Plum Creek Timber (PCL) 8-K Plum Creek Timber Company, Inc. Reports Results for Second Quarter 2010

Exhibit 99.2

PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

	Six Months Ended
	June 30, 2010		June 30, 2009
	(In Millions, Except Per Share Amounts)
Revenues:
Timber	$	284	$	262
Real Estate		142		346
Manufacturing		138		124
Other		11		10
Total Revenues		575		742
Costs and Expenses:
Cost of Goods Sold:
Timber		209		206
Real Estate		51		128
Manufacturing		122		140
Other		1		1
Total Cost of Goods Sold		383		475
Selling, General and Administrative		50		55
Total Costs and Expenses		433		530
Other Operating Income (Expense), net		9		—
Operating Income		151		212
Equity Earnings from Timberland Venture		29		29
Interest Expense, net:
Interest Expense (Debt Obligations to Unrelated Parties)		39		47
Interest Expense (Note Payable to Timberland Venture)		29		29
Total Interest Expense, net		68		76
Gain on Extinguishment of Debt		—		1
Income before Income Taxes		112		166
Provision (Benefit) for Income Taxes		1		(23	)
Income From Continuing Operations		111		189
Gain on Sale of Properties, net of tax		11		—
Net Income	$	122	$	189
Per Share Amounts:
Income From Continuing Operations - Basic	$	0.68	$	1.15
Income From Continuing Operations - Diluted	$	0.68	$	1.15
Net Income per Share - Basic	$	0.75	$	1.15
Net Income per Share - Diluted	$	0.75	$	1.15
Weighted Average Number of Shares Outstanding
- Basic		162.6		163.8
- Diluted		162.8		163.9

PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

	Quarter Ended
	June 30, 2010		June 30, 2009
	(In Millions, Except Per Share Amounts)
Revenues:
Timber	$	133	$	123
Real Estate		43		78
Manufacturing		78		66
Other		4		5
Total Revenues		258		272
Costs and Expenses:
Cost of Goods Sold:
Timber		100		98
Real Estate		16		33
Manufacturing		68		64
Other		1		1
Total Cost of Goods Sold		185		196
Selling, General and Administrative		21		23
Total Costs and Expenses		206		219
Other Operating Income (Expense), net		4		—
Operating Income		56		53
Equity Earnings from Timberland Venture		15		14
Interest Expense, net:
Interest Expense (Debt Obligations to Unrelated Parties)		19		23
Interest Expense (Note Payable to Timberland Venture)		15		15
Total Interest Expense, net		34		38
Income before Income Taxes		37		29
Provision (Benefit) for Income Taxes		2		(3	)
Net Income	$	35	$	32
Per Share Amounts:
Net Income per Share - Basic	$	0.21	$	0.19
Net Income per Share - Diluted	$	0.21	$	0.19
Weighted Average Number of Shares Outstanding
- Basic		162.3		162.8
- Diluted		162.5		162.9

PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	June 30, 2010			December 31, 2009
	(In Millions, Except Per Share Amounts)
ASSETS
Current Assets:
Cash and Cash Equivalents	$	250		$	299
Accounts Receivable		35			24
Taxes Receivable		1			15
Inventories		45			46
Deferred Tax Asset		7			6
Assets Held for Sale		98			115
Other Current Assets		21			14
		457			519
Timber and Timberlands, net		3,455			3,487
Property, Plant and Equipment, net		149			156
Equity Investment in Timberland Venture		202			201
Deferred Tax Asset		12			14
Investment in Grantor Trusts (at Fair Value)		32			33
Other Assets		36			38
			��
Total Assets	$	4,343		$	4,448
LIABILITIES
Current Liabilities:
Current Portion of Long-Term Debt	$	51		$	55
Line of Credit		320			—
Accounts Payable		30			32
Interest Payable		24			25
Wages Payable		14			20
Taxes Payable		16			14
Deferred Revenue		31			16
Other Current Liabilities		12			21
		498			183
Long-Term Debt		1,577			1,625
Line of Credit		—			320
Note Payable to Timberland Venture		783			783
Other Liabilities		79			71
Total Liabilities		2,937			2,982
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) - 161.6 at June 30, 2010, and 162.8 at December 31, 2009		2			2
Additional Paid-In Capital		2,239			2,233
Retained Earnings		96			110
Treasury Stock, at cost, Common Shares - 26.2 at June 30, 2010, and 24.8 at December 31, 2009		(911	)		(860	)
Accumulated Other Comprehensive Income (Loss)		(20	)		(19	)
Total Stockholders’ Equity		1,406			1,466
Total Liabilities and Stockholders’ Equity	$	4,343		$	4,448

PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Six Months Ended
	June 30, 2010			June 30, 2009
	(In Millions)
Cash Flows From Operating Activities:
Net Income	$	122		$	189
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Depreciation, Depletion and Amortization (includes $10 Lumber Impairment Loss in 2009)		48			57
Basis of Real Estate Sold		43			118
Equity Earnings from Timberland Venture		(29	)		(29	)
Distributions from Timberland Venture		28			25
Deferred Income Taxes		1			(21	)
Gain on Sales of Properties and Other Assets		(13	)		—
Deferred Revenue from Long-Term Gas Leases (Net of Amortization)		6			(4	)
Working Capital Changes Impacting Cash Flow:
Like-Kind Exchange Funds		—			48
Income Tax Receivable		14			17
Other Working Capital Changes		(21	)		(8	)
Other		8			2
Net Cash Provided By Operating Activities		207			394
Cash Flows From Investing Activities:
Capital Expenditures (Excluding Timberland Acquisitions)		(31	)		(28	)
Proceeds from Sales of Properties and Other Assets		13			—
Net Cash Used In Investing Activities		(18	)		(28	)
Cash Flows From Financing Activities:
Dividends		(136	)		(138	)
Borrowings on Line of Credit		1,137			431
Repayments on Line of Credit		(1,137	)		(456	)
Principal Payments and Retirement of Long-Term Debt		(53	)		(138	)
Proceeds from Stock Option Exercises		2			—
Acquisition of Treasury Stock		(51	)		(87	)
Net Cash Used In Financing Activities		(238	)		(388	)
Increase (Decrease) In Cash and Cash Equivalents		(49	)		(22	)
Cash and Cash Equivalents:
Beginning of Period		299			369
End of Period	$	250		$	347

PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Quarter Ended
	June 30, 2010			June 30, 2009
	(In Millions)
Cash Flows From Operating Activities:
Net Income	$	35		$	32
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Depreciation, Depletion and Amortization		24			24
Basis of Real Estate Sold		11			29
Equity Earnings from Timberland Venture		(15	)		(14	)
Deferred Income Taxes		—			(4	)
Gain on Sales of Properties and Other Assets		(2	)		—
Deferred Revenue from Long-Term Gas Leases (Net of Amortization)		(2	)		(2	)
Working Capital Changes Impacting Cash Flow:
Income Tax Receivable		14			18
Other Working Capital Changes		11			25
Other		2			2
Net Cash Provided By Operating Activities		78			110
Cash Flows From Investing Activities:
Capital Expenditures (Excluding Timberland Acquisitions)		(18	)		(11	)
Proceeds from Sales of Properties and Other Assets		2			—
Net Cash Used In Investing Activities		(16	)		(11	)
Cash Flows From Financing Activities:
Dividends		(68	)		(69	)
Borrowings on Line of Credit		569			206
Repayments on Line of Credit		(569	)		(211	)
Principal Payments and Retirement of Long-Term Debt		—			(33	)
Proceeds from Stock Option Exercises		2			—
Acquisition of Treasury Stock		(50	)		—
Net Cash Used In Financing Activities		(116	)		(107	)
Increase (Decrease) In Cash and Cash Equivalents		(54	)		(8	)
Cash and Cash Equivalents:
Beginning of Period		304			355
End of Period	$	250		$	347

Plum Creek Timber Company, Inc.

Segment Data

(Unaudited)

	Six Months 2010			Six Months 2009
	(In Millions)
Revenues:
Northern Resources	$	105		$	92
Southern Resources		187			172
Real Estate		142			346
Manufacturing		138			124
Other		11			10
Eliminations		(8	)		(2	)
Total Revenues	$	575		$	742
Operating Income (Loss)
Northern Resources	$	7		$	(5	)
Southern Resources		54			43
Real Estate		88			214
Manufacturing		14			(22	)
Other(A)		15			9
Other Costs and Eliminations, net		(27	)		(27	)
Total Operating Income	$	151		$	212

^(A) During the first quarter of 2010, the company agreed to terminate a land lease for consideration of $5 million from the lessor. The land lease had been accounted for as an operating lease. The $5 million consideration is reported as Other Operating Gain/(Loss) in our Other Segment since the consideration was primarily for the release of mineral rights. The $5 million is included in Other Operating Income (Expense), net in the Consolidated Statements of Income.

Plum Creek Timber Company, Inc.

Segment Data

(Unaudited)

	Second Quarter 2010			Second Quarter 2009
	(In Millions)
Revenues:
Northern Resources	$	46		$	35
Southern Resources		89			89
Real Estate		43			78
Manufacturing		78			66
Other		4			5
Eliminations		(2	)		(1	)
Total Revenues	$	258		$	272
Operating Income (Loss)
Northern Resources	$	3		$	(7	)
Southern Resources		24			23
Real Estate		26			44
Manufacturing		10			—
Other		4			4
Other Costs and Eliminations, net		(11	)		(11	)
Total Operating Income	$	56		$	53

Plum Creek Timber Company, Inc

Selected Operating Statistics

(Unaudited)

		2010						2009
		1st Qtr		2nd Qtr		YTD		1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		YTD
	Units
Sales Realization
Southern Resources
Sawlog	$/Ton Stumpage	$	23	$	23	$	23	$	24	$	22	$	22	$	21	$	22
Pulpwood	$/Ton Stumpage	$	13	$	12	$	13	$	11	$	9	$	9	$	10	$	10
Northern Resources
Sawlog	$/Ton Delivered	$	59	$	66	$	62	$	57	$	50	$	56	$	56	$	55
Pulpwood	$/Ton Delivered	$	38	$	38	$	38	$	43	$	38	$	38	$	38	$	40
Lumber (1)	$/MBF	$	501	$	522	$	512	$	374	$	340	$	448	$	477	$	397
Plywood (1)	$/MSF	$	352	$	397	$	375	$	362	$	353	$	361	$	352	$	357
Fiberboard (1)	$/MSF	$	588	$	607	$	599	$	601	$	593	$	596	$	599	$	597
Sales Volume
Southern Resources
Sawlog	1,000 Tons		1,274		1,122		2,396		942		1,217		1,250		993		4,402
Pulpwood	1,000 Tons		1,526		1,448		2,974		1,487		1,849		2,014		1,649		6,999
Total Harvest			2,800		2,570		5,370		2,429		3,066		3,264		2,642		11,401
Northern Resources
Sawlog	1,000 Tons		627		484		1,111		525		371		632		609		2,137
Pulpwood	1,000 Tons		527		348		875		613		397		691		567		2,268
Total Harvest			1,154		832		1,986		1,138		768		1,323		1,176		4,405
Lumber	MBF		28,791		30,813		59,604		35,123		60,371		40,590		28,428		164,512
Plywood	MSF		45,104		47,002		92,106		35,439		40,729		41,479		37,271		154,918
Fiberboard	MSF		35,347		50,010		85,357		34,044		32,802		34,282		30,964		132,092

(1) Represents prices at mill level.

Plum Creek Timber Company, Inc.

Land Sale Statistics

(Unaudited)

	2010						2009
	1st Qtr(1)		2nd Qtr		YTD		1st Qtr(2)		2nd Qtr		3rd Qtr		4th Qtr		YTD
Acres Sold
Small Non-strategic		29,640		1,950		31,590		1,665		9,840		5,545		2,570		19,620
Large Non-strategic		24,310		—		24,310		—		59,160		—		—		59,160
Conservation		35,120		215		35,335		113,355		3,895		43,695		4,910		165,855
HBU/Recreation		9,080		18,175		27,255		2,180		10,955		10,440		26,700		50,275
Development Properties		730		60		790		1,485		25		515		35		2,060
Conservation Easements		n/a		n/a		n/a		n/a		n/a		n/a		n/a		n/a
		98,880		20,400		119,280		118,685		83,875		60,195		34,215		296,970
Price per Acre
Small Non-strategic	$	885	$	1,120	$	900	$	1,330	$	900	$	970	$	855	$	950
Large Non-strategic	$	1,320		—	$	1,320		—	$	650		—		—	$	650
Conservation	$	545	$	1,450	$	550	$	2,225	$	1,705	$	350	$	1,280	$	1,690
HBU/Recreation	$	2,125	$	2,210	$	2,185	$	3,420	$	2,200	$	2,115	$	2,200	$	2,235
Development Properties	$	3,050	$	5,985	$	3,270	$	4,075	$	13,650	$	9,190	$	7,485	$	5,520
Conservation Easements		—		—		—		—		—		—		—		—
Revenue, ($ millions)
Small Non-strategic	$	26	$	2	$	28	$	2	$	9	$	5	$	2	$	19
Large Non-strategic	$	32		—	$	32		—	$	38		—		—	$	38
Conservation	$	19		—	$	19	$	252	$	7	$	15	$	6	$	280
HBU/Recreation	$	19	$	40	$	59	$	7	$	24	$	22	$	59	$	112
Development Properties	$	2		—	$	3	$	6		—	$	5		—	$	12
Conservation Easements		—		—		—		—		—		—		—		—
	$	99	$	43	$	142	$	268	$	78	$	48	$	67	$	461
Revenue from Non-Cash Exchange(3)		—		—		—		—		—	$	25		—	$	25
Basis of Real Estate Sold(4)	$	32	$	11	$	43	$	89	$	29	$	21	$	16	$	155

(1) During the first quarter of 2010 the company sold 24,000 acres of Large Non-strategic lands located in Louisiana for $32 million. In addition, the company sold two larger Conservation properties totaling 35,000 acres in Wisconsin and Arkansas and an aggregation of 23,000 acres of Small Non-strategic timberlands located primarily in the Lake States region.

(2) During the 1st quarter of 2009 we sold 112,000 acres in Montana to a conservation buyer for $250 million. The sale is presented as a Conservation sale. The transaction included 56,000 acres of Conservation property, 10,000 acres of Small Non-strategic property, 45,000 acres of HBU/Recreation property, and 1,000 acres of Development property.

(3) During the 3rd quarter of 2009 we completed a non-cash exchange with the State of Washington. We relinquished 20,600 acres, in King County, in exchange for 37 parcels containing more than 6,000 acres in nine counties.

(4) Includes $7 million in the first quarter of 2010 for a 24,000 acre Large Non-strategic sale in Louisiana, $16 million in the second quarter of 2009 for a 59,000 acre Large Non-strategic sale in Wisconsin and $85 million in the first quarter of 2009 for a 112,000 acre Conservation sale in Montana.

PLUM CREEK TIMBER COMPANY, INC.

DEBT MATURITIES SCHEDULE

June 30, 2010

(UNAUDITED)

	Borrowings(1)
	Principal		Weighted Avg. Interest Rate
Quarterly Maturities through 2010:
4th Qtr 2010	$	3	8.050	%
Annual Maturities through 2014:
2011	$	308	7.732	%	(2)
2012	$	603	—		(3)
2013	$	250	6.663	%	(4)
2014	$	3	8.050	%

(1) Does not include repayments on the company’s $750 million revolving line of credit due in 2011.

(2) Principal amount composed of senior notes with principal amounts of $40 million, $3 million, $216 million and $49 million and interest rates of 7.970%, 8.050%, 7.660% and 7.830%, respectively.

(3) Includes $600 million of maturities for the company’s two term credit agreements and senior notes with principal of $3 million and an interest rate of 8.050%. The interest rate on the $350 million term credit agreement is currently based on LIBOR plus 0.45%. The interest rate on the $250 million term credit agreement is currently based on LIBOR plus 1.00%.

(4) Principal amount composed of senior notes with principal amounts of $3 million, $73 million and $174 million and interest rates of 8.050%, 7.760% and 6.180%, respectively.