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Segment Information
 12 Months Ended
Dec. 31, 2020
Segment Reporting [Abstract]  
Segment Information

NOTE 3.  SEGMENT INFORMATION

Our operations are organized into three reportable segments: Timberlands, Wood Products and Real Estate. Management activities in the Timberlands segment include planting and harvesting trees and building and maintaining roads. The Timberlands segment also generates revenues from non-timber resources such as hunting leases, recreation permits and leases, mineral rights contracts, oil and gas royalties and carbon sequestration. The Wood Products segment manufactures and markets lumber and plywood. The Real Estate segment includes the sale of land holdings deemed non-strategic or identified as having higher and better use alternatives, master planned community development and a country club. Sales outside of the United States are inconsequential and no single customer represented more than 10% of our consolidated revenues during 2020, 2019 or 2018.  

Our Timberlands segment supplies our Wood Products segment with a portion of its wood fiber needs. These intersegment revenues are based on prevailing market prices and typically represent a sizeable portion of the Timberlands segment’s total revenues. Our other segments generally do not generate intersegment revenues. These intercompany transactions are eliminated in consolidation.

The reportable segments follow the same accounting policies used for our Consolidated Financial Statements, with the exception of the valuation of inventories which are reported using the average cost method for purposes of reporting segment results. For additional information regarding valuation of inventories and our revenue recognition policy see Note 1: Summary of Significant Accounting Policies.

The following table represents our revenues by major product:

 

 

 

Year Ended December 31,

 

(in thousands)

 

2020

 

 

2019

 

 

2018

 

Timberlands

 

 

 

 

 

 

 

 

 

 

 

 

Northern region

 

 

 

 

 

 

 

 

 

 

 

 

Sawlogs

 

$

213,030

 

 

$

161,570

 

 

$

205,977

 

Pulpwood

 

 

4,502

 

 

 

5,767

 

 

 

5,996

 

Stumpage

 

 

316

 

 

 

109

 

 

 

176

 

Other

 

 

1,581

 

 

 

1,970

 

 

 

1,801

 

Total Northern revenues

 

 

219,429

 

 

 

169,416

 

 

 

213,950

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Southern region

 

 

 

 

 

 

 

 

 

 

 

 

Sawlogs

 

 

93,828

 

 

 

88,048

 

 

 

81,460

 

Pulpwood

 

 

49,084

 

 

 

53,315

 

 

 

48,585

 

Stumpage

 

 

4,077

 

 

 

1,666

 

 

 

2,434

 

Other

 

 

10,101

 

 

 

10,248

 

 

 

8,521

 

Total Southern revenues

 

 

157,090

 

 

 

153,277

 

 

 

141,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Timberlands revenues

 

 

376,519

 

 

 

322,693

 

 

 

354,950

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wood Products

 

 

 

 

 

 

 

 

 

 

 

 

Lumber

 

 

573,069

 

 

 

396,648

 

 

 

464,180

 

Residuals and Panels

 

 

125,336

 

 

 

143,760

 

 

 

216,751

 

Total Wood Products revenues

 

 

698,405

 

 

 

540,408

 

 

 

680,931

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real Estate

 

 

 

 

 

 

 

 

 

 

 

 

Rural real estate

 

 

81,979

 

 

 

49,675

 

 

 

36,024

 

Development real estate

 

 

14,979

 

 

 

22,363

 

 

 

12,852

 

Other

 

 

7,458

 

 

 

6,834

 

 

 

5,690

 

Total Real Estate revenues

 

 

104,416

 

 

 

78,872

 

 

 

54,566

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total segment revenues

 

 

1,179,340

 

 

 

941,973

 

 

 

1,090,447

 

Intersegment Timberlands revenues1

 

 

(138,410

)

 

 

(114,875

)

 

 

(115,868

)

Total consolidated revenues

 

$

1,040,930

 

 

$

827,098

 

 

$

974,579

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

Intersegment revenues represent logs sold by our Timberlands segment to the Wood Products segment. 

Management primarily evaluates the performance of its segments and allocates resources to them based upon Adjusted EBITDDA. EBITDDA is calculated as net income before interest expense, income taxes, basis of real estate sold, depreciation, depletion and amortization. Adjusted EBITDDA further excludes certain specific items that are considered to hinder comparison of the performance of our businesses either year-on-year or with other businesses. Management uses Adjusted EBITDDA to compare the operating performance of our segments on a consistent basis and to evaluate the performance and effectiveness of each segment’s operational strategies. Our calculation of Adjusted EBITDDA may not be comparable to that reported by other companies.

The following table summarizes information for each of the company’s reportable segments and includes a reconciliation of Total Adjusted EBITDDA to income before income taxes. Corporate information is included to reconcile segment data to the Consolidated Financial Statements.

 

 

 

Year Ended December 31,

 

(in thousands)

 

2020

 

 

2019

 

 

2018

 

Adjusted EBITDDA:

 

 

 

 

 

 

 

 

 

 

 

 

Timberlands

 

$

182,802

 

 

$

133,987

 

 

$

169,834

 

Wood Products

 

 

176,095

 

 

 

12,901

 

 

 

130,583

 

Real Estate

 

 

86,476

 

 

 

62,650

 

 

 

40,304

 

Corporate

 

 

(48,451

)

 

 

(36,257

)

 

 

(37,785

)

Eliminations and adjustments

 

 

(14,694

)

 

 

5,662

 

 

 

(5,743

)

Total Adjusted EBITDDA

 

 

382,228

 

 

 

178,943

 

 

 

297,193

 

Interest expense, net1

 

 

(29,463

)

 

 

(30,361

)

 

 

(35,227

)

Depreciation, depletion and amortization

 

 

(76,261

)

 

 

(70,417

)

 

 

(70,848

)

Basis of real estate sold

 

 

(25,348

)

 

 

(20,554

)

 

 

(16,698

)

Loss on extinguishment of debt

 

 

—

 

 

 

(5,512

)

 

 

—

 

Pension settlement charge

 

 

(42,988

)

 

 

—

 

 

 

—

 

Non-operating pension and other postretirement employee benefits

 

 

(14,226

)

 

 

(3,739

)

 

 

(7,648

)

Gain (loss) on fixed assets

 

 

11

 

 

 

(865

)

 

 

(725

)

Gain on sale of facility

 

 

—

 

 

 

9,176

 

 

 

—

 

Inventory purchase price adjustment in cost of goods sold2

 

 

—

 

 

 

—

 

 

 

(1,849

)

Deltic merger-related costs3

 

 

—

 

 

 

—

 

 

 

(22,119

)

Income before income taxes

 

$

193,953

 

 

$

56,671

 

 

$

142,079

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

Includes amortization of bond discounts and deferred loan fees.

2

The effect of costs of goods sold for fair value adjustments to the carrying amounts of inventory acquired in business combinations.

See Note 2: Mergers and Divestitures.

3

See Note 2: Mergers and Divestitures.

 

The following table summarizes additional reportable segment financial information:

 

 

 

Year Ended December 31,

 

(in thousands)

 

2020

 

 

2019

 

 

2018

 

Depreciation, depletion and amortization:

 

 

 

 

 

 

 

 

 

 

 

 

Timberlands

 

$

51,047

 

 

$

46,601

 

 

$

48,201

 

Wood Products

 

 

23,611

 

 

 

22,059

 

 

 

21,416

 

Real Estate

 

 

620

 

 

 

678

 

 

 

418

 

Corporate

 

 

983

 

 

 

1,079

 

 

 

813

 

 

 

 

76,261

 

 

 

70,417

 

 

 

70,848

 

Bond discount and deferred loan fees1

 

 

1,624

 

 

 

1,688

 

 

 

2,313

 

Total depreciation, depletion and amortization

 

$

77,885

 

 

$

72,105

 

 

$

73,161

 

Basis of real estate sold:

 

 

 

 

 

 

 

 

 

 

 

 

Real Estate

 

$

25,990

 

 

$

20,749

 

 

$

16,954

 

Elimination and adjustments

 

 

(642

)

 

 

(195

)

 

 

(256

)

Total basis of real estate sold

 

$

25,348

 

 

$

20,554

 

 

$

16,698

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Timberlands2

 

 

1,617,809

 

 

 

1,655,407

 

 

 

1,693,162

 

Wood Products

 

 

421,066

 

 

 

398,465

 

 

 

456,306

 

Real Estate3

 

 

89,509

 

 

 

87,421

 

 

 

93,208

 

 

 

 

2,128,384

 

 

 

2,141,293

 

 

 

2,242,676

 

Corporate

 

 

252,681

 

 

 

93,766

 

 

 

83,176

 

Total consolidated assets

 

$

2,381,065

 

 

$

2,235,059

 

 

$

2,325,852

 

Capital Expenditures:4

 

 

 

 

 

 

 

 

 

 

 

 

Timberlands

 

$

16,252

 

 

$

17,500

 

 

$

17,232

 

Wood Products

 

 

21,565

 

 

 

37,232

 

 

 

27,341

 

Real Estate5

 

 

7,088

 

 

 

8,053

 

 

 

5,987

 

 

 

 

44,905

 

 

 

62,785

 

 

 

50,560

 

Corporate

 

 

728

 

 

 

1,317

 

 

 

1,747

 

Total capital expenditures

 

$

45,633

 

 

$

64,102

 

 

$

52,307

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

Included within interest expense on the Consolidated Statements of Operations.

2

We do not report rural real estate separate from Timberlands as we do not report these assets separately to management.

3

Real Estate assets primarily consist of the master planned community development and a country club, both located in Arkansas.

4

Does not include the acquisition of timber and timberlands, all of which were acquired by the Timberlands segment.

5

Real Estate capital expenditures include development expenditures of $6.7 million, $7.3 million and $5.0 million for the years ended December 31, 2020, 2019 and 2018, respectively.