Exhibit 99.2
PLUM CREEK TIMBER COMPANY, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Nine Months Ended | ||||||
September 30, 2006 | September 30, 2005 | |||||
(In Millions, Except Per Share Amounts) | ||||||
Revenues: | ||||||
Timber | $ | 603 | $ | 572 | ||
Real Estate | 242 | 220 | ||||
Manufacturing | 388 | 383 | ||||
Other | 15 | 10 | ||||
Total Revenues | 1,248 | 1,185 | ||||
Costs and Expenses: | ||||||
Cost of Goods Sold: | ||||||
Timber | 361 | 308 | ||||
Real Estate | 96 | 105 | ||||
Manufacturing | 353 | 349 | ||||
Other | 2 | 2 | ||||
Total Cost of Goods Sold | 812 | 764 | ||||
Selling, General and Administrative | 76 | 68 | ||||
Total Costs and Expenses | 888 | 832 | ||||
Operating Income | 360 | 353 | ||||
Interest Expense, net | 98 | 80 | ||||
Income before Income Taxes | 262 | 273 | ||||
Provision for Income Taxes | 16 | 6 | ||||
Income from Continuing Operations | 246 | 267 | ||||
Gain on Sale of Properties, net of tax | — | 20 | ||||
Net Income Before Cumulative Effect of Accounting Change | 246 | 287 | ||||
Cumulative Effect of Accounting Change, net of tax | 2 | — | ||||
Net Income | $ | 248 | $ | 287 | ||
Income from Continuing Operations per Share | ||||||
- Basic | $ | 1.35 | $ | 1.45 | ||
- Diluted | $ | 1.35 | $ | 1.45 | ||
Net Income per Share | ||||||
- Basic | $ | 1.36 | $ | 1.56 | ||
- Diluted | $ | 1.36 | $ | 1.56 | ||
Weighted Average Number of Shares Outstanding | ||||||
- Basic | 181.7 | 183.9 | ||||
- Diluted | 182.1 | 184.6 |
PLUM CREEK TIMBER COMPANY, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Quarter Ended | |||||||
September 30, 2006 | September 30, 2005 | ||||||
(In Millions, Except Per Share Amounts) | |||||||
Revenues: | |||||||
Timber | $ | 196 | $ | 180 | |||
Real Estate | 129 | 116 | |||||
Manufacturing | 124 | 126 | |||||
Other | 5 | 5 | |||||
Total Revenues | 454 | 427 | |||||
Costs and Expenses: | |||||||
Cost of Goods Sold: | |||||||
Timber | 127 | 107 | |||||
Real Estate | 55 | 65 | |||||
Manufacturing | 113 | 114 | |||||
Other | 1 | 1 | |||||
Total Cost of Goods Sold | 296 | 287 | |||||
Selling, General and Administrative | 24 | 23 | |||||
Total Costs and Expenses | 320 | 310 | |||||
Operating Income | 134 | 117 | |||||
Interest Expense, net | 33 | 26 | |||||
Income before Income Taxes | 101 | 91 | |||||
Provision (Benefit) for Income Taxes | 9 | (5 | ) | ||||
Net Income | $ | 92 | $ | 96 | |||
Net Income per Share | |||||||
- Basic | $ | 0.51 | $ | 0.52 | |||
- Diluted | $ | 0.51 | $ | 0.52 | |||
Weighted Average Number of Shares Outstanding | |||||||
- Basic | 178.5 | 184.0 | |||||
- Diluted | 178.9 | 184.6 |
PLUM CREEK TIMBER COMPANY, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
September 30, 2006 | December 31, 2005 | |||||||
(In Millions, Except Per Share Amounts) | ||||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash and Cash Equivalents | $ | 389 | $ | 369 | ||||
Restricted Advance from Customer | 15 | 23 | ||||||
Accounts Receivable | 42 | 44 | ||||||
Like-Kind Exchange Funds Held in Escrow | 40 | 30 | ||||||
Inventories | 75 | 75 | ||||||
Deferred Tax Asset | 8 | 17 | ||||||
Real Estate Development Properties | 4 | 26 | ||||||
Assets Held for Sale | 77 | 43 | ||||||
Other Current Assets | 18 | 16 | ||||||
668 | 643 | |||||||
Timber and Timberlands - Net | 3,809 | 3,887 | ||||||
Property, Plant and Equipment - Net | 220 | 234 | ||||||
Investment in Grantor Trusts | 26 | 26 | ||||||
Other Assets | 32 | 22 | ||||||
Total Assets | $ | 4,755 | $ | 4,812 | ||||
LIABILITIES | ||||||||
Current Liabilities: | ||||||||
Current Portion of Long-Term Debt | $ | 255 | $ | 161 | ||||
Short-Term Debt | — | 50 | ||||||
Accounts Payable | 35 | 45 | ||||||
Interest Payable | 45 | 30 | ||||||
Wages Payable | 20 | 25 | ||||||
Taxes Payable | 28 | 18 | ||||||
Deferred Revenue | 34 | 35 | ||||||
Other Current Liabilities | 12 | 11 | ||||||
429 | 375 | |||||||
Long-Term Debt | 1,617 | 1,524 | ||||||
Lines of Credit | 518 | 495 | ||||||
Deferred Tax Liability | 38 | 39 | ||||||
Other Liabilities | 51 | 54 | ||||||
Total Liabilities | 2,653 | 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, outstanding - 177.0 at September 30, 2006, and 184.2 at December 31, 2005 | 2 | 2 | ||||||
Additional Paid-In Capital | 2,188 | 2,179 | ||||||
Retained Earnings | 215 | 186 | ||||||
Treasury Stock, at cost, Common Shares - 9.5 at September 30, 2006, and 2.0 at December 31, 2005 | (306 | ) | (44 | ) | ||||
Other Equity | 3 | 2 | ||||||
Total Stockholders’ Equity | 2,102 | 2,325 | ||||||
Total Liabilities and Stockholders’ Equity | $ | 4,755 | $ | 4,812 | ||||
PLUM CREEK TIMBER COMPANY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine Months Ended | ||||||||
September 30, 2006 | September 30, 2005 | |||||||
(In Millions) | ||||||||
Cash Flows From Operating Activities: | ||||||||
Net Income | $ | 248 | $ | 287 | ||||
Adjustments to Reconcile Net Income to | ||||||||
Net Cash Provided By Operating Activities: | ||||||||
Depreciation, Depletion and Amortization | 94 | 85 | ||||||
Basis of Real Estate Sold | 66 | 82 | ||||||
Deferred Income Taxes | 8 | (5 | ) | |||||
Gain on Sales of Properties and Other Assets | — | (22 | ) | |||||
Working Capital Changes Impacting Cash Flow: | ||||||||
Like-Kind Exchange Funds | (10 | ) | (68 | ) | ||||
Other Working Capital Changes | 18 | 2 | ||||||
Other | (4 | ) | 1 | |||||
Net Cash Provided By Operating Activities | 420 | 362 | ||||||
Cash Flows From Investing Activities: | ||||||||
Capital Expenditures (Excluding Timberland Acquisitions) | (60 | ) | (53 | ) | ||||
Timberlands Acquired | (22 | ) | (118 | ) | ||||
Proceeds from Sales of Properties and Other Assets | 1 | 27 | ||||||
Other | (4 | ) | (1 | ) | ||||
Net Cash Used In Investing Activities | (85 | ) | (145 | ) | ||||
Cash Flows From Financing Activities: | ||||||||
Dividends | (219 | ) | (209 | ) | ||||
Borrowings on Line of Credit | 2,167 | 1,806 | ||||||
Repayments on Line of Credit | (2,144 | ) | (1,753 | ) | ||||
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 | ) | (51 | ) | ||||
Proceeds from Stock Option Exercises | 6 | 4 | ||||||
Acquisition of Treasury Stock | (262 | ) | (1 | ) | ||||
Other | — | (1 | ) | |||||
Net Cash Used In Financing Activities | (315 | ) | (155 | ) | ||||
Increase In Cash and Cash Equivalents | 20 | 62 | ||||||
Cash and Cash Equivalents: | ||||||||
Beginning of Period | 369 | 347 | ||||||
End of Period | $ | 389 | $ | 409 | ||||
PLUM CREEK TIMBER COMPANY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Quarter Ended | ||||||||
September 30, 2006 | September 30, 2005 | |||||||
(In Millions) | ||||||||
Cash Flows From Operating Activities: | ||||||||
Net Income | $ | 92 | $ | 96 | ||||
Adjustments to Reconcile Net Income to | ||||||||
Net Cash Provided By Operating Activities: | ||||||||
Depreciation, Depletion and Amortization | 34 | 30 | ||||||
Basis of Real Estate Sold | 43 | 54 | ||||||
Deferred Income Taxes | 8 | (4 | ) | |||||
Gain on Sale of Properties | — | (1 | ) | |||||
Working Capital Changes Impacting Cash Flow: | ||||||||
Like-Kind Exchange Funds | (30 | ) | (22 | ) | ||||
Other Working Capital Changes | 24 | 10 | ||||||
Other | (3 | ) | 1 | |||||
Net Cash Provided By Operating Activities | 168 | 164 | ||||||
Cash Flows From Investing Activities: | ||||||||
Capital Expenditures (Excluding Timberland Acquisitions) | (24 | ) | (25 | ) | ||||
Timberlands Acquired | (5 | ) | (68 | ) | ||||
Proceeds from Sales of Properties and Other Assets | — | 22 | ||||||
Other | (1 | ) | (1 | ) | ||||
Net Cash Used In Investing Activities | (30 | ) | (72 | ) | ||||
Cash Flows From Financing Activities: | ||||||||
Dividends | (72 | ) | (69 | ) | ||||
Borrowings on Line of Credit | 693 | 666 | ||||||
Repayments on Line of Credit | (691 | ) | (660 | ) | ||||
Principal Payments and Retirement of Long-Term Debt | — | (2 | ) | |||||
Proceeds from Stock Option Exercises | 3 | — | ||||||
Acquisition of Treasury Stock | (78 | ) | (1 | ) | ||||
Other | — | (1 | ) | |||||
Net Cash Used In Financing Activities | (145 | ) | (67 | ) | ||||
Increase (Decrease) In Cash and Cash Equivalents | (7 | ) | 25 | |||||
Cash and Cash Equivalents: | ||||||||
Beginning of Period | 396 | 384 | ||||||
End of Period | $ | 389 | $ | 409 | ||||
Plum Creek Timber Company, Inc.
Segment Data
(Unaudited)
Nine Months 2006 | Nine Months 2005 | |||||||
(In Millions) | ||||||||
Revenues: | ||||||||
Northern Resources | $ | 308 | $ | 249 | ||||
Southern Resources | 358 | 382 | ||||||
Real Estate | 242 | 220 | ||||||
Manufacturing | 388 | 383 | ||||||
Other | 15 | 10 | ||||||
Eliminations | (63 | ) | (59 | ) | ||||
Total Revenues | $ | 1,248 | $ | 1,185 | ||||
Operating Costs and Expenses: | ||||||||
Northern Resources | $ | 227 | $ | 176 | ||||
Southern Resources | 222 | 213 | ||||||
Real Estate | 99 | 108 | ||||||
Manufacturing | 364 | 358 | ||||||
Other | 2 | 2 | ||||||
Other Costs and Eliminations | (26 | ) | (25 | ) | ||||
Total Costs and Expenses | $ | 888 | $ | 832 | ||||
Operating Income (Loss) | ||||||||
Northern Resources | $ | 81 | $ | 73 | ||||
Southern Resources | 136 | 169 | ||||||
Real Estate | 143 | 112 | ||||||
Manufacturing | 24 | 25 | ||||||
Other | 13 | 8 | ||||||
Other Costs and Eliminations | (37 | ) | (34 | ) | ||||
Total Operating Income | $ | 360 | $ | 353 | ||||
Plum Creek Timber Company, Inc.
Segment Data
(Unaudited)
Third Quarter 2006 | Third Quarter 2005 | |||||||
(In Millions) | ||||||||
Revenues: | ||||||||
Northern Resources | $ | 106 | $ | 90 | ||||
Southern Resources | 115 | 116 | ||||||
Real Estate | 129 | 116 | ||||||
Manufacturing | 124 | 126 | ||||||
Other | 5 | 5 | ||||||
Eliminations | (25 | ) | (26 | ) | ||||
Total Revenues | $ | 454 | $ | 427 | ||||
Operating Costs and Expenses: | ||||||||
Northern Resources | $ | 81 | $ | 65 | ||||
Southern Resources | 77 | 72 | ||||||
Real Estate | 57 | 66 | ||||||
Manufacturing | 118 | 117 | ||||||
Other | 1 | 1 | ||||||
Other Costs and Eliminations | (14 | ) | (11 | ) | ||||
Total Costs and Expenses | $ | 320 | $ | 310 | ||||
Operating Income (Loss) | ||||||||
Northern Resources | $ | 25 | $ | 25 | ||||
Southern Resources | 38 | 44 | ||||||
Real Estate | 72 | 50 | ||||||
Manufacturing | 6 | 9 | ||||||
Other | 4 | 4 | ||||||
Other Costs and Eliminations | (11 | ) | (15 | ) | ||||
Total Operating Income | $ | 134 | $ | 117 | ||||
Selected Operating Statistics
(Unaudited)
2006 | 2005 | ||||||||||||||||||||||||||||
1st Qtr | 2nd Qtr | 3rd Qtr | YTD | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | YTD | |||||||||||||||||||||
Sales Realization | Units | ||||||||||||||||||||||||||||
Southern Resources | |||||||||||||||||||||||||||||
Sawlog | $/Ton Stumpage | $ | 35 | $ | 36 | $ | 33 | $ | 35 | $ | 38 | $ | 38 | $ | 36 | $ | 37 | $ | 37 | ||||||||||
Pulpwood | $/Ton Stumpage | $ | 8 | $ | 8 | $ | 7 | $ | 8 | $ | 9 | $ | 9 | $ | 8 | $ | 7 | $ | 8 | ||||||||||
Northern Resources | |||||||||||||||||||||||||||||
Sawlog | $/Ton Delivered | $ | 77 | $ | 78 | $ | 81 | $ | 79 | $ | 76 | $ | 77 | $ | 79 | $ | 77 | $ | 77 | ||||||||||
Pulpwood | $/Ton Delivered | $ | 37 | $ | 37 | $ | 38 | $ | 37 | $ | 37 | $ | 37 | $ | 39 | $ | 38 | $ | 38 | ||||||||||
Lumber (1) | $/MBF | $ | 467 | $ | 456 | $ | 410 | $ | 445 | $ | 483 | $ | 459 | $ | 440 | $ | 435 | $ | 454 | ||||||||||
Plywood (1) | $/MSF | $ | 452 | $ | 455 | $ | 431 | $ | 446 | $ | 419 | $ | 422 | $ | 418 | $ | 444 | $ | 425 | ||||||||||
Fiberboard (1) | $/MSF | $ | 445 | $ | 480 | $ | 518 | $ | 481 | $ | 449 | $ | 458 | $ | 441 | $ | 434 | $ | 446 | ||||||||||
Sales Volume | |||||||||||||||||||||||||||||
Southern Resources | |||||||||||||||||||||||||||||
Sawlog | 1,000 Tons | 1,749 | 1,685 | 1,548 | 4,982 | 1,899 | 1,899 | 1,553 | 1,624 | 6,975 | |||||||||||||||||||
Pulpwood | 1,000 Tons | 1,642 | 1,651 | 1,917 | 5,210 | 1,592 | 1,825 | 1,690 | 1,696 | 6,803 | |||||||||||||||||||
Total Harvest | 3,391 | 3,336 | 3,465 | 10,192 | 3,491 | 3,724 | 3,243 | 3,320 | 13,778 | ||||||||||||||||||||
Northern Resources | |||||||||||||||||||||||||||||
Sawlog | 1,000 Tons | 1,151 | 877 | 954 | 2,982 | 906 | 774 | 898 | 1,011 | 3,589 | |||||||||||||||||||
Pulpwood | 1,000 Tons | 766 | 517 | 734 | 2,017 | 499 | 319 | 467 | 529 | 1,814 | |||||||||||||||||||
Total Harvest | 1,917 | 1,394 | 1,688 | 4,999 | 1,405 | 1,093 | 1,365 | 1,540 | 5,403 | ||||||||||||||||||||
Lumber | MBF | 99,367 | 97,059 | 93,925 | 290,351 | 102,857 | 105,028 | 103,099 | 96,003 | 406,987 | |||||||||||||||||||
Plywood | MSF | 75,769 | 71,269 | 70,109 | 217,147 | 75,483 | 75,235 | 76,692 | 71,115 | 298,525 | |||||||||||||||||||
Fiberboard | MSF | 69,076 | 70,411 | 63,698 | 203,185 | 61,806 | 61,843 | 62,231 | 62,407 | 248,287 |
(1) | Represents prices at mill level. |
Plum Creek Timber Company, Inc.
Land Sale Statistics
(Unaudited)
2006 | 2005 | |||||||||||||||||||||||||||
1st Qtr | 2nd Qtr | 3rd Qtr | YTD | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | YTD | ||||||||||||||||||||
Acres Sold | ||||||||||||||||||||||||||||
Small Non-strategic | 15,050 | 11,765 | 19,040 | 45,855 | 18,525 | 13,315 | 85,610 | 30,750 | 148,200 | |||||||||||||||||||
Large Non-strategic | — | — | — | — | — | 625 | * | — | 39,375 | 40,000 | ||||||||||||||||||
Conservation | 1,815 | 2,185 | 4,600 | 8,600 | 8,650 | 450 | 11,600 | 1,900 | 22,600 | |||||||||||||||||||
HBU/Recreation | 3,860 | 7,225 | 7,875 | 18,960 | 9,100 | 4,510 | 5,620 | 1,770 | 21,000 | |||||||||||||||||||
Development Properties | 1,075 | 645 | 1,970 | 3,690 | 20 | 140 | 20 | 20 | 200 | |||||||||||||||||||
Conservation Easements | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | |||||||||||||||||||
21,800 | 21,820 | 33,485 | 77,105 | 36,295 | 19,040 | 102,850 | 73,815 | 232,000 | ||||||||||||||||||||
Price per Acre | ||||||||||||||||||||||||||||
Small Non-strategic | $ | 1,465 | $ | 1,270 | $ | 1,765 | $ | 1,540 | $ | 1,225 | $ | 1,425 | $ | 1,050 | $ | 905 | $ | 1,075 | ||||||||||
Large Non-strategic | — | — | — | — | — | $ | 1,820 | — | $ | 763 | $ | 780 | ||||||||||||||||
Conservation | $ | 1,475 | $ | 1,500 | $ | 3,865 | $ | 2,760 | $ | 1,550 | $ | 3,225 | $ | 760 | $ | 1,225 | $ | 1,151 | ||||||||||
HBU/Recreation | $ | 4,960 | $ | 4,140 | $ | 3,775 | $ | 4,155 | $ | 2,600 | $ | 2,550 | $ | 3,030 | $ | 3,905 | $ | 2,814 | ||||||||||
Development Properties | $ | 8,595 | $ | 5,295 | $ | 21,950 | $ | 15,148 | $ | 23,500 | $ | 13,785 | $ | 14,300 | $ | 10,700 | $ | 14,500 | ||||||||||
Conservation Easements | $ | 1,300 | — | $ | 605 | $ | 885 | $ | 427 | — | — | $ | 490 | $ | 450 | |||||||||||||
Revenue, ($ millions) | ||||||||||||||||||||||||||||
Small Non-strategic | $ | 22 | $ | 15 | $ | 33 | $ | 70 | $ | 23 | $ | 19 | $ | 90 | $ | 28 | $ | 160 | ||||||||||
Large Non-strategic | — | — | — | — | — | $ | 1 | — | $ | 30 | $ | 31 | ||||||||||||||||
Conservation | $ | 3 | $ | 3 | $ | 18 | $ | 24 | $ | 13 | $ | 2 | $ | 9 | $ | 2 | $ | 26 | ||||||||||
HBU/Recreation | $ | 19 | $ | 30 | $ | 30 | $ | 79 | $ | 24 | $ | 11 | $ | 17 | $ | 7 | $ | 59 | ||||||||||
Development Properties | $ | 9 | $ | 4 | $ | 43 | $ | 56 | — | $ | 3 | — | — | $ | 3 | |||||||||||||
Conservation Easements | $ | 8 | — | $ | 5 | $ | 13 | $ | 8 | — | — | $ | 5 | $ | 13 | |||||||||||||
$ | 61 | $ | 52 | $ | 129 | $ | 242 | $ | 68 | $ | 36 | $ | 116 | $ | 72 | $ | 292 | |||||||||||
Basis of Real Estate Sold | $ | 10 | $ | 13 | $ | 43 | $ | 66 | $ | 18 | $ | 10 | $ | 54 | $ | 42 | $ | 124 | ||||||||||
($ millions) |
* | Represents the completion of the sale of our Pennsylvania properties. Initial sale was in 2004. |