SEATTLE--(BUSINESS WIRE)--April 28, 2008--Plum Creek TimberCompany, Inc. (NYSE:PCL) today announced first quarter earnings of $38million, or $0.22 per diluted share, on revenues of $363 million.Earnings for the first quarter of 2007 were $45 million, or $0.25 perdiluted share, on revenues of $369 million.

"We're focusing our activities in our best markets during thesechallenging economic conditions," said Rick Holley, president andchief executive officer. "We are serving strong demand from pulpwoodcustomers while limiting our sawlog harvest, allowing our mostvaluable timber to continue to grow during a period of reduced lumberdemand. Our Real Estate segment produced good results although twolarge transactions planned for the quarter were not completed. We'rewell positioned to continue to execute our strategies with the mostdiversified timberland holdings in the nation and a strong balancesheet. As business conditions evolve, we will continue to adjust ournear-term plans to maximize long-term value."

Review of Operations

The Northern Resources segment reported operating profit of $14million during the first quarter, down $5 million from the same periodof 2007. Lower sawlog prices and a 10 percent planned reduction inpulpwood harvest volumes were the primary reasons for the profitdecline. Lumber customers continued to curtail production in the faceof weak housing activity and, as a result, average sawlog prices were6 percent lower than the same period of last year. The harvest fromOregon timberlands acquired over the past 18 months resulted in amodest increase in the quarter's sawlog harvest compared to the sameperiod of 2007. Average pulpwood prices increased 6 percent year overyear.

Operating profit in the Southern Resources segment was $37million, compared to $46 million, during the same period of 2007.Lower lumber production throughout the South led to lower sawlogprices while strong demand for pulpwood led to significantly higherpulpwood prices. Average sawlog prices were 9 percent lower than thefirst quarter levels of 2007. As a result, the company reduced itsSouthern sawlog harvest 13 percent from the same period of last year.Average southern pulpwood prices were 17 percent higher than the sameperiod of 2007 and, as a result, the company maintained its elevatedpace of pulpwood harvest of approximately 1.9 to 2 million tons perquarter established in the second half of 2006.

The Real Estate segment reported revenue of $52 million andoperating income of $33 million from the sale of approximately 29,000acres of small, non-strategic timberlands and HBU/recreation lands.Small, non-strategic timberland values of nearly $1,200 per acre werelower than experienced during 2007. Sales of these properties weregenerally lower-quality lands than those sold in the past year.Recreation lands captured average values of approximately $2,875 peracre. While per acre values for these types of land were stable inmost regions, a greater proportion of sales came from lower-pricedregions such as Mississippi and Wisconsin when compared to the pastyear. First quarter 2007 Real Estate segment revenue was $39 millionand resulted in income of $21 million. The higher 2008 results are dueto the timing of sales.

The Manufacturing segment reported a $9 million operating lossduring the first quarter of 2008 as compared to an operating loss of$1 million reported during the first quarter of 2007. Profitability ofthe company's lumber business declined. Average lumber prices were 6percent lower than the same period of 2007. As a result, the companyreduced production and wrote down the value of its inventory by $4million. The company's plywood and medium density fiberboard (MDF)operations remained profitable. Higher average prices for thecompany's MDF products were partly offset by higher raw materialcosts.

Recent Financing

In the first quarter, the company entered into a four-year $250million term credit agreement that is priced at LIBOR plus onepercent. The facility provides financing for debt maturities comingdue over the next 12 to 18 months.

Share Repurchase

During the quarter the company repurchased approximately 1.3million shares of common stock at an average price of $40.14 pershare. As of March 31, 2008, the company had 171.1 million shares ofcommon stock outstanding and $149 million remaining in its currentshare repurchase authorization.

Outlook

Harvest levels in the Northern Resources segment are expected todecline from first quarter levels due to normal seasonal factors.Northern pulpwood and sawlog harvests are typically at their lowestlevel during the second quarter of the year as thawing spring weatherrestricts harvesting activities in the North. The Southern sawlogharvest is expected to increase modestly from the first quarter'slevel while the company plans to maintain the pace of its Southernpulpwood harvest to serve attractive markets.

Within the rural land area, the geographic mix of properties isexpected to be skewed toward lower-valued regions in 2008. Secondquarter Real Estate segment sales are expected to be between $45million and $65 million. Similar to years past, the company expectsReal Estate segment sales to be seasonally higher during the secondhalf of 2008 and it expects full-year segment sales to be between $320million and $340 million.

Manufacturing results are expected to improve during the secondquarter, as the first quarter included a $4 million lumber inventorywrite-down, while plywood and MDF are expected to remain stable.

Second quarter earnings are expected to be lower than the firstquarter, due to the seasonally lower harvest volumes in the NorthernResources segment. The company expects to report second quarterearnings between $0.13 and $0.18 per share. For the year, the companyexpects income from continuing operations between $1.05 and $1.30 pershare.

"Well-managed timberlands are unique assets with lasting value.Our diverse asset base and strong balance sheet provide theoperational and financial flexibility to make the correct valuedecisions in these challenging markets," continued Holley.

"The value of investment-grade timberlands continues to beconfirmed by timberland investors worldwide. In such an environment,both experience and discipline are absolutely essential to effectivecapital allocation. We'll maintain our historic discipline with theultimate goal of maximizing the per share value of the company,"Holley concluded.

Earnings Conference Call and Supplemental Information

Plum Creek will hold a conference call today, April 28, at 5 p.m.EDT (2 p.m. PDT). A live webcast of the conference call may beaccessed through Plum Creek's Internet site at www.plumcreek.com byclicking on the "Investors" link.

Investors without internet access should dial 1-800-572-9852 atleast 10 minutes prior to the start, referencing Plum Creek'searnings. Those wishing to access the call from outside the UnitedStates/Canada should dial 1-706-645-9676, also referencing PlumCreek's earnings. Replay of the call will be available for 48 hoursafter completion of the live call and can be accessed at1-800-642-1687 or 1-706-645-9291 (international calls), using the code23089517.

Supplemental financial information for Plum Creek operations,including statistical data, is available in the "Investors"information section of Plum Creek's Web site at www.plumcreek.com.

Plum Creek is the largest and most geographically diverse privatelandowner in the nation with approximately 8 million acres oftimberlands in major timber producing regions of the United States and10 wood products manufacturing facilities in the Northwest.

Forward-Looking Statements

This press release contains forward-looking statements within themeaning of the Private Litigation Reform Act of 1995 as amended. Someof these forward-looking statements can be identified by the use offorward-looking words such as "believes," "expects," "may," "will,""should," "seek," "approximately," "intends," "plans," "estimates," or"anticipates," or the negative of those words or other comparableterminology. The accuracy of such statements is subject to a number ofrisks, uncertainties and assumptions including, but not limited to,the cyclical nature of the forest products industry, our ability toharvest our timber, our ability to execute our acquisition strategy,the market for and our ability to sell or exchange non-strategictimberlands and timberland properties that have higher and betteruses, and various regulatory constraints. These and other risks,uncertainties and assumptions are detailed from time to time in ourfilings with the Securities and Exchange Commission under theSecurities Exchange Act of 1934, as amended, and the Securities Act of1933, as amended. It is likely that if one or more of the risksmaterializes, or if one or more assumptions prove to be incorrect, thecurrent expectations of Plum Creek and its management will not berealized. Forward-looking statements are not guarantees ofperformance, and speak only as of the date made, and neither PlumCreek nor its management undertakes any obligation to update or reviseany forward-looking statements.

                   PLUM CREEK TIMBER COMPANY, INC.                  CONSOLIDATED STATEMENTS OF INCOME                             (UNAUDITED)                                                      Quarter Ended                                                   -------------------                                                   March 31, March 31,                                                     2008      2007                                                   --------- ---------                                                     (In Millions,                                                    Except Per Share                                                         Amounts)Revenues: Timber                                           $     201 $     209 Real Estate                                             52        39 Manufacturing                                          105       115 Other                                                    5         6                                                   --------- ---------   Total Revenues                                       363       369                                                   --------- ---------Costs and Expenses: Cost of Goods Sold:   Timber                                               139       134   Real Estate                                           16        16   Manufacturing                                        112       113   Other                                                  -         1                                                   --------- ---------      Total Cost of Goods Sold                          267       264 Selling, General and Administrative                     30        30                                                   --------- ---------         Total Costs and Expenses                       297       294                                                   --------- ---------Other Operating Income (Expense), net                     3         2                                                   --------- ---------Operating Income                                         69        77Interest Expense, net                                    36        36                                                   --------- ---------Income before Income Taxes                               33        41Benefit for Income Taxes                                 (5)       (4)                                                   --------- ---------Net Income                                        $      38 $      45                                                   ========= =========Per Share Amounts:Net Income per Share - Basic                                          $    0.22 $    0.26 - Diluted                                        $    0.22 $    0.25Weighted Average Number of Shares Outstanding - Basic                                              171.6     177.1 - Diluted                                            172.1     177.5

                   PLUM CREEK TIMBER COMPANY, INC.                     CONSOLIDATED BALANCE SHEETS                             (UNAUDITED)                                              March 31,   December 31,                                                2008         2007                                             ------------ ------------                                             (In Millions, Except Per                                                   Share Amounts)                   ASSETSCurrent Assets: Cash and Cash Equivalents                  $        118 $        240 Accounts Receivable                                  39           33 Like-Kind Exchange Funds Held in Escrow              31            - Inventories                                          86           82 Deferred Tax Asset                                    7            7 Real Estate Development Properties                    6            5 Assets Held for Sale                                 66           64 Other Current Assets                                 24           25                                             ------------ ------------                                                     377          456Timber and Timberlands, net                        3,924        3,949Property, Plant and Equipment, net                   196          202Investment in Grantor Trusts (At Fair Value)                                               24           27Other Assets                                          35           30                                             ------------ ------------ Total Assets                               $      4,556 $      4,664                                             ============ ============                LIABILITIESCurrent Liabilities: Current Portion of Long-Term Debt          $        150 $        147 Accounts Payable                                     37           48 Interest Payable                                     39           29 Wages Payable                                        11           25 Taxes Payable                                        15           23 Deferred Revenue                                      7           13 Other Current Liabilities                            17           18                                             ------------ ------------                                                     276          303Long-Term Debt                                     2,020        1,820Line of Credit                                       369          556Deferred Tax Liability                                18           20Other Liabilities                                     57           64                                             ------------ ------------ Total Liabilities                                 2,740        2,763                                             ------------ ------------Commitments and Contingencies            STOCKHOLDERS' EQUITYPreferred 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) - 171.1 at March 31, 2008, and 172.3 at December 31, 2007                        2            2Additional Paid-In Capital                         2,206        2,204Retained Earnings                                    168          202Treasury Stock, at cost, Common Shares - 15.9 at March 31, 2008, and 14.6 at December 31, 2007                                  (560)        (509)Accumulated Other Comprehensive Income                 -            2                                             ------------ ------------ Total Stockholders' Equity                        1,816        1,901                                             ------------ ------------ Total Liabilities and Stockholders' Equity $      4,556 $      4,664                                             ============ ============

                   PLUM CREEK TIMBER COMPANY, INC.                CONSOLIDATED STATEMENTS OF CASH FLOWS                             (UNAUDITED)                                                      Quarter Ended                                                   -------------------                                                   March 31, March 31,                                                     2008      2007                                                   --------- ---------                                                      (In Millions)Cash Flows From Operating Activities:Net Income                                        $      38 $      45Adjustments to Reconcile Net Income toNet Cash Provided By Operating Activities: Depreciation, Depletion and Amortization                33        33 Basis of Real Estate Sold                               10         9 Expenditures for Real Estate Development                (3)       (2) Deferred Income Taxes                                   (2)       (3) Working Capital Changes Impacting Cash Flow:     Like-Kind Exchange Funds                           (31)      (10)     Other Working Capital Changes                      (39)      (31) Other                                                   (7)       (3)                                                   --------- ---------Net Cash Provided By (Used In) Operating Activities                                              (1)       38                                                   --------- ---------Cash Flows From Investing Activities: Capital Expenditures (Excluding Timberland  Acquisitions)                                         (13)      (11) Timberlands Acquired                                    (1)        - Other                                                    -         2                                                   --------- ---------Net Cash Used In Investing Activities                   (14)       (9)                                                   --------- ---------Cash Flows From Financing Activities: Dividends                                              (72)      (75) Borrowings on Line of Credit                           477       649 Repayments on Line of Credit                          (664)     (577) Proceeds from Issuance of Long-Term Debt               250         - Principal Payments and Retirement of Long-Term  Debt                                                  (47)      (72) Proceeds from Stock Option Exercises                     -         5 Acquisition of Treasury Stock                          (51)      (22)                                                   --------- ---------Net Cash Used In Financing Activities                  (107)      (92)                                                   --------- ---------Decrease In Cash and Cash Equivalents                  (122)      (63) Cash and Cash Equivalents:   Beginning of Period                                  240       273                                                   --------- ---------   End of Period                                  $     118 $     210                                                   ========= =========

Click Here for 1st Quarter 2008 Financial Supplement (in PDF)

CONTACT: Plum Creek Timber Company, Inc.
Investors: John Hobbs, 1-800-858-5347
Media: Robin Keegan, 1-888-467-3751

SOURCE: Plum Creek Timber Company, Inc.