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Wood Products We are one of the largest manufacturers and distributors of wood products in North America. What We Do • We provide the residential structural frame market with access to a family of high-quality softwood lumber, engineered lumber, structural panels and other specialty products. • We deliver innovative homebuilding solutions to help our customers quickly and efficiently meet their customers’ needs. • We sell our products and services primarily through our own sales organizations and distribution facilities, and we supplement our product offerings with building materials that we purchase from other manufacturers. • We sell certain of our products into the repair and remodel market through the wood preserving and home improvement warehouse channels. • We export our engineered building materials and industrial hardwood products to Europe and Asia. • We make and sell hardwood and softwood lumber and panels to manufacturers of furniture and cabinetry in more than 40 countries. • We acquire our raw materials at market price from our Timberlands business segment and from third parties. Wood Products  Where We Do It We have 71 manufacturing facilities in the U.S. and Canada. We distribute through a combination of Weyerhaeuser and third party locations. Information about the locations, capacities and actual production of our manufacturing facilities is included below. Principal Manufacturing Locations Broken out by major products, locations of our principal manufacturing facilities are: • Softwood Lumber – U.S. – Alabama, Arkansas, Louisiana, Mississippi, North Carolina, Oklahoma, Oregon and Washington – Canada – Alberta and British Columbia • Engineered Lumber – U.S. – Alabama, Georgia, Kentucky, Louisiana, Minnesota, Oregon and West Virginia – Canada – British Columbia and Ontario • Oriented Strand Board: – U.S. – Louisiana, Michigan, North Carolina and West Virginia – Canada – Alberta, New Brunswick, Ontario and Saskatchewan • Plywood and Veneer – U.S. – Alabama, Arkansas, Louisiana, Oregon and Washington – Canada – Saskatchewan • Hardwood Lumber – U.S. – Michigan, Oregon, Washington and Wisconsin – Canada – British Columbia Summary of 2007 Wood Products Capacities  Five-Year Summary of Wood Products Production(1)(2)  How Much We Sell Revenues of our Wood Products business segment come from sales to wood products dealers, do-it-yourself retailers, builders, and industrial users. We provide products and services to the residential construction market under the iLevel™ and Trus Joist™ brands. In 2007 our net sales were $5.7 billion compared with $7.9 billion in 2006. Five-Year Summary of Net Sales for Wood Products(1)(2)  Five-Year Trend for Total Net Sales in Wood Products(1)(2)  Percentage of 2007 Net Sales in Wood Products 
Wood Products Volume The volume of wood products sold in 2007 declined from 2006 primarily because of the reduction in production capacity through the sale or closure of a number of facilities and production curtailments in response to market conditions in 2006 and 2007. The sales and closures include: • the sale of our 16 Canadian distribution centers and the sale or closure of 8 U.S. distribution centers; • the sale of our Elma, Washington plywood facility; • the permanent or indefinite closures of three Canadian OSB mills and four engineered lumber mills; • the closure of our Okanagan Falls, British Columbia lumber mill; and • the closure of our Dodson, Louisiana plywood line. Five-Year Summary of Sales Volume for Wood Products(1)(2) 
Wood Products Prices Prices for wood products in 2007 declined from 2006. The following factors influence prices for wood products: • Overall demand for structural wood products used in new residential construction and the repair and remodel of existing homes affects prices. Residential construction is affected by the rate of household formation and other demographic factors, mortgage interest rates, the need for replacement of existing housing stock, and the demand for secondary or vacation homes. Repair and remodel activity is affected by the size and age of existing housing inventory. • Seasonality can affect prices, as residential construction slows during winter months and increases during spring and summer. • The availability of supply of commodity building products such as lumber and plywood affect prices. A number of factors can affect supply, including weather, raw material quality and availability, and availability of rail and truck transportation. • Proprietary-grade products and services can command higher prices. Our ability to differentiate our products and services from other manufacturers and create demand for them in the marketplace tends to generate higher prices. Five-Year Summary of Selected Published Lumber Prices – $/MBF 
Five-Year Summary of Selected Published Oriented Strand Board Prices – $/MSF 
Five-Year Summary of Selected Published Plywood Prices (1⁄2” CDX) – $/MSF 
Where We're Headed Our strategies for achieving continued success vary by business. • During 2007, we delivered on our commitment to provide products and services to the residential construction market. Our strategies for continued success include:
• In all businesses within our Wood Products segment we continue to improve or remove underperforming and nonstrategic assets from our system and focus investments on strategic goals. |