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Potlatch Announces Sale of Boardman, Oregon, Poplar Tree Farm to Private Equity Fund

Press release from the issuing company

SPOKANE, Wash.-- 3/30/07 -- Potlatch Corporation, a real estate investment trust (REIT), has announced the sale of the company's 17,000-acre hybrid poplar tree farm in Boardman, Oregon, to a private-equity tree-farm investment fund for $65 million. A definitive purchase agreement was signed today and closing is expected during the second quarter of 2007. Potlatch expects to incur an after tax book loss of approximately $33.5 million on the sale, which will be recorded in the first quarter of this year. Potlatch intends to apply the proceeds from the sale to its recent 76,000-acre Wisconsin forestland acquisition through a tax efficient 1031 like-kind exchange. This 17,000-acre property is certified under the stringent forest practices guidelines of the Forest Stewardship Council (FSC), along with the remaining 1.5 million acres under Potlatch ownership. Development of the unique Boardman plantation was started in 1992 to supplement Potlatch's fiber needs, but due to fluctuating chip prices and availability in intervening years, the plantation's management model was changed to support growth of hardwood sawlogs. Potlatch's goal has been to find an operator with specific expertise in manufacturing and marketing poplar products. "After spending the past year evaluating the best path forward, and meeting with a number of interested poplar-focused operators, we are pleased to have reached an agreement with a global leader in the hybrid poplar industry who we believe is better positioned to deliver greater value from the operation," said Chairman, President and CEO Michael J. Covey. "We are very proud of the advances in technology and silviculture that were developed by our employees at Boardman, and are pleased that the new owner is committed to continuing and enhancing these developments."