8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

_________________

Date of Report: January 27, 2009

(Date of earliest event reported)

TEMPLE-INLAND INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware	001-08634	75-1903917
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1300 MoPac Expressway South, 3^rd Floor

Austin, Texas 78746

(Address of Principal Executive Offices, including Zip code)

(512) 434-5800

(Registrant's telephone number, including area code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On January 27, 2009, Temple-Inland Inc. issued a press release announcing the company’s earnings for the quarter and year ended January 3, 2009. A copy of the press release is furnished as exhibit 99.1 of this report.

Item 7.01. Regulation FD Disclosure.

On January 27, 2009, management of Temple-Inland Inc. participated in a conference call discussing the company’s earnings for the quarter and year ended January 3, 2009. A copy of the presentation materials used in the call is furnished as exhibit 99.2 of this report.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

99.1 Press release issued by Temple-Inland Inc. on January 27, 2009, announcing the company’s earnings for the quarter and year ended January 3, 2009.

99.2 Presentation materials used by management of Temple-Inland Inc. in a conference call on January 27, 2009, discussing the company’s earnings for the quarter and year ended January 3, 2009.

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	TEMPLE-INLAND INC.
Date: January 27, 2009	By:	/s/ Randall D. Levy
		Name: Randall D. Levy
		Title:   Chief Financial Officer

2

EXHIBIT INDEX

Exhibit	Description	Page
99.1	Press release issued by Temple-Inland Inc. on January 27, 2009, announcing the company’s earnings for the quarter and year ended January 3, 2009	4
99.2	Presentation materials used by management of Temple-Inland Inc. in a conference call on January 27, 2009, discussing the company’s earnings for the quarter and year ended January 3, 2009	12

3

EX-99

NEWS

RELEASE___________________________________________________

FOR IMMEDIATE RELEASE

CONTACT: Chris Mathis

(512) 434-3766

TEMPLE-INLAND INC. REPORTS FOURTH QUARTER

AND FULL YEAR 2008 RESULTS

AUSTIN, TEXAS, January 27, 2009--Temple-Inland Inc. today reported a fourth quarter 2008 net loss of $6 million, or $0.06 per share, compared with third quarter 2008 net income of $3 million, or $0.03 per share, and fourth quarter 2007 net income of $1.165 billion, or $10.76 per share.

Fourth quarter 2008 net income excluding special items was $0.11 per share, compared with third quarter 2008 net loss excluding special items of $0.03 per share, and fourth quarter 2007 net income excluding special items of $0.23 per share. Results for fourth quarter 2008 include special items of $0.17 per share, consisting of (i) a special after-tax charge of $8 million, or $0.07 per share, primarily related to the closure of our Rome, Georgia box plant and our hardboard siding operation in Diboll, Texas; and (ii) a tax adjustment of $10 million, or $0.10 per share, resulting from a change in the annual tax rate.

	4th Qtr.	3rd Qtr.	4th Qtr.
	2008	2008	2007
Net income per share	($0.06)	$0.03	$10.76
Adjustment for special items	$0.17	($0.06)	($10.53)
Net income (loss) per share, excluding special items	$0.11	($0.03)	$0.23

For the year, net loss was $8 million, or $0.08 per share, including special after-tax charges of $20 million, or $0.19 per share, primarily related to our 2007 transformation plan and the closure of converting and production facilities. This compares with 2007 net income of $1.305 billion, or $12.08 per share including special after-tax items of $1.225 billion, or $11.34 per share, primarily related to the effects of our transformation plan. Net income excluding special items was $12 million, or $0.11 per share, in 2008 compared with $80 million, or $0.74 per share, in 2007.

		Year
	2008		2007
Net income per share	($0.08)		$12.08
Adjustment for special items	$0.19		($11.34)
Net income per share, excluding special items	$0.11		$0.74

Corrugated Packaging

	4th Qtr.	3rd Qtr.	4th Qtr.	Year	Year
	2008	2008	2007	2008	2007
Segment Operating Income	$68	$50	$75	$225	$287
($ in Millions)

Corrugated Packaging reported fourth quarter 2008 operating income of $68 million compared with $50 million in third quarter 2008 and $75 million in fourth quarter 2007. Corrugated Packaging operating income improved in fourth quarter 2008 compared with third quarter 2008 as higher box prices and lower fiber, energy and freight costs more than offset lower box shipments and the costs associated with 108,000 tons of market-related downtime and 22,000 tons of maintenance related downtime taken in fourth quarter 2008. Operating income declined in fourth quarter 2008 compared with fourth quarter 2007 as higher box prices were more than offset by downtime costs, higher energy, freight, and chemical costs, and lower box shipments.

Building Products

	4th Qtr.	3rd Qtr.	4th Qtr.	Year	Year
	2008	2008	2007	2008	2007
Segment Operating Income	($14)	($6)	($15)	($40)	$8
($ in Millions)

Building Products reported a fourth quarter 2008 operating loss of $14 million compared with a loss of $6 million in third quarter 2008 and a loss of $15 million in fourth quarter 2007. Operating income declined in fourth quarter 2008 compared with third quarter 2008 as higher gypsum prices and lower costs were more than offset by lower lumber prices and lower volumes for all products. Building Products operating income improved in fourth quarter 2008 compared with fourth quarter 2007 as lower costs and higher gypsum and particleboard prices more than offset lower lumber prices and volumes for all products.

Comments

Doyle R. Simons, chairman and chief executive officer of Temple-Inland Inc., said, “We delivered solid operating results in fourth quarter 2008.

5

“In Corrugated Packaging, fourth quarter 2008 was our most profitable quarter of the year. We operated well and benefited from our box plant transformation, acquisition of PBL, higher box prices and lower input costs. We took 108,000 tons of mill downtime in the quarter to match our production to our demand as our box shipments were down approximately 7% compared with year ago levels. We enter 2009 with the lowest inventory levels in the last three years.

“In Building Products, shipments for all of our products declined in the fourth quarter due to difficult market conditions and the seasonal slowdown in demand. We took action in the quarter to further drive down our costs including exiting the hardboard siding business and reducing our headcount by an additional 11%. We also successfully introduced a new fiberglass-faced gypsum sheathing product, GreenGlass™, for use in commercial and residential applications during the quarter.

“As we enter 2009, economic conditions continue to be uncertain. However, the actions we took in 2008 to lower our cost structure significantly throughout our company, drive down our inventories and grow our business will serve us well in 2009.”

Temple-Inland will host a conference call on January 27, 2008 at 9:30 am EST to discuss results of fourth quarter 2008. To access the conference call, listeners calling from the United States and Canada should dial 1-866-394-6665 at least 15 minutes prior to the start of the call. The passcode for the conference call is: 81604811. Those wishing to access the call from outside the United States and Canada should dial 1-706-634-1667 and use the same passcode as set forth above. Replays of the call will be available for two weeks following completion of the live call and can be accessed at 1-800-642-1687 in the United States and Canada and at 1-706-645-9291 outside the United States and Canada. The passcode for the replay is: 81604811.

Temple-Inland Inc. is a manufacturing company focused on corrugated packaging and building products. The fully integrated corrugated packaging operation consists of 7 mills and 63 converting facilities. The building products operation manufactures a diverse line of building products for new home construction, commercial and repair and remodeling markets. Temple-Inland's address on the World Wide Web is www.templeinland.com.

This release contains “forward-looking statements” within the meaning of the federal securities laws. These statements reflect management’s current views with respect to future events and are subject to risk and uncertainties. We note that a variety of factors and uncertainties could cause our actual results to differ significantly from the results discussed in the forward-looking statements. Factors and uncertainties that might cause such differences include, but are not limited to: general economic, market, or business conditions; the opportunities (or lack thereof) that may be presented to us and that we may pursue; fluctuations in costs and expenses including the costs of raw materials, purchased energy, and freight; changes in interest rates; current conditions of financial markets could adversely affect our ability to finance our operations; demand for new housing; accuracy of accounting assumptions related to impaired assets, pension and postretirement costs, contingency reserves and income taxes; competitive actions by other companies; changes in laws or regulations; our ability to execute certain strategic and business improvement initiatives; the accuracy of certain judgments and estimates concerning the integration of acquired operations; and other factors, many of which are beyond our control.

6

TEMPLE-INLAND INC. AND SUBSIDIARIES

CONSOLIDATED EARNINGS AND SEGMENT RESULTS

(Preliminary and Unaudited)

		Fourth Quarter						For the Year
		2008			2007			2008			2007
		(In millions, except per share)
Revenues
Corrugated packaging	$	819		$	756		$	3,190		$	3,044
Building products		154			164			694			806
Timber and timberland (a)		––			17			––			76
Total revenues	$	973		$	937		$	3,884		$	3,926
Income
Corrugated packaging	$	68		$	75		$	225		$	287
Building products		(14	)		(15	)		(40	)		8
Timber and timberland (a)		––			12			––			65
Total segment operating income		54			72			185			360
Items not included in segments:
General and administrative expense		(17	)		(25	)		(76	)		(100	)
Share-based compensation		18			––			2			(34	)
Other operating income (expense)		(13	)		1,881			(29	)		1,865
Other non-operating income (expense)		1			(36	)		––			(35	)
Net interest income (expense) on financial assets and nonrecourse financial liabilities of special purpose entities		2			10			(2	)		10
Interest expense on debt		(23	)		(25	)		(81	)		(111	)
Income (loss) before taxes		22			1,877			(1	)		1,955
Income tax (expense) benefit		(28	)		(719	)		(7	)		(753	)
Income (loss) from continuing operations		(6	)		1,158			(8	)		1,202
Discontinued operations		––			7			––			103
Net income (loss)	$	(6	)	$	1,165		$	(8	)	$	1,305
Average basic shares outstanding		106.7			106.0			106.7			106.0
Average diluted shares outstanding		106.7			108.2			107.4			108.1
Earnings per share – Basic
Income (loss) from continuing operations	$	(0.06	)	$	10.88		$	(0.08	)	$	11.33
Discontinued operations		––			0.08			––			0.98
Net income (loss)	$	(0.06	)	$	10.96		$	(0.08	)	$	12.31
Earnings per share – Diluted (b)
Income from continuing operations	$	(0.06	)	$	10.69		$	(0.08	)	$	11.12
Discontinued operations		––			0.07			––			0.96
Net income	$	(0.06	)	$	10.76		$	(0.08	)	$	12.08
Dividends per share (c)	$	0.10		$	10.53		$	0.40		$	11.37

____________

(a)	We no longer have a timber and timberland segment as a result of the fourth quarter 2007 sale of our timberland.
(b)	Earnings per diluted share not applicable for fourth quarter and full year 2008 due to our loss from continuing operations.
(c)	Includes special dividends of $10.25 per share in fourth quarter 2007.

7

TEMPLE-INLAND INC. AND SUBSIDIARIES

SUMMARIZED CONSOLIDATED BALANCE SHEETS

(Preliminary and Unaudited)

		Year-End 2008	Year-End 2007
ASSETS		(Dollars in millions)
Current Assets	$	1,073	$	1,277
Property and Equipment		1,664		1,632
Financial Assets of Special Purpose Entities		2,474		2,383
Goodwill		394		365
Other Assets		264		285
TOTAL ASSETS	$	5,869	$	5,942
LIABILITIES
Current Liabilities	$	446	$	890
Long-Term Debt		1,191		852
Nonrecourse Financial Liabilities of Special Purpose Entities		2,140		2,140
Deferred Tax Liability		750		762
Liability for Pension Benefits		172		71
Liability for Postretirement Benefits		101		123
Other Long-Term Liabilities		292		324
TOTAL LIABILITIES		5,092		5,162
NONCONTROLLING INTEREST OF SPECIAL PURPOSE ENTITIES		91		––
SHAREHOLDERS’ EQUITY		686		780
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	5,869	$	5,942

8

TEMPLE-INLAND INC. AND SUBSIDIARIES

SUMMARIZED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Preliminary and Unaudited)

			Fourth Quarter 2008			Third Quarter 2008			Second Quarter 2008			First Quarter 2008			For the Year 2008
CASH PROVIDED BY (USED FOR) OPERATIONS		(Dollars in millions)
Operations (including payments related to our 2007 transformation plan of $11 million in third quarter and $39 million in first quarter)		$	80	(a)	$	66		$	57	(a)	$	19		$	222
Working capital (including payments related to our 2007 transformation plan of $20 million in third quarter, $1 million in second quarter and $276 million in first quarter)			(19	)		(20	)		(7	)		(358	)		(404	)
			61			46			50			(339	)		(182	)
CASH PROVIDED BY (USED FOR) INVESTING
Capital expenditures			(48	)		(40	)		(42	)		(34	)		(164	)
Acquisition, net of cash acquired			––			(57	)		––			––			(57	)
Other			––			(2	)		(3	)		(1	)		(6	)
			(48	)		(99	)		(45	)		(35	)		(227	)
CASH PROVIDED BY (USED FOR) FINANCING
Cash dividends to shareholders			(11	)		(11	)		(10	)		(11	)		(43	)
Net change in debt			(1	)		68			15			204			286
Other			(7	)		2			(4	)		(8	)		(17	)
			(19	)		59			1			185			226
Effect of exchange rate changes on cash and cash equivalents			(3	)		––			––			––			(3	)
Net increase (decrease) in cash and cash equivalents			(9	)		6			6			(189	)		(186	)
Cash and cash equivalents at beginning of period			50			44			38			227			227
Cash and cash equivalents at end of period		$	41		$	50		$	44		$	38		$	41
SUPPLEMENTAL INFORMATION
Depreciation and amortization		$	55		$	51		$	50		$	50		$	206
	____________
(a)	Includes $15 million of voluntary, discretionary contributions to our defined benefit plan in second and fourth quarter 2008.

9

TEMPLE-INLAND INC. AND SUBSIDIARIES

REVENUES AND UNIT SALES, EXCLUDING JOINT VENTURE OPERATIONS

(Preliminary and Unaudited)

		Fourth Quarter				For the Year
		2008		2007		2008		2007
		(Dollars in millions)
Revenues
Corrugated packaging
Corrugated packaging	$	744	$	727	$	2,975	$	2,905
Paperboard (a) (b)		75		29		215		139
Total corrugated packaging	$	819	$	756	$	3,190	$	3,044
Building products
Pine lumber	$	48	$	54	$	225	$	244
Particleboard		37		38		175		181
Gypsum wallboard		34		39		135		228
Medium density fiberboard		16		13		72		62
Fiberboard		8		11		41		52
Other		11		9		46		39
Total building products	$	154	$	164	$	694	$	806
Timber and Timberland (c)
Fiber and other		N/A	$	17		N/A	$	76

	Unit Sales
	Corrugated packaging
	Corrugated packaging, thousands of tons		799	816	3,303	3,351
	Paperboard, thousands of tons (a) (b)		165	60	469	303
	Total, thousands of tons		964	876	3,772	3,654
	Building products
	Pine lumber, mbf		176	198	769	838
	Particleboard, msf		100	110	472	506
	Gypsum wallboard, msf		248	311	1,061	1,475
	Medium density fiberboard, msf		30	29	140	135
	Fiberboard, msf		43	60	213	288
		____________
(a)		Paperboard includes containerboard and light-weight gypsum facing paper.
(b)		Comparisons of revenue and unit sales of paperboard are affected by the July 25, 2008 purchase of our partner’s interest in Premier Boxboard Limited LLC.
(c)		We no longer have a timber and timberland segment as a result of the fourth quarter 2007 sale of our timberland.

10

TEMPLE-INLAND INC. AND SUBSIDIARIES

CALCULATION OF NON-GAAP FINANCIAL MEASURES

(Preliminary and Unaudited)

		Fourth Quarter						Third Quarter			For the Year
		2008			2007			2008			2008			2007
		(In millions, except per share)
NET INCOME (LOSS) EXCLUDING SPECIAL ITEMS
Net income (loss) in accordance with GAAP	$	(6	)	$	1,165		$	3		$	(8	)	$	1,305
Special items, after-tax:
Transformation plan:
Gain on sale of timberland		––			(1,265	)		––			––			(1,265	)
Transformation costs		––			39			––			13			48
Charges related to early repayment of debt		––			25			––			––			25
Discontinued operations		––			(7	)		––			––			(103	)
		––			(1,208	)		––			13			(1,295	)
Other:
Closure and sale of converting and production facilities		5			39			––			5			34
Litigation and other		3			30			––			––			39
Charges related to early repayment of PBL debt		––			––			1			2			––
Adjustment due to change in annual tax rate to 89 percent in third quarter 2008 and 38 percent in fourth quarter 2008		10			––			(7	)		––			––
One-time tax benefit		––			––			––			––			(3	)
		18			69			(6	)		7			70
Total special items, after-tax		18			(1,139	)		(6	)		20			(1,225	)
Net income (loss), excluding special items	$	12		$	26		$	(3	)	$	12		$	80
Net income (loss), per share, in accordance with GAAP	$	(0.06	)	$	10.76		$	0.03		$	(0.08	)	$	12.08
Special items, after-tax, per share:
Transformation plan:
Gain on sale of timberland		––			(11.69	)		––			––			(11.69	)
Transformation costs		––			0.36			––			0.12			0.44
Charges related to early repayment of debt		––			0.23			––			––			0.23
Discontinued operations		––			(0.07	)		––			––			(0.96	)
		––			(11.17	)		––			0.12			(11.98	)
Other:
Closure and sale of converting and production facilities		0.05			0.36			––			0.05			0.31
Litigation and other		0.02			0.28			––			––			0.36
Charges related to early repayment of PBL debt		––			––			0.01			0.02			––
Adjustment due to change in annual tax rate to 89 percent in third quarter 2008 and 38 percent in fourth quarter 2008		0.10			––			(0.07	)		––			––
One-time tax benefit		––			––			––			––			(0.03	)
		0.17			0.64			(0.06	)		0.07			0.64
Total special items, after-tax		0.17			(10.53	)		(0.06	)		0.19			(11.34	)
Net income (loss) per share, excluding special items	$	0.11		$	0.23		$	(0.03	)	$	0.11		$	0.74
Average basic shares outstanding		106.7			106.0			106.7			106.7			106.0
Average diluted shares outstanding		106.7			108.2			107.6			107.4			108.1

11

EX-99

Our job is to be the best

1

This presentation contains “forward-looking statements” within the meaning of the federal
securities laws. These statements reflect management’s current views with respect to future
events and are subject to risk and uncertainties. We note that a variety of factors and uncertainties
could cause our actual results to differ significantly from the results discussed in the forward-
looking statements. Factors and uncertainties that might cause such differences include, but are
not limited to: general economic, market, or business conditions; the opportunities (or lack
thereof) that may be presented to us and that we may pursue; fluctuations in costs and expenses
including the costs of raw materials, purchased energy, and freight; changes in interest rates;
demand for new housing; accuracy of accounting assumptions related to impaired assets, pension
and postretirement costs, and contingency reserves; competitive actions by other companies;
changes in laws or regulations; our ability to execute certain strategic and business improvement
initiatives; the accuracy of certain judgments and estimates concerning the integration of acquired
operations and other factors, many of which are beyond our control. Except as required by law, we
expressly disclaim any obligation to publicly revise any forward-looking statements contained in
this presentation to reflect the occurrence of events after the date of this presentation.

     This presentation includes non-GAAP financial measures.  The required reconciliations to
GAAP financial measures are included on our website, www.templeinland.com.

2

Fourth Quarter 2008 Consolidated Results

Net income (loss) per share

Special items

Net income (loss) per shareexcluding special items

$   (0.03)

      (0.06)

$    0.03

   Q3
    2008

$    0.23

$    0.11

(10.53)

0.17

$  10.76

$   (0.06)

    Q4     
    2007

    Q4
    2008

3

Corrugated Packaging Segment

($ in Millions)

    $   50

    (747)

$  797

Q3

2008

$   75

$   68

Segment operating income  

   (681)

   (751)

Costs and expenses

$ 756

$ 819

Revenues

Q4

2007

Q4

2008

4

Corrugated Packaging Segment

TIN Average Box Price *

   *  Average box price realization includes the impact of mix of business

2008

2007

Q4                       Q1                   Q2                     Q3                   Q4

5

Key Input Cost Changes

Q4 2008 vs. Q4 2007                  Q4 2008 vs. Q3 2008

Virgin FiberOCCEnergyChemicalsFreight

Input cost changes include the addition of the
PBL mill in third quarter 2008.

6

Corrugated Packaging Segment

Temple-InlandIndustry

Box Shipments

  Source: Fibre Box Association

Quarterly

Q4                  Q1                   Q2                  Q3                   Q4

2008

2007

7

Matching Production to our Demand

Downtime

108,000 tons market related

22,000 tons maintenance related

Inventories

Lowest year entering level in 3 years

8

Building Products Segment

($ in Millions)

    $ (   6)

    (185)

$  179

Q3

2008

$(  15)

$(  14)

Segment operating income (loss)

   (179)

   (168)

Costs and expenses

$ 164

$ 154

Revenues

Q4

2007

Q4

2008

Reduced headcount across the business

Permanently closed hardboard siding business

9

Building Products Segment

Lumber

Price

2008

2007

Q4Q1 Q2        Q3          Q4

Volume

2008

2007

Q4           Q1        Q2          Q3         Q4

10

Building Products Segment

Gypsum

Volume

2008

2007

Q4Q1 Q2 Q3Q4

Price

Q4Q1 Q2Q3Q4

2008

2007

11

Price

Particleboard

Volume

Building Products Segment

2008

2007

   Q4    Q1       Q2         Q3          Q4

Q43Q1 Q2 Q3Q4

2008

2007

12

Full Year 2008 Results
(millions, excluding EPS)

Income Excluding Special Items

Corrugated Packaging

Building Products

Timber and Timberlands

Segment operating income

General and Administrative

Share based compensation

EBIT

Other non-operating income (expense)

Interest expense on debt

Net Interest on financial assets/non-recourse liability

Income before taxes and special items

Income taxes

Income before special items

Net income per dil. share excluding special items

Note: We have recast prior period segment operating income to reflect the effects of our transformation plan

             $287

                   8

                 65

             $360

            ($100)

                (34)

             $226

             $    5

              (111)

                 10

             $130

                (50)

             $  80

             $0.74

                $225

(40)

                $185

               ($ 76)

                     2

                $111

                $   4

                  (81)

                    (2)

                $ 32

                  (20)

                $ 12

                $0.11

2007

2008

13

Cash Flow

Cash provided by operations $80MM in fourth
quarter 2008 and $222MM for the year

Balance sheet

Year-end, 2008 long-term debt $1,192MM, down
$1MM vs. end of third quarter

Liquidity

Committed credit facilities - $715MM of unused
borrowing capacity at year-end, 2008

Financial Highlights

14

Year-End, 2008 Committed Credit Facilities

($ in Millions)

   70% Max

   3.0 x Min

Y-E, 2008

         59.2%

           4.6x

Covenants (as specifically defined):

     Debt/total capital

     Interest coverage

  2010 (25 mil)

  2011 (810 mil)

        2010

Facility Maturities:

     $  715

        $655

       $  60

Unused borrowing capacity

        (351)

          (19)

        (161)

          (19)

        (190)

             -

     Borrowings

     Letters of credit

    $1,085

       $835

       $250

Committed

Less:

Total

Committed Credit
Agreements

Accounts
Receivable
Securitization
Facility

15

Capital Expenditures

2007:  $224MM

2008:  $164MM

2009:  $120MM

Depreciation

2008:  $206MM

2009:  $204MM

2009

16

Pension

No required cash contribution in 2009

Pension expense $41MM in 2009 vs. $37MM in 2008

Income tax

2008:  Differences

2009:  40% effective tax rate; 20% cash tax rate

General and administrative expenses

2008:  $76MM, down $24MM vs. 2007

2009:  $70 - $72MM

2009

17

Share-based compensation

2008:  $2MM credit

2009:  $16MM; $1 change = $2.5MM

Net interest on financial assets

2008:  $2MM

2009:  $8MM

Interest expense

2008:  $81MM

2009:  $80MM

2009

18

2009 Financial Priorities

Return cash to shareholders

Dividend

Reduce debt

Invest in our business

Grow

19

Our job is to be the best

20