Plum Creek Timber Company Inc. has a market cap of $6.38 billion; its shares were traded at around $39.16 with a P/E ratio of 47.2 and P/S ratio of 4.9. The dividend yield of Plum Creek Timber Company Inc. stocks is 4.2%. 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 Arnhold & S. Bleichroeder Advisers, LLC, Tom Gayner of Markel Gayner Asset Management Corp, Jim Simons of Renaissance Technologies LLC, Manning & Napier Advisors, Inc.
Highlight of Business Operations:Manufactured Products Segment operating income was $4 million for the first quarter of 2010 compared to a $22 million operating loss for the first quarter of 2009. This increase in operating performance was due primarily to no impairments, write-downs or severance charges in 2010, along with improved lumber prices. During the first quarter of 2009, we recorded a lumber mill impairment ($10 million), a related write-down of spare parts ($2 million), a write-down of mill inventories ($2 million) and severance charges ($2 million). Segment costs and expenses decreased by $24 million, or 30%, to $56 million for the first quarter of 2010 due primarily to no impairments, write-downs or severance charges in 2010 and lower lumber production.
Benefit for Income Taxes. The benefit for income taxes was $1 million for the first quarter of 2010 compared to a benefit for income taxes of $20 million for the first quarter of 2009. The decrease in the tax benefit of $19 million is due primarily to improved results in our manufacturing business which increased operating income by $26 million during the first quarter of 2010 compared to the first quarter of 2009 (resulting in $10 million less tax benefit in 2010). Additionally, in the first quarter of 2009, we recorded a tax benefit related to the reversal of $5 million of previously accrued built-in gains tax and a reduction to our deferred tax liability of $3 million. See Note 6 of the Notes to Consolidated Financial Statements.
During the first quarter of 2010, we generated cash from operating activities of $129 million, which was sufficient to fund our quarterly dividend distribution of $68 million and principal payments on our outstanding indebtedness of $53 million. We believe we have a strong balance sheet and do not foresee any short-term liquidity issues. At March 31, 2010, we had a cash balance of $304 million and had availability of $419 million under our line of credit. We have summarized our sources and uses of cash in a table at the end of this section.
The net lower proceeds from real estate sales of $164 million was due primarily to the $250 million of proceeds received during the first quarter of 2009 from the closing of the second phase of a three phase transaction, partially offset by several non-strategic sales in the first quarter of 2010. The favorable working capital change of $45 million in 2009 is due primarily to the timing of when proceeds from a like-kind exchange escrow account are either reinvested in replacement property or distributed to the company. Proceeds associated with a forward like-kind exchange are either reinvested in like-kind property within 180 days or distributed to the company at the end of either the 45-day identification period or the 180-day reinvestment period. At March 31, 2010, there were no funds held in a like-kind exchange escrow account as no like-kind exchange transactions were entered into during 2009 or during the first quarter of 2010. Whereas, during the first quarter 2009, we received proceeds of $45 million from our like-kind exchange escrow account related to transactions entered into during 2008. At present, we do not expect to enter into like-kind exchange transactions for the remainder of 2010. During the first quarter of 2010, we received proceeds of $10 million for a lease modification for gas exploration rights that were originally granted in 2008. The $10 million will be amortized into revenue over the remaining approximate three-year exploration term. See Other Segment in Results of Operations for further discussion.
Capital Expenditures. Capital expenditures, excluding the acquisition of timberlands, for the three months ended March 31, 2010 were $13 million compared to $17 million for the same period in 2009. Planned capital expenditures for 2010, excluding the acquisition of timberlands, are expected to be approximately $75 million and include approximately $65 million for our timberlands, $4 million for our manufacturing facilities, $3 million for real estate development investments, and $3 million for investments in information technology, primarily for resource accounting system enhancements. The timberland expenditures are primarily for reforestation and other expenditures associated with the planting and growing of trees. Approximately 60% of planned capital expenditures in 2010 are discretionary, primarily expenditures for silviculture. Capital expenditures at our manufacturing facilities consist primarily of expenditures to sustain operating activities and improve safety.
Line of Credit. The company has a $750 million revolving line of credit agreement that matures in June 2011. As of March 31, 2010, the weighted-average interest rate for the borrowings on the line of credit was 0.66%. The interest rate on the line of credit is based on LIBOR plus 0.425%. This rate can range from LIBOR plus 0.27% to LIBOR plus 1% depending on our debt ratings. Subject to customary covenants, the line of credit allows for borrowings from time to time up to $750 million, including up to $100 million of standby letters of credit. Borrowings on the line of credit fluctuate daily based on cash needs. As of March 31, 2010, we had $320 million of borrowings and $11 million of standby letters of credit outstanding; $419 million remained available for borrowing under our line of credit. As of April 1, 2010, $294 million of the borrowings under our line of credit was repaid.
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