Continued execution of its strategic plan, combined with a robust domestic housing market, resulted in strong earnings for our Real Estate business. For the year, the sector reported earnings of $124 million.

This compares with $66 million before a gain associated with the sale of Weyerhaeuser Mortgage Company in 1997. To maximize its earning potential, our Real Estate business focuses on the home-building and land-development business. Improved earnings resulted from increased operating efficiencies and improved margins and inventory turnover. During the year, the backlog of homes sold, both in absolute terms and as a percentage of in-process inventory, was increased to record levels. Home-building and land-development sales increased over the prior year. >