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: October 24, 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))

Item 2.02. Results of Operations and Financial Condition.

          On October 24, 2007, the Company issued a press release announcing the Company’s earnings for the quarter ended September 29, 2007. A copy of the press release is furnished as exhibit 99.1 of this report.

Item 7.01. Regulation FD Disclosure.

          On October 24, 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 September 29, 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.

(d) Exhibits.

99.1	Press release issued by the Company on October 24, 2007, announcing the Company’s earnings for the quarter ended September 29, 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 October 24, 2007, discussing the Company’s earnings for the quarter ended September 29, 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: October 24, 2007	By:	/s/ Doyle R. Simons
		Name:	Doyle R. Simons
		Title:	Executive Vice President

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EXHIBIT INDEX

Exhibit	Description	Page
99.1	Press release issued by the Company on October 24, 2007, announcing the Company’s earnings for the quarter ended September 29, 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 October 24, 2007, discussing the Company’s earnings for the quarter ended September 29, 2007		14

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EX-99.1

Exhibit 99.1

NEWS

RELEASE

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

TEMPLE-INLAND INC. REPORTS THIRD QUARTER 2007 RESULTS

     AUSTIN, TEXAS, October 24, 2007—Temple-Inland Inc. today reported third quarter 2007 net income of $36 million, or $0.33 per diluted share, compared with third quarter 2006 net income of $95 million, or $0.86 per diluted share, and second quarter 2007 net income of $66 million, or $0.62 per diluted share.

          Results for third quarter 2007 include (i) an after-tax special charge of $7 million, or $0.06 per share, principally related to costs associated with our Transformation Plan, and (ii) an $8 million after-tax charge, or $0.08 per share, related to the disposition of our chemical business, a discontinued operation. In total, the effect of these special items on third quarter 2007 was $15 million, or $0.14 per share. As reflected in the table below, net income per diluted share, excluding special items, for third quarter 2007 is $0.47, compared with $0.92 in third quarter 2006, and $0.59 in second quarter 2007.

	Third Quarter				Second Quarter
	2007		2006		2007
Net income per dil. share as reported	$	0.33	$	0.86	$	0.62
Adjustment for special items		0.14		0.06		(0.03	)
Net income per diluted share,	$	0.47	$	0.92	$	0.59
excluding special items
Average shares outstanding – diluted		107.8		110.3		108.1
(in millions)

Corrugated Packaging

	3rd Qtr.	3rd Qtr.	2ndQtr.
Segment Operating Income	2007	2006	2007
($ in Millions)	$70	$73	$78

          Corrugated Packaging reported third quarter 2007 operating income of $70 million. Lower converting costs and volume growth in third quarter 2007 compared with third quarter 2006 offset higher recycled fiber costs. Operating income declined third quarter 2007 compared with second quarter 2007 principally due to lower corrugated container volumes and higher recycled fiber costs.

          Excluding the sale of Performance Sheets (a sheet feeder plant sold August 2006), volume on a per workday basis was up 3% in third quarter 2007 compared with third quarter 2006. On a volume per workday basis, shipments of corrugated containers were down 3% third quarter 2007 compared with second quarter 2007. Year-to-date shipments, on a volume per workday basis, are up 1% compared with 2006.

          Average prices for corrugated containers third quarter 2007 were down approximately 1% compared with third quarter 2006 and second quarter 2007. The average cost of recycled fiber third quarter 2007 was up 41% compared with third quarter 2006, and up 12% compared with second quarter 2007. Freight costs third quarter 2007 were up $3 million compared with third quarter 2006, but flat compared with second quarter 2007. Energy costs were flat third quarter 2007 compared with third quarter 2006, but down $6 million compared with second quarter 2007.

Forest Products

	3rd Qtr.	3rd Qtr.	2nd Qtr.
Segment Operating Income	2007	2006	2007
($ in Millions)	$21	$83	$33

          Forest Products operating income declined third quarter 2007 compared with third quarter 2006 primarily due to lower prices and lower shipments. Operating income declined third quarter 2007 compared with second quarter 2007 principally due to lower gypsum prices.

          Average lumber prices third quarter 2007 were down 1% compared with third quarter 2006, and flat compared with second quarter 2007. Gypsum prices third quarter 2007 were down 38% compared with third quarter 2006, and down 13% compared with second quarter 2007. Particleboard prices third quarter 2007 were down 8% compared with third quarter 2006, and down 3% compared with second quarter 2007.

          Shipments of lumber third quarter 2007 were up 4% compared with third quarter 2006, but were down 3% compared with second quarter 2007. Shipments of gypsum were down 19% third quarter 2007 compared with third quarter 2006, and down 11% compared with second quarter 2007. Shipments of particleboard were down 27% third quarter 2007 compared with third quarter 2006, and down 11% compared with second quarter 2007.

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Real Estate

	3rd Qtr.	3rd Qtr.	2nd Qtr.
Segment Operating Income	2007	2006	2007
($ in Millions)	$10	$15	$19

          Real Estate reported third quarter 2007 operating income of $10 million, including a $4 million gain from the sale of commercial land.

          Third quarter 2007 high-value land sales totaled 770 acres at an average price of approximately $7,400 per acre.

          Residential activity for wholly-owned and joint venture projects in third quarter 2007 included the sale of 299 lots at an average price of approximately $58,900 per lot.

          Commercial activity for wholly-owned and joint venture projects in third quarter 2007 included the sale of 69 acres at an average price of approximately $206,600 per acre.

Financial Services

	3rd Qtr.	3rd Qtr.	2nd Qtr.
Segment Operating Income	2007	2006	2007
($ in Millions)	$37	$58	$48

          Financial Services operating income declined third quarter 2007 compared with third quarter 2006 and second quarter 2007 principally due to a higher loan loss provision.

Comments

          In announcing third quarter results, Kenneth M. Jastrow, II, chairman and chief executive officer of Temple-Inland Inc. said, “Our Corrugated Packaging operation continues to benefit from improving market conditions and strategic initiatives of full integration and increasing asset utilization. During third quarter 2007 we generated $18 million in additional business improvement compared with third quarter 2006, driven by lower converting costs and volume growth. Market conditions remain favorable and we expect to continue realizing additional business improvement going forward.

          “Forest Products results reflect challenging market conditions. Production in our converting operations is being reduced to match demand for our building products.

          “Real Estate operating income during third quarter 2007 benefited from commercial and high-value land sales activity. Consistent with our focus on value creation, nine projects, representing over 3,000 acres of our high-value land around Atlanta have been entitled over the past year.

          “Financial Services results were negatively impacted by higher loan loss provision during third quarter 2007 reflecting challenging homebuilding and current credit market conditions.

          

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Financial Services continues to focus on asset generation, low cost, and expanding our branch network located in Texas and California, two of the fastest growing deposit 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,” Mr. Jastrow continued. “During third quarter 2007, substantial progress was made regarding each component of the Transformation Plan and we are on track to complete the transformation plan by year end. We announced a definitive agreement with an investment entity affiliated with The Campbell Group, Inc. to sell 1.55 million acres of timberland for $2.38 billion. We expect to use the majority of these proceeds to pay a special dividend, which is currently estimated to be approximately $1.1 billion, or $10.25 per share, to our common stockholders. The remaining approximately $700 million of the cash proceeds will be used to reduce debt.

          “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 October 24, 2007 at 10:00 am EDT to discuss results of third 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 27104318.

          Temple-Inland Inc. operates four business segments: corrugated packaging, forest products, real estate and financial services. 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.

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TEMPLE-INLAND INC. AND SUBSIDIARIES
UNAUDITED

Business Segments

	Third Quarter						First Nine Months
	2007			2006			2007			2006
	(Dollars in millions, except per share)
Revenues
Corrugated packaging	$	748		$	746		$	2,288		$	2,225
Forest products		223			310			718			984
Real estate		33			59			106			141
Financial services		295			294			866			876
Total revenues	$	1,299		$	1,409		$	3,978		$	4,226
Income
Corrugated packaging(a)	$	70		$	73		$	212		$	183
Forest products		21			83			92			266
Real estate		10			15			32			50
Financial services		37			58			134			169
Total segment operating income		138			229			470			668
Expenses not allocated to segments General and administrative		(23	)		(28	)		(75	)		(77	)
Share-based compensation		(3	)		(8	)		(41	)		(32	)
Other operating income (expense)		(6	)		(10	)		(21	)		(21	)
Other non-operating income (expense)		1			1			2			92
Parent company interest		(31	)		(31	)		(93	)		(98	)
Income before taxes		76			153			242			532
Income taxes		(32	)		(58	)		(94	)		(167	)
Income from continuing operations(a)		44			95			148			365
Discontinued operations		(8	)		—			(8	)		—
Net income	$	36		$	95		$	140		$	365
Diluted earnings per share:
Income from continuing operations(a)	$	0.41		$	0.86		$	1.38		$	3.26
Discontinued operations		(0.08	)		—			(0.08	)		—
Net income	$	0.33		$	0.86		$	1.30		$	3.26
Average diluted shares outstanding		107.8			110.3			107.9			111.8

^(a) We have recast prior period results to expense planned major maintenance costs as incurred.

	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 Measures

          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

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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 Measures

					Second
	Third Quarter				Quarter
	2007		2006		2007
	(In millions, except per share)
Net income determined in accordance with GAAP	$	36	$	95	$	66
Special items, after-tax:
Litigation and other		3		2		3
Transformation costs		4		—		2
Gain on sale of non-strategic timber leases		—		—		(5	)
One-time tax benefit		—		—		(3	)
Asset impairment		—		3		—
Financial Services repositioning activities		—		1		—
Discontinued operations		8		—		—
Net income excluding special items	$	51	$	101	$	63
Net income per diluted share determined in accordance with GAAP	$	0.33	$	0.86	$	0.62
Special items, after-tax, per diluted share:
Litigation and other		0.02		0.02		0.03
Transformation costs		0.04		—		0.02
Gain on sale of non-strategic timber leases		—		—		(0.05	)
One-time tax benefit		—		—		(0.03	)
Asset impairment		—		0.03		—
Financial Services repositioning activities		—		0.01		—
Discontinued operations		0.08		—		—
	- -
Net income per diluted share excluding special items	$	0.47	$	0.92	$	0.59
Average diluted shares outstanding		107.8		110.3		108.1

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TEMPLE-INLAND INC. AND SUBSIDIARIES
UNAUDITED

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

	Third Quarter				First Nine Months
	2007		2006		2007		2006
	(Dollars in millions)
Revenues
Corrugated Packaging
Corrugated packaging	$	717	$	713	$	2,178	$	2,148
Linerboard		31		33		110		77
Total Corrugated Packaging	$	748	$	746	$	2,288	$	2,225
Forest Products
Pine lumber	$	64	$	64	$	190	$	224
Gypsum wallboard		52		102		189		330
Particleboard		42		62		143		169
Medium density fiberboard		15		17		49		52
Fiberboard		13		16		41		59
Hunting, mineral and recreational leases		12		10		31		38
Fiber and other		25		39		75		112
Total Forest Products	$	223	$	310	$	718	$	984
Unit sales
Corrugated Packaging
Corrugated packaging, thousands of tons		839		829		2,535		2,582
Linerboard, thousands of tons		67		70		243		177
Total, thousands of tons		906		899		2,778		2,759
Forest Products
Pine lumber, mbf		215		207		640		641
Gypsum wallboard, msf		368		453		1,164		1,553
Particleboard, msf		119		162		396		491
Medium density fiberboard, msf		32		35		106		115
Fiberboard, msf		75		89		228		297

Supplemental Financial Information:

Supplemental Financial Information for the Parent Company and its manufacturing subsidiaries follows:

	Third Quarter				First Nine Months
	2007		2006		2007		2006
	(Dollars in millions)
Cash Balance (at qtr. end)	$	41	$	48
Total Debt (at qtr. end)	$	1,668	$	1,628
Capital Expenditures (including reforestation)	$	58	$	63	$	152	$	142

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

		Project
Project	County	Acres(b)
California
Hidden Creek Estates	Los Angeles		700
Terrace at Hidden Hills	Los Angeles		30
Georgia
Ball Ground	Cherokee		500
Burt Creek	Dawson/Lumpkin		990
Cedar Creek Preserve	Coweta		200
City of Waleska	Cherokee		150
Corinth Landing	Coweta		800
Crossing	Coweta		230
Fincher Road	Cherokee		950
Genesee	Coweta		750
Grove Park	Coweta		160
Mill Creek	Coweta		780
Overlook	Cherokee		510
Pickens School	Pickens		420
Serenity	Carroll		400
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			25,340

(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, which are the total for the project regardless of our ownership interest, are approximate. The actual number of acres entitled may vary.
(c)	We own a 50% interest in these projects.

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

			Residential Lots(c)				Commercial Acres(d)
			Lots Sold				Acres Sold
		Interest	Since		Lots		Since		Acres
Project	County	Owned(b)	Inception		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	Rockwall	100%		245		629		—		—
Cibolo Canyons	Bexar	100%		464		1,285		64		81
Harbor Lakes	Hood	100%		196		256		—		14
Harbor Mist	Calhoun	100%		—		1,393		—		36
Hunter’s Crossing	Bastrop	100%		268		309		19		95
Katy Freeway	Harris	100%		—		—		38		—
La Conterra	Williamson	100%		—		509		—		60
Maxwell Creek	Collin	100%		580		443		—		—
Oakcreek Estates	Comal	100%		—		648		13		—
The Colony	Bastrop	100%		347		1,078		22		50
The Gables at North Hill	Collin	100%		193		89		—		—
The Preserve at Pecan Creek	Denton	100%		138		681		—		9
The Ridge at Ribelin Ranch	Travis	100%		—		—		161		40
Other projects (6)	Various	100%		2,173		125		68		33
Georgia
Towne West	Bartow	100%		—		2,550		—		121
Other projects (8)	Various	100%		—		1,485		—		40
Missouri and Utah
Other projects (3)	Various	100%		775		242		—		—
				5,494		13,898		385		699
Projects in entities we consolidate
Texas
City Park	Harris	75%		754		557		50		115
Lantana	Denton	55% (e)		329		2,021		—		—
Light Farms	Collin	65%		—		2,501		—		—
Timber Creek	Collin	88%		—		654		—		—
Other projects (5)	Various	Various		292		337		13		54
				1,375		6,070		63		169
Total owned and consolidated				6,869		19,968		448		868
Projects in ventures that we account for using the equity method
Georgia
Seven Hills	Paulding	50%		620		460		26		—
The Georgian	Paulding	38%		285		1,100		—		—
Other projects (5)	Various	Various		1,844		187		3		—
Texas
Bar C Ranch	Tarrant	50%		173		1,008		—		—
Fannin Farms West	Tarrant	50%		224		219		—		—
Lantana	Denton	Various (e)		1,755		93		2		78
Long Meadow Farms	Fort Bend	19%		594		1,590		24		186
Southern Trails	Brazoria	40%		232		830		—		—
Stonewall Estates	Bexar	25%		97		154		—		—
Summer Creek Ranch	Tarrant	50%		793		1,695		—		374
Summer Lakes	Fort Bend	50%		294		850		48		3
Village Park	Collin	50%		313		256		—		5
Waterford Park	Fort Bend	50%		—		493		—		37
Other projects (3)	Various	Various		278		251		—		37
Florida
Other projects (3)	Various	Various		473		372		—		—
Total in ventures				7,975		9,558		103		720
Combined Total				14,844		29,526		551		1,588

(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 using the equity method.
(C)	Lots are for the total project, regardless of our ownership interest.
(d)	Commercial acres are for the total project, regardless of our ownership interest and are net developable acres, which may be fewer than the gross acres available in the project.
(e)	The Lantana project consists of a series of 21 partnerships in which our voting interests range from 25% to 55%. We account for eight of these partnerships using the equity method and we consolidate the remaining partnerships.

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EX-99.2

Exhibit 99.2

Third Quarter 2007 Results October 24, 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.

Third Quarter 2007 Results ($ in millions, except per share) Net Income $ 36 $ 95 $ 66 Diluted EPS $ 0.33 $ 0.86 $ 0.62 3rd Qtr 3rd Qtr 2nd Qtr 2007 2006 2007 TIN 3

Third Quarter 2007 Results (cont'd) Net income per dil. share $ 0.33 $ 0.86 $ 0.62 Special items 0.14 0.06 (0.03) Net income per dil. share $ 0.47 $ 0.92 $ 0.59 excluding special items 3rd Qtr 3rd Qtr 2nd Qtr 2007 2006 2007 4 3rd qtr. 2007 after-tax special items - $15 million, $0.14 per share - - $7 million charge, $0.06 per share, principally related to costs associated with our Transformation Plan - - $8 million loss, $0.08 per share, related to disposition of our chemical business, a discontinued operation

Third Quarter Segment Results Operating Income (millions) Corrugated Packaging $ 70 $ 73 $ 78 Forest Products 21 83 33 Real Estate 10 15 19 Financial Services 37 58 48 $138 $229 $178 3rd Qtr 3rd Qtr 2nd Qtr 2007 2006 2007 5

Corrugated Packaging 3rd Qtr 3rd Qtr 2nd Qtr 2007 2006 2007 $ 70 $ 73 $ 78 Operating income (millions) 6 Price - 3rd qtr. 2007 avg. box price down $10/ton vs. 3rd qtr. 2006 avg. - 3rd qtr. 2007 avg. box price down $6/ton vs. 2nd qtr. 2007 avg. - October 2007 avg. box price up $20/ton vs. 3rd qtr. 2007 avg.

Corrugated Packaging (Cont'd) Box Volumes - Per Workday Basis 7 TIN Industry 3rd qtr. 2007 vs. 3rd qtr. 2006 3.2% (1.5%) (Excluding Performance Sheets) YTD 2007 vs. YTD 2006 1.2% (1.7%) (Excluding Performance Sheets) 4th qtr. 2007 Box Shipments Anticipate normal seasonal decline in shipments 4th qtr. 2007 (approximately 25,000 tons) 4th qtr. 2007 box shipments anticipated to exceed 4th qtr. 2006

Corrugated Packaging (Cont'd) Freight Freight costs up $3 million vs. 3rd qtr. 2006, but essentially flat vs. 2nd qtr. 2007 Energy Energy costs flat vs. 3rd qtr. 2006, but down $6 million vs. 2nd qtr. 2007 8

Corrugated Packaging (Cont'd) Recycled Fiber Recycled fiber costs up $36/ton vs. 3rd qtr. 2006 and up $17/ton vs. 2nd qtr. 2007 Current recycled fiber costs up $7/ton vs. 3rd qtr. 2007 4th qtr. 2007 scheduled maintenance outages - Maysville, KY and Orange, TX - negatively impact production approximately 20,000 tons 9

Forest Products 3rd Qtr 3rd Qtr 2nd Qtr 2007 2006 2007 $ 21 $ 83 $ 33 Operating income (millions) Lumber - - Average price down $4/mbf vs. 3rd qtr. 2006, but flat vs. 2nd qtr. 2007 - - Volume up 4% vs. 3rd qtr. 2006, but down 3% vs. 2nd qtr. 2007 - - Current prices down $20/mbf vs. 3rd qtr. 2007 avg. price 10

Forest Products (Cont'd) Gypsum - - Average price down $86/msf vs. 3rd qtr. 2006 and down $21/msf vs. 2nd qtr. 2007 - - Volume down 19% vs. 3rd qtr. 2006 and down 11% vs. 2nd qtr. 2007 - - Current prices down $15/msf vs. 3rd qtr. 2007 avg. price 11 Particleboard - - Average price down $32/msf vs. 3rd qtr. 2006 and down $12/msf vs. 2nd qtr. 2007 - - Volume down 27% vs. 3rd qtr. 2006 and down 11% vs. 2nd qtr. 2007 - - Current prices down $10/msf vs. 3rd qtr. 2007 avg. price

Real Estate 3rd Qtr 3rd Qtr 2nd Qtr 2007 2006 2007 $ 10 $15 $19 Operating income (millions) 12 3rd qtr. 2007 earnings included $4 million gain on sale of commercial land

Real Estate - 3rd Qtr. 2007 Sales High-Value Land Sold 770 acres Avg. price per acre - $7,400 Residential* Sold 299 lots Average Revenue Per Lot - $58,900 Average Gross Profit Per Lot - $23,100 Commercial* Sold 69 Acres Average Price Per Acre - $206,600 13 * Includes venture activity

Real Estate - Value Creation Entitlement Activity - Atlanta, GA Entitlement Activity - Last 12 Months 9 projects (3,093 acres) 3,866 residential lots 161 commercial acres 14

Real Estate Pipeline 3rd Qtr. 2007 (Acres) 15 Note: Estimated acres and lots may vary As previously announced, Temple-Inland will transfer 138,000 additional acres to Forestar prior to spin; increasing total acres in Forestar to approximately 373,000

Financial Services 3rd Qtr 3rd Qtr 2nd Qtr 2007 2006 2007 $ 37 $ 58 $ 48 Operating income (millions) 16 3rd qtr. 2007 earnings down compared with 3rd qtr. 2006 and 2nd qtr. 2007 principally due to higher loan loss provision, reflecting challenging homebuilding and current credit market conditions 3rd qtr. 2007 loan loss provision - $19 million

Transformation Plan Update 17 Sale of Strategic Timberland Anticipate closing 4th qtr. 2007 Special dividend of $10.25 Form 10 - Guaranty & Forestar Filed August 2007 On Target To Complete Transformation Plan by YE 2007

Investor Meetings 18 Temple-Inland Inc. Doyle Simons - Chairman & CEO Chris Mathis - Director of Investor Relations Forestar Real Estate Group Jim DeCosmo - President & CEO Chris Nines - Chief Financial Officer Guaranty Financial Group Ken Dubuque - President & CEO Ron Murff - Chief Financial Officer Rusty LaForge - Director of Investor Relations