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: April 25, 2007
(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, 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))

TABLE OF CONTENTS

Press Release

Presentation Materials

Item 2.02. Results of Operations and Financial Condition.

     On April 25, 2007, the Company issued a press release announcing the Company’s earnings for the quarter ended March 31, 2007. A copy of the press release is furnished as exhibit 99.1 of this report.

Item 7.01. Regulation FD Disclosure.

     On April 25, 2007, Kenneth M. Jastrow, II, Chief Executive Officer of Temple-Inland Inc., participated in a conference call discussing the Company’s earnings for the quarter ended March 31, 2007. Copies of the presentation materials used by Mr. Jastrow are furnished as exhibit 99.2 of this report.

Item 9.01. Financial Statements and Exhibits.

(c) Exhibits.

99.1	Press release issued by the Company on April 25, 2007, announcing the Company’s earnings for the quarter ended March 31, 2007.
99.2	Presentation materials of Kenneth M. Jastrow, II, Chief Executive Officer of Temple-Inland Inc., used in Mr. Jastrow’s conference call on April 25, 2007, discussing the Company’s earnings for the quarter ended March 31, 2007.

SIGNATURE

     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: April 25, 2007	By:	/s/ Doyle R. Simons
		Name:	Doyle R. Simons
		Title:	Executive Vice President

2

EXHIBIT INDEX

Exhibit	Description	Page
99.1	Press release issued by the Company on April 25, 2007, announcing the Company’s earnings for the quarter ended March 31, 2007		4
99.2	Presentation materials of Kenneth M. Jastrow, II, Chief Executive Officer of Temple-Inland Inc., used in Mr. Jastrow’s conference call on April 25, 2007, discussing the Company’s earnings for the quarter ended March 31, 2007		15

3

EX-99.1

Exhibit 99.1

NEWS

RELEASE

FOR IMMEDIATE RELEASE
CONTACT: Chris L. Nines
                     (512) 434-5587

TEMPLE-INLAND INC. REPORTS FIRST QUARTER 2007 RESULTS

     AUSTIN, TEXAS, April 25, 2007—Temple-Inland Inc. today reported first quarter 2007 net income of $38 million, or $0.35 per diluted share, compared with first quarter 2006 net income of $79 million, or $0.70 per diluted share, and fourth quarter 2006 net income of $103 million, or $0.96 per diluted share.

     Results for first quarter 2007 include a net after-tax special charge of $9 million, or $0.08 per share, related to costs for the Transformation Plan and an increase in litigation reserves after a recent California Supreme Court decision resulted in a longer limitation statute applying to certain claims in California regarding meal break laws. As reflected in the table below, net income per diluted share, excluding special items, for first quarter 2007 is $0.43 per share, compared with $0.72 per share in first quarter 2006, and $0.72 per share in fourth quarter 2006.

	First Quarter				Fourth Quarter
	2007		2006*		2006*
Net income per dil. share as reported	$	0.35	$	0.70	$	0.96
Adjustment for special items		0.08		0.02		(0.24	)
Net income per diluted share, Excluding special items	$	0.43	$	0.72	$	0.72
Average shares outstanding – diluted (in millions)		107.7		113.4		107.8

* Recast to reflect a change in method of accounting for planned major maintenance costs.

Corrugated Packaging

	1st Qtr.		1st Qtr.		4th Qtr.
Segment Operating Income	2007		2006*		2006*
($ in Millions)	$	64	$	44	$	72

* Recast to reflect a change in method of accounting for planned major maintenance.

     Corrugated Packaging operating income improved first quarter 2007 compared with first quarter 2006, principally due to higher corrugated container prices and lower energy costs. Operating income declined in first quarter 2007 compared with fourth quarter 2006 principally due to higher recycled fiber costs. Higher actual corrugated container volumes in first quarter 2007 compared with fourth quarter 2006 offset higher energy costs, planned maintenance at Rome, GA linerboard mill and lower corrugated container prices due to the loss of higher priced agriculture shipments in California and Mexico due to weather.

     Shipments first quarter 2007 were down 5%, on a volume per workday basis, compared with first quarter 2006 primarily due to the sale of Performance Sheets (a sheet feeder plant in City of Industry, California) August 2006. Excluding Performance Sheets, volumes were down 1% in first quarter 2007 compared with first quarter 2006 on a volume per workday basis. Actual shipments of corrugated containers were up 5% in first quarter 2007 compared with fourth quarter 2006. On a volume per workday basis, shipments of corrugated containers were down 1% first quarter 2007 compared with fourth quarter 2006. Additionally, shipments in first quarter 2007 were negatively impacted approximately 10,000 tons by weather conditions in California and Mexico.

     Average prices for corrugated containers first quarter 2007 were up 8% compared with first quarter 2006, but down 1% compared with fourth quarter 2006. First quarter 2007 prices were negatively affected by the loss of higher priced agriculture business in California and Mexico due to weather conditions. The average cost of recycled fiber first quarter 2007 was up 60% compared with first quarter 2006, and up 33% compared with fourth quarter 2006. Freight costs first quarter 2007 were down $1 million compared with first quarter 2006 and fourth quarter 2006. Energy costs were down $6 million first quarter 2007 compared with first quarter 2006, but up $3 million compared with fourth quarter 2006.

Forest Products

	1st Qtr.		1st Qtr.		4th Qtr.
Segment Operating Income	2007		2006		2006
($ in Millions)	$	38	$	82	$	46

     Operating income declined first quarter 2007 compared with first quarter 2006 primarily due to lower lumber prices and lower prices and shipments of gypsum. Operating income declined first quarter 2007 compared with fourth quarter 2006 principally due to lower prices and shipments for gypsum.

     Average lumber prices first quarter 2007 were down 25% compared with first quarter 2006, but up 1% compared with fourth quarter 2006. Gypsum prices were down 7% compared with first quarter 2006, and down 11% compared with fourth quarter 2006. Particleboard prices were up 22% compared with first quarter 2006, but down 4% compared with fourth quarter 2006.

     Shipments of lumber and particleboard were down in first quarter 2007 compared with first quarter 2006, but up compared with fourth quarter 2006. Shipments for gypsum were down in first quarter 2007 compared with first quarter 2006 and fourth quarter 2006.

Real Estate

	1st Qtr.		1st Qtr.		4th Qtr.
Segment Operating Income	2007		2006		2006
($ in Millions)	$	3	$	26	$	12

     Real estate reported operating income of $3 million in first quarter 2007, reflecting a slowdown in residential activity. First quarter 2006 segment operating income included a gain of $8 million on the sale of five acres of land for commercial use.

     During first quarter 2007, 268 acres of high-value land not suitable for development were sold at an average price of approximately $5,600 per acre.

     Residential activity for wholly-owned and joint venture projects during first quarter 2007 included the sale of 441 lots at an average price of approximately $56,400 per lot.

     Commercial activity during first quarter 2007, principally related to joint venture projects, included the sale of 30 acres at an average price of $294,000 per acre.

Financial Services

	1st Qtr.		1st Qtr.		4th Qtr.
Segment Operating Income	2007		2006		2006
($ in Millions)	$	49	$	49	$	53

     Financial Services operating income first quarter 2007 was flat compared with first quarter 2006. Operating income declined first quarter 2007 compared with fourth quarter 2006 principally due to lower average earning assets.

Comments

     In announcing first quarter results, Kenneth M. Jastrow, II, chairman and chief executive officer of Temple-Inland Inc. said, “Our Corrugated Packaging operation continues to benefit from strategic initiatives of full integration and increasing asset utilization. During first quarter 2007, our containerboard mills achieved record production levels despite planned maintenance downtime at Rome, GA. In addition, converting costs declined in first quarter 2007 compared with fourth quarter 2006 as asset utilization continued to increase.

     “Despite challenging market conditions, Forest Products positive results reflect our continued focus on low-cost, efficient converting operations and our mix of products.

     “Our real estate operation continues to focus on creating long-term value. During first quarter 2007 we transferred five projects with 1,470 acres into entitlement process. Real Estate operating income in first quarter 2007 was negatively impacted by a slowdown in residential lot sales activity.

     “Financial Services continues to focus on asset growth and lowering costs. Credit conditions remain favorable, and we continue to benefit from our decision to avoid subprime lending. In addition, diversification of our loan portfolio has been important as new loan activity in non-single family products has increased. Additionally, we have experienced deposit growth through our bank branches which are located in Texas and California, the two largest markets in the U.S.

Transformation Plan

     “February 26, 2007 we announced a Transformation Plan to maximize shareholder value by separating Temple-Inland into three focused, stand-alone public companies and selling our strategic timberland. During first quarter 2007, substantial progress has been made regarding each component of the transformation plan and we are on target to complete the process by year end. The three companies resulting from the plan — Temple-Inland, Guaranty Financial and Forestar — have exciting futures, and will be well positioned to continue to maximize value for shareholders going forward.”

     The Company will host a conference call on April 25, 2007 at 10:00 am EDT to discuss results of first quarter 2007. The meeting may be accessed through webcast or by conference call. The webcast may be accessed through Temple-Inland’s Internet site at www.templeinland.com. To access the conference call, listeners calling from North America should dial 1-800-901-5217 at least 15 minutes prior to the start of the meeting. Those wishing to access the call from outside North America should dial 1-617-786-2964. The password is templeinland. Replays of the call will be available for two weeks following the completion of the live call and can be accessed at 1-888-286-8010 in North America and at 1-617-801-6888 outside North America. The password for the replay is 44024155.

     Temple-Inland Inc. operates four business segments: corrugated packaging, forest products, real estate and financial services. The Company’s 2.0 million acres of forestland are certified as managed in compliance with ISO 14001 and in accordance with the Sustainable Forestry Initiative^® (SFI) Standard of the Sustainable Forestry Board to ensure forest management is conducted in a scientifically sound and environmentally sensitive manner. Temple-Inland’s common stock (TIN) is traded on the New York Stock Exchange. 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; demand for new housing; accuracy of accounting assumptions related to pension and postretirement costs, impaired assets, and the allowance for credit losses; competitive actions by other companies; changes in laws or regulations and actions or restrictions of regulatory agencies; our ability to execute certain strategic and business improvement initiatives, including the Transformation Plan; and other factors, many of which are beyond our control.

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

TEMPLE-INLAND INC. AND SUBSIDIARIES
UNAUDITED

Business Segments

	First Quarter
	2007			2006
	($ In millions,
	except per share)
Revenues
Corrugated packaging	$	761		$	721
Forest products		246			333
Real estate		30			47
Financial services		284			283
Total revenues	$	1,321		$	1,384
Income
Corrugated packaging	$	64		$	44
Forest products		38			82
Real estate		3			26
Financial services		49			49
Total segment operating income		154			201
Expenses not allocated to segments
General and administrative		(25	)		(23	)
Share-based compensation		(23	)		(16	)
Other operating income (expense)		(14	)		(3	)
Other non-operating income (expense)		—			—
Parent company interest		(31	)		(33	)
Income before taxes		61			126
Income taxes		(23	)		(47	)
Income from continuing operations		38			79
Discontinued operations		—			—
Net income	$	38		$	79
Diluted earnings per share:
Income from continuing operations	$	0.35		$	0.70
Discontinued operations		—			—
Net income	$	0.35		$	0.70
Average diluted shares outstanding		107.7			113.4

In January 2007 we changed our method of accounting for planned major maintenance costs from the previously accepted method of allocating the cost over interim periods within the year in which they were incurred to the expense as incurred method. As required by generally accepted accounting principles, we have retrospectively applied the expense as incurred method to our 2006 income statements and segment operating results, the effect of which is summarized as follows:

	Corrugated Packaging
	Segment				Income from Continuing
	Operating Income				Operations				Per Diluted Share
	As		Retrospective		As		Retrospective		As		Retrospective
	Reported		Application		Reported		Application		Reported		Application
2006
1st qtr	$	40	$	44	$	76	$	79	$	.67	$	.70
2nd qtr		67		66		192		191		1.71		1.70
3rd qtr		74		73		96		95		.87		.86
4th qtr		74		72		105		104		.98		.97
Year	$	255	$	255	$	469	$	469	$	4.23	$	4.23

Non-GAAP Financial Measure

     Net income excluding special items and net income per diluted share excluding special items are important measures for us and investors because they allow useful and consistent comparisons of on-going operations by excluding gains and losses that management believes are not indicative of our ongoing operating results.

     We define special items to include discontinued operations, effects of accounting changes, and other items such as gains or losses on sales of non-strategic assets; asset impairments; and unusual income, expenses, and tax benefits or charges. The most comparable GAAP measures are net income and net income per diluted share.

     Despite their importance to us, net income excluding special items and net income per diluted share excluding special items are non-GAAP financial measures that have no standardized definitions and as a result may not be comparable with other companies’ measures using the same or similar terms. This lack of comparability may limit the usefulness of these measures to us and investors. There may be other limits in the usefulness of these measures to investors. As a result, we encourage you to read our financial information in its entirety and not to rely on any single financial measure.

Calculation of Non-GAAP Financial Measure

					Fourth
	First Quarter				Quarter
	2007		2006		2006
	(In millions, except per share)
Net income determined in accordance with GAAP	$	38	$	79	$	103
Special items, after-tax, per diluted share
Closure and sale of converting and production facilities and sale of non-strategic assets		—		—		5
Hurricane related insurance proceeds		—		—		(1	)
Litigation and other		6		—		2
Transformation Plan		3		—		—
Softwood Lumber Agreement		—		—		(27	)
Financial Services repositioning activities		—		2		(1	)
One-time tax benefit		—		—		(4	)
Total special items, after-tax		9		2		(26	)
Net income excluding special items as defined	$	47	$	81	$	77
Average diluted shares outstanding		107.7		113.4		107.8
Net income per diluted share determined in accordance with GAAP	$	0.35	$	0.70	$	0.96
Special items, after-tax, per diluted share
Closure and sales of converting and production facilities and sale of non-strategic assets		—		—		0.05
Hurricane related insurance proceeds		—		—		(0.01	)
Litigation and other		0.06		—		0.02
Transformation Plan		0.02		—		—
Softwood Lumber Agreement		—		—		(0.25	)
Financial Services repositioning activities		—		0.02		(0.01	)
One-time tax benefit		—		—		(0.04	)
Total special items, per diluted share		0.08		0.02		(0.24	)
Net income per diluted share excluding special items as defined	$	0.43	$	0.72	$	0.72

TEMPLE-INLAND INC. AND SUBSIDIARIES
UNAUDITED

Revenues and unit sales of manufacturing subsidiaries, excluding joint venture operations follows:

	First Quarter
	2007		2006
	($ in Millions)
Revenues
Corrugated Packaging
Corrugated Packaging	$	717	$	698
Linerboard		44		23
Total Corrugated Packaging	$	761	$	721
Forest Products
Pine lumber	$	59	$	84
Gypsum wallboard		70		112
Particleboard		52		49
Medium density fiberboard		17		16
Fiberboard		14		21
Mineral and hunting leases		9		14
Fiber and other		25		37
Total Forest Products	$	246	$	333
Unit sales
Corrugated Packaging
Corrugated Packaging, thousands of tons		830		869
Linerboard, thousands of tons		100		60
Total, thousands of tons		930		929
Forest Products
Pine lumber, mbf		203		218
Gypsum wallboard, msf		382		563
Particleboard, msf		143		165
Medium density fiberboard, msf		37		39
Fiberboard, msf		74		102

Supplemental Financial Information:

Supplemental Financial Information for Temple-Inland and its manufacturing and real estate subsidiaries follows:

	First Quarter
	2007		2006
Cash Balance (at qtr. end)	$	24	$	11
Total Debt (at qtr. end)	$	1,734	$	1,843
Capital Expenditures (including reforestation)	$	42	$	32

A summary of projects in the entitlement process^(a) at first quarter-end 2007 follows:

		Project
Project	County	Acres(b)
California
Hidden Creek Estates	Los Angeles		700
Terrace at Hidden Hills	Los Angeles		30
Georgia
Ballground	Cherokee		500
Bay Springs	Carroll		400
Birch House Farms	Bartow		140
Crossing	Coweta		230
Dunaway Gardens	Coweta		200
Euharlee II West	Bartow		360
Fincher Road	Cherokee		950
Four Seasons	Coweta		800
Friendship Road	Cherokee		110
Garland Mountain	Cherokee/Bartow		350
Gold Creek	Dawson/Lumpkin		1,090
Grove Park	Coweta		160
Happy Valley Farm	Coweta		750
Jackson Park	Jackson		690
Lithia Springs	Haralson		260
Mill Creek	Coweta		780
Overlook	Cherokee		510
Pickens School	Pickens		420
Whitfield Estates	Jackson		180
Wolf Creek	Carroll		12,180
Yellow Creek	Cherokee		1,100
Texas
Lake Houston	Harris/Liberty		3,630
Entrada (c)	Travis		240
Woodlake Village (c)	Montgomery		620
Total			27,380

(a)	A project is deemed to be in the entitlement process when customary steps necessary for the preparation and submittal of an application, like conducting pre-application meetings or similar discussions with governmental officials, have commenced, or an application has been filed. Projects listed may have significant steps remaining, and there is no assurance that entitlements ultimately will be received.
(b)	Project acres are approximate. The actual number of acres entitled may vary.
(c)	We own a 50% interest in these projects.

A summary of activity within our entitled,^(a) developed and under development projects at first quarter-end 2007 follows:

			Residential Lots				Commercial Acres (c)
			Lots Sold				Acres Sold
		Interest	Since				Since		Acres
Project	County	Owned(b)	Inception		Lots Remaining		Inception		Remaining
Projects we own
Colorado
Buffalo Highlands	Weld	100%		—		645		—		—
Johnstown Farms	Weld	100%		115		699		—		—
Pinery West	Douglas	100%		—		—		—		115
Stonebraker	Weld	100%		—		600		—		—
Texas
Arrowhead Ranch	Hays	100%		—		232		—		5
Caruth Lakes	Rockwell	100%		245		629		—		—
Cibolo Canyons	Bexar	100%		428		1,321		64		81
Harbor Lakes	Hood	100%		177		401		—		13
Harbor Mist	Calhoun	100%		—		1,393		—		36
Hunter’s Crossing	Bastrop	100%		250		327		19		95
Katy Freeway	Harris	100%		—		—		—		40
La Conterra	Williamson	100%		—		509		—		60
Maxwell Creek	Collin	100%		546		477		—		—
Oakcreek Estates	Comal	100%		—		630		—		—
The Colony	Bastrop	100%		340		1,085		22		50
The Gables at North Hill	Collin	100%		182		100		—		—
The Preserve at Pecan Creek	Denton	100%		73		746		—		9
The Ridge at Ribelin Ranch	Travis	100%		—		—		126		77
Other Texas Projects (6)	Various	100%		2,170		129		62		39
Georgia
Other projects (6)	Various	100%		—		3,540		—		161
Missouri and Utah
Other Projects (3)	Various	100%		746		271		—		—
				5,272		13,734		293		781
Projects in entities we consolidate
Texas
City Park	Harris	75%		609		692		36		129
Lantana (d)	Denton	55%		216		2,134		—		—
Light Ranch	Collin	75%		—		2,496		—		—
Other Texas Projects (6)	Various	Various		273		308		5		60
				1,098		5,630		41		189
Total owned and consolidated				6,370		19,364		334		970
Projects in ventures that we account for using the equity method
Georgia
Seven Hills	Paulding	50%		566		514		26		—
The Georgian	Paulding	38%		283		1,102		—		—
Other Georgia projects (5)	Various	Various		1,842		250		—		—
Texas
Bar C Ranch	Tarrant	50%		148		1,033		—		—
Fannin Farms West	Tarrant	50%		224		219		—		—
Lantana (d)	Denton	Various		1,675		173		1		79
Long Meadow Farms	Fort Bend	19%		535		1,649		20		190
Southern Trails	Brazoria	40%		189		871		—		—
Stonewall Estates	Bexar	25%		62		328		—		—
Summer Creek Ranch	Tarrant	50%		780		1,708		—		374
Summer Lakes	Fort Bend	50%		294		850		42		9
Village Park	Collin	50%		311		258		—		5
Waterford Park	Fort Bend	50%		—		493		—		37
Other Texas projects (4)	Various	Various		251		279		—		37
Florida
Other projects (3)	Various	Various		473		372		—		—
Total in ventures				7,633		10,099		89		731
Combined Total				14,003		29,463		423		1,701

(a)	A project is deemed entitled when all major discretionary land-use approvals have been received. Some projects may require additional permits for development.
(b)	Interest owned reflects our equity interest in the project, whether owned directly or indirectly. There are some projects that have multiple ownership structures within them. Accordingly, portions of these projects may appear as owned, consolidated and/or accounted for on the equity method.
(c)	Commercial acres are net developable acres, and may be fewer than the gross acres available in the project.
(d)	The Lantana project consists of a series of 19 partnerships in which our interests range from 25% to 55%. We account for eight of these partnerships in which our interests range from 25% to 50% using the equity method and we consolidate the remaining partnerships.

EX-99.2

Exhibit 99.2

First Quarter 2007 Results April 25, 2007

2 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; demand for new housing; accuracy of accounting assumptions related to pension and postretirement costs, impaired assets, and the allowance for credit losses; competitive actions by other companies; changes in laws or regulations and actions or restrictions of regulatory agencies; our ability to execute certain strategic and business improvement initiatives, including the Transformation Plan; and other factors, many of which are beyond our control. This presentation includes non-GAAP financial measures. The required reconciliations to GAAP financial measures are included on our website, www.templeinland.com.

First Quarter Results ($ in Millions) Net Income $ 38 $ 79 $ 103 Diluted EPS $ 0.35 $ 0.70 $ 0.96 1st Qtr 1st Qtr 4th Qtr 2007 2006 2006 TIN 3 Increase in stock price during first quarter 2007 resulted in a pre-tax increase of $7 million in share-based compensation expenses ($0.04 per share, after-tax). 2006 results have been recast to reflect new accounting requirements for planned major maintenance costs.

First Quarter Results (cont'd) Net income per dil. share $ 0.35 $ 0.70 $ 0.96 Special items 0.08 0.02 (0.24) Net income per dil. share $ 0.43 $ 0.72 $ 0.72 excluding special items 1st Qtr 1st Qtr 4th Qtr 2007 2006 2006 4 1st qtr. 2007 after-tax special charges of $9 million, ($0.08) per share related to costs for the Transformation Plan and an increase in litigation reserves after a recent California Supreme Court decision resulted in a longer limitation statute applying to certain claims in California regarding meal break laws.

First Quarter Segment Results Operating Income (millions) Corrugated Packaging $ 64 $ 44 $ 72 Forest Products 38 82 46 Real Estate 3 26 12 Financial Services 49 49 53 $154 $201 $183 1st Qtr 1st Qtr 4th Qtr 2007 2006 2006 5

Corrugated Packaging 1st Qtr 1st Qtr 4th Qtr 2007 2006 2006 $ 64 $ 44 $ 72 Operating income (millions) 6 Price - 1st qtr. 2007 avg. box price up $62/ton vs. 1st qtr. 2006 avg. - 1st qtr. 2007 avg. box price down $9/ton vs. 4th qtr. 2006 avg. - 1st qtr. 2007 price negatively impacted by loss of higher priced agriculture business in California and Mexico due to weather

Corrugated Packaging (Cont'd) TIN Box Volumes 7 Actual Volume Per Workday Basis 1st qtr. 2007 vs. 4th qtr. 2006 5.2% (1.4%) 1st qtr. 2007 vs. 1st qtr. 2006 (4.5%) (4.5%) 1st qtr. 2007 vs. 1st qtr. 2006 (Excluding Performance Sheets) (1.0%) (1.0%) California / Mexico weather negatively impacted 1st qtr. 2007 shipments approximately 10,000 tons

Corrugated Packaging (Cont'd) Freight Freight costs down $1 million vs. 1st qtr. 2006 and 4th qtr. 2006 Energy Energy costs down $6 million vs. 1st qtr. 2006, but up $3 million vs. 4th qtr. 2006 8

Corrugated Packaging (Cont'd) Recycled Fiber Recycled fiber costs up $49/ton vs. 1st qtr. 2006 and up $33/ton vs. 4th qtr. 2006 Current recycled fiber costs up $12/ton vs. 1st qtr. 2007 1st qtr. 2007 scheduled outage - Rome, GA - negatively impacted production approximately 24,000 tons 2nd qtr. 2007 scheduled outages - primarily Orange, TX - negatively impact production 16,000 tons 9

Forest Products 1st Qtr 1st Qtr 4th Qtr 2007 2006 2006 $ 38 $ 82 $ 46 Operating income (millions) Lumber - - Average price down $95/mbf vs. 1st qtr. 2006, but up $2/mbf vs. 4th qtr. 2006 - - Volume down 7% vs. 1st qtr. 2006, but up 8% vs. 4th qtr. 2006 - - Current prices down $3/mbf vs. 1st qtr. 2007 avg. price 10

Forest Products (Cont'd) Gypsum - - Average price down $14/msf vs. 1st qtr. 2006, and down $22/msf vs. 4th qtr. 2006 - - Volume down 32% vs. 1st qtr. 2006, and down 13% vs. 4th qtr. 2006 - - Current prices down $22/msf vs. 1st qtr. 2007 avg. price 11 Particleboard - - Average price up $65/msf vs. 1st qtr. 2006, but down $14/msf vs. 4th qtr. 2006 - - Volume down 13% vs. 1st qtr. 2006, but up 21% vs. 4th qtr. 2006 - - Current prices down $7/msf vs. 1st qtr. 2007 avg. price

Real Estate 1st Qtr 1st Qtr 4th Qtr 2007 2006 2006 $ 3 $ 26 $ 12 Operating income (millions) Entitlement Activity 1st qtr. 2007 5 projects with 1,470 acres moved into entitlement process Zoning approved on 1 project - 186 acres (112 lots) of high-value land in GA Investment Activity 1st qtr. 2007 Invested in 3 projects in Texas: 2,124 residential acres 42 commercial acres 2,166 total acres 12

Real Estate - 1st Qtr. 2007 Sales High-Value Land Sold 268 acres of land not suitable for development Avg. price per acre - $5,600 Residential* Sold 441 lots Average Revenue Per Lot - $56,400 Average Gross Profit Per Lot - $20,500 Commercial* Sold 30 Acres Average Price Per Acre - $294,000 13 * Includes venture activity

Real Estate Pipeline (Acres) 14 Note: Estimated acres and lots may vary

Financial Services 1st Qtr 1st Qtr 4th Qtr 2007 2006 2006 $ 49 $ 49 $ 53 Operating income (millions) 15 1st qtr. 2007 earnings flat compared with 1st qtr. 2006 1st qtr. 2007 earnings down compared with 4th qtr. 2006 due to lower average earning assets Credit conditions remain favorable

Transformation Plan Update 16 Feb. 26, 2007 - Transformation Plan announced - - Three focused, stand-alone public-companies well positioned to maximize value for shareholders going forward Temple-Inland - Corrugated Packaging & Building Products Guaranty Financial - Banking & Insurance Forestar - Real Estate Development - - Sale of strategic timberland

Transformation Plan Update 17 April 2, 2007 - Future executive leadership announced, to become effective upon completion of Transformation Plan Doyle Simons - Chairman & CEO of Temple-Inland Pat Maley - President & COO of Temple-Inland Ken Dubuque - President & CEO of Guaranty Jim DeCosmo - President & CEO of Forestar Transformation Plan on track for completion by year end