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

Forward-looking Statement z

z

New York City

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 .

Steve Rogel Chairman, President and Chief Executive Officer

Strategic Direction Patty Bedient

Senior Vice President, Finance and Strategic Planning

Portfolio Principles

New York City

z

Cost of capital

z

Focused scale

z

Growth

Weyerhaeuser Revenue — 2005 Revenue: $23 Billion Containerboard, Packaging & Recycling 20% Cellulose Fiber 6% White Paper 12%

New York City

Other 3%

WRECO 13% Timberlands 5%

Wood Products 41%

Weyerhaeuser Real Estate (WRECO) Strategic Direction z Organic growth

New York City

z

Adjacent markets

z

New markets

Implementation z Record growth and returns in existing markets z Portland, Oregon; Sacramento z Maracay Homes, Phoenix

Wood Products — Residential Strategic Direction z

New York City

Providing framing solutions to the home building industry

Implementation Refocused value proposition z Launched iLevel brand z

Wood Products — Industrial Strategic Direction z

New York City

Explore opportunity for scale growth in hardwoods and appearance products

Implementation Sell Composite Panels z Refocus Southern Hemisphere investments to grow in South America z

Weyerhaeuser Revenue — 2005 Revenue: $23 Billion Containerboard, Packaging & Recycling 20% Cellulose Fiber 6% White Paper 12%

New York City

Other 3%

WRECO 13% Timberlands 5%

Wood Products 41%

White Paper Strategic Direction Improve Fine Paper business z Evaluate strategic alternatives z

New York City

Implementation Closed higher-cost capacity z Active discussions with 3rd parties z

Cellulose Fibers Strategic Direction z

New York City

Differentiated products

Implementation Aligned capital to strategy • Conversion of Port Wentworth • R&D investment in new products z Closed higher-cost capacity z Improve mill system performance z

Containerboard, Packaging & Recycling Strategic Direction z

Transform business model

Implementation z

Optimize supply system to be demand driven and lower cost • Organized around market segments • Increased integration and asset utilization by closing high-cost capacity

New York City

z

Improve pricing strategies

z

Align capital with strategy

Timberlands Strategic Direction z

New York City

Optimize and grow

Implementation Continue successful business model z Continue to pursue tax legislation z Evaluated alternative structures z

Financial Strategy Strategic Direction z

z

New York City

Return capital to shareholders

Disciplined capital program

Implementation Dividend • Increased by 25% in 2005 z Share repurchase • 18 million authorized z Maintain capital spending at less than 80% depreciation z

Summary

New York City

z

Strategic review delivered a course of action

z

Portfolio direction is set

z

Focus is on implementation

Strategic Update — Timberlands Dick Taggart

Executive Vice President, Chief Financial Officer

Timber Update Analysis ● Weyerhaeuser’s Timberlands business ● Industry ownership structures

New York City

z

Issues for transforming into a REIT

z

Conclusions and next steps

Weyerhaeuser Timberlands z

New York City

Business selling at market prices to internal and external customers

z

Softwood sawtimber focus with intensive silviculture

z

Add integration value through efficient conversion

z

Extract mineral, oil, gas and development values

z

Constantly reposition the portfolio to strategic core

z

Reinvest in highest returning regions

z

Forests managed sustainably and by SFI or CSA

Weyerhaeuser Timberlands Ownership Millions of Acres

9 8 7 6 5 4 3 2 1 0 1998

2002

2005

Average Log Price z

$/MBF

Average log price has remained relatively stable

800 700

Export

600 500

Domestic

400

(Avg. West & South)

300 200 100 1998

1999

2000

2001

2002

2003

2004

2005

Weyerhaeuser Timberlands Harvest z

Continued intensive management of long-term portfolio

Millions of CCF 10.00 8.00 6.00 4.00 2.00 1998

2002

2005

Weyerhaeuser Timberlands Business — Earnings $ Millions

900 800 700

Portfolio Optimization

600 500 400 300

Timber Operations

200 100 0 1998

2002

2005

Why Retain Timberlands? z z

New York City

We continuously evaluate hold vs. sell Divest when tax-adjusted market values exceed holding values

Different Ownership Structures for Timber Organizations

Public Owners C-Corp REIT

Private Owners Strategic Financial Direct Pooled

New York City

Tax Rate

35%

Pass through

Pass through

Mandatory Distributions

No

Yes

No

Debt / Leverage

Yes

Limited

Yes

Other Businesses

Yes

Limited

Strategic – Yes Financial – Unlikely

REIT Creation Issues z

Issues on transition to create value from REIT conversion • Potential tax liability • Impact on remaining businesses • Constraints in implementing strategic plans

New York City

Tax Issues Relative to Timberland REIT Conversion z

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

Tax Issues Relative to Timberland REIT Conversion (cont.) z

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

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

Timber Tax Equity z

z

New York City

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

Conclusions z

z z

z

New York City

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

Industry Outlook Lynn Michaelis

Vice President, Markets & Economic Research and Chief Economist

Agenda for Industry Outlook z z

New York City

Macroeconomic setting for forest products Outlook for • Wood Products • Cellulose Fiber (Pulp) • Containerboard, Packaging and Recycling

Macroeconomic Setting for Forest Products z z z z z

New York City

Economic growth remains healthy Dollar decline resumes U.S. industrial production growth continues Inflation and interest rates move higher Housing starts peak

Momentum Carries into 2006 Growth in World Real GDP Percent Change

Forecast*

5

4

3

2

1

0 1992 AMIOT03F

New York City

1994

1996

1998 Annual

2000

2002

2004

2006

Source: Global Insight, Weyerhaeuser*

Another Year of 3–4% Growth Growth in U.S. Real GDP Percent Change

Forecast*

5

4

3

2

1

0 1996 AMDGA01H

New York City

1998

2000

2002 Annual

2004

2006

Source: BEA , Weyerhaeuser*

Surge in Consumer Spending Fueled by Housing Refinance Boom U.S. Personal Savings Rate Percent 5 4 3 2 1 0 -1 1995 AMDOT32D

New York City

2000 Annual

2005 Source: BEA

Dollar Decline Resumes in 2006 Euro Exchange Rate

U.S.$/Euro (inverse)

Forecast*

0.7 Euro introduce

(X = 5/04)

0.9

1.1

1.3

1.5

1.7 1998 QMIEU09F

New York City

1999

2000

2001

2002

2003

Quarterly

2004

2005

2006

2007

Source: Wall Street Journal, Weyerhaeuser*

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 -8 1988 AMDOT78D

New York City

Q4 1992

1996 Annual

2000

2004 Source: BLS

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 AMDIP36E

New York City

1999

2000

2001

2002 Annual

2003

2004

2005

2006

Source: FRB, Weyerhaeuser*

Inflation Remains Above 3% U.S. Consumer Price Index (CPI) Inflation Rate Percent Change

Forecast*

4

3

2

1

0 1998 AMDIF01F

New York City

2000

2002 Annual

2004

2006

Source: BLS, Weyerhaeuser*

Result: FRB Moves Short Rates Higher U.S. Interest Rates Pe rce nt

Forecast*

10

8

Moody BAA Bonds

6

4

3-month Commercial

2

0 1997 AMDIR86G

New York City

1998

19 99

2000

2001

2002

Annual

2003

2004

2005

2006

Source: FRB, Weyerhaeuser*

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 AMDHO19N

New York City

1994

1996

1998 Annual

2000

2002

2004

2006

Source: Census, Weyerhaeuser*

Very Positive Long-term Trends for Single-family Housing Starts z z z

New York City

Demographics Average home size Housing finance: Efficiency and flexibility

Agenda for Industry Outlook z z

New York City

Macroeconomic setting for forest products Outlook for • Wood Products • Cellulose Fiber (Pulp) • Containerboard, Packaging and Recycling

Key Drivers for Lumber z

z

New York City

Demand primarily driven by residential construction — new and remodeling • Limited substitution Supply is more complex • Timber supply • Canadian delivered costs • Limited offshore competition

Another Record Demand Year in 2005 Demand on North American Lumber Mills vs. Capacity Billion Board Feet 80 75 70 65

Capacity

60 55 50 1988 AWDNALGD01E

New York City

Demand

1991

1994

1997 Annual

2000

2003 Source: RISI

Substitution Was Wood for Wood Board Feet/ Square Feet

Lumber Usage in U.S. Single-Family Housing

8 Engineered Wood

6

4 Lumber 2

0 1995 AWDG32C

New York City

2003 Annual

Source: NAHB Housing Survey

U.S. Lumber Output Keeps Growing U.S. Lumber Production Billion Board Feet 50

40

30

34.3 3.1

15.8

36 3.0

40.3 3.4

Other

18.6

South

6.6

Inland

West Coast

16.7

20

10

6.6

6.6

8.8

9.7

11.8

2001

2003

2005

0

AWDUSLGP10F

New York City

Annual

Source: WWPA

U.S. Imports in Perspective U.S. Softwood Lumber Imports (Billion Board Feet)

Canada Europe South America Other Total Source: RISI

New York City

2002

2005

2005 Share (%)

19.1 0.6 0.6 0.6

21.5 1.4 0.7 0.9

34 2 1 1

_____

_____

___

20.8

24.5

38

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 QMICA09F

New York City

2001

2002

2003

2004

Quarterly

2005

2006

2007

Source: Wall Street Journal, Weyerhaeuser*

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

Prices Approached Cost Floor in Late 2005 Spruce-Pine-Fir 2x4 Lumber Price $/MBF 450 (X = April)

400 350 300

Reported Random Lengths

250 Estimated Mill Net

200 150

Cost Support in 2005

Cost Support in 2002

100 2001 QWDCLP07E

New York City

2002

2003

2004 Quarterly

2005

2006

2007

Source: RISI Mill Survey, Random Lengths

Tentative Agreement Was Reached April 27, 2006 z

z

New York City

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

Tentative Agreement Was Reached April 27, 2006 z

z

z

New York City

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

Tentative Agreement Was Reached April 27, 2006 z

z

z

z

New York City

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

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

450 400 350 300 250 200 1995 QWDWLP06A

New York City

(X = April)

1997

1999

2001 Quarterly

2003

2005

2007

Source: Random Lengths

Reflects Lumber Prices and New Capacity Douglas Fir/Domestic No. 2 Sawmill, Western Oregon and Washington $/MBF

(X = April)

700

600

500

400 1998 QTLP24A

New York City

1999

2000

2001

2002 2003 Quarterly

2004

2005

2006

2007

Source: Log Lines

Key Drivers for Oriented Strand Board (OSB) z z z

New York City

Demand primarily driven by new residential construction Substitution for plywood New capacity growth continues

Demand Pressed Capacity Limit in 2003–05 North America OSB Demand vs. Capacity Billion Square Feet 30

25

20

Capacity

Demand

15

10 1995 AWDNAPGD38G

New York City

1997

1999 Annual

2001

2003

2005 Source: RISI

Keeping Prices High N.C. Oriented Strand Board 7/16" Price $/MSF 500

400

300 April

200

100

0 1999 QWDPNLP04E

New York City

2000

2001

2002

2003 Quarterly

2004

2005

2006

2007

Source: Crow's

Costs Reflect Energy, Resin and Exchange Rates Variable Cost for an Average OSB Mill* (7/16”, $/MSF)

U.S. South Eastern Canada

* Based on RISI Survey Data

New York City

2002

2005(e)

% Change

116

144

24

88

140

59

Engineered Products Demand Continues to Grow North America I-Joist Demand Million Lineal Feet 1500

1000

500

0 1996 AWDG27G

New York City

1998

2000 Annual

2002

2004 Source: RISI

Agenda for Industry Outlook z z

New York City

Macroeconomic setting for forest products Outlook for • Wood Products • Cellulose Fiber (Pulp) • Containerboard, Packaging and Recycling

Key Drivers for Cellulose Fiber (Pulp) z

New York City

Global Market: Demand growth near 3% • Economic growth • China shift to wood pulp continues • Tissue and fluff end-uses

China Demand Growth Averaged 20% per Year for 2000–05 Period China Imports of Bleached Kraft Pulp Million Metric Tons 6 5

Softwood Hardwood

4 3 2 1 0 2002 APLOTG49A

New York City

2003

2004 Annual

2005 Source: Weyerhaeuser

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 APLOTG02F

New York City

2005 Annual

Source: Weyerhaeuser

Key Drivers For Cellulose Fiber (Pulp) z z

New York City

Global Market: Demand growth near 3% Capacity / operating rate • Exchange rate is critical to price outlook • Continued expansion in hardwood capacity

Scan Costs Higher in U.S. Dollar Terms $/Tonne

Manufacturing Costs for Bleached Softwood Kraft Pulp

600 500

Typical Mill U.S. Canada

400

Sweden

300 200 100 0 2002

2005-06 Source: Weyerhaeuser

APLOTP84A

New York City

Softwood Capacity Declines in 2006 Change in World Capacity Bleached Softwood vs. Bleached Hardwood Percent Change 8 Softwood

Hardwood

Estimated*

6

4

2

0

-2 2003 APLOTG51F

New York City

2004

2005 Annual

2006

Source: PPPC, Public Announcements*

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 QINDP05A

New York City

2001

2002

2003

2004

Quarterly

2005

2006

2007

Source: RISI

Agenda for Industry Outlook z z

New York City

Macroeconomic setting for forest products Outlook for • Wood Products • Cellulose Fiber (Pulp) • Containerboard, Packaging and Recycling

Key Drivers for Containerboard, Packaging and Recycling z z z

New York City

Nondurable industrial production Capacity / operating rate crucial to prices New factor for OCC prices: Energy costs for OCC plants

Box Shipments Track Industrial Production Average Annual Percent Change

Weighted* Industrial Production and Annual Growth of U.S. Box Shipments

4 Industrial Production Box Shipments

3

2

1

0 * 80% non-durable; 20% durable

-1 1993-1997 ACBBX G82L

New York City

1998-2003

2004-05 Source: Fibre Box Association, FRB

No Capacity Growth Since 1997 Average Annual Percent Change

U.S. Containerboard Capacity

5 4 3 2 1 0 -1 1993-97 ACBOTG10H

New York City

1998-2003 Annual

2004-05 Source: AF&PA

Results in Another Very Tight Year Containerboard Operating Rate Percent 100 Tight Market

95

90

85

80 1998 QCBOTG09E

New York City

1999

2000

2001

2002 2003 Quarterly

2004

2005

2006

2007

Source: AFPA

The Bottom Line: Box Prices Will Follow U.S. Corrugated Box Price vs. Eastern U.S. Linerboard Price

Box $/MSF

Liner $/Short Ton

60

520 500

Box (left) Liner (right)

58

April

480

56

460 440

54

420

52

400 380

50 48 2000 QCBOTP01A

New York City

360 2001

2002

2003

2004

Quarterly

2005

2006

340 2007

Source: RISI and FBA

China’s OCC Demand Continues to Grow China OCC Imports

Million Metric Tons (Annual Rate) 10

8

Total From U.S.

6

4

2

0 1996

1998

2000

2002

2004

Annual ARCOCCG14A

New York City

Source: EU Consulting, China Foreign Trade Report

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 QRCOCCP16B

New York City

2000

2001

2002

2003 Quarterly

2004

2005

2006

2007

Source: Official Board Markets

Energy Cost Increase Hit OCC-Based Plants Manufacturing Cost $/SWT

Comparison of Virgin* vs. Recycled* Plant Costs Energy Other Manufacturing Fiber

300 250 200 150 100 50 0 2003-04 Virgin ARCOCCP14C

New York City

2005.4 Virgin

2003-04 Recycle

2005.4 Recyle * Lower cost mills Source: Weyerhaeuser

Summary of Key Messages z

z z z z

z z

New York City

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

WRECO and iLevel Dan Fulton

President, Weyerhaeuser Real Estate Company

Weyerhaeuser Real Estate Company z

z

New York City

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

Business Definition Homebuilding Pardee Quadrant

WRECO

Trendmaker Winchester Maracay

Builder Finance WRI

New York City

Business Definition — WRECO Operations

Office Locations z Maracay z Pardee z Quadrant z Trendmaker z Winchester

New York City

Business Definition Homebuilding Pardee Quadrant

WRECO

Trendmaker Winchester Maracay

Builder Finance WRI

New York City

Business Definition

New York City

WRECO Land Strategy z z

z

z

z

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

WRECO Land Strategy (cont.) z

Selling land is part of our business

z

Disciplined focus on ROI • Optimizes balance between margin and asset turnover

WRECO Growth Roadmap z

Organic growth is the Base Case for our growth strategy Strategic Direction Market Penetration

Organic Growth (Base Case)

New Products New Brands

Implementation Incremental Investment in Existing Markets Condominiums, Age-Restricted Camberley Homes

Adjacent Markets Adjacent Markets

Leverage Brand Equity

Portland, OR. (Quadrant) Northern California (Pardee)

Leverage Existing Management

New Markets

Acquisition Start-up

Phoenix (Maracay Homes, Feb 2006)

WRECO Is Positioned to Succeed z

Long-term favorable outlook for single-family housing

z

WRECO is a top performer • • • • •

z

New York City

Select markets Proven land strategy Experienced management team Focus on financial performance Leading financial results

Linkage to Weyerhaeuser

Homebuilding Industry Continues to Evolve z z

z

z

New York City

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

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

Key Advantages of Large Homebuilders

New York City

z

First look at land and partnership deals

z

Product and geographic diversity

z

Strong balance sheets

z

Scale to leverage processes and supply agreements

z

Expertise to underwrite, control and process land

z

Attract and retain high talent work force

z

Greater relative investment in technology

Weyerhaeuser is a Leading Producer of Residential Building Materials 2005 Total 3rd-Party Sales = $9.4 Billion Other Products 23% Softwood Lumber 39%

Plywood / Veneer 8% Oriented Strand Board 12% Engineered Lumber Panels 18% New York City

Is Positioning for the Future z

Integration: 5 businesses into 1

z

Innovation: Driving profitability of our customers

z

Interaction: Transforming the way we do business

z

Information: Increasing the transparency of data

Value Proposition Overview z

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

z

Improve coordination across the supply channel

z

Balance common processes with unique regional needs

z

Capture the full value of Weyerhaeuser integration

New York City

Directed at the “Sweet Spot” of Homebuilders’ Cost Materials & Indirect 28%

Construction Labor 20% Marketing/Advert. 6% Overhead 6%

Land and related 22%

Profit 16%

Financing/other 2%

Source: Professional Builder Magazine, May 2006 (average of 6 th -31st largest builders)

New York City

Strategic Validation Harvard University, Joint Center for Housing Studies Key Findings: Homebuilder Distribution Study, 2005 z

z

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

Expected Benefits %

Proprietary Product, Solutions and Whole House

>20%

100

Service Differentiated

Margins

80 60

Commodity