ORM Timber Fund I, LP (Fund I), ORM Timber Fund II, Inc. (Fund II), and ORM Timber Fund III (REIT) Inc. (Fund III), collectively “the Funds”, were formed by Olympic Resource Management LLC (ORMLLC), a wholly owned subsidiary of Pope Resources, for the purpose of attracting capital to purchase timberlands. The objective of these Funds is to generate a return on investments through the acquisition, management, value enhancement and sale of timberland properties. Each Fund will operate for a term of ten years from the end of the respective investment period. Fund I has sold all its timberland holdings and will terminate in 2015, prior to its scheduled termination in August 2017. Fund II is scheduled to terminate in March 2021 and Fund III will terminate on the tenth anniversary of the completion of its investment period. Fund III’s investment period will end at the earlier of placement of all committed capital or July 31, 2016.

Pope Resources and ORMLLC together own 20% of Funds I and II and 5% of Fund III. The Funds are consolidated into the Partnership’s financial statements based in part on ORMLLC’s controlling role as the general partner or managing member of the Funds. The consolidated financial statements exclude management fees paid by the Funds to ORMLLC as they are eliminated in consolidation. See note 5 for a breakdown of operating results before and after such eliminations. The portion of these fees, among other items of income and expense, attributed to third-party investors is reflected as an adjustment to income in the Partnership’s Condensed Consolidated Statement of Comprehensive Income under the caption “Net (income) loss attributable to noncontrolling interests - ORM Timber Funds.”

The Partnership’s condensed consolidated balance sheet included assets and liabilities of the Funds as of June 30, 2015 and December 31, 2014, which were as follows:



(in thousands)	June 30, 2015		December 31, 2014
Assets:
Cash	$	6,591	$	9,523
Other current assets	696		1,108
Total current assets	7,287		10,631
Properties and equipment, net of accumulated depletion and depreciation (2015 - $30,676; 2014 - $26,738)	226,863		230,123
Other long-term assets	145		156
Total assets	$	234,295	$	240,910
Liabilities and equity:
Current liabilities	$	2,161	$	1,891
Long-term debt	57,380		57,380
Total liabilities	59,541		59,271
Funds' equity	174,754		181,639
Total liabilities and equity	$	234,295	$	240,910