Temple-Inland Reports Fourth Quarter and Full Year 2010 Results
Feb. 8, 2011 - Temple-Inland Inc. today reported net income in 2010 of $168 million, or $1.52 per diluted share, compared with net income of $206 million, or $1.89 per diluted share, in 2009. Excluding special items, net income in 2010 was $100 million, or $0.90 per diluted share, compared with $78 million, or $0.70 per diluted share, in 2009.
Doyle R. Simons, chairman and chief executive officer of Temple-Inland Inc., said, “We had an outstanding year as we delivered strong operating results and cash flow from operations in 2010. Our consolidated return on investment was 8.2%, up from 7.0% in 2009.
“In Corrugated Packaging, we posted operating income of $333 million and generated a return on investment of 16.5%, matching our record 16.5% ROI in 2009. 2010 is the fifth consecutive year that we have earned returns in excess of our cost of capital in this business. We completed Box Plant Transformation I at the first of the year and announced Box Plant Transformation II, which will further drive down the cost structure of our box plant system by an additional $100 million by 2013. We realized $20 million of cost savings in 2010 from Box Plant Transformation I and II.
“In Building Products, despite housing markets that remained at depressed levels, we generated $22 million in EBITDA in 2010, an increase of $5 million compared with 2009. We continue to benefit from our low cost facilities, favorable geographic footprint and mix of products.
“As we enter 2011, the economy appears to be re-accelerating, corrugated packaging fundamentals are solid, Box Plant Transformation II is on schedule and we are poised to capitalize on a recovery in housing. We are positioned to continue to generate returns well above our cost of capital in Corrugated Packaging. In Building Products, we remain focused on generating cash and returning to profitability.
“Last week, we increased our dividend 18% to an annual rate of $0.52 per share, reflecting confidence in our ability to continue to generate cash flow and our commitment to return cash to shareholders. This increase follows a 10% increase in our dividend in 2010.”
Special items for 2010 after tax were $68 million, or $0.62 per diluted share, including: (i) a tax benefit of $83 million, or $0.75 per diluted share, related to the cellulosic biofuel producer credit; (ii) a charge of $18 million, or $0.16 per diluted share, primarily related to box plant transformation; and (iii) a net benefit of $3 million, or $0.03 per diluted share, principally related to alternative fuel mixture tax credits.
Fourth quarter 2010 net income was $27 million, or $0.24 per diluted share, compared with fourth quarter 2009 net income of $38 million, or $0.34 per diluted share, and third quarter 2010 net income of $125 million, or $1.13 per diluted share. Excluding special items, net income in fourth quarter 2010 was $35 million, or $0.31 per diluted share compared with a net loss of $0.07 per diluted share in fourth quarter 2009 and net income of $0.41 per diluted share in third quarter 2010. Fourth quarter 2010 net income and net income excluding special items include an income tax benefit of $0.05 per diluted share primarily related to the expected utilization of state net operating loss carry-forwards previously reserved.
Special items for fourth quarter 2010 after tax were $8 million, or $0.07 per diluted share, including: (i) a charge of $7 million, or $0.06 per diluted share, primarily related to box plant transformation; and (ii) a charge of $1 million, or $0.01 per diluted share, related to the purchase and retirement of debt.
Corrugated Packaging operating results were $333 million in 2010. Operating income declined modestly compared with 2009 as higher prices and volumes, the benefit of Box Plant Transformation and lower mill downtime were more than offset by higher input costs. Return on investment was a record 16.5% for the second consecutive year.
Operating income of $103 million in fourth quarter 2010 was a fourth quarter record. Return on investment in the quarter was 20.4%. Operating income declined in fourth quarter 2010 compared with third quarter 2010 as lower box and containerboard volumes, higher input costs, seasonally higher converting costs, and higher mill maintenance downtime more than offset higher prices.
Building Products operating results improved in 2010 compared with 2009 primarily due to higher lumber prices and improved volumes for all products that were partially offset by higher input costs and lower gypsum pricing. Operating results declined in fourth quarter 2010 compared with third quarter 2010 due to lower gypsum prices and lower gypsum and lumber volumes.
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 59 converting facilities.
SOURCE: Temple-Inland Inc.