Slide 1: Fourth Quarter and Full Year 2008 Financial Results
Fourth Quarter and Full Year 2008 Financial Results February 4, 2009
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: Maximize and Grow Long-Term Shareholder Value
Maximize and Grow Long-Term Shareholder Value Entitlement and Development of Real Estate Continued reductions in development reflective of housing market decline Realization of Value from Natural Resources Increased leasing activity and production volume Accelerated Growth through Strategic and Disc
Slide 4: 2008 Real Estate Value Creation
2008 Real Estate Value Creation Developed and Under Development Sold 1,060 residential lots - $48,500 / lot Sold 120 commercial acres - $232,400 / acre Invested $34.9 million in Cibolo Canyons mixed-use development located in San Antonio, Texas Entitlement Entitled five projects with over 2,500 acre
Slide 5: Cibolo Canyons
Cibolo Canyons Residential 1,747 lots - 537 sold* Multiple builders 1st and 2nd move-up, custom Empty nester / active adult, condo Commercial 145 acres - 64 sold* Multi-family and retail Resort and Golf Course JW Marriot's Largest Resort 1,002 rooms 140,000 sq. ft. meeting space 42,000 sq. ft. clubh
Slide 6: 2008 Mineral Resources Value Creation
2008 Mineral Resources Value Creation Royalty Interest Generated royalties: 1,363 mmcf of natural gas - $11.9 million Generated royalties: 88,000 barrels of oil - $9.4 million Leased Leased 61,500 acres - $24.9 million Optioned 17,000 acres - $1.6 million Delay rental payments - $2.0 million Availab
Slide 7: 2008 Fiber Resources Value Creation
2008 Fiber Resources Value Creation Sawtimber Harvesting 162,850 tons of sawtimber - $19.51 / ton - approximately 75% chip-n-saw Maximize and grow sawtimber values by reducing harvest levels given current market prices Pulpwood Harvesting 917,000 tons of pulpwood - $8.52 / ton Timber Assets Growing
Slide 8: Fourth Quarter and Full Year 2008 Results
Fourth Quarter and Full Year 2008 Results ($ in Millions, except per share data) 4th Qtr 2008 4th Qtr 2007 Full Year 2008 Full Year 2007 Net Income $1.7 $0.1 $12.0 $24.8 Diluted EPS $0.05 - $0.33 $0.70 Full year 2008 average diluted shares outstanding were 35.9 million
Slide 9: Segment Earnings
Segment Earnings Real estate segment earnings negatively impacted by impairment expense of $3.3 million in 4th Qtr. 2008 and $3.9 million in 4th Qtr. 2007 2008 Mineral Resources segment earnings include $24.9 million in bonus payments associated with leasing over 61,500 net mineral acres ($ in Milli
Slide 10: 4th Qtr 2008 Pipeline Status and Key Performance Indicators
4th Qtr 2008 Pipeline Status and Key Performance Indicators
Slide 11: Real Estate Pipeline - 4th Qtr 2008
Real Estate Pipeline - 4th Qtr 2008 Real Estate Undeveloped In Entitlement Process Entitled Developed and Under Development Total Acres* Undeveloped Land Owned 307,996 314,873 Ventures 6,877 314,873 Residential Owned 28,578 7,939 753 44,249 Ventures 1,080 4,641 1,258 44,249 Commercial Owned 4,062 1,
Slide 12: Real Estate Segment KPI's
Real Estate Segment KPI's 4th Qtr 2008 4th Qtr 2007 Full Year 2008 Full Year 2007 Residential Lot Sales * Lots Sold 259 309 1,060 1,707 Average Price / Lot $37,600 $45,900 $48,500 $52,900 Gross Profit / Lot $9,200 $12,600 $15,300 $19,400 Commercial Tract Sales * Acres Sold 28 23 120 198 Average Pric
Slide 13: Residential Lot Sales Activity
Residential Lot Sales Activity Historical residential lot sales activity have been principally located in major markets of Texas, resulting in steadily improving residential lot prices since 2004 * Excludes bulk sale of 117 lots at Parks of Deer Creek project located near Fort Worth, Texas during 20
Slide 14: 2008 Undeveloped Land Sales
2008 Undeveloped Land Sales Louisiana Georgia Alabama Texas Georgia - Ironstob Georgia - TEMCO 6,000 Acres - $4,800 per Acre - $29 Million
Slide 15: Enhanced Retail Land Sales Website
Enhanced Retail Land Sales Website Updated retail land sales website launched February 2, 2009 landforsale.forestargroup.com Website Attributes User-Friendly Navigation Seven property categories from homepage Advanced Search Capabilities Search/sort by location, property type and features, size, pri
Slide 16: Entitlement Performance
Entitlement Performance Note: Acres and lots are estimates and may vary Atlanta, GA Activity Entitlement Activity 17 Projects Entitled YE 2008 - - 6,420 acres - - 5,510 residential lots - - 746 commercial acres 5 Projects Entitled in 2008 - - 2,500 acres - - 1,050 residential lots - - 500 commercial
Slide 17: South Coweta Industrial Park
South Coweta Industrial Park Significant commercial value creation on low basis lands Industrial Park Attributes 195-Acre Commercial Development 2.0 mm sq. ft. industrial / distribution development Located Off I-85 in Coweta County, 35 Miles from Airport 35 miles north of Kia manufacturing plant in
Slide 18: Pickens School
Pickens School Pickens School Attributes 770 Acres Mixed-Use Development Located in Northeast Atlanta - Pickens County Entitlements Acres Use 177 Residential 414 Commercial 179 Green Space Commercial Zoned as "Highway Business" Includes office, retail, multi- family "Highway Business" zoning provide
Slide 19: Mineral Resources Segment KPI's
Mineral Resources Segment KPI's 4th Qtr 2008 4th Qtr 2007 Full Year 2008 Full Year 2007 Minerals Net Acres Leased 5,687 549 61,583 30,114 Avg. Bonus / Acre $300 $350 $405 $222 Natural Gas Produced (MMCF) 393.4 296.2 1,363.4 967.3 Average Price / MCF $8.65 $6.03 $8.76 $6.69 Oil Produced (Barrels) 21,
Slide 20: Fiber Resources Segment KPI's
Fiber Resources Segment KPI's 4th Qtr 2008 4th Qtr 2007 Full Year 2008 Full Year 2007 Fiber Sales Tons Sold 311,900 317,100 1,079,900 1,215,500 Average Price / Ton $11.19 $10.70 $10.17 $11.29 Recreational Leases (acres) 296,300 287,200 296,300 287,200 Segment Revenues ($ in Millions) $4.1 $3.6 $13.2
Slide 21: 2008 Year End Snapshot
2008 Year End Snapshot Real Estate 365,000 acres of low basis land owned directly or through ventures 108 total projects located in 10 states and 13 markets 25 projects, over 33,000 acres, currently in entitlement process 5 commercial & condo projects Radisson Hotel (Austin, TX) Palisades West - Com
Slide 22: Near Term Strategic Initiatives
Near Term Strategic Initiatives Generate sales across all lines of business (-) Reduce investment in development (-) Lower operating expenses ^ Increase free cash flow Our Focus: Maximizing Long-Term Shareholder Value - Cash Flow - Balance Sheet
Slide 23: Forestar
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