SEATTLE--(BUSINESS WIRE)--April 25, 2005--Plum Creek TimberCompany, Inc. (NYSE:PCL) today announced first quarter earnings of$122 million, or $0.66 per diluted share, on revenues of $400 million.Earnings for the first quarter of 2004 were $155 million, or $0.84 perdiluted share, on revenues of $497 million.

The first quarter 2005 results include a $20 million after-taxgain on the previously announced sale of the company's remaining coalassets. As a result, first quarter income from continuing operationswas $102 million, or $0.56 per share. The first quarter 2004 resultsincluded $67 million of operating income from the $118 million sale ofcertain large, non-strategic timberlands.

Cash provided by operating activities in the first quarter totaled$97 million. Cash provided by operating activities during the sameperiod of 2004 totaled $243 million including approximately $114million generated by the sale of large, non-strategic timberlands. Thecompany ended the first quarter with $349 million in cash and cashequivalents.

"We're pleased with the results of the first quarter. Profits fromour core timber business were up compared to the same period last yearand the fourth quarter of 2004," said Rick Holley, president and chiefexecutive officer. "We continued to capture excellent value for landsthat we sold, while our manufacturing segment operated well andenjoyed good markets and profitability. Our markets continue to be ingood condition and we are on target to deliver a year of excellentearnings and cash flow.

"We continue to execute on our strategic initiatives aimed atmaximizing the value of all our timber and land assets. Over the pasttwo quarters, we've captured approximately $45 million from the saleof the company's coal assets. These sales secured excellent values forthe assets sold. They are examples of the meaningful progress we'vemade recognizing the value of non-timber resources that we own."

Review of Operations

The Northern Resources segment reported operating profit of $29million compared to $32 million during the same period of 2004. Asplanned, the Northern Resources harvest volume was approximately 13percent lower than the same period of 2004.

Housing activity, repair and remodel expenditures and industrialdemand for wood products have contributed to continued strong demandfor solid wood products. As a result, sawlog prices in the NorthernResources segment were 10 percent higher when compared to the sameperiod of 2004. Pulp and paper markets have also benefited fromeconomic growth over the past year. In addition, certain markets haveexperienced increased competition for pulpwood due to limited loggingcapacity. As a result, pulpwood pricing during the first quarter of2005 was approximately 7 percent higher than the same period of 2004.

Operating profit in the Southern Resources segment was $64million, up $8 million, compared to the same period of 2004. Similarto the Northern segment, strong demand for solid wood products hasresulted in higher sawlog prices, up approximately 5 percent. Priceincreases for sawlogs varied depending on the region. Sawlog prices inwestern regions of the South increased over 10 percent, the result ofwet weather that limited access to timberlands. In drier regions ofthe South, sawlog prices increased approximately 2 percent. During thequarter, the company took advantage of attractive sawlog prices incertain markets. Pulpwood prices were flat compared to the firstquarter of 2004. As planned, harvest volumes were up approximately 6percent when compared to the first quarter of 2004.

The Real Estate segment reported revenue of $68 million andoperating income of $44 million. First quarter 2005 sales wereprimarily conservation and small, non-strategic land sales. Firstquarter 2004 Real Estate segment revenue was $188 million and resultedin income of $102 million. The 2004 results included $118 million ofrevenue and $67 million of income from the sale of large,non-strategic timberlands.

The Manufacturing segment reported operating profit of $8 million,down $3 million from the $11 million profit reported during the firstquarter of 2004. Demand for the company's manufactured productsremained strong as the result of strong housing starts, good repairand remodel markets and growing industrial demand. Lumber pricesincreased approximately 7 percent compared to the first quarter of2004. Medium density fiberboard (MDF) prices were 18 percent higher,while industrial plywood prices remained relatively flat. MDFperformance was particularly strong with excellent operatingperformance when compared to the same period of 2004. Higher rawmaterial costs, particularly of logs and resins, reduced theprofitability of lumber and plywood operations when compared to thefirst quarter of 2004.

Coal Asset Sale

During the quarter, the company completed the previously announcedsale of its remaining coal assets in Virginia and West Virginia for$21 million. The sale resulted in an after-tax gain of $20 million.

Outlook

Strong demand from lumber and structural panel markets is expectedto continue throughout the second quarter. Pulpwood demand is expectedto remain steady for most of the quarter and improve somewhat late inthe quarter as several customers complete planned maintenance outages.

Harvest levels in the North are expected to decline from firstquarter levels in a typical seasonal pattern due to thawing springweather that will restrict harvesting activities during a portion ofthe quarter. The Southern harvest is expected to increase slightlyfrom the first quarter, specifically in pulpwood.

Customers throughout the Northern Resources segment have beenbuilding log inventories in anticipation of the spring thaw and nowhave reasonably good log inventories as they enter the second quarter.Log buyers in the West are concerned that a dry spring in the westernUnited States and western Canada could lead to early loggingrestrictions this summer. Some are responding by building loginventories above normal for the season. The company expects sawlogprices to maintain current levels as the result of strong end productdemand and limited log availability during the spring thaw. Pressureon pulpwood prices is expected to continue in the Northeast as limitedcontractor availability continues to impact log availability in theregion.

During the second quarter, demand for Southern sawlogs andpulpwood is expected to remain strong as well. Reasonable loginventories and favorable harvesting conditions in most regions of theSouth are expected to hold prices at current levels for both sawlogsand pulpwood across the region.

The company continues to expect Real Estate segment revenues forthe year to be between $200 and $230 million. Of this amount, secondquarter revenues are expected to be between $30 and $35 million. Realestate segment results could be higher depending on the extent oflarge, non-strategic timberlands sold during the remainder of theyear.

Earnings for the Manufacturing segment are expected to continue tobenefit from excellent product demand and continued strong pricinglevels.

The company expects earnings from continuing operations for 2005to be between $1.50 and $1.65 per share. Second quarter earnings areexpected to be between $0.27 and $0.32 per share.

"We've started the year with excellent performance and goodunderlying business conditions," said Rick Holley. "We continue to actopportunistically to capture value in spot timber markets and arerealizing significant value from our sales of high-value recreationand conservation properties.

"Plum Creek's business model is based on a consistent, long-termapproach to sustainable timber management and value creation. Over thepast several years, our disciplined approach has improved thefundamental cash generating capabilities of our asset base, allowingus to grow our dividend over time. As we execute our strategies forvalue growth, capital allocation remains our highest priority. We willmaintain our discipline as we continually evaluate how best to use thecash we generate for the long-term benefit of our shareholders."

Earnings Conference Call and Supplemental Information

Plum Creek will hold a conference call today, April 25, at 5:00p.m. EDT (2:00 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 code3521717.

Supplemental financial information for Plum Creek operations,including statistical data, is available in the investors informationsection of Plum Creek's website at www.plumcreek.com.

Plum Creek is one of the largest timberland owners in the nation,with approximately 8 million acres of timberlands in major timberproducing regions of the United States and 10 wood productsmanufacturing 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,                                              2005            2004                                              ----            ----                                            (In Millions, Except Per                                                  Share Amounts)Revenues:   Timber                                 $       200     $       184   Real Estate                                     68             188   Manufacturing                                  129             122   Other                                            3               3                                           -----------     -----------     Total Revenues                               400             497                                           -----------     -----------Costs and Expenses:   Cost of Goods Sold:     Timber                                       102              93     Real Estate                                   24              86     Manufacturing                                118             108     Other                                          1               1                                           -----------     -----------        Total Cost of Goods Sold                  245             288   Selling, General and    Administrative                                 21              18                                           -----------     -----------           Total Costs and            Expenses                              266             306                                           -----------     -----------Operating Income                                  134             191Interest Expense, net                              27              29                                           -----------     -----------Income before Income Taxes                        107             162Provision for Income Taxes                          5               7                                           -----------     -----------Income from Continuing Operations                                       102             155Gain on Sale of Properties, net of tax                                            20               -                                           -----------     -----------Net Income                                $       122     $       155                                           ===========     ===========Income from Continuing Operations per Share - Basic             $      0.56     $      0.85                                           ===========     ===========Income from Continuing Operations per Share - Diluted           $      0.56     $      0.84                                           ===========     ===========Net Income per Share - Basic              $      0.67     $      0.85                                           ===========     ===========Net Income per Share - Diluted            $      0.66     $      0.84                                           ===========     ===========Weighted Average Number of Shares Outstanding - Basic                            183.9           183.2                                           -----------     -----------Weighted Average Number of Shares Outstanding - Diluted                          184.5           184.0                                           -----------     -----------                    PLUM CREEK TIMBER COMPANY, INC.                      CONSOLIDATED BALANCE SHEETS                              (UNAUDITED)                                              March 31,   December 31,                                                2005         2004                                                ----         ----                                             (In Millions, Except Per                                                   Share Amounts)                    ASSETSCurrent Assets:   Cash and Cash Equivalents                $       349  $        347   Restricted Advance from Customer                  24             4   Accounts Receivable                               45            40   Like-Kind Exchange Funds Held in Escrow           45            11   Inventories                                       70            71   Deferred Tax Asset                                11            10   Other Current Assets                              18            16                                             -----------  ------------                                                    562           499Timber and Timberlands -  Net                     3,578         3,590Property, Plant and Equipment  -  Net               247           253Investment in Grantor Trusts                         29            29Other Assets                                         10             7                                             -----------  ------------   Total Assets                             $     4,426  $      4,378                                             ===========  ============                 LIABILITIESCurrent Liabilities:   Current Portion of Long-Term Debt        $        32  $         32   Accounts Payable                                  29            41   Interest Payable                                  36            28   Wages Payable                                     12            25   Taxes Payable                                     23            22   Deferred Revenue                                  34            16   Other Current Liabilities                         12            20                                             -----------  ------------                                                    178           184Long-Term Debt                                    1,404         1,405Lines of Credit                                     448           448Deferred Tax Liability                               44            45Other Liabilities                                    54            56                                             -----------  ------------   Total Liabilities                              2,128         2,138                                             -----------  ------------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, issued (including Treasury Stock) - 185.9 at March 31, 2005, and 185.7 at December 31, 2004                                    2             2Additional Paid-In Capital                        2,174         2,168Retained Earnings                                   163           111Treasury Stock, at cost, Common shares - 2.0                                                (43)          (43)Other Equity                                          2             2                                             -----------  ------------   Total Stockholders' Equity                     2,298         2,240                                             -----------  ------------   Total Liabilities and Stockholders'    Equity                                  $     4,426  $      4,378                                             ===========  ============                    PLUM CREEK TIMBER COMPANY, INC.                 CONSOLIDATED STATEMENTS OF CASH FLOWS                              (UNAUDITED)                                                 Quarter Ended                                                 -------------                                            March 31,     March 31,                                              2005          2004                                              ----          ----                                                 (In Millions)Cash Flows From Operating Activities:   Net Income                            $         122 $          155   Adjustments to Reconcile Net Income    to   Net Cash Provided By Operating    Activities:     Depreciation, Depletion and      Amortization                                  27             27     Basis of Real Estate Sold      (Includes Impairment Losses of      $16 in 2004)                                  18             79     Deferred Income Taxes                          (1)             7     Gain on Sales of Properties                   (21)             -     Working Capital Changes                       (46)           (19)     Other                                          (2)            (6)                                          ------------- --------------Net Cash Provided By Operating Activities                                         97            243                                          ------------- --------------Cash Flows From Investing Activities:   Property Additions (Excluding    Timberland Acquisitions)                       (10)           (17)   Timberlands Acquired (Including Tax-    Deferred Exchange Proceeds, Net)               (18)           (24)   Other                                             1              -                                          ------------- --------------Net Cash Used In Investing Activities              (27)           (41)                                          ------------- --------------Cash Flows From Financing Activities:   Dividends                                       (70)           (64)   Borrowings of Long-term Debt and    Lines of Credit                                529            606   Retirements of Long-term Debt and    Lines of Credit                               (530)          (725)   Proceeds from Stock Option Exercises              3              2                                          ------------- --------------Net Cash Used In Financing Activities              (68)          (181)                                          ------------- --------------Increase In Cash and Cash Equivalents                2             21   Cash and Cash Equivalents:     Beginning of  Period                          347            267                                          ------------- --------------     End of Period                       $         349 $          288                                          ============= ==============

Click Here for 1st Quarter 2005 Financial Supplements (in PDF)

CONTACT: Plum Creek Timber Company, Inc.
Investors:
John Hobbs, 800-858-5347
or
Media:
Kathy Budinick, 206-467-3620

SOURCE: Plum Creek Timber Company, Inc.