SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 11-K
ANNUAL REPORT
Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended December 31, 1993
Potlatch Corporation Savings Plan for Hourly Employees of the
Pulp and Paperboard Arkansas Division, Cypress Bend Mill
Potlatch Corporation
One Maritime Plaza, San Francisco, California 94111
<PAGE>
POTLATCH CORPORATION SAVINGS PLAN FOR HOURLY EMPLOYEES OF THE
PULP AND PAPERBOARD ARKANSAS DIVISION, CYPRESS BEND MILL
Table of Contents
-----------------
Page Numbers
------------
Independent Auditors' Report 1
Statements of Financial Condition 2
Statements of Income and Changes in Plan Equity 3 - 4
Notes to Financial Statements 5 - 6
Item 30a - Schedule of Assets Held for Investment Purposes 7
Item 30d - Schedule of Reportable Transactions 8
Signatures 9
Exhibit Index 10
<PAGE>
Independent Auditors' Report
----------------------------
Potlatch Corporation, Plan Administrator
Potlatch Corporation Savings Plan for Hourly
Employees of the Pulp and Paperboard
Arkansas Division, Cypress Bend Mill:
We have audited the statements of financial condition of Potlatch Corporation
Savings Plan for Hourly Employees of the Pulp and Paperboard Arkansas
Division, Cypress Bend Mill as of December 31, 1993 and 1992 and the related
statements of income and changes in plan equity for the years then ended.
These financial statements are the responsibility of the Plan's management.
Our responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the aforementioned financial statements present fairly the
financial position of Potlatch Corporation Savings Plan for Hourly Employees
of the Pulp and Paperboard Arkansas Division, Cypress Bend Mill as of
December 31, 1993 and 1992 and the income and changes in plan equity for the
years then ended in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information
included in Schedules I and II is presented for the purpose of additional
analysis and is not a required part of the basic financial statements, but is
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental information has been subjected to the
auditing procedures applied in the audits of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
KPMG PEAT MARWICK
April 8, 1994
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<PAGE>
POTLATCH CORPORATION SAVINGS PLAN FOR HOURLY
EMPLOYEES OF THE PULP AND PAPERBOARD
ARKANSAS DIVISION, CYPRESS BEND MILL
Statements of Financial Condition
At December 31, 1993 and 1992
<TABLE>
<CAPTION>
1993 1992 1993 1992
---- ---- ---- ----
<S> <C> <C> <S> <C> <C>
Assets: Liabilities and Equity:
Fixed Income Fund: Fixed Income Fund:
Accounts receivable
Participating employees $ 5,755 $ 5,868
Putnam Fiduciary Trust Company
GIC Fund 1,463,700 1,303,343 Fund equity $1,469,455 $1,309,211
---------- ---------- ---------- ----------
1,469,455 1,309,211 1,469,455 1,309,211
---------- ---------- ---------- ----------
George Putnam Fund: George Putnam Fund:
Accounts receivable
Participating employees 1,226 933
George Putnam Fund of Boston 62,741 3,179 Fund equity 63,967 4,112
---------- ---------- ---------- ----------
63,967 4,112 63,967 4,112
---------- ---------- ---------- ----------
Convertible Fund: Convertible Fund:
Accounts receivable
Participating employees 1,507 1,196
Putnam Convertible Income-
Growth Fund 628,878 492,680 Fund equity 630,385 493,876
---------- ---------- ---------- ----------
630,385 493,876 630,385 493,876
---------- ---------- ---------- ----------
Growth and Income Fund: Growth and Income Fund:
Accounts receivable
Participating employees 2,603 2,439
Putnam Fund for Growth and
Income 120,407 7,217 Fund equity 123,010 9,656
---------- ---------- ---------- ----------
123,010 9,656 123,010 9,656
---------- ---------- ---------- ----------
Voyager Fund: Voyager Fund:
Accounts receivable
Participating employees 5,046 4,348
Putnam Voyager Fund 250,040 14,341 Fund equity 255,086 18,689
---------- ---------- ---------- ----------
255,086 18,689 255,086 18,689
---------- ---------- ---------- ----------
Stock Fund: Stock Fund:
Cash and equivalents - 338
Accounts receivable:
Participating employees 4,116 3,776
Employer 5,724 3,722
Potlatch Corporation common
stock, 37,191 shares (28,407
shares in 1992) 1,752,646 1,306,710 Fund equity 1,762,536 1,314,546
---------- ---------- ---------- ----------
1,762,536 1,314,546 1,762,536 1,314,546
---------- ---------- ---------- ----------
$4,304,439 $3,150,090 $4,304,439 $3,150,090
========== ========== ========== ==========
The accompanying notes are an integral part of these financial statements.
</TABLE>
-2-
<PAGE>
POTLATCH CORPORATION SAVINGS PLAN FOR HOURLY
EMPLOYEES OF THE PULP AND PAPERBOARD
ARKANSAS DIVISION, CYPRESS BEND MILL
Statements of Income and Changes in Plan Equity
For the Year Ended December 31, 1993
<TABLE>
<CAPTION>
Growth
Fixed George and
Income Putnam Convertible Income Voyager Stock
Fund Fund Fund Fund Fund Fund Total
------ ------ ----------- ------ ------- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Income on fund transactions:
Interest income $ 91,499 $ - $ - $ - $ - $ - $ 91,499
Dividend and other income - 3,516 48,715 6,772 8,688 49,640 117,331
---------- ------- -------- -------- -------- ---------- ----------
91,499 3,516 48,715 6,772 8,688 49,640 208,830
---------- ------- -------- -------- -------- ---------- ----------
Market value appreciation of assets - - 38,979 48 19,605 49,019 107,651
---------- ------- -------- -------- -------- ---------- ----------
Contributions (Note 2):
Employee 222,809 41,491 51,361 91,462 186,101 159,449 752,673
Employer - - - - - 177,877 177,877
---------- ------- -------- -------- -------- ---------- ----------
222,809 41,491 51,361 91,462 186,101 337,326 930,550
---------- ------- -------- -------- -------- ---------- ----------
Transfers from other funds 6,161 17,269 19,653 17,548 26,334 73,966 160,931
---------- ------- -------- -------- -------- ---------- ----------
Total increases 320,469 62,276 158,708 115,830 240,728 509,951 1,407,962
---------- ------- -------- -------- -------- ---------- ----------
Less distributions, forfeitures and
transfers to other accounts:
Distributions to participating
employees:
Cash 39,995 152 2,834 789 3,205 22,553 69,528
Market value of shares distributed
in settlement of employees' accounts - - - - - 21,875 21,875
Transfers to other funds 120,230 990 19,365 1,687 1,126 17,533 160,931
---------- ------- -------- -------- -------- ---------- ----------
160,225 1,142 22,199 2,476 4,331 61,961 252,334
---------- ------- -------- -------- -------- ---------- ----------
Market value depreciation of assets - 1,279 - - - - 1,279
---------- ------- -------- -------- -------- ---------- ----------
Total decreases 160,225 2,421 22,199 2,476 4,331 61,961 253,613
---------- ------- -------- -------- -------- ---------- ----------
Net increase in equity 160,244 59,855 136,509 113,354 236,397 447,990 1,154,349
Equity at beginning of period 1,309,211 4,112 493,876 9,656 18,689 1,314,546 3,150,090
---------- ------- -------- -------- -------- ---------- ----------
Equity at end of period $1,469,455 $63,967 $630,385 $123,010 $255,086 $1,762,536 $4,304,439
========== ======= ======== ======== ======== ========== ==========
The accompanying notes are an integral part of these financial statements.
</TABLE>
-3-
<PAGE>
POTLATCH CORPORATION SAVINGS PLAN FOR HOURLY
EMPLOYEES OF THE PULP AND PAPERBOARD
ARKANSAS DIVISION, CYPRESS BEND MILL
Statements of Income and Changes in Plan Equity
For the Year Ended December 31, 1992
<TABLE>
<CAPTION> Growth
Fixed George and
Income Putnam Convertible Income Voyager Stock
Fund Fund Fund Fund Fund Fund Total
------ ------ ----------- ------ ------- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Income on fund transactions:
Interest income $ 79,660 $ - $ 46 $ - $ - $ 349 $ 80,055
Dividend and other income - - 23,625 - 364 35,632 59,621
---------- ------ -------- ------ ------- ---------- ----------
79,660 - 23,671 - 364 35,981 139,676
---------- ------ -------- ------ ------- ---------- ----------
Market value appreciation of assets 10 1 55,255 59 - 176,566 231,891
---------- ------ -------- ------ ------- ---------- ----------
Contributions (Note 2):
Employee 295,648 4,111 86,112 9,597 18,454 144,828 558,750
Employer - - - - - 133,332 133,332
---------- ------ -------- ------ ------- ---------- ----------
295,648 4,111 86,112 9,597 18,454 278,160 692,082
---------- ------ -------- ------ ------- ---------- ----------
Transfers from other funds 15,656 - 18,788 - - 24,783 59,227
---------- ------ -------- ------ ------- ---------- ----------
Total increases 390,974 4,112 183,826 9,656 18,818 515,490 1,122,876
---------- ------ -------- ------ ------- ---------- ----------
Less distributions, forfeitures and
transfers to other accounts:
Cash distributions to participating
employees 13,738 - 13,745 - - 15,335 42,818
Forfeitures and other adjustments
to employer contributions - - - - - 340 340
Transfers to other funds 23,894 - 34,993 - - 340 59,227
---------- ------ -------- ------ ------- ---------- ----------
37,632 - 48,738 - - 16,015 102,385
---------- ------ -------- ------ ------- ---------- ----------
Market value depreciation of assets - - - - 129 - 129
---------- ------ -------- ------ ------- ---------- ----------
Total decreases 37,632 - 48,738 - 129 16,015 102,514
---------- ------ -------- ------ ------- ---------- ----------
Net increase in equity 353,342 4,112 135,088 9,656 18,689 499,475 1,020,362
Equity at beginning of period 955,869 - 358,788 - - 815,071 2,129,728
---------- ------ -------- ------ ------- ---------- ----------
Equity at end of period $1,309,211 $4,112 $493,876 $9,656 $18,689 $1,314,546 $3,150,090
========== ====== ======== ====== ======= ========== ==========
The accompanying notes are an integral part of these financial statements.
</TABLE>
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<PAGE>
POTLATCH CORPORATION SAVINGS PLAN FOR HOURLY EMPLOYEES OF THE
PULP AND PAPERBOARD ARKANSAS DIVISION, CYPRESS BEND MILL
Notes to Financial Statements
Years Ended December 31, 1993 and 1992
Note 1. Principal Accounting Policies
- - --------------------------------------
Investments are presented at current market value in the accompanying
statements. Current market value is determined at the financial statement date
by the plan trustee and is generally based on quoted market prices. The
financial statements presented herein are prepared on the accrual basis of
accounting.
Note 2. General
- - ----------------
The plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974.
Effective December 1, 1992, Putnam Fiduciary Trust Company became
trustee of the plan's assets. Prior to that date, Wells Fargo Bank, N.A. was
trustee. Also effective December 1, 1992, the plan added three investment
options and made other significant changes to plan provisions. A discussion
of the new investment options and other plan changes is included in the
following paragraphs.
Each eligible hourly employee who elects to participate in the plan
makes deferred contributions, up to 15% of monthly earnings. Deferred
contributions are deducted before income taxes are withheld. Participants
may invest in any combination of six investment funds: a fixed income fund,
a stock fund and four mutual funds. The four mutual funds are: the Putnam
Convertible Income-Growth Trust, the Putnam Fund for Growth and Income, the
Putnam Voyager Fund and the George Putnam Fund of Boston. The latter three
funds were added effective December 1, 1992. The Fixed Income Fund is also a
Putnam Fund (the Putnam Fiduciary Trust Company GIC Fund) and became an
investment option at December 1, 1992, replacing the IDS Trust Income Fund
maintained at Wells Fargo Bank. Effective October 1, 1993, employer matching
contributions to the plan equal 50% of the participant's deferred contributions,
provided that in no event may the employer match more than 4% of the
participant's earnings. Prior to October 1, 1993, the employer could match no
more than 3% of the participant's earnings. Employer matching contributions are
invested in company stock. Federal tax rules place certain limitations on
employee and employer contributions.
Effective December 1, 1992, the plan provides that an eligible employee
may make a rollover contribution to the plan equal to all or part of a prior
distribution from another employer's qualified plan, subject to certain
restrictions.
Separate accounts are maintained for each participant's deferred and
rollover employee contributions by investment fund and a matching account is
maintained for each participant's employer matching contributions. The
accounts are credited with contributions and earnings or losses attributable
to such contributions.
-5-
<PAGE>
Note 2. General (cont.)
- - ------------------------
A participant may transfer past deferred and rollover contributions
among funds at anytime. Prior to December 1, 1992, a participant could
transfer past deferred contributions at the end of each quarter.
A participant's interest in his or her deferred accounts is fully vested
and nonforfeitable at all times. A participant's interest in his or her
matching account becomes vested based on the participant's years of service
as defined in the plan. A participant's matching account will become 100%
vested without regard to the participant's years of service if the plan
terminates, or if the participant attains age 65 as an employee of the
company, becomes totally and permanently disabled, or dies while an employee.
The portion of a participant's matching account not vested will be forfeited
when the participant's employment terminates. As of the end of each year,
forfeitures and the earnings of such forfeitures not used to restore the
matching accounts of former participants rehired during the year will be
credited against the amount of matching contributions for the following year.
Participants should refer to the plan prospectus for a more complete
description of the plan's provisions.
Note 3. Federal Income Taxes
- - -----------------------------
The Commissioner of Internal Revenue has ruled that the plan, effective
October 31, 1989, meets the requirements of a plan qualified under Section
401(a) of the Internal Revenue Code (the "Code"), including a cash or
deferred arrangement qualified under Section 401(k) of the Code.
-6-
<PAGE>
Schedule I
----------
POTLATCH CORPORATION SAVINGS PLAN FOR HOURLY EMPLOYEES OF THE
PULP AND PAPERBOARD ARKANSAS DIVISION, CYPRESS BEND MILL
Item 30a - Schedule of Assets Held for Investment Purposes
At December 31, 1993
<TABLE>
<CAPTION>
Party-In- Current
Interest Issue Description Cost<1> Value
- - --------- ----- ----------- ---- -------
<S> <C> <C> <C> <C>
Putnam Funds Putnam Fiduciary Trust
Company GIC Fund $1,463,700 $1,463,700
Putnam Funds George Putnam Fund of
Boston 64,044 62,741
Putnam Funds Putnam Convertible Income
Growth Trust 587,582 628,878
Putnam Funds The Putnam Fund for
Growth and Income 120,383 120,407
Putnam Funds The Putnam Voyager Fund 230,877 250,040
* Potlatch Corporation Common Stock 1,419,745 1,752,646
<FN>
<1> Effective December 1, 1992, Putnam Fiduciary Trust Company became
trustee of the plan's assets. Prior to that date, Wells Fargo Bank,
N.A. was trustee. With respect to the Putnam Convertible Income
Growth Trust shown above, cost for such fund represents fair market
value at date of transfer adjusted by subsequent activity.
</TABLE>
-7-
<PAGE>
Schedule II
-----------
POTLATCH CORPORATION SAVINGS PLAN FOR HOURLY EMPLOYEES OF THE
PULP AND PAPERBOARD ARKANSAS DIVISION, CYPRESS BEND MILL
Item 30d - Schedule of Reportable Transactions
For the Year Ended December 31, 1993
The plan shares in five percent reportable transactions with the other Potlatch
Corporation hourly savings plans. Five percent reportable transactions for all
hourly plans as certified by Putnam Fiduciary Trust Company for the year ended
December 31, 1993 are detailed below.
<TABLE>
<CAPTION>
Number of Description Cost of Current Value at
Transactions of Assets Asset Date of Transaction Net Gain
- - ------------ ----------- ------- ------------------- --------
<S> <C> <C> <C> <C>
Putnam Fiduciary Trust
Company GIC Fund
----------------------
203 Purchases 5,788,409 Units $5,788,409 $5,788,409 $ -
230 Sales 3,227,195 Units 3,227,195 3,227,195 -
George Putnam Fund
of Boston
------------------
118 Purchases 67,560 Shares 949,578 949,578 -
60 Sales 3,479 Shares 48,772 49,600 828
Putnam Convertible
Income Growth Fund, Inc.
------------------------
138 Purchases 107,562 Shares 2,095,190 2,095,190 -
109 Sales 38,441 Shares 697,591 746,213 48,622
The Putnam Fund for
Growth and Income
-------------------
145 Purchases 125,097 Shares 1,696,868 1,696,868 -
67 Sales 6,211 Shares 82,986 85,445 2,459
The Putnam
Voyager Fund
------------
170 Purchases 340,732 Shares 3,743,310 3,743,310 -
91 Sales 53,154 Shares 555,211 567,995 12,784
Potlatch Common Stock
---------------------
161 Purchases 134,583 Shares 6,082,249 6,082,249 -
232 Sales 50,611 Shares 1,881,461 2,330,792 449,331
</TABLE>
-8-
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
administrator of the plan has duly caused this annual report to be signed by
the undersigned thereunto duly authorized:
Potlatch Corporation Savings Plan
---------------------------------
for Hourly Employees of the
---------------------------
Pulp and Paperboard Arkansas
----------------------------
Division, Cypress Bend Mill
---------------------------
By Terry L. Carter
--------------------------------
Terry L. Carter, Controller
Potlatch Corporation
Date: June 24, 1994
-9-
<PAGE>
POTLATCH CORPORATION SAVINGS PLAN FOR HOURLY EMPLOYEES OF THE
PULP AND PAPERBOARD ARKANSAS DIVISION, CYPRESS BEND MILL
Exhibit Index
-------------
Exhibit
- - -------
(23) Consent of Independent Auditors
-10-
Consent of Independent Auditors
-------------------------------
Potlatch Corporation, Plan Administrator
Potlatch Corporation Savings Plan for Hourly
Employees of the Pulp and Paperboard
Arkansas Division, Cypress Bend Mill:
We consent to incorporation by reference in the Registration
Statement (No. 33-31372) on Form S-8 of our report dated April 8,
1994 relating to the statement of financial condition of Potlatch
Corporation Savings Plan for Hourly Employees of the Pulp and
Paperboard Arkansas Division, Cypress Bend Mill as of December 31,
1993 and 1992 and the related statements of income and changes in
plan equity for the years then ended which report appears in the
December 31, 1993 annual report on Form 11-K of Potlatch
Corporation Savings Plan for Hourly Employees of the Pulp and
Paperboard Arkansas Division, Cypress Bend Mill.
KPMG PEAT MARWICK
June 24, 1994
Exhibit (23)
