Slide 1: Second Quarter 2012 Financial Results
Second Quarter 2012 Financial Results August 8, 2012 Exhibit 99.2 Accelerating Value Realization, Growing Through Strategic Investments and Delivering the Greatest Value from Every Acre
Slide 2: Notice to Investors
Notice to Investors 2 This presentation contains “forward-looking statements” within the meaning of the federal securities laws. Forward-looking statements are typically identified by words or phrases such as “will,” “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “target
Slide 3: Second Quarter 2012 Financial Results
Second Quarter 2012 Financial Results 3 3 Accelerating Value Realization, Growing Through Strategic Investments and Delivering the Greatest Value from Every Acre
Slide 4: Accelerating Value Realization Drives Improved Second Quarter 2012 Financial Results
Accelerating Value Realization Drives Improved Second Quarter 2012 Financial Results ($ in Millions, except per share data) 2nd Quarter 2012 2nd Quarter 2011 Total Segment Earnings $12.2 $4.8 4 Net Income (Loss) $0.8 ($3.9) Earnings (Loss) Per Share $0.02 ($0.11) Segment Earnings: Mineral Resources
Slide 5: Continuing to Strengthen Balance Sheet and Liquidity
Continuing to Strengthen Balance Sheet and Liquidity 5 ($ in millions) 2nd Quarter 2012 2nd Quarter 2011 ($ in millions) Timing Cash Debt Reduction Total $68 ($31) Cash and Cash Equivalents $45 $6 Total Debt $202 $261 Total Debt / Total Capital 28% 34% Liquidity * $189 $115 2012 Significant Transact
Slide 6: Second Quarter 2012 Operating Highlights
Second Quarter 2012 Operating Highlights 6 Accelerating Value Realization By Increasing Oil Production and Residential Lot Sales and Growing Net Asset Value by Capitalizing on Strategic Growth and Investment Opportunities
Slide 7: Building Momentum - Second Quarter Highlights
Building Momentum - Second Quarter Highlights 7 Oil production up over 120% vs. Q2 2011 Seven additional wells completed – total producing wells Closed venture for development in downtown Austin - Eleven Closed venture for development in Denver Tech Center - 360° Sold residential lots - up over 50%
Slide 8: Second Quarter 2012 Minerals – Oil & Gas Highlights
Second Quarter 2012 Minerals – Oil & Gas Highlights Building Momentum By Driving Leasing and Exploration to Increase Production and Reserves 8
Slide 9: Increased Oil Production Driving Higher Royalties
Increased Oil Production Driving Higher Royalties 9 Segment Earnings Reconciliation Q2 2011 vs. Q2 2012 ($ in millions) Note: Wells owned by third-party lessee / operator * Increased costs principally related to additional staffing and production taxes Mineral Resources $3.1 $2.5 ($0.3) ($1.4) * $3.
Slide 10: Strategy Execution Driving Increased Oil Production
10 Strategy Execution Driving Increased Oil Production Growth in Drilling Activity Well Count Q1 2011 – Q2 2012 Forestar’s Share of Annual Oil Production 2008 – 2012 * Excludes any benefit from Credo acquisition 50,000 100,000 150,000 200,000 250,000 Note: Includes ventures; wells owned and operated
Slide 11: Exploration and Drilling Activity Focused on Multiple Basins and Formations
11 Exploration and Drilling Activity Focused on Multiple Basins and Formations Target Formations 2011-2012 Well Completions East Texas & Louisiana* Acres Leased Available for Lease Held by Production Acres with Option New Oil Wells New Gas Wells * Map excludes 6 wells located in Barnett Shale in Nor
Slide 12: Second Quarter 2012 Fiber Resources Highlights
Second Quarter 2012 Fiber Resources Highlights 12 Building Momentum Through Sustainable Harvests and Maximizing Recreational Lease Activity
Slide 13: Stable Fiber Resources Results
Stable Fiber Resources Results 13 Segment Earnings Reconciliation Q2 2011 vs. Q2 2012 Q2 2012 Highlights Sold over 105,700 tons of fiber Higher fiber sales principally reflect timing of harvests 99% of land leased for recreation $8.84/acre average price for rec leases Fiber Sales Q2 2011 – Q2 2012 (
Slide 14: Second Quarter 2012 Real Estate Highlights
Second Quarter 2012 Real Estate Highlights Building Momentum By Increasing Residential Lot Sales and Capitalizing on Growth Opportunities 14
Slide 15: Impending Shortage of Quality Lots Driving Demand In Good Locations
Impending Shortage of Quality Lots Driving Demand In Good Locations 15 Note: Includes ventures Forestar Residential Lot Sales U.S. Housing Markets Vacant Developed Lot Classification Source: MetroStudy Top 40 U.S. Housing Markets Class Starts / Month A +4 B 3 – C 2 – D 1 – F < 1
Slide 16: Accelerating Value Realization Driving Improved Second Quarter Results
Accelerating Value Realization Driving Improved Second Quarter Results 16 Q2 2012 Highlights Segment Earnings Reconciliation Q2 2011 vs. Q2 2012 ($ in millions) Note: Includes Ventures Real Estate *Includes $1.1 million in earnings from loan secured by Discovery at Springs Trails project in Houston
Slide 17: Increased Lot Sales and Strong Backlog Reflect Benefit Of Our Market Position
Increased Lot Sales and Strong Backlog Reflect Benefit Of Our Market Position and Lower Inventories in Texas 17 Residential Lot Sales Q1 2011 – Q2 2012 Residential Lots Under Option Contract Q2 2011 – Q2 2012 Note: Includes ventures River Plantation – Tampa, FL Life of Project Economics: ($ in milli
Slide 18: Real Estate Investments Generating Cash Flow & Earnings
18 Real Estate Investments Generating Cash Flow & Earnings Barrington Kingwood Acquired 180 developed lots (Q3 2011) for $9 million Includes $4 million in reimbursement rights Q2 2012 Sales Activity: lots sold - $102,500 / lot $46,900 / lot avg. margin Gross Profit - $515,600 Discovery at Spring Tra
Slide 19: Timely Developing a Low Capital - High Return Multifamily Business
Timely Developing a Low Capital - High Return Multifamily Business 19 Multifamily Projects Ownership Units June 2012 Occupancy NOI * Cap Rates Stabilized Multifamily Assets Broadstone – Houston, TX 100% 98% $3.3 million 5.5% - 6.5% Las Brisas – Austin, TX 59% 95% $2.4 million 6.0% - 7.0% Under Const
Slide 20: Promesa – Leasing Activity Building Momentum
Promesa –Leasing Activity Building Momentum 20 Austin multifamily occupancy rates >96% 289-unit Class A multifamily property located in Northwest Austin First units delivered in April 2012; approximately 80% complete 39% leased $29 million total investment at Q2 2012; total investment at completion
Slide 21: Eleven – Multifamily Venture with Canyon-Johnson
Eleven – Multifamily Venture with Canyon-Johnson 21 21 257-unit Class A multifamily property Designed for certification under Austin Energy Green Building program Construction commenced in June, first units expected Q3 2013 $3.7 million reimbursement of prior investment with 25% ownership + fees & p
Slide 22: Eleven - Preferred Location in Strong Market
Eleven - Preferred Location in Strong Market 22 22 Located adjacent to downtown Austin Austin multifamily market remains strong: Occupancy rates: 95.6% Annual Rent Growth: 6.1% Job Growth: 3.3% Close proximity to 30,000 jobs in downtown Austin, 24,000 jobs and over 50,000 students at University of T
Slide 23: 360° – Multifamily Venture with Guggenheim Real Estate
360° – Multifamily Venture with Guggenheim Real Estate 23 304-unit Class A multifamily property Designed to obtain Energy Star certification Construction commenced in July with first units expected Q3 2013 $7.2 million reimbursement of prior investment with 20% ownership + fees and promoted interest
Slide 24: 360° - Excellent Location in Strong Multifamily Market
360°- Excellent Location in Strong Multifamily Market 24 Denver Tech Center submarket Multifamily market remains strong: Occupancy rates: 95.4% Rent Growth: 5.7% Job Growth: 2.0% Close proximity to 30 million sq.ft. of office space and 150,000 employees Convenient access to I-25 and Arapahoe Light R
Slide 25: Second Quarter 2012 Strategic Initiatives
Second Quarter 2012 Strategic Initiatives 25 Accelerating Value Realization, Optimizing Transparency and Raising NAV Through Disciplined Investments
Slide 26: Our Focus: Triple In FOR Initiatives Q2 - 2012 Activity
Our Focus: Triple In FOR 26 Initiatives Q2 - 2012 Activity F ocus on Accelerating Value Realization Triple Residential Lot Sales • Lot sales up over 50% from Q2 2011 levels • Oil production up over 120% from Q2 2011 • Total segment earnings up over 150% from Q2 2011 Triple Oil & Gas Production (Mcfe
Slide 27: Credo: Compelling Combination Value Drivers
Credo: Compelling Combination Value Drivers Combination creates meaningful scale through production and reserve growth, additional ownership and operations in strategic basins and improves transparency and disclosures Value Drivers 2011 Metrics * CRED FOR Combined 27 Increased Scale / Doubles Produc
Slide 28: Accelerating Value Realization
Accelerating Value Realization 28 Increasing oil production and proven reserves Growing lot sales and increasing market share Realizing value from stabilized commercial assets Capitalizing on growth opportunities and investments to generate near-term cash flow and earnings Building Momentum By Accel
Slide 29: Anna Torma, SVP Corporate Affairs
Anna Torma SVP Corporate Affairs Forestar Group Inc. 6300 Bee Cave Road Building Two, Suite 500 Austin, TX 78746 512-433-5312 annatorma@forestargroup.com 29
Slide 30: Second Quarter 2012 Appendix - Segment KPI's
Second Quarter 2012 Appendix - Segment KPI’s 30
Slide 31: Mineral Resources Segment KPI's
Q2 2012 Q2 2011 YTD 2012 YTD 2011 31 M INERAL R ESOURCES S EGMENT KPI' S Leasing Activity Net Acres Leased - - 2,532 7,366 Avg. Bonus / Acre - - $187 $357 $289 Royalties * Oil Produced (Barrels) 61,600 27,900 130,700 59,900 Average Price / Barrel $94.64 $102.23 $96.19 $91.69 Natural Gas Produced (MM
Slide 32: Real Estate Segment KPI's
Q2 2012 Q2 2011 YTD 2012 YTD 2011 32 R EAL E STATE S EGMENT KPI' S Residential Lot Sales Lots Sold Average Price / Lot $44,700 $52,400 $48,000 $50,600 Gross Profit / Lot $14,800 $20,600 $17,200 $19,700 Commercial Tract Sales Acres Sold Average Price / Acre $47,000 $185,300 $47,000 $157,900 Land Sale
Slide 33: Fiber Resources Segment KPI's
Q2 2012 Q2 2011 YTD 2012 YTD 2011 33 F IBER R ESOURCES S EGMENT KPI' S Fiber Sales Pulpwood Tons Sold 80,800 70,700 105,200 136,300 Average Pulpwood Price / Ton $9.24 $9.22 $9.46 $9.20 Sawtimber Tons Sold 24,900 12,700 29,300 28,200 Average Sawtimber Price / Ton $19.46 $15.69 $19.47 $16.40 Total Ton
Slide 34: Anna Torma, SVP Corporate Affairs
Anna Torma SVP Corporate Affairs Forestar Group Inc. 6300 Bee Cave Road Building Two, Suite 500 Austin, TX 78746 512-433-5312 annatorma@forestargroup.com 34