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

Exhibit 99.2

PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

	Nine Months Ended
	September 30, 2010		September 30, 2009
	(In Millions, Except Per Share Amounts)
Revenues:
Timber	$	429	$	414
Real Estate		181		419
Manufacturing		208		189
Other		16		14
Total Revenues		834		1,036
Costs and Expenses:
Cost of Goods Sold:
Timber		317		326
Real Estate		69		179
Manufacturing		184		205
Other		1		1
Total Cost of Goods Sold		571		711
Selling, General and Administrative		70		75
Total Costs and Expenses		641		786
Other Operating Income (Expense), net		9		—
Operating Income		202		250
Equity Earnings from Timberland Venture		44		43
Interest Expense, net:
Interest Expense (Debt Obligations to Unrelated Parties)		59		69
Interest Expense (Note Payable to Timberland Venture)		43		43
Total Interest Expense, net		102		112
Gain on Extinguishment of Debt		—		1
Income before Income Taxes		144		182
(Benefit) Provision for Income Taxes		1		(26	)
Income From Continuing Operations		143		208
Gain on Sale of Properties, net of tax		11		—
Net Income	$	154	$	208
Per Share Amounts:
Income From Continuing Operations - Basic	$	0.88	$	1.27
Income From Continuing Operations - Diluted	$	0.88	$	1.27
Net Income per Share - Basic	$	0.95	$	1.27
Net Income per Share - Diluted	$	0.94	$	1.27
Weighted Average Number of Shares Outstanding
- Basic		162.2		163.5
- Diluted		162.5		163.6

PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

	Quarter Ended
	September 30, 2010		September 30, 2009
	(In Millions, Except Per Share Amounts)
Revenues:
Timber	$	145	$	152
Real Estate		39		73
Manufacturing		70		65
Other		5		4
Total Revenues		259		294
Costs and Expenses:
Cost of Goods Sold:
Timber		108		120
Real Estate		18		51
Manufacturing		62		65
Other		—		—
Total Cost of Goods Sold		188		236
Selling, General and Administrative		20		20
Total Costs and Expenses		208		256
Other Operating Income (Expense), net		—		—
Operating Income		51		38
Equity Earnings from Timberland Venture		15		14
Interest Expense, net:
Interest Expense (Debt Obligations to Unrelated Parties)		20		22
Interest Expense (Note Payable to Timberland Venture)		14		14
Total Interest Expense, net		34		36
Income before Income Taxes		32		16
Benefit for Income Taxes		—		(3	)
Net Income	$	32	$	19
Per Share Amounts:
Net Income per Share - Basic	$	0.20	$	0.12
Net Income per Share - Diluted	$	0.20	$	0.12
Weighted Average Number of Shares Outstanding
- Basic		161.6		162.8
- Diluted		161.8		162.9

PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	September 30, 2010			December 31, 2009
	(In Millions, Except Per Share Amounts)
ASSETS
Current Assets:
Cash and Cash Equivalents	$	267		$	299
Accounts Receivable		31			24
Taxes Receivable		1			15
Inventories		46			46
Deferred Tax Asset		7			6
Assets Held for Sale		99			115
Other Current Assets		18			14
		469			519
Timber and Timberlands, net		3,436			3,487
Property, Plant and Equipment, net		148			156
Equity Investment in Timberland Venture		189			201
Deferred Tax Asset		12			14
Investment in Grantor Trusts (at Fair Value)		32			33
Other Assets		35			38
Total Assets	$	4,321		$	4,448
LIABILITIES
Current Liabilities:
Current Portion of Long-Term Debt	$	51		$	55
Line of Credit		320			—
Accounts Payable		32			32
Interest Payable		34			25
Wages Payable		16			20
Taxes Payable		20			14
Deferred Revenue		28			16
Other Current Liabilities		10			21
		511			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		2,950			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 September 30, 2010, and 162.8 at December 31, 2009		2			2
Additional Paid-In Capital		2,241			2,233
Retained Earnings		59			110
Treasury Stock, at cost, Common Shares - 26.2 at September 30, 2010, and 24.8 at December 31, 2009		(911	)		(860	)
Accumulated Other Comprehensive Income (Loss)		(20	)		(19	)
Total Stockholders’ Equity		1,371			1,466
Total Liabilities and Stockholders’ Equity	$	4,321		$	4,448

PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Nine Months Ended
	September 30, 2010			September 30, 2009
	(In Millions)
Cash Flows From Operating Activities:
Net Income	$	154		$	208
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Depreciation, Depletion and Amortization (includes $10 Lumber Impairment Loss in 2009)		72			85
Basis of Real Estate Sold		57			139
Equity Earnings from Timberland Venture		(44	)		(43	)
Distributions from Timberland Venture		56			53
Deferred Income Taxes		1			(21	)
Gain on Sales of Properties and Other Assets		(13	)		—
Deferred Revenue from Long-Term Gas Leases (Net of Amortization)		5			(5	)
Pension Plan Contributions		(4	)		(8	)
Working Capital Changes Impacting Cash Flow:
Like-Kind Exchange Funds		—			48
Income Tax Receivable		14			17
Other Working Capital Changes		(2	)		12
Other		16			7
Net Cash Provided By Operating Activities		312			492
Cash Flows From Investing Activities:
Capital Expenditures (Excluding Timberland Acquisitions)		(51	)		(45	)
Timberlands Acquired		—			(1	)
Proceeds from Sales of Properties and Other Assets		13			1
Other		1			(1	)
Net Cash Used In Investing Activities		(37	)		(46	)
Cash Flows From Financing Activities:
Dividends		(205	)		(207	)
Borrowings on Line of Credit		1,505			695
Repayments on Line of Credit		(1,505	)		(662	)
Principal Payments and Retirement of Long-Term Debt		(53	)		(203	)
Proceeds from Stock Option Exercises		2			—
Acquisition of Treasury Stock		(51	)		(87	)
Net Cash Used In Financing Activities		(307	)		(464	)
Increase (Decrease) In Cash and Cash Equivalents		(32	)		(18	)
Cash and Cash Equivalents:
Beginning of Period		299			369
End of Period	$	267		$	351

PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Quarter Ended
	September 30, 2010			September 30, 2009
	(In Millions)
Cash Flows From Operating Activities:
Net Income	$	32		$	19
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Depreciation, Depletion and Amortization		24			28
Basis of Real Estate Sold		14			21
Equity Earnings from Timberland Venture		(15	)		(14	)
Distribution from Timberland Venture		28			28
Deferred Revenue from Long-Term Gas Leases (Net of Amortization)		(1	)		(1	)
Pension Plan Contributions		(4	)		(8	)
Working Capital Changes Impacting Cash Flow:
Other Working Capital Changes		19			20
Other		8			5
Net Cash Provided By Operating Activities		105			98
Cash Flows From Investing Activities:
Capital Expenditures (Excluding Timberland Acquisitions)		(20	)		(17	)
Timberlands Acquired		—			(1	)
Other		1			—
Net Cash Used In Investing Activities		(19	)		(18	)
Cash Flows From Financing Activities:
Dividends		(69	)		(69	)
Borrowings on Line of Credit		368			264
Repayments on Line of Credit		(368	)		(206	)
Principal Payments and Retirement of Long-Term Debt		—			(65	)
Net Cash Used In Financing Activities		(69	)		(76	)
Increase (Decrease) In Cash and Cash Equivalents		17			4
Cash and Cash Equivalents:
Beginning of Period		250			347
End of Period	$	267		$	351

Plum Creek Timber Company, Inc.

Segment Data

(Unaudited)

	Nine Months 2010			Nine Months 2009
	(In Millions)
Revenues:
Northern Resources	$	162		$	155
Southern Resources		280			266
Real Estate		181			419
Manufacturing		208			189
Other		16			14
Eliminations		(13	)		(7	)
Total Revenues	$	834		$	1,036
Operating Income (Loss)
Northern Resources	$	12		$	(2	)
Southern Resources		79			64
Real Estate		107			234
Manufacturing		21			(23	)
Other(A)		20			13
Other Costs and Eliminations, net		(37	)		(36	)
Total Operating Income	$	202		$	250

^(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)

	Third Quarter 2010			Third Quarter 2009
	(In Millions)
Revenues:
Northern Resources	$	57		$	63
Southern Resources		93			94
Real Estate		39			73
Manufacturing		70			65
Other		5			4
Eliminations		(5	)		(5	)
Total Revenues	$	259		$	294
Operating Income (Loss)
Northern Resources	$	5		$	3
Southern Resources		25			21
Real Estate		19			20
Manufacturing		7			(1	)
Other		5			4
Other Costs and Eliminations, net		(10	)		(9	)
Total Operating Income	$	51		$	38

Plum Creek Timber Company, Inc

Selected Operating Statistics

(Unaudited)

		2010								2009
		1st Qtr		2nd Qtr		3rd Qtr		YTD		1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		YTD
Sales Realization	Units
Southern Resources
Sawlog	$/Ton Stumpage	$	23	$	23	$	23	$	23	$	24	$	22	$	22	$	21	$	22
Pulpwood	$/Ton Stumpage	$	13	$	12	$	11	$	12	$	11	$	9	$	9	$	10	$	10
Northern Resources
Sawlog	$/Ton Delivered	$	59	$	66	$	66	$	63	$	57	$	50	$	56	$	56	$	55
Pulpwood	$/Ton Delivered	$	38	$	38	$	39	$	38	$	43	$	38	$	38	$	38	$	40
Lumber (1)	$/MBF	$	501	$	522	$	490	$	505	$	374	$	340	$	448	$	477	$	397
Plywood (1)	$/MSF	$	352	$	397	$	388	$	379	$	362	$	353	$	361	$	352	$	357
Fiberboard (1)	$/MSF	$	588	$	607	$	629	$	608	$	601	$	593	$	596	$	599	$	597
Sales Volume
Southern Resources
Sawlog	1,000 Tons		1,274		1,122		1,209		3,605		942		1,217		1,250		993		4,402
Pulpwood	1,000 Tons		1,526		1,448		1,674		4,648		1,487		1,849		2,014		1,649		6,999
Total Harvest			2,800		2,570		2,883		8,253		2,429		3,066		3,264		2,642		11,401
Northern Resources
Sawlog	1,000 Tons		627		484		537		1,648		525		371		632		609		2,137
Pulpwood	1,000 Tons		527		348		517		1,392		613		397		691		567		2,268
Total Harvest			1,154		832		1,054		3,040		1,138		768		1,323		1,176		4,405
Lumber	MBF		28,791		30,813		29,305		88,909		35,123		60,371		40,590		28,428		164,512
Plywood	MSF		45,104		47,002		44,223		136,329		35,439		40,729		41,479		37,271		154,918
Fiberboard	MSF		35,347		50,010		39,394		124,751		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		3rd Qtr		YTD		1st Qtr (2)		2nd Qtr		3rd Qtr		4th Qtr		YTD
Acres Sold
Small Non-strategic		29,640		1,950		10,270		41,860		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		2,870		38,205		113,355		3,895		43,695		4,910		165,855
HBU/Recreation		9,080		18,175		9,870		37,125		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		n/a
		98,880		20,400		23,010		142,290		118,685		83,875		60,195		34,215		296,970
Price per Acre
Small Non-strategic	$	885	$	1,120	$	1,025	$	930	$	1,330	$	900	$	970	$	855	$	950
Large Non-strategic	$	1,320		—		—	$	1,320		—	$	650		—		—	$	650
Conservation	$	545	$	1,450	$	1,865	$	650	$	2,225	$	1,705	$	350	$	1,280	$	1,690
HBU/Recreation	$	2,125	$	2,210	$	2,335	$	2,225	$	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	$	11	$	39	$	2	$	9	$	5	$	2	$	19
Large Non-strategic	$	32		—		—	$	32		—	$	38		—		—	$	38
Conservation	$	19		—	$	5	$	25	$	252	$	7	$	15	$	6	$	280
HBU/Recreation	$	19	$	40	$	23	$	82	$	7	$	24	$	22	$	59	$	112
Development Properties	$	2		—		—	$	3	$	6		—	$	5		—	$	12
Conservation Easements		—		—		—		—		—		—		—		—		—
	$	99	$	43	$	39	$	181	$	268	$	78	$	48	$	67	$	461
Revenue from Non-Cash Exchange (3)		—		—		—		—		—		—	$	25		—	$	25
Basis of Real Estate Sold(4)	$	32	$	11	$	14	$	57	$	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

September 30, 2010

(UNAUDITED)

	Borrowings (1)
	Principal		Weighted Avg. Interest Rate
Quarterly Maturities through 2011:
4th Qtr 2010	$	3		8.050	%
1st Qtr 2011	$	49		7.830	%
4th Qtr 2011	$	259		7.713	% (2)
Annual Maturities through 2014:
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 and $216 million and interest rates of 7.970%, 8.050% and 7.660% , 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.