Potlatch 1Q16 Earnings Call Notes

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Potlatch Corporation’s (PCH) CEO Mike Covey on Q1 2016 Results

Sold 172k acres in Central Idaho for $114m

“We announced this morning that we have sold 172,000 acres of timberlands in Central Idaho for $114 million. As many of you know, Central Idaho is our realized strategic timberland holding based on productivity and location.”

Norther Idaho generates $117 EBITDA per acre, which is 5x central Idaho

“In addition, the truck-haul distance is shorter in Northern Idaho which results in much higher stumpage values in Central Idaho. For these reasons, our Northern Idaho property generates a $117 of EBITDA per acre, which is over 5 times that of Central Idaho.”

Northern Idaho appraised at $2000 per acre

“As you know, we had an appraisal completed in 2012 when log prices were much lower that concluded the 352,000 core acres of our ownership in Northern Idaho were worth of $2,000 per acre.”

Eric Cremers

We had seen a nice run in lumber prices our expectation is for modest gains going forward

“we had seen a real nice run in lumber prices. Our expectation from here is for continued very modest gains in pricing. We are not really yet to the heart of the building season and with the U.S. dollar continuing to be relatively weak, we think that bodes well for the future.”

Dealers have learned to operate with low inventories

“It’s hard to get good data on where things stand out in the distribution network. Our general feeling is that dealers have learned to operate with very low inventories. It’s more of a just in time kind of a business. So any change in the outlook or demand or lumber or housing starts, shows up very rapidly in the form of price increase or decrease. So I think it’s fair to say that that inventories are – they’re relatively low levels. “