Plum Creek Timber Company, Inc. Reports Results For Second Quarter 2012

Supplemental financial information for Plum Creek operations, including statistical data and reconciliations to non-GAAP measures is available in the Investors section of Plum Creek’s website at www.plumcreek.com.

Plum Creek is the largest and most geographically diverse private landowner in the nation with approximately 6.5 million acres of timberlands in major timber producing regions of the United States and wood products manufacturing facilities in the Northwest. For more information, visit www.plumcreek.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Litigation Reform Act of 1995 as amended. Some of these forward-looking statements can be identified by the use of forward-looking words such as "believes," "expects," "may," "will," "should," "seek," "approximately," "intends," "plans," "estimates," or "anticipates," or the negative of those words or other comparable terminology. The accuracy of such statements is subject to a number of risks, uncertainties and assumptions including, but not limited to, the cyclical nature of the forest products industry, our ability to harvest our timber, our ability to execute our acquisition strategy, the market for and our ability to sell or exchange non-strategic timberlands and timberland properties that have higher and better uses, and various regulatory constraints. These and other risks, uncertainties and assumptions are detailed from time to time in our filings with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, and the Securities Act of 1933, as amended. It is likely that if one or more of the risks materializes, or if one or more assumptions prove to be incorrect, the current expectations of Plum Creek and its management will not be realized. Forward-looking statements are not guarantees of performance, and speak only as of the date made, and neither Plum Creek nor its management undertakes any obligation to update or revise any forward-looking statements.

PLUM CREEK TIMBER COMPANY, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(In Millions, Except Per Share Amounts)		Six Months Ended June 30,
		2012				2011
REVENUES:
Timber		$	312			$	267
Real Estate		147				141
Manufacturing		161				141
Other		11				10
Total Revenues		631				559
COSTS AND EXPENSES:
Cost of Goods Sold:
Timber		244				208
Real Estate		84				49
Manufacturing		143				128
Other		1				1
Total Cost of Goods Sold		472				386
Selling, General and Administrative		55				53
Total Costs and Expenses		527				439
Other Operating Income (Expense), net		1				3
Operating Income		105				123
Equity Earnings from Timberland Venture		28				30
Interest Expense, net:
Interest Expense (Debt Obligations to Unrelated Parties)		40				41
Interest Expense (Note Payable to Timberland Venture)		29				29
Total Interest Expense, net		69				70
Income before Income Taxes		64				83
Provision (Benefit) for Income Taxes		(1		)		1
Net Income		$	65			$	82
PER SHARE AMOUNTS:
Net Income per Share – Basic		$	0.40			$	0.51
Net Income per Share – Diluted		$	0.40			$	0.50
Weighted-Average Number of Shares Outstanding
– Basic		161.4				161.9
– Diluted		161.7				162.2

PLUM CREEK TIMBER COMPANY, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(In Millions, Except Per Share Amounts)		Quarter Ended June 30,
		2012				2011
REVENUES:
Timber		$	157			$	126
Real Estate		47				79
Manufacturing		85				74
Other		5				5
Total Revenues		294				284
COSTS AND EXPENSES:
Cost of Goods Sold:
Timber		123				101
Real Estate		16				27
Manufacturing		73				67
Other		1				1
Total Cost of Goods Sold		213				196
Selling, General and Administrative		27				25
Total Costs and Expenses		240				221
Other Operating Income (Expense), net		1				—
Operating Income		55				63
Equity Earnings from Timberland Venture		15				16
Interest Expense, net:
Interest Expense (Debt Obligations to Unrelated Parties)		19				20
Interest Expense (Note Payable to Timberland Venture)		15				15
Total Interest Expense, net		34				35
Income before Income Taxes		36				44
Provision (Benefit) for Income Taxes		—				—
Net Income		$	36			$	44
PER SHARE AMOUNTS:
Net Income per Share – Basic		$	0.22			$	0.27
Net Income per Share – Diluted		$	0.22			$	0.27
Weighted-Average Number of Shares Outstanding
– Basic		161.5				162.0
– Diluted		161.7				162.3

PLUM CREEK TIMBER COMPANY, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
		June 30,				December 31,
(In Millions, Except Per Share Amounts)		2012				2011
ASSETS
Current Assets:
Cash and Cash Equivalents		$	260			$	254
Accounts Receivable		36				28
Inventories		46				48
Deferred Tax Asset		6				6
Assets Held for Sale		76				103
Other Current Assets		15				15
		439				454
Timber and Timberlands, net		3,431				3,377
Property, Plant and Equipment, net		131				138
Equity Investment in Timberland Venture		201				201
Deferred Tax Asset		18				17
Investment in Grantor Trusts (at Fair Value)		37				36
Other Assets		37				36
Total Assets		$	4,294			$	4,259
LIABILITIES
Current Liabilities:
Current Portion of Long-Term Debt		$	176			$	352
Line of Credit		451				348
Accounts Payable		24				25
Interest Payable		26				26
Wages Payable		11				20
Taxes Payable		13				9
Deferred Revenue		36				27
Other Current Liabilities		8				8
		745				815
Long-Term Debt		1,467				1,290
Note Payable to Timberland Venture		783				783
Other Liabilities		97				108
Total Liabilities		3,092				2,996
Commitments and Contingencies
STOCKHOLDERS’ EQUITY
Preferred Stock, $0.01 Par Value, Authorized Shares – 75.0, Outstanding – None		—				—
Common Stock, $0.01 Par Value, Authorized Shares – 300.6, Outstanding (net of Treasury Stock) – 161.5 at June 30, 2012 and 161.3 at December 31, 2011		2				2
Additional Paid-In Capital		2,269				2,261
Retained Earnings (Accumulated Deficit)		(99		)		(28		)
Treasury Stock, at Cost, Common Shares – 26.9 at June 30, 2012 and 26.9 at December 31, 2011		(938		)		(937		)
Accumulated Other Comprehensive Income (Loss)		(32		)		(35		)
Total Stockholders’ Equity		1,202				1,263
Total Liabilities and Stockholders’ Equity		$	4,294			$	4,259

PLUM CREEK TIMBER COMPANY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
		Six Months Ended June 30,
(In Millions)		2012				2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income		$	65			$	82
Adjustments to Reconcile Net Income to Net Cash Provided By Operating Activities:
Depreciation, Depletion and Amortization		56				44
Basis of Real Estate Sold		75				43
Equity Earnings from Timberland Venture		(28		)		(30		)
Distributions from Timberland Venture		28				28
Deferred Income Taxes		(1		)		4
Deferred Revenue from Long-Term Gas Leases (Net of Amortization)		(5		)		12
Timber Deed Acquired		(98		)		—
Pension Plan Contributions		(7		)		—
Working Capital Changes Impacting Cash Flow:
Like-Kind Exchange Funds		—				(35		)
Other Working Capital Changes		(2		)		4
Other		6				5
Net Cash Provided By Operating Activities		89				157
CASH FLOWS FROM INVESTING ACTIVITIES
Capital Expenditures (Excluding Timberland Acquisitions)		(35		)		(28		)
Timberlands and Minerals Acquired		(13		)		(12		)
Other		(1		)		—
Net Cash Used In Investing Activities		(49		)		(40		)
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends		(136		)		(136		)
Borrowings on Line of Credit		1,129				555
Repayments on Line of Credit		(1,026		)		(494		)
Debt Issuance Costs		(3		)		—
Principal Payments and Retirement of Long-Term Debt		—				(49		)
Proceeds from Stock Option Exercises		3				9
Acquisition of Treasury Stock		(1		)		(1		)
Net Cash Used In Financing Activities		(34		)		(116		)
Increase (Decrease) In Cash and Cash Equivalents		6				1
Cash and Cash Equivalents:
Beginning of Period		254				252
End of Period		$	260			$	253

PLUM CREEK TIMBER COMPANY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
		Quarter Ended June 30,
(In Millions)		2012				2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income		$	36			$	44
Adjustments to Reconcile Net Income to Net Cash Provided By Operating Activities:
Depreciation, Depletion and Amortization		29				22
Basis of Real Estate Sold		12				24
Equity Earnings from Timberland Venture		(15		)		(16		)
Deferred Income Taxes		—				1
Deferred Revenue from Long-Term Gas Leases (Net of Amortization)		(3		)		5
Pension Plan Contributions		(7		)		—
Working Capital Changes Impacting Cash Flow:
Like-Kind Exchange Funds		—				(35		)
Other Working Capital Changes		28				34
Other		3				2
Net Cash Provided By Operating Activities		83				81
CASH FLOWS FROM INVESTING ACTIVITIES
Capital Expenditures (Excluding Timberland Acquisitions)		(17		)		(16		)
Timberlands and Minerals Acquired		(11		)		(12		)
Net Cash Used In Investing Activities		(28		)		(28		)
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends		(68		)		(68		)
Borrowings on Line of Credit		370				310
Repayments on Line of Credit		(370		)		(298		)
Proceeds from Stock Option Exercises		—				2
Net Cash Used In Financing Activities		(68		)		(54		)
Increase (Decrease) In Cash and Cash Equivalents		(13		)		(1		)
Cash and Cash Equivalents:
Beginning of Period		273				254
End of Period		$	260			$	253

		PLUM CREEK TIMBER COMPANY, INC.
		SEGMENT DATA
		(UNAUDITED)
				Six Months Ended June 30,
		(In Millions)		2012				2011
		Revenues:
		Northern Resources		$	120			$	99
		Southern Resources		202				173
		Real Estate		147				141
		Manufacturing		161				141
		Other		11				10
		Eliminations		(10		)		(5		)
		Total Revenues		$	631			$	559
		Operating Income (Loss):
		Northern Resources		$	10			$	10
		Southern Resources		43				34
		Real Estate		59				88
		Manufacturing		13				9
		Other ( A)		9				11
		Other Costs and Eliminations, net		(29		)		(29		)
		Total Operating Income		$	105			$	123
		Adjusted EBITDA by Segment: (B)
		Northern Resources		$	23			$	21
		Southern Resources		76				58
		Real Estate		135				132
		Manufacturing		20				15
		Other		9				11
		Other Costs and Eliminations, net		(29		)		(28		)
		Total		$	234			$	209
(A)		During the first six months of 2011, the company received a payment of $2 million for
		the settlement of a dispute that related to certain mineral rights. This amount is
		reported as Other Operating Gain/(Loss) in our Other Segment and is included in Other
		Operating Income (Expense), net in the Consolidated Statements of Income.
(B)		Refer to the separate schedule, "Segment Data - Adjusted EBITDA" for reconciliations of
		Adjusted EBITDA to operating income and net cash provided by operating activities.

		PLUM CREEK TIMBER COMPANY, INC.
		SEGMENT DATA
		(UNAUDITED)
				Quarter Ended June 30,
		(In Millions)		2012				2011
		Revenues:
		Northern Resources		$	56			$	44
		Southern Resources		105				84
		Real Estate		47				79
		Manufacturing		85				74
		Other		5				5
		Eliminations		(4		)		(2		)
		Total Revenues		$	294			$	284
		Operating Income (Loss):
		Northern Resources		$	4			$	3
		Southern Resources		22				15
		Real Estate		29				50
		Manufacturing		9				5
		Other		4				4
		Other Costs and Eliminations, net		(13		)		(14		)
		Total Operating Income		$	55			$	63
		Adjusted EBITDA by Segment: (A)
		Northern Resources		$	10			$	8
		Southern Resources		40				27
		Real Estate		42				75
		Manufacturing		12				8
		Other		4				4
		Other Costs and Eliminations, net		(13		)		(13		)
		Total		$	95			$	109
(A)		Refer to the separate schedule, "Segment Data - Adjusted EBITDA" for reconciliations of
		Adjusted EBITDA to operating income and net cash provided by operating activities.

Plum Creek Timber Company, Inc

Segment Data - Adjusted EBITDA

Reconciliation of Operating Income and Net Cash

Provided by Operating Activities

(Unaudited)

We define Adjusted EBITDA as earnings from continuing operations, excluding equity method earnings, and before interest, taxes, depreciation, depletion, amortization, and basis in lands sold. Adjusted EBITDA is not considered a measure of financial performance under U.S. generally accepted accounting principles (U.S. GAAP) and the items excluded from Adjusted EBITDA are significant components of our consolidated financial statements.

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