When did Potlatch become a real estate investment trust?
Effective January 1, 2006, Potlatch restructured its operations to qualify for treatment as a real estate investment trust, or REIT, for Federal income tax purposes. The REIT tax rules require that the company derive most of its income, other than income generated by a taxable REIT subsidiary, from investments in real estate, which for the Company primarily includes income from the sale of standing timber. Accordingly, prior to the REIT conversion, the Company transferred to a wholly owned taxable REIT subsidiary, or Potlatch TRS, substantially all of our manufacturing facilities, assets used by Potlatch for the harvesting of timber and the sale of logs, and selected land parcels that Potlatch expects to be sold or developed for higher and better use purposes. The use of Potlatch TRS, which is taxed as a C corporation, enables the Company to continue to engage in these non-REIT qualifying businesses without violating the REIT requirements.
