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 June 30, 2016

or

o 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.    Yes  x    No  o

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).    Yes  x    No  o

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	o  (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  o    No  x

The number of shares of common stock of the registrant outstanding as of July 25, 2016 was 40,518,533.

POTLATCH CORPORATION AND CONSOLIDATED SUBSIDIARIES

Table of Contents

		Page Number
PART I. - FINANCIAL INFORMATION
ITEM 1.	Financial Statements (unaudited)
	Consolidated Statements of Income (Loss)	2
	Consolidated Statements of Comprehensive Income (Loss)	3
	Condensed Consolidated Balance Sheets at June 30, 2016 and December 31, 2015	4
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 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	15
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	24
ITEM 4.	Controls and Procedures	24
PART II. - OTHER INFORMATION
ITEM 1.	Legal Proceedings	25
ITEM 1A.	Risk Factors	25
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25
ITEM 6.	Exhibits	25
SIGNATURE		26
EXHIBIT INDEX		27

Part I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Potlatch Corporation and Consolidated Subsidiaries

Consolidated Statements of Income (Loss)

Unaudited (Dollars in thousands, except per share amounts)

	Quarters Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Revenues	$	141,495		$	128,747		$	269,391		$	262,872
Costs and expenses:
Cost of goods sold		113,377			109,441			223,192			217,213
Selling, general and administrative expenses		13,824			11,995			26,833			24,321
Loss on sale of central Idaho timber and timberlands		48,522			—			48,522			—
		175,723			121,436			298,547			241,534
Operating income (loss)		(34,228	)		7,311			(29,156	)		21,338
Interest expense, net		(8,206	)		(8,016	)		(14,231	)		(16,085	)
Income (loss) before income taxes		(42,434	)		(705	)		(43,387	)		5,253
Income tax benefit		11,196			1,416			12,306			1,114
Net income (loss)	$	(31,238	)	$	711		$	(31,081	)	$	6,367
Net income (loss) per share:
Basic	$	(0.77	)	$	0.02		$	(0.76	)	$	0.16
Diluted	$	(0.77	)	$	0.02		$	(0.76	)	$	0.16
Dividends per share	$	0.375		$	0.375		$	0.75		$	0.75
Weighted-average shares outstanding (in thousands):
Basic		40,784			40,843			40,837			40,822
Diluted		40,784			40,963			40,837			40,933

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

2

Potlatch Corporation and Consolidated Subsidiaries

Consolidated Statements of Comprehensive Income (Loss)

Unaudited (Dollars in thousands)

	Quarters Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Net income (loss)	$	(31,238	)	$	711		$	(31,081	)	$	6,367
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), $(848), $(1,630)    and $(1,697)		(1,274	)		(1,328	)		(2,549	)		(2,656	)
Amortization of actuarial loss included in net    periodic cost, net of tax of $1,826, $1,900, $3,521    and $3,837		2,857			2,974			5,507			6,003
Cash flow hedge, net of tax of $(264), $-, $(369) and $-		(413	)		—			(577	)		—
Other comprehensive income, net of tax		1,170			1,646			2,381			3,347
Comprehensive income (loss)	$	(30,068	)	$	2,357		$	(28,700	)	$	9,714

See Note 7: Derivative Instruments and Note 9: Pension and Other Postretirement Employee Benefits for additional information. Amortization of prior service credit and amortization of actuarial loss are included in the computation of net periodic cost (benefit).

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

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Potlatch Corporation and Consolidated Subsidiaries

Condensed Consolidated Balance Sheets

Unaudited (Dollars in thousands)

	June 30, 2016			December 31, 2015
ASSETS
Current assets:
Cash	$	25,301		$	7,886
Short-term investments		40,077			39
Receivables, net		22,531			13,420
Inventories		30,045			35,162
Other assets		17,162			14,246
Total current assets		135,116			70,753
Property, plant and equipment, net		74,558			75,285
Timber and timberlands, net		643,814			816,599
Deferred tax assets, net		51,569			46,600
Other assets		9,088			7,375
Total assets	$	914,145		$	1,016,612
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Revolving line of credit borrowings	$	—		$	30,000
Current portion of long-term debt		5,082			5,007
Accounts payable and accrued liabilities		48,290			39,740
Current portion of pension and other postretirement employee benefits		5,973			5,973
Total current liabilities		59,345			80,720
Long-term debt		581,205			598,874
Pension and other postretirement employee benefits		119,590			119,369
Other long-term obligations		13,462			13,913
Total liabilities		773,602			812,876
Commitments and contingencies
Stockholders' equity:
Common stock, $1 par value		40,519			40,681
Additional paid-in capital		352,497			350,541
Accumulated deficit		(140,351	)		(72,983	)
Accumulated other comprehensive loss		(112,122	)		(114,503	)
Total stockholders’ equity		140,543			203,736
Total liabilities and stockholders' equity	$	914,145		$	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)

	Six Months Ended June 30,
	2016			2015
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	(31,081	)	$	6,367
Adjustments to reconcile net income (loss) to net cash from operating activities:
Depreciation, depletion and amortization		16,474			15,597
Basis of real estate sold		5,421			1,008
Change in deferred taxes		(6,784	)		(1,707	)
Employee benefit plans		6,416			3,166
Equity-based compensation expense		2,176			2,259
Loss on sale of central Idaho timber and timberlands		48,522			—
Other, net		(1,280	)		(5,496	)
Change in working capital and operating-related activities, net		5,797			(4,538	)
Net cash from operating activities		45,661			16,656
CASH FLOWS FROM INVESTING ACTIVITIES
Change in short-term investments		(40,038	)		24,537
Property, plant and equipment		(3,488	)		(12,248	)
Timberlands reforestation and roads		(5,544	)		(6,004	)
Acquisition of timber and timberlands		(1,161	)		—
Net proceeds from sale of central Idaho timber and timberlands		111,460			—
Other, net		109			433
Net cash from investing activities		61,338			6,718
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends to common stockholders		(30,453	)		(30,507	)
Repayment of revolving line of credit borrowings		(30,000	)		—
Proceeds from revolving line of credit borrowings		—			15,000
Repayment of long-term debt		(47,600	)		—
Proceeds from issuance of long-term debt		27,500			—
Repurchase of common stock		(5,956	)		—
Change in book overdrafts		(2,836	)		(2,246	)
Employee tax withholdings on vested performance share awards		(102	)		(1,445	)
Other, net		(137	)		(37	)
Net cash from financing activities		(89,584	)		(19,235	)
Increase in cash		17,415			4,139
Cash at beginning of period		7,886			4,644
Cash at end of period	$	25,301		$	8,783
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid (received) during the period for:
Interest, net of amounts capitalized	$	13,791		$	13,702
Income taxes, net	$	(1,740	)	$	1,512

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

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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, diluted shares outstanding, 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.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which eliminates the probable recognition threshold for credit impairments. The new guidance broadens the information that an entity must consider in developing its expected credit loss estimate for assets measured either collectively or individually to include forecasted information, as well as past events and current conditions. There is no specified method for measuring expected credit losses, and an entity is allowed to apply methods that reasonably reflect its expectations of the credit loss estimate. This ASU is effective for us on January 1, 2020. Our credit loss estimates are reflected in our allowance for doubtful accounts on accounts receivables, which had a balance of $0.4 million at December 31, 2015. 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:

	Quarters Ended June 30,					Six Months Ended June 30,
(Dollars in thousands, except per share amounts)	2016			2015		2016			2015
Net income (loss)	$	(31,238	)	$	711	$	(31,081	)	$	6,367
Basic weighted-average shares outstanding		40,784,129			40,842,672		40,836,503			40,822,326
Incremental shares due to:
Performance shares		—			100,915		—			92,130
Restricted stock units		—			19,901		—			18,396
Diluted weighted-average shares outstanding		40,784,129			40,963,488		40,836,503			40,932,852
Basic net income (loss) per share	$	(0.77	)	$	0.02	$	(0.76	)	$	0.16
Diluted net income (loss) per share	$	(0.77	)	$	0.02	$	(0.76	)	$	0.16

No dilutive potential shares were included in the computation of diluted net income (loss) per share for the three and six months ended 2016 due to the net loss. For the three months ended June 30, 2016 and 2015, there were 107,769 and 1,000 stock-based awards that were excluded from the calculation of diluted earnings per share because they were anti-dilutive. For the six months ended June 30, 2016 and 2015, there were 67,846 and 80,726 anti-dilutive stock-based awards. Anti-dilutive stock-based awards could be dilutive in future periods.

We repurchased 169,625 shares of common stock during the quarter at an average price of $35.08 per share totaling $6.0 million. The shares were retired and the excess repurchase price over par was allocated to accumulated deficit.

NOTE 4. CERTAIN BALANCE SHEET COMPONENTS

INVENTORIES

(Dollars in thousands)	June 30, 2016		December 31, 2015
Inventories:
Logs	$	4,882	$	9,920
Lumber, plywood and veneer		16,533		16,932
Materials and supplies		8,630		8,310
Total inventories	$	30,045	$	35,162

PROPERTY, PLANT AND EQUIPMENT

(Dollars in thousands)	June 30, 2016			December 31, 2015
Property, plant and equipment	$	250,502		$	248,750
Less: accumulated depreciation		(175,944	)		(173,465	)
Total property, plant and equipment, net	$	74,558		$	75,285

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NOTE 5. LOSS ON SALE OF CENTRAL IDAHO TIMBER AND TIMBERLANDS

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.  In the recession of 2008 the central Idaho rural recreational real estate market collapsed and has not fully recovered. The sale frees up capital without having to wait for the rural recreation real estate market in central Idaho to recover. We recorded a loss of $48.5 million before 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 end of the first quarter, 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, at March 31, 2016 management concluded that the asset group was not impaired and recorded the loss on sale in the second quarter of 2016.  

NOTE 6. 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. The new debt matures in 2026 and carries a rate equal to 3-month LIBOR plus 2.15% per annum.    

In June 2016, we repaid $42.6 million of revenue bonds.  The bonds carried a rate of 5.9% and had a maturity date in 2026.

NOTE 7. 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 June 30, 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:

		Asset Derivatives					Liability Derivatives
(Dollars in thousands)	Location	June 30, 2016		December 31, 2015		Location	June 30, 2016		December 31, 2015
Derivatives designated as    hedging instruments:
Interest rate contracts	Other assets, current	$	82	$	7	Long-term debt	$	946	$	—
Interest rate contracts	Other assets, non-current		1,610		574
Total derivatives designated    as hedging instruments		$	1,692	$	581		$	946	$	—

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The following table details the effect of derivatives on our Consolidated Statements of Income:

		Quarters Ended June 30,					Six Months Ended June 30,
(Dollars in thousands)	Location	2016			2015		2016			2015
Derivatives designated in fair value    hedging relationships:
Realized gain on interest rate contracts1	Interest expense	$	214		$	409	$	456		$	788
Derivatives designated in cash flow    hedging relationships:
Gain (loss) recognized on derivative,    net of tax of $(264) and $(369) (effective    portion)	Other Comprehensive Income	$	(490	)	$	—	$	(654	)	$	—
Gain (loss) reclassified into    income (effective portion)	Interest expense		(77	)		—		(77	)		—
Net effect on other comprehensive income (loss)		$	(413	)	$	—	$	(577	)	$	—

¹ Realized gain on hedging instruments consists of net cash settlements and interest accruals on the fair value 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.

NOTE 8. FINANCIAL INSTRUMENTS

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

	June 30, 2016				December 31, 2015
(Dollars in thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Cash and short-term investments (Level 1)	$	65,378	$	65,378	$	7,925	$	7,925
Asset related to interest rate swaps (Level 2)	$	1,692	$	1,692	$	581	$	581
Liability related to interest rate swaps (Level 2)	$	946	$	946	$	—	$	—
Long-term debt, including fair value adjustments related to    hedging instruments (Level 2)	$	586,287	$	609,232	$	603,881	$	626,021
Company owned life insurance asset (COLI) (Level 3)	$	1,683	$	1,683	$	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.

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NOTE 9. PENSION AND OTHER POSTRETIREMENT EMPLOYEE BENEFITS

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

	Quarters Ended June 30,
	Pension						OPEB
(Dollars in thousands)	2016			2015			2016			2015
Service cost	$	1,747		$	1,531		$	2		$	4
Interest cost		4,258			4,259			355			345
Expected return on plan assets		(4,734	)		(5,192	)		—			—
Amortization of prior service cost (credit)		129			152			(2,218	)		(2,328	)
Amortization of actuarial loss		4,253			4,408			430			466
Net periodic cost (benefit)	$	5,653		$	5,158		$	(1,431	)	$	(1,513	)
	Six Months Ended June 30,
	Pension						OPEB
(Dollars in thousands)	2016			2015			2016			2015
Service cost	$	3,254		$	3,061		$	7		$	11
Interest cost		8,510			8,518			710			728
Expected return on plan assets		(9,500	)		(10,383	)		—			—
Amortization of prior service cost (credit)		259			303			(4,438	)		(4,656	)
Amortization of actuarial loss		8,170			8,816			858			1,024
Net periodic cost (benefit)	$	10,693		$	10,315		$	(2,863	)	$	(2,893	)

During the six months ended June 30, 2016 and 2015, we paid non-qualified supplemental pension benefits of $0.7 million and $0.9 million.

During the six months ended June 30, 2016 and 2015, we paid OPEB benefits of $1.9 million and $1.8 million.

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

	Quarter ended June 30, 2016
(Dollars in thousands)	Pension			OPEB			Total
Balance at March 31	$	125,776		$	(12,648	)	$	113,128
Amortization of defined benefit items, net of tax:1
Prior service credit (cost)		(79	)		1,353			1,274
Actuarial loss		(2,594	)		(263	)		(2,857	)
Total reclassification for the period		(2,673	)		1,090			(1,583	)
Balance at June 30	$	123,103		$	(11,558	)	$	111,545
	Quarter ended June 30, 2015
(Dollars in thousands)	Pension			OPEB			Total
Balance at March 31	$	131,480		$	(14,789	)	$	116,691
Amortization of defined benefit items, net of tax:1
Prior service credit (cost)		(92	)		1,420			1,328
Actuarial loss		(2,689	)		(285	)		(2,974	)
Total reclassification for the period		(2,781	)		1,135			(1,646	)
Balance at June 30	$	128,699		$	(13,654	)	$	115,045

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	Six Months Ended June 30, 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)		(158	)		2,707			2,549
Actuarial loss		(4,983	)		(524	)		(5,507	)
Total reclassification for the period		(5,141	)		2,183			(2,958	)
Balance at June 30	$	123,103		$	(11,558	)	$	111,545
	Six Months Ended June 30, 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)		(184	)		2,840			2,656
Actuarial loss		(5,378	)		(625	)		(6,003	)
Total reclassification for the period		(5,562	)		2,215			(3,347	)
Balance at June 30	$	128,699		$	(13,654	)	$	115,045

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

NOTE 10. EQUITY-BASED COMPENSATION

As of June 30, 2016, we had two stock incentive plans under which performance shares, restricted stock units (RSUs) and deferred compensation stock equivalent units 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 June 30, 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 equity-based compensation expense and the related income tax benefit:

	Quarters Ended June 30,				Six Months Ended June 30,
(Dollars in thousands)	2016		2015		2016		2015
Employee equity-based compensation expense:
Performance shares	$	951	$	950	$	1,705	$	1,822
Restricted stock units		271		232		471		437
Total employee equity-based compensation expense	$	1,222	$	1,182	$	2,176	$	2,259
Deferred compensation stock equivalent units expense	$	220	$	47	$	420	$	166
Total tax benefit recognized for share-based expense	$	89	$	78	$	155	$	152

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:

	Six Months Ended June 30,
	2016			2015
Stock price as of valuation date	$	25.92		$	40.00
Risk-free rate		0.88	%		1.07	%
Expected volatility		23.82	%		21.09	%
Expected dividends		5.79	%		3.75	%
Expected term (years)		3.00			3.00

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The following table summarizes outstanding performance share awards as of June 30, 2016, and changes during the six months ended June 30, 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
Unvested shares outstanding at June 30		286,518	$	36.64	$	9,770

As of June 30, 2016, there was $5.1 million of unrecognized compensation cost related to unvested performance share awards, which is expected to be recognized over a weighted-average period of 1.7 years.

RESTRICTED STOCK UNITS

The following table summarizes outstanding RSU awards as of June 30, 2016, and changes during the six months ended June 30, 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		43,320		$	26.08
Vested		(2,000	)	$	39.12
Unvested shares outstanding at June 30		85,851		$	33.03	$	2,928

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 six months ended June 30, 2016 was $0.1 million. As of June 30, 2016, there was $1.6 million of total unrecognized compensation cost related to unvested RSU awards, which is expected to be recognized over a weighted-average period of 1.7 years.

DEFERRED COMPENSATION STOCK EQUIVALENT UNITS

A long-term incentive award is granted annually to our directors, and payable upon a director's separation from service. Directors may also elect to defer their annual retainers, payable in the form of stock. All stock unit equivalent accounts are credited with dividend equivalents. As of June 30, 2016, there were 148,248 shares outstanding that will be distributed in the future to directors as common stock.  

Issuance of restricted stock units awarded to certain officers and select employees may also be deferred.  All stock unit equivalent accounts are credited with dividend equivalents.  As of June 30, 2016, there were 65,357 RSUs which had vested, but issuance of the related stock had been deferred.

NOTE 11. 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.

As a result of the loss on sale of central Idaho timberlands, in the second quarter of 2016 $5.5 million was reclassed from a net operating loss carryforward within deferred taxes to receivables, net.

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NOTE 12. 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 $9.6 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 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. In June 2016, the parties agreed to extend the tolling agreement through October 6, 2016 and settlement negotiations continue. We accrued $0.2 million for this matter in the first quarter of 2016 and an additional $0.8 million for this matter in the second quarter of 2016. 

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NOTE 13. SEGMENT INFORMATION

The following table summarizes information by business segment:

	Quarters Ended June 30,						Six Months Ended June 30,
(Dollars in thousands)	2016			2015			2016			2015
Revenues:
Resource	$	54,826		$	44,111		$	103,536		$	98,066
Wood Products		90,924			84,191			174,162			173,424
Real Estate		9,954			10,745			15,520			13,856
		155,704			139,047			293,218			285,346
Eliminationofintersegmentrevenues-Resource		(14,209	)		(10,300	)		(23,827	)		(22,474	)
Total consolidated revenues	$	141,495		$	128,747		$	269,391		$	262,872
Operating income (loss):
Resource	$	15,672		$	8,797		$	25,879		$	23,775
Wood Products		4,695			(1,953	)		5,651			1,547
Real Estate1		(43,429	)		8,521			(41,354	)		10,120
Eliminations and adjustments		(969	)		539			496			3,514
		(24,031	)		15,904			(9,328	)		38,956
Corporate		(10,197	)		(8,593	)		(19,828	)		(17,618	)
Operating income (loss)		(34,228	)		7,311			(29,156	)		21,338
Interest expense, net		(8,206	)		(8,016	)		(14,231	)		(16,085	)
Income (loss) before income taxes	$	(42,434	)	$	(705	)	$	(43,387	)	$	5,253
Depreciation, depletion and amortization:
Resource	$	5,387		$	4,797		$	11,515		$	11,051
Wood Products		1,800			1,661			3,701			3,237
Real Estate		1			15			3			30
		7,188			6,473			15,219			14,318
Corporate		213			251			421			535
Bond discounts and deferred loan fees		468			369			834			744
Total depreciation, depletion and amortization	$	7,869		$	7,093		$	16,474		$	15,597
Basis of real estate sold:
Real Estate	$	3,509		$	710		$	5,754		$	1,181
Eliminations and adjustments		(122	)		(110	)		(333	)		(173	)
Total basis of real estate sold	$	3,387		$	600		$	5,421		$	1,008

¹ In the second quarter of 2016, we sold approximately 172,000 acres of timberlands located in central Idaho for $114 million at a loss of $48.5 million before taxes. 

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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, benefit of stronger Canadian dollar, 2016 capital spending, stock repurchase, debt refinancing, reduced interest expense, expected harvest levels in 2016 and beyond, 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.

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

During the first half of 2016, lumber demand increased as compared with the same time last year when lumber prices were decreasing. U.S. housing starts increased 8% year-over-year and the do-it-yourself market has been strong. The Canadian dollar strengthened about 6% against the U.S. dollar during 2016, which benefits lumber manufacturers located in the United States by reversing some of the competitive advantage Canada had in 2015.  

In April 2016, we sold approximately 172,000 acres of non-strategic timberlands located in central Idaho for $114 million in our Real Estate segment. The sale freed up capital for a common stock repurchase program and the repayment of long-term debt without having to wait for the rural recreation real estate market in central Idaho to recover. We repurchased shares of common stock totaling $6.0 million and repaid $42.6 million in long-term debt in the three months ended June 30, 2016.

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

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

	Quarters Ended June 30,							Six Months Ended June 30,
(Dollars in thousands)	2016			2015			%Change	2016			2015			%Change
Revenues	$	141,495		$	128,747		10%	$	269,391		$	262,872		2%
Costs and expenses:
Cost of goods sold		113,377			109,441		4%		223,192			217,213		3%
Selling, general and    administrative expenses		13,824			11,995		15%		26,833			24,321		10%
Loss on sale of central Idaho timber and timberlands		48,522			—		*		48,522			—		*
		175,723			121,436		*		298,547			241,534		*
Operating income (loss)		(34,228	)		7,311		*		(29,156	)		21,338		*
Interest expense, net		(8,206	)		(8,016	)	2%		(14,231	)		(16,085	)	(12%)
Income (loss) before    income taxes		(42,434	)		(705	)	*		(43,387	)		5,253		*
Income tax benefit		11,196			1,416		*		12,306			1,114		*
Net income (loss)	$	(31,238	)	$	711		*	$	(31,081	)	$	6,367		*

*  Percentage change not meaningful.

Revenues

Our Business Segment Results provide a more detailed discussion of our segments.

Three months ended June 30, 2016 compared with three months ended June 30, 2015

Revenues increased 10% in the second quarter of 2016, compared with the same period last year, primarily due to a 16% increase in harvest volumes and 12% increase in lumber shipments.

Six months ended June 30, 2016 compared with six months ended June 30, 2015

Revenues increased 2% in the first half of 2016, compared with the same period last year, primarily due to a 10% increase in harvest volumes and 9% increase in lumber shipments, partially offset by 8% lower lumber sales prices.

Cost of goods sold

Our Business Segment Results provide a more detailed discussion of our segments.

Three months ended June 30, 2016 compared with three months ended June 30, 2015

Cost of goods sold increased 4% in the second quarter of 2016, compared with the same period last year, primarily due to logging and hauling on the higher harvest volumes and an increase in the average land basis of real estate sold due to geographic mix.

Six months ended June 30, 2016 compared with six months ended June 30, 2015

Cost of goods sold increased 3% in the first half of 2016, compared with the same period last year, primarily due to additional log and haul volumes and an increase in the average land basis of real estate sold due to geographic mix.

Selling, general and administrative expenses

Three months ended June 30, 2016 compared with three months ended June 30, 2015

Selling, general and administrative expenses increased $1.8 million in the second quarter of 2016, compared with the same period last year, due primarily to an $0.8 million expense related to Avery Landing and higher non-cash mark-to-market adjustments related to our deferred compensation plans, which are impacted by the market price of our common stock.

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Six months ended June 30, 2016 compared with six months ended June 30, 2015

Selling, general and administrative expenses increased $2.5 million in the first half of 2016, compared with the same period last year, due primarily to a $1.0 million expense related to Avery Landing and higher non-cash mark-to-market adjustments related to our deferred compensation plans, which are impacted by the market price of our common stock.

See Note 12: Commitments and Contingencies for a more detailed discussion of Avery Landing.

Loss on sale of central Idaho timber and timberlands

In April 2016, we sold approximately 172,000 acres of non-strategic timberlands located in central Idaho for $114 million, less selling costs of $2.5 million. This divestiture resulted in a $48.5 million loss before income taxes.

Interest expense, net

Three months ended June 30, 2016 compared with three months ended June 30, 2015

Interest expense increased in the second quarter of 2016, compared with the same period last year, due to unamortized debt issuance costs that were expensed in the second quarter associated with the repayment of the $42.6 million revenue bonds.

Six months ended June 30, 2016 compared with six months ended June 30, 2015

Interest expense decreased in the first half of 2016, compared with the same period last year, due primarily to a $2.2 million patronage dividend received in the first quarter of 2016. The patronage dividend was higher in 2016, as compared with 2015, as a result of the debt used to fund the acquisition of timberlands in Alabama and Mississippi in December 2014.

Income tax provision

Three months ended June 30, 2016 compared with three months ended June 30, 2015

Income taxes are primarily due to income or loss from our taxable REIT subsidiaries (TRS). For the second quarter of 2016, the income tax benefit of $11.2 million is the result of the TRS’s loss before income tax of $31.1 million, partially offset by discrete tax items. For the second quarter of 2015, the income tax benefit of $1.4 million was the result of the TRS’s loss before income taxes of $3.9 million.

Six months ended June 30, 2016 compared with six months ended June 30, 2015

For the first half of 2016, the income tax benefit of $12.3 million is the result of the TRS’s loss before income tax of $33.2 million, discrete tax items, and permanent book versus tax differences. For the first half of 2015, the income tax benefit of $1.1 million was the result of the TRS’s loss before income tax of $2.6 million and permanent book versus tax differences.

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Business Segment Results

Resource Segment

	Quarters Ended June 30,					Six Months Ended June 30,
(Dollars in thousands)	2016		2015		% Change	2016		2015		% Change
Revenues1	$	54,826	$	44,111	24%	$	103,536	$	98,066	6%
Cost of goods sold:
Logging and hauling		24,964		21,141	18%		49,773		47,725	4%
Depreciation, depletion and    amortization		5,387		4,742	14%		11,515		10,918	5%
Other		7,267		7,893	(8%)		13,457		12,725	6%
		37,618		33,776	11%		74,745		71,368	5%
Selling, general and administrative    expenses		1,536		1,538	—		2,912		2,923	—
Operating income	$	15,672	$	8,797	78%	$	25,879	$	23,775	9%
Harvest Volumes (in tons)
Northern region
Sawlog		388,575		287,979	35%		755,427		739,527	2%
Pulpwood		44,497		31,284	42%		96,858		79,124	22%
Stumpage		1,061		3,277	(68%)		17,268		20,180	(14%)
Total		434,133		322,540	35%		869,553		838,831	4%
Southern region
Sawlog		175,498		142,107	23%		360,549		296,837	21%
Pulpwood		240,277		270,518	(11%)		488,429		447,863	9%
Stumpage		65,596		53,176	23%		121,675		93,137	31%
Total		481,371		465,801	3%		970,653		837,837	16%
Total harvest volume		915,504		788,341	16%		1,840,206		1,676,668	10%
Sales Price/Unit ($ per ton)
Northern region
Sawlog2	$	89	$	89	—	$	84	$	85	(1%)
Pulpwood2	$	40	$	41	(2%)	$	41	$	42	(2%)
Stumpage	$	11	$	6	83%	$	13	$	9	44%
Southern region
Sawlog2	$	42	$	41	2%	$	41	$	41	—
Pulpwood2	$	33	$	34	(3%)	$	32	$	34	(6%)
Stumpage	$	23	$	15	53%	$	21	$	16	31%

¹ Intersegment fiber revenues were $14.2 million and $10.3 million for the quarters ended June 30 in 2016 and 2015 and $23.8 million and $22.5 million for the six months ended June 30 in 2016 and 2015, which are not eliminated above.

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

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Revenues

Three months ended June 30, 2016 compared with three months ended June 30, 2015

Resource segment revenues increased 24% in the second quarter of 2016, compared with the same period last year,

Volumes in our Northern region increased 35% in the second quarter of 2016, compared with the same period last year, due to an early spring breakup that occurred in the first quarter and favorable spring hauling conditions in the second quarter. Sawlog prices were comparable in both periods.

Harvest volumes in our Southern region were 3% higher in the second quarter of 2016 due to favorable weather and the sale of stumpage contracts. Southern sawlog prices are up slightly from last year while pulpwood prices are lower due to high pulp mill inventories. Stumpage prices fluctuate based on the mix of pulpwood and sawlog volumes and the mix of hardwood and softwood.

Six months ended June 30, 2016 compared with six months ended June 30, 2015

Resource segment revenues increased 6% in the first half of 2016, compared with the same period last year.

Harvest volumes in our Northern region increased 4% in the first half of 2016, compared with the same period last year. Volumes were lower than planned in the first quarter due to an early spring breakup and favorable spring hauling conditions that allowed the shortfall to be more than made up in the second quarter. A significant portion of our sawlog sales in our Northern region are indexed to lumber prices on a one to three month lag.

Harvest volumes in our Southern region were 16% higher in the first half 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 were flat while pulpwood sale prices decreased 6% due to high inventories at pulpwood mills. Stumpage prices fluctuate based on the mix of pulpwood and sawlog volumes and the mix of hardwood and softwood.

Cost of Goods Sold

Three months ended June 30, 2016 compared with three months ended June 30, 2015

The increase in harvest volumes resulted in higher logging, hauling and depletion expense. Lower diesel prices resulted in slightly lower hauling rates.

Six months ended June 30, 2016 compared with six months ended June 30, 2015

The increase in harvest volumes resulted in higher logging, hauling and depletion expense. Lower diesel prices resulted in slightly lower hauling rates. Other expenses were higher primarily due to an increase in the number of acres fertilized, largely in our Southern region.

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Wood Products Segment

	Quarters Ended June 30,							Six Months Ended June 30,
(Dollars in thousands)	2016			2015			% Change	2016		2015		%Change
Revenues	$	90,924		$	84,191		8%	$	174,162	$	173,424	0%
Cost of goods sold:1
Fiber costs		40,842			39,904		2%		79,194		82,339	(4%)
Freight, logging and hauling		11,786			10,974		7%		23,171		22,666	2%
Manufacturing costs		32,914			31,443		5%		63,090		62,733	1%
Finished goods inventory change		(777	)		2,629		(130%)		214		1,781	(88%)
		84,765			84,950		0%		165,669		169,519	(2%)
Selling, general and administrative expenses		1,464			1,194		23%		2,842		2,358	21%
Operating income (loss)	$	4,695		$	(1,953	)	(340%)	$	5,651	$	1,547	265%
Lumber shipments (MBF)		170,829			152,071		12%		332,821		306,277	9%
Lumber sales prices ($ per MBF)	$	351		$	351		0%	$	338	$	368	(8%)

¹ Intersegment fiber costs were $14.2 million and $10.3 million for the quarters ended June 30 in 2016 and 2015 and $23.8 million and $22.5 million for the six months ended June 30 in 2016 and 2015, which are not eliminated above.

Revenues

Three months ended June 30, 2016 compared with three months ended June 30, 2015

Revenues were $6.7 million higher in the second quarter of 2016, compared with the same period last year, due primarily to higher lumber shipments.

Six months ended June 30, 2016 compared with six months ended June 30, 2015

Revenues were $0.7 million higher in the first half of 2016, compared with the same period last year. Higher lumber shipments were almost entirely offset by lower lumber sales prices.

Cost of Goods Sold

Three months ended June 30, 2016 compared with three months ended June 30, 2015

Cost of goods sold fluctuated based on the following factors:

• Fiber costs increased $0.9 million due to higher production volumes, partially offset by lower per unit log costs, primarily in the Lake States.

• The increase in freight costs primarily related to residual hauling costs that were previously the responsibility of the customer.

• Higher manufacturing costs were the result of higher production volumes and scheduled maintenance at our Warren, Arkansas mill, which was completed in conjunction with the installation of a capital project and resulted in 12 days of downtime.

• Inventory will fluctuate based on a combination of volume and fiber and manufacturing costs. With the shutdown at the Warren mill in the second quarter of 2016, we sold much of our lumber inventories at that mill while building inventories at our other mills. In the first half of 2015, lumber inventory levels were reduced as a result of downtime for two large capital projects.

Six months ended June 30, 2016 compared with six months ended June 30, 2015

Cost of goods sold fluctuated based on the following factors:

• Fiber costs decreased $3.1 million due to lower per unit log costs in most of our mills, partially offset by higher production volumes.

• The increase in freight, logging and hauling costs of $0.5 million relates to additional freight for residuals that were previously the responsibility of the customer.

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• Higher manufacturing costs were the result of higher production volumes, scheduled maintenance at our Warren mill which resulted in 12 days of downtime in the second quarter, and 11 days of downtime at our St. Maries, Idaho sawmill in the first quarter of 2016 due to log shortages resulting from an unseasonably warm winter. The first half of 2015 also included scheduled outages for capital projects. 

• Inventory will fluctuate based on a combination of volume and fiber and manufacturing costs. With the shutdown at the Warren mill in the second quarter of 2016, we sold much of our lumber inventories at that mill while building inventories at our other mills. In the first half of 2015, lumber inventory levels were reduced as a result of downtime for two large capital projects.

Real Estate Segment

	Quarters Ended June 30,						Six Months Ended June 30,
(Dollars in thousands)	2016			2015		% Change	2016			2015		% Change
Revenues	$	9,954		$	10,745	(7%)	$	15,520		$	13,856	12%
Cost of goods sold:
Basis of real estate sold		3,509			710	394%		5,754			1,181	387%
Other		718			841	(15%)		1,336			1,292	3%
		4,227			1,551	*		7,090			2,473	*
Selling, general and administrative    expenses		634			673	(6%)		1,262			1,263	0%
Sale of central Idaho timber and timberlands		48,522			—	*		48,522			—	*
Operating income (loss)	$	(43,429	)	$	8,521	*	$	(41,354	)	$	10,120	*

*  Percentage change not meaningful.

Three months ended June 30, 2016 compared with three months ended June 30, 2015

In the second quarter of 2016, we sold approximately 172,000 acres of timberlands located in central Idaho for $114 million, resulting in a loss of $48.5 million before tax.  The company purchased the property in 2007 and 2008 for the purpose of growing and harvesting timber and selling rural recreation parcels.  In the recession of 2008, the central Idaho rural recreational real estate market collapsed and has not fully recovered.  The sale freed up capital without having to wait for the rural recreation real estate market in central Idaho to recover.

Excluding the sale of central Idaho timberlands, during the second quarter of 2016 we sold an additional 1,390 acres, as compared with the same time last year, at a lower weighted average sales price. The average sale prices per acre was higher in the prior year largely due to the sale of two commercial real estate sites included in HBU and geographic mix.

	Quarters Ended June 30,
	2016				2015
	Acres Sold		Average Price/Acre		Acres Sold		Average Price/Acre
Higherandbetteruse(HBU)		3,348	$	2,263		514	$	11,467
Rural real estate		1,489	$	1,215		3,280	$	1,394
Non-strategic timberland		693	$	818		346	$	813
Central Idaho timberland		171,598	$	665		—	$	—
Total		177,128				4,140

Six months ended June 30, 2016 compared with six months ended June 30, 2015

Excluding the sale of central Idaho timberlands, in the first half of 2016 we sold an additional 2,710 acres, as compared with the same time last year, at a lower weighted average sales price. The average sale prices per acre was higher in the prior year largely due to the sale of two commercial real estate sites included in HBU and geographic mix.  

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	Six Months Ended June 30,
	2016		2015
	Acres Sold	Average Price/Acre	Acres Sold	Average Price/Acre
Higherandbetteruse(HBU)	4,436	$              2,226	757	$              8,937
Rural real estate	3,770	$              1,331	4,402	$              1,134
Non-strategic timberland	797	$                 785	1,134	$                 876
Central Idaho timberland	171,598	$                 665	—	$                   —
Total	180,601		6,293

Liquidity and Capital Resources

Overview

At June 30, 2016, our financial highlights included:

• cash and short-term investments of $65.4 million,

• credit agreement borrowing capacity of $248.8 million, and

• long-term debt of $581.2 million.

Net Cash from Operations

Net cash provided from operating activities was:

• $45.7 million in 2016 and

• $16.7 million in 2015.

Net cash from operations increased $29.0 million for the six months ended June 30, 2016, compared with the same period last year, primarily due to:

• Higher customer receipts of $6 million resulting from increased revenues in Resource, Wood Products and Real Estate;

• Lower cash operating costs of $18 million primarily due to lower inventories and per unit log costs; and

• A cash tax refund of $1.7 million in 2016 compared with cash taxes paid of $1.5 million in 2015.

Net Cash Flows from Investing Activities

Net cash provided from investing activities was $61.3 million for the six months ended June 30, 2016, compared with $6.7 million in 2015. Short-term investments increased $40.0 million in the first half of 2016 primarily due to the proceeds of $111.5 million from the sale of approximately 172,000 acres of timberlands located in central Idaho, compared with a decrease of $24.5 million in the first half of 2015 primarily due to lower log and lumber prices.

Capital spending for property, plant and equipment and timber reforestation and roads during the first half of 2016 was $9.2 million lower than the same period in 2015. During the first half of 2015, we completed two large capital projects at our lumber mills. Capital spending for property, plant and equipment and timber reforestation and roads is expected to be $19 million in 2016, compared with $32.7 million in 2015.

Net Cash Flows from Financing Activities

Net cash used in financing activities was $89.6 million and $19.2 million for the six months ended June 30, 2016 and 2015, respectively. Net cash used in financing activities in 2016 was primarily attributable to the $77.6 million repayment of borrowings (see Credit and Term Loan Agreements below), $30.5 million of dividends to stockholders and $6.0 million in the repurchase of common stock, partially offset by $27.5 million in proceeds from the issuance of long-term debt. In 2015, net cash used in financing activities was primarily attributable to dividend payments to stockholders of $30.5 million, partially offset by a $15.0 million draw on our revolving line of credit.

22

Credit and Term Loan Agreements

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. The new debt matures in 2026 and carries a rate equal to 3-month LIBOR plus 2.15% per annum. At June 30, 2016, our term loan debt includes nine tranches totaling $349.5 million.

In June 2016, we repaid $42.6 million of revenue bonds.  The bonds carried a rate of 5.9% and had a maturity date in 2026.

During the third quarter of 2016, we plan to refinance $65.7 million of revenue bonds, which carry a rate of 6.0% and mature in 2024.

As of June 30, 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 June 30, 2016:

	CovenantRequirement			Actuals at June 30, 2016
Interest coverage ratio	≥	3.00 to 1.00		7.18
Leverage ratio	≤		40%		26%
Allowable acres that may be sold1			480,000

¹ Actual acres sold as of June 30, 2016, were 202,811 and 16,059 under the credit and term loan agreements, respectively.  The term loan agreement allows for an exclusion of up to 250,000 acres sold in the fiscal years ending December 31, 2016 and December 31, 2017.

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 June 30, 2016, our cumulative FAD was $187.8 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 $111.5 million.

As a result of 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, 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 six months ended June 30, 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.

23

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 table below provides information about our outstanding long-term debt, weighted-average interest rates and interest rate swaps as of June 30, 2016. For debt obligations, the table presents principal cash flows and related weighted-average interest rates by expected maturity dates. For interest rate swaps, the table presents notional amounts and weighted-average interest rates by expected (contractual) maturity dates. Notional amounts are used to calculate the contractual payments to be exchanged under the contract. Weighted-average variable rates are based on implied forward rates in the yield curve.

	EXPECTED MATURITY DATE
(Dollars in thousands)	2016		2017			2018			2019			2020			THEREAFTER			TOTAL			FAIR VALUE
Variable rate debt:
Principal due	$	—	$	—		$	—		$	40,000		$	40,000		$	67,500		$	147,500		$	147,500
Average interest rate										2.65	%		3.00	%		3.33	%		3.06	%
Fixed rate debt:
Principal due	$	—	$	11,000		$	14,250		$	150,000		$	6,000		$	258,735		$	439,985		$	459,094
Average interest rate				5.64	%		8.88	%		7.50	%		3.70	%		4.96	%		5.95	%
Interest rate swaps:
Fixed to variable	$	—	$	5,000		$	14,250		$	50,000		$	—		$	—		$	69,250		$	69,250
Average pay rate				7.07	%		7.02	%		6.84	%								6.89	%
Average receive rate				8.88	%		8.88	%		7.50	%								7.88	%
Variable to fixed	$	—	$	—		$	—		$	—		$	—		$	27,500		$	27,500		$	27,500
Average pay rate																1.73	%		1.73	%
Average receive rate																1.52	%		1.52	%

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 June 30, 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 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 June 30, 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.

24

Internal Control over Financial Reporting

In the six months ended June 30, 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 – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Other than the environmental proceeding described in Note 12: 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

ISSUER PURCHASES OF EQUITY SECURITIES

On April 26, 2016, the company announced that its Board of Directors had authorized management to repurchase up to $60 million of common stock over a period of 24 months (the “Repurchase Plan”).

Common Share Purchases	Shares Purchased		Average Price Paid Per Share		Shares Purchased as Part of a Publicly Announced Plan		Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plan
April (4/28/16 - 4/30/16)		94,625	$	35.46		94,625	$	56,644,779
May (5/1/16 - 5/31/16)		75,000	$	34.61		75,000	$	54,048,978
June (6/1/16 - 6/30/16)		—	$	—		—	$	54,048,978
Total Shares Purchased		169,625	$	35.08		169,625

During the second quarter of 2016, we repurchased 169,625 shares of common stock for $5.96 million (including transaction costs).  Transaction costs are not counted against authorized funds under the Repurchase Plan.  All purchases were made in open-market transactions.    

We record share repurchases upon trade date, as opposed to the settlement date when cash is disbursed.  We record a liability to account for repurchases that have not been settled.  There were no unsettled repurchases as of June 30, 2016.

ITEM 6. EXHIBITS

Exhibits are listed in the Exhibit Index.

25

SIGNATURE

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:	July 26, 2016

26

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.
(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 and six months ended June 30, 2016, filed on July 26, 2016, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Statements of Income for the quarter and six months ended June 30, 2016 and 2015, (ii) the Consolidated Statements of Comprehensive Income for the quarter and six months ended June 30, 2016 and 2015, (iii) the Condensed Consolidated Balance Sheets at June 30, 2016 and December 31, 2015, (iv) the Condensed Consolidated Statements of Cash Flows for the quarter and six months ended June 30, 2016 and 2015, and (v) the Notes to Condensed Consolidated Financial Statements.

* Incorporated by reference

27

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: July 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: July 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 June 30, 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

July 26, 2016

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 June 30, 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

July 26, 2016

XML

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Jul. 25, 2016
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q2
Entity Registrant Name	POTLATCH CORP
Trading Symbol	PCH
Entity Central Index Key	0001338749
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		40,518,533

XML

Consolidated Statements of Income (Loss) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Income Statement [Abstract]
Revenues	$ 141,495	$ 128,747	$ 269,391	$ 262,872
Costs and expenses:
Cost of goods sold	113,377	109,441	223,192	217,213
Selling, general and administrative expenses	13,824	11,995	26,833	24,321
Loss on sale of central Idaho timber and timberlands	48,522		48,522
Total costs and expenses	175,723	121,436	298,547	241,534
Operating income (loss)	(34,228)	7,311	(29,156)	21,338
Interest expense, net	(8,206)	(8,016)	(14,231)	(16,085)
Income (loss) before income taxes	(42,434)	(705)	(43,387)	5,253
Income tax benefit	11,196	1,416	12,306	1,114
Net income (loss)	$ (31,238)	$ 711	$ (31,081)	$ 6,367
Net income (loss) per share:
Basic (in dollars per share)	$ (0.77)	$ 0.02	$ (0.76)	$ 0.16
Diluted (in dollars per share)	(0.77)	0.02	(0.76)	0.16
Distributions per share (in dollars per share)	$ 0.375	$ 0.375	$ 0.75	$ 0.75
Weighted-average shares outstanding (in thousands):
Basic (in shares)	40,784,129	40,842,672	40,836,503	40,822,326
Diluted (in shares)	40,784,129	40,963,488	40,836,503	40,932,852

XML

Consolidated Statement of Comprehensive Income Loss) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Statement Of Income And Comprehensive Income [Abstract]
Net income (loss)		$ (31,238)	$ 711	$ (31,081)	$ 6,367
Other comprehensive income, net of tax:
Amortization of prior service credit included in net periodic cost, net of tax of $(815), $(848), $(1,630) and $(1,697)	[1]	(1,274)	(1,328)	(2,549)	(2,656)
Amortization of actuarial loss included in net periodic cost, net of tax of $1,826, $1,900, $3,521 and $3,837	[1]	2,857	2,974	5,507	6,003
Cash flow hedge, net of tax of $(264), $-, $(369) and $-		(413)	0	(577)	0
Other comprehensive income, net of tax		1,170	1,646	2,381	3,347
Comprehensive income (loss)		$ (30,068)	$ 2,357	$ (28,700)	$ 9,714

[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 (Loss) (Parentheticals) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Statement Of Income And Comprehensive Income [Abstract]
Amortization of prior service credit included in net periodic cost, tax effect	$ (815)	$ (848)	$ (1,630)	$ (1,697)
Amortization of actuarial loss included in net periodic cost, tax effect	1,826	1,900	3,521	3,837
Cash flow hedge, tax effect	$ (264)	$ 0	$ (369)	$ 0

XML

Consolidated Condensed Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Current assets:
Cash	$ 25,301	$ 7,886
Short-term investments	40,077	39
Receivables, net	22,531	13,420
Inventories	30,045	35,162
Other assets	17,162	14,246
Total current assets	135,116	70,753
Property, plant and equipment, net	74,558	75,285
Timber and timberlands, net	643,814	816,599
Deferred tax assets, net	51,569	46,600
Other assets	9,088	7,375
Total assets	914,145	1,016,612
Current liabilities:
Revolving line of credit borrowings		30,000
Current portion of long-term debt	5,082	5,007
Accounts payable and accrued liabilities	48,290	39,740
Current portion of pension and other postretirement employee benefits	5,973	5,973
Total current liabilities	59,345	80,720
Long-term debt	581,205	598,874
Pension and other postretirement employee benefits	119,590	119,369
Other long-term obligations	13,462	13,913
Total liabilities	773,602	812,876
Commitments and contingencies
Total liabilities and stockholders' equity	914,145	1,016,612
Common stock, $1 par value	40,519	40,681
Additional paid-in capital	352,497	350,541
Accumulated deficit	(140,351)	(72,983)
Accumulated other comprehensive loss	(112,122)	(114,503)
Total stockholders’ equity	$ 140,543	$ 203,736

XML

Consolidated Condensed Balance Sheets (Parentheticals) - $ / shares	Jun. 30, 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	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$ (31,081)	$ 6,367
Adjustments to reconcile net income (loss) to net cash from operating activities:
Depreciation, depletion and amortization	16,474	15,597
Basis of real estate sold	5,421	1,008
Change in deferred taxes	(6,784)	(1,707)
Employee benefit plans	6,416	3,166
Equity-based compensation expense	2,176	2,259
Loss on sale of central Idaho timber and timberlands	48,522
Other, net	(1,280)	(5,496)
Change in working capital and operating-related activities, net	5,797	(4,538)
Net cash from operating activities	45,661	16,656
CASH FLOWS FROM INVESTING ACTIVITIES
Change in short-term investments	(40,038)	24,537
Property, plant and equipment	(3,488)	(12,248)
Timberlands reforestation and roads	(5,544)	(6,004)
Acquisition of timber and timberlands	(1,161)
Net proceeds from sale of central Idaho timber and timberlands	111,460
Other, net	109	433
Net cash from investing activities	61,338	6,718
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends to common stockholders	(30,453)	(30,507)
Repayment of revolving line of credit borrowings	(30,000)
Proceeds from revolving line of credit borrowings		15,000
Repayment of long-term debt	(47,600)
Proceeds from issuance of long-term debt	27,500
Repurchase of common stock	(5,956)
Change in book overdrafts	(2,836)	(2,246)
Employee tax withholdings on vested performance share awards	(102)	(1,445)
Other, net	(137)	(37)
Net cash from financing activities	(89,584)	(19,235)
Increase in cash	17,415	4,139
Cash at beginning of period	7,886	4,644
Cash at end of period	25,301	8,783
Cash paid (received) during the period for:
Interest, net of amounts capitalized	13,791	13,702
Income taxes, net	$ (1,740)	$ 1,512

XML

Basis of Presentation

6 Months Ended

Jun. 30, 2016

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Basis of Presentation

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.

XML

Recent Accounting Pronouncements

6 Months Ended

Jun. 30, 2016

New Accounting Pronouncements And Changes In Accounting Principles [Abstract]

Recent Accounting Pronouncements

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, diluted shares outstanding, 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.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which eliminates the probable recognition threshold for credit impairments. The new guidance broadens the information that an entity must consider in developing its expected credit loss estimate for assets measured either collectively or individually to include forecasted information, as well as past events and current conditions. There is no specified method for measuring expected credit losses, and an entity is allowed to apply methods that reasonably reflect its expectations of the credit loss estimate. This ASU is effective for us on January 1, 2020. Our credit loss estimates are reflected in our allowance for doubtful accounts on accounts receivables, which had a balance of $0.4 million at December 31, 2015. The adoption of this guidance is not expected to have a significant effect on our consolidated financial statements.

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Earnings per Share

6 Months Ended

Jun. 30, 2016

Earnings Per Share Basic Other Disclosures [Abstract]

Earnings per Share

NOTE 3. EARNINGS PER SHARE

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

	Quarters Ended June 30,					Six Months Ended June 30,
(Dollars in thousands, except per share amounts)	2016			2015		2016			2015
Net income (loss)	$	(31,238	)	$	711	$	(31,081	)	$	6,367
Basic weighted-average shares outstanding		40,784,129			40,842,672		40,836,503			40,822,326
Incremental shares due to:
Performance shares		—			100,915		—			92,130
Restricted stock units		—			19,901		—			18,396
Diluted weighted-average shares outstanding		40,784,129			40,963,488		40,836,503			40,932,852
Basic net income (loss) per share	$	(0.77	)	$	0.02	$	(0.76	)	$	0.16
Diluted net income (loss) per share	$	(0.77	)	$	0.02	$	(0.76	)	$	0.16

No dilutive potential shares were included in the computation of diluted net income (loss) per share for the three and six months ended 2016 due to the net loss. For the three months ended June 30, 2016 and 2015, there were 107,769 and 1,000 stock-based awards that were excluded from the calculation of diluted earnings per share because they were anti-dilutive. For the six months ended June 30, 2016 and 2015, there were 67,846 and 80,726 anti-dilutive stock-based awards. Anti-dilutive stock-based awards could be dilutive in future periods.

We repurchased 169,625 shares of common stock during the quarter at an average price of $35.08 per share totaling $6.0 million. The shares were retired and the excess repurchase price over par was allocated to accumulated deficit.

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Certain Balance Sheet Components

6 Months Ended

Jun. 30, 2016

Balance Sheet Related Disclosures [Abstract]

Supplemental Balance Sheet Disclosures

NOTE 4. CERTAIN BALANCE SHEET COMPONENTS

INVENTORIES

(Dollars in thousands)	June 30, 2016		December 31, 2015
Inventories:
Logs	$	4,882	$	9,920
Lumber, plywood and veneer		16,533		16,932
Materials and supplies		8,630		8,310
Total inventories	$	30,045	$	35,162

PROPERTY, PLANT AND EQUIPMENT

(Dollars in thousands)	June 30, 2016			December 31, 2015
Property, plant and equipment	$	250,502		$	248,750
Less: accumulated depreciation		(175,944	)		(173,465	)
Total property, plant and equipment, net	$	74,558		$	75,285

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Loss on Sale of Central Idaho Timber and Timberlands

6 Months Ended

Jun. 30, 2016

Gain Loss On Sale Of Property [Abstract]

Loss on Sale of Central Idaho Timber and Timberlands

NOTE 5. LOSS ON SALE OF CENTRAL IDAHO TIMBER AND TIMBERLANDS

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.  In the recession of 2008 the central Idaho rural recreational real estate market collapsed and has not fully recovered. The sale frees up capital without having to wait for the rural recreation real estate market in central Idaho to recover. We recorded a loss of $48.5 million before 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 end of the first quarter, 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, at March 31, 2016 management concluded that the asset group was not impaired and recorded the loss on sale in the second quarter of 2016.  

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Debt

6 Months Ended

Jun. 30, 2016

Debt Disclosure [Abstract]

Debt

NOTE 6. 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. The new debt matures in 2026 and carries a rate equal to 3-month LIBOR plus 2.15% per annum.    

In June 2016, we repaid $42.6 million of revenue bonds.  The bonds carried a rate of 5.9% and had a maturity date in 2026.

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Derivative Instruments

6 Months Ended

Jun. 30, 2016

Derivative Instrument Detail [Abstract]

Derivative Instruments

NOTE 7. 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 June 30, 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:

		Asset Derivatives					Liability Derivatives
(Dollars in thousands)	Location	June 30, 2016		December 31, 2015		Location	June 30, 2016		December 31, 2015
Derivatives designated as    hedging instruments:
Interest rate contracts	Other assets, current	$	82	$	7	Long-term debt	$	946	$	—
Interest rate contracts	Other assets, non-current		1,610		574
Total derivatives designated    as hedging instruments		$	1,692	$	581		$	946	$	—

The following table details the effect of derivatives on our Consolidated Statements of Income:

		Quarters Ended June 30,					Six Months Ended June 30,
(Dollars in thousands)	Location	2016			2015		2016			2015
Derivatives designated in fair value    hedging relationships:
Realized gain on interest rate contracts1	Interest expense	$	214		$	409	$	456		$	788
Derivatives designated in cash flow    hedging relationships:
Gain (loss) recognized on derivative,    net of tax of $(264) and $(369) (effective    portion)	Other Comprehensive Income	$	(490	)	$	—	$	(654	)	$	—
Gain (loss) reclassified into    income (effective portion)	Interest expense		(77	)		—		(77	)		—
Net effect on other comprehensive income (loss)		$	(413	)	$	—	$	(577	)	$	—

¹ Realized gain on hedging instruments consists of net cash settlements and interest accruals on the fair value 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.

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Financial Instruments

6 Months Ended

Jun. 30, 2016

Derivative Instrument Detail [Abstract]

Financial Instruments

NOTE 8. FINANCIAL INSTRUMENTS

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

	June 30, 2016				December 31, 2015
(Dollars in thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Cash and short-term investments (Level 1)	$	65,378	$	65,378	$	7,925	$	7,925
Asset related to interest rate swaps (Level 2)	$	1,692	$	1,692	$	581	$	581
Liability related to interest rate swaps (Level 2)	$	946	$	946	$	—	$	—
Long-term debt, including fair value adjustments related to    hedging instruments (Level 2)	$	586,287	$	609,232	$	603,881	$	626,021
Company owned life insurance asset (COLI) (Level 3)	$	1,683	$	1,683	$	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.

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Pension and Other Postretirement Employee Benefits

6 Months Ended

Jun. 30, 2016

General Discussion Of Pension And Other Postretirement Benefits [Abstract]

Pension and Other Postretirement Employee Benefits

NOTE 9. PENSION AND OTHER POSTRETIREMENT EMPLOYEE BENEFITS

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

	Quarters Ended June 30,
	Pension						OPEB
(Dollars in thousands)	2016			2015			2016			2015
Service cost	$	1,747		$	1,531		$	2		$	4
Interest cost		4,258			4,259			355			345
Expected return on plan assets		(4,734	)		(5,192	)		—			—
Amortization of prior service cost (credit)		129			152			(2,218	)		(2,328	)
Amortization of actuarial loss		4,253			4,408			430			466
Net periodic cost (benefit)	$	5,653		$	5,158		$	(1,431	)	$	(1,513	)
	Six Months Ended June 30,
	Pension						OPEB
(Dollars in thousands)	2016			2015			2016			2015
Service cost	$	3,254		$	3,061		$	7		$	11
Interest cost		8,510			8,518			710			728
Expected return on plan assets		(9,500	)		(10,383	)		—			—
Amortization of prior service cost (credit)		259			303			(4,438	)		(4,656	)
Amortization of actuarial loss		8,170			8,816			858			1,024
Net periodic cost (benefit)	$	10,693		$	10,315		$	(2,863	)	$	(2,893	)

During the six months ended June 30, 2016 and 2015, we paid non-qualified supplemental pension benefits of $0.7 million and $0.9 million.

During the six months ended June 30, 2016 and 2015, we paid OPEB benefits of $1.9 million and $1.8 million.

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

	Quarter ended June 30, 2016
(Dollars in thousands)	Pension			OPEB			Total
Balance at March 31	$	125,776		$	(12,648	)	$	113,128
Amortization of defined benefit items, net of tax:1
Prior service credit (cost)		(79	)		1,353			1,274
Actuarial loss		(2,594	)		(263	)		(2,857	)
Total reclassification for the period		(2,673	)		1,090			(1,583	)
Balance at June 30	$	123,103		$	(11,558	)	$	111,545
	Quarter ended June 30, 2015
(Dollars in thousands)	Pension			OPEB			Total
Balance at March 31	$	131,480		$	(14,789	)	$	116,691
Amortization of defined benefit items, net of tax:1
Prior service credit (cost)		(92	)		1,420			1,328
Actuarial loss		(2,689	)		(285	)		(2,974	)
Total reclassification for the period		(2,781	)		1,135			(1,646	)
Balance at June 30	$	128,699		$	(13,654	)	$	115,045

	Six Months Ended June 30, 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)		(158	)		2,707			2,549
Actuarial loss		(4,983	)		(524	)		(5,507	)
Total reclassification for the period		(5,141	)		2,183			(2,958	)
Balance at June 30	$	123,103		$	(11,558	)	$	111,545
	Six Months Ended June 30, 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)		(184	)		2,840			2,656
Actuarial loss		(5,378	)		(625	)		(6,003	)
Total reclassification for the period		(5,562	)		2,215			(3,347	)
Balance at June 30	$	128,699		$	(13,654	)	$	115,045

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

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Equity-Based Compensation

6 Months Ended

Jun. 30, 2016

Share Based Compensation [Abstract]

Equity-Based Compensation

NOTE 10. EQUITY-BASED COMPENSATION

As of June 30, 2016, we had two stock incentive plans under which performance shares, restricted stock units (RSUs) and deferred compensation stock equivalent units 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 June 30, 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 equity-based compensation expense and the related income tax benefit:

	Quarters Ended June 30,				Six Months Ended June 30,
(Dollars in thousands)	2016		2015		2016		2015
Employee equity-based compensation expense:
Performance shares	$	951	$	950	$	1,705	$	1,822
Restricted stock units		271		232		471		437
Total employee equity-based compensation expense	$	1,222	$	1,182	$	2,176	$	2,259
Deferred compensation stock equivalent units expense	$	220	$	47	$	420	$	166
Total tax benefit recognized for share-based expense	$	89	$	78	$	155	$	152

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:

	Six Months Ended June 30,
	2016			2015
Stock price as of valuation date	$	25.92		$	40.00
Risk-free rate		0.88	%		1.07	%
Expected volatility		23.82	%		21.09	%
Expected dividends		5.79	%		3.75	%
Expected term (years)		3.00			3.00

The following table summarizes outstanding performance share awards as of June 30, 2016, and changes during the six months ended June 30, 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
Unvested shares outstanding at June 30		286,518	$	36.64	$	9,770

As of June 30, 2016, there was $5.1 million of unrecognized compensation cost related to unvested performance share awards, which is expected to be recognized over a weighted-average period of 1.7 years.

RESTRICTED STOCK UNITS

The following table summarizes outstanding RSU awards as of June 30, 2016, and changes during the six months ended June 30, 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		43,320		$	26.08
Vested		(2,000	)	$	39.12
Unvested shares outstanding at June 30		85,851		$	33.03	$	2,928

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 six months ended June 30, 2016 was $0.1 million. As of June 30, 2016, there was $1.6 million of total unrecognized compensation cost related to unvested RSU awards, which is expected to be recognized over a weighted-average period of 1.7 years.

DEFERRED COMPENSATION STOCK EQUIVALENT UNITS

A long-term incentive award is granted annually to our directors, and payable upon a director's separation from service. Directors may also elect to defer their annual retainers, payable in the form of stock. All stock unit equivalent accounts are credited with dividend equivalents. As of June 30, 2016, there were 148,248 shares outstanding that will be distributed in the future to directors as common stock.  

Issuance of restricted stock units awarded to certain officers and select employees may also be deferred.  All stock unit equivalent accounts are credited with dividend equivalents.  As of June 30, 2016, there were 65,357 RSUs which had vested, but issuance of the related stock had been deferred.

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Income Taxes

6 Months Ended

Jun. 30, 2016

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 11. 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.

As a result of the loss on sale of central Idaho timberlands, in the second quarter of 2016 $5.5 million was reclassed from a net operating loss carryforward within deferred taxes to receivables, net.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2016

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

NOTE 12. 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 $9.6 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 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. In June 2016, the parties agreed to extend the tolling agreement through October 6, 2016 and settlement negotiations continue. We accrued $0.2 million for this matter in the first quarter of 2016 and an additional $0.8 million for this matter in the second quarter of 2016. 

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Segment Information

6 Months Ended

Jun. 30, 2016

Segment Reporting Information Additional Information [Abstract]

Segment Information

NOTE 13. SEGMENT INFORMATION

The following table summarizes information by business segment:

	Quarters Ended June 30,						Six Months Ended June 30,
(Dollars in thousands)	2016			2015			2016			2015
Revenues:
Resource	$	54,826		$	44,111		$	103,536		$	98,066
Wood Products		90,924			84,191			174,162			173,424
Real Estate		9,954			10,745			15,520			13,856
		155,704			139,047			293,218			285,346
Eliminationofintersegmentrevenues-Resource		(14,209	)		(10,300	)		(23,827	)		(22,474	)
Total consolidated revenues	$	141,495		$	128,747		$	269,391		$	262,872
Operating income (loss):
Resource	$	15,672		$	8,797		$	25,879		$	23,775
Wood Products		4,695			(1,953	)		5,651			1,547
Real Estate1		(43,429	)		8,521			(41,354	)		10,120
Eliminations and adjustments		(969	)		539			496			3,514
		(24,031	)		15,904			(9,328	)		38,956
Corporate		(10,197	)		(8,593	)		(19,828	)		(17,618	)
Operating income (loss)		(34,228	)		7,311			(29,156	)		21,338
Interest expense, net		(8,206	)		(8,016	)		(14,231	)		(16,085	)
Income (loss) before income taxes	$	(42,434	)	$	(705	)	$	(43,387	)	$	5,253
Depreciation, depletion and amortization:
Resource	$	5,387		$	4,797		$	11,515		$	11,051
Wood Products		1,800			1,661			3,701			3,237
Real Estate		1			15			3			30
		7,188			6,473			15,219			14,318
Corporate		213			251			421			535
Bond discounts and deferred loan fees		468			369			834			744
Total depreciation, depletion and amortization	$	7,869		$	7,093		$	16,474		$	15,597
Basis of real estate sold:
Real Estate	$	3,509		$	710		$	5,754		$	1,181
Eliminations and adjustments		(122	)		(110	)		(333	)		(173	)
Total basis of real estate sold	$	3,387		$	600		$	5,421		$	1,008

¹ In the second quarter of 2016, we sold approximately 172,000 acres of timberlands located in central Idaho for $114 million at a loss of $48.5 million before taxes. 

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Earnings per Share (Tables)

6 Months Ended

Jun. 30, 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:

	Quarters Ended June 30,					Six Months Ended June 30,
(Dollars in thousands, except per share amounts)	2016			2015		2016			2015
Net income (loss)	$	(31,238	)	$	711	$	(31,081	)	$	6,367
Basic weighted-average shares outstanding		40,784,129			40,842,672		40,836,503			40,822,326
Incremental shares due to:
Performance shares		—			100,915		—			92,130
Restricted stock units		—			19,901		—			18,396
Diluted weighted-average shares outstanding		40,784,129			40,963,488		40,836,503			40,932,852
Basic net income (loss) per share	$	(0.77	)	$	0.02	$	(0.76	)	$	0.16
Diluted net income (loss) per share	$	(0.77	)	$	0.02	$	(0.76	)	$	0.16

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Certain Balance Sheet Components (Tables)

6 Months Ended

Jun. 30, 2016

Balance Sheet Related Disclosures [Abstract]

Schedule of Inventory

(Dollars in thousands)	June 30, 2016		December 31, 2015
Inventories:
Logs	$	4,882	$	9,920
Lumber, plywood and veneer		16,533		16,932
Materials and supplies		8,630		8,310
Total inventories	$	30,045	$	35,162

Property, Plant and Equipment

(Dollars in thousands)	June 30, 2016			December 31, 2015
Property, plant and equipment	$	250,502		$	248,750
Less: accumulated depreciation		(175,944	)		(173,465	)
Total property, plant and equipment, net	$	74,558		$	75,285

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Derivative Instruments (Tables)

6 Months Ended

Jun. 30, 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:

		Asset Derivatives					Liability Derivatives
(Dollars in thousands)	Location	June 30, 2016		December 31, 2015		Location	June 30, 2016		December 31, 2015
Derivatives designated as    hedging instruments:
Interest rate contracts	Other assets, current	$	82	$	7	Long-term debt	$	946	$	—
Interest rate contracts	Other assets, non-current		1,610		574
Total derivatives designated    as hedging instruments		$	1,692	$	581		$	946	$	—

Effect of Derivatives on Consolidated Statements of Income

The following table details the effect of derivatives on our Consolidated Statements of Income:

		Quarters Ended June 30,					Six Months Ended June 30,
(Dollars in thousands)	Location	2016			2015		2016			2015
Derivatives designated in fair value    hedging relationships:
Realized gain on interest rate contracts1	Interest expense	$	214		$	409	$	456		$	788
Derivatives designated in cash flow    hedging relationships:
Gain (loss) recognized on derivative,    net of tax of $(264) and $(369) (effective    portion)	Other Comprehensive Income	$	(490	)	$	—	$	(654	)	$	—
Gain (loss) reclassified into    income (effective portion)	Interest expense		(77	)		—		(77	)		—
Net effect on other comprehensive income (loss)		$	(413	)	$	—	$	(577	)	$	—

¹ Realized gain on hedging instruments consists of net cash settlements and interest accruals on the fair value 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.

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Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2016

Derivative Instrument Detail [Abstract]

Fair Value, by Balance Sheet Grouping

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

	June 30, 2016				December 31, 2015
(Dollars in thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Cash and short-term investments (Level 1)	$	65,378	$	65,378	$	7,925	$	7,925
Asset related to interest rate swaps (Level 2)	$	1,692	$	1,692	$	581	$	581
Liability related to interest rate swaps (Level 2)	$	946	$	946	$	—	$	—
Long-term debt, including fair value adjustments related to    hedging instruments (Level 2)	$	586,287	$	609,232	$	603,881	$	626,021
Company owned life insurance asset (COLI) (Level 3)	$	1,683	$	1,683	$	687	$	687

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Pension and Other Postretirement Employee Benefits (Tables)

6 Months Ended

Jun. 30, 2016

General Discussion Of Pension And Other Postretirement Benefits [Abstract]

Components of Net Periodic Cost (Benefit)

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

	Quarters Ended June 30,
	Pension						OPEB
(Dollars in thousands)	2016			2015			2016			2015
Service cost	$	1,747		$	1,531		$	2		$	4
Interest cost		4,258			4,259			355			345
Expected return on plan assets		(4,734	)		(5,192	)		—			—
Amortization of prior service cost (credit)		129			152			(2,218	)		(2,328	)
Amortization of actuarial loss		4,253			4,408			430			466
Net periodic cost (benefit)	$	5,653		$	5,158		$	(1,431	)	$	(1,513	)
	Six Months Ended June 30,
	Pension						OPEB
(Dollars in thousands)	2016			2015			2016			2015
Service cost	$	3,254		$	3,061		$	7		$	11
Interest cost		8,510			8,518			710			728
Expected return on plan assets		(9,500	)		(10,383	)		—			—
Amortization of prior service cost (credit)		259			303			(4,438	)		(4,656	)
Amortization of actuarial loss		8,170			8,816			858			1,024
Net periodic cost (benefit)	$	10,693		$	10,315		$	(2,863	)	$	(2,893	)

Schedule of Accumulated Other Comprehensive Loss

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

	Quarter ended June 30, 2016
(Dollars in thousands)	Pension			OPEB			Total
Balance at March 31	$	125,776		$	(12,648	)	$	113,128
Amortization of defined benefit items, net of tax:1
Prior service credit (cost)		(79	)		1,353			1,274
Actuarial loss		(2,594	)		(263	)		(2,857	)
Total reclassification for the period		(2,673	)		1,090			(1,583	)
Balance at June 30	$	123,103		$	(11,558	)	$	111,545
	Quarter ended June 30, 2015
(Dollars in thousands)	Pension			OPEB			Total
Balance at March 31	$	131,480		$	(14,789	)	$	116,691
Amortization of defined benefit items, net of tax:1
Prior service credit (cost)		(92	)		1,420			1,328
Actuarial loss		(2,689	)		(285	)		(2,974	)
Total reclassification for the period		(2,781	)		1,135			(1,646	)
Balance at June 30	$	128,699		$	(13,654	)	$	115,045

	Six Months Ended June 30, 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)		(158	)		2,707			2,549
Actuarial loss		(4,983	)		(524	)		(5,507	)
Total reclassification for the period		(5,141	)		2,183			(2,958	)
Balance at June 30	$	123,103		$	(11,558	)	$	111,545
	Six Months Ended June 30, 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)		(184	)		2,840			2,656
Actuarial loss		(5,378	)		(625	)		(6,003	)
Total reclassification for the period		(5,562	)		2,215			(3,347	)
Balance at June 30	$	128,699		$	(13,654	)	$	115,045

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

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Equity-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2016

Share Based Compensation [Abstract]

Details of Equity-Based Compensation Expense

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

	Quarters Ended June 30,				Six Months Ended June 30,
(Dollars in thousands)	2016		2015		2016		2015
Employee equity-based compensation expense:
Performance shares	$	951	$	950	$	1,705	$	1,822
Restricted stock units		271		232		471		437
Total employee equity-based compensation expense	$	1,222	$	1,182	$	2,176	$	2,259
Deferred compensation stock equivalent units expense	$	220	$	47	$	420	$	166
Total tax benefit recognized for share-based expense	$	89	$	78	$	155	$	152

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:

	Six Months Ended June 30,
	2016			2015
Stock price as of valuation date	$	25.92		$	40.00
Risk-free rate		0.88	%		1.07	%
Expected volatility		23.82	%		21.09	%
Expected dividends		5.79	%		3.75	%
Expected term (years)		3.00			3.00

Summary of Outstanding Performance Share Awards

The following table summarizes outstanding performance share awards as of June 30, 2016, and changes during the six months ended June 30, 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
Unvested shares outstanding at June 30		286,518	$	36.64	$	9,770

Summary of Outstanding RSU Awards

The following table summarizes outstanding RSU awards as of June 30, 2016, and changes during the six months ended June 30, 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		43,320		$	26.08
Vested		(2,000	)	$	39.12
Unvested shares outstanding at June 30		85,851		$	33.03	$	2,928

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2016

Segment Reporting Information Additional Information [Abstract]

Summary of Information by Business Segment

The following table summarizes information by business segment:

	Quarters Ended June 30,						Six Months Ended June 30,
(Dollars in thousands)	2016			2015			2016			2015
Revenues:
Resource	$	54,826		$	44,111		$	103,536		$	98,066
Wood Products		90,924			84,191			174,162			173,424
Real Estate		9,954			10,745			15,520			13,856
		155,704			139,047			293,218			285,346
Eliminationofintersegmentrevenues-Resource		(14,209	)		(10,300	)		(23,827	)		(22,474	)
Total consolidated revenues	$	141,495		$	128,747		$	269,391		$	262,872
Operating income (loss):
Resource	$	15,672		$	8,797		$	25,879		$	23,775
Wood Products		4,695			(1,953	)		5,651			1,547
Real Estate1		(43,429	)		8,521			(41,354	)		10,120
Eliminations and adjustments		(969	)		539			496			3,514
		(24,031	)		15,904			(9,328	)		38,956
Corporate		(10,197	)		(8,593	)		(19,828	)		(17,618	)
Operating income (loss)		(34,228	)		7,311			(29,156	)		21,338
Interest expense, net		(8,206	)		(8,016	)		(14,231	)		(16,085	)
Income (loss) before income taxes	$	(42,434	)	$	(705	)	$	(43,387	)	$	5,253
Depreciation, depletion and amortization:
Resource	$	5,387		$	4,797		$	11,515		$	11,051
Wood Products		1,800			1,661			3,701			3,237
Real Estate		1			15			3			30
		7,188			6,473			15,219			14,318
Corporate		213			251			421			535
Bond discounts and deferred loan fees		468			369			834			744
Total depreciation, depletion and amortization	$	7,869		$	7,093		$	16,474		$	15,597
Basis of real estate sold:
Real Estate	$	3,509		$	710		$	5,754		$	1,181
Eliminations and adjustments		(122	)		(110	)		(333	)		(173	)
Total basis of real estate sold	$	3,387		$	600		$	5,421		$	1,008

¹ In the second quarter of 2016, we sold approximately 172,000 acres of timberlands located in central Idaho for $114 million at a loss of $48.5 million before taxes. 

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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
Allowance for doubtful accounts on accounts receivables	$ 0.4

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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		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Earnings per Share [Line Items]
Net income (loss)	$ (31,238)	$ 711	$ (31,081)	$ 6,367
Basic weighted-average shares outstanding	40,784,129	40,842,672	40,836,503	40,822,326
Diluted weighted-average shares outstanding	40,784,129	40,963,488	40,836,503	40,932,852
Basic net income (loss) per share	$ (0.77)	$ 0.02	$ (0.76)	$ 0.16
Diluted net income (loss) per share	$ (0.77)	$ 0.02	$ (0.76)	$ 0.16
Performance shares [Member]
Earnings per Share [Line Items]
Incremental shares		100,915		92,130
Restricted stock units [Member]
Earnings per Share [Line Items]
Incremental shares		19,901		18,396

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Earnings per Share (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Earnings per Share [Line Items]
Total anti-dilutive shares excluded from the calculation (in shares)	107,769	1,000	67,846	80,726
Number of dilutive potential shares included in computation of diluted net income (loss) per share	0		0
Common Stock [Member]
Earnings per Share [Line Items]
Common stock repurchased and retired, shares	169,625
Common stock repurchased and retired, average price per share	$ 35.08
Common stock repurchased and retired, value	$ 6.0

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Certain Balance Sheet Components (Inventories) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Inventory Disclosure [Abstract]
Logs	$ 4,882	$ 9,920
Lumber, plywood and veneer	16,533	16,932
Materials and supplies	8,630	8,310
Inventories, Total	$ 30,045	$ 35,162

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Certain Balance Sheet Components (Property, Plant and Equipment) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Property Plant And Equipment [Abstract]
Property, plant and equipment	$ 250,502	$ 248,750
Less: accumulated depreciation	(175,944)	(173,465)
Property, plant and equipment, net	$ 74,558	$ 75,285

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Loss on Sale of Central Idaho Timber and Timberlands (Details) $ in Millions		3 Months Ended
	Apr. 21, 2016 USD ($) a	Jun. 30, 2016 USD ($)	Mar. 31, 2016
Timber And Timberlands [Line Items]
Acres sold through timberland sale | a	172,000
Land Sales	$ 114.0
Management's Belief that the Likelihood that a Sale would be Completed			20.00%
Real Estate [Member]
Timber And Timberlands [Line Items]
Net loss		$ 48.5

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Debt (Narrative) (Details) - USD ($) $ in Millions	1 Months Ended
	Jun. 30, 2016	Feb. 29, 2016
Revenue Bonds [Member]
Line of Credit Facility [Line Items]
Long-term Debt, Gross	$ 42.6
Debt Instrument, Interest Rate, Stated Percentage	5.90%
Debt instrument maturity date	2026
Term Loans [Member]
Line of Credit Facility [Line Items]
Long-term Debt, Gross		$ 27.5
Debt Instrument, Interest Rate, Stated Percentage	2.15%

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Derivative Instruments (Narrative) (Details) $ in Millions	6 Months Ended
	Jun. 30, 2016 USD ($)
Derivative Instrument Detail [Abstract]
Net losses expected to be reclassified into earnings in the next twelve months	$ 0.3

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Derivative Instruments (Fair Value of Derivative Instruments) (Details) - Designated as Hedging Instrument [Member] - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset	$ 1,692	$ 581
Derivative Asset, Fair Value, Gross Liabilities	946	0
Interest rate contracts [Member] | Other Current Assets [Member]
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset	82	7
Interest rate contracts [Member] | Other Noncurrent Assets [Member]
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset	1,610	574
Interest rate contracts [Member] | Long-term Debt [Member]
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Liabilities	$ 946	$ 0

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Derivative Instruments (Effect of Derivatives on Consolidated Statements of Income) (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Derivative Instruments, Gain (Loss) [Line Items]
Net effect on other comprehensive income (loss)		$ (413)	$ 0	$ (577)	$ 0
Cash Flow Hedging [Member] | Other Comprehensive Income (Loss) [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) recognized on derivative, net of tax of $(264) and $(369) (effective portion)		(490)	0	(654)	0
Interest Expense [Member] | Fair Value Hedging [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Realized gain on interest rate contracts	[1]	214	409	456	788
Interest Expense [Member] | Cash Flow Hedging [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) reclassified into income (effective portion)		$ (77)	$ 0	$ (77)	$ 0

[1] Realized gain on hedging instruments consists of net cash settlements and interest accruals on the fair value 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

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Derivative Instruments (Effect of Derivatives on Consolidated Statements of Income) (Parenthetical) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Derivative Instrument [Abstract]
Gain (loss) recognized on derivative (effective portion), tax effect	$ (264)	$ 0	$ (369)	$ 0

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Financial Instruments (Estimated Fair Values Of Financial Instruments) (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Level 1 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and short-term investments, Carrying Amount	$ 65,378	$ 7,925
Cash and short-term investments, Fair Value	65,378	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	586,287	603,881
Long-term debt, including fair value adjustments related to hedging instruments, Fair Value	609,232	626,021
Level 2 [Member] | Interest rate contracts [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Asset related to interest rate swaps, Carrying Amount	1,692	581
Liability related to interest rate swaps, Carrying Amount	946	0
Asset related to interest rate swaps, Fair Value	1,692	581
Liability related to interest rate swap, Fair Value	946	0
Level 3 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Company owned life insurance asset (COLI)	$ 1,683	$ 687

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Pension and Other Postretirement Employee Benefits (Components Of Net Periodic Cost (Benefit)) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Pension Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 1,747	$ 1,531	$ 3,254	$ 3,061
Interest cost	4,258	4,259	8,510	8,518
Expected return on plan assets	(4,734)	(5,192)	(9,500)	(10,383)
Amortization of prior service cost (credit)	129	152	259	303
Amortization of actuarial loss	4,253	4,408	8,170	8,816
Net periodic cost (benefit)	5,653	5,158	10,693	10,315
Other Postretirement Employee Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	2	4	7	11
Interest cost	355	345	710	728
Amortization of prior service cost (credit)	(2,218)	(2,328)	(4,438)	(4,656)
Amortization of actuarial loss	430	466	858	1,024
Net periodic cost (benefit)	$ (1,431)	$ (1,513)	$ (2,863)	$ (2,893)

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Pension and Other Postretirement Employee Benefits (Narrative) (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Defined Benefit Plan Disclosure [Line Items]
Other Postretirement Benefits Payments	$ 1.9	$ 1.8
Non-Qualified Supplemental Pension Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Contributions	$ 0.7	$ 0.9

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Pension and Other Postretirement Employee Benefits (Change in Accumulated Other Comprehensive Loss (AOCL)) (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Accumulated Other Comprehensive Loss [Roll Forward]
AOCL at beginning of period		$ 113,128	$ 116,691	$ 114,503	$ 118,392
Prior service credit (cost)	[1]	1,274	1,328	2,549	2,656
Actuarial loss	[1]	(2,857)	(2,974)	(5,507)	(6,003)
Total reclassification for the period	[1]	(1,583)	(1,646)	(2,958)	(3,347)
AOCL at end of period		111,545	115,045	111,545	115,045
Pension Plans [Member]
Accumulated Other Comprehensive Loss [Roll Forward]
AOCL at beginning of period		125,776	131,480	128,244	134,261
Prior service credit (cost)	[1]	(79)	(92)	(158)	(184)
Actuarial loss	[1]	(2,594)	(2,689)	(4,983)	(5,378)
Total reclassification for the period	[1]	(2,673)	(2,781)	(5,141)	(5,562)
AOCL at end of period		123,103	128,699	123,103	128,699
Other Postretirement Employee Benefits [Member]
Accumulated Other Comprehensive Loss [Roll Forward]
AOCL at beginning of period		(12,648)	(14,789)	(13,741)	(15,869)
Prior service credit (cost)	[1]	1,353	1,420	2,707	2,840
Actuarial loss	[1]	(263)	(285)	(524)	(625)
Total reclassification for the period	[1]	1,090	1,135	2,183	2,215
AOCL at end of period		$ (11,558)	$ (13,654)	$ (11,558)	$ (13,654)

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

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Equity-Based Compensation (Narrative) (Details) $ in Millions	6 Months Ended
	Jun. 30, 2016 USD ($) shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted Stock Unit, Vested, Issuance Deferred	65,357
Director [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Preferred Stock, Shares Outstanding	148,248
Performance shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost | $	$ 5.1
Weighted average period (in years)	1 year 8 months 12 days
Restricted stock units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost | $	$ 1.6
Weighted average period (in years)	1 year 8 months 12 days
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	1,600,000
2014 Stock Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized	1,000,000
2005 and 2014 Stock Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized	1,100,000

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Equity-Based Compensation (Details Of Equity-Based Compensation Expense) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Employee equity-based compensation expense	$ 1,222	$ 1,182	$ 2,176	$ 2,259
Deferred compensation stock equivalent units expense	220	47	420	166
Total tax benefit recognized for share-based expense	89	78	155	152
Performance shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Employee equity-based compensation expense	951	950	1,705	1,822
Restricted stock units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Employee equity-based compensation expense	$ 271	$ 232	$ 471	$ 437

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Equity-Based Compensation (Fair Value of Performance Share Awards) (Details) - Performance Shares [Member] - $ / shares	6 Months Ended
	Jun. 30, 2016	Jun. 30, 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%
Expected volatility	23.82%	21.09%
Expected dividends	5.79%	3.75%
Expected term (years)	3 years	3 years

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Equity-Based Compensation (Summary Of Outstanding Performance Shares/Restricted Stock Units) (Details) $ / shares in Units, $ in Thousands	6 Months Ended
	Jun. 30, 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
Unvested shares outstanding at June 30, Shares | shares	286,518
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
Unvested shares outstanding at June 30, Weighted Avg. Grant Date Fair Value (in dollars per share) | $ / shares	$ 36.64
Aggregate Intrinsic Value | $	$ 9,770
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	43,320
Vested (in shares) | shares	(2,000)
Unvested shares outstanding at June 30, Shares | shares	85,851
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	26.08
Vested, Weighted Avg. Grant Date Fair Value (in dollars per share) | $ / shares	39.12
Unvested shares outstanding at June 30, Weighted Avg. Grant Date Fair Value (in dollars per share) | $ / shares	$ 33.03
Aggregate Intrinsic Value | $	$ 2,928

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Income Taxes (Narrative) (Details) $ in Millions	3 Months Ended
	Jun. 30, 2016 USD ($)
Central Idaho Timberlands [Member]
Income Taxes [Line Items]
Reclassification of operating loss carryforwards to deferred tax assets receivables, net	$ 5.5

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Commitments and Contingencies (Details) - USD ($) $ in Thousands	Sep. 25, 2015	May 23, 2012	Jun. 30, 2016	Mar. 31, 2016
Commitments And Contingencies Disclosure [Abstract]
Loss Contingency Accrual, Payments		$ 1,750
Loss Contingency, Damages Sought, Value	$ 9,600
Loss Contingency Accrual			$ 800	$ 200

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Segment Information (Summary Of Information By Business Segment) (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Segment Reporting Information [Line Items]
Segment Revenues		$ 141,495	$ 128,747	$ 269,391	$ 262,872
Operating Income (loss)		(34,228)	7,311	(29,156)	21,338
Interest expense, net		(8,206)	(8,016)	(14,231)	(16,085)
Income (loss) before income taxes		(42,434)	(705)	(43,387)	5,253
Depreciation, depletion and amortization		7,869	7,093	16,474	15,597
Bond Discounts and Deferred Loan Fees		468	369	834	744
Basis of real estate sold		3,387	600	5,421	1,008
Operating Segments [Member]
Segment Reporting Information [Line Items]
Segment Revenues		155,704	139,047	293,218	285,346
Operating Income (loss)		(24,031)	15,904	(9,328)	38,956
Depreciation, depletion and amortization		7,188	6,473	15,219	14,318
Operating Segments [Member] | Resource [Member]
Segment Reporting Information [Line Items]
Segment Revenues		54,826	44,111	103,536	98,066
Operating Income (loss)		15,672	8,797	25,879	23,775
Depreciation, depletion and amortization		5,387	4,797	11,515	11,051
Operating Segments [Member] | Wood Products [Member]
Segment Reporting Information [Line Items]
Segment Revenues		90,924	84,191	174,162	173,424
Operating Income (loss)		4,695	(1,953)	5,651	1,547
Depreciation, depletion and amortization		1,800	1,661	3,701	3,237
Operating Segments [Member] | Real Estate [Member]
Segment Reporting Information [Line Items]
Segment Revenues		9,954	10,745	15,520	13,856
Operating Income (loss)	[1]	(43,429)	8,521	(41,354)	10,120
Depreciation, depletion and amortization		1	15	3	30
Basis of real estate sold		3,509	710	5,754	1,181
Intersegment Eliminations [Member]
Segment Reporting Information [Line Items]
Segment Revenues		(14,209)	(10,300)	(23,827)	(22,474)
Operating Income (loss)		(969)	539	496	3,514
Basis of real estate sold		(122)	(110)	(333)	(173)
Corporate [Member]
Segment Reporting Information [Line Items]
Operating Income (loss)		(10,197)	(8,593)	(19,828)	(17,618)
Depreciation, depletion and amortization		$ 213	$ 251	$ 421	$ 535

[1] In the second quarter of 2016, we sold approximately 172,000 acres of timberlands located in central Idaho for $114 million at a loss of $48.5 million before taxes.

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Segment Information (Summary Of Information By Business Segment) (Parenthetical) (Details) $ in Millions		3 Months Ended
	Apr. 21, 2016 USD ($) a	Jun. 30, 2016 USD ($)
Segment Reporting Information [Line Items]
Acres sold through timberland sale | a	172,000
Land Sales	$ 114.0
Real Estate [Member]
Segment Reporting Information [Line Items]
Net loss		$ 48.5
Operating Segments [Member] | Real Estate [Member]
Segment Reporting Information [Line Items]
Net loss	$ 48.5