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 Salaried Employees' Savings Plan
Potlatch Corporation
One Maritime Plaza, San Francisco, California 94111
<PAGE>
POTLATCH CORPORATION SALARIED EMPLOYEES' SAVINGS PLAN
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 Salaried Employees'
Savings Plan:
We have audited the statements of financial condition of Potlatch Corporation
Salaried Employees' Savings Plan 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 Salaried Employees' Savings Plan
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 SALARIED
EMPLOYEES' SAVINGS PLAN
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 Accounts payable
Participating employees $ - $ 457 Participating employees $ 34,365 $ -
Putnam Fiduciary Trust Company
GIC Fund 37,035,873 38,639,345 Fund equity 37,001,508 38,639,802
------------ ------------ ------------ ------------
37,035,873 38,639,802 37,035,873 38,639,802
------------ ------------ ------------ ------------
George Putnam Fund: George Putnam Fund:
Accounts receivable Accounts payable
Participating employees - 536 Participating employees 953 -
George Putnam Fund of Boston 1,888,673 54,597 Fund equity 1,887,720 55,133
------------ ------------ ------------ ------------
1,888,673 55,133 1,888,673 55,133
------------ ------------ ------------ ------------
Convertible Fund: Convertible Fund:
Accounts receivable Accounts payable
Participating employees - 318 Participating employees 26 -
Putnam Convertible Income-
Growth Fund 10,649,332 8,379,640 Fund equity 10,649,306 8,379,958
------------ ------------ ------------ ------------
10,649,332 8,379,958 10,649,332 8,379,958
------------ ------------ ------------ ------------
Growth and Income Fund: Growth and Income Fund:
Accounts receivable Accounts payable
Participating employees - 485 Participating employees 680 -
Putnam Fund for Growth
and Income 3,346,669 85,244 Fund equity 3,345,989 85,729
------------ ------------ ------------ ------------
3,346,669 85,729 3,346,669 85,729
------------ ------------ ------------ ------------
Voyager Fund: Voyager Fund:
Accounts receivable Accounts payable
Participating employees - 1,411 Participating employees 353 -
Putnam Voyager Fund 5,322,040 171,199 Fund equity 5,321,687 172,610
------------ ------------ ------------ ------------
5,322,040 172,610 5,322,040 172,610
------------ ------------ ------------ ------------
Stock Fund: Stock Fund:
Cash and equivalents 3,321 51,426 Accounts payable
Accounts receivable Participating employees 28,044 -
Participating employee - 339 Forfeitures 3,321 49,449
Potlatch Corporation common
stock, 1,199,421 shares
(1,191,094) shares in 1992) 56,522,695 54,790,321 Fund equity 56,494,651 54,792,637
------------ ------------ ------------ ------------
56,526,016 54,842,086 56,526,016 54,842,086
------------ ------------ ------------ ------------
$114,768,603 $102,175,318 $114,768,603 $102,175,318
============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
</TABLE>
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<PAGE>
POTLATCH CORPORATION SALARIED
EMPLOYEES' SAVINGS PLAN
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 $ 2,454,852 $ - $ - $ - $ - $ 591 $ 2,455,443
Dividend and other income - 125,571 822,895 220,023 192,291 1,789,941 3,150,721
----------- ---------- ----------- ---------- ---------- ----------- ------------
2,454,852 125,571 822,895 220,023 192,291 1,790,532 5,606,164
----------- ---------- ----------- ---------- ---------- ----------- ------------
Market value appreciation of assets - - 655,823 37,134 455,476 1,626,068 2,774,501
----------- ---------- ----------- ---------- ---------- ----------- ------------
Contributions (Note 2):
Employee 1,613,034 726,041 672,538 1,125,772 2,177,286 1,521,805 7,836,476
Employer - - - - - 3,335,482 3,335,482
----------- ---------- ----------- ---------- ---------- ----------- ------------
1,613,034 726,041 672,538 1,125,772 2,177,286 4,857,287 11,171,958
----------- ---------- ----------- ---------- ---------- ----------- ------------
Transfers from other funds 4,275,934 1,397,380 1,137,431 2,488,573 3,326,275 1,607,508 14,233,101
----------- ---------- ----------- ---------- ---------- ----------- ------------
Total increases 8,343,820 2,248,992 3,288,687 3,871,502 6,151,328 9,881,395 33,785,724
----------- ---------- ----------- ---------- ---------- ----------- ------------
Less distributions, forfeitures and
transfers to other accounts:
Distributions to participating
employees:
Cash 2,824,552 37,223 276,885 178,979 70,709 2,769,765 6,158,113
Market value of shares
distributed in settlement
of employees' accounts - - - - - 811,131 811,131
Forfeitures and other adjustments
to employer contributions - - - - - 3,321 3,321
Transfers to other funds 7,157,562 374,116 742,454 432,263 931,542 4,595,164 14,233,101
----------- ---------- ----------- ---------- ---------- ----------- ------------
9,982,114 411,339 1,019,339 611,242 1,002,251 8,179,381 21,205,666
----------- ---------- ----------- ---------- ---------- ----------- ------------
Market value depreciation of assets - 5,066 - - - - 5,066
----------- ---------- ----------- ---------- ---------- ----------- ------------
Total decreases 9,982,114 416,405 1,019,339 611,242 1,002,251 8,179,381 21,210,732
----------- ---------- ----------- ---------- ---------- ----------- ------------
Net increase (decrease) in equity (1,638,294) 1,832,587 2,269,348 3,260,260 5,149,077 1,702,014 12,574,992
Equity at beginning of period 38,639,802 55,133 8,379,958 85,729 172,610 54,792,637 102,125,869
----------- ---------- ----------- ---------- ---------- ----------- ------------
Equity at end of period $37,001,508 $1,887,720 $10,649,306 $3,345,989 $5,321,687 $56,494,651 $114,700,861
=========== ========== =========== ========== ========== =========== ============
The accompanying notes are an integral part of these financial statements.
</TABLE>
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<PAGE>
POTLATCH CORPORATION SALARIED
EMPLOYEES' SAVINGS PLAN
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 $ 2,963,467 $ - $ 796 $ - $ - $ 11,406 $ 2,975,669
Dividend and other income - - 401,153 - 4,061 1,674,447 2,079,661
----------- ------- ---------- ------- -------- ----------- ------------
2,963,467 - 401,949 - 4,061 1,685,853 5,055,330
----------- ------- ---------- ------- -------- ----------- ------------
Market value appreciation of assets - 81 954,554 601 - 9,212,942 10,168,178
----------- ------- ---------- ------- -------- ----------- ------------
Contributions (Note 2):
Employee 3,273,652 55,052 1,027,515 85,128 169,948 1,761,063 6,372,358
Employer - - - - - 2,986,838 2,986,838
----------- ------- ---------- ------- -------- ----------- ------------
3,273,652 55,052 1,027,515 85,128 169,948 4,747,901 9,359,196
----------- ------- ---------- ------- -------- ----------- ------------
Transfers from other funds 1,458,351 - 346,485 - - 609,699 2,414,535
Rollover from other plans 1,427 - - - - - 1,427
----------- ------- ---------- ------- -------- ----------- ------------
1,459,778 - 346,485 - - 609,699 2,415,962
----------- ------- ---------- ------- -------- ----------- ------------
Total increases 7,696,897 55,133 2,730,503 85,729 174,009 16,256,395 26,998,666
----------- ------- ---------- ------- -------- ----------- ------------
Less distributions, forfeitures and
transfers to other accounts:
Distributions to participating
employees:
Cash 3,091,410 - 267,378 - - 3,258,370 6,617,158
Market value of shares
distributed in settlement
of employees' accounts - - - - - 1,233,628 1,233,628
Forfeitures and other adjustments
to employer contributions - - - - - 21,103 21,103
Transfers to other funds 676,578 - - - - 1,737,957 2,414,535
----------- ------- ---------- ------- -------- ----------- ------------
3,767,988 - 267,378 - - 6,251,058 10,286,424
----------- ------- ---------- ------- -------- ----------- ------------
Market value depreciation of assets - - - - 1,399 - 1,399
----------- ------- ---------- ------- -------- ----------- ------------
Total decreases 3,767,988 - 267,378 - 1,399 6,251,058 10,287,823
----------- ------- ---------- ------- -------- ----------- ------------
Net increase in equity 3,928,909 55,133 2,463,125 85,729 172,610 10,005,337 16,710,843
Equity at beginning of period 34,710,893 - 5,916,833 - - 44,787,300 85,415,026
----------- ------- ---------- ------- -------- ----------- ------------
Equity at end of period $38,639,802 $55,133 $8,379,958 $85,729 $172,610 $54,792,637 $102,125,869
=========== ======= ========== ======= ======== =========== ============
The accompanying notes are an integral part of these financial statements.
</TABLE>
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<PAGE>
POTLATCH CORPORATION SALARIED EMPLOYEES' SAVINGS PLAN
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.
The plan provides that each eligible salaried employee may make a
participating contribution up to 6% of his or her base monthly salary and a
voluntary contribution up to 9% of such monthly earnings. The employee
elects how much of his or her contribution is to be deferred (deducted before
income taxes are withheld) and how much is to be non-deferred (deducted after
income taxes are withheld). Employees 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 and became an
investment option at December 1, 1992, replacing the Fixed Income Fund
maintained at Wells Fargo Bank N.A. The fund at Wells Fargo consisted of a
group of individual Guaranteed Investment Contracts (GICs) negotiated with
various insurance companies. The GICs are held separately at Putnam,
although for reporting purposes, they were combined with Putnam's Fixed
Income Fund and reported as one investment. Employer contributions to the
plan equal 70% of employee participating contributions for each plan year,
provided, however, that the employer may fix a higher or lower rate.
Employer contributions are invested in company stock and allocated to the
employees in proportion to their participating contributions. 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.
-5-
<PAGE>
Note 2. General (cont.)
- - ------------------------
Separate accounts are maintained for each participant's deferred,
non-deferred and rollover employee contributions by investment fund and a
company stock account is maintained for each participant's employer
contributions. The accounts are credited with contributions and earnings or
losses attributable to such contributions.
A participant may transfer past deferred, non-deferred and rollover
contributions among funds at anytime. Prior to December 1, 1992, a
participant could transfer past deferred and non-deferred contributions at the
end of each quarter.
A participant's interest in his or her deferred, non-deferred and
rollover accounts is at all times fully vested and nonforfeitable. A
participant's interest in the company stock account is fully vested when the
participant's employment terminates due to early, normal or deferred
retirement under the retirement plan, total and permanent disability, death
or after completion of 2 or more years of vesting service. Prior to December
1, 1992, a participant's interest in the company stock account became fully
vested after completion of 5 or more years of vesting service. If a
participant's employment terminates before such participant retires, becomes
disabled, dies or completes 2 years (5 years prior to December 1, 1992) of
vesting service, the participant's company stock account is forfeited.
The plan provides that any part of a participant's company stock account
which is not distributable to the participant or the participant's benefi-
ciary upon termination of employment constitutes a forfeiture. As of the end
of the plan year, any forfeitures attributable to former participants who are
not reemployed prior to the last day of the plan year in which their employ-
ment terminated will be credited against the amount of the employer contribu-
tions for the following plan 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
November 17, 1987, 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.
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<PAGE>
Schedule I
----------
POTLATCH CORPORATION SALARIED EMPLOYEES' SAVINGS PLAN
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 $37,035,873 $37,035,873
Putnam Funds Putnam Convertible Income
Growth Trust 9,994,470 10,649,332
Putnam Funds George Putnam Fund
of Boston 1,905,121 1,888,673
Putnam Funds The Putnam Fund for
Growth and Income 3,320,219 3,346,669
Putnam Funds The Putnam Voyager Fund 4,905,093 5,322,040
* Potlatch Corporation Common Stock 33,104,248 56,522,695
<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 SALARIED EMPLOYEES' SAVINGS PLAN
Item 30d - Schedule of Reportable Transactions
For the Year Ended December 31, 1993
Five percent reportable transactions as certified by Putnam Fiduciary Trust
Company for the year ended December 31, 1993 for the Potlatch Corporation
Salaried Employees' Savings Plan 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
----------------------
165 Purchases 8,273,111 Units $8,273,111 $8,273,111 $ -
257 Sales 9,947,749 Units 9,947,749 9,947,749 -
George Putnam Fund
of Boston
------------------
119 Purchases 160,899 Shares 2,249,528 2,249,528 -
90 Sales 28,633 Shares 398,922 410,386 11,464
Putnam Convertible
Income Growth Fund, Inc.
------------------------
133 Purchases 134,739 Shares 2,633,182 2,633,182 -
137 Sales 51,874 Shares 958,328 1,019,313 60,985
The Putnam Fund for
Growth and Income
-------------------
149 Purchases 284,190 Shares 3,834,852 3,834,852 -
105 Sales 44,750 Shares 599,276 610,561 11,285
The Putnam Voyager Fund
-----------------------
165 Purchases 516,802 Shares 5,697,263 5,697,263 -
133 Sales 89,202 Shares 964,768 1,001,898 37,130
Potlatch Common Stock
---------------------
143 Purchases 181,557 Shares 8,208,594 8,208,594 -
248 Sales 173,230 Shares 4,638,672 8,102,290 3,463,618
</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 Salaried
-----------------------------
Employees' Savings Plan
-----------------------
By Terry L. Carter
--------------------------------
Terry L. Carter, Controller
Potlatch Corporation
Date: June 24, 1994
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<PAGE>
POTLATCH CORPORATION SALARIED EMPLOYEES' SAVINGS PLAN
Exhibit Index
-------------
Exhibit
- - -------
(23) Consent of Independent Auditors.
-10-
Consent of Independent Auditors
-------------------------------
Potlatch Corporation, Plan Administrator
Potlatch Corporation Salaried Employees'
Savings Plan:
We consent to incorporation by reference in the Registration
Statement (No. 33-00805) on Form S-8 of our report dated April 8,
1994 relating to the statement of financial condition of Potlatch
Corporation Salaried Employees' Savings Plan 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 Salaried Employees' Savings Plan.
KPMG PEAT MARWICK
June 24, 1994
Exhibit (23)
