SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
(Mark One)
/X/ Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the Quarterly Period
Ended October 1, 1994
OR
/ / Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the Transition Period
From ___________________________ to ____________________________
Commission File Number 1-8634
Temple-Inland Inc.
(Exact name of registrant as specified in its charter)
Delaware 75-1903917
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
303 South Temple Drive, Diboll, Texas 75941
(Address of principal executive offices) (Zip Code)
(409) 829-2211
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report.)
Indicate whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to the filing
requirements for the past 90 days.
Yes X No_____
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date:
Number of common shares outstanding
Class as of October 1, 1994
Common Stock (par
value $1.00 per share) 55,854,911
The Exhibit Index appears on page 19 of this report.
<PAGE>2
PART I. FINANCIAL INFORMATION
FINANCIAL STATEMENTS
Summarized Statements of Income
Parent Company (Temple-Inland Inc.)
Unaudited
Third Quarter First Nine Months
1994 1993 1994 1993
(in millions)
Revenues
Net sales $ 601.2 $ 518.6 $ 1,716.5 $ 1,599.0
Financial services earnings 12.8 16.5 44.2 52.0
614.0 535.1 1,760.7 1,651.0
Costs and Expenses
Cost of sales 497.3 453.1 1,443.0 1,369.3
Selling and administrative 52.0 49.4 149.3 145.6
549.3 502.5 1,592.3 1,514.9
Operating Income 64.7 32.6 168.4 136.1
Interest - net (17.1) (16.7) (49.3) (51.9)
Other 1.0 .3 2.3 1.9
Income Before Taxes and
Accounting Changes 48.6 16.2 121.4 86.1
Taxes on income 15.5 4.8 38.8 25.8
Income Before Accounting
Changes 33.1 11.4 82.6 60.3
Cumulative effect of
accounting changes - - - 50.0
Net Income $ 33.1 $ 11.4 $ 82.6 $ 110.3
See notes to consolidated financial statements.
<PAGE>3
Summarized Balance Sheets
Parent Company (Temple-Inland Inc.)
Unaudited
October 1, January 1,
1994 1994
(in millions)
ASSETS
Current Assets
Cash and cash equivalents $ 10.7 $ 8.6
Receivables, less allowances of
$8.1 million in 1994 and $7.4
million in 1993 265.3 198.5
Inventories:
Work in process and finished goods 79.5 77.7
Raw materials 176.1 180.4
255.6 258.1
Prepaid expenses 21.3 12.5
Total current assets 552.9 477.7
Investment in Financial Services 577.5 487.6
Property and Equipment
Buildings 396.6 376.3
Machinery and equipment 2,827.2 2,723.3
Less allowances for depreciation and
amortization (1,562.6) (1,437.0)
1,661.2 1,662.6
Construction in progress 444.9 238.7
2,106.1 1,901.3
Timber and timberlands--less depletion 429.7 411.0
Land 33.9 33.8
Total property and equipment 2,569.7 2,346.1
Other Assets 130.6 92.4
Total Assets $ 3,830.7 $ 3,403.8
See notes to consolidated financial statements.
<PAGE>4
Summarized Balance Sheets - Continued
Parent Company (Temple-Inland Inc.)
Unaudited
October 1, January 1,
1994 1994
(in millions)
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued expenses $ 311.7 $ 244.8
Federal income taxes payable - 43.9
Employee compensation and benefits 22.0 19.5
Short-term borrowings 3.6 3.3
Current portion of long-term debt 34.4 24.1
Total current liabilities 371.7 335.6
Long-Term Debt 1,342.2 1,044.8
Deferred Income Taxes 212.1 175.9
Postretirement Benefits 124.9 122.0
Other Liabilities 26.7 25.3
Shareholders' Equity 1,753.1 1,700.2
Total Liabilities and Shareholders' Equity $ 3,830.7 $ 3,403.8
See notes to consolidated financial statements.
<PAGE>5
Summarized Statements of Cash Flows
Parent Company (Temple-Inland Inc.)
Unaudited
First Nine Months
1994 1993
(in millions)
Cash Provided by (Used for) Operations
Net income $ 82.6 $ 110.3
Adjustments to reconcile net income to net cash:
Cumulative effect of accounting changes - (50.0)
Depreciation and depletion 148.6 142.7
Deferred taxes 15.2 (.9)
Unremitted earnings of affiliates (32.9) (36.3)
Receivables (62.2) (10.9)
Inventories 11.8 3.6
Prepaid expenses (8.4) (.2)
Accounts payable and accrued expenses (24.8) 21.7
Other (5.6) (6.9)
124.3 173.1
Cash Provided by (Used for) Investments
Capital expenditures (336.3) (254.0)
Sale of property and equipment, net 3.9 4.5
Manufacturing acquisitions, net (61.5) -
Investment in Financial Services - 34.0
(393.9) (215.5)
Cash Provided by (Used for) Financing
Change in debt 301.9 75.8
Construction funds held by trustee - 7.3
Issuance of common stock for stock plans 12.1 3.8
Purchase of stock for treasury (.5) (1.5)
Cash dividends paid to shareholders (41.8) (41.5)
271.7 43.9
Net increase in cash and cash equivalents 2.1 1.5
Cash and cash equivalents at beginning
of period 8.6 7.1
Cash and cash equivalents at end of period $ 10.7 $ 8.6
See notes to consolidated financial statements.
<PAGE>6
Summarized Statements of Income
Temple-Inland Financial Services
Unaudited
Third Quarter First Nine Months
1994 1993 1994 1993
(in millions)
Interest income
Mortgage-backed and investment
securities $ 47.4 $ 58.0 $ 143.4 $ 188.8
Loans receivable and mortgage loans
held for sale 61.6 43.2 172.3 120.7
Assisted assets 7.0 5.3 23.0 17.8
Other earning assets 3.9 16.4 24.7 34.9
Total interest income 119.9 122.9 363.4 362.2
Interest expense
Deposits 65.4 57.5 184.8 177.4
Borrowed funds 16.7 28.2 60.0 71.8
Total interest expense 82.1 85.7 244.8 249.2
Net interest income 37.8 37.2 118.6 113.0
Provision for loan losses 2.7 1.7 4.1 3.3
Net interest income after provision for
loan losses 35.1 35.5 114.5 109.7
Noninterest income
Loan servicing fees 9.2 7.5 24.6 21.2
Loan origination and marketing 2.7 13.1 15.6 32.3
Other 22.0 19.0 66.3 51.8
33.9 39.6 106.5 105.3
Noninterest expense
Compensation and benefits 24.8 29.3 83.5 80.5
Other 31.4 29.3 93.3 82.5
Total noninterest expense 56.2 58.6 176.8 163.0
Income before taxes and accounting
changes 12.8 16.5 44.2 52.0
Taxes on income 2.0 6.4 11.4 15.7
Income before accounting changes 10.8 10.1 32.8 36.3
Cumulative effect of accounting
changes - - - 52.3
Net income $ 10.8 $ 10.1 $ 32.8 $ 88.6
See notes to consolidated financial statements.
<PAGE>7
Summarized Balance Sheets
Temple-Inland Financial Services
Unaudited
September 30, December 31,
1994 1993
(in millions)
ASSETS
Cash and cash equivalents $ 454.8 $ 156.3
Mortgage loans held for sale 162.3 630.1
Mortgage-backed and investment
securities 3,989.6 4,407.3
Loans receivable 3,334.7 2,755.3
Covered assets 473.8 664.3
Other assets 482.8 520.0
TOTAL ASSETS $ 8,898.0 $ 9,133.3
LIABILITIES
Deposits $ 6,660.6 $ 6,362.3
Securities sold under repurchase
agreements 1,111.9 1,570.7
Federal Home Loan Bank advances 154.4 154.1
Other borrowings 55.2 76.2
Other liabilities 350.3 458.3
TOTAL LIABILITIES 8,332.4 8,621.6
SHAREHOLDER'S EQUITY 565.6 511.7
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $ 8,898.0 $ 9,133.3
See notes to consolidated financial statements.
<PAGE>8
Summarized Statements of Cash Flows
Temple-Inland Financial Services
Unaudited
First Nine Months
1994 1993
(in millions)
Cash Provided by (Used for) Operations
Net income $ 32.8 $ 88.6
Adjustments to reconcile net income
to net cash:
Cumulative effect of accounting changes - (52.3)
Amortization, accretion and depreciation 15.8 16.3
Receivable from FSLIC 31.8 1.8
Mortgage loans held for sale 467.8 (112.1)
Other (156.5) 197.2
391.7 139.5
Cash Provided by (Used for) Investments
Maturities of mortgage-backed and investment
securities 643.8 808.8
Purchase of mortgage-backed and investment
securities (235.6) (293.5)
Loans originated net of principal collected (481.6) (477.9)
Proceeds from sales of loans and mortgage-
backed securities .5 12.1
Reduction in covered assets 188.8 53.2
Savings bank acquisition 204.5 -
Other 3.9 (12.5)
324.3 90.2
Cash Provided by (Used for) Financing
Net decrease in deposits (31.5) (181.7)
Net increase (decrease) in securities sold
under repurchase agreements and short-term
borrowings (458.8) 807.8
Additions to long-term debt - 48.0
Payments of debt (21.1) (83.1)
Contribution from (dividend paid to)
Parent Company - (34.0)
Net increase in advances from borrowers for
taxes and insurance 93.9 62.6
(417.5) 619.6
Net increase in cash and cash
equivalents 298.5 849.3
Cash and cash equivalents at
beginning of period 156.3 117.6
Cash and cash equivalents at
end of period $ 454.8 $ 966.9
See notes to consolidated financial statements.
<PAGE>9
Consolidated Statements of Income
Temple-Inland Inc. and Subsidiaries
Unaudited
Third Quarter First Nine Months
1994 1993 1994 1993
(In millions, except for per share data)
Revenues
Manufacturing net sales $ 601.2 $ 518.6 $ 1,716.5 $ 1,599.0
Financial Services revenues 153.8 162.4 469.9 467.4
755.0 681.0 2,186.4 2,066.4
Costs and Expenses
Manufacturing costs and expenses 549.3 502.5 1,592.3 1,514.9
Financial Services expenses 141.0 145.9 425.7 415.4
690.3 648.4 2,018.0 1,930.3
Operating Income 64.7 32.6 168.4 136.1
Parent Company Interest - net (17.1) (16.7) (49.3) (51.9)
Other 1.0 .3 2.3 1.9
Income Before Taxes and Accounting
Changes 48.6 16.2 121.4 86.1
Taxes on Income 15.5 4.8 38.8 25.8
Income Before Accounting Changes 33.1 11.4 82.6 60.3
Cumulative effect of accounting
changes - - - 50.0
Net Income $ 33.1 $ 11.4 $ 82.6 $ 110.3
Earnings per share:
Before accounting changes $ .59 $ .21 $1.48 $1.09
Effect of accounting changes - - - .90
Earnings per share $ .59 $ .21 $1.48 $1.99
Dividends Paid Per Share of
Common Stock $ .25 $ .25 $ .75 $ .75
Weighted Average Shares
Outstanding 55.9 55.5 55.9 55.5
See notes to consolidated financial statements.
<PAGE>10
Consolidated Balance Sheets
Temple-Inland Inc. and Subsidiaries
October 1, 1994
Unaudited
Parent Financial
Company Services Consolidated
(in millions)
ASSETS
Cash and cash equivalents $ 10.7 $ 454.8 $ 465.5
Investments - 3,989.6 3,989.6
Loans receivable - 3,334.7 3,334.7
Covered assets - 473.8 473.8
Receivable from FSLIC - 2.4 2.4
Trade and other receivables 265.3 - 265.3
Inventories 255.6 162.3 417.9
Property & equipment 2,569.7 45.9 2,615.6
Other assets 151.9 434.5 517.1
Investment in affiliates 577.5 - -
TOTAL ASSETS $ 3,830.7 $ 8,898.0 $12,081.9
LIABILITIES
Deposits $ - $ 6,660.6 $ 6,660.6
Securities sold under repurchase
agreements and Federal Home
Loan Bank advances - 1,266.3 1,266.3
Advances from borrowers for taxes
and insurance - 155.3 155.3
Other liabilities 398.4 195.0 581.5
Long-term debt 1,342.2 55.2 1,397.4
Deferred income taxes 212.1 - 142.8
Postretirement benefits 124.9 - 124.9
TOTAL LIABILITIES $ 2,077.6 $ 8,332.4 10,328.8
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
61,389,552 shares including shares held
in the treasury 61.4
Additional paid-in capital 301.5
Retained earnings 1,522.9
1,885.8
Cost of shares held in the treasury:
5,534,641 shares (132.7)
TOTAL SHAREHOLDERS' EQUITY 1,753.1
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $12,081.9
See the notes to the consolidated financial statements.
<PAGE>11
Consolidated Balance Sheets
Temple-Inland Inc. and Subsidiaries
January 1, 1994
Unaudited
Parent Financial
Company Services Consolidated
(in millions)
ASSETS
Cash $ 8.6 $ 156.3 $ 164.9
Investments - 4,407.3 4,407.3
Loans receivable - 2,755.3 2,755.3
Covered assets - 664.3 664.3
Receivable from FSLIC - 34.2 34.2
Trade and other receivables 198.5 - 198.5
Inventories 258.1 630.1 888.2
Property & equipment 2,346.1 37.4 2,383.5
Other assets 104.9 448.4 463.1
Investment in affiliates 487.6 - -
TOTAL ASSETS $ 3,403.8 $ 9,133.3 $11,959.3
LIABILITIES
Deposits $ - $ 6,362.3 $ 6,362.3
Securities sold under repurchase
agreements and Federal Home
Loan Bank advances - 1,724.8 1,724.8
Advances from borrowers for taxes
and insurance - 59.2 59.2
Other liabilities 360.9 399.1 753.0
Long-term debt 1,044.8 76.2 1,121.0
Deferred income taxes 175.9 - 116.8
Postretirement benefits 122.0 - 122.0
TOTAL LIABILITIES $ 1,703.6 $ 8,621.6 10,259.1
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
61,389,552 shares including shares held
in the treasury 61.4
Additional paid-in capital 296.9
Retained earnings 1,482.1
1,840.4
Cost of shares held in the treasury:
5,908,173 shares (140.2)
TOTAL SHAREHOLDERS' EQUITY 1,700.2
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $11,959.3
See the notes to the consolidated financial statements.
<PAGE>12
Consolidated Statements of Cash Flows
Temple-Inland Inc. and Subsidiaries
Unaudited
First Nine Months
1994 1993
(in millions)
Cash Provided by (Used for) Operations
Net income $ 82.6 $ 110.3
Adjustments to reconcile net income to
net cash:
Cumulative effect of accounting changes - (50.0)
Depreciation and depletion 154.7 146.7
Amortization and accretion 9.7 12.3
Deferred taxes 26.6 (.9)
Receivable from FSLIC 31.8 1.8
Trade and other receivables (62.2) (10.9)
Inventories and mortgage loans held
for sale 479.6 (108.5)
Other (206.8) 211.8
516.0 312.6
Cash Provided by (Used for) Investments
Capital expenditures (351.0) (263.9)
Sale of property and equipment, net 4.1 4.5
Purchase of investments (235.6) (293.5)
Maturities of investments 643.8 808.8
Proceeds from sale of loans and investments .5 12.1
Loans originated net of principal collected (481.6) (477.9)
Reduction in covered assets 188.8 53.2
Manufacturing acquisitions (61.5) -
Savings bank acquisition 204.5 -
Other 18.4 (2.6)
(69.6) (159.3)
Cash Provided by (Used for) Financing
Additions to debt 306.2 127.8
Payments of debt (25.4) (87.1)
Net increase (decrease) in securities sold
under repurchase agreements and short-term
borrowings (458.8) 807.8
Cash dividends paid to shareholders (41.8) (41.5)
Net decrease in deposits (31.5) (181.7)
Net increase in advances from borrowers for
taxes and insurance 93.9 62.6
Other 11.6 9.6
(145.8) 697.5
Net increase in cash and cash equivalents 300.6 850.8
Cash and cash equivalents at beginning of
period 164.9 124.7
Cash and cash equivalents at end of period $ 465.5 $ 975.5
See notes to consolidated financial statements.
<PAGE>13
TEMPLE-INLAND INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited interim consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. However, because certain assets and
liabilities are in separate corporate entities, the consolidated assets are
not available to satisfy all consolidated liabilities. In the opinion of
management, all adjustments (consisting only of normal accruals) considered
necessary for a fair presentation have been included. For further
information, refer to the consolidated financial statements and footnotes
included in, or incorporated into, Temple-Inland Inc.'s (the "Company") Annual
Report on Form 10-K for the fiscal year ended January 1, 1994.
The consolidated financial statements include the accounts of Temple-Inland
Inc. and all subsidiaries in which the Company has more than a 50 percent
equity ownership. All material intercompany amounts and transactions have
been eliminated.
Included as an integral part of the consolidated financial statements are
separate summarized financial statements for the Company's primary business
groups.
The Parent Company (Temple-Inland Inc.) summarized financial statements
include the accounts of Temple-Inland Inc. and its manufacturing subsidiaries
with the financial services subsidiaries and the 20 percent to 50 percent
owned companies being reflected in the financial statements on the equity
basis.
The Temple-Inland Financial Services group summarized financial statements
include savings bank, mortgage banking and real estate development activities
and insurance operations.
NOTE B - CONTINGENCIES
In addition to the items discussed under Item 1 of Part II of the quarterly
report, there are pending against the Company and its subsidiaries lawsuits
and claims arising in the regular course of business.
In the opinion of management, recoveries, if any, by plaintiffs or claimants
that may result from the foregoing litigation and claims will not be material
in relation to the consolidated financial position of the Company and its
subsidiaries.
<PAGE>14
MANAGEMENT'S DISCUSSION AND ANALYSIS
Results of Operations
Results of operations, including information regarding the Company's principal
business segments, are shown below:
Third Quarter First Nine Months
1994 1993 1994 1993
(in millions)
Revenues
Corrugated container $ 371.2 $ 307.8 $ 1,051.9 $ 945.9
Bleached paperboard 79.1 75.6 224.8 251.3
Building products 143.7 119.3 420.9 356.0
Other activities 7.2 15.9 18.9 45.8
Manufacturing net sales 601.2 518.6 1,716.5 1,599.0
Financial services 153.8 162.4 469.9 467.4
Total revenues $ 755.0 $ 681.0 $ 2,186.4 $ 2,066.4
Income
Corrugated container $ 23.0 $ 2.6 $ 49.3 $ 30.1
Bleached paperboard (2.4) (6.3) (20.8) (6.2)
Building products 34.1 23.0 103.7 72.1
Other activities .3 (.4) 1.5 (3.4)
Operating profit 55.0 18.9 133.7 92.6
Financial services 12.8 16.5 44.2 52.0
67.8 35.4 177.9 144.6
Corporate expenses (3.1) (2.8) (9.5) (8.5)
Parent company interest - net (17.1) (16.7) (49.3) (51.9)
Other - net 1.0 .3 2.3 1.9
Income before taxes and
accounting changes 48.6 16.2 121.4 86.1
Taxes on income 15.5 4.8 38.8 25.8
Income before accounting
changes 33.1 11.4 82.6 60.3
Cumulative effect of accounting
changes - - - 50.0
Net income $ 33.1 $ 11.4 $ 82.6 $ 110.3
<PAGE>15
Third Quarter 1994 vs. Third Quarter 1993
Third quarter earnings for 1994 totaled $33.1 million, or $.59 per share
compared with earnings of $11.4 million, or $.21 per share in the third
quarter of last year. Revenues for the quarter were $755.0 million, up from
$681.0 million in the prior year.
The corrugated container group earned $23.0 million, up from $2.6 million
earned in last year's third quarter. Demand for corrugated containers and
containerboard remains strong, with box shipments up 8.9 percent from third
quarter last year. Selling prices for containerboard and boxes continued to
recover in the third quarter. Although productivity improvements have offset
most cost increases this year, the Company has experienced extremely
unfavorable increases in the price of old corrugated containers (OCC), the
principal raw material in the Company's recycle operations. These prices rose
throughout the year, peaking in July, then moderating by the end of the
quarter.
The bleached paperboard group lost $2.4 million in the third quarter,
significantly better than the loss of $6.3 million in the third quarter last
year. The bleached paperboard group continued to improve, with stronger
product demand contributing to more efficient mill operations. Although sales
prices declined early in the quarter, price improvement had begun by quarter
end.
Building products earnings for the third quarter were $34.1 million, up from
$23.0 million last year. Demand for building products continued to be strong
in the third quarter. Prices for all the Company's building materials
remained strong, with only lumber experiencing pressure toward the end of the
quarter.
Earnings for the financial services group were $12.8 million, down from $16.5
million in the third quarter last year. Mortgage banking loan volumes
continued to decline below last year's record level, but Guaranty Federal
Bank, F.S.B., continued to experience significant growth in its acquisition of
adjustable mortgage loans. The discounted interest rates received in the
first months of these adjustable mortgage loans are being absorbed in current
operating results.
Net interest expense increased to $17.1 million in the third quarter of 1994
compared with $16.7 million in the third quarter of last year. Interest
expense increased in the third quarter due to higher levels of debt
outstanding. Capitalized interest increased significantly compared to the
prior year due to continued spending for the bleached paperboard group's
modernization projects which are expected to be operational in the second half
of 1995. However, this increase in capitalized interest was not enough to
offset the increase in interest expense.
<PAGE>16
First Nine Months of 1994 vs. First Nine Months of 1993
Earnings for the first nine months of 1994 were $82.6 million, or $1.48 per
share compared with earnings of $60.3 million, or $1.09 per share (before
required accounting changes) in the first nine months of 1993.
The corrugated container group earned $49.3 million, up 64 percent from the
$30.1 million earned in the first nine months of 1993. Demand for corrugated
boxes and containerboard remains strong, with the industry operating at record
levels. Selling prices for containerboard and boxes have improved
significantly. The cost of OCC, the principal raw material, rose throughout
the year, peaking in July, then moderating by the end of the third quarter.
If the current pricing for OCC prevails, costs in the fourth quarter will be
down from the third quarter average.
The bleached paperboard group operated at a loss of $20.8 million compared
with a loss of $6.2 million in the first nine months of 1993. Demand for
paperboard products strengthened during the latter part of the second quarter
and continued to improve, contributing to more efficient mill operations.
Price improvements had begun by quarter end.
The building products group earned $103.7 million in the first nine months of
1994 compared with $72.1 million for the same period last year due to
increased demand and improved price levels for most of our product lines.
Earnings for the financial services group were $44.2 million for the period
compared with $52.0 million for last year's comparable period due to the
decrease in income from our mortgage unit, whose level of originations has
declined as the refinancing activity subsided.
Financial Condition
The Company's financial condition continues to be sound. Internally generated
funds, existing credit facilities and the capacity to issue long-term debt are
sufficient to fund projected capital expenditures, to service existing debt,
to pay dividends and to meet normal working capital requirements. During the
first nine months of 1994, the Company's debt increased $306 million mainly
through issuance of commercial paper and private placement debt to fund
planned capital projects for our bleached paperboard group and the purchase of
a specialty corrugated business by our corrugated container group.
Our savings bank continues to meet all three regulatory requirement formulae
set out under the Financial Institution Reform, Recovery and Enforcement Act
of 1989 ("FIRREA").
<PAGE>17
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
As last disclosed in the Company's Annual Report on Form 10-K for the
fiscal year ended January 1, 1994, the Company is a defendant in a
lawsuit filed in Orange County, Texas, by approximately 250
plaintiffs in which unspecified actual and punitive damages are
sought for alleged diminished property values and increased risk of
cancer resulting from the discharge of dioxin into the river near the
Company's plant at Evadale, Texas. During the quarter ended
October 1, 1994, the Company agreed to settlement terms with the
plaintiffs. The case against the Company, however, will not be
dismissed until a definitive settlement agreement is executed by the
parties. While the Company believes that such a definitive
settlement agreement will be executed in the near future, its
execution is subject to reaching agreement with all parties on a
definitive settlement agreement and related documents and the
satisfaction of certain conditions precedent. Although the Company
is prohibited from disclosing the terms of the settlement, the costs
of settlement are significantly under the materiality standard of
Item 103 of Regulation S-K.
Item 2. Changes in Securities.
Not Applicable.
Item 3. Defaults Upon Senior Securities.
Not Applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
Not Applicable
Item 5. Other Information.
Not Applicable.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
Regulation S-K
Exhibit Number
(11) Statement re computation of per share earnings.
(27) Financial Data Schedule
(b) Reports on Form 8-K. During the three months ended October
1, 1994, the Company did not file any reports on Form 8-K.
<PAGE>18
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TEMPLE-INLAND INC.
(Registrant)
Date: November 11, 1994 By /s/ David H. Dolben
David H. Dolben
Vice President and
Chief Accounting Officer
<PAGE>19
EXHIBIT INDEX
The following is an index of the exhibits filed herewith. The page reference
set forth opposite the description of exhibits included in such index refer to
the pages under the sequential numbering system prescribed by Rule 0-3(b)
under the Securities Exchange Act of 1934.
Regulation S-K
Exhibit Sequential
Number Page Number
(11) Statement re computation of 20
per share earnings.
(27) Financial Data Schedule 21-23
<PAGE>20
EXHIBIT (11)
TEMPLE-INLAND INC. AND SUBSIDIARIES
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
(in thousands, except for per share data)
Third Quarter First Nine Months
1994 1993 1994 1993
Primary
Average common shares outstanding 55,809 55,344 55,696 55,307
Net effect of dilutive stock options
based on treasury stock method using
average market price 127 166 159 221
Weighted average shares outstanding 55,936 55,510 55,855 55,528
Net income:
Income before accounting changes $ 33,036 $ 11,350 $ 82,568 $ 60,279
Cumulative effect of accounting
changes - - - 50,000
Net income $ 33,036 $ 11,350 $ 82,568 $110,279
Earnings per share:
Before accounting changes $ .59 $ .21 $ 1.48 $ 1.09
Effect of accounting changes - - - .90
Earnings per share $ .59 $ .21 $ 1.48 $ 1.99
Fully Diluted
Average common shares outstanding 55,809 55,344 55,696 55,307
Net effect of dilutive stock options
based on treasury stock method
using the closing market price, if
higher than average market price 287 166 212 221
Weighted average shares outstanding 56,096 55,510 55,908 55,528
Net income:
Income before accounting changes $ 33,036 $ 11,350 $ 82,568 $ 60,279
Cumulative effect of accounting
changes - - - 50,000
Net income $ 33,036 $ 11,350 $ 82,568 $110,279
Earnings per share:
Before accounting changes $ .59 $ .21 $ 1.48 $ 1.09
Effect of accounting changes - - - .90
Earnings per share $ .59 $ .21 $ 1.48 $ 1.99
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
SUMMARIZED BALANCE SHEETS AND SUMMARIZED INCOME STATEMENTS FOR THE PARENT
COMPANY (TEMPLE-INLAND INC.) AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> OCT-01-1994
<CASH> 10,700,000
<SECURITIES> 0
<RECEIVABLES> 265,300,000
<ALLOWANCES> 8,100,000
<INVENTORY> 255,600,000
<CURRENT-ASSETS> 552,900,000
<PP&E> 2,569,700,000
<DEPRECIATION> 1,562,600,000
<TOTAL-ASSETS> 3,830,700,000
<CURRENT-LIABILITIES> 371,700,000
<BONDS> 1,342,200,000
<COMMON> 61,400,000
0
0
<OTHER-SE> 1,691,700,000
<TOTAL-LIABILITY-AND-EQUITY> 3,830,700,000
<SALES> 1,716,500,000
<TOTAL-REVENUES> 1,760,700,000
<CGS> 1,443,000,000
<TOTAL-COSTS> 1,592,300,000
<OTHER-EXPENSES> 2,300,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 49,300,000
<INCOME-PRETAX> 121,400,000
<INCOME-TAX> 38,800,000
<INCOME-CONTINUING> 82,600,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 82,600,000
<EPS-PRIMARY> 1.48
<EPS-DILUTED> 1.48
</TABLE>
<TABLE> <S> <C>
<ARTICLE> CT
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED INCOME STATEMENTS FOR
TEMPLE-INLAND INC. AND SUBSIDIARIES AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> OCT-01-1994
<TOTAL-ASSETS> 12,081,900,000
<COMMON> 61,400,000
0
0
<OTHER-SE> 1,691,700,000
<TOTAL-LIABILITY-AND-EQUITY> 12,081,900,000
<TOTAL-REVENUES> 2,186,400,000
<INCOME-TAX> 38,800,000
<INCOME-CONTINUING> 82,600,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 82,600,000
<EPS-PRIMARY> 1.48
<EPS-DILUTED> 1.48
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
SUMMARIZED BALANCE SHEETS AND SUMMARIZED INCOME STATEMENTS FOR TEMPLE-
INLAND FINANCIAL SERVICES AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> OCT-01-1994
<CASH> 454,800,000
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 162,300,000
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 3,989,600,000
<INVESTMENTS-MARKET> 0
<LOANS> 3,334,700,000
<ALLOWANCE> 0
<TOTAL-ASSETS> 8,898,000,000
<DEPOSITS> 6,660,600,000
<SHORT-TERM> 1,111,900,000
<LIABILITIES-OTHER> 350,300,000
<LONG-TERM> 55,200,000
<COMMON> 0
0
0
<OTHER-SE> 565,600,000
<TOTAL-LIABILITIES-AND-EQUITY> 8,898,000,000
<INTEREST-LOAN> 172,300,000
<INTEREST-INVEST> 143,400,000
<INTEREST-OTHER> 47,700,000
<INTEREST-TOTAL> 363,400,000
<INTEREST-DEPOSIT> 184,800,000
<INTEREST-EXPENSE> 244,800,000
<INTEREST-INCOME-NET> 118,600,000
<LOAN-LOSSES> 4,100,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 176,800,000
<INCOME-PRETAX> 44,200,000
<INCOME-PRE-EXTRAORDINARY> 44,200,000
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 32,800,000
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<YIELD-ACTUAL> 0
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 0
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 0
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
