Plum Creek:Forest Products Recovery Underway

Arkansas Forestry Association Annual Meeting

Rick HolleyChief Executive OfficerOctober 2, 2013

2

Safe Harbor

THIS PRESENTATION CONTAINS FORWARD-LOOKING STATEMENTS. Some of the forward-looking statements can be identified by the use of forward-looking words such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “approximately,” “intends,” “plans,” “estimates,” “projects,” “strategy” or “anticipates” or the negative of those words or other comparable terminology. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those described in the forward-looking statements. Some of these factors include, but are not limited to: changes in governmental, legislative and environmental restrictions; catastrophic losses from fires, floods, conditions and competition in our domestic and export markets; our failure to qualify as a REIT or a reduction in the demand for timber products and/or an unanticipated increase in the supply of timber products; our failure to make strategic acquisitions or to integrate any such acquisitions effectively; the market for and our ability to sell or exchange non-strategic timberlands and timberland properties that have higher and better uses; and other factors described from time to time in our filings with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, and the Securities Act of 1933, as amended. Forward-looking statements are not guarantees of performance, and speak only as of the date made, and neither Plum Creek nor its management undertakes any obligation to update or revise any forward looking statements.

3

Plum Creek

U.S. Holdings: 6.3 million acres

• Timber• Land• Subsurface

assets

4

About Plum Creek

• Largest independent seller of wood fiber in the United States

• Operate in every major wood producing region

• More than 2,200 truckloads of logs on the road each day

• Established customer relationships with more than 700 customer facilities in 19 states

5

Nearly 25 Years of Innovative Timberland Management

1989

• First pure play timber investment available

1999

• Pioneered the timber-REIT• First to certify all timberland as sustainably managed

2002

• Leader in portfolio management, optimizing HBU identification and dispositions

2012

• Serving the emerging bioenergy customer base

6

Sustainable Forestry is at the Heart of our Land Management

• Balances timber growth and harvest while protecting wildlife, plants, soil and water quality

All timberlands SFI® certified since 1999

Conservation outcome on 1.4 million acres since 1989

Habitat Conservation Plans protect endangered species on over 1.1 million acres

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Value in Every Acre in our Portfolio

Timber• Growing harvest, sustainably managed• Unmatched diversity, unique market insight

Land• Capture premium recreation and conservation values• Create value through entitlement of select lands

Non-Timber Resources• Valuable subsurface and surface resources • Ongoing royalty streams

8

Broad Timberland Portfolio Creates Advantages

Superior Risk Management• Diversify local market and end-market risk• Mitigate physical risk of catastrophic loss

Unique Market Insight• National perspective on timber and timberland markets• Sharing of market information and best practices to improve

market intelligence and performance

Greater Operational Flexibility• Ability to shift activity to most attractive geographies• Ability to modify harvest mix to serve most attractive end-use

markets

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Plum Creek in Arkansas

Acreage• Plum Creek 720,000• Forest Industry 5,454,000• Total Timberlands 18,830,000

Statistics • Employees 46• Contractors Employed

43• Customers/Mills

43

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Media Headlines

• Housing Starts Up in August

• U.S. Economy Grows Faster than Expected

• Building Permits Up in Country

• Beetle Whittles Down Timber Supply

• Beetle Infestation Drives Up Lumber Prices

• Northwest Wood Products Feed Hungry Asian Market

• Georgia Pacific Investing $400 Million in Plants

• New Klausner Sawmill to be Built in Florida

• Plum Creek to Reopen Evergreen Sawmill as Lumber Prices Double

• Lumber Sector Enters ‘Super Cycle’ as U.S. Housing Recovery Gains Steam

• Lumber Prices Could Rise 25% in 2013

Arkansas:• Northwest Arkansas Construction Stays

Hot

• Cash Investors Helping to Drive Northwest Arkansas Housing Market

• Building Worth $1.1 Million Set in City: Includes Church, Residences, Other Projects

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Average Annual U.S. Housing Starts

U.S. Housing Starts on the Rise

1985 1987 1989 1991 1994 1996 1998 2000 2003 2005 2007 2010 2012 2014 2016 -

500

1,000

1,500

2,000

2,500

Mill

ion

units

per

yea

r

Source: US Census, Harvard Joint Center for Housing

Long-term demographic demand projected to drive to 1.5 million + annual housing starts

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North American Lumber Production

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

0

10

20

30

40

50

60

70

80

Billi

ons

of B

oard

Fee

t

Source: RISI

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Shrinking Canadian Supply

Source: Natural Resources, Canada; BC Ministry of Forests: 2012 Summary of Forest Health Conditions in British Columbia

• B.C. has produced 25% of North America’s lumber· More than half of pine trees in B.C. are dead

due to infestation from the Mountain Pine Beetle

· 60+ years before B.C. forests will fully recover

· Harvests and production will likely decline by 20%

• Eastern Canada also expected to lower harvest levels by 20% to achieve sustainable rotations

• Canada has supplied up to 35% of the lumber used in the United States - this market share will likely shrink below 25%

Extent of Mountain Pine Beetle Infestation: 2011

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Offshore Lumber Exports have Doubled, Growing by 3 Bbf

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120

1

2

3

4

5

6

7North American Lumber Exports

Rest of World China

Source: RISI, B.C. Ministry of Forests, Mines and Land, Random Lengths

Bill

ion

boar

d fe

et 3 Bbf

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Normalized North American Demand is Estimated to be about 67 Bbf of Lumber, up 23% from 2012

64 Bbf 3 Bbf 67

Bbf

1.5 millionstarts

NormalizedDemand

New ChineseDemand

16Source: Wood Markets Benchmarking Reports, Plum Creek estimates

U.S. Producers are Well-positioned on the Cost CurveUS

$/m

bf n

et –

Lum

ber B

asis

20040

50

100

150

200

250

300

350

$215$244

$284 $286

20120

50

100

150

200

250

300

350

$236 $246$270

$315Sawmilling Costs: Average Mill

Brit

ish

Col

umbi

a

Brit

ish

Col

umbi

a

US

Wes

t

US

Sout

h

US

Sout

h

US

Wes

t

East

ern

Can

ada

East

ern

Can

ada

Strong Canadian Dollar also a factor

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For Supply to Meet Demand, the U.S. South will Need to Produce Lumber at Levels Beyond its Prior Peak

1998-2002

Peak2005

Trough2009

Recent2012 Future

% Change from 2012

U.S. Starts 1.63 2.07 0.55 0.78 1.50

Lumber Supply (Billion Board Feet)Canada 30 34 19 23 24U.S. West 17 19 10 13 17U.S. South 17 19 12 14 21 +50%Rest of U.S. 2 2 1 2 2Offshore Imports 2 3 1 1 3

TOTAL SUPPLY* 67 78 43 53 67

* Totals do not add due to roundingSource: US Census Bureau, RISI, Random Lengths, Plum Creek estimates

67 Bbf

Southern Production and Price

Source: Timber Mart-South (TMS), WOOD MARKETS 18

19931994

19951996

19971998

19992000

20002001

20022003

20042005

20062007

20082009

20102011

20122013

20142015

20162017

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

22.0

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

Annual Southern Lumber Production TMS SYP Sawlog Prices

Billi

on B

oard

Fee

t Lum

ber

Saw

log

Pric

e pe

r Ton

/Stu

mpa

ge

1997 – 2007 Average - $38.00/Ton

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$80 million investment to buy existing mills

Capital Flowing into U.S. South is a Leading Indicator for Increased Sawlog Demand in the Region

$400 million mill capacity expansion

$150 million mill capacity expansion

$240 million investment to build two new mills

$80+ million investment to buy existing mills

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European Energy Policy is Driving Demand Growth for Wood Pellets

European Union’s renewable energy targets by 2020• 20% reduction in greenhouse gases• 20% increase in renewable energy• 20% increase in energy efficiency

Wood replacing coal for power generation• Supported by policy; wood is carbon neutral

UK is an early adopter; carbon tax and incentives in place• Committed to “decarbonizing” the power sector• Carbon tax of £11/ton of coal expected increasing to £40/ ton of coal

by 2015Source: Hawkins Wright

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$200 million investment for two new mills

$300 million investment in new Louisiana mill$190 million repurpose of chip mill in Texas

$200 million investment for two new mills

$200 million investment for two new mills

Wood Pellet Mills are Breaking Ground in the U.S. South

•Well over $1 billion of capital investment announced

$325 million investment for three new mills

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Southern Softwood Pulpwood is Low Cost on a Global Basis

U.S. Nort

hwes

t

U.S. Sou

thBraz

ilSpa

inChile

NW Russia NZ

W. Can

ada

Austra

liaJa

pan

Sweden

German

y

France

Finland

E. Can

ada

Norway

020406080

100120140160180200

$74 $75$84 $86 $86 $90 $98 $99 $104

$134$148$150

$161$163$163$177

Deliv

ered

Pric

e US

$/O

dmt

Source: Wood Resources International, Q1 2013 Odmt: oven dried metric ton

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Announced Mills are Locating In Multiple Plum Creek Timber Basins Across the South

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Industry Challenges

Contractor Capacity

• Contractor workforce declined approximately 25% since 2005• Demand for contractors increasing as recovery progresses

• Contractor shortage an issue - expect trend to continue• Higher production rates • Decreased interest in logging – few new entrants• Barriers to entry - capital, labor

• Plum Creek• Provides core contractors with base load volumes to support their

business • Gives pass-through fuel adjustments • Supports organizations like AFA that promote logging

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Clean Water Act (Forest Roads)

• Three year legal battle over Point/Nonpoint Designation for Forest Roads has not resolved the issue

• U.S. Supreme Court decision supportive, but…• Legislation is the best way to get a permanent solution

• Bipartisan support• Farm Bill possible vehicle

• AFA has been an active advocate for this issue

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Clean Air Act (Tailoring Rule)

• Three years ago EPA declared CO2 a pollutant• EPA proposed treating biomass emissions the same as

fossil fuels • Congressional pressure has been effective with

Administration and EPA• AFA has joined NAFO, AF&PA and others in support

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Summary

• Increased demand and reduced supply are driving a rebound in the U.S. timber and wood products industry

• Renewable energy is providing new demand for biomass and pulpwood

• Key trends are translating into major opportunities for Southern forest products communities

• Challenges remaining – must work together to address