joint Ventures

For joint ventures that it does not control but exercises significant influence, CatchMark uses the equity method of accounting. CatchMark's judgment about its level of influence or control of an entity involves consideration of various factors including the form of its ownership interest; its representation in the entity's governance; its ability to participate in policy-making decisions; and the rights of other investors to participate in the decision-making process, to replace CatchMark as manager, and/or to liquidate the venture. Under the equity method, the investment in a joint venture is recorded at cost and adjusted for equity in earnings and cash contributions and distributions. Income or loss and cash distributions from an unconsolidated joint venture are allocated according to the provisions of the respective joint venture agreement, which may be different from its stated ownership percentages. Any difference between the carrying amount of these investments on CatchMark’s balance sheets and the underlying equity in net assets on the joint venture’s balance sheets is adjusted as the related underlying assets are depreciated, amortized, or sold. Distributions received from unconsolidated joint ventures are classified in the accompanying consolidated statements of cash flows using the

cumulative earnings approach under which distributions received in an amount equal to cumulative equity in earnings are classified as cash inflows from operating activities and distributions received in excess of cumulative equity in earnings represent returns of investment and therefore are classified as cash inflows from investing activities.

CatchMark evaluates the recoverability of its investments in unconsolidated joint ventures in accordance with accounting standards for equity investments by first reviewing each investment for any indicators of impairment. If indicators are present, CatchMark estimates the fair value of the investment. If the carrying value of the investment is greater than the estimated fair value, management assesses whether the impairment is “temporary” or “other-than-temporary.” In making this assessment, management considers the following: (1) the length of time and the extent to which fair value has been less than cost, (2) the financial condition and near-term prospects of the entity, and (3) CatchMark’s intent and ability to retain its interest long enough for a recovery in market value. If management concludes that the impairment is "other than temporary," CatchMark reduces the investment to its estimated fair value.

For information on CatchMark’s unconsolidated joint ventures, which are accounted for using the equity method of accounting, see Note 4 — Unconsolidated Joint Ventures.

Impairment Testing

ASC 360-10 requires impairment testing to be completed whenever events or changes in circumstances indicate the asset's carrying value may not be recoverable. Examples of such circumstances for CatchMark include, but are not limited to, a significant decrease in market price of the timber assets, a significant adverse change in the extent or manner in which timber assets are being used, or a significant adverse change in legal factors or in the business climate that could affect the value of the timber assets. CatchMark monitors such events and changes in circumstances, and when indicators of potential impairment are present, evaluates if the carrying amounts of its timber

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assets exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposal of its timber assets (the "Recoverable Amount") and if the carrying amount exceeds the timber assets' fair value. The Recoverable Amount and fair value are estimated based on the following information in order of preference, dependent upon availability: (i) recently quoted market prices, (ii) market prices for comparable assets, or (iii) the present value of undiscounted cash flows, including estimated salvage value, using data from one harvest cycle. CatchMark completed the impairment testing as of March 31, 2020 and has determined that there has been no impairment to its timber assets.

Segment Information

CatchMark primarily engages in the acquisition, ownership, operation, management, and disposition of timberland properties located in the United States, either directly through wholly-owned subsidiaries or through equity method investments in affiliated joint ventures. CatchMark defines operating segments in accordance with ASC Topic 280, Segment Reporting, to reflect the manner in which its chief operating decision maker, the Chief Executive Officer, evaluates performance and allocates resources in managing the business. CatchMark has aggregated its operating segments into ~~three~~3 reportable segments: Harvest, Real Estate and Investment Management. See Note 9 — Segment Information for additional information.

~~New Lease Accounting Standard~~

~~In February 2016, the FASB issued ASU 2016-02,~~ ~~Leases~~ ("ASC 842"). ASC 842 establishes a right-of-use ("ROU") model that requires a lessee to record a ROU asset and a lease liability on its balance sheet for all leases, subject to certain scope exceptions. Leases are required to be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement.

CatchMark adopted ASC 842 effective January 1, 2019 using the modified retrospective approach with the cumulative effect of the application recognized at the effective date. CatchMark elected the package of practical expedients, including the option to account for each separate lease component of a contract and its associated non-lease component as a single lease component, thus causing all fixed payments to be capitalized; and the practical expedient, which among other things, allows CatchMark to carry forward historical lease classification. Variable lease payment amounts that cannot be determined at the commencement of the lease such as increases in lease payments based on changes in index rates or usage, are not included in the operating lease ROU asset or liability. These are expensed as incurred and recorded as variable lease expense. Management identified and evaluated all of its in-place leases, subleases, and contracts with a lease component, and determined that its office lease is the only lease within the scope of ASC 842. CatchMark elected the practical expedient to not apply the recognition requirements of ASC 842 to its short-term leases. CatchMark determined its long-term timber lease to be a lease of biological assets, a scope exception to ASC 842. Long-term timber lease expense is reported as land rent expense on CatchMark's consolidated statements of operations. See ~~Note 7 — Commitments and Contingencies, Obligations under Operating Leases~~ ~~for additional information on the long-term timber lease. Additionally, CatchMark determined that its hunting and recreational leases do not qualify as leases under ASC 842. See~~ ~~Note 2 — Summary of Significant Accounting Policies~~ ~~and~~ ~~Note 11 — Recreational Leases~~ ~~to CatchMark’s audited financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2018 for additional information on its hunting and recreational leases.~~

CatchMark's office lease commenced in January 2019 and expires in November 2028 and qualifies as an operating lease under ASC 842. As of January 1, 2019, CatchMark recorded an operating lease ROU asset and an operating lease liability of $3.4 million on its balance sheet, which represents the net present value of lease payments over the lease term discounted using CatchMark's incremental borrowing rate at commencement date. CatchMark’s office lease contains renewal options; however, the options were not included in the calculation of the operating lease ROU and operating lease liability as it is not reasonably certain that CatchMark will exercise the renewal options. CatchMark recorded $11,000 and $111,000 of amortization expense related to the operating lease ROU asset and the operating lease liability, respectively, for the three and nine months ended September 30, 2019, which was included in general and administrative expenses on its consolidated statement of operations and in other amortization on its consolidated statement of cash flows. For the three and nine months ended September 30, 2019, CatchMark paid $98,000 and

$215,000, respectively, in cash for its office lease. The adoption of ASC 842 did not result in a cumulative-effect adjustment to CatchMark's retained earnings, as its office lease commenced in January 2019.

~~CatchMark had the following future annual payments for its operating lease as of September 30, 2019 and December 31, 2018:~~

As of
(in thousands)
September 30, 2019 December 31, 2018
Required payments
2019 $ 97
$ 312
2020 397
397
2021 412
412
2022 424
424
2023 435
435
2024 447
447
Thereafter 1,873
1,873
$ 4,085
$ 4,300
Less: imputed interest (783 )
Operating lease liability $ 3,302

Remaining lease term (years) 9.2

Discount rate 4.58 %

Recent Accounting Pronouncements

~~In August 2017, the FASB issued ASU 2017-12,~~ ~~Targeted Improvements to Accounting for Hedging Activities (Topic 815),~~ ~~which amends the hedge accounting recognition and presentation requirements in ASC 815, "Derivatives and Hedging." In October 2018, the FASB issued ASU 2018-16,~~ ~~Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes~~. ASU 2017-12 expands an entity's ability to hedge nonfinancial and financial risk components and reduces the complexity in fair value hedges of interest rate risk. It eliminates the requirement to separately measure and report hedge ineffectiveness and requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item when the hedged item affects earnings. The amendments in ASU 2018-16 permit use of the OIS rate based on SOFR as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815. CatchMark adopted ASU 2017-12 on January 1, 2018 and ASU 2018-16 on January 1, 2019. These adoptions did not have a material effect on CatchMark's consolidated financial statements.

~~In June 2018, the FASB issued ASU 2018-07,~~ ~~Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting,~~ which expands the scope of ASC 718 to include share-based payments granted to non-employees in exchange for goods or services used or consumed in an entity’s own operations. This guidance aligns the measurement and classification for share-based payments to non-employees with the guidance for share-based payments to employees, with certain exceptions. ASU 2018-07 is effective for public entities for fiscal years beginning after December 15, 2018, and interim periods therein. CatchMark adopted ASU 2018-07 on January 1, 2019 and the adoption did not have a material effect on its consolidated financial statements.

~~On July 16, 2018, the FASB issued ASU 2018-09,~~ ~~Codification Improvements.~~ The amendments in this update represent changes to clarify the ASC, correct unintended application of guidance, or make minor improvements to the ASC that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. Some of the amendments make the ASC easier to understand and easier to apply by eliminating inconsistencies, providing needed clarifications, and improving the presentation of guidance in the ASC. ASU 2018-09 is effective for public entities for fiscal years beginning after December 15, 2018, and interim periods therein. CatchMark adopted ASU 2018-09 on January 1, 2019 and the adoption did not have a material effect on its consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement, which added new disclosure requirements, eliminated and modified existing disclosure requirements on fair value measurement to improve the effectiveness of ASC 820. ASU 2018-13 is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. ~~CatchMark is currently assessing the impact~~The adoption of ASU 2018-13 ~~will~~did not have a material effect on ~~its~~CatchMark's consolidated financial statements.

In ~~October 2018,~~December 2019, the FASB issued ASU ~~2018-17,~~ ~~Consolidation~~2019-12, Income Taxes (Topic ~~810)~~740): ~~Targeted Improvements~~Simplifying the Accounting for Income Taxes, which removed certain exceptions for intra-period tax allocation, recognition of deferred tax liabilities, and calculation of income taxes in interim periods. This ASU also added guidance to ~~Related Party Guidance~~reduce complexity in certain areas, including recognizing deferred taxes for ~~Variable Interest Entities,~~ ~~whichreduces the cost~~tax goodwill and ~~complexity~~allocating taxes to members of financial reporting associated with consolidation of VIEs. This guidance supersedes the private company alternative for common control leasing arrangements issued in 2014 and expands it to all qualifying common control arrangements.a consolidated group. ASU ~~2018-17~~2019-12 is effective for public entities for fiscal years beginning after December 15, ~~2019,~~2020, and interim periods therein. CatchMark is currently assessing the impact ASU ~~2018-17~~2019-12 will have on its consolidated financial statements.

In March 2020, the FASB issued ASU 2020-03, Codification Improvements to Financial Instruments, which provides clarifications on seven topics related to financial instruments in the ASC. The update became effective for CatchMark upon issuance and the adoption did not have a material impact on its consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides companies with optional expedients and exceptions for applying GAAP to contract, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform if certain criteria are met. CatchMark has elected the optional expedients offered in this update. The amendments did not apply to any transaction in the current quarter and will be applied prospectively to all eligible contracts and hedging relationships.

3. Timber Assets

As of ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, timber and timberlands consisted of the following, respectively:

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	As of September 30, 2019							As of March 31, 2020
(in thousands)	Gross		Accumulated Depletion or Amortization		Net		(in thousands)	Gross		Accumulated Depletion or Amortization		Net
Timber	$	312,747	$	19,533	$	293,214	Timber	$	280,265	$	6,941	$	273,324
Timberlands	350,123		—		350,123		Timberlands	332,779		—		332,779
Mainline roads	1,041		715		326		Mainline roads	1,121		763		358
Timber and timberlands	$	663,911	$	20,248	$	643,663	Timber and timberlands	$	614,165	$	7,704	$	606,461


	As of December 31, 2019
(in thousands)	Gross		Accumulated Depletion or Amortization		Net
Timber	$	312,452	$	28,064	$	284,388
Timberlands	348,825		—		348,825
Mainline roads	1,106		738		368
Timber and timberlands	$	662,383	$	28,802	$	633,581

As of December 31, 2018
(in thousands) Gross
Accumulated
Depletion or
Amortization
Net
Timber $ 345,972
$ 25,912
$ 320,060
Timberlands 367,488
—
367,488
Mainline roads 954
651
303
Timber and timberlands $ 714,414
$ 26,563
$ 687,851

~~Timberland Acquisitions~~

CatchMark did not complete any timberland acquisitions during the three and nine months ended September 30, 2019. In August 2018, CatchMark acquired fee simple interests in 18,100 acres of timberland in Oregon (the "Bandon Property") for $89.7 million, exclusive of closing costs.

Timberland Sales

During the three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ CatchMark sold ~~1,100~~3,000 and ~~1,900~~900 acres of timberland for ~~$2.3~~$4.8 million and ~~$3.8~~$2.1 million, respectively. CatchMark's cost basis in the timberland sold was ~~$1.8~~$3.2 million and ~~$3.0~~$1.4 million, respectively.

During the nine months ended September 30, 2019 and 2018, CatchMark sold 6,000 and 7,200 acres of timberland for $12.6 million and $14.9 million, respectively. CatchMark's cost basis in the timberland sold was $9.8 million and $10.7 million, respectively.

Large Dispositions

~~On July 26, 2019,~~During the three months ended March 31, 2020, CatchMark completed the sale of ~~10,800~~14,400 acres of its wholly-owned timberlands located in Georgia ~~and Alabama~~ for ~~$19.9~~$21.3 million. CatchMark's total cost basis was ~~$12.6~~$19.6 million. Of the total net proceeds, ~~of $19.8 million, $14.8~~$20.9 million was used to pay down CatchMark's outstanding debt balance on the Multi-Draw Term Facility. CatchMark did not complete any large dispositions during the three months ended March 31, 2019.

Timberland sales and large dispositions acreage by state is listed below:


	Nine Months Ended September 30,			Three Months Ended March 31,
Acres Sold In:	2019	2018	Acres Sold In:	2020	2019
South			South
Timberland Sales			Timberland Sales
Alabama	2,900	800	Alabama	1,600	500
Georgia	13,300	2,200	Georgia	1,200	—
Louisiana	—	200
North Carolina	500	1,000	North Carolina	—	400
South Carolina	3,700	2,900	South Carolina	100	—
Texas	—	100
Tennessee			Tennessee	100	—
				3,000	900
Large Dispositions			Large Dispositions
Georgia			Georgia	14,400	—

Total	20,400	7,200	Total	17,400	900

Current Timberland Portfolio

As of ~~September 30, 2019,~~March 31, 2020, CatchMark directly owned interests in ~~438,800~~415,400 acres of timberlands in the U.S. South and Pacific Northwest, ~~412,500~~392,800 acres of which were fee-simple interests and ~~26,300~~22,600 acres were leasehold interests. Land acreage by state is listed below:

Acres by state as of September 30, 2019 ⁽¹⁾
Fee Lease Total
South
Alabama 70,000
1,800
71,800
Florida 2,000
—
2,000
Georgia 248,000
24,500
272,500
North Carolina 100
—
100
South Carolina 74,000
—
74,000
Tennessee 300
—
300
394,400
26,300
420,700
Pacific Northwest
Oregon 18,100
—
18,100
Total 412,500
26,300
438,800


Acres by state as of March 31, 2020 ⁽¹⁾	Fee	Lease	Total
South
Alabama	68,400	1,800	70,200
Florida	2,000	—	2,000
Georgia	232,400	20,800	253,200
North Carolina	100	—	100
South Carolina	71,600	—	71,600
Tennessee	200	—	200
	374,700	22,600	397,300
Pacific Northwest
Oregon	18,100	—	18,100
Total	392,800	22,600	415,400

⁽¹⁾Represents CatchMark wholly-owned acreage only; excludes ownership interest in acreage held by joint ventures.

4. Unconsolidated Joint Ventures

As of ~~September 30, 2019,~~March 31, 2020, CatchMark owned interests in ~~two~~2 joint ventures with unrelated parties: the Triple T Joint Venture and the Dawsonville Bluffs Joint Venture (each as defined and described below).

⁽¹⁾Represents our share of total partner capital contributions.

⁽²⁾The Triple T Joint Venture considers inventory to be merchantable at age 12. Merchantable timber inventory does not include current year growth.

CatchMark accounts for these investments using the equity method of accounting.

Triple T Joint Venture

During 2018, CatchMark formed a joint venture, TexMark Timber Treasury, L.P., a Delaware limited partnership (the "Triple T Joint Venture"), with a consortium of institutional investors (the "Preferred Investors") to acquire 1.1 million acres of high-quality East Texas industrial timberlands (the “Triple T Timberlands”), for $1.39 billion (the “Acquisition Price”), exclusive of transaction costs. The Triple T Joint Venture completed the acquisition of the Triple T Timberlands in July 2018. CatchMark invested $200.0 million in the Triple T Joint Venture, equal to 21.6% of the total equity contributions, in exchange for a common limited partnership interest. CatchMark, through a separate wholly-owned and consolidated subsidiary, is the sole general partner of the Triple T Joint Venture.

CatchMark uses the equity method to account for its investment in the Triple T Joint Venture since it does not possess the power to direct the activities that most significantly impact the economic performance of the Triple T Joint Venture, and accordingly, CatchMark does not possess the first characteristic of a primary beneficiary described in GAAP. CatchMark has appointed ~~three~~3 common board members of the Triple T Joint Venture, including its Chief

Chief ~~Financial~~Resources Officer and ~~Senior~~ Vice President ~~of Forest Resources,~~- Acquisitions, which provides CatchMark with significant influence over the Triple T Joint Venture. Accordingly, pursuant to the applicable accounting literature, it is appropriate for CatchMark to apply the equity method of accounting to its investment in the Triple T Joint Venture.

The Triple T Joint Venture agreement provides for liquidation rights and distribution priorities that are significantly different from CatchMark's stated ownership percentage based on total equity contributions. The Preferred Investors are entitled to a minimum 10.25% cumulative return on their equity contributions, plus a complete return of their equity contributions before any distributions may be made on CatchMark’s common limited partnership interest. As such, CatchMark uses the hypothetical-liquidation-at-book-value method (“HLBV”) to determine its equity in the earnings of the Triple T Joint Venture. The HLBV method is commonly applied to equity investments in real estate, where cash distribution percentages vary at different points in time and are not directly linked to an investor's ownership percentage. For investments accounted for under the HLBV method, applying the percentage ownership interest to GAAP net income in order to determine earnings or losses would not accurately represent the income allocation and cash flow distributions that will ultimately be received by the investors.

CatchMark applies HLBV using a balance sheet approach. A calculation is prepared at each balance sheet date to determine the amount that CatchMark would receive if the Triple T Joint Venture were to liquidate all of its assets (at book value in accordance with GAAP) on that date and distribute the proceeds to the partners based on the contractually-defined liquidation priorities. The difference between the calculated liquidation distribution amounts at the beginning and the end of the reporting period, after adjusting for capital contributions and distributions, is CatchMark's income or loss from the Triple T Joint Venture for the period.

Condensed balance sheet information for the Triple T Joint Venture is as follows:


	As of
(in thousands)	March 31, 2020		December 31, 2019
Triple T Joint Venture:
Total assets	$	1,560,622	$	1,573,172
Total liabilities	$	757,078	$	751,655
Total equity	$	803,544	$	821,517
CatchMark:
Carrying value of investment	$	—	$	—

As of
(in thousands) September 30, 2019 December 31, 2018
Triple T Joint Venture:
Total assets $ 1,586,687
$ 1,607,413
Total liabilities $ 757,110
$ 754,610
Total equity $ 829,577
$ 852,803
CatchMark:
Carrying value of investment $ 8,650
$ 90,450

Condensed income statement information for the Triple T Joint Venture is as follows:


	Three Months Ended March 31,
(in thousands)	2020		2019
Triple T Joint Venture:
Total revenues	$	35,281	$	35,964
Net loss	$	(5,727)	$	(4,281)
CatchMark:
Equity share of net loss	$	—	$	(27,488)

Three Months Ended
September 30,

Nine Months Ended
September 30,
(in thousands) 2019 2018 2019 2018
Triple T Joint Venture:
Total revenues $ 41,509
$ 28,255
$ 121,450
$ 28,255
Operating income (loss) $ 2,490
$ (3,329 ) $ 10,437
$ (3,329 )
Net loss $ (4,613 ) $ (9,407 ) $ (10,480 ) $ (9,407 )
CatchMark:
Equity share of net loss $ (25,712 ) $ (76,755 ) $ (81,800 ) $ (76,755 )

Condensed statement of cash flow information for the Triple T Joint Venture is as follows:

~~CatchMark's~~CatchMark had recognized cumulative HLBV losses of $200.0 million as of December 31, 2019 and did not recognize an additional equity ~~share of~~loss in the Triple T Joint ~~Venture's net loss determined using~~Venture during the ~~HLBV method as of September 30, 2019 is calculated as follows:~~three months ended March 31, 2020.

(in thousands)
Triple T Joint Venture:
Total equity as of September 30, 2019 $ 829,577
Preferred Investors:
Equity in Triple T Joint Venture as of January 1, 2019 $ 762,353

Minimum preferred return as of September 30, 2019 $ 58,445

Class A preferred equity as of September 30, 2019 $ 129

HLBV distribution as of September 30, 2019 $ 820,927
CatchMark:
Equity in Triple T Joint Venture as of September 30, 2019 $ 8,650
Equity in Triple T Joint Venture, as of January 1, 2019 $ 90,450
Equity share of Triple T Joint Venture's net loss $ (81,800 )

Dawsonville Bluffs Joint Venture

During 2017, CatchMark formed the Dawsonville Bluffs Joint Venture with MPERS, and each owns a 50% membership interest. CatchMark shares substantive participation rights with MPERS, including management selection and termination, and the approval of material operating and capital decisions and, as such, uses the equity method of accounting to record its investment. Income or loss and cash distributions are allocated according to the provisions of the joint venture agreement, which are consistent with the ownership percentages for the Dawsonville Bluffs Joint Venture.

During the third quarter of 2019, the Dawsonville Bluffs Joint Venture completed the disposition of substantially all of its remaining 4,400 acres of timberlands for $8.7 million. On August 1, 2019, CatchMark received a $3.8 million

cash distribution as a result of this disposition. For the nine months ended September 30, 2019 and 2018, CatchMark received cash distributions of $4.8 million and $8.5 million, respectively, from the Dawsonville Bluffs Joint Venture.

As of ~~September 30, 2019,~~March 31, 2020, the Dawsonville Bluffs Joint Venture had a mitigation bank ~~credits~~ with a book basis of ~~$2.9~~$2.6 million ~~in addition to 65 acres of timberland~~ remaining in its portfolio. Condensed balance sheet information for the Dawsonville Bluffs Joint Venture is as follows:


	As of
(in thousands)	March 31, 2020		December 31, 2019
Dawsonville Bluffs Joint Venture:
Total assets	$	3,023	$	4,041
Total liabilities	$	68	$	111
Total equity	$	2,955	$	3,930
CatchMark:
Carrying value of investment	$	1,478	$	1,965

As of
(in thousands) September 30, 2019 December 31, 2018
Dawsonville Bluffs Joint Venture:
Total assets $ 4,148
$ 12,164
Total liabilities $ 597
$ 575
Total equity $ 3,551
$ 11,589
CatchMark:
Carrying value of investment $ 1,776
$ 5,795

Condensed income statement information for the Dawsonville Bluffs Joint Venture is as follows:


	Three Months Ended March 31,
(in thousands)	2020		2019
Dawsonville Bluffs Joint Venture:
Total revenues	$	—	$	1,413
Net income (loss)	$	(175)	$	357
CatchMark:
Equity share of net income (loss)	$	(88)	$	179

Three Months Ended
September 30,

Nine Months Ended
September 30,
(in thousands) 2019 2018 2019 2018
Dawsonville Bluffs Joint Venture:
Total revenues $ 8,648
$ 198
$ 10,068
$ 13,813
Net income (loss) $ 1,323
$ (19 ) $ 1,578
$ 5,040
CatchMark:
Equity share of net income (loss) $ 661
$ (10 ) $ 789
$ 2,520

Condensed statement of cash flow information for the Dawsonville Joint Venture is as follows:

During the three months ended March 31, 2020 and 2019, CatchMark received cash distributions of $0.4 million and $1.0 million, respectively, from the Dawsonville Bluffs Joint Venture.

Risks and Uncertainties related to Unconsolidated Joint Ventures

CatchMark’s unconsolidated joint ventures, most notably the Triple T Joint Venture, are subject to risks and uncertainties as a result of the COVID-19 pandemic. The extent of the impact of the COVID-19 pandemic on the Triple T Joint Venture’s business and that of its customers and contractors is highly uncertain and difficult to predict, as the response to the pandemic is in its incipient stages and information is rapidly evolving. Capital markets and economies worldwide have also been negatively impacted by the COVID-19 pandemic, and it is possible that it could cause a local and/or global economic recession. Such economic disruption could have a material adverse effect on the Triple T Joint Venture’s business due to the same reasons discussed in Note 1 — Organization with respect to CatchMark. The severity of the impact of the COVID-19 pandemic on the Triple T Joint Venture’s business will depend on a number of factors, including, but not limited to, the duration and severity of the pandemic and the extent and severity of the impact on the Triple T Joint Venture’s customers, all of which are uncertain and cannot be predicted. As of the date of issuance of these condensed consolidated financial statements, the extent to which the COVID-19 pandemic may materially impact the financial condition, liquidity, or results of operations of CatchMark’s unconsolidated joint ventures is uncertain.

Asset Management Fees

CatchMark provides asset management services to the Triple T Joint Venture and the Dawsonville Bluffs Joint Venture. Under these arrangements, CatchMark oversees the day-to-day operations of these joint ventures and their properties, including accounting, reporting and other administrative services, subject to certain major decisions that require partner approval. For management of the Triple T Joint Venture, CatchMark receives a fee equal to ~~1% per annum, subject to reduction and deferment in certain circumstances,~~a percentage of the Acquisition Price multiplied by 78.4%, which represents the percentage of the total equity contributions made to the Triple T Joint Venture by the Preferred Investors. ~~For~~The percentage is currently 1%. In the event the Preferred Investors have not received a return of their capital contributions plus their preferred return, then the percentage decreases from 1% to 0.75% at October 1, 2021, and to 0.5% at October 1, 2022. The fee is also subject to deferment in certain circumstances. In addition, the asset management agreement with the Triple T Joint Venture includes a "key man" provision requiring CatchMark to find a suitable replacement for Jerry Barag, CatchMark's former Chief Executive Officer, within one year of his retirement, or by January 21, 2021. If CatchMark fails to find such suitable replacement within that time period, the Preferred Investors in the Triple T Joint Venture have the right to terminate the asset management agreement.

For management of the Dawsonville Bluffs Joint Venture, CatchMark receives a percentage fee based on invested capital, as defined by the joint venture agreement. Additionally, CatchMark receives an incentive-based promote earned for exceeding investment hurdles.

During the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ CatchMark earned the following fees from these unconsolidated joint ventures:

Three Months Ended
September 30,

Nine Months Ended
September 30,
(in thousands) 2019 2018 2019 2018
Triple T Joint Venture ⁽¹⁾
$ 2,821
$ 2,675
$ 8,464
$ 2,675
Dawsonville Bluffs Joint Venture ⁽²⁾
615
23
655
84
$ 3,436
$ 2,698
$ 9,119
$ 2,759


	Three Months Ended March 31,
(in thousands)	2020		2019
Triple T Joint Venture ⁽¹⁾	$	2,828	$	2,821
Dawsonville Bluffs Joint Venture ⁽²⁾	147		21
	$	2,975	$	2,842

⁽¹⁾Includes $0.1 million reimbursements of compensation costs for the three months ended March 31, 2020 and 2019, respectively.

⁽²⁾Includes $0.1 million of incentive-based promote earned for exceeding investment hurdles in 2020.

5. Notes Payable and Lines of Credit

During the three months ended September 30, 2019, CatchMark paid down $20.1 million of its outstanding balance on the Multi-Draw Term Facility with proceeds from large dispositions. As of September 30, 2019 and December 31, 2018, CatchMark had the following debt balances outstanding:

(in thousands) Maturity Date
Current Interest Rate ⁽¹⁾
Outstanding Balance as of
Credit Facility Interest Rate September 30, 2019 December 31, 2018
Term Loan A-1 12/23/2024 LIBOR + 1.75% 3.80 % $ 100,000
$ 100,000
Term Loan A-2 12/1/2026 LIBOR + 1.90% 3.94 % 100,000
100,000
Term Loan A-3 12/1/2027 LIBOR + 2.00% 4.04 % 68,619
68,619
Term Loan A-4 8/22/2025 LIBOR + 1.70% 3.76 % 140,000
140,000
Multi-Draw Term Facility 12/1/2024 LIBOR + 2.20% 4.25 % 49,936
70,000
Total principal balance $ 458,555
$ 478,619
Less: net unamortized deferred financing costs (5,787 ) $ (6,379 )
Total $ 452,768
$ 472,240

For the Multi-Draw Term Facility, the interest rate represents weighted-average interest rate as of September 30, 2019. The weighted-average interest rate excludes the impact of the interest rate swaps (see ~~Note 6 — Interest Rate Swaps), amortization of deferred financing costs, unused commitment fees, and estimated patronage refunds.~~

Amended Credit Agreement

As of March 31, 2020, CatchMark iswas party to a credit agreementdated as of December 1, 2017, as amended on August 22, 2018, ~~and~~ June 28, 2019 and February 12, 2020 (the “Amended Credit Agreement”), with a syndicate of lenders, including CoBank. The Amended Credit Agreement provides for borrowing under credit facilities consisting of the following:

•a $35.0 million ~~five-year~~five-year revolving credit facility (the “Revolving Credit Facility”);

•a $200.0 million ~~seven-year~~seven-year multi-draw term credit facility (the “Multi-Draw Term Facility”);

•a $100.0 million ~~ten-year~~ten-year term loan (the “Term Loan A-1”);

•a $100.0 million ~~nine-year~~nine-year term loan (the “Term Loan A-2”);

•a $68.6 million ~~ten-year~~ten-year term loan (the “Term Loan A-3”); and

•a $140.0 million ~~seven-year~~seven-year term loan (the "Term Loan A-4").

During the three months ended March 31, 2020, CatchMark paid down $20.9 million of its outstanding balance on the Multi-Draw Term Facility with proceeds from large dispositions. As of ~~September 30,~~March 31, 2020 and December 31, 2019, ~~$185.1~~CatchMark had the following debt balances outstanding:


(dollar amounts in thousands)					Current Interest Rate ⁽¹⁾			Outstanding Balance as of
Credit Facility	Maturity Date	Interest Rate					March 31, 2020			December 31, 2019
Term Loan A-1	12/23/2024	LIBOR + 1.75%	2.74	%	$	100,000		$	100,000
Term Loan A-2	12/1/2026	LIBOR + 1.90%	2.89	%	100,000			100,000
Term Loan A-3	12/1/2027	LIBOR + 2.00%	2.99	%	68,619			68,619
Term Loan A-4	8/22/2025	LIBOR + 1.70%	2.69	%	140,000			140,000
Multi-Draw Term Facility	12/1/2024	LIBOR + 2.20%	3.22	%	29,086			49,936
Total principal balance					$	437,705		$	458,555
Less: net unamortized deferred financing costs											(5,379)	(5,568)
Total					$	432,326		$	452,987

⁽¹⁾For the Multi-Draw Term Facility, the interest rate represents weighted-average interest rate as of March 31, 2020. The weighted-average interest rate excludes the impact of the interest rate swaps (see Note 6 — Interest Rate Swaps), amortization of deferred financing costs, unused commitment fees, and estimated patronage dividends.

As of March 31, 2020, CatchMark had $205.9 million ~~remained available~~of borrowing capacity remaining under ~~CatchMark's~~its credit facilities, consisting of ~~$150.1~~$170.9 millionunder the Multi-Draw Term Facility and $35.0 million under the Revolving Credit Facility.

Borrowings under the Revolving Credit Facility may be used for general working capital, to support letters of credit, to fund cash earnest money deposits, to fund acquisitions in an amount not to exceed $5.0 million, and for other general corporate purposes. The Revolving Credit Facility bears interest at an adjustable rate equal to a base rate plus between 0.50% and 1.20% or a LIBOR rate plus between 1.50% and 2.20%, in each case depending on CatchMark's LTV Ratio, and will terminate and all amounts outstanding under the facility will be due and payable on December 1, 2022.

The Multi-Draw Term Facility may be used to finance timberland acquisitions and associated expenses, to fund investment in joint ventures, to fund the repurchase of CatchMark's common stock, and to reimburse payments of drafts under letters of credit. The Multi-Draw Term Facility, which is interest only until its maturity date, bears interest at an adjustable rate equal to a base rate plus between 0.50% and 1.20% or a LIBOR rate plus between 1.50% and 2.20%, in each case depending on CatchMark's LTV Ratio, and will terminate and all amounts outstanding under the facility will be due and payable on December 1, 2024.

CatchMark pays the lenders an unused commitment fee on the unused portions of the Revolving Credit Facility and the Multi-Draw Term Facility at an adjustable rate ranging from 0.15% to 0.35%, depending on the LTV Ratio.

CatchMark’s obligations under the credit agreement are collateralized by a first priority lien on the timberlands owned by CatchMark’s subsidiaries and substantially all of CatchMark’s subsidiaries’ other assets in which a security interest may lawfully be granted, including, without limitation, accounts, equipment, inventory, intellectual property, bank accounts and investment property. In addition, the obligations under the credit agreement are jointly and severally guaranteed by CatchMark and all of its subsidiaries pursuant to the terms of the credit agreement. CatchMark has also agreed to guarantee certain losses caused by certain willful acts of CatchMark or its subsidiaries.

Patronage ~~Refunds~~Dividends

CatchMark is eligible to receive annual patronage ~~refunds~~dividends from its lenders (the "Patronage Banks") under a profit-sharing program made available to borrowers of the Farm Credit System. CatchMark has received a patronage ~~refund~~dividend on its eligible patronage loans annually since 2015. The eligibility remains the same under the Amended Credit Agreement. Therefore, CatchMark accrues patronage ~~refunds~~dividends it expects to receive based on actual patronage ~~refunds~~dividends received as a percentage of its weighted-average eligible debt balance. For the three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ CatchMark accrued $0.9 million and$1.0 million, respectively, as patronage ~~refunds~~dividends receivable on its consolidated balance sheets and as an offset against interest expense on the consolidated statements of operations. For the nine months ended September 30, 2019 and 2018, CatchMark accrued $2.9 million and $2.2 million, respectively, as patronage refunds receivable on its consolidated balance sheets and as an offset against interest expense on the consolidated statements of operations.

In March ~~2019~~2020 and ~~2018,~~2019, CatchMark received patronage ~~refunds~~dividends of ~~$3.3~~$4.1 million and ~~$2.7~~$3.3 million, respectively, on its patronage eligible borrowings. Of the total patronage ~~refunds~~dividends received in ~~both years, 75%~~March 2020, $3.1 million was received in cash, including a $0.1 million special cash distribution for 2019, and ~~25%~~$1.0 million was received in equity of the Patronage Banks.

As of ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, the following balances related to the patronage ~~refunds~~dividend program were included on CatchMark's consolidated balance sheets:

Prepaid expenses and other assets ⁽¹⁾

⁽¹⁾Represents cumulative patronage dividends received as equity in the Patronage Banks.

The Amended Credit Agreement contains, among others, the following financial covenants which:

•limit the LTV ratio to (i) 50% at any time prior to December 31, 2021, and (ii) 45% at any time thereafter;

•require maintenance of a FCCR of not less than 1.05:1.00 at any time;

•require maintenance of a minimum liquidity balance of no less than $25.0 million at any time; and

•limit the aggregated capital expenditures to 1% of the value of the timberlands during any fiscal year.

The Amended Credit Agreement permits CatchMark to declare, set aside funds for, or pay dividends, distributions, or other payments to stockholders so long as it is not in default under the credit agreement and its minimum liquidity balance, after giving effect to the payment, is at least $25 million. However, if CatchMark has suffered a bankruptcy event or a change of control, the credit agreement prohibits CatchMark from declaring, setting aside, or paying any dividend, distribution, or other payment other than as required to maintain its REIT qualification. The Amended Credit Agreement also subjects CatchMark to mandatory prepayment from proceeds generated from dispositions of timberlands or lease terminations, which may have the effect of limiting its ability to make distributions to stockholders under certain circumstances.

CatchMark was in compliance with the financial covenants of its credit agreement as of ~~September 30, 2019.~~March 31, 2020. See Note 1— Organization for discussion of uncertainties and risks to CatchMark’s financial position, liquidity and results of operations, including impacts of the global COVID-19 pandemic.

Interest Paid and Fair Value of Outstanding Debt

During the three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ CatchMark made interest payments of ~~$5.0~~$4.1 million and ~~$4.4 million, respectively, on its borrowings. No unused commitment fee was paid during the three months ended September 30, 2019 and $0.1 million was paid during the same period in 2018.~~

~~During the nine months ended September 30, 2019 and 2018, CatchMark made interest payment of $15.6 million and $10.0~~$5.2 million, respectively, on its borrowings. Included in the interest payments for the ~~nine~~three months ended ~~September 30, 2019 and 2018~~March 31, 2020 were unused commitment fees of ~~$0.1 million and~~ $0.2 ~~million~~, ~~respectively.~~million. NaN unused commitment fee was paid during the three months ended March 31, 2019.

As of ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, the weighted-average interest rate on CatchMark's borrowings, after consideration of its interest rate swaps (see Note 6 — Interest Rate Swaps), was ~~4.21%~~3.57% and ~~4.31%~~3.87%, respectively. After further consideration of expected patronage ~~refunds,~~dividends, CatchMark's weighted-average interest rate as of ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018~~2019 was ~~3.41%~~2.77% and ~~3.51%~~3.07%, respectively.

6. Interest Rate Swaps

CatchMark uses interest rate swaps to mitigate its exposure to changing interest rates on its variable rate debt instruments. As of ~~September 30, 2019,~~March 31, 2020, CatchMark had ~~ten~~2 outstanding interest rate swaps with terms below:

(in thousands)
Interest Rate Swap Effective Date Maturity Date Pay Rate Receive Rate Notional Amount
2017 Swap - 3YR 3/28/2017 3/28/2020 1.800% one-month LIBOR $ 30,000
2018 Swap - 2YR 9/6/2018 9/6/2020 2.796% one-month LIBOR $ 50,000
2018 Swap - 3YR 9/6/2018 9/6/2021 2.869% one-month LIBOR $ 50,000
2017 Swap - 4YR 3/28/2017 11/28/2021 2.045% one-month LIBOR $ 20,000
2018 Swap - 4YR 2/28/2018 11/28/2022 2.703% one-month LIBOR $ 30,000
2017 Swap - 7YR 3/23/2017 3/23/2024 2.330% one-month LIBOR $ 20,000
2014 Swap - 10YR 12/23/2014 12/23/2024 2.395% one-month LIBOR $ 35,000
2016 Swap - 8YR 8/23/2016 12/23/2024 1.280% one-month LIBOR $ 45,000
2018 Swap - 8YR 2/28/2018 11/28/2026 2.884% one-month LIBOR $ 20,000
2018 Swap - 9YR 8/28/2018 8/28/2027 3.014% one-month LIBOR $ 50,000
$ 350,000

(dollar amounts in thousands)

Notional Amount

Interest Rate Swap

Effective Date

Maturity Date

Pay Rate

Receive Rate

2019 Swap - 10YR

11/29/2019

11/30/2029

2.2067%

one-month LIBOR

200,000

2019 Swap - 7YR

11/29/2019

11/30/2026

2.083%

one-month LIBOR

75,000

275,000

As of ~~September 30, 2019,~~March 31, 2020, CatchMark’s interest rate swaps effectively fixed the interest rate on ~~$350.0~~$275.0 million of its ~~$458.6~~$437.7 million variable-rate debt at ~~4.26%~~3.98%, inclusive of the applicable spread and before consideration of expected patronage ~~refunds. All ten~~dividends. The 2019 swaps contain an other-than-insignificant financing element and, accordingly, the associated cash flows are reported as financing activities in the accompanying consolidated statements of cash flows.

During the three months ended March 31, 2019, CatchMark had 10 interest rate swaps ~~qualify~~that effectively fixed the interest rates on $350.0 million of CatchMark's variable-rate debt at 4.26%, inclusive of the applicable spread but before considering patronage dividends.

All of CatchMark's outstanding interest rate swaps during the three months ended March 31, 2020 and 2019 qualified for hedge accounting treatment.

Fair Value and Cash Paid for Interest Under Interest Rate Swaps

The following table presents information about CatchMark's interest rate swaps measured at fair value as of ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018:~~2019:

(in thousands) Estimated Fair Value as of
Instrument Type Balance Sheet Classification September 30, 2019 December 31, 2018
Derivatives designated as hedging instruments:
Interest rate swaps Prepaid expenses and other assets $ 218
$ 3,643
Interest rate swaps Other liabilities $ (14,235 ) $ (3,635 )

As of ~~September 30, 2019,~~March 31, 2020, CatchMark estimated that approximately ~~$2.7~~$6.5 million will be reclassified from accumulated other comprehensive loss to interest expense over the next 12 months.

During the three months ended March 31, 2020 and 2019, CatchMark recognized a change in fair value of its interest rate swaps of $24.5 million and $3.9 million, respectively, as other comprehensive loss. Pursuant to the terms of its interest rate swaps, CatchMark paid ~~$0.1~~$0.3 million and ~~$0.1 million~~received $42,000 during the three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018, respectively. For the nine months ended September 30, 2019 and 2018, CatchMark paid $0.1 million and $0.3 million,~~ respectively. All amounts were included in interest expense in the consolidated statements of operations.

7. Commitments and Contingencies

Mahrt Timber Agreements

In connection with its acquisition of timberlands from WestRock, CatchMark entered into a master stumpage agreement and a fiber supply agreement (collectively, the “Mahrt Timber Agreements”) with a wholly-owned subsidiary of WestRock. The master stumpage agreement provides that CatchMark will sell specified amounts of timber and make available certain portions of our timberlands to CatchMark TRS for harvesting. The fiber supply agreement provides that WestRock will purchase a specified tonnage of timber from CatchMark TRS at specified prices per ton, depending upon the type of timber product. The prices for the timber purchased pursuant to the fiber supply agreement are negotiated every two years but are subject to quarterly market pricing adjustments based on an index published by TimberMart-South, a quarterly trade publication that reports raw forest product prices in 11 southern states. The initial term of the Mahrt Timber Agreements is October 9, 2007 through December 31, 2032, subject to extension and early termination provisions. The Mahrt Timber Agreements ensure a long-term source of supply of wood fiber products for WestRock in order to meet its paperboard and lumber production requirements at specified mills and provide CatchMark with a reliable customer for the wood products from its timberlands.

WestRock can terminate the Mahrt Timber Agreements prior to the expiration of the initial term if CatchMark replaces FRC as the forest manager without the prior written consent of WestRock, except pursuant to an internalization of the company's forestry management functions. CatchMark can terminate the Mahrt Timber Agreements if WestRock (i) ceases to operate the Mahrt mill for a period that exceeds 12 consecutive months, (ii) fails to purchase a specified tonnage of timber for two consecutive years, subject to certain limited exceptions or (iii) fails to make payments when due (and fails to cure within 30 days).

In addition, either party can terminate the Mahrt Timber Agreements if the other party commits a material breach (and fails to cure within 60 days) or becomes insolvent. ~~Further,~~In addition, the Mahrt Timber Agreements provide for adjustments to both parties' obligations in the event of a force majeure, which is defined to include, among other things, lightning, fires, storms, floods, infestation and other acts of God or nature.

Timberland Operating Agreements

Pursuant to the terms of the timberland operating agreement between CatchMark and FRC (the "FRC Timberland Operating Agreement"), FRC manages and operates certain of CatchMark's timberlands and related timber operations, including ensuring delivery of timber to WestRock in compliance with the Mahrt Timber Agreements. In consideration for rendering the services described in the timberland operating agreement, CatchMark pays FRC (i) a management fee based on the actual acreage that FRC manages, which is payable monthly in advance, and (ii) an incentive fee based on timber harvest revenues generated by the timberlands, which is payable quarterly in arrears. The FRC Timberland Operating Agreement, as amended, is effective through March 31, ~~2020,~~2021, and is automatically extended for ~~one-year~~one-year periods unless written notice is provided by CatchMark or FRC to the other party at least 120 days prior to the current expiration. The FRC Timberland Operating Agreement may be terminated by either party with mutual consent or by CatchMark with or without cause upon providing 120 days’ prior written notice.

Pursuant to the terms of the timberland operating agreement between CatchMark and AFM (the "AFM Timberland Operating Agreement"), AFM manages and operates certain of CatchMark's timberlands and related timber operations, including ensuring delivery of timber to customers. In consideration for rendering the services described in the AFM Timberland Operating Agreement, CatchMark pays AFM (i) a management fee based on the actual acreage AFM manages, which is payable monthly in advance, and (ii) an incentive fee based on revenues generated by the timber operations, which is payable quarterly in arrears. The AFM Timberland Operating Agreement is effective through November 30, 2020 for the U.S. South region and December 31, 2020 for the Pacific Northwest region, and is automatically extended for ~~one-year~~one-year periods unless written notice is provided by CatchMark or AFM to the other party at least 120 days prior to the current expiration. The AFM Timberland Operating Agreement may be terminated by either party with mutual consent or by CatchMark with or without cause upon providing 120 days’ prior written notice.

Obligations under Operating Leases

CatchMark's office lease commenced in January 2019 and expires in November 2028 and qualifies as an operating lease under ASC 842. As of January 1, 2019, CatchMark recorded an operating lease ROU asset and an operating lease liability of $3.4 million on its balance sheet, which represents the net present value of lease payments over the lease term discounted using CatchMark's incremental borrowing rate at commencement date. CatchMark’s office lease contains renewal options; however, the options were not included in the calculation of the operating lease ROU asset and operating lease liability as it is not reasonably certain that CatchMark will exercise the renewal options. For the three months ended March 31, 2020 and 2019, CatchMark recorded $108,400 and $39,400 of operating lease expense, respectively, which was included in general and administrative expenses on its consolidated statements of operations. For the three months ended March 31, 2020 and 2019, CatchMark paid $98,000 and $21,000, respectively, in cash for its office lease, which was included in operating cash flows on its consolidated statements of cash flows. The adoption of ASC 842 did not result in a cumulative-effect adjustment to CatchMark's retained earnings, as its office lease commenced in January 2019.

CatchMark had the following future annual payments for its operating lease as of March 31, 2020 and December 31, 2019:


	As of
(in thousands)	March 31, 2020			December 31, 2019
Required payments
2020	$	299		397
2021	412			412
2022	424			424
2023	435			435
2024	447			447
Thereafter	1,873			1,873
	$	3,890		$	3,988
Less: imputed interest	(709)
Operating lease liability	$	3,181

Remaining lease term (years)	8.7
Discount rate	4.58		%

CatchMark holds leasehold interests in ~~26,300~~22,600 acres of timberlands under a long-term lease that expires in May 2022 (the “LTC Lease”). The LTC Lease provides CatchMark access rights to harvest timber as specified in the LTC Lease, which is, therefore, a lease of biological assets, and is excluded from the scope of ASC 842.

As of ~~September 30, 2019,~~March 31, 2020, CatchMark had the following future lease payments under ~~its~~the LTC Lease:

~~See~~ ~~Note 2 — Summary of Significant Accounting Policies~~ ~~for information on CatchMark's office lease, which is within the scope of ASC 842.~~

From time to time, CatchMark may be a party to legal proceedings, claims, and administrative proceedings that arise in the ordinary course of its business. Management makes assumptions and estimates concerning the likelihood and amount of any reasonably possible loss relating to these matters using the latest information available. CatchMark records a liability for litigation if an unfavorable outcome is probable and the amount of loss or range of loss can be reasonably estimated. If an unfavorable outcome is probable and a reasonable estimate of the loss is a range, CatchMark accrues the best estimate within the range. If no amount within the range is a better estimate than any other amount, CatchMark accrues the minimum amount within the range. If an unfavorable outcome is probable but the amount of the loss cannot be reasonably estimated, CatchMark discloses the nature of the litigation and indicates that an estimate of the loss or range of loss cannot be made. If an unfavorable outcome is reasonably possible and the estimated loss

is material, CatchMark discloses the nature and estimate of the possible loss of the litigation. CatchMark does not disclose information with respect to litigation where an unfavorable outcome is considered to be remote.

CatchMark is ~~not~~0t currently involved in any legal proceedings of which the outcome is reasonably likely to have a material adverse effect on the results of operations or financial condition of CatchMark. CatchMark is not aware of any legal proceedings contemplated by governmental authorities.

Stock-based Compensation - Employees

On ~~July 12, 2019,~~February 18, 2020, CatchMark issued 99,385 shares of service-based restricted stock to its executive officers. Along with the 131,500 shares of service-based restricted stock granted to its non-executive employees in the first quarter of 2019, CatchMark has issued 230,885153,842 shares of service-based restricted stock to its employees ~~in 2019, all~~including its executive officers, vesting over a ~~four-year~~four-year period. The fair value of ~~serviced-based restricted stock grants~~$1.7 million was determined bybased on the closing price of CatchMark's common stock on the grant ~~date.~~date and is amortized evenly over the vesting period.

A rollforward of CatchMark's unvested, service-based restricted stock awards to employees for the ~~nine~~three months ended ~~September 30, 2019~~March 31, 2020 is as follows:


	Number of Underlying Shares	Weighted-Average Grant Date Fair Value
Unvested at December 31, 2019	442,401	$	9.96
Granted	153,842	$	10.99
Vested	(206,698)	$	10.75
Forfeited	—	$	—
Unvested at March 31, 2020	389,545	$	9.95

Number of
Underlying Shares

Weighted-Average
Grant Date
Fair Value
Unvested at December 31, 2018 300,395
$ 10.60
Granted 230,885
$ 9.66
Vested (83,817 ) $ 11.37
Forfeited (5,062 ) $ 10.85
Unvested at September 30, 2019 442,401
$ 9.96

Performance-based Restricted Stock Grants

On February 18, 2020, CatchMark granted 23,589 shares of performance-based restricted stock to its eligible officers, which represents the maximum number of shares that could be earned based on the relative performance of CatchMark's TSR as compared to a pre-established peer group's TSR and to the Russell Microcap Index over a three-year performance period from January 1, 2020 to December 31, 2022. The compensation committee of the board of directors (the "Compensation Committee") will determine the earned awards after the end of the performance period, and the earned awards will vest in two equal installments in the first quarter of 2023 and 2024. The fair value of $0.1 million of the performance-based restricted stock awards is amortized over the vesting period and was calculated using Monte-Carlo simulation with the following assumptions:


Grant date market price (February 18, 2020)	$	10.99
Weighted-average fair value per granted share	$	5.93
Assumptions:
Volatility	23.22		%
Expected term (years)	3.0
Risk-free interest rate	1.41		%

Performance-based LTIP Units Grants

On ~~July 12, 2019,~~February 18, 2020, CatchMark granted ~~184,944~~197,115 units of a class of limited partnership interests (the "LTIP Units") in CatchMark Timber OP to its executive officers, which represents the maximum number of LTIP Units that could be earned based on the relative performance of CatchMark's TSR as compared to a pre-established peer ~~groups’ TSRs~~group's TSR and to the Russell ~~3000 Index.~~Microcap Index over a three-year performance period from January 1, 2020 to December 31, 2022. The LTIP Units are structured to qualify as "profits interests" for federal income tax purposes that, subject to certain conditions, including vesting, are convertible by the holder into CatchMark Timber OP's common units. See Note 8 - — Noncontrolling Interest in our Annual Report on Form 10-K for the year ended December 31, ~~2018~~2019 for further information on LTIP Units. ~~The performance measurement period is a three-year period from January 1, 2019 to December 31, 2021.~~ The Compensation Committee will determine the earned awards after the end of the performance period, and the earned awards will vest in two equal installments in the first quarter of ~~2022~~2023 and ~~2023.~~2024. The fair value of the ~~2019 Performance~~$1.2 million of the performance-based LTIP Units ~~awards~~ was calculated using a Monte-Carlo simulation with the ~~following:~~following assumptions:

Grant date market price (July 12, 2019) $ 10.08
Weighted-average fair value per granted share $ 8.13
Assumptions:
Volatility 22.88 %
Expected term (years) 3.0
Risk-free interest rate 1.85 %


Grant date market price (February 18, 2020)	$	10.99
Weighted-average fair value per granted share	$	5.93
Assumptions:
Volatility	23.22		%
Expected term (years)	3.0
Risk-free interest rate	1.41		%

Accelerated Vesting of Former CEO's Outstanding Equity Awards

On January 21, 2020, Jerrold Barag retired as the Chief Executive Officer of CatchMark and as a member of CatchMark's board of directors. In connection with Mr. Barag's retirement, he entered into a separation agreement (the "Separation Agreement") with CatchMark. As part of the Separation Agreement, 103,135 shares of his time-based restricted stock awards vested immediately, 46,912 shares of which were withheld to cover required tax withholding. CatchMark repurchased the remaining 56,223 fully vested shares at a per-share price of $11.05, which was the average closing price of the common stock for the five-day trading period ended prior to January 21, 2020, payable to Mr. Barag in 24 equal installments through January 2022. Mr. Barag’s 72,272 performance-based LTIP Units issued under the executive officer’s 2017 compensation program had a performance period from January 1, 2017 to December 31, 2019. 25,218 of these 72,272 LTIP Units were earned and vested on January 29, 2020. Mr. Barag’s remaining 142,909 performance-based LTIP units issued under the executive officers' 2018 and 2019 compensation programs were treated as if the performance period for such awards ended on January 21, 2020, with the portion of such awards that was earned determined based on actual achievement of the applicable performance metrics through such date. Mr. Barag was entitled to receive a pro rata portion of such earned awards, based on the number of full months served during the performance period divided by 36. The Compensation Committee determined that Mr. Barag earned a total of 32,780 LTIP Units, which were vested on January 29, 2020. In accordance with ASC 718: Compensation - Stock Compensation, CatchMark applied modification accounting and recognized the incremental fair value of these awards in the amount of $1.2 million as stock-based compensation expense in the first quarter of 2020. For complete terms and conditions of the Separation Agreement, see Form 8-K filed with the SEC on January 21, 2020.

Stock-based Compensation Expense

A summary of CatchMark's stock-based compensation expense for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 2019 ~~and 2018~~ is presented below:


	Three Months Ended March 31,
(in thousands)	2020		2019
General and administrative expenses ⁽¹⁾	$	1,757	$	571
Forestry management expenses	115		88
Total ⁽²⁾	$	1,872	$	659

(in thousands) Three Months Ended September 30, Nine Months Ended September 30,
Stock-based Compensation Expense classified as: 2019 2018 2019 2018
General and administrative expenses $ 729
$ 587
$ 1,763
$ 1,861
Forestry management expenses 74
23
189
310
Total $ 803
$ 610
$ 1,952
$ 2,171
⁽¹⁾Includes $1.2 million accelerated stock-based compensation expense related to the retirement of CatchMark's former CEO during the three months ended March 31, 2020.

⁽²⁾$0.7 million of the $1.9 million stock-based compensation for the three months ended March 31, 2020 was recognized as noncontrolling interest.

As of ~~September 30, 2019,~~March 31, 2020, approximately ~~$5.5~~$6.7 million of unrecognized compensation expense related to unvested restricted stock and LTIP Units remained and will be recognized over a weighted-average period of ~~2.6~~2.9 years.

As of ~~September 30, 2019,~~March 31, 2020, CatchMark had the following reportable segments: Harvest, Real Estate and Investment Management. Harvest includes wholly-owned timber assets and associated timber sales, other revenues and related expenses. Real Estate includes timberland sales, cost of timberland sales and large dispositions. Investment Management includes investment in and income (loss) from unconsolidated joint ventures and asset management fee revenues earned for the management of these joint ventures. General and administrative expenses, along with other expense and income items, are not allocated among segments. Asset information and capital expenditures by segment are not reported because CatchMark does not use these measures to assess performance. CatchMark’s investments in unconsolidated joint ventures isare reported separately on the accompanying consolidated balance sheets. During the periods presented, there have been no material intersegment transactions.

The following table presents revenues by reportable segment:


	Three Months Ended March 31,
(in thousands)	2020		2019
Harvest	$	19,218	$	17,641
Real Estate	4,779		2,090
Investment Management	2,975		2,842
Total	$	26,972	$	22,573

Adjusted EBITDA is the primary performance measure reviewed by management to assess operating performance. EBITDA is a non-GAAP financial measure of operating performance. EBITDA is defined by the SEC as earnings before interest, taxes, depreciation and amortization; however, CatchMark has excluded certain other expenses that CatchMark believes are not indicative of the ongoing operating results of its timberland portfolio and investment management business, and CatchMark refers to this measure as Adjusted EBITDA. As such, CatchMark's Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies.

~~The following table presents revenues by reportable segment:~~

Three Months Ended September 30, Nine Months Ended September 30,
(in thousands) 2019 2018 2019 2018
Harvest $ 20,680
$ 18,061
$ 55,916
$ 57,267
Real Estate 2,264
3,818
12,578
14,904
Investment Management 3,436
2,698
9,119
2,759
Total $ 26,380
$ 24,577
$ 77,613
$ 74,930

The following table presents Adjusted EBITDA by reportable segment:


	Three Months Ended March 31,
(in thousands)	2020		2019
Harvest	$	8,607	$	7,260
Real Estate	4,518		1,957
Investment Management	2,887		3,415
Corporate	(3,123)		(2,470)
Total	$	12,889	$	10,162

Three Months Ended September 30, Nine Months Ended September 30,
(in thousands) 2019 2018 2019 2018
Harvest $ 9,390
$ 7,635
$ 23,935
$ 24,339
Real Estate 2,036
3,592
11,821
13,988
Investment Management 7,250
2,727
13,455
9,164
Corporate (2,154 ) (2,498 ) $ (7,440 ) $ (7,125 )
Total $ 16,522
$ 11,456
$ 41,771
$ 40,366

A reconciliation of Adjusted EBITDA to GAAP net loss is presented below:


	Three Months Ended March 31,
(in thousands)	2020		2019
Adjusted EBITDA	$	12,889	$	10,162
Subtract:
Depletion	6,941		5,268
Interest expense ⁽¹⁾	3,250		4,372
Amortization ⁽¹⁾	758		458
Depletion, amortization, and basis of timberland and mitigation credits sold included in loss from unconsolidated joint venture ⁽²⁾	—		395
Basis of timberland sold, lease terminations and other ⁽³⁾	3,276		1,807
Stock-based compensation expense	1,872		659
Gain on large dispositions ⁽⁴⁾	(1,279)		—
HLBV loss from unconsolidated joint venture ⁽⁵⁾	—		27,488
Post-employment benefits ⁽⁶⁾	2,286		—
Other ⁽⁷⁾	34		110
Net loss	$	(4,249)	$	(30,395)

Three Months Ended September 30, Nine Months Ended September 30,
(in thousands) 2019 2018 2019 2018
Adjusted EBITDA $ 16,522
$ 11,456
$ 41,771
$ 40,366
Subtract:
Depletion 8,235
6,224
19,533
19,884
Basis of timberland sold, lease terminations and other ⁽¹⁾
1,854
2,983
10,329
10,771
Amortization ⁽²⁾
299
493
986
2,532
Depletion, amortization, and basis of timberland and mitigation credits sold included in loss from unconsolidated joint venture ⁽³⁾
3,152
39
3,547
3,885
HLBV loss from unconsolidated joint venture ⁽⁴⁾
25,712
76,755
81,800
76,755
Stock-based compensation expense 803
610
1,952
2,171
Interest expense⁽²⁾
4,220
3,883
12,987
8,754
Gain on large dispositions ⁽⁵⁾
(7,197 ) —
(7,961 ) —
Other ⁽⁶⁾
1
(632 ) 115
(597 )
Net loss $ (20,557 ) $ (78,899 ) $ (81,517 ) $ (83,789 )

⁽²⁾Reflects our share of depletion, amortization, and basis of timberland and mitigation credits sold of the unconsolidated Dawsonville Bluffs Joint Venture.

⁽³⁾Includes non-cash basis of timber and timberland assets written-off related to timberland sold, terminations of timberland leases and casualty losses.

⁽⁴⁾Large dispositions are sales of blocks of timberland properties in one or several transactions with the objective to generate proceeds to fund capital allocation priorities. Large dispositions may or may not have a higher or better use than timber production or result in a price premium above the land’s timber production value. Such dispositions are infrequent in nature, are not part of core operations, and would cause material variances in comparative results if not reported separately.

⁽⁵⁾Reflects HLBV (income) losses from the Triple T Joint Venture, which is determined based on a hypothetical liquidation of the underlying joint venture at book value as of the reporting date.

⁽⁶⁾Reflects one-time, non-recurring post-employment benefits associated with the retirement of our former CEO, including severance pay, payroll taxes, professional fees, and accrued dividend equivalents.

⁽⁷⁾Includes certain cash expenses paid, or reimbursement received, that management believes do not directly reflect the core business operations of our timberland portfolio on an on-going basis, including costs required to be expensed by GAAP related to acquisitions, transactions, joint ventures or new business initiatives.

10. Subsequent Events

Amendment to Amended Credit Agreement

On May 1, 2020, CatchMark entered into an amendment to its Amended Credit Agreement with CoBank, which provided for, among other things: (1) the removal of the LTV ratio covenant reduction, from 50% to 45%, which would have otherwise been effective on December 31, 2021; (2) the removal of the minimum liquidity balance of $25.0 million, which enables CatchMark to draw down more proceeds for working capital or other purposes if needed under its Revolving Credit Facility; (3) a reduction in the Multi-Draw Term Facility commitment from $200 million to $150 million, which still provides CatchMark with ample capacity for future acquisitions while lowering its unused commitment fees; and (4) the ability to make additional investments in joint ventures during 2020 if CatchMark meets certain LTV ratio requirements.

Dividend Declaration

~~Interest Rate Swaps~~

~~On October 21, 2019, CatchMark, through CatchMark Timber OP, terminated its ten outstanding interest rate swaps with Rabobank (see~~ ~~Note 6 — Interest Rate Swaps) and entered into two new interest rate swaps with Rabobank, one with a notional amount~~

Table of $200 million and the other with a notional amount of $75 million, with a total fair value at inception equal to the net fair value of the terminated interest rate swaps on the date of their termination. Both of the new interest rate swaps have an effective date of November 29, 2019. The $200 million swap has a term of ten years and will bear interest at a fixed rate of 2.2067% per annum, and the $75 million swap has a term of seven years and will bear interest at a fixed rate of 2.083% per annum. As a result of these transactions, CatchMark extended theContents

~~weighted-average term of its effectively-fixed rate debt from four years to nine years and effectively reduced the amount of its fixed rate debt from 76% to 60%.~~


~~ITEM 2.~~	~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with our accompanying consolidated financial statements and notes thereto. See also “Cautionary Note Regarding Forward-Looking Statements” preceding Part I of this report, as well as our consolidated financial statements and the notes thereto and Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, ~~2018.~~2019.

Overview

We ~~primarily engage in the acquisition, ownership, management,~~acquire and ~~disposition of timberland properties~~own prime timberlands located in ~~the United States.~~high-demand U.S. mill markets. We ~~seek~~manage our operations to generate ~~recurring income~~highly-predictable and stable cash flow from the harvest and sale of timber, as well as from non-harvest related revenue sources, such as asset management fees and rent from hunting and recreational leases. When and where we believe appropriate, we also seek to generate income and cash flow from timberland sales. In addition to current income, we expect to realize long-term returns from the biological growth of our standing timber inventory.

~~We strive to deliver superior, consistent, predictable per-share cash flow growth from disciplined acquisitions, active management,~~ sustainable harvests, and well-timed real estate sales. We intend to grow over time through selective acquisitions and investments in high-demand fiber markets and to efficiently integrate new acquisitions and investments into our operations. Operationally, we focus on generating cash flows from sustainable harvests and improved harvest mix on high-quality timberlands, as well as opportunistic land sales and asset management fees that comfortably covers our dividend throughout the business cycle.

During the first quarter of 2020, we continued to ~~provide recurring dividends~~seek to actively manage our ~~stockholders.~~timberlands to achieve an optimum balance among biological timber growth, current harvest cash flow, and responsible environmental stewardship. We ~~continue~~actively managed our log merchandising efforts together with delivered and stumpage sales with a goal to ~~practice intensive forest management and silvicultural techniques that improve~~achieve the ~~biological growth~~highest available price for our timber products. During the three months ended March 31, 2020, we realized significant increases in timber sale revenues as compared to the same period last year primarily as a result of higher harvest volumes.

We continuously assess potential alternative uses of our ~~forests.~~timberlands, as some of our properties may be more valuable for development, conservation, recreational or other rural purposes than for growing timber. In the first quarter of 2020, we capitalized on the value of our timberland portfolio by opportunistically monetizing timberland properties, including selling 3,000 acres of timberland for $4.8 million. In addition, we completed a large disposition of 14,400 acres of timberland located in Georgia for $21.3 million under our capital recycling program, using the net proceeds to pay down debt. When evaluating our land sale opportunities, we assess a full range of matters relating to the timberland property or properties, including, but not limited to inventory stocking below portfolio average, higher mix of hardwood inventory, poor productivity characteristics, geographical procurement and operating areas, and/or timber reservation opportunities.

We ~~also seek~~are continuing to ~~create~~actively pursue additional ~~value by entering into joint ventures with long-term, institutional equity partners to opportunistically acquire, own, and manage~~strategic investment opportunities in our target markets, including direct acquisition of high-quality industrial timberland properties, ~~that fit~~with our ~~core investment strategy. In April 2017, we entered into our first joint venture,~~average transaction size ranging from 2,500 to 25,000 acres.

Asset management fee revenue increased as a result of earning incentive-based promotes from the Dawsonville Bluffs Joint Venture for exceeding investment hurdles. From time to time when we believe our stock is undervalued, we may take advantage of market opportunities by using our share repurchase program, or SRP, to buy shares and return capital to our stockholders. In the first quarter, we repurchased $1.9 million in shares under our SRP and, as of March 31, 2020, $13.8 million remains available under our current repurchase program.

Impact of COVID-19 On Our Business

In March 2020, the World Health Organization declared the coronavirus (COVID-19) outbreak a pandemic, and the President of the United States declared the COVID-19 outbreak a national emergency. The coronavirus has spread throughout the United States, including in the U.S. South and Pacific Northwest regions in which we operate. The rapid spread of the pandemic and the continuously evolving responses to combat it have had an increasingly negative impact on the global economy. The outbreak has resulted in authorities implementing numerous measures to try to contain the virus, such as quarantines and shelter in place orders. These measures may remain in place for a significant period and adversely affect our business, results of operations and financial condition as well as the business, operations and financial conditions of our customers and contractors. Certain states have issued executive orders requiring workers to remain at home, unless their work is critical, essential, or life-sustaining. We believe that, based on the various standards published to date, our business, particularly with ~~MPERS.~~ respect to supplying raw materials to the forest products, paper and packaging industry, and the businesses of our customers is critical,

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essential, and life-sustaining. As of the date of this filing, our business, including harvest, real estate and investment management activities, continue to operate. We did restrict access to our corporate headquarters based on local and state executive orders; however, our corporate headquarter employees continued to operate remotely.

The response to the COVID-19 pandemic began to impact our business toward the end of the quarter ended March 31, 2020 and we expect this trend to continue. Projections under these circumstances are necessarily guarded and subject to change, but the COVID-19 pandemic is shifting demand patterns to favor pulp-related products. As such, we expect demand for pulp-related products, necessary for paper and packaging, to remain stable, and lumber demand related to the housing market to suffer at least in the short term. However, given the ongoing and dynamic nature of the circumstances, it is not possible to predict how long the impact of the coronavirus outbreak on our business will last or how significant it will ultimately be. A sustained decline in the economy as a result of the COVID-19 pandemic and the demand for timber could materially and adversely impact our business, results of operations and financial condition and our ability to make distributions to our stockholders.

The ultimate risk posed by COVID-19 remains highly uncertain; however, reports as of the date hereof suggest that it poses a material risk to our business, results of operations and financial condition, including as a result of (1) declines in our harvest volumes due to (i) a deterioration in the housing market and a resulting decrease in demand for our sawtimber, (ii) a decline in production level at our customers' mills due to instances of COVID-19 among their employees or decreased demand for their products and (iii) the effects of COVID-19 on contract logging operations, transportation and other critical third-party providers; (2) the inability to complete timberland sales due to state and local government office closures limiting the ability of potential buyers to complete title searches and other customary due diligence; (3) effects on key employees, including operational management personnel and those charged with preparing, monitoring and evaluating the company’s financial reporting and internal controls; and (4) market volatility and market downturns negatively impacting the trading of our common stock.

In ~~July 2018,~~view of the rapidly changing business environment, unprecedented market volatility and heightened degree of uncertainty resulting from COVID-19, we ~~entered into~~are currently unable to fully determine its future impact on our business. However, we are monitoring the ~~Triple T Joint Venture with~~progression of the pandemic and its potential effect on our financial position, results of operations, and cash flows. We will continue to actively monitor the situation and may take further actions that alter our business operations as may be required by federal, state or local authorities or that we determine are in the best interests of our employees, customers, suppliers and shareholders. We are bolstered by our delivered wood model and fiber supply agreements, which provide a ~~consortium~~steady source of ~~institutional investors. Our joint venture platform drives growth through a fee-based management business~~demand from reliable counterparties. With respect to liquidity, we believe we have access to adequate liquidity and capital resources, including cash flow generated from operations, cash on-hand and borrowing capacity, necessary to meet our current and future obligations that ~~leverages~~become due over the next 12 months. We currently have no plans to reduce anticipated spending on capital investment projects. After our ~~scale~~deleveraging initiatives and ~~timberland management efficiencies.~~other balance sheet strengthening in 2019 and the first quarter of 2020, we believe we are well positioned to weather the economic turmoil.

Large Dispositions

Over the last ~~year,~~three years, we have undertaken a capital recycling program whereby we sell ~~large~~ blocks of timberland properties to generate proceeds to fund capital allocation priorities, including, but not limited to redeployment into more desirabletimberland investments, paying down outstanding debt, or repurchasing shares of our common stock. Such large dispositions are not part of core operations, are infrequent in nature and may or may not have a higher or better use than timber production or result in a price premium above the land’s timber production value.

We continued to execute ~~the~~our capital recycling program in the ~~third~~first quarter of ~~2019. On July 26, 2019,~~2020. During the first quarter of 2020, we completed the disposition of ~~10,800~~14,400 acres of our wholly-owned timberlands located in Georgia ~~and Alabama~~ for ~~$19.9~~$21.3 million, recognizing a gain of $1.3 million. We used ~~$14.8~~$20.9 million of the net proceeds from this large disposition to pay down our outstanding debt.

Capital Activities

During ~~2019,~~the three months ended March 31, 2020, we ~~have completed large dispositions totaling 14,400 acres for $25.4~~paid down $20.9 million ~~recognized a gain~~ of ~~$8.0 million and used a portion of the net proceeds to pay down~~ our outstanding debt ~~by $20.1 million.~~

~~Dawsonville Bluffs Joint Venture~~

On July 15, 2019, the Dawsonville Bluffs Joint Venture completed the disposition of substantially all of its remaining 4,400 acres of timberlands for approximately $8.7 million. As of September 30, 2019, the Dawsonville Bluffs Joint Venture had mitigation bank creditsbalance with ~~a book basis of $2.9 million in addition to 65 acres of timberland remaining in its portfolio. During the third quarter of 2019, we~~proceeds received ~~a $3.8 million cash distribution~~ from ~~the Dawsonville Bluffs Joint Venture. Life-to-date through September 30, 2019, we have received cash distributions from the~~

Dawsonville Bluffs Joint Venture of $13.3 million, representing a return of our $10.5 million investment and cumulative preferred return of $2.8 million. In addition, we have earned $0.9 million in asset management fees from the Dawsonville Bluffs Joint Venture, including a $0.6 million incentive-based promote for exceeding investment hurdles, and have recognized $4.6large dispositions. We paid $6.6 million of ~~income from the Dawsonville Bluffs Joint Venture. As~~dividends to our stockholders and repurchased $1.9 million of ~~September 30, 2019, we have remaining equity~~shares of ~~$1.8 million in the Dawsonville Bluffs Joint Venture.~~common stock under our SRP at an average price of $6.50 per share.

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Timberland Portfolio

As of ~~September 30, 2019,~~March 31, 2020, we wholly owned interests in ~~438,800~~415,400 acres of high-quality industrial timberland in the U.S. South and Pacific Northwest, consisting of ~~412,500~~392,800 acres of fee timberlands and ~~26,300~~22,600 acres of leased timberlands. Our wholly-owned timberlands are located within attractive fiber baskets encompassing a diverse group of pulp, paper and wood products manufacturing facilities. Our Southern timberlands consisted of 72% pine plantations by acreage and ~~50%~~ 52% sawtimber by volume. Our Pacific Northwest timberlands consisted of 90% ~~productive~~productive acres and 82% sawtimber by volume. Our leased timberlands include ~~26,300~~22,600 acres under one long-term lease expiring in 2022, which we refer to as the LTC Lease. Wholly-owned timberland acreage by state is listed below:


Acres by state as of March 31, 2020 ⁽¹⁾	Fee	Lease	Total
South
Alabama	68,400	1,800	70,200
Florida	2,000	—	2,000
Georgia	232,400	20,800	253,200
North Carolina	100	—	100
South Carolina	71,600	—	71,600
Tennessee	200	—	200
	374,700	22,600	397,300
Pacific Northwest
Oregon	18,100	—	18,100
Total	392,800	22,600	415,400


⁽¹⁾	~~Represents wholly-owned acreage only; excludes ownership interest in acreage acquired by joint ventures~~.

⁽¹⁾Represents wholly-owned acreage only; excludes ownership interest in acreage acquired by joint ventures.

As of ~~September 30, 2019,~~March 31, 2020, our wholly-owned timber inventory consisted of an estimated ~~17.4~~17.1 million tons of merchantable inventory with the following components:

(in millions) Tons
Merchantable timber inventory: ⁽¹⁾
Fee Lease Total
Pulpwood 7.9 0.5 8.4
Sawtimber ⁽²⁾
8.6 0.4 9.0
Total 16.5 0.9 17.4


⁽¹⁾	~~Merchantable timber inventory does not include current year growth. Pacific Northwest merchantable timber inventory is converted from MBF to tons using a factor of eight.~~


⁽²⁾	~~Includes chip-n-saw and sawtimber.~~


(in millions)	Tons
Merchantable timber inventory: ⁽¹⁾	Fee	Lease	Total
Pulpwood	7.6	0.4	8.0
Sawtimber ⁽²⁾	8.8	0.3	9.1
Total	16.4	0.7	17.1

⁽¹⁾Merchantable timber inventory does not include current year growth. Pacific Northwest merchantable timber inventory is converted from MBF to tons using a factor of eight.

⁽²⁾Includes chip-n-saw and sawtimber.

This compared to an estimated 18.2 million tons of merchantable inventory at January 1, 2020, with the decrease of 1.1 million due to 0.6 million tons harvested in the first quarter 2020 and 0.5 million tons disposed of as part of our timberland sales and large disposition completed during the first quarter 2020. Our estimated merchantable inventory of 18.2 million tons at January 1, 2020 was updated from an initial estimate of 18.6 million tons, as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2019, based on updated cruise data.

In addition to our wholly-owned timberlands, we had the following investments in joint ventures as of ~~September 30, 2019~~March 31, 2020 (see Note 4 — Unconsolidated Joint Ventures)to our accompanying consolidated financial statements for further details):

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As of September 30, 2019
Dawsonville Bluffs Joint Venture Triple T Joint Venture
Ownership percentage 50.0%
21.6% ⁽¹⁾
Acreage owned by the joint venture 65 1,094,000
Merchantable timber inventory (tons) 2,500
40.3 million ⁽²⁾
Location Georgia Texas


⁽¹⁾			~~Represents our share~~As of ~~total partner capital contributions.~~March 31, 2020


	Dawsonville Bluffs Joint Venture	Triple T Joint Venture
Ownership percentage	50.0%	21.6% ^{(2) (1)}
Acreage owned by the joint venture	—	1,092,000
Merchantable timber inventory ~~does not include current year growth.~~(tons)	—	43.2 million ⁽²⁾
Location	Georgia	Texas

⁽¹⁾Represents our share of total partner capital contributions.

⁽²⁾Triple T considers inventory to be merchantable at age 12. Merchantable timber inventory does not include current year growth.

We have three reportable segments: Harvest, Real Estate and Investment Management. Our Harvest segment includes wholly-owned timber assets and associated timber sales, other revenues and related expenses. Our Real Estate segment includes timberland sales, cost of timberland sales and large dispositions. Our Investment Management segment includes investments in and income (loss) from unconsolidated joint ventures and asset management fee revenues earned for the management of these joint ventures. General and administrative expenses, along with other expense and income items, are not allocated among segments. For additional information, see Note 9 — Segment Information to our accompanying consolidated financial statements.

A significant portion of our timber sales is derived from the Mahrt Timber Agreements under which we sell specified amounts of timber to WestRock subject to market pricing adjustments. For full year ~~2019,~~2020, WestRock is required to purchase a minimum of ~~374,800~~409,000 tons of timber under the Mahrt Timber Agreements. For the ~~nine~~three months ended ~~September 30, 2019,~~March 31, 2020, WestRock purchased ~~315,700~~ 84,500 tons under the Mahrt Timber Agreements, which ~~contributed 13%~~ represented 10% of our net timber sales revenue. WestRock has historically purchased tonnage that exceeded the minimum requirement under the Mahrt Timber Agreements. See Note 7 — Commitments and Contingencies to our accompanying consolidated financial statements for additional information regarding the material terms of the Mahrt Timber Agreements.

We assumed a pulpwood supply agreement with IP (the "Carolinas Supply Agreement") in connection with a timberland acquisition in 2016. For full year ~~2019,~~2020, IP is required to purchase a minimum of ~~99,000~~82,000 tons of pulpwood under the Carolinas Supply Agreement. During the ~~nine~~three months ended ~~September 30, 2019,~~March 31, 2020, we sold ~~76,200~~ 16,300 tons under the Carolinas Supply Agreement, which ~~contributed 4%~~represented 2% of our net timber sales revenue.

Liquidity and Capital Resources

Cash flows generated from our operations are primarily used to fund recurring expenditures and distributions to our stockholders. The amount of distributions to common stockholders is determined by our board of directors and is dependent upon a number of factors, including funds deemed available for distribution based principally on our current and future projected operating cash flows, less capital requirements necessary to maintain our existing timberland portfolio. In determining the amount of distributions to common stockholders, we also consider our financial condition, our expectations of future sources of liquidity, current and future economic conditions, market demand for timber and timberlands, and tax considerations, including the annual distribution requirements necessary to maintain our status as a REIT under the Code.

In determining how to allocate cash resources in the future, we will initially consider the source of the cash. We anticipate using a portion of cash generated from operations, after payments of periodic operating expenses and interest expense, to fund certain capital expenditures required for our timberlands. Any remaining cash generated from operations may be used to partially fund timberland acquisitions and pay distributions to stockholders.

Therefore, to the extent that cash flows from operations are lower, timberland acquisitions and stockholder distributions are anticipated to be lower as well. Capital expenditures, including new timberland acquisitions, are generally funded with

cash flow from operations or existing debt availability; however, proceeds from future debt financings, and equity and debt offerings may be used to fund capital expenditures, acquire new timberland properties, invest in joint ventures, and pay down existing and future borrowings. From time to time, we also sell certain large timberland properties in order to generate capital to fund capital allocation priorities, including but not limited to redeployment into more desirable timberland investments, pay down of outstanding debt or repurchase of shares of our common stock. Such large dispositions are typically larger in size and more infrequent than sales under our normal land sales program.

Shelf Registration Statement and Equity Offerings

On June 2, 2017, we filed a shelf registration statement on Form S-3 with the SEC, which was declared effective by the SEC on June 16, ~~2017 (the "Shelf Registration Statement"). The Shelf Registration Statement~~2017. In addition, on February 28, 2020, we filed a shelf registration statement on Form S-3 with the SEC, which when declared effective by the SEC will supersede our existing shelf registration statement. Our shelf registration statements provides us with future flexibility to offer, from time to time and in one or more offerings, up to $600 million in an undefined combination of debt securities, common stock, preferred stock, depositary shares, or warrants. The terms of any such future offerings would be established at the time of an offering.

The table below presents the details of each credit facility under the Amended Credit Agreement as of ~~September 30, 2019:~~March 31, 2020:

Interest Rate⁽¹⁾

(dollars in thousands)
Facility Name Maturity Date
Interest Rate⁽¹⁾
Unused Commitment Fee Total Availability Outstanding Balance Remaining Availability
Revolving Credit Facility 12/1/2022 LIBOR + 2.20% 0.35% $ 35,000
$ —
$ 35,000
Multi-Draw Term Facility 12/1/2024 LIBOR + 2.20% 0.35% 200,000
49,936
150,064
Term Loan A-1 12/23/2024 LIBOR + 1.75% N/A 100,000
100,000
—
Term Loan A-2 12/1/2026 LIBOR + 1.90% N/A 100,000
100,000
—
Term Loan A-3 12/1/2027 LIBOR + 2.00% N/A 68,619
68,619
—
Term Loan A-4 8/22/2025 LIBOR + 1.70% N/A 140,000
140,000
$ —
Total $ 643,619
$ 458,555
$ 185,064
⁽¹⁾The applicable LIBOR margin on the Revolving Credit Facility and the Multi-Draw Term Facility ranges from a base rate plus between 0.50% to 1.20% or a LIBOR rate plus 1.50% to 2.20%, depending on the LTV ratio. The unused commitment fee rates also depend on the LTV ratio.

Borrowings under the Revolving Credit Facility may be used for general working capital, to support letters of credit, to fund cash earnest money deposits, to fund acquisitions in an amount not to exceed $5.0 million, and for other general corporate purposes. The Multi-Draw Term Facility, which is interest only until its maturity date, may be used to finance timberland acquisitions and associated expenses, to fund investment in joint ventures, to fund the repurchase of our common stock, and to reimburse payments of drafts under letters of credit.

Patronage ~~Refunds~~Dividends

We are eligible to receive annual patronage ~~refunds~~dividends from our lenders (the "Patronage Banks") under the Amended Credit Agreement. The annual patronage ~~refund~~dividend depends on the weighted-average patronage-eligible debt balance with each participating lender ~~as calculated by CoBank, for~~during the respective fiscal year, ~~under the eligible patronage loans,~~as calculated by CoBank, as well as the financial performance of the Patronage Banks. In March ~~2019,~~2020, we received a patronage ~~refund~~dividends of ~~$3.3~~$4.1 million, ~~on our borrowings under~~including $4.0 million of standard patronage dividends and $0.1 million of special patronage dividend. 75% of the ~~eligible~~standard patronage ~~loans that were outstanding during 2018. Of the total amount received, 75%~~dividends was received in cash and the remaining 25% was received in equity in Patronage Banks. The equity component of the patronage ~~refund~~dividends is redeemable for cash only at the discretion of the Patronage Banks'

board of directors. The special patronage dividends was received in cash. For the ~~nine~~three months ended ~~September 30, 2019,~~March 31, 2020, we ~~have~~ accrued ~~$2.9~~$0.9 million of patronage ~~refunds~~dividends receivable for ~~2019,~~2020, approximately 75% of which is expected to be received in cash in March ~~2020.~~2021.

~~Interest Rate Swaps~~

~~As of September 30, 2019, we had ten outstanding interest rate swaps, which effectively fixed the interest rate on $350.0 million of our $458.6 million variable rate debt (see~~ ~~Note 6 —Interest Rate Swaps~~). On October 21, 2019, we terminated the ten outstanding interest rate swaps and entered into two new interest rate swaps with Rabobank, one with a notional amount of $200 million and the other with a notional amount of $75 million, with a total fair value at inception equal to the net fair value of the terminated interest rate swaps on the date of their termination. Both of the new interest rate swaps have an effective date of November 29, 2019. The $200 million swap has a term of ten years and will bear interest at a fixed rate of 2.2067% per annum, and the $75 million swap has a term of seven years and will bear interest at a fixed rate of 2.083% per annum. After these transactions, we have fixed interest rates on $275 million of our outstanding debt for an average term of nineyears at a weighted-average rate of 2.17%, before the applicable spread and expected patronage refunds, as compared to an average term of four years at 2.44% under our previous swaps. We have effectively reduced the amount of our fixed rate debt from 76% to 60%, allowing us to take advantage of the current lower interest rate environment but also with the flexibility to enter into additional interest rate swaps in the future.

~~The~~As of March 31, 2020, the Amended Credit Agreement contains, among others, the following financial covenants which:

•limit the LTV ratio to (i) 50% at any time prior to December 31, 2021, and (ii) 45% at any time thereafter;

•require maintenance of a FCCR of not less than 1.05:1.00 at any time;

•require maintenance of a minimum liquidity balance of no less than $25.0 million at any time; and

•limit the aggregate capital expenditures to 1% of the value of the timberlands during any fiscal year.



Maryland						20-3536671
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification Number)

5 Concourse Parkway, Suite 2650, Atlanta, GA						30328
(Address of principal executive offices)						(Zip Code)


	Nine Months Ended September 30,							Three Months Ended March 31,
(in thousands)	2019			2018			(in thousands)	2020		2019
Triple T Joint Venture:							Triple T Joint Venture:
Net cash provided by (used in) operating activities	$	9,040		$	(1,753	)
Net cash used in operating activities							Net cash used in operating activities	$	(2,651)	$	(5,575)
Net cash used in investing activities	$	(3,263	)	$	(1,410,066	)	Net cash used in investing activities	$	(2,745)	$	(1,503)
Net cash provided by financing activities	$	87		$	1,461,452
Net cash provided by (used in) financing activities							Net cash provided by (used in) financing activities	$	(4)	$	100
Net change in cash and cash equivalents	$	5,864		$	49,633		Net change in cash and cash equivalents	$	(5,400)	$	(6,978)
Cash and cash equivalents, beginning of period	$	39,300		$	—		Cash and cash equivalents, beginning of period	$	39,614	$	39,300
Cash and cash equivalents, end of period	$	45,164		$	49,633		Cash and cash equivalents, end of period	$	34,214	$	32,322


	Nine Months Ended September 30,							Three Months Ended March 31,
(in thousands)	2019			2018			(in thousands)	2020		2019
Dawsonville Joint Venture:							Dawsonville Joint Venture:
Net cash provided by operating activities	$	8,873		$	12,673
Net cash provided by investing activities	$	—		$	—
Net cash provided by (used in) operating activities							Net cash provided by (used in) operating activities	$	(210)	$	1,185
Net cash used in financing activities	$	(9,616	)	$	(17,031	)	Net cash used in financing activities	$	(800)	$	(1,949)
Net change in cash and cash equivalents	$	(743	)	$	(4,358	)	Net change in cash and cash equivalents	$	(1,010)	$	(764)
Cash and cash equivalents, beginning of period	$	1,731		$	5,375		Cash and cash equivalents, beginning of period	$	1,441	$	1,731
Cash and cash equivalents, end of period	$	988		$	1,017		Cash and cash equivalents, end of period	$	431	$	967



	As of
(in thousands)	September 30, 2019			December 31, 2018
Required payments
2019	$	97		$	312
2020	397			397
2021	412			412
2022	424			424
2023	435			435
2024	447			447
Thereafter	1,873			1,873
	$	4,085		$	4,300
Less: imputed interest	(783		)
Operating lease liability	$	3,302

Remaining lease term (years)	9.2
Discount rate	4.58		%



	As of December 31, 2018
(in thousands)	Gross		Accumulated Depletion or Amortization		Net
Timber	$	345,972	$	25,912	$	320,060
Timberlands	367,488		—		367,488
Mainline roads	954		651		303
Timber and timberlands	$	714,414	$	26,563	$	687,851


⁽¹⁾	~~Represents CatchMark wholly-owned acreage only; excludes ownership interest in acreage held by joint ventures.~~


⁽¹⁾	~~Represents our share of total partner capital contributions.~~



	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands)	2019			2018			2019			2018
Triple T Joint Venture:
Total revenues	$	41,509		$	28,255		$	121,450		$	28,255
Operating income (loss)	$	2,490		$	(3,329	)	$	10,437		$	(3,329	)
Net loss	$	(4,613	)	$	(9,407	)	$	(10,480	)	$	(9,407	)
CatchMark:
Equity share of net loss	$	(25,712	)	$	(76,755	)	$	(81,800	)	$	(76,755	)



(in thousands)
Triple T Joint Venture:
Total equity as of September 30, 2019			$	829,577
Preferred Investors:
Equity in Triple T Joint Venture as of January 1, 2019	$	762,353
Minimum preferred return as of September 30, 2019	$	58,445

Class A preferred equity as of September 30, 2019	$	129
HLBV distribution as of September 30, 2019			$	820,927
CatchMark:
Equity in Triple T Joint Venture as of September 30, 2019			$	8,650
Equity in Triple T Joint Venture, as of January 1, 2019			$	90,450
Equity share of Triple T Joint Venture's net loss			$	(81,800	)


⁽¹⁾	Includes $0.1 million and $0.4 million of reimbursements of compensation costs for the three and nine months ended September 30, 2019, respectively. Includes $0.1 million and $0.1 million of reimbursements of compensation costs for the three and nine months ended September 30, 2018, respectively.


⁽²⁾	~~The three and nine months ended September 30, 2019 includes $0.6 million of incentive-based promote earned for exceeding investment hurdles.~~


⁽¹⁾	~~Represents cumulative patronage refunds received as equity in the Patronage Banks.~~



(in thousands)		Estimated Fair Value as of
Instrument Type	Balance Sheet Classification	September 30, 2019			December 31, 2018
Derivatives designated as hedging instruments:
Interest rate swaps	Prepaid expenses and other assets	$	218		$	3,643
Interest rate swaps	Other liabilities	$	(14,235	)	$	(3,635	)



	Number of Underlying Shares		Weighted-Average Grant Date Fair Value
Unvested at December 31, 2018	300,395		$	10.60
Granted	230,885		$	9.66
Vested	(83,817	)	$	11.37
Forfeited	(5,062	)	$	10.85
Unvested at September 30, 2019	442,401		$	9.96



Grant date market price (July 12, 2019)	$	10.08
Weighted-average fair value per granted share	$	8.13
Assumptions:
Volatility	22.88		%
Expected term (years)	3.0
Risk-free interest rate	1.85		%



(in thousands)	Three Months Ended September 30,				Nine Months Ended September 30,
Stock-based Compensation Expense classified as:	2019		2018		2019		2018
General and administrative expenses	$	729	$	587	$	1,763	$	1,861
Forestry management expenses	74		23		189		310
Total	$	803	$	610	$	1,952	$	2,171


⁽¹⁾	~~Includes non-cash basis of timber and timberland assets written-off related to timberland sold, terminations of timberland leases and casualty losses.~~


⁽²⁾	For the purpose of the above reconciliation, amortization includes amortization of deferred financing costs, amortization of operating lease assets and liabilities, amortization of intangible lease assets, and amortization of mainline road costs, which are included in either interest expense, land rent expense, or other operating expenses in the consolidated statements of operations.


⁽³⁾	~~Reflects our share of depletion, amortization, and basis of timberland and mitigation credits sold of the unconsolidated Dawsonville Bluffs Joint Venture.~~


⁽⁴⁾	~~Reflects HLBV (income) losses from the Triple T Joint Venture, which is determined based on a hypothetical liquidation of the underlying joint venture at book value as of the reporting date.~~


⁽⁶⁾	Includes certain cash expenses paid, or reimbursement received, that management believes do not directly reflect the core business operations of our timberland portfolio on an on-going basis, including costs required to be expensed by GAAP related to acquisitions, transactions, joint ventures or new business initiatives.


(dollars in thousands)
Facility Name	Maturity Date	Interest Rate⁽¹⁾	Unused Commitment Fee	Total Capacity		Outstanding Balance		Remaining Capacity
Revolving Credit Facility	12/1/2022	LIBOR + 2.20%	0.35%	$	35,000	$	—	$	35,000
Multi-Draw Term Facility	12/1/2024	LIBOR + 2.20%	0.35%	200,000		29,086		170,914
Term Loan A-1	12/23/2024	LIBOR + 1.75%	N/A	100,000		100,000		—
Term Loan A-2	12/1/2026	LIBOR + 1.90%	N/A	100,000		100,000		—
Term Loan A-3	12/1/2027	LIBOR + 2.00%	N/A	68,619		68,619		—
Term Loan A-4	8/22/2025	LIBOR + 1.70%	N/A	140,000		140,000		$	—
Total				$	643,619	$	437,705	$	205,914


⁽¹⁾	The applicable LIBOR margin on the Revolving Credit Facility and the Multi-Draw Term Facility ranges from a base rate plus between 0.50% to 1.20% or a LIBOR rate plus 1.50% to 2.20%, depending on the LTV ratio. The unused commitment fee rates also depend on the LTV ratio.


	Three Months Ended March 31,								Change
	2020			2019			%
Consolidated
Timber sales revenue	$	18,166		$	16,551		10	%
Timberland sales revenue	$	4,779		$	2,090		129	%
Asset management fees revenue	$	2,975		$	2,842		5	%

Timber sales volume (tons)
Pulpwood	324,380			294,747			10	%
Sawtimber ⁽¹⁾	270,515			192,145			41	%
	594,895			486,892			22	%

U.S. South
Timber sales revenue	$	16,272		$	16,079		1	%

Timber sales volume (tons)
Pulpwood	319,968			294,525			9	%
Sawtimber ⁽¹⁾	249,972			187,533			33	%
	569,940			482,058			18	%

Harvest Mix
Pulpwood	56		%	61		%
Sawtimber ⁽¹⁾	44		%	39		%
Delivered % as of total volume	63		%	79		%
Stumpage % as of total volume	37		%	21		%

Net timber sales price (per ton)⁽²⁾
Pulpwood	$	13		$	15		(11)	%
Sawtimber ⁽¹⁾	$	23		$	24		(6)	%

Timberland sales
Gross sales	$	4,779		$	2,090��		129	%
Acres sold	3,000			900			233	%
% of fee acres	0.7		%	0.2		%
Price per acre ⁽³⁾	$	1,627		$	2,236		(27)	%


⁽¹⁾	Excludes 24,000 tons harvested from the Bandon Property in the Pacific Northwest, which generated timber sales revenue of $1.8 million. The Bandon Property was acquired at the end of August 2018. Total volume harvested from the Bandon Property for the three months ended September 30, 2019 accounted for less than 4% of our total harvest volume.


⁽³⁾	Prices per ton are rounded to the nearest dollar and shown on a stumpage basis (i.e., net of contract logging and hauling costs) and, as such, the sum of these prices multiplied by the tons sold does not equal timber sales in the accompanying consolidated statements of operations for the three months ended September 30, 2019 and 2018.


Large Dispositions ⁽⁴⁾
Gross sales	$	21,250		$	—
Acres sold	14,400			—
Price per acre	$	1,474		$	—

Pacific Northwest
Timber sales revenue	$	1,894		$	472		301	%

Timber sales volume (tons)
Pulpwood	4,412			222			1,887	%
Sawtimber	20,543			4,612			345	%
	24,955			4,834			416	%

Harvest Mix
Pulpwood	18		%	5		%
Sawtimber	82		%	95		%
Delivered % as of total volume	84		%	100		%
Stumpage % as of total volume	16		%	—		%

Delivered timber sales price (per ton)⁽²⁾
Pulpwood	$	31		$	40		(21)	%
Sawtimber	$	91		$	101		(10)	%


⁽¹⁾	Excludes 43,300 tons harvested from the Bandon Property in the Pacific Northwest, which generated timber sales revenue of $3.5 million. The Bandon Property was acquired at the end of August 2018. Total volume harvested from the Bandon Property for the nine months ended September 30, 2019 accounted for less than 3% of our total harvest volume.


	Three Months Ended March 31, 2019		Changes attributable to:								Three Months Ended March 31, 2020
(in thousands)					Price/Mix			Volume ⁽³⁾
Timber sales ⁽¹⁾
Pulpwood	$	8,732	$	(613)		$	(306)		$	7,813
Sawtimber ⁽²⁾	7,819		(487)			3,021			10,353
	$	16,551	$	(1,100)		$	2,715		$	18,166



	Three Months Ended September 30, 2018		Changes attributable to:				Three Months Ended September 30, 2019
(in thousands)	Three Months Ended September 30, 2018		Price/Mix		Volume ⁽³⁾		Three Months Ended September 30, 2019
Timber sales ⁽¹⁾
Pulpwood	$	9,359	$	353	$	44	$	9,756
Sawtimber ⁽²⁾	7,383		688		1,879		9,950
	$	16,742	$	1,041	$	1,923	$	19,706


⁽¹⁾	~~Timber sales are presented on a gross basis. Timber sales revenue from delivered sales includes logging and hauling costs that customers pay for deliveries.~~


⁽³⁾	~~Changes in timber sales revenue related to properties acquired or disposed within the last 12 months are attributed to volume changes.~~



	Nine Months Ended September 30, 2018		Changes attributable to:					Nine Months Ended September 30, 2019
(in thousands)	Nine Months Ended September 30, 2018		Price/Mix		Volume ⁽³⁾			Nine Months Ended September 30, 2019
Timber sales ⁽¹⁾
Pulpwood	$	29,294	$	853	$	(3,419	)	$	26,728
Sawtimber ⁽²⁾	23,846		196		1,760			25,802
	$	53,140	$	1,049	$	(1,659	)	$	52,530