PLUM CREEK TIMBER CO INC - FORM 8-K - EX-99.2 - SUPPLEMENTAL FINANCIAL INFORMATION

Attached files

file	filename
8-K - FORM 8-K - PLUM CREEK TIMBER CO INC	a201512318k.htm
EX-99.1 - PRESS RELEASE - PLUM CREEK TIMBER CO INC	exhibit99120151231.htm

Exhibit 99.2

PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)



(In Millions, Except Per Share Amounts)	Year Ended December 31,
(In Millions, Except Per Share Amounts)	2015			2014
REVENUES:
Timber	$	724		$	767
Real Estate	318			289
Manufacturing	350			368
Energy and Natural Resources	37			34
Other	16			18
Total Revenues	1,445			1,476

COSTS AND EXPENSES:
Cost of Goods Sold:
Timber	538			555
Real Estate	166			151
Manufacturing	307			322
Energy and Natural Resources	11			10
Other	15			16
Total Cost of Goods Sold	1,037			1,054
Selling, General and Administrative	150			115
Total Costs and Expenses	1,187			1,169

Other Operating Income (Expense), net	16			15

Operating Income	274			322

Earnings from Unconsolidated Entities	83			66

Interest Expense, net:
Interest Expense (Debt Obligations to Unrelated Parties)	105			108
Interest Expense (Note Payable to Timberland Venture)	58			58
Total Interest Expense, net	163			166

Income before Income Taxes	194			222

Provision (Benefit) for Income Taxes	(3		)	8

Net Income	$	197		$	214

PER SHARE AMOUNTS:

Net Income per Share – Basic	$	1.12		$	1.21
Net Income per Share – Diluted	$	1.12		$	1.21

Weighted-Average Number of Shares Outstanding
– Basic	174.9			176.7
– Diluted	175.2			177.0


SUPPLEMENTAL INCOME STATEMENT INFORMATION:
Equity Earnings from Timberland Venture	$	77		$	63
Equity Earnings (Loss) from Real Estate Development Ventures	6			3
Earnings from Unconsolidated Entities	$	83		$	66

Exhibit 99.2

PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)



(In Millions, Except Per Share Amounts)	Quarter Ended December 31,
(In Millions, Except Per Share Amounts)	2015			2014
REVENUES:
Timber	$	176		$	204
Real Estate	55			120
Manufacturing	79			93
Energy and Natural Resources	13			8
Other	—			3
Total Revenues	323			428

COSTS AND EXPENSES:
Cost of Goods Sold:
Timber	133			148
Real Estate	22			76
Manufacturing	71			81
Energy and Natural Resources	3			2
Other	1			2
Total Cost of Goods Sold	230			309
Selling, General and Administrative	50			33
Total Costs and Expenses	280			342

Other Operating Income (Expense), net	10			6

Operating Income	53			92

Earnings from Unconsolidated Entities	17			22

Interest Expense, net:
Interest Expense (Debt Obligations to Unrelated Parties)	24			27
Interest Expense (Note Payable to Timberland Venture)	15			15
Total Interest Expense, net	39			42

Income before Income Taxes	31			72

Provision (Benefit) for Income Taxes	(3		)	4

Net Income	$	34		$	68

PER SHARE AMOUNTS:

Net Income per Share – Basic	$	0.19		$	0.39
Net Income per Share – Diluted	$	0.19		$	0.39

Weighted-Average Number of Shares Outstanding
– Basic	173.8			175.9
– Diluted	174.2			176.2


SUPPLEMENTAL INCOME STATEMENT INFORMATION:
Equity Earnings from Timberland Venture	$	18		$	15
Equity Earnings (Loss) from Real Estate Development Ventures	(1		)	7
Earnings from Unconsolidated Entities	$	17		$	22

Exhibit 99.2

PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)



(In Millions, Except Per Share Amounts)	December 31, 2015			December 31, 2014
ASSETS
Current Assets:
Cash and Cash Equivalents	$	88		$	92
Accounts Receivable	32			38
Inventories	57			61
Deferred Tax Asset	13			6
Assets Held for Sale	24			98
Other Current Assets	16			15
	230			310

Timber and Timberlands, net	3,910			4,009
Minerals and Mineral Rights, net	281			289
Property, Plant and Equipment, net	113			120
Equity Investment in Timberland Venture	235			217
Equity Investment in Real Estate Development Ventures	102			126
Deferred Tax Asset	24			23
Investment in Grantor Trusts (at Fair Value)	54			48
Other Assets	41			45
Total Assets	$	4,990		$	5,187

LIABILITIES
Current Liabilities:
Current Portion of Long-Term Debt	$	—		$	439
Line of Credit	519			95
Accounts Payable	22			27
Interest Payable	19			22
Wages Payable	31			31
Taxes Payable	10			10
Deferred Revenue	23			23
Other Current Liabilities	46			10
	670			657

Long-Term Debt	1,976			1,976
Note Payable to Timberland Venture	783			783
Other Liabilities	83			100
Total Liabilities	3,512			3,516

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) – 174.2 at December 31, 2015 and 175.9 at December 31, 2014	2			2
Additional Paid-In Capital	2,988			2,955
Retained Earnings (Accumulated Deficit)	(382		)	(271		)
Treasury Stock, at Cost, Common Shares – 30.8 at December 31, 2015 and 28.3 at December 31, 2014	(1,094		)	(992		)
Accumulated Other Comprehensive Income (Loss)	(36		)	(23		)
Total Stockholders’ Equity	1,478			1,671
Total Liabilities and Stockholders’ Equity	$	4,990		$	5,187

Exhibit 99.2

PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)



	Year Ended December 31,
(In Millions)	2015			2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	$	197		$	214
Adjustments to Reconcile Net Income to Net Cash Provided By Operating Activities:
Depreciation, Depletion and Amortization (Includes $2 MDF Fire Impairment Loss in 2014)	133			138
Basis of Real Estate Sold	148			129
Earnings from Unconsolidated Entities	(83		)	(66		)
Distributions from Timberland Venture	59			57
Distributions from Real Estate Development Ventures	6			2
Deferred Income Taxes	(8		)	4
Pension Plan Contributions	(9		)	(9		)
Realized Gains from Sales of Marketable Securities	(10		)	—
Working Capital Changes	9			(11		)
Other	21			(1		)
Net Cash Provided By (Used In) Operating Activities	463			457

CASH FLOWS FROM INVESTING ACTIVITIES
Capital Expenditures, Excluding Timberland Acquisitions (Includes $12 MDF Replacement Capital in 2014)	(82		)	(89		)
Timberlands Acquired	(7		)	—
Contributions to Real Estate Development Ventures	(5		)	(9		)
Distributions from Real Estate Development Ventures	29			23
Insurance Recoveries (Property Damage)	2			10
Proceeds from Sale of Properties and Other Assets	4			—
Investments in Assets Held in Grantor Trust	(39		)	(1		)
Sales of Marketable Securities Held in Grantor Trust	33			—
Other	(1		)	1
Net Cash Provided By (Used In) Investing Activities	(66		)	(65		)

CASH FLOWS FROM FINANCING ACTIVITIES
Dividends	(308		)	(312		)
Borrowings on Line of Credit	1,008			1,307
Repayments on Line of Credit	(584		)	(1,679		)
Principal Payments and Retirement of Long-Term Debt	(439		)	—
Proceeds from Stock Option Exercises	24			3
Acquisition of Treasury Stock	(102		)	(52		)
Net Cash Provided By (Used In) Financing Activities	(401		)	(733		)

Increase (Decrease) In Cash and Cash Equivalents	(4		)	(341		)
Cash and Cash Equivalents:
Beginning of Period	92			433

End of Period	$	88		$	92

Exhibit 99.2

PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)



	Quarter Ended December 31,
(In Millions)	2015			2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	$	34		$	68
Adjustments to Reconcile Net Income to Net Cash Provided By Operating Activities:
Depreciation, Depletion and Amortization	34			37
Basis of Real Estate Sold	17			69
Earnings from Unconsolidated Entities	(17		)	(22		)
Distributions from Real Estate Development Ventures	(1		)	2
Deferred Income Taxes	(3		)	2
Pension Plan Contributions	(9		)	(9		)
Realized Gains from Sales of Marketable Securities	(9		)	—
Working Capital Changes	(16		)	(15		)
Other	11			3
Net Cash Provided By (Used In) Operating Activities	41			135

CASH FLOWS FROM INVESTING ACTIVITIES
Capital Expenditures, Excluding Timberland Acquisitions (Includes $3 MDF Fire Replacement Capital in 2014)	(21		)	(24		)
Timberlands Acquired	—			—
Distributions from Real Estate Development Ventures	5			18
Insurance Recoveries (Property Damage)	—			7
Proceeds from Sale of Properties and Other Assets	4			—
Investments in Assets Held in Grantor Trust	(37		)	(1		)
Sales of Marketable Securities Held in Grantor Trust	30			—
Other	—			1
Net Cash Provided By (Used In) Investing Activities	(19		)	1

CASH FLOWS FROM FINANCING ACTIVITIES
Dividends	(76		)	(78		)
Borrowings on Line of Credit	634			322
Repayments on Line of Credit	(157		)	(379		)
Principal Payments and Retirement of Long-Term Debt	(439		)	—
Proceeds from Stock Option Exercises	23			1
Net Cash Provided By (Used In) Financing Activities	(15		)	(134		)

Increase (Decrease) In Cash and Cash Equivalents	7			2
Cash and Cash Equivalents:
Beginning of Period	81			90

End of Period	$	88		$	92

Exhibit 99.2

PLUM CREEK TIMBER COMPANY, INC.

SEGMENT DATA

(UNAUDITED)



	Year Ended December 31,
(In Millions)	2015			2014
Revenues:
Northern Resources	$	228		$	264
Southern Resources	521			531
Real Estate	318			289
Manufacturing	350			368
Energy and Natural Resources	37			34
Other	16			18
Eliminations	(25		)	(28		)
Total Revenues	$	1,445		$	1,476

Operating Income (Loss):
Northern Resources	$	27		$	44
Southern Resources	123			137
Real Estate	144			133
Manufacturing ^(A)	35			49
Energy and Natural Resources ^(B)	25			25
Other ^(C)	6			2
Other Costs and Eliminations, net	(80		)	(65		)
Total Operating Income	$	280		$	325

Adjusted EBITDA by Segment: ^(D)
Northern Resources	$	53		$	72
Southern Resources	207			219
Real Estate	293			263
Manufacturing	45			65
Energy and Natural Resources	34			33
Other	25			17
Other Costs and Eliminations, net	(78		)	(64		)
Total	$	579		$	605

(A) During the second quarter of 2014, we experienced a fire at our MDF facility and recorded a $2 million loss representing the net book value of the building and equipment damaged or destroyed by the fire. During 2015 and 2014, we recorded gains related to insurance recoveries of $3 million and $13 million, respectively. Insurance recoveries were received for costs incurred to rebuild or replace the damaged building and equipment and for business interruption costs. Both the building and equipment loss and the insurance recoveries are reported as Other Operating Gain in our Manufacturing Segment and are included in Other Operating Income (Expense), net in the Consolidated Statements of Income.

(B) During the fourth quarter of 2014, the company agreed to terminate a land lease for consideration of $2 million from the lessor. The land lease had been accounted for as an operating lease. The $2 million consideration is reported as Other Operating Gain in our Energy and Natural Resources Segment as it was primarily for the release of mineral rights and is included in Other Operating Income (Expense), net in the Consolidated Statements of Income.

(C) For segment reporting, Equity Earnings (Loss) from Real Estate Development Ventures is included in Operating Income (Loss) for the Other Segment. Equity earnings of $6 million and $3 million were recorded for 2015 and 2014, respectively.

(D) Refer to the separate schedule, "Segment Data - Adjusted EBITDA" for reconciliations of Adjusted EBITDA to operating income and net cash provided by operating activities.

Exhibit 99.2

PLUM CREEK TIMBER COMPANY, INC.

SEGMENT DATA

(UNAUDITED)



	Quarter Ended December 31,
(In Millions)	2015			2014
Revenues:
Northern Resources	$	56		$	66
Southern Resources	128			145
Real Estate	55			120
Manufacturing	79			93
Energy and Natural Resources	13			8
Other	—			3
Eliminations	(8		)	(7		)
Total Revenues	$	323		$	428

Operating Income (Loss):
Northern Resources	$	5		$	10
Southern Resources	27			38
Real Estate	30			42
Manufacturing ^(A)	4			14
Energy and Natural Resources ^(B)	10			7
Other ^(C)	(1		)	7
Other Costs and Eliminations, net	(23		)	(19		)
Total Operating Income	$	52		$	99

Adjusted EBITDA by Segment: ^(D)
Northern Resources	$	11		$	17
Southern Resources	49			61
Real Estate	48			111
Manufacturing	6			18
Energy and Natural Resources	12			9
Other	3			19
Other Costs and Eliminations, net	(22		)	(19		)
Total	$	107		$	216

(A) During the second quarter of 2014, we experienced a fire at our MDF facility and recorded a $2 million loss representing the net book value of the building and equipment damaged or destroyed by the fire. During the fourth quarters of 2015 and 2014, we recorded gains related to insurance recoveries of $0 and $4 million, respectively. Insurance recoveries were received for costs incurred to rebuild or replace the damaged building and equipment and for business interruption costs. Both the building and equipment loss and the insurance recoveries are reported as Other Operating Gain in our Manufacturing Segment and are included in Other Operating Income (Expense), net in the Consolidated Statements of Income.

(C) For segment reporting, Equity Earnings (Loss) from Real Estate Development Ventures is included in Operating Income (Loss) for the Other Segment. An equity loss of $1 million and equity earnings of $7 million were recorded for the quarterly periods ended December 31, 2015 and December 31, 2014, respectively.

(D) Refer to the separate schedule, "Segment Data - Adjusted EBITDA" for reconciliations of Adjusted EBITDA to operating income and net cash provided by operating activities.

Exhibit 99.2

Plum Creek Timber Company, Inc

Selected Operating Statistics

(Unaudited)



		2015
		1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		YTD
Sales Realization	Units
Southern Resources
Sawlog	$/Ton Stumpage	$	23	$	22	$	22	$	21	$	22
Pulpwood	$/Ton Stumpage	$	13	$	13	$	13	$	13	$	13
Northern Resources
Sawlog	$/Ton Delivered	$	86	$	79	$	82	$	79	$	82
Pulpwood	$/Ton Delivered	$	48	$	47	$	50	$	49	$	49

Lumber⁽¹⁾	$/MBF	$	534	$	422	$	398	$	379	$	441
Plywood ⁽¹⁾	$/MSF	$	504	$	520	$	512	$	509	$	511
Fiberboard ⁽¹⁾	$/MSF	$	687	$	685	$	677	$	677	$	682

Sales Volume
Southern Resources
Sawlog	1,000 Tons	1,527		1,499		1,596		1,483		6,105
Pulpwood	1,000 Tons	2,095		2,270		2,376		2,309		9,050
Total Harvest		3,622		3,769		3,972		3,792		15,155
Northern Resources
Sawlog	1,000 Tons	570		434		429		472		1,905
Pulpwood	1,000 Tons	460		306		429		394		1,589
Total Harvest		1,030		740		858		866		3,494

Lumber	MBF	36,083		30,510		27,862		25,888		120,343
Plywood	MSF	47,530		45,265		45,532		39,967		178,294
Fiberboard	MSF	54,053		59,374		56,713		51,362		221,502

		2014
		1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		YTD
Sales Realization	Units
Southern Resources
Sawlog	$/Ton Stumpage	$	22	$	22	$	22	$	23	$	22
Pulpwood	$/Ton Stumpage	$	12	$	12	$	12	$	13	$	12
Northern Resources
Sawlog	$/Ton Delivered	$	86	$	83	$	86	$	86	$	85
Pulpwood	$/Ton Delivered	$	43	$	41	$	46	$	45	$	44

Lumber⁽¹⁾	$/MBF	$	573	$	594	$	579	$	556	$	576
Plywood ⁽¹⁾	$/MSF	$	451	$	468	$	498	$	507	$	483
Fiberboard ⁽¹⁾	$/MSF	$	678	$	675	$	677	$	673	$	676

Sales Volume
Southern Resources
Sawlog	1,000 Tons	1,550		1,619		1,644		1,657		6,470
Pulpwood	1,000 Tons	2,054		2,159		2,395		2,675		9,283
Total Harvest		3,604		3,778		4,039		4,332		15,753
Northern Resources
Sawlog	1,000 Tons	667		499		595		549		2,310
Pulpwood	1,000 Tons	470		248		430		427		1,575
Total Harvest		1,137		747		1,025		976		3,885

Lumber	MBF	37,703		39,697		40,445		36,020		153,865
Plywood	MSF	39,188		37,620		46,693		43,323		166,824
Fiberboard	MSF	50,681		54,831		48,810		49,704		204,026

(1) Represents prices at mill level.

Exhibit 99.2

Plum Creek Timber Company, Inc.

Land Sale Statistics

(Unaudited)



	2015
	1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		YTD
Acres Sold
Small Non-strategic	2,060		1,515		1,060		12,420		17,055
Large Non-strategic ⁽¹⁾	—		—		97,715		—		97,715
Conservation ⁽²⁾	121,160		6,610		—		4,605		132,375
HBU/Recreation	8,010		8,005		3,735		16,955		36,705
Development Properties	—		—		—		—		—
Conservation Easements	n/a		n/a		n/a		n/a		n/a
	131,230		16,130		102,510		33,980		283,850
Price per Acre
Small Non-strategic	$	1,335	$	955	$	650	$	1,390	$	1,300
Large Non-strategic	$	—	$	—	$	1,230	$	—	$	1,230
Conservation	$	728	$	860	$	—	$	800	$	740
HBU/Recreation	$	2,210	$	2,255	$	2,015	$	1,905	$	2,060
Development Properties	$	—	$	—	$	—	$	—	$	—
Conservation Easements	$	—	$	—	$	—	$	665	$	665

Revenue, ($ millions)
Small Non-strategic	$	3	$	1	$	1	$	17	$	22
Large Non-strategic	$	—	$	—	$	120	$	—	$	120
Conservation	$	88	$	6	$	—	$	4	$	98
HBU/Recreation	$	18	$	18	$	8	$	32	$	76
Development Properties	$	—	$	—	$	—	$	—	$	—
Conservation Easements	$	—	$	—	$	—	$	2	$	2
	$	109	$	25	$	129	$	55	$	318

Basis of Real Estate Sold ⁽³⁾	$	83	$	9	$	39	$	17	$	148
	2014
	1st Qtr		2nd Qtr ⁽⁴⁾		3rd Qtr		4th Qtr		YTD
Acres Sold
Small Non-strategic	3,035		23,640		3,245		545		30,465
Large Non-strategic ⁽¹⁾	—		—		—		22,920		22,920
Conservation ⁽²⁾	3,415		11,875		2,455		48,270		66,015
HBU/Recreation	4,125		31,530		25,775		3,185		64,615
Development Properties	—		—		—		—		—
Conservation Easements	n/a		n/a		n/a		n/a		n/a
	10,575		67,045		31,475		74,920		184,015
Price per Acre
Small Non-strategic	$	1,325	$	790	$	1,030	$	1,300	$	880
Large Non-strategic	$	—	$	—	$	—	$	2,845	$	2,845
Conservation	$	1,685	$	635	$	1,230	$	950	$	945
HBU/Recreation	$	2,200	$	1,485	$	2,445	$	2,545	$	1,965
Development Properties	$	—	$	—	$	—	$	—	$	—
Conservation Easements	$	340	$	300	$	—	$	—	$	320

Revenue, ($ millions)
Small Non-strategic	$	4	$	19	$	3	$	1	$	27
Large Non-strategic	$	—	$	—	$	—	$	65	$	65
Conservation	$	6	$	8	$	3	$	46	$	63
HBU/Recreation	$	9	$	46	$	63	$	8	$	126
Development Properties	$	—	$	—	$	—	$	—	$	—
Conservation Easements	$	4	$	4	$	—	$	—	$	8
	$	23	$	77	$	69	$	120	$	289

Basis of Real Estate Sold ⁽³⁾	$	6	$	25	$	29	$	69	$	129

Exhibit 99.2

Plum Creek Timber Company, Inc.

Notes to Land Sale Statistics

(Unaudited)

(1) During the third quarter of 2015 the company sold 97,715 acres of Large Non-strategic lands located in Florida for $120 million. During the fourth quarter of 2014, the company sold 15,185 acres of Large Non-strategic lands located in Alabama for $36.2 million and 7,735 acres of Large Non-strategic lands located in Oregon for $29.0 million.

(2) During the first quarter of 2015 the company sold 117,400 acres in Montana for $85.1 million. During the fourth quarter of 2014, the company sold 47,800 acres in Washington for $45.6 million.

(3) Includes $37.1 million in the third quarter of 2015 for a 97,715 acre sale located in Florida, and $71.8 million in the first quarter of 2015 for a 117,400 acre sale located in Montana. Also includes $50 million in the fourth quarter of 2014 for a 47,800 acre sale located in Washington, $4 million in the fourth quarter of 2014 for a 7,735 acre sale located in Oregon and $11.5 million in the fourth quarter of 2014 for a 15,185 Large Non-strategic sale located in Alabama. Includes $12 million in the second quarter of 2014 for a 49,400 acre sale located in Wisconsin.

(4) During the second quarter of 2014, the company sold approximately 49,400 acres in Wisconsin for $45.3 million. The transaction consisted of approximately 22,400 acres of HBU/ Recreation property with an estimated value of $28.7 million, approximately 17,000 acres of Small Non-strategic property with an estimated value of $11.6 million and approximately 10,000 acres of Conservation property with an estimated value of $5.0 million.

Exhibit 99.2

Plum Creek Timber Company, Inc.

Acreage Ownership by State

December 31, 2015

(Unaudited)



Alabama		137,000
Arkansas		708,000
Florida		315,000
Georgia		775,000
Louisiana		395,000
Maine		852,000
Michigan		567,000
Mississippi		570,000
Montana		769,000
New Hampshire		24,000
North Carolina		3,000
Oregon		334,000
South Carolina		332,000
Texas		2,000
Vermont		86,000
Virgina		125,000
Washington		29,000
West Virginia		258,000
Wisconsin		4,000
Total		6,285,000

Exhibit 99.2

PLUM CREEK TIMBER COMPANY, INC.

MEDIUM DENSITY FIBERBOARD ("MDF") FACILITY FIRE - OPERATING RESULTS IMPACT

December 31, 2015

(UNAUDITED)

On June 10, 2014, we experienced a fire at our MDF facility. Production at the facility resumed on July 10, 2014. The schedule below details the components that impacted operating income in each quarter of 2014 and 2015, and for each of the full years.



	2014										2015
(In Millions)	2nd Qtr			3rd Qtr		4th Qtr		Total			1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		Total
Impacts on Operating Results:
Foregone MDF Income	$	(4	)	$	—	$	—	$	(4	)	$	—	$	—	$	—	$	—	$	—
Business Interruption Recoveries⁽¹⁾	$	—		$	—	$	3	$	3		$	—	$	1	$	—	$	—	$	1
Loss on Property, Plant and Equipment	$	(2	)	$	—	$	—	$	(2	)	$	—	$	—	$	—	$	—	$	—
Property Insurance Recoveries⁽¹⁾	$	4		$	5	$	1	$	10		$	—	$	1	$	1	$	—	$	2
Net Impact on Manufacturing Operating Income	$	(2	)	$	5	$	4	$	7		$	—	$	2	$	1	$	—	$	3
Impact on Net Income	$	(1	)	$	3	$	2	$	4		$	—	$	1	$	1	$	—	$	2
Impact on Diluted EPS	$	(0.01	)	$	0.02	$	0.01	$	0.02		$	—	$	0.01	$	—	$	—	$	0.01

(1) The insurance recoveries reflect the impact of our cumulative $1 million deductible. Business interruption recoveries of $3 million and $1 million were recorded in the fourth quarter of 2014 and the second quarter of 2015, respectively, when the cash payments were received. Property insurance recoveries were recorded as repair expenditures were incurred by the company. As of December 31, 2015 $16 million of cash payments from insurance recoveries have been received.

Exhibit 99.2

Plum Creek Timber Company, Inc.

Segment Data - Adjusted EBITDA

Reconciliation of Operating Income and Net Cash

Provided by Operating Activities

(Unaudited)

We define Adjusted EBITDA as earnings from continuing operations, excluding Equity Earnings from the Timberland Venture, and before interest expense (including any gains or losses from extinguishment of debt), taxes, depreciation, depletion, amortization, and basis in real estate sold. In addition to including Equity Earnings or Loss from Real Estate Development Ventures in Adjusted EBITDA, we also include, as an add back to Operating Income for the Other Segment, our proportional share of depreciation, depletion, amortization, and basis in real estate sold from this equity method investment. Adjusted EBITDA is not considered a measure of financial performance under U.S. generally accepted accounting principles (U.S. GAAP) and the items excluded from Adjusted EBITDA are significant components of our consolidated financial statements.

We present Adjusted EBITDA as a supplemental performance measure because we believe it facilitates operating performance comparisons from period to period, and each business segment’s contribution to that performance, by eliminating non-cash charges to earnings, which can vary significantly by business segment. These non-cash charges include timber depletion, depreciation of fixed assets and the basis in real estate sold. We also use Adjusted EBITDA as a supplemental liquidity measure because we believe it is useful in measuring our ability to generate cash. In addition, we believe Adjusted EBITDA is commonly used by investors, lenders and rating agencies to assess our financial performance.

A reconciliation of Adjusted EBITDA to net income and net cash from operating activities, the most directly comparable U.S. GAAP performance and liquidity measures, is provided in the following schedules:



	Year Ended December 31, 2015

	Operating Income			Depreciation, Depletion and Amortization		Basis of Real Estate Sold		Adjusted EBITDA
By Segment ⁽¹⁾
Northern Resources	$	27		$	26	$	—	$	53
Southern Resources	123			84		—		207
Real Estate	144			1		148		293
Manufacturing	35			10		—		45
Energy and Natural Resources	25			9		—		34
Other	6			1		18		25
Other Costs and Eliminations	(93		)	2		—		(91		)
Other Unallocated Operating Income (Expense), net	13			—		—		13
Total	$	280		$	133	$	166	$	579

Reconciliation to Net Income ⁽²⁾
Equity Earnings from Timberland Venture	77
Interest Expense	(163		)
(Provision) Benefit for Income Taxes	3
Net Income	$	197

Reconciliation to Net Cash Provided By Operating Activities ⁽¹⁾
Net Cash Flows from Operations								$	463
Interest Expense								163
Amortization of Debt Costs								(1		)
Provision / (Benefit) for Income Taxes								(3		)
Distributions from Timberland Venture								(59		)
Distributions from Real Estate Development Ventures								(6		)
Equity Earnings, Depletion, Amortization, and Basis of Real Estate Sold from Real Estate Development Ventures								25
Deferred Income Taxes								8
Gain on Sale of Properties and Other Assets								—
Timber Deed Acquired								—
Pension Plan Contributions								9
Realized Gains from Sales of Marketable Securities								10
Working Capital Changes								(9		)
Other								(21		)
Adjusted EBITDA								$	579

(1) Includes Equity Earnings from Real Estate Development Ventures ($6 million) in Operating Income for the Other Segment, along with our proportional share of depreciation, depletion, amortization ($1 million), and basis in real estate sold ($18 million) from this equity method investment.

(2) Includes reconciling items not allocated to segments for financial reporting purposes.

Exhibit 99.2



	Year Ended December 31, 2014

	Operating Income			Depreciation, Depletion and Amortization		Basis of Real Estate Sold		Adjusted EBITDA
By Segment ⁽¹⁾
Northern Resources	$	44		$	28	$	—	$	72
Southern Resources	137			82		—		219
Real Estate	133			1		129		263
Manufacturing	49			16		—		65
Energy and Natural Resources	25			8		—		33
Other	2			2		13		17
Other Costs and Eliminations	(67		)	1		—		(66		)
Other Unallocated Operating Income (Expense), net	2			—		—		2
Total	$	325		$	138	$	142	$	605

Reconciliation to Net Income ⁽²⁾
Equity Earnings from Timberland Venture	63
Interest Expense	(166		)
(Provision) Benefit for Income Taxes	(8		)
Net Income	$	214

Reconciliation to Net Cash Provided By Operating Activities ⁽¹⁾
Net Cash Flows from Operations								$	457
Interest Expense								166
Amortization of Debt Costs								(2		)
Provision / (Benefit) for Income Taxes								8
Distributions from Timberland Venture								(57		)
Distributions from Real Estate Development Ventures								(2		)
Equity Earnings, Depletion, Amortization, and Basis of Real Estate Sold from Real Estate Development Ventures								18
Deferred Income Taxes								(4		)
Gain on Sale of Properties and Other Assets								—
Timber Deed Acquired								—
Pension Plan Contributions								9
Working Capital Changes								11
Other								1
Adjusted EBITDA								$	605

(1) Includes Equity Earnings from Real Estate Development Ventures ($3 million) in Operating Income for the Other Segment, along with our proportional share of depreciation, depletion, amortization ($2 million), and basis in real estate sold ($13 million) from this equity method investment.

(2) Includes reconciling items not allocated to segments for financial reporting purposes.

Exhibit 99.2



	Quarter Ended December 31, 2015

	Operating Income			Depreciation, Depletion and Amortization		Basis of Real Estate Sold		Adjusted EBITDA
By Segment ⁽¹⁾
Northern Resources	$	5		$	6	$	—	$	11
Southern Resources	27			22		—		49
Real Estate	30			1		17		48
Manufacturing	4			2		—		6
Energy and Natural Resources	10			2		—		12
Other	(1		)	—		4		3
Other Costs and Eliminations	(33		)	1		—		(32		)
Other Unallocated Operating Income (Expense), net	10			—		—		10
Total	$	52		$	34	$	21	$	107

Reconciliation to Net Income ⁽²⁾
Equity Earnings from Timberland Venture	18
Interest Expense	(39		)
(Provision) Benefit for Income Taxes	3
Net Income	$	34

Reconciliation to Net Cash Provided By Operating Activities ⁽¹⁾
Net Cash Flows from Operations								$	41
Interest Expense								39
Amortization of Debt Costs								—
Provision / (Benefit) for Income Taxes								(3		)
Distributions from Timberland Venture								—
Distributions from Real Estate Development Ventures								1
Equity Earnings, Depletion, Amortization, and Basis of Real Estate Sold from Real Estate Development Ventures								3
Deferred Income Taxes								3
Gain on Sale of Properties and Other Assets								—
Timber Deed Acquired								—
Pension Plan Contributions								9
Realized Gains from Sales of Marketable Securities								9
Working Capital Changes								16
Other								(11		)
Adjusted EBITDA								$	107

(1) Includes Equity Loss from Real Estate Development Ventures ($1 million) in Operating Income for the Other Segment, along with our proportional share of depreciation, depletion, amortization ($0), and basis in real estate sold ($4 million) from this equity method investment.

(2) Includes reconciling items not allocated to segments for financial reporting purposes.

Exhibit 99.2



	Quarter Ended December 31, 2014

	Operating Income			Depreciation, Depletion and Amortization		Basis of Real Estate Sold		Adjusted EBITDA
By Segment ⁽¹⁾
Northern Resources	$	10		$	7	$	—	$	17
Southern Resources	38			23		—		61
Real Estate	42			—		69		111
Manufacturing	14			4		—		18
Energy and Natural Resources	7			2		—		9
Other	7			1		11		19
Other Costs and Eliminations	(19		)	—		—		(19		)
Other Unallocated Operating Income (Expense), net	—			—		—		—
Total	$	99		$	37	$	80	$	216

Reconciliation to Net Income ⁽²⁾
Equity Earnings from Timberland Venture	15
Interest Expense	(42		)
(Provision) Benefit for Income Taxes	(4		)
Net Income	$	68

Reconciliation to Net Cash Provided By Operating Activities ⁽¹⁾
Net Cash Flows from Operations								$	135
Interest Expense								42
Amortization of Debt Costs								(1		)
Provision / (Benefit) for Income Taxes								4
Distributions from Timberland Venture								—
Distributions from Real Estate Development Ventures								(2		)
Equity Earnings, Depletion, Amortization, and Basis of Real Estate Sold from Real Estate Development Ventures								19
Deferred Income Taxes								(2		)
Gain on Sale of Properties and Other Assets								—
Timber Deed Acquired								—
Pension Plan Contributions								9
Working Capital Changes								15
Other								(3		)
Adjusted EBITDA								$	216

(1) Includes Equity Earnings from Real Estate Development Ventures ($7 million) in Operating Income for the Other Segment, along with our proportional share of depreciation, depletion, amortization ($1 million), and basis in real estate sold ($11 million) from this equity method investment.

(2) Includes reconciling items not allocated to segments for financial reporting purposes.

PLUM CREEK TIMBER CO INC - FORM 8-K - EX-99.2 - SUPPLEMENTAL FINANCIAL INFORMATION - February 3, 2016

Attached files

PLUM CREEK TIMBER CO INC Reports