~~0001341141ctt:MainlineLoggingRoadsMember2021-09-30~~

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended ~~September~~June 30, ~~2021~~2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from to

Commission File Number 001-36239

CATCHMARK TIMBER TRUST, INC.

(Exact name of registrant as specified in its charter)


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)

(855) 858-9794

(Registrant’s telephone number, including area code)


N/A

(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 ☐

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 ☐

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

☐

Accelerated filer

☒

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Number of shares outstanding of the registrant’s common stock, as of ~~November~~August 1, ~~2021: 48,888,424~~2022: 49,275,171 shares

Table of Contents

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
Common Stock						Class A common stock, $0.01 par value per share of CatchMark Timber Trust, Inc.
Common Unit						Common partnership unit of CatchMark Timber Operating Partnership, L.P.
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
GP						~~Georgia-Pacific WFS LLC~~
HBU						Higher and Better Use
HLBV						Hypothetical Liquidation at Book Value
IP						International Paper Company
LIBOR						London Interbank Offered Rate
LTIP						Long-Term Incentive Plan
LTIP Unit						Limited partnership unit of CatchMark Timber Operating Partnership, L.P.
LTV						Loan-to-Value
~~MBF~~						~~Thousand Board Feet~~
MPERS						Missouri Department of Transportation & Patrol Retirement System
NYSE						New York Stock Exchange
REIT						Real Estate Investment Trust
ROU						Right-of-Use
SEC						Securities and Exchange Commission
SRP						Share Repurchase Program
Triple T						TexMark Timber Treasury, L.P.
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 (unaudited)

Consolidated Balance Sheets as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020~~2021

Consolidated Statements of Operations for the Three Months and ~~Nin~~eSix Months ~~Months~~ Ended ~~September~~June 30, ~~2021~~2022 and 202021

Consolidated Statements of Comprehensive Income (Loss) for the Three Months and Ni neSix Months ~~Months~~ Ended ~~September~~June 30, ~~2021~~2022 and 202021

Consolidated Statements of Equity for the Three Months and Six Months ~~Nine~~ ~~Months~~ Ended ~~September~~June 30, ~~2021~~2022 and 202021

Consolidated Statements of Cash Flows for the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2021~~2022 and 202021

Condensed Notes to Consolidated Financial Statements

Item 2.

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

2925

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

4338

Item 4.

Controls and Procedures

4439

PART II. OTHER INFORMATION

Item 1.

Item 1A.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

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, CatchMark, or its executive officers on CatchMark's behalf, may from time to time make forward-looking statements in other reports and documents 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 statements 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~~statements regarding our ~~operations to generate predictable~~pending merger with PotlatchDeltic Corporation and ~~stable cash flow from sustainable harvests, opportunistic land sales and asset management fees that covers our dividend throughout~~ the ~~business cycle; that future developments related to the COVID-19 pandemic and actions taken in response thereto could adversely impact our business and those~~repayment of our ~~customers and contractors; that we believe we are well-positioned to weather additional economic turmoil~~outstanding indebtedness in connection with the merger, as ~~a result of our deleveraging initiatives and other balance sheet strengthening undertaken over the last three years;~~well as statements regarding anticipated property performance and ~~anticipated~~ growth in our portfolio; ~~expectations to generate revenues from environmental initiatives;~~ 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; changes 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 are based on currently available information and 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 include those discussed in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021, Part II, Item 1A. Risk Factors in this Quarterly Report on Form 10-Q, and our subsequent reports filed with the SEC. ~~Accordingly,~~Accordingly, readers are cautioned not to rely 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.

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~~comprehensive income (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, ~~2020.~~2021. Our results of operations for the three months and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 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 (UNAUDITED)

(in thousands, except for per-share amounts)


		September 30, 2021		December 31, 2020			June 30, 2022		December 31, 2021
Assets:	Assets:					Assets:
Cash and cash equivalents	Cash and cash equivalents	$	24,566	$	11,924	Cash and cash equivalents	$	33,727	$	22,963
Accounts receivable	Accounts receivable	7,232		8,333		Accounts receivable	3,852		5,436
Prepaid expenses and other assets	Prepaid expenses and other assets	6,603		5,878		Prepaid expenses and other assets	18,179		6,294
Operating lease right-of-use asset (Note 7)	Operating lease right-of-use asset (Note 7)	2,604		2,831		Operating lease right-of-use asset (Note 7)	2,371		2,527
Deferred financing costs	Deferred financing costs	2,752		167		Deferred financing costs	2,279		2,606
Timber assets (Note 3):	Timber assets (Note 3):					Timber assets (Note 3):
Timber and timberlands, net	Timber and timberlands, net	470,441		576,680		Timber and timberlands, net	453,240		466,130
Intangible lease assets	Intangible lease assets	2		5		Intangible lease assets	—		1
Investments in unconsolidated joint ventures (Note 4)	Investments in unconsolidated joint ventures (Note 4)	1,327		1,510		Investments in unconsolidated joint ventures (Note 4)	1,719		1,353
Total assets	Total assets	$	515,527	$	607,328	Total assets	$	515,367	$	507,310

Liabilities:	Liabilities:					Liabilities:
Accounts payable and accrued expenses	Accounts payable and accrued expenses	$	4,606	$	4,808	Accounts payable and accrued expenses	$	7,143	$	3,677
Operating lease liability (Note 7)	Operating lease liability (Note 7)	2,779		2,988		Operating lease liability (Note 7)	2,556		2,707
Other liabilities	Other liabilities	20,428		32,130		Other liabilities	3,957		18,683
Notes payable and lines of credit, net of deferred financing costs (Note 5)	Notes payable and lines of credit, net of deferred financing costs (Note 5)	337,835		437,490		Notes payable and lines of credit, net of deferred financing costs (Note 5)	298,478		298,247
Total liabilities	Total liabilities	365,648		477,416		Total liabilities	312,134		323,314

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

Stockholders’ Equity:	Stockholders’ Equity:					Stockholders’ Equity:
Class A Common stock, $0.01 par value; 900,000 shares authorized; 48,899 and 48,765 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively		489		488
Class A common stock, $0.01 par value; 900,000 shares authorized; 49,248 and 48,888 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively						Class A common stock, $0.01 par value; 900,000 shares authorized; 49,248 and 48,888 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively	492		489
Additional paid-in capital	Additional paid-in capital	729,532		728,662		Additional paid-in capital	731,339		729,960
Accumulated deficit and distributions	Accumulated deficit and distributions	(567,656)		(572,493)		Accumulated deficit and distributions	(546,127)		(537,477)
Accumulated other comprehensive loss		(14,323)		(27,893)
Accumulated other comprehensive income (loss)						Accumulated other comprehensive income (loss)	15,326		(11,217)
Total stockholders’ equity	Total stockholders’ equity	148,042		128,764		Total stockholders’ equity	201,030		181,755
Noncontrolling Interests	Noncontrolling Interests	1,837		1,148		Noncontrolling Interests	2,203		2,241
Total equity	Total equity	149,879		129,912		Total equity	203,233		183,996
Total liabilities and equity	Total liabilities and equity	$	515,527	$	607,328	Total liabilities and equity	$	515,367	$	507,310

See accompanying notes.

Table of Contents

CATCHMARK TIMBER TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(in thousands, except for per-share amounts)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2021		2020		2021		2020			2022		2021		2022		2021
Revenues:	Revenues:									Revenues:
Timber sales	Timber sales	$	15,850	$	18,060	$	56,110	$	52,399	Timber sales	$	14,679	$	20,111	$	32,402	$	40,260
Timberland sales	Timberland sales	2,122		2,430		13,111		8,882		Timberland sales	8,818		7,632		14,888		10,989
Asset management fees	Asset management fees	2,984		3,118		9,313		8,950		Asset management fees	110		3,211		2,289		6,329
Other revenues	Other revenues	1,117		1,005		3,165		3,111		Other revenues	952		986		1,922		2,048
		22,073		24,613		81,699		73,342			24,559		31,940		51,501		59,626
Expenses:	Expenses:									Expenses:
Contract logging and hauling costs	Contract logging and hauling costs	6,689		7,688		24,245		21,943		Contract logging and hauling costs	6,277		8,825		12,618		17,556
Depletion	Depletion	4,560		7,286		18,942		20,934		Depletion	3,201		6,657		7,350		14,382
Cost of timberland sales	Cost of timberland sales	1,318		1,926		9,114		6,811		Cost of timberland sales	6,475		5,641		10,812		7,796
Forestry management expenses	Forestry management expenses	1,725		1,666		5,319		5,171		Forestry management expenses	1,498		1,707		3,123		3,594
General and administrative expenses	General and administrative expenses	2,954		2,768		9,648		13,059		General and administrative expenses	7,650		3,094		11,619		6,694
Land rent expense	Land rent expense	80		114		213		334		Land rent expense	106		20		186		133
Other operating expenses	Other operating expenses	1,558		1,458		4,985		4,679		Other operating expenses	1,441		1,714		2,690		3,427
		18,884		22,906		72,466		72,931			26,648		27,658		48,398		53,582

Other income (expense):	Other income (expense):									Other income (expense):
Interest income	Interest income	1		1		2		51		Interest income	48		—		51		1
Interest expense	Interest expense	(3,216)		(3,563)		(9,481)		(11,590)		Interest expense	(2,778)		(3,337)		(5,279)		(6,265)
Gain on large dispositions		23,377		—		24,136		1,274
Gain on large disposition										Gain on large disposition	—		759		—		759
		20,162		(3,562)		14,657		(10,265)			(2,730)		(2,578)		(5,228)		(5,505)

Income (loss) before unconsolidated joint ventures	Income (loss) before unconsolidated joint ventures	23,351		(1,855)		23,890		(9,854)		Income (loss) before unconsolidated joint ventures	(4,819)		1,704		(2,125)		539
Income (loss) from unconsolidated joint ventures (Note 4)		(43)		(2,294)		620		(4,727)
Income from unconsolidated joint ventures (Note 4)										Income from unconsolidated joint ventures (Note 4)	260		49		750		663
Net income (loss)	Net income (loss)	23,308		(4,149)		24,510		(14,581)		Net income (loss)	(4,559)		1,753		(1,375)		1,202
Net income attributable to noncontrolling interest		56		—		59		—
Net income (loss) attributable to noncontrolling interest										Net income (loss) attributable to noncontrolling interest	(11)		4		(3)		3
Net income (loss) attributable to common stockholders	Net income (loss) attributable to common stockholders	$	23,252	$	(4,149)	$	24,451	$	(14,581)	Net income (loss) attributable to common stockholders	$	(4,548)	$	1,749	$	(1,372)	$	1,199

Weighted-average common shares outstanding - basic	Weighted-average common shares outstanding - basic	48,441		48,766		48,412		48,833		Weighted-average common shares outstanding - basic	48,522		48,421		48,501		48,398
Income (loss) per share - basic	Income (loss) per share - basic	$	0.48	$	(0.09)	$	0.51	$	(0.30)	Income (loss) per share - basic	$	(0.09)	$	0.04	$	(0.03)	$	0.02

Weighted-average common shares outstanding - diluted	Weighted-average common shares outstanding - diluted	48,637		48,766		48,613		48,833		Weighted-average common shares outstanding - diluted	48,522		48,562		48,501		48,513
Income (loss) per share - diluted	Income (loss) per share - diluted	$	0.48	$	(0.09)	$	0.50	$	(0.30)	Income (loss) per share - diluted	$	(0.09)	$	0.04	$	(0.03)	$	0.02

See accompanying notes.

Table of Contents

CATCHMARK TIMBER TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

(in thousands)

Three Months Ended
September 30, Nine Months Ended
September 30,
2021 2020 2021 2020
Net income (loss) $ 23,308 $ (4,149) $ 24,510 $ (14,581)
Other comprehensive income (loss):
Market value adjustment to interest rate swaps 2,414 3,799 13,595 (22,928)
Comprehensive income (loss) 25,722 (350) 38,105 (37,509)
Comprehensive income attributable to noncontrolling interest 6 — 25 —
Comprehensive income (loss) attributable to common stockholders $ 25,716 $ (350) $ 38,080 $ (37,509)


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Net income (loss)	$	(4,559)	$	1,753	$	(1,375)	$	1,202
Other comprehensive income (loss):
Market value adjustment to interest rate swaps	9,284		(4,504)		26,607		11,181
Comprehensive income (loss)	4,725		(2,751)		25,232		12,383
Comprehensive income (loss) attributable to noncontrolling interest	22		(11)		64		19
Comprehensive income (loss) attributable to common stockholders	$	4,703	$	(2,740)	$	25,168	$	12,364

See accompanying notes.

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CATCHMARK TIMBER TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF 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 Interest					Total Equity			Common Stock				Additional Paid-In Capital				Accumulated Deficit and Distributions				Accumulated Other Comprehensive Income (Loss)				Total Stockholders’ Equity				Noncontrolling Interest				Total Equity
		Shares	Amount																Shares					Amount
Balance, December 31, 2020		48,765	$	488	$	728,662	$	(572,493)	$	(27,893)			$	128,764			$	1,148					$	129,912
Balance, December 31, 2021																						Balance, December 31, 2021	48,888		$	489			$	729,960			$	(537,477)			$	(11,217)			$	181,755			$	2,241			$	183,996
Issuance of common stock pursuant to:	Issuance of common stock pursuant to:																					Issuance of common stock pursuant to:
LTIP, net of forfeitures and amounts withheld for income taxes	LTIP, net of forfeitures and amounts withheld for income taxes	139	1		(46)		—		—		(45)				174					129		LTIP, net of forfeitures and amounts withheld for income taxes	360		3		876				—				—				879				(431)				448
Dividends on common stock ($0.135 per share)		—	—		—		(6,537)		—		(6,537)				—					(6,537)
Dividends on common stock ($0.075 per share)																						Dividends on common stock ($0.075 per share)	—		—		—				(3,639)				—				(3,639)				—				(3,639)
Distributions to noncontrolling interest																						Distributions to noncontrolling interest	—		—		—				—				—				—				(9)				(9)
Net income																						Net income	—		—		—				3,176				—				3,176				8				3,184
Other comprehensive income																						Other comprehensive income	—		—		—				—				17,281				17,281				42				17,323
Balance, March 31, 2022																						Balance, March 31, 2022	49,248		$	492	$	730,836			$	(537,940)			$	6,064			$	199,452			$	1,851			$	201,303
Issuance of common stock pursuant to:																						Issuance of common stock pursuant to:
LTIP, net of forfeitures and amounts withheld for income taxes																						LTIP, net of forfeitures and amounts withheld for income taxes	—		—		503				—				—				503				350				853
Dividends on common stock ($0.075 per share)																						Dividends on common stock ($0.075 per share)	—		—		—				(3,639)				—				(3,639)				—				(3,639)
Distributions to noncontrolling interest	Distributions to noncontrolling interest	—	—		—		—		—		—				(28)					(28)		Distributions to noncontrolling interest	—		—		—				—				—				—				(9)				(9)
Net loss	Net loss	—	—		—		(550)		—		(550)				(1)					(551)		Net loss	—		—		—				(4,548)				—				(4,548)				(11)				(4,559)
Other comprehensive income	Other comprehensive income	—	—		—		—		15,655		15,655				30					15,685		Other comprehensive income	—		—		—				—				9,262				9,262				22				9,284
Balance, March 31, 2021		48,904	$	489	$	728,616	$	(579,580)	$	(12,238)	$	137,287			$	1,323				$	138,610
Issuance of common stock pursuant to:
LTIP, net of forfeitures and amounts withheld for income taxes		2	—		539		—		—		539				177					716
Dividends on common stock ($0.135 per share)		—	—		—		(6,537)		—		(6,537)				—					(6,537)
Distributions to noncontrolling interest		—	—		—		—		—		—				(26)					(26)
Net income		—	—		—		1,749		—		1,749				4					1,753
Other comprehensive loss		—	—		—		—		(4,493)		(4,493)				(11)					(4,504)
Balance June 30, 2021		48,906	$	489	$	729,155	$	(584,368)	$	(16,731)	$	128,545			$	1,467				$	130,012
Issuance of common stock pursuant to:
LTIP, net of forfeitures and amounts withheld for income taxes		(7)	—		377		—		—		377				324					701
Dividends on common stock ($0.135 per share)		—	—		—		(6,540)		—		(6,540)				—					(6,540)
Distributions to noncontrolling interest		—	—		—		—		—		—				(16)					(16)
Net income		—	—		—		23,252		—		23,252				56					23,308
Other comprehensive income		—	—		—		—		2,408		2,408				6					2,414
Balance September 30, 2021		48,899	$	489	$	729,532	$	(567,656)	$	(14,323)	$	148,042			$	1,837				$	149,879

Balance, June 30, 2022																						Balance, June 30, 2022	49,248		$	492	$	731,339			$	(546,127)			$	15,326			$	201,030			$	2,203			$	203,233

Table of Contents

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

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

~~(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 Interest				Total Equity			Common Stock				Additional Paid-In Capital		Accumulated Deficit and Distributions		Accumulated Other Comprehensive Income (Loss)		Total Stockholders’ Equity		Noncontrolling Interest		Total Equity
		Shares	Amount												Shares						Amount
Balance, December 31, 2019		49,008	$	490					$	729,274			$	(528,847)				$	(8,276)			$	192,641			$	562	$	193,203
Balance, December 31, 2020																									Balance, December 31, 2020	48,765		$	488	$	728,662	$	(572,493)	$	(27,893)	$	128,764	$	1,148	$	129,912
Issuance of common stock pursuant to:	Issuance of common stock pursuant to:																								Issuance of common stock pursuant to:
LTIP, net of forfeitures and amounts withheld for income taxes	LTIP, net of forfeitures and amounts withheld for income taxes	91	1		215		—				—					216			691				907		LTIP, net of forfeitures and amounts withheld for income taxes	139		1		(46)		—		—		(45)		174		129
Dividends on common stock ($0.135 per share)	Dividends on common stock ($0.135 per share)	—	—		—		(6,564)				—					(6,564)			—				(6,564)		Dividends on common stock ($0.135 per share)	—		—		—		(6,537)		—		(6,537)		—		(6,537)
Distributions to noncontrolling interest	Distributions to noncontrolling interest	—	—		—		—				—					—			(84)				(84)		Distributions to noncontrolling interest	—		—		—		—		—		—		(28)		(28)
Repurchase of common stock		(352)	(4)		(2,550)		—				—					(2,554)			—				(2,554)
Net loss	Net loss	—	—		—		(4,249)				—					(4,249)			—				(4,249)		Net loss	—		—		—		(550)		—		(550)		(1)		(551)
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
Other comprehensive income																									Other comprehensive income	—		—		—		—		15,655		15,655		30		15,685
Balance, March 31, 2021																									Balance, March 31, 2021	48,904		$	489	$	728,616	$	(579,580)	$	(12,238)	$	137,287	$	1,323	$	138,610
Issuance of common stock pursuant to:	Issuance of common stock pursuant to:																								Issuance of common stock pursuant to:
LTIP, net of forfeitures and amounts withheld for income taxes	LTIP, net of forfeitures and amounts withheld for income taxes	33	1		537		—				—					538			125				663		LTIP, net of forfeitures and amounts withheld for income taxes	2		—		539		—		—		539		177		716
Dividends on common stock ($0.135 per share)	Dividends on common stock ($0.135 per share)	—	—		—		(6,524)				—					(6,524)			—				(6,524)		Dividends on common stock ($0.135 per share)	—		—		—		(6,537)		—		(6,537)		—		(6,537)
Distributions to noncontrolling interest	Distributions to noncontrolling interest	—	—		—		—				—					—			(17)				(17)		Distributions to noncontrolling interest	—		—		—		—		—		—		(26)		(26)
Repurchase of common stock		(9)	—		(67)		—				—					(67)			—				(67)
Net loss		—	—		—		(6,183)				—					(6,183)			—				(6,183)
Net income																									Net income	—		—		—		1,749		—		1,749		4		1,753
Other comprehensive loss	Other comprehensive loss	—	—		—		—				(2,249)					(2,249)			—				(2,249)		Other comprehensive loss	—		—		—		—		(4,493)		(4,493)		(11)		(4,504)
Balance, June 30, 2020		48,771	$	488	$	727,409	$	(552,367)			$	(35,003)				$	140,527		$	1,277			$	141,804
Issuance of common stock pursuant to:
LTIP, net of forfeitures and amounts withheld for income taxes		(6)	—		358		—				—					358			218				576
Dividends on common stock ($0.135 per share)		—	—		—		(6,525)				—					(6,525)			—				(6,525)
Distributions to noncontrolling interest		—	—		—		—				—					—			(12)				(12)
Repurchase of common stock		—	—		—		—				—					—			—				—
Net loss		—	—		—		(4,149)				—					(4,149)			—				(4,149)
Other comprehensive income		—	—		—		—				3,799					3,799			—				3,799
Balance, September 30, 2020		48,765	$	488	$	727,767	$	(563,041)			$	(31,204)				$	134,010		$	1,483			$	135,493

Balance, June 30, 2021																									Balance, June 30, 2021	48,906		$	489	$	729,155	$	(584,368)	$	(16,731)	$	128,545	$	1,467	$	130,012

See accompanying notes.

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CATCHMARK TIMBER TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in thousands)


		Nine Months Ended September 30,					Six Months Ended June 30,
		2021		2020			2022		2021
Cash Flows from Operating Activities:	Cash Flows from Operating Activities:					Cash Flows from Operating Activities:
Net income (loss)	Net income (loss)	$	24,510	$	(14,581)	Net income (loss)	$	(1,375)	$	1,202
Adjustments to reconcile net income (loss) to net cash provided by operating activities:	Adjustments to reconcile net income (loss) to net cash provided by operating activities:					Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depletion	Depletion	18,942		20,934		Depletion	7,350		14,382
Basis of timberland sold, lease terminations and other	Basis of timberland sold, lease terminations and other	8,832		6,988		Basis of timberland sold, lease terminations and other	10,738		7,667
Stock-based compensation expense	Stock-based compensation expense	2,152		3,207		Stock-based compensation expense	1,704		1,386
Noncash interest expense	Noncash interest expense	1,708		2,469		Noncash interest expense	771		1,171
Noncash lease expense	Noncash lease expense	18		28		Noncash lease expense	5		11
Other amortization	Other amortization	120		124		Other amortization	59		87
Gain on large dispositions	Gain on large dispositions	(24,136)		(1,274)		Gain on large dispositions	—		(759)
(Income) loss from unconsolidated joint ventures		(620)		4,727
Operating distributions from unconsolidated joint ventures		—		273
Income from unconsolidated joint venture						Income from unconsolidated joint venture	(750)		(663)
Operating distributions from unconsolidated joint venture						Operating distributions from unconsolidated joint venture	384		—
Interest paid under swaps with other-than-insignificant financing element	Interest paid under swaps with other-than-insignificant financing element	4,306		2,904		Interest paid under swaps with other-than-insignificant financing element	2,377		2,845
Changes in assets and liabilities:	Changes in assets and liabilities:					Changes in assets and liabilities:
Accounts receivable	Accounts receivable	124		(1,092)		Accounts receivable	1,397		(258)
Prepaid expenses and other assets	Prepaid expenses and other assets	(32)		(5)		Prepaid expenses and other assets	3,420		497
Accounts payable and accrued expenses	Accounts payable and accrued expenses	(90)		1,959		Accounts payable and accrued expenses	3,529		878
Other liabilities	Other liabilities	1,048		986		Other liabilities	(3,401)		1,606
Net cash provided by operating activities	Net cash provided by operating activities	36,882		27,647		Net cash provided by operating activities	26,208		30,052

Cash Flows from Investing Activities:	Cash Flows from Investing Activities:					Cash Flows from Investing Activities:
Timberland acquisitions and earnest money paid						Timberland acquisitions and earnest money paid	(2,291)		—
Capital expenditures (excluding timberland acquisitions)	Capital expenditures (excluding timberland acquisitions)	(3,923)		(4,332)		Capital expenditures (excluding timberland acquisitions)	(2,990)		(3,320)
Investment in unconsolidated joint ventures		—		(5,000)
Distributions from unconsolidated joint ventures	Distributions from unconsolidated joint ventures	803		127		Distributions from unconsolidated joint ventures	—		266
Net proceeds from large dispositions	Net proceeds from large dispositions	106,763		20,863		Net proceeds from large dispositions	—		7,340
Net cash provided by investing activities		103,643		11,658
Net cash provided by (used in) investing activities						Net cash provided by (used in) investing activities	(5,281)		4,286

Cash Flows from Financing Activities:	Cash Flows from Financing Activities:					Cash Flows from Financing Activities:
Repayment of notes payable	Repayment of notes payable	(102,705)		(20,850)		Repayment of notes payable	—		(7,295)
Proceeds from notes payable		—		5,000
Financing costs paid	Financing costs paid	(349)		(1,019)		Financing costs paid	(61)		(7)
Interest paid under swaps with other-than-insignificant financing element	Interest paid under swaps with other-than-insignificant financing element	(4,306)		(2,904)		Interest paid under swaps with other-than-insignificant financing element	(2,377)		(2,845)
Dividends/distributions paid	Dividends/distributions paid	(19,684)		(19,726)		Dividends/distributions paid	(7,296)		(13,128)
Repurchase of common shares	Repurchase of common shares	(233)		(2,207)		Repurchase of common shares	(26)		(158)
Repurchase of common shares for minimum tax withholding	Repurchase of common shares for minimum tax withholding	(606)		(1,052)		Repurchase of common shares for minimum tax withholding	(403)		(538)
Net cash used in financing activities	Net cash used in financing activities	(127,883)		(42,758)		Net cash used in financing activities	(10,163)		(23,971)
Net change in cash and cash equivalents	Net change in cash and cash equivalents	12,642		(3,453)		Net change in cash and cash equivalents	10,764		10,367
Cash and cash equivalents, beginning of period	Cash and cash equivalents, beginning of period	11,924		11,487		Cash and cash equivalents, beginning of period	22,963		11,924
Cash and cash equivalents, end of period	Cash and cash equivalents, end of period	$	24,566	$	8,034	Cash and cash equivalents, end of period	$	33,727	$	22,291

See accompanying notes.

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CATCHMARK TIMBER TRUST, INC. AND SUBSIDIARIES

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~SEPTEMBER~~JUNE 30, ~~2021~~2022 (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 99.76% of its Common ~~Units.~~Units, directly and indirectly through CatchMark LP Holder, LLC (“CatchMark ~~LP Holder”~~Timber LP”), a Delaware limited liability company and wholly-owned subsidiary of CatchMark Timber ~~Trust, is a limited partner of CatchMark Timber OP and owns 0.01% of its Common Units.~~Trust. The remaining ~~0.23%~~0.24% of CatchMark Timber OP’s ~~common units~~Common Units are owned by current and former officers and directors of CatchMark Timber Trust. In addition, CatchMark Timber Trust conducts certain aspects of its business through CatchMark Timber TRS, Inc. (“CatchMark TRS”), a Delaware corporation formed as a wholly-owned subsidiary of CatchMark Timber OP in 2006. CatchMark TRS is a taxable REIT subsidiary. Unless otherwise noted, references herein to 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.

Proposed Merger

On May 29, 2022, CatchMark Timber Trust and CatchMark Timber OP entered into an Agreement and Plan of Merger (the “Merger Agreement”) with PotlatchDeltic Corporation, a Delaware corporation (“PotlatchDeltic”), and Horizon Merger Sub 2022, LLC, a Delaware limited liability company (“Merger Sub”). Pursuant to the Merger Agreement, CatchMark Timber Trust will be merged with and into Merger Sub, with Merger Sub surviving the merger as a wholly-owned subsidiary of PotlatchDeltic (the "Company Merger") followed by the merger of CatchMark Timber OP with and into Merger Sub, with Merger Sub surviving the merger as a wholly-owned subsidiary of PotlatchDeltic (the “Partnership Merger” and together with the Company Merger, the “Mergers”).

The Merger Agreement provides that at the effective time of the Company Merger, each issued and outstanding share of Common Stock, other than those shares held by CatchMark Timber Trust, CatchMark Timber OP, PotlatchDeltic, Merger Sub or any of their respective wholly-owned subsidiaries (“Excluded Shares”), will be converted into the right to receive 0.230 shares of common stock of PotlatchDeltic plus the rightto receive cash in lieu of any fractional shares of common stock of PotlatchDeltic (the "Merger Consideration"). Also at the effective time of the Partnership Merger, each of the issued and outstanding Common Units, other than those Common Units held by CatchMark Timber Trust, CatchMark Timber OP, PotlatchDeltic, Merger Sub, or any of their respective wholly-owned subsidiaries (“Excluded OP Units”), will automatically be converted into the right to receive the Merger Consideration.

In addition, the Merger Agreement provides that (i) immediately prior to the effective time of the Company Merger, any and all outstanding issuance and forfeiture conditions on any Common Stock granted under CatchMark's equity incentive plans that is unvested or subject to a substantial risk of forfeiture will be deemed satisfied in full and on a fully vested basis (at maximum performance to the extent applicable), and such vested shares will automatically be converted into the right to receive the Merger Consideration at the Company Merger effective time; (ii) immediately prior to the effective time of the Partnership Merger, each issued and outstanding unvested LTIP Unit will automatically become fully vested (at maximum performance, to the extent applicable) and, immediately after such vesting, each vested LTIP Unit that is eligible for conversion into a Common Unit will automatically convert into a Common Unit, which will automatically be converted into the right to receive Merger Consideration at the Partnership Merger effective time.

In connection with the consummation of the Mergers, CatchMark employees may be entitled to receive severance payments if terminated within three months prior to, or within 12 months following, consummation of the Mergers, in accordance with CatchMark's Change in Control Severance Protection Plan, dated as of April 8, 2019 and amended as of April 6, 2022, or the Amended and Restated Employment Agreement between CatchMark and Brian M. Davis, dated as of March 11, 2021, as applicable.

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CatchMark has also agreed to various customary covenants and agreements, including, subject to certain exceptions, to conduct its business in all material respects in the ordinary course of business and in a manner consistent with past practice, during the period between the execution of the Merger Agreement and the consummation of the Mergers.

The consummation of the Mergers are subject to certain closing conditions, including, among others, the approval of the Company Merger by CatchMark's stockholders. In addition, the Merger Agreement may be terminated under certain circumstances by CatchMark or PotlatchDeltic, including if the Mergers have not been completed by November 29, 2022. Upon a termination of the Merger Agreement, under certain circumstances, CatchMark will be required to pay a termination fee to PotlatchDeltic of $19.4 million. CatchMark expects the Mergers to close in the third quarter of 2022.

This description of the Merger Agreement and the transactions contemplated thereby does not purport to be complete and is subject to and qualified in its entirety by reference to the Merger Agreement, a copy of which is filed as Exhibit 2.1 to this Quarterly Report on Form 10-Q.

In connection with the Mergers, CatchMark has incurred legal, consulting, and other professional fees of $4.6 million for the three months and six months ended June 30, 2022, which was included in general and administrative expenses on the accompanying consolidated statement of operations. Approximately $3.2 million of the $4.6 million was accrued and included in accounts payable and accrued liabilities on the accompanying consolidated balance sheet.

2. Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

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 notes included in CatchMark’s Annual Report on Form 10-K for the year ended December 31, ~~2020.~~

~~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 percentage. 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.

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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 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 has determined that there has been no impairment to its timber assets as of September 30, 2021.

Earnings Per Share Attributable to Common Stockholders

Basic earnings (loss) per common share is calculated as net income (loss) attributable to common stockholders divided by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share equals basic earnings (loss) per common share, adjusted to reflect the dilution that would occur if all outstanding securities convertible into common shares or contracts to issue common shares were converted or ~~exercise~~dexercised and the related proceeds are then used to repurchase common shares. ~~The following table provides~~For the ~~reconciliation of~~three months and six months ended June 30, 2022, CatchMark's basic weighted-average common shares towere the same as the diluted weighted-average common shares ~~for the three months and nine months ended September 30, 2021:~~

Three Months Ended September 30, Nine Months Ended September 30,
2021 2021
Weighted-average common shares outstanding - basic 48,441 48,412
Effect of potentially dilutive securities 196 201
Weighted-average common shares outstanding - diluted 48,637 48,613
Anti-dilutive shares excluded from diluted weighted-average common shares 52 37

~~For the three months and nine months ended September 30, 2021,~~as all potentially dilutive securities outstanding were anti-dilutive due to incurring a net loss for the respective period. Potentially dilutive securities included (i) unvested shares of service-based restricted stock and LTIP Units, and (ii) contingently issuable shares of performance-based restricted stock and LTIP ~~Units as~~Units. See Note 9 —Stock-based Compensation for details of ~~September 30, 2021. Vested Common Units have been excluded from~~ the computation of earnings per common share because all income attributable to the Common Units has been recorded as noncontrolling interest and excluded from net income attributable to common stockholders. All potentially dilutive ~~securities outstanding during the three months and nine months ended September 30, 2020 were anti-dilutive as a result of incurring net loss for each of the respective periods.~~

securities.

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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

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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 those operating segments into 3 reportable segments: Harvest, Real Estate and Investment Management. See Note 910 — Segment Information for additional information.

Recent Accounting ~~Pronouncements~~Pronouncement

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 entities with optional expedients and exceptions for applying GAAP to contracts, 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. In JanuaryOctober 2021, the FASB issued ASU ~~2021-01,~~2021-08, ~~Reference Rate Reform(Topic 848)~~Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which ~~refines~~requires acquiring entities to recognize and measure contract assets and contract liabilities in a business combination. This ASU is intended to improve the ~~scope of Topic 848 and clarifies some of its guidance to reduce~~accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to ~~accounting for~~ (1) ~~modifications to the terms~~recognition of ~~affected derivatives~~an acquired contract liability and (2) ~~existing hedging relationships~~payment terms and their effect on subsequent revenue recognized by the acquirer. The amendments in ~~which the affected derivatives are designated as hedging instruments. These amendments~~this ASU are effective ~~immediately and may be applied prospectively to contract modifications made and hedging relationships entered into on or before~~for fiscal years beginning after December ~~31,~~15, 2022. CatchMark ~~has elected~~is currently assessing the ~~optional expedients, which~~impact ASU 2021-08 will ~~be applied to all eligible contracts and hedging relationships as reference rate replacement activities occur.~~have on its consolidated financial statements.

3. Timber Assets

As of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, timber and timberlands consisted of the following, respectively:

As of September 30, 2021
(in thousands) Gross Accumulated
Depletion or
Amortization Net
Timber $ 184,635 $ 13,473 $ 171,162
Timberlands 299,099 — 299,099
Mainline roads 1,052 872 180
Timber and timberlands $ 484,786 $ 14,345 $ 470,441


	As of June 30, 2022
(in thousands)	Gross		Accumulated Depletion or Amortization		Net
Timber	$	167,198	$	7,350	$	159,848
Timberlands	293,256		—		293,256
Mainline roads	1,055		919		136
Timber and timberlands	$	461,509	$	8,269	$	453,240


		As of December 31, 2020							As of December 31, 2021
(in thousands)	(in thousands)	Gross		Accumulated Depletion or Amortization		Net		(in thousands)	Gross		Accumulated Depletion or Amortization		Net
Timber	Timber	$	278,361	$	29,112	$	249,249	Timber	$	185,449	$	18,260	$	167,189
Timberlands	Timberlands	327,089		—		327,089		Timberlands	298,777		—		298,777
Mainline roads	Mainline roads	1,176		834		342		Mainline roads	1,052		888		164
Timber and timberlands	Timber and timberlands	$	606,626	$	29,946	$	576,680	Timber and timberlands	$	485,278	$	19,148	$	466,130

Timberland Acquisition

On June 24, 2022, CatchMark acquired fee simple interests in approximately 1,300 acres of timberland in Alabama for $2.2 million, exclusive of transaction costs. The acquisition was funded with cash on-hand. CatchMark did not complete any timberland acquisitions during the three months and six months ended June 30, 2021.

Timberland Sales

During the three months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, CatchMark sold ~~1,000~~5,700 and ~~1,200~~4,300 acres of timberland for ~~$2.1~~$8.8 million and ~~$2.4~~$7.6 million, respectively. CatchMark's cost basis in the timberland sold was ~~$1.2~~$6.3 million and ~~$1.8~~$5.3 million, respectively.

During the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, CatchMark sold ~~7,100~~9,100 and ~~5,200~~6,100 acres of timberland for ~~$13.1~~$14.9 million and ~~$8.9~~$11.0 million, respectively. CatchMark's cost basis in the timberland sold was ~~$8.5~~$10.3 million and ~~$6.3~~$7.3 million, respectively.

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Large Dispositions

CatchMark ~~closed 2~~did not complete any large dispositions during the ~~nine~~six months ended ~~September~~June 30, ~~2021.~~ 2022. On June 23, 2021, CatchMark completed the sale of 5,000 acres of its wholly-owned timberlands in Georgia for ~~$7.5~~$7.5 million. CatchMark's cost basis was $6.6 million. CatchMark recognized a gain of $0.8 million from this large disposition. Of the total net proceeds, $7.3 million was used to pay down CatchMark's outstanding debt balance on the Multi-Draw Term Facility. On August 11, 2021, CatchMark completed the sale of approximately ~~18,100~~ acres of its wholly-owned timberlands in Oregon (the "Bandon Disposition") for $100.0 million. CatchMark's cost basis was $76.0 million. CatchMark recognized a gain of $23.4 million from the Bandon Disposition. Of the total net proceeds, $95.4 million was used to pay down CatchMark's outstanding debt balance on the Multi-Draw Term Facility and Term Loan A-3.

The disposition of the Bandon property was not considered a strategic shift that had or will have a major effect on CatchMark's operations or financial results and, therefore, did not meet the requirements for presentation as discontinued operations. Condensed income statement information for the Bandon property is as follows:

Three Months Ended
September 30, Nine Months Ended
September 30,
(in thousands) 2021 2020 2021 2020
Revenues $ 372 $ 2,676 $ 9,028 $ 6,181
Depletion expense $ 233 $ 1,583 $ 5,468 $ 4,084
Other operating expenses (1)
$ 357 $ 1,592 $ 5,875 $ 4,182
$ (218) $ (499) $ (2,315) $ (2,085)

~~(1)Excludes general and administrative expense and interest expense, which are not allocated to the property level.~~

~~CatchMark closed 1 large disposition during the nine months ended September 30, 2020~~. On January 31, 2020, CatchMark completed the sale of 14,400 acres of its wholly-owned timberlands for $21.3 million. CatchMark's cost basis was $19.6 million and CatchMark recognized a gain of $1.3 million on the disposition.

Timberland sales a~~nd large dispositions~~ acreage by state is listed below:


		Nine Months Ended September 30,			Six Months Ended June 30,
Acres Sold In	Acres Sold In	2021	2020	Acres Sold In	2022	2021
South				South
Timberland Sales	Timberland Sales			Timberland Sales
Alabama	Alabama	1,800	2,200	Alabama	800	1,600
Florida	Florida	500	—	Florida	—	500
Georgia	Georgia	4,700	1,500	Georgia	2,900	3,900
South Carolina	South Carolina	100	1,200	South Carolina	5,400	100
Tennessee		—	300
					9,100	6,100
		7,100	5,200
Large Dispositions	Large Dispositions			Large Dispositions
Georgia	Georgia	5,000	14,400	Georgia	—	5,000
Oregon		18,100	—
		23,100	14,400		—	5,000

Total	Total	30,200	19,600	Total	9,100	11,100

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Current Timberland Portfolio

As of ~~September~~June 30, ~~2021,~~2022, CatchMark directly owned fee-simple interests in ~~370,100~~348,100 acres of timberlands in the U.S. ~~South, 356,300 acres of which were fee-simple interests and 13,800 acres were leasehold interests.~~South. Land acreage by state is listed below:

Acres by state as of September 30, 2021 (1)
Fee Lease Total
Alabama 65,600 1,800 67,400
Georgia 221,100 12,000 233,100
South Carolina 69,600 — 69,600
Total 356,300 13,800 370,100


Acres by state as of June 30, 2022						Total
Alabama						65,900
Georgia						218,000
South Carolina						64,200
Total						348,100

~~(1)~~
~~Represents CatchMark wholly-owned acreage only; excludes ownership interest~~

CatchMark’s long-term lease, commonly referred to as the LTC lease and under which it held leasehold interests in ~~acreage held by joint ventures.~~timberland located in Georgia and Alabama, expired on May 31, 2022.

4. Unconsolidated Joint ~~Ventures~~

~~As of September 30, 2021, CatchMark owned interests in 2 joint ventures with unrelated parties: the Triple T Joint~~ Venture and the Dawsonville Bluffs Joint Venture (each as defined and described below). CatchMark accounts for these investments using the equity method of accounting. On October 14, 2021, CatchMark redeemed its interests in the Triple T Joint Venture (the "Triple T Exit"). See ~~Note 10 — Subsequent Events~~ ~~for further details.~~

~~Triple T Joint Venture~~

During 2018, CatchMark formed 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 at that time, in exchange for a common limited partnership interest. CatchMark, through a separate wholly-owned and consolidated subsidiary, was the sole general partner of the Triple T Joint Venture.

On June 24, 2020, CatchMark invested an additional $5.0 million of equity on the same terms and conditions as its existing investment in the Triple T Joint Venture in connection with amendments to the joint venture agreement and asset management agreement. The amended asset management agreement increased the asset management fee payable to CatchMark as described below in ~~Asset Management Fees~~. The amended joint venture agreement increased the 10.25% cumulative return on the Preferred Investors’ interests in the Triple T Joint Venture’s subsidiary REIT by 0.5% per quarter, subject to a maximum increase of 2.0% and subject to decreases in other circumstances. The proceeds of CatchMark’s additional $5.0 million investment, along with the proceeds from $140.0 million of borrowings under the Triple T Joint Venture’s secured, non-recourse credit facility, were used to make a payment of $145.0 million to GP in connection with an amendment to a wood supply agreement between the Triple T Joint Venture and GP.

CatchMark used the equity method to account for its investment in the Triple T Joint Venture since it did not possess the power to direct the activities that most significantly impact the economic performance of the Triple T Joint Venture, and accordingly, CatchMark did not possess the first characteristic of a primary beneficiary described in GAAP. CatchMark appointed 3 common board members of the Triple T Joint Venture, including its Chief Executive Officer, Chief Resources Officer and Vice President - Acquisitions, which provided CatchMark with significant influence over the Triple T Joint Venture. Accordingly, pursuant to the applicable accounting literature, it was 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 provided for liquidation rights and distribution priorities that were significantly different from CatchMark's stated ownership percentage based on total equity contributions. The Preferred Investors were entitled to a minimum 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 used 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

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~~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 applied HLBV using a balance sheet approach. A calculation was 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, was CatchMark's income or loss from the Triple T Joint Venture for the period.

On September 1, 2021, the Triple T Joint Venture sold 300,000 acres of its East Texas timberlands for $497 million, or approximately $1,656 per acre, to an entity that is a client of Hancock Natural Resource Group, Inc. (the "Hancock Disposition"). The Triple T Joint Venture's cost basis was $407.8 million and it recognized a gain of $78.8 million on the disposition. Despite the gain on the Hancock Disposition, CatchMark recognized no equity share of income from the Triple T Joint Venture for the three months and nine months ended September 30, 2021 due to CatchMark's subordinated common limited partnership interest.

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

As of
(in thousands) September 30, 2021 December 31, 2020
Triple T Joint Venture
Total assets $ 1,494,831 $ 1,547,344
Total liabilities $ 648,728 $ 763,715
Total equity $ 846,103 $ 783,629
CatchMark
Carrying value of investment $ — $ —

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

Three Months Ended
September 30, Nine Months Ended
September 30,
(in thousands) 2021 2020 2021 2020
Triple T Joint Venture
Total revenues $ 40,037 $ 44,222 $ 100,629 $ 114,091
Gain on large disposition $ 78,811 $ — $ 78,811 $ —
Net income (loss) $ 71,862 $ (9,973) $ 55,556 $ (25,636)
CatchMark
Equity share of income (loss) $ — $ (2,689) $ — $ (5,000)

~~As of December 31, 2020, CatchMark had recognized cumulative HLBV losses of $205.0 million, reducing the carrying value of its investment to zero.~~

On October 14, 2021, CatchMark entered into a recapitalization and redemption agreement with the Triple T Joint Venture and the Preferred Investors for the redemption of CatchMark's common equity interest in the Triple T Joint Venture. See ~~Note 10 — Subsequent Events~~ ~~for further details.~~

Dawsonville Bluffs Joint Venture

~~During 2017,~~ CatchMark formed the Dawsonville Bluffs ~~Joint Venture~~joint venture ("Dawsonville Bluffs") with MPERS ~~and~~in 2017 with each ~~owns~~owning 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~~account for its ~~investment. Income or loss~~investment in Dawsonville Bluffs. During the three months ended June 30, 2022 and 2021, CatchMark recognized $0.3 million and $0.05 million of equity income, respectively, from Dawsonville Bluffs. During the six months ended June 30, 2022 and 2021, CatchMark recognized $0.8 million and $0.7 million of equity income, respectively, from Dawsonville Bluffs. CatchMark received cash distributions ~~are allocated according to the provisions~~ of ~~the joint venture agreement, which are consistent with the ownership percentages~~$0.3 million and $0.3 million for the three months ended June 30, 2022 and 2021, respectively. For the six months ended June 30, 2022 and 2021, CatchMark received cash distributions of $0.4 million and $0.3 million, respectively, from Dawsonville Bluffs. As of June 30, 2022, the carrying value of CatchMark's investment in Dawsonville Bluffs ~~Joint Venture.~~

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was $1.7 million. As of ~~September~~June 30, ~~2021,~~ ~~the~~2022, Dawsonville Bluffs ~~Joint Venture~~ had a mitigation bank with a book basis of ~~$2.1~~$1.8 million remaining in its portfolio. ~~Condensed balance sheet information for the Dawsonville Bluffs Joint Venture is as follows:~~

As of
(in thousands) September 30, 2021 December 31, 2020
Dawsonville Bluffs Joint Venture
Total assets $ 2,666 $ 3,059
Total liabilities $ 11 $ 39
Total equity $ 2,655 $ 3,020
CatchMark
Carrying value of investment $ 1,327 $ 1,510

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

Three Months Ended
September 30, Nine Months Ended
September 30,
(in thousands) 2021 2020 2021 2020
Dawsonville Bluffs Joint Venture
Total revenues $ 228 $ 1,246 $ 2,126 $ 1,246
Net income (loss) $ (85) $ 790 $ 1,240 $ 546
CatchMark
Equity share of net income (loss) $ (43) $ 395 $ 620 $ 273

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

Nine Months Ended September 30,
(in thousands) 2021 2020
Dawsonville Joint Venture
Net cash provided by operating activities $ 1,634 $ 633
Net cash used in financing activities $ (1,605) $ (800)
Net change in cash and cash equivalents $ 29 $ (167)
Cash and cash equivalents, beginning of period $ 559 $ 1,441
Cash and cash equivalents, end of period $ 588 $ 1,274

~~For the nine months ended September 30, 2021 and 2020, CatchMark received cash distributions of $0.8 million and $0.4 million, respectively, from the Dawsonville Bluffs Joint Venture.~~

Asset Management Fees

CatchMark provides asset management services to Dawsonville Bluffs. Under the ~~Triple T Joint Venture and the Dawsonville Bluffs Joint Venture. Under these arrangements,~~arrangement, CatchMark oversees the day-to-day o~~perations~~operations of ~~these~~the joint ~~ventures and their properties,~~venture, including accounting, reporting and other administrative services, subject to certain major decisions that require partner approval.

On June 24, 2020, in connection with its additional $5.0 million equity investment in the Triple T Joint Venture, CatchMark entered into an amended and restated asset management agreement with the Triple T Joint Venture. Prior to this amendment, for management of the Triple T Joint Venture, CatchMark received a fee equal to 1% of the Acquisition Price multiplied by 78.4%. The amended asset management agreement provided that, effective June 24, 2020, CatchMark earned an asset management fee equal to 1% of (a) the sum of the Acquisition Price and the $145.0 million paid to GP, multiplied by (b) 78.4%, and in the event the Preferred Investors have not received a return

~~of their capital contributions plus their preferred return, then the asset management fee percentage decreased from 1% to 0.75% at October 1, 2021, and to 0.25% at July 1, 2022.~~

On October 14, 2021, the amended and restated asset management agreement was terminated and replaced by a transition services agreement, effective September 1, 2021, under which CatchMark will provide transition services through March 2022 in exchange for a one-time payment of $5.0 million in cash. CatchMark received the payment on October 14, 2021. See ~~Note 10 — Subsequent Events~~ ~~for further details.~~

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 first quarter of 2022, CatchMark provided transition services to Triple T under an agreement entered in October 2021. Under the transition services agreement, which was effective September 1, 2021 through March 31, 2022, CatchMark provided such services in exchange for a one-time payment of $5.0 million received in October 2021. This service fee was recognized as asset management fee revenue on a straight-line basis over the term of the transition services agreement. As of March 31, 2022, CatchMark had earned the service fee in full and the transition services agreement expired.

During the three mmonths and ~~onths and nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, CatchMark earned the following fees from ~~these~~its unconsolidated joint ventures:

Three Months Ended
September 30, Nine Months Ended
September 30,
(in thousands) 2021 2020 2021 2020
Triple T Joint Venture (1)
$ 2,789 $ 3,112 $ 9,013 $ 8,789
Dawsonville Bluffs Joint Venture (2)
195 6 300 161
$ 2,984 $ 3,118 $ 9,313 $ 8,950


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2022		2021		2022		2021
Triple T	$	—	$	3,112	$	2,143	$	6,224
Dawsonville Bluffs (1)	110		99		146		105
	$	110	$	3,211	$	2,289	$	6,329

(1)Includes $0.1 million ~~of reimbursements of compensation costs for each of the three months ended~~ ~~September 30, 2021~~and ~~2020. Includes $0.3 million and $0.4 million of reimbursements of compensation costs for the nine months ended~~ ~~September 30, 2021 and 2020, respectively.~~

~~(2)Includes $0.2~~$0.1 million of incentive-based promote earned for exceeding investment hurdles for the three months ended ~~September~~June 30, ~~2021.~~2022 and 2021, respectively. Includes ~~$0.3~~$0.1 million and $0.1 million of incentive-based promote for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, respectively.

5. Notes Payable and Lines of Credit

Amended Credit Agreement ~~Amendment~~

As of June 30, 2022, CatchMark iswas party to a credit agreement dated as of December 1, 2017, as amended on August 22, 2018, June 28, 2019, February 12, 2020, May 1, 2020, ~~and~~ August 4, 2021 and October 14, 2021 (the “Amended Credit Agreement”), with a syndicate of lenders including CoBank, which serves as the administrative ~~agent (the "Amended~~agent. The Amended Credit ~~Agreement").~~ ~~Prior to the amendment dated August 4, 2021 (the “Amendment”), the credit agreement provided~~Agreement provides for borrowing under credit facilities consisting of the following:

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

•~~a $150.0 million seven-year multi-draw term credit facility (the “Multi-Draw Term Facility”);~~

•~~a $100.0~~$84.7 million ten-year term loan (the “Term Loan A-1”);

•a ~~$100.0~~$89.7 million nine-year term loan (the “Term Loan A-2”);

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

•a ~~$140.0~~$125.6 million seven-year term loan (the "Term Loan A-4");

•a $150.0 million seven-year multi-draw term credit facility (the “Multi-Draw Term Facility”); and

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

~~The Amendment, a~~mong other things: (1) consented to CatchMark’s prepayment of the outstanding balance on its Multi-Draw Term Facility and Term Loan A-3 with the proceeds from the Bandon Disposition, and after the outstanding balance of any Multi-Draw Term Facility and Term Loan A-3 have been repaid in full, permits CatchMark to retain up to $5.0 million of such remaining proceeds for working capital purposes; (2) permits CatchMark, for a period of 18 months from the effective date of the Amendment, to, upon the repayment of the outstanding Term Loan A-3, reborrow Term Loan A-3 using borrowing mechanics substantially similar to those that apply to the Revolving Credit Facility, the proceeds of which shall be used solely to finance acquisitions of additional real property, all as set forth in the Amendment, with the same pricing and maturity date as the existing Term Loan A-3; and (3) extended the maturity date of the Revolving Credit Facility from December 1, 2022 to August 4, 2026.

CatchMark accounted for the Amendment as debt modification in accordance with ASC 470-50. Of the $322,000 financing costs incurred, $289,000 was deferred and, together with the existing deferred financing costs, is amortized

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~~over the remaining term of the respective facility. Approximately $33,000 of third-party related financing costs was expensed.~~

~~Credit Facilities~~

~~During the second and the third quarters of 2021, CatchMark repaid $7.3 million and $95.4 million, respectively, of its outstanding debt balances with net proceeds from large dispositions (see~~ ~~Note 3 — Timber Assets)~~. As of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, 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 September 30, 2021 December 31, 2020
Term Loan A-1 12/23/2024 LIBOR + 1.75% 1.83% $ 100,000 $ 100,000
Term Loan A-2 12/1/2026 LIBOR + 1.90% 1.98% 100,000 100,000
Term Loan A-3 12/1/2027 LIBOR + 2.00% —% — 68,619
Term Loan A-4 8/22/2025 LIBOR + 1.70% 1.78% 140,000 140,000
Multi-Draw Term Facility 12/1/2024 LIBOR + 1.90% —% — 34,086
Total principal balance $ 340,000 $ 442,705
Less: net unamortized deferred financing costs (2,165) (5,215)
Total $ 337,835 $ 437,490

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(in thousands)			Current Interest Rate (1)	Outstanding Balance as of
Credit Facility	Maturity Date	Interest Rate		June 30, 2022		December 31, 2021
Term Loan A-1	12/23/2024	LIBOR + 1.75%	3.42%	$	84,706	$	84,706
Term Loan A-2	12/1/2026	LIBOR + 1.90%	3.57%	89,706		89,706
Term Loan A-4	8/22/2025	LIBOR + 1.70%	3.37%	125,588		125,588
Total principal balance				$	300,000	$	300,000
Less: net unamortized deferred financing costs				(1,522)		(1,753)
Total				$	298,478	$	298,247

(1) As of June 30, 2022.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 ~~a result~~ of ~~reducing the Multi-Draw Term Facility and the Term Loan A~~June 30, 2022~~-3 balances to zero,~~, CatchMark ~~reclassified $2.5~~had $253.6 million of unamortized deferred financing costs from Notes Payable and Lines of Credit, where it was presented as a direct reduction from debt liabilities, to Deferred Financing Costs asset on the accompanying consolidated balance sheets.

~~As of September 30, 2021, CatchMark had access to additional~~ borrowing ~~of $253.6 million,~~capacity remaining under its credit facilities, consisting of ~~$35.0 million under the Revolving Credit Facility,~~ $150.0 million under the Multi-Draw Term Facility, ~~and~~ $68.6 million under Term Loan ~~A-3.~~A-3, and $35.0 million under the Revolving Credit Facility.

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 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.

~~On October 14, 2021,~~

Through February 2023, CatchMark ~~further amended~~may reborrow under the ~~Amended~~revolver feature of Term Loan A-3 using borrowing mechanics substantially similar to those that apply to the Revolving Credit ~~Agreement~~Facility with the same pricing and on ~~October 15, 2021,~~ ~~CatchMark paid down $40.0 million~~maturity date as the existing Term Loan A-3. Borrowings under the revolver feature of ~~its~~the Term Loan A-3 may be used solely to finance acquisitions of additional real property and pay associated expenses. The Term Loan A-3 bears interest at an adjustable rate equal to a base rate plus 1.00% or a LIBOR rate plus 2.00%, and will terminate and all amounts outstanding ~~debt balances with proceeds from~~under the ~~Triple T Exit transaction. See~~ ~~Note 10 — Subsequent Events~~ ~~for further details.~~facility will be due and payable on December 1, 2027.

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 ~~1.90%, in each case depending on CatchMark's LTV ratio, and will terminate and all amounts outstanding under the facility due and payable on August 4, 2026.~~

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 1.90%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.~~August 4, 2026.

CatchMark pays the lenders an unused commitment fee on the unused portions of the Multi-Draw Term Facility, Term Loan A-3, and 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. For the three months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021, CatchMark recognized ~~$0.2~~$0.1 million and $0.1 million of unused commitment fees as interest expense on its consolidated statements of operations, respectively. For ~~each of~~ the ~~nine~~six months ended June 30, 2022 and ~~September 30,~~ 2021 ~~and 2020,~~, CatchMark recognized ~~$0.4~~$0.3 million and $0.3 million of unused commitment fees as interest expense on its consolidated statements of operations, respectively.

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CatchMark’s obligations under the Amended 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, these obligations are jointly and severally guaranteed by CatchMark and all of its subsidiaries pursuant to the terms of the Amended Credit Agreement. CatchMark has also agreed to guarantee certain losses caused by certain willful acts of CatchMark or its subsidiaries.

Patronage Dividends

CatchMark is eligible to receive annual patronage 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 dividend on its eligible patronage loans annually since 2015. ~~The eligibility remains the same under the Amended Credit Agreement.~~ Therefore, CatchMark accrues patronage dividends it expects to receive based on ~~actual~~historical patronage ~~dividends received as a percentage of its weighted-average e~~dividend rates~~ligible debt balance.~~. For the three months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~ 2021,

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CatchMark accrued ~~$0.8~~$0.6 million and ~~$0.9~~$1.0 million, respectively, as ~~patronage dividends~~accounts receivable on its consolidated balance sheets and as an offset against interest expense on the consolidated statements of operations. For ~~each of~~ the ~~nine~~six months ended ~~September~~ June 30, ~~2021~~2022 and ~~2020,~~2021, CatchMark accrued ~~$2.7~~$1.3 million and $1.9 million, respectively, as ~~patronage dividends~~accounts receivable on its consolidated balance sheets and as an offset against interest expense on the consolidated statements of operations.

In March ~~2021,~~2022, CatchMark received patronage dividends of ~~$4.1~~$3.6 million on its patronage eligible borrowings. Of the total patronage dividends received, $3.1 million was received in cash and ~~$1.0~~$0.5 million was received in equity of the Patronage Banks.

As of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the following balances related to the patronage dividend program were included on CatchMark's consolidated balance sheets:


(in thousands)	(in thousands)	As of				(in thousands)	As of
Patronage dividends classified as:	Patronage dividends classified as:	September 30, 2021		December 31, 2020		Patronage dividends classified as:	June 30, 2022		December 31, 2021
Accounts receivable	Accounts receivable	$	2,727	$	3,597	Accounts receivable	$	1,265	$	3,392
Prepaid expenses and other assets (1)	Prepaid expenses and other assets (1)	4,311		3,335		Prepaid expenses and other assets (1)	4,774		4,311
Total	Total	$	7,038	$	6,932	Total	$	6,039	$	7,703

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

Debt Covenants

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

•limit the LTV ratio to no greater than 50% at any time;

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

•limit the ~~aggregated~~aggregate capital expenditures to no greater than 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 Amended Credit Agreement. However, if CatchMark has suffered a bankruptcy event or a change of control, the Amended 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 repayment of the debt upon a change in control and 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.~~See~~ ~~Note 10 — Subsequent Events~~ ~~for details of an amendment CatchMark entered into on October 14, 2021.~~

CatchMark was in compliance with the financial covenants of the Amended Credit Agreement as of ~~September~~June 30, ~~2021.~~2022.

Interest Paid and Fair Value of Outstanding Debt

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During the three months and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, CatchMark made the following cash interest payments on its borrowings:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	(in thousands)	2021		2020		2021		2020		(in thousands)	2022		2021		2022		2021
Cash paid for interest	Cash paid for interest	$	2,000	$	2,200	$	6,600	$	9,200	Cash paid for interest	$	2,000	$	2,300	$	3,600	$	4,600

Included in the interest payments for the three months ended ~~September~~ June 30, 2022 and 2021, were unused commitment fees of $0.1 ~~million. No unused commitment fee was paid during the three months ended September 30, 2020.~~million and $0.1 million, respectively. Included in the interest payments for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, were unused commitment fees of ~~$0.4~~$0.3 million and $0.3 million, respectively.

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As of ~~September~~June 30, ~~2021~~2022 an ~~and~~d December 31, ~~2020,~~2021, the weighted-average interest rate on CatchMark's borrowings, after consideration of its interest rate swaps (see Note 6 — Interest Rate Swaps), was ~~3.55%~~3.90% and ~~3.25%~~3.77%, respectively. After further consideration of expected patronage dividends, CatchMark's weighted-average interest rate as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020~~2021 was ~~2.70%~~3.05% and ~~2.45%~~2.92%, respectively.

As of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the fair value of CatchMark's outstanding debt approximated its book value. The fair value was estimated based on discounted cash flow analysis using the current market borrowing rates for similar types of borrowing arrangements as of the measurement dates.

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~~June 30, ~~2021,~~2022, CatchMark had 2 outstanding interest rate swaps with terms below:

(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

2.0830%

one-month LIBOR

75,000

275,000

As of ~~September~~June 30, ~~2021,~~2022, CatchMark’s interest rate swaps effectively fixed the interest rate on $275.0 million of its ~~$340.0~~$300.0 million variable-rate debt at 3.95%, inclusive of the applicable spread and before consideration of expected patronage 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.

All of CatchMark's outstanding interest rate swaps during the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 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~~June 30, ~~2021~~2022 and December 31, ~~2020:~~2021:

(in thousands) Estimated Fair Value as of
Instrument Type Balance Sheet Classification September 30, 2021 December 31, 2020
Derivatives designated as hedging instruments:
Interest rate swaps Other liabilities $ (17,279) $ (30,029)


(in thousands)		Estimated Fair Value as of
Instrument Type	Balance Sheet Classification	June 30, 2022		December 31, 2021
Derivatives designated as hedging instruments:
Interest rate swaps	Prepaid expenses and other assets	$	12,142	$	—
Interest rate swaps	Other liabilities	$	—	$	(14,277)

During the three months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, CatchMark recognized a change in fair value of its interest rate swaps of ~~$2.2~~$9.3 million and ~~$3.4~~$4.5 million as other comprehensive income and other comprehensive loss, respectively. During the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, CatchMark recognized a change in fair value of its interest rate swaps of ~~$12.8~~$26.6 million and $11.2 million as other comprehensive income, respectively.

Pursuant to the terms of its interest rate swaps, CatchMark paid $1.0 million and $1.4 million during the three months ended June 30, 2022 and ~~$24.2~~2021, respectively. For the six months ended June 30, 2022 and 2021, CatchMark paid $2.4 million ~~as other comprehensive~~ and $2.8 million, respectively.~~loss, respectively.~~

~~Table~~All amounts were included in interest expense in the consolidated statements of ~~Contents~~operations.

During the three months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, CatchMark reclassified ~~$0.2~~$0.1 million and ~~$0.4~~$0.3 million from accumulated other comprehensive income and accumulated other comprehensive loss, respectively, to interest expense related to the off-market swap value at hedge inception. During the ~~nine~~six months ended ~~September~~ June 30, ~~2021~~2022 and ~~2020,~~2021, CatchMark reclassified ~~$0.8~~$0.2 million and ~~$1.3~~$0.6 million from from accumulated other comprehensive ~~loss~~income to interest expense related to the off-market swap value at hedge inception. These reclassifications were netted with the market value adjustment to interest rate swaps in the consolidated statements of ~~comprehensive~~comprehensive income (loss).

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~~Pursuant to the terms of its interest rate swaps, CatchMark paid $1.5 million and $1.4 million during the three months ended September 30, 2021 and 2020, respectively. For the~~ ~~nine months ended September 30, 2021 and 2020, CatchMark paid~~ ~~$4.3 million and $2.9 million,~~ ~~respectively.~~ ~~All amounts were included in interest expense in the consolidated statements of operations.~~

As of ~~September~~June 30, ~~2021,~~2022, CatchMark estimated that approximately ~~$6.0~~$2.4 million will be reclassified from accumulated other comprehensive ~~loss~~income as an offset to interest expense over the next 12 months.

7. Commitments and Contingencies

Mahrt Timber Agreements

In connection with its acquisition of timberlands from WestRock in 2007, 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. 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.

For ~~2021,~~2022, WestRock is required to purchase, ~~a minimum of 380,800 tons~~ and we are ~~committed~~required to make available for purchase byto WestRock, a minimum of ~~443,200~~371,100 tons of timber under the Mahrt Timber Agreements. For the ~~nine~~six months ended ~~September~~ June 30, ~~2021,~~2022, WestRock purchased ~~303,000~~169,000 tons under the Mahrt Timber Agreements, which represented ~~12%~~11% of CatchMark's net timber sales revenue.

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 monthly 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, ~~2022,~~2023, and is automatically

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extended for 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 monthly 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, 2022 ~~for the U.S. South region~~and is automatically extended for one-year periods unless written notice is provided by

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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. The AFM Timberland Operating Agreement for the Pacific Northwest region terminated as of the close of the Bandon Disposition, except for limited administrative services which will terminate as of December 31, 2021.

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 ~~right-of-use (“ROU”)~~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. CatchMark recorded ~~$110,000~~$0.1 million and ~~$108,400~~$0.1 million of operating lease expense for the three months ended ~~September~~June 30, 2022 and 2021, ~~and 2020,~~ respectively. ~~For each of~~For the ~~nine~~ six months ended ~~September~~ June 30, ~~2021~~2022 and ~~2020,~~2021, CatchMark recorded ~~$328,000~~$0.2 million and ~~$325,000~~ $0.2 millionof operating lease expense, respectively. For the three months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, CatchMark paid ~~$105,000~~$0.1 million and ~~$100,000,~~$0.1 million, respectively, in cash for its office lease. For the ~~nine~~six months ended ~~September~~ June 30, ~~2021~~2022 and ~~2020,~~2021, CatchMark paid ~~$312,000 and $297,000, respectively,~~$0.2 million and $0.2 million, respectively, in cash for its office lease, which was included in operating cash flows on its consolidated statements of cash flows.

CatchMark had the following future annual payments for its operating lease as of ~~September~~June 30, ~~2021 and December 31, 2020:~~

As of
(in thousands)
September 30, 2021 December 31, 2020
Required payments
2021 $ 103 412
2022 424 424
2023 435 435
2024 447 447
2025 459 459
Thereafter 1,414 1,414
$ 3,282 $ 3,591
Less: imputed interest (503)
Operating lease liability $ 2,779
Remaining lease term (years) 7.2
Discount rate 4.58 %
2022:

~~CatchMark holds leasehold interests in 13,800~~ ~~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.

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~~As of September 30, 2021, CatchMark had the following future lease payments under the LTC Lease:~~

(in thousands) Required Payments
2021 $ 11
2022 261
$ 272


(dollar amounts in thousands)	Required Payments
Required payments
2022	$	212
2023	435
2024	447
2025	459
2026	472
Thereafter	942
	$	2,967
Less: imputed interest	(411)
Operating lease liability	$	2,556

Remaining lease term (years)	6.4
Discount rate	4.58		%

Litigation

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.

As of August 2, 2022, 1 lawsuit has been filed by an alleged CatchMark ~~is not currently involved~~stockholder against CatchMark and members of CatchMark’s board of directors challenging the Mergers.

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Please refer to Part II, Item 1. Legal Proceedings in ~~any legal proceedings of which the outcome is reasonably likely to have a material adverse effect~~this Quarterly Report on ~~the results of operations or financial condition of CatchMark.~~Form 10-Q for further information regarding this matter.

8. Noncontrolling Interests

CatchMark Timber Trust is the general partner of CatchMark Timber OP and owns 99.76% of its Common Units directly and indirectly. The remaining 0.24% of the Common Units are owned by current and former officers and directors of CatchMark (the "Limited Partners").

CatchMark Timber OP issues LTIP Units to certain officers, directors, and employees of CatchMark. LTIP Units are a class of units structured to qualify as “profits interests” for federal income tax purposes that, subject to certain conditions, including vesting, are convertible by the holder into the Common Units. The LTIP Units initially have no value and are not at parity with the Common Units with respect to liquidating distributions. Regular and other non-liquidating distributions are made by CatchMark Timber OP with respect to unvested LTIP Units as provided in the applicable award agreement for such units. Upon the occurrence of specified events, the LTIP Units can over time achieve partial to full parity with the Common Units.

Vested LTIP Units that have achieved full parity with the Common Units are automatically converted into the Common Units on a 1-for-one basis. Vested LTIP Units that have not achieved full parity with the Common Units may convert into the Common Units on less than a 1-for-one basis based on relative capital accounts. Limited partners holding Common Units, including those converted from LTIP Units, have the option to cause CatchMark Timber OP to redeem such units after the units have been held for one year. Unless CatchMark Timber Trust exercises its right to purchase the Common Units in exchange for shares of Common Stock, CatchMark Timber OP would redeem each such unit with cash equal to the value of 1 share of Common Stock.

CatchMark recognizes noncontrolling interests associated with the Common Units held by the Limited Partners and the LTIP Units in an amount equal to the cumulative compensation cost of such units. Upon any forfeiture of the LTIP Units, the associated noncontrolling interests is reclassified to additional paid-in capital. Upon the conversion of the LTIP Units to Common Units, noncontrolling interests is adjusted so that the book value of each newly converted Common Unit equals the book value of an existing Common Unit. Noncontrolling interests is subsequently adjusted by allocations of earnings and distributions paid.

For the three months ended June 30, 2022 and 2021, CatchMark recognized $0.3 million and $0.3 million in stock-based compensation expense, respectively, related to the Common Units held by the Limited Partners and the LTIP Units as noncontrolling interests. For the six months ended June 30, 2022 and 2021, CatchMark recognized $0.6 million and $0.5 million in stock-based compensation expense, respectively, related to the Common Units held by the Limited Partners and the LTIP Units as noncontrolling interests. During the six months ended June 30, 2022, no LTIP Units were converted to Common Units.

9. Stock-based Compensation

~~Long-Term Incentive Plans~~

On June 24, 2021, CatchMark's stockholders approved a long-term incentive plan (the "2021 Incentive Plan") at its 2021 annual meeting of stockholders. The 2021 Incentive Plan replaced CatchMark's 2017 long-term incentive plan. The 2021 Incentive Plan allows for the award of options, stock appreciation rights, restricted stock, RSUs, deferred stock units, performance awards, other stock-based awards, LTIP Units or any other right or interest relating to stock or cash to the employees, directors, and consultants of CatchMark or its affiliates. A total of 2.0 million shares of CatchMark's common stock are reserved and available for issuance pursuant to awards granted under the 2021 Incentive Plan.

~~Service-based Restricted Stock Grants to Employees~~

During the three months ended ~~September~~June 30, ~~2021~~,2022, CatchMark did not issue any ~~shares of service-based restricted stock to its employees. During the~~ ~~nine months ended~~ September 30, 2021, CatchMark granted 148,817 shares of service-based restricted stock to its employees, vesting in equal installments over a four-year period. The fair value of $1.6 million was determined based on the closing price of CatchMark's common stock on the grant date and is amortized evenly over the vesting period.equity awards, nor were any outstanding equity awards vested or forfeited.

A rollforward of CatchMark's unvested, service-based restricted stock awards to employees for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 is as follows:

Number of Shares
Weighted-Average
Grant Date
Fair Value
Unvested at December 31, 2020 374,822 $ 10.51
Granted 148,817 $ 10.77
Vested (124,745) $ 10.54
Forfeited (875) $ 10.74
Unvested at September 30, 2021 398,019 $ 10.60

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~~Performance-based Awards~~

~~During the three months ended~~ ~~September 30, 2021~~, CatchMark did not make any performance-based grants. On March 11, 2021, CatchMark granted 202,930 performance-based LTIP Units to its executive officers and 44,180 shares of performance-based restricted stock to its eligible officers (the "2021 Performance-based Grant"). The issuance represents the maximum number of LTIP Units or shares of restricted stock that could be earned based on the relative performance of CatchMark's TSR against pre-established benchmarks over a three-year performance period from January 1, 2021 to December 31, 2023. The total compensation cost of the 2021 Performance-based Grant was $1.5 million and will be amortized over a weighted-vesting period of 3.5 years.


	Number of Shares	Weighted-Average Grant Date Fair Value
Unvested at December 31, 2021	373,047	$	10.62
Granted	182,794	$	8.02
Vested	(130,886)	$	10.84
Forfeited	(5,500)	$	9.49
Unvested at June 30, 2022	419,455	$	9.43

A rollforward of CatchMark's unvested, performance-based LTIP Units grants for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 is as follows:

Number of Units
Weighted-Average
Grant Date
Fair Value
Unvested at December 31, 2020 349,703 $ 6.03
Granted 202,930 $ 6.26
Vested (7,705) $ 1.31
Forfeited (39,020) $ 1.82
Unvested at September 30, 2021 505,908 $ 6.52

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	Number of Units	Weighted-Average Grant Date Fair Value
Unvested at December 31, 2021	505,908	$	6.52
Granted	358,454	$	3.62
Vested	—	$	—
Forfeited	(105,862)	$	8.13
Unvested at June 30, 2022	758,500	$	4.92

A rollforward of CatchMark's unvested, performance-based restricted stock grants for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 is as follows:


		Number of Shares	Weighted-Average Grant Date Fair Value			Number of Shares	Weighted-Average Grant Date Fair Value
Unvested at December 31, 2020		31,526	$	4.90
Unvested at December 31, 2021					Unvested at December 31, 2021	67,769	$	6.14
Granted	Granted	44,180	$	6.26	Granted	232,222	$	3.62
Vested	Vested	—	$	—	Vested	—	$	—
Forfeited	Forfeited	(7,937)	$	1.84	Forfeited	—	$	—
Unvested at September 30, 2021		67,769	$	6.14
Unvested at June 30, 2022					Unvested at June 30, 2022	299,991	$	4.19

~~Equity Grants to Independent Directors~~

~~A rollforward of CatchMark's unvested restricted stock and LTIP Unit grants to the directors for the nine months ended September 30, 2021 is as follows:~~

Restricted Stock LTIP Units
Number of Shares
Weighted-Average
Grant Date
Fair Value
Number of Units
Weighted-Average
Grant Date
Fair Value
Unvested as of December 31, 2020 20,744 $ 8.17 25,302 $ 8.30
Granted 5,838 $ 11.99 23,353 $ 11.99
Vested (20,744) $ 8.17 (25,302) $ 8.30
Forfeited — $ — — $ —
Unvested as of September 30, 2021 5,838 $ 11.99 23,353 $ 11.99

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Stock-based Compensation Expense

A summary of CatchMark's stock-based compensation expense for the three months and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 is presented below:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	(in thousands)	2021		2020		2021		2020		(in thousands)	2022		2021		2022		2021
General and administrative expenses ~~(1)~~	General and administrative expenses ~~(1)~~	$	624	$	520	$	1,760	$	2,900	General and administrative expenses ~~(1)~~	$	688	$	624	$	1,368	$	1,136
Forestry management expenses	Forestry management expenses	142		110		392		307		Forestry management expenses	165		143		336		250
Total ~~(2)~~(1)	Total ~~(2)~~(1)	$	766	$	630	$	2,152	$	3,207	Total ~~(2)~~(1)	$	853	$	767	$	1,704	$	1,386

(1)The ~~nine~~three months ended ~~September~~June 30, ~~2020 includes $1.2 million of accelerated stock-based compensation expense related to the retirement of CatchMark's former CEO in January 2020.~~

~~(2)The three months~~2022 and ~~nine months ended September 30,~~ 2021 includes $0.3 million and ~~$0.9~~$0.3 million of stock-based compensation recognized as noncontrolling interest, respectively. The six months ended June 30, 2022 and 2021 includes $0.6 million and $0.5 million of stock-based compensation recognized as noncontrolling interest, respectively.

As of ~~September~~June 30, ~~2021,~~2022, approximately ~~$5.6~~$6.5 million of compensation expense related to unvested restricted stock and LTIP Units remained to be recognized over a weighted-average period of ~~2.4~~2.7 years.

9.10. Segment Information

As of ~~September~~June 30, ~~2021,~~2022, 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 are 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
September 30, Nine Months Ended
September 30,
(in thousands) 2021 2020 2021 2020
Harvest $ 16,967 $ 19,065 $ 59,275 $ 55,510
Real Estate 2,122 2,430 13,111 8,882
Investment Management 2,984 3,118 9,313 8,950
Total $ 22,073 $ 24,613 $ 81,699 $ 73,342

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	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2022		2021		2022		2021
Harvest	$	15,631	$	21,097	$	34,324	$	42,308
Real Estate	8,818		7,632		14,888		10,989
Investment Management	110		3,211		2,289		6,329
Total	$	24,559	$	31,940	$	51,501	$	59,626

Adjusted EBITDA is the primary performance measure reviewed by management to assess operating performance. The following table presents Adjusted EBITDA by reportable segment:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	(in thousands)	2021		2020		2021		2020		(in thousands)	2022		2021		2022		2021
Harvest	Harvest	$	7,077	$	8,502	$	25,371	$	24,497	Harvest	$	6,871	$	9,367	$	16,482	$	18,294
Real Estate	Real Estate	1,974		2,272		12,451		8,342		Real Estate	8,664		7,333		14,416		10,477
Investment Management	Investment Management	2,951		3,653		10,046		9,363		Investment Management	410		3,275		3,143		7,095
Corporate	Corporate	(2,138)		(2,028)		(7,490)		(7,479)		Corporate	(2,272)		(2,398)		(5,522)		(5,352)
Total	Total	$	9,864	$	12,399	$	40,378	$	34,723	Total	$	13,673	$	17,577	$	28,519	$	30,514

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


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	(in thousands)	2021		2020		2021		2020		(in thousands)	2022		2021		2022		2021
Adjusted EBITDA	Adjusted EBITDA	$	9,864	$	12,399	$	40,378	$	34,723	Adjusted EBITDA	$	13,673	$	17,577	$	28,519	$	30,514
Subtract:	Subtract:									Subtract:
Depletion	Depletion	4,560		7,286		18,942		20,934		Depletion	3,201		6,657		7,350		14,382
Interest expense (1)	Interest expense (1)	2,679		2,865		7,773		9,121		Interest expense (1)	2,397		2,752		4,508		5,094
Amortization (1)	Amortization (1)	577		747		1,846		2,621		Amortization (1)	412		636		835		1,269
Depletion, amortization, and basis of timberland and mitigation credits sold included in loss from unconsolidated joint venture (2)		10		140		113		140
Depletion, amortization, and basis of timberland and mitigation credits sold included in income from unconsolidated joint venture (2)										Depletion, amortization, and basis of timberland and mitigation credits sold included in income from unconsolidated joint venture (2)	40		15		104		103
Basis of timberland sold, lease terminations and other (3)	Basis of timberland sold, lease terminations and other (3)	1,165		1,991		8,832		6,988		Basis of timberland sold, lease terminations and other (3)	6,698		5,701		10,738		7,667
Stock-based compensation expense	Stock-based compensation expense	766		630		2,152		3,207		Stock-based compensation expense	853		767		1,704		1,386
Gain on large dispositions (4)	Gain on large dispositions (4)	(23,377)		—		(24,136)		(1,274)		Gain on large dispositions (4)	—		(759)		—		(759)
HLBV loss from unconsolidated joint venture (5)		—		2,689		—		5,000
Merger-related costs (5)										Merger-related costs (5)	4,595		—		4,595		—
Post-employment benefits (6)	Post-employment benefits (6)	11		10		34		2,307		Post-employment benefits (6)	—		7		8		23
Other (7)	Other (7)	165		190		312		260		Other (7)	36		48		52		147
Net income (loss)	Net income (loss)	$	23,308	$	(4,149)	$	24,510	$	(14,581)	Net income (loss)	$	(4,559)	$	1,753	$	(1,375)	$	1,202

(1)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 accompanying consolidated statements of operations.

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

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nature, are not part of core operations, and would cause material variances in comparative results if not reported separately.

(5)Reflects ~~HLBV losses from~~merger-related legal fees, consulting fees and other professional fees required to be expensed by GAAP that management believes do not directly reflect the ~~Triple T Joint Venture, which is determined based~~core business operations of its timberland portfolio on ~~a hypothetical liquidation of the underlying joint venture at book value as of the reporting date.~~an on-going basis.

(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 paid in installments over agreed-upon periods of time.

(7)Includes certain cash expenses paid, or reimbursement received, that management believes do not directly reflect the core business operations of ~~our~~its 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~~

~~Triple T Exit~~

~~On October 14,~~ 2021, CatchMark entered into a recapitalization and redemption agreement with the Triple T Joint Venture and the preferred limited partners of Triple T Joint Venture for the redemption of CatchMark’s common equity interests in the Triple T Joint Venture in exchange for $35.0 million in cash (the “Triple T Exit”). The amended and restated asset management agreement between CatchMark and the Triple T Joint Venture was terminated and replaced by a transition services agreement, effective September 1, 2021 through March 2022, under which CatchMark will provide transition services in exchange for a service fee of $5.0 million, which will be recognized as asset management fee revenue on a straight-line basis over the term of the transition services agreement.

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~~Credit Agreement Amendment and Debt Repayments~~

On October 14, 2021, CatchMark further amended the Amended Credit Agreement to, among other things, provide for consent to the Triple T Exit and permit CatchMark to retain the net proceeds from higher-and-better use timberland sales until it exceeds 3% of the aggregate value of the timberlands before any repayment of the outstanding debt is required.

~~On October~~ ~~15, 2021, CatchMark used the proceeds from the Triple T Exit of $35.0 million and the $5.0 million transition services fee to pay down $40.0 million of its outstanding debt balances as follows:~~

(dollar amounts in thousands) Repayments Outstanding
Balance as of
October 15, 2021
Credit Facility Maturity Date
Term Loan A-1 12/23/2024 $ 15,294 $ 84,706
Term Loan A-2 12/1/2026 10,294 89,706
Term Loan A-4 8/22/2025 14,412 125,588
Total $ 40,000 $ 300,000

~~Dividend Declaration~~

~~On October 15, 2021, CatchMark declared a cash dividend of $0.075 per share for its common stockholders of record on November 30, 2021, payable on December 15, 2021.~~

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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, ~~2020.~~2021.

Overview

We acquire and ~~own~~operate prime timberlands located in ~~high-demand~~leading U.S. mill markets. We manage our operations to generate highly predictable and stable cash flow from sustainable harvests, opportunistic land sales and asset management fees that covers our dividend throughout the business cycle. We actively manage our timberlands to achieve an optimum balance among biological timber growth, current harvest cash flow, and responsible environmental stewardship.

During the ~~third quarter of 2021,~~period ended June 30, 2022, we realized significant net timber sales price increases in our U.S. South region, 8% for pulpwood and 11% for sawtimber as compared to the prior year quarter. As a result, we generated a 1% increase in U.S. South timber sales revenue despite an 11% decrease in harvest volumes due to persistent wet weather conditions and recent capital recycling dispositions. Our stumpage prices in the U.S. South region maintained significant premiums over South-wide averages, a result of our micro-market advantages, and our timberlands continue to maintain consistent productivity on a per-acre basis.

We continuously assess potential alternative uses of our timberlands, as some of our properties may be more valuable for development, conservation, recreational or other rural purposes than for growing timber. In the third quarter of 2021, we sold 1,000 acres of timberland for ~~$2.1 million, or $2,029 per acre~~ ~~under our retail land sales program~~. Acres sold in the current quarter had lower average merchantable timber stocking than our portfolio average. 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, sub-optimal productivity characteristics, geographical procurement and operating areas, and/or timber reservation opportunities.

~~We also~~ continued to evaluate our portfolio for potential large dispositions under our capital recycling program whereby we sell blocks of timberland properties to generate proceeds to fund capital allocation priorities, including, but not limited to redeployment into more desirable timberland investments, paying down outstanding debt or repurchasing shares of our common stock. During the third quarter of 2021, we completed a large disposition of approximately 18,100 acres of prime Oregon timberlands, the Bandon Disposition, for $100.0 million, or $5,536 per acre, under our capital recycling program. The Bandon property was purchased in August 2018 for $88.8 million, or $4,916 per acre. We recognized a gain of $23.4 million on the Bandon Disposition and used net proceeds of $95.4 million to pay down outstanding debt. With the Bandon Disposition, we have concluded our capital recycling program involving large dispositions for now.

We generated significant asset management fee revenue through our investment management business. We recognized asset management fee revenue of $3.0 million during the quarter, including incentive-based promotes from the Dawsonville Bluffs Joint Venture, which had a mitigation bank with a book basis of $2.1 million as of September 30, 2021. In connection with the Triple T Exit, we entered into a transition services agreement pursuant to which we will continue to provide certain asset management services to the Triple T Joint Venture through the first quarter of 2022 in exchange for a $5 million service fee that was received on October 14, 2021.

~~We continue~~ to execute our three-pillar strategy of owning and investing in prime timberlands located in leading mill markets, and optimizing harvest operations through delivered wood sales and opportunistic stumpage sales. ~~Following~~After completing the ~~Bandon Disposition,~~disposition of our Pacific Northwest timberlands and exiting the Triple T joint venture in the second half of 2021, we ~~have further focused~~refocused our ownership and operations on the nation’s premier wood basket, the U.S. ~~South, where we seek~~South. We have sought to expand our presence in superior mill markets where we already have strong local relationships to strengthen our ~~industry-leading~~ Harvest EBITDA ~~per acre~~ while maintaining stable merchantable inventory per acre. ~~Our strategic investment opportunities include direct acquisition~~During the second quarter of ~~high-quality industrial~~2022, we acquired 1,300 acres of timberland ~~properties with a target average~~in Alabama for $2.2 million, exclusive of transaction size ranging from $5 million to $50 million and the development of new value creation opportunities such as carbon sequestration, wetlands mitigation banking, solar projects and other important environmental initiatives.

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We continue to have ample liquidity for growth initiatives and other capital allocation priorities. Our active debt and interest rate management strategy provides us attractive borrowing costs and staggered maturities. On August 4, 2021, we amended our credit agreement to, among other things, (i) establish a $68.6 million revolver feature on Term Loan A-3 and (ii) extend the maturity date of the existing Revolving Credit Facility from December 1, 2022 to August 4, 2026. This amendment allows us to deleverage by using proceeds from the Bandon Disposition to pay down our debt while improving available debt capacity for future growth, to extend our weighted-average life of debt, and to continue to improve our overall liquidity. On October 14, 2021, we further amended our credit agreement under which we are allowed to retain need proceeds from higher-and-better use timberland sales until it exceeds 3% of the aggregate value of our timberlands before any repayment of the outstanding debt is required. In addition to the $95.4 million debt repayment with net proceeds from the Bandon Disposition, o~~n October 15, 2021, we paid down an additional $40.0 million outstanding debt balance with proceeds received from the Triple T Exit and the transition services fees.~~costs.

Our U.S. South timber sales revenue decreased 10% during the second quarter of 2022 as compared to the prior year period as a result of planned harvest volume reductions, offset by a 10% increase in average blended sales pricing. Our sawtimber stumpage price increased 21% while pulpwood stumpage price decreased 5% from the second quarter of 2021. Our U.S. South stumpage prices continued to maintain significant premiums over South-wide averages a result of our local market advantages.

In the second quarter of 2022, we sold 5,700 acres of timberland for $8.8 million, or $1,564 per acre, under our retail land sales program. Acres sold in the current quarter were comprised of approximately 46% pine plantation, which was significantly lower than our portfolio average.

During the ~~third~~second quarter of ~~2021,~~2022, we paid ~~$6.5~~$3.6 million of distributions to our stockholders, which were fully covered by net cash provided by operating activities. We did not repurchase any shares of ~~our common stock~~Common Stock under our SRP during the quarter.

~~Impact of COVID-19 On Our Business~~Proposed Merger with PotlatchDeltic

~~COVID-19 has had a limited impact on our physical operations~~On May 29, 2022, we entered into the Merger Agreement with PotlatchDeltic and Merger Sub. Subject to ~~date. We have implemented new procedures to support~~ the ~~health~~terms and ~~safety~~conditions of the Merger Agreement, at the effective time of the Company Merger, each issued and outstanding share of our ~~employees~~Common Stock, other than Excluded Shares, will be converted into the right to receive 0.230 shares of common stock of PotlatchDeltic plus the right to receive cash in lieu of fractional shares of common stock of PotlatchDeltic (the "Merger Consideration"). At the effective time of the Partnership Merger, each of the issued and ~~we are following~~outstanding Common Units, other than Excluded OP Units, will automatically be converted into the right to receive the Merger Consideration. Our outstanding debt balances will become immediately due and payable upon the completion of the Mergers. It is expected that PotlatchDeltic will refinance or repay all ~~federal, state~~amounts due under the Amended Credit Agreement at closing. We expect the Mergers to close in the third quarter of 2022. Please refer to Note 1 — Organization to our accompanying consolidated financial statements for further details about the Merger Agreement and ~~local health department guidelines. The costs associated with these safety procedures were not material. The COVID-19 pandemic has not had a significant negative impact on our overall results.~~the Mergers.

~~It is possible~~As of June 30, 2022, we incurred $4.6 million of merger-related costs, which were included in general and administrative expenses on the ~~COVID-19 pandemic, particularly considering variant strains~~accompanying consolidated statement of ~~the virus, could further impact~~operations.

The discussion included below reflects our ~~operations and the operations of our customers and contractors~~business as a result of quarantines, facility closures, illnesses, and travel and logistic restrictions. The extent to which the COVID-19 pandemic impacts our business, results of operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limitedstand-alone company without regard to the ~~resumption of high levels of infection and hospitalizations,~~Merger Agreement or the resulting impact on our customers, contractors and vendors, remedial actions and stimulus measures adopted by federal, state and local governments, and the extent to which normal economic and operating conditions are impacted. Given the ongoing and dynamic nature of the circumstances, it is not possible to predict the future impact of the COVID-19 pandemic on our business. We believe we are well positioned to weather additional economic turmoil as a result of our deleveraging initiatives and other balance sheet strengthening undertaken over the last three years.Mergers.

Timberland Portfolio

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As of ~~September~~June 30, ~~2021,~~2022, we ~~wholly~~ owned ~~interests in 370,100~~348,100 acres of high-quality industrial timberland in the U.S. ~~South, consisting of 356,300 acres of fee timberlands and 13,800 acres of leased timberlands.~~South. Our ~~wholly-owned~~ timberlands are located within an attractive fiber ~~baskets encompassi~~ngbasket encompassing a diverse group of pulp, paper and wood products manufacturing facilities. Our timberlands consisted of 72% pine plantations by acreage and 55% sawtimber by volume.~~Our leased timberlands include 13,800 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 September 30, 2021 (1)
Fee Lease Total
Alabama 65,600 1,800 67,400
Georgia 221,100 12,000 233,100
South Carolina 69,600 — 69,600
Total 356,300 13,800 370,100

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


Acres by state as of June 30, 2022						Total
Alabama						65,900
Georgia						218,000
South Carolina						64,200
Total						348,100

As of ~~September~~June 30, ~~2021,~~2022, our ~~wholly-owned~~ timber inventory consisted of an estimated ~~14.2~~13.2 million tons of merchantable inventory with the following components:

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(in millions) Tons
Merchantable timber inventory (1)
Fee Lease Total
Pulpwood 6.1 0.2 6.3
Sawtimber (2)
7.6 0.3 7.9
Total 13.7 0.5 14.2


(in millions)
Merchantable timber inventory (tons) (1)						Total
Pulpwood						5.9
Sawtimber (2)						7.3
Total						13.2

(1)Merchantable timber inventory does not include current year growth.

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

In addition to our wholly-owned timberlands, we ~~had the following investments~~owned a 50% membership interest in ~~joint ventures~~Dawsonville Bluffs as of ~~September~~June 30, ~~2021~~2022 (see Note 4 — Unconsolidated Joint ~~Ventures~~Venture to our accompanying consolidated financial statements for further details):

As of September 30, 2021
Dawsonville Bluffs Joint Venture Triple T Joint Venture
Ownership percentage 50.0% 22.0% (1)
Acreage owned by the joint venture — 773,600
Merchantable timber inventory (million tons) — 30.1 (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.~~.

Segment Information

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 910 — Segment Information to our accompanying consolidated financial statements.

Timber A~~greements~~Agreements

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 ~~2021,~~2022, WestRock is required to purchase a minimum of ~~380,800~~371,100 tons of timber under the Mahrt Timber Agreements. For the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, WestRock purchased ~~303,000~~169,000 tons under the Mahrt Timber Agreements, which represented ~~12%~~11% 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 are party to a pulpwood supply agreement with IP (the "Carolinas Supply Agreement"). For full year ~~2021,~~2022, IP is required to purchase a minimum of ~~88,600~~50,000 tons of ~~pulpwood~~timber under the Carolinas Supply Agreement. During the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, we sold ~~68,700~~16,700 tons under the Carolinas Supply Agreement, which represented 3%1% of our net timber sales revenue.

Liquidity and Capital Resources

Overview

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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 authorized by our board of directors and is

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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 pay distributions to stockholders and partially fund timberland acquisitions. Therefore, to the extent that cash flows from operations are lower, whether as a result of a reduction in anticipated harvest amounts or timber sales, decreases in asset management fees or distributions from joint ventures, or otherwise, 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 have also ~~sell~~sold 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.~~ Common Stock. Such large dispositions are ~~typically larger~~not part of core operations, are infrequent in ~~size~~nature, and ~~more infrequent~~may or may not have a higher or better use than ~~sales~~timber production or result in a price premium above the land’s timber production value. Large timberland disposition opportunities under our ~~normal land sales~~capital recycling program have been evaluated based in part on inventory stocking and mix profiles, productivity characteristics, geographical diversification and procurement and operating areas. We currently have no plans to complete additional large dispositions under our capital recycling program.

Shelf Registration Statement and Equity Offerings

On February 28, 2020, we filed a shelf registration statement on Form S-3 (File No. 333-236793) with the SEC, which was declared effective on May 7, 2020. Our shelf registration statement provides us with ~~future flexibility~~the ability 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. On May 7, 2020, we entered into a distribution agreement with a group of sales agents relating to the sale from time to time of up to $75 million in shares of ~~our common stock~~Common Stock in at-the-market offerings or as otherwise agreed with the applicable sales agent, including in block transactions. These shares are registered with the SEC under our shelf registration statement. As of ~~September~~June 30, ~~2021,~~2022, we have not sold any shares of common stock under the distribution agreement.

Credit Facilities

The table below presents the details of each credit facility under the Amended Credit Agreement as of ~~September~~June 30, ~~2021~~2022:


(dollars in thousands)	(dollars in thousands)										(dollars in thousands)
Facility Name	Facility Name	Maturity Date	Interest Rate (1)	Unused Commitment Fee (1)	Total Capacity		Outstanding Balance		Remaining Capacity		Facility Name	Maturity Date	Interest Rate (1)	Unused Commitment Fee (1)	Total Capacity		Outstanding Balance		Remaining Capacity
Revolving Credit Facility		8/4/2026	LIBOR + 1.90%	0.30%	$	35,000	$	—	$	35,000
Multi-Draw Term Facility		12/1/2024	LIBOR + 1.90%	0.30%	150,000		—		150,000
Term Loan A-1	Term Loan A-1	12/23/2024	LIBOR + 1.75%	N/A	100,000		100,000		—		Term Loan A-1	12/23/2024	LIBOR + 1.75%	N/A	$	84,706	$	84,706	$	—
Term Loan A-2	Term Loan A-2	12/1/2026	LIBOR + 1.90%	N/A	100,000		100,000		—		Term Loan A-2	12/1/2026	LIBOR + 1.90%	N/A	89,706		89,706		—
Term Loan A-3 (2)	Term Loan A-3 (2)	12/1/2027	LIBOR + 2.00%	N/A	68,619		—		68,619		Term Loan A-3 (2)	12/1/2027	LIBOR + 2.00%	0.20%	68,619		—		68,619
Term Loan A-4	Term Loan A-4	8/22/2025	LIBOR + 1.70%	N/A	140,000		140,000		—		Term Loan A-4	8/22/2025	LIBOR + 1.70%	N/A	125,588		125,588		—
Multi-Draw Term Facility											Multi-Draw Term Facility	12/1/2024	LIBOR + 1.90%	0.20%	150,000		—		150,000
Revolving Credit Facility											Revolving Credit Facility	8/4/2026	LIBOR + 1.90%	0.20%	35,000		—		35,000
Total	Total				$	593,619	$	340,000	$	253,619	Total				$	553,619	$	300,000	$	253,619

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(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.

(2)Term Loan A-3 has an 18-month revolver feature ~~from August 4, 2021, the effective date of the Amendment,~~ through February 4, 2023.

~~Borrowings~~Borrowing under 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 Common Stock, and to reimburse payments of drafts under letters of credit. The revolver feature of Term Loan A-3 may be used solely to finance timberland acquisitions and associated expenses. 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

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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.

~~On October 15, 2021, we paid down an additional $40.0 million of our debt balance with proceeds received from the Triple T Exit, bringing our total debt balance outstanding to $300.0 million.~~

Patronage Dividends

We are eligible to receive annual patronage dividends from ~~our lenders,~~ the Patronage Banks under the Amended Credit Agreement. The annual patronage dividend depends on the weighted-average patronage-eligible debt balance with each participating lender during the respective fiscal year, as calculated by CoBank, as well as the financial performance of the Patronage Banks.

In March ~~2021,~~2022, we received patronage dividends of ~~$4.1~~$3.6 million ~~including $3.9~~on our patronage eligible borrowings. Of the total patronage dividends received in March 2022, $3.5 million ofwas standard patronage dividends and ~~a $0.2~~$0.1 million was special patronage ~~dividend. 75%~~dividends. Approximately 87% of the standard patronage dividends was received in cash and the remaining ~~25%~~13% was received in equity of the Patronage Banks. The equity component of the patronage dividend is redeemable for cash only at the discretion of the Patronage Banks' board of directors. The special patronage dividend was received in cash. For the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, we accrued $~~2.7~~1.3 million of patronage dividends receivable for ~~2021,~~2022, approximately 75% to 85% of which is expected to be received in cash in March ~~2022.~~2023.

Debt Covenants

As of ~~September~~June 30, ~~2021,~~2022, the Amended Credit Agreement contains, among others, the following financial covenants which:

•limit the LTV ratio to 50% at any time;

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

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

We were in compliance with the financial covenants of the Amended Credit Agreement as of ~~September~~June 30, ~~2021.~~2022.

Interest Rate Swaps

As of ~~September~~June 30, ~~2021,~~2022, we had two outstanding interest rate swaps, which effectively fixed the interest rate on $275.0 million of our ~~$340.0~~$300.0 million variable-rate debt at 3.95%, inclusive of the applicable spread but before considering patronage dividends. See Note 6 — Interest Rate Swaps to our accompanying financial statements for further details on our interest rate swaps.

Share Repurchase Program

On August 7, 2015, our board of directors approved a share repurchase program for up to $30.0 million of ~~our common stock~~Common Stock at management's discretion (the "SRP"). The program has no set duration and the board may discontinue or suspend the program at any time. During the three months ended ~~September~~June 30, ~~2021,~~2022, we did not repurchase any share of ~~our common stock~~Common Stock under the SRP. As of ~~September~~June 30, ~~2021,~~2022, we had ~~48.9~~49.2 million shares of ~~common stock~~Common Stock outstanding and may repurchase up to an additional $13.7 million under the SRP. We can borrow up to $30.0 million under the Multi-Draw Term Facility to repurchase ~~our common stock. Management believes that opportunistic~~Common Stock. To date, all share repurchases ~~of our common stock are a prudent use of capital resources.~~under the SRP have been funded with cash on-hand.

Short-Term Liquidity and Capital Resources

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Net cash provided by operating activities for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 was ~~$36.9~~$26.2 million, ~~$9.2~~$3.8 million ~~higher~~lower than the ~~nine~~six months ended ~~September~~June 30, ~~2020.~~2021. Cash provided by operating activities consisted primarily of ~~receipts~~proceeds from ~~customers for~~ timber sales, timberland sales, and asset management fees, reduced by payments for operating costs, general and administrative expenses, and interest expense. The ~~increase~~decrease in net cash provided by operating activities was due to a $4.7 million increase in general and administrative expenses primarily due to merger-related costs, a ~~$4.1~~$4.0 million decrease in asset management fees, and a $2.9 million decrease in net timber sales, offset by a $3.9 million increase in net proceeds from timberland sales, a ~~$1.4 million increase in net timber sales, a $2.8 million decrease in cash paid for interest, and a $2.3 million~~

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~~decrease in general and administrative expenses, offset by a $0.8~~$2.2 million change in working capital due to timing of receipts and payments (including $3.2 million of accrued general and administrative expenses related to the Mergers), a $1.0 million decrease in cash interest paid, and a ~~$0.6~~$0.7 million ~~increase~~decrease in other operating expenses.

Net cash ~~provided by~~used in investing activities for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 was ~~$103.6~~$5.3 million ~~$92.0~~as compared to $4.3 million ~~higher than the nine months ended September 30, 2020. Net cash~~ provided by investing activities for the prior year period. We incurred $3.0 million of capital expenditures and used $2.3 million to acquire 1,300 acres of timberland in Alabama during the ~~current~~six months ended June 30, 2022. In the prior year ~~were generated primarily from large dispositions, including the Bandon Disposition that closed in the third quarter 2021. We~~period, we received ~~$85.9~~$7.3 million ~~more~~ in gross proceeds from large dispositions ~~$0.7 million more in cash distributions from the Dawsonville Bluffs Joint Venture,~~ and incurred ~~$0.4~~$3.3 million ~~less in~~of capital ~~expenditures during the nine months ended September 30, 2021.~~expenditures.

Net cash used in financing activities for the ~~nine~~six months ended ~~September~~June 30, 2022 was $10.2 million, $13.8 million lower than the six months ended June 30, 2021, primarily due to making no debt repayments and lower cash distributions in the current year period. We made $7.3 million of cash distributions during the six months ended June 30, 2022, which was ~~$127.9 million~~fully funded from net cash provided by operating activities, as compared to ~~$42.8~~$13.1 million ~~for~~in the ~~nine months ended September 30, 2020. We~~prior year period. In 2021, we also paid down ~~$102.7~~$7.3 million of our outstanding debt balance on ~~the Term Loan A-3 and~~ the Multi-Draw Term Facility with net proceeds received from large dispositions. We paid cash distributions of $19.7 million to our stockholders in the current year period, funded from net cash provided by operating activities. We paid $4.3 million in interest expense pursuant to the terms of our interest rate swaps, used $0.8 million to repurchase shares of our common stock for tax withholding purposes, and paid $0.3 million in deferred financing costs in connection with our credit agreement amendment in August 2021. During the same period of 2020, we paid down $20.9 million of our outstanding debt balance on the Multi-Draw Term Facility, we repurchased $3.4 million of shares of our common stock, paid $2.9 million in interest expense pursuant to the terms of our interest rate swaps, and paid $1.0 million of deferred financing costs, of which $0.9 million was paid in connection with the amendment to our credit agreement in May 2020.

We believe that 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 become due over the next 12 months. As of ~~September~~June 30, ~~2021,~~2022, we had a cash balance of ~~$24.6~~$33.7 million and had access to $253.6 million of additional borrowing capacity under the Amended Credit Agreement.

Long-Term Liquidity and Capital Resources

~~Over~~We expect the Mergers to close in the third quarter of 2022. In the event that the Mergers do not close or do not close in the timeframe currently contemplated, over the long-term, we expect our primary sources of capital to include net cash flows from operations, including proceeds from timber sales, timberland sales, revenues generated from environmental initiatives, and from other capital raising activities, including proceeds from secured or unsecured financings from banks and other lenders; and public offerings of equity or debt securities. Our principal demands for capital include operating expenses, interest expense on any outstanding indebtedness, repayment of debt, timberland acquisitions, certain other capital expenditures, and stockholder distributions. Access to borrowing capacity under our Amended Credit Agreement depends on continued compliance with debt covenants, which can be impacted by any reduction in the value of our timberlands and reductions in cash flows from operations.

Distributions

Our board of directors has authorized cash distributions quarterly. The amount of future distributions that we may pay will be determined by our board of directors as described in Overview section above. During the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, we declared the following distributions:

Declaration Date

Record Date

Payment Date

Distribution Per Share

February ~~11, 2021~~10, 2022

February ~~26, 2021~~28, 2022

March 15, ~~2021~~2022

$~~0.135~~0.075

May ~~6, 2021~~5, 2022

May ~~28, 2021~~31, 2022

June 15, ~~2021~~2022

$~~0.135~~

~~August 5, 2021~~

~~August 31, 2021~~

~~September 15, 2021~~

~~$0.135~~0.075

For the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, we paid total distributions of $~~19.7~~7.3 million. The distributions were funded from net cash provided by operating ~~activities.~~activities.

~~On October 15, 2021, we declared a cash dividend of $0.075 per share for our common stockholders of record on November 30, 2021, payable on December 15, 2021.~~

~~Table of Contents~~

Results of Operations

Overview

Table of Contents

Our results of operations are materially impacted by the fluctuating nature of timber prices, changes in the levels and mix of our harvest volumes and associated contract logging and hauling costs and depletion expense, changes to associated depletion rates, the level of timberland sales, management fees earned, large dispositions, general and administrative expenses, varying interest expense based on the amount and cost of outstanding borrowings, and performance of our unconsolidated joint ~~ventures.~~venture.

Selected operational results for the three months and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 are shown in the following ~~tables~~table (dollar amounts in thousands, except for per-acre/per-ton amounts):


		Three Months Ended September 30,						Change			Three Months Ended June 30,						Change
		2021			2020			%			2022			2021			%
Consolidated	Consolidated									Consolidated
Timber sales revenue	Timber sales revenue	$	15,850		$	18,060		(12)	%	Timber sales revenue	$	14,679		$	20,111		(27)	%
Timberland sales revenue	Timberland sales revenue	$	2,122		$	2,430		(13)	%	Timberland sales revenue	$	8,818		$	7,632		16	%
Asset management fees revenue	Asset management fees revenue	$	2,984		$	3,118		(4)	%	Asset management fees revenue	$	110		$	3,211		(97)	%

Timber sales volume (tons)	Timber sales volume (tons)									Timber sales volume (tons)
Pulpwood	Pulpwood	286,010			349,405			(18)	%	Pulpwood	235,730			299,789			(21)	%
Sawtimber (1)	Sawtimber (1)	208,182			231,123			(10)	%	Sawtimber (1)	164,132			228,218			(28)	%
		494,192			580,528			(15)	%		399,862			528,007			(24)	%

U.S. South	U.S. South									U.S. South
Timber sales revenue	Timber sales revenue	$	15,478		$	15,385		1	%	Timber sales revenue	$	14,679		$	16,400		(10)	%

Timber sales volume (tons)	Timber sales volume (tons)									Timber sales volume (tons)
Pulpwood	Pulpwood	285,520			346,043			(17)	%	Pulpwood	235,730			296,993			(21)	%
Sawtimber (1)	Sawtimber (1)	204,573			206,495			(1)	%	Sawtimber (1)	164,132			193,882			(15)	%
		490,093			552,538			(11)	%		399,862			490,875			(19)	%

Harvest Mix	Harvest Mix									Harvest Mix
Pulpwood	Pulpwood	58		%	63		%			Pulpwood	59		%	61		%
Sawtimber (1)	Sawtimber (1)	42		%	37		%			Sawtimber (1)	41		%	39		%
Delivered % as of total volume	Delivered % as of total volume	70		%	63		%			Delivered % as of total volume	70		%	77		%
Stumpage % as of total volume	Stumpage % as of total volume	30		%	37		%			Stumpage % as of total volume	30		%	23		%

Net timber sales price (per ton) (2)	Net timber sales price (per ton) (2)									Net timber sales price (per ton) (2)
Pulpwood	Pulpwood	$	14		$	13		8	%	Pulpwood	$	14		$	15		(5)	%
Sawtimber (1)	Sawtimber (1)	$	25		$	22		11	%	Sawtimber (1)	$	31		$	26		21	%

Timberland acquisition										Timberland acquisition
Gross acquisition (3)										Gross acquisition (3)	$	2,200		$	—
Acres acquired										Acres acquired	1,300			—
Price per acre (3)										Price per acre (3)	$	1,653		$	—

Timberland sales	Timberland sales									Timberland sales
Gross sales	Gross sales	$	2,122		$	2,430		(13)	%	Gross sales	$	8,818		$	7,632		16	%
Acres sold	Acres sold	1,000			1,200			(17)	%	Acres sold	5,700			4,300			29	%
% of fee acres	% of fee acres	0.3		%	0.3		%			% of fee acres	1.6		%	1.2		%
Price per acre (3)		$	2,029		$	2,047		(1)	%

Pacific Northwest

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Price per acre (4)										Price per acre (4)	$	1,564	$	1,743	(10)	%

Large Dispositions (5)										Large Dispositions (5)
Gross sales										Gross sales	$	—	$	7,536
Acres sold										Acres sold	—		5,000
Price per acre										Price per acre	$	—	$	1,522
Gain on large dispositions										Gain on large dispositions	$	—	$	759

Pacific Northwest (6)										Pacific Northwest (6)
Timber sales revenue	Timber sales revenue	$	372		$	2,675		(86)	%	Timber sales revenue	$	—	$	3,711	(100)	%

Timber sales volume (tons)	Timber sales volume (tons)									Timber sales volume (tons)
Pulpwood	Pulpwood	490			3,362			(85)	%	Pulpwood	—		2,796		(100)	%
Sawtimber	Sawtimber	3,609			24,628			(85)	%	Sawtimber	—		34,336		(100)	%
		4,099			27,990			(85)	%		—		37,132		(100)	%

Harvest Mix
Pulpwood		12		%	12		%
Sawtimber		88		%	88		%
Delivered % as of total volume		100		%	100		%
Stumpage % as of total volume		—		%	—		%

Delivered timber sales price (per ton) (2)(5)
Pulpwood		$	33		$	28		17	%
Sawtimber		$	99		$	105		(6)	%

Large Dispositions (4)
Gross sales		$	100,000		$	—
Acres sold		18,100			—
Price per acre		$	5,536		$	—
Gain on large dispositions		$	23,377		$	—

(1)Includes chip-n-saw and sawtimber.

(2)Prices per ton are rounded to the nearest dollar.

(3)Exclusive of transaction costs.

(4)Excludes value of timber reservations, which retained ~~5,000~~32,000 tons and ~~8,000~~49,000 tons of merchantable inventory, respectively, with a sawtimber mix of ~~47%~~45% and ~~pulpwood mix of 100%~~32%, respectively, for the three months ended ~~September~~June 30, ~~2021~~2022 and ~~2020.~~2021.

~~(4)~~(5)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 are typically larger transactions in acreage and gross sales price than recurring HBU sales and are not part of core operations, are infrequent in nature and would cause material variances in comparative results if not reported separately. Large dispositions may or may not have a higher or better use than timber production or result in a price premium above the land’s timber production value.

~~(5)~~(6)~~Shown on a delivered basis which includes contract logging and hauling costs.~~Exited the Pacific Northwest in August 2021.


		Nine Months Ended September 30,				Change			Six Months Ended June 30,				Change
		2021		2020		%			2022		2021		%
Consolidated	Consolidated							Consolidated
Timber sales revenue	Timber sales revenue	$	56,110	$	52,399	7	%	Timber sales revenue	$	32,402	$	40,260	(20)	%
Timberland sales revenue	Timberland sales revenue	$	13,111	$	8,882	48	%	Timberland sales revenue	$	14,888	$	10,989	35	%
Asset management fees revenue	Asset management fees revenue	$	9,313	$	8,950	4	%	Asset management fees revenue	$	2,289	$	6,329	(64)	%

Timber sales volume (tons)	Timber sales volume (tons)							Timber sales volume (tons)
Pulpwood	Pulpwood	859,140		1,028,075		(16)	%	Pulpwood	463,408		573,130		(19)	%
Sawtimber (1)	Sawtimber (1)	687,821		715,255		(4)	%	Sawtimber (1)	405,062		479,639		(16)	%
		1,546,961		1,743,330		(11)	%		868,470		1,052,769		(18)	%

U.S. South	U.S. South							U.S. South
Timber sales revenue								Timber sales revenue	$	32,402	$	31,607	3	%

Timber sales volume (tons)								Timber sales volume (tons)
Pulpwood								Pulpwood	463,408		568,182		(18)	%
Sawtimber (1)								Sawtimber (1)	405,062		398,458		2	%
									868,470		966,640		(10)	%

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Timber sales revenue $ 47,085 $ 46,222 2 %
Timber sales volume (tons)
Pulpwood 853,702 1,017,617 (16) %
Sawtimber (1)
603,031 651,509 (7) %
1,456,733 1,669,126 (13) %
Harvest Mix
Pulpwood 59 % 61 %
Sawtimber (1)
41 % 39 %
Delivered % as of total volume 74 % 62 %
Stumpage % as of total volume 26 % 38 %
Net timber sales price (per ton) (2)
Pulpwood $ 14 $ 13 8 %
Sawtimber (1)
$ 25 $ 23 11 %
Timberland sales
Gross sales $ 13,111 $ 8,882 48 %
Acres sold 7,100 5,200 37 %
% of fee acres 1.9 % 1.3 %
Price per acre (3)
$ 1,828 $ 1,710 7 %
Large Dispositions (4)
Gross sales $ 7,536 $ 21,250 (65) %
Acres sold 5,000 14,400 (65) %
Price per acre (6)
$ 1,522 $ 1,474 3 %
Gain on large dispositions $ 759 $ 1,274 (40) %
Pacific Northwest
Timber sales revenue $ 9,025 $ 6,177 46 %
Timber sales volume (tons)
Pulpwood 5,438 10,458 (48) %
Sawtimber 84,790 63,746 33 %
90,228 74,204 22 %
Harvest Mix
Pulpwood 6 % 14 %
Sawtimber 94 % 86 %
Delivered % as of total volume 100 % 95 %
Stumpage % as of total volume — % 5 %
Delivered timber sales price (per ton) (2)(5)
Pulpwood $ 31 $ 30 3 %
Sawtimber $ 104 $ 94 11 %

~~Table of Contents~~

~~Large Dispositions~~ ~~(4)~~

~~Gross sales~~

~~100,000~~

—

~~Acres sold~~

~~18,100~~

—

~~Price per acre~~

~~5,536~~

—

~~Gain on large dispositions~~

~~23,377~~

—


Harvest Mix
Pulpwood	53		%	59		%
Sawtimber (1)	47		%	41		%
Delivered % as of total volume	68		%	76		%
Stumpage % as of total volume	32		%	24		%

Net timber sales price (per ton) (2)
Pulpwood	$	15		$	15		1	%
Sawtimber (1)	$	32		$	25		26	%

Timberland acquisition
Gross acquisition (3)	$	2,200		$	—
Acres acquired	1,300			—
Price per acre (3)	$	1,653		$	—

Timberland sales
Gross sales	$	14,888		$	10,989		35	%
Acres sold	9,100			6,100			48	%
% of fee acres	2.6		%	1.6		%
Price per acre (4)	$	1,642		$	1,794		(8)	%

Large Dispositions (5)
Gross sales	$	—		$	7,536
Acres sold	—			5,000
Price per acre	$	—		$	1,522
Gain on large dispositions	$	—		$	759

Pacific Northwest (6)
Timber sales revenue	$	—		$	8,653		(100)	%

Timber sales volume (tons)
Pulpwood	—			4,948			(100)	%
Sawtimber	—			81,181			(100)	%
	—			86,129			(100)	%

(1)Includes chip-n-saw and sawtimber.

(2)Prices per ton are rounded to the nearest dollar.

(3)Exclusive of transaction costs.

(4)Excludes value of timber reservations, which retained ~~63,900~~50,000 tons and ~~123,000~~59,000 tons of merchantable inventory, respectively, with a sawtimber mix of ~~37%~~58% and ~~48%~~36%, respectively, for the ~~three~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020.~~2021.

~~(5)Shown on a delivered basis which includes contract logging and hauling costs.~~

(6)~~Excludes value of timber reservations, which retained 56,300 tons of merchantable inventory, with a sawtimber mix of 55% for the nine months ended September 30, 2020.~~

Our current quarter results reflected the impact from the Bandon Disposition closed in August 2021, where we recognized a gain of $23.4 million from the sale of approximately 18,100 acres of prime Oregon timberlands. As a result of this disposition, timber sales revenue, contract logging and hauling costs, and depletion derived fromExited the Pacific Northwest ~~for the current year quarter were all significantly lower than the prior year quarter.~~in August 2021.

Our timber sales revenue totaled $14.7 million for the three months ended June 30, 2022, a $5.4 million decrease from the prior year quarter mainly due to a $3.7 million decrease as a result of selling our Pacific Northwest property

Table of Contents

in August 2021 and a $1.7 million decrease in the U.S. South ~~increased 1% as compared to the prior year quarter as a result of strong pricing in both pulpwood and sawtimber, despite an 11% reduction in harvest volume~~ due to ~~persistent wet weather conditions during the quarter. Our harvest volumes from the U.S. South, after taking into consideration the recent timberland sales~~planned volume reduction and ~~capital recycling dispositions, continues to reflect consistent productivity on~~ a ~~per-acre basis.~~ lower mix of delivered sales.

Our realized ~~stumpage prices~~net timber sales price increased 21% for sawtimber and decreased 5% for pulpwood, ~~and sawtimber were 8% and 11% higher,~~ respectively, ~~compared to~~from the prior year quarter, and ~~held~~continued to hold a significant premium over TimberMart-South South-wide averages as a result of operating in strong ~~micro-markets~~local markets where we selectively assembled our prime timberlands portfolio. ~~Overall, we remain on track to meet our full year harvest plan for 2021 despite the Bandon Disposition.~~

~~Comparison~~During the second quarter of 2022, we generated $8.8 million of timberland sales revenue.

Comparison of the three months ended ~~September~~June 30, ~~2021~~2022 versus the three months ended ~~September~~June 30, ~~2020~~2021

Revenues. ~~Revenues~~Revenues for the three months ended ~~September~~June 30, ~~2021~~2022 were ~~$22.1~~$24.6 million ~~$2.5~~, $7.4 million lower than the three months ended ~~September~~June 30, ~~2020~~2021 as a result of a ~~$2.2~~$5.4 million decrease in timber sales and a ~~$0.3~~$3.1 million decrease in asset management fees, offset by a $1.2 million increase in timberland sales revenue. Timber sales revenue was lower in the current year quarter due to a $3.7 million decrease that resulted from the disposition of our Pacific Northwest property in August 2021 and a $1.7 million decrease in ~~timberland sales revenue.~~ ~~Timber sales revenue from the Pacific Northwest decreased $2.3 million due to the Bandon Disposition while staying consistent in~~ the U.S. ~~South.~~South, driven by a 19% decrease in harvest volume, as planned. Timberland sales revenue ~~decreased~~increased due to selling ~~fewer acres.~~more acres in the second quarter of 2022 as compared to the prior year period. Timberland sales price per acre was 10% lower than the prior year period due to current quarter sales having lower productivity characteristics, primarily a significantly lower percentage of pine plantations. Acres sold in the current period also had ~~an average~~a lower average merchantable timber stocking ~~of 32 tons per acre which was lower~~ than our portfolio average of 4139 tons per ~~acre.~~acre at the beginning of the year. Asset management fees decreased as a result of exiting Triple T in 2021.

Details of timber sales revenue by product for the three months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 are shown in the following table:

Three Months Ended
September 30, 2020 Changes attributable to: Three Months Ended
September 30, 2021
(in thousands) Price/Mix Volume
Timber sales (1)
Pulpwood $ 8,499 $ 457 $ (1,131) $ 7,825
Sawtimber (2)
9,561 538 (2,074) 8,025
$ 18,060 $ 995 $ (3,205) $ 15,850

~~(1)Timber sales are presented on a gross basis.~~

~~Table of Contents~~

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

~~Operating Expenses.~~ Contract logging and hauling costs were $6.7 million for the three months ended September 30, 2021, $1.0 million lower than prior year period, primarily due to a $1.2 million decrease in the Pacific Northwest, partially offset by a $0.2 million increase in the U.S. South. Our blended logging rates in the U.S. South increased 6% compared to the prior year quarter primarily as a result of higher fuel and labor costs as well as more swamp logging activities in the current year quarter. However, these increased costs were largely offset by higher negotiated delivered wood sales prices, which allowed us to maintain stumpage values.

~~Depletion expense was~~ $4.6 million for the three months ended September 30, 2021, $2.7 million lower than the three months ended September 30, 2020 due to a $1.4 million decrease in the U.S. South as a result of lower harvest volume due to persistent wet weather and a $1.3 million decrease in the Pacific Northwest as a result of the Bandon Disposition in August 2021.

Cost of timberland sales decreased to $1.3 million for the three months ended September 30, 2021 from $1.9 million for the three months ended September 30, 2020 primarily due to selling fewer acres and lower per-acre cost basis as the acres sold in the current quarter were held for a longer period.

~~General and administrative expenses were~~ ~~$3.0 million~~ ~~for the three months ended~~ ~~September 30, 2021, $0.2 million higher than prior year period primarily due to higher noncash stock-based compensation expense.~~

~~Interest expense.~~ ~~Interest expense decreased $0.3 million to $3.2 million for the three months ended September 30, 2021~~ ~~primarily due to a lower weighted-average outstanding debt balance, and a $0.1 million decrease in amortization of the off-market swap value in the current year period.~~

~~Gain on large dispositions.~~ During the three months ended September 30, 2021, we recognized a gain of $23.4 million from the disposition of 18,100 acres of our wholly-owned timberlands. We did not complete any large dispositions in same period of the prior year.

~~Income (loss) from unconsolidated joint ventures. We did not recognize additional losses from the Triple T Joint Venture in the third quarter of 2021. For the three months ended~~ ~~September 30, 2020,~~ ~~we recognized a~~ ~~$2.7 million HLBV loss from the Triple T Joint Venture and~~ ~~$0.4 million of income from the Dawsonville Bluffs Joint Venture.~~

~~Net income (loss).~~ For the three months ended September 30, 2021, we recognized $23.3 million of net income, as compared to a $4.1 million net loss for the three months ended September 30, 2020 primarily due to a $23.4 million increase in gain on large dispositions, a $4.0 million decrease in total expenses, a $2.3 million decrease in loss recognized from the unconsolidated joint ventures, and a $0.3 million decrease in interest expense, offset by a $2.5 million decrease in total revenue. Our net income per share for the three months ended September 30, 2021 was $0.48 as compared to a net loss per share for the three months ended September 30, 2020 of $0.09.

~~Comparison of the nine months ended September 30, 2021 versus the nine months ended September 30, 2020~~

Revenues. Revenues for the nine months ended September 30, 2021 were $81.7 million, $8.4 million higher than the nine months ended September 30, 2020 as a result of a $3.7 million increase in timber sales, a $4.2 million increase in timberland sales revenue, and a $0.4 million increase in asset management fees. Timber sales revenue increased primarily due to improved pricing across the board and higher harvest volume in the Pacific Northwest prior to its disposition in August 2021. Timberland sales revenue increased by 48% due to selling 37% more acres at a higher average per-acre price as as a result of favorable market conditions in 2021. Acres sold in the current period had lower average merchantable timber stocking than our portfolio average. Acres sold in the current period had an average merchantable timber stocking of 20 tons per acre which was lower than our portfolio average of 41 tons per acre.

~~Details of timber sales revenue by product for the nine months ended September 30, 2021 and 2020 are shown in the following table:~~

~~Table of Contents~~


		Nine Months Ended September 30, 2020		Changes attributable to:				Nine Months Ended September 30, 2021			Three Months Ended June 30, 2021		Changes attributable to:				Three Months Ended June 30, 2022
(in thousands)	(in thousands)			Price/Mix		Volume				(in thousands)			Price/Mix		Volume
Timber sales (1)	Timber sales (1)									Timber sales (1)
Pulpwood	Pulpwood	$	24,354	$	1,615	$	(1,654)	$	24,315	Pulpwood	$	8,941	$	627	$	(2,614)	$	6,954
Sawtimber (2)	Sawtimber (2)	28,045		2,440		1,310		31,795		Sawtimber (2)	11,170		1,459		(4,904)		7,725
		$	52,399	$	4,055	$	(344)	$	56,110		$	20,111	$	2,086	$	(7,518)	$	14,679

(1)Timber sales are presented on a gross basis.

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

Operating Expenses. Contract logging and hauling costs were ~~$24.2~~$6.3 million for the ~~nine~~three months ended ~~September~~June 30, ~~2021, $2.3~~2022, $2.5 million ~~higher~~lower than prior year period primarily due to ~~delivered volume increases~~a $1.8 million decrease that resulted from the disposition of ~~3% in the U.S South and 28% in the~~our Pacific Northwest ~~prior to its disposition~~property in August 2021 ~~as we capitalized on favorable market conditions.~~and a $0.7 million decrease in the U.S. South, driven by a 26% decrease in delivered sales volume. Our U.S. South blended logging rates increased ~~3% and 5% in the U.S. South and the Pacific Northwest, respectively,~~21% compared to the prior year period primarily ~~as a result of~~due to higher fuel and labor ~~costs.~~costs in the current year. However, these increased costs were largely offset by higher negotiated delivered wood sales prices, which allowed us to maintain stumpage values.

Depletion expense ~~decreased 10%~~decreased to ~~$18.9~~$3.2 million for the ~~nine~~three months ended ~~September~~June 30, ~~2021~~2022 from ~~$20.9~~$6.7 million for the ~~nine~~three months ended ~~September~~June 30, ~~2020 primarily~~2021 due to a $2.2 million decrease that resulted from the disposition of our Pacific Northwest property in August 2021 and a $1.2 million decrease in the U.S. South, driven by ~~a 13% decrease in~~lower blended depletion rates and lower harvest volume ~~partially offset by a 22% harvest volume increase~~ in the ~~Pacific Northwest prior to its disposition.~~current year period.

Cost of timberland sales increased to ~~$9.1~~$6.5 million for the ~~nine~~three months ended ~~September~~June 30, ~~2021~~2022 from ~~$6.8~~$5.6 million for the ~~nine~~three months ended ~~September~~June 30, ~~2020~~2021 primarily due to selling more acres in the current year period.

General and administrative expenses ~~decreased~~increased by ~~$3.4~~$4.6 million to~~$9.6~~ $7.7 million for the ~~nine~~three months ended~~September~~ June 30, ~~2021~~2022 primarily due to ~~recognizing non-recurring post-employment benefits of $3.5 million in the prior year period~~higher legal fees related to the ~~retirement of our former CEO in January 2020.~~Mergers.

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Other operating expenses ~~increased~~decreased by $0.3 million to ~~$5.0~~$1.4 million for the ~~nine~~three months ended~~September~~ June 30, ~~2021~~2022 primarily due to ~~a $0.5 million increase~~decreases in road ~~use and~~ maintenance ~~expenditures to support harvest production in~~costs as a result of the Pacific Northwest disposition in the current year period prior to its disposition, and a $0.3 million increase in timber reservation write-off on the LTC Lease, offset by a $0.6 million decrease in basis removed on terminated leases during the current year period.August 2021.

Interest expense. Interest expense decreased ~~$2.1~~$0.6 million to ~~$9.5~~$2.8 million for the ~~nine~~three months ended ~~September~~June 30, ~~2021~~2022 primarily due to a ~~$1.4 million decrease in interest paid~~ ~~after consideration of patronage dividends~~ ~~and a $0.4 million decrease in amortization of the off-market swap value in the current year period. We paid less interest as a result of a~~32% lower weighted-average debt outstanding balance, ~~compared to the prior year period. In addition, we wrote off $0.4 million of deferred financing costs related to the credit agreement amendment for the nine months ended September 30, 2020.~~offset by higher weighted-average interest rates.

Gain on large dispositions.~~During~~ We did not complete any large dispositions during the ~~nine~~three months ended ~~September~~June 30, 2022. For the three months ended June 30, 2021, we recognized a gain of ~~$24.1~~$0.8 million onfrom the disposition of ~~23,100~~5,000 acres of our wholly-owned ~~timberlands, as compared to recognizing a gain of $1.3 million on the disposition of 14,400 acres of our wholly-owned timberlands in the prior year period.~~

~~Income (loss) from unconsolidated joint ventures. We recognized~~ ~~$0.6 million of~~ ~~income from the Dawsonville Bluffs Joint Venture for the~~ ~~nine months endedSeptember 30, 2021~~ ~~as compared to a~~ ~~$0.3 million~~ ~~for the prior year period. For the~~ ~~nine months endedSeptember 30, 2020, we recognized a~~ ~~$5.0 million of~~ ~~loss from the Triple T Joint Venture under the HLBV method of accounting. We did not recognize income (loss) from the Triple T Joint Venture in 2021.~~timberland.

Net income (loss). For the ~~nine~~three months ended ~~September~~June 30, ~~2021,~~2022, we recognized ~~$24.5~~$4.6 million of net loss compared to $1.8 million of net income ~~as compared~~for the three months ended June 30, 2021. Our net loss was primarily the result of $4.6 million of merger-related costs incurred during the period. The year-over-year change from net income of $1.8 million to a ~~$14.6 million~~ net loss ~~for the nine months ended September 30, 2020~~of $4.6 million was primarily due to a ~~$22.9~~$7.4 million ~~increase~~ decrease in total revenue and a $0.8 million decrease in gain on large dispositions ~~an $8.4 million increase in total revenue,~~, offset by a ~~$5.3~~$1.0 million decrease in ~~loss recognized from the unconsolidated joint venture,~~total expenses (despite $4.6 million of merger-related costs) and a ~~$2.1~~$0.6 million decrease in interest ~~expense,~~expense. Our net loss per share for the three months ended June 30, 2022 was $0.09 as compared to a net income per share of $0.04 for the three months ended June 30, 2021.

Comparison of the six months ended June 30, 2022 versus the six months ended June 30, 2021

Revenues. Revenues for the six months ended June 30, 2022 were $51.5 million, $8.1 million lower than the six months ended June 30, 2021 as a result of a $7.9 million decrease in timber sales and a ~~$0.5~~$4.0 million decrease in asset management fees, offset by a $3.9 million increase in timberland sales revenue. Timber sales revenue was lower in the current year period due to a $8.7 million decrease that resulted from the disposition of our Pacific Northwest property in August 2021, offset by a $0.8 million increase in the U.S. South, driven by higher net timber sales prices. Timberland sales revenue increased by 35% due to selling more acres in the current year period, as planned. Timberland sales price per acre was 8% lower than the prior year period due to current quarter sales having lower productivity characteristics, primarily a significantly lower percentage of pine plantations. Acres sold in the current period also had a lower average merchantable timber stocking than our portfolio average of 39 tons per acre at the beginning of the year. Asset management fees decreased as a result of exiting Triple T in 2021.

Details of timber sales revenue by product for the six months ended June 30, 2022 and 2021 are shown in the following table:


	Six Months Ended June 30, 2021		Changes attributable to:				Six Months Ended June 30, 2022
(in thousands)			Price/Mix		Volume
Timber sales (1)
Pulpwood	$	16,489	$	1,327	$	(4,347)	$	13,469
Sawtimber (2)	23,771		3,590		(8,428)		18,933
	$	40,260	$	4,917	$	(12,775)	$	32,402

(1)Timber sales are presented on a gross basis.

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

Operating Expenses. Contract logging and hauling costs were $12.6 million for the six months ended June 30, 2022, $4.9 million lower than prior year period primarily due to a $4.3 million decrease that resulted from the disposition of our Pacific Northwest property in August 2021, and a $0.6 million decrease in the U.S. South, driven by a 20% decrease in delivered sales volume. Our U.S. South blended logging rates increased 19% compared to the prior year period primarily due to higher fuel and labor costs in the current year. However, these increased costs were largely offset by higher negotiated delivered wood sales prices, which allowed us to maintain stumpage values.

Depletion expense decreased to $7.4 million for the six months ended June 30, 2022 from $14.4 million for the six months ended June 30, 2021 due to a $5.2 million decrease that resulted from the disposition of our Pacific

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Northwest property in August 2021 and a $1.8 million decrease in the U.S. South, primarily driven by lower blended depletion rates and lower harvest volume in the current year.

Cost of timberland sales increased to $10.8 million for the six months ended June 30, 2022 from $7.8 million for the six months ended June 30, 2021 primarily due to selling more acres and a shorter average holding period in the current year period.

Forestry management expenses decreased $0.5 million to $3.1 million for the six months ended June 30, 2022 from $3.6 million for the six months ended June 30, 2021 primarily due to lower personnel costs.

General and administrative expenses increased by $4.9 million to $11.6 million for the six months ended June 30, 2022 primarily due to costs related to the Mergers.

Other operating expenses decreased by $0.7 million to $2.7 million for the six months ended June 30, 2022 primarily due to decreases in road maintenance costs as a result of the Pacific Northwest disposition in August 2021.

Interest expense. Interest expense decreased $1.0 million to $5.3 million for the six months ended June 30, 2022 primarily due to a 32% lower weighted-average debt outstanding balance, offset by a higher weighted-average interest rates.

Gain on large dispositions. We did not complete any large dispositions during the six months ended June 30, 2022. For the six months ended June 30, 2021, we recognized a gain of $0.8 million from the disposition of 5,000 acres of our wholly-owned timberland.

Net income (loss). For the six months ended June 30, 2022, we recognized $1.4 million of net loss compared to $1.2 million of net income for the six months ended June 30, 2021. Our net loss was primarily the result of $4.6 million of merger-related costs incurred during the period. The year-over-year change from net income of $1.2 million to a net loss of $1.4 million was primarily due to a $8.1 milliondecrease in total ~~expenses.~~ revenue and a $0.8 million decrease in gain on large dispositions, offset by a $5.2 million decrease in total expenses (despite $4.6 million of merger-related costs) and a $1.0 million decrease in interest expense. Our ~~net income per share for the nine months ended September 30, 2021 was $0.51 as compared to a~~ net loss per share for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2022 was $0.03 as compared to a net income per share of ~~$0.30.~~$0.02 for the six months ended June 30, 2021.

Adjusted EBITDA

The discussion below is intended to enhance the reader’s understanding of our operating performance and ability to satisfy lender requirements. 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, we have excluded certain other expenses which we believe are not indicative of the ongoing operating results of our timberland portfolio, and we refer to this measure as Adjusted EBITDA (see the reconciliation table below). As such, our Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. Due to the significant amount of timber assets subject to ~~depletion,~~depletion, significant income (losses) from unconsolidated joint ventures based on HLBV, and the significant amount of financing subject to interest and amortization expense, management considers Adjusted EBITDA to be an important measure of our financial performance. By providing this non-GAAP financial measure, together with the reconciliation below, we believe we are enhancing investors’ understanding of our business and our ongoing results of operations, as well as assisting investors in evaluating how well we are executing our strategic initiatives. Items excluded from Adjusted EBITDA are significant components in understanding and assessing financial performance. Adjusted EBITDA is a supplemental measure of operating performance that does not represent and should not be considered in isolation or as an alternative to, or substitute for net income, cash flow from operations, or other financial statement data presented in accordance with GAAP in our consolidated financial statements as indicators of our operating performance. Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Some of the limitations are:

•Adjusted EBITDA does not reflect our capital expenditures, or our future requirements for capital expenditures;

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•Adjusted EBITDA does not reflect changes in, or our interest expense or the cash requirements necessary to service interest or principal payments on, our debt;

•Although depletion is a non-cash charge, we will incur expenses to replace the timber being depleted in the future, and Adjusted EBITDA does not reflect all cash requirements for such expenses; and

•Although HLBV income and losses are primarily hypothetical and non-cash in nature, Adjusted EBITDA does not reflect cash income or losses from unconsolidated joint ventures for which we use the HLBV method of accounting to determine our equity in earnings.

•Adjusted EBITDA does not reflect the cash requirements necessary to fund post-employment benefits or transaction costs related to acquisitions, investments, joint ventures or new business initiatives, which may be substantial.

Due to these limitations, Adjusted EBITDA should not be considered as a measure of discretionary cash available to us to invest in the growth of our business. Our Amended Credit Agreement contains a minimum debt service coverage ratio based, in part, on Adjusted EBITDA since this measure is representative of adjusted income available for interest payments. We further believe that our presentation of this non-GAAP financial measurement provides information that is useful to analysts and investors because they are important indicators of the strength of our operations and the performance of our business.

For the three months ended ~~September~~June 30, ~~2021,~~2022, Adjusted EBITDA was ~~$9.9~~$13.7 million, a ~~$2.5~~$3.9 million decrease from the three months ended ~~September~~June 30, ~~2020~~2021 primarily due to a ~~$1.2~~$3.1 million decrease in asset management fee revenues and a $2.9 million decrease in net timber sales, ~~revenue,~~offset by a ~~$0.6 million decrease in Adjusted EBITDA generated by the Dawsonville Bluffs Joint Venture, a $0.3 million decrease in net timberland sales, and a $0.3 million increase in other operating expenses.~~

~~For the nine months ended September 30, 2021, Adjusted EBITDA was $40.4 million, a $5.7 million increase from the nine months ended September 30, 2020 primarily due to a $4.1~~$1.3 million increase in net timberland sales, a ~~$1.4~~$0.3 million decrease in other operating expense, a $0.2 million decrease in forestry management expense, and a $0.2 million increase in ~~net timber sales revenue,~~Adjusted EBITDA generated by Dawsonville Bluffs.

For the six months ended June 30, 2022, Adjusted EBITDA was $28.5 million, a ~~$0.4~~$2.0 million ~~increase~~decrease from the six months ended June 30, 2021 primarily due to a $4.0 million decrease in asset management fee revenues and a ~~$0.3~~$2.9 million decrease in net timber sales, offset by a $3.9 million increase in ~~Adjusted EBITDA generated by the Dawsonville Bluffs Joint Venture, offset by~~net timberland sales, a ~~$0.6~~$0.7 million ~~increase~~decrease in other operating ~~expenses.~~expense, and a $0.5 million decrease in forestry management expense.

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Our reconciliation of net income (loss) to Adjusted EBITDA for the three months and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 follows:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	(in thousands)	2021		2020		2021		2020		(in thousands)	2022		2021		2022		2021
Net income (loss)	Net income (loss)	$	23,308	$	(4,149)	$	24,510	$	(14,581)	Net income (loss)	$	(4,559)	$	1,753	$	(1,375)	$	1,202
Add:	Add:									Add:
Depletion	Depletion	4,560		7,286		18,942		20,934		Depletion	3,201		6,657		7,350		14,382
Interest expense (1)	Interest expense (1)	2,679		2,865		7,773		9,121		Interest expense (1)	2,397		2,752		4,508		5,094
Amortization (1)	Amortization (1)	577		747		1,846		2,621		Amortization (1)	412		636		835		1,269
Depletion, amortization, basis of timberland, mitigation credits sold included in loss from unconsolidated joint venture (2)	Depletion, amortization, basis of timberland, mitigation credits sold included in loss from unconsolidated joint venture (2)	10		140		113		140		Depletion, amortization, basis of timberland, mitigation credits sold included in loss from unconsolidated joint venture (2)	40		15		104		103
Basis of timberland sold, lease terminations and other (3)	Basis of timberland sold, lease terminations and other (3)	1,165		1,991		8,832		6,988		Basis of timberland sold, lease terminations and other (3)	6,698		5,701		10,738		7,667
Stock-based compensation expense	Stock-based compensation expense	766		630		2,152		3,207		Stock-based compensation expense	853		767		1,704		1,386
Gain on large dispositions (4)		(23,377)		—		(24,136)		(1,274)
HLBV loss from unconsolidated joint venture (5)		—		2,689		—		5,000
Gain on large disposition (4)										Gain on large disposition (4)	—		(759)		—		(759)
Merger-related costs (5)										Merger-related costs (5)	4,595		—		4,595		—
Post-employment benefits (6)	Post-employment benefits (6)	11		10		34		2,307		Post-employment benefits (6)	—		7		8		23
Other (7)	Other (7)	165		190		312		260		Other (7)	36		48		52		147
Adjusted EBITDA	Adjusted EBITDA	$	9,864	$	12,399	$	40,378	$	34,723	Adjusted EBITDA	$	13,673	$	17,577	$	28,519	$	30,514

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

(5)Reflects ~~HLBV losses from~~merger-related legal fees, consulting fees and other professional fees required to be expensed by GAAP that management believes do not directly reflect the ~~Triple T Joint Venture, which is determined based~~core business operations of our timberland portfolio on ~~a hypothetical liquidation of the underlying joint venture at book value as of the reporting date.~~an on-going basis.

(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.

Segment EBITDA

For the three months ended ~~September~~June 30, ~~2021,~~2022, Harvest EBITDA was ~~$7.1~~$6.9 million, a ~~$1.4~~$2.5 million decrease from the prior year period, primarily due to a ~~$1.2~~$2.9 million decrease in net timber sales, ~~revenue.~~offset by a $0.3 million decrease in other operating expense and a $0.2 million decrease in forestry management expense. Real Estate EBITDA ~~decreased~~increased by ~~$0.3~~$1.3 million to ~~$2.0~~$8.7 million as a result of selling ~~fewer~~more acres in ~~2021 at a comparable per-acre sales price.~~2022 as compared to the prior year period. Investment Management EBITDA decreased by ~~$0.7~~$2.9 million ~~to $3.0 million for~~during the ~~three~~six months ended ~~September~~June 30, ~~2021~~2022 primarily due to a ~~$0.6~~$3.1 million decrease in asset management fees, offset by a $0.2 million increase in Adjusted EBITDA generated by ~~the~~ Dawsonville ~~Bluffs Joint Venture.~~Bluffs.

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For the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, Harvest EBITDA was ~~$25.4~~$16.5 million, a ~~$0.9~~$1.8 million ~~increase~~decrease from the prior year period, primarily due to a ~~$1.4~~$2.9 million ~~increase~~decrease in net timber sales, ~~revenue,~~ offset by ~~a $0.3~~$0.7 million ~~increase~~decrease in other operating ~~expenses.~~expense, and a $0.5 million decrease in forestry management expense. Real Estate EBITDA increased by ~~$4.1~~$3.9 million to ~~$12.5~~$14.4 million as a result of selling more acres ~~at a higher average price per acre~~ in ~~2021.~~2022 as compared to the prior year period. Investment Management EBITDA ~~increased~~decreased by ~~$0.7~~$4.0 million to ~~$10.0~~$3.1 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 primarily due to a ~~$0.4~~$4.0 million ~~increase~~decrease in asset management ~~fees and a $0.3 million increase in Adjusted EBITDA generated by the Dawsonville Bluffs Joint Venture.~~fees.

The following table presents Adjusted EBITDA by reportable segment:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	(in thousands)	2021		2020		2021		2020		(in thousands)	2022		2021		2022		2021
Harvest	Harvest	$	7,077	$	8,502	$	25,371	$	24,497	Harvest	$	6,871	$	9,367	$	16,482	$	18,294
Real Estate	Real Estate	$	1,974	$	2,272	$	12,451	$	8,342	Real Estate	$	8,664	$	7,333	$	14,416	$	10,477
Investment Management	Investment Management	$	2,951	$	3,653	$	10,046	$	9,363	Investment Management	$	410	$	3,275	$	3,143	$	7,095
Corporate	Corporate	$	(2,138)	$	(2,028)	$	(7,490)	$	(7,479)	Corporate	$	(2,272)	$	(2,398)	$	(5,522)	$	(5,352)
Total	Total	$	9,864	$	12,399	$	40,378	$	34,723	Total	$	13,673	$	17,577	$	28,519	$	30,514

~~Application of~~ Critical Accounting ~~Policies~~Estimates

There have been no material changes to our critical accounting ~~policies~~estimates from those disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

As a result of our debt facilities, we are exposed to interest rate changes. Our interest rate risk management objectives are to limit the impact of interest rate changes on earnings and cash flows and to lower our overall borrowing costs. To achieve these objectives, we have entered into interest rate swaps, and may enter into other interest rate swaps, caps, or other arrangements in order to mitigate our interest rate risk on a related financial instrument. We do not enter into derivative or interest rate transactions for speculative purposes; however, certain of our derivatives may not qualify for hedge accounting treatment. All of our debt was entered into for other than trading purposes. We manage our ratio of fixed-to-floating-rate debt with the objective of achieving a mix that we believe is appropriate in light of anticipated changes in interest rates. We closely monitor interest rates and will continue to consider the sources and terms of our borrowing facilities to determine whether we have appropriately guarded ourselves against the risk of increasing interest rates in future periods.

As of ~~September~~June 30, ~~2021,~~2022, we had following debt balances outstanding under the Amended Credit Agreement:

(in thousands)

Credit Facility

Maturity Date

Interest Rate

Outstanding Balance

Term Loan A-1

12/23/2024

LIBOR + 1.75%

~~100,000~~84,706

Term Loan A-2

12/1/01/2026

LIBOR + 1.90%

~~100,000~~89,706

Term Loan A-4

8/22/2025

LIBOR + 1.70%

~~140,000~~125,588

Total Principal Balance

~~340,000~~300,000

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As of ~~September~~June 30, ~~2021,~~2022, we had two outstanding interest rate swaps with terms below:

(in thousands)

Interest Rate Swap

Effective Date

Maturity Date

Pay Rate

Receive Rate

Notional Amount

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

2.0830%

one-month LIBOR

75,000

Total

275,000

As of ~~September~~June 30, ~~2021,~~2022, after consideration of the interest rate swaps, ~~$65.0~~$25.0 million of our total debt outstanding was subject to variable interest rates while the remaining $275.0 million was subject to effectively fixed interest rates. A change in the market interest rate impacts the net financial instrument position of our effectively fixed-rate debt portfolio; however, it has no impact on interest incurred or cash flows.

Details of our variable-rate and effectively fixed-rate debt outstanding as of ~~September~~June 30, ~~2021,~~2022, along with the corresponding average interest rates, are listed below:


		Expected Maturity Date																						Expected Maturity Date
(dollars in thousands)	(dollars in thousands)	2021			2022			2023			2024			2025			Thereafter			Total			(dollars in thousands)	2022			2023			2024			2025			2026			Thereafter			Total
Maturing debt:	Maturing debt:																						Maturing debt:
Variable-rate debt	Variable-rate debt	$	—		$	—		$	—		$	19,118		$	26,764		$	19,118		$	65,000		Variable-rate debt	$	—		$	—		$	7,059		$	10,466		$	7,475		$	—		$	25,000
Effectively fixed-rate debt	Effectively fixed-rate debt	$	—		$	—		$	—		$	80,882		$	113,236		$	80,882		$	275,000		Effectively fixed-rate debt	$	—		$	—		$	77,647		$	115,122		$	82,231		$	—		$	275,000
Average interest rate: (1)
Average interest rate (1):																							Average interest rate (1):
Variable-rate debt	Variable-rate debt	—		%	—		%	—		%	1.83		%	1.78		%	1.98		%	1.86		%	Variable-rate debt	—		%	—		%	3.42		%	3.37		%	3.57		%	—		%	3.44		%
Effectively fixed-rate debt	Effectively fixed-rate debt	—		%	—		%	—		%	3.95		%	3.95		%	3.95		%	3.95		%	Effectively fixed-rate debt	—		%	—		%	3.95		%	3.95		%	3.95		%	—		%	3.95		%

(1)Inclusive of applicable spread but before considering patronage dividends.

As of ~~September~~June 30, ~~2021,~~2022, the weighted-average interest rate of our outstanding debt, after consideration of the interest rate swaps, was ~~3.55%~~3.90%, before considering patronage dividends. A 1.0% change in interest rates would result in a

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change in interest expense of ~~$0.7~~$0.3 million per year. The amount of variable-rate debt outstanding in the future will largely be dependent upon the level of cash flow from operations and the rate at which we are able to deploy such cash flow toward repayment of outstanding debt, ~~and~~ the acquisition of timberland ~~properties.~~properties, and other investments.

ITEM 4. CONTROLS AND PROCEDURES

Management’s Conclusions Regarding the Effectiveness of Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report in providing a reasonable level of assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods in SEC rules and forms, including providing a reasonable level of assurance that information required to be disclosed by us in such reports is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended ~~September~~June 30, ~~2021~~2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. In response to the COVID-19 pandemic, our teams have been working partially remote since the middle of March 2020. We took precautionary measures to ensure our internal control over financial reporting addressed the risks of

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working in a remote environment. We are continually monitoring and assessing the potential effects of the COVID-19 pandemic on the design and operating effectiveness of our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we are party to legal proceedings, which arise in the ordinary course of our business.

On August 2, 2022, a purported stockholder filed a putative stockholder class action against CatchMark Timber Trust and the members of our board of directors. The lawsuit is captioned Bell v. CatchMark Timber Trust, Inc., et al., No. 1:22-CV-06548, and is pending in the United States District Court for the Southern District of New York.

In general, the complaint alleges, among other things, that the merger consideration is inadequate, that the process culminating in the Mergers was flawed, that our directors breached their fiduciary duties in connection with the Mergers, and that we aided and abetted the breaches of fiduciary duty. The complaint also alleges that the proxy statement filed in connection with the Mergers was a materially incomplete and misleading registration statement on Form S-4 that failed to disclose certain allegedly material information in violation of Sections 14(a) and 20(a) of the Exchange Act and Rule 14a-9 promulgated thereunder.

The alleged omissions in the registration statement on Form S-4 filed in connection with the Mergers relate to, among other things, (i) information concerning the sales process conducted by CatchMark Timber Trust and the events leading up to the execution of the merger agreement; (ii) certain financial projections and GAAP reconciliations for CatchMark Timber Trust and PotlatchDeltic; and (iii) certain financial analyses performed by our financial advisor. The plaintiff seeks to enjoin CatchMark Timber Trust and our board of directors from proceeding with the Mergers and seeks damages in the event the Mergers are consummated.

We are reviewing the complaint and have not ~~currently involved~~yet formally responded to it, but we believe that plaintiff’s claims are without merit and intend to defend against them vigorously. However, litigation is inherently uncertain and there can be no assurance regarding the likelihood that our defense of the action will be successful. Additional lawsuits arising out of the Mergers may also be filed in ~~any legal proceedings of which~~ the outcome is reasonably likely to have a material adverse effect on our results of operations or financial condition, nor are we aware of any such legal proceedings contemplated by governmental authorities.future.

ITEM 1A. RISK FACTORS

~~There are no material changes from~~In addition to the ~~risk~~other information set forth in this report, an investor should carefully consider the factors ~~included~~discussed below and those discussed in Part I, Item 1A. in our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~

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2021, which could materially affect our business, financial condition or future results. The risks, as described below and in our Annual Report on Form 10-K for the year ended December 31, 2021, are not the only risks facing us. Additional risks and uncertainties not currently known to management or that management currently deems immaterial also may materially, adversely affect our business, financial condition, operating results or cash flows.

Risks Related to the Mergers

The exchange ratio is fixed and will not be adjusted in the event of any change in either CatchMark’s or PotlatchDeltic’s stock price.

Under the terms of the Merger Agreement, at the effective time of the respective Mergers, each outstanding share of Common Stock and each Common Unit (other than Common Stock and Common Units owned by CatchMark Timber Trust, CatchMark Timber OP, PotlatchDeltic, Merger Sub or any of their respective wholly-owned subsidiaries, which will be canceled) will be converted into the right to receive 0.230 shares of PotlatchDeltic common stock. This exchange ratio of 0.230 was fixed in the Merger Agreement and will not be adjusted for changes in the market price of either shares of Common Stock or shares of PotlatchDeltic common stock between the date of the Merger Agreement and the closing. Changes in the price of shares of PotlatchDeltic common stock prior to completion of the Mergers will affect the market value of the Merger Consideration that CatchMark stockholders and holders of Common Units will receive upon completion of the Mergers. Stock price changes may result from a variety of factors (many of which are beyond the control of CatchMark or PotlatchDeltic), including the following factors:

•market reaction to the announcement of the Mergers and the prospects of the combined company;

•changes in the respective businesses, operations, assets, liabilities and prospects of CatchMark, PotlatchDeltic or the combined company;

•changes in market assessments of the business, operations, financial position and prospects of CatchMark, PotlatchDeltic or the combined company;

•investor behavior and strategies;

•market assessments of the likelihood that the Mergers will close;

•interest rates, general market and economic conditions and other factors generally affecting the market prices of Common Stock and PotlatchDeltic common stock;

•federal, state and local legislation, governmental regulation, tariffs, quotas and trade agreements, and legal developments in the businesses in which CatchMark or PotlatchDeltic operate; and

•other factors beyond the control of CatchMark or PotlatchDeltic, including those described or referred to elsewhere in this “Risk Factors” section.

The market price of shares of PotlatchDeltic common stock at the closing of the Mergers may vary from its price on the date the Merger Agreement was executed and on the date of the special meeting of CatchMark’s stockholders. As a result, the market value represented by the exchange ratio will also vary. Accordingly, at the time of the CatchMark special meeting of stockholders, CatchMark stockholders will not know or be able to determine the market value of the consideration they will receive upon completion of the Company Merger.

Failure to complete the Mergers could negatively impact the stock prices and the future business and financial results of CatchMark.

If the Mergers are not completed, the ongoing business of CatchMark may be adversely affected and CatchMark will be subject to several risks without realizing any of the benefits of having the Mergers completed, including the following:

•the market price of Common Stock could decline;

•restrictions on the conduct of CatchMark’s business during the period between the day the Merger Agreement was executed and termination of the Merger Agreement may adversely affect its ability to execute certain business strategies;

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•CatchMark may experience negative reactions from the financial markets or from its customers, suppliers or employees;

•CatchMark may be subject to litigation related to any failure to complete the Mergers or to enforcement proceedings commenced against CatchMark to perform its obligations under the Merger Agreement;

•the focus of CatchMark’s management on the Mergers instead of other opportunities could adversely affect CatchMark’s business; and

•if the Merger Agreement is terminated and the CatchMark board of directors seeks another business combination, CatchMark stockholders cannot be certain that CatchMark will be able to find a party willing to enter into a transaction on terms equivalent to or more attractive than the terms that PotlatchDeltic has agreed to in the Merger Agreement.

In addition, if the Mergers are not completed, CatchMark may be required under certain circumstances to pay to PotlatchDeltic a termination fee of up to $19.4 million.

Any delay in completing the Mergers, which are subject to a number of conditions, some of which are outside of the parties’ control, may reduce or eliminate the expected benefits from the transaction.

In addition to approval of the Company Merger by CatchMark stockholders, the Mergers are subject to a number of other conditions beyond the parties’ control that may prevent, delay or otherwise materially adversely affect the completion of the transaction. CatchMark cannot predict whether and when these other conditions will be satisfied. Furthermore, the requirement to obtain the required CatchMark stockholder approval could delay the completion of the Mergers for a significant period of time or prevent the transaction from occurring. Any delay in completing the Mergers could cause the combined company not to realize some or all of the synergies and other benefits that it expects to achieve if the Mergers are successfully completed within its expected time frame. The Merger Agreement contains certain restrictions on the conduct of the parties’ business. If the Mergers are delayed, these restrictions could adversely affect our ability to execute business strategies or pursue attractive business opportunities. In addition, a delay could cause our management to focus on completion of the Mergers instead of on other opportunities that could be beneficial to CatchMark or the combined company.

In addition, if the Mergers are not completed by November 29, 2022, either CatchMark or PotlatchDeltic may choose to terminate the Merger Agreement, subject to certain exceptions. CatchMark or PotlatchDeltic may also choose to terminate the Merger Agreement in certain other circumstances, and the parties can mutually decide to terminate the Merger Agreement at any time prior to the completion of the Mergers, before or after the CatchMark stockholder approval has been obtained.

The Merger Agreement contains provisions that could discourage a potential competing acquiror of CatchMark or could result in any competing proposal being at a lower price than it might otherwise be.

Pursuant to the Merger Agreement, CatchMark has agreed not to (i) solicit proposals relating to certain alternative transactions, (ii) engage in discussions or negotiations or provide non-public information in connection with any proposal for an alternative transaction from a third party or (iii) approve or enter into any agreements providing for any such alternative transaction, in each case, subject to certain exceptions to permit members of the CatchMark board of directors to comply with their duties as directors under applicable law. Notwithstanding these “no-shop” restrictions, prior to obtaining the CatchMark stockholder approval, under specified circumstances the CatchMark board of directors may change its recommendation of the transaction, and CatchMark may also terminate the Merger Agreement to accept a superior proposal upon payment of the termination fee described below.

The Merger Agreement provides that, in connection with the termination of the Merger Agreement under specified circumstances, CatchMark may be required to pay to PotlatchDeltic a termination fee of $19.4 million.

These provisions could discourage a potential competing acquiror that might have an interest in acquiring all or a significant part of CatchMark from considering or proposing an acquisition, even if it were prepared to pay consideration with a higher per share cash or market value than that market value proposed to be received or realized in the Mergers, or might result in a potential competing acquiror proposing to pay a lower price than it might otherwise have proposed to pay because of the added expense of the termination fee that may become payable in certain circumstances.

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If the Merger Agreement is terminated and CatchMark determines to seek another business combination, CatchMark may not be able to negotiate a transaction with another party on terms comparable to, or better than, the terms of the Mergers contemplated by the Merger Agreement.

The Mergers will involve substantial costs.

CatchMark and PotlatchDeltic have incurred and expect to continue to incur substantial costs and expenses relating directly to the Mergers and the issuance of PotlatchDeltic shares in connection with the Mergers, including fees and expenses payable to financial advisors, other professional fees and expenses, insurance premium costs, SEC filing fees, printing and mailing costs and other transaction-related costs, fees and expenses. Through June 30, 2022, CatchMark has incurred legal, consulting, and other professional fees of $4.6 million, and will incur additional fees and expenses prior to the completion of the Mergers. PotlatchDeltic also will incur transaction fees and costs related to formulating and implementing integration plans, including facilities and systems consolidation costs, employment-related costs, and a cash gross-up payment, subject to a cap, to the holders of Partnership OP Units to satisfy income tax liabilities associated with receiving shares of PotlatchDeltic common stock as consideration in connection with the Partnership Merger if elected by PotlatchDeltic. Additional unanticipated costs may be incurred in the Mergers and the integration of the two companies’ businesses. These expenses could, particularly in the near term, exceed the expected savings from the elimination of duplicative expenses and the realization of economies of scale and cost savings and synergies related to the integration of the businesses following the completion of the Mergers. These integration expenses likely will result in the combined company taking significant charges against earnings following the completion of the Mergers, but the amount and timing of such charges are uncertain at present.

Shareholder litigation could negatively affect our business and operations.

Stockholder class action lawsuits and derivative lawsuits are often brought against companies that have entered into merger agreements. As of the date of this Quarterly Report on Form 10-Q, one putative stockholder class action lawsuit has been filed against us and our board of directors in connection with the Mergers. The lawsuit alleges, among other things, that the merger consideration is inadequate, that the process culminating in the Mergers was flawed, that our directors breached their fiduciary duties in connection with the Mergers, and that we aided and abetted the breaches of fiduciary duty. The lawsuit also alleges that the proxy statement filed in connection with the Mergers was a materially incomplete and misleading registration statement on Form S-4 filed in violation of Sections 14(a) and 20(a) of the Exchange Act and Rule 14a-9 promulgated thereunder. The lawsuit seeks to enjoin the Mergers and other relief.

We believe that the claims in the complaint are without merit. Additional lawsuits arising out of the Mergers may be filed in the future. The outcome of this lawsuit or any other lawsuit that may be filed challenging the Mergers is uncertain, including the amount of costs associated with defending claims or any other liabilities that may be incurred in connection with such litigation. One of the conditions to the closing of the Mergers is that no governmental authority has issued or entered any order at or prior to the closing of the Mergers having the effect of enjoining or otherwise prohibiting the consummation of the Mergers. Accordingly, if this lawsuit or any future lawsuit is successful in obtaining any order enjoining consummation of the Mergers, then such order may prevent the Mergers from being consummated, or from being consummated within the expected time frame, and could result in substantial costs to us, including but not limited to, costs associated with the indemnification of directors and officers. Any such injunction or delay in the Mergers being completed may adversely affect our business, financial condition, results of operations, and cash flows.

Uncertainty due to the pendency of the Mergers could adversely affect the business and operations of CatchMark or the combined company.

In connection with the pendency of the Mergers, some customers, suppliers, or other entities with whom we have a business relationship may delay or defer decisions, which could negatively impact our revenues, earnings, and cash flows, as well as the market price of our shares, regardless of whether the Mergers are completed. In addition, customers or suppliers may cease doing business with us or the combined company in anticipation of or following the Mergers or may change the terms and conditions upon which they are willing to continue to do business. In addition, current or prospective competitors of CatchMark or the combined company may seek to take advantage of potential uncertainty or disruption resulting from the Mergers to interfere with relationships with customers, suppliers, or employees.

CatchMark stockholders will be diluted by the Mergers.

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The Mergers will result in CatchMark stockholders having an ownership stake in the combined company that is smaller than their current stake in CatchMark. Immediately after the Mergers are completed, it is expected that current PotlatchDeltic stockholders will own approximately 86% of the outstanding shares of PotlatchDeltic common stock and current CatchMark stockholders will own approximately 14% of the outstanding shares of PotlatchDeltic common stock on a fully diluted basis. Consequently, CatchMark stockholders, as a general matter, will have less influence over the management and policies of the combined company after the effective time of the Company Merger than they currently exercise over the management and policies of CatchMark.

Some of the directors and named executive officers of CatchMark have interests in the Mergers that are different from, or in addition to, those of the other CatchMark stockholders.

In considering whether to approve the Company Merger as contemplated by the Merger Agreement, CatchMark stockholders should recognize that members of CatchMark management and board of directors have interests in the Mergers that differ from, or are in addition to, the interests of other CatchMark stockholders. Some of the directors and named executive officers of CatchMark have arrangements that provide them with interests in the Mergers that are different from, or in addition to, those of the CatchMark stockholders, generally. These interests include, among other things, a severance payment if terminated upon, or following, consummation of the Mergers, treatment of outstanding CatchMark equity awards in connection with the transaction, rights to ongoing indemnification and insurance coverage, and a cash gross-up payment, subject to a cap, to the holders of the Partnership OP Units to satisfy income tax liabilities associated with receiving shares of PotlatchDeltic common stock as consideration. These interests, among other things, may influence or may have influenced the directors and named executive officers of CatchMark to support or approve the Mergers.

If the Company Merger does not qualify as a reorganization, there may be adverse tax consequences.

The Company Merger is intended to qualify as a reorganization within the meaning of Section 368(a) of the Code. It is a condition to the completion of the Mergers that each of CatchMark and PotlatchDeltic receives a written opinion from its respective counsel to the effect that the Company Merger will qualify as a reorganization within the meaning of Section 368(a) of the Code. The foregoing opinions, however, are limited to the factual representations provided by CatchMark and PotlatchDeltic to counsel and the assumptions set forth therein and are not a guarantee that the Company Merger, in fact, will qualify as a reorganization. Moreover, neither CatchMark nor PotlatchDeltic has requested or plans to request a ruling from the Internal Revenue Service that the Company Merger qualifies as a reorganization. If the Company Merger were to fail to qualify as a reorganization, then each holder of Common Stock generally would recognize gain or loss, as applicable, equal to the difference between (i) the sum of the fair market value of the shares of PotlatchDeltic common stock received by such holder; and (ii) such holder’s adjusted tax basis in its Common Stock.

Risks Related to the Combined Company Following the Mergers

The combined company may incur adverse tax consequences if either CatchMark or PotlatchDeltic has failed or fails to qualify as a REIT for U.S. federal income tax purposes.

Each of CatchMark and PotlatchDeltic has operated in a manner that it believes has allowed it to qualify as a REIT for U.S. federal income tax purposes under the Code and intends to continue to do so through and (with respect to PotlatchDeltic) following the Mergers. Qualification as a REIT involves the application of highly technical and complex Code provisions for which there are only limited judicial and administrative interpretations. The determination of various factual matters and circumstances not entirely within the control of either of CatchMark or PotlatchDeltic, as applicable, may affect its ability to qualify as a REIT. In order to qualify as a REIT, each of CatchMark and PotlatchDeltic must satisfy a number of requirements, particularly relating to the nature of its assets and its income. A REIT must also make distributions to stockholders aggregating annually at least 90% of its net taxable income, excluding any capital gains. If PotlatchDeltic has failed or fails to qualify as a REIT for U.S. federal income tax purposes and the Mergers are completed, the combined company may have significant tax liabilities. Additionally, if CatchMark has failed or fails to qualify as a REIT for United States federal income tax purposes and the Mergers are completed, PotlatchDeltic may inherit significant tax liabilities and could lose its REIT status. A failure of either CatchMark or PotlatchDeltic to qualify as a REIT could impair the combined company’s ability after the merger to expand its business and raise capital, and could materially adversely affect the value of PotlatchDeltic common stock.

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Following the Mergers, the combined company may be unable to integrate successfully the businesses of CatchMark and PotlatchDeltic and realize the anticipated benefits of the Mergers.

The Mergers involve the combination of two companies which currently operate as independent public companies. The combined company will be required to devote significant management attention and resources to integrating its business practices and operations. The combined company may fail to realize some or all of the anticipated benefits of the Mergers if the integration process takes longer than expected or is more costly than expected. Potential difficulties the combined company may encounter in the integration process include the following:

•the inability to successfully combine the businesses of the two companies in a manner that permits the combined company to achieve the cost savings and synergies anticipated to result from the Mergers, which would result in the anticipated benefits of the Mergers not being realized partly or wholly in the time frame currently anticipated or at all;

•lost sales and customers as a result of certain customers of either of the two companies deciding not to do business with the combined company;

•complexities associated with managing the combined businesses;

•integrating personnel from the two companies;

•creation of uniform standards, controls, procedures, policies and information systems; and

•potential unknown liabilities and unforeseen increased expenses or delays associated with the Mergers.

In addition, CatchMark and PotlatchDeltic have operated and, until the completion of the Mergers, will continue to operate, independently. It is possible that the integration process could result in the diversion of each company’s management’s attention, the disruption or interruption of, or the loss of momentum in, each company’s ongoing businesses or inconsistencies in standards, controls, procedures and policies, any of which could adversely affect the companies’ ability to maintain relationships with customers, suppliers and employees or the companies’ ability to achieve the anticipated benefits of the Mergers, or could reduce the earnings or otherwise adversely affect the business and financial results of the combined company.

PotlatchDeltic’s stock price may be negatively impacted by risks and conditions that apply to PotlatchDeltic, which are different from the risks and conditions applicable to CatchMark.

Upon completion of the Mergers, holders of shares of Common Stock and Partnership OP Units will become holders of shares of PotlatchDeltic common stock. The businesses of PotlatchDeltic differ from those of CatchMark in important respects and, accordingly, the results of operations of PotlatchDeltic after the Mergers are completed, as well as the market price of shares of PotlatchDeltic common stock, may be affected by factors different from those currently affecting or that have historically affected the independent results of operations of CatchMark.

Uncertainties associated with the Mergers may cause a loss of management personnel and other key employees of CatchMark or PotlatchDeltic, which could adversely affect the future business and operations of the combined company following the Mergers.

CatchMark and PotlatchDeltic are dependent on the experience and industry knowledge of their officers and other key employees to execute their business plans and conduct operations. The combined company’s success after the Mergers will depend in part upon its ability to retain key management personnel and other key employees of CatchMark and PotlatchDeltic. Current and prospective employees of CatchMark and PotlatchDeltic may experience uncertainty about their future roles with the combined company following the Mergers, which may materially adversely affect the ability of each of CatchMark and PotlatchDeltic to attract and retain key personnel during the pendency of the Mergers. Accordingly, no assurance can be given that the combined company will be able to retain key management personnel and other key employees of CatchMark and PotlatchDeltic.

The combined company’s future results will suffer if it does not effectively manage its expanded operations following the completion of the Mergers.

Following the completion of the Mergers, the size of the business of the combined company will increase significantly beyond the current size of either CatchMark’s or PotlatchDeltic’s current businesses. In addition, the combined company may continue to expand its operations through additional acquisitions or other strategic

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transactions. The combined company’s future success depends, in part, upon its ability to manage its expanded business, which may pose substantial challenges for management, including challenges related to the management and monitoring of new operations and associated increased costs and complexity. There can be no assurances that the combined company will be successful or that it will realize the expected economies of scale, synergies and other benefits currently anticipated from the Mergers or anticipated from any additional acquisitions or strategic transactions.

The dividends paid by the combined company may be less than the rates currently paid by CatchMark or PotlatchDeltic.

Following the Mergers, CatchMark stockholders may not receive dividends at the same rate they received dividends as CatchMark stockholders before the Mergers, for reasons that may include any of the following factors:

•the combined company may not have enough cash to pay such dividends due to changes in the combined company’s cash requirements, capital spending plans, cash flow or financial position;

•the Mergers may not be as accretive as currently expected, which could negatively impact the combined company’s cash available for distribution;

•the combined company may desire to retain cash to maintain or improve its credit ratings; and

•the actual amount of dividends distributed and the decision to make any distribution will remain at all times entirely at the discretion of the combined company board of directors.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

~~The following table provides information regarding our~~We did not make any purchases of ~~our common stock~~Common Stock during the quarter ended ~~September~~June 30, ~~2021:~~

Period
Total Number of Shares Repurchased (2)
Average Price Paid per Share (2)
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)
Average Price Paid per Share (1)
Maximum Number (Or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (1)
July 1 - July 31 5,810 $ 11.58 — $ — $ 13.7 million
August 1 - August 31 — $ — — $ — $ 13.7 million
September 1 - September 30 — $ — — $ — $ 13.7 million
Total 5,810 —

~~(1)See~~ ~~Item 2 — Management Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources~~ ~~for details of our SRP.~~

~~(2)Includes shares purchased for tax withholding purposes outside of our SRP.~~2022.

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ITEM 6. EXHIBITS

The exhibits required to be filed with this report are set forth below and incorporated by reference herein.

Exhibit Number

Description

Reference

2.1

Agreement and Plan of Merger, dated as of May 29, 2022, by and among PotlatchDeltic Corporation, Horizon Merger Sub 2022, LLC, CatchMark Timber Trust, Inc. and CatchMark Timber Operating Partnership, L.P.

Form 8-K filed May 31, 2022, Exhibit 2.1

3.1

Sixth Articles of Amendment and Restatement ~~of CatchMark Timber Trust, Inc. (incorporated by reference to Exhibit 3.1 to the Quarterly Report on~~

Form 10-Q for the quarter ended June 30, 2013 filed on August ~~9, 2013)~~12, 2013, Exhibit 3.1

3.2

First Articles of Amendment to the Sixth Articles of Amendment and Restatement ~~of CatchMark Timber Trust, Inc. (incorporated by reference to Exhibit 3.2 to the Registration Statement on~~

Form S-11 (File No. 333-191322) filed on September 23, 2013, Exhibit 3.2

3.3

Articles of Amendment ~~of CatchMark Timber Trust, Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on~~

Form 8-K filed on October 25, 2013, ~~(the “October 25 Form 8-K”))~~Exhibit 3.1

3.4

Articles of Amendment ~~of CatchMark Timber Trust, Inc. (incorporated by reference to~~

Form 8-K filed on October 25, 2013, Exhibit 3.2 ~~to the October 25 Form 8-K)~~

3.5

Articles Supplementary

~~Articles Supplementary (incorporated by reference to Exhibit 3.3 to the~~Form 8-K filed on October 25, ~~Form 8-K)~~2013, Exhibit 3.3

3.6

Amended and Restated Bylaws ~~(incorporated by reference to Exhibit 3.6 to Registration Statement on~~

Form S-8 (File No. 333-191916) filed on October 25, ~~2013)~~2013, Exhibit 3.6

3.7

Amendment No. 1 to Amended and Restated Bylaws ~~(incorporated by reference to Exhibit 3.1 to the Current Report on~~

Form 8-K filed on January 30, ~~2020)~~2020, Exhibit 3.1

3.8

Amendment No. 2 to Amended and Restated Bylaws

Form 8-K filed May 31, 2022, Exhibit 3.1

10.1

* +

~~Fifth Agreement Regarding Consents~~Amended and Amendments, dated as of August 4, 2021, by and among the Company, the Borrower, the Company’s wholly-owned subsidiaries, CoBank, ACB, as administrative agent, and certain financial institutions named therein, as lenders ~~(incorporated~~ ~~herein~~ ~~by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on~~ ~~August 5, 2021)~~Restated Change in Control Severance Protection Plan

31.1*31.1

Certification of the Principal Executive Officer of the Company, pursuant to Securities Exchange Act Rule 13a-14 and 15d-14 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of ~~200~~22002

31.2*31.2

Certification of the Principal Financial Officer of the Company, pursuant to Securities Exchange Act Rules 13a-14 and 15d-14 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1*32.1

Certification of the Principal Executive Officer and Principal Financial Officer of the Company, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS*101.INS

XBRL Instance Document — the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH*101.SCH

XBRL Taxonomy Extension Schema Document

101.CAL*101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*101.LAB

XBRL Taxonomy Extension Label Linkbase Document

101.PRE*101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

104*104

Cover Page Interactive Data File (embedded within the Inline XBRL document and contained in Exhibit 101)

* Filed herewith.

+ Management contract or compensatory plan or arrangement.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

CATCHMARK TIMBER TRUST, INC.

(Registrant)

Date:

~~November~~August 4, ~~2021~~2022

By:

/s/ Ursula Godoy-Arbelaez

Ursula Godoy-Arbelaez
Chief Financial Officer, Senior Vice President, and Treasurer
(Principal Financial Officer and Principal Accounting Officer)


	As of September 30, 2021
(in thousands)	Gross		Accumulated Depletion or Amortization		Net
Timber	$	184,635	$	13,473	$	171,162
Timberlands	299,099		—		299,099
Mainline roads	1,052		872		180
Timber and timberlands	$	484,786	$	14,345	$	470,441


Acres by state as of September 30, 2021 (1)	Fee	Lease	Total
Alabama	65,600	1,800	67,400
Georgia	221,100	12,000	233,100
South Carolina	69,600	—	69,600
Total	356,300	13,800	370,100


	Restricted Stock			LTIP Units
	Number of Shares	Weighted-Average Grant Date Fair Value		Number of Units	Weighted-Average Grant Date Fair Value
Unvested as of December 31, 2020	20,744	$	8.17	25,302	$	8.30
Granted	5,838	$	11.99	23,353	$	11.99
Vested	(20,744)	$	8.17	(25,302)	$	8.30
Forfeited	—	$	—	—	$	—
Unvested as of September 30, 2021	5,838	$	11.99	23,353	$	11.99


(dollar amounts in thousands)		Repayments		Outstanding Balance as of October 15, 2021
Credit Facility	Maturity Date
Term Loan A-1	12/23/2024	$	15,294	$	84,706
Term Loan A-2	12/1/2026	10,294		89,706
Term Loan A-4	8/22/2025	14,412		125,588
Total		$	40,000	$	300,000


(in millions)	Tons
Merchantable timber inventory (1)	Fee	Lease	Total
Pulpwood	6.1	0.2	6.3
Sawtimber (2)	7.6	0.3	7.9
Total	13.7	0.5	14.2


	As of September 30, 2021
	Dawsonville Bluffs Joint Venture	Triple T Joint Venture
Ownership percentage	50.0%	22.0%	(1)
Acreage owned by the joint venture	—	773,600
Merchantable timber inventory (million tons)	—	30.1	(2)
Location	Georgia	Texas


Timber sales revenue	$	47,085		$	46,222		2	%

Timber sales volume (tons)
Pulpwood	853,702			1,017,617			(16)	%
Sawtimber (1)	603,031			651,509			(7)	%
	1,456,733			1,669,126			(13)	%

Harvest Mix
Pulpwood	59		%	61		%
Sawtimber (1)	41		%	39		%
Delivered % as of total volume	74		%	62		%
Stumpage % as of total volume	26		%	38		%

Net timber sales price (per ton) (2)
Pulpwood	$	14		$	13		8	%
Sawtimber (1)	$	25		$	23		11	%

Timberland sales
Gross sales	$	13,111		$	8,882		48	%
Acres sold	7,100			5,200			37	%
% of fee acres	1.9		%	1.3		%
Price per acre (3)	$	1,828		$	1,710		7	%

Large Dispositions (4)
Gross sales	$	7,536		$	21,250		(65)	%
Acres sold	5,000			14,400			(65)	%
Price per acre (6)	$	1,522		$	1,474		3	%
Gain on large dispositions	$	759		$	1,274		(40)	%

Pacific Northwest
Timber sales revenue	$	9,025		$	6,177		46	%

Timber sales volume (tons)
Pulpwood	5,438			10,458			(48)	%
Sawtimber	84,790			63,746			33	%
	90,228			74,204			22	%

Harvest Mix
Pulpwood	6		%	14		%
Sawtimber	94		%	86		%
Delivered % as of total volume	100		%	95		%
Stumpage % as of total volume	—		%	5		%

Delivered timber sales price (per ton) (2)(5)
Pulpwood	$	31		$	30		3	%
Sawtimber	$	104		$	94		11	%


	Three Months Ended September 30, 2020		Changes attributable to:				Three Months Ended September 30, 2021
(in thousands)			Price/Mix		Volume
Timber sales (1)
Pulpwood	$	8,499	$	457	$	(1,131)	$	7,825
Sawtimber (2)	9,561		538		(2,074)		8,025
	$	18,060	$	995	$	(3,205)	$	15,850


Period	Total Number of Shares Repurchased (2)	Average Price Paid per Share (2)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)	Average Price Paid per Share (1)		Maximum Number (Or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (1)
July 1 - July 31	5,810	$	11.58	—	$	—	$	13.7	million
August 1 - August 31	—	$	—	—	$	—	$	13.7	million
September 1 - September 30	—	$	—	—	$	—	$	13.7	million
Total	5,810			—