WEYERHAEUSER CO (Form: 10-Q, Received: 05/06/2011 16:23:48)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2011

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NUMBER: 1-4825

WEYERHAEUSER COMPANY


Washington		91-0470860
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

33663 Weyerhaeuser Way South Federal Way, Washington		98063-9777
(Address of principal executive offices)		(Zip Code)

(253) 924-2345

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer x Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨ Yes x No

As of April 29, 2011, 538,583,173 shares of the registrant’s common stock ($1.25 par value) were outstanding.

TABLE OF CONTENTS


PART I	FINANCIAL INFORMATION	1
ITEM 1.	FINANCIAL STATEMENTS:
	CONSOLIDATED STATEMENT OF OPERATIONS	1
	CONSOLIDATED BALANCE SHEET	2
	CONSOLIDATED STATEMENT OF CASH FLOWS	4
	INDEX FOR NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	5
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	6
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (“MD&A”)	15
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	26
ITEM 4.	CONTROLS AND PROCEDURES	26

PART II	OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	26
ITEM 1A.	RISK FACTORS	26
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	NA
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	NA
ITEM 5.	OTHER INFORMATION	NA
ITEM 6.	EXHIBITS	26

The financial information included in this report has been prepared in conformity with accounting practices and methods reflected in the financial statements included in the annual report (Form 10-K) filed with the Securities and Exchange Commission for the year ended December 31, 2010. Though not audited by an independent registered public accounting firm, the financial information reflects, in the opinion of management, all adjustments necessary to present a fair statement of results for the interim periods indicated. The results of operations for the quarter ended March 31, 2011, should not be regarded as necessarily indicative of the results that may be expected for the full year.

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


WEYERHAEUSER COMPANY
Date: May 6, 2011

By:		/s/ JERALD W. RICHARDS
		Jerald W. Richards
		Principal Accounting Officer

FINANCIAL INFORMATION

CONSOLIDATED STATEMENT OF OPERATIONS

(DOLLAR AMOUNTS IN MILLIONS EXCEPT PER-SHARE FIGURES)

(UNAUDITED)


FOR THE QUARTERS ENDED MARCH 31, 2011 AND 2010	MARCH 31, 2011			MARCH 31, 2010
Net sales and revenues	$	1,578		$	1,419
Cost of products sold		1,324			1,232

Gross margin		254			187
Selling, general and administrative expenses		179			163
Research and development expenses		7			8
Charges for restructuring, closures and impairments		4			2
Other operating income, net (Note 5)		(174	)		(70	)

Operating income		238			84
Interest income and other		11			42
Interest expense, net of capitalized interest		(93	)		(106	)

Earnings before income taxes		156			20
Income tax provision (Note 12)		(57	)		(38	)

Net earnings (loss)		99			(18	)
Less: net earnings attributable to noncontrolling interests		—			(2	)

Net earnings (loss) attributable to Weyerhaeuser common shareholders	$	99		$	(20	)

Basic earnings (loss) per share attributable to Weyerhaeuser common shareholders (Note 3)	$	0.18		$	(0.10	)

Diluted earnings (loss) per share attributable to Weyerhaeuser common shareholders (Note 3)	$	0.18		$	(0.10	)

Dividends paid per share	$	0.15		$	0.05

Weighted average shares outstanding (in thousands) (Note 3)
Basic		537,140			211,440
Diluted		540,476			211,440

See accompanying Notes to Consolidated Financial Statements.

CONSOLIDATED BALANCE SHEET

(DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES)

(UNAUDITED)


	MARCH 31, 2011		DECEMBER 31, 2010
ASSETS
Forest Products:
Current assets:
Cash and cash equivalents	$	1,459	$	1,466
Receivables, less allowances of $8 and $8		505		451
Inventories (Note 6)		544		478
Prepaid expenses		85		81
Deferred tax assets		155		113

Total current assets		2,748		2,589
Property and equipment, less accumulated depreciation of $6,749 and $6,784		3,151		3,217
Construction in progress		149		123
Timber and timberlands at cost, less depletion charged to disposals		4,003		4,035
Investments in and advances to equity affiliates		192		194
Goodwill		40		40
Other assets		424		363
Restricted assets held by special purpose entities		914		915

		11,621		11,476

Real Estate:
Cash and cash equivalents		4		1
Receivables, less discounts and allowances of $2 and $3		54		51
Real estate in process of development and for sale		515		517
Land being processed for development		978		974
Investments in and advances to equity affiliates		15		16
Deferred tax assets		266		266
Other assets		119		120
Consolidated assets not owned		8		8

		1,959		1,953

Total assets	$	13,580	$	13,429

See accompanying Notes to Consolidated Financial Statements

CONSOLIDATED BALANCE SHEET

(CONTINUED)


	MARCH 31, 2011			DECEMBER 31, 2010
LIABILITIES AND EQUITY
Forest Products:
Current liabilities:
Accounts payable	$	359		$	340
Accrued liabilities (Note 7)		686			734

Total current liabilities		1,045			1,074
Long-term debt (Note 8)		4,710			4,710
Deferred income taxes		485			366
Deferred pension and other postretirement benefits		908			930
Other liabilities		405			393
Liabilities (nonrecourse to Weyerhaeuser) held by special purpose entities		771			772
Commitments and contingencies (Note 11)

		8,324			8,245

Real Estate:
Long-term debt (Note 8)		348			350
Other liabilities		196			212
Consolidated liabilities not owned		8			8
Commitments and contingencies (Note 11)

		552			570

Total liabilities		8,876			8,815

Equity:
Weyerhaeuser shareholders’ interest:
Common shares: $1.25 par value; authorized 1,360,000,000 shares; issued and outstanding: 538,408,104 and 535,975,518 shares		674			670
Other capital		4,597			4,552
Retained earnings		187			181
Cumulative other comprehensive loss (Note 10)		(756	)		(791	)

Total Weyerhaeuser shareholders’ interest		4,702			4,612
Noncontrolling interests		2			2

Total equity		4,704			4,614

Total liabilities and equity	$	13,580		$	13,429

See accompanying Notes to Consolidated Financial Statements.

CONSOLIDATED STATEMENT OF CASH FLOWS

(DOLLAR AMOUNTS IN MILLIONS) (UNAUDITED)


	CONSOLIDATED
FOR THE QUARTERS ENDED MARCH 31, 2011 AND 2010	MARCH 31, 2011			MARCH 31, 2010
Cash flows from operations:
Net earnings (loss)	$	99		$	(18	)
Noncash charges (credits) to earnings (loss):
Depreciation, depletion and amortization		123			126
Deferred income taxes, net		39			34
Pension and other postretirement benefits (Note 9)		24			(1	)
Share-based compensation expense		14			6
Equity in loss of equity affiliates		2			3
Charges for impairment of assets		1			2
Net gains on dispositions of assets and operations		(156	)		(83	)
Foreign exchange transaction gains (Note 5)		(7	)		(10	)
Decrease (increase) in working capital:
Receivables less allowances		(59	)		(87	)
Receivable for taxes		1			568
Inventories		(66	)		(65	)
Real estate and land		(2	)		(36	)
Prepaid expenses		(10	)		(13	)
Accounts payable and accrued liabilities		(78	)		(47	)
Deposits on land positions and other assets		—			3
Pension contributions		(1	)		(132	)
Other		(33	)		(72	)

Net cash from operations		(109	)		178


Cash flows from investing activities:
Property and equipment		(35	)		(46	)
Timberlands reforestation		(12	)		(13	)
Redemption of short-term investments		—			47
Proceeds from sale of assets and operations		193			115
Repayments from pension trust		—			50
Other		5			(3	)

Cash from investing activities		151			150


Cash flows from financing activities:
Notes, commercial paper borrowings and revolving credit facilities, net		—			(3	)
Cash dividends		(81	)		(11	)
Change in book overdrafts		3			(4	)
Payments on debt		(2	)		(17	)
Exercises of stock options		34			—
Other		—			(2	)

Cash from financing activities		(46	)		(37	)

Net change in cash and cash equivalents		(4	)		291
Cash and cash equivalents at beginning of period		1,467			1,869

Cash and cash equivalents at end of period	$	1,463		$	2,160


Cash paid (received) during the year for:
Interest, net of amount capitalized of $9 in 2011 and $6 in 2010	$	156		$	153

Income taxes	$	2		$	(444	)

See accompanying Notes to Consolidated Financial Statements.

INDEX FOR NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1:	BASIS OF PRESENTATION	6

NOTE 2:	BUSINESS SEGMENTS	7

NOTE 3:	NET EARNINGS (LOSS) PER SHARE	7

NOTE 4:	SHARE-BASED COMPENSATION	8

NOTE 5:	OTHER OPERATING INCOME, NET	10

NOTE 6:	INVENTORIES	10

NOTE 7:	ACCRUED LIABILITIES	10

NOTE 8:	FAIR VALUE OF FINANCIAL INSTRUMENTS	11

NOTE 9:	PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS	11

NOTE 10:	COMPREHENSIVE INCOME (LOSS)	12

NOTE 11:	LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES	12

NOTE 12:	INCOME TAXES	13

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

FOR THE QUARTERS ENDED MARCH 31, 2011 AND MARCH 31, 2010

NOTE 1: BASIS OF PRESENTATION

We are a real estate investment trust (REIT). As a REIT, we expect to derive most of our REIT income from investments in timberlands, including the sale of standing timber through pay-as-cut sales contracts. REIT income can be distributed to shareholders without first paying corporate level tax, substantially eliminating the double taxation on income. A significant portion of our timberland segment earnings receives this favorable tax treatment. We are, however, subject to corporate taxes on built-in-gains (the excess of fair market value over tax basis at January 1, 2010) on sales of real property (other than standing timber) held by the REIT during the first 10 years following the REIT conversion. We also will continue to be required to pay federal corporate income taxes on earnings of our Taxable REIT Subsidiary (TRS), which principally includes our manufacturing businesses, our real estate development business and our non-qualified timberland segment income.

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:

•

majority-owned domestic and foreign subsidiaries and

•

variable interest entities in which we are the primary beneficiary.

They do not include our intercompany transactions and accounts, which are eliminated, and noncontrolling interests are presented as a separate component of equity.

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.

We report our financial condition in two groups:

•

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

•

Real Estate – our real estate development and construction operations.

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.

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; 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, 2010.

RECLASSIFICATIONS

We have reclassified certain balances and results from the prior year for consistency with our 2011 reporting. This makes year-to-year comparisons easier. Our reclassifications had no effect on net earnings (loss) or Weyerhaeuser shareholders’ interest.

NOTE 2: BUSINESS SEGMENTS

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:

•

Timberlands – which includes logs; timber; minerals, oil and gas; and international wood products;

•

Wood Products – which includes softwood lumber, engineered lumber, structural panels, hardwood lumber and building materials distribution;

•

Cellulose Fibers – which includes pulp, liquid packaging board and an equity interest in a newsprint joint venture; and

•

Real Estate – which includes real estate development, construction and sales.

Corporate and Other includes results of our transportation operations, certain gains or charges that are not related to an individual operating segment and the portion of items such as share-based compensation, pension and postretirement costs, foreign exchange transaction gains and losses and other general and administrative expenses that are not allocated to the business segments. We sold our five short line railroads at the end of 2010 and transportation currently only consists of Westwood Shipping Lines.

An analysis and reconciliation of our business segment information to the respective information in the Consolidated Financial Statements is as follows:


	QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS	MARCH 31, 2011			MARCH 31, 2010
Sales to and revenues from unaffiliated customers:
Timberlands	$	230		$	202
Wood Products		624			604
Cellulose Fibers		506			410
Real Estate		160			151
Corporate and Other		58			52

		1,578			1,419

Intersegment sales:
Timberlands		191			171
Wood Products		21			16
Corporate and Other		3			4

		215			191

Total sales and revenues		1,793			1,610
Intersegment eliminations		(215	)		(191	)

Total	$	1,578		$	1,419

Net contribution to earnings:
Timberlands	$	241		$	81
Wood Products		(36	)		(19	)
Cellulose Fibers		86			19
Real Estate		(1	)		31
Corporate and Other		(41	)		12

		249			124
Interest expense, net of capitalized interest		(93	)		(106	)

Income before income taxes		156			18
Income tax expense		(57	)		(38	)

Net earnings (loss) attributable to Weyerhaeuser common shareholders	$	99		$	(20	)

NOTE 3: NET EARNINGS (LOSS) PER SHARE

Our basic earnings (loss) per share attributable to Weyerhaeuser shareholders were:

•

$0.18 for the quarter ended March 31, 2011 and

•

$(0.10) for the quarter ended March 31, 2010.

Our diluted earnings (loss) per share attributable to Weyerhaeuser shareholders were:

•

$0.18 for the quarter ended March 31, 2011 and

•

$(0.10) for the quarter ended March 31, 2010.

Basic earnings per share is net earnings divided by the weighted average number of our outstanding common shares.

Diluted earnings per share is net earnings divided by the sum of the:

•

weighted average number of our outstanding common shares and

•

the effect of our outstanding dilutive potential common shares.

Dilutive potential common shares include:

•

outstanding stock options,

•

restricted stock units or

•

performance share units.

We use the treasury stock method to calculate the effect of our outstanding dilutive potential common shares. Share-based payment awards that are contingently issuable upon the achievement of specified performance or market conditions are included in our diluted earnings per share calculation in the period in which the conditions are satisfied.

To implement our decision to be taxed as a REIT, we distributed our accumulated earnings and profits to our shareholders, determined under federal income tax provisions, as a “Special Dividend.” At the election of each shareholder, the Special Dividend was paid in cash or Weyerhaeuser common shares. The Special Dividend of $5.6 billion was paid September 1, 2010 and included approximately 324 million common shares. The stock portion of the Special Dividend was treated as the issuance of new shares for accounting purposes and affects our earnings (loss) per share only for periods after the distribution. Prior periods are not restated. The required treatment results in earnings (loss) per share that is less than would have been the case had the common shares not been issued. Reflected below are pro forma results giving effect to the common stock distribution for diluted earnings per common share for the quarter ended March 31, 2010, as if the common stock distribution had occurred at the beginning of the period.


	QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES	MARCH 31, 2010
Net loss attributable to Weyerhaeuser common shareholders	$	(20	)
Diluted loss per share:
As reported	$	(0.10	)
Pro forma	$	(0.04	)
Diluted weighted average shares outstanding:
As reported		211,440
Pro forma		535,759

SHARES EXCLUDED FROM DILUTIVE EFFECT

The following shares were not included in the computation of diluted earnings per share for the quarter ended March 31, 2011 because they were either antidilutive or the required performance or market conditions were not met. For the quarter ended March 31, 2010, the following shares were not included in the computation of diluted loss per share due to our net loss position. Some or all of these shares may be dilutive potential common shares in future periods.

Potential Shares Not Included in the Computation of Diluted Earnings (Loss) per Share


	QUARTER ENDED
SHARES IN THOUSANDS	MARCH 31, 2011		MARCH 31, 2010
Stock options		23,844		12,933
Restricted stock units		—		736
Performance share units		489		—

The higher number of options in 2011 is primarily due to our Long-Term Incentive Compensation Plan requiring outstanding stock options to be adjusted as a result of the Special Dividend. During 2011, performance share units were granted under our performance share plan. These are disclosed in the above table at the potential maximum amount of shares that may be issued, which is 150 percent of the granted shares. See Note 4: Share-Based Compensation for more information on this plan.

NOTE 4: SHARE-BASED COMPENSATION

In first quarter 2011, we granted 1,941,686 stock options, 720,120 restricted stock units, 325,736 performance share units, and 52,869 stock appreciation rights. In addition, 272,671 outstanding restricted stock unit awards vested during first quarter 2011. A total of 2,459,392 shares of common stock were issued as a result of restricted stock unit vesting and stock option exercises.

STOCK OPTIONS

The weighted average exercise price of all of the stock options granted in first quarter 2011 was $24.16. The vesting and post-termination vesting terms for stock options granted in the first quarter of 2011 were as follows:

•

options vest ratably over 4 years;

•

options vest or continue to vest in the event of death, disability, or retirement at an age of at least 62;

•

options continue vesting for one year in the event of involuntary termination when the retirement criteria for full or continued vesting have not been met; and

•

options stop vesting for all other situations including early retirement prior to age 62.

Weighted Average Assumptions Used in Estimating the Value of Stock Options Granted in First Quarter 2011


	OPTIONS
Expected volatility		38.56	%
Expected dividends		2.48	%
Expected term (in years)		5.73
Risk-free rate		2.65	%
Weighted average grant date fair value	$	7.54

RESTRICTED STOCK UNITS

The weighted average fair value of the restricted stock units granted in first quarter 2011 was $23.94. The vesting provisions for restricted stock units granted in 2011 were as follows:

•

restricted stock units vest ratably over 4 years,

•

restricted stock units immediately vest in the event of death while employed or disability,

•

restricted stock units partially vest upon retirement at an age of at least 62 or job elimination depending on the employment period after grant date and

•

restricted stock units will be forfeited upon termination of employment in all other situations including early retirement prior to age 62.

PERFORMANCE SHARE UNITS

As part of a new long-term incentive compensation strategy in 2011, intended to tie executive compensation more closely to company performance, we granted a target number of performance share units to executives in first quarter 2011. Performance share units will be converted into shares of Weyerhaeuser stock – to the extent earned – at the end of a four-year timeframe that combines performance and market conditions with vesting requirements. The final number of shares awarded will range from 0 percent to 150 percent of each grant’s target, depending upon actual company performance.

The ultimate number of Performance Share Units earned is based on two measures:

•

Weyerhaeuser’s cash flow during the first year and

•

Weyerhaeuser’s relative total shareholder return (TSR) ranking in the S&P 500 during the first two years.

At the end of the performance period, performance share unit payouts would be in shares of our stock. Performance share units granted in 2011 and that are earned vest as follows:

•

units vest 50 percent, 25 percent and 25 percent on the second, third and fourth anniversaries of the grant date, respectively, as long as the individual remains employed by the company;

•

units fully vest in the event of death while employed or disability;

•

units partially vest upon retirement at an age of at least 62 or job elimination depending on the employment period after grant date; and

•

units will be forfeited upon termination of employment in all other situations including early retirement prior to age 62.

The weighted average grant date fair value of the performance share units was $25.52. Since the award contains a market condition, the effect of the market condition is reflected in the grant date fair value which is estimated using a Monte Carlo simulation model. This model estimates the TSR ranking of the company among the S&P 500 index over the 2 year performance period. Compensation expense is based on the estimated probable number of earned awards and recognized over the four-year vesting period on an accelerated basis. Generally, compensation expense would be reversed if the performance condition is not met unless the requisite service period has been achieved.

Weighted Average Assumptions Used in Estimating the Value of Performance Share Units Granted in First Quarter 2011


	Performance Share Units
Performance Period		2/9/2011 – 2/9/2013
Valuation Date Closing Stock Price		$ 24.32
Expected Dividends		2.47	%
Risk Free Rate		0.12% - 0.80	%
Volatility		28.65% - 35.74	%

STOCK APPRECIATION RIGHTS

Stock appreciation rights 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 March 31, 2011.

Weighted Average Assumptions Used to Remeasure the Value of Stock Appreciation Rights as of March 31, 2011


	MARCH 31, 2011
Expected volatility		38.27	%
Expected dividends		2.44	%
Expected term (in years)		2.58
Risk-free rate		1.14	%
Weighted average fair value	$	6.13

NOTE 5: OTHER OPERATING INCOME, NET

Other operating income, net:

•

includes both recurring and occasional income and expense items and

•

can fluctuate from year to year.

Items Included in Other Operating Income, Net


	QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS	MARCH 31, 2011			MARCH 31, 2010
Gain on sale of non-strategic timberlands	$	(152	)	$	—
Gain on disposition of assets		(4	)		(49	)
Foreign exchange gains, net		(7	)		(10	)
Land management income		(6	)		(6	)
Other, net		(5	)		(5	)

Total other operating income, net	$	(174	)	$	(70	)

Foreign exchange gains result from changes in exchange rates primarily related to our Canadian operations.

The $152 million pretax gain on sale of non-strategic timberlands resulted from the sale of 82,000 acres in southwestern Washington.

First quarter 2010 included a pretax gain of $40 million from the sale of certain British Columbia forest licenses and associated rights.

NOTE 6: INVENTORIES

Forest Products inventories include raw materials, work-in-process and finished goods.


DOLLAR AMOUNTS IN MILLIONS	MARCH 31, 2011			DECEMBER 31, 2010
Logs and chips	$	99		$	66
Lumber, plywood, panels and engineered lumber		202			164
Pulp and paperboard		150			157
Other products		77			79
Materials and supplies		138			133

	$	666		$	599
Less LIFO reserve		(122	)		(121	)

Total	$	544		$	478

The LIFO – the last-in, first-out method – inventory reserve applies to major inventory products held at our U.S. domestic locations. These inventory products include grade and fiber logs, chips, lumber, plywood, oriented strand board, hardwood lumber, pulp and paperboard.

NOTE 7: ACCRUED LIABILITIES

Forest Products accrued liabilities were comprised of the following:


DOLLAR AMOUNTS IN MILLIONS	MARCH 31, 2011		DECEMBER 31, 2010
Wages, salaries and severance pay	$	141	$	165
Pension and postretirement		70		70
Vacation pay		52		50
Income taxes		95		65
Taxes – Social Security and real and personal property		32		28
Interest		73		110
Customer rebates and volume discounts		41		63
Deferred mineral income		14		20
Other		168		163

Total	$	686	$	734

NOTE 8: FAIR VALUE OF FINANCIAL INSTRUMENTS

The estimated fair values and carrying values of our long-term debt consisted of the following:


	MARCH 31, 2011				DECEMBER 31, 2010
DOLLAR AMOUNTS IN MILLIONS	CARRYING VALUE		FAIR VALUE (LEVEL 2)		CARRYING VALUE		FAIR VALUE (LEVEL 2)
Financial Liabilities:
Long-term debt (including current maturities):
Forest Products	$	4,710	$	5,034	$	4,710	$	5,029
Real Estate	$	348	$	357	$	350	$	360

To estimate the fair value of long-term debt, we used the following valuation approaches:

•

market approach – based on quoted market prices for the same types and issues of our debt; or

•

income approach – based on the discounted value of the future cash flows using market yields for the same type and comparable issues of debt.

The inputs to the valuations are based on market data obtained from independent sources or information derived principally from observable market data.

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.

Subsequent to quarter end, we exercised our right to call approximately $518 million of 6.75 percent notes due in 2012. We expect the debt to be retired in June of 2011.

FAIR VALUE OF OTHER FINANCIAL INSTRUMENTS

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:

•

the short-term nature of these instruments,

•

carrying short-term investments at expected net realizable value and

•

the allowance for doubtful accounts.

NOTE 9: PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS

The components of net periodic benefit credits (costs) are:


	PENSION						OTHER POSTRETIREMENT BENEFITS
	QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS	MARCH 31, 2011			MARCH 31, 2010			MARCH 31, 2011			MARCH 31, 2010
Service cost	$	(12	)	$	(11	)	$	(1	)	$	—
Interest cost		(69	)		(68	)		(6	)		(7	)
Expected return on plan assets		105			109			—			—
Amortization of loss		(35	)		(15	)		(3	)		(5	)
Amortization of prior service credits (costs)		(4	)		(4	)		6			5
Adjustments		—			—			(4	)		—
Loss due to curtailment and special termination benefits		(1	)		(3	)		—			—

Total net periodic benefit credits (costs)	$	(16	)	$	8		$	(8	)	$	(7	)

FAIR VALUE OF PENSION PLAN ASSETS

As disclosed in our Annual Report on Form 10-K for the year ended December 31, 2010, the value reported for our pension plan assets at the end of 2010 was estimated. Additional information regarding the year-end values generally becomes available to us during the first half of the following year. We expect to complete the valuation of our pension plan assets during second quarter 2011. The final adjustments could affect net pension benefit (expense) depending on the magnitude of the adjustment.

EXPECTED CONTRIBUTIONS AND BENEFIT PAYMENTS

As disclosed in our Annual Report on Form 10-K for the year ended December 31, 2010, during 2011 we expect to:

•

be required to contribute approximately $80 million to our Canadian registered and nonregistered pension plans;

•

contribute $19 million to our U.S. nonqualified pension plans; and

•

make benefit payments of $44 million to our U.S. and Canadian other postretirement plans.

Based on revised plan participant information and actuarial assumptions, we no longer expect to have a required contribution to the U.S. qualified plan in 2011.

NOTE 10: COMPREHENSIVE INCOME (LOSS)

Items included in our comprehensive income consisted of the following:


	QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS	MARCH 31, 2011		MARCH 31, 2010
Consolidated net earnings (loss)	$	99	$	(18	)
Other comprehensive income:
Foreign currency translation adjustments		20		25
Actuarial net gains, net of tax		14		2
Prior service credits, net of tax		1		2

Total other comprehensive income		35		29

Total comprehensive income		134		11
Less: comprehensive income attributable to noncontrolling interests		—		(2	)

Comprehensive income attributable to Weyerhaeuser common shareholders	$	134	$	9

Cumulative Other Comprehensive Loss

Items included in our cumulative other comprehensive loss are:


DOLLAR AMOUNTS IN MILLIONS	MARCH 31, 2011			DECEMBER 31, 2010
Foreign currency translation adjustments	$	439		$	419
Net pension and other postretirement benefit loss not yet recognized in earnings		(1,344	)		(1,358	)
Prior service credit not yet recognized in earnings		146			145
Unrealized gains on available-for-sale securities		3			3

Total	$	(756	)	$	(791	)

NOTE 11: LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES

This note provides details about our:

•

legal proceedings and

•

environmental matters.

LEGAL PROCEEDINGS

We are party to legal matters generally incidental to our business. The ultimate outcome of any legal proceeding:

•

is subject to a great many variables and

•

cannot be predicted with any degree of certainty.

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:

•

could have a material adverse effect on our results of operations, cash flows or financial position in any given quarter or year; but

•

will not have a material adverse effect on our long-term results of operations, cash flows or financial position.

First Quarter Claim

On April 25, 2011, a complaint was filed in the United States District Court for the Western District of Washington on behalf of a person alleged to be a participant in the Company’s U.S. Retirement Plan for salaried employees.

The complaint alleges violations of the Employee Retirement Security Act (ERISA) with respect to the management of the plan’s assets.

The defendants include:

•

the Company and

•

other plan fiduciaries.

The complaint seeks:

•

certification as a class action,

•

payment to the retirement plans by the Company and the other defendants of alleged losses due to the alleged breach of fiduciary duties and

•

payment of the plaintiff’s attorney fees and other costs.

The Company believes that its pension plans have been consistently managed in full compliance with established fiduciary standards and intends to vigorously contest the claim.

ENVIRONMENTAL MATTERS

Our environmental matters include:

•

site remediation,

•

asset retirement obligations and

•

regulation of air emissions in the U.S.

Site Remediation

Under the Comprehensive Environmental Response Compensation and Liability Act – commonly known as the Superfund – and similar state laws, we:

•

are a party to various proceedings related to the cleanup of hazardous waste sites and

•

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.

We accrued $28 million as of March 31, 2011, of estimated remediation costs on the active Superfund sites and other sites for which we are responsible for.

We change our accrual to reflect:

•

new information on any site concerning implementation of remediation alternatives,

•

updates on prior cost estimates and new sites and

•

costs incurred to remediate sites.

There have not been material changes to the accrual since the end of 2010.

We believe it is reasonably possible – based on currently available information and analysis – that remediation costs for all identified sites may exceed our accrual by up to $100 million.

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:

•

is much less certain than the estimates on which our accruals currently are based and

•

uses assumptions that are less favorable to us among the range of reasonably possible outcomes.

In estimating our current accruals and the possible range of additional future costs, we:

•

assumed we will not bear the entire cost of remediation of every site,

•

took into account the ability of other potentially responsible parties to participate and

•

considered each party’s financial condition and probable contribution on a per-site basis.

We have not recorded any amounts for potential recoveries from insurance carriers.

Asset Retirement Obligations

We have obligations associated with the retirement of tangible long-lived assets consisting primarily of reforestation obligations related to forest management licenses in Canada and obligations to close and cap landfills. We accrued $68 million for these obligations as of March 31, 2011. The accruals have not changed materially since the end of 2010.

Some of our sites have asbestos containing materials. We have met our current legal obligation to identify and manage these materials. In situations where we cannot reasonably determine when asbestos containing materials might be removed from the sites, we have not recorded an accrual because the fair value of the obligation cannot be reasonably estimated.

Regulation of Air Emissions in the U.S.

In March, the United States Environmental Protection Agency (EPA) published a set of final rules that require use of maximum achievable control technology (MACT) for industrial boilers. As disclosed in our Annual Report on Form 10-K for the year ended December 31, 2010, we had previously estimated that we might spend as much as $30 million to $100 million over the next few years to comply with the MACT standards as they were described in the proposed rule. After reviewing the final rules, we now estimate that we might spend as much as $30 million to $45 million over the next few years to comply with the MACT standards. The EPA has stated that they intend to reconsider portions of the final rules in the coming months. Depending on the final outcome of the reconsideration process, our cost projection may change.

NOTE 12: INCOME TAXES

As a REIT, we are generally not subject to corporate level tax on income of the REIT that is distributed to shareholders. We will, however, be subject to corporate taxes on built-in-gains (the excess of fair market value over tax basis at January 1, 2010) on sales of real property (other than standing timber) held by the REIT during the first 10 years following the REIT conversion. We also will continue to be required to pay federal corporate income taxes on earnings of our Taxable REIT Subsidiary (TRS), which principally includes our manufacturing businesses, our real estate development business and the portion of our timberlands segment income included in the TRS.

The provision for income taxes is based on the current estimate of the annual effective tax rate adjusted to reflect the tax impact of items discrete to the quarter. Our 2011 income tax rate excluding discrete items is lower than the statutory rate, primarily due to the tax benefits of being a REIT. Our 2010 income tax rate is higher than the statutory rate, primarily due to the effect of state and foreign income taxes on a low pretax earnings base. Tax benefits of being a REIT were not reflected in our first quarter 2010 income tax rate.

Our effective income tax rates excluding discrete items were:

•

20.6 percent for 2011 and

•

42.3 percent for 2010.

Items excluded from the calculation of our effective income tax rates include:


DOLLAR AMOUNTS IN MILLIONS
2011:
Income taxes on a non-strategic timberlands gain (Note 5)	$	(56	)
2010:
Medicare Part D subsidy charge	$	(28	)
State tax law and rate changes charge	$	(3	)

Due to the Patient Protection and Affordable Care Act, as modified by the Health Care and Education Reconciliation Act, we will no longer be able to claim an income tax deduction for prescription drug benefits provided to retirees and reimbursed under the Medicare Part D subsidy beginning in 2013. Accounting rules required the effect of the change to be recorded in first quarter 2010, the period that the law was enacted.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (“MD&A”)

FORWARD-LOOKING STATEMENTS

This report contains statements concerning our future results and performance that are forward-looking statements according to the Private Securities Litigation Reform Act of 1995. These statements:

•

use forward-looking terminology,

•

are based on various assumptions we make and

•

may not be accurate because of risks and uncertainties surrounding the assumptions that we make.

Factors listed in this section – as well as other factors not included – may cause our actual results to differ from our forward-looking statements. There is no guarantee that any of the events anticipated by our forward-looking statements will occur. Or if any of the events occur, there is no guarantee what effect they will have on our operations or financial condition.

We will not update our forward-looking statements after the date of this report.

FORWARD-LOOKING TERMINOLOGY

Some forward-looking statements discuss our plans, strategies and intentions. They use words such as expects, may, will, believes, should, approximately, anticipates, estimates, and plans. In addition, these words may use the positive or negative or a variation of those terms.

STATEMENTS

We make forward-looking statements of our expectations regarding second quarter 2011, including:

•

housing market conditions;

•

market challenges for our Timberlands, Wood Products and Real Estate segments;

•

higher selling prices for western logs;

•

higher harvest volumes in Timberlands, partially offset by higher fuel expenses and seasonally higher road and silviculture costs;

•

improved operating rates, higher selling prices and cost reductions in our Wood Products segment, partially offset by increased log costs;

•

higher selling prices, partially offset by increased scheduled maintenance costs in the Cellulose Fibers segment; and

•

a seasonal increase in home sale closings and lower margins and average sales prices in our single-family homebuilding operations.

We base our forward-looking statements on a number of factors, including the expected effect of:

•

the economy;

•

foreign exchange rates, primarily the Canadian dollar and Euro;

•

adverse litigation outcomes and the adequacy of reserves;

•

regulations;

•

changes in accounting principles;

•

the effect of implementation or retrospective application of accounting methods;

•

contributions to pension plans;

•

projected benefit payments;

•

projected tax rates;

•

IRS audit outcomes and timing of settlements; and

•

other related matters.

RISKS, UNCERTAINTIES AND ASSUMPTIONS

The major risks and uncertainties – and assumptions that we make – that affect our business include, but are not limited to:

•

general economic conditions, including employment rates, housing starts, interest rate levels, availability of financing for home mortgages, strength of the U.S. dollar;

•

market demand for our products, which is related to the strength of the various business segments and economic conditions;

•

performance of our manufacturing operations, including maintenance requirements;

•

raw material prices;

•

energy prices;

•

transportation costs;

•

successful execution of our internal performance plans including restructurings and cost reduction initiatives;

•

level of competition from domestic and foreign producers;

•

the effect of the Japanese disaster on demand for company products;

•

the effect of weather;

•

the risk of loss from fires, floods, windstorms, hurricanes, pest infestation and other natural disasters;

•

federal tax policies;

•

the effect of forestry, land use, environmental and other governmental regulations;

•

legal proceedings;

•

the effect of timing of retirements and changes in the market price of our common stock on charges for share-based compensation;

•

changes in accounting principles;

•

performance of pension fund investments and derivatives; and

•

the other factors described under “Risk Factors” in our annual report on Form 10-K.

EXPORTING ISSUES

We are a large exporter, affected by changes in:

•

economic activity in Europe and Asia – especially Japan and China;

•

currency exchange rates – particularly the relative value of the U.S. dollar to the Canadian dollar, Euro and Yen; and

•

restrictions on international trade or tariffs imposed on imports.

RESULTS OF OPERATIONS

In reviewing our results of operations, it is important to understand these terms:

•

Price realizations refer to net selling prices – this includes selling price plus freight, minus normal sales deductions.

•

Net contribution to earnings can be positive or negative and refers to earnings (loss) attributable to Weyerhaeuser shareholders before interest expense and income taxes.

In the following discussion, unless otherwise noted, references to increases or decreases in income and expense items, price realizations, shipment volumes, and net contributions to earnings are based on the quarter ended March 31, 2011, compared to the quarter ended March 31, 2010. The periods are also referred to as 2011 and 2010.

CONSOLIDATED RESULTS

How We Did in First Quarter 2011

NET SALES AND REVENUES / OPERATING INCOME / NET EARNINGS (LOSS) – WEYERHAEUSER COMPANY


	QUARTER ENDED					AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER-SHARE FIGURES	MARCH 31, 2011		MARCH 31, 2010			2011 VS. 2010
Net sales and revenues	$	1,578	$	1,419		$	159
Operating income	$	238	$	84		$	154
Net earnings (loss) attributable to Weyerhaeuser common shareholders	$	99	$	(20	)	$	119
Basic earnings (loss) per share attributable to Weyerhaeuser common shareholders	$	0.18	$	(0.10	)	$	0.28
Diluted earnings (loss) per share attributable to Weyerhaeuser common shareholders	$	0.18	$	(0.10	)	$	0.28

Comparing 2011 with 2010

In 2011:

•

Net sales and revenues increased $159 million – 11 percent.

•

Net earnings increased $119 million.

Net sales and revenues

Net sales and revenues increased primarily due to the following:

•

increased pulp prices and volumes sold – refer to the Cellulose Fibers segment discussion;

•

increased log prices and volumes sold – refer to the Timberlands segment discussion; and

•

increased volumes sold of certain residential building products – refer to the Wood Products segment discussion.

Net earnings (loss) attributable to Weyerhaeuser common shareholders

Our net earnings attributable to Weyerhaeuser common shareholders increased primarily due to the following:

•

recognition of a gain on sale of 82,000 acres of non-strategic timberlands in 2011 – refer to the Timberlands segment discussion;

•

higher pulp price realizations – refer to the Cellulose Fibers segment discussion;

•

recognition of a tax charge in 2010 related to the federal tax law change for Medicare Part D subsidies – refer to the income tax discussion; and

•

increased export and domestic log prices in the West – refer to the Timberlands segment discussion.

These increases in our earnings were partially offset by the following:

•

recognition of a gain on the sale of an asset in 2010 – refer to the Wood Products segment discussion;

•

recognition of gains on the sale of partnership interests in 2010 – refer to the Real Estate segment discussion; and

•

increased raw materials and other operating costs – refer to the Timberlands, Wood Products and Cellulose Fibers segment discussions.

TIMBERLANDS

How We Did in First Quarter 2011

Here is a comparison of net sales and revenues to unaffiliated customers, intersegment sales, and net contribution to earnings for the quarters ended March 31, 2011, and March 31, 2010:

NET SALES AND REVENUES / NET CONTRIBUTION TO EARNINGS – TIMBERLANDS


	QUARTER ENDED				AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS	MARCH 31, 2011		MARCH 31, 2010		2011 VS. 2010
Net sales and revenues to unaffiliated customers:
Logs:
West	$	110	$	82	$	28
South		41		27		14
Canada		7		9		(2	)

Subtotal logs sales and revenues		158		118		40
Pay as cut timber sales		8		8		—
Timberlands exchanges ⁽¹⁾		21		35		(14	)
Higher and better-use land sales ⁽¹⁾		4		5		(1	)
Minerals, oil and gas		14		15		(1	)
Products from international operations ⁽²⁾		17		15		2
Other products		8		6		2

Subtotal net sales and revenues to unaffiliated customers		230		202		28
Intersegment sales:
United States		112		104		8
Other		79		67		12

Subtotal intersegment sales		191		171		20

Total sales and revenues	$	421	$	373	$	48

Net contribution to earnings	$	241	$	81	$	160

(1)	Dispositions of higher and better use timberland and non-strategic timberlands are conducted through Forest Products subsidiaries.

(2)	Includes logs, plywood and hardwood lumber harvested or produced by our international operations, primarily in South America.

Comparing 2011 with 2010

In 2011:

•

Net sales and revenues to unaffiliated customers increased $28 million – 14 percent.

•

Intersegment sales increased $20 million – 12 percent.

•

Net contribution to earnings increased $160 million.

Net sales and revenues – unaffiliated customers

The $28 million increase in net sales and revenues to unaffiliated customers resulted primarily from the following:

•

Western log sales increased by $28 million due to increased sales volumes of 12 percent and increased price realizations of 19 percent driven by strong export demand.

•

Southern logs sales increased by $14 million primarily due to increased sales volumes of 59 percent as the result of increased sales of logs compared to timber in 2011 and an overall increase of fee volume harvest year over year.

The above items were partially offset by a $15 million decrease in land exchanges and higher and better-use land sales.

Intersegment sales

The $20 million increase in intersegment sales resulted primarily from the following:

•

$10 million increase due to increased Canadian log and chip sales volumes and

•

$8 million increase due to higher log and chip prices in the West.

Net contribution to earnings

The $160 million increase in net contribution to earnings resulted primarily from the following:

•

$152 million pretax gain on the first quarter 2011 sale of 82,000 acres of non-strategic timberlands in southwestern Washington;

•

$24 million increase primarily due to higher domestic and export prices in the West; and

•

$5 million increase primarily due to increased harvest levels of 13 percent in the West.

The above items were partially offset by:

•

$12 million decrease due to land exchanges and higher and better-use land sales and

•

$11 million increase in operating costs primarily due to higher silviculture and fuel costs.

Our Outlook

Excluding the disposition of non-strategic timberlands, we expect slightly higher earnings in the second quarter compared with the first. The company anticipates modestly improved selling prices for western logs and higher harvest volumes to be largely offset by higher fuel expenses and seasonally higher road and silviculture costs.

THIRD-PARTY LOG SALES VOLUMES AND FEE HARVEST VOLUMES


	QUARTER ENDED				AMOUNT OF CHANGE
VOLUMES IN THOUSANDS	MARCH 31, 2011		MARCH 31, 2010		2011 VS. 2010
Third party log sales – cubic meters:
West		1,095		975		120
South		1,005		634		371
Canada		194		259		(65	)
International		72		78		(6	)

Total		2,366		1,946		420

Fee depletion – cubic meters:
West		1,611		1,431		180
South		2,180		2,140		40
International		98		92		6

Total		3,889		3,663		226

WOOD PRODUCTS

How We Did in First Quarter 2011

Here is a comparison of net sales and revenues to unaffiliated customers and net contribution to earnings for the quarters ended March 31, 2011, and March 31, 2010:

NET SALES AND REVENUES / NET CONTRIBUTION TO EARNINGS – WOOD PRODUCTS


	QUARTER ENDED						AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS	MARCH 31, 2011			MARCH 31, 2010			2011 VS. 2010
Net sales and revenues:
Structural lumber	$	260		$	241		$	19
Engineered solid section		62			66			(4	)
Engineered I-joists		33			48			(15	)
Oriented strand board		85			66			19
Softwood plywood		17			16			1
Hardwood lumber		58			54			4
Other products produced		42			35			7
Other products purchased for resale		67			78			(11	)

Total	$	624		$	604		$	20

Net contribution to earnings	$	(36	)	$	(19	)	$	(17	)

Comparing 2011 with 2010

In 2011:

•

Net sales and revenues increased $20 million – 3 percent.

•

Net contribution to earnings decreased $17 million – 89 percent.

Net sales and revenues

The $20 million increase in net sales and revenues was primarily due to the following:

•

Structural lumber shipment volumes increased 9 percent.

•

Engineered solid section average price realizations increased 8 percent.

•

Engineered I-joists average price realizations increased 17 percent.

•

Oriented strand board shipment volumes increased 33 percent.

These increases were partially offset by the following:

•

Engineered solid section shipment volumes decreased 14 percent.

•

Engineered I-joists shipment volumes decreased 41 percent.

Net contribution to earnings

The $17 million decrease in net contribution to earnings was primarily due to the following:

•

$40 million pretax gain on the sale of certain British Columbia forest licenses and associated rights in 2010 and

•

$11 million increase in log costs.

These decreases were partially offset by the following:

•

$17 million decrease in manufacturing costs primarily due to increased operating rates and

•

$13 million decrease in selling and administrative costs primarily due to previous cost reduction efforts.

Our Outlook

We anticipate a smaller loss from the segment in second quarter due to seasonally higher sales volumes and improved operating rates. We expect Wood Products cash flow to be positive in second quarter and do not expect to build additional working capital.

THIRD-PARTY SALES VOLUMES


	QUARTER ENDED				AMOUNT OF CHANGE
VOLUMES IN MILLIONS	MARCH 31, 2011		MARCH 31, 2010		2011 VS. 2010
Structural lumber – board feet		826		761		65
Engineered solid section – cubic feet		3		4		(1	)
Engineered I-joists – lineal feet		26		44		(18	)
Oriented strand board – square feet (3/8”)		445		334		111
Softwood plywood – square feet (3/8”)		63		60		3
Hardwood lumber – board feet		69		67		2

TOTAL PRODUCTION VOLUMES


	QUARTER ENDED				AMOUNT OF CHANGE
VOLUMES IN MILLIONS	MARCH 31, 2011		MARCH 31, 2010		2011 VS. 2010
Structural lumber – board feet		893		801		92
Engineered solid section – cubic feet		4		4		—
Engineered I-joists – lineal feet		30		41		(11	)
Oriented strand board – square feet (3/8”)		494		378		116
Softwood plywood – square feet (3/8”)		53		48		5
Hardwood lumber – board feet		58		59		(1	)

CELLULOSE FIBERS

How We Did in First Quarter 2011

Here is a comparison of net sales and revenues to unaffiliated customers and net contribution to earnings for the quarters ended March 31, 2011, and March 31, 2010:

NET SALES AND REVENUES / NET CONTRIBUTION TO EARNINGS – CELLULOSE FIBERS


	QUARTER ENDED				AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS	MARCH 31, 2011		MARCH 31, 2010		2011 VS. 2010
Net sales and revenues:
Pulp	$	398	$	321	$	77
Liquid packaging board		85		71		14
Other products		23		18		5

Total	$	506	$	410	$	96

Net contribution to earnings	$	86	$	19	$	67

Comparing 2011 with 2010

In 2011:

•

Net sales and revenues increased $96 million – 23 percent.

•

Net contribution to earnings increased $67 million.

Net sales and revenues

Net sales and revenues increased $96 million primarily due to the following:

•

Pulp price realizations increased by $150 per ton – 20 percent – primarily due to tight global softwood pulp inventories.

•

Sales volumes for pulp increased 14,000 tons – 3 percent.

•

Sales volumes for liquid packaging board increased 7,000 tons – 10 percent.

•

Liquid packaging board price realizations increased by $96 per ton – 9 percent – due to a favorable mix shift to coated board sales and an increase in market price.

Net contribution to earnings

Net contribution to earnings increased $67 million primarily due to the following:

•

$66 million increase due to higher pulp price realizations,

•

$7 million improvement in liquid packaging board price realizations and

•

$4 million increase in other product realizations.

Partially offsetting these increases in earnings is a $15 million increase in operating costs, freight, and the effect on Canadian operating costs of the weakening U.S. dollar compared to the Canadian dollar.

Our Outlook

We expect higher earnings from the Cellulose Fibers segment in second quarter. The company anticipates higher selling prices, partially offset by increased maintenance costs due to an increase in the number of scheduled annual maintenance outages.

THIRD-PARTY SALES VOLUMES


	QUARTER ENDED				AMOUNT OF CHANGE
VOLUMES IN THOUSANDS	MARCH 31, 2011		MARCH 31, 2010		2011 VS. 2010
Pulp – air-dry metric tons		436		422		14
Liquid packaging board – tons		74		67		7

TOTAL PRODUCTION VOLUMES


	QUARTER ENDED				AMOUNT OF CHANGE
VOLUMES IN THOUSANDS	MARCH 31, 2011		MARCH 31, 2010		2011 VS. 2010
Pulp – air-dry metric tons		437		437		—
Liquid packaging board – tons		67		69		(2	)

REAL ESTATE

How We Did in First Quarter 2011

Here is a comparison of net sales and revenues and net contribution to earnings for the quarters ended March 31, 2011, and March 31, 2010:

NET SALES AND REVENUES / NET CONTRIBUTION TO EARNINGS – REAL ESTATE


	QUARTER ENDED					AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS	MARCH 31, 2011			MARCH 31, 2010		2011 VS. 2010
Net sales and revenues:
Single-family housing	$	152		$	143	$	9
Land		7			7		—
Other		1			1		—

Total	$	160		$	151	$	9

Net contribution to earnings	$	(1	)	$	31	$	(32	)

Here is a comparison of key statistics related to our single-family operations for the quarters ended March 31, 2011, and March 31, 2010:

SUMMARY OF SINGLE-FAMILY STATISTICS


	QUARTER ENDED						AMOUNT OF CHANGE
	MARCH 31, 2011			MARCH 31, 2010			2011 VS. 2010
Homes sold		535			620			(85	)
Homes closed		363			393			(30	)
Homes sold but not closed (backlog)		611			877			(266	)
Cancellation rate		11.6	%		18.8	%		(7.2	)%
Buyer traffic		12,904			22,658			(9,754	)
Average price of homes closed	$	419,000		$	365,000		$	54,000
Single-family gross margin – excluding impairments (%) ⁽¹⁾		21.7	%		19.4	%		2.3	%

(1)	Single-family gross margin equals revenue less cost of sales and period costs (other than impairments and deposit write-offs).

Comparing 2011 with 2010

In 2011:

•

Net sales and revenues increased $9 million – 6 percent.

•

Net contribution to earnings decreased $32 million.

Markets for new homes are highly differential across our operations with uneven demand patterns. Buyers in lower price points have been attracted by housing affordability, partially due to low mortgage rates, but tight mortgage qualification requirements remain a challenge for many first-time buyers. In addition, tax credits available to many buyers in 2010 are no longer available in 2011. Although the supply of new homes has stabilized, most of our markets have been affected by high levels of foreclosure inventories, high unemployment and low consumer confidence. We experienced decreased market activity in first quarter 2011 compared to first quarter 2010, as reflected by lower levels of traffic and fewer new orders.

Net sales and revenues

The $9 million increase in net sales and revenues resulted primarily from:

•

Average selling prices of single-family homes increased 15 percent to $419,000 in first quarter 2011 from $365,000 in first quarter 2010, primarily due to a change in geographic mix.

•

This was partially offset by an 8 percent decrease in home closings to 363 in first quarter 2011 from 393 in first quarter 2010.

Net contribution to earnings

The $32 million decrease in net contribution to earnings resulted primarily from:

•

$33 million decrease in gains on the sale of partnership interests – first quarter 2010 interest income and other included the sale of interests in two commercial partnerships.

•

This was partially offset by a $5 million increase from single-family home closings, as higher average sales prices and higher margins more than offset the effect of fewer closings.

Our Outlook

We anticipate a small profit from single-family homebuilding operations in second quarter due to a seasonal increase in home sale closings.

CORPORATE AND OTHER

How We Did in First Quarter 2011

Here is a comparison of net sales and revenues and net contribution to earnings for the quarters ended March 31, 2011, and March 31, 2010:

NET SALES AND REVENUES / NET CONTRIBUTIONS TO EARNINGS – CORPORATE AND OTHER


	QUARTER ENDED					AMOUNT OF CHANGE
DOLLAR AMOUNTS IN MILLIONS	MARCH 31, 2011			MARCH 31, 2010		2011 VS. 2010
Net sales and revenues	$	58		$	52	$	6

Net contribution to earnings	$	(41	)	$	12	$	(53	)

Comparing 2011 with 2010

In 2011:

•

Net sales and revenues increased $6 million – 12 percent.

•

Net contribution to earnings decreased $53 million.

Net sales and revenues

Westwood revenues increased as a result of higher volumes and prices. First quarter 2011 does not include revenues of five short line railroads that we sold at the end of 2010.

Net contribution to earnings

Net contribution to earnings decreased $53 million, due primarily to the following:

•

$28 million increase in pension and postretirement costs primarily due to the amortization of deferred pension losses;

•

$13 million due to a 30 percent increase in our stock price in first quarter 2011, which resulted in higher share-based compensation expense; and

•

$3 million lower foreign exchange transaction gains.

INTEREST EXPENSE

Our net interest expense incurred was:

•

$93 million during first quarter 2011 and

•

$106 million during first quarter 2010.

Interest expense incurred decreased $13 million, primarily due to second quarter 2010 reductions in our debt.

INCOME TAXES

Our effective income tax rates excluding discrete items were:

•

20.6 percent for 2011 and

•

42.3 percent for 2010.

Items excluded from the calculation of our effective income tax rates include:


DOLLAR AMOUNTS IN MILLIONS
2011:
Income taxes on a non-strategic timberlands gain	$	(56	)
2010:
Medicare Part D subsidy charge	$	(28	)
State tax law and rate changes charge	$	(3	)

LIQUIDITY AND CAPITAL RESOURCES

We are committed to maintaining a sound and conservative capital structure which enables us to:

•

protect the interests of our shareholders and lenders and

•

have access at all times to all major financial markets.

Two important elements of our policy governing capital structure include:

•

viewing the capital structure of Forest Products separately from that of Real Estate given the very different nature of their assets and business activity and

•

minimizing liquidity risk by managing a combination of maturing short-term and long-term debt.

The amount of debt and equity for Forest Products and Real Estate will reflect the following:

•

basic earnings capacity and

•

liquidity characteristics of their respective assets.

CASH FROM OPERATIONS

Cash from operations includes:

•

cash received from customers;

•

cash paid to employees, suppliers and others;

•

cash paid for interest on our debt; and

•

cash paid for taxes.

Consolidated net cash (used in) provided by our operations in first quarter was:

•

$(109) million in 2011 and

•

$178 million in 2010.

Comparing 2011 with 2010

Net cash from operations decreased $287 million in 2011 as compared with first quarter 2010:

•

Net cash inflows related to income taxes decreased $446 million for the quarter. We paid taxes of $2 million in first quarter 2011. We received income tax refunds of $444 million in first quarter 2010.

•

Cash we received from customers increased approximately $187 million primarily due to increased price realizations and shipment volumes from our Cellulose Fibers, Timberlands and Wood Products segments.

CASH FROM INVESTING ACTIVITIES

Cash from investing activities can include:

•

acquisitions of property, equipment, timberlands and reforestation;

•

investments in or distribution from equity affiliates;

•

proceeds from sale of assets and operations; and

•

purchases and redemptions of short-term investments.

In first quarter 2010, the pension trust repaid $50 million of short-term loans made in 2008 and 2009.

Summary of Capital Spending by Business Segment


	QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS	MARCH 31, 2011		MARCH 31, 2010
Timberlands	$	14	$	20
Wood Products		6		2
Cellulose Fibers ⁽¹⁾		26		39
Corporate and Other		—		1
Real Estate		1		1

Total	$	47	$	63

(1)	2010 includes the exercise of an option to acquire liquid packaging board extrusion equipment for $21 million, including assumption of liabilities of $4 million.

We anticipate that our net capital expenditures for 2011 – excluding acquisitions – will be approximately $250 million to $270 million. However, that range could change due to:

•

future economic conditions,

•

weather and

•

timing of equipment purchases.

Proceeds from the Sale of Nonstrategic Assets

Proceeds received from the sale of nonstrategic assets were $193 million in 2011. This included $192 million for the sale of 82,000 acres of non-strategic timberlands in southwestern Washington.

Proceeds received from the sale of nonstrategic assets were $115 million in 2010. This included:

•

$40 million for the sale of British Columbia forest licenses and associated rights,

•

$33 million for the sale of partnership interests in our Real Estate Segment and

•

$28 million for the sale of Wood Products assets.

CASH FROM FINANCING ACTIVITIES

Cash from financing activities can include:

•

issuances and payment of long-term debt,

•

borrowings and payments under revolving lines of credit,

•

changes in our book overdrafts,

•

proceeds from stock offerings and option exercises and

•

payment of cash dividends.

Debt

We repaid debt of:

•

$2 million in first quarter 2011 and

•

$20 million in first quarter 2010.

Subsequent to quarter end, we exercised our right to call approximately $518 million of 6.75 percent notes due in 2012. We expect the debt to be retired in June of 2011.

Long-term debt and revolving credit facilities

Weyerhaeuser Company and Weyerhaeuser Real Estate Company (WRECO) have a $1.0 billion 5-year revolving credit facility that expires in December 2011. WRECO can borrow up to $200 million under this facility. Neither of the entities is a guarantor of the borrowing of the other under this credit facility.

There were no net proceeds from the issuance of debt or from borrowings (repayments) under our available credit facility in the first quarters of 2011 or 2010.

Debt covenants

As of March 31, 2011 Weyerhaeuser Company and WRECO:

•

had no borrowings outstanding under the credit facility and

•

were in compliance with the credit facility covenants.

Weyerhaeuser Company Covenants:

Key covenants related to Weyerhaeuser Company include the requirement to maintain:

•

a minimum defined net worth of $3.0 billion and

•

a defined debt-to-total-capital ratio of 65 percent or less.

Weyerhaeuser Company’s defined net worth is comprised of:

•

total Weyerhaeuser shareholders’ interest,

•

plus or minus accumulated comprehensive income (loss) related to pension and postretirement benefits,

•

minus Weyerhaeuser Company’s investment in subsidiaries in our Real Estate segment or other unrestricted subsidiaries.

Total Weyerhaeuser Company capitalization is comprised of:

•

total Weyerhaeuser Company (excluding WRECO) debt

•

plus total defined net worth.

As of March 31, 2011, Weyerhaeuser Company had:

•

a defined net worth of $5 billion and

•

a defined debt-to-total-capital ratio of 48.5 percent.

Weyerhaeuser Real Estate Company Covenants

Key covenants related to WRECO revolving credit facility and medium-term notes include the requirement to maintain:

•

a minimum defined net worth of $100 million,

•

a defined debt-to-total-capital ratio of 80 percent or less and

•

Weyerhaeuser Company or a subsidiary must own at least 79 percent of WRECO.

WRECO’s defined net worth is:

•

total WRECO shareholders’ interest,

•

minus intangible assets,

•

minus WRECO’s investment in joint ventures and partnerships.

Total WRECO defined debt is:

•

total WRECO debt – including any intercompany debt

•

plus outstanding WRECO guarantees and letters of credit.

Total WRECO capitalization is defined as:

•

total WRECO defined debt and

•

total WRECO defined net worth.

As of March 31, 2011, WRECO had:

•

a defined net worth of $841 million and

•

a defined debt-to-total-capital ratio of 52 percent.

Option Exercises

We received cash proceeds of $34 million from the exercise of stock options in first quarter 2011.

Paying dividends

We paid dividends of:

•

$81 million in first quarter 2011 and

•

$11 million in first quarter 2010.

The increase in dividends paid is primarily due to the increase in our quarterly dividend from 5 cents to 15 cents in February 2011 and the increase in the number of our common shares outstanding as a result of the Special Dividend.

On April 14, 2011, our board of directors declared a regular quarterly dividend of 15 cents per share payable June 1, 2011, to shareholders of record at the close of business May 13, 2011.

OTHER RELATED DISCLOSURES

Japan Earthquake and Tsunami

The recent earthquakes and tsunami that struck the northeast coast of Japan has created uncertainty regarding the effect on general economic and market conditions in Japan. A number of our businesses supply products or services to Japanese customers and approximately 2 percent of our revenues are from sales of products or services to customers that have facilities located in the disaster area. The immediate effect of the disaster was an increase in demand for some products and services (such as newsprint, liquid packaging board and shipping), and a decrease in demand for some other products (such as lumber and logs), which was offset by increased exports to other areas of Asia. Longer-term, there may be increased demand for products such as lumber and logs needed in the rebuilding effort. This is an evolving situation; we are in contact with our customers and are continuing to assess the effect on our businesses. We currently believe that these events will not have a material effect on our results of operations in the second quarter or in 2011.

CRITICAL ACCOUNTING POLICIES

There have been no significant changes during first quarter 2011 to our critical accounting policies presented in our 2010 Annual Report on Form 10-K.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

No changes occurred during first quarter 2011 that had a material effect on the information relating to quantitative and qualitative disclosures about market risk that was provided in the company’s Annual Report on Form 10-K for the year ended December 31, 2010.

CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Disclosure controls are controls and other procedures that are designed to ensure that information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, to allow timely decisions regarding required disclosure. The company’s principal executive officer and principal financial officer have concluded that the company’s disclosure controls and procedures were effective as of March 31, 2011, based on an evaluation of the company’s disclosure controls and procedures as of that date.

CHANGES IN INTERNAL CONTROLS

No changes occurred in the company’s internal control over financial reporting during first quarter that have materially affected, or are reasonably likely to materially affect, the company’s internal control over financial reporting.

LEGAL PROCEEDINGS

Refer to “Notes to Consolidated Financial Statements – Note 11: Legal Proceedings, Commitments and Contingencies.”

RISK FACTORS

There have been no significant changes during first quarter 2011 to risk factors presented in the company’s 2010 Annual Report on Form 10-K.

EXHIBITS



3.1		Articles of Incorporation of Weyerhaeuser Company

3.2		Bylaws of Weyerhaeuser Company

10.1		Form of Weyerhaeuser Company 2004 Long-Term Incentive Plan Performance Share Award Terms and Conditions

10.2		Form of Weyerhaeuser Company 2004 Long-Term Incentive Plan Restricted Stock Award Terms and Conditions

10.3		Form of Weyerhaeuser Company 2004 Long-Term Incentive Plan Stock Option Award Terms and Conditions

12.		Statements regarding computation of ratios

31.		Certification pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended

32.		Certification pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350)

100.INS		XBRL Instance Document

100.SCH		XBRL Taxonomy Extension Schema Document

100.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

100.DEF		XBRL Taxonomy Extension Definition Linkbase Document

100.LAB		XBRL Taxonomy Extension Label Linkbase Document

100.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

Exhibit 3.1

ARTICLES OF INCORPORATION OF

WEYERHAEUSER COMPANY

ARTICLE I

The name of this corporation shall be “Weyerhaeuser Company.”

ARTICLE II

The purposes for which this corporation is organized are:

1. To engage in any form of mining, manufacturing, mercantile, financial, transportation, real estate, recreation or service enterprise not contrary to law.

2. Without limiting the generality of the foregoing, to engage in:

(a) The construction, maintenance and operation of logging roads, chutes, flumes, and artificial watercourses or waterways and other ways for the transportation of logs and other timber products;

(b) Catching, booming, sorting, rafting and holding logs, lumber or other timber products;

(c) Clearing out and improvement of rivers and streams and driving, sorting, holding and delivering logs and other timber products;

(d) Constructing, operating or maintaining telegraph, telephone and other communication or electronic facilities; and

(e) Building, equipping and operating railway, road or bridge, canal, airport or other forms of land, water and air transportation facilities.

ARTICLE III

1. The aggregate number of shares which this corporation is authorized to issue shall be 1,407,000,000, consisting of 7,000,000 preferred shares having a par value of $1.00 per share, 40,000,000 preference shares having a par value of $1.00 per share, and 1,360,000,000 common shares having a par value of $1.25 per share. Shares redeemed, purchased or otherwise reacquired, or surrendered to the corporation on conversion, shall have the status of authorized and unissued shares of the class of which they were a part when initially issued and may be reissued as part of the same or a different series of the same class of which they were a part when initially issued; unless, as part of the action of the Board of Directors taken to create any series, the Board of Directors restricts the right of reissuance, in which case such restricted right will be operative. Each two common shares having a par value of $1.875 per share heretofore authorized and issued is hereby changed into three common shares having a par value of $1.25 per share.

2. The Board of Directors is expressly vested with authority to divide the preferred shares and the preference shares into series, each of which shall be so designated as to distinguish the shares thereof from the shares of all other series and classes. All preferred shares shall be identical and all preference shares shall be identical, except in each case as to the following relative rights and preferences, as to which the Board of Directors may fix and determine variations among the different series of each class:

(a) The rate of dividend;

(b) Whether shares may be redeemed and, if so, the redemption price and the terms and conditions of redemption;

(c) The amount payable upon shares in the event of voluntary and involuntary liquidation, provided that the aggregate amount so payable with respect to all series of preferred shares shall not exceed $350,000,000;

(d) Sinking fund provisions, if any, for the redemption or purchase of shares;

(e) The terms and conditions, if any, on which shares may be converted;

(f) If permitted by the laws of the State of Washington, voting rights, if any.

3. The preferences, limitations and relative rights of the preferred shares of each series, the preference shares of each series and the common shares are as follows:

(a) Out of the funds of the corporation legally available for payment of dividends, the holders of the preferred shares of each series and the preference shares of each series shall be entitled to receive, when and as declared by the Board of Directors, cumulative dividends at the rate determined by the Board of Directors for such series, and no more. Dividends on the preferred shares and the preference shares shall accrue on a daily basis from such date as may be fixed by the Board of Directors for any series. Unless dividends at the rate prescribed for each series of preferred shares shall have been declared and paid or set apart for payment in full on all outstanding preferred shares for all past dividend periods and the current dividend period, no dividends shall be declared or paid upon any class of shares ranking as to dividends subordinate to the preferred shares, and no sum or sums shall be set aside for the redemption of preferred shares of any series (including any sinking fund payment therefor) or for the purchase, redemption (including any sinking fund payment therefor) or other acquisition for value of any class or series of shares ranking as to dividends or assets on a parity with or subordinate to any such series of preferred shares. Unless dividends at the rate prescribed for each series of preference shares shall have been declared and paid or set apart for payment in full on all outstanding preference shares for all past dividend periods and the current dividend period, no dividends shall be declared or paid upon any class of shares ranking as to dividends subordinate to the preference shares, and no sum or sums shall be set aside for the redemption of preference shares of any series (including any sinking fund payment therefor) or for the purchase, redemption (including any sinking fund payment therefor) or other acquisition for value of any class or series of shares ranking as to dividends or assets on a parity with or subordinate to any such series of preference shares. Accrued and unpaid dividends on the preferred shares and on the preference shares shall not bear interest.

(b) Out of any funds of the corporation legally available for dividends and remaining after full cumulative dividends upon all series of preferred shares and preference shares then outstanding shall have been paid or set apart for payment for all past dividend periods and the current dividend period, then, and not otherwise, the Board of Directors may declare and pay or set apart for payment dividends on the common shares, and the holders of preferred shares and preference shares shall not be entitled to share therein.

(c) In the event of voluntary or involuntary liquidation of the corporation, before any distribution of the assets shall be made to the holders of any class of shares ranking as to assets subordinate to the preferred shares, the holders of the preferred shares of each series shall be entitled to receive out of the assets of the corporation available for distribution to its shareholders the sum of (i) the amount per share determined by the Board of Directors as provided in paragraph 2(c) of this Article III, and (ii) the amount per share equal to all accrued and unpaid dividends thereon, such sum constituting the “preferential amount” for the preferred shares. If, in the event of such liquidation, the assets of the corporation available for distribution to its shareholders shall be insufficient to permit full payment to the holders of the preferred shares of each series of their respective preferential amounts, then such assets shall be distributed ratably among such holders in proportion to their respective preferential amounts. In the event of such liquidation, subject to such right of the holders of the preferred shares of each series, but before any distribution of the assets shall be made to the holders of any class of shares ranking as to assets subordinate to the preference shares, the holders of the preference shares of each series shall be entitled to receive out of the assets of the corporation available for distribution to its shareholders the sum of (i) the amount per share determined by the Board of Directors as provided in paragraph 2(c) of this Article III, and (ii) the amount per share equal to all accrued and unpaid dividends thereon, such sum constituting the “preferential amount” for the preference shares. If, in the event of such liquidation, after full payment of the preferential amounts of the preferred shares of each series, the assets of the corporation available for distribution to its shareholders shall be insufficient to permit full payment to the holders of the preference shares of each series of their respective preferential amounts, then such assets shall be distributed ratably among such holders in proportion to their respective preferential amounts. If, in the event of such liquidation, the holders of the preferred shares of each series and the preference shares of each series shall have received full payment of their respective preferential amounts, the holders of the common shares shall be entitled, to the exclusion of the holders of the preferred shares of each series and the preference shares of each series, to share ratably in all remaining assets of the corporation available for distribution to shareholders. Neither the consolidation nor merger of the corporation with or into any other corporation or corporations, the sale or lease of all or substantially all of the assets of the corporation, nor the merger or consolidation of any other corporation into and with the corporation, shall be deemed to be a voluntary or involuntary liquidation.

(d) Each outstanding preferred share shall be entitled to one vote, not as a class, on each matter submitted to a vote at a meeting of shareholders, and the holders of preference shares shall have no voting rights except as provided in this Article III, provided, however, that if the Board of Directors is permitted by law to vary voting rights as between series of a class, and does in fact do so, then the voting rights of any series of either class shall be those determined by the Board of Directors under paragraph 2(f) of this Article III. Notwithstanding the foregoing: (i) as long as any preferred shares shall be outstanding, the corporation will not, without the affirmative vote or consent in writing of at least two-thirds of the outstanding preferred shares, amend these

Articles of Incorporation for the purpose of, or take any other action to, (A) increase the aggregate number of preferred shares or shares of any other class ranking as to dividends or assets on a parity with or prior to the preferred shares, (B) change the designations, preferences, limitations, voting or other relative rights of the preferred shares or of any outstanding series of preferred shares, (C) effect an exchange, reclassification or cancellation of all or part of the preferred shares, (D) change the preferred shares into the same or a different number of shares, with or without par value of the same or any other class, or (E) cancel or otherwise affect dividends on the shares of any series of preferred shares which have accrued but have not been declared, and (ii) as long as any preference shares shall be outstanding, the corporation will not, without the affirmative vote or consent in writing of at least two-thirds of the outstanding preference shares, amend these Articles of Incorporation for the purpose of, or take any other action to, (A) increase the aggregate number of preferred or preference shares or shares of any other class ranking as to dividends or assets on a parity with or prior to the preference shares, (B) change the designations, preferences, limitations, voting or other relevant rights of the preference shares or of any outstanding series of preference shares, (C) effect an exchange, reclassification or cancellation of all or part of the preference shares, (D) change the preference shares into the same or a different number of shares, with or without par value, of the same or another class, or (E) cancel or otherwise affect dividends on the shares of any series of preference shares which have accrued but have not been declared.

(e) Whenever dividends on the preferred shares shall be in arrears in an aggregate amount equal to at least six quarterly dividends thereon, whether or not consecutive, then the holders of the preferred shares, voting as a class, shall be exclusively entitled to elect two additional directors beyond the number specified in the bylaws to be elected from time to time by all shareholders and beyond the number specified in this paragraph (e) to be elected by holders of the preference shares. Whenever dividends on the preference shares shall be in arrears in an aggregate amount equal to at least six quarterly dividends thereon, whether or not consecutive, then the holders of the preference shares, voting as a class, shall be exclusively entitled to elect two additional directors beyond the number specified in the bylaws to be elected from time to time by all shareholders and beyond the number specified in this paragraph (e) to be elected by holders of the preferred shares.

(f) At any time when the holders of a class of shares become entitled as a class to elect additional directors pursuant to paragraph 3(e) of this Article III (the “special voting rights”), the maximum authorized number of members of the Board of Directors shall automatically be increased by the number of such directors specified in such paragraph 3(e) and the vacancies so created shall be filled only by vote of the holders of such class as hereinafter set forth. Whenever the special voting rights of a class shall have vested, such rights may be exercised initially either at a special meeting of the holders of such class called as hereinafter provided or at any annual meeting of shareholders held for the purpose of electing directors, and thereafter at such annual meetings. If, at the time of the vesting of the special voting rights of a class, the date fixed for the next annual meeting of shareholders is not within 90 days of such time, the president of the corporation shall call a special meeting of the holders of such class. Such special meeting shall be held at the earliest practicable date upon the notice required and at the place designated for annual meetings of shareholders. If such special meeting shall not be called by the president within 20 days after the special voting rights of such class shall have vested, holders of not less than one-tenth of the shares of such class entitled to vote at such special meeting may call such special meeting at the expense of the corporation. Any holder of shares of a class, the special voting rights

for which shall have vested, shall have access to the appropriate share ledger of the corporation for the purpose of causing such special meeting to be so called. At any annual meeting of shareholders or at any special meeting at which the holders of a class of shares shall have special voting rights, 20% of the shares of such class entitled to special voting rights, represented in person or by proxy, shall constitute a quorum for such class. At any such meeting or adjournment thereof, (i) the absence of a quorum of a class of shares having special voting rights shall not prevent the election of directors, if any, to be elected pursuant to other special voting rights or pursuant to other than special voting rights, and the absence of a quorum of shares for the election of directors pursuant to other than special voting rights shall not prevent the election of directors pursuant to special voting rights, and (ii) in the absence of one or more of such quorums, a majority of the holders, represented in person or by proxy, of each class of shares which lacks a quorum shall have power to adjourn the meeting for the election of directors which they are entitled to elect, from time to time, without notice other than announcement at the meeting, until a quorum shall be present. If the office of any director elected pursuant to the special voting rights of a class becomes vacant by reason of death, resignation, retirement, disqualification, removal from office, or otherwise, the remaining director or directors elected pursuant to the special voting rights of such class shall choose a successor who shall hold office for the unexpired term in respect of which such vacancy occurred. The special voting rights of a class shall continue until all arrears in payment of quarterly dividends on such class shall have been paid and the dividends thereon for the current quarter shall have been declared and paid or set apart for payment. Upon any termination of the special voting rights of a class, the term of office of the directors then in office elected pursuant thereto shall terminate immediately and the maximum authorized number of members of the Board of Directors shall automatically be reduced accordingly.

(g) Subject to any applicable provision of law or this Article III, the corporation shall have the right to purchase, or otherwise reacquire, at public or private sale or otherwise any shares of any class, except that no preferred shares shall be purchased unless dividends on all preferred shares have been declared and paid or set apart for payment in full for all past dividend periods and no preference shares shall be purchased unless dividends on all preference shares have been declared and paid or set apart for payment in full for all past dividend periods.

4. The Board of Directors may from time to time authorize the issuance of shares of this corporation, whether now or hereafter authorized, without first offering such shares to the shareholders of this corporation.

ARTICLE IV

The time of the existence of this corporation shall be perpetual.

ARTICLE V

1. The business and affairs of the corporation shall be managed under the direction of a Board of Directors consisting of not fewer than nine (9) nor more than thirteen (13) directors, the exact number to be fixed from time to time by resolution adopted by the affirmative vote of a majority of the entire Board of Directors. Whenever used in these Articles of Incorporation, the phrase “entire Board of Directors” shall mean that number of directors fixed by the most recent resolution adopted pursuant to the preceding sentence prior to the date as of which a determination of the

number of directors then constituting the entire Board of Directors shall be relevant for any purpose under these Articles of Incorporation At each annual meeting of shareholders of the corporation, the successors to each director whose term expires at that meeting shall be elected to hold office for a term expiring at the next annual meeting of shareholders.

2. Any vacancy occurring in the Board of Directors and any newly created directorship resulting from any increase in the number of directors shall be filled solely by the affirmative vote of a majority of the remaining directors then in office, even though less than a quorum of the Board of Directors. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director.

3. Any director may be removed from office with or without cause only by the affirmative vote of the holders of a majority of the voting capital stock

4. Advance notice of nominations for the election of directors, other than by the Board of Directors or a committee thereof, shall be given within the time and in the manner provided in the bylaws.

5. Notwithstanding the foregoing, whenever the holders of any one or more classes or series of preferred or preference shares or of any other class or series of shares issued by the corporation shall have the right, voting separately by class or series, to elect directors under specified circumstances, the election, term of office, filling of vacancies and other features of such directorships shall be governed by the terms of these Articles of Incorporation applicable thereto, and such directors so elected shall not be classified pursuant to this Article V.

ARTICLE VI

In all elections for directors, every shareholder shall have the right to vote in person or by proxy the number of shares of stock held by him for as many persons as there are directors to be elected. No cumulative voting for directors shall be permitted.

ARTICLE VII

Bylaws may be adopted, altered, amended or repealed or new bylaws enacted by the affirmative vote of a majority of the entire Board of Directors (if notice thereof is contained in the notice of the meeting at which such vote is taken or if all directors are present) or at any regular meeting of the shareholders (or at any special meeting thereof duly called for that purpose) by the affirmative vote of a majority of the shares represented and entitled to vote at such meeting (if notice thereof is contained in the notice of such meeting).

ARTICLE VIII

Notwithstanding any other provisions of law, these Articles of Incorporation (except as hereinafter provided) or the bylaws of the corporation, the affirmative vote of a majority of the entire Board of Directors and the affirmative vote of the holders of at least a majority of the votes entitled to be cast by the holders of all shares entitled to vote generally in the election of directors, voting together as a single class, shall be sufficient to approve any alteration, amendment or repeal of, or adoption of these Articles of Incorporation.

ARTICLE IX

Except as otherwise required by law and subject to the rights of the holders of any class of shares having a preference over the common shares as to dividends or upon liquidation, special meeting of shareholders of the corporation may be called by (i) the Board of Directors pursuant to a resolution adopted by the affirmative vote of a majority of the entire Board of Directors or (ii) upon the written request of the holders of at least twenty-five percent of the outstanding voting stock of the Corporation entitled to vote on the matter or matters to be brought before the proposed special meeting in accordance with the requirements set forth in the Bylaws of the corporation.

ARTICLE X

To the full extent the Washington Business Corporation Act permits the limitation or elimination of liability of directors, a director of this corporation shall not be personally liable to this corporation or its shareholders for monetary damages for conduct as a director, provided that, except as provided in the next succeeding sentence, this provision shall not eliminate or limit liability of the director (i) for acts or omissions that involve intentional misconduct by the director or a knowing violation of law by the director, (ii) for conduct violating Section 23B.08.310 of the Washington Business Corporation Act or any successor provision, or (iii) for any transaction from which the director will personally receive a benefit in money, property or service to which the director is not legally entitled. If the Washington Business Corporation Act is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of this corporation shall be eliminated or limited to the fullest extent permitted by the Washington Business Corporation Act, as so amended. Any repeal or modification of this Article by the shareholders of this corporation shall not adversely affect any right or protection of a director of this corporation, for or with respect to any action or omission of such director occurring prior to such amendment or repeal, existing at the time of such repeal or modification.

ARTICLE XI

This corporation may indemnify, including the making of advances of expenses and the making of contracts with directors with respect to indemnity, and may purchase and maintain insurance for, its directors, officers, trustees, employees, and other persons and agents, and (without limiting the generality of the foregoing) shall indemnify its directors, including the making of advances of expenses, against all liability, damage and expenses arising from or in connection with service for, employment by, or other affiliation with this corporation or other firms or entities to the maximum extent and under all circumstances permitted by law as then in effect.

Pursuant to Section 23B.08.560(2) of the Washington Business Corporation Act or any successor provision, the procedures for indemnification and the advancement of expenses set forth in the bylaws of the corporation are in lieu of the procedures requires by Section 23B.08.550 of the Washington Business Corporation Act or any successor provision.

ARTICLE XII

1. DEFINITIONS. For the purpose of this Article XII, the following terms shall have the following meanings:

“Aggregate Stock Ownership Limit” means, with respect to any Person, other than an Excepted Holder, 9.9% , in number of shares or value, of the outstanding shares of any class or series of Capital Stock, with such percentage being subject to adjustment pursuant to Sections 2.7(b) and 2.7(c) of this Article XII. In applying this Article XII, any questions as to value of any outstanding shares of any class or series of Capital Stock shall be resolved by the Board of Directors in good faith, which determination shall be conclusive for all purposes hereof.

“Beneficial Owner” means, with respect to any shares of Capital Stock, (i) any Person who owns such shares of Capital Stock, whether directly or indirectly, (ii) any Person for whose benefit such shares of Capital Stock are held through a nominee, (iii) any Person who would be treated as the owner of such shares of Capital Stock through the application of Section 544 of the Code, as modified by Section 856(h) of the Code, including, without limitation, interests that are issuable by this corporation pursuant to options, warrants or conversion rights, (iv) any Person who has, or would be considered to have, beneficial ownership (as that term is defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of such shares of Capital Stock or (v) any Person who exercises “investment discretion,” within the meaning of Rule 13f-1(b) under the Exchange Act, with respect to such shares of Capital Stock. The terms “Beneficially Own,” “Beneficially Owned,” “Beneficial Ownership,” “Beneficially Owning,” and “Beneficially Owns” have correlative meanings. All shares of Capital Stock Beneficially Owned by any Person, regardless of the form which such Beneficial Ownership takes, shall be aggregated in calculating the number of shares Beneficially Owned by such Person.

“Business Day” means any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions in the state of Washington are authorized or required by law, regulation or executive order to close.

“Capital Stock” means all classes or series of equity shares of this corporation, including, without limitation, common shares, preferred shares and preference shares.

“Charitable Beneficiary” means one or more beneficiaries of a Trust as determined pursuant to Section 3 of this Article XII.

“Code” means the Internal Revenue Code of 1986, as amended from time to time, or any successor thereto. References herein to particular sections of the Code shall be deemed to include applicable successor provisions to such sections.

“Constructive Ownership” means ownership of any shares of Capital Stock by a Person, whether the interest in the shares of Capital Stock is held directly or indirectly (including, without limitation, indirect ownership through a nominee), including, without limitation, interests that would be treated as owned through the application of Section 318(a) of the Code, as modified by Section 856(d)(5) of the Code. The terms “Constructive Owner,” “Constructively,” “Constructively Own,” “Constructively Owned,” and “Constructively Owns” have the correlative meanings.

“Event” has the meaning set forth in Section 2.1(b)(1) of this Article XII.

“Excepted Holder” means any Beneficial Owner or Constructive Owner of any shares of Capital Stock for whom an Excepted Holder Limit is created by the Board of Directors pursuant to Section 2.7 of this Article XII.

“Excepted Holder Limit” means the ownership limit established by the Board of Directors pursuant to Section 2.7 of this Article XII. An Excepted Holder Limit shall be subject to adjustment pursuant to Section 2.7 of this Article XII. An Excepted Holder Limit may be expressed, in the discretion of the Board of Directors, as one or more percentages or numbers of shares of Capital Stock, and may apply with respect to one or more classes or series of Capital Stock, or to all classes or series of Capital Stock in the aggregate.

“Initial Date” means the date on which these Articles of Amendment are accepted for record by the Secretary of State of the State of Washington; provided, however, that following any Restriction Termination Date, the term “Initial Date” means the date the Board of Directors determines that it is in the best interests of this corporation to attempt to qualify or requalify as a REIT.

“Market Price” means, with respect to any date and any class or series of outstanding shares of Capital Stock, the Closing Price for such shares of Capital Stock on such date. The “Closing Price” means, with respect to any day and any class or series of outstanding shares of Capital Stock, the last sale price for such shares of Capital Stock, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, for such shares of Capital Stock, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the NYSE or, if such shares of Capital Stock are not listed or admitted to trading on the NYSE, as reported on the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which such shares of Capital Stock are listed or admitted to trading or, if such shares of Capital Stock are not listed or admitted or trading on any national securities exchange, the last quoted price, or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by the National Association of Securities Dealers, Inc. Automated Quotation System or, if such system is no longer in use, the principal other automated quotation system that may then be in use or, if such shares of Capital Stock are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in such shares of Capital Stock selected by the Board of Directors or, in the event that no trading price is available for such shares of Capital Stock, the fair market value of such shares of Capital Stock, as determined in good faith by the Board of Directors.

“NYSE” means the New York Stock Exchange.

“Person” means an individual, corporation, partnership, limited liability company, estate, trust (including, without limitation, a trust qualified under Sections 401(a) or 501(c)(17) of the Code), a portion of a trust permanently set aside for or to be used exclusively for the purposes described in Section 642(c) of the Code, association, private foundation within the meaning of Section 509(a) of the Code, joint stock company or other entity or any government or agency or political subdivision thereof, and also includes a group as that term is used for purposes of Section 13(d)(3) of the Exchange Act. “Person” does not include an underwriter that participates in a public offering of any shares of Capital Stock for a period of 25 days following the purchase by such underwriter of such shares of Capital Stock.

“Prohibited Owner” means, with respect to any purported Transfer or Event, any Person who, but for the provisions of Section 2.1 of this Article XII, would Beneficially Own or Constructively Own additional shares of Capital Stock, and if appropriate in the context, also means any Person who would have been the record owner of the shares that the Prohibited Owner would have so owned.

“REIT” means a real estate investment trust within the meaning of Section 856 of the Code.

“Restriction Termination Date” means the first day after any Initial Date on which the Board of Directors determines that it is no longer in the best interest of this corporation to attempt to, or continue to, qualify as a REIT, or that compliance by holders of Capital Stock with each of the restrictions and limitations on Beneficial Ownership, Constructive Ownership and Transfers of shares of Capital Stock as provided in this Article XII is no longer in the best interests of this corporation.

“Transfer” means any direct or indirect sale, transfer, conveyance, gift, assignment, devise or other disposition by a Person, other than this corporation, that causes any Person to acquire Beneficial Ownership or Constructive Ownership of Capital Stock including, without limitation, (i) the granting or exercise of any option (or any disposition of any option), (ii) any disposition of any securities or rights convertible into or exchangeable for any shares of Capital Stock or any interest in any shares of Capital Stock or any exercise of any such conversion or exchange right and (iii) Transfers of interests in other entities that result in changes in Beneficial or Constructive Ownership, in each case, whether voluntary or involuntary, whether owned of record, Constructively Owned or Beneficially Owned and whether by operation of law or otherwise. The terms “Transferring” and “Transferred” have the correlative meanings.

“Treasury Regulations” means the regulations promulgated by the Secretary of the Treasury under the Code.

“Trust” means any charitable trust to which Sections 2.1(b) and 3 of this Article XII refer.

“Trustee” means any Person acting as trustee of a Trust.

2. RESTRICTIONS ON OWNERSHIP OF CAPITAL STOCK

2.1 Ownership Limitations. During the period commencing on the Initial Date and ending on the Restriction Termination Date:

(a) Basic Restrictions.

(1) Except as provided in Section 2.7 of this Article XIII, no Person, other than an Excepted Holder, may Beneficially Own or Constructively Own any shares of Capital Stock equal to or in excess of the Aggregate Stock Ownership Limit, and no Excepted Holder may Beneficially Own or Constructively Own any shares of Capital Stock equal to or in excess of the Excepted Holder Limit for such Excepted Holder.

(2) No Person may Beneficially Own shares of Capital Stock if such Beneficial Ownership of Capital Stock would result in this corporation (i) being “closely held” within the meaning of Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of a taxable year) or (ii) otherwise failing to qualify as a REIT.

(3) No Person may Constructively Own shares of Capital Stock if such Constructive Ownership would result in this corporation owning (actually or Constructively) an interest in a tenant that is described in Section 856(d)(2)(B) of the Code if the income derived by this corporation from such tenant would cause this corporation to fail to satisfy any of the gross income requirements of Section 856(c) of the Code.

(4) No Person may Transfer any Beneficial Ownership or Constructive Ownership of shares of Capital Stock, if, as a result of such Transfer, the Capital Stock would be beneficially owned by less than 100 Persons (determined under the principles of Section 856(a)(5) of the Code).

(5) No Person may Constructively Own shares of Capital Stock if such Constructive Ownership of Capital Stock would result in this corporation not being a “domestically controlled” REIT within the meaning of Section 897(h) of the Code.

(6) No Person may Beneficially Own shares of Capital Stock if such Beneficial Ownership of Capital Stock would result in this corporation being “pension-held” within the meaning of Section 856(h)(3)(D) of the Code.

(b) Transfer in Trust.

(1)(A) If there is any purported Transfer of shares of Capital Stock (whether or not such purported Transfer is the result of a transaction entered into through the facilities of the NYSE or any other national securities exchange or automated inter-dealer quotation system) or other purported event not constituting a Transfer (an “Event”) which, if effective, would result in any Person Beneficially Owning or Constructively Owning shares of Capital Stock in violation of any provision of Section 2.1(a) of this Article XII, then that number of shares of Capital Stock the Beneficial or Constructive Ownership of which would otherwise cause such violation (rounded to the nearest whole share) shall automatically be transferred to one or more Trusts for the benefit of a Charitable Beneficiary, as described in Section 3 of this Article XII, effective as of the close of business on the Business Day prior to the date of such purported Transfer or Event, and such Person shall acquire no rights in such shares, except as set forth in Section 3 of this Article XII.

(B) If the transfer to the Trust or Trusts described in clause (A) of this Section 2.1(b)(1) would not be effective for any reason to prevent the violation of any provision of Section 2.1(a) of this Article XII, then the Transfer of that number of shares of Capital Stock that otherwise would cause a violation of any provision of Section 2.1(a) of this Article XII shall be void ab initio, and the intended transferee shall acquire no rights in or to such shares of Capital Stock.

(2) In determining which shares of Capital Stock are to be transferred to a Trust in accordance with this Section 2.1(b) and Section 3 of this Article XII, such shares of Capital Stock shall be so transferred to a Trust in such manner as minimizes the aggregate value of such shares of Capital Stock that are transferred to the Trust (except to the extent that the Board of Directors determines that such shares of Capital Stock transferred to the Trust shall be those Beneficially Owned or Constructively Owned by a Person or Persons that caused or contributed to the application of this Section 2.1(b)), and to the extent not inconsistent therewith, on a pro rata basis.

(3) If, upon any transfer of shares of Capital Stock to a Trust pursuant to this Section 2.1(b), a violation of any provision of Section 2.1(a) of this Article XII would nonetheless be continuing, then shares of Capital Stock shall be transferred to that number of Trusts, each having a distinct Trustee and a Charitable Beneficiary or Beneficiaries that are distinct from those of each other Trust, such that there is no violation of any provision of Section 2.1(a) of this Article XII.

2.2 Remedies for Breach. If the Board of Directors determines, at any time, in good faith that a Transfer or Event has taken place that results in a violation of any provision of Section 2.1(a) of this Article XII, or that a Person intends to acquire or has attempted to acquire Beneficial Ownership or Constructive Ownership of any shares of Capital Stock in violation of any provision of Section 2.1(a) of this Article XII (whether or not such violation is intended), the Board of Directors shall take such action as it deems advisable to refuse to give effect to or to prevent such Transfer or Event (or any Transfer or Event related to such intent), including, without limitation, causing this corporation to redeem shares, refusing to give effect to such Transfer on the books of this corporation, or instituting proceedings to enjoin such Transfer or Event; provided, however, that any Transfer or attempted Transfer or Event in violation of any provision of Section 2.1(a) of this Article XII shall automatically result in the transfer to the Trust described above, and, where applicable, such Transfer or Event shall be void ab initio as provided above irrespective of any action (or non-action) by the Board of Directors.

2.3 Notice of Restricted Transfer. Any Person who acquires or attempts or intends to acquire Beneficial Ownership or Constructive Ownership of any shares of Capital Stock in violation of any provision of Section 2.1(a) of this Article XII, or any Person who would have owned shares of Capital Stock but for the transfer of such shares of Capital Stock to a Trust pursuant to the provisions of Section 2.1(b) of this Article XII, shall immediately give written notice to this corporation of such event, or in the case of such a proposed or attempted transaction or Event, give at least 15 days’ prior written notice, and shall provide to this corporation such other information as this corporation may request in order to determine the effect, if any, of such Transfer on this corporation’s status as a REIT.

2.4 Owners Required to Provide Information. From the Initial Date and prior to the Restriction Termination Date:

(a) every Beneficial Owner of five percent (or such other lower percentage as required by the Code or the Treasury Regulations) or more of the outstanding number or value of shares of any class or series of Capital Stock, within 30 days after the end of each taxable year, shall give written notice to this corporation stating the name and address of such Beneficial Owner,

the number of shares of Capital Stock Beneficially Owned by such Beneficial Owner and a description of the manner in which such shares of Capital Stock are held. Each such Beneficial Owner shall provide to this corporation such additional information as this corporation may request in order to determine the effect, if any, of such Beneficial Ownership on this corporation’s status as a REIT and to ensure compliance with the Aggregate Stock Ownership Limit; and

(b) each Person who is a Beneficial Owner or Constructive Owner of any shares of Capital Stock, and each Person (including, without limitation, the shareholder of record) who is holding any shares of Capital Stock for a Beneficial Owner or Constructive Owner, shall provide to this corporation such information as this corporation may request, in good faith, in order to determine this corporation’s status as a REIT or for other tax or compliance reasons.

2.5 Remedies Not Limited. Except as set forth in Section 4 of this Article XII, nothing contained in this Article XII shall limit the authority of the Board of Directors to take such other action as it deems necessary or advisable to protect this corporation and the interests of its shareholders in preserving this corporation’s status as a REIT, including, without limitation, by lowering the Aggregate Stock Ownership Limit.

2.6 Ambiguity. In the case of an ambiguity in the interpretation or application of any of the provisions of this Article XII, including, without limitation, any definition contained in Section 1 of this Article XII, the Board of Directors shall have the power to determine the application of the provisions of this Article XII with respect to any situation based on the facts known to it. In the event that this Article XII requires any action by the Board of Directors and these Articles of Incorporation fails to provide specific guidance with respect to such action, the Board of Directors shall have the power to determine the action to be taken. Any reference in this Article XII to the Board of Directors includes any duly authorized committee thereof.

2.7 Exceptions and Modifications.

(a) The Board of Directors, subject to such terms, conditions, representations and undertakings as it deems appropriate, may, in its sole discretion, (i) exempt a Person (prospectively or retroactively) from the application of any of the provisions of Section 2.1(a) of this Article XII or (ii) establish an Excepted Holder Limit applicable to such Person; in each case, if such exception does not (A) result in this corporation being “closely held” within the meaning of Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of the taxable year), (B) cause the Capital Stock to be beneficially owned by less than 100 Persons (determined under the principles of Section 856(a)(5) of the Code), or (C) otherwise cause this corporation to fail to qualify as a REIT. Any Excepted Holder must agree to comply with any requirements established by the Board of Directors. Any violation or deemed violation of any such terms, conditions, representations or undertakings (or other action that is contrary to the restrictions contained in Sections 2.1 through 2.6 of this Article XII) will result in such Person, and any shares of Capital Stock that such Person may Beneficially Own or Constructively Own, or in which it may otherwise hold any direct or indirect interest, being subject to the provisions of Section 2.1(b) of this Article XII.

(b) The Board of Directors may, in its sole discretion, increase (i) the Excepted Holder Limit then applicable to one or more Excepted Holders or (B) the Aggregate Stock

Ownership Limit; in each case, if such increase does not (A) result in this corporation being “closely held” within the meaning of Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of the taxable year), (B) cause the Capital Stock to be beneficially owned by fewer than 100 Persons (determined under the principles of Section 856(a)(5) of the Code), or (C) otherwise cause this corporation to fail to qualify as a REIT.

(c) The Board of Directors may, in its sole discretion, reduce (i) the Excepted Holder Limit then applicable to one or more Excepted Holders, but in no case shall the Board of Directors reduce the Excepted Holder Limit with respect to any class or series of Capital Stock to a percentage less than the Aggregate Stock Ownership Limit that is then applicable, or (ii) the Aggregate Stock Ownership Limit.

(d) Prior to granting any exception pursuant to any provision of Section 2.7 of this Article XII, the Board of Directors may require a ruling from the Internal Revenue Service, or an opinion of counsel, in either case in form and substance satisfactory to the Board of Directors in its sole discretion, as it may deem necessary or advisable

2.8 Written Notice or Legend.

(a) Except as provided in the next sentence, within a reasonable time after the issuance or transfer of uncertificated stock of this corporation, this corporation shall send or cause to be sent to the registered owner thereof a written notice stating substantially the following:

“The shares held in book-entry form evidenced by this statement are subject to certain ownership limitations and restrictions on transfer, as provided in the Articles of Incorporation of this corporation, and subject to such terms, conditions and exceptions as set forth therein. A copy of the Articles of Incorporation of this corporation may be obtained from this corporation without charge. A violation of these provisions could result in the shares evidenced by this statement being transferred to a trust for the benefit of a charitable beneficiary, or in a purported sale or other transfer of these shares being void.”

Instead of the foregoing statement, the written notice may state that this corporation will furnish a full statement about certain restrictions on ownership and transferability to a shareholder on request and without charge.

(b) Except as provided in the next sentence, each certificate issued after the Initial Date for shares of Capital Stock will bear substantially the following legend, or such other form of legend as determined by the Board of Directors:

“The shares represented by this certificate are subject to certain ownership limitations and restrictions on transfer, as provided in the Articles of Incorporation of this corporation, and subject to such terms, conditions and exceptions as set forth therein. A copy of the Articles of Incorporation of this corporation may be obtained from this corporation without charge. A violation of these provisions could result in the shares represented hereby being transferred to a trust for the benefit of a charitable beneficiary, or in a purported sale or other transfer of these shares being void.”

Instead of the foregoing legend, the certificate may state that this corporation will furnish a full statement about certain restrictions on ownership and transferability to a shareholder on request and without charge.

3. TRANSFER OF CAPITAL STOCK IN TRUST.

3.1 Ownership in Trust. Upon any purported Transfer or Event described in Section 2.1(b) of this Article XII that would result in a transfer of shares of Capital Stock to a Trust, such shares of Capital Stock shall be deemed to have been transferred to a Trustee, as trustee of such Trust, for the exclusive benefit of one or more Charitable Beneficiaries. Such transfer to the Trustee shall be deemed to be effective as of the close of business on the Business Day prior to the purported Transfer or Event that results in the transfer to the Trust pursuant to Section 2.1(b) of this Article XII. The Trustee shall be appointed by the Board of Directors and must be a Person unaffiliated with this corporation and the applicable Prohibited Owner. Each Charitable Beneficiary will be designated by the Board of Directors as provided in Section 3.6 of this Article XII. Any failure by the Board of Directors to so designate a Charitable Beneficiary will not affect the transfer of the shares of Capital Stock to the Trust.

3.2 Status of Shares Held by the Trustee. Shares of Capital Stock held by the Trustee shall be issued and outstanding shares of Capital Stock. The Prohibited Owner shall have no rights in the shares of Capital Stock held by the Trustee. Except to the extent expressly provided herein, the Prohibited Owner shall not benefit economically from ownership of any shares of Capital Stock held in the Trust by the Trustee, shall have no rights to dividends or other distributions in respect of any shares of Capital Stock held in the Trust by the Trustee, and shall not possess any rights to vote or other rights attributable to the shares of Capital Stock held in the Trust by the Trustee.

3.3 Dividend and Voting Rights. The Trustee shall have all voting rights and rights to dividends or other distributions with respect to shares of Capital Stock held in the Trust, which rights shall be exercised for the exclusive benefit of the Charitable Beneficiary. Any dividend or other distribution paid prior to the discovery by this corporation that the shares of Capital Stock have been transferred to the Trustee shall be paid by the recipient of such dividend or distribution to the Trustee upon demand and any dividend or other distribution authorized but unpaid shall be paid when due to the Trustee. Any dividend or distribution so paid to the Trustee shall be held in trust for the Charitable Beneficiary. The Prohibited Owner shall have no voting rights with respect to shares of Capital Stock held in the Trust and, subject to the laws of the state of Washington, effective as of the date that the shares of Capital Stock have been transferred to the Trustee, the Trustee shall have the authority (at the Trustee’s sole discretion) to rescind as void any vote cast by a Prohibited Owner prior to the discovery by this corporation that the shares of Capital Stock have been transferred to the Trustee for the benefit of the Charitable Beneficiary; provided, however, that if this corporation has already taken irreversible corporate action, then the Trustee shall not have the authority to rescind and recast such vote. Notwithstanding the provisions of this Article XII, until this corporation has received notification that shares of Capital Stock have been transferred into a Trust, this corporation shall be entitled to rely on its share transfer and other shareholder records for purposes of preparing lists of shareholders entitled to vote at meetings, determining the validity and authority of proxies and otherwise conducting votes of shareholders.

3.4 Sale of Shares by Trustee. Within 90 days of receiving notice from this corporation that shares of Capital Stock have been transferred to the Trust, but in an orderly fashion so as to not materially adversely affect the trading price of the same class or series of such shares of Capital Stock, the Trustee of the Trust shall sell such shares of Capital Stock held in the Trust to a Person, designated by the Trustee, whose ownership of such shares of Capital Stock will not violate any of the ownership restrictions set forth in Section 2.1(a) of this Article XII. Upon such sale, the interest of the Charitable Beneficiary in the shares sold will terminate and the Trustee shall distribute the net proceeds of the sale to the Prohibited Owner and to the Charitable Beneficiary as provided in this Section 3.4 of this Article XII. The Prohibited Owner shall receive the lesser of (1) the price paid by the Prohibited Owner for the shares of Capital Stock (or, in the case the Prohibited Owner did not give value for the shares of Capital Stock in connection with the Transfer or Event causing such shares of Capital Stock to be held in a Trust (e.g., in the case of a gift, devise or other such transaction), the Market Price of such shares of Capital Stock on the day of the Transfer or Event that caused such shares of Capital Stock to be held in the Trust) and (2) the price per share received by the Trustee (net any commissions and other expenses of sale) from the sale of such shares of Capital Stock or other disposition of such shares of Capital Stock held in the Trust. Any net sales proceeds in excess of the amount payable to the Prohibited Owner shall be immediately paid to the Charitable Beneficiary. If, prior to the discovery by this corporation that shares of Capital Stock have been transferred to the Trustee, such shares of Capital Stock are sold by a Prohibited Owner, then (i) such shares of Capital Stock shall be deemed to have been sold on behalf of the Trust and (ii) to the extent that the Prohibited Owner received an amount for such shares of Capital Stock that exceeds the amount that such Prohibited Owner was entitled to receive pursuant to this Section 3.4, such excess shall be paid to the Trustee upon demand.

3.5 Purchase Right in Stock Transferred to the Trustee. Shares of Capital Stock transferred to the Trustee shall be deemed to have been offered for sale to this corporation, or its designee, at a price per share equal to the lesser of (i) the price per share in the transaction that resulted in such transfer to the Trust (or, in the case the Prohibited Owner did not give value for such shares of Capital Stock in connection with the Transfer or Event causing such shares of Capital Stock to be held in a Trust (e.g., in the case of a gift, devise or other similar transaction), the Market Price of such shares of Capital Stock on the day of the Transfer or Event that caused such shares of Capital Stock to be held in a Trust) and (ii) the Market Price on the date that this corporation, or its designee, accepts such offer. The Corporation has the right to accept such offer until the Trustee has sold the shares of Capital Stock held in the Trust pursuant to Section 3.4 of this Article XII. Upon such a sale to this corporation, the interest of the Charitable Beneficiary in the shares of Capital Stock sold shall terminate and the Trustee shall distribute the net proceeds of the sale to the Prohibited Owner and the Charitable Beneficiary in the manner provided in Section 3.4 of this Article XII.

3.6 Designation of Charitable Beneficiaries. By written notice to the Trustee, the Board of Directors shall, in its sole discretion, designate one or more organizations to be the Charitable Beneficiary of the interest in any Trust created pursuant to this Section 3 of this Article XII, such that the shares of Capital Stock held in the Trust would not violate the restrictions set forth in Section 2.1(a) of this Article XII in the hands of such Charitable Beneficiary. Any such organization designated as a Charitable Beneficiary by the Board of Directors pursuant to this Section 3.6 of this Article XII must be described in Section 501(c)(3) of the Code and contributions to such organization must be eligible for deduction under each of Sections 170(b)(1)(A), 2055 and 2522 of the Code.

4. NYSE TRANSACTIONS. Nothing in this Article XII shall preclude the settlement of any transaction entered into through the facilities of the NYSE or any other national securities exchange or automated inter-dealer quotation system. The fact that the settlement of any transaction is so permitted shall not negate the effect of any other provision of this Article XII and any transferee in such a transaction shall be subject to all of the provisions and limitations set forth in this Article XII.

5. ENFORCEMENT. The Corporation is authorized specifically to seek equitable relief, including, without limitation, injunctive relief, to enforce the provisions of this Article XII.

6. NON-WAIVER. No delay or failure on the part of this corporation or the Board of Directors in exercising any right hereunder shall operate as a waiver of any right of this corporation or the Board of Directors, as the case may be, except to the extent specifically waived in writing.

7. Severability. If any provision of this Article XII or any application of such provision is determined to be invalid by any court having jurisdiction over the issues, the validity of the remaining provisions shall not be affected and other applications of such provision shall be affected only to the extent necessary to comply with the determination of such court.

Exhibit 3.2

BYLAWS

WEYERHAEUSER COMPANY

(as amended through April 14, 2011)

ARTICLE I

PRINCIPAL OFFICE

The principal office of this corporation, and its registered office in the State of Washington, is the Weyerhaeuser Headquarters Building, 33663 Weyerhaeuser Way South, Federal Way, Washington.

The registered agent of the corporation is the Secretary of the corporation.

ARTICLE II

SHAREHOLDERS’ MEETINGS

1.(a) The annual meeting of shareholders at which the Directors are elected shall be held at 9:00 a.m. on the third Thursday in April at the registered office of the corporation, or at such other time or place within or without the State of Washington as may be designated by the Board of Directors, for the purpose of electing directors, and for the transaction only of such other business as is properly brought before the meeting, in accordance with these bylaws.

(b) To be properly brought before the meeting, business must be of a nature that is appropriate for consideration at an annual meeting and must be (i) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (ii) otherwise properly brought before the meeting by or at the direction of the Board of Directors, or (iii) otherwise properly brought before the meeting by a shareholder entitled to vote on the relevant item of business.

(c) In addition to any other applicable requirements, for business (other than nominations for the election of directors, which are governed by Sections 2 and 3 of Article III), to be properly brought before the annual meeting by a shareholder, the shareholder must have given timely notice thereof in writing to the Secretary of the corporation. To be timely, each such notice must be given, either by personal delivery or by United States mail, postage prepaid, to the Secretary of the corporation, not less than 90 days nor more than 120 days prior to the meeting; provided , however , that in the event that less than 100 days’ notice or prior public disclosure of the date of the meeting is given or made to shareholders, notice by the shareholder to be timely must be so received not later than the close of business on the tenth day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure was made, whichever first occurs. Each such notice to the Secretary shall set forth as to each business the shareholder proposes to bring before the annual meeting (1) a brief description of such business and the reasons for conducting such business at the annual meeting and, in the event that such business includes a proposal to amend the bylaws of the corporation, the language of the proposed amendment, (2) the name and address of record of the shareholder proposing such business and the name and address of the beneficial owner of shares, if any, on whose behalf the business is being proposed (the “Beneficial Owner”), (3) a representation that the shareholder is a holder of record of shares of the corporation entitled to vote at such meeting and intends to appear in persons or by proxy at the meeting to propose such business, (4) the name of each person with

whom such shareholder or Beneficial Owner has any agreement, arrangement or understanding (whether written or oral) for the purpose of acquiring, holding, voting (except pursuant to a revocable proxy given to such person in response to a public proxy or consent solicitation made generally by such person to all holders of shares of the corporation) or disposing of any shares of the corporation or to cooperate in obtaining, changing or influencing the control of the corporation (except independent financial, legal and other advisors acting in the ordinary course of their respective businesses), and a description of each such agreement, arrangement or understanding, and the name of each other person with whom such shareholder or Beneficial Owner is acting in concert with respect to the corporation, (5) a description of the material interest of the shareholder, any Beneficial Owner, each affiliate (as defined under Regulation 13D under the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the “Exchange Act”)) of such shareholder or Beneficial Owner, each person described under clause (4) above and each person (if any) nominated by such shareholder in compliance with Sections 2 and 3 of Article III for election as director to the Board of Directors (each person described in this clause (5), a “Covered Person”) in each item of business described pursuant to clause (1) above, (6) a list of the class or series and number of shares of the corporation that are owned of record or beneficially by each Covered Person and documentary evidence of such record or beneficial ownership, (7) a list of all derivative securities (as defined under Rule 16a-1 under the Exchange Act) and other derivatives or similar arrangements to which any Covered Person is a counterparty and relating to any shares of the corporation, a description of all economic terms of each such derivative securities and other derivatives or similar arrangements and copies of all agreements and other documents relating to each such derivative securities and other derivatives or similar arrangements, (8) a list of all transactions by any Covered Person involving any shares of the corporation or any derivative securities (as defined under Rule 16a-1 under the Exchange Act) or other derivatives or similar arrangements related to any shares of the corporation within 60 days of the date of the notice, (9) all other information that, as of the date of the notice, would be required to be filed on Schedule 13D (including the exhibits thereto) under the Exchange Act, by any Covered Person, regardless of whether such Covered Person has publicly filed or is required to file a Schedule 13D containing such information, and (10) if the shareholder or Beneficial Owner intends to solicit proxies in support of any of such shareholder’s proposals, a representation to that effect.

(d) Notwithstanding anything in these bylaws to the contrary, no business shall be transacted at the annual meeting except in accordance with the procedures set forth in this Section; , and the presiding officer of any annual meeting of shareholders may refuse to permit any business to be brought before an annual meeting without compliance with the foregoing procedures or if the shareholder or Beneficial Owner solicits proxies in support of such shareholder’s proposal without such shareholder having made the representation required by clause (10) of Section 1(c) of this Article II.

2.(a) Special meetings of shareholders may be called by (i) the Board of Directors pursuant to a resolution adopted by the affirmative vote of a majority of the entire Board of Directors (as defined in Section 1 of Article III) or (ii) upon the written request of the holders of at least 25% of the outstanding voting stock of the Corporation entitled to vote on the matter or matters to be brought before the proposed special meeting.

(b) A request for a special meeting shall be delivered personally or sent by registered mail to the Secretary of the Corporation at its principal executive offices and shall be signed and dated by each stockholder of record (or a duly authorized agent of such stockholder) requesting

the special meeting (each, a “Requesting Shareholder”), and shall include (i) the name and address of each Requesting Shareholder; (ii) the class and number of shares of the Corporation beneficially owned by each; (iii) a statement of the specific purpose or purposes of the special meeting, including the text of any resolutions proposed for consideration and, if the business includes a proposal to amend these Bylaws or the Articles of Incorporation, the language of the proposed amendment; (iv) the information required by Section 1(c) of this Article II or Article III, Section 2, as applicable; and (v) an acknowledgement by the Requesting Shareholders and the beneficial owners, if any, on whose behalf the special meeting request is being made that a disposition of shares of the Corporation’s capital stock owned of record or beneficially as of the date on which the special meeting request in respect of such shares is delivered to the Secretary that is made at any time prior to the special meeting shall constitute a revocation of such special meeting request with respect to such disposed shares.

(c) If the Board of Directors determines that the special meeting Request complies with the Corporation’s Articles of Incorporation and the provisions of these Bylaws and that the proposal to be considered or business to be conducted is a proper subject for shareholder action under applicable law, the Board of Directors shall call and send notice of a special meeting for the purpose set forth in the special meeting request. Special meetings of shareholders shall be held at such time and place as shall be stated in the notice of special meeting solely for such purpose or purposes as may be stated in the notice of said meeting; provided, however, that in the case of a special meeting requested by the shareholders, the date of any such special meeting shall be not later than 90 days after the special meeting request that satisfies the requirements of this Section 2 is received by the Secretary.

3. The record date for the determination of shareholders entitled to notice of and to vote at each annual or special meeting of shareholders shall be the close of business on the eighth Friday preceding each such meeting, provided, however, that the Board of Directors may by resolution fix a different record date for any particular meeting of shareholders.

4. Every shareholder shall furnish in writing to the principal transfer agent, his post office address at which notice of shareholders’ meetings and any other notices or communications pertaining to the corporation’s affairs or business may be served upon or mailed to him; and every shareholder shall forthwith advise the principal transfer agent in writing of any change of address.

ARTICLE III

DIRECTORS

1. The business and affairs of this corporation shall be managed under the direction of a Board of Directors consisting of not fewer than nine (9) nor more than thirteen (13) directors, the exact number to be determined from time to time by resolution adopted by the affirmative vote of a majority of the entire Board of Directors, each director to hold office until his successor shall have been elected and qualified. Notwithstanding the foregoing, in an election to which plurality voting does not apply, the term of a director who does not receive a majority of the votes cast in accordance with Section 4 of this Article III, but who was a director at the time of the election, shall terminate on the date that is the earliest of (i) 90 days from the date of the certification of the election results, (ii) the date on which a person is selected by the Board of Directors to fill the office held by such director, which selection shall be deemed to constitute the filling of a vacancy by the Board of Directors, and (iii) the date on which the director’s resignation is accepted by the Board of Directors. Whenever used in these bylaws, the phrase “entire Board of Directors” shall mean that number of directors fixed by the most recent resolution adopted pursuant to the preceding sentence prior to the date as of which a determination of the number of directors then constituting the entire Board of Directors shall be relevant for any purpose under these bylaws.

2. Subject to the rights of holders of any class or series of stock having a preference over the common shares as to dividends or upon liquidation, nominations for the election of directors may be made by the Board of Directors or a committee appointed by the Board of Directors or by any shareholder entitled to vote generally in the election of directors. However, nominations for the election of directors made by any shareholder entitled to vote generally in the election of directors shall be valid and effective only if written notice of such shareholder’s intent to make such nomination or nominations has been given, either by personal delivery or by United States mail, postage prepaid, to the Secretary of the corporation not less than 90 days nor more than 120 days prior to the meeting; provided, however, that in the event that less than 100 days’ notice or prior public disclosure of the date of the meeting is given or made to shareholders, notice by the shareholder to be timely must be so received not later than the close of business on the tenth day following the day on which such notice of the date of meeting was mailed or such public disclosure was made, whichever first occurs. Each such notice to the Secretary shall set forth:

(a) all of the information that is required to be included in a notice from a shareholder for bringing other business before the meeting under Section 1(c) of Article II; and

(b) any information relating to such shareholder and any Beneficial Owner that would be required to be disclosed in a proxy statement or other filing required to be made in connection with solicitations of proxies for the election of directors in a contested election pursuant to Section 14 of the Exchange Act ; and

(i) the name, age, business and residence addresses, and principal occupation or employment of each nominee,

(ii) a description of all agreements, arrangements or understandings (whether written or oral) between or among any of the shareholder, any Beneficial Owner, each nominee and any other person or persons (naming such person or persons) related to the nomination of each nominee that are to be made by the shareholder,

(iii) such other information regarding each nominee proposed by such shareholder as would be required to be made in connection with solicitations of proxies for election of directors in a contested election pursuant to Section 14 of the Exchange Act (including such person’s written consent to being named in the proxy statement as a nominee and serving as a director of the corporation if so elected), and

(iv) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings (whether written or oral) during the past three years, and any other material relationships, between or among such shareholder and Beneficial Owner, if any, and their respective affiliates and associates, or others acting in concert therewith, on the one hand, and each proposed nominee, and his respective affiliates and associates, or others acting in concert therewith, on the other hand, including without limitation all

information that would be required to be disclosed pursuant to Item 404 promulgated under Regulation S-K if the shareholder making the nomination and any Beneficial Owner or any affiliate or associate thereof or person acting in concert therewith, were the “registrant” for purposes of such rule and the nominee were a director or executive officer of such registrant; and

(d) with respect to each nominee for election or re-election to the Board of Directors, the completed and signed questionnaire, representation and agreement required by Section 3 of this Article III. The corporation may require any proposed nominee to furnish such other information as may reasonably be required by the corporation to determine the eligibility of such proposed nominee to serve as an independent director of the corporation or that could be material to a reasonable shareholder’s understanding of the independence, or lack thereof, of such nominee. If, after the shareholder has delivered the notice of nominations under this Section, any information required to be contained in such notice as described above changes prior to the date of the relevant meeting, such notice shall be deemed to be not in compliance with this Section and not effective unless such shareholder, within one calendar day of the date of the event causing such change in information, delivers to the Secretary of the corporation an updated notice containing such change. No person nominated by a shareholder of the corporation shall be eligible for election as a director of the corporation unless nominated by such shareholder in accordance with the provisions set forth in Sections 2 and 3 of this Article III. The presiding officer of the meeting may determine that a nomination was not made in accordance with such provisions, and if he should so determine, he shall so declare to the meeting and the defective nomination shall be disregarded.

3. To be eligible to be a nominee for election or reelection as a director of the corporation, a person must deliver (in accordance with the time periods prescribed for delivery of notice under Section 2 of this Article III) to the Secretary of the corporation at the principal executive offices of the corporation a written questionnaire with respect to the background and qualification of such person and the background of any other person or entity on whose behalf the nomination is being made (which questionnaire shall be provided by the Secretary upon written request) and a written representation and agreement (in the form provided by the Secretary upon written request), which agreement shall (a) provide that such person (i) is not and will not become a party to (A) any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how such person, if elected as a director of the corporation, will act or vote on any issue or question (a “Voting Commitment”) that has not been disclosed to the corporation or (B) any Voting Commitment that could limit or interfere with such person’s ability to comply, if elected as a director of the corporation, with such person’s fiduciary duties under applicable law, (ii) is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the corporation with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director that has not been disclosed therein, and (iii) in such person’s individual capacity and on behalf of any person or entity on whose behalf the nomination is being made, would be in compliance, if elected as a director of the corporation, and will comply with all applicable publicly disclosed corporate governance, conflict of interest, confidentiality and stock ownership and trading policies and guidelines of the corporation.

4. A nominee for director shall be elected or re-elected to the Board of Directors if the votes cast for such nominee’s election or re-election exceed the votes cast against such nominee’s

election or re-election. Shares otherwise present at the meeting, but for which there is an abstention, as to which no authority or direction to vote in the election is given or specified, or whose ballot is marked withheld shall not be deemed to be votes cast. Notwithstanding the foregoing, directors shall be elected by a plurality of the votes cast at any meeting of shareholders for which (i) the Secretary of the corporation has received a notice that a shareholder has nominated a person for election to the Board of Directors in compliance with the advance notice requirements for shareholder nominees for director set forth in the corporation’s bylaws and (ii) such nomination has not been withdrawn by such shareholder on or prior to the expiration of the time fixed in such bylaw for submitting nominations (a “contested election”). If the number of nominees for any election of directors exceeds the number of directors to be elected, the directors shall be elected by a plurality of the votes cast. If directors are to be elected by a plurality of the votes cast, shareholders shall not be permitted to vote against a nominee.

5. In the event that there shall be a vacancy on the Board of Directors, a person may be appointed as a director to fill such vacancy by vote of a majority of the entire Board of Directors. Any director appointed to fill a vacancy on the Board of Directors shall stand for election by the shareholders at the next annual meeting of shareholders.

6. Meetings of the Board of Directors, regular or special, may be held at any place within or without the State of Washington. The times and places for holding meetings of the Board of Directors may be fixed from time to time by resolution of the Board of Directors or (unless contrary to a resolution of the Board of Directors) in the notice of the meeting. Members of the Board of Directors may participate in a meeting of the Board of Directors by means of conference telephone or similar communication equipment by means of which all persons participating in the meeting can hear each other. Participation by such means shall constitute presence in person at a meeting.

7. The annual meeting of the Board of Directors may be held immediately following the adjournment of the annual meeting of shareholders at the place at which the annual meeting of shareholders is held or at such other time or place fixed by resolution of the Board of Directors.

8. Special meetings of the Board of Directors shall be held whenever called by the Chairman of the Board, the Chief Executive Officer, the President or the Secretary or by any two or more directors. Notice of each special meeting of the Board of Directors shall, if mailed, be addressed to each director at the address designated by him for that purpose or, if none is designated, at his last known address and be mailed on or before the third day before the date on which the meeting is to be held; or such notice shall be sent to each director at such address by telegraph, cable, wireless, telex or other electronic means of transmission, or be delivered to him personally, not later than the day before the date on which such meeting is to be held. Every such notice shall state the time and place of the meeting but need not state the purposes of the meeting, except to the extent required by law. If mailed, each notice shall be deemed given when deposited, with postage thereon prepaid, in a post office or official depository under the exclusive care and custody of the United States Postal Service. Such mailing shall be by first class mail.

ARTICLE IV

EXECUTIVE AND OTHER COMMITTEES

1.(a) The Board of Directors may, by resolution passed by a majority of the whole Board, designate three or more of their number to constitute an Executive Committee, and shall

include therein the Chairman of the Board. The Chairman of the Executive Committee shall be an independent Director. The Executive Committee, except to the extent limited in the aforesaid resolution or by law, shall have and exercise, in the interval between meetings of the Board of Directors, the authority and powers of the Board of Directors in the management of the business of the corporation.

(b) Meetings of the Executive Committee may be held at any time and at any place upon call of the Chairman of the Board or the Secretary or any two members of the Committee. Notice, which need not state the purpose of the meeting, shall be given orally, in writing or by telegraph, facsimile or other electronic means not less than 24 hours prior to the time of the holding of said meeting, except that if a meeting is held at a time and place fixed in a resolution of the Executive Committee or the Board of Directors, no notice shall be required. Members of the Executive Committee may participate in a meeting of the Executive Committee by means of conference telephone or similar communication equipment by means of which all persons participating in the meeting can hear each other. Participation by such means shall constitute presence in person at a meeting.

(c) Three of the members of the Executive Committee, or a majority of the members if a majority is greater than three, shall constitute a quorum for the transaction of business and the act of three of the members of the Executive Committee, or a majority of the members if a majority is greater than three, present at a meeting shall be the act of the Executive Committee. All action taken by the Executive Committee shall be reported to the next meeting of the Board of Directors, unless before such meeting a copy of said minutes shall have been given to each Director.

2.(a) The Board of Directors may, by resolution passed by a majority of the whole Board, define the powers, authority, and functions of, designate the number of members and name the Chairmen and other members of such other committees of the Board of Directors as the Board shall from time to time determine.

(b) Meetings of such a committee may be had at any time and at any place upon call of the Chairman of the committee, the Chairman of the Board or any other two members of the committee. Notice, which need not state the purpose of the meeting, shall be given orally, in writing or by telegraph, facsimile or other electronic means not less than twenty-four hours prior to the time of the holding of said meeting, except that if a meeting is held at a time and place fixed in a resolution of the Committee, or the Board of Directors, no notice shall be required. Members of such committees may participate in a meeting of the committee by means of conference telephone or similar communication equipment by means of which all persons participating in the meeting can hear each other. Participation by such means shall constitute presence in person at a meeting.

(c) A majority of the members of such a committee shall constitute a quorum of the committee for the transaction of its business and the act of a majority of the members of the committee present at a meeting shall be the act of the committee. All action taken by such a committee shall be reported to the next meeting of the Board of Directors, unless before such meeting a copy of the minutes of the committee meeting shall have been given to each Director.

ARTICLE V

OFFICERS

1. The officers of this corporation shall include those elected by the Board of Directors and those appointed by the Chief Executive Officer. The officers of this corporation to be elected by the Board of Directors shall be: a Chief Executive Officer, a President, one or more Executive Vice Presidents, one or more Senior Vice Presidents, a Secretary, a Treasurer, a General Counsel, a Chief Accounting Officer, and a Director of Taxes. The officers of this corporation which may from time to time be appointed by the Chief Executive Officer shall be the Vice Presidents and such additional officers and assistant officers of this corporation as he may determine.

2. At its annual meeting the Board of Directors shall elect such of the officers of this corporation as are to be elected by it and each such officer shall hold office until the next such annual meeting or until a successor shall have been duly elected and qualified or until his death, resignation, retirement or removal by the Board of Directors. A vacancy in any such office may be filled for the unexpired portion of the term at any meeting of the Board of Directors. Such of the officers of this corporation as are appointed by the Chief Executive Officer shall serve for such periods of time as he may determine or until a successor shall have been appointed or until his death, resignation, retirement or removal from office.

3. Any Director or officer may resign his office at any time. Such resignation shall be made in writing and delivered to and filed with the Secretary, except that a resignation of the Secretary shall be delivered to and filed with the Chief Executive Officer. A resignation so made shall be effective upon its delivery unless some other time be fixed in the resignation, and then from the date so fixed.

4. The Board of Directors may appoint and remove at will such agents and committees as the business of the corporation shall require, each of whom shall exercise such powers and perform such duties as may from time to time be prescribed or assigned by the Chief Executive Officer, the Board of Directors or by other provisions of these bylaws.

ARTICLE VI

POWERS AND DUTIES OF OFFICERS

1. The Chairman of the Board of Directors shall, when present, preside at all meetings of the Board of Directors and the shareholders. The Chairman, in consultation with the Board of Directors, may advise with and assist the Chief Executive Officer in any possible way, and shall perform such duties as may be assigned to him by the Board or the Chief Executive Officer.

2. The Chief Executive Officer of the corporation shall be vested with general authority and control of its affairs, and over the officers, agents and employees of the corporation, subject to the Board of Directors. He shall perform all the duties devolving upon him by law as the Chief Executive Officer of the corporation. He shall from time to time report to the Board of Directors any information and recommendations concerning the business or affairs of the corporation that may be proper or needed, and shall see that all orders and resolutions of the Board of Directors are carried into effect, and shall perform such other duties and services, not inconsistent with law or these bylaws, as pertain to his office, or as are required by the Board of Directors.

3.(a) The President, the Executive Vice Presidents, the Senior Vice Presidents and the Vice Presidents shall have and exercise such powers and discharge such duties as may from time to time be conferred upon and delegated to them respectively, by the Chief Executive Officer, or by these bylaws, or by the Board of Directors.

(b) In the absence of the Chief Executive Officer or in the case of his inability to act, the President, or in the absence of the President or in the case of his inability to act, the most senior Executive Vice President present, or in the absence or inability to act of any Executive Vice President, the most senior Senior Vice President present, shall be vested with all the powers and shall perform all the duties of said Chief Executive Officer during his absence or inability to act, or until his successor shall have been elected.

4.(a) The Treasurer shall attend to the collection, receipt and disbursement of all moneys belonging to the corporation. He shall have authority to endorse, on behalf of the corporation, all checks, notes, drafts, warrants and orders, and he shall have custody over all securities of the corporation. He shall have such additional powers and such other duties as he may from time to time be assigned or directed to perform by these bylaws or by the Board of Directors or by the Chief Executive Officer.

(b) The Assistant Treasurers, in the order of their seniority, shall have all of the powers and shall perform the duties of the Treasurer in case of the absence of the Treasurer or his inability to act, and shall have such other powers and duties as they may from time to time be assigned or directed to perform.

5.(a) The Secretary shall have the care and custody of the corporate and stock books and the corporate seal of the corporation. He shall attend all meetings of the shareholders, and, when possible, all meetings of the Board of Directors and of the Executive Committee, and shall record all votes and the minutes of all proceedings in books kept for that purpose. He shall sign such instruments in behalf of the corporation as he may be authorized by the Board of Directors or by law to do, and shall countersign, attest and affix the corporate seal to all certificates and instruments where such countersigning or such sealing and attestation are necessary to the true and proper execution thereof. He shall see that proper notice is given of all meetings of the shareholders of which notice is required to be given, and shall have such powers and duties as he may from time to time be assigned or directed to perform by these bylaws, by the Board of Directors or the Chief Executive Officer.

(b) The Assistant Secretaries, in the order of their seniority, shall have all of the powers and shall perform the duties of the Secretary in case of the absence of the Secretary or his inability to act, and shall have such other powers and duties as they may from time to time be assigned or directed to perform.

6. The General Counsel shall attend all meetings of the shareholders and, upon request, meetings of the Board of Directors and the Executive Committee of the corporation, and act as advisor thereof, and shall have general supervision of all legal matters of the corporation, and at all times be subject to the direction of the Chief Executive Officer and the Board of Directors of the corporation.

7.(a) The Chief Accounting Officer of the corporation shall have authority over and custody of the financial and property books and records of the corporation. He shall maintain adequate records of all assets, liabilities and transactions of the corporation; and shall have such additional powers and duties as he may from time to time be assigned or directed to perform by these bylaws or by the Board of Directors or by the Chief Executive Officer.

(b) The Assistant Controllers, in the order of their seniority, shall have all of the powers and shall perform the duties of the Controller in case of the absence of the Controller or his inability to act, and shall have such other powers and duties as they may from time to time be assigned or directed to perform.

ARTICLE VII

CERTIFICATES OF STOCK

1. Shares of the corporation may, but need not be, represented by certificates. All certificates of stock shall be in such form as shall be approved by the Board of Directors, shall be numbered in the order of their issue, shall be dated, shall be signed by the Chairman of the Board, the President, an Executive Vice President, a Senior Vice President, or a Vice President, and by the Secretary or an Assistant Secretary, provided, that where any such certificate is manually countersigned by a Registrar, other than the corporation or its employee, the signatures of the Chairman of the Board, President, Executive Vice President, Senior Vice President, Vice President, Secretary, or Assistant Secretary, and the Transfer Agent upon such certificates may be facsimiles. In case any officer or officers who shall have signed or whose facsimile signature or signatures shall have been used on any such certificate or certificates shall cease to be such officer or officers of the corporation, whether because of death, resignation, or otherwise, before such certificate or certificates shall have been delivered by the corporation, such certificate or certificates may nevertheless be issued and delivered by the corporation as though the person or persons who signed such certificate or certificates or whose facsimile signature or signatures were used thereon had not ceased to be such officer or officers of the corporation.

2. The corporation shall, if and whenever the Board of Directors so determines, maintain one or more transfer offices each in charge of a Transfer Agent designated by the Board of Directors where the shares of the corporation shall be directly transferable; and likewise, one or more registration offices each in charge of a Registrar designated by the Board of Directors where such certificates shall be registered. One person or corporation may be designated as both Transfer Agent and Registrar. When any such transfer and registration office or offices are maintained and the Transfer Agent or Agents and Registrar or Registrars shall have been designated for such office or offices, no certificate for shares of the corporation shall be valid unless countersigned by a Transfer Agent so designated and by a Registrar so designated.

3. Except as otherwise provided in the articles of incorporation or a resolution of the Board of Directors of this corporation, transfer of fractional shares shall not be made upon the records or books of the corporation, nor shall certificates for fractional shares be issued by the corporation.

4. The corporation may issue a new certificate in place of any certificate theretofore issued by it alleged to have been lost or destroyed. The Board of Directors shall require the owner of the lost, destroyed or mutilated certificate, or his legal representative, to give the corporation a bond in such sum and with such surety or sureties as it may direct, to indemnify the corporation against any claim that shall be made against it on account of the alleged loss or destruction of such certificate.

5. The Board of Directors may make such additional rules and regulations, not contrary to law or these bylaws, as it may deem expedient concerning the issue, transfer and registration of certificates for shares and of shares without certificates of the corporation. Within a reasonable time after the issuance or transfer of shares without certificates, the corporation shall send the shareholder a written statement of the information required on certificates by applicable law.

ARTICLE VIII

CONTRACTS

The Board of Directors may authorize any officer or officers, agent or agents, to enter into any contract or to execute and deliver any instrument in the name and on behalf of the corporation, and such authority may be general or confined to specific instances; and unless so authorized by the Board of Directors or by these bylaws, no officer, agent or employee shall have any power or authority to bind the corporation by any contract or undertaking, or to pledge its credit or to render it liable for any purpose or on any account.

ARTICLE IX

FISCAL YEAR

The fiscal year of this corporation shall be the period beginning with the opening of business on January 1 and ending with the close of business on December 31 of each year.

ARTICLE X

CORPORATE SEAL

The corporate seal shall be the one of which an impression is affixed in the left hand margin hereof, bearing the words:

“WEYERHAEUSER COMPANY

CORPORATE SEAL

STATE OF WASHINGTON”

ARTICLE XI

NOTICES AND WAIVERS

1. Whenever notice is required under these bylaws or by statute, and such notice is given by mail, the time of giving such notice shall be deemed to be the time when the same is placed in the United States mail, postage prepaid, and addressed to the party to be notified, at his last known address.

2. Any shareholder, officer, director or member of the Executive Committee may waive at any time any notice required to be given under these bylaws, either by separate writing or directly upon the face of the records.

ARTICLE XII

INDEMNIFICATION

1. This corporation shall indemnify any person who was or is a party or is threatened to be made a party to or is otherwise involved (including, without limitation, as a witness) in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative and whether formal or informal, by reason of the fact that the person is or was a director, officer or employee, or who is or was serving at the request of the corporation as a director, officer, partner, trustee, employee or agent of another foreign or domestic corporation, partnership, joint venture, trust, other enterprise, or employee benefit plan (hereinafter an “indemnitee”) against judgments, penalties, fines, settlements and reasonable expenses actually

incurred by the person in connection with such action, suit or proceeding to the fullest extent and in the manner set forth in and permitted by the Business Corporation Act of the State of Washington, and any other applicable law, as from time to time in effect. Such right of indemnification shall not be deemed exclusive of any other rights to which the person may be entitled apart from the foregoing provisions. For purposes of this Article “director, officer or employee” shall include persons who hold such positions in this corporation or in a wholly owned subsidiary, or hold, at the written request of an officer of this corporation, an equivalent position in another enterprise. The rights granted by this Article shall apply whether or not the person continues to be a director, officer or employee at the time liability or expense is incurred and shall inure to the benefit of the indemnitee’s heirs, executors and administrators. Notwithstanding any amendment or repeal of this Section, or of any amendment or repeal of the any of the procedures that may be established by the Board pursuant to this Section, any indemnitee shall be entitled to indemnification in accordance with the provisions of these Bylaws and those procedures with respect to any acts or omissions of the indemnitee occurring prior to the amendment or repeal. The right to indemnification conferred in this section shall be a contract right.

2. The right to indemnification conferred in this Article XII shall include the right to be paid by this corporation the expenses incurred in defending any proceeding in advance of its final disposition (hereinafter an “advancement of expenses”). An advancement of expenses shall be made upon delivery to this corporation of a written affirmation of the indemnitee of the indemnitee’s good faith belief that the indemnitee has met the standard of conduct described in RCW 23B.08.510 and an undertaking, by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined that the indemnitee did not meet the standard of conduct.

3. This corporation shall have power to the fullest extent permitted by the Business Corporation Act of the State of Washington to purchase and maintain insurance on behalf of any person who is, or was, a director, officer, employee or agent of this corporation or is or was serving at the request of this corporation as an officer, director, employee or agent of another corporation, partnership, joint venture, trust, other enterprise, or employee benefit plan against any liability asserted against him or incurred by him in any such capacity or arising out of his status as such, whether or not this corporation would have the power to indemnify the person against such liability under the provisions of Section 1 of this Article XII or under the Business Corporation Act of the State of Washington or any other provision of law.

ARTICLE XIII

AMENDMENT OF BYLAWS

These bylaws may be altered, amended or repealed or new bylaws enacted by (a) the affirmative vote of a majority of the entire Board of Directors (if notice of the proposed alteration or amendment is contained in the notice of the meeting at which such vote is taken or if all directors are present) or (b) at any regular meeting of the shareholders (or at any special meeting thereof duly called for that purpose) by the affirmative vote of a majority of the shares represented and entitled to vote at such meeting (if notice of the proposed alteration or amendment is contained in the notice of such meeting); provided, however, that Article III of these bylaws may be amended only by the affirmative vote a majority of the shares represented and entitled to vote at any regular meeting of the shareholders or at any special meeting thereof duly called for that purpose, the notice of which special meeting shall include the form of the proposed alteration or repeal or of the proposed new bylaws, or a summary thereof, except that any amendment required by law or

necessary or desirable to cure an administrative or technical deficiency may be made as provided in (a) or (b) above; and provided, further, that Article III of these bylaws shall be superseded and preempted by an amendment to the articles of incorporation of this corporation establishing majority voting requirements for the election of directors.

Exhibit 10.1

WEYERHAEUSER COMPANY

2004 LONG-TERM INCENTIVE PLAN

PERFORMANCE SHARE AWARD 2011

TERMS AND CONDITIONS

Pursuant to your Grant Notice (the “Grant Notice”) and these Performance Plan Award Terms and Conditions, Weyerhaeuser Company has granted you under its 2004 Long-Term Incentive Plan (the “Plan”) the number of Performance Plan Awards (“Awards”) indicated in your Grant Notice at the market value indicated in your Grant Notice. You may decline this Grant by notifying sally.wagner@weyerhaeuser.com within one month of the grant date. In the event you decline this Grant, you will not be entitled to any award, benefit, or other compensation in lieu thereof.

Capitalized terms not explicitly defined in this document but defined in the Plan have the definitions given to such terms in the Plan. Awards represent the Company’s unfunded and unsecured promise to issue shares of Company Common Stock to you at a future date based upon satisfaction of certain performance criteria, subject to the terms of this document and the Plan. You have no rights under the Awards other than the rights of a general unsecured creditor of the Company. In addition, the Awards have the following terms and conditions:

1. Vesting. You can earn the Awards based on the Company’s performance in achieving business targets over the two-year performance period. The performance period begins on January 1, 2011 and ends on December 31, 2012. In the first year, achievement will be measured based on one-year cash flow goals. Performance will be increased or decreased as much as 20% by the Company’s relative total shareholder return over the two-year performance period compared to the S&P 500 Index. The maximum number of shares that can be earned under this award is 150% of target.


Year 1 Performance – Cash Flow		Year 2 Performance – Total Shareholder Rank vs. S&P 500
Performance Achieved	% of Target Earned	Weyerhaeuser TSR Percentile Rank	Modifier
Below minimum performance	0%	25 ^th percentile or lower	-20%
Minimum (threshold performance)	80%	50 ^th percentile	0%
Target performance	100%	75 ^th percentile or higher	+20%
Maximum performance	150%

Subject to the provisions of Section 3, the following vesting schedule will apply to the Awards earned in accordance with the schedule above (the “earned Awards”): The earned Awards will vest over a period of four years. No part of the earned Awards will vest until the two-year anniversary of the Grant Date. On the two-year anniversary of the Grant Date, 50% of the

earned Awards will vest, with an additional 25% of the earned Awards vesting on each of the third and fourth anniversaries of the Grant Date, respectively. As of the fourth anniversary of the Grant Date, 100% of the earned Awards will be vested.

2. Conversion of Awards and Issuance of Shares. Upon each vesting of Awards pursuant to Section 1, one share of Company Common Stock shall be issued for each earned Award that vests on such date (the “Shares”), subject to the terms of the Plan and this document. Thereafter, the Company will subtract from the vested Shares the whole number of Shares necessary to satisfy any required Tax Withholding Obligations as described in Section 9 hereof, and transfer the balance of the vested Shares to you. No fractional shares of Common Stock shall be issued under this Grant. Notwithstanding anything to the contrary, the delivery of vested Shares shall occur as soon as practicable after the vesting date specified in Section 1, but in all events by a date which is within 30 days following such date.

3. Termination of Employment; Death; Disability; Change in Control. In the event of your termination of employment, death or Disability or a Change in Control while Awards are outstanding, the following vesting and payment provisions will apply. Within 30 days following each applicable release date specified below, one share of Company Common Stock will be issued for each earned Award that is scheduled for release on such date, subject to the terms of the Plan and this document, and subject to any Tax Withholding Obligations as described in Section 9 hereof.

(a) Termination of Employment at Age 62. If you terminate employment at age 62 or older (such termination being referred to herein as “retirement”), and if clause (ii) in the second paragraph of Section 3(f) is not applicable, you will be entitled to receive all or a portion of your earned Awards as set forth below, to be released on the same dates as provided for in Sections 1 and 2. Specifically, the Awards will be released according to the following schedule:

If retirement is less than 6 months after Grant Date, you will receive 0% of the Awards. All of the Awards will be forfeited.

ii.

If retirement occurs at least 6 months after Grant Date but earlier than the first anniversary of the Grant Date, you will receive 25% of the Awards actually earned as of the end of 2012, to be available for release on the second anniversary of the Grant Date. The remaining 75% of the earned Awards will be forfeited.

iii.

If retirement occurs on or later than the first anniversary of the Grant Date but earlier than the second anniversary of the Grant Date, you will receive 50% of the Awards actually earned as of the end of 2012, to be available for release on the second anniversary of the Grant Date. The remaining 50% of the earned Awards will be forfeited.

iv.

If retirement occurs on or after the second anniversary of the Grant Date, you will receive 100% of the Awards actually earned as of the end of 2012: 50% of the earned Awards will be available for release on the second anniversary of the Grant Date, and an additional 25% of the earned Awards will be available for release on each of the third and fourth anniversaries of the Grant Date, respectively.

(b) Termination of Employment Due to Job Elimination. If your employment is involuntarily terminated due to the elimination of your position with the Company or any Related Company and if clause (ii) in the second paragraph of Section 3(f) is not applicable, you will be entitled to receive all or a portion of your earned Awards as set forth below, to be released on the same dates as provided for in Sections 1 and 2. Specifically, the Awards will be released according to the following schedule:

If such termination is less than 6 months after Grant Date, you will receive 0% of the Awards. All of the Awards will be forfeited.

ii.

If such termination occurs at least 6 months after Grant Date but earlier than the first anniversary of the Grant Date, you will receive 25% of the Awards actually earned as of the end of 2012, to be available for release on the second anniversary of the Grant Date. The remaining 75% of the earned Awards will be forfeited.

iii.

If such termination occurs on or later than the first anniversary of the Grant Date but earlier than the second anniversary of the Grant Date, you will receive 50% of the Awards actually earned as of the end of 2012, to be available for release on the second anniversary of the Grant Date. The remaining 50% of the earned Awards will be forfeited.

iv.

If such termination occurs on or later than the second anniversary of the Grant Date but earlier than the third anniversary of the Grant Date, you will receive 75% of the Awards actually earned as of the end of 2012: 50% of the earned Awards will be available for release on the second anniversary of the Grant Date, and an additional 25% of the earned Awards will be available for release on the third anniversary of the Grant Date. The remaining 25% of the earned Awards will be forfeited.

If such termination occurs on or after the third anniversary of the Grant Date, you will receive 100% of the Awards actually earned as of the end of 2012: 50% of the earned Awards will be available for release on the second anniversary of the Grant Date, and an additional 25% of the earned Awards will be available for release on each of the third and fourth anniversaries of the Grant Date, respectively.

(c) Termination of Employment for Other Reasons. If your employment is terminated before your Awards fully vest under Section 1 and none of the other provisions under Section 3 apply, any Awards that are not vested under Section 1 on the date of your termination are immediately forfeited.

you shall be required to promptly repay to the Company any Shares relating to such Awards that were previously paid to you during the period of investigation. If any facts that would constitute termination for Cause are discovered after your termination of service, any outstanding Awards may be immediately terminated by the Committee.

“Cause” means: (i) willful and continued failure to perform substantially your duties with the Company or any Related Company after the Company or Related Company delivers to you written demand for substantial performance specifically identifying the manner in which you have not substantially performed your duties; (ii) conviction of a felony; or (iii) willfully engaging in illegal conduct or gross misconduct that is materially and demonstrably injurious to the Company or any Related Company.

(e) Death or Disability. In the event of your death or Disability while actively employed, you will receive 100% of your Awards actually earned as of the end of 2012, determined pursuant to Section 1. If your death or Disability occurs before the second anniversary of the Grant Date, all such earned Awards will be released on the second anniversary of the Grant Date. If your death or Disability occurs on or after the second anniversary of the Grant Date, any remaining earned Awards not already released pursuant to Section 2 will be released as of the date of your death or Disability. In the event of your death, payment will be made to your estate.

As defined by the Company’s Retirement Plan for Salaried Employees, “Disability” means “a medical condition in which a Participant is either entitled to total and permanent disability benefits under the Social Security Act or judged to be totally and permanently disabled by the Administrative Committee or any person or committee delegated by the Administrative Committee to make such determinations”, provided, that only a condition which qualifies as a “disability” for purposes of Treas. Reg. § 1.409A-3(i)(4) (or any successor provision) will constitute a Disability for purposes of these Terms and Conditions.

(f) Change in Control. In the event a Change in Control occurs before the end of the performance period specified in Section 1, the target performance level will be deemed to have been achieved and you will be deemed to have earned 100% of your Awards.

Following a Change in Control, your earned Awards will vest over the period set forth in Section 1 and be released at the time set forth in Section 2, subject to the provisions of Section 3, provided, however, that: (i) your then outstanding earned Awards will immediately fully vest as of the effective date of the Change in Control in the event that the Awards are not assumed, converted or replaced by the successor entity to the Company, and will be released as of such date if such Change in Control qualifies as a “change in control event” for purposes of Treas. Reg. § 1.409A-3(i)(5) (or successor provisions) and (ii) your earned Awards will immediately fully vest and be released, subject to Section 15, as of the date of your separation from service (as defined in Treas. Reg. § 1.409A-1(h) (or successor provisions)), provided that such separation from service occurs within 24 full calendar months following the effective date of the Change in Control, and is either an involuntary separation by the Company (which term includes, for purposes of this Section 3(f), any Related Company and any successor entity) other than for Cause (as defined above in Section 3(d)) or a voluntary separation by you for Good Reason.

“Good Reason” means, without your express written consent, the occurrence of any one or more of the following events:

a material reduction in your authority, duties, or responsibilities existing immediately prior to the Change in Control;

ii.

within two years following a Change in Control, the Company’s requiring you to be based at a location that is at least 50 miles farther from your primary residence immediately prior to a Change in Control than is such residence from the Company’s headquarters immediately prior to a Change in Control, except for required travel on the Company’s business to an extent substantially consistent with your business obligations as of the Grant Date;

iii.

a material reduction by the Company of your base salary as in effect immediately prior to the Change in Control;

iv.

a material reduction in the benefits coverage in the aggregate provided to you immediately prior to the Change in Control; provided, however, that reductions in the level of benefits coverage will not be deemed to be “Good Reason” if your overall benefits coverage is substantially consistent with the average level of benefits coverage of other executives who have positions commensurate with your position at the acquiring company; or

a material reduction in your level of participation, including your target-level opportunities, in any of the Company’s short- and/or long-term incentive compensation plans in which you participate as of the Grant Date (for this purpose a material reduction shall be deemed to have occurred if the aggregate “incentive opportunities” are reduced by 10% or more); or a material increase in the relative difficulty of the measures used to determine the payouts under such plans; provided, however, that reductions in the levels of participation or increase in relative difficulty of payout measures will not be deemed to be “Good Reason” if your reduced level of participation or difficulty of measures in each such program remains substantially consistent with the level of participation or difficulty of the measures of some or all other executives who have positions commensurate with your position at the acquiring company.

In no event will your resignation be for Good Reason unless: (A) an event set forth above has occurred and you provide the Company with written notice thereof within 30 days after you have knowledge of the occurrence or existence of such event, which notice specifically identifies the event that you believe constitutes Good Reason, and (B) the Company fails to correct the event so identified in all material respects within 30 days after receipt of such notice.

4. Dividends. Except as otherwise specifically provided in this document, you will not be entitled to any rights of a shareholder with respect to any outstanding Awards. Notwithstanding the foregoing, if the Company declares and pays dividends on Common Stock during the time period when Awards are outstanding, you will be credited with additional amounts for each Award equal to the dividend that would have been paid with respect to such Award if it had been an actual share of Common Stock, which amount shall remain subject to restrictions (and as determined by the Administrator may be reinvested in Awards) and shall vest and be paid concurrently with the vesting and payment of the Awards upon which such dividend equivalent amounts were paid.

5. No Rights as Shareholder until Vesting and Issuance of Shares. You will not have any voting or any other rights as a shareholder of the Common Stock with respect to the outstanding Awards. Upon vesting of the Awards and issuance of shares of Common Stock, you will obtain full voting and other rights as a shareholder of the Company.

6. Securities Law Compliance. Notwithstanding any other provision of this award document, you may not sell the Shares acquired upon vesting and issuance of the Awards unless such Shares are registered under the Securities Act of 1933, as amended (the “Securities Act”), or, if such Shares are not then so registered, such sale would be exempt from the registration requirements of the Securities Act. The sale of such Shares must also comply with other applicable laws and regulations governing the Shares and you may not sell the Shares if the Company determines that such sale would not be in material compliance with such laws and regulations.

7. Non-Transferability of Awards. Notwithstanding any other provision of this award document, you may not sell, pledge, assign, hypothecate, transfer or dispose of your Awards in any manner prior to the distribution to you of shares of Company common stock in respect of such Awards. Awards shall not be subject to execution, attachment or other process. Notwithstanding the foregoing, pursuant to Section 3(e), Shares may be issued to your estate in the event of your death.

8. Independent Tax Advice. Determining the actual tax consequences of receiving or disposing of the Awards and Shares may be complicated. These tax consequences will depend, in part, on your specific situation and also may depend on the resolution of currently uncertain tax law and other variables not within the control of the Company. You should consult a competent and independent tax advisor for a full understanding of the specific tax consequences to you of receiving or disposing of Awards and Shares. You are encouraged to consult with a competent tax advisor independent of the Company to obtain tax advice concerning the receipt, vesting or disposition of the Awards or Shares in light of your specific situation.

9. Taxes and Withholding. You are ultimately liable and responsible for all taxes owed in connection with the Awards, including federal, state, local, FICA, or foreign taxes of any kind required by law, regardless of any action the Company takes with respect to any tax withholding obligations that arise in connection with the Awards. The Company makes no representation or undertaking regarding the treatment of any tax withholding in connection with the Grant or vesting of the Awards or the subsequent sale of Shares issuable pursuant to the Awards. The Company does not commit and is under no obligation to structure the Awards to reduce or eliminate your tax liability.

When an event occurs in connection with the Awards (e.g., vesting) that the Company determines results in any domestic or foreign tax withholding obligation, whether national, federal, state or local, including any social tax obligation (the “Tax Withholding Obligation”), to the extent required by law, and to the extent permitted by Section 409A, the Company may retain without notice from Shares issuable under the Awards or from salary or other amounts payable to you, whole Shares or cash having a value sufficient to satisfy your Tax Withholding Obligation.

The Company may refuse to issue any Shares to you until your Tax Withholding Obligation is satisfied.

10. Grant Not an Employment or Service Contract. Nothing in the Plan or any Award granted under the Plan will be deemed to constitute an employment contract or confer or be deemed to confer any right for you to continue in the employ of, or to continue any other relationship with, the Company or any Related Company or limit in any way the right of the Company or any Related Company to terminate your employment or other relationship at any time, with or without cause.

11. No Right to Damages. You will have no right to bring a claim or to receive damages if any portion of the Grant is forfeited. The loss of existing or potential profit in Awards will not constitute an element of damages in the event of your termination of service for any reason even if the termination is in violation of an obligation of the Company or a Related Company to you.

12. Binding Effect. The terms and conditions of this Grant will inure to the benefit of the successors and assigns of the Company and be binding upon you and your heirs, executors, administrators, successors and assigns.

13. Limitation on Rights; No Right to Future Grants; Extraordinary Item of Compensation. (a) The Plan is discretionary in nature and may be suspended or terminated by the Company at any time. (b) The Grant is a one-time benefit that does not create any contractual or other right to receive future grants of Awards. (c) All determinations with respect to any such future grants, including, but not limited to, the times when grants will be made, the number of Awards subject to each grant, the grant price, and the time or times when each grant will be exercisable, will be at the sole discretion of the Company. (d) Your participation in the Plan is voluntary. (e) The value of the Grant is an extraordinary item of compensation that is outside the scope of your employment contract, if any. (f) The Grant is not part of normal or expected compensation for purposes of calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments. (g) The vesting of the Grant ceases upon your termination of employment for any reason and any unvested Awards will be forfeited. (h) The future value of the Shares underlying the Grant is unknown and cannot be predicted with certainty.

14. Employee Data Privacy. By receiving this Grant, you: (a) authorize the Company and your employer, if different, and any agent of the Company administering the Plan or providing Plan recordkeeping services, to disclose to the Company or any of its affiliates any information and data the Company requests in order to facilitate the grant of the Award and the administration of the Plan; (b) waive any data privacy rights you may have with respect to such information; and (c) authorize the Company and its agents to store and transmit such information in electronic form.

on account of your separation from service for purposes of Section 409A will be made at the time specified above in these Terms and Conditions or, if later, on the date that is six months and one day following the date of your separation from service. To the extent that the Company determines that the Awards are subject to Section 409A and fail to comply with the requirements of Section 409A, the Company reserves the right (without any obligation to do so) to amend, restructure, terminate or replace the Awards in order to cause the Awards to either not be subject to Section 409A or to comply with the applicable provisions of Section 409A.

Exhibit 10.2

WEYERHAEUSER COMPANY

2004 LONG-TERM INCENTIVE PLAN

RESTRICTED STOCK AWARD 2011

TERMS AND CONDITIONS

Pursuant to your Grant Notice (the “Grant Notice”) and these Restricted Stock Award Terms and Conditions, Weyerhaeuser Company has granted you under its 2004 Long-Term Incentive Plan (the “Plan”) the number of restricted stock awards (“Awards”) indicated in your Grant Notice at the market value indicated in your Grant Notice. You may decline this Grant by notifying sally.wagner@weyerhaeuser.com within one month of the grant date. In the event you decline this Grant, you will not be entitled to any award, benefit, or other compensation in lieu thereof.

Capitalized terms not explicitly defined in this document but defined in the Plan have the definitions given to such terms in the Plan. Awards represent the Company’s unfunded and unsecured promise to issue shares of Company Common Stock to you at a future date, subject to the terms of this document and the Plan. You have no rights under the Awards other than the rights of a general unsecured creditor of the Company. In addition, the Awards have the following terms and conditions:

1. Vesting. Subject to the provisions of Section 3, the following vesting schedule will apply to the Awards. The Awards will vest over a period of four years. No part of the Awards will vest until the one-year anniversary of the Grant Date. On the one-year anniversary of the Grant Date, 25% of the Awards will vest, with an additional 25% of the Awards vesting on each of the second, third and fourth anniversaries of the Grant Date, respectively. As of the fourth anniversary of the Grant Date, 100% of the Awards will be vested.

Awards that have not vested in accordance with the preceding paragraph are subject to forfeiture as described in Section 3.

2. Conversion of Awards and Issuance of Shares. Upon each vesting of Awards pursuant to Section 1, one share of Company Common Stock shall be issued for each Award that vests on such date (the “Shares”), subject to the terms of the Plan and this document. Thereafter, the Company will subtract from the vested Shares the whole number of Shares necessary to satisfy any required Tax Withholding Obligations as described in Section 9 hereof, and transfer the balance of the vested Shares to you. No fractional shares of Common Stock shall be issued under this Grant. Notwithstanding anything to the contrary, the delivery of vested Shares shall occur as soon as practicable after the vesting date specified in Section 1, but in all events by a date which is within 30 days following such date.

3. Termination of Employment; Death; Disability; Change in Control. In the event of your termination of employment, death or Disability or a Change in Control while Awards are outstanding, the following vesting and payment provisions will apply. Within 30 days following each applicable release date specified below, one share of Company Common Stock will be issued for each Award that is scheduled for release on such date, subject to the terms of the Plan and this document, and subject to any Tax Withholding Obligations as described in Section 9 hereof.

(a) Termination of Employment at Age 62. If you terminate employment at age 62 or older (such termination being referred to herein as “retirement”) and if clause (ii) in the first paragraph of Section 3(f) is not applicable, you will be entitled to receive all or a portion of your Awards as set forth below, to be released on the same dates as provided for in Sections 1 and 2. Specifically, the Awards will be released according to the following schedule:

If retirement is less than 6 months after Grant Date, you will receive 0% of the Awards. All of the Awards will be forfeited.

ii.

If retirement occurs at least 6 months after Grant Date but earlier than the first anniversary of the Grant Date, you will receive 25% of the Awards, to be available for release on the first anniversary of the Grant Date. The remaining 75% of the Awards will be forfeited.

iii.

If retirement occurs on or later than the first anniversary of the Grant Date but earlier than the second anniversary of the Grant Date, you will receive 50% of the Awards, with 25% of the Awards available for release on each of the first and second anniversaries of the Grant Date, respectively. The remaining 50% of the Awards will be forfeited.

iv.

If retirement occurs on or later than the second anniversary of the Grant Date but earlier than the third anniversary of the Grant Date, you will receive 75% of the Awards, with 25% of the Awards available for release on each of the first, second and third anniversaries of the Grant Date, respectively. The remaining 25% of the Awards will be forfeited.

If retirement occurs on or after the third anniversary of the Grant Date, you will receive 100% of the Awards, with 25% of the Awards available for release on each of the first, second, third and fourth anniversaries of the Grant Date, respectively.

No Shares will be issued or issuable with respect to any portion of the Awards that are forfeited.

(b) Termination of Employment Due to Job Elimination. If your employment is involuntarily terminated due to the elimination of your position with the Company or any Related Company and if clause (ii) in the first paragraph of Section 3(f) is not applicable, you will be entitled to receive all or a portion of your Awards as set forth below, to be released on the same dates as provided for in Sections 1 and 2. Specifically, the Awards will be released according to the following schedule:

If such termination is less than 6 months after Grant Date, you will receive 0% of the Awards. All of the Awards will be forfeited.

ii.

If such termination occurs at least 6 months after Grant Date but earlier than the first anniversary of the Grant Date, you will receive 25% of the Awards, to be available for release on the first anniversary of the Grant Date. The remaining 75% of the Awards will be forfeited.

iii.

If such termination occurs on or later than the first anniversary of the Grant Date but earlier than the second anniversary of the Grant Date, you will receive 50% of the Awards, with 25% of the Awards available for release on each of the first and second anniversaries of the Grant Date, respectively. The remaining 50% of the Awards will be forfeited.

iv.

If such termination occurs on or later than the second anniversary of the Grant Date but earlier than the third anniversary of the Grant Date, you will receive 75% of the Awards, with 25% of the Awards available for release on each of the first, second and third anniversaries of the Grant Date, respectively. The remaining 25% of the Awards will be forfeited.

If such termination occurs on or after the third anniversary of the Grant Date, you will receive 100% of the Awards, with 25% of the Awards available for release on each of the first, second, third and fourth anniversaries of the Grant Date, respectively.

(d) Termination of Employment for Cause. If your employment is terminated for Cause, then notwithstanding anything to the contrary herein, including, but not limited to, Section 3(a), any outstanding Awards will be immediately forfeited at the time the Company or Related Company first notifies you of your termination for Cause. In addition, if your employment or service relationship is suspended pending an investigation of whether you will be terminated for Cause, payment of all outstanding Awards may be suspended during such period of investigation, but only to the extent permissible under Section 409A of the U.S. Internal Revenue Code (“Section 409A”) if applicable. If, at the conclusion of such investigation, your employment or service relationship is terminated for Cause, all outstanding Awards shall be immediately forfeited and you shall be required to promptly repay to the Company any Shares relating to such Awards that were previously paid to you during the period of investigation. If any facts that would constitute termination for Cause are discovered after your termination of service, any outstanding Awards may be immediately terminated by the Committee.

(e) Death or Disability. In the event of your death or Disability while actively employed, you will receive 100% of your Awards. Subject to Section 15, all Awards not already released pursuant to Section 2 above will be released as of the date of your death or Disability. In the event of your death, payment will be made to your estate.

(f) Change in Control. In the event of a Change in Control, your Awards will vest over the period set forth in Section 1 and be released at the time set forth in Section 2, subject to the provisions of Section 3, provided, however, that, subject to Section 15: (i) your then outstanding Awards will immediately fully vest and be released as of the date of the Change in Control in the event that the Awards are not assumed, converted or replaced by the successor entity to the Company, and (ii) your Awards will immediately fully vest and be released as of the date of your separation from service, provided that such separation from service occurs within 24 full calendar months following the effective date of the Change in Control and is either an involuntary separation by the Company (which term includes, for purposes of this Section 3(f), any Related Company and any successor entity) other than for Cause (as defined above in Section 3(d)) or a voluntary separation by you for Good Reason.

“Good Reason” means, without your express written consent, the occurrence of any one or more of the following events:

a material reduction in your authority, duties, or responsibilities existing immediately prior to the Change in Control;

ii.

iii.

a material reduction by the Company of your base salary as in effect immediately prior to the Change in Control;

iv.

undertaking regarding the treatment of any tax withholding in connection with the Grant or vesting of the Awards or the subsequent sale of Shares issuable pursuant to the Awards. The Company does not commit and is under no obligation to structure the Awards to reduce or eliminate your tax liability.

When an event occurs in connection with the Awards (e.g., vesting) that the company determines results in any domestic or foreign tax withholding obligation, whether national, federal, state or local, including any social tax obligation (the “Tax Withholding Obligation”), to the extent required by law, and to the extent permitted by Section 409A if applicable, the Company may retain without notice from Shares issuable under the Awards or from salary or other amounts payable to you, whole Shares or cash having a value sufficient to satisfy your Tax Withholding Obligation.

The Company may refuse to issue any Shares to you until your Tax Withholding Obligation is satisfied.

15. Compliance with Section 409A. To the extent that the Company determines that the Awards are subject to Section 409A, these Terms and Conditions will be interpreted and administered in such a way as to comply with the applicable provisions of Section 409A to the maximum extent possible. In addition, if the Awards are subject to Section 409A: (i) no payment will be made on account of your Disability pursuant to Section 3(e) unless such Disability qualifies as a “disability” for purposes of Treas. Reg. § 1.409A-3(i)(4) (or successor provisions), (ii) no payment will be made on account of a Change in Control pursuant to clause (i) in the first paragraph of Section 3(f) unless such Change in Control qualifies as a “change in control event” for purposes of Treas. Reg. § 1.409A-3(i)(5) (or successor provisions), (iii) a “separation from service” for purposes of these Terms and Conditions will mean a “separation from service” as defined in Treas. Reg. § 1.409A-1(h) (or successor provisions), and (iv) if you must be treated as a “specified employee” within the meaning of Section 409A, any payments made on account of your separation from service will be made at the time specified above in these Terms and Conditions or, if later, on the date that is six months and one day following the date of your separation from service. To the extent that the Company determines that the Awards are subject to Section 409A and fail to comply with the requirements of Section 409A, the Company reserves the right (without any obligation to do so) to amend, restructure, terminate or replace the Awards in order to cause the Awards to either not be subject to Section 409A or to comply with the applicable provisions of Section 409A.

Exhibit 10.3

WEYERHAEUSER COMPANY

2004 LONG-TERM INCENTIVE PLAN

STOCK OPTION AWARD 2011

TERMS AND CONDITIONS

Pursuant to your Stock Option Grant Notice (the “Grant Notice”) and these Stock Option Award Terms and Conditions, Weyerhaeuser Company has granted you an Option under its 2004 Long-Term Incentive Plan (the “Plan”) to purchase the number of shares of the Company’s Common Stock indicated in your Grant Notice (the “Shares”) at the exercise price indicated in your Grant Notice. You may decline this Grant by notifying sally.wagner@weyerhaeuser.com within one month of the grant date. In the event you decline this Grant, you will not be entitled to any award, benefit, or other compensation in lieu thereof.

Capitalized terms not explicitly defined in this document but defined in the Plan have the definitions given to such terms in the Plan. The Option is granted to you as a participant in the Plan and is subject to the terms and conditions set out in the Plan. In addition, the Option has the following terms and conditions:

1. Vesting. Subject to the provisions of Section 3, the Option will vest and become exercisable over a period of four years. No part of the Option will be exercisable until the one-year anniversary of the Grant Date. On the one-year anniversary of the Grant Date, 25% of the Option will vest and become exercisable, with an additional 25% of the Option vesting and becoming exercisable on each of the second, third and fourth anniversaries of the Grant Date, respectively. As of the fourth anniversary of the Grant Date, 100% of the Option will be vested and exercisable.

2. Term. The Options will expire on the date specified in your Grant Notice, which is the tenth anniversary of the Grant Date. Following that date, you will no longer be able to exercise the Option. In addition, as set forth in Section 3, the Option may terminate earlier than the tenth anniversary of the Grant Date if your employment with the Company and all Related Companies ceases for any reason. Transfer of employment between or among the Company and its subsidiaries is not considered termination of employment. Options that are not vested before their expiration date are forfeited and without value.

3. Termination of Employment; Death; Disability; Change in Control. In the event of your termination of employment, death or Disability or a Change in Control, the following vesting and expiration dates will apply.

(a) Termination of Employment at Age 62. If you terminate employment at age 62 or older and if clause (ii) in the first paragraph of Section 3(g) is not applicable, your Option will continue to vest according to the vesting schedule described above and you will be able to exercise any portion of your Option that has vested for the remaining term of the grant, up to a maximum of 10 years.

(b) Termination of Employment Due to Job Elimination. If your employment is involuntarily terminated due to the elimination of your position with the Company or any Related Company and if clause (ii) in the first paragraph of Section 3(g) is not applicable, your Option will continue to vest for one year following your termination. The remaining unvested portion of your Option as of the one-year anniversary of your termination date will be cancelled. You will be able to exercise the vested portion of your Option within a maximum of three years from the date of termination, or during the remaining term of the grant if that is a shorter period of time.

(c) Termination of Employment for Other Reasons. If your employment is terminated before your Option fully vests under Section 1 and none of the other provisions under Section 3 apply, any portion of your Option that is not vested under Section 1 on the date of your termination is immediately forfeited and no longer has any value. You will be able to exercise any portion of your Option that has vested as of the date of your termination for a maximum of three years from the date of termination, or during the remaining term of the grant if that is a shorter period of time.

(d) Termination of Employment for Cause. If your employment is terminated for Cause, then, notwithstanding anything to the contrary herein, including, but not limited to, Section 3(a), both the vested and nonvested portions of the Option will automatically expire at the time the Company or Related Company first notifies you of your termination for Cause, unless the Committee determines otherwise. If your employment or service relationship is suspended pending an investigation of whether you will be terminated for Cause, all your rights under the Option, including the right to exercise any vested portion of the Option, likewise will be suspended during the period of investigation. In no event will such a suspension extend the remaining term of the grant, even if it is ultimately determined that you will not be terminated for Cause. If any facts that would constitute termination for Cause are discovered after your Termination of Service, any Option you then hold may be immediately terminated by the Committee.

(e) Termination as a result of death of the Participant. During your lifetime, this Option may be exercised only by you. If you die while actively employed, your Option is automatically 100% vested and your beneficiary or, if there is no named beneficiary, your personal representative may exercise the Option at any time or from time to time within a maximum of three years after your date of death, or during the remaining term of the grant if that is a shorter period of time.

(f) Termination of Employment due to Disability . If your employment is terminated as a result of Disability while actively employed, your Option is automatically 100% vested. You will be able to exercise the Option within a maximum of three years from the date of termination, or during the remaining term of the grant if that is a shorter period of time.

The Option must be exercised within three months after termination of employment for reasons other than death or Disability and one year after termination of employment due to Disability to qualify for the beneficial tax treatment afforded Incentive Stock Options.

It is your responsibility to be aware of the date the Option terminates.

(g) Change in Control . In the event of a Change in Control, your Option will immediately become 100% exercisable and remain exercisable for the remaining term of the grant, up to a maximum of 10 years, but only if either: (i) the Option is not assumed, converted or replaced by the successor entity to the Company or (ii) within 24 full calendar months following the effective date of the Change in Control, your employment is either involuntarily terminated by the Company (which term includes, for purposes of this Section 3(g), any Related Company and any successor entity) other than for Cause (as defined above in Section 3(d)) or voluntarily terminated by you for Good Reason.

“Good Reason” means, without your express written consent, the occurrence of any one or more of the following events:

a material reduction in your authority, duties, or responsibilities existing immediately prior to the Change in Control;

ii.

iii.

a material reduction by the Company of your base salary as in effect immediately prior to the Change in Control;

iv.

4. Securities Law Compliance. Notwithstanding any other provision of this grant, you may not exercise the Option unless the Shares issuable upon exercise are registered under the Securities Act or if the Company has determined that such exercise and issuance would be exempt from the registration requirements of the Securities Act. The exercise of the Option must also comply with other applicable laws and regulations governing the Option, and you may not exercise the Option if the Company determines that such exercise would not be in compliance with such laws and regulations.

5. Incentive Stock Option Qualification. If your Option is designated as an Incentive Stock Option in your Grant Notice, all or a portion of the Option is intended to qualify as an Incentive Stock Option under federal income tax law. However, the Company does not represent or guarantee that the Option qualifies as such.

If the Option has been designated as an Incentive Stock Option and the aggregate Fair Market Value (determined as of the grant date) of the shares of Common Stock subject to the portions of the Option and all other Incentive Stock Options you hold that first become exercisable during any calendar year exceeds $100,000, any excess portion will be treated as a Nonqualified Stock Option, unless the Internal Revenue Service changes the rules and regulations governing the $100,000 limit for Incentive Stock Options. In addition, a portion of the Option may be treated as a Nonqualified Stock Option if certain events cause exercisability of the Option to accelerate.

6. Notice of Disqualifying Disposition. To the extent the Option has been designated as an Incentive Stock Option, to obtain certain tax benefits afforded to Incentive Stock Options, you must hold the Shares issued upon the exercise of the Option for two years after the Grant Date and one year after the date of exercise. If shares of stock obtained upon exercise of an Incentive Stock Option are tendered to pay the exercise price for another option less than one year after the exercise date of the Incentive Stock Option, the tender will be considered a disqualifying disposition. You may be subject to the alternative minimum tax at the time of exercise. You should obtain tax advice when exercising the Option and prior to the disposition of the Shares. By accepting an Option designated as an Incentive Stock Option, you agree to promptly notify the Company if you dispose of any of the Shares within one year from the date you exercise all or part of the Option or within two years from the Grant Date.

7. Method of Exercise. You may exercise the Option by giving notice to the Company or a brokerage firm designated or approved by the Company, in form and substance satisfactory to the Company, which will state your election to exercise the Option and the number of Shares for which you are exercising the Option. The notice must be accompanied by full payment of the exercise price for the number of Shares you are purchasing. You may make this payment in any combination of the following: (a) by cash; (b) by check acceptable to the Company; (c) by tendering (either actually or by attestation) shares of Common Stock you have owned for at least six months (if such holding period is necessary to avoid a charge to the Company’s earnings); (d) to the extent permitted by law, by instructing a broker to deliver to the Company the total payment required in accordance with procedures established by the Company; or (e) by any other method permitted by the Committee.

8. Withholding Taxes. As a condition to the exercise of any portion of an Option, you must make such arrangements as the Company may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with such exercise.

9. Option Not an Employment or Service Contract. Nothing in the Plan or any Award granted under the Plan will be deemed to constitute an employment contract or confer or be deemed to confer any right for you to continue in the employ of, or to continue any other relationship with, the Company or any Related Company or limit in any way the right of the Company or any Related Company to terminate your employment or other relationship at any time, with or without Cause.

10. No Right to Damages. You will have no right to bring a claim or to receive damages if you are required to exercise the vested portion of the Option within three years of the Termination of Service or if any portion of the Option is cancelled or expires unexercised. The loss of existing or potential profit in Awards will not constitute an element of damages in the event of your Termination of Service for any reason even if the termination is in violation of an obligation of the Company or a Related Company to you.

11. Binding Effect. The terms and conditions of this grant will inure to the benefit of the successors and assigns of the Company and be binding upon you and your beneficiaries, heirs, executors, administrators, successors and assigns.

12. Limitation on Rights; No Right to Future Grants; Extraordinary Item of Compensation. (a) The Plan is discretionary in nature and may be suspended or terminated by the Company at any time. (b) The grant of the Option is a one-time benefit that does not create any contractual or other right to receive future grants of options, or benefits in lieu of options. (c) All determinations with respect to any such future grants, including, but not limited to, the times when options will be granted, the number of shares subject to each option, the option price, and the time or times when each option will be exercisable, will be at the sole discretion of the Company. (d) Your participation in the Plan is voluntary. (e) The value of the Option is an extraordinary item of compensation that is outside the scope of your employment contract, if any. (f) The Option is not part of normal or expected compensation for purposes of calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments. (g) The vesting of the Option ceases upon your Termination of Service for any reason except as may otherwise be explicitly provided in the Plan, the terms and conditions of this grant, or otherwise permitted by the Committee. (h) The future value of the Shares underlying the Option is unknown and cannot be predicted with certainty. (i) If the Shares underlying the Option do not increase in value, the Option will have no value.

13. Employee Data Privacy. By receiving this award, you: (a) authorize the Company and your employer, if different, and any agent of the Company administering the Plan or providing Plan recordkeeping services, to disclose to the Company or any of its affiliates any information and data the Company requests in order to facilitate the grant of the Option and the administration of the Plan; (b) waive any data privacy rights you may have with respect to such information; and (c) authorize the Company and its agents to store and transmit such information in electronic form.

14. Section 409A. The Option is intended to be exempt from the requirements of section 409A of the U.S. Internal Revenue Code (“Section 409A”) and shall be interpreted, operated and administered in a manner consistent with such intention. To the extent that the Company determines that the Option is subject to Section 409A and fails to comply with the requirements of Section 409A, the Company reserves the right (without any obligation to do so) to unilaterally amend, restructure, terminate or replace the Option in order to cause the Option to either not be subject to Section 409A or to comply with the applicable provisions of Section 409A.

EXHIBIT 12

Weyerhaeuser Company and Subsidiaries

Computation of Ratios of Earnings to Fixed Charges

For the quarters ended March 31, 2011 and March 31, 2010

(Dollar amounts in millions)


	QUARTER ENDED
	MARCH 31, 2011			MARCH 31, 2010
Available earnings:
Earnings before interest expense, amortization of debt expense and income taxes	$	254		$	132
Add: interest portion of rental expense		6			7
Add: undistributed (earnings) loss of equity affiliates and income attributable to noncontrolling interests in subsidiaries		4			(28	)

Available earnings	$	264		$	111

Fixed charges:
Interest expense incurred:
Weyerhaeuser Company and subsidiaries, excluding Weyerhaeuser Real Estate Company and other related subsidiaries		94			104
Weyerhaeuser Real Estate Company and other related subsidiaries		6			7

Subtotal		100			111
Less: intercompany interest		(1	)		(1	)

Total interest expense incurred		99			110
Amortization of debt expense		2			2
Interest portion of rental expense		6			7

Total fixed charges	$	107		$	119

Ratio of earnings to fixed charges		2.47			—

Coverage deficiency	$	—		$	(8	)

Weyerhaeuser Company with its Weyerhaeuser Real Estate Company and Other Related Subsidiaries

Accounted for on the Equity Method, but Excluding the Undistributed Earnings of Those Subsidiaries

Computation of Ratios of Earnings to Fixed Charges

For the quarters ended March 31, 2011 and March 31, 2010

(Dollar amounts in millions)


	QUARTER ENDED
	MARCH 31, 2011		MARCH 31, 2010
Available earnings:
Earnings before interest expense, amortization of debt expense and income taxes	$	249	$	126
Add: interest portion of rental expense		5		6
Add: undistributed loss of equity affiliates and attributable to noncontrolling interests in subsidiaries		3		6
Add: undistributed (earnings) loss before income taxes of Weyerhaeuser Real Estate Company and other related subsidiaries		1		(30	)

Available earnings	$	258	$	108

Fixed charges:
Interest expense incurred		94		104
Amortization of debt expense		2		2
Interest portion of rental expense		5		6

Total fixed charges	$	101	$	112

Ratio of earnings to fixed charges		2.55		—

Coverage deficiency	$	—	$	(4	)

EXHIBIT 31

Certification Pursuant to Rule 13a-14(a)

Under the Securities Exchange Act of 1934

I, Daniel S. Fulton, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Weyerhaeuser Company.

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 6, 2011

/s/ DANIEL S. FULTON

Daniel S. Fulton

President and Chief Executive Officer

I, Patricia M. Bedient, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Weyerhaeuser Company.

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 6, 2011

/s/ PATRICIA M. BEDIENT

Patricia M. Bedient

Executive Vice President and Chief Financial Officer

EXHIBIT 32

Certification Pursuant to Rule 13a-14(b)

Under the Securities Exchange Act of 1934 and

Section 1350, Chapter 63 of Title 18, United States Code

Pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and section 1350, chapter 63 of title 18, United States Code, each of the undersigned officers of Weyerhaeuser Company, a Washington corporation (the “Company”), hereby certifies that:

The Company’s Quarterly Report on Form 10-Q dated May 6, 2011 (the “Form 10-Q”) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ DANIEL S. FULTON

Daniel S. Fulton

President and Chief Executive Officer

Dated: May 6, 2011

/s/ PATRICIA M. BEDIENT

Patricia M. Bedient

Executive Vice President and Chief Financial Officer

Dated: May 6, 2011

The foregoing certification is being furnished solely pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and section 1350, chapter 63 of title 18, United States Code and is not being filed as part of the Form 10-Q or as a separate disclosure document.

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