Forestar Group Inc · NYSE:FOR
Forestar — FY2016 Earnings Presentation
18 slides from Forestar's earnings presentation, Mar 1, 2017
Slide 1: Fourth Quarter and Full Year 2016 Financial Results
Information on Execution of Key Initiatives and Fourth Quarter and Full Year 2016 Financial Results March 2, 2017 Exhibit 99.2
Slide 2: Notice to Investors
Notice to Investors 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: Key Initiatives: 2016 – A Transformative Year
Key Initiatives Reducing Costs Across the Entire Organization • Actions taken to eliminate nearly $60MM in annual SG&A to date* • Additional 34% reduction in force planned in March 2017 • Following reduction in force will have reduced headcount by over 70% compared to 2014 peak • Implemented zero ba
Slide 4: Overview of Assets
Overview of Assets CORE Water 45% non-participating royalty interest in groundwater rights on 1.4 million surface acres Groundwater leases on 20,000 surface acres in Central Texas – Under Contract* Multifamily Westlake site in Austin – Under Contract* Acklen venture in Nashville completed – 85.6% oc
Slide 5: Fourth Quarter and Full Year 2016 Results
Fourth Quarter and Full Year 2016 Results 5 ($ in Millions, except per share data) Revenues * $64.5 $105.4 $197.3 $218.6 Net Income (Loss) – Continuing Operations $43.2 $33.3 $75.5 ($26.9) Net Income (Loss) Per Share – Continuing Operations $1.02 $0.79 $1.78 ($0.79) Net Income (Loss) $43.7 ($6.2) $5
Slide 6: Fourth Quarter and Full Year 2016 Segment Results
Fourth Quarter and Full Year 2016 Segment Results 6 ($ in Millions, except per share data) Segment Earnings (Loss) * Real Estate $12.9 $37.9 $121.4 $67.7 Mineral Resources* 0.7 1.0 3.3 4.2 Other (3.7) (0.1) (4.6) (0.6) Total Segment Earnings $9.9 $38.8 $120.1 $71.3 * Excludes oil & gas working inter
Slide 7: Real Estate Segment - Earnings Reconciliation Q4 2016
Real Estate Segment - Earnings Reconciliation Q4 2016 $0.3 … $37.9 $6.6 $1.2 $0.4 ($11.0) ($11.4) ($3.9) $(1.1) $12.9 $0 $5 $10 $15 $20 $25 $30 $35 $40 $45 $50 Q4 2015 Opex Mitigation Banking Lot Sales Impairment Multifamily Properties Undeveloped Land Sales Residential & Commercial Tract Sales Gain
Slide 8: Real Estate Segment - Earnings Reconciliation FY 2016
Real Estate Segment - Earnings Reconciliation FY 2016 $3.1 $67.7 $116.3 $12.1 $11.3 ($15.0) ($55.4) ($7.6) $(1.4) $121.4 $0 $50 $100 $150 $200 $250 FY 2015 Gain on Asset Sales Undeveloped Land Sales Opex Mitigation Banking Impairment Multifamily Properties Lot Sales Residential & Commercial Tract Sa
Slide 9: Lot Sales and Lots Under Contract
Lot Sales and Lots Under Contract 9 0 500 1,000 1,500 2,000 2,500 Q 11 2 Q 21 2 Q 31 2 Q 41 2 Q 11 3 Q 21 3 Q 31 3 Q 41 3 Q 11 4 Q 21 4 Q 31 4 Q 41 4 Q 11 5 Q 21 5 Q 31 5 Q 41 5 Q 11 6 Q 21 6 Q 31 6 Q 41 6 Re sid en tia l L ot s Developed Lots Lots Under Development > 2,100 Lots Under Option Contrac
Slide 10: For questions, please contact
For questions, please contact: Charles D. Jehl Chief Financial Officer Forestar Group Inc. 6300 Bee Cave Road Building Two, Suite 500 Austin, TX 78746 512-433-5229 chuckjehl@forestargroup.com
Slide 11: Appendix
FORESTAR Appendix cece
Slide 12: Action Taken to Eliminate Nearly $60 Million in Annual SG&A Costs
0 10 20 30 40 50 60 70 80 90 100 2015 2016 2017E Target Annual SG&A Costs Corporate G&A Segment Operating Costs Project Level Expenses Cost Reductions SG&A costs in 2017 and target are estimates and actual results may vary depending on the timing of completion of non-core asset sales. $87 million $
Slide 13: Real Estate Segment KPIs
Real Estate Segment KPI’s Q4 2016 Q4 2015 FY 2016 FY 2015 Residential Lot Sales Lots Sold 835 363 1,940 1,472 Average Price / Lot $67,594 $83,739 $68,152 $77,170 Gross Profit / Lot $21,493 $35,023 $23,446 $34,398 Commercial Tract Sales Acres Sold 178 7 298 63 Average Price / Acre $7,442 $491,723 $44
Slide 14: Stable Market Demand in Key Markets
Stable Market Demand in Key Markets *Source: Bureau of Labor Statistics December 2016 vs. December 2015 Austin 1.9% Dallas / Fort Worth 3.3% Houston 0.5% San Antonio 1.9% Atlanta 2.7% Charlotte 1.7% Nashville 3.1% U.S. Average 1.6% Job Growth vs. National Average* Job growth in our key markets holdi
Slide 15: Non-Core Community Development Projects Update
Non-Core Community Development Projects Update 15 • Non-core asset sales provide tax losses to offset tax gains from other non- core asset sales • Annual carry costs reduced by approximately $3 million for assets sold Community Location Status Interest Owned* Developed Lots Undeveloped Lots Commerci
Slide 16: Bulk Timberland and Undeveloped Land – Sale Summary
Bulk Timberland and Undeveloped Land – “Sale Summary” Purchase Price • $104.2 MM purchase price • Closed December 2016 • $1,786 average price per acre Assets Sold • Approximately 58,300 acres of timberland in Georgia and Alabama • Minerals underlying the timberland also conveyed Structure • Three se
Slide 17: Mineral Interests – Sale Summary
Mineral Interests – “Sale Summary” Purchase Price • $85.6 MM ($75MM received, $10.6MM in escrow for title) • Closed February 17, 2017 Minerals Owned • 44,000 acres held by production • 476,000 undeveloped acres • 520,000 total net mineral acres Target Formations • Haynesville, James Lime, Cotton Val
Slide 18: For questions, please contact
18 For questions, please contact: Charles D. Jehl Chief Financial Officer Forestar Group Inc. 6300 Bee Cave Road Building Two, Suite 500 Austin, TX 78746 512-433-5229 chuckjehl@forestargroup.com