Seeing the future through the trees

1

The Changing Face of Forestry

The New Forest Owners

Moderator: Troy Harris

DANZERFORESTLAND

Seeing the future through the trees

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2005/2006 News Headlines

• Boise to sell 2.2 million acres of timberland to Forest Capital Parnters for $1.65B

• IP completes $250M sale of 1.1 million acresof forestland in Maine, New Hampshire

• MeadWestvaco sells 900,000 acres of Timberland and paper business

• Hancock Timber Resource Group to acquire Prudential Timber

• Hancock Timber Resource Group to Acquire Timberland From Harvard University

• IP Agrees to Sell 5.1 Million Acres of U.S. Forestland For Approximately $6.1 Billion

Seeing the future through the trees

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The New Forest Owners

2004 Timberland Ownership by Type57,071,000 AcresSource: Forestweb

Industry35,491,080

62%

REIT10,127,000

18%

TIMO10,216,226

18%

Investor1,237,000

2%

2006 Timberland Ownership by Type59,945,000 Acres

Source: RISI Timberland Markets

TIMO's 23,923,000

40%

Industry 18,971,000

32%

Investor 2,534,000

4%

REIT's 14,517,000

24%

Seeing the future through the trees

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What’s a TIMO?

Timberland Investment Management Organization (TIMO) represent financial instruments and institutions that purchase, manage, and sell timberland in order to organize and manage partnerships of institutional investors.

TIMO’s currently:•Manage over 23.9 million acres of timberland. •Valued at over $19,200,000,000.

Seeing the future through the trees

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What is a REIT?

Real Estate Investment Trust’s (REIT)Security that sells like a stock on the major exchanges and invests in real estate directly.

REIT’s receive special tax considerations and typically offer investors high yields, as well as a highly liquid method of investing in real estate.

Timber REIT’s currently:– Manage over 14.5 million acres

of timberland.– Valued at over

$11,600,000,000.

Seeing the future through the trees

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Who Is Selling and Who is Buying?

Major Land Ownership Changes 2004 to 2006Source: RISI Timberland Markets

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Seeing the future through the trees

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Who Are the New Landowners?

2006 Timberland Owners with +1 Million AcresSource: RISI Timberland Markets

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TIMO'SREIT'SINDUSTRY

Seeing the future through the trees

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Meet the New Owners

The TIMO Perspective:

Michael Kelly (Executive Vice President, Chairman of Investment Committee)

Chris Elwell (Investment Forester)

The REIT Perspective:

Jerry Barag (Managing Director)

Jim Rundorff (Director Land Asset Management)

Seeing the future through the trees

9

The New Forest Owners