First Quarter 2014 Financial Results May 7, 2014 Growing Forward Through Strategic and Disciplined Investment and Increasing Returns
Real Estate Driving Segment Operating Results 1st Quarter 1st Quarter ( in Millions, except per share data) 2014 2013 Net Income 8.3 4.0 Earnings Per Share 0.19 0.11 Segment Earnings (Loss): Real Estate 23.6 19.4 Oil and Gas…
Maintaining Financial Strength and Flexibility While Executing Growth Strategy Nearly 300 million in available liquidity at Debt Maturity Schedule Q1 2014 201 Evaluating high-yield offering to refinance existing 200 million term…
Real Estate First Quarter 2014 Highlights Building Momentum By Accelerating Real Estate Sales and Building a Solid Multifamily Pipeline 5
Real Estate Results Reflect Steady Demand and Forestars Ability to Deliver Q1 2014 Sales Highlights Segment Earnings Reconciliation Q1 2013 vs. Q1 2014 Residential Lots 974 lots ( in millions) Up 118% vs Q1 2013 Margins 7% higher vs…
Real Estate Capitalizing on Housing Recovery Annual Lot Sales & Avg. Lot Margin 2006 Peak Sales = 3,600 lots 2,500 30,000 Texas 80% of Q1 2014 lot profit 25,000 2,000 1,883 Atlanta recovering 400 lot sales in Q1 20,000 2014, 33…
Disciplined Investing Developing Lots in Line with Builder Demand Acquisitions Pipeline Activity Uses (Q2 12 - Q1 14) (Acres) 1 Lot Development Expenditures By Region Q1 2014 2,000 819 residential acres 2,512 lots Total…
Lantana - Acquisition of Partner Interest Acquired interest of JV partner in Lantana Vanderbilt community for 8 million Lantana University Located north of Dallas and Ft. Worth close to exemplary schools, major employers, a wide…
Nashville Morgan Farms Acquired 280 acre entitled site in Brentwood, Tennessee, suburb south of Nashville, in late 2012 for 7 million Vanderbilt 173 planned lots in luxury community with three University housing price points:…
Building Solid Pipeline of Multifamily Development Opportunities (Proforma) Proforma Project Cash Flows Expected Forestar ( in millions) Cash Flows Total Expected FOR % FOR Development Project FOR Total Cash Project Market…
Accelerating Multifamily Value Creation Through Development of Attractive Site in Nashville, TN 3.7 acre site purchased Q3 2012 320-unit Class A luxury multifamily project with studio, one and two bedroom units Extensive amenities…
Building Multifamily Pipeline Through Acquisition of Premier Sites Pressler Park Austin, Texas Pressler Park Preliminary Rendering Purchased 2.3 acre site for 11.7 million Vanderbilt University Planned 280-unit Class A luxury…
Real Estate Business Capitalizing on Housing Recovery Forestar Real Estate Revenues (Excluding Timberland & Multifamily Revenues) 45 Accelerating Value Realization 40 35 Capitalizing on housing recovery by driving residential…
Other Natural Resources First Quarter 2014 Highlights Building Momentum Through Sustainable Harvests and Maximizing Recreational Lease Activity 15
Other Natural Resources Segment Results Segment Earnings Reconciliation Q1 2014 Highlights Q1 2013 vs. Q1 2014 ( in millions) Sold over 57,000 tons of fiber 2.0 1.3 Average fiber pricing 15.77 per ton, up over 9% vs. Q1 2013…
Oil and Gas First Quarter 2014 Highlights Building Momentum By Driving Leasing and Exploration to Increase Production and Reserves 17
Severe Weather and Lower Royalties Impact Results 8.0 Segment Earnings Reconciliation Q1 2014 Highlights Q1 2013 vs. Q1 2014 ( in millions) 6.0 Working interest volume up 27% vs. Q1 2013 Segment Earnings 5.1 Working interest…
Core Bakken Locations Provide Significant Value Creation Potential 7,600 net mineral acres - Bakken / Three Forks Bakken / Three Forks Percentile Ranked Production (60-90 Days) Bakken / Three Forks Leasehold* Net mineral acres leased…
Bakken / Three Forks Drilling Activity Accelerating Investment and Value Realization Bakken / Three Forks Leasehold Interests Bakken/Three Forks 160 Producing Wells*** 2013 Gross Wells +57 140 Producers Added During 2013 44 120…
Bakken / Three Forks Wells Expected to Generate Favorable Risk-Adjusted Returns, Exceed Hurdle Bakken/Three Forks Well Illustrative Example Drilling and Completion Volumes, Cumulative Cash Flow and Earnings Bakken/Three Forks * EUR…
Kansas/Nebraska: Central Kansas Uplift & Western Kansas Plays Shallow Conventional Statistical Play Kansas/Nebraska Acreage Position Kansas / Nebraska Leasehold Interests Key Metrics Net Mineral Acres Leased as of Q1 2014…
Kansas / Nebraska Drilling Activity Accelerating Production and Value Growth Kansas/Nebraska Well Illustrative Example Drilling and Completion Volumes, Cumulative Cash Flow and Earnings * 1,000 8 Kansas / Nebraska Leasehold Interests…
Texas Development Activity Drilling PUDs Texas Panhandle: Bussard Cameron and JK Cameron Wells Target - Cleveland Single Well Parameters: Total Depth: 8,000TVD; 13,000MD Horizontal Well EUR: 150 MBO + 675 MMCF Well Cost: 4.5 MM…
Focused on Increasing Earnings and Returns Development of existing locations Evaluating non-core asset sales Reduced capital plan for G&G and exploration Building Momentum By Accelerating Value Realization and Growing Net Asset…
Strategic Initiatives Update Building Momentum By Accelerating Value Realization, Optimizing Transparency and Growing Net Asset Value 27
Strategic Initiative: Growing FORward Growing Long-Term Shareholder Value Accelerating Total Segment EBITDA Growing Through Strategic and ( in millions) 200 Disciplined Investment 117 Development of Existing Locations Acquisitions…
2014 Capital Plan Weighted on Existing Communities and Locations Capital ( in millions) Segment 2014E 2014E Q1 Actual Orginal Revised Real Estate 200 175 - 200 52 Oil and Gas 200 125 - 135 21 Total 400 300 - 335 73 Reduction…
Delivering Shareholder Value Through Execution of Strategic Initiatives Growing Forward Initiatives On Track: Vanderbilt University Disciplined investment in opportunities Invested 73 million in Q1 2014 Divesting 100 million of…
First Quarter 2014 Financial Results For questions, please contact: Anna Torma SVP Corporate Affairs Forestar Group Inc. 6300 Bee Cave Road Building Two, Suite 500 Austin, TX 78746 512-433-5312 annatormaforestargroup.com 31
First Quarter 2014 Financial Results First Quarter 2014 Appendix - Segment KPIs - Earnings Reconciliations - Reconciliation of Non-GAAP Financial Measures 32
Real Estate Segment KPIs Q1 Q1 2014 2013 Residential Lot Sales Lots Sold 974 446 Average Price / Lot 42,600 51,900 Gross Profit / Lot 16,300 21,100 Commercial Tract Sales Acres Sold -- 3 Average Price / Acre -- 382,700 Land…
Oil and Gas Segment KPIs Q1 Q1 2014 2013 Fee Leasing Activity Net Fee Acres Leased 1,741 310 Avg. Bonus / Acre 343 316 Total Oil and Gas Interests* Oil Produced (Barrels) 172,000 147,900 Average Price / Barrel 87.18 89.19 Natural…
Other Natural Resources Segment KPIs Q1 Q1 2014 2013 Fiber Sales Pulpwood Tons Sold 28,200 120,600 Average Pulpwood Price / Ton 9.66 9.76 Sawtimber Tons Sold 28,900 70,900 Average Sawtimber Price / Ton 21.71 22.36 Total Tons…
First Quarter 2014 Earnings Reconciliation Net Income Reconciliation Net Income Per Share Reconciliation Q1 2013 vs. Q1 2014 Q1 2013 vs. Q1 2014 ( in millions) 15.0 2.7 0.40 0.06 6.6 10.0 0.30 0.15 (2.8) 8.3 (1.2) (0.4) (0.2)…
Reconciliation of Non-GAAP Financial Measures (Unaudited) Forestars Total 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…
Reconciliation of Non-GAAP Financial Measures (Unaudited) Forestars 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…
Reconciliation of Non-GAAP Financial Measures (Unaudited) Forestars 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…
First Quarter 2014 Financial Results For questions, please contact: Anna Torma SVP Corporate Affairs Forestar Group Inc. 6300 Bee Cave Road Building Two, Suite 500 Austin, TX 78746 512-433-5312 annatormaforestargroup.com 40
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