Forestar : Q2 FY 2026 Investor Presentation

Published: 2026-04-21 11:28:16 ET FOR

Published on 04/21/2026 at 11:28 am EDT

Q2 | 2026

Forestar Group Inc. ("Forestar" or "FOR") is a highly differentiated, pure-play, residential lot developer for the affordably-priced single-family home market

RETURNS FOCUSED

Track record of solid operational results

Operations in 64 markets across 24 states(1)

PRUDENT Fully-entitled projects with short durations

DISCIPLINED

Investing capital across a diverse, national footprint which mitigates risk

STRATEGIC

Strong relationship with D.R. Horton, the nation's largest homebuilder

model

EFFICIENT Capturing market share while maintaining a low overhead

LEADERSHIP

STRONG LIQUIDITY

Balance sheet provides financial and operational flexibility

FOR markets / states

Proven management team with significant land development experience

As of March 31, 2026

Earnings per diluted share of $0.63 on net income attributable to Forestar of $32.1 million

Pre-tax income increased 8% to $43.9 million, with a pre-tax profit margin of 11.7%

Revenues increased 7% to $374.3 million on 2,938 lots sold

Owned and controlled 94,400 lots at March 31, 2026

Lots contracted for sale of 24,100 lots representing $2.2 billion of future revenue at March 31, 2026

Return on equity of 9.6% for the trailing twelve months ended March 31, 2026

Net debt to capital(1) of 19.2%, with total liquidity of $1.0 billion

Consolidated Revenue ⁽²⁾

$351.0

$374.3

Q2 FY 2025 Q2 FY 2026

Liquidity ⁽²⁾

$792.0

$1,034.3

31%

Q2 FY 2025 Q2 FY 2026

Book Value Per Share

$32.36

$35.66

10%

Q2 FY 2025 Q2 FY 2026

Note: All comparisons are to the prior year quarter

Net debt to total capital consists of debt net of unrestricted cash divided by stockholders' equity plus debt net of unrestricted cash

$ shown in millions

Forestar is focused on a disciplined approach to creating long-term value

FY 2026 Priorities

FY 2026 Guidance

Balance pace and level of investment in-line with market conditions

Disciplined capital allocation while continuing to position Forestar for future growth

Expand market share within existing markets

Grow book value per share

Maintain strong balance sheet

Evaluate opportunistic M&A opportunities

Residential Lots Sales

14,000 - 14,500 Lots

Consolidated Total Revenues

$1.6 - $1.7 billion

Total Investment in Land and Land Development

~$1.4 billion

Note: Expectations are based on current market conditions as noted on the Company's Q2 FY2026 conference call on 4/21/26. 5

Strong Balance Sheet and Liquidity Position

1 Unique Return-Focused Lot

Manufacturing Business Model

Strategic Relationship With D.R. Horton

Proven Management Team With Decades of Real Estate Experience

Long-Term Market Share Gains

Homebuilders Preference to Buy Finished Lots

Intense Focus on Risk Mitigation

Geographically Diversified Lot Position

Forestar has built a unique lot manufacturing model that enables it to be a dependable supplier of lots to homebuilders, while producing solid risk-adjusted returns

Short duration, fully-entitled lot development projects

- asset turnover is fundamental to the business strategy

Large scale with national footprint and in-market depth - Forestar has more than 200 active projects across 64 markets and 24 states

Returns-focused, with strict underwriting criteria - all projects must have >15% return on average inventory(1) and return the entire phase 1 investment (including all land costs) in 36 months or less

Predictable operating results with strong profitability - pre-tax profit margin of 13.0% for Q2 TTM FY 2026

Strong liquidity and access to debt and equity capital - Forestar's capital structure is a key competitive advantage

(1) Return on average inventory is calculated as pre-tax income divided by average inventory over the life of a project

Long-term consistent supplier of finished lots across DHI's national footprint (126 markets in 36 states)

Integral component of DHI's operational strategy

Participate in value creation of FOR

BENEFITS TO DHI

Supports Forestar's national platform

Significant built-in demand for lots

Improved access to capital markets

Shared Services from DHI

BENEFITS TO FOR

SYMBIOTIC RELATIONSHIP

Alignment with the nation's largest builder provides support and stability in changing economic conditions

Most land developers lack the scale and access to capital to be consistent suppliers of lots to DHI across its national footprint

DHI is committed to owning no more than a 2-year supply of lots, while increasing its mix of controlled lots in inventory

D.R. Horton has a strong appetite for finished lots that continues even during potential market downturns

During the worst years of the last significant housing downturn, D.R. Horton closed ~17,000 to 20,000 homes annually, the majority of which were built on finished lots purchased from 3rd parties

Master Supply, Stockholder and Shared Services Agreements formalize the business relationship and protect FOR's interests(1)

DHI plans to maintain a significant ownership position in FOR over the long-term(2)

Relationship with DHI further strengthens FOR's competitive advantage

DHI's interests are aligned with FOR shareholders to ensure the profitable expansion of FOR's platform

Stockholder's Agreement and Shared Services Agreement summaries included in Appendix

D.R. Horton owns 62% of Forestar as of March 31, 2026 8

The Master Supply Agreement formalizes the business relationship with DHI as both companies identify real estate opportunities and protects FOR's interests via the Right of First Offer process

A Right of First Offer (ROFO) is very different than a Right of First Refusal (ROFR)

A ROFO agreement helps establish a fair market price/terms, whereas a ROFR is advantageous to the buyer by providing a "last look"

The ROFO provides DHI the "first look" on available lots at market terms set by Forestar

If FOR and DHI fail to agree on terms, FOR can offer the lots to other customers at similar terms offered to DHI

Lots Sourced by DHI

FOR must offer 100% of the lots sourced by DHI to DHI at current market terms

Lots Sourced by FOR

FOR must offer 50% of the lots in the first phase to DHI and 50% of the lots in any subsequent phase if DHI purchases at least 25% of the lots in the previous phase at current market terms

Lots Sourced by Third Parties

FOR offers the lots to the respective customer on third-party sourced development opportunities and is not contractually obligated to offer DHI the "first look"

Note: The Master Supply Agreement continues until the earlier of (i) the date which DHI owns less than 15% of voting shares of FOR or (ii) June 29, 2037; however, FOR may terminate the MSA at any time

when DHI owns less than 25% of the voting stock of Forestar 9

DHI's 30-year public track record provides a blueprint to FOR to achieve its own growth, consolidation and market share gains

1,400

1,200

1,000

800

600

400

200

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

14%

13%

12%

11%

10%

Source: Company filings, Census

Note: Periods represent full calendar year 10

Since D.R. Horton's investment in Forestar in late-2017, Forestar has significantly expanded its operations

Investment

Operational Platform

Operating Results

94,400

20,100

4.5x

Owned and Controlled Lots

2018 2026

$2,710

$498

5.5x

Real Estate

2018 2026

$ in millions

Market Count

2.5x

2018 2026

Employee Count

10x

406

2018 2026

TTM Lots Sold

13,378

1,279

CAGR 37%

10.5x

2018 2026

TTM Revenue

CAGR

$109 44%

15.5x

$1,708

2018 2026

Forestar has a visible path to capturing 5% market share within the highly-fragmented U.S. single-family residential lot development industry*

Annual Lot Deliveries

5.0%

2.1%

0.7%

>2.0x FOR's

current size

FY 2019 Market Share

FY 2025 Market Share

Current Target

*5% market share goal based on approximately 700,000 annual U.S. fee simple single-family homes started

DIVERSIFIED NATIONAL FOOTPRINT 64 MARKETS | 24 STATES

DHI states where FOR does not currently operate

Of total lot position at 03/31/26, 63,500 are owned and 30,900 are controlled through purchase contracts

*Although Forestar does not currently own lots in New Mexico, the Company is currently reviewing investment opportunities and expects to continue to have a presence in the state 13

Strategic

Strict underwriting requiring minimum 15% return on average inventory and return of the entire phase 1 investment (including all land costs) in 36 months or less

Diverse, national footprint lowers operational risks and mitigates the effects of local and regional economic cycles

Strong strategic relationship with D.R. Horton, the nation's largest volume homebuilder

Governance documents that formalize relationship with D.R. Horton and protect Forestar

Operational

Significant local knowledge and expertise

Primarily focused on developing lots for homes at affordable price points (the largest segment of the new home market)

Buy fully entitled, short duration projects with phased development, which is largely discretionary

Experienced leadership team

Financial

Robust analytical process to determine best capital allocation across markets

Demonstrated ability to manage spend and build liquidity during slower periods

Maintain a strong balance sheet and liquidity position including managing to a

≤40% net debt to capital ratio

Unsecured Company-level debt allows for operational flexibility

Earnest money deposits on sales contracts (at least 10% of contracted revenues)

Optioned Land/Lot Position as a

% of Total Owned & Controlled

Number of Years of Owned Land Based on TTM Closings

75%

61%

59%

42%

3.3

2.1

2.4

1.7

DHI - HB segment Average Public HB

Source: FactSet and respective Company SEC filings

Notes: Average Public Homebuilder (HB) data represents the land and lot positions of LEN, PHM, TOL, NVR, MTH, MHO, TMHC, TPH, and KBH For LEN and KBH, data is as of the periods ended 11/30

For TOL, data is as of the periods ended 1/31

Zonda New Home Lot Supply Index

12/31/17

6/30/18

12/31/18

6/30/19

12/31/19

6/30/20

12/31/20

6/30/21

12/31/21

6/30/22

12/31/22

6/30/23

12/31/23

6/30/24

12/31/24

6/30/25

12/31/25

125> - Significantly Oversupplied 115-125 Slightly Oversupplied 85-115 - Appropriately Supplied 75-85 - Slightly Undersupplied

<75 - Significantly Undersupplied

81.6 85

Source: Zonda

Note: The lot supply index values represent single-family vacant developed lot supply, lots that are ready to be built on, relative to equilibrium 16

Effective Interest Rate of Financing NAHB AD&C Financing Survey Index

12.1%

11.3%

10.4%

10.3%

10.1%

10.6%

10.8%

7.1%

9.8%

6.1%

4.6%

4.7%

10.0%

5.0%

12/31/21 12/31/22 12/31/23 12/31/24 12/31/25

conditions easing

conditions tightening

- (10)

(20)

(30)

(40)

(50)

(60)

12/31/15 12/31/17 12/31/19 12/31/21 12/31/23 12/31/25

Source: NAHB. The NAHB AD&C Financing Survey Index is derived from the share of respondents who rated the availability of new loans for land acquisition, land development and single-family construction.

The share of respondents who selected "worse" is subtracted from the share selecting "better" for each series, and the results are then averaged. 17

Investing in new projects while maintaining a disciplined and conservative approach to underwriting

Phased development intends to deliver finished lots at a pace that matches market demand, consistent with FOR's focus on capital efficiency and returns

Expect to invest approximately $1.4 billion in land acquisition and development in fiscal 2026 with the majority of investment targeted for land development

As of the Fiscal Year Ended As of the Quarter Ended

$1,378

Land Acquisition

$977

$199

$321

$595

$570

$1,057

$1,046

$1,148

$777

$1,616 $1,743

$1,400

$267

$340

$372

$300

$347

$415

$110

$305

$279

$ in millions

FY 2022 FY 2023 FY 2024 FY 2025 FY 2026E

$73 $72 $63

$46

$233

$284

3/31/25 6/30/25 9/30/25 12/31/25 3/31/26

Note: Expectations are based on current market conditions as noted on the Company's Q2 FY2026 conference call on 4/21/26. 18

Owned and controlled lot position supports future growth and market share gains; targeting a 3- to 4-year owned inventory of lots

Consistent with Forestar's focus on capital efficiency, its land and lot supply that is controlled via purchase contracts remains robust

Balance sheet and liquidity will be used to invest in opportunistic land purchases

96,500

Owned & Controlled Lot Position

63,500

57,400

57,800

64,200

68,400

18,600

30,900

38,700

32,300

37,500

96,100 105,900 94,400

76,400

64,200

Owned Lot Position by Source

FOR Sourced Lots

33,900

35,000

35,100

37,400

38,900

23,500

22,800

26,100

29,100

29,500

68,400 63,500

57,800 57,400

3/31/22 3/31/23 3/31/24 3/31/25 3/31/26

Contracted backlog is a strong indicator of FOR's ability to continue gaining market share in the highly fragmented lot development industry

Owned lots under contract of 24,100 lots or 38% of FOR's owned lot position

$209 million dollars of hard earnest money deposits secure these contracts, which are expected to generate approximately $2.2 billion dollars of future revenue

37% 38%

31%

26%

$1.3 billion

$1.6 billion

$2.2 billion

$2.3 billion

3/31/23 3/31/24 3/31/25 3/31/26

Total lots that DHI has under contract or the right of first offer to purchase of 41,000 at 3/31/26, 43,900 at 3/31/25, 34,300 at 3/31/24, and 31,500 at 3/31/23, respectively.

Disclaimer

Forestar Group Inc. published this content on April 20, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 21, 2026 at 15:27 UTC.