Plum Creek Timber (PCL) 8-K Plum Creek Timber Company, Inc. Reports Results for Second Quarter 2011

Exhibit 99.2

PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

	Six Months Ended June 30,
(In Millions, Except Per Share Amounts)	2011		2010
REVENUES:
Timber	$	267	$	284
Real Estate		141		142
Manufacturing		141		138
Other		10		11
Total Revenues		559		575
COSTSAND EXPENSES:
Cost of Goods Sold:
Timber		208		209
Real Estate		49		51
Manufacturing		128		122
Other		1		1
Total Cost of Goods Sold		386		383
Selling, General and Administrative		53		50
Total Costs and Expenses		439		433
Other Operating Income (Expense), net		3		9
Operating Income		123		151
Equity Earnings from Timberland Venture		30		29
Interest Expense, net:
Interest Expense (Debt Obligations to Unrelated Parties)		41		39
Interest Expense (Note Payable to Timberland Venture)		29		29
Total Interest Expense, net		70		68
Income before Income Taxes		83		112
Provision for Income Taxes		1		1
Income from Continuing Operations		82		111
Gain on Sale of Properties, net of tax		—		11
Net Income	$	82	$	122
PER SHARE AMOUNTS:
Income from Continuing Operations - Basic	$	0.51	$	0.68
Income from Continuing Operations - Diluted	$	0.50	$	0.68
Net Income per Share - Basic	$	0.51	$	0.75
Net Income per Share - Diluted	$	0.50	$	0.75
Weighted-Average Number of Shares Outstanding
- Basic		161.9		162.6
- Diluted		162.2		162.8

PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

	Quarter Ended June 30,
(In Millions, Except Per Share Amounts)	2011		2010
REVENUES:
Timber	$	126	$	133
Real Estate		79		43
Manufacturing		74		78
Other		5		4
Total Revenues		284		258
COSTSAND EXPENSES:
Cost of Goods Sold:
Timber		101		100
Real Estate		27		16
Manufacturing		67		68
Other		1		1
Total Cost of Goods Sold		196		185
Selling, General and Administrative		25		21
Total Costs and Expenses		221		206
Other Operating Income (Expense), net		—		4
Operating Income		63		56
Equity Earnings from Timberland Venture		16		15
Interest Expense, net:
Interest Expense (Debt Obligations to Unrelated Parties)		20		19
Interest Expense (Note Payable to Timberland Venture)		15		15
Total Interest Expense, net		35		34
Income before Income Taxes		44		37
Provision for Income Taxes		—		2
Net Income	$	44	$	35
PER SHARE AMOUNTS:
Net Income per Share - Basic	$	0.27	$	0.21
Net Income per Share - Diluted	$	0.27	$	0.21
Weighted-Average Number of Shares Outstanding
- Basic		162.0		162.3
- Diluted		162.3		162.5

PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

		00000000			00000000
(In Millions, Except Per Share Amounts)	June 30, 2011			December 31, 2010
ASSETS
Current Assets:
Cash and Cash Equivalents	$	253		$	252
Accounts Receivable		33			21
Like-Kind Exchange Funds Held in Escrow		35			—
Inventories		43			49
Deferred Tax Asset		7			7
Assets Held for Sale		39			57
Other Current Assets		16			24
		426			410
Timber and Timberlands, net		3,383			3,405
Property, Plant and Equipment, net		142			146
Equity Investment in Timberland Venture		203			201
Deferred Tax Asset		6			10
Investment in Grantor Trusts (at Fair Value)		38			35
Other Assets		42			44
Total Assets	$	4,240		$	4,251
LIABILITIES
Current Liabilities:
Current Portion of Long-Term Debt	$	395		$	94
Line of Credit		227			166
Accounts Payable		31			25
Interest Payable		26			23
Wages Payable		12			23
Taxes Payable		14			12
Deferred Revenue		36			25
Other Current Liabilities		8			7
		749			375
Long-Term Debt		1,293			1,643
Note Payable to Timberland Venture		783			783
Other Liabilities		81			76
Total Liabilities		2,906			2,877
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) – 162.0 at June 30, 2011 and 161.6 at December 31, 2010		2			2
Additional Paid-In Capital		2,256			2,243
Retained Earnings (Accumulated Deficit)		(3	)		51
Treasury Stock, at Cost, Common Shares – 26.2 at June 30, 2011 and 26.2 at December 31, 2010		(912	)		(911	)
Accumulated Other Comprehensive Income (Loss)		(9	)		(11	)
Total Stockholders’ Equity		1,334			1,374
Total Liabilities and Stockholders’ Equity	$	4,240		$	4,251

PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

		00000000			00000000
	Six Months Ended June 30,
(In Millions)	2011			2010
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	$	82		$	122
Adjustments to Reconcile Net Income to Net Cash Provided By Operating Activities:
Depreciation, Depletion and Amortization		44			48
Basis of Real Estate Sold		43			43
Equity Earnings from Timberland Venture		(30	)		(29	)
Distributions from Timberland Venture		28			28
Deferred Income Taxes		4			1
Gain on Sale of Properties and Other Assets		—			(13	)
Deferred Revenue from Long-Term Gas Leases (Net of Amortization)		12			6
Working Capital Changes Impacting Cash Flow:
Like-Kind Exchange Funds		(35	)		—
Other Working Capital Changes		4			(7	)
Other		5			8
Net Cash Provided By Operating Activities		157			207
CASH FLOWS FROM INVESTING ACTIVITIES
Capital Expenditures (Excluding Timberland Acquisitions)		(28	)		(31	)
Timberlands and Minerals Acquired		(12	)		—
Proceeds from Sale of Properties and Other Assets		—			13
Net Cash Used In Investing Activities		(40	)		(18	)
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends		(136	)		(136	)
Borrowings on Line of Credit		555			1,137
Repayments on Line of Credit		(494	)		(1,137	)
Principal Payments and Retirement of Long-Term Debt		(49	)		(53	)
Proceeds from Stock Option Exercises		9			2
Acquisition of Treasury Stock		(1	)		(51	)
Net Cash Used In Financing Activities		(116	)		(238	)
Increase (Decrease) In Cash and Cash Equivalents		1			(49	)
Cash and Cash Equivalents:
Beginning of Period		252			299
End of Period	$	253		$	250

PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Quarter Ended June 30,
(In Millions)	2011			2010
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	$	44		$	35
Adjustments to Reconcile Net Income to Net Cash Provided By Operating Activities:
Depreciation, Depletion and Amortization		22			24
Basis of Real Estate Sold		24			11
Equity Earnings from Timberland Venture		(16	)		(15	)
Deferred Income Taxes		1			—
Gain on Sale of Properties and Other Assets		—			(2	)
Deferred Revenue from Long-Term Gas Leases (Net of Amortization)		5			(2	)
Working Capital Changes Impacting Cash Flow:
Like-Kind Exchange Funds		(35	)		—
Other Working Capital Changes		34			25
Other		2			2
Net Cash Provided By Operating Activities		81			78
CASH FLOWS FROM INVESTING ACTIVITIES
Capital Expenditures (Excluding Timberland Acquisitions)		(16	)		(18	)
Timberlands and Minerals Acquired		(12	)		—
Proceeds from Sale of Properties and Other Assets		—			2
Net Cash Used In Investing Activities		(28	)		(16	)
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends		(68	)		(68	)
Borrowings on Line of Credit		310			569
Repayments on Line of Credit		(298	)		(569	)
Proceeds from Stock Option Exercises		2			2
Acquisition of Treasury Stock		—			(50	)
Net Cash Used In Financing Activities		(54	)		(116	)
Increase (Decrease) In Cash and Cash Equivalents		(1	)		(54	)
Cash and Cash Equivalents:
Beginning of Period		254			304
End of Period	$	253		$	250

Plum Creek Timber Company, Inc.

Segment Data

(Unaudited)

	Six Months Ended June 30,
(In Millions)	2011			2010
Revenues:
Northern Resources	$	99		$	105
Southern Resources		173			187
Real Estate		141			142
Manufacturing		141			138
Other		10			11
Eliminations		(5	)		(8	)
Total Revenues	$	559		$	575
Operating Income (Loss):
Northern Resources	$	10		$	7
Southern Resources		34			54
Real Estate		88			88
Manufacturing		9			14
Other(A)		11			15
Other Costs and Eliminations, net		(29	)		(27	)
Total Operating Income	$	123		$	151

(A) During the first quarter of 2011, the company received a payment of $2 million for the settlement of a dispute that related to certain mineral rights. During the first quarter of 2010, the company agreed to terminate a land lease, accounted for as an operating lease, for consideration of $5 million from the lessor. The consideration was primarily for the release of mineral rights. These amounts are reported as Other Operating Gain/(Loss) in our Other Segment and are included in Other Operating Income (Expense), net in the Consolidated Statements of Income.

Plum Creek Timber Company, Inc.

Segment Data

(Unaudited)

	Quarter Ended June 30,
(In Millions)	2011			2010
Revenues:
Northern Resources	$	44		$	46
Southern Resources		84			89
Real Estate		79			43
Manufacturing		74			78
Other		5			4
Eliminations		(2	)		(2	)
Total Revenues	$	284		$	258
Operating Income (Loss):
Northern Resources	$	3		$	3
Southern Resources		15			24
Real Estate		50			26
Manufacturing		5			10
Other		4			4
Other Costs and Eliminations, net		(14	)		(11	)
Total Operating Income	$	63		$	56

Plum Creek Timber Company, Inc

Selected Operating Statistics

(Unaudited)

		2011
		1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		YTD
Sales Realization	Units
Southern Resources
Sawlog	$/Ton Stumpage	$	20	$	19					$	19
Pulpwood	$/Ton Stumpage	$	10	$	9					$	9
Northern Resources
Sawlog	$/Ton Delivered	$	69	$	72					$	70
Pulpwood	$/Ton Delivered	$	40	$	40					$	40
Lumber (1)	$/MBF	$	533	$	529					$	531
Plywood(1)	$/MSF	$	371	$	382					$	377
Fiberboard(1)	$/MSF	$	608	$	608					$	608
Sales Volume
Southern Resources
Sawlog	1,000 Tons		1,286		1,126						2,412
Pulpwood	1,000 Tons		1,494		1,592						3,086
Total Harvest			2,780		2,718		—		—		5,498
Northern Resources
Sawlog	1,000 Tons		506		471						977
Pulpwood	1,000 Tons		478		244						722
Total Harvest			984		715		—		—		1,699
Lumber	MBF		29,250		29,654						58,904
Plywood	MSF		44,156		44,842						88,998
Fiberboard	MSF		40,690		43,070						83,760
		2010
		1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		YTD
Sales Realization	Units
Southern Resources
Sawlog	$/Ton Stumpage	$	23	$	23	$	23	$	22	$	23
Pulpwood	$/Ton Stumpage	$	13	$	12	$	11	$	10	$	12
Northern Resources
Sawlog	$/Ton Delivered	$	59	$	66	$	66	$	62	$	63
Pulpwood	$/Ton Delivered	$	38	$	38	$	39	$	39	$	39
Lumber (1)	$/MBF	$	501	$	522	$	490	$	514	$	507
Plywood(1)	$/MSF	$	352	$	397	$	388	$	374	$	378
Fiberboard(1)	$/MSF	$	588	$	607	$	629	$	598	$	606
Sales Volume
Southern Resources
Sawlog	1,000 Tons		1,274		1,122		1,209		1,416		5,021
Pulpwood	1,000 Tons		1,526		1,448		1,674		1,798		6,446
Total Harvest			2,800		2,570		2,883		3,214		11,467
Northern Resources
Sawlog	1,000 Tons		627		484		537		486		2,134
Pulpwood	1,000 Tons		527		348		517		431		1,823
Total Harvest			1,154		832		1,054		917		3,957
Lumber	MBF		28,791		30,813		29,305		27,181		116,090
Plywood	MSF		45,104		47,002		44,223		36,387		172,716
Fiberboard	MSF		35,347		50,010		39,394		32,266		157,017

(1) Represents prices at mill level.

Plum Creek Timber Company, Inc.

Land Sale Statistics

(Unaudited)

	2011
	1st Qtr (1)		2nd Qtr (2)		3rd Qtr		4th Qtr		YTD
Acres Sold
Small Non-strategic		2,560		2,695						5,255
Large Non-strategic		30,295		—						30,295
Conservation		335		59,425						59,760
HBU/Recreation		7,795		6,320						14,115
Development Properties		—		—						—
Conservation Easements		n/a		n/a						n/a
		40,985		68,440						109,425
Price per Acre
Small Non-strategic	$	1,015	$	1,125					$	1,070
Large Non-strategic	$	1,405	$	—					$	1,405
Conservation	$	1,685	$	1,050					$	1,055
HBU/Recreation	$	2,100	$	2,060					$	2,080
Development Properties	$	—	$	—					$	—
Conservation Easements	$	—	$	—					$	—
Revenue, ($ millions)
Small Non-strategic	$	2	$	4					$	6
Large Non-strategic	$	43	$	—					$	43
Conservation	$	1	$	62					$	63
HBU/Recreation	$	16	$	13					$	29
Development Properties	$	—	$	—					$	—
Conservation Easements	$	—	$	—					$	—
	$	62	$	79					$	141
Basis of Real Estate Sold(5)	$	19	$	24					$	43
	2010
	1st Qtr (3)		2nd Qtr		3rd Qtr		4th Qtr (4)		YTD
Acres Sold
Small Non-strategic		29,640		1,950		10,270		21,375		63,235
Large Non-strategic		24,310		—		—		—		24,310
Conservation		35,120		215		2,870		77,900		116,105
HBU/Recreation		9,080		18,175		9,870		16,140		53,265
Development Properties		730		60		—		55		845
Conservation Easements		n/a		n/a		n/a		n/a		n/a
		98,880		20,400		23,010		115,470		257,760
Price per Acre
Small Non-strategic	$	885	$	1,120	$	1,025	$	1,045	$	970
Large Non-strategic	$	1,320	$	—	$	—	$	—	$	1,320
Conservation	$	545	$	1,450	$	1,865	$	1,245	$	1,050
HBU/Recreation	$	2,125	$	2,210	$	2,335	$	1,950	$	2,140
Development Properties	$	3,050	$	5,985	$	—	$	5,535	$	3,415
Conservation Easements	$	—	$	—	$	—	$	455	$	455
Revenue, ($ millions)
Small Non-strategic	$	26	$	2	$	11	$	22	$	61
Large Non-strategic	$	32	$	—	$	—	$	—	$	32
Conservation	$	19	$	—	$	5	$	98	$	122
HBU/Recreation	$	19	$	41	$	23	$	31	$	114
Development Properties	$	3	$	—	$	—	$	—	$	3
Conservation Easements	$	—	$	—	$	—	$	4	$	4
	$	99	$	43	$	39	$	155	$	336
Basis of Real Estate Sold(5)	$	32	$	11	$	14	$	75	$	132

Plum Creek Timber Company, Inc.

Notes to Land Sale Statistics

(Unaudited)

(1) During the first quarter of 2011, the company sold 30,300 acres of Large Non-strategic lands located in Mississippi for $42.6 million.

(2) During the second quarter of 2011, the company’s Conservation sales consisted primarily of 26,800 acres in Arkansas and Louisiana and 31,500 acres in Florida.

(3) 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.

(4) During the fourth quarter of 2010, the company sold 69,600 acres in Montana to a conservation buyer for $88.8 million. The sale is presented as a Conservation sale. The transaction included 60,900 acres of Conservation property and 8,700 acres of HBU property.

(5) Includes $13 million in the first quarter of 2011 from a 30,300 acre Large Non-strategic sale in Mississippi, $52 million in the fourth quarter of 2010 from a 69,600 acre Conservation sale in Montana, and $7 million in the first quarter of 2010 for a 24,000 acre Large Non-strategic sale in Louisiana.

Plum Creek Timber Company, Inc.

Debt Maturities Schedule

June 30, 2011

(Unaudited)

	Borrowings
	Principal		Weighted Avg. Interest Rate
Quarterly Maturities through 2012:
4th Qtr 2011	$	46		7.712	%	(1	)
2nd Qtr 2012	$	350		—	%	(2	)
4th Qtr 2012	$	3		8.050	%
Annual Maturities through 2014:
2013	$	250		6.663	%	(3	)
2014	$	3		8.050	%

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

(2) Represents the company’s term credit agreement. As of June 30, 2011, the interest rate is based on LIBOR plus 0.375%.

(3) 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.