Pope Resources LP announced its current intention to harvest 32 million board feet (MMBF) of timber in 2010, a level that is 47% below long-term sustainable level of 60 MMBF, of which 16 MMBF pertains to two timber funds. Nearly a year ago, the company announced a plan to harvest 37 MMBF in 2009. As 2009 progressed, the company decided to defer additional volume from original plan owing to protracted weakness in log markets, and are now estimating annual harvest for 2009 will be closer to 32 MMBF. The drop-off in housing starts has curtailed demand for solid wood products and, rather than absorb materially lower log prices, the company is opting instead to allow 47% of annual sustainable harvest to continue to grow. The Partnership's expectation is that when the company ultimately harvest this deferred volume, unitholders will benefit through both biological growth and improved price realization. This announcement for 2010 planned harvest activity essentially reflects assumption that market conditions, both from a pricing and log take-away standpoint, will be consistent with 2009. Thus, the company have planned to harvest a similar log volume in 2010 notwithstanding the increase in acres associated with the Fund II acquisitions. The company will monitor log markets closely throughout 2010 and may adjust harvest volume from the current plan as warranted by opportunities or challenges presented. The company also announced that it is reducing the quarterly distribution from 20 cents per unit to 10 cents effective for the fourth quarter of 2009. Accordingly, the company announced a quarterly distribution of 10 cents per unit, effective for unitholders of record on December 3, 2009 and payable on December 17, 2009.

Pope Resources LP reported earnings results for the third quarter and nine months ended September 30, 2009. The company reported net income attributable to unitholders of $920,000, or $0.20 per diluted ownership unit, on revenue of $6.6 million for the third quarter ended September 30, 2009. This compares to a net loss attributable to unitholders of $23,000, or $0.01 per diluted ownership unit, on revenue of $7.4 million for the comparable period in 2008. Operating income was $2.12 million compared to operating loss of $289,000 in the previous year period. Income before income taxes was $681,000 compared to loss before income taxes of $637,000 in the previous year period. Cash provided by operations for the quarter ended September 30, 2009 was $835,000, compared to $1.6 million for the third quarter of 2008. For the nine months ended September 30, 2009, net income attributable to unitholders totaled $104,000, or $0.02 per diluted ownership unit, on revenue of $15.3 million. Net income for the corresponding period in 2008 totaled $2.6 million, or $0.54 per diluted ownership unit, on revenue of $25.0 million. Operating income was $1.35 million compared to operating income of $2.03 million in the previous year period. Loss before income taxes was $601,000 compared to income before income taxes of $1.67 million in the previous year period. For the nine months ended September 30, 2009, cash used by operations was $240,000, compared to cash provided by operations of $5.7 million for year-to-date 2008 results.

On September 25, 2009, Pope Resources LP entered into a new $9.8 million term loan agreement with Northwest Farm Credit Services, PCA (NWFCS). The new loan carries a fixed rate of interest of 6.4% per annum paid monthly. Principal payments will not be due under this loan agreement until maturity in September 2019 when the entire outstanding principal balance of the loan will be due. Proceeds from this new term loan will be used to retire an $8.5 million term loan carrying a fixed interest rate of 9.65% to John Hancock Life Insurance Company (JHLIC) due in April 2011. In addition to retiring the note, a $1.1 million make whole premium due and payable to JHLIC because of early repayment was also funded from the proceeds of the new term loan.