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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549 
FORM 10-Q
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 2022
OR
 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from              to             

Commission File Number 001-36239

CATCHMARK TIMBER TRUST, INC.
(Exact name of registrant as specified in its charter)
Maryland20-3536671
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification Number)
5 Concourse Parkway, Suite 2650, Atlanta, GA
30328
(Address of principal executive offices)(Zip Code)

(855) 858-9794
(Registrant’s telephone number, including area code)
N/A
(Former name, former address, and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading SymbolName of exchange on which registered
Class A Common Stock, $0.01 Par Value Per Share CTTNew York Stock Exchange

Indicate by check mark whether the registrant (1) has 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 registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.                 Yes  x    No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).                                 Yes  x    No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer," “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.     ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).        Yes  ☐    No  

Number of shares outstanding of the registrant’s common stock, as of May 2, 2022: 49,247,661 shares



GLOSSARY

The following abbreviations or acronyms may be used in this document and shall have the adjacent meanings set forth below:
AFMAmerican Forestry Management, Inc.
ASCAccounting Standards Codification
ASUAccounting Standards Update
CoBankCoBank, ACB
Common StockClass A common stock, $0.01 par value per share of CatchMark Timber Trust, Inc.
Common Unit
Common partnership unit of CatchMark Timber Operating Partnership, L.P.
CodeInternal Revenue Code of 1986, as amended
EBITDAEarnings before Interest, Taxes, Depletion, and Amortization
FASBFinancial Accounting Standards Board
FCCRFixed Charge Coverage Ratio
FRCForest Resource Consultants, Inc.
GAAPU.S. Generally Accepted Accounting Principles
HBUHigher and Better Use
HLBVHypothetical Liquidation at Book Value
IPInternational Paper Company
LIBORLondon Interbank Offered Rate
LTIPLong-Term Incentive Plan
LTIP UnitLimited partnership unit of CatchMark Timber Operating Partnership, L.P.
LTVLoan-to-Value
MPERSMissouri Department of Transportation & Patrol Retirement System
NYSENew York Stock Exchange
REITReal Estate Investment Trust
ROU
Right-of-Use
SECSecurities and Exchange Commission
SRPShare Repurchase Program
Triple T
TexMark Timber Treasury, L.P.
TRSTaxable REIT Subsidiary
TSR
Total Shareholder Return
U.S.United States
VIEVariable Interest Entity
WestRockWestRock Company


1

FORM 10-Q

CATCHMARK TIMBER TRUST, INC.

TABLE OF CONTENTS
 
Page No.
PART I. FINANCIAL INFORMATION
Item 1.
Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021
Item 2.
Item 3.
Item 4.
PART II. OTHER INFORMATION
Item 1.
Item 1A.
Item 2.
Item 6.

2

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this Quarterly Report on Form 10-Q of CatchMark Timber Trust, Inc. and subsidiaries (“CatchMark,” “we,” “our,” or “us”) may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In addition, CatchMark, or its executive officers on CatchMark's behalf, may from time to time make forward-looking statements in other reports and documents CatchMark files with the SEC or in connection with written or oral statements made to the press, potential investors, or others. We intend for all such forward-looking statements to be covered by the applicable safe harbor provisions for forward-looking statements contained in the Securities Act and the Exchange Act.
 
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 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 report, include, but are not limited to: that we are seeking to expand our presence in superior mill markets where we already have strong local relationships, to strengthen our Harvest EBITDA while maintaining stable merchantable inventory per acre; that our strategic investment opportunities include direct acquisition of high-quality industrial timberland properties with a target average transaction size ranging from $5 million to $50 million, and the development of new revenue-generating environmental initiatives such as wetlands mitigation banking, solar projects, and carbon sequestration; statements regarding anticipated property performance and growth in our portfolio; expected uses of cash generated from operations, debt financings and debt and equity offerings; expected sources and adequacy of capital resources and liquidity; our anticipated distribution policy; changes in depletion rates, merchantable timber book value and standing timber inventory volume; anticipated harvest volume and mix of harvest volume; and other factors that may lead to fluctuations in future net income (loss).

Forward-looking statements are based on currently available information and a number of assumptions involving judgments and are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from our historical experience and our present expectations. Such risks and uncertainties include those discussed in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2021 and our subsequent reports filed with the SEC. Accordingly, readers are cautioned not to rely on our forward-looking statements, which speak only as of the date that this report is filed with the SEC. We do not intend to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.



3


PART I        FINANCIAL INFORMATION

ITEM 1.        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The information furnished in the accompanying consolidated balance sheets and related consolidated statements of operations, comprehensive income, equity, and cash flows reflects all adjustments, consisting solely of normal and recurring adjustments, that are, in management’s opinion, necessary for a fair and consistent presentation of the aforementioned financial statements.

The accompanying consolidated financial statements should be read in conjunction with the condensed notes to our consolidated financial statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in this Quarterly Report on Form 10-Q and with our Annual Report on Form 10-K for the year ended December 31, 2021. Our results of operations for the three months ended March 31, 2022 are not necessarily indicative of the operating results expected for the full year.
4

CATCHMARK TIMBER TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands, except for per-share amounts)
March 31, 2022December 31, 2021
Assets:
Cash and cash equivalents$27,395 $22,963 
Accounts receivable3,187 5,436 
Prepaid expenses and other assets9,179 6,294 
Operating lease right-of-use asset (Note 7)
2,450 2,527 
Deferred financing costs
2,444 2,606 
Timber assets (Note 3):
Timber and timberlands, net460,022 466,130 
Intangible lease assets
1 1 
Investments in unconsolidated joint ventures (Note 4)1,755 1,353 
Total assets$506,433 $507,310 
Liabilities:
Accounts payable and accrued expenses$2,773 $3,677 
Operating lease liability (Note 7)2,632 2,707 
Other liabilities1,355 18,683 
Notes payable and lines of credit, net of deferred financing costs (Note 5)298,370 298,247 
Total liabilities305,130 323,314 
Commitments and Contingencies (Note 7)  
Stockholders’ Equity:
Class A Common stock, $0.01 par value; 900,000 shares authorized; 49,248 and 48,888 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively
492 489 
Additional paid-in capital730,836 729,960 
Accumulated deficit and distributions(537,940)(537,477)
Accumulated other comprehensive income (loss)6,064 (11,217)
Total stockholders’ equity199,452 181,755 
Noncontrolling Interests1,851 2,241 
Total equity201,303 183,996 
Total liabilities and equity$506,433 $507,310 



See accompanying notes.
5

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

 Three Months Ended
March 31,
 20222021
Revenues:
Timber sales$17,723 $20,149 
Timberland sales6,070 3,357 
Asset management fees2,179 3,118 
Other revenues970 1,062 
26,942 27,686 
Expenses:
Contract logging and hauling costs6,341 8,731 
Depletion4,149 7,725 
Cost of timberland sales4,337 2,155 
Forestry management expenses1,625 1,887 
General and administrative expenses3,969 3,600 
Land rent expense80 113 
Other operating expenses1,249 1,713 
21,750 25,924 
Other income (expense):
Interest income3 1 
Interest expense(2,501)(2,928)
(2,498)(2,927)
Income (loss) before unconsolidated joint ventures2,694 (1,165)
Income from unconsolidated joint ventures (Note 4)490 614 
Net income (loss)3,184 (551)
Net income (loss) attributable to noncontrolling interest 8 (1)
Net income (loss) attributable to common stockholders$3,176 $(550)
Weighted-average common shares outstanding - basic48,479 48,796 
Income (loss) per share - basic$0.07 $(0.01)
Weighted-average common shares outstanding - diluted48,479 48,796 
Income (loss) per share - diluted$0.07 $(0.01)



See accompanying notes.
6


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

 Three Months Ended
March 31,
 20222021
Net income (loss)$3,184 $(551)
Other comprehensive income:
Market value adjustment to interest rate swaps17,323 15,685 
Comprehensive income20,507 15,134 
Comprehensive income attributable to noncontrolling interest42 30 
Comprehensive income attributable to common stockholders$20,465 $15,104 



See accompanying notes.

7

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


Common Stock
Additional
Paid-In
Capital
Accumulated
Deficit and Distributions
Accumulated Other Comprehensive Income (Loss)Total
Stockholders’
Equity
Noncontrolling InterestTotal Equity
SharesAmount
Balance, December 31, 202148,888 $489 $729,960 $(537,477)$(11,217)$181,755 $2,241 $183,996 
Issuance of common stock pursuant to:
LTIP, net of forfeitures and amounts withheld for income taxes 360 3 876 — — 879 (431)448 
Dividends on common stock ($0.075 per share)
— — — (3,639)— (3,639)— (3,639)
Distributions to noncontrolling interest— — — — — — (9)(9)
Net income— — — 3,176 — 3,176 8 3,184 
Other comprehensive income— — — — 17,281 17,281 42 17,323 
Balance, March 31, 202249,248 $492 $730,836 $(537,940)$6,064 $199,452 $1,851 $201,303 




Common StockAdditional Paid-In CapitalAccumulated Deficit and DistributionsAccumulated Other Comprehensive Income (Loss)Total Stockholders’ EquityNoncontrolling InterestTotal Equity
SharesAmount
Balance, December 31, 202048,765 $488 $728,662 $(572,493)$(27,893)$128,764 $1,148 $129,912 
Issuance of common stock pursuant to:
LTIP, net of forfeitures and amounts withheld for income taxes139 1 (46)— — (45)174 129 
Dividends on common stock ($0.135 per share)
— — — (6,537)— (6,537)— (6,537)
Distributions to noncontrolling interest— — — — — — (28)(28)
Net loss— — — (550)— (550)(1)(551)
Other comprehensive income— — — — 15,655 15,655 30 15,685 
Balance, March 31, 202148,904 $489 $728,616 $(579,580)$(12,238)$137,287 $1,323 $138,610 



See accompanying notes.
8

CATCHMARK TIMBER TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)
 
Three Months Ended
March 31,
 20222021
Cash Flows from Operating Activities:
Net income (loss)$3,184 $(551)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depletion4,149 7,725 
Basis of timberland sold, lease terminations and other 4,040 1,966 
Stock-based compensation expense851 619 
Noncash interest expense390 585 
Noncash lease expense3 5 
Other amortization30 43 
Income from unconsolidated joint venture(490)(614)
Operating distributions from unconsolidated joint venture88  
Interest paid under swaps with other-than-insignificant financing element1,397 1,407 
Changes in assets and liabilities:
Accounts receivable2,062 489 
Prepaid expenses and other assets239 215 
Accounts payable and accrued expenses(856)658 
Other liabilities(3,051)(955)
Net cash provided by operating activities12,036 11,592 
Cash Flows from Investing Activities:
Capital expenditures (excluding timberland acquisitions)(2,098)(2,317)
Net cash used in investing activities(2,098)(2,317)
Cash Flows from Financing Activities:
Financing costs paid(32)(4)
Interest paid under swaps with other-than-insignificant financing element(1,397)(1,407)
Dividends/distributions paid(3,648)(6,565)
Repurchase of common shares(26)(78)
Repurchase of common shares for minimum tax withholding(403)(489)
Net cash used in financing activities(5,506)(8,543)
Net change in cash and cash equivalents4,432 732 
Cash and cash equivalents, beginning of period22,963 11,924 
Cash and cash equivalents, end of period$27,395 $12,656 



See accompanying notes.
9

CATCHMARK TIMBER TRUST, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2022 (UNAUDITED)

1.    Organization

CatchMark Timber Trust, Inc. ("CatchMark Timber Trust") (NYSE: CTT) owns and operates timberlands located in the United States and has elected to be taxed as a REIT for federal income tax purposes. CatchMark Timber Trust acquires, owns, operates, manages, and disposes of timberland directly, through wholly-owned subsidiaries, or through joint ventures. CatchMark Timber Trust was incorporated in Maryland in 2005 and commenced operations in 2007. CatchMark Timber Trust conducts substantially all of its business through CatchMark Timber Operating Partnership, L.P. (“CatchMark Timber OP”), a Delaware limited partnership. CatchMark Timber Trust is the general partner of CatchMark Timber OP, possesses full legal control and authority over its operations, and owns 99.76% of its Common Units, directly and indirectly through CatchMark LP Holder, LLC, a Delaware limited liability company and wholly-owned subsidiary of CatchMark Timber Trust. The remaining 0.24% of CatchMark Timber OP’s Common Units are owned by current and former officers and directors of CatchMark Timber Trust. In addition, CatchMark Timber Trust conducts certain aspects of its business through CatchMark Timber TRS, Inc. (“CatchMark TRS”), a Delaware corporation formed as a wholly-owned subsidiary of CatchMark Timber OP in 2006. CatchMark TRS is a taxable REIT subsidiary. Unless otherwise noted, references herein to CatchMark shall include CatchMark Timber Trust and all of its subsidiaries, including CatchMark Timber OP, and the subsidiaries of CatchMark Timber OP, including CatchMark TRS.

2.    Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The consolidated financial statements of CatchMark have been prepared in accordance with the rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X and do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the financial statements for the unaudited interim periods presented include all adjustments, which are of a normal and recurring nature, necessary for a fair and consistent presentation of the results for such periods. Results for these interim periods are not necessarily indicative of results for a full year.

CatchMark’s consolidated financial statements include the accounts of CatchMark and any VIE in which CatchMark is deemed the primary beneficiary. With respect to entities that are not VIEs, CatchMark's consolidated financial statements also include the accounts of any entity in which CatchMark owns a controlling financial interest and any limited partnership in which CatchMark owns a controlling general partnership interest. In determining whether a controlling interest exists, CatchMark considers, among other factors, the ownership of voting interests, protective rights, and participatory rights of the investors. All intercompany balances and transactions have been eliminated in consolidation. For further information, refer to the audited financial statements and notes included in CatchMark’s Annual Report on Form 10-K for the year ended December 31, 2021.

Earnings Per Share Attributable to Common Stockholders

Basic earnings (loss) per common share is calculated as net income (loss) attributable to common stockholders divided by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share equals basic earnings (loss) per common share, adjusted to reflect the dilution that would occur if all outstanding securities convertible into common shares or contracts to issue common shares were converted or exercised and the related proceeds are then used to repurchase common shares. For the three months ended March 31, 2022, CatchMark's basic weighted-average common shares were the same as the diluted weighted-average common shares, exclusive of approximately 411,000 anti-dilutive shares. These anti-dilutive shares included unvested shares of service-based restricted stock, LTIP Units, and contingently issuable securities. Vested Common Units have been excluded from the computation of earnings per common share because all income attributable to the Common Units has been recorded as noncontrolling interest and excluded from net income attributable to common stockholders. All potentially dilutive securities outstanding during the three months ended March 31, 2021 were anti-dilutive as a result of incurring net loss for the respective period.

Segment Information
10


CatchMark primarily engages in the acquisition, ownership, operation, management, and disposition of timberland properties located in the United States, either directly through wholly-owned subsidiaries or through equity method investments in affiliated joint ventures. CatchMark defines operating segments in accordance with ASC Topic 280, Segment Reporting, to reflect the manner in which its chief operating decision maker, the Chief Executive Officer, evaluates performance and allocates resources in managing the business. CatchMark has aggregated those operating segments into three reportable segments: Harvest, Real Estate and Investment Management. See Note 10 — Segment Information for additional information.

Recent Accounting Pronouncement

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires acquiring entities to recognize and measure contract assets and contract liabilities in a business combination. This ASU is intended to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to (1) recognition of an acquired contract liability and (2) payment terms and their effect on subsequent revenue recognized by the acquirer. The amendments in this ASU are effective for fiscal years beginning after December 15, 2022. CatchMark is currently assessing the impact ASU 2021-08 will have on its consolidated financial statements.

3.     Timber Assets

As of March 31, 2022 and December 31, 2021, timber and timberlands consisted of the following, respectively:

As of March 31, 2022
(in thousands)GrossAccumulated
Depletion or
Amortization
Net
Timber$167,861 $4,149 $163,712 
Timberlands296,159  296,159 
Mainline roads1,055 904 151 
Timber and timberlands$465,075 $5,053 $460,022 

As of December 31, 2021
(in thousands)GrossAccumulated
Depletion or
Amortization
Net
Timber$185,449 $18,260 $167,189 
Timberlands298,777  298,777 
Mainline roads1,052 888 164 
Timber and timberlands$485,278 $19,148 $466,130 
Timberland Sales

During the three months ended March 31, 2022 and 2021, CatchMark sold 3,400 and 1,800 acres of timberland for $6.1 million and $3.4 million, respectively. CatchMark's cost basis in the timberland sold was $4.0 million and $1.9 million, respectively.

Timberland sales acreage by state is listed below:
11

Three Months Ended March 31,
Acres Sold In20222021
     Timberland Sales
          Alabama300 1,100 
          Georgia700 700 
          South Carolina2,400  
Total3,400 1,800 

Current Timberland Portfolio

As of March 31, 2022, CatchMark directly owned interests in 365,300 acres of timberlands in the U.S. South, 352,500 acres of which were fee-simple interests and 12,800 acres were leasehold interests. Land acreage by state is listed below:

Acres by state as of March 31, 2022 FeeLeaseTotal
Alabama65,100 1,800 66,900 
Georgia
220,200 11,000 231,200 
South Carolina
67,200  67,200 
Total352,500 12,800 365,300 

4.    Unconsolidated Joint Venture

Dawsonville Bluffs Joint Venture

CatchMark formed the Dawsonville Bluffs joint venture with MPERS in 2017 with each owning a 50% membership interest. CatchMark uses the equity method of accounting to account for its investment in the Dawsonville Bluffs joint venture. During the three months ended March 31, 2022 and 2021, CatchMark recognized $0.5 million and $0.6 million of equity income, respectively, from the Dawsonville Bluffs joint venture. CatchMark received cash distributions of $0.1 million for the three months ended March 31, 2022 and did not receive any cash distribution in the prior year period. As of March 31, 2022, the carrying value of CatchMark's investment in the Dawsonville Bluffs joint venture was $1.8 million. The Dawsonville Bluffs joint venture had a mitigation bank with a book basis of $1.9 million remaining in its portfolio.

Asset Management Fees

CatchMark provides asset management services to the Dawsonville Bluffs joint venture. Under the arrangement, CatchMark oversees the day-to-day operations of the joint venture, including accounting, reporting and other administrative services, subject to certain major decisions that require partner approval. For management of the Dawsonville Bluffs joint venture, CatchMark receives a fee based on invested capital, as defined by the joint venture agreement. Additionally, CatchMark receives an incentive-based promote earned for exceeding investment hurdles.

During the quarter ended March 31, 2022, CatchMark provided transition services to the Triple T joint venture under an agreement entered in October 2021. Under the transition services agreement, which was effective September 1, 2021 through March 31, 2022, CatchMark provided such services in exchange for a one-time payment of $5.0 million received in October 2021. This service fee was recognized as asset management fee revenue on a straight-line basis over the term of the transition services agreement. As of March 31, 2022, CatchMark has earned the service fee in full and the transition services agreement has expired.

During the three months ended March 31, 2022 and 2021, CatchMark earned the following fees from its unconsolidated joint ventures:
12


Three Months Ended March 31,
(in thousands)20222021
Triple T joint venture $2,143 $3,112 
Dawsonville Bluffs joint venture (1)
36 6 
$2,179 $3,118 
(1)Includes $31,000 of incentive-based promote earned for exceeding investment hurdles for the three months ended March 31, 2022.


5.    Notes Payable and Lines of Credit

Amended Credit Agreement

As of March 31, 2022, CatchMark was party to a credit agreement dated as of December 1, 2017, as amended on August 22, 2018, June 28, 2019, February 12, 2020, May 1, 2020, August 4, 2021 and October 14, 2021 (the “Amended Credit Agreement”), with a syndicate of lenders including CoBank, which serves as the administrative agent. The Amended Credit Agreement provides for borrowing under credit facilities consisting of the following:

a $84.7 million ten-year term loan (the “Term Loan A-1”);
a $89.7 million nine-year term loan (the “Term Loan A-2”);
a $68.6 million ten-year term loan (the “Term Loan A-3”);
a $125.6 million seven-year term loan (the "Term Loan A-4");
a $150.0 million seven-year multi-draw term credit facility (the “Multi-Draw Term Facility”); and
a $35.0 million five-year revolving credit facility (the “Revolving Credit Facility”).

As of March 31, 2022 and December 31, 2021, CatchMark had the following debt balances outstanding:

(in thousands)
Current Interest Rate (1)
Outstanding Balance as of
Credit FacilityMaturity DateInterest Rate March 31, 2022December 31, 2021
Term Loan A-112/23/2024
LIBOR + 1.75%
2.21%$84,706 $84,706 
Term Loan A-212/1/2026
LIBOR + 1.90%
2.36%89,706 89,706 
Term Loan A-48/22/2025
LIBOR + 1.70%
2.16%125,588 125,588 
Total principal balance$300,000 $300,000 
Less: net unamortized deferred financing costs(1,630)(1,753)
      Total$298,370 $298,247 
(1)    As of March 31, 2022. The weighted-average interest rate excludes the impact of the interest rate swaps (see Note 6 — Interest Rate Swaps), amortization of deferred financing costs, unused commitment fees, and estimated patronage dividends.

As of March 31, 2022, CatchMark had $253.6 million of borrowing capacity remaining under its credit facilities, consisting of $150.0 million under the Multi-Draw Term Facility, $68.6 million under Term Loan A-3, and $35.0 million under the Revolving Credit Facility.

The Multi-Draw Term Facility may be used to finance timberland acquisitions and associated expenses, to fund investment in joint ventures, to fund the repurchase of CatchMark's common stock, and to reimburse payments of drafts under letters of credit. The Multi-Draw Term Facility, which is interest only until its maturity date, bears interest at an adjustable rate equal to a base rate plus between 0.50% and 1.20% or a LIBOR rate plus between 1.50% and 2.20%, in each case depending on CatchMark's LTV ratio, and will terminate and all amounts outstanding under the facility will be due and payable on December 1, 2024.

Through February 2023, CatchMark may reborrow under the revolver feature of Term Loan A-3 using borrowing mechanics substantially similar to those that apply to the Revolving Credit Facility with the same pricing and maturity
13

date as the existing Term Loan A-3. Borrowings under the revolver feature of the Term Loan A-3 may be used solely to finance acquisitions of additional real property and pay associated expenses. The Term Loan A-3 bears interest at an adjustable rate equal to a base rate plus 1.00% or a LIBOR rate plus 2.00%, and will terminate and all amounts outstanding under the facility will be due and payable on December 1, 2027.

Borrowings under the Revolving Credit Facility may be used for general working capital, to support letters of credit, to fund cash earnest money deposits, to fund acquisitions in an amount not to exceed $5.0 million, and for other general corporate purposes. The Revolving Credit Facility bears interest at an adjustable rate equal to a base rate plus between 0.50% and 1.20% or a LIBOR rate plus between 1.50% and 2.20%, in each case depending on CatchMark's LTV ratio, and will terminate and all amounts outstanding under the facility will be due and payable on August 4, 2026.

CatchMark pays the lenders an unused commitment fee on the unused portions of the Multi-Draw Term Facility, Term Loan A-3, and Revolving Credit Facility at an adjustable rate ranging from 0.15% to 0.35%, depending on the LTV ratio. For the three months ended March 31, 2022 and 2021, CatchMark recognized $0.2 million and $0.1 million of unused commitment fees as interest expense on its consolidated statements of operations, respectively.

CatchMark’s obligations under the Amended Credit Agreement are collateralized by a first priority lien on the timberlands owned by CatchMark’s subsidiaries and substantially all of CatchMark’s subsidiaries’ other assets in which a security interest may lawfully be granted, including, without limitation, accounts, equipment, inventory, intellectual property, bank accounts and investment property. In addition, these obligations are jointly and severally guaranteed by CatchMark and all of its subsidiaries pursuant to the terms of the Amended Credit Agreement. CatchMark has also agreed to guarantee certain losses caused by certain willful acts of CatchMark or its subsidiaries.

Patronage Dividends

CatchMark is eligible to receive annual patronage dividends from its lenders (the "Patronage Banks") under a profit-sharing program made available to borrowers of the Farm Credit System. CatchMark has received a patronage dividend on its eligible patronage loans annually since 2015. Therefore, CatchMark accrues patronage dividends it expects to receive based on historical patronage dividend rates. For the three months ended March 31, 2022 and 2021, CatchMark accrued $0.6 million and $0.9 million, respectively, as patronage dividends receivable on its consolidated balance sheets and as an offset against interest expense on the consolidated statements of operations.

In March 2022, CatchMark received patronage dividends of $3.6 million on its patronage eligible borrowings. Of the total patronage dividends received, $3.1 million was received in cash and $0.5 million was received in equity of the Patronage Banks.

As of March 31, 2022 and December 31, 2021, the following balances related to the patronage dividend program were included on CatchMark's consolidated balance sheets:

(in thousands)As of
Patronage dividends classified as: March 31, 2022December 31, 2021
Accounts receivable$629 $3,392 
Prepaid expenses and other assets (1)
4,774 4,311 
Total$5,403 $7,703 
(1)Represents cumulative patronage dividends received as equity in the Patronage Banks.

Debt Covenants

The Amended Credit Agreement contains, among others, the following financial covenants, which:

limit the LTV ratio to no greater than 50% at any time;
require maintenance of a FCCR of not less than 1.05:1.00 at any time; and
limit the aggregate capital expenditures to no greater than 1% of the value of the timberlands during any fiscal year.

14

The Amended Credit Agreement permits CatchMark to declare, set aside funds for, or pay dividends, distributions, or other payments to stockholders so long as it is not in default under the Amended Credit Agreement. However, if CatchMark has suffered a bankruptcy event or a change of control, the Amended Credit agreement prohibits CatchMark from declaring, setting aside, or paying any dividend, distribution, or other payment other than as required to maintain its REIT qualification. The Amended Credit Agreement also subjects CatchMark to mandatory prepayment from proceeds generated from dispositions of timberlands or lease terminations, which may have the effect of limiting its ability to make distributions to stockholders under certain circumstances.

CatchMark was in compliance with the financial covenants of the Amended Credit Agreement as of March 31, 2022.

Interest Paid and Fair Value of Outstanding Debt

During the three months ended March 31, 2022 and 2021, CatchMark made the following cash interest payments on its borrowings:
Three Months Ended March 31,
(in thousands)20222021
Cash paid for interest$1,600 $2,300 

Included in the interest payments for the three months ended March 31, 2022 and 2021, were unused commitment fees of $0.2 million and $0.1 million, respectively.

As of March 31, 2022 and December 31, 2021, the weighted-average interest rate on CatchMark's borrowings, after consideration of its interest rate swaps (see Note 6 — Interest Rate Swaps), was 3.80% and 3.77%, respectively. After further consideration of expected patronage dividends, CatchMark's weighted-average interest rate as of March 31, 2022 and December 31, 2021 was 2.95% and 2.92%, respectively.

As of March 31, 2022 and December 31, 2021, the fair value of CatchMark's outstanding debt approximated its book value. The fair value was estimated based on discounted cash flow analysis using the current market borrowing rates for similar types of borrowing arrangements as of the measurement dates.

6.     Interest Rate Swaps

CatchMark uses interest rate swaps to mitigate its exposure to changing interest rates on its variable rate debt instruments. As of March 31, 2022, CatchMark had two outstanding interest rate swaps with terms below:

(dollar amounts in thousands)Notional Amount
Interest Rate SwapEffective DateMaturity DatePay RateReceive Rate
2019 Swap - 10YR
11/29/201911/30/20292.2067%one-month LIBOR$200,000 
2019 Swap - 7YR
11/29/201911/30/20262.0830%one-month LIBOR75,000 
$275,000 

As of March 31, 2022, CatchMark’s interest rate swaps effectively fixed the interest rate on $275.0 million of its $300.0 million variable-rate debt at 3.95%, inclusive of the applicable spread and before consideration of expected patronage dividends. The 2019 swaps contain an other-than-insignificant financing element and, accordingly, the associated cash flows are reported as financing activities in the accompanying consolidated statements of cash flows.

All of CatchMark's outstanding interest rate swaps during the three months ended March 31, 2022 and 2021 qualified for hedge accounting treatment.
Fair Value and Cash Paid for Interest Under Interest Rate Swaps

The following table presents information about CatchMark's interest rate swaps measured at fair value as of March 31, 2022 and December 31, 2021:

15

(in thousands)Estimated Fair Value as of
Instrument TypeBalance Sheet ClassificationMarch 31, 2022December 31, 2021
Derivatives designated as hedging instruments:
Interest rate swapsPrepaid expenses and other assets$2,951 $ 
Interest rate swapsOther liabilities$ $(14,277)

During the three months ended March 31, 2022 and 2021, CatchMark recognized a change in fair value of its interest rate swaps of $17.3 million and $15.7 million, as other comprehensive income, respectively.

During the three months ended March 31, 2022 and 2021, CatchMark reclassified $0.1 million and $0.3 million from accumulated other comprehensive income to interest expense related to the off-market swap value at hedge inception. These reclassifications were netted with the market value adjustment to interest rate swaps in the consolidated statements of comprehensive income.

Pursuant to the terms of its interest rate swaps, CatchMark paid $1.4 million during the three months ended March 31, 2022 and 2021, respectively. All amounts were included in interest expense in the consolidated statements of operations.

As of March 31, 2022, CatchMark estimated that approximately $1.3 million will be reclassified from accumulated other comprehensive income as an offset to interest expense over the next 12 months.

7.     Commitments and Contingencies

Mahrt Timber Agreements

In connection with its acquisition of timberlands from WestRock in 2007, CatchMark entered into a master stumpage agreement and a fiber supply agreement (collectively, the “Mahrt Timber Agreements”) with a wholly-owned subsidiary of WestRock. The master stumpage agreement provides that CatchMark will sell specified amounts of timber and make available certain portions of our timberlands to CatchMark TRS for harvesting. The fiber supply agreement provides that WestRock will purchase a specified tonnage of timber from CatchMark TRS at specified prices per ton, depending upon the type of timber product. The prices for the timber purchased pursuant to the fiber supply agreement are negotiated every two years but are subject to quarterly market pricing adjustments based on an index published by TimberMart-South, a quarterly trade publication that reports raw forest product prices in 11 southern states. The initial term of the Mahrt Timber Agreements is October 9, 2007 through December 31, 2032, subject to extension and early termination provisions. The Mahrt Timber Agreements ensure a long-term source of supply of wood fiber products for WestRock in order to meet its paperboard and lumber production requirements at specified mills and provide CatchMark with a reliable customer for the wood products from its timberlands.

WestRock can terminate the Mahrt Timber Agreements prior to the expiration of the initial term if CatchMark replaces FRC as the forest manager without the prior written consent of WestRock, except pursuant to an internalization of the company's forestry management functions. CatchMark can terminate the Mahrt Timber Agreements if WestRock (i) ceases to operate the Mahrt mill for a period that exceeds 12 consecutive months, (ii) fails to purchase a specified tonnage of timber for two consecutive years, subject to certain limited exceptions or (iii) fails to make payments when due (and fails to cure within 30 days).

In addition, either party can terminate the Mahrt Timber Agreements if the other party commits a material breach (and fails to cure within 60 days) or becomes insolvent. In addition, the Mahrt Timber Agreements provide for adjustments to both parties' obligations in the event of a force majeure, which is defined to include, among other things, lightning, fires, storms, floods, infestation and other acts of God or nature.

For 2022, WestRock is required to purchase, and we are required to make available for purchase to WestRock, a minimum of 371,100 tons of timber under the Mahrt Timber Agreements. For the three months ended March 31, 2022, WestRock purchased 70,000 tons under the Mahrt Timber Agreements, which represented 8% of CatchMark's net timber sales revenue.

Timberland Operating Agreements
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Pursuant to the terms of the timberland operating agreement between CatchMark and FRC (the "FRC Timberland Operating Agreement"), FRC manages and operates certain of CatchMark's timberlands and related timber operations, including ensuring delivery of timber to WestRock in compliance with the Mahrt Timber Agreements. In consideration for rendering the services described in the timberland operating agreement, CatchMark pays FRC (i) a monthly management fee based on the actual acreage that FRC manages, which is payable monthly in advance, and (ii) an incentive fee based on timber harvest revenues generated by the timberlands, which is payable quarterly in arrears. The FRC Timberland Operating Agreement, as amended, is effective through March 31, 2023, and is automatically extended for one-year periods unless written notice is provided by CatchMark or FRC to the other party at least 120 days prior to the current expiration. The FRC Timberland Operating Agreement may be terminated by either party with mutual consent or by CatchMark with or without cause upon providing 120 days’ prior written notice.

Pursuant to the terms of the timberland operating agreement between CatchMark and AFM (the "AFM Timberland Operating Agreement"), AFM manages and operates certain of CatchMark's timberlands and related timber operations, including ensuring delivery of timber to customers. In consideration for rendering the services described in the AFM Timberland Operating Agreement, CatchMark pays AFM (i) a monthly management fee based on the actual acreage AFM manages, which is payable monthly in advance, and (ii) an incentive fee based on revenues generated by the timber operations, which is payable quarterly in arrears. The AFM Timberland Operating Agreement is effective through November 30, 2022 and is automatically extended for one-year periods unless written notice is provided by CatchMark or AFM to the other party at least 120 days prior to the current expiration. The AFM Timberland Operating Agreement may be terminated by either party with mutual consent or by CatchMark with or without cause upon providing 120 days’ prior written notice.

Obligations under Operating Leases

CatchMark's office lease commenced in January 2019 and expires in November 2028 and qualifies as an operating lease under ASC 842. As of January 1, 2019, CatchMark recorded an operating lease ROU asset and an operating lease liability of $3.4 million on its balance sheet, which represents the net present value of lease payments over the lease term discounted using CatchMark's incremental borrowing rate at commencement date. CatchMark’s office lease contains renewal options; however, the options were not included in the calculation of the operating lease ROU asset and operating lease liability as it is not reasonably certain that CatchMark will exercise the renewal options. CatchMark recorded $110,400 and $110,400 of operating lease expense for the three months ended March 31, 2022 and 2021, respectively. For the three months ended March 31, 2022 and 2021, CatchMark paid $108,000 and $105,000, respectively, in cash for its office lease, which was included in operating cash flows on its consolidated statements of cash flows.

CatchMark had the following future annual payments for its operating lease as of March 31, 2022:

(dollar amounts in thousands)Required Payments
Required payments
2022$318 
2023435 
2024447 
2025459 
2026472 
Thereafter942 
$3,073 
Less: imputed interest(441)
Operating lease liability$2,632 
Remaining lease term (years)6.7
Discount rate4.58 %

CatchMark holds leasehold interests in 12,800 acres of timberlands under a long-term lease that expires in May 2022 (the “LTC Lease”). The LTC Lease provides CatchMark access rights to harvest timber as specified in the LTC Lease, which is, therefore, a lease of biological assets, and is excluded from the scope of ASC 842.
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As of March 31, 2022, CatchMark had $242,000 of remaining future lease payments under its LTC Lease.

Litigation

From time to time, CatchMark may be a party to legal proceedings, claims, and administrative proceedings that arise in the ordinary course of its business. Management makes assumptions and estimates concerning the likelihood and amount of any reasonably possible loss relating to these matters using the latest information available. CatchMark records a liability for litigation if an unfavorable outcome is probable and the amount of loss or range of loss can be reasonably estimated. If an unfavorable outcome is probable and a reasonable estimate of the loss is a range, CatchMark accrues the best estimate within the range. If no amount within the range is a better estimate than any other amount, CatchMark accrues the minimum amount within the range. If an unfavorable outcome is probable but the amount of the loss cannot be reasonably estimated, CatchMark discloses the nature of the litigation and indicates that an estimate of the loss or range of loss cannot be made. If an unfavorable outcome is reasonably possible and the estimated loss is material, CatchMark discloses the nature and estimate of the possible loss of the litigation. CatchMark does not disclose information with respect to litigation where an unfavorable outcome is considered to be remote.

CatchMark is not currently involved in any legal proceedings of which the outcome is reasonably likely to have a material adverse effect on the results of operations or financial condition of CatchMark.

8.    Noncontrolling Interests

CatchMark Timber Trust is the general partner of CatchMark Timber OP and owns 99.76% of its Common Units directly and indirectly. The remaining 0.24% of the Common Units are owned by current and former officers and directors of CatchMark (the "Limited Partners").

CatchMark Timber OP issues LTIP Units to certain officers, directors, and employees of CatchMark. LTIP Units are a class of units structured to qualify as “profits interests” for federal income tax purposes that, subject to certain conditions, including vesting, are convertible by the holder into the Common Units. The LTIP Units initially have no value and are not at parity with the Common Units with respect to liquidating distributions. Regular and other non-liquidating distributions are made by CatchMark Timber OP with respect to unvested LTIP Units as provided in the applicable award agreement for such units. Upon the occurrence of specified events, the LTIP Units can over time achieve partial to full parity with the Common Units.

Vested LTIP Units that have achieved full parity with the Common Units are automatically converted into the Common Units on a one-for-one basis. Vested LTIP Units that have not achieved full parity with the Common Units may convert into the Common Units on less than a one-for-one basis based on relative capital accounts. Limited partners holding Common Units, including those converted from LTIP Units, have the option to cause CatchMark Timber OP to redeem such units after the units have been held for one year. Unless CatchMark Timber Trust exercises its right to purchase the Common Units in exchange for shares of its common stock, CatchMark Timber OP would redeem each such unit with cash equal to the value of one share of CatchMark Timber Trust's common stock.

CatchMark recognizes noncontrolling interests associated with the Common Units held by the Limited Partners and the LTIP Units in an amount equal to the cumulative compensation cost of such units. Upon any forfeiture of the LTIP Units, the associated noncontrolling interests is reclassified to additional paid-in capital. Upon the conversion of the LTIP Units to Common Units, noncontrolling interests is adjusted so that the book value of each newly converted Common Unit equals the book value of an existing Common Unit. Noncontrolling interests is subsequently adjusted by allocations of earnings and distributions paid.

For the three months ended March 31, 2022 and 2021, CatchMark recognized $0.3 million and $0.2 million in stock-based compensation expense, respectively, related to the Common Units held by the Limited Partners and the LTIP Units as noncontrolling interests. In January 2022, as the result of forfeitures of 105,862 performance-based LTIP Units, $0.7 million of cumulative compensation costs related to such forfeited LTIP Units previously recognized as noncontrolling interests was reclassified to additional paid-in capital. During the three months ended March 31, 2022, no LTIP Units were converted to Common Units.

9.     Stock-based Compensation

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Long-Term Incentive Plans

On June 24, 2021, CatchMark's stockholders approved a long-term incentive plan (the "2021 Incentive Plan") at its 2021 annual meeting of stockholders. The 2021 Incentive Plan replaced CatchMark's 2017 long-term incentive plan. The 2021 Incentive Plan allows for the award of options, stock appreciation rights, restricted stock, RSUs, deferred stock units, performance awards, other stock-based awards, LTIP Units or any other right or interest relating to stock or cash to the employees, directors, and consultants of CatchMark or its affiliates. A total of 2.0 million shares of CatchMark's common stock were reserved and available for issuance pursuant to awards granted under the 2021 Incentive Plan. As of March 31, 2022, 1.2 million shares of CatchMark's common stock remained available for issuance under the 2021 Incentive Plan.

Service-based Restricted Stock Grants to Employees

On February 18, 2022, CatchMark granted 182,794 shares of service-based restricted stock to its employees and officers, which will vest in equal installments over a four-year period. The fair value of $1.5 million was determined based on the closing price of CatchMark's common stock on the grant date and is amortized evenly over the vesting period.

A rollforward of CatchMark's unvested, service-based restricted stock awards to employees for the three months ended March 31, 2022 is as follows:
 
Number of Shares
 
Weighted-Average
Grant Date
Fair Value
Unvested at December 31, 2021373,047  $10.62 
Granted
182,794 $8.02 
Vested(130,886)$10.84 
Forfeited(5,500)$9.49 
Unvested at March 31, 2022419,455  $9.43 

Performance-based Grants and Forfeitures

On January 20, 2022, the Compensation Committee of the CatchMark's board of directors (the "Compensation Committee") determined that performance-based grants issued pursuant to CatchMark's 2019 executives' LTIP with a performance period from January 1, 2019 through December 31, 2021 were not earned. As a result, 105,862 LTIP Units issued thereunder were forfeited and the remaining unamortized cost of $144,000 associated with these grants was expensed in the first quarter of 2022.

On March 2, 2022, CatchMark granted 358,454 shares of performance-based LTIP Units to its executive officers and 232,222 shares of performance-based restricted stock to its executive officers and eligible officers (the "2022 Performance-based Grant"). The issuance represents the maximum number of LTIP Units or shares of restricted stock that could be earned based on the relative performance of CatchMark's TSR against pre-established benchmarks over a three-year performance period from January 1, 2022 to December 31, 2024. The Compensation Committee will determine the earned awards after the end of the performance period, and the earned awards will vest in two equal installments in the first quarter of 2025 and 2026. The total compensation cost of the 2022 Performance-based Grant was $2.1 million and will be amortized over a weighted-vesting period of 3.4 years. The fair value of each LTIP Unit and share of restricted stock was calculated using Monte-Carlo simulation with the following assumptions:

Grant date CTT closing price (March 2, 2022)$7.89 
Weighted-average fair value per granted LTIP Unit/share$3.62 
Assumptions:
Volatility43.15 %
Expected term (years)3.0
Risk-free interest rate1.65 %


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A rollforward of CatchMark's unvested, performance-based LTIP Units grants for the three months ended March 31, 2022 is as follows:
 
Number of Units
 
Weighted-Average
Grant Date
Fair Value
Unvested at December 31, 2021505,908 $6.52 
Granted
358,454 $3.62 
Vested $ 
Forfeited(105,862)$8.13 
Unvested at March 31, 2022758,500  $4.92 

A rollforward of CatchMark's unvested, performance-based restricted stock grants for the three months ended March 31, 2022 is as follows:
 
Number of Shares
 
Weighted-Average
Grant Date
Fair Value
Unvested at December 31, 202167,769 $6.14 
Granted
232,222 $3.62 
Vested $ 
Forfeited $ 
Unvested at March 31, 2022299,991  $4.19 

Stock-based Compensation Expense

A summary of CatchMark's stock-based compensation expense for the three months ended March 31, 2022 and 2021 is presented below:
Three Months Ended March 31,
(in thousands)20222021
General and administrative expenses$680 $512 
Forestry management expenses171 107 
Total (1)
$851 $619 
(1)The three months ended March 31, 2022 and 2021 includes $0.3 million and $0.2 million of stock-based compensation recognized as noncontrolling interest, respectively.

As of March 31, 2022, approximately $7.3 million of compensation expense related to unvested restricted stock and LTIP Units remained to be recognized over a weighted-average period of 2.8 years.

10.     Segment Information

As of March 31, 2022, CatchMark had the following reportable segments: Harvest, Real Estate and Investment Management. Harvest includes wholly-owned timber assets and associated timber sales, other revenues and related expenses. Real Estate includes timberland sales, cost of timberland sales and large dispositions. Investment Management includes investment in and income (loss) from unconsolidated joint ventures and asset management fee revenues earned for the management of these joint ventures. General and administrative expenses, along with other expense and income items, are not allocated among segments. Asset information and capital expenditures by segment are not reported because CatchMark does not use these measures to assess performance. CatchMark’s investments in unconsolidated joint ventures are reported separately on the accompanying consolidated balance sheets. During the periods presented, there have been no material intersegment transactions.

The following table presents revenues by reportable segment:
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Three Months Ended March 31,
(in thousands)20222021
Harvest$18,693 $21,211 
Real Estate6,070 3,357 
Investment Management2,179 3,118 
Total $26,942 $27,686 

Adjusted EBITDA is the primary performance measure reviewed by management to assess operating performance. The following table presents Adjusted EBITDA by reportable segment:
Three Months Ended March 31,
(in thousands)20222021
Harvest$9,611 $8,927 
Real Estate5,752 3,144 
Investment Management2,733 3,820 
Corporate(3,250)(2,954)
Total $14,846 $12,937 

A reconciliation of Adjusted EBITDA to GAAP net income (loss) is presented below:
Three Months Ended March 31,
(in thousands)20222021
Adjusted EBITDA$14,846 $12,937 
Subtract:
Depletion4,149 7,725 
Interest expense (1)
2,111 2,342 
Amortization (1)
423 633 
Depletion, amortization, and basis of timberland and mitigation credits sold included in income from unconsolidated joint venture (2)
64 88 
Basis of timberland sold, lease terminations and other (3)
4,040 1,966 
Stock-based compensation expense851 619 
Post-employment benefits (4)
8 16 
Other (5)
16 99 
Net income (loss)$3,184 $(551)
(1)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 expense, land rent expense, or other operating expenses in the accompanying consolidated statements of operations.
(2)Reflects our share of depletion, amortization, and basis of timberland and mitigation credits sold of the unconsolidated Dawsonville Bluffs joint venture.
(3)Includes non-cash basis of timber and timberland assets written-off related to timberland sold, terminations of timberland leases and casualty losses.
(4)Reflects one-time, non-recurring post-employment benefits associated with the retirement of our former CEO, including severance pay, payroll taxes, professional fees, and accrued dividend equivalents paid in installments over agreed-upon periods of time.
(5)Includes certain cash expenses paid, or reimbursement received, 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 initiatives.

11.     Subsequent Event

Dividend Declaration
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On May 5, 2022, CatchMark declared a cash dividend of $0.075 per share for its common stockholders of record on May 31, 2022, payable on June 15, 2022.
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ITEM 2.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with our accompanying consolidated financial statements and notes thereto. See also “Cautionary Note Regarding Forward-Looking Statements” preceding Part I of this report, as well as our consolidated financial statements and the notes thereto and Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2021.

Overview

We acquire and operate prime timberlands located in leading U.S. mill markets. We actively manage our timberlands to achieve an optimum balance among biological timber growth, current harvest cash flow, and responsible environmental stewardship. We continued to execute our three-pillar strategy of owning and investing in prime timberlands located in leading mill markets, and optimizing harvest operations through delivered wood sales and opportunistic stumpage sales. After completing the disposition of our Pacific Northwest timberlands and exiting the Triple T joint venture in the second half of 2021, we have refocused our ownership and operations on the nation’s premier wood basket, the U.S. South. We are seeking to expand our presence in superior mill markets where we already have strong local relationships to strengthen our Harvest EBITDA while maintaining stable merchantable inventory per acre. Our strategic investment opportunities include direct acquisition of high-quality industrial timberland properties with a target average transaction size ranging from $5 million to $50 million, and the development of new revenue-generating environmental initiatives such as wetlands mitigation banking, solar projects, and carbon sequestration.

During the first quarter of 2022, we realized significant net timber sales price increases in the U.S. South, 8% for pulpwood and 30% for sawtimber, as compared to the prior year quarter. As a result, we increased timber sales revenue in the U.S. South by 17% despite a 2% planned harvest volume reduction. Our U.S. South stumpage prices maintained significant premiums over South-wide averages a result of our local market advantages. Our timberlands continue to maintain harvest productivity of approximately 5.1 tons per acre, consistent with our three and five-year average.

We continuously assess potential alternative uses of our timberlands, as some of our properties may be more valuable for development, conservation, recreational or other purposes than for growing timber. In the first quarter of 2022, we sold 3,400 acres of timberland for $6.1 million, or $1,771 per acre, under our retail land sales program. Acres sold in the current quarter was comprised of approximately 37% pine plantation, which was about half of our portfolio average. When evaluating our land sale opportunities, we assess a full range of matters relating to the timberland property or properties, including, but not limited to inventory stocking below portfolio average, higher mix of hardwood inventory, below portfolio-average productivity characteristics, geographical procurement and operating areas, and timber reservation opportunities.

During the first quarter of 2022, we paid $3.6 million of distributions to our stockholders, which were fully covered by net cash provided by operating activities. We did not repurchase any shares of our common stock under our SRP during the quarter.

Timberland Portfolio

As of March 31, 2022, we wholly owned interests in 365,300 acres of high-quality industrial timberland in the U.S. South, consisting of 352,500 acres of fee timberlands and 12,800 acres of leased timberlands (expiring in May 2022). Our wholly-owned timberlands are located within an attractive fiber basket encompassing a diverse group of pulp, paper and wood products manufacturing facilities. Our timberlands consisted of 72% pine plantations by acreage and 55% sawtimber by volume.

Acres by state as of March 31, 2022 FeeLeaseTotal
Alabama65,100 1,800 66,900 
Georgia220,200 11,000 231,200 
South Carolina67,200 — 67,200 
Total352,500 12,800 365,300 
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As of March 31, 2022, our wholly-owned timber inventory consisted of an estimated 13.9 million tons of merchantable inventory with the following components:

(in millions)Tons
Merchantable timber inventory (1)
Fee
Lease (3)
Total
Pulpwood6.20.16.3
Sawtimber (2)
7.40.27.6
Total13.60.313.9
(1)Merchantable timber inventory does not include current year growth.
(2) Includes chip-n-saw and sawtimber.
(3)Lease expiring in May 2022 and includes certain stocking reversion requirements upon its expiration.

In addition to our wholly-owned timberlands, we owned a 50% membership interest in the Dawsonville Bluffs joint venture as of March 31, 2022 (see Note 4 — Unconsolidated Joint Venture to our accompanying consolidated financial statements for further details).

Segment Information

We have three reportable segments: Harvest, Real Estate and Investment Management. Our Harvest segment includes wholly-owned timber assets and associated timber sales, other revenues and related expenses. Our Real Estate segment includes timberland sales, cost of timberland sales and large dispositions. Our Investment Management segment includes investments in and income (loss) from unconsolidated joint ventures and asset management fee revenues earned for the management of these joint ventures. General and administrative expenses, along with other expense and income items, are not allocated among segments. For additional information, see Note 10 — Segment Information to our accompanying consolidated financial statements.

Timber Agreements

A significant portion of our timber sales is derived from the Mahrt Timber Agreements under which we sell specified amounts of timber to WestRock subject to market pricing adjustments. For full year 2022, WestRock is required to purchase a minimum of 371,100 tons of timber under the Mahrt Timber Agreements. For the three months ended March 31, 2022, WestRock purchased 70,000 tons under the Mahrt Timber Agreements, which represented 8% of our net timber sales revenue. See Note 7 — Commitments and Contingencies to our accompanying consolidated financial statements for additional information regarding the material terms of the Mahrt Timber Agreements.

We are party to a pulpwood supply agreement with IP (the "Carolinas Supply Agreement"). For full year 2022, IP is required to purchase a minimum of 50,000 tons of timber under the Carolinas Supply Agreement. During the three months ended March 31, 2022, we sold 6,100 tons under the Carolinas Supply Agreement, which represented 1% of our net timber sales revenue.

Liquidity and Capital Resources

Overview

Cash flows generated from our operations are primarily used to fund recurring expenditures and distributions to our stockholders. The amount of distributions to common stockholders is authorized by our board of directors and is dependent upon a number of factors, including funds deemed available for distribution based principally on our current and future projected operating cash flows, less capital requirements necessary to maintain our existing timberland portfolio. In determining the amount of distributions to common stockholders, we also consider our financial condition, our expectations of future sources of liquidity, current and future economic conditions, market demand for timber and timberlands, and tax considerations, including the annual distribution requirements necessary to maintain our status as a REIT under the Code.
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In determining how to allocate cash resources in the future, we will initially consider the source of the cash. We anticipate using a portion of cash generated from operations, after payments of periodic operating expenses and interest expense, to fund certain capital expenditures required for our timberlands. Any remaining cash generated from operations may be used to pay distributions to stockholders and partially fund timberland acquisitions. Therefore, to the extent that cash flows from operations are lower, whether as a result of a reduction in anticipated harvest amounts or timber sales, decreases in asset management fees or distributions from joint ventures, or otherwise, timberland acquisitions and stockholder distributions are anticipated to be lower as well. Capital expenditures, including new timberland acquisitions, are generally funded with cash flow from operations or existing debt availability; however, proceeds from future debt financings, and equity and debt offerings may be used to fund capital expenditures, acquire new timberland properties, invest in joint ventures, and pay down existing and future borrowings. From time to time, we also sell certain large timberland properties in order to generate capital to fund capital allocation priorities, including but not limited to redeployment into more desirable timberland investments, pay down of outstanding debt or repurchase of shares of our common stock. Such large dispositions are typically larger in size and more infrequent than sales under our normal land sales program.

Shelf Registration Statement and Equity Offerings

On February 28, 2020, we filed a shelf registration statement on Form S-3 (File No. 333-236793) with the SEC, which was declared effective on May 7, 2020. Our shelf registration statement provides us with future flexibility to offer, from time to time and in one or more offerings, up to $600 million in an undefined combination of debt securities, common stock, preferred stock, depositary shares, or warrants. The terms of any such future offerings would be established at the time of an offering. On May 7, 2020, we entered into a distribution agreement with a group of sales agents relating to the sale from time to time of up to $75 million in shares of our common stock in at-the-market offerings or as otherwise agreed with the applicable sales agent, including in block transactions. These shares are registered with the SEC under our shelf registration statement. As of March 31, 2022, we have not sold any shares of common stock under the distribution agreement.

Credit Facilities

The table below presents the details of each credit facility under the Amended Credit Agreement as of March 31, 2022:
(dollars in thousands)
Facility NameMaturity Date
Interest Rate (1)
Unused Commitment Fee (1)
Total CapacityOutstanding BalanceRemaining Capacity
Term Loan A-1
12/23/2024LIBOR + 1.75%