Slide 1: Second Quarter 2011 Financial Results
SECOND QUARTER 2011 FINANCIAL RESULTS AUGUST 3, 2011 1
Slide 2: Forward Looking Statements
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 unc
Slide 3: Second Quarter 2011 Results and Key Performance Indicators
SECOND QUARTER 2011 RESULTS AND KEY PERFORMANCE INDICATORS STRATEGY AND EXECUTION HAS FORESTAR WELL POSITIONED 3
Slide 4: Poised for Market Recovery
POISED FOR MARKET RECOVERY 31,000 acres put in play in Louisiana & Texas 2,500 acres leased, 28,500 acres in exploration agreements Acquired loan secured by 900 acre project in Houston Initiated construction of multifamily project in Austin 283 residential lots sold, up 32% vs. Q1 2011 Almost 1,500
Slide 5: Second Quarter 2011 Financial Results
SECOND QUARTER 2011 FINANCIAL RESULTS ($ in Millions, except per share data) 2nd Qtr 2011 2nd Qtr 2010 1st Qtr 2011 Net Income (Loss) ($3.9) ($3.3) ($2.5) Earnings (Loss) Per Share ($0.11) ($0.09) ($0.07) Note: 2nd Qtr 2011 weighted average basic shares outstanding were 35.4 million 2nd Qtr. 2011 re
Slide 6: Segment Earnings
SEGMENT EARNINGS ($ in Millions) 2nd Qtr 2011 2nd Qtr 2010 1st Qtr 2011 Real Estate $1.0 $2.4 $2.6 Mineral Resources 3.1 4.3 5.6 Fiber Resources 0.7 1.1 0.6 Total $4.8 $7.8 $8.8 2nd Qtr. 2011 real estate segment results include $2.5 million in undeveloped land sales compared with $8.2 million in 2nd
Slide 7: Texas Real Estate Markets Among the Healthiest
TEXAS REAL ESTATE MARKETS AMONG THE HEALTHIEST Texas Real Estate Market Conditions Texas forecasted job growth 2x national average Texas house prices didn't get overheated Minimal supply constraints & limited equity withdrawal Housing inventory low and balanced with low sales velocity Texas named #1
Slide 8: Real Estate Highlights
REAL ESTATE HIGHLIGHTS Second Quarter 2011 Highlights: Sold 283 residential lots, up 32% vs. Q1 2011, and up 20% vs. Q2 2010 Sold 4 commercial acres at Cibolo Canyons for $740,000 ($185,000 per acre) Sold 780 acres of land for $3,300 / acre Received $1.6 million from Cibolo Canyons Special Improveme
Slide 9: Real Estate Segment Results
REAL ESTATE SEGMENT RESULTS 2nd Qtr 2011 2nd Qtr 2010 1st Qtr 2011 Residential Lot Sales * Lots Sold 283 235 214 Average Price / Lot $52,400 $50,300 $48,200 Gross Profit / Lot $20,600 $15,500 $18,500 Commercial Tract Sales * Acres Sold 4.0 14.6 20.0 Average Price / Acre $185,300 $58,800 $152,500 Lan
Slide 10: Significant Value Creation Through Entitlement with Minimal Capital Investment
SIGNIFICANT VALUE CREATION THROUGH ENTITLEMENT WITH MINIMAL CAPITAL INVESTMENT Entitlements 1,068 total acres 1,591 Single-family lots 954 Housing units* 133k sq.ft. Commercial Previous zoning only allowed development of 300 residential lots Located near Atlanta MSA Site Plan Burt Creek * Housing un
Slide 11: Strategic and Disciplined Investment in Our Business
STRATEGIC AND DISCIPLINED INVESTMENT IN OUR BUSINESS Houston, Texas Houston, TX MSA Solid market fundamentals: 7.1 months of supply - New Home 7.9 months of supply - Existing Home Foreclosure Inv. - 1.2% of mortgages Positive Job Growth 54,300 jobs created since Q2 2010 Increased housing affordabili
Slide 12: Timberland Sale
Timberland Sale 50,000 acres $1,500 per acre Location: Alabama - 15,000 acres Georgia - 35,000 acres Forestar reservations: Mineral rights 1,000 acres of mitigation participation rights Expected to close in 3rd Qtr. EXECUTING OUR NEAR-TERM STRATEGIC INITIATIVES Timberland Sales Activity 12
Slide 13: Maximizing Shareholder Value
MAXIMIZING SHAREHOLDER VALUE 13
Slide 14: Recognizing and Creating Value Through Multifamily
RECOGNIZING AND CREATING VALUE THROUGH MULTIFAMILY Financing (60 - 70% LTV) Multifamily business model is to leverage our own investment and existing sites with capital from our partners to create and realize value Multifamily Development Ribelin Ranch - Austin, Texas Insert Site Map Units 289 units
Slide 15: Fiber Resources Highlights
FIBER RESOURCES HIGHLIGHTS Segment Earnings Reconciliation Q2 2010 vs. Q2 2011 Second Quarter 2011 Highlights: Sold 83,000 tons of fiber About 98% of land available leased for recreational purposes 15
Slide 16: Fiber Resources Segment Results
FIBER RESOURCES SEGMENT RESULTS 2nd Qtr 2011 2nd Qtr 2010 1st Qtr 2011 Fiber Sales Pulpwood Tons Sold 70,700 95,600 65,600 Average Pulpwood Price / Ton $9.22 $10.89 $9.18 Sawtimber Tons Sold 12,700 23,800 15,500 Average Sawtimber Price / Ton $15.69 $20.36 $16.98 Total Tons Sold 83,400 119,400 81,100
Slide 17: Mineral Resources Highlights
MINERAL RESOURCES HIGHLIGHTS Segment Earnings Reconciliation Q2 2010 vs. Q2 2011 Second Quarter 2011 Highlights: Executed exploration agreements on 28,500 net mineral acres in Louisiana Leased over 2,500 net mineral acres in Louisiana and Texas Five new oil and gas wells completed by exploration and
Slide 18: Mineral Resources Segment Results
MINERAL RESOURCES SEGMENT RESULTS Forestar's Share of Oil & Gas Production Q2 2010 - Q2 2011 Leasing, Seismic and Exploration Agreements Q2 2010 - Q2 2011 2nd Qtr 2011 2nd Qtr 2010 1st Qtr 2011 Leasing Activity Net Acres Leased 2,532 - 4,900 Avg. Bonus / Acre $187 - $343 Royalties* Natural Gas Produ
Slide 19: East Texas Drilling Activity
EAST TEXAS DRILLING ACTIVITY Note: Wells owned by third-party lessee / operator Acres Leased Available for Lease Held by Production Haynesville Well Permits Haynesville Drilling Activity Producing Bssr-Hysv Wells Waiting on Completion Forestar Royalty Interest Q2 2011 Bossier-Haynesville Activity In
Slide 20: Louisiana Minerals Activity
LOUISIANA MINERALS ACTIVITY Note: Wells owned by third-party lessee / operator Leasing: 2,500 acres leased (including Texas) $187 / acre Exploration Agreements: 28,500 net mineral acres Q2 2011 Activity Acres Leased Q2 2011 Acres Leased Prior to Q1 Available for Lease Held by Production Seismic Opti
Slide 21: Greatest Value from Every Acre
GREATEST VALUE FROM EVERY ACRE 21 Placed almost 67,000 net mineral acres in play in Louisiana and Texas Entitled 1,068 acre project near Atlanta, GA MSA Entered into definitive agreement to sell 50k acres of timberland for $75 million Disciplined acquisition of non-performing bank loan secured by re
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