Forestar Group Inc · NYSE:FOR
Forestar — Q1 2015 Earnings Presentation
25 slides from Forestar's earnings presentation, May 6, 2015
Slide 1: First Quarter 2015 Financial Results
First Quarter 2015 Financial Results May 6, 2015
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: Segment Results Adversely Impacted Principally By Timing of Real Estate Sales and Lower Commodity Prices
Segment Results Adversely Impacted Principally By Timing of Real Estate Sales and Lower Commodity Prices • 1st quarter 2014 real estate segment results include $2.3 million in charges, pre‐tax, associated with additional costs at two multifamily venture projects • 1st quarter 2014 real estate segmen
Slide 4: Real Estate
Real Estate First Quarter 2015 Morgan Farms - Tennessee
Slide 5: First Quarter 2015 Real Estate Results Negatively Impacted By Lower Undeveloped Land Sales
First Quarter 2015 Real Estate Results Negatively Impacted By Lower Undeveloped Land Sales ($3.4) ($1.5) $23.6 $3.5 $2.3 ($14.9) ($0.5) $9.1 $0 $10 $20 $30 $40 Q1 2014 Multifamily and Income Producing Properties* Residential & Commercial Tract Sales Undeveloped Land Sales Lot Sales Opex Asset Impair
Slide 6: Lower Oil Prices Expected to Slow Texas Job Growth, But Real Estate Markets Well Positioned
Lower Oil Prices Expected to Slow Texas Job Growth, But Real Estate Markets Well Positioned With Low Inventories and Increased Affordability 6 Texas markets expected to experience slower job growth with decline in oil prices Texas Housing Inventories Below Equilibrium* 0.00 0.50 1.00 1.50 2.00 2.50
Slide 7: Delivering High-Quality Multifamily Projects and Building Pipeline of Future Development Opportunities
Delivering High-Quality Multifamily Projects and Building Pipeline of Future Development Opportunities Multifamily Development Projects Project Market % Complete Units FOR Ownership Expected Total Development Cost Expected Total FOR Contribution Eleven Austin 100% 257 100% $40 $25 Midtown Dallas 99%
Slide 8: First Quarter 2015 Real Estate Pipeline
First Quarter 2015 Real Estate Pipeline 8 Real Estate Undeveloped In Entitlement Entitled Developed & Under Development Total Acres Undeveloped Land Owned 71,910 76,449 Ventures 4,539 Residential Owned 21,762 7,670 512 30,990 Ventures 847 199 Commercial Owned 2,668 1,088 536 4,646 Ventures 237 117 T
Slide 9: Real Estate Business Focused on Delivering the Greatest Value From Every Acre
Real Estate Business Focused on Delivering the Greatest Value From Every Acre Maximizing Value Realization Capitalizing on housing markets by increasing lot margins • Average residential lot prices and margins at record levels • Over 1,200 residential lots under contract • Anticipate 2015 lot sales
Slide 10: Other Natural Resources
oh “ge oo : * be ae é Other Natural Resources = P First-Quarter 2015 Georgia
Slide 11: Harvesting Value From Timberland and Water Rights
Harvesting Value From Timberland and Water Rights Segment Earnings (Loss) Reconciliation Q1 2014 vs. Q1 2015 ($ in millions) ($0.5) ($0.4) $0.1 ($1.0) ($0.8) ($0.6) ($0.4) ($0.2) $0.0 Q1 2014 Water Sales Q1 2015 S e g m e n t ( L o s s ) Q1 2015 Highlights $0.1 million in earnings from existing grou
Slide 12: The Bakken - North Dakota
The Bakken - North Dakota The Bakken - North Dakota
Slide 13: Lower Oil Prices and Restructuring Costs Negatively Impacted Segment Results
Lower Oil Prices and Restructuring Costs Negatively Impacted Segment Results $0.8 $1.2 $1.5 ($1.6) ($1.4) ($13.7) ($2.9)($1.2) ($5.0) ($3.0) ($1.0) $1.0 $3.0 $5.0 $7.0 $9.0 $11.0 $13.0 $15.0 Q1 2014 Working Interest Volumes Exploration Costs Gain on Sales Impairment Costs Working Interest Pricing Op
Slide 14: Oil and Gas Capital and Cost Reduction Initiatives On-Track
Oil and Gas Capital and Cost Reduction Initiatives On-Track Oil and Gas Strategic Initiatives: Planned 50% reduction in operating expenses vs 2014** • Closed Fort Worth office • Reduced headcount by ~50% 2015 capital investments expected to be down significantly vs. 2014 • 2015 investments principal
Slide 15: Strategic Review Update
FORESTAR Strategic Review Update
Slide 16: Comprehensive Strategic Review Driven By Commitment To Maximize Long-Term Shareholder Value
Comprehensive Strategic Review Driven By Commitment To Maximize Long‐Term Shareholder Value Board, management and financial advisors continue to explore strategic alternatives to enhance shareholder value, including review of oil and gas business ̶ Concurrently, Company plans to reduce 2015 oil and
Slide 17: For questions, please contact:
For questions, please contact: 1a Torma Building Two, Sulte 500 Austin, TX 78746 512-433-5312 j|a@forestergroup.com FORESTAR
Slide 18: First Quarter 2015 - Segment KPI's - Earnings Reconciliations
First Quarter 2015 - Segment KPI's - Earnings Reconciliations Non-@. FORESTAR
Slide 19: Real Estate Segment KPI's
Real Estate Segment KPI’s Q1 2015 Q1 2014 Residential Lot Sales Lots Sold 289 974 Average Price / Lot* $76,200 $42,600 Gross Profit / Lot* $37,500 $16,300 Commercial Tract Sales Acres Sold 33 ----- Average Price / Acre $314,400 ----- Land Sales Acres Sold 731 9,329 Average Price / Acre $2,800 $2,100
Slide 20: Other Natural Resources Segment KPI's
Other Natural Resources Segment KPI’s Q1 2015 Q1 2014 Fiber Sales Pulpwood Tons Sold 27,500 28,200 Average Pulpwood Price / Ton $8.63 $9.66 Sawtimber Tons Sold 20,100 28,900 Average Sawtimber Price / Ton $21.50 $21.71 Total Tons Sold 47,600 57,100 Average Price / Ton $14.07 $15.77 Recreational Lease
Slide 21: Oil and Gas Segment KPI's
Oil and Gas Segment KPI’s Q1 2015** Q1 2014 Fee Leasing Activity Net Fee Acres Leased 800 1,700 Avg. Bonus / Acre $350 $340 Total Oil and Gas Interests* Oil Produced (Barrels) 270,000 156,900 Average Price / Barrel $40.18 $91.40 NGL Produced (Barrels) 23,700 15,000 Average Price / Barrel $19.28 $43.
Slide 22: First Quarter 2015 Earnings Reconciliation
First Quarter 2015 Earnings Reconciliation $8.3 ($8.2) ($9.4) $0.1 ($2.4) ($2.2) ($2.0) ($0.6) ($10.0) ($5.0) $0.0 $5.0 $10.0 Q1 2014 Other Natural Resources Real Estate Oil & Gas Interest, Taxes & Other Expenses Share Based Comp G&A Q1 2015 N e t I n c o m e ( L o s s ) Net Income Reconciliation Q1
Slide 23: Reconciliation of Non-GAAP Financial Measures (Unaudited)
Reconciliation of Non-GAAP Financial Measures (Unaudited) Forestar’s Segment EBITDA is a non-GAAP financial measure within the meaning of Regulation G of the Securities and Exchange Commission. Non-GAAP financial measures are not in accordance with, or an alternative to, U.S. Generally Accepted Acco
Slide 24: Reconciliation of Non-GAAP Financial Measures (Unaudited)
Reconciliation of Non-GAAP Financial Measures (Unaudited) Forestar’s Oil and Gas Segment EBITDAX is a non-GAAP financial measure within the meaning of Regulation G of the Securities and Exchange Commission. Non-GAAP financial measures are not in accordance with, or an alternative to, U.S. Generally
Slide 25: For questions, please contact:
For questions, please contact: 1a Torma Building Two, Sulte 500 Austin, TX 78746 512-433-5312 j|a@forestergroup.com FORESTAR