The two mills, located in Joyce, LA and Huttig, AK, have thecapacity to produce 300 million board feet of lumber per year. Aspart of the transaction, Plum Creek will enter a 15-year renewablefiber supply agreement to provide logs from its surroundingtimberlands to the facilities at market prices.

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In July, Plum Creek, the fourth largest timberland owner in thenation, announced plans to merge with the Timber Co., a separateoperating group of Georgia-Pacific Corp. The merger will create thesecond largest timberland owner in the US, with approximately 7.9million acres. Negotiations are on schedule for closing the mergerin the first quarter of 2001.

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This morning, Plum Creek reported third quarter 2000 earnings of$9.5 million, or 14 cents a share. Third quarter 1999 earnings were$46.1 million, or 73 cents a share, which included a one-time taxbenefit of $14.0 million or $0.22 per share.

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Earnings for the first nine months of 2000 were $111.1 million,or $1.61 per share, while earnings for the same period in 1999 were$99.9 million, or $1.59 per share/unit, including the cumulativeeffect from an accounting change. Plum Creek's quarterly dividendwill be announced on Oct. 17, following the company's board ofdirectors meeting.

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"Our third quarter financial results were below our ownexpectations for several reasons," Plum Creek President and CEORick R. Holley said in a prepared statement. "Lumber and plywoodmarkets declined significantly during the quarter due to excessproduction industry-wide and the impact of slowing housing starts.In addition, our operations in northwest Montana and Idaho weresignificantly curtailed due to the worst fire season in the regionin 50 years. Although the fire damage to our resource base wasimmaterial, the combination of the oversupplied markets and unusualfire restrictions affected the results."

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To optimize performance in this environment, Holly says thecompany curtailed lumber and plywood capacity, took actions tominimize fire damage to our timberlands, and reduced costs andcapital expenditures "where appropriate."

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