new york analyst meeting presentation

Annual Analyst Meeting

Weyerhaeuser CompanyNew York CityMay 20, 2004

1

2

Forward-Looking StatementSome information inc luded in the following pr esentations contains statements concerning the company’s futur e r esults and per formance that ar e for ward-looking statements within the meaning of the Pr ivate Secur ities Litigation Refor m Act of 1995. Some of these forwar d-looking statements can be identified by the use of forwar d-looking ter minology such as “expects,” “may,” “will,” “believes,” “should,” “approximately,” antic ipates,” “estimates,” “plans,” “continuing”and “maintaining” 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 forwar d-looking statements deal with expectations r egarding debt r eduction and debt to capital r atios, cost r eduction, capital spending disc ipline and projected capital spending, non-str ategic asset sales, pr oductivity impr ovements, acquisitions, shar e r epurchases, dividend incr eases, str ength of balance sheet, str ong fr ee cash flow gener ating capability, estimated effects of exchange r ates on manufactur ing costs, estimated effect of exchange r ates on deliver ed softwood pulp costs to Belgium, investment in high r eturn productivity projects, inc luding high-r eturn energy projects, new product development, str ategic gr owth, inc luding inter national expansion improvement in our pulp, paper and containerboard mar kets, incr eased demand and pr ic ing for wood products in 2004, pr ofitability, pr ice incr eases and stable demand for pulp and paper in 2004, gr eater demand for boxes in 2004, incr easing pr ices, shipments and OCC costs in the container boar d mar kets; continuing strong housing demands, the company’s mar kets in 2004 and 2005; and similar 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 projected, inc luding, but not limited to, the effect of gener al economic conditions, inc luding 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 ial pr ices; tr anspor tation disruptions; per for mance of the company’s manufactur ing oper ations; the successful execution of inter nal per formance plans; the level of competition fr om domestic and for eign pr oducer s; the effect of for estr y, land use, envir onmental and other governmental r egulations; fir es, floods and other natur al disaster s; and legal proceedings. The company is also a large expor ted and is affected by changes in economic activity in Europe and Asia, par ticular ly Japan, and by changes in curr ency exchange r ates, par ticular ly in the r elative value of the U.S. Dollar to the Euro and Canadian Dollar , and r estr ic tions on international tr ade or tar iffs imposed on impor ts, inc luding the counter vailing and dumping duties imposed on the company’s softwood lumber shipments from 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, accordingly, no assur ances can be given that any of the events antic ipated by the forwar d looking statements will occur , and if any of them occur s, what effect they will have on the company’s r esults of oper ations, cash flow or financial condition. Additional infor mation on r isks, assumptions and uncer tainties that could cause actual r esults to var y ar e set for th in the company’s filings with the Secur ities and Exchange Commission.The information in this pr esentation concerning the domestic and global economy, U.S. single-family housing star ts, corpor ate cash flow, gr owth in industr ialpr oduction for China, gr owth in the Wor ld Real GDP, Euro Exchange Rate vs. purchasing power par ity estimate, U.S. Real Impor ts vs. Expor ts, U.S. Curr ent Account Balance as a Shar e of GDP, Gr owth in U.S. Manufacturing Industr ial Pr oduction for Nondur ables, demand on Nor th Amer ican Lumber Mills vs. capacity, spruce-pine-fir 2x4 lumber pr ice, production costs for aver age B.C. inter ior mill, N. C. or iented str and boar d 7/16” pr ice, Nor th Amer ica OSB demand vs. capacity, Wester n expor t IS log vs. Douglas Fir #2 domestic log pr ice, nondur able industr ial production and annual growth of U.S. box shipments, U.S. containerboard capacity and oper ating r ate, kr aft linerboard pr ice, U.S. expor ts of OCC, OCC pulp cost vs. chip pulp cost, China impor ts of Bleached Kr aft Pulp, Wor ld Bleached Mar ket Pulp Consumption Growth, Swedish exchange r ate, nor thern softwood pulp pr ice, growth in domestic consumption for UCFS, Germany UCFS for A-4 cut size vs. U.S. 20lb cut-size, UCFS Expor ts vs. Impor ts, U.S. Non-Canadian Tr ade, growth in N.A. UCFS Consumption vs. Capacity, U.S. UCFS Pr ice vs. NBSKP Pr ice deliver ed in U.S., kr aft linerboard pr ices, per sonal tax cuts vs. cash out r efinancing, and our mar ket position in our geogr aphic mar kets and similar matter s, is der ived pr inc ipally from public ly available information, for est products and building industr y publications and websites, data complied by mar ket r esearch fir ms, and similar sources. Although we believe that this information is r eliable, we have not independently ver ified any of this infor mation and we cannot assur e you that it is accur ate.

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AgendaSteve Rogel Introduction —

Positioned to SucceedDick Taggart Financial Philosophy

and StrategyLynn Michaelis Industry OutlookRich Hanson The New Weyerhaeuser —

Operating ExcellenceSteve Rogel The Journey AheadQ&A

Weyerhaeuser —Positioned to Succeed

Steven R. RogelChairman, President & CEO

4

5

Positioned to SucceedAchieved the objectives of our three acquisitions

Better positioned than ever to capitalize on favorable industry conditions

Operations are “hitting on all cylinders”Clear vision of our future with a strategy to achieve that vision

Earnings PotentialProforma Earnings by Business

59

262

765

(377)

655

202

699

259

(176)

(83)

777

392

-400

-200

0

200

400

600

800

WRECO &Related

Timberlands Wood Products Pulp & Paper ContainerboardPkg.

Corporate &Other

$ Millions2000 (normal year)2003 (market trough)

6

Earnings per Share Comparison2003 Q4 vs. 2004 Q1

$0.00

$0.20

$0.40

$0.60

$0.80

2003 Q4 Price/Volume Raw Material Mfg. Costs F/X & Other InterestExpense

2004 Q1

.47 .01(.01)

.24

(.10).01 .62

$ per share before special items*

*A reconciliation before Special Items to GAAP can be found on www.weyerhaeuser.com

Before SpecialItems

Before SpecialItems

7

• 11/99

• 11/99 – 1/00

• 2/02

The New Weyerhaeuser

AcquisitionAcquisition

Value Strategic Rationale

$3.0

$0.9

$8.1

• 1st of 2 steps to enhance engineered wood products offering• Synergies: $150 MM target achieved ahead of schedule

• Growth opportunities — new products and systems• Synergies: $50 MM target achieved ahead of schedule

• Created top player in major product lines; timber base• Economies of scale in manufacturing, purchasing and sales• Synergies: $300 MM target achieved ahead of schedule

$ Billions

8

9

The Journey Ahead

Financial Philosophyand Strategy

Richard J. TaggartExecutive Vice President &Chief Financial Officer

10

11

Financial Philosophy

Committed to the maintenance of a sound capital structure

• Protect the underlying interests of shareholders and lenders

• Have access, at all times, to major financial markets

Target debt-to-total capital (excluding WRECO) of 30–40%

12

Deleveraging Strategy

Drive down cost — improve cash flow from operations

Maintain discipline on capital spending

Sell non-strategic assets

One-time equity offering to accelerate progress

13

Why Equity Now

Eliminate downside credit risk

Accelerate restoring financial flexibility to pursue value-creating opportunities

0

3

6

9

12

15

2002Q1 2004Q1 Pro Forma2004Q1

TargetRange

0

3

6

9

12

15

2002Q1 2004Q1 Pro Forma2004Q1

TargetRange

Debt Reduction TargetDebt

(1)

(1) Pro-Forma for equity offering (2) Includes cash generated from exercise of stock options (3) Excludes WRECO

$ Billions

0.9 0.8

Ex-WRECO

11.6

WRECO

EquityFCF(2) Asset Sales

Debt / Cap(3): 57% 52% 47% 30–40%

1.012.614.3

9.07.0

4.6

2.6

14

15

The New Weyerhaeuser —Free Cash Flow Generating Capacity

Old NewWeyerhaeuser Weyerhaeuser

EPS beforeSpecial Item* $4.83 / share $4.83 / share

Cap Ex ($ Mil) $ 996 $ 750

Dividends ($ Mil) $ 306 $ 382

Free Cash Flowafter Dividends $ 254 Million $ 1.3 Billion*EPS in 1995 are shown before charges of $ .90/share for effects of SFAS #121

0

200

400

600

800

1000

1200

1400

Old Weyerhaeuser New Weyerhaeuser

The New Weyerhaeuser —Free Cash Flow Generating Capacity

Free cash flow after dividends @ $4.83 EPSMillions $

254

1,300

16

17

Priorities for Free Cash Flow

Debt reduction

High return productivity projects

Bolt-on acquisitions / share repurchase

Dividend increases

18


Strong balance sheet

Strong free cash flow generating capability

Proven track record of integrating acquisitions

History of returning cash to shareholders

Industry Outlook

Lynn O. MichaelisVice President, Markets & Economic Research& Chief Economist

19

20

Agenda for Industry Outlook

Macroeconomic setting for forest products

Outlook for wood products

Outlook for containerboard, packaging and recycling

Outlook for pulp and uncoated free sheet

21

Macroeconomic Setting for Forest Products

Economic growth remains “healthy”

Strongest Growth in 20 Years

-1

0

1

2

3

4

5

6

1996 1998 2000 2002 2004

Forecast

Source: BEA/Weyerhaeuser

Growth in U.S. Real GDPPercent Change

AnnualMDGA01G 22

Refinancing and Tax Cut Boosted Consumer Spending

Personal Tax Cuts vs. Cash Out Refinance $ Billions

2002 2003

1st Half 2003

2nd Half

Personal Tax Cuts 0 0 125

Cash Out Refinances 135 130 220

Total (Annualized Rate) 135 130 345

23

Source: Fannie Mae

“Surprising” Surge, Helped Fuel Growth

1.1

1.2

1.3

1.4

1.5

1.6

1.7

1998 1999 2000 2001 2002 2003 2004

U.S. Single-family Housing Starts(Seasonally Adjusted Annual Rate)

Million Units

QuarterlyQMDHO05B Source: Census

24

Cash Flow Supports Rebound in Investment

650

750

850

950

1050

1150

1250

1350

1998 1999 2000 2001 2002 2003

Corporate Cash Flow(Seasonally Adjusted Annual Rate)

Billion $

QuarterlyQMDGA42A Source: BEA 25

China Contributes to World Recovery

6

8

10

12

14

16

18

2000 2001 2002 2003 2004

Growth in Industrial Productionfor China% Change Year Ago

3-month Moving

MonthlyMMIAS19B Source: The Economist 26

Back to Mid-1990s Growth Rate

0

1

2

3

4

5

1990 1992 1994 1996 1998 2000 2002 2004

Forecast

Growth in World Real GDPPercent Change

AnnualAMIOT03D Source: Global Insight/Weyerhaeuser 27

28



Dollar decline continues

Dollar Will Fall Further

0.8

1.0

1.2

1.4

1.61994 1996 1998 2000 2002 2004

Actual/Forecast

PPP Estimate

Forecast

Euro Exchange Rate vs. Purchasing Power Parity EstimateU.S.$/Euro

(inverse)

AnnualAMIEU03G Source: Wall Street Journal/

Weyerhaeuser 29

So Far, Deficit is not Declining

0.5

0.7

0.9

1.1

1.3

1.5

1.7

1994 1996 1998 2000 2002 2004

U.S. Real Imports vs. ExportsTrillion 2000$

AnnualAMDGA40B

Forecast

Real Imports

Real Exports

Source: BEA/Weyerhaeuser

Trade Deficit

30

31




U.S. industrial production recovers

Expecting Best Year Since 1998

-4

-2

0

2

4

1995 1997 1999 2001 2003

Forecast

Growth in U.S. ManufacturingIndustrial Production for Nondurables

Percent Change

AnnualAMDIP05D Source: FRB/Weyerhaeuser 32

33





Inflation and interest rates move higher

Interest Rates Move Higher

34

0

2

4

6

8

10

1995 1997 1999 2001 2003

Moody BAA Bonds

3-monthCommercial Paper

Forecast

U.S. Interest RatesPercent

AnnualAMDIR86D Source: FRB

35





Inflation and interest rates move higher

Single-family housing starts at record levels in 2004

Upward Trend due to Demographics and Interest Rates

0.8

1.0

1.2

1.4

1.6

1990 1992 1994 1996 1998 2000 2002 2004

Forecast

U.S. Single-family Housing StartsMillion Units

AnnualAMDHO19C Source: Census/Weyerhaeuser

Average Size 1994 = 20762003 = 2386

36

37

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

Demographics

Average home size

Housing financing: efficiency and flexibility

38






39

Key Drivers for LumberDemand primarily driven by residential construction — new and remodeling

• Limited substitution

• Net exports improve

Demand Near 70 Billion Board Feet in 2004

50

55

60

65

70

75

80

1988 1990 1992 1994 1996 1998 2000 2002 2004

Demand

Capacity

Demand on North American Lumber Millsvs. Capacity

Billion Board Feet

AnnualAWDNALGD01F

Forecast

Source: RISI, Weyerhaeuser 40

41

Key Drivers for Lumber

Demand primarily driven by residential construction — new and remodeling

Supply is more complex

• Closures

• Canadian costs: manufacturing, trade issue and exchange rate

Reported Price Looks Like This

100

150

200

250

300

350

400

450

1998 1999 2000 2001 2002 2003 2004

Spruce-Pine-Fir 2x4 Lumber Price$/MBF

QuarterlyQWDCLP07B

Reported Random Lengths

TradeCaseBegins

Source: Random Lengths42

Canadian B.C. Mill Net After CVD / AD

100

150

200

250

300

350

400

450

1998 1999 2000 2001 2002 2003 2004

Reported RandomLengthsEstimated Mill Net

TradeCaseBegins

Spruce-Pine-Fir 2x4 Lumber Price$/MBF

QuarterlyQWDCLP07A Source: Random Lengths, Weyerhaeuser 43

Exchange Rates Negated Cost ImprovementsProduction Costs for Average B.C. Interior Mill

RISI Survey Costs 2002 2003 Mfg. Cash Cost (C$) 291 258 Stumpage 58 49 Exchange Rate (C$/USD) 1.57 1.40 Mfg. Cash Cost (USD) 185 184 Duties (USD) 50 51 Cost with Duty (USD) 235 235

Source: RISI44

Exchange Rates Negated Cost ImprovementsProduction Costs for Average B.C. Interior Mill

RISI Survey Costs Estimate for* 2002 2003 2004 Q1 Mfg. Cash Cost (C$) 291 258 275 Stumpage 58 49 62 Exchange Rate (C$/USD) 1.57 1.40 1.33 Mfg. Cash Cost (USD) 185 184 207 Duties (USD) 50 51 64 Cost with Duty (USD) 235 235 271

Source: RISI, *Weyerhaeuser45

46

Key Drivers for Oriented Strand Board (OSB)Demand primarily driven by new residential construction

Substitution

Potential for new capacity

Price Surge Reflects Extreme Shortage

100

200

300

400

500

600

1998 1999 2000 2001 2002 2003 2004

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

QuarterlyQWDPNLP04B Source: Crow's 47

Operating Rates at Record Levels

12

15

18

21

24

27

30

1997 1998 1999 2000 2001 2002 2003 2004

Capacity

Demand

North America OSB Demand vs. CapacityBillion Square Feet

AnnualAWDNAPGD38B

Forecast

Source: RISI, Weyerhaeuser 48

Export Log Premium Holds

400

600

800

1000

1200

1996 1998 2000 2002 2004

Western Export IS Log vs.Douglas Fir #2 Domestic Log Price

$/MBF

AnnualATLP78D

Export IS

#2 Sawlog

YTDSource: Log Lines, Weyerhaeuser 49

50




Outlook for containerboard, packaging and recycling (CBPR)


51

Key Drivers for Containerboard, Packaging and Recycling

Nondurable industrial production

Capacity/operating rate

China’s demand for old corrugated containers (OCC)

Box Shipments Held Up 2003

-3

-2

-1

0

1

2

3

4

1993-1997 1998-2002 2003

Industrial ProductionBox Shipments

Nondurable Industrial Production andAnnual Growth of U.S. Box ShipmentsAverage Annual

Percent Change

ACBBXG82G Source: Fibre Box Association, FRB 52

2004 Similar to Mid-1990s Relationship

-3

-2

-1

0

1

2

3

4

1993-1997 1998-2002 2003 2004

Industrial ProductionBox Shipments

Forecast

Nondurable Industrial Production andAnnual Growth of U.S. Box ShipmentsAverage Annual

Percent Change

ACBBXG82F Source: Fibre Box Association, FRB 53

Capacity Fell Further in 2003

-2

-1

0

1

2

3

4

1990-97 1998-2001 2002 2003

U.S. Containerboard CapacityAverage AnnualPercent Change

ACBOTG10CSource: AFPA

(0%)

54

Significantly Better Situation

80

85

90

95

100

1998 1999 2000 2001 2002 2003 2004

Containerboard Operating RatePercent

QuarterlyQCBOTG09C

Tight Market

Source: AFPA 55

Real Operating Rate Could be Closer to 95%!

80

85

90

95

100

1998 1999 2000 2001 2002 2003 2004

Containerboard Operating RatePercent

QuarterlyQCBOTG09E

Tight Market EffectiveCapacity

Source: AFPA 56

Prices Lag Operating Rates by One Year

57

300

350

400

450

500

1998 1999 2000 2001 2002 2003 2004

Kraft Linerboard Price(Delivered Eastern U.S.)

$/Short Ton

QuarterlyQCBLBP01C Source: RISI

JuneAnnounced

Price

Other Issue: China’s Demand for OCC

58

0

1

2

3

4

5

1998 1999 2000 2001 2002 2003 2004

U.S. Exports of OCCMillion Short Tons

AnnualARCOCCG20C Source: Census

YTDAnnualized

Rate

However, Still the Cheapest Raw Material

60

80

100

120

140

160

180

1996 1998 2000 2002 2004

OCC Pulp Cost vs.Chip Pulp Cost

$/Ton

AnnualAINDP60D

Chip Pulp Cost

OCC Pulp Cost

Source: Weyerhaeuser EstimateYTD

59

60





Outlook for pulp and uncoated free sheet (UCFS)

61

Key Drivers for Pulp

Global Market: demand growth near 3.5%

• China shift to wood pulp

• Economic growth

• Tissue and fluff end-uses

Capacity / operating rate

Exchange rate is critical to outlook

China is Now 12% of World Demand

0

1

2

3

4

5

1998 1999 2000 2001 2002 2003 2004

SoftwoodHardwood

China Imports of Bleached Kraft PulpMillion Metric Tons

AnnualAPLOTG49B

Forecast

Source: Pulp and Paper Products Council,Weyerhaeuser 62

Demand Growth Exceeds Capacity in 2004

0

1

2

3

4

World Bleached Market Pulp Consumption Growth (CAGR,%)

Percent

APLOTG22D

1991-2000 2001-03 2004

Capacity

Forecast

Source: Market Pulp Association/Weyerhaeuser 63

Exchange Rates Help U.S. Producers

0

100

200

300

400

500

600FreightMfg. Cost for U.S.Mfg. Cost for Sweden

Proxy for DeliveredSoftwood Pulp Costs to Belgium

$/Tonne

QuarterlyQPLNBP18B

2002.2Source: Weyerhaeuser Estimate 64

Dollar has Declined 40% Against Kronor

7

8

9

10

11

2000 2001 2002 2003 2004

Swedish Exchange RateKronor/U.S.$

QuarterlyQMISW01A Source: Wall Street Journal 65

Pushing their Costs Up

0

100

200

300

400

500

600FreightMfg. Cost for U.S.Mfg. Cost for Sweden

Proxy for DeliveredSoftwood Pulp Costs to Belgium

$/Tonne

QuarterlyQPLNBP18B

2002.2 2004.1

Source: Weyerhaeuser Estimate 66

Higher Operating Rate and Costs Push Prices Higher

400

500

600

700

800

1998 1999 2000 2001 2002 2003 2004

Source: RISI

Northern Softwood Pulp Price(Delivered Northern Europe)

$/Metric Ton

QuarterlyQPLNBP05B 67

68

Key Drivers for Uncoated Free Sheet (UCFS)

Demand on North America mills

• Domestic (N.A.) consumption

• Net trade position

Exchange rates

Capacity

Strong Growth Helps Boost Demand

-8

-6

-4

-2

0

2

4

6

1997 1998 1999 2000 2001 2002 2003 2004

Forecast

Growth in Domestic (N.A.) Consumptionfor UCFS

Percent Change

AnnualAPAUFG10B Source: AFPA/Weyerhaeuser 69

Market Attractiveness Has Changed

650

750

850

950

1050

1998 1999 2000 2001 2002 2003 2004

Source: Pulp, Paper International and RISI

Germany UCFS Price for A-4 Cut Size(B-Grade) vs. U.S. 20 lb. Cut-Size

$/Ton

AnnualAPAUFP54D

Germany

U.S.

YTD70

Evident in Net Trade Position

0

100

200

300

400

500

600

2001 2002 2003 2004

Imports

Exports

Source: AFPA, Bureau of Census

UCFS Exports vs. Imports, U.S. Non-Canadian Trade,(Seasonally Adjusted Annual Rate)

Thousand Short Tons

QuarterlyQPAUFG07C 71

Capacity Closures Offset Demand Decline

-4

-2

0

2

4

1997-1999 2000-2003

Consumption Capacity

Growth in N.A. UCFSConsumption vs. Capacity

Percent Change

AnnualAPAUFG104A Source: AFPA 72

Cost Squeeze for Non-integrated Producers

400

500

600

700

800

1998 1999 2000 2001 2002 2003 2004

UCFS 50 lb.Offset

NBSKP

U.S. UCFS Price vs.NBSKP Price Delivered in U.S.

$/Ton(ne)

QuarterlyQINDP04H Source: RISI 73

74

Market Conditions Favorable

Economic setting remains very positive

Wood products expected to be strong

Containerboard situation improving

Staging for a sustained recovery in pulp and uncoated free sheet

The New Weyerhaeuser —Operating Excellence

Richard E. HansonExecutive Vice President &Chief Operating Officer

75

76

Role of COO and Operating Committee

Experienced team of solid leaders

Solve problems and replicate best practices

Tackle cross-business issues• Safety• Capital spending• Environmental certification• Portfolio changes

Drive performance improvement

• 11/99

• 11/99 – 1/00

• 2/02


AcquisitionAcquisition

Value Strategic Rationale

$3.0

$0.9

$8.1

• 1st of 2 steps to enhance engineered wood products offering• Synergies: $150 MM target achieved ahead of schedule

• Growth opportunities — new products and systems• Synergies: $50 MM target achieved ahead of schedule

• Created top player in major product lines; timber base• Economies of scale in manufacturing, purchasing and sales• Synergies: $300 MM target achieved ahead of schedule

$ Billions

77

Our Diversification Enhances Earnings PerformanceOur Diversification Enhances Earnings Performance

Diversified Business Portfolio

2003 Sales: $19.9 Billion2003 Sales: $19.9 Billion

Containerboard, Packaging & Recycling—#2 Containerboard and Corrugated Packaging22%22%

11%11%

10%10%

10%10%5%5%

Real Estate— One of the most profitable home builders in U.S.

Market Pulp & Other— #1 Softwood Market Pulp

Timberlands— 6.7 MM acres in North America

Paper— #2 Uncoated Freesheet

18%18%

12%12%

6%6%

Other Wood Products

5%5%

Lumber— #1 Softwood Lumber

Panels— #2 Oriented Strand Board— #2 Plywood

Engineered Wood (TJ)— #1 Engineered Wood Products

78

Earnings per Share Comparison2003 Q4 vs. 2004 Q1

$0.00

$0.20

$0.40

$0.60

$0.80

2003 Q4 Price/Volume Raw Material Mfg. Costs F/X & Other InterestExpense

2004 Q1

.47 .01(.01)

.24

(.10).01 .62

$ per Share Before Special Items*

*A reconciliation before Special Items to GAAP can be found on www.weyerhaeuser.com

Before SpecialItems

Before SpecialItems

79

750626

930

1,2351,228

0

750

1,500

2000 2001 2002 2003 2004E

Capital Spending DisciplineExpenditures for PP&E(1)

Willamette Willamette AcquisitionAcquisition

(1) Proforma for Willamette acquisition

$ Millions

% of Depreciation 110% 108% 76% 48% 60%E

80

81

Capital Spending Plans

How we are investing our capital

2002 2003 2004E

Small Maintenance Capital 200 192 273Optimization and Rationalization 181 166 268Expansion / Additional Capacity 311 59 83 Environmental 190 159 56Information Technology 78 50 70

Total $960 $626 $750

Maintenance expense remains at $1.2 billion annually

$ Millions

885

531685

1,520

2,144

1,806

1,510

1,814

0

500

1,000

1,500

2,000

2000 2001 2002 2003

Free Cash Flow Generation Improved(1)

(1) Proforma for Willamette acquisition(2) Cash from operations minus capital expenditures plus net asset sale proceeds

Willamette Willamette AcquisitionAcquisition

$ Millions

Cash from OperationsFree Cash Flow(2)

82

83

Best in Class Operator

Our strengths

• Scale

• Product breadth

• Integrated operations (forest to market)

• A modern manufacturing fleet

Productivity Improvements in Pulp, Paper and Containerboard Manufacturing

900

1500

2001 2002 2003 2004E

Ton / Year / Employee

25%improvement

84

85

Productivity Improvements in Wood Products

Improvements = 1 scale OSB mill

More lumber production from a smaller asset base

86

Productivity Improvements in Timberlands

Portfolio improvements• Retained core lands• 444,000 acres divested

– Low-performing / non-strategic timberland• 330,000 acres for sale in Georgia• Cash generation growth for future

Improved silviculture and operating practices on acquired lands

87

Fine Paper Business

Competitive advantages

• Lowest cost mill system

• Lowest cost converting operations

• Multiple channels to market

Weyerhaeuser UCFS Market PositionNorth American Capacity

25%25%

15%15%10%10%

7%7%19%19%

24%24%

#1 International Paper

#5 Georgia-Pacific

#4 Boise #2Weyerhaeuser

All Others

#3 Domtar88

Fine Paper Business3.25 Million Tons

45%45%28%28%

Cut Size Business PapersPrinting & Publishing Papers

20%20%

Converting Papers7%7%

Coated Groundwood

89

North American UCFSPaper Machine Width and Age — Dec 2003

100

150

200

250

300

WY Comp A Comp B Comp C Comp D All Others(29)

0

10

20

30

40

50

60Average Width (in) Average Age (yrs)

90

UCFS Paper Machine ProductivityAverage Tons / Inch / Day per Paper Machine

1.5

1.7

1.9

2.1

2.3

2.5

2.7

WY Survey Comp A Comp B Comp C Comp D

2003

Wor

ld Be

nchm

ark*

2003

Wor

ld Be

nchm

ark*

*2003 Metso survey average of 69 best paper machines in the world

Average Tons / Inch / Day per Paper Machine

91

92

Market Pulp Business

Nearly 70% of our market pulp is premium-priced fluff and high-performance value-added pulp


Carrier Fiber Specialty

FluffFluffPapergrade36%36%

13%13%19%19%

32%32%

2.8 Million Metric Tons

93

94


Nearly 70% of our market pulp is premium-priced fluff and high-performance value-added pulp

The majority of our pulp is sold in North America

Provides technical superiority to meet customer needs

95

Containerboard Packaging & Recycling

Low-cost mill system

• Closed inefficient capacity

• All machines in top quartile of industry

Rationalization:Facility Shutdowns 2000–2003

2003North Bend OR

2002Hawesville KY

Sturgeon Falls ON2001

Plymouth NC #3Springfield OR #1

Containerboard988 M Tons (16% of capacity)

2003Guthrie KY

2002Nashville TN, Laredo TX

Richmond VA, Denver COTulsa OK

2001Meriden CT

2000Cleveland OH, Houston TX

Jersey City NJRock Island IL

Packaging7 BSF (9% of capacity)

2002Portland ORSan Jose CA

Oklahoma City OKHaverhill MD

2001Bloomington IN

Recycling

96

97

Containerboard Packaging & Recycling

Low-cost mill system

• Have closed inefficient capacity

• All machines in top quartile of industry

Highly integrated containerboard and box system

Fiber cost management

• Recycled vs. virgin

• Large, efficient recycling system

U.S. Containerboard Market Position

#1 Smurfit-Stone

#2 Weyerhaeuser

#3 International Paper

#5 Inland

#4 Georgia-Pacific

#6 PCA

All Others19.0%19.0%

18.0%18.0%

12.2%12.2%

10.4%10.4%

10.9%10.9%

6.7%6.7%

22.8%22.8%

As of May 2004

98

U.S. Box Market Position

#1 Weyerhaeuser

#2 Smurfit-Stone

#4 Inland #3 Georgia-Pacific

#5 International Paper /Box USA

#6 PCA

All Others18.8%18.8%

18.7%18.7%

12.1%12.1%12.0%12.0%

10.9%10.9%

7.4%7.4%

20.1%20.1%

As of May 2004

99

100

Positioned to Succeed

Low-cost producer with efficient delivery systems

Diversified and balanced portfolio

Focus on value proposition unique to each business

Discipline in capital management and best operating practices

The new Weyerhaeuser is driven to produce bottom-line results

The Journey Ahead

Steven R. RogelChairman, President & CEO

101

Earnings PotentialProforma Earnings by Business

59

262

765

(377)

655

202

699

259

(176)

(83)

777

392

-400

-200

0

200

400

600

800

WRECO &Related

Timberlands Wood Products Pulp & Paper ContainerboardPkg.

Corporate &Other

$ Millions2000 (normal year)2003 (market trough)

102

SG&A is 25% Lower Than Industry Average

8.9%

11.1%

8.0%

10.8%

0%

5%

10%

15%

20012003

103

1 Forest Products Composite based on weighted average SG&A percentage of sales for 9 forest products companies identified as Weyerhaeuser peer comparisons.

Forest Products Composite1 Weyerhaeuser (excluding Real Estate & Related Assets)

% Sales

Total Earnings PotentialTotal Proforma Operating Earnings

2.2

1.2

0

1

2

Total Earnings Upside

$ Billions

2000 (normal year)2003 (market trough)

104

105

The Journey Ahead

Operate safely from the start

1.67

2.19

3.092.39

3.853.904.37

4.965.17

0.0

1.0

2.0

3.0

4.0

5.0

6.0

1996 1997 1998 1999 2000 2001 2002 2003 2004YTD

Total Company Recordable Incident Rate (RIR)1996 — 2004

RIR

106

107

The Journey Ahead

Operate safely from the start

The New Weyerhaeuser• Maintain capital discipline

• Maximizing existing portfolio

• Expand our global footprint

– Focus on Southern Hemisphere– Capitalize on our strengths

new york analyst meeting presentation

Economy & Finance