PR Newswire | Oct 29, 2020 04:05PM EDT

10/29 15:05 CDT

CatchMark Reports Third Quarter 2020 Results and Declares Dividend- Executed business plan successfully through pandemic-related economic volatility, maintaining course to meet full-year result objectives- Avoided storm/fire related losses to timberlands in U.S. South and Pacific Northwest, although some harvests were delayed until fourth quarter- Continued to benefit from prime timberlands, high-demand mill markets, and superior management to produce predictable and stable operating cash flows that fully covered quarterly dividends- Achieved pricing premiums in the U.S. South of 61% and 21% relative to TMS South-wide averages for pulpwood and sawtimber, respectively, and realized a 26% increase in delivered sawtimber pricing in the Pacific Northwest- Completed $2.4 million in timberland sales and remained on plan to meet full-year sales targets ATLANTA, Oct. 29, 2020

ATLANTA, Oct. 29, 2020 /PRNewswire/ -- CatchMark Timber Trust, Inc. (NYSE: CTT)today reported third quarter 2020 results, announcing it remains on track to meet its full-year operating plan after effectively managing through weather-related issues, wildfire disruptions, and COVID-19 impacts during the quarter. The company also declared a cash dividend of $0.135 per share for its common stockholders of record as of November 30, 2020, payable on December 15, 2020.

Brian M. Davis, CatchMark's Chief Executive Officer, said: "We are encouraged by the evident momentum in homebuilding recovery driven by the combination of favorable demographics, low interest rates, and low historical housing supply. These trends bode well for product price improvements in 2021 and beyond to meet rising demand for timber products. Despite 2020's weather and pandemic related challenges, we delivered consistent cash flow during the third quarter and stayed on course to achieve our full-year operating objectives. At the same time, we continue to realize the benefits of our established and proven business strategy, focusing on prime properties in high demand mill markets. As a result, we continue to attain premium pricing for our timber sales significantly above industry averages. In addition, we remain on course to meet our timberland sales goals for the year."

The following table summarizes the current quarter and comparable prior year period results:

FINANCIAL HIGHLIGHTS

Change

Three Three Months (in millions except for Months Ended Dollars, Tons tons and acres) Ended September or Acres % September 30, 2019 30, 2020

Results of Operations

Revenues $24.6 $26.4 $ (7) % (1.8)

Net Loss $(4.1) $(20.6) $ 16.480 %

Adjusted EBITDA $12.4 $16.5 $ (25)% (4.1)



Harvest Volume (tons) 580,528 633,731 (53,203) (8) %

Acres Sold 1,200 1,100 100 8 %

Business Segments Overview

Harvest Operations

Change

(in millions) Three Months EndedThree Months Ended $ % September 30, 2020 September 30, 2019

Timber Sales Revenue$ 18.1 $ 19.7 $(1.6)(8)%

Harvest EBITDA $ 8.5 $ 9.4 $(0.9)(9)%

The homebuilding recovery and strong demand for pulp-related products - continuing through the pandemic - have supported consistent harvest volume flow in CatchMark's mill markets. Disruptions to operations from hurricanes and fires deferred some revenues to the fourth quarter, but are not expected to result in lost revenues since company timberlands avoided any direct damage.

U.S. South Activity:As expected, third quarter 2020 harvests were lower compared to the 2019 period when CatchMark had increased activity to catch up from deferred harvests earlier that year. In addition, wet conditions, concentrated in the Carolinas, delayed some harvests during the quarter. As a result, third quarter harvest volumes decreased by 9% and together with lower stumpage prices resulted in a 14% decline in timber sales revenue year over year.

* Pricing Premiums Maintained: Stumpage prices improved from the second quarter and maintained significant premiums over South-wide averages tracked by TimberMart-South, resulting from CatchMark micro-market advantages and the quality of harvests from its prime timberlands. Stumpage prices were lower year over year - 6% for pulpwood and 7% for sawtimber - trending with much larger 11% and 13% decreases in South-wide averages. Sawtimber stumpage prices decreased as compared to prior year due to a heavier mix of chip-n-saw and smaller diameter sawtimber as a result of shifting market demands.

Pacific Northwest Activity:Pacific Northwest harvest volumes increased 17% year over year to 27,990 tons from 23,957 tons in the three months ended September 30, 2019.

* Wildfire Impacts Contained: CatchMark's timberlands avoided any damage from rampant region-wide wildfires and its delivered sawtimber prices increased 26% due to strong demand fundamentals fueled by increased housing starts, lack of finished lumber in the supply chain and reduced mill inventories caused by disruptions at other suppliers. Shutdowns of harvesting activities ordered by local governments interrupted operations temporarily towards the end of the quarter.

Plan Outlook: Storm and fire related impacts during the quarter did not alter CatchMark's outlook for meeting full-year 2020 harvest plans. Any third quarter deferrals are expected to be made up by increased fourth quarter volumes.

Todd P. Reitz, CatchMark's Chief Resources Officer, said: "During the quarter, our delivered wood program provided strong production opportunities in our superior Georgia micro-markets. Sales under our fiber supply agreements remained stable and consistent, helping ensure steady cash flows and offsetting delayed production in the Carolinas and Pacific Northwest due to weather and fire disruptions. Record high lumber pricing helped increase log prices nearly 30% in the Pacific Northwest driven by housing-related fundamentals. These positive market factors were evident in the U.S. South to a lesser extent as disciplined mill operators maintained tight finished-product inventories in case of pandemic related market reversals. But we are optimistic that increased homebuilding activity and heightened demand should prove beneficial in further boosting log prices and revenues in coming quarters."

Real Estate

Change

Three Months (in millions) Ended Three Months Ended $ % September 30, September 30, 2019 2020

Timberland Sales Revenue$ 2.4 $ 2.3 $0.27 %

Real Estate EBITDA $ 2.3 $ 2.0 $0.212%

Higher Timberland Sales: Timberland sales revenue increased by $0.2 million year over year due to selling more acres in the current quarter.

* CatchMark sold 1,200 acres for $2.4 million compared to 1,100 acres for $2.3 million in third quarter 2019. * The lower per-acre sales price - $2,047 compared to $2,166 - resulted from lower average merchantable timber stocking levels.

Acquisitions and Large Dispositions No acquisitions or large dispositions were transacted during the quarter.

Plan Outlook: Timberland sales remain on plan for full-year 2020.

Investment Management

Change

Three Months Three Months (in millions) Ended Ended $ % September 30, September 30, 2020 2019

Asset Management Fee $ 3.1 $ 3.4 $(0.3)(9) %Revenue

Investment Management $ 3.7 $ 7.3 $(3.6)(50)%EBITDA

Results reflect the wind-down of the Dawsonville Bluffs joint venture, which had provided significant earnings and incentive-based promotes during third quarter 2019, partially offset by recently increased asset management fees from the Triple T joint venture. These increased fees resulted from the amendment to the joint venture's asset management agreement completed during second quarter 2020.

* Triple T harvest operations, benefiting from the renegotiated wood supply agreement with Georgia-Pacific, remained on plan during the quarter and generated positive cash flow from operations.

Davis said: "In the wake of the Georgia-Pacific agreement, CatchMark is particularly focused on its initiatives to re-capitalize the joint venture and maximize returns for the company and our partners in due course."

Capital Position and Share Repurchases

* Liquidity: As of September 30, 2020, CatchMark had $150.9 million of borrowing capacity remaining under its credit facilities - $115.9 million under the multi-draw term facility and $35.0 million under the revolving credit facility. * Share Repurchases: No share repurchases occurred under the share repurchase program during the quarter. Approximately $13.7 million remains in the program for future repurchases as of September 30, 2020.

Ursula Godoy-Arbelaez, CatchMark's Chief Financial Officer, said: "We continue to benefit from a strong capital position highlighted by ample liquidity and low cost of capital with no near-term refinancing or maturity risk. As a result, we are well-positioned for future growth as direct acquisition and joint venture investment opportunities present themselves."

Conference Call

The company will host a conference call and live webcast at 12 p.m. ET on Friday, October 30, 2020 to discuss these results. Investors may listen to the conference call by dialing 1-888-347-1165 for U.S/Canada and 1-412-902-4276 for international callers. Participants should ask to be joined into the CatchMark call. Access to the live webcast is available at www.catchmark.com or here. A replay of this webcast will be archived on the company's website immediately after the call.

About CatchMarkCatchMark (NYSE: CTT) seeks to deliver consistent and growing per share cash flow from disciplined acquisitions and superior management of prime timberlands located in high demand U.S. mill markets. Concentrating on maximizing cash flows throughout business cycles, the company strategically harvests its high-quality timberlands to produce durable revenue growth and takes advantage of proximate mill markets, which provide a reliable outlet for merchantable inventory. Headquartered in Atlanta and focused exclusively on timberland ownership and management, CatchMark began operations in 2007 and owns interests in 1.5 million acres* of timberlands located in Alabama, Florida, Georgia, North Carolina, Oregon, South Carolina and Texas. For more information, visit www.catchmark.com.

* As of September 30, 2020

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as "may," "will," "expect," "intend," "anticipate," "estimate," "believe," "continue," or other similar words. However, the absence of these or similar words or expressions does not mean that a statement is not forward-looking. Forward-looking statements are not guarantees of performance and are based on certain assumptions, discuss future expectations, describe plans and strategies, contain projections of results of operations or of financial condition or state other forward-looking information. Forward-looking statements in this press release include, but are not limited to, statements about meeting our full-year operating plan and result objectives, including with respect to harvest volumes and timberland sales, the momentum in the homebuilding recovery and its impact on product price improvements in 2021 as well as our revenues, our expectation to deliver deferred harvest volume and receive deferred revenues in the fourth quarter of 2020, maximizing returns from the Triple T joint venture for us and our partners, and having ample liquidity and being well-positioned for future growth through direct acquisitions and joint ventures. Risks and uncertainties that could cause our actual results to differ from these forward-looking statements include, but are not limited to, that (i) we may not generate the harvest volumes from our timberlands that we currently anticipate; (ii) the demand for our timber may not increase at the rate we currently anticipate or could decline due to changes in general economic and business conditions in the geographic regions where our timberlands are located, including as a result of the COVID-19 pandemic and the measures taken as a response thereto; (iii) a downturn in the real estate market, including decreases in demand and valuations, may adversely impact our ability to generate income and cash flow from sales of higher-and-better use properties; (iv) timber prices could decline, which would negatively impact our revenues; (v) the supply of timberlands available for acquisition that meet our investment criteria may be less than we currently anticipate; (vi) we may be unsuccessful in winning bids for timberland that are sold through an auction process; (vii) we may not be able sell large dispositions of timberland in capital recycling transactions at prices that are attractive to us or at all; (viii) we may not be able to access external sources of capital at attractive rates or at all; (ix) potential increases in interest rates could have a negative impact on our business; (x) our share repurchase program may not be successful in improving stockholder value over the long-term; (xi) our joint venture strategy may not enable us to access non-dilutive capital and enhance our ability to make acquisitions; (xii) we may not be successful in effectively managing the Triple T joint venture and the anticipated benefits of the joint venture may not be realized, including that our asset management fee could be deferred or decreased, we may not earn an incentive-based promote and our investment in the joint venture may lose value; and (xiii) the factors described in Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, Part II, Item 1A. Risk Factors of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, and our other filings with the Securities and Exchange Commission. Accordingly, readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. We undertake no obligation to update our forward-looking statements, except as required by law.

CATCHMARK TIMBER TRUST, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (in thousands, except for per-share amounts)



Three Months Ended Nine Months Ended September 30, September 30,

2020 2019 2020 2019

Revenues:

Timber sales $18,060 $19,706 $52,399 $52,530

Timberland sales 2,430 2,264 8,882 12,578

Asset management fees 3,118 3,436 8,950 9,119

Other revenues 1,005 974 3,111 3,386

24,613 26,380 73,342 77,613

Expenses

Contract logging and 7,688 8,269 21,943 22,778 hauling costs

Depletion 7,286 8,235 20,934 19,533

Cost of timberland sales 1,926 2,081 6,811 10,562

Forestry management 1,666 1,656 5,171 4,982 expenses

General and administrative 2,768 2,984 13,059 9,550 expenses

Land rent expense 114 125 334 400

Other operating expenses 1,458 1,341 4,679 4,614

22,906 24,691 72,931 72,419



Other income (expense):

Interest income 1 80 51 142

Interest expense (3,563) (4,472) (11,590) (13,803)

Gain on large dispositions - 7,197 1,274 7,961

(3,562) 2,805 (10,265) (5,700)



Income (loss) before unconsolidated joint (1,855) 4,494 (9,854) (506) ventures



Income (loss) from unconsolidated joint ventures:

Triple T (2,689) (25,712) (5,000) (81,800)

Dawsonville Bluffs 395 661 273 789

(2,294) (25,051) (4,727) (81,011)



Net loss $(4,149)$(20,557)$(14,581)$(81,517)



Weighted-average shares outstanding - basic and 48,766 49,008 48,833 49,049 diluted



Net loss per-share - basic $(0.09) $(0.42) $(0.30) $(1.66) and diluted

CATCHMARK TIMBER TRUST, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in thousands, except for per-share amounts)



September December 30, 2020 31, 2019

Assets:

Cash and cash equivalents $8,034 $11,487

Accounts receivable 8,090 7,998

Prepaid expenses and other assets 6,435 5,459

Operating lease right-of-use asset 2,903 3,120

Deferred financing costs 189 246

Timber assets:

Timber and timberlands, net 590,297 633,581

Intangible lease assets 6 9

Investment in unconsolidated joint ventures 1,838 1,965

Total assets $617,792$663,865



Liabilities:

Accounts payable and accrued expenses $5,923 $3,580

Operating lease liability 3,054 3,242

Other liabilities 36,086 10,853

Notes payable and lines of credit, net of deferred 437,236 452,987 financing costs

Total liabilities 482,299 470,662



Commitments and Contingencies - -



Stockholders' Equity:

Class A common stock, $0.01 par value; 900,000 shares authorized; 48,765 and 49,008 shares issued and 488 490 outstanding as of September 30, 2020 and December 31, 2019, respectively

Additional paid-in capital 727,767 729,274

Accumulated deficit and distributions (563,041)(528,847)

Accumulated other comprehensive loss (31,204) (8,276)

Total stockholders' equity 134,010 192,641

Noncontrolling interests 1,483 562

Total equity 135,493 193,203

Total liabilities and equity $617,792$663,865

CATCHMARK TIMBER TRUST, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands)



Three Months Ended Nine Months Ended September 30, September 30,

2020 2019 2020 2019

Cash Flows from Operating Activities:

Net loss $(4,149)$(20,557)$(14,581)$(81,517)

Adjustments to reconcile net loss to net cash provided by operating activities:

Depletion 7,286 8,235 20,934 19,533

Basis of timberland sold, lease 1,991 1,854 6,988 10,329 terminations and other

Stock-based compensation expense 630 803 3,207 1,952

Noncash interest expense 698 252 2,469 816

Other amortization 49 47 152 170

Gain on large dispositions - (7,197) (1,274) (7,961)

Loss from unconsolidated joint 2,294 25,051 4,727 81,011 ventures

Operating distributions from 273 661 273 789 unconsolidated joint ventures

Interest paid under swaps with other-than-insignificant financing 1,412 - 2,904 - element

Changes in assets and liabilities:

Accounts receivable (1,565) 1,972 (1,092) 2,007

Prepaid expenses and other assets (414) (420) (5) 221

Accounts payable and accrued expenses(697) 47 1,959 138

Other liabilities (191) 560 986 1,025

Net cash provided by operating 7,617 11,308 27,647 28,513 activities



Cash Flows from Investing Activities:

Capital expenditures (excluding (566) (834) (4,332) (3,031) timberland acquisitions)

Investment in unconsolidated joint - - (5,000) - venture

Distributions from unconsolidated (273) 3,172 127 4,019 joint ventures

Net proceeds from large dispositions - 19,840 20,863 25,151

Net cash provided by (used in) (839) 22,178 11,658 26,139 investing activities



Cash Flows from Financing Activities:

Repayments of notes payable - (20,064) (20,850) (20,064)

Proceeds from notes payable - - 5,000 -

Financing costs paid (15) (15) (1,019) (48)

Interest paid under swaps with other-than-insignificant financing (1,412) - (2,904) - element

Dividends/distributions paid (6,537) (6,555) (19,726) (19,711)

Repurchases of common shares (77) (595) (2,207) (3,004)

Repurchase of common shares for (53) - (1,052) (365) minimum tax withholding

Net cash used in financing activities(8,094) (27,229) (42,758) (43,192)

Net change in cash and cash (1,316) 6,257 (3,453) 11,460 equivalents

Cash and cash equivalents, beginning 9,350 10,817 11,487 5,614 of period

Cash and cash equivalents, end of $8,034 $17,074 $8,034 $17,074 period

CATCHMARK TIMBER TRUST, INC. AND SUBSIDIARIES SELECTED DATA (UNAUDITED)



2020 2019

Q1 Q2 Q3 YTD Q1 Q2 Q3 YTD

Consolidated

Timber Sales Volume (tons, '000)

Pulpwood 324 354 349 1,028 294 304 376 974

Sawtimber ^(1) 271 214 231 715 193 191 258 641

Total 595 568 580 1,743 487 495 634 1,615



Harvest Mix

Pulpwood 54% 62% 60% 59% 60% 61% 59% 60%

Sawtimber ^(1) 46% 38% 40% 41% 40% 39% 41% 40%



Period-end Acres ('000)

Fee 393 392 391 391 432 424 413 413

Lease 22 22 22 22 27 26 26 26

Wholly-owned total 415 414 413 413 459 450 439 439

Joint venture interest ^1,092 1,092 1,085 1,085 1,104 1,100 1,094 1,094 (5)

Total 1,507 1,506 1,498 1,498 1,563 1,550 1,533 1,533



U.S. South

Timber Sales Volume (tons, '000)

Pulpwood 320 352 346 1,018 294 303 373 970

Sawtimber ^(1) 250 195 206 651 188 177 237 602

Total 570 547 552 1,669 482 480 610 1,572



Harvest Mix

Pulpwood 56% 64% 63% 61% 61% 63% 61% 62%

Sawtimber ^(1) 44% 36% 37% 39% 39% 37% 39% 38%

Delivered % as of total 63% 61% 63% 62% 79% 74% 64% 72% volume

Stumpage % as of total 37% 39% 37% 38% 21% 26% 36% 28% volume



Net Timber Sales Price ($ per ton) ^(2)

Pulpwood $13 $12 $13 $13 $15 $14 $14 $14

Sawtimber ^(1) $23 $23 $22 $23 $24 $24 $24 $24



Timberland Sales

Gross sales ('000) $4,779 $1,673$2,430$8,882 $2,090$8,224$2,264 $12,578

Acres sold 3,000 1,100 1,200 5,200 900 4,000 1,100 6,000

% of fee acres 0.7% 0.3% 0.3% 1.3% 0.2% 0.9% 0.2% 1.4%

Price per acre ^(3) $1,627 $1,564$2,047$1,710 $2,236$2,072$2,166 $2,114



Large Dispositions ^(4)

Gross sales ('000) $21,250$- $- $21,250$- $5,475$19,920$25,395

Acres sold 14,400 - - 14,400 - 3,600 10,800 14,400

Price per acre ^(3) $1,474 $- $- $1,474 $- $1,500$1,845 $1,758

Gain ('000) $1,274 $- $- $1,274 $- $764 $7,197 $7,961



Pacific Northwest

Timber Sales Volume (tons,'000)

Pulpwood 4 3 3 10 - 1 3 5

Sawtimber^ (1) 21 18 25 64 5 13 21 38

Total 25 21 28 74 5 14 24 43



Harvest Mix

Pulpwood 18% 13% 12% 14% -% 9% 13% 11%

Sawtimber 82% 87% 88% 86% 100% 91% 87% 89%

Delivered % as of total 84% 100% 100% 95% 100% 87% 100% 96% volume

Stumpage % as of total 16% -% -% 5% -% 13% -% 4% volume



Delivered Timber Sales Price ($ per ton) ^(2) (6)

Pulpwood $31 $29 $28 $30 $40 $37 $30 $33

Sawtimber $91 $84 $105 $94 $101 $94 $83 $89

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

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

Excludes value of timber reservations. For the quarter ended September 30, 2020, we retained 8,200 tons of merchantable inventory with a book basis of^ $86,100. No timber reservations were retained for the quarter ended(3) September 30, 2019. For the nine months ended September 30, 2020 and 2019, we retained 123,400 tons and 5,900 tons of merchantable inventory, with a book basis of $981,200 and $69,000, respectively.

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

Represents properties owned by Triple T joint venture in which CatchMark^ owns a common partnership interest and has contributed 22.0% of total(5) equity contributions; and Dawsonville Bluffs, LLC, a joint venture in which CatchMark owns a 50% membership interest. CatchMark serves as the manager for both of these joint ventures.

^ Delivered timber sales price includes contract logging and hauling costs.(6)

CATCHMARK TIMBER TRUST, INC. AND SUBSIDIARIES RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA (UNAUDITED) (in thousands)



Three Months Ended Nine Months Ended September 30, September 30,

(in thousands) 2020 2019 2020 2019

Net loss $(4,149)$(20,557)$(14,581)$(81,517)

Add:

Depletion 7,286 8,235 20,934 19,533

Interest expense ^(2) 2,865 4,220 9,121 12,987

Amortization ^(2) 747 299 2,621 986

Depletion, amortization, basis of timberland, mitigation credits sold 140 3,152 140 3,547 included in loss from unconsolidated joint venture^ (3)

Basis of timberland sold, lease terminations and 1,991 1,854 6,988 10,329 other ^(4)

Stock-based compensation 630 803 3,207 1,952 expense

Gain on large dispositions - (7,197) (1,274) (7,961) ^(5)

HLBV loss from unconsolidated joint 2,689 25,712 5,000 81,800 venture ^(6)

Post-employment benefits ^ 10 - 2,307 - (7)

Other ^(8) 190 1 260 115

Adjusted EBITDA^ (1) $12,399 $16,522 $34,723 $41,771

Adjusted EBITDA is a non-GAAP financial measure of operating performance. EBITDA is defined by the SEC as earnings before interest, taxes, depreciation and amortization; however, we have excluded certain other expenses which we believe are not indicative of the ongoing operating results of our timberland portfolio, and we refer to this measure as Adjusted EBITDA. As such, our Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. Due to the significant amount of timber assets subject to depletion, significant income (losses) from unconsolidated joint ventures based on hypothetical liquidation book value, or HLBV, and the significant amount of financing subject to interest and amortization expense, management considers Adjusted^ EBITDA to be an important measure of our financial performance. By(1) providing this non-GAAP financial measure, together with the reconciliation above, we believe we are enhancing investors' understanding of our business and our ongoing results of operations, as well as assisting investors in evaluating how well we are executing our strategic initiatives. Items excluded from Adjusted EBITDA are significant components in understanding and assessing financial performance. Adjusted EBITDA is a supplemental measure of operating performance that does not represent and should not be considered in isolation or as an alternative to, or substitute for net income, cash flow from operations, or other financial statement data presented in accordance with GAAP in our consolidated financial statements as indicators of our operating performance. Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP.

For the purpose of the above reconciliation, amortization includes amortization of deferred financing costs, amortization of operating lease assets and liabilities, amortization of intangible lease assets, and^ amortization of mainline road costs, which are included in either interest(2) expense, land rent expense, or other operating expenses in the accompanying consolidated statements of operations. Includes non-cash basis of timber and timberland assets written-off related to timberland sold, terminations of timberland leases and casualty losses.

^ Reflects our share of depletion, amortization, and basis of timberland and(3) mitigation credits sold of the unconsolidated Dawsonville Bluffs joint venture.

^ Includes non-cash basis of timber and timberland assets written-off related(4) to timberland sold, terminations of timberland leases and casualty losses.

Large dispositions are sales of blocks of timberland properties in one or several transactions with the objective to generate proceeds to fund^ capital allocation priorities. Large dispositions may or may not have a(5) higher or better use than timber production or result in a price premium above the land's timber production value. Such dispositions are infrequent in nature, are not part of core operations, and would cause material variances in comparative results if not reported separately.

^ Reflects HLBV (income) losses from the Triple T joint venture, which is(6) determined based on a hypothetical liquidation of the underlying joint venture at book value as of the reporting date.

^ Reflects one-time, non-recurring post-employment benefits associated with(7) the retirement of our former CEO, including severance pay, payroll taxes, professional fees, and accrued dividend equivalents.

Includes certain cash expenses paid, or reimbursement received, that^ management believes do not directly reflect the core business operations of(8) our timberland portfolio on an on-going basis, including costs required to be expensed by GAAP related to acquisitions, transactions, joint ventures or new business initiatives.

CATCHMARK TIMBER TRUST, INC. AND SUBSIDIARIES ADJUSTED EBITDA BY SEGMENT (UNAUDITED) (in thousands)



Three Months Ended Nine Months Ended September 30, September 30,

2020 2019 2020 2019

Timber sales $18,060$19,706$52,399$52,530

Other revenue 1,005 974 3,111 3,386

(-) Contract logging and hauling (7,688) (8,269) (21,943)(22,778)costs

(-) Forestry management expenses (1,666) (1,656) (5,171) (4,982)

(-) Land rent expense (114) (125) (334) (400)

(-) Other operating expenses (1,458) (1,341) (4,679) (4,614)

(+) Stock-based compensation 110 74 307 189

(+/-) Other 253 27 807 604

Harvest EBITDA 8,502 9,390 24,497 23,935



Timberland sales 2,430 2,264 8,882 12,578

(-) Cost of timberland sales (1,926) (2,081) (6,811) (10,562)

(+) Basis of timberland sold 1,768 1,853 6,271 9,805

Real estate EBITDA 2,272 2,036 8,342 11,821



Asset management fees 3,118 3,436 8,950 9,119

Unconsolidated Dawsonville Bluffs 535 3,814 413 4,336 joint venture EBITDA

Investment management EBITDA 3,653 7,250 9,363 13,455



Total operating EBITDA 14,427 18,676 42,202 49,211



(-) General and administrative (2,768) (2,984) (13,059)(9,550) expenses

(+) Stock-based compensation 520 729 2,900 1,763

(+) Interest income 1 80 51 142

(+) Post-employment benefits 10 - 2,307 -

(+/-) Other 209 21 322 205

Corporate EBITDA (2,028) (2,154) (7,479) (7,440)



Adjusted EBITDA $12,399$16,522$34,723$41,771

CATCHMARK TIMBER TRUST, INC. AND SUBSIDIARIES CASH AVAILABLE FOR DISTRIBUTION (UNAUDITED) (in thousands, except for per share data)



Three Months Ended Nine Months Ended September 30, September, 30

2020 2019 2020 2019

Cash Provided by Operating $7,617 $11,308$27,647$28,513Activities

Capital expenditures (excluding (566) (834) (4,332) (3,031) timberland acquisitions)

Working capital change 2,867 (2,159) (1,848) (3,391)

Distributions from unconsolidated (273) 3,172 127 4,019 joint ventures

Post-employment benefits 10 - 2,307 -

Interest paid under swaps with other-than-insignificant financing(1,412) - (2,904) - element

Other 190 1 260 115

Cash Available for Distribution ^ $8,433 $11,488$21,257$26,225(1)



Adjusted EBITDA $12,399$16,522$34,723$41,771

Interest paid (2,865) (4,220) (9,121) (12,987)

Capital expenditures (excluding (566) (834) (4,332) (3,031) timberland acquisitions)

Distributions from unconsolidated - 3,834 400 4,808 joint ventures

Adjusted EBITDA from (535) (3,814) (413) (4,336) unconsolidated joint ventures

Cash Available for Distributions ^$8,433 $11,488$21,257$26,225(1)



Dividends / distributions paid $6,537 $6,555 $19,726$19,711



Weighted-average shares 48,766 49,008 48,833 49,049 outstanding, end of period



Dividends per Share $0.135 $0.135 $0.405 $0.405

Cash Available for Distribution (CAD) is a non-GAAP financial measure. It is calculated as cash provided by operating activities, adjusted for capital expenditures (excluding timberland acquisitions), working capital^ changes, cash distributions from unconsolidated joint ventures and certain(1) cash expenditures that management believes do not directly reflect the core business operations of our timberland portfolio on an on-going basis, including costs required to be expensed by GAAP related to acquisitions, transactions, joint ventures or new business activities.

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SOURCE CatchMark Timber Trust, Inc.