The Rising Influence of Rising Affluence

[DewDiligence]

PCL’s 4Q09 results are consistent with my $53/sh assessment of fair value, as described in the prologue of #msg-43004163.

Expected land sales in 2010 are $350-370M derived from approximately 160K acres, which works out to $2,250/acre. This is somewhat higher than PCL’s typical yield from land sales because the property to be sold in 2010 is weighted toward recreational use.

Management said on the 4Q09 CC that the average cost basis of the land to be sold in 2010 is 35%, which implies that the selling price will be roughly 3x book value, consistent with my calculations in #msg-43004163. (Note that as a REIT, PCL pays no capital-gains taxes on its land sales.)

PCL’s 4Q09 PR:
http://finance.yahoo.com/news/Plum-Creek-Reports-Results-bw-2955097310.html?x=0&.v=1

Transcript of 4Q09 CC:
http://seekingalpha.com/article/185880-plum-creek-timber-co-inc-q4-2009-earnings-call-transcript