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 26, 2006

(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 April 26, 2006, the Company issued a press release announcing the Company’s earnings for the quarter ended April 1, 2006. A copy of the press release is furnished as exhibit 99.1 of this report.

Item 7.01. Regulation FD Disclosure.

On April 26, 2006, 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 April 1, 2006. 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 26, 2006, announcing the Company’s earnings for the quarter ended April 1, 2006.

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 26, 2006, discussing the Company’s earnings for the quarter ended April 1, 2006.

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 26, 2006 By:       /s/ Doyle R. Simons                         

Name:
Title: Doyle R. Simons
Executive Vice President

2

EXHIBIT INDEX

Exhibit	Description	Page
99.1	Press release issued by the Company on April 26, 2006, announcing the Company’s earnings for the quarter ended April 1, 2006.	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 26, 2006, discussing the Company’s earnings for the quarter ended April 1, 2006	12

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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 FIRST QUARTER 2006 RESULTS

AUSTIN, TEXAS, April 26, 2006--Temple-Inland Inc. today reported first quarter 2006 net income of $76 million, or $0.67 per diluted share, compared with first quarter 2005 net income of $45 million, or $0.39 per diluted share, and fourth quarter 2005 net income of $24 million, or $0.21 per diluted share.

As reflected in the table below, results for first quarter 2006 include after-tax special charges of $2 million, or $0.02 per share, principally related to severance associated with the elimination of the wholesale mortgage operation.

	First Quarter		Fourth Quarter
	2006	2005		2005
Net income per dil. share as reported	$0.67	$0.39		$0.21
Adjustment for special items	0.02	0.13		0.09
Net income per diluted share, Excluding special items	$0.69	$0.52		$0.30
Average shares outstanding – diluted	113.4	115.7		113.0

Shares and per share amounts for first quarter 2005 have been adjusted to reflect the two-for-one stock split on April 1, 2005.

Corrugated Packaging

Segment Operating Income 1st Qtr. 2006 1st Qtr. 2005 4th Qtr. 2005

($ in Millions) $40 $50 ($3)

Corrugated packaging earnings in first quarter 2006 compared with first quarter 2005 were negatively affected by lower corrugated container prices and higher energy and freight costs. Earnings improved in first quarter 2006 compared with fourth quarter 2005 due to higher corrugated container pricing, and lower energy and recycled fiber costs.

Despite the closure of four box plants since first quarter 2005, on a volume per workday basis, shipments of corrugated containers were essentially flat in first quarter 2006 compared with first quarter 2005. Actual shipments were up in first quarter 2006 compared with first quarter 2005.

Average prices for corrugated containers in first quarter 2006 were down 1% compared with first quarter 2005, but up 3% compared with fourth quarter 2005. The average cost of recycled fiber in first quarter 2006 was down 26% compared with first quarter 2005 and down 8% compared with fourth quarter 2005. Freight costs were up $11 million compared with first quarter 2005 and up $3 million compared with fourth quarter 2005. Energy costs were up $9 million in first quarter 2006 compared with first quarter 2005, but down $7 million compared with fourth quarter 2005.

Forest Products

Segment Operating Income 1st Qtr. 2006 1st Qtr. 2005 4th Qtr. 2005

($ in Millions) $82 $51 $52

Forest products reported record quarterly income of $82 million in first quarter 2006. Despite higher energy and freight costs, earnings improved in first quarter 2006 compared with first quarter 2005 due to improved pricing and volumes and the acquisition of our partner’s interest in the Standard Gypsum joint venture. Earnings improved in first quarter 2006 compared with fourth quarter 2005 due to improved pricing and volumes and the gypsum acquisition.

Average lumber prices in first quarter 2006 were down 2% compared with first quarter 2005 and essentially flat compared with fourth quarter 2005. Gypsum prices were up 30% compared with first quarter 2005 and up 8% compared with fourth quarter 2005. Particleboard prices were down 3% compared with first quarter 2005, but up 2% compared with fourth quarter 2005.

Shipments of lumber and gypsum were up in first quarter 2006 compared with first quarter 2005 and fourth quarter 2005. Shipments of particleboard were down in first quarter 2006 compared with first quarter 2005, but up compared with fourth quarter 2005.

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Real Estate

Segment Operating Income 1st Qtr. 2006 1st Qtr. 2005 4th Qtr. 2005

($ in Millions) $26 $9 $16

Real estate earnings in first quarter 2006 were $26 million, including a gain of $8 million on the sale of five acres of land for commercial use. During first quarter 2006, 923 acres of high-value land were sold at an average sales price of approximately $8,100 per acre, resulting in a gain of $7 million.

Residential development activity for all wholly and partially-owned projects during first quarter 2006 included the sale of 1,061 lots at an average price of approximately $48,000 per lot.

Financial Services

Segment Operating Income 1st Qtr. 2006 1st Qtr. 2005 4th Qtr. 2005

($ in Millions) $49 $42 $51

Financial services earnings improved in first quarter 2006 compared with first quarter 2005 due to higher net interest income driven by an increase in earning assets, principally mortgage-backed securities. The elimination of the wholesale mortgage operation was completed in first quarter 2006.

Comments

In announcing first quarter results, Kenneth M. Jastrow, II, chairman and chief executive officer of Temple-Inland Inc. said, “First quarter 2006 was a record first quarter for Temple-Inland. Our results reflect continued benefit from strategic initiatives and improved market conditions. During first quarter 2006 we repurchased 1.5 million shares. We have 2.0 million shares remaining under our current share repurchase authorization.

“Corrugated packaging benefited from business improvements related to lower mill and converting costs. Despite higher energy and freight costs, our mills and converting facilities operated at lower unit costs in first quarter 2006 compared with first quarter 2005.

“Results in our forest products operation reflect the acquisition of our partner’s interest in the Standard Gypsum joint venture during the quarter and strength in commercial and residential construction as well as repair and remodeling markets. Our forest products operations benefit from low cost and strategic locations near some of the fastest growing housing markets. Additionally, we continue to benefit from our focus on fiber integration.

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“In first quarter 2006, we began segmenting our fourth line of business, real estate, which will operate as Forestar Real Estate Group. Financial information for this segment, combined with the launch of our new real estate website located at www.forestargroup.com, will provide additional transparency into this business.

“In our real estate operation, we designated an additional 16,000 acres of our strategic timberland as high-value land, including nearly 11,000 acres located in our Texas forest. Our real estate operations now include over 239,000 acres.

“Financial services continues to benefit from our branch locations in strong deposit growth markets, nationwide loan generation capability, and low cost. Financial services is positioned for continued strong financial performance.”

The Company will host a conference call on April 26, 2006 at 9:00 am EDT to discuss results of the first quarter. 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 33915226.

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 and NYSE Arca Inc. Temple-Inland’s address on the World Wide Web is www.templeinland.com.

This press release contains “forward-looking statements” within the meaning of the federal securities laws. These forward-looking statements reflect management’s current views with respect to future events and are subject to risks and uncertainties. Factors and uncertainties that could cause our actual results to differ significantly from the results discussed in the forward-looking statements 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; the availability and price of raw materials we use; fluctuations in the cost of purchased energy; fluctuations in the costs we incur to transport the raw materials we use and the products we manufacture; assumptions related to pension and post-retirement costs; assumptions related to accounting for impaired assets; the collectibility of loans and accounts receivable and related provisions for losses; competitive actions by other companies; changes in laws or regulations and actions or restrictions of regulatory agencies; the accuracy of certain judgments and estimates concerning our integration of acquired operations; our ability to execute certain strategic and business improvement initiatives; and other factors, many of which are beyond our control. Our actual results, performance, or achievement could differ materially from those expressed in, or implied by, these forward-looking statements, and accordingly, we can give no assurances that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what impact they will have on our results of operations or financial condition. We expressly disclaim any obligation to publicly revise any forward-looking statements contained in this release to reflect the occurrence of events after the date of this release.

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Business Segments

	First Quarter
	2006			2005
	(Dollars in millions)
Revenues
Corrugated packaging	$	721		$	719
Forest products		333			251
Real estate		47			29
Financial services		283			222
Total revenues	$	1,384		$	1,221
Income
Corrugated packaging	$	40		$	50
Forest products		82			51
Real estate		26			9
Financial services		49			42
Total segment operating income		197			152
Expenses not allocated to segments
General and administrative		(23	)		(20	)
Share-based compensation (a)		(16	)		(6	)
Other operating income (expense)		(3	)		(24	)
Other non-operating income (expense)		—			1
Parent company interest		(33	)		(29	)
Income before taxes		122			74
Income (taxes) benefit		(46	)		(29	)
Income from continuing operations		76			45
Discontinued operations		—			—
Net income	$	76		$	45
Diluted earnings per share:
Income from continuing operations	$	0.67		$	0.39
Discontinued operations		—			—
Net income	$	0.67		$	0.39
Average diluted shares outstanding		113.4			115.7

We have reclassified prior period segment operating income to reflect the classification of the new business segment, real estate.

(a) The adoption of SFAS 123(R) for 2006 stock awards resulted in the acceleration of $7 million in pre-tax share-based compensation expense ($0.04 per after-tax) into first quarter 2006.

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TEMPLE-INLAND INC. AND SUBSIDIARIES

(UNAUDITED)

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

	First Quarter
	2006		2005
	(Dollars in millions)
Revenues
Corrugated Packaging
Corrugated packaging	$	698	$	691
Linerboard		23		28
Total	$	721	$	719
Forest Products (a)
Pine lumber	$	84	$	75
Gypsum wallboard (b)		112		31
Particleboard		49		54
Medium density fiberboard (b)		16		31
Fiberboard		21		20
Hunting, mineral and recreational leases		14		6
Fiber and other		37		34
Total Forest Products	$	333	$	251
Unit sales
Corrugated Packaging
Corrugated packaging, thousands of tons		869		857
Linerboard, thousands of tons		60		69
Total, thousands of tons		929		926
Forest Products
Pine lumber, mbf		218		193
Gypsum wallboard, msf (b)		563		207
Particleboard, msf		165		173
Medium density fiberboard, msf (b)		39		69
Fiberboard, msf		102		107

(a) We have reclassified 2005 revenues to reflect the new real estate business segment and the reclassification of certain revenues previously reflected as a reduction of cost of sales.

(b) Comparisons of revenue and unit sales of gypsum wallboard are affected by the January 2006 acquisition of our partner’s interest in Standard Gypsum L.P. Comparisons for MDF are affected by the sale of the Pembroke facility in second quarter 2005.

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

Cash Balance (at qtr. end)	$	11	$	13
Long-Term Debt (at qtr. end)	$	1,834	$	1,599
Capital Expenditures	$	32	$	56

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A summary of projects we own in the entitlement process ^(a) at first quarter-end 2006 follows:

Project	County	Project Acres (b)
California
Hidden Creek Estates	Chatsworth		700
Terrace at Hidden Hills	Calabasas		30
Georgia
Bay Springs	Carroll		440
Dry Pond	Cherokee		950
Fox Hall	Coweta		350
Friendship Road	Cherokee		110
Garland Mountain	Cherokee		350
Gold Creek	Dawson		1,090
Grove Park	Coweta		160
Happy Valley	Coweta		750
Jackson Park	Jackson		690
Legion Lake	Carroll		210
Lithia Springs	Haralson		260
Mill Creek	Coweta		770
Pickens School	Pickens		420
The Overlook at Waleska	Cherokee		510
Town West	Bartow		1,110
Triple C Road	Bartow		180
Wolf Creek	Carroll		11,810
Yellow Creek	Cherokee		1,060
Total			21,950

(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.

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A summary of activity within our entitled ^(a), developed and under development projects at first quarter-end 2006 follows:

						Residential Lots		Commercial Acres
Project	County		Interest Owned (b)			Lots Sold Since Inception	Lots Remaining	Acres Sold Since Inception		Acres Remaining
Projects we own
Colorado
Buffalo Highlands		Weld		100	%	—	645
Johnstown Farms		Weld		100	%	115	699
Stonebraker		Weld		100	%	—	600
Texas
Caruth Lakes		Rockwall		100	%	245	629
Cibolo Canyons		Bexar		100	%	200	1,549		—	145
Harbor Lakes		Hood		100	%	170	402		—	13
Hunter’s Crossing		Bastrop		100	%	168	441		19	95
Maxwell Creek		Collin		100	%	468	555
The Gables at North Hill		Collin		100	%	109	173		—	—
Oakcreek Estates		Comal		100	%	—	630
The Colony		Bastrop		100	%	305	1,187		22	50
The Preserve at Pecan Creek		Denton		100	%	—	819		—	9
Other Texas projects (8)		Various		100	%	2,419	250		104	64
Missouri, Tennessee and Utah
Other projects (4)		Various		100	%	788	416		—	—
						4,987	8,995		145	376
Projects in entities we consolidate
Texas
City Park		Harris		75	%	315	949		35	125
Lantana		Denton		55	%	53	1,215		—	—
Other Texas projects (4)		Various		Vario	us	210	256		2	63
						578	2,420		37	188
Total owned and consolidated						5,565	11,415		182	564
Projects in ventures that we account for using the equity method
Georgia
Seven Hills		Paulding		50	%	420	597		5	46
The Georgian		Paulding		38	%	268	1,118
Other Georgia projects (6)		Various		Vario	us	2,006	711		—	—
Texas
Bar C Ranch		Tarrant		50	%	65	1,116
Fannin Farms West		Tarrant		50	%	224	220		—	—
Lantana		Denton		Vario	us	1,505	1,427		1	79
Long Meadow Farms		Fort Bend		19	%	292	2,420		—	134
Southern Trails		Brazoria		40	%	121	938
Stonewall Estates		Bexar		25	%	—	386		—	—
Summer Creek		Fort Bend		50	%	—	525		—	37
Summer Creek Ranch		Tarrant		50	%	712	1,733		—	374
Summer Lakes		Fort Bend		50	%	294	850		42	9
Village Park		Collin		30	%	221	348		—	8
Other Texas projects (5)		Various		Vario	us	719	388		—	14
Florida
Other projects (3)		Various		Vario	us	431	414
Total in ventures						7,278	13,191		48	701
Combined total						12,843	24,606		230	1,265

(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.

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EX-99.2

Ex-99.2

First Quarter 2006 Results

April 26, 2006

2

This presentation contains "forward-looking statements" within the meaning of the federal
securities laws.  These forward-looking statements reflect management’s current views with
respect to future events and are subject to risks and uncertainties.  Factors and uncertainties
that could cause our actual results to differ significantly from the results discussed in the
forward-looking statements 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; the availability and price of raw materials we use; fluctuations in the cost of
purchased energy; fluctuations in the costs we incur to transport the raw materials we use
and the products we manufacture; assumptions related to pension and post-retirement costs;
assumptions related to accounting for impaired assets; the collectibility of loans and
accounts receivable and related provisions for losses; competitive actions by other
companies; changes in laws or regulations and actions or restrictions of regulatory agencies;
the accuracy of certain judgments and estimates concerning our integration of acquired
operations; our ability to execute certain strategic and business improvement initiatives; and
other factors, many of which are beyond our control.  Our actual results, performance, or
achievement could differ materially from those expressed in, or implied by, these forward-
looking statements, and accordingly, we can give no assurances that any of the events
anticipated by the forward-looking statements will transpire or occur, or if any of them do so,
what impact they will have on our results of operations or financial condition. We expressly
disclaim any obligation to publicly revise any forward-looking statements contained in this
release to reflect the occurrence of events after the date of this presentation.

First Quarter Results

Note: Per share results for 1st qtr. 2005 adjusted to reflect a two-for-one stock
split on April 1, 2005

TIN

3

Repurchased 1.5 million shares during 1st qtr. 2006

The adoption of SFAS 123(R) for 2006 stock awards resulted in
the acceleration of $7 million in pre-tax share-based compensation
expenses ($0.04 per share, after-tax) into first quarter 2006

$     76

$    45

$     24

Net Income

Diluted EPS

$  0.67

$ 0.39

$  0.21

1st Qtr

2005

4th Qtr

2005

1st Qtr

2006

First Quarter Results (cont’d)

Net income per dil. share$ 0.67 $ 0.39$0.21

Special items     0.02            0.13  0.09

Net income per dil. share $ 0.69        $ 0.52$0.30

excluding special items

1st Qtr                4th Qtr

  2006   2005             2005

4

Note: Per share results for 1st qtr. 2005 adjusted to reflect a two-for-one stock
split on April 1, 2005

1st qtr. 2006 after-tax special charges – $2 million, ($0.02) per share

- Elimination of wholesale mortgage operation

First Quarter Segment Results

Operating Income

(millions)

5

Note: We have reclassified prior period segment operating income to reflect the classification of the new
          business segment, real estate.

    Corrugated Packaging

    Forest Products

    Real Estate

    Financial Services

82

26

$  40

49

42

51

9

16

51

52

$ 50

$  (3)

$197

$152

$116

1st Qtr
  2006

1st Qtr
  2005

4th Qtr
  2005

Corrugated Packaging

Operating income

           (millions)

6

Price

-  1st qtr. 2006 avg. box price down $9/ton vs. 1st qtr. 2005 avg.  

-  1st qtr. 2006 avg. box price up $25/ton vs. 4th qtr. 2005 avg.  

-  April 2006 avg. box price up approx.  $18/ton vs. 1st qtr. 2006 avg.

        and up approx. $50/ton vs. low point in 4th qtr. 2005; prices are
     anticipated to continue to increase during 2nd qtr. 2006

-  Additionally, third box price increase reflecting the recent $50/ton

increase in linerboard will begin to be implemented in late 2nd qtr. 2006

$ 40

$    50

$ (3)

1st Qtr
  2006

1st Qtr
  2006

4th Qtr
  2005

Corrugated Packaging (Cont’d)

TIN Box Volumes

7

(3.2%)

(0.3%)

Volume Per

Workday Basis

3.2%

1st qtr. 2006 vs. 4th qtr.  2005

1.0%

1st qtr. 2006 vs. 1st qtr.  2005

Actual

Closed four box plants since 1st qtr. 2005 –
Antioch, Atlanta, Louisville and Newark

Corrugated Packaging (Cont’d)

Freight

Freight costs up $11 million vs. 1st qtr. 2005, and up
$3 million vs. 4th qtr. 2005

Energy

Energy costs up $9 million vs. 1st qtr. 2005, but
down $7 million vs. 4th qtr. 2005

Current natural gas prices down $1.25 / MMBtu
compared with 1st qtr. 2006 avg. price of
$9.00/MMBtu

8

Corrugated Packaging (Cont’d)

Recycled Fiber

-Recycled fiber costs down $30/ton vs. 1st qtr.
2005 and down $7/ton vs. 4th qtr. 2005

Scheduled annual outages, principally Orange, TX
mill during 2nd qtr. 2006

- $7 million negative impact vs. 1st qtr. 2006 from  
reduced production and higher costs

9

Forest Products

Operating income

Lumber

-  Average price down $7 vs. 1st qtr. 2005, and down

-  Volume up 13% vs. 1st qtr. 2005 and up 13% vs.

-  Current prices down $7 vs. 1st qtr. 2006 avg. price

10

Note: We have reclassified prior period segment operating income to reflect the classification of the new
          business segment, real estate.

1st Qtr
  2005

4th Qtr

  2005

$ 52

1st Qtr
2006

$ 51

$ 82

(millions)

$1 vs. 4th qtr. 2005

4th qtr. 2005

Forest Products (Cont’d)

Gypsum

-  Average price up $46  vs. 1st qtr. 2005 and up $15

-  In January 2006, we acquired our partner’s 50%         

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vs. 4th qtr. 2005

interest in Standard Gypsum LP

-  Adjusted for the acquisition of Standard Gypsum
   in 1st qtr. 2006, volume up 12% vs. 1st qtr. 2005,
   and up 13% vs. 4th qtr. 2005

Forest Products (Cont’d)

Particleboard

-  Average price down $10 vs. 1st qtr. 2005, but up $7 vs.
   vs. 4th qtr. 2005

-  Volume down 5% vs. 1st qtr. 2005, but up 8% vs. 4th
   qtr. 2005

12

Real Estate

13

New segment 1st qtr. 2006

Business includes:

High-Value Land

Lumbermen’s Investment Corporation

Ventures

Business will operate as Forestar Real Estate Group

Investor Meeting

- May 31 & June 1, 2006

- San Antonio, TX

Real Estate

 1st Qtr   1st Qtr4th Qtr

2006 2005            2005

$ 26        $ 9 $ 16

Operating income

(millions)

14

Real Estate - 1st Qtr. 2006 Sales

High-Value Land

$7 million in high-value land income 1st qtr. 2006

Avg. price per acre - $8,100

Acres sold - 923

Residential

Sold 1,061 lots

Average Revenue Per Lot - $48,000

Average Gross Profit Per Lot - $13,000

Commercial

Sold 43 Acres

Average Price Per Acre - $475,000

$8 million gain on sale of five acres of land for
commercial use; avg. price per acre - $2.8 million

15

Real Estate Pipeline
(Acres)

16

* High-Value Land includes 15,913 additional acres from our forest designated high-value during 1st qtr. 2006

- 10,807 acres from TX forest

-   5,106 acres from GA forest

In

Developed

Entitlement

& Under

Real Estate

Undeveloped

Process

Entitled

Development

Total

High-Value Land*

  Owned

197,224

  J/V's

6,594

Residential

  Owned

19,700

4,582

361

  J/V's

4,511

3,046

Commercial

  Owned

2,250

251

125

  J/V's

764

125

Total

203,818

21,950

10,108

3,657

239,533

Estimated Residential Lots

19,868

4,738

24,606

203,818

32,197

3,515

Financial Services

1st Qtr    1st Qtr4th Qtr

2006      2005            2005

$ 49        $ 42            $ 51

Operating income

(millions)

17

1st qtr. 2006 earnings up compared with 1st qtr. 2005
due to increased net interest income attributable to
growth in earning assets

Note: We have reclassified prior period segment operating income to reflect the classification of the new
          business segment, real estate.

Real Estate Web Site

Web Site Information

www.forestargroup.com

www.templeinland.com

    - Click on Visit Real Estate Group

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