2009 Investor Meeting

Weyerhaeuser Company
May 29, 2009
 Forward Looking Statement
This presentation contains statements concerning the company’s future results and performance that are forward-looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995. These statements are based on various assumptions and may not be accurate because of risks and uncertainties surrounding these assumptions. Factors listed
below, as well as other factors, may cause actual results to differ significantly from these forward-looking statements. There is no guarantee that any of the events anticipated by these
forward-looking statements will occur. If any of the events occur, there is no guarantee what effect they will have on company operations or financial condition. The company will not
update these forward-looking statements after the date of this presentation.
Some forward-looking statements discuss the company’s plans, strategies and intentions. They use words such as “expects,” “may,” “will,” “believes,” “should,” “approximately,”
“anticipates,” “estimates,” and “plans.” In addition, these words may use the positive or negative or other variations of those terms.
We make forward-looking statements regarding the company’s expectations during the second quarter of 2009, including the company’s markets, the effect of facility closures and cost
control measures in the wood products segment, fee timber harvests and log prices, demand and pricing for our wood products, decreases in raw material costs for our wood products
segment, increased expenses for annual planned maintenance in the Cellulose Fiber segment, the effect of potential alternative fuel mixture tax credits, demand and prices for pulp, home
sale closings and prices, earnings and performance of our business segments, capital expenditures and the timing of debt repayments. Major risks, uncertainties and assumptions that
affect the company’s businesses and may cause actual results to differ from these forward-looking statements, include, but are not limited to:
• the effect of general economic conditions, including the level of interest rates, availability of financing for home mortgages, strength of the U.S. dollar, employment rates
and housing starts;
• market demand for the company’s products, which is related to the strength of the various U.S. business segments and economic conditions;
• the successful execution of internal performance plans, including restructurings and cost reduction initiatives;
• the restructuring of the company’s business support functions;
• performance of the company’s manufacturing operations, including maintenance requirements;
• raw material prices;
• energy prices;
• transportation costs;
• performance of pension fund investments and related derivatives;
• contributions to pension plans
• the effect of timing of retirements and changes in the market price of company stock on charges for stock-based compensation;
• the level of competition from domestic and foreign producers;
• the effect of forestry, land use, environmental and other governmental regulations;
• legal proceedings;
• projected tax rates and IRS audit outcomes;
• changes in accounting principles;
• the effect of weather;
• loss from fires, floods, windstorms, hurricanes, pest infestation and other natural disasters; and
• other factors described under “Risk Factors” in the company’s annual report on Form 10-K or periodic reports.
The company is a large exporter and is affected by changes in economic activity in Europe and Asia, particularly Japan and China. It also is affected by changes in currency exchange
rates, particularly the relative value of the U.S. dollar to the euro and the Canadian dollar. Restrictions on international trade or tariffs imposed on imports also may affect the company.
Today’s presenters

Dan Fulton President and Chief Executive Officer

Patty Bedient Executive Vice President – Chief Financial Officer

Tom Gideon Executive Vice President – Forest Products

Larry Burrows President and Chief Executive Officer – WRECO

Kathy McAuley Vice President – Investor Relations

Lynn Michaelis Vice President – Chief Economist

Opening Remarks
Dan Fulton

President and Chief Executive Officer

Economic Overview
Lynn Michaelis

VP – Chief Economist
Economic setting for 2009

• U.S. in recession since early 2008, accelerated with financial crisis

• Aggressive fiscal and monetary policy are crucial to arrest the downward spiral
Decline in home prices triggered financial crisis

Growth in Median Price for Existing

Single-family Homes
% Change Year Ago
16

12

-4

-8

-12

-16
2002 2003 2004 2005 2006 2007 2008 2009 2010
Quarterly
QMDHO26N Source: Nat'l Assn of Realtors
Dramatic shift in available credit and tougher standards

Net Flow of Home Mortgages

(Seasonally Adjusted Annual Rate)
Billion Current $
1400

1200

1000

800

600

400

200

-200

-400
2001 2002 2003 2004 2005 2006 2007 2008 2009
Quarterly
QMDIR07A Source: FRB
Fed taking actions to stabilize financial system

U.S. Interest Rates

Percent
(X = 5/12)
10

Moody BAA Bonds

8

4
3-month
Commercial Paper
2

0
1999 2001 2003 2005 2007 2009
Quarterly
QMDIR52A Source: FRB
Aggressive action to stabilize financial system

Federal Reserve Assets

Trillion $
3.0

2.5
Other
2.0 Mortgage Backed
Securities
Central Bank
1.5 Swaps
Net Portfolio LLC

1.0 Term Auction

Finance

0.5 Securities Held

Outright

0.0
Fall 2007 December 2008 April 2009

XWDG31B Source: FRB

Economic setting for 2009

• U.S. in recession since early 2008, accelerated with financial crisis

• Aggressive fiscal and monetary policy are crucial to arrest the downward spiral

• Dramatic drop in consumer spending has hit U.S. and global economies

• Consumer spending uncertain given employment and wealth issues

Massive job losses

Level Change in U.S.

Non-Agricultural Employment
Thousands
400
(Level Change, One Month Ago)

200

-200

-400

-600

-800
2005 2006 2007 2008 2009 2010
Monthly
MMDOT02E Source: BLS
Consumer confidence near record low

U.S. Consumer Confidence

Index 1985=100
160

120

80

40
2009 YTD

0
1970 1975 1980 1985 1990 1995 2000 2005
Annual
AMDOT42C Source: The Conference Board
Serious drop in consumer spending

U.S. Retail Sales

% Change Year Ago
12
(X = April)
8

Total
-4
Excl. Autos

-8

-12
2002 2003 2004 2005 2006 2007 2008 2009 2010
Quarterly
QMDOT26A Source: Census
Leads consumer to defer some purchases

U.S. Personal Savings Rate

Percent
8
Forecast*

0
1990 1995 2000 2006 2008 2009
Annual
AMDOT32E Source: BEA, *Weyerhaeuser
Economic setting for 2009

• U.S. in recession since early 2008, accelerated with financial crisis

• Aggressive fiscal and monetary policy are crucial to arrest the downward spiral

• Dramatic drop in consumer spending has hit U.S. and global economies

• Traditional sources of rebound are absent:

• Simultaneous collapse in global growth — complicates the situation for the

U.S.

• Housing not playing traditional role — not rebounding quickly

Crisis was a global event – serious recession in 2009

Growth in World Real GDP

Percent Change
5
Forecast
4

-1

-2

-3
2004 2005 2006 2007 2008 2009
Annual
AMIOT03A Source: Global Insight
Net exports were helping, until late 2008

Growth in U.S. Real Merchandise

Exports vs. Imports Non-Petroleum
% Change Year Ago
20

15 Exports

10

-5
Imports
-10

-15

-20

-25
2002 2003 2004 2005 2006 2007 2008 2009 2010
Quarterly
QMDGA06C Source: BEA
Economic setting for 2009

• U.S. in recession since early 2008, accelerated with financial crisis

• Aggressive fiscal and monetary policy are crucial to arrest the downward spiral

• Dramatic drop in consumer spending has hit U.S. and global economies

• Traditional sources of rebound are absent

• Federal government primary source for turnaround

Massive deficits to offset consumer spending decline

U.S. Government Surplus/Deficit

Trillion Current $
Forecast
0.5

0.0

-0.5

-1.0

-1.5

-2.0
1996 1998 2000 2002 2004 2006 2008 2010
Fiscal Year Source: Congressional Budget Office,
AMDGA07G
President's Projected Budget
Signs recession will end this year

Growth in U.S. Real GDP

Percent Change
6

Forecast*
4

-2

-4
1999 2001 2003 2005 2007 2009
Annual
AMDGA01A Source: BEA, *Weyerhaeuser
Key Messages - Cellulose Fibers

• Pulp prices hit hard in late 2008

• Rebound in the U.S. dollar against Euro and C$
• Deterioration in pulp demand
• Corresponding surge in pulp inventories

• Recent weakness in dollar favorable for pulp prices

Fluff market is global and growing

Fluff Market Pulp Consumption

by Region
Million Tons
Forecast*
6

5 Rest of
World
4
Rest of
3 Asia

Japan
2
Europe
1
N.A.
0
2000 2008 2012
Annual
APLOTG02C Source: Starr, Weyerhaeuser CF Busines
U.S. South primary source of fluff

Fluff Pulp Demand and

Regional Capacity for 2008
Million Tonnes
6

5 Capacity
Europe
4

3
Fluff Southern
Pulp U.S.
2
Demand

Annual
APLOTG12B Source: Starr, Weyerhaeuser
Excess inventory dampens prices

Total Softwood and Hardwood Market Pulp Inventories

(Seasonally Adjusted)
Days of Inventory
65

60 Softwood
Hardwood
55

50

45

40

35

30 Tight

25

20
2003 2004 2005 2006 2007 2008 2009 2010
Monthly
MPLOTG82B Source: PPPC
Fluff pulp prices held up better

Pulp Prices
Fluff vs. NBSK, Delivered Northern Europe
$/Metric Ton
1000
Fluff X = Q1
900 NBSK

800

700

600

500

400
1999 2001 2003 2005 2007 2009
Annual
APLOTP59D Source: RISI
Softwood capacity declining

Change in World Market Pulp Capacity

Bleached Softwood vs. Bleached Hardwood
Percent Change Forecast*

11
Softwood Hardwood
9

-1

-3

-5
2005 2006 2007 2008 2009
Annual
Source: PPPC, *Weyerhaeuser
APLOTG51G
Expect dollar decline to continue

U.S.$/Euro Euro Exchange Rate

(inverse)
0.7
Forecast*

0.9

1.1

1.3

(5/14)
1.5

1.7
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Quarterly
QMIEU09A Source: WSJ, *Weyerhaeuser
Summary - Cellulose Fibers

• Fluff pulp prices have held up relative to NBSK prices

• Dollar decline is critical to price outlook

Cellulose Fibers
Tom Gideon

Executive Vice President – Forest Products

 Cellulose Fibers business

End Uses End Product

Flows

Papergrade
~0.4MM Tons
Operations Towel/Tissue

6 Manufacturing Facilities
35% - Europe

Downstream End Product Converting

~1.9MM Tons
Bales Paper
5 “Primary” Mills
Grande Prairie, AB

~0.2MM Tons
Specialty
Flint River, GA
Pt Wentworth, GA 35% - North
Columbus, MS Textiles
New Bern, NC
Rolls
America
Filter Media
Bales
30% - Asia, South
Absorbents America
1 “Converting”Plant ~1.3MM Tons
Columbus, MS ( “CMF”)

Diapers

Wipes
Cash cost of goods sold in 2008

Packaging,
Supplies & Other
7%
Energy
8% Fiber
31%

Labor Cost
10%

Maintenance
14%
Chemicals
14%

Freight 16%
Addressing the short-term, positioning for the long-term

• Continuing our leadership position with key customers

• Aggressively reducing costs

• Slowed back each mill to achieve lowest cost position
• Reduced chemical and other costs
• Cut all discretionary spending
• Extended salary freeze to hourly workers
Economic Overview - Housing
Lynn Michaelis

VP – Chief Economist
Key messages – housing industry

• At bottom, expect slow rebound in 2009

• High inventory, foreclosures and tougher lending standards
• Increase in existing home sales is a bright spot

• The bubble markets were hit hard

• But low prices and improved affordability are resulting in a surge
of existing home sales

• Rate of rebound depends on national policy actions and

regional employment
At bottom in 2009, but gains momentum in 2010

U.S. Single-family Housing Starts

(Seasonally Adjusted Annual Rate)
Million Units
1.8
Forecast*
1.5

1.2

0.9

0.6

0.3

0.0
2000 2002 2004 2006 2008 2010
Quarterly
QMDHO06D Source: Census, *Weyerhaeuser
Foreclosure rate remains high

Foreclosure Started During Quarter

All Loans

1.20
(Percent, Seasonally Adjusted)

1.00

0.80

0.60

0.40

0.20
2001 2002 2003 2004 2005 2006 2007 2008 2009
Quarterly Source: Mortgage Bankers
QMDIR25A Ass'n of America
High vacant stock of units for sale

Vacant Homeowner Units for Sale

as a Percent of Total Homeowner Stock
Percent (Seasonally Adjusted)
3.0

2.5

2.0

1.5

1.0
2002 2003 2004 2005 2006 2007 2008 2009 2010
Quarterly
QMDHO98B Source: Census
Affordability is now at record levels

U.S. Housing Affordability Index

180
2009 Q1

160

140

120

100

80
1990 1993 1996 1999 2002 2005 2008
Annual
AMDIR06C Source: Nat'l Assn of Realtors
All WRECO regions are below 2002 levels

Single-family Building Permits

(Thousands)

2002 2005 2008

Las Vegas 25 30 6
Phoenix 40 51 11
Washington DC 30 25 9
Seattle 10 18 6
Houston 29 51 28
Source: Census
California housing seriously challenged

Single-family Building Permits for California

(Seasonally Adjusted Annual Rate)
Thousands
180

150

120

90

60

30

0
1998 2000 2002 2004 2006 2008 2010
Quarterly
QMDHO65G Source: Bureau of Census
Housing prices down 65% from peak

Median Existing Home Price for California

Thousand $

600

500

400

300
Q1
200

100
1998 2000 2002 2004 2006 2008
Annual
AMDHO103E Source: CAR
Housing affordability at record levels

Percentage of Households Able to Afford the

Median Priced Home in California
Percent
50
Q1 Est.*

40

30

20

10

0
1985 1988 1991 1994 1997 2000 2003 2006 2009
Annual
AMDHO63G Source: California Assn of Realtors, *Weyerhaeu
At current prices, houses are selling

Number of Existing Homes Sold in California

(Seasonally Adjusted Annual Rate)
Thousand
700

600

500

400

300

200
1993 1995 1997 1999 2001 2003 2005 2007 2009
Quarterly
QMDHO51D Source: California Assn of Realtors
Summary - housing

• Another challenging year in 2009, but most of house price decline is behind us
• Varies by region

• Variety of factors helping stabilize housing and construction market in 2009

• Recent home sales are encouraging
• Single-family housing starts double by end of 2010, with upside potential
Weyerhaeuser Real Estate
Company (WRECO)
Larry Burrows

President and CEO — Weyerhaeuser Real Estate Company

WRECO’s competitive strengths

• Geographic diversity

• Local value propositions

• Land entitlement and development expertise

• Customer satisfaction
Located in diverse and high-growth geographies
Unique brands with distinctive value propositions
High levels of customer satisfaction

Willingness to Refer
100

96
Percent

92

88

84
2007 2008 Q1 2009
Independent, third party research companies survey our customers
and ask if they would refer the builder to a friend or family member
 Creating value through entitling and developing land

Years 0 1 2 3 4 5 6 7 8

Environmental Impact Report

General Plan Amendment

Specific Plan or
Zone Change

Development Agreement
Citizen
Input
Tentative Map
Resource
Permits
Improvement
Plans

Final Map
WRECO residential lot position
Number of lots owned as of 3/31/09

25,000
20,000
15,000
10,000
5,000
0
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Total lots owned – 44,000; an additional 72,000 lots are controlled via option agreements
 WRECO residential lots – dollars invested

Investment as of 3/31/09
$1,200

$1,000
Consolidated Totals ($ M illions)
Historic Cost * $2,500
$800 Impairments to historic cost -$900
Current book value of residential lots $1,600
$ Millions

$600

$400
Balance Sheet Classification ($M illions)
Real estate in process of development
$200 and for sale $700
Land being processed for development $1,200
$0 Less: Completed & in process home
inventory, and commercial acreage -$300
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Current book value of residential lots $1,600

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Current Book Value Impairment

* Historic cost includes land purchase price, entitlement and development costs, taxes, and capitalized interest
WRECO residential lots – California by sub-markets

Investment as of 3/31/09
$400

Totals ($ Millions)
Historic Cost* $1,100
$300
Impairments to historic cost -$300
Current book value of residential lots $800
$ Millions

$200

$100

$0
Inland Empire LA/Ventura Northern California San Diego

Current Book Value Impairment

* Historic cost includes land purchase price , entitlement and development costs, taxes, and capitalized interest
Managing through the cycle

• Adjusted staffing
• 40% reduction since Q1 2008
• Additional 20% reduction by year end

• Reduced unsold completed inventory by 30% from Q1 2008

• Selectively selling non-strategic residential lots

• Curtailing spending on land acquisitions and development

Repositioning product to meet market conditions

2007 – Fairbrook Plan #2 2009 – Montclaire Plan #2

Priced at $420,000-$560,000 Priced at $320,000-$410,000

Offering a second product line to expand buyer pool

Cascade 2440 Classic Collection 3450

Priced at $360,000 to 480,000 Priced at $490,000-580,000

Repositioning product to meet emerging trends

Designed for the “ages” with enhanced green features

 Improving signs in April

Q1 April

Average Sales per Week Cancellation Rate

30
140

120 25

100
20

Percent
Units

80
15
60

40 10

20 5
2007 2008 2009 2007 2008 2009
Addressing the short-term, positioning for the long-term

• Long-term single-family housing fundamentals are favorable

• WRECO is well-positioned in desirable markets

• Market downturn is creating opportunities

• Major business imperatives

• Generate cash
• Reduce and rebalance land position
• Re-underwrite all option deals: either renegotiate or walk
• Sell non-strategic assets
Economic Overview –
Wood Products
Lynn Michaelis

VP – Chief Economist
Key messages – Wood Products markets

• Unprecedented demand drop has driven prices to levels below cash

operating costs

• Prices should rebound to cover cash operating costs for an average mill
• For lumber, need to see prices cover Canadian mill costs
• Canadian dollar is a major issue for both the lumber and OSB price outlook
Severity compared to earlier cycles

Demand on North American Lumber Mills

vs. Capacity
Billion Board Feet
Forecast*
85

75
Capacity

65

55

45
Demand

35

25
1975 1980 1985 1990 1995 2000 2005
Annual
AWDNALGD01L Source: RISI, *Weyerhaeuser
All regions curtailed output, but bigger hit for Canada

N.A. Lumber Production (SAAR)

Billion Board Feet
80
(X = Jan/Feb)

60
Canada

40

20 U.S.

0
1998 2000 2002 2004 2006 2008 2010
Quarterly
QWDNALGP02A Source: National Forest Products Assn, COFI
Prices fell below cash cost to force closures

Spruce-Pine-Fir 2x4 Mill Price

$/MBF
500

400

300

Cash Cost +
200
Export Tax

April

100
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Quarterly
QWDCLP08A Source: Random Lengths, RISI
Another anomaly: Douglas Fir below Spruce

Price Spread: Douglas Fir 2x4 Green Less

Spruce-Pine-Fir 2x4 Mill
$/MBF
50

40

30

20

10
2009 YTD
0

-10

-20

-30
1990 1993 1996 1999 2002 2005 2008
Annual
AWDWLPS02E Source: Random Lengths
In nominal dollars, prices back to 1982 levels

Nominal Douglas Fir 2x4 Green Lumber Price

$/MBF
450

400

350

300

250

200

150 2009 YTD

100

50

0
1967 1972 1977 1982 1987 1992 1997 2002 2007
Annual
AWDWLP08H Source: Random Lengths
But adjusted for inflation — 1935?

Real Douglas Fir 2x4 Green Lumber Price

2008$/MBF
800

600

400

200
2009 YTD

0
1967 1972 1977 1982 1987 1992 1997 2002 2007
Annual
AWDWLP08I Source: Random Lengths
Canadian lumber delivered costs eventually drive U.S. lumber
and log markets

• U.S. lumber production not sufficient to meet U.S. demand

• Cost structure in Canada is primarily operating costs, not stumpage

• Canadian exchange rate can significantly shift relative cost structure

between U.S. and Canadian mills
Canada accounts for over 25% of U.S. needs

Canadian Share of
U.S. Lumber Consumption
Percent
38

36

34

32

30

28

26 Jan/Feb

24
1998 2000 2002 2004 2006 2008
Annual
AWDCNLGD01A Source: COFI, AF&PA
Different cost structure in Canadian lumber industry

• In Canada, labor and energy costs account for 75-85% of total lumber
costs
• Much higher delivered log prices due to harvest and haul costs
• Stumpage is formula driven

• In U.S., labor and energy costs account for only 40-50% of labor cost
• Stumpage prices reflect logistic advantage and species premiums
For average mill to breakeven, need $25/mbf price lift

Production Costs and Margins for an

Average B.C. Interior Mill

Q3 April
2007 2008 2009
Cash Costs in C$** 253 227 201
Cash Costs in U.S.$** 236 218 165

SPF 2x4 Price* 245 256 167

Less Export Tax 33 22
Mill Net 222 145

Implied Margin for Avg. Mill 4 (20)

*Random Lengths
**Based on RISI Survey – Average B.C. Mill
Expect C$ to hold or strengthen in 2009

U.S.$/C$ Canadian Exchange Rate

(inverse)
0.60
Forecast*

0.70

0.80

0.90 (5/14)

1.00

1.10
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Quarterly
QMICA09E Source: WSJ, *Weyerhaeuser
Drop in housing revealed structural change

Estimated U.S. OSB Demand

Billion Square Feet Implied Imports from Canada
(3/8" Basis)
35
Capacity Industry Capacity
Capacity
30
Capacity
Capacity
25

20 Implied U.S. Capacity

Canadian
Imports
15

10
U.S.
5

0
2002 2005 2007 2008 2009 Q1
Annual Source: RISI Capacity,
AWDPNIMP09E Weyerhaeuser demand estimates
Reason Canadian output has collapsed

N.A. OSB Production

(Seasonally Adjusted Annual Rate)
Billion Square Feet
30

25

20
Canada

15

10 U.S.

5
1999 2001 2003 2005 2007 2009
Quarterly
QWDNAPGD02D Source: APA
Shift has kept prices below cash operating costs

N.C. Oriented Strand Board 7/16" Price

$/MSF
500

400

300
Cash Cost for
Industry Average*

200

April
100
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Quarterly
QWDPNLP04C Source: Crow's, *RISI
Summary - Wood Products

• Another challenging year given housing starts and excess capacity

• Prices need to reflect cash operating costs for average mills eventually
• Log prices moved sharply lower in late 2008—will help U.S. sawmill cost
position in 2009

• Very challenging for OSB and engineered lumber in 2009-10 given low
operating rates
Wood Products
Tom Gideon

Executive Vice President – Forest Products

Aggressive actions this year

Actions Impact
Lumber z Announced closure of 4 mills z Total capacity reduction of 1.2 bbf
z Announced shift reductions at 5 mills

OSB z All mills now operating at 5/2 z Total capacity reduced by 2.7bsf
z 550 msf since Jan

Veneer z 5 mills closed z Capacity Reduction

• 25% reduction in TJI’s

• 28% reduction in Microllam &

• 35% reduction in Veneer

Timberstrand z Permanently idled East Kentucky z Capacity reduced 39%

SGA z Headcount reduced by 200+ z SG&A reduced by 13% to 15%

compared to last year
Cash cost of production in 2008

Raw Salaries / Resins &

Materials* Labor Energy Additives Other

Lumber 64% 19% 4% 0% 13%

OSB 31% 17% 8% 24% 21%

EWP - TJI 79% 10% 1% 4% 6%

* Raw materials are

• Logs for lumber and OSB
• LVL and OSB for TJI
Production response to lower housing starts

Volume as a percentage of 2006 levels

100%

75%

50%

25%

0%
2006 2007 2008 2009

Single Family Housing Starts Lumber OSB TJI

Addressing the short-term, positioning for the long-term

• Significant short-term challenges

• Adjusting the controllable variables

• Relentlessly reducing costs
• Ensuring the best balance between demand and supply
• Maintaining pricing discipline across all product lines
Economic Overview –
Timberlands
Lynn Michaelis

VP – Chief Economist
Key messages - Timberlands

• Log prices in the West fell over 25% during the last two months

• Log prices in the South are also adjusting, but not as severely

• Timberland prices remain stable reflecting favorable long-term outlook

Log prices lag lumber prices

Douglas Fir Domestic #2

Log Price
$/MBF
700

600

500

400
April

300
1998 2000 2002 2004 2006 2008 2010
Quarterly Source: Log Lines
QTLP24A
Western production now below early 1990’s

West Coast Lumber Production (SAAR)

Billion Board Feet
13

11

Jan/Feb

5
1990 1993 1996 1999 2002 2005 2008
Quarterly
QWDUSLGP01H Source: WWPA
Southern log prices have held up better

All South Weighted Average

Delivered Softwood Log Price
$/MBF
500

450

400

350

300

250
1998 2000 2002 2004 2006 2008 2010
Quarterly
QTLP03D Source: Timber Mart-South
Timberland prices reflect long-term outlook

• Financial owners taking longer term view

• Long-term trend appreciation based on:

• Historic returns and expected rebound in housing starts
• Decline in Canadian harvest due to Mountain pine beetle
• Additional revenue from non-traditional sources
Housing demand driven by formation of households

Newly Built Units Added to Housing Stock

vs. Household Growth (millions/year)
Millions
2.5

Mobile Homes
2.0 Replacements Multi-Family
and other Single-Family
Household Growth
1.5

1.0

0.5

0.0
1980s 1990s 2000-07

AMDHO68K Source: Census

Share of single family determined by ownership trend

U.S. Homeownership Rate

Percent
70
Forecast*

68

66

64

62
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
Annual
AMDHO29K Source: Census, *Weyerhaeuser
Expect favorable single-family housing starts even if
ownership trends lower

Newly Built Units Added to Housing Stock

vs. Household Growth (millions/year)
Millions
2.5
Mobile Homes
Multi-Family Forecast*
2.0 Replacements Single-Family
and other
Household Growth

1.5

1.0

0.5

0.0
1980s 1990s 2000-07 2008-10 2011-15

AMDHO68J Source: Census, *Weyerhaeuser

Given trend demand range for housing — lumber approaches
2005 peak

Demand on North American Lumber Mills

Billion Board Feet Forecast*
80

70 Trend

60

50

40
1995 2000 2005 2010 2015
Annual
AWDNALGD01A Source: RISI, *Weyerhaeuser
Reason lumber capacity expected to decline by 2015

Estimated Impacts of Mountain Pine Beetle Infestation

on Timber Harvests in B.C. Interior
Million Cubic Meters
Log Volume per Year
80

Harvested Beetle Kill

AAC
60

Inventory
Adjustment
40

20

0
2005 Base AAC 2006-10 2015+
Annual Source: BCMOF
ATLG07C
Trend value for U.S. timber driven by Canadian costs

• U.S. needs Canadian supply to meet lumber demand

• Marginal supply has price setting role

• U.S. producers bid improving lumber prices back to log prices

U.S. needs Canadian lumber through the cycle

U.S. Lumber Consumption

Billion Board Feet
Forecast*
70
Offshore Imports
60 Canadian Imports
U.S. Production
50

40

30

20

10

0
1976 1985 1995 2005 2008 2015

AWDUSLGD30H Source: WWPA, AF&PA *Weyerhaeuser

Trend price logic: step one

Production Costs for Average B.C. Interior Mills

2008 2011-15*
In Canadian $/MBF
Net Wood Cost 121 189
Manufacturing 99 110
Margin 27 34
_______ ________

Total Long-Term Cost 190 335

Duties 29 34
______ ________

SPF 2x4 in C$/MBF 219 369

Exchange Rate (C$/US$) 1.02 1.25
______ ________

SPF 2x4 (US$/MBF) 215 295

*Extrapolation not a forecast
Source: RISI
Trend price logic: step two

Trend Price for West Coast

Lumber and Logs

2011-15*
SPF 2X4 (MBF) $295-$310
Plus historic spread 25

Implied DF 2X4 (MBF) $320-$335

Less mfg 95
Plus residuals 45
Less margin 24

Equals Wood Cost $246-$261

Implied log price (MBF Scribner) $590-$625

*RISI mfg costs, Random Lengths

More to timberland valuation story

• Finite resource capable of providing multiple values such as land

appreciation, timber production and appreciation, and non-timber income
• Potential government actions could boost those values

• Timberland are part of the asset mix of many diversified portfolios

Timberland Asset Value Components
Value per Acre

Appreciation/Supply Scarcity

Biofuels

Carbon

Real Estate/HBU

Minerals, oils & gas

Value lift with lower (TIMO) discount rate

Timber traditional discount rate

XTLG19A
Summary - Timberlands

• Log prices fell into line with lumber prices

• Timberland prices have been relatively stable

Timberlands
Tom Gideon

Executive Vice President – Forest Products

Global footprint

Thousands of Acres
Fee Long-term Total Fee and License
Ownership Lease Lease Arrangements
U.S. West 2,220 2,220
U.S. South 3,433 696 4,129
Canada 15,178
Uruguay 321 26 347
China 52
Total 5,974 722 6,696 15,230
Tree species

• Loblolly pine in the South Loblolly Pine

• Fast early growth, resulting in younger
harvest ages (compared to Douglas fir)
• Responsive to management to influence
growth and reduce risk of insect loss
Douglas Fir

• Douglas fir in the West

• Manageable to increase yields
• Taller / older at normal harvest ages compared to pine
• Products generally command higher market values
• Current market conditions are unprecedented
Cash costs of production for 2008

Other
9%
Logging
23%
Canadian
Operations
18%

International
Operations
Hauling &
3%
Roads
23%
Forestry
10%

Marketing/Handling
4% Export OSP
10%
Cash costs of production in 2008

Hauling & Marketing Export

Logging Roads & Handling Forestry OSP Other

U.S. West 30% 28% 8% 5% 19% 10%

U.S.
32% 33% 3% 20% 0% 12%
South
Sustainable harvest availability

U.S. Timberlands Harvest

Commercial Thin
30
Final Harvest
25
Millions of Cubic Meters / Year

20

15

10

0
2004-2008 2009-2013 2014-2018
Actual Estimated Availability
Deferring harvest in 2009

5
Millions of Cubic Meters

0
Q1 2008 Actual Harvest Q1 2009 Actual Harvest
Minerals

• Weyerhaeuser routinely reserves mineral rights when selling timberlands

acreage – in the U.S. as of year end 2008 our managed assets included
• 6.4 million surface acres
• 6.8 million net minerals acres

• A leader in developing mineral, oil and gas revenue

• Royalty payments on oil and gas production
• Bonus income from oil and gas leasing and exploration activity
• Royalty payments on hard minerals (rock, sand and gravel)
• Geothermal lease and option revenues
Addressing the short-term, positioning for the long-term

• Flexing harvest volumes to meet market needs

• Capturing export market value

• Continuing cost reductions

• Consolidating export facilities and operating areas
• Optimizing silviculture investments on a site by site basis

• Continuing to develop all potential value streams

• Minerals
• Biomass / energy
• Conservation easements
• Carbon credits
Financial Overview
Patty Bedient

Executive Vice President – Chief Financial Officer

Liquidity and debt maturities

• Over $1.7 billion cash and short-term investments

at March 31, 2009

• Near-term debt maturities (including WRECO)

• 2009 $458 million
• 2010 43 million
• 2011 30 million

• $2.2 billion in unused committed bank facilities

• BBB- (stable) / Ba1 (stable)

Reducing cash expenditures

• Variable cost reductions

• $375 million SG&A target reached
• Froze salaries
• Eliminated 401-K match
• More actions to come

• Capital expenditures less than $200 million

• Quarterly dividend $0.25/share

REIT update

• Actions taken to increase flexibility to consider REIT conversion

• Calendar year adopted
• Legal reorganization
• Wholly owned subsidiary of Weyerhaeuser Company holds
manufacturing and real estate assets
Conversion unlikely in 2009

• Limitations on NOL carryback

• Low level of timber income reduces 2009 benefit

• Earnings and profit distribution

Other considerations

• REIT technical tests

• TRS market value less than 25% of gross REIT assets
• Dividends from TRS limited to 25% of REIT qualifying income
• Other income limited to 5%

• Monitoring potential tax policy changes

Closing Remarks
Dan Fulton

President and Chief Executive Officer

Questions