NEWS
RELEASE
FOR IMMEDIATE RELEASE
CONTACT: Anna E. Torma
(512) 433-5312
FORESTAR GROUP INC. REPORTS
THIRD QUARTER 2013 RESULTS
AUSTIN, TEXAS, November 6, 2013—Forestar Group Inc. (NYSE: FOR) today reported third quarter 2013 net income of approximately $11.8 million, or $0.33 per diluted share, compared with a third quarter 2012 net loss of approximately ($0.7) million, or ($0.02) per share outstanding. Third quarter 2013 results include a previously unrecognized tax benefit of approximately $6.3 million, or $0.17 per share, related to qualified timber gains. Third quarter 2012 results include a 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 ($5.0) million, or ($0.14) per share, after-tax, principally associated with acquisition of Credo Petroleum Corporation and extinguishment of debt related to amendment and extension of our term loan.
“During third quarter, we continued to see accelerating momentum in real estate sales as well as in oil and gas production. Residential lot demand continues to strengthen evidenced by higher lot sales and average per lot pricing compared with third quarter 2012. Third quarter residential lot sales were the highest since we became a public company in 2007. Multifamily market fundamentals remain favorable in our target markets as we continue to expand our pipeline of projects and sites. In addition, improving oil and gas segment results reflect higher levels of oil production, driven by increased investments in exploration and drilling activity in the Bakken/Three Forks formations in North Dakota and the Lansing-Kansas City formation in Kansas and Nebraska. Given our attractive pipeline of opportunities and our success to date, we look forward to additional oil and gas investments expected to grow production, reserves and earnings. Likewise, given the solid housing recovery, we anticipate continued investments in real estate,” said Jim DeCosmo, president and chief executive officer of Forestar Group.
Third Quarter 2013 Significant Highlights
| • | Sold 547 developed residential lots, up over 103% compared with third quarter 2012, with average lot margins up over 28% compared with third quarter 2012 |
| • | Oil production up over 170% compared with third quarter 2012, with 41 new wells drilled in third quarter 2013 |
Forestar manages its operations through three business segments: real estate, oil and gas and other natural resources.
REAL ESTATE
Third Quarter 2013 Significant Highlights (Includes Ventures)
| • | Sold 547 developed residential lots – the highest level of quarterly lot sales since second quarter 2007 |
| • | Over 1,600 lots under option contracts with homebuilders |
| • | Residential lot margins up over 28% compared with third quarter 2012 |
| • | Sold 1,340 acres of undeveloped land for over $4,950 per acre |
| • | Sold 19 commercial acres for over $257,000 per acre |
| • | Sold 46 acres of residential tracts for $109,000 per acre |
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Segment Financial Results:
| ($ in millions) | 3Q 2013 | 3Q 2012 | 2Q 2013 | |||
| Segment Revenues | $50.4 | $27.1 | $41.2 | |||
| Segment Earnings | $13.2 | $12.7 | $8.1 | |||
Third quarter 2013 real estate segment earnings were higher compared with third quarter 2012 principally due to higher average prices and margins for residential lots, increased residential lot sales, increased average pricing for commercial acreage sold and higher undeveloped land sales. In addition, third quarter 2012 real estate segment earnings include a $10.2 million gain associated with the sale of Broadstone Memorial, a multifamily community in Houston. Real estate segment earnings increased in third quarter 2013 compared with second quarter 2013 primarily due to higher residential lot sales, improved lot pricing and margins and increased commercial acreage sales.
OIL AND GAS
Third Quarter 2013 Significant Highlights (Includes Ventures)
| • | Oil production up over 170% compared with third quarter 2012, principally due to the acquisition of Credo Petroleum and additional investments principally targeting the Bakken/Three Forks and the Lansing-Kansas City formations |
| • | 31 new productive gross oil and gas wells drilled; 18 wells waiting on completion at quarter-end |
| • | Leased over 7,500 net mineral acres principally in Texas to third parties for nearly $2.0 million |
Segment Financial Results:
| ($ in millions) | 3Q 2013 | 3Q 2012 | 2Q 2013 | |||
| Segment Revenues | $22.1 | $10.5 | $15.8 | |||
| Segment Earnings | $8.5 | $7.3 | $4.2 | |||
Oil and gas segment earnings increased in third quarter 2013 compared with third quarter 2012 principally due to higher oil production, primarily associated with the acquisition of Credo Petroleum, and higher oil and gas pricing, partially offset by reduced oil volumes associated with royalties from our owned mineral interests, and lower lease bonus revenues. Oil and gas segment earnings increased in third quarter 2013 compared with second quarter 2013 principally due to higher lease bonus revenues, increased oil and natural gas pricing and higher oil production.
OTHER NATURAL RESOURCES
Third Quarter 2013 Significant Highlights (Includes Ventures)
| • | Sold nearly 141,000 tons of fiber for $17.33 per ton |
| • | Recreational leasing remains strong |
Segment Financial Results:
| ($ in millions) | 3Q 2013 | 3Q 2012 | 2Q 2013 | |||
| Segment Revenues | $2.7 | $3.0 | $3.0 | |||
| Segment Earnings | $0.5 | $0.6 | $1.0 | |||
Third quarter 2013 other natural resources segment earnings were essentially flat compared with third quarter 2012 principally due to fiber sales volumes declining by over 56,000 tons primarily due to scheduled maintenance outages taken by our customers, offset by a 50% increase in average pricing per ton. Other natural resources segment earnings decreased in third quarter 2013 compared with second quarter 2013 principally due to lower fiber sales.
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OUTLOOK
“We remain confident toward delivering our Triple in FOR strategic initiatives, focused on accelerating value realization, increasing transparency and disclosure, and growing our net asset value through strategic and disciplined investments. We anticipate meeting our 2013 objectives of 1,900 residential lot sales and production of 1.1 million barrels of oil equivalent, and expect accelerated momentum in real estate sales and oil production in 2014.
"Housing markets continue to show growing demand for residential lots, and increased interest in residential and commercial tracts. We continue to accelerate real estate development activities to meet growing builder demand. Our multifamily team continues to build a solid pipeline of multifamily development sites, with construction at our multifamily ventures in Austin and Denver on target to begin delivering units in 2013 and at our wholly-owned project in Midtown Cedar Hill in Dallas in 2014. Our multifamily site in Nashville is expected to be under construction by first quarter 2014 and we acquired a multifamily site in Denver in October. We will continue to evaluate and acquire additional multifamily sites to further develop our pipeline.
“In oil and gas, we continue to increase our investment in exploration and drilling activity, growing production, reserves and value. During third quarter, we participated in an increase in North Dakota drilling activity, with approximately 9 gross Bakken or Three Forks wells (5% average working interest) having initial production during the quarter and 18 gross Bakken or Three Forks wells (7% average working interest) waiting on completion at quarter end, the highest number of wells waiting on completion since we began participating in drilling activity in the Bakken/Three Forks. In addition, exploration and drilling activity in Kansas and Nebraska also continued to increase during third quarter, with combined exploration success rates exceeding 50%. We anticipate drilling activity in the Bakken/Three Forks will continue to accelerate over the next several quarters as operators further shift to pad drilling, which is expected to result in additional production growth, improving economic recoveries, lower well costs and higher returns. As a result of the increased exploration and drilling activity, we would expect our working interest investments to essentially double in 2014 and to continue to exceed our underwriting criteria while delivering returns well above our cost of capital.
“We continue to see significant opportunities for growth through disciplined investment in our oil and gas and real estate businesses. We are well positioned for the remainder of 2013 and for continued momentum in real estate sales and oil production in 2014,” concluded Mr. DeCosmo.
The Company will host a conference call on November 6, 2013 at 10:00 am ET to discuss results of third quarter 2013. The meeting may be accessed through webcast or by conference call. The webcast may be accessed through Forestar’s Internet site at www.forestargroup.com. To access the conference call, listeners calling from North America should dial 1-866-318-8611 at least 15 minutes prior to the start of the meeting. Those wishing to access the call from outside North America should dial 1-617-399-5130. The password is Forestar. Replays of the call will be available for two weeks following the completion of 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 46233350.
About Forestar Group
Forestar Group Inc. operates in three business segments: real estate, oil and gas and other natural resources. At the end of third quarter 2013, the real estate segment owns directly or through ventures almost 132,000 acres of real estate located in ten states and 14 markets in the U.S. The real estate segment has 13 real estate projects representing approximately 25,800 acres currently in the entitlement process, and 72 entitled, developed and under development projects in eight states and 12 markets encompassing over 13,600 acres, comprised of almost 22,800 planned residential lots and approximately 2,300 commercial acres. The oil and gas segment includes approximately 809,000 net acres of oil and gas mineral interests, with approximately 590,000 acres of fee ownership located principally in Texas, Louisiana, Alabama, and Georgia and almost 219,000 net acres of leasehold interests principally located in Nebraska, Kansas, Oklahoma, North Dakota and Texas. These leasehold interests include about 7,000 net mineral acres in the core of the prolific Bakken and Three Forks formations. The other natural resources segment includes sale of wood fiber and management of our recreational leases, and approximately 1.5 million acres of groundwater resources, including 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 20,000 acres of groundwater leases in central Texas. Forestar’s address on the World Wide Web is www.forestargroup.com.
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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 synergies and value creation contemplated by the merger with Credo, and our ability to promptly and effectively integrate Credo’s businesses. 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; 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.
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FORESTAR GROUP INC.
(UNAUDITED)
Business Segments
| Third Quarter | First Nine Months | ||||||||||||||
| 2013 | 2012 | 2013 | 2012 | ||||||||||||
| (In thousands) | |||||||||||||||
| Revenues: | |||||||||||||||
Real estate (a) | $ | 50,356 | $ | 27,115 | $ | 170,264 | $ | 71,684 | |||||||
| Oil and gas | 22,095 | 10,479 | 53,430 | 27,053 | |||||||||||
| Other natural resources | 2,656 | 3,016 | 8,963 | 5,277 | |||||||||||
| Total revenues | $ | 75,107 | $ | 40,610 | $ | 232,657 | $ | 104,014 | |||||||
| Segment earnings: | |||||||||||||||
| Real estate | $ | 13,197 | $ | 12,688 | $ | 40,747 | $ | 31,931 | |||||||
| Oil and gas | 8,499 | 7,337 | 17,869 | 19,470 | |||||||||||
| Other natural resources | 549 | 552 | 2,792 | (769 | ) | ||||||||||
| Total segment earnings | 22,245 | 20,577 | 61,408 | 50,632 | |||||||||||
| Items not allocated to segments: | |||||||||||||||
General and administrative expense (b) | (4,648 | ) | (8,000 | ) | (14,935 | ) | (19,482 | ) | |||||||
| Share-based compensation expense | (3,492 | ) | (6,327 | ) | (15,367 | ) | (11,491 | ) | |||||||
| Gain on sale of assets | — | 16 | — | 16 | |||||||||||
| Interest expense | (5,231 | ) | (8,094 | ) | (14,892 | ) | (15,649 | ) | |||||||
| Other corporate non-operating income | 24 | 47 | 80 | 158 | |||||||||||
| Income (loss) before taxes | 8,898 | (1,781 | ) | 16,294 | 4,184 | ||||||||||
Income tax benefit (expense) (c) | 2,932 | 1,078 | 28 | (1,274 | ) | ||||||||||
| Net income (loss) attributable to Forestar Group Inc. | $ | 11,830 | $ | (703 | ) | $ | 16,322 | $ | 2,910 | ||||||
| Net income (loss) per common share: | |||||||||||||||
| Basic | $ | 0.33 | $ | (0.02 | ) | $ | 0.46 | $ | 0.08 | ||||||
| Diluted | $ | 0.33 | $ | (0.02 | ) | $ | 0.45 | $ | 0.08 | ||||||
| Weighted average common shares outstanding (in millions): | |||||||||||||||
| Basic | 35.4 | 35.2 | 35.3 | 35.2 | |||||||||||
| Diluted | 36.1 | 35.2 | 35.9 | 35.4 | |||||||||||
| Third Quarter | ||||||||
| Supplemental Financial Information: | 2013 | 2012 | ||||||
| (In thousands) | ||||||||
| Cash and cash equivalents | $ | 54,769 | $ | 10,279 | ||||
| Borrowings under credit facility | 200,000 | 227,000 | ||||||
Convertible senior notes, net of discount (d) | 99,122 | — | ||||||
Other debt (e) | 36,049 | 49,651 | ||||||
| Total debt | $ | 335,171 | $ | 276,651 | ||||
_____________________
(a) | Real estate includes construction revenue incurred as a general contractor associated with the development of two multifamily venture properties. Construction revenue increased in third quarter and first nine months 2013 to $9.0 million and $26.6 million respectively, compared to $2.1 million and $2.2 million in third quarter and first nine months 2012. |
(b) | Third quarter and first nine months 2012 general and administrative expense includes $3.2 million and $5.7 million in transaction costs to outside advisors associated with our acquisition of Credo Petroleum. |
(c) | Third quarter 2013 results include a previously unrecognized tax benefit of $6.3 million related to qualified timber gains. |
(d) | Represents $125 million convertible senior notes issued February 2013, net of unamortized discount. |
(e) | Consists principally of consolidated venture non-recourse debt. |
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FORESTAR GROUP INC.
REAL ESTATE SEGMENT
PERFORMANCE METRICS
| Third Quarter | First Nine Months | ||||||||||||||
| 2013 | 2012 | 2013 | 2012 | ||||||||||||
| REAL ESTATE | |||||||||||||||
| Owned, Consolidated & Equity Method Ventures: | |||||||||||||||
| Residential Lots Sold | 547 | 269 | 1,353 | 981 | |||||||||||
| Revenue per Lot Sold | $ | 56,473 | $ | 54,102 | $ | 55,257 | $ | 49,675 | |||||||
| Commercial Acres Sold | 19 | 18 | 56 | 56 | |||||||||||
| Revenue per Commercial Acre Sold | $ | 257,548 | $ | 133,882 | $ | 169,725 | $ | 75,147 | |||||||
| Undeveloped Acres Sold | 1,340 | 564 | 3,301 | 1,952 | |||||||||||
| Revenue per Acre Sold | $ | 4,955 | $ | 2,846 | $ | 3,647 | $ | 2,700 | |||||||
| Owned & Consolidated Ventures: | |||||||||||||||
| Residential Lots Sold | 414 | 193 | 1,028 | 675 | |||||||||||
| Revenue per Lot Sold | $ | 56,866 | $ | 54,206 | $ | 55,417 | $ | 49,925 | |||||||
| Commercial Acres Sold | 2 | 18 | 37 | 56 | |||||||||||
| Revenue per Commercial Acre Sold | $ | 426,554 | $ | 133,882 | $ | 115,892 | $ | 75,147 | |||||||
| Undeveloped Acres Sold | 1,314 | 564 | 3,233 | 1,817 | |||||||||||
| Revenue per Acre Sold | $ | 5,001 | $ | 2,846 | $ | 3,668 | $ | 2,707 | |||||||
| Ventures Accounted For Using the Equity Method: | |||||||||||||||
| Residential Lots Sold | 133 | 76 | 325 | 306 | |||||||||||
| Revenue per Lot Sold | $ | 55,251 | $ | 53,839 | $ | 54,752 | $ | 49,125 | |||||||
| Commercial Acres Sold | 17 | — | 19 | — | |||||||||||
| Revenue per Commercial Acre Sold | $ | 239,710 | $ | — | $ | 277,739 | $ | — | |||||||
| Undeveloped Acres Sold | 26 | — | 68 | 135 | |||||||||||
| Revenue per Acre Sold | $ | 2,650 | $ | — | $ | 2,650 | $ | 2,600 | |||||||
THIRD QUARTER 2013
REAL ESTATE PIPELINE
| Real Estate | Undeveloped | In Entitlement Process | Entitled | Developed & Under Development | Total Acres (a) | ||||||
| Undeveloped Land | |||||||||||
| Owned | 85,300 | ||||||||||
| Ventures | 6,833 | 92,133 | |||||||||
| Residential | |||||||||||
| Owned | 23,162 | 8,333 | 872 | ||||||||
| Ventures | 1,868 | 244 | 34,479 | ||||||||
| Commercial | |||||||||||
| Owned | 2,668 | 1,188 | 585 | ||||||||
| Ventures | 359 | 177 | 4,977 | ||||||||
| Total Acres | 92,133 | 25,830 | 11,748 | 1,878 | 131,589 | ||||||
| Estimated Residential Lots | 19,638 | 3,120 | 22,758 | ||||||||
_____________________
(a) | 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. |
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FORESTAR GROUP INC.
OIL AND GAS SEGMENT
PERFORMANCE METRICS
| Third Quarter | First Nine Months | ||||||||||||||
| 2013 | 2012 | 2013 | 2012 | ||||||||||||
| Leasing Activity from Owned Mineral Interests | |||||||||||||||
| Acres Leased | 7,530 | 3,124 | 8,355 | 3,900 | |||||||||||
| Average Bonus / Acre | $260 | $1,130 | $270 | $975 | |||||||||||
| Delay Rentals Received | $98,000 | $593,000 | $562,000 | $2,155,000 | |||||||||||
| Oil & Gas Production | |||||||||||||||
Royalty Interests (a) | |||||||||||||||
| Gross Wells | 543 | 542 | 543 | 542 | |||||||||||
| Oil Production (Barrels) | 41,800 | 62,400 | 130,700 | 183,300 | |||||||||||
| Average Oil Price ($ / Barrel) | $86.38 | $75.01 | $84.47 | $88.68 | |||||||||||
| Natural Gas Production (MMcf) | 304.9 | 411.1 | 1,004.3 | 1,241.5 | |||||||||||
| Average Natural Gas Price ($ / Mcf) | $3.69 | $2.22 | $3.29 | $2.58 | |||||||||||
BOE Production (b) | 92,700 | 130,900 | 298,100 | 390,200 | |||||||||||
| Average Price ($ / BOE) | $51.15 | $42.72 | $48.10 | $49.87 | |||||||||||
| Working Interests | |||||||||||||||
| Gross Wells | 458 | 10 | 458 | 10 | |||||||||||
| Oil Production (Barrels) | 147,100 | 6,700 | 371,900 | 16,500 | |||||||||||
| Average Oil Price ($ / Barrel) | $98.67 | $83.30 | $92.66 | $94.33 | |||||||||||
| Natural Gas Production (MMcf) | 236.5 | 15.3 | 636.2 | 57.6 | |||||||||||
| Average Natural Gas Price ($ / Mcf) | $3.71 | $2.74 | $3.60 | $3.16 | |||||||||||
BOE Production (b) | 186,400 | 9,200 | 477,900 | 26,100 | |||||||||||
| Average Price ($ / BOE) | $82.52 | $64.76 | $76.89 | $66.60 | |||||||||||
| Total Oil & Gas Interests | |||||||||||||||
Gross Wells (c) | 992 | 542 | 992 | 542 | |||||||||||
| Oil Production (Barrels) | 188,900 | 69,100 | 502,600 | 199,800 | |||||||||||
| Average Oil Price ($ / Barrel) | $95.95 | $75.81 | $90.53 | $89.15 | |||||||||||
| Natural Gas Production (MMcf) | 541.4 | 426.4 | 1,640.5 | 1,299.1 | |||||||||||
| Average Natural Gas Price ($ / Mcf) | $3.70 | $2.24 | $3.41 | $2.61 | |||||||||||
BOE Production (b) | 279,100 | 140,100 | 776,000 | 416,300 | |||||||||||
| Average Price ($ / BOE) | $72.11 | $44.17 | $65.83 | $50.92 | |||||||||||
| Well Activity | |||||||||||||||
Mineral Interests Owned (c) | |||||||||||||||
| Net Acres Held By Production | 35,000 | 38,000 | 35,000 | 38,000 | |||||||||||
| Gross Wells Drilled | — | 2 | — | 13 | |||||||||||
| Productive Gross Wells | 543 | 542 | 543 | 542 | |||||||||||
Mineral Interests Leased | |||||||||||||||
Net Acres Held By Production (d) | 35,000 | 36,000 | 35,000 | 36,000 | |||||||||||
| Gross Wells Drilled | 31 | — | 70 | — | |||||||||||
Productive Gross Wells (d) | 449 | 382 | 449 | 382 | |||||||||||
| Total Well Activity | |||||||||||||||
| Net Acres Held By Production | 70,000 | 74,000 | 70,000 | 74,000 | |||||||||||
| Gross Wells Drilled | 31 | 2 | 70 | 13 | |||||||||||
| Productive Gross Wells | 992 | 924 | 992 | 924 | |||||||||||
_____________________
(a) | Includes our share of venture activity in which we own a 50% interest. Our share of natural gas production is 60.9 MMcf and 188.9 MMcf in third quarter and first nine months 2013, and 74.9 MMcf and 247.1 MMcf in third quarter and first nine months 2012. |
(b) | BOE – Barrels of oil equivalent (converting natural gas to oil at 6 Mcfe / Bbl). |
(c) | Includes wells operated by third-party lessees/operators. Represent wells in which we own a royalty or working interest in a producing well. Excludes nine working interest wells in third quarter 2013 and ten working interests wells in third quarter 2012 as we also own a royalty interest in these wells. |
(d) | Excludes 8,000 net acres and 1,181 wells in which we have an overriding royalty interest. |
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FORESTAR GROUP INC.
OIL AND GAS SEGMENT
MINERAL INTERESTS
MINERAL INTERESTS OWNED (a)
Forestar’s oil and gas segment includes approximately 590,000 owned net mineral acres principally located in Texas, Louisiana, Georgia and Alabama.
| State | Unleased | Leased | Held By Production | Total (b) | |||||||
| (Net acres) | |||||||||||
| Texas | 206,000 | 19,000 | 27,000 | 252,000 | |||||||
| Louisiana | 117,000 | 19,000 | 8,000 | 144,000 | |||||||
| Georgia | 152,000 | — | — | 152,000 | |||||||
| Alabama | 40,000 | — | — | 40,000 | |||||||
| California | 1,000 | — | — | 1,000 | |||||||
| Indiana | 1,000 | — | — | 1,000 | |||||||
| 517,000 | 38,000 | 35,000 | 590,000 | ||||||||
_____________________
(a) | Represents net acres and includes ventures. |
(b) | Excludes 477 net mineral acres located in Colorado. |
MINERAL INTERESTS LEASED
Forestar’s oil and gas segment includes approximately 219,000 net mineral acres of leasehold interests principally located in Nebraska, Kansas, Oklahoma, North Dakota and Texas, predominantly as result of our September 28, 2012 acquisition of Credo Petroleum.
| State | Undeveloped | Held By Production (a) | Total | |||||
| Nebraska | 122,000 | 3,000 | 125,000 | |||||
| Kansas | 29,000 | 5,000 | 34,000 | |||||
| Oklahoma | 4,000 | 17,000 | 21,000 | |||||
| Alabama | 10,000 | — | 10,000 | |||||
| Texas | 10,000 | 2,000 | 12,000 | |||||
| North Dakota | 3,000 | 4,000 | 7,000 | |||||
| Other | 6,000 | 4,000 | 10,000 | |||||
| 184,000 | 35,000 | 219,000 | ||||||
_____________________
(a) | Excludes approximately 8,000 net acres of overriding royalty interests. |
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FORESTAR GROUP INC.
OTHER NATURAL RESOURCES SEGMENT
PERFORMANCE METRICS
| Third Quarter | First Nine Months | |||||||||||||||
| Other Natural Resources | 2013 | 2012 | 2013 | 2012 | ||||||||||||
Fiber Sales (a) | ||||||||||||||||
| Pulpwood tons sold | 65,700 | 160,000 | 314,400 | 265,200 | ||||||||||||
| Average pulpwood price per ton | $ | 12.56 | $ | 9.54 | $ | 11.53 | $ | 9.51 | ||||||||
| Sawtimber tons sold | 74,900 | 37,400 | 202,700 | 66,700 | ||||||||||||
| Average sawtimber price per ton | $ | 21.52 | $ | 20.21 | $ | 22.47 | $ | 19.88 | ||||||||
| Total tons sold | 140,600 | 197,400 | 517,100 | 331,900 | ||||||||||||
| Average price per ton | $ | 17.33 | $ | 11.56 | $ | 15.82 | $ | 11.59 | ||||||||
| Recreational Activity | ||||||||||||||||
| Average recreational acres leased | 118,700 | 129,200 | 120,900 | 130,500 | ||||||||||||
| Average price per leased acre | $ | 8.63 | $ | 8.84 | $ | 9.08 | $ | 8.84 | ||||||||
_____________________
(a) | The majority of our fiber sales were to International Paper at market prices. |
9
FORESTAR GROUP INC.
PROJECTS IN ENTITLEMENT
A summary of our real estate projects in the entitlement process (a) at third quarter-end 2013 follows:
| Project | County | Market | Project Acres (b) | |||
| California | ||||||
| Hidden Creek Estates | Los Angeles | Los Angeles | 700 | |||
| Terrace at Hidden Hills | Los Angeles | Los Angeles | 30 | |||
| Georgia | ||||||
| Ball Ground | Cherokee | Atlanta | 500 | |||
| Crossing | Coweta | Atlanta | 230 | |||
| Fincher Road | Cherokee | Atlanta | 3,890 | |||
| Fox Hall | Coweta | Atlanta | 960 | |||
| Garland Mountain | Cherokee/Bartow | Atlanta | 350 | |||
| Martin’s Bridge | Banks | Atlanta | 970 | |||
| Mill Creek | Coweta | Atlanta | 770 | |||
| Serenity | Carroll | Atlanta | 440 | |||
| Wolf Creek | Carroll/Douglas | Atlanta | 12,230 | |||
| Yellow Creek | Cherokee | Atlanta | 1,060 | |||
| Texas | ||||||
| Lake Houston | Harris/Liberty | Houston | 3,700 | |||
| Total | 25,830 | |||||
_____________________
(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. |
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FORESTAR GROUP INC.
REAL ESTATE PROJECTS
A summary of activity within our projects in the development process, which includes entitled (a), developed and under development real estate projects, at third quarter-end 2013 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 | % | 229 | 377 | 2 | 7 | |||||||||
| Pinery West | Douglas | 100 | % | — | 86 | 20 | 94 | |||||||||
| Stonebraker | Weld | 100 | % | — | 603 | — | — | |||||||||
| Tennessee | ||||||||||||||||
| Azalea Park | Williamson | 100 | % | — | 173 | — | — | |||||||||
| Texas | ||||||||||||||||
| Arrowhead Ranch | Hays | 100 | % | — | 387 | — | 6 | |||||||||
| Bar C Ranch | Tarrant | 100 | % | 292 | 813 | — | — | |||||||||
| Barrington Kingwood | Harris | 100 | % | 93 | 87 | — | — | |||||||||
| Cibolo Canyons | Bexar | 100 | % | 783 | 783 | 97 | 53 | |||||||||
| Harbor Lakes | Hood | 100 | % | 209 | 240 | 2 | 19 | |||||||||
| Hunter’s Crossing | Bastrop | 100 | % | 430 | 80 | 38 | 71 | |||||||||
| La Conterra | Williamson | 100 | % | 159 | 342 | — | 58 | |||||||||
| Lakes of Prosper | Collin | 100 | % | 32 | 253 | — | — | |||||||||
| Maxwell Creek | Collin | 100 | % | 866 | 133 | 10 | — | |||||||||
| Oak Creek Estates | Comal | 100 | % | 142 | 505 | 13 | — | |||||||||
| Stoney Creek | Dallas | 100 | % | 149 | 605 | — | — | |||||||||
| Summer Creek Ranch | Tarrant | 100 | % | 855 | 419 | 35 | 44 | |||||||||
| Summer Lakes | Fort Bend | 100 | % | 500 | 630 | 56 | — | |||||||||
| Summer Park | Fort Bend | 100 | % | — | 198 | 28 | 62 | |||||||||
| The Colony | Bastrop | 100 | % | 445 | 704 | 22 | 31 | |||||||||
| The Preserve at Pecan Creek | Denton | 100 | % | 449 | 345 | — | 7 | |||||||||
| Village Park | Collin | 100 | % | 580 | 176 | 3 | 2 | |||||||||
| Westside at Buttercup Creek | Williamson | 100 | % | 1,457 | 38 | 66 | — | |||||||||
| Other projects (10) | Various | 100 | % | 2,107 | 150 | 219 | 35 | |||||||||
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Residential Lots (c) | Commercial Acres (d) | |||||||||||||||
| Project | County | Interest Owned (b) | Lots Sold Since Inception | Lots Remaining | Acres Sold Since Inception | Acres Remaining (f) | ||||||||||
| Georgia | ||||||||||||||||
| Seven Hills | Paulding | 100 | % | 696 | 394 | 26 | 113 | |||||||||
| The Villages at Burt Creek | Dawson | 100 | % | — | 1,715 | — | 57 | |||||||||
| Towne West | Bartow | 100 | % | — | 2,674 | — | 121 | |||||||||
| Other projects (17) | Various | 100 | % | 84 | 3,009 | — | 705 | |||||||||
| Florida | ||||||||||||||||
| Other projects (2) | Various | 100 | % | 301 | — | — | — | |||||||||
| Missouri and Utah | ||||||||||||||||
| Other projects (2) | Various | 100 | % | 500 | 54 | — | — | |||||||||
| 11,358 | 16,137 | 637 | 1,773 | |||||||||||||
| Projects in entities we consolidate | ||||||||||||||||
| Texas | ||||||||||||||||
| City Park | Harris | 75 | % | 1,259 | 52 | 50 | 115 | |||||||||
Lantana (e) | Denton | 55 | % | 864 | 849 | 9 | 3 | |||||||||
| Timber Creek | Collin | 88 | % | — | 614 | — | — | |||||||||
| Willow Creek Farms II | Waller/Fort Bend | 90 | % | 82 | 476 | — | — | |||||||||
| Other projects (2) | Various | Various | 9 | 198 | — | 129 | ||||||||||
| Georgia | ||||||||||||||||
| The Georgian | Paulding | 75 | % | 289 | 1,052 | — | — | |||||||||
| 2,503 | 3,241 | 59 | 247 | |||||||||||||
| Total owned and consolidated | 13,861 | 19,378 | 696 | 2,020 | ||||||||||||
| 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 | % | 282 | 1,411 | — | 59 | |||||||||
Lantana (e) | Denton | Various | 1,163 | 80 | 16 | 42 | ||||||||||
| Long Meadow Farms | Fort Bend | 38 | % | 1,159 | 643 | 138 | 161 | |||||||||
| Southern Trails | Brazoria | 80 | % | 654 | 337 | — | — | |||||||||
| Stonewall Estates | Bexar | 50 | % | 322 | 64 | — | — | |||||||||
| Other projects (1) | Nueces | 50 | % | — | — | — | 15 | |||||||||
| Total in ventures | 3,904 | 3,380 | 154 | 289 | ||||||||||||
| Combined total | 17,765 | 22,758 | 850 | 2,309 | ||||||||||||
_____________________
(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 or accounted for using the equity method. |
(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. |
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(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 23 partnerships in which our voting interests range from 25 percent to 55 percent. We account for two of these partnerships using the equity method and we consolidate the remaining partnerships. |
(f) | Excludes acres associated with commercial and income producing properties. |
A summary of our significant commercial and income producing properties at third quarter-end 2013 follows:
| Project | County | Market | Interest Owned (a) | Type | Acres | Description | ||||||||
| Radisson Hotel | Travis | Austin | 100 | % | Hotel | 2 | 413 guest rooms and suites | |||||||
Eleven (b) | Travis | Austin | 25 | % | Multifamily | 3 | 257-unit luxury apartment | |||||||
360° (b) | Arapahoe | Denver | 20 | % | Multifamily | 4 | 304-unit luxury apartment | |||||||
Midtown Cedar Hill (b) | Dallas | Dallas | 100 | % | Multifamily | 13 | 354-unit luxury apartment | |||||||
_____________________
(a) | Interest owned reflects our total interest in the project, whether owned directly or indirectly. |
(b) | Construction in progress. |
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