162812610
7274009668
125000000
0
125000000
4568000000
87000000
0
0.01
300600000
162800000
2000000
-30000000
0
31000000
2230000000
34000000
554000000
347000000
26000000
9000000
19000000
15000000
6000000
27000000
53000000
3000000
203000000
3026000000
4568000000
244000000
110000000
1703000000
206000000
15000000
41000000
16000000
90000000
26000000
0
0.01
75000000
0
0
160000000
783000000
200000000
1542000000
19000000
24800000
860000000
3565000000
0
4569000000
87000000
0
0
31000000
34000000
554000000
347000000
26000000
9000000
19000000
15000000
6000000
20000000
53000000
3000000
203000000
2237000000
237000000
110000000
1703000000
206000000
15000000
41000000
16000000
91000000
27000000
0
2332000000
160000000
19000000
3565000000
26000000
790000000
1542000000
4569000000
240000000
240000000
4780000000
137000000
0
0.01
300600000
166000000
2000000
-31000000
4000000
35000000
2225000000
22000000
699000000
369000000
17000000
11000000
0
28000000
23000000
30000000
74000000
4000000
199000000
3208000000
4780000000
307000000
158000000
1793000000
231000000
11000000
42000000
21000000
90000000
25000000
48000000
0.01
75000000
0
0
177000000
783000000
149000000
1572000000
18000000
21500000
773000000
3638000000
4781000000
137000000
0
4000000
35000000
22000000
699000000
369000000
17000000
11000000
0
28000000
23000000
23000000
74000000
4000000
199000000
2419000000
300000000
158000000
1793000000
231000000
11000000
42000000
21000000
91000000
26000000
48000000
2362000000
177000000
18000000
3638000000
25000000
790000000
1572000000
4781000000
0.18
0.18
0.42
286000000
319000000
0
-8000000
34000000
34000000
57000000
31000000
57000000
1000000
6000000
376000000
33000000
171600000
171100000
23000000
0
192000000
121000000
137000000
20000000
128000000
0
286000000
319000000
0
-8000000
34000000
57000000
31000000
57000000
1000000
6000000
376000000
33000000
23000000
0
192000000
121000000
137000000
20000000
128000000
31000000
0
0.19
0.19
0.42
196000000
219000000
14000000
-3000000
38000000
23000000
78000000
32000000
53000000
1000000
5000000
272000000
23000000
162900000
162800000
29000000
0
123000000
66000000
98000000
33000000
64000000
15000000
196000000
219000000
14000000
-3000000
23000000
78000000
32000000
53000000
1000000
5000000
272000000
23000000
44000000
0
123000000
66000000
98000000
33000000
64000000
47000000
-15000000
-115000000
0.40
0.40
0.84
553000000
616000000
-8000000
0
0
10000000
0
-13000000
18000000
0
61000000
70000000
70000000
109000000
-179000000
-30000000
94000000
69000000
126000000
0
1000000
11000000
51000000
144000000
29000000
-1000000
250000000
755000000
1000000
47000000
942000000
739000000
63000000
171800000
171400000
56000000
3000000
76000000
1000000
22000000
-5000000
17000000
393000000
226000000
276000000
36000000
240000000
0
-115000000
553000000
616000000
-8000000
0
0
10000000
0
-13000000
18000000
0
61000000
70000000
109000000
-179000000
-30000000
94000000
69000000
126000000
0
1000000
11000000
29000000
-1000000
250000000
755000000
47000000
942000000
739000000
63000000
56000000
3000000
76000000
1000000
22000000
-5000000
17000000
393000000
226000000
276000000
36000000
240000000
69000000
194000000
0
0
10-Q
false
N.A.
2009-06-30
PLUM CREEK TIMBER CO INC
0000849213
PCL
--12-31
Yes
No
Yes
Large Accelerated Filer
-22000000
<div>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b>Note 10. Fair Value
Measurements</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b><i>Assets and Liabilities Measured at
Fair Value on a Recurring Basis.</i></b> The company’s fair
value measurements of its financial instruments, measured on a
recurring basis, are categorized as Level 1 measurements under the
SFAS 157 hierarchy. 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):</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
 </p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="72%"></td>
<td valign="bottom" width="12%"></td>
<td></td>
<td></td>
<td valign="bottom" width="12%"></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>Balance at</b></font><br />
<font face="Times New Roman" size=
"1"><b>June 30, 2009</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="2"><font face=
"Times New Roman" size=
"1"><b>Fair Value Measurements<br />
at Reporting Date Using<br />
Quoted Prices in Active<br />
Markets of Identical Assets<br />
(Level 1 Measurements)</b></font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Cash Equivalents <b><font face=
"Times New Roman" size="1"><sup style=
"VERTICAL-ALIGN: baseline; BOTTOM: 0.8ex; POSITION: relative">(A)</sup></font></b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">342</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">342</font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Available-for-Sale Securities
<b><font face="Times New Roman" size="1"><sup style=
"VERTICAL-ALIGN: baseline; BOTTOM: 0.8ex; POSITION: relative">(B)</sup></font></b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">21</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">21</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Trading Securities <b><font face=
"Times New Roman" size="1"><sup style=
"VERTICAL-ALIGN: baseline; BOTTOM: 0.8ex; POSITION: relative">(B)</sup></font></b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">5</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">5</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Total</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">368</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">368</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font></p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="70%"></td>
<td valign="bottom" width="13%"></td>
<td></td>
<td></td>
<td valign="bottom" width="13%"></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>Balance at</b></font><br />
<font face="Times New Roman" size=
"1"><b>December 31, 2008</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="2"><font face=
"Times New Roman" size=
"1"><b>Fair Value Measurements<br />
at Reporting Date Using<br />
Quoted Prices in Active<br />
Markets of Identical Assets<br />
(Level 1 Measurements)</b></font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Cash Equivalents <b><font face=
"Times New Roman" size="1"><sup style=
"VERTICAL-ALIGN: baseline; BOTTOM: 0.8ex; POSITION: relative">(A)</sup></font></b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">346</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">346</font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Available-for-Sale Securities
<b><font face="Times New Roman" size="1"><sup style=
"VERTICAL-ALIGN: baseline; BOTTOM: 0.8ex; POSITION: relative">(B)</sup></font></b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">20</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">20</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Trading Securities <b><font face=
"Times New Roman" size="1"><sup style=
"VERTICAL-ALIGN: baseline; BOTTOM: 0.8ex; POSITION: relative">(B)</sup></font></b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">5</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">5</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Total</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">371</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">371</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="4%"><font face=
"Times New Roman" size="2"><b>(A)</b></font></td>
<td valign="top" align="left"><font face="Times New Roman" size=
"2">Consists of several money market funds and is included in the
$347 million and $369 million of Cash and Cash Equivalents in the
Consolidated Balance Sheets at June 30, 2009 and
December 31, 2008, respectively.</font></td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="4%"><font face=
"Times New Roman" size="2"><b>(B)</b></font></td>
<td valign="top" align="left"><font face="Times New Roman" size=
"2">Consists of several mutual funds which are invested in domestic
(U.S.) and international equity and debt securities and is included
in Investment in Grantor Trusts in the Consolidated Balance Sheets
at June 30, 2009 and December 31, 2008.</font></td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b><i>Available-for-Sale
Securities.</i></b> 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 funds and debt and equity mutual
funds and plans to use these investments to fund its non-qualified
pension obligations. The fair value of these investments was $21
million and $20 million at June 30, 2009 and December 31,
2008, respectively. Unrealized holding gains and losses are
included as a component of accumulated other comprehensive income,
unless an other than temporary impairment has occurred, which is
then charged to expense. Unrealized holding gains were $1 million
at June 30, 2009 and unrealized holding losses were less than
$1 million at December 31, 2008. The company records changes
in unrealized holding gains and losses in Other Comprehensive
Income. The change in unrealized holding gains and losses was
approximately $1 million for the six months ended June 30,
2009. Realized gains were less than $1 million for the six months
ended June 30, 2009.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b><i>Trading Securities.</i></b>
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 funds and debt and equity mutual funds. The
company plans to use these investments to fund deferred
compensation obligations. The fair value of these investments was
$5 million at both June 30, 2009 and December 31, 2008.
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. Unrealized losses were $1 million at June 30, 2009 and
were $2 million at December 31, 2008. The change in unrealized
losses was approximately $1 million (unrealized gains) for the six
months ended June 30, 2009. Realized losses were $1 million
for the six months ended June 30, 2009. Deferred compensation
obligations are included in Other Liabilities and were $5 million
at both June 30, 2009 and December 31, 2008.</font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b><i>Other Instruments.</i></b> The
carrying amount of notes receivable approximates fair value due to
the short-term maturities of these instruments. The estimated fair
value of the company’s debt was approximately $2.68 billion
and $2.69 billion at June 30, 2009 and December 31, 2008,
respectively, and the carrying amount was $2.80 billion and $2.97
billion at June 30, 2009 and December 31, 2008,
respectively. The fair value of the company’s publicly-traded
debt (i.e., Senior Notes due 2015) is estimated using market
quotes. The fair value of the company’s other Senior Notes is
estimated using the same rates adjusted for the different
maturities. The fair value of the company’s Note Payable to
Timberland Venture is estimated using the same rates as the
publicly-traded debt adjusted by an estimated risk premium for
holding company debt and the different maturity. The fair value of
our Term Credit Agreements was determined by adjusting the spread
over LIBOR to a current market spread for comparable
debt.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b><i>Assets and Liabilities Measured at
Fair Value on a Nonrecurring Basis.</i></b> The company’s
fair value measurements of its assets and liabilities, measured on
a nonrecurring basis, are categorized as Level 3 measurements under
the SFAS 157 hierarchy. A Level 3 valuation is based on
unobservable inputs that are supported by little or no market
activity and that are significant to the fair value of the assets
or liabilities. Summarized below are the Level 3 assets and
liabilities reported in the company’s financial statements at
fair value, measured on a nonrecurring basis, during the six-month
period ended June 30 (in millions):</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
 </p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="58%"></td>
<td valign="bottom" width="12%"></td>
<td></td>
<td></td>
<td valign="bottom" width="12%"></td>
<td></td>
<td></td>
<td valign="bottom" width="12%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>Six Months Ended<br />
June 30, 2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>Fair Value Measurements<br />
Using Significant<br />
Unobservable Inputs (Level 3<br />
Measurements)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>Net Gain (Loss)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top" nowrap="nowrap">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Certain Long-Lived Lumber Assets Held
and Used</font> <font face="Times New Roman" size="1"><sup style=
"VERTICAL-ALIGN: baseline; BOTTOM: 0.8ex; POSITION: relative"><b>(A)</b></sup></font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">(10</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">) </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Timberlands Held for
Sale</font><font face="Times New Roman" size="1"><sup style=
"VERTICAL-ALIGN: baseline; BOTTOM: 0.8ex; POSITION: relative"> <b>(B)</b></sup></font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">25</font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">25</font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">(1</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">) </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Liabilities for Road
Maintenance</font><font face="Times New Roman" size="1"><sup style=
"VERTICAL-ALIGN: baseline; BOTTOM: 0.8ex; POSITION: relative"> <b>(C)</b></sup></font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">7</font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">7</font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Total</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">(11</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="4%"><font face=
"Times New Roman" size="2"><b>(A)</b></font></td>
<td valign="top" align="left"><font face="Times New Roman" size=
"2">During the first quarter of 2009, in accordance with Statement
of Financial Accounting Standards No. 144 (“SFAS
No. 144”), <i>Accounting for the Impairment or Disposal
of Long-Lived Assets</i>, certain lumber assets with a carrying
value of $10 million were written down to their fair value of $0,
resulting in an impairment charge of $10 million, which was
included in earnings for the six month period ended June 30,
2009. The fair value was determined using a discounted cash flow
model based on estimated future lumber prices, log costs and
operating expenses using internal projections.</font></td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="4%"><font face=
"Times New Roman" size="2"><b>(B)</b></font></td>
<td valign="top" align="left"><font face="Times New Roman" size=
"2">During the first quarter of 2009, in accordance with SFAS
No. 144, timberlands held for sale with a carrying amount of
$26 million were written down to their fair value (net of estimated
selling costs) of $25 million, resulting in a loss of $1 million,
which was included in earnings for the six month period ended
June 30, 2009. The fair value was determined based on an
external appraisal which was derived from a combination of
comparable sales and discounted future cash flows. The discounted
future cash flows were based on estimated future timber prices and
related operating expenses using internal and external
projections.</font></td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="4%"><font face=
"Times New Roman" size="2"><b>(C)</b></font></td>
<td valign="top" align="left"><font face="Times New Roman" size=
"2">The company has agreements with the federal government under
which it is obligated to pay maintenance or replacement costs for
certain roads. The company also has obligations under state law to
maintain or upgrade certain roads. At March 31, 2009, the
company concluded that most of these liabilities could be
reasonably estimated. As a result, in accordance with Statement of
Financial Accounting Standards No. 143, <i>Accounting for
Asset Retirement Obligations</i>, the company recorded road
maintenance liabilities and related timberland assets with an
estimated fair value of $7 million. The fair value was determined
using a cost approach based on internal projections.</font></td>
</tr>
</tbody>
</table>
</div>
1.15
1.15
<div>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b>Note 12. Commitments and
Contingencies</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b><i>Contingencies.</i></b> The company
is subject to regulations regarding forest and harvest practices
and is, from time to time, involved in various legal proceedings,
including environmental and regulatory matters, incidental to its
business. Reserves have been established for any probable
losses.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b><i>Environmental
Contingencies.</i></b> In connection with the October 6, 2001
merger with The Timber Company, Plum Creek agreed to indemnify
Georgia-Pacific for substantially all of the liabilities attributed
to The Timber Company. During 2003, Georgia-Pacific provided Plum
Creek with information about the existence of mine tailings and
acidic surface water on approximately 90 acres in Hot Spring
County, Arkansas, on former Georgia-Pacific properties. Barite
mining and related activities were conducted on the site between
1939 and 1981 in part by lessees of an entity that was acquired by
Georgia-Pacific. A remediation plan has not yet been approved. The
company believes that it has strong defenses in the matter.
Furthermore, to the extent Plum Creek is required to indemnify
Georgia-Pacific for its share of the remediation costs, Plum Creek
may be able to recover all or a portion of its cost from
Georgia-Pacific’s insurance policy, or indemnity obligations
of the</font> <font face="Times New Roman" size="2">various lessees
that conducted mining operations on the property, or both. The
company believes it will be successful in defending the claim. If
the company is not successful in defending this claim, we believe
that any loss would not be material to our financial position or
results of operations.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b><i>Unrecorded Contingencies.</i></b>
Management currently believes that resolving other pending legal
proceedings against the company, individually or in aggregate, will
not have a material adverse impact on our financial position or
results of operations. However, these matters are subject to
inherent uncertainties and management’s view on these matters
may change in the future. Were an unfavorable final outcome in one
or multiple legal proceedings to occur, there exists the
possibility of a material adverse impact on our financial position
and the results of operations for the period in which any
unfavorable outcome becomes reasonably estimable.</font></p>
</div>
0.84
<div>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b>Note 8. Borrowings</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">Debt consisted of the following (in
millions):</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
 </p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="78%"></td>
<td valign="bottom" width="7%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="7%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>June 30, 2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1">December 31, 2008</font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="4" height="8"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2"><b>Variable Rate Debt</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Term Credit Agreement <b><font face=
"Times New Roman" size="1"><sup style=
"VERTICAL-ALIGN: baseline; BOTTOM: 0.8ex; POSITION: relative">(A)</sup></font></b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>350</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">350</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Term Credit Agreement <b><font face=
"Times New Roman" size="1"><sup style=
"VERTICAL-ALIGN: baseline; BOTTOM: 0.8ex; POSITION: relative">(B)</sup></font></b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>250</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">250</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Revolving Line of Credit <b><font face=
"Times New Roman" size="1"><sup style=
"VERTICAL-ALIGN: baseline; BOTTOM: 0.8ex; POSITION: relative">(C)</sup></font></b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>206</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">231</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="4" height="8"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2"><b>Fixed Rate Debt</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Senior Notes</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>1,213</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">1,351</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Note Payable to Timberland
Venture</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>783</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">783</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 5em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Total Debt</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>2,802</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">2,965</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="4" height="8"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Less: Current Portion</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>(110</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">(158</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Long-Term Portion</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>2,692</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">2,807</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="4%"><font face=
"Times New Roman" size="2"><b>(A)</b></font></td>
<td valign="top" align="left"><font face="Times New Roman" size=
"2">As of June 30, 2009, the interest rate on the $350 million
term credit agreement was 0.76%.</font></td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="4%"><font face=
"Times New Roman" size="2"><b>(B)</b></font></td>
<td valign="top" align="left"><font face="Times New Roman" size=
"2">As of June 30, 2009, the interest rate on the $250 million
term credit agreement was 1.31%.</font></td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="4%"><font face=
"Times New Roman" size="2"><b>(C)</b></font></td>
<td valign="top" align="left"><font face="Times New Roman" size=
"2">As of June 30, 2009, the weighted-average interest rate
for the borrowings on the line of credit was 0.72%. As of
June 30, 2009, we had $206 million of borrowings and
$14 million of standby letters of credit outstanding; $530
million remained available for borrowing under our $750 million
line of credit. As of July 1, 2009, all of the borrowings
outstanding under our line of credit were repaid.</font></td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">During March 2009, the company paid
approximately $4 million to retire $5 million of principal for
Senior Notes due in 2015. As a result, the company recognized a
gain of $1 million which was net of associated unamortized discount
and debt issuance costs. The $1 million gain is classified as Gain
on Extinguishment of Debt in the Consolidated Statements of Income
for the six-months ended June 30, 2009.</font></p>
</div>
475000000
530000000
-21000000
25000000
1000000
10000000
29000000
<div>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"></p>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b>Note 7. Income Taxes</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">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.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">As a consequence of the October 6,
2001 merger with The Timber Company, which involved merging a
taxable entity into a nontaxable entity, Plum Creek will generally
be subject to corporate-level tax (built-in gains tax) if the
company makes a taxable disposition of certain property acquired in
the merger within the ten-year period following the merger date.
The built-in gains tax applies to gains from such asset sales to
the extent that the fair value of the property exceeds its tax
basis at the merger date. Built-in gains tax is generally not
payable on dispositions of property to the extent the proceeds from
such dispositions are reinvested in qualifying like-kind
replacement property. The built-in gains tax does not apply to
income generated from the harvesting and sale of timber.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">In connection with the merger with The
Timber Company, Plum Creek wrote-off all of The Timber
Company’s deferred income tax liability related to timber and
timberlands except for $11 million. The $11 million deferred income
tax liability related to the book-tax basis difference of timber
and timberlands that were expected to be</font> <font face=
"Times New Roman" size="2">sold, and subject to, the built-in gains
tax during the ten-year period ending October 6, 2011. During
the period October 6, 2001 to December 31, 2008, the $11
million deferred income tax liability was reduced by $5 million due
to a remeasurement of the amount of deferred income taxes needed
and by $2 million due to the payment or accrual of tax in
connection with sales of timberlands subject to the built-in gains
tax.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">At December 31, 2008, the company
estimated it needed a deferred tax liability of approximately $4
million based on projected timberland sales subject to the built-in
gains tax for the period January 1, 2009 to October 6,
2011, and Plum Creek’s ability to successfully reinvest
proceeds in like-kind properties. During the first quarter of 2009,
because of a change in tax law the company estimated it needs a
deferred tax liability of $1 million in connection with expected
sales of timberlands that are subject to the built-in gains tax.
Therefore, in accordance with the remeasurement requirements of
Statement of Financial Accounting Standards No. 109,
<i>Accounting for Income Taxes</i>, the company reduced its
deferred tax liability by $3 million during the first quarter of
2009. Furthermore in the first quarter of 2009, because of the
change in tax law the company reversed $5 million of tax expense
related to built-in gains that had been accrued in 2008.</font></p>
</div>
-23000000
-4000000
-17000000
-48000000
76000000
47000000
<div>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"></p>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b>Note 4. Inventory</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">Inventories, accounted for using the
lower of average cost or market, consisted of the following
(in millions):</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
 </p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="78%"></td>
<td valign="bottom" width="7%"></td>
<td></td>
<td></td>
<td valign="bottom" width="7%"></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>June 30, 2009</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1">December 31, 2008</font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Raw Materials (primarily
logs)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>8</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">23</font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Work-In-Process</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>2</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">3</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Finished Goods</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>31</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">36</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
</tr>
<tr>
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>41</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">62</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Supplies</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>12</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">12</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Total</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>53</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">74</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-TOP: 0px; FONT-SIZE: 18px; MARGIN-BOTTOM: 0px">
 </p>
</td>
</tr>
</tbody>
</table>
</div>
346000000
-388000000
-28000000
394000000
189000000
212000000
<div>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b>Note 1. Basis of
Presentation</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b><i>General.</i></b> 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.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">The consolidated financial statements
include all of the accounts of Plum Creek and its
subsidiaries. At June 30, 2009, the company owned and
managed approximately 7.2 million acres of timberlands in the
Northwest, Southern, and Northeast United States, and owned and
operated eight wood product conversion facilities in the Northwest
United States. Included in the 7.2 million acres are about
1.5 million acres of higher and better use timberlands, which
are expected to be sold and/or developed over approximately the
next 15 years for recreational, conservation or residential
purposes. In addition, the company has approximately 250,000 acres
of non-strategic timberlands, which are expected to be sold over
the next five years. In the meantime, all of these timberlands
continue to be used productively in our business of growing and
selling timber.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">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, and
the development and/or sales of some of our higher and better use
timberlands. Plum Creek’s overall effective tax rate is lower
than the federal statutory corporate rate due to Plum Creek’s
status as a REIT.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">Intercompany transactions and accounts
have been eliminated in consolidation. All transactions are
denominated in United States dollars.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">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, 2008, 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 2008 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.</font></p>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b>New Accounting Pronouncements
(Adopted during 2009)</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b><i>SFAS No. 165.</i></b> In May
2009, the Financial Accounting Standards Board (“FASB”)
issued SFAS No. 165, <i>Subsequent Events</i> (“SFAS
No. 165”). SFAS No. 165 establishes principles and
requirements for subsequent events and sets forth the period after
the balance sheet date during which management shall evaluate
events or transactions that may occur for potential recognition or
disclosure in the financial statements, the circumstances under
which an entity shall recognize events or transactions occurring
after the balance sheet date in its financial statements, and the
disclosures an entity shall make about events or transactions that
occurred after the balance sheet date. SFAS No. 165 is
effective for interim or annual periods ending after June 15,
2009, and is applied prospectively. The company adopted SFAS
No. 165 in the second quarter of 2009; this adoption did not
have any impact on the company’s financial condition, results
of operations or cash flows.</font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font></p>
<!--##PBStart##-->
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">The company has evaluated subsequent
events for recognition or disclosure through the date these
financial statements were issued, August 5, 2009, which is the date
the financial statements were filed with the Securities and
Exchange Commission (“SEC”).</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b><i>SFAS No. 157.</i></b> In
September 2006, the Financial Accounting Standards Board
(“FASB”) issued SFAS No. 157, <i>Fair Value
Measurement</i> (“SFAS No. 157”). SFAS
No. 157 defines fair value, establishes a framework for
measuring fair value in generally accepted accounting principles,
and expands disclosures about fair value measurements, but does not
require any new fair value measurements. SFAS No. 157
supersedes the definition of fair value in most existing
pronouncements under generally accepted accounting principles that
require or permit the use of fair value, including (but not limited
to) business combinations, impairments and exchanges of nonmonetary
assets. SFAS No. 157 established a fair value hierarchy that
prioritizes the inputs to valuation techniques used to measure fair
value. The hierarchy gives the highest priority to unadjusted
quoted prices in active markets for identical assets or liabilities
(Level I measurements) and the lowest priority to unobservable
inputs (Level III measurements).</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">SFAS No. 157 is effective for fiscal
years beginning after November 15, 2007 and interim periods within
those fiscal years. In February 2008, the FASB issued FASB Staff
Position No. FAS 157-2, which delayed the effective date of SFAS
No. 157 for certain non-financial assets and liabilities to fiscal
years beginning after November 15, 2008 and interim periods within
those fiscal years.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">The company adopted SFAS No. 157
for its financial assets and liabilities in the first quarter of
2008 and adopted SFAS No. 157 for its non-financial assets and
liabilities in the first quarter of 2009. The adoption did not
result in recognition of a transition adjustment to retained
earnings or have a material impact on the company’s financial
condition, results of operations or cash flows.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b><i>SFAS No. 141(R).</i></b> In
December 2007, the FASB issued SFAS No. 141 (revised 2007),
Business Combinations (“SFAS No. 141(R)”), which
is a revision of SFAS No. 141. In general, SFAS
No. 141(R) expands the definition of a business and
transactions that are accounted for as business combinations. In
addition, SFAS No. 141(R) generally requires all assets and
liabilities of acquired entities to be recorded at fair value, and
changes the recognition and measurement of related aspects of
business combinations. SFAS No. 141(R) is effective for
business combinations with an acquisition date within fiscal years
beginning on or after December 15, 2008. The standard is
required to be adopted prospectively and early adoption is not
allowed. The company adopted SFAS No. 141(R) in the first
quarter of 2009; this adoption did not have any impact on the
company’s financial condition, results of operations or cash
flows.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b><i>SFAS No. 160.</i></b> In
December 2007, the FASB issued SFAS No. 160, <i>Noncontrolling
Interests in Consolidated Financial Statements, an Amendment of ARB
No. 51</i> (“SFAS No. 160”). In general, SFAS
No. 160 requires that a noncontrolling interest in a
consolidated subsidiary be presented in the consolidated statement
of financial position as a separate component of equity and also
establishes a framework for recognition of changes in control for a
consolidated subsidiary that is not 100% owned. SFAS No. 160
is effective for fiscal years beginning after December 15,
2008 and interim periods within those fiscal years. The standard is
required to be adopted prospectively and early adoption is not
allowed. All consolidated subsidiaries of the company are
wholly-owned; and therefore, the adoption of SFAS No. 160 did
not have any impact on the company’s financial condition,
results of operations or cash flows.</font></p>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b>New Accounting Pronouncements (Not
Yet Adopted)</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b><i>SFAS No. 166.</i></b> In June
2009, the FASB issued SFAS No. 166, <i>Accounting for
Transfers of Financial Assets, an Amendment of FASB Statement
No. 140</i> (“SFAS No. 166”). In general,
SFAS No. 166 amends FASB Statement 140, <i>Accounting for
Transfers and Servicing of Financial Assets and Extinguishment of
Liabilities</i> (“SFAS No. 140”) to address
accounting practices that have developed since the issuance of SFAS
No. 140 that are not consistent with the original intent and
key requirements of that Statement and to address concerns that
many financial assets and related obligations that have been
derecognized should continue to be reported in the financial
statements of the transferors. SFAS No. 166 is effective for
fiscal years beginning after November 15,</font>
<!--##PBStart##--><font face="Times New Roman" size="2">2009, for
interim periods within those fiscal years, and for interim and
annual reporting periods thereafter. The company does not expect
the adoption of SFAS No. 166 will have a material impact on
the company’s financial condition, results of operations or
cash flows.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b><i>SFAS No. 167.</i></b> In June
2009, the FASB issued SFAS No. 167, <i>Amendments to FASB
Interpretation No. 46(R)</i> (“SFAS
No. 167”). Among other things, SFAS No. 167 amends
certain guidance for determining whether an entity is a variable
interest entity (“VIE”), requires a qualitative rather
than quantitative analysis to determine the primary beneficiary of
a VIE, requires continuous assessments of whether an enterprise is
the primary beneficiary of a VIE and requires enhanced disclosures
about an enterprise’s involvement with a VIE. SFAS
No. 167 is effective for fiscal years beginning after
November 15, 2009, for interim periods within those fiscal
years, and for interim and annual reporting periods thereafter. The
company is in the process of determining the effect the adoption of
SFAS No. 167 will have on the company’s financial
condition, results of operations or cash flows.</font></p>
</div>
4000000
1000000
10000000
87000000
138000000
28000000
<div>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b>Note 11. Employee Pension
Plans</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">The components of pension cost were as
follows for the <b>quarterly and six-month periods ended
June 30</b> (in millions):</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
 </p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="82%"></td>
<td valign="bottom" width="7%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="7%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="6"><font face="Times New Roman" size=
"1"><b>Quarter Ended June 30,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1">2008</font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Service Cost</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>2</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">2</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Interest Cost</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>2</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">2</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Expected Return on Plan
Assets</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>(3</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">(2</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">) </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Recognized Actuarial Loss</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>1</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Total Pension Cost</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>2</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">2</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td height="16"></td>
<td colspan="8" height="16"></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="6"><font face="Times New Roman" size=
"1"><b>Six Months Ended June 30,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1">2008</font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Service Cost</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>4</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">4</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Interest Cost</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>4</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">3</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Expected Return on Plan
Assets</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>(4</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">(3</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">) </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Recognized Actuarial Loss</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>1</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Total Pension Cost</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>5</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">4</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
</tbody>
</table>
</div>
0
0
431000000
0
<div>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b>Note 6. Property, Plant and
Equipment</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">Property, Plant and Equipment consisted
of the following (in millions):</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
 </p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="78%"></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>June 30, 2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1">December 31, 2008</font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Land, Buildings and
Improvements</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>86</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">92</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Machinery and Equipment</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>306</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">310</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>392</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">402</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Accumulated Depreciation</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>(232</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">(225</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Property, Plant and Equipment,
net</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>160</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">177</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">During the first quarter of 2009, the
company conducted an analysis to rationalize and consolidate its
lumber operations. The analysis was performed by the company due to
the significant and sustained decline in lumber demand along with
the company’s expectations for continued weakness in this
business. As a result of this analysis, the company concluded that
certain of its lumber manufacturing assets were impaired.
Consequently, during the first quarter of 2009, the company
recorded an impairment charge of $10 million related to these
lumber manufacturing assets. During the second quarter of 2008, the
company recorded an impairment charge of $10 million related to its
lumber manufacturing assets. The impairment losses are reflected in
the operating income of the Manufactured Products Segment and
included in Cost of Goods Sold for Manufacturing in the
Consolidated Statements of Income.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">The fair value of the impaired assets
was determined by the company using expected future cash flows
discounted at a risk-adjusted rate of interest. See Note 10 of the
Notes to Consolidated Financial Statements.</font></p>
</div>
138000000
456000000
742000000
<div>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b>Note 14. Subsequent
Events</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b><i>Quarterly Dividend.</i></b> On
August 4, 2009, the Board of Directors authorized the company
to make a dividend payment of $0.42 per share, or approximately $68
million, which will be paid on August 31, 2009 to stockholders
of record on August 14, 2009.</font></p>
</div>
<div>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b>Note 3. Variable Interest
Entities</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">On October 1, 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. Following
the contribution, the company borrowed $783 million from the
Timberland Venture (“Note Payable to Timberland
Venture”).</font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">The Timberland Venture is a variable
interest entity in accordance with FASB Interpretation
No. 46(R), <i>Consolidation of Variable Interest Entities</i>
(“FIN 46(R)”). 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 is
financed by a line of credit obtained by the Timberland
Venture.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">We are not the primary beneficiary of
the Timberland Venture. The company does not manage the day-to-day
operations of the 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 are not required to absorb the majority of
the expected losses as defined by FIN 46(R). The common interests
are required to absorb losses based on positive capital accounts
before any losses can be allocated to our preferred interest, and
we own a 9% common interest.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">The carrying amount of the investment in
the venture is $203 million at June 30, 2009 and $199 million
at December 31, 2008, and it is reported in the Consolidated
Balance Sheets as Equity Investment in Timberland Venture. The
increase in the investment is a result of recognizing equity
earnings of $29 million, offset by a preferred cash distribution of
$25 million paid by the Timberland Venture to the company during
the first quarter of 2009. Our maximum exposure to loss is $203
million, the carrying amount of the investment in the venture.
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.</font></p>
</div>
<div>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"></p>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b>Note 13. Segment
Information</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">The tables below present information
about reported segments for the <b>quarterly and six-month periods
ended June 30</b> (in millions):</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
 </p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="60%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>Northern<br />
Resources</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>Southern<br />
Resources</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>Real</b></font><br />
<font face="Times New Roman" size="1"><b>Estate</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="2"><font face=
"Times New Roman" size="1"><b>Manufactured<br />
Products <sup style=
"VERTICAL-ALIGN: baseline; BOTTOM: 0.8ex; POSITION: relative">(</sup><sup style="VERTICAL-ALIGN: baseline; BOTTOM: 0.8ex; POSITION: relative">A</sup><sup style="VERTICAL-ALIGN: baseline; BOTTOM: 0.8ex; POSITION: relative">)</sup></b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>Other</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>Total <sup style=
"VERTICAL-ALIGN: baseline; BOTTOM: 0.8ex; POSITION: relative">(</sup><sup style="VERTICAL-ALIGN: baseline; BOTTOM: 0.8ex; POSITION: relative">B)</sup></b></font></td>
</tr>
<tr>
<td height="16"></td>
<td colspan="4" height="16"></td>
<td colspan="3" height="16"></td>
<td colspan="3" height="16"></td>
<td colspan="4" height="16"></td>
<td colspan="3" height="16"></td>
<td colspan="3" height="16"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2"><b>Quarter Ended June 30,
2009</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">External Revenues</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>$</b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>34</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>$</b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>89</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>$</b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>78</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>$</b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>66</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>$</b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>5</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>$</b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>272</b></font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Intersegment Revenues</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>1</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>—  </b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>—  </b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>—  </b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>1</b></font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Depreciation, Depletion and
Amortization</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>6</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>13</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>1</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>3</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>—  </b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>23</b></font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Basis of Real Estate Sold</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>—  </b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>29</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>—  </b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>29</b></font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Operating Income (Loss)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>(7</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>23</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>44</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>4</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>64</b></font></td>
</tr>
<tr>
<td height="16"></td>
<td colspan="4" height="16"></td>
<td colspan="3" height="16"></td>
<td colspan="3" height="16"></td>
<td colspan="4" height="16"></td>
<td colspan="3" height="16"></td>
<td colspan="3" height="16"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2"><b>Quarter Ended June 30,
2008</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">External Revenues</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">64</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">128</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">57</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">121</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">6</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">376</font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Intersegment Revenues</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">10</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">10</font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Depreciation, Depletion and
Amortization</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">7</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">16</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">1</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">17</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">41</font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Basis of Real Estate Sold</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">12</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">12</font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Operating Income (Loss)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">7</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">37</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">35</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">(11</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">5</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">73</font></td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font></p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="59%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>Northern<br />
Resources</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>Southern<br />
Resources</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>Real</b></font><br />
<font face="Times New Roman" size="1"><b>Estate <sup style=
"VERTICAL-ALIGN: baseline; BOTTOM: 0.8ex; POSITION: relative">(</sup><sup style="VERTICAL-ALIGN: baseline; BOTTOM: 0.8ex; POSITION: relative">C</sup><sup style="VERTICAL-ALIGN: baseline; BOTTOM: 0.8ex; POSITION: relative">)</sup></b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="2"><font face=
"Times New Roman" size="1"><b>Manufactured<br />
Products <sup style=
"VERTICAL-ALIGN: baseline; BOTTOM: 0.8ex; POSITION: relative">(</sup><sup style="VERTICAL-ALIGN: baseline; BOTTOM: 0.8ex; POSITION: relative">A</sup><sup style="VERTICAL-ALIGN: baseline; BOTTOM: 0.8ex; POSITION: relative">)</sup></b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>Other</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>Total <sup style=
"VERTICAL-ALIGN: baseline; BOTTOM: 0.8ex; POSITION: relative">(</sup><sup style="VERTICAL-ALIGN: baseline; BOTTOM: 0.8ex; POSITION: relative">B</sup><sup style="VERTICAL-ALIGN: baseline; BOTTOM: 0.8ex; POSITION: relative">)</sup></b></font></td>
</tr>
<tr>
<td height="16"></td>
<td colspan="4" height="16"></td>
<td colspan="3" height="16"></td>
<td colspan="3" height="16"></td>
<td colspan="4" height="16"></td>
<td colspan="3" height="16"></td>
<td colspan="3" height="16"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2"><b>Six Months Ended June 30,
2009</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">External Revenues</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>$</b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>90</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>$</b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>172</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>$</b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>346</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>$</b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>124</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>$</b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>10</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>$</b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>742</b></font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Intersegment Revenues</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>2</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>—  </b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>—  </b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>—  </b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>2</b></font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Depreciation, Depletion and
Amortization</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>13</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>24</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>1</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>17</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>—  </b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>55</b></font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Basis of Real Estate Sold</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>—  </b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>118</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>—  </b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>118</b></font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Operating Income (Loss)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>(5</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>43</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>214</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>(22</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>9</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>239</b></font></td>
</tr>
<tr>
<td height="16"></td>
<td colspan="4" height="16"></td>
<td colspan="3" height="16"></td>
<td colspan="3" height="16"></td>
<td colspan="4" height="16"></td>
<td colspan="3" height="16"></td>
<td colspan="3" height="16"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2"><b>Six Months Ended June 30,
2008</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">External Revenues</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">143</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">250</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">109</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">226</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">11</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">739</font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Intersegment Revenues</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">25</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">25</font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Depreciation, Depletion and
Amortization</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">17</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">31</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">1</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">24</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">73</font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Basis of Real Estate Sold</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">22</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">22</font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Operating Income (Loss)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">21</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">74</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">68</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">(20</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">10</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2">153</font></td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="4%"><font face=
"Times New Roman" size="2"><b>(A)</b></font></td>
<td valign="top" align="left"><font face="Times New Roman" size=
"2">For the six months ended June 30, 2009, and for the
quarter and six months ended June 30, 2008, the Manufactured
Products Segment depreciation, depletion and amortization, and
operating income (loss) include a $10 million lumber manufacturing
assets impairment loss. See Note 6 of the Notes to Consolidated
Financial Statements.</font></td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="4%"><font face=
"Times New Roman" size="2"><b>(B)</b></font></td>
<td valign="top" align="left"><font face="Times New Roman" size=
"2">Consolidated depreciation, depletion and amortization include
unallocated corporate depreciation of $1 million and $2 million for
the quarter and six months ended June 30, 2009, respectively,
and $2 million and $3 million for the quarter and six months ended
June 30, 2008, respectively.</font></td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="4%"><font face=
"Times New Roman" size="2"><b>(C)</b></font></td>
<td valign="top" align="left"><font face="Times New Roman" size=
"2">During 2008, the company negotiated the sale of 310,000 acres
in Montana for $489 million, to be closed in three phases. Proceeds
of $150 million from the first phase were received during the
fourth quarter of 2008. Proceeds of $250 million from the second
phase were received during the first quarter of 2009. The third and
final phase is expected to close in 2010. For the six months ended
June 30, 2009, the Real Estate Segment includes revenue of
$250 million and operating income of $162 million related to the
closing of the second phase.</font></td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">A reconciliation of total segment
operating income to income before income taxes is presented below
for the <b>quarterly and six-month periods ended June 30</b>
(in millions):</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
 </p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="82%"></td>
<td valign="bottom" width="7%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="7%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="6"><font face="Times New Roman" size=
"1"><b>Quarter Ended June 30,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1">2008</font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Total Segment Operating
Income</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>64</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">73</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Corporate and Other Unallocated
Expenses</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>(11</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">(16</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">) </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Other Operating Income (Expense),
net</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Operating Income</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>53</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">57</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Equity Earnings from Timberland
Venture</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>14</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Total Interest Expense, net</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>(38</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">(34</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Income before Income Taxes</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>29</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">23</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td height="16"></td>
<td colspan="8" height="16"></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="6"><font face="Times New Roman" size="1"><b>Six
Months Ended June 30,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1">2008</font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Total Segment Operating
Income</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>239</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">153</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Corporate and Other Unallocated
Expenses</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>(27</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">(30</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">) </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Other Operating Income (Expense),
net</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">3</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Operating Income</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>212</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">126</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Equity Earnings from Timberland
Venture</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>29</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Total Interest Expense, net</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>(76</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">(70</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">) </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Gain on Extinguishment of
Debt</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>1</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Income before Income Taxes</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>166</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">56</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
</tbody>
</table>
</div>
55000000
<div>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b>Note 9. Stockholders’
Equity</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">The changes in the company’s
stockholders’ equity accounts were as follows during 2009 (in
millions):</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
 </p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="59%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="5"><font face="Times New Roman" size=
"1"><b>Common Stock</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="2"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="2"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" colspan="2"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2" rowspan="2"><font face="Times New Roman" size=
"1"><b>Accumulated</b></font><br />
<font face="Times New Roman" size="1"><b>Other</b></font><br />
<font face="Times New Roman" size="1"><b>Comprehensive<br />
Income (Loss)</b></font></td>
<td valign="bottom" rowspan="2"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" colspan="2"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle"><font face="Times New Roman" size=
"1"><b>Shares</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>Dollars</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>Paid-in<br />
Capital</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>Retained<br />
Earnings</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>Treasury<br />
Stock</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>Total</b></font><br />
<font face="Times New Roman" size="1"><b>Equity</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="4" height="8"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2"><b>January 1, 2009</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">166.0</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">2</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">2,225</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">149</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">(773</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">(31</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">1,572</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="4" height="8"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Net Income</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">157</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">157</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Other Comprehensive Income (Loss), net
of tax</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">(2</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">(2</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Total Comprehensive Income</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">155</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="4" height="8"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Dividends</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">(69</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">(69</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">) </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Shares Issued under Stock Incentive
Plans</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">0.1</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">1</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">1</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Share-based Compensation</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">2</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">2</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Common Stock Repurchased</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">(3.3</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">(87</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">(87</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="4" height="8"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2"><b>March 31, 2009</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">162.8</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">2</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">2,228</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">237</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">(860</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">(33</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">1,574</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="4" height="8"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Net Income</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>32</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>32</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Other Comprehensive Income (Loss), net
of tax</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>3</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>3</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Total Comprehensive Income</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>35</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="4" height="8"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Dividends</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>(69</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>(69</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>) </b></font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Share-based Compensation</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>2</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>2</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="4" height="8"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2"><b>June 30, 2009</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>162.8</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>2</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>2,230</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>200</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>(860</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>(30</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>1,542</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
</div>
163900000
163800000
166000000
0
57000000
0
118000000
-1000000
8000000
262000000
124000000
206000000
128000000
140000000
<div>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0">
<tbody>
<tr>
<td valign="top">
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b>Note 5. Timber and
Timberlands</b></font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">Timber and Timberlands consisted of the
following (in millions):</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 1px">
 </p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>June 30, 2009</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1">December 31, 2008</font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Timber and Logging Roads, net</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>2,385</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">2,443</font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Timberlands</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>1,180</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">1,195</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Timber and Timberlands, net</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>3,565</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">3,638</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font></p>
</div>
29000000
<div>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b>Note 2. Earnings Per
Share</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">The following tables set forth the
reconciliation of basic and diluted earnings per share for the
<b>quarterly and six-month periods ended June 30</b> (in
millions, except per share amounts):</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
<font size="+0"> </font></p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="88%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="5"><font face="Times New Roman" size=
"1"><b>Quarter Ended June 30,</b></font></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>2009</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1">2008</font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Net Income Available to Common
Stockholders</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>32</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">31</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Denominator for Basic Earnings per
Share</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>162.8</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">171.1</font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Effect of Dilutive Securities –
Stock Options</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>0.1</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">0.4</font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Effect of Dilutive Securities –
Restricted Stock, Restricted Stock Units, Dividend Equivalents and
Value Management Plan</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">0.1</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Denominator for Diluted Earnings per
Share – Adjusted for Dilutive Securities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>162.9</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">171.6</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2"><b>Per Share Amounts:</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Net Income Per Share –
Basic</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>0.19</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">0.18</font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Net Income Per Share –
Diluted</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>0.19</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">0.18</font></td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font></p>
<!--##PBStart##-->
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="88%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="5"><font face="Times New Roman" size=
"1"><b>Six Months Ended June 30,</b></font></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>2009</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1">2008</font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Net Income Available to Common
Stockholders</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>189</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">69</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Denominator for Basic Earnings per
Share</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>163.8</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">171.4</font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Effect of Dilutive Securities –
Stock Options</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>0.1</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">0.3</font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Effect of Dilutive Securities –
Restricted Stock, Restricted Stock Units, Dividend Equivalents and
Value Management Plan</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">0.1</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Denominator for Diluted Earnings per
Share – Adjusted for Dilutive Securities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>163.9</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">171.8</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2"><b>Per Share Amounts:</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Net Income Per Share –
Basic</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>1.15</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">0.40</font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Net Income Per Share –
Diluted</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>1.15</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">0.40</font></td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">Antidilutive options were excluded for
certain periods from the computation of diluted earnings per share
because the options’ exercise prices were greater than the
average market price of the common shares. Antidilutive options
were as follows for the <b>quarterly and six-month periods ended
June 30</b> (shares in millions):</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
<font size="+0"> </font></p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="74%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="3"><font face="Times New Roman" size=
"1"><b>Quarter Ended June 30,</b></font></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle"><font face="Times New Roman" size=
"1"><b>2009</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle"><font face="Times New Roman" size="1">2008</font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="2" height="8"></td>
<td colspan="2" height="8"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Number of Options</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="middle"><font face="Times New Roman"
size="2"><b>2.2</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="middle"><font face="Times New Roman"
size="2">1.0</font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Range of Exercise Prices</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="middle"><font face="Times New Roman"
size="2"><b>$33.75 to $43.23</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="middle"><font face="Times New Roman"
size="2">$39.31 to $43.23</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Expiration on or before</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="middle"><font face="Times New Roman"
size="2"><b>February 2019</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="middle"><font face="Times New Roman"
size="2">May 2018</font></td>
</tr>
<tr>
<td height="16"></td>
<td colspan="4" height="16"></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="3"><font face="Times New Roman" size="1"><b>Six
Months Ended June 30,</b></font></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle"><font face="Times New Roman" size=
"1"><b>2009</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle"><font face="Times New Roman" size="1">2008</font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="2" height="8"></td>
<td colspan="2" height="8"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Number of Options</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="middle"><font face="Times New Roman"
size="2"><b>2.3</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="middle"><font face="Times New Roman"
size="2">0.9</font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Range of Exercise Prices</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="middle"><font face="Times New Roman"
size="2"><b>$30.70 to $43.23</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="middle"><font face="Times New Roman"
size="2">$39.31 to $43.23</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Expiration on or before</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="middle"><font face="Times New Roman"
size="2"><b>February 2019</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="middle"><font face="Times New Roman"
size="2">May 2018</font></td>
</tr>
</tbody>
</table>
</div>
Plum Creek Timberlands L P
--12-31
No
No
Yes
Non-accelerated Filer
-22000000
<div>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b>Note 9. Fair Value
Measurements</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b><i>Assets and Liabilities Measured at
Fair Value on a Recurring Basis.</i></b> The Operating
Partnership’s fair value measurements of its financial
instruments, measured on a recurring basis, are categorized as
Level 1 measurements under the SFAS 157 hierarchy. 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 Operating
Partnership’s financial statements at fair value, measured on
a recurring basis (in millions):</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
 </p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="70%"></td>
<td valign="bottom" width="13%"></td>
<td></td>
<td></td>
<td valign="bottom" width="13%"></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>Balance at</b></font><br />
<font face="Times New Roman" size=
"1"><b>June 30, 2009</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>Fair Value Measurements<br />
at Reporting Date Using<br />
Quoted Prices in Active<br />
Markets of Identical Assets<br />
(Level 1 Measurements)</b></font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Cash Equivalents <b><font face=
"Times New Roman" size="1"><sup style=
"VERTICAL-ALIGN: baseline; BOTTOM: 0.8ex; POSITION: relative">(A)</sup></font></b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">342</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">342</font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Available-for-Sale Securities
<b><font face="Times New Roman" size="1"><sup style=
"VERTICAL-ALIGN: baseline; BOTTOM: 0.8ex; POSITION: relative">(B)</sup></font></b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">21</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">21</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Trading Securities <b><font face=
"Times New Roman" size="1"><sup style=
"VERTICAL-ALIGN: baseline; BOTTOM: 0.8ex; POSITION: relative">(B)</sup></font></b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">5</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">5</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Total</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">368</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">368</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
</tr>
<tr>
<td height="16"></td>
<td colspan="3" height="16"></td>
<td colspan="3" height="16"></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>Balance at</b></font><br />
<font face="Times New Roman" size=
"1"><b>December 31, 2008</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size="1"><b>Fair
Value Measurements<br />
at Reporting Date Using<br />
Quoted Prices in Active<br />
Markets of Identical Assets<br />
(Level 1 Measurements)</b></font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Cash Equivalents <b><font face=
"Times New Roman" size="1"><sup style=
"VERTICAL-ALIGN: baseline; BOTTOM: 0.8ex; POSITION: relative">(A)</sup></font></b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">346</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">346</font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Available-for-Sale Securities
<b><font face="Times New Roman" size="1"><sup style=
"VERTICAL-ALIGN: baseline; BOTTOM: 0.8ex; POSITION: relative">(B)</sup></font></b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">20</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">20</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Trading Securities <b><font face=
"Times New Roman" size="1"><sup style=
"VERTICAL-ALIGN: baseline; BOTTOM: 0.8ex; POSITION: relative">(B)</sup></font></b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">5</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">5</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Total</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">371</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">371</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="4%"><font face=
"Times New Roman" size="2"><b>(A)</b></font></td>
<td valign="top" align="left"><font face="Times New Roman" size=
"2">Consists of several money market funds and is included in the
$347 million and $369 million of Cash and Cash Equivalents in the
Consolidated Balance Sheets at June 30, 2009 and
December 31, 2008, respectively.</font></td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="4%"><font face=
"Times New Roman" size="2"><b>(B)</b></font></td>
<td valign="top" align="left"><font face="Times New Roman" size=
"2">Consists of several mutual funds which are invested in domestic
(U.S.) and international equity and debt securities and is included
in Investment in Grantor Trusts in the Consolidated Balance Sheets
at June 30, 2009 and December 31, 2008.</font></td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b><i>Available-for-Sale
Securities.</i></b> Certain investments in the grantor trusts
relate to the Operating Partnership’s non-qualified pension
plans and are classified as available-for-sale securities. The
Operating Partnership has invested in various money market funds
and debt and equity mutual funds and plans to use these investments
to fund its non-qualified pension obligations. The fair value of
these investments was $21 million and $20 million at June 30,
2009 and December 31, 2008, respectively. Unrealized holding
gains and losses are included as a component of accumulated other
comprehensive income, unless an other than temporary impairment has
occurred, which is then charged to expense. Unrealized holding
gains were $1 million at June 30, 2009 and unrealized holding
losses were less than $1 million at December 31, 2008. The
Operating Partnership records changes in unrealized holding gains
and losses in Other Comprehensive Income. The change in unrealized
holding gains and losses was approximately $1 million for the six
months ended June 30, 2009. Realized gains were less than $1
million for the six months ended June 30, 2009.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b><i>Trading Securities.</i></b>
Certain investments in the grantor trusts relate to the Operating
Partnership’s deferred compensation plans and are classified
as trading securities. Deferred compensation amounts are invested
in various money market funds and debt and equity mutual funds. The
Operating Partnership plans to use these</font> <font face=
"Times New Roman" size="2">investments to fund deferred
compensation obligations. The fair value of these investments was
$5 million at both June 30, 2009 and December 31, 2008.
Realized gains and losses and changes in unrealized gains and
losses (and a corresponding amount of compensation expense) are
recognized in the Operating Partnership’s Consolidated
Statements of Income. Unrealized losses were $1 million at
June 30, 2009 and were $2 million at December 31, 2008.
The change in unrealized losses was approximately $1 million
(unrealized gains) for the six months ended June 30, 2009.
Realized losses were $1 million for the six months ended
June 30, 2009. Deferred compensation obligations are included
in Other Liabilities and were $5 million at both June 30, 2009
and December 31, 2008.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b><i>Other Instruments.</i></b> The
carrying amount of notes receivable approximates fair value due to
the short-term maturities of these instruments. The estimated fair
value of the Operating Partnership’s debt was approximately
$1.96 billion and $2.05 billion at June 30, 2009 and
December 31, 2008, respectively, and the carrying amount was
$2.02 billion and $2.18 billion at June 30, 2009 and
December 31, 2008, respectively. The fair value of the
Operating Partnership’s publicly-traded debt (i.e., Senior
Notes due 2015) is estimated using market quotes. The fair value of
the Operating Partnership’s other Senior Notes is estimated
using the same rates adjusted for the different maturities. The
fair value of our Term Credit Agreements was determined by
adjusting the spread over LIBOR to a current market spread for
comparable debt.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b><i>Assets and Liabilities Measured at
Fair Value on a Nonrecurring Basis.</i></b> The Operating
Partnership’s fair value measurements of its assets and
liabilities, measured on a nonrecurring basis, are categorized as
Level 3 measurements under the SFAS 157 hierarchy. A Level 3
valuation is based on unobservable inputs that are supported by
little or no market activity and that are significant to the fair
value of the assets or liabilities. Summarized below are the Level
3 assets and liabilities reported in the Operating
Partnership’s financial statements at fair value, measured on
a nonrecurring basis, during the six-month period ended
June 30 (in millions):</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
 </p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="61%"></td>
<td valign="bottom" width="11%"></td>
<td></td>
<td></td>
<td valign="bottom" width="11%"></td>
<td></td>
<td></td>
<td valign="bottom" width="11%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>Six Months Ended<br />
June 30, 2009</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>Fair Value Measurements<br />
Using Significant<br />
Unobservable Inputs<br />
(Level 3 Measurements)</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>Net Gain (Loss)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Certain Long-Lived Lumber Assets Held
and Used</font> <font face="Times New Roman" size="1"><sup style=
"VERTICAL-ALIGN: baseline; BOTTOM: 0.8ex; POSITION: relative"><b>(A)</b></sup></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">(10</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">) </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Timberlands Held for Sale</font>
<font face="Times New Roman" size="1"><sup style=
"VERTICAL-ALIGN: baseline; BOTTOM: 0.8ex; POSITION: relative"><b>(B)</b></sup></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">25</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">25</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">(1</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">) </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Liabilities for Road Maintenance</font>
<font face="Times New Roman" size="1"><sup style=
"VERTICAL-ALIGN: baseline; BOTTOM: 0.8ex; POSITION: relative"><b>(C)</b></sup></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">7</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">7</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Total</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">(11</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="4%"><font face=
"Times New Roman" size="2"><b>(A)</b></font></td>
<td valign="top" align="left"><font face="Times New Roman" size=
"2">During the first quarter of 2009, in accordance with Statement
of Financial Accounting Standards No. 144 (“SFAS
No. 144”), <i>Accounting for the Impairment or Disposal
of Long-Lived Assets</i>, certain lumber assets with a carrying
value of $10 million were written down to their fair value of $0,
resulting in an impairment charge of $10 million, which was
included in earnings for the six month period ended June 30,
2009. The fair value was determined using a discounted cash flow
model based on estimated future lumber prices, log costs and
operating expenses using internal projections.</font></td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="4%"><font face=
"Times New Roman" size="2"><b>(B)</b></font></td>
<td valign="top" align="left"><font face="Times New Roman" size=
"2">During the first quarter of 2009, in accordance with SFAS
No. 144, timberlands held for sale with a carrying amount of
$26 million were written down to their fair value (net of estimated
selling costs) of $25 million, resulting in a loss of $1 million,
which was included in earnings for the six month period ended
June 30, 2009. The fair value was determined based on an
external appraisal which was derived from a combination of
comparable sales and discounted future cash flows. The discounted
future cash flows were based on estimated future timber prices and
related operating expenses using internal and external
projections.</font></td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font></p>
<!--##PBStart##-->
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="4%"><font face=
"Times New Roman" size="2"><b>(C)</b></font></td>
<td valign="top" align="left"><font face="Times New Roman" size=
"2">The Operating Partnership has agreements with the federal
government under which it is obligated to pay maintenance or
replacement costs for certain roads. The Operating Partnership also
has obligations under state law to maintain or upgrade certain
roads. At March 31, 2009, the Operating Partnership concluded
that most of these liabilities could be reasonably estimated. As a
result, in accordance with Statement of Financial Accounting
Standards No. 143, <i>Accounting for Asset Retirement
Obligations</i>, the Operating Partnership recorded road
maintenance liabilities and related timberland assets with an
estimated fair value of $7 million. The fair value was determined
using a cost approach based on internal projections.</font></td>
</tr>
</tbody>
</table>
</div>
<div>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b>Note 11. Commitments and
Contingencies</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b><i>Contingencies.</i></b> The
Operating Partnership is subject to regulations regarding forest
and harvest practices and is, from time to time, involved in
various legal proceedings, including environmental and regulatory
matters, incidental to its business. Reserves have been established
for any probable losses.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b><i>Environmental
Contingencies.</i></b> In connection with the October 6, 2001
merger with The Timber Company, Plum Creek agreed to indemnify
Georgia-Pacific for substantially all of the liabilities attributed
to The Timber Company. During 2003, Georgia-Pacific provided Plum
Creek with information about the existence of mine tailings and
acidic surface water on approximately 90 acres in Hot Spring
County, Arkansas, on former Georgia-Pacific properties. Barite
mining and related activities were conducted on the site between
1939 and 1981 in part by lessees of an entity that was acquired by
Georgia-Pacific. A remediation plan has not yet been approved. The
Operating Partnership believes that it has strong defenses in the
matter. Furthermore, to the extent the Operating Partnership is
required to indemnify Georgia-Pacific for its share of the
remediation costs, the Operating Partnership may be able to recover
all or a portion of its cost from Georgia-Pacific’s insurance
policy, or indemnity obligations of the various lessees that
conducted mining operations on the property, or both. The Operating
Partnership believes it will be successful in defending the claim.
If the Operating Partnership is not successful in defending this
claim, we believe that any loss would not be material to our
financial position or results of operations.</font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font></p>
<!--##PBStart##-->
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b><i>Unrecorded Contingencies.</i></b>
Management currently believes that resolving other pending legal
proceedings against the Operating Partnership, individually or in
aggregate, will not have a material adverse impact on our financial
position or results of operations. However, these matters are
subject to inherent uncertainties and management’s view on
these matters may change in the future. Were an unfavorable final
outcome in one or multiple legal proceedings to occur, there exists
the possibility of a material adverse impact on our financial
position and the results of operations for the period in which any
unfavorable outcome becomes reasonably estimable.</font></p>
</div>
<div>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b>Note 7. Borrowings</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">Debt consisted of the following (in
millions):</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
<font size="+0"> </font></p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="78%"></td>
<td valign="bottom" width="7%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="7%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>June 30, 2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1">December 31, 2008</font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="4" height="8"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2"><b>Variable Rate Debt</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Term Credit Agreement <b><font face=
"Times New Roman" size="1"><sup style=
"VERTICAL-ALIGN: baseline; BOTTOM: 0.8ex; POSITION: relative">(A)</sup></font></b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>350</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">350</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Term Credit Agreement <b><font face=
"Times New Roman" size="1"><sup style=
"VERTICAL-ALIGN: baseline; BOTTOM: 0.8ex; POSITION: relative">(B)</sup></font></b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>250</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">250</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2"><font size="+0">Revolving Line of Credit
<b><font face="Times New Roman" size="1"><sup style=
"VERTICAL-ALIGN: baseline; BOTTOM: 0.8ex; POSITION: relative">(C)</sup></font></b></font></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>206</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">231</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="4" height="8"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2"><b>Fixed Rate Debt</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Senior Notes</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>1,213</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">1,351</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 5em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Total Debt</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>2,019</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">2,182</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="4" height="8"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Less: Current Portion</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>(110</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">(158</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Long-Term Portion</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>1,909</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">2,024</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
<font size="+0"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="4%"><font face=
"Times New Roman" size="2"><b>(A)</b></font></td>
<td valign="top" align="left"><font face="Times New Roman" size=
"2">As of June 30, 2009, the interest rate on the $350 million
term credit agreement was 0.76%.</font></td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
<font size="+0"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="4%"><font face=
"Times New Roman" size="2"><b>(B)</b></font></td>
<td valign="top" align="left"><font face="Times New Roman" size=
"2">As of June 30, 2009, the interest rate on the $250 million
term credit agreement was 1.31%.</font></td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
<font size="+0"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="4%"><font face=
"Times New Roman" size="2"><b>(C)</b></font></td>
<td valign="top" align="left"><font face="Times New Roman" size=
"2">As of June 30, 2009, the weighted-average interest rate
for the borrowings on the line of credit was 0.72%. As of
June 30, 2009, we had $206 million of borrowings and
$14 million of standby letters of credit outstanding; $530
million remained available for borrowing under our $750 million
line of credit. As of July 1, 2009, all of the borrowings
outstanding under our line of credit were repaid.</font></td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">During March 2009, the Operating
Partnership paid approximately $4 million to retire $5 million of
principal for Senior Notes due in 2015. As a result, the Operating
Partnership recognized a gain of $1 million which was net of
associated unamortized discount and debt issuance costs. The $1
million gain is classified as Gain on Extinguishment of Debt in the
Consolidated Statements of Income for the six-months ended
June 30, 2009.</font></p>
</div>
475000000
530000000
-21000000
25000000
1000000
10000000
29000000
<div>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b>Note 6. Income Taxes</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">Plum Creek Timberlands, L.P.’s
taxable income is allocated 100% to its parent, Plum Creek Timber
Company, Inc., which 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. However, the Operating Partnership conducts
certain non-REIT activities through various wholly-owned taxable
REIT subsidiaries, which are subject to corporate-level income tax.
These activities include our manufacturing operations, the
harvesting and sale of logs, and the development and/or sale of
some higher and better use timberlands. The Operating
Partnership’s tax provision includes the tax expense and/or
benefit associated with Plum Creek’s wholly-owned taxable
REIT subsidiaries, as well as any tax expense and/or benefit
attributable to the REIT. The effective tax rate for the Operating
Partnership is lower than the federal corporate statutory rate
primarily due to Plum Creek’s status as a REIT. 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.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">As a consequence of the October 6,
2001 merger with The Timber Company, which involved merging a
taxable entity into a nontaxable entity, Plum Creek will generally
be subject to corporate-level tax (built-in gains tax) if Plum
Creek makes a taxable disposition of certain property acquired in
the merger within the ten-year period following the merger date.
The built-in gains tax applies to gains from such asset sales to
the extent that the fair value of the property exceeds its tax
basis at the merger date. Built-in gains tax is generally not
payable on dispositions of property to the extent the proceeds from
such dispositions are reinvested in qualifying like-kind
replacement property. The built-in gains tax does not apply to
income generated from the harvesting and sale of timber.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">In connection with Plum Creek’s
merger with The Timber Company, Plum Creek wrote-off all of The
Timber Company’s deferred income tax liability related to
timber and timberlands except for $11 million. The $11 million
deferred income tax liability related to the book-tax basis
difference of timber and timberlands that were expected to be sold,
and subject to, the built-in gains tax during the ten-year period
ending October 6, 2011. During the period October 6, 2001
to December 31, 2008, the $11 million deferred income tax
liability was reduced by $5 million due to a remeasurement of the
amount of deferred income taxes needed and by $2 million due to the
payment or accrual of tax in connection with sales of timberlands
subject to the built-in gains tax.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">At December 31, 2008, it was
estimated that Plum Creek needed a deferred tax liability of
approximately $4 million based on projected timberland sales
subject to the built-in gains tax for the period January 1,
2009 to October 6, 2011, and Plum Creek’s ability to
successfully reinvest proceeds in like-kind properties. During the
first quarter of 2009, because of a change in tax law it is
estimated that Plum Creek needs a deferred tax liability of $1
million in connection with expected sales of timberlands that are
subject to the built-in gains tax. Therefore, in accordance with
the remeasurement requirements of Statement of Financial Accounting
Standards No. 109, <i>Accounting for Income Taxes</i>, the
deferred tax liability was reduced by $3 million during the first
quarter of 2009. Furthermore in the first quarter of 2009, because
of the change in tax law $5 million of tax expense related to
built-in gains that had been accrued in 2008 was
reversed.</font></p>
</div>
-23000000
-4000000
-17000000
-48000000
47000000
<div>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b>Note 3. Inventory</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">Inventories, accounted for using the
lower of average cost or market, consisted of the following
(in millions):</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
<font size="+0"> </font></p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="78%"></td>
<td valign="bottom" width="7%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="7%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>June 30, 2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1">December 31, 2008</font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Raw Materials (primarily
logs)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>8</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">23</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Work-In-Process</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>2</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">3</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Finished Goods</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>31</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">36</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
</tr>
<tr>
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>41</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">62</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Supplies</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>12</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">12</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Total</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>53</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">74</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
</tr>
</tbody>
</table>
</div>
346000000
-417000000
-28000000
423000000
189000000
212000000
<div>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b>Note 1. Basis of
Presentation</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b><i>General.</i></b> Plum Creek
Timberlands, L.P. is a Delaware Limited Partnership and a
wholly-owned subsidiary of Plum Creek Timber Company, Inc. Plum
Creek Timber Company, Inc. (“Parent”) is a Delaware
Corporation and real estate investment trust, or
“REIT”. References herein to “the Operating
Partnership,” “we,” “us,” or
“our” relate to Plum Creek Timberlands, L.P. and all of
its wholly-owned consolidated subsidiaries; references to
“Plum Creek” relate to Plum Creek Timber Company, Inc.
and all of its wholly-owned consolidated subsidiaries.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">At June 30, 2009, the Operating
Partnership owned and managed approximately 7.2 million acres
of timberlands in the Northwest, Southern, and Northeast United
States, and owned and operated eight wood product conversion
facilities in the Northwest United States. Included in the
7.2 million acres are about 1.5 million acres of higher
and better use timberlands, which are expected to be sold and/or
developed over approximately the next 15 years for recreational,
conservation or residential purposes. In addition, the Operating
Partnership has approximately 250,000 acres of non-strategic
timberlands, which are expected to be sold over the next five
years. In the meantime, all of these timberlands continue to be
used productively in our business of growing and selling
timber.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">The consolidated financial statements of
the Operating Partnership include the accounts of Plum Creek
Timberlands, L.P. and its subsidiaries. The Operating Partnership
is 100% owned by the Parent. The Parent has no assets or
liabilities other than its ownership interests in Plum Creek
Timberlands, L.P. and Plum Creek Ventures I, LLC (“PC
Ventures”), a 100% owned subsidiary. Plum Creek Timber
Company, Inc. has no operations other than its investment in these
subsidiaries and transactions in its own equity, such as the
issuance and/or repurchase of common stock and the receipt of
proceeds from stock option exercises. Intercompany transactions and
accounts between Plum Creek Timberlands, L.P. and its subsidiaries
have been eliminated in consolidation. All transactions are
denominated in United States dollars.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">Plum Creek Timber Company, Inc. 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 Operating Partnership
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, and the development and/or sale of
some of our higher and better use timberlands. The Operating
Partnership’s tax provision includes the tax expense and/or
benefit associated with Plum Creek’s taxable REIT
subsidiaries, as well as any tax expense and/or benefit
attributable to the REIT. The effective tax rate for the Operating
Partnership is lower than the federal statutory corporate rate due
to Plum Creek’s status as a REIT.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">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.
These interim consolidated financial statements in this Form 10-Q
should be read in conjunction with the audited consolidated
financial statements of Plum Creek Timberlands, L.P. for the three
years ended December 31, 2008, which were included on Form
10-K of Plum Creek Timber Company, Inc. and filed with the SEC on
February 27, 2009, and which include a summary of significant
accounting policies of the Operating Partnership. 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.</font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font></p>
<!--##PBStart##-->
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b>New Accounting Pronouncements
(Adopted during 2009)</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b><i>SFAS No. 165.</i></b> In May
2009, the Financial Accounting Standards Board (“FASB”)
issued SFAS No. 165, <i>Subsequent Events</i> (“SFAS
No. 165”). SFAS No. 165 establishes principles and
requirements for subsequent events and sets forth the period after
the balance sheet date during which management shall evaluate
events or transactions that may occur for potential recognition or
disclosure in the financial statements, the circumstances under
which an entity shall recognize events or transactions occurring
after the balance sheet date in its financial statements, and the
disclosures an entity shall make about events or transactions that
occurred after the balance sheet date. SFAS No. 165 is
effective for interim or annual periods ending after June 15,
2009, and is applied prospectively. The Operating Partnership
adopted SFAS No. 165 in the second quarter of 2009; this
adoption did not have any impact on the Operating
Partnership’s financial condition, results of operations or
cash flows.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">The Operating Partnership has evaluated
subsequent events for recognition or disclosure through the date
these financial statements were issued, August 5, 2009, which is
the date the financial statements were filed with the Securities
and Exchange Commission (“SEC”).</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b><i>SFAS No. 157.</i></b> In
September 2006, the Financial Accounting Standards Board
(“FASB”) issued SFAS No. 157, <i>Fair Value
Measurement</i> (“SFAS No. 157”). SFAS
No. 157 defines fair value, establishes a framework for
measuring fair value in generally accepted accounting principles,
and expands disclosures about fair value measurements, but does not
require any new fair value measurements. SFAS No. 157
supersedes the definition of fair value in most existing
pronouncements under generally accepted accounting principles that
require or permit the use of fair value, including (but not limited
to) business combinations, impairments and exchanges of nonmonetary
assets. SFAS No. 157 established a fair value hierarchy that
prioritizes the inputs to valuation techniques used to measure fair
value. The hierarchy gives the highest priority to unadjusted
quoted prices in active markets for identical assets or liabilities
(Level I measurements) and the lowest priority to unobservable
inputs (Level III measurements).</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">SFAS No. 157 is effective for fiscal
years beginning after November 15, 2007 and interim periods within
those fiscal years. In February 2008, the FASB issued FASB Staff
Position No. FAS 157-2, which delayed the effective date of SFAS
No. 157 for certain non-financial assets and liabilities to fiscal
years beginning after November 15, 2008 and interim periods within
those fiscal years.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">The Operating Partnership adopted SFAS
No. 157 for its financial assets and liabilities in the first
quarter of 2008 and adopted SFAS No. 157 for its non-financial
assets and liabilities in the first quarter of 2009. The adoption
did not result in recognition of a transition adjustment to
retained earnings or have a material impact on the Operating
Partnership’s financial condition, results of operations or
cash flows.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b><i>SFAS No. 141(R).</i></b> In
December 2007, the FASB issued SFAS No. 141 (revised 2007),
<i>Business Combinations</i> (“SFAS No. 141(R)”),
which is a revision of SFAS No. 141. In general, SFAS
No. 141(R) expands the definition of a business and
transactions that are accounted for as business combinations. In
addition, SFAS No. 141(R) generally requires all assets and
liabilities of acquired entities to be recorded at fair value, and
changes the recognition and measurement of related aspects of
business combinations. SFAS No. 141(R) is effective for
business combinations with an acquisition date within fiscal years
beginning on or after December 15, 2008. The standard is
required to be adopted prospectively and early adoption is not
allowed. The Operating Partnership adopted SFAS No. 141(R) in
the first quarter of 2009; this adoption did not have any impact on
the Operating Partnership’s financial condition, results of
operations or cash flows.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b><i>SFAS No. 160.</i></b> In
December 2007, the FASB issued SFAS No. 160, <i>Noncontrolling
Interests in Consolidated Financial Statements, an Amendment of ARB
No. 51</i> (“SFAS No. 160”). In general, SFAS
No. 160 requires that a noncontrolling interest in a
consolidated subsidiary be presented in the consolidated statement
of financial position as a separate component of equity and also
establishes a framework for recognition of changes in control for a
consolidated subsidiary that is not 100% owned. SFAS No. 160
is effective for fiscal years beginning after December 15,
2008 and interim periods within those fiscal years. The standard is
required to be adopted prospectively and early adoption is not
allowed. All consolidated subsidiaries of the Operating Partnership
are wholly-owned; and therefore, the adoption of SFAS No. 160
did not have any impact on the Operating Partnership’s
financial condition, results of operations or cash
flows.</font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font></p>
<!--##PBStart##-->
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b>New Accounting Pronouncements (Not
Yet Adopted)</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b><i>SFAS No. 166.</i></b> In June
2009, the FASB issued SFAS No. 166, <i>Accounting for
Transfers of Financial Assets, an Amendment of FASB Statement
No. 140</i> (“SFAS No. 166”). In general,
SFAS No. 166 amends FASB Statement 140, <i>Accounting for
Transfers and Servicing of Financial Assets and Extinguishment of
Liabilities</i> (“SFAS No. 140”) to address
accounting practices that have developed since the issuance of SFAS
No. 140 that are not consistent with the original intent and
key requirements of that Statement and to address concerns that
many financial assets and related obligations that have been
derecognized should continue to be reported in the financial
statements of the transferors. SFAS No. 166 is effective for
fiscal years beginning after November 15, 2009, for interim
periods within those fiscal years, and for interim and annual
reporting periods thereafter. The Operating Partnership does not
expect the adoption of SFAS No. 166 will have a material
impact on the Operating Partnership’s financial condition,
results of operations or cash flows.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b><i>SFAS No. 167.</i></b> In June
2009, the FASB issued SFAS No. 167, <i>Amendments to FASB
Interpretation No. 46(R)</i> (“SFAS
No. 167”). Among other things, SFAS No. 167 amends
certain guidance for determining whether an entity is a variable
interest entity (“VIE”), requires a qualitative rather
than quantitative analysis to determine the primary beneficiary of
a VIE, requires continuous assessments of whether an enterprise is
the primary beneficiary of a VIE and requires enhanced disclosures
about an enterprise’s involvement with a VIE. SFAS
No. 167 is effective for fiscal years beginning after
November 15, 2009, for interim periods within those fiscal
years, and for interim and annual reporting periods thereafter. The
Operating Partnership is in the process of determining the effect
the adoption of SFAS No. 167 will have on the Operating
Partnership’s financial condition, results of operations or
cash flows.</font></p>
</div>
4000000
1000000
10000000
<div>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b>Note 8. Partners’
Capital</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">The changes in the Operating
Partnership’s capital accounts were as follows during 2009
(in millions):</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
<font size="+0"> </font></p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="68%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>Preferred<br />
Partnership<br />
Interest</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>Partners’<br />
Capital</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font size="+0"><font face="Times New Roman"
size="1"><b>Accumulated</b></font><br />
<font face="Times New Roman" size=
"1"><b>Other</b></font><br /></font><font face="Times New Roman"
size="1"><b>Comprehensive<br />
Income (Loss)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>Total<br />
Partnership<br />
Capital</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2"><b>January 1, 2009</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">790</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">1,603</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">(31</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">2,362</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="4" height="8"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Net Income before Allocation to Series
T-1 Preferred Interest and Partners</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">171</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">171</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Other Comprehensive Income (Loss), net
of tax</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">(2</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">(2</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="+0"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="+0"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Total Comprehensive Income</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">169</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="+0"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="+0"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="4" height="8"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Net Income Allocation to Series T-1
Preferred Interest</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">14</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">(14</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Distributions to Partners (Common
Limited Partnership Interests)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">(156</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">(156</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">) </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Distributions for Series T-1 Preferred
Interest</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">(18</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">(18</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">) </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Capital Contributions from
Parent</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">3</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">3</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="4" height="8"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2"><b>March 31, 2009</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">786</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">1,607</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">(33</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">2,360</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="4" height="8"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Net Income before Allocation to Series
T-1 Preferred Interest and Partners</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>47</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>47</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Other Comprehensive Income (Loss), net
of tax</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>3</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>3</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="+0"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="+0"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Total Comprehensive Income</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>50</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="+0"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="+0"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="4" height="8"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Net Income Allocation to Series T-1
Preferred Interest</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>15</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>(15</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Distributions to Partners (Common
Limited Partnership Interests)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>(69</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>(69</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>) </b></font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Distributions for Series T-1 Preferred
Interest</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>(11</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>(11</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>) </b></font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Capital Contributions from
Parent</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>2</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>2</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="4" height="8"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2"><b>June 30, 2009</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>790</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>1,572</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>(30</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>2,332</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
</tr>
</tbody>
</table>
</div>
28000000
<div>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b>Note 10. Employee Pension
Plans</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">The components of pension cost were as
follows for the <b>quarterly and six-month periods ended
June 30</b> (in millions):</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
 </p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="84%"></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="6"><font face="Times New Roman" size=
"1"><b>Quarter Ended June 30,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1">2008</font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Service Cost</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>2</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">2</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Interest Cost</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>2</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">2</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Expected Return on Plan
Assets</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>(3</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">(2</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">) </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Recognized Actuarial Loss</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>1</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Total Pension Cost</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>2</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">2</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td height="16"></td>
<td colspan="8" height="16"></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="6"><font face="Times New Roman" size=
"1"><b>Six Months Ended June 30,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1">2008</font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Service Cost</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>4</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">4</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Interest Cost</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>4</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">3</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Expected Return on Plan
Assets</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>(4</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">(3</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">) </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Recognized Actuarial Loss</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>1</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Total Pension Cost</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>5</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">4</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
</tr>
</tbody>
</table>
</div>
0
0
431000000
<div>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0">
<tbody>
<tr>
<td valign="top">
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b>Note 5. Property, Plant and
Equipment</b></font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
<font size="+0"> </font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">Property, Plant and Equipment consisted
of the following (in millions):</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 1px">
<font size="+0"> </font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>June 30, 2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1">December 31, 2008</font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Land, Buildings and
Improvements</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>86</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">92</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Machinery and Equipment</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>306</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">310</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>392</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">402</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Accumulated Depreciation</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>(232</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">(225</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Property, Plant and Equipment,
net</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>160</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">177</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">During the first quarter of 2009, the
Operating Partnership conducted an analysis to rationalize and
consolidate its lumber operations. The analysis was performed by
the Operating Partnership due to the significant and sustained
decline in lumber demand along with the Operating
Partnership’s expectations for continued weakness in this
business. As a result of this analysis, the Operating Partnership
concluded that certain of its lumber manufacturing assets were
impaired. Consequently, during the first quarter of 2009, the
Operating Partnership recorded an impairment charge of $10 million
related to these lumber manufacturing assets. During the second
quarter of 2008, the Operating Partnership recorded an impairment
charge of $10 million related to its lumber manufacturing assets.
The impairment losses are reflected in the operating income of the
Manufactured Products Segment and included in Cost of Goods Sold
for Manufacturing in the Consolidated Statements of
Income.</font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font></p>
<!--##PBStart##-->
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">The fair value of the impaired assets
was determined by the Operating Partnership using expected future
cash flows discounted at a risk-adjusted rate of interest. See Note
9 of the Notes to Consolidated Financial Statements.</font></p>
</div>
138000000
456000000
742000000
<div>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b>Note 2. Variable Interest
Entities</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">On October 1, 2008, a subsidiary of
the Operating Partnership 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. Following the contribution, Plum Creek Ventures I,
LLC (“PC Ventures”), a 100% wholly-owned subsidiary of
Plum Creek Timber Company, Inc., borrowed $783 million from the
Timberland Venture. PC Ventures used the proceeds from the
borrowing to make a $783 million capital contribution to the
Operating Partnership.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">The Timberland Venture is a variable
interest entity in accordance with FASB Interpretation
No. 46(R), <i>Consolidation of Variable Interest Entities</i>
(“FIN 46(R)”). Besides quarterly interest payments on
the loan by PC Ventures, the Operating Partnership has not provided
financing or other support to the venture. The venture is financed
by a line of credit obtained by the Timberland Venture.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">We are not the primary beneficiary of
the Timberland Venture. The Operating Partnership does not manage
the day-to-day operations of the 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 are not required to
absorb the majority of the expected losses as defined by FIN 46(R).
The common interests are required to absorb losses based on
positive capital accounts before any losses can be allocated to our
preferred interest, and we own a 9% common interest.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">The carrying amount of the investment in
the venture is $203 million at June 30, 2009 and $199 million
at December 31, 2008, and it is reported in the Consolidated
Balance Sheets as Equity Investment in Timberland Venture. The
increase in the investment is a result of recognizing equity
earnings of $29 million, offset by a preferred cash distribution of
$25 million paid by the Timberland Venture to the Operating
Partnership during the first quarter of 2009. Our maximum exposure
to loss is $203 million, the carrying amount of the investment in
the venture. 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.</font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font></p>
</div>
<div>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b>Note 12. Segment
Information</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">The tables below present information
about reported segments for the <b>quarterly and six-month periods
ended June 30</b> (in millions):</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
 </p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="60%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>Northern<br />
Resources</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>Southern<br />
Resources</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>Real</b></font><br />
<font face="Times New Roman" size="1"><b>Estate</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>Manufactured<br />
Products (A)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>Other</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>Total (B)</b></font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2"><b>Quarter Ended June 30,
2009</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">External Revenues</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>34</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>89</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>78</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>66</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>5</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>272</b></font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Intersegment Revenues</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>1</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>—  </b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>—  </b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>—  </b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>1</b></font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Depreciation, Depletion and
Amortization</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>6</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>13</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>1</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>3</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>—  </b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>23</b></font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Basis of Real Estate Sold</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>29</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>29</b></font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Operating Income (Loss)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>(7</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>23</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>44</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>4</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>64</b></font></td>
</tr>
<tr>
<td height="16"></td>
<td colspan="4" height="16"></td>
<td colspan="3" height="16"></td>
<td colspan="3" height="16"></td>
<td colspan="4" height="16"></td>
<td colspan="3" height="16"></td>
<td colspan="3" height="16"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2"><b>Quarter Ended June 30,
2008</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">External Revenues</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">64</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">128</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">57</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">121</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">6</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">376</font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Intersegment Revenues</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">10</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">10</font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Depreciation, Depletion and
Amortization</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">7</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">16</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">1</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">17</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">41</font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Basis of Real Estate Sold</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">12</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">12</font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Operating Income (Loss)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">7</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">37</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">35</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">(11</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">5</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">73</font></td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font></p>
<!--##PBStart##-->
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="59%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>Northern<br />
Resources</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>Southern<br />
Resources</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>Real</b></font><br />
<font face="Times New Roman" size=
"1"><b>Estate (C)</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>Manufactured<br />
Products (A)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>Other</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>Total (B)</b></font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2"><b>Six Months Ended June 30,
2009</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">External Revenues</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>90</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>172</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>346</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>124</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>10</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>742</b></font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Intersegment Revenues</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>2</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>—  </b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>—  </b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>—  </b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>2</b></font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Depreciation, Depletion and
Amortization</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>13</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>24</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>1</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>17</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b> </b></font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font face=
"Times New Roman" size="2"><b>—  </b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>55</b></font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Basis of Real Estate Sold</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>118</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>118</b></font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Operating Income (Loss)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>(5</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>43</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>214</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>(22</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>9</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>239</b></font></td>
</tr>
<tr>
<td height="16"></td>
<td colspan="4" height="16"></td>
<td colspan="3" height="16"></td>
<td colspan="3" height="16"></td>
<td colspan="4" height="16"></td>
<td colspan="3" height="16"></td>
<td colspan="3" height="16"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2"><b>Six Months Ended June 30,
2008</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">External Revenues</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">143</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">250</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">109</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">226</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">11</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">739</font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Intersegment Revenues</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">25</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">25</font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Depreciation, Depletion and
Amortization</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">17</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">31</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">1</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">24</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">73</font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Basis of Real Estate Sold</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">22</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">22</font></td>
</tr>
<tr>
<td height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="4" height="8"></td>
<td colspan="3" height="8"></td>
<td colspan="3" height="8"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Operating Income (Loss)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">21</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">74</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">68</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">(20</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">10</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">153</font></td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="4%"><font face=
"Times New Roman" size="2"><b>(A)</b></font></td>
<td valign="top" align="left"><font face="Times New Roman" size=
"2">For the six months ended June 30, 2009, and for the
quarter and six months ended June 30, 2008, the Manufactured
Products Segment depreciation, depletion and amortization, and
operating income (loss) include a $10 million lumber manufacturing
assets impairment loss. See Note 5 of the Notes to Consolidated
Financial Statements.</font></td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="4%"><font face=
"Times New Roman" size="2"><b>(B)</b></font></td>
<td valign="top" align="left"><font face="Times New Roman" size=
"2">Consolidated depreciation, depletion and amortization include
unallocated corporate depreciation of $1 million and $2 million for
the quarter and six months ended June 30, 2009, respectively,
and $2 million and $3 million for the quarter and six months ended
June 30, 2008, respectively.</font></td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="4%"><font face=
"Times New Roman" size="2"><b>(C)</b></font></td>
<td valign="top" align="left"><font face="Times New Roman" size=
"2">During 2008, the Operating Partnership negotiated the sale of
310,000 acres in Montana for $489 million, to be closed in three
phases. Proceeds of $150 million from the first phase were received
during the fourth quarter of 2008. Proceeds of $250 million from
the second phase were received during the first quarter of 2009.
The third and final phase is expected to close in 2010. For the six
months ended June 30, 2009, the Real Estate Segment includes
revenue of $250 million and operating income of $162 million
related to the closing of the second phase.</font></td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font></p>
<!--##PBStart##-->
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">A reconciliation of total segment
operating income to income before income taxes is presented below
for the <b>quarterly and six-month periods ended June 30</b>
(in millions):</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
 </p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="80%"></td>
<td valign="bottom" width="8%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="8%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="6"><font face="Times New Roman" size=
"1"><b>Quarter Ended June 30,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1">2008</font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Total Segment Operating
Income</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>64</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">73</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Corporate and Other Unallocated
Expenses</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>(11</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">(16</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">) </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Other Operating Income (Expense),
net</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Operating Income</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>53</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">57</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Equity Earnings from Timberland
Venture</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>14</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Interest Expense, net</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>(23</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">(34</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Income before Income Taxes</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>44</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">23</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td height="16"></td>
<td colspan="8" height="16"></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="6"><font face="Times New Roman" size="1"><b>Six
Months Ended June 30,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1">2008</font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Total Segment Operating
Income</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>239</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">153</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Corporate and Other Unallocated
Expenses</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>(27</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">(30</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">) </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Other Operating Income (Expense),
net</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">3</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Operating Income</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>212</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">126</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Equity Earnings from Timberland
Venture</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>29</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Total Interest Expense, net</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>(47</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">(70</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">) </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Gain on Extinguishment of
Debt</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>1</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Income before Income Taxes</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>195</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">56</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font></p>
</div>
55000000
195000000
<font face="Times New Roman" size="2">Included in this item are the
consolidated financial statements relate 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 April of 2009
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, 2009, Plum Creek Timberlands, L.P. has publicly
issued and outstanding $458 million aggregate principal amount of
its 5.875% Senior Notes (debt securities) pursuant to the shelf
registration statement.</font>
0
57000000
0
118000000
-1000000
8000000
262000000
124000000
206000000
128000000
140000000
<table>
<tbody>
<tr>
<td valign="top">
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b>Note 4. Timber and
Timberlands</b></font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
<font size="+0"> </font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2">Timber and Timberlands consisted of the
following (in millions):</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 1px">
<font size="+0"> </font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1"><b>June 30, 2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="Times New Roman" size=
"1">December 31, 2008</font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Timber and Logging Roads, net</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>2,385</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">2,443</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Timberlands</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>1,180</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"> </font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">1,195</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face=
"Times New Roman" size="2">Timber and Timberlands, net</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2"><b>3,565</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="Times New Roman" size=
"2">$</font></td>
<td valign="bottom" align="right"><font face="Times New Roman"
size="2">3,638</font></td>
<td valign="bottom" nowrap="nowrap"><font face="Times New Roman"
size="2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
</tr>
</tbody>
</table>
218000000
225000000
29000000
-29000000
0000849213
pcl:PlumCreekTimberlandsMember
2009-01-01
2009-06-30
0000849213
us-gaap:ParentCompanyMember
2009-01-01
2009-06-30
0000849213
2009-01-01
2009-06-30
0000849213
pcl:PlumCreekTimberlandsMember
2008-01-01
2008-06-30
0000849213
us-gaap:ParentCompanyMember
2008-01-01
2008-06-30
0000849213
pcl:PlumCreekTimberlandsMember
2009-04-01
2009-06-30
0000849213
us-gaap:ParentCompanyMember
2009-04-01
2009-06-30
0000849213
pcl:PlumCreekTimberlandsMember
2008-04-01
2008-06-30
0000849213
us-gaap:ParentCompanyMember
2008-04-01
2008-06-30
0000849213
pcl:PlumCreekTimberlandsMember
2008-12-31
0000849213
us-gaap:ParentCompanyMember
2008-12-31
0000849213
pcl:PlumCreekTimberlandsMember
2007-12-31
0000849213
us-gaap:ParentCompanyMember
2007-12-31
0000849213
pcl:PlumCreekTimberlandsMember
2009-06-30
0000849213
us-gaap:ParentCompanyMember
2009-06-30
0000849213
pcl:PlumCreekTimberlandsMember
2008-06-30
0000849213
us-gaap:ParentCompanyMember
2008-06-30
0000849213
us-gaap:ParentCompanyMember
2009-07-31
shares
iso4217:USD
iso4217:USD
shares