Managing Timberlands Owned by a REIT

2 Key Components of a REIT  REIT Background: Form of C-corporation Created in 1960 Vehicle for the multitudes Pass-through tax structure  REIT Qualification: Entity that is taxable as a corporation Managed by a Board of Directors 75% of total assets in Real Estate 75% of its gross income from rents from real estate or interest on real estate pay out annually at least 90% of its taxable ordinary income  Benefits of the REIT Structure Single layer of Taxation Attractive, tax efficient dividend oMore cash available for distribution oLong-term capital gains treatment of of dividends

3 An Industry in Transition FROM COMMERCIAL FORESTRY Vertical integration strategy Timber volume focus Physical asset management TO TIMBERLAND MANGEMENT Portfolio management strategy Timberland value focus Tangible and intangible asset management

4 “Commercial Forestry” Business Model is Volume Focused Assumes volume = value Static timberland ownership is tied to converting operations Intensive management improves growth and yield Non-timber values receive minimal attention

5 “Timberland Management” Business Model, Focused on Value, is Now Emerging Manage Property for Multiple Values Real Estate Values Intangible Values Timber Values Extractive Resource Values

6 Plum Creek “Growing Value From Exceptional Resources” Mission Statement Plum Creek is committed to being the premier land and timber company by demonstrating leadership and innovation in: 1.Optimizing opportunities for value growth from our assets. 2.Practicing environmentally responsible resource management. 3.Providing consistently high quality products and services to our customers and business partners. 4.Fostering an ethical business culture that encourages individual ideas and initiative and rewards accomplishments. 5.Achieving superior returns for our owners.

7 Timber Land Natural Resources Manufacturing Focus on realizing maximum value from every acre of our exceptional asset base – 8.2 million acres Realizing Maximum Value As of 12/31/2005

8 Plum Creek Has a History of Growth 1989 Spun off from Burlington Resources to become a Master Limited Partnership with 1.4 million acres 1993 Acquired 865,000 acres in Montana 1996 Purchased 538,000 acres in Louisiana and Arkansas 1998 Acquired 905,000 acres in Maine 1999 Converted to a Real Estate Investment Trust (REIT) 2001 Merged with The Timber Company resulting in an ownership of 7.8 million acres in 19 states 2002 Added to S&P 500 and purchased 309,000 acres in Wisconsin and Michigan 2003 Acquired 139,000 acres in Arkansas, New Hampshire and South Carolina 2004 Purchased 29,000 acres in Arkansas & 48,000 acres in Maine 2005 Acquires 56,000 acres in Florida and 650,000 acres in OP of Michigan

9 Acquisition History

10 We have two large appreciating assets... Timber and Land Assets

11 Focus on Capturing Land Use Potential

12 Asset Analysis  Conducted detailed analysis of timberland holdings to determine best use and highest value  Segmented land into: Core timberlands Non-strategic timberlands Lands with values in excess of timberland

13 Detailed Asset Analysis  Core timberlands (Action: Hold) Attractive long-term markets Highly productive land Good mix: species, age class  Non-strategic timberlands (Action: Sell, over time) Minimal market presence Less attractive mix profile  Timberlands with higher value (Action: Sell, over time)

14 Optimize Value of Extensive Land Holdings

15 Core Timberlands Produce Over 85% of Timber Cash Flow Ability to match harvest to market conditions Access to more markets Located in attractive markets Highly productive and well stocked Mix of hardwoods, softwoods, sawlogs & pulpwood Most Diversified Timberland Owner in the U.S.

16 Plum Creek has Improved Long-term Growth in Timber Inventory and Harvest Acquisition of well stocked, productive timberlands results in increased standing timber inventory and future harvests Harvest levels increase over time as the inventory grows and matures A more productive asset base Projected merchantable timber inventory has increased despite a reduction in total acreage Projected Harvest 2004 Projected Harvest 2003

17 Selling non-strategic Timberlands to Invest in More, Productive Lands Considerable Progress on Sale of Non-strategic Lands 255,000 acres of large, non- strategic timberlands sold in ,000 acres of small tracts sold in ,000 acres on market via local broker network Highly Productive Lands Purchased 525,000 acres in attractive, long- term markets in past 3 years Cash accretive acquisitions

18 Achieving Excellent Premiums for Timberland with Higher Values Conservation Captured $75 million above and beyond timberland value in Evaluation of properties and potential joint venture partners proceeding 79% premium to appraised timberland value – above projections 200,000 acres 450,000 acres 700,000 acres

19 Significant Opportunities to Realize Value from Non-timber Resources Growing recurring cash flow Opportunistic asset sales capture significant value $27 million CBM operating interest $45 million coal assets* Opportunities Construction materials Minerals Wind & water Maximizing the Value Above and Below the Ground * Includes pending Q coal sale for $22 million

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