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Michael J. Covey Potlatch Corporation Jerald W. Richards

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SLIDE 1

Potlatch Corporation

Michael J. Covey

  • Jerald W. Richards
  • September 2014 Investor Presentation
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SLIDE 2

FORWARD$LOOKING STATEMENTS

This presentation contains certain forward$looking statements within the meaning of the Private Litigation Reform Act of 1995 as amended, including without limitation, statements about future company performance, the company’s business model, direction of markets and the economy, forecast of U.S. housing starts, forecast U.S. lumber consumption, incremental lumber production from the U.S. South, forecast U.S. lumber supply, ability to increase or decrease harvest volume to meet market conditions, effect of increased manufacturing in the South on lumber prices, effect of increased harvest or increased sawlog prices on EBITDA in the North and South regions, effect of increased lumber prices on EBITDA, forecast harvest in 2014, forecast North American log and lumber exports to China, log, lumber and panel price trends, effect of mountain pine beetle and allowable cut on Canadian supply, forecast of inventory of available live and dead lodgepole pine in B.C., debt maturities, cash flows, management of timberlands to optimize values, real estate value

  • pportunities, real estate business potential and land development potential, typical annual “same$store” sales, expected 2014 real estate

sales, and similar matters. These forward$looking statements are based on current expectations, estimates, assumptions and projections that are subject to change, and actual results may differ materially from the forward$looking statements. Factors that could cause actual results to differ materially include, but are not limited to, changes in timberland values; changes in timber harvest levels on the company’s lands; changes in timber prices; changes in policy regarding governmental timber sales; changes in the United States and international economies; changes in the level of domestic construction activity; changes in international tariffs, quotas and trade agreements involving wood products; changes in domestic and international demand for wood products; changes in production and production capacity in the forest products industry; competitive pricing pressures for the company’s products; unanticipated manufacturing disruptions; changes in general and industry$specific environmental laws and regulations; unforeseen environmental liabilities or expenditures; weather conditions; changes in fuel and energy costs; changes in raw material and other costs; the ability to satisfy complex rules in order to remain qualified as a REIT; changes in tax laws that could reduce the benefits associated with REIT status; satisfaction of closing conditions for large Q2 transaction; and other risks and uncertainties described from time to time in the company’s public filings with the Securities and Exchange Commission. All forward$looking statements are made as of the date of this presentation, and the company does not undertake to update any forward$looking statements.

NON$GAAP MEASURES

This presentation presents non$U.S. GAAP financial information. A reconciliation of those numbers to U.S. GAAP is included in this presentation which is available on the company’s website at www.potlatchcorp.com.

Forward$Looking Statements & Non$GAAP Measures

September 2014 $ Investor Presentation Slides 2

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SLIDE 3

Company Structure & Overview

Potlatch Corporation (REIT)

Resource (Timberlands) North South Taxable REIT Subsidiaries Real Estate Wood Products

Converted to tax efficient REIT in 2006

  • Fourth largest U.S. Timber REIT
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  • Enterprise value of $1.9 billion
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Headquartered in Spokane, Washington Founded in 1903

(1) Based on September 2, 2014 closing stock price of $42.93 per share. (2) Non$GAAP measure – see slide 21 for reconciliation. 3 September 2014 $ Investor Presentation Slides

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SLIDE 4
  • St. Maries

Gwinn Bemidji Warren

Potlatch Overview

  • 4

(1) As of June 30, 2014.

Idaho +/$... Arkansas !.$... Minnesota 01$... Total 1,384,000 acres Timberlands'(

  • September 2014 $ Investor Presentation Slides
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SLIDE 5

Key Drivers Are Favorable

U.S. housing starts are recovering which drives higher lumber demand Canada’s ability to participate in U.S. recovery is limited by effect of the pine beetle and reduction in allowable cut Incremental lumber production will come from the U.S. South North American exports to China are robust and here to stay Log and lumber prices are expected to increase

September 2014 $ Investor Presentation Slides

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SLIDE 6

Total U.S. Housing Starts

'(

500 1,000 1,500 2,000 2,500

71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13 15F

Average Starts Since 1971: 1.5 million ! "!

(1) Source: U.S. Census Bureau. (2) Forecast based on average of 8 different economic forecasting firms.

Forecast(2) Actual(1)

6 September 2014 $ Investor Presentation Slides

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SLIDE 7

Inventory of Available Live and Dead Lodgepole Pine in BC

2345%$///6-.-.

7

&&1

Source: FEA estimates

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  • September 2014 $ Investor Presentation Slides
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SLIDE 8

0% 5% 10% 15% 20% 25% 30% 35% 40% 5 10 15 20 25 30 35 40 45 95 97 99 01 03 05 07 09 11 13 15F 17F 19F Billion Board Feet

U.S. Lumber Supply (1995 $ 2020) $ RISI

South Coast Inland Other Canadian Lumber % of U.S. Market (RHS)

U.S. Lumber Supply

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8 September 2014 $ Investor Presentation Slides Source: RISI 15$Year Forecast, July 2014.

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SLIDE 9

1 2 3 4 5 6 7 06 07 08 09 10 11 12 13 14 F 15 F

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North American Lumber and Log Exports to China

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*$&()+

Source: FEA (Lumber export to China), ClearVision (Log export to China). 9 September 2014 $ Investor Presentation Slides

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SLIDE 10

Resource: Segment Overview

Stable and significant source of cash since REIT conversion Increased 2013 EBITDA driven by recovery of Northern sawlog prices Southern sawlog prices have not yet recovered

  • 83

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At current volumes, a $5/ton change in sawlog prices ≈

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(1) Non$GAAP measure – see slide 20 for reconciliation. (2) Excludes $49 million timber deed sale. 10

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SLIDE 11

Resource: Harvest Profile

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We preserved value by reducing harvest in the South during the downturn At current prices, a 100,000 ton change in sawlog harvest ≈

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Approximately 75% of log volume is sold to third party customers

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September 2014 $ Investor Presentation Slides

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SLIDE 12

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Wood Products: Segment Overview

We operate four top$quartile sawmills We sell lumber to wholesalers for use in homebuilding and construction Our industrial grade plywood mill sells higher grade panels at a premium Higher EBITDA driven largely by lumber prices

(1) Non$GAAP measure – see slide 20 for reconciliation. (2) Includes asset impairment charge of $3 million.

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12

A $10/mbf change in lumber price ≈ $6 million in annual EBITDA

September 2014 $ Investor Presentation Slides

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SLIDE 13

Real Price vs. Capacity Utilization

13

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Source: Random Lengths, RISI, RBC Capital Markets estimates. September 2014 $ Investor Presentation Slides

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SLIDE 14

Real Estate: Segment Overview

14

Continually assess acreage and maximize value by selling non$core holdings at significant multiples to timberland values Business has low risk, high margin attributes Portfolio consists of desirable property

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Activity can be lumpy

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Sold close to 19,000 acres and generated $22 million(1) of EBITDA in 2013 Expect to sell 30,000 to 35,000 acres in 2014

Core Timberland ~1.2 million acres

Land Portfolio

Rural Real Estate ~85,000 acres Non$Strategic Timberland ~15,000 acres HBU/Development ~115,000 acres

(1) Non$GAAP measure – see slide 20 for reconciliation.

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September 2014 $ Investor Presentation Slides

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SLIDE 15

Financial Highlights

15

Amounts as of June 30, 2014:

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Cash and short$term investments 01 - * Long$term debt 1-. . * Pension liability !. / * Undrawn revolver

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* Net debt to enterprise value(1)

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Dividend yield(2) 1 1A

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$0 $23 $5 $11 $14 $0 $50 $100 $150 2014 2015 2016 2017 2018

Debt Maturities for the Next Five Years

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$64 $53 $77 $81 $74 $50 $52 $55 $0 $50 $100 $150 2011 2012 2013 LTM

Funds Available for Distribution

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September 2014 $ Investor Presentation Slides

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SLIDE 16

Conclusion: Investment Takeaways

Potlatch manages a very attractive asset base of ~1.4 million acres of timberland Attractive dividend yield currently at 3.3%(1) Wood Products business is generating strong cash flow Real Estate segment has low risk, high margin attributes Long$term industry trends are very favorable

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Potlatch is highly leveraged to the housing recovery and higher lumber prices

8

(1) Based on Sept. 2, 2014 closing stock price of $42.93 per share. 16 September 2014 $ Investor Presentation Slides

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SLIDE 17

Appendix

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SLIDE 18

Southern Lumber Production vs. U.S. Housing Starts

Source: FEA, U.S. Census Bureau, and Raymond James research. Data is from 4Q 2000 – 4Q 2013.

)

18

10 11 12 13 14 15 16 17 18 19 20 500 700 900 1,100 1,300 1,500 1,700 1,900 2,100 Trailing Twelve Month - Southern Lumber Production (Bbf) Trailing Twelve Month - Total U.S Housing Starts (in thousands) 4Q13

September 2014 $ Investor Presentation Slides

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SLIDE 19

Southern Sawlog Prices vs. Southern Lumber Production

Source: FEA and Raymond James research. Data is from 4Q 2000 – 4Q 2013.

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19

$20 $25 $30 $35 $40 $45 10 11 12 13 14 15 16 17 18 19 20 Southern Sawlog Prices ($/ton) Trailing Twelve Month - Southern Lumber Production (Bbf) 2012 & 2013: Sawlog Prices & Lumber Production

September 2014 $ Investor Presentation Slides

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SLIDE 20

EBITDA and Segment EBITDA Reconciliation

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2007 2008 2009(3) 2010 2011 2012 2013 2014 LTM

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(1) Consolidated amounts exclude amounts related to discontinued operations. (2) Interest expense includes amortization of bond discounts and deferred loan fees. (3) Consolidated and Resource EBITDA include a $49 million timber deed sale. Consolidated and Wood Products EBITDA include a $3 million asset impairment charge. 20 September 2014 $ Investor Presentation Slides

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SLIDE 21

Potlatch Net Debt & FAD Reconciliations

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Net Debt

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(1) Excludes the cash portion of the earnings and profit distribution paid in 2006 in conjunction with the REIT conversion. (2) Excludes distribution of Clearwater Paper stock in 2008. 21 September 2014 $ Investor Presentation Slides

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SLIDE 22

Definitions of Non$GAAP Measures

EBITDA6B5533 2:8;5$$ '(F$'"($$C$ "6

  • Segment EBITDA from continuing operations$$'(F$$

C" Funds Available for Distribution (FAD),$'(F$C$" $6 $ "*<

  • 22

September 2014 $ Investor Presentation Slides