Thank you, Chuck, and let me add my own personal tribute to Steve Rogel.
For more than a decade, I've had the pleasure of working closely with Steve. During that time, we rode the boom in the U.S. housing market, and fulfilled Steve's strategy to grow all business lines.
Then, when our priorities began to shift, Steve made the tough strategic decisions to exit our fine paper business, and to position our containerboard packaging business for strategic review-- a process that ultimately led us to a decision to sell that business last year.
For a chemical engineer who grew up on the fiber side of our industry, those were tough calls, but I believe the right ones given our view today of where Weyerhaeuser can best compete in the future.
Throughout the time that I worked with Steve, I came to appreciate his discipline, and his total commitment to this industry, and to this company, and, since he passed the mantle of leadership of the company to me, I've had his unwavering support and guidance.
Thank you, Steve, for your leadership. It's been an honor to work so closely with you.
We meet today in the midst of one of the most challenging economic environments that our country, and our company, have ever faced.
Beyond the depth of the downturn, driven by a nearly 80% drop in U.S. single family housing starts since their peak, is the breathtaking speed at which things have changed for the worse, since just last Fall.
But that's not what I want to talk about today. I want to talk about a different time, a time you may have heard about from your parents or grandparents. Perhaps it was an aunt or an uncle doing the recounting. But I'm guessing that almost everyone in this room knows someone who lived during the time I'm about to recount.
The date was April 14, 1935. The world was deep in the Depression, and the rains that produced record crops as recently as 1931, had ceased to soak the Great Plains. Although the good years were behind them, the farmers still got by, served well by their frugal lifestyle, and self-sufficiency.
That Sunday, the farmers and their families awoke to a day that was quiet, windless, and bright. As was the custom in that region, and in those times, the farmers, along with their neighbors, gathered in churches spread across the vast openness of the Midwest, and gave thanks for the few blessings they enjoyed.
In his book, The Worst Hard Time, Pulitzer Prize-winning author Timothy Egan recounts how everything changed that afternoon, when an ominous black wall of dust swept out the Northwest.
For years leading up to 1935, the over-tilled soil of the Grain Plains had been drifting, but nothing compared to the wall of dust that swept over them that day.
As it hit, survivors likened it to being caught in a whirlpool. "All of a sudden it got completely dark," one person said.
"I couldn’t see a thing."
The analogy to today's circumstances may be September 2008, when a black cloud descended over the U.S. financial markets. The "over-tilling" of the financial markets in this decade likewise led to a collapse, that whirlpool-like has dragged down our entire economy.
The 1935 storm lasted a few hours, but its effects were enormous. In those hours, the winds scattered twice as much dirt as was dug to create the entire Panama Canal.
Thousands of lives and dreams were left buried under shifting dust. Just like that, people in the storm's path were plunged into a situation they never envisioned.
Some left the Midwest forever. Others resolved to make it back, even if it meant living in a hole in the ground until they could rebuild their farms, and feeding tumbleweeds to whatever livestock remained.
But whatever route they took, those people survived, and that's the great lesson in Egan's book.
People can, and do, rise to the challenges before them.
Weyerhaeuser is no different.
In our past, we've faced significant challenges. Whether it was the Great Depression, forest fires, or natural disasters like the eruption of Mt. St. Helens or the fury of Hurricane Katrina, we've shown remarkable resilience throughout our history, and we're being called on to do so again.
Our annual report this year speaks to this spirit and tenacity, and celebrates our ability to survive downturns, and become stronger in the process.
It has rarely been easy.
And though today's challenges present tests unlike those that most current Weyerhaeuser employees have seen, we're inspired by those who have come before us, and we assume the special responsibility to weather the current storm that confronts us.
Despite our obvious challenges, I'm confident in our ability to protect the precious assets of the company, and I'm optimistic about our future.
The core values that have made this company great, will again serve us well. Values such as safety, ethical behavior, community involvement, embracing diversity, and above all, stewardship of our lands.
Today's generation of Weyerhaeuser employees has the resolve to do what these times require.
Most of all, I believe in the resilience of this company that's part of our DNA.
That resilience begins with the knowledge that we control 6.4 million acres of the most productive timberland in North America.
Our assets are not some abstract idea on a balance sheet.
Our assets are real.
They're the soil we can hold in our hands, and the trees reaching towards the sky for as far as the eye can see.
Our assets include oil, gas and minerals that lie beneath the surface of our land, and the water that sustains the growth of our vast forests.
And the magical conversion by our forests, of carbon dioxide into oxygen that was once taken for granted, is now emerging as a global imperative.
We add to these physical assets the intellectual capacity of our people to transform these assets, safely and efficiently, into products that create a better world.
Whether it's exploring new ideas, such as our Catchlight Energy joint venture, or making lumber, panels and other structural components used in the homes that we, and others build, we're at the forefront of turning our assets into a source of value for all of our stakeholders.
The current financial crisis, as evidenced by our 2008 financial results, is our own "Worst Hard Time," but we will return to a time when homes are again being built across America, to house an ever-growing population.
With that recovery, our own Real Estate business will again be breaking ground for thousands of new homes a year, our Wood Products manufacturing facilities will be humming again, to meet the needs of the nation's homebuilders, and our Cellulose Fibers business will continue to extend its reach into new global markets serving the needs of customers that rely on our high performance products.
Harvest levels in our forests will return to long term sustainable levels to meet the demand of structural wood products manufacturers, and the land and trees of our Timberlands, the core of this company, will be even more valuable, because of new income streams from the forest, coupled with the continuous improvements we've made in our silvicultural and forest management practices.
These are the reasons why I can say with confidence that Weyerhaeuser will emerge from this period a stronger company.
But getting from here to there will require still more tough decisions, and more changes to the way we operate.
Presiding over these types of changes was not something I envisioned when I came to Weyerhaeuser more than 33 years ago.
Like our board, our senior management team, and everyone here today, I'd much rather be growing Weyerhaeuser. But today's environment requires us to focus on other priorities, so we must become the leaders that current conditions require. That means-- protecting the assets required to achieve our vision.
As I've said repeatedly, our timberlands are core to Weyerhaeuser. That's not changing.
I've also said that we have today a set of businesses where we have demonstrated competencies that complement our timber and land-holdings. That is still our vision, but our focus now is to get through this period, and emerge in a condition where we can grow again.
About a month ago, I watched an interview on the CBS program, 60 Minutes, with Captain "Sully" Sullenberger, pilot of the US Airways airplane that landed safely in the Hudson River. That interview made real for me the need to focus in the midst of continually changing conditions.
As he recounted that fateful day, Capt. Sullenberger said that once his engines died, his first plan was to return to LaGuardia, and he received clearance to attempt such a landing.
A few seconds later, he realized that was not possible, so he notified the control tower that he was heading to Teterboro Airport in New Jersey.
Within minutes it soon became apparent that he wouldn't make it to Teterboro, so he revised his plan so that he would land the plane in the Hudson River. You all know the rest of the story.
Although Sullenberger had to change his plans and direction three times, his ultimate goal of safely landing the plane, and saving the lives of his crew and passengers never changed. Because of this single focus, he succeeded.
So, Dan, you might be asking, "What’s the point?"
The point is that we too have a single focus.
We will emerge stronger from this period with our core assets – trees and land – still the foundation of this company.
We will emerge with a set of manufacturing assets, and our commitment to science and innovation intact.
We will again deliver the shareholder value that I know we're capable of.
To get there, we need to navigate the financial storm of the US and Global economy, in order to ensure our own safe landing.
But unlike Capt. Sullenberger's aircraft, Weyerhaeuser is going to fly again!
The tremendous assets of this company, coupled with the resilience and resolve of our crew of employees across the company, give me confidence in our ability to emerge stronger, and more focused from this period of challenge.
You have our commitment, and I thank you for your support.
