CHANGES IN TIMBERLAND OWNERSHIP Peter R. Stein General Partner The Lyme Timber Company 23 South Main...

CHANGES IN TIMBERLAND OWNERSHIP

Peter R. SteinGeneral Partner The Lyme Timber Company23 South Main StreetHanover, New Hampshire 03755E-mail: [email protected]

• Cerberus Capital Management (NYC-based investment bank) acquires 5 mills plus 907,000 acres from MeadWestvaco (lands located in Michigan, Ohio and Kentucky).

• Harvard Management Company (Harvard University’s Endowment) has 10.2% of its $23,000,000,000 endowment invested in timberland (both U.S. and offshore).

• Crown-Pacific, formerly a publicly traded limited partnership, is now Cascade Timberlands (composed of banks and insurance companies who provided loans to Crown-Pacific) and owns 522,000 acres in Washington and Oregon.

• All of International Paper’s lands in Maine and New Hampshire, 1.2 million acres, were acquired by GMO.

3 California Forest Futures 2005

Forest Ownership Climate

Working Forests Fast Becoming Financial Assets

Instead of Production Resources

Forest Product and Paper Companies

Investment-Oriented Landowners

Forest Dispositions

Estimate 25+ Million Acres Sold Since 1985

This is Creating Both Challenges and Opportunities for Working Forests



Do Not Own Working Forests

Georgia-Pacific

Louisiana Pacific

Boise Cascade

MacMillan-Bloedel

Cavenham Industries

Diamond International

Scott Paper

James River Corporation

Champion International

Union Camp

Stone Container Corporation

Crown Zellerbach

St. Regis

Willamette Industries

Still Own Working Forests

International Paper

Weyerhaeuser

Temple-Inland

Bowater

Potlatch

Longview Fibre

Sierra Pacific

Roseburg

Seneca

Simpson

Gulf States

New Investment Focused Owners

TIMOs

Forest Capital Partners

Forest Investment Associates

The Forestland Group

Hancock Timber Resource Group

Molpus Woodlands

PruTimber

RMK Timberland Investments

The Campbell Group

GMO Renewable Resources

Forest Systems

Public REITS

Plum Creek Timber

Rayonier

OWNERSHIP ENTITIES

TraditionalFamily (NIPF)

Publicly traded forest products company (Weyerhaeuser)

New Financial OwnersREITsTIMOs

Private equityConservation ngos

• Good news: TIMOs understand working forest conservation

easements (WFCEs)

• Bad news: very limited appetite for charitable dispositions

(gifts/bargain-sales)

• Good news: focus on realizing capital events in the short to

medium term (willing sellers).

• Bad news: understanding of HBU values and capacity to monetize

those values (no worries about their mills running out of fiber) or reputational risk.

T i m b e r l a n d S a l e s - A c r e s v s . % o f G T VM E , N H , V T , a n d N Y S a l e s

1 9 9 0 t o 2 0 0 55 0 0 t o 1 0 0 , 0 0 0 A c r e s

R 2 = 0 . 3 6

R 2 = 0 . 3 7

R 2 = 0 . 4 3

4 0 %

5 0 %

6 0 %

7 0 %

8 0 %

9 0 %

1 0 0 %

1 1 0 %

1 2 0 %

1 3 0 %

1 4 0 %

0 1 0 , 0 0 0 2 0 , 0 0 0 3 0 , 0 0 0 4 0 , 0 0 0 5 0 , 0 0 0 6 0 , 0 0 0 7 0 , 0 0 0 8 0 , 0 0 0 9 0 , 0 0 0 1 0 0 , 0 0 0

1 9 9 0 - 1 9 9 4 1 9 9 5 - 1 9 9 9 2 0 0 0 - 2 0 0 5

C O N F I D E N T I A L - F o r L y m e T i m b e r ' s u s e o n l y , n o t f o r d i s t r i b u t i o n .

Credit/Acknowledgement

Slides Nos. 3 through 9 used by permission of FOREST Systems from the Power Point presentation “California Forest Futures 2005”. Remarks by Scott Sacco. Transaction details provided by Timberland Markets Report.

CHANGES IN TIMBERLAND OWNERSHIP Peter R. Stein General Partner The Lyme Timber Company 23 South Main...

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