(Mark One)
|
|
þ
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Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the Quarterly Period
Ended _______ April 2, 2011 _______
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OR
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|
¨
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Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the Transition Period
From ____________ to ____________
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Delaware
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75-1903917
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer Identification Number)
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Large accelerated filer þ
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Accelerated filer ¨
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Non-accelerated filer ¨ (Do not check if a smaller reporting company)
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Smaller reporting company ¨
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Class
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Number of common shares outstanding
as of April 2, 2011
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|||
Common Stock (par value $1.00 per share)
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108,313,386 |
Page 1 of 35
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The Exhibit Index is page 29.
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Page
|
|
PART I. FINANCIAL INFORMATION
|
|
Item 1. Financial Statements
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|
Consolidated Balance Sheets
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3
|
Consolidated Statements of Income
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4
|
Consolidated Statements of Cash Flows
|
5
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Notes to the Consolidated Financial Statements
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6
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
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14
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
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25
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Item 4. Controls and Procedures
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25
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PART II. OTHER INFORMATION
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Item 1. Legal Proceedings
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26
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Item 1A. Risk Factors
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26
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
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26
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Item 3. Defaults Upon Senior Securities
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26
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Item 4. (Removed and Reserved)
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26
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Item 5. Other Information
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26
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Item 6. Exhibits
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27
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SIGNATURES
|
28
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Item 1.
|
Financial Statements
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(Unaudited)First Quarter-End 2011
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Year-End 2010
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|||||||
(In millions)
|
||||||||
ASSETS
|
||||||||
Current Assets
|
||||||||
Cash and cash equivalents
|
$ | 24 | $ | 28 | ||||
Trade receivables, net of allowance for doubtful accounts of $16 in 2011 and 2010
|
491 | 471 | ||||||
Inventories:
|
||||||||
Work in process and finished goods
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105 | 90 | ||||||
Raw materials
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227 | 253 | ||||||
Supplies and other
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148 | 142 | ||||||
Total inventories
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480 | 485 | ||||||
Deferred tax asset
|
119 | 108 | ||||||
Income taxes receivable
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3 | — | ||||||
Prepaid expenses and other
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40 | 44 | ||||||
Total current assets
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1,157 | 1,136 | ||||||
Property and Equipment
|
||||||||
Land and buildings
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686 | 684 | ||||||
Machinery and equipment
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3,662 | 3,640 | ||||||
Construction in progress
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102 | 74 | ||||||
Less allowances for depreciation
|
(2,807 | ) | (2,771 | ) | ||||
Total property and equipment
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1,643 | 1,627 | ||||||
Financial Assets of Special Purpose Entities
|
2,474 | 2,475 | ||||||
Goodwill
|
394 | 394 | ||||||
Other Assets
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274 | 277 | ||||||
TOTAL ASSETS
|
$ | 5,942 | $ | 5,909 | ||||
LIABILITIES
|
||||||||
Current Liabilities
|
||||||||
Accounts payable
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$ | 199 | $ | 219 | ||||
Accrued employee compensation and benefits
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100 | 109 | ||||||
Accrued interest
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12 | 17 | ||||||
Accrued property taxes
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10 | 13 | ||||||
Other accrued expenses
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138 | 134 | ||||||
Current portion of long-term debt
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— | — | ||||||
Current portion of pension and postretirement benefits
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16 | 16 | ||||||
Total current liabilities
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475 | 508 | ||||||
Long-Term Debt
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761 | 718 | ||||||
Nonrecourse Financial Liabilities of Special Purpose Entities
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2,140 | 2,140 | ||||||
Deferred Tax Liability
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719 | 700 | ||||||
Liability for Pension Benefits
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315 | 308 | ||||||
Liability for Postretirement Benefits
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110 | 110 | ||||||
Other Long-Term Liabilities
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384 | 404 | ||||||
TOTAL LIABILITIES
|
4,904 | 4,888 | ||||||
SHAREHOLDERS’ EQUITY
|
||||||||
Temple-Inland Inc. Shareholders’ Equity
|
||||||||
Preferred stock — par value $1 per share: authorized 25,000,000 shares; none issued
|
— | — | ||||||
Common stock — par value $1 per share: authorized 200,000,000 shares; issued 123,605,344 shares in 2011 and 2010, including shares held in the treasury
|
124 | 124 | ||||||
Additional paid-in capital
|
420 | 426 | ||||||
Accumulated other comprehensive loss
|
(250 | ) | (257 | ) | ||||
Retained earnings
|
1,222 | 1,220 | ||||||
Cost of shares held in the treasury: 15,291,958 shares in 2011 and 15,654,157 shares in 2010
|
(569 | ) | (584 | ) | ||||
Total Temple-Inland Inc. shareholders’ equity
|
947 | 929 | ||||||
Noncontrolling Interest of Special Purpose Entities
|
91 | 92 | ||||||
TOTAL SHAREHOLDERS’ EQUITY
|
1,038 | 1,021 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
$ | 5,942 | $ | 5,909 |
First Quarter
|
||||||||
2011
|
2010
|
|||||||
(In millions,
except per share)
|
||||||||
NET REVENUES
|
$ | 995 | $ | 905 | ||||
COSTS AND EXPENSES
|
||||||||
Cost of sales
|
(860 | ) | (825 | ) | ||||
Selling
|
(30 | ) | (27 | ) | ||||
General and administrative
|
(49 | ) | (39 | ) | ||||
Other operating income (expense)
|
(9 | ) | (1 | ) | ||||
(948 | ) | (892 | ) | |||||
OPERATING INCOME
|
47 | 13 | ||||||
Other non-operating income (expense)
|
(4 | ) | –– | |||||
Interest income on financial assets of special purpose entities
|
— | 1 | ||||||
Interest expense on nonrecourse financial liabilities of special purpose entities
|
(5 | ) | (4 | ) | ||||
Interest expense on debt
|
(12 | ) | (13 | ) | ||||
INCOME (LOSS) BEFORE TAXES
|
26 | (3 | ) | |||||
Income tax expense
|
(11 | ) | (2 | ) | ||||
NET INCOME (LOSS)
|
15 | (5 | ) | |||||
Net loss attributable to noncontrolling interest of special purpose entities
|
1 | 1 | ||||||
NET INCOME (LOSS) ATTRIBUTABLE TO TEMPLE-INLAND INC.
|
$ | 16 | $ | (4 | ) | |||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
|
||||||||
Basic
|
108.3 | 107.7 | ||||||
Diluted
|
110.3 | 109.2 | ||||||
EARNINGS PER SHARE
|
||||||||
Basic
|
$ | 0.15 | $ | (0.04 | ) | |||
Diluted
|
$ | 0.15 | $ | (0.04 | ) | |||
DIVIDENDS PER SHARE
|
$ | 0.13 | $ | 0.11 |
First Quarter
|
||||||||
2011
|
2010
|
|||||||
(In millions)
|
||||||||
CASH PROVIDED BY (USED FOR) OPERATIONS
|
||||||||
Net income (loss)
|
$
|
15
|
$
|
(5
|
)
|
|||
Adjustments:
|
||||||||
Depreciation and amortization
|
48
|
48
|
||||||
Asset impairment charges
|
1
|
8
|
||||||
Loss related to purchase and retirement of long-term debt
|
4
|
––
|
||||||
Non-cash share-based and long-term incentive compensation
|
19
|
6
|
||||||
Cash payment for share-based awards settled
|
(17
|
)
|
(13
|
)
|
||||
Non-cash pension and postretirement expense
|
17
|
17
|
||||||
Cash contribution to pension and postretirement plans
|
(3
|
)
|
(3
|
)
|
||||
Deferred income taxes
|
6
|
––
|
||||||
Other
|
3
|
(6
|
)
|
|||||
Changes in:
|
||||||||
Receivables
|
(19
|
)
|
(53
|
)
|
||||
Inventories
|
6
|
(17
|
)
|
|||||
Accounts payable and accrued expenses
|
(46
|
)
|
1
|
|||||
Prepaid expenses and other
|
1
|
18
|
||||||
35
|
1
|
|||||||
CASH PROVIDED BY (USED FOR) INVESTING
|
||||||||
Capital expenditures
|
(62
|
)
|
(33
|
)
|
||||
Other
|
(13
|
)
|
(8
|
)
|
||||
(75
|
)
|
(41
|
)
|
|||||
CASH PROVIDED BY (USED FOR) FINANCING
|
||||||||
Payments of debt
|
(54
|
)
|
––
|
|||||
Borrowings under accounts receivable securitization facility, net
|
47
|
16
|
||||||
Borrowings under revolving credit facility, net
|
46
|
38
|
||||||
Fees related to special purpose entities
|
—
|
(3
|
)
|
|||||
Changes in book overdrafts
|
5
|
(10
|
)
|
|||||
Cash dividends paid to shareholders
|
(14
|
)
|
(11
|
)
|
||||
Exercise of stock options
|
4
|
2
|
||||||
Tax benefit on share-based compensation
|
1
|
—
|
||||||
35
|
32
|
|||||||
Effect of exchange rate changes on cash and cash equivalents
|
1
|
1
|
||||||
Net decrease in cash and cash equivalents
|
(4
|
)
|
(7
|
)
|
||||
Cash and cash equivalents at beginning of period
|
28
|
36
|
||||||
Cash and cash equivalents at end of period
|
$
|
24
|
$
|
29
|
Defined Benefits
|
Postretirement
|
||||||||||||||||||
Qualified
|
Supplemental
|
Total
|
Benefits
|
||||||||||||||||
2011
|
2010
|
2011
|
2010
|
2011
|
2010
|
2011
|
2010
|
||||||||||||
(In millions)
|
|||||||||||||||||||
Service costs – benefits earned during the period
|
$
|
6
|
$
|
6
|
$
|
1
|
$
|
––
|
$
|
7
|
$
|
66
|
$
|
––
|
$
|
––
|
|||
Interest cost on projected benefit obligation
|
20
|
20
|
––
|
1
|
20
|
21
|
2
|
2
|
|||||||||||
Expected return on plan assets
|
(19
|
)
|
(19
|
)
|
––
|
––
|
(19
|
)
|
(19
|
)
|
––
|
––
|
|||||||
Amortization of prior service costs
|
1
|
1
|
1
|
1
|
2
|
2
|
––
|
––
|
|||||||||||
Amortization of actuarial net loss
|
5
|
5
|
––
|
––
|
5
|
5
|
––
|
––
|
|||||||||||
Defined benefit expense
|
$
|
13
|
$
|
13
|
$
|
2
|
$
|
2
|
$
|
15
|
$
|
15
|
$
|
2
|
$
|
2
|
First Quarter
|
||||||||
2011
|
2010
|
|||||||
(In millions)
|
||||||||
Cash-settled restricted or performance stock units
|
$ | 14 | $ | 4 | ||||
Stock-settled restricted stock units
|
1 | –– | ||||||
Stock options
|
3 | 1 | ||||||
Total share-based compensation expense
|
18 | 5 | ||||||
Fixed value cash awards
|
1 | 1 | ||||||
Total share-based and long-term incentive compensation expense
|
$ | 19 | $ | 6 |
First Quarter
|
||||||||
2011
|
2010
|
|||||||
(In millions)
|
||||||||
Cost of sales
|
$ | 2 | $ | 1 | ||||
Selling expense
|
1 | –– | ||||||
General and administrative expense
|
16 | 5 | ||||||
Total share-based and long-term incentive compensation expense
|
$ | 19 | $ | 6 |
Units
|
Weighted Average Grant Date Fair Value Per Share
|
Aggregate Current Value
|
||||||
(In thousands)
|
(In millions)
|
|||||||
Not vested beginning of year
|
2,627
|
$ 12
|
||||||
Granted
|
417
|
24
|
||||||
Vested and settled
|
(651)
|
19
|
||||||
Forfeited
|
(6)
|
17
|
||||||
Not vested at first quarter-end 2011
|
2,387
|
12
|
$
|
57
|
||||
Not vested units at first quarter-end 2011 subject to:
|
||||||||
Time vesting requirements
|
409
|
$
|
10
|
|||||
Performance requirements
|
1,978
|
47
|
||||||
2,387
|
$
|
57
|
Stock-Settled Units
|
Weighted Average
Grant Date Fair Value Per Share
|
Aggregate Current Value
|
|||||||
(In thousands)
|
(In millions)
|
||||||||
Not vested beginning of year
|
369 | $ | 20 | ||||||
Granted
|
241 | 24 | |||||||
Vested and settled
|
–– | –– | |||||||
Forfeited
|
–– | –– | |||||||
Not vested at first quarter-end 2011
|
610 | 21 | $15 |
Shares
|
Weighted Average Exercise Price Per Share
|
Weighted Average Remaining Contractual Term
|
Aggregate Intrinsic Value (Current value less exercise price)
|
|||||||||||||
(In thousands)
|
(In years)
|
(In millions)
|
||||||||||||||
Outstanding beginning of year
|
7,416
|
$ 15
|
||||||||||||||
Granted
|
431
|
24
|
||||||||||||||
Exercised
|
(445
|
)
|
14
|
|||||||||||||
Forfeited
|
(22
|
)
|
13
|
|||||||||||||
Outstanding at first quarter-end 2011
|
7,380
|
16
|
6
|
$
|
59
|
|||||||||||
Exercisable at first quarter-end 2011
|
5,272
|
16
|
6
|
$
|
40
|
First Quarter
|
||||||||
2011
|
2010
|
|||||||
Expected dividend yield
|
2.2 | % | 3.2 | % | ||||
Expected stock price volatility
|
65.0 | % | 66.6 | % | ||||
Risk-free interest rate
|
3.3 | % | 3.2 | % | ||||
Expected life of options (in years)
|
8 | 8 | ||||||
Weighted average estimated fair value of options granted
|
$ | 13.40 | $ | 10.23 |
First Quarter
|
||||||||
2011
|
2010
|
|||||||
(In millions)
|
||||||||
Costs and asset impairments, primarily related to box plant transformation
|
$ | (9 | ) | $ | (10 | ) | ||
Alternative fuel mixture tax credits
|
–– | 10 | ||||||
Gain (loss) on sale or retirement of operating property and equipment
|
–– | (1 | ) | |||||
Equity in earnings of joint ventures
|
–– | –– | ||||||
Other operating income (expense)
|
$ | (9 | ) | $ | (1 | ) |
Beginning of year
|
$ | –– | ||
Additions related to involuntary employee terminations
|
1 | |||
Balance at first quarter-end 2011
|
$ | 1 | ||
First Quarter
|
||||||
2011
|
2010
|
|||||
(In millions)
|
||||||
Earnings for basic and diluted earnings per share:
|
||||||
Net income (loss)
|
$
|
15
|
$
|
(5
|
)
|
|
Less: Distributed and undistributed amounts allocated to participating securities
|
––
|
––
|
||||
15
|
(5
|
)
|
||||
Less: Net loss attributable to noncontrolling interest of special purpose entities
|
1
|
1
|
||||
Net income (loss) available to common shareholders
|
$
|
16
|
$
|
(4
|
)
|
|
Weighted average shares outstanding:
|
||||||
Weighted average shares outstanding — basic
|
108.3
|
107.7
|
||||
Dilutive effect of stock options
|
2.0
|
1.5
|
||||
Weighted average shares outstanding — diluted
|
110.3
|
109.2
|
First Quarter
|
||||||||
2011
|
2010
|
|||||||
(Shares in thousands)
|
||||||||
Options held
|
421
|
502
|
||||||
Options Exercisable
|
421
|
486
|
||||||
Weighted average exercise price
|
$
|
19
|
$
|
18
|
||||
Weighted average remaining contractual term (in years)
|
4
|
5
|
First Quarter
|
||||||||||||||||||||||||||||||
2011
|
2010
|
|||||||||||||||||||||||||||||
Temple-Inland Inc.
Shareholders’
Equity
|
Noncontrolling Interest
|
Total Shareholders’
Equity
|
Temple-Inland Inc.
Shareholders’
Equity
|
Noncontrolling Interest
|
Total Shareholders’
Equity
|
|||||||||||||||||||||||||
(In millions)
|
||||||||||||||||||||||||||||||
Beginning of year
|
$
|
929
|
$
|
92
|
$
|
1,021
|
$
|
794
|
$
|
92
|
$
|
886
|
||||||||||||||||||
Comprehensive income, net of tax:
|
||||||||||||||||||||||||||||||
Net income (loss)
|
16
|
(1
|
)
|
15
|
(4
|
)
|
(1
|
)
|
(5
|
)
|
||||||||||||||||||||
Defined benefit plans
|
4
|
––
|
4
|
5
|
––
|
5
|
||||||||||||||||||||||||
Foreign currency translation adjustment
|
3
|
––
|
3
|
4
|
––
|
4
|
||||||||||||||||||||||||
Total Comprehensive Income
|
22
|
4
|
||||||||||||||||||||||||||||
Dividends paid on common stock — ($0.13 per share in 2011 and $0.11 per share in 2010)
|
(14
|
)
|
––
|
(14
|
)
|
(11
|
)
|
––
|
(11
|
)
|
||||||||||||||||||||
Share-based compensation, net of distributions
|
9
|
––
|
9
|
3
|
––
|
3
|
||||||||||||||||||||||||
Balance at first quarter-end
|
$
|
947
|
$
|
91
|
$
|
1,038
|
$
|
791
|
$
|
91
|
$
|
882
|
Corrugated Packaging
|
Building
Products
|
Items Not Included in Segments and Eliminations
|
Total
|
||||||
For First Quarter 2011 or at First Quarter-End 2011:
|
|||||||||
(In millions)
|
|||||||||
Revenues from external customers
|
$ 821
|
$ 174
|
$ ––
|
$ 995
|
|||||
Depreciation and amortization
|
37
|
10
|
1
|
48
|
|||||
Equity income from joint ventures
|
––
|
––
|
––
|
––
|
|||||
Income (loss) before taxes
|
98
|
(6
|
)
|
(66
|
)(a)
|
26
|
|||
Total assets
|
2,489
|
540
|
2,913
|
5,942
|
|||||
Investment in equity method investees and joint ventures
|
2
|
24
|
––
|
26
|
|||||
Goodwill
|
265
|
129
|
––
|
394
|
|||||
Capital expenditures
|
58
|
3
|
1
|
62
|
|||||
For First Quarter 2010 or at First Quarter-End 2010:
|
|||||||||
(In millions)
|
|||||||||
Revenues from external customers
|
$ 752
|
$ 153
|
$ ––
|
$ 905
|
|||||
Depreciation and amortization
|
35
|
11
|
2
|
48
|
|||||
Equity income from joint ventures
|
––
|
––
|
––
|
––
|
|||||
Income (loss) before taxes
|
46
|
(9
|
)
|
(40
|
)(a)
|
(3
|
)
|
||
Total assets
|
2,333
|
555
|
2,845
|
5,733
|
|||||
Investment in equity method investees and joint ventures
|
3
|
26
|
––
|
29
|
|||||
Goodwill
|
265
|
129
|
––
|
394
|
|||||
Capital expenditures
|
25
|
4
|
4
|
33
|
First Quarter
|
||||||||
2011
|
2010
|
|||||||
(In millions)
|
||||||||
General and administrative expense
|
$ | (17 | ) | $ | (18 | ) | ||
Share-based and long-term incentive compensation
|
(19 | ) | (6 | ) | ||||
Other operating income (expense)
|
(9 | ) | –– | |||||
Other non-operating income (expense)
|
(4 | ) | –– | |||||
Net interest income (expense) on financial assets and nonrecourse financial liabilities of special purpose entities
|
(5 | ) | (3 | ) | ||||
Interest expense
|
(12 | ) | (13 | ) | ||||
$ | (66 | ) | $ | (40 | ) | |||
|
At First Quarter-End 2011
|
At Year-End 2010
|
|
||||||||||||||
|
Carrying Value
|
Fair Value
|
Carrying Value
|
Fair Value
|
Valuation Technique
|
||||||||||||
(In millions)
|
|||||||||||||||||
Financial Liabilities
|
|||||||||||||||||
Fixed rate, long-term debt
|
$ | 490 | $ | 526 | $ | 540 | $ | 577 |
Level 2 - Market Approach
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
·
|
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, 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
|
·
|
other factors, many of which are beyond our control
|
First Quarter
|
||||||||
2011
|
2010
|
|||||||
(In millions,
except per share)
|
||||||||
Revenues
|
||||||||
Corrugated packaging
|
$
|
821
|
$
|
752
|
||||
Building products
|
174
|
153
|
||||||
Total revenues
|
$
|
995
|
$
|
905
|
||||
Segment operating income
|
||||||||
Corrugated packaging
|
$
|
98
|
$
|
46
|
||||
Building products
|
(6
|
)
|
(9
|
)
|
||||
Total segment operating income
|
92
|
37
|
||||||
Items not included in segments
|
||||||||
General and administrative expense
|
(17
|
)
|
(18
|
)
|
||||
Share-based and long-term incentive compensation
|
(19
|
)
|
(6
|
)
|
||||
Other operating income (expense)
|
(9
|
)
|
––
|
|||||
Other non-operating income (expense)
|
(4
|
)
|
––
|
|||||
Net interest income (expense) on financial assets and nonrecourse financial liabilities of special purpose entities
|
(5
|
)
|
(3
|
)
|
||||
Interest expense on debt
|
(12
|
)
|
(13
|
)
|
||||
Income (loss) before taxes
|
26
|
(3
|
)
|
|||||
Income tax expense
|
(11
|
)
|
(2
|
)
|
||||
Net income (loss)
|
15
|
(5
|
)
|
|||||
Net loss attributable to noncontrolling interest of special purpose entities
|
1
|
1
|
||||||
Net income (loss) attributable to Temple-Inland Inc.
|
$
|
16
|
$
|
(4
|
)
|
|||
Average basic shares outstanding
|
108.3
|
107.7
|
||||||
Average diluted shares outstanding
|
110.3
|
109.2
|
||||||
Earnings (loss) per basic share
|
$
|
0.15
|
$
|
(0.04
|
)
|
|||
Earnings (loss) per diluted share
|
$
|
0.15
|
$
|
(0.04
|
)
|
|||
ROI, annualized
|
8.2
|
%
|
2.0
|
%
|
·
|
In corrugated packaging, higher box prices more than offset higher input costs compared with first quarter 2010. In building products, higher lumber volumes more than offset lower lumber prices.
|
·
|
Share-based and long-term incentive compensation expense increased $13 million compared with first quarter 2010, primarily due to the impact of the higher market price of our common stock on our cash-settled awards.
|
·
|
Other operating income (expense) includes a $9 million charge associated with asset impairments, severance and other costs primarily related to Box Plant Transformation II.
|
·
|
We recognized a loss of $4 million related to the purchase and retirement of $50 million of our 7.875% Senior Notes due 2012.
|
·
|
We experienced lower prices and higher volumes, on a per week basis, for our corrugated packaging products compared with first quarter 2009. We also experienced higher prices and lower volumes for lumber and lower prices and higher volumes for gypsum wallboard.
|
·
|
A significant increase in input costs, principally recycled fiber, more than offset our continuing initiatives to lower costs, improve asset utilization, and increase operating efficiencies.
|
·
|
Other operating income (expense) included a $10 million charge associated with asset impairments, severance and other costs related to Box Plant Transformation II and a $10 million benefit related to alternative fuel mixture tax credits.
|
·
|
We recognized a one-time income tax expense of $3 million related to the impact of the Patient Protection and Affordable Care Act on the Medicare Part D retiree drug subsidy program.
|
First Quarter
|
||||||||
2011
|
2010
|
|||||||
(Dollars in millions)
|
||||||||
Revenues
|
$ | 821 | $ | 752 | ||||
Costs and expenses
|
(723 | ) | (706 | ) | ||||
Segment operating income
|
$ | 98 | $ | 46 | ||||
Segment ROI
|
18.3 | % | 9.1 | % |
First Quarter 2011 versus
First Quarter 2010
|
|||
Increase/(Decrease)
|
|||
Corrugated packaging
|
|||
Average prices
|
10
|
%
|
|
Shipments, average week
|
(2
|
)%
|
|
Industry shipments, average week (a)
|
––
|
%
|
|
Paperboard
|
|||
Average prices
|
24
|
%
|
|
Shipments, in thousand tons
|
3
|
(a)
|
Source: Fibre Box Association
|
First Quarter 2011 versus
First Quarter 2010
|
||||
Increase/(Decrease)
(In millions)
|
||||
Wood fiber
|
$
|
(4
|
)
|
|
Recycled fiber
|
4
|
|||
Energy, principally natural gas
|
(6
|
)
|
||
Freight
|
11
|
|||
Chemicals
|
6
|
|||
Depreciation
|
2
|
First Quarter
|
|||||
2011
|
2010
|
||||
Number of converting facilities (at quarter-end)
|
59
|
(a)
|
62
|
||
Corrugated packaging shipments, in thousand tons
|
840
|
846
|
|||
Paperboard production, in thousand tons
|
1,020
|
993
|
|||
Percent containerboard production used internally
|
93
|
%
|
93
|
%
|
|
Percent of total fiber requirements sourced from recycled fiber
|
41
|
%
|
44
|
%
|
(a)
|
Includes Carol Stream, Illinois and Northlake, Illinois converting facilities that are expected to close in second quarter 2011.
|
First Quarter
|
||||||||
2011
|
2010
|
|||||||
(Dollars in millions)
|
||||||||
Revenues
|
$ | 174 | $ | 153 | ||||
Costs and expenses
|
(180 | ) | (162 | ) | ||||
Segment operating income (loss)
|
$ | (6 | ) | $ | (9 | ) | ||
Segment ROI
|
(5.0 | )% | (7.2 | )% |
First Quarter 2011 versus
First Quarter 2010
|
|||
Increase/(Decrease)
|
|||
Lumber:
|
|||
Average prices
|
(10
|
)%
|
|
Shipments
|
31
|
%
|
|
Gypsum wallboard:
|
|||
Average prices
|
6
|
%
|
|
Shipments
|
7
|
%
|
|
Particleboard:
|
|||
Average prices
|
3
|
%
|
|
Shipments
|
11
|
%
|
|
MDF:
|
|||
Average prices
|
10
|
%
|
|
Shipments
|
––
|
%
|
First Quarter 2011 versus
First Quarter 2010
|
||||
Increase/(Decrease)
(In millions)
|
||||
Wood fiber
|
$ | 10 | ||
Energy, principally natural gas
|
–– | |||
Freight
|
6 | |||
Chemicals
|
4 |
First Quarter
|
|||||||
2011
|
2010
|
||||||
(In millions)
|
|||||||
Cash received from:
|
|||||||
Operations
|
$
|
93
|
$
|
52
|
|||
Working capital
|
(58
|
)
|
(51
|
)
|
|||
Cash received from operations
|
35
|
1
|
|||||
Borrowing, net
|
39
|
54
|
|||||
Exercise of options and related tax benefits
|
5
|
2
|
|||||
Total sources
|
79
|
57
|
|||||
Cash used to:
|
|||||||
Pay fees related to special purpose entities
|
––
|
(3
|
)
|
||||
Return to shareholders through dividends
|
(14
|
)
|
(11
|
)
|
|||
Reinvest in the business through:
|
|||||||
Capital expenditures
|
(62
|
)
|
(33
|
)
|
|||
Joint ventures and other
|
(8
|
)
|
(18
|
)
|
|||
Total uses
|
(84
|
)
|
(65
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
1
|
1
|
|||||
Change in cash and cash equivalents
|
$
|
(4
|
)
|
$
|
(7
|
)
|
Committed Credit Agreements
|
Accounts Receivable Securitization Facility
|
Total
|
|||||||||
(In millions)
|
|||||||||||
Committed
|
$
|
710
|
$
|
250
|
$
|
960
|
|||||
Less: Borrowings and letters of credit
|
(87
|
)
|
(200
|
)
|
(287
|
)
|
|||||
Unused borrowing capacity at first quarter-end 2011
|
$
|
623
|
$
|
50
|
$
|
673
|
Consolidated
|
Corrugated Packaging
|
Building Products
|
||||||||||||
First Quarter 2011
|
(In millions)
|
|||||||||||||
Return:
|
||||||||||||||
Segment operating income determined in accordance with GAAP
|
$
|
92
|
$
|
98
|
$
|
(6
|
)
|
|||||||
Items not included in segments:
|
||||||||||||||
General and administrative expense
|
(17
|
)
|
N/A
|
N/A
|
||||||||||
Share-based and long-term incentive compensation
|
(19
|
)
|
N/A
|
N/A
|
||||||||||
$
|
56
|
$
|
98
|
$
|
(6
|
)
|
||||||||
Investment:
|
||||||||||||||
Beginning of year total assets or segment assets determined in accordance with GAAP
|
$
|
5,909
|
$
|
2,475
|
$
|
532
|
||||||||
Adjustments:
|
||||||||||||||
Current liabilities (excluding current portion of long-term debt)
|
(508
|
)
|
(330
|
)
|
(53
|
)
|
||||||||
Financial assets of special purpose entities
|
(2,475
|
)
|
N/A
|
N/A
|
||||||||||
Municipal bonds related to capital leases included in other assets
|
(188
|
)
|
N/A
|
N/A
|
||||||||||
$
|
2,738
|
$
|
2,145
|
$
|
479
|
|||||||||
ROI, annualized
|
8.2
|
%
|
18.3
|
%
|
(5.0
|
)%
|
||||||||
First Quarter 2010
|
||||||||||||||
Return:
|
||||||||||||||
Segment operating income determined in accordance with GAAP
|
$
|
37
|
$
|
46
|
$
|
(9
|
)
|
|||||||
Items not included in segments:
|
||||||||||||||
General and administrative expense
|
(18
|
)
|
N/A
|
N/A
|
||||||||||
Share-based and long-term incentive compensation
|
(6
|
)
|
N/A
|
N/A
|
||||||||||
$
|
13
|
$
|
46
|
$
|
(9
|
)
|
||||||||
Investment:
|
||||||||||||||
Beginning of year total assets or segment assets determined in accordance with GAAP
|
$
|
5,709
|
$
|
2,295
|
$
|
545
|
||||||||
Adjustments:
|
||||||||||||||
Current liabilities (excluding current portion of long-term debt)
|
(471
|
)
|
(276
|
)
|
(44
|
)
|
||||||||
Financial assets of special purpose entities
|
(2,475
|
)
|
N/A
|
N/A
|
||||||||||
Municipal bonds related to capital leases included in other assets
|
(188
|
)
|
N/A
|
N/A
|
||||||||||
$
|
2,575
|
$
|
2,019
|
$
|
501
|
|||||||||
ROI, annualized
|
2.0
|
%
|
9.1
|
%
|
(7.2
|
)%
|
First Quarter
|
||||||||
2011
|
2010
|
|||||||
Revenues
|
(Dollars in millions)
|
|||||||
Corrugated Packaging
|
||||||||
Corrugated packaging
|
$ | 772 | $ | 711 | ||||
Paperboard (a)
|
49 | 41 | ||||||
$ | 821 | $ | 752 | |||||
Building Products
|
||||||||
Lumber
|
$ | 59 | $ | 50 | ||||
Gypsum wallboard
|
38 | 33 | ||||||
Particleboard
|
41 | 36 | ||||||
Medium density fiberboard
|
20 | 18 | ||||||
Fiberboard
|
6 | 7 | ||||||
Other
|
10 | 9 | ||||||
$ | 174 | $ | 153 | |||||
Unit sales
|
||||||||
Corrugated Packaging
|
||||||||
Corrugated packaging, thousands of tons
|
840 | 846 | ||||||
Paperboard, thousands of tons (a)
|
94 | 91 | ||||||
934 | 937 | |||||||
Building Products
|
||||||||
Lumber, million board feet
|
207 | 158 | ||||||
Gypsum wallboard, million square feet
|
328 | 306 | ||||||
Particleboard, million square feet
|
119 | 107 | ||||||
Medium density fiberboard, million square feet
|
35 | 35 | ||||||
Fiberboard, million square feet
|
31 | 34 |
_____________
|
|
(a)
|
Paperboard includes linerboard, corrugating medium, white-top linerboard, and light-weight gypsum facing paper.
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period
|
Total Number of Shares
Purchased
|
Average Price Paid per Share
|
Total Number of Shares Purchased
as Part of Publicly Announced Plans
or Programs
|
Maximum Number
of Shares That May
Yet be Purchased Under the Plans or Programs
|
|||||||||||||
Month 1 (1/1/2011 – 1/31/2011)
|
1,733 |
(b)
|
$ | 23.04 | –– | 6,650,000 | |||||||||||
Month 2 (2/1/2011 – 2/28/2011)
|
16,802 |
(b)
|
$ | 24.76 | –– | 6,650,000 | |||||||||||
Month 3 (3/1/2011 – 3/31/2011)
|
1,234 |
(b)
|
$ | 21.99 | –– | 6,650,000 | |||||||||||
Total
|
19,769 | $ | 24.44 | –– |
Item 3.
|
Defaults Upon Senior Securities
|
Item 4.
|
(Removed and Reserved)
|
Item 5.
|
Other Information
|
Item 6.
|
Exhibits
|
31.1
|
–
|
Certification of Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
–
|
Certification of Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1
|
–
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2
|
_
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101.1
|
–
|
The following materials from Temple-Inland's Quarterly Report on Form 10-Q for the quarter ended April 2, 2011, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Cash Flows, and (iv) Notes to Consolidated Financial Statements, tagged as blocks of text.
|
TEMPLE-INLAND INC.
(Registrant)
|
||
Dated: May 10, 2011
|
By:
|
/s/ Randall D. Levy
|
Name: Randall D. Levy
|
||
Title: Chief Financial Officer
|
||
By:
|
/s/ Troy L. Hester
|
|
Name: Troy L. Hester
|
||
Title: Corporate Controller and
Principal Accounting Officer
|
Exhibit No.
|
Description
|
Page No.
|
31.1
|
Certification of Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
30
|
31.2
|
Certification of Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
32
|
32.1
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
34
|
32.2
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
35
|