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# # #
Tri Pointe Homes in $2.7 billion Weyerhaeuser deal
CNBC.com, Nov 4, 2013
Weyerhaeuser is selling its homebuilding division to Tri Pointe Homes in a $2.7 billion deal that will leave Weyerhaeuser shareholders in control of one of the 10-largest homebuilders in the United States.
Tri Pointe said the deal would give it control of about 27,000 lots in high-growth markets where there are shortages of land ready to build on.
Under terms of the transaction, Weyerhaeuser shareholders will receive about $2 billion in Tri Pointe's stock, based on Tri Pointe's Friday close of $15.38.
The Weyerhaeuser unit, Weyerhaeuser Real Estate (WRECO), will also pay $700 million in cash to its parent.
Weyerhaeuser shareholders will own 80.5 percent of the combined company after the deal is completed.
Shares of Tri Pointe, which is backed by Barry Sternlicht's Starwood Capital Group, have risen 9 percent since Reuters first reported on Oct. 21 that it was in advanced talks to buy the Weyerhaeuser unit.
The unit's biggest brand is Pardee Homes, which builds houses in Southern California and Las Vegas. Its other brands include Trendmaker Homes in Texas and Maracay Homes in Arizona.
Doug Bauer will continue to serve as Tri Pointe's chief executive upon closing of the transaction.
Weyerhaeuser said some assets of WRECO are excluded from the deal, which is expected to close by the end of the second quarter of 2014.
Deutsche Bank Securities is the financial adviser to Tri Pointe and Gibson, Dunn & Crutcher is the legal adviser.
# # #
Home builders TRI Pointe, Weyerhaeuser Real Estate to merge
The $2.7-billion deal greatly expands TRI Pointe's footprint — until now focused in California and Colorado — into markets the Irvine builder sees as poised for long-term growth.
By Andrew Khouri, Los Angeles Times, November 4, 2013
Irvine builder TRI Pointe Homes plans to combine with Weyerhaeuser Real Estate Co. in a deal pegged at roughly $2.7 billion, giving the Orange County firm a nationwide stake in a recovering housing market.
The deal greatly expands TRI's footprint — until now focused in California and Colorado — into markets it sees as poised for long-term growth, including Phoenix, Washington, D.C, Richmond, Va., Houston, Las Vegas, Tucson and the Seattle region. The merger, announced Monday, transforms the Irvine firm into one of the nation's 10 largest home builders based on estimated combined market value, TRI said.
"We are barely a year into a housing recovery. It's perfect timing," said TRI Pointe Chief Executive Doug Bauer.
Although TRI will gain access to markets nationwide, the greatest boost to its portfolio will come in the highly sought-after California market, including Los Angeles, San Diego, Riverside and San Bernardino counties, where buildable lots are in short supply. California home prices have flattened recently, but only after skyrocketing earlier in the year, with families and investors in bidding wars over the thin supply of homes.
Despite that sharp rebound, builders have yet to ramp up construction to historically normal levels. One reason builders cite is the shortage of buildable lots after development stalled during the recession.
TRI Pointe Homes Inc., which went public in January, said the deal would add roughly 27,000 lots to its portfolio — with more than 16,000 of those in California markets with a shortage of ready-to-go-lots, making it a significant player within the state. As of the second quarter, the company owned or controlled only 2,682 lots in California and Colorado.
"This provides us access to markets right in our backyard, with land and lots we can build on," Bauer said.
TRI Pointe gains five brands of Weyerhaeuser Real Estate: Pardee Homes, Trendmaker Homes, Maracay Homes, Winchester Homes and Quadrant Homes.
Weyerhaeuser Real Estate, a wholly owned subsidiary of Weyerhaeuser Co., will merge with TRI Pointe Homes after splitting from the parent company, based in Washington state. Some assets of Weyerhaeuser Real Estate would not be part of the deal, the companies said, without providing details.
In June, Weyerhaeuser Co., citing a rebounding housing market, said it would explore "strategic alternatives" for its home building business, including a merger, sale or spinoff. Its shareholders would control roughly 80.5% of the newly merged home builder.
The deal is expected to close in the second quarter of next year. TRI said it would retain its headquarters in Irvine, as well as its top management. Bauer said there would be no layoffs involving the merger.
TRI Pointe's stock closed at $16.15, up 77 cents, or 5.01%. Shares of Weyerhaeuser Co. closed at $30.37, up 3 cents, or 0.1%.
# # #
$1.1 billion deal would double Plum Creek’s SC timber land, make it part owner of Charleston-area development
By Joey Holleman, The State [Charleston SC], October 28, 2013
A major S.C. landowner, Plum Creek Timber Co., plans to nearly double its Palmetto State acreage by buying 175,400 acres from MeadWestvaco.
That property is expected to remain as timberland, according to a Plum Creek news release. But as part of the deal, Plum Creek also would acquire a 50 percent interest in an additional 109,000 acres that MeadWestvaco planned to develop in the Charleston area.
Plum Creek also would buy about 325,000 acres of MeadWestvaco land in four other states – Alabama, Georgia, Virginia and West Virginia. The total purchase price is nearly $1.1 billion – including $869 million for the timberland, $152 million for the 50 percent stake in the development-quality land near Charleston and $65 million for mineral rights and wind-power assets.
Seattle-based Plum Creek stepped up its S.C. land holdings about 10 years ago when long-standing timber giants began to sell their land. Before the MeadWestvaco deal, Plum Creek owned about 177,000 S.C. acres, much of it purchased from Georgia-Pacific. Most of that land remains in timber production, and Plum Creek intends to do the same with the MeadWestvaco timberland.
“These timber lands have a long history of excellent forest management,” Plum Creek chief executive Rick Holley said. “The high stocking levels and older age of the timberlands make them particularly attractive. These assets should integrate seamlessly into our existing timberland ownership in the Southeast.”
As part of the deal, Richmond, Va.-based MeadWestvaco gets a massive influx of cash, including about $665 million to be distributed to shareholders.
“This transaction delivers on all of our objectives,” MeadWestvaco CEO John A. Luke Jr. said. “It enables us to maximize the value of our land holdings in a tax-efficient manner, while retaining the substantial upside potential of the attractive real estate opportunities in the growing Charleston market. At the same time, we are maintaining a secure source of fiber for our mills.”
Once the purchase is complete, Plum Creek will own 352,400 acres in South Carolina, or about 1.7 percent of the state, plus its 50 percent interest in the 109,000-acre Charleston development site.
That site includes some developments already in the works, including the Nexton planned community and an industrial park in Summerville. But the largest chunk of the land is in long-term projects, including a 78,000-acre East Edisto project in Charleston and Dorchester counties, according to Westvaco.
# # #
MeadWestvaco to sell forestlands in $1.1B deal to Plum Creek Timber
by Tyrone Richardson, Charleston SC Post and Courier, October 28, 2013
Plum Creek Timber, one of the nation’s largest landowners, is acquiring all of MeadWestvaco’s U.S. forestlands and investing in the company’s Summerville-based development group as part of a billion-dollar deal announced Monday.
The $1.1 billion purchase agreement includes all the forestlands and certain related assets, totaling about 501,000 acres spread across five states, including 200,000 in South Carolina, according to MeadWestvaco officials.
Plum Creek Timber is also partnering with MeadWestvaco’s Summerville-based real estate business. That deal includes Plum Creek paying $152 million for an ownership stake in about 109,000 acres of development property in the Charleston region.
“This transaction delivers on all of our objectives — it enables us to maximize the value of our land holdings in a tax-efficient manner, while retaining the substantial upside potential of the attractive real estate opportunities in the growing Charleston market,” said John A. Luke Jr., chairman and CEO of MWV. “At the same time, we are maintaining a secure source of fiber for our mills.”
Earlier this year, MeadWestvaco announced plans to seek a partner to help it “unlock the value” of its real estate business and the acreage it oversees.
The Richmond, Va.-based company has been shifting away from its paper-making business. Because of that, it no longer needs as much property, though it typically retains timber rights for land it sells.
Plum Creek’s joint venture with MWV Community Development and Land Management is broken into two segments.
The first has MWV holding 95 percent interest and Plum Creek with the remaining five percent in “active developments” such as Nexton, a massive residential and commercial real estate project near Summerville. The company is also building several business parks around the Lowcountry, in addition to the 72,000-acre East Edisto, which has been described as a 50-year, mixed-use project where western Charleston County bumps up against Dorchester County.
The second partnership between the two companies deal with “long-term development projects” that are split 50-50 by the two, officials said.
Ken Seeger, president of MWV Community Development and Land Management, called the deal a “win-win.”
“Plum Creek is a stable owner that cares about sustainability, and I think the land is in good hands and they’re also a very substantial partner to have in our development business,” Seeger said.
The deal is not expected to affect MeadWestvaco’s Summerville operations, Seeger added.
He estimated his division has sold about 500,000 to 600,000 acres since it was created six years ago. About half of the remaining acreage it manages is in South Carolina.
“They understand and appreciate our commitments in the Charleston community, and we are very happy that they have chosen to invest in us,” Seeger said.
Plum Creek Timber is touted as one of the nation’s largest private landowners. As of 2012, Plum Creek owned about 6.4 million acres of timberlands in 19 states, including 177,000 in South Carolina, according to its website.
# # #
Plum Creek Timber to Acquire Southern Timberlands and Interest in South Carolina Development Lands
Business Wire -- Marketwatch, October 28, 2013
Plum Creek Timber Company, Inc. PCL today announced it has signed a $1.1 billion purchase and sale agreement to acquire approximately 501,000 acres of industrial timberlands, associated wind and mineral assets, and an interest in approximately 109,000 acres of high-value rural and development-quality lands from MeadWestvaco Corporation MWV. The transaction is subject to the satisfaction of usual and customary closing conditions and is expected to close during the fourth quarter of 2013.
Specifically, Plum Creek has agreed to acquire:
-- 501,000 acres of industrial timberlands in Alabama, Georgia, South Carolina, Virginia, and West Virginia for $869 million;
-- An investment in joint ventures consisting of 109,000 acres of high-value rural lands and development-quality lands near Charleston, S.C., for $152 million;
-- Subsurface rights, mineral rights and wind power assets associated with the timberlands for $65 million.
"This transaction adds significant assets to our existing timber resource base and is expected to be cash flow accretive in the first 12 months. It also expands our portfolios of high-value rural land and non-timber resources," said Rick Holley, chief executive officer. "These timberlands have a long history of excellent forest management. The high stocking levels and older age of the timberlands make them particularly attractive. These assets should integrate seamlessly into our existing timberland ownership in the Southeast and add to our presence in key markets. The West Virginia timberlands are contiguous with our high-value hardwood lands in the state."
"The joint-venture interests in high-value rural and development-quality lands are a good fit for Plum Creek, due to our experience in capturing value from these types of properties. Similarly, the mineral and wind power assets are familiar asset types."
At closing, Plum Creek will pay the seller $226 million in cash and issue an $860 million ten-year installment note for the assets.
Following the completion of the transaction, the timber harvest from the acquired lands is expected to average nearly 3 million tons annually over the next 10 years, growing Plum Creek's total annual harvest more than 15 percent from recent levels. The mineral and wind assets associated with the timberlands are expected to generate approximately $6 million of annual cash flow, assuming current commodity prices.
Upon completion of the transaction, through a 50/50 joint venture formed by Plum Creek and MeadWestvaco, the companies plan to pursue an entitlement and development strategy for 87,000 acres of high-value lands over the next several years in the Charleston, S.C., market. In addition, Plum Creek will hold a 5 percent interest (valued at $12.5 million) in approximately 22,000 acres of residential, commercial and industrial properties that are actively being developed in the same market.
Plum Creek expects to use a combination of equity and debt to finance the acquisition, consistent with Plum Creek's current credit profile and capital structure.
# # #
Plum Creek Timber to buy MeadWestvaco land for $1 billion
By Christopher Donville, Bloomberg News - Seattle Times, October 28, 2013
Plum Creek Timber, a Seattle-based real-estate-investment trust with investments in forest products, agreed to acquire MeadWestvaco’s U.S. timberlands for $1.09 billion.
Plum Creek will pay $869 million for 501,000 acres of woodlands in Alabama, Georgia, South Carolina, Virginia and West Virginia and $152 million for “high value” rural lands and development-quality lands near Charleston, S.C., the company said Monday after the market’s close.
“These assets should integrate seamlessly into our existing timberland ownership in the Southeast and add to our presence in key markets,” said Rick Holley, Plum Creek’s chief executive.
The deal with Richmond, Va.-based MeadWestvaco, a maker of consumer packaging with operations in North America, Asia, Europe and South America, also includes $65 million for subsurface rights, mineral rights and wind-power assets associated with the timberlands, Plum Creek said.
At closing, Plum Creek will pay MeadWestvaco $226 million in cash and issue an $860 million, 10-year installment note for the assets, Plum Creek said.
Both companies also agreed to form joint ventures to develop lands in South Carolina, MeadWestvaco said. Most of the proceeds from the transaction will be distributed to MeadWestvaco shareholders, the packaging maker said.
# # #
Plum Creek Timber Continues to Collect Rocks
By Rich Smith, Fool.com, Sept 26, 2013
Plum Creek Timber (NYSE: PCL) is diversifying even further into gravel.
On Wednesday, the forest products company announced that it has signed an agreement expanding its relationship with rock products specialist Vulcan Materials Company (NYSE:VMC) , agreeing to pay $154 million for an interest in the production of 255 million tons of rock from four Vulcan quarries located in the metro Atlanta market.
In exchange for its investment, Plum Creek says it will begin receiving royalties from sales of crushed stone from the quarries, and will continue receiving such royalties for the next 25 years. In a statement describing the deal, Plum Creek CEO Rick Holley explained: "This transaction is a unique opportunity for Plum Creek to increase our interest in construction material production in the attractive southeastern markets. These quarries are exceptionally well positioned for the recovery in the infrastructure, industrial and housing sectors in and around Atlanta."
Close to Atlanta the quarries may be, but as unusual as it may sound for a lumber company to be buying an interest in rock, the transaction is in fact not unique at all. In January, Plum Creek signed a similar deal with Vulcan, paying $75 million for an interest in 144 million tons of crushed stone production from four different quarries serving the markets in Greenville, and Spartanburg, S.C.
Vulcan said Wednesday that the latest deal allows it to "unlock long-term value in these quarries, tax efficiently, while maintaining full ownership and operational control of the quarries, fixed assets, and land. A pre-tax gain of $154 million, less modest transaction expenses, will be recognized over the life of the transaction."
# # #
Weyerhaeuser Home-Building Division Attracts Brookfield Residential
Wall Street Journal, September 20, 2013
The land developer and home builder controlled by Brookfield Asset Management Inc. BAM.A.T is among the bidders for Weyerhaeuser Co.'s WY home-building division, according to two people familiar with the talks.
Weyerhaeuser said in June that it would study selling or spinning off its home-building unit to focus on timber. Analysts have estimated the value of the division, called Weyerhaeuser Real Estate Co., at $2.5 billion to $3.5 billion.
Executives of the home-building unit met earlier this month with bidders to answer questions about its operations, according to a third person familiar with the process. While some bidders are interested in only a portion of Weyerhaeuser, Brookfield Residential Properties Inc. BRP.T is interested in buying the entire company.
Representatives of Brookfield and Weyerhaeuser declined to comment.
Brookfield Residential both develops land for housing and builds homes, whereas Weyerhaeuser Real Estate does mainly the latter. Brookfield Residential has the clout to complete such a large deal because it is 69%-owned by Canada-based Brookfield Asset Management, which oversees more than $180 billion of assets.
Weyerhaeuser, which is based in Federal Way, Wash., began building homes in Southern California in 1969. Since then, it has expanded by acquiring home builders such as Pardee Homes in Southern California and Las Vegas, Trendmaker Homes in Houston and Maracay Homes in Arizona. The real-estate division, which regularly ranks among the 20 largest home builders in the U.S., sold 1,099 homes in the first half of this year.
Bidders are interested in Weyerhaeuser Real Estate partly for the 27,000 developed home lots the company controls. There is high demand for lots ready for construction since not many were created during the recession and its aftermath.
Brookfield Residential was formed in 2011 when its parent merged two of its internal divisions and spun it off. It expects to sell 800 home lots and 1,000 completed homes in the U.S. this year, as well as 1,400 lots and 1,350 homes in Canada.
Brookfield's size might lend it an advantage in that Weyerhaeuser wants to sell its home-building division in a reverse Morris trust, which is a tax-free method of spinning off a division to be merged with an acquirer. The new company then issues shares in payment to the selling company.
Brookfield Residential also has studied bidding for closely held California home builder Shapell Homes, as are other bidders.
# # #
Plum Creek and The Enova Group Enter into Contracts for Wood Fiber Supply through Long-Term Fiber Services Agreement
Sept 19, 2013
Plum Creek Timber Company, Inc., (NYSE: PCL) today announced it has entered into a 10-year fiber supply and services agreement with The Enova Group, an independent bioenergy firm headquartered in Atlanta, Ga.
Plum Creek will deliver up to 3 million tons annually of sustainably-managed wood fiber to three pellet manufacturing locations that will be constructed in the Southeastern United States. Approximately 500,000 tons will originate from Plum Creek's timberlands with the remaining 2.5 million tons to be sourced and delivered from third party landowners.
Enova will construct mills to convert wood fiber into pellets to serve global biomass markets. Pellet shipments are expected to begin in 2015.
"This agreement highlights the value of the consistent and reliable supply chain services that Plum Creek provides to our wood fiber customers," said Rick Holley, chief executive officer. "Plum Creek looks forward to working with Enova as it develops renewable energy projects in the Southeast. Further growth in bioenergy markets means cleaner energy, attractive returns for our investors and new jobs for those in the communities where we work and live."
# # #
Packaging Corp offers to buy Boise for $1.28 billion
Reuters, Sept 16, 2013
Packaging Corp of America said it would acquire smaller rival Boise Inc for about $1.28 billion to boost its container board capacity.
Packaging Corp's offer of $12.55 per share represents a premium of 26 percent to Boise's Friday close.
Boise shares were trading at $12.53 before the bell. Packaging Corp shares jumped 10 percent to $60.03.
Packaging Corp, the fourth-largest maker of containerboard and corrugated packaging products in the United States, said it would assume Boise's $714 million debt.
The deal, expected to add to earnings immediately, will increase Packaging Corp's containerboard capacity by 42 percent to 3.7 million tonnes (1 tonne = 1.102 metric tons).
The company also said the acquisition will boost its presence in the Pacific Northwest.
Packaging Corp was advised by BofA Merrill Lynch while JP Morgan Securities LLC advised Boise.
# # #
Railroads run deep in Northwest's past, present
Railroads remain a critical part of the economy here, not just for transporting passengers but also for moving freight.
By Jon Talton, Special to The Seattle Times, Sept 14, 2013
As every Washington schoolchild should know, in 1873 the Northern Pacific selected Tacoma to be the western terminus of the nation’s second transcontinental railroad.
This shocked and enraged Seattle boosters, who set about luring their own railroad, although they had to suffer several years of a pitiful spur linefrom the City of Destiny.
It wasn’t just a civic indignity. It threatened to throttle Seattle’s dreams of becoming a great center of commerce.
Now about the only time many around Puget Sound hear about railroads is from the controversy about more coal trains. It’s an important debate. But it risks ignoring that railroads remain a critical part of the economy here, not just for transporting passengers but also for moving freight.
Today’s freight railroads are gigantic systems backed by advanced technology. More often than not, they are better for the environment than highways and are an essential hedge against climate change.
That wasn’t a concern when the railroad builders of the 19th century gazed northwest. They saw a region rich with timber, minerals, fisheries, trade from “the Orient,” and rich land for farming and settlement.
Especially beginning with the Lincoln administration, linking this continental nation with railroads became a paramount government objective. Thus the Northern Pacific was granted 40 million acres. Among other things, the land was used to raise capital to build the line. That this land was taken from native tribes didn’t concern most Americans.
The building of the West’s railroads was full of grand ambition, engineering feats unlike anything the world had seen, track laid by hand often by Chinese laborers, and spectacular financial skulduggery and collapses. Listen to Gordon Lightfoot’s “Canadian Railroad Trilogy,” imagine it in the states, and you get the idea.
By the early 20th century, four transcontinental lines had been built to Puget Sound: The Northern Pacific, Great Northern, Union Pacific (arriving mostly via negotiated trackage rights on the NP) and the Pacific Extension of the Milwaukee Road. This latter company had the misfortune of being completed just before the Panama Canal was opened, taking away much growth in traffic.
Even so, these lines were essential to the region’s development. In the heyday of luxurious passenger trains on individual railroads, Seattle hosted some of the most famous: The Empire Builder of the Great Northern, North Coast Limited on the Northern Pacific and Olympian Hiawatha on the Milwaukee Road.
They also left behind monuments such as union stations and Seattle’s King Street Station, which has been restored to its original beauty and serves Amtrak, the popular Amtrak Cascades regional trains, and Sounder commuter service.
A bust of James J. Hill, the Great Northern founder nicknamed the Empire Builder, sits atop a plinth on the University of Washington campus.
For decades, railroads struggled over high regulation and taxes while government built roads, interstate highways and airports. The game changed with the 1980 Staggers Act, which deregulated the rail industry.
Government also allowed for more mergers, leaving the nation with four giant rail systems, two of which operate in Washington, the BNSF and UP.
To be sure, many other railroads are around, from the plucky and sizable Kansas City Southern to many short lines such as the tiny Ballard Terminal Railroad.
Staggers was smart deregulation that succeeded, with a minimum of bad unintended consequences. As a result, railroads have enjoyed a renaissance.
Innovation has been considerable, producing, for example, much cleaner and more fuel-efficient locomotives.
Railroads have enjoyed favor on Wall Street, especially since Warren Buffett bought the Burlington Northern Santa Fe — which includes the old NP and GN — for $26.5 billion in 2010.
”The railroad is not just still here, it’s growing,” said Gus Melonas, a spokesman for BNSF Railway, by far the largest rail presence in the state, operating 1,500 miles of lines and employing 3,500.
The company is investing $125 million in upgrades in Washington this year and plans to hire 300 here. Throughout the BNSF system, about $4.3 billion is being spent this year to improve track and buy new equipment, up from $3.6 billion spent in 2012.
According to the American Association of Railroads, 23 railroads operate in Washington. Most are short lines.
Rail moves almost any kind of cargo you can imagine. For BNSF, that includes Boeing fuselages and elephants for Ringling Brothers and Barnum & Bailey’s Circus.
The lines constitute a vital link in the intermodal system of world trade, where containers are moved from ships to trains to trucks.
Railroads also have contracts with major trucking companies to move trailers long distances on fast schedules. BNSF’s Seattle International Gateway is a major intermodal yard.
Being such big freight movers, it’s natural that railroads would be caught up in the debate over coal, as well as moving oil by train as the fracking boom takes off.
The runaway train on a short line in Quebec that exploded in a village, killing 47 in July, is a reminder than railroading is serious business. It now appears the oil in the railcars was mislabeled and was as explosive as gasoline.
The tragedy will provoke examination and new rules, perhaps a new tanker-car design. But with the fracking boom in out-of-the-way places, rail will still be essential for moving oil. U.S. railroads generally have the best safety records in their history.
As for more coal through the Northwest to Asia, you know my view from a column last year: short-term profit but long-term costs to the planet.
Beyond this important debate, modern railroads will continue to be an important part of our future.
Freight railroad miles: 3,157
Freight railroad employees: 3,768
Average wages and benefits: $118,790
Top products shipped: Intermodal, farm products, food products, waste and scrap, lumber and wood, pulp and paper, coal and cement, chemicals
Freight railroad miles: 2,396
Freight railroad employees: 1,995
Average wages and benefits: $105,440
Top products shipped: Lumber and wood, pulp and paper, farm products, intermodal
Freight railroad miles: 1,622
Freight railroad employees: 1,364
Average wages and benefits: $105,130
Top products shipped: Farm products, food products, chemicals, lumber and wood, minerals
Freight railroad miles: 506
Freight railroad employees: 525
Average wages and benefits: $89,990
Top products shipped: Stone and gravel, petroleum products, coal, chemicals
# # #
Weyerhaeuser Completes Acquisition of Longview Timber LLC
PRNewswire, July 23, 2013
Weyerhaeuser Company (NYSE: WY) today announced the completion of its acquisition of Longview Timber LLC from affiliates of Brookfield Asset Management.
The acquisition includes approximately 645,000 acres of high-quality timberlands in Washington and Oregon, which expand Weyerhaeuser's timber holdings in the Pacific Northwest by 33 percent to approximately 2.6 million acres. The transaction increases the total amount of U.S. timberlands Weyerhaeuser owns or controls to approximately 6.6 million acres.
"This acquisition is a truly unique opportunity for us to grow our high-value timberlands assets west of the Cascade Mountains," said Dan Fulton, president and CEO. "This region provides excellent soil and climate conditions for growing Douglas fir, which is a preferred species for many of our customers. We intend to leverage our silviculture, infrastructure, logistics and marketing expertise to realize the full potential of these lands, which are highly complementary to our existing ownership in the area."
Weyerhaeuser Company, one of the world's largest private owners of timberlands, began operations in 1900. We own or control approximately 6.6 million acres of timberlands, primarily in the U.S., and manage another 14 million acres under long-term licenses in Canada. We manage these timberlands on a sustainable basis in compliance with internationally recognized forestry standards. We are also one of the largest manufacturers of wood and cellulose fibers products, and we develop real estate, primarily as a builder of single-family homes. Our company is a real estate investment trust. In 2012, we generated $7.1 billion in sales and employed approximately 13,200 people who serve customers worldwide. We are listed on the Dow Jones World Sustainability Index. Our common stock trades on the New York Stock Exchange under the symbol WY.
# # #
Timber giant Plum Creek buys more land in Floyd County
Rome [Georgia] News-Tribune, June 30, 2013
Plum Creek Timber Co. may be the best-kept secret in Floyd County. The Seattle-based timberland holder controls 13,321 acres in Floyd County alone. The most recent acquisition includes a large amount of property west of Cave Spring in the area of Melson Road.
Plum Creek owns nearly 81,000 acres within a 50-mile radius of Rome. A huge chunk of that, 22,444 acres, is located in Cherokee County, Ala.
It also owns 7,234 acres in Polk County, 5,526 acres in Chattooga County, 2,812 acres in Gordon County and 445 acres in Walker County. Across the nation, the company now holds more than 6.4 million acres.
Plum Creek was formed 25 years ago — spun off from the Burlington Northern Railroad’s Burlington Resources division after acquiring approximately 1.4 million acres from Burlington Resources.
The company made its move into Georgia around 2001, when it acquired a significant portion of what used to be timber controlled by Georgia-Pacific Forests.
“That’s when we really extended our reach, from 3.2 million acres to 7.8 million acres,” said Kathy Budinick, director of communications.
Plum Creek’s land-management philosophy is based on a team approach to maximize its resources. The company attempts to use local foresters side-by-side with financial analysts to enhance the productivity of the acreage the company has, which in turn boosts the value of the company’s asset holdings.
The timber giant looks at its holdings on what some might consider an acre-by-acre basis to evaluate the value of the timber and the value of any other natural resources that might be present — including natural gas, rock and mineral holdings.
And the company produces 116 million seedlings nationally.
“We plant some ourselves, and then we sell seedlings to others,” Budinick said.
The company participates in the Sustainable Forest Initiative, which translates into a code of conduct for the industry.
“It has objectives and performance measures and indicators for how we manage our forests,” Budinick said. “We have a third party come in to certify that we are practicing according to that program.”
Fundamentally, the SFI is meant to combine the perpetual growing and harvesting of trees with the long-term protection of wildlife, soil and water quality.
Jim Bell, a senior resource forester with Plum Creek in Georgia, said the SFI requires the company to replant acres that have been clear-cut within a two-year period of time. Often, he said, it is replanted much sooner.
In Floyd County, Plum Creek completed the acquisition of land southwest of Cave Spring — which includes the Coosa Prairies — about seven weeks ago. The land has a 924-acre conservation easement that protects habitat for a number of endangered floral species, including Mohr’s Barbara buttons, a member of the sunflower family.
The Nature Conservancy holds the conservation easement, which was obtained years ago through the original property owner, Temple-Inland. Plum Creek has already met with TNC as an initial step to developing a master plan for the property.
Drawing on the acreage
Georgia now ranks third, behind Montana and Maine, in terms of Plum Creek’s holdings — with more than 750,000 acres.
The Peach State is likely to become even more important for Plum Creek in the near future as the result of a mountain pine beetle infestation that has struck forests across western Canada.
“It’s been basically wiping out very significant amounts of their timber, and it’ll take years and years for that to come back,” Budinick said. “They’ve been harvesting it because there is a certain shelf-life of it now. Once it’s gone, it takes something like 60 years for it to come back.”
Bell said Plum Creek typically thins out its timber stands. Timber cut during a first thinning across acreage in Floyd County is likely to be sold to the International Paper plant in Coosa. That first cut occurs at between 13 years and 16 years of growth.
When trees are planted they grow quickly during the first decade, he said. But as a stand of trees gets older and thicker, there’s more competition for water and nutrients.
“We want to keep it growing at a really good rate so we come in and thin it. Those trees that are left continue to grow at a good pace, and they’re healthy because they’re not under stress,” Bell said.
When trees reach maturity, they are more likely to be sold to sawmills such as the Georgia-Pacific operation on Mays Bridge Road in Coosa.
Budinick said the timber industry is heavily dependent on housing construction.
“Those housing starts are looking up generally and pretty significantly over the coming years, so we are really pleased about that,” he said. “Exports to China (also) are something that seems to be on the upward trend.”
Most of the timber that goes to China comes from forests in the Pacific Northwest, she said, but the company also makes use of the port of Savannah to export timber from the Southeast.
Exports to China accounted for nearly 7 percent of all U.S. timber production as recently as 2011.
One industry report projects that 12 percent to 22 percent of the U.S. timber market will be affected by the combination of the loss of Canadian timber and the continued growth of exports to China.
Bell said Plum Creek aims to produce somewhere in the neighborhood of 600 trees per acre.
“We’re looking at 90-percent survival,” he said.
Fire is typically not a serious issue in Georgia forests, and Bell said there have not been any problems with the southern pine beetle. He credits the company’s SFI and best-management practices with producing healthy timber that is not as susceptible to the beetle.
Budinick said that, with the supply elsewhere greatly reduced, more and more timber will be used from the U.S. — and a lot of that will come from the forests in the Southeast.
He said it’s difficult to state definitively whether Plum Creek is in a “buy” or “sell” mode when it comes to the acquisition of additional acreage across the Southeast.
“It varies. It just depends on a lot of different factors, from pricing to whether or not the land complements what the company already owns,” Budinick said.
# # #
Things Are Happening At Weyerhaeuser
Seeking Alphas, June 27 2013
On June 16, Weyerhaeuser (WY) made three significant announcements. First, it announced a new CEO, second it announced the purchase of 645,000 acres in the Pacific Northwest (PNW) and third it announced that it is considering divesting of its homebuilding business.
The new CEO will be Doyle Simons. Simons will be taking over in October from retiring CEO Dan Fulton, who has been Weyerhaeuser's CEO since 2008. Fulton successfully guided Weyerhaeuser through its REIT conversion. Doyle had been CEO of Temple-Inland, which was acquired by International Paper in February 2012. Doyle had a 20-year career with Temple-Inland, so he is quite familiar with the timber business.
With the acquisition of 645,000 acres in the Pacific Northwest, Weyerhaeuser now becomes the largest timber REIT when measured by acreage. Weyerhaeuser now will own 6.8 million acres to Plum Creek's 6.4 million acres. The deal is supposed to close in July. The table below shows the new acreage owned by each of the timber REITs by region. In addition to being the largest timber REIT, Weyerhaeuser's lands are concentrated in the two primary timber-growing regions, the Pacific Northwest and the South.
# # #
Weyerhaeuser in deal for timberland
Company’s purchase would increase Pacific Northwest holdings by one-third
By Mateusz Perkowski, Daily Astorian, June 21, 2013
The Weyerhaeuser Co. expects to significantly increase its footprint in the Northwest by taking over a competing landowner with 645,000 acres in the region.
The company has struck a deal to buy Longview Timber in a deal worth $2.65 billion, increasing its land holdings in Oregon and Washington by one-third, to 2.6 million acres.
“This is a one-of-a-kind acquisition. It is highly unlikely that the opportunity to purchase high value and high quality timberland of this magnitude in the Pacific Northwest will appear again,” said Tom Gideon, the firm’s executive vice president of timberlands, during a conference call.
Apart from being a major purchase for Weyerhaeuser, the transaction has the potential to increase timberland values for other landowners and investors in the region, said Brooks Mendell, president of Forisk Consulting, which tracks timber finances.
“They’re making a big statement about their confidence in log values and timberland assets,” he said. “It makes people more confident in timberland values.”
While unlikely to affect log markets on a national scale, the consolidation could be a concern for sawmills in areas where Weyerhaeuser is the predominant landowner, Mendell said. Those companies would have fewer competing suppliers. “It’s a market-by-market issue,” he said.
At more than $4,000 per acre, the price paid by Weyerhaeuser would be considered “on the upper end of transactions in the region,” according to the Moody’s credit rating agency.
Company executives said the price was justified because nearly 70 percent of the inventory on the land is harvest-ready timber on a flatter, more favorable terrain with a well-maintained road system.
The location is also desirable, particularly in light of the growing strength of California’s housing market and the access to export markets in Asia, said Gideon.
“We will have more flexibility to meet this demand going forward,” he said.
Mendell said the price paid by Weyerhaeuser is justified depending on how much of the timber ready for logging is high in the value chain.
“If it didn’t have a lot of timber on it, it would be a lot” to pay per acre, he said.
Patricia Bedient, the firm’s chief financial officer, noted that Northwest holdings will represent about 40 percent of Weyerhaeuser’s total land assets after the transaction.
“This geography is the most valuable on a per-acre basis,” she said. Weyerhaeuser plans to raise about $2.45 billion to finance the transaction, half by taking on new debt and half by selling stock, Bedient said.
The company simultaneously announced that it would be evaluating the possible sale or spin-off of its real estate development division.
Weyerhaeuser may be evaluating that option partially for financial reasons, given the amount of debt it will be taking on, said Mendell.
“It’s hard to keep everything,” he said. “They’re pulling several levers.”
However, the company may also be recognizing that its main strengths are in forest management and research, so another company may be in a better position to maximize the value of the real estate division, he said.
“It’s sort of a return to their roots,” Mendell said.
# # #
Weyerhaeuser Buys Timberlands and Weighs Selling Its Home-Building Unit
By Michael J. De La Merced, New York Times, June 16, 2013
Weyerhaeuser said on Sunday that it planned to buy 645,000 acres of timberland for about $2.65 billion and added that it was weighing a sale or spinoff of its home-building unit.
Weyerhaeuser is buying the acreage through its acquisition of Longview Timber from Brookfield Asset Management, gaining lands in Washington and Oregon.
The deal will expand the company’s holdings in the Pacific Northwest by 33 percent, to 2.6 million acres, and increase its overall holdings in the United States to 6.6 million acres. Weyerhaeuser will pay for the deal by raising about $2.45 billion in debt and equity, including through loans from Morgan Stanley.
As part of the deal, Weyerhaeuser will raise its quarterly dividend to 22 cents a share, from 20 cents a share.
Weyerhaeuser also plans to explore a potential sale of its home-building division, the Weyerhaeuser Real Estate Company, or Wreco. The business, which includes Pardee Homes, is one of the country’s biggest home builders.
The company said that it is hoing to take advantage of the improving housing market. Last year, the real estate division reported nearly $1.1 billion in revenue, up 28 percent from the prior year.
The company said that it will consider selling or spinning off Wreco, though it may also decide to hold onto the unit.
“The board of directors and management team are committed to further enhancing value for all Weyerhaeuser shareholders,” Daniel S. Fulton, Weyerhaeuser’s chief executive, said in a statement. “This process will help ensure that WRECO achieves its full potential while we continue to build on Weyerhaeuser’s track record of shareholder value creation.”
It also announced the appointment of Doyle Simons, a board member and former chief executive of Temple-Inland, as its new chief executive. He will succeed Mr. Fulton, who is approaching the company’s mandatory retirement age of 65 and who will serve as executive vice chairman in August before retiring in October.
“As former C.E.O. and chairman of Temple-Inland, Doyle has a proven track record of driving performance to achieve results,” Chuck Williamson, Weyerhaeuser’s chairman, said. “He has deep experience in the forest products industry, broad business and functional expertise and a passion for operational excellence.”
# # #
What will Plum Creek do with its 65,000 acres in county?
By Anthony Clark, Gainesville [Florida] Sun, May 5, 2013
On one hand, the Plum Creek Timber Company has made it clear it is not in a hurry to develop portions of the 65,000 acres the company owns in Alachua County.
After all, being in the business of growing pine trees, it is nothing to wait 12 to 30 years for a return on investment.
Todd Powell, senior director of real estate for Plum Creek, has continuously referred to the master plan that the company is preparing as a long-term plan with a 50-year outlook.
Even the Envision Alachua process, which is being held to help prepare that long-term plan, has gone on for nearly two years with hundreds of people expressing their wishes for the land during task force meetings and community workshops.
However, Powell and others with a stake in the plans say they feel the pressure of those expectations and already are working together to try to lure industrial tenants to portions of the land along Hawthorne Road between Gainesville and Hawthorne.
They are targeting their efforts where they see the most opportunity to draw on the strengths of location and available local resources. Promising prospects include major agribusiness companies that could partner with researchers at the University of Florida Institute of Food and Agricultural Sciences and manufacturing companies that could benefit from the CSX rail line and U.S. 301 — the main truck route between Jacksonville and Tampa — on the land closest to Hawthorne.
Powell said the hope is to get a commitment from a tenant to tie into the land-use approval process that the company plans to bring to the county and state later this year.
“There's a lot of anticipation that's been built. There's a lot of people very interested,” said Tim Giuliani, president of the Gainesville Area Chamber of Commerce, who is helping with the economic development aspect of the plans.
For example, he said people in east Gainesville are eager to see job growth.
“Those people don't want to wait another day for job opportunities, so I feel the pressure every day that I'm sure now Plum Creek and everyone on that task force feels to deliver on a nice vision, a nice plan, but now everyone's ready for the rubber to hit the road.”
Seattle-based Plum Creek is the largest private landowner in Alachua County and one of the largest in the U.S. with 6.4 million acres. It is a real estate investment trust that makes the vast majority of its money selling timber but is interested in developing land where that would be a more valuable use than timber production.
The company started thinking about a long-term master plan for its land in Alachua County around 2005 when it was approached by the county. Powell said the county was interested in putting more land in conservation.
Of Plum Creek's roughly 65,000 acres here, 24,000 acres are already in conservation, with Plum Creek keeping timber rights while preventing the possibility of future development.
Through Envision Alachua, Plum Creek has engaged a broad cross-section of the community representing environmental interests, education, business, government and residents in nearby communities to talk about where it makes sense to add conservation land, where it makes sense to develop and what that development should look like.
Powell said Plum Creek has about six months of work to do before it is ready to submit plans.
When it does, Plum Creek will submit a sector plan, a method available for holdings of at least 15,000 acres. It would be just the fifth sector plan in Florida.
A sector plan includes a long-term master plan that shows where conservation, agricultural, urban and rural lands would be and the allowable uses within each, and detailed specific area plans for subsectors that would show the density and intensity of those uses, such as the number of buildings and the maximum square footage.
Unlike with other sector plans, Powell said Plum Creek plans to submit detailed plans at the same time it submits the master plan so people will have a better understanding of what the developments could look like.
Tim Jackson, a planning consultant working with Plum Creek on the project, said Plum Creek is looking at conserving about 60,000 of the roughly 65,000 acres it holds here.
Through the Envision Alachua process, Plum Creek identified five areas for potential development within the 17,000-acre Windsor tract in the eastern part of the county but will start with two areas along Hawthorne Road for the first detailed plans.
One is in the southwest corner of the tract to try to take advantage of its proximity to Gainesville and UF, while the other is closest to Hawthorne, the CSX rail line and U.S. 301.
For the southwest area, Powell said Plum Creek is looking at agribusiness as a possibility to take advantage of the research talent at IFAS. He said he learned through working with the Gainesville Area Chamber of Commerce on economic development that, while the biotech industry has competition in Central and South Florida, “Gainesville has this unbelievable ag talent that is nowhere else in the state.”
In a presentation to The Sun, Powell showed a concept drawing of a business research park with facilities next to fields.
IFAS' top administrator, Jack Payne, said he envisions partnerships between the institute's scientists and companies, such as Monsanto or Pioneer DuPont.
Payne said IFAS researchers already have created 98 percent of the blueberries grown in Florida and 60 percent of the strawberries — crops with a combined $409 million in revenue in Florida in 2010, according to the U.S. Department of Agriculture.
Powell said Plum Creek also envisions a major manufacturer moving to the Hawthorne area.
“If it's an ag manufacturer, you load it up on a train and ship it out to the port of Jacksonville,” he said.
Plum Creek has enlisted a heavy hitter to help with industrial recruitment. In January, the company announced a joint partnership with The Rockefeller Group, which has developed 5 million square feet of industrial space since 2008, including distribution centers near seaports.
The partnership specifically covers 2,600 acres approved for an industrial park in the Lake City area, plus an area near Dublin, Ga., but could help with the Alachua County developments as well.
“We think they can be a game-changer for that project up there, and I know they are also interested to see what's going on here in terms of potentially bringing some end users into this,” Powell said.
Residential areas might be part of future plans.
“The houses can come later. It's really about getting something ready from an economic development perspective,” Powell said.
When it is ready to submit plans, Plum Creek likely will have a sizable number of supporters unusual for local development projects as a result of bringing so many people into the process. That has included a number of east Gainesville residents interested in the economic development potential of the project, such as Vivian Filer, chairwoman of the proposed Cotton Club Museum & Cultural Center.
Filer said she has participated in a number of boards and meetings over the years where the people making plans did not seek input from the people who would be most affected, but that is not the case with Plum Creek.
“The people that have come to the table who felt that they had no voice, they have come during the sessions and had their voice … heard there, and they have taken hold of it, they have owned it, and they feel good about it because you have let them sit at the table,” she said.
# # #
Tacoma civic and business leader George Weyerhaeuser Jr. dies
Tacoma News Tribune, April 16, 2013
George Weyerhaeuser Jr., scion of the family that founded the Federal Way-based timber products company that bears his name and a Tacoma civic and business leader in his own right, has died.
Weyerhaeuser suffered a heart attack Sunday evening on his boat on Commencement Bay. He was 59.
Family members said they are planning a private service as well as a public memorial. Arrangements are still pending.
Weyerhaeuser was currently serving as president of the Thea Foss Waterway Development Authority, a board on which he had served for many years.
“We have lost a dedicated leader,” said Don Meyer, president of the Port of Tacoma commission. Meyer served with Weyerhaeuser for a decade when Meyer was executive director of the Foss Waterway Development Authority and Weyerhaeuser was an authority board member.
Meyer said Weyerhaeuser was a man who combined a passion for civic betterment with a keen business knowledge.
“I think we have all benefited from his understanding and commitment,” said Meyer.
He was a key board member and backer of the Museum of Glass.
Susan Warner, the museum’s executive director, said Weyerhaeuser was one of the founding members of the museum having worked on the museum’s board since 1999. He served as the museum board chairman from 2004 through 2008.
“His contributions to the museum were just immeasurable,” said Warner. “I’m the third director the museum has had. He was a coach, a cheerleader and mentor to all of us.”
“He always had a kind, supportive word and very good advice. He was always there for the museum,” she said.
Former Tacoma Mayor Bill Baarsma said Weyerhaeser was a civic force. ” Much of the success on the waterway and the Museum of Glass, for that matter, was the result of his singular efforts,” he wrote.
Jim Keller, a former Weyerhaeuser Co. senior executive and a close personnel friend of Weyerhaeuser, said his friend was a people person.
He wasn’t the person who called attention to himself, but rather he was one who always cared about the company’s employees and customers, said Keller.
Weyerhaeuser was a person deeply fascinated by science and the arts, he said.
“He was a great forward thinker,” said Keller. “And he was an incredible multi-tasker. He could discuss four different subjects and then meld them into a coherent conclusion,” he said.
Though Weyerhaeuser carried a powerful name, he didn’t abuse it, said Keller. “He never tried to be the center of attention. He never searched for the spotlight.”
While Weyerhaeuser worked his way upward to one of the timber company’s most senior positions, he was never overtly ambitious, said his friend.
“He was more interested in what was best for the company, not for George Weyerhaeuser. He wore his name well. It brought great responsibility, and he carried it out,” said Keller.
In a 30-year career at Weyerhaeuser Co., Weyerhaeuser served in several executive positions including vice president for containerboard, vice president of manufacturing for the company’s pulp and paper business. He was president and chief executive officer of Weyerhaeuser Canada from June 1993 to May 1998. He became the company’s senior vice president of technology, procurement and transportation in 1998.
Weyerhaeuser joined the timber products company in Dierks, Ark. in 1978 where he served in various capacities including forester and contract logger administrator before becoming sawmill supervisor in 1980.
He represented the company and the timber industry on many boards. He had served as chairman of the Pulp and Paper Research Institute of Canada and chairman of the the Canadian National Advisory Board on Forestry Research. During his time heading the company’s Canadian operations he was chairman of the Forest Alliance of British Columbia.
In 2006, Weyerhaeuser was appointed to the World Business Council for Sustainable Development as a senior fellow. The World Business Council for Sustainable Development is based in Geneva, Switzerland.
He served in that position for three years. He retired from Weyerhaeuser Co. in 2008.
The business and civic leader received his bachelor’s degree in philosophy and mathematics from Yale University in 1976 and a master of science degree from the Sloan School of Management at the Massachusetts Institute of Technology in 1986.
Weyerhaeuser’s great-great grandfather was Frederick Weyerhaeuser, one of the Weyerhaeuser Co.’s founders. His father, grandfather and great-grandfather all had once served as the company’s chief executive.
Weyerhaeuser is survived by his wife, Kathy McGoldrick, and by sons Walker and Corydon, and by his father, George Weyerhaeuser and his mother Wendy. Also is survived by four sisters and a brother. He lived in Lakewood.
The family is requesting that in lieu of flowers donations be sent to Tacoma’s Museum of Glass of which Weyerhaeuser was a founding board member, or to Charles Wright Academy from which he and his sons graduated.
# # #
Tahoe National Forest acquires large land tract outside Truckee
Tahoe Daily Tribune, March 25, 2013
The Tahoe National Forest recently acquired about 1,300 acres of land north of Interstate 80 near Donner Summit. The acquisition involves three non-contiguous parcels in proximity to White Rock Lake in the upper-elevation areas of Tahoe National Forest.
The $1.3 million purchase was consummated with an eye toward enhancing recreation opportunities in the Tahoe National Forest, said Joanne Roubique, Truckee district ranger.
The land was formerly owned by Sierra Pacific Industries — a timber company based in Anderson, near Redding, which has a Grass Valley office and is a major landowner in the Sierra foothills. The recently acquired lands include parcels near Castle Peak, White Lake and Lola Montez Lakes and were noted for their recreational and wildlife habitat values.
“We are quite excited about this purchase,” Robuique said. “The property will provide opportunities for more sustainable trails, increased access to beautiful lakes and consolidation of National Forest lands.”
The land purchase will make a popular mountain biking trail more accessible and add more hiking and equestrian trails, said Ann Westling, spokesperson for Tahoe National Forest.
“This is a very popular recreation area, and (the purchase) will only add to that component,” Westling said.
While there are some pine and fir trees on the three parcels, the upper elevation location means that many of the specimens are scraggly and unfit for timber production.
The purchase price was provided by Land and Water Conservation Fund, which is appropriated by U.S. Congress from oil companies in exchange for the right to drill for off-shore oil.
The purchase was finalized March 12, according to a news release last Thursday.
# # #
As part of its “green wall against sprawl,” King County agrees to pay Hancock Timber Resources Group $11.1 million for development rights on its White River Forest east of Enumclaw.
By Keith Ervin, Seattle Times, March 21, 2013
King County, continuing a decadelong drive to protect working forests from urban sprawl, has struck a deal to buy development rights on a 43,000-acre tree farm east of Enumclaw.
County Executive Dow Constantine announced the $11.1 million agreement with Hancock Timber Resources Group on Thursday, saying it would — if approved by the Metropolitan King County Council — expand the county’s “green wall against sprawl.”
One of the largest deals of its type, the transaction would allow the county to reach its goal of protecting 200,000 acres of forestland from development, Constantine said.
“We’ve made steady progress, but there was always one missing piece of the puzzle — the White River Forest in South King County,” he said.
He said the forest is the largest block of privately owned land in the county not already protected from development. It would continue to be operated as a working forest, with the public allowed to use the land for recreation.
Hancock’s board approved the deal Thursday. County Councilmembers Larry Phillips and Reagan Dunn, chairman and vice chairman respectively of the council’s Transportation, Economy and Environment Committee, declared their support Thursday.
Dunn said he would urge the council to approve it “as expeditiously as possible.”
The forest lies mostly north of Highway 410 and the White River, stretching from the Enumclaw city limits to east of Greenwater on the route to Crystal Mountain ski resort and Chinook Pass.
Without the county’s purchase of development rights, Hancock or a future landowner could have built 857 homes on 40- and 80-acre lots. The land is zoned for commercial forestry.
“There aren’t going to be subdivisions and shopping malls and sprawl to the Cascade crest,” Phillips said.
The County Council last fall set aside $3 million from the countywide parks levy and the conservation-futures levy toward a possible purchase of development rights on the White River Forest.
Constantine has asked the council to authorize the sale of bonds backed by conservation futures for the $8.1 million needed to close the purchase.
The county has acquired forestland in the form of either land ownership or, more often, purchase of development rights. Those rights can be sold to developers, who use them to increase the density of their projects in urban areas.
King County paid Hancock Timber $22 million in 2004 for development rights on its 89,000-acre Snoqualmie Forest, which stretches from the Snohomish County line almost to Snoqualmie and North Bend.
In a 2008 deal, the county acquired — at no cost to taxpayers — a conservation easement preventing future development of Plum Creek Timber’s 45,500-acre forest at the headwaters of the Green River. Plum Creek agreed to the deal in exchange for the ability to sell development rights.
Cynthia Welti, executive director of the Mountains to Sound Greenway Trust, said she was “stunned” to learn of the latest deal, calling it “enormous for the region.”
Purchasing development rights instead of buying land makes sense, Welti said. “The county cannot afford to buy this land, and shouldn’t,” she said. “It’s a perfect use of the transfer of development-rights program.”
Dan Christensen, CEO of Boston-based Hancock Timber, said in a statement the deal brings the company’s protection of “sensitive lands” around the globe to 470,000 acres — of which about 132,000 are in King County.
“We are pleased to move one step closer to our common goal of protecting the impressive White River property as a working forest in perpetuity,” he said.
# # #
Gov. Booth Gardner dies at 76
Seattle Times, March 16, 2013
Booth Gardner, Washington state’s 19th governor, has died from complications of Parkinson’s disease. He was 76.
Born in Tacoma, William Booth Gardner was 4 when his parents divorced. Young Booth spent his childhood shuttling back and forth between his parents, Evelyn Booth Gardner Clapp, a socialite, and Bryson “Brick” Gardner, a sales manager for a car dealership whom news stories described as a free spirit with an alcohol problem.
His father remarried, as did his mother. She married Norton Clapp, whose family members were substantial investors in Weyerhaeuser, and who eventually became president of Weyerhaeuser. He also became Gov. Gardner’s stepfather.
When his stepfather asked him to take over running the family’s corporate empire, he agreed, managing for seven years Laird Norton Co., which included building-supply, real estate and property-management operations. He also succeeded Clapp in serving on the boards of major corporations including Weyerhaeuser.
# # #
Weyerhaeuser Seeks CNA's Defense In 130 Asbestos Suits
Law360, March 11, 2013
# # #
[Plum Creek Timber to deliver fibre to Louisiana pellet mills for export to UK]
Morehouse Economic Development director Kay King said she has been working closely with Drax officials.
“The groundbreaking will take place around the first of June,” King said. “The two plants that are going up are the only two in the United States.”
Plum Creek will deliver up to 770,000 tons annually of sustainably-managed wood fiber to two U.S. pellet manufacturing locations during the course of the 10-year contract. Drax plans to construct two pellet mills. These plants will provide more jobs in the parish, consisting of turning wood fiber into pellets for export to its power station in the United Kingdom. Deliveries are scheduled to begin in 2014, according to The Plum Creek Timber Co. website.
Rick Holley, President and CEO of Plum Creek, stated on the website that he is proud to partner with Drax, “to work toward practical solutions that help develop sustainable energy, provide an attractive return for our investors, and create jobs in our communities.”
According to the website, Plum Creek is one of the largest landowners in the nation and the most geographically diverse, with approximately 6.4 million acres of timberlands in major timber producing regions of the United States and wood products manufacturing facilities in the Northwest.
Sen. Francis Thompson spoke about the future plant during a community leaders luncheon at the City Hall Tuesday.
excited,” Thompson said. “I'm excited for the City of Bastrop and
Morehouse Parish. This is proof that job opportunities are out there.
We just need to work together to get these business owners to come here
to Morehouse Parish.”
Plum Creek Timber and The Rockefeller Group to Pursue Development of 4,722 Acres in the Southeastern U.S.
Company news release, January 31, 2013
Plum Creek Timber Company, Inc. (NYSE: PCL), and The Rockefeller Group, the global real estate investment and development company, today announced a memorandum of understanding to evaluate and pursue joint venture development projects on 4,722 acres of land in the southeastern United States owned by Plum Creek.
The initial agreement covers two large tracts of land, including approximately 2,600 acres in Columbia County, Fla., near the municipality of Lake City, as well as approximately 2,122 acres in Laurens County, Ga., near the municipality of Dublin.
The companies have also agreed to review other land parcels owned by Plum Creek for consideration of future development opportunities. The tracts are intended for commercial development, including manufacturing and distribution facilities as well as inland ports and office buildings.
"As a large landowner, we recognize that a portion of our lands are well suited for commercial development," said Rick Holley, president and chief executive officer at Plum Creek. "During this important stage of economic recovery, the time is right to collaborate with The Rockefeller Group on this forward-looking venture. Given their experience and expertise, we are confident in their ability to pursue development of these select parcels and identify other potential opportunities."
"The Rockefeller Group is very pleased to join with Plum Creek to enhance the value of these parcels to the benefit of the joint venture, its investors and the local communities," said Kevin R. Hackett, president and chief executive officer of The Rockefeller Group.
"We are proud to have established this initiative with Plum Creek and hope that it represents the start of a successful and long-term relationship," said Leslie E. Smith Jr., executive vice president of national development for The Rockefeller Group.
Plum Creek is one of the largest landowners in the nation and the most geographically diverse, with approximately 6.4 million acres of timberlands in major timber producing regions of the United States and wood products manufacturing facilities in the Northwest. For more information, visit www.plumcreek.com.
The Rockefeller Group is a leading global real estate owner, developer and investment manager. For more than 80 years the company has played a major role in some of America's most significant and recognizable real estate endeavors, beginning with the development of Rockefeller Center in midtown Manhattan, which remains widely regarded as among the world's finest urban mixed-use complexes. Since 2008, the company has completed approximately 5 million square feet of industrial development in the United States.
Plum Creek Timber Company, Inc.
# # #
Timber! Pick Weyerhaeuser Up Off the Ground
By Aaron Levitt, InvestorPlace.com, January 29, 2013
Lumber prices, driven by the rebound in the U.S. housing market and expanding pulp sales, surged to new six-year highs back in 2012. Those same factors still are propelling the natural resource upward today, and analysts predict a new “super-cycle” for forest products is just beginning — making the boring forestry sector one of the best portfolio options for the longer-term.
Investors received conformation on just how strong the wind behind timber is late last week, when forestry giant Weyerhaeuser (NYSE:WY) reported earnings. The century-old producer of forest products (now a real estate investment trust) reported its highest revenue in more than four years.
Yet, the market didn’t even care. Correction: The market did care, it just didn’t care for what it saw, and actually sent Weyerhaeuser shares downward nearly 5% over the next two trading days.
While some might see WY’s drop as a bad sign, for longer-term investors, it’s a great chance to get in on the cheap.
Great Earnings, But …
On the surface, Weyerhaeuser reported great numbers. Fourth-quarter revenue rose nearly 25% to $2 billion — better than analyst estimates, and the company’s best reported revenue since Q3 2008. It also reported a profit of 26 cents per share — again, well ahead of the consensus.
So what gives?
Well, Wall Street might have been disappointed by how WY reached those numbers.
According to several Wall Street analysts, the bulk of Weyerhaeuser’s earnings beat was generated by lot and land sales in the real estate segment. More than $65 million worth of the firm’s Q4 earnings ($143 million) was due to so-called “non-strategic” land sales. Typically, the timber REITs will sell off acreage when the land doesn’t fit into their plans, or when transportation costs for carrying timber to sawmills is too high. The amount of these land sales can vary from quarter to quarter; for Weyerhaeuser, this quarter’s sales were unusually high.
Back out the non-strategic land sales, and many analysts postulate that WY’s numbers were just OK.
Looking Beyond the Land Sales
I think those numbers were better than just OK — and there’s still plenty to be bullish about when it comes to Weyerhaeuser’s latest numbers and future prospects.
First, the company expects that significantly higher current-quarter earnings in its wood products business. Weyerhaeuser’s largest operating segment sells lumber and structural panels to residential and light commercial markets — i.e. all the things needed to build houses. While that segment had disappointed analysts this quarter, net revenue still showed growth and was still $832 million. More importantly, with housing starts rising 12.1% last month and permits for future home construction hitting four-year-plus highs, there’s no reason to believe that sector won’t continue to grow revenue in the upcoming quarters.
That doesn’t even take into account rising international demand in places like China or Japan. Growing Chinese demand wasn’t part of the equation the last time the U.S. housing market was rising.
Secondly, as we’ve pointed out before, investing in timberland is a game of patience. Disappointing lumber sales means that Weyerhaeuser basically withheld harvesting logs. That means the trees are still growing and will yield more fruit down the road. Weyerhaeuser owns more than 6 million acres in the U.S. and manages another 14 million acres in Canada. On average, a forest grows by 7% each year; that’s a lot of extra profit coming down the pipeline.
Finally, the non-strategic sales shouldn’t be viewed as a negative. Timberland values continue to rise exponentially as more institutional and retail investors have realized the sector’s inflation-fighting and diversification potential. Why not sell something that doesn’t fit your long-term strategic goals while the iron is hot?
Buying the REIT
So while the quarter was just OK by Wall Street’s measures, it still represented a move in the right direction. More importantly, the longer-term looks bright for Weyerhaeuser … and given just how long-lived timberland assets are, that’s exactly the time horizon investors should be eyeballing.
Naturally, Wall Street is short-sighted. A deluge of analyst downgrades began pouring in as the stock headed lower. To me, that smells like opportunity.
With their purchase, investors are gaining access to one of the largest timberland owners in country — one whose cash flows (a measure of REIT health) continues to remain brisk. Announced in the earnings release was the notion that the firm plans on raising its dividend — which currently yields 2.2% — in the new year. The company spent about $92 million on dividend payments in quarter, but with a cash balance of almost $900 million, there’s plenty of room to raise it. Not to mention any increase in lumber sales will boost those cash flows even further.
Sounds “OK” to me.
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Creek Timber Buys Interest in... Gravel
Plum Creek Timber had a rather curious announcement to make this afternoon: As of today, the forest products company owns an interest in four quarries with about 144 million tons of crushed stone production among them. According to the company, it bought interests in the quarries, which are located near Greenville and Spartanburg, S.C., for a combined $75 million, from rock products specialist Vulcan Materials Company.
While it might seem unusual, for a company with "timber" right in its name to be buying an interest in rocks, Plum Creek Chief Executive Officer Rick Holley explained: “This is an attractive, cash-accretive investment in a familiar natural resource asset for Plum Creek.”
Plum Creek further clarified that it is not actually buying the quarries themselves, which will continue to be owned and operated by Vulcan. All Plum Creek is buying is the right to receive royalty payments from the production and sale of crushed stone mined from the quarries -- for the next 25 years.
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