================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM 10-Q
--------------------------
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 1998
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
Commission file numbers 1-13573-01 and 1-13573
--------------------------
U.S. TIMBERLANDS KLAMATH FALLS, L.L.C.
U.S. TIMBERLANDS FINANCE CORP.
(Exact names of co-registrants as specified in their charters)
Delaware 93-1217136
Delaware 91-1851612
(State or other jurisdiction of (I.R.S. Employer
incorporation Identification No.)
or organization)
1301 Fifth Avenue, Suite 3725, Seattle, 98101-2636
Washington (Zip Code)
(Address of principal executive offices)
Co-registrants telephone number, including area code: 206-652-5000
--------------------------
Indicate by check mark whether the co-registrants (1) have 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
co-registrants were required to file such reports), and (2) have been subject to
such filing requirements for the past 90 days.
Yes |X| No |_|
================================================================================
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
U.S. TIMBERLANDS KLAMATH FALLS, L.L.C.
CONSOLIDATED STATEMENT OF OPERATIONS
(In Thousands)
(Unaudited)
Quarter Ended June 30,
---------------------------
1998 1997
------------ -------------
Revenues $ 21,814 $ 11,462
Costs and expenses:
Cost of goods sold 4,246 4,286
Cost of timberland sales 5,917 -
Depletion, depreciation and road amortization 5,173 3,035
Selling, general and administrative 1,763 1,702
------------ -------------
Total costs and expenses 17,099 9,023
------------ -------------
Operating income 4,715 2,439
Interest expense 5,635 5,558
Interest income (94) (408)
Financing fees 169 1,199
Other income - net (85) (83)
------------ -------------
Net loss $ (910) $ (3,827)
============ =============
See accompanying Notes to Consolidated Financial Statements
Page 2 of 15
<PAGE>
U.S. TIMBERLANDS KLAMATH FALLS, L.L.C.
CONSOLIDATED STATEMENT OF OPERATIONS
(In Thousands)
Six Months Ended June 30,
---------------------------
1998 1997
------------ -------------
(Unaudited) (Audited)
Revenues $ 29,571 $ 23,796
Costs and expenses:
Cost of goods sold 6,899 7,811
Cost of timberland sales 5,917 -
Depletion, depreciation and road amortization 7,933 6,586
Selling, general and administrative 5,390 2,892
------------ -------------
Total costs and expenses 26,139 17,289
------------ -------------
Operating income 3,432 6,507
Interest expense 11,098 10,877
Interest income (269) (774)
Financing fees 337 2,198
Other income - net (110) (20)
------------ -------------
Net loss $ (7,624) $ (5,774)
============ =============
See accompanying Notes to Consolidated Financial Statements
Page 3 of 15
<PAGE>
U.S. TIMBERLANDS KLAMATH FALLS, L.L.C.
CONSOLIDATED BALANCE SHEETS
(In Thousands)
June 30, December 31,
1998 1997
----------- ----------
(Unaudited) (Audited)
Assets
Current assets:
Cash and cash equivalents $ 3,334 $ 10,625
Accounts receivable - net 3,920 2,526
Prepaid expenses and other assets 2,040 1,781
-------- --------
Total current assets 9,294 14,932
Timber, timberlands and roads - net 346,080 359,349
Seed orchard and nursery stock 1,640 1,828
Property, plant and equipment - net 1,227 1,261
Notes receivable 1,592 1,171
Deferred financing fees 6,336 6,673
-------- --------
Total assets $366,169 $385,214
======== ========
Liabilities
Current liabilities:
Accounts payable and accrued liabilities $ 6,203 $ 7,353
Deferred revenue 5,053 5,744
-------- --------
Total current liabilities 11,256 13,097
Long-term debt 225,000 225,000
Members' equity
Managing member's interest 1,299 1,471
Non-managing member's interest 128,614 145,646
-------- --------
Total liabilities and member's equity $366,169 $385,214
======== ========
See accompanying Notes to Consolidated Financial Statements
Page 4 of 15
<PAGE>
U.S. TIMBERLANDS KLAMATH FALLS, L.L.C.
CONSOLIDATED STATEMENT OF CASH FLOWS
(In Thousands)
Six Months Ended June 30,
--------------------------
1998 1997
----------- ----------
(Unaudited) (Audited)
Cash Flows From Operating Activities:
Net loss $ (7,624) $ (5,774)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depletion, depreciation, road amortization and
cost of timber and timberland sold 13,850 6,934
Amortization of deferred financing fees 337 348
Working capital changes - net (3,510) 4,615
-------- --------
Net cash provided by operating activities 3,053 6,123
Cash Flows From Investing Activities:
Timber and road additions (252) (326)
Repayment of receivable from affiliate -- 10,000
Capitalized seed orchard and nursery costs (63) (81)
Purchase of property, plant and equipment (28) (283)
Proceeds from sale of logging equipment -- 400
-------- --------
Net cash provided by (used in) investing activities (343) 9,710
Cash Flows From Financing Activities:
Distribution to members (9,580) (1,191)
Long-term receivables - net (421) --
Deferred offering costs - common units -- (868)
-------- --------
Net cash used in financing activities (10,001) (2,059)
-------- --------
Increase (decrease) in cash and cash equivalents (7,291) 13,774
Cash and cash equivalents - beginning of period 10,625 16,613
-------- --------
Cash and cash equivalents - end of period $ 3,334 $ 30,387
======== ========
Supplemental Cash Flow Information:
Cash paid for interest $ 10,588 $ 6,786
======== ========
See accompanying Notes to Consolidated Financial Statements
Page 5 of 15
<PAGE>
U.S. TIMBERLANDS KLAMATH FALLS, L.L.C.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except as otherwise indicated)
(Unaudited)
1. Organization, Nature Of Operations And Basis Of Presentation
Organization
The accompanying consolidated financial statements include the accounts of
U.S. Timberlands Klamath Falls, L.L.C. ("USTK"), a Delaware limited liability
company, and its wholly owned subsidiary, U.S. Timberlands Finance Corp.
("Finance Corp."), collectively referred to hereafter as the Company. Finance
Corp. serves as co-obligor with USTK for $225 million of senior unsecured notes
issued by the Company in a public offering November 13, 1997 (the "Notes").
Finance Corp. has nominal assets and does not conduct any operations. All
significant intercompany transactions have been eliminated in consolidation.
U.S. Timberlands Company, L.P. (the "Master Partnership") owns a 99%
non-managing member interest in USTK. The Master Partnership was formed June 27,
1997 to acquire and own the business and assets of U.S. Timberlands Management
Company, L.L.C. U.S. Timberlands Services Company, L.L.C. (the "Managing
Member") manages the business of the Company and owns a 1% managing member
interest in USTK. The Managing Member also owns a 1% general partner interest in
the Master Partnership.
Nature of Operations
The primary activities of the Company are growing trees and selling logs
and standing timber to third party wood processors. The Company's timberlands
are located in Oregon, east of the Cascade Range. Logs harvested from the
Company's timberlands are sold to unaffiliated domestic conversion facilities.
These logs are processed for sale as lumber; molding products; doors; mill work;
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; general industrial applications; and a
variety of paper products. The Company also owns and operates its own seed
orchard and nursery and produces approximately five million genetically selected
conifer seedlings each year. About half of the annual seedling production is
used by the Company for its own reforestation programs; the balance is sold to
other forest products companies.
Basis of Presentation
These consolidated financial statements have been prepared by the Company,
without audit by independent public accountants, pursuant to the rules and
regulations of the United States Securities and Exchange Commission. In the
opinion of management, the consolidated financial statements include all normal
recurring adjustments necessary to present fairly the information required to be
set forth therein. Certain information and note disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted from these statements pursuant to such
rules and regulations and, accordingly, should be read in conjunction with the
consolidated financial statements included in the Company's 1997 Annual Report
on Form 10-K. Certain reclassifications have been made to the 1997 amounts
presented for comparability purposes and have no impact on net income. Operating
results for the six months ended June 30, 1998 are not necessarily indicative of
the results that may be expected for the full year.
Page 6 of 15
<PAGE>
There have been no significant changes in the accounting policies of the
Company. There were no significant changes in the Company's commitments and
contingencies as previously described in the 1997 Annual Report on Form 10-K.
2. Subsequent Event
On July 22, 1998, the Board of Directors of the Managing Member authorized
the Master Partnership to make a distribution of $0.50 per Unit. The total
distribution from the Master Partnership will be $6,495 (including $65 to the
Managing Member) and will be paid on August 14, 1998 to Unitholders of record on
August 4, 1998. All of the cash necessary to make such distribution will be
distributed to the Master Partnership by USTK. In addition, on August 14, 1998,
USTK will distribute $66 to the Managing Member.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Overview
The Company's principal operations consist of the growing and harvesting
of timber and the selling of logs and related by-products. The Company's ability
to implement its business strategy over the long term and its results of
operations depend upon a number of factors, many of which are beyond its
control. These factors include general industry conditions; domestic prices and
supply and demand for logs, which may be indirectly affected by economic
conditions in export markets; seasonality; government regulation and competition
from other supplying regions and substitute products.
Current Market Conditions
The key lumber price indicator for Ponderosa pine for the quarter ended
June 30, 1998 was unchanged from the first quarter of 1998 but decreased 28%
from the quarter ended June 30, 1997. Likewise, the second quarter 1998 product
price indicator for Douglas fir decreased 11% compared to the second quarter of
1997. White fir and Lodgepole pine product price indicators for the second
quarter 1998 decreased 7% and 2%, respectively, from levels in the comparable
period of 1997.
Although product prices for the second quarter of 1998 decreased from
price levels experienced in the second quarter of 1997, the Company's average
log prices were higher than the key price indicators for the second quarter of
1998. This was due primarily to an overall improvement in the Company's market
planning and execution. Advanced sales coordination with customers regarding
desirable log delivery schedules and improved bucking and sorting by contract
loggers enhanced the quality and timing of the Company's sales in the second
quarter of 1998.
Second quarter 1998 prices for the Company's log sales decreased 2%
compared to the second quarter of 1997. Second quarter 1998 log inventories at
customer conversion facilities decreased from first quarter 1998 levels but were
still moderately high and kept demand in line with supply. In addition to the
relatively high second quarter 1998 customer inventory levels, a general decline
in lumber prices caused log converters to hold or lower log price bids.
Page 7 of 15
<PAGE>
During the second quarter of 1998, the Company structured stumpage sales
to meet customer demands for longer-term purchases. Despite an extended spring
breakup that delayed the Company's logging operations, planned harvest levels
for the second quarter of 1998 were met through the sale of two stumpage tracts.
In addition, the Company completed a planned sale of 15,304 acres of timberland
containing 26,600 MBF of timber during the second quarter. The sale, which is
the only sale of timberland planned for 1998, generated $6.3 million in revenue.
Forward-Looking Statements
Certain information contained in this report may constitute
forward-looking statements within the meaning of the federal securities laws.
Although the Company 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 the Company's ability to harvest its timber
due to adverse natural conditions or increased governmental restrictions. These
and other risks are described in the Company's other reports and registration
statements, which are available from the United States Securities and Exchange
Commission.
Results of Operations
Quarter Ended June 30, 1998 Compared to Quarter Ended June 30, 1997
Revenues. Revenues for the quarter ended June 30, 1998 were $21.8 million,
an increase of $10.3 million or 90% over revenues of $11.5 million for the
quarter ended June 30, 1997. This was primarily attributable to a $6.3 million
increase in sales of timberlands and a $3.8 million increase in stumpage sales.
Log and stumpage sales volumes for the quarter ended June 30, 1998 were
34,600 MBF, an increase of 36% over log and stumpage sales volumes of 25,400 MBF
for the quarter ended June 30, 1997. The increase in total sales volumes was
primarily due to increased stumpage sales. The average log and stumpage sales
price for the quarter ended June 30, 1998 was $432 per MBF, slightly lower than
the $433 per MBF average for the quarter ended June 30, 1997. Although product
price indicators for the quarter ended June 30, 1998 were generally lower than
product price indicators for the comparable period in 1997, the Company
maintained its second quarter pricing levels by improving its market planning
and execution. Advanced sales coordination with customers regarding desirable
log delivery schedules and improved bucking and sorting by contract loggers
enhanced the quality and timing of the Company's second quarter 1998 sales.
Revenue from a planned sale of timberland during the quarter ended June
30, 1998 was $6.3 million. There were no such sales of timberland during the
quarter ended June 30, 1997.
Operating Costs. Operating costs were $17.1 million for the quarter ended
June 30, 1998, an increase of $8.1 million or 90% over operating costs of $9.0
million for the quarter ended June 30, 1997. This increase was primarily the
result of a $5.9 million increase in the
Page 8 of 15
<PAGE>
cost of timberland sold and a $2.2 million increase in depreciation, depletion
and road amortization ("DD&A") expenses.
Cost of goods sold ("COGS") was $4.3 million for the quarter ended June
30, 1998, unchanged from cost of goods sold of $4.3 million for the quarter
ended June 30, 1997. COGS remained flat as the Company's second quarter 1998 log
harvest volumes did not change significantly from second quarter 1997 levels.
During the quarter ended June 30, 1998, the Company sold 15,304 acres of
timberland with a cost basis of $5.9 million. No sales of timberland were made
during the quarter ended June 30, 1997.
DD&A expense was $5.2 million for the quarter ended June 30, 1998, a $2.2
million or 70% increase over DD&A expense of $3.0 million for the quarter ended
June 30, 1997. This increase was primarily due to increased stumpage sales and
the increase in the Company's depletion rate, which resulted from the Ochoco
timberlands acquisition in July 1997.
Selling, general and administrative ("SG&A") expenses for the quarter
ended June 30, 1998 were $1.8 million, an increase of 4% over comparable
expenses of $1.7 million for the quarter ended June 30, 1997. This increase was
primarily due to the increased cost of operating as a publicly owned company.
Interest Expense. Interest expense was $5.6 million for the quarter ended
June 30, 1998 and related to the $225.0 million aggregate principal amount of
the Notes. Interest expense of $5.6 million for the quarter ended June 30, 1997
related primarily to $215.0 million of term debt and $90.0 million of revolving
debt incurred in connection with the acquisition of the Klamath Falls
timberlands in August 1996.
Financing Fees. The Company deferred $6.7 million of fees incurred in
connection with the issuance of the Notes. The amortization of these fees during
the quarter ended June 30, 1998 was $0.2 million. During the quarter ended June
30, 1997, the Company recognized $1.2 million of expense related to debt
guarantee fees and amortization of deferred financing fees.
Six Months Ended June 30, 1998 Compared To Six Months Ended June 30, 1997
Revenues. Revenues for the six months ended June 30, 1998 were $29.6
million, an increase of $5.8 million or 24% over revenues of $23.8 million for
the six months ended June 30, 1997. This was primarily attributable to a $6.3
million increase in timberland sales and a $1.2 million increase in stumpage
sales, partially offset by a decrease of $1.8 million in log sales.
Log and stumpage sales volumes for the six months ended June 30, 1998 were
53,000 MBF, a decrease of 8% from log and stumpage sales volumes of 57,800 MBF
for the six months ended June 30, 1997. The decrease in sales volumes was
primarily due to extended spring break-up conditions experienced in the first
quarter of 1998 as compared to the first quarter of 1997. Average log and
stumpage prices increased by 6%, to $428 per MBF for six months ended June 30,
1998 from $403 per MBF for the six months ended June 30, 1997, primarily due to
an increased mix of higher value timber and the results of enhanced marketing
efforts.
Revenue from a planned sale of timberland during the six months ended June
30, 1998 was $6.3 million. There were no such timberland sales during the six
months ended June 30, 1997.
Page 9 of 15
<PAGE>
Operating Costs. Operating costs were $26.1 million for the six months
ended June 30, 1998, an increase of $8.8 million or 51% over operating costs of
$17.3 million for the six months ended June 30, 1997. This increase was
primarily the result of a $5.9 million increase in the cost of timberland sold,
a $2.5 million increase in SG&A expenses, and a $1.3 million increase in DD&A
expense, partially offset by a $0.9 million decrease in COGS.
COGS was $6.9 million for the six months ended June 30, 1998, a decrease
of $0.9 million or 12% from COGS of $7.8 million for the six months ended June
30, 1997. This decrease was primarily due to decreased logging costs resulting
from the 10% decrease in logs harvested by the Company during the six months
ended June 30, 1998 as compared to the six months ended June 30, 1997.
During the six months ended June 30, 1998, the Company sold 15,304 acres
of timberland with a cost basis of $5.9 million. No sales of timberland were
made during the six months ended June 30, 1997.
DD&A expense was $7.9 million for the six months ended June 30, 1998, a
$1.3 million or 21% increase over DD&A expense of $6.6 million for the six
months ended June 30, 1997. This increase was primarily attributable to the
increase in the Company's depletion rate, which resulted from the Ochoco
timberlands acquisition in July 1997. The increase in the Company's depletion
rate was partially offset by an 8% decrease in log and stumpage sales volumes
during the six months ended June 30, 1998 as compared to the six months ended
June 30, 1997.
SG&A expenses were $5.4 million for the six months ended June 30, 1998, an
increase of $2.5 million or 86% over comparable expenses of $2.9 million for the
six months ended June 30, 1997. This increase was primarily due to the increased
cost of operating as a publicly owned company combined with the one-time
expenses of $1.1 million related to severance costs and the repurchase of member
interests in the Managing Member in the first quarter of 1998.
Interest Expense. Interest expense was $11.1 million for the six months
ended June 30, 1998 and related to the $225.0 million aggregate principal amount
of the Notes. Interest expense of $10.9 million for the six months ended June
30, 1997 related primarily to $215.0 million of term debt and $90.0 million of
revolving debt incurred in connection with the acquisition of the Klamath Falls
timberlands in August 1996.
Financing Fees. The Company deferred $6.7 million of fees incurred in
connection with the issuance of the Notes. The amortization of these fees during
the first six months of 1998 was $0.3 million. During the six months ended June
30, 1997, the Company recognized $2.2 million of expense related to debt
guarantee fees and amortization of deferred financing fees.
Financial Condition and Liquidity
During the six months ended June 30, 1998, net cash provided by operating
activities totaled $3.1 million compared to $6.1 million for the same period in
1997. The decrease of $3.0 million was primarily the result of increased
revenues offset by additional SG&A expenses and a decrease in cash flows from
working capital in the first half of 1998 as compared to the same period in
1997. Cash and cash equivalents at June 30, 1998 totaled $3.3 million, or $27.1
million less than at June 30, 1997. The decrease in cash and cash equivalents is
primarily due to the acquisition of the Ochoco timberlands and expenses
associated with the recapitalization and debt refinancing transactions that took
place in the second half of 1997, as well as the initial distribution to
Unitholders of the Master Partnership, which was made in May 1998.
Page 10 of 15
<PAGE>
The Company has a $100.0 million unsecured revolving credit facility (the
"Bank Credit Facility") with a group of banks, which consists of a $75.0 million
acquisition facility and a $25.0 million working capital facility. The Bank
Credit Facility will expire November 19, 2000. At that time, amounts borrowed
under the working capital facility will be due and payable, and the Company may
elect to convert amounts borrowed under the acquisition facility to a term loan
payable in sixteen equal quarterly installments. As of June 30, 1998, there were
no outstanding borrowings under the Bank Credit Facility.
Capital expenditures for the six months ended June 30, 1998 totaled $0.3
million. As the Company does not currently own and does not plan to own or
operate manufacturing facilities, and all logging is subcontracted to third
parties, it is anticipated that capital expenditures in the future will not be
material and will consist mainly of land management and silvicultural
expenditures. It is not currently anticipated that the Company will either
maintain log inventories (although small log inventories may be maintained for a
short period of time) or incur material capital expenditures for machinery and
equipment. The Company anticipates that capital expenditures will be $2.0
million for the year ended December 31, 1998. Capital expenditures will consist
of capitalized silvicultural costs, computer hardware and software expenditures,
and miscellaneous equipment. Capital expenditures will be funded from cash on
hand and cash generated from current operations.
Cash required to meet the Master Partnership's Minimum Quarterly
Distributions (as required by the Master Partnership's partnership agreement),
and interest and principal payments on indebtedness will be significant. The
Managing Member expects that the quarterly cash distributions and debt service
will be funded from cash on hand and cash generated from current operations.
Year 2000 Compliance
The Company has evaluated its financial and operational systems and
applications for compliance with Year 2000 requirements. In the course of this
evaluation, the Company obtained certifications from vendors that its timber
inventory and timberland resource management systems are Year 2000 compliant.
Further, in connection with the Company's scheduled programs to replace certain
other systems, specifically its financial reporting system and local and wide
area networks, the Company included Year 2000 compliance among its key criteria
in selecting the replacement applications. The installation and testing of these
replacement systems is currently in progress and is expected to be completed by
November 1998. The Company has replaced or upgraded its computers to assure its
business systems are supported by machines that comply with Year 2000
requirements.
The Company is currently assessing the Year 2000 readiness of certain
vendors and other third parties with whom it conducts significant business or
maintains a significant business relationship (e.g., scaling bureaus, contract
loggers, and payroll and 401(k) service bureaus). This assessment will be
completed by November 1998. At this time, the Company believes that these third
parties are properly addressing Year 2000 compliance issues. Therefore, the
Company believes that the specific costs associated with achieving Year 2000
compliance for its own systems, and any costs associated with any Year 2000
issues of third parties, will not have a material effect on the Company's
financial condition or results of operations.
Page 11 of 15
<PAGE>
Other Information
Voters from the State of Oregon have approved an initiative for the
November 1998 ballot which requires, among other things, maintenance of at least
sixty well distributed trees ten inches or larger in diameter at breast height
or eighty square feet of basal area per acre. The initiative is designed to
eliminate clearcutting as a harvest method. The initiative, if passed, could
have a material adverse impact on the Company's financial condition and results
of operations, as it could limit the ability of the Company to harvest its
timberlands in accordance with its current harvest plans. It cannot be
determined whether the initiative will be passed by the voters in the November
election and enacted into law.
Page 12 of 15
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There is no pending litigation and, to the knowledge of the Company, there
is no threatened litigation, the unfavorable resolution of which would have a
material adverse effect on the business or financial condition of the Company.
ITEMS 2, 3, 4 AND 5 OF PART II are not applicable and have been omitted.
Page 13 of 15
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
+3.1 -- Second Amended and Restated Operating Agreement of U.S.
Timberlands Klamath Falls, L.L.C.
*3.2 -- Certificate of Incorporation of U.S. Timberlands Finance Corp.
*3.3 -- Bylaws of U.S. Timberlands Finance Corp.
+10.1 -- Credit Agreement among U.S. Timberlands Klamath Falls, L.L.C.
and certain banks
+10.2 -- Indenture among U.S. Timberlands Klamath Falls, L.L.C., U.S.
Timberlands Finance Corp. and State Street Bank and Trust
Company, as trustee
+10.3 -- Contribution, Conveyance and Assumption Agreement among U.S.
Timberlands Company, L.P. and certain other parties
*10.4 -- Form of U.S. Timberlands Company, L.P. 1997 Long-Term Incentive
Plan
*10.5 -- Employment Agreement for Mr. Rudey
++10.6 -- Employment Agreement for Mr. Symington
++10.7 -- Employment Agreement for Mr. Michie
++10.8 -- Employment Agreement for Mr. McDowell
*10.9 -- Supply Agreement between U.S. Timberlands Klamath Falls, L.L.C.
and Collins Products LLC
27.1 -- Financial Data Schedule
* Incorporated by reference to the same numbered Exhibit to the
Co-Registrants' Registration Statement on Form S-1 filed November 13,
1997.
+ Incorporated by reference to the same numbered Exhibit to the
Co-Registrants' Current Report on Form 8-K filed January 15, 1998.
++ Incorporated by reference to the same numbered Exhibit to the
Co-Registrants' Annual Report on Form 10-K filed March 31, 1998.
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the quarter ended
June 30, 1998.
Page 14 of 15
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
co-registrants have duly caused this report to be signed on their behalf by the
undersigneds thereunto duly authorized.
Date: August 14, 1998 U.S. TIMBERLANDS KLAMATH FALLS, L.L.C.
By: U.S. Timberlands Services Company, L.L.C.
as Manager
By: /s/ ALLEN E. SYMINGTON
-------------------------------------
Allen E. Symington
President and Chief Financial Officer
(Principal Financial Officer
and Duly Authorized Officer)
By: /s/ JOHN C. MCDOWELL
-------------------------------------
John C. McDowell
Vice President-Finance and Controller
(Principal Accounting Officer
and Duly Authorized Officer)
U.S. TIMBERLANDS FINANCE CORP.
By: /s/ ALLEN E. SYMINGTON
-------------------------------------
Allen E. Symington
President and Chief Financial Officer
(Principal Financial Officer
and Duly Authorized Officer)
By: /s/ JOHN C. MCDOWELL
-------------------------------------
John C. McDowell
Vice President-Finance and Controller
(Principal Accounting Officer
and Duly Authorized Officer)
Page 15 of 15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMBINED
FINANCIAL STATEMENTS OF U.S. TIMBERLANDS KLAMATH FALLS, L.L.C. AND U.S.
TIMBERLANDS FINANCE CORP. FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 3,334
<SECURITIES> 0
<RECEIVABLES> 5,977
<ALLOWANCES> 100
<INVENTORY> 0
<CURRENT-ASSETS> 9,294
<PP&E> 1,476
<DEPRECIATION> 249
<TOTAL-ASSETS> 366,169
<CURRENT-LIABILITIES> 11,256
<BONDS> 225,000
0
0
<COMMON> 0
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<INCOME-CONTINUING> (7,624)
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</TABLE>
