10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________________________________________ 

Form 10-Q

(Mark One)

x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2016

or

¨ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from             to             

Commission File Number 1-32729

POTLATCH CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	82-0156045
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

601 West First Avenue, Suite 1600
Spokane, Washington	99201
(Address of principal executive offices)	(Zip Code)

(509) 835-1500

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    YesxNo¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yesx No¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	o
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes¨Nox

The number of shares of common stock of the registrant outstanding as of April 22, 2016 was 40,688,158.

POTLATCH CORPORATION AND CONSOLIDATED SUBSIDIARIES

Table of Contents

		Page  Number
PART I. - FINANCIAL INFORMATION
ITEM 1.	Financial Statements
	Consolidated Statements of Income for the quarter ended March 31, 2016 and 2015	2
	Consolidated Statements of Comprehensive Income for the quarter ended March 31, 2016 and 2015	3
	Condensed Consolidated Balance Sheets at March 31, 2016 and December 31, 2015	4
	Condensed Consolidated Statements of Cash Flows for the quarter ended March 31, 2016 and 2015	5
	Notes to Condensed Consolidated Financial Statements	6
ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	14
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	20
ITEM 4.	Controls and Procedures	20
PART II. - OTHER INFORMATION
ITEM 1.	Legal Proceedings	21
ITEM 1A.	Risk Factors	21
ITEM 6.	Exhibits	21
SIGNATURES		22
EXHIBIT INDEX		23

Part I

ITEM 1. FINANCIAL STATEMENTS

Potlatch Corporation and Consolidated Subsidiaries

Consolidated Statements of Income

Unaudited (Dollars in thousands, except per share amounts)

	Quarter Ended   March 31,
	2016			2015
Revenues	$	127,896		$	134,125
Costs and expenses:
Cost of goods sold	109,815			107,772
Selling, general and administrative expenses	13,009			12,326
	122,824			120,098
Operating income	5,072			14,027
Interest expense, net	(6,025		)	(8,069		)
Income (loss) before income taxes	(953		)	5,958
Income tax benefit (provision)	1,110			(302		)
Net income	$	157		$	5,656
Net income per share:
Basic	$	—		$	0.14
Diluted	$	—		$	0.14
Dividends per share	$	0.375		$	0.375
Weighted-average shares outstanding (in thousands):
Basic	40,875			40,802
Diluted	40,960			40,885

The accompanying notes are an integral part of these condensed consolidated financial statements.

2

Potlatch Corporation and Consolidated Subsidiaries

Consolidated Statements of Comprehensive Income

Unaudited (Dollars in thousands)

	Quarter Ended   March 31,
	2016			2015
Net income	$	157		$	5,656
Other comprehensive income, net of tax:
Pension and other postretirement employee benefits:
Amortization of prior service credit included in net periodic cost, net of tax of $(815) and $(849)	(1,275		)	(1,328		)
Amortization of actuarial loss included in net periodic cost, net of tax of $1,695 and $1,937	2,650			3,029
Cash flow hedge, net of tax of $(105)	(164		)	—
Other comprehensive income, net of tax	1,211			1,701
Comprehensive income	$	1,368		$	7,357

Amortization of prior service credit and amortization of actuarial loss are included in the computation of net periodic cost (benefit). See Note 8: Pension and Other Postretirement Employee Benefits for additional information.

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

Potlatch Corporation and Consolidated Subsidiaries

Condensed Consolidated Balance Sheets

Unaudited (Dollars in thousands, except per share amounts)

	March 31, 2016			December 31, 2015
ASSETS
Current assets:
Cash	$	7,789		$	7,886
Short-term investments	35			39
Receivables, net	14,710			13,420
Inventories	25,028			35,162
Other assets	14,106			14,246
Total current assets	61,668			70,753
Property, plant and equipment, net	74,060			75,285
Timber and timberlands, net	810,856			816,599
Deferred tax assets, net	46,645			46,600
Other assets	8,126			7,375
Total assets	$	1,001,355		$	1,016,612
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Revolving line of credit borrowings	$	—		$	30,000
Current portion of long-term debt	—			5,007
Accounts payable and accrued liabilities	44,580			39,740
Current portion of pension and other postretirement employee benefits	5,973			5,973
Total current liabilities	50,553			80,720
Long-term debt	627,709			598,874
Pension and other postretirement employee benefits	118,999			119,369
Other long-term obligations	13,618			13,913
Total liabilities	810,879			812,876
Commitments and contingencies
Stockholders' equity:
Common stock, $1 par value	40,688			40,681
Additional paid-in capital	351,188			350,541
Accumulated deficit	(88,108		)	(72,983		)
Accumulated other comprehensive loss	(113,292		)	(114,503		)
Total stockholders’ equity	190,476			203,736
Total liabilities and stockholders' equity	$	1,001,355		$	1,016,612

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

Potlatch Corporation and Consolidated Subsidiaries

Condensed Consolidated Statements of Cash Flows

Unaudited (Dollars in thousands)

	Quarter Ended   March 31,
	2016			2015
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	157		$	5,656
Adjustments to reconcile net income to net cash from operating activities:
Depreciation, depletion and amortization	8,605			8,504
Basis of real estate sold	2,034			408
Change in deferred taxes	(1,110		)	(936		)
Employee benefit plans	2,737			1,723
Equity-based compensation expense	954			1,136
Other, net	(531		)	(501		)
Working capital and operating-related activities, net	16,047			8,447
Net cash from operating activities	28,893			24,437
CASH FLOWS FROM INVESTING ACTIVITIES
Change in short-term investments	4			7,483
Property, plant and equipment	(932		)	(4,810		)
Timberlands reforestation and roads	(2,242		)	(2,734		)
Other, net	116			309
Net cash from investing activities	(3,054		)	248
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends to common stockholders	(15,258		)	(15,253		)
Repayment of revolving line of credit	(30,000		)	—
Repayment of long-term debt	(5,000		)	—
Proceeds from issuance of long-term debt	27,500			—
Change in book overdrafts	(2,836		)	(3,551		)
Employee tax withholdings on vested performance share awards	(101		)	(1,407		)
Other, net	(241		)	26
Net cash from financing activities	(25,936		)	(20,185		)
Increase (decrease) in cash	(97		)	4,500
Cash at beginning of period	7,886			4,644
Cash at end of period	$	7,789		$	9,144
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid (received) during the period for:
Interest, net of amounts capitalized	$	2,029		$	1,498
Income taxes, net	$	(1,709	)	$	148

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

Notes to Condensed Consolidated Financial Statements

NOTE 1. BASIS OF PRESENTATION

For purposes of this report, any reference to “Potlatch,” “the company,” “we,” “us,” and “our” means Potlatch Corporation and all of its wholly-owned subsidiaries, except where the context indicates otherwise.

The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission pertaining to interim financial statements; certain disclosures normally provided in accordance with generally accepted accounting principles in the United States have been omitted. This Quarterly Report on Form 10-Q should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2015, as filed with the Securities and Exchange Commission on February 12, 2016. We believe that all adjustments necessary for a fair statement of the results of such interim periods have been included and all such adjustments are of a normal recurring nature.

NOTE 2. RECENT ACCOUNTING PRONOUNCEMENTS

In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-02, Leases, which, among other things, requires lessees to recognize most leases on the balance sheet. We have operating leases covering office space, equipment, land and vehicles expiring at various dates through 2028, which would require a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, to be recognized in the statement of financial position. Lease costs would generally continue to be recognized on a straight-line basis. The future minimum payments required under our operating leases totaled $9.6 million at December 31, 2015. The ASU is effective for us on January 1, 2019.

In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting, which changes several aspects of the accounting for share-based payment award transactions, including accounting for income taxes, classification of excess tax benefits on the statement of cash flows, forfeitures and minimum statutory tax withholding requirements. This ASU is effective for us on January 1, 2017. The adoption of this guidance is not expected to have a significant effect on our consolidated financial statements.

6

NOTE 3. EARNINGS PER SHARE

The following table reconciles the number of shares used in calculating basic and diluted earnings per share:

	Quarter Ended   March 31,
(Dollars in thousands, except per share amounts)	2016		2015
Net income	$	157	$	5,656
Basic weighted-average shares outstanding	40,875,179		40,801,993
Incremental shares due to:
Performance shares	69,292		70,187
Restricted stock units	15,204		12,936
Diluted weighted-average shares outstanding	40,959,675		40,885,116
Basic net income per share	$	—	$	0.14
Diluted net income per share	$	—	$	0.14

For the three months ended March 31, 2016, there were 90,272 stock-based awards that were excluded from the calculation of diluted earnings per share because they were anti-dilutive. For the three months ended March 31, 2015, there were 55,987 anti-dilutive stock-based awards. Anti-dilutive stock-based awards could be dilutive in future periods.

NOTE 4. CERTAIN BALANCE SHEET COMPONENTS

INVENTORIES

(Dollars in thousands)	March 31,   2016		December 31,   2015
Inventories:
Logs	$	276	$	9,920
Lumber, plywood and veneer	16,096		16,932
Materials and supplies	8,656		8,310
Total inventories	$	25,028	$	35,162

PROPERTY, PLANT AND EQUIPMENT

(Dollars in thousands)	March 31,   2016			December 31,   2015
Property, plant and equipment	$	248,496		$	248,750
Less: accumulated depreciation	(174,436		)	(173,465		)
Total property, plant and equipment, net	$	74,060		$	75,285

NOTE 5. DEBT

In February 2016, we amended our term loan agreement to provide an additional loan in the amount of $27.5 million. This additional tranche refinanced $27.5 million of long-term debt that matured in December 2015 and February 2016. It matures in 2026 and carries a rate equal to 3-month LIBOR plus 2.15% per annum. At March 31, 2016, our term loan debt includes nine tranches totaling $349.5 million.

7

NOTE 6. DERIVATIVE INSTRUMENTS

From time to time, we enter into derivative financial instruments to manage certain cash flow and fair value risks.

Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset or liability to a particular risk, such as interest rate risk, are considered fair value hedges. We have seven fair value interest rate swaps to convert interest payments on fixed-rate debt to variable-rate 3-month LIBOR plus a spread.

Derivatives designated and qualifying as a hedge of the exposure to variability in the cash flows of a specific asset or liability that is attributable to a particular risk, such as interest rate risk, are considered cash flow hedges. We have one interest rate swap to convert variable-rate debt, comprised of 3-month LIBOR plus a spread, to fixed-rate debt. Our cash flow hedge is expected to be highly effective in achieving offsetting cash flows attributable to the hedged interest rate risk through the term of the hedge. Therefore, changes in the fair value of the interest rate swap are recorded as a component of other comprehensive income and will be recognized in earnings when the hedged interest rate affects earnings. The amounts paid or received on this interest rate hedge will be recognized as adjustments to interest expense. As of March 31, 2016, the amount of net losses expected to be reclassified into earnings in the next 12 months is $0.3 million.

The following table presents the gross fair values of derivative instruments on our Condensed Consolidated Balance Sheets:

		Assets					Liabilities
(Dollars in thousands)	Location	March 31, 2016		December 31, 2015		Location	March 31, 2016		December 31, 2015
Derivatives designated as hedging instruments:
Interest rate contracts	Other assets, current	$	—	$	7	Long-term debt	$	269	$	—
Interest rate contracts	Other assets, non-current	1,523		574
Total derivatives designated as hedging instruments		$	1,523	$	581		$	269	$	—

The following tables detail the effect of derivatives on our Consolidated Statements of Income:

		Quarter Ended   March 31,
(Dollars in thousands)	Location	2016		2015
Derivatives designated in fair value hedging relationships:
Realized gain on interest rate contracts 1	Interest expense	$	242	$	379

		Quarter Ended   March 31,
(Dollars in thousands)	Location	2016			2015
Derivatives designated in cash flow hedging relationships:
Gain (loss) recognized in OCI on derivative, net of tax of $(105) and $ - (effective portion)	Other Comprehensive Income	$	(164	)	$	—
Gain (loss) reclassified from AOCI into income (effective portion)	Interest expense	$	—		$	—

¹Realized gain on hedging instruments consists of net cash settlements and interest accruals on the interest rate swaps during the periods. Net cash settlements are included in the supplemental cash flow information within interest, net of amounts capitalized in the Condensed Consolidated Statements of Cash Flows.

8

NOTE 7. FINANCIAL INSTRUMENTS

The following table presents the estimated fair values of our financial instruments:

	March 31, 2016				December 31, 2015
(Dollars in thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Cash and short-term investments (Level 1)	$	7,824	$	7,824	$	7,925	$	7,925
Derivative asset related to interest rate swaps (Level 2)	$	1,523	$	1,523	$	581	$	581
Derivative liability related to interest rate swaps (Level 2)	$	269	$	269	$	—	$	—
Long-term debt, including fair value adjustments related to hedging instruments (Level 2)	$	627,709	$	647,587	$	603,881	$	626,021
Company owned life insurance asset (COLI) (Level 3)	$	1,122	$	1,122	$	687	$	687

For cash and short-term investments, the carrying amount approximates fair value due to the short-term nature of these financial instruments.

The fair value of the interest rate swaps were determined by discounting the expected cash flows of each derivative. The analysis reflects the contractual terms of the derivatives, including the period to maturity and uses observable market-based inputs, including interest rate forward curves.

The fair value of our long-term debt is estimated based upon the quoted market prices for the same or similar debt issues, or estimated based on average market prices for comparable debt when there is no quoted market price.

The contract value of our COLI, the amount at which it could be redeemed, is used as a practical expedient to estimate fair value because market prices are not readily available.

9

NOTE 8. PENSION AND OTHER POSTRETIREMENT EMPLOYEE BENEFITS

The following table details the components of net periodic cost (benefit) of our pension plans and other postretirement employee benefits (OPEB):

	Quarter Ended March 31,
	Pension						OPEB
(Dollars in thousands)	2016			2015			2016			2015
Service cost	$	1,507		$	1,530		$	5		$	7
Interest cost	4,252			4,259			355			383
Expected return on plan assets	(4,766		)	(5,191		)	—			—
Amortization of prior service cost (credit)	130			151			(2,220		)	(2,328		)
Amortization of actuarial loss	3,917			4,408			428			558
Net periodic cost (benefit)	$	5,040		$	5,157		$	(1,432	)	$	(1,380	)

During the three months ended March 31, 2016 and 2015, we paid non-qualified supplemental pension benefits of $0.4 million and $0.4 million.

During the three months ended March 31, 2016 and 2015, we paid OPEB benefits of $1.3 million and $1.3 million.

The following tables detail the pension and OPEB changes in accumulated other comprehensive loss (AOCL):

	Quarter Ended March 31, 2016
(Dollars in thousands)	Pension			OPEB			Total
Balance at January 1	$	128,244		$	(13,741	)	$	114,503
Amortization of defined benefit items, net of tax:1
Prior service credit (cost)	(79		)	1,354			1,275
Actuarial loss	(2,389		)	(261		)	(2,650		)
Total reclassification for the period	(2,468		)	1,093			(1,375		)
Balance at March 31	$	125,776		$	(12,648	)	$	113,128
	Quarter Ended March 31, 2015
(Dollars in thousands)	Pension			OPEB			Total
Balance at January 1	$	134,261		$	(15,869	)	$	118,392
Amortization of defined benefit items, net of tax:1
Prior service credit (cost)	(92		)	1,420			1,328
Actuarial loss	(2,689		)	(340		)	(3,029		)
Total reclassification for the period	(2,781		)	1,080			(1,701		)
Balance at March 31	$	131,480		$	(14,789	)	$	116,691

¹ Amortization of prior service credit (cost) and amortization of actuarial loss are included in the computation of net periodic cost (benefit).

10

NOTE 9. EQUITY-BASED COMPENSATION

As of March 31, 2016, we had two stock incentive plans under which performance shares, restricted stock units (RSUs) and deferred compensation stock equivalent units were outstanding. These plans have received shareholder approval. We were originally authorized to issue up to 1.6 million shares and 1.0 million shares under our 2005 Stock Incentive Plan and 2014 Stock Incentive Plan, respectively. At March 31, 2016, approximately 1.1 million shares were authorized for future use. We issue new shares of common stock to settle performance shares, restricted stock units and deferred compensation stock equivalent units.

The following table details compensation expense and the related income tax benefit:

	Quarter Ended   March 31,
(Dollars in thousands)	2016		2015
Employee equity-based compensation expense:
Performance shares	$	754	$	872
Restricted stock units	200		205
Total employee equity-based compensation expense	$	954	$	1,077
Deferred compensation stock equivalent units expense	$	200	$	119
Total tax benefit recognized for share-based expense	$	66	$	74

PERFORMANCE SHARES

The following table presents the key inputs used in the Monte Carlo simulation to calculate the fair value of the performance share awards in 2016 and 2015:

	Quarter Ended   March 31,
	2016			2015
Stock price as of valuation date	$	25.92		$	40.00
Risk-free rate	0.88		%	1.07		%

The following table summarizes outstanding performance share awards as of March 31, 2016, and changes during the three months ended March 31, 2016:

(Dollars in thousands, except grant date fair value)	Shares	Weighted-Avg. Grant Date Fair Value		Aggregate Intrinsic Value
Unvested shares outstanding at January 1	161,049	$	41.26
Granted	125,469	$	30.02
Forfeited	—	$	—
Unvested shares outstanding at March 31	286,518	$	36.34	$	9,025

As of March 31, 2016, there was $6.0 million of unrecognized compensation cost related to unvested performance share awards, which is expected to be recognized over a weighted-average period of 1.9 years.

11

RESTRICTED STOCK UNITS

The following table summarizes outstanding RSU awards as of March 31, 2016, and changes during the three months ended March 31, 2016:

(Dollars in thousands, except grant date fair value)	Shares		Weighted-Avg. Grant Date Fair Value		Aggregate Intrinsic Value
Unvested shares outstanding at January 1	44,531		$	40.95
Granted	42,320		$	25.92
Vested	(1,500	)	$	38.91
Forfeited	—		$	—
Unvested shares outstanding at March 31	85,351		$	33.07	$	2,689

The fair value of each RSU equaled our common share price on the date of grant. The total fair value of RSU awards that vested during the three months ended March 31, 2016 was $0.1 million. As of March 31, 2016, there was $1.8 million of total unrecognized compensation cost related to unvested RSU awards, which is expected to be recognized over a weighted-average period of 2.0 years.

NOTE 10. INCOME TAXES

As a real estate investment trust (REIT), we generally are not subject to federal and state corporate income taxes on income of the REIT that we distribute to our shareholders. We conduct certain activities through our taxable REIT subsidiaries (TRS), which are subject to corporate level federal and state income taxes. These taxable activities are principally comprised of our wood products manufacturing operations and certain real estate investments. Therefore, income tax expense or benefit is primarily due to income or loss of the TRS, as well as permanent book versus tax differences.

NOTE 11. COMMITMENTS AND CONTINGENCIES

In January 2007, the Environmental Protection Agency (EPA) notified us that we are a potentially responsible party under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA) and the Clean Water Act for cleanup of a site known as Avery Landing in northern Idaho. We own a portion of the land at the Avery Landing site, which we acquired in 1980 from the Milwaukee Railroad. The land we own at the site and adjacent properties were contaminated with petroleum as a result of the Milwaukee Railroad's operations at the site prior to 1980. On July 5, 2011, the EPA issued an Action Memorandum for the Avery Landing site selecting contaminant extraction and off-site disposal as the remedial alternative. On May 23, 2012, we signed a consent order with the EPA pursuant to which we agreed to provide $1.75 million in funding for EPA cleanup on a portion of our property (including the adjacent riverbank owned by the Idaho Department of Lands). The EPA cleanup was completed in October 2012. On April 4, 2013, the EPA issued a unilateral administrative order requiring us to remediate the portion of the Avery Landing site that we own. Our remediation was completed in October 2013. On September 25, 2015 the EPA sent us a letter asserting that the EPA and the Department of Transportation (the current owner of a portion of the adjacent property remediated by the EPA) (DOT) had incurred $9.8 million in unreimbursed response costs associated with the site and that we were liable for such costs. We believe we have meritorious defenses to this claim and we intend to defend ourselves vigorously. We have reserved all of our rights to seek reimbursement for the costs of remediation from all parties potentially responsible. We have executed a tolling agreement with the EPA and DOT suspending the statute of limitations on the claim until June 2016 in order to facilitate negotiations of a final settlement and release. We accrued $0.2 million for this matter in the first quarter of 2016. We believe that it is reasonably possible that we may incur additional charges in respect of this claim in the future that may exceed our accrual by up to $2.5 million.

12

NOTE 12. SEGMENT INFORMATION

The following table summarizes information by business segment:

	Quarter Ended   March 31,
(Dollars in thousands)	2016			2015
Revenues:
Resource	$	48,710		$	53,955
Wood Products	83,238			89,233
Real Estate	5,566			3,111
	137,514			146,299
Elimination of intersegment revenues - Resource	(9,618		)	(12,174		)
Total consolidated revenues	$	127,896		$	134,125
Operating income:
Resource	$	10,207		$	14,978
Wood Products	956			3,500
Real Estate	2,075			1,599
Eliminations and adjustments	1,465			2,975
	14,703			23,052
Corporate	(9,631		)	(9,025		)
Operating income	5,072			14,027
Interest expense, net	(6,025		)	(8,069		)
Income (loss) before income taxes	$	(953	)	$	5,958
Depreciation, depletion and amortization:
Resource	$	6,128		$	6,254
Wood Products	1,901			1,576
Real Estate	2			15
	8,031			7,845
Corporate	208			284
Bond discounts and deferred loan fees	366			375
Total depreciation, depletion and amortization	$	8,605		$	8,504
Basis of real estate sold:
Real Estate	$	2,245		$	471
Eliminations and adjustments	(211		)	(63		)
Total basis of real estate sold	$	2,034		$	408

13

NOTE 13. SUBSEQUENT EVENTS

On April 21, 2016, we sold approximately 172,000 acres of timberlands located in central Idaho for $114 million.  The company purchased the property in 2007 and 2008 for the purpose of growing and harvesting timber and selling rural recreation parcels.  The sale frees up capital without having to wait for the rural recreation real estate market in central Idaho to recover.  We expect to record a loss of $36 million after taxes in our Real Estate segment in the second quarter of 2016.  Historical earnings generated by the property have been positive, but not material.

The asset group was classified as held and used as of March 31, 2016.  Neither a signed letter of intent, nor an approved purchase agreement were in place as of that date. Because negotiations were underway with the buyer at the balance sheet date, we believed that it was prudent to complete an undiscounted cash flow analysis to determine whether the asset group was impaired.  Given the long period of time over which cash flows would be generated in the hold scenario and management’s belief that the likelihood that a sale would be completed was 20%, the undiscounted cash flows significantly exceeded the book basis of the asset group.  Therefore, management concluded that the asset group was not impaired as of March 31, 2016.

On April 11, 2016, the company's Board of Directors authorized management, at its discretion, to repurchase up to $60 million of common stock with the proceeds from the sale of the central Idaho timberlands. Share repurchases may be executed through various means, including, without limitation, open market transactions, privately negotiated transactions or otherwise. The share repurchase program does not obligate Potlatch to purchase any shares, and expires in two years. The authorization for the share repurchase program may be terminated, increased, or decreased by the company's Board of Directors in its discretion at any time.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Information

This report contains, in addition to historical information, certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation, effectiveness of the cash flow hedge, recognition of compensation costs relating to our performance shares and RSUs, real estate demand and pricing, log prices, lumber demand and prices, business conditions for our business segments, Resource segment results, Wood Products segment results, Real Estate segment results, 2016 capital spending, loss on sale of central Idaho timberlands, stock repurchase, debt repayments, reduced interest expense, and similar matters. Words such as “anticipate,” “expect,” “will,” “intend,” “plan,” “target,” “project,” “believe,” “seek,” “schedule,” “estimate,” “could,” “can,” “may” and similar expressions are intended to identify such forward-looking statements. These forward-looking statements reflect our current views regarding future events based on estimates and assumptions and are therefore subject to known and unknown risks and uncertainties and are not guarantees of future performance. Our actual results of operations could differ materially from our historical results or those expressed or implied by forward-looking statements contained in this report. For a nonexclusive listing of forward-looking statements and potential factors affecting our business, refer to “Cautionary Statement Regarding Forward-Looking Information” on page 1 and “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2015.

Forward-looking statements contained in this report present our views only as of the date of this report. Except as required under applicable law, we do not intend to issue updates concerning any future revisions of our views to reflect events or circumstances occurring after the date of this report.

Results of Operations

Our business is organized into three business segments: Resource, Wood Products and Real Estate. Our Resource segment supplies our Wood Products segment with a portion of its wood fiber needs. These intersegment revenues are based on prevailing market prices and typically represent a significant portion of the Resource segment’s total revenues. Our other segments generally do not generate intersegment revenues.

14

In our discussions of consolidated results of operations, our revenues are reported after elimination of intersegment revenues. In our discussion by business segment, each segment's revenues are presented before the elimination of intersegment revenues.

The operating results of our Resource, Wood Products and Real Estate business segments have been and will continue to be influenced by a variety of factors, including cyclical fluctuations in the forest products industry, changes in timber prices and in harvest levels from our timberlands, competition, timberland valuations, demand for our non-strategic timberland for higher and better use purposes, changes in lumber prices, the efficiency and level of capacity utilization of our wood products manufacturing operations, changes in our principal expenses such as log costs, asset dispositions or acquisitions and other factors.

Overview

In the three months ended March 31, 2016, our Resource and Wood Products segment results were affected by lower lumber prices, compared with the same period last year, resulting primarily from excess supply in the lumber markets due to several factors that occurred during 2015 and continue in 2016, including lower log and lumber volume exports from North America and a strong U.S. dollar relative to the Canadian dollar. Therefore, Resource and Wood Products revenues were lower in the first quarter of 2016, compared with the first quarter of 2015.

Consolidated Results Comparing the Quarters Ended March 31, 2016 and 2015

The following table sets forth changes in our Consolidated Statements of Income:

	Quarter Ended March 31,
(Dollars in thousands)	2016			2015			Change
Revenues	$	127,896		$	134,125		$	(6,229	)	(5	)%
Costs and expenses:
Cost of goods sold	109,815			107,772			2,043			2	%
Selling, general and administrative expenses	13,009			12,326			683			6	%
	122,824			120,098			2,726			2	%
Operating income	5,072			14,027			(8,955		)	(64	)%
Interest expense, net	(6,025		)	(8,069		)	2,044			25	%
Income (loss) before income taxes	(953		)	5,958			(6,911		)	(116	)%
Income tax benefit (provision)	1,110			(302		)	1,412			n/m
Net income	$	157		$	5,656		$	(5,499	)	(97	)%

Revenues - Revenues decreased in the first quarter of 2016, compared with the same period last year, primarily due to lower log and lumber prices, partially offset by Resource harvest volumes that increased 4% and Wood Products lumber shipments that increased 5%. Our Business Segment Results provide a more detailed discussion of our segments.

Cost of goods sold - Cost of goods sold increased in the first quarter of 2016, compared with the same period last year, primarily due to an increase in the average land basis of real estate sold. Our Business Segment Results provide a more detailed discussion of our segments.

Selling, general and administrative expenses - Selling, general and administrative expenses increased in the first quarter of 2016, compared with the same period last year, due to project costs associated with employee benefit administration and a $0.2 million expense related to Avery Landing, as discussed in Note 11: Commitments and Contingencies.

Interest expense, net - Interest expense decreased in the first quarter of 2016, compared with the same period last year, due to a $2.2 million patronage dividend. The patronage dividend increased as a result of the debt used to fund the acquisition of timberlands in Alabama and Mississippi in December 2014.

15

Income tax provision - Income taxes are primarily due to income or loss from Potlatch TRS. For the first quarter of 2016, the income tax benefit of $1.1 million is the result of Potlatch TRS’s loss before income tax of $2.1 million and permanent book versus tax differences. For the first quarter of 2015, the income tax expense of $0.3 million was the result of Potlatch TRS’s income before income tax of $1.3 million.

Business Segment Results Comparing the Quarters Ended March 31, 2016 and 2015

Resource Segment

		Quarter Ended March 31,
(Dollars in thousands)		2016		2015		Change
Revenues1		$	48,710	$	53,955	$	(5,245	)	(10	)%
Cost of goods sold:
Logging and hauling		24,809		26,584		(1,775		)	(7	)%
Depreciation, depletion and amortization		6,128		6,176		(48		)	(1	)%
Other		6,190		4,832		1,358			28	%
		37,127		37,592		(465		)	(1	)%
Selling, general and administrative expenses		1,376		1,385		(9		)	(1	)%
Operating income		$	10,207	$	14,978	$	(4,771	)	(32	)%
Harvest Volumes (in tons)
Northern region
	Sawlog	366,852		451,548		(84,696		)	(19	)%
	Pulpwood	52,361		47,840		4,521			9	%
	Stumpage	16,207		16,903		(696		)	(4	)%
	Total	435,420		516,291		(80,871		)	(16	)%
Southern region
	Sawlog	185,051		154,730		30,321			20	%
	Pulpwood	248,152		177,345		70,807			40	%
	Stumpage	56,079		39,961		16,118			40	%
	Total	489,282		372,036		117,246			32	%
Total harvest volume		924,702		888,327		36,375			4	%
Sales Price/Unit ($ per ton)
Northern region
	Sawlog 2	$	78	$	83	$	(5	)	(6	)%
	Pulpwood 2	$	42	$	43	$	(1	)	(2	)%
	Stumpage	$	13	$	9	$	4		44	%
Southern region
	Sawlog 2	$	39	$	40	$	(1	)	(3	)%
	Pulpwood 2	$	32	$	33	$	(1	)	(3	)%
	Stumpage	$	18	$	18	$	—		—	%

¹ Prior to elimination of intersegment fiber revenues of $9.6 million in 2016 and $12.2 million in 2015.

² Sawlog and pulpwood sales prices are on a delivered basis, which includes contracted logging and hauling costs.

16

Resource segment revenues decreased 10% in the first quarter of 2016, compared with the same period last year, primarily due to lower sawlog and pulpwood prices and a shift in mix with lower volumes in the Northern region and higher volumes in the Southern region.

Volumes in our Northern region decreased 16% in the first quarter of 2016, compared with the same period last year, due to a warm winter and early spring breakup. A significant portion of our sawlog sales in our Northern region are indexed to lumber prices on a one to three month lag. Lumber prices were lower in the fourth quarter of 2015, compared with the same period last year, resulting in lower sawlog prices in the first quarter of 2016.

Harvest volumes in our Southern region were 32% higher in the first quarter of 2016 due in large part to the contributions of the Alabama and Mississippi timberlands, which were acquired in December 2014 and were ramping up in the first quarter of 2015. Southern sawlog prices decreased 3% due to lower hardwood prices, partially offset by higher pine sawlog prices. Stumpage prices fluctuate based on the mix of pulpwood and sawlog volume.

Lower fuel costs favorably affected logging and hauling expense. Other expenses were higher primarily due to an increase in the number of acres fertilized, primarily in the Southern region.

Wood Products Segment

	Quarter Ended March 31,
(Dollars in thousands)	2016		2015			Change
Revenues	$	83,238	$	89,233		$	(5,995	)	(7	)%
Cost of goods sold:1
Fiber costs	38,352		42,435			(4,083		)	(10	)%
Freight, logging and hauling	11,385		11,692			(307		)	(3	)%
Manufacturing costs	30,176		31,290			(1,114		)	(4	)%
Finished goods inventory change	991		(848		)	1,839			217	%
	80,904		84,569			(3,665		)	(4	)%
Selling, general and administrative expenses	1,378		1,164			214			18	%
Operating income (loss)	$	956	$	3,500		$	(2,544	)	(73	)%
Lumber shipments (MBF)	161,992		154,206			7,786			5	%
Lumber sales prices ($ per MBF)	$	324	$	386		$	(62	)	(16	)%

¹ Prior to elimination of intersegment fiber costs of $9.6 million in 2016 and $12.2 million in 2015.

Revenues were $6.0 million lower in the first quarter of 2016, compared with the same period last year, due to lower lumber prices, which were partially offset by a 5% increase in lumber shipments and an increase in residuals revenue. For certain residual shipments, we now arrange the freight and bill the costs to the customer.

Cost of goods sold fluctuated based on the following factors:

• Fiber costs decreased $4.1 million due to lower log costs in most of our mills.

• Freight costs increased $1.6 million for residuals that were previously the responsibility of the customer. Logging and hauling costs decreased $1.9 million due to a lower volume of logs purchased under cutting contracts that were resold due to species or dimensional differences.

• Lower manufacturing costs were the result of 11 days of downtime at our St. Maries, Idaho sawmill due to log shortages resulting from an unseasonably warm winter, as well as less maintenance expense in a few of our mills.

• Inventory will fluctuate based on a combination of volume and fiber and manufacturing costs. With a slowing lumber market in 2015, we built inventories. In the first quarter of 2016, the lumber market was improving and inventories declined.

17

Real Estate Segment

	Quarter Ended March 31,
(Dollars in thousands)	2016		2015		Change
Revenues	$	5,566	$	3,111	$	2,455	79		%
Cost of goods sold:
Basis of real estate sold	2,245		471		1,774		377		%
Other	618		451		167		37		%
	2,863		922		1,941		211		%
Selling, general and administrative expenses	628		590		38		6		%
Operating income	$	2,075	$	1,599	$	476	30		%
	2016				2015
	Acres Sold		Average Price/Acre		Acres Sold		Average Price/Acre
Higher and better use (HBU)	1,088		$	2,113	243		$	3,587
Rural real estate	2,281		$	1,406	1,122		$	1,324
Non-strategic timberland	104		$	565	788		$	903
Total	3,473				2,153

In the first quarter of 2016, we sold 1,320 more acres at a higher weighted average sales price, resulting in increased revenues of $2.5 million, compared with the same period last year. The average land basis per acre was higher than the prior year largely due to sales of recently acquired real estate in the South.

Liquidity and Capital Resources

Overview

At March 31, 2016, our financial highlights included:

• cash and short-term investments of $7.8 million,

• credit agreement borrowing capacity of $248.8 million, and

• long-term debt of $627.7 million.

Net Cash from Operations

Net cash provided from operating activities was:

• $28.9 million in 2016 and

• $24.4 million in 2015.

Net cash from operations increased $4.5 million for the quarter ended March 31, 2016, compared with the same period last year, primarily due to:

• a $6.2 million decrease in inventories due to the usage of logs over deliveries, and

• a $1.7 million cash refund from taxes partially offset by,

• a $4.0 million decrease in cash received from customers due to lower log and lumber prices.

Net Cash Flows from Investing Activities

Net cash used in investing activities was $3.1 million for the quarter ended March 31, 2016, compared with $0.2 million provided in 2015. Short-term investments remained flat for the quarter ended March 31, 2016, compared with a decrease of $7.5 million in 2015. Capital spending for property, plant and equipment and timber reforestation and roads during the quarter ended March 31, 2016 was $4.4 million lower than the same period in 2015. 2015 included large capital project installations at each of our four lumber mills. Capital spending is expected to be $19 million in 2016, compared with $32.7 million in 2015.

18

Net Cash Flows from Financing Activities

Net cash used in financing activities was $25.9 million and $20.2 million for the three months ended March 31, 2016 and 2015, respectively. Net cash used in financing activities in 2016 was primarily attributable to the $35 million repayment of borrowings and $15.3 million of dividends to stockholders, partially offset by $27.5 million in proceeds from the issuance of long-term debt. In 2015, net cash used for financing activities was primarily attributable to paying dividends to stockholders of $15.3 million.

Credit and Term Loan Agreement

In February 2016, we amended our term loan agreement to provide an additional loan in the amount of $27.5 million. This additional tranche refinanced $27.5 million of long-term debt that matured in December 2015 and February 2016. It matures in 2026 and carries a rate equal to 3-month LIBOR plus 2.15% per annum. At March 31, 2016, our term loan debt includes nine tranches totaling $349.5 million.

As of March 31, 2016, approximately $1.2 million of capacity under our credit agreement was utilized by outstanding letters of credit, resulting in $248.8 million available for additional borrowings under our credit agreement.

The following table sets forth the financial covenants in the credit and term loan agreements and our status with respect to these covenants as of March 31, 2016:

	Covenant Requirement		Actuals at March 31, 2016
Interest coverage ratio	≥	3.00 to 1.00	3.25 to 1.00
Leverage ratio	≤	40%	25%
Allowable acres that may be sold1		480,000

¹ Actual acres sold as of March 31, 2016, were 25,683 and 16,059 under the credit and term loan agreements, respectively.

Senior Notes

The terms of our senior notes limit our ability and the ability of any subsidiary guarantors to enter into restricted transactions, which include the ability to borrow money, pay dividends, redeem or repurchase capital stock, enter into sale and leaseback transactions and create liens. However, such restricted transactions are permitted if the balance of our cumulative Funds Available for Distribution (FAD), and a FAD basket amount, provide sufficient funds to cover such restricted payments. At March 31, 2016, our cumulative FAD was $69.9 million and the FAD basket was $90.1 million.

Sale of Central Idaho Timberlands

On April 21, 2016, we sold approximately 172,000 acres of timberlands located in central Idaho for $114 million. Net cash received was $111 million.

On April 11, 2016, the company's Board of Directors authorized management to repurchase up to $60 million of common stock over the next 24 months with the proceeds from the sale of the central Idaho timberlands.

In the second quarter of 2016, we plan to use a portion of the proceeds to repay $42.6 million of revenue bonds originally issued in 1996. This would decrease interest expense by approximately $2.5 million per year.

See Note 13: Subsequent Events in the Notes to Condensed Consolidated Financial Statements for more information.

As a result this sale, we have updated the number of non-core timberlands to be approximately 220,000 acres. This includes approximately 55,000 acres of HBU property, 55,000 acres of non-strategic timberland and 110,000 acres of rural recreational real estate property.

In addition, we have updated our harvest level to range between 3.8 million and 4.6 million tons each year over the next several years, depending on market conditions and other factors, assuming no significant timberland acquisitions or dispositions. Based on our current projections, which are based on constant timberland holdings,

19

and that take into consideration such factors as market conditions, the ages of our timber stands and recent timberland sales and acquisitions, we expect to harvest approximately 4.2 million tons in 2016.

Contractual Obligations

There have been no material changes to our contractual obligations in the three months ended March 31, 2016 outside the ordinary course of business.

Off-Balance Sheet Arrangements

We currently are not a party to off-balance sheet arrangements that would require disclosure under this section.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our exposures to market risk have not changed materially since December 31, 2015. For quantitative and qualitative disclosures about market risk, see Item 7A – “Quantitative and Qualitative Disclosure about Market Risk” in our 2015 Annual Report on Form 10-K.

Quantitative Information about Market Risks

The following table summarizes our outstanding long-term debt, weighted-average interest rates and interest rate swaps as of March 31, 2016:

	EXPECTED MATURITY DATE
(Dollars in thousands)	2016		2017			2018			2019			2020			THEREAFTER			TOTAL
Variable rate debt:
Principal due	$	—	$	—		$	—		$	40,000		$	40,000		$	67,500		$	147,500
Weighted-average interest rate									2.26		%	2.51		%	2.61		%	2.49		%
Fair value at 3/31/16																		$	147,500
Fixed rate debt:
Principal due	$	—	$	11,000		$	14,250		$	150,000		$	6,000		$	301,335		$	482,585
Weighted-average interest rate			5.64		%	8.88		%	7.50		%	3.70		%	5.09		%	5.95		%
Fair value at 3/31/16																		$	498,295
Interest rate swaps1:
Fixed to variable	$	—	$	101		$	459		$	963		$	—		$	—		$	1,523
Variable to fixed	$	—	$	—		$	—		$	—		$	—		$	269		$	269
Fair value at 3/31/16																		$	1,792
1 Interest rate swaps are included in long-term debt and offsetting derivative assets are included in other assets and other noncurrent assets on the Condensed Consolidated Balance Sheets. See Note 6: Derivative Instruments for additional information.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

We conducted an evaluation (pursuant to Rule 13a-15(b) of the Securities Exchange Act of 1934 (the Exchange Act)), under the supervision and with the participation of management, including the Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) as of March 31, 2016. These disclosure controls and procedures are designed to ensure that information required to be disclosed in our reports that are filed or submitted under

20

the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. Our disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that this information is accumulated and communicated to management, including the principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Based on the evaluation, the CEO and CFO have concluded that these disclosure controls and procedures were effective as of March 31, 2016.

There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.

Internal Control over Financial Reporting

In the three months ended March 31, 2016, there were no changes in our internal control over financial reporting that occurred that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II

ITEM 1. LEGAL PROCEEDINGS

Other than the environmental proceeding described in Note 11: Commitments and Contingencies in the Notes to Condensed Consolidated Financial Statements, which is incorporated herein by reference, we believe there is no pending or threatened litigation that could have a material adverse effect on our financial position, operations or liquidity.

ITEM 1A. RISK FACTORS

There have been no material changes in the risk factors previously disclosed in “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2015.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On April 11, 2016, the company's Board of Directors authorized a stock repurchase program. See Note 13: Subsequent Events in the Notes to Condensed Consolidated Financial Statements. There were no repurchases of common stock in the first quarter of 2016.

ITEM 6. EXHIBITS

Exhibits are listed in the Exhibit Index.

21

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		POTLATCH CORPORATION
		(Registrant)
		By	/S/ STEPHANIE A. BRADY
			Stephanie A. Brady
			Controller
			(Duly Authorized; Principal Accounting Officer)
Date:	April 26, 2016

22

POTLATCH CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXHIBIT INDEX

EXHIBIT NUMBER	DESCRIPTION
(3)(a)*	Second Restated Certificate of Incorporation of the Registrant, effective February 3, 2006, filed as Exhibit 99.2 to the Current Report on Form 8-K filed by the Registrant on February 6, 2006.
(3)(b)*	Bylaws of the Registrant, as amended through February 18, 2009, filed as Exhibit (3)(b) to the Current Report on Form 8-K filed by the Registrant on February 20, 2009.
(4)	Registrant undertakes to furnish to the Commission, upon request, any instrument defining the rights of holders of long-term debt.
(10)(a)*	First Amendment to Term Loan Agreement dated as of February 29, 2016 among Potlatch Corporation and its wholly owned subsidiaries, as borrowers, Northwest Farm credit services, PCA, as administrative agent and the Lender from time to time party thereto, filed as Exhibit 10.1 to the Current Report on Form 8-K filed by the Registrant on March 2, 2016.
(31)	Rule 13a-14(a)/15d-14(a) Certifications.
(32)	Furnished statements of the Chief Executive Officer and Chief Financial Officer under 18 U.S.C. Section 1350.
101	The following financial information from Potlatch Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, filed on April 26, 2016, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Statements of Income for the quarters ended March 31, 2016 and 2015, (ii) the Consolidated Statements of Comprehensive Income for the quarters ended March 31, 2016 and 2015, (iii) the Condensed Consolidated Balance Sheets at March 31, 2016 and December 31, 2015, (iv) the Condensed Consolidated Statements of Cash Flows for the quarters ended March 31, 2016 and 2015, and (v) the Notes to Condensed Consolidated Financial Statements.

* Incorporated by reference

23

EX-31

Exhibit (31)

CERTIFICATIONS

I, Michael J. Covey, certify that:

1. I have reviewed this report on Form 10-Q of Potlatch Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	April 26, 2016	/S/ MICHAEL J. COVEY
		Michael J. Covey
		Chief Executive Officer

CERTIFICATIONS

I, Jerald W. Richards, certify that:

1. I have reviewed this report on Form 10-Q of Potlatch Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	April 26, 2016	/S/ JERALD W. RICHARDS
		Jerald W. Richards
		Vice President and Chief Financial Officer

EX-32

Exhibit (32)

STATEMENT OF CHIEF EXECUTIVE OFFICER UNDER 18 U.S.C. § 1350

I, Michael J. Covey, Chief Executive Officer of Potlatch Corporation (the Company), certify pursuant to section 1350 of Chapter 63 of Title 18 of the United States Code that, to my knowledge:

(1) the Quarterly Report of the Company on Form 10-Q for the period ended March 31, 2016, as filed with the Securities and Exchange Commission on the date hereof (the Report), fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/S/ MICHAEL J. COVEY

Michael J. Covey

Chief Executive Officer

April 26, 2016

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

STATEMENT OF CHIEF FINANCIAL OFFICER UNDER 18 U.S.C. § 1350

I, Jerald W. Richards, Vice President and Chief Financial Officer of Potlatch Corporation (the Company), certify pursuant to section 1350 of Chapter 63 of Title 18 of the United States Code that, to my knowledge:

(1) the Quarterly Report of the Company on Form 10-Q for the period ended March 31, 2016, as filed with the Securities and Exchange Commission on the date hereof (the Report), fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/S/ JERALD W. RICHARDS

Jerald W. Richards

Vice President and Chief Financial Officer

April 26, 2016

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2016	Apr. 22, 2016
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q1
Entity Registrant Name	POTLATCH CORP
Entity Central Index Key	0001338749
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		40,688,158
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes

XML

Consolidated Statements of Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Revenues	$ 127,896	$ 134,125
Costs and expenses:
Cost of goods sold	109,815	107,772
Selling, general and administrative expenses	13,009	12,326
Total costs and expenses	122,824	120,098
Operating income	5,072	14,027
Interest expense, net	(6,025)	(8,069)
Income (loss) before income taxes	(953)	5,958
Income tax benefit (provision)	1,110	(302)
Net income	$ 157	$ 5,656
Net income per share:
Basic (in dollars per share)	$ 0.00	$ 0.14
Diluted (in dollars per share)	0.00	0.14
Distributions per share (in dollars per share)	$ 0.375	$ 0.375
Weighted-average shares outstanding (in thousands):
Basic (in shares)	40,875,179	40,801,993
Diluted (in shares)	40,959,675	40,885,116

XML

Consolidated Statement of Comprehensive Income - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2016		Mar. 31, 2015
Net income		$ 157		$ 5,656
Other comprehensive income, net of tax:
Amortization of prior service credit included in net periodic cost, net of tax of $(815) and $(849)	[1]	(1,275)		(1,328)
Amortization of actuarial loss included in net periodic cost, net of tax of $1,695 and $1,937	[1]	2,650		3,029
Cash flow hedge, net of tax of $(105)		(164)		0
Other comprehensive income, net of tax		1,211		1,701
Comprehensive income		$ 1,368	[1]	$ 7,357

[1] Amortization of prior service credit (cost) and amortization of actuarial loss are included in the computation of net periodic cost (benefit).

XML

Consolidated Statements of Comprehensive Income (Parentheticals) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Amortization of prior service credit included in net periodic cost, tax effect	$ (815)	$ (849)
Amortization of actuarial loss included in net periodic cost, tax effect	1,695	1,937
Cash flow hedge, tax effect	$ (105)	$ 0

XML

Consolidated Condensed Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Current assets:
Cash	$ 7,789	$ 7,886
Short-term investments	35	39
Receivables, net	14,710	13,420
Inventories	25,028	35,162
Other assets	14,106	14,246
Total current assets	61,668	70,753
Property, plant and equipment, net	74,060	75,285
Timber and timberlands, net	810,856	816,599
Deferred tax assets, net	46,645	46,600
Other assets	8,126	7,375
Total assets	1,001,355	1,016,612
Current liabilities:
Revolving line of credit borrowings	0	30,000
Current portion of long-term debt	0	5,007
Accounts payable and accrued liabilities	44,580	39,740
Current portion of pension and other postretirement employee benefits	5,973	5,973
Total current liabilities	50,553	80,720
Long-term debt	627,709	598,874
Pension and other postretirement employee benefits	118,999	119,369
Other long-term obligations	13,618	13,913
Total liabilities	810,879	812,876
Common stock, $1 par value	40,688	40,681
Additional paid-in capital	351,188	350,541
Accumulated deficit	(88,108)	(72,983)
Accumulated other comprehensive loss	(113,292)	(114,503)
Total stockholders’ equity	190,476	203,736
Total liabilities and stockholders' equity	$ 1,001,355	$ 1,016,612

XML

Consolidated Condensed Balance Sheets (Parentheticals) - $ / shares	Mar. 31, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 1	$ 1

XML

Consolidated Condensed Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 157	$ 5,656
Adjustments to reconcile net income to net cash from operating activities:
Depreciation, depletion and amortization	8,605	8,504
Basis of real estate sold	2,034	408
Change in deferred taxes	(1,110)	(936)
Employee benefit plans	2,737	1,723
Equity-based compensation expense	954	1,136
Other, net	(531)	(501)
Working capital and operating-related activities, net	16,047	8,447
Net cash from operating activities	28,893	24,437
CASH FLOWS FROM INVESTING ACTIVITIES
Change in short-term investments	4	7,483
Property, plant and equipment	(932)	(4,810)
Timberlands reforestation and roads	(2,242)	(2,734)
Other, net	116	309
Net cash from investing activities	(3,054)	248
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends to common stockholders	(15,258)	(15,253)
Repayment of revolving line of credit	(30,000)	0
Repayment of long-term debt	(5,000)	0
Proceeds from issuance of long-term debt	27,500	0
Change in book overdrafts	(2,836)	(3,551)
Employee tax withholdings on vested performance share awards	(101)	(1,407)
Other, net	(241)	26
Net cash from financing activities	(25,936)	(20,185)
Increase (decrease) in cash	(97)	4,500
Cash at beginning of period	7,886	4,644
Cash at end of period	7,789
Cash paid (received) during the period for:
Interest, net of amounts capitalized	2,029	1,498
Income taxes, net	$ (1,709)	$ 148

XML

Basis of Presentation

3 Months Ended

Mar. 31, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

BASIS OF PRESENTATION

For purposes of this report, any reference to “Potlatch,” “the company,” “we,” “us,” and “our” means Potlatch Corporation and all of its wholly-owned subsidiaries, except where the context indicates otherwise.

The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission pertaining to interim financial statements; certain disclosures normally provided in accordance with generally accepted accounting principles in the United States have been omitted. This Quarterly Report on Form 10-Q should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2015, as filed with the Securities and Exchange Commission on February 12, 2016. We believe that all adjustments necessary for a fair statement of the results of such interim periods have been included and all such adjustments are of a normal recurring nature.

XML

Recent Accounting Pronouncements

3 Months Ended

Mar. 31, 2016

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Recent Accounting Pronouncements

RECENT ACCOUNTING PRONOUNCEMENTS

In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-02, Leases, which, among other things, requires lessees to recognize most leases on the balance sheet. We have operating leases covering office space, equipment, land and vehicles expiring at various dates through 2028, which would require a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, to be recognized in the statement of financial position. Lease costs would generally continue to be recognized on a straight-line basis. The future minimum payments required under our operating leases totaled $9.6 million at December 31, 2015. The ASU is effective for us on January 1, 2019.

In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting, which changes several aspects of the accounting for share-based payment award transactions, including accounting for income taxes, classification of excess tax benefits on the statement of cash flows, forfeitures and minimum statutory tax withholding requirements. This ASU is effective for us on January 1, 2017. The adoption of this guidance is not expected to have a significant effect on our consolidated financial statements.

XML

Earnings per Share

3 Months Ended

Mar. 31, 2016

Earnings Per Share, Basic, Other Disclosures [Abstract]

Earnings per Share

EARNINGS PER SHARE

The following table reconciles the number of shares used in calculating basic and diluted earnings per share:

	Quarter Ended   March 31,
(Dollars in thousands, except per share amounts)	2016		2015
Net income	$	157	$	5,656
Basic weighted-average shares outstanding	40,875,179		40,801,993
Incremental shares due to:
Performance shares	69,292		70,187
Restricted stock units	15,204		12,936
Diluted weighted-average shares outstanding	40,959,675		40,885,116
Basic net income per share	$	—	$	0.14
Diluted net income per share	$	—	$	0.14

For the three months ended March 31, 2016, there were 90,272 stock-based awards that were excluded from the calculation of diluted earnings per share because they were anti-dilutive. For the three months ended March 31, 2015, there were 55,987 anti-dilutive stock-based awards. Anti-dilutive stock-based awards could be dilutive in future periods.

XML

Certain Balance Sheet Components

3 Months Ended

Mar. 31, 2016

Balance Sheet Related Disclosures [Abstract]

Supplemental Balance Sheet Disclosures

(Dollars in thousands)	March 31,   2016		December 31,   2015
Inventories:
Logs	$	276	$	9,920
Lumber, plywood and veneer	16,096		16,932
Materials and supplies	8,656		8,310
Total inventories	$	25,028	$	35,162

PROPERTY, PLANT AND EQUIPMENT

(Dollars in thousands)	March 31,   2016			December 31,   2015
Property, plant and equipment	$	248,496		$	248,750
Less: accumulated depreciation	(174,436		)	(173,465		)
Total property, plant and equipment, net	$	74,060		$	75,285

XML

Debt

3 Months Ended

Mar. 31, 2016

Debt Disclosure [Abstract]

Debt

DEBT

In February 2016, we amended our term loan agreement to provide an additional loan in the amount of $27.5 million. This additional tranche refinanced $27.5 million of long-term debt that matured in December 2015 and February 2016. It matures in 2026 and carries a rate equal to 3-month LIBOR plus 2.15% per annum. At March 31, 2016, our term loan debt includes nine tranches totaling $349.5 million.

XML

Derivative Instruments

3 Months Ended

Mar. 31, 2016

Derivative Instrument Detail [Abstract]

Derivative Instruments and Hedging Activities Disclosure [Text Block]

DERIVATIVE INSTRUMENTS

From time to time, we enter into derivative financial instruments to manage certain cash flow and fair value risks.

Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset or liability to a particular risk, such as interest rate risk, are considered fair value hedges. We have seven fair value interest rate swaps to convert interest payments on fixed-rate debt to variable-rate 3-month LIBOR plus a spread.

Derivatives designated and qualifying as a hedge of the exposure to variability in the cash flows of a specific asset or liability that is attributable to a particular risk, such as interest rate risk, are considered cash flow hedges. We have one interest rate swap to convert variable-rate debt, comprised of 3-month LIBOR plus a spread, to fixed-rate debt. Our cash flow hedge is expected to be highly effective in achieving offsetting cash flows attributable to the hedged interest rate risk through the term of the hedge. Therefore, changes in the fair value of the interest rate swap are recorded as a component of other comprehensive income and will be recognized in earnings when the hedged interest rate affects earnings. The amounts paid or received on this interest rate hedge will be recognized as adjustments to interest expense. As of March 31, 2016, the amount of net losses expected to be reclassified into earnings in the next 12 months is $0.3 million.

The following table presents the gross fair values of derivative instruments on our Condensed Consolidated Balance Sheets:

		Assets					Liabilities
(Dollars in thousands)	Location	March 31, 2016		December 31, 2015		Location	March 31, 2016		December 31, 2015
Derivatives designated as hedging instruments:
Interest rate contracts	Other assets, current	$	—	$	7	Long-term debt	$	269	$	—
Interest rate contracts	Other assets, non-current	1,523		574
Total derivatives designated as hedging instruments		$	1,523	$	581		$	269	$	—

The following tables detail the effect of derivatives on our Consolidated Statements of Income:

		Quarter Ended   March 31,
(Dollars in thousands)	Location	2016		2015
Derivatives designated in fair value hedging relationships:
Realized gain on interest rate contracts 1	Interest expense	$	242	$	379

		Quarter Ended   March 31,
(Dollars in thousands)	Location	2016			2015
Derivatives designated in cash flow hedging relationships:
Gain (loss) recognized in OCI on derivative, net of tax of $(105) and $ - (effective portion)	Other Comprehensive Income	$	(164	)	$	—
Gain (loss) reclassified from AOCI into income (effective portion)	Interest expense	$	—		$	—

¹Realized gain on hedging instruments consists of net cash settlements and interest accruals on the interest rate swaps during the periods. Net cash settlements are included in the supplemental cash flow information within interest, net of amounts capitalized in the Condensed Consolidated Statements of Cash Flows.

XML

Financial Instruments

3 Months Ended

Mar. 31, 2016

Derivative Instrument Detail [Abstract]

Financial Instruments

FINANCIAL INSTRUMENTS

The following table presents the estimated fair values of our financial instruments:

	March 31, 2016				December 31, 2015
(Dollars in thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Cash and short-term investments (Level 1)	$	7,824	$	7,824	$	7,925	$	7,925
Derivative asset related to interest rate swaps (Level 2)	$	1,523	$	1,523	$	581	$	581
Derivative liability related to interest rate swaps (Level 2)	$	269	$	269	$	—	$	—
Long-term debt, including fair value adjustments related to hedging instruments (Level 2)	$	627,709	$	647,587	$	603,881	$	626,021
Company owned life insurance asset (COLI) (Level 3)	$	1,122	$	1,122	$	687	$	687

For cash and short-term investments, the carrying amount approximates fair value due to the short-term nature of these financial instruments.

The fair value of the interest rate swaps were determined by discounting the expected cash flows of each derivative. The analysis reflects the contractual terms of the derivatives, including the period to maturity and uses observable market-based inputs, including interest rate forward curves.

The fair value of our long-term debt is estimated based upon the quoted market prices for the same or similar debt issues, or estimated based on average market prices for comparable debt when there is no quoted market price.

The contract value of our COLI, the amount at which it could be redeemed, is used as a practical expedient to estimate fair value because market prices are not readily available.

XML

Pension and Other Postretirement Employee Benefits

3 Months Ended

Mar. 31, 2016

General Discussion of Pension and Other Postretirement Benefits [Abstract]

Pension and Other Postretirement Employee Benefits

PENSION AND OTHER POSTRETIREMENT EMPLOYEE BENEFITS

The following table details the components of net periodic cost (benefit) of our pension plans and other postretirement employee benefits (OPEB):

	Quarter Ended March 31,
	Pension						OPEB
(Dollars in thousands)	2016			2015			2016			2015
Service cost	$	1,507		$	1,530		$	5		$	7
Interest cost	4,252			4,259			355			383
Expected return on plan assets	(4,766		)	(5,191		)	—			—
Amortization of prior service cost (credit)	130			151			(2,220		)	(2,328		)
Amortization of actuarial loss	3,917			4,408			428			558
Net periodic cost (benefit)	$	5,040		$	5,157		$	(1,432	)	$	(1,380	)

During the three months ended March 31, 2016 and 2015, we paid non-qualified supplemental pension benefits of $0.4 million and $0.4 million.

During the three months ended March 31, 2016 and 2015, we paid OPEB benefits of $1.3 million and $1.3 million.

The following tables detail the pension and OPEB changes in accumulated other comprehensive loss (AOCL):

	Quarter Ended March 31, 2016
(Dollars in thousands)	Pension			OPEB			Total
Balance at January 1	$	128,244		$	(13,741	)	$	114,503
Amortization of defined benefit items, net of tax:1
Prior service credit (cost)	(79		)	1,354			1,275
Actuarial loss	(2,389		)	(261		)	(2,650		)
Total reclassification for the period	(2,468		)	1,093			(1,375		)
Balance at March 31	$	125,776		$	(12,648	)	$	113,128
	Quarter Ended March 31, 2015
(Dollars in thousands)	Pension			OPEB			Total
Balance at January 1	$	134,261		$	(15,869	)	$	118,392
Amortization of defined benefit items, net of tax:1
Prior service credit (cost)	(92		)	1,420			1,328
Actuarial loss	(2,689		)	(340		)	(3,029		)
Total reclassification for the period	(2,781		)	1,080			(1,701		)
Balance at March 31	$	131,480		$	(14,789	)	$	116,691

¹ Amortization of prior service credit (cost) and amortization of actuarial loss are included in the computation of net periodic cost (benefit).

XML

Equity-Based Compensation

3 Months Ended

Mar. 31, 2016

Share-based Compensation [Abstract]

Equity-Based Compensation

EQUITY-BASED COMPENSATION

As of March 31, 2016, we had two stock incentive plans under which performance shares, restricted stock units (RSUs) and deferred compensation stock equivalent units were outstanding. These plans have received shareholder approval. We were originally authorized to issue up to 1.6 million shares and 1.0 million shares under our 2005 Stock Incentive Plan and 2014 Stock Incentive Plan, respectively. At March 31, 2016, approximately 1.1 million shares were authorized for future use. We issue new shares of common stock to settle performance shares, restricted stock units and deferred compensation stock equivalent units.

The following table details compensation expense and the related income tax benefit:

	Quarter Ended   March 31,
(Dollars in thousands)	2016		2015
Employee equity-based compensation expense:
Performance shares	$	754	$	872
Restricted stock units	200		205
Total employee equity-based compensation expense	$	954	$	1,077
Deferred compensation stock equivalent units expense	$	200	$	119
Total tax benefit recognized for share-based expense	$	66	$	74

PERFORMANCE SHARES

The following table presents the key inputs used in the Monte Carlo simulation to calculate the fair value of the performance share awards in 2016 and 2015:

	Quarter Ended   March 31,
	2016			2015
Stock price as of valuation date	$	25.92		$	40.00
Risk-free rate	0.88		%	1.07		%

The following table summarizes outstanding performance share awards as of March 31, 2016, and changes during the three months ended March 31, 2016:

(Dollars in thousands, except grant date fair value)	Shares	Weighted-Avg. Grant Date Fair Value		Aggregate Intrinsic Value
Unvested shares outstanding at January 1	161,049	$	41.26
Granted	125,469	$	30.02
Forfeited	—	$	—
Unvested shares outstanding at March 31	286,518	$	36.34	$	9,025

As of March 31, 2016, there was $6.0 million of unrecognized compensation cost related to unvested performance share awards, which is expected to be recognized over a weighted-average period of 1.9 years.

RESTRICTED STOCK UNITS

The following table summarizes outstanding RSU awards as of March 31, 2016, and changes during the three months ended March 31, 2016:

(Dollars in thousands, except grant date fair value)	Shares		Weighted-Avg. Grant Date Fair Value		Aggregate Intrinsic Value
Unvested shares outstanding at January 1	44,531		$	40.95
Granted	42,320		$	25.92
Vested	(1,500	)	$	38.91
Forfeited	—		$	—
Unvested shares outstanding at March 31	85,351		$	33.07	$	2,689

The fair value of each RSU equaled our common share price on the date of grant. The total fair value of RSU awards that vested during the three months ended March 31, 2016 was $0.1 million. As of March 31, 2016, there was $1.8 million of total unrecognized compensation cost related to unvested RSU awards, which is expected to be recognized over a weighted-average period of 2.0 years.

XML

Income Taxes

3 Months Ended

Mar. 31, 2016

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

As a real estate investment trust (REIT), we generally are not subject to federal and state corporate income taxes on income of the REIT that we distribute to our shareholders. We conduct certain activities through our taxable REIT subsidiaries (TRS), which are subject to corporate level federal and state income taxes. These taxable activities are principally comprised of our wood products manufacturing operations and certain real estate investments. Therefore, income tax expense or benefit is primarily due to income or loss of the TRS, as well as permanent book versus tax differences.

XML

Commitments and Contingencies

3 Months Ended

Mar. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

COMMITMENTS AND CONTINGENCIES

In January 2007, the Environmental Protection Agency (EPA) notified us that we are a potentially responsible party under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA) and the Clean Water Act for cleanup of a site known as Avery Landing in northern Idaho. We own a portion of the land at the Avery Landing site, which we acquired in 1980 from the Milwaukee Railroad. The land we own at the site and adjacent properties were contaminated with petroleum as a result of the Milwaukee Railroad's operations at the site prior to 1980. On July 5, 2011, the EPA issued an Action Memorandum for the Avery Landing site selecting contaminant extraction and off-site disposal as the remedial alternative. On May 23, 2012, we signed a consent order with the EPA pursuant to which we agreed to provide $1.75 million in funding for EPA cleanup on a portion of our property (including the adjacent riverbank owned by the Idaho Department of Lands). The EPA cleanup was completed in October 2012. On April 4, 2013, the EPA issued a unilateral administrative order requiring us to remediate the portion of the Avery Landing site that we own. Our remediation was completed in October 2013. On September 25, 2015 the EPA sent us a letter asserting that the EPA and the Department of Transportation (the current owner of a portion of the adjacent property remediated by the EPA) (DOT) had incurred $9.8 million in unreimbursed response costs associated with the site and that we were liable for such costs. We believe we have meritorious defenses to this claim and we intend to defend ourselves vigorously. We have reserved all of our rights to seek reimbursement for the costs of remediation from all parties potentially responsible. We have executed a tolling agreement with the EPA and DOT suspending the statute of limitations on the claim until June 2016 in order to facilitate negotiations of a final settlement and release. We accrued $0.2 million for this matter in the first quarter of 2016. We believe that it is reasonably possible that we may incur additional charges in respect of this claim in the future that may exceed our accrual by up to $2.5 million.

XML

Segment Information

3 Months Ended

Mar. 31, 2016

Segment Reporting Information, Additional Information [Abstract]

Segment Information

SEGMENT INFORMATION

The following table summarizes information by business segment:

	Quarter Ended   March 31,
(Dollars in thousands)	2016			2015
Revenues:
Resource	$	48,710		$	53,955
Wood Products	83,238			89,233
Real Estate	5,566			3,111
	137,514			146,299
Elimination of intersegment revenues - Resource	(9,618		)	(12,174		)
Total consolidated revenues	$	127,896		$	134,125
Operating income:
Resource	$	10,207		$	14,978
Wood Products	956			3,500
Real Estate	2,075			1,599
Eliminations and adjustments	1,465			2,975
	14,703			23,052
Corporate	(9,631		)	(9,025		)
Operating income	5,072			14,027
Interest expense, net	(6,025		)	(8,069		)
Income (loss) before income taxes	$	(953	)	$	5,958
Depreciation, depletion and amortization:
Resource	$	6,128		$	6,254
Wood Products	1,901			1,576
Real Estate	2			15
	8,031			7,845
Corporate	208			284
Bond discounts and deferred loan fees	366			375
Total depreciation, depletion and amortization	$	8,605		$	8,504
Basis of real estate sold:
Real Estate	$	2,245		$	471
Eliminations and adjustments	(211		)	(63		)
Total basis of real estate sold	$	2,034		$	408

XML

Subsequent Events

3 Months Ended

Mar. 31, 2016

Subsequent Events [Abstract]

Subsequent Events [Text Block]

SUBSEQUENT EVENTS

On April 21, 2016, we sold approximately 172,000 acres of timberlands located in central Idaho for $114 million.  The company purchased the property in 2007 and 2008 for the purpose of growing and harvesting timber and selling rural recreation parcels.  The sale frees up capital without having to wait for the rural recreation real estate market in central Idaho to recover.  We expect to record a loss of $36 million after taxes in our Real Estate segment in the second quarter of 2016.  Historical earnings generated by the property have been positive, but not material.

The asset group was classified as held and used as of March 31, 2016.  Neither a signed letter of intent, nor an approved purchase agreement were in place as of that date. Because negotiations were underway with the buyer at the balance sheet date, we believed that it was prudent to complete an undiscounted cash flow analysis to determine whether the asset group was impaired.  Given the long period of time over which cash flows would be generated in the hold scenario and management’s belief that the likelihood that a sale would be completed was 20%, the undiscounted cash flows significantly exceeded the book basis of the asset group.  Therefore, management concluded that the asset group was not impaired as of March 31, 2016.

On April 11, 2016, the company's Board of Directors authorized management, at its discretion, to repurchase up to $60 million of common stock with the proceeds from the sale of the central Idaho timberlands. Share repurchases may be executed through various means, including, without limitation, open market transactions, privately negotiated transactions or otherwise. The share repurchase program does not obligate Potlatch to purchase any shares, and expires in two years. The authorization for the share repurchase program may be terminated, increased, or decreased by the company's Board of Directors in its discretion at any time.

XML

Earnings per Share (Tables)

3 Months Ended

Mar. 31, 2016

Earnings Per Share, Basic, Other Disclosures [Abstract]

Reconciliation of Number of Common Shares Used in Calculating Basic and Diluted EPS

The following table reconciles the number of shares used in calculating basic and diluted earnings per share:

	Quarter Ended   March 31,
(Dollars in thousands, except per share amounts)	2016		2015
Net income	$	157	$	5,656
Basic weighted-average shares outstanding	40,875,179		40,801,993
Incremental shares due to:
Performance shares	69,292		70,187
Restricted stock units	15,204		12,936
Diluted weighted-average shares outstanding	40,959,675		40,885,116
Basic net income per share	$	—	$	0.14
Diluted net income per share	$	—	$	0.14

XML

Certain Balance Sheet Components (Tables)

3 Months Ended

Mar. 31, 2016

Balance Sheet Related Disclosures [Abstract]

Schedule of Inventory

(Dollars in thousands)	March 31,   2016		December 31,   2015
Inventories:
Logs	$	276	$	9,920
Lumber, plywood and veneer	16,096		16,932
Materials and supplies	8,656		8,310
Total inventories	$	25,028	$	35,162

Property, Plant and Equipment

(Dollars in thousands)	March 31,   2016			December 31,   2015
Property, plant and equipment	$	248,496		$	248,750
Less: accumulated depreciation	(174,436		)	(173,465		)
Total property, plant and equipment, net	$	74,060		$	75,285

XML

Derivative Instruments (Tables)

3 Months Ended

Mar. 31, 2016

Derivative Instrument Detail [Abstract]

Fair Values of Derivative Instruments

The following table presents the gross fair values of derivative instruments on our Condensed Consolidated Balance Sheets:

		Assets					Liabilities
(Dollars in thousands)	Location	March 31, 2016		December 31, 2015		Location	March 31, 2016		December 31, 2015
Derivatives designated as hedging instruments:
Interest rate contracts	Other assets, current	$	—	$	7	Long-term debt	$	269	$	—
Interest rate contracts	Other assets, non-current	1,523		574
Total derivatives designated as hedging instruments		$	1,523	$	581		$	269	$	—

Effect of Derivatives on Consolidated Statements of Income

The following tables detail the effect of derivatives on our Consolidated Statements of Income:

		Quarter Ended   March 31,
(Dollars in thousands)	Location	2016		2015
Derivatives designated in fair value hedging relationships:
Realized gain on interest rate contracts 1	Interest expense	$	242	$	379

		Quarter Ended   March 31,
(Dollars in thousands)	Location	2016			2015
Derivatives designated in cash flow hedging relationships:
Gain (loss) recognized in OCI on derivative, net of tax of $(105) and $ - (effective portion)	Other Comprehensive Income	$	(164	)	$	—
Gain (loss) reclassified from AOCI into income (effective portion)	Interest expense	$	—		$	—

¹Realized gain on hedging instruments consists of net cash settlements and interest accruals on the interest rate swaps during the periods. Net cash settlements are included in the supplemental cash flow information within interest, net of amounts capitalized in the Condensed Consolidated Statements of Cash Flows.

XML

Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2016

Derivative Instrument Detail [Abstract]

Fair Value, by Balance Sheet Grouping

The following table presents the estimated fair values of our financial instruments:

	March 31, 2016				December 31, 2015
(Dollars in thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Cash and short-term investments (Level 1)	$	7,824	$	7,824	$	7,925	$	7,925
Derivative asset related to interest rate swaps (Level 2)	$	1,523	$	1,523	$	581	$	581
Derivative liability related to interest rate swaps (Level 2)	$	269	$	269	$	—	$	—
Long-term debt, including fair value adjustments related to hedging instruments (Level 2)	$	627,709	$	647,587	$	603,881	$	626,021
Company owned life insurance asset (COLI) (Level 3)	$	1,122	$	1,122	$	687	$	687

XML

Pension and Other Postretirement Employee Benefits (Tables)

3 Months Ended

Mar. 31, 2016

General Discussion of Pension and Other Postretirement Benefits [Abstract]

Components of Net Periodic Cost (Benefit)

The following table details the components of net periodic cost (benefit) of our pension plans and other postretirement employee benefits (OPEB):

	Quarter Ended March 31,
	Pension						OPEB
(Dollars in thousands)	2016			2015			2016			2015
Service cost	$	1,507		$	1,530		$	5		$	7
Interest cost	4,252			4,259			355			383
Expected return on plan assets	(4,766		)	(5,191		)	—			—
Amortization of prior service cost (credit)	130			151			(2,220		)	(2,328		)
Amortization of actuarial loss	3,917			4,408			428			558
Net periodic cost (benefit)	$	5,040		$	5,157		$	(1,432	)	$	(1,380	)

Schedule of Accumulated Other Comprehensive Loss

The following tables detail the pension and OPEB changes in accumulated other comprehensive loss (AOCL):

	Quarter Ended March 31, 2016
(Dollars in thousands)	Pension			OPEB			Total
Balance at January 1	$	128,244		$	(13,741	)	$	114,503
Amortization of defined benefit items, net of tax:1
Prior service credit (cost)	(79		)	1,354			1,275
Actuarial loss	(2,389		)	(261		)	(2,650		)
Total reclassification for the period	(2,468		)	1,093			(1,375		)
Balance at March 31	$	125,776		$	(12,648	)	$	113,128
	Quarter Ended March 31, 2015
(Dollars in thousands)	Pension			OPEB			Total
Balance at January 1	$	134,261		$	(15,869	)	$	118,392
Amortization of defined benefit items, net of tax:1
Prior service credit (cost)	(92		)	1,420			1,328
Actuarial loss	(2,689		)	(340		)	(3,029		)
Total reclassification for the period	(2,781		)	1,080			(1,701		)
Balance at March 31	$	131,480		$	(14,789	)	$	116,691

¹ Amortization of prior service credit (cost) and amortization of actuarial loss are included in the computation of net periodic cost (benefit).

XML

Equity-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2016

Share-based Compensation [Abstract]

Details of Compensation Expense

The following table details compensation expense and the related income tax benefit:

	Quarter Ended   March 31,
(Dollars in thousands)	2016		2015
Employee equity-based compensation expense:
Performance shares	$	754	$	872
Restricted stock units	200		205
Total employee equity-based compensation expense	$	954	$	1,077
Deferred compensation stock equivalent units expense	$	200	$	119
Total tax benefit recognized for share-based expense	$	66	$	74

Fair Value of Performance Share Awards

The following table presents the key inputs used in the Monte Carlo simulation to calculate the fair value of the performance share awards in 2016 and 2015:

	Quarter Ended   March 31,
	2016			2015
Stock price as of valuation date	$	25.92		$	40.00
Risk-free rate	0.88		%	1.07		%

Summary of Outstanding Performance Share Awards

The following table summarizes outstanding performance share awards as of March 31, 2016, and changes during the three months ended March 31, 2016:

(Dollars in thousands, except grant date fair value)	Shares	Weighted-Avg. Grant Date Fair Value		Aggregate Intrinsic Value
Unvested shares outstanding at January 1	161,049	$	41.26
Granted	125,469	$	30.02
Forfeited	—	$	—
Unvested shares outstanding at March 31	286,518	$	36.34	$	9,025

Summary of Outstanding RSU Awards

The following table summarizes outstanding RSU awards as of March 31, 2016, and changes during the three months ended March 31, 2016:

(Dollars in thousands, except grant date fair value)	Shares		Weighted-Avg. Grant Date Fair Value		Aggregate Intrinsic Value
Unvested shares outstanding at January 1	44,531		$	40.95
Granted	42,320		$	25.92
Vested	(1,500	)	$	38.91
Forfeited	—		$	—
Unvested shares outstanding at March 31	85,351		$	33.07	$	2,689

XML

Segment Information (Tables)

3 Months Ended

Mar. 31, 2016

Segment Reporting Information, Additional Information [Abstract]

Summary of Information by Business Segment

The following table summarizes information by business segment:

	Quarter Ended   March 31,
(Dollars in thousands)	2016			2015
Revenues:
Resource	$	48,710		$	53,955
Wood Products	83,238			89,233
Real Estate	5,566			3,111
	137,514			146,299
Elimination of intersegment revenues - Resource	(9,618		)	(12,174		)
Total consolidated revenues	$	127,896		$	134,125
Operating income:
Resource	$	10,207		$	14,978
Wood Products	956			3,500
Real Estate	2,075			1,599
Eliminations and adjustments	1,465			2,975
	14,703			23,052
Corporate	(9,631		)	(9,025		)
Operating income	5,072			14,027
Interest expense, net	(6,025		)	(8,069		)
Income (loss) before income taxes	$	(953	)	$	5,958
Depreciation, depletion and amortization:
Resource	$	6,128		$	6,254
Wood Products	1,901			1,576
Real Estate	2			15
	8,031			7,845
Corporate	208			284
Bond discounts and deferred loan fees	366			375
Total depreciation, depletion and amortization	$	8,605		$	8,504
Basis of real estate sold:
Real Estate	$	2,245		$	471
Eliminations and adjustments	(211		)	(63		)
Total basis of real estate sold	$	2,034		$	408

XML

Recent Accounting Pronouncements (Details) $ in Millions	Dec. 31, 2015 USD ($)
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]
Operating Leases, Future Minimum Payments Due	$ 9.6

XML

Earnings per Share (Reconciliation Of Number Of Common Shares Used In Calculating Basic And Diluted EPS) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Earnings per Share [Line Items]
Net income	$ 157	$ 5,656
Basic weighted-average shares outstanding (in shares)	40,875,179	40,801,993
Diluted weighted-average shares outstanding (in shares)	40,959,675	40,885,116
Basic net income per share (in dollars per share)	$ 0.00	$ 0.14
Diluted net income per share (in dollars per share)	$ 0.00	$ 0.14
Total anti-dilutive shares excluded from the calculation (in shares)	90,272	55,987
Performance shares [Member]
Earnings per Share [Line Items]
Incremental shares (in shares)	69,292	70,187
Restricted stock units [Member]
Earnings per Share [Line Items]
Incremental shares (in shares)	15,204	12,936

XML

Certain Balance Sheet Components (Inventories) (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Inventory Disclosure [Abstract]
Logs	$ 276	$ 9,920
Lumber, plywood and veneer	16,096	16,932
Materials and supplies	8,656	8,310
Inventories, Total	$ 25,028	$ 35,162

XML

Certain Balance Sheet Components (Property, Plant and Equipment) (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Property, Plant and Equipment [Line Items]
Property, plant and equipment	$ 248,496	$ 248,750
Less: accumulated depreciation	174,436	173,465
Property, plant and equipment, net	$ 74,060	$ 75,285

XML

Debt (Narrative) (Details) - Term Loans [Member] $ in Millions	Mar. 31, 2016 USD ($) Tranche	Feb. 29, 2016 USD ($)
Line of Credit Facility [Line Items]
Long-term Debt, Gross | $	$ 349.5	$ 27.5
Debt Instrument, Interest Rate, Stated Percentage	2.15%
Number of Tranches Included in Term Loan | Tranche	9

XML

Derivative Instruments (Narrative) (Details) $ in Millions	3 Months Ended
	Mar. 31, 2016 USD ($)
Derivative Instrument Detail [Abstract]
Net losses expected to be reclassified into earnings in the next twelve months	$ 0.3

XML

Derivative Instruments (Fair Value of Derivative Instruments) (Details) - Designated as Hedging Instrument [Member] - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Assets [Member]
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset	$ 1,523	$ 581
Liability [Member]
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset	269	0
Interest rate contracts [Member] | Other Current Assets [Member]
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset	0	7
Interest rate contracts [Member] | Other Noncurrent Assets [Member]
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset	1,523	574
Interest rate contracts [Member] | Long-term Debt [Member]
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset	$ 269	$ 0

XML

Derivative Instruments (Effect of Derivatives on Consolidated Statements of Income) (Details) - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2016	Mar. 31, 2015
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) recognized in OCI on derivative (effective portion), tax effect		$ (105)	$ 0
Other Comprehensive Income (Loss) [Member] | Cash Flow Hedging [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) recognized in OCI on derivative, net of tax of $(105) and $ - (effective portion)		(164)	0
Interest Expense [Member] | Fair Value Hedging [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Realized gain on interest rate contracts	[1]	242	379
Interest Expense [Member] | Cash Flow Hedging [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) reclassified from AOCI into income (effective portion)		$ 0	$ 0

[1] Realized gain on hedging instruments consists of net cash settlements and interest accruals on the interest rate swaps during the periods. Net cash settlements are included in the supplemental cash flow information within interest, net of amounts capitalized in the Condensed Consolidated Statements of Cash Flows.

XML

Financial Instruments (Estimated Fair Values Of Financial Instruments) (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Level 1 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and short-term investments, Carrying Amount	$ 7,824	$ 7,925
Cash and short-term investments, Fair Value	7,824	7,925
Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt, including fair value adjustments related to hedging instruments, Carrying Amount	627,709	603,881
Long-term debt, including fair value adjustments related to hedging instruments, Fair Value	647,587	626,021
Level 2 [Member] | Interest rate contracts [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative asset related to interest rate swaps, Carrying Amount	1,523	581
Derivative asset related to interest rate swaps, Fair Value	1,523	581
Derivative liability related to interest rate swap, Carrying Amount	269	0
Derivative liability related to interest rate swap, Fair Value	269	0
Level 3 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Company owned life insurance asset (COLI)	$ 1,122	$ 687

XML

Pension and Other Postretirement Employee Benefits (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Defined Benefit Plan Disclosure [Line Items]
Other Postretirement Benefits Payments	$ 1.3	$ 1.3
Non-Qualified Supplemental Pension Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Contributions	$ 0.4	$ 0.4

XML

Pension and Other Postretirement Employee Benefits (Components Of Net Periodic Cost (Benefit)) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Pension Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 1,507	$ 1,530
Interest cost	4,252	4,259
Expected return on plan assets	(4,766)	(5,191)
Amortization of prior service cost (credit)	130	151
Amortization of actuarial loss	3,917	4,408
Net periodic cost (benefit)	5,040	5,157
Other Postretirement Employee Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	5	7
Interest cost	355	383
Expected return on plan assets	0	0
Amortization of prior service cost (credit)	(2,220)	(2,328)
Amortization of actuarial loss	428	558
Net periodic cost (benefit)	$ (1,432)	$ (1,380)

XML

Pension and Other Postretirement Employee Benefits (Change in Accumulated Other Comprehensive Loss (AOCL)) (Details) - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2016	Mar. 31, 2015
Accumulated Other Comprehensive Loss [Roll Forward]
AOCL at beginning of period		$ 114,503	$ 118,392
Prior service credit (cost)	[1]	1,275	1,328
Actuarial loss	[1]	(2,650)	(3,029)
Total reclassification for the period	[1]	1,375	1,701
AOCL at end of period		113,128	116,691
Pension Plans [Member]
Accumulated Other Comprehensive Loss [Roll Forward]
AOCL at beginning of period		128,244	134,261
Prior service credit (cost)	[1]	(79)	(92)
Actuarial loss	[1]	(2,389)	(2,689)
Total reclassification for the period	[1]	2,468	2,781
AOCL at end of period		125,776	131,480
Other Postretirement Employee Benefits [Member]
Accumulated Other Comprehensive Loss [Roll Forward]
AOCL at beginning of period		(13,741)	(15,869)
Prior service credit (cost)	[1]	1,354	1,420
Actuarial loss	[1]	(261)	(340)
Total reclassification for the period	[1]	(1,093)	(1,080)
AOCL at end of period		$ (12,648)	$ (14,789)

[1] Amortization of prior service credit (cost) and amortization of actuarial loss are included in the computation of net periodic cost (benefit).

XML

Equity-Based Compensation (Narrative) (Details) shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2016 USD ($) shares
Performance shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost | $	$ 6.0
Weighted average period (in years)	1 year 10 months 24 days
Restricted stock units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost | $	$ 1.8
Weighted average period (in years)	2 years
Total fair value of RSU awards vested | $	$ 0.1
2005 Stock Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized | shares	1.6
2014 Stock Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized | shares	1.0
2005 and 2014 Stock Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized | shares	1.1

XML

Equity-Based Compensation (Details Of Compensation Expense) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Employee equity-based compensation expense	$ 954	$ 1,077
Deferred compensation stock equivalent units expense	200	119
Total tax benefit recognized for share-based expense	66	74
Performance shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Employee equity-based compensation expense	754	872
Restricted stock units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Employee equity-based compensation expense	$ 200	$ 205

XML

Equity-Based Compensation (Fair Value of Performance Share Awards) (Details) - Performance Shares [Member] - $ / shares	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock price as of valuation date (in dollars per share)	$ 25.92	$ 40.00
Risk-free rate	0.88%	1.07%

XML

Equity-Based Compensation (Summary Of Outstanding Performance Shares/Restricted Stock Units) (Details) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2016 USD ($) $ / shares shares
Performance shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Unvested shares outstanding at January 1, Shares | shares	161,049
Granted (in shares) | shares	125,469
Forfeited (in shares) | shares	0
Unvested shares outstanding at March 31, Shares | shares	286,518.000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Unvested shares outstanding at January 1, Weighted Avg. Grant Date Fair Value (in dollars per share) | $ / shares	$ 41.26
Granted, Weighted Av.g Exercise Price (in dollars per share) | $ / shares	30.02
Forfeited, Weighted Avg. Forfeited Date Fair Value (in dollars per share) | $ / shares	0.00
Unvested shares outstanding at March 31, Weighted Avg. Grant Date Fair Value (in dollars per share) | $ / shares	$ 36.34
Aggregate Intrinsic Value | $	$ 9,025
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Unvested shares outstanding at January 1, Shares | shares	44,531
Granted (in shares) | shares	42,320
Vested (in shares) | shares	(1,500)
Forfeited (in shares) | shares	0
Unvested shares outstanding at March 31, Shares | shares	85,351
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Unvested shares outstanding at January 1, Weighted Avg. Grant Date Fair Value (in dollars per share) | $ / shares	$ 40.95
Granted, Weighted Av.g Exercise Price (in dollars per share) | $ / shares	25.92
Vested, Weighted Avg. Grant Date Fair Value (in dollars per share) | $ / shares	38.91
Forfeited, Weighted Avg. Forfeited Date Fair Value (in dollars per share) | $ / shares	0.00
Unvested shares outstanding at March 31, Weighted Avg. Grant Date Fair Value (in dollars per share) | $ / shares	$ 33.07
Aggregate Intrinsic Value | $	$ 2,689

XML

Commitments and Contingencies (Details) - USD ($) $ in Thousands	Sep. 25, 2015	May. 23, 2012	Mar. 31, 2016
Site Contingency [Line Items]
Loss Contingency Accrual, Payments		$ 1,750
Loss Contingency, Damages Sought, Value	$ 9,800
Loss Contingency Accrual			$ 200
Loss Contingency, Range of Possible Loss, Portion Not Accrued			$ 2,500

XML

Segment Information (Summary Of Information By Business Segment) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Segment Reporting Information [Line Items]
Segment Revenues	$ 127,896	$ 134,125
Operating Income (loss)	(953)	5,958
Operating Income	5,072	14,027
Interest expense, net	(6,025)	(8,069)
Depreciation, depletion and amortization	8,605	8,504
Bond Discounts and Deferred Loan Fees	366	375
Basis of real estate sold	2,034	408
Operating Segments [Member]
Segment Reporting Information [Line Items]
Segment Revenues	137,514	146,299
Operating Income (loss)	14,703	23,052
Depreciation, depletion and amortization	8,031	7,845
Resource [Member]
Segment Reporting Information [Line Items]
Segment Revenues	48,710	53,955
Operating Income (loss)	10,207	14,978
Depreciation, depletion and amortization	6,128	6,254
Wood Products [Member]
Segment Reporting Information [Line Items]
Segment Revenues	83,238	89,233
Operating Income (loss)	956	3,500
Depreciation, depletion and amortization	1,901	1,576
Real Estate [Member]
Segment Reporting Information [Line Items]
Segment Revenues	5,566	3,111
Operating Income (loss)	2,075	1,599
Depreciation, depletion and amortization	2	15
Basis of real estate sold	2,245	471
Eliminations and Adjustments [Member]
Segment Reporting Information [Line Items]
Segment Revenues	(9,618)	(12,174)
Operating Income (loss)	1,465	2,975
Corporate [Member]
Segment Reporting Information [Line Items]
Operating Income (loss)	(9,631)	(9,025)
Depreciation, depletion and amortization	208	284
Basis of Real Estate Sold Eliminations and Adjustments [Member]
Segment Reporting Information [Line Items]
Basis of real estate sold	$ (211)	$ (63)

XML

Subsequent Events (Details) $ in Thousands	3 Months Ended
	Jun. 30, 2016 USD ($) a	Mar. 31, 2016 USD ($)	Mar. 31, 2015 USD ($)	Apr. 11, 2016 USD ($)
Subsequent Event [Line Items]
Net income		$ 157	$ 5,656
Management's Belief that the Likelihood that a Sale would be Completed		20.00%
Subsequent Event [Member]
Subsequent Event [Line Items]
Acres sold through timberland sale | a	172,000
Land Sales	$ 114,000
Stock Repurchase Program, Authorized Amount				$ 60,000
Real Estate [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Net income	$ 36,000