Note 16 — Segment Information

We manage our operations through three business segments: real estate, mineral resources and fiber resources. Real estate secures entitlements and develops infrastructure on our lands for single-family residential and mixed-use communities, and manages our undeveloped land and income producing properties, primarily a hotel and a multifamily property. Mineral resources manages our oil, natural gas and water interests. Fiber resources manages our timber and recreational leases.

Assets allocated by segment are as follows:


	Second
	Quarter-End		Year-End
	2011		2010
	(In thousands)
Real estate	$	694,686	$	669,363
Mineral resources		14,580		13,399
Fiber resources		16,201		18,258
Assets not allocated to segments		99,688		88,304

Total assets	$	825,155	$	789,324

We evaluate performance based on segment earnings (loss) before unallocated items and income taxes. Segment earnings (loss) consist of operating income, equity in earnings (loss) of unconsolidated ventures and net (income) loss attributable to noncontrolling interests. Items not allocated to our business segments consist of general and administrative expense, share-based compensation, gain on sale of assets, interest expense and other non-operating income and expense. The accounting policies of the segments are the same as those described in the accounting policy note to the consolidated financial statements. Our revenues are derived from our U.S. operations and all of our assets are located in the U.S. In first six months 2011, no single customer accounted for more than 10 percent of our total revenues.

Segment revenues and earnings are as follows:


	Second Quarter						First Six Months
	2011			2010			2011			2010
				(In thousands)
Revenues:
Real estate	$	19,615		$	21,549		$	40,754		$	38,797
Mineral resources		4,580			4,606			11,913			11,733
Fiber resources		1,290			1,982			2,658			3,965

Total revenues	$	25,485		$	28,137		$	55,325		$	54,495


Segment earnings:
Real estate	$	1,007		$	2,454		$	3,582		$	2,766
Mineral resources		3,102			4,266			8,700			10,444
Fiber resources		704			1,085			1,344			2,528

Total segment earnings		4,813			7,805			13,626			15,738
Items not allocated to segments ^(a)		(11,562	)		(10,916	)		(23,560	)		(23,336	)

Income (loss) before taxes attributable to Forestar Group Inc.	$	(6,749	)	$	(3,111	)	$	(9,934	)	$	(7,598	)


^(a)		Items not allocated to segments consist of:


	Second Quarter						First Six Months
	2011			2010			2011			2010
				(In thousands)
General and administrative expense	$	(7,081	)	$	(5,040	)	$	(10,997	)	$	(9,578	)
Share-based compensation expense		148			(2,019	)		(3,952	)		(5,553	)
Interest expense		(4,653	)		(4,103	)		(8,662	)		(8,649	)
Other non-operating income		24			246			51			444

	$	(11,562	)	$	(10,916	)	$	(23,560	)	$	(23,336	)

Second quarter and first six months 2011, general and administrative expense includes $2,730,000 associated with proposed private debt offerings that we withdrew as a result of deterioration of the terms available to us in the capital markets.