This document provides an overview of Weyerhaeuser Company's annual analyst meeting held in New York City on May 12, 2006. It includes presentations on the company's strategic direction, business segment performance, financial strategy, industry outlook, and consideration of alternative ownership structures for the company's timberlands business such as a real estate investment trust. Key topics discussed include portfolio optimization, cost reductions, capital allocation, the macroeconomic setting, and the tax implications of restructuring into a REIT.

1. Weyerhaeuser
Company
Annual Analyst Meeting
New York, New York
May 12, 2006

2. Forward-looking Statement
Some information in this pr esentation is der ived pr incipally fr om publicly available infor mation, for est pr oducts and building industr y
publications and websites, data complied by mar ket r esear ch fir ms, and similar sources. Although we believe that this information is r eliable,
we have not independently ver ified any of this information and we cannot assur e you that it is accur ate. This pr esentation also contains
for ecasts r egarding futur e economic conditions, economic growth, exchange r ates, demand and commodity pr icing, and statements
concer ning the company’s futur e r esults and per for mance that ar e for ward-looking statements within the meaning of the Pr ivate Secur ities
Litigation Reform Act of 1995. Some of these for ward-looking statements can be identified by the use of for war d-looking terminology such as
“expects,” “may,” “will,” “believes,” “should,” “approximately,” “anticipates,” “estimates,” and “plans,” and the negative or other var iations
of those ter ms or compar able ter minology or by discussions of str ategy, plans or intentions. In par ticular , some of these for ward-looking
statements deal with expectations r egar ding the company’s mar kets in the second quar ter of 2006; expected ear nings and per for mance of the
company’s business segments dur ing the second quar ter of 2006, demand and pr icing for the company’s products in the second quar ter of
2006, stable r aw mater ial and manufactur ing costs in the second quar ter 2006, seasonal incr ease in building activity in the second quar ter of
2006, seasonal incr ease in annual maintenance outages in the second quar ter 2006, incr eased single-family housing closings in second
quar ter 2006, lower land sales in the second quar ter of 2006, the completion of a tr ansaction involving the fine paper business, futur e char ges
for stock-based compensation, capital expenditur es, incr eased margins, incr eased utilization r ates and r elated matter s. The accur acy of such
statements is subject to a number of r isks, uncer tainties and assumptions that may cause actual r esults to differ mater ially fr om those
pr ojected, including, but not limited to: the effect of gener al economic conditions, including the level of inter est r ates and housing star ts;
mar ket demand for the company’s products, which may be tied to the r elative str ength of var ious U.S. business segments; energy pr ices; r aw
mater ials pr ices; chemicals pr ices; per formance of the company’s manufactur ing oper ations including unexpected maintenance
r equir ements; the successful execution of inter nal per for mance plans; the level of competition from domestic and for eign producer s; the
effect of for estr y, land use, envir onmental and other governmental r egulations, and changes in accounting r egulations; the effect of weather ;
the r isk of loss fr om fir es, floods, windstorms, hurricanes and other natur al disaster s; tr anspor tation costs; legal proceedings; the effect of
timing of r etir ements and changes in the mar ket pr ice of company stock on char ges for stock-based compensation; and per for mance of
pension investments and r elated der ivatives.
The company is also a large expor ter and is affected by changes in economic activity in Eur ope and Asia, par ticular ly Japan, and by changes
in curr ency exchange r ates, par ticular ly the r elative value of the U.S. dollar to the Eur o and the Canadian and new Zealand dollar s, and
r estr ictions on inter national tr ade or tar iffs imposed on impor ts, including the counter vailing and anti-dumping duties imposed on the
company’s softwood lumber shipments fr om Canada to the United States. These and other factor s could cause or contr ibute to actual r esults
differ ing mater ially fr om such forwar d-looking statements and, accor dingly, no assur ances can be given that any of the events anticipated by
the for ward-looking statements will occur , or if any of them occur s, what effect they will have on the company’s r esults of oper ations, cash
flows or financial condition .
New York City

3. Steve Rogel
Chairman, President and
Chief Executive Officer

4. Strategic Direction
Patty Bedient
Senior Vice President,
Finance and Strategic Planning

5. Portfolio Principles
Cost of capital
Focused scale
Growth
New York City

6. Weyerhaeuser Revenue — 2005
Revenue: $23 Billion
Other 3%
WRECO 13%
Containerboard,
Packaging
& Recycling Timberlands 5%
20%
Cellulose Fiber 6%
Wood
Products
41%
White Paper 12%
New York City

7. Weyerhaeuser Real Estate (WRECO)
Strategic Direction Implementation
Organic growth Record growth and returns
in existing markets
Adjacent markets Portland, Oregon;
Sacramento
New markets Maracay Homes, Phoenix
New York City

8. Wood Products — Residential
Strategic Direction Implementation
Providing framing Refocused value
solutions to the home proposition
building industry Launched iLevel brand
New York City

9. Wood Products — Industrial
Strategic Direction Implementation
Explore opportunity Sell Composite Panels
for scale growth in Refocus Southern
hardwoods and Hemisphere
appearance products investments to grow in
South America
New York City

10. Weyerhaeuser Revenue — 2005
Revenue: $23 Billion
Other 3%
WRECO 13%
Containerboard,
Packaging
& Recycling Timberlands 5%
20%
Cellulose Fiber 6%
Wood
Products
41%
White Paper 12%
New York City

11. White Paper
Strategic Direction Implementation
Improve Fine Paper Closed higher-cost
business capacity
Evaluate strategic Active discussions
alternatives with 3rd parties
New York City

12. Cellulose Fibers
Strategic Direction Implementation
Differentiated Aligned capital to strategy
products • Conversion of
Port Wentworth
• R&D investment in new
products
Closed higher-cost capacity
Improve mill system
performance
New York City

13. Containerboard, Packaging & Recycling
Strategic Direction Implementation
Transform Optimize supply system to be
business model demand driven and lower cost
• Organized around market
segments
• Increased integration and
asset utilization by closing
high-cost capacity
Improve pricing strategies
Align capital with strategy
New York City

14. Timberlands
Strategic Direction Implementation
Optimize and grow Continue successful
business model
Continue to pursue tax
legislation
Evaluated alternative
structures
New York City

15. Financial Strategy
Strategic Direction Implementation
Return capital to Dividend
shareholders • Increased by 25% in 2005
Share repurchase
• 18 million authorized
Disciplined capital Maintain capital spending at
program less than 80% depreciation
New York City

16. Summary
Strategic review delivered a course of action
Portfolio direction is set
Focus is on implementation
New York City

17. Strategic Update —
Timberlands
Dick Taggart
Executive Vice President,
Chief Financial Officer

18. Timber Update Analysis
● Weyerhaeuser’s Timberlands business
● Industry ownership structures
Issues for transforming into a REIT
Conclusions and next steps
New York City

19. Weyerhaeuser Timberlands
Business selling at market prices to internal and
external customers
Softwood sawtimber focus with intensive silviculture
Add integration value through efficient conversion
Extract mineral, oil, gas and development values
Constantly reposition the portfolio to strategic core
Reinvest in highest returning regions
Forests managed sustainably and by SFI or CSA
New York City

20. Weyerhaeuser Timberlands Ownership
Millions of Acres
9
8
7
6
5
4
3
2
1
0
1998 2002 2005

21. Average Log Price
Average log price has remained relatively stable
800
$/MBF
700
Export
600
500
Domestic
400
(Avg. West & South)
300
200
100
1998 1999 2000 2001 2002 2003 2004 2005

22. Weyerhaeuser Timberlands Harvest
Continued intensive management of long-term portfolio
Millions of CCF
10.00
8.00
6.00
4.00
2.00
1998 2002 2005

23. Weyerhaeuser Timberlands Business —
Earnings
$ Millions
900
800
Portfolio
700 Optimization
600
500
400
Timber
300 Operations
200
100
0
1998 2002 2005

24. Why Retain Timberlands?
We continuously evaluate hold vs. sell
Divest when tax-adjusted market values exceed
holding values
New York City

25. Different Ownership Structures
for Timber
Public Owners Private Owners
Organizations C-Corp REIT Strategic
Financial
Direct
Pooled
Tax Rate 35% Pass through Pass through
Mandatory No Yes No
Distributions
Debt / Leverage Yes Limited Yes
Other Businesses Yes Limited Strategic – Yes
Financial – Unlikely
New York City

26. REIT Creation Issues
Issues on transition to create value from
REIT conversion
• Potential tax liability
• Impact on remaining businesses
• Constraints in implementing strategic plans
New York City

27. Tax Issues Relative to Timberland
REIT Conversion
REIT conversion would require distribution of
accumulated earnings and profits (E&P)
• Required for any path to a REIT structure
• Preliminary estimates of E&P range from
$2–$3 billion
• Taxable distribution to shareholders
─Typically 80% has been paid in stock with the
remainder paid in cash to cover tax liability
New York City

28. Tax Issues Relative to Timberland
REIT Conversion (cont.)
Business Purpose Test for corporate reorganizations
• IRS requires valid business purpose beyond
lowering tax liability
• Cannot obtain advance IRS ruling
• Failure could trigger $3–4 billion corporate tax
liability depending on the value of the timber; also
taxable to the shareholder
New York City

29. Paths to a Timber REIT Structure
Process Precedence
Spin None in timber
Spin / Merge GP / Plum Creek 1996–2001
Convert / Elect Rayonier / Potlatch
New York City

30. Timber Tax Equity
Timber tax proposal
• 134 co-sponsors in the House; 29 in Senate
• Bipartisan support with no opposition
Why it’s best for Weyerhaeuser
• Eliminates tax-related value gap at reduced risk
• Avoids constraints of growing Timberlands and
other business
• Retains financial flexibility to execute corporate
strategy and return cash to shareholders
New York City

31. Conclusions
Timberlands business continues to be value-creating
for shareholders
Highest value-creation is tax reform in the C-Corp structure
At this time, a REIT structure is not the best alternative
• Risk of incurring a large tax liability is high
• Shareholder tax liability on distribution
• Limits ability to execute current strategy — both within
Timberlands business and the company
Continue to monitor value of alternatives as legislative
process evolves and strategic actions unfold
New York City

32. Industry Outlook
Lynn Michaelis
Vice President, Markets & Economic Research
and Chief Economist

33. Agenda for Industry Outlook
Macroeconomic setting for forest products
Outlook for
• Wood Products
• Cellulose Fiber (Pulp)
• Containerboard, Packaging and Recycling
New York City

34. Macroeconomic Setting for Forest Products
Economic growth remains healthy
Dollar decline resumes
U.S. industrial production growth continues
Inflation and interest rates move higher
Housing starts peak
New York City

35. Momentum Carries into 2006
Growth in World Real GDP
Percent Change
Forecast*
5
4
3
2
1
0
1992 1994 1996 1998 2000 2002 2004 2006
Annual
Source: Global Insight, Weyerhaeuser*
AMIOT03F
New York City

36. Another Year of 3–4% Growth
Growth in U.S. Real GDP
Percent Change
Forecast*
5
4
3
2
1
0
1996 1998 2000 2002 2004 2006
Annual Source: BEA , Weyerhaeuser*
AMDGA01H
New York City

37. Surge in Consumer Spending Fueled by
Housing Refinance Boom
U.S. Personal Savings Rate
Percent
5
4
3
2
1
0
-1
1995 2000 2005
Annual Source: BEA
AMDOT32D
New York City

38. Dollar Decline Resumes in 2006
Euro Exchange Rate
U.S.$/Euro
(inverse)
Forecast*
0.7
Euro (X = 5/04)
introduce
0.9
1.1
1.3
1.5
1.7
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Quarterly
QMIEU09F Source: Wall Street Journal, Weyerhaeuser*
New York City

39. Current Account Deficit Got Even Bigger
U.S. Current Account Balance
as a Share of GDP
Percent
1
0
-1
-2
-3
-4
-5
-6
-7 Q4
-8
1988 1992 1996 2000 2004
Annual Source: BLS
AMDOT78D
New York City

40. Weaker Dollar and Strong Growth Boost
U.S. Industrial Production
Growth in Weighted** Index for
U.S. Manufacturing Production
Percent Change
Forecast*
4
2
0
-2
** 80% non-durable; 20% durable
-4
1998 1999 2000 2001 2002 2003 2004 2005 2006
Annual
Source: FRB, Weyerhaeuser*
AMDIP36E
New York City

41. Inflation Remains Above 3%
U.S. Consumer Price Index (CPI)
Inflation Rate
Percent Change
Forecast*
4
3
2
1
0
1998 2000 2002 2004 2006
Annual
Source: BLS, Weyerhaeuser*
AMDIF01F
New York City

42. Result: FRB Moves Short Rates Higher
U.S. Interest Rates
Pe rce nt
Forecast*
10
Moody BAA
Bonds
8
6
3-month
Commercial
4
2
0
1997 1998 19 99 2000 2001 2002 2003 2004 2005 2006
Annual Source: FRB, Weyerhaeuser*
AMDIR86G
New York City

43. Easy Money Fueled Housing Boom
U.S. Single-family Housing Starts
Million Units
Forecast*
1.8
1.6
Demographic Trend
for 2000-10*
1.4
1.2
1.0
0.8
1992 1994 1996 1998 2000 2002 2004 2006
Annual Source: Census, Weyerhaeuser*
AMDHO19N
New York City

44. Very Positive Long-term Trends for
Single-family Housing Starts
Demographics
Average home size
Housing finance: Efficiency and flexibility
New York City

45. Agenda for Industry Outlook
Macroeconomic setting for forest products
Outlook for
• Wood Products
• Cellulose Fiber (Pulp)
• Containerboard, Packaging and Recycling
New York City

46. Key Drivers for Lumber
Demand primarily driven by residential construction —
new and remodeling
• Limited substitution
Supply is more complex
• Timber supply
• Canadian delivered costs
• Limited offshore competition
New York City

47. Another Record Demand Year in 2005
Demand on North American Lumber Mills
vs. Capacity
Billion Board Feet
80
75
70
65 Capacity
60
55 Demand
50
1988 1991 1994 1997 2000 2003
Annual
Source: RISI
AWDNALGD01E
New York City

48. Substitution Was Wood for Wood
Lumber Usage in
U.S. Single-Family Housing
Board Feet/
Square Feet
8
Engineered
Wood
6
4
Lumber
2
0
1995 2003
Annual
AWDG32C Source: NAHB Housing Survey
New York City

49. U.S. Lumber Output Keeps Growing
U.S. Lumber Production
Billion Board Feet
50
40.3
40
3.4
36 Other
34.3
3.0
3.1
30
18.6 South
16.7
15.8
20
6.6 Inland
6.6
6.6
10
11.8 West Coast
9.7
8.8
0
2001 2003 2005
Annual Source: WWPA
AWDUSLGP10F
New York City

50. U.S. Imports in Perspective
U.S. Softwood Lumber Imports
(Billion Board Feet)
2005
2002 2005 Share (%)
Canada 19.1 21.5 34
Europe 0.6 1.4 2
South America 0.6 0.7 1
Other 0.6 0.9 1
_____ _____ ___
Total 20.8 24.5 38
Source: RISI
New York City

51. Crucial to U.S. Lumber Price Outlook
Canadian Exchange Rate
U.S.$/C$
(inverse)
Forecast*
0.60
(X = 5/04)
0.70
0.80
0.90
1.00
2000 2001 2002 2003 2004 2005 2006 2007
Quarterly Source: Wall Street Journal, Weyerhaeuser*
QMICA09F
New York City

52. Exchange Rate Offset
Operating Improvements
Production Costs for Average B.C. Interior Mill
($/MBF)
2002 2005 Q4
Mfg. Cash Cost (C$) 291 275
Exchange Rate (C$/USD) 1.57 1.18
Mfg. Cash Cost (USD) 185 234
Source: RISI
New York City

53. Prices Approached Cost Floor in Late 2005
Spruce-Pine-Fir 2x4 Lumber Price
$/MBF
450
(X = April)
400
350
Reported Random
Lengths
300
250
Estimated
200
Mill Net Cost Support
in 2005
150 Cost Support
in 2002
100
2001 2002 2003 2004 2005 2006 2007
Quarterly
Source: RISI Mill Survey, Random Lengths
QWDCLP07E
New York City

54. Tentative Agreement Was Reached
April 27, 2006
Only rough structure of the deal is known, 2-3 months
before full detail and agreement takes effect
Most of accrued duty will be returned to producers — 80%
to Canadian producers
New York City

55. Tentative Agreement Was Reached
April 27, 2006
Only rough structure of the deal is known, 2-3 months
before full detail and agreement takes effect
Most of accrued duty will be returned to producers — 80%
to Canadian producers
Structure is a combination of export tax and volume
restriction, where province can choose an option
• Option A: allows shipment of up to 34% of U.S. market
and sliding export tax tied to lumber price
• Option B: has lower export tax than Option A but has
progressively smaller market share as price declines
New York City

56. Tentative Agreement Was Reached
April 27, 2006
Only rough structure of the deal is known, 2-3 months
before full detail and agreement takes effect
Most of accrued duty will be returned to producers — 80%
to Canadian producers
Structure is a combination of export tax and volume
restriction, where province can choose an option
Bottom line: 10-15% export tax at cyclic bottom
New York City

57. U.S. Prices Track SPF Prices
Douglas Fir 2x4 Green vs.
Spruce-Pine-Fir 2x4 Mill Lumber Price
$/MBF
500
Douglas Fi Green
Spruce-Pine-Fir
450
400
350
300
250
(X = April)
200
1995 1997 1999 2001 2003 2005 2007
Quarterly Source: Random Lengths
QWDWLP06A
New York City

58. Reflects Lumber Prices and New Capacity
Douglas Fir/Domestic No. 2 Sawmill,
Western Oregon and Washington
$/MBF
(X = April)
700
600
500
400
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Quarterly
Source: Log Lines
QTLP24A
New York City

59. Key Drivers for Oriented Strand Board (OSB)
Demand primarily driven by new residential construction
Substitution for plywood
New capacity growth continues
New York City

60. Demand Pressed Capacity Limit in 2003–05
North America OSB Demand vs. Capacity
Billion Square Feet
30
25
Capacity
20
Demand
15
10
1995 1997 1999 2001 2003 2005
Annual Source: RISI
AWDNAPGD38G
New York City

61. Keeping Prices High
N.C. Oriented Strand Board 7/16quot; Price
$/MSF
500
400
300
April
200
100
0
1999 2000 2001 2002 2003 2004 2005 2006 2007
Quarterly
Source: Crow's
QWDPNLP04E
New York City

62. Costs Reflect Energy, Resin and
Exchange Rates
Variable Cost for an Average OSB Mill*
(7/16”, $/MSF)
2002 2005(e) % Change
U.S. South 116 144 24
Eastern Canada 88 140 59
* Based on RISI Survey Data
New York City

63. Engineered Products Demand
Continues to Grow
North America I-Joist Demand
Million Lineal Feet
1500
1000
500
0
1996 1998 2000 2002 2004
Annual Source: RISI
AWDG27G
New York City

64. Agenda for Industry Outlook
Macroeconomic setting for forest products
Outlook for
• Wood Products
• Cellulose Fiber (Pulp)
• Containerboard, Packaging and Recycling
New York City

65. Key Drivers for Cellulose Fiber (Pulp)
Global Market: Demand growth near 3%
• Economic growth
• China shift to wood pulp continues
• Tissue and fluff end-uses
New York City

66. China Demand Growth Averaged 20% per
Year for 2000–05 Period
China Imports of Bleached Kraft Pulp
Million Metric Tons
6
Softwood
Hardwood
5
4
3
2
1
0
2002 2003 2004 2005
Annual Source: Weyerhaeuser
APLOTG49A
New York City

67. Fluff Market Growing 3–4% per Year
Fluff Market Pulp Consumption
by Region
Million Tons
4
Rest of World
3
Rest of Asia
Japan
2
Europe
1
North America
0
2000 2005
Annual Source: Weyerhaeuser
APLOTG02F
New York City

68. Key Drivers For Cellulose Fiber (Pulp)
Global Market: Demand growth near 3%
Capacity / operating rate
• Exchange rate is critical to price outlook
• Continued expansion in hardwood capacity
New York City

69. Scan Costs Higher in U.S. Dollar Terms
Manufacturing Costs for
Bleached Softwood Kraft Pulp
$/Tonne
600
Typical Mill
U.S.
500
Canada
Sweden
400
300
200
100
0
2002 2005-06
Source: Weyerhaeuser
APLOTP84A
New York City

70. Softwood Capacity Declines in 2006
Change in World Capacity
Bleached Softwood vs. Bleached Hardwood
Percent Change
8
Estimated*
Softwood Hardwood
6
4
2
0
-2
2003 2004 2005 2006
Annual Source: PPPC, Public Announcements*
APLOTG51F
New York City

71. Pulp Prices Reflect Demand and
Exchange Rates
NBSKP vs. Eucalyptus
Delivered Northern Europe
$/Metric Ton
800
NBSKP
Eucalyptus
700
600
500
400
(X= April)
300
2000 2001 2002 2003 2004 2005 2006 2007
Quarterly Source: RISI
QINDP05A
New York City

72. Agenda for Industry Outlook
Macroeconomic setting for forest products
Outlook for
• Wood Products
• Cellulose Fiber (Pulp)
• Containerboard, Packaging and Recycling
New York City

73. Key Drivers for Containerboard,
Packaging and Recycling
Nondurable industrial production
Capacity / operating rate crucial to prices
New factor for OCC prices: Energy costs for OCC plants
New York City

74. Box Shipments Track Industrial Production
Weighted* Industrial Production and
Annual Growth of U.S. Box Shipments
Average Annual
Percent Change
4
Industrial Production
Box Shipments
3
2
1
0
* 80% non-durable; 20% durable
-1
1993-1997 1998-2003 2004-05
Source: Fibre Box Association, FRB
ACBBX G82L
New York City

75. No Capacity Growth Since 1997
U.S. Containerboard Capacity
Average Annual
Percent Change
5
4
3
2
1
0
-1
1993-97 1998-2003 2004-05
Annual Source: AF&PA
ACBOTG10H
New York City

76. Results in Another Very Tight Year
Containerboard Operating Rate
Percent
100
Tight Market
95
90
85
80
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Quarterly Source: AFPA
QCBOTG09E
New York City

77. The Bottom Line: Box Prices Will Follow
U.S. Corrugated Box Price vs.
Eastern U.S. Linerboard Price
Box Liner
$/MSF $/Short Ton
60 520
500
Box (left)
58 April
480
Liner (right)
56 460
440
54
420
52 400
380
50
360
48 340
2000 2001 2002 2003 2004 2005 2006 2007
Quarterly
Source: RISI and FBA
QCBOTP01A
New York City

78. China’s OCC Demand Continues to Grow
China OCC Imports
Million Metric Tons
(Annual Rate)
10
Total
8
From U.S.
6
4
2
0
1996 1998 2000 2002 2004
Annual
Source: EU Consulting, China Foreign Trade Report
ARCOCCG14A
New York City

79. Why Did OCC Prices Fall?
Recovered Paper OCC Price (Grade 11)
(F.O.B. Packing Plant) (Chicago)
$/Short Ton
120
100
80
April
60
40
20
0
1999 2000 2001 2002 2003 2004 2005 2006 2007
Quarterly Source: Official Board Markets
QRCOCCP16B
New York City

80. Energy Cost Increase Hit OCC-Based Plants
Comparison of Virgin* vs.
Recycled* Plant Costs
Manufacturing Cost
Energy
$/SWT
Other Manufacturing
300
Fiber
250
200
150
100
50
0
2003-04 Virgin 2005.4 Virgin 2003-04 Recycle 2005.4 Recyle
* Lower cost mills
ARCOCCP14C Source: Weyerhaeuser
New York City

81. Summary of Key Messages
Overall economic growth remains strong, but inflation and
interest rates move higher
Housing and wood products enter cyclic decline
Higher delivered cost for Canadian lumber
Modest cycle in U.S. timber values
Pulp prices benefit from exchange rates and improving
operating rate
Containerboard and packaging markets do very well
Overall message: normal shift near cyclic peak of
economy
New York City

82. WRECO and iLevel
Dan Fulton
President,
Weyerhaeuser Real Estate Company

83. Weyerhaeuser Real Estate Company
Single family homebuilding
• Retail business — sell direct to final customer
• Local / regional focus
• Operate in select markets
Builder finance
• Investment manager of and investor in
development financing for mid-sized
homebuilders
New York City

84. Business Definition
Homebuilding
Pardee
Quadrant
Trendmaker
WRECO
Winchester
Maracay
Builder Finance
WRI
New York City

85. Business Definition —
WRECO Operations
Office
Locations
Maracay
Pardee
Quadrant
Trendmaker
Winchester
New York City

86. Business Definition
Homebuilding
Pardee
Quadrant
Trendmaker
WRECO
Winchester
Maracay
Builder Finance
WRI
New York City

87. Business Definition
New York City

88. WRECO Land Strategy
Most of our markets are land constrained
Increasing regulation extends elapsed time
for entitlements
Land managed as
“just in time”
whenever possible
Current Lot Pipeline
5.7 years’ sales
• 45% of lots are owned
Increasing use of land option contracts
• Limits risk and upfront capital requirements

89. WRECO Land Strategy (cont.)
Selling land is part of our business
Disciplined focus on ROI
• Optimizes balance
between margin
and asset turnover

90. WRECO Growth Roadmap
Organic growth is the Base Case for our growth strategy
Strategic Direction Implementation
Market Penetration Incremental Investment in Existing Markets
Organic Growth
New Products Condominiums, Age-Restricted
(Base Case)
New Brands Camberley Homes
Adjacent Markets
Portland, OR. (Quadrant)
Adjacent Markets Leverage Brand Equity
Northern California (Pardee)
Leverage Existing Management
Acquisition
New Markets Phoenix (Maracay Homes, Feb 2006)
Start-up

91. WRECO Is Positioned to Succeed
Long-term favorable outlook for single-family housing
WRECO is a top performer
• Select markets
• Proven land strategy
• Experienced management team
• Focus on financial performance
• Leading financial results
Linkage to Weyerhaeuser
New York City

92. Homebuilding Industry
Continues to Evolve
Homebuilder consolidation
Market demanding higher quality
and more efficient solutions
Homebuilder adoption of
innovative building methods
• Regionally distinct construction methods
• Shortage of qualified labor
Expectations for future margins
New York City

93. Homebuilders Continue to Consolidate
Production Builder Market Share
% of total closings
40
35 Top 100 – 37%
30
25
20
Top 10 – 21%
15
10
5
0
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Source: Builder Magazine
New York City

94. Key Advantages of Large Homebuilders
First look at land and partnership deals
Product and geographic diversity
Strong balance sheets
Scale to leverage processes and supply agreements
Expertise to underwrite, control and process land
Attract and retain high talent work force
Greater relative investment in technology
New York City

95. Weyerhaeuser is a Leading Producer
of Residential Building Materials
2005 Total 3rd-Party Sales = $9.4 Billion
Other Products
23%
Softwood Lumber
Plywood / Veneer 39%
8%
Oriented Strand Board
12%
Engineered Lumber Panels
18%
New York City

96. Is Positioning for the Future
Integration: 5 businesses into 1
Innovation: Driving profitability of our customers
Interaction: Transforming the way we do business
Information: Increasing the transparency of data

97. Value Proposition Overview
Products and services aimed at the residential
market segment
• Improve efficiency of
design process
• Optimize the structural frame
• Reduce jobsite waste and
call-backs
• Compress the build cycle time
Improve coordination across the supply channel
Balance common processes with unique regional needs
Capture the full value of Weyerhaeuser integration
New York City

98. Directed at the “Sweet Spot”
of Homebuilders’ Cost
Construction
Labor
Materials &
20%
Indirect
28%
Marketing/Advert.
6%
Overhead
6%
Financing/other
Land and related 2%
Profit
22% 16%
Source: Professional Builder Magazine, May 2006 (average of 6 th -31st largest builders)
New York City

99. Strategic Validation
Harvard University, Joint Center for Housing Studies
Key Findings: Homebuilder Distribution Study, 2005
Many builders have not yet implemented practices to
promote efficient distribution operations
Larger builders are early adopters,
but have difficulty implementing
innovative practices companywide
Builder performance can be improved by adopting
innovative product and distribution practices
New York City

100. Expected Benefits
%
100
Proprietary Product,
>20%
Solutions and Whole House
80
Service Differentiated
Margins
60
40
Commodity
<8%
20
0
Current Sales 2010 Sales

101. Is All About
Anticipating Change
“You need to skate to where the
puck is going to be.”
Wayne Gretzky
(and Lee Alford,
Senior Vice President,
Residential Wood Products)
New York City

102. Operating Excellence and
Margin Improvement
Rich Hanson
Executive Vice President,
Chief Operating Officer
New York City 102

103. Timberlands
Generating higher
returns through
• Intensive
silviculture
• Aggressive
portfolio
management
New York City 103

104. Operating Excellence and
Margin Improvements
Leveraging scale and capability to reduce cost
• Transportation
• Inventory management
• Procurement
Demand driven
• Separating marketing / sales from supply
• Optimizing supply system to meet demand at
lowest cost
New York City 104

105. Wood Products
Prior Strategy iLevel Strategy
Production orientation Demand driven
Product focus Residential structural
frame focus
Multiple sales forces Single point of contact
Distinctive product Innovative product and
orientation with service solutions
multiple brands for the builder
• Floor, wall, roof
• Whole house design
• Technology enabled

106. Containerboard Packaging
Prior Strategy New Strategy
Market segments established as
Individual box
profit centers
plant driven
Integrated supply organization delivers
against demand at
the lowest cost
Leveraging scale

107. Containerboard Packaging Facilities
Mexico

108. Containerboard Packaging Facilities
North Central Region / 5 Zones
White
Bear Lake
Fridley
Manitowoc
Warren
St. Paul
Three
Austin
Rivers
Chicago
Rockford
Waterloo
Aurora,
Montgomery
Cedar Rapids
Omaha
Lincoln
St. Joseph
Kansas City Belleville
Maryland Hts.

109. Containerboard Strategy Benefits
Better box plant utilization
• 76% today, moving to 90%
Capital spending focused on cost reduction and
asset optimization
• 80% of depreciation
Improved margins and higher returns
• Higher productivity
• Lower costs
• Centralized approach to pricing
• Technology solutions for key markets
New York City 109

110. Improving Returns
Demand-driven strategies
Leveraging our scale
• Asset utilization matched to demand
• Improving productivity and reducing costs
Effective capital deployment
New York City 110

111. Financial Priorities
Dick Taggart
Executive Vice President,
Chief Financial Officer
New York City 111

112. Financial Priorities
Priorities for free cash flow
• Return capital to shareholders
• Selective growth
Maintain operating capital spending discipline
New York City 112

113. Weyerhaeuser
Company
Annual Analyst Meeting
Steve Rogel
Chairman, President and
Chief Executive Officer