Temple-Inland Inc. Reports Second Quarter 2009 Results

Temple-Inland Inc. (NYSE:TIN) today reported second quarter 2009 net income of $66 million, or $0.61 per diluted share, compared with first quarter 2009 net income of $35 million, or $0.33 per diluted share, and second quarter 2008 net income of $8 million, or $0.07 per diluted share. Second quarter 2009 net income excluding special items was $26 million, or $0.24 per diluted share.

Doyle R. Simons, chairman and chief executive officer of Temple-Inland Inc., said, “We had another very good quarter. We delivered solid operating results, return on investment, and cash flow, despite continued tough economic conditions. In the quarter, we generated $172 million of cash from operations and reduced our debt by $116 million.

“In Corrugated Packaging, we had a record second quarter as both our mills and box plants ran well in the quarter and we continued to drive down cost. Our results reflect the continued benefit from our box plant transformation, the acquisition of PBL, our heavy orientation to the food and beverage market and our integrated system. We reduced our inventories further in the quarter and our quarter-ending inventories were at their lowest level since 2002.

“In Building Products, we did not experience the traditional seasonal pick-up in demand in the quarter. Even so, due to our low cost structure, declining input costs and our favorable mix of products, we generated $8 million of EBITDA in the quarter. We remain focused on matching our supply with our demand, lowering costs, generating cash and returning to profitability in this business.

“As we look forward, economic conditions, while still uncertain, appear to be stabilizing. The actions we have taken to improve asset utilization, drive down costs, match our production to our demand and profitably grow our business, position us to continue to deliver solid relative results.”

Corrugated Packaging

Corrugated Packaging operating income was $91 million, a record second quarter. Earnings improved in second quarter 2009 compared with second quarter 2008 as lower mill and converting costs and the benefits of the PBL acquisition more than offset lower box volumes and prices. Operating results declined compared with the all-time record first quarter 2009 earnings due primarily to lower box prices, partially offset by lower costs and higher box volumes.

Building Products

Building Products operating results declined in second quarter 2009 compared with second quarter 2008 as higher gypsum prices were more than offset by lower lumber prices and lower shipments for lumber, gypsum and panel products. Operating results declined in second quarter 2009 compared with first quarter 2009 principally due to lower gypsum prices and lower shipments for all products.

Special items for second quarter 2009 after tax were $40 million, or $0.37 per diluted share, including: (i) income of $47 million, or $0.43 per diluted share, for alternative fuel mixture tax credits; (ii) a charge of $11 million, or $0.10 per diluted share, related to the previously disclosed substitution in connection with the 2007 sale of the timberland; and (iii) a gain of $5 million, or $0.05 per diluted share, related to the purchase and early retirement of $100 million of our term debt.

Temple-Inland will host a conference call on July 23, 2009, at 9:30 am ET to discuss results of second quarter 2009. 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: 19111527. 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: 19111527.

The conference call may also be accessed through Temple-Inland’s Internet site, www.templeinland.com, by clicking on "Investor Relations – Investor Events."

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 63 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; current conditions in financial markets could adversely affect our ability to finance our operations; demand for new housing; accuracy of accounting assumptions related to impaired assets, pension and postretirement costs, contingency reserves and income taxes; competitive actions by other companies; changes in laws or regulations; our ability to execute certain strategic and business improvement initiatives; the accuracy of certain judgments and estimates concerning the integration of acquired operations; and other factors, many of which are beyond our control.

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