Annual Analyst Conference — June 1, 2007 Annual Analyst Conference — June 1, 2007 1 Annual Analyst Conference New York June 1, 2007 Annual Analyst Conference New York June 1, 2007
Annual Analyst Conference — June 1, 2007Annual Analyst Conference — June 1, 2007
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Annual AnalystConference
New YorkJune 1, 2007
Annual AnalystConference
New YorkJune 1, 2007
Annual Analyst Conference — June 1, 2007Annual Analyst Conference — June 1, 2007
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Forward-looking Statement The following presentations contain statements concerning Weyerhaeuser Company’s future results and performance that are forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995. Some of these forward-looking statements can be identified by the use of forward-looking terminology such as “expects,” “may,” “will,” “believes,” “should,” “approximately,” anticipates,” “estimates,” and “plans,” and the negative or othervariations of those terms or comparable terminology or by discussions of strategy, plans or intentions. In particular, some of these forward-looking statementsdeal with expectations regarding capital spending, new business models in the company’s businesses such as Containerboard, Packaging and Recycling andCellulose Fiber, opportunities for growth in the company’s businesses such as Timberlands and iLevel, continued cost reductions in the company’sbusinesses, particularly Containerboard Packaging and Recycling and Cellulose Fiber, earnings improvements in the company’s businesses generally andContainerboard Packaging and Recycling in particular, international expansion, development of new products, a joint venture with Chevron to develop biofuel,business trends such as componentization in home construction, execution of company business strategies, adjustments of operating postures to meetcurrent demand, the company’s markets, demand and pricing for the company’s products and related matters. The accuracy of such statements is subject to anumber of risks, uncertainties and assumptions that may cause actual results to differ materially from those projected, including, but not limited to: The effect of general economic conditions, including the level of interest rates and housing starts; Market demand for the company’s products, which may be tied to the relative strength of various U.S. business segments; Energy prices; Raw material prices; Chemical prices; Performance of the company’s manufacturing operations including unexpected maintenance requirements; The successful execution of internal performance plans; The level of competition from domestic and foreign producers; The effect of forestry, land use, environmental and other governmental regulations, and changes in accounting regulations; The effect of weather; The risk of loss from fires, floods, pest infestation and other natural disasters; Transportation costs; Legal proceedings; The effect of timing of retirements and changes in the market price of company stock on charges for stock-based compensation; and Performance of pension fund investments and related derivatives.
The company is also a large exporter and is affected by changes in economic activity in Europe and Asia, particularly Japan, and by changes in currencyexchange rates, particularly the relative value of the U.S. dollar to the Euro and the Canadian dollar, and restrictions on international trade or tariffs imposed onimports. These and other factors could cause or contribute to actual results differing materially from such forward-looking statements and, accordingly, noassurances can be given that any of the events anticipated by the forward-looking statements will occur, or if any of them occurs, what effect they will have onthe company’s results of operations or financial condition. The company expressly declines any obligation to publicly revise any forward-looking statementsthat have been made to reflect the occurrence of events after the date of these presentations.
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Agenda Welcome Kathryn F. McAuley
Vice President, Investor Relations Opening Remarks Steven R. Rogel
Chairman, President and CEO Strategic Direction Patricia M. Bedient
Executive Vice President and CFO Industry Outlook 2007 Lynn O. Michaelis
Vice President, Markets & Economic Research Timberlands, Cellulose Fibers and Richard E. Hanson
Containerboard, Packaging & Recycling Executive Vice President and CFO iLevel Lee Alford
Senior Vice President, Residential Wood Products Weyerhaeuser Real Estate Co. Daniel S. Fulton
President and CEO, WRECO Closing Remarks Steven R. Rogel
Chairman, President and CEO Q&A
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Steve RogelChairman, President
and CEO
Steve RogelChairman, President
and CEO
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Strategic Direction
Patty BedientExecutive Vice President,
Chief Financial Officer
Strategic Direction
Patty BedientExecutive Vice President,
Chief Financial Officer
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Fundamental Principles
Timberlands are core to the company
Businesses must exceed cost of capital
Continue capital spending discipline
Maintain appropriate capital structure and dividend policy
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Weyerhaeuser’s VisionWeyerhaeuser’s Vision
“Weyerhaeuser releases the potential intrees to solve important problems for
people and the planet”
““Weyerhaeuser releases the potential inWeyerhaeuser releases the potential intrees to solve important problems fortrees to solve important problems for
people and the planetpeople and the planet””
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Legislative Tax Reform
Industry sponsorship
Timber Revitalization and Economic Enhancement (TREE) Actof 2007 introduced in Congress
Bi-partisan support
Immediate value and flexibility
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iLevel Strategy
To be the undisputed leader in theResidential Structural Frame Market
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Weyerhaeuser Real Estate Company
Disciplined growth in targeted markets
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Fine Paper Transaction:Split / Merge with Domtar
Market leader created through unique tax-free transaction
$1.35 billion in cash for debt reduction
Over 25 million shares retired
Shareholders given choice
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Cellulose Fibers
High-performance fibers
Absorbent products
Premium towel and tissue
Proprietary technology
Technical capability
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Containerboard Packaging and Recycling
Accelerating implementation of new business model
Considering broad range of strategic alternatives
Hold and optimize
Sell / divest
Other combination
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Financial Priorities
Capital spending discipline80% of depreciationAligned with strategy
Dividend policyIncreased dividend 33% in the last 2 years
Share repurchase25 million shares retired through the Domtar transactionRepurchased 11 million shares
Appropriate capital structure
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Industry Outlook 2007
Lynn MichaelisVice President,
Markets & Economic Researchand Chief Economist
Industry Outlook 2007
Lynn MichaelisVice President,
Markets & Economic Researchand Chief Economist
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Agenda for Industry Outlook
Macroeconomic setting for forest products
Housing Issues: National and regional
Situation in
Wood Products
Cellulose Fiber (Pulp)
Containerboard and Packaging
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Outlook Summary
Approaching the bottom of the housing cycle — but recoverypattern uncertain
Wood product prices at bottom
Long-term trend still positive for housing and wood products
Very positive environment for softwood pulp
Prospects for containerboard and packaging industriesare mixed
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Macroeconomic Outlook
World growth strong, despite U.S. slowdown
Interest rates remain near current levels given inflation
Dollar decline continues — helps U.S. industrial production
Housing starts approaching bottom, but recoverypattern uncertain
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Dollar Declines Further:Immense Current Account Deficit
0.8
1.0
1.2
1.4
1.6
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Forecast*
Source: Wall Street Journal, *Weyerhaeuser
Euro Exchange RateU.S.$/Euro(inverse)
QuarterlyQMIEU09E
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Stronger Industrial Growth Over2004–07 Period
-6
-4
-2
0
2
4
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Source: FRB, *Weyerhaeuser
Growth in Weighted** Index forU.S. Manufacturing Production
Percent Change
AnnualAMDIP09A
** 80% non-durable; 20% durableexcluding high tech
Forecast*
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Now in Correction Period —Unique Cycle
0.8
1.0
1.2
1.4
1.6
1.8
1996 1998 2000 2002 2004 2006
Forecast*
U.S. Single-family Housing StartsMillion Units
Demographic Trendfor 2000-10*
Annual AverageSource: Census, *Weyerhaeuser
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Surge in Total Housing Inventory Needs to beWorked off; Partial Cause — Investors Exiting
0
1
2
3
4
5
2000 2001 2002 2003 2004 2005 2006 2007 2008
CondominiumsNew SF HomesExisting SF Homes
Inventory of Homes and Condominiumsfor Sale
Million Units
QuarterlyQMDHO79A Source: Nat'l Assn of Realtors, Census
+1.6 Million
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Another Problem Needs to be Corrected;Risky Loans
9
10
11
12
13
14
15
16
2000 2001 2002 2003 2004 2005 2006 2007
Mortgage Delinquencies Subprime LoansWith Installments Past Due
Percent
QuarterlyQMDIR22A Source: MBA
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Situation in Wood Products
Wood products demand fell sharply with decline in single-familyhousing starts
Current product prices are below cash costs for average mills —lumber and oriented strand board — driving production lower
U.S. timber prices lag lumber prices and mill production
Long-term positive: housing starts return to trend with verylittle offshore competition in structural wood products
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Canadian Mills Have Been RunningCash Negative
100
150
200
250
300
350
400
450
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Reported RandomLengthsEstimated Mill Net
TradeCaseBegins
Average Mill Cost*
Source: Random Lengths,*RISI Mill Survey
Spruce-Pine-Fir 2x4 Lumber Price$/MBF
QuarterlyQWDCLP07D
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Expect C$ Appreciation to Continue
0.60
0.70
0.80
0.90
1.002000 2001 2002 2003 2004 2005 2006 2007 2008
Forecast*
Source: Wall Street Journal, *Weyerhaeuser
Canadian Exchange RateU.S.$/C$(inverse)
QuarterlyQMICA09G
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Now Below Maximum Tariff Trigger Level
250
300
350
400
450
1995 1998 2001 2004 2007
Framing Lumber Composite Price$/MBF
AnnualAWDLOP02A Soure: Random Lengths
MaximumExport TaxTrigger
YTD
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200
250
300
350
400
450
1995 1997 1999 2001 2003 2005 2007
Douglas FirSpruce-Pine-Fir
Source: Random Lengths
Douglas Fir 2x4 Green vs.Spruce-Pine-Fir 2x4 Mill Lumber Price
$/MBF
AnnualAWDWLP03B
(X=YTD)
U.S. Product Prices Set by Canadian Imports
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Log Prices Lag Lumber Prices andLumber Production
400
600
800
1000
1200
1995 1997 1999 2001 2003 2005 2007
Export Log
Domestic #2
Douglas Fir Log PricesExport Log vs. Domestic #2
$/MBF
AnnualATLP70D Source: Log Lines, Weyerhaeuser
(X=YTD)
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Eventually, Prices Rebound to Level thatCovers Cash Cost
100
150
200
250
300
350
400
1995 1998 2001 2004 2007
North Central Oriented Strand Board 7/16" Price$/MSF
AnnualAWDPNLP09F Source: Crow's, *RISI Mill Survey
YTD
AverageMill Costin 2006*
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Situation in Cellulose Fibers
Overall demand growth positive, especially for fluff andabsorbent grades (U.S. Southern pine pulp)
Capacity growth primarily in hardwood pulp
Dollar decline supports positive prices for NBSK and fluff pulp— strong position for U.S. Southern mills
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Weaker Dollar Makes U.S. MillsMore Competitive
0
100
200
300
400
500
600
2002 2006
U.S.
CanadaSweden
Typical Mill
Softwood Kraft Pulp$/Tonne
APLOTP84ASource: Weyerhaeuser
Manufacturing Cash Costs for BleachedSoftwood Kraft Pulp
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Pulp Prices Reflect Relative Operatingand Exchange Rates
350
450
550
650
750
850
2001 2002 2003 2004 2005 2006 2007 2008
Fluff vs. EucalyptusDelivered Northern Europe
$/Metric Ton
QuarterlyQPLOTP39A
Fluff
Eucalyptus
Source: RISI
(X = April)
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Situation in Containerboard andPackaging Industries
Box demand growth in line with revised industrial productionindex driver
Packaging prices did not follow liner prices as expected
Prospects for containerboard in a global context very positive
Global demand growth of 4–5% per year
Issue: will need virgin capacity given limit for additionalOCC capacity growth
– Where and at what price?
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Gap Between Box Shipments Growth andIndustrial Production — Higher Prices
-1
0
1
2
3
4
1993-1997 1998-2003 2004-06
Industrial ProductionBox Shipments
**80% Nondurables, 20% DurablesExcluding High Tech
Source: Fibre Box Association, FRB
Weighted** Industrial Production andAnnual Growth of U.S. Box Shipments
Percent Change
AnnualACBBXG103A
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Relationship Between Linerboard andBox Prices Has Changed
30
40
50
60
70
1995 1997 1999 2001 2003 2005 2007
200
250
300
350
400
450
500
550
Box (left scale)Liner (right scale)
Source: FBA, RISI
U.S. Corrugated Box Price vs.Eastern U.S. Linerboard PriceBox
$/MSFLiner
$/Short Ton
AnnualACBOTG58F
(X=YTD)
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The Global Industry: All NewCapacity Has Been OCC Based
0
30
60
90
120
150
1988 2005
Recycled FiberVirgin Fiber
Source: Pöyry
Fiber for World Containerboard ProductionMillion Tons
AnnualXCBOTG13G
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Now at Limit of OCC-based Capacity
35
40
45
50
55
60
65
70
75
80
1988 1992 1996 2000 2004
Percent
AnnualARCOCCG35D
World Recovered PaperContent in Containerboard
Source: P öyry
Calculated Limit*
* For current quality
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Putting Upward Pressure on OCC Prices
0
20
40
60
80
100
120
1996 1998 2000 2002 2004 2006 2008
Chicago
Source: Official Boards Market, RISI
Recovered Paper OCC Price (Grade 11)(F.O.B. Packing Plant)
$/Short Ton
AnnualARCOCCP02F
YTD
CurrentChip PriceEquivalent
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Higher Price Levels may be Needed toEncourage Virgin Capacity Growth
0
30
60
90
120
150
180
1988 2005 2015
Recycled FiberVirgin Fiber
Source: P öyry (History)
VirginSoftwoodCapacityNeeded
*4.5% per year growth, RISI Forecast
Fiber for World Containerboard ProductionMillion Tons
AnnualXCBOTG13I
Forecast*
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Outlook Summary
Approaching the bottom of the housing cycle — but recoverypattern uncertain
Wood product prices at bottom
Long-term trend still positive for housing and wood products
Very positive outlook for softwood pulp
Outlook for containerboard and packaging industries is mixed
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Timberlands, Cellulose Fibers andContainerboard, Packaging
& Recycling
Rich HansonExecutive Vice President,
Chief Operating Officer
Timberlands, Cellulose Fibers andContainerboard, Packaging
& Recycling
Rich HansonExecutive Vice President,
Chief Operating Officer
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1.19
2.28
1.67
2.272.48
2.612.46
3.80
0.0
1.0
2.0
3.0
4.0
5.0
6.0
2000 2001 2002 2003 2004 2005 2006 2007 Mar.YTD
Total Company Recordable Incident Rate2000–2007 March Year-to-DateRIR
Safely Making Money
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TimberlandsTimberlands
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Operational Excellence in Timberlands
Generating industry-leading returns
Superior silviculture strategy
Superior execution
– Forestry efficiency and low operating costs
– Log allocation to the highest return market
– Portfolio management
Enhancing total return per acre
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Diverse Timberlands Ownership
6.4 million acres in U.S.0.7 million acres in Southern Hemisphere**includes joint ventures
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Innovative Silviculture
Grow bigger sawtimber faster, better, cheaper than competitors
Invest in silviculture to enhance timberland returnsInnovations in bedding and planting stockPrecision silviculture — Vision Forestry in the SouthOptimal harvest scheduling
Industry Standard
WeyerhaeuserForestry
Site Prep Genetics Fertilizer StandManagement
ProductDevelopment
Selective &Bedding
2nd & 3rdGeneration
PrecisionApplication
Thinning& Pruning
Strength &Stiffness Testing
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Maximizing Harvest Value
Optimizing log revenueLog allocation to markets (export, lumber, veneer and
fiber) helps achieve full value potentialInternal vs. external customer choices enhance values —
“right log to the right mill”
Minimizing harvest costsScale and concentration provide for efficient harvestWeyerhaeuser’s Southern U.S. harvest costs are 20–25%
lower than benchmark averages
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Optimizing Timberlands Portfolio
Returns improved throughactive portfolio management
Increased ownership by 1.5million acres since 2000Major strategic
acquisitionsRegional dispositions
including HBU land
Growing in the U.S. andSouth America
Portfolio Yield CurvePortfolio Yield Curve
Retu
rnto
Mar
ket
Acres
AcquisitionTargets
DivestmentTargets
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Current activities includeTraditional small timberlands sales and exchangesSales of lands with enhanced real estate valuesMineral and oil and gas extractionOther earnings (hunting leases, cell tower leases,
sale of forest plants, etc.)
Future growth opportunities includeBiofuel opportunity with ChevronCarbon credits
Maximizing the Value per Acre2006 Timberland activities other than harvest2006 Timberland activities other than harvestgenerated more than $225 million of earningsgenerated more than $225 million of earnings
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Generating Industry-leading Returns
U.S. Timberlands EBITDA* Per Acre Owned (2006)
0
50
100
150
200
250
300
WY West NCREIFPNW
WY South NCREIFSouth
*Non-GAAP measure; reconciliation on weyerhaeuser.com
Cellulose FibersCellulose Fibers
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Advanced absorbent fibers used indiapers and other personal careproducts are chemically modifiedfor superior performance
Fibers used in premium towel andtissue products, specialty andpublication papers
Specialty fibers used in textiles andnon-wovens
Cellulose Fibers —Products
High-performance Cellulose FibersIncoming Raw
Material
Towel / Tissue
Textiles
Filter Media
Diapers
Wipes
End UseMarkets
(~65% Export)
Dow
nstr
eam
Trea
tmen
t
Car
rierF
iber
Abs
orbe
nts
Spec
ialty
~0.4
MM
Tons
~0.2
MM
Tons
~1.3
MM
Tons
Manufacturing
Bales
Rolls
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R&D
FiberSelection
SpecialtyChemicals 5 Locations
~1.9 MM Tons
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Cellulose Fibers Operations
ColumbusFlint River
Port Wentworth
New Bern
Grande PrairieGrande Prairie
NBSK
SBSK
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Cellulose Fibers — Operational Excellence
Absorbent Product Mills
2006 Improvements over 2005
Manufacturing Efficiency
Manufacturing Cost $36/ton
4%
Containerboard, Packagingand Recycling
Containerboard, Packagingand Recycling
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Containerboard Packaging andRecycling Operations
9 Containerboard Mills —6.2 million tons75 Packaging Plants —98 BSF;10 Specialty Plants —Bulk, Inks and Plants,Preprint, Retail4 Bag Plants —160,000 Tons19 Recycling Plants —6.8 million tons
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The Business Model
Market segments as profit centers
Demand-driven, customer-focused model
Operating as an integrated supply chain (mills / box plants)
Delivering against demand at the lowest cost
Leveraging scale
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Accelerating Implementation
New leadership
Achieving more responsive andcoordinated sales organization
Applying lessons from businessmodel pilot
Focusing on margin improvementand profitable volume growth
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Targeted Earnings ImprovementsThrough 2008
$230 Million
DemandInitiatives$100 MM
DemandInitiatives$100 MM
ConvertingInitiatives$65 MM
ConvertingInitiatives$65 MM
MillInitiatives$65 MM
MillInitiatives$65 MM
• Labor reductions• More efficient maintenance spending• Lower energy consumption• Lower chemical consumption
• Rationalization / machine efficiency• Decreased fixed costs• Reduced transportation and warehousing
• Customer selection• Mix and volume improvements• New product introductions
On track to deliver $100 million by end of 2007
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iLevelLee Alford
Senior Vice President,Residential Wood Products
iLevelLee Alford
Senior Vice President,Residential Wood Products
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2006 Wood Products Segment Sales
New Residential(iLevel Focus)
Repair &Remodel
Industrial
International 3% Commercial 2%
71%
17%
7%
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The Vision for iLevel
To be the undisputed leader in theResidential Structural Frame marketTo be the undisputed leader in the
Residential Structural Frame market
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Over the Last 3 Years We Have BeenRepositioning Wood Products
Repositioned assets
Retooled
Reduced costs
Improved safety 50%
and …
Generated over $2.4 billion cash flow
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The Residential Structural Frame
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Complex Channel to Market is Evolving
Contractor Yardsand Pro Dealers
Truss andPanel Plants
Framers
BuildersBuildersPrimary
ManufacturingPrimary
Manufacturing
HomeBuyer
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Complex Channel to Market is Evolving
Contractor Yardsand Pro Dealers
Truss andPanel Plants
Framers
BuildersBuildersPrimary
ManufacturingPrimary
Manufacturing
HomeBuyer
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Complex Channel to Market is Evolving
Contractor Yardsand Pro Dealers
Truss andPanel Plants
Framers
BuildersBuildersPrimary
ManufacturingPrimary
Manufacturing
HomeBuyer
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Complex Channel to Market is Evolving
Contractor Yardsand Pro Dealers
Truss andPanel Plants
Framers
BuildersBuildersPrimary
ManufacturingPrimary
Manufacturing
HomeBuyer
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Componentization is a Growing Trend
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iLevel by Weyerhaeuser
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Executing the iLevel Strategy
Sell to the channel todeliver solutions to
Builder
Market to the Builderwith unique building
solutions
Contractor Yardsand Pro Dealers
Truss andPanel Plants
Framers
BuildersBuilders
HomeBuyer
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Positioned to be Undisputed Leader in theStructural Frame Market — Brand and Scale
A leading producer of solid wood products and panels
Largest engineered wood products producer
National distribution footprint
Most recognized and trusted product brands
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Positioned to be Undisputed Leader in theStructural Frame Market — Technology / R&D
Strength of Innovation
Software Solutions
Site Solutions
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Dealing with the Here and Now
Executing the iLevel strategy while managing through thedownturn and positioning for the upturn
Adjusting operating posture
71% of our facilities are taking downtime
Inventory aligned with demand
Reducing SG&A
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iLevel Gaining Traction Across the Channel
Sell to the channel todeliver solutions to
Builder
Market to the Builderwith unique building
solutions
Contractor Yardsand Pro Dealers
Truss andPanel Plants
Framers
BuildersBuilders
HomeBuyer
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Positioned to be theUndisputed Leader
in theResidential Structural Frame Market
Positioned to be theUndisputed Leader
in theResidential Structural Frame Market
Weyerhaeuser RealEstate Company
Dan FultonPresident and CEO, WRECO
Weyerhaeuser RealEstate Company
Dan FultonPresident and CEO, WRECO
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WRECO Operations
Maracay
Pardee
Quadrant
Trendmaker
Winchester
WRI
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WRECO 2006 Rankings
15th by Closing Volume
15th by Revenue
6th by Pre-Tax Earnings
2nd by Gross Margin
Source: SEC filings
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Homebuilding Operating Indicators
2007Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Traffic (in 000's) 64 90 90 63 72 62 53 45 61
New Orders, net 1,378 1,525 1,608 1,174 1,472 1,325 906 838 1,684
Cancellation Rate 15% 12% 17% 22% 19% 26% 36% 36% 16%
Single Family Gross Margin 32% 31% 33% 34% 31% 26% 26% 24% 22%
Home Closing Price (in 000's) 450$ 468$ 461$ 506$ 485$ 491$ 512$ 526$ 480$
2005 2006
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Key Business Drivers
Local value propositions
Geographic distribution of operations
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Key Business Drivers (cont.)
Land entitlement: core competency
Industry leading margins
Flexible business model
Management tenure
ROI alignment
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Housing Cycle Opportunities
Grow market share
Position for the long termPeopleProcess
Leverage land position
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Steve RogelChairman, President
and CEO
Steve RogelChairman, President
and CEO
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Annual AnalystConference
New YorkJune 1, 2007
Annual AnalystConference
New YorkJune 1, 2007