Plum Creek Timber Company, Inc. Reports Results for Third Quarter 2013

  Plum Creek Timber Company, Inc. Reports Results for Third Quarter 2013

Business Wire

SEATTLE -- October 28, 2013

Plum Creek Timber Company, Inc. (NYSE: PCL) today announced third quarter
earnings of $72 million, or $0.44 per diluted share, on revenues of $366
million. Third quarter earnings include a $4 million, or $0.02 per diluted
share, non-cash expense related to fire losses experienced in Montana and
Oregon during the quarter. Earnings for the third quarter of 2012 were $59
million, or $0.36 per diluted share, on revenues of $354 million.

Earnings for the first nine months of 2013 were $174 million, or $1.06 per
diluted share, on revenues of $1.0 billion. Earnings for the first nine months
of 2012 were $124 million, or $0.76 per diluted share, on revenues of $985
million.

Adjusted EBITDA, a non-GAAP measure of operating performance, for the first
nine months of 2013 was $384 million, compared to $380 million for the same
period of 2012. The company ended the quarter with $439 million in cash and
cash equivalents. A reconciliation of adjusted EBITDA to net income and cash
flow from operations is provided as an attachment to this release.

“We had a very good quarter reporting earnings above the high end of our
guidance range despite the two cent fire related charge,” said Rick Holley,
Plum Creek’s chief executive officer. “Each business segment performed well.
Northern timber markets remain strong and Southern timber markets continue to
improve slowly. Our Manufacturing segment posted another strong performance
and our Real Estate segment is seeing improving market conditions in some
regions. We expect fairly stable business conditions during the fourth quarter
and are looking forward to continued improvement in timber markets during
2014.”

Review of Operations

The Northern Resources segment reported $5 million of operating income during
the third quarter that includes the impact of the $4 million non-cash fire
loss. Approximately 12,000 acres of company lands in Montana and Oregon were
damaged by wildfires during the quarter. Segment operating income for the same
period of 2012 was $5 million. Strengthening demand for sawlogs has led to
higher prices over the past year. Average sawlog prices increased more than 14
percent as domestic sawmills competed with strong export demand on the West
Coast. Average pulpwood prices in the Northern Resources segment were up
modestly, $1 per ton. As planned, the harvest volume of one million tons was
approximately 9 percent lower than the same period of 2012.

Operating income in the Southern Resources segment was $27 million, a $4
million increase over the $23 million reported during the third quarter of
2012, despite higher pulpwood harvest volumes in 2012. The segment’s sawlog
harvest was unchanged from the third quarter of 2012. Both sawlog and pulpwood
prices have improved over the past year. Southern sawlog prices have improved
approximately eight percent on growing log demand in the region. Good demand
from pulp and paper mills and stronger demand from OSB producers throughout
the region have resulted in 12 percent growth in pulpwood prices over the past
year. In general, log price improvement has been stronger in the eastern
regions of the South such as Georgia, Florida and the Carolinas than the
western regions such as Arkansas and Louisiana.

The Real Estate segment reported third quarter revenue of $96 million and
operating income of $63 million. Third quarter 2012 Real Estate segment
revenue was $96 million and operating income was $54 million. The 2013 results
included the sale of approximately 15,000 acres of Oregon timberland for
approximately $53 million. The 2012 sales were anchored by the sale of
approximately 100,000 acres of Wisconsin timberland for approximately $67
million. Smaller rural land sales across the company’s holdings accounted for
the remaining $43 million of the third quarter 2013 revenue.

The Manufacturing segment reported $11 million of operating income for the
third quarter, compared to the $9 million of operating income reported for the
third quarter of 2012. Operating income growth was driven by strong pricing
for the company’s panel products and higher lumber sales volumes. Medium
density fiberboard (MDF) prices have increased approximately seven percent
over the past twelve months while plywood prices have increased approximately
six percent. Sales volumes for plywood and MDF were largely unchanged from the
same period of 2012 as both facilities continued to run near capacity. Lumber
sales volumes increased 47 percent compared to the third quarter of 2012 due
to the April 2013 re-start of the company’s Evergreen sawmill. Average lumber
prices declined approximately five percent. This was due solely to the
introduction of lower–valued stud lumber produced by the re-opened sawmill.

Outlook

The company expects its full-year harvest to approximate 17.5 million tons.

During the fourth quarter, the company expects to harvest approximately 900
thousand tons in its Northern Resources segment and approximately 4 million
tons in its Southern Resources segment.

Fourth quarter Real Estate segment sales are expected to be between $47
million and $52 million.

In the fourth quarter, seasonally lower sales volumes for the company’s
manufactured products are expected to result in lower Manufacturing segment
profitability compared to the third quarter.

The company expects to report fourth quarter earnings between $0.26 and $0.31
per share.

“We are excited about the future of Plum Creek and our position in the
marketplace. We continue to execute on our goal of long-term value creation
for our shareholders. Disciplined capital allocation is at the heart of our
strategy and is the single most important tool we have to create true and
lasting long-term value,” concluded Holley.

Earnings Conference Call and Supplemental Information

Plum Creek will hold a conference call today, Oct. 28, at 6:00 p.m. ET (3:00
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 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 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 31587216.

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 among the largest and most geographically diverse private
landowners in the nation with approximately 6.3million 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 Securities 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)        Nine Months Ended September 30,
                                               2013              2012
REVENUES:
Timber                                         $   487            $   480
Real Estate                                    227                243
Manufacturing                                  279                246
Other                                          16                16        
Total Revenues                                 1,009             985       
                                                                  
COSTS AND EXPENSES:
Cost of Goods Sold:
Timber                                         364                374
Real Estate                                    83                 124
Manufacturing                                  237                217
Other                                          3                 1         
Total Cost of Goods Sold                       687                716
Selling, General and Administrative            89                86        
Total Costs and Expenses                       776               802       
                                                                  
Other Operating Income (Expense), net          (2         )       1         
                                                                  
Operating Income                               231                184
                                                                  
Equity Earnings from Timberland Venture        47                 42
                                                                  
Interest Expense, net:
Interest Expense (Debt Obligations to          61                 61
Unrelated Parties)
Interest Expense (Note Payable to Timberland   43                43        
Venture)
Total Interest Expense, net                    104                104
                                                                  
Income before Income Taxes                     174                122
                                                                  
Provision (Benefit) for Income Taxes           —                  (2        )
                                                                 
Net Income                                     $   174           $   124   
                                                                  
PER SHARE AMOUNTS:
                                                                  
Net Income per Share – Basic                   $   1.06           $   0.77
Net Income per Share – Diluted                 $   1.06           $   0.76
                                                                  
Weighted-Average Number of Shares
Outstanding
– Basic                                        162.7              161.5
– Diluted                                      163.2              161.8
                                                                            

PLUM CREEK TIMBER COMPANY, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
                                                               
(In Millions, Except Per Share Amounts)            Quarter Ended September 30,
                                                   2013            2012
REVENUES:
Timber                                             $   171         $  168
Real Estate                                        96              96
Manufacturing                                      94              85
Other                                              5              5        
Total Revenues                                     366            354      
                                                                   
COSTS AND EXPENSES:
Cost of Goods Sold:
Timber                                             132             130
Real Estate                                        31              40
Manufacturing                                      80              74
Other                                              1              —        
Total Cost of Goods Sold                           244             244
Selling, General and Administrative                28             31       
Total Costs and Expenses                           272            275      
                                                                   
Other Operating Income (Expense), net              (3        )     —        
                                                                   
Operating Income                                   91              79
                                                                   
Equity Earnings from Timberland Venture            16              14
                                                                   
Interest Expense, net:
Interest Expense (Debt Obligations to Unrelated    20              21
Parties)
Interest Expense (Note Payable to Timberland       14             14       
Venture)
Total Interest Expense, net                        34              35
                                                                   
Income before Income Taxes                         73              58
                                                                   
Provision (Benefit) for Income Taxes               1               (1       )
                                                                  
Net Income                                         $   72         $  59    
                                                                   
PER SHARE AMOUNTS:
                                                                   
Net Income per Share – Basic                       $   0.44        $  0.36
Net Income per Share – Diluted                     $   0.44        $  0.36
                                                                   
Weighted-Average Number of Shares Outstanding
– Basic                                            163.0           161.5
– Diluted                                          163.4           161.9
                                                                            

PLUM CREEK TIMBER COMPANY, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
                                                               
                                                  September 30,   December 31,
(In Millions, Except Per Share Amounts)
                                                  2013            2012
ASSETS
Current Assets:
Cash and Cash Equivalents                         $   439         $  356
Accounts Receivable                               35              22
Inventories                                       53              49
Deferred Tax Asset                                8               7
Assets Held for Sale                              38              61
Other Current Assets                              17             13        
                                                  590             508
                                                                  
Timber and Timberlands, net                       3,395           3,363
Mineral Rights, net                               242             87
Property, Plant and Equipment, net                118             127
Equity Investment in Timberland Venture           195             204
Deferred Tax Asset                                19              19
Investment in Grantor Trusts (at Fair Value)      42              39
Other Assets                                      30             37        
Total Assets                                      $   4,631      $  4,384  
                                                                  
LIABILITIES
Current Liabilities:
Current Portion of Long-Term Debt                 $   74          $  248
Line of Credit                                    507             104
Accounts Payable                                  30              26
Interest Payable                                  21              26
Wages Payable                                     22              29
Taxes Payable                                     16              9
Deferred Revenue                                  29              23
Other Current Liabilities                         10             7         
                                                  709             472
                                                                  
Long-Term Debt                                    1,815           1,815
Note Payable to Timberland Venture                783             783
Other Liabilities                                 94             91        
Total Liabilities                                 3,401          3,161     
                                                                  
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      2               2
Stock) – 163.0 at September 30, 2013 and 162.0
at December 31, 2012
Additional Paid-In Capital                        2,330           2,288
Retained Earnings (Accumulated Deficit)           (135       )    (97       )
Treasury Stock, at Cost, Common Shares – 27.0
at September 30, 2013 and 26.9 at December 31,    (940       )    (938      )
2012
Accumulated Other Comprehensive Income (Loss)     (27        )    (32       )
Total Stockholders’ Equity                        1,230          1,223     
Total Liabilities and Stockholders’ Equity        $   4,631      $  4,384  
                                                                            

PLUM CREEK TIMBER COMPANY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
                                                             
                                               Nine Months Ended September 30,
(In Millions)                                  2013               2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income                                     $    174           $   124
Adjustments to Reconcile Net Income to Net
Cash Provided By Operating Activities:
Depreciation, Depletion and Amortization
(Includes $4 Loss Related to Forest Fires in   86                 87
2013)
Basis of Real Estate Sold                      69                 111
Equity Earnings from Timberland Venture        (47        )       (42       )
Distributions from Timberland Venture          56                 56
Deferred Income Taxes                          (1         )       (1        )
Deferred Revenue from Long-Term Gas Leases     (6         )       (6        )
(Net of Amortization)
Timber Deed Acquired                           (18        )       (98       )
Pension Plan Contributions                     —                  (10       )
Working Capital Changes                        (12        )       5
Other                                          19                11        
Net Cash Provided By (Used In) Operating       320               237       
Activities
                                                                  
CASH FLOWS FROM INVESTING ACTIVITIES
Capital Expenditures (Excluding Timberland     (51        )       (52       )
Acquisitions)
Timberlands Acquired                           (80        )       (18       )
Mineral Rights Acquired                        (156       )       —
Other                                          —                 (1        )
Net Cash Provided By (Used In) Investing       (287       )       (71       )
Activities
                                                                  
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends                                      (212       )       (204      )
Borrowings on Line of Credit                   1,251              1,712
Repayments on Line of Credit                   (848       )       (1,709    )
Proceeds from Issuance of Long-Term Debt       —                  450
Debt Issuance Costs                            —                  (3        )
Principal Payments and Retirement of           (174       )       (350      )
Long-Term Debt
Proceeds from Stock Option Exercises           35                 5
Acquisition of Treasury Stock                  (2         )       (1        )
Net Cash Provided By (Used In) Financing       50                (100      )
Activities
                                                                  
Increase (Decrease) In Cash and Cash           83                 66
Equivalents
Cash and Cash Equivalents:
Beginning of Period                            356                254
                                                                 
End of Period                                  $    439          $   320   
                                                                            

PLUM CREEK TIMBER COMPANY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
                                                                
                                                   Quarter Ended September 30,
(In Millions)                                      2013             2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income                                         $   72           $  59
Adjustments to Reconcile Net Income to Net Cash
Provided By Operating Activities:
Depreciation, Depletion and Amortization
(Includes $4 Loss Related to Forest Fires in       35               31
2013)
Basis of Real Estate Sold                          27               36
Equity Earnings from Timberland Venture            (16       )      (14     )
Distributions from Timberland Venture              29               28
Deferred Revenue from Long-Term Gas Leases (Net    (2        )      (1      )
of Amortization)
Pension Plan Contributions                         —                (3      )
Working Capital Changes                            28               7
Other                                              7               5       
Net Cash Provided By (Used In) Operating           180             148     
Activities
                                                                    
CASH FLOWS FROM INVESTING ACTIVITIES
Capital Expenditures (Excluding Timberland         (20       )      (17     )
Acquisitions)
Timberlands Acquired                               (2        )      (5      )
Mineral Rights Acquired                            (156      )      —       
Net Cash Provided By (Used In) Investing           (178      )      (22     )
Activities
                                                                    
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends                                          (72       )      (68     )
Borrowings on Line of Credit                       530              583
Repayments on Line of Credit                       (376      )      (683    )
Proceeds from Issuance of Long-Term Debt           —                450
Principal Payments and Retirement of Long-Term     —                (350    )
Debt
Proceeds from Stock Option Exercises               —               2       
Net Cash Provided By (Used In) Financing           82              (66     )
Activities
                                                                    
Increase (Decrease) In Cash and Cash Equivalents   84               60
Cash and Cash Equivalents:
Beginning of Period                                355              260
                                                                   
End of Period                                      $   439         $  320  
                                                                            

PLUM CREEK TIMBER COMPANY, INC.
SEGMENT DATA
(UNAUDITED)
                                                     
                              Nine Months Ended September 30,
(In Millions)                 2013                          2012
Revenues:
Northern Resources            $      194                    $     185
Southern Resources            313                           312
Real Estate                   227                           243
Manufacturing                 279                           246
Other                         16                            16
Eliminations                  (20               )           (17           )
Total Revenues                $      1,009                 $     985     
                                                            
Operating Income
(Loss):
Northern Resources            $      24                     $     15
Southern Resources            74                            66
Real Estate                   138                           113
Manufacturing                 35                            22
Other                         14                            14
Other Costs and               (54               )           (46           )
Eliminations, net ^(A)
Total Operating Income        $      231                   $     184     
                                                            
Adjusted EBITDA by
Segment: ^(B)
Northern Resources            $      47                     $     35
Southern Resources            119                           118
Real Estate                   208                           225
Manufacturing                 47                            33
Other                         16                            14
Other Costs and               (53               )           (45           )
Eliminations, net
Total                         $      384                   $     380     
                                                                          
(A) During the first nine months of 2013, the company recorded a loss of $5
million related to the early termination of an equipment lease. The lease was
accounted for as an operating lease. This amount is reported as an operating
loss in Other Costs and Eliminations, net 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 September 30,
(In Millions)                 2013                          2012
Revenues:
Northern Resources            $      67                     $     65
Southern Resources            111                           110
Real Estate                   96                            96
Manufacturing                 94                            85
Other                         5                             5
Eliminations                  (7              )             (7            )
Total Revenues                $      366                   $     354     
                                                            
Operating Income
(Loss):
Northern Resources            $      5                      $     5
Southern Resources            27                            23
Real Estate                   63                            54
Manufacturing                 11                            9
Other                         5                             5
Other Costs and               (20             )             (17           )
Eliminations, net ^(A)
Total Operating Income        $      91                    $     79      
                                                            
Adjusted EBITDA by
Segment: ^(B)
Northern Resources            $      16                     $     12
Southern Resources            44                            42
Real Estate                   91                            90
Manufacturing                 15                            13
Other                         6                             5
Other Costs and               (20             )             (16           )
Eliminations, net
Total                         $      152                   $     146     
                                                                          
(A) During the third quarter of 2013, the company recorded a loss of $5
million related to the early termination of an equipment lease. The lease was
accounted for as an operating lease. This amount is reported as an operating
loss in Other Costs and Eliminations, net 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 - 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:


                                                                 
                        Nine Months Ended September 30, 2013
                                                                      
                                    Depreciation,       Basis of
                        Operating                       Real          Adjusted
                                    Depletion and
                        Income                          Estate Sold   EBITDA
                                    Amortization ^(1)
By Segment
Northern Resources      $  24       $     23            $   —         $  47
Southern Resources      74          45                  —             119
Real Estate             138         1                   69            208
Manufacturing           35          12                  —             47
Other                   14          2                   —             16
Other Costs and         (51     )   1                   —             (50    )
Eliminations
Other Unallocated
Operating Income        (3      )   —                  —            (3     )
(Expense), net
Total                   $  231     $     84           $   69       $  384 
                                                                      
Reconciliation to Net
Income ^(2)
Equity Earnings from    47
Timberland Venture
Interest Expense        (104    )
(Provision) Benefit     —       
for Income Taxes
Net Income              $  174  
                                                                      
Reconciliation to Net
Cash Provided By
Operating Activities
Net Cash Flows from                                                   $  320
Operations
Interest Expense                                                      104
Amortization of Debt                                                  (2     )
Costs
Provision / (Benefit)                                                 —
for Income Taxes
Distributions from                                                    (56    )
Timberland Venture
Deferred Income Taxes                                                 1
Gain on Sale of
Properties and Other                                                  —
Assets
Deferred Revenue from                                                 6
Long-Term Gas Leases
Timber Deed Acquired                                                  18
Pension Plan                                                          —
Contributions
Working Capital                                                       12
Changes
Other                                                                 (19    )
Adjusted EBITDA                                                       $  384 
                                                                             
(1) Includes a $4 million loss due to fire damages in the Northern Resources
Segment.
(2) Includes reconciling items not allocated to segments for financial
reporting purposes.



                                                                 
                          Nine Months Ended September 30, 2012
                                                                      
                                      Depreciation,
                          Operating                   Basis of Real   Adjusted
                                      Depletion and
                          Income                      Estate Sold     EBITDA
                                      Amortization
By Segment
Northern Resources        $  15       $    20         $   —           $  35
Southern Resources        66          52              —               118
Real Estate               113         1               111             225
Manufacturing             22          11              —               33
Other                     14          —               —               14
Other Costs and           (47     )   1               —               (46    )
Eliminations
Other Unallocated
Operating Income          1          —              —              1      
(Expense), net
Total                     $  184     $    85        $   111        $  380 
                                                                      
Reconciliation to Net
Income ^(1)
Equity Earnings from      42
Timberland Venture
Interest Expense          (104    )
(Provision) Benefit for   2       
Income Taxes
Net Income                $  124  
                                                                      
Reconciliation to Net
Cash Provided By
Operating Activities
Net Cash Flows from                                                   $  237
Operations
Interest Expense                                                      104
Amortization of Debt                                                  (2     )
Costs
Provision / (Benefit)                                                 (2     )
for Income Taxes
Distributions from                                                    (56    )
Timberland Venture
Deferred Income Taxes                                                 1
Gain on Sale of
Properties and Other                                                  —
Assets
Deferred Revenue from                                                 6
Long-Term Gas Leases
Timber Deed Acquired                                                  98
Pension Plan                                                          10
Contributions
Working Capital Changes                                               (5     )
Other                                                                 (11    )
Adjusted EBITDA                                                       $  380 
                                                                             
(1) Includes reconciling items not allocated to segments for financial
reporting purposes.



                                                                 
                        Quarter Ended September 30, 2013
                                                                      
                                    Depreciation,       Basis of
                        Operating                       Real          Adjusted
                                    Depletion and
                        Income                          Estate Sold   EBITDA
                                    Amortization ^(1)
By Segment
Northern Resources      $  5        $     11            $   —         $  16
Southern Resources      27          17                  —             44
Real Estate             63          1                   27            91
Manufacturing           11          4                   —             15
Other                   5           1                   —             6
Other Costs and         (16    )    —                   —             (16    )
Eliminations
Other Unallocated
Operating Income        (4     )    —                  —            (4     )
(Expense), net
Total                   $  91      $     34           $   27       $  152 
                                                                      
Reconciliation to Net
Income ^(2)
Equity Earnings from    16
Timberland Venture
Interest Expense        (34    )
(Provision) Benefit     (1     )
for Income Taxes
Net Income              $  72  
                                                                      
Reconciliation to Net
Cash Provided By
Operating Activities
Net Cash Flows from                                                   $  180
Operations
Interest Expense                                                      34
Amortization of Debt                                                  (1     )
Costs
Provision / (Benefit)                                                 1
for Income Taxes
Distributions from                                                    (29    )
Timberland Venture
Deferred Income Taxes                                                 —
Gain on Sale of
Properties and Other                                                  —
Assets
Deferred Revenue from                                                 2
Long-Term Gas Leases
Timber Deed Acquired                                                  —
Pension Plan                                                          —
Contributions
Working Capital                                                       (28    )
Changes
Other                                                                 (7     )
Adjusted EBITDA                                                       $  152 
                                                                             
(1) Includes a $4 million loss due to fire damages in the Northern Resources
Segment.
(2) Includes reconciling items not allocated to segments for financial
reporting purposes.



                                                                 
                          Quarter Ended September 30, 2012
                                                                      
                                      Depreciation,
                          Operating                   Basis of Real   Adjusted
                                      Depletion and
                          Income                      Estate Sold     EBITDA
                                      Amortization
By Segment
Northern Resources        $  5        $    7          $    —          $  12
Southern Resources        23          19              —               42
Real Estate               54          —               36              90
Manufacturing             9           4               —               13
Other                     5           —               —               5
Other Costs and           (17    )    1               —               (16    )
Eliminations
Other Unallocated
Operating Income          —          —              —              —      
(Expense), net
Total                     $  79      $    31        $    36        $  146 
                                                                      
Reconciliation to Net
Income ^(1)
Equity Earnings from      14
Timberland Venture
Interest Expense          (35    )
(Provision) Benefit for   1      
Income Taxes
Net Income                $  59  
                                                                      
Reconciliation to Net
Cash Provided By
Operating Activities
Net Cash Flows from                                                   $  148
Operations
Interest Expense                                                      35
Amortization of Debt                                                  —
Costs
Provision / (Benefit)                                                 (1     )
for Income Taxes
Distributions from                                                    (28    )
Timberland Venture
Deferred Income Taxes                                                 —
Gain on Sale of
Properties and Other                                                  —
Assets
Deferred Revenue from                                                 1
Long-Term Gas Leases
Timber Deed Acquired                                                  —
Pension Plan                                                          3
Contributions
Working Capital Changes                                               (7     )
Other                                                                 (5     )
Adjusted EBITDA                                                       $  146 
                                                                             
(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