Financial Results

Our goal is to achieve a companywide return on net assets that is top quartile in our industry over the business cycle. We determine RONA by dividing our earnings before interest and taxes by our average net assets. Put simply, RONA measures the amount of money we earn compared with the cost of the assets used to produce our earnings.

Despite continued challenges in the housing market in 2010, we improved both our net sales and revenues and our net earnings year-over-year. Our timberlands business continued to defer harvest to preserve value, our wood products business continued taking steps to position itself for a market recovery, and our real estate business was one of the few profitable large-scale homebuilders in the U.S. Meanwhile, our cellulose fibers business, which is not tied to the housing market, turned a record profit.

The actions taken by our businesses to improve performance resulted in a companywide RONA that improved year-over-year. However further improvement is needed to propel us to top-quartile performance against peer companies. We ranked ourselves “below” for RONA and competitive performance.

In addition, all our businesses met or exceeded the 2010 goals they set to track value delivery to customers. For example, our real estate business tracks customers’ willingness to refer, and our wood products and cellulose fibers businesses track activities related to new product development. We ranked ourselves “achieves” for this category.

For more about our financial results, including quarterly earnings announcements, visit the investor relations section of our website and see our latest annual report.

2010 FINANCIAL HIGHLIGHTS