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(f) .0 -c....; Po-r- "( ANNUAL REPORT Potlatch Telephone Company Accounting Dept. 204 North Indiana Street Roachdale, IN 46172 ADDRESS TOT HE- IDAHO PUBLIC UTiliTIES COMMISSION FOR THE YEAR ENDED December312006 ANNUAL REPORT OF SMALL TELEPHONE COMPANIES TO THE IDAHO PUBLIC UTILITIES COMMISSION FOR THE YEAR ENDING DECEMBER 31 , 2006 COMPANY INFORMATION Exact name of utility: Address of principal office: Telephone Number: Cities or towns served: Potlatch Telephone Company 702 E Main Street, Kendrick, ID 83537 (208) 289-8800 Randal Brunes - Manager Field Services Kendrick Julietta Troy Name and title of officer having custody of the general corporate books of account: John Erpenbach, Assistant Treasurer Address of office where corporate books are kept and phone number: 525 JUNCTION ROAD , SUITE 7000, MADISON, WI 53717 Organized under the laws of the State of: Idaho Date of organization: May- Form of organization (proprietorship, association, corporation): If a Subchapter S Corporation, please specify: Name and address of controlling company, if any: 525 JUNCTION ROAD, SUITE 7000, MADISON , WI 53717 608 664-4289 Corporation TDS Telecommunications Corporation Names of affiliated companies, Give address and description of business:See Attached.- page 1a OFFICERS Report below the title, name and office address of each general officer of the utility at the end of the year. If there were any changes during the year, show the name, title, and address of the previous officer and the date of change. Title President: Name David A. Wittwer William J. Megan William J. Megan David P. Jones John R. Erpenbach Irmgard F. Metz Address 525 JUNCTION ROAD, MADISON , WI 53717 525 JUNCTION ROAD, MADISON, WI 53717 525 JUNCTION ROAD , MADISON , WI 53717 525 JUNCTION ROAD , MADISON , WI 53717 525 JUNCTION ROAD , MADISON , WI 53717 525 JUNCTION ROAD, MADISON, WI 53717 Vice President: Vice President: Secretary/Treasurer: Assistant Treasurer: Assistant Secretary: Rev 3/02 Page 1 Address of office where corporate books are kept and phone number: 525 JUNCTION ROAD, SUITE 7000, MADISON, WI 53717 Corporate Records - Active Companies State Name VA . AmeliaOH . ArcadiaAZ . Arizona MN . Arvig Telephone WA . AsotinWI . Badger Telecom, LLCCA . BarnardsvilleWI . Black Earth, LLCGA . Blue RidgeWI . Bonduel LLC MN . Bridge WaterWI . BB& W, LLCAL . ButlerSC . Calhoun CityGA . Camden T&T (GA)IN . Camden (IN)WI . Central State, LLCMI . ChathamWI . Chorus Networks, LLCAR . Cleveland County ME . CobbosseeconteeIN .CCIMI 'CCMIN .CCSITN . Concord OH . ContinentalAR . DecaturCO . Delta County Tele-CommNY . Deposit WI . Dickeyville, LLCWI . EastCoast, LLCNY . Edwards WI . Farmers, LLCWI . Grantland ME . HampdenCA . Happy Valley ME . Hartland and St. AlbansNH . HollisOR . Home (Oregon)IN . Home (Pittsboro)IN . Home (Waldron) State NameCA . HornitosTN . Humphreys CountyMI . Island (MI)NH . Kearsarge KY . Leslie County WA . Lewis RiverKY . LewisportOH . Little MiamiVT . LudlowSC . McClelianvilie WA . McDanielWI . Mt. Vernon, LLCPA . Mahanoy & MahantangoNH . MCT Communications, Inc,IN . The Merchants & Farmers NH . Merrimack County OK . Mid-America WI . Mid-Plains, LLC MN . Mid-StateWI . Midway, LLCSC . MyrtleCA . National T&T GA . Nelson-Ball GroundVA . New Castle MO . New LondonVT . NorthfieldSC . NorwayAL . OakmanOH . OakwoodOK . Oklahoma MO . Orchard Farm NY . Oriskany FallsAL . PeoplesVT . PerkinsvilleNY . Port ByronID . PotlatchFL . Quincy WI . Riverside, LLCIN 'S&WSC . St. Stephen KY . Salem (608) 664-4289 State Name . Saluda Mountain . Scandinavia . Service . Shiawassee . Somerset . Southeast Mississippi . Southeast Telco of WI . Southwestern . Stockbridge & Sherwood . Stoutland . Strasburg . Sugar Valley . TDS Communication Solutions . TDS Long Distance Corp . TDS METROCOM, LLC . TDS Telecom Svc Corp . TDS Telecommunications Corp. . TDSI Telecommunications . Teilico . Tennessee . Tenney, LLC . The Island . Tipton . Township . Tri-County Communications . Tri-County Telephone . U. S. Link, Inc. . UTELCO, LLC . Vanlue . Vernon . Virginia . Warren . Waunakee, LLC . West Penobscot . Williston . Wilton . Winsted . Winterhaven . Wolverine . Wyandotte DIRECTORS List the name of each person who was a member of the Board of Directors at any given time during the year: (Fees related to meetings only. Name and Address James W. Butman Lisa A. Cvengros William J. Megan David A. Wittwer Term Expired or Current Term Will Expire Meetings Attended This year Fees Paid During Year Open Open Open Open $0. $0. $0. $0. Name of Chairman of the Board: Name of Secretary (or Clerk) of Board: Assistant Secretary: Irmgard F. Metz Number of Meetings of the Board during the year: MANAGERS List the name of each person who performed management duties for the Company during the year, and the total wages and bonuses paid to those persons: (Do not include Director fees in these amounts. Name Randall Brunes Title Manager- Field Services Wages and Bonuses Paid N/A Rev 3/02 Page 2 NOTES TO THE FINANCIAL STATEMENTS Please provide important information such as changes in accounting or depreciation practices, extensions or additions to the system; disposal of any substantial portion of the property of the utility; reorganization , mergers , or consolidations with other companies; leases executed; other contracts or agreements entered into; changes made in articles of incorporation or amendments; the occurrence of contingency losses or gains. Rev 3/02 Page 3 POTLATCH ANNUAL REPORT FOR SMALL TELEPHONE COMPANIES YEAR ENDED DECEMBER 31 , 2006 BALANCE SHEET Assets and Other Debits Balance Balance IncreaseBeginningat End Title of Account of Year of Year (Decrease)Current Assets 1120 Cash and Equivalents 1130 Cash 630 335 101 899 471 5641140Special Cash Deposits 1150 Working Cash Advances 450 250 (200)1160 Temporary Investments 1180 Telecommunications Accts. Receivable 144 041 152,404 3631181Accts. Rec. Allow. -Telecommunications 000)200)(200)1190 Other Accounts Receivable 369 697 374,414 7171191Accounts Receivable Allow. - Other 800)800)1200 Notes Receivable 1201 Notes Receivable Allowance 1210 Interest & Dividends Receivable 279 206 9271220Material and Supplies 035 354 3191280Prepayments 1290 Prepaid Rents 1300 Prepaid Taxes 1310 Prepaid Insurance 1320 Prepaid Directory Expenses 253 425 1721330Other Prepayments 40,487 016 5291350Other Current Assets Noncurrent Assets 1401 Investment in Affiliated Companies 1402 Investment in Nonaffiliated Companies 000 000)1406 Nonregulated Investments 449 513 0641407Unamortized Debt Issuance Expense 1408 Sinking Funds 1410 Other Noncurrent Assets 1438 Deferred Maintenance & Retirements 1439 Deferred Charges 1500 Other Jurisdiction Assets - Net Property, Plant and Equipment 2001 Telecommunications Plants in Service 566 198 975 049 408 8512002Prop. Held for Future Telecom. Use 2003 Telecom. Plant under Constr. - Short Term 507 (41 507)2004 Telecom. Plant under Constr. - Long Term 2005 Telecom. Plant Adjustment 2006 Nonoperating Plant 2007 Goodwill Depreciation and Amortization Accounts 3100 Accumulated Depreciated 939 735)384 859)(445 124)3200 Accum. Depre. - Held for Future Use 3300 Accumulated Depreciation - Nonoperating 3400 Accumulated Amortization - Tangible 3410 Accum. Amort. - Capitalized Leases 716 7163420Accum. Amort. - Leasehold Improvements 3500 Accumulated Amortization - Intangible 861 987 874)3600 Accumulated Amortization - Other TOTAL ASSETS 903 058 340 374 293 881 Rev 3/02 Page 4 POTLATCH ANNUAL REPORT FOR SMALL TELEPHONE COMPANIES YEAR ENDED DECEMBER 31 , 2006 BALANCE SHEET Liabilities & Stockholders' Equity Balance Balance Increase Beginning at End Title of Account of Year of Year (Decrease) Current Liabilities 4010 Accounts Payable 274 030 195 575 (78,455) 4020 Notes Payable 4030 Advance Billings and Payments 708 59,356 648 4040 Customer Deposits 4050 Current Maturities - Long -Term Debt 4060 Current Maturities - Capital leases 4070 Income Taxes - Accrued 98,272 (98 272) 4080 Other Taxes - Accrued 937 834 897 4100 Net Current Defer. Oper. Income Taxes 560)595)(35) 4110 Net Current Defer. Nonoper. Income Taxes 4120 Other Accrued Liabilities 058 104 954) 4130 Other Current Liabilities 728 013 285 Long-Term Debt 4210 Funded Debt 4220 Premium on Long-Term Debt 4230 Discount on Long-Term Debt 4240 Reacquired Debt 4250 Obligations Under Capital Leases 15,916 916 4260 Advances from Affiliated Companies 4270 Other Long-Term Debt Other Liabilities & Deferred Credits 4310 Other Long-Term Liabilities 638 (70 654)(74 291)4320 Unamort. Oper. Invest. Tax Credits - Net 624 624)4330 Unamort. Nonoper. Invest. Tax Credits - Net (1 ) 4340 Net Noncurrent Defer. Oper. Income Taxes 467 076 511 828 752 4350 Net Noncur. Defer. Nonoper. Income Taxes 4360 Other Deferred Credits 091 (22 091)4370 Other Juris. Liab. & Def. Credits - Net Stockholders' Equity 4510 Capital Stock 325 65,086 761 4520 Additional Paid-In Capital 376 149 379,410 262 4530 Treasury Stock 4540 Other Capital 4550 Retained Earnings 787 515 522 981 735,466 5000000 - 7999999 Net Income (Loss)735,466 582 519 (152 947) TOTAL LlAB. & OTHER CREDITS 903,058 340 374 437 316 Rev 3/02 Page 5 PO T L A T C H A N N U A L R E P O R T F O R S M A L L T E L E P H O N E C O M P A N I E S YE A R E N D E D D E C E M B E R 3 1 20 0 6 AN A L Y S I S O F T E L E C O M M U N I C A T I O N S P L A N T I N S E R V I C E TO T A L C o m p a n y B a s i s Ba l a n c e Be g i n n i n g of Y e a r An a l y s i s o f T e l e c o m m u n i c a t i o n s P l a n t i n S e r v i c e 21 1 1 La n d 81 1 21 1 2 Mo t o r V e h i c l e s 65 , 62 2 21 1 3 Ai r c r a f t 21 1 4 Sp e c i a l P u r p o s e V e h i c l e s 21 1 5 Ga r a g e W o r k E q u i p m e n t 21 1 6 Ot h e r W o r k E q u i p m e n t 21 2 1 Bu i l d i n g s 21 2 2 Fu r n i t u r e 21 2 3 Of f i c e E q u i p m e n t 21 2 4 Ge n e r a l P u r p o s e C o m p u t e r s 22 1 1 An a l o g E l e c t r o n i c S w i t c h i n g 22 1 2 Di g i t a l E l e c t r o n i c S w i t c h i n g 22 1 5 E l e c t r o - Me c h a n i c a l S w i t c h i n g 22 2 0 Op e r a t o r S y s t e m s 22 3 1 Ra d i o S y s t e m s 22 3 2 Ci r c u i t E q u i p m e n t 23 1 1 St a t i o n A p p a r a t u s 23 2 1 Cu s t o m e r P r e m i s e s W i r i n g 23 4 1 La r g e P r i v a t e B r a n c h E x c h a n g e s 23 5 1 Pu b l i c T e l e p h o n e T e r m i n a l E q u i p m e 23 6 2 Ot h e r T e r m i n a l E q u i p m e n t 24 1 1 Po l e s 24 2 1 Ae r i a l C a b l e 24 2 2 Un d e r g r o u n d C a b l e 24 2 3 Bu r i e d C a b l e 24 2 4 Su b m a r i n e C a b l e 24 2 6 In t r a b u i l d i n g N e t w o r k C a b l e 24 3 1 Ae r i a l W i r e 24 4 1 Co n d u i t S y s t e m s TO T A L T E L P L T IN S E R V I C E 20 0 3 26 8 1 26 8 2 26 9 0 Wo r k I n P r o c - Ca p i t a l L e a s e s Le a s e h o l d I m p r o v e m e n t s In t a n g i b l e s TO T A L R E G Re v 3/ 0 2 59 6 38 2 58 4 92 9 25 7 11 7 , 95 2 25 6 88 0 09 9 05 9 19 7 22 4 64 1 66 2 09 5 33 5 67 5 56 6 , 19 8 50 7 86 1 64 4 56 6 Ad d i t i o n s Du r i n g y e a r 28 , 81 1 07 4 23 5 15 1 10 1 86 5 38 3 , 00 1 (4 1 50 7 83 4 36 4 32 8 Pa g e 6 Pl a n t Re t i r e d or S o l d f3 , 4 3 n f6 2 5 ) 06 3 1 12 9 ) Tr a n s f e r s an d Ad j u s t m e n t s 8, 4 9 7 67 9 73 8 91 3 80 8 1 25 , 10 5 Ba l a n c e En d of Y e a r 81 1 94 , 4 3 3 59 6 38 2 , 58 4 92 9 25 7 12 6 , 4 4 9 30 1 19 5 33 6 , 94 7 19 7 11 6 66 2 17 4 20 0 67 5 97 5 04 9 83 4 98 7 02 9 87 0 PO T L A T C H A N N U A L R E P O R T F O R S M A L L T E L E P H O N E C O M P A N I E S YE A R E N D E D D E C E M B E R 3 1 20 0 6 AN A L Y S I S O F T E L E C O M M U N I C A T I O N S P L A N T A C C O U N T S ID A H O O p e r a t i o n s O n l y Ba l a n c e Pl a n t Tr a n s f e r s Ba l a n c e Be g i n n i n g Ad d i t i o n s Re t i r e d an d En d of Y e a r Du r i n g Y e a r or S o l d Ad j u s t m e n t s of Y e a r An a l y s i s o f T e l e c o m m u n i c a t i o n s P l a n t i n S e r v i c e 21 1 1 La n d 16 , 81 1 81 1 21 1 2 Mo t o r V e h i c l e s 62 2 28 , 81 1 94 , 4 3 3 21 1 3 Ai r c r a f t 21 1 4 Sp e c i a l P u r p o s e V e h i c l e s 21 1 5 Ga r a g e W o r k E q u i p m e n t 21 1 6 Ot h e r W o r k E q u i p m e n t 59 6 59 6 21 2 1 Bu i l d i n g s 38 2 58 4 38 2 58 4 21 2 2 Fu r n i t u r e 92 9 92 9 21 2 3 Of f i c e E q u i p m e n t 25 7 35 , 25 7 21 2 4 Ge n e r a l P u r p o s e C o m p u t e r s 11 7 95 2 8, 4 9 7 12 6 , 4 4 9 22 1 1 An a l o g E l e c t r o n i c S w i t c h i n g 22 1 2 Di g i t a l E l e c t r o n i c S w i t c h i n g 25 6 88 0 07 4 (3 , 4 3 7 ) 67 9 30 1 19 5 22 1 5 El e c t r o - Me c h a n i c a l S w i t c h i n g 22 2 0 Op e r a t o r S y s t e m s 22 3 1 Ra d i o S y s t e m s 22 3 2 Ci r c u i t E q u i p m e n t 09 9 05 9 23 5 15 1 73 8 33 6 94 7 23 1 1 St a t i o n A p p a r a t u s 23 2 1 Cu s t o m e r P r e m i s e s W i r i n g 23 4 1 La r g e P r i v a t e B r a n c h E x c h a n g e s 23 5 1 Pu b l i c T e l e p h o n e T e r m i n a l E q u i p m e 23 6 2 Ot h e r T e r m i n a l E q u i p m e n t 24 1 1 Po l e s 19 7 19 7 24 2 1 Ae r i a l C a b l e 22 4 64 1 10 1 (6 2 5 ) 23 5 11 6 24 2 2 Un d e r g r o u n d C a b l e 66 2 66 2 24 2 3 Bu r i e d C a b l e 09 5 33 5 86 5 17 4 20 0 24 2 4 Su b m a r i n e C a b l e 24 2 6 In t r a b u i l d i n g N e t w o r k C a b l e 24 3 1 Ae r i a l W i r e 24 4 1 Co n d u i t S y s t e m s 67 5 67 5 TO T A L T E L P L T IN S E R V I C E 56 6 19 8 38 3 00 1 06 3 ) 29 , 91 3 97 5 , 04 9 20 0 3 Wo r k I n P r o c - 50 7 (4 1 50 7 ) 26 8 1 Ca p i t a l L e a s e s 83 4 83 4 26 8 2 Le a s e h o l d I m p r o v e m e n t s 26 9 0 In t a n g i b l e s 86 1 (6 7 ) 80 8 ) 98 7 TO T A L R E G 64 4 56 6 36 4 32 8 12 9 ) 10 5 02 9 , 87 0 Re v 3 / 0 2 PA G E 7 PO T L A T C H A N N U A L R E P O R T F O R S M A L L T E L E P H O N E C O M P A N I E S YE A R E N D E D D E C E M B E R 3 1 , 2 0 0 6 AN A L Y S I S O F E N T R I E S I N A C C U M U L A T E D D E P R E C I A T I O N Ac c o u n t 3 1 0 0 TO T A L C o m p a n y B a s i s Ba l a n c e Cr e d i t s Re t i r e m e n t s Ba l a n c e Be g i n n i n g De p r e c i a t i o n Du r i n g an d En d of Y e a r Ra t e Ye a r Ad j u s t m e n t s of Y e a r An a l y s i s o f E n t r i e s i n A c c u m u l a t e d D e p r e c i a t i o n 21 1 2 Mo t o r V e h i c l e s 45 , 26 1 12 . 4 0 % 98 5 66 3 90 8 21 1 3 Ai r c r a f t 21 1 4 Sp e c i a l P u r p o s e V e h i c l e s 21 1 5 Ga r a g e W o r k E q u i p m e n t 21 1 6 Ot h e r W o r k E q u i p m e n t 62 4 50 % 97 1 59 6 21 2 1 Bu i l d i n g s 14 4 05 5 00 % 11 , 4 7 8 15 5 53 3 21 2 2 Fu r n i t u r e 78 3 80 % 87 1 65 5 21 2 3 Of f i c e E q u i p m e n t 26 9 80 % 12 1 38 9 21 2 4 Ge n e r a l P u r p o s e C o m p u t e r s 10 9 , 01 3 14 . 30 % 26 3 06 7 12 4 34 4 22 1 1 An a l o g E l e c t r o n i c S w i t c h i n g 22 1 2 Di g i t a l E l e c t r o n i c S w i t c h i n g 76 6 30 7 80 % 24 3 30 8 84 3 85 8 22 1 5 El e c t r o - Me c h a n i c a l S w i t c h i n g 22 2 0 Op e r a t o r S y s t e m s 22 3 1 Ra d i o S y s t e m s 22 3 2 Ci r c u i t E q u i p m e n t 59 5 , 19 1 75 % 17 1 67 6 38 4 23 1 1 St a t i o n A p p a r a t u s 23 2 1 Cu s t o m e r P r e m i s e s W i r i n g 23 4 1 La r g e P r i v a t e B r a n c h E x c h a n g e s 23 5 1 Pu b l i c T e l e p h o n e T e r m i n a l E q u i p m e n t 23 6 2 Ot h e r T e r m i n a l E q u i p m e n t 24 1 1 Po l e s 15 0 18 % 70 4 85 4 24 2 1 Ae r i a l C a b l e 11 3 13 8 00 % 50 7 19 8 ) 12 3 , 4 4 7 24 2 2 Un d e r g r o u n d C a b l e 13 9 50 % 97 1 11 1 24 2 3 Bu r i e d C a b l e 93 7 04 4 50 % 22 4 15 8 51 2 16 4 71 4 24 2 4 Su b m a r i n e C a b l e 24 2 6 In t r a b u i l d i n g N e t w o r k C a b l e 24 3 1 Ae r i a l W i r e 00 % 24 4 1 Co n d u i t S y s t e m s 76 0 00 % 30 7 06 7 TO T A L D E P R E S T E L P L 93 9 73 5 43 6 75 1 37 4 38 4 85 9 Pl e a s e l i s t i n d i v i d u a l d e p r e c i a t i o n r a t e f o r e a c h a c c o u n t . Re v 3 / 0 2 Pa g e 8 PO T L A T C H A N N U A L R E P O R T F O R S M A L L T E L E P H O N E C O M P A N I E S YE A R E N D E D D E C E M B E R 3 1 , 2 0 0 6 AN A L Y S I S O F E N T R I E S I N A C C U M U L A T E D D E P R E C I A T I O N Ac c o u n t 3 1 0 0 ID A H O O p e r a t i o n s O n l y Ba l a n c e Cr e d i t s Re t i r e m e n t s Ba l a n c e Be g i n n i n g De p r e c i a t i o n Du r i n g an d En d of Y e a r Ra t e Ye a r Ad j u s t m e n t s of Y e a r An a l y s i s o f E n t r i e s i n A c c u m u l a t e d D e p r e c i a t i o n 21 1 2 M o t o r V e h i c l e s 26 1 12 . 4 0 % 98 5 66 3 90 8 21 1 3 A i r c r a f t 00 % 21 1 4 S p e c i a l P u r p o s e V e h i c l e s 00 % 21 1 5 G a r a g e W o r k E q u i p m e n t 00 % 21 1 6 O t h e r W o r k E q u i p m e n t 62 4 50 % 97 1 59 6 21 2 1 B u i l d i n g s 14 4 05 5 00 % 11 , 4 7 8 15 5 53 3 21 2 2 F u r n i t u r e 78 3 80 % 87 1 65 5 21 2 3 O f f i c e E q u i p m e n t 26 9 80 % 12 1 38 9 21 2 4 G e n e r a l P u r p o s e C o m p u t e r s 10 9 01 3 14 . 30 % 26 3 06 7 12 4 34 4 22 1 1 A n a l o g E l e c t r o n i c S w i t c h i n g 00 % 22 1 2 D i g i t a l E l e c t r o n i c S w i t c h i n g 76 6 30 7 80 % 24 3 30 8 84 3 85 8 22 1 5 E l e c t r o - Me c h a n i c a l S w i t c h i n g 00 % 22 2 0 O p e r a t o r S y s t e m s 00 % 22 3 1 R a d i o S y s t e m s 00 % 22 3 2 C i r c u i t E q u i p m e n t 59 5 19 1 75 % 17 1 67 6 38 4 23 1 1 S t a t i o n A p p a r a t u s 00 % 23 2 1 C u s t o m e r P r e m i s e s W i r i n g 00 % 23 4 1 L a r g e P r i v a t e B r a n c h E x c h a n g e s 00 % 23 5 1 P u b l i c T e l e p h o n e T e r m i n a l E q u i p m e n t 00 % 23 6 2 O t h e r T e r m i n a l E q u i p m e n t 00 % 24 1 1 P o l e s 15 0 18 % 70 4 85 4 24 2 1 A e r i a l C a b l e 11 3 13 8 00 % 50 7 19 8 ) 12 3 44 7 24 2 2 U n d e r g r o u n d C a b l e 13 9 50 % 97 1 11 1 24 2 3 B u r i e d C a b l e 93 7 04 4 50 % 22 4 15 8 51 2 16 4 71 4 24 2 4 S u b m a r i n e C a b l e 00 % 24 2 6 I n t r a b u i l d i n g N e t w o r k C a b l e 00 % 24 3 1 A e r i a l W i r e 00 % 24 4 1 C o n d u i t S y s t e m s 76 0 00 % 30 7 06 7 00 % TO T A L 93 9 73 5 43 6 75 1 37 4 38 4 85 9 Pl e a s e l i s t i n d i v i d u a l d e p r e c i a t i o n r a t e f o r e a c h a c c o u n t . Re v 3 / 0 2 Pa g e 9 POTLATCH ANNUAL REPORT FOR SMALL TELEPHONE COMPANIES YEAR ENDED DECEMBER 31 2006 INVESTMENTS Report below the investments in Accounts 1401 1402 and 1406. Identify each investment as to the account in which included. Minor amounts in Account 1406 may be grouped by classes. Description Nonregulated Investments Date Acquired Totals RECEIVABLES Book Cost Investments Disposed of This year Book Cost of Investments Held at d of Year 3,449 449 Itemize amounts show in Accounts 1180, 1190 and 1200. For notes receivable list each note separately and include the maturity date and interest rate. Minor amounts in Account 1210 may be combined. Accounts 11801-11803 11901-1190101 1190210-1190220 1190230 1190240 1190250 1190260 1190300 1190400 1190500 Name of Company Due from Customers TDS Telecom Access Services Billing & Collection National Exchange Carrier Association AR-State Pools Toll Uncollectible Accounts Receivable-Access/BC-Unbille Other FIT Receivable State of Idaho Degartment of Revenue 1210200 Totals Interest Rev 3/02 Page 10 Amount at End of Year Notes AccountsReceivable eceivable 152,404 695 114 558 729 35,421 562 295 198 206 532 024 POTLATCH ANNUAL REPORT FOR SMALL TELEPHONE COMPANIES YEAR ENDED DECEMBER 31 , 2006 NOTES PAYABLE For Notes Payable, list each note separately and include the maturity date and interest rate. Name of Creditor Date of Note Interest Rate Due Date Face Amount NONE Totals ACCOUNTS PAYABLE Report below all Accounts Payable amounting to more than $100. Name of Creditor 4010101 AP Affil-Sys Post 4010102 Accounts Payable - Affiliated Vendors 4010103 AP - Affiliated Vendors Long Term Obligations 4010210 AP IntrX Cr-Toll Bid 4010230 AP-NECA 4010231 AP-NECA ROR Ov Au Rt 4010250 Accounts Payable-IXC TolI- Unbilled 4010260 Accounts Payable-Access/BC-Unbilled 4010300 AP-Vendors 4010305 AP-GR/IR 4010320 AP-Other 4010323 Accounts Payable - Dish 4010324 Accrued Reciprocal Compensation Liability Amount 102 633 598 (15,916) 599 559 300 2,400 121 349 935 035 833 130 195 575 Rev 3/02 Page 11 PO T L A T C H A N N U A L R E P O R T F O R S M A L L T E L E P H O N E C O M P A N I E S YE A R E N D E D D E C E M B E R 3 1 20 0 6 LO N G - T E R M D E B T Ac c o u n t s 4 2 1 0 , 4 2 4 0 , 42 5 0 , 4 2 6 0 , 4 2 7 0 a n d 4 3 1 0 Li s t t h e r e q u i r e d d a t a f o r e a c h o b l i g a t i o n i n c l u d e d i n t h e s e a c c o u n t s , g r o u p i n g t h e m b y a c c o u n t n u m b e r a n d s h o w i n g t o t a l s f o r e a c h a c c o u n t . If a n y o b l i g a t i o n s m a t u r e s e r i a l l y o r o t h e r w i s e a t v a r i o u s d a t e s , g i v e p a r t i c u l a r s i n a n o t e . Cl a s s & S e r i e s of O b l i g a t i o n NO N E Re v 3 / 0 2 Da t e Is s u e Da t e Ma t u r i t y Fa c t Am o u n t Au t h o r i z e d Ou t s t a n d i n g Ye a r - En d Pa g e 1 2 Pr e m i u m / D i s c o u n t Ye a r To t a l Am o r t i z e d In t e r e s t f o r y e a r Ra t e Am o u n t POTLATCH ANNUAL REPORT FOR SMALL TELEPHONE COMPANIES YEAR ENDED DECEMBER 31 , 2006 CAPITAL STOCK Report below the particulars called for concerning common and preferred stock at end of year designating separate series of any general class. Show totals separately for common and preferred. For each class of preferred stock, show the dividend rate and whether dividends are cumulative or noncumulative. Show details in a footnote of capital stock sold during the year. Include number of shares consideration received , premium or discount, and expenses incurred. Class & Series of Stock Common Stock Number Outstanding per of Shares Par Value Balance Sheet Authorized per Share Shares Amount 000 $1.000 000 000 $25.773 $19 325Common Stock Rev 3/02 Page 13 POTLATCH ANNUAL REPORT FOR SMALL TELEPHONE COMPANIES YEAR ENDED DECEMBER 31 , 2006 INCOME & RETAINED EARNINGS STATEMENT Item Total Company Idaho Only Total Operating Income (from page 15) Total Operating Expenses (from page 17) 7100 Other Operating Income and Expense 7210 Operating Investment Tax Credits-Net 7220 Operating Federal Income Taxes 7230 Operating State and Local Income Taxes 7240 Operating Other Taxes 7250 Provision for Deferred Operating Income Taxes-Net7200 Operating Taxes (Total) 7310 Dividend Income 7320 Interest Income 7330 Income from Sinking and Other Funds 7340 Allowance for Funds Used During Construction 7350 Gains/Losses from the Disposition of Certain Property 7360 Other Nonoperating Income 7370 Special Charges7300 Nonoperating Income and Expense 7410 Nonoperating Investment Tax Credits-Net 7420 Nonoperating Federal Income Taxes 7430 Nonoperating State and Local Income Taxes 7440 Nonoperating Other Taxes 7450 Provision for Deferred Nonoperating Income Taxes-Net7400 Nonoperating Taxes 7510 Interest on Funded Debt 7520 Interest Expense-Capital Leases 7530 Amortization of Debt Issuance Expense 7540 Other Interested Deductions7500 Interest and Related Items 7610 Extraordinary Income Credits 7620 Extraordinary Income Charges 7630 Current Income Tax Effect of Extraordinary Items-Net 7640 Provision for Deferred Income Tax Effect of Extraordinary Items-Net7600 Extraordinary Items 7910 Income Effect of Jurisdictional Ratemaking Differences-Net 7990 Nonregulated Net Income AMOUNT TRANSFERRED TO RETAINED EARNINGS Rev 3/02 Page 14 331 199 326 946 (816) 625) 306 645 508) 769 623 405 905 871 (959) 912 904 ) 093) (10 997) 329 329 225 582 519 331 199 326 946 (816) 625) 306 645 508) 769 623 405 905 871 (959) 912 904 ) 093) (10 997) 329 329 225 582 519 POTLATCH ANNUAL REPORT FOR SMALL TELEPHONE COMPANIES YEAR ENDED DECEMBER 31 , 2006 OPERATING REVENUES Item Total Company Idaho Only Local Network Services Revenues 5001 Basic Area Revenue 5002 Optional Extended Area Revenue 5003 Cellular Mobile Revenue 5004 Other Mobile Services Revenue 5010 Public Telephone Revenue 5040 Local Private Line Revenue 5050 Customer Premises Revenue 5060 Other Local Exchange Revenue 5069 Other Local Exchange Settlements Network Access Services Revenues 5081 End User Revenue (SLC) 5082 Switched Access Revenue (Interstate) 5083 Special Access Revenue 5084 State Access Revenue (Intrastate) Long Distance Network Services Revenues 5100 Long Distance Message Revenue - All Miscellaneous Revenues 5230 Directory Revenue 5240 Rent Revenue 5250 Corporate Operations Revenue 5261 Special Billing Arrangements Revenue 5262 Customer Operations Revenue 5263 Plant Operations Revenue 5264 Other Incidental Regulated Revenue 5269 Other Revenue Settlements 5270 Carrier Billing & Collection Revenue Uncollectible Revenues 5301 Uncollectible Revenue - Telecommunications 5302 Uncollectible Revenue - Other TOTAL OPERATING REVENUES Please identify the following revenues: 325 612 563 325 612 563 576 122 566 576 122 566 173 021 675,495 117,411 756,466 173 021 675,495 117,411 756,466 019 706 019 706 767 767 275 275 708 708 985 985) 331 199 331 199 NECA USF $ 236335 To what account were they booked?5082110 State USF $ O. To what account were they booked? Rev 3/02 Page 15 POTLATCH ANNUAL REPORT FOR SMALL TELEPHONE COMPANIES YEAR ENDED DECEMBER 31 , 2006 Item OPERATING EXPENSES Total Company Idaho Only Plant Specific Operations Expense 6110 Network Support Expenses 6112 Motor Vehicle Expense 6113 Aircraft Expense 6114 Special Purpose Vehicles Expense 6115 Garage Work Equipment Expense 6116 Other Work Equipment Expense 6120 General Support Expenses 6121 land and Building Expenses 6122 Furniture and Artworks Expense 6123 Office Equipment Expense 6124 General Purpose Computers Expense 6210 Central Office Switching Expenses 6211 Analog Electronic Expense 6212 Digital Electronic Expense 6215 Electro-Mechanical Expense 6220 Operators System Expense 6230 Central Office Transmission Expenses 6231 Radio Systems Expense 6232 Circuit Equipment Expense 6310 Information Origination/Termination Expense 6311 Station Apparatus Expense 6341 large Private Branch Exchange Expense 6351 Public Telephone Terminal Equipment Expense 6362 Other Terminal Equipment Expense 6410 Cable and Wire Facilities Expenses 6411 Pole Expense 6421 Aerial Cable Expense 6422 Underground Cable Expense 6423 Buried Cable Expense 6424 Submarine Cable Expense 6425 Deep Sea Cable Expense 6426 Intrabuilding Network Cable Expense 6431 Aerial Wire Expense 6441 Conduit Systems Expense TOTAL PLANT SPECIFIC OPERATIONS EXPENSE Rev 3/02 285 159 14,429 (54) (24) 838 839 972 356 050 200 163 087 Page 16 285 159 14,429 (54) (24) 838 61 ,839 972 356 050 200 163 087 POTLATCH ANNUAL REPORT FOR SMALL TELEPHONE COMPANIES YEAR ENDED DECEMBER 31 , 2006 OPERATING EXPENSES Item Total Company Idaho Only Plant Nonspecific Operations Expense 6510 Other Property/PlanUEquipment Expenses 6511 Property Held for Future Telecomm. Use Expenses 6512 Provisioning Expense 6530 Network Operations Expense 6531 Power Expense 6532 Network Administration Expense 6533 Testing Expense 6534 Plant Operations Administration Expense 6535 Engineering Expense 6540 Access Expense 6560 Depreciation and Amortization Expenses 6561 Depreciation Expense-Telecom. Plant in Service 6562 Depreciation Expense-Property Held for Future Use 6563 Amortization Expense - Tangible 6564 Amortization Expense - Intangible 6565 Amortization Expense - Other Total Plant Nonspecific Operations Expenses Customer Operations Expense 6610 Marketing 6611 Product Management 6612 Sales 6613 Product Advertising 6620 Services 6621 Call Completion Services 6622 Number Services 6623 Customer Services Total Customer Operations Expense Corporate Operations Expense 6710 Executive and Planning 6711 Executive 6712 Planning 6720 General and Administrative 6721 Accounting and Finance 6722 External Relations 6723 Human Resources 6724 Information Management 6725 Legal 6726 Procurement 6727 Research and Development 6728 Other General and Administrative 6790 Provision for Uncollectible Notes Receivable Total Corporate Operations Expense TOTAL OPERATING EXPENSES (EXCLUDE OPERATING TAXES & Acct. 711 713,715 716. Rev 3/02 Page 17 185 185 853 853 509 509 819 819 315 315 510 25,510 435 119 435,119 118 118 22,436 22,436 608 863 608 863 14,432 831 607 14,432 831 607 478 297 138 704 235 350 478 297 138,704 235,350 227 227 892 892 875 875 243 243 950 950 157 157 13,146 146 834 834 324 324 319 647 319 647 326 946 326 946 Na m e o f C e n t r a l O f f i c e : J u l i e t t a Pr e f i x ( e s ) : 2 7 6 Ce n t r a l O f f i c e S w i t c h Ch e c k a l l t h a t a p p l y : St a n d A l o n e Ho s t Re m o t e X Ac c e s s L i n e C a p a c i t y De s i g n : 3 84 0 PO T L A T C H A N N U A L R E P O R T F O R S M A L L T E L E P H O N E C O M P A N I E S YE A R E N D E D D E C E M B E R 3 1 , 2 0 0 6 CE N T R A L O F F I C E D A T A as o f D e c e m b e r 3 1 , 2 0 0 3 ( u n l e s s o t h e r w i s e i n d i c a t e d ) Ty p e : E W S D Ch e c k o n e : Di g i t a l X An a l o g In s t a l l e d / E q u i p p e d : 1 28 0 W i r e d / 4 4 8 E q u i p p e d Cl a s s i f i c a t i o n o f C u s t o m e r A c c e s s Mu l t i - Li n e pa r t y Be g i n n i n g o f Y e a r Ne w C o n n e c t s Di s c o n n e c t s En d o f Y e a r Fo r e i g n E x c h a n g e : Di a l T o n e f r o m t h i s C . Di a l T o n e f r o m a n o t h e r C . Re s i d e n c e Si n g l e L i n e Mu l t i - pa r t y Pa r t y 47 0 (3 0 ) 44 0 Cu s t o m C a l l i n g : Nu m b e r o f c u s t o m e r s w i t h a t l e a s t o n e f e a t u r e : To t a l n u m b e r o f f e a t u r e s s u b s c r i b e d t o : Re v 3 / 0 2 Bu s i n e s s Si n g l e L i n e Mu l t i - Pa r t y Pa r t y Ch e c k o n e : El e c t r o n i c El e c t r o - Me c h a n i c a l Ot h e r : Ac c e s s L i n e s i n U s e Cu s t o m e r L i n e s : 50 0 (I n c l u d e C e n t r e x , P A L , S e m i - Pu b . Pu b l i c T e l e p h o n e L i n e s Co m p a n y O f f i c i a l L i n e s Co m p a n y T e s t L i n e s Su b t o t a l Re s i d e n c e Ce n t r e x NA R . Mu l t i - Li n e Pa r t y 47 0 (3 0 ) 44 0 Di r e c t o r y L i s t i n g s : Nu m b e r o f C u s t o m e r s w i t h N o n p u b l i s h e d o r N o n l i s t e d : Pa g e 1 8 b Su b t o t a l Bu s i n e s s To t a l Re s i d e n c e & B u s i n e s s 52 6 (3 0 ) 50 0 Na m e o f C e n t r a l O f f i c e : K e n d r i c k Pr e f i x ( e s ) : 2 8 9 Ce n t r a l O f f i c e S w i t c h Ch e c k a l l t h a t a p p l y : St a n d A l o n e Ho s t Re m o t e Ac c e s s L i n e C a p a c i t y De s i g n : 3 , 84 0 Ty p e : E W S D Ch e c k o n e : Di g i t a l X An a l o g In s t a l l e d / E q u i p p e d : 1 28 0 W i r e d / 5 7 6 E q u i p p e d Cl a s s i f i c a t i o n o f C u s t o m e r A c c e s s Mu l t i - Li n e Pa r t y Be g i n n i n g o f Y e a r Ne w C o n n e c t s Di s c o n n e c t s En d o f Y e a r Fo r e i g n E x c h a n g e : Di a l T o n e f r o m t h i s C . Di a l T o n e f r o m a n o t h e r C . PO T L A T C H A N N U A L R E P O R T F O R S M A L L T E L E P H O N E C O M P A N I E S YE A R E N D E D D E C E M B E R 3 1 20 0 6 CE N T R A L O F F I C E D A T A as o f D e c e m b e r 3 1 , 2 0 0 3 ( u n l e s s o t h e r w i s e i n d i c a t e d ) Re s i d e n c e Si n g l e L i n e Mu l t i - Pa r t y Pa r t y 52 2 49 9 Cu s t o m C a l l i n g : Nu m b e r o f c u s t o m e r s w i t h a t l e a s t o n e f e a t u r e : To t a l n u m b e r o f f e a t u r e s s u b s c r i b e d t o : Re v 3 / 0 2 Ch e c k o n e : El e c t r o n i c El e c t r o - Me c h a n i c a l Ot h e r : Ac c e s s L i n e s i n U s e Cu s t o m e r L i n e s : 65 9 (I n c l u d e C e n t r e x , P A L , S e m i - Pu b . Pu b l i c T e l e p h o n e L i n e s Co m p a n y O f f i c i a l L i n e s Co m p a n y T e s t L i n e s Su b t o t a l Re s i d e n c e 52 2 49 9 Di r e c t o r y L i s t i n g s : Ce n t r e x NA R . Bu s i n e s s Mu l t i - Si n g l e L i n e To t a l Li n e Mu l t i - Su b t o t a l Re s i d e n c e Pa r t y Pa r t y Pa r t y Bu s i n e s s & B u s i n e s s 16 8 16 8 69 0 16 0 16 0 65 9 10 2 Nu m b e r o f C u s t o m e r s w i t h N o n p u b l i s h e d o r N o n l i s t e d : Pa g e 1 8 Na m e o f C e n t r a l O f f i c e : T r o y Pr e f i x ( e s ) : 8 3 5 Ce n t r a l O f f i c e S w i t c h Ch e c k a l l t h a t a p p l y : St a n d A l o n e Ho s t Re m o t e X Ac c e s s L i n e C a p a c i t y De s i g n : 3 , 80 0 PO T L A T C H A N N U A L R E P O R T F O R S M A L L T E L E P H O N E C O M P A N I E S YE A R E N D E D D E C E M B E R 3 1 20 0 6 CE N T R A L O F F I C E D A T A as o f D e c e m b e r 3 1 , 20 0 3 ( u n l e s s o t h e r w i s e i n d i c a t e d ) Ty p e : E W S D Ch e c k o n e : Di g i t a l X An a l o g In s t a l l e d / E q u i p p e d : 1 87 6 W i r e d / 9 5 5 E q u i p p e d Cl a s s i f i c a t i o n o f C u s t o m e r A c c e s s Mu l t i - Li n e Pa r t y Be g i n n i n g o f Y e a r Ne w C o n n e c t s Di s c o n n e c t s En d o f Y e a r Fo r e i g n E x c h a n g e : Di a l T o n e f r o m t h i s C . Di a l T o n e f r o m a n o t h e r C . Re s i d e n c e Si n g l e L i n e Mu l t i - Pa r t y Pa r t y 80 0 76 6 Cu s t o m C a l l i n g : Nu m b e r o f c u s t o m e r s w i t h a t l e a s t o n e f e a t u r e : To t a l n u m b e r o f f e a t u r e s s u b s c r i b e d t o : Ch e c k o n e : El e c t r o n i c El e c t r o - Me c h a n i c a l Ot h e r : Ac c e s s L i n e s i n U s e Cu s t o m e r L i n e s : 90 7 (I n c l u d e C e n t r e x , P A L , S e m i - Pu b . Pu b l i c T e l e p h o n e L i n e s Co m p a n y O f f i c i a l L i n e s Co m p a n y T e s t L i n e s Su b t o t a l Re s i d e n c e Ce n t r e x NA R . 80 0 76 6 Mu l t i - Li n e Pa r t y Bu s i n e s s Si n g l e L i n e Mu l t i - Pa r t y Pa r t y 14 3 14 1 Di r e c t o r y L i s t i n g s : Nu m b e r o f C u s t o m e r s w i t h N o n p u b l i s h e d o r N o n l i s t e d : Pa g e 1 8 c 12 1 Su b t o t a l Bu s i n e s s 14 3 (2 ) 14 1 To t a l Re s i d e n c e & B u s i n e s s 94 3 (3 6 ) 90 7 PO T L A T C H A N N U A L R E P O R T F O R S M A L L T E L E P H O N E C O M P A N I E S YE A R E N D E D D E C E M B E R 3 1 , 2 0 0 6 NU M B E R O F C A L L S C O M P L E T E D B Y C U S T O M E R S D U R I N G 2 0 0 6 2 J u l i e t t a 11 3 Lo c a l C a l l s Nu m b e r Av g . / (1 0 0 0 s ) Li n e 14 5 91 3 1 96 2 To l l C a l l s O r i q i n a t e d ( T o t a l o f a l l C a r r i e r s ) Av g . / In t r a s t a t e In t e r s t a t e To t a l Li n e 09 8 29 1 15 2 20 6 25 0 , 4 9 7 2, 4 8 5 Lo c a l E x c h a n g e 1 K e n d r i c k Av e r a g e # of C u s t o m e r Li n e s i n U s e 3 T r o y (A ) A l l l o c a l c a l l s a r e r o u t e d th r o u g h K e n d r i c k . T h e i n f o r m a t i o n i n li n e o n e r e f l e c t s t h e d a t a fo r K e n d r i c k , J u l i e t t a a n d T r o y e x c h a m g e s . Pa g e 1 9 POTLATCH ANNUAL REPORT FOR SMALL TELEPHONE COMPANIES YEAR ENDED DECEMBER 31 2006 CUSTOMER RELATIONS RULES COMPLIANCE Rule IDAPA 31.21.01.603 Rule IDAPA 31.41.01.105 Please provide copies of: Summary of Customer Relations Rules for Telephone Corporations Idaho Telephone Solicitation Act Notification Method of Notification: Mailed separately to customers Yes Included in directory Yes - No Date of notification November 1, 2006 Alternate method of notification Rule IDAPA 31.41.01.403. Record of Complaints: Number received by Company Category of complaints (if known): Deposit Disputes N/A Charges on Bill N/A Den ial/T erm ination N/A Quality or Availability of Service Carrier Selection/Assignment N/A Miscellaneous Page 20 POTLATCH ANNUAL REPORT FOR SMALL TELEPHONE COMPANIES YEAR ENDED DECEMBER 31 , 2006 CERTIFICATE County of Latah ) ss State of Idaho , the undersigned John Erpenbach and David Jones of the Potlatch Telephone Company utility on our oath do severally say that the foregoing return has been prepared under our direction, from the original books, papers, and records of said utility; that we have carefully examined same, and declare the same to be a correct statement of the business affairs of said utility for the period covered by the return in respect to each and every matter and thing therein set forth, to the best of our knowledge, information and belief. Z: (Chie er) Subscribed and Sworn to Before Me this ""- day of )i~ r"', (Year) .,?tJ6 /o~1. ota;y Public My Commission expires tt /;tJ , (Year) :( 06 gdklexce IIi nelson/ an u I rpts/tela n n ua Irpt Rev 3/02 Page 21