Exhibit 99.1
NEWS
RELEASE
FOR IMMEDIATE RELEASE
CONTACT: Anna E. Torma
(512) 433-5312
FORESTAR GROUP INC. REPORTS
THIRD QUARTER 2012 RESULTS
Accelerating Value Realization, Growing Through Strategic Investments and Delivering the Greatest Value from Every Acre
AUSTIN, TEXAS, November 7, 2012—Forestar Group Inc. (NYSE: FOR) today reported a third quarter 2012 net loss of approximately ($0.7) million, or ($0.02) per share, compared with third quarter 2011 net income of approximately $36.4 million, or $1.02 per diluted share outstanding. Third quarter 2012 results include a pre-tax gain of approximately $10.2 million, or $0.19 per share, after-tax, from the sale of the Broadstone Memorial multifamily community in Houston. In addition, third quarter 2012 results include after-tax expenses of approximately ($2.1) million, or ($0.06) per share, associated with the acquisition of CREDO Petroleum Corporation, and an after-tax loss of ($2.9) million, or ($0.08) per share, associated with the extinguishment of debt related to amendment and extension of our term loan. Third quarter 2011 result included a gain of approximately $1.12 per share, after-tax, from the sale of about 57,000 acres of timberland for approximately $87 million.
Third quarter 2012 net income excluding special items was $4.3 million, or $0.12 per share.* Third quarter 2012 special items include approximately $5.0 million or $0.14 per share, after-tax, principally associated with expenses related to the acquisition of Credo Petroleum and loss on extinguishment of debt.
| | 3rd Qtr. 2012 | | 3rd Qtr. 2011 | |
Net income (loss) per share | | $ | (0.02 | ) | $ | 1.02 | |
| | | | | |
Special items: | | | | | |
Credo acquisition expenses | | $ | 0.06 | | $ | — | |
Loss on extinguishment of debt and debt offering expenses | | $ | 0.08 | | 0.01 | |
Gain on sale of timberland | | — | | $ | (1.12 | ) |
Total special items | | $ | 0.14 | | $ | (1.11 | ) |
| | | | | |
Net income (loss) per share before special items | | $ | 0.12 | | $ | (0.09 | ) |
*These are Non-GAAP financial measures. The reconciliation between GAAP and Non-GAAP measures is provided in the tables following this press release, and on the investor relations section of the company’s website.
“During third quarter we completed the acquisition of CREDO Petroleum, which is expected to generate attractive returns and additional value for shareholders, and provide a platform to accelerate value realization of our mineral assets. In addition, we finished the quarter with a solid balance sheet and over $170 million in available liquidity. Oil production remains well above 2011 levels and we are seeing renewed interest in mineral leasing associated with exploration for oil and liquids. Housing market conditions remain relatively steady and we continue to build a solid pipeline of multifamily development properties. In addition, we are generating significant cash flow and solid returns from the sale of our stabilized multifamily assets,” said Jim DeCosmo, president and chief executive officer of Forestar Group. “We are well positioned to accelerate value realization, capitalize on strategic growth opportunities and grow net asset value.”
Third Quarter Highlights
Strategic Initiatives
· Completed the acquisition of CREDO Petroleum in an all cash transaction for $14.50 per share, representing an equity purchase price of $146 million
Forestar manages its operations through three business segments: Mineral Resources, Real Estate and Fiber Resources.
MINERAL RESOURCES
· Oil production up over 63% compared with third quarter 2011, and up over 12% compared with second quarter 2012
· Leased over 3,100 net mineral acres for over $1,100 per acre
· 542 producing gross wells operated by exploration and production lessees, up 32 gross wells compared with third quarter 2011
Mineral Resources Segment Financial Results:
($ in millions) | | 3Q 2012 | | 3Q 2011 | | 2Q 2012 | |
| | | | | | | |
Segment Revenues | | $ | 10.5 | | $ | 5.9 | | $ | 7.1 | |
| | | | | | | |
Segment Earnings | | $ | 6.1 | | $ | 3.6 | | $ | 3.9 | |
Mineral resources segment earnings increased in third quarter 2012 compared with third quarter 2011 and second quarter 2012 principally due to higher lease bonus revenues received and increased oil production, which more than offset lower oil and gas pricing and increased costs.
2
REAL ESTATE
· Sold 269 fully developed residential lots at an average price of $54,100 per lot, with average lot prices up 17% compared with third quarter 2011
· 1,294 lots under option contracts
· Sold 18 commercial acres for approximately $134,000 per acre
· Sold Broadstone Memorial, a 401-unit multifamily property in Houston for over $56 million, generating approximately $30 million in cash and over $26 million in debt reduction
· Purchased a multifamily site in Nashville, TN for approximately $11.4 million
Real Estate Segment Financial Results:
($ in millions) | | 3Q 2012 | | 3Q 2011 | | 2Q 2012 | |
| | | | | | | |
Segment Revenues | | $ | 27.1 | | $ | 19.1 | | $ | 26.6 | |
| | | | | | | |
Segment Earnings (Loss) | | $ | 12.7 | | $ | (4.3 | ) | $ | 7.7 | |
Third quarter 2012 real estate segment earnings were higher compared with third quarter 2011 principally due to a $10.2 million pre-tax gain associated with the previously announced sale of the Broadstone Memorial multifamily community located in Houston. In addition, third quarter 2012 real estate segment results include approximately $1.3 million in earnings associated with the sale of 18 commercial acres and $1.1 million in earnings associated with a loan secured by a mixed-use community in Houston.
Third quarter 2011 real estate segment earnings include $3.4 million in charges principally related to environmental remediation activities at our San Joaquin River project located near Antioch, California.
FIBER RESOURCES
· Sold approximately 197,400 tons of fiber - recreational leasing remains strong
Fiber Resources Segment Financial Results:
($ in millions) | | 3Q 2012 | | 3Q 2011 | | 2Q 2012 | |
| | | | | | | |
Segment Revenues | | $ | 3.0 | | $ | 1.3 | | $ | 1.5 | |
| | | | | | | |
Segment Earnings | | $ | 1.8 | | $ | 0.5 | | $ | 0.6 | |
Third quarter 2012 fiber resources segment earnings increased compared with third quarter 2011 principally due to increased fiber sales activity and higher pricing. Recreational leasing activity remained strong during third quarter, with almost 99% of available land leased for recreation.
3
OUTLOOK
“We continue to generate momentum through our oil and gas strategic initiatives — increasing exploration, production and reserves. Drilling activity in East Texas and Louisiana is focused on oil and liquids principally related to the Austin Chalk and Wilcox formations. The acquisition of CREDO Petroleum Corporation is excpected to create significant increases in production and reserves, and expand our ability to report additional reserve categories.”
“Residential real estate fundamentals in Texas remain favorable, with relatively stable demand and low levels of desirable inventory. Communities in good locations continue to experience lot demand and our backlog remains strong. Our multifamily development pipeline continues to grow as we purchased a multifamily site in Nashville, Tennessee for approximately $11.4 million during third quarter. Following quarter-end, our venture closed the sale of Las Brisas, a stabilized multifamily community located in Austin, Texas, generating almost $10 million in proceeds to Forestar. As a result, we have generated approximately $40 million in cash flow in 2012 from the sale of two stabilized multifamily communities.”
“Forestar is well positioned to take advantage of strategic growth opportunities and we are committed to delivering the greatest value from every acre,” concluded Mr. DeCosmo.
The Company will host a conference call on November 7, 2012 at 2:00 pm ET to discuss results of third quarter 2012. The meeting may be accessed through webcast or conference call. The webcast may be accessed through Forestar’s Internet site at www.forestargroup.com. To access the conference call, listeners from North America should dial 1-800-901-5213 at least 15 minutes prior to the start of the call. Those wishing to access the call from outside North America should dial 1-617-786-2962. The password is Forestar. Replays of the call will be available for two weeks following the live call and can be accessed at 1-888-286-8010 in North America and at 1-617-801-6888 outside North America. The password for the replay is 71438673.
About Forestar Group
Forestar Group Inc. operates in three business segments: real estate, mineral resources and fiber resources. At the end of third quarter 2012, the real estate segment owns directly or through ventures over 143,000 acres of real estate located in nine states and thirteen markets in the U.S. The real estate segment has 16 real estate projects representing approximately 27,600 acres currently in the entitlement process, and 72 entitled, developed and under development projects in seven states and eleven markets encompassing over 14,450 acres, comprised of almost 23,900 planned residential lots and 2,400 commercial acres. The mineral resources segment includes approximately 735,000 net acres of oil and gas mineral interests, with approximately 593,000 acres of fee ownership located principally in Texas, Louisiana, Alabama, and Georgia and over 142,000 net acres of leasehold and overriding royalty interests principally located in Nebraska, Kansas, Oklahoma, North Dakota and Texas. These leasehold interests include approximately 6,000 net mineral acres in the core of the prolific Bakken and Three Forks formations. In addition, the mineral resources segment owns a 45% nonparticipating royalty interest in groundwater produced or withdrawn for commercial purposes from approximately 1.4 million acres in Texas, Louisiana, Georgia and Alabama and about 17,800 acres of groundwater leases in central Texas. The fiber resources segment includes the sale of wood fiber and management of our recreational leases. Forestar’s address on the World Wide Web is www.forestargroup.com.
4
Forward Looking Statements
This release contains “forward-looking statements” within the meaning of the federal securities laws. Forward-looking statements are typically identified by words or phrases such as “will,” “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “target,” “forecast,” and other words and terms of similar meaning. 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 uncertainties could cause our actual results to differ significantly from the results discussed in the forward-looking statements, including our ability to achieve the synergies and value creation contemplated by the merger with Credo, our ability to promptly and effectively integrate Credo’s businesses, and the diversion of management time on merger-related matters. Other factors and uncertainties that might cause such differences include, but are not limited to: general economic, market, or business conditions; changes in commodity prices; the opportunities (or lack thereof) that may be presented to us and that we may pursue; fluctuations in costs and expenses including development costs; demand for new housing, including impacts from mortgage credit availability; lengthy and uncertain entitlement processes; cyclicality of our businesses; accuracy of accounting assumptions; competitive actions by other companies; changes in laws or regulations; and other factors, many of which are beyond our control. Except as required by law, we expressly disclaim any obligation to publicly revise any forward-looking statements contained in this news release to reflect the occurrence of events after the date of this news release.
5
FORESTAR GROUP INC.
(UNAUDITED)
Business Segments
| | Third Quarter | | First Nine Months | |
| | 2012 | | 2011 | | 2012 | | 2011 | |
| | (In thousands,
except per share) | | (In thousands,
except per share) | |
| | | | | | | | | |
Revenues | | | | | | | | | |
Real estate | | $ | 27,115 | | $ | 19,060 | | $ | 71,684 | | $ | 59,814 | |
Mineral resources | | 10,479 | | 5,871 | | 27,053 | | 17,784 | |
Fiber resources | | 3,016 | | 1,310 | | 5,277 | | 3,968 | |
Total revenues | | $ | 40,610 | | $ | 26,241 | | $ | 104,014 | | $ | 81,566 | |
| | | | | | | | | |
Segment earnings (loss) | | | | | | | | | |
Real estate | | $ | 12,688 | | $ | (4,266 | ) | $ | 31,931 | | $ | (684 | ) |
Mineral resources | | 6,091 | | 3,592 | | 15,919 | | 12,292 | |
Fiber resources | | 1,798 | | 446 | | 2,782 | | 1,790 | |
Total segment earnings (loss) | | 20,577 | | (228 | ) | 50,632 | | 13,398 | |
Items not allocated to segments: | | | | | | | | | |
General and administrative expense (a) | | (8,000 | ) | (4,827 | ) | (19,482 | ) | (15,824 | ) |
Share-based compensation income (expense) | | (6,327 | ) | 3,553 | | (11,491 | ) | (399 | ) |
Gain on sale of assets | | 16 | | 61,784 | | 16 | | 61,784 | |
Interest expense | | (8,094 | ) | (4,271 | ) | (15,649 | ) | (12,933 | ) |
Other corporate non-operating income | | 47 | | 26 | | 158 | | 77 | |
Income (loss) before taxes | | (1,781 | ) | 56,037 | | 4,184 | | 46,103 | |
Income tax (expense) benefit | | 1,078 | | (19,609 | ) | (1,274 | ) | (16,069 | ) |
Net income (loss) attributable to Forestar Group Inc. | | $ | (703 | ) | $ | 36,428 | | $ | 2,910 | | $ | 30,034 | |
| | | | | | | | | |
Net income (loss) per common share: | | | | | | | | | |
Basic | | $ | (0.02 | ) | $ | 1.03 | | $ | 0.08 | | $ | 0.85 | |
Diluted | | $ | (0.02 | ) | $ | 1.02 | | $ | 0.08 | | $ | 0.84 | |
| | | | | | | | | |
Weighted average common shares outstanding (in millions): | | | | | | | | | |
Basic | | 35.2 | | 35.5 | | 35.2 | | 35.5 | |
Diluted | | 35.2 | | 35.8 | | 35.4 | | 35.9 | |
| | Third Quarter | | | | | |
Supplemental Financial Information: | | 2012 | | 2011 | | | | | |
| | (In thousands) | | | | | |
| | | | | | | | | |
Cash and cash equivalents | | $ | 10,279 | | $ | 29,121 | | | | | |
| | | | | | | | | |
Borrowings under credit facility | | $ | 227,000 | | $ | 130,000 | | | | | |
Other debt (b) | | 49,651 | | 93,697 | | | | | |
Total debt | | $ | 276,651 | | $ | 223,697 | | | | | |
(a) Third quarter and first nine months 2012 general and administrative expenses include approximately $3.2 million and $5.7 million respectively in costs associated with the acquisition of CREDO Petroleum Corporation. Third quarter and first nine months 2011 general and administrative expenses include $0.5 million and $3.2 million respectively paid to outside advisors related to private debt offerings which were withdrawn due to the deterioration in terms available to us in the capital markets.
(b) Consists principally of consolidated venture non-recourse debt.
6
FORESTAR GROUP INC.
MINERAL RESOURCES SEGMENT
PERFORMANCE METRICS
| | Third Quarter | | First Nine Months | |
| | 2012 | | 2011 | | 2012 | | 2011 | |
Leasing Activity from Owned Mineral Interests | | | | | | | | | |
Acres Leased | | 3,120 | | 380 | | 3,900 | | 7,700 | |
Average Bonus / Acre | | $ | 1,130 | | $ | 265 | | $ | 975 | | $ | 288 | |
Delay Rentals | | $ | 592,800 | | $ | 252,800 | | $ | 2,154,600 | | $ | 479,300 | |
Oil & Gas Production | | | | | | | | | |
Royalty Interests(1) | | | | | | | | | |
Gross Wells | | 542 | | 510 | | 542 | | 510 | |
Oil Production (Barrels) | | 62,300 | | 41,600 | | 179,900 | | 99,500 | |
Average Oil Price ($ / Barrel) | | $ | 75.00 | | $ | 97.79 | | $ | 88.29 | | $ | 94.32 | |
Natural Gas Production (MMcf) | | 411.1 | | 402.6 | | 1,241.5 | | 1,226.4 | |
Average Natural Gas Price ($ / Mcf) | | $ | 1.86 | | $ | 3.11 | | $ | 2.11 | | $ | 2.70 | |
BOE Production(2) | | 130,800 | | 108,700 | | 386,800 | | 303,900 | |
Average Price ($ / BOE) | | $ | 41.55 | | $ | 48.97 | | $ | 47.84 | | $ | 41.79 | |
Working Interests (3) | | | | | | | | | |
Gross Wells | | 10 | | 8 | | 10 | | 8 | |
Oil Production (Barrels) | | 6,700 | | 700 | | 19,900 | | 2,700 | |
Average Oil Price ($ / Barrel) | | $ | 83.35 | | $ | 99.78 | | $ | 96.96 | | $ | 90.96 | |
Natural Gas Production (MMcf) | | 15.3 | | 5.4 | | 57.6 | | 22.1 | |
Average Natural Gas Price ($ / Mcf) | | $ | 2.74 | | $ | 5.16 | | $ | 3.16 | | $ | 4.91 | |
BOE Production(2) | | 9,300 | | 1,600 | | 29,500 | | 6,400 | |
Average Price ($ / BOE) | | $ | 64.98 | | $ | 61.27 | | $ | 71.59 | | $ | 55.60 | |
Total Oil & Gas Interests | | | | | | | | | |
Gross Wells | | 542 | | 510 | | 542 | | 510 | |
Oil Production (Barrels) | | 69,000 | | 42,300 | | 199,800 | | 102,200 | |
Average Oil Price ($ / Barrel) | | $ | 75.81 | | $ | 97.83 | | $ | 89.15 | | $ | 94.23 | |
Natural Gas Production (MMcf) | | 426.4 | | 408.0 | | 1,299.1 | | 1,248.4 | |
Average Natural Gas Price ($ / Mcf) | | $ | 2.24 | | $ | 4.27 | | $ | 2.61 | | $ | 3.96 | |
BOE Production(2) | | 140,100 | | 110,300 | | 416,300 | | 310,300 | |
Average Price ($ / BOE) | | $ | 44.17 | | $ | 53.31 | | $ | 50.92 | | $ | 46.96 | |
Well Activity | | | | | | | | | |
Mineral Interests Owned (4) | | | | | | | | | |
Net Acres Held By Production | | 38,200 | | 30,300 | | 38,200 | | 30,300 | |
Gross Wells Drilled | | 2 | | 9 | | 13 | | 16 | |
Productive Gross Wells | | 542 | | 510 | | 542 | | 510 | |
Mineral Interests Leased (5) | | | | | | | | | |
Net Acres Held By Production | | 36,030 | | — | | 36,030 | | — | |
Gross Wells Drilled | | — | | — | | — | | — | |
Productive Gross Wells(6) | | 382 | | — | | 382 | | — | |
Total Well Activity | | | | | | | | | |
Net Acres Held By Production | | 74,230 | | 30,300 | | 74,230 | | 30,300 | |
Gross Wells Drilled | | 2 | | 9 | | 13 | | 16 | |
Productive Gross Wells | | 924 | | 510 | | 924 | | 510 | |
(1) Includes our share of venture activity in which we own a 50% interest. Our share of natural gas production is 75 MMcf and 247 MMcf in third quarter and first nine months 2012 and 112 MMcf and 398MMcf in third quarter and first nine months 2011
(2) BOE — Barrels of oil equivalent (converting natural gas to oil at 6 Mcfe / Bbl)
(3) Excludes Credo Petroleum Corporation acquired on September 28, 2012
(4) Wells operated by third-party lessees/operators. Represent wells in which we own a royalty or working interest in a producing well
(5) Oil and gas production excludes wells associated with acquisition of Credo Petroelum
(6) Excludes 1,181 wells in which Credo Petroleum has an overriding royalty interest
7
THIRD QUARTER 2012
MINERAL RESOURCES PIPELINE
MINERAL INTERESTS OWNED (1)
Forestar’s mineral resources segment includes approximately 593,000 owned net mineral acres principally located in Texas, Louisiana, Georgia and Alabama.
State | | Available
for Lease | | Leased | | Held by
Production | | Total (2) | |
Texas | | 201,000 | | 25,000 | | 26,000 | | 252,000 | |
Louisiana | | 120,000 | | 12,000 | | 12,000 | | 144,000 | |
Georgia | | 155,000 | | — | | — | | 155,000 | |
Alabama | | 40,000 | | — | | — | | 40,000 | |
California | | 1,000 | | — | | — | | 1,000 | |
Indiana | | 1,000 | | — | | — | | 1,000 | |
Total | | 518,000 | | 37,000 | | 38,000 | | 593,000 | |
(1) Represents net acres and includes ventures
(2) Excludes 477 net mineral acres located in Colorado, which includes 379 leased acres and 29 acres held by production
MINERAL INTERESTS LEASED (1)
Forestar’s mineral resources segment includes approximately 142,000 net mineral acres of leasehold and overriding royalty interests principally located in Nebraska, Kansas, Oklahoma, North Dakota and Texas principally as result of our September 28, 2012 acquisition of Credo Petroleum.
State | | Undeveloped | | Held by
Production | | Total (2) | |
Nebraska | | 53,000 | | 2,000 | | 55,000 | |
Kansas | | 43,000 | | 3,000 | | 46,000 | |
Oklahoma | | — | | 17,000 | | 17,000 | |
North Dakota | | 4,000 | | 2,000 | | 6,000 | |
Texas | | 1,000 | | 2,000 | | 3,000 | |
Other(2) | | 5,000 | | 10,000 | | 15,000 | |
Total | | 106,000 | | 36,000 | | 142,000 | |
(1) Represents net acres
(2) Includes approximately 8,400 net acres of overriding royalty interests
8
FORESTAR GROUP INC.
REAL ESTATE SEGMENT
PERFORMANCE METRICS
| | Third Quarter | | First Nine Months | |
REAL ESTATE | | 2012 | | 2011 | | 2012 | | 2011 | |
Owned, Consolidated & Equity Method Ventures: | | | | | | | | | |
Residential Lots Sold | | 269 | | 311 | | 981 | | 808 | |
Revenue per Lot Sold | | $ | 54,100 | | $ | 46,200 | | $ | 49,700 | | $ | 48,900 | |
Commercial Acres Sold | | 18 | | — | | 55 | | 24 | |
Revenue per Commercial Acre Sold | | $ | 133,900 | | — | | $ | 75,100 | | $ | 157,900 | |
Undeveloped Acres Sold | | 560 | | 550 | | 1,950 | | 3,960 | |
Revenue per Acre Sold | | $ | 2,800 | | $ | 2,800 | | $ | 2,700 | | $ | 2,600 | |
Owned & Consolidated Ventures: | | | | | | | | | |
Residential Lots Sold | | 193 | | 155 | | 675 | | 458 | |
Revenue per Lot Sold | | $ | 54,200 | | $ | 52,200 | | $ | 49,900 | | $ | 55,300 | |
Commercial Acres Sold | | 18 | | — | | 55 | | 4 | |
Revenue per Commercial Acre Sold | | $ | 133,900 | | — | | $ | 75,100 | | $ | 185,300 | |
Undeveloped Acres Sold | | 560 | | 550 | | 1,815 | | 3,940 | |
Revenue per Acre Sold | | $ | 2,800 | | $ | 2,800 | | $ | 2,700 | | $ | 2,600 | |
Ventures Accounted For Using the Equity Method: | | | | | | | | | |
Residential Lots Sold | | 76 | | 156 | | 306 | | 350 | |
Revenue per Lot Sold | | $ | 53,800 | | $ | 40,200 | | $ | 49,100 | | $ | 40,600 | |
Commercial Acres Sold | | — | | — | | — | | 20 | |
Revenue per Commercial Acre Sold | | — | | — | | — | | $ | 152,500 | |
Undeveloped Acres Sold | | — | | — | | 135 | | 20 | |
Revenue per Acre Sold | | — | | — | | $ | 2,600 | | $ | 3,000 | |
THIRD QUARTER 2012
REAL ESTATE PIPELINE
Real Estate | | Undeveloped | | In
Entitlement
Process | | Entitled | | Developed &
Under
Development | | Total
Acres* | |
| | | | | | | | | | | |
Undeveloped Land | | | | | | | | | | | |
Owned | | 94,111 | | | | | | | | | |
Ventures | | 6,901 | | | | | | | | 101,012 | |
| | | | | | | | | | | |
Residential | | | | | | | | | | | |
Owned | | | | 24,857 | | 9,005 | | 738 | | | |
Ventures | | | | | | 2,092 | | 223 | | 36,915 | |
| | | | | | | | | | | |
Commercial | | | | | | | | | | | |
Owned | | | | 2,723 | | 1,209 | | 595 | | | |
Ventures | | | | | | 399 | | 197 | | 5,123 | |
| | | | | | | | | | | |
Total Acres | | 101,012 | | 27,580 | | 12,705 | | 1,753 | | 143,050 | |
| | | | | | | | | | | |
Estimated Residential Lots | | | | | | 21,250 | | 2,614 | | 23,864 | |
* In addition, Forestar owns a 58% interest in a venture which controls approximately 16,000 acres of undeveloped land in Georgia with minimal investment. Excludes acres associated with fully developed commercial and income producing properties.
9
FORESTAR GROUP INC.
FIBER RESOURCES SEGMENT
PERFORMANCE METRICS
| | Third Quarter | | First Nine Months | |
FIBER RESOURCES | | 2012 | | 2011 | | 2012 | | 2011 | |
Fiber Sales * | | | | | | | | | |
Pulpwood Tons Sold | | 160,000 | | 85,800 | | 265,200 | | 222,100 | |
Average Pulpwood Price / Ton | | $ | 9.54 | | $ | 7.57 | | $ | 9.51 | | $ | 8.57 | |
Sawtimber Tons Sold | | 37,400 | | 22,900 | | 66,700 | | 51,200 | |
Average Sawtimber Price / Ton | | $ | 20.21 | | $ | 14.33 | | $ | 19.88 | | $ | 15.47 | |
| | | | | | | | | |
Total Tons Sold | | 197,400 | | 108,700 | | 331,900 | | 273,300 | |
Average Price / Ton | | $ | 11.56 | | $ | 8.99 | | $ | 11.59 | | $ | 9.86 | |
| | | | | | | | | |
Recreational Activity | | | | | | | | | |
Average Acres Leased | | 129,200 | | 164,600 | | 130,500 | | 185,300 | |
Average Lease Rate / Acre | | $ | 8.84 | | $ | 8.28 | | $ | 8.84 | | $ | 8.84 | |
*The majority of our fiber sales were to International Paper at market prices.
10
FORESTAR GROUP INC.
PROJECTS IN ENTITLEMENT
A summary of projects in the entitlement process (a) at third quarter-end 2012 follows:
| | | | Project | |
Project | | County | | Acres (b) | |
| | | | | |
California | | | | | |
Hidden Creek Estates | | Los Angeles | | 700 | |
Terrace at Hidden Hills | | Los Angeles | | 30 | |
| | | | | |
Georgia | | | | | |
Ball Ground | | Cherokee | | 500 | |
Crossing | | Coweta | | 230 | |
Fincher Road | | Cherokee | | 3,890 | |
Fox Hall | | Coweta | | 960 | |
Garland Mountain | | Cherokee/Bartow | | 350 | |
Home Place | | Coweta | | 1,510 | |
Martin’s Bridge | | Banks | | 970 | |
Mill Creek | | Coweta | | 770 | |
Serenity | | Carroll | | 440 | |
Waleska | | Cherokee | | 90 | |
Wolf Creek | | Carroll/Douglas | | 12,230 | |
Yellow Creek | | Cherokee | | 1,060 | |
| | | | | |
Texas | | | | | |
Lake Houston | | Harris/Liberty | | 3,700 | |
San Jacinto | | Montgomery | | 150 | |
| | | | | |
Total | | | | 27,580 | |
(a) A project is deemed to be in the entitlement process when customary steps necessary for the preparation of an application for governmental land-use approvals, like conducting pre-application meetings or similar discussions with governmental officials, have commenced, or an application has been filed. Projects listed may have significant steps remaining, and there is no assurance that entitlements ultimately will be received.
(b) Project acres, which are the total for the project regardless of our ownership interest, are approximate. The actual number of acres entitled may vary.
11
FORESTAR GROUP INC.
REAL ESTATE PROJECTS
A summary of our entitled,(a) developed & under development projects at third quarter-end 2012 follows:
| | | | | | Residential Lots (c) | | Commercial Acres (d) | |
Project | | County | | Interest
Owned(b) | | Lots Sold Since
Inception | | Lots
Remaining | | Acres Sold Since
Inception | | Acres
Remaining (f) | |
Projects we own | | | | | | | | | | | | | |
California | | | | | | | | | | | | | |
San Joaquin River | | Contra Costa/ Sacramento | | 100 | % | — | | — | | — | | 288 | |
Colorado | | | | | | | | | | | | | |
Buffalo Highlands | | Weld | | 100 | % | — | | 164 | | — | | — | |
Johnstown Farms | | Weld | | 100 | % | 162 | | 451 | | 2 | | 7 | |
Pinery West | | Douglas | | 100 | % | — | | — | | — | | 111 | |
Stonebraker | | Weld | | 100 | % | — | | 603 | | — | | — | |
Texas | | | | | | | | | | | | | |
Arrowhead Ranch | | Hays | | 100 | % | — | | 259 | | — | | 6 | |
Bar C Ranch | | Tarrant | | 100 | % | 292 | | 907 | | — | | — | |
Barrington Kingwood | | Harris | | 100 | % | 35 | | 145 | | — | | — | |
Cibolo Canyons | | Bexar | | 100 | % | 713 | | 762 | | 68 | | 82 | |
Harbor Lakes | | Hood | | 100 | % | 203 | | 246 | | 2 | | 19 | |
Hunter’s Crossing | | Bastrop | | 100 | % | 390 | | 100 | | 38 | | 71 | |
La Conterra | | Williamson | | 100 | % | 103 | | 397 | | — | | 58 | |
Maxwell Creek | | Collin | | 100 | % | 781 | | 218 | | 10 | | — | |
Oak Creek Estates | | Comal | | 100 | % | 131 | | 516 | | 13 | | — | |
Stoney Creek | | Dallas | | 90 | % | 141 | | 613 | | — | | — | |
Summer Creek Ranch | | Tarrant | | 100 | % | 819 | | 455 | | 35 | | 44 | |
Summer Lakes | | Fort Bend | | 100 | % | 462 | | 668 | | 56 | | — | |
Summer Park (g) | | Fort Bend | | 100 | % | — | | 210 | | 27 | | 63 | |
The Colony | | Bastrop | | 100 | % | 432 | | 717 | | 22 | | 31 | |
The Preserve at Pecan Creek | | Denton | | 100 | % | 356 | | 438 | | — | | 7 | |
Village Park | | Collin | | 100 | % | 483 | | 277 | | 3 | | 2 | |
Westside at Buttercup Creek | | Williamson | | 100 | % | 1,398 | | 98 | | 66 | | — | |
Other projects (11) | | Various | | 100 | % | 2,493 | | 171 | | 211 | | 19 | |
Georgia | | | | | | | | | | | | | |
Seven Hills | | Paulding | | 100 | % | 646 | | 441 | | 26 | | 113 | |
Villages of Burt Creek | | Dawson | | 100 | % | — | | 1,715 | | — | | 57 | |
Towne West | | Bartow | | 100 | % | — | | 2,674 | | — | | 121 | |
Other projects (17) | | Various | | 100 | % | 1,724 | | 2,970 | | 3 | | 705 | |
Florida | | | | | | | | | | | | | |
Other projects (3) | | Various | | 100 | % | 708 | | 137 | | — | | — | |
Missouri and Utah | | | | | | | | | | | | | |
Other projects (2) | | Various | | 100 | % | 477 | | 77 | | — | | — | |
| | | | | | 12,949 | | 16,429 | | 582 | | 1,804 | |
Projects in entities we consolidate | | | | | | | | | | | | | |
Texas | | | | | | | | | | | | | |
City Park | | Harris | | 75 | % | 1,201 | | 110 | | 50 | | 115 | |
Lantana | | Denton | | 55 | %(e) | 911 | | 1,381 | | — | | — | |
Timber Creek | | Collin | | 88 | % | — | | 614 | | — | | — | |
Willow Creek | | Walter/Fort Bend | | 90 | % | — | | 231 | | — | | — | |
Other projects (3) | | Various | | Various | | 7 | | 202 | | 16 | | 148 | |
Georgia | | | | | | | | | | | | | |
The Georgian | | Paulding | | 75 | % | 289 | | 1,052 | | — | | — | |
| | | | | | 2,408 | | 3,590 | | 66 | | 263 | |
Total owned and consolidated | | | | | | 15,357 | | 20,019 | | 648 | | 2,067 | |
Projects in ventures that we account for using the equity method | | | | | | | | | | | | | |
Texas | | | | | | | | | | | | | |
Entrada | | Travis | | 50 | % | — | | 821 | | — | | — | |
Fannin Farms West | | Tarrant | | 50 | % | 324 | | 24 | | — | | 12 | |
Harper’s Preserve | | Montgomery | | 50 | % | 153 | | 1,572 | | — | | 72 | |
Lantana | | Denton | | Various | (e) | 1,451 | | 81 | | 16 | | 42 | |
Long Meadow Farms | | Fort Bend | | 37 | % | 967 | | 828 | | 107 | | 192 | |
Southern Trails | | Brazoria | | 80 | % | 553 | | 430 | | — | | — | |
Stonewall Estates | | Bexar | | 50 | % | 299 | | 89 | | — | | — | |
Other projects (1) | | Nueces | | 50 | % | — | | — | | — | | 15 | |
Total in ventures | | | | | | 3,747 | | 3,845 | | 123 | | 333 | |
Combined Total | | | | | | 19,104 | | 23,864 | | 771 | | 2,400 | |
(a) A project is deemed entitled when all major discretionary governmental land-use approvals have been received. Some projects may require additional permits and/or non-governmental authorizations for development.
(b) Interest owned reflects our net equity interest in the project, whether owned directly or indirectly. There are some projects that have multiple ownership structures within them. Accordingly, portions of these projects may appear as owned, consolidated and/or accounted for using the equity method.
12
(c) Lots are for the total project, regardless of our ownership interest. Lots remaining represent vacant developed lots, lots under development and future planned lots and are subject to change based on business plan revisions.
(d) Commercial acres are for the total project, regardless of our ownership interest and are net developable acres, which may be fewer than the gross acres available in the project.
(e) The Lantana project consists of a series of 25 partnerships in which our voting interests range from 25% to 55%. We account for three of these partnerships using the equity method and we consolidate the remaining partnerships.
(f) Excludes acres associated with commercial and income producing properties.
(g) Formerly Waterford Park
A summary of our significant commercial and income producing properties at third quarter-end 2012 follows:
| | | | | | Interest | | | | | | | |
Project | | County | | Market | | Owned (a) | | Type | | Acres | | Description | |
Radisson Hotel | | Travis | | Austin | | 100 | % | Hotel | | 2 | | 413 guest rooms and suites | |
Las Brisas | | Williamson | | Austin | | 59 | % | Multifamily | | 30 | | 414 unit luxury apartment | |
Promesa (b) | | Travis | | Austin | | 100 | % | Multifamily | | 16 | | 289 unit luxury apartment (c) | |
Eleven | | Travis | | Austin | | 25 | % | Multifamily | | 3 | | 257 unit luxury apartment (c) | |
3600 | | Arapahoe | | Denver | | 20 | % | Multifamily | | 4 | | 304 unit luxury apartment (c) | |
(a) Interest owned reflects our total equity interest in the project, whether owned directly or indirectly.
(b) Formerly marketed as Ridge at Ribelin Ranch.
(c) Construction in progress
13
FORESTAR GROUP INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Unaudited)
Forestar’s Net Income and Earnings Per Share (EPS) excluding special items for the quarter and first nine months ended September 30, 2012 and 2011 are non-GAAP financial measures within the meaning of Regulation G of the Securities and Exchange Commission. Non-GAAP financial measures are not in accordance with, or an alternative to, U.S. Generally Accepted Accounting Principles (GAAP). The company believes presenting non-GAAP Net Income and EPS is helpful to analyze financial performance without the impact of items that may obscure trends in the company’s underlying performance. A detailed reconciliation is provided below outlining the differences between these non-GAAP measures and the directly related GAAP measures.
| | Third Quarter | | First Nine Months | |
($ in millions, except per share amounts) | | 2012 | | 2011 | | 2012 | | 2011 | |
| | | | | | | | | |
Net income (loss), after-tax, in accordance with GAAP | | $ | (0.7 | ) | $ | 36.4 | | $ | 2.9 | | $ | 30.0 | |
| | | | | | | | | |
Special items, after-tax | | | | | | | | | |
Credo acquisition expenses | | 2.1 | | — | | 3.7 | | — | |
Extinguishment of debt and debt offering expenses | | 2.9 | | 0.3 | | 2.9 | | 2.1 | |
Gain on sale of timberland | | — | | (40.2 | ) | — | | (40.2 | ) |
Total special items, after-tax | | $ | 5.0 | | $ | (39.9 | ) | $ | 6.6 | | (38.1 | ) |
| | | | | | | | | |
Net income, after-tax, excluding special items | | $ | 4.3 | | $ | (3.5 | ) | $ | 9.5 | | $ | (8.1 | ) |
| | | | | | | | | |
Net income (loss) per share, in accordance with GAAP | | $ | (0.02 | ) | $ | 1.02 | | $ | 0.08 | | $ | 0.84 | |
| | | | | | | | | |
Special items, after-tax, per diluted share | | | | | | | | | |
Credo acquisition expenses | | 0.06 | | — | | 0.11 | | — | |
Extinguishment of debt and debt offering expenses | | 0.08 | | 0.01 | | 0.08 | | 0.06 | |
Gain on sale of timberland | | — | | $ | (1.12 | ) | — | | (1.12 | ) |
Total special items, after-tax | | $ | 0.14 | | $ | (1.11 | ) | $ | 0.19 | | $ | (1.06 | ) |
| | | | | | | | | |
Net income per share, excluding special items | | $ | 0.12 | | $ | (0.09 | ) | $ | 0.27 | | $ | (0.22 | ) |
| | | | | | | | | |
Average basic shares outstanding | | 35.2 | | 35.5 | | 35.2 | | 35.5 | |
Average diluted shares outstanding | | 35.2 | | 35.8 | | 35.4 | | 35.9 | |
14
