REVENUE

ADOPTION OF ASC 606

For information on the adoption of ASC 606, including changes to significant accounting policies and required transition disclosures, see Note 1 — Basis of Presentation.

REVENUE RECOGNITION

The Company recognizes revenues when control of promised goods or services (“performance obligations”) is transferred to customers, in an amount that reflects the consideration expected to be entitled to in exchange for those goods or services (“transaction price”). The Company generally satisfies performance obligations within a year of entering into a contract and therefore has applied the disclosure exemption found under ASC 606-10-50-14. Unsatisfied performance obligations as of June 30, 2018 are primarily due to advances on stumpage contracts and unearned license revenue. These performance obligations are expected to be satisfied within the next twelve months. The Company generally collects payment within a year of satisfying performance obligations and therefore has elected not to adjust revenues for a financing component.

The following table presents our revenue from contracts with customers disaggregated by product type for the three and six months ended June 30, 2018 and 2017:



Three Months Ended	Southern Timber		Pacific Northwest Timber		New Zealand Timber		Real Estate		Trading		Elim.			Total
June 30, 2018
Pulpwood		$20,300		$4,625		$7,788	—			$3,804	—				$36,517
Sawtimber	15,776		26,654		61,219		—		42,162		—			145,811
Hardwood	1,214		—		—		—		—		—			1,214
Total Timber Sales	37,290		31,279		69,007		—		45,966		—			183,542
License Revenue, Primarily From Hunting	3,936		103		142		—		—		—			4,181
Other Non-Timber/Carbon Revenue	6,589		749		504		—		—		—			7,842
Agency Fee Income	—		—		—		—		167		—			167
Total Non-Timber Sales	10,525		852		646		—		167		—			12,190
Improved Development	—		—		—		1,345		—		—			1,345
Unimproved Development	—		—		—		—		—		—			—
Rural	—		—		—		4,827		—		—			4,827
Non-strategic / Timberlands	—		—		—		43,688		—		—			43,688
Large Dispositions	—		—		—		—		—		—			—
Total Real Estate Sales	—		—		—		49,860		—		—			49,860

Revenue from Contracts with Customers	47,815		32,131		69,653		49,860		46,133		—			245,592
Other Non-Timber Sales, Primarily Lease	232		82		—		—		—		—			314
Intersegment	—		—		—		—		29		(29		)	—
Total Revenue		$48,047		$32,213		$69,653		$49,860		$46,162		($29	)		$245,906

June 30, 2017
Pulpwood		$15,170		$2,803		$6,450	—			$3,711	—				$28,134
Sawtimber	14,580		16,648		46,403		—		37,996		—			115,627
Hardwood	1,027		—		—		—		—		—			1,027
Total Timber Sales	30,777		19,451		52,853		—		41,707		—			144,788
License Revenue, Primarily from Hunting	3,808		93		72		—		—		—			3,973
Other Non-Timber Revenue	753		858		86		—		—		—			1,697
Agency Fee Income	—		—		—		—		330		—			330
Total Non-Timber Sales	4,561		951		158		—		330		—			6,000
Improved Development	—		—		—		143		—		—			143
Unimproved Development	—		—		—		2,500		—		—			2,500
Rural	—		—		—		5,493		—		—			5,493
Non-strategic / Timberlands	—		—		24,311		17,484		—		—			41,795
Large Dispositions	—		—		—		—		—		—			—
Total Real Estate Sales	—		—		24,311		25,620		—		—			49,931

Revenue from Contracts with Customers	35,338		20,402		77,322		25,620		42,037		—			200,719
Other Non-Timber Sales, Primarily Lease	190		55		—		—		—		—			245
Total Revenue		$35,528		$20,457		$77,322		$25,620		$42,037	—				$200,964



Six Months Ended	Southern Timber		Pacific Northwest Timber		New Zealand Timber		Real Estate		Trading		Elim.			Total
June 30, 2018
Pulpwood		$41,904		$8,044		$13,632	—			$8,062	—				$71,642
Sawtimber	31,713		53,721		105,964		—		76,987		—			268,385
Hardwood	1,811		—		—		—		—		—			1,811
Total Timber Sales	75,428		61,765		119,596		—		85,049		—			341,838
License Revenue, Primarily From Hunting	8,024		128		194		—		—		—			8,346
Other Non-Timber/Carbon Revenue	7,781		1,554		2,827		—		—		—			12,162
Agency Fee Income	—		—		—		—		289		—			289
Total Non-Timber Sales	15,805		1,682		3,021		—		289		—			20,797
Improved Development	—		—		—		2,465		—		—			2,465
Unimproved Development	—		—		—		7,446		—		—			7,446
Rural	—		—		—		6,480		—		—			6,480
Non-strategic / Timberlands	—		—		—		69,533		—		—			69,533
Large Dispositions	—		—		—		—		—		—			—
Total Real Estate Sales	—		—		—		85,924		—		—			85,924

Revenue from Contracts with Customers	91,233		63,447		122,617		85,924		85,338		—			448,559
Other Non-Timber Sales, Primarily Lease	402		140		—		—		—		—			542
Intersegment	—		—		—		—		35		(35		)	—
Total Revenue		$91,635		$63,587		$122,617		$85,924		$85,373		($35	)		$449,101

June 30, 2017
Pulpwood		$34,146		$6,162		$11,611	—			$6,547	—				$58,466
Sawtimber	27,603		38,081		81,982		—		69,137		—			216,803
Hardwood	1,743		—		—		—		—		—			1,743
Total Timber Sales	63,492		44,243		93,593		—		75,684		—			277,012
License Revenue, Primarily from Hunting	7,638		190		119		—		—		—			7,947
Other Non-Timber Revenue	3,142		1,804		173		—		—		—			5,119
Agency Fee Income	—		—		—		—		618		—			618
Total Non-Timber Sales	10,780		1,994		292		—		618		—			13,684
Improved Development	—		—		—		143		—		—			143
Unimproved Development	—		—		—		2,500		—		—			2,500
Rural	—		—		—		12,232		—		—			12,232
Non-strategic / Timberlands	—		—		24,311		23,083		—		—			47,394
Large Dispositions	—		—		—		41,951		—		—			41,951
Total Real Estate Sales	—		—		24,311		79,909		—		—			104,220

Revenue from Contracts with Customers	74,272		46,237		118,196		79,909		76,302		—			394,916
Other Non-Timber Sales, Primarily Lease	394		145		—		—		—		—			539
Total Revenue		$74,666		$46,382		$118,196		$79,909		$76,302	—				$395,455

REVENUE RECOGNITION FOR TIMBER SALES AND NON-TIMBER INCOME

Revenue from the sale of timber is recognized when control passes to the buyer. The Company utilizes two primary methods or sales channels for the sale of timber, a stumpage or standing timber model and a delivered log model. The sales method the Company employs depends upon local market conditions and which method management believes will provide the best overall margins. Under the stumpage model, standing timber is sold primarily under pay-as-cut contracts, with specified duration (typically one year or less) and fixed prices, whereby revenue is recognized as timber is severed and the sales volume is determined. The Company also sells stumpage under lump-sum contracts for specified parcels where the Company receives cash for the full agreed value of the timber prior to harvest and control passes to the buyer upon signing the contract. The Company retains interest in the land, slash products, and the use of the land for recreational and other purposes. Any uncut timber remaining at the end of the contract period reverts to the Company. Revenue is recognized for lump-sum timber sales when payment is received, the contract is signed and control passes to the buyer. A third type of stumpage sale the Company utilizes is an agreed-volume sale, whereby revenue is recognized using the output method, as periodic physical observations are made of the percentage of acreage harvested.

Under the delivered log model, the Company hires third-party loggers and haulers to harvest timber and deliver it to a buyer. Sales of domestic logs generally do not require an initial payment and are made to third-party customers on open credit terms. Sales of export logs generally require a letter of credit from an approved bank. Revenue is recognized when the logs are delivered and control has passed to the buyer. For domestic log sales, control is considered passed to the buyer as the logs are delivered to the customer’s facility. For export log sales (primarily in New Zealand), control is considered passed to the buyer upon delivery onto the export vessel.

Non-timber income is primarily comprised of hunting and recreational licenses. Such income and any related cost are recognized ratably over the term of the agreement and included in “Sales” and “Cost of sales”, respectively. Payment is generally due upon contract execution.

The following table summarizes revenue recognition and general payment terms for timber sales:



Contract Type	Performance Obligation	Timing of Revenue Recognition	General Payment Terms
Stumpage Pay-as-Cut	Right to harvest a unit (i.e. ton, MBF, JAS m3) of standing timber	As timber is severed (point-in-time)	Initial payment between 5% and 20% of estimated contract value; collection generally within 10 days of severance
Stumpage Lump Sum	Right to harvest an agreed upon volume of standing timber	Contract execution (point-in-time)	Full payment due upon contract execution
Stumpage Agreed Volume	Right to harvest an agreed upon acreage of standing timber	As timber is severed (over-time)	Payments made throughout contract term at the earlier of a specified harvest percentage or time elapsed
Delivered Wood (Domestic)	Delivery of a unit (i.e. ton, MBF, JAS m3) of timber to customer’s facility	Upon delivery to customer’s facility (point-in-time)	No initial payment and on open credit terms; collection generally within 30 days of invoice
Delivered Wood (Export)	Delivery of a unit (i.e. ton, MBF, JAS m3) onto export vessel	Upon delivery onto export vessel (point-in-time)	Letter of credit from an approved bank; collection generally within 30 days of delivery

The following table presents our timber sales disaggregated by contract type for the three and six months ended June 30, 2018 and 2017:



Three Months Ended	Southern Timber		Pacific Northwest Timber		New Zealand Timber		Trading		Total
June 30, 2018
Stumpage Pay-as-Cut		$19,855	—		—		—			$19,855
Stumpage Lump Sum	256		4,605		—		—		4,861
Stumpage Agreed Volume	—		—		—		—		—
Total Stumpage	20,111		4,605		—		—		24,716

Delivered Wood (Domestic)	15,166		26,674		25,647		1,567		69,054
Delivered Wood (Export)	2,013		—		43,360		44,399		89,772
Total Delivered	17,179		26,674		69,007		45,966		158,826

Total Timber Sales		$37,290		$31,279		$69,007		$45,966		$183,542

June 30, 2017
Stumpage Pay-as-Cut		$18,249	—		—		—			$18,249
Stumpage Lump Sum	2,247		—		—		—		2,247
Stumpage Agreed Volume	—		54		—		—		54
Total Stumpage	20,496		54		—		—		20,550

Delivered Wood (Domestic)	10,281		19,397		20,598		1,317		51,593
Delivered Wood (Export)	—		—		32,255		40,390		72,645
Total Delivered	10,281		19,397		52,853		41,707		124,238

Total Timber Sales		$30,777		$19,451		$52,853		$41,707		$144,788



Six Months Ended	Southern Timber		Pacific Northwest Timber		New Zealand Timber		Trading		Total
June 30, 2018
Stumpage Pay-as-Cut		$42,364	—		—		—			$42,364
Stumpage Lump Sum	2,074		9,711		—		—		11,785
Stumpage Agreed Volume	—		—		—		—		—
Total Stumpage	44,438		9,711		—		—		54,149

Delivered Wood (Domestic)	28,543		52,054		45,750		2,504		128,851
Delivered Wood (Export)	2,447		—		73,846		82,545		158,838
Total Delivered	30,990		52,054		119,596		85,049		287,689

Total Timber Sales		$75,428		$61,765		$119,596		$85,049		$341,838

June 30, 2017
Stumpage Pay-as-Cut		$38,352	—		—		—			$38,352
Stumpage Lump Sum	5,043		2,580		—		—		7,623
Stumpage Agreed Volume	—		1,234		—		—		1,234
Total Stumpage	43,395		3,814		—		—		47,209

Delivered Wood (Domestic)	20,097		40,429		39,443		2,324		102,293
Delivered Wood (Export)	—		—		54,150		73,360		127,510
Total Delivered	20,097		40,429		93,593		75,684		229,803

Total Timber Sales		$63,492		$44,243		$93,593		$75,684		$277,012

REVENUE RECOGNITION FOR REAL ESTATE SALES

The Company recognizes revenue on sales of real estate generally at the point in time when cash has been received, the sale has closed, and control has passed to the buyer. A deposit of 5% is generally required at the time a purchase and sale agreement is executed, with the balance due at closing. On sales of real estate containing future performance obligations, revenue is recognized using the input method based on costs incurred to date relative to the total costs expected to fulfill the performance obligations in the contract with the customer.

REVENUE RECOGNITION FOR LOG TRADING

Log trading revenue is generally recognized when procured logs are delivered to the buyer and control has passed. For domestic log trading, control is considered passed to the buyer as the logs are delivered to the customer’s facility. For export log trading, control is considered passed to the buyer upon delivery onto the export vessel. The Trading segment also includes sales from log agency contracts, whereby the Company acts as an agent managing export services on behalf of third parties. Revenue for log agency fees are recognized net of related costs.

Contract Balances

The timing of revenue recognition, invoicing and cash collections results in accounts receivable and deferred revenue (contract liabilities) on the Consolidated Balance Sheets. Accounts receivable are recorded when the Company has an unconditional right to consideration for completed performance under the contract. Contract liabilities relate to payments received in advance of performance under the contract. Contract liabilities are recognized as revenue as (or when) the Company performs under the contract.

The following tables summarizes revenue recognized during the three and six months ended June 30, 2018 and 2017 that was included in the contract liability balance at the beginning of each year:



	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Revenue recognized from contract liability balance at the beginning of the year (a)		$5,429		$3,809		$11,800		$8,592


(a)	Revenue recognized was primarily from hunting licenses and the use of advances on pay-as-cut timber sales.