PLUM CREEK FINANCIAL MODEL

PLUM CREEK FINANCIAL MODEL Discussion Paper No. 2 Open Space Institute Industrial Economics, Inc. DRAFT -- 15 March 2006 EXECUTIVE SUMMARY The Plum Creek financial model provides a framework for analyzing the financial value to Plum Creek's shareholders of the company's lake concept plan development proposal for the Moosehead Lake area in Maine, as well as possible alternatives to that proposal. The intent of the model is to give stakeholders in the ongoing development review process a tool for evaluating whether alternative proposals can yield financially attractive returns for Plum Creek shareholders while improving conservation outcomes. To illustrate the use of the model, we run two scenarios and present the results here. The first scenario comprises the mid-point of the baseline build-out scenario presented in Discussion Paper No. 1: "Baseline Development Scenario for the Plum Creek Moosehead Project Lands." The second scenario relies upon the assumptions presented in Plum Creek's April 2005 "Moosehead Lake Region Resource Plan." By comparing the results of the two model runs, we provide an estimate of the incremental value to Plum Creek shareholders of LURC approval of the proposed plan. Under the assumption that the baseline scenario for developing its lands around Moosehead Lake represents the company's next-best alternative to the April 2005 proposed concept plan, the value to Plum Creek of concept plan approval would be $36 million, which is the difference between the estimated value for the April 2005 plan ($86 million) and the value of the baseline build-out scenario ($50 million). This difference can be interpreted as the maximum reduction in development cash flows, in the form of either scaled-back development or increased conservation commitments, that Plum Creek would be willing to accept before giving up on the concept plan and reverting to a baseline-type strategy. Along with a detailed discussion of the model, including several important caveats regarding the assumptions employed in its development thus far, this paper contains technical appendices describing the model inputs and calculations, and full print-outs of the example model scenarios. These are draft discussion papers and are being revised as we receive input on their content. We encourage you to provide us with comments and suggestions on the papers and to indicate your interest in receiving updates by emailing Peter Howell at phowell@osiny.org. We will post revised versions on this website in April. DRAFT 15 March 2006 INTRODUCTION In April 2005, Plum Creek Timber Company proposed a comprehensive development project covering 426,000 acres in the Moosehead Lake region of northwestern Maine. The project, as originally submitted to Maine's Land Use Regulatory Commission (LURC), envisioned 975 second house lots and two resorts, as well as sporting camps, campgrounds, and affordable housing and mill sites. In conjunction with this development, Plum Creek proposed various conservation measures, including trail easements, working forest restrictions, and permanent shorefront conservation. Because of its ambitious scale and potential impacts, Plum Creek's proposal engendered significant public debate. LURC held a series of meetings on the proposal during the summer of 2005 at which it became clear that the public's views of the project are quite polarized, with economic development interests at one extreme and conservation groups at the other. Plum Creek is currently revising its proposal to address public comments and concerns. The Open Space Institute (OSI) -- sponsor of the Northern Forest Protection Fund (NFPF), which has provided substantial financial support for Maine conservation purchases in recent years -- is committed to playing a constructive role in helping to shape the future development in the Moosehead region. OSI's goal is to develop rigorous and objective financial and economic analysis of Plum Creek's proposals and alternatives put forward by other stakeholders. OSI is collaborating with the Margaret Chase Smith Center at the University of Maine in Orono and with Industrial Economics, Inc. (IEc) of Cambridge, Massachusetts to provide tools and analyses informing the public policy debate on Plum Creek's proposal. The Smith Center is assisting with technical review of the work and sponsoring outreach activities. IEc is responsible for the design and implementation of the financial model, with land use planning support from Jerry Bley of Creative Conservation, Inc. and real estate appraisal from Mike Moniz (Certified General Appraiser). This discussion paper, the second in OSI's series addressing the Plum Creek proposal, describes the Plum Creek financial model. The model provides a framework for analyzing the financial value to Plum Creek's shareholders of the company's Moosehead development proposal as well as possible alternatives. OSI's intent is to give stakeholders a tool for evaluating whether alternative development proposals can yield financially attractive returns for Plum Creek shareholders while improving conservation outcomes. The remainder of this discussion paper is organized into four sections: • • • • Status of Plum Creek's Proposal -- a brief overview of the proposed development, the regulatory process and the status of Plum Creek's plans. Financial Modeling Approach -- describes the overall framework, key inputs and outputs, and model caveats, limitations and uncertainties. Example Model Scenario and Results -- illustrates the modeling approach through analysis of the financial impacts of the April 2005 proposed plan. Future Applications of the Model -- discusses how stakeholders might use the model to inform analyses of alternative development/conservation scenarios. OSI and the Margaret Chase Smith Center will sponsor two workshops on the model in March 2006 for technical reviewers and key stakeholders. 2 DRAFT 15 March 2006 STATUS OF THE PLUM CREEK PROPOSAL In April 2005, Plum Creek submitted its proposed Moosehead development plan to LURC. The primary element of the plan was a proposal to create up to 975 residential lots over a 10- to 15-year period. The development would be comprised of 575 shorefront lots and 400 back lots located around 18 lakes and ponds. In addition, Plum Creek would donate up to 100 acres for affordable housing in the region. The development proposal also included: • • • • • 3 commercial sites for campgrounds, storage facilities, and/or a small store (600 acres); a 1,000 acre commercial industrial site; a 3,000 acre nature-based tourist facility located at Lily Bay; a 500 acre area for a lodge facility on Brassua Lake; and 80 acres for development of new sporting camps or remote recreational cabins. Plum Creek's plan also proposed a variety of conservation measures. These would include a 30-year working forest easement on 382,000 acres, renewable at the discretion of LURC; permanent conservation easements on 180 miles of shoreline; and 55.5 miles of permanent hiking trail easements and 71.3 miles of snowmobile trail easements. Plum Creek is currently revising its April 2005 plan, and a modified proposal is expected in Spring 2006. FINANCIAL MODELING APPROACH Overview A key premise driving our development of the Plum Creek financial model is that any realistic alternative plan must provide Plum Creek with a fair and reasonable return on its investments in Maine. Only by examining the financial implications of alternative proposals can stakeholders hope to assure outcomes that satisfy both a broad range of public and private interests. To date, however, the public dialogue on the future of the Moosehead region has not addressed these financial issues. Alternative concepts have been floated by both Plum Creek and various conservation groups (e.g., moving the Lily Bay resort and some residential lots to locations closer to Greenville), but there has been no analysis to determine if such approaches will be attractive to Plum Creek. The model presented here is designed to fill this gap by providing a flexible framework for estimating financial returns to Plum Creek under alternative development scenarios. In our view, the starting point for any such analysis is an evaluation of a baseline development scenario. This scenario is an attempt to understand how Plum Creek would proceed in the absence of LURC concept plan approval for a Moosehead project. This baseline is the reference point that we think Plum Creek is most likely to use when evaluating possible modifications to its April 2005 proposal. From a financial perspective, when changes to the concept plan proposal result in significantly lower financial returns relative to the baseline (or some other reasonably likely scenario), we would expect Plum Creek to abandon the large concept plan approach in favor of the less ambitious, more piecemeal baseline approach. Baseline issues are addressed in detail in OSI's first Plum Creek discussion paper.1 While it is obviously difficult to predict exactly what Plum Creek would be able to develop absent approval of a concept plan, the primary conclusion of the Baseline Scenario discussion paper is that, barring changes in Discussion Paper No. 1: "Baseline Development Scenario for the Plum Creek Moosehead Project Lands," February 28, 2006 (hereafter "Discussion Paper No. 1"). 1 3 DRAFT 15 March 2006 Maine's existing land use regulations, Plum Creek would likely be able to proceed with a significant amount of development even were it to abandon its efforts to gain LURC approval for a large-scale concept plan. The foundation of the Plum Creek financial model is discounted cash flow (DCF) analysis. The DCF approach is the most widely used and accepted method for evaluating the types of real estate transactions being contemplated by Plum Creek, and we assume that Plum Creek itself uses DCF to evaluate the returns to its development proposals in Maine and elsewhere. The output from the DCF approach is an estimate of the value today of a stream of real estate development costs and property sale revenues stretching out into the future. This method allows consistent comparison of alternative deals that have different time profiles for revenues (cash inflows) and costs (cash outflows). Our model, implemented using Excel™ software, reflects Plum Creek's organization as a real estate investment trust (REIT). For a timber and real estate development company, REIT status confers a variety of tax benefits that can improve financial returns to the shareholders relative to other forms of corporate organization. In practice, however, Plum Creek's REIT status raises a variety of complex tax and operating issues that we need to address in the model in order to provide an accurate estimate of shareholder returns. These issues include U.S. Internal Revenue Service (IRS) requirements that lands being sold for development by Plum Creek first be transferred into a taxable REIT subsidiary (TRS) where income is first taxed at the corporate level (35%) before being distributed to the shareholders as dividends. Our model also takes into account Maine state taxes as well as penalties associated with removing lands from Maine's Tree Growth Tax program. In calculating returns to Plum Creek shareholders, the model considers six primary revenue categories potentially associated with the development proposal. These include land sales by Plum Creek for: • • • • • • residential lots, mill sites, campgrounds, resorts, affordable housing, and sporting camps. In addition, the model can incorporate revenues associated with conservation commitments that are part of the plan, including outright sales of land for conservation purposes and sale of conservation restrictions or easements. We have also incorporated the ability to consider the tax consequences if Plum Creek engages in bargain sales (i.e., sales at prices below market value that could be considered a charitable donation) or donations of conservation lands that might reduce taxable income and thus provide additional benefits to the firm's shareholders. Overall, the model provides a flexible framework for evaluating a range of factors that determine the value of development to Plum Creek. These factors include the location, scale and build-out schedule for development, infrastructure and development costs, sales prices for properties, as well as financial variables such as tax rates and Plum Creek's cost of capital. We also think it important to be clear about what our Plum Creek financial model will not do. We are aware that economic impacts of development, both positive and negative, are a key issue for many stakeholders. Community and conservation groups with whom we have talked stress the importance of considering the economic benefits of alternative development strategies as compared with the Plum Creek plan. We fully recognize the importance of such analyses. Nonetheless, due to resource constraints, the 4 DRAFT 15 March 2006 OSI team has not been able to address these issues. In fact, such an analysis would call for a regional economic modeling approach very different from the financial analytical approach discussed here. Financial Model: Key Inputs, Assumptions and Outputs To estimate the discounted cash flows from residential development, users of the Plum Creek financial model will need to enter data and assumptions for a wide array of variables. These variables fall into three main categories: development-specific parameters, Plum Creek corporate parameters, and external financial and economic factors. Each of these is discussed below. Development Scenario Characteristics For financial modeling purposes, a development scenario is characterized by four primary types of information. First, the location of the development should in most cases be specified. Data on residential development is generally organized in the model around the 57 lakes and ponds on Plum Creek land in the Moosehead region. For each scenario, the number and size of shorefront and back lots must be specified. Second, a development schedule is needed to specify the number of lots expected to be sold in each year, recognizing that sales further in the future will be worth less today to Plum Creek than immediate sales. Third, estimates of current sale prices are needed for the various lot types by location, as well as a property value appreciation rate over time. Fourth, the model provides an option for varying the costs of development infrastructure (e.g., roads, utilities) and marketing. Currently, the model has default values for all these parameters consistent with Plum Creek's April 2005 proposal. For nonresidential development, such as sporting camps and campgrounds, similar information is needed. Corporate Financial and Tax Assumptions The value of the discounted cash flows from development property sales is a direct function of Plum Creek's corporate cost of capital. We developed our estimate for this measure using a weighted-averagecost-of-capital approach that considers Plum Creek's current mix of equity and debt financing. This rate provides a measure of how investors value returns to Plum Creek and is the rate used in all discounting calculations in the model. The estimated rate is 7.0 percent.2 Another factor affecting financial returns is the price used by Plum Creek for internal transfers from the REIT to the real estate TRS. Generally, the higher this internal transfer price, the lower the tax liability on the income received by Plum Creek shareholders. We currently employ a method for calculating the transfer price that applies a scalar to the final sales prices; in this case the scalar is set at 30 percent of current HBU prices.3 The modeling methodology also assumes that development results in a negative financial impact to Plum Creek's cash flows in that the company can no longer harvest timber from a portion of the lands sold for development. We calculate this cash flow offset using county estimates of average timber values per acre. In our discussions with Plum Creek representatives, they indicated their belief that a project-specific discount rate in the range of 15-20 percent would be more appropriate for this analysis given the risk of real estate development. We are continuing our review of this input measure, and will provide further thoughts on the appropriate rate to employ in a future version of this paper. It is likely that we will adjust this transfer-price estimate approach after doing some additional research into Plum Creek’s prior development land sales in Maine. 3 2 5 DRAFT 15 March 2006 External Economic Factors The model requires several assumptions about external economic conditions. An estimate of the future level of annual price inflation in the Maine economy (assumed to be 3 percent) is used to estimate future changes in development and infrastructure costs. We also make the assumption that state and federal tax rates on capital gains and ordinary income will not change in the future. Finally, land that is removed from preferential property tax treatment under Maine's Tree Growth Tax program will be subject to penalties, which we calculate based on assessed values for the lands in question. Assumptions for Conservation Commitments and Resorts The model currently employs a very simplified approach for estimating the value of any conservation commitments. Users must identify the type of conservation commitment (e.g., land or easement donation, market value sale of land, bargain sale of land, easement sales). The user must also specify the area affected. For market value land and easement sales, the user must specify the price per acre. For bargain sales, both the market value and the actual selling price of the land or easement must be specified. Over time, as information on the type of conservation commitments under consideration becomes clearer, we anticipate refining this portion of the model so that it includes some default values for these types of conservation transactions. Resort proposals are a second area where the model provides only a very simplified valuation approach. In the current version, we have specified a price for land sold for resorts that is comparable to market values for other uses. We have made this estimate based on comparable land sales, estimates of the value of permits and other entitlements, and estimates of additional development and infrastructure costs that might be incurred by Plum Creek. Data are not currently available to conduct a more rigorous financial analysis of proposed and potential resorts. Model Results The model results are presented in a table that summarizes major input assumptions and the overall discounted cash flows associated with the development scenario. These cash flows are reported separately for each major component of the development revenue streams (residential house lots, campgrounds, sporting camps, mill sites, affordable housing sites, resorts and payments for conservation). EXAMPLE MODEL SCENARIO AND RESULTS As an example of how the model can be used to estimate the financial implications for Plum Creek of alternative development scenarios, we compared the financial returns to Plum Creek shareholders under a projected baseline scenario with those expected from Plum Creek's April 2005 proposed plan. This section describes the model input assumptions for the two scenarios, reports the results of the analyses, and discusses key uncertainties inherent to the model structure and the input assumptions. Baseline Build-Out Scenario The baseline scenario represents our estimate of what Plum Creek would be able to develop absent the kind of rezoning process envisioned in the concept plan.4 For the residential lots, the baseline assumes that Plum Creek could create lots using existing zoning rules without triggering legislative or regulatory 4 See Discussion Paper No. 1 for more detail. 6 DRAFT 15 March 2006 changes restricting the use of such an approach. For purposes of this example, we also assume in the baseline that Plum Creek would be able to secure approval to develop three campgrounds, three sporting camps, and the mill site even if the company were to abandon the concept plan approach. On the other hand, given the scale of the proposed resorts, we assume that their development would only be feasible under a concept plan approval.5 Finally, the baseline assumes that Plum Creek would not contribute the affordable housing site or conservation easements absent broader concept plan approval. Obviously the baseline requires numerous assumptions, many of which are quite uncertain. What one believes is most likely in this regard has important implications for financial returns to Plum Creek's shareholders. A primary value of the model is that it allows testing of the implications of alternative assumptions. Under any reasonable set of assumptions, however, our analysis suggests that the most important drivers of financial returns in the baseline scenario are the number of residential lots, their location, and the timing of sales. For purposes of this example, we estimate that under current zoning regulations (i.e., two-in-five; adjacency; and class 3 lakes and level 2 subdivisions), Plum Creek could develop anywhere from 447 to 800 residential lots, and the sales of those lots would be spread fairly evenly over the first 25 years of a 30-year development period, with a slight slowdown thereafter. As discussed in Discussion Paper No. 1, we estimate that 303 to 561 of these lots would be shorefront lots (3 acres each) and the remainder would be premium back lots (5-acre lots with scenic views or other amenities). We have not assumed that Plum Creek would develop every legally-feasible back lot because of high infrastructure costs, low lot values, and/or potential interference with on-going forestry activities. To estimate current prices for residential lots, we developed an analysis of recent comparable second home lot sales in the Greenville area. Generally, this analysis indicates that shorefront lots on Moosehead Lake will have the highest sale prices (approximately $200,000 for a 3-acre lot). Back lots at other locations will have the lowest prices ($125,000 for a 5-acre lot). Appendix B provides a summary of the comparable real estate transactions on which these estimates are based. To estimate sale prices for future years, we assume that shorefront lots appreciate in value at 8 percent per year for the first 10 years, and then 4 percent thereafter. We assume that back lots appreciate at 4 percent per year for the entire development period. Table 1 summarizes the assumptions in the mid-point scenario about the location and number of residential lots, the prices assumed for each, and the estimated timing of lot sales. A full printout of the baseline development model input assumptions and output is included as Appendix A-1. Our initial example models the Plum Creek April 2005 plan. For purposes of the baseline scenario, in our view it is possible that a resort development of some sort would be possible, but it would most likely be smaller in scale and located near an existing resort area (e.g., Big Moose). Absent sufficient data to model such a resort and given the small impact its inclusion using current assumptions has on the results, we have assumed no resort development in the baseline. 5 7 DRAFT 15 March 2006 Table 1 Baseline Development Lot Summary 2006 Market Value ($/Lot) Lot Sale Timing (# of lots by year) # of Lots 2006 2011 2016 2021 2026 2031 2036 Lot Location/ Lake or Pond Shorefront (3 acres): $200,000 - Moosehead $150,000 - Other Subtotal Shorefront Back Lots (5 acres): $175,000 - Moosehead $125,000 - Other Subtotal Back Lots TOTAL 73 361 434 139 50 189 623 12 60 72 17 13 30 102 12 60 72 37 1 38 110 10 60 70 24 12 36 106 19 60 79 29 1 30 109 20 53 73 9 6 15 88 0 43 43 19 11 30 73 0 25 25 4 6 10 35 To place an economic value on the baseline scenario, we also need to estimate a variety of other economic parameters. One important element is the price at which Plum Creek transfers development land into its real estate TRS. We estimate the transfer price by assuming that the company treats the land as a wholesale block transfer at un-entitled land values. To effect this assumption, we apply an adjustment scalar to the year zero HBU price (which is based on an appraisal). As an example, for a shorefront lot on Moosehead Lake with a 2011 projected sales price of approximately $267,645, the transfer price in 2006 would be approximately $60,000 (see Table 2). This transfer price reflects the removal of the 8 percent per year appreciation in property value that we assume occurs while the land is held in the TRS prior to sale, with the result (i.e., the $200,000 HBU value in 2006) multiplied by the 30percent adjustment scalar. We also need to correctly account for a variety of taxes in order to estimate Plum Creek shareholder returns. Almost all land transfers are taxed by Maine. This Land Transfer Tax is calculated based on the transfer (or sale) price, and is split between the seller (i.e., the REIT, in this example) and the buyer (i.e., the TRS, in this example).6 For purposes of estimating cash flows, both Maine State and IRS rules permit Plum Creek to defer the related taxes until the year when the lot is sold (2011 in this example). In addition, the Tree Growth Tax penalty is estimated as 20 percent of the difference between the valuation of the land for timber and the assessed value of the land when it is sold (with assessed values being much lower than HBU sales values in almost all cases). Finally, we similarly compute the taxable income at the TRS based on the HBU sale to a developer after subtracting all of the Maine taxes (including the Tree Growth Tax penalty) and the development and infrastructure expenses, with the balance being taxed at the marginal Federal level (35 percent). Table 2 shows a schematic of the various tax and cash flow calculations. The Land Transfer Tax is calculated by rounding the transfer/sales price up to the nearest $500.00, then dividing by $500.00, and then multiplying the result by $2.20. The resulting tax is split 50/50 between the seller and the buyer. 6 8 DRAFT 15 March 2006 Table 2 EXAMPLE REIT LAND TRANSFER AND SALE 3-Acre Shorefront Lot on Moosehead Lake Annual Inflation $600 1998 REIT Acquisition Cost Trees Land HBU Price: $200,000 2006 6% $267,645 2011 =====> Transfer to TRS (installment sale) =====> HBU Sale to Developer $375 $267,270 $267,645 ($34,778) Total PD&M 30% $375 $225 $600 $375 $199,625 $200,000 ($30,000) $60,000 3% Transfer price (HBU Price * scalar) CASH FLOWS: HBU sales revenues Assessed value of property (% of HBU value) $133,823 50% Maine tree growth tax penalty (based on assessed value change) 20% Lost stumpage value 23% REIT portion of Maine transfer tax on REIT->TRS transfer (deferred) 15.00% P,D&M expenses (at TRS) TRS portion of Maine transfer tax on REIT->TRS transfer (deferred) TRS portion of Maine transfer tax on TRS HBU sale $145,501 Taxable TRS income for Maine income taxes 8.93% Maine income tax on TRS HBU sale $132,508 TRS Ordinary income taxable at Federal rate 35.00% Federal income taxes TRS note repayment to REIT TRS Dividend Cash Flows to S/Hs REIT Dividend Cash Flows to S/Hs TOTAL DIVIDEND CASH FLOWS 7.00% $267,645 ($26,645) ($88) ($132) ($34,778) ($132) ($590) ($12,993) ($46,378) ($60,000) $85,910 $60,000 $145,910 $104,032 Discount Rate DCF Value Total Cash Flows (2006) 9 DRAFT 15 March 2006 A similar process is followed to estimate after-tax cash flows from the sale of land for campgrounds, sporting camps, and the mill site. A summary of the baseline assumptions for these other properties is shown in Table 3. We developed these price estimates based on analysis of recent land sales in the Moosehead region, as discussed further in Appendix B Table 3 Baseline Other Development Sales Development Type Mill Sites Campgrounds Sporting Camps Market Value (2006 $/Acre) $1,000 $10,000 $1,500 TOTAL Lot Size (Acres) 1,000 600 80 1,680 Lot Sale Timing (Acres by Year) 2008 2009 1,000 600 80 1,600 80 Applying these assumptions, we estimate annual after-tax cash flows to Plum Creek in the baseline scenario going 30 years into the future. We assume that Plum Creek uses a discount rate of 7 percent, the company's weighted average cost of capital, to estimate the present value of these cash flows. Baseline Scenario Results Using the assumptions described above, we estimate that the baseline scenario would yield discounted cash flows of $50.0 million (in 2006 dollars) for Plum Creek's shareholders. In laymen's terms, this DCF value can be thought of as the after-tax amount someone would need to pay Plum Creek's shareholders today to get them to forego development if the baseline scenario is the most profitable development option reasonably available to the company. The DCF values for the various components of the development plan are summarized in Table 4, which replicates the related summary page from the model. Table 4 PLUM CREEK DEVELOPMENT in MOOSEHEAD LAKE REGION Contribution to Shareholder Value in 2006 Dollars BASELINE MID-POINT BUILD-OUT Property Sales Development Lot Areas Mill Site Campground(s) Resort(s) Affordable Housing Sporting Camp(s) Conservation Sale(s) Property Descriptions BASELINE MID-POINT BUILD-OUT 1000-acre mill site in Greenville sold in 2008 600 acres of campgrounds; split between counties; 2008 sales None None 80 acres of sporting camps split between counties; 2009 sale; remains in Tree Growth None DCF Value $46.3 $0.5 $3.1 $0.0 $0.0 $0.1 $0.0 $50.0 TOTAL ($ millions) 10 DRAFT 15 March 2006 Plum Creek April 2005 Proposed Resource Plan The primary differences between the baseline scenario and Plum Creek's April 2005 proposal relate to the number and location of residential lots and the development of the Lily Bay and Brassua resorts. The April 2005 plan proposed construction of 975 residential lots located around the 18 lakes and ponds targeted for development by Plum Creek. Plum Creek did not indicate how rapidly development would occur at each location so, for purposes of simplicity, we assume development begins in year 1 and occurs at a uniform rate over 8 years at each of the proposed locations.7 In addition, we subtract from the development total the 28 shorefront lots proposed in the Roaches area, and include these as a conservation sale to the State of Maine.8 The complete schedule is shown in Appendix A-2. Sale prices, development cost, tax, and discounting assumptions are the same as in the baseline scenario; as are cash flows from sales of land for campgrounds, sporting camps, and the mill site. For the resorts, we assume based on a small set of comparable transactions that Plum Creek can sell the land for $1,000 per acre (in 2006 dollars). Absent better information, we assume that both resort properties are sold in 2010. April 2005 Scenario Results Under the assumptions outlined above, we estimate that the April 2005 plan scenario would yield discounted cash flows of $86.4 million for Plum Creek's shareholders, which represents the total value of the development plan to Plum Creek if the concept plan permit were to be approved. The results indicate that concept plan approval increases the value of the residential development to $75.6 million, reflecting a larger number of lots sold and sales taking place sooner. In addition, the resorts and the Roaches sales add an additional $1.7 and $5.4 million, respectively, to Plum Creek's returns. The DCF values for the various components of the April 2005 development plan are summarized in Table 5. Table 5 PLUM CREEK DEVELOPMENT in MOOSEHEAD LAKE REGION Contribution to Shareholder Value in 2006 Dollars PLUM CREEK APRIL 2005 RESOURCE PLAN Property Sales Development Lot Areas Mill Site Campground(s) Resort(s) Affordable Housing Sporting Camp(s) Conservation Sale(s) Property Descriptions PLUM CREEK APRIL 2005 RESOURCE PLAN 1000-acre mill site in Greenville sold in 2008 600 acres of campgrounds; split between counties; 2008 sales Two resorts -- one in Lily Bay one at Brassua; sales in 2010 50-acre site in Greenville; donated in 2008 80 acres of sporting camps split between counties; 2009 sale; remains in Tree Growth Sale to the State of Maine in 2008 of 30,825 acres at "The Roaches" (remains in Tree Growth, and is Transfer-Tax exempt) DCF Value $75.6 $0.5 $3.1 $1.7 $0.0 $0.1 $5.4 $86.4 TOTAL ($ millions) 7 This development-schedule assumption results in sales of between 118 and 119 lots per year over the 8year period. This schedule is consistent with the self-imposed restriction of 125 lots per year that has been indicated by Plum Creek. We have not made any effort at this point to verify whether the local real estate markets are positioned to absorb development at this level. We do not include any cash flows for the working forest areas (labeled "ND/WF Zones") proposed in the April 2005 plan, because our understanding is that these "easements" would be donated. 8 11 DRAFT 15 March 2006 Marginal Value of Concept Plan Approval Under the assumption that the baseline scenario for developing its lands around Moosehead Lake represents the company's next-best alternative to the April 2005 proposed concept plan, the value to Plum Creek of concept plan approval would be $36.4 million ($86.4 million - $50.0 million), which is the difference between the DCF value for the April 2005 plan and the DCF value in the baseline build-out scenario. One interpretation of this difference is that it represents the maximum reduction in development cash flows, in the form of either scaled-back development or increased conservation commitments, that Plum Creek would be willing to accept before giving up on the concept plan and reverting to a baselinetype strategy. FUTURE APPLICATIONS OF THE MODEL The example presented above makes clear that using the Plum Creek financial model requires numerous assumptions about the nature and scale of development, real estate prices, taxes, and more general economic conditions for many years in the future. We have researched values for many of the core inputs to the model, such as land prices, development costs, taxes, inflation, and Plum Creek's cost of capital. Nonetheless, one of the most important factors, the schedule for selling properties, remains highly speculative. The rapidity with which Plum Creek's lands can be sold has a dramatic impact on the financial returns, and there is no crystal ball (or existing study) that provides much certainty about this. Consequently, the DCF values in the example should be viewed as only one of many possible outcomes. Our purpose in developing the model is not to provide a definitive value; rather it is to give stakeholders a tool for understanding the financial implications of different development schemes. As such, we encourage interested stakeholders to become knowledgeable about the model and its inputs. Based on such an understanding, we hope that stakeholders will develop their own scenarios that can be run through the model to better inform the public's views on Plum Creek's proposals. To this end, OSI is available to work closely with stakeholders who would like to analyze alternative development scenarios. For each requested scenario, we will estimate DCF values and create detailed model output tables. We intend to make these results publicly available along with our own discussion/analysis of the input assumptions and results. OSI is planning a stakeholder workshop sponsored by the Margaret Chase Smith Center in March 2006 to discuss the model and its potential future uses. At this time, we will illustrate additional features of the model, which may be useful in evaluating the full suite of alternative scenarios currently under discussion. In addition, when Plum Creek releases its revised Moosehead proposal, we will conduct a detailed DCF analysis of the modified plan. For further information, please contact: Tom Walker, Industrial Economics, Incorporated -- 617 354 0074 Ann Heller, Industrial Economics, Incorporated -- 617 354 0074 Peter Howell, Open Space Institute -- 212 629 3981 12 DRAFT 15 March 2006 APPENDIX A-1 BASELINE BUILD-OUT Plum Creek Financial Model Input and Output Detail *** DRAFT *** PLUM CREEK DEVELOPMENT in MOOSEHEAD LAKE REGION Contribution to Shareholder Value in 2006 Dollars BASELINE MID-POINT BUILD-OUT Property Sales Development Lot Areas Mill Site Campground(s) Resort(s) Affordable Housing Sporting Camp(s) Conservation Sale(s) Property Descriptions BASELINE MID-POINT BUILD-OUT 1000-acre mill site in Greenville sold in 2008 600 acres of campgrounds; split between counties; 2008 sales None None 80 acres of sporting camps split between counties; 2009 sale; remains in Tree Growth None DCF Value $46.3 $0.5 $3.1 $0.0 $0.0 $0.1 $0.0 $50.0 TOTAL ($ millions) Appendix A-1 Page 1 of 18 3/15/2006 *** DRAFT *** DEVELOPMENT LOT AREAS Valuation Date/Base Year Marginal Income Tax Rate Maine Tree Growth Penalty Maine Income Tax Rate Discount Rate y-Specific Inputs Lot Type BASELINE MID-POINT BUILD-OUT 7/1/2006 35% 20% 8.93% 7.0% Permitting, Development & Marketing (P,D&M) Costs (% HBU Price) PV After-Tax Cash Flow = $46.3 mm, with HBU Inflation Rates 623 Development Lots Sold 2005 Tree Growth Valuation/Stumpage ($/Acre) Description Shorefront Back Lots Other Standard Lot Size (Acres) PD&M Inflation Rate Transfer Price Scalar (%HBU) Yrs 1-5 Yrs 6-10 Yrs 11-30 Harvest Area Lost on Sale (Acres) County Both Piscataquis Somerset $ $ $ Hardwood Mixed Woods Softwood 2005 Property Tax Rates by County 2005 Assessed Value % of HBU 1 2 3 3.0 5.0 1.0 15% 15% 15% 3.0% 3.0% 3.0% 30% 30% 30% 8.0% 4.0% 3.0% 8.0% 4.0% 3.0% 4.0% 4.0% 3.0% 23% 100% 50% 116.00 112.70 119.30 $ $ $ 121.55 118.10 125.00 $ $ $ 134.15 138.90 129.40 0.811% 0.841% 0.780% 50.0% 50.0% 50.0% DEVELOPMENT AREAS HBU Acres Sold for Dev't Site Lakes & Ponds Lot Type Township County Forest Type Tree Growth Valuation ($/Acre) 2005 Property Tax 2005 Assessed Value # Lots to be Sold for Cost Basis per Rate % Development Acre Total Cost Basis Year 0 Transfer Price per Acre Year 0 PD&M Year 0 HBU Price per Acre HBU Inflation PD&M Inflation Harvest Area Lost (% Acres Sold) Moosehead Lake Moosehead Lake Moosehead Lake Moosehead Lake Other Lakes/Ponds Other Lakes/Ponds Other Lakes/Ponds Other Lakes/Ponds 1 1 2 2 1 1 2 2 Various/Shorefront Various/Shorefront Various/Back Lots Various/Back Lots Various/Shorefront Various/Shorefront Various/Back Lots Various/Back Lots Somerset Piscataquis Somerset Piscataquis Somerset Piscataquis Somerset Piscataquis Mixed Woods Mixed Woods Mixed Woods Mixed Woods Mixed Woods Mixed Woods Mixed Woods Mixed Woods $122 $122 $118 $118 $122 $122 $118 $118 0.780% 0.841% 0.780% 0.841% 0.780% 0.841% 0.780% 0.841% 50.000% 50.000% 50.000% 50.000% 50.000% 50.000% 50.000% 50.000% 30 43 77 62 146 215 43 7 623 $200 $200 $200 $200 $200 $200 $200 $200 $18,000 $25,800 $77,000 $62,000 $87,600 $129,000 $43,000 $7,000 $20,000 $20,000 $10,500 $10,500 $15,000 $15,000 $7,500 $7,500 $10,000 $10,000 $5,250 $5,250 $7,500 $7,500 $3,750 $3,750 $66,667 $66,667 $35,000 $35,000 $50,000 $50,000 $25,000 $25,000 Total = 90 129 385 310 438 645 215 35 2,247 8.0% 8.0% 4.0% 4.0% 8.0% 8.0% 4.0% 4.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 23.5% 23.5% 100.0% 100.0% 23.5% 23.5% 100.0% 100.0% Appendix A-1 Page 2 of 18 3/15/2006 *** DRAFT *** BASELINE MID-POINT BUILD-OUT HBU Inflation Factors 1 2 3 0 1.00 1.00 1.00 1 1.08 1.04 1.03 2 1.17 1.08 1.06 3 1.26 1.12 1.09 4 1.36 1.17 1.13 5 1.47 1.22 1.16 6 1.59 1.27 1.19 7 1.71 1.32 1.23 8 1.85 1.37 1.27 9 2.00 1.42 1.30 10 2.16 1.48 1.34 11 2.25 1.54 1.38 12 2.34 1.60 1.43 13 2.43 1.67 1.47 14 2.53 1.73 1.51 15 2.63 1.80 1.56 16 2.73 1.87 1.60 17 2.84 1.95 1.65 18 2.95 2.03 1.70 19 3.07 2.11 1.75 20 3.20 2.19 1.81 21 3.32 2.28 1.86 22 3.46 2.37 1.92 23 3.59 2.46 1.97 24 3.74 2.56 2.03 25 3.89 2.67 2.09 26 4.04 2.77 2.16 27 4.21 2.88 2.22 28 4.37 3.00 2.29 29 4.55 3.12 2.36 30 4.73 3.24 2.43 Shorefront Back Lots Other DEVELOPMENT SCHEDULE (% Developed and Sold in Years 1 - 30) Lot Type Total Check Site Lakes & Ponds 0 33% 5% 21% 2% 17% 16% 28% 14% 1 2 3 4 5 0% 28% 14% 42% 17% 16% 0% 14% 6 7 8 9 10 33% 0% 27% 5% 17% 16% 26% 14% 11 12 13 14 15 33% 21% 21% 21% 17% 16% 0% 14% 16 17 18 19 20 0% 47% 8% 5% 12% 16% 12% 14% 21 22 23 24 25 0% 0% 8% 21% 7% 15% 23% 14% 26 27 28 29 30 0 0 0 0 0 0 0 0 Moosehead Lake 1 Moosehead Lake 1 Moosehead Lake 2 Moosehead Lake 2 Other Lakes/Ponds 1 Other Lakes/Ponds 1 Other Lakes/Ponds 2 Other Lakes/Ponds 2 Total Lots 623 0% 100% 0% 100% 1% 100% 5% 100% 12% 100% 3% 100% 12% 100% 14% 100% 102 0 0 0 0 110 0 0 0 0 106 0 0 0 0 109 0 0 0 0 88 0 0 0 0 73 0 0 0 0 35 Appendix A-1 Page 3 of 18 3/15/2006 *** DRAFT *** DEVELOPMENT LOTS: REIT to TRS TRANSFER BASELINE MID-POINT BUILD-OUT Lot Type 7/1/2006 Acres Transferred REIT to TRS 0 0 0 0 0 0 0 0 Site Lakes & Ponds Cost Basis per Acre 200 200 200 200 200 200 200 200 Total Cost Basis 18,000 25,800 77,000 62,000 87,600 129,000 43,000 7,000 $449,400 Transfer Price per Acre 20,000 20,000 10,500 10,500 15,000 15,000 7,500 7,500 Total Transfer Price 1,800,000 2,580,000 4,042,500 3,255,000 6,570,000 9,675,000 1,612,500 262,500 $29,797,500 Tree Growth Valuation per Acre 122 122 118 118 122 122 118 118 Total Tree Growth Valuation 10,940 15,680 45,469 36,611 53,239 78,400 25,392 4,134 $269,863 Stumpage Lost on Transfer 2,568.288 3,681 45,469 36,611 12,499 18,406 25,392 4,134 $148,759 Maine Transfer Maine Transfer Property Tax Tax (50% REIT) Tax (50% TRS) Rate (Deferred) (Deferred) 0.780% 0.841% 0.780% 0.841% 0.780% 0.841% 0.780% 0.841% 3,960 5,676 8,894 7,161 14,454 21,285 3,548 578 $65,555 3,960 5,676 8,894 7,161 14,454 21,285 3,548 578 $65,555 0 0 0 0 0 0 0 0 Moosehead Lake Moosehead Lake Moosehead Lake Moosehead Lake Other Lakes/Ponds Other Lakes/Ponds Other Lakes/Ponds Other Lakes/Ponds 1 1 2 2 1 1 2 2 Totals 90 129 385 310 438 645 215 35 2,247 Appendix A-1 Page 4 of 18 3/15/2006 *** DRAFT *** DEVELOPMENT LOTS CASH FLOWS BASELINE MID-POINT BUILD-OUT ACRES SOLD FOR DEVELOPMENT 0 Moosehead Lake 1 0 0 Moosehead Lake 1 0 0 Moosehead Lake 2 0 0 Moosehead Lake 2 0 0 Other Lakes/Ponds 1 0 0 Other Lakes/Ponds 1 0 0 Other Lakes/Ponds 2 0 0 Other Lakes/Ponds 2 0 Subtotal Acres Sold for Development ASSESSED VALUE AT SALE DATE 0 Moosehead Lake 1 0 Moosehead Lake 1 0 Moosehead Lake 2 0 Moosehead Lake 2 0 Other Lakes/Ponds 1 0 Other Lakes/Ponds 1 0 Other Lakes/Ponds 2 0 Other Lakes/Ponds 2 Subtotal Assessed Value at Sale Date TREE GROWTH TAX PENALTY 0 Moosehead Lake 1 0 Moosehead Lake 1 0 Moosehead Lake 2 0 Moosehead Lake 2 0 Other Lakes/Ponds 1 0 Other Lakes/Ponds 1 0 Other Lakes/Ponds 2 0 Other Lakes/Ponds 2 Subtotal Tree Growth Tax Penalty LOST STUMPAGE VALUE 0 Moosehead Lake 1 0 Moosehead Lake 1 0 Moosehead Lake 2 0 Moosehead Lake 2 0 Other Lakes/Ponds 1 0 Other Lakes/Ponds 1 0 Other Lakes/Ponds 2 0 Other Lakes/Ponds 2 Subtotal Lost Stumpage Value 0 7/1/2006 30 6 80 5 75 105 60 5 366 1,000,000 200,000 1,400,000 87,500 1,875,000 2,625,000 750,000 62,500 8,000,000 198,800 39,760 276,800 17,300 372,000 520,800 147,600 12,300 $1,585,360 856 171 9,448 591 2,140 2,996 7,086 591 $23,879 1 7/1/2007 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 2 7/1/2008 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 3 7/1/2009 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 4 7/1/2010 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 5 7/1/2011 0 36 55 130 75 105 0 5 406 0 1,763,194 1,171,028 2,767,885 2,754,990 3,856,986 0 76,041 12,390,125 0 351,199 232,006 548,377 547,998 767,197 0 15,008 $2,461,785 0 1,027 6,496 15,353 2,140 2,996 0 591 $28,603 6 7/1/2012 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 7 7/1/2013 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 8 7/1/2014 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 9 7/1/2015 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 10 7/1/2016 30 0 105 15 75 105 55 5 390 2,158,925 0 2,719,949 388,564 4,047,984 5,667,178 1,017,668 92,515 16,092,784 430,585 0 539,790 77,113 806,597 1,129,236 201,334 18,303 $3,202,957 856 0 12,401 1,772 2,140 2,996 6,496 591 $27,251 11 7/1/2017 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 12 7/1/2018 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 13 7/1/2019 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 14 7/1/2020 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 15 7/1/2021 30 27 80 65 75 105 0 5 387 2,626,662 2,363,996 2,521,321 2,048,573 4,924,992 6,894,989 0 112,559 21,493,092 524,132 471,719 501,064 407,115 981,998 1,374,798 0 22,312 $4,283,138 856 770 9,448 7,677 2,140 2,996 0 591 $24,478 16 7/1/2022 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 Appendix A-1 Page 5 of 18 3/15/2006 *** DRAFT *** DEVELOPMENT LOTS CASH BASELINE MID-POINT BUIL ACRES SOLD FOR DEVELOP 0 Moosehead Lake 0 Moosehead Lake 0 Moosehead Lake 0 Moosehead Lake 0 Other Lakes/Ponds 0 Other Lakes/Ponds 0 Other Lakes/Ponds 0 Other Lakes/Ponds Subtotal Acres Sold for Dev ASSESSED VALUE AT SALE 0 Moosehead Lake 0 Moosehead Lake 0 Moosehead Lake 0 Moosehead Lake 0 Other Lakes/Ponds 0 Other Lakes/Ponds 0 Other Lakes/Ponds 0 Other Lakes/Ponds Subtotal Assessed Value at TREE GROWTH TAX PENAL 0 Moosehead Lake 0 Moosehead Lake 0 Moosehead Lake 0 Moosehead Lake 0 Other Lakes/Ponds 0 Other Lakes/Ponds 0 Other Lakes/Ponds 0 Other Lakes/Ponds Subtotal Tree Growth Ta LOST STUMPAGE VALUE 0 Moosehead Lake 0 Moosehead Lake 0 Moosehead Lake 0 Moosehead Lake 0 Other Lakes/Ponds 0 Other Lakes/Ponds 0 Other Lakes/Ponds 0 Other Lakes/Ponds Subtotal Lost Stump 17 7/1/2023 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 18 7/1/2024 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 19 7/1/2025 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 20 7/1/2026 0 60 30 15 54 105 25 5 294 0 6,391,473 1,150,340 575,170 4,314,244 8,388,808 684,726 136,945 21,641,706 0 1,275,895 228,868 114,434 860,689 1,673,562 135,945 27,189 $4,316,581 0 1,712 3,543 1,772 1,541 2,996 2,953 591 $15,107 21 7/1/2027 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 22 7/1/2028 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 23 7/1/2029 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 24 7/1/2030 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 25 7/1/2031 0 0 30 65 30 99 50 5 279 0 0 1,399,564 3,032,389 2,916,076 9,623,052 1,666,148 166,615 18,803,844 0 0 278,713 603,878 582,015 1,920,650 331,230 33,123 $3,749,609 0 0 3,543 7,677 856 2,825 5,905 591 $21,396 26 7/1/2032 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 27 7/1/2033 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 28 7/1/2034 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 29 7/1/2035 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 30 7/1/2036 0 0 5 15 54 21 25 5 125 0 0 283,797 851,392 6,386,135 2,483,497 1,013,562 202,712 11,221,095 0 0 56,559 169,678 1,275,067 495,859 201,712 40,342 $2,239,219 0 0 591 1,772 1,541 599 2,953 591 $8,045 Appendix A-1 Page 6 of 18 3/15/2006 *** DRAFT *** DEVELOPMENT LOTS CASH FLOWS BASELINE MID-POINT BUILD-OUT 0 7/1/2006 1 7/1/2007 2 7/1/2008 3 7/1/2009 4 7/1/2010 5 7/1/2011 6 7/1/2012 7 7/1/2013 8 7/1/2014 9 7/1/2015 10 7/1/2016 11 7/1/2017 12 7/1/2018 13 7/1/2019 14 7/1/2020 15 7/1/2021 16 7/1/2022 REIT to TRS DEFERRED TAXES REIT to TRS Transfer Revenues 0 Moosehead Lake 1 600,000 0 0 Moosehead Lake 1 120,000 0 0 Moosehead Lake 2 840,000 0 0 Moosehead Lake 2 52,500 0 0 Other Lakes/Ponds 1 1,125,000 0 0 Other Lakes/Ponds 1 1,575,000 0 0 Other Lakes/Ponds 2 450,000 0 0 Other Lakes/Ponds 2 37,500 0 Subtotal REIT to TRS Transfer Revenues $4,800,000 $0 MAINE TRANSFER TAX ON REIT-TRS TRANSFER (50% REIT/50% TRS) 0 Moosehead Lake 1 2,640 0 0 Moosehead Lake 1 528 0 0 Moosehead Lake 2 3,696 0 0 Moosehead Lake 2 231 0 0 Other Lakes/Ponds 1 4,950 0 0 Other Lakes/Ponds 1 6,930 0 0 Other Lakes/Ponds 2 1,980 0 0 Other Lakes/Ponds 2 165 0 $21,120 $0 Subtotal Maine Transfer Tax on REIT-TRS transfer (50/50) TRS REVENUE CALCULATIONS HBU Revenues per Acre 0 Moosehead Lake 1 $66,667 $0 0 Moosehead Lake 1 $66,667 $0 0 Moosehead Lake 2 $35,000 $0 0 Moosehead Lake 2 $35,000 $0 0 Other Lakes/Ponds 1 $50,000 $0 0 Other Lakes/Ponds 1 $50,000 $0 0 Other Lakes/Ponds 2 $25,000 $0 0 Other Lakes/Ponds 2 $25,000 $0 $43,716 $0 Weighted Avg. Revenues per Acre TRS Revenues - HBU Sales to Developers 0 Moosehead Lake 1 $2,000,000 $0 0 Moosehead Lake 1 $400,000 $0 0 Moosehead Lake 2 $2,800,000 $0 0 Moosehead Lake 2 $175,000 $0 0 Other Lakes/Ponds 1 $3,750,000 $0 0 Other Lakes/Ponds 1 $5,250,000 $0 0 Other Lakes/Ponds 2 $1,500,000 $0 0 Other Lakes/Ponds 2 $125,000 $0 $0 TOTAL REVENUES $16,000,000 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 0 720,000 577,500 1,365,000 1,125,000 1,575,000 0 37,500 $5,400,000 0 3,168 2,541 6,006 4,950 6,930 0 165 $23,760 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 600,000 0 1,102,500 157,500 1,125,000 1,575,000 412,500 37,500 $5,010,000 2,640 0 4,851 693 4,950 6,930 1,815 165 $22,044 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 600,000 540,000 840,000 682,500 1,125,000 1,575,000 0 37,500 $5,400,000 2,640 2,376 3,696 3,003 4,950 6,930 0 165 $23,760 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $97,955 $42,583 $42,583 $73,466 $73,466 $0 $30,416 $61,035 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $143,928 $0 $51,809 $51,809 $107,946 $107,946 $37,006 $37,006 $82,527 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $175,111 $175,111 $63,033 $63,033 $131,333 $131,333 $0 $45,024 $111,075 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $3,526,387 $0 $2,342,057 $0 $5,535,771 $0 $5,509,980 $0 $7,713,972 $0 $0 $0 $152,082 $0 $24,780,249 $0 $4,317,850 $0 $0 $0 $5,439,898 $0 $777,128 $0 $8,095,969 $0 $11,334,356 $0 $2,035,336 $0 $185,031 $0 $32,185,567 $0 $5,253,325 $0 $4,727,992 $0 $5,042,642 $0 $4,097,146 $0 $9,849,984 $0 $13,789,977 $0 $0 $0 $225,118 $0 $42,986,184 Appendix A-1 Page 7 of 18 3/15/2006 *** DRAFT *** DEVELOPMENT LOTS CASH BASELINE MID-POINT BUIL REIT to TRS DEFERRED TAX REIT to TRS Transfer Revenue 0 Moosehead Lake 0 Moosehead Lake 0 Moosehead Lake 0 Moosehead Lake 0 Other Lakes/Ponds 0 Other Lakes/Ponds 0 Other Lakes/Ponds 0 Other Lakes/Ponds Subtotal REIT to TRS Transfer MAINE TRANSFER TAX ON 0 Moosehead Lake 0 Moosehead Lake 0 Moosehead Lake 0 Moosehead Lake 0 Other Lakes/Ponds 0 Other Lakes/Ponds 0 Other Lakes/Ponds 0 Other Lakes/Ponds Subtotal Maine Transf REIT-TRS transf TRS REVENUE CALCULATIO HBU Revenues per Acre 0 Moosehead Lake 0 Moosehead Lake 0 Moosehead Lake 0 Moosehead Lake 0 Other Lakes/Ponds 0 Other Lakes/Ponds 0 Other Lakes/Ponds 0 Other Lakes/Ponds Weighted Avg. Revenues TRS Revenues - HBU Sales to D 0 Moosehead Lake 0 Moosehead Lake 0 Moosehead Lake 0 Moosehead Lake 0 Other Lakes/Ponds 0 Other Lakes/Ponds 0 Other Lakes/Ponds 0 Other Lakes/Ponds TOTAL RE 17 7/1/2023 18 7/1/2024 19 7/1/2025 20 7/1/2026 21 7/1/2027 22 7/1/2028 23 7/1/2029 24 7/1/2030 25 7/1/2031 26 7/1/2032 27 7/1/2033 28 7/1/2034 29 7/1/2035 30 7/1/2036 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 0 1,200,000 315,000 157,500 810,000 1,575,000 187,500 37,500 $4,282,500 0 5,280 1,386 693 3,564 6,930 825 165 $18,843 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 0 0 315,000 682,500 450,000 1,485,000 375,000 37,500 $3,345,000 0 0 1,386 3,003 1,980 6,534 1,650 165 $14,718 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 0 0 0 0 0 0 0 0 $0 0 0 52,500 157,500 810,000 315,000 187,500 37,500 $1,560,000 0 0 231 693 3,564 1,386 825 165 $6,864 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $213,049 $76,689 $76,689 $159,787 $159,787 $54,778 $54,778 $147,222 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $93,304 $93,304 $194,405 $194,405 $66,646 $66,646 $134,795 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $113,519 $113,519 $236,524 $236,524 $81,085 $81,085 $179,538 $0 $0 $0 $12,782,946 $0 $2,300,679 $0 $1,150,340 $0 $8,628,488 $0 $16,777,616 $0 $1,369,452 $0 $273,890 $0 $43,283,411 $0 $0 $0 $0 $0 $2,799,128 $0 $6,064,778 $0 $5,832,153 $0 $19,246,105 $0 $3,332,295 $0 $333,230 $0 $37,607,688 $0 $0 $0 $0 $0 $567,595 $0 $1,702,784 $0 $12,772,270 $0 $4,966,994 $0 $2,027,123 $0 $405,425 $0 $22,442,191 Appendix A-1 Page 8 of 18 3/15/2006 *** DRAFT *** DEVELOPMENT LOTS CASH FLOWS BASELINE MID-POINT BUILD-OUT 0 7/1/2006 1 7/1/2007 2 7/1/2008 3 7/1/2009 4 7/1/2010 5 7/1/2011 6 7/1/2012 7 7/1/2013 8 7/1/2014 9 7/1/2015 10 7/1/2016 11 7/1/2017 12 7/1/2018 13 7/1/2019 14 7/1/2020 15 7/1/2021 16 7/1/2022 EXPENSES TRS - Permitting, Development & Marketing Expenses per Acre 0 Moosehead Lake 1 $10,000 0 Moosehead Lake 1 $10,000 0 Moosehead Lake 2 $5,250 0 Moosehead Lake 2 $5,250 0 Other Lakes/Ponds 1 $7,500 0 Other Lakes/Ponds 1 $7,500 0 Other Lakes/Ponds 2 $3,750 0 Other Lakes/Ponds 2 $3,750 TRS - PD&M EXPENSES 0 Moosehead Lake 1 $300,000 0 Moosehead Lake 1 $60,000 0 Moosehead Lake 2 $420,000 0 Moosehead Lake 2 $26,250 0 Other Lakes/Ponds 1 $562,500 0 Other Lakes/Ponds 1 $787,500 0 Other Lakes/Ponds 2 $225,000 0 Other Lakes/Ponds 2 $18,750 Total TRS P,D&M Expenses $2,400,000 MAINE TRANSFER TAX ON TRS HBU SALE 0 Moosehead Lake 1 4,400 0 Moosehead Lake 1 880 0 Moosehead Lake 2 6,160 0 Moosehead Lake 2 385 0 Other Lakes/Ponds 1 8,250 0 Other Lakes/Ponds 1 11,550 0 Other Lakes/Ponds 2 3,300 0 Other Lakes/Ponds 2 275 $35,200 Subtotal Maine Transfer Tax on TRS HBU Sale $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 0 0 0 0 0 0 0 0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 0 0 0 0 0 0 0 0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 0 0 0 0 0 0 0 0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 0 0 0 0 0 0 0 0 $0 $0 $11,593 $6,086 $6,086 $8,695 $8,695 $0 $4,347 $0 $417,339 $334,740 $791,205 $652,092 $912,928 $0 $21,736 $3,130,040 0 7,758 5,154 12,179 12,122 16,971 0 336 $54,519 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 0 0 0 0 0 0 0 0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 0 0 0 0 0 0 0 0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 0 0 0 0 0 0 0 0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 0 0 0 0 0 0 0 0 $0 $13,439 $0 $7,056 $7,056 $10,079 $10,079 $5,040 $5,040 $403,175 $0 $740,834 $105,833 $755,953 $1,058,334 $277,183 $25,198 $3,366,511 9,500 0 11,968 1,711 17,811 24,936 4,478 408 $70,811 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 0 0 0 0 0 0 0 0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 0 0 0 0 0 0 0 0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 0 0 0 0 0 0 0 0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 0 0 0 0 0 0 0 0 $0 $15,580 $15,580 $8,179 $8,179 $11,685 $11,685 $0 $5,842 $467,390 $420,651 $654,346 $531,656 $876,357 $1,226,899 $0 $29,212 $4,206,512 11,558 10,402 11,095 9,015 21,670 30,338 0 496 $94,573 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 0 0 0 0 0 0 0 0 $0 Appendix A-1 Page 9 of 18 3/15/2006 *** DRAFT *** DEVELOPMENT LOTS CASH BASELINE MID-POINT BUIL EXPENSES TRS - Permitting, Development 0 Moosehead Lake 0 Moosehead Lake 0 Moosehead Lake 0 Moosehead Lake 0 Other Lakes/Ponds 0 Other Lakes/Ponds 0 Other Lakes/Ponds 0 Other Lakes/Ponds TRS - PD&M EXPENSES 0 Moosehead Lake 0 Moosehead Lake 0 Moosehead Lake 0 Moosehead Lake 0 Other Lakes/Ponds 0 Other Lakes/Ponds 0 Other Lakes/Ponds 0 Other Lakes/Ponds Total TRS P,D&M MAINE TRANSFER TAX ON 0 Moosehead Lake 0 Moosehead Lake 0 Moosehead Lake 0 Moosehead Lake 0 Other Lakes/Ponds 0 Other Lakes/Ponds 0 Other Lakes/Ponds 0 Other Lakes/Ponds Subtotal Maine Tra on TRS 17 7/1/2023 18 7/1/2024 19 7/1/2025 20 7/1/2026 21 7/1/2027 22 7/1/2028 23 7/1/2029 24 7/1/2030 25 7/1/2031 26 7/1/2032 27 7/1/2033 28 7/1/2034 29 7/1/2035 30 7/1/2036 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 0 0 0 0 0 0 0 0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 0 0 0 0 0 0 0 0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 0 0 0 0 0 0 0 0 $0 $0 $18,061 $9,482 $9,482 $13,546 $13,546 $6,773 $6,773 $0 $1,083,667 $284,463 $142,231 $731,475 $1,422,313 $169,323 $33,865 $3,867,336 0 28,123 5,062 2,531 18,983 36,912 3,013 603 $95,226 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 0 0 0 0 0 0 0 0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 0 0 0 0 0 0 0 0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 0 0 0 0 0 0 0 0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 0 0 0 0 0 0 0 0 $0 $0 $0 $10,992 $10,992 $15,703 $15,703 $7,852 $7,852 $0 $0 $329,770 $714,502 $471,100 $1,554,630 $392,583 $39,258 $3,501,844 0 0 6,159 13,343 12,832 42,342 7,332 734 $82,741 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 0 0 0 0 0 0 0 0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 0 0 0 0 0 0 0 0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 0 0 0 0 0 0 0 0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 0 0 0 0 0 0 0 0 $0 $0 $0 $12,743 $12,743 $18,204 $18,204 $9,102 $9,102 $0 $0 $63,716 $191,147 $983,041 $382,294 $227,556 $45,511 $1,893,265 0 0 1,250 3,747 28,100 10,927 4,461 892 $49,376 Appendix A-1 Page 10 of 18 3/15/2006 *** DRAFT *** DEVELOPMENT LOTS CASH FLOWS BASELINE MID-POINT BUILD-OUT CASH FLOW ANALYSIS ($000) Cash Flow Date 7/1/2006 $4,800,000 REIT to TRS Transfer Revenues $16,000,000 HBU Sales Revenues REIT to TRS Transfer Maine Tree Growth tax penalty -$1,585,360 Lost stumpage value -$23,879 Deferred Maine Transfer Tax (REIT) -$10,560 TRS Sale to Developer PD&M Expenses -$2,400,000 Deferred Maine Transfer Tax (TRS) -$10,560 Maine Transfer Tax (HBU Sale) -$35,200 Maine income taxes -$640,181 -$2,285,045 Federal income taxes CASH FLOW FOR DIVIDENDS $9,009,215 Discount Factor where r = PV Dividend Cash Flows 7.0% 1.00000 $9,009,215 $46.3 7/1/2007 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 1.07000 $0 7/1/2008 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 1.14490 $0 7/1/2009 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 1.22504 $0 7/1/2010 7/1/2011 $0 $5,400,000 $0 $24,780,249 $0 $0 $0 -$2,461,785 -$28,603 -$11,880 7/1/2012 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 1.50073 $0 7/1/2013 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 1.60578 $0 7/1/2014 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 1.71819 $0 7/1/2015 7/1/2016 $0 $5,010,000 $0 $32,185,567 $0 $0 $0 -$3,202,957 -$27,251 -$11,022 7/1/2017 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 2.10485 $0 7/1/2018 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 2.25219 $0 7/1/2019 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 2.40985 $0 7/1/2020 7/1/2021 $0 $5,400,000 $0 $42,986,184 $0 $0 $0 -$4,283,138 -$24,478 -$11,880 7/1/2022 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 2.95216 $0 0 7/1/2006 1 7/1/2007 2 7/1/2008 3 7/1/2009 4 7/1/2010 5 7/1/2011 6 7/1/2012 7 7/1/2013 8 7/1/2014 9 7/1/2015 10 7/1/2016 11 7/1/2017 12 7/1/2018 13 7/1/2019 14 7/1/2020 15 7/1/2021 16 7/1/2022 $0 -$3,130,040 $0 -$11,880 $0 -$54,519 $0 -$1,225,377 $0 -$4,373,827 $0 $13,482,338 1.31080 $0 1.40255 $9,612,721 $0 -$3,366,511 $0 -$11,022 $0 -$70,811 $0 -$1,832,817 $0 -$6,542,007 $0 $17,121,170 1.83846 $0 1.96715 $8,703,534 $0 -$4,206,512 $0 -$11,880 $0 -$94,573 $0 -$2,588,814 $0 -$9,240,444 $0 $22,524,466 2.57853 $0 2.75903 $8,163,903 NPV DIVIDEND CASH FLOWS ($mm) Appendix A-1 Page 11 of 18 3/15/2006 *** DRAFT *** DEVELOPMENT LOTS CASH BASELINE MID-POINT BUIL CASH FLOW ANALYSIS ($00 Cash F 7/1/2023 $0 REIT to TRS Transfer Revenue $0 HBU Sales Revenues REIT to TRS Transfer $0 Maine Tree Growth tax pena $0 Lost stumpage value $0 Deferred Maine Transfer Ta TRS Sale to Developer $0 PD&M Expenses $0 Deferred Maine Transfer Ta $0 Maine Transfer Tax (HBU S $0 Maine income taxes $0 Federal income taxes CASH FLOW FOR DIV $0 Discount Factor where r = PV Dividend Cash Flows NPV DIVIDEND CASH FLOWS ($ 17 7/1/2023 18 7/1/2024 7/1/2024 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 3.37993 $0 19 7/1/2025 20 7/1/2026 21 7/1/2027 7/1/2027 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 4.14056 $0 22 7/1/2028 7/1/2028 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 4.43040 $0 23 7/1/2029 7/1/2029 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 4.74053 $0 24 7/1/2030 25 7/1/2031 26 7/1/2032 7/1/2032 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 5.80735 $0 27 7/1/2033 7/1/2033 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 6.21387 $0 28 7/1/2034 7/1/2034 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 6.64884 $0 29 7/1/2035 30 7/1/2036 7/1/2025 7/1/2026 $0 $4,282,500 $0 $43,283,411 $0 $0 $0 -$4,316,581 -$15,107 -$9,422 7/1/2030 7/1/2031 $0 $3,345,000 $0 $37,607,688 $0 $0 $0 -$3,749,609 -$21,396 -$7,359 7/1/2035 7/1/2036 $0 $1,560,000 $0 $22,442,191 $0 $0 $0 -$2,239,219 -$8,045 -$3,432 $0 -$3,867,336 $0 -$9,422 $0 -$95,226 $0 -$2,742,613 $0 -$9,789,407 $0 $22,438,299 3.61653 $0 3.86968 $5,798,483 $0 -$3,501,844 $0 -$7,359 $0 -$82,741 $0 -$2,404,057 $0 -$8,580,978 $0 $19,252,346 5.07237 $0 5.42743 $3,547,229 $0 -$1,893,265 $0 -$3,432 $0 -$49,376 $0 -$1,491,033 $0 -$5,322,053 $0 $11,432,336 7.11426 $0 7.61226 $1,501,833 3.15882 $0 Appendix A-1 Page 12 of 18 3/15/2006 *** DRAFT *** MILL SITES Parcel description Location of parcel (county) Lot type Size of parcel (acres) 1998 cost basis ($/acre) Tree Growth valuation ($/acre) Harvest area lost (% acres) 2006 HBU appraisal ($/acre) Transfer price scalar (%HBU) HBU inflation factor PD&M inflation per year Year sold to developer $ 1998 REIT Acquisition Cost 200,000 BASELINE MID-POINT BUILD-OUT 1000-acre mill site in Greenville sold in 2008 Piscataquis 3 1000 $200 $118 50% $1,000 30% 1.061 3% 2008 HBU Appraisal/Price $ (assumes Mixed Wood) Average Annual Inflation 1,000,000 2006 3% $ 2008 1,060,900 =====> $ $ $ $ Transfer to TRS (installment sale) =====> HBU Sale to Developer Trees Land Total PD&M $ $ $ 118,100 81,900 200,000 118,100 881,900 1,000,000 (150,000) 300,000 3% $ $ $ $ 118,100 942,800 1,060,900 (159,135) REIT->TRS transfer price (HBU Appraisal * Transfer price scalar) $ Cash Flows: HBU sales revenues 50% Assessed value of property (% of HBU value) 20% Maine tree growth tax penalty (based on assessed value) 3.0% Lost stumpage value REIT portion of Maine transfer tax on REIT->TRS transfer (deferred) 15.0% P,D&M expenses (at TRS) TRS portion of Maine transfer tax on REIT->TRS transfer (deferred) TRS portion of Maine transfer tax on TRS HBU sale Taxable TRS income for Maine income taxes 8.93% Maine income tax on TRS HBU sale TRS Ordinary income taxable at Federal Rate 35.00% Federal income taxes TRS note repayment to REIT TRS Dividend Cash Flows to S/Hs REIT Dividend Cash Flows to S/Hs 7.00% $ $ 530,450 $ $ $ $ $ $ $ $ 532,681 $ 485,112 $ $ $ $ TOTAL DIVIDEND CASH FLOWS $ $ $533,776 1,060,900 (66,090) (3,543) (660) (159,135) (660) (2,334) (47,568) (169,789) (300,000) 311,120 300,000 611,120 533,776 DCF Value Total Cash Flows (2006) Total DCF Value to REIT S/Hs (2006) Appendix A-1 Page 13 of 18 3/15/2006 *** DRAFT *** CAMPGROUNDS Parcel description Location of parcel (county) Lot type Size of parcel (acres) 1998 cost basis ($/acre) Tree Growth valuation ($/acre) Harvest area lost (% acres) 2006 HBU appraisal ($/acre) Transfer price scalar (%HBU) HBU inflation factor PD&M inflation per year Year sold to developer $ 1998 REIT Acquisition Cost 120,000 BASELINE MID-POINT BUILD-OUT 600 acres of campgrounds; split between counties; 2008 sales Both 3 600 $200 $122 50% $10,000 30% 1.061 3% 2008 HBU Appraisal/Price $ (assumes Mixed Wood) Average Annual Inflation 6,000,000 2006 3% $ 2008 6,365,400 =====> $ $ $ $ Transfer to TRS (installment sale) =====> HBU Sale to Developer Trees Land Total PD&M $ $ $ 72,930 47,070 120,000 72,930 5,927,070 6,000,000 (900,000) 1,800,000 3% $ $ $ $ 72,930 6,292,470 6,365,400 (954,810) REIT->TRS transfer price (HBU Appraisal * Transfer price scalar) $ Cash Flows: HBU sales revenues 50% Assessed value of property (% of HBU value) 20% Maine tree growth tax penalty (based on assessed value) 3.0% Lost stumpage value REIT portion of Maine transfer tax on REIT->TRS transfer (deferred) 15.0% P,D&M expenses (at TRS) TRS portion of Maine transfer tax on REIT->TRS transfer (deferred) TRS portion of Maine transfer tax on TRS HBU sale Taxable TRS income for Maine income taxes 8.93% Maine income tax on TRS HBU sale TRS Ordinary income taxable at Federal Rate 35.00% Federal income taxes TRS note repayment to REIT TRS Dividend Cash Flows to S/Hs REIT Dividend Cash Flows to S/Hs 7.00% $ $ 3,182,700 $ $ $ $ $ $ $ $ 2,980,086 $ 2,713,964 $ $ $ $ TOTAL DIVIDEND CASH FLOWS $ $ $3,107,633 6,365,400 (612,540) (2,188) (3,960) (954,810) (3,960) (14,004) (266,122) (949,887) (1,800,000) 1,757,929 1,800,000 3,557,929 3,107,633 DCF Value Total Cash Flows (2006) Total DCF Value to REIT S/Hs (2006) Appendix A-1 Page 14 of 18 3/15/2006 *** DRAFT *** RESORTS Parcel description Location of parcel (county) Lot type Size of parcel (acres) 1998 cost basis ($/acre) Tree Growth valuation ($/acre) Harvest area lost (% acres) 2006 HBU appraisal ($/acre) Transfer price scalar (%HBU) HBU inflation factor PD&M inflation per year Year sold to developer $ 1998 REIT Acquisition Cost - BASELINE MID-POINT BUILD-OUT None Both 3 0 $200 $0 50% $1,000 30% 1.126 3% 2010 HBU Appraisal/Price $ (assumes Mixed Wood) Average Annual Inflation 2006 3% $ 2010 - =====> $ $ $ $ Transfer to TRS (installment sale) =====> - HBU Sale to Developer Trees Land Total PD&M $ $ $ - 3% $ $ $ $ - REIT->TRS transfer price (HBU Appraisal * Transfer price scalar) $ Cash Flows: HBU sales revenues 0% Assessed value of property (% of HBU value) 20% Maine tree growth tax penalty (based on assessed value) 0.0% Lost stumpage value REIT portion of Maine transfer tax on REIT->TRS transfer (deferred) 0.0% P,D&M expenses (at TRS) TRS portion of Maine transfer tax on REIT->TRS transfer (deferred) TRS portion of Maine transfer tax on TRS HBU sale Taxable TRS income for Maine income taxes 8.93% Maine income tax on TRS HBU sale TRS Ordinary income taxable at Federal Rate 35.00% Federal income taxes TRS note repayment to REIT TRS Dividend Cash Flows to S/Hs REIT Dividend Cash Flows to S/Hs 7.00% $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ TOTAL DIVIDEND CASH FLOWS $ $ $0 - DCF Value Total Cash Flows (2006) Total DCF Value to REIT S/Hs (2006) Appendix A-1 Page 15 of 18 3/15/2006 *** DRAFT *** AFFORDABLE HOUSING Parcel description Location of parcel (county) Lot type Size of parcel (acres) 1998 cost basis ($/acre) Tree Growth valuation ($/acre) Harvest area lost (% acres) 2006 HBU appraisal ($/acre) Transfer price scalar (%HBU) HBU inflation factor PD&M inflation per year Year sold to developer $ 1998 REIT Acquisition Cost - BASELINE MID-POINT BUILD-OUT None Both 3 0 $200 $0 50% $0 30% 1.061 3% 2008 HBU Appraisal/Price $ (assumes Mixed Wood) Average Annual Inflation 2006 3% $ 2008 - =====> $ $ $ $ Transfer to TRS (installment sale) =====> - HBU Sale to Developer Trees Land Total PD&M $ $ $ - 3% $ $ $ $ - REIT->TRS transfer price (HBU Appraisal * Transfer price scalar) $ Cash Flows: HBU sales revenues 0% Assessed value of property (% of HBU value) 20% Maine tree growth tax penalty (based on assessed value) 0.0% Lost stumpage value REIT portion of Maine transfer tax on REIT->TRS transfer (deferred) 0.0% P,D&M expenses (at TRS) TRS portion of Maine transfer tax on REIT->TRS transfer (deferred) TRS portion of Maine transfer tax on TRS HBU sale Taxable TRS income for Maine income taxes 8.93% Maine income tax on TRS HBU sale TRS Ordinary income taxable at Federal Rate 35.00% Federal income taxes TRS note repayment to REIT TRS Dividend Cash Flows to S/Hs REIT Dividend Cash Flows to S/Hs 7.00% $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ TOTAL DIVIDEND CASH FLOWS $ $ $0 - DCF Value Total Cash Flows (2006) Total DCF Value to REIT S/Hs (2006) Appendix A-1 Page 16 of 18 3/15/2006 *** DRAFT *** SPORTING CAMPS Parcel description Location of parcel (county) Lot type Size of parcel (acres) 1998 cost basis ($/acre) Tree Growth valuation ($/acre) Harvest area lost (% acres) 2006 HBU appraisal ($/acre) Transfer price scalar (%HBU) HBU inflation factor PD&M inflation per year Year sold to developer $ 1998 REIT Acquisition Cost 16,000 BASELINE MID-POINT BUILD-OUT 80 acres of sporting camps split between counties; 2009 sale; remains in Tree Growth Both 3 80 $200 $122 0% $1,500 30% 1.093 3% 2009 HBU Appraisal/Price $ (assumes Mixed Wood) Average Annual Inflation 120,000 2006 3% $ 2009 131,127 =====> $ $ $ $ Transfer to TRS (installment sale) =====> HBU Sale to Developer Trees Land Total PD&M $ $ $ 9,724 6,276 16,000 9,724 110,276 120,000 (18,000) 36,000 3% $ $ $ $ 9,724 121,403 131,127 (19,669) REIT->TRS transfer price (HBU Appraisal * Transfer price scalar) $ Cash Flows: HBU sales revenues 50% Assessed value of property (% of HBU value) 0% Maine tree growth tax penalty (based on assessed value) 3.0% Lost stumpage value REIT portion of Maine transfer tax on REIT->TRS transfer (deferred) 15.0% P,D&M expenses (at TRS) TRS portion of Maine transfer tax on REIT->TRS transfer (deferred) TRS portion of Maine transfer tax on TRS HBU sale Taxable TRS income for Maine income taxes 8.93% Maine income tax on TRS HBU sale TRS Ordinary income taxable at Federal Rate 35.00% Federal income taxes TRS note repayment to REIT TRS Dividend Cash Flows to S/Hs REIT Dividend Cash Flows to S/Hs 7.00% $ $ 65,564 $ $ $ $ $ $ $ $ 75,090 $ 68,384 $ $ $ $ TOTAL DIVIDEND CASH FLOWS $ $ $65,368 131,127 (292) (79) (19,669) (79) (289) (6,706) (23,934) (36,000) 44,079 36,000 80,079 65,368 DCF Value Total Cash Flows (2006) Total DCF Value to REIT S/Hs (2006) Appendix A-1 Page 17 of 18 3/15/2006 *** DRAFT *** CONSERVATION LAND/EASEMENT Parcel description Location of parcel (county) Lot type Size of parcel (acres) 1998 cost basis ($/acre) Tree Growth valuation ($/acre) Harvest area lost (% acres) 2006 HBU appraisal ($/acre) Transfer price scalar (%HBU) HBU inflation factor PD&M inflation per year Year sold to developer $ 1998 REIT Acquisition Cost - BASELINE MID-POINT BUILD-OUT None Both 1 0 $200 $0 0% $0 30% 1.166 3% 2008 HBU Appraisal/Price $ (assumes Mixed Wood) Average Annual Inflation 2006 8% $ 2008 - =====> $ $ $ $ Transfer to TRS (installment sale) =====> - Sale to State of Maine Trees Land Total PD&M $ $ $ - 3% $ $ $ $ - REIT->TRS transfer price (HBU Appraisal * Transfer price scalar) $ Cash Flows: HBU sales revenues 0% Assessed value of property (% of HBU value) 0% Maine tree growth tax penalty (based on assessed value) 0.0% Lost stumpage value REIT portion of Maine transfer tax on REIT->TRS transfer (deferred) 0% P,D&M expenses (at TRS) TRS portion of Maine transfer tax on REIT->TRS transfer (deferred) TRS portion of Maine transfer tax on TRS HBU sale Taxable TRS income for Maine income taxes 8.93% Maine income tax on TRS HBU sale TRS Ordinary income taxable at Federal Rate 35.00% Federal income taxes TRS note repayment to REIT TRS Dividend Cash Flows to S/Hs REIT Dividend Cash Flows to S/Hs 7.00% $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ TOTAL DIVIDEND CASH FLOWS $ $ $0 - DCF Value Total Cash Flows (2006) Total DCF Value to REIT S/Hs (2006) Appendix A-1 Page 18 of 18 3/15/2006 DRAFT 15 March 2006 APPENDIX A-2 APRIL 2005 RESOURCE PLAN Plum Creek Financial Model Input and Output Detail *** DRAFT *** PLUM CREEK DEVELOPMENT in MOOSEHEAD LAKE REGION Contribution to Shareholder Value in 2006 Dollars PLUM CREEK APRIL 2005 RESOURCE PLAN Property Sales Development Lot Areas Mill Site Campground(s) Resort(s) Affordable Housing Sporting Camp(s) Conservation Sale(s) Property Descriptions PLUM CREEK APRIL 2005 RESOURCE PLAN 1000-acre mill site in Greenville sold in 2008 600 acres of campgrounds; split between counties; 2008 sales Two resorts -- one in Lily Bay one at Brassua; sales in 2010 50-acre site in Greenville; donated in 2008 80 acres of sporting camps split between counties; 2009 sale; remains in Tree Growth Sale to the State of Maine in 2008 of 30,825 acres at "The Roaches" (remains in Tree Growth, and is Transfer-Tax exempt) DCF Value $75.6 $0.5 $3.1 $1.7 $0.0 $0.1 $5.4 $86.4 TOTAL ($ millions) Appendix A-2 Page 1 of 22 3/15/2006 *** DRAFT *** DEVELOPMENT LOT AREAS Valuation Date/Base Year Marginal Income Tax Rate Maine Tree Growth Penalty Maine Income Tax Rate Discount Rate y-Specific Inputs Lot Type PLUM CREEK APRIL 2005 RESOURCE PLAN 7/1/2006 35% 20% 8.93% 7.0% PV After-Tax Cash Flow = $75.6 mm, with HBU Inflation Rates 947 Development Lots Sold 2005 Tree Growth Valuation/Stumpage ($/Acre) Description Shorefront Back Lots Other Standard Lot Size (Acres) Permitting, Development & Marketing (P,D&M) Costs (% HBU Price) PD&M Inflation Rate Transfer Price Scalar (%HBU) Yrs 1-5 Yrs 6-10 Yrs 11-30 Harvest Area Lost on Sale (Acres) County Both Piscataquis Somerset $ $ $ Hardwood Mixed Woods Softwood 2005 Property Tax Rates by County 2005 Assessed Value % of HBU 1 2 3 3.0 5.0 1.0 15% 15% 15% 3.0% 3.0% 3.0% 30% 30% 30% 8.0% 4.0% 3.0% 8.0% 4.0% 3.0% 4.0% 4.0% 3.0% 23% 100% 50% 116.00 112.70 119.30 $ $ $ 121.55 118.10 125.00 $ $ $ 134.15 138.90 129.40 0.811% 0.841% 0.780% 50.0% 50.0% 50.0% DEVELOPMENT AREAS HBU Inflation PD&M Inflation Harvest Area Lost (% Acres Sold) Site Lakes & Ponds Lot Type Township County Forest Type Tree Growth Valuation ($/Acre) 2005 Property Tax Rate 2005 Assessed Value # Lots to be Sold for % Development Cost Basis per Acre Total Cost Basis Year 0 Transfer Price per Acre Year 0 PD&M Year 0 HBU Price per Acre HBU Acres Sold for Dev't A A A A A A A B B B B B B B B B C D E F F G H I J K L M N O P Q R Brassua Lake Brassua Lake Brassua Lake Brassua Lake Brassua Lake Brassua Lake Brassua Lake Moosehead Lake Moosehead Lake Moosehead Lake Moosehead Lake Moosehead Lake Moosehead Lake Moosehead Lake Moosehead Lake Moosehead Lake Lily Bay Township Long Pond Indian Pond Prong Pond Prong Pond Upper Wilson Pond Moose River Kennebec Interior Burnham Pond Ellis Pond Luther Pond Fish Pond Center Pond Knights Pond 2nd Roach Pond 3rd Roach Pond Penobscot Pond 1 1 1 1 1 1 2 1 1 1 1 1 1 1 1 2 2 1 1 1 2 1 1 2 1 1 1 1 1 1 Brassua Rockwood Strip West Taunton & Raynham Rockwood Strip East Rockwood Strip West Sandwich Academy Rockwood Strip East Lily Bay Big Moose Big Moose Lily Bay Big W Township Sandbar Tract Taunton & Raynham Sapling Rockwood/T&R/Big Moose Lily Bay Long Pond Indian Stream/Squaretown Beaver Cove Beaver Cove West Bowdoin Sandwich Academy Big Moose Big Moose Chase Stream Thorndike Thorndike Soldiertown Squaretown T1 R12 Shawtown T1 R12 Somerset Somerset Somerset Somerset Somerset Somerset Somerset Piscataquis Somerset Somerset Piscataquis Somerset Somerset Somerset Somerset Somerset Piscataquis Piscataquis Piscataquis Piscataquis Piscataquis Piscataquis Somerset Piscataquis Piscataquis Somerset Somerset Somerset Somerset Somerset Piscataquis Piscataquis Piscataquis Mixed Woods Mixed Woods Mixed Woods Mixed Woods Mixed Woods Mixed Woods Mixed Woods Mixed Woods Mixed Woods Mixed Woods Mixed Woods Mixed Woods Mixed Woods Mixed Woods Mixed Woods Mixed Woods Mixed Woods Mixed Woods Mixed Woods Mixed Woods Mixed Woods Mixed Woods Mixed Woods Mixed Woods Mixed Woods Mixed Woods Mixed Woods Mixed Woods Mixed Woods Mixed Woods Mixed Woods Mixed Woods Mixed Woods $122 $122 $122 $122 $122 $122 $118 $118 $122 $122 $122 $122 $122 $122 $122 $118 $118 $122 $122 $122 $118 $122 $122 $118 $122 $122 $122 $122 $122 $122 $0 $0 $0 0.780% 0.780% 0.780% 0.780% 0.780% 0.780% 0.780% 0.841% 0.780% 0.780% 0.841% 0.780% 0.780% 0.780% 0.780% 0.780% 0.841% 0.841% 0.841% 0.841% 0.841% 0.841% 0.780% 0.841% 0.841% 0.780% 0.780% 0.780% 0.780% 0.780% 0.000% 0.000% 0.000% 50.000% 50.000% 50.000% 50.000% 50.000% 50.000% 50.000% 50.000% 50.000% 50.000% 50.000% 50.000% 50.000% 50.000% 50.000% 50.000% 50.000% 50.000% 50.000% 50.000% 50.000% 50.000% 50.000% 50.000% 50.000% 50.000% 50.000% 50.000% 50.000% 50.000% 0.000% 0.000% 0.000% 40 40 59 25 15 10 80 10 25 8 6 31 2 2 19 75 190 80 35 30 25 30 30 30 20 8 6 6 5 5 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $24,000 $24,000 $35,400 $15,000 $9,000 $6,000 $80,000 $6,000 $15,000 $4,800 $3,600 $18,600 $1,200 $1,200 $11,400 $75,000 $190,000 $48,000 $21,000 $18,000 $25,000 $18,000 $18,000 $30,000 $12,000 $4,800 $3,600 $3,600 $3,000 $3,000 $0 $0 $0 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $7,500 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $10,500 $7,500 $15,000 $15,000 $15,000 $7,500 $15,000 $15,000 $7,500 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $0 $0 $0 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $3,750 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $5,250 $3,750 $7,500 $7,500 $7,500 $3,750 $7,500 $7,500 $3,750 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $0 $0 $0 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $25,000 $66,667 $66,667 $66,667 $66,667 $66,667 $66,667 $66,667 $66,667 $35,000 $25,000 $50,000 $50,000 $50,000 $25,000 $50,000 $50,000 $25,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 120 120 177 75 45 30 400 30 75 24 18 93 6 6 57 375 950 240 105 90 125 90 90 150 60 24 18 18 15 15 0 0 0 3,641 8.0% 8.0% 8.0% 8.0% 8.0% 8.0% 4.0% 8.0% 8.0% 8.0% 8.0% 8.0% 8.0% 8.0% 8.0% 4.0% 4.0% 8.0% 8.0% 8.0% 4.0% 8.0% 8.0% 4.0% 8.0% 8.0% 8.0% 8.0% 8.0% 8.0% 0.0% 0.0% 0.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 0.0% 0.0% 0.0% 23.5% 23.5% 23.5% 23.5% 23.5% 23.5% 100.0% 23.5% 23.5% 23.5% 23.5% 23.5% 23.5% 23.5% 23.5% 100.0% 100.0% 23.5% 23.5% 23.5% 100.0% 23.5% 23.5% 100.0% 23.5% 23.5% 23.5% 23.5% 23.5% 23.5% 0.0% 0.0% 0.0% 947 Total = Appendix A-2 Page 2 of 22 3/15/2006 *** DRAFT *** PLUM CREEK APRIL 2005 RESOURCE PLAN HBU Inflation Factors 1 2 3 0 1.00 1.00 1.00 1 1.08 1.04 1.03 2 1.17 1.08 1.06 3 1.26 1.12 1.09 4 1.36 1.17 1.13 5 1.47 1.22 1.16 6 1.59 1.27 1.19 7 1.71 1.32 1.23 8 1.85 1.37 1.27 9 2.00 1.42 1.30 10 2.16 1.48 1.34 11 2.25 1.54 1.38 12 2.34 1.60 1.43 13 2.43 1.67 1.47 14 2.53 1.73 1.51 15 2.63 1.80 1.56 16 2.73 1.87 1.60 17 2.84 1.95 1.65 18 2.95 2.03 1.70 19 3.07 2.11 1.75 20 3.20 2.19 1.81 21 3.32 2.28 1.86 22 3.46 2.37 1.92 23 3.59 2.46 1.97 24 3.74 2.56 2.03 25 3.89 2.67 2.09 26 4.04 2.77 2.16 27 4.21 2.88 2.22 28 4.37 3.00 2.29 29 4.55 3.12 2.36 30 4.73 3.24 2.43 Shorefront Back Lots Other DEVELOPMENT SCHEDULE (% Developed and Sold in Years 1 - 30) Lot Type Total Check 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 0% 0% 0% Site Lakes & Ponds 0 1 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 2 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 3 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 4 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 5 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 6 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 7 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 8 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 13% 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 A A A A A A A B B B B B B B B B C D E F F G H I J K L M N O P Q R Brassua Lake Brassua Lake Brassua Lake Brassua Lake Brassua Lake Brassua Lake Brassua Lake Moosehead Lake Moosehead Lake Moosehead Lake Moosehead Lake Moosehead Lake Moosehead Lake Moosehead Lake Moosehead Lake Moosehead Lake Lily Bay Township Long Pond Indian Pond Prong Pond Prong Pond Upper Wilson Pond Moose River Kennebec Interior Burnham Pond Ellis Pond Luther Pond Fish Pond Center Pond Knights Pond 2nd Roach Pond 3rd Roach Pond Penobscot Pond 1 1 1 1 1 1 2 1 1 1 1 1 1 1 1 2 2 1 1 1 2 1 1 2 1 1 1 1 1 1 0 0 0 0 Total Lots 947 118 118 118 118 118 118 118 118 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Appendix A-2 Page 3 of 22 3/15/2006 *** DRAFT *** DEVELOPMENT LOTS: REIT to TRS TRANSFER PLUM CREEK APRIL 2005 RESOURCE PLAN Site Lakes & Ponds Lot Type 7/1/2006 Cost Basis per Acre 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 200 0 0 0 Total Cost Basis 24,000 24,000 35,400 15,000 9,000 6,000 80,000 6,000 15,000 4,800 3,600 18,600 1,200 1,200 11,400 75,000 190,000 48,000 21,000 18,000 25,000 18,000 18,000 30,000 12,000 4,800 3,600 3,600 3,000 3,000 0 0 0 $728,200 Transfer Price per Acre 15,000 15,000 15,000 15,000 15,000 15,000 7,500 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 10,500 7,500 15,000 15,000 15,000 7,500 15,000 15,000 7,500 15,000 15,000 15,000 15,000 15,000 15,000 0 0 0 Total Transfer Price 1,800,000 1,800,000 2,655,000 1,125,000 675,000 450,000 3,000,000 600,000 1,500,000 480,000 360,000 1,860,000 120,000 120,000 1,140,000 3,937,500 7,125,000 3,600,000 1,575,000 1,350,000 937,500 1,350,000 1,350,000 1,125,000 900,000 360,000 270,000 270,000 225,000 225,000 0 0 0 $42,285,000 Tree Growth Valuation per Acre 122 122 122 122 122 122 118 118 122 122 122 122 122 122 122 118 118 122 122 122 118 122 122 118 122 122 122 122 122 122 0 0 0 Total Tree Growth Valuation 14,586 14,586 21,514 9,116 5,470 3,647 47,240 3,543 9,116 2,917 2,188 11,304 729 729 6,928 44,288 112,195 29,172 12,763 10,940 14,763 10,940 10,940 17,715 7,293 2,917 2,188 2,188 1,823 1,823 0 0 0 $435,560 Stumpage Lost on Transfer 3,424.384 3,424 5,051 2,140 1,284 856 47,240 832 2,140 685 514 2,654 171 171 1,627 44,288 112,195 6,849 2,996 2,568 14,763 2,568 2,568 17,715 1,712 685 514 514 428 428 0 0 0 $283,004 Maine Transfer Maine Transfer Property Tax Tax (50% REIT) Tax (50% TRS) Rate (Deferred) (Deferred) 0.780% 0.780% 0.780% 0.780% 0.780% 0.780% 0.780% 0.841% 0.780% 0.780% 0.841% 0.780% 0.780% 0.780% 0.780% 0.780% 0.841% 0.841% 0.841% 0.841% 0.841% 0.841% 0.780% 0.841% 0.841% 0.780% 0.780% 0.780% 0.780% 0.780% 0.000% 0.000% 0.000% 3,960 3,960 5,841 2,475 1,485 990 6,600 1,320 3,300 1,056 792 4,092 264 264 2,508 8,663 15,675 7,920 3,465 2,970 2,063 2,970 2,970 2,475 1,980 792 594 594 495 495 0 0 0 $93,027 3,960 3,960 5,841 2,475 1,485 990 6,600 1,320 3,300 1,056 792 4,092 264 264 2,508 8,663 15,675 7,920 3,465 2,970 2,063 2,970 2,970 2,475 1,980 792 594 594 495 495 0 0 0 $93,027 Acres Transferred REIT to TRS 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 A A A A A A A B B B B B B B B B C D E F F G H I J K L M N O P Q R Brassua Lake Brassua Lake Brassua Lake Brassua Lake Brassua Lake Brassua Lake Brassua Lake Moosehead Lake Moosehead Lake Moosehead Lake Moosehead Lake Moosehead Lake Moosehead Lake Moosehead Lake Moosehead Lake Moosehead Lake Lily Bay Township Long Pond Indian Pond Prong Pond Prong Pond Upper Wilson Pond Moose River Kennebec Interior Burnham Pond Ellis Pond Luther Pond Fish Pond Center Pond Knights Pond 2nd Roach Pond 3rd Roach Pond Penobscot Pond 1 1 1 1 1 1 2 1 1 1 1 1 1 1 1 2 2 1 1 1 2 1 1 2 1 1 1 1 1 1 0 0 0 Totals 120 120 177 75 45 30 400 30 75 24 18 93 6 6 57 375 950 240 105 90 125 90 90 150 60 24 18 18 15 15 0 0 0 3,641 Appendix A-2 Page 4 of 22 3/15/2006 *** DRAFT *** DEVELOPMENT LOTS CASH FLOWS PLUM CREEK APRIL 2005 RESOURCE PLAN ACRES SOLD FOR DEVELOPMENT A Brassua Lake 1 0 A Brassua Lake 1 0 A Brassua Lake 1 0 A Brassua Lake 1 0 A Brassua Lake 1 0 A Brassua Lake 1 0 A Brassua Lake 2 0 B Moosehead Lake 1 0 B Moosehead Lake 1 0 B Moosehead Lake 1 0 B Moosehead Lake 1 0 B Moosehead Lake 1 0 B Moosehead Lake 1 0 B Moosehead Lake 1 0 B Moosehead Lake 1 0 B Moosehead Lake 2 0 C Lily Bay Township 2 0 D Long Pond 1 0 E Indian Pond 1 0 F Prong Pond 1 0 F Prong Pond 2 0 G Upper Wilson Pond 1 0 H Moose River 1 0 I Kennebec Interior 2 0 J Burnham Pond 1 0 K Ellis Pond 1 0 L Luther Pond 1 0 M Fish Pond 1 0 N Center Pond 1 0 O Knights Pond 1 0 P 2nd Roach Pond 0 0 Q 3rd Roach Pond 0 0 R Penobscot Pond 0 0 Subtotal Acres Sold for Development 0 7/1/2006 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 7/1/2007 15 15 22 9 6 4 50 4 9 3 2 12 1 1 7 47 119 30 13 11 16 11 11 19 8 3 2 2 2 2 0 0 0 455 2 7/1/2008 15 15 22 9 6 4 50 4 9 3 2 12 1 1 7 47 119 30 13 11 16 11 11 19 8 3 2 2 2 2 0 0 0 455 3 7/1/2009 15 15 22 9 6 4 50 4 9 3 2 12 1 1 7 47 119 30 13 11 16 11 11 19 8 3 2 2 2 2 0 0 0 455 4 7/1/2010 15 15 22 9 6 4 50 4 9 3 2 12 1 1 7 47 119 30 13 11 16 11 11 19 8 3 2 2 2 2 0 0 0 455 5 7/1/2011 15 15 22 9 6 4 50 4 9 3 2 12 1 1 7 47 119 30 13 11 16 11 11 19 8 3 2 2 2 2 0 0 0 455 6 7/1/2012 15 15 22 9 6 4 50 4 9 3 2 12 1 1 7 47 119 30 13 11 16 11 11 19 8 3 2 2 2 2 0 0 0 455 7 7/1/2013 15 15 22 9 6 4 50 4 9 3 2 12 1 1 7 47 119 30 13 11 16 11 11 19 8 3 2 2 2 2 0 0 0 455 8 7/1/2014 15 15 22 9 6 4 50 4 9 3 2 12 1 1 7 47 119 30 13 11 16 11 11 19 8 3 2 2 2 2 0 0 0 455 Appendix A-2 Page 5 of 22 3/15/2006 *** DRAFT *** DEVELOPMENT LOTS CASH FLOWS PLUM CREEK APRIL 2005 RESOURCE PLAN ASSESSED VALUE AT SALE DATE A Brassua Lake 1 A Brassua Lake 1 A Brassua Lake 1 A Brassua Lake 1 A Brassua Lake 1 A Brassua Lake 1 A Brassua Lake 2 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 2 C Lily Bay Township 2 D Long Pond 1 E Indian Pond 1 F Prong Pond 1 F Prong Pond 2 G Upper Wilson Pond 1 H Moose River 1 I Kennebec Interior 2 J Burnham Pond 1 K Ellis Pond 1 L Luther Pond 1 M Fish Pond 1 N Center Pond 1 O Knights Pond 1 P 2nd Roach Pond 0 Q 3rd Roach Pond 0 R Penobscot Pond 0 Subtotal Assessed Value at Sale Date 0 7/1/2006 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 7/1/2007 405,000 405,000 597,375 253,125 151,875 101,250 650,000 135,000 337,500 108,000 81,000 418,500 27,000 27,000 256,500 853,125 1,543,750 810,000 354,375 303,750 203,125 303,750 303,750 243,750 202,500 81,000 60,750 60,750 50,625 50,625 0 0 0 9379750 2 7/1/2008 437,400 437,400 645,165 273,375 164,025 109,350 676,000 145,800 364,500 116,640 87,480 451,980 29,160 29,160 277,020 887,250 1,605,500 874,800 382,725 328,050 211,250 328,050 328,050 253,500 218,700 87,480 65,610 65,610 54,675 54,675 0 0 0 9990380 3 7/1/2009 472,392 472,392 696,778 295,245 177,147 118,098 703,040 157,464 393,660 125,971 94,478 488,138 31,493 31,493 299,182 922,740 1,669,720 944,784 413,343 354,294 219,700 354,294 354,294 263,640 236,196 94,478 70,859 70,859 59,049 59,049 0 0 0 10644270 4 7/1/2010 510,183 510,183 752,520 318,865 191,319 127,546 731,162 170,061 425,153 136,049 102,037 527,189 34,012 34,012 323,116 959,650 1,736,509 1,020,367 446,410 382,638 228,488 382,638 382,638 274,186 255,092 102,037 76,528 76,528 63,773 63,773 0 0 0 11344658 5 7/1/2011 550,998 550,998 812,722 344,374 206,624 137,750 760,408 183,666 459,165 146,933 110,200 569,365 36,733 36,733 348,965 998,036 1,805,969 1,101,996 482,123 413,249 237,628 413,249 413,249 285,153 275,499 110,200 82,650 82,650 68,875 68,875 0 0 0 12095031 6 7/1/2012 595,078 595,078 877,740 371,924 223,154 148,769 790,824 198,359 495,898 158,687 119,016 614,914 39,672 39,672 376,883 1,037,957 1,878,208 1,190,156 520,693 446,308 247,133 446,308 446,308 296,559 297,539 119,016 89,262 89,262 74,385 74,385 0 0 0 12899146 7 7/1/2013 642,684 642,684 947,959 401,678 241,007 160,671 822,457 214,228 535,570 171,382 128,537 664,107 42,846 42,846 407,033 1,079,475 1,953,336 1,285,368 562,349 482,013 257,018 482,013 482,013 308,422 321,342 128,537 96,403 96,403 80,336 80,336 0 0 0 13761051 8 7/1/2014 694,099 694,099 1,023,796 433,812 260,287 173,525 855,356 231,366 578,416 185,093 138,820 717,235 46,273 46,273 439,596 1,122,654 2,031,470 1,388,198 607,336 520,574 267,299 520,574 520,574 320,758 347,049 138,820 104,115 104,115 86,762 86,762 0 0 0 14685106 Appendix A-2 Page 6 of 22 3/15/2006 *** DRAFT *** DEVELOPMENT LOTS CASH FLOWS PLUM CREEK APRIL 2005 RESOURCE PLAN TREE GROWTH TAX PENALTY A Brassua Lake 1 A Brassua Lake 1 A Brassua Lake 1 A Brassua Lake 1 A Brassua Lake 1 A Brassua Lake 1 A Brassua Lake 2 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 2 C Lily Bay Township 2 D Long Pond 1 E Indian Pond 1 F Prong Pond 1 F Prong Pond 2 G Upper Wilson Pond 1 H Moose River 1 I Kennebec Interior 2 J Burnham Pond 1 K Ellis Pond 1 L Luther Pond 1 M Fish Pond 1 N Center Pond 1 O Knights Pond 1 P 2nd Roach Pond 0 Q 3rd Roach Pond 0 R Penobscot Pond 0 Subtotal Tree Growth Tax Penalty 0 7/1/2006 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 $0 1 7/1/2007 80,400 80,400 118,590 50,250 30,150 20,100 128,000 26,850 67,125 21,480 16,110 83,235 5,370 5,370 51,015 168,750 304,000 160,800 70,350 60,300 40,000 60,300 60,300 48,000 40,200 16,080 12,060 12,060 10,050 10,050 0 0 0 $1,857,745 2 7/1/2008 86,880 86,880 128,148 54,300 32,580 21,720 133,200 29,010 72,525 23,208 17,406 89,931 5,802 5,802 55,119 175,575 316,350 173,760 76,020 65,160 41,625 65,160 65,160 49,950 43,440 17,376 13,032 13,032 10,860 10,860 0 0 0 $1,979,871 3 7/1/2009 93,878 93,878 138,471 58,674 35,204 23,470 138,608 31,343 78,357 25,074 18,806 97,163 6,269 6,269 59,551 182,673 329,194 187,757 82,144 70,409 43,315 70,409 70,409 51,978 46,939 18,776 14,082 14,082 11,735 11,735 0 0 0 $2,110,649 4 7/1/2010 101,437 101,437 149,619 63,398 38,039 25,359 144,232 33,862 84,656 27,090 20,317 104,973 6,772 6,772 64,338 190,055 342,552 202,873 88,757 76,078 45,073 76,078 76,078 54,087 50,718 20,287 15,216 15,216 12,680 12,680 0 0 0 $2,250,727 5 7/1/2011 109,600 109,600 161,659 68,500 41,100 27,400 150,082 36,583 91,458 29,267 21,950 113,408 7,317 7,317 69,508 197,732 356,444 219,199 95,900 82,200 46,901 82,200 82,200 56,281 54,800 21,920 16,440 16,440 13,700 13,700 0 0 0 $2,400,801 6 7/1/2012 118,416 118,416 174,663 74,010 44,406 29,604 156,165 39,522 98,805 31,617 23,713 122,518 7,904 7,904 75,092 205,716 370,892 236,831 103,614 88,812 48,802 88,812 88,812 58,562 59,208 23,683 17,762 17,762 14,802 14,802 0 0 0 $2,561,624 7 7/1/2013 127,937 127,937 188,707 79,961 47,976 31,984 162,491 42,696 106,739 34,156 25,617 132,356 8,539 8,539 81,122 214,020 385,917 255,874 111,945 95,953 50,779 95,953 95,953 60,934 63,968 25,587 19,191 19,191 15,992 15,992 0 0 0 $2,734,005 8 7/1/2014 138,220 138,220 203,874 86,387 51,832 34,555 169,071 46,123 115,308 36,899 27,674 142,982 9,225 9,225 87,634 222,656 401,544 276,440 120,942 103,665 52,835 103,665 103,665 63,402 69,110 27,644 20,733 20,733 17,277 17,277 0 0 0 $2,918,816 Appendix A-2 Page 7 of 22 3/15/2006 *** DRAFT *** DEVELOPMENT LOTS CASH FLOWS PLUM CREEK APRIL 2005 RESOURCE PLAN LOST STUMPAGE VALUE A Brassua Lake 1 A Brassua Lake 1 A Brassua Lake 1 A Brassua Lake 1 A Brassua Lake 1 A Brassua Lake 1 A Brassua Lake 2 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 2 C Lily Bay Township 2 D Long Pond 1 E Indian Pond 1 F Prong Pond 1 F Prong Pond 2 G Upper Wilson Pond 1 H Moose River 1 I Kennebec Interior 2 J Burnham Pond 1 K Ellis Pond 1 L Luther Pond 1 M Fish Pond 1 N Center Pond 1 O Knights Pond 1 P 2nd Roach Pond 0 Q 3rd Roach Pond 0 R Penobscot Pond 0 Subtotal Lost Stumpage Value 0 7/1/2006 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 $0 1 7/1/2007 428 428 631 268 161 107 5,905 104 268 86 64 332 21 21 203 5,536 14,024 856 375 321 1,845 321 321 2,214 214 86 64 64 54 54 0 0 0 $35,376 2 7/1/2008 428 428 631 268 161 107 5,905 104 268 86 64 332 21 21 203 5,536 14,024 856 375 321 1,845 321 321 2,214 214 86 64 64 54 54 0 0 0 $35,376 3 7/1/2009 428 428 631 268 161 107 5,905 104 268 86 64 332 21 21 203 5,536 14,024 856 375 321 1,845 321 321 2,214 214 86 64 64 54 54 0 0 0 $35,376 4 7/1/2010 428 428 631 268 161 107 5,905 104 268 86 64 332 21 21 203 5,536 14,024 856 375 321 1,845 321 321 2,214 214 86 64 64 54 54 0 0 0 $35,376 5 7/1/2011 428 428 631 268 161 107 5,905 104 268 86 64 332 21 21 203 5,536 14,024 856 375 321 1,845 321 321 2,214 214 86 64 64 54 54 0 0 0 $35,376 6 7/1/2012 428 428 631 268 161 107 5,905 104 268 86 64 332 21 21 203 5,536 14,024 856 375 321 1,845 321 321 2,214 214 86 64 64 54 54 0 0 0 $35,376 7 7/1/2013 428 428 631 268 161 107 5,905 104 268 86 64 332 21 21 203 5,536 14,024 856 375 321 1,845 321 321 2,214 214 86 64 64 54 54 0 0 0 $35,376 8 7/1/2014 428 428 631 268 161 107 5,905 104 268 86 64 332 21 21 203 5,536 14,024 856 375 321 1,845 321 321 2,214 214 86 64 64 54 54 0 0 0 $35,376 Appendix A-2 Page 8 of 22 3/15/2006 *** DRAFT *** DEVELOPMENT LOTS CASH FLOWS PLUM CREEK APRIL 2005 RESOURCE PLAN REIT to TRS DEFERRED TAXES REIT to TRS Transfer Revenues A Brassua Lake 1 A Brassua Lake 1 A Brassua Lake 1 A Brassua Lake 1 A Brassua Lake 1 A Brassua Lake 1 A Brassua Lake 2 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 2 C Lily Bay Township 2 D Long Pond 1 E Indian Pond 1 F Prong Pond 1 F Prong Pond 2 G Upper Wilson Pond 1 H Moose River 1 I Kennebec Interior 2 J Burnham Pond 1 K Ellis Pond 1 L Luther Pond 1 M Fish Pond 1 N Center Pond 1 O Knights Pond 1 P 2nd Roach Pond 0 Q 3rd Roach Pond 0 R Penobscot Pond 0 Subtotal REIT to TRS Transfer Revenues 0 7/1/2006 1 7/1/2007 2 7/1/2008 3 7/1/2009 4 7/1/2010 5 7/1/2011 6 7/1/2012 7 7/1/2013 8 7/1/2014 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 $0 225,000 225,000 331,875 140,625 84,375 56,250 375,000 75,000 187,500 60,000 45,000 232,500 15,000 15,000 142,500 492,188 890,625 450,000 196,875 168,750 117,188 168,750 168,750 140,625 112,500 45,000 33,750 33,750 28,125 28,125 0 0 0 $5,285,625 225,000 225,000 331,875 140,625 84,375 56,250 375,000 75,000 187,500 60,000 45,000 232,500 15,000 15,000 142,500 492,188 890,625 450,000 196,875 168,750 117,188 168,750 168,750 140,625 112,500 45,000 33,750 33,750 28,125 28,125 0 0 0 $5,285,625 225,000 225,000 331,875 140,625 84,375 56,250 375,000 75,000 187,500 60,000 45,000 232,500 15,000 15,000 142,500 492,188 890,625 450,000 196,875 168,750 117,188 168,750 168,750 140,625 112,500 45,000 33,750 33,750 28,125 28,125 0 0 0 $5,285,625 225,000 225,000 331,875 140,625 84,375 56,250 375,000 75,000 187,500 60,000 45,000 232,500 15,000 15,000 142,500 492,188 890,625 450,000 196,875 168,750 117,188 168,750 168,750 140,625 112,500 45,000 33,750 33,750 28,125 28,125 0 0 0 $5,285,625 225,000 225,000 331,875 140,625 84,375 56,250 375,000 75,000 187,500 60,000 45,000 232,500 15,000 15,000 142,500 492,188 890,625 450,000 196,875 168,750 117,188 168,750 168,750 140,625 112,500 45,000 33,750 33,750 28,125 28,125 0 0 0 $5,285,625 225,000 225,000 331,875 140,625 84,375 56,250 375,000 75,000 187,500 60,000 45,000 232,500 15,000 15,000 142,500 492,188 890,625 450,000 196,875 168,750 117,188 168,750 168,750 140,625 112,500 45,000 33,750 33,750 28,125 28,125 0 0 0 $5,285,625 225,000 225,000 331,875 140,625 84,375 56,250 375,000 75,000 187,500 60,000 45,000 232,500 15,000 15,000 142,500 492,188 890,625 450,000 196,875 168,750 117,188 168,750 168,750 140,625 112,500 45,000 33,750 33,750 28,125 28,125 0 0 0 $5,285,625 225,000 225,000 331,875 140,625 84,375 56,250 375,000 75,000 187,500 60,000 45,000 232,500 15,000 15,000 142,500 492,188 890,625 450,000 196,875 168,750 117,188 168,750 168,750 140,625 112,500 45,000 33,750 33,750 28,125 28,125 0 0 0 $5,285,625 Appendix A-2 Page 9 of 22 3/15/2006 *** DRAFT *** DEVELOPMENT LOTS CASH FLOWS 0 1 2 PLUM CREEK APRIL 2005 RESOURCE PLAN 7/1/2006 7/1/2007 7/1/2008 MAINE TRANSFER TAX ON REIT-TRS TRANSFER (50% REIT/50% TRS) A Brassua Lake 1 0 990 990 A Brassua Lake 1 0 990 990 A Brassua Lake 1 0 1,460 1,460 A Brassua Lake 1 0 619 619 A Brassua Lake 1 0 371 371 A Brassua Lake 1 0 248 248 A Brassua Lake 2 0 1,650 1,650 B Moosehead Lake 1 0 330 330 B Moosehead Lake 1 0 825 825 B Moosehead Lake 1 0 264 264 B Moosehead Lake 1 0 198 198 B Moosehead Lake 1 0 1,023 1,023 B Moosehead Lake 1 0 66 66 B Moosehead Lake 1 0 66 66 B Moosehead Lake 1 0 627 627 B Moosehead Lake 2 0 2,166 2,166 C Lily Bay Township 2 0 3,919 3,919 D Long Pond 1 0 1,980 1,980 E Indian Pond 1 0 866 866 F Prong Pond 1 0 743 743 F Prong Pond 2 0 516 516 G Upper Wilson Pond 1 0 743 743 H Moose River 1 0 743 743 I Kennebec Interior 2 0 619 619 J Burnham Pond 1 0 495 495 K Ellis Pond 1 0 198 198 L Luther Pond 1 0 149 149 M Fish Pond 1 0 149 149 N Center Pond 1 0 124 124 O Knights Pond 1 0 124 124 P 2nd Roach Pond 0 0 0 0 Q 3rd Roach Pond 0 0 0 0 R Penobscot Pond 0 0 0 0 Subtotal Maine Transfer Tax on $0 $23,257 $23,257 REIT-TRS transfer (50/50) 3 7/1/2009 990 990 1,460 619 371 248 1,650 330 825 264 198 1,023 66 66 627 2,166 3,919 1,980 866 743 516 743 743 619 495 198 149 149 124 124 0 0 0 $23,257 4 7/1/2010 990 990 1,460 619 371 248 1,650 330 825 264 198 1,023 66 66 627 2,166 3,919 1,980 866 743 516 743 743 619 495 198 149 149 124 124 0 0 0 $23,257 5 7/1/2011 990 990 1,460 619 371 248 1,650 330 825 264 198 1,023 66 66 627 2,166 3,919 1,980 866 743 516 743 743 619 495 198 149 149 124 124 0 0 0 $23,257 6 7/1/2012 990 990 1,460 619 371 248 1,650 330 825 264 198 1,023 66 66 627 2,166 3,919 1,980 866 743 516 743 743 619 495 198 149 149 124 124 0 0 0 $23,257 7 7/1/2013 990 990 1,460 619 371 248 1,650 330 825 264 198 1,023 66 66 627 2,166 3,919 1,980 866 743 516 743 743 619 495 198 149 149 124 124 0 0 0 $23,257 8 7/1/2014 990 990 1,460 619 371 248 1,650 330 825 264 198 1,023 66 66 627 2,166 3,919 1,980 866 743 516 743 743 619 495 198 149 149 124 124 0 0 0 $23,257 Appendix A-2 Page 10 of 22 3/15/2006 *** DRAFT *** DEVELOPMENT LOTS CASH FLOWS PLUM CREEK APRIL 2005 RESOURCE PLAN TRS REVENUE CALCULATIONS HBU Revenues per Acre A Brassua Lake 1 A Brassua Lake 1 A Brassua Lake 1 A Brassua Lake 1 A Brassua Lake 1 A Brassua Lake 1 A Brassua Lake 2 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 2 C Lily Bay Township 2 D Long Pond 1 E Indian Pond 1 F Prong Pond 1 F Prong Pond 2 G Upper Wilson Pond 1 H Moose River 1 I Kennebec Interior 2 J Burnham Pond 1 K Ellis Pond 1 L Luther Pond 1 M Fish Pond 1 N Center Pond 1 O Knights Pond 1 P 2nd Roach Pond 0 Q 3rd Roach Pond 0 R Penobscot Pond 0 Weighted Avg. Revenues per Acre 0 7/1/2006 1 7/1/2007 2 7/1/2008 3 7/1/2009 4 7/1/2010 5 7/1/2011 6 7/1/2012 7 7/1/2013 8 7/1/2014 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $54,000 $54,000 $54,000 $54,000 $54,000 $54,000 $26,000 $72,000 $72,000 $72,000 $72,000 $72,000 $72,000 $72,000 $72,000 $36,400 $26,000 $54,000 $54,000 $54,000 $26,000 $54,000 $54,000 $26,000 $54,000 $54,000 $54,000 $54,000 $54,000 $54,000 $0 $0 $0 $41,218 $58,320 $58,320 $58,320 $58,320 $58,320 $58,320 $27,040 $77,760 $77,760 $77,760 $77,760 $77,760 $77,760 $77,760 $77,760 $37,856 $27,040 $58,320 $58,320 $58,320 $27,040 $58,320 $58,320 $27,040 $58,320 $58,320 $58,320 $58,320 $58,320 $58,320 $0 $0 $0 $43,902 $62,986 $62,986 $62,986 $62,986 $62,986 $62,986 $28,122 $83,981 $83,981 $83,981 $83,981 $83,981 $83,981 $83,981 $83,981 $39,370 $28,122 $62,986 $62,986 $62,986 $28,122 $62,986 $62,986 $28,122 $62,986 $62,986 $62,986 $62,986 $62,986 $62,986 $0 $0 $0 $46,775 $68,024 $68,024 $68,024 $68,024 $68,024 $68,024 $29,246 $90,699 $90,699 $90,699 $90,699 $90,699 $90,699 $90,699 $90,699 $40,945 $29,246 $68,024 $68,024 $68,024 $29,246 $68,024 $68,024 $29,246 $68,024 $68,024 $68,024 $68,024 $68,024 $68,024 $0 $0 $0 $49,853 $73,466 $73,466 $73,466 $73,466 $73,466 $73,466 $30,416 $97,955 $97,955 $97,955 $97,955 $97,955 $97,955 $97,955 $97,955 $42,583 $30,416 $73,466 $73,466 $73,466 $30,416 $73,466 $73,466 $30,416 $73,466 $73,466 $73,466 $73,466 $73,466 $73,466 $0 $0 $0 $53,150 $79,344 $79,344 $79,344 $79,344 $79,344 $79,344 $31,633 $105,792 $105,792 $105,792 $105,792 $105,792 $105,792 $105,792 $105,792 $44,286 $31,633 $79,344 $79,344 $79,344 $31,633 $79,344 $79,344 $31,633 $79,344 $79,344 $79,344 $79,344 $79,344 $79,344 $0 $0 $0 $56,684 $85,691 $85,691 $85,691 $85,691 $85,691 $85,691 $32,898 $114,255 $114,255 $114,255 $114,255 $114,255 $114,255 $114,255 $114,255 $46,058 $32,898 $85,691 $85,691 $85,691 $32,898 $85,691 $85,691 $32,898 $85,691 $85,691 $85,691 $85,691 $85,691 $85,691 $0 $0 $0 $60,472 $92,547 $92,547 $92,547 $92,547 $92,547 $92,547 $34,214 $123,395 $123,395 $123,395 $123,395 $123,395 $123,395 $123,395 $123,395 $47,900 $34,214 $92,547 $92,547 $92,547 $34,214 $92,547 $92,547 $34,214 $92,547 $92,547 $92,547 $92,547 $92,547 $92,547 $0 $0 $0 $64,532 Appendix A-2 Page 11 of 22 3/15/2006 *** DRAFT *** DEVELOPMENT LOTS CASH FLOWS PLUM CREEK APRIL 2005 RESOURCE PLAN TRS Revenues - HBU Sales to Developers A Brassua Lake 1 A Brassua Lake 1 A Brassua Lake 1 A Brassua Lake 1 A Brassua Lake 1 A Brassua Lake 1 A Brassua Lake 2 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 2 C Lily Bay Township 2 D Long Pond 1 E Indian Pond 1 F Prong Pond 1 F Prong Pond 2 G Upper Wilson Pond 1 H Moose River 1 I Kennebec Interior 2 J Burnham Pond 1 K Ellis Pond 1 L Luther Pond 1 M Fish Pond 1 N Center Pond 1 O Knights Pond 1 P 2nd Roach Pond 0 Q 3rd Roach Pond 0 R Penobscot Pond 0 TOTAL REVENUES 0 7/1/2006 1 7/1/2007 2 7/1/2008 3 7/1/2009 4 7/1/2010 5 7/1/2011 6 7/1/2012 7 7/1/2013 8 7/1/2014 $0 $810,000 $874,800 $944,784 $1,020,367 $1,101,996 $1,190,156 $1,285,368 $1,388,198 $0 $810,000 $874,800 $944,784 $1,020,367 $1,101,996 $1,190,156 $1,285,368 $1,388,198 $0 $1,194,750 $1,290,330 $1,393,556 $1,505,041 $1,625,444 $1,755,480 $1,895,918 $2,047,592 $0 $506,250 $546,750 $590,490 $637,729 $688,748 $743,847 $803,355 $867,624 $0 $303,750 $328,050 $354,294 $382,638 $413,249 $446,308 $482,013 $520,574 $0 $202,500 $218,700 $236,196 $255,092 $275,499 $297,539 $321,342 $347,049 $0 $1,300,000 $1,352,000 $1,406,080 $1,462,323 $1,520,816 $1,581,649 $1,644,915 $1,710,711 $0 $270,000 $291,600 $314,928 $340,122 $367,332 $396,719 $428,456 $462,733 $0 $675,000 $729,000 $787,320 $850,306 $918,330 $991,796 $1,071,140 $1,156,831 $0 $216,000 $233,280 $251,942 $272,098 $293,866 $317,375 $342,765 $370,186 $0 $162,000 $174,960 $188,957 $204,073 $220,399 $238,031 $257,074 $277,640 $0 $837,000 $903,960 $976,277 $1,054,379 $1,138,729 $1,229,828 $1,328,214 $1,434,471 $0 $54,000 $58,320 $62,986 $68,024 $73,466 $79,344 $85,691 $92,547 $0 $54,000 $58,320 $62,986 $68,024 $73,466 $79,344 $85,691 $92,547 $0 $513,000 $554,040 $598,363 $646,232 $697,931 $753,765 $814,067 $879,192 $0 $1,706,250 $1,774,500 $1,845,480 $1,919,299 $1,996,071 $2,075,914 $2,158,951 $2,245,309 $0 $3,087,500 $3,211,000 $3,339,440 $3,473,018 $3,611,938 $3,756,416 $3,906,672 $4,062,939 $0 $1,620,000 $1,749,600 $1,889,568 $2,040,733 $2,203,992 $2,380,311 $2,570,736 $2,776,395 $0 $708,750 $765,450 $826,686 $892,821 $964,247 $1,041,386 $1,124,697 $1,214,673 $0 $607,500 $656,100 $708,588 $765,275 $826,497 $892,617 $964,026 $1,041,148 $0 $406,250 $422,500 $439,400 $456,976 $475,255 $494,265 $514,036 $534,597 $0 $607,500 $656,100 $708,588 $765,275 $826,497 $892,617 $964,026 $1,041,148 $0 $607,500 $656,100 $708,588 $765,275 $826,497 $892,617 $964,026 $1,041,148 $0 $487,500 $507,000 $527,280 $548,371 $570,306 $593,118 $616,843 $641,517 $0 $405,000 $437,400 $472,392 $510,183 $550,998 $595,078 $642,684 $694,099 $0 $162,000 $174,960 $188,957 $204,073 $220,399 $238,031 $257,074 $277,640 $0 $121,500 $131,220 $141,718 $153,055 $165,299 $178,523 $192,805 $208,230 $0 $121,500 $131,220 $141,718 $153,055 $165,299 $178,523 $192,805 $208,230 $0 $101,250 $109,350 $118,098 $127,546 $137,750 $148,769 $160,671 $173,525 $0 $101,250 $109,350 $118,098 $127,546 $137,750 $148,769 $160,671 $173,525 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $18,759,500 $19,980,760 $21,288,541 $22,689,317 $24,190,063 $25,798,292 $27,522,101 $29,370,213 Appendix A-2 Page 12 of 22 3/15/2006 *** DRAFT *** DEVELOPMENT LOTS CASH FLOWS 0 1 PLUM CREEK APRIL 2005 RESOURCE PLAN 7/1/2006 7/1/2007 EXPENSES TRS - Permitting, Development & Marketing Expenses per Acre A Brassua Lake 1 $0 $7,725 A Brassua Lake 1 $0 $7,725 A Brassua Lake 1 $0 $7,725 A Brassua Lake 1 $0 $7,725 A Brassua Lake 1 $0 $7,725 A Brassua Lake 1 $0 $7,725 A Brassua Lake 2 $0 $3,863 B Moosehead Lake 1 $0 $10,300 B Moosehead Lake 1 $0 $10,300 B Moosehead Lake 1 $0 $10,300 B Moosehead Lake 1 $0 $10,300 B Moosehead Lake 1 $0 $10,300 B Moosehead Lake 1 $0 $10,300 B Moosehead Lake 1 $0 $10,300 B Moosehead Lake 1 $0 $10,300 B Moosehead Lake 2 $0 $5,408 C Lily Bay Township 2 $0 $3,863 D Long Pond 1 $0 $7,725 E Indian Pond 1 $0 $7,725 F Prong Pond 1 $0 $7,725 F Prong Pond 2 $0 $3,863 G Upper Wilson Pond 1 $0 $7,725 H Moose River 1 $0 $7,725 I Kennebec Interior 2 $0 $3,863 J Burnham Pond 1 $0 $7,725 K Ellis Pond 1 $0 $7,725 L Luther Pond 1 $0 $7,725 M Fish Pond 1 $0 $7,725 N Center Pond 1 $0 $7,725 O Knights Pond 1 $0 $7,725 P 2nd Roach Pond 0 $0 $0 Q 3rd Roach Pond 0 $0 $0 R Penobscot Pond 0 $0 $0 2 7/1/2008 3 7/1/2009 4 7/1/2010 5 7/1/2011 6 7/1/2012 7 7/1/2013 8 7/1/2014 $7,957 $7,957 $7,957 $7,957 $7,957 $7,957 $3,978 $10,609 $10,609 $10,609 $10,609 $10,609 $10,609 $10,609 $10,609 $5,570 $3,978 $7,957 $7,957 $7,957 $3,978 $7,957 $7,957 $3,978 $7,957 $7,957 $7,957 $7,957 $7,957 $7,957 $0 $0 $0 $8,195 $8,195 $8,195 $8,195 $8,195 $8,195 $4,098 $10,927 $10,927 $10,927 $10,927 $10,927 $10,927 $10,927 $10,927 $5,737 $4,098 $8,195 $8,195 $8,195 $4,098 $8,195 $8,195 $4,098 $8,195 $8,195 $8,195 $8,195 $8,195 $8,195 $0 $0 $0 $8,441 $8,441 $8,441 $8,441 $8,441 $8,441 $4,221 $11,255 $11,255 $11,255 $11,255 $11,255 $11,255 $11,255 $11,255 $5,909 $4,221 $8,441 $8,441 $8,441 $4,221 $8,441 $8,441 $4,221 $8,441 $8,441 $8,441 $8,441 $8,441 $8,441 $0 $0 $0 $8,695 $8,695 $8,695 $8,695 $8,695 $8,695 $4,347 $11,593 $11,593 $11,593 $11,593 $11,593 $11,593 $11,593 $11,593 $6,086 $4,347 $8,695 $8,695 $8,695 $4,347 $8,695 $8,695 $4,347 $8,695 $8,695 $8,695 $8,695 $8,695 $8,695 $0 $0 $0 $8,955 $8,955 $8,955 $8,955 $8,955 $8,955 $4,478 $11,941 $11,941 $11,941 $11,941 $11,941 $11,941 $11,941 $11,941 $6,269 $4,478 $8,955 $8,955 $8,955 $4,478 $8,955 $8,955 $4,478 $8,955 $8,955 $8,955 $8,955 $8,955 $8,955 $0 $0 $0 $9,224 $9,224 $9,224 $9,224 $9,224 $9,224 $4,612 $12,299 $12,299 $12,299 $12,299 $12,299 $12,299 $12,299 $12,299 $6,457 $4,612 $9,224 $9,224 $9,224 $4,612 $9,224 $9,224 $4,612 $9,224 $9,224 $9,224 $9,224 $9,224 $9,224 $0 $0 $0 $9,501 $9,501 $9,501 $9,501 $9,501 $9,501 $4,750 $12,668 $12,668 $12,668 $12,668 $12,668 $12,668 $12,668 $12,668 $6,651 $4,750 $9,501 $9,501 $9,501 $4,750 $9,501 $9,501 $4,750 $9,501 $9,501 $9,501 $9,501 $9,501 $9,501 $0 $0 $0 Appendix A-2 Page 13 of 22 3/15/2006 *** DRAFT *** DEVELOPMENT LOTS CASH FLOWS PLUM CREEK APRIL 2005 RESOURCE PLAN TRS - PD&M EXPENSES A Brassua Lake 1 A Brassua Lake 1 A Brassua Lake 1 A Brassua Lake 1 A Brassua Lake 1 A Brassua Lake 1 A Brassua Lake 2 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 1 B Moosehead Lake 2 C Lily Bay Township 2 D Long Pond 1 E Indian Pond 1 F Prong Pond 1 F Prong Pond 2 G Upper Wilson Pond 1 H Moose River 1 I Kennebec Interior 2 J Burnham Pond 1 K Ellis Pond 1 L Luther Pond 1 M Fish Pond 1 N Center Pond 1 O Knights Pond 1 P 2nd Roach Pond 0 Q 3rd Roach Pond 0 R Penobscot Pond 0 Total TRS P,D&M Expenses 0 7/1/2006 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 1 7/1/2007 $115,875 $115,875 $170,916 $72,422 $43,453 $28,969 $193,125 $38,625 $96,563 $30,900 $23,175 $119,738 $7,725 $7,725 $73,388 $253,477 $458,672 $231,750 $101,391 $86,906 $60,352 $86,906 $86,906 $72,422 $57,938 $23,175 $17,381 $17,381 $14,484 $14,484 $0 $0 $0 $2,722,097 2 7/1/2008 $119,351 $119,351 $176,043 $74,595 $44,757 $29,838 $198,919 $39,784 $99,459 $31,827 $23,870 $123,330 $7,957 $7,957 $75,589 $261,081 $472,432 $238,703 $104,432 $89,513 $62,162 $89,513 $89,513 $74,595 $59,676 $23,870 $17,903 $17,903 $14,919 $14,919 $0 $0 $0 $2,803,760 3 7/1/2009 $122,932 $122,932 $181,324 $76,832 $46,099 $30,733 $204,886 $40,977 $102,443 $32,782 $24,586 $127,030 $8,195 $8,195 $77,857 $268,913 $486,605 $245,864 $107,565 $92,199 $64,027 $92,199 $92,199 $76,832 $61,466 $24,586 $18,440 $18,440 $15,366 $15,366 $0 $0 $0 $2,887,873 4 7/1/2010 $126,620 $126,620 $186,764 $79,137 $47,482 $31,655 $211,033 $42,207 $105,516 $33,765 $25,324 $130,840 $8,441 $8,441 $80,193 $276,981 $501,203 $253,239 $110,792 $94,965 $65,948 $94,965 $94,965 $79,137 $63,310 $25,324 $18,993 $18,993 $15,827 $15,827 $0 $0 $0 $2,974,509 5 7/1/2011 $130,418 $130,418 $192,367 $81,511 $48,907 $32,605 $217,364 $43,473 $108,682 $34,778 $26,084 $134,766 $8,695 $8,695 $82,598 $285,290 $516,239 $260,837 $114,116 $97,814 $67,926 $97,814 $97,814 $81,511 $65,209 $26,084 $19,563 $19,563 $16,302 $16,302 $0 $0 $0 $3,063,744 6 7/1/2012 $134,331 $134,331 $198,138 $83,957 $50,374 $33,583 $223,885 $44,777 $111,942 $35,822 $26,866 $138,809 $8,955 $8,955 $85,076 $293,849 $531,726 $268,662 $117,540 $100,748 $69,964 $100,748 $100,748 $83,957 $67,165 $26,866 $20,150 $20,150 $16,791 $16,791 $0 $0 $0 $3,155,656 7 7/1/2013 $138,361 $138,361 $204,082 $86,476 $51,885 $34,590 $230,601 $46,120 $115,301 $36,896 $27,672 $142,973 $9,224 $9,224 $87,629 $302,664 $547,678 $276,722 $121,066 $103,771 $72,063 $103,771 $103,771 $86,476 $69,180 $27,672 $20,754 $20,754 $17,295 $17,295 $0 $0 $0 $3,250,326 8 7/1/2014 $142,512 $142,512 $210,205 $89,070 $53,442 $35,628 $237,519 $47,504 $118,760 $38,003 $28,502 $147,262 $9,501 $9,501 $90,257 $311,744 $564,109 $285,023 $124,698 $106,884 $74,225 $106,884 $106,884 $89,070 $71,256 $28,502 $21,377 $21,377 $17,814 $17,814 $0 $0 $0 $3,347,836 Appendix A-2 Page 14 of 22 3/15/2006 *** DRAFT *** DEVELOPMENT LOTS CASH FLOWS 0 PLUM CREEK APRIL 2005 RESOURCE PLAN 7/1/2006 MAINE TRANSFER TAX ON TRS HBU SALE 0 A Brassua Lake 1 0 A Brassua Lake 1 0 A Brassua Lake 1 0 A Brassua Lake 1 0 A Brassua Lake 1 0 A Brassua Lake 1 0 A Brassua Lake 2 0 B Moosehead Lake 1 0 B Moosehead Lake 1 0 B Moosehead Lake 1 0 B Moosehead Lake 1 0 B Moosehead Lake 1 0 B Moosehead Lake 1 0 B Moosehead Lake 1 0 B Moosehead Lake 1 0 B Moosehead Lake 2 0 C Lily Bay Township 2 0 D Long Pond 1 0 E Indian Pond 1 0 F Prong Pond 1 0 F Prong Pond 2 0 G Upper Wilson Pond 1 0 H Moose River 1 0 I Kennebec Interior 2 0 J Burnham Pond 1 0 K Ellis Pond 1 0 L Luther Pond 1 0 M Fish Pond 1 0 N Center Pond 1 0 O Knights Pond 1 0 P 2nd Roach Pond 0 0 Q 3rd Roach Pond 0 0 R Penobscot Pond 0 $0 Subtotal Maine Transfer Tax on TRS HBU Sale 1 7/1/2007 1,782 1,782 2,629 1,114 669 446 2,860 594 1,485 475 356 1,841 119 119 1,129 3,754 6,793 3,564 1,560 1,337 894 1,337 1,337 1,073 891 356 267 267 223 223 0 0 0 $41,275 2 7/1/2008 1,925 1,925 2,839 1,203 723 482 2,974 642 1,604 514 385 1,989 129 129 1,220 3,904 7,064 3,850 1,684 1,444 930 1,444 1,444 1,115 963 385 289 289 241 241 0 0 0 $43,970 3 7/1/2009 2,079 2,079 3,067 1,299 780 520 3,094 693 1,733 554 416 2,148 139 139 1,317 4,060 7,347 4,158 1,819 1,560 967 1,560 1,560 1,161 1,040 416 312 312 261 261 0 0 0 $46,849 4 7/1/2010 2,245 2,245 3,312 1,404 843 562 3,218 749 1,871 600 450 2,320 151 151 1,422 4,223 7,642 4,490 1,965 1,684 1,005 1,684 1,684 1,207 1,123 450 338 338 282 282 0 0 0 $49,937 5 7/1/2011 2,424 2,424 3,576 1,516 910 606 3,346 809 2,021 647 485 2,506 162 162 1,536 4,392 7,946 4,849 2,122 1,818 1,046 1,818 1,818 1,255 1,212 485 364 364 304 304 0 0 0 $53,227 6 7/1/2012 2,619 2,619 3,862 1,637 982 656 3,480 873 2,182 699 525 2,706 175 175 1,659 4,567 8,264 5,237 2,291 1,965 1,088 1,965 1,965 1,306 1,310 525 394 394 328 328 0 0 0 $56,774 7 7/1/2013 2,828 2,828 4,171 1,768 1,062 707 3,619 943 2,357 755 567 2,923 189 189 1,792 4,750 8,595 5,656 2,475 2,122 1,132 2,122 2,122 1,357 1,415 567 425 425 354 354 0 0 0 $60,567 8 7/1/2014 3,055 3,055 4,506 1,910 1,146 765 3,764 1,019 2,545 815 612 3,156 205 205 1,935 4,940 8,939 6,108 2,673 2,291 1,177 2,291 2,291 1,412 1,528 612 459 459 383 383 0 0 0 $64,636 Appendix A-2 Page 15 of 22 3/15/2006 *** DRAFT *** DEVELOPMENT LOTS CASH FLOWS PLUM CREEK APRIL 2005 RESOURCE PLAN CASH FLOW ANALYSIS ($000) Cash Flow Date REIT to TRS Transfer Revenues HBU Sales Revenues REIT to TRS Transfer Maine Tree Growth tax penalty Lost stumpage value Deferred Maine Transfer Tax (REIT) TRS Sale to Developer PD&M Expenses Deferred Maine Transfer Tax (TRS) Maine Transfer Tax (HBU Sale) Maine income taxes Federal income taxes CASH FLOW FOR DIVIDENDS Discount Factor where r = PV Dividend Cash Flows 7.0% 0 7/1/2006 1 7/1/2007 2 7/1/2008 3 7/1/2009 4 7/1/2010 5 7/1/2011 6 7/1/2012 7 7/1/2013 8 7/1/2014 7/1/2006 7/1/2007 7/1/2008 7/1/2009 7/1/2010 7/1/2011 7/1/2012 7/1/2013 7/1/2014 $0 $5,285,625 $5,285,625 $5,285,625 $5,285,625 $5,285,625 $5,285,625 $5,285,625 $5,285,625 $0 $18,759,500 $19,980,760 $21,288,541 $22,689,317 $24,190,063 $25,798,292 $27,522,101 $29,370,213 $0 -$1,857,745 -$1,979,871 -$2,110,649 -$2,250,727 -$2,400,801 -$2,561,624 -$2,734,005 -$2,918,816 $0 -$35,376 -$35,376 -$35,376 -$35,376 -$35,376 -$35,376 -$35,376 -$35,376 $0 -$11,628 -$11,628 -$11,628 -$11,628 -$11,628 -$11,628 -$11,628 -$11,628 $0 -$2,722,097 -$2,803,760 -$2,887,873 $0 -$11,628 -$11,628 -$11,628 $0 -$41,275 -$43,970 -$46,849 $0 -$789,513 -$880,132 -$977,470 $0 -$2,818,066 -$3,141,521 -$3,488,956 $0 $10,472,172 $11,072,874 $11,718,111 1.00000 $0 $75.6 1.07000 $9,787,077 1.14490 $9,671,477 1.22504 $9,565,469 -$2,974,509 -$11,628 -$49,937 -$1,082,038 -$3,862,199 $12,411,276 1.31080 $9,468,503 -$3,063,744 -$11,628 -$53,227 -$1,194,391 -$4,263,226 $13,156,041 1.40255 $9,380,076 -$3,155,656 -$11,628 -$56,774 -$1,315,120 -$4,694,153 $13,956,333 1.50073 $9,299,694 -$3,250,326 -$11,628 -$60,567 -$1,444,869 -$5,157,278 $14,816,423 1.60578 $9,226,924 -$3,347,836 -$11,628 -$64,636 -$1,584,331 -$5,655,069 $15,740,892 1.71819 $9,161,342 NPV DIVIDEND CASH FLOWS ($mm) Appendix A-2 Page 16 of 22 3/15/2006 *** DRAFT *** MILL SITES Parcel description Location of parcel (county) Lot type Size of parcel (acres) 1998 cost basis ($/acre) Tree Growth valuation ($/acre) Harvest area lost (% acres) 2006 HBU appraisal ($/acre) Transfer price scalar (%HBU) HBU inflation factor PD&M inflation per year Year sold to developer $ 1998 REIT Acquisition Cost 200,000 PLUM CREEK APRIL 2005 RESOURCE PLAN 1000-acre mill site in Greenville sold in 2008 Piscataquis 3 1000 $200 $118 50% $1,000 30% 1.061 3% 2008 HBU Appraisal/Price $ (assumes Mixed Wood) Average Annual Inflation 1,000,000 2006 3% $ 2008 1,060,900 =====> $ $ $ $ Transfer to TRS (installment sale) =====> HBU Sale to Developer Trees Land Total PD&M $ $ $ 118,100 81,900 200,000 118,100 881,900 1,000,000 (150,000) 300,000 3% $ $ $ $ 118,100 942,800 1,060,900 (159,135) REIT->TRS transfer price (HBU Appraisal * Transfer price scalar) $ Cash Flows: HBU sales revenues 50% Assessed value of property (% of HBU value) 20% Maine tree growth tax penalty (based on assessed value) 3.0% Lost stumpage value REIT portion of Maine transfer tax on REIT->TRS transfer (deferred) 15.0% P,D&M expenses (at TRS) TRS portion of Maine transfer tax on REIT->TRS transfer (deferred) TRS portion of Maine transfer tax on TRS HBU sale Taxable TRS income for Maine income taxes 8.93% Maine income tax on TRS HBU sale TRS Ordinary income taxable at Federal Rate 35.00% Federal income taxes TRS note repayment to REIT TRS Dividend Cash Flows to S/Hs REIT Dividend Cash Flows to S/Hs 7.00% $ $ 530,450 $ $ $ $ $ $ $ $ 532,681 $ 485,112 $ $ $ $ TOTAL DIVIDEND CASH FLOWS $ $ $533,776 1,060,900 (66,090) (3,543) (660) (159,135) (660) (2,334) (47,568) (169,789) (300,000) 311,120 300,000 611,120 533,776 DCF Value Total Cash Flows (2006) Total DCF Value to REIT S/Hs (2006) Appendix A-2 Page 17 of 22 3/15/2006 *** DRAFT *** CAMPGROUNDS Parcel description Location of parcel (county) Lot type Size of parcel (acres) 1998 cost basis ($/acre) Tree Growth valuation ($/acre) Harvest area lost (% acres) 2006 HBU appraisal ($/acre) Transfer price scalar (%HBU) HBU inflation factor PD&M inflation per year Year sold to developer $ 1998 REIT Acquisition Cost 120,000 PLUM CREEK APRIL 2005 RESOURCE PLAN 600 acres of campgrounds; split between counties; 2008 sales Both 3 600 $200 $122 50% $10,000 30% 1.061 3% 2008 HBU Appraisal/Price $ (assumes Mixed Wood) Average Annual Inflation 6,000,000 2006 3% $ 2008 6,365,400 =====> $ $ $ $ Transfer to TRS (installment sale) =====> HBU Sale to Developer Trees Land Total PD&M $ $ $ 72,930 47,070 120,000 72,930 5,927,070 6,000,000 (900,000) 1,800,000 3% $ $ $ $ 72,930 6,292,470 6,365,400 (954,810) REIT->TRS transfer price (HBU Appraisal * Transfer price scalar) $ Cash Flows: HBU sales revenues 50% Assessed value of property (% of HBU value) 20% Maine tree growth tax penalty (based on assessed value) 3.0% Lost stumpage value REIT portion of Maine transfer tax on REIT->TRS transfer (deferred) 15.0% P,D&M expenses (at TRS) TRS portion of Maine transfer tax on REIT->TRS transfer (deferred) TRS portion of Maine transfer tax on TRS HBU sale Taxable TRS income for Maine income taxes 8.93% Maine income tax on TRS HBU sale TRS Ordinary income taxable at Federal Rate 35.00% Federal income taxes TRS note repayment to REIT TRS Dividend Cash Flows to S/Hs REIT Dividend Cash Flows to S/Hs 7.00% $ $ 3,182,700 $ $ $ $ $ $ $ $ 2,980,086 $ 2,713,964 $ $ $ $ TOTAL DIVIDEND CASH FLOWS $ $ $3,107,633 6,365,400 (612,540) (2,188) (3,960) (954,810) (3,960) (14,004) (266,122) (949,887) (1,800,000) 1,757,929 1,800,000 3,557,929 3,107,633 DCF Value Total Cash Flows (2006) Total DCF Value to REIT S/Hs (2006) Appendix A-2 Page 18 of 22 3/15/2006 *** DRAFT *** RESORTS Parcel description Location of parcel (county) Lot type Size of parcel (acres) 1998 cost basis ($/acre) Tree Growth valuation ($/acre) Harvest area lost (% acres) 2006 HBU appraisal ($/acre) Transfer price scalar (%HBU) HBU inflation factor PD&M inflation per year Year sold to developer $ 1998 REIT Acquisition Cost 700,000 PLUM CREEK APRIL 2005 RESOURCE PLAN Two resorts -- one in Lily Bay one at Brassua; sales in 2010 Both 3 3500 $200 $122 50% $1,000 30% 1.126 3% 2010 HBU Appraisal/Price $ (assumes Mixed Wood) Average Annual Inflation 3,500,000 2006 3% $ 2010 3,939,281 =====> $ $ $ $ Transfer to TRS (installment sale) =====> HBU Sale to Developer Trees Land Total PD&M $ $ $ 425,425 274,575 700,000 425,425 3,074,575 3,500,000 (525,000) 1,050,000 3% $ $ $ $ 425,425 3,513,856 3,939,281 (590,892) REIT->TRS transfer price (HBU Appraisal * Transfer price scalar) $ Cash Flows: HBU sales revenues 50% Assessed value of property (% of HBU value) 20% Maine tree growth tax penalty (based on assessed value) 3.0% Lost stumpage value REIT portion of Maine transfer tax on REIT->TRS transfer (deferred) 15.0% P,D&M expenses (at TRS) TRS portion of Maine transfer tax on REIT->TRS transfer (deferred) TRS portion of Maine transfer tax on TRS HBU sale Taxable TRS income for Maine income taxes 8.93% Maine income tax on TRS HBU sale TRS Ordinary income taxable at Federal Rate 35.00% Federal income taxes TRS note repayment to REIT TRS Dividend Cash Flows to S/Hs REIT Dividend Cash Flows to S/Hs 7.00% $ $ 1,969,640 $ $ $ $ $ $ $ $ 2,033,484 $ 1,851,894 $ $ $ $ TOTAL DIVIDEND CASH FLOWS $ $ $1,707,862 3,939,281 (253,928) (12,763) (2,310) (590,892) (2,310) (8,667) (181,590) (648,163) (1,050,000) 1,188,658 1,050,000 2,238,658 1,707,862 DCF Value Total Cash Flows (2006) Total DCF Value to REIT S/Hs (2006) Appendix A-2 Page 19 of 22 3/15/2006 *** DRAFT *** AFFORDABLE HOUSING Parcel description Location of parcel (county) Lot type Size of parcel (acres) 1998 cost basis ($/acre) Tree Growth valuation ($/acre) Harvest area lost (% acres) 2006 HBU appraisal ($/acre) Transfer price scalar (%HBU) HBU inflation factor PD&M inflation per year Year sold to developer $ 1998 REIT Acquisition Cost 10,000 PLUM CREEK APRIL 2005 RESOURCE PLAN 50-acre site in Greenville; donated in 2008 Piscataquis 3 50 $200 $118 50% $4,250 30% 1.061 3% 2008 HBU Appraisal/Price $ (assumes Mixed Wood) Average Annual Inflation 212,500 2006 3% $ 2008 225,441 =====> $ $ $ $ Transfer to TRS (installment sale) =====> HBU Sale to Developer Trees Land Total PD&M $ $ $ 5,905 4,095 10,000 5,905 206,595 212,500 (31,875) 63,750 3% $ $ $ $ 5,905 219,536 225,441 (33,816) REIT->TRS transfer price (HBU Appraisal * Transfer price scalar) $ Cash Flows: HBU sales revenues 50% Assessed value of property (% of HBU value) 20% Maine tree growth tax penalty (based on assessed value) 3.0% Lost stumpage value REIT portion of Maine transfer tax on REIT->TRS transfer (deferred) 15.0% P,D&M expenses (at TRS) TRS portion of Maine transfer tax on REIT->TRS transfer (deferred) TRS portion of Maine transfer tax on TRS HBU sale Taxable TRS income for Maine income taxes 8.93% Maine income tax on TRS HBU sale TRS Ordinary income taxable at Federal Rate 35.00% Federal income taxes TRS note repayment to REIT TRS Dividend Cash Flows to S/Hs REIT Dividend Cash Flows to S/Hs 7.00% $ $ 112,721 $ $ $ $ $ $ $ $ 106,694 $ 97,166 $ $ $ $ TOTAL DIVIDEND CASH FLOWS $ $ $0 225,441 (20,544) (177) (141) (33,816) (141) (496) (9,528) (34,008) (63,750) 62,840 63,750 126,590 110,569 DCF Value Total Cash Flows (2006) Total DCF Value to REIT S/Hs (2006) Appendix A-2 Page 20 of 22 3/15/2006 *** DRAFT *** SPORTING CAMPS Parcel description Location of parcel (county) Lot type Size of parcel (acres) 1998 cost basis ($/acre) Tree Growth valuation ($/acre) Harvest area lost (% acres) 2006 HBU appraisal ($/acre) Transfer price scalar (%HBU) HBU inflation factor PD&M inflation per year Year sold to developer $ 1998 REIT Acquisition Cost 16,000 PLUM CREEK APRIL 2005 RESOURCE PLAN 80 acres of sporting camps split between counties; 2009 sale; remains in Tree Growth Both 3 80 $200 $122 0% $1,500 30% 1.093 3% 2009 HBU Appraisal/Price $ (assumes Mixed Wood) Average Annual Inflation 120,000 2006 3% $ 2009 131,127 =====> $ $ $ $ Transfer to TRS (installment sale) =====> HBU Sale to Developer Trees Land Total PD&M $ $ $ 9,724 6,276 16,000 9,724 110,276 120,000 (18,000) 36,000 3% $ $ $ $ 9,724 121,403 131,127 (19,669) REIT->TRS transfer price (HBU Appraisal * Transfer price scalar) $ Cash Flows: HBU sales revenues 50% Assessed value of property (% of HBU value) 0% Maine tree growth tax penalty (based on assessed value) 3.0% Lost stumpage value REIT portion of Maine transfer tax on REIT->TRS transfer (deferred) 15.0% P,D&M expenses (at TRS) TRS portion of Maine transfer tax on REIT->TRS transfer (deferred) TRS portion of Maine transfer tax on TRS HBU sale Taxable TRS income for Maine income taxes 8.93% Maine income tax on TRS HBU sale TRS Ordinary income taxable at Federal Rate 35.00% Federal income taxes TRS note repayment to REIT TRS Dividend Cash Flows to S/Hs REIT Dividend Cash Flows to S/Hs 7.00% $ $ 65,564 $ $ $ $ $ $ $ $ 75,090 $ 68,384 $ $ $ $ TOTAL DIVIDEND CASH FLOWS $ $ $65,368 131,127 (292) (79) (19,669) (79) (289) (6,706) (23,934) (36,000) 44,079 36,000 80,079 65,368 DCF Value Total Cash Flows (2006) Total DCF Value to REIT S/Hs (2006) Appendix A-2 Page 21 of 22 3/15/2006 *** DRAFT *** CONSERVATION LAND/EASEMENT Parcel description Location of parcel (county) Lot type Size of parcel (acres) 1998 cost basis ($/acre) Tree Growth valuation ($/acre) Harvest area lost (% acres) 2006 HBU appraisal ($/acre) Transfer price scalar (%HBU) HBU inflation factor PD&M inflation per year Year sold to developer $ 1998 REIT Acquisition Cost 6,165,000 PLUM CREEK APRIL 2005 RESOURCE PLAN Sale to the State of Maine in 2008 of 30,825 acres at "The Roaches" (remains in Tree Growth, and is TransferTax exempt) Both 1 30,825 $200 $122 (assumes Mixed Wood) 0% $260 30% 1.166 3% 2008 Average Annual Inflation HBU Appraisal/Price $ 8,000,000 2006 8% $ 2008 9,331,200 =====> $ $ $ $ Transfer to TRS (installment sale) =====> Sale to State of Maine Trees Land Total PD&M $ $ $ 3,746,779 2,418,221 6,165,000 3,746,779 4,253,221 8,000,000 2,400,000 3% $ $ $ $ 3,746,779 5,584,421 9,331,200 - REIT->TRS transfer price (HBU Appraisal * Transfer price scalar) $ Cash Flows: HBU sales revenues 50% Assessed value of property (% of HBU value) 0% Maine tree growth tax penalty (based on assessed value) 8.0% Lost stumpage value REIT portion of Maine transfer tax on REIT->TRS transfer (deferred) 0% P,D&M expenses (at TRS) TRS portion of Maine transfer tax on REIT->TRS transfer (deferred) TRS portion of Maine transfer tax on TRS HBU sale Taxable TRS income for Maine income taxes 8.93% Maine income tax on TRS HBU sale TRS Ordinary income taxable at Federal Rate 35.00% Federal income taxes TRS note repayment to REIT TRS Dividend Cash Flows to S/Hs REIT Dividend Cash Flows to S/Hs 7.00% $ $ 4,665,600 $ $ $ $ $ $ $ $ 6,931,200 $ 6,312,244 $ $ $ $ TOTAL DIVIDEND CASH FLOWS $ $ $5,418,129 9,331,200 (299,742) (618,956) (2,209,285) (2,400,000) 3,803,216 2,400,000 6,203,216 5,418,129 DCF Value Total Cash Flows (2006) Total DCF Value to REIT S/Hs (2006) Appendix A-2 Page 22 of 22 3/15/2006 DRAFT 15 March 2006 APPENDIX B MOOSEHEAD LAKE AREA REAL ESTATE SALE INFORMATION Report from Michael Moniz DRAFT Michael Moniz Real Estate Appraisal & Consulting Services 183 Main Street PO Box 722 Lewiston, Maine 04240-0722 Office (207) 795-0108 February 17, 2006 Mr. Thomas Walker Industrial Economics Incorporated 2067 Massachusetts Avenue Cambridge, MA 02140 Re: Moosehead Lake area real estate sale information Dear Mr. Walker: Following our meeting of last month I have reviewed and researched the information requested at that time. I will cover the points under each topic heading: 1: Tree Growth Tax Penalties: The State and towns allow properties over 10 acres to be taxed at a lower value than just value. In some communities where a 30 acre parcel may have an assessment of $300,000 or $10,000/acre, under a Tree Growth Tax Classification the assessment may be as low as $350 or $10,500 to $500/acre or $15,000. Application of a $10/thousand tax rate could be the difference between annual real estate taxes of $3,000 VS $150 (at $500/acre). The property owner has to file an annual form and submit a forest management plan. However upon development of the parcel for something other than the growing of trees, removal from the Tax classification program is required. A penalty is paid based on 20% of the difference in assessed value. However the amount of penalty paid can vary greatly by the program removal sequence. In the above case, the penalty would be $57,000 if all of the 30 acres is removed at one time ($300,000 - $15,000 = $285,000 x 20% = $57,000). However if the 30 acres was divided into 3 ten acre lots the penalty would be much greater because the full tax assessment on a 10 acre lot would be higher per acre than a 30 acre lot. Each 10 acre lot would have an assessment of $20,000/acre or $200,000. To remove the 3 ten acre lots from tree growth would cost $39,000 a piece or a total of $117,000. The appraiser reviewed one proposed 36 lot subdivision where the penalty on a lot by lot basis would have been $450,000 VS the $172,800 to remove the area comprising the 36 lot at one time. In the case of the First Roach Pond Subdivision… the penalty for a single 4.73 acre lot removal assessed at $97,440 would have been $19,000 if paid for by the buyer. The lot was purchased for $65,000. In theory, the buyer have paid $84,000 for a buildable lot ($65,000 + $19,000) if the buyer paid the penalty. Even taking an average of $15,000 penalty per lot, the penalties paid by buyers would have amounted to $1,300,000 to the State. Appendix B Page 1 of 10 3/15/2006 DRAFT After approval of the subdivision but prior to the sale of the first lot, Plum Creek removed about 185 acres from Tree Growth and paid a penalty of $196,612.60 on April 30, 2002 for First Roach Pond South and on May 14, 2003 $195,963 was paid for the Tree Growth Penalty for First Roach West for about 160 acres according to the Maine Bureau of Taxation. In 2002 a penalty of $3,364.20 was paid for the removal of the open space/unbuildable lots in the subdivisions. The State Bureau of Taxation was not able to provide the acreages of removal from Tree Growth. Including open space lots transferred to the homeowners association and unsold lots, the subdivision was approximately 100 lots indicating a $4,000 penalty per lot removed. 2: Appreciation: A review of past sales in the files, and even a few sales and resales of the same land, show appreciation rates jumping all over the place. Factors affecting those rates are for the most part not locally controlled except for the supply of land and lots. The demand is affected by mortgage rates, equity in existing homes, sales of existing homes in High priced markets in southern Maine and southern New England. Very few sales of second home lots are to residents of the Somerset or Piscataquis County areas. It is noted that sales to date of the First Roach Pond subdivision by Plum Creek show 45% of all lots were to Maine residents, 28% to Massachusetts residents, followed by 9% to New Jersey and 4% to New Hampshire. The balance of the sales was to residents as far away as Kentucky and South Carolina. In the case of waterfront lots of 5 acres or less, an overall annual appreciation rate of 8% to 9% per year would appear reasonable over a 10 year cycle. It is noted that in some cases resales of vacant lots in the First Roach Subdivision grossly exceeded these rates. A lot purchased in May 2002 for $65,000 sold for $195,000 in August 2005. A lot purchased in November 2003 for $100,000 resold for $150,000 in September 2004. Two lots purchased in January 2003 and 2003 for $75,000 each resold in September and October of 2003 for $115,000. Are all of the lots worth almost $200,000 today? No, a few sales do not make the entire market picture. In hindsight, the lots could have been priced a bit higher initially. But the First Roach Pond subdivision was a new threshold for the Moosehead area. For back lots with or without deeded access appreciation rates would be at the most half or less of shorefront lots. The supply of interior lots is not limited by a fixed amount of shorefront. 4% for deeded shore access lots and 2 to 3% for interior lots would be reasonable. For the larger lots of 20 to 50 acres on the water – many of which can not be subdivided, an appreciation rate of 10% per year. These larger lots have traditionally had a great appeal to a segment of the market. For double the price of a single family residential lot of 3 to 5 acres the buyer gets 7 to 10 times the amount of land. If the economy weakens in the northeast, if interest rates or the unemployment rates rise by a couple points, the appreciation rates can be halved. If we have a recession, there will be no appreciation. Generally for second home lots, depreciation doesn’t occur. Prices just stay flat. For large tract acreage over 2,000 acres appreciation generally follows the growth rate of timber at 2% to 3%/year. 3: Pricing For 3 to 5 acre lots on Moosehead within a multi lot subdivision, pricing today could start at $175,000 to $200,000 per lot. On secondary ponds that price could start at $125,000 to $150,000. Appendix B Page 2 of 10 3/15/2006 DRAFT 4: Approved projects and those in the pipeline In Somerset County, a plan for 15 shorefront lots of less than 3 acres each was approved on Brassua Lake (John Willard) with marketing expected this spring. (Prices unknown) Marketing is ongoing for a large 40 lot, older approved subdivision of interior lots with asking prices of $75,000. Olson & Carlson LLC have an approval for 15 lots of 2 acres on Moosehead just north of Rockwood. Prices unknown. In Piscataquis County, Plans are being reviewed for a 150 lot subdivision on Burnt Jacket in Beaver Cove. Plum Creek has not submitted a revised plan. 5: Absorption How many lots can be sold in the Moosehead region per year? On a large subdivision basis of 50 lots, a reasonable approach would be to consider 30 to 40% of the lots in the first year, 20% to 30% in the second year, then 10% and 10% until sold out. How many lots can be sold in the region in a given year? In the whole study area that number could approach ___ per year based on a review of vacant land transactions between 2000 and 2005. 6: Industrial land There are two industrial parks in the Greenville area. A dozen lot park in Greenville and a 15 lot park in Greenville Junction (in Moosehead Junction). They been in existence for at least 15 years I believe. According to the Moosehead Sanitary District only 2 lots in Moosehead Junction have access to and are connected with Sewer lines. But water service is available according to AquaMaine and ties into the sewer lines are possible. Water service is available in the Greenville Industrial Park next to the Greenville Steam Company. According to the town office, this industrial park was sold out a few years ago but is not developed. The lots were sold at under cost prices of $4,000 to $8,000 with covenants requiring certain building sizes and job creation. All of the lots are in private hands. Two vacant lots in Moosehead Junction were sold in 2004 and 2005 ranging in size from 3.28 to 5.28 acres ranging in price from $18,200 to $27,500/acre. For model purposes, if the land has access to power, an off site water supply and offsite sewer services, a value of $30,000/acre should be used. If consideration is given to public road accessible land along a major state road a value estimate of $1,000/acre can be used. 7: 50 Acres in Greenville There are not many sales shown in Greenville itself. Some listings are available. I would suggest a $4,000 to $4,500/acre range for raw land with public road access and electrical and telephone services. 8: Campgrounds 9: Sporting Camps 10: “Resort designated” land value In the unincorporated Townships of Maine, an area of millions of acres and generalized zoning (mostly General Management), sale prices of land are mainly affected by three things: the amount of trees growing on the land at the time of purchase, whether the land is on a body of water, and lastly the size of the parcel. Appendix B Page 3 of 10 3/15/2006 DRAFT Any development more than a seasonal cottage will come under extensive review by the Land Use Regulation Commission. For the most part the few campgrounds in the area have been purchased over the year as going concerns, some have expanded. As far as “resorts”, the last “new” commercial sporting camp that the appraiser and the Maine Sporting Camp Association were aware of was built on land purchased in 1985 on Spencer Lake. It is now a private retreat. A search was made for land purchased for recreational resorts and campgrounds in areas not directly adjacent to I-95. Two sales were considered of note: On September 29, 2005 WHD Development LLC purchased 3,481 acres from the Gardner Land Company around Norton Pond in Brownville, Maine. Brownville is about 30 miles east of Greenville and 30 miles from the nearest exit on I-95. The site has access by active rail line and is proposed for large hotel and convention site. The property is under the Tree Growth Tax classification at the time of sale and was purchased for $576,186 or $165/acre. Brownville has no zoning outside of State mandated Shoreland zoning standards that affect areas with 250’ of the high water mark. The land was cut over timberland, reportedly with nominal standing timber value. The other sale involved the sale of the land under the Pittston Farm campground, cabins, and restaurant. 28.8 acres was sold for $168,300 or $5,843/acre in December 2003 to Mary Twitchell, the lease holder of 50 acres. The 28.8 acres and the buildings were sold to P & M enterprises for $1,250,000 on November 2, 2005. Pittston Farm is located 35 miles northwest of Greenville on Seeboomook Lake. A review of larger 40 + acre sales in the vicinity of Moosehead Lake, within a mile or so. Sales without water frontage were in the $1,400/acre range. Sales with shore frontage on Moosehead were $6,000 to $7,500/acre. In conclusion for basic raw land value I would suggest a value of $8,000 to $12,000/ acre for a waterfront site on Moosehead (west side is lower) and a value of $1,500/acre to $1,750/acre for anywhere in the direct vicinity (say 1 to 2 miles) of Moosehead lake but not on the water. These values can be considered for parcels from 50 acres to 500 acres. On smaller lakes and ponds, I would suggest using values of 50% of the above, $5,000 for other lake front and $750/acre for non waterfront sites. Appendix B Page 4 of 10 3/15/2006 DRAFT Seller: Plum Creek Land Company Frenchtown TWNSHP, ME First Roach Pond SHOREFRONT LOTS Buyer ASl devc Alexander Brakewood Burns Canedelero Canedelero Canedelero Collet Carter Daigle Dean Decoste Diamond Diskes Donahue Donahue Hyde Endrizzi Eng Esposito Feorenzo Ferguson 1stRoach Fister Fox Gardner Dutson Glazier Glenn Glenn Hardaswick Hatfield Jenkins Hughes Kearney Kirby Levasseur Lavin Lessard Libby MasonTR McReynolds McAllister McKenzie Moroun Osias Paine Poitras Savadore map/pl/lot 47/7/1 47/9/17 47/8/4 47/9/25 47/9/18 47/9/19 47/6/2 47/7/2,11 47/10/9 47/8/1 47/8/8 47/10/4 47/9/20 47/7/6 47/9/22 47/9/23 47/10/3 47/9/15 47/7/13 47/9/21 47/7/9 47/10/6 47/9/16 47/10/7 47/8/2 47/9/3 47/10/8 47/10/2 47/8/3 47/7/16 47/6/1 47/10/5 47/9/4 47/9/9 47/6/4 &5 47/7/8 47/9/10 47/7/4 47/7/7 47/7/3 47/7/14,15 47/9/2 47/10/1 47/6/3 47/6/5,6 47/9/7 47/9/24 47/10/10 47/7/10 date 5/16/2002 11/27/2002 12/16/2002 11/4/2003 12/23/2002 12/23/2002 4/30/2002 4/30/2002 11/11/2003 9/13/2003 9/11/2002 1/12/2004 1/21/2003 4/10/2002 1/31/2002 1/31/2003 1/5/2004 12/6/2002 4/30/2002 12/16/2002 6/19/2002 8/20/2003 12/6/2002 3/12/2004 9/13/2002 1/15/2003 12/10/2003 11/5/2003 9/16/2002 4/30/2002 4/30/2002 9/12/2003 2/20/2003 11/26/2003 5/24/2002 4/24/2002 11/26/2002 5/20/2002 4/16/2002 4/30/2002 4/30/2002 4/23/2003 11/14/2003 4/30/2002 4/30/2002 2/28/2003 2/28/2003 4/16/2004 4/30/2002 $total $65,000 $75,000 $125,000 $60,000 $75,000 $75,000 $65,000 $130,000 $100,000 $150,000 $45,000 $100,000 $75,000 $65,000 $75,000 $75,000 $100,000 $75,000 $65,000 $75,000 $65,000 $100,000 $75,000 $100,000 $125,000 $85,000 $100,000 $100,000 $125,000 $65,000 $65,000 $100,000 $85,000 $85,000 $130,000 $65,000 $85,000 $65,000 $70,000 $65,000 $130,000 $85,000 $100,000 $60,000 $250,000 $85,000 $130,000 $100,000 $65,000 acres 2.93 1.97 11.08 3.26 2.12 2.3 4.73 4.79 1.85 11.04 1 1.98 1.38 2.31 1.49 1.47 2.03 1.71 2 1.33 2.03 1.92 1.81 1.97 10.81 1.54 1.91 2.06 10.45 1.81 3.75 1.85 1.31 2 8.2 2.03 2.11 2.58 2.8 2.62 3.79 1.06 1.84 4.25 22.1 2.3 2.53 1.75 2.03 Water front 251 201 563 292 205 202 239 447 224 865 223 202 202 371 250 203 217 200 200 200 200 240 200 210 520 200 201 207 617 200 310 200 202 200 608 202 200 241 343 240 407 202 201 440 1018 202 267 225 201 $/acre $22,184 $38,071 $11,282 $18,405 $35,377 $32,609 $13,742 $27,140 $54,054 $13,587 $45,000 $50,505 $54,348 $28,139 $50,336 $51,020 $49,261 $43,860 $32,500 $56,391 $32,020 $52,083 $41,436 $50,761 $11,563 $55,195 $52,356 $48,544 $11,962 $35,912 $17,333 $54,054 $64,885 $42,500 $15,854 $32,020 $40,284 $25,194 $25,000 $24,809 $34,301 $80,189 $54,348 $14,118 $11,312 $36,957 $51,383 $57,143 $32,020 $/WFF $259 $373 $222 $205 $366 $371 $272 $291 $446 $173 $202 $495 $371 $175 $300 $369 $461 $375 $325 $375 $325 $417 $375 $476 $240 $425 $498 $483 $203 $325 $210 $500 $421 $425 $214 $322 $425 $270 $204 $271 $319 $421 $498 $136 $246 $421 $487 $444 $323 Appendix B Page 5 of 10 3/15/2006 DRAFT Seller: Plum Creek Land Company Frenchtown TWNSHP, ME First Roach Pond SHOREFRONT LOTS Water front feet 200 201 201 202 200 308 201 204 581 200 200 17,159’ Buyer Solari Sawyer Sol Sullivan Turner Urquart Vaglia Watt Weiger Whelpley Zeller map/pl/lot 47/9/13 47/9/8 47/9/1 47/9/5 47/9/6 47/7/5 47/9/11 47/9/12 47/8/7 47/9/14 47/7/12 Date 12/6/2002 11/22/2002 1/17/2003 12/27/2002 12/31/2002 4/10/2002 12/3/2002 11/26/2002 9/26/2002 12/6/2002 4/30/2002 Gross $/Acre $/LOT $total $75,000 $85,000 $85,000 $85,000 $85,000 $65,000 $85,000 $85,000 $125,000 $75,000 $65,000 $5,345,000 $26,398 $87,623 acres 2 2.31 1.58 1.4 1.83 3.09 2.15 2.31 12.02 1.76 2.05 202 $/acre $37,500 $36,797 $53,797 $60,714 $46,448 $21,036 $39,535 $36,797 $10,399 $42,614 $31,707 $/WFF $375 $423 $423 $421 $425 $211 $423 $417 $215 $375 $325 $311 Vacant Lots on First Roach were selling on the open market, as opposed to cottage lot leaseholders, for the following: 1989 $39,900 .46 acres 100’ WFF $25,000 .46 acres 100’ WFF 1991 $23,000 .49 acres 100’ WFF $35,000 2.1 acres 495’ WFF 1992 $35,000 1.06 acres 100’ WFF $35,000 1.04 acres 100’ WFF 8% to 9% per year appreciation over 10 years Appendix B Page 6 of 10 3/15/2006 DRAFT Seller: Plum Creek Land Company Frenchtown TWNSHP, ME First Roach Pond INTERIOR LOTS Buyer Moss Blair Dunn Jenkins Webber Waterman Mnt Vista Dutson Dutson Mnt Vista Dutson Dutson Moody Philbrick Jenkins map/pl/lot 47/9/32 47/10/20 47/11/4 47/9/29 47/9/31 47/10/ 47/9/27 47/10/13 47/10/14 47/9/28 47/10/11 47/10/12 47/9/30 47/9/26 47/9/29 date 1/20/05 8/16/2004 12/4/2003 3/14/2005 11/29/2002 6/27/2005 6/15/2005 6/28/2005 6/28/2005 9/23/2005 9/8/2005 9/8/2005 5/16/2005 5/9/2005 3/1/2005 Gross $/Acre $/LOT $total $60,000 $60,000 $75,000 $60,000 $60,000 $65,000 $60,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $60,000 $955,000 $20,684 63,667 acres 3 2.39 2.15 3.66 3.68 3 3.64 2.55 2.51 3.59 2.54 2.55 3.68 3.57 3.66 46 $/acre $20,000 $25,105 $34,884 $16,393 $16,304 $21,667 $16,484 $25,490 $25,896 $18,106 $25,591 $25,490 $17,663 $18,207 $16,393 Seller: Plum Creek Land Company Frenchtown TWNSHP, ME First Roach Pond 76 of 87 Sold Frequency 2002 2003 2004 2005 shorefront 40 17 4 0 interior 1 1 1 12 Shorefront $3,345,000 $1,600,000 $400,000 $0 $5,345,000 Interior $60,000 $75,000 $60,000 $760,000 $955,000 Average Shorefront $83,625 $94,118 $100,000 Appendix B Page 7 of 10 3/15/2006 DRAFT Seller: Moosehead Wildlands inc West side Moosehead Lake Tomhegan TWNSHP SHOREFRONT Water front 300 148 148 211 204' 200 204 214 1425 Buyer Griffith Libbey Miller Ribidoux Ajootian Pinkhame Sbrilli Gosling map/pl/lot 37/1/7.10 37/7/104,105 37/2/34 37/9/9 37/9/3 37/1/7.7 37/9/10 37/9/2 date 12/8/2003 10/30/2002 7/29/2002 2/16/2005 1/14/2005 11/17/2001 12/30/2004 1/24/2005 $total $125,000 $90,000 $80,000 $145,000 $132,500 $40,000 $135,000 $125,000 $872,500 acres 3 1.04 0.92 1.7 1.8 1 1.51 1.61 12.58 $/acre $41,667 $86,538 $86,957 $85,294 $73,611 $40,000 $89,404 $77,640 $69,356 $/WFF $417 $608 $541 $687 $650 $200 $662 $584 INTERIOR Melican Murphy Narbus Raymond Santos Santos Servino Zelonka Carney Gogswell Crippen Delisle Donahue Duval Olson Olson Hall Kerbaugh Kline 37/8/11 37/8/17 37/2/6.3 37/8/2 37/8/24 37/8/21,22 37/8/9,10 37/8/18 37/8/5 37/8/19 37/8/73 37/4/17.1 37/8/5 37/8/12 37/8/1 37/8/4 37/8/20 37/8/14 37/8/16 7/10/2004 2/28/2005 7/27/2004 9/30/2004 9/18/2003 11/14/2003 10/8/2004 10/7/2004 4/8/2003 9/18/2004 9/12/2003 8/12/2005 10/22/2004 10/28/2004 11/30/2004 12/15/2004 10/8/2004 10/22/2004 9/3/2003 $27,000 $20,000 $20,000 $35,000 $25,000 $50,000 $58,000 $28,000 $42,000 $28,000 $30,000 $36,000 $28,000 $30,000 $25,000 $52,000 $25,000 $34,000 $30,000 $623,000 1.29 1.42 1.02 2.19 0.9 1.87 1.82 1.02 2.26 1.37 2 5.10 1.32 1.51 0.85 2.60 0.97 1.86 1.45 32.82 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 $20,930 $14,085 $19,608 $15,982 $27,778 $26,738 $31,868 $27,451 $18,584 $20,438 $15,000 $7,059 $21,212 $19,868 $29,412 $20,000 $25,773 $18,280 $20,690 $18,982 Appendix B Page 8 of 10 3/15/2006 DRAFT Commercial land/Major Road Seller Gilberti Bouchard Piel Buyer Davis Folsom Neadeau Location Grnvl. Jnctn Grnvl. Jnctn Parlin Pnd. map/pl/lot 8/4/1.3 8/4/1.6, 10.1 20/1/2 date 11/23/2005 9/1/2004 8/1/2002 $total $60,000 $145,000 $57,000 acres 3.28 5.28 93.27 $/acre $18,293 $27,462 $611 Industrial PK Industrial PK RT 201 Appendix B Page 9 of 10 3/15/2006 DRAFT The following townships were reviewed for sales information: Piscataquis County Map PI5 PI 6 PI 8 PI 9 PI 36 PI 37 PI 38 PI 39 PI 47 PI 49 PI 50 PI 51 PI 57 PI 60 PI 61 PI 62 PI 63 PI 64 PI 71 PI 74 PI 81 PI 84 Township Bowdoin College E Bowdoin College W Little Moose (Squaw) Big Moose (Squaw) Shawtown T1 R12 T 2 R 12 T 3 R12 Frenchtown T1 R 13 Ragged Lake T3 R13 Lily Bay Spencer Bay XR14 Lobster Lake T4 R14 East Middlesex T4 R15 T7 R9 NWP Elliotsville Map SO13 SO 14 SO 18 SO 19 SO 20 SO 30 SO 31 SO 32 SO 33 SO 37 SO 38 SO 41 SO 42 SO 43 SO 44 SO 48 SO 49 SO 50 SO 56 SO 63 Somerset County Township ChaseStream Johnson Mountain Sapling Misery Parlin Pond Indian Stream Taunton & Raymond Sandwich Academy Rockwood Tomhegan Brassua Lake Big W Little W West Middlesex Soldiertown Seboomook Plymouth Pittston Academy Elmstream T4 R7 Appendix B Page 10 of 10 3/15/2006