Temple-Inland Inc. Reports Fourth Quarter and Full Year 2004 Results.AUSTIN Austin. 1 City (1990 pop. 21,907), seat of Mower co., SE Minn., on the Cedar River, near the Iowa line; inc. 1868. The commercial and industrial center of a rich farm region, it is noted as home to the Hormel meatpacking company, whose Spam Town museum , Texas -- Temple-Inland Temple-Inland, Inc. NYSE: TIN is an American paper, building products and financial services company based in Austin, Texas. It has approximately 19,500 employees. Its paper group operates under the name Inland Paperboard and Packaging Group Inc. (NYSE NYSE See: New York Stock Exchange :TIN) today reported fourth quarter 2004 net income of $55 million, or $0.97 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared with a fourth quarter 2003 net loss of $39 million, or $0.71 per diluted share, and third quarter 2004 net income of $41 million, or $0.73 per diluted share. Results for fourth quarter 2004 include (i) an after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. charge of $8 million, or $0.14 per share, for asset write-downs, severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when , and costs related to the repositioning repositioning Laparoscopic surgery The changing of a Pt's position during a procedure to improve access or visualization of the operative field, which may be linked to complications, as it changes anatomic planes of operation. Cf Laparoscopic surgery. of mortgage origination Origination The process through which a mortgage lender creates a mortgage secured by some amount of the mortgagor's real property. Notes: Also known as loan origination, everyone must go through the origination process when securing a mortgage for a piece of real activities and the sale of the third-party mortgage servicing Mortgage servicing The collection of monthly payments and penalties, record keeping, payment of insurance and taxes, and possible settlement of default , involved with a mortgage loan. portfolio, (ii) an after-tax charge of $7 million, or $0.12 per share, primarily associated with converting facility closures and Project TIP consolidation and supply-chain initiatives, and (iii) a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. tax benefit of $20 million, or $0.34 per share, resulting from the conclusion of an IRS An abbreviation for the Internal Revenue Service, a federal agency charged with the responsibility of administering and enforcing internal revenue laws. examination of tax returns for the years 1997-2000 and resolution of several state tax returns. As reflected in the table below, net income per diluted share, excluding special items, for fourth quarter 2004 is $0.89 per share.
Fourth Quarter Third Quarter
----------------- --------------
2004 2003 2004
-------- -------- --------------
Net income per dil. share as reported $0.97 ($0.71) $0.73
Special items (0.08) 1.11 0.26
-------- -------- --------------
Net income per diluted share,
excluding special items $0.89 $0.40 $0.99
For the year, the Company reported net income of $165 million, or $2.92 per diluted share, compared with 2003 net income of $96 million, or $1.77 per diluted share. The table below reflects 2004 and 2003 net income per diluted share, excluding special items.
Year
---------------------
2004 2003
---------- ----------
Net income per dil. share as reported $2.92 $1.77
Special items 0.45 (1.14)
---------- ----------
Net income per diluted share, excluding special
items $3.37 $0.63
Corrugated cor·ru·gate v. cor·ru·gat·ed, cor·ru·gat·ing, cor·ru·gates v.tr. To shape into folds or parallel and alternating ridges and grooves. v.intr. Packaging The corrugated packaging operation reported income of $27 million in fourth quarter 2004 compared with a loss of $5 million in fourth quarter 2003 and income of $42 million in third quarter 2004. For full year 2004, the corrugated packaging operation reported income of $105 million compared with $11 million in 2003. Despite fewer shipping days, and higher energy and recycled fiber costs, earnings improved in fourth quarter 2004 compared with fourth quarter 2003 due to higher pricing, lower converting costs, and reduced outside purchases of containerboard con·tain·er·board n. A corrugated or solid cardboard used to make containers. . Compared with third quarter 2004, earnings were negatively affected by $15 million from major mill maintenance outages and incremental costs Costs which are additional costs to the Service appropriations that would not have been incurred absent support of the contingency operation. See also financial management. associated with the optimization optimization Field of applied mathematics whose principles and methods are used to solve quantitative problems in disciplines including physics, biology, engineering, and economics. of capital projects implemented during the outages, $8 million from lower volumes attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to a slower seasonal period and three less shipping days, and $12 million from higher costs, principally related to energy and health care. Average prices for corrugated containers in fourth quarter 2004 were up 8% compared with fourth quarter 2003 and up 3% compared with third quarter 2004. The average cost of recycled fiber in fourth quarter 2004 was up 23% compared with fourth quarter 2003 and down 4% compared with third quarter 2004. Despite the closure of five box plants in 2004, on a volume per workday basis, shipments of corrugated containers were up 5% in fourth quarter 2004 compared with fourth quarter 2003 and up 1% compared with third quarter 2004. As a result of three less shipping days in fourth quarter 2004, actual shipments were down 4% in fourth quarter 2004 compared with third quarter 2004. Forest Products The forest products operation reported record fourth quarter income of $50 million, compared with $35 million in fourth quarter 2003 and $68 million in third quarter 2004. Full year 2004 operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for forest products was a record $215 million, compared with $67 million in 2003. Operating income for fourth quarter 2004 included $7 million from high-value land sales compared with $4 million in fourth quarter 2003 and $3 million in third quarter 2004. The average sales price per acre of high-value land in fourth quarter 2004 was approximately $7,500 per acre. Average lumber lumber, term for timber that has been cut into boards for use as a building material. The major steps in producing lumber involve logging (the felling and preparation of timber for shipment to sawmills), sawing the logs into boards, grading the boards according to prices in fourth quarter 2004 were up 3% compared with fourth quarter 2003, but down 8% compared with third quarter 2004. Particleboard par·ti·cle·board or particle board n. A structural material made of wood fragments, such as chips or shavings, that are mechanically pressed into sheet form and bonded together with resin. prices were up 31% compared with fourth quarter 2003, but down 6% compared with third quarter 2004. Medium density fiberboard fi·ber·board n. A building material composed of wood chips or plant fibers bonded together and compressed into rigid sheets. Noun 1. (MDF (1) (Main Distribution Frame) A wiring rack that connects outside lines with internal lines. It is used to connect public or private lines coming into the building to internal networks. ) prices were up 20% compared with fourth quarter 2003, but down 2% compared with third quarter 2004. Gypsum gypsum (jĭp`səm), mineral composed of calcium sulfate (calcium, sulfur, and oxygen) with two molecules of water, CaSO4·2H2O. It is the most common sulfate mineral, occurring in many places in a variety of forms. prices were up 17% compared with fourth quarter 2003, but down 2% compared with third quarter 2004. Shipments for gypsum were up in fourth quarter 2004 compared with fourth quarter 2003, but down compared with third quarter 2004. Shipments for lumber, MDF, and particleboard were down in fourth quarter 2004 compared with fourth quarter 2003 and third quarter 2004. Financial Services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. The financial services operation reported record fourth quarter income of $58 million compared with $54 million in fourth quarter 2003 and $37 million in third quarter 2004. Financial services reported full year record income of $207 million for 2004 compared with $186 million in 2003. The improvement in earnings in fourth quarter 2004 compared with fourth quarter 2003 was the result of increased spreads, improved credit conditions, and continued focus on low cost operations. The improvement in fourth quarter 2004 compared with third quarter 2004 was principally because third quarter 2004 was negatively impacted $15 million from an increase in the mortgage servicing valuation allowance. The sale of the third-party mortgage servicing portfolio was completed in the fourth quarter. Comments In announcing fourth quarter and full year 2004 results, Kenneth M. Jastrow Jastrow may refer to one of the following:
adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. market conditions. "For 2004, our containerboard mill system achieved higher production, lower cost and improved efficiency. On a volume per workday basis, our box shipments were up 6% compared with 2003, with seven fewer box plants in our system. This decrease in box plants, coupled with our growth in shipments, has resulted in improved asset utilization utilization, n 1. the extent to which a given group uses a particular service in a specified period. Although usually expressed as the number of services used per year per 100 or per 1000 persons eligible for the service, utilization rates may be and lower costs. "Major mill maintenance outages in the fourth quarter and costs associated with improvement projects negatively impacted results in our corrugated packaging operation. The mill outages, however, are now complete and the upgrades made in the mills during these outages will improve mill reliability, lower costs, and reduce our exposure to natural gas, allowing the mill system to continue to improve performance going forward. "Forest products achieved record earnings for the year, reflecting benefits from strategic initiatives, low cost operations, and improved market conditions for our products. "Financial services achieved record earnings for the year. In the fourth quarter, we completed the repositioning of the mortgage company and the sale of the third-party mortgage servicing portfolio, eliminating approximately 1,500 positions. These actions have reduced costs and lowered risk, positioning financial services for continued strong financial performance." Commenting on strategic initiatives, Mr. Jastrow said, "We continue to focus on improving asset utilization in our box plant system. Over the past 18 months we have closed seven converting facilities and eliminated over 300 positions, resulting in current annual savings of $36 million. The benefits of these closures will continue to be realized during the next year, and annual savings of $60 million from converting facility closures are on schedule to be achieved by the end of 2005. "We are also pleased to announce that annual savings of $60 million from Project TIP consolidation and supply chain initiatives are in place, and we are on target for $75 million in total annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. savings by the end of 2005." The company will host a conference call on February February: see month. 7, 2004, at 9:00 a.m. ET to discuss results of the fourth quarter. The meeting may be accessed through Temple-Inland's Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the site or by conference call. To access through Temple-Inland's Internet site, www.templeinland.com, click on "Investor Relations Investor relations The process by which the corporation communicates with its investors. -- Conference Call." To access by conference call, listeners calling from North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. should dial 800-901-5217 at least 15 minutes prior to the start of the meeting. Those wishing to access the call from outside North America should dial 617-786-2964. The passcode is templeinland. Replays of the call will be available for two weeks following the completion of the live call and can be accessed at 888-286-8010 in North America and at 617-801-6888 outside North America. The passcode for the replay is 58882935. Temple-Inland Inc. is a major manufacturer of corrugated packaging and forest products, with a diversified financial The diversified financial services segment includes a range of consumer and commercially-oriented companies offering a wide variety of products and services, including various lending products (such as home equity loans and credit cards), insurance, and securities and investment services operation. The Company's 2.0 million acres of forestland for·est·land n. A section of land covered with forest or set aside for the cultivation of forests. are certified See certification. as managed in compliance with ISO (1) See ISO speed. (2) (International Organization for Standardization, Geneva, Switzerland, www.iso.ch) An organization that sets international standards, founded in 1946. The U.S. member body is ANSI. 14001 and in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with the Sustainable Forestry Initiative The Sustainable Forestry Initiative is a program to certify forests to insure they are being managed in a sustainable manner. SFI was started in 1994 by members of the American Forest and Paper Association. (R) (SFI SFI Sustainable Forestry Initiative (forest certification program of AF&PA) SFI Santa Fe Institute (scientific research in Santa Fe, New Mexico) SFI Science Foundation Ireland SFI Six Figure Income ) program of the American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Forest & Paper Association to ensure forest management is conducted in a scientifically sound and environmentally sensitive manner. Temple-Inland's common stock (TIN) is traded on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. and the Pacific Exchange. Temple-Inland's address on the World Wide Web is www.templeinland.com. This release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve risks and uncertainties. The actual results of Temple-Inland may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include general economic, market, or business conditions; the opportunities (or lack thereof) that may be presented to and pursued by Temple-Inland; the availability and price of raw materials; competitive actions by other companies; changes in laws or regulations; the accuracy of judgments and estimates concerning the integration of acquired operations and Temple-Inland's consolidation and supply chain initiatives; and other factors, many of which are beyond the control of Temple-Inland.
TEMPLE-INLAND INC. AND SUBSIDIARIES
(UNAUDITED)
(in millions, except per share amounts)
Fourth Quarter For the Year
-------------- -----------------
2004 2003 2004 2003
------ ------ ------ ------
Total revenues $1,184 $1,166 $4,750(b) $4,653
====== ====== ====== ======
Income (loss) from continuing
operations $ 54 $ (38) $ 162 $ 97
Effect of accounting change -- -- -- (1)
Discontinued operations 1 (1) 3 --
------ ------ ------ ------
Net income (loss) $ 55 $ (39) $ 165 $ 96
====== ====== ====== ======
Diluted earnings per share:
Income (loss) from continuing
operations $ 0.95 $(0.70) $ 2.87 $ 1.78
Effect of accounting change -- -- -- (0.01)
Discontinued operations 0.02 (0.01) 0.05 --
------ ------ ------ ------
Net income (loss) $ 0.97 $(0.71) $ 2.92 $ 1.77
====== ====== ====== ======
Average shares outstanding --
diluted 56.5 54.5 56.2 54.2
Business Segments
Revenues
--------
Corrugated packaging $ 687 $ 681 $2,736 $2,700
Forest products 232 218 971 801
Financial services 265 267 1,043(b) 1,152
------ ------ ------ ------
Total revenues $1,184 $1,166 $4,750 $4,653
====== ====== ====== ======
Income
------
Corrugated packaging $ 27 $ (5) $ 105 $ 11
Forest products 50 35 215 67
Financial services 58 54 207 186
------ ------ ------ ------
Segment operating income(a) 135 84 527 264
Unallocated expenses(a) (26) (21) (93) (80)
Other expense (27) (90) (76) (138)
Other non-operating income
(expense) 2 -- -- (8)
Parent company interest (28) (32) (125) (135)
------ ------ ------ ------
Income (loss) before taxes 56 (59) 233 (97)
Income (taxes) benefit (2) 21 (71) 194
------ ------ ------ ------
Income (loss) from continuing
operations 54 (38) 162 97
Effect of accounting change -- -- -- (1)
Discontinued operations 1 (1) 3 --
------ ------ ------ ------
Net income (loss) $ 55 $ (39) $ 165 $ 96
====== ====== ====== ======
(a) As previously announced, as a result of the consolidation of our
administrative functions and the adoption of a shared services
concept, beginning in first quarter 2004, we changed the way we
allocate cost to the business segments. The effect of this change
was to increase segment operating income and to increase
unallocated expenses by a like amount. Fourth quarter 2003, and
the year 2003 have been reclassified below to reflect this change.
Fourth Quarter 2003
As Originally As
Reported Reclassification Reclassified
------------- ---------------- ------------
Corrugated packaging $(11) $6 $(5)
Forest products 32 3 35
Financial services 54 -- 54
------------- ---------------- ------------
Segment operating income 75 9 84
Unallocated expenses (102) (9) (111)
------------- ---------------- ------------
Operating income $(27) $-- $(27)
============= ================ ============
For the Year 2003
As Originally As
Reported Reclassification Reclassified
------------- ---------------- ------------
Corrugated packaging $(14) $25 $11
Forest products 57 10 67
Financial services 186 -- 186
------------- ---------------- ------------
Segment operating income 229 35 264
Unallocated expenses (183) (35) (218)
------------- ---------------- ------------
Operating income $46 $-- $46
============= ================ ============
(b) Includes the effects of a reclassification of $6 million to
revenues from noninterest expense related to first quarter 2004.
The reclassification had no effect on operating income.
TEMPLE-INLAND INC. AND SUBSIDIARIES
(UNAUDITED)
Fourth Quarter For the Year
-------------- --------------
2004 2003 2004 2003
------ ------ ------ ------
Dollars in millions
Revenues(a)
Corrugated Packaging(b) $ 687 $ 681 $2,736 $2,700
Forest Products
Pine lumber $ 80 $ 74 $ 338 267
Particleboard 42 40 185 153
Medium density fiberboard 26 23 110 93
Gypsum wallboard 29 22 110 75
Fiberboard 15 20 77 71
Other 40 39 151 142
------ ------ ------ ------
Total Forest Products $ 232 $ 218 $ 971 801
====== ====== ====== ======
Unit sales(a)
Corrugated Packaging, thousands
of tons 810 825 3,366 3,206
Linerboard, thousands of tons 80 152 320 574
------ ------ ------ ------
890 977 3,686 3,780
Forest Products
Pine lumber, mbf 219 222 926 863
Particleboard, msf 137 154 600 598
Medium density fiberboard, msf 53 56 235 228
Gypsum wallboard, msf 195 171 766 643
Fiberboard, msf 76 122 407 434
(a) Revenues and unit sales do not include joint venture operations.
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