Forestar Group Inc · NYSE:FOR
Forestar — Q3 2010 Earnings Presentation
21 slides from Forestar's earnings presentation, Nov 2, 2010
Slide 1: Third Quarter 2010 Financial Results
1 Third Quarter 2010 Financial Results November 3, 2010
Slide 2: Forward Looking Statements
2 Forward Looking Statements This presentation contains "forward-looking statements" within the meaning of the federal securities laws. These statements reflect management's current views with respect to future events and are subject to risk and uncertainties. We note that a variety of factors and u
Slide 3: Third Quarter 2010 Results
Third Quarter 2010 Results 3 ($ in Millions, except per share data) 3rd Qtr 2010 3rd Qtr 2009 2nd Qtr 2010 Net Income (Loss) $8.9 $19.5 ($3.3) Earnings (Loss) Per Share $0.25 $0.54 ($0.09) 3rd Qtr 2010 weighted average diluted shares outstanding were 36.4 million 3rd Qtr 2010 results include an afte
Slide 4: Segment Results
Segment Results 4 ($ in Millions) 3rd Qtr 2010 3rd Qtr 2009 2nd Qtr 2010 Real Estate ($1.9) $0.1 $2.4 Mineral Resources 6.2 17.8 4.3 Fiber Resources 1.4 2.1 1.1 Total $ 5.7 $20.0 $ 7.8 3rd Qtr 2010 real estate segment results include $4.4 million in undeveloped land sales, compared with $11.3 millio
Slide 5: Strategy and Initiative Execution Have Forestar Well Positioned
5 5 Strategy and Initiative Execution Have Forestar Well Positioned Market Conditions Real Estate Minerals Strategic Initiatives
Slide 6: U.S. Housing Market Conditions Are Mixed
U.S. Housing Market Conditions Are Mixed Issue Metric Comment Housing Affordability 1.7 1 Prices return to 2003 levels 30-Yr Fixed Rate Mortg. ~4.25% Near historic lows New Home Inventory 204,000 units / 8 MoS Lowest level of new home units since September 1968 Unemployment 9.6% More problematic in
Slide 7: Housing Starts at Year Low
Housing Starts at 50 Year Low 7 Source: MetroStudy Recessions 50 Year Avg. 1.5 million 2010 1960
Slide 8: Texas Real Estate Market Conditions
Texas Real Estate Market Conditions Texas Market Conditions Lower New Home Inventory - 29k units / 6.3 MoS Less Foreclosure Activity - 2% of Loans 2 Increased Housing Affordability - 1.9 3 Lower Unemployment - 8.1% Last 12 mos - Texas created >152k new jobs 8 Texas is a dynamic economy and consisten
Slide 9: Real Estate Segment KPI's
9 Real Estate Segment KPI's 3rd Qtr 2010 3rd Qtr 2009 2nd Qtr 2010 Residential Lot Sales * Lots Sold 187 168 235 Average Price / Lot $48,800 $52,700 $50,300 Gross Profit / Lot $17,100 $16,000 $15,500 Commercial Tract Sales * Acres Sold 0.4 1.5 14.6 Average Price / Acre $623,400 $435,400 $58,800 Land
Slide 10: Real Estate Pipeline - Q3 2010
Real Estate Pipeline - Q3 2010 * In addition, Forestar owns a 58% interest in a venture which controls over 16,000 acres of undeveloped land in Georgia 10
Slide 11: Multifamily Opportunity
Multifamily Opportunity 11 Forestar is well positioned to take advantage of multifamily opportunity * Includes ventures Echo Boomers / Propensity to Rent Source: National Association of Realtors, National Association of Homebuilders, U.S. Census Bureau, Green Street Advisors. Source: U.S. Census Bur
Slide 12: Fiber Resources Segment KPI's
12 Fiber Resources Segment KPI's 3rd Qtr 2010 3rd Qtr 2009 2nd Qtr 2010 Fiber Sales Pulpwood Tons Sold 116,900 216,200 95,600 Average Pulpwood Price / Ton $9.41 $8.85 $10.89 Sawtimber Tons Sold 37,500 63,400 23,800 Average Sawtimber Price / Ton $17.79 $19.38 $20.36 Total Tons Sold 154,400 279,600 11
Slide 13: Oil & Gas Market Conditions
Oil & Gas Market Conditions 13 Oil prices remain firm in anticipation of global demand (China & India) Natural gas prices pressured by elevated inventories and supply E&P companies drilling to hold leases and prove reserves vs. increasing lease acreage Gulf issues expected to negatively impact offsh
Slide 14: Mineral Resources Segment KPI's
14 Mineral Resources Segment KPI's 3rd Qtr 2010 3rd Qtr 2009 2nd Qtr 2010 Leasing Activity Net Acres Leased 9,600 10,800 - Average Bonus / Acre $274 $1,465 - Royalties* Natural Gas Production (MMcf) 436.6 283.1 508.5 Average Price / Mcf $4.11 $3.35 $4.63 Oil Production (Barrels) 27,700 26,000 30,500
Slide 15: 2008 Bossier - Haynesville Drilling
2008 Bossier - Haynesville Drilling 15 Acres Leased Available for Lease Held by Production Haynesville Well Permits Haynesville Drilling Activity Producing Bssr-Hysv Wells Waiting on Completion Bossier - Haynesville Activity in East Texas & Louisiana 33 wells drilled & completed - - 22 in Texas Note
Slide 16: 2009 Bossier - Haynesville Drilling
2009 Bossier - Haynesville Drilling 16 Devon: Kardell GU 1H Reported IP = 31 MMcfd Acres Leased Available for Lease Held by Production Haynesville Well Permits Haynesville Drilling Activity Producing Bssr-Hysv Wells Waiting on Completion Bossier - Haynesville Activity in East Texas & Louisiana 138 w
Slide 17: 2010 Bossier - Haynesville Drilling
2010 Bossier - Haynesville Drilling 17 Acres Leased Available for Lease Held by Production Haynesville Well Permits Haynesville Drilling Activity Producing Bssr-Hysv Wells Waiting on Completion Bossier - Haynesville Activity in East Texas & Louisiana 201 wells spud - - 147 in Texas 78 wells complete
Slide 18: Q3 2010 East Texas Minerals Activity
Q3 2010 East Texas Minerals Activity 18 Note: Wells owned by third-party lessee / operator 39 rigs in the area 37 rigs drilling Bossier - Haynesville wells 45 wells drilled 76 wells waiting on completion Acres Leased Available for Lease Held by Production Haynesville Well Permits Haynesville Drillin
Slide 19: Strategic Initiatives Progress
Strategic Initiatives Progress ~110,000 acres sold - $181 million Positive cash flow - reduced investment in development & lower costs Reduced debt > $130 million Repurchased 1.0 million shares for $15 million Improved minerals transparency and disclosure ~60,000 acres actively marketed $22 million
Slide 20: The Forestar Opportunity
The Forestar Opportunity Well Positioned to Maximize Long-Term Shareholder Value ight Strategy and a ‘5 Balance Sheet Positioned for Ini res Underpinned by Proven Management Team nicSaneBENel Cheri Real Estate and Natural Resource Assets Located in Healthier Markets and Active Basins
Slide 21: Forestar
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