Plum Creek Timber (PCL) 8-K Plum Creek Timber Company, Inc. Reports Results for Second Quarter 2006

Exhibit 99.2

PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

	Six Months Ended
	June 30, 2006		June 30, 2005
	(In Millions, Except Per Share Amounts)
Revenues:
Timber	$	407	$	392
Real Estate		113		104
Manufacturing		264		257
Other		10		5
Total Revenues		794		758
Costs and Expenses:
Cost of Goods Sold:
Timber		234		201
Real Estate		41		40
Manufacturing		240		235
Other		1		1
Total Cost of Goods Sold		516		477
Selling, General and Administrative		52		45
Total Costs and Expenses		568		522
Operating Income		226		236
Interest Expense, net		65		54
Income before Income Taxes		161		182
Provision for Income Taxes		7		11
Income from Continuing Operations		154		171
Gain on Sale of Properties, net of tax		—		20
Net Income Before Cumulative Effect of Accounting Change		154		191
Cumulative Effect of Accounting Change, net of tax		2		—
Net Income	$	156	$	191
Income from Continuing Operations per Share
- Basic	$	0.84	$	0.93
- Diluted	$	0.84	$	0.93
Net Income per Share
- Basic	$	0.85	$	1.04
- Diluted	$	0.85	$	1.03
Weighted Average Number of Shares Outstanding
- Basic		183.2		183.9
- Diluted		183.7		184.6

PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

	Quarter Ended
	June 30, 2006		June 30, 2005
	(In Millions, Except Per Share Amounts)
Revenues:
Timber	$	193	$	192
Real Estate		52		36
Manufacturing		130		128
Other		5		2
Total Revenues		380		358
Costs and Expenses:
Cost of Goods Sold:
Timber		113		99
Real Estate		25		16
Manufacturing		117		117
Other		—		—
Total Cost of Goods Sold		255		232
Selling, General and Administrative		26		24
Total Costs and Expenses		281		256
Operating Income		99		102
Interest Expense, net		34		27
Income before Income Taxes		65		75
Provision for Income Taxes		3		6
Net Income	$	62	$	69
Net Income per Share
- Basic	$	0.34	$	0.37
- Diluted	$	0.34	$	0.37
Weighted Average Number of Shares Outstanding
- Basic		182.3		184.0
- Diluted		182.8		184.6

PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	June 30, 2006			December 31, 2005
	(In Millions, Except Per Share Amounts)
ASSETS
Current Assets:
Cash and Cash Equivalents	$	396		$	369
Restricted Advance from Customer		20			23
Accounts Receivable		56			44
Like-Kind Exchange Funds Held in Escrow		10			30
Inventories		72			75
Deferred Tax Asset		17			17
Real Estate Development Properties		25			26
Assets Held for Sale		65			43
Other Current Assets		17			16
		678			643
Timber and Timberlands - Net		3,845			3,887
Property, Plant and Equipment - Net		226			234
Investment in Grantor Trusts		25			26
Other Assets		23			22
Total Assets	$	4,797		$	4,812
LIABILITIES
Current Liabilities:
Current Portion of Long-Term Debt	$	231		$	161
Short-Term Debt		—			50
Accounts Payable		40			45
Interest Payable		31			30
Wages Payable		16			25
Taxes Payable		21			18
Deferred Revenue		41			35
Other Current Liabilities		16			11
		396			375
Long-Term Debt		1,643			1,524
Lines of Credit		516			495
Deferred Tax Liability		39			39
Other Liabilities		47			54
Total Liabilities		2,641			2,487
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, issued (including Treasury Stock) - 186.4 at June 30, 2006, and 186.2 at December 31, 2005		2			2
Additional Paid-In Capital		2,184			2,179
Retained Earnings		195			186
Treasury Stock, at cost, Common Shares - 7.2 at June 30, 2006, and 2.0 at December 31, 2005		(228	)		(44	)
Other Equity		3			2
Total Stockholders’ Equity		2,156			2,325
Total Liabilities and Stockholders’ Equity	$	4,797		$	4,812

PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Six Months Ended
	June 30, 2006			June 30, 2005
	(In Millions)
Cash Flows From Operating Activities:
Net Income	$	156		$	191
Adjustments to Reconcile Net Income to Net Cash Provided By Operating Activities:
Depreciation, Depletion and Amortization		60			55
Basis of Real Estate Sold		23			28
Deferred Income Taxes		—			(1	)
Gain on Sales of Properties and Other Assets		—			(21	)
Working Capital Changes Impacting Cash Flow:
Like-Kind Exchange Funds		20			(46	)
Other Working Capital Changes		(6	)		(8	)
Other		(1	)		—
Net Cash Provided By Operating Activities		252			198
Cash Flows From Investing Activities:
Capital Expenditures (Excluding Timberland Acquisitions)		(36	)		(28	)
Timberlands Acquired		(17	)		(50	)
Proceeds from Sales of Properties and Other Assets		1			5
Other		(3	)		—
Net Cash Used In Investing Activities		(55	)		(73	)
Cash Flows From Financing Activities:
Dividends		(147	)		(140	)
Borrowings on Line of Credit		1,474			1,140
Repayments on Line of Credit		(1,453	)		(1,093	)
Proceeds from Issuance of Short-Term Debt		—			50
Repayment of Short-Term Debt		(50	)		—
Proceeds from Issuance of Long-Term Debt		216			—
Principal Payments and Retirement of Long-Term Debt		(29	)		(49	)
Proceeds from Stock Option Exercises		3			4
Acquisition of Treasury Stock		(184	)		—
Net Cash Used In Financing Activities		(170	)		(88	)
Increase In Cash and Cash Equivalents		27			37
Cash and Cash Equivalents:
Beginning of Period		369			347
End of Period	$	396		$	384

PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Quarter Ended
	June 30, 2006			June 30, 2005
	(In Millions)
Cash Flows From Operating Activities:
Net Income	$	62		$	69
Adjustments to Reconcile Net Income to Net Cash Provided By Operating Activities:
Depreciation, Depletion and Amortization		29			28
Basis of Real Estate Sold		13			10
Deferred Income Taxes		(1	)		—
Working Capital Changes Impacting Cash Flow:
Like-Kind Exchange Funds		(9	)		(15	)
Other Working Capital Changes		14			25
Other		4			2
Net Cash Provided By Operating Activities		112			119
Cash Flows From Investing Activities:
Capital Expenditures (Excluding Timberland Acquisitions)		(19	)		(18	)
Timberlands Acquired		(17	)		(50	)
Proceeds from Sales of Properties and Other Assets		1			4
Other		(3	)		—
Net Cash Used In Investing Activities		(38	)		(64	)
Cash Flows From Financing Activities:
Dividends		(73	)		(70	)
Borrowings on Line of Credit		811			611
Repayments on Line of Credit		(790	)		(564	)
Proceeds from Issuance of Short-Term Debt		—			50
Repayment of Short-Term Debt		(50	)		—
Proceeds from Issuance of Long-Term Debt		216			—
Principal Payments and Retirement of Long-Term Debt		(28	)		(48	)
Proceeds from Stock Option Exercises		1			1
Acquisition of Treasury Stock		(184	)		—
Net Cash Used In Financing Activities		(97	)		(20	)
Increase (Decrease) In Cash and Cash Equivalents		(23	)		35
Cash and Cash Equivalents:
Beginning of Period		419			349
End of Period	$	396		$	384

Plum Creek Timber Company, Inc.

Segment Data

(Unaudited)

	Six Months 2006			Six Months 2005
	(In Millions)
Revenues:
Northern Resources	$	202		$	159
Southern Resources		243			266
Real Estate		113			104
Manufacturing		264			257
Other		10			5
Eliminations		(38	)		(33	)
Total Revenues	$	794		$	758
Operating Costs and Expenses:
Northern Resources	$	146		$	111
Southern Resources		145			141
Real Estate		42			42
Manufacturing		246			241
Other		1			1
Other Costs and Eliminations		(12	)		(14	)
Total Costs and Expenses	$	568		$	522
Operating Income (Loss)
Northern Resources	$	56		$	48
Southern Resources		98			125
Real Estate		71			62
Manufacturing		18			16
Other		9			4
Other Costs and Eliminations		(26	)		(19	)
Total Operating Income	$	226		$	236

Plum Creek Timber Company, Inc.

Segment Data

(Unaudited)

	Second Quarter 2006			Second Quarter 2005
	(In Millions)
Revenues:
Northern Resources	$	87		$	71
Southern Resources		121			135
Real Estate		52			36
Manufacturing		130			128
Other		5			2
Eliminations		(15	)		(14	)
Total Revenues	$	380		$	358
Operating Costs and Expenses:
Northern Resources	$	66		$	52
Southern Resources		73			73
Real Estate		25			17
Manufacturing		120			120
Other		1			—
Other Costs and Eliminations		(4	)		(6	)
Total Costs and Expenses	$	281		$	256
Operating Income (Loss)
Northern Resources	$	21		$	19
Southern Resources		48			62
Real Estate		27			19
Manufacturing		10			8
Other		4			2
Other Costs and Eliminations		(11	)		(8	)
Total Operating Income	$	99		$	102

Selected Operating Statistics

(Unaudited)

		2006						2005
		1st Qtr		2nd Qtr		YTD		1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		YTD
Sales Realization	Units
Southern Resources
Sawlog	$/Ton Stumpage	$	35	$	36	$	36	$	38	$	38	$	36	$	37	$	37
Pulpwood	$/Ton Stumpage	$	8	$	8	$	8	$	9	$	9	$	8	$	7	$	8
Northern Resources
Sawlog	$/Ton Delivered	$	77	$	78	$	78	$	76	$	77	$	79	$	77	$	77
Pulpwood	$/Ton Delivered	$	37	$	37	$	37	$	37	$	37	$	39	$	38	$	38
Lumber (1)	$/MBF	$	467	$	456	$	462	$	483	$	459	$	440	$	435	$	454
Plywood (1)	$/MSF	$	452	$	455	$	453	$	419	$	422	$	418	$	444	$	425
Fiberboard (1)	$/MSF	$	445	$	480	$	462	$	449	$	458	$	441	$	434	$	446
Sales Volume
Southern Resources
Sawlog	1,000 Tons		1,749		1,685		3,434		1,899		1,899		1,553		1,624		6,975
Pulpwood	1,000 Tons		1,642		1,651		3,293		1,592		1,825		1,690		1,696		6,803
Total Harvest			3,391		3,336		6,727		3,491		3,724		3,243		3,320		13,778
Northern Resources
Sawlog	1,000 Tons		1,151		877		2,028		906		774		898		1,011		3,589
Pulpwood	1,000 Tons		766		517		1,283		499		319		467		529		1,814
Total Harvest			1,917		1,394		3,311		1,405		1,093		1,365		1,540		5,403
Lumber	MBF		99,367		97,059		196,426		102,857		105,028		103,099		96,003		406,987
Plywood	MSF		75,769		71,269		147,038		75,483		75,235		76,692		71,115		298,525
Fiberboard	MSF		69,076		70,411		139,487		61,806		61,843		62,231		62,407		248,287

Plum Creek Timber Company, Inc.

Land Sale Statistics

(Unaudited)

	2006						2005
	1st Qtr		2nd Qtr		YTD		1st Qtr		2nd Qtr			3rd Qtr		4th Qtr		YTD
Acres Sold
Small Non-strategic		15,050		11,765		26,815		18,525		13,315			85,610		30,750		148,200
Large Non-strategic		—		—		—		—		625	*		—		39,375		40,000
Conservation		1,815		2,185		4,000		8,650		450			11,600		1,900		22,600
HBU/Recreation		3,860		7,225		11,085		9,100		4,510			5,620		1,770		21,000
Development Properties		1,075		645		1,720		20		140			20		20		200
Conservation Easements		n/a		n/a		n/a		n/a		n/a			n/a		n/a		n/a
		21,800		21,820		43,620		36,295		19,040			102,850		73,815		232,000
Price per Acre
Small Non-strategic	$	1,465	$	1,270	$	1,380	$	1,225	$	1,425		$	1,050	$	905	$	1,075
Large Non-strategic		—		—		—		—	$	1,820			—	$	763	$	780
Conservation	$	1,475	$	1,500	$	1,490	$	1,550	$	3,225		$	760	$	1,225	$	1,151
HBU/Recreation	$	4,960	$	4,140	$	4,425	$	2,600	$	2,550		$	3,030	$	3,905	$	2,814
Development Properties	$	8,595	$	5,295	$	7,355	$	23,500	$	13,785		$	14,300	$	10,700	$	14,500
Conservation Easements	$	1,300		—	$	1,300	$	427		—			—	$	490	$	450
Revenue, ($ millions)
Small Non-strategic	$	22	$	15	$	37	$	23	$	19		$	90	$	28	$	160
Large Non-strategic		—		—		—		—	$	1			—	$	30	$	31
Conservation	$	3	$	3	$	6	$	13	$	2		$	9	$	2	$	26
HBU/Recreation	$	19	$	30	$	49	$	24	$	11		$	17	$	7	$	59
Development Properties	$	9	$	4	$	13		—	$	3			—		—	$	3
Conservation Easements	$	8		—	$	8	$	8		—			—	$	5	$	13
	$	61	$	52	$	113	$	68	$	36		$	116	$	72	$	292
Basis of Real Estate Sold	$	10	$	13	$	23	$	18	$	10		$	54	$	42	$	124
($ millions)

* Represents the completion of the sale of our Pennsylvania properties. Initial sale was in 2004.