EX-99.1 2 tin8kex99release.htm EARNINGS RELEASE FOR THIRD QUARTER 2009 tin8kex99release.htm




NEWS
RELEASE___________________________________________________

FOR IMMEDIATE RELEASE
CONTACT: Chris Mathis
(512) 434-3766




TEMPLE-INLAND INC. REPORTS THIRD QUARTER 2009 RESULTS


AUSTIN, TEXAS, October 22, 2009--Temple-Inland Inc. today reported third quarter 2009 net income of $67 million, or $0.61 per diluted share, compared with third quarter 2008 net income of $3 million, or $0.03 per diluted share, and second quarter 2009 net income of $66 million, or $0.61 per diluted share. Third quarter 2009 net income excluding special items was $27 million, or $0.24 per diluted share.


   
Third Quarter
Second Quarter
               
   
2009
  
2008
  
2009
  
               
Net income per share
  
$0.61
  
$0.03
  
$0.61
  
Adjustment for special items
  
($0.37)
  
($0.06)
  
($0.37)
  
 
Net income per share,
     excluding special items
  
 
$0.24
  
 
($0.03)
  
 
$0.24
  

 
 
Doyle R. Simons, chairman and chief executive officer of Temple-Inland Inc., said, “We had another exceptional quarter, delivering solid operating results, return on investment, and cash flow, despite continued tough economic conditions. We generated $188 million of cash from operations and reduced our long-term debt by $148 million in the quarter. For the first nine months of 2009, we have generated $440 million of cash from operations and reduced long-term debt by $313 million.

“In Corrugated Packaging, we had another outstanding quarter as our mills and box plants performed well.  Results reflect our low cost position and continued benefits from our box plant transformation, the acquisition of PBL, our heavy orientation to the food and beverage market and our integrated system. We continue to match our supply with our demand, and our quarter

 
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end inventories were down nine percent compared with third quarter 2008. Corrugated Packaging operating income for first nine months 2009 was $290 million, a record first nine months. Year-to-date return on investment was 18.3 percent.

 “In Building Products, markets remain difficult. We generated $7 million of EBITDA in the quarter and continue to benefit from our low cost structure, geographic footprint, and favorable mix of products. We remain focused on generating cash and returning to profitability in this business.

“As we look forward, economic conditions, while still uncertain, have stabilized and appear to be on a slow path to recovery. We have demonstrated our ability to execute our strategy, generate cash and reduce debt over the course of the recession. We are confident that as the economy recovers we are well positioned to continue to provide solid relative results for shareholders.”

Corrugated Packaging

   
Third Quarter
Second Quarter
               
   
2009
  
2008
  
2009
  
               
Segment Operating Income ($ in Millions)
  
$94
  
$50
  
$91
  


Corrugated Packaging operating income improved in third quarter 2009 compared with third quarter 2008 as lower mill and converting costs, the benefits of the PBL acquisition and less downtime more than offset lower box prices. Operating results improved compared with second quarter 2009 as less downtime and the benefits of box plant transformation and the PBL acquisition more than offset lower box prices.

Building Products

   
Third Quarter
Second Quarter
               
   
2009
  
2008
  
2009
  
               
Segment Operating Income ($ in Millions)
  
($4)
  
($6)
  
($3)
  


Building Products operating results improved in third quarter 2009 compared with third quarter 2008 as lower costs in all products and higher gypsum volumes more than offset lower prices for all products and lower volumes for lumber and particleboard. Operating results were down slightly in third quarter 2009 compared with second quarter 2009 as higher lumber prices were offset by lower gypsum and particleboard prices.

Special items for third quarter 2009 after tax were $40 million, or $0.37 per diluted share, including: (i) income of $42 million, or $0.39 per diluted share, for alternative fuel mixture tax

 
5
 

credits and (ii) a charge of $2 million, or $0.02 per diluted share, related to the purchase and early retirement of term debt during the third quarter.

Temple-Inland will host a conference call on October 22, 2009, at 9:30 am Eastern Time to discuss results of third quarter 2009. 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: 34666901.  Those calling 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: 34666901.

The conference call may also be accessed through Temple-Inland’s Internet site, www.templeinland.com, by clicking on "Investor Relations – Investor Events."

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 in 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. Except as required by law, we expressly disclaim any obligation to publically revise any forward looking statements contained in this release to reflect the occurrence of events after the date of this release.


This release includes non-GAAP financial measures.  The required reconciliations to GAAP financial measures are included in this release.




 
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TEMPLE-INLAND INC. AND SUBSIDIARIES
CONSOLIDATED EARNINGS AND SEGMENT RESULTS
(Preliminary and Unaudited)

   
Third Quarter
    
First Nine Months
  
   
2009
    
2008
    
2009
    
2008
  
   
(In millions, except per share)
  
Revenues
                        
Corrugated packaging
$
734
  
$
797
  
$
2,286
  
$
2,371
  
Building products
  
151
    
179
    
446
    
540
  
Total revenues
$
885
  
$
976
  
$
2,732
  
$
2,911
  
                         
Income
                        
Corrugated packaging
$
94
  
$
50
  
$
290
  
$
157
  
Building products
  
(4
)
  
(6
)
  
(9
)
  
(26
)
Total segment operating income
  
90
    
44
    
281
    
131
  
Items not included in segments:
                        
General and administrative expense
  
(18
)
  
(17
)
  
(53
)
  
(59
)
Share-based and long-term incentive compensation
  
(13
)
  
(10
)
  
(39
)
  
(16
)
Other operating income (expense)
  
68
    
(1
)
  
139
    
(16
)
Other non-operating income (expense)
  
(3
)
  
(3
)
  
(2
)
  
(1
)
Net interest income (expense) on financial assets and nonrecourse financial liabilities of special purpose entities
  
(1
)
  
(1
)
  
––
    
(4
)
Interest expense on debt
  
(14
)
  
(21
)
  
(50
)
  
(58
)
Income (loss) before taxes
  
109
    
(9
)
  
276
    
(23
)
Income tax (expense) benefit
  
(42
)
  
12
    
(107
)
  
21
  
Net income (loss)
  
67
    
3
    
169
    
(2
)
Net income attributable to noncontrolling interest of special purpose entities
  
––
    
––
    
(1
)
  
––
  
Net income (loss) attributable to Temple-Inland Inc.
$
67
  
$
3
  
$
168
  
$
(2
)
                         
Average basic shares outstanding
  
106.9
    
106.7
    
106.8
    
106.7
  
Average diluted shares outstanding
  
108.6
    
107.6
    
107.7
    
107.6
  
                         
Per share information:
            
 
          
Basic earnings
$
0.62
  
$
0.03
  
$
1.56
  
$
(0.02
)
Diluted earnings (a)
$
0.61
  
$
0.03
  
$
1.55
  
$
(0.02
)
Dividends
$
0.10
  
$
0.10
  
$
0.30
  
$
0.30
  
____________
(a)
Earnings per share for first nine months 2008 is based on average basic shares outstanding due to our year-to-date net loss.












 
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TEMPLE-INLAND INC. AND SUBSIDIARIES
SUMMARIZED CONSOLIDATED BALANCE SHEETS
(Preliminary and Unaudited)

   
Third
Quarter-End 2009
  
Year-End 2008
  
   
(Dollars in millions)
  
ASSETS
            
Current Assets
$
1,061
  
$
1,073
  
Property and Equipment
  
1,596
    
1,664
  
Financial Assets of Special Purpose Entities
  
2,475
    
2,474
  
Goodwill
  
394
    
394
  
Other Assets
  
257
    
264
  
TOTAL ASSETS
$
5,783
  
$
5,869
  
             
LIABILITIES
            
Current Liabilities
$
443
  
$
446
  
Long-Term Debt
  
878
    
1,191
  
Nonrecourse Financial Liabilities of Special Purpose Entities
  
2,140
    
2,140
  
Deferred Tax Liability
  
776
    
750
  
Liability for Pension Benefits
  
158
    
  172
  
Liability for Postretirement Benefits
  
99
    
101
  
Other Long-Term Liabilities
  
363
    
292
  
TOTAL LIABILITIES
  
4,857
    
5,092
  
SHAREHOLDERS’ EQUITY
            
Temple-Inland Inc. Shareholders’ Equity
  
834
    
686
  
Noncontrolling Interest of Special Purpose Entities
  
92
    
91
  
TOTAL SHAREHOLDERS’ EQUITY
  
926
    
777
  
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
$
5,783
  
$
5,869
  


 
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TEMPLE-INLAND INC. AND SUBSIDIARIES
SUMMARIZED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Preliminary and Unaudited)

 
Third Quarter
  
First Nine Months
 
2009
  
2008
  
2009
  
2008
 
(In millions)
CASH PROVIDED BY (USED FOR) OPERATIONS
                              
Operations
$
160
  (a)(b)
  
$
66
  (c)
  
$
424
  (a)(b)
  
$
142
  (a)(c)
Working capital
  
28
      
(20
)(d)
    
16
      
(385
)(d)
   
188
      
46
      
440
      
(243
)
CASH PROVIDED BY (USED FOR) INVESTING
                              
   Capital expenditures
  
(29
)
    
(40
)
    
(81
)
    
(116
)
   Acquisition, net of cash acquired
  
—
      
(57
)
    
—
      
(57
)
   Other
  
4
      
(2
)
    
(4
)
    
(6
)
   
(25
)
    
(99
)
    
(85
)
    
(179
)
CASH PROVIDED BY (USED FOR) FINANCING
                              
   Cash dividends to shareholders
  
(11
)
    
(11
)
    
(32
)
    
(32
)
   Net change in debt
  
(151
)
    
68
      
(299
)
    
287
  
   Fees related to special purpose entities
  
—
      
—
      
(19
)
    
—
  
   Other
  
11
      
2
      
(4
)
    
(10
)
   
(151
)
    
59
      
(354
)
    
245
  
Effect of exchange rate changes on cash and cash equivalents
  
(1
)
    
—
      
—
      
—
  
Net increase (decrease) in cash and cash equivalents
  
11
      
6
      
1
      
(177
)
Cash and cash equivalents at beginning of period
  
31
      
44
      
41
      
227
  
Cash and cash equivalents at end of period
$
42
    
$
50
    
$
42
    
$
50
  
                               
SUPPLEMENTAL INFORMATION
                              
Depreciation and amortization
$
50
    
$
51
    
$
151
    
$
151
  
_____________

(a)
Includes voluntary, discretionary contributions to our defined benefit plan of $15 million in third quarter 2009, $30 million in first nine months 2009, and $15 million in first nine months 2008.
(b)
Includes alternative fuel mixture tax credits, net of related costs and tax payments, of $58 million in third quarter 2009 and $121 million in first nine months 2009.
(c)
Includes payments related to our 2007 transformation plan of $11 million in third quarter 2008 and $50 million in first nine months 2008.
(d)
Includes payments related to our 2007 transformation plan of $20 million in third quarter 2008 and $297 million in first nine months 2008.


 
9
 



TEMPLE-INLAND INC. AND SUBSIDIARIES
SUMMARIZED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Preliminary and Unaudited)

 
Third
  
Second
  
First
  
Fourth
  
Third
  
 
Quarter
  
Quarter
  
Quarter
  
Quarter
  
Quarter
  
 
2009
  
2009
  
2009
  
2008
  
2008
  
 
(In millions)
  
CASH PROVIDED BY (USED FOR) OPERATIONS
                                        
Operations
$
160
  (a)(b)
$
150
  (a)(b)
$
114
    
$
80
  (a)
  
$
66
  (c)
  
Working capital
  
28
      
22
      
(34
)
    
(19
)
    
(20
)(d)
  
   
188
      
172
      
80
      
61
      
46
    
CASH PROVIDED BY (USED FOR) INVESTING
                                        
   Capital expenditures
  
(29
)
    
(33
)
    
(19
)
    
(48
)
    
(40
)
  
   Acquisition, net of cash acquired
  
—
      
—
      
—
      
—
      
(57
)
  
   Other
  
4
      
(7
)
    
(1
)
    
—
      
(2
)
  
   
(25
)
    
(40
)
    
(20
)
    
(48
)
    
(99
)
  
CASH PROVIDED BY (USED FOR) FINANCING
                                        
   Cash dividends to shareholders
  
(11
)
    
(11
)
    
(10
)
    
(11
)
    
(11
)
  
   Net change in debt
  
(151
)
    
(108
)
    
(40
)
    
(1
)
    
68
    
   Fees related to special purpose entities
  
—
      
(4
)
    
(15
)
    
—
      
—
    
   Other
  
11
      
(4
)
    
(11
)
    
(7
)
    
3
    
   
(151
)
    
(127
)
    
(76
)
    
(19
)
    
60
    
Effect of exchange rate changes on cash and cash equivalents
  
(1
)
    
2
      
(1
)
    
(3
)
    
(1
)
  
Net increase (decrease) in cash and cash equivalents
  
11
      
7
      
(17
)
    
(9
)
    
6
    
Cash and cash equivalents at beginning of period
  
31
      
24
      
41
      
50
      
44
    
Cash and cash equivalents at end of period
$
42
    
$
31
    
$
24
    
$
41
    
$
50
    
                                         
SUPPLEMENTAL INFORMATION
                                        
Depreciation and amortization
$
50
    
$
50
    
$
51
    
$
55
    
$
51
    
_____________

(a)
Includes voluntary, discretionary contributions to our defined benefit plan of $15 million in third and second quarter 2009 and fourth quarter 2008.
(b)
Includes alternative fuel mixture tax credits, net of related costs and tax payments, of $58 million in third quarter 2009 and $63 million in second quarter 2009.
(c)
Includes payments related to our 2007 transformation plan of $11 million in third quarter 2008.
(d)
Includes payments related to our 2007 transformation plan of $20 million in third quarter 2008.


 
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TEMPLE-INLAND INC. AND SUBSIDIARIES
REVENUES AND UNIT SALES, EXCLUDING JOINT VENTURE OPERATIONS
 (Preliminary and Unaudited)

   
Third Quarter
    
First Nine Months
  
   
2009
    
2008
    
2009
    
2008
  
Revenues
  
(Dollars in millions)
  
Corrugated packaging
                        
  Corrugated packaging
$
699
  
$
729
  
$
2,177
  
$
2,231
  
  Paperboard (a) (b)
  
35
    
68
    
109
    
140
  
       Total corrugated packaging
$
734
  
$
797
  
$
2,286
  
$
2,371
  
Building products
                        
  Lumber
$
48
  
$
60
  
$
139
  
$
177
  
  Particleboard
  
35
    
46
    
108
    
138
  
  Gypsum wallboard
  
38
    
33
    
109
    
101
  
  Medium density fiberboard
  
16
    
18
    
49
    
56
  
  Fiberboard
  
8
    
11
    
18
    
33
  
  Other
  
6
    
11
    
23
    
35
  
Total building products
$
151
  
$
179
  
$
446
  
$
540
  

Unit Sales
                        
Corrugated packaging
                        
  Corrugated packaging, thousands of tons
 
825
    
810
    
2,490
    
2,504
  
  Paperboard, thousands of tons (a) (b)
  
89
    
150
    
264
    
304
  
       Total, thousands of tons
  
914
    
960
    
2,754
    
2,808
  
Building products
                        
  Lumber, mbf
  
183
    
189
    
555
    
593
  
  Particleboard, msf
  
103
    
117
    
309
    
372
  
  Gypsum wallboard, msf
  
328
    
255
    
870
    
813
  
  Medium density fiberboard, msf
  
31
    
34
    
96
    
110
  
  Fiberboard, msf
  
41
    
52
    
95
    
170
  
____________

(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.


 
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TEMPLE-INLAND INC. AND SUBSIDIARIES
CALCULATION OF NON-GAAP FINANCIAL MEASURES
 (Preliminary and Unaudited)

   
Third Quarter
    
Second Quarter
  
   
2009
    
2008
    
2009
  
   
(In millions, except per share)
NET INCOME EXCLUDING SPECIAL ITEMS
    
Net income in accordance with GAAP
$
67
  
$
3
  
$
66
  
Special items, after-tax:
                  
Facility closures and headcount reductions
  
––
    
––
    
(1
)
Alternative fuel mixture credits, net of costs
  
42
    
––
    
47
  
Substitution costs
  
––
    
––
    
(11
)
Gain (loss) on purchase and retirement of long-term debt
  
(2
)
  
––
    
5
  
Charges related to early repayment of PBL debt
  
––
    
(1)
    
––
  
Effect of increasing the estimated annual effective tax rate on previously reported special items
  
––
    
7
    
––
  
Total special items, after-tax
  
40
    
6
    
40
  
Net income, excluding special items
$
27
  
$
(3
)
$
26
  
                   
Net income, per share, in accordance with GAAP
$
0.61
  
$
0.03
  
$
0.61
  
Special items, after-tax, per share:
                  
Facility closures and headcount reductions
  
––
    
––
    
(0.01
)
Alternative fuel mixture credits, net of costs
  
0.39
    
––
    
0.43
  
Substitution costs
  
––
    
––
    
(0.10
)
Gain (loss) on purchase and retirement of long-term debt
  
(0.02
)
        
0.05
  
Charges related to early repayment of PBL debt
  
––
    
(0.01
)
  
––
  
Effect of increasing the estimated annual effective tax rate on previously reported special items
  
––
    
0.07
    
––
  
Total special items, after-tax
  
0.37
    
0.06
    
0.37
  
Net income, per share, excluding special items
$
0.24
  
$
(0.03
)
$
0.24
  
                   
Average basic shares outstanding
  
106.9
    
106.7
    
106.7
  
Average diluted shares outstanding
  
108.6
    
107.6
    
107.8
  


 
    Third Quarter
 
2009
 EBITDA
(In millions)
 Building Products
  
  Segment operating loss determined in
       accordance with  GAAP
$
(4
)
  Depreciation and amortization
  
11
  
  EBITDA
$
7
  
 
      



 
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