Plum Creek Legacy News Releases

Plum Creek Timber Company, Inc. Reports Results for First Quarter 2004

Apr 19, 2004

SEATTLE--(BUSINESS WIRE)--April 19, 2004--Plum Creek TimberCompany, Inc. (NYSE:PCL) today announced first quarter earnings of$155 million, or $0.84 per diluted share, on revenues of $497 million.Earnings for the first quarter of 2003 were $33 million, or $0.18 perdiluted share, on revenues of $273 million.

Cash provided by operating activities in the first quarter totaled$242 million including approximately $114 million generated by thesale of large, non-strategic timberlands. Cash provided by operatingactivities in the same period of 2003 was $46 million. The Companyreduced debt by $117 million during the quarter and ended the firstquarter with $280 million in cash and cash equivalents.

"We are very pleased with our first quarter results. They reflectour comprehensive approach to delivering the most value from all ourland and timber assets," said Rick Holley, president and chiefexecutive officer. "We captured excellent values from the sale ofapproximately 200,000 acres of large, non-strategic timberlands. Thesesales represent significant progress in our effort to capture themaximum value of approximately 700,000 acres of non-strategictimberlands that we expect to sell over the near term. Plum Creekbenefited from very strong manufacturing performance, improving timbermarkets, and high levels of interest in higher and better use lands."

Review of Operations

The Northern Resources segment reported operating profit of $32million, up $9 million, when compared to the same period of 2003.Sawlog and pulpwood prices improved compared to the same period of2003. Strong housing starts, good repair and remodel activity, andimproving industrial demand for wood products increased sawlog demandover the same period last year. During the quarter, sawmills andplywood plants in the West sought to rebuild log decks that weredepleted by an unusually severe 2003 fire season.

As a result, sawlog prices in the Northern Resources segment were6 percent higher when compared to the first quarter of 2003. Pulp andpaper markets benefited from the economic recovery and weaker U.S.dollar. As a result, increased competition for pulpwood improvedpulpwood pricing by 21 percent compared to the first quarter of 2003.Pulpwood markets in Maine were particularly strong as a shortage ofharvesting contractors, low pulpwood inventories and the restart ofidled paper mills in the region led to intensified competition forpulpwood. Northern harvest volumes were up approximately 9 percentwhen compared to the same period of 2003 as the result of morefavorable harvest conditions in the first quarter of 2004.

Operating profit in the Southern Resources segment was $56million, up $7 million, compared to $49 million for the same period of2003. Southern timber markets experienced improved demand over thepast year from both solid wood and pulp and paper customers. This wasalso the case in Northern markets. However, excellent harvestingconditions throughout the South allowed timber supply to more closelymatch demand. As a result, price improvement for sawlogs and pulpwoodwas more muted in the South than in the North. Southern pulpwoodprices were up 7 percent, while sawlog prices were up 3 percent, whencompared to the same period of 2003. During the quarter, the Companytook advantage of attractive prices and good harvesting conditions incertain markets. As a result, harvest volumes were up approximately 10percent when compared to the first quarter 2003.

The Real Estate segment reported revenue of $188 million comparedto $23 million in the first quarter of 2003. The segment results werecomprised of both higher and better use land sales and large,non-strategic timberland sales. Revenues from the sale of higher andbetter use lands were $70 million during the first quarter and gainsfrom these sales were approximately $35 million. First quarter RealEstate segment results also included $118 million of revenue from thesale of large, non-strategic timberlands. Gains from these sales were$67 million. This includes a $16 million asset impairment chargerelated to the expected sale of additional non-strategic timberlands.

The Manufacturing segment reported operating profit of $11million, up $16 million from a $5 million loss reported during thefirst quarter of 2003. Continued strong housing starts, good repairand remodel activity, and improving industrial demand led to higherprices for each of the Company's manufactured products. Plywood priceswere up 37 percent compared to last year. Lumber prices increased 23percent when compared to the same period last year. A higher valuedproduct mix improved medium density fiberboard (MDF) pricerealizations 11 percent compared to the first quarter of 2003.Production efficiency gains at the Company's MDF operations alsocontributed to the improved performance of the segment.

Outlook

Strong demand from lumber and structural panel markets and pulpand paper customers is expected to continue throughout the secondquarter. Harvest levels in the North are expected to decline fromfirst quarter levels due to thawing spring weather that will restrictharvesting activities for much of the quarter. Southern harvests areexpected to be flat with a higher proportion of pulpwood in the secondquarter when compared to the harvest mix in the first quarter.

Customers throughout the Northern Resources segment have beenworking to build log inventories in anticipation of the spring thaw.Customer log inventories appear adequate to operate at or near theirdesired levels during the quarter. As a result, the Company expectssawlog prices to hold near current levels as the result of strong endproduct demand and limited log availability during spring break up.Northern pulpwood prices are expected to moderate somewhat as logsupplies increase in the Northeast due to improved harvestingconditions late in the second quarter.

Demand for Southern sawlogs and pulpwood is expected to remainstrong as well. However, favorable harvesting conditions in the Southare expected to hold prices in check for both sawlogs and pulpwoodacross the region.

The Company expects Real Estate segment revenues for the remainderof the year to be between $70 and $90 million. Of this amount, secondquarter revenues are expected to approach $40 million. Real estatesegment results could be higher depending on the extent of large,non-strategic timberlands sold during the remainder of the year.

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

The Company expects earnings for the remainder of the year to bebetween $0.72 and $0.87 per share. Second quarter earnings areexpected to be between $0.26 and $0.31.

"We continue to focus on delivering the highest values for all ofPlum Creek's assets," said Rick Holley. "We are actingopportunistically to capture value in spot timber markets and arerealizing significant value from our sales of high value recreationand conservation properties.

"As we execute our strategies for value growth, disciplinedcapital allocation remains our most important task. We continuallyevaluate all the uses of the cash we generate for the best benefit ofour shareholders with the goal of growing the per share value of theCompany."

Earnings Conference Call and Supplemental Information

Plum Creek will hold a conference call today, April 19, 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 code5500811.

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 land and timber owners in thenation, with over 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,                                              2004      2003                               (In Millions, Except Per Share Amounts)Revenues:  Timber                                    $  184    $  156  Real Estate                                  188        23  Manufacturing                                122        92  Other                                          3         2                                            ------    ------    Total Revenues                             497       273                                            ------    ------Costs and Expenses:  Cost of Goods Sold:    Timber                                      93        81    Real Estate                                 86        19    Manufacturing                              108        96    Other                                        1         1                                            ------    ------      Total Cost of Goods Sold                 288       197    Selling, General and     Administrative                             18        17                                            ------    ------Total Costs and Expenses                       306       214                                            ------    ------Operating Income                               191        59Interest Expense, net                           29        28                                            ------    ------Income before Income Taxes                     162        31(Provision) Benefit for Income Taxes            (7)        2                                            ------    ------Net Income                                  $  155    $   33                                            ======    ======Net Income per Share - Basic                $ 0.85    $ 0.18                                            ======    ======Net Income per Share - Diluted              $ 0.84    $ 0.18                                            ======    ======Weighted average number of Shares outstanding - Basic                                       183.2     184.1                                            ------    ------Weighted average number of Shares outstanding - Diluted                                     184.0     184.6                                            ------    ------                    PLUM CREEK TIMBER COMPANY, INC.                      CONSOLIDATED BALANCE SHEETS                              (UNAUDITED)                                         March 31,     December 31,                                           2004            2003                                              (In Millions)                                ASSETSCurrent Assets:   Cash and Cash Equivalents          $         280   $         260   Restricted Advance from Customer              13               3   Accounts Receivable                           46              34   Inventories                                   59              54   Investment in Grantor Trust                   12              13   Deferred Tax Asset                            11              11   Other Current Assets                          28              30                                      -------------   -------------                                                449             405Timber and Timberlands -  Net                 3,615           3,674Property, Plant and Equipment  -  Net           297             303Other Assets                                      7               5                                      -------------   -------------   Total Assets                       $       4,368   $       4,387                                      =============   =============                              LIABILITIESCurrent Liabilities:   Current Portion of Long-Term    Debt                              $          32   $          33   Accounts Payable                              24              27   Interest Payable                              37              28   Wages Payable                                 10              23   Taxes Payable                                 15              15   Deferred Revenue                              21              16   Liabilities Associated with Grantor Trust     12              13   Other Current Liabilities                     21              13                                      -------------   -------------                                                172             168Long-Term Debt                                1,436           1,437Lines of Credit                                 479             594Deferred Tax Liability                           43              37Other Liabilities                                23              32                                      -------------   -------------   Total Liabilities                          2,153           2,268                                      -------------   -------------Commitments and Contingencies                         STOCKHOLDERS' EQUITYPreferred Stock, $0.01 par value, authorized shares - 75.0, outstanding - none                -               -Common Stock, $0.01 par value, authorized shares -  300.0, issued (including Treasury Stock) - 185.3 at March 31, 2004 and 185.1 at December 31, 2003                       2               2Additional Paid-In Capital                    2,155           2,150Retained Earnings                               100               9Treasury Stock, at cost, Common shares - 2.0    (43)            (43)Other Equity                                      1               1                                      -------------   -------------   Total Stockholders' Equity                 2,215           2,119                                      -------------   -------------   Total Liabilities and Stockholders'     Equity                           $       4,368   $       4,387                                      =============   =============                    PLUM CREEK TIMBER COMPANY, INC.                 CONSOLIDATED STATEMENTS OF CASH FLOWS                              (UNAUDITED)                                               Quarter Ended                                          March 31,       March 31,                                           2004             2003                                               (In Millions)Cash Flows From Operating Activities:Net Income                             $        155   $           33Adjustments to Reconcile Net Income to   Net Cash Provided By Operating Activities:   Depreciation, Depletion and Amortization      27               25   Basis of Real Estate Sold (Including    Impairment Losses of $16 in 2004 and    $9 in 2003)                                  79               17   Deferred Income Taxes                          7               (2)   Working Capital Changes                      (20)             (23)   Other                                         (6)              (4)                                       ------------   --------------Net Cash Provided By Operating Activities       242               46                                       ------------   --------------Cash Flows From Investing Activities:   Property Additions (Excluding Timberland    Acquisitions)                               (17)             (16)   Timberlands Acquired (Including    Tax-Deferred Exchange Proceeds, Net)        (24)              (1)                                       ------------   --------------Net Cash Used In Investing Activities           (41)             (17)                                       ------------   --------------Cash Flows From Financing Activities:   Dividends                                    (64)             (65)   Borrowings of Long-term Debt and    Lines of Credit                             606              782   Repayments of Long-term Debt and    Lines of Credit                            (725)            (741)   Proceeds from Stock Option Exercises           2                -   Acquisition of Treasury Stock                  -              (43)                                       ------------   --------------Net Cash Used In Financing Activities          (181)             (67)                                       ------------   --------------Increase (Decrease) In Cash and Cash Equivalents                                20              (38)Cash and Cash Equivalents:   Beginning of  Period                         260              246                                       ------------   --------------   End of Period                       $        280   $          208                                       ============   ==============

Click Here for 1st Quarter 2004 Financial Supplements (in PDF)

CONTACT: Plum Creek Timber Company, Inc.
Investors: John Hobbs, 1-800-858-5347
Media: Kathy Budinick, 1-206-467-3620

SOURCE: Plum Creek Timber Company, Inc.

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