SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) February 17, 1999
-----------------
U.S. Timberlands Company, L.P.
U.S. Timberlands Klamath Falls, LLC
U.S. Timberlands Finance Corp.
---------------------------------------------------------------
(Exact name of registrant as specified in charter)
0-23259 91-1842156
1-13573-01 93-1217136
Delaware 1-13573 91-1851612
--------------- ------------ -------------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
625 Madison Avenue, Suite 10-B, New York, NY 10022
- --------------------------------------------------------------------------------
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code 212-755-1100
------------
<PAGE>
Item 5. Other Events.
On February 17, 1999, the Registrant issued a press release announcing,
among other things, the revision of its second and third quarter 1998 results to
reflect the deferral of approximately $4.8 of previously reported revenues under
stumpage contracts entered into during such quarters. The press release also
provided revised unaudited financial data for the second and third quarters of
1998.
A copy of the press release containing the announcement is filed herewith
as an exhibit and is incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
No financial statements or pro forma financial information are required to
be filed as a part of this report. The exhibits filed as part of this report are
listed in the Exhibit Index hereto.
Date: March 9, 1999
U.S. Timberlands Company, L.P. (Registrant)
By: U.S. Timberlands Service Co., LLC
By: /s/ John Rudey
------------------------------------
John Rudey, Chief Executive Officer
U.S. TIMBERLANDS KLAMATH FALLS, LLC
By: U.S. Timberlands Services Company, LLC
By: /s/ John Rudey
------------------------------------
John Rudey, Chief Executive Officer
U.S. TIMBERLANDS FINANCE CORP.
By: /s/ John Rudey
------------------------------------
John Rudey, Chairman
EXHIBITS
99.1 Press Release Issued by the Registrant on February 17, 1999.
<PAGE>
EXHIBIT 99.1
Contacts: Greg Byrne Stefanie King
U.S. Timberlands Company, L.P. Edelman Financial
(212) 755-1100 (212) 704-8291
U.S. Timberlands Reports Fourth Quarter and Year-End Cash Flow and Earnings
Company to Revise Second and Third Quarter Financial Statements to Reflect
Deferral of Approximately $4.8 Million of Previously Reported Revenue and
EBITDDA
New York, New York, February 17, 1999 -- U.S. Timberlands Company, L.P. (Nasdaq:
TIMBZ) today announced cash flow and operating results for the fourth quarter
and year ended December 31, 1998 and its decision to revise its second and third
quarter results to reflect the deferral of approximately $4.8 million of
previously reported 1998 second and third quarter revenues and EBITDDA.
Cash flow for the fourth quarter of 1998, as measured by EBITDDA, was $12.8
million, or $0.98 per unit, compared to cash flow of $28.7 million, or $2.18 per
unit, for the fourth quarter of 1997. EBITDDA is defined as operating income
plus depletion, depreciation, road amortization and cost of timber and property
sales. The Company reported net income for the fourth quarter of $0.6 million,
or $0.05 per unit, compared with net income before extraordinary item of $5.5
million, or $0.42 per unit, for the same period in 1997. Fourth quarter 1997
results include a $5.8 million non-cash charge for the write-off of deferred
financing costs in connection with the retirement of certain debt upon
completion of U.S. Timberlands' initial public offering in November 1997.
Adjusted for this extraordinary item, U.S. Timberlands reported a net loss of
$0.3 million or a loss of $0.02 per unit in the fourth quarter of 1997. Included
in the 1998 fourth quarter net income is $0.9 million of income from the partial
reversal of $1.9 million of non-cash charges taken in 1998 and 1997 to
mark-to-market a financial instrument in accordance with FAS 80. In the fourth
quarter of 1997, a $0.6 million non-cash charge was taken to mark the financial
instrument to market. The term of the financial instrument expires in 1999.
Revenues for the fourth quarter of 1998 were $20.4 million compared with $36.3
million for the same period in 1997. Revenues for the fourth quarter of 1997
included $11.7 million from the sale of timberlands.
Cash flow for the full year 1998, as measured by EBITDDA, was $44.2 million, or
$3.37 per unit, compared to cash flow of $53.3 million, or $4.06 per unit, for
the same period of 1997. The Company reported a net loss in 1998 of $6.4
million, or a loss of $0.49 per unit, compared with a
-more-
<PAGE>
loss before extraordinary item of $1.4 million, or a loss of $0.10, for the same
period in 1997. Results for the year ended 1997 included $9.3 million in
non-cash charges for the write-off of deferred financing costs related to
extinguishment of debt. Adjusted for this extraordinary item, U.S. Timberlands
reported a net loss of $10.7 million, or a loss of $0.82 per unit for 1997.
Revenues for the full year 1998 were $71.3 million compared with $77.3 million
for the same period in 1997.
As previously announced, the fourth quarter distribution to Unitholders of $.50
per unit was paid on February 12, 1999 to Unitholders of record as of February
2, 1999.
The Company also announced today that during its year end audit, it was
determined that $5.5 million of revenue under certain stumpage contacts should
be deferred from 1998 into subsequent years. Of this amount, $4.8 million had
been recognized in the second and third quarters of 1998, and $0.7 million
applied to the fourth quarter of 1998. During 1998, the Company, with the
counsel of its then existing accounting firm and legal counsel, developed a
stumpage contract by which the Company recognized revenue at contract execution
and achieved capital gains treatment under such contracts when the purchasers
actually removed the timber from U.S. Timberlands' property. The Company is
party to six such contracts. Each contract allows the purchaser, over a two-year
period, to remove all specified timber in designated portions of the Company's
forests. The contracts provide for an initial payment with additional monies
paid as timber is removed at agreed upon unit prices, with specific liquidated
damages in the event that the purchaser does not remove all of the specified
timber by contract expiration. Management expects that substantially all
deferred revenues will be recognized in 1999.
The deferral of the stumpage contract revenues caused the Company to be in
non-compliance with certain of its bank covenants at year-end. The required
majority of the banks have waived such non-compliance so that the Company is not
in default under its credit agreement with the banks. In exchange for the
waiver, the Company agreed that future borrowings in excess of $2.0 million will
require the consent of the majority of the banks. The Company currently has no
borrowings outstanding under its credit agreement with the banks and it had no
outstanding borrowings at year-end. Management believes the Company has access
to adequate resources to meet all its operating and distribution obligations for
the next year.
John M. Rudey, Chairman, President and Chief Executive Officer, stated, "We are
pleased with our operating performance during 1998 and the progress we have made
in implementing a new and comprehensive management information, reporting and
control system. Our new management team is prepared to take advantage of a
number of business opportunities that will allow the Company to diversify and
expand into new areas that should be accretive to cash flow."
U.S. Timberlands Company, L.P. owns 617,000 fee acres of timberland and cutting
rights on 3,000 acres of timberland containing total merchantable timber volume
estimated to be approximately 2.0 billion board feet in Oregon east of the
Cascade Range. U.S. Timberlands specializes in the growing of trees and the sale
of logs and standing timber. Logs harvested from the timberlands are sold to
unaffiliated domestic conversion facilities. These logs are processed
-more-
<PAGE>
for sale as lumber, molding products, doors, millwork, commodity, specialty and
overlaid plywood products, laminated veneer lumber, engineered wood I-beams,
particleboard, hardboard, paper and other wood products. These products are used
in residential, commercial and industrial construction, home remodeling and
repair and general industrial applications as well as a variety of paper
products. U.S. Timberlands also owns and operates its own seed orchard and
produces approximately five million conifer seedlings annually from its nursery,
approximately two hundred fifty thousand of which are used for its own internal
reforestation programs, with the balance sold to other forest products
companies.
Certain information discussed in this press release may constitute
forward-looking statements within the meaning of the federal securities law.
Although U.S. Timberlands believes that expectations reflected in such
forward-looking statements are based upon reasonable assumptions, it can give no
assurance that its expectations will be achieved. Forward-looking information is
subject to certain risks, trends, and uncertainties that could cause actual
results to differ materially from those projected. Such risks, trends and
uncertainties include the highly cyclical nature of the forest products
industry, economic conditions in export markets, the possibility that timber
supply could increase if governmental, environmental or endangered species
policies change, and limitations on U.S. Timberlands' ability to harvest its
timber due to adverse natural conditions or increased governmental restrictions.
For a more complete description of factors which could impact U.S. Timberlands
and the statements contained herein, reference should be made to U.S.
Timberlands' filings with the United States Securities and Exchange Commission.
(financial statements to follow)
<PAGE>
U.S. TIMBERLANDS COMPANY, L.P.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In Thousands, Except Per Unit Information)
(Unaudited)
<TABLE>
<CAPTION>
Quarter Ended December 31,
1998 1997
------------ ------------
<S> <C> <C>
Revenues $ 20,417 $ 36,288
Cost and expenses:
Cost of goods sold 4,237 5,440
Cost of timber and property sales -- 7,555
Depletion, depreciation and road amortization 7,448 6,545
Silviculture 321 237
Selling, general and administrative 3,047 1,950
------------ ------------
Total cost and expenses 15,053 21,727
------------ ------------
Operating income 5,364 14,561
Interest expense 5,497 7,503
Interest income (121) (260)
Financing fees 169 1,239
Other (income) expense - net (829) 622
------------ ------------
Income before extraordinary item 648 5,457
Extraordinary item -- loss on extinguishment of debt -- 5,766
------------ ------------
------------ ------------
Net income (loss) $ 648 $ (309)
============ ============
Income per Unit (before extraordinary item in 1997) (A) $ 0.05 $ 0.42
============ ============
Units outstanding (A) 12,859,607 12,859,607
============ ============
EBITDDA(B) $ 12,812 $ 28,661
============ ============
EBITDDA per Unit (A) $ 0.98 $ 2.18
============ ============
</TABLE>
(A) Units outstanding used to compute net income (loss) and EBITDDA per unit are
based on the weighted average number of units outstanding. The 1997 weighted
average units outstanding assumes that the units issued in the Company's initial
public offering were issued as of January 1, 1997. Calculations of per unit
amounts are made after giving effect to the General Partner's allocation of net
income (loss) or EBITDDA.
(B) EBITDDA is defined as operating income plus depletion, depreciation, road
amortization and cost of timber and property sales.
<PAGE>
U.S. TIMBERLANDS COMPANY, L.P.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In Thousands, Except Per Unit Information)
<TABLE>
<CAPTION>
Twelve Months Ended December 31,
--------------------------------
1998 1997
------------ ------------
(Unaudited)
<S> <C> <C>
Revenues $ 71,324 $ 77,345
Cost and expenses:
Cost of goods sold 15,950 16,885
Cost of timber and property sales 5,917 8,746
Depletion, depreciation and road amortization 21,938 17,303
Silviculture 733 893
Selling, general and administrative 10,462 6,250
------------ ------------
Total cost and expenses 55,000 50,077
------------ ------------
Operating income 16,324 27,268
Interest expense 22,182 25,321
Interest income (460) (1,452)
Financing fees 675 4,193
Other (income) expense - net 310 574
------------ ------------
Loss before extraordinary item (6,383) (1,368)
Extraordinary item -- loss on extinguishment of debt -- 9,337
------------ ------------
Net loss $ (6,383) $ (10,705)
============ ============
Loss per Unit (before extraordinary item in 1997) (A) $ (0.49) $ (0.10)
============ ============
Units outstanding (A) 12,859,607 12,859,607
============ ============
EBITDDA (B) $ 44,179 $ 53,317
============ ============
EBITDDA per Unit (A) $ 3.37 $ 4.06
============ ============
</TABLE>
(A) Units outstanding used to compute net loss and EBITDDA per unit are based on
the weighted average number of units outstanding. The 1997 weighted average
units outstanding assumes that the units issued in the Company's initial public
offering were issued as of January 1, 1997. Calculations of per unit amounts are
made after giving effect to the General Partner's allocation of net loss or
EBITDDA.
(B) EBITDDA is defined as operating income plus depletion, depreciation, road
amortization and cost of timber and property sales.
<PAGE>
U.S. TIMBERLANDS COMPANY, L.P.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
<TABLE>
<CAPTION>
December 31, December 31,
1998 1997
------------ ------------
(Unaudited)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 4,824 $ 10,625
Accounts receivable -- net 1,527 2,526
Prepaid and other 2,717 1,781
------------ ------------
Total current assets 9,068 14,932
Timber, timberlands and roads - net 332,593 359,349
Seed orchard and nursery stock 1,883 1,828
Property, plant and equipment - net 1,155 1,261
Long term receivable -- 1,171
Deferred financing fees 5,998 6,673
------------ ------------
Total assets $ 350,697 $ 385,214
============ ============
Liabilities
Current liabilities:
Accounts payable and accrued liabilities $ 6,052 $ 7,353
Deferred revenue 1,614 5,744
------------ ------------
Total current liabilities 7,666 13,097
Long-term debt 225,000 225,000
Minority interest 1,180 1,471
Partners' Capital
Partners' capital 116,851 145,646
------------ ------------
Total liabilities and partners' capital $ 350,697 $ 385,214
============ ============
</TABLE>
<PAGE>
U.S. TIMBERLANDS COMPANY, L.P.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In Thousands)
<TABLE>
<CAPTION>
Twelve Months Ended December 31,
--------------------------------
1998 1997
------------ ------------
(Unaudited)
<S> <C> <C>
Cash Flows From Operating Activities:
Net loss $ (6,383) $ (10,705)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation, depletion, road amortization and
cost of timberland sold 27,855 26,775
Deferred financing fees 675 9,148
Other non-cash items 361 630
Working capital changes - net (6,134) 435
------------ ------------
Net cash provided by operating activities 16,374 26, 283
Cash Flows From Investing Activities:
Ochoco acquisition -- (110,873)
Timber and road additions - net (348) (534)
Repayment of receivable from affiliate -- 10,000
Capitalized seed orchard and nursery costs - net (263) (240)
Purchase of property, plant and equipment - net (33) (319)
Proceeds from sale of logging equipment -- 400
------------ ------------
Net cash used in investing activities (644) (101,566)
Cash Flows From Financing Activities:
Long-term borrowings -- 510,000
Repayment of long-term borrowings -- (590,000)
Deferred financing fees -- (12,720)
Partner Contribution -- 1
Distribution to Unitholders (22,701) --
Distribution to member -- (1,191)
Long term notes receivable - net 1,170 --
Common Units Offering costs -- (16,922)
Common Units Offering proceeds -- 180,127
------------ ------------
Net cash (used in) or provided by financing activities (21,531) 69,295
------------ ------------
Decrease in cash and cash equivalents (5,801) (5,988)
Cash and cash equivalents - beginning of period 10,625 16,613
------------ ------------
Cash and cash equivalents - end of period $ 4,824 $ 10,625
============ ============
</TABLE>
<PAGE>
U.S. TIMBERLANDS COMPANY, L.P.
CONDENSED RESTATED QUARTERLY CONSOLIDATED STATEMENT OF OPERATIONS
(In Thousands, Except Per Unit Information)
(Unaudited)
<TABLE>
<CAPTION>
Quarter Ended June 30, 1998
-----------------------------------------------
As Previously
Reported Adjustments (C) Restated
------------- --------------- ------------
<S> <C> <C> <C>
Revenues $ 21,814 $ (3,192) $ 18,622
Cost and expenses:
Cost of goods sold 4,246 (232) 4,014
Cost of timber and property sales 5,917 -- 5,917
Depletion, depreciation and road amortization 5,173 (1,216) 3,957
Silviculture -- 235 235
Selling, general and administrative 1,763 (3) 1,760
------------ ------------ ------------
Total cost and expenses 17,099 (1,216) 15,883
------------ ------------ ------------
Operating income 4,715 (1,976) 2,739
Interest expense 5,635 -- 5,635
Interest income (94) -- (94)
Financing fees 169 -- 169
Other (income) expense - net (85) -- (85)
------------ ------------ ------------
Net Loss $ (910) $ (1,976) $ (2,886)
============ ============ ============
Loss per Unit (A) $ (0.07) $ (0.15) $ (0.22)
============ ============ ============
Units outstanding (A) 12,859,607 -- 12,859,607
============ ============ ============
EBITDDA (B) $ 15,804 $ (3,192) $ 12,612
============ ============ ============
EBITDDA per Unit (A) $ 1.20 $ (0.24) $ 0.96
============ ============ ============
</TABLE>
(A) Units outstanding used to compute net loss and EBITDDA per unit are
based on the weighted average number of units outstanding. Calculations of
per unit amounts are made after giving effect to the General Partner's
allocation of net loss or EBITDDA.
(B) EBITDDA is defined as operating income plus depletion, depreciation,
road amortization and cost of timber and property sales.
(C)The adjustment is the effect of deferring the recognition of revenue
from certain stumpage contracts to the period when the timber is
harvested. Revenues from these contracts were previously reported in the
period the contracts were executed.
<PAGE>
U.S. TIMBERLANDS COMPANY, L.P.
CONDENSED RESTATED QUARTERLY CONSOLIDATED STATEMENT OF OPERATIONS
(In Thousands, Except Per Unit Information)
(Unaudited)
<TABLE>
<CAPTION>
Quarter Ended September 30, 1998
----------------------------------------------
As Previously
Reported Adjustments (C) Restated
------------- --------------- ------------
<S> <C> <C> <C>
Revenues $ 26,096 $ (1,568) $ 24,528
Cost and expenses:
Cost of goods sold 5,024 -- 5,024
Cost of timber and property sales -- -- --
Depletion, depreciation and road amortization 8,561 (787) 7,774
Silviculture 200 -- 200
Selling, general and administrative 2,026 -- 2,026
------------ ------------ ------------
Total cost and expenses 15,811 (787) 15,024
------------ ------------ ------------
Operating income 10,285 (781) 9,504
Interest expense 5,587 -- 5,587
Interest income (116) 46 (70)
Financing fees 169 -- 169
Other (income) expense - net 1,248 -- 1,248
------------ ------------ ------------
Net Income $ 3,397 $ (827) $ 2,570
============ ============ ============
Income per Unit (A) $ 0.26 $ (0.06) $ 0.20
============ ============ ============
Units outstanding (A) 12,859,607 -- 12,859,607
============ ============ ============
EBITDDA (B) $ 18,846 $ (1,568) $ 17,278
============ ============ ============
EBITDDA per Unit (A) $ 1.44 $ (0.12) $ 1.32
============ ============ ============
</TABLE>
(A) Units outstanding used to compute net income and EBITDDA per unit are
based on the weighted average number of units outstanding. Calculations of
per unit amounts are made after giving effect to the General Partner's
allocation of net income or EBITDDA.
(B) EBITDDA is defined as operating income plus depletion, depreciation,
road amortization and cost of timber and property sales.
(C)The adjustment is the effect of deferring the recognition of revenue
from certain stumpage contracts to the period when the timber is
harvested. Revenues from these contracts were previously reported in the
period the contracts were executed.
<PAGE>
U.S. TIMBERLANDS COMPANY, L.P.
CONDENSED RESTATED CONSOLIDATED BALANCE SHEETS
(In Thousands)
(Unaudited)
<TABLE>
<CAPTION>
June 30, 1998
------------------------------------------------
As Previously
Reported Adjustments (A) Restated
------------- --------------- ------------
<S> <C> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 3,334 $ -- $ 3,334
Accounts receivable -- net 3,920 -- 3,920
Prepaid and other 2,040 (1,737) 303
------------ ------------ ------------
Total current assets 9,294 (1,737) 7,557
Timber, timberlands and roads - net 346,080 1,217 347,297
Seed orchard and nursery stock 1,640 8 1,648
Property, plant and equipment - net 1,227 -- 1,227
Long term receivable 1,592 (599) 993
Deferred financing fees 6,336 -- 6,336
------------ ------------ ------------
Total assets $ 366,169 $ (1,111) $ 365,058
============ ============ ============
Liabilities
Current liabilities:
Accounts payable and accrued liabilities $ 6,203 $ -- $ 6,203
Deferred revenue 5,053 865 5,918
------------ ------------ ------------
Total current liabilities 11,256 865 12,121
Long-term debt 225,000 -- 225,000
Minority interest 1,299 (20) 1,279
Partners' Capital
Partners' capital 128,614 (1,956) 126,658
------------ ------------ ------------
Total liabilities and partners' capital $ 366,169 $ (1,111) $ 365,058
============ ============ ============
</TABLE>
(A) The adjustment is the effect of deferring the recognition of revenue
from certain stumpage contracts to the period when the timber is
harvested. Revenues from these contracts were previously reported in the
period the contracts were executed.
<PAGE>
U.S. TIMBERLANDS COMPANY, L.P.
CONDENSED RESTATED CONSOLIDATED BALANCE SHEETS
(In Thousands)
(Unaudited)
<TABLE>
<CAPTION>
September 30, 1998
--------------------------------------------
As Previously
Reported Adjustments (A) Restated
------------- --------------- ------------
<S> <C> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 10,936 $ -- $ 10,936
Accounts receivable -- net 4,449 -- 4,449
Prepaid and other 4,081 (2,845) 1,236
------------ ------------ ------------
Total current assets 19,466 (2,845) 16,621
Timber, timberlands and roads - net 337,631 2,005 339,636
Seed orchard and nursery stock 1,768 -- 1,768
Property, plant and equipment - net 1,194 -- 1,194
Long term receivable 678 (678) --
Deferred financing fees 6,167 -- 6,167
------------ ------------ ------------
Total assets $ 366,904 $ (1,518) $ 365,386
============ ============ ============
Liabilities
Current liabilities:
Accounts payable and accrued liabilities $ 12,389 $ -- $ 12,389
Deferred revenue 2,766 1,285 4,051
------------ ------------ ------------
Total current liabilities 15,155 1,285 16,440
Long-term debt 225,000 -- 225,000
Minority interest 1,267 (28) 1,239
Partners' Capital
Partners' capital 125,482 (2,775) 122,707
------------ ------------ ------------
Total liabilities and partners' capital $ 366,904 $ (1,518) $ 365,386
============ ============ ============
</TABLE>
(A) The adjustment is the effect of deferring the recognition of revenue
from certain stumpage contracts to the period when the timber is
harvested. Revenues from these contracts were previously reported in the
period the contracts were executed.
<PAGE>
U.S. TIMBERLANDS COMPANY, L.P.
CONDENSED RESTATED CONSOLIDATED STATEMENT OF CASH FLOWS
(In Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30, 1998
-------------------------------------------
As Previously
Reported Adjustments (A) Restated
------------- --------------- --------
<S> <C> <C> <C>
Cash Flows From Operating Activities:
Net Loss $ (7,624) $ (1,976) $ (9,600)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation, depletion, road amortization and
cost of timberland sold 13,850 (1,217) 12,633
Deferred financing fees 337 -- 337
Other non-cash items -- -- --
Working capital changes - net (3,510) 2,561 (949)
-------- -------- --------
Net cash provided by operating activities 3,053 (632) 2,421
Cash Flows From Investing Activities:
Timber and road additions - net (252) 34 (218)
Capitalized seed orchard and nursery costs - net (63) -- (63)
Purchase of property, plant and equipment - net (28) -- (28)
-------- -------- --------
Net cash used in investing activities (343) 34 (309)
Cash Flows From Financing Activities:
Distribution to Unitholders (9,580) -- (9,580)
Distribution to member -- -- --
Long term receivables - net (421) 598 177
-------- --------
Net cash used in financing activities (10,001) 598 (9,403)
-------- -------- --------
(7,291) -- (7,291)
Decrease in cash and cash equivalents
Cash and cash equivalents - beginning of period 10,625 -- 10,625
-------- -------- --------
Cash and cash equivalents - end of period $ 3,334 $ -- $ 3,334
======== ======== ========
</TABLE>
(A) The adjustment is the effect of deferring the recognition of revenue
from certain stumpage contracts to the period when the timber is
harvested. Revenues from these contracts were previously reported in the
period the contracts were executed.
<PAGE>
U.S. TIMBERLANDS COMPANY, L.P.
CONDENSED RESTATED CONSOLIDATED STATEMENT OF CASH FLOWS
(In Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30, 1998
------------------------------------------
As Previously
Reported Adjustments (A) Restated
------------- --------------- ----------
<S> <C> <C> <C>
Cash Flows From Operating Activities:
Net Loss $ (4,227) $ (2,803) $ (7,030)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation, depletion, road amortization and
cost of timberland sold 22,411 (2,005) 20,406
Deferred financing fees 506 -- 506
Other non-cash items 1,270 -- 1,270
Working capital changes - net (3,532) 4,132 600
-------- -------- --------
Net cash provided by operating activities 16,428 (676) 15,752
Cash Flows From Investing Activities:
Timber and road additions - net (530) -- (530)
Capitalized seed orchard and nursery costs - net 92 -- 92
Purchase of property, plant and equipment - net (32) -- (32)
-------- -------- --------
Net cash used in investing activities (470) -- (470)
Cash Flows From Financing Activities:
Distribution to Unitholders (16,140) -- (16,140)
Distribution to member -- -- --
Long term receivables - net 493 676 1,169
-------- -------- --------
Net cash used in financing activities (15,647) 676 (14,971)
-------- -------- --------
311 -- 311
Increase in cash and cash equivalents
Cash and cash equivalents - beginning of period 10,625 -- 10,625
-------- -------- --------
Cash and cash equivalents - end of period $ 10,936 $ -- $ 10,936
======== ======== ========
</TABLE>
(A) The adjustment is the effect of deferring the recognition of revenue
from certain stumpage contracts to the period when the timber is
harvested. Revenues from these contracts were previously reported in the
period the contracts were executed.
