Potlatch To Become REIT

Potlatch Corp., Spokane, Wa., plans to convert from a corporation to a Real Estate Investment Trust January l.

The company would then likely form a taxable subsidiary for its manufacturing operations, which include lumber, plywood, particleboard, pulp, tissue, napkin and paper towel plants.

Designed to make the timber business more competitive, the move is subject to shareholder approval, but should create a financial windfall for them. The restructuring would require Potlatch to undertake an "earnings and profits purge'r in first quarter 2006, with distributions of up to $480 million-2j%o in cash, 80Vo in shares of the REIT.

"The business purpose for the conversion is to provide us a cost of capital structure which allows us to be competitive in growing our timberland business over time," said L. Pendleton Siegel, chairman and c.e.o.

Unlike corporations, REITs are not