Good Morning

Weyerhaeuser Real Estate Company Analyst Seminar

May 2005

DTP2844.ppt • 5/12/2005 • 1 Forward-looking Statements

This presentation contains statements 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,” “plans,” and “probably,” and the negative or other variations of those terms or comparable terminology or by discussions of strategy, plans or intentions. In particular, some of these forward- looking statements deal with forecasts regarding the outlook for the national housing market, demand, market position in particular markets, competitive landscape in particular markets, expectations regarding increased market share of large homebuilders, builder/dealer consolidation affordability of particular housing markets, large base of first-time homebuyers in particular housing markets, barriers to entry in particular housing markets, financial goals, the regulatory environment and timing of land entitlement process, increase in land values, softness of certain local housing markets, labor demand and supply, innovation, technology, cost reduction, cycle time reduction, quality improvement, competition based upon solutions, and similar matters. The accuracy of such forward-looking statements is subject to a number of risks, uncertainties and assumptions that may cause actual results to differ materially from those projected, including, but not limited to, the effect of general economic conditions, including the level of interest rates, exchange rates and inflation; immigration and population growth; the relative strength of various U.S. and global business segments; local market economies and employment growth; energy prices; raw material prices; the effect of governmental actions; natural disasters; and the outbreak of terrorism, war and other hostilities. In addition, some information in this presentation is derived from publicly available information, building industry publications and websites, data complied by market research firms, and similar sources. Although we believe that this information is reliable, we have not independently verified any of this information and we cannot assure you that it is accurate.

DTP2844.ppt • 5/12/2005 • 2 Agenda

7:00 a.m. WRECO Overview 7:30 a.m. Homebuilding Operations 8:50 a.m. Land and Land Development 10:10 a.m. Construction Practices and Trends 11:10 a.m. South Village Case Study 11:30 a.m. Meeting Adjourns Noon Depart for South Village Tour 3:30 p.m. Return to airport

DTP2844.ppt • 5/12/2005 • 3 WeyerhaeuserWeyerhaeuser RealReal EstateEstate CompanyCompany

Daniel S. Fulton President, Weyerhaeuser Real Estate Company

DTP2844.ppt • 5/12/2005 • 4 Weyerhaeuser Real Estate Company

Single family homebuilding • Retail business — sell direct to final customer • Local / regional focus • Focused on markets where we have a competitive advantage

Builder finance

DTP2844.ppt • 5/12/2005 • 5 Who We Are

WRECOWRECO

DTP2844.ppt • 5/12/2005 • 6 Financial Performance

2005 has started strongly

Closings & Backlog Closings Revenues Backlog 5,264 2,800 2,495 5,500 4,626 4,280 2,400 2,029 4,500 3,651 3,369 2,000 1,750 3,500 1,600 1,377 1,461

Homes 2,500 1,200 1,189 ($millions) 1,500 1,065 655 800 469 500 400 2000 2001 2002 2003 2004 2004.1 2005.1 2000 2001 2002 2003 2004 2004.1 2005.1

Average Home Price Pre-tax Earnings

500 700 450 610 450 417 600 377 400 374 500 334 340 392 350 318 400 336 264 ($000s) 300 300 259

($millions) 183 250 200 120 200 100 2000 2001 2002 2003 2004 2004.1 2005.1 2000 2001 2002 2003 2004 2004.1 2005.1

DTP2844.ppt • 5/12/2005 • 7 Financial Performance

Margins and turnover trending favorably

Single Family Gross Margin Pre-tax Margin

37% 32% 32% 28% 30% 28% 26% 31% 24% 26% 26% 24% 24% 26% 22% 23% 19% 19% 19% 20% 18% 20% 16% 15% 12% 2000 2001 2002 2003 2004 2004.1 2005.1 2000 2001 2002 2003 2004 2004.1 2005.1

Asset Turnover

1.6 1.5 1.4 1.4 1.4 1.4 1.2 1.2 1.0 1.0 1.0

0.8 2000 2001 2002 2003 2004 2004.1 2005.1

DTP2844.ppt • 5/12/2005 • 8 Return on Investment

WRECO has been a consistent top-quartile financial performer compared to other public homebuilders

Return On Investment

50 45 40 35 30 45.9 25 Percentage 34.9 20 30.8 25.6 25.3 15 10 2000 2001 2002 2003 2004

DTP2844.ppt • 5/12/2005 • 9 Land Pipeline

WRECO currently has a 6-year supply of land and lots under control Lots Under Control 12

Number of Years 4

0 1994 2005.1 DTP2844.ppt • 5/12/2005 • 10 WRECO — RIR

WRECO is widely known for industry leadership in job-site safety 4.5 4.0 3.23 3.5 2.95 3.0 2.5 2.0 1.5 1.05 1.0 0.52 0.5 0.0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005.1

Employees Contractors

DTP2844.ppt • 5/12/2005 • 11 WRECO Ranked 16th in Closings in 2004

Rank by Closings

51,000

46,000

41,000

36,000

31,000

26,000

21,000

16,000

Total New Closings Residential WRECO: 5,264 Closings 11,000

6,000

1,000

(Source: Builder Magazine, May 2005 and Professional Builder Magazine, May 2005) DTP2844.ppt • 5/12/2005 • 12 WRECO Ranked 14th in Revenue in 2004

Rank by Total Revenue

$14.0

$12.0

$10.0

$8.0

$6.0 WRECO: $2.5 Billion

Total Revenue, $B $4.0

$2.0

$0.0

(Source: Builder Magazine, May 2005) DTP2844.ppt • 5/12/2005 • 13 WRECO Ranked 1st in Pre-tax Margin Among the Top 20 Public Builders in 2004

Rank by Pre-Tax Margin

25%

WRECO: 23.6%

20%

15%

10% 2004 Pre-Tax Margin Margin 2004 Pre-Tax 5%

0% (Source: SEC filings)DTP2844.ppt • 5/12/2005 • 14 Large Builders Capture Increasing Market Share

Current stability of Product diversification market drivers Improved technology Supply constraints Purchasing efficiencies Improved inventory management Stronger balance sheets

Geographic diversification

DTP2844.ppt • 5/12/2005 • 15 Housing Supply Remains Low by Historical Standards

14 Months of Supply

6 Months

0 Jan-74 Jan-76 Jan-78 Jan-80 Jan-82 Jan-84 Jan-86 Jan-88 Jan-90 Jan-92 Jan-94 Jan-96 Jan-98 Jan-00 Jan-02 Jan-04

DTP2844.ppt • 5/12/2005 • 16 Industry Market Share Trends

Large homebuilders continue Top 20 Market Share to gain scale faster than small builders 30.0% • Improved efficiencies 25.0%

• Sophistication 20.0% • Stability 15.0%

10.0% 1993—2004 CAGR 5.0%

Top 5 Closings 14.8% 0.0% Top 6–10 10.9% 1993 1998 2003 2004 Top 11–20 6.3% Top 5 Top 6-10 Top 11-20 Total U.S. 5.5% Source: Builder Magazine, US Census Bureau, NAHB

DTP2844.ppt • 5/12/2005 • 17 Large Builder Competitive Advantages

Builders 1–20 Builders 276–400 Advantage Gross Margin 26.8% Gross Margin 24.1% 2.7% SGA 12.5% SGA 13.6% 1.1% EBIT Margin 14.3% EBIT Margin 10.5% 3.8% Financing Cost 1.7% Financing Cost 2.1% 0.4% Profit Margin 12.6% Profit Margin 8.4% 4.2%

Source: Michael Porter presentation, The U.S. Homebuilding Industry and the Competitive Position of Large Builders, 11/18/2003

First look at deals (land and partnership)

Expertise and resources to entitle land

Attract and retain best people

Involvement in industry initiatives

Technology investment and implementation

DTP2844.ppt • 5/12/2005 • 18 Our Competitive Advantages

Select markets Powerful regional brands

Experienced management Disciplined execution • 22-year average tenure • Safe job sites

Localized approach • Focused value propositions • Product preferences • Inventory control • Community and Linkage with Weyerhaeuser governmental issues

Aligned management processes focused on financial results

DTP2844.ppt • 5/12/2005 • 19 Weyerhaeuser Realty Investors

“Making deals work for over 30 years” • Dependable source of capital • Hassle-free approval • Quick initial response • Competitively priced • Funding on the promised date • Honest, fair and focused on long-term relationships 2004 Closings: 7,371 Homes and Lots

Equity or mezzanine debt construction financing to medium size homebuilders (50–600 homes annually)

WRI is an investment manager for institutional investors as well as an investor itself • Total investment in WRI represents less than 2% of WRECO’s assets • Principal markets: Southern California, Northern California, Phoenix, Las Vegas, Denver, Puget Sound, Portland, Washington DC, Chicago, Boise, Salt Lake City

DTP2844.ppt • 5/12/2005 • 20 WRECO Is Positioned to Succeed

Outlook for the national housing market is favorable • Demographic trends are compelling

WRECO is a top performer • We have strong competitive advantages

DTP2844.ppt • 5/12/2005 • 21 Agenda

7:00 a.m. WRECO Overview Dan Fulton 7:30 a.m. Homebuilding Operations Dan Fulton (Moderator) Larry Burrows Will Holder Peter Orser Mike McGee Hal Struck 8:40 a.m. Break 8:50 a.m. Land and Land Development Dan Fulton (Moderator) Jon Lash Steve Margolin Steve Nardella Joel Marshall John Osgood

DTP2844.ppt • 5/12/2005 • 22 Winchester Homes

“Delivering a superior customer-focused buying experience to customers that value and can afford customization, in well-designed communities in superior locations. Preferred brand for the upscale buyer.”

Home Sizes (sf) Price Range Communities 2004 Closings 1,459–4,502 $245,000–$1,470,000 21 725 homes

● One of the largest builders of upscale homes in the D.C. area ● Market customization leader through program ● First large builder to win NAHB’s Housing Quality Award ● Rated #4, “50 Best Companies to Work For” by Professional Builder Magazine

DTP2844.ppt • 5/12/2005 • 23 Winchester Homes: Historical Snapshot

Closings Average Price

750 $600

700 $550

650

$500

600 Closings

$450

550 ($000's) Price Average

500 $400 2000 2001 2002 2003 2004

DTP2844.ppt • 5/12/2005 • 24 Winchester Homes: Geography

DTP2844.ppt • 5/12/2005 • 25 Winchester Homes: Formative Periods

Started from Market Peaked, Refocused, Implemented Scratch in Branded Quality Customization Maryland (WinchestersWorth) (Your Home Your Way)

Established as Large Repositioned, Introduced Production Builder, “Preferred Brand 10 Cylinders Entered Virginia Upscale Homebuyer”

1979– 1983– 1989– 1994– 1997– 2003– 1982 1988 1993 1996 2003 Current

DTP2844.ppt • 5/12/2005 • 26 Winchester Homes: 10 Cylinders Operationalized

PreferredPreferred BrandBrand forfor thethe UpscaleUpscale BuyerBuyer

GreatGreat GreatGreat GreatGreat PeoplePeople ProductProduct DemandDemand

CommunityCommunity ProductProduct ProductProduct BuyingBuying RetainRetain DevelopDevelop RecruitRecruit LocationLocation RealtorsRealtors CustomersCustomers VisioningVisioning DesignDesign QualityQuality ExperienceExperience

DTP2844.ppt • 5/12/2005 • 27 Winchester Homes: Customization Through

DTP2844.ppt • 5/12/2005 • 28 Winchester Homes: Customization Through

DTP2844.ppt • 5/12/2005 • 29 Agenda

DTP2844.ppt • 5/12/2005 • 30 Trendmaker Homes

“We offer luxury, production homes at a price below custom homes, but at a premium from other production builders, while using processes that minimize the hassle and anxiety of the home buying/building experience.”

Home Sizes (sf) Price Range Communities 2004 Closings 1,700–5,869 $185,000–$667,000 22 745 homes

● Houston’s leading home builder in its targeted upscale market segment ● Broad product offering: townhomes to spacious, luxury single-family homes ● Houston Builder Ranking 2004: 2nd aver. price ($338,000), 8th total $ volume ($252MM)

DTP2844.ppt • 5/12/2005 • 31 Trendmaker Homes: Overview

Houston homebuilder since 1971

Purchased by WRECO in 1984

Over the years we have carved out a competitive market niche with Houston’s discriminating, move-up homebuyers

Enjoys strong Realtor support with 83% co-op sales vs. 64% for all builders combined

We target where we see the greatest profit potential • Move-up family buyers • Move-down empty nesters

DTP2844.ppt • 5/12/2005 • 32 Trendmaker Homes: Market Statistics

Houston Market Characteristics

th 4 largest city in America with almost 5 million residents

Added 34,900 new jobs in 2004 (Best Texas Market: Source, MetroStudy)

Over 40,000 housing starts in 2004

One of the most affordable metro housing markets with large base of first-time homebuyers and move-up buyers

Highly attractive regulatory environment with few zoning or entitlement requirements

DTP2844.ppt • 5/12/2005 • 33 Trendmaker Homes: Competitive Landscape

Few significant entry barriers for new builders or lot developers

Supply-rich environment, highly competitive at the retail level

Steady demand from both local buyers and corporate relocation buyers

National and local builders play an important market roll

Realtors play an very important role in corporate relocations and in reselling existing homes for local move-up buyers

Separate and distinct builder and developer market roles

DTP2844.ppt • 5/12/2005 • 34 Trendmaker Homes: Historical Snapshot

Trendmaker Homes

Closings Average Price

800 $400

700 $350

600

Closings $300 500 Average Price ($000's) Average Price

400 $250 2000 2001 2002 2003* 2004

*Introduced lower-priced townhomes

DTP2844.ppt • 5/12/2005 • 35 Trendmaker Homes: Strategy

Product

High-design homes

High level of finishes

Complete architectural elements

Functional features Professionalism

Uncompromising safety standards

Tenured employees — train and retain

Customer-satisfaction driven

Focused Realtor and developer relations

DTP2844.ppt • 5/12/2005 • 36 Trendmaker Homes: Houston Community Map

DTP2844.ppt • 5/12/2005 • 37 Trendmaker Homes: Target Markets / Product

60’ Lot Product Line • 2,400–3,400 s.f. • $190–250,000 • 90% brick, granite counters • Move-up and move-down buyers

65’ Lot Product Line • 2,900–3,600 s.f. • $250–300,000 • Detached garages, large dining rooms • Strong family homes, some empty nesters

DTP2844.ppt • 5/12/2005 • 38 Trendmaker Homes: Target Markets / Product

70’ Lot Product Line • 3,000–4,200 s.f. • $300,000+ • Elegant, highly amenitized homes, master suites with sitting rooms and large game rooms • Move-up family buyers

80’+ Lot Product Line • 3,500–5,000 s.f. • $300–500,000+ • Auto-court, 3-car garages, lake and golf lots, high design • Move-up family buyers

DTP2844.ppt • 5/12/2005 • 39 Trendmaker Homes: Target Markets / Product

Acreage Lot Product Line • 2,500–5,000 s.f. • $300–500,000+ • Considerable product range, country style and estate lots • Multi-generational buyers, large-family living

Townhomes • 1,800–2,400 s.f. • $200–260,000 • Rear-loaded, 3-car garages, courtyards, 1- and 2-story plans • Density: 6 units per acre • Move-down, empty nesters

DTP2844.ppt • 5/12/2005 • 40 Agenda

DTP2844.ppt • 5/12/2005 • 41 Quadrant Homes

“We provide the most home for the money — space, choice, value and hassle-free.”

Home Sizes (sf) Price Range Communities 2004 Closings 1,288–4,120 $170,000–$390,000 11 1,160 homes

● #1 in sales volume in the Puget Sound Region ● Builds homes using an “even-flow” production system ● Selected by Washington CEO Magazine as the “Best Company to Work For” in 2004 ● Only homebuilder in the nation recommended for OSHA / WISHA VPP Star status

DTP2844.ppt • 5/12/2005 • 42 Quadrant Homes: Historical Overview

Purchased by Weyerhaeuser in 1969

1974: Region’s first master-planned community (West Campus)

1990–2000: Leader in commercial build-to-suit market

1998: Reengineered homebuilding value proposition and began 1/day

2002: Exit commercial

2003: 4/day

2004: 5 and 6/day

DTP2844.ppt • 5/12/2005 • 43 Quadrant Homes: Historical Snapshot

Quadrant Homes

Closings Average Price

1,500 $300

$290 1,200

$280 900 $270 Closings

600 $260 Average Price ($000's) Average Price

300 $250 2000 2001 2002 2003 2004

DTP2844.ppt • 5/12/2005 • 44 Quadrant Homes

Market Characteristics • New homes • Resale homes • Jobs • Regulatory environment Competitive Landscape • Only 2 publics – No large land positions • Mid-size (300) pushing for 500 sales recently • The 2 publics pushing out into the next ring

DTP2844.ppt • 5/12/2005 • 45 Quadrant Homes: Strategies

Remain focused on executing in the Puget Sound core ($250–$400,000)

Create compelling value in next ring out ($150–$300,000)

Target unavailable price point in 3rd ring ($125–$200,000)

Stay true to More House, Less Money by appealing to 1st and 2nd homebuyers

DTP2844.ppt • 5/12/2005 • 46 Quadrant Homes: Value Proposition

More House — Less Money

Differentiated by execution of the value delivery system and “tipping-point” brand value

Market position is sustainable because • Surgical focus on principles • People • Ability to transport brand • Disciplined land-acquisition strategies

DTP2844.ppt • 5/12/2005 • 47 Quadrant Homes: Brand

Local Northwest focus

Reinforced by “listening to the customer”

Focus on referral, not traffic generation

Create a repeatable / referable experience

Demonstrate “green” and citizenship values

DTP2844.ppt • 5/12/2005 • 48 Quadrant Homes: Value Delivery System

The competitive edge of a low-cost producer • Safety focus with commitment to quality • 6 starts and 6 closings every day • 54-working-day construction schedule • Harnessing the power of choice • Focusing on returns through velocity

DTP2844.ppt • 5/12/2005 • 49 Agenda

DTP2844.ppt • 5/12/2005 • 50 THE WAY YOU WANT TO LIVE

Founded in Los Angeles in 1921

Purchased by WRECO in 1969

Celebrating over 50 years in the Los Angeles, San Diego and Las Vegas markets

Our Senior Management Team has an average tenure of 22 years

Builder Magazine’s “2003 America’s Best Builder”

U.S. EPA Energy Star “2003, 2004 and 2005 Partner of the Year”

DTP2844.ppt • 5/12/2005 • 51 Pardee Homes: Value Proposition

Our value proposition is customer driven, based on 80+ years of experience and intentionally broad ““WeWe buildbuild homeshomes andand communitiescommunities forfor thethe wayway peoplepeople wantwant toto live,live, creatingcreating premiumpremium valuevalue throughthrough aa trustingtrusting builderbuilder relationship.relationship.””

Focused on development of highly amenitized master- planned communities and the construction of homes for first-time through luxury move-up buyers, with extensive option offerings

DTP2844.ppt • 5/12/2005 • 52 THE WAY YOU WANT TO LIVE

We develop a keen sense of regional buyer preferences and earn exceptional homebuyer loyalty

We utilize Six Sigma processes to drive continuous improvement

We are a recognized industry leader in energy efficient and “Green Building” practices

is a powerful brand that succeeds against national brands by being home grown, and benefiting from established trade contractor and consultant alliances

DTP2844.ppt • 5/12/2005 • 53 THE WAY YOU WANT TO LIVE CALIFORNIACALIFORNIA

Home Sizes (s.f.) Price Range Sacramento Pleasanton 998–5,118 $264,000–$2,100,000

Santa Clarita Communities 2004 Closings Corona Los Angeles Irvine 25 1,514 San Diego

DTP2844.ppt • 5/12/2005 • 54 Pardee Homes: Historical Snapshot

CaliforniaCalifornia

Closings Average Price 1,600 $575

1,500 $550

1,400 $525

1,300 $500

1,200 $475

Closings 1,100 $450

1,000 $425

900 $400 ($000's) Average Price

800 $375 2000 2001 2002 2003 2004

DTP2844.ppt • 5/12/2005 • 55 THE WAY YOU WANT TO LIVE

Los Angeles / Ventura

East Bay / Sacramento

DTP2844.ppt • 5/12/2005 • 56 THE WAY YOU WANT TO LIVE

Inland Empire

Orange County / San Diego

DTP2844.ppt • 5/12/2005 • 57 THE WAY YOU WANT TO LIVE NEVADA

Home Sizes (s.f.) Price Range 1,414–4,330 $258,000–$789,000

Las Vegas

Communities 2004 Closings 17 1,120

DTP2844.ppt • 5/12/2005 • 58 Pardee Homes: Historical Snapshot

NevadaNevada

Closings Average Price

1,400 $350

1,200 $325

1,000 $300

800 $275

600 $250 Closings

400 $225

200 $200 ($000's) Average Price

0 $175 2000 2001 2002 2003 2004

DTP2844.ppt • 5/12/2005 • 59 Pardee Homes

DTP2844.ppt • 5/12/2005 • 60 Pardee Homes: Competitive Landscape

Characteristics of our markets • Employment trending positive • Housing pushing to the edges • Land is becoming more scarce

Demographics of our markets • 50% families aged 35-40 • Increasingly ethnically diverse • Buyers seek affiliation with an eco-friendly builder

Product position • 90,000+ options available to satisfy buyer preferences

DTP2844.ppt • 5/12/2005 • 61 Pardee Homes: Competitive Advantage

We develop master plans that offer our customers a wide variety of opportunities • Housing • Employment centers • Shopping and civic uses • Schools • Recreational amenities

DTP2844.ppt • 5/12/2005 • 62 Pardee Homes: Competitive Advantage

We have proven problem-solving expertise in running the gauntlet of local, state and federal regulatory processes

Well-honed execution skills resulting in superior performance

In our 84 year history we have never had an unprofitable year!

DTP2844.ppt • 5/12/2005 • 63 Pardee Homes

DTP2844.ppt • 5/12/2005 • 64 Safety Is Good Business!

DTP2844.ppt • 5/12/2005 • 65 Pardee Safety History

Recordable Incident Rate (RIR) 5 4.36 4 3.01 3

2 1.67 .87 1 .63 .36 .56 0 1999 2000 2001 2002 2003 2004 2005.1

• Recordable incident rate is the number of incidents per 200,000 labor hours

DTP2844.ppt • 5/12/2005 • 66 WRECO Homebuilding Strategy

Local business, national scale

Unique local value propositions • Local land strategies • Local design and construction

Share common values • Safety • People • Business conduct

DTP2844.ppt • 5/12/2005 • 67 WRECO Homebuilding Strategy (cont.)

Share common support • HR administration, training and development • Information technology • National purchasing • Capital

Share common practices • Listen to the customer • Disciplined financial management – ROI focus

Leverage scale of WRECO / Weyerhaeuser

Aligned culturally with Weyerhaeuser

DTP2844.ppt • 5/12/2005 • 68 What questions do you have?

DTP2844.ppt • 5/12/2005 • 69 Agenda

DTP2844.ppt • 5/12/2005 • 70 Agenda

DTP2844.ppt • 5/12/2005 • 71 Land is the Lifeblood of our Business

Land acquisition is managed as a process

Land is purchased in alignment with market specific strategies

Effective land acquisition requires a balance between opportunity, capital and risk

DTP2844.ppt • 5/12/2005 • 72 Land Acquisition Process Overview

Land Strategy

Deal Look-Back Land Leads

Contract Contracts Administration

Project Approval Feasibility Financial Analysis

DTP2844.ppt • 5/12/2005 • 73 Land Strategy Drives the Process

Main elements of land strategy • Understanding market attractiveness – What is the opportunity? • Plan to take advantage of opportunity – What is the strategy? • Strategy implementation – How do we balance the opportunity, capital requirements and risk?

DTP2844.ppt • 5/12/2005 • 74 Land Strategy / Key Measurements

Number of years supply in lot pipeline • Lots owned or to be acquired via specific performance contract • Lots under option contract

Compliance with internal debt limits

Achieves target returns

DTP2844.ppt • 5/12/2005 • 75 Land Financing Alternatives

Wholly owned

Option contract

Joint venture • Landowner • Homebuilder partner • Financial partner

DTP2844.ppt • 5/12/2005 • 76 Typical Land-related Roles

Acquisitions / deal-maker

Planning and entitlements

Development operations

Feasibility analyst

DTP2844.ppt • 5/12/2005 • 77 Selling Land is an Integral Part of our Strategy

In large mixed-use master plan communities, we routinely sell the non-residential properties to other developers

“Improve our hand in land”

Land Revenue as a Percent of Total Revenue

100% 90% 80% 70% 60% 50% 40% 30%

Land Revenue Percentage Land Revenue 20% 18% 10% 13% 11% 13% 12% 0% 2001 2002 2003 2004 2005.1 Land Revenue

DTP2844.ppt • 5/12/2005 • 78 Land Acquisition Key Controls

Standard underwriting package, including common financial analysis model

Risk-adjusted minimum hurdle rates

Annual and 5-year planning process

All deals require approval of WRECO’s President and CEO

DTP2844.ppt • 5/12/2005 • 79 Land Regulation

Growth Management

Comprehensive Plan

Permitting

DTP2844.ppt • 5/12/2005 • 80 Land Acquisition Process Overview

Land Strategy

Deal Look-Back Land Leads

Contract Contracts Administration

Project Approval Feasibility Financial Analysis

DTP2844.ppt • 5/12/2005 • 81 Land Planning Optimization

Land planning is closely related to the entitlement process and technology has provided tools to quickly analyze alternatives • Linear Programming (financial optimization) • Computer Simulation (physical optimization)

DTP2844.ppt • 5/12/2005 • 82 Land Planning Optimization

Linear Programming for Land Use Optimization

1200 Acres

DTP2844.ppt • 5/12/2005 • 83 Land Planning Optimization

Computer Simulation

Digitized Topography

DTP2844.ppt • 5/12/2005 • 84 Land Planning Optimization

Computer Simulation

Street Pattern

DTP2844.ppt • 5/12/2005 • 85 Land Planning Optimization

Computer Simulation

Lot Layout

DTP2844.ppt • 5/12/2005 • 86 Land Planning Optimization

Computer Simulation

DTP2844.ppt • 5/12/2005 • 87 Land Acquisition Process Overview

Land Strategy

Deal Look-Back Land Leads

Contract Contracts Administration

Project Approval Feasibility Financial Analysis

DTP2844.ppt • 5/12/2005 • 88 Agenda

10:10 a.m. Construction Practices and Trends Mark Gray Carlos Guilherme 11:10 a.m. South Village Case Study Alan Shapiro John Monacci 11:30 a.m. Meeting Adjourns Dan Fulton Noon Depart for South Village Tour 3:30 p.m. Return to airport

DTP2844.ppt • 5/12/2005 • 89 WRECO and Weyerhaeuser Wood Products

DTP2844.ppt • 5/12/2005 • 90 Presentation Outline

Overview of building practices

Major trends in home construction

WRECO / WY responses to these trends

DTP2844.ppt • 5/12/2005 • 91 Leading Producer of Residential Building Materials

2004 Total Third Party Sales $9.8 Billion

Other Products 21%

Softwood Lumber 40%

Plywood / Veneer 10%

Oriented Strand Board 14% Engineered Lumber Products 15%

DTP2844.ppt • 5/12/2005 • 92 Focused on the New Residential Market

R&R 19%

New Res 50%

Industrial 23%

Export Non Res 5% 3%

DTP2844.ppt • 5/12/2005 • 93 Value of WRECO / Wood Products Relationship

Collaborate to gain superior information • Trends in home construction • Better understanding of product usage requirement • Sources for product innovation

Jointly develop and trial innovations — products and building methods

Joint marketing opportunities (Sales centers, Extreme, etc.)

DTP2844.ppt • 5/12/2005 • 94 Use of Weyerhaeuser Products

100% of WRECO’s wood floor systems use Weyerhaeuser products % of 2004 Closings

TJ Only 4%

StructurwoodOnly WY Floor 13% System (TJ and Structurwood) 83%

DTP2844.ppt • 5/12/2005 • 95 Presentation Outline

Overview of building practices

Major trends in home construction

WRECO / Weyerhaeuser responses to these trends

DTP2844.ppt • 5/12/2005 • 96 Cost Breakdown of Large Builders*

% of Home Sale Price

Other 2% Profit 13% Financing Land and related 2% 24%

Overhead 6%

Marketing/Advert. 5%

Constuction Labor 21% Materials & Indirect 27%

* Average of 6th through 25th builder Source: Professional Builder Magazine, May 2005

DTP2844.ppt • 5/12/2005 • 97 Basements / Crawl Spaces / Slab On-grade

Trendmaker Winchester

Pardee Quadrant

DTP2844.ppt • 5/12/2005 • 98 Wall Panelization and Traditional Site Frame

Trendmaker Winchester

Pardee Quadrant DTP2844.ppt • 5/12/2005 • 99 Exterior Sheathing and Roofing

TrendmakerTrendmaker WinchesterWinchester

PardeePardee QuadrantQuadrant

DTP2844.ppt • 5/12/2005 • 100 Regional Differences Will Persist

• Building practices / code requirements • Builder concentration RegionallyRegionally distinct distinct models will • Propensity to prefabrication models will continuecontinue to to exist exist in in the near term • Labor availability the near term • Relative structure supply chain participants

DTP2844.ppt • 5/12/2005 • 101 Presentation Outline

Overview of building practices

Major trends in home construction

WRECO / Weyerhaeuser responses to these trends

DTP2844.ppt • 5/12/2005 • 102 Trends in Homebuilding Industry

Tightening Labor Markets

Position to Profit in Builder and Position to Profit in Enabling Dealer thisthis New New Technology Consolidation EnvironmentEnvironment

Improving Componentization Economics

DTP2844.ppt • 5/12/2005 • 103 Builders Continue to Consolidate

Production Builder Market Share % of total closings 35 30 Top 100 25 Top 10 20 15 10

5 0

2 0 96 993 001 199 1 1994 1995 19 1997 1998 1999 200 2 2002 2003

Source: Builder Magazine DTP2844.ppt • 5/12/2005 • 104 Greater Use of Components

DTP2844.ppt • 5/12/2005 • 105 Other Componentized Practices

DTP2844.ppt • 5/12/2005 • 106 Enabled by Technology

DTP2844.ppt • 5/12/2005 • 107 Industry Trends

More components to reduce cost, cycle time and improving quality

Improved coordination across the supply channel

Production builders will lead this change

Basis of competition for suppliers will change from products to solutions

Balance common processes with unique regional needs

DTP2844.ppt • 5/12/2005 • 108 Presentation Outline

Overview of building practices

Major trends in home construction

WRECO / Weyerhaeuser responses to these trends

DTP2844.ppt • 5/12/2005 • 109 Positioning Initiatives

Clear focus on the residential market

Developing new value proposition • Innovating on products • Enabling software • Market presence

Investing in world class technology

Operating excellence throughout the delivery chain

Bringing the full value of WY integration • Homebuilding/Manufacturing • Systems creation • Manufacturing/Timberlands

DTP2844.ppt • 5/12/2005 • 110 What questions do you have?

DTP2844.ppt • 5/12/2005 • 111 Agenda

DTP2844.ppt • 5/12/2005 • 112 South Riding, Loudoun County Virginia

DTP2844.ppt • 5/12/2005 • 113 Winchester Homes: How We Arrived Here — South Riding Story

Winchester Purchased Identified Adjacent Parcels 102 “Premium” Lots from (428 Lots) to Continue South Riding Developer Successful Program Trafalger House

Sales Begin at South Village 1996–1998 1999 2003–Current

DTP2844.ppt • 5/12/2005 • 114 Winchester Homes: Map of South Riding and Vicinity

DTP2844.ppt • 5/12/2005 • 115 South Riding: Overview

Retreat At South Village

South Village Commons

DTP2844.ppt • 5/12/2005 • 116 Winchester Homes: Hub and Spoke Strategy

Coming Spring ‘07

Coming Spring‘06

DTP2844.ppt • 5/12/2005 • 117 South Village: Commons and Retreat

Retreat At South Village

South Village Commons

DTP2844.ppt • 5/12/2005 • 118 South Village: Commons Site Plan

DTP2844.ppt • 5/12/2005 • 119 South Village: Commons Home Styles

3,000–3,500 s.f. High $700,000 2,300 s.f. Low $500,000

3,200–3,500 s.f. Mid $700,000 2,600 s.f. Low $500,000

DTP2844.ppt • 5/12/2005 • 120 South Village: Retreat Site Plan

DTP2844.ppt • 5/12/2005 • 121 South Village: Retreat Home Styles

3,000-3,500 s.f. High $700,000

2,900-4,500 s.f. Low $800,000

DTP2844.ppt • 5/12/2005 • 122 South Village: Our Successes

268 Sales since community start (2003)

43% Average increase in price — Townhomes

40% Average increase in price — Single Family

96% Willingness To refer*

74% Highly enthusiastic customer rating*

42% Homeowner referral rating*

* Source: Woodland/O’Brien & Associates

DTP2844.ppt • 5/12/2005 • 123 Agenda

DTP2844.ppt • 5/12/2005 • 124 Thank You

Check out of room (if not already done)

Take luggage to curbside

Pick up box lunch on designated table

Board bus no later than Noon

Enjoy your day, travel safely!

DTP2844.ppt • 5/12/2005 • 125