102 



Congressman John Doolittle 

 October 26, 1993 

 Page 2 



Q - What factors and methods did The Pacific Lumber Company use to determine that 

 higher harvest levels were prudent? 



A -- As stated above, the independent consultant's report showed that The Pacific 

 Lumber Company could selectively increase its harvesting without adverse impact on 

 timber supply or the local economy. This outside report coincided with our own 

 Internally developed information. Additionally, one must remember that we 

 predominantly harvest by the selective method and do absolutely NO dearcutting in 

 virgin old growth redwoods. 



Q -- It is my understanding that the MAXXAM high-yield junk bonds used to finance 

 The Pacific Lumber Company takeover have been replaced with low interest bonds. 

 When was this debt reamortized and will your timber harvest remain relatively 

 constant even with these lower financing costs? 



A - The Pacific Lumber Company's remaining debt was refinanced in March of 1993 

 at significantly lower interest rates and much longer maturities. The largest portion 

 of the debt now carries an investment grade rating. At present, our harvest level is 

 running at an annual rate of approximately 220 million board feet per year. Harvest 

 levels fluctuate according to market conditions, weather, and environmental 

 conditions. At the present level, our harvest rate equals growth. In addition, we have 

 acquired additional forestland since 1985-86 and intend to seek additional forest 

 acquisitions. 



Q - Some have alleged that although The Pacific Lumber Company has increased 

 employment to process increased timber harvests, many of those workers will lose 

 their jobs eventually because the current timber harvest is not sustainable over time. 

 Could you elaborate on those allegations. 



A -- With the improvements and innovations in our production facilities - and the 

 expansion of our product lines -- our workforce should remain constant. Even though 

 harvest levels fluctuate, our shipments should remain high because we have become 

 more efficient at getting more product from each log, and we need the workforce we 

 have to manufacture this increased volume and variety of wood products. For 

 example, we have a relatively new end-and-edge glue plant to manufacture wood 

 products from the kinds of boards that were formerly scrapped. That has generated 

 jobs where formerly there were none. Also, as mentioned above, we have acquired 

 and will seek to acquire additional forestland. 



TBS PACIFIC UJMBEB COMPANT 



