Environmental Compliance

Our environmental policy requires all employees to comply with environmental laws, company environmental standards, and other external company commitments.

• Environmental Audits
• Incidents and Penalties
• Capital Spending
• Environmental Remediation

ENVIRONMENTAL AUDITS

Weyerhaeuser maintains an environmental audit program to track compliance with environmental laws and our own policies. Our program includes compliance audits of our manufacturing facilities, sales and distribution facilities, real estate subsidiaries, forests, and management systems. In addition to identifying potential risks and areas for improvement, these audits also identify best practices, which are then shared across the company. The frequency of audits at an operation depends on the level of risk associated with the operation and past environmental performance.

In 2010, internal environmental compliance audits covered approximately 27 percent of our operations. Our environmental compliance audits identify instances where operations may not comply with either regulatory requirements or company environmental policies. When noncompliance issues are identified, a corrective action plan is developed and implementation is tracked to ensure timely resolution.

INCIDENTS AND PENALTIES

Despite our audit program and commitment to operate in compliance, we sometimes experience incidents of noncompliance. In 2010, our penalties decreased compared with 2008 and 2009.

CAPITAL SPENDING

Our capital projects typically are designed to enhance safety, extend the life of a facility, increase capacity, increase efficiency, change raw material requirements, or increase the economic value of assets or products, as well as to comply with regulatory standards.

It is difficult to isolate the environmental component of most manufacturing capital projects. Our capital expenditures for environmental regulatory requirements in 2010 were an estimated $3 million (approximately 1 percent of total capital expenditures). Based on our understanding of current regulatory requirements in the U.S. and Canada, we expect 2011 capital expenditures for environmental compliance to be about $4 million (approximately 2 percent of expected total capital expenditures). These capital expenditures exclude acquisitions and Real Estate.

ENVIRONMENTAL REMEDIATION

We maintain an environmental remediation program to fulfill our responsibilities under regulatory agreements, reduce the risk of environmental harm, and reduce the potential financial liability because of past practices at sites owned, acquired or divested by Weyerhaeuser; certain third-party sites; and Superfund sites where we have been named as a potentially responsible party.

We have established reserves for estimated remediation costs on the active Superfund sites and other sites for which we are responsible.

In 2010, we had 55 active projects and spent approximately $6 million on environmental remediation. We expect to spend approximately $5 million on environmental remediation in 2011.