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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 June 30, 2020
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   o
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   o
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 July 31, 2020: 48,765,497 shares



Table of Contents
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.
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
GPGeorgia-Pacific WFS LLC
HBUHigher and Better Use
HLBVHypothetical Liquidation at Book Value
IPInternational Paper Company
LIBORLondon Interbank Offered Rate
LTCLong-Term Contract
LTIPLong-Term Incentive Plan
LTVLoan-to-Value
MBFThousand Board Feet
MPERSMissouri Department of Transportation & Patrol Retirement System
NYSENew York Stock Exchange
RabobankCooperatieve Centrale Raiffeisen-Boerenleenbank, B.A.
REITReal Estate Investment Trust
SECSecurities and Exchange Commission
SRPShare Repurchase Program
TRSTaxable REIT Subsidiary
TSRTotal Shareholder Return
U.S.United States
VIEVariable Interest Entity
WestRockWestRock Company


1

Table of Contents
FORM 10-Q

CATCHMARK TIMBER TRUST, INC.

TABLE OF CONTENTS
 
Page No.
PART I. FINANCIAL INFORMATION
Item 1.
Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019
Consolidated Statements of Operations for the Three Months and Six Months Ended June 30, 2020 and 2019
Consolidated Statements of Comprehensive Loss for the Three Months and Six Months Ended June 30, 2020 and 2019
Consolidated Statements of Equity for the Three Months and Six Months Ended June 30, 2020 and 2019
Item 2.
Item 3.
Item 4.
PART II. OTHER INFORMATION
Item 1.
Item 1A.
Item 2.
Item 6.

2

Table of Contents
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 not guarantees of performance and are based on certain assumptions, discuss future expectations, describe plans and strategies, contain projections of results of operations or of financial condition or state other forward-looking information. Forward-looking statements in this report, include, but are not limited to, that we manage our operations to generate highly-predictable and stable cash flow from sustainable harvests, opportunistic land sales and asset management fees that comfortably cover our dividend throughout the business cycle; that we are bolstered by our delivered wood model and fiber supply agreements, which provide a steady source of demand from reliable counterparties; that we expect an improved harvest mix and biological growth of our forests; our intent to create additional value through joint ventures; the impact of the novel coronavirus (COVID-19) on our business and the businesses of our unconsolidated joint ventures; property performance and anticipated 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; change 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 in this report also relate to the Triple T Joint Venture (as defined herein), including the expected benefits of the amended wood supply agreement between the Triple T Joint Venture and GP, including market-based pricing on timber sales, increased reimbursement for extended haul distances, the ability for the Triple T Joint Venture to sell timber to other third parties, the increased ability to sell large timberland parcels to third-party buyers, and an extended term with optimized harvest volume obligations to enhance and preserve long-term asset value.

Forward-looking statements are based on 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 related to us and the Triple T Joint Venture include those discussed in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2019 and our subsequent reports filed with the SEC. Accordingly, readers are cautioned not to place undue reliance 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

Table of Contents

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 loss, 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, 2019. Our results of operations for the three months and six months ended June 30, 2020 are not necessarily indicative of the operating results expected for the full year.

4

Table of Contents
CATCHMARK TIMBER TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands, except for per-share amounts)
June 30, 2020December 31, 2019
Assets:
Cash and cash equivalents$9,350  $11,487  
Accounts receivable6,525  7,998  
Prepaid expenses and other assets6,024  5,459  
Operating lease right-of-use asset (Note 7)
2,976  3,120  
Deferred financing costs
210  246  
Timber assets (Note 3):
Timber and timberlands, net599,046  633,581  
Intangible lease assets
7  9  
Investments in unconsolidated joint ventures (Note 4)4,132  1,965  
Total assets$628,270  $663,865  
Liabilities:
Accounts payable and accrued expenses$6,715  $3,580  
Operating lease liability (Note 7)3,118  3,242  
Other liabilities39,666  10,853  
Notes payable and lines of credit, net of deferred financing costs (Note 5)436,967  452,987  
Total liabilities486,466  470,662  
Commitments and Contingencies (Note 7)    
Stockholders’ Equity:
Class A Common stock, $0.01 par value; 900,000 shares authorized; 48,771 and 49,008 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively
488  490  
Additional paid-in capital727,409  729,274  
Accumulated deficit and distributions(552,367) (528,847) 
Accumulated other comprehensive loss(35,003) (8,276) 
Total stockholders’ equity140,527  192,641  
Noncontrolling Interests1,277  562  
Total equity141,804  193,203  
Total liabilities and equity$628,270  $663,865  
See accompanying notes.
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CATCHMARK TIMBER TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except for per-share amounts)

 Three Months Ended June 30,Six Months Ended June 30,
 2020201920202019
Revenues:
Timber sales$16,173  $16,273  $34,339  $32,824  
Timberland sales1,673  8,224  6,452  10,314  
Asset management fees2,857  2,841  5,832  5,683  
Other revenues1,054  1,322  2,106  2,412  
21,757  28,660  48,729  51,233  
Expenses:
Contract logging and hauling costs6,978  7,153  14,255  14,509  
Depletion6,707  6,030  13,648  11,298  
Cost of timberland sales1,463  6,921  4,885  8,481  
Forestry management expenses1,671  1,592  3,505  3,326  
General and administrative expenses3,024  3,203  10,291  6,566  
Land rent expense96  133  220  275  
Other operating expenses1,585  1,629  3,221  3,273  
21,524  26,661  50,025  47,728  
Other income (expense):
Interest income4  32  50  62  
Interest expense(4,070) (4,709) (8,027) (9,331) 
Gain (loss) on large dispositions(5) 764  1,274  764  
(4,071) (3,913) (6,703) (8,505) 
Loss before unconsolidated joint ventures(3,838) (1,914) (7,999) (5,000) 
Loss from unconsolidated joint ventures (Note 4)(2,345) (28,651) (2,433) (55,960) 
Net loss$(6,183) $(30,565) $(10,432) $(60,960) 
Weighted-average common shares outstanding - basic and diluted48,744  49,076  48,866  49,069  
Net loss per share - basic and diluted$(0.13) $(0.62) $(0.21) $(1.24) 

See accompanying notes.
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CATCHMARK TIMBER TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED)
(in thousands)

 Three Months Ended June 30,Six Months Ended June 30,
 2020201920202019
Net loss$(6,183) $(30,565) $(10,432) $(60,960) 
Other comprehensive loss:
     Market value adjustment to interest rate swaps(2,249) (6,980) (26,727) (10,921) 
Comprehensive loss$(8,432) $(37,545) $(37,159) $(71,881) 


See accompanying notes.

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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 InterestsTotal Equity
SharesAmount
Balance, December 31, 201949,008  $490  $729,274  $(528,847) $(8,276) $192,641  $562  $193,203  
Common stock issued pursuant to:
LTIP, net of forfeitures and amounts withheld for income taxes 91  1  215  —  —  216  691  907  
Dividends/distributions ($0.135 per share/unit)
—  —  —  (6,564) —  (6,564) (84) (6,648) 
Repurchase of common stock(352) (4) (2,550) (2,554) —  (2,554) 
Net loss—  —  —  (4,249) —  (4,249) —  (4,249) 
Other comprehensive loss—  —  —  —  (24,478) (24,478) —  (24,478) 
Balance, March 31, 202048,747  $487  $726,939  $(539,660) $(32,754) $155,012  $1,169  $156,181  
Common stock issued pursuant to:
LTIP, net of forfeitures and amounts withheld for income taxes 33  1  537  —  —  538  125  663  
Dividends/distributions ($0.135 per share/unit)
—  —  —  (6,524) —  (6,524) (17) (6,541) 
Repurchase of common stock(9) —  (67) —  —  (67) —  (67) 
Net loss—  —  —  (6,183) (6,183) —  (6,183) 
Other comprehensive loss—  —  —  —  (2,249) (2,249) —  (2,249) 
Balance, June 30, 202048,771  $488  $727,409  $(552,367) $(35,003) $140,527  $1,277  $141,804  



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CATCHMARK TIMBER TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED) (CONTINUED)
(in thousands, except for per-share amounts)
Common StockAdditional Paid-In CapitalAccumulated Deficit and DistributionsAccumulated Other Comprehensive Income (Loss)Total Stockholders’ EquityNoncontrolling InterestsTotal Equity
SharesAmount
Balance, December 31, 201849,127  $492  $730,416  $(409,260) $8  $321,656  $  $321,656  
Common stock issued pursuant to:
LTIP, net of forfeitures and amounts withheld for income taxes92  1  292  —  —  293  —  293  
Dividends to common stockholders ($0.135 per share)
—  —  —  (6,578) —  (6,578) —  (6,578) 
Repurchase of common stock(136) (1) (1,003) (1,004) —  (1,004) 
Net loss—  —  —  (30,395) —  (30,395) —  (30,395) 
Other comprehensive loss—  —  —  —  (3,941) (3,941) —  (3,941) 
Balance, March 31, 201949,083  $492  $729,705  $(446,233) $(3,933) $280,031  $  $280,031  
Common stock issued pursuant to:
LTIP, net of forfeitures and amounts withheld for income taxes17  —  490  —  —  490  —  490  
Dividends to common stockholders ($0.135 per share)
—  —  —  (6,578) —  (6,578) —  (6,578) 
Repurchase of common stock(135) (2) (1,403) —  —  (1,405) —  (1,405) 
Net loss—  —  —  (30,565) —  (30,565) —  (30,565) 
Other comprehensive loss—  —  —  —  (6,980) (6,980) —  (6,980) 
Balance, June 30, 201948,965  $490  $728,792  $(483,376) $(10,913) $234,993  $  $234,993  

See accompanying notes.
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CATCHMARK TIMBER TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)
 
Six Months Ended June 30,
 20202019
Cash Flows from Operating Activities:
Net loss$(10,432) $(60,960) 
Adjustments to reconcile net loss to net cash provided by operating activities:
Depletion13,648  11,298  
Basis of timberland sold, lease terminations and other 4,997  8,475  
Stock-based compensation expense2,577  1,149  
Noncash interest expense1,771  564  
Other amortization103  123  
Gain on large dispositions(1,274) (764) 
Loss from unconsolidated joint ventures2,433  55,960  
Operating distributions from unconsolidated joint ventures  128  
Interest paid under swaps with other-than-insignificant financing element1,492    
Changes in assets and liabilities:
Accounts receivable473  35  
Prepaid expenses and other assets409  641  
Accounts payable and accrued expenses2,656  91  
Other liabilities1,177  465  
Net cash provided by operating activities20,030  17,205  
Cash Flows from Investing Activities:
Capital expenditures (excluding timberland acquisitions)(3,766) (2,197) 
Investment in unconsolidated joint ventures(5,000)   
Distributions from unconsolidated joint ventures400  847  
Net proceeds from large dispositions20,863  5,311  
Net cash provided by investing activities12,497  3,961  
Cash Flows from Financing Activities:
Repayment of notes payable(20,850)   
Proceeds from notes payable5,000    
Financing costs paid(1,004) (33) 
Interest paid under swaps with other-than-insignificant financing element(1,492)   
Dividends/distributions paid(13,189) (13,156) 
Repurchase of common shares(2,130) (2,409) 
Repurchase of common shares for minimum tax withholding(999) (365) 
Net cash used in financing activities(34,664) (15,963) 
Net change in cash and cash equivalents(2,137) 5,203  
Cash and cash equivalents, beginning of period11,487  5,614  
Cash and cash equivalents, end of period$9,350  $10,817  

See accompanying notes.
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CATCHMARK TIMBER TRUST, INC. AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020 (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 99.82% of its common partnership units. CatchMark LP Holder, LLC (“CatchMark LP Holder”), a Delaware limited liability company and wholly-owned subsidiary of CatchMark Timber Trust, is a limited partner of CatchMark Timber OP and owns 0.01% of its common partnership units. The remaining 0.17% of CatchMark Timber OP’s common partnership units are owned by current and former officers and directors of CatchMark Timber Trust as a result of CatchMark’s LTIP Unit compensation program (see Note 8 — Stock-based Compensation). In addition, CatchMark Timber Trust conducts certain 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.

Risks and Uncertainties

CatchMark is subject to risks and uncertainties as a result of the COVID-19 pandemic. The extent of the impact of the COVID-19 pandemic on CatchMark’s business and that of its customers and contractors is uncertain and difficult to predict. The rapid spread of the outbreak has caused significant disruptions in the U.S. and global economies and capital markets, and the impact is expected to continue to be significant during the remainder of 2020. Such economic disruption could have a material adverse effect on CatchMark’s business due to declines in sawtimber harvest volumes resulting from a deterioration in the housing market; a decline in production level at CatchMark’s customers' mills due to instances of COVID-19 among their employees or decreased demand for their products; the inability to complete timberland sales due to the inability of potential buyers to complete title searches and other customary due diligence, including as a result of state and local government office closures; effects on key employees, including operational management personnel and those charged with preparing, monitoring and evaluating CatchMark’s financial reporting and internal controls; and market volatility and market downturns negatively impacting the trading of CatchMark’s common stock.

The severity of the impact of the COVID-19 pandemic on CatchMark’s business will depend on a number of factors, including, but not limited to, the duration and severity of the pandemic and the extent and severity of the impact on CatchMark’s customers, all of which are uncertain and cannot be predicted. CatchMark’s future results of operations and liquidity could be adversely impacted by uncertain customer demand and the impact of any initiatives or programs that CatchMark may undertake to address financial and operational challenges faced by its customers. As of the date of issuance of these condensed consolidated financial statements, the extent to which the COVID-19 pandemic may materially impact CatchMark’s financial condition, liquidity, or results of operations is uncertain. See Note 5 — Notes Payable and Lines of Credit for additional information on CatchMark’s outstanding indebtedness and debt covenants.

2. Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

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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 footnotes included in CatchMark’s Annual Report on Form 10-K for the year ended December 31, 2019.

Investments in Joint Ventures

For joint ventures that it does not control but exercises significant influence, CatchMark uses the equity method of accounting. CatchMark's judgment about its level of influence or control of an entity involves consideration of various factors including the form of its ownership interest; its representation in the entity's governance; its ability to participate in policy-making decisions; and the rights of other investors to participate in the decision-making process, to replace CatchMark as manager, and/or to liquidate the venture. Under the equity method, the investment in a joint venture is recorded at cost and adjusted for equity in earnings and cash contributions and distributions. Income or loss and cash distributions from an unconsolidated joint venture are allocated according to the provisions of the respective joint venture agreement, which may be different from its stated ownership percentages. Any difference between the carrying amount of these investments on CatchMark’s balance sheets and the underlying equity in net assets on the joint venture’s balance sheets is adjusted as the related underlying assets are depreciated, amortized, or sold. Distributions received from unconsolidated joint ventures are classified in the accompanying consolidated statements of cash flows using the cumulative earnings approach under which distributions received in an amount equal to cumulative equity in earnings are classified as cash inflows from operating activities and distributions received in excess of cumulative equity in earnings represent returns of investment and therefore are classified as cash inflows from investing activities.

CatchMark evaluates the recoverability of its investments in unconsolidated joint ventures in accordance with accounting standards for equity investments by first reviewing each investment for any indicators of impairment. If indicators are present, CatchMark estimates the fair value of the investment. If the carrying value of the investment is greater than the estimated fair value, management assesses whether the impairment is “temporary” or “other-than-temporary.” In making this assessment, management considers the following: (1) the length of time and the extent to which fair value has been less than cost, (2) the financial condition and near-term prospects of the entity, and (3) CatchMark’s intent and ability to retain its interest long enough for a recovery in market value. If management concludes that the impairment is "other than temporary," CatchMark reduces the investment to its estimated fair value.

For information on CatchMark’s unconsolidated joint ventures, which are accounted for using the equity method of accounting, see Note 4 Unconsolidated Joint Ventures.

Impairment Testing

ASC 360-10 requires impairment testing to be completed whenever events or changes in circumstances indicate the asset's carrying value may not be recoverable. Examples of such circumstances for CatchMark include, but are not limited to, a significant decrease in market price of the timber assets, a significant adverse change in the extent or manner in which timber assets are being used, or a significant adverse change in legal factors or in the business climate that could affect the value of the timber assets. CatchMark monitors such events and changes in circumstances, and when indicators of potential impairment are present, evaluates if the carrying amounts of its timber
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assets exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposal of its timber assets (the "Recoverable Amount") and if the carrying amount exceeds the timber assets' fair value. The Recoverable Amount and fair value are estimated based on the following information in order of preference, dependent upon availability: (i) recently quoted market prices, (ii) market prices for comparable assets, or (iii) the present value of undiscounted cash flows, including estimated salvage value, using data from one harvest cycle. CatchMark has determined that there has been no impairment to its timber assets as of June 30, 2020.

Segment Information

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 its operating segments into three reportable segments: Harvest, Real Estate and Investment Management. See Note 9 — Segment Information for additional information.

Recent Accounting Pronouncements

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement, which added new disclosure requirements and eliminated or modified existing disclosure requirements on fair value measurement to improve the effectiveness of ASC 820. ASU 2018-13 is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The adoption of ASU 2018-13 did not have a material effect on CatchMark's consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which removed certain exceptions for intra-period tax allocation, recognition of deferred tax liabilities, and calculation of income taxes in interim periods. This ASU also added guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. ASU 2019-12 is effective for public entities for fiscal years beginning after December 15, 2020, and interim periods therein. CatchMark is currently assessing the impact ASU 2019-12 will have on its consolidated financial statements.

In March 2020, the FASB issued ASU 2020-03, Codification Improvements to Financial Instruments, which provides clarifications on seven topics related to financial instruments in the ASC. The update became effective for CatchMark upon issuance and the adoption did not have a material impact on its consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides companies with optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform if certain criteria are met. CatchMark has elected the optional expedients offered in this update. The amendments did not apply to any transaction in the current quarter and will be applied prospectively to all eligible contracts and hedging relationships.

3.  Timber Assets

As of June 30, 2020 and December 31, 2019, timber and timberlands consisted of the following, respectively:

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As of June 30, 2020
(in thousands)GrossAccumulated
Depletion or
Amortization
Net
Timber$280,490  $13,648  $266,842  
Timberlands331,850    331,850  
Mainline roads1,141  787  354  
Timber and timberlands$613,481  $14,435  $599,046  

As of December 31, 2019
(in thousands)GrossAccumulated
Depletion or
Amortization
Net
Timber$312,452  $28,064  $284,388  
Timberlands348,825    348,825  
Mainline roads1,106  738  368  
Timber and timberlands$662,383  $28,802  $633,581  

Timberland Sales

During the three months ended June 30, 2020 and 2019, CatchMark sold 1,100 and 4,000 acres of timberland for $1.7 million and $8.2 million, respectively. CatchMark's cost basis in the timberland sold was $1.4 million and $6.5 million, respectively.

During the six months ended June 30, 2020 and 2019, CatchMark sold 4,100 and 4,900 acres of timberland for $6.5 million and $