EX-99.1 2 d64790exv99w1.htm EX-99.1 exv99w1
Exhibit 99.1
(TEMPLEINLAND LOGO)
NEWS
RELEASE
FOR IMMEDIATE RELEASE
CONTACT: Chris Mathis
               (512) 434-3766
TEMPLE-INLAND INC. REPORTS THIRD QUARTER 2008 RESULTS
     AUSTIN, TEXAS, October 28, 2008—Temple-Inland Inc. today reported third quarter 2008 net income of $3 million, or $0.03 per diluted share, compared with third quarter 2007 net income of $36 million, or $0.33 per diluted share, and second quarter 2008 net income of $8 million, or $0.07 per diluted share.
     Results for third quarter 2008 include special items of $0.06 per share, consisting of (i) an after tax benefit of $7 million, or $0.07 per share, resulting from an increase in the estimated 2008 effective tax rate on previously reported special items; and (ii) an after tax charge of $1 million, or $0.01 per share, primarily related to early repayment of Premier Boxboard Limited LLC debt.
                         
    Third Quarter     Second Quarter  
    2008     2007     2008  
Net income per share
   $ 0.03     $ 0.33     $ 0.07  
Adjustment for special items
     ($0.06 )     ($0.16 )   $ 0.00  
 
                  
Net income (loss) per share, excluding special items
     ($0.03 )   $ 0.17     $ 0.07  

 

 

Corrugated Packaging
                         
    Third Quarter   Second Quarter
    2008   2007   2008
Segment Operating Income ($ in Millions)
   $ 50     $ 70     $ 52  
     Corrugated packaging segment operating income declined in third quarter 2008 compared with third quarter 2007 as higher box prices were more than offset by lower box shipments, higher energy, freight, and chemical costs, and 38,000 tons of downtime and expenses associated with Hurricanes Gustav and Ike. The earnings impact from the hurricanes was approximately $13 million in third quarter 2008. Operating income declined in third quarter 2008 compared with second quarter 2008 as higher box prices were more than offset by lower box shipments and hurricane related expenses noted above.
Building Products
                         
    Third Quarter   Second Quarter
    2008   2007   2008
Segment Operating Income ($ in Millions)
     ($6 )     ($4 )   $ 1  
     Building products segment operating income declined in third quarter 2008 compared with third quarter 2007 as higher lumber and particleboard prices were more than offset by declining volumes for lumber, gypsum and particleboard, the impact of hurricane-related downtime and expenses, and severance charges. The impact from the hurricanes was approximately $1 million and the severance charges were approximately $1 million. Operating income declined in third quarter 2008 compared with second quarter 2008 principally due to lower volumes for all products, hurricane related downtime and expenses, and severance charges.
Comments
     Doyle R. Simons, chairman and chief executive officer of Temple-Inland Inc., said, “Third quarter results reflect the negative effect on our operations of Hurricanes Gustav and Ike and the impact of a weakening economy on the demand for our products, especially in the month of September.
     “In corrugated packaging, we successfully implemented a box price increase during the third quarter and will realize a full quarter’s benefit of the box price increase in the fourth quarter. We continue to make progress on our strategic initiative of lowering costs at our converting facilities through improved asset utilization. We expect to see the benefit from these efforts in fourth quarter 2008 and into 2009.

2

 

     “In building products, shipments for all of our products declined in the third quarter, reflecting continued difficult market conditions. We remain focused on matching our supply with demand and lowering costs. In the quarter, we further reduced our headcount and incurred $1 million of severance charges.
     “We acquired the remaining 50% interest in Premier Boxboard Limited from Caraustar Industries in the third quarter and are pleased with the integration of the mill into our system. We remain confident that we will quickly realize all planned synergies.”
     Temple-Inland will host a conference call on October 28, 2008 at 9:30 am EDT to discuss results of third quarter 2008. To access the conference call, listeners calling from the United States and Canada should dial 1-866-394-6665 at least 15 minutes prior to the start of the call. The passcode for the conference call is: 68785819. 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: 68785819.
     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 64 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 and contingency reserves; competitive actions by other companies; changes in laws or regulations; our ability to execute certain strategic and business improvement initiatives; the accuracy of certain judgments and estimates concerning the integration of acquired operations; and other factors, many of which are beyond our control.
This release includes non-GAAP financial measures. The required reconciliations to GAAP financial measures are included in this release.

3

 

TEMPLE-INLAND INC. AND SUBSIDIARIES
CONSOLIDATED EARNINGS AND SEGMENT RESULTS
(Preliminary and Unaudited)
                                 
    Third Quarter     First Nine Months  
    2008     2007     2008     2007  
    (In millions, except per share)  
Revenues
                                
Corrugated packaging
   $ 797     $ 748     $ 2,371     $ 2,288  
Building products
     179       195       540       642  
Timber and timberland (a)
     —       20       —       59  
 
                        
Total revenues
   $ 976     $ 963     $ 2,911     $ 2,989  
 
                        
 
                                
Income
                                
Corrugated packaging
   $ 50     $ 70     $ 157     $ 212  
Building products
     (6 )     (4 )     (26 )     23  
Timber and timberland (a)
     —       18       —       53  
 
                        
Total segment operating income
     44       84       131       288  
Items not included in segments
                                
General and administrative expense
     (17 )     (23 )     (59 )     (75 )
Share-based compensation
     (10 )     (2 )     (16 )     (34 )
Other operating income (expense)
     (1 )     (6 )     (16 )     (16 )
Other non-operating income (expense)
     (3 )     —       (1 )     1  
Net interest income (expense) on financial assets and nonrecourse financial liabilities of special purpose entities
     (1 )     —       (4 )     —  
Interest expense on debt
     (21 )     (29 )     (58 )     (86 )
 
                        
Income (loss) before taxes
     (9 )     24       (23 )     78  
Income tax (expense) benefit
     12       (13 )     21       (34 )
 
                        
Income (loss) from continuing operations
     3       11       (2 )     44  
Discontinued operations
     —       25       —       96  
 
                        
Net income (loss)
   $ 3     $ 36     $ (2 )   $ 140  
 
                        
 
                                
Average basic shares outstanding
     106.7       106.2       106.7       105.9  
Average diluted shares outstanding
     107.6       107.8       107.6       107.9  
 
                                
Earnings per share — Basic
                                
Income (loss) from continuing operations
   $ 0.03     $ 0.11     $ (0.02 )   $ 0.41  
Discontinued operations
     —       0.23       —       0.92  
 
                        
Net income (loss)
   $ 0.03     $ 0.34     $ (0.02 )   $ 1.33  
 
                        
 
                                
Earnings per share — Diluted (b)
                                
Income from continuing operations
   $ 0.03     $ 0.11     $ N/A     $ 0.41  
Discontinued operations
     —       0.22       N/A       0.89  
 
                        
Net income
   $ 0.03     $ 0.33     $ N/A     $ 1.30  
 
                        
 
                                
Dividends per share
   $ 0.10     $ 0.28     $ 0.30     $ 0.84  
 
                        
 
(a)   We no longer have a timber and timberland segment as a result of the fourth quarter 2007 sale of our timberland.
 
(b)   Earnings per diluted share not applicable for first nine months 2008 due to our year-to-date loss from continuing operations.

4

 

TEMPLE-INLAND INC. AND SUBSIDIARIES
SUMMARIZED CONSOLIDATED BALANCE SHEETS
(Preliminary and Unaudited)
                 
    Third     Year-  
    Quarter-End     End  
    2008     2007  
    (Dollars in millions)  
ASSETS
               
Current Assets
   $ 1,143     $ 1,277  
Property and Equipment
     1,680       1,632  
Financial Assets of Special Purpose Entities
     2,383       2,383  
Goodwill
     393       365  
Other Assets
     272       285  
 
            
TOTAL ASSETS
   $ 5,871     $ 5,942  
 
            
 
                
LIABILITIES
                
Current Liabilities
   $ 522     $ 890  
Long-Term Debt
     1,192       852  
Nonrecourse Financial Liabilities of Special Purpose Entities
     2,140       2,140  
Deferred Tax Liability
     749       762  
Liability for Pension Benefits
     73       71  
Liability for Postretirement Benefits
     118       123  
Other Long-Term Liabilities
     312       324  
 
            
TOTAL LIABILITIES
     5,106       5,162  
SHAREHOLDERS’ EQUITY
     765       780  
 
            
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
   $ 5,871     $ 5,942  
 
            

5

 

SUMMARIZED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Preliminary and Unaudited)
                                 
    Third     Second     First     First Nine  
    Quarter     Quarter     Quarter     Months  
    2008     2008     2008     2008  
    (Dollars in millions)  
CASH PROVIDED BY (USED FOR) OPERATIONS
                                
Operations (including payments related to our 2007 transformation plan of $11 million in third quarter and $39 million in first quarter)
   $ 66     $ 57 (a)   $ 19     $ 142  
Working capital (including payments related to our 2007 transformation plan of $20 million in third quarter, $1 million in second quarter and $276 million in first quarter)
     (20 )     (7 )     (358 )     (385 )
 
                        
 
     46       50       (339 )     (243 )
 
                        
CASH PROVIDED BY (USED FOR) INVESTING
                                
Capital expenditures
     (40 )     (42 )     (34 )     (116 )
Acquisition, net of cash acquired
     (57 )     —       —       (57 )
Other
     (2 )     (3 )     (1 )     (6 )
 
                        
 
     (99 )     (45 )     (35 )     (179 )
 
                        
CASH PROVIDED BY (USED FOR) FINANCING
                                
Cash dividends to shareholders
     (11 )     (10 )     (11 )     (32 )
Net change in debt
     68       15       204       287  
Other
     2       (4 )     (8 )     (10 )
 
                        
 
     59       1       185       245  
 
                        
Net increase (decrease) in cash and cash equivalents
     6       6       (189 )     (177 )
Cash and cash equivalents at beginning of period
     44       38       227       227  
 
                        
Cash and cash equivalents at end of period
   $ 50     $ 44     $ 38     $ 50  
 
                        
 
                                
SUPPLEMENTAL INFORMATION
                                
Depreciation and amortization
   $ 51     $ 50     $ 50     $ 151  
 
(a)   Includes a $15 million voluntary, discretionary contribution to our defined benefit plan.

6

 

TEMPLE-INLAND INC. AND SUBSIDIARIES
REVENUES AND UNIT SALES, EXCLUDING JOINT VENTURE OPERATIONS
(Preliminary and Unaudited)
                                 
    Third Quarter     First Nine Months  
    2008     2007     2008     2007  
    (Dollars in millions)  
Revenues
                                
Corrugated packaging
                                
Corrugated packaging
   $ 729     $ 717     $ 2,231     $ 2,178  
Paperboard (a) (b)
     68       31       140       110  
 
                        
Total corrugated packaging
   $ 797     $ 748     $ 2,371     $ 2,288  
 
                        
Building products
                                
Pine lumber
   $ 60     $ 64     $ 177     $ 190  
Particleboard
     46       42       138       143  
Gypsum wallboard
     33       52       101       189  
Medium density fiberboard
     18       15       56       49  
Fiberboard
     11       13       33       41  
Other
     11       9       35       30  
 
                        
Total building products
   $ 179     $ 195     $ 540     $ 642  
 
                        
Timber and Timberland (c)
                                
Fiber and other
     N/A     $ 20       N/A     $ 59  
 
                            
 
                                
Unit Sales
                                
Corrugated packaging
                                
Corrugated packaging, thousands of tons
     810       839       2,504       2,535  
Paperboard, thousands of tons (a) (b)
     150       67       304       243  
 
                        
Total, thousands of tons
     960       906       2,808       2,778  
 
                        
Building products
                                
Pine lumber, mbf
     189       215       593       640  
Particleboard, msf
     117       119       372       396  
Gypsum wallboard, msf
     255       368       813       1,164  
Medium density fiberboard, msf
     34       32       110       106  
Fiberboard, msf
     52       75       170       228  
 
(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. The effects on revenues and unit sales for the periods presented are not material.
 
(c)   We no longer have a timber and timberland segment as a result of the fourth quarter 2007 sale of our timberland.

7

 

TEMPLE-INLAND INC. AND SUBSIDIARIES
CALCULATION OF NON-GAAP FINANCIAL MEASURES
(Preliminary and Unaudited)
                         
    Third Quarter     Second Quarter  
    2008     2007     2008  
    (In millions, except per share)  
NET INCOME EXCLUDING SPECIAL ITEMS
                        
Net income in accordance with GAAP
   $ 3     $ 36     $ 8  
 
                  
Special items, after-tax:
                        
Transformation plan:
                        
Transformation costs
     —       4       —  
Discontinued operations
     —       (25 )     —  
 
                  
 
     —       (21 )     —  
 
                  
 
                        
Other:
                        
Charges related to early repayment of PBL debt
     1       —       —  
Litigation and other
     —       3       —  
Effect of increasing the estimated annual effective tax rate on previously reported special items
     (7 )     —       —  
 
                  
 
     (6 )     3       —  
 
                  
Total special items, after-tax
     (6 )     (18 )     —  
 
                  
Net income (loss), excluding special items, as defined
   $ (3 )   $ 18     $ 8  
 
                  
 
                        
Net income, per share, in accordance with GAAP
   $ 0.03     $ 0.33     $ 0.07  
 
                  
Special items, after-tax, per diluted share:
                        
Transformation plan:
                        
Transformation costs
     —       0.04       —  
Discontinued operations
     —       (0.22 )     —  
 
                  
 
     —       (0.18 )     —  
 
                  
 
                        
Other:
                        
Charges related to early repayment of PBL debt
     0.01       —       —  
Litigation and other
     —       0.02       —  
Effect of increasing the estimated annual effective tax rate on previously reported special items
     (0.07 )     —       —  
 
                  
 
     (0.06 )     0.02       —  
 
                  
Total special items, after-tax
     (0.06 )     (0.16 )     —  
 
                  
Net income (loss) per share, excluding special items, as defined
   $ (0.03 )   $ 0.17     $ 0.07  
 
                  
 
                        
Average basic shares outstanding
     106.7       106.2       106.6  
Average diluted shares outstanding
     107.6       107.8       107.4  

8