<PAGE>   1
                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

                For the quarterly period ended September 30, 1996

                                       OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934

             For the transition period from __________ to __________


                           Commission File No. 1-7852


                               POPE & TALBOT, INC.


            Delaware                                     94-0777139
(State or other jurisdiction of            I.R.S. Employer Identification Number
incorporation or organization)

1500 S.W. 1st Ave., Portland, Oregon                            97201
(Address of principal executive offices)                      (Zip Code)


Registrant's telephone number, including area code:         (503) 228-9161



                                      NONE
Former name, former address and former fiscal year, if changed since last
report.


Indicate by checkmark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                                  Yes  X     No
                                      ----      ----

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the close of the latest practicable date.

      Common stock, $1 par value - 13,363,779 shares as of November 5, 1996
<PAGE>   2
PART I.   FINANCIAL INFORMATION

                                                                       Page No.
                                                                       --------
   ITEM 1.      Financial Statements:

        Consolidated Condensed Balance Sheets -
          September 30, 1996 and December 31, 1995                          2

        Consolidated Statements of Income -
          Three and Nine Months Ended September 30, 1996 and 1995           3

        Consolidated Condensed Statements of Cash Flows -
          Three and Nine Months Ended September 30, 1996 and 1995           4

        Notes to Consolidated Condensed Financial Statements                5


   ITEM 2.      Management's Discussion and Analysis of
                Financial Condition and Results of Operations             6-9


PART II.  OTHER INFORMATION

   ITEM 6.      Exhibits and Reports on Form 8-K                         10-12
<PAGE>   3
PART I.
                               POPE & TALBOT, INC.
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                                   (Unaudited)
                             (Dollars in Thousands)

<TABLE>
<CAPTION>
                                                         September 30,        December 31,
                                                              1996                1995
                                                         ------------         ------------
<S>                                                      <C>                 <C>
         ASSETS
Current assets:
     Cash and cash equivalents                             $  36,419           $  13,826
     Marketable securities                                     8,231                   -
     Accounts receivable                                      42,920              52,931
     Inventories:
         Raw materials                                        41,867              40,458
         Finished goods                                       26,993              28,252
                                                           ---------           ---------
                                                              68,860              68,710
     Prepaid expenses and other                               15,141              15,616
     Discontinued operations assets held for sale                  -              56,169
                                                           ---------           ---------
              Total current assets                           171,571             207,252

Properties:
     Plant and equipment                                     456,248             447,577
     Accumulated depreciation                               (260,127)           (232,199)
                                                           ---------           ---------
                                                             196,121             215,378
     Land and timber cutting rights                           10,315              10,382
                                                           ---------           ---------
              Total properties                               206,436             225,760

Other assets:
     Deferred income tax assets, net                          18,236              16,531
     Goodwill, net of amortization                             3,905               4,029
     Other                                                    18,019              18,655
                                                           ---------           ---------
              Total other assets                              40,160              39,215
                                                           ---------           ---------
                                                           $ 418,167           $ 472,227
                                                           =========           =========

         LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
     Notes payable                                         $  37,000           $  43,000
     Current portion of long-term debt                           457                 457
     Accounts payable and accrued liabilities                 57,222              66,007
     Income taxes                                                431               4,031
                                                           ---------           ---------
              Total current liabilities                       95,110             113,495

Noncurrent liabilities:
     Reforestation                                            17,022              16,617
     Postretirement benefits                                  13,408              13,909
     Long-term debt, net of current portion                  108,174             138,514
                                                           ---------           ---------
              Total noncurrent liabilities                   138,604             169,040

Stockholders' equity:
     Common stock                                             13,972              13,972
     Additional paid-in capital                               35,976              35,976
     Retained earnings                                       151,337             156,810
     Cumulative translation adjustments                       (5,721)             (5,955)
     Less treasury shares at cost                            (11,111)            (11,111)
                                                           ---------           ---------
              Total stockholders' equity                     184,453             189,692
                                                           ---------           ---------
                                                           $ 418,167           $ 472,227
                                                           =========           =========
</TABLE>

The accompanying notes are an integral part of these consolidated condensed
balance sheets.

                                      2
<PAGE>   4
                               POPE & TALBOT, INC.
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)
                 (Dollars in Thousands Except Per Share Amounts)



<TABLE>
<CAPTION>
                                                             Three months ended             Nine months ended
                                                                September 30,                 September 30,
                                                       ---------------------------    --------------------------
                                                           1996            1995           1996            1995
                                                           ----            ----           ----            ----
<S>                                                    <C>             <C>            <C>            <C>
Revenues:
   Wood products                                       $    58,939     $    67,237    $   169,538    $   198,667
   Pulp and paper products                                  53,427          64,536        164,077        191,434
                                                       -----------     -----------    -----------    -----------
     Total                                                 112,366         131,773        333,615        390,101

Costs and expenses:
   Cost of sales:
     Wood products                                          50,678          65,121        152,306        193,529
     Pulp and paper products                                52,589          63,054        162,501        187,936
   Selling, general and administrative                       4,193           4,603         12,937         15,120
   Interest, net                                             2,178           3,567          6,647         10,695
                                                       -----------     -----------    -----------    -----------
     Total                                                 109,638         136,345        334,391        407,280

Income (loss) before income taxes and
  discontinued operations                                    2,728          (4,572)          (776)       (17,179)

Income tax provision (benefit)                               1,591          (1,192)           190         (6,433)
                                                       -----------     -----------    -----------    -----------

Income (loss) from continuing operations                     1,137          (3,380)          (966)       (10,746)

Discontinued operations:
   Loss from discontinued operations (net of
     tax benefit of $1,189 and $2,814 for three and
     nine months ended September 30, 1995,
     respectively)                                               -          (3,265)             -         (6,144)
   Gain on disposal of discontinued operations
     (net of applicable income taxes of $2,074)                  -               -          3,110              -
                                                       -----------     -----------    -----------    -----------

Net income (loss)                                      $     1,137     $    (6,645)   $     2,144    $   (16,890)
                                                       ===========     ===========    ===========    ===========

Income (loss) per common share:
     Income (loss) from continuing operations          $       .08     $     (.25)    $      (.07)   $      (.81)
     Income (loss) from discontinued operations                  -           (.24)            .23           (.45)
                                                       -----------     ----------     -----------    -----------
       Net income (loss)                               $       .08     $     (.49)    $       .16    $     (1.26)
                                                       ===========     ==========     ===========    ===========

Cash dividends per common share                        $       .19     $      .19     $       .57    $       .57
                                                       ===========     ==========     ===========    ===========

Weighted average number of
   common shares outstanding                            13,363,779      13,363,779     13,363,779     13,363,433
                                                        ==========      ==========     ==========     ==========
</TABLE>





The accompanying notes are an integral part of these consolidated condensed
financial statements.

                                      3
<PAGE>   5
                               POPE & TALBOT, INC.
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                             (Dollars in Thousands)

<TABLE>
<CAPTION>
                                                                            Three months ended                Nine months ended
                                                                               September 30,                    September 30,
                                                                        -------------------------        -------------------------
                                                                          1996             1995             1996            1995
                                                                          ----             ----             ----            ----
<S>                                                                     <C>            <C>               <C>            <C>
Cash flow from operating activities:
   Net income (loss)                                                    $    1,137     $   (6,645)       $    2,144     $  (16,890)
   Adjustments to reconcile net income (loss) to net
     cash provided by operating activities:
       Depreciation and amortization                                         7,749         11,263            23,739         32,775
       Gain on disposal of discontinued operations                               -              -            (5,184)             -
       Increase (decrease) in:
           Accounts payable and accrued liabilities                          7,582          7,398           (11,196)       (10,946)
           Income taxes                                                        326         (1,099)           (3,600)        (6,959)
           Reforestation                                                      (329)            23               375            613
           Postretirement benefits                                             226            196               574            631
           Deferred income taxes, net                                         (894)        (2,740)           (1,701)       (10,105)
       Decrease (increase) in:
           Accounts receivable                                              (4,749)           904             9,861          2,391
           Inventories                                                     (10,838)         7,975                96         34,910
           Deposits on timber purchase contracts                               963          2,547              (145)           147
           Prepaid expenses and other                                          228            847            (1,342)        (1,096)
           Deferred charges and other                                       (1,359)          (936)             (670)        (4,573)
                                                                        ----------     ----------        ----------     ----------
                  Net cash provided by operating activities                     42         19,733            12,951         20,898

Cash flow from investing activities:
   Capital expenditures                                                     (2,087)        (6,901)           (3,944)       (25,443)
   Proceeds from disposal of discontinued operations                             -              -            50,500              -
   Proceeds from sale of Paragon Trade Brands, Inc.
     common stock                                                                -              -             4,819              -
   Proceeds from sale of other properties                                       10            186             2,224            487
                                                                        ----------     ----------        ----------     ----------
                  Net cash provided by (used for)
                    investing activities                                    (2,077)        (6,715)           53,599        (24,956)

Cash flow from financing activities:
   Net increase (decrease) in short-term borrowings                         33,000        (11,200)           (6,000)        (5,000)
   Net reduction of long-term debt                                            (115)          (108)          (30,340)          (319)
   Cash dividends                                                           (2,539)        (2,539)           (7,617)        (7,617)
   Decrease in restricted bond funds                                             -          4,987                 -         14,607
   Net proceeds from issuance of treasury stock                                  -              -                 -             15
                                                                        ----------     ----------        ----------     ----------
                  Net cash provided by (used for)
                    financing activities                                    30,346         (8,860)          (43,957)         1,686
                                                                        ----------     ----------        ----------     ----------

                  Increase (decrease) in cash and
                    cash equivalents                                        28,311          4,158            22,593         (2,372)

                  Cash and cash equivalents at
                    beginning of period                                      8,108            317            13,826          6,847
                                                                        ----------     ----------        ----------     ----------

                  Cash and cash equivalents at
                    end of period                                       $   36,419     $    4,475        $   36,419     $    4,475
                                                                        ==========     ==========        ==========     ==========
</TABLE>


The accompanying notes are an integral part of these consolidated condensed
financial statements.

                                      4
<PAGE>   6
                               POPE & TALBOT, INC.
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                           September 30, 1996 and 1995
                                   (Unaudited)

1.   General

         The consolidated condensed interim financial statements have been
         prepared by the Company without audit and are subject to normal
         recurring year-end adjustments. Certain information and footnote
         disclosure normally included in financial statements prepared in
         accordance with generally accepted accounting principles has been
         condensed or omitted pursuant to the rules and regulations of the
         Securities and Exchange Commission. In the opinion of the Company, the
         accompanying unaudited consolidated condensed financial statements
         contain all adjustments (all of which are of a normal recurring nature)
         necessary to present fairly the financial position of the Company as of
         September 30, 1996 and December 31, 1995, and the results of operations
         and changes in cash flows for the three and nine months ended September
         30, 1996 and 1995. It is suggested that these interim statements be
         read in conjunction with the financial statements and notes thereto
         contained in the Company's 1995 report on Form 10-K. The results of
         operations for the three and nine months ended September 30, 1996 and
         1995 are not necessarily indicative of the results to be expected for
         the full year.

2.   Income Taxes

         The income tax provision is estimated on an interim basis using the
         best available information for projected results for the entire year.

3.   Earnings per Share

         Per share information is based on the weighted average number of common
         shares outstanding during each period.

         Refer to Exhibit 11.1 of this filing for the computation of average
         common shares outstanding and earnings per share.

4.   Discontinued Operations

         On December 11, 1995, the Company entered into a definitive agreement
         to sell its disposable diaper business (the "business") to Paragon
         Trade Brands, Inc. (Paragon). On February 8, 1996, the sale was
         completed. The Company sold substantially all the operating assets of
         the business, primarily properties and inventories, to Paragon for
         $50.5 million in cash and shares of unregistered Paragon common stock
         having a value at the time the transaction was closed of approximately
         $13.0 million. In the first quarter, pursuant to a stockholders'
         agreement between the Company and Paragon, Paragon exercised an option
         to repurchase 227,719 shares from the Company resulting in proceeds to
         the Company of $4.8 million. The Company's remaining investment in
         Paragon common stock is valued at $8.2 million and is included in the
         Consolidated Condensed Balance Sheets at September 30, 1996 as
         marketable securities. The pre-tax gain on disposition of the business
         of $5.2 million has been accounted for as discontinued operations and
         includes closing costs associated with the transaction and a provision
         of $0.4 million for operating losses during the phase-out period. The
         prior year Consolidated Statement of Income has been restated to
         reflect the discontinuation of the diaper business.

                                      5
<PAGE>   7
                               POPE & TALBOT, INC.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                           SEPTEMBER 30, 1996 AND 1995
                                   (unaudited)


RESULTS OF OPERATIONS


Solid operating profits in the wood products segment more than offset a small
loss in the pulp and paper products segment resulting in third quarter 1996
income of $1,137,000, or $.08 per share, for Pope & Talbot, Inc. (the
"Company"). The 1996 third quarter income was an improvement over the third
quarter 1995 loss from continuing operations of $3,380,000, or $.25 per share.
The third quarter of 1995 also had a loss from discontinued diaper operations of
$3,265,000, or $.24 per share. The Company's diaper business was sold in the
first quarter of 1996. Third quarter 1996 revenues of $112,366,000 were 15
percent below the third quarter of 1995 as lower pulp and wood chip revenues
combined with sales lost as a result of the late 1995 closure of the Port Gamble
sawmill more than offset higher tissue and lumber sales. Third quarter 1996
year-to-date net income totaled $2,144,000, or $.16 per share, reflecting a loss
from continuing operations of $966,000, or $.07 per share, and a gain on the
disposal of the Company's discontinued diaper business of $3,110,000, or $.23
per share. For the corresponding nine months of 1995, the Company incurred a
loss from continuing operations of $10,746,000, or $.81 per share, and a loss
from discontinued operations of $6,144,000, or $.45 per share.

Wood products segment earnings of $7.1 million in the third quarter of 1996
compared to income of $1.2 million in the third quarter of 1995. This segment
represented 52 percent of third quarter 1996 revenues. Third quarter 1996
year-to-date wood products earnings were $14.1 million versus income of $1.6
million in the comparable 1995 period. Included in the 1996 year-to-date results
was a $2.1 million gain recorded in the first quarter related to the sale of
sawmill equipment at Port Gamble. The Port Gamble facility was permanently shut
down in the fourth quarter of 1995 due to the increasing difficulty in obtaining
an adequate supply of acceptably priced logs. Difficult winter weather
conditions across the U.S. limited upward movement of lumber sales prices for
much of the first quarter of 1996. At the end of the 1996 first quarter, lumber
prices began to improve and this price improvement continued during the second
and third quarters. Overall lumber prices in the third quarter of 1996 were 23
percent and 8 percent better than during the 1996 first and second quarters,
respectively, and were 26 percent higher than in the third quarter of 1995.
Average lumber prices for the first nine months of 1996 were 12 percent higher
than the 1995 period. Although lumber prices have increased in 1996, the market
for the sawmill residual wood chips in the Pacific Northwest and British
Columbia has fallen dramatically since the fourth quarter of 1995, reflecting
weak pulp markets. The residual chip market moved up steadily during 1995 to
peak levels in the third and early fourth quarters, however, with the falling
pulp markets, chip prices have fallen sharply since the peaks. Third quarter
1996 chip prices were down 12 percent from the 1996 second quarter at levels
about 45 percent less than first quarter averages and were down more than 60
percent from those obtained in the third quarter of 1995. The residual chip
market seems to have bottomed in the middle of the second quarter of 1996.
Year-to-date 1996 chip prices were down about 40 percent from those obtained in
the comparable 1995 period. The Company uses residual chips in its pulp business
which mitigates somewhat the impact of these falling chip prices. However, the
Company produces more residual chips in its lumber business than it consumes in
the pulp business, so on balance, declining chip prices have a detrimental
impact on the Company's operating results.

                                      6
<PAGE>   8

Third quarter 1996 lumber sales volume of 131 million board feet compared to
shipments of 149 million board feet in the third quarter of 1995. Shipments for
the first nine months of 1996 totaled 400 million board feet compared to 474
million board feet during the 1995 period. The year-to-year volume reductions
related mainly to the Port Gamble sawmill closure. The Company's sawmills
operated at capacity in the third quarter of 1996.

During the first quarter of 1996, U.S. and Canadian trade negotiators reached an
agreement establishing volume quotas on Canadian softwood lumber shipments to
the U.S. The 5-year agreement took effect April 1, 1996. The quotas specify on a
company by company basis the lumber volumes which may be shipped to the U.S.
tariff-free and those volumes which may be shipped to the U.S. subject to a $50
per thousand board foot tariff. Shipment volumes in excess of these established
quotas are subject to a $100 per thousand board foot tariff. For purposes of
determining tariff levels, the quota volumes are evaluated annually during the
April 1 through March 31 fiscal year, and are further measured on a quarterly
basis within each fiscal year. The Company was informed of its fiscal year
1996/1997 quota volumes in late October 1996. The Company believes its volume
allocations were determined consistently with other Canadian lumber companies.
The Canadian government may adjust company by company allocations for future
fiscal year quota periods. Since the quota agreement was made earlier in 1996,
domestic lumber markets have demonstrated periods of dramatic instability,
including some positive and some negative movements. During the time since 
company allocations were communicated at the end of October, prices for 
certain grades of lumber have increased significantly to record high levels. 
Random Lengths Lumber Composite Prices increased nearly 10 percent for the 
week immediately following the allocation announcements and were almost 10 
percent higher than the Random Lengths Composite average for the 1996 third 
quarter. It is unknown whether lumber prices will remain at the present levels
or will move upward or downward. Due to these lumber market uncertainties 
resulting from the recently assigned quota levels, the Company cannot currently
predict with any certainty the impact of these quotas on the Company's results
of operations. Approximately 73 percent of the Company's 1996 lumber capacity 
is located in British Columbia, Canada.

The pulp and paper segment incurred a loss of $0.5 million in the third quarter
of 1996 compared to a loss of $0.2 million in the third quarter of 1995.
Year-to-date results reflect losses of $2.6 million and $1.6 million in 1996 and
1995, respectively. In the third quarter of 1996, continued improvements in
tissue offset pulp losses caused by a weak pulp market. Segment revenues of
$53.4 million, or 48 percent of Company sales, were down 17 percent from the
third quarter of 1995. Year-to-date segment revenues of $164.1 million compared
to $191.4 million in the prior year. This year-to-year revenue reduction was due
mainly to lower pulp prices and volume which combined with lower brokered wood
chip sales to more than offset stronger tissue volume and prices.

The Company's pulp business represented 17 percent of third quarter revenues.
Third quarter 1996 pulp pricing was comparable to the second quarter at
depressed end of first quarter levels following the rapid declines which began
in the fourth quarter of 1995. The late 1995, early 1996 price declines followed
a period of continuously improving prices which began in 1994. 1994 prices for
the Company's pulp were 25 percent higher than 1993 and 1995 prices averaged 70
percent higher than those in 1994. The Company's third quarter 1996 prices were
45 percent below the corresponding 1995 period at levels approximating the 1996
second quarter, but were 23 percent lower than the 1996 first quarter prices.
Year-to-date 1996 pulp prices were down 35 percent from those in the first nine
months of 1995. Although the Company's pulp prices have decreased significantly,
the reductions have not been as large as the declines in market pulp due to the
Company's pulp supply agreement with Grays Harbor Paper Company. Sales of pulp
to Grays Harbor represented about 60 percent of the

                                      7
<PAGE>   9

Company's year-to-date 1996 pulp sales and 70 percent of third quarter pulp
revenues. Grays Harbor sales were 60 percent of the Company's pulp revenues in
the third quarter and first nine months of 1995. The Company's agreement with
Grays Harbor adjusts pulp prices based on copy and business printing paper
prices which have declined at a slower rate than market pulp. As discussed for
the Company's Wood Products segment, residual wood chip prices declined
dramatically into the second quarter of 1996 and remained at these low levels
during the 1996 third quarter. These chip price reductions have helped somewhat
to offset the impact of the falling pulp sales prices. Approximately 41 percent
of the Company's third quarter 1996 pulp sales was produced from softwood
chips, while 50 percent was produced from sawdust and 9 percent from hardwood
chips. During the third quarter of 1996, the Halsey mill operated at 90 percent
of capacity compared to full capacity operations in the third quarter of 1995.
The below-capacity third quarter 1996 production related mainly to a 9 day
scheduled maintenance shutdown.

The Company's tissue business, which represented 31 percent of 1996 third
quarter revenues, was profitable for the third consecutive quarter compared to
significant losses incurred in the corresponding 1995 period. This improved
profitability reflected higher tissue prices and significantly lower wastepaper
costs combined with the benefit of settling the seven-month Ransom labor
contract strike at the end of 1995. The Ransom hourly employees went on strike
during the second quarter of 1995 which significantly reduced operating
efficiencies and shipment volumes. During the time since the strike settlement,
the Company has been rebuilding business that was lost as a result of the
strike. Third quarter and year-to-date 1996 tissue sales volumes were 50 percent
and 6 percent, respectively, higher than the corresponding 1995 periods due to
the impact of the Ransom labor strike. Tissue pricing began to stabilize during
1994 after several years of decline and, during 1995, the Company benefited from
continuously improving prices throughout the year. First quarter 1996 tissue
prices were essentially flat relative to the fourth quarter of 1995, while
second and third quarter 1996 prices were 2 percent and 5 percent, respectively,
below first quarter levels. Third quarter 1996 tissue prices were 3 percent
higher than the comparable 1995 period. Year-to-date 1996 tissue prices were 18
percent higher than for the first nine months of 1995. The second and third
quarter 1996 price drops relative to the 1996 first quarter reflected the
Company's response to the early second quarter 6 to 8 percent average tissue
price reductions announced by Procter & Gamble and Kimberly-Clark. The Company's
price decreases were not implemented until late in the 1996 second quarter.
During 1995, wastepaper pricing was pushed to record levels by a combination of
strong pulp markets and shortages of certain wastepaper grades caused by the
start-up of new recycled fiber mills in the United States. As a result of these
pressures, wastepaper prices during 1995 doubled over 1994 pricing although by
year-end 1995 wastepaper prices began to decline, consistent with market pulp
prices. This late 1995 decline accelerated through the first quarter into the
early second quarter of 1996 when prices leveled. Third quarter and year-to-date
1996 wastepaper costs were less than half those in the comparable 1995 periods.
During the third quarter of 1996, the Company's tissue business operated at
approximately 95 percent of capacity. This slightly below-capacity third quarter
1996 production reflected below-capacity operations of the Company's Ransom,
Pennsylvania tissue mill which represents 50 percent of the Company's tissue
capacity.

LIQUIDITY AND CAPITAL RESOURCES

During the first nine months of 1996, operations generated cash of $13.0
million. Income before non-cash charges for depreciation and amortization
generated $25.9 million of cash during the first nine months of 1996. Reductions
of accounts payable and accrued liabilities used cash of $11.2 million. These
reductions related mainly to payment of discontinued diaper

                                      8
<PAGE>   10

business liabilities combined with reductions due to payment timing on other
payables and accruals. Payment of income tax obligations, primarily the 1995
Canadian tax liability, used $3.6 million cash. Collections of accounts
receivables related primarily to the discontinued diaper operations generated
cash of $9.9 million in the first nine months of 1996.

On December 11, 1995, the Company entered into a definitive agreement to sell
its disposable diaper business to Paragon Trade Brands, Inc. (Paragon). The sale
of the diaper business was completed on February 8, 1996. During the first
quarter of 1996, the Company received cash related to the sale of $55.3 million
and 387,801 shares of Paragon common stock then valued at $8.2 million. The
Company used the cash received mainly to pay short- and long-term debt
obligations. The Company's investment in Paragon common stock is reflected as
marketable securities in the Consolidated Balance Sheets.

The Company is presently limiting capital spending to those projects required to
sustain existing operations. Capital spending for the first nine months of 1996
was unusually low at $3.9 million and was used for various small,
business-sustaining projects. The Company anticipates that approximately $3
million will be required to complete previously approved projects. It is
anticipated that the capital spending for the remainder of the year will be
financed from internally generated cash and, if necessary, from the Company's
line of credit.

Through the first nine months of 1996, the Company returned $7.6 million to
shareholders in the form of dividends. The Company has reduced its debt levels
by $36.3 million during the first nine months of 1996. In July of 1996, the
Company borrowed $30.0 million on its revolving-credit agreement which it then
paid to Pope & Talbot, Ltd., a wholly-owned Canadian subsidiary, to satisfy a
portion of its intercompany account. Pope & Talbot, Ltd. has invested this $30
million in short-term investments which are reflected as cash and cash
equivalents in the Consolidated Balance Sheet. This $30 million in short-term
investments effectively cannot be used for current operations or debt reduction
as doing so could result in substantial adverse tax consequences. After
considering the additional $30.0 million third quarter borrowing, the Company
has paid down $66.3 million of debt during the first nine months of 1996.
Concurrent with the diaper business sale in February 1996, the Company's amount
available under its long-term revolving credit agreement was reduced from $100
million to $75 million. At September 30, 1996, the Company had $30.0 million
outstanding under this revolving-credit agreement. In the third quarter of 1996,
the Company obtained a $10 million, uncommitted, unsecured short-term line of
credit to facilitate its cash management function. At September 30, 1996, the
Company had $7.0 million outstanding under this short-term line of credit.


FACTORS THAT MAY AFFECT FUTURE RESULTS

Statements in this report or in other Company communications, such as press
releases, may relate to future events or the Company's future performance and
such statements are forward-looking statements. Such forward-looking statements
are based on present information the Company has related to its existing
business circumstances. Investors are cautioned that such forward-looking
statements are subject to an inherent risk that actual results may differ
materially from such forward-looking statements. Factors that may result in such
variances include, but are not limited to, changes in commodity prices and other
economic conditions, actions by competitors, changing weather conditions and
natural phenomena, actions by government authorities, uncertainties associated
with legal proceedings and future decisions by management in response to
changing conditions. Such factors are discussed in this report on Form 10-Q as
well as in the Company's Annual Report on Form 10-K.

                                      9
<PAGE>   11
PART II.

       ITEM 6.  Exhibits and Reports on Form 8-K

           Exhibits

              2.1    Asset Purchase Agreement by and among Paragon Trade Brands,
                     Inc., PTB Acquisition Sub, Inc., Pope & Talbot, Inc. and
                     Pope & Talbot, Wis., Inc. dated December 11, 1995.
                     (Incorporated herein by reference to Exhibit 2.1 to the
                     Company's Current Report on Form 8-K filed February 8,
                     1996.)

              3.1    Certificate of Incorporation, as amended. (Incorporated
                     herein by reference to Exhibit 3(a) to the Company's Annual
                     Report on Form 10-K for the year ended December 31, 1992.)

              3.2    Bylaws. (Incorporated herein by reference to Exhibit 3(b)
                     to the Company's Annual Report on Form 10-K for the year
                     ended December 31, 1992.)

              4.1    Indenture, dated June 2, 1993, between the Company and
                     Chemical Trust Company of California as Trustee with
                     respect to the Company's 8-3/8% Debentures due 2013.
                     (Incorporated herein by reference to Exhibit 4.1 to the
                     Company's registration statement on Form S-3 filed April 6,
                     1993.)

              4.2    Revolving Credit Agreement, dated May 6, 1992, among the
                     Company and United States National Bank of Oregon; CIBC,
                     Inc.; ABN AMRO Bank N.V.; Continental Bank N.A.; and
                     Wachovia Bank of Georgia, National Association.
                     (Incorporated herein by reference to Exhibit 4 to the
                     Company's Quarterly Report on Form 10-Q for the quarter
                     ended June 30, 1992.)

              4.3    Rights Agreement, dated as of April 13, 1988, between the
                     Company and The Bank of California, as rights agent.
                     (Incorporated herein by reference to Exhibit 4(e) to the
                     Company's Annual Report on Form 10-K for the year ended
                     December 31, 1992.)

              4.4    Extension Agreement, dated as of June 30, 1994, to the
                     Revolving Credit Agreement, dated May 6, 1992, among the
                     Company and United States National Bank of Oregon; CIBC,
                     Inc.; ABN AMRO Bank N.V.; Continental Bank N.A.; and
                     Wachovia Bank of Georgia, National Association.
                     (Incorporated herein by reference to Exhibit 4.6 to the
                     Company's Annual Report on Form 10-K for the year ended
                     December 31, 1994.)

              4.5    Modification Agreement, dated as of October 31, 1994, to
                     the Revolving Credit Agreement, dated May 6, 1992, among
                     the Company and United States National Bank of Oregon;
                     CIBC, Inc.; ABN AMRO Bank N.V.; Continental Bank N.A.; and
                     Wachovia Bank of Georgia, National Association.
                     (Incorporated herein by reference to Exhibit 4.7 to the
                     Company's Annual Report on Form 10-K for the year ended
                     December 31, 1994.)

              4.6    Modification Agreement, dated as of December 31, 1994, to
                     the Revolving Credit Agreement, dated May 6, 1992, among
                     the Company and United States National Bank of Oregon;
                     CIBC, Inc.; ABN AMRO Bank N.V.; Continental Bank N.A.; and
                     Wachovia Bank of Georgia, National Association.
                     (Incorporated herein by reference to Exhibit 4.8 to the
                     Company's Annual Report on Form 10-K for the year ended
                     December 31, 1994.)


                                      10
<PAGE>   12
              4.7    Extension/Modification Agreement, dated as of June 30,
                     1995, to the Revolving Credit Agreement, dated May 6, 1992,
                     among the Company and United States National Bank of
                     Oregon; CIBC, Inc.; ABN AMRO Bank N.V.; Bank of America
                     Illinois, fka Continental Bank; and Wachovia Bank of
                     Georgia, National Association. (Incorporated herein by
                     reference to Exhibit 4.7 to the Company's Quarterly Report
                     on Form 10-Q for the quarter ended June 30, 1995.)

              4.8    Modification Agreement dated as of October 16, 1995, to the
                     Revolving Credit Agreement, dated May 6, 1992, among the
                     Company and United States National Bank of Oregon; CIBC,
                     Inc.; ABN AMRO Bank N.V.; Bank of America Illinois; and
                     Wachovia Bank of Georgia, National Association.
                     (Incorporated herein by reference to Exhibit 4.8 to the
                     Company's Quarterly Report on Form 10-Q for the quarter
                     ended September 30, 1995.)

              4.9    Modification Agreement, dated as of January 22, 1996, to
                     the Revolving Credit Agreement, dated May 6, 1992, among
                     the Company and United States National Bank of Oregon; CIBC
                     Inc.; ABN AMRO Bank N.V.; Bank of America Illinois; and
                     Wachovia Bank of Georgia, National Association.
                     (Incorporated herein by reference to Exhibit 4.1 to the
                     Company's Current Report on Form 8-K filed February 8,
                     1996.)

             10.1    Executive Compensation Plans and Arrangements
             -----------------------------------------------------

             10.1.1  Stock Option and Appreciation Plan. (Incorporated herein by
                     reference to Exhibit 10(a) to the Company's Annual Report
                     on Form 10-K for the year ended December 31, 1992.)

             10.1.2  Executive Incentive Plan. (Incorporated herein by reference
                     to Exhibit 10(b) to the Company's Annual Report on Form
                     10-K for the year ended December 31, 1992.)

             10.1.3  Restricted Stock Bonus Plan. (Incorporated herein by
                     reference to Exhibit 10(c) to the Company's Annual Report
                     on Form 10-K for the year ended December 31, 1992.)

             10.1.4  Deferral Election Plan. (Incorporated herein by reference
                     to Exhibit 10(d) to the Company's Annual Report on Form
                     10-K for the year ended December 31, 1992.)

             10.1.5  Supplemental Executive Retirement Income Plan.
                     (Incorporated herein by reference to Exhibit 10(e) to the
                     Company's Annual Report on Form 10-K for the year ended
                     December 31, 1990.)

             10.1.6  Form of Severance Pay Agreement among the Company and
                     certain of its executive officers. (Incorporated herein by
                     reference to Exhibit 10(f) to the Company's Annual Report
                     on Form 10-K for the year ended December 31, 1990.)

             10.1.7  1996 Non-Employee Director Stock Option Plan. (Incorporated
                     herein by reference to Exhibit 10.1.7 to the Company's
                     Quarterly Report on Form 10-Q for the quarter ended March
                     31, 1996.)

             10.2    Lease agreement between the Company and Pope Resources,
                     dated December 20, 1985, for Port Gamble, Washington
                     sawmill site. (Incorporated herein by reference to Exhibit
                     10(g) to the Company's Annual Report on Form 10-K for the
                     year ended December 31, 1990.)


                                      11
<PAGE>   13
             10.3    Lease agreement between the Company and Shenandoah
                     Development Group, Ltd., dated March 14, 1988, for Atlanta
                     diaper mill site as amended September 1, 1988 and August
                     30, 1989. (Incorporated herein by reference to Exhibit
                     10(h) to the Company's Annual Report on Form 10-K for the
                     year ended December 31, 1990.)

             10.4    Lease agreement between the Company and Shenandoah
                     Development Group, Ltd., dated July 31, 1989, for
                     additional facilities at Atlanta diaper mill as amended
                     August 30, 1989 and February 1990. (Incorporated herein by
                     reference to Exhibit 10(i) to the Company's Annual Report
                     on Form 10-K for the year ended December 31, 1990.)

             10.5    Grays Harbor Paper L.P. Amended and Restated Pulp Sales
                     Supply Contract, dated September 28, 1994 (with certain
                     confidential information deleted). (Incorporated herein by
                     reference to Exhibit 10(j) to the Company's Quarterly
                     Report on Form 10-Q for the quarter ended September 30,
                     1994.)

             10.6    Province of British Columbia Tree Farm License No. 8, dated
                     March 1, 1995.

             10.7    Province of British Columbia Tree Farm License No. 23,
                     dated March 1, 1995.

             10.8    Province of British Columbia Forest License A18969, dated
                     December 1, 1993.

             11.1    Statement regarding computation of per share earnings.

             27.1    Financial Data Schedule.

           The undersigned registrant hereby undertakes to file with the
           Commission a copy of any agreement not filed under exhibit item (4)
           above on the basis of the exemption set forth in the Commission's
           rules and regulations.

           Reports on Form 8-K

           No reports on Form 8-K were filed during the three months ended
           September 30, 1996.


                                      12
<PAGE>   14
                               POPE & TALBOT, INC.


                                    SIGNATURE




Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                                  POPE & TALBOT, INC.
                                       -----------------------------------------
                                                      Registrant





Date:  November 13, 1996                      /s/ C. Lamadrid
                                              ----------------------------------
                                       By:    C. Lamadrid
                                              Senior Vice President and
                                              Chief Financial Officer
<PAGE>   15

Exhibit No.             Description
-----------             -----------

  10.6                  Province of British Columbia Tree Farm License No. 8,
                        dated March 1, 1995.

  10.7                  Province of British Columbia Tree Farm License No. 23,
                        dated March 1, 1995.

  10.8                  Province of British Columbia Forest License A18969,
                        dated December 1, 1993.

  11.1                  Statement regarding computation of per share earnings.