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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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