Merger With Deltic (Tables)

9 Months Ended

Sep. 30, 2018

Summary of Total Consideration Transferred in Merger

The following table summarizes the total consideration transferred in the merger:

(Dollars in thousands, except share and per share amounts)
Number of shares of Deltic common stock outstanding¹		12,121,223
Number of Deltic performance awards²		90,515
		12,211,738
Exchange ratio³		1.80
Potlatch shares issued		21,981,128
Price per Potlatch common share⁴	$	51.95
Aggregate value of Potlatch common shares issued	$	1,141,920
Cash paid in lieu of fractional shares	14
Fair value of stock options and RSUs⁵	841
Consideration transferred	$	1,142,775

¹	Number of shares of Deltic common stock issued and outstanding as of February 20, 2018, net of fractional shares.

²	Number of shares of Deltic performance awards for pre-combination services rendered that vested upon closing of the merger.

³	Exchange ratio per the merger agreement.

⁴	Closing price of Potlatch common shares on February 20, 2018.

⁵	Fair value of Deltic stock options for pre-combination services rendered that vested upon closing of the merger, as well as RSUs for pre-combination services rendered.

Summary of Revenue and Income Before Income Taxes From Acquired Deltic Operations

The amount of revenue and income before income taxes from acquired Deltic operations included in our Condensed Consolidated Statement of Income for February 21, 2018 through September 30, 2018 are as follows:

(Dollars in thousands)

Three Months Ended

September 30, 2018

Nine Months Ended

September 30, 2018

Net sales

83,385

192,244

Income before income taxes

17,180

25,869

Summary of Unaudited Pro Forma Information

Summarized unaudited pro forma information that presents combined amounts as if this merger occurred at the beginning of 2017 is as follows:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(Dollars in thousands, except per share amounts)	2018		2017		2018		2017
Net sales	$	289,199	$	252,097	$	795,992	$	673,575
Net earnings attributable to PotlatchDeltic common shareholders	$	61,327	$	30,099	$	142,314	$	63,862
Basic earnings per share attributable to PotlatchDeltic common Shareholders	$	0.91	$	0.44	$	2.13	$	0.95
Diluted earnings per share attributable to PotlatchDeltic common shareholders	$	0.91	$	0.44	$	2.12	$	0.95

Summary of Fair Value Measurements of Assets Acquired and Liabilities Assumed

The following table summarizes the preliminary fair value measurements of assets acquired and liabilities assumed as of merger date:

(Dollars in thousands)	February 20, 2018		Measurement Period Adjustments			As Adjusted February 20, 2018
ASSETS
Cash and cash equivalents	$	3,419	$	—		$	3,419
Customer receivables, net		12,709		—			12,709
Inventories		17,316		—			17,316
Other current assets		8,276		524			8,800
Real estate held for development and sale		79,000		(2,000	)		77,000
Property, plant and equipment		265,901		(5,132	)		260,769
Timber and timberlands		1,060,000		913			1,060,913
Mineral rights		—		6,236			6,236
Trade name and customer relationships intangibles		19,000		500			19,500
Other long-term assets		2,010		1,546			3,556
Total assets acquired		1,467,631		2,587			1,470,218
LIABILITIES
Accounts payable and accrued liabilities		12,604		3,418			16,022
Current portion of pension and other postretirement employee benefits		754		—			754
Long-term debt		229,968		—			229,968
Pension and other postretirement employee benefits		36,155		—			36,155
Deferred tax liabilities, net		44,439		(831	)		43,608
Other long-term liabilities		936		—			936
Total liabilities assumed		324,856		2,587			327,443
Net assets acquired	$	1,142,775	$	—		$	1,142,775