Plum Creek Timber Company. Inc
Plum Creek Timber — Merger or Acquisition (August 2008)
13 slides from Plum Creek Timber's merger presentation, Aug 27, 2008
Slide 1: Southern Timberland Joint Venture Supporting Materials
Exihibit 99.2 Southern Timberland Joint Venture Supporting Materials August 27, 2008 1
Slide 2: Safe Harbor
Safe Harbor This presentation contains forward-looking statements. Some of the forward-looking statements can be identifiedbytheuseof forward-lookingwordssuchas“believes,”“expects,”“may,”“will,”“should,” “seeks,”“approximately,” “intends,” “plans,”“estimates,” “projects,”“strategy”or“anticipates” or
Slide 3: Transaction Highlights
Transaction Highlights Highlights the value of Plum Creek Southern timberlands ($1,725/acre) Captures substantially all the value of these timberlands today • Transaction economics are largely fixed through our preferred equity position • Receive$783millionofcashtodaythrougha loanfromthejointventure
Slide 4: Southern Timberlands Description
Southern Timberlands Description • Approximately 11% of Plum Creek’s Southern timberland portfolio • Lands are SFI certified, intensively managed, well diversified, productive core timberlands • Stocking levels are ~7% lower than Plum Creek’s Southern average due to slightly younger age class profil
Slide 5: Joint Venture Formation
Joint Venture Formation The Campbell Group Contribution • $783 million cash The Campbell Group Ownership • $783 million common interest (90.9% of common equity) ---------------------------------------------- Plum Creek Contribution • 454,000 acres Plum Creek Ownership • $705 million preferred intere
Slide 6: Joint Venture Loan to Plum Creek
Joint Venture Loan* to Plum Creek $783 million loan amount 7.375% fixed interest rate • $58 million annual interest expense, paid quarterly from Plum Creek to the JV 10 year term with 2 year extension * The loan is an obligation of Plum Creek Timber Co, Cash $ - Loan $ 783 Inc., the REIT’s holding c
Slide 7: Joint Venture Operation
Joint Venture Operation JV earnings and cash flow generated by timber operations and interest income Preferred distributions have priority over common distributions Plum Creek distributions consist of $56 million annual preferred distributions 9.1% of common distributions The Campbell Group distribu
Slide 8: Plum Creek Capital Allocation Plans
Plum Creek Capital Allocation Plans Repayment of existing debt with 50% of proceeds reduces interest expense on existing debt by approximately $27 million/year Retire $300 million private placement debt over the next 12 months, average interest rate of 8.1% – $100 million Q4 2008 – $ 50 million Q1 2
Slide 9: Key Financial Model Items
Key Financial Model Items No gain recognized upon contribution of timberlands. The book basis of contributed timberlands = book basis of Plum Creek’s investment in the unconsolidated partnership. Equity method of accounting for preferred and common interests. Plum Creek records its share of earnings
Slide 10: Summary Guidance Transaction and Initial Capital Allocation
Summary Guidance Transaction and Initial Capital Allocation INCOME STATEMENT ITEMS ($ in millions) Estimated reduction annual operating income directly attributed to the timberlands contributed to the JV. Operating Income $ (23) Based on 2007 results. The estimate assumes no reduction in allocated c
Slide 11: Summary Guidance Transaction and Initial Capital Allocation
Summary Guidance Transaction and Initial Capital Allocation ($ in millions) BALANCE SHEET ITEMS Cash $ 783 Loan proceeds from JV. Cash $ (392) Debt retirement. Long-Term Debt $ 783 Loan from JV. Long-Term Debt $ (392) Retirement of debt. Timber and $ (190) Book value of timberlands contributed to JV
Slide 12: Misc. Questions
Misc. Questions Q: Why did Plum Creek elect to go this route rather than simply Q: Does Plum Creek’s ownership interest in the JV qualify as a good continue to manage these assets? REIT asset? A: The transaction highlights the value of Plum Creek’s Southern A: Yes, because the assets of the JV are c
Slide 13: If you have further questions, please contact
If you have further questions, please contact : John B. Hobbs Director-Investor Relations (206) 467-3628 13
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