Profile: Plum Creek Timber Company, Inc. (PCL)

Plum Creek Timber Company, Inc. (Plum Creek) is a private timberland owner in the United States. As of December 31, 2008, Plum Creek owned 7.4 million acres of timberlands located in 19 states. The Company’s timberlands are diversified, not only geographically, but also by species mix and age distribution. Plum Creek manages its timberlands in two business segments: the Northern Resources Segment, consisting of timberlands in Maine, Michigan, Montana, New Hampshire, Oregon, Washington, West Virginia and Wisconsin, and the Southern Resources Segment, consisting of timberlands in Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, North Carolina, Oklahoma, South Carolina and Texas. In addition, the Company’s Other Segment includes its natural resource businesses that focus on opportunities relating to mineral extraction, natural gas production and communication and transportation rights of way resulting from its property ownership. The Real Estate Segment comprises its sales of timberlands (some of which are sold through its wholly owned taxable real estate investment trust (REIT) subsidiaries), and sales of non-strategic timberlands, including from time to time, sales of blocks of timberlands. Its Real Estate Segment includes development of certain properties, internally and through joint ventures.

Plum Creek’s Manufactured Products Segment, also conducted through its wholly owned taxable REIT subsidiaries, includes four lumber mills, two plywood plants, two medium density fiberboard (MDF) facilities, and two lumber remanufacturing facilities. These facilities, located near its Montana timberlands, convert logs to lumber, plywood and other wood products, and convert chips, sawdust and wood shavings to MDF.

Northern Resources Segment

As of December 31, 2008, the Northern Resources Segment encompassed 3.7 million acres of timberlands in Maine, Michigan, Montana, New Hampshire, Oregon, Washington, West Virginia and Wisconsin, and contained an estimated 117 million tons of standing timber. Timber harvested in the Northern Resources Segment are sold to domestic mills and also used in its manufacturing facilities. In the Northern Resources Segment, domestic wood and fiber consuming facilities tend to purchase raw materials within a 200-mile radius due to transportation costs. During the year ended December 31, 2008, approximately 26% of the timber harvested in its Northern Resources Segment was sold pursuant to a supply agreement.

Southern Resources Segment

As of December 31, 2008, the Southern Resources Segment consisted of 3.7 million acres of timberlands (including approximately 258,000 acres of leased land) located in the states of Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, North Carolina, Oklahoma, South Carolina and Texas, and contained an estimated 141 million tons of standing timber. Logs in the Southern Resources Segment are sold to third party mills producing an array of forest products, including manufacturers of lumber, plywood, oriented strand board, and pulp and paper products. The Southern Resources Segment has a single customer that represents 29% of its revenues. During 2008, approximately 20% of the timber harvested in its Southern Resources Segment was sold pursuant to a supply agreement.

Real Estate Segment

During 2008, the Company sold approximately 130,000 acres in Montana. Plum Creek’s real estate development business is conducted through its wholly owned taxable REIT subsidiaries.

Manufactured Products Segment

The Company produces a diverse line of softwood lumber products, including common, select and edge-glued boards, studs and finger-jointed studs. Lumber products manufactured in its two Montana random-length board mills and remanufacturing facility in Idaho are targeted to domestic lumber retailers, such as retail home centers for use in repair and remodeling projects. Lumber from Plum Creek’s two Montana studmills and finger-joint stud remanufacturing plant are targeted to contractor distribution yards for use in home construction. The Company’s two plywood plants in western Montana produce softwood plywood that it sells primarily into domestic specialized industrial markets, including boat, recreational vehicle, transportation and concrete forming applications. During 2008, it sold approximately 7% of its plywood in Canada. The Company’s MDF facilities in western Montana supply MDF to a range of customers throughout North America. During 2008, Plum Creek sold approximately 8% and 4% of its MDF in Canada and Mexico, respectively. The Company’s lumber and plywood facilities obtain approximately 50% of their logs from its Montana timberlands.

Other Segment-Natural Resources

This segment represents an array of natural resource products and markets subject to varying forms and levels of competition. The Company receives royalty revenue from the extraction of oil, gas and minerals from some of its timberlands.