Forestar Group Inc · NYSE:FOR
Forestar — Q1 2009 Earnings Presentation
20 slides from Forestar's earnings presentation, May 6, 2009
Slide 1: First Quarter 2009 Financial Results
1 May 6, 2009 First Quarter 2009 Financial Results May 6, 2009
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: First Quarter 2009 Results
First Quarter 2009 Results 3 ($ in Millions, except per share data) 1st Qtr 2009 1st Qtr 2008 4th Qtr 2008 Net Income ($3.9) ($0.2) $1.7 Earnings Per Share - Basic and Diluted ($0.11) ($0.01) $0.05 1st Qtr 2009 weighted average basic shares outstanding were 35.7 million 1st Qtr 2009 financial result
Slide 4: Segment Earnings
Segment Earnings 4 ($ in Millions) 1st Qtr 2009 1st Qtr 2008 4th Qtr 2008 Real Estate $0.5 $3.5 $3.0 Mineral Resources 4.8 6.5 6.1 Fiber Resources 2.9 2.8 2.7 Total $ 8.2 $12.8 $11.8 Real estate segment earnings negatively impacted by $1.2 million associated with impairment charge and legal reserves
Slide 5: Results and Key Performance Indicators
5 May 6, 2009 1st Qtr 2009 Results and Key Performance Indicators
Slide 6: Maximizing Shareholder Value Strategy
Maximizing Shareholder Value 6 Strategy Near-Term Strategic Initiatives Real Estate Entitlement and Development Sell approximately 175,000 acres of HBU timberlands, use proceeds to: Reduce debt $150 million Repurchase up to 20% of outstanding common shares Natural Resources Value Realization Improve
Slide 7: Real Estate Pipeline
7 Real Estate Pipeline - 1st Qtr 2009 Note: Estimated acres and lots may vary * Excludes Forestar's 58% ownership interest in the Ironstob venture which controls approx. 16,000 acres of undeveloped land Real Estate Undeveloped In Entitlement Process Entitled Developed & Under Development Total Acres
Slide 8: Real Estate Segment KPIs
8 Real Estate Segment KPI's 1st Qtr 2009 1st Qtr 2008 4th Qtr 2008 Residential Lot Sales * Lots Sold 107 388 259 Average Price / Lot $72,400 $46,200 $37,600 Gross Profit / Lot $27,000 $17,300 $9,200 Commercial Tract Sales * Acres Sold 4 22 28 Average Price / Acre $215,600 $84,700 $265,900 Land Sales
Slide 9: Entitlement Activity - Q1 2009
9 Entitlement Activity - Q1 2009 Entitlements 25 Town Home / Multifamily acres 80 Commercial acres 105 Total acres Location I-20 and GA 100 in Haralson County, GA, 45 minutes west of Atlanta Economic Development Entrance adjacent to Honda transmission plant $150 million plant 440 employees Site Plan
Slide 10: Mineral Resources Segment KPIs
10 Mineral Resources Segment KPI's 1st Qtr 2009 1st Qtr 2008 4th Qtr 2008 Minerals Net Acres Leased 6,116 5,293 5,687 Average Bonus / Acre $347 $678 $300 Natural Gas Production (MMCF) 394.7 255.9 393.4 Average Price / MCF $6.16 $6.38 $8.65 Oil Production (Barrels) 26,200 19,400 21,400 Average Price
Slide 11: Fiber Resources Segment KPIs
11 Fiber Resources Segment KPI's 1st Qtr 2009 1st Qtr 2008 4th Qtr 2008 Fiber Sales Pulpwood Tons Sold 206,564 173,859 264,484 Average Pulpwood Price / Ton $8.15 $7.83 $9.34 Sawtimber Tons Sold 90,719 35,382 47,426 Average Sawtimber Price / Ton $22.84 $19.11 $21.50 Total Tons Sold 297,300 209,200 31
Slide 12: Enhancing Shareholder Value
Enhancing Shareholder Value Near-Term Strategic Initiatives Sell 175,000 acres of HBU timberland, use proceeds to: Reduce debt $150 million Repurchase up to 20% of outstanding stock Generate Positive Cash Flow 75% reduction in investment in real estate development Reduced G&A and operating expenses
Slide 13: Sale to Hancock Timber Resource Group
Sale to Hancock Timber Resource Group 13 75,027 acres $1,600 per acre $120 million Forestar will retain mineral rights
Slide 14: HBU Timberland Sale Initiatives
HBU Timberland Sale Initiatives 14 HBU timberland sales are structured to maximize interest across buyer segments Acres (in thousands) Acres (in thousands) Acres (in thousands) Market Segment To be Sold In Process Under Contract Institutional 75 - 125 50 75 Special Use / Conservation 40 - 50 28 - Re
Slide 15: Forestar Land Stratification
15 Forestar Land Stratification
Slide 16: Reduce Investment in Development
Reduce Investment in Development Targeted 75% Reduction in 2009* 2006 - 2008 Average ~ $90 million per year 16 Investment in Development Q1 2009 ($ in Millions) 1st Qtr 2009 1st Qtr 2008 Change Investment in Development $7.6 $20.6 ($13.0) Contribution to Cibolo Resort ($1.5) ($1.5) Net Investment in
Slide 17: Lowering Costs
Lowering Costs G&A expenses down nearly 12% in Q1 2009* vs. Q1 2008 Reduce operating and general and administrative costs Headcount reductions in Q1 2009 Current headcount = 93 Elimination of "start-up" professional and contract services, $1.3 million annualized 17 * Excludes costs paid to outside a
Slide 18: Improve Minerals Transparency
18 Improve Minerals Transparency Value Chain Acres Disclosure Present Value Held by Production 26,000 Net Proven Gas - MMCF Oil - Barrels Proven Reserves Leased 120,000 Drilling Activity Acres by Play Reserve Additions Available for Lease 476,000 Leasing Activity Acres by Play Future Bonus + + = Net
Slide 19: Creating Shareholder Value
Creating Shareholder Value 19 Strategy Near-Term Strategic Initiatives Real Estate Entitlement and Development Sell approximately 175,000 acres of HBU timberlands, use proceeds to: Reduce debt $150 million Repurchase up to 20% of outstanding common shares Natural Resources Value Realization Improve
Slide 20: Forestar
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