UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (Date of earliest event reported): July 1, 1999
PLUM CREEK TIMBER COMPANY, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-10239 91-1912863
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of Identification Number)
incorporation
or organization)
999 Third Avenue, Suite 2300
Seattle, Washington 98104-4096
Telephone: (206) 467-3600
Item 2. Acquisition or Disposition of Assets
On July 1, 1999, Plum Creek Timber Company, L.P. completed the conversion
from a master limited partnership to a corporation. Plum Creek Timber
Company, Inc., the new corporation, will elect to be treated for Federal
income tax purposes as a real estate investment trust or "REIT." Plum Creek
Timber Company, L.P. ceased to exist.
As a result of the conversion and in order to qualify as a REIT, certain
assets and associated liabilities related to manufacturing operations,
harvesting activities and certain timberlands of Plum Creek Timber Company,
L.P. were transferred to various corporate subsidiaries, including: Plum
Creek Marketing, Inc.; Plum Creek Northwest Lumber, Inc.; Plum Creek Plywood,
Inc.; Plum Creek MDF, Inc.; and Plum Creek Southern Lumber, Inc. Prior to
the conversion, Plum Creek Marketing, Inc. was a subsidiary of Plum Creek
Timber Company, L.P. Following the transfers, Plum Creek Timber Company,
Inc. is entitled to approximately 99% of the economics of the subsidiaries
operating the manufacturing and harvesting activities and managing certain
timberlands through a combination of preferred stock and nonvoting common
stock. The remaining 1% of the economics and 100% of the voting control of
the manufacturing and harvesting subsidiaries are owned by four individuals
who are also officers of Plum Creek Timber Company, Inc. (The individuals
are the President, Executive Vice Presidents, and the Vice President,
Resources.) The approximate 1% of the economics of the subsidiaries was
acquired for approximately $1.9 million, which was funded by demand notes
issued by Plum Creek Timber Company, Inc. As a result of this new structure,
the manufacturing and harvesting operations along with certain timberlands
sales will no longer be accounted for on a combined/consolidated basis with
the activities of the REIT. See pro forma financial statements and related
notes for an expanded description of the conversion in Item 7 of this
Form 8-K.
Item 7. Financial Statements and Exhibits
(b) Pro Forma Financial Information.
PLUM CREEK TIMBER COMPANY, INC.
UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma condensed consolidated financial
statements of Plum Creek Timber Company, Inc. (the "Corporation") reflect the
conversion of Plum Creek Timber Company, L.P. (the "Partnership"), a publicly
traded master limited partnership, into a publicly traded real estate
investment trust (the "Conversion Transaction.") In order to qualify as a
real estate investment trust (REIT) for tax purposes, certain of the
Partnership's assets and associated liabilities related to the manufacturing
operations, the harvesting activities, and certain timberlands were
transferred to several taxable corporations in exchange for preferred stock
and nonvoting common stock. Therefore, following the conversion, the
manufacturing and harvesting operations and certain timberland sales will no
longer be accounted for on a combined/consolidated basis with the activities
of the REIT. Instead, the financial statements of the Corporation will
reflect the net activities of the manufacturing and harvesting operations
along with certain timberland sales through its preferred stock and nonvoting
common stock ownership.
The unaudited pro forma condensed consolidated balance sheet assumes the
Conversion Transaction occurred on March 31, 1999. The unaudited pro forma
condensed consolidated statements of income for the three months ended March
31, 1999 and the year ended December 31, 1998 assume the Conversion
Transaction occurred at January 1, 1998.
The unaudited pro forma condensed consolidated financial statements are
not necessarily indicative of the operating results or financial position that
would have been achieved had the Conversion Transaction occurred on the
indicated dates and should not be construed as representative of future
operating results or financial position.
The unaudited pro forma condensed consolidated financial statements and
accompanying notes should be read in conjunction with the historical financial
statements and related notes.
PLUM CREEK TIMBER COMPANY, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
For the Three Month Period Ended March 31, 1999
(dollars in thousands, except per unit/share data)
Pro Forma Adjustments
---------------------
Corporate
Partnership Subsidiaries Pro Forma
Historical (a) Formation (h) Other Corporation
------------- ------------ ----- -----------
Revenues..............$ 178,221 $ (129,154) $ $ 49,067
------------- ------------ --------- ----------
Costs and Expenses:
Cost of Goods Sold.. 129,111 (114,899) 14,212
Selling, General and
Administrative.... 10,443 (6,940) 242(i) 3,745
------------- ------------ --------- ----------
Total Costs and
Expenses.......... 139,554 (121,839) 242 17,957
Operating Income...... 38,667 (7,315) (242) 31,110
Interest Expense...... (18,525) 4,728 (53)(j) (13,850)
Reorganization Costs.. (2,651) 2,651(k) 0
Other Expense - Net... 545 (215) 59(l) 378
(11)(o)
------------- ------------ --------- ----------
Income before Income
Taxes and Equity in
Earnings (Loss) of
Affiliates and
Preferred Stock
Dividends........... 18,036 (2,802) 2,404 17,638
Provision for Income
Taxes............... 174 (174) 0
------------- ----------- ---------- ----------
Income (Loss) before
Equity in Earnings
(Loss) of Affiliates
and Preferred Stock
Dividends........... 17,862 (2,628) 2,404 17,638
Equity in Earnings
(Loss) of Affiliates
and Preferred Stock
Dividends........... 0 2,101(m) 2,101
------------- ----------- ---------- ----------
Net Income............$ 17,862 $ (2,628) $ 4,505 $ 19,739
General Partner
Interest............ 8,534 (8,534)(n) 0
------------- ----------- ---------- ----------
Net Income Allocable
to Unitholders/
Stockholders........$ 9,328 $ (2,628) $ 13,039 $ 19,739
============= =========== ========== ==========
Net Income per Unit...$ 0.20
=============
Net Income per Common
Share - Basic and
Diluted............. $ 0.31
==========
Weighted average
number of Units
outstanding -
Basic and Diluted... 46,323,300
Weighted average
number of REIT
Shares outstanding -
Basic and Diluted... 63,456,575
See accompanying Notes to Unaudited Pro Forma Condensed Consolidated
Financial Statements
PLUM CREEK TIMBER COMPANY, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
For the Year Ended December 31, 1998
(dollars in thousands, except per unit/share data)
Pro Forma Adjustments
---------------------
Corporate
Partnership Subsidiaries Pro Forma
Historical (a) Formation (h) Other Corporation
------------- ------------ ----- -----------
Revenues..............$ 699,370 $ (466,545) $ $ 232,825
------------- ----------- ---------- ----------
Costs and Expenses:
Cost of Goods Sold.. 505,366 (431,462) 73,904
Selling, General
and Administrative 52,917 (33,641) 524(i) 19,800
------------- ----------- ---------- ----------
Total Costs and
Expenses........ 558,283 (465,103) 524 93,704
Operating Income...... 141,087 (1,442) (524) 139,121
Interest Expense...... (60,622) 18,913 (212)(j) (41,921)
Reorganization Costs.. (4,763) 4,763(k) 0
Other Expense - Net... 251 929 (98)(l) 1,082
------------- ----------- ----------- ---------
Income before Income
Taxes and Equity
in Earnings (Loss)
of Affiliates and
Preferred Stock
Dividends........... 75,953 18,400 3,929 98,282
Provision for Income
Taxes............... 517 (517) 0
------------- ----------- ----------- ---------
Income (Loss) before
Equity in Earnings
(Loss) of Affiliates
and Preferred Stock
Dividends........... 75,436 18,917 3,929 98,282
Equity in Earnings (Loss)
of Affiliates and
Preferred Stock
Dividends........... 0 (8,692)(m) (8,692)
------------- ----------- ----------- ---------
Net Income............$ 75,436 $ 18,917 $ (4,763) $ 89,590
General Partner
Interest............ 33,713 (33,713)(n) 0
------------- ----------- ----------- ---------
Net Income Allocable
to Unitholders/
Stockholders........$ 41,723 $ 18,917 $ 28,950 $ 89,590
============= =========== ========== ==========
Net Income per Unit...$ 0.90
=============
Net Income per Common
Share - Basic and
Diluted............. $ 1.41
==========
Weighted average number
of Units outstanding -
Basic and Diluted... 46,323,300
Weighted average number
of REIT Shares
outstanding - Basic
and Diluted......... 63,456,575
See accompanying Notes to Unaudited Pro Forma Condensed Consolidated
Financial Statements
PLUM CREEK TIMBER COMPANY, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
As of March 31, 1999
(dollars in thousands, except per unit/share data)
Pro Forma Adjustments
---------------------
Corporate
Partnership Subsidiaries Pro Forma
Historical (a) Formation (b) Other Corporation
------------- ------------ ----- -----------
ASSETS
Current Assets:
Cash and Cash
Equivalents.......$ 106,517 $ $ (1,905)(c) $ 104,612
Inventories......... 56,512 (56,512) 0
Other Current Assets 43,732 (42,087) 11,773 (d) 13,418
------------- ----------- ----------- ---------
206,761 (98,599) 9,868 118,030
Timber and Timberlands
- Net............... 1,021,251 (5,400) 1,015,851
Property, Plant and
Equipment - Net... 183,536 (182,812) 724
Investment in Equity
Affiliates and
Preferred Stock..... 0 71,266 4,304 (e) 86,708
9,233 (f)
1,905 (c)
Other Assets.......... 11,942 (4,683) 7,259
------------- ----------- ----------- ---------
Total Assets........$ 1,423,490 $ (220,228) $ 25,310 $1,228,572
============= =========== =========== =========
LIABILITIES
Current Liabilities...$ 82,211 $ (54,895) $ 11,773 (d) $ 39,089
Long-Term Debt........ 742,505 (156,000) 586,505
Lines of Credit....... 200,000 2,400 (g) 202,400
Other Liabilities..... 10,954 (9,333) (419)(e) 1,202
------------- ----------- ----------- ---------
Total Liabilities... 1,035,670 (220,228) 13,754 829,196
------------- ----------- ----------- ---------
Commitments and Contingencies
CAPITAL
PARTNERS' CAPITAL/
STOCKHOLDERS' EQUITY 387,820 4,723 (e) 399,376
9,233 (f)
(2,400)(g)
------------- ----------- ----------- ---------
Total Liabilities
and Partners'
Capital/Stockholders'
Equity..............$ 1,423,490 $ (220,228) $ 25,310 $1,228,572
============= =========== =========== =========
See accompanying Notes to Unaudited Pro Forma Condensed Consolidated
Financial Statements
PLUM CREEK TIMBER COMPANY, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(dollars in thousands, except per unit/share amounts)
Note 1. BASIS OF PRESENTATION
On June 8, 1998 the Partnership announced that the Board of Directors of
its general partner had authorized the Partnership to seek approval from its
unitholders to convert its structure from a publicly traded master limited
partnership into a publicly traded REIT. On April 19, 1999, the unitholders
approved the Conversion Transaction, and on July 1, 1999, the Conversion
Transaction was completed.
Prior to the Conversion Transaction the Partnership owned 98% of Plum
Creek Manufacturing, L.P. ("Manufacturing Partnership") and 96% of Plum Creek
Marketing, Inc. ("Marketing"). The general partner of the Partnership, Plum
Creek Management Company, L.P. ("PCMC"), managed the businesses of the
Partnership, Manufacturing Partnership and Marketing and owned the remaining
2% general partner interest in Manufacturing Partnership and 4% of Marketing.
In connection with the Conversion Transaction, the Partnership formed
Plum Creek Timber Company, Inc., the new publicly traded REIT or the
Corporation, Plum Creek Acquisition Partners, L.P. (the "Operating
Partnership") and several taxable corporations.
The Conversion Transaction was effected through the simultaneous merger
of the Partnership into the Operating Partnership (the "Partnership Merger")
and the merger of PCMC into the Corporation (the "PCMC Merger"). In the
Partnership Merger (which was conditioned upon the simultaneous consummation
of the PCMC Merger), the Partnership was merged into the Operating Partnership
(a wholly-owned subsidiary of the Corporation), and the general partner
interest in the Partnership was cancelled. In addition, the units of limited
partnership held by the unitholders were converted into 73% of the common
stock of the Corporation ("Common Stock.") In the PCMC Merger, PCMC was
merged into the Corporation and the outstanding equity interests of PCMC were
converted into 26% of the Common Stock and 634,566 shares of the Corporation's
stock that entitles the holder to certain special voting rights ("Special
Voting Stock.")
As a result of the Conversion Transaction, the Partnership's outstanding
units were converted on a one-for-one basis into 46,323,300 shares of Common
Stock. Additionally, the equity interests in PCMC were converted into
16,498,709 shares of Common Stock and 634,566 shares of Special Voting Stock.
The Special Voting Stock is convertible into Common Stock at the option of the
holder on a one-for-one basis and is entitled to receive the same dividends as
Common Stock. The Special Voting Stock is included in the denominator in
computing basic and diluted earnings per share.
Furthermore, in order to qualify as a REIT, certain of the Partnership's
assets and associated liabilities related to the manufacturing operations and
harvesting activities, along with certain timberlands, were transferred to one
of several newly formed corporations or Marketing (collectively referred to as
the "Corporate Subsidiaries"). Following the transfers, the Corporation is
entitled to approximately 99% of the economics of the Corporate Subsidiaries
through a combination of preferred stock and nonvoting common stock. The
remaining approximate 1% of the economics and 100% voting control of the
Corporate Subsidiaries are owned by four individuals who are also officers of
the Corporation.
The accompanying unaudited pro forma condensed consolidated financial
statements have been prepared based upon the Corporation consolidating with
the Operating Partnership and the Manufacturing Partnership. The basis for the
consolidation is that the Corporation, or a wholly-owned subsidiary thereof,
is the general partner of the Operating Partnership and the Manufacturing
Partnership and will have control over the Operating Partnership and the
Manufacturing Partnership. The Corporate Subsidiaries are not consolidated
with the Corporation because the Corporation neither directly nor indirectly
has any voting rights with respect to the Corporate Subsidiaries. The
Corporation's nonvoting common stock investment in the Corporate Subsidiaries
will be accounted for using the equity method of accounting in accordance with
Accounting Principles Bulletin ("APB") No. 18, "The Equity Method of
Accounting for Investments in Common Stock." The basis for using the equity
method is that the Corporation receives substantially all of the economic
benefit from the Corporate Subsidiaries. The Corporation's preferred stock
investment in the Corporate Subsidiaries will be accounted for using the cost
method of accounting. Additionally, the footnotes to the pro forma financial
statements include summarized financial information of the Corporate
Subsidiaries on a combined basis.
Conversion costs are estimated to be $9,800 of which $4,763 and $2,651
have been recorded by the Partnership for the year and three month periods
ended December 31, 1998 and March 31, 1999, respectively. The conversion costs
have been eliminated from the unaudited pro forma condensed consolidated
statements of income because they represent nonrecurring expenditures.
The conversion of units into Common Stock in connection with the
Partnership Merger is being accounted for as a reorganization with amounts
being recorded at historical cost. PCMC's sole activity was related to its
management and investment in the Partnership and its subsidiaries. As a
result, PCMC's assets were limited to, and comprised of, its investment in the
Partnership, Manufacturing Partnership, and Marketing, along with related cash
and certain long-term incentive award plan assets (which are held in a grantor
trust formed by PCMC). The conversion of PCMC's general partnership interest
in the Partnership for Common Stock and Special Voting Stock in connection
with the PCMC Merger is being accounted for as a reorganization with amounts
being recorded at historical cost. The conversion of PCMC's interest in the
Manufacturing Partnership and Marketing for Common Stock and Special Voting
Stock in connection with the PCMC Merger is being accounted for as a purchase
of a minority interest in accordance with APB No. 16. "Business Combinations"
with amounts being recorded at fair value. As a result of the combination of
reorganization accounting and purchase accounting for the minority interest,
along with other related adjustments, pro forma Stockholder's Equity as of
March 31, 1999 is computed as follows:
Limited Partners' Capital (historical at March 31, 1999)...........$389,781
General Partner's Capital (historical at March 31, 1999)........... (1,961)
-----
Partner's Capital (historical at March 31, 1999)...................$387,820
Purchase of minority interest
(2% interest in Manufacturing and 4% interest in Marketing)...... 4,723
Conversion costs incurred after March 31, 1999..................... (900)
Recording of deferred tax assets relating to a change in tax status 9,233
-----
Pro Forma Stockholders' Equity.....................................$400,876
=======
The accompanying unaudited pro forma condensed consolidated financial
statements and related notes have not been audited. In Management's opinion,
all adjustments considered necessary for the fair presentation of the results
of operations and financial position for the unaudited pro forma condensed
consolidated financial statements have been reflected. Results for the
periods for which unaudited pro forma condensed consolidated statements are
provided are not necessarily indicative of those to be expected in future
periods. All significant affiliated transactions have been eliminated.
Note 2. PRO FORMA ADJUSTMENTS
(a) See Notes to Plum Creek Timber Company, L.P. Combined Financial
Statements for the basis of presentation of the Company Historical Financial
Statements.
(b) Reflects the transfer of certain of the Partnership's assets and
related liabilities of the manufacturing operations, harvesting activities,
and certain timberlands, to the Corporate Subsidiaries. The net book value
associated with the transfer has been recorded under Investment in Equity
Affiliates and Preferred Stock.
As of the balance sheet date the Corporation has the following
outstanding debt obligations, which includes the current portion of $18,400:
Senior Notes due 2007....................$122,000
First Mortgage Notes due 2007............ 112,000
Senior Notes due 2009.................... 150,000
Senior Notes due 2011.................... 176,905
Senior Notes due 2016.................... 200,000
Line of Credit........................... 200,000
-------
$960,905
=======
In connection with the formation of the Corporate Subsidiaries, the
Corporate Subsidiaries will assume $170,000 in total of the above indebtedness
of the Corporation. The $170,000 indebtedness consists of the First Mortgage
Notes (which are collateralized by the manufacturing facilities), and $58,000
face value of the Senior Notes due 2007.
(c) Represents related party notes receivable issued to various
members of management as part of the conversion. The proceeds from the notes
were used by management to purchase their approximate 1% economic ownership
interest in the Corporate Subsidiaries. Management's purchase of their
ownership interest in the Corporate Subsidiaries will be accounted for as a
capital contribution on the books of the Corporate Subsidiaries. Accordingly,
the related party notes receivable have been reclassified to Investment in
Equity Affiliates and Preferred Stock. The notes are due in 10 years, payable
on demand, and bear a fixed market rate of interest, which is payable
annually. Management does not anticipate repayment in the near term.
(d) Reflects the recording of the assets and liabilities associated
with deferred compensation and long-term incentive compensation awards.
These assets (which are held in a grantor trust) and liabilities were assumed
as a result of the merger of PCMC into the Corporation. Also included in a
grantor trust are 358,767 shares of common stock of the Corporation related
to the funding of several unit award plans. The shares and a corresponding
amount of deferred compensation are recorded at cost in Stockholders' Equity
(e) The exchange of PCMC's 2% general partner interest in Manufacturing
Partnership and 4% interest in Marketing for shares of Common Stock is subject
to purchase accounting in accordance with APB No. 16, "Business Combinations."
The basis step-up associated with this purchase is computed based on the
difference between the book value and fair value of PCMC's minority interest
in Manufacturing Partnership and Marketing. As a result of these purchases,
the historical minority interest related to Manufacturing Partnership and
Marketing in the amount of $419 is eliminated.
The basis step-up of approximately $4,304 will be allocated to Property,
Plant and Equipment of the Corporate Subsidiaries, and as a result, has been
accordingly reflected in the Corporation's Investment in Equity Affiliates and
Preferred Stock. The basis step-up will be depreciated over approximately ten
years. Current period depreciation expense of $426 and $107 has been reflected
in computing the combined pro forma equity earnings reported by the
Corporation related to its investment in the Corporate Subsidiaries for the
year and three month periods ended December 31, 1998 and March 31, 1999,
respectively.
(f) Represents the recording of a deferred tax asset as a result of
transferring the manufacturing operations and the harvesting activities from a
nontaxable partnership to taxable corporations. The deferred tax asset of
$9,233 represents the tax effect of temporary differences (primarily self
insurance and employee benefit accruals) at the conversion date. In
accordance with Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes," a one-time adjustment is being recorded for the
net temporary differences as of the conversion date. This deferred tax
benefit has not been included in the pro forma statements of income due to its
nonrecurring nature, and as a result, has been credited directly to
stockholders' equity. No adjustment has been made for the Corporation's
temporary differences (including its share of the Operating Partnership's
differences) because, as a REIT, the Corporation anticipates that it will not
have to pay any significant corporate-level tax.
Current period income tax (benefit) expense of ($10,809) and $176 has
been reflected in computing the combined pro forma equity earnings reported by
the Corporation related to its investment in the Corporate Subsidiaries for
the year and three month periods ended December 31, 1998 and March 31, 1999,
respectively. The income tax provision was calculated using a combined
federal and state statutory tax rate of 40%.
(g) Reflects approximately $2.4 million of REIT conversion costs that
were neither paid nor accrued as of March 31, 1999. Total REIT conversion
costs are estimated to be approximately $9,800. Amounts of $4,763 and $2,651
have been recorded by the Partnership for the year and three month periods
ended December 31, 1998 and March 31, 1999, respectively. Conversion costs
include estimated allowances for legal, investment advisory, fairness opinion,
tax and financial advisory, solicitation, printing, consent fees
for lender waivers, and other related costs. Conversion costs are being
expensed in the Partnership's historical financial statements in the period
incurred.
(h) Reflects the reduction in revenues and expenses associated with
the manufacturing operations and costs of harvesting timber. Following the
Conversion Transaction, these activities will be conducted by the Corporate
Subsidiaries and will be reported by the Corporation as Equity in Earnings
(Loss) of Affiliates and Preferred Stock Dividends.
(i) Represents an expense of $864 and $405 for the year and three
months ended December 31, 1998 and March 31, 1999, respectively, related to
the Management Incentive Plan that was previously a cost incurred by PCMC. On
a pro forma basis, $524 and $242 of this expense for the year and three months
ended December 31, 1998 and March 31, 1999, respectively, has been allocated
to the Corporation and the remainder has been reflected in computing the
combined pro forma equity earnings reported by the Corporation related to its
investment in the Corporate Subsidiaries. The allocation was based on an
approximation of time anticipated to be devoted by management to the various
Corporate Subsidiaries.
(j) Reflects the increase in interest expense as a result of increased
borrowings under the Corporation's line of credit for conversion costs not
paid as of December 31, 1998 or March 31, 1999. The assumed incremental
interest rate under the Line of Credit is 6%.
(k) Reflects the elimination of REIT conversion costs that were expensed
in the Partnership's historical financial statements. These costs are not
reflected in the pro forma income statements because they represent
nonrecurring expenditures.
(l) To eliminate the minority interest associated with PCMC's ownership
interest in Manufacturing Partnership and Marketing.
(m) Represents the equity income (loss) and preferred stock dividends of
the Corporate Subsidiaries. As a result of the Conversion Transaction, the
assets and related liabilities of the manufacturing operations and harvesting
activities along with certain timberlands were transferred to the Corporate
Subsidiaries. On a combined basis the unaudited pro forma financial position
of the Corporate Subsidiaries as of March 31, 1999 is summarized as follows:
Current Assets....................$ 100,599
Noncurrent Assets................. 228,875
Current Liabilities............... 52,995
Noncurrent Liabilities............ 169,233
The current and noncurrent liabilities include $170,000 of indebtedness.
The $170,000 indebtedness consists of the First Mortgage Notes (which are
collateralized by the manufacturing facilities), and $58,000 face value of the
Senior Notes due 2007.
On a combined basis the unaudited pro forma results of operations of the
Corporate Subsidiaries as of periods indicated are summarized as follows:
Year ended Three months ended
December 31, 1998 March 31,1999
----------------- ------------------
Revenues...................... $669,754 $175,946
Gross Profit.................. 671 7,043
Interest Expense.............. 18,913 4,728
Income Tax Expense (Benefit).. (10,809) 176
Net Income (Loss)............. (8,780) 2,122
Gross profit includes depreciation and amortization expense of $25,410 and
$7,312 for the year and three month periods ended December 31, 1998 and March
31, 1999, respectively. The Income Tax Expense (Benefit) amount includes a tax
benefit of $2,973 and $743 for the year and three month periods ended December
31, 1998 and March 31, 1999, respectively, related to the transfer of certain
timberlands to the Corporate Subsidiaries in exchange for an installment note
receivable. The related interest expense of $7,433 and $1,858 for the year and
three month periods ended December 31, 1998 and March 31, 1999, respectively,
associated with the installment note has been eliminated.
In accordance with APB No. 18, "The Equity Method of Accounting for
Investments in Common Stock," the revenue of the REIT related to the sale of
timber to the Corporate Subsidiaries will be deferred until the logs or
finished goods are sold outside the group of Corporate Subsidiaries.
Therefore, all sales by the REIT to the Corporate Subsidiaries will also be
included in the revenue of the Corporate Subsidiaries in the period in which
the timber (in the form of either whole logs, lumber, plywood or other wood
products) is sold outside the Corporate Subsidiaries. Revenue related to
sales between the Corporate Subsidiaries is eliminated in preparing the
summarized combined financial information of the Corporate Subsidiaries.
Revenues reported by the REIT that were also included in the revenues of the
Corporate Subsidiaries amounted to $195,812 and $46,423 for the year and three
month periods ended December 31, 1998 and March 31, 1999, respectively.
(n) Reflects the elimination of PCMC's allocation as a result of
converting its general partner interest to a combination of Common Stock and
Special Voting Stock.
(o) Reflects the decrease in interest income as a result of decreased
cash in the amount of $864 for payment related to the Management Incentive
Plan for the year ended December 31, 1998. See note (i).
(c) Exhibits.
Each exhibit set forth below in the Index to Exhibits is filed as a part
of this report. All exhibits are incorporated herein by reference to a prior
filing as indicated.
INDEX TO EXHIBITS
Exhibit Nature of
Designation Exhibit
- ----------- -------
2.6 Amended and Restated Agreement and Plan of Conversion, dated
as of July 17, 1998, by and among Plum Creek Timber Company,
Inc., Plum Creek Timber Company, L.P. and Plum Creek
Management Company, L.P. (Form S-4, Regis. No. 333-71371,
filed January 28, 1999).
2.7 Agreement and Plan of Merger, dated as of July 17, 1998, by
and among Plum Creek Timber Company, L.P., Plum Creek
Acquisitions Partners, L.P. and Plum Creek Timber Company,
Inc. (Form S-4, Regis. No. 333-71371, filed January 28, 1999).
2.8 Agreement and Plan of Merger, dated as of July 17, 1998, by
and among Plum Creek Timber Company, Inc. and Plum Creek
Management Company, L.P. (Form S-4, Regis. No. 333-71371,
filed January 28, 1999).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
PLUM CREEK TIMBER COMPANY, INC.
-------------------------------
(Registrant)
By: /s/ William R. Brown
-----------------------
William R. Brown
Executive Vice President and
Chief Financial Officer
Date: July 14, 1999
Exhibit Index
-------------
Exhibit Nature of
Designation Exhibit
- ----------- -------
2.6 Amended and Restated Agreement and Plan of Conversion, dated
as of July 17, 1998, by and among Plum Creek Timber Company,
Inc., Plum Creek Timber Company, L.P. and Plum Creek
Management Company, L.P. (Form S-4, Regis. No. 333-71371,
filed January 28, 1999).
2.7 Agreement and Plan of Merger, dated as of July 17, 1998, by
and among Plum Creek Timber Company, L.P., Plum Creek
Acquisitions Partners, L.P. and Plum Creek Timber Company,
Inc. (Form S-4, Regis. No. 333-71371, filed January 28, 1999).
2.8 Agreement and Plan of Merger, dated as of July 17, 1998, by
and among Plum Creek Timber Company, Inc. and Plum Creek
Management Company, L.P. (Form S-4, Regis. No. 333-71371,
filed January 28, 1999).
