Good morning. My name is Thea, and I will be the conference operator today. At this time, I would like to welcome everyone to the Weyerhaeuser Quarter One Earnings Release Conference Call. [Operator Instructions] I will now turn the conference over to Ms. Kathryn McAuley. Ma'am, you may now begin.

Thank you, Thea. Welcome to Weyerhaeuser's First Quarter 2010 Earnings Conference Call. I'm Kathy McCauley, Vice President of Investor Relations. Joining me today are Dan Fulton, President and Chief Executive Officer; Patty Bedient, Executive Vice President and Chief Financial Officer; Tom Gideon, Executive Vice President, Forest Products; and Larry Burrows, President, Weyerhaeuser Real Estate Company. This call is being webcast at www.weyerhaeuser.com. The earnings release and materials for this call can be found at our website or by contacting April Meier at (253) 924-2937. Please review the warning statements in our press release and on the presentation slides concerning the risks associated with forward-looking statements, as forward-looking statements will be made during this conference call. This morning, Weyerhaeuser reported a net loss of $20 million or $0.10 per share for the first quarter of 2010, on net sales of $1.4 billion. Significant after tax items in the first quarter were; a charge of $31 million or $0.15 per share for income tax adjustments related to the Medicare prescription drugs tax deduction elimination and a state tax rate change, a gain of $26 million or $0.12 per share for the sale of Wood Product's assets. Excluding these items, the company reported a net loss of $15 million or $0.07 per share. Our GAAP reconciliation of special items is available on our website in the earnings information package. Please turn to Chart 4 in the earnings information package as I will next discuss this waterfall chart. Chart 4 is a bar chart detailing the changes in contribution to earnings before special items, interest and taxes. Changes in Weyerhaeuser segment earnings from the fourth quarter of 2009 to the first quarter of 2010 were as follows: beginning with the first bar on the left-hand side of the page, in the fourth quarter of…

Thanks, Kathy. After months of difficult markets, it's gratifying to discuss a quarter where results reflect improved market conditions and where we see the benefits of the work that we have done to reshape the company and improve our long-term competitiveness. I ended last quarter's call by saying I was confident we would deliver significantly improved operating performance. And though we're still not profitable, our first quarter results reported this morning show an improvement of $155 million over last quarter and a $244 million increase from one year ago. Previously, I've discussed the close linkage between the performance of our Timberlands, Wood Products and Real Estate sectors and the level of U.S. housing starts. We assumed that U.S. single-family starts would rise to 600,000 this year. Despite signs of gradual improvement, however, housing starts still remain below 550,000. Several weeks ago in a prepared statement, Fed Chairman Bernanke observed that, "We are far from being out of the woods." And he added, "We have yet to see evidence of a sustained recovery in the housing market." We agree. The whole building market has been characterized as fragile, and yesterday, a commentator described it as wobbly, a term which accurately captures our sense of market conditions. The essential ingredients for a return to long-term trend demand for new housing is job growth. And until we see signs of employment recovery, we remain cautious. Our first-quarter results reflect some stabilization in the housing sector and improvements that we have made in our own operations. The fact that we've been able to show significant gains in performance at this level of starts is a testament to the hard work that our businesses have undertaken to weather unprecedented market conditions and improve long-term performance. The results Tom and Larry will share with you today reflect those actions. And as the recovery gains more strength, we're well-positioned to take advantage of our strong market position. In addition to this work, our other focus involves the strategic decision we have made to convert to a real estate investment trust. This will place our core Timberlands segment into the most efficient tax structure for long-term competitiveness. At our annual meeting earlier this month, our shareholders approved actions necessary to complete this conversion. Patty will talk a little bit more about our conversion in her remarks and we look forward to further discussion at our annual Investor Conference on May 29 in New York. And now to help you better understand the improvements we saw during the first quarter, and the challenges still ahead of us, I'd like to turn the call over to Tom Gideon, who will discuss the performance of our Forest Products businesses. Tom?

Thank you, Dan, and good morning. Earnings from our Forest Products business increased in the first quarter as weather-related disruptions constrained supply and led to improving pricing across most of our product lines. Performance of our Timberlands and Wood Products businesses improved substantially in the first quarter, offset by a decline in earnings from the sale of Fiber segment. I will start by discussing our Timberlands business, which is reference on Chart 5. Timberland's revenues improved in the first quarter compared to the fourth as both log realizations and sales volumes increased. Harvest levels increased 17% versus the fourth quarter. Though we continue to defer harvest, we choose to pull forward volume originally scheduled for later in the year to supply several of our Southern mills. These mills struggled to procure logs as rain, snow and ice disrupted logging operations in much of the region. First quarter export realizations increased modestly versus the fourth quarter on comparable volumes. As export markets remain robust and we continue to supplement core Japanese demand with sales of domestic quality Douglas fir into China. Minerals revenues rose slightly in the first quarter as oil and gas prices increased versus one quarter ago. On the cost side, per unit volume and road cost fell due to increased harvest volumes. Soil culture costs also declined primarily due to weather. Earnings from dispositions of non-strategic lands totaled $31 million in the first quarter, as we sold approximately 15,000 acres. These earnings reflects a mix of cash from Timberland sale, non-cash exchanges and sales of higher and better use or HBU lands. Timberland prices appears to be holding up well and we are pleased with the prices we received for our acres. Overall, Timberlands earnings improved in the first quarter compared to the fourth, as the segment earned…

Thank you, Tom, good morning. Housing market conditions improved across several RICO geographies during the first quarter. Record affordability, historically low interest rates, and federal tax credit availability generated demand from qualified buyers. However, our markets are still experiencing high unemployment and low levels of consumer confidence, which tempered demand. Though inventories have stabilized in many markets, shadow inventories from foreclosures and vacant units continued to create downward pressure on home sale prices. With respect to specific retail markets, Washington D.C. and Houston improved throughout the first quarter, as pricing remained stable. San Diego has also performed well, as our local value proposition has held up despite concerns about the regional economy. The Inland Empire in Las Vegas have improved modestly during the quarter, despite sustained pressure from foreclosures and delinquencies. In both markets, we are seeing traffic from qualified customers excited to take advantage of record affordability. Los Angeles and Puget Sound have softened since the fourth quarter, affected by unemployment and price erosion. Phoenix remains challenged due to increasing foreclosures and short sales. These trends are reflected in the Key Indicators table on Chart 9. Comparing the first quarter of 2010 to 2009, the average price of homes closed declined 3% on 8% fewer closings. However, our cancellation rate improved by nine percentage points to 19% and sales increased substantially. Single-family home sales improved by 36%, compared to the first quarter of 2009, helped by a 21% increase in traffic. Our backlog of homes sold but not closed increased to 877 units or nearly 300 more than one year ago. Turning to our financial results, RICO posted a $31 million contribution to pretax earnings in the first quarter of 2010. Our results are comprised of gains of $33 million on the sale of two commercial partnership interests. Gains…

Thanks, Larry, and good morning, everyone. We expect to return to profitability in the second quarter. While risks remain and there is still a feel of uncertainty about the housing market as Larry just discussed, it would appear that we are in the early stages of an economic recovery. I'll begin the outlook with Timberlands. In the West, export and domestic log prices are expected to increase, partially offset by a lower export grade mix. In the South, we anticipate that a slight increase in pricing will also be offset by a lower grade mix. Fee harvest volume in the West is expected to increase modestly in the second quarter. However, fee harvest in the South will likely be lower compared to the first quarter as harvest was pulled forward from the second quarter due to adverse weather conditions. So the culture and road cost should be seasonally higher in the second quarter. In addition, in the South, the first quarter weather-related delays in silver cultural activities will likely result in increased spending for the second quarter. Excluding the effect of Timberland dispositions, we anticipate that overall earnings in the Timberlands segment will be somewhat lower in the second quarter compared to the first as higher log prices are offset by increased costs and lower earnings from fee harvest. Moving on to Wood Products. Thus far in the second quarter, prices have continued to increase. And we expect that compared to the first quarter, sales realizations in all product lines will improve. Although sales volumes are still weak by historical standards, we anticipate significant increases compared to the first quarter with sales volumes increasing by approximately 25% on lumber, 40% in OSB and in engineered lumber, anywhere from 20% to 35%, depending on the product. Raw material costs are expected…

Thanks, Patty. Now we are ready to address your questions and your comments. Tom and Larry are prepared to answer your business-specific questions on Timberlands, Wood Products, Cellulose Fibers and RICO and you can feel free to address them directly. Patty and I will handle your general, corporate and financial questions. And now I'll ask Kathy to open up the call.

Thank you, Dan. Thea, could you please open the call to questions?

[Operator Instructions] The first question will be from Chip Dillon of Credit Suisse. Chip Dillon - Crédit Suisse First Boston, Inc.: My question has to do, and I apologize if you addressed this earlier, with the Wood Products business, which is showing just a dramatic recovery. I wanted to know how much you thought the supply-chain either at the mill level, where people haven't added shifts yet and particularly beyond the mill level in terms of just entire distribution network is having an impact here. And then maybe you could talk a little bit about the demand side from -- are you seeing repair and remodeling really driving this as we haven't seen a real jump in housing starts yet?

What we've seen and what we've heard in talking with our customers over the last quarter or so is that they have seen this recent rallies being primarily driven by a limited supply as well as restocking of their severely depleted inventories. Now we've also seen some underlying demand improvement and so that's really the genesis and the basis for what we've seen so far. In terms of the repair and remodel, they have seen relatively good business over the quarter. We've seen a slight uptick in our participation in the home-improvement markets. And I think everyone has seen the results of the recovering economy, at least as it's evolved to this date. Chip Dillon - Crédit Suisse First Boston, Inc.: Do you anticipate that you all will be restarting any capacity?

Well as we look at that, we have and continue to look at our operations. We've added capacity in terms of hours and shifts, based on what we're getting in terms of our customer demand and we brought that supplier over the quarter as we thought was appropriate to meet our customer demand. And we're going to continue to assess our demand forecast and we'll make any or future additions to our supply of brokers either market conditions warrant or economics dictate.

The next question will be from Mike Roxland of Bank of America.

Quick questions on the guidance for RICO, are you guiding 2Q to be in line with 1Q at $30 million or are you saying that RICO should be more or less break even x the land sales?

Mike, this is Larry. I think what we're saying is, is that it's more close to -- we said we had about a $5 billion loss in single-family home building and so we're talking about being comparable to that. And excluding any of the commercial sales.

So a $5 billion loss for the overall segment in 2Q?

For single-family home building.

Right, but the guidance I thought was -- the overall guidance for RICO I thought was to be in line with 1Q's $30 million, or am I reading that incorrectly?

Yes, I think you're reading that incorrectly. I think it's to be in terms of the single-family, home building operations to be in line with 1Q. We don't anticipate any large commercial partnership interest sales in the second quarter. And we may or may not have any land and lot sales in the second quarter.

In timber, can you provide a little more color on the non-strategic land sales in terms of type of property location, just stocking levels. Just want to get a little bit more color on the $35 million in revenue you had in the quarter?

As we reported, we had about $31 million of earnings from a non-strategic sales of land. That was roughly about 15,000 acres. It was spread a little bit more heavily to the West, as it was to the South. It was a combination of more heavily weighted to kind of like Timberland to traditional Timberland tracks, from some HBU and some recreational sales. And we also had some level of condemnations that were basically for minerals right away, down in the South. We saw a good level of interest in what we had available and we continue to make sure that we get best value for what we have to offer.

The next question will come from Gail Glazerman of UBS.

Following on that a little bit, was any of that land part of the 88,000 you're marketing in the West? And if not, can you give an update on that?

No, none of that was any of the 88,000 that we had talked about earlier in 2009. As you'll recall, there was a significant amount of acres of non-strategic land with Timberland sales that we had held for sale. And we still have that available. We have good interests by a full range of potential bidders. We have institutional investors. We have high net worth individuals, timber companies and conservation organizations that we're working with as we talked. And we'll be viewing a variety of options. Again, the key thing is, is that we're going to move at a very deliberate pace. We're heading in to a recovery period, and we're going to sell only if we get values that we feel are appropriate. And so we'll continue to work that. And we'll let you know when it happens.

And can you give an update on what your operating rates were for lumber and OSB in the fourth quarter if they're going to have the ramp up that you discussed in the first quarter -- I'm sorry in the first quarter if you're going to have that ramp up in production in the second quarter?

Sure, as we looked at that, we operated across our system at a roughly about 62% of our lumber capacity. And roughly about 43%, 44% of our OSB capacity as we move forward. I would say though, that as we look at that, that we have severe weather constraints in January and February that held down our lumber production particularly in the South where we have our largest footprint. And on OSB, we had significant outages at our South and West Virginia OSB facility as they had historical snow levels that took them down for an equivalent of two weeks. And we also had some issues with a strander at our Oakland facility, which impacted our production during the quarter as well.

Larry, can you talk a little bit about the tax credit and how that might have impacted the volume you saw earlier in the year, and how you think that might impact the demand towards the back half of the year?

Sure, Gail. We have benefited from the tax credit. It has been differential by market. I think it was when the President extended it toward the end of last year, we didn't really see a whole lot of impact at the end of last year and on the early part of this year. It's kind of picked up in February and March, but as I said, it's differential by market. In D.C., in San Diego, in Houston and probably L.A., it's had lower kind of impact, it's helped in the Puget Sound, Phoenix and Inland Empire and Las Vegas. And so I think that, that's, we're waiting to see what's going to happen as, kind of, the training wheels come off. Also, the State of California has just instituted tax credits similar to what they had last year, and that goes into effect next week in May 1. And so hopefully, that will give California some lags.

Dan or Patty, I appreciate we can talk about this more next month, but are there any comments that you can make about how you view your current business portfolio, just in terms of any assets that you might want to keep especially as we're starting recovery tick in? And also how you view your current debt burden? And again I appreciate you are still evaluating messages [ph] (39:46) in terms of the REIT conversion?

I'll start with your second question. We are evaluating capital structure, as Patty mentioned, and that will be part of the calculus as we look forward, as we review our cash balances and also as we review the decision regarding future dividend policy. With respect to the portfolio of businesses that we own, we continue to believe that they are complementary. And as we've talked before, as we convert to a REIT, they all fit. And we're looking forward to the earnings and the cash flow that will come from the housing recovery, as it will be reflected in our Wood Products business and in our Homebuilding business.

The next question will come from Mark Connelly of CLSA.

On the Homebuilding business. Over the past year, you made a number of changes in house plans to hit different price points. Can you talk a little bit about how that is playing out for you, and whether the plans you made worked out the way you had hoped, how satisfied you are with what you've done so far, and whether you are seeing any changes in the square footage front?

We have been pleased with the results that we've had from the redesign and the repositioning of our product in our communities. It is, obviously, as we have different value propositions, it's differential by market, but generally what I would say is the homes are smaller. They're kind of less jazzy. There's kind of less ego-intensive, if you will, elements in it. And I think that although we are continuing to learn, adjust and refine, we're pleased with how our product, the new product has advanced.

The next question will come from Claudia Hueston of JPMorgan. Claudia Hueston - JP Morgan Chase & Co: I was curious if you could give some guidance on both the tax rate and the corporate expense. And then just with regard to the maintenance you're taking in Pulp, is this pretty much it for the first and second quarter? Are those the heavier maintenance months or is there more maintenance we should expect to see as the year unfolds?

This is Patty, I'll take your first couple and then I'll let Tom speak to the maintenance. As it relates to the tax rate, the tax rate had about a little over 40% was high for the first quarter, for a couple of reasons. One, first of all, with not a lot of income or loss, it swings pretty much just even on small items. So some of those small items would be -- there is no benefit from the loss of our international operations. So even though they weren't huge, they do make the big change to the rate. The other thing is as we look forward, there are a number of tax credits that are going to the tax extenders process, which well, on one hand, we certainly anticipate that they will be extended. Until they are extended we can't put them in the rate. So it makes it a little higher as well. And then the other piece is state taxes. So as you look forward toward the end of the year, I would expect that our tax rate, eventually, will be below the 40%, probably something closer to 38%. Although as I've said, from a GAAP perspective, we can't include the impact of those credits at this point. As it relates to corporate expense, the Corporate segment is the catch-all segment for a number of things. So you do see it move around quite a bit from quarter-to-quarter. But I think as we look forward, a good number for just guidance purposes would be somewhere around $10 million to $15 million of expense for the quarter.

Yes, related to that, we do have some other just scheduled in the second quarter. Those are mandated by both regulatory, as well as insurance requirements. And we do that, not only to allow us to operate safely, but to ensure we maintain the process for liability that we need to supply the contracted volume. We're possible we have looked at deferring, and we were able to defer one of these outages until later in the year.

The next question will come from Mark Wilde of Deutsche Bank.

Dan, I wondered if we could start just by talking about some, what I think, you have already defined as non-core businesses, things like Westwood Shipping and maybe some short-line railroads. With ocean freight rates going up, is the prognosis for being able to do something with Westwood improving?

It should be improving. As you observed, rates are coming back up. We've identified those assets as noncore. And as we evaluate the improvement in market, we should have some greater opportunity to make some decisions.

And then if we kind of come back to Gail's question about some of the other stuff that's maybe a little closer to the Forestry business, the Wood Products business, the Distribution business, the Pulp business. Just in general term, if you're going toward becoming a timber REIT, doesn't having all of these other businesses kind of tack on the side? Do you view that as a potential drag on your valuation?

No, we don't. We believe that the portfolio of our core businesses, Timberlands, Wood Products, Cellulose Fibers and Homebuilding, make sense. And we believe that the assets that will be held in the taxable REIT subsidiary will give us the potential, as I mentioned, in responding to Gail, to generate earnings and cash that will support the overall portfolio. The conversion to timber REIT supports the core strategy of our Timberlands ownership in order to get it into a tax-efficient ownership position. We believe that basic portfolio is complementary and will give us significant earnings and cash flow power as we move forward.

And then finally, for Tom Gideon. I just want to come back to this issue of being able to bring capacity back in the short term in businesses like Lumber and OSB right now to take advantage of this price rally. Can you talk about how that's occurring? Were you able to add, kind of, incremental shifts or extend overtime, and how quickly you can flex in that respect?

Well, Mark, you're correct. What we have fundamentally done in OSB and inside of Lumber is look at additional hours where appropriate to meet demand as well as some shift configurations as we've gone forward. We are able to work within those kind of constraints. The issue that we'll have, and I think the entire supply chain will have, will be on the availability of raw materials to a degree that underlying demand was to spike in a sudden way. So that will be the biggest limiting factor as we look forward in Q2.

The next question will come from Greg Staphos (sic) [George Staphos] of Bank of America.

Within Wood Products, is there anything else that you need to do from a structural standpoint to improve your margins? Or at this juncture, are we just awaiting and writing on what looks to be the recovery in housing and Wood Products?

Well I would say George, we're just not waiting for the rally, but we continue to do everything we can to improve our operating margins and take cost out where -- then and improve our operations. During the quarter, all of our product lines saw improvement compared to the fourth quarter. We not only improved our total operating results by $60 million, but we reduced our manufacturing costs by $43 million. Now when somebody else do the price selling [ph] that's due to higher operating rates, a lot of it's also due to how well we operated. And I would just say for example, in lumber, for the hours that we ran, we had a record amount of output for hour operation in our facilities. And so that's an example of what we're doing in terms of maximizing our efficiencies. In both the OSBs, we have very high process reliability and uptime rates. So we're doing things that will maximize our ability to produce more with the assets that we have.

Tom, I wasn't disputing the performance that you've had already. I guess I was trying to get if there's any other non-linear adjustments that you can make, but it sounds like at this juncture, it's more process and singles and doubles as opposed to anything major, would that be fair?

Absolutely. Again, it's getting more out of the assets that we have and as we've talked about in previous calls, George, we've had an extensive process of applying lean concepts. For example, during the first quarter, we had 1,500 of our associates or nearly 28% that were involved in some kind of Kaizen event, which was designed either take out costs, reduce waste, reduce downtime, change overs, anything that we can do to maximize the return that we're getting. And so we're going to continue to do all of those things as well as well as focus on maximizing margins and operate on our highest efficiencies. I need to have our focus on reducing costs whenever we can as well.

Broadly as we think about the potential sources of cash and how you distribute that once you ultimately convert to a REIT, we have different models that exist in the market now that we can evaluate compared to warehouse are might ultimately drive its model to be. Should we think about the potential distributions that occur on a regular basis for the company? Being more centered from, if you will, traditional timber REIT results, obviously, Timberlands, perhaps something from what products or would you see the whole portfolio as potentially available to support distributions to shareholders once you convert to REIT. Similar question, obviously, you have some land that's for sale in the Pacific Northwest. But on an ongoing basis, should we expect that Weyerhaeuser is in the business that, perhaps, marking some of the existing land homes that you have.

Yes, George. This is Patty. Good morning. I think the way that you should think about it is the REIT is a structure to support the strategy of the total portfolio. So as we look at how we operate the company and maximize those cash flows, we look at the total portfolio, not just individual businesses or individually, the Timberlands. Now, we'll do that cash flow to make it the most tax efficient for our shareholders. But the whole portfolio is there to support the cash flow of the company.

The next question will come from Mark Weintraub of Buckingham Research.

Just this one for clarification on the tax rate, Patty, if you do decide to convert to a REIT, presumably, that will change everything and there would be a year-end adjustment, is that correct?

That's right, Mark. When we actually make the final decision of the conversion in the Europe conversion, while we've said that 2010 is the likely timing, there hasn't been a final decision. So until that happens, we can't reflect it in our financial statements. But if we were to convert in 2010, we would redo the tax rate and it would be lower than the 42 that we had in the first quarter. So all the financials and the tax rate that I spoke of are consistent with our historical C corp. status.

Mark, this is Dan. Let me just add one comment. As you introduced your question, you said if we convert to a REIT, and then we get into timing questions, and I just want to clarify for everybody on the phone that we have made the decision that we are converting to a REIT. And really the decision at this point is timing. It's not, if it's when.

Second question is, in a rapid price escalation like what we are seeing in both Pulp and Wood Products, I was hoping to get a better understanding of how the prices flow through into your business. In particular, I know for instance in Fluff Pulp, I think you went out with a very large increase in April, and then also, another increase in May. Do those have fairly immediate impact? Does it take weeks or months for it to get past along to customers? And likewise, in Wood Products, there was a competitor in the OSB business who was talking about the fact a couple of days ago on their call that the big price run that we saw starting, basically in March, really didn't start showing up until April for them. And that the prices that we are seeing today really show up three or four weeks down the road in the realizations that they booked. Do you have a similar experience or is yours different and just if you would, fill us in both for the Structural Panels and Lumber?

It's the latter part of your question first, Mark. Our overall realizations, as a general rule, will generally lag the market in a rapid price increase, and they'll be slowly coming down as prices fall as well. And that lag, whether it's in lumber or whether it's in OSB, depending on the length of our order file, which is generally the price time of order versus price time of shipment. And then for our contract getting committed volume, we generally index that perhaps to a random length of the price time of shipment. And so our contracted volume, we have a significant portion of our Lumber, as well as our OSB volume that's under contract. So you will typically see some level of lag as well. And similar on the pulp side as well, is depending on where the product is going. In some cases, the time of shipment in terms of lag, has arrived at the port versus when it's recognized. So it's going to be different, but we generally see some type of lags, but I don't know how to characterize it in terms of exact precise number of days that, that would be.

Ladies and gentlemen of our final question will come from Chip Dillon of Crédit Suisse. Chip Dillon - Crédit Suisse First Boston, Inc.: When you do think about your model, obviously, when you look at manufacturing, the lumber is much more, I would think, and plywood, tied to the forest. And say, on one hand, versus OSB and engineered wood on the other. And are we correct to assume that the lumber and the plywood is more central to the strategy than necessarily owning the OSB and engineered wood products operations?

Well, Chip, our Wood Products business, as you know, includes significant lumber operation, as well as engineered products and panels, as well as distribution. We look at that business, we look at each component of that business on an ongoing basis. And we think that those businesses operate well together. They're certainly more tied back to the Timberlands in the Lumber business. But they're all products in which we can be an effective competitor. And our focus is on improving the performance, not just in our Wood Products business, but all of our businesses to achieve top quartile cost of capital performance. The issue as to whether or not they directly tie back to Timberland ownership is really secondary, if you think about the fact that we've got these businesses in the taxable subsidiary. And they each need to operate and perform.

And I might just add to that from a market point of view. Many of our customers buy multiple product lines from us, a few or single items only [ph]. Many of them have five, two, three, four different product lines. And so it's important to trend [ph] of our total offerings to the marketplace, Chip.

The next question will come from Steve Chercover of D. A. Davidson & Co. Steven Chercover - D.A. Davidson & Co.: My first question is kind of along the lines of Mark Weintraub's. You are technically a REIT today, are you not, at least structurally? And, therefore, the Timber earnings at year end will be taxed at the pass through rate as opposed to the full year?

We are structured such that we can convert to REIT in 2010. But we have not made the conversion. So as we sit here today, we are for purposes of our financial reporting, of C corp. If, as we have said, we do look at 2010 as the most likely, but when we actually make that final decision, we will then get the favorable tax treatment for the full year of 2010. We've not paid out our earnings and profits in 2010 yet. So that is one step that we finally would need to take to actually do the 2010 conversion. So the board would have to declare that dividend because that's what it is. And then we would go through the mechanics of completing that conversion in order to complete the process for 2010. Steven Chercover - D.A. Davidson & Co.: That's why you're accruing at C corporate's although you are structurally ready?

Yes. Steven Chercover - D.A. Davidson & Co.: And further, any BCAP benefits in the first quarter or will there be any going forward?

Steve, we have just some very minor repayments based on what we have submitted prior to the suspension of the program on February 3. Other than that, as you know, the program is being under review by the USDA and we'll await the final resolution of that along with the rest of the industry, which will probably, at best, be later some time this fall. Steven Chercover - D.A. Davidson & Co.: My final question was with respect to the OSB mill in Miramichi. Did that sale get consummated and does this spike in pricing either change the deal or provide you with a top up?

At this point in time, we're still under active negotiations at Miramichi, and it really doesn't change on how we think about that particular operation. Steven Chercover - D.A. Davidson & Co.: Still non-core, probably worth more than it was a few months ago?

We're still under negotiations with the potential acquirer.

The next question will come from Peter Ruschmeier of Barclays Capital.

A question for Dan, I was curious, how you think about growth of the timber REIT going forward. In particular, in response to the question about using the cash flows of both the timber REIT and the TRS, doesn't that minimize the cash available for growth capital. And so does that suggest that your intention is really not necessarily to grow the assets of the REIT?

We stated in the past, Pete, that our core business is Timberlands. And as such, we need to position our Timberlands in a tax-efficient structure. And the ownership of Timberland to C corp. has constrained our ability to grow by moving to a REIT structure. It opens up opportunities for us to be, not only a more tax-efficient owner, but also positions us to be able to grow the asset. As Patty said in her remarks, we look at the cash generation from the business on an overall basis. And so we will focus on opportunities as they emerge or we can be an effective operator earning, as I mentioned before, cost of capital returns. And we believe that we have the potential to grow the timber asset and that's one of the key reasons that we're making the conversion.

Just a quick business question, I guess, operating question for Tom Gideon on the markets. I was curious how you think trade flows for logs and lumber between Russia and China are changing, if at all. And how you think about that in the context of what you expect for log demand, and lumber demand from BC in the Pacific Northwest. Are you seeing any evidence of change in trade flows?

We still have a very good export market. I'll take on the log side first. We see a growing movement of what had been traditionally from Douglas fir domestic wood that's going into China, as that market continues to absorb more production. As we look at that, we do see that they're casting the net somewhat wider. We expect that they'll actually look beyond just the West and actually look into Russia for additional wood supplies, log supplies as the year continues. On lumber, our primary flow for us is going into Japan with some limited amount going into China and Korea and then Japan still remains a very strong market for us.

And any changes that you're seeing in trade flows from BC into the Pacific Northwest into that region? [indiscernible] decline been on other factors?

No, but as we look at that as you're aware, with the recent movement in pricing, there will be a reduction in FLA tax that will attributed to wood coming out from Canada. And that obviously had some impact on market flows going forward.

[Operator Instructions] That question will come from Richard Skidmore from Goldman Sachs.

Just a quick question for Tom, and then a question for Larry. First, Tom, the volume numbers that you gave for lumber OSB, were those quarterly changes or year-over-year changes that you had referred to in terms of the second quarter?

Those would've been quarterly changes.

And Larry, as you look at the expiration of the home buyer tax credit occurring tomorrow, how do you think that, that might impact either traffic or how housing as you see it might play out here in the next couple of quarters, or over the next 6 to 12 months.

I think it will be differential by market, as I've mentioned, earlier, Richard, I think some of our markets had less impact from the tax credit. We hope to see some renewed interest in California, given the California credit that starts on May 1. But I think, generally, and this is the question, I think, generally, customers realize this is a good time to buy a home. We have good affordability. You have low interest rates. And so, really it gets back to a question about their kind of confidence. Do I have a job? Do I feel good about that? And so we're hopeful that this will have some legs to it.

At this time, I would like to turn the conference back over to Dan Fulton for any final comments.

Thank you. As we close out the call, let me summarize for everyone on the phone our key themes for the quarter. First, though single-family starts are up significantly from one year ago, the pace of continued recovery remains uncertain. And it continues to cause us to be cautious. Our word for this morning was wobbly. Larry described the expiration of the federal tax credit as taking the training wheels off. And if you can create a picture in your mind of training wheels coming off a small bike and a young child on a two wheeler, that's the theme. It's a little bit wobbly coming through this period. Fundamentally, we need job growth to drive a sustained recovery. Second theme is that even if current low levels of operating results for the quarter were greatly improved from the prior quarter due to improved market conditions, but importantly, due to the changes that we've made in the way we operate our businesses. And we'll continue to focus on improving all of our businesses in order to achieve top quartile cost of capital performance. Third, Patty summarized our second quarter outlook for each business segment, including improvement in Wood Products and Cellulose Fibers, comparable performance in RICO and somewhat lower results in Timberlands. And then finally, we continue to move down the path of REIT conversion to support our core Timberland strategy. So I'd like to thank everybody for joining us this morning. As usual, Kathy will be available later today to follow up with any of you that have questions or comments. And we look forward to seeing see many of you next month in New York. Thanks very much.

Ladies and gentlemen, thank you for participating in today's conference call. You may now disconnect.