(Mark One)
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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2015
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from
to
.
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Delaware
|
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82-0156045
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(State or other jurisdiction of incorporation or organization)
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(IRS Employer Identification No.)
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601 West 1st Ave., Suite 1600
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Spokane, Washington
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99201
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(Address of principal executive offices)
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(Zip Code)
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TITLE OF EACH CLASS
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NAME OF EACH EXCHANGE ON WHICH REGISTERED
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Common Stock
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The Nasdaq Global Select Market
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($1 par value)
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PAGE
NUMBER
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ITEM 1.
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ITEM 1A.
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ITEM 1B.
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ITEM 2.
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ITEM 3.
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ITEM 4.
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ITEM 5.
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ITEM 6.
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ITEM 7.
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ITEM 7A.
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ITEM 8.
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ITEM 9.
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ITEM 9A.
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ITEM 9B.
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ITEM 10.
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ITEM 11.
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ITEM 12.
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ITEM 13.
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ITEM 14.
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ITEM 15.
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•
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timber inventory;
|
•
|
increasing lumber demand and pricing in North America in 2016;
|
•
|
increased North American housing starts and repair and remodel activity;
|
•
|
increased lumber production in 2016;
|
•
|
the expected positive effect on timber prices of increased lumber demand and higher lumber prices;
|
•
|
expected sawlog prices in 2016;
|
•
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expected timber harvest level of between 4.0 million and 4.8 million tons each year over the next several years;
|
•
|
expected 2016 overall timber harvest of 4.4 million tons;
|
•
|
expected sale of 38% of Northern region timber volume under log supply agreements in 2016;
|
•
|
expected sales of 75,000 acres of higher and better use (HBU) property,130,000 acres of rural real estate property and 80,000 acres of non-strategic timberland over the next decade or more;
|
•
|
funding of our dividends in 2016;
|
•
|
compliance with REIT tax rules;
|
•
|
Forest Steward Council
®
(FSC
®
) and Sustainable Forest Initiative
®
(SFI
®
) certification of our timberlands;
|
•
|
expectations regarding premium prices for FSC
®
-certified logs and FSC
®
-certified lumber;
|
•
|
realization of deferred tax assets;
|
•
|
expected capital expenditures in 2016;
|
•
|
expectations regarding funding of our pension plans in 2016;
|
•
|
expectations regarding supplemental pension plan payments in 2016;
|
•
|
estimated future benefit payments;
|
•
|
estimated future payments under operating leases;
|
•
|
estimated long-term rate of return on pension assets;
|
•
|
estimated future debt payments; and
|
•
|
expected liquidity in 2016 to fund our operations, regular stockholder dividends, capital expenditures and debt service obligations and related matters.
|
•
|
changes in timber growth rates;
|
•
|
changes in silviculture;
|
•
|
timber cruising variables;
|
•
|
changes in state forest acts or best management practices;
|
•
|
changes in timber harvest levels on our lands;
|
•
|
changes in timber prices;
|
•
|
changes in timberland values;
|
•
|
changes in policy regarding governmental timber sales;
|
•
|
changes in the United States and international economies;
|
•
|
changes in interest rates and discount rates;
|
•
|
changes in exchange rates;
|
•
|
changes in requirements for FSC
®
or SFI
®
certification;
|
•
|
changes in the level of residential and commercial construction and remodeling activity;
|
•
|
changes in tariffs, quotas and trade agreements involving wood products;
|
•
|
changes in demand for our products;
|
•
|
changes in production and production capacity in the forest products industry;
|
•
|
competitive pricing pressures for our products;
|
•
|
unanticipated manufacturing disruptions;
|
•
|
changes in general and industry-specific environmental laws and regulations;
|
•
|
unforeseen environmental liabilities or expenditures;
|
•
|
weather conditions;
|
•
|
changes in raw material and other costs;
|
•
|
collectability of amounts owed by customers;
|
•
|
changes in federal and state tax laws;
|
•
|
the ability to satisfy complex rules in order to remain qualified as a REIT; and
|
•
|
changes in tax laws that could reduce the benefits associated with REIT status.
|
•
|
Resource:
Our Resource segment manages our timberlands to optimize revenue producing opportunities while adhering to our strict stewardship standards. Management activities include planting and harvesting trees and building and maintaining roads. The Resource segment also generates revenues from activities such as hunting leases, recreation permits and leases, mineral rights leases, biomass production and carbon sequestration.
|
•
|
Wood Products:
Our Wood Products segment manufactures and markets lumber, plywood and residual products.
|
•
|
Real Estate:
The business of our Real Estate segment consists primarily of the sale of land holdings deemed non-strategic or identified as having higher and better use alternatives. The Real Estate segment engages in real estate sales and limited subdivision activity through Potlatch TRS.
|
•
|
Managing our timberlands to improve their long-term sustainable yield.
We manage our timberlands in a manner designed to optimize the balance among timber growth, prudent environmental management and current cash flow, in order to achieve increasing levels of sustainable yield over the long-term. We may choose to harvest timber at levels above or below our current estimate of sustainability for short periods of time, for the purpose of improving the long-term productivity of certain timber stands or in response to market conditions. In addition, we focus on optimizing timber returns by continually improving productivity and yields through advanced silvicultural practices that take into account soil, climate and biological considerations.
|
•
|
Pursuing attractive acquisitions.
We actively pursue timberland acquisitions that meet our financial and strategic criteria. The critical elements of our acquisition strategy generally include acquiring properties that complement our existing land base, are immediately cash flow accretive and have attractive timber or higher and better use (HBU) values.
|
•
|
Maximizing the value of our timberland real estate.
A portion of our acreage is more valuable for recreational purposes or to other timberland or real estate investors rather than for growing timber. We continually assess the potential uses of our lands and manage them proactively for the highest value. We have identified approximately 20% of our timberlands as having values that are potentially greater than timberland values.
|
•
|
Practicing sound environmental stewardship.
We pursue a program of environmental stewardship and active involvement in federal, state and local policymaking to maximize our assets’ long-term value. We manage our timberlands in a manner consistent with the principles set forth by SFI
®
or FSC
®
.
|
(Acres in thousands)
|
|
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|||
REGION
|
|
STATE
|
|
DESCRIPTION
|
|
ACRES
|
|
Northern region
|
|
Idaho
|
|
Variety of commercially viable softwood species, such as grand fir, Douglas fir, inland red cedar and other associated softwoods
|
|
790
|
|
|
|
Minnesota
|
|
Primarily aspen, pine and other mixed hardwoods
|
|
169
|
|
|
|
|
|
Total Northern region
|
|
959
|
|
Southern region
|
|
Alabama
|
|
Primarily southern yellow pine and other hardwoods
|
|
98
|
|
|
|
Arkansas
|
|
Primarily southern yellow pine and other hardwoods
|
|
415
|
|
|
|
Mississippi
|
|
Primarily southern yellow pine and other hardwoods
|
|
100
|
|
|
|
|
|
Total Southern region
|
|
613
|
|
|
|
|
|
Total
|
|
1,572
|
|
|
TIMBER HARVESTED
|
||||||||||
(Tons in thousands)
|
SAWLOGS
|
|
PULPWOOD
|
|
STUMPAGE
|
|
TOTAL
|
||||
Northern region
|
1,993
|
|
|
195
|
|
|
24
|
|
|
2,212
|
|
Southern region
|
736
|
|
|
1,128
|
|
|
321
|
|
|
2,185
|
|
Total
|
2,729
|
|
|
1,323
|
|
|
345
|
|
|
4,397
|
|
|
ANNUAL CAPACITY
1,2
|
|
PRODUCTION
2
|
Sawmills:
|
|
|
|
Warren, Arkansas
|
175 mmbf
|
|
175 mmbf
|
St. Maries, Idaho
|
165 mmbf
|
|
170 mmbf
|
Gwinn, Michigan
|
175 mmbf
|
|
166 mmbf
|
Bemidji, Minnesota
|
135 mmbf
|
|
123 mmbf
|
Plywood Mill:
|
|
|
|
St. Maries, Idaho
|
150 mmsf
|
|
161 mmsf
|
1
|
Capacity represents the proven annual production capabilities of the facility under normal operating conditions and producing a normal product mix. Normal operating conditions are based on the configuration, efficiency and the number of shifts worked at each individual facility. In general, the definition includes two shifts per day for five days (two 40-hour shifts) per week at each facility, which is consistent with industry-wide recognized measures. Production can exceed capacity due to efficiency gains and overtime.
|
2
|
mmbf stands for million board feet; mmsf stands for million square feet, 3/8 inch panel thickness basis.
|
•
|
HBU properties have characteristics that provide primarily home site or other development potential as a result of superior location or other attractive amenities. These properties tend to have a much higher value than timberlands.
|
•
|
Rural recreational real estate properties also have a higher value than timberlands, but do not have the same developmental potential as HBU properties. For example, these properties may be appropriate for hunting, conservation or secondary rural housing.
|
•
|
Non-strategic properties often have locational or operational disadvantages for us, and are typically on the fringe of our ownership areas.
|
•
|
on-the-ground analysis and verification of modeling assumptions;
|
•
|
electronic analysis, using geographic information systems; and
|
•
|
certain measured and ranked attributes, such as timber potential, recreational opportunities, accessibility, special features and population and demographic trends.
|
•
|
make it more difficult for us to satisfy our obligations with respect to our indebtedness, and any failure to comply with the obligations under any of our debt instruments, including restrictive covenants, could result in an event of default under the agreements governing such indebtedness;
|
•
|
require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing funds available for dividends to stockholders, working capital, capital expenditures, acquisitions and other purposes;
|
•
|
increase our vulnerability to adverse economic and industry conditions, which could place us at a competitive disadvantage compared with our competitors that have relatively less indebtedness;
|
•
|
limit our flexibility in planning for, or reacting to, changes in our business and the industries in which we operate; and
|
•
|
limit our ability to borrow additional funds, or to dispose of assets to raise funds, if needed, for dividends to stockholders, working capital, capital expenditures, acquisitions and other corporate purposes.
|
•
|
we would not be allowed a deduction for dividends to stockholders in computing our taxable income; and
|
•
|
we would be subject to federal income tax on our taxable income at regular corporate rates, including any applicable alternative minimum tax.
|
•
|
a classified board of directors with three-year staggered terms;
|
•
|
the ability of our board of directors to issue shares of preferred stock and to determine the price and other terms, including preferences and voting rights, of those shares without stockholder approval;
|
•
|
stockholder action can only be taken at a special or regular meeting and not by written consent and stockholders cannot call a special meeting except upon the written request of stockholders entitled to cast not less than a majority of all of the votes entitled to be cast at the meeting;
|
•
|
advance notice procedures for nominating candidates to our board of directors or presenting matters at stockholder meetings;
|
•
|
removal of directors only for cause;
|
•
|
allowing only our board of directors to fill vacancies on our board of directors;
|
•
|
in order to facilitate the preservation of our status as a REIT under the Internal Revenue Code, a prohibition on any single stockholder, or any group of affiliated stockholders, from beneficially owning more than 9.8% of our outstanding common or preferred stock, unless our board waives or modifies this ownership limitation;
|
•
|
unless approved by the vote of at least 80% of our outstanding shares, we may not engage in business combinations, including mergers, dispositions of assets, certain issuances of shares of stock and other specified transactions, with a person owning or controlling, directly or indirectly, 5% or more of the voting power of our outstanding common stock; and
|
•
|
supermajority voting requirements to amend our bylaws and certain provisions of our certificate of incorporation.
|
|
2015
|
|
2014
|
||||||||||||||||
QUARTER
|
HIGH
|
LOW
|
CASH
DIVIDENDS
|
|
HIGH
|
LOW
|
CASH
DIVIDENDS
|
||||||||||||
1st
|
$
|
43.55
|
|
$
|
37.95
|
|
$
|
0.375
|
|
|
$
|
42.44
|
|
$
|
37.52
|
|
$
|
0.35
|
|
2nd
|
40.11
|
|
35.00
|
|
0.375
|
|
|
41.80
|
|
37.04
|
|
0.35
|
|
||||||
3rd
|
36.34
|
|
28.40
|
|
0.375
|
|
|
43.20
|
|
39.83
|
|
0.35
|
|
||||||
4th
|
34.24
|
|
28.00
|
|
0.375
|
|
|
44.20
|
|
39.89
|
|
0.375
|
|
INFORMATION ABOUT SECURITIES AUTHORIZED FOR ISSUANCE UNDER OUR EQUITY COMPENSATION PLAN
|
|||||||||
PLAN CATEGORY
|
NUMBER OF SECURITIES
TO BE ISSUED UPON
EXERCISE OF
OUTSTANDING OPTIONS,
WARRANTS OR RIGHTS
1
|
|
|
WEIGHTED AVERAGE
EXERCISE PRICE OF
OUTSTANDING OPTIONS,
WARRANTS OR RIGHTS
2
|
|
|
NUMBER OF SECURITIES
REMAINING AVAILABLE
FOR FUTURE ISSUANCE
UNDER EQUITY
COMPENSATION PLANS
|
|
|
Equity compensation plans approved by security holders
|
422,208
|
|
|
$
|
—
|
|
|
1,264,065
|
|
Equity compensation plans not approved by security holders
|
—
|
|
|
|
—
|
|
|
—
|
|
Total
|
422,208
|
|
|
$
|
—
|
|
|
1,264,065
|
|
1
|
Includes 161,049 performance shares and 53,216 restricted stock units, or RSUs, which are the maximum number of shares that can be awarded under the performance share and RSU programs, not including future dividend equivalents. Also includes 207,943 deferred compensation stock equivalent units.
|
2
|
Performance shares and RSUs do not have exercise prices and are therefore not included in the weighted average exercise price calculation.
|
|
AT DECEMBER 31,
|
||||||||||||||||||
|
2011
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
||||||||||
Potlatch Corporation
|
$
|
101
|
|
|
$
|
131
|
|
|
$
|
144
|
|
|
$
|
150
|
|
|
$
|
113
|
|
NAREIT Equity Index
|
108
|
|
|
128
|
|
|
131
|
|
|
170
|
|
|
176
|
|
|||||
S&P 500 Composite
|
102
|
|
|
118
|
|
|
157
|
|
|
178
|
|
|
181
|
|
|||||
2015 Peer Group
1
|
104
|
|
|
143
|
|
|
152
|
|
|
162
|
|
|
154
|
|
1
|
Our Peer Group companies are Deltic Timber Corp., Plum Creek Timber Co., Inc., Rayonier Inc., St. Joe Co., Universal Forest Products Inc. and Weyerhaeuser Co. Returns are weighted based on market capitalizations as of the beginning of each year.
|
(Dollars in thousands – except per share amounts)
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
Revenues
|
$
|
575,336
|
|
|
$
|
606,950
|
|
|
$
|
570,289
|
|
|
$
|
525,134
|
|
|
$
|
497,421
|
|
Net income
|
31,714
|
|
|
89,910
|
|
|
70,581
|
|
|
42,594
|
|
|
40,266
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
1,2
|
$
|
1,016,612
|
|
|
$
|
1,031,746
|
|
|
$
|
677,202
|
|
|
$
|
714,787
|
|
|
$
|
740,548
|
|
Working capital
2
|
(9,967
|
)
|
|
20,298
|
|
|
79,044
|
|
|
73,444
|
|
|
55,806
|
|
|||||
Long-term debt (including current portion)
1,2
|
603,881
|
|
|
625,668
|
|
|
316,764
|
|
|
353,465
|
|
|
360,731
|
|
|||||
Total stockholders’ equity
|
203,736
|
|
|
225,066
|
|
|
204,148
|
|
|
138,643
|
|
|
142,138
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Current ratio
|
0.9 to 1
|
|
|
1.3 to 1
|
|
|
2.6 to 1
|
|
|
2.2 to 1
|
|
|
1.7 to 1
|
|
|||||
Long-term debt to stockholders’ equity ratio
|
3.0 to 1
|
|
|
2.8 to 1
|
|
|
1.6 to 1
|
|
|
2.6 to 1
|
|
|
2.6 to 1
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures:
3
|
|
|
|
|
|
|
|
|
|
||||||||||
Property, plant and equipment, net
|
$
|
18,987
|
|
|
$
|
13,261
|
|
|
$
|
10,280
|
|
|
$
|
5,636
|
|
|
$
|
5,338
|
|
Timberlands reforestation and roads, net
|
13,745
|
|
|
10,971
|
|
|
12,313
|
|
|
11,774
|
|
|
11,158
|
|
|||||
Total capital expenditures
|
$
|
32,732
|
|
|
$
|
24,232
|
|
|
$
|
22,593
|
|
|
$
|
17,410
|
|
|
$
|
16,496
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
0.78
|
|
|
$
|
2.21
|
|
|
$
|
1.74
|
|
|
$
|
1.06
|
|
|
$
|
1.00
|
|
Diluted
|
0.77
|
|
|
2.20
|
|
|
1.73
|
|
|
1.05
|
|
|
1.00
|
|
|||||
Weighted-average shares outstanding (in thousands):
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
40,842
|
|
|
40,749
|
|
|
40,503
|
|
|
40,333
|
|
|
40,159
|
|
|||||
Diluted
|
40,988
|
|
|
40,894
|
|
|
40,709
|
|
|
40,553
|
|
|
40,383
|
|
|||||
Dividends per share
|
$
|
1.50
|
|
|
$
|
1.425
|
|
|
$
|
1.28
|
|
|
$
|
1.24
|
|
|
$
|
1.84
|
|
(Dollars in thousands)
|
2015
|
|
2014
|
|
CHANGE
|
||||||||
Revenues
|
$
|
575,336
|
|
|
$
|
606,950
|
|
|
$
|
(31,614
|
)
|
(5
|
)%
|
Costs and expenses:
|
|
|
|
|
|
|
|||||||
Cost of goods sold
|
470,037
|
|
|
429,789
|
|
|
40,248
|
|
9
|
%
|
|||
Selling, general and administrative expenses
|
46,392
|
|
|
44,655
|
|
|
1,737
|
|
4
|
%
|
|||
|
516,429
|
|
|
474,444
|
|
|
41,985
|
|
9
|
%
|
|||
Operating income
|
58,907
|
|
|
132,506
|
|
|
(73,599
|
)
|
(56
|
)%
|
|||
Interest expense, net
|
(32,761
|
)
|
|
(22,909
|
)
|
|
(9,852
|
)
|
(43
|
)%
|
|||
Income before income taxes
|
26,146
|
|
|
109,597
|
|
|
(83,451
|
)
|
(76
|
)%
|
|||
Income tax benefit (provision)
|
5,568
|
|
|
(19,687
|
)
|
|
25,255
|
|
128
|
%
|
|||
Net income
|
$
|
31,714
|
|
|
$
|
89,910
|
|
|
$
|
(58,196
|
)
|
(65
|
)%
|
|
|
YEARS ENDED DECEMBER 31,
|
|
|
|
|||||||||
(Dollars in thousands)
|
2015
|
|
2014
|
|
CHANGE
|
|||||||||
Revenues
1
|
$
|
263,875
|
|
|
$
|
252,581
|
|
|
$
|
11,294
|
|
4
|
%
|
|
Cost of goods sold:
|
|
|
|
|
|
|
||||||||
Logging and hauling
|
126,085
|
|
|
117,938
|
|
|
8,147
|
|
7
|
%
|
||||
Depreciation, depletion and amortization
|
28,583
|
|
|
17,428
|
|
|
11,155
|
|
64
|
%
|
||||
Other
|
26,289
|
|
|
25,815
|
|
|
474
|
|
2
|
%
|
||||
|
180,957
|
|
|
161,181
|
|
|
19,776
|
|
12
|
%
|
||||
Selling, general and administrative expenses
|
6,568
|
|
|
6,424
|
|
|
144
|
|
2
|
%
|
||||
Operating income
|
$
|
76,350
|
|
|
$
|
84,976
|
|
|
$
|
(8,626
|
)
|
(10
|
)%
|
|
|
|
|
|
|
|
|
||||||||
Harvest Volumes
(in tons)
|
|
|
|
|
|
|
||||||||
Northern region
|
|
|
|
|
|
|
||||||||
|
Sawlog
|
1,992,965
|
|
|
1,982,113
|
|
|
10,852
|
|
1
|
%
|
|||
|
Pulpwood
|
194,902
|
|
|
201,926
|
|
|
(7,024
|
)
|
(3
|
)%
|
|||
|
Stumpage
|
23,574
|
|
|
16,312
|
|
|
7,262
|
|
45
|
%
|
|||
|
Total
|
2,211,441
|
|
|
2,200,351
|
|
|
11,090
|
|
1
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Southern region
|
|
|
|
|
|
|
||||||||
|
Sawlog
|
736,333
|
|
|
619,750
|
|
|
116,583
|
|
19
|
%
|
|||
|
Pulpwood
|
1,127,561
|
|
|
817,408
|
|
|
310,153
|
|
38
|
%
|
|||
|
Stumpage
|
321,172
|
|
|
21,798
|
|
|
299,374
|
|
n/m
|
|
|||
|
Total
|
2,185,066
|
|
|
1,458,956
|
|
|
726,110
|
|
50
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|||||
Total harvest volume
|
4,396,507
|
|
|
3,659,307
|
|
|
737,200
|
|
20
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|||||
Sales Price/Unit
($ per ton)
|
|
|
|
|
|
|
|
|
||||||
Northern region
2
|
|
|
|
|
|
|
|
|
||||||
|
Sawlog
|
$
|
87
|
|
|
$
|
91
|
|
|
$
|
(4
|
)
|
(4
|
)%
|
|
Pulpwood
|
$
|
42
|
|
|
$
|
43
|
|
|
$
|
(1
|
)
|
(2
|
)%
|
|
Stumpage
|
$
|
9
|
|
|
$
|
11
|
|
|
$
|
(2
|
)
|
(18
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Southern region
2
|
|
|
|
|
|
|
||||||||
|
Sawlog
|
$
|
43
|
|
|
$
|
46
|
|
|
$
|
(3
|
)
|
(7
|
)%
|
|
Pulpwood
|
$
|
33
|
|
|
$
|
34
|
|
|
$
|
(1
|
)
|
(3
|
)%
|
|
Stumpage
|
$
|
19
|
|
|
$
|
14
|
|
|
$
|
5
|
|
36
|
%
|
1
|
Prior to elimination of intersegment fiber revenues of $53.7 million in 2015 and $62.3 million in 2014.
|
2
|
Sawlog and pulpwood sales prices are on a delivered basis, which includes contracted logging and hauling costs charged to the customer. Stumpage sales provide our customers the right to harvest standing timber. As such, the customer contracts the logging and hauling and bears such costs.
|
|
YEARS ENDED DECEMBER 31,
|
|
|
|
|||||||||
(Dollars in thousands)
|
2015
|
|
2014
|
|
CHANGE
|
||||||||
Revenues
|
$
|
336,214
|
|
|
$
|
376,239
|
|
|
$
|
(40,025
|
)
|
(11
|
)%
|
Cost of goods sold
1
:
|
|
|
|
|
|
|
|||||||
Fiber costs
|
180,971
|
|
|
176,782
|
|
|
4,189
|
|
2
|
%
|
|||
Manufacturing cost
|
127,998
|
|
|
118,104
|
|
|
9,894
|
|
8
|
%
|
|||
Finished goods inventory change
|
1,548
|
|
|
(2,370
|
)
|
|
3,918
|
|
(165
|
)%
|
|||
Other
2
|
25,675
|
|
|
26,804
|
|
|
(1,129
|
)
|
(4
|
)%
|
|||
|
336,192
|
|
|
319,320
|
|
|
16,872
|
|
5
|
%
|
|||
Selling, general and administrative expenses
|
5,257
|
|
|
4,477
|
|
|
780
|
|
17
|
%
|
|||
Operating income (loss)
|
$
|
(5,235
|
)
|
|
$
|
52,442
|
|
|
$
|
(57,677
|
)
|
(110
|
)%
|
|
|
|
|
|
|
|
|||||||
Lumber shipments (MBF)
|
626,630
|
|
|
659,583
|
|
|
(32,953
|
)
|
(5
|
)%
|
|||
Lumber sales prices ($ per MBF)
|
$
|
346
|
|
|
$
|
402
|
|
|
$
|
(56
|
)
|
(14
|
)%
|
1
|
Prior to elimination of intersegment fiber costs of $53.7 million in 2015 and $62.3 million in 2014.
|
2
|
Other cost of goods sold is primarily customer freight.
|
•
|
Fiber costs increased $4.2 million primarily due to higher log costs in Minnesota and Michigan as a result of strong demand by pulp and paper manufacturers, partially offset by lower production volumes.
|
•
|
Manufacturing costs increased primarily due to higher payroll and maintenance expense, largely the result of overtime and temporary labor associated with projects at the mills, as well as higher pension costs related to the adoption of updated mortality tables and a reduction in the discount rate at the end of 2014. Depreciation also increased as a result of the large capital project installations at our lumber mills.
|
•
|
Inventory fluctuates based on a combination of production volume, fiber costs, manufacturing costs and shipments.
|
|
YEARS ENDED DECEMBER 31,
|
|
|
||||||||||||
(Dollars in thousands)
|
2015
|
|
2014
|
|
CHANGE
|
||||||||||
Revenues
|
$
|
28,989
|
|
|
$
|
40,460
|
|
|
$
|
(11,471
|
)
|
|
(28
|
)%
|
|
Cost of goods sold:
|
|
|
|
|
|
|
|
||||||||
Basis of real estate sold
|
7,394
|
|
|
9,355
|
|
|
(1,961
|
)
|
|
(21
|
)%
|
||||
Other
|
2,519
|
|
|
2,050
|
|
|
469
|
|
|
23
|
%
|
||||
|
9,913
|
|
|
11,405
|
|
|
(1,492
|
)
|
|
(13
|
)%
|
||||
Selling, general and administrative expenses
|
2,227
|
|
|
2,110
|
|
|
117
|
|
|
6
|
%
|
||||
Operating income
|
16,849
|
|
|
26,945
|
|
|
(10,096
|
)
|
|
(37
|
)%
|
||||
|
|
|
|
|
|
|
|
||||||||
|
2015
|
|
2014
|
||||||||||||
|
ACRES SOLD
|
|
AVERAGE
PRICE/ACRE
|
|
ACRES SOLD
|
|
AVERAGE
PRICE/ACRE
|
||||||||
HBU
|
4,599
|
|
|
$
|
3,340
|
|
|
3,784
|
|
|
$
|
2,129
|
|
||
Rural real estate
|
9,036
|
|
|
$
|
1,329
|
|
|
28,059
|
|
|
$
|
1,112
|
|
||
Non-strategic timberland
|
1,753
|
|
|
$
|
900
|
|
|
1,560
|
|
|
$
|
779
|
|
||
Total
|
15,388
|
|
|
|
|
33,403
|
|
|
|
(Dollars in thousands)
|
2014
|
|
2013
|
|
CHANGE
|
||||||||
Revenues
|
$
|
606,950
|
|
|
$
|
570,289
|
|
|
$
|
36,661
|
|
6
|
%
|
Costs and expenses:
|
|
|
|
|
|
|
|||||||
Cost of goods sold
|
429,789
|
|
|
408,772
|
|
|
21,017
|
|
5
|
%
|
|||
Selling, general and administrative expenses
|
44,655
|
|
|
50,397
|
|
|
(5,742
|
)
|
(11
|
)%
|
|||
Environmental remediation charge
|
—
|
|
|
3,522
|
|
|
(3,522
|
)
|
n/m
|
|
|||
|
474,444
|
|
|
462,691
|
|
|
11,753
|
|
3
|
%
|
|||
Operating income
|
132,506
|
|
|
107,598
|
|
|
24,908
|
|
23
|
%
|
|||
Interest expense, net
|
(22,909
|
)
|
|
(23,132
|
)
|
|
223
|
|
1
|
%
|
|||
Income before income taxes
|
109,597
|
|
|
84,466
|
|
|
25,131
|
|
30
|
%
|
|||
Income tax provision
|
(19,687
|
)
|
|
(13,885
|
)
|
|
(5,802
|
)
|
42
|
%
|
|||
Net income
|
$
|
89,910
|
|
|
$
|
70,581
|
|
|
$
|
19,329
|
|
27
|
%
|
|
|
YEARS ENDED DECEMBER 31,
|
|
|
|
|||||||||
(Dollars in thousands)
|
2014
|
|
2013
|
|
CHANGE
|
|||||||||
Revenues
1
|
$
|
252,581
|
|
|
$
|
238,228
|
|
|
$
|
14,353
|
|
6
|
%
|
|
Cost of goods sold:
|
|
|
|
|
|
|
||||||||
Logging and hauling
|
117,938
|
|
|
117,529
|
|
|
409
|
|
—
|
%
|
||||
Depreciation, depletion and amortization
|
17,428
|
|
|
17,440
|
|
|
(12
|
)
|
—
|
%
|
||||
Other
|
25,815
|
|
|
24,010
|
|
|
1,805
|
|
8
|
%
|
||||
|
161,181
|
|
|
158,979
|
|
|
2,202
|
|
1
|
%
|
||||
Selling, general and administrative expenses
|
6,424
|
|
|
5,824
|
|
|
600
|
|
10
|
%
|
||||
Operating income
|
$
|
84,976
|
|
|
$
|
73,425
|
|
|
$
|
11,551
|
|
16
|
%
|
|
|
|
|
|
|
|
|
||||||||
Harvest Volumes
(in tons)
|
|
|
|
|
|
|
||||||||
Northern region
|
|
|
|
|
|
|
||||||||
|
Sawlog
|
1,982,113
|
|
|
2,031,637
|
|
|
(49,524
|
)
|
(2
|
)%
|
|||
|
Pulpwood
|
201,926
|
|
|
127,998
|
|
|
73,928
|
|
58
|
%
|
|||
|
Stumpage
|
16,312
|
|
|
25,397
|
|
|
(9,085
|
)
|
(36
|
)%
|
|||
|
Total
|
2,200,351
|
|
|
2,185,032
|
|
|
15,319
|
|
1
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Southern region
|
|
|
|
|
|
|
||||||||
|
Sawlog
|
619,750
|
|
|
694,147
|
|
|
(74,397
|
)
|
(11
|
)%
|
|||
|
Pulpwood
|
817,408
|
|
|
821,781
|
|
|
(4,373
|
)
|
(1
|
)%
|
|||
|
Stumpage
|
21,798
|
|
|
8,353
|
|
|
13,445
|
|
161
|
%
|
|||
|
Total
|
1,458,956
|
|
|
1,524,281
|
|
|
(65,325
|
)
|
(4
|
)%
|
|||
|
|
|
|
|
|
|
|
|||||||
Total harvest volume
|
3,659,307
|
|
|
3,709,313
|
|
|
(50,006
|
)
|
(1
|
)%
|
||||
|
|
|
|
|
|
|
|
|||||||
Sales Price/Unit
($ per ton)
|
|
|
|
|
|
|
||||||||
Northern region
2
|
|
|
|
|
|
|
||||||||
|
Sawlog
|
$
|
91
|
|
|
$
|
85
|
|
|
$
|
6
|
|
7
|
%
|
|
Pulpwood
|
$
|
43
|
|
|
$
|
36
|
|
|
$
|
7
|
|
19
|
%
|
|
Stumpage
|
$
|
11
|
|
|
$
|
8
|
|
|
$
|
3
|
|
38
|
%
|
|
|
|
|
|
|
|
|
|||||||
Southern region
2
|
|
|
|
|
|
|
||||||||
|
Sawlog
|
$
|
46
|
|
|
$
|
43
|
|
|
$
|
3
|
|
7
|
%
|
|
Pulpwood
|
$
|
34
|
|
|
$
|
32
|
|
|
$
|
2
|
|
6
|
%
|
|
Stumpage
|
$
|
14
|
|
|
$
|
12
|
|
|
$
|
2
|
|
17
|
%
|
1
|
Prior to elimination of intersegment fiber revenues of $62.3 million in 2014 and $60.1 million in 2013.
|
2
|
Sawlog and pulpwood sales prices are on a delivered basis, which includes contracted logging and hauling costs charged to the customer. Stumpage sales provides our customers the right to harvest standing timber. As such, the customer contracts the logging and hauling and bears such costs.
|
|
YEARS ENDED DECEMBER 31,
|
|
|
|
|||||||||
(Dollars in thousands)
|
2014
|
|
2013
|
|
CHANGE
|
||||||||
Revenues
|
$
|
376,239
|
|
|
$
|
366,015
|
|
|
$
|
10,224
|
|
3
|
%
|
Cost of goods sold
1
:
|
|
|
|
|
|
|
|||||||
Fiber costs
|
176,782
|
|
|
169,556
|
|
|
7,226
|
|
4
|
%
|
|||
Manufacturing cost
|
118,104
|
|
|
112,260
|
|
|
5,844
|
|
5
|
%
|
|||
Finished goods inventory change
|
(2,370
|
)
|
|
(4,496
|
)
|
|
2,126
|
|
(47
|
)%
|
|||
Other
2
|
26,804
|
|
|
25,178
|
|
|
1,626
|
|
6
|
%
|
|||
|
319,320
|
|
|
302,498
|
|
|
16,822
|
|
6
|
%
|
|||
Selling, general and administrative expenses
|
4,477
|
|
|
4,625
|
|
|
(148
|
)
|
(3
|
)%
|
|||
Operating income
|
$
|
52,442
|
|
|
$
|
58,892
|
|
|
$
|
(6,450
|
)
|
(11
|
)%
|
|
|
|
|
|
|
|
|||||||
Lumber shipments
(MBF)
|
659,583
|
|
|
641,217
|
|
|
18,366
|
|
3
|
%
|
|||
Lumber sales prices
($ per MBF)
|
$
|
402
|
|
|
$
|
392
|
|
|
$
|
10
|
|
3
|
%
|
1
|
Prior to elimination of intersegment fiber costs of $62.3 million in 2014 and $60.1 million in 2013.
|
2
|
Other cost of goods sold is primarily customer freight.
|
•
|
Fiber costs increased $7.2 million due to a 7% increase in log costs, primarily in Idaho, and higher lumber shipments.
|
•
|
Manufacturing costs increased primarily due to labor-related expenses and other variable costs due to increased production and sales volumes.
|
•
|
Inventory fluctuates based on a combination of production volume, fiber costs, manufacturing costs and shipments.
|
|
YEARS ENDED DECEMBER 31,
|
|
|
||||||||||||
(Dollars in thousands)
|
2014
|
|
2013
|
|
CHANGE
|
||||||||||
Revenues
|
$
|
40,460
|
|
|
$
|
26,160
|
|
|
$
|
14,300
|
|
|
55
|
%
|
|
Cost of goods sold:
|
|
|
|
|
|
|
|
||||||||
Basis of real estate sold
|
9,355
|
|
|
3,536
|
|
|
5,819
|
|
|
165
|
%
|
||||
Other
|
2,050
|
|
|
2,280
|
|
|
(230
|
)
|
|
(10
|
)%
|
||||
|
11,405
|
|
|
5,816
|
|
|
5,589
|
|
|
96
|
%
|
||||
Selling, general and administrative expenses
|
2,110
|
|
|
2,078
|
|
|
32
|
|
|
2
|
%
|
||||
Operating income
|
$
|
26,945
|
|
|
$
|
18,266
|
|
|
$
|
8,679
|
|
|
48
|
%
|
|
|
|
|
|
|
|
|
|
||||||||
|
2014
|
|
2013
|
||||||||||||
|
ACRES SOLD
|
|
AVERAGE
PRICE/ACRE
|
|
ACRES SOLD
|
|
AVERAGE
PRICE/ACRE
|
||||||||
HBU
|
3,784
|
|
|
$
|
2,129
|
|
|
4,799
|
|
|
$
|
2,033
|
|
||
Rural real estate
|
28,059
|
|
|
$
|
1,112
|
|
|
9,494
|
|
|
$
|
1,310
|
|
||
Non-strategic timberland
|
1,560
|
|
|
$
|
779
|
|
|
4,669
|
|
|
$
|
849
|
|
||
Total
|
33,403
|
|
|
|
|
18,962
|
|
|
|
•
|
$74.0 million in 2015,
|
•
|
$131.4 million in 2014 and
|
•
|
$90.3 million in 2013.
|
•
|
Cash received from customers decreased $42.5 million, primarily due to lower log and lumber prices. A more detailed discussion of revenues is included in the
Business Segment Results
section.
|
•
|
Cash paid to employees, suppliers and others increased $26.2 million in 2015 from 2014 primarily due to increased logging and hauling expense as a result of our acquisition of Alabama and Mississippi timberlands in December 2014, as well as higher fiber and lumber manufacturing costs.
|
•
|
Cash paid for interest increased $8.8 million as a result of $310.0 million of long-term debt incurred in December 2014 for the acquisition of timberlands in Alabama and Mississippi. Net cash paid for interest expense in 2015 was $29.7 million compared with $20.9 million in 2014.
|
•
|
Net cash outflows related to income taxes decreased $16.5 million. In 2015 cash paid for taxes was $1.6 million, compared with $18.1 million in 2014.
|
•
|
Cash contributions to our qualified pension plans decreased $3.6 million in 2015 from 2014. We did not make a qualified pension plan contribution in 2015.
|
•
|
Cash received from customers increased $49.6 million, primarily due to increased sales and cash received by the Resource, Wood Products and Real Estate segments. A more detailed discussion of revenues is included in the
Business Segment Results
section.
|
•
|
Net cash outflows related to income taxes decreased $2.0 million. Net cash paid for taxes in 2014 was $18.1 million compared with $20.1 million in 2013.
|
•
|
Cash paid to employees, suppliers and others increased $8.2 million in 2014 from 2013 primarily due to higher log costs and labor-related expenses due to increased shipments by our Wood Products segment.
|
•
|
Cash contributions to our qualified pension plans increased $3.6 million in 2014 from 2013, as we did not make a qualified pension plan contribution in 2013.
|
•
|
We may use 100% of our Funds Available for Distribution, or FAD, for the period January 1, 2010 through the end of the quarter preceding the payment date, less cumulative restricted payments previously made from FAD during that period, to make restricted payments. Our cumulative FAD less our dividends paid was $77.5 million at December 31, 2015.
|
•
|
If our cumulative FAD, less cumulative restricted payments previously made from FAD, is insufficient to cover a restricted payment, then we are permitted to make payments from a basket amount, which was approximately $90.1 million at December 31, 2015.
|
•
|
If our cumulative FAD less our aggregate restricted payments made from FAD is insufficient to cover a restricted payment and we have depleted the basket, we may still make a restricted payment, so long as, after giving effect to the payment, our ratio of indebtedness to earnings before interest, taxes, depreciation, depletion, amortization and basis of real estate sold, or EBITDDA, from continuing operations for the preceding four full fiscal quarters does not exceed 4.25 to 1.00.
|
|
CREDIT AGREEMENT COVENANT REQUIREMENTS
|
|
TERM LOAN COVENANT REQUIRMENTS
|
|
ACTUALS AT DECEMBER 31, 2015
|
Minimum Interest Coverage Ratio
|
3.00 to 1.00
|
|
3.00 to 1.00
|
|
3.28 to 1.00
|
Maximum Leverage Ratio
|
40%
|
|
40%
|
|
25%
|
Maximum Allowable Acres that may be sold
|
480,000
|
|
475,407
|
|
22,210
|
(Amounts per share)
|
2015
|
|
2014
|
|
2013
|
||||||
Capital gain dividends
|
$
|
1.28
|
|
|
$
|
1.425
|
|
|
$
|
1.28
|
|
Non-taxable return of capital
|
0.22
|
|
|
—
|
|
|
—
|
|
|||
Total dividends
|
$
|
1.50
|
|
|
$
|
1.425
|
|
|
$
|
1.28
|
|
|
PAYMENTS DUE BY PERIOD
|
||||||||||||||||||
(Dollars in thousands)
|
TOTAL
|
|
WITHIN
1 YEAR
|
|
1-3 YEARS
|
|
4-5 YEARS
|
|
MORE THAN
5 YEARS
|
||||||||||
Long-term debt
1
|
$
|
607,585
|
|
|
$
|
5,000
|
|
|
$
|
25,250
|
|
|
$
|
236,000
|
|
|
$
|
341,335
|
|
Interest on long-term debt
2
|
180,586
|
|
|
28,427
|
|
|
56,181
|
|
|
41,197
|
|
|
54,781
|
|
|||||
Revolving line of credit borrowings
1
|
30,000
|
|
|
30,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Operating leases
3
|
9,618
|
|
|
3,601
|
|
|
4,960
|
|
|
969
|
|
|
88
|
|
|||||
Purchase obligations
4
|
18,074
|
|
|
10,617
|
|
|
5,641
|
|
|
1,816
|
|
|
—
|
|
|||||
Other long-term liabilities
5
|
139,748
|
|
|
—
|
|
|
22,185
|
|
|
43,432
|
|
|
74,131
|
|
|||||
Total
|
$
|
985,611
|
|
|
$
|
77,645
|
|
|
$
|
114,217
|
|
|
$
|
323,414
|
|
|
$
|
470,335
|
|
1
|
See
Note 8: Debt
in the
Notes to Consolidated Financial Statements
.
|
2
|
Amounts presented for interest payments assume that all long-term debt outstanding as of
December 31, 2015
will remain outstanding until maturity, and interest rates on variable debt in effect as of December 31, 2015 will remain in effect until maturity. Estimated cash flows related to interest rate swaps are also included in this category.
|
3
|
4
|
Purchase obligations primarily include open purchase orders for goods or services that are legally binding on the company and that specify fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. Purchase obligations exclude arrangements that the company can cancel without penalty.
|
5
|
Other long-term liabilities include the liability associated with cost share logging roads, employee-related obligations, qualified pension contributions, supplemental pension payments and payments for other postretirement employee benefit obligations. See
Note 7. Accounts Payable and Accrued Liabilities
,
Note 9. Other Long-Term Obligations
and
Note 11: Savings Plans, Pension Plans and Other Postretirement Employee Benefits
, in the
Notes to Consolidated Financial Statements
for additional detail.
|
|
EXPECTED MATURITY DATE
|
||||||||||||||||||||||||||
(Dollars in thousands)
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
THEREAFTER
|
|
TOTAL
|
||||||||||||||
Variable rate debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Principal due
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
40,000
|
|
|
$
|
40,000
|
|
|
$
|
40,000
|
|
|
$
|
120,000
|
|
Average interest rate
|
|
|
|
|
|
|
1.98
|
%
|
|
2.23
|
%
|
|
2.23
|
%
|
|
2.14
|
%
|
||||||||||
Fair value at 12/31/15
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
120,000
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed rate debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Principal due
|
$
|
5,000
|
|
|
$
|
11,000
|
|
|
$
|
14,250
|
|
|
$
|
150,000
|
|
|
$
|
6,000
|
|
|
$
|
301,335
|
|
|
$
|
487,585
|
|
Average interest rate
|
8.80
|
%
|
|
5.64
|
%
|
|
8.88
|
%
|
|
7.50
|
%
|
|
3.70
|
%
|
|
5.09
|
%
|
|
5.98
|
%
|
|||||||
Fair value at 12/31/15
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
506,021
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Interest rate swaps
1
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed to variable
|
$
|
7
|
|
|
$
|
107
|
|
|
$
|
421
|
|
|
$
|
46
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
581
|
|
Fair value at 12/31/15
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
581
|
|
1
|
The fair value of interest rate swaps are included in current and long-term debt on the Consolidated Balance Sheets. The derivative assets are included in the other assets and current receivables on the Consolidated Balance Sheets.
|
(Dollars in thousands)
|
NOTIONAL AMOUNT
|
|
INTEREST RATE SWAP AGREEMENTS - FAIR VALUE
1
|
||||||||||||||||||||
|
Current
|
|
+50 BPS
|
|
+100 BPS
|
|
-50 BPS
|
|
-100 BPS
|
||||||||||||||
Maturing in:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2016
|
$
|
5,000
|
|
|
$
|
14
|
|
|
$
|
14
|
|
|
$
|
14
|
|
|
$
|
14
|
|
|
$
|
14
|
|
2017
|
5,000
|
|
|
115
|
|
|
83
|
|
|
51
|
|
|
148
|
|
|
174
|
|
||||||
2018
|
14,250
|
|
|
446
|
|
|
308
|
|
|
172
|
|
|
586
|
|
|
737
|
|
||||||
2019
|
50,000
|
|
|
155
|
|
|
(758
|
)
|
|
(1,652
|
)
|
|
1,088
|
|
|
2,054
|
|
||||||
Total
|
$
|
74,250
|
|
|
$
|
730
|
|
|
$
|
(353
|
)
|
|
$
|
(1,415
|
)
|
|
$
|
1,836
|
|
|
$
|
2,979
|
|
1
|
Fair value for this table is calculated on a termination value basis. Accrued interest is included and a credit value adjustment, which is used for GAAP purposes, is excluded.
|
|
FOR THE YEARS ENDED DECEMBER 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Revenues
|
$
|
575,336
|
|
|
$
|
606,950
|
|
|
$
|
570,289
|
|
Costs and expenses:
|
|
|
|
|
|
||||||
Cost of goods sold
|
470,037
|
|
|
429,789
|
|
|
408,772
|
|
|||
Selling, general and administrative expenses
|
46,392
|
|
|
44,655
|
|
|
50,397
|
|
|||
Environmental remediation charges
|
—
|
|
|
—
|
|
|
3,522
|
|
|||
|
516,429
|
|
|
474,444
|
|
|
462,691
|
|
|||
Operating income
|
58,907
|
|
|
132,506
|
|
|
107,598
|
|
|||
Interest expense, net
|
(32,761
|
)
|
|
(22,909
|
)
|
|
(23,132
|
)
|
|||
Income before income taxes
|
26,146
|
|
|
109,597
|
|
|
84,466
|
|
|||
Income tax benefit (provision)
|
5,568
|
|
|
(19,687
|
)
|
|
(13,885
|
)
|
|||
Net income
|
$
|
31,714
|
|
|
$
|
89,910
|
|
|
$
|
70,581
|
|
|
|
|
|
|
|
||||||
Net income per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
0.78
|
|
|
$
|
2.21
|
|
|
$
|
1.74
|
|
Diluted
|
0.77
|
|
|
2.20
|
|
|
1.73
|
|
|||
|
|
|
|
|
|
||||||
Dividends per share
|
$
|
1.50
|
|
|
$
|
1.425
|
|
|
$
|
1.28
|
|
|
FOR THE YEARS ENDED DECEMBER 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Net income
|
$
|
31,714
|
|
|
$
|
89,910
|
|
|
$
|
70,581
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||
Pension and other postretirement employee benefits:
|
|
|
|
|
|
||||||
Net gain (loss) arising during the period, net of tax expense (benefit) of $(1,913), $(15,598) and $21,424
|
(2,990
|
)
|
|
(24,396
|
)
|
|
33,510
|
|
|||
Amortization of actuarial loss included in net periodic cost, net of tax expense of $7,794, $6,488 and $9,024
|
12,190
|
|
|
10,149
|
|
|
14,114
|
|
|||
Amortization of prior service credit included in net periodic cost, net of tax benefit of $(3,396), $(3,468) and $(3,482)
|
(5,311
|
)
|
|
(5,425
|
)
|
|
(5,446
|
)
|
|||
Other comprehensive income (loss), net of tax
|
3,889
|
|
|
(19,672
|
)
|
|
42,178
|
|
|||
Comprehensive income
|
$
|
35,603
|
|
|
$
|
70,238
|
|
|
$
|
112,759
|
|
|
AT DECEMBER 31,
|
||||||
|
2015
|
|
2014
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash
|
$
|
7,886
|
|
|
$
|
4,644
|
|
Short-term investments
|
39
|
|
|
26,368
|
|
||
Receivables, net of allowance for doubtful accounts of $440 and $450
|
13,420
|
|
|
9,928
|
|
||
Inventories
|
35,162
|
|
|
31,490
|
|
||
Deferred tax assets, net
1
|
—
|
|
|
6,168
|
|
||
Other assets
2
|
14,246
|
|
|
13,894
|
|
||
Total current assets
|
70,753
|
|
|
92,492
|
|
||
Property, plant and equipment, net
|
75,285
|
|
|
65,749
|
|
||
Timber and timberlands, net
|
816,599
|
|
|
828,420
|
|
||
Deferred tax assets, net
1
|
46,600
|
|
|
37,228
|
|
||
Other assets
2
|
7,375
|
|
|
7,857
|
|
||
Total assets
|
$
|
1,016,612
|
|
|
$
|
1,031,746
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Revolving line of credit borrowings
|
$
|
30,000
|
|
|
$
|
—
|
|
Current portion of long-term debt
|
5,007
|
|
|
22,870
|
|
||
Accounts payable and accrued liabilities
|
39,740
|
|
|
43,064
|
|
||
Current liability for pensions and other postretirement employee benefits
|
5,973
|
|
|
6,260
|
|
||
Total current liabilities
|
80,720
|
|
|
72,194
|
|
||
Long-term debt
2
|
598,874
|
|
|
602,798
|
|
||
Liability for pensions and other postretirement employee benefits
|
119,369
|
|
|
115,936
|
|
||
Other long-term obligations
|
13,913
|
|
|
15,752
|
|
||
Total liabilities
|
812,876
|
|
|
806,680
|
|
||
Commitments and contingencies
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, authorized 4,000,000 shares, no shares issued
|
—
|
|
|
—
|
|
||
Common stock, $1 par value, authorized 100,000,000 shares, issued 40,680,713 and 40,605,179 shares
|
40,681
|
|
|
40,605
|
|
||
Additional paid-in capital
|
350,541
|
|
|
346,441
|
|
||
Accumulated deficit
|
(72,983
|
)
|
|
(43,588
|
)
|
||
Accumulated other comprehensive loss
|
(114,503
|
)
|
|
(118,392
|
)
|
||
Total stockholders’ equity
|
203,736
|
|
|
225,066
|
|
||
Total liabilities and stockholders' equity
|
$
|
1,016,612
|
|
|
$
|
1,031,746
|
|
1
|
Current deferred tax assets were classified as noncurrent in 2015 due to the adoption of ASU No. 2015-17.
|
2
|
Debt issuance costs in 2014 were reclassified to conform with the 2015 presentation.
|
|
FOR THE YEARS ENDED DECEMBER 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
||||||
Net income
|
$
|
31,714
|
|
|
$
|
89,910
|
|
|
$
|
70,581
|
|
Adjustments to reconcile net income to net cash from operating activities:
|
|
|
|
|
|
||||||
Depreciation, depletion and amortization
|
38,105
|
|
|
26,749
|
|
|
26,962
|
|
|||
Basis of real estate sold
|
7,012
|
|
|
8,646
|
|
|
2,904
|
|
|||
Change in deferred taxes
|
(5,696
|
)
|
|
(1,616
|
)
|
|
(2,467
|
)
|
|||
Employee benefit plans
|
4,986
|
|
|
2,122
|
|
|
7,561
|
|
|||
Equity-based compensation expense
|
4,758
|
|
|
4,137
|
|
|
4,377
|
|
|||
Other, net
|
(2,046
|
)
|
|
(2,191
|
)
|
|
(1,972
|
)
|
|||
Change in:
|
|
|
|
|
|
||||||
Receivables
|
(3,864
|
)
|
|
7,016
|
|
|
(5,904
|
)
|
|||
Inventories
|
(3,672
|
)
|
|
4,785
|
|
|
(7,347
|
)
|
|||
Other assets
|
898
|
|
|
(1,421
|
)
|
|
1,668
|
|
|||
Accounts payable and accrued liabilities
|
267
|
|
|
(2,388
|
)
|
|
(3,468
|
)
|
|||
Funding of qualified pension plans
|
—
|
|
|
(3,550
|
)
|
|
—
|
|
|||
Timber deposits and cost share roads
|
1,552
|
|
|
(827
|
)
|
|
(2,643
|
)
|
|||
Net cash from operating activities
|
74,014
|
|
|
131,372
|
|
|
90,252
|
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
||||||
Change in short-term investments
|
26,329
|
|
|
25,883
|
|
|
10,826
|
|
|||
Transfer from company owned life insurance (COLI)
|
1,492
|
|
|
28,870
|
|
|
—
|
|
|||
Transfer to COLI
|
—
|
|
|
(25,515
|
)
|
|
—
|
|
|||
Property, plant and equipment
|
(18,987
|
)
|
|
(13,261
|
)
|
|
(10,280
|
)
|
|||
Timberlands reforestation and roads
|
(13,745
|
)
|
|
(10,971
|
)
|
|
(12,313
|
)
|
|||
Acquisition of timber and timberlands
|
(10,230
|
)
|
|
(388,952
|
)
|
|
(1,060
|
)
|
|||
Other, net
|
886
|
|
|
1,263
|
|
|
823
|
|
|||
Net cash from investing activities
|
(14,255
|
)
|
|
(382,683
|
)
|
|
(12,004
|
)
|
|||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
||||||
Dividends to common stockholders
|
(61,017
|
)
|
|
(57,848
|
)
|
|
(51,868
|
)
|
|||
Revolving line of credit borrowings
|
30,000
|
|
|
—
|
|
|
—
|
|
|||
Repayment of long-term debt
|
(22,500
|
)
|
|
—
|
|
|
(36,663
|
)
|
|||
Proceeds from issuance of long-term debt
|
—
|
|
|
310,000
|
|
|
—
|
|
|||
Issuance of common stock
|
—
|
|
|
398
|
|
|
1,904
|
|
|||
Change in book overdrafts
|
(1,549
|
)
|
|
1,465
|
|
|
(955
|
)
|
|||
Employee tax withholdings on vested performance share awards
|
(1,453
|
)
|
|
(1,104
|
)
|
|
(1,738
|
)
|
|||
Deferred financing costs
|
(45
|
)
|
|
(2,388
|
)
|
|
(25
|
)
|
|||
Other, net
|
47
|
|
|
(154
|
)
|
|
(302
|
)
|
|||
Net cash from financing activities
|
(56,517
|
)
|
|
250,369
|
|
|
(89,647
|
)
|
|||
Increase (decrease) in cash
|
3,242
|
|
|
(942
|
)
|
|
(11,399
|
)
|
|||
Cash at beginning of year
|
4,644
|
|
|
5,586
|
|
|
16,985
|
|
|||
Cash at end of year
|
$
|
7,886
|
|
|
$
|
4,644
|
|
|
$
|
5,586
|
|
|
|
|
|
|
|
||||||
SUPPLEMENTAL CASH FLOW INFORMATION
|
|
|
|
|
|
||||||
Cash paid during the year for:
|
|
|
|
|
|
||||||
Interest, net of amounts capitalized
|
$
|
29,676
|
|
|
$
|
20,918
|
|
|
$
|
22,229
|
|
Income taxes, net
|
1,576
|
|
|
18,104
|
|
|
20,097
|
|
|
COMMON STOCK
|
|
ADDITIONAL PAID-IN CAPITAL
|
|
ACCUMULATED DEFICIT
|
|
ACCUMULATED OTHER COMPREHENSIVE LOSS
|
|
TOTAL STOCKHOLDERS' EQUITY
|
|||||||||||||
|
SHARES
|
|
AMOUNT
|
|
||||||||||||||||||
BALANCE, DECEMBER 31, 2012
|
40,389,180
|
|
|
$
|
40,389
|
|
|
$
|
333,348
|
|
|
$
|
(94,196
|
)
|
|
$
|
(140,898
|
)
|
|
$
|
138,643
|
|
Exercise of stock options and stock awards
|
70,968
|
|
|
71
|
|
|
1,833
|
|
|
—
|
|
|
—
|
|
|
1,904
|
|
|||||
Performance share and restricted stock unit awards
|
76,731
|
|
|
77
|
|
|
2,706
|
|
|
(73
|
)
|
|
—
|
|
|
2,710
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
70,581
|
|
|
—
|
|
|
70,581
|
|
|||||
Pension plans and OPEB obligations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42,178
|
|
|
42,178
|
|
|||||
Common dividends, $1.28 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
(51,868
|
)
|
|
—
|
|
|
(51,868
|
)
|
|||||
BALANCE, DECEMBER 31, 2013
|
40,536,879
|
|
|
$
|
40,537
|
|
|
$
|
337,887
|
|
|
$
|
(75,556
|
)
|
|
$
|
(98,720
|
)
|
|
$
|
204,148
|
|
Exercise of stock options and stock awards
|
12,859
|
|
|
13
|
|
|
385
|
|
|
—
|
|
|
—
|
|
|
398
|
|
|||||
Performance share and restricted stock unit awards
|
55,441
|
|
|
55
|
|
|
2,974
|
|
|
(94
|
)
|
|
—
|
|
|
2,935
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
89,910
|
|
|
—
|
|
|
89,910
|
|
|||||
Director deferred stock awards
|
—
|
|
|
—
|
|
|
5,195
|
|
|
—
|
|
|
—
|
|
|
5,195
|
|
|||||
Pension plans and OPEB obligations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19,672
|
)
|
|
(19,672
|
)
|
|||||
Common dividends, $1.425 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
(57,848
|
)
|
|
—
|
|
|
(57,848
|
)
|
|||||
BALANCE, DECEMBER 31, 2014
|
40,605,179
|
|
|
$
|
40,605
|
|
|
$
|
346,441
|
|
|
$
|
(43,588
|
)
|
|
$
|
(118,392
|
)
|
|
$
|
225,066
|
|
Performance share and restricted stock unit awards
|
75,534
|
|
|
76
|
|
|
3,406
|
|
|
(92
|
)
|
|
—
|
|
|
3,390
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
31,714
|
|
|
—
|
|
|
31,714
|
|
|||||
Director deferred stock awards
|
—
|
|
|
—
|
|
|
701
|
|
|
—
|
|
|
—
|
|
|
701
|
|
|||||
Pension plans and OPEB obligations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,889
|
|
|
3,889
|
|
|||||
Transfer of assets from REIT to subsidiary
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|||||
Common dividends, $1.50 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
(61,017
|
)
|
|
—
|
|
|
(61,017
|
)
|
|||||
BALANCE, DECEMBER 31, 2015
|
40,680,713
|
|
|
$
|
40,681
|
|
|
$
|
350,541
|
|
|
$
|
(72,983
|
)
|
|
$
|
(114,503
|
)
|
|
$
|
203,736
|
|
(Dollars in thousands, except per share amounts)
|
2015
|
|
2014
|
|
2013
|
||||||
Net income
|
$
|
31,714
|
|
|
$
|
89,910
|
|
|
$
|
70,581
|
|
|
|
|
|
|
|
||||||
Basic weighted-average shares outstanding
|
40,842,126
|
|
|
40,748,924
|
|
|
40,502,878
|
|
|||
Incremental shares due to:
|
|
|
|
|
|
||||||
Performance shares
|
122,334
|
|
|
117,830
|
|
|
133,766
|
|
|||
Restricted stock units
|
23,359
|
|
|
27,628
|
|
|
69,076
|
|
|||
Stock options
|
—
|
|
|
—
|
|
|
3,567
|
|
|||
Diluted weighted-average shares outstanding
|
40,987,819
|
|
|
40,894,382
|
|
|
40,709,287
|
|
|||
|
|
|
|
|
|
||||||
Basic net income per share
|
$
|
0.78
|
|
|
$
|
2.21
|
|
|
$
|
1.74
|
|
Diluted net income per share
|
$
|
0.77
|
|
|
$
|
2.20
|
|
|
$
|
1.73
|
|
(Dollars in thousands)
|
2015
|
|
2014
|
||||
Logs
|
$
|
9,920
|
|
|
$
|
7,930
|
|
Wood products finished goods
|
16,932
|
|
|
17,286
|
|
||
Materials and supplies
|
8,310
|
|
|
6,274
|
|
||
|
$
|
35,162
|
|
|
$
|
31,490
|
|
Valued at lower of cost or market:
|
|
|
|
||||
Last-in, first-out basis
|
$
|
16,686
|
|
|
$
|
16,874
|
|
Average cost basis
|
18,476
|
|
|
14,616
|
|
||
Total inventories
|
$
|
35,162
|
|
|
$
|
31,490
|
|
(Dollars in thousands)
|
2015
|
|
2014
|
||||
Land and land improvements
|
$
|
18,194
|
|
|
$
|
18,374
|
|
Buildings and structures
|
36,364
|
|
|
36,174
|
|
||
Machinery and equipment
|
193,968
|
|
|
176,085
|
|
||
Construction in progress
|
224
|
|
|
5,878
|
|
||
|
248,750
|
|
|
236,511
|
|
||
Less: accumulated depreciation
|
(173,465
|
)
|
|
(170,762
|
)
|
||
Total property, plant and equipment, net
|
$
|
75,285
|
|
|
$
|
65,749
|
|
(Dollars in thousands)
|
2015
|
|
2014
|
||||
Timber and timberlands
|
$
|
745,634
|
|
|
$
|
760,431
|
|
Logging roads
|
70,965
|
|
|
67,989
|
|
||
Total timber and timberlands, net
|
$
|
816,599
|
|
|
$
|
828,420
|
|
Current Other Assets
|
|
|
|
||||
(Dollars in thousands)
|
2015
|
|
2014
|
||||
Real estate held for sale
|
$
|
12,708
|
|
|
$
|
11,529
|
|
Prepaid expenses
|
1,538
|
|
|
2,365
|
|
||
Total current other assets
|
$
|
14,246
|
|
|
$
|
13,894
|
|
Noncurrent Other Assets
|
|
|
|
||||
(Dollars in thousands)
|
2015
|
|
2014
|
||||
Deferred real estate development costs
|
$
|
3,309
|
|
|
$
|
3,320
|
|
Debt issuance costs - revolving line of credit
|
2,094
|
|
|
2,606
|
|
||
Investment in company owned life insurance (COLI)
|
687
|
|
|
877
|
|
||
Other
|
1,285
|
|
|
1,054
|
|
||
Total noncurrent other assets
|
$
|
7,375
|
|
|
$
|
7,857
|
|
(Dollars in thousands)
|
2015
|
|
2014
|
||||
Wages, salaries and employee benefits
|
$
|
9,509
|
|
|
$
|
14,667
|
|
Trade accounts payable
|
6,351
|
|
|
5,656
|
|
||
Interest
|
6,797
|
|
|
4,811
|
|
||
Property and other taxes
|
5,304
|
|
|
5,663
|
|
||
Logging related expenses
|
4,127
|
|
|
2,983
|
|
||
Book overdrafts
|
2,836
|
|
|
4,385
|
|
||
Deferred recreational lease income
|
1,575
|
|
|
1,616
|
|
||
Other accrued liabilities
|
3,241
|
|
|
3,283
|
|
||
Total
|
$
|
39,740
|
|
|
$
|
43,064
|
|
(Dollars in thousands)
|
2015
|
|
2014
|
||||
Term loans, variable rate 1.98% to 2.23% due 2019 through 2021 and fixed rate 2.95% to 4.64% due 2017 through 2024
|
$
|
322,000
|
|
|
$
|
322,000
|
|
Senior notes, 7.50%, due 2019
|
150,000
|
|
|
150,000
|
|
||
Revenue bonds, 5.90% to 6.95%, due 2024 and 2026
|
108,335
|
|
|
108,335
|
|
||
Debentures, 6.95%, due 2015
|
—
|
|
|
22,500
|
|
||
Medium-term notes, 8.75% to 8.89%, due 2016 through 2022
|
27,250
|
|
|
27,250
|
|
||
|
607,585
|
|
|
630,085
|
|
||
Interest rate swaps (See
Note 10: Financial Instruments
)
|
581
|
|
|
793
|
|
||
Less debt issuance costs
|
(3,037
|
)
|
|
(3,675
|
)
|
||
Less unamortized discounts
|
(1,248
|
)
|
|
(1,535
|
)
|
||
Total long-term debt (includes current portion)
|
603,881
|
|
|
625,668
|
|
||
Less current portion of long-term debt
|
(5,007
|
)
|
|
(22,870
|
)
|
||
Long-term debt
|
$
|
598,874
|
|
|
$
|
602,798
|
|
•
|
two
$6 million
tranches, with rates of
2.95%
maturing in 2017 and
3.70%
maturing in 2020,
|
•
|
three
$40 million
tranches maturing each year from 2019 through 2021 at variable rates based on 3-month LIBOR plus a spread between
1.65%
and
1.90%
,
|
•
|
two
$40 million
tranches with rates of
4.29%
maturing in 2022 and
4.49%
maturing in 2023 and
|
•
|
one
tranche of
$110 million
with a rate of
4.64%
maturing in 2024.
|
(Dollars in thousands)
|
|
||
2016
|
$
|
5,000
|
|
2017
|
11,000
|
|
|
2018
|
14,250
|
|
|
2019
|
190,000
|
|
|
2020
|
46,000
|
|
|
Thereafter
|
341,335
|
|
|
Total
|
$
|
607,585
|
|
(Dollars in thousands)
|
2015
|
|
2014
|
||||
Employee benefits and related liabilities
|
$
|
6,832
|
|
|
$
|
8,839
|
|
Cost share logging roads
|
6,384
|
|
|
5,894
|
|
||
Other
|
697
|
|
|
1,019
|
|
||
Total
|
$
|
13,913
|
|
|
$
|
15,752
|
|
|
2015
|
|
2014
|
||||||||||||
(Dollars in thousands)
|
CARRYING
AMOUNT
|
|
FAIR
VALUE
|
|
CARRYING
AMOUNT
|
|
FAIR
VALUE
|
||||||||
Cash and short-term investments (Level 1)
|
$
|
7,925
|
|
|
$
|
7,925
|
|
|
$
|
31,012
|
|
|
$
|
31,012
|
|
Net derivative asset related to interest rate swaps (Level 2)
|
$
|
581
|
|
|
$
|
581
|
|
|
$
|
793
|
|
|
$
|
793
|
|
Long-term debt (including current portion of long-term debt and fair value adjustments related to fair value swaps) (Level 2)
|
$
|
603,881
|
|
|
$
|
626,021
|
|
|
$
|
625,668
|
|
|
$
|
657,943
|
|
Company owned life insurance (COLI) (Level 3)
|
$
|
687
|
|
|
$
|
687
|
|
|
$
|
877
|
|
|
$
|
877
|
|
Level 1
|
Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets.
|
Level 2
|
Inputs to the valuation methodology include:
|
•
|
Quoted prices for similar assets or liabilities in active markets;
|
•
|
Quoted prices for identical or similar assets or liabilities in inactive markets;
|
•
|
Inputs other than quoted prices that are observable for the asset or liability; and
|
•
|
Inputs that are derived principally from or corroborated by observable market data by correlation or other means.
|
Level 3
|
Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
|
|
DERIVATIVE ASSETS
|
||||||||
|
|
|
2015
|
|
2014
|
||||
(Dollars in thousands)
|
BALANCE SHEET LOCATION
|
|
FAIR VALUE
|
|
FAIR VALUE
|
||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
||||
Interest rate contracts
|
Other assets, current
|
|
$
|
7
|
|
|
$
|
—
|
|
Interest rate contracts
|
Other assets, non-current
|
|
574
|
|
|
793
|
|
||
Total derivatives designated as hedging instruments
|
|
|
$
|
581
|
|
|
$
|
793
|
|
|
LOCATION OF GAIN RECOGNIZED IN INCOME
|
|
AMOUNT OF GAIN RECOGNIZED IN INCOME
|
||||||||||
(Dollars in thousands)
|
|
2015
|
|
2014
|
|
2013
|
|||||||
Derivatives designated in fair value hedging relationships:
|
|
|
|
|
|
|
|
||||||
Interest rate contracts
|
|
|
|
|
|
|
|
||||||
Realized gain on hedging instruments
1
|
Interest expense
|
|
$
|
1,534
|
|
|
$
|
979
|
|
|
$
|
960
|
|
Net gain recognized in income from fair value hedges
|
|
|
$
|
1,534
|
|
|
$
|
979
|
|
|
$
|
960
|
|
1
|
The realized gain on hedging instruments consist of net cash settlements and interest accruals on the interest rate swaps during the period, which are recognized in interest expense.
|
|
PENSION PLANS
|
|
OTHER POSTRETIREMENT
EMPLOYEE BENEFITS
|
||||||||||||
(Dollars in thousands)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Benefit obligation at beginning of year
|
$
|
(417,694
|
)
|
|
$
|
(393,565
|
)
|
|
$
|
(41,561
|
)
|
|
$
|
(47,343
|
)
|
Service cost
|
(6,159
|
)
|
|
(5,081
|
)
|
|
(22
|
)
|
|
(25
|
)
|
||||
Interest cost
|
(17,012
|
)
|
|
(19,184
|
)
|
|
(1,456
|
)
|
|
(1,741
|
)
|
||||
Actuarial gain (loss)
|
27,094
|
|
|
(49,990
|
)
|
|
3,778
|
|
|
3,229
|
|
||||
Benefits paid
|
31,700
|
|
|
50,126
|
|
|
3,790
|
|
|
4,319
|
|
||||
Benefit obligation at end of year
|
$
|
(382,071
|
)
|
|
$
|
(417,694
|
)
|
|
$
|
(35,471
|
)
|
|
$
|
(41,561
|
)
|
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets at beginning of year
|
$
|
337,059
|
|
|
$
|
350,588
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Actual return on plan assets
|
(14,970
|
)
|
|
31,280
|
|
|
—
|
|
|
—
|
|
||||
Employer contributions and benefit payments
|
1,811
|
|
|
5,317
|
|
|
3,790
|
|
|
4,319
|
|
||||
Benefits paid
|
(31,700
|
)
|
|
(50,126
|
)
|
|
(3,790
|
)
|
|
(4,319
|
)
|
||||
Fair value of plan assets at end of year
|
$
|
292,200
|
|
|
$
|
337,059
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amounts recognized in the consolidated balance sheets:
|
|
|
|
|
|
|
|
||||||||
Current liabilities
|
$
|
(1,791
|
)
|
|
$
|
(1,774
|
)
|
|
$
|
(4,182
|
)
|
|
$
|
(4,486
|
)
|
Noncurrent liabilities
|
(88,080
|
)
|
|
(78,861
|
)
|
|
(31,289
|
)
|
|
(37,075
|
)
|
||||
Funded status
|
$
|
(89,871
|
)
|
|
$
|
(80,635
|
)
|
|
$
|
(35,471
|
)
|
|
$
|
(41,561
|
)
|
|
Domestic and international equities
|
24
|
%
|
-
|
48%
|
|
Fixed income securities
|
38
|
%
|
-
|
58%
|
|
Alternatives, which may include equities and fixed income securities
|
12
|
%
|
-
|
18%
|
|
Cash
|
0
|
%
|
-
|
5%
|
•
|
Periodic reviews of allocations within these ranges are made to determine what adjustments should be made based on changing economic and market conditions and specific liquidity requirements.
|
•
|
Assets are managed by professional investment managers and may be invested in separately managed accounts or commingled funds. Assets are diversified by selecting different investment managers for each asset class and by limiting assets under each manager to no more than 25% of the total pension fund.
|
•
|
Assets are not invested in Potlatch stock.
|
|
PENSION PLANS
|
||||
ASSET CATEGORY
|
2015
|
|
2014
|
||
Domestic and international equities
|
35
|
%
|
|
36
|
%
|
Fixed income securities
|
48
|
|
|
48
|
|
Other (includes alternatives not classified as equities and fixed income securities)
|
17
|
|
|
16
|
|
Total
|
100
|
%
|
|
100
|
%
|
•
|
Corporate common and preferred stocks are valued at quoted market prices reported on the major securities markets, and are classified in Level 1. Investments in registered investment company funds for which market quotations are generally readily available are valued at the last reported sale price, official closing price or publicly available net asset value (NAV), or its equivalent on the primary market or exchange on which they are traded, and are classified in Level 1.
|
•
|
Investments in common and collective trust funds and hedge funds are generally valued based on their respective NAV (or its equivalent), as a practical expedient to estimate fair value due to the absence of readily available market prices. Investments that may be fully redeemed at NAV in the near-term are generally classified in Level 2.
|
•
|
Investments in funds that may not be fully redeemed at NAV in the near-term are generally classified in Level 3. We had no Level 3 investments at December 31, 2015 or 2014.
|
(Dollars in thousands)
|
DECEMBER 31, 2015
|
||||||||||
Asset Category
|
Level 1
|
|
Level 2
|
|
Total
|
||||||
Cash and equivalents
|
$
|
5,591
|
|
|
$
|
—
|
|
|
$
|
5,591
|
|
Domestic equity securities
1
|
26,253
|
|
|
25,619
|
|
|
51,872
|
|
|||
International equity securities
2
|
411
|
|
|
25,733
|
|
|
26,144
|
|
|||
Emerging markets
3
|
1,831
|
|
|
23,681
|
|
|
25,512
|
|
|||
Fixed income securities
4
|
138,906
|
|
|
—
|
|
|
138,906
|
|
|||
Alternatives
5
|
—
|
|
|
44,175
|
|
|
44,175
|
|
|||
Total
|
$
|
172,992
|
|
|
$
|
119,208
|
|
|
$
|
292,200
|
|
1
|
Level 1 assets are managed investments in U.S. small/mid-cap equities that track the Russell 2500 Growth index or Russell 2500 Value index. Level 2 assets are collective investments, which are invested in U.S. large-cap equities that track the S&P 500.
|
2
|
These collective investments are invested in equity funds of developed markets outside of the U.S. and Canada that track the MSCI EAFE Value index or MSCI EAFE Growth index.
|
3
|
Level 1 assets are mutual funds which are invested in the common stock of companies located (or with primary operations) in emerging markets that track the MSCI Emerging Markets index. Level 2 assets are collective investments in the common stock of companies located (or with primary operations) in emerging markets that track the MSCI Emerging Markets index.
|
4
|
These are mutual funds and investments in a diversified portfolio of fixed income instruments of varying maturities representing corporates, sovereign debt, U.S. treasuries, and municipals that track the Barclay's Long Term Credit index.
|
5
|
These are collective investments in inflation-indexed bonds, securities of real estate companies, commodity index-linked notes, fixed income securities, foreign currencies, securities of natural resource companies, master limited partnerships, publicly listed infrastructure companies, floating-rate debt, securities of global agriculture companies and securities of global timber companies.
|
6
|
These are managed investments in U.S. small/mid cap equities that track the Russell 2500 Growth index.
|
7
|
The mutual funds were
72%
invested in high-quality intermediate and long-term investment grade securities,
22%
invested in a diversified portfolio of fixed-income instruments of varying maturities, which may be represented by forwards or derivatives such as options, futures contracts or swap agreements and debt securities, and
6%
invested in U.S. small/mid-cap equities that track the Russell 2500 Growth index.
|
8
|
These collective investments are invested in U.S. large cap equities that track the S&P 500.
|
9
|
These collective investments are invested in equity funds of developed markets outside of the United States & Canada, which track the MSCI EAFE Value or MSCI EAFE Growth index.
|
10
|
These collective investments are invested in equity funds of emerging markets outside of the United States & Canada, which track the MSCI Emerging Markets index.
|
|
PENSION PLANS
|
|
OTHER POSTRETIREMENT
EMPLOYEE BENEFITS
|
||||||||||||||||||||
(Dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||
Service cost
|
$
|
6,159
|
|
|
$
|
5,081
|
|
|
$
|
5,318
|
|
|
$
|
22
|
|
|
$
|
25
|
|
|
$
|
94
|
|
Interest cost
|
17,012
|
|
|
19,184
|
|
|
17,826
|
|
|
1,456
|
|
|
1,741
|
|
|
1,810
|
|
||||||
Expected return on plan assets
|
(20,804
|
)
|
|
(24,512
|
)
|
|
(26,092
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of prior service cost (credit)
|
605
|
|
|
748
|
|
|
779
|
|
|
(9,312
|
)
|
|
(9,641
|
)
|
|
(9,708
|
)
|
||||||
Amortization of actuarial loss
|
17,937
|
|
|
14,451
|
|
|
19,929
|
|
|
2,047
|
|
|
2,186
|
|
|
3,209
|
|
||||||
Net periodic cost (benefit)
|
$
|
20,909
|
|
|
$
|
14,952
|
|
|
$
|
17,760
|
|
|
$
|
(5,787
|
)
|
|
$
|
(5,689
|
)
|
|
$
|
(4,595
|
)
|
|
PENSION PLANS
|
|
OTHER POSTRETIREMENT
EMPLOYEE BENEFITS
|
||||||||||||||||||||
(Dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||
Net amount at beginning of year
|
$
|
134,261
|
|
|
$
|
117,167
|
|
|
$
|
161,667
|
|
|
$
|
(15,869
|
)
|
|
$
|
(18,447
|
)
|
|
$
|
(20,769
|
)
|
Amounts arising during the period:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net loss (gain)
|
8,680
|
|
|
43,223
|
|
|
(52,242
|
)
|
|
(3,777
|
)
|
|
(3,229
|
)
|
|
(2,692
|
)
|
||||||
Taxes
|
(3,386
|
)
|
|
(16,857
|
)
|
|
20,374
|
|
|
1,473
|
|
|
1,259
|
|
|
1,050
|
|
||||||
Net amount arising during the period
|
5,294
|
|
|
26,366
|
|
|
(31,868
|
)
|
|
(2,304
|
)
|
|
(1,970
|
)
|
|
(1,642
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Amounts reclassified during the period:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Amortization of prior service (cost) credit
|
(605
|
)
|
|
(748
|
)
|
|
(779
|
)
|
|
9,312
|
|
|
9,641
|
|
|
9,708
|
|
||||||
Amortization of actuarial loss
|
(17,937
|
)
|
|
(14,451
|
)
|
|
(19,929
|
)
|
|
(2,047
|
)
|
|
(2,186
|
)
|
|
(3,209
|
)
|
||||||
Taxes
|
7,231
|
|
|
5,927
|
|
|
8,076
|
|
|
(2,833
|
)
|
|
(2,907
|
)
|
|
(2,535
|
)
|
||||||
Net reclassifications during the period
|
(11,311
|
)
|
|
(9,272
|
)
|
|
(12,632
|
)
|
|
4,432
|
|
|
4,548
|
|
|
3,964
|
|
||||||
Net amount at end of year
|
$
|
128,244
|
|
|
$
|
134,261
|
|
|
$
|
117,167
|
|
|
$
|
(13,741
|
)
|
|
$
|
(15,869
|
)
|
|
$
|
(18,447
|
)
|
|
PENSION PLANS
|
|
OTHER POSTRETIREMENT
EMPLOYEE BENEFITS
|
||||||||||||
(Dollars in thousands)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Net loss
|
$
|
127,307
|
|
|
$
|
134,717
|
|
|
$
|
9,634
|
|
|
$
|
(21,750
|
)
|
Prior service cost (credit)
|
937
|
|
|
(456
|
)
|
|
(23,375
|
)
|
|
5,881
|
|
||||
Net amount recognized
|
$
|
128,244
|
|
|
$
|
134,261
|
|
|
$
|
(13,741
|
)
|
|
$
|
(15,869
|
)
|
(Dollars in thousands)
|
PENSION PLANS
|
|
OTHER POSTRETIREMENT
EMPLOYEE BENEFITS
|
||||
2016
|
$
|
28,602
|
|
|
$
|
4,182
|
|
2017
|
28,250
|
|
|
3,917
|
|
||
2018
|
27,926
|
|
|
3,634
|
|
||
2019
|
27,673
|
|
|
3,380
|
|
||
2020
|
27,478
|
|
|
3,176
|
|
||
2021– 2025
|
132,612
|
|
|
12,584
|
|
|
PENSION PLANS
|
|
OTHER POSTRETIREMENT
EMPLOYEE BENEFITS
|
||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2015
|
|
2014
|
|
2013
|
||||||
Discount rate
|
4.65
|
%
|
|
4.25
|
%
|
|
5.10
|
%
|
|
4.25
|
%
|
|
3.90
|
%
|
|
4.45
|
%
|
Rate of salaried compensation increase
|
3.00
|
%
|
|
3.00
|
%
|
|
3.00
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
(Dollars in thousands)
|
1% INCREASE
|
|
|
1% DECREASE
|
|
||
Effect on total service cost plus interest cost
|
$
|
3,397
|
|
|
$
|
(3,262
|
)
|
Effect on accumulated postretirement benefit obligation
|
63,216
|
|
|
(63,216
|
)
|
(Dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Employee equity-based compensation expense:
|
|
|
|
|
|
||||||
Performance shares
|
3,877
|
|
|
3,515
|
|
|
3,635
|
|
|||
Restricted stock units
|
881
|
|
|
622
|
|
|
742
|
|
|||
Total employee equity-based compensation expense
|
$
|
4,758
|
|
|
$
|
4,137
|
|
|
$
|
4,377
|
|
|
|
|
|
|
|
||||||
Deferred compensation stock equivalent units expense
|
$
|
376
|
|
|
$
|
345
|
|
|
$
|
1,265
|
|
|
|
|
|
|
|
||||||
Total tax benefit recognized for shared-based payment awards
|
$
|
319
|
|
|
$
|
280
|
|
|
$
|
71
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
Stock price as of valuation date
|
$
|
40.00
|
|
|
$
|
39.76
|
|
|
$
|
45.31
|
|
Risk-free rate
|
1.07
|
%
|
|
0.72
|
%
|
|
0.40
|
%
|
(Dollars in thousands, except
per share amounts)
|
2015
|
|
2014
|
|
2013
|
|||||||||||||||
SHARES
|
WEIGHTED AVG.
GRANT DATE
FAIR VALUE
|
|
SHARES
|
WEIGHTED AVG.
GRANT DATE
FAIR VALUE
|
|
SHARES
|
WEIGHTED AVG.
GRANT DATE
FAIR VALUE
|
|||||||||||||
Unvested shares outstanding at January 1
|
160,233
|
|
$
|
53.86
|
|
|
155,814
|
|
$
|
48.73
|
|
|
160,214
|
|
$
|
44.50
|
|
|||
Granted
|
78,974
|
|
36.71
|
|
|
87,441
|
|
45.57
|
|
|
83,111
|
|
62.78
|
|
||||||
Vested
|
(77,078
|
)
|
62.78
|
|
|
(76,202
|
)
|
34.24
|
|
|
(71,861
|
)
|
55.84
|
|
||||||
Forfeited
|
(1,080
|
)
|
41.29
|
|
|
(6,820
|
)
|
49.75
|
|
|
(15,650
|
)
|
47.32
|
|
||||||
Unvested shares outstanding at December 31
|
161,049
|
|
41.26
|
|
|
160,233
|
|
53.86
|
|
|
155,814
|
|
48.73
|
|
||||||
Total grant date fair value of share awards vested during the year
|
$
|
4,839
|
|
|
|
$
|
2,609
|
|
|
|
$
|
4,013
|
|
|
||||||
Aggregate intrinsic value of unvested share awards at December 31
|
$
|
4,697
|
|
|
|
$
|
6,709
|
|
|
|
$
|
6,504
|
|
|
|
2015
|
|
2014
|
|
2013
|
|||||||||||||||
|
SHARES
|
WEIGHTED AVE. GRANT DATE
FAIR VALUE
|
|
SHARES
|
WEIGHTED AVE. GRANT DATE
FAIR VALUE
|
|
SHARES
|
WEIGHTED AVE. GRANT DATE
FAIR VALUE
|
||||||||||||
Unvested shares outstanding at January 1
|
32,455
|
|
$
|
42.24
|
|
|
37,461
|
|
$
|
38.69
|
|
|
40,219
|
|
$
|
34.82
|
|
|||
Granted
|
27,820
|
|
39.99
|
|
|
19,599
|
|
40.51
|
|
|
23,449
|
|
44.41
|
|
||||||
Vested
|
(15,385
|
)
|
44.50
|
|
|
(21,333
|
)
|
34.46
|
|
|
(19,796
|
)
|
38.19
|
|
||||||
Forfeited
|
(359
|
)
|
40.27
|
|
|
(3,272
|
)
|
42.06
|
|
|
(6,411
|
)
|
36.91
|
|
||||||
Unvested shares outstanding at December 31
|
44,531
|
|
40.95
|
|
|
32,455
|
|
42.24
|
|
|
37,461
|
|
38.69
|
|
||||||
Total grant date fair value of RSU awards vested during the year (in thousands)
|
$
|
289
|
|
|
|
$
|
735
|
|
|
|
$
|
756
|
|
|
||||||
Aggregate intrinsic value of unvested RSU awards at December 31 (in thousands)
|
$
|
1,347
|
|
|
|
$
|
1,359
|
|
|
|
$
|
2,511
|
|
|
|
2014
|
|
2013
|
||||||
|
SHARES
|
WEIGHTED AVG.
EXERCISE PRICE
|
|
SHARES
|
WEIGHTED AVG.
EXERCISE PRICE
|
||||
Outstanding at January 1
|
12,859
|
|
$30.92
|
|
83,827
|
|
$27.46
|
||
Shares exercised
|
(12,859
|
)
|
30.92
|
|
(70,968
|
)
|
26.25
|
||
Outstanding and exercisable at December 31
|
—
|
|
—
|
|
12,859
|
|
30.92
|
||
Total intrinsic value of options exercised during the year (in thousands)
|
$
|
150
|
|
|
|
$
|
1,423
|
|
|
(Dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Current
|
$
|
128
|
|
|
$
|
21,205
|
|
|
$
|
16,352
|
|
Deferred
|
1,097
|
|
|
(2,143
|
)
|
|
(2,754
|
)
|
|||
Net operating loss carryforwards
|
(6,793
|
)
|
|
625
|
|
|
287
|
|
|||
Income tax (benefit) provision
|
$
|
(5,568
|
)
|
|
$
|
19,687
|
|
|
$
|
13,885
|
|
(Dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
U.S. federal statutory income tax
|
$
|
9,151
|
|
|
$
|
38,359
|
|
|
$
|
29,563
|
|
REIT income not subject to federal income tax
|
(14,110
|
)
|
|
(16,812
|
)
|
|
(13,918
|
)
|
|||
Change in valuation allowance
|
488
|
|
|
(1,818
|
)
|
|
(683
|
)
|
|||
State income taxes, net of federal income tax
|
(838
|
)
|
|
2,234
|
|
|
942
|
|
|||
Domestic production activities deduction
|
—
|
|
|
(1,055
|
)
|
|
(1,579
|
)
|
|||
Permanent book-tax differences
|
(70
|
)
|
|
(1,073
|
)
|
|
(384
|
)
|
|||
All other items
|
(189
|
)
|
|
(148
|
)
|
|
(56
|
)
|
|||
Income taxes
|
$
|
(5,568
|
)
|
|
$
|
19,687
|
|
|
$
|
13,885
|
|
Effective tax rate
|
(21.3
|
)%
|
|
18.0
|
%
|
|
16.4
|
%
|
(Dollars in thousands)
|
2015
|
|
2014
|
||||
Deferred tax assets:
|
|
|
|
||||
Pensions
|
$
|
35,066
|
|
|
$
|
31,527
|
|
Other postretirement employee benefits
|
13,834
|
|
|
16,209
|
|
||
Net operating loss carryforwards
|
6,935
|
|
|
142
|
|
||
Inventories
|
2,325
|
|
|
2,720
|
|
||
Tax credits
|
2,123
|
|
|
1,904
|
|
||
Nondeductible accruals
|
2,041
|
|
|
2,033
|
|
||
Incentive compensation
|
2,009
|
|
|
2,544
|
|
||
Employee benefits
|
1,769
|
|
|
1,839
|
|
||
Other
|
116
|
|
|
224
|
|
||
Total deferred tax assets
|
66,218
|
|
|
59,142
|
|
||
Valuation allowance
|
(488
|
)
|
|
—
|
|
||
Deferred tax assets, net of valuation allowance
|
65,730
|
|
|
59,142
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Timber and timberlands, net
|
(5,010
|
)
|
|
(5,120
|
)
|
||
Property, plant and equipment, net
|
(14,120
|
)
|
|
(10,626
|
)
|
||
Total deferred tax liabilities
|
(19,130
|
)
|
|
(15,746
|
)
|
||
Net deferred tax assets
|
$
|
46,600
|
|
|
$
|
43,396
|
|
Jurisdiction
|
YEARS
|
||
Federal
|
2012
|
-
|
2015
|
Arkansas
|
2012
|
-
|
2015
|
Michigan
|
2011
|
-
|
2015
|
Minnesota
|
2011
|
-
|
2015
|
Idaho
|
2012
|
-
|
2015
|
(Dollars in thousands)
|
|
||
2016
|
$
|
3,601
|
|
2017
|
3,496
|
|
|
2018
|
1,464
|
|
|
2019
|
717
|
|
|
2020
|
252
|
|
|
2021 and thereafter
|
88
|
|
|
Total
|
$
|
9,618
|
|
(Dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Resource
|
$
|
263,875
|
|
|
$
|
252,581
|
|
|
$
|
238,228
|
|
Wood Products
|
336,214
|
|
|
376,239
|
|
|
366,015
|
|
|||
Real Estate
|
28,989
|
|
|
40,460
|
|
|
26,160
|
|
|||
|
629,078
|
|
|
669,280
|
|
|
630,403
|
|
|||
Elimination of intersegment revenues - Resource
1
|
(53,742
|
)
|
|
(62,330
|
)
|
|
(60,114
|
)
|
|||
Total consolidated revenues
|
$
|
575,336
|
|
|
$
|
606,950
|
|
|
$
|
570,289
|
|
Operating Income (loss):
|
|
|
|
|
|
||||||
Resource
|
$
|
76,350
|
|
|
$
|
84,976
|
|
|
$
|
73,425
|
|
Wood Products
|
(5,235
|
)
|
|
52,442
|
|
|
58,892
|
|
|||
Real Estate
|
16,849
|
|
|
26,945
|
|
|
18,266
|
|
|||
Eliminations and adjustments
|
3,283
|
|
|
(190
|
)
|
|
(907
|
)
|
|||
|
91,247
|
|
|
164,173
|
|
|
149,676
|
|
|||
Corporate
|
(32,340
|
)
|
|
(31,667
|
)
|
|
(42,078
|
)
|
|||
Operating income
|
58,907
|
|
|
132,506
|
|
|
107,598
|
|
|||
Interest expense, net
|
(32,761
|
)
|
|
(22,909
|
)
|
|
(23,132
|
)
|
|||
Income before income taxes
|
$
|
26,146
|
|
|
$
|
109,597
|
|
|
$
|
84,466
|
|
|
|
|
|
|
|
||||||
Depreciation, depletion and amortization:
|
|
|
|
|
|
||||||
Resource
|
$
|
28,807
|
|
|
$
|
17,847
|
|
|
$
|
18,103
|
|
Wood Products
|
6,810
|
|
|
6,176
|
|
|
6,194
|
|
|||
Real Estate
|
56
|
|
|
59
|
|
|
56
|
|
|||
|
35,673
|
|
|
24,082
|
|
|
24,353
|
|
|||
Corporate
|
2,432
|
|
|
2,667
|
|
|
2,609
|
|
|||
Total depreciation, depletion and amortization
|
$
|
38,105
|
|
|
$
|
26,749
|
|
|
$
|
26,962
|
|
Basis of real estate sold:
|
|
|
|
|
|
||||||
Real Estate
|
$
|
7,394
|
|
|
$
|
9,355
|
|
|
$
|
3,536
|
|
Elimination and adjustments
|
(382
|
)
|
|
(709
|
)
|
|
(632
|
)
|
|||
Total basis of real estate sold
|
$
|
7,012
|
|
|
$
|
8,646
|
|
|
$
|
2,904
|
|
Assets:
|
|
|
|
|
|
||||||
Resource and Real Estate
2
|
$
|
837,630
|
|
|
$
|
847,873
|
|
|
$
|
476,628
|
|
Wood Products
|
131,103
|
|
|
118,674
|
|
|
115,664
|
|
|||
|
968,733
|
|
|
966,547
|
|
|
592,292
|
|
|||
Corporate
|
47,879
|
|
|
65,199
|
|
|
84,910
|
|
|||
Total consolidated assets
|
$
|
1,016,612
|
|
|
$
|
1,031,746
|
|
|
$
|
677,202
|
|
Capital Expenditures:
3
|
|
|
|
|
|
||||||
Resource and Real Estate
|
$
|
13,681
|
|
|
$
|
11,116
|
|
|
$
|
12,449
|
|
Wood Products
|
18,482
|
|
|
12,551
|
|
|
9,013
|
|
|||
|
32,163
|
|
|
23,667
|
|
|
21,462
|
|
|||
Corporate
|
569
|
|
|
565
|
|
|
1,131
|
|
|||
Total capital expenditures
|
$
|
32,732
|
|
|
$
|
24,232
|
|
|
$
|
22,593
|
|
1
|
Intersegment revenues were based on prevailing market prices of logs sold by our Resource segment to the Wood Products segment.
|
2
|
Assets are shown on a combined basis for the Resource and Real Estate segments, as we do not produce information separately for those segments for internal purposes.
|
3
|
Excludes acquisition of timber and timberlands.
|
(Dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
||||||
United States
|
$
|
573,398
|
|
|
$
|
601,738
|
|
|
$
|
558,138
|
|
Canada
|
851
|
|
|
2,618
|
|
|
9,645
|
|
|||
Mexico
|
919
|
|
|
2,594
|
|
|
2,506
|
|
|||
Other
|
168
|
|
|
—
|
|
|
—
|
|
|||
Total consolidated revenues
|
$
|
575,336
|
|
|
$
|
606,950
|
|
|
$
|
570,289
|
|
|
THREE MONTHS ENDED
|
||||||||||||||||||||||||||||||
(Dollars in thousands, except per share amounts)
|
MARCH 31
|
|
JUNE 30
|
|
SEPTEMBER 30
|
|
DECEMBER 31
|
||||||||||||||||||||||||
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|||||||||||||||||
Revenues
|
$
|
134,125
|
|
|
$
|
139,579
|
|
|
$
|
128,747
|
|
|
$
|
143,919
|
|
|
$
|
174,475
|
|
|
$
|
177,215
|
|
|
$
|
137,989
|
|
|
$
|
146,237
|
|
Operating income
|
$
|
14,027
|
|
|
$
|
31,309
|
|
|
$
|
7,311
|
|
|
$
|
29,725
|
|
|
$
|
27,714
|
|
|
$
|
44,869
|
|
|
$
|
9,855
|
|
|
$
|
26,603
|
|
Net income
|
$
|
5,656
|
|
|
$
|
20,350
|
|
|
$
|
711
|
|
|
$
|
16,270
|
|
|
$
|
21,798
|
|
|
$
|
33,154
|
|
|
$
|
3,549
|
|
|
$
|
20,136
|
|
Net income per share
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic
|
$
|
0.14
|
|
|
$
|
0.50
|
|
|
$
|
0.02
|
|
|
$
|
0.40
|
|
|
$
|
0.53
|
|
|
$
|
0.81
|
|
|
$
|
0.09
|
|
|
$
|
0.49
|
|
Diluted
|
$
|
0.14
|
|
|
$
|
0.50
|
|
|
$
|
0.02
|
|
|
$
|
0.40
|
|
|
$
|
0.53
|
|
|
$
|
0.81
|
|
|
$
|
0.09
|
|
|
$
|
0.49
|
|
1
|
Per share amounts are computed independently for each of the quarters presented. Therefore, the sum of the quarterly per share amounts may not equal the total computed for the year.
|
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)
|
See Exhibits (3)(a) and (3)(b). The Registrant also undertakes to furnish to the Commission, upon request, any instrument defining the rights of holders of long-term debt.
|
|
|
(4)(a)*
|
Indenture, dated as of November 3, 2009, between the Registrant and U.S. Bank National Association, as trustee, filed as Exhibit 4.1 to the Current Report on Form 8-K filed by the Registrant on November 9, 2009.
|
|
|
(4)(a)(i)*
|
Form of 7 1/2% Senior Notes due 2019 (included as Exhibit A to the Indenture filed as Exhibit 4(a)).
|
|
|
(4)(a)(ii)*
|
Registration Rights Agreement, dated as of November 3, 2009, between the Registrant and the parties named therein, filed as Exhibit 4.1 to the Current Report on Form 8-K filed by the Registrant on November 9, 2009.
|
|
|
(4)(b)*
|
Indenture, dated as of November 27, 1990, between Original Potlatch and Deutsche Bank National Trust Company (successor in interest to Bankers Trust Company of California, National Association), as trustee, filed as Exhibit (4)(a) to the Original Potlatch Annual Report on Form 10-K for the fiscal year ended December 31, 2000. (SEC File No. 001-05313)
|
|
|
(4)(b)(i)*
|
Officer’s Certificate, dated January 24, 1991, filed as Exhibit (4)(a)(i) to the Original Potlatch Annual Report on Form 10-K for the fiscal year ended December 31, 2000. (SEC File No. 001-05313)
|
|
|
(4)(b)(ii)*
|
Officer’s Certificate, dated December 12, 1991, filed as Exhibit (4)(a)(i) to the Original Potlatch Annual Report on Form 10-K for the fiscal year ended December 31, 1996. (SEC File No. 001-05313)
|
|
|
(10)(a)1*
|
Potlatch Corporation Management Performance Award Plan, as amended effective December 2, 2004, filed as Exhibit (10)(a) to the Annual Report on Form 10-K filed by Original Potlatch for the fiscal year ended December 31, 2004. (SEC File No. 001-05313)
|
|
|
(10)(a)(i)1*
|
Amendment to Potlatch Corporation Management Performance Award Plan, filed as Exhibit 10.6 to the Current Report on Form 8-K filed by the Registrant on December 11, 2008.
|
|
|
(10)(b)1*
|
Potlatch Corporation Severance Program for Executive Employees, amended and restated effective February 14, 2014, filed as Exhibit (10)(b) to the Annual Report on Form 10-K for the fiscal year ended December 31, 2013.
|
|
|
(10)(c)1*
|
Potlatch Corporation Salaried Employees’ Supplemental Benefit Plan, as amended and restated effective January 1, 1989, and as amended through May 24, 2005, filed as Exhibit (10)(d) to the Quarterly Report on Form 10-Q filed by Original Potlatch for the quarter ended June 30, 2005.
|
|
|
(10)(c)(i)1*
|
Amendment, effective as of January 1, 1998, to Plan described in Exhibit (10)(d), filed as Exhibit (10)(d)(i) to the Annual Report on Form 10-K filed by Original Potlatch for the fiscal year ended December 31, 2003. (SEC File No. 001-5313)
|
|
|
(10)(c)(ii)1*
|
Amendment, effective as of December 5, 2008, to Plan described in Exhibit (10)(d), filed as Exhibit 10.5 to the Current Report on Form 8-K filed by the Registrant on December 11, 2008.
|
|
|
(10)(d)1*
|
Potlatch Corporation Deferred Compensation Plan for Directors, as amended through May 24, 2005, filed as Exhibit (10)(g) to the Quarterly Report on Form 10-Q filed by Original Potlatch for the quarter ended June 30, 2005.
|
|
|
(10)(e)1*
|
Potlatch Corporation Deferred Compensation Plan II for Directors, as amended and restated effective May 8, 2014, filed as Exhibit 10.2 to the Current Report on Form 8-K filed by the Registrant on May 13, 2014.
|
|
|
(10)(f)1*
|
Potlatch Corporation Benefits Protection Trust Agreement, amended and restated effective February 14, 2014, filed as Exhibit (10)(h) to the Annual Report on Form 10-K for the fiscal year ended December 31, 2013.
|
|
|
(10)(g)1*
|
Summary of Director Compensation, effective as of May 8, 2014, filed as Exhibit 10.1 to the Current Report on Form 8-K filed by the Registrant on May 13, 2014.
|
|
|
(10)(h)1*
|
Form of Indemnification Agreement with each director of the Registrant and with each executive officer of the Registrant, filed as Exhibit 10.1 to the Current Report on Form 8-K filed by the Registrant on September 23, 2009.
|
|
|
(10)(i)1*
|
Potlatch Corporation 2005 Stock Incentive Plan, as amended and restated May 19, 2006, filed as Exhibit (10)(r) to the Quarterly Report on Form 10-Q filed by the Registrant for the quarter ended June 30, 2006, and as further amended and restated effective September 16, 2006, filed as Exhibit (10)(e) to the Current Report on Form 8-K filed by the Registrant on September 21, 2006.
|
|
|
(10)(i)(i)1*
|
Form of Restricted Stock Unit Agreement (2005 Stock Incentive Plan), as amended and restated May 19, 2006, to be used for restricted stock unit awards to be granted subsequent to May 19, 2006, filed as Exhibit (10)(r)(i) to the Quarterly Report on Form 10-Q filed by the Registrant for the quarter ended June 30, 2006.
|
|
|
(10)(i)(ii)1*
|
Form of Performance Share Agreement (2005 Stock Incentive Plan), as amended and restated May 19, 2006, to be used for performance share awards to be granted subsequent to May 19, 2006, filed as Exhibit (10)(r)(ii) to the Quarterly Report on Form 10-Q filed by the Registrant for the quarter ended June 30, 2006, and as further amended on January 17, 2007, filed as Exhibit (10)(r)(ii) to the Current Report on Form 8-K filed by the Registrant on January 19, 2007.
|
|
|
(10)(j)1*
|
Potlatch Corporation 2014 Stock Incentive Plan, filed as Exhibit 10.C to the Quarterly Report on Form 10-Q filed by the Registrant for the quarter ended June 30, 2014.
|
|
|
(10)(j)(i)1*
|
Form of 2014 Performance Share Award Notice and Agreement filed as Exhibit 10.1 to the Current Report on Form 8-K filed by the Registrant on May 9, 2014.
|
|
|
(10)(j)(ii)1*
|
Form of 2014 RSU Award Notice and Award Agreement filed as Exhibit 10.3 to the Current Report on Form 8-K filed by the Registrant on May 9, 2014.
|
|
|
(10)(k)(i)1*
|
Form of 2015 Performance Share Award Notice and Agreement filed as Exhibit 10.2 to the Current Report on Form 8-K filed by the Registrant on February 18, 2015.
|
|
|
(10)(k)(i)2*
|
Form of 2015 RSU Award Notice and Agreement filed as Exhibit 10.1 to the Current Report on Form 8-K filed by the Registrant on February 18, 2015.
|
|
|
(10)(l)(iv)1*
|
Potlatch Corporation Management Performance Award Plan II, as amended through February 20, 2008, filed as Exhibit (10)(r)(iv) to the Current Report on Form 8-K filed by the Registrant on February 26, 2008.
|
|
|
(10)(l)(v)1*
|
Amendment to Potlatch Corporation Management Performance Award Plan II, effective June 1, 2008, filed as Exhibit (10)(r)(v) to the Current Report on Form 8-K filed by the Registrant on May 21, 2008.
|
|
|
(10)(m)1*
|
Potlatch Corporation Salaried Supplemental Benefit Plan II, effective December 5, 2008, and amended and restated as of February 14, 2014, filed as Exhibit (10)(t) to the Annual Report on Form 10-K for the fiscal year ended December 31, 2013.
|
|
|
(10)(n)(i)1*
|
Potlatch Corporation Annual Incentive Plan, amended and restated effective January 1, 2014, filed as Exhibit (10)(w)(i) to the Annual Report on Form 10-K for the fiscal year ended December 31, 2013.
|
|
|
(10)(o)1*
|
Potlatch Corporation Management Deferred Compensation Plan, effective June 1, 2008, amended and restated on February 14, 2014, filed as Exhibit (10)(x) to the Annual Report on Form 10-K for the fiscal year ended December 31, 2013.
|
|
|
(10)(p) *
|
Amended and Restated Credit Agreement, dated as of August 12, 2014, among the Registrant and its wholly owned subsidiaries, as borrowers, KeyBank National Association, as administrative agent, swing line lender and L/C issuer, the Guarantors from time to time party thereto and the Lenders from time to time party thereto, filed as Exhibit 10.1 to the Current Report on Form 8-K filed by the Registrant on August 14, 2014.
|
|
|
(10)(q) *
|
First Amendment to the Amended and Restated Credit Agreement dated January 16, 2015, filed as Exhibit (10)(c) to the Quarterly Report on Form 10-Q for the quarter ended March 31, 2015.
|
|
|
(10)(r)
|
Second Amendment to the Amended and Restated Credit Agreement dated November 9, 2015.
|
|
|
(10)(s) *
|
Amended and Restated Term Loan Agreement, dated as of December 5, 2014, by and among the Registrant and Potlatch Forest Holdings, Inc., as borrowers, Northwest Farm Credit Services, PCA as administrative agent, the Guarantors from time to time party thereto and the Lenders from time to time party thereto, filed as Exhibit 10.1 to the Current Report on Form 8-K filed by the Registrant on December 9, 2014.
|
|
|
(12)
|
Computation of Ratio of Earnings to Fixed Charges.
|
|
|
(21)
|
Potlatch Corporation Subsidiaries.
|
|
|
(23)
|
Consent of Independent Registered Public Accounting Firm.
|
|
|
(24)
|
Powers of Attorney.
|
|
|
(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 Annual Report on Form 10-K for the year ended December 31, 2015, filed on February 12, 2016, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Statements of Income for the years ended December 31, 2015, 2014 and 2013, (ii) the Consolidated Statements of Comprehensive Income for the years ended December 31, 2015, 2014 and 2013, (iii) the Consolidated Balance Sheets at December 31, 2015 and 2014, (iv) the Consolidated Statements of Cash Flows for the years ended December 31, 2015, 2014 and 2013, (v) the Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2015, 2014 and 2013 and (vi) the Notes to Consolidated Financial Statements.
|
*
|
Incorporated by reference.
|
1
|
Management contract or compensatory plan, contract or arrangement.
|
POTLATCH CORPORATION
|
|
(Registrant)
|
|
By
|
/S/ MICHAEL J. COVEY
|
|
Michael J. Covey
|
|
Chairman of the Board and Chief Executive Officer
|
BY
|
/S/ MICHAEL J. COVEY
|
Director, Chairman of the Board, and Chief Executive Officer
(Principal Executive Officer)
|
|
Michael J. Covey
|
|
|
|
|
BY
|
/S/ ERIC J. CREMERS
|
Director, President and Chief Operating Officer
|
|
Eric J. Cremers
|
|
|
|
|
BY
|
/S/ JERALD W. RICHARDS
|
Vice President and Chief Financial Officer
|
|
Jerald W. Richards
|
|
|
|
|
BY
|
/S/ STEPHANIE A. BRADY
|
Controller (Principal Accounting Officer)
|
|
Stephanie A. Brady
|
|
|
|
|
|
*
|
Director
|
|
Linda M. Breard
|
|
|
|
|
|
*
|
Director
|
|
Boh A. Dickey
|
|
|
|
|
|
*
|
Director
|
|
William L. Driscoll
|
|
|
|
|
|
*
|
Director
|
|
Charles P. Grenier
|
|
|
|
|
|
*
|
Director
|
|
John S. Moody
|
|
|
|
|
|
*
|
Director
|
|
Lawrence S. Peiros
|
|
|
|
|
|
*
|
Director
|
|
Gregory L. Quesnel
|
|
|
|
|
*By
|
/S/ LORRIE D. SCOTT
|
|
Lorrie D. Scott
|
|
(Attorney-in-fact)
|
(Dollars in thousands)
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
Income from continuing operations before income taxes
|
$
|
26,146
|
|
|
$
|
109,597
|
|
|
$
|
84,466
|
|
|
$
|
59,403
|
|
|
$
|
44,411
|
|
Add:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
31,566
|
|
|
21,834
|
|
|
21,885
|
|
|
23,727
|
|
|
25,216
|
|
|||||
Capitalized interest
|
206
|
|
|
86
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Interest portion of rental expense
|
1,517
|
|
|
1,332
|
|
|
1,191
|
|
|
1,024
|
|
|
822
|
|
|||||
Discount and debt expense amortization
|
1,194
|
|
|
1,361
|
|
|
1,498
|
|
|
1,974
|
|
|
2,817
|
|
|||||
Earnings available for fixed charges
|
60,629
|
|
|
134,210
|
|
|
109,040
|
|
|
86,128
|
|
|
73,266
|
|
|||||
Fixed charges:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
31,566
|
|
|
21,834
|
|
|
21,885
|
|
|
23,727
|
|
|
25,216
|
|
|||||
Capitalized interest
|
206
|
|
|
86
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Interest portion of rental expense
|
1,517
|
|
|
1,332
|
|
|
1,191
|
|
|
1,024
|
|
|
822
|
|
|||||
Discount and debt expense amortization
|
1,194
|
|
|
1,361
|
|
|
1,498
|
|
|
1,974
|
|
|
2,817
|
|
|||||
Total fixed charges
|
34,483
|
|
|
24,613
|
|
|
24,574
|
|
|
26,725
|
|
|
28,855
|
|
|||||
Ratio of earnings to fixed charges
|
1.8
|
|
|
5.5
|
|
|
4.4
|
|
|
3.2
|
|
|
2.5
|
|
Name
|
State in Which Organized
|
PFHI Idaho Investment LLC
|
Delaware
|
PFPC McCall Investment LLC
|
Delaware
|
Potlatch Forest Holdings, Inc.
|
Delaware
|
Potlatch Land & Lumber, LLC
|
Delaware
|
Potlatch Timberlands LLC
|
Delaware
|
Potlatch Minnesota Timberlands, LLC
|
Delaware
|
Potlatch Lake States Timberlands, LLC
|
Delaware
|
Potlatch TRS Arkansas, LLC
|
Delaware
|
Potlatch TRS Idaho, LLC
|
Delaware
|
Potlatch TRS Minnesota, LLC
|
Delaware
|
Date:
|
February 12, 2016
|
/S/ MICHAEL J. COVEY
|
|
|
Michael J. Covey
|
|
|
Chairman and Chief Executive Officer
|
Date:
|
February 12, 2016
|
/S/ JERALD W. RICHARDS
|
|
|
Jerald W. Richards
|
|
|
Vice President and Chief Financial Officer
|
(1)
|
the Annual Report of the Company on Form 10-K for the period ended
December 31, 2015
, 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
|
Chairman and Chief Executive Officer
|
February 12, 2016
|
(1)
|
the Annual Report of the Company on Form 10-K for the period ended
December 31, 2015
, 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
|
February 12, 2016
|