Temple-Inland Inc. Comments on First Quarter Earnings.

Business Editors

AUSTIN, Texas--(BUSINESS WIRE)--March 26, 2003

Temple-Inland Inc. (NYSE:TIN) announced today that first quarter 2003 results will decline from fourth quarter 2002 levels due to continued economic weakness, higher energy costs, disruptions from severe winter weather, higher pension expenses, initial costs related to previously announced plans to lower costs through consolidation and supply chain initiatives, and costs associated with recent box plant closures.

Relative to the fourth quarter 2002, the company expects the corrugated packaging operation to be negatively affected by approximately $15 million in higher energy costs and $7 million in higher pension expenses. In addition, lower linerboard and box prices will reduce operating income by approximately $4 million in the quarter.

Building products operations are expected to be negatively affected compared with fourth quarter 2002 by approximately $3 million in higher energy costs, $2 million in higher pension expenses, $2 million due to weather-related production disruptions and fiber availability, and essentially no high-value land sales in the quarter.

In addition, weaker markets and lower prices for particleboard and medium density fiberboard (MDF) negatively affected earnings and resulted in the temporary shutdown of the Mt. Jewett particleboard and the Clarion MDF facilities in the quarter.

Financial services earnings are expected to be negatively affected in the quarter by a $3 million decline in income from real estate operations and a $4 million decline in income from mortgage banking activities. The provision for loan loss is expected to be in line with first quarter 2002 levels, but up approximately $8 million compared with fourth quarter 2002.