8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): February 2, 2009

PLUM CREEK TIMBER COMPANY, INC.

(Exact Name of Registrant as Specified in its Charter)

DELAWARE	1-10239	91-1912863
(State of Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

999 Third Avenue, Suite 4300 Seattle, Washington	98104-4096
(Address of Principal Executive Offices)	(Zip Code)

(206) 467-3600

Registrant’s Telephone Number, including area code

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14.d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 2. Financial Information

Item 2.02 Results of Operations and Financial Condition

On February 2, 2009, Plum Creek Timber Company, Inc. issued a press release reporting its results of operations for the quarter and year ended December 31, 2008, and posted to its website (www.plumcreek.com) certain supplemental financial and statistical information for the quarter and year ended December 31, 2008. A copy of the press release and the supplemental financial and statistical information are attached hereto as Exhibits 99.1 and 99.2, respectively.

Section 9. Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits

(d) Exhibits. The following exhibits are furnished with this report:

Exhibit No.
99.1	Press release of Plum Creek Timber Company, Inc. issued February 2, 2009, reporting results of operations for the quarter and year ended December 31, 2008.
99.2	Supplemental Financial and Statistical Information for the quarter and year ended December 31, 2008, posted on February 2, 2009.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

PLUM CREEK TIMBER COMPANY, INC.
By:	/s/ David W. Lambert
	David W. Lambert
	Senior Vice President and Chief Financial Officer

DATED: February 2, 2009

PLUM CREEK TIMBER COMPANY, INC.

Exhibit Index

Exhibit No.
99.1	Press release of Plum Creek Timber Company, Inc. issued February 2, 2009, reporting results of operations for the quarter and year ended December 31, 2008.
99.2	Supplemental Financial and Statistical Information for the quarter and year ended December 31, 2008, posted on February 2, 2009.

EX-99.1

Exhibit 99.1

Plum Creek Timber Company, Inc. 999 Third Avenue, Suite 4300 Seattle, Washington 98104 206 467 3600

News Release

	For more information contact:
For immediate release	Investors: John Hobbs 1-800-858-5347
Feb. 2, 2009	Media: Kathy Budinick 1-888-467-3751

Plum Creek Reports Results for Fourth Quarter and Full Year 2008

SEATTLE – Plum Creek Timber Company, Inc. (NYSE: PCL) today announced fourth quarter earnings of $95 million, or $0.57 per diluted share, on revenues of $461 million. Earnings for the fourth quarter of 2007 were $118 million, or $0.68 per diluted share, on revenues of $504 million.

Earnings for the fourth quarter of 2008 included an $11 million, $0.07 per diluted share, after-tax gain from the early retirement of debt and $3 million, $0.02 per diluted share, of severance costs primarily associated with the company’s plans to reduce manufacturing production. Earnings for the fourth quarter of 2007 included an after-tax gain of $43 million, or $0.25 per share, from the sale of nearly 100,000 acres of large, non-strategic timberlands in Wisconsin for approximately $70 million.

Earnings for 2008 were $233 million, or $1.37 per diluted share, on revenues of $1.61 billion. Earnings for the full year of 2007 were $282 million, or $1.61 per diluted share, on revenues of $1.68 billion.

Results for 2008 included the gain from the early retirement of debt, the severance costs, and the effect of a $6 million after-tax ($10 million pre-tax) impairment charge related to the company’s lumber manufacturing business recognized during the second quarter. The impairment charge reduced net income by $0.04 per diluted share. Results for the full year of 2007 included the income from the Wisconsin sale mentioned above.

“Plum Creek ended the year with a busy quarter,” said Rick Holley, president and chief executive officer. “We completed the formation of our Southern timberland joint venture, completed the first phase of the Montana conservation sale, retired more than $420 million of debt and repurchased over $200 million of common stock. We ended 2008 well positioned with a strong balance sheet and $370 million in cash. Our broad asset base diversifies our market risks and continues to provide excellent operational flexibility. We’re well positioned to weather the challenging economic times facing the country and expect to generate cash flow well beyond that required for our dividend.

(more)

Plum Creek Reports Results for Fourth Quarter

Page 2

“We are maintaining our value discipline. In 2009 we’ll continue to defer harvests in weak markets to protect value. Our value focus is evident in our Real Estate segment as well. We’ve removed listings from weak markets such as Florida and responded to attractive markets in other regions such as Mississippi. We’ve also made tough decisions in our manufacturing business, announcing the permanent closure of one sawmill and the curtailment of others.

“We’re not allowing the current state of the markets to distract us from our focus on developing long-term growth opportunities. These include growth of our non-timber natural resource business and our work aimed at serving emerging wood-based renewable energy markets.”

Summary of 2008 Results

Net income declined approximately 17 percent from 2007’s results as income from the company’s Resources and Manufacturing segments were impacted by the significant decline in residential construction and a weakening economy. Income from the balance of the company’s business segments was similar to 2007.

In the timber resource segments, the company’s results were affected by weak sawlog markets as lumber manufacturers reduced demand in light of very weak lumber pricing. The company reduced its total sawlog harvests 11 percent to their lowest recorded levels, choosing to allow a portion of the timber to grow rather than sell the trees into weak markets. Average sawlog prices were down 6 percent in the Northern Resources segment and 14 percent in the Southern Resources segment. Good demand for pulpwood from pulp and paper mill customers provided a modest offset to the difficult sawlog markets. Average pulpwood prices increased 15 percent in the Northern Resources segment and 17 percent in the Southern Resources segment. The company sustained its pulpwood harvest at elevated levels to take advantage of the attractive pricing.

In the Real Estate segment, the company reported income of $245 million during 2008 compared with $250 million during 2007. The 2008 results include $74 million of income from the conservation sale of approximately 130,000 acres of Montana timberlands to The Nature Conservancy and The Trust for Public Land. The balance of the income was generated from the sale of approximately 92,000 acres of lower-productivity timberlands and approximately 46,000 acres of recreation properties.

The company’s Manufacturing segment reported a $44 million loss for 2008 compared with a $2 million profit for 2007. The reported loss includes the impact of $10 million of asset impairments and $2 million of severance costs associated with production curtailments and a lumber mill closure. In addition, the company wrote down the value of purchased log commitments by $9 million, and wrote down log and finished goods inventories by $7 million.

The company continued to grow the contribution from its non-timber natural resources business, increasing operating income by $6 million, to a total of $23 million for 2008.

(more)

Plum Creek Reports Results for Fourth Quarter

Page 3

Review of Quarterly Operations

The Northern Resources segment reported fourth quarter operating profit of $8 million, compared with operating profit of $17 million reported in the fourth quarter of 2007. The decline in segment profits was driven primarily by a planned 20 percent reduction in sawlog harvest volume. During the quarter, the company limited its sawlog harvests in response to low sawlog prices and extended holiday downtime at lumber mills across the region. Average sawlog prices were approximately 5 percent lower than the same period of 2007. Good pulpwood demand in the northeast and lake states provided a modest offset to the difficult sawlog markets. Average pulpwood prices increased 16 percent compared with the fourth quarter of 2007, while the company’s pulpwood harvest was similar to the same period of 2007.

The Southern Resources segment reported fourth quarter operating profit of $25 million, compared with a $35 million operating profit reported during the fourth quarter of 2007. The decline in operating profit was primarily driven by lower harvest volumes compared with the same period of 2007. During the fourth quarter of 2008, the company contributed approximately 454,000 acres of timberlands to a venture with The Campbell Group. The company reduced its fourth quarter sawlog harvest approximately 380,000 tons, or 27 percent, from the same period of 2007. The lands contributed to the timberland venture accounted for 145,000 tons of the sawlog harvest in the prior-year period. The balance of the Southern sawlog harvest decline resulted from harvest deferrals as sawlog prices were 13 percent lower than the prior-year period. By contrast, pulpwood markets remained attractive, with pulpwood prices averaging 29 percent higher than the fourth quarter of 2007. The company reduced its fourth quarter pulpwood harvest by approximately 280,000 tons, or 14 percent, from the same period of 2007. The lands contributed to the timberland venture accounted for 130,000 tons of the pulpwood harvest in the prior-year period.

The Real Estate segment reported revenue of $215 million and operating profit of $104 million in the fourth quarter of 2008. These results include $150 million of revenue and $74 million of operating income from the Montana conservation sale mentioned above. The segment reported $198 million of revenue and $121 million of operating profit for the fourth quarter of 2007. The 2007 results included the $70 million large, non-strategic Wisconsin sale mentioned above.

During the fourth quarter, the company sold approximately 190,000 acres of land. These sales included the 130,000-acre conservation sale mentioned above. The company’s small, non-strategic timberland sales were concentrated in Michigan’s Upper Peninsula. The 47,000 acres of lands sold captured an average price of $750 per acre. Approximately 7,500 acres of recreation property sold at an average price of approximately $3,000 per acre.

The Manufacturing segment reported a $20 million loss for the fourth quarter of 2008, compared with a $1 million loss during the same period of 2007. These results include approximately $8 million of write-down for certain purchased log commitments and inventories, as well as approximately $2 million of severance costs related to the company’s

(more)

Plum Creek Reports Results for Fourth Quarter

Page 4

plans to reduce manufacturing production. Profitability in each manufacturing product line suffered as demand sharply declined during the fourth quarter. Sales volumes declined 19 percent for lumber, 40 percent for plywood and 47 percent for medium density fiberboard (MDF) products compared with the same period of 2007. Average prices declined 10 percent for lumber and 4 percent for plywood products compared with the same period of 2007. MDF prices increased approximately 16 percent over the past year, as increases in raw material costs drove MDF prices higher.

Formation of Southern Timberland Venture

On October 1, the company completed the formation of a previously announced timberland venture with The Campbell Group LLC. The transaction valued approximately 454,000 acres of Southern timberlands contributed into the venture by Plum Creek, at $1,725 per acre.

Also on October 1, the company received $783 million from the venture in the form of a loan. The interest on the loan is largely offset by the receipt of preferred dividends from the timberland venture. The company utilized a portion of these funds to retire existing debt and repurchase common stock during the fourth quarter.

Principal Repayment and Early Debt Retirement

During the quarter the company retired a total of approximately $421 million in debt as follows:

• Paid down $201 million on the line of credit;

• Retired $100 million private-placement debt that matured during the quarter as scheduled;

• Pre-paid $58 million of private debt at par;

• Executed open-market purchases of its publicly traded bonds. Bonds with a face value of $62 million were redeemed for $50 million. The bonds carried a coupon of 5.875 percent and were scheduled to mature in 2015. As a result, the company recorded an $11 million gain on the early extinguishment of debt during the fourth quarter.

Share Repurchases

During the fourth quarter, the company repurchased approximately $213 million, or approximately 5.6 million shares, of common stock at an average price of $38.15 per share.

For the full year, the company reduced total shares outstanding by approximately 3.7 percent. In total, the company repurchased $264 million, or 6.9 million shares, of common stock at an average price of approximately $38.53 per share. As of Dec. 31, 2008, the company had approximately 166 million shares outstanding and $137 million remaining under its current repurchase authorization.

(more)

Plum Creek Reports Results for Fourth Quarter

Page 5

Outlook

“Our long-term planning is at the heart of our strategies designed to protect and create shareholder value,” continued Holley. “Our operating plans for 2009 take into consideration the difficult market conditions we are likely to face for most of this year, as well as our positive long-term view of timber and rural land markets.”

Over the past year, lumber customers serving residential construction markets continued to reduce production in light of the unprecedented low level of residential construction activity. Recent industry reports estimate that U.S. lumber mills are operating at approximately 60 percent of capacity and recent lumber prices have reached levels not seen since the 1980s. The company anticipates that residential construction markets will remain very weak for most of 2009, and expects sawlog customers to remain extremely cautious.

While sawlog markets have been weak for the past year, pulpwood markets remained attractive throughout the year. Pulp and paper manufacturers sought pulpwood to replace a dwindling supply of residual chips from lumber mills. However, as the broader economic downturn accelerated during the fourth quarter of 2008, paper mills have reduced production and the prospects for continued strong pulpwood demand from this customer group has moderated.

Taking these conditions into consideration, the company expects to harvest between 16 million and 17 million tons of timber during 2009. The company expects to reduce sawlog production in both its Northern Resource and Southern Resource segments during 2009, deferring some harvest due to expected weak pricing. In late 2006, the company increased the pace of its forest thinning, particularly in the South, bringing to market previously deferred pulpwood volume in response to attractive pulpwood pricing and increased demand. The company maintained this pace throughout 2007 and 2008 as demand remained strong and pulpwood prices continued to rise. During 2009, the company plans to reduce the pace of its Southern pulpwood harvest to approximately 5.8 million tons, a level consistent with its long-term harvest plans.

The company expects Real Estate segment sales for the year to be between $430 million and $460 million. The company expects to close on the $250 million second phase of its three-phase conservation sale, in Montana during the first quarter. As a result, Real Estate segment sales are expected to be between $265 million and $275 million during the first quarter.

On January 8, the company announced its plans to curtail production in its manufacturing operations in order to match production with customer orders. As a result, the company expects the segment to narrow its losses during 2009 and provide cash flow neutral performance.

Reflecting all of these factors, the company expects 2009 earnings to be between $1.38 and $1.63 per share. The company anticipates first quarter earnings will be between $0.94 and $0.99 per share.

(more)

Plum Creek Reports Results for Fourth Quarter

Page 6

“Looking ahead in 2009, we are planning conservatively and do not expect meaningful near-term improvement in the economy or in our land and timber markets. Our approach in 2009 will be to further capitalize on our ability to exercise operational flexibility. We have a strong balance sheet and are responding appropriately to market conditions, ready to move quickly when markets show improvement. Our asset diversification, financial capability and strategic focus have Plum Creek well positioned to benefit from the opportunities that lie ahead,” concluded Holley.

Earnings Conference Call and Supplemental Information

Plum Creek will hold a conference call today, Feb. 2, at 5:00 p.m. EST (2:00 p.m. PST). A live webcast of the conference call may be accessed through Plum Creek’s Internet site at www.plumcreek.com by clicking on the “Investors” link.

Investors without Internet access should dial 1-800-572-9852 at least 10 minutes prior to the start of the call, referencing Plum Creek’s earnings conference call. Those wishing to access the call from outside the United States and Canada should dial 1-706-645-9676, also referencing Plum Creek’s earnings conference call. Replay of the call will be available for 48 hours after completion of the live call and can be accessed at 1-800-642-1687 or 1-706-645-9291 (international calls), using the code 73935200.

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

###

Plum Creek is the largest and most geographically diverse private landowner in the nation with more than 7 million acres of timberlands in major timber producing regions of the United States and 10 wood products manufacturing facilities in the Northwest.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Litigation Reform Act of 1995 as amended. Some of these forward-looking statements can be identified by the use of forward-looking words such as “believes,” “expects,” “may,” “will,” “should,” “seek,” “approximately,” “intends,” “plans,” “estimates,” or “anticipates,” or the negative of those words or other comparable terminology. The accuracy of such statements is subject to a number of risks, uncertainties and assumptions including, but not limited to, the cyclical nature of the forest products industry, our ability to harvest our timber, our ability to execute our acquisition strategy, the market for and our ability to sell or exchange non-strategic timberlands and timberland properties that have higher and better uses, and various regulatory constraints. These and other risks, uncertainties and assumptions are detailed from time to time in our filings with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, and the Securities Act of 1933, as amended. It is likely that if one or more of the risks materializes, or if one or more assumptions prove to be incorrect, the current expectations of Plum Creek and its management will not be realized. Forward-looking statements are not guarantees of performance, and speak only as of the date made, and neither Plum Creek nor its management undertakes any obligation to update or revise any forward-looking statements.

(more)

PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

	Twelve Months Ended
	December 31, 2008			December 31, 2007
	(In Millions, Except Per Share Amounts)
Revenues:
Timber	$	752		$	782
Real Estate		432			402
Manufacturing		405			471
Other		25			20
Total Revenues		1,614			1,675
Costs and Expenses:
Cost of Goods Sold:
Timber		542			523
Real Estate		178			144
Manufacturing		435			454
Other		2			3
Total Cost of Goods Sold		1,157			1,124
Selling, General and Administrative		128			127
Total Costs and Expenses		1,285			1,251
Other Operating Income (Expense), net		(1	)		—
Operating Income		328			424
Equity Earnings from Timberland Venture		15			—
Interest Expense, net:
Interest Expense (Debt Obligations to Third Parties)		134			147
Interest Expense (Note Payable to Timberland Venture)		14			—
Total Interest Expense, net		148			147
Gain on Extinguishment of Debt		11			—
Income before Income Taxes		206			277
Benefit for Income Taxes		(27	)		(3	)
Income From Continuing Operations		233			280
Gain on Sale of Properties, net of tax		—			2
Net Income	$	233		$	282
Per Share Amounts:
Income From Continuing Operations - Basic	$	1.37		$	1.60
Income From Continuing Operations - Diluted	$	1.37		$	1.60
Net Income per Share - Basic	$	1.37		$	1.61
Net Income per Share - Diluted	$	1.37		$	1.61
Weighted Average Number of Shares Outstanding
- Basic		170.3			174.5
- Diluted		170.7			175.0

PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

	Quarter Ended
	December 31, 2008			December 31, 2007
	(In Millions, Except Per Share Amounts)
Revenues:
Timber	$	165		$	193
Real Estate		215			198
Manufacturing		75			108
Other		6			5
Total Revenues		461			504
Costs and Expenses:
Cost of Goods Sold:
Timber		122			132
Real Estate		109			75
Manufacturing		90			105
Other		—			1
Total Cost of Goods Sold		321			313
Selling, General and Administrative		34			36
Total Costs and Expenses		355			349
Other Operating Income (Expense), net		(3	)		—
Operating Income		103			155
Equity Earnings from Timberland Venture		15			—
Interest Expense, net:
Interest Expense (Debt Obligations to Third Parties)		29			38
Interest Expense (Note Payable to Timberland Venture)		14			—
Total Interest Expense, net		43			38
Gain on Extinguishment of Debt		11			—
Income before Income Taxes		86			117
Benefit for Income Taxes		(9	)		(1	)
Net Income	$	95		$	118
Per Share Amounts:
Net Income per Share - Basic	$	0.57		$	0.68
Net Income per Share - Diluted	$	0.57		$	0.68
Weighted Average Number of Shares Outstanding
- Basic		167.2			172.3
- Diluted		167.4			172.8

PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	December 31, 2008			December 31, 2007
	(In Millions, Except Per Share Amounts)
ASSETS
Current Assets:
Cash and Cash Equivalents	$	369		$	240
Accounts Receivable		22			33
Like-Kind Exchange Funds Held in Escrow		48			—
Taxes Receivable		23			4
Inventories		74			82
Deferred Tax Asset		11			7
Real Estate Development Properties		4			5
Assets Held for Sale		137			64
Other Current Assets		11			21
		699			456
Timber and Timberlands, net		3,638			3,949
Property, Plant and Equipment, net		177			202
Equity Investment in Timberland Venture		199			—
Investment in Grantor Trusts (at Fair Value)		25			27
Other Assets		42			30
Total Assets	$	4,780		$	4,664
LIABILITIES
Current Liabilities:
Current Portion of Long-Term Debt	$	158		$	147
Accounts Payable		35			48
Interest Payable		30			29
Wages Payable		28			25
Taxes Payable		18			23
Deferred Revenue		17			13
Other Current Liabilities		21			18
		307			303
Long-Term Debt		1,793			1,820
Line of Credit		231			556
Note Payable to Timberland Venture		783			—
Deferred Tax Liability		4			20
Other Liabilities		90			64
Total Liabilities		3,208			2,763
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) - 166.0 at December 31, 2008, and 172.3 at December 31, 2007		2			2
Additional Paid-In Capital		2,225			2,204
Retained Earnings		149			202
Treasury Stock, at cost, Common Shares - 21.5 at December 31, 2008, and 14.6 at December 31, 2007		(773	)		(509	)
Accumulated Other Comprehensive Income (Loss)		(31	)		2
Total Stockholders’ Equity		1,572			1,901
Total Liabilities and Stockholders’ Equity	$	4,780		$	4,664

PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Twelve Months Ended
	December 31, 2008			December 31, 2007
	(In Millions)
Cash Flows From Operating Activities:
Net Income	$	233		$	282
Adjustments to Reconcile Net Income to
Net Cash Provided By Operating Activities:
Depreciation, Depletion and Amortization		135			134
(includes $10 Lumber Impairment Loss in 2008 and $4 Loss Related to Forest Fires in 2007)
Basis of Real Estate Sold		149			108
Equity Earnings from Timberland Venture		(15	)		—
Expenditures for Real Estate Development		(7	)		(19	)
Deferred Income Taxes		(10	)		(9	)
Gain on Sales of Properties and Other Assets		(3	)		(2	)
Gain on Extinguishment of Debt		(11	)		—
Deferred Revenue from Long-Term Gas Leases (Net of Amortization)		18			—
Pension Plan Contributions		(30	)		—
Working Capital Changes Impacting Cash Flow:
Like-Kind Exchange Funds		(48	)		—
Other Working Capital Changes		(8	)		8
Other		17			15
Net Cash Provided By Operating Activities		420			517
Cash Flows From Investing Activities:
Capital Expenditures (Excluding Timberland Acquisitions)		(70	)		(93	)
Timberlands Acquired		(119	)		(174	)
Proceeds from Sales of Properties and Other Assets		3			3
Investment in Timberland Venture		(9	)		—
Purchases of Marketable Securities		(7	)		—
Other		(3	)		2
Net Cash Used In Investing Activities		(205	)		(262	)
Cash Flows From Financing Activities:
Dividends		(286	)		(294	)
Borrowings on Line of Credit		1,506			2,795
Repayments on Line of Credit		(1,831	)		(2,820	)
Proceeds from Issuance of Long-Term Debt		250			350
Principal Payments and Retirement of Long-Term Debt		(258	)		(125	)
Note Payable to Timberland Venture		783			—
Proceeds from Stock Option Exercises		14			8
Acquisition of Treasury Stock		(264	)		(202	)
Net Cash Used In Financing Activities		(86	)		(288	)
Increase (Decrease) In Cash and Cash Equivalents		129			(33	)
Cash and Cash Equivalents:
Beginning of Period		240			273
End of Period	$	369		$	240
Non-Cash Investing Activity
Contribution of Timber and Timberlands to Timberland Venture	$	174		$	—

PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Quarter Ended
	December 31, 2008			December 31, 2007
	(In Millions)
Cash Flows From Operating Activities:
Net Income	$	95		$	118
Adjustments to Reconcile Net Income to
Net Cash Provided By Operating Activities:
Depreciation, Depletion and Amortization		26			32
Basis of Real Estate Sold		100			63
Equity Earnings from Timberland Venture		(15	)		—
Expenditures for Real Estate Development		(1	)		(6	)
Deferred Income Taxes		1			(2	)
Gain on Extinguishment of Debt		(11	)		—
Deferred Revenue from Long-Term Gas Leases (Net of Amortization)		1			—
Pension Plan Contributions		(23	)		—
Working Capital Changes Impacting Cash Flow:
Like-Kind Exchange Funds		21			13
Other Working Capital Changes		(7	)		(10	)
Other		8			5
Net Cash Provided By Operating Activities		195			213
Cash Flows From Investing Activities:
Capital Expenditures (Excluding Timberland Acquisitions)		(23	)		(34	)
Timberlands Acquired		(54	)		(78	)
Investment in Timberland Venture		(9	)		—
Purchases of Marketable Securities		(6	)		—
Net Cash Used In Investing Activities		(92	)		(112	)
Cash Flows From Financing Activities:
Dividends		(70	)		(72	)
Borrowings on Line of Credit		231			616
Repayments on Line of Credit		(432	)		(574	)
Principal Payments and Retirement of Long-Term Debt		(208	)		—
Note Payable to Timberland Venture		783			—
Proceeds from Stock Option Exercises		—			1
Acquisition of Treasury Stock		(213	)		—
Net Cash Provided By (Used In) Financing Activities		91			(29	)
Increase (Decrease) In Cash and Cash Equivalents		194			72
Cash and Cash Equivalents:
Beginning of Period		175			168
End of Period	$	369		$	240
Non-Cash Investing Activity
Contribution of Timber and Timberlands to Timberland Venture	$	174		$	—

EX-99.2

Exhibit 99.2

PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

	Twelve Months Ended
	December 31, 2008			December 31, 2007
	(In Millions, Except Per Share Amounts)
Revenues:
Timber	$	752		$	782
Real Estate		432			402
Manufacturing		405			471
Other		25			20
Total Revenues		1,614			1,675
Costs and Expenses:
Cost of Goods Sold:
Timber		542			523
Real Estate		178			144
Manufacturing		435			454
Other		2			3
Total Cost of Goods Sold		1,157			1,124
Selling, General and Administrative		128			127
Total Costs and Expenses		1,285			1,251
Other Operating Income (Expense), net		(1	)		—
Operating Income		328			424
Equity Earnings from Timberland Venture		15			—
Interest Expense, net:
Interest Expense (Debt Obligations to Third Parties)		134			147
Interest Expense (Note Payable to Timberland Venture)		14			—
Total Interest Expense, net		148			147
Gain on Extinguishment of Debt		11			—
Income before Income Taxes		206			277
Benefit for Income Taxes		(27	)		(3	)
Income From Continuing Operations		233			280
Gain on Sale of Properties, net of tax		—			2
Net Income	$	233		$	282
Per Share Amounts:
Income From Continuing Operations - Basic	$	1.37		$	1.60
Income From Continuing Operations - Diluted	$	1.37		$	1.60
Net Income per Share - Basic	$	1.37		$	1.61
Net Income per Share - Diluted	$	1.37		$	1.61
Weighted Average Number of Shares Outstanding
- Basic		170.3			174.5
- Diluted		170.7			175.0

PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

	Quarter Ended
	December 31, 2008			December 31, 2007
	(In Millions, Except Per Share Amounts)
Revenues:
Timber	$	165		$	193
Real Estate		215			198
Manufacturing		75			108
Other		6			5
Total Revenues		461			504
Costs and Expenses:
Cost of Goods Sold:
Timber		122			132
Real Estate		109			75
Manufacturing		90			105
Other		—			1
Total Cost of Goods Sold		321			313
Selling, General and Administrative		34			36
Total Costs and Expenses		355			349
Other Operating Income (Expense), net		(3	)		—
Operating Income		103			155
Equity Earnings from Timberland Venture		15			—
Interest Expense, net:
Interest Expense (Debt Obligations to Third Parties)		29			38
Interest Expense (Note Payable to Timberland Venture)		14			—
Total Interest Expense, net		43			38
Gain on Extinguishment of Debt		11			—
Income before Income Taxes		86			117
Benefit for Income Taxes		(9	)		(1	)
Net Income	$	95		$	118
Per Share Amounts:
Net Income per Share - Basic	$	0.57		$	0.68
Net Income per Share - Diluted	$	0.57		$	0.68
Weighted Average Number of Shares Outstanding
- Basic		167.2			172.3
- Diluted		167.4			172.8

PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	December 31, 2008			December 31, 2007
	(In Millions, Except Per Share Amounts)
ASSETS
Current Assets:
Cash and Cash Equivalents	$	369		$	240
Accounts Receivable		22			33
Like-Kind Exchange Funds Held in Escrow		48			—
Taxes Receivable		23			4
Inventories		74			82
Deferred Tax Asset		11			7
Real Estate Development Properties		4			5
Assets Held for Sale		137			64
Other Current Assets		11			21
		699			456
Timber and Timberlands, net		3,638			3,949
Property, Plant and Equipment, net		177			202
Equity Investment in Timberland Venture		199			—
Investment in Grantor Trusts (at Fair Value)		25			27
Other Assets		42			30
Total Assets	$	4,780		$	4,664
LIABILITIES
Current Liabilities:
Current Portion of Long-Term Debt	$	158		$	147
Accounts Payable		35			48
Interest Payable		30			29
Wages Payable		28			25
Taxes Payable		18			23
Deferred Revenue		17			13
Other Current Liabilities		21			18
		307			303
Long-Term Debt		1,793			1,820
Line of Credit		231			556
Note Payable to Timberland Venture		783			—
Deferred Tax Liability		4			20
Other Liabilities		90			64
Total Liabilities		3,208			2,763
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) - 166.0 at December 31, 2008, and 172.3 at December 31, 2007		2			2
Additional Paid-In Capital		2,225			2,204
Retained Earnings		149			202
Treasury Stock, at cost, Common Shares - 21.5 at December 31, 2008, and 14.6 at December 31, 2007		(773	)		(509	)
Accumulated Other Comprehensive Income (Loss)		(31	)		2
Total Stockholders’ Equity		1,572			1,901
Total Liabilities and Stockholders’ Equity	$	4,780		$	4,664

PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Twelve Months Ended
	December 31, 2008			December 31, 2007
	(In Millions)
Cash Flows From Operating Activities:
Net Income	$	233		$	282
Adjustments to Reconcile Net Income to
Net Cash Provided By Operating Activities:
Depreciation, Depletion and Amortization		135			134
(includes $10 Lumber Impairment Loss in 2008 and $4 Loss Related to Forest Fires in 2007)
Basis of Real Estate Sold		149			108
Equity Earnings from Timberland Venture		(15	)		—
Expenditures for Real Estate Development		(7	)		(19	)
Deferred Income Taxes		(10	)		(9	)
Gain on Sales of Properties and Other Assets		(3	)		(2	)
Gain on Extinguishment of Debt		(11	)		—
Deferred Revenue from Long-Term Gas Leases (Net of Amortization)		18			—
Pension Plan Contributions		(30	)		—
Working Capital Changes Impacting Cash Flow:
Like-Kind Exchange Funds		(48	)		—
Other Working Capital Changes		(8	)		8
Other		17			15
Net Cash Provided By Operating Activities		420			517
Cash Flows From Investing Activities:
Capital Expenditures (Excluding Timberland Acquisitions)		(70	)		(93	)
Timberlands Acquired		(119	)		(174	)
Proceeds from Sales of Properties and Other Assets		3			3
Investment in Timberland Venture		(9	)		—
Purchases of Marketable Securities		(7	)		—
Other		(3	)		2
Net Cash Used In Investing Activities		(205	)		(262	)
Cash Flows From Financing Activities:
Dividends		(286	)		(294	)
Borrowings on Line of Credit		1,506			2,795
Repayments on Line of Credit		(1,831	)		(2,820	)
Proceeds from Issuance of Long-Term Debt		250			350
Principal Payments and Retirement of Long-Term Debt		(258	)		(125	)
Note Payable to Timberland Venture		783			—
Proceeds from Stock Option Exercises		14			8
Acquisition of Treasury Stock		(264	)		(202	)
Net Cash Used In Financing Activities		(86	)		(288	)
Increase (Decrease) In Cash and Cash Equivalents		129			(33	)
Cash and Cash Equivalents:
Beginning of Period		240			273
End of Period	$	369		$	240
Non-Cash Investing Activity
Contribution of Timber and Timberlands to Timberland Venture	$	174		$	—

PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Quarter Ended
	December 31, 2008			December 31, 2007
	(In Millions)
Cash Flows From Operating Activities:
Net Income	$	95		$	118
Adjustments to Reconcile Net Income to
Net Cash Provided By Operating Activities:
Depreciation, Depletion and Amortization		26			32
Basis of Real Estate Sold		100			63
Equity Earnings from Timberland Venture		(15	)		—
Expenditures for Real Estate Development		(1	)		(6	)
Deferred Income Taxes		1			(2	)
Gain on Extinguishment of Debt		(11	)		—
Deferred Revenue from Long-Term Gas Leases (Net of Amortization)		1			—
Pension Plan Contributions		(23	)		—
Working Capital Changes Impacting Cash Flow:
Like-Kind Exchange Funds		21			13
Other Working Capital Changes		(7	)		(10	)
Other		8			5
Net Cash Provided By Operating Activities		195			213
Cash Flows From Investing Activities:
Capital Expenditures (Excluding Timberland Acquisitions)		(23	)		(34	)
Timberlands Acquired		(54	)		(78	)
Investment in Timberland Venture		(9	)		—
Purchases of Marketable Securities		(6	)		—
Net Cash Used In Investing Activities		(92	)		(112	)
Cash Flows From Financing Activities:
Dividends		(70	)		(72	)
Borrowings on Line of Credit		231			616
Repayments on Line of Credit		(432	)		(574	)
Principal Payments and Retirement of Long-Term Debt		(208	)		—
Note Payable to Timberland Venture		783			—
Proceeds from Stock Option Exercises		—			1
Acquisition of Treasury Stock		(213	)		—
Net Cash Provided By (Used In) Financing Activities		91			(29	)
Increase (Decrease) In Cash and Cash Equivalents		194			72
Cash and Cash Equivalents:
Beginning of Period		175			168
End of Period	$	369		$	240
Non-Cash Investing Activity
Contribution of Timber and Timberlands to Timberland Venture	$	174		$	—

Plum Creek Timber Company, Inc.

Segment Data

(Unaudited)

	Twelve Months 2008			Twelve Months 2007
	(In Millions)
Revenues:
Northern Resources	$	347		$	361
Southern Resources		461			492
Real Estate		432			402
Manufacturing		405			471
Other		25			20
Eliminations		(56	)		(71	)
Total Revenues	$	1,614		$	1,675
Operating Income (Loss)
Northern Resources	$	41		$	58
Southern Resources		128			161
Real Estate		245			250
Manufacturing		(44	)		2
Other		23			17
Other Costs and Eliminations		(64	)		(64	)
Other Operating Income (Expense), net		(1	)		—
Total Operating Income	$	328		$	424

Plum Creek Timber Company, Inc.

Segment Data

(Unaudited)

	Fourth Quarter 2008			Fourth Quarter 2007
	(In Millions)
Revenues:
Northern Resources	$	84		$	97
Southern Resources		95			118
Real Estate		215			198
Manufacturing		75			108
Other		6			5
Eliminations		(14	)		(22	)
Total Revenues	$	461		$	504
Operating Income (Loss)
Northern Resources	$	8		$	17
Southern Resources		25			35
Real Estate		104			121
Manufacturing		(20	)		(1	)
Other		6			4
Other Costs and Eliminations		(17	)		(21	)
Other Operating Income (Expense), net		(3	)		—
Total Operating Income	$	103		$	155

Plum Creek Timber Company, Inc

Selected Operating Statistics

(Unaudited)

		2008										2007
		1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		YTD		1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		YTD
Sales Realization	Units
Southern Resources
Sawlog	$/Ton Stumpage	$	29	$	26	$	25	$	26	$	26	$	32	$	31	$	31	$	30	$	31
Pulpwood	$/Ton Stumpage	$	10	$	10	$	10	$	12	$	10	$	9	$	9	$	9	$	9	$	9
Northern Resources
Sawlog	$/Ton Delivered	$	67	$	68	$	74	$	68	$	69	$	71	$	76	$	76	$	71	$	73
Pulpwood	$/Ton Delivered	$	39	$	43	$	45	$	44	$	43	$	37	$	38	$	36	$	38	$	37
Lumber (1)	$/MBF	$	366	$	367	$	384	$	367	$	371	$	390	$	400	$	405	$	410	$	400
Plywood (1)	$/MSF	$	398	$	404	$	396	$	382	$	397	$	398	$	407	$	416	$	399	$	405
Fiberboard (1)	$/MSF	$	591	$	600	$	610	$	625	$	604	$	490	$	529	$	542	$	538	$	525
Sales Volume
Southern Resources
Sawlog	1,000 Tons		1,459		1,666		1,425		1,020		5,570		1,681		1,691		1,639		1,401		6,412
Pulpwood	1,000 Tons		1,976		2,221		2,089		1,741		8,027		1,954		1,901		1,841		2,020		7,716
Total Harvest			3,435		3,887		3,514		2,761		13,597		3,635		3,592		3,480		3,421		14,128
Northern Resources
Sawlog	1,000 Tons		978		739		828		821		3,366		960		789		821		1,032		3,602
Pulpwood	1,000 Tons		738		504		725		649		2,616		819		527		635		645		2,626
Total Harvest			1,716		1,243		1,553		1,470		5,982		1,779		1,316		1,456		1,677		6,228
Lumber	MBF		69,596		83,477		74,100		62,660		289,833		95,265		95,701		82,217		77,248		350,431
Plywood	MSF		68,746		68,616		62,112		37,509		236,983		72,582		72,454		69,796		62,614		277,446
Fiberboard	MSF		58,784		63,205		44,371		31,071		197,431		64,872		65,938		64,039		59,179		254,028

(1) Represents prices at mill level.

Plum Creek Timber Company, Inc.

Land Sale Statistics

(Unaudited)

	2008										2007
	1st Qtr		2nd Qtr		3rd Qtr		4th Qtr (1)		YTD		1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		YTD
Acres Sold
Small Non-strategic		17,145		13,215		14,800		47,125		92,285		8,645		21,255		30,735		16,895		77,530
Large Non-strategic		—		—		—		—		—		—		—		—		99,325		99,325
Conservation		1,015		595		39,880		134,250		175,740		4,210		480		2,650		24,505		31,845
HBU/Recreation		10,635		11,785		15,640		7,550		45,610		3,750		8,695		10,400		14,220		37,065
Development Properties		65		700		10		45		820		45		595		890		3,760		5,290
Conservation Easements		n/a		n/a		n/a		n/a		n/a		n/a		n/a		n/a		n/a		n/a
		28,860		26,295		70,330		188,970		314,455		16,650		31,025		44,675		158,705		251,055
Price per Acre
Small Non-strategic	$	1,180	$	1,285	$	1,145	$	745	$	965	$	1,445	$	1,295	$	1,400	$	1,510	$	1,400
Large Non-strategic		—		—		—		—		—		—		—		—	$	705	$	705
Conservation	$	395	$	1,555	$	1,035	$	1,170	$	1,140	$	1,740	$	6,660	$	2,150	$	1,080	$	1,340
HBU/Recreation	$	2,875	$	2,740	$	3,220	$	2,965	$	2,975	$	4,300	$	3,150	$	3,675	$	3,315	$	3,475
Development Properties	$	5,825	$	9,630	$	13,130	$	4,095	$	8,770	$	22,045	$	21,260	$	8,410	$	7,640	$	9,440
Conservation Easements		—		—		—		—		—		—		—		—		—		—
Revenue, ($ millions)
Small Non-strategic	$	20	$	17	$	17	$	35	$	89	$	13	$	28	$	43	$	26	$	110
Large Non-strategic		—		—		—		—		—		—		—		—	$	70	$	70
Conservation		—	$	1	$	41	$	157	$	200	$	7	$	3	$	6	$	26	$	42
HBU/Recreation	$	31	$	32	$	50	$	22	$	136	$	16	$	27	$	38	$	47	$	128
Development Properties		—	$	7		—		—	$	7	$	1	$	13	$	7	$	29	$	50
Conservation Easements		—		—		—		—		—		—		—		—		—		—
	$	52	$	57	$	108	$	215	$	432	$	37	$	71	$	94	$	198	$	400
Proceeds from Joint Ventures (2)		—		—		—		—		—	$	2		—		—		—	$	2
Basis of Real Estate Sold (3)	$	10	$	13	$	26	$	100	$	149	$	9	$	14	$	22	$	63	$	108

(1) During the 4th quarter of 2008 we sold 130,000 acres in Montana to a conservation buyer for $150 million. The sale is presented as a Conservation sale. The transaction included 59,000 acres of Conservation property, 51,000 acres of Small Non-strategic property, 16,000 acres of HBU/ Recreation property, and 4,000 acres of Development property.

(2) Not reflected in the Land Sale Statistics (Acres Sold, Price per Acre and Revenue)

(3) Includes $75 million in the fourth quarter of 2008 for a 130,000 acre conservation sale in Montana and $26 million in the fourth quarter of 2007 for a large non-strategic sale in Wisconsin.

PLUM CREEK TIMBER COMPANY, INC.

DEBT MATURITIES SCHEDULE

December 31, 2008

(UNAUDITED)

	Borrowings (1)
	Principal	Weighted Avg. Interest Rate
Quarterly Maturities through 2010:
1st Qtr 2009	49	7.670%
3rd Qtr 2009	109	8.730%
1st Qtr 2010	52	5.480%
4th Qtr 2010	4	8.050%
Annual Maturities through 2014:
2011	416	7.739%	(2)
2012	604	—	(3)
2013	250	6.663%	(4)
2014	4	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 $74 million, $4 million, $290 million and $48 million and interest rates of 7.970%, 8.050%, 7.660% and 7.830%, respectively.

(3) Includes $600 million of maturities for the company’s two term credit agreements and senior notes with principal of $4 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 $4 million, $72 million and $174 million and interest rates of 8.050%, 7.760% and 6.180%, respectively.

Plum Creek Timber Company, Inc

Acreage Ownership by State

(Unaudited)

	December 31, 2008
Alabama	100,000
Arkansas	773,000
Florida	600,000
Georgia	784,000
Louisiana	473,000
Maine	929,000
Michigan	602,000
Mississippi	686,000
Montana	1,089,000
New Hampshire	33,000
North Carolina	9,000
Oklahoma	6,000
Oregon	430,000
South Carolina	189,000
Texas	47,000
Vermont	86,000
Washington	121,000
West Virginia	112,000
Wisconsin	320,000
Total	7,389,000