US TIMBERLAND MARKETS

Chris Lyddan, Director Timber

Timber Invest Europe

October 23, 2012

London

RISI is a global

company

Offices:

Boston

Atlanta

San Francisco

Sao Paulo

Brussels

Helsinki

Beijing

Shanghai

OUTLINE

US Timberland: Lots of ‘Uns’

• Tenure

• Size

• Transparency

• Diversity

• Alternatives

• Risk rating

• End use demand/RISI forecast

US Tenure: Unmatched

• Original market

• ‘92 HTRG reached million acre/billion dollar AUM

• T-REITs came alive ’00

• Integrated forest industry (with pressure from Wall

Street) liquidated TL

US Size & Scale: Unrivaled – by Far (US TIMO global AUM, million ha)

0 2 4 6 8 10 12 14

Uruguay

Brazil

New Zealand

Australia

US

Investor vs. Total Private Million ha

0 20 40 60 80 100

New Zealand

Australia

US

US Transparency: Unequalled

• RISI initiated reporting and analysis in ’96 as

markets took off

• So far in ‘12, 17 years later, >550 major transactions

in RISI dbase, >$57 billion, >62 mm acres (25 mm ha)

Price

(Millions) Seller Year

Price

(Millions) Seller Year

$ 2,385 Forest Capital 2012 $ 783 Plum Creek 2008

$ 2,380 Temple-Inland 2007 $ 780 Forest Systems 2007

$ 1,850 Longview Fibre 2007 $ 713 Campbell Group 2007

$ 1,710 TimberStar 2008 $ 710 Smurfit-Stone 1999

$ 1,650 Boise Cascade 2005 $ 590 Louisiana-Pacific 1998

$ 1,650

Harvard

Management 2005 $ 550

Menasha Forest

Products 2007

$ 1,130

International

Paper 2006 $ 511 Riverwood 1996

$ 942

International

Paper 2006 $ 510

International

Paper 2003

$ 905

International

Paper 1996 $ 500

International

Paper 2001

$ 900 R-H Timber 1996 $ 500

Pacific Lumber

(PALCO) 2008

$ 889 Weyerhaeuser 2005

$500+ Million

Price

(Millions) Seller Year

Price

(Millions) Seller Year $ 445 International Paper 2006 $ 282 Weyerhaeuser 1996

$ 401 Campbell Group 2003 $ 280 Kimberly-Clark 1997

$ 400 Kimberly-Clark 1999 $ 275 Georgia-Pacific 1997

$ 400 MeadWestvaco 2007 $ 269 International Paper 2006

$ 400 Weyerhaeuser 2004 $ 262 International Paper 2006

$ 397 Georgia-Pacific 1999 $ 250 International Paper 2004

$ 386 International Paper 2006 $ 250 PCA 2000

$ 365 Pioneer Forest 1998 $ 250 Plum Creek 2009

$ 365 International Paper 2006 $ 239 International Paper 2006

$ 359 International Paper 2006 $ 235 Molpus Woodlands 2006

$ 350 Cavenham 1996 $ 234 Willamette 1998

$ 350 Willamette 1996 $ 229 Cavenham 1996

$ 345 Cerberus 2005 $ 225 Private 1998

$ 345 Green Diamond 2008 $ 220 Strategic Timber 1999 $ 330 Molpus/Harvard 2011 $ 216 Bowater 1998

$ 323 Hancock Timber 2004 $ 215 Blixseth (Western Pacific) 2007

$ 320 Crown Pacific 2004 $ 215 Sierra Pacific 2008

$ 310 Alliance Forest 1999 $ 205 Cavenham 1996

$ 310 International Paper 2006 $ 204 PCA 1999

$ 300 International Paper 2006 $ 200 Cavenham 1996 $ 295 Weyerhaeuser 2009 $ 200 International Paper 1997

$ 290 Louisiana-Pacific 2003 $ 200 Weyerhaeuser 2011

$ 290 International Paper 2004 $ 200 International Paper 2006 $ 287 GMO-RR 2011

$200-500 Million

Diversity: Unsurpassed

• >195 different sellers

• >210 different buyers

• >200 multile buyers

Year

Number of

Trans.

Total Acres

(Thousands) Total (Millions $)

Ave. Trans.

(Millions $)

2002 40 2,881 1,983 49.6

2003 65 4,936 3,722 57.3

2004 63 4,231 3,109 49.3

2005 36 7,865 6,243 173.4

2006 60 8,532 8,736 145.6

2007 35 5,180 8,529 243.7

2008 39 3,426 5,190 133.1

2009 45 1,844 2,134 47.4

2010 23 760 823 35.8

2011 29 2,254 1,423 49.1

2012e 27 3,545 4,431 164.1

Total 462 45,453 46,323 101.1

Ave 42 4,132 4,211 104.3

Decade of Change

Alternative Buyer/Seller Types: Unlimited

• Institutional: 30+ TIMOs, REITs, endowments

• Wealthy privates (family offices): 50+

• Private forest industry: 50+

• Conservation, public: 55+

• HBU, Mom & Pop, hunt clubs, recreation: 100s

• New classes: Minerals, energy, carbon, etc.

End-Use Demand

RISI Sawtimber Forecast

Demand

Supply

Prices (real)

RISI Pulpwood Forecast

Demand

Supply

Prices (real)