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

Stocks in this article: PCL

“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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