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10-Q
false
N.A.
2009-06-30
WEYERHAEUSER CO
0000106535
WY
--12-31
Yes
No
Yes
Large Accelerated Filer
-548000000
<div>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>NOTE 3: DISCONTINUED OPERATIONS</b></font></p>
<p style=
"MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; TEXT-INDENT: -2%">
<font face="ARIAL" size="2">There are no operations classified as
discontinued for the quarter and year-to-date periods ended
June 30, 2009.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">Our discontinued operations for the quarter and
year-to-date periods ended June 29, 2008, include the
operations of our Containerboard, Packaging and Recycling business
and our Australian operations, both of which were sold in third
quarter 2008.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">The following table summarizes the U.S. dollar components
of net sales and revenues and net earnings from discontinued
operations for the quarter and year-to-date periods ended
June 29, 2008:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
 </p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="68%"></td>
<td valign="bottom" width="12%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="12%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"> <font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="2"><font face="ARIAL" size=
"1"><b>QUARTER ENDED</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="2"><font face="ARIAL" size=
"1"><b>YEAR-TO-DATE ENDED</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap">
<p style="WIDTH: 126pt; BORDER-BOTTOM: #000000 1px solid">
<font face="ARIAL" size=
"1"><b>DOLLAR AMOUNTS IN MILLIONS</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="2"><font face="ARIAL" size=
"1"><b>JUNE 29,</b></font><br />
<font face="ARIAL" size="1"><b>2008</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="2"><font face="ARIAL" size=
"1"><b>JUNE 29,</b></font><br />
<font face="ARIAL" size="1"><b>2008</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Net Sales</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">1,436</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">2,787</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Income from operations</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">173</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">303</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Interest expense</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(1</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(1</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Equity in income of affiliates</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">3</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">4</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Income tax expense</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(64</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(108</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2"><b>Net earnings from discontinued
operations</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>111</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>198</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style=
"MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; TEXT-INDENT: -2%">
<font face="ARIAL" size="2">Results of discontinued
operations:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">exclude certain general
corporate overhead costs that have been allocated to and are
included in contribution to earnings for the operating
segments,</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">include an allocation
of net pension income and</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">include interest
expense only if the interest is directly attributable to the
discontinued operations or is interest on debt that is required to
be repaid as a result of a disposal transaction.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">Discontinued operations related to our Containerboard,
Packaging and Recycling business do not include any allocation of
interest expense. Discontinued operations related to our Australian
operations include interest expense.</font></p>
</div>
<div>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>NOTE 15: LEGAL PROCEEDINGS, COMMITMENTS AND
CONTINGENCIES</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">This note provides details about our:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">legal proceedings
and</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">environmental
matters.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>LEGAL PROCEEDINGS</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">Major legal proceedings involving us described in this
section are:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">hardboard siding claims
and</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">alder antitrust
litigation.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">We also are a party to other legal matters generally
incidental to our business.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">The ultimate outcome of any legal proceeding:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">is subject to a great
many variables and</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">cannot be predicted
with any degree of certainty.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">However, whenever probable losses from litigation could
reasonably be determined – we believe that we have
established adequate reserves. In addition, we believe the ultimate
outcome of the legal proceedings:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">could have a material
adverse effect on our results of operations, cash flows or
financial position in any given quarter or year; but</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">will not have a
material adverse effect on our long-term results of operations,
cash flows or financial position.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b><i>Hardboard Siding Claims</i></b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">This is a nationwide claims-based settlement of hardboard
siding class action cases against us.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">Under the settlement – which we entered into in June
2000 – all persons who own or owned structures in the United
States on which our hardboard siding had been installed from
January 1, 1981, through December 31, 1999, can file
claims.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">An independent adjuster reviews claims submitted and
determines payment. Claims are paid as submitted over a nine-year
period. The right to file claims expires in three six-year
increments and claims for the first two periods may no longer be
filed. The expiration dates are:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">2003 – persons
who had our hardboard siding installed from 1981 to
1986.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">2006 – persons
who had our hardboard siding installed from 1987 to
1993.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">2009 – persons
who had our hardboard siding installed from 1994 to
1999.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>Status.</b> Total claims paid through June 30,
2009, were $113 million. The reserve for future claim payments was
$5 million as of June 30, 2009. We have recovered a total of
$52 million through negotiated settlements with our insurance
carriers.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">We have no litigation pending with any persons or entities
that have opted out of the class. However, it is possible that
persons or entities that have opted out may file claims in the
future.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">We believe our reserve balance is adequate. However,
determining reserves required to fund any future claims involves
judgments and projections of future claims rates and amounts. At
this time, we are unable to estimate the amount of additional
charges – if any – we may need for these claims in the
future.</font></p>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>Claims Activity and Average Damage Award
Paid</b></font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
 </p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="52%"></td>
<td valign="bottom" width="12%"></td>
<td></td>
<td></td>
<td valign="bottom" width="12%"></td>
<td></td>
<td></td>
<td valign="bottom" width="12%"></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="2"><font face="ARIAL" size=
"1"><b>YEAR-TO-DATE ENDED</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="2"><font face="ARIAL" size=
"1"><b>YEAR ENDED</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="2"><font face="ARIAL" size=
"1"><b>YEAR ENDED</b></font></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="2"><font face="ARIAL" size=
"1"><b>JUNE 30, 2009</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="2"><font face="ARIAL" size=
"1"><b>DECEMBER 31, 2008</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="2"><font face="ARIAL" size=
"1"><b>DECEMBER 30, 2007</b></font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Number of claims filed during the period</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">1,055</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">1,755</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">1,460</font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Number of claims resolved</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">810</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">1,410</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">1,980</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top" nowrap="nowrap">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Number of claims unresolved at end of period</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">1,555</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">1,310</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">965</font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Number of damage awards paid</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">615</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">1,070</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">1,200</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Average damage award paid</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">1,400</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">1,574</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">2,100</font></td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>Events and Claims</b>. Here is a chronology of the
settlement:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">2000 – We entered
into a nationwide settlement of hardboard siding class action cases
and recognized a $130 million pretax charge to cover the estimated
cost of the settlement and related claims.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">2001 – We
reassessed the adequacy of our reserve and increased it by $43
million.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">2003 – The right
to file claims from the first six-year period (1981-1986)
expired.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">2004 – We reduced
our reserve by $20 million based on actual claims and
litigation.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">2006 – The right
to file claims from the second six-year period (1987-1993)
expired.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">2006 – We reduced
our reserve by another $23 million based on actual claims and
litigation.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">2008 – We reduced
our reserve by $13 million based on actual claims and
litigation.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b><i>Alder Antitrust Litigation</i></b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">A class action lawsuit – filed against us in 2004 in
U.S. District Court in Oregon – claims:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">Weyerhaeuser had an
alleged monopoly on the alleged alder sawlog market in the Pacific
Northwest.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">Because of that alleged
monopoly, we also were able to have a monopoly on or control the
alleged market for finished alder in the Pacific
Northwest.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">We charged monopoly
prices for finished alder lumber in the Pacific
Northwest.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>Status</b>. In April 2008, a jury found in favor of the
class and imposed trebled damages of $84 million. In first quarter
2009, we reached an agreement to settle the case and established a
reserve of $20 million. The settlement will not be final until
approved by the District Court. The Court scheduled a fairness
hearing on the Agreement for August 10, 2009. Proceedings in
this matter that are not related to the settlement have been
suspended.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">Sales during the class period to persons or entities
opting out of the class were approximately $100 million. There have
been no claims by persons or entities opting out of the class.
However, it is possible that entities or persons who have opted out
of the class may file lawsuits against us in the future. We have
not established a reserve for the possibility of opt-out lawsuits.
We also are unable to estimate at this time the amount of charges
– if any – that may be required in the
future.</font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>Events and Rulings</b>. Here is a chronology of the
litigation:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">2004 –The Alder
class action antitrust lawsuit was filed against us in U.S.
District Court in Oregon.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">2004 – The judge
issued an order certifying the plaintiff as class representative
for all U.S. purchasers of finished alder lumber between
April 28, 2000, and March 31, 2004, for purpose of
awarding monetary damages.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">2005 – Class
counsel notified the court that 5 percent of the class members
opted out of the class action lawsuit.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">2007 – The U.S.
District Court in Oregon granted the plaintiffs’ motion to
file a second amended complaint, extended the claims period to
December 31, 2006, and scheduled trial on the matter for April
2008.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">2007 – The U.S.
District Court in Oregon denied our motion to decertify the
class.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">2007 – The U.S.
District Court in Oregon granted plaintiffs’ request to file
a third amended complaint, which eliminated all allegations of
overbidding and overbuying of alder sawlogs as a mechanism to
affect the price of alder lumber.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">2007 – We filed a
motion for summary judgment with the U.S. District
Court.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">2008 – The U.S.
District Court denied our motion for summary judgment. The trial
commenced April 15, 2008. A verdict was delivered against us
on April 28, 2008. The amount of the verdict with trebling is
$84 million. Post-trial motions were briefed and argued to the
court.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">2009 – In the
first quarter of 2009, we reached an agreement to settle the case
and established a reserve of $20 million. The settlement will not
be final until approved by the District Court. The Court scheduled
a fairness hearing on the settlement for August 10, 2009.
Proceedings in this matter that are not related to the settlement
have been suspended.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>ENVIRONMENTAL MATTERS</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">The issues we have concerning environmental matters
are:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">site remediation
and</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">asbestos
removal.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><i>Site Remediation</i></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">Under the Comprehensive Environmental Response
Compensation and Liability Act – commonly known as the
Superfund – and similar state laws, we:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">are a party to various
proceedings related to the cleanup of hazardous waste sites
and</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">have been notified that
we may be a potentially responsible party related to the cleanup of
other hazardous waste sites for which proceedings have not yet been
initiated.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>Our Established Reserves</b>. We have established
reserves for estimated remediation costs on the active Superfund
sites and other sites for which we are responsible.</font></p>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>Changes in the Reserve for Environmental
Remediation</b></font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
 </p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="96%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap" colspan="4">
<p style="WIDTH: 126pt; BORDER-BOTTOM: #000000 1px solid">
<font face="ARIAL" size="1"><b>DOLLAR AMOUNTS IN
MILLIONS</b></font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Reserve balance as of December 31, 2008</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">37</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Reserve charges and adjustments, net</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(3</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Payments</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(2</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2"><b>Reserve balance as of June 30, 2009</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>32</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2"><b>Total active sites as of June 30,
2009</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>55</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">The changes in our reserves for remediation costs
reflect:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">new information on all
sites concerning implementation of remediation
alternatives,</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">updates on prior cost
estimates and new sites and</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">costs incurred to
remediate sites.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>Estimates.</b> We believe it is reasonably possible
– based on currently available information and analysis
– that remediation costs for all identified sites may exceed
our reserves by up to $36 million.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">That estimate – in which those additional costs may
be incurred over several years – is the upper end of the
range of reasonably possible additional costs. The
estimate:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">is much less certain
than the estimates on which our accruals currently are based
and</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">uses assumptions that
are less favorable to us among the range of reasonably possible
outcomes.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">In estimating our current accruals and the possible range
of additional future costs, we:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">assumed we will not
bear the entire cost of remediation of every site,</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">took into account the
ability of other potentially responsible parties to participate
and</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">considered each
party’s financial condition and probable contribution on a
per-site basis.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">We have not recorded any amounts for potential recoveries
from insurance carriers.</font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b><i>Asbestos Removal</i></b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">We have not recognized a liability for the removal and
disposal of encapsulated asbestos from all facilities and
equipment. That is because we cannot reasonably determine the
settlement dates needed to estimate the fair value of our
obligations.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">When we reasonably are able to estimate the fair value, we
will establish a liability under FASB Interpretation No. 47,
<i>Accounting for Conditional Asset Retirement Obligations –
an Interpretation of FASB Statement No. 143.</i></font></p>
</div>
0.50
<div>
<h5 align="left"></h5>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>NOTE 14: COMPREHENSIVE INCOME (LOSS)</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">Our comprehensive loss attributable to Weyerhaeuser common
shareholders, net of tax, was $85 million for second quarter 2009
and $521 million year-to-date 2009.</font></p>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>Items Included in Our Comprehensive Income
(Loss)</b></font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
 </p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="68%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="6"><font face="ARIAL" size="1"><b>QUARTER
ENDED</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="6"><font face="ARIAL" size=
"1"><b>YEAR-TO-DATE ENDED</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap">
<p style="WIDTH: 126pt; BORDER-BOTTOM: #000000 1px solid">
<font face="ARIAL" size=
"1"><b>DOLLAR AMOUNTS IN MILLIONS</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>JUNE 30,</b></font><br />
<font face="ARIAL" size="1"><b>2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>JUNE 29,</b></font><br />
<font face="ARIAL" size="1"><b>2008</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>JUNE 30,</b></font><br />
<font face="ARIAL" size="1"><b>2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>JUNE 29,</b></font><br />
<font face="ARIAL" size="1"><b>2008</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Consolidated net loss</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(116</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(149</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(382</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(303</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Other comprehensive income (loss):</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Foreign currency translation adjustments</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">54</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">14</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">32</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(34</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Actuarial net gains (losses), net of tax</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(20</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">27</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(175</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">26</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Prior service credits (costs), net of tax</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(14</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">163</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(8</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">168</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Net derivative gains on cash flow hedges, net of
tax</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">4</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">21</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Reclassification of net gains on cash flow hedges, net of
tax</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(4</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(1</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(7</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Unrealized gains (losses) on available-for-sale
securities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">1</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">1</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(1</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Total other comprehensive income (loss)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">21</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">204</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(151</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">173</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Total comprehensive income (loss)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(95</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">55</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(533</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(130</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Less: Comprehensive loss attributable to noncontrolling
interests</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">10</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">53</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">12</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">59</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2"><b>Comprehensive income (loss) attributable to
Weyerhaeuser common shareholders</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>(85</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>108</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>(521</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>(71</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>) </b></font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">The net actuarial loss recognized in first half 2009
reflects a change in the estimated fair value of pension plan
assets as of December 31, 2008. As discussed in “Note
13: Pension and Other Postretirement Benefit Plans,” we
recorded adjustments to the net funded status of our pension plans
in first half 2009.</font></p>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>Cumulative Other Comprehensive Loss</b></font></p>
<p style=
"MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; TEXT-INDENT: -2%">
<font face="ARIAL" size="2">Our cumulative other comprehensive
loss, net of tax, was $646 million as of June 30,
2009.</font></p>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>Items Included in Our Cumulative Other Comprehensive
Loss</b></font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
 </p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="80%"></td>
<td valign="bottom" width="7%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="7%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap">
<p style="WIDTH: 126pt; BORDER-BOTTOM: #000000 1px solid">
<font face="ARIAL" size="1"><b>DOLLAR AMOUNTS IN
MILLIONS</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>JUNE 30,<br />
2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>DECEMBER 31,<br />
2008</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Foreign currency translation adjustments</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">330</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">298</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Net pension and other postretirement benefit loss not yet
recognized in earnings, net of tax</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(1,069</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(894</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Prior service credit not yet recognized in earnings, net
of tax</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">91</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">99</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Cash flow hedge fair value adjustments, net of
tax</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">1</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Unrealized gains on available-for-sale
securities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">2</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">1</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2"><b>Total cumulative other comprehensive
loss</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>(646</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>(495</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>) </b></font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
</tbody>
</table>
</div>
165000000
3058000000
<div>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"></p>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>NOTE 8: REAL ESTATE ASSET IMPAIRMENTS AND OTHER RELATED
CHARGES</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">We review homebuilding long-lived assets and investments
for impairment whenever events or changes in circumstances indicate
that the carrying amount of the assets may not be recoverable.
These assets are stated at cost unless events or circumstances
trigger an impairment review. If a triggering event occurs and the
asset’s carrying amount is not recoverable, we record an
impairment loss, which is the difference between the asset’s
book value and fair value. The determination of fair value is based
on appraisals and market pricing of comparable assets when that
information is available, or the discounted value of estimated
future net cash flows from these assets.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">During 2008 and 2009, unfavorable market conditions caused
us to re-evaluate our strategy to develop certain projects, reduce
sales prices, and increase customer incentives. The recoverability
of our investments was reassessed, which triggered impairment
charges. Write downs of impaired assets are recorded as adjustments
to the cost basis of inventory and investments.</font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>Total Real Estate Impairment and Other
Investment-Related Charges</b></font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
 </p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="69%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="5"><font face="ARIAL" size=
"1"><b>QUARTER ENDED</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="5"><font face="ARIAL" size=
"1"><b>YEAR-TO-DATE ENDED</b></font></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap">
<p style="WIDTH: 126pt; BORDER-BOTTOM: #000000 1px solid">
<font face="ARIAL" size=
"1"><b>DOLLAR AMOUNTS IN MILLIONS</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="2"><font face="ARIAL" size=
"1"><b>JUNE 30,</b></font><br />
<font face="ARIAL" size="1"><b>2009</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="2"><font face="ARIAL" size=
"1"><b>JUNE 29,</b></font><br />
<font face="ARIAL" size="1"><b>2008</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="2"><font face="ARIAL" size=
"1"><b>JUNE 30,</b></font><br />
<font face="ARIAL" size="1"><b>2009</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="2"><font face="ARIAL" size=
"1"><b>JUNE 29,</b></font><br />
<font face="ARIAL" size="1"><b>2008</b></font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Impairments of long-lived assets and other related
charges:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Charges attributable to Weyerhaeuser
shareholders:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 5em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Real estate impairments</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">34</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">246</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">49</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">279</font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 5em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Write-off of pre-acquisition costs</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">11</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">8</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">35</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">12</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 5em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Other impairment related charges</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">3</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
</tr>
<tr>
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">45</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">254</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">87</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">291</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Charges attributable to noncontrolling
interests</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">8</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">26</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">8</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">26</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 5em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Total impairments of long-lived assets and other related
charges</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">53</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">280</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">95</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">317</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Impairments of investments and other related
charges:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Charges attributable to Weyerhaeuser
shareholders</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">5</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">57</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">29</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">75</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Charges attributable to noncontrolling
interests</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">1</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">27</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">3</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">32</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 5em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Total impairments of investments and other related
charges</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">6</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">84</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">32</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">107</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2"><b>Total Real Estate impairments and other related
charges</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>59</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>364</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>127</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>424</b></font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">The write-off of pre-acquisition costs primarily relates
to forfeited deposits on options to purchase land. The charge for
second quarter 2009 includes the forfeiture of deposits on four
projects that were planned for development of approximately 930
residential lots. As of June 30, 2009, we control
approximately 65,000 lots under option.</font></p>
<p style=
"MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; TEXT-INDENT: -2%">
<font face="ARIAL" size="2">Impairments of investments and other
related charges relate to loans and investments in unconsolidated
entities.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">In addition to the Real Estate charges included above,
Forest Products has recorded charges for the impairment of interest
that previously was capitalized on Real Estate assets of $5 million
in second quarter 2008 and $1 million and $28 million during the
year-to-date periods ended June 30, 2009, and June 29,
2008, respectively. These charges are classified as Forest Products
charges for asset impairments in the accompanying Consolidated
Statement of Earnings.</font></p>
<p style=
"MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; TEXT-INDENT: -2%">
<font face="ARIAL" size="2">Given the current economic environment
we reviewed:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">65 out of 124 real
estate projects for recoverability, of which 17 were impaired in
second quarter 2009; and</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">one investment in
unconsolidated entities which was impaired in second quarter
2009.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">Additional fair value information related to the Real
Estate assets that were impaired in second quarter 2009 is provided
in the following table:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
 </p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="35%"></td>
<td valign="bottom" width="11%"></td>
<td></td>
<td></td>
<td valign="bottom" width="11%"></td>
<td></td>
<td></td>
<td valign="bottom" width="11%"></td>
<td></td>
<td></td>
<td valign="bottom" width="11%"></td>
<td></td>
<td></td>
<td valign="bottom" width="11%"></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="2"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="8"><font face="ARIAL" size="1"><b>Fair Value
Measurements Using</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="2"><font size="1"> </font></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap">
<p style="WIDTH: 126pt; BORDER-BOTTOM: #000000 1px solid">
<font face="ARIAL" size=
"1"><b>DOLLAR AMOUNTS IN MILLIONS</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>Impaired Book<br />
Values at</b></font><br />
<font face="ARIAL" size="1"><b>June 30, 2009</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>Quoted Prices<br />
in Active<br />
Markets for<br />
Identical<br />
Assets</b></font><br />
<font face="ARIAL" size="1"><b>(Level 1)</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>Significant Other<br />
Observable</b></font><br />
<font face="ARIAL" size="1"><b>Inputs</b></font><br />
<font face="ARIAL" size="1"><b>(Level 2)</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>Significant Unobservable<br />
Inputs</b></font><br />
<font face="ARIAL" size="1"><b>(Level 3)</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size="1"><b>Total<br />
Impairment<br />
Charges in<br />
Second Quarter<br />
2009</b></font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Real estate held for development</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">73</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">40</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">33</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">34</font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Investment in loans and unconsolidated entities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">1</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">1</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">5</font></td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">The significant unobservable inputs (Level 3) reported
above are discounted future cash flows of the projects and
investments. We use present value techniques based on discounting
the estimated cash flows at a rate commensurate with the inherent
risks associated with the assets and related estimated cash flow
streams. Discount rates applied to the estimated future cash flows
of our homebuilding assets in second quarter 2009 ranged from 12
percent to 21 percent. See “Critical Accounting
Policies” in Management’s Discussion and Analysis for
additional information regarding our evaluation of real estate
impairments.</font></p>
</div>
<div>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"></p>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>NOTE 5: SHARE-BASED COMPENSATION</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">In first half 2009, we granted 1,504,850 stock options,
94,850 stock appreciation rights and 238,344 restricted stock
units. In addition, 193,582 outstanding restricted stock unit
awards vested during first half 2009, resulting in the issuance of
134,174 shares of common stock.</font></p>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>STOCK OPTIONS</b></font></p>
<p style=
"MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; TEXT-INDENT: -2%">
<font face="ARIAL" size="2">Most of the stock options were granted
with the following standard vesting and post-termination vesting
terms:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">options vest ratably
over 4 years;</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">options either vest or
continue to vest in the event of death, disability, retirement or
involuntary termination and</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">options must be
exercised within 10 years of the grant date.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">In addition, we granted 295,600 stock options to certain
executives with the following vesting terms and post-termination
provisions:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">options vest at the end
of a 4-year required service period;</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">options fully or
partially vest in the event of death, disability or involuntary
termination; and</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">unvested options will
be forfeited in the event of retirement.</font></p>
</td>
</tr>
</tbody>
</table>
<p style=
"MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; TEXT-INDENT: -2%">
<font face="ARIAL" size="2">The weighted average exercise price of
all of the stock options granted in first half 2009 was
$25.29.</font></p>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>Weighted Average Assumptions Used in Estimating the
Value of Stock Options Granted in First Half 2009</b></font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
 </p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="68%"></td>
<td valign="bottom" width="14%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="14%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="2"><font face="ARIAL" size=
"1"><b>10-YEAR STANDARD<br />
OPTIONS</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="2"><font face="ARIAL" size=
"1"><b>10-YEAR EXECUTIVE<br />
OPTIONS</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Expected volatility</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">36.61</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">% </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">36.51</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">% </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Expected dividends</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">3.95</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">% </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">3.95</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">% </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Expected term (in years)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">6.16</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">7.08</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Risk-free rate</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">2.54</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">% </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">2.75</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">% </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Weighted average grant date fair value</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">6.50</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">6.69</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style=
"MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; TEXT-INDENT: -2%">
<font face="ARIAL" size="2"><b>STOCK APPRECIATION
RIGHTS</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">Stock appreciation rights represent liability-classified
awards that are remeasured to reflect the fair value at each
reporting period. The following table shows the weighted average
assumptions applied to all outstanding stock appreciation rights as
of June 30, 2009.</font></p>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>Weighted Average Assumptions Used to Remeasure the
Value of Stock Appreciation Rights as of June 30,
2009</b></font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
 </p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="93%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>June 30,<br />
2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Expected volatility</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">43.89</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">% </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Expected dividends</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">3.29</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">% </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Expected term (in years)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">4.15</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Risk-free rate</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">2.19</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">% </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Weighted average fair value</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">3.52</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style=
"MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; TEXT-INDENT: -2%">
<font face="ARIAL" size="2"><b>RESTRICTED STOCK
UNITS</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">The weighted average fair value of the restricted stock
units granted in first half 2009 was $25.41. The post-termination
vesting provisions for restricted stock units granted in 2009 were
as follows:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">restricted stock units
vest ratably over 4 years; and</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">restricted stock units
will be forfeited upon termination of employment for any reason,
including retirement or involuntary termination.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font></p>
</div>
0
<div>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>NOTE 12: FAIR VALUE OF FINANCIAL
INSTRUMENTS</b></font></p>
<p style=
"MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; TEXT-INDENT: -2%">
<font face="ARIAL" size="2">The fair value of our long-term debt
was $5.4 billion as of June 30, 2009.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">The following table presents our liabilities that are not
measured at fair value on a recurring basis. The estimated fair
values and carrying values consisted of the following:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
 </p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="39%"></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="2"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="2"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="8"><font face="ARIAL" size="1"><b>Fair Value
Measurements Using</b></font></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap">
<p style="WIDTH: 126pt; BORDER-BOTTOM: #000000 1px solid">
<font face="ARIAL" size=
"1"><b>DOLLAR AMOUNTS IN MILLIONS</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>Carrying Values at</b></font><br />
<font face="ARIAL" size="1"><b>June 30, 2009</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>Fair Values at</b></font><br />
<font face="ARIAL" size=
"1"><b>June 30, 2009</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>Quoted Prices in<br />
Active Markets for<br />
Identical Assets</b></font><br />
<font face="ARIAL" size="1"><b>(Level 1)</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>Significant Other<br />
Observable Inputs</b></font><br />
<font face="ARIAL" size="1"><b>(Level 2)</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>Significant</b></font><br />
<font face="ARIAL" size="1"><b>Unobservable</b></font><br />
<font face="ARIAL" size="1"><b>Inputs</b></font><br />
<font face="ARIAL" size="1"><b>(Level 3)</b></font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Financial Liabilities:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Long-term debt (including current maturities)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 5em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Forest Products</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">5,541</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">4,937</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">4,937</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 5em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Real Estate</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">456</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">428</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">428</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style=
"MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; TEXT-INDENT: -2%">
<font face="ARIAL" size="2">To estimate the fair value of long-term
debt, we used the following valuation approaches:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">market approach –
based on quoted market prices for the same types and issues of our
debt; or</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">income approach –
based on the discounted value of the future cash flows using market
yields for the same type and comparable issues of debt.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">The inputs to the valuations of our long-term debt
instruments are based on market data obtained from independent
sources or information derived principally from observable market
data.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">The difference between the fair value and the carrying
value represents the theoretical net premium or discount we would
pay or receive to retire all debt at the measurement
date.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">We believe that our other financial instruments, including
cash, short-term investments, receivables, and payables, have net
carrying values that approximate their fair values with only
insignificant differences. This is primarily due to:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">the short-term nature
of these instruments,</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">carrying short-term
investments at expected net realizable value and</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">the allowance for
doubtful accounts.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">We also have long-term investments that are classified as
available-for-sale securities. These securities’ carrying
values equal their fair values according to Statement of Financial
Accounting Standard No. 115, <i>Accounting for Certain
Investments in Debt and Equity Securities</i>.</font></p>
</div>
17000000
0
-208000000
63000000
-254000000
-211000000
56000000
-34000000
-11000000
218000000
213000000
<div>
<h5 align="left"></h5>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>NOTE 10: INVENTORIES</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">Forest Products inventories include raw materials,
work-in-process and finished goods.</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
 </p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="80%"></td>
<td valign="bottom" width="7%"></td>
<td></td>
<td></td>
<td valign="bottom" width="7%"></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap">
<p style="WIDTH: 126pt; BORDER-BOTTOM: #000000 1px solid">
<font face="ARIAL" size="1"><b>DOLLAR AMOUNTS IN
MILLIONS</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>JUNE 30,<br />
2009</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>DECEMBER 31,<br />
2008</b></font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Logs and chips</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">39</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">63</font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Lumber, plywood, panels and engineered lumber</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">167</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">260</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Pulp and paperboard</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">108</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">126</font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Other products</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">74</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">103</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Materials and supplies</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">142</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">150</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2"><b>Total inventories</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>530</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>702</b></font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
</tr>
</tbody>
</table>
</div>
-164000000
-74000000
-310000000
-370000000
-392000000
<div>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px" align="center"></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>NOTE 1: BASIS OF PRESENTATION</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">Our consolidated financial statements provide an overall
view of our results and financial condition. They include our
accounts and the accounts of entities we control,
including:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">majority-owned domestic
and foreign subsidiaries and</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">variable interest
entities in which we are the primary beneficiary.</font></p>
</td>
</tr>
</tbody>
</table>
<p style=
"MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; TEXT-INDENT: -2%">
<font face="ARIAL" size="2">They do not include our intercompany
transactions and accounts, which are eliminated.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">We account for investments in and advances to
unconsolidated equity affiliates using the equity method, with
taxes provided on undistributed earnings. This means that we record
earnings and accrue taxes in the period earnings are recognized by
our unconsolidated equity affiliates.</font></p>
<p style=
"MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; TEXT-INDENT: -2%">
<font face="ARIAL" size="2">We report our financial results and
condition in two groups:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">Forest Products –
our forest products-based operations, principally the growing and
harvesting of timber, the manufacture, distribution and sale of
forest products and corporate governance activities; and</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">Real Estate – our
real estate development and construction operations.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">Throughout these Notes to Consolidated Financial
Statements, unless specified otherwise, references to
“Weyerhaeuser,” “we” and “our”
refer to the consolidated company, including both Forest Products
and Real Estate.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">In December 2008, our board of directors amended our
bylaws to adopt a December 31 fiscal year-end. Previously we
reported results on a fiscal calendar ending the last Sunday of the
calendar year. Second quarter 2008 ended June 29, 2008, and
included 91 days. Year-to-date 2008 included 182 days. Beginning in
2009, we report our results on a calendar quarter. Second quarter
2009 ended June 30, 2009, and included 91 days. Year-to-date
2009 includes 181 days.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">The accompanying unaudited Consolidated Financial
Statements reflect all adjustments that are, in the opinion of
management, necessary for a fair presentation of our financial
position, results of operations and cash flows for the interim
periods presented. Except as otherwise disclosed in these Notes to
Consolidated Financial Statements, such adjustments are of a
normal, recurring nature. The Consolidated Financial Statements
have been prepared pursuant to the rules and regulations of the
Securities and Exchange Commission pertaining to interim financial
statements; as such certain disclosures normally provided in
accordance with accounting principles generally accepted in the
United States have been omitted. These Consolidated Financial
Statements should be read in conjunction with the Consolidated
Financial Statements and Management’s Discussion and Analysis
of Financial Condition and Results of Operations included in our
Annual Report on Form 10-K for the year ended December 31,
2008.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">The company has evaluated events and transactions through
August 7, 2009, the date these financial statements were
issued, for items that should potentially be recognized or
disclosed.</font></p>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>RECLASSIFICATIONS</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">We have reclassified certain balances and results from the
prior year for consistency with our 2009 reporting. This makes
year-to-year comparisons easier. Our reclassifications had no
effect on net earnings (loss) or Weyerhaeuser shareholders’
interest. “Note 2: Accounting Pronouncements” discusses
the noncontrolling interest presentation changes.</font></p>
</div>
-13000000
2000000
106000000
89000000
-22000000
<div>
<h5 align="left"></h5>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>NOTE 13: PENSION AND OTHER POSTRETIREMENT BENEFIT
PLANS</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">We recognized net pension and other postretirement benefit
credits of $22 million during first half 2009 and $74 million
during first half 2008. The components of net periodic benefit
credits (costs) are:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
 </p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="68%"></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="14"><font face="ARIAL" size=
"1"><b>PENSION</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="6"><font face="ARIAL" size="1"><b>QUARTER
ENDED</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="6"><font face="ARIAL" size=
"1"><b>YEAR-TO-DATE ENDED</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap">
<p style="WIDTH: 126pt; BORDER-BOTTOM: #000000 1px solid">
<font face="ARIAL" size="1"><b>DOLLAR AMOUNTS IN
MILLIONS</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>JUNE 30,<br />
2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>JUNE 29,<br />
2008</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>JUNE 30,<br />
2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>JUNE 29,<br />
2008</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Service cost</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(27</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(29</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(60</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Interest cost</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(70</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(79</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(139</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(151</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Expected return on plan assets</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">115</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">142</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">240</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">287</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Amortization of gain (loss)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(10</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">3</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(14</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">10</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Amortization of prior service costs</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(4</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(9</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(10</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(17</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Loss due to curtailment and special termination
benefits</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(24</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(1</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">)</font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(31</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(1</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">)</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2"><b>Total net periodic benefit credits</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>7</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>29</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>17</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>68</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td height="16"></td>
<td colspan="16" height="16"></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="14"><font face="ARIAL" size="1"><b>OTHER
POSTRETIREMENT BENEFITS</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="6"><font face="ARIAL" size="1"><b>QUARTER
ENDED</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="6"><font face="ARIAL" size=
"1"><b>YEAR-TO-DATE ENDED</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap">
<p style="WIDTH: 126pt; BORDER-BOTTOM: #000000 1px solid">
<font face="ARIAL" size="1"><b>DOLLAR AMOUNTS IN
MILLIONS</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>JUNE 30,<br />
2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>JUNE 29,<br />
2008</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>JUNE 30,<br />
2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>JUNE 29,<br />
2008</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Service cost</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(1</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(5</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(2</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(10</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Interest cost</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(10</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(17</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(19</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(32</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Amortization of loss</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(4</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(4</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(8</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(9</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Amortization of prior service credits</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">20</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">3</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">41</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">5</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Gain (loss) due to curtailment and special termination
benefits</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(5</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">52</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(7</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">52</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2"><b>Total net periodic benefit credits</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>29</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>5</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>6</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">The 2009 curtailment and special termination benefits are
related to involuntary terminations, due to restructuring
activities and the closure of Wood Products facilities.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">During second quarter 2008, we announced amendments to our
postretirement medical and life insurance benefit plans for U.S.
salaried employees that reduced or eliminated certain medical and
life insurance benefits that were available to both past and
present employees. These changes resulted in a $52 million
curtailment gain recognized in second quarter 2008 for full
recognition of the pre-existing prior service credit for affected
employees.</font></p>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>Fair Value of Pension Plan Assets</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">As disclosed in our Annual Report on Form 10-K for the
year ended December 31, 2008, the value reported for our
pension plan assets at the end of 2008 was estimated. Additional
information regarding the year-end values generally becomes
available to us during the first half of the following year. We
finalized the valuations of our pension plan assets during second
quarter 2009. Based on the final valuations, the year-end value of
the pension plan assets is less than the estimated values reported
as of December 31, 2008.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">Our consolidated balance sheet as of June 30, 2009,
has been adjusted to reflect the net funded status of our pension
plans that would have been recorded as of December 31, 2008,
if the final valuations had been available to us as of the end of
2008. Based on this information, we recorded the following
adjustments during first half 2009:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td width="4%"><font size="1"> </font></td>
<td valign="top" align="left" width="3%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">$137 million decrease
in deferred pension and other assets;</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td width="4%"><font size="1"> </font></td>
<td valign="top" align="left" width="3%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">$149 million increase
in deferred pension, other postretirement benefits and other
liabilities;</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td width="4%"><font size="1"> </font></td>
<td valign="top" align="left" width="3%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">$103 million decrease
in the liability for deferred income taxes; and</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td width="4%"><font size="1"> </font></td>
<td valign="top" align="left" width="3%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">$183 million net
increase in cumulative other comprehensive loss, which resulted in
a reduction in total Weyerhaeuser shareholders’
interest.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>Receivables From Pension Trust</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">During 2008 and first quarter 2009, we provided short-term
liquidity to the U.S. pension trust through short-term loans. As of
June 30, 2009, we have total receivables from the pension
trust of $285 million. These short-term loans have been renewed by
the company for an additional six-months. These loans do not affect
the net funded status of the pension plans and therefore do not
change any of the estimated balance sheet effects discussed
above.</font></p>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>Expected Pension Funding</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">At the end of 2008, we reported that we expected to be
required to contribute up to $100 million to at least one of our
U.S. qualified pension plans for the 2009 plan year. The
contribution would have been required to be funded by
September 15, 2010. Based on revised requirements released
from the Internal Revenue Service in March 2009, we are no
longer required to make any contributions to our U.S. qualified
pension plans in 2010 for the 2009 plan year.</font></p>
<p style=
"MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; TEXT-INDENT: -2%">
<font face="ARIAL" size="2">In addition, during 2009:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">We are not required to
make any contributions to our U.S. qualified pension
plans.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">We expect to contribute
approximately $19 million to our U.S. nonqualified pension
plans.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">We are required to
contribute approximately $7 million to our Canadian pension plans
(registered and nonregistered) in accordance with the minimum
funding rules of the respective provincial regulations. In
addition, we chose to make additional contributions of
approximately $10 million to our largest registered plan during
second quarter 2009.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">We expect to contribute
approximately $64 million to our U.S. and Canadian other
postretirement benefit plans.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font></p>
</div>
-3000000
0
78000000
0
19000000
2666000000
<div>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"></p>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>NOTE 2: ACCOUNTING PRONOUNCEMENTS</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>ACCOUNTING CHANGES WE IMPLEMENTED IN
2009</b></font></p>
<p style=
"MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; TEXT-INDENT: -2%">
<font face="ARIAL" size="2">We changed our accounting or
disclosures for the following in first half 2009:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">fair value measurements
for nonfinancial assets and nonfinancial liabilities,</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">noncontrolling
interests,</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">disclosures about the
fair value of financial instruments and</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">subsequent
events.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>Fair Value Measurements for Nonfinancial Assets and
Nonfinancial Liabilities</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">Statement 157 – Statement of Financial Accounting
Standards No. 157, <i>Fair Value Measurements</i> – was
adopted for financial assets and financial liabilities in first
quarter 2008. Issued by the FASB in September 2006, Statement
157:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">provides a common
definition of fair value,</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">establishes a framework
for measuring fair value in generally accepted accounting
principles and</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">expands disclosures
about fair value instruments.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">It applies when other accounting standards require or
permit fair value measurements. However, it does not require any
new fair value measurements.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">FSP FAS 157-2 – FASB Staff Position (FSP) FAS 157-2,
<i>Effective Date of FASB Statement No. 157</i> – was
adopted for nonfinancial assets and nonfinancial liabilities in
first quarter 2009. Issued in February 2008 by the FASB, FSP FAS
157-2 delayed the effective date of Statement 157 for certain
nonfinancial assets and nonfinancial liabilities. As a result of
adopting FSP FAS 157-2, Statement 157 was applicable for the
following nonfinancial assets and nonfinancial liabilities
beginning in first quarter 2009:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">long-lived assets
(asset groups) measured at fair value for an impairment
assessment,</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">reporting units
measured at fair value in the first step of a goodwill impairment
test,</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">nonfinancial assets and
nonfinancial liabilities measured at fair value in the second step
of a goodwill impairment assessment and</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">asset retirement
obligations initially measured at fair value.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">Statement 157 includes a fair value hierarchy that is
intended to increase consistency and comparability in fair value
measurements and related disclosures. The fair value hierarchy is
based on inputs to valuation techniques that are used to measure
fair value that are either observable or unobservable. Observable
inputs reflect assumptions market participants would use in pricing
an asset or liability based on market data obtained from
independent sources while unobservable inputs reflect a reporting
entity’s pricing based upon their own market
assumptions.</font></p>
<p style=
"MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; TEXT-INDENT: -2%">
<font face="ARIAL" size="2">The fair value hierarchy consists of
the following three levels:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">Level 1 – Inputs
are quoted prices in active markets for identical assets or
liabilities.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">Level 2 – Inputs
are:</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td width="4%"><font size="1"> </font></td>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">quoted prices for
similar assets or liabilities in an active market,</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td width="4%"><font size="1"> </font></td>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">quoted prices for
identical or similar assets or liabilities in markets that are not
active and</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td width="4%"><font size="1"> </font></td>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">inputs other than
quoted prices that are observable and market-corroborated inputs
which are derived principally from or corroborated by observable
market data.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">Level 3 – Inputs
are derived from valuation techniques in which one or more
significant inputs or value drivers are unobservable.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">The adoption of FSP FAS 157-2 resulted in additional
disclosure in “Note 8 – Real Estate Impairments and
Other Related Charges.” It did not have a material effect on
our financial position, results of operations or cash
flows.</font></p>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>Noncontrolling Interests</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">Statement 160 – Statement of Financial Accounting
Standards No. 160, <i>Noncontrolling Interests in Consolidated
Financial Statements – An Amendment of ARB No. 51</i>
– was adopted in first quarter 2009. Issued in December 2007,
Statement 160:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">changes the accounting
for noncontrolling (minority) interests in consolidated financial
statements,</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">requires noncontrolling
interests to be presented as a separate component of
equity,</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">changes the income
statement presentation of net income or losses to include results
attributable to noncontrolling interests and</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">revises the accounting
for both increases and decreases in a parent’s controlling
ownership interest.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">The adoption of Statement 160 did not have a material
effect on our financial position, results of operations or cash
flows, but resulted in presentation changes to our consolidated
financial statements. It requires consolidated net income (loss) to
include the amounts attributable to both the parent and
noncontrolling interests, with disclosure on the face of the
consolidated statement of earnings of the amount attributable to
both the parent and to the noncontrolling interests.</font></p>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>Disclosures about Fair Value of Financial
Instruments</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">FSP FAS 107-1 and APB 28-1 – Financial Accounting
Standards Board (FASB) Staff Position FAS 107 -1 and APB 28-1
– <i>Interim Disclosures about Fair Value of Financial
Instruments</i> – was adopted in second quarter 2009. Issued
by the FASB in April 2009, FSP FAS 107-1 and APB 28-1 amends FASB
Statement No.107, <i>Disclosures about Fair Value of Financial
Instruments,</i> to require disclosures about fair value of
financial instruments for interim reporting periods as well as in
annual financial statements.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">The adoption of FSP FAS 107-1 and APB 28-1 resulted in
additional disclosure in “Note 12 – Fair Value of
Financial Instruments.” It did not have a material effect on
our financial position, results of operations or cash
flows.</font></p>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>Subsequent Events</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">Statement 165 – Statement of Financial Accounting
Standard No. 165, <i>Subsequent Events</i> – was adopted
in second quarter 2009. Issued by the FASB in May 2009, Statement
165:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">incorporates accounting
and disclosure requirements related to subsequent events into U.S.
GAAP,</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">requires evaluation of
subsequent events through the date financial statements are
“issued” or “available to be
issued,”</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">refers to the types of
subsequent events as either “recognized subsequent
events” or “nonrecognized subsequent events,”
and</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">requires disclosure of
the date subsequent events are evaluated through.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">The adoption of Statement 165 resulted in additional
disclosure in “Note 1 – Basis of Presentation”.
It did not have a material effect on our financial position,
results of operations or cash flows.</font></p>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>ACCOUNTING CHANGES THAT TAKE EFFECT IN THE
FUTURE</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>Disclosures about Postretirement Benefit Plan
Assets</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">FSP FAS 132(R)-1 – FASB Staff Position FAS
No. 132(R)-1 – <i>Employers’ Disclosures about
Postretirement Benefit Plan Assets</i> – takes effect in
fourth quarter 2009. Issued by the FASB in December 2008, FSP FAS
132(R) -1 requires:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">qualitative disclosures
about how pension investment allocation decisions are
made;</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">disclosures about the
major categories of plan assets and concentrations of risk;
and</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">disclosures about fair
value measurements, including the methods and inputs used to
measure the fair value of plan assets.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">We are currently evaluating the effect that the adoption
of FSP FAS 132(R) -1 will have on our financial statement
disclosures.</font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>Variable Interest Entities</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">Statement 167 – Statement of Financial Accounting
Standards No. 167, <i>Amendments to FASB Interpretation
No. 46(R)</i> – takes effect in first quarter 2010.
Issued by the FASB in June 2009, Statement 167 amends existing
consolidation guidance over variable interest entities (VIE)
contained in FASB Interpretation No. 46R, <i>Consolidation of
Variable Interest Entities (revised December 2003) – an
interpretation of ARB No. 51</i> (FIN 46R). Statement
167:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">changes the required
approach for identifying the primary beneficiary of a VIE by
replacing the quantitative-based risks and rewards calculation with
a qualitative approach that focuses on identifying who has the
power to direct activities that significantly affect the
entity’s economic performance,</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">requires the
determination of whether an entity is a VIE to be reconsidered when
changes in facts and circumstances occur that effectively result in
equity holders as a group losing the ability to direct the
activities that significantly affect the entity’s economic
performance,</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">requires ongoing
assessment of whether an enterprise is the primary beneficiary of a
VIE and</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">requires additional
disclosures about involvement with a VIE.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">We are currently evaluating the effect that the adoption
of Statement 167 will have on our financial position, results of
operations and cash flows.</font></p>
</div>
<div>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>NOTE 7: OTHER OPERATING INCOME, NET</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">Other operating income, net:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">exclude our Real Estate
operations,</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">include both recurring
and occasional income and expense items and</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">can fluctuate from year
to year.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>Various Income and Expense Items Included in Forest
Products Other Operating Income, Net</b></font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
 </p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="68%"></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="6"><font face="ARIAL" size=
"1"><b>QUARTER ENDED</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="6"><font face="ARIAL" size=
"1"><b>YEAR-TO-DATE ENDED</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap">
<p style="WIDTH: 126pt; BORDER-BOTTOM: #000000 1px solid">
<font face="ARIAL" size=
"1"><b>DOLLAR AMOUNTS IN MILLIONS</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="2"><font face="ARIAL" size=
"1"><b>JUNE 30,</b></font><br />
<font face="ARIAL" size="1"><b>2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="2"><font face="ARIAL" size=
"1"><b>JUNE 29,</b></font><br />
<font face="ARIAL" size="1"><b>2008</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="2"><font face="ARIAL" size=
"1"><b>JUNE 30,</b></font><br />
<font face="ARIAL" size="1"><b>2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="2"><font face="ARIAL" size=
"1"><b>JUNE 29,</b></font><br />
<font face="ARIAL" size="1"><b>2008</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Foreign exchange (gain) loss</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(21</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(3</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(17</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">8</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Gain on disposal of assets</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(21</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(16</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(23</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(20</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Insurance recoveries</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(11</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(13</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(6</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Litigation (reimbursements) expense, net</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(9</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">16</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">9</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">36</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Land management income</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(5</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(4</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(9</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(9</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Environmental remediation reserve adjustment</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">17</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Gain on change in post-retirement benefits</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(52</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(52</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Other, net</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(10</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(9</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(18</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(16</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(77</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(68</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(71</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(42</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Less: discontinued operations</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(28</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(41</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2"><b>Total other operating income, net</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>(77</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>(40</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>(71</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>(1</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>) </b></font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">Foreign exchange (gains) losses result from changes in
exchange rates primarily related to Weyerhaeuser’s Canadian
operations.</font></p>
</div>
<div>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b><font size="+0">NOTE 16: BUSINESS
SEGMENTS</font></b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">We are principally engaged in the growing and harvesting
of timber; the manufacture, distribution and sale of forest
products; and real estate development and construction. Our
principal business segments are:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
<font size="+0"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">Timberlands –
which includes logs; chips; timber; minerals, oil, gas; and
international wood products;</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
<font size="+0"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">Wood Products –
which includes softwood lumber, engineered lumber, structural
panels, hardwood lumber and building materials
distribution;</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
<font size="+0"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">Cellulose Fibers
– which includes pulp, liquid packaging board and an equity
interest in a newsprint joint venture;</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
<font size="+0"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">Real Estate –
which includes real estate development, construction and sales;
and</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
<font size="+0"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">Corporate and Other
– which includes governance-related corporate support
activities, transportation and results of international operations
outside of North America that have been sold. We also may record
gains or charges in the Corporate and Other segment related to
dispositions or events that are not related to an individual
operating segment.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">In addition, in 2008 we had Containerboard, Packaging and
Recycling operations. These operations were sold to International
Paper in August 2008.</font></p>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>KEY FINANCIAL DATA BY BUSINESS SEGMENT</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">Effective with third quarter 2008, our recurring
postretirement credits (costs) are no longer being allocated to the
Forest Products segments. These credits (costs) are reported in the
Corporate and Other segment with the exception of certain
union-negotiated postretirement benefits that are reflected in the
Cellulose Fibers segment. Net recurring forest products pension
credits were included in the Corporate and Other segment for all
periods presented. Pension and postretirement credits (costs)
related to real estate operations are reported in the Real Estate
segment. Net pension and postretirement credits (costs) related to
settlements, curtailments and special termination benefits continue
to be reported in the appropriate business segment.</font></p>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>Net Recurring Postretirement Credits (Costs) Included
in Segment Contribution to Earnings</b></font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
<font size="+0"> </font></p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="68%"></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="6"><font face="ARIAL" size=
"1"><b>QUARTER ENDED</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="6"><font face="ARIAL" size=
"1"><b>YEAR-TO-DATE ENDED</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap">
<p style="WIDTH: 126pt; BORDER-BOTTOM: #000000 1px solid">
<font face="ARIAL" size=
"1"><b>DOLLAR AMOUNTS IN MILLIONS</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="2"><font size=
"+0"><font face="ARIAL" size="1"><b>JUNE 30,</b></font><br />
<font face="ARIAL" size="1"><b>2009</b></font></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="2"><font size=
"+0"><font face="ARIAL" size="1"><b>JUNE 29,</b></font><br />
<font face="ARIAL" size="1"><b>2008</b></font></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="2"><font size=
"+0"><font face="ARIAL" size="1"><b>JUNE 30,</b></font><br />
<font face="ARIAL" size="1"><b>2009</b></font></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="2"><font size=
"+0"><font face="ARIAL" size="1"><b>JUNE 29,</b></font><br />
<font face="ARIAL" size="1"><b>2008</b></font></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Net postretirement credits (costs):</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Timberlands</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(1</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(2</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Wood Products</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(6</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(13</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Cellulose Fibers</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(2</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(3</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(3</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(6</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Real Estate</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(1</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(2</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Containerboard, Packaging and Recycling</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(5</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(10</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Corporate and Other</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">7</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(7</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">15</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(13</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2"><b>Total</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>5</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>(23</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>12</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>(46</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>) </b></font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font></p>
<!-- 1 Body_Start * DO NOT REMOVE OR EDIT -->
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">An analysis and reconciliation of the company’s
business segment information to the respective information in the
Consolidated Financial Statements is as follows:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
<font size="+0"> </font></p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="68%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="6"><font face="ARIAL" size=
"1"><b>QUARTER ENDED</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="6"><font face="ARIAL" size=
"1"><b>YEAR-TO-DATE ENDED</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap">
<p style="WIDTH: 126pt; BORDER-BOTTOM: #000000 1px solid">
<font face="ARIAL" size=
"1"><b>DOLLAR AMOUNTS IN MILLIONS</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="2"><font size=
"+0"><font face="ARIAL" size="1"><b>JUNE 30,</b></font><br />
<font face="ARIAL" size="1"><b>2009</b></font></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="2"><font size=
"+0"><font face="ARIAL" size="1"><b>JUNE 29,</b></font><br />
<font face="ARIAL" size="1"><b>2008</b></font></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="2"><font size=
"+0"><font face="ARIAL" size="1"><b>JUNE 30,</b></font><br />
<font face="ARIAL" size="1"><b>2009</b></font></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="2"><font size=
"+0"><font face="ARIAL" size="1"><b>JUNE 29,</b></font><br />
<font face="ARIAL" size="1"><b>2008</b></font></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Sales to and revenues from unaffiliated
customers:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Timberlands</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">208</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">224</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">365</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">421</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Wood Products</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">594</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">1,071</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">1,136</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">2,037</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Cellulose Fibers</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">349</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">460</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">713</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">905</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Real Estate</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">199</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">354</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">371</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">725</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Containerboard, Packaging and Recycling</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">1,375</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">2,672</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Corporate and Other</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">41</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">126</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">81</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">243</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
</tr>
<tr>
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">1,391</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">3,610</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">2,666</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">7,003</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Less: sales of discontinued operations (Note 3)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(1,436</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(2,787</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
</tr>
<tr>
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">1,391</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">2,174</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">2,666</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">4,216</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Intersegment sales:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Timberlands</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">115</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">252</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">286</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">568</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Wood Products</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">14</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">57</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">33</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">108</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Cellulose Fibers</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">2</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">6</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Containerboard, Packaging and Recycling</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">1</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">2</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Corporate and Other</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">3</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">11</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">5</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">21</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">132</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">323</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">324</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">705</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Total sales and revenues</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">1,523</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">2,497</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">2,990</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">4,921</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Intersegment eliminations</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(132</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(323</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(324</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(705</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2"><b>Total</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>1,391</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>2,174</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>2,666</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>4,216</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Net contribution to earnings:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Timberlands</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">66</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">103</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">106</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">215</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Wood Products</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(162</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(164</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(428</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(441</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Cellulose Fibers</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">100</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">42</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">131</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">98</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Real Estate</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(50</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(337</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(146</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(411</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Containerboard, Packaging and Recycling</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">105</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">194</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Corporate and Other</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">13</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">111</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(30</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">70</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
</tr>
<tr>
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(33</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(140</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(367</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(275</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Interest expense (Forest Products only) (continuing and
discontinued operations)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(107</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(127</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(215</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(259</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Less: capitalized interest (Forest Products
only)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">2</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">21</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">4</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">45</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Loss before income taxes (continuing and discontinued
operations)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(138</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(246</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(578</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(489</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Income tax benefit (continuing and discontinued
operations)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">32</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">150</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">208</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">245</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td><font size="+0"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2"><b>Net loss attributable to Weyerhaeuser common
shareholders</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>(106</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>(96</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>(370</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>(244</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>) </b></font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font></p>
</div>
11000000
211328000
211328000
<div>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>NOTE 11: ACCRUED LIABILITIES</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">Forest Products accrued liabilities were $816 million as
of June 30, 2009. They were comprised of the following:
payroll, income taxes, Social Security taxes, real and personal
property taxes, interest and other items.</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
 </p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="80%"></td>
<td valign="bottom" width="7%"></td>
<td></td>
<td></td>
<td valign="bottom" width="7%"></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap">
<p style="WIDTH: 126pt; BORDER-BOTTOM: #000000 1px solid">
<font face="ARIAL" size="1"><b>DOLLAR AMOUNTS IN
MILLIONS</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>JUNE 30,<br />
2009</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>DECEMBER 31,<br />
2008</b></font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Payroll – wages and salaries, retirement, severance
and vacation pay</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">396</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">422</font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Income taxes</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">2</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">53</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Taxes – Social Security and real and personal
property</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">40</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">41</font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Interest</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">118</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">120</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Dividends</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">53</font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Other</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">260</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">296</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2"><b>Total accrued liabilities</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>816</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>985</b></font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
</tr>
</tbody>
</table>
</div>
3000000
0
-590000000
255000000
16000000
0
22000000
7000000
-1.75
-1.75
1000000
<div>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"></p>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>NOTE 9: RESTRUCTURING OF URUGUAY JOINT
VENTURES</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">In April 2008, we completed the process of restructuring
our ownership interests in Uruguay and partitioned the timberland
and other assets formerly owned through a joint venture. As part of
the partitioning, we contributed $23 million, net of cash acquired,
to obtain full ownership of a plywood mill formerly owned through
the joint venture. These assets and the results of their operations
were consolidated in the accompanying financial statements as of
April 2008. An estimated noncash restructuring gain of $101 million
was recorded in our Corporate and Other segment during second
quarter 2008. An additional $149 million gain was recorded in the
fourth quarter 2008 when the valuation of the partitioned assets
was finalized. There was no tax provision on the gain primarily due
to a forestry exemption from income taxes in Uruguay, and the fact
that the assets are considered indefinitely invested.</font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font></p>
</div>
0
0
0
2000000
23000000
-382000000
-12000000
-382000000
0.00
<div>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>NOTE 4: NET EARNINGS (LOSS) PER SHARE</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">Basic earnings per share is net earnings divided by the
weighted average number of our outstanding common
shares.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">Diluted earnings per share is net earnings divided by the
sum of the:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">weighted average number
of our outstanding common shares and</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">the effect of our
outstanding dilutive potential common shares.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">Dilutive potential common shares may include:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">outstanding stock
options,</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">restricted stock units
or</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">performance share
units.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">We use the treasury stock method to calculate the effect
of our outstanding dilutive potential common shares.</font></p>
<p style=
"MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; TEXT-INDENT: -2%">
<font face="ARIAL" size="2">Our basic and diluted loss per share
attributable to Weyerhaeuser common shareholders was:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">$0.50 during second
quarter and $1.75 during first half 2009, respectively;
and</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">$0.45 during second
quarter and $1.16 during first half 2008, respectively.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font></p>
<!--##PBStart##-->
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>SHARES EXCLUDED FROM DILUTIVE EFFECT</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">The following shares were not included in the computation
of diluted earnings (loss) per share for the quarters and
year-to-date periods ended June 30, 2009, and June 29,
2008, due to the company’s net loss position from continuing
operations. However, some or all of these shares may be dilutive
potential common shares in future periods.</font></p>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>Potential Shares Not Included in the Computation of
Diluted Earnings (Loss) per Share</b></font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
 </p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="68%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
</tr>
<tr>
<td valign="bottom"> <font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="3"><font face="ARIAL" size=
"1"><b>QUARTER ENDED</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="3"><font face="ARIAL" size=
"1"><b>YEAR-TO-DATE ENDED</b></font></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap">
<p style="WIDTH: 96pt; BORDER-BOTTOM: #000000 1px solid">
<font face="ARIAL" size=
"1"><b>SHARES IN THOUSANDS</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle"><font face="ARIAL" size=
"1"><b>JUNE 30,</b></font><br />
<font face="ARIAL" size="1"><b>2009</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle"><font face="ARIAL" size=
"1"><b>JUNE 29,</b></font><br />
<font face="ARIAL" size="1"><b>2008</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle"><font face="ARIAL" size=
"1"><b>JUNE 30,</b></font><br />
<font face="ARIAL" size="1"><b>2009</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle"><font face="ARIAL" size=
"1"><b>JUNE 29,</b></font><br />
<font face="ARIAL" size="1"><b>2008</b></font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Stock options</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">11,952</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">10,556</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">11,566</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">10,076</font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Performance share units</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">220</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">522</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">220</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">534</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Restricted stock units</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">685</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">811</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">678</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">729</font></td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>Share Repurchase Program</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">In December 2008, we announced a stock repurchase program
under which we are authorized to repurchase up to $250 million of
outstanding common shares. Through June 30, 2009, we had
repurchased a total of 66,691 shares of common stock for
approximately $2 million under the program. These repurchases took
place during first half 2009 and all common stock purchases under
the program were made in open-market transactions.</font></p>
</div>
<div>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>NOTE 6: CHARGES FOR FOREST PRODUCTS RESTRUCTURING,
CLOSURES AND ASSET IMPAIRMENTS</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">Actions related to the following Wood Products operations,
coupled with Corporate restructuring, resulted in the majority of
closure and restructuring charges in 2008 and first half
2009:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
 </p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="33%"></td>
<td valign="bottom" width="1%"></td>
<td width="1%"></td>
<td valign="bottom" width="1%"></td>
<td width="31%"></td>
<td valign="bottom" width="1%"></td>
<td></td>
<td valign="bottom" width="1%"></td>
<td width="31%"></td>
</tr>
<tr>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle">
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 1px" align="center">
<font face="ARIAL" size="1"><b>TYPE OF OPERATION</b></font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle">
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 1px" align="center">
<font face="ARIAL" size="1"><b>LOCATION</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle">
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 1px" align="center">
<font face="ARIAL" size="1"><b>CURRENT STATUS</b></font></p>
</td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Softwood lumber</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Aberdeen, WA                </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Permanently closed</font></td>
</tr>
<tr>
<td valign="top"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Coburg,
OR                </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Permanently closed</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Carrot River,
SK                </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Permanently closed</font></td>
</tr>
<tr>
<td valign="top"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Dallas,
OR                </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Permanently closed</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size="2">Green
Mountain,
WA                </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Permanently closed</font></td>
</tr>
<tr>
<td valign="top"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Kamloops,
BC                </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Permanently closed</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size="2">Pine
Hill,
AL                </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Indefinitely closed</font></td>
</tr>
<tr>
<td valign="top"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Taylor, LA                </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Permanently closed</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Wright City, OK                </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Indefinitely closed</font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Veneer and plywood</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Aberdeen,
WA                </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Permanently closed</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Dodson,
LA                </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Indefinitely closed</font></td>
</tr>
<tr>
<td valign="top"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Hudson Bay,
SK                </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Permanently closed</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size="2">Pine
Hill,
AL                </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Indefinitely closed</font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Engineered I-joists</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Evergreen,
AL                </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Indefinitely closed</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Valdosta,
GA                </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Indefinitely closed</font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Engineered wood products</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Colbert,
GA                </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Indefinitely closed</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Deerwood,
MN                </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Indefinitely closed</font></td>
</tr>
<tr>
<td valign="top"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Evergreen,
AL                </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Indefinitely closed</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Hazard, KY                </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Indefinitely closed</font></td>
</tr>
<tr>
<td valign="top"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Junction City,
OR                </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Indefinitely closed</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Simsboro,
LA                </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Indefinitely closed</font></td>
</tr>
<tr>
<td valign="top"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Vancouver,
BC                </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Permanently closed</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Strand technology</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Drayton Valley,
AB                </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Permanently closed</font></td>
</tr>
<tr>
<td valign="top"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Hudson Bay,
SK                </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Indefinitely closed</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Miramichi,
NB                </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Permanently closed</font></td>
</tr>
<tr>
<td valign="top"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size="2">Wawa,
ON                </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Indefinitely closed</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Hardwood lumber</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Delta,
BC                </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Permanently closed</font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Trus Joist<font face="ARIAL" size="1"><sup style=
"VERTICAL-ALIGN: baseline; BOTTOM: 0.8ex; POSITION: relative">®</sup></font>
Commercial division</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Various                </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size="2">Sale
agreement signed</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Trucking</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Albany,
OR                </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Permanently closed</font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">iLevel service centers</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size="2">7
U.S. distribution
facilities                </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">Sold</font></td>
</tr>
<tr>
<td height="5"></td>
<td colspan="2" height="5"></td>
<td colspan="2" height="5"></td>
<td colspan="2" height="5"></td>
<td colspan="2" height="5"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="top" align="right"><font face="ARIAL" size="2">9 U.S.
distribution
facilities                </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="top" align="right"><font face="ARIAL" size=
"2">Permanently closed</font></td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">We review the carrying value of our assets whenever events
or changes in circumstances indicate that the carrying value of the
assets may not be recoverable through future operations. These
events or changes in circumstances may include, but are not limited
to:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">decisions made to
curtail, close, sell or restructure operations;</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">changes in the expected
use of assets; and</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="2%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">significant or
prolonged adverse changes in financial markets and economic
conditions in markets in which we operate.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">Charges for Forest Products restructuring, closures and
asset impairments for the quarters and year-to-date periods
ended June 30, 2009, and June 29, 2008,
include:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
 </p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="71%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="5"><font face="ARIAL" size=
"1"><b>QUARTER ENDED</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="5"><font face="ARIAL" size=
"1"><b>YEAR-TO-DATE ENDED</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap">
<p style="WIDTH: 126pt; BORDER-BOTTOM: #000000 1px solid">
<font face="ARIAL" size=
"1"><b>DOLLAR AMOUNTS IN MILLIONS</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="2"><font face="ARIAL" size=
"1"><b>JUNE 30,</b></font><br />
<font face="ARIAL" size="1"><b>2009</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="2"><font face="ARIAL" size=
"1"><b>JUNE 29,</b></font><br />
<font face="ARIAL" size="1"><b>2008</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="2"><font face="ARIAL" size=
"1"><b>JUNE 30,</b></font><br />
<font face="ARIAL" size="1"><b>2009</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle" colspan="2"><font face="ARIAL" size=
"1"><b>JUNE 29,</b></font><br />
<font face="ARIAL" size="1"><b>2008</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Restructuring and closure charges:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Termination benefits</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">13</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">41</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">79</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">75</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Pension and postretirement charges</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">26</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">1</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">35</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">1</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Other restructuring and closure costs</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">7</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">4</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">14</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">9</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">46</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">46</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">128</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">85</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Less: discontinued operations</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(2</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(8</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2"><b>Charges for restructuring and closures</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>46</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>44</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>128</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>77</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td height="16"></td>
<td colspan="3" height="16"></td>
<td colspan="4" height="16"></td>
<td colspan="3" height="16"></td>
<td colspan="4" height="16"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Asset Impairments:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Long-lived assets</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">13</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">50</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">24</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">77</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Goodwill</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">2</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">3</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">5</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Other assets</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">7</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">2</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">11</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">5</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">20</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">54</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">38</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">87</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Less: discontinued operations</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(3</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(5</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2"><b>Impairment of goodwill and other assets</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>20</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>51</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>38</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>82</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">The restructuring and closure charges recognized
year-to-date 2009 are primarily related to the Wood Products
closures and curtailments listed in the above table. Corporate
restructuring activities and additional costs were recognized in
connection with previously announced facility closures. The charges
recognized year-to-date 2008, primarily include charges for
permanent closures and curtailments listed in the above table and
other costs recognized in connection with previously announced
closures.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">Long-lived asset impairment charges year-to-date 2009 were
$24 million, of which $13 million related to Wood Products
facilities and corporate assets, including capitalized interest or
impaired Real Estate projects. The fair values of the sites were
determined using significant other observable inputs (Level 2)
based on market quotes and significant other observable inputs
(Level 3) based on discounted cash flow models. The remaining $11
million relates to software costs.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">Long-lived asset impairment charges in 2008 related
primarily to capitalized interest on impaired Real Estate projects,
Wood Products facility closures and curtailments discussed
above.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">Goodwill impairment charges recognized in 2009 relate to
goodwill in our hardwoods and industrial wood products reporting
unit. Goodwill impairment charges recognized in 2008 relate to
operations in our iLevel wood products reporting unit.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">Changes in accrued termination benefits related to
restructuring and facility closures during the year-to-date period
ended June 30, 2009, were as follows:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
 </p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="95%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap" colspan="4">
<p style="WIDTH: 126pt; BORDER-BOTTOM: #000000 1px solid">
<font face="ARIAL" size="1"><b>DOLLAR AMOUNTS IN
MILLIONS</b></font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Accrued severance as of December 31, 2008</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">53</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Charges</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">79</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Payments</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(76</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Other adjustments</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">3</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2"><b>Accrued severance as of June 30,
2009</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>59</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style=
"MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; MARGIN-LEFT: 2%; TEXT-INDENT: -2%">
<font face="ARIAL" size="2">The majority of the accrued severance
balance as of June 30, 2009, is expected to be paid within one
year.</font></p>
</div>
20000000
37000000
85000000
-382000000
0
0
-543000000
-247000000
38000000
2028000000
2546000000
0
17000000
179000000
3000000
300000000
-173000000
-165000000
65000000
-30000000
-10000000
236000000
4000000
215000000
213000000
-159000000
-38000000
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iso4217:USD
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Includes cash and cash equivalents of discontinued operations.
Income taxes paid or received by Forest Products and Real Estate include intercompany payments related to income taxes. These intercompany transactions flow through the intercompany advances lines in the statement of cash flows in either operating or investing as discussed in footnote (1) above, and may differ in timing from income tax payments to or receipts from the taxing authorities. Actual income taxes paid to (received from) the taxing authorities are reflected by consolidated cash paid (received) for taxes.
Intercompany dividends, loans and advances represent payments and receipts between Forest Products and Real Estate and are classified as operating, investing or financing based on the perspective of each entity and the characteristics of the underlying cash flows. These amounts are eliminated and do not appear in the consolidated cash flows above.