PLUM CREEK TIMBER COMPANY INC. Reports Operating Results (10-Q)
Plum Creek Timber Company Inc. has a market cap of $6.01 billion; its shares were traded at around $37.08 with a P/E ratio of 37.6 and P/S ratio of 4.6. The dividend yield of Plum Creek Timber Company Inc. stocks is 4.6%. Plum Creek Timber Company Inc. had an annual average earning growth of 3.1% over the past 10 years.PCL is in the portfolios of Jean-Marie Eveillard of First Eagle Investment Management, LLC, Tom Gayner of Markel Gayner Asset Management Corp, Jeff Auxier of Auxier Focus Fund, Jim Simons of Renaissance Technologies LLC, Steven Cohen of SAC Capital Advisors, Manning & Napier Advisors, Inc.
Highlight of Business Operations: The Operating Partnership has borrowed and has currently outstanding $1.954 billion principal amount (excluding unamortized discount) of debt, including $458 million of publicly issued notes. PC Ventures has borrowed and has currently outstanding $783 million in principal amount of debt (the Note Payable to Timberland Venture) from an entity (the Timberland Venture) in which a subsidiary of the Operating Partnership has a common and preferred equity interest. See Note 12 of the Notes to Consolidated Financial Statements. PC Ventures used the proceeds from the borrowing to make a $783 million capital contribution to the Operating Partnership in exchange for a preferred equity interest in the Operating Partnership. PC Ventures has no other activities and the Operating Partnership has no ownership interest in PC Ventures.
we completed a non-cash exchange with the State of Washington. We recognized $25 million of revenue which represents the fair value of the lands we received. No operating income was recognized in the transaction as the book value of the timberlands we disposed of approximated the exchange value of $25 million.
Real Estate Segment operating income was 48% of its third quarter revenues for 2010 compared to 27% for 2009. This change was due primarily to the non-cash exchange, as the book value of the timberlands we disposed of approximated the exchange value of $25 million, and selling lower value conservation properties during the third quarter of 2009. Real Estate Segment costs and expenses decreased by $33 million to $20 million in the third quarter of 2010 due primarily to the non-cash exchange during 2009 ($25 million) and selling fewer acres during 2010.
Manufactured Products Segment operating income was $7 million for the third quarter of 2010 compared to an operating loss of $1 million for the third quarter of 2009. This increase in operating performance was due primarily to an increase in MDF, lumber and plywood sales prices and pension settlement expense recorded in the third quarter of 2009 ($4 million) in connection with mill closures and curtailments. Manufactured Products Segment costs and expenses decreased by $3 million, or 5%, to $63 million for the third quarter of 2010 due primarily to lower lumber sales volume and no pension settlement expense in the third quarter of 2010, offset in part by higher MDF sales volume.
Interest Expense, net. Interest expense, net of interest income, decreased $2 million, or 6%, to $34 million in the third quarter of 2010. This decrease was due primarily to debt retirements in 2010 and refinancing a portion of our fixed rate debt maturities on our line of credit. Current interest rates on fixed rate debt are substantially higher than interest rates on variable rate debt borrowings on our line of credit. Interest expense for both periods included $14 million related to our Note Payable to Timberland Venture.
Provision (Benefit) for Income Taxes. The provision for income taxes was zero for the third quarter of 2010 compared to a benefit for income taxes of $3 million for the third quarter of 2009. The increase in tax expense of $3 million is due primarily to improved results in our manufacturing business which increased operating income by $8 million during the third quarter of 2010 compared to the third quarter of 2009 (resulting in $3 million higher tax expense in 2010).
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