Plum Creek Reports Improved Results For Fourth Quarter And Full Year 2012

“We expect improving results from our timber resource and manufacturing businesses in 2013,” continued Holley. “We expect real estate sales to moderate as we do not expect to repeat the relatively high level of large, non-strategic timberland sales concluded in 2012.

“The management team and I are as excited about the future at Plum Creek as we have ever been. Recovering demand and the structural changes to timber supply and demand in North America are setting the table for excellent growth in the coming years. Years of thoughtful, disciplined capital allocation have positioned us to benefit tremendously as these shifts in the marketplace occur. We have an unmatched asset base, strong balance sheet and excellent financial flexibility, all the tools required to continue our disciplined approach to long-term value creation for our shareholders,” concluded Holley.

Earnings Conference Call and Supplemental Information

Plum Creek will hold a conference call today, Jan. 28, at 5:00 p.m. ET (2:00 p.m. PT). A live webcast of the conference call may be accessed through Plum Creek’s Internet site at www.plumcreek.com by clicking on the “Investors” link.

Investors without Internet access should dial 1-800-572-9852 at least 10 minutes prior to the start of the call, referencing Plum Creek’s earnings conference call. Those wishing to access the call from outside the United States and Canada should dial 1-706-645-9676, also referencing Plum Creek’s earnings conference call. Replay of the call will be available for 48 hours after completion of the live call and can be accessed at 1-855-859-2056 or 1-404-537-3406 (international calls), using the code 31584649.

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 one of the largest landowners in the nation and the most geographically diverse, with approximately 6.4 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)		Year Ended December 31,
		2012				2011
REVENUES:
Timber		$	641			$	572
Real Estate		352				301
Manufacturing		324				273
Other		22				21
Total Revenues		1,339				1,167
COSTS AND EXPENSES:
Cost of Goods Sold:
Timber		498				445
Real Estate		157				92
Manufacturing		286				250
Other		2				2
Total Cost of Goods Sold		943				789
Selling, General and Administrative		116				106
Total Costs and Expenses		1,059				895
Other Operating Income (Expense), net		1				3
Operating Income		281				275
Equity Earnings from Timberland Venture		59				56
Interest Expense, net:
Interest Expense (Debt Obligations to Unrelated Parties)		82				81
Interest Expense (Note Payable to Timberland Venture)		58				58
Total Interest Expense, net		140				139
Income before Income Taxes		200				192
Provision (Benefit) for Income Taxes		(3		)		(1		)
Net Income		$	203			$	193
PER SHARE AMOUNTS:
Net Income per Share – Basic		$	1.25			$	1.19
Net Income per Share – Diluted		$	1.25			$	1.19
Weighted-Average Number of Shares Outstanding
– Basic		161.5				161.7
– Diluted		161.9				162.0

PLUM CREEK TIMBER COMPANY, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(In Millions, Except Per Share Amounts)		Quarter Ended December 31,
		2012				2011
REVENUES:
Timber		$	161			$	151
Real Estate		109				93
Manufacturing		78				65
Other		6				6
Total Revenues		354				315
COSTS AND EXPENSES:
Cost of Goods Sold:
Timber		124				118
Real Estate		33				24
Manufacturing		69				60
Other		1				1
Total Cost of Goods Sold		227				203
Selling, General and Administrative		30				29
Total Costs and Expenses		257				232
Other Operating Income (Expense), net		—				—
Operating Income		97				83
Equity Earnings from Timberland Venture		17				12
Interest Expense, net:
Interest Expense (Debt Obligations to Unrelated Parties)		21				20
Interest Expense (Note Payable to Timberland Venture)		15				15
Total Interest Expense, net		36				35
Income before Income Taxes		78				60
Provision (Benefit) for Income Taxes		(1		)		(1		)
Net Income		$	79			$	61
PER SHARE AMOUNTS:
Net Income per Share – Basic		$	0.49			$	0.38
Net Income per Share – Diluted		$	0.49			$	0.38
Weighted-Average Number of Shares Outstanding
– Basic		161.7				161.4
– Diluted		162.2				161.6

PLUM CREEK TIMBER COMPANY, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In Millions, Except Per Share Amounts)		December 31, 2012				December 31, 2011
ASSETS
Current Assets:
Cash and Cash Equivalents		$	356			$	254
Accounts Receivable		22				28
Inventories		49				48
Deferred Tax Asset		7				5
Assets Held for Sale		61				103
Other Current Assets		13				15
		508				453
Timber and Timberlands, net		3,363				3,365
Mineral Rights, net		87				12
Property, Plant and Equipment, net		127				138
Equity Investment in Timberland Venture		204				201
Deferred Tax Asset		19				18
Investment in Grantor Trusts (at Fair Value)		39				36
Other Assets		37				36
Total Assets		$	4,384			$	4,259
LIABILITIES
Current Liabilities:
Current Portion of Long-Term Debt		$	248			$	352
Line of Credit		104				348
Accounts Payable		26				25
Interest Payable		26				26
Wages Payable		29				20
Taxes Payable		9				9
Deferred Revenue		23				27
Other Current Liabilities		7				8
		472				815
Long-Term Debt		1,815				1,290
Note Payable to Timberland Venture		783				783
Other Liabilities		91				108
Total Liabilities		3,161				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) – 162.0 at December 31, 2012 and 161.3 at December 31, 2011		2				2
Additional Paid-In Capital		2,288				2,261
Retained Earnings (Accumulated Deficit)		(97		)		(28		)
Treasury Stock, at Cost, Common Shares – 26.9 at December 31, 2012 and 26.9 at December 31, 2011		(938		)		(937		)
Accumulated Other Comprehensive Income (Loss)		(32		)		(35		)
Total Stockholders’ Equity		1,223				1,263
Total Liabilities and Stockholders’ Equity		$	4,384			$	4,259

PLUM CREEK TIMBER COMPANY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
		Year Ended December 31,
(In Millions)		2012				2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income		$	203			$	193
Adjustments to Reconcile Net Income to Net Cash Provided By Operating Activities:
Depreciation, Depletion and Amortization		114				96
Basis of Real Estate Sold		138				77
Equity Earnings from Timberland Venture		(59		)		(56		)
Distributions from Timberland Venture		56				56
Deferred Income Taxes		(3		)		—
Deferred Revenue from Long-Term Gas Leases (Net of Amortization)		(8		)		11
Timber Deed Acquired		(98		)		(5		)
Pension Plan Contributions		(20		)		(3		)
Working Capital Changes Impacting Cash Flow:
Income Tax Receivable		—				(1		)
Other Working Capital Changes		15				(7		)
Other		15				13
Net Cash Provided By Operating Activities		353				374
CASH FLOWS FROM INVESTING ACTIVITIES
Capital Expenditures (Excluding Timberland Acquisitions)		(72		)		(70		)
Timberlands Acquired		(18		)		(89		)
Mineral Rights Acquired		(76		)		(12		)
Other		(1		)		—
Net Cash Used In Investing Activities		(167		)		(171		)
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends		(272		)		(272		)
Borrowings on Line of Credit		1,843				1,921
Repayments on Line of Credit		(2,087		)		(1,739		)
Proceeds from Issuance of Long-Term Debt		773				—
Debt Issuance Costs		(5		)		—
Principal Payments and Retirement of Long-Term Debt		(353		)		(95		)
Proceeds from Stock Option Exercises		18				10
Acquisition of Treasury Stock		(1		)		(26		)
Net Cash Used In Financing Activities		(84		)		(201		)
Increase (Decrease) In Cash and Cash Equivalents		102				2
Cash and Cash Equivalents:
Beginning of Period		254				252
End of Period		$	356			$	254

PLUM CREEK TIMBER COMPANY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
		Quarter Ended December 31,
(In Millions)		2012				2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income		$	79			$	61
Adjustments to Reconcile Net Income to Net Cash Provided By Operating Activities:
Depreciation, Depletion and Amortization		27				26
Basis of Real Estate Sold		27				20
Equity Earnings from Timberland Venture		(17		)		(12		)
Deferred Income Taxes		(2		)		(2		)
Deferred Revenue from Long-Term Gas Leases (Net of Amortization)		(2		)		(3		)
Timber Deed Acquired		—				(5		)
Pension Plan Contributions		(10		)		—
Working Capital Changes		10				(8		)
Other		4				3
Net Cash Provided By Operating Activities		116				80
CASH FLOWS FROM INVESTING ACTIVITIES
Capital Expenditures (Excluding Timberland Acquisitions)		(20		)		(27		)
Timberlands Acquired		—				(13		)
Mineral Rights Acquired		(76		)		—
Net Cash Used In Investing Activities		(96		)		(40		)
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends		(68		)		(68		)
Borrowings on Line of Credit		131				824
Repayments on Line of Credit		(378		)		(778		)
Proceeds from Issuance of Long-Term Debt		323				—
Debt Issuance Costs		(2		)		—
Principal Payments and Retirement of Long-Term Debt		(3		)		(46		)
Proceeds from Stock Option Exercises		13				1
Acquisition of Treasury Stock		—				(10		)
Net Cash Provided By (Used In) Financing Activities		16				(77		)
Increase (Decrease) In Cash and Cash Equivalents		36				(37		)
Cash and Cash Equivalents:
Beginning of Period		320				291
End of Period		$	356			$	254

PLUM CREEK TIMBER COMPANY, INC.
SEGMENT DATA
(UNAUDITED)
		Year Ended December 31,
(In Millions)		2012				2011
Revenues:
Northern Resources		$	246			$	233
Southern Resources		417				359
Real Estate		352				301
Manufacturing		324				273
Other		22				21
Eliminations		(22		)		(20		)
Total Revenues		$	1,339			$	1,167
Operating Income (Loss):
Northern Resources		$	20			$	24
Southern Resources		90				74
Real Estate		187				195
Manufacturing		29				15
Other (A)		19				21
Other Costs and Eliminations, net		(64		)		(54		)
Total Operating Income		$	281			$	275
Adjusted EBITDA by Segment: (B)
Northern Resources		$	46			$	50
Southern Resources		157				125
Real Estate		326				274
Manufacturing		44				28
Other		20				21
Other Costs and Eliminations, net		(63		)		(52		)
Total		$	530			$	446

(A) During 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 December 31,
(In Millions)		2012				2011
Revenues:
Northern Resources		$	61			$	66
Southern Resources		105				93
Real Estate		109				93
Manufacturing		78				65
Other		6				6
Eliminations		(5		)		(8		)
Total Revenues		$	354			$	315
Operating Income (Loss):
Northern Resources		$	5			$	7
Southern Resources		24				19
Real Estate		74				61
Manufacturing		7				3
Other		5				5
Other Costs and Eliminations, net		(18		)		(12		)
Total Operating Income		$	97			$	83
Adjusted EBITDA by Segment: (A)
Northern Resources		$	11			$	14
Southern Resources		39				33
Real Estate		101				82
Manufacturing		11				6
Other		6				5
Other Costs and Eliminations, net		(18		)		(11		)
Total		$	150			$	129

(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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