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TheStreet Open House

Potlatch Reports Fourth Quarter And Full Year 2012 Results

Conference Call Information

A live conference call and webcast will be held today, January 29, 2013, at 9 a.m. Pacific Time (noon Eastern Time). Investors may access the webcast at www.potlatchcorp.com  by clicking on the Investor Resources link or by conference call at 1-866-393-8403 for U.S./Canada and 1-706-679-7929 for international callers. Participants will be asked to provide conference I.D. number 85575356. Supplemental materials that will be discussed during the call are available on the website.   

A replay of the conference call will be available two hours following the call until February 5, 2013, by calling 1-800-585-8367 for U.S./Canada or 1-404-537-3406 for international callers. Callers must enter conference I.D. number 85575356 to access the replay.

About Potlatch

Potlatch is a Real Estate Investment Trust (REIT) with approximately 1.42 million acres of timberland in Arkansas, Idaho and Minnesota. Potlatch, a verified forest practices leader, is committed to providing superior returns to stockholders through long-term stewardship of its forest resources. The company also conducts a land sales and development business and operates wood products manufacturing facilities through its taxable REIT subsidiary. 

The Potlatch Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=11346

Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of the Private Litigation Reform Act of 1995 as amended, including without limitation, statements about future company performance, company outlook for 2013, lumber demand and pricing, sawlog demand and pricing, 2013 harvest levels, sales and pricing for rural and HBU real estate, company liquidity, recovery of housing market, and related matters. These forward-looking statements are based on current expectations, estimates, assumptions and projections that are subject to change, and actual results may differ materially from the forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, changes in the U.S. economy and housing starts; changes in timberland values; changes in timber harvest levels on the company's lands; changes in timber prices; changes in policy regarding governmental timber sales; changes in the United States and international economies; changes in the level of construction activity; changes in tariffs, quotas and trade agreements involving wood products; changes in demand for our products, including changes in Asian demand; changes in production and production capacity in the forest products industry; competitive pricing pressures for our products; unanticipated manufacturing disruptions; changes in general and industry-specific environmental laws and regulations; unforeseen environmental liabilities or expenditures; weather conditions; insect infestation (including the mountain pine beetle); changes in raw material and other costs; the ability to satisfy complex rules in order to remain qualified as a REIT; changes in tax laws that could reduce the benefits associated with REIT status; and other risks and uncertainties described from time to time in the company's public filings with the Securities and Exchange Commission. These forward-looking statements are made as of the date hereof and the company does not undertake to update any forward-looking statements.

Potlatch Corporation
Consolidated Statements of Income
Unaudited (Dollars in thousands - except per-share amounts)
         
         
  Three Months Ended Twelve Months Ended
  December 31, December 31,
  2012 2011 2012 2011
Revenues  $ 143,299  $ 109,927  $ 525,134  $ 497,421
Costs and expenses:        
Cost of goods sold  103,197  94,778  390,666  382,252
Selling, general and administrative expenses  13,425  12,081  49,419  40,549
Environmental remediation charge  --  1,200  --  1,200
Asset impairment charge  107  --  107  1,180
   116,729  108,059  440,192  425,181
Operating income  26,570  1,868  84,942  72,240
Interest expense, net  (6,496)  (6,706)  (25,539)  (27,829)
Income (loss) before income taxes  20,074  (4,838)  59,403  44,411
Income tax (provision) benefit  (6,210)  3,360  (16,809)  (4,145)
Net income (loss)  $ 13,864  $ (1,478)  $ 42,594  $ 40,266
         
Net income (loss) per share:        
Basic  $ 0.34  $ (0.04)  $ 1.06  $ 1.00
Diluted  0.34  (0.04)  1.05  1.00
Cash distributions per share  $ 0.31  $ 0.31  $ 1.24  $ 1.84
Weighted-average shares outstanding (in thousands):        
Basic  40,383  40,195  40,333  40,159
Diluted  40,630  40,401  40,553  40,383
         
Potlatch Corporation
Consolidated Condensed Balance Sheets
Unaudited (Dollars in thousands, except per-share amounts)
     
     
  December 31, December 31,
  2012 2011
ASSETS    
Current assets:    
Cash  $ 16,985  $ 7,819
Short-term investments  63,077  62,989
Receivables, net  10,668  13,533
Inventories  28,928  28,603
Deferred tax assets  10,507  11,909
Other assets  7,932  9,998
Total current assets  138,097  134,851
Property, plant and equipment, net  58,050  61,453
Timber and timberlands, net  464,467  459,687
Deferred tax assets  43,292  57,924
Other assets  14,991  32,305
   $ 718,897  $ 746,220
LIABILITIES AND STOCKHOLDERS' EQUITY    
Current liabilities:    
Current installments on long-term debt  $ 8,413  $ 21,661
Accounts payable and accrued liabilities  55,174  55,948
Total current liabilities  63,587  77,609
Long-term debt  349,163  344,742
Liability for pensions and other postretirement employee benefits  145,047  163,116
Other long-term obligations  22,457  18,615
Stockholders' equity  138,643  142,138
   $ 718,897  $ 746,220
     
Shares outstanding (in thousands)  40,389  40,202
Stockholders' equity per common share  $ 3.43  $ 3.54
Working capital  $ 74,510  $ 57,242
Current ratio 2.2:1  1.7:1 
 
Potlatch Corporation
Consolidated Condensed Statements of Cash Flows
Unaudited (Dollars in thousands)
     
     
  Twelve Months Ended
  December 31,
  2012 2011
Cash Flows From Operating Activities    
Net income  $ 42,594  $ 40,266
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation, depletion and amortization  26,247  29,092
Basis of real estate sold  5,048  10,219
Change in deferred taxes  15,992  4,218
Gain on disposition of property, plant and equipment  (8)  (131)
Employee benefit plans  4,317  (2,181)
Equity-based compensation expense  4,067  4,404
Asset impairment  107  1,180
Income tax benefit related to stock issued in conjunction with stock compensation plans  525  --
Other, net  1,478  365
Funding of qualified pension plans  (21,630)  (9,400)
Working capital changes  1,244  (607)
Net cash provided by operating activities  79,981  77,425
Cash Flows From Investing Activities    
Decrease (increase) in short-term investments  (88)  22,260
Proceeds from COLI loan  21,751  --
Additions to property, plant and equipment  (5,636)  (5,338)
Additions to timber and timberlands  (23,552)  (11,548)
Proceeds from disposition of property, plant and equipment  71  224
Other, net  (1,193)  (1,095)
Net cash provided by (used for) investing activities  (8,647)  4,503
Cash Flows From Financing Activities    
Distributions to common stockholders  (50,041)  (73,921)
Repayment of long-term debt  (21,662)  (5,011)
Proceeds from issuance of long-term debt  12,000  --
Issuance of common stock  1,075  1,430
Change in book overdrafts  462  157
Deferred financing costs  (2,148)  (698)
Employee tax withholdings on equity-based compensation  (1,714)  (1,641)
Other, net  (140)  (18)
Net cash used for financing activities  (62,168)  (79,702)
Increase in cash  9,166  2,226
Cash at beginning of period  7,819  5,593
Cash at end of period  $ 16,985  $ 7,819
 
Potlatch Corporation
Segment Information
Unaudited (Dollars in thousands)
         
         
  Three Months Ended Twelve Months Ended
  December 31, December 31,
  2012 2011 2012 2011
Revenues        
Resource  $ 51,360  $ 54,382  $ 207,846  $ 226,969
Real Estate  19,057  3,221  38,238  50,029
Wood Products  85,125  67,237  329,404  271,580
   155,542  124,840  575,488  548,578
Intersegment revenues - Resource  (12,243)  (14,913)  (50,354)  (51,157)
Total consolidated revenues  $ 143,299  $ 109,927  $ 525,134  $ 497,421
         
Operating income (loss)        
Resource  $ 10,532  $ 12,584  $ 49,543  $ 59,792
Real Estate  13,800  2,089  28,056  31,384
Wood Products  13,508  (1,281)  45,456  7,267
Eliminations and adjustments  (955)  (1,750)  (1,061)  2,410
   36,885  11,642  121,994  100,853
Corporate  (16,811)  (16,480)  (62,591)  (56,442)
Income (loss) before income taxes  $ 20,074  $ (4,838)  $ 59,403  $ 44,411
         
Depreciation, depletion and amortization      
Resource  $ 4,375  $ 3,569  $ 16,446  $ 17,420
Real Estate  9  7  36  28
Wood Products  1,525  1,923  6,538  7,829
   5,909  5,499  23,020  25,277
Corporate  1,067  677  3,227  3,815
Total depreciation, depletion and amortization  $ 6,976  $ 6,176  $ 26,247  $ 29,092
         
Basis of real estate sold - Real Estate  $ 3,607  $ 213  $ 5,413  $ 13,500
Eliminations and adjustments  (182)  (47)  (365)  (3,281)
Total basis of real estate sold - Real Estate  $ 3,425  $ 166  $ 5,048  $ 10,219
 
Potlatch Corporation
EBITDDA*
(Earnings before interest, taxes, depreciation, depletion and amortization, and basis of real estate sold)
Unaudited (Dollars in thousands)
           
           
           
  4th Quarter 3rd Quarter 4th Quarter YTD YTD 
  2012 2012 2011 2012 2011
GAAP net income (loss)  $ 13,864  $ 18,599  $ (1,478)  $ 42,594  $ 40,266
Net cash interest expense  5,819  5,848  6,302  23,565  25,013
Income tax provision (benefit)  6,210  3,884  (3,360)  16,809  4,145
Depreciation, depletion and amortization  6,976  8,302  6,176  26,247  29,092
Basis of real estate sold  3,607  397  213  5,413  13,500
Non-cash asset impairment and eliminations  (75)  (16)  (47)  (258)  (2,101)
           
EBITDDA  $ 36,401  $ 37,014  $ 7,806  $ 114,370  $ 109,915
           
*EBITDDA is a non-GAAP measure that management uses to evaluate the cash generating capacity of the company. EBITDDA, as we define it, is net income adjusted for net cash interest expense, provision for income taxes, depreciation, depletion and amortization, basis of real estate sold and non-cash asset impairment and eliminations.
CONTACT: (Investors)
         Eric Cremers
         509.835.1521
         
         (Media)
         Mark Benson
         509.835.1513

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