weyerhaeuser 2006 Company Overview

For more information, please visit www.weyerhaeuser.com.

ACTIONS SPEAKLOUDERWEYERhAEUSER ON SUSTAINABILITY 2006 compAny overvieW

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AND WE DELIVER

At WeyerhAeuser, sustAinAbility is more thAn just A Word. it’s smArt business.

For more thAn A century, We’ve been inspired by trees. their strength, vitAlity And unlimited potentiAl continue to guide us As We creAte imAginAtive, sustAinAble solutions to the World’s chAllenges.

WE FOCUS ON DOING IT SAFELY, PROFITABLY AND RESPONSIBLY.

JIm OVERTON, inventory Forester, looKs through A lAser rAnge Finder At our tree FArm in springField, ore. photo by dave putnam

WEYERhAEUSER COmPANY 2006 compAny overvieW

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5,836families in new homes

in 2006

300

SOLUTIONS. We’re always innovating for our customers. every product we make begins with trees — our history is rooted in them and our future depends on them.

CREATE

paper bags filled with groceries

in 2006

mILLION

BILLION

$21.9 in 2006 net revenue

from products and services


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contrAct employees hEATh SLIPPER And DON PENNELCA hAul lumber At A QuAdrAnt homes construction site in dupont, WAsh. photo by dave putnam


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PEOPLE. We can’t do it alone. each relationship we build — with a partner, an employee or a community — is an investment in our long-term success.

CONNECT

fewer people injured in 2006

338

relationships with diverse organizations in 2006

40

185,699 volunteer hours in 2006

VIET VUONG, project coordinAtor, tests WAter QuAlity outside our port WentWorth, gA., cellulose Fibers mill. photo by dave putnam


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22 %drop in fertilizer use since 2004 due to more efficient processes

in our U.S. timberlands

ChANGE

40%reduction in greenhouse gases

from 2000 levels by 2020

TEChNOLOGY. We make change happen. using science and technology, we get even more out of our resources, reduce our environmental impact, and operate more efficiently.

97%

of each log used in North America

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PRODUCT CERTIFICATION by the end of 2007, all our north American-made forest products will be certified to sustainable forestry standards.

CREATE WhAT CUSTOmERS DEmAND

it all comes back to the trees. We grow them, study them and conserve them, but above all, we use them. Whether we’re building a stronger family home with engi-neered lumber, increasing the absorbency of cellulose fibers, or making more durable containerboard, our people are constantly taking action to tap the full potential of this remarkable, renewable resource.

mAKING A SOFTER, STRONGER WIPEthe wipes you use to clean fingers and soak up spills will soon be stronger, softer and biodegradable — thanks to a new nonwoven material called meltblown lyocell invented by Weyerhaeuser.

most disposable wipes on the market today are made from petroleum and don’t easily break down in landfills. this new ma-terial will allow consumers to choose one made from a renewable resource — our exceptionally pure peach™ pulp. since it’s made from cellulose, meltblown lyocell is also more supple, breathable and durable, like cotton. it’s especially strong when wet and is more absorbent than polypropylene. it has plenty of other possible uses, too, such as hospital gowns, drapes and pillow cases — even regular clothing.

other cellulose-based, nonwoven materials exist, but manufacturing them is complex. rather than cutting fibers and bonding them together, meltblown lyocell fibers are continuous and self-bond-ing, adding to their strength and softness. the material is made in an efficient process that eliminates several steps.

meltblown isn’t yet commercialized, but we’re working to bring this patented new technology to market. After years of research, Weyerhaeuser, reicofil (a leading maker of production machinery for nonwoven products) and the Fraunhofer institute for Applied polymer research have launched a pilot line in germany. For more information, visit www.meltblownlyocell.com.

YEW TREES hELP DEFEAT CANCERin a very special area of our turner, ore., nursery grows a group of trees distinguished not only by their appearance but also by the critical role they play for those suffering from cancer. only three feet tall when harvested, this specially selected variety of yew tree delivers a big yield — taxane, which is used to create the life-saving chemotherapy drug taxol.

Few other companies currently raise yew trees expressly for pharmaceutical purposes,

WE PUT INNOVATION AT ThE SERVICE OF OUR CUSTOmERS. by Focusing on the sAFe, proFitAble delivery oF distinctive products to mArKet, We mAKe the most oF our resources.


EVAET SChREIER, scientist, WeyerhAeuser technology center, FederAl WAy, WAsh. photo by dave putnam

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FOR READERS our joint-venture newsprint mill is breaking into the book publishing market with its norbrite® book paper. photo by dave putnam.

but we’ve been evolving this innovative process for nearly 20 years. today, depending on demand, we produce up to 450 dry metric tons of yew biomass annually. last season, we planted more than 2 million yew trees. more importantly, since our first cultivation in 1993, more than 2 million doses of taxol have been produced. An increasing trend toward synthetic production of cancer-fighting compounds creates uncertainty for this profitable business, but we will continue to explore possibilities for other bio-related uses for our forests and nurseries.

WAX-FREE BOX KEEPS ChICKEN COOLimagine a tasty chicken roasting on a spit at your local grocery store. before that chicken gets hot, it gets shipped in wet bags on ice. that moisture puts stress on corrugated shipping containers.

to stand up to the strain, these boxes are typically impregnated and coated with wax. but that makes them difficult and costly to recycle.

more people are demanding that grocery stores recycle all their waste, so Kroger, one of America’s largest grocery chains, took the issue to tyson Foods, its chicken supplier. As our largest box customer, tyson promptly brought it to us.

Fortunately, we were ready. “We fine-tuned a process we were already working on to make a recyclable treated paper that’s competitive with wax,” says terry grant, our senior scientist for composite materials.

enter climaguard™, our water-resistant corrugated medium and liner. it’s just one of several recyclable products offered in our full clima series™ line. now our customers have a competitive edge

RECYCLABLE WAX-FREE BOX. evaet schreier, scientist, tests the strength of a water-resistant box made with climaguard™

containerboard. it’s one of the first boxes on the market to meet recycling protocols for wax alternatives.

to attract more grocery chains that want to reduce landfill costs and environmental impact. the boxes are more stable on pal-lets, making shipping easier. And the waste generated in the plants that make this product can be used as recycled content for our containerboard mills.

ADAPTING TO mARKET TRENDS With newspaper readership on the decline, our norpAc newsprint facility is turning challenge into opportunity by taking norbrite® paper to the book publishing market.

this high-bright uncoated mechanical paper has plenty of selling points. First, it’s made with a thermo-mechanical pulping process, which uses about half the wood chips required for the same quantity of offset paper made using the traditional kraft process. second, it requires fewer chemicals since it uses heat and mechani-cal grinding instead of oxygenated chlorine to break down the chips. third, the process creates shorter fibers that lock together easily, creating a more solid mesh for higher opacity, a bulkier sheet and better printability. And finally, norpAc’s paper products are certified as meeting the sustainable Forestry initiative® standard.

norbrite paper can already be found in many of today’s popular novels, such as The Notebook by nicholas sparks and Sam’s Letters to Jennifer by james patterson. more than 78 million people also thumb through it as they read Parade magazine, distributed with 370 u.s. sunday newspapers. norpAc is a joint venture between Weyerhaeuser and nippon paper industries, based in longview, Wash.

PARDEE CUSTOmERS ARE LIVING SmARTmore and more people want to make an environmentally sound choice when they purchase a home for their family. As a result, a growing number of master developers are requiring green-building approaches from builders. pardee homes — a subsidiary of Weyerhaeuser real estate company — is meeting this growing market need with livingsmart®.

thirty-six percent of new pardee homes include livingsmart options that improve air and water quality, energy use and resource consumption. plus, any home built with wood is a smart environmental choice because it takes 16 percent less energy to manufacture a home framed with wood than with concrete or steel. And unlike other building materials, wood products store carbon.

livingsmart customers say they can’t ignore the numbers. “in my previous home, the bills were so high,” says pardee customer judi French of california. With three kids, French appreciates the energy savings from features like her tankless water heater, solar panels and energy star appliances. “i’m very conscious of our environmental impact,” she says.

the enthusiastic market reaction to livingsmart is matched by business benefits. “it differentiates us in a crowded marketplace,” says joyce mason, pardee’s vice president of marketing. “And it lets home buyers save money by being

‘green.’” For more information, visit www.pardeehomes.com.


CALEB DOTY, sAles And mArKeting mAnAger For building components oF idAho in boise, revieWs plAns At his customer’s construction site. photo by dave putnam

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50%mORE EFFICIENCY AT ThE JOB SITE

UNIQUE iLEVEL SOLUTION REDUCES WASTE. For a faster, more precise way to build homes, dealers are calling on ilevel’s nextphasetm site solutions. that’s because this new package of soft-

ware, products, equipment and services lets them deliver customized home plans and premanufactured panel sections directly to builders. the result? dramatically reduced job-site waste and less labor required to get the job done means a 50 percent boost in construction-site efficiency for builders looking for integrated solutions. For building components of idaho, a total framing services provider, nextphase site solutions hit the mark. “now we can control how materials are used ahead of time, versus on the job site,” says caleb doty, sales and marketing manager. ”When we need to get the job done on deadline and in tight quarters, nextphase makes the work safer and more efficient.” For more information, visit www.ilevel.com.


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EARTh FRUIT rarely more than an inch high, the earth fruit still stands on louisiana land that had been slated for an oil well. photo courtesy of casey galvin.

partnership can take many forms: working with other organizations and companies to preserve our natural world; listening to the communities where we live and work to find answers for pressing needs; and joining together as employees to improve the work environment that we all share. in every case, the whole is far greater than the sum of its parts, and the effects of our combined strength can be extraordinary.

PARTNERING TO PROTECT EARTh FRUIT even the tiniest plants get noticed by Weyerhaeuser scientists — especially when they’re threatened. With buds as small as pencil tips, earth fruit (also known as Geocarpon minimum) grows on the edge of bare soil patches called “slicks” and blooms for only a few weeks each year.

the rare, federally protected plant lives on land we own in northern louisiana. so when Quiet sun investments proposed drill-ing an oil well there, we took action. After meeting with our foresters, the louisiana natural heritage program and the u.s. Fish and Wildlife service, Quiet sun, which leases the right to drill on our land, agreed to move the well site.

“We had no earthly idea,” says don valentine from Quiet sun. “We had already staked the well and that’s where we wanted it. but we moved it and did oK. i respect Weyerhaeuser for taking these steps. the earth fruit may have a use in the future that we don’t know about today.”

Weyerhaeuser routinely reviews pro-posed oil, gas and mining activity on our timberlands for potential concerns. it’s part of our voluntary commitment to the sustainable Forestry initiative®, which requires that we identify and protect rare plants and threatened wildlife in our forests. We’ve also partnered with other groups to protect earth fruit, including a local hunting club and the missouri botanical garden.

RECRUITING EFFORTS PAY OFF to bring in diverse talent, Winchester homes, a subsidiary of Weyerhaeuser real estate company, scours construction pro-grams at select schools for recruits. that’s how we discovered jeremy george, now a project manager, who was a student at the university of maryland eastern shore three years ago.

CONNECT WITh WhAT mATTERS

WE BUILD RELATIONShIPS. by engAging employees, WorKing With communities, And listening to All our stAKeholders, We get results.

CONTAINERBOARD hUT A father and son, left homeless by an earthquake, stand outside a global village shelter, made and donated by Weyerhaeuser for disaster relief. photo courtesy of phil suarez, nyc medics.

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IVY PITTmAN, plAner operAtor, mccomb, miss. photo by dave putnam


“coming out of school, i was thrilled when they made me an offer,” says george.

“it’s a great place to work. you can always speak your mind and gain knowledge from more experienced people.” if george hadn’t been approached by Winchester, he says he would have been working for a smaller homebuilder. “i think i made the wise choice,” he says. “i really like the environ-ment and enjoy seeing a beautiful home develop.” Five others like george get recruited into Winchester each year to experience the company’s internship program either as new graduates or as students. About 75 percent of the interns who participate in this three-year-old program are women or minorities.

TRIPLE-WALL hUTS KEEP FAmILIES WARmWhen a devastating earthquake hit a remote region of Kashmir in late 2005, the people who live there were suddenly facing winter without shelter. in most cases, tents are the easiest and cheapest solution for temporary refuge. but in a mountainous region where temperatures often sink to well below freezing, tents just wouldn’t suffice.

luckily, Weyerhaeuser — in partnership with global village shelter llc in morris, conn. — makes a 67-square-foot tri-Wall® structure that, while not luxurious, can keep a family alive. the triple-wall corrugated containerboard structures are treated for water- and fire-resistance and, most importantly, can be warmed by fire or small stoves. We donated 500 global village shelters to the tremor-traumatized region. An all-volunteer group of new york city emergency medical workers traveled there to help set them up.

the huts have been used during other natural disasters, too — in the aftermath of hurricanes in grenada in 2005, and

during the rebuild effort following hurricane Katrina. For more information, visit www.gvshelters.com.

PITChING IN TO REBUILD LIVES When hurricane Katrina struck at the heart of our southern operations, ivy pittman, who works at our mccomb, miss., lumber mill, felt the blow. the storm uprooted a large red oak and magnolia tree, damaging his home beyond repair. no one was hurt, but the impact separated walls, shifted the foundation, and destroyed everything from furniture to family photos. After considering their options, ivy and his wife, betty, were thrilled to learn about Weyerhaeuser’s loaned-employee program, which sent volunteers from around the continent to help rebuild the homes of fellow employees, retirees and people in the community. We covered the volunteers’ salaries plus the cost of travel and living expenses. our response to the disaster garnered a 2006 u.s. presidential award for corporate leadership. our company and Foundation invested more than $2.8 million in relief efforts that, in addition to the loaned-employee program, included a full-time disaster relief coordinator, an adopt-a- family program, and a gold-standard guide to helping employees in a natural disaster that has been shared with relief organiza-tions and other companies. by the end of 2006, 300 Weyerhaeuser people from across north America rebuilt more than 50 damaged or destroyed homes. in all, 128 employee and retiree families are being assisted. to download the disaster relief guide, visit www.weyerhaeuser.com/katrina.

mANY WORK TO LIGhTEN LOAD FOR mISSISSIPPI FAmILY. ivy pittman and his family were one of 128 families assisted

by Weyerhaeuser after hurricane Katrina destroyed their home. “it’s unexplainable,” says pittman, who works at the local lumber mill. “After working for Weyerhaeuser for 20 years, for them to show such love for people in need is marvelous. the volunteers worked tirelessly from daylight to dark…people we didn’t even know. this is the greatest christmas present i could ever get.” the pittman family moved into their new home in mid-december 2006.

ZACKARY LAWSON, sAW Filer iii At our neW bern, n.c., lumber mill, WeArs proper protective geAr While eXAmining A sAW blAde. photo by dave putnam

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SAFETY FOCUS ELImINATES INJURY, BOOSTS PRODUCTIVITY. people with positive attitudes who take the time to work safely: that describes our lumber mill in new bern, n.c., today. but it wasn’t

always so. After losing a co-worker to fatal injury and faced with a climbing recordable incident rate, employees at the mill stopped trying to do too much too fast, and took ownership of the safety efforts on site. “people really care about each other here now — from top to bottom,” says Floyd cox, new bern safety committee chair. in 2006, the mill operated without a single recordable injury. And productivity has also improved, with a high-grade yield that’s up 42 percent over the previous year.

RECORDABLE INJURIES AT NEW BERN IN 2006

ZERO

WATER QUALITY

ECOSYSTEmS AND BIODIVERSITY

INVESTING IN RESEARCh in 2006, we invested more than $19 million in research to better understand our forests.

FOREST hEALTh AND PRODUCTIVITY

FISh AND WILDLIFE

OThER

$ 15.1mILLION

$ 1.4mILLION

$ 1.2mILLION

$ 977ThOUSAND

$ 489ThOUSAND


20/21

you can’t stay viable as a business for more than a century without adapting. but change isn’t only about reacting to the world around you. For us, it also requires actively searching for innovative ways to reduce our impact, streamline our processes and improve how we manage our forests.

REDUCED ImPACT ALSO LOWERS COST it’s no secret that winter is long and cold in northern canada. but while some may be inclined to hibernate, employees at our cellulose fibers mill in grande prairie, Alberta, stay busy year-round finding ways to minimize our impact on the environment. to begin with, the mill’s water consump-tion is down 25 percent since 2002. by improving our ability to recycle the water we use, we’re reducing our intake from the nearby river and minimizing waste. our wastewater treatment costs are down 20 percent since 2002 as well. the mill has also begun purchasing hydrogen from the sodium chlorate plant next door. emissions that used to be released directly into the atmosphere by that facility are now feeding our lime kiln, dropping natural gas usage by 30 percent.

the arrangement saves money and reduces our reliance on fossil fuel. For several years, the mill has been diverting steam created in the pulp manufacturing process to an on-site 80-megawatt co-generation power plant, owned by transcanada energy. We provide the resources, land and operators to run the plant, and in return, our mill receives less expensive power. the arrangement reduces reliance on fossil fuels and, since bark, waste wood and sawdust are burned to produce the steam, less goes to landfill. Finally, the mill’s new recovery boiler — slated for startup in late summer of 2007 — will, among other improvements, elimi-nate emissions from the dissolving tank by redirecting them back to the boiler. the new design is projected to reduce the site’s current annual carbon dioxide emissions by 25 percent and sulfur dioxide emissions by 80 percent.

WE’RE SERIOUS ABOUT RESEARChscientific research takes effort and money. Without financial support, many studies would never get off the ground. We know research is critical to understanding our

ChANGE ThE RIGhT ThINGS

WE USE SCIENCE AND TEChNOLOGY TO KEEP OUR ENVIRONmENT hEALThY. by continuAlly improving our operAting prActices, We’ll stAy in business For yeArs to come.


LUCY WALKER, nursery mAnAger, WAshington, n.c. photo by dave putnam

BAT RESEARCh bats are an indicator of forest health, so we work with scientists and universities to understand how our forest practices affect them. photo courtesy of bret estep, georgia power.

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forests. that’s why in 2006 Weyerhaeuser spent more than $19 million on forestry research. in addition to funding our own research and development, we direct money to universities, research institutions and other organizations that study forest health and productivity, water quality, fish and wildlife, ecosystems and biodiversity.

in Arkansas, for example, we’re funding a multi-year study by the nature conservancy to assess the biodiversity of a pine plan-tation and how our forestry practices affect that biodiversity.

“We’ll first do a baseline count of the number and variety of bird and plant species found in managed forests at different stages of maturity,” says joe Fox, project leader for tnc. “then we’ll compare the baseline to the count after Weyerhaeuser plants, fertilizes, applies herbicides, thins and prunes. We’ll also study the effect of

conservation forestry practices, such as prescribed burning.”in canada, Weyerhaeuser has teamed up with ducks unlimited

to jointly fund and conduct research on a migratory bird habitat on 12 million acres of Weyerhaeuser-managed land in Alberta. Alberta is also the focus of a multiyear study of woodland caribou. For more information, visit www.nature.org and www.ducks.ca.

BIG ROOTS GROW STRONGER TREESevery year, more than 100 million Weyerhaeuser seedlings begin a struggle for survival. drought might parch them; deer may eat them; a frost may chill them to death. even small improvements in a seedling’s ability to survive its crucial first year can yield big increases to our bottom line. so it’s no surprise that we use science to develop hardier seedlings.

higher survival rates mean fewer seed-lings need to be planted, saving money. A healthy start boosts land productivity by allowing harvest to occur sooner, which gives us a quicker return on our invest-ment. And, of course, a forest that comes back more quickly is good for wildlife, water quality and natural beauty. to this end, we have improved our approach to root pruning in our southern timberlands operations. “From the time trees are planted — usually in the cold winter months — until the spring, they depend on the roots they grew in the nursery,” says bruce Francis, southeast regeneration team leader.

“We’ve patented a system for spacing seed-lings and pruning their roots to stimulate greater-than-normal growth while they’re still in the nursery. the bigger the root, the better a transplanted seedling can absorb water as it awaits the arrival of warmer weather.” it’s an effort that’s paying off with a 10 percent boost in seedling survival.

BATS OFFER INSIGhT TO FOREST hEALTh most people don’t relish the prospect of encountering a bat in person, but this noto- rious reputation is undeserved. bats play an important role in the balance of nature by helping control insects. one bat can catch as many as 1,200 insects in an hour. they are also an indicator of forest health, but of the 45 kinds of bats found in the united states, seven are listed as threat-ened or endangered. that’s why we work with scientists and universities to learn more about how our forest practices affect bats that make their home on our land. in mississippi, for example, dr. darren miller, our southern wildlife program man-ager, leads a team that operates when these furry, flying mammals do — about

“o-dark-thirty.” “We capture bats, tag them with tempo-

rary transmitters, and observe them so we can better understand how they use our managed forests,” says miller, who last

year received a service award from the southeastern bat diversity network and a Wildlife stewardship Award from the American Forest & paper Association.

so far, our studies indicate that Weyerhaeuser’s forests provide habitat for many bat species. ongoing research will help determine whether we need to make special considerations for them, such as leaving large, dead trees after harvest for roost sites. by making an effort to better understand this important creature, we’ll do a better job managing our forests to provide wildlife habitat while sustainably growing and harvesting trees. For more information, visit www.sbdn.org.

LYPTUS hARDWOOD A PERFECT FIT When b’nai shalom in West orange, n.j., recently renovated their synagogue, they wanted to take a “responsible, respect-able approach to architectural design” and decided that selecting lyptus® hardwood would be “a perfect fit.”

that could well be because lyptus hard-wood, besides being beautiful, comes from eucalyptus trees that are grown, harvested and manufactured with the environment in mind.

made in brazil by a joint-venture opera-tion between Weyerhaeuser and Aracruz cellulose s.A., lyptus products come from plantation-grown trees. more than 20 percent of each plantation is kept in native vegetation to help maintain the natural ecosystem. After first harvest, many of the second-generation trees are grown from the stump of the original tree, minimizing land disturbance. And species that were originally native to the area a century ago have been reintroduced.

the plantations are predominantly owned by Aracruz and are certified to brazil’s internationally recognized sus-tainable forestry standard, cerFlor. moreover, the joint-venture mill uses wood residuals as bio-energy for fuel.

A BIGGER ROOT. new pruning technique stimulates seedling root growth and boosts their survival rate by 10 percent.

ELLIE BLY, process engineer At our contAinerboArd mill in cAmpti, lA., eXAmines A volAtile orgAnic compound sniFFer. photo by dave putnam


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NEW BOILER WILL CUT EmISSIONS AND COST. last year, we committed to cut our companywide greenhouse gas emissions 40 percent from 2000 levels by 2020, the most aggressive target

set in our industry. A number of capital projects will support that goal, as in campti, la., where two aging recovery boilers and an old turbine at our containerboard mill are being replaced. the move is expected to reduce the mill’s emissions by 53 percent by 2009, which is equivalent to removing 15,372 cars from the road. it will also boost production capacity and cut utility costs. “We designed the new components to squeeze every last drop of energy out of our free black liquor and inexpensive waste-wood fuel,” says danny Wisher, plant engineer. “the project should pay for itself quickly. by investing capital on the front end, we’ll reap the benefits for years to come.” to learn more about our greenhouse gas commitment, visit www.weyerhaeuser.com/environment.

53%PROJECTED DROP IN GREENhOUSE GAS EmISSIONS AT CAmPTI


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DEAR FELLOW STAKE- hOLDER

in the preceding pages, you’ve seen some of the real action we’re taking all over the company to get the most out of every tree we harvest. but there is still work for us to do, and even with all our strengths, chal-lenges remain. As we face them, it’s the power of our sustainable business model that will help us succeed. it’s a model where all our goals are interlocked, and where reaching each goal depends on the success of the others. SUSTAINABILITY TO DATEevery year, we deliver innovative products to customers who need them. to achieve this goal, we work within a sustainability framework that drives us to perform in critical areas of our business.

everything we do begins with our ability to run profitable operations. each of our businesses must earn the cost of capital, have sufficient scale, and be able to grow over the long term. to maximize shareholder return, we continually adjust our portfolio to remove nonstrategic and underperforming operations, and respond to changing markets with focused business strategies.

IT’S ONE ThING TO TALK ABOUT hOW SUSTAINABILITY ShOULD WORK. it’s Another to hAve the discipline, Focus And inventive spirit to put it into Action. thAt’s WeyerhAeuser.

the heart of all our operations has always been the forest. We manage our timberland at sustainable rates of har-vest, regeneration and growth so that our primary resource is renewed for the future. one hundred percent of our forests in the united states and canada are indepen-dently certified to the standards of the sustainable Forestry initiative® or canadian standards Association.

We have environmental management systems in place at all of our manufacturing and timberland operations. they drive us to take a disciplined approach to monitoring and improving our environmental perfor-mance. And we continue to minimize our environmental impact. this includes reducing or eliminating chemicals used in our manufacturing processes, upgrading recovery boilers in our pulp facilities, and using biomass as fuel to help reduce reliance on nonrenewable forms of energy. in fact, our expertise in using renewable fuel puts us in a unique position to shape the future of sustainable energy.

our focus on environmental performance isn’t limited to our operations. customers

2006 GOALS 2006 RESULTSless than 1.0 recordable incident rate 1.67 recordable incident rate

17% return on net assets 7.0% return on net assets*

improve representation of women and minorities in management positions 5.7% improvement

improve representation of women and minorities in professional and sales positions 4.2% improvement

40% reduction in ghg emissions from 2000 levels by 2020 13% less than in 2000 (2005 data**)

maintain 100% certification of north American forestlands 100% certified since march 2005

100% operations are iso 14001 certification-ready 100% ready

customers. but, just as the demands of a sustainable world grow, so will our set of goals.

in August 2006, we conducted a sustainability gap analysis for our business. in comparing our performance with other companies, we identified five areas that we intend to improve. • First, we will integrate our financial, environmental and social

reporting in a way that demonstrates the inter-relationship of our performance in each. this report, which is mailed to our shareholders along with our financial results, is our first step toward doing a better job describing how sustainability drives our results.

• second, we recognize that companies operating in today’s global marketplace should have a human rights policy. in 2007, we will craft a statement that reflects both our record and our commitment to not use forced or compulsory labor, or child labor, in any of our operations.

• third, we will seek broad input from our real estate business customer base to understand how we can further our industry-leading position as an environmentally sensitive production homebuilder.

• Fourth, in support of our membership in the u.s. business roundtable s.e.e. change initiative, we are working on devel-oping a water consumption reduction goal.

• Finally, we’ll work to ensure that 100 percent of our north American-made forest products are certified to sustainable forestry standards by the end of 2007. From our forward-looking forestry practices of a century ago to

the new products and strategies of today, Weyerhaeuser seeks to set the standard for sustainability. And although the bar is set higher each year, we are well equipped to meet the challenge. We look forward to letting you know next year how we’ve reached — and surpassed — that bar for 2007.

steven r. rogel chairman, president and ceo

expect our products to perform too. in this report, you read about wax-free recyclable boxes, energy-efficient homes, biodegradable wipes, publishing paper that gets more out of each wood chip, and a new way to reduce waste during production-home construction. our people use ingenuity to make the most out of every tree we harvest in a way that serves humanity, protects the environment, and does it profitably.

Another type of environment is the one our employees experi-ence every day. our commitment to their health and safety in that environment is absolute. to that end, we are working to create an injury-free workplace. A critical measure we use to monitor our safety performance is the recordable incident rate, or number of injuries per hundred employees per year. i’m pleased to say that in 2006 our rir came in at 1.67, the lowest in our history.

safety is just one aspect of employee satisfaction. our goal is to be an “employer of choice” that offers an inclusive, perfor-mance-driven culture where employees thrive and grow. A critical component of such an environment is diversity. We continue to make progress in leadership role modeling, fostering an inclusive work climate, and implementing mentor strategies. We monitor changes in our work force demographics at all levels to ensure this progress continues.

still another environment where Weyerhaeuser plays a key role is in the communities where we operate. As you saw in our profile on hurricane Katrina, we strongly encourage and support employee volunteerism. our commitment also extends beyond domestic borders, as demonstrated by our donation of 500 global village shelters to the Kashmir-pakistan border region following an earthquake in 2005.

underpinning all we do is a strong corporate governance structure. our tradition of integrity, accountability and transparency can be found in our boardroom, where independent directors occupy every seat except the chairman’s, and in the companywide ethics, policies and programs we’ve had in place for more than 30 years.

SUSTAINABILITY IN ThE FUTUREour efforts will continue in 2007 and beyond, as we once again turn to the expertise we’ve gained over the last hundred years to find new and responsible ways to meet the needs of our

NEW REPORTING STRUCTUREto make our sustainability information more accessible, transparent and timely, we’re changing how we report on our performance. the 2006 company overview you’re reading right now uses data points and case studies to demonstrate how we take an integrated approach to economic, environmental and social performance. this report is mailed to all shareholders with our 2006 Annual report and Form 10-K, which details our financial performance. both are available in pdF and html format at www.weyerhaeuser.com. later in 2007, when we’ve analyzed all our 2006 sustainability data, we’ll publish a detailed sustainability performance and policy report. it will be distributed to key stakeholders along with the 2006 company overview and posted on our Web site. by midyear, we will also launch a new sustainability section on our Web site that features these reports, plus a host of other sustainability information. it will include an index that you can use to compare our performance with the global reporting initiative guidelines, which we have followed since 2002. For more infor-mation about the gri and its indicators, please visit www.globalreporting.org.

WhERE WE GET OUR DATAthe Weyerhaeuser data contained in this report are drawn from established company databases used regularly by our operations. We use quality-assurance procedures to verify the data’s accuracy. in addition, each story in the report is reviewed by an internal subject-matter expert. the report’s final draft is reviewed by members of our company disclosure committee to ensure any material information is accurately communicated. Weyerhaeuser does not currently externally verify the data included in this report, with the exception of the total 2006 net revenue shown on page 3, which is audited and reported in accordance with securities exchange commission rules in our 2006 Form 10-K. We continue to monitor stakeholder interest and trends in external verification of sustainability data.

FORWARD-LOOKING STATEmENTthis report 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. 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 other variations of those terms or comparable terminology or by discussions of goals, strategy, plans or intentions. in particular, some of these forward-looking statements deal with expectations regarding the way we will conduct business; reduction in greenhouse gas emissions by 2020; reduction in greenhouse gas emissions at campti, la., facility by 2009; commer-cialization and performance of meltblown lyocell; startup and performance of new grand prairie recovery boiler; 100% certification of north American-made forest products to sustainable forestry standards by the end of 2007; the impact of forest management programs and sustainable forest management systems; reductions in recordable incident rates; reduction in energy use; use of biomass; reduction in water use; reduction in chemical use; increase in diversity; return on net assets; and similar matters. the accuracy of such statements is subject to a number of risks, uncertainties and assumptions that may cause actual results to differ materi-ally 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; the successful execution of internal performance plans and initiatives; the level of competition from domestic and foreign producers; the effect of forestry, land use, environmental and other governmental policies and regulations, and changes in accounting regulations; the effect of weather; the risk of loss from fires, floods, windstorms, hurricanes 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 currency exchange 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 on imports. these and other factors could cause or contribute to actual results differing materially from such forward-looking statements and, accordingly, no assurances 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 on the company’s results of operations or financial condition. the company expressly declines any obligation to publicly revise any forward-looking statements that have been made to reflect the occurrence of events after the printing date of this publication.

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ChART NOTES * our 2006 return on net assets does not include assets and earnings from our real estate and related Assets segment, or from special purpose entities. it does include a refund of countervailing and anti-dumping duties on canadian softwood lumber sold in the united states, but excludes gains from the sale of our composite panels assets and the goodwill write-down of our Fine paper assets. the 2006 ronA listed on this page is accurate as of press time, but subject to change based on final financial data filed with the securities exchange commission in Weyerhaeuser’s 2006 Form 10-K.

** data for 2006 not fully collected or analyzed at press time. look for a full report on our 2006 sustainability policies and performance to be published online and in print in june 2007.

For more information, please visit www.weyerhaeuser.com.

ACTIONS SPEAKLOUDERWEYERhAEUSER ON SUSTAINABILITY 2006 compAny overvieW

Economy & Finance

weyerhaeuser 2006 Company Overview