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): July 27, 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 July 27, 2009, Plum Creek Timber Company, Inc. issued a press release reporting its results of operations for the quarter ended June 30, 2009, and posted to its website (www.plumcreek.com) certain supplemental financial and statistical information for the quarter ended June 30, 2009. 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 July 27, 2009, reporting results of operations for the quarter ended June 30, 2009.
99.2	Supplemental Financial and Statistical Information for the quarter ended June 30, 2009, posted on July 27, 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: July 27, 2009

PLUM CREEK TIMBER COMPANY, INC.

Exhibit Index

Exhibit No.
99.1	Press release of Plum Creek Timber Company, Inc. issued July 27, 2009, reporting results of operations for the quarter ended June 30, 2009.
99.2	Supplemental Financial and Statistical Information for the quarter ended June 30, 2009, posted on July 27, 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 immediate release July 27, 2009	For more information contact: Investors: John Hobbs 1-800-858-5347 Media: Kathy Budinick 1-888-467-3751

Plum Creek Timber Company, Inc. Reports Results for Second Quarter 2009

SEATTLE – Plum Creek Timber Company, Inc. (NYSE: PCL) today announced second quarter earnings of $32 million, or $0.19 per diluted share, on revenues of $272 million. Earnings for the second quarter include a $23 million gain, $0.14 per share, from the sale of 59,000 acres of Wisconsin timberland. Earnings for the second quarter of 2008 were $31 million, or $0.18 per diluted share, on revenues of $376 million. These 2008 results included the effect of a $6 million after-tax ($10 million pre-tax) impairment charge related to the company’s lumber manufacturing business. The impairment charge reduced 2008 net income by $0.04 per diluted share.

Earnings for the first six months of 2009 were $189 million, or $1.15 per diluted share, on revenues of $742 million. Results for the first six months of 2009 include the effect of a $7 million after-tax ($12 million pre-tax) impairment charge related to the company’s lumber manufacturing business, which reduced net income by $0.04 per diluted share, and approximately $2 million after tax ($4 million pre tax) of severance costs, reducing net income by $0.01 per share. The results for the first six months also benefited from the reversal of prior period tax expenses and a reduction in deferred tax liability. These changes resulted in a one-time tax benefit of approximately $8 million, or $0.05 per share.

Earnings for the first six months of 2008 were $69 million, or $0.40 per diluted share, on revenues of $739 million. Results for the first six months of 2008 included the $0.04 per diluted share charge from the lumber manufacturing impairment.

Cash provided by operating activities for the second quarter of 2009 totaled $110 million. Cash provided by operating activities during the second quarter of 2008 totaled $95 million. The company ended the quarter with $347 million in cash and cash equivalents.

“Our second-quarter results were better than we initially anticipated, although market conditions remained difficult,” said Rick Holley, Plum Creek’s president and chief executive officer. “Our bottom line reflects some benefit from downsizing our manufacturing operations and slightly better sales activity for higher and better use rural lands. Within our timber businesses, we maintained our flexibility, adjusting our harvest to preserve our most valuable sawlogs. In addition, we captured good value from a sale of 59,000 acres of timberland in Wisconsin. This transaction allowed us to monetize these lands and use the proceeds to retire debt. Taking into account the debt retirement, the transaction is both cash and earnings accretive on an ongoing basis.”

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Plum Creek Timber Company Reports Results

Page 2

Review of Operations

The Northern Resources segment reported an operating loss of $7 million compared to an operating profit of $7 million during the same period of 2008. The second quarter is seasonally the weakest quarter in the Northern Resources segment as the spring thaw limits harvesting activity throughout the northern tier states. Timber prices have weakened significantly over the past year as residential construction activity reached new lows and the broader economy weakened. Average sawlog prices were 26 percent lower, and average pulpwood prices were 11 percent lower than they were during the second quarter of 2008. The company responded to these low log prices by deferring the harvest of its most valuable trees, reducing its second-quarter sawlog harvest by 368,000 tons, or 50 percent, compared to the same period of 2008. In addition, the pulpwood harvest was reduced 107,000 tons, or 21 percent, when compared to the second quarter of 2008. The decision to defer the harvest reduced second-quarter earnings by approximately $9 million, but preserves and enhances the earnings potential of the standing timber as the trees continue to grow and log prices recover from current levels.

Operating profit in the Southern Resources segment was $23 million compared to a $37 million profit reported during the same period of 2008. The company reduced its second-quarter sawlog harvest 449,000 tons, or 27 percent, from the same period of 2008. A portion of the harvest reduction resulted from the company’s fourth-quarter 2008 contribution of certain Southern timberlands to a venture with The Campbell Group. These lands accounted for 308,000 tons of the sawlog harvest and 261,000 tons of the pulpwood harvest in the second quarter of 2008. The balance of the Southern sawlog harvest decline was primarily due to harvest deferrals as sawlog prices were 15 percent lower than the prior-year period. Average pulpwood prices declined 3 percent compared to the second quarter of 2008. As planned, the company reduced its second-quarter pulpwood harvest by approximately 370,000 tons, or 17 percent, from the same period of 2008.

The Real Estate segment reported total revenue of $78 million and operating income of $44 million. Second quarter 2008 Real Estate segment revenue was $57 million resulting in operating income of $35 million. The 59,000 acre Wisconsin sale contributed approximately $38 million of revenue and approximately $23 million to the segment’s income. The proceeds from the transaction were used to retire debt during the second quarter.

The balance of the Real Estate segment revenue was $40 million and contributed $21 million to the segment’s operating income. Excluding the Wisconsin sale, approximately 25,000 acres were sold during the second quarter of 2009, similar to the 26,000 acres sold during the same period of 2008. The 2009 rural land sales consisted of approximately 9,800 acres of small, non-strategic timberlands valued at approximately $900 per acre while sales of nearly 11,000 acres of recreation lands captured average values of $2,200 per acre. Nearly 4,000 acres of conservation lands were sold for approximately $1,700 per acre.

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Plum Creek Timber Company Reports Results

Page 3

The Manufacturing segment reported breakeven results for the second quarter of 2009. During the second quarter of 2008 the segment reported an $11 million loss, which included a non-cash $10 million pre-tax impairment charge of lumber manufacturing operations. Sales volumes in each product line declined significantly from the second quarter of 2008. Over the past year, the company permanently closed two lumber mills and significantly curtailed production at its remaining lumber facilities in order to match production to weak market demand. Lumber sales volumes were 28 percent lower than the second quarter of 2008 and lumber prices were 7 percent lower. The company also reduced production in its medium density fiberboard (MDF) and plywood mills in response to weak demand. Volumes declined 48 percent for MDF and 41 percent for plywood. Average sales prices were down only slightly for MDF and down 13 percent for plywood when compared to the same period of 2008.

Debt Retirement

As noted earlier, the company used $38 million of proceeds from the sale of Wisconsin lands to retire debt as follows:

• Permanently retired $33 million private-placement debt at par. The debt was scheduled to mature during the fourth quarter of 2011 and carried a weighted average interest rate of 7.88 percent;

• Paid down $5 million on the line of credit.

Outlook

The company continues to defer harvests in response to weak pricing and lower demand. Harvest levels in both the Northern and Southern Resources segments are expected to remain below the levels of the third quarter of 2008. For the full year, the company expects to be on the low end of its expected harvest range of 15.5 to 16.5 million tons.

The third-quarter Real Estate segment sales are expected to be between $50 million and $70 million. The company expects full-year Real Estate segment sales, including the revenues from the second-quarter Wisconsin sale, to be between $460 million and $480 million.

Manufacturing results are expected to remain near breakeven as the company manages production to match current demand.

Third-quarter earnings are expected to be between $0.05 and $0.10 per share. The company expects to report earnings between $1.25 and $1.40 per share for the full year including the effect of the Wisconsin land sale.

“Our extensive asset base, liquidity position and strong balance sheet allow us to take measured responses during this recession while maintaining our commitments to our customers and investors,” Holley concluded. “Our day-to-day operating decisions are aimed at preserving the long-term value of our timber and land assets. We continue to defer the harvest of our most valuable trees. We sell conservation, recreation or non-strategic lands only when the sale captures superior value. We’ve right-sized our manufacturing operations to meet current demand and operate efficiently.

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Plum Creek Timber Company Reports Results

Page 4

“Effective capital allocation remains our top priority and is a key component of our ability to provide investors with superior long-term returns. We’re maintaining our capital discipline, opportunistically selling certain assets at good value and redeploying the capital to attractive capital allocation opportunities such as debt retirement. We take these actions with a long-term, strategic view and only pursue them when they are cash accretive and provide attractive, risk-adjusted returns for our investors.”

Earnings Conference Call and Supplemental Information

Plum Creek will hold a conference call today, July 27, at 5 p.m. EDT (2 p.m. PDT). A live webcast of the conference call may be accessed through Plum Creek’s Web 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 time, referencing Plum Creek’s earnings. Those wishing to access the call from outside the United States/Canada should dial 1-706-645-9676, also referencing Plum Creek’s earnings. 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 73942043.

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 private landowner in the nation with approximately 7 million acres of timberlands in major timber producing regions of the United States and 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 or disposition 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.

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PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

	Six Months Ended
	June 30, 2009			June 30, 2008
	(In Millions, Except Per Share Amounts)
Revenues:
Timber	$	262		$	393
Real Estate		346			109
Manufacturing		124			226
Other		10			11
Total Revenues		742			739
Costs and Expenses:
Cost of Goods Sold:
Timber		206			276
Real Estate		128			36
Manufacturing		140			240
Other		1			1
Total Cost of Goods Sold		475			553
Selling, General and Administrative		55			63
Total Costs and Expenses		530			616
Other Operating Income (Expense), net		—			3
Operating Income		212			126
Equity Earnings from Timberland Venture		29			—
Interest Expense, net:
Interest Expense (Debt Obligations to Unrelated Parties)		47			70
Interest Expense (Note Payable to Timberland Venture)		29			—
Total Interest Expense, net		76			70
Gain on Extinguishment of Debt		1			—
Income before Income Taxes		166			56
Benefit for Income Taxes		(23	)		(13	)
Net Income	$	189		$	69
Per Share Amounts:
Net Income per Share - Basic	$	1.15		$	0.40
Net Income per Share - Diluted	$	1.15		$	0.40
Weighted Average Number of Shares Outstanding
- Basic		163.8			171.4
- Diluted		163.9			171.8

PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

	Quarter Ended
	June 30, 2009			June 30, 2008
	(In Millions, Except Per Share Amounts)
Revenues:
Timber	$	123		$	192
Real Estate		78			57
Manufacturing		66			121
Other		5			6
Total Revenues		272			376
Costs and Expenses:
Cost of Goods Sold:
Timber		98			137
Real Estate		33			20
Manufacturing		64			128
Other		1			1
Total Cost of Goods Sold		196			286
Selling, General and Administrative		23			33
Total Costs and Expenses		219			319
Other Operating Income (Expense), net		—			—
Operating Income		53			57
Equity Earnings from Timberland Venture		14			—
Interest Expense, net:
Interest Expense (Debt Obligations to Unrelated Parties)		23			34
Interest Expense (Note Payable to Timberland Venture)		15			—
Total Interest Expense, net		38			34
Income before Income Taxes		29			23
Benefit for Income Taxes		(3	)		(8	)
Net Income	$	32		$	31
Per Share Amounts:
Net Income per Share - Basic	$	0.19		$	0.18
Net Income per Share - Diluted	$	0.19		$	0.18
Weighted Average Number of Shares Outstanding
- Basic		162.8			171.1
- Diluted		162.9			171.6

PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	June 30,     2009			December 31, 2008
	(In Millions, Except Per Share Amounts)
ASSETS
Current Assets:
Cash and Cash Equivalents	$	347		$	369
Accounts Receivable		34			22
Like-Kind Exchange Funds Held in Escrow		—			48
Taxes Receivable		6			23
Inventories		53			74
Deferred Tax Asset		9			11
Real Estate Development Properties		3			4
Assets Held for Sale		87			137
Other Current Assets		15			11
		554			699
Timber and Timberlands, net		3,565			3,638
Property, Plant and Equipment, net		160			177
Equity Investment in Timberland Venture		203			199
Deferred Tax Asset		19			—
Investment in Grantor Trusts (at Fair Value)		26			25
Other Assets		41			42
Total Assets	$	4,568		$	4,780
LIABILITIES
Current Liabilities:
Current Portion of Long-Term Debt	$	110		$	158
Accounts Payable		31			35
Interest Payable		27			30
Wages Payable		15			28
Taxes Payable		19			18
Deferred Revenue		26			17
Other Current Liabilities		16			21
		244			307
Long-Term Debt		1,703			1,793
Line of Credit		206			231
Note Payable to Timberland Venture		783			783
Deferred Tax Liability		—			4
Other Liabilities		90			90
Total Liabilities		3,026			3,208
Commitments and Contingencies
STOCKHOLDERS’ EQUITY
Preferred Stock, $0.01 par value, authorized shares - 75.0, outstanding - none		—			—
Common Stock, $0.01 par value, authorized shares - 300.6, outstanding (net of Treasury Stock) - 162.8 at June 30, 2009, and 166.0 at December 31, 2008		2			2
Additional Paid-In Capital		2,230			2,225
Retained Earnings		200			149
Treasury Stock, at cost, Common Shares - 24.8 at June 30, 2009, and 21.5 at December 31, 2008		(860	)		(773	)
Accumulated Other Comprehensive Income (Loss)		(30	)		(31	)
Total Stockholders’ Equity		1,542			1,572
Total Liabilities and Stockholders’ Equity	$	4,568		$	4,780

PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Six Months Ended
	June 30, 2009			June 30, 2008
	(In Millions)
Cash Flows From Operating Activities:
Net Income	$	189		$	69
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Depreciation, Depletion and Amortization (includes $10 Lumber Impairment Loss in 2009 and 2008)		57			76
Basis of Real Estate Sold		118			22
Equity Earnings from Timberland Venture		(29	)		—
Distribution from Timberland Venture		25			—
Expenditures for Real Estate Development		(1	)		(5	)
Deferred Income Taxes		(21	)		(8	)
Gain on Extinguishment of Debt		(1	)		—
Deferred Revenue from Long-Term Gas Leases (Net of Amortization)		(4	)		18
Working Capital Changes Impacting Cash Flow:
Like-Kind Exchange Funds		48			(61	)
Income Tax Receivable		17			—
Other Working Capital Changes		(8	)		(17	)
Other		4			—
Net Cash Provided By Operating Activities		394			94
Cash Flows From Investing Activities:
Capital Expenditures (Excluding Timberland Acquisitions)		(28	)		(29	)
Timberlands Acquired		—			(1	)
Net Cash Used In Investing Activities		(28	)		(30	)
Cash Flows From Financing Activities:
Dividends		(138	)		(144	)
Borrowings on Line of Credit		431			755
Repayments on Line of Credit		(456	)		(942	)
Proceeds from Issuance of Long-Term Debt		—			250
Principal Payments and Retirement of Long-Term Debt		(138	)		(47	)
Proceeds from Stock Option Exercises		—			1
Acquisition of Treasury Stock		(87	)		(51	)
Other		—			(1	)
Net Cash Used In Financing Activities		(388	)		(179	)
Increase (Decrease) In Cash and Cash Equivalents		(22	)		(115	)
Cash and Cash Equivalents:
Beginning of Period		369			240
End of Period	$	347		$	125

PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Quarter Ended
	June 30, 2009			June 30, 2008
	(In Millions)
Cash Flows From Operating Activities:
Net Income	$	32		$	31
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Depreciation, Depletion and Amortization (includes $10 Lumber Impairment Loss in 2008)		24			43
Basis of Real Estate Sold		29			12
Equity Earnings from Timberland Venture		(14	)		—
Expenditures for Real Estate Development		(1	)		(2	)
Deferred Income Taxes		(4	)		(6	)
Deferred Revenue from Long-Term Gas Leases (Net of Amortization)		(2	)		18
Working Capital Changes Impacting Cash Flow:
Like-Kind Exchange Funds		3			(30	)
Income Tax Receivable		18			—
Other Working Capital Changes		22			22
Other		3			7
Net Cash Provided By Operating Activities		110			95
Cash Flows From Investing Activities:
Capital Expenditures (Excluding Timberland Acquisitions)		(11	)		(16	)
Net Cash Used In Investing Activities		(11	)		(16	)
Cash Flows From Financing Activities:
Dividends		(69	)		(72	)
Borrowings on Line of Credit		206			278
Repayments on Line of Credit		(211	)		(278	)
Principal Payments and Retirement of Long-Term Debt		(33	)		—
Proceeds from Stock Option Exercises		—			1
Other		—			(1	)
Net Cash Used In Financing Activities		(107	)		(72	)
Increase (Decrease) In Cash and Cash Equivalents		(8	)		7
Cash and Cash Equivalents:
Beginning of Period		355			118
End of Period	$	347		$	125

EX-99.2

Exhibit 99.2

PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

	Six Months Ended
	June 30, 2009			June 30, 2008
	(In Millions, Except Per Share Amounts)
Revenues:
Timber	$	262		$	393
Real Estate		346			109
Manufacturing		124			226
Other		10			11
Total Revenues		742			739
Costs and Expenses:
Cost of Goods Sold:
Timber		206			276
Real Estate		128			36
Manufacturing		140			240
Other		1			1
Total Cost of Goods Sold		475			553
Selling, General and Administrative		55			63
Total Costs and Expenses		530			616
Other Operating Income (Expense), net		—			3
Operating Income		212			126
Equity Earnings from Timberland Venture		29			—
Interest Expense, net:
Interest Expense (Debt Obligations to Unrelated Parties)		47			70
Interest Expense (Note Payable to Timberland Venture)		29			—
Total Interest Expense, net		76			70
Gain on Extinguishment of Debt		1			—
Income before Income Taxes		166			56
Benefit for Income Taxes		(23	)		(13	)
Net Income	$	189		$	69
Per Share Amounts:
Net Income per Share - Basic	$	1.15		$	0.40
Net Income per Share - Diluted	$	1.15		$	0.40
Weighted Average Number of Shares Outstanding
- Basic		163.8			171.4
- Diluted		163.9			171.8

PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

	Quarter Ended
	June 30, 2009			June 30, 2008
	(In Millions, Except Per Share Amounts)
Revenues:
Timber	$	123		$	192
Real Estate		78			57
Manufacturing		66			121
Other		5			6
Total Revenues		272			376
Costs and Expenses:
Cost of Goods Sold:
Timber		98			137
Real Estate		33			20
Manufacturing		64			128
Other		1			1
Total Cost of Goods Sold		196			286
Selling, General and Administrative		23			33
Total Costs and Expenses		219			319
Other Operating Income (Expense), net		—			—
Operating Income		53			57
Equity Earnings from Timberland Venture		14			—
Interest Expense, net:
Interest Expense (Debt Obligations to Unrelated Parties)		23			34
Interest Expense (Note Payable to Timberland Venture)		15			—
Total Interest Expense, net		38			34
Income before Income Taxes		29			23
Benefit for Income Taxes		(3	)		(8	)
Net Income	$	32		$	31
Per Share Amounts:
Net Income per Share - Basic	$	0.19		$	0.18
Net Income per Share - Diluted	$	0.19		$	0.18
Weighted Average Number of Shares Outstanding
- Basic		162.8			171.1
- Diluted		162.9			171.6

PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	June 30,     2009			December 31, 2008
	(In Millions, Except Per Share Amounts)
ASSETS
Current Assets:
Cash and Cash Equivalents	$	347		$	369
Accounts Receivable		34			22
Like-Kind Exchange Funds Held in Escrow		—			48
Taxes Receivable		6			23
Inventories		53			74
Deferred Tax Asset		9			11
Real Estate Development Properties		3			4
Assets Held for Sale		87			137
Other Current Assets		15			11
		554			699
Timber and Timberlands, net		3,565			3,638
Property, Plant and Equipment, net		160			177
Equity Investment in Timberland Venture		203			199
Deferred Tax Asset		19			—
Investment in Grantor Trusts (at Fair Value)		26			25
Other Assets		41			42
Total Assets	$	4,568		$	4,780
LIABILITIES
Current Liabilities:
Current Portion of Long-Term Debt	$	110		$	158
Accounts Payable		31			35
Interest Payable		27			30
Wages Payable		15			28
Taxes Payable		19			18
Deferred Revenue		26			17
Other Current Liabilities		16			21
		244			307
Long-Term Debt		1,703			1,793
Line of Credit		206			231
Note Payable to Timberland Venture		783			783
Deferred Tax Liability		—			4
Other Liabilities		90			90
Total Liabilities		3,026			3,208
Commitments and Contingencies
STOCKHOLDERS’ EQUITY
Preferred Stock, $0.01 par value, authorized shares - 75.0, outstanding - none		—			—
Common Stock, $0.01 par value, authorized shares - 300.6, outstanding (net of Treasury Stock) - 162.8 at June 30, 2009, and 166.0 at December 31, 2008		2			2
Additional Paid-In Capital		2,230			2,225
Retained Earnings		200			149
Treasury Stock, at cost, Common Shares - 24.8 at June 30, 2009, and 21.5 at December 31, 2008		(860	)		(773	)
Accumulated Other Comprehensive Income (Loss)		(30	)		(31	)
Total Stockholders’ Equity		1,542			1,572
Total Liabilities and Stockholders’ Equity	$	4,568		$	4,780

PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Six Months Ended
	June 30, 2009			June 30, 2008
	(In Millions)
Cash Flows From Operating Activities:
Net Income	$	189		$	69
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Depreciation, Depletion and Amortization (includes $10 Lumber Impairment Loss in 2009 and 2008)		57			76
Basis of Real Estate Sold		118			22
Equity Earnings from Timberland Venture		(29	)		—
Distribution from Timberland Venture		25			—
Expenditures for Real Estate Development		(1	)		(5	)
Deferred Income Taxes		(21	)		(8	)
Gain on Extinguishment of Debt		(1	)		—
Deferred Revenue from Long-Term Gas Leases (Net of Amortization)		(4	)		18
Working Capital Changes Impacting Cash Flow:
Like-Kind Exchange Funds		48			(61	)
Income Tax Receivable		17			—
Other Working Capital Changes		(8	)		(17	)
Other		4			—
Net Cash Provided By Operating Activities		394			94
Cash Flows From Investing Activities:
Capital Expenditures (Excluding Timberland Acquisitions)		(28	)		(29	)
Timberlands Acquired		—			(1	)
Net Cash Used In Investing Activities		(28	)		(30	)
Cash Flows From Financing Activities:
Dividends		(138	)		(144	)
Borrowings on Line of Credit		431			755
Repayments on Line of Credit		(456	)		(942	)
Proceeds from Issuance of Long-Term Debt		—			250
Principal Payments and Retirement of Long-Term Debt		(138	)		(47	)
Proceeds from Stock Option Exercises		—			1
Acquisition of Treasury Stock		(87	)		(51	)
Other		—			(1	)
Net Cash Used In Financing Activities		(388	)		(179	)
Increase (Decrease) In Cash and Cash Equivalents		(22	)		(115	)
Cash and Cash Equivalents:
Beginning of Period		369			240
End of Period	$	347		$	125

PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Quarter Ended
	June 30, 2009			June 30, 2008
	(In Millions)
Cash Flows From Operating Activities:
Net Income	$	32		$	31
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Depreciation, Depletion and Amortization (includes $10 Lumber Impairment Loss in 2008)		24			43
Basis of Real Estate Sold		29			12
Equity Earnings from Timberland Venture		(14	)		—
Expenditures for Real Estate Development		(1	)		(2	)
Deferred Income Taxes		(4	)		(6	)
Deferred Revenue from Long-Term Gas Leases (Net of Amortization)		(2	)		18
Working Capital Changes Impacting Cash Flow:
Like-Kind Exchange Funds		3			(30	)
Income Tax Receivable		18			—
Other Working Capital Changes		22			22
Other		3			7
Net Cash Provided By Operating Activities		110			95
Cash Flows From Investing Activities:
Capital Expenditures (Excluding Timberland Acquisitions)		(11	)		(16	)
Net Cash Used In Investing Activities		(11	)		(16	)
Cash Flows From Financing Activities:
Dividends		(69	)		(72	)
Borrowings on Line of Credit		206			278
Repayments on Line of Credit		(211	)		(278	)
Principal Payments and Retirement of Long-Term Debt		(33	)		—
Proceeds from Stock Option Exercises		—			1
Other		—			(1	)
Net Cash Used In Financing Activities		(107	)		(72	)
Increase (Decrease) In Cash and Cash Equivalents		(8	)		7
Cash and Cash Equivalents:
Beginning of Period		355			118
End of Period	$	347		$	125

Plum Creek Timber Company, Inc.

Segment Data

(Unaudited)

	Six Months 2009			Six Months 2008
	(In Millions)
Revenues:
Northern Resources	$	92		$	168
Southern Resources		172			250
Real Estate		346			109
Manufacturing		124			226
Other		10			11
Eliminations		(2	)		(25	)
Total Revenues	$	742		$	739
Operating Income (Loss)
Northern Resources	$	(5	)	$	21
Southern Resources		43			74
Real Estate		214			68
Manufacturing		(22	)		(20	)
Other		9			10
Other Costs and Eliminations		(27	)		(30	)
Other Operating Income (Expense), net		—			3
Total Operating Income	$	212		$	126

Plum Creek Timber Company, Inc.

Segment Data

(Unaudited)

	Second Quarter 2009			Second Quarter 2008
	(In Millions)
Revenues:
Northern Resources	$	35		$	74
Southern Resources		89			128
Real Estate		78			57
Manufacturing		66			121
Other		5			6
Eliminations		(1	)		(10	)
Total Revenues	$	272		$	376
Operating Income (Loss)
Northern Resources	$	(7	)	$	7
Southern Resources		23			37
Real Estate		44			35
Manufacturing		—			(11	)
Other		4			5
Other Costs and Eliminations		(11	)		(16	)
Other Operating Income (Expense), net		—			—
Total Operating Income	$	53		$	57

Plum Creek Timber Company, Inc

Selected Operating Statistics

(Unaudited)

		2009						2008
		1st Qtr		2nd Qtr		YTD		1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		YTD
Sales Realization	Units
Southern Resources
Sawlog	$/Ton Stumpage	$	24	$	22	$	23	$	29	$	26	$	25	$	26	$	26
Pulpwood	$/Ton Stumpage	$	11	$	9	$	10	$	10	$	10	$	10	$	12	$	10
Northern Resources
Sawlog	$/Ton Delivered	$	57	$	50	$	54	$	67	$	68	$	74	$	68	$	69
Pulpwood	$/Ton Delivered	$	43	$	38	$	41	$	39	$	43	$	45	$	44	$	43
Lumber (1)	$/MBF	$	374	$	340	$	353	$	366	$	367	$	384	$	367	$	371
Plywood (1)	$/MSF	$	362	$	353	$	357	$	398	$	404	$	396	$	382	$	397
Fiberboard (1)	$/MSF	$	601	$	593	$	597	$	591	$	600	$	610	$	625	$	604
Sales Volume
Southern Resources
Sawlog	1,000 Tons		942		1,217		2,159		1,459		1,666		1,425		1,020		5,570
Pulpwood	1,000 Tons		1,487		1,849		3,336		1,976		2,221		2,089		1,741		8,027
Total Harvest			2,429		3,066		5,495		3,435		3,887		3,514		2,761		13,597
Northern Resources
Sawlog	1,000 Tons		525		371		896		978		739		828		821		3,366
Pulpwood	1,000 Tons		613		397		1,010		738		504		725		649		2,616
Total Harvest			1,138		768		1,906		1,716		1,243		1,553		1,470		5,982
Lumber	MBF		35,123		60,371		95,494		69,596		83,477		74,100		62,660		289,833
Plywood	MSF		35,439		40,729		76,168		68,746		68,616		62,112		37,509		236,983
Fiberboard	MSF		34,044		32,802		66,846		58,784		63,205		44,371		31,071		197,431

(1) Represents prices at mill level.

Plum Creek Timber Company, Inc.

Land Sale Statistics

(Unaudited)

	2009						2008
	1st Qtr (1)		2nd Qtr		YTD		1st Qtr		2nd Qtr		3rd Qtr		4th Qtr (2)		YTD
Acres Sold
Small Non-strategic		1,665		9,840		11,505		17,145		13,215		14,800		47,125		92,285
Large Non-strategic		—		59,160		59,160		—		—		—		—		—
Conservation		113,355		3,895		117,250		1,015		595		39,880		134,250		175,740
HBU/Recreation		2,180		10,955		13,135		10,635		11,785		15,640		7,550		45,610
Development Properties		1,485		25		1,510		65		700		10		45		820
Conservation Easements		n/a		n/a		n/a		n/a		n/a		n/a		n/a		n/a
		118,685		83,875		202,560		28,860		26,295		70,330		188,970		314,455
Price per Acre
Small Non-strategic	$	1,330	$	900	$	960	$	1,180	$	1,285	$	1,145	$	745	$	965
Large Non-strategic		—	$	650	$	650		—		—		—		—		—
Conservation	$	2,225	$	1,705	$	2,205	$	395	$	1,555	$	1,035	$	1,170	$	1,140
HBU/Recreation	$	3,420	$	2,200	$	2,400	$	2,875	$	2,740	$	3,220	$	2,965	$	2,975
Development Properties	$	4,075	$	13,650	$	4,225	$	5,825	$	9,630	$	13,130	$	4,095	$	8,770
Conservation Easements		—		—		—		—		—		—		—		—
Revenue, ($ millions)
Small Non-strategic	$	2	$	9	$	11	$	20	$	17	$	17	$	35	$	89
Large Non-strategic		—	$	38	$	38		—		—		—		—		—
Conservation	$	252	$	7	$	259		—	$	1	$	41	$	157	$	200
HBU/Recreation	$	7	$	24	$	32	$	31	$	32	$	50	$	22	$	136
Development Properties	$	6		—	$	6		—	$	7		—		—	$	7
Conservation Easements		—		—		—		—		—		—		—		—
	$	268	$	78	$	346	$	52	$	57	$	108	$	215	$	432
Basis of Real Estate Sold (3)	$	89	$	28	$	118	$	10	$	13	$	26	$	100	$	149

(1) During the 1st quarter of 2009 we sold 112,000 acres in Montana to a conservation buyer for $250 million. The sale is presented as a Conservation sale. The transaction included 56,000 acres of Conservation property, 10,000 acres of Small Non-strategic property, 45,000 acres of HBU/Recreation property, and 1,000 acres of Development property.

(2) 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.

(3) Includes $16 million in the second quarter of 2009 for a 59,000 acre Large Non-strategic sale in Wisconsin, $85 million in the first quarter of 2009 for a 112,000 acre conservation sale in Montana and $75 million in the fourth quarter of 2008 for a 130,000 acre conservation sale in Montana.

PLUM CREEK TIMBER COMPANY, INC.

ANNUAL PRODUCTION CAPACITY

June 30, 2009

(UNAUDITED)

Over the past year, the company has restructured its manufacturing operations, permanently closing two lumber mills and indefinitely suspending production at a third. The table below details the current manufacturing operations, their practical capacities and current status.

Facility	Product	Annual Production Capacity
OPERATING
Columbia Falls MDF	Thick MDF	145 mmsf 3/4 in.
Columbia Falls MDF	Thin MDF	122 mmsf 3/4 in.
Columbia Falls Plywood	Industrial Plywood	120 mmsf 3/8 in.
Evergreen Plywood	Industrial Plywood	160 mmsf 3/8 in.
Columbia Falls Lumber	Pine Boards	72 mmbf
Meridian Remanufacturing	Edge-Glued Board Lumber	70 mmbf
INDEFINITELY CURTAILED
Evergreen Lumber	Stud Lumber	92 mmbf
Evergreen Remanufacturing	Finger-Jointed Stud Lumber	65 mmbf
PERMANENTLY CLOSED
Pablo Lumber	Pine Boards	N/A
Ksanka Lumber	Stud Lumber	N/A

PLUM CREEK TIMBER COMPANY, INC.

DEBT MATURITIES SCHEDULE

June 30, 2009

(UNAUDITED)

	Borrowings (1)
	Principal	Weighted Avg. Interest Rate
Quarterly Maturities through 2010:
3rd Qtr 2009	58	8.730%
1st Qtr 2010	53	5.480%
4th Qtr 2010	3	8.050%
Annual Maturities through 2014:
2011	383	7.726%	(2)
2012	603	—	(3)
2013	250	6.663%	(4)
2014	3	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 $51 million, $3 million, $280 million and $49 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 $3 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 $3 million, $73 million and $174 million and interest rates of 8.050%, 7.760% and 6.180%, respectively.