SPOKANE, Wash.--Feb. 6, 2006-- Potlatch Corporation today reported earnings for the fourth quarter of 2005, compared to a loss from continuing operations for the fourth quarter of 2004, due in part to improved results for its Resource and Consumer Products operating segments. Fourth quarter 2004 results were negatively affected by a $25.2 million net pre-tax charge resulting from the early repayment of approximately $282 million of debt. The company reported earnings of $9.9 million, or $.34 per diluted common share, for the fourth quarter of 2005, compared to a loss from continuing operations of $9.7 million, or $.33 per diluted common share, for the fourth quarter of 2004. Including discontinued operations, the company reported a net loss of $10.0 million, or $.34 per diluted common share, for 2004's fourth quarter. Discontinued operations in 2004 consisted of our oriented strand board (OSB) operations. Net sales for the fourth quarter of 2005 were $387.6 million, compared to net sales from continuing operations of $321.6 million recorded in the fourth quarter of 2004. Net earnings for the year ended December 31, 2005 totaled $33.0 million, or $1.13 per diluted common share, compared with net earnings from continuing operations for the year ended December 31, 2004 of $15.3 million, or $.52 per diluted common share. Including discontinued operations, net earnings for 2004 totaled $271.2 million, or $9.19 per diluted common share. Net sales for 2005 were $1.5 billion, compared with net sales from continuing operations of $1.4 billion for 2004. Results for the fourth quarter of 2005 included $4.2 million in non-recurring costs associated with our conversion to a real estate investment trust (REIT), which became effective January 1, 2006. For the year, total costs associated with the REIT conversion were $5.9 million. Results for the fourth quarter of 2005 were favorably affected by an adjustment to our effective income tax rate, which was due primarily to the application of tax credits. The Resource segment reported operating income of $28.3 million for the fourth quarter of 2005, compared to $20.9 million earned in the fourth quarter of 2004. Higher income from land sales, which totaled $15.4 million in the fourth quarter of 2005 compared with $5.3 million in 2004's fourth quarter, was responsible for the favorable comparison to the prior year quarter. Income from land sales for the 2005 quarter included $6.1 million received from the sale of conservation easements on portions of the company's Idaho and Minnesota timberlands, compared with no income from the sale of conservation easements in the fourth quarter of 2004. Lower results for our Boardman, Oregon, hybrid poplar operation, which transitioned from a development stage to an operating stage during the fourth quarter of 2005, partially offset the higher income from land sales. Operating income for the Wood Products segment was $0.3 million for the fourth quarter of 2005, compared to income of $6.4 million recorded in the fourth quarter of 2004. "The lower earnings were primarily due to higher log costs," noted L. Pendleton Siegel, Potlatch chairman and chief executive officer. Lower lumber prices combined with higher energy and freight costs also contributed to the lower income in the fourth quarter of 2005. The Pulp and Paperboard segment reported an operating loss of $4.5 million for 2005's fourth quarter, compared with operating income of $0.7 million for the fourth quarter of 2004. "Increased shipments and higher selling prices for paperboard, combined with increased pulp shipments to external customers, were more than offset by higher maintenance, chemical and energy costs," Siegel said. For the fourth quarter of 2005, the Consumer Products segment reported operating income of $7.2 million, compared to an operating loss of $0.1 million for 2004's fourth quarter. "Higher selling prices for our consumer tissue products were responsible for the improved operating results," Siegel noted. "These favorable comparisons were partially offset by decreased shipments and higher energy costs," he remarked. The continued high cost of petroleum and natural gas had a negative effect on 2005 results. Energy costs for the entire company were approximately $5 million higher for the fourth quarter of 2005 compared to the fourth quarter of 2004. In addition, the high petroleum costs negatively affected other costs, especially for chemicals and transportation, Interest expense for the fourth quarter of 2005 totaled $7.3 million, compared to $9.0 million charged against results for the fourth quarter of 2004. The reduction in interest expense was the result of the repayment of the approximately $282 million in debt during the fourth quarter of 2004, using a portion of the proceeds from the sale of our OSB mills.