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EX-32.2 - SECTION 906 CFO CERTIFICATION - PLUM CREEK TIMBER CO INCex32220150630.htm
EX-31.1 - SECTION 302 CEO CERTIFICATION - PLUM CREEK TIMBER CO INCex31120150630.htm
EX-31.2 - SECTION 302 CFO CERTIFICATION - PLUM CREEK TIMBER CO INCex31220150630.htm
EX-32.1 - SECTION 906 CEO CERTIFICATION - PLUM CREEK TIMBER CO INCex32120150630.htm
EX-12.1 - COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES - PLUM CREEK TIMBER CO INCex12120150630.htm

 
 
 
 
 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
 
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2015

OR
 
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 1-10239
PLUM CREEK TIMBER COMPANY, INC.
(Exact name of registrant as specified in its charter)
 
Organized in the
State of Delaware
 
I.R.S. Employer Identification No.
91-1912863

601 Union Street, Suite 3100
Seattle, Washington 98101-1374
Telephone: (206) 467-3600

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
Yes  x    No  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes  x    No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

Large accelerated filer  x        Accelerated filer    o        Non-accelerated filer  o        Smaller reporting company  o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes  o    No   x

The number of outstanding shares of the registrant’s common stock, as of July 31, 2015 was 174,729,333.


 
 
 
 
 





PLUM CREEK TIMBER COMPANY, INC.
QUARTERLY REPORT ON FORM 10-Q
For the Quarter ended June 30, 2015

TABLE OF CONTENTS
 




PART I – FINANCIAL INFORMATION

ITEM 1.
FINANCIAL STATEMENTS

PLUM CREEK TIMBER COMPANY, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
 
 
Quarter Ended June 30,
(In Millions, Except Per Share Amounts)
 
2015
 
2014
REVENUES:
 
 
 
 
Timber
 
$
170

 
$
171

Real Estate
 
25

 
77

Manufacturing
 
92

 
94

Energy and Natural Resources
 
8

 
9

Other
 
7

 
5

Total Revenues
 
302

 
356

 
 
 
 
 
COSTS AND EXPENSES:
 
 
 
 
Cost of Goods Sold:
 
 
 
 
Timber
 
127

 
125

Real Estate
 
12

 
30

Manufacturing
 
77

 
84

Energy and Natural Resources
 
3

 
3

Other
 
8

 
5

Total Cost of Goods Sold
 
227

 
247

Selling, General and Administrative
 
32

 
30

Total Costs and Expenses
 
259

 
277

 
 
 
 
 
Other Operating Income (Expense), net
 
2

 
3

 
 
 
 
 
Operating Income
 
45

 
82

 
 
 
 
 
Earnings from Unconsolidated Entities
 
19

 
15

 
 
 
 
 
Interest Expense, net:
 
 
 
 
Interest Expense (Debt Obligations to Unrelated Parties)
 
27

 
27

Interest Expense (Note Payable to Timberland Venture)
 
15

 
15

Total Interest Expense, net
 
42

 
42

 
 
 
 
 
Income before Income Taxes
 
22

 
55

 
 
 
 
 
Provision (Benefit) for Income Taxes
 
1

 

 
 
 
 
 
Net Income
 
$
21

 
$
55

 
 
 
 
 
PER SHARE AMOUNTS:
 
 
 
 
 
 
 
 
 
Net Income per Share – Basic
 
$
0.12

 
$
0.31

Net Income per Share – Diluted
 
$
0.12

 
$
0.31

 
 
 
 
 
Dividends Declared – per Common Share Outstanding
 
$
0.44

 
$
0.44

 
 
 
 
 
Weighted-Average Number of Shares Outstanding
 
 
 
 
– Basic
 
175.5

 
177.1

– Diluted
 
175.7

 
177.4

 
 
 
 
 
 
 
 
 
 
SUPPLEMENTAL INCOME STATEMENT INFORMATION:
 
 
 
 
    Equity Earnings from Timberland Venture
 
$
17

 
$
17

    Equity Earnings (Loss) from Real Estate Development Ventures
 
2

 
(2
)
Earnings from Unconsolidated Entities
 
$
19

 
$
15


See accompanying Notes to Consolidated Financial Statements





3


PLUM CREEK TIMBER COMPANY, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
 
 
 
 
 
 
 
Six Months Ended June 30,
(In Millions, Except Per Share Amounts)
 
2015
 
2014
REVENUES:
 
 
 
 
Timber
 
$
362

 
$
363

Real Estate
 
134

 
100

Manufacturing
 
186

 
184

Energy and Natural Resources
 
16

 
18

Other
 
10

 
8

Total Revenues
 
708

 
673

 
 
 
 
 
COSTS AND EXPENSES:
 
 
 
 
Cost of Goods Sold:
 
 
 
 
Timber
 
266

 
263

Real Estate
 
101

 
40

Manufacturing
 
160

 
163

Energy and Natural Resources
 
5

 
5

Other
 
10

 
8

Total Cost of Goods Sold
 
542

 
479

Selling, General and Administrative
 
65

 
59

Total Costs and Expenses
 
607

 
538

 
 
 
 
 
Other Operating Income (Expense), net
 
5

 
4

 
 
 
 
 
Operating Income
 
106

 
139

 
 
 
 
 
Earnings from Unconsolidated Entities
 
41

 
29

 
 
 
 
 
Interest Expense, net:
 
 
 
 
Interest Expense (Debt Obligations to Unrelated Parties)
 
54

 
54

Interest Expense (Note Payable to Timberland Venture)
 
29

 
29

Total Interest Expense, net
 
83

 
83

 
 
 
 
 
Income before Income Taxes
 
64

 
85

 
 
 
 
 
Provision (Benefit) for Income Taxes
 
1

 

 
 
 
 
 
Net Income
 
$
63

 
$
85

 
 
 
 
 
PER SHARE AMOUNTS:
 
 
 
 
 
 
 
 
 
Net Income per Share – Basic
 
$
0.35

 
$
0.48

Net Income per Share – Diluted
 
$
0.35

 
$
0.47

 
 
 
 
 
Dividends Declared – per Common Share Outstanding
 
$
0.88

 
$
0.88

 
 
 
 
 
Weighted-Average Number of Shares Outstanding
 
 
 
 
– Basic
 
175.7

 
177.1

– Diluted
 
175.9

 
177.4

 
 
 
 
 
 
 
 
 
 
SUPPLEMENTAL INCOME STATEMENT INFORMATION:
 
 
 
 
Equity Earnings from Timberland Venture
 
$
40

 
$
32

Equity Earnings (Loss) from Real Estate Development Ventures
 
1

 
(3
)
Earnings from Unconsolidated Entities
 
$
41

 
$
29


See accompanying Notes to Consolidated Financial Statements

4


PLUM CREEK TIMBER COMPANY, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)

 
 
Quarter Ended June 30,
(In Millions)
 
2015
 
2014
NET INCOME
 
$
21

 
$
55

 
 
 
 
 
OTHER COMPREHENSIVE INCOME BEFORE INCOME TAXES:
 
 
 
 
  Defined Benefit Pension Plans:
 
 
 
 
       Amortization of Actuarial Loss Reclassified to Pension Expense
 
1

 
1

  Unrealized Gains (Losses) on Grantor Trust Assets:
 
 
 
 
       Unrealized Holding Gains (Losses) Arising During Period
 

 
(2
)
       Less: Reclassification for Amounts Recognized in Net Income
 

 

 
 
 
 
 
Other Comprehensive Income (Loss) Before Tax
 
1

 
(1
)
 
 
 
 
 
Income Tax Expense (Benefit) Related to Items of Other Comprehensive Income
 

 

 
 
 
 
 
Other Comprehensive Income (Loss) After Tax
 
1

 
(1
)
 
 
 
 
 
Comprehensive Income
 
$
22

 
$
54

 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended June 30,
(In Millions)
 
2015
 
2014
NET INCOME
 
$
63

 
$
85

 
 
 
 
 
OTHER COMPREHENSIVE INCOME BEFORE INCOME TAXES:
 
 
 
 
  Defined Benefit Pension Plans:
 
 
 
 
       Amortization of Actuarial Loss Reclassified to Pension Expense
 
2

 
1

  Unrealized Gains (Losses) on Grantor Trust Assets:
 
 
 
 
       Unrealized Holding Gains (Losses) Arising During Period
 
(1
)
 
(1
)
       Less: Reclassification for Amounts Recognized in Net Income
 
(1
)
 

 
 
 
 
 
Other Comprehensive Income (Loss) Before Tax
 

 

 
 
 
 
 
Income Tax Expense (Benefit) Related to Items of Other Comprehensive Income
 

 

 
 
 
 
 
Other Comprehensive Income (Loss) After Tax
 

 

 
 
 
 
 
Comprehensive Income
 
$
63

 
$
85

 
 
 
 
 

See accompanying Notes to Consolidated Financial Statements


5


PLUM CREEK TIMBER COMPANY, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
 
(In Millions, Except Per Share Amounts)
 
June 30,
2015
 
December 31,
2014
ASSETS
 
 
 
 
Current Assets:
 
 
 
 
Cash and Cash Equivalents
 
$
83

 
$
92

Accounts Receivable
 
43

 
38

Inventories
 
56

 
61

Deferred Tax Asset
 
6

 
6

Assets Held for Sale
 
60

 
98

Other Current Assets
 
15

 
15

 
 
263

 
310

 
 
 
 
 
Timber and Timberlands, net
 
3,945

 
4,009

Minerals and Mineral Rights, net
 
286

 
289

Property, Plant and Equipment, net
 
118

 
120

Equity Investment in Timberland Venture
 
227

 
217

Equity Investment in Real Estate Development Ventures
 
126

 
126

Deferred Tax Asset
 
25

 
23

Investment in Grantor Trusts (at Fair Value)
 
48

 
48

Other Assets
 
42

 
45

Total Assets
 
$
5,080

 
$
5,187

 
 
 
 
 
LIABILITIES
 
 
 
 
Current Liabilities:
 
 
 
 
Current Portion of Long-Term Debt
 
$
439

 
$
439

Line of Credit
 
108

 
95

Accounts Payable
 
35

 
27

Interest Payable
 
26

 
22

Wages Payable
 
18

 
31

Taxes Payable
 
15

 
10

Deferred Revenue
 
34

 
23

Other Current Liabilities
 
11

 
10

 
 
686

 
657

 
 
 
 
 
Long-Term Debt
 
1,976

 
1,976

Note Payable to Timberland Venture
 
783

 
783

Other Liabilities
 
102

 
100

Total Liabilities
 
3,547

 
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) – 174.9 at June 30, 2015 and 175.9 at December 31, 2014
 
2

 
2

Additional Paid-In Capital
 
2,961

 
2,955

Retained Earnings (Accumulated Deficit)
 
(363
)
 
(271
)
Treasury Stock, at Cost, Common Shares – 29.5 at June 30, 2015 and 28.3 at December 31, 2014
 
(1,044
)
 
(992
)
Accumulated Other Comprehensive Income (Loss)
 
(23
)
 
(23
)
Total Stockholders’ Equity
 
1,533

 
1,671

Total Liabilities and Stockholders’ Equity
 
$
5,080

 
$
5,187


See accompanying Notes to Consolidated Financial Statements

6


PLUM CREEK TIMBER COMPANY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
 
 
 
Six Months Ended June 30,
(In Millions)
 
2015
 
2014
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
 
 
Net Income
 
$
63

 
$
85

Adjustments to Reconcile Net Income to Net Cash Provided By Operating Activities:
 
 
 
 
Depreciation, Depletion and Amortization (Includes $2 MDF Fire Impairment Loss in 2014)
 
65

 
66

Basis of Real Estate Sold
 
92

 
31

Earnings from Unconsolidated Entities
 
(41
)
 
(29
)
Distributions from Timberland Venture
 
30

 
28

Distributions from Real Estate Development Ventures
 
1

 

Deferred Income Taxes
 
(2
)
 

Working Capital Changes
 
15

 
7

Other
 
4

 
1

Net Cash Provided By (Used In) Operating Activities
 
227

 
189

 
 
 
 
 
CASH FLOWS FROM INVESTING ACTIVITIES
 
 
 
 
Capital Expenditures, Excluding Timberland Acquisitions (Includes $4 MDF Fire Replacement Capital in 2014)
 
(38
)
 
(40
)
Timberlands Acquired
 
(7
)
 

Contributions to Real Estate Development Ventures
 
(2
)
 
(4
)
Distributions from Real Estate Development Ventures
 
2

 
1

Insurance Recoveries (Property Damage)
 
1

 

Sales/(Purchases) of Marketable Securities, net
 
1

 

Net Cash Provided By (Used In) Investing Activities
 
(43
)
 
(43
)
 
 
 
 
 
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
 
 
Dividends
 
(155
)
 
(156
)
Borrowings on Line of Credit
 
216

 
748

Repayments on Line of Credit
 
(203
)
 
(1,063
)
Proceeds from Stock Option Exercises
 
1

 
1

Acquisition of Treasury Stock
 
(52
)
 
(2
)
Net Cash Provided By (Used In) Financing Activities
 
(193
)
 
(472
)
 
 
 
 
 
Increase (Decrease) In Cash and Cash Equivalents
 
(9
)
 
(326
)
Cash and Cash Equivalents:
 
 
 
 
Beginning of Period
 
92

 
433

 
 
 
 
 
End of Period
 
$
83

 
$
107


See accompanying Notes to Consolidated Financial Statements


7

PLUM CREEK TIMBER COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)



Note 1. Basis of Presentation

General. When we refer to “Plum Creek,” “the company,” “we,” “us,” or “our,” we mean Plum Creek Timber Company, Inc., a Delaware Corporation and a real estate investment trust, or “REIT,” and all of its wholly-owned consolidated subsidiaries.

The consolidated financial statements include all of the accounts of Plum Creek and its subsidiaries. At June 30, 2015, the company owned and managed approximately 6.4 million acres of timberlands in the Northwest, Southern, and Northeast United States. Included in the 6.4 million acres are approximately 675,000 acres of higher value timberlands, which are expected to be sold and/or developed over the next fifteen years for recreational, conservation or residential purposes. Included within the 675,000 acres of higher value timberlands are approximately 500,000 acres we expect to sell for recreational uses, approximately 100,000 acres we expect to sell for conservation and approximately 75,000 acres that are identified as having development potential. In addition, the company has approximately 225,000 acres of non-strategic timberlands, which are expected to be sold in smaller acreage transactions over the near and medium term. In the meantime, all of our timberlands continue to be managed productively in our business of growing and selling timber. At June 30, 2015, the company owned seven wood product conversion facilities in the Northwest United States. In March 2015, due to the loss of a significant customer, the company permanently closed its remanufacturing facility in Meridian, Idaho.

Plum Creek has elected to be taxed as a REIT under sections 856-860 of the United States Internal Revenue Code and, as such, generally does not pay corporate-level income tax. However, the company conducts certain non-REIT activities through various taxable REIT subsidiaries, which are subject to corporate-level income tax. These activities include our manufacturing operations, the harvesting and selling of logs, the development and/or sale of some of our higher value timberlands, timber and wood fiber procurement services, coal leases, and the company's investment in real estate development ventures. Plum Creek’s overall effective tax rate is lower than the federal statutory corporate rate due to Plum Creek’s status as a REIT.

Intercompany transactions and accounts have been eliminated in consolidation. All transactions are denominated in United States dollars.

The consolidated financial statements included in this Form 10-Q are unaudited and do not contain all of the information required by U.S. generally accepted accounting principles to be included in a full set of financial statements. The consolidated balance sheet at December 31, 2014 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The audited financial statements in the company’s 2014 Annual Report on Form 10-K include a summary of significant accounting policies of the company and should be read in conjunction with this Form 10-Q. In the opinion of management, all material adjustments necessary to present fairly the results of operations for such periods have been included in this Form 10-Q. All such adjustments are of a normal and recurring nature. The results of operations for interim periods are not necessarily indicative of the results of operations for the entire year.

Reclassifications. Certain prior year amounts have been reclassified to conform to the 2015 presentation. The reclassifications had no impact on operating income or net income.


 

8

PLUM CREEK TIMBER COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


Note 2. Earnings Per Share

The following table sets forth the reconciliation of basic and diluted earnings per share for the quarterly and six-month periods ended June 30 (in millions, except per share amounts):
 
Quarter Ended June 30,
 
2015
 
2014
Net Income Available to Common Stockholders
$
21

 
$
55

Denominator for Basic Earnings per Share
175.5

 
177.1

Effect of Dilutive Securities – Stock Options
0.2

 
0.2

Effect of Dilutive Securities – Restricted Stock Units and Value Management Plan

 
0.1

Denominator for Diluted Earnings per Share – Adjusted for Dilutive Securities
175.7

 
177.4

Per Share Amounts:
 
 
 
Net Income Per Share – Basic
$
0.12

 
$
0.31

Net Income Per Share – Diluted
$
0.12

 
$
0.31

 
 
 
 
 
Six Months Ended June 30,
 
2015
 
2014
Net Income Available to Common Stockholders
$
63

 
$
85

Denominator for Basic Earnings per Share
175.7

 
177.1

Effect of Dilutive Securities – Stock Options
0.2

 
0.2

Effect of Dilutive Securities – Restricted Stock Units and Value Management Plan

 
0.1

Denominator for Diluted Earnings per Share – Adjusted for Dilutive Securities
175.9

 
177.4

Per Share Amounts:
 
 
 
Net Income Per Share - Basic
$
0.35

 
$
0.48

Net Income Per Share - Diluted
$
0.35

 
$
0.47


Under the company's Stock Incentive Plan, the company grants restricted stock units, which prior to vesting, are entitled to non-forfeitable cash payments equal to dividends paid on the company's common shares. These awards are considered participating securities for purposes of computing basic and diluted earnings per share.


Note 3. Inventories

Inventories, accounted for using the lower of average cost or market, consisted of the following (in millions): 
 
June 30, 2015
 
December 31, 2014
Raw Materials (primarily logs)
$
9

 
$
12

Work-In-Process
3

 
3

Finished Goods
29

 
31

 
41

 
46

Supplies
15

 
15

Total
$
56

 
$
61




9

PLUM CREEK TIMBER COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


Note 4. Timber and Timberlands

Timber and Timberlands consisted of the following (in millions): 
 
June 30, 2015
 
December 31, 2014
Timber and Logging Roads, net
$
2,490

 
$
2,518

Timber Deeds, net
75

 
83

Timberlands
1,380

 
1,408

Timber and Timberlands, net
$
3,945

 
$
4,009



Note 5. Property, Plant and Equipment

Property, Plant and Equipment consisted of the following (in millions): 
 
June 30, 2015
 
December 31, 2014
Land, Buildings and Improvements
$
99

 
$
97

Machinery and Equipment
335

 
331

 
434

 
428

Accumulated Depreciation
(316
)
 
(308
)
Property, Plant and Equipment, net
$
118

 
$
120



Note 6. Income Taxes

Plum Creek has elected to be taxed as a REIT under sections 856-860 of the United States Internal Revenue Code. A REIT generally does not pay corporate-level income tax if it distributes 100% of its taxable income to shareholders and satisfies other organizational and operational requirements as set forth in the Internal Revenue Code. If a company fails to qualify as a REIT in any taxable year, it will be subject to federal income taxes at regular corporate rates (including any applicable alternative minimum tax) and may not be able to qualify as a REIT for four subsequent taxable years.

Plum Creek operates as a REIT through various wholly-owned subsidiaries and a joint venture partnership. The activities of the operating partnerships and joint venture partnership consist primarily of sales of standing timber under pay-as-cut sales contracts.

Plum Creek conducts certain activities through various wholly-owned taxable REIT subsidiaries, which are subject to corporate-level income tax. These activities include the company's manufacturing operations, the harvesting and sale of logs, the development and/or sale of some of the company's higher value timberlands, timber and wood fiber procurement services, coal leases, and the company's investment in real estate development ventures. Plum Creek's taxable REIT subsidiaries file a consolidated federal income tax return.

Prior to 2011, Plum Creek was generally subject to corporate-level tax (built-in gains tax) when the company made a taxable disposition of certain properties acquired in a 2001 merger. The built-in gains tax applied to gains recognized from such asset sales to the extent that the fair value of the property exceeded its tax basis at the merger date. Built-in gains tax was generally not payable on dispositions of property to the extent the proceeds from such dispositions were reinvested in qualifying like-kind replacement property.

The company's 2008 federal income tax return is currently being audited by the Internal Revenue Service (“IRS”). The IRS has proposed an adjustment to the company's U.S. federal income tax treatment of the Timberland Venture formation transaction, which occurred on October 1, 2008, on the basis that the transfer of the timberlands to Southern Diversified Timber, LLC was a taxable transaction to the company at the time of the transfer rather than a nontaxable capital contribution to the Timberland Venture. The company has filed a protest with IRS Appeals. Based on recent discussions with IRS Appeals, the company does not expect to reach a resolution with IRS Appeals and plans to file a petition in the United States Tax Court.

If the IRS's position is upheld on judicial appeal, it could result in a maximum built-in gains tax liability of approximately $100 million. In addition, the company could be required to accelerate the distribution to its stockholders of up to $600 million of gain from the transaction. The company expects that as much as 80% of any such distribution could be made with the company's

10

PLUM CREEK TIMBER COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


common stock, and stockholders would be subject to tax on the distribution at the applicable capital gains tax rate. The company would also be required to pay interest on the undistributed gain, which would be substantial, and, if applicable, penalties.

We believe the transfer of the timberlands was a nontaxable contribution to the Timberland Venture and not a taxable transaction. We have not accrued income taxes for financial reporting purposes with respect to this matter and do not believe it is reasonably possible any material accrual will be made within the next twelve months. We are confident in our position and believe that the proposed re-characterization of the Timberland Venture formation transaction by the IRS will ultimately be unsuccessful. We intend to vigorously contest this re-characterization.


Note 7. Borrowings

Debt consisted of the following (in millions): 
 
June 30, 2015
 
December 31, 2014
Variable Rate Debt
 
 
 
Term Credit Agreement (A)
$
225

 
$
225

Revolving Line of Credit (B)
108

 
95

Fixed Rate Debt
 
 
 
Senior Notes
1,330

 
1,330

Installment Note Payable
860

 
860

Note Payable to Timberland Venture
783

 
783

Total Debt
3,306

 
3,293

Less:
 
 
 
Current Portion of Long-Term Debt
439

 
439

Line of Credit
108

 
95

Long-Term Portion
$
2,759

 
$
2,759


(A)
The company has a $225 million term credit agreement that matures on April 3, 2019. The interest rate on the $225 million term credit agreement was 1.69% and 1.67% as of June 30, 2015 and December 31, 2014, respectively. After giving effect to expected patronage distributions, the effective net interest rate on the term loan was approximately 1% as of both June 30, 2015 and December 31, 2014.

(B)
The weighted-average interest rate for the borrowings on the line of credit was 1.38% and 1.34% as of June 30, 2015 and December 31, 2014, respectively. As of June 30, 2015, we had $108 million of borrowings and $1 million of standby letters of credit outstanding; $591 million remained available for borrowing under our $700 million line of credit. As of July 1, 2015, $73 million of the borrowings outstanding under our line of credit was repaid.




11

PLUM CREEK TIMBER COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


Note 8. Stockholders’ Equity

The changes in the company’s stockholders’ equity accounts were as follows during 2015 (in millions): 
 
Common Stock
 
 
 
Retained
Earnings (Accumulated Deficit)
 
 
 
Accumulated
Other
Comprehensive
Income (Loss)
 
 
 
Shares
 
Dollars
 
Paid-in
Capital
 
 
Treasury
Stock
 
Total
Equity
January 1, 2015
175.9

 
$
2

 
$
2,955

 
$
(271
)
 
$
(992
)
 
$
(23
)
 
$
1,671

Net Income
 
 
 
 
 
 
42

 
 
 
 
 
42

Other Comprehensive Income (Loss)
 
 
 
 
 
 
 
 
 
 
(1
)
 
(1
)
Dividends
 
 
 
 
 
 
(77
)
 
 
 
 
 
(77
)
Stock Option Exercises

 

 
1

 
 
 
 
 
 
 
1

Shares Issued under Stock Incentive Plans
0.2

 

 

 
 
 
 
 
 
 

Share-based Compensation
 
 
 
 
3

 
 
 
 
 
 
 
3

Common Stock Repurchased
(0.5
)
 

 
 
 
 
 
(21
)
 
 
 
(21
)
March 31, 2015
175.6

 
$
2

 
$
2,959

 
$
(306
)
 
$
(1,013
)
 
$
(24
)
 
$
1,618

Net Income
 
 
 
 
 
 
21

 
 
 
 
 
21

Other Comprehensive Income (Loss)
 
 
 
 
 
 
 
 
 
 
1

 
1

Dividends
 
 
 
 
 
 
(78
)
 
 
 
 
 
(78
)
Share-based Compensation
 
 
 
 
2

 
 
 
 
 
 
 
2

Common Stock Repurchased
(0.7
)
 

 
 
 
 
 
(31
)
 
 
 
(31
)
June 30, 2015
174.9

 
$
2

 
$
2,961

 
$
(363
)
 
$
(1,044
)
 
$
(23
)
 
$
1,533


The changes in the company’s accumulated other comprehensive income (loss) by component, net of tax, were as follows during 2015 (in millions): 
 
Net Unrealized Holding Gain (Loss) (A)
 
Defined Benefit Plan Actuarial Net Loss (B)
 
Gain on Cash Flow Hedge
 
Total
January 1, 2015
$
14

 
$
(42
)
 
$
5

 
$
(23
)
Other Comprehensive Income (Loss) before Reclassifications
(1
)
 

 

 
(1
)
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)
(1
)
 
1

 

 

March 31, 2015
$
12

 
$
(41
)
 
$
5

 
$
(24
)
Other Comprehensive Income (Loss) before Reclassifications

 

 

 

Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)

 
1

 

 
1

June 30, 2015
$
12

 
$
(40
)
 
$
5

 
$
(23
)

(A)
Unrealized holding gains are reclassified to Other Operating Income (Expense), net in the Consolidated Statements of Income when the related available for sale securities are sold.

(B)
Amortization of actuarial gains and losses on the company's defined benefit pension plans is included in the computation of pension cost. See Note 10 of the Notes to Consolidated Financial Statements.



12

PLUM CREEK TIMBER COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


Note 9. Fair Value Measurements

Assets and Liabilities Measured at Fair Value on a Recurring Basis. The company’s fair value measurements of its cash equivalents, available-for-sale securities, and trading securities, measured on a recurring basis, are categorized as Level 1 measurements under the fair value hierarchy in the Accounting Standards Codification. A Level 1 valuation is based on quoted prices in active markets at the measurement date for identical unrestricted assets or liabilities. Summarized below are the Level 1 assets reported in the company’s financial statements at fair value, measured on a recurring basis (in millions): 
 
Balance at
June 30, 2015
 
Fair Value Measurements
at Reporting Date Using
Quoted Prices in Active
Markets of Identical Assets
(Level 1 Measurements)
Cash Equivalents (A)
$
80

 
$
80

Available-for-Sale Securities (B)
43

 
43

Trading Securities (B)
5

 
5

Total
$
128

 
$
128

 
 
 
 
 
Balance at
December 31, 2014
 
Fair Value Measurements
at Reporting Date Using
Quoted Prices in Active
Markets of Identical Assets
(Level 1 Measurements)
Cash Equivalents (A)
$
90

 
$
90

Available-for-Sale Securities (B)
43

 
43

Trading Securities (B)
5

 
5

Total
$
138

 
$
138

 
(A)
Consists of several money market funds and is included in the $83 million and $92 million of Cash and Cash Equivalents in the Consolidated Balance Sheets at June 30, 2015 and December 31, 2014, respectively.

(B)
Consists of several mutual funds and is included in Investment in Grantor Trusts in the Consolidated Balance Sheets at June 30, 2015 and December 31, 2014. At June 30, 2015, investments in these mutual funds were approximately 45% in domestic (U.S.) equities, 25% in international equities and 30% in debt securities.

Available-for-Sale Securities. Certain investments in the grantor trusts relate to the company's non-qualified pension plans and are classified as available-for-sale securities. The company has invested in various money market, debt and equity mutual funds and plans to use these investments to fund its non-qualified pension obligations. Unrealized holding gains and losses are included as a component of accumulated other comprehensive income. The company records changes in unrealized holding gains and losses in Other Comprehensive Income, unless an other than temporary impairment has occurred, which is then charged to expense. Changes in the fair value of available-for-sale securities were not material to the company's financial position or results of operations for the quarters and six-month periods ended June 30, 2015 and June 30, 2014. As of both June 30, 2015 and December 31, 2014, the amortized cost of the available-for-sale securities was approximately $31 million. See Note 8 of the Notes to Consolidated Financial Statements.

Trading Securities. Certain investments in the grantor trusts relate to the company's deferred compensation plans and are classified as trading securities. Deferred compensation amounts are invested in various money market, debt and equity mutual funds. The company plans to use these investments to fund deferred compensation obligations. Realized gains and losses and changes in unrealized gains and losses (and a corresponding amount of compensation expense) are recognized in the company's Consolidated Statements of Income. Deferred compensation obligations are included in Other Liabilities and were $5 million at both June 30, 2015 and December 31, 2014. Changes in the fair value of trading securities were not material to the company's financial position or results of operations for the quarters and six-month periods ended June 30, 2015 and June 30, 2014.


13

PLUM CREEK TIMBER COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


Other Instruments. Summarized below are the carrying amount and fair value of the company's debt (estimated using the discounted cash flow method) along with the categorization under the fair value hierarchy in the Accounting Standards Codification (in millions): 
 
 
 
 
Fair Value at June 30, 2015
 
 
Carrying Amount at June 30, 2015
 
Quoted Prices
In Active
Markets for
Identical Assets
(Level 1)
 
Significant
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
 
Total
Public Debt (A)
 
$
1,330

 
$

 
$
1,373

 
$

 
$
1,373

Term Credit Agreement (B)
 
225

 

 
225

 

 
225

Line of Credit (C)
 
108

 

 
108

 

 
108

Installment Note Payable (D)
 
860

 

 
891

 

 
891

Note Payable to Timberland Venture (E)
 
783

 

 

 
890

 
890

Total Debt
 
$
3,306

 
$

 
$
2,597

 
$
890

 
$
3,487

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair Value at December 31, 2014
 
 
Carrying Amount at
December 31, 2014
 
Quoted Prices
In Active
Markets for
Identical Assets
(Level 1)
 
Significant
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
 
Total
Public Debt (A)
 
$
1,330

 
$

 
$
1,398

 
$

 
$
1,398

Term Credit Agreement (B)
 
225

 

 
225

 

 
225

Line of Credit (C)
 
95

 

 
95

 

 
95

Installment Note Payable (D)
 
860

 

 
906

 

 
906

Note Payable to Timberland Venture (E)
 
783

 

 

 
892

 
892

Total Debt
 
$
3,293

 
$

 
$
2,624

 
$
892

 
$
3,516


(A)
Fair value of the company's Public Debt (publicly issued Senior Notes) is estimated using multiple market quotes for the company's public bonds.

(B)
Fair value is estimated by adjusting the spread over LIBOR to a current market quote for comparable debt.

(C)
Fair value is estimated by adjusting the spread over LIBOR to a current market quote for comparable credit lines.

(D)
Fair value is estimated by adjusting the spread over the applicable Treasury rate to a current market quote for comparable debt.

(E)
Fair value is estimated by using market quotes for the company's Public Debt adjusted by an estimated risk premium for holding company debt and the different maturity.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis. There were no fair value measurements of assets or liabilities measured on a nonrecurring basis during the six-month periods ended June 30, 2015 and 2014.



14

PLUM CREEK TIMBER COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


Note 10. Employee Pension Plans

The components of pension cost were as follows for the quarterly and six-month periods ended June 30 (in millions): 
 
Quarter Ended June 30,
 
2015
 
2014
Service Cost
$
2

 
$
2

Interest Cost
3

 
2

Expected Return on Plan Assets
(3
)
 
(3
)
Recognized Actuarial Loss
1

 
1

Total Pension Cost
$
3

 
$
2

 
 
 
 
 
Six Months Ended June 30,
 
2015
 
2014
Service Cost
$
4

 
$
4

Interest Cost
5

 
4

Expected Return on Plan Assets
(6
)
 
(5
)
Recognized Actuarial Loss
2

 
1

Total Pension Cost
$
5

 
$
4



Note 11. Commitments and Contingencies

Contingencies. The company is subject to regulations regarding forest, harvest and manufacturing practices and is, from time to time, involved in various legal proceedings, including, but not limited to, environmental and regulatory matters, incidental to its business. Reserves have been established for any probable losses. Except as discussed in Note 6, management does not believe that these matters, individually or in the aggregate, are material. However, it is possible that one or more of these matters could become material in the future, and an unfavorable outcome in one or more of these matters could have a material negative financial impact on the company. See Note 6 of the Notes to Consolidated Financial Statements for a discussion of a tax proceeding involving the company and its consolidated subsidiaries.


Note 12. Variable Interest Entities

Real Estate Development Ventures. MWV-Charleston Land Partners, LLC (“MWV-CLP”) is a variable interest entity. The primary activities of MWV-CLP are the active development of residential and commercial real estate on approximately 22,000 acres ("Class A Properties") and the identification, entitlement, marketing, and selling of approximately 64,000 acres of high-value rural and development-quality lands ("Class B Properties"). MWV-CLP is managed by an affiliate of WestRock Company (formerly MeadWestvaco Corporation). MWV-CLP is financed by regular capital calls from the manager of MWV-CLP in proportion to a member’s ownership interest. If a member does not make a capital contribution, the member’s ownership interest is diluted. The company made an initial capital contribution of $152 million in 2013. Also, during the years 2014 to 2020, the company agreed to make additional capital contributions of at least $48 million in connection with its interest in the Class B Properties, of which $37 million remained outstanding as of June 30, 2015. The company does not intend to provide any other sources of financing for MWV-CLP. We account for our interest in MWV-CLP under the equity method of accounting.

The company is not the primary beneficiary of MWV-CLP. The company considers the activities that most significantly impact the economic performance of MWV-CLP to be the day-to-day operating decisions along with the oversight responsibilities for the real estate development projects and properties. WestRock Company has the power to direct the activities of MWV-CLP that most significantly impact its economic performance through its ability to manage the day-to-day operations of MWV-CLP. WestRock Company also has the ability to control all management decisions associated with the 22,000 acres of the Class A Properties through its majority representation on the board of directors for the Class A Properties and its joint control of the Class B Properties due to its equal representation on the board of directors for the Class B Properties.

The carrying amount of our investment in MWV-CLP is $126 million as of both June 30, 2015 and December 31, 2014, and is reported in the Consolidated Balance Sheets as Equity Investment in Real Estate Development Ventures. Our maximum exposure

15

PLUM CREEK TIMBER COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


to loss is $126 million, our carrying amount of our investment, plus any future capital contributions we elect to contribute to MWV-CLP. At a minimum, the company has agreed to make capital contributions in connection with its interest in Class B Properties of $37 million over the next six years. The company has a 50% ownership interest in the Class B Properties, and therefore, is entitled to 50% of the earnings or losses associated with these properties. Additionally, the company has a 4% ownership interest in the Class A Properties in which it is generally entitled to 4% of the earnings or losses associated with these properties.

Timberland Venture. In 2008, the company contributed 454,000 acres of timberlands located in its Southern Resources Segment to Southern Diversified Timber, LLC (“the Timberland Venture”) in exchange for a $705 million preferred interest and a 9% common interest valued at $78 million. The Timberland Venture’s other member, an affiliate of The Campbell Group LLC, contributed $783 million of cash in exchange for 91% of the Timberland Venture’s common interest. Following the contribution, the company borrowed $783 million from the Timberland Venture (“Note Payable to Timberland Venture”). The company accounts for its interest in the Timberland Venture under the equity method of accounting.
 
The Timberland Venture is a variable interest entity. The primary operating activities of the Timberland Venture consist of owning timberlands and entering into cutting contracts with an affiliate of the other member. Besides quarterly interest payments on the Note Payable to Timberland Venture, the company has not provided financing or other support to the venture. The venture generates sufficient cash from operating activities to finance its operations.

We are not the primary beneficiary of the Timberland Venture. The company does not manage the day-to-day operations of the Timberland Venture, has only limited protective rights and its involvement is generally limited to receiving distributions on its preferred and common interests. We are not the primary beneficiary because we do not direct the activities that most significantly impact the Timberland Venture’s economic performance. We believe that the activities that most significantly impact the Timberland Venture’s economic performance include managing the timberlands along with the timing and extent of the harvesting activities, neither of which we control.

The carrying amount of the investment is $227 million at June 30, 2015 and $217 million at December 31, 2014, and it is reported in the Consolidated Balance Sheets as Equity Investment in Timberland Venture. Our maximum exposure to loss is $227 million, the carrying amount of the investment. Generally, losses are first allocated among the common interests based on positive capital accounts in which we hold a 9% common interest. No losses are allocated to our preferred interest ($705 million) until the common interests have absorbed losses of approximately $861 million.


Note 13. Summarized Income Statement Information of the Timberland Venture

The earnings of the Timberland Venture are a significant component of consolidated earnings. See Note 12 of the Notes to Consolidated Financial Statements. Equity earnings for the Timberland Venture were $40 million for the six-month period ending June 30, 2015 and were $32 million for the six-month period ending June 30, 2014. Equity earnings includes the amortization of the difference between the book value of the company’s investment and its proportionate share of the Timberland Venture’s net assets. For the six-month periods ended June 30, 2015 and June 30, 2014, amortization of basis difference was $12 million and $4 million, respectively. Furthermore, interest expense in connection with the loan from the Timberland Venture was $29 million for each of the six-month periods ended June 30, 2015 and 2014. The table below presents summarized income statement information for the Timberland Venture (in millions): 
 
Six Months Ended June 30,
 
2015
 
2014
Revenues
$
10

 
$
10

Cost of Goods Sold (A)
9

 
9

Selling, General and Administrative Expenses
2

 
2

Operating Income (Loss)
(1
)
 
(1
)
Interest Income, net
29

 
29

Net Income before Allocation to Preferred and Common Interests
$
28

 
$
28


(A)
Cost of Goods Sold includes Depreciation, Depletion and Amortization of $8 million for each of the six-month periods ended June 30, 2015 and 2014.

16

PLUM CREEK TIMBER COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


Note 14. Segment Information

The tables below present information about reported segments for the quarterly and six-month periods ended June 30 (in millions): 
 
Northern
Resources
 
Southern
Resources
 
Real
Estate
 
Manufacturing(A)
 
Energy and Natural Resources
 
Other(B)
 
Total(C)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended June 30, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
External Revenues
$
41

 
$
129

 
$
25

 
$
92

 
$
8

 
$
7

 
$
302

Intersegment Revenues
6

 

 

 

 

 

 
6

Depreciation, Depletion and Amortization
6

 
21

 

 
2

 
2

 

 
31

Basis of Real Estate Sold

 

 
9

 

 

 

 
9

Other Operating Gain

 

 

 
2

 

 

 
2

Equity Earnings (Loss)

 

 

 

 

 
2

 
2

Operating Income (Loss)
3

 
32

 
11

 
14

 
5

 
2

 
67

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended June 30, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
External Revenues
$
44

 
$
127

 
$
77

 
$
94

 
$
9

 
$
5

 
$
356

Intersegment Revenues
6

 

 

 

 

 

 
6

Depreciation, Depletion and Amortization
6

 
19

 

 
6

 
2

 

 
33

Basis of Real Estate Sold

 

 
25

 

 

 

 
25

Other Operating Gain

 

 

 
2

 

 

 
2

Equity Earnings (Loss)

 

 

 

 

 
(2
)
 
(2
)
Operating Income (Loss)
5

 
33

 
45

 
10

 
6

 
(3
)
 
96

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Northern
Resources
 
Southern
Resources
 
Real
Estate(D)
 
Manufacturing(A)
 
Energy and Natural Resources
 
Other(B)
 
Total(C)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended June 30, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
External Revenues
$
105

 
$
257

 
$
134

 
$
186

 
$
16

 
$
10

 
$
708

Intersegment Revenues
12

 

 

 

 

 

 
12

Depreciation, Depletion and Amortization
13

 
41

 

 
5

 
4

 

 
63

Basis of Real Estate Sold

 

 
92

 

 

 

 
92

Other Operating Gain

 

 

 
2

 

 

 
2

Equity Earnings (Loss)

 

 

 

 

 
1

 
1

Operating Income (Loss)
16

 
63

 
30

 
23

 
10

 
1

 
143

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended June 30, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
External Revenues
$
113

 
$
250

 
$
100

 
$
184

 
$
18

 
$
8

 
$
673

Intersegment Revenues
14

 

 

 

 

 

 
14

Depreciation, Depletion and Amortization
14

 
37

 

 
9

 
4

 

 
64

Basis of Real Estate Sold

 

 
31

 

 

 

 
31

Other Operating Gain

 

 

 
2

 

 

 
2

Equity Earnings (Loss)

 

 

 

 

 
(3
)
 
(3
)
Operating Income (Loss)
21

 
64

 
57

 
19

 
12

 
(4
)
 
169



17

PLUM CREEK TIMBER COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


(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. For both the quarterly and six-month periods ended June 30, 2015 and June 30, 2014, we recorded gains related to insurance recoveries of $2 million 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 the Manufacturing Segment and are included in Other Operating Income (Expense), net in the Consolidated Statements of Income.

(B)
For segment reporting, Equity Earnings (Loss) from Real Estate Development Ventures is included in Operating Income (Loss) for the Other Segment. Equity earnings of $2 million and an equity loss of $2 million were recorded for the quarterly periods ended June 30, 2015 and June 30, 2014, respectively, and equity earnings of $1 million and an equity loss of $3 million were recorded for the six-month periods ended June 30, 2015 and June 30, 2014, respectively.

(C)
Consolidated depreciation, depletion and amortization includes unallocated corporate expense of $1 million for each of the quarterly periods ended June 30, 2015 and June 30, 2014, respectively, and $2 million for each of the six-month periods ended June 30, 2015 and June 30, 2014, respectively.

(D)
In January 2015, the company closed the second phase of a two-phase transaction with The Nature Conservancy, selling approximately 117,000 acres in Montana for $85 million. The first phase of the transaction, a sale of approximately 48,000 acres in Washington, closed in 2014. The total sales price of $131 million was allocated among the Montana and Washington properties based on an external appraisal.

A reconciliation of total segment operating income to income before income taxes is presented below for the quarterly and six-month periods ended June 30 (in millions): 
 
Quarter Ended June 30,
 
2015
 
2014
Total Segment Operating Income
$
67

 
$
96

Corporate and Other Unallocated Expenses
(20
)
 
(17
)
Other Unallocated Operating Income (Expense), net

 
1

Equity Earnings from Timberland Venture
17

 
17

Total Interest Expense, net
(42
)
 
(42
)
Income before Income Taxes
$
22

 
$
55

 
 
 
 
 
Six Months Ended June 30,
 
2015
 
2014
Total Segment Operating Income
$
143

 
$
169

Corporate and Other Unallocated Expenses
(39
)
 
(35
)
Other Unallocated Operating Income (Expense), net
3

 
2

Equity Earnings from Timberland Venture
40

 
32

Total Interest Expense, net
(83
)
 
(83
)
Income before Income Taxes
$
64

 
$
85



Note 15. Subsequent Events

Quarterly Dividend. On August 4, 2015, the Board of Directors authorized the company to make a dividend payment of $0.44 per share, or approximately $77 million, which will be paid on August 31, 2015 to stockholders of record on August 14, 2015.


18


ITEM 1.
FINANCIAL STATEMENTS (CONTINUED)

Included in this item are the consolidated financial statements related to Plum Creek Timberlands, L.P., a Delaware Limited Partnership and a wholly-owned subsidiary of Plum Creek Timber Company, Inc. These financial statements are provided pursuant to Rule 3-10 of Regulation S-X in connection with the shelf registration statement on Form S-3 filed in November of 2014 pursuant to which Plum Creek Timberlands, L.P. has registered and from time to time may offer and sell debt securities. As of June 30, 2015, Plum Creek Timberlands, L.P. has publicly issued and outstanding $1,333 million aggregate principal amount of Senior Notes ("Public Debt") pursuant to the shelf registration statement.


PLUM CREEK TIMBERLANDS, L.P.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)

 
 
Quarter Ended June 30,
(In Millions)
 
2015
 
2014
REVENUES:
 
 
 
 
Timber
 
$
170

 
$
171

Real Estate
 
25

 
77

Manufacturing
 
92

 
94

Energy and Natural Resources
 
8

 
9

Other
 
7

 
5

Total Revenues
 
302

 
356

 
 
 
 
 
COSTS AND EXPENSES:
 
 
 
 
Cost of Goods Sold:
 
 
 
 
Timber
 
127

 
125

Real Estate
 
12

 
30

Manufacturing
 
77

 
84

Energy and Natural Resources
 
3

 
3