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Plum Creek Timber Management Discusses Q2 2012 Results - Earnings Call Transcript

Before we begin, I'd like to take this time to remind everyone that certain of our statements today will be forward looking, involving known and unknown risks, uncertainties and other factors that may cause actual results or performance to differ from those expressed or implied. These risks and factors are routinely detailed in our filings with the Securities and Exchange Commission. Following today's prepared remarks, we'll open up the call for your questions.

Now, I'll turn the call over to Rick.

Rick R. Holley

Good afternoon. Second quarter came in a bit better than we expected. Our Manufacturing segment continued to perform well with good demand and improving prices. Our Real Estate segment posted revenues just above the high-end of our initial expectations, and strong domestic demand translated into better-than-expected pricing for both sawlogs and pulpwood in our Northern timber operations.

In the South, markets were much as we expected. The Southern log price is just slightly higher than the first quarter.

Our outlook for the year hasn't changed much. At the margin, we're expecting a bit more from our Manufacturing segment, but we may not see at as much upside from Southern sawlogs as we had anticipated, so earning guidance for the year is unchanged.

Now, I'll turn the call over to David for a review of the quarter and our outlook for the rest of the year. David?

David W. Lambert

Our second quarter results of $0.22 were a couple of pennies above our guidance range. As Rick mentioned, business conditions were better than we initially projected for nearly all of our segments. Northern Resources' $4 million operating profit was $2 million lower than the $6 million reported in the first quarter due to the seasonal decline in harvest volume. The harvest declined about 160,000 tons, the harvest mix of roughly 2/3 sawlogs, 1/3 pulpwood was as planned. Overall, log prices were better than we initially expected. Northern sawlog prices increased $4 per ton to $71, while pulpwood prices held steady at $42 per ton.

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