Temple-Inland Inc. Reports Fourth Quarter and Full Year 2005 Results

Business Wire, Feb 6, 2006

AUSTIN, Texas -- Temple-Inland Inc. (NYSE:TIN) today reported fourth quarter 2005 net income of $24 million, or $0.21 per diluted share, compared with fourth quarter 2004 net income of $53 million, or $0.46 per diluted share, and third quarter 2005 net income of $38 million, or $0.33 per diluted share.

As reflected in the table below, results for fourth quarter 2005 include after-tax special charges of $0.09 per share, principally related to the repositioning of the wholesale mortgage operation, converting facility closures, early retirement of debt securities, and previously discontinued operations.

Fourth Quarter      Third Quarter
                                  -------------------   -------------
                                    2005      2004          2005
                                  --------- ---------   -------------
Net income per dil. share as
 reported                            $0.21     $0.46           $0.33

Special items                         0.09     (0.04)           0.14
                                  --------- ---------   -------------
Net income per diluted share,
 excluding special items             $0.30     $0.42           $0.47

Average shares outstanding -
 diluted                             113.0     113.0           114.1

Shares and per share amounts reflect the effect of the two-for-one
stock split on April 1, 2005.

For the year, net income was $176 million, or $1.54 per diluted share, compared with 2004 net income of $160 million, or $1.42 per diluted share. The table below reflects 2005 and 2004 net income per diluted share, excluding special items.

Year
                                                   ------------------
                                                      2005      2004
                                                   --------   -------
Net income per dil. share as reported                $1.54     $1.42

Special items                                         0.36      0.22
                                                   --------   -------
Net income per diluted share,
 excluding special items                             $1.90     $1.64

Average shares outstanding - diluted                 114.5     112.4


Corrugated Packaging

Segment Operating      4th Qtr. 4th Qtr. 3rd Qtr. Full Year Full Year
 Income                  2005     2004     2005     2005      2004
---------------------- -------- -------- -------- --------- ---------
($ in Millions)          ($3)     $24      $15      $120       $96

Corrugated packaging reported full-year 2005 operating income of $120 million, compared with 2004 operating income of $96 million. This increase was driven primarily by business improvement factors of higher volumes and lower mill and converting costs, which offset negative market related factors, including increased costs for energy and freight.

Earnings in fourth quarter 2005 compared with fourth quarter 2004 were negatively affected by lower box prices, and higher energy, freight and wood costs. Compared with third quarter 2005, earnings were negatively affected by scheduled mill maintenance outages, impact of Hurricane Rita, lower volumes attributable to seasonality and three less shipping days, and higher costs, principally related to energy and freight.

Average prices for corrugated containers in fourth quarter 2005 were down 4% compared with fourth quarter 2004 and essentially flat compared with third quarter 2005. The average cost of recycled fiber in fourth quarter 2005 was down 19% compared with fourth quarter 2004 and down 18% compared with third quarter 2005.

On a volume per workday basis, shipments of corrugated containers were up 4.0% in fourth quarter 2005 compared with fourth quarter 2004, and up 3.7% compared with third quarter 2005. Shipments increased despite the closure of four box plants since fourth quarter 2004. Actual shipments were down 1% in fourth quarter 2005 compared with third quarter 2005 due to seasonality and three less shipping days. Shipments were up 2.5% on a volume per workday basis in 2005 compared with 2004.

Forest Products

Segment Operating      4th Qtr. 4th Qtr. 3rd Qtr. Full Year Full Year
 Income                  2005     2004     2005     2005      2004
---------------------- -------- -------- -------- --------- ---------
($ in Millions)          $62      $50      $64      $238      $215

Forest products reported full-year operating income of $238 million in 2005, a record level for the second consecutive year. In addition, fourth quarter 2005 operating income of $62 million was a record fourth quarter.

Despite the impact of higher energy, chemical and wood costs, operating income in fourth quarter 2005 compared favorably with fourth quarter 2004 principally due to increased high-value land sales, and a $6 million gain on sale of timberland to TEMCO (a real estate joint venture between Temple-Inland and Cousins Properties). Operating income in fourth quarter 2005 compared with third quarter 2005 was negatively affected by higher energy costs.