Potlatch Announces Tax Treatment for 2009 Dividend Distributions

Potlatch Corporation (NYSE:PCH) announced today the tax treatment for its dividend distributions made in 2009 on the company’s Common Stock. The regular quarterly distributions of $0.51 per share paid in each quarter of 2009 are classified for income tax purposes as capital gain distributions taxable at the 15 percent rate.

Shareholders are encouraged to consult with their tax advisors regarding the tax treatment for their Potlatch distributions.

ABOUT POTLATCH

Potlatch is a Real Estate Investment Trust (REIT) with approximately 1.6 million acres of timberland in Arkansas, Idaho, Minnesota and Wisconsin. Potlatch, a verified forest practices leader, is committed to providing superior returns to stockholders through long-term stewardship of its forest resources. The company also conducts a land sales and development business and operates wood products manufacturing facilities through its taxable REIT subsidiary. More information about Potlatch can be found on the company’s Web site at www.potlatchcorp.com.

FORWARD-LOOKING STATEMENTS

This press release contains certain forward-looking statements within the meaning of the Private Litigation Reform Act of 1995 as amended. 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 Potlatch's actual results to differ materially include those risks and uncertainties described from time to time in Potlatch's public filings with the Securities and Exchange Commission. These forward-looking statements are made as of the date hereof and the company does not undertake to update any forward-looking statements.