Temple-Inland Inc. Reports First Quarter 2006 Results

Business Wire, April 26, 2006

AUSTIN, Texas -- Temple-Inland Inc. (NYSE:TIN) 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.     1st Qtr.     4th Qtr.
                              2006         2005         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.     1st Qtr.     4th Qtr.
                              2006         2005         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.

Real Estate

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