Plum Creek Reports Improved Results for Fourth Quarter and Full Year 2012

  Plum Creek Reports Improved Results for Fourth Quarter and Full Year 2012

Business Wire

SEATTLE -- January 28, 2013

Plum Creek Timber Company, Inc. (NYSE: PCL) today announced fourth quarter
earnings of $79 million, or $0.49 per diluted share, on revenues of $354
million. Earnings for the fourth quarter of 2011 were $61 million, or $0.38
per diluted share, on revenues of $315 million.

Earnings for the full year of 2012 were $203 million, or $1.25 per diluted
share, on revenues of $1.34 billion. Earnings for the full year of 2011 were
$193 million, or $1.19 per diluted share, on revenues of $1.17 billion.

“We were able to post a five percent growth in full-year net income, ending
2012 on a strong note,” said Rick Holley, president and chief executive
officer. “We exceeded our initial expectations for the fourth quarter,
benefitting from continued strong demand for well-managed timberlands. In 2012
we grew adjusted EBITDA to $530 million, or an increase of 19 percent,
exceeding our goal for the year.

“During the year, we continued to position ourselves to benefit from the
emerging recovery in residential construction. We’ve worked closely with
logging contractors over the past several years to ensure we are in preferred
positions to serve the growing demand from our traditional customers as well
as emerging bioenergy customers.

“We maintained our capital discipline. We sold non-strategic timberlands when
we could lock-in very attractive returns for those properties today. We also
invested more than $195 million in timber and non-timber resources that will
add to our earnings and cash flow for years to come. Financially we’re in
great shape to take advantage of opportunities to grow the long-term value of
Plum Creek.

“We’re excited about the prospects for continued recovery and growth in 2013
and expect that the opportunities beyond are even more compelling. Over the
past year, housing has moved from being a drag on the economy to being a
bright spot. We are seeing improving demand for lumber and wood panels that is
expected to translate into higher demand and pricing for logs in 2013.”

Summary of 2012 Results

The company reported $281 million in operating income for 2012, $6 million
higher than 2011’s $275 million operating income. Profit improvement in the
timber and manufacturing businesses were partially offset by lower income from
the real estate segment.

The company’s timber resource segments reported a combined $110 million of
operating income for 2012, up $12 million from 2011’s level. Sawlog prices
were largely unchanged from year to year while pulpwood prices increased
approximately $1 per ton in both the Northern and Southern regions. The
company’s harvest level of 17.9 million tons was 13 percent higher than the
2011 harvest of 15.8 million tons. In the North, the total harvest grew nearly
190,000 tons, or 5 percent. In the South, the total harvest grew approximately
1.9 million tons, a 17 percent increase in harvest volume compared to 2011.
The company’s early 2012 timber deed acquisition contributed approximately
650,000 tons of the increase.

In the Real Estate segment, the company reported revenue of $352 million in
2012 and $301 million in 2011. Operating income was $187 million during 2012
compared with $195 million during 2011. Per acre values of the various land
types sold were consistent with those realized for the past four years. The
decline in operating margin in the segment was due entirely to
higher-than-typical book basis of the land sold during 2012.

Operating income from the company’s Manufacturing segment was $29 million,
nearly double the $15 million reported in 2011. Product prices in each of the
segment’s product lines increased between three and ten percent when compared
to 2011 prices. Sales volumes for plywood and Medium Density Fiberboard (MDF)
increased 16 percent and 24 percent respectively while lumber sales volumes
were largely unchanged.

Review of Quarterly Operations

The Northern Resources segment reported operating profit of $5 million for the
fourth quarter, compared to a $7 million profit reported in the fourth quarter
of 2011. As planned, the company’s fourth quarter harvest volumes were lower
than those of the same period of 2011. The eleven percent lower harvest
volumes combined with temporarily higher road expenses offset the benefit of
slightly higher prices for both sawlogs and pulpwood experienced in the fourth
quarter of 2012.

The Southern Resources segment reported fourth quarter operating profit of $24
million, an increase of $5 million from the fourth quarter of 2011. Average
pulpwood prices have increased approximately $2 per ton, or 16 percent,
compared to the fourth quarter of 2011 as strong demand from pulp and paper
customers and recovering demand from Oriented Strandboard (OSB) producers have
kept pressure on the resource throughout the region. The company increased its
pulpwood harvest approximately 10 percent over fourth quarter 2011 levels to
serve customer needs and capture attractive pricing. Southern sawlog prices
were unchanged from their fourth quarter 2011 level. The 5 percent increase in
the fourth quarter sawlog harvest came exclusively from the timber deed
acquired in the first quarter of 2012.

The Real Estate segment reported revenue of $109 million and operating profit
of $74 million in the fourth quarter of 2012. The segment reported $93 million
of revenue and $61 million of operating profit for the fourth quarter of 2011.
The company sold approximately 47,000 acres of land in the fourth quarter of
2012. Sales included an approximately 16,600 acre large, non-strategic sale of
western Oregon timberlands for $58 million, or $3,500 per acre. The balance of
the properties sold consisted of 9,700 acres of rural recreation lands that
captured approximately $1,950 per acre, approximately 3,550 acres of
conservation lands sold for more than $2,250 per acre, and 17,100 acres of
lower productivity, non-strategic properties captured $1,365 per acre.

The Manufacturing segment reported operating profit of $7 million for the
fourth quarter of 2012, up $4 million from the same period of 2011. Prices for
lumber, plywood, and MDF were higher than fourth quarter 2011 levels. Plywood
prices in particular were up nearly 19 percent from their fourth quarter 2011
level while lumber and MDF prices increased more modestly, one and four
percent respectively. Lumber sales volumes were similar to those of the fourth
quarter of 2011, while plywood and MDF sales volumes improved nine percent and
25 percent, respectively.

Fourth Quarter Debt Issue

As previously announced, during the fourth quarter the company issued $325
million of 3.25% senior unsecured notes due 2023.

Outlook

Lumber, plywood, and OSB customers are anticipating continued demand growth in
2013 as residential construction activity continues to recover and housing
starts approach 1 million units for the first time since 2007. As sawlog
customers increase production to meet this demand growth, the company expects
sawlog prices to improve. Pulpwood demand from pulp and paper mills throughout
the nation remains very good and recovering demand from OSB producers and
emerging demand from wood pellet producers are expected to result in improved
pulpwood prices in the South and continued attractive prices in the North.

The company plans to harvest between 17.5 and 18.0 million tons of timber this
year, similar to 2012’s 17.9 million ton harvest. While the total harvest
volume is expected to be largely unchanged, the company expects to shift the
mix of its harvest during 2013 as sawlog demand and pricing improves.

Improving consumer confidence and continued interest in hard asset investments
is expected to provide a solid foundation for rural real estate activity,
particularly in the Gulf South and Lake State regions. Real Estate segment
sales for the year are expected to be between $250 million and $300million
with land basis expense between 30 and 35 percent of sales. First quarter
sales are expected to be between $80 and $85 million.

Lumber, specialty plywood and MDF markets are expected to remain strong and
grow further in the coming year. As a result, Manufacturing segment results
are expected to continue to improve in 2013.

Third-party interest expense in 2013 is expected to be approximately $80
million; about $2 million lower than 2012’s expense.

Reflecting all of these factors, the company expects 2013 income to be between
$1.25 and $1.50 per share. The company expects to report first quarter income
between $0.28 and $0.33 per share.

“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        82             81
Parties)
Interest Expense (Note Payable to Timberland           58            58     
Venture)
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     21             20
Parties)
Interest Expense (Note Payable to Timberland        15            15       
Venture)
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           December 31, 2012   December 31, 2011
Amounts)
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          204                 201
Venture
Deferred Tax Asset                       19                  18
Investment in Grantor Trusts (at Fair    39                  36
Value)
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       2                   2
December 31, 2012 and 161.3 at
December 31, 2011
Additional Paid-In Capital               2,288               2,261
Retained Earnings (Accumulated           (97           )     (28           )
Deficit)
Treasury Stock, at Cost, Common Shares
– 26.9 at December 31, 2012 and 26.9     (938          )     (937          )
at December 31, 2011
Accumulated Other Comprehensive Income   (32           )     (35           )
(Loss)
Total Stockholders’ Equity               1,223              1,263         
Total Liabilities and Stockholders’      $    4,384         $    4,259    
Equity
                                                                           


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     (8       )     11
Amortization)
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             (72      )     (70    )
Acquisitions)
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     (2        )     (3      )
of Amortization)
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          (20       )     (27     )
Acquisitions)
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      (3        )     (46     )
Debt
Proceeds from Stock Option Exercises                13              1
Acquisition of Treasury Stock                       —              (10     )
Net Cash Provided By (Used In) Financing            16             (77     )
Activities
                                                                    
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.

We present Adjusted EBITDA as a supplemental performance measure because we
believe it facilitates operating performance comparisons from period to
period, and each business segment’s contribution to that performance, by
eliminating non-cash charges to earnings, which can vary significantly by
business segment. These non-cash charges include timber depletion,
depreciation of fixed assets and the basis in lands sold. We also use Adjusted
EBITDA as a supplemental liquidity measure because we believe it is useful in
measuring our ability to generate cash. In addition, we believe Adjusted
EBITDA is commonly used by investors, lenders and rating agencies to assess
our financial performance.

A reconciliation of Adjusted EBITDA to net income and net cash from operating
activities, the most directly comparable U.S. GAAP performance and liquidity
measures, is provided in the following schedules:


                                                               
                          Year Ended December 31, 2012
                                                                    
                                       Depreciation,   Basis of
                          Operating    Depletion and   Real         Adjusted
                          Income       Amortization    Estate       EBITDA
                                                       Sold
By Segment
Northern Resources        $  20        $   26          $  —         $  46
Southern Resources        90           67              —            157
Real Estate               187          1               138          326
Manufacturing             29           15              —            44
Other                     19           1               —            20
Other Costs and           (65     )    1               —            (64     )
Eliminations
Other Unallocated
Operating Income          1           —              —           1       
(Expense), net
Total                     $  281      $   111        $  138      $  530  
                                                                    
Reconciliation to Net
Income^(1)
Equity Earnings from      59
Timberland Venture
Interest Expense          (140    )
(Provision) Benefit for   3       
Income Taxes
Net Income                $  203  
                                                                    
Reconciliation to Net
Cash Provided By
Operating Activities
Net Cash Flows from                                                 $  353
Operations
Interest Expense                                                    140
Amortization of Debt                                                (3      )
Costs
Provision / (Benefit)                                               (3      )
for Income Taxes
Distributions from                                                  (56     )
Timberland Venture
Deferred Income Taxes                                               3
Gain on Sale of
Properties and Other                                                —
Assets
Deferred Revenue from                                               8
Long-Term Gas Leases
Timber Deed Acquired                                                98
Pension Plan                                                        20
Contributions
Working Capital Changes                                             (15     )
Other                                                               (15     )
Adjusted EBITDA                                                     $  530  
                                                                            
(1) Includes reconciling items not allocated to segments for financial
reporting purposes.


                                                               
                           Year Ended December 31, 2011
                                                                    
                                        Depreciation,   Basis of
                           Operating    Depletion and   Real        Adjusted
                           Income       Amortization    Estate      EBITDA
                                                        Sold
By Segment
Northern Resources         $  24        $    26         $  —        $  50
Southern Resources         74           51              —           125
Real Estate                195          2               77          274
Manufacturing              15           13              —           28
Other                      21           —               —           21
Other Costs and            (55     )    2               —           (53     )
Eliminations
Other Unallocated
Operating Income           1           —              —          1       
(Expense), net
Total                      $  275      $    94        $  77      $  446  
                                                                    
Reconciliation to Net
Income^(1)
Equity Earnings from       56
Timberland Venture
Interest Expense           (139    )
(Provision) Benefit for    1       
Income Taxes
Net Income                 $  193  
                                                                    
Reconciliation to Net
Cash Provided By
Operating Activities
Net Cash Flows from                                                 $  374
Operations
Interest Expense                                                    139
Amortization of Debt                                                (2      )
Costs
Provision / (Benefit)                                               (1      )
for Income Taxes
Distributions from                                                  (56     )
Timberland Venture
Deferred Income Taxes                                               —
Gain on Sale of
Properties and Other                                                —
Assets
Deferred Revenue from                                               (11     )
Long-Term Gas Leases
Timber Deed Acquired                                                5
Pension Plan                                                        3
Contributions
Working Capital Changes                                             8
Other                                                               (13     )
Adjusted EBITDA                                                     $  446  
                                                                            
(1) Includes reconciling items not allocated to segments for financial
reporting purposes.


                                                               
                            Quarter Ended December 31, 2012
                                                                    
                                        Depreciation,   Basis of
                            Operating   Depletion and   Real        Adjusted
                            Income      Amortization    Estate      EBITDA
                                                        Sold
By Segment
Northern Resources          $  5        $    6          $  —        $  11
Southern Resources          24          15              —           39
Real Estate                 74          —               27          101
Manufacturing               7           4               —           11
Other                       5           1               —           6
Other Costs and             (18    )    —               —           (18     )
Eliminations
Other Unallocated
Operating Income            —          —              —          —       
(Expense), net
Total                       $  97      $    26        $  27      $  150  
                                                                    
Reconciliation to Net
Income^(1)
Equity Earnings from        17
Timberland Venture
Interest Expense            (36    )
(Provision) Benefit for     1      
Income Taxes
Net Income                  $  79  
                                                                    
Reconciliation to Net
Cash Provided By
Operating Activities
Net Cash Flows from                                                 $  116
Operations
Interest Expense                                                    36
Amortization of Debt                                                (1      )
Costs
Provision / (Benefit) for                                           (1      )
Income Taxes
Distributions from                                                  —
Timberland Venture
Deferred Income Taxes                                               2
Gain on Sale of
Properties and Other                                                —
Assets
Deferred Revenue from                                               2
Long-Term Gas Leases
Timber Deed Acquired                                                —
Pension Plan                                                        10
Contributions
Working Capital Changes                                             (10     )
Other                                                               (4      )
Adjusted EBITDA                                                     $  150  
                                                                            
(1) Includes reconciling items not allocated to segments for financial
reporting purposes.


                                                               
                            Quarter Ended December 31, 2011
                                                                    
                                        Depreciation,   Basis of
                            Operating   Depletion and   Real        Adjusted
                            Income      Amortization    Estate      EBITDA
                                                        Sold
By Segment
Northern Resources          $  7        $    7          $  —        $  14
Southern Resources          19          14              —           33
Real Estate                 61          1               20          82
Manufacturing               3           3               —           6
Other                       5           —               —           5
Other Costs and             (12    )    1               —           (11     )
Eliminations
Other Unallocated
Operating Income            —          —              —          —       
(Expense), net
Total                       $  83      $    26        $  20      $  129  
                                                                    
Reconciliation to Net
Income^(1)
Equity Earnings from        12
Timberland Venture
Interest Expense            (35    )
(Provision) Benefit for     1      
Income Taxes
Net Income                  $  61  
                                                                    
Reconciliation to Net
Cash Provided By
Operating Activities
Net Cash Flows from                                                 $  80
Operations
Interest Expense                                                    35
Amortization of Debt                                                —
Costs
Provision / (Benefit) for                                           (1      )
Income Taxes
Distributions from                                                  —
Timberland Venture
Deferred Income Taxes                                               2
Gain on Sale of
Properties and Other                                                —
Assets
Deferred Revenue from                                               3
Long-Term Gas Leases
Timber Deed Acquired                                                5
Pension Plan                                                        —
Contributions
Working Capital Changes                                             8
Other                                                               (3      )
Adjusted EBITDA                                                     $  129  
                                                                            
(1) Includes reconciling items not allocated to segments for financial
reporting purposes.


Contact:

Plum Creek Timber Company, Inc.
Investors: John Hobbs, 1-800-858-5347
Media: Kathy Budinick, 1-888-467-3751
 
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