Slide 1: 2010 Investor Meeting
WEYERHAEUSER COMPANY MAY 27, 2010 Exhibit 99.1 2010 Investor Meeting
Slide 2: Kathy McAuley
Kathy McAuley Vice President, Investor Relations
Slide 3: Forward-looking Statement
Forward-looking Statement This news release 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 acc
Slide 4: Agenda
Agenda Dan Fulton: Introduction Larry Burrows: Weyerhaeuser Real Estate Company (WRECO) Tom Gideon: Wood Products, Cellulose Fibers, Timberlands Miles Drake: Applied Technology Patty Bedient: REIT and Financial Update Dan Fulton: Conclusion and Q&A
Slide 5: Dan Fulton
Dan Fulton President and Chief Executive Officer
Slide 6: Larry Burrows
Larry Burrows President – Weyerhaeuser Real Estate Company (WRECO)
Slide 7: WRECO Overview Located in Desirable Markets
WRECO Overview Located in Desirable Markets
Slide 8: Leading Brands, Local Value Propositions
Leading Brands, Local Value Propositions
Slide 9: Financial Strength, Local Agility
Financial Strength, Local Agility Local Value Proposition National Homebuilders WRECO Local Builders Decreasing access in downturn
Slide 10: Strategic Initiatives Adapting to Local Market Conditions
Strategic Initiatives Adapting to Local Market Conditions Reduced hard costs approximately 30%; monthly sales increased by 300% Extended product line to move-up buyer; increased sales in community by 15% Universal and green design features incorporated into active adult product line and offered as o
Slide 11: Strategic Initiatives Adapting to Local Market Conditions
Strategic Initiatives Adapting to Local Market Conditions Offer distinctive <$200,000 product line in highly competitive sub-market; monthly sales increased 400% Tap underserved second home rural/beach market on customer’s lot Exploit new land opportunity through re-designed product
Slide 12: Market Performance Year Over Year Improvement for Consecutive Quarters
Market Performance Year Over Year Improvement for 4 Consecutive Quarters
Slide 13: Operational Improvements Residential Lots Sold
Operational Improvements Residential Lots Sold 5,141 5,011 2010.1
Slide 14: Improved Margins and Sales Velocity
Improved Margins and Sales Velocity Source: SEC filings Sales Per Community Per Month 2010.1 Single-Family Gross Margins (1) (1) Single-family gross margin = revenue less direct cost of sales, indirect cost of sales and period costs without regard to impairment charges
Slide 15: Well-Positioned Land in Target Markets
Well-Positioned Land in Target Markets Positioning Allows Opportunistic Sales to Land-Light Builders Distribution of WRECO Owned Lots California 57% Nevada 32% VA & MD 6% Texas 2% Washington 2% Arizona 1%
Slide 16: Well-Positioned for Recovery
Well-Positioned for Recovery 2010 priorities Return to profitability Generate positive cash flow Flexibility to adjust land pipeline for current market opportunity Long-term opportunities Housing fundamentals are favorable Market recovery creates further opportunities to reposition land portfolio
Slide 17: Tom Gideon Wood Products
Tom Gideon Wood Products Executive Vice President – Forest Products
Slide 18: Focus on Residential Structural Frame
Focus on Residential Structural Frame 2009 Wood Products Net Sales $2.2 Billion
Slide 19: Aggressive Action to Restructure Operations
Aggressive Action to Restructure Operations Significantly reduced costs Closed and curtailed facilities Reduced staff Optimized manufacturing efficiencies
Slide 20: Well-Positioned for Recovery
Well-Positioned for Recovery Leveraging scale and market position to maximize returns as markets recover Capitalizing on the gains resulting from the actions taken during the downturn Disciplined approach to working capital management
Slide 21: Cellulose Fibers
Cellulose Fibers
Slide 22: Focus on Absorbents and Specialty Fibers
Focus on Absorbents and Specialty Fibers Value-added, innovative specialty fibers create a competitive advantage Leading producer of absorbent fluff Proprietary fibers for specialty applications Strong markets experiencing global growth Constant focus on operational improvement Achieve world class p
Slide 23: Creating Value through Collaboration and Innovation
Creating Value through Collaboration and Innovation Key customers offer growth opportunities Develop technology solutions through targeted collaboration Differentiated absorbent products Non-wovens Composite materials Green energy solutions
Slide 24: Timberlands
Timberlands
Slide 25: Timberlands Strategy
Timberlands Strategy Grow and manage financially attractive, sustainable forests Position harvest for US recovery Apply market knowledge to create additional value Operate at scale and capture cost advantages Explore opportunities for future growth Increasing cash flow and asset value
Slide 26: Asset Base is Over 90% Productive Timberlands
Asset Base is Over 90% Productive Timberlands Timberlands Acres (000) % US West US South Uruguay China JV Total High quality sawtimber Source of environmental and public benefits Does not include 15.2 million acres of forestland under license in Canada Core 1,850 3,720 5,956 90.7% Non-Core - - 9.3%
Slide 27: Generating Earnings from Non-Core Land
Generating Earnings from Non-Core Land Exchange for core land Sales of higher-and-better use (HBU) and non-strategic land Conservation and wetlands mitigation opportunities
Slide 28: Canadian Licensed Timberlands Managed for Manufacturing Operations
Canadian Licensed Timberlands Managed for Manufacturing Operations Timberlands leased from provincial governments to secure volume for our iLevel and Cellulose Fibers facilities Lands managed according to provincial standards Province Acres (millions) Alberta 5.3 British Columbia 2.3 Ontario 2.6 Sas
Slide 29: All Lands are Independently Certified Under Applicable Standards
All Lands are Independently Certified Under Applicable Standards Key stakeholder involvement Based on sound science Open, independent, peer reviewed research Program broad in scope Lands managed for productivity and ecosystem values Recognized as an industry leader by the Dow Jones Sustainability In
Slide 30: Sawtimber Expertise Creates Highest Operating Values
Sawtimber Expertise Creates Highest Operating Values Sawtimber increases in volume and value as it grows Weyerhaeuser’s precision forestry further improves value Age of Timber Stand Higher Harvest Values Under Precision Forest Management WY Precision Forestry: Increased yields and higher value produ
Slide 31: Timberlands Inventory: US West
Timberlands Inventory Demonstrates Species Preference and Age Class Distribution Age Class Distributions DOUGLAS FIR / CEDAR WHITEWOOD OTHER CONIFER HARDWOOD US West 76% 18% 5% 1% Douglas fir – most desired, highest value species Sustainable harvest volumes 93%+ Sawlogs, remaining stable 2.1 million
Slide 32: Timberlands Inventory: US South
Timberlands Inventory Demonstrates Species Preference and Age Class Distribution SOUTHERN YELLOW PINE HARDWOOD US South 24% 76% Age Class Distributions Southern yellow pine – most desired/highest- valued species 60%+ Sawlogs, increasing to 65% over the next five years 4.1 million acres and 140 milli
Slide 33: Timberlands Inventory: Uruguay
Timberlands Inventory Demonstrates Species Preference and Age Class Distribution CONIFER EUCALYPTUS Uruguay 36% 64% Age Class Distributions 30% Peeler Grade logs, increasing to 45%+ over the next 10 years 341 thousand acres and 6 million cubic meters
Slide 34: US Trend Log Demand Exceeds Domestic Supply
US Trend Log Demand Exceeds Domestic Supply US lumber demand will recover from cyclical low Canadian lumber imports will not return to prior peaks Expect log values will improve *
Slide 35: BC Supplies Constrained Going Forward
BC Supplies Constrained Going Forward Opportunity for US suppliers as Canadian production falls off Annual allowable cut (AAC) reductions in British Columbia (BC) due to impact of pine beetle Source: BCMOF Pre Uplift AAC 2005-06 Peak 2021+ Harvested Beetle Kill AAC Inventory Adjustment Estimated Imp
Slide 36: US Log Prices Have Bottomed, Now Rebounding
US Log Prices Have Bottomed, Now Rebounding Q1 2010 Western prices up over 25% from Q2 2009 Expect continued improvement with gradual recovery in housing and wood product demand Earnings improve as deferred volume is harvested Sawlog Prices Douglas Fir #2 and Southern Yellow Pine DF #2 Sawlog Price
Slide 37: International Markets Add to Competitive Advantage
International Markets Add to Weyerhaeuser’s Competitive Advantage Japan is a premium market for logs China and Korea have increased imports of US timber through the downturn
Slide 38: Harvest Volume Outlook is Positive
Harvest Volume Outlook is Positive Harvest expected to increase 71% (2009 – 2019) US will rise 60%; international to increase 4-fold Cash flow driven by increased harvest and price recovery Weyerhaeuser Global Fee Harvest Volume International North America Fee Acres Owned
Slide 39: Timberland Values Have Held Up
Timberland Values Have Held Up Land prices did not follow log prices through cycle Risk profile and option value being bid into land prices $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 NCREIF Average Timberland Values Pacific Northwest South
Slide 40: Scale and Logistics Provide Cost Advantages
Scale and Logistics Provide Cost Advantages Best practices and know- how shared across company Logistical coordination eliminates bottlenecks and increases capacity Hauling / dispatch trucking Harvesting Silviculture
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Slide 42: US Oil, Natural Gas, Aggregates and Minerals Have Growth Potential
US Oil, Natural Gas, Aggregates and Minerals Have Growth Potential 7.1 million net mineral acres Oil and gas Haynesville Shale (LA) Revenue interest in >1000 producing wells Developing equity participation program in selected wells Aggregates and minerals $10+ million annual business with growth pot
Slide 43: Exploring Timberlands Growth Opportunities
Exploring Timberlands Growth Opportunities Rising global demand for wood fiber and environmental solutions will drive timberland values Selective acquisition opportunities United States South America, China and other emerging geographies
Slide 44: Well-positioned to Capitalize on Attractive Outlook
Well-positioned to Capitalize on Attractive Outlook Increasing harvest levels will generate higher cash flows Positioned to bring deferred harvest to market as market conditions improve Ongoing precision forestry will continue to generate higher value sawtimber Optimizing log export market opportuni
Slide 45: Miles Drake
Miles Drake Chief Technology Officer
Slide 46: Applied Technologies Capture Highest Value
Applied Technologies Capture Highest Value Benefits to core strategy Increased high quality sawtimber yield in North America Reduced costs of forest interventions Shorter rotation time Optimized harvest planning Enhance license to operate – sustainability Underpins new opportunities Biomass Environm
Slide 47: Applied Technologies are Embedded in the Timberlands Business Model
Applied Technologies are Embedded in the Timberlands Business Model Timberlands: Maximize Cash Flow and Asset Value Applied Technology Land Portfolio Forest Management Market Focus Scale Operations
Slide 48: Site Preparation
Site Preparation
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Slide 54: Putting the Right Seedling in the Right Place for the Right Product
Putting the Right Seedling in the Right Place for the Right Product Scale nurseries produce genetically improved trees For sawtimber, traits focused on Volume growth Strength Straightness Disease resistance
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Slide 56: Taking Seedling Improvement to the Next Level
Taking Seedling Improvement to the Next Level Patented manufactured seed technology to deploy desirable traits at scale and reduce cycle time for tree improvement
Slide 57: Vision Forestry Lowers Costs and Generates Greater Returns
Vision Forestry Lowers Costs and Generates Greater Returns Innovative site design for maximum survival and growth of seedlings Treatments focused only on acres to be planted Allows efficient movement of people and equipment
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Slide 60: Precision Fertilization Accelerates Growth and Reduces Cost
Precision Fertilization Accelerates Growth and Reduces Cost Fertilizer is applied at differing rates to stands at different stages of tree growth Precision application done at lower cost Proprietary Weyerhaeuser fertilizer Reduces / controls volatility Balanced nutrients Nutrients available in singl
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Slide 63: Deploying Next Generation Technology to Optimize Harvest Timing
Deploying Next Generation Technology to Optimize Harvest Timing Sensing technologies and growth and yield models ensure harvest at financial optimum Growth and yield planning Remote sensing Environmental management
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Slide 67: Sustainability and Environmental Capabilities Increase Ownership Value
Sustainability and Environmental Capabilities Increase Ownership Value Environmental competencies Enable higher yields throughout a rotation Meet ecological and sustainability requirements Ensure license-to-operate and regulatory compliance
Slide 68: “TOLT IVER WATERSHED
“TOLT IVER WATERSHED USDA ggg (United States Department of Agriculture A
Slide 69: Applied Technologies Increase Cash Generation and Create Value
Applied Technologies Increase Cash Generation and Create Value Improved value at harvest Example: Enhanced sawtimber yield in the South generates enhancement of $75 per acre at harvest today over industry average Increased cash generation through operational efficiencies Example: Fertilization savin
Slide 70: Positioning for Emerging Business Opportunities
Positioning for Emerging Business Opportunities Global requirements for sustainable products, green energy and more productive resource systems are leading to new business opportunities Biomass Environmental offsets Land management Exploring new technologies, partnerships and on-the-ground pilots
Slide 71: Biomass Markets are Developing Rapidly
Biomass Markets are Developing Rapidly • Mill residuals • Forest residuals • Energy crops • Mills • Logistics • Procurement systems • Power production • Utility co-fire • Biomass boilers • Industrial • Transportation fuels • Chemicals and materials Sustainable Feedstocks Conversion & Supply Chain En
Slide 72: Weyerhaeuser US Biomass Feedstock Volume
Weyerhaeuser US Biomass Feedstock Volume Harvest residuals represent most of available biomass supply Weyerhaeuser Biomass Total Available Other Harvest Residuals
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Slide 75: Logistics and Supply Chain Management a Competitive Requirement
Logistics and Supply Chain Management a Competitive Requirement Felling of Logs and Understory Material Skidding Chipping Loading Transport
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Slide 79: Technology Joint Venture with Chevron to Develop Transportation Fuels from Forests
Technology Joint Venture with Chevron to Develop Transportation Fuels from Forests Sustainable feedstocks at scale Conversion technology High quality fuels to customers
Slide 80: Potential to Leverage our Expertise
Potential to Leverage our Expertise Exploring global opportunities to provide solutions to others Forest management Afforestation Watershed and habitat improvement / management Carbon sequestration Erosion mitigation
Slide 81: Benefits of Applied Technologies
Benefits of Applied Technologies Maximizing value per acre Forest systems with high sawtimber values in the US Adapting forest regimes to increase total sustainable biomass harvest while preserving timber values Pursuing global opportunities to bring our expertise to others
Slide 82: Patty Bedient
Patty Bedient Executive Vice President and Chief Financial Officer
Slide 83: REIT Conversion Likely in 2010
REIT Conversion Likely in 2010 REIT structure best supports strategic direction Benefit to the Company Qualified earnings distributed to shareholders not taxed at corporate level Benefit to shareholders Most dividends to shareholders taxed at capital gains rate No changes needed in legal structure o
Slide 84: Earnings and Profits (E&P)
Earnings and Profits (E&P) Current estimate of E&P dividend: $5.5 to $5.7 billion Cash portion of E&P dividend will be capped at 10% of total Need to distribute by the end of the year of REIT conversion Process governed by SEC and IRS rules and regulations
Slide 85: Process for E&P Distribution
Process for E&P Distribution Action Approximate Days Declare dividend Ex-dividend date Dividend record date; File prospectus with SEC Notify holders regarding election of stock or cash dividend Election forms due Stock valuation dates 41-43 Dividend payment date 47-50
Slide 86: Hypothetical Share Impact: E&P Distribution
Hypothetical Share Impact: E&P Distribution (For illustrative purposes only) Total Earnings and Profits Distribution $ 5.7 billion Current Shares Outstanding 211.40 million E&P Dividend per Share $26.96 per share Share Calculation Total E&P $ 5.7 billion Cash Portion of E&P (10%) $ .57 billion Stock
Slide 87: Hypothetical Market Capitalization Impact: E&P Distribution
Hypothetical Market Capitalization Impact: E&P Distribution (For illustrative purposes only) Assumptions: $5.7 billion E&P $45 stock price at ex-dividend date 211.40 million shares outstanding Value Share Count Per Share Pre-Distribution Market Capitalization $9,513 211.4 $45.00 Total E&P Distributi
Slide 88: Accounting Impact of E&P Distribution
Accounting Impact of E&P Distribution (Assuming $5.7 billion E&P, and 90% stock and 10% cash distribution) Pro-forma changes to balance sheet Cash reduced by $570 million Deferred tax liability reduced by approximately $1.0 billion Shareholders’ equity increased by $430 million Pro-forma changes to
Slide 89: Ongoing REIT Requirements
Ongoing REIT Requirements REITs are generally required to distribute 90% of tax basis income as a dividend, with certain exceptions for capital gain income Asset Test (Quarterly) 75% of fair market value of REIT assets must be qualified assets – primarily timberlands and cash Net investment in Taxab
Slide 90: Substantial Near-Term Liquidity
Substantial Near-Term Liquidity Cash Balance (3/31/2010): $2.1 billion Bank Revolving Credit Facility: $1.0 billion (Expires 12/2011) Total Debt (3/31/2010): $5.7 billion Current Credit Ratings: 2017-2033 $43 $30 $1,263 $433 $15 $3,891 Debt Maturity Schedule ($ millions) S&P: BBB- (negative) DBRS: B
Slide 91: Key Dividend Considerations
Key Dividend Considerations Macroeconomic climate Earning potential of the company Target capital structure Appropriate debt levels Long term liquidity Maintaining access to capital Affordability Future growth opportunities
Slide 92: Updated Second Quarter 2010 Outlook
Updated Second Quarter 2010 Outlook Segment Q2 Outlook Compared to Q1 Earnings Timberlands Log prices expected to increase, partially offset by a lower grade mix and higher silviculture and road costs Excluding the disposition of non-strategic timberlands, Q2 operating earnings are expected to be co
Slide 93: Dan Fulton
Dan Fulton President and Chief Executive Officer
Slide 94: Recognized Leader in Sustainability
Recognized Leader in Sustainability
Slide 95: Reasons to Own Weyerhaeuser
Reasons to Own Weyerhaeuser Most attractive timberland in the world Leader in adding and extracting value from timberlands Uniquely positioned to benefit from the recovery Focused on returning value to shareholders
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