EX-99.1 2 tin8kexrelease.htm 2Q 2010 EARNINGS RELEASE tin8kexrelease.htm




NEWS
RELEASE___________________________________________________

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




TEMPLE-INLAND INC. REPORTS SECOND QUARTER 2010 RESULTS


AUSTIN, TEXAS, July 27, 2010--Temple-Inland Inc. today reported second quarter 2010 net income of $20 million, or $0.18 per diluted share, compared with a first quarter 2010 net loss of $4 million, or $0.04 per diluted share, and second quarter 2009 net income of $66 million, or $0.61 per diluted share.  Second quarter 2010 net income excluding special items was $21 million, or $0.19 per diluted share.

   
Second Quarter
First Quarter
               
   
2010
  
2009
  
2010
  
               
Net income per share
  
$0.18
  
$0.61
  
($0.04)
  
Adjustment for special items
  
$0.01
  
($0.37)
  
$0.03
  
 
Net income per share,
     excluding special items
  
 
$0.19
  
 
$0.24
  
 
($0.01)
  

Doyle R. Simons, chairman and chief executive officer of Temple-Inland Inc., said, “In Corrugated Packaging, we realized the benefit of the January linerboard price increase in the quarter.  However, the price increase benefit was partially offset by extended and unanticipated mill outages and unprecedented low inventory levels that negatively affected our financial performance in the quarter by approximately $20 million.

“An extended maintenance outage at our Rome, Georgia, mill and unscheduled outages of almost a week at our Maysville, Kentucky, and Newport, Indiana, mills due to third party utility interruptions negatively affected earnings in the quarter by approximately $11 million.  The outages also affected inventories, which are at unprecedented low levels and well below our practical minimum.  As a result, we were forced to make unscheduled outside purchases of

 
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containerboard and incur additional freight costs, negatively affecting earnings by an additional $9 million in the quarter.

“In Building Products, we returned to solid profitability in the quarter.  In addition to higher prices, we benefited from our low cost structure.  Results in this quarter provide insight into the earnings potential in this business.

“Looking ahead, we are positioned for a strong second half of the year in Corrugated Packaging as we will benefit from higher prices, box plant transformation and less mill maintenance downtime.  Housing markets remain challenging, but we are well positioned in our Building Products business.”

Corrugated Packaging

   
Second Quarter
First Quarter
               
   
2010
  
2009
  
2010
  
               
Segment Operating Income (Millions)
  
$63
  
$91
  
$46
  


Earnings improved in second quarter 2010 compared with first quarter 2010 primarily due to higher prices which were partially offset by increased downtime and related costs. Operating income declined in second quarter 2010 compared with second quarter 2009 due primarily to higher input costs.

Building Products


   
Second Quarter
First Quarter
               
   
2010
  
2009
  
2010
  
               
Segment Operating Income (Millions)
  
$15
  
($3)
  
($9)
  


Building Products operating results improved in second quarter 2010 compared with first quarter 2010 due to higher prices and volumes for all our products.  Operating results improved in second quarter 2010 compared with second quarter 2009 due to higher lumber prices and higher volume for all our products.
 
 
Other

Special items in the quarter were primarily an after-tax charge of $1 million related to facility closures in connection with Box Plant Transformation II.

 
5
 

Temple-Inland will host a conference call on July 27, 2010, at 10:00 am ET to discuss results of second quarter 2010.  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: 80872111.  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: 80872111.

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 60 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; 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 publicly revise any forward-looking statements contained in this report to reflect the occurrence of events after the date of this report.


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)

   
Second Quarter
    
First Six Months
  
   
2010
    
2009
    
2010
    
2009
  
   
(In millions, except per share)
  
Revenues
                        
Corrugated packaging
$
786
  
$
762
  
$
1,538
  
$
1,552
  
Building products
  
190
    
144
    
343
    
295
  
Total revenues
$
976
  
$
906
  
$
1,881
  
$
1,847
  
                         
Income
                        
Corrugated packaging
$
63
  
$
91
  
$
109
  
$
196
  
Building products
  
15
    
(3
)
  
6
    
(5
)
Total segment operating income
  
78
    
88
    
115
    
191
  
Items not included in segments:
                        
General and administrative expense
  
(19
)
  
(18
)
  
(37
)
  
(35
)
Share-based and long-term incentive compensation
  
(8
)
  
(17
)
  
(14
)
  
(26
)
Other operating income (expense)
  
(2
)
  
75
    
(2
)
  
71
  
Other non-operating income (expense)
  
––
    
(9
)
  
––
    
1
  
Net interest income (expense) on financial assets and nonrecourse financial liabilities of special purpose entities
  
(4
)
  
(1
)
  
(7
)
  
1
  
Interest expense on debt
  
(13
)
  
(17
)
  
(26
)
  
(36
)
Income before taxes
  
32
    
101
    
29
    
167
  
Income tax expense
  
(12
)
  
(35
)
  
(14
)
  
(65
)
Net income
  
20
    
66
    
15
    
102
  
Net (income) loss attributable to noncontrolling interest of special purpose entities
  
––
    
––
    
1
    
(1
)
Net income attributable to Temple-Inland Inc.
$
20
  
$
66
  
$
16
  
$
101
  
                         
Average basic shares outstanding
  
107.9
    
106.7
    
107.8
    
106.7
  
Average diluted shares outstanding
  
109.7
    
107.8
    
109.5
    
107.2
  
                         
Per share information:
            
 
          
Basic earnings
$
0.19
  
$
0.62
  
$
0.15
  
$
0.95
  
Diluted earnings
$
0.18
  
$
0.61
  
$
0.15
  
$
0.94
  
Dividends
$
0.11
  
$
0.10
  
$
0.22
  
$
0.20
  
















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

   
Second Quarter-End
 2010
  
Year-End 2009
  
   
(Dollars in millions)
  
ASSETS
            
Current Assets
$
1,060
  
$
992
  
Property and Equipment
  
1,579
    
1,595
  
Financial Assets of Special Purpose Entities
  
2,474
    
2,475
  
Goodwill
  
394
    
394
  
Other Assets
  
254
    
253
  
TOTAL ASSETS
$
5,761
  
$
5,709
  
             
LIABILITIES
            
Current Liabilities
$
480
  
$
471
  
Long-Term Debt
  
745
    
710
  
Nonrecourse Financial Liabilities of Special Purpose Entities
  
2,140
    
2,140
  
Deferred Tax Liability
  
730
    
721
  
Liability for Pension Benefits
  
284
    
  285
  
Liability for Postretirement Benefits
  
103
    
105
  
Other Long-Term Liabilities
  
379
    
391
  
TOTAL LIABILITIES
  
4,861
    
4,823
  
SHAREHOLDERS’ EQUITY
            
Temple-Inland Inc. Shareholders’ Equity
  
809
    
794
  
Noncontrolling Interest of Special Purpose Entities
  
91
    
92
  
TOTAL SHAREHOLDERS’ EQUITY
  
900
    
886
  
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
$
5,761
  
$
5,709
  


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

 
Second Quarter
  
First Six Months
 
2010
  
2009
  
2010
  
2009
 
(In millions)
CASH PROVIDED BY (USED FOR) OPERATIONS
                              
Operations
$
75
 (a)
  
$
150
 (a) (b)
  
$
127
 (a)
  
$
264
 (a) (b)
Working capital
  
18
      
22
      
(33
 )(c)
    
(12
)
   
93
 
    
172
      
94
 
    
252
  
CASH PROVIDED BY (USED FOR) INVESTING
                              
   Capital expenditures
  
(52
)
    
(33
)
    
(85
)
    
(52
)
   Other
  
8
      
(7
)
    
––
      
(8
)
   
(44
)
    
(40
)
    
(85
)
    
(60
)
CASH PROVIDED BY (USED FOR) FINANCING
                              
   Cash dividends to shareholders
  
(12
)
    
(11
)
    
(23
)
    
(21
)
   Net change in debt
  
(19
)
    
(108
)
    
35
      
(148
)
   Other
  
1
      
(8
)
    
(10
)
    
(34
)
   
(30
)
    
(127
)
    
2
      
(203
)
Effect of exchange rate changes on cash and cash equivalents
  
––
      
2
      
1
      
1
  
Net increase (decrease) in cash and cash equivalents
  
19
      
7
      
12
      
(10
)
Cash and cash equivalents at beginning of period
  
29
      
24
      
36
      
41
  
Cash and cash equivalents at end of period
$
48
    
$
31
    
$
48
    
$
31
  
                               
SUPPLEMENTAL INFORMATION
                              
Depreciation and amortization
$
48
    
$
50
    
$
96
    
$
101
  
____________

(a)
Includes $15 million of voluntary, discretionary contributions to our defined benefit plan in second quarter and first six months 2010 and 2009.
(b)
Includes $63 million of alternative fuel mixture credits, net of related costs and tax payments, in second quarter and first six months 2009.
(c)
Includes $14 million of alternative fuel mixture credits that were accrued at year-end 2009.


 
9
 


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

 
Second
  
First
  
Fourth
  
Third
  
Second
  
 
Quarter
  
Quarter
  
Quarter
  
Quarter
  
Quarter
  
 
2010
  
2010
  
2009
  
2009
  
2009
  
 
(In millions)
  
CASH PROVIDED BY (USED FOR) OPERATIONS
                                        
Operations
$
75
 (a)
  
$
52
 
  
$
125
 (c)
  
$
160
 (a) (c)
  
$
150
 (a) (c)
  
Working capital
  
18
 
    
(51
) (b)
    
75
 (d)
    
28
      
22
    
   
93
      
1
      
200
 
    
188
      
172
    
CASH PROVIDED BY (USED FOR) INVESTING
                                        
   Capital expenditures
  
(52
)
    
(33
)
    
(49
)
    
(29
)
    
(33
)
  
   Other
  
8
      
(8
)
    
8
      
4
      
(7
)
  
   
(44
)
    
(41
)
    
(41
)
    
(25
)
    
(40
)
  
CASH PROVIDED BY (USED FOR) FINANCING
                                        
   Cash dividends to shareholders
  
(12
)
    
(11
)
    
(11
)
    
(11
)
    
(11
)
  
   Net change in debt
  
(19
)
    
54
      
(168
)
    
(151
)
    
(108
)
  
   Other
  
1
      
(11
)
    
13
      
11
      
(8
)
  
   
(30
)
    
32
      
(166
)
    
(151
)
    
(127
)
  
Effect of exchange rate changes on cash and cash equivalents
  
––
      
1
      
1
      
(1
)
    
2
    
Net increase (decrease) in cash and cash equivalents
  
19
      
(7
)
    
(6
)
    
11
      
7
    
Cash and cash equivalents at beginning of period
  
29
      
36
      
42
      
31
      
24
    
Cash and cash equivalents at end of period
$
48
    
$
29
    
$
36
    
$
42
    
$
31
    
                                         
SUPPLEMENTAL INFORMATION
                                        
Depreciation and amortization
$
48
    
$
48
    
$
49
    
$
50
    
$
50
    
____________

(a)
Includes $15 million of voluntary, discretionary contribution to our defined benefit plan in second quarter 2010, third and second quarter 2009.
(b)
Includes $14 million alternative fuel mixture tax credits that were accrued at year-end 2009.
(c)
Includes alternative fuel mixture tax credits, net of related costs and tax payments, of $54 million in fourth quarter 2009, $58 million in third quarter 2009, and $63 million in second quarter 2009.
(d)
Includes a $58 million federal income tax refund.


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

   
Second Quarter
    
First Six Months
  
   
2010
    
2009
    
2010
    
2009
  
Revenues
  
(Dollars in millions)
  
Corrugated packaging
                        
  Corrugated packaging
$
738
  
$
727
  
$
1,449
  
$
1,478
  
  Paperboard (a)
  
48
    
35
    
89
    
74
  
       Total corrugated packaging
$
786
  
$
762
  
$
1,538
  
$
1,552
  
Building products
                        
  Lumber
$
71
  
$
45
  
$
121
  
$
91
  
  Gypsum wallboard
  
40
    
33
    
73
    
71
  
  Particleboard
  
38
    
35
    
74
    
73
  
  Medium density fiberboard
  
21
    
15
    
39
    
33
  
  Fiberboard
  
9
    
7
    
16
    
10
  
  Other
  
11
    
9
    
20
    
17
  
Total building products
$
190
  
$
144
  
$
343
  
$
295
  

Unit Sales
                        
Corrugated packaging
                        
  Corrugated packaging, thousands of tons
 
838
    
836
    
1,684
    
1,665
  
  Paperboard, thousands of tons (a)
  
95
    
86
    
186
    
175
  
       Total, thousands of tons
  
933
    
922
    
1,870
    
1,840
  
Building products
                        
  Lumber, mbf
  
205
    
184
    
363
    
372
  
  Gypsum wallboard, msf
  
326
    
259
    
632
    
542
  
  Particleboard, msf
  
110
    
99
    
217
    
206
  
  Medium density fiberboard, msf
  
36
    
31
    
71
    
65
  
  Fiberboard, msf
  
45
    
37
    
79
    
54
  
____________

(a)
Paperboard includes containerboard and light-weight gypsum facing paper.


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

   
Second Quarter
    
First
Quarter
    
First Six Months
  
   
2010
    
2009
    
2010
    
2010
    
2009
  
   
(In millions, except per share)
  
NET INCOME (LOSS) EXCLUDING SPECIAL ITEMS
                              
Net income (loss) in accordance with GAAP
$
20
  
$
66
  
$
(4
)
$
16
  
$
101
  
Special items, after-tax:
                              
Alternative fuel mixture tax credits, net of costs
  
––
    
47
    
7
    
7
    
47
  
Facility closures and headcount reductions
  
(1
)
  
(1
)
  
(7
)
  
(8
)
  
(3
)
Litigation and other
  
––
    
––
    
––
    
––
    
(1
)
Substitution costs
  
––
    
(11
)
  
––
    
––
    
(11
)
Gain (loss) on purchase and retirement of debt
  
––
    
5
    
––
    
––
    
11
  
One-time tax expense due to the impact of Patient Protection and Affordable Care Act on the Medicare Part D retiree drug subsidy program
  
––
    
––
    
(3
)
  
(3
)
  
––
  
Total special items, after-tax
  
(1
)
  
40
    
(3
)
  
(4
)
  
43
  
Net income (loss), excluding special items
$
21
  
$
26
  
$
(1
)
$
20
  
$
58
  
                               
Net income (loss), per share, in accordance with GAAP
$
0.18
  
$
0.61
  
$
(0.04
)
$
0.15
  
$
0.94
  
Special items, after-tax, per share:
                              
Alternative fuel mixture tax credits, net of costs
  
––
    
0.43
    
0.07
    
0.07
    
0.43
  
Facility closures and headcount reductions
  
(0.01
)
  
(0.01
)
  
(0.07
)
  
(0.08
)
  
(0.03
)
Litigation and other
  
––
    
––
    
––
    
––
    
(0.01
)
Substitution costs
  
––
    
(0.10
)
  
––
    
––
    
(0.10
)
Gain (loss) on purchase and retirement of debt
  
––
    
0.05
    
––
    
––
    
0.11
  
One-time tax expense due to the impact of Patient Protection and Affordable Care Act on the Medicare Part D retiree drug subsidy program
  
––
    
––
    
(0.03
)
  
(0.03
 
 
)
  
––
  
Total special items, after-tax
  
(0.01
)
  
0.37
    
(0.03
)
  
(0.04
)
  
0.40
  
Net income (loss), per share, excluding special items
$
0.19
  
$
0.24
  
$
(0.01
)
$
0.19
  
$
0.54
  
                               
Average basic shares outstanding
  
107.9
    
106.7
    
107.7
    
107.8
    
106.7
  
Average diluted shares outstanding
  
109.7
    
107.8
    
109.2
    
109.5
    
107.2
  
                               
Building products EBITDA
                              
Segment operating income (loss) determined in
 accordance with GAAP
$
15
  
$
(3
)
$
(9
)
$
6
  
$
(5
)
Depreciation and amortization
  
10
    
11
    
11
    
21
    
23
  
Building products EBITDA
$
25
  
$
8
  
$
2
  
$
27
  
$
18
  
                               

 
 




 
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