================================================================================
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 March 31, 1999
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 name of co-registrantas specified in its charter)
Delaware 93-1217136
Delaware 91-1851612
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
625 Madison Avenue, Suite 10-B, New York, NY 10022
(Address of principal executive offices) (Zip Code)
Co-Registrants telephone number, including area code: 212-755-1100
--------------------------
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 |_|
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<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
U.S. TIMBERLANDS KLAMATH FALLS, L.L.C.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands)
(Unaudited)
Quarter Ended March 31,
-----------------------
1999 1998
-------- --------
Revenues $ 11,129 $ 7,757
Costs and expenses:
Cost of goods sold 2,021 2,654
Depletion, depreciation and road amortization 3,984 2,760
Selling, general and administrative 2,351 3,626
-------- --------
Total costs and expenses 8,356 9,040
-------- --------
Operating income (loss) 2,773 (1,283)
Interest expense 5,469 5,463
Interest income (251) (176)
Financing fees 169 169
Other income (882) (25)
-------- --------
Net loss $ (1,732) $ (6,714)
======== ========
See accompanying Notes to Consolidated Financial Statements.
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<PAGE>
U.S. TIMBERLANDS KLAMATH FALLS, L.L.C.
CONSOLIDATED BALANCE SHEETS
(In Thousands)
March 31, December 31,
1999 1998
--------- ---------
(Unaudited) *
Assets
Current assets:
Cash and cash equivalents $ 212 $ 4,824
Accounts and current portion
of notes receivable - net 4,165 2,706
Prepaid expenses and other
current assets 509 1,539
--------- ---------
Total current assets 4,886 9,069
Timber, timberlands and roads - at cost
Timber 330,193 330,244
Timberlands 43,118 43,118
Logging roads 1,803 1,803
Less accumulated depletion and
road amortization (45,703) (41,848)
--------- ---------
Timber, timberlands and roads - net 329,411 333,317
Seed and nursery stock 1,281 1,159
Property, plant and equipment - at cost
Equipment 674 637
Buildings and land improvements 843 843
Less accumulated depreciation (358) (326)
--------- ---------
Property, plant and equipment - net 1,159 1,154
Notes receivable 1,117 --
Deferred financing fees 5,830 5,998
Other assets 1,000 --
--------- ---------
Total assets $ 344,684 $ 350,697
========= =========
Liabilities
Current liabilities:
Accounts payable and accrued liabilities $ 8,645 $ 6,052
Deferred revenue -- 1,614
Short-term debt 1,300 --
--------- ---------
Total current liabilities 9,945 7,666
Long-term debt 225,000 225,000
Members' equity
Managing member's interest 1,097 1,180
Non-managing member's interest 108,642 116,851
--------- ---------
Total liabilities and members' equity $ 344,684 $ 350,697
========= =========
* Derived from audited Consolidated Balance Sheet as of December 31, 1998.
See accompanying Notes to Consolidated Financial Statements.
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<PAGE>
U.S. TIMBERLANDS KLAMATH FALLS, L.L.C.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Three Months Ended March 31,
----------------------------
1999 1998
---------- -----------
Cash Flows From Operating Activities:
Net loss $ (1,732) $ (6,714)
Adjustments to reconcile net loss to
net cash provided by operating
activities:
Depletion, depreciation and
road amortization 3,984 2,760
Amortization of financing fees 169 169
Other non-cash items (800) --
Working capital changes - net 125 4,758
-------- --------
Net cash provided by operating
activities 1,746 973
Cash Flows From Investing Activities:
Purchase of property, plant and
equipment - net (36) (33)
Capitalized seed and nursery
costs - net (61) (64)
Increase in other assets (1,000) --
-------- --------
Net cash used in investing activities (1,097) (97)
Cash Flows From Financing Activities:
Short-term borrowings 1,300 --
Distribution to Members (6,561) --
-------- --------
Net cash used in financing activities (5,261) --
-------- --------
(Decrease) increase in cash and
cash equivalents (4,612) 876
Cash and cash equivalents - beginning
of period 4,824 10,625
-------- --------
Cash and cash equivalents - end
of period $ 212 $ 11,501
======== ========
Supplemental Cash Flow Information:
Cash paid for interest $ 5 $ --
======== ========
See accompanying Notes to Consolidated Financial Statements.
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<PAGE>
U.S. TIMBERLANDS KLAMATH FALLS, L.L.C.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per Unit amounts or 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 owed subsidiary, U.S. Timberlands Finance Corp.
("Finance Corp."), collectively referred to hereafter as the Company. Finance
Corp. serves as co-obligor with USTK for $225.0 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 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 activity of the Company is growing trees and the sale of 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, which produce approximately five million genetically
selected conifer seedlings each year. Approximately 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 1998 Annual Report
on Form 10-K. Certain reclassifications have been made to the 1998 amounts
presented for comparability purposes and have no impact on net income. Operating
results for the three month period ended March 31, 1999 are not necessarily
indicative of the results that may be expected for the full year.
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<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 1998 Annual Report on Form 10-K.
2. SHORT-TERM DEBT
Please see Management's Discussion and Analysis - Financial Condition and
Liquidity for a description of changes in the Company's short-term debt.
3. SUBSEQUENT EVENT
On April 21, 1999, 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 May 14, 1999 to Unitholders of record
on May 4, 1999. All of the cash necessary to make such distribution will be
distributed to the Master Partnership by USTK. In addition, on May 14, 1999 USTK
will distribute $66 to the Managing Member.
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<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
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, general economic conditions, competition, price conditions or trends
for the Company's products, 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.
Overview
The Company's principal operations consist of growing and harvesting
timber and selling logs, standing timber and related by-products to third party
wood processors. These logs and by-products 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
results of the Company's operations and its ability to pay quarterly
distributions to its Members depends upon a number of factors, many of which are
beyond its control. These factors include general economic and industry
conditions, domestic and export prices, supply and demand for logs, seasonality,
government regulations affecting the manner in which timber may be harvested,
and competition from other supplying regions and substitute products.
Seasonality
The Company's log and standing timber sales volumes are generally at their
lowest levels in the first and second quarter of each year. In the first
quarter, heavy snowfalls in higher elevations prevent access to many areas of
the Company's timberlands. This limited access, along with spring break-up
conditions (when warming weather thaws and softens roadbeds) in March or April,
restricts logging operations to lower elevations and areas with rockier soil
types. As a result of these constraints, the Company's sales volumes are
typically at their lowest in the first quarter, improving in the second quarter
and at their highest during the third and fourth quarters. Most customers in the
region react to this seasonality by carrying sufficiently high log inventories
at the end of the calendar year to carry them to the second quarter of the
following year.
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<PAGE>
Current Market Conditions
A combination of circumstances has resulted in increased western log
prices during the first quarter of 1999. Strong lumber and panel demand combined
with weather conditions, including heavy snow pack and prolonged spring
break-up, have resulted in decreased log inventories at many conversion
facilities. In addition, the export market in Japan has picked up with export
log sales volume increasing from the first quarter of 1998.
The circumstances driving the log pricing and shortage have also impacted
finished product pricing. Prices for #3 Ponderosa Pine shop are up 8% from a
year ago. Lodgepole Pine stud prices are up 7% from the first quarter of 1998.
Douglas Fir #2 & Btr. green studs are up 10% and White Fir veneer prices are up
26% from last year at this time. The pricing increase during the first quarter
of 1999 as described above may differ from the Company's actual results for the
same quarter as the Company's pricing is typically agreed to prior to actual
delivery.
Results of Operations
Quarter Ended March 31, 1999 Compared to Quarter Ended March 31, 1998
The following table sets forth sales volume for the quarters ended March
31,1999 and 1998 from the sale of logs, stumpage and timber deeds by thousand
board feet ("MBF") and price per thousand board feet and the sales of
timberland.
<TABLE>
<CAPTION>
Sales Volume (MBF) Price Realization (MBF)
------------------ -----------------------
Timber Timber Timberland
Period Logs Stumpage Deeds Logs Stumpage Deeds Sales ($000)
- ------ ---- -------- ----- ---- -------- ----- ------------
<S> <C> <C> <C> <C> <C> <C>
1999
Three Months Ended March 31 11,996 1,921 17,759 $ 395 $ 440 $ 308 --
1998
Three Months Ended March 31 16,409 1,984 -- $ 418 $ 447 -- --
</TABLE>
Revenues. Revenues for the quarter ended March 31, 1999 were $11.1
million, an increase of $3.3 million or 42% over revenues of $7.8 million for
the quarter ended March 31, 1998. This was primarily attributable to a $5.5
million increase in timber deed sales partially offset by a $2.2 million
decrease in log sales.
Timber deed sales for the quarter ended March 31, 1999 were $5.5 million
on volumes of 17.8 million board feet ("MMBF"), which included $5.0 million or
15.8 MMBF under six stumpage sales that were entered into during 1998. During
the first quarter of 1999 these six stumpage sales were converted to timber deed
sales. The increase in timber deed sales is primarily the result of a strategy,
which the Company initiated in the second quarter of 1998, to expand its use of
timber deed sales to meet the needs of its customers and improve sales prices
realized by the Company. During the first quarter of 1998 there were no timber
deed sales.
First quarter 1999 log sales were $4.7 million on volumes of 12.0 MMBF as
compared to the same period in 1998 when log sales were $6.9 million on volumes
of 16.4 MMBF. Log sales
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<PAGE>
volume decreased due to increased timber deed sales, as previously mentioned,
during the first quarter of 1999. The average first quarter 1999 log sales price
was $395 per MBF compared to an average of $418 per MBF for the first quarter of
1998. The following explanation of changes in sales prices may differ from those
Current Market Conditions described previously, as most pricing is agreed to
prior to actual delivery. The decline in the average log sales price between the
first quarter of 1999 and 1998 was primarily attributable to a 20% decrease in
Douglas Fir prices as a result of reduced customer demand and a 13% decrease in
Ponderosa Pine prices due to lower log quality. The decline in Douglas Fir and
Ponderosa Pine prices was partially offset by a 15% increase in White Fir
prices, directly attributable to increased demand for White Fir finished
products.
Operating Costs. Operating costs were $8.4 million for the quarter ended
March 31, 1999, a decrease of $0.6 million or 7% from operating costs of $9.0
million for the quarter ended March 31, 1998. This decrease was primarily the
result of a $1.2 million decrease in selling, general and administrative
("SG&A") expenses along with a decrease to cost of goods sold ("COGS") of $0.6
million partially offset by an increase in depreciation, depletion and road
amortization ("DD&A") expenses of $1.2 million.
SG&A expenses for the quarter ended March 31, 1999 were $2.4 million, a
decrease of 33% from comparable expenses of $3.6 million for the quarter ended
March 31, 1998. This decrease was primarily due to one-time expenses of $1.1
million related to severance costs and the repurchase of member interests in the
Manager incurred in the first quarter of 1998. As a percentage of revenues, SG&A
declined in the first quarter of 1999 to 21% compared to 47% in the first
quarter of 1998 primarily due to first quarter 1999 timber deed sales of $5.5
million.
COGS as a percentage of revenues was 18% for the quarter ended March 31,
1999, compared to 34% for the same period during 1998. The decrease is due to
the $5.5 million of timber deed sales during the first quarter of 1999, which
typically have higher margins than log sales.
DD&A expense was $4.0 million for the quarter ended March 31, 1999 a $1.2
million or 43% increase over DD&A expense of $2.8 million for the quarter ended
March 31, 1998. This increase was primarily due to increased timber deed sales
partially offset by reduced log sales and the decrease in the Company's
depletion rate per MBF, which resulted from the first quarter 1999 depletion
rate recalculation.
Other Income. Other income was $0.9 million in the first quarter of 1999.
In the first quarter of 1998 this item was under $0.1 million. The increase in
income during the first quarter of 1999 is due to $0.8 million of income related
to an unrealized gain, as of March 31, 1999, from marking to market an unhedged
financial instrument.
Members' Equity
During the three months ended March 31, 1999 members' equity declined $8.3
million from $118.0 million to $109.7 million. This decline is the result of the
Company's net loss and distributions to its Members during this period, which
were $1.7 million and $6.6 million, respectively. The Company expects to
continue to incur operating losses and make distributions to its Members. As a
result, the Company anticipates that members' equity will continue to decline.
Financial Condition and Liquidity
Operating Activities. Cash flows provided by operating activities during
the three months ended March 31, 1999 were $1.7 million, as compared to cash
flows provided by operating
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<PAGE>
activities of $1.0 million during the same period in 1998. The $0.7 million
increase in cash flows provided by operating activities was primarily due to a
$5.5 million increase in the proceeds from timber deed sales, $1.2 million
decrease in selling, general and administrative expenses and $0.6 million
decrease in the cost of goods sold. The increase in operating cash flows was
predominantly offset by an increase in notes receivable from customers, during
the first quarter of 1999, related to timber deed sales of $4.3 and a decrease
in log sales of $2.2 million for the first three months of 1999 as compared to
1998.
Investing Activities. Cash flows used by investing activities were $1.1
million during first three months of 1999, as compared to cash flows used by
investing activities of $0.1 million during same period in 1998. During the
first quarter of 1999 $1.0 million in other assets were established.
Financing Activities. Cash flows used in financing activities were $5.3
million for the first three months of 1999. The Company paid $6.6 million in
distributions to its Members and borrowed $1.3 million on the Bank Credit
Facility. There were no cash flows from financing activities in the first three
months of 1998 as the Company's first distribution was not paid until May 15,
1998 and there was no need to borrow funds.
The Company had a $100.0 million unsecured revolving credit facility (the
"Bank Credit Facility") with a group of banks, which consisted of a $75.0
million acquisition facility and a $25.0 million working capital facility and
was subject to restrictions and covenants that limited the amount available for
borrowing in amounts which varied from time to time. Effective April 6, 1999 the
Company terminated the $75.0 million acquisition facility. Currently, the
working capital facility requires the consent of a majority of the lending group
members for borrowings in excess of $2.0 million. The Bank Credit Facility will
expire June 30, 1999. At that time, amounts borrowed under the working capital
facility will be due and payable. As of March 31, 1999, $1.3 million was
outstanding under the Bank Credit Facility.
The agreements governing the Notes and the Bank Credit Facility contain
restrictive covenants, including limitations on harvest levels, land sales, cash
distributions and the amount of future indebtedness. In addition, these
agreements require the Company to maintain certain financial ratios. Under the
Bank Credit Facility, the Company's average annual harvest volume over any
period of four consecutive years cannot exceed 150 MMBF (as adjusted for
timberland sales and purchases). The agreements also limit one-year harvest
levels and average annual harvest levels for consecutive two and three year
periods. The Company has agreed to terminate the working capital facility
agreement as of June 30, 1999 and to terminate the acquisition facility,
effective April 6, 1999. The Company is currently in discussions with several of
the banks to continue the working capital facility, and one of them has agreed
to act as agent bank. In the interim, an affiliate of the Manager has agreed to
make available to the Company, from time to time, loans of up to $12.0 million
with terms and covenants substantially consistent with the current Bank Credit
Facility. The Company also has the ability to generate cash flow through the
acceleration of planned log and timber deed sales. In addition, the Company's
plan is to retain investment banks to assist it in raising money for
acquisitions. As of March 31, 1999 the Company was in compliance with the
covenants and ratios pertaining to the Notes and Bank Credit Facility.
Through the first three months of 1999, the Company funded its operations
and met its cash obligations for distributions to its Members and debt service
from cash on hand and cash generated from current operations. Cash required to
make distributions to all its Members at current levels and to pay interest on
the Notes is $26.2 million and $21.7 million, respectively, per year. The
Manager expects that cash distributions and interest payments will be funded
from cash on hand, cash generated from current operations and borrowings.
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<PAGE>
Cash required to meet the Company's debt service and quarterly cash
distributions will be significant. To meet its working capital requirements, the
Company has been harvesting and selling logs, stumpage and timber deed sales at
a rate in excess of the Managing Member's estimate of the long-term sustainable
annual harvest level for its current timberlands. The Managing Member expects
that the debt service and quarterly cash distributions will be funded from
operations and borrowings. Given projected harvest levels, the long term
sustainable harvest levels of the timberlands and the harvest restrictions in
the Notes and Bank Credit Facility, unless prices improve, costs are reduced,
new markets are developed or the Company makes accretive acquisitions, the
Company's ability in the future to make distributions at current levels may be
adversely affected. The Company continues to evaluate means to improve cash
flows, including the factors mentioned above. However, there can be no assurance
that prices will improve or that the Company will be able to take any of these
actions.
Year 2000 Issues
The Company is aware of the "Year 2000" issue associated with the
programming code in existing computer systems as the millennium (year 2000)
approaches. The Year 2000 issue is pervasive and complex as virtually every
computer operation will be affected in some way by the rollover of a two-digit
year value to 00. The issue is whether computer systems will properly recognize
data sensitive information when the year changes to 2000. Systems that do not
recognize such information could generate erroneous data or cause a system to
fail.
Since early 1998, the company has been assessing its computer hardware and
information systems needs and upgrading its systems as appropriate. In 1998 the
Company completed the installation of several major hardware and software
upgrades: general ledger, accounts payable, accounts receivable, log accounting
and telecommunications. Along with this assessment and upgrade of its systems,
the Company is also reviewing its systems and applications to ensure its
computer and information systems will function properly at Year 2000. The
Company anticipates completing this internal assessment by June 30, 1999. At
this time, management of the Company believes that the specific cost of
achieving Year 2000 compliance for its current systems will not have a material
effect on the Company's consolidated financial statements.
Like other companies, the Company relies on its customers for revenues and
on its vendors for products and services of all kinds; these third parties all
face the Year 2000 issue. An interruption in the ability of any of them to
provide goods or services, or to pay for goods and services provided to them, or
an interruption in the business operations of customers causing a decline in
demand for services, could have a material adverse effect on the Company.
In addition, there is a risk, the probability of which the Company is not
in a position to estimate, that the Year 2000 will cause wholesale, perhaps
prolonged, failures of electrical generation, banking, telecommunications or
transportation systems in the United States or abroad, disrupting the general
infrastructure of the economy. The effect of such disruptions on the Company
could be material.
The Company is in the process of identifying and surveying its key vendors
and customers regarding their progress on the Year 2000 issue. The Company's
efforts to determine the readiness of its key vendors and customers are expected
to be ongoing through year-end 1999. However, because so many entities are
exposed to the risk of failure not only of their own systems, but the systems of
other entities, the ultimate effect of the Year 2000 issue is subject to a high
degree of uncertainty.
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<PAGE>
The Company believes that its preparations currently underway are adequate
to access and manage the risks presented by the Year 2000 issue, and does not
have a formal contingency plan at this time.
The statements in this section regarding the Year 2000 and the Company's
responses to it are forward-looking statements. They are based on assumptions
that the Company believes to be reasonable in light of its current knowledge and
experience. A number of events could cause actual results to differ materially
from those described in the forward-looking statements made on behalf of the
Company.
SFAS No. 133
In June 1998, the Financial Accounting Standards Board issued Statement of
Financing Accounting Standard (SFAS) No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This Statement establishes accounting and
reporting standards for derivative instruments and for hedging activities. It
requires that an entity recognize all derivatives as either assets or
liabilities in the statement of financial position and measure those instruments
at fair value. This Statement is effective for all fiscal quarters of fiscal
years beginning after June 15, 1999. The Company will adopt SFAS No. 133 as of
July 1, 1999. The Company believes that adoption of this statement will not have
a material impact on the Company.
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<PAGE>
PART ll. 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 could 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.
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<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
**16 -- Letter from Arthur Andersen, LLP dated December 8, 1998
*21.1 -- List of Subsidiaries
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 Exhibit 1 to the Co-Registrants' Form 8-K
filed on December 8, 1998.
+ Incorporated by reference to the same numbered Exhibit to the
Co-Registrant's Current Report on Form 8-K filed January 15, 1998.
++ Incorporated by reference to the same numbered Exhibit to the
Co-Registrant's Annual Report on Form 10-K filed March 31, 1998.
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<PAGE>
(b.) Reports on Form 8-K
On January 6, 1999, the Company filed a Form 8-K reporting the engagement
of Richard A. Eisner & Company, LLP to audit its financial statements.
On March 9, 1999, the Company filed a Form 8-K reporting, among other
things, the revision of its second and third quarter 1998 financial
results.
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<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: May 14, 1999 U.S. TIMBERLANDS KLAMATH FALLS, L.L.C.
By: U.S. Timberlands Services Company, L.L.C.
as Manager
By: /s/ Greg G. Byrne
-----------------------------------------
Greg G. Byrne
Chief Financial Officer
(Chief Financial Officer
and Duly Authorized Officer)
By: /s/ Jeffrey B. Groom
-----------------------------------------
Jeffrey B. Groom
Corporate Controller-Western Operations
(Principal Accounting Officer)
U.S. TIMBERLANDS FINANCE CORP.
By: /s/ Greg G. Byrne
-----------------------------------------
Greg G. Byrne
Chief Financial Officer
(Chief Financial Officer
and Duly Authorized Officer)
By: /s/ Jeffrey B. Groom
-----------------------------------------
Jeffrey B. Groom
Corporate Controller-Western Operations
(Principal Accounting Officer)
16 of 17
<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 THREE MONTHS ENDED MARCH 31, 1999 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 212
<SECURITIES> 0
<RECEIVABLES> 4,365
<ALLOWANCES> 200
<INVENTORY> 0
<CURRENT-ASSETS> 4,886
<PP&E> 1,517
<DEPRECIATION> 358
<TOTAL-ASSETS> 344,684
<CURRENT-LIABILITIES> 9,945
<BONDS> 225,000
0
0
<COMMON> 0
<OTHER-SE> 108,642
<TOTAL-LIABILITY-AND-EQUITY> 344,684
<SALES> 11,129
<TOTAL-REVENUES> 11,129
<CGS> 2,021
<TOTAL-COSTS> 8,356
<OTHER-EXPENSES> (713)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,469
<INCOME-PRETAX> (1,732)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,732)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,732)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
