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Forestar Group Inc. Reports Second Quarter 2014 Results

AUSTIN, Texas--(BUSINESS WIRE)--Aug. 6, 2014-- Forestar Group Inc. (NYSE: FOR) today reported second quarter 2014 net income of approximately $14.8 million, or $0.34 per diluted share outstanding, compared with second quarter 2013 net income of approximately $0.5 million, or $0.02 per diluted share outstanding.

“During second quarter, residential lot sales remained strong and we are developing lots commensurate with inventories and home buyer demand. Multifamily market conditions remain favorable in our target markets, and we continue to acquire sites in 'A' locations to grow our business. In addition, oil and gas working interest production grew significantly, driven principally by new wells in the Bakken/Three Forks generating strong initial production. We are on track to deliver our Growing FORward strategic initiatives, which are focused on increasing total segment earnings, return on assets and opportunistically selling non-core assets. Our balance sheet strength, improving cash flows and significant liquidity are expected to adequately fund these initiatives,” said Jim DeCosmo, president and chief executive officer of Forestar Group.

Second Quarter 2014 Significant Highlights

  • Sold 537 developed residential lots, up nearly 50% compared with second quarter 2013
  • Converted over 10,000 acres of timber leases into ownership of 5,400 acres of undeveloped land from Ironstob venture, resulting in a $10.5 million gain
  • Increased working interest oil production over 65% compared with second quarter 2013, with 31 new gross wells generating initial production
  • Sold interest in 97 gross (6 net) non-core producing oil and gas wells in Oklahoma for a gain of $4.5 million and sold leasehold interests in 223 net mineral acres in North Dakota for a gain of $1.2 million

Forestar manages its operations through three business segments: real estate, oil and gas and other natural resources.

REAL ESTATE

Second Quarter 2014 Significant Highlights (Includes Ventures)

  • Sold 537 developed residential lots at almost $64,100 per lot; highest quarterly average lot price since 2009
  • Sold 79 acres of residential tracts for $63,700 per acre
  • Sold over 3,200 acres of undeveloped land for nearly $7.9 million
  • Converted over 10,000 acres of timber leases into ownership of 5,400 acres of undeveloped land from Ironstob venture

Segment Financial Results:

     
 
($ in millions) 2Q 2014 2Q 2013 1Q 2014
Segment Revenues $ 55.2 $ 41.2 $ 65.5
Segment Earnings $ 27.3 $ 8.1 $ 23.6
 

In second quarter 2014, residential lot sales were up almost 50% compared with second quarter 2013, with average lot prices and gross profit up 11% over that same period. Second quarter 2014 real estate segment earnings were higher compared with second quarter 2013 principally due to a $10.5 million gain associated with the exchange of over 10,000 acres of timber leases for 5,400 acres of undeveloped land from the Ironstob venture, and higher residential lot and undeveloped land sales. Real estate segment earnings increased in second quarter 2014 compared with first quarter 2014 primarily due to the $10.5 million gain associated with the exchange of timber leases for undeveloped land from Ironstob venture. First quarter 2014 real estate segment results include earnings of $13.2 million associated with the sale of approximately 8,400 acres of undeveloped land.

OIL AND GAS

Second Quarter 2014 Significant Highlights (Includes Ventures)

  • Increased total oil production by over 43% compared with second quarter 2013, principally due to working interest investments primarily targeting the Bakken/Three Forks and the Lansing-Kansas City formations
  • Sold interest in 97 gross (6 net) non-core producing oil and gas wells in Oklahoma for a gain of $4.5 million and sold leasehold interests in 223 net mineral acres in North Dakota for a gain of $1.2 million
  • Added 31 gross oil and gas wells, 5 Bakken/Three Forks gross wells waiting on completion at quarter-end
  • Leased nearly 1,400 net fee mineral acres to third parties, principally in Louisiana and Texas

Segment Financial Results:

     
($ in millions) 2Q 2014 2Q 2013 1Q 2014
Segment Revenues $ 24.4 $ 15.8 $ 17.6
Segment Earnings $ 9.5 $ 4.2 $ 0.8
 

Oil and gas segment earnings increased in second quarter 2014 compared with second quarter 2013 and first quarter 2014 principally due to $5.7 million in earnings associated with the sale of various oil and gas properties in Oklahoma and North Dakota and higher working interest production volumes, partially offset by higher exploration, production, depletion and operating expenses, and lower production volumes and delay rental revenues from owned mineral interests. Second quarter 2014 oil and gas segment earnings includes $2.1 million of dry hole expense associated with a working interest in an exploratory well in East Texas.

OTHER NATURAL RESOURCES

Second Quarter 2014 Significant Highlights (Includes Ventures)

  • Signed amended groundwater reservation agreement, generating $0.7 million in earnings
  • Sold nearly 107,800 tons of fiber for $16.86 per ton

Segment Financial Results:

     
($ in millions) 2Q 2014 2Q 2013 1Q 2014
Segment Revenues $ 3.5 $ 3.0 $ 1.6
Segment Earnings $ 2.1 $ 1.0 ($0.5 )
 

Second quarter 2014 other natural resources segment results increased compared with second quarter 2013 and first quarter 2014 principally due to $0.7 million in earnings from a groundwater reservation agreement and a $0.7 million gain on termination of a timber lease in connection with the Ironstob venture.

OUTLOOK

Capitalizing on Low Lot Inventory and Solid Demand

"Our real estate markets remain favorable and we are well positioned to continue to capitalize on the housing recovery by growing residential lot sales and commercial and residential tract sales. We anticipate residential lot sales in 2014 to be in the range of 2,200 - 2,300 lots, up over 20% compared with 2013. Our multifamily team continues to build a solid pipeline of development sites, with our Eleven project in Austin now substantially complete, over 85% leased and on target for sale in 2014. In second quarter 2014, we acquired an additional multifamily site in Austin, Texas and began construction on a community near Denver. We will continue to evaluate and acquire additional residential and multifamily sites to further develop our real estate pipeline.

Working Interest Production Expected to Increase 30% in Second Half of 2014

“During second quarter, we continued to invest in exploration and drilling activity, growing production, reserves and value. Drilling and completion activity increased in second quarter, with 17 gross Bakken/Three Forks wells (7% average working interest) generating initial production and 5 gross Bakken/Three Forks wells waiting on completion at quarter end. Operators in the Bakken/Three Forks formations continue to shift to pad drilling and are generating improved well results with increased production and lower drilling costs. In addition, exploration and drilling activity in Kansas and Nebraska continued to see favorable success rates and our addition of approximately 77,000 leasehold mineral acres in the Lansing-Kansas City formation during second quarter should further develop a solid pipeline of drilling prospects. As a result, working interest production is expected to increase 30% in the second half of 2014 compared with the first six months of 2014. In addition, we anticipate 2014 total oil and gas production will exceed 1.2 million BOE (barrel of oil equivalent), a 15% increase compared with 2013 levels.

Balance Sheet, Cash Flow and Liquidity Expected to Adequately Fund Growing FORward Initiatives

“We continue to see significant opportunities for growth through disciplined investments in our real estate and oil and gas businesses. Our strong balance sheet, improving cash flows and significant liquidity are expected to adequately fund our Growing FORward strategic initiatives,” concluded Mr. DeCosmo.

The Company will host a conference call on August 6, 2014 at 10:00 a.m. ET to discuss results of second quarter 2014. 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 1-866-543-6403 at least 15 minutes prior to the start of the meeting. Those wishing to access the call from outside North America should dial 1-617-213-8896. 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 13170686.

About Forestar Group

Forestar Group Inc. operates in three business segments: real estate, oil and gas and other natural resources. At the end of second quarter 2014, the real estate segment owns directly or through ventures almost 121,000 acres of real estate located in ten states and 13 markets in the U.S. The real estate segment has 11 real estate projects representing approximately 24,400 acres currently in the entitlement process, and 73 entitled, developed and under development projects in eight states and 13 markets encompassing over 11,500 acres, comprised of almost 18,100 planned residential lots and approximately 2,000 commercial acres. The oil and gas segment includes approximately 935,000 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 approximately 345,000 net acres of leasehold interests principally located in Nebraska, Kansas, Oklahoma, North Dakota and Texas. These leasehold interests include about 8,000 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.

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 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 rates or availability; lengthy and uncertain entitlement processes; cyclically 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.

   
FORESTAR GROUP INC.
(UNAUDITED)

Business Segments

 
Second Quarter First Six Months
  2014       2013     2014       2013  
(In thousands)
Revenues:
Real estate (a) $ 55,173 $ 41,219 $ 120,653 $ 119,908
Oil and gas 24,377 15,831 41,931 31,335
Other natural resources   3,463     3,029     5,034     6,307  
Total revenues $ 83,013   $ 60,079   $ 167,618   $ 157,550  
Segment earnings:
Real estate $ 27,297 $ 8,104 $ 50,872 $ 27,550
Oil and gas 9,522 4,243 10,329 9,370
Other natural resources   2,079     991     1,551     2,243  
Total segment earnings 38,898 13,338 62,752 39,163
Items not allocated to segments:
General and administrative expense (5,566 ) (5,329 ) (10,734 ) (10,287 )
Share-based compensation expense (b) (3,219 ) (1,460 ) (3,532 ) (11,875 )
Interest expense (7,370 ) (5,122 ) (12,873 ) (9,661 )
Other corporate non-operating income   130     25     252     56  
Income before taxes 22,873 1,452 35,865 7,396
Income tax expense   (8,051 )   (911 )   (12,709 )   (2,904 )
Net income attributable to Forestar Group Inc. $ 14,822   $ 541   $ 23,156   $ 4,492  
 
Net income per common share:
Diluted $ 0.34 $ 0.02 $ 0.53 $ 0.13
 
Weighted average common shares outstanding (in millions):
Diluted (c) 43.7 36.1 43.7 35.9
  Second Quarter
Supplemental Financial Information:   2014     2013
(In thousands)
Cash and cash equivalents $ 184,168 $ 69,138
 
Borrowings under credit facility 200,000
Secured senior notes 250,000
Convertible senior notes, net of discount 101,542 98,353
Tangible equity unit notes, net of discount 21,208
Other debt (d)   27,578   33,294
Total debt $ 400,328 $ 331,647
Net debt $ 216,160 $ 262,509

_____________________

(a) First six months 2013 real estate revenues include $41 million from the first quarter 2013 sale of Promesa, a wholly-owned multifamily community we developed in Austin.

(b) First six months 2014 share-based compensation expense decreased principally as result of a decrease in our stock price since year-end 2013, compared with an increase in our stock price in first six months 2013 since year-end 2012, which impacted the value of vested cash-settled awards.

(c) Second quarter and first six months 2014 weighted average diluted shares outstanding includes 7.9 million associated with our tangible equity units issued during fourth quarter 2013.

(d) Consists principally of consolidated venture non-recourse debt. Excludes approximately $100.1 million of unconsolidated venture debt and approximately $8.2 million of outstanding letters of credit.

   
FORESTAR GROUP INC.
REAL ESTATE SEGMENT
PERFORMANCE METRICS
 
Second Quarter First Six Months
  2014     2013   2014     2013
REAL ESTATE
Owned, Consolidated & Equity Method Ventures:
Residential Lots Sold 537 360 1,511 806
Revenue per Lot Sold $ 64,056 $ 57,588 $ 50,228 $ 54,432
Commercial Acres Sold 3 34 3 37
Revenue per Commercial Acre Sold $ 96,774 $ 103,102 $ 96,774 $ 125,706
Undeveloped Acres Sold 3,208 1,042 12,537 1,961
Revenue per Acre Sold $ 2,460 $ 2,579 $ 2,202 $ 2,753
Owned & Consolidated Ventures:
Residential Lots Sold 481 259 1,317 614
Revenue per Lot Sold $ 60,651 $ 57,154 $ 47,644 $ 54,440
Commercial Acres Sold 3 32 3 35
Revenue per Commercial Acre Sold $ 96,774 $ 74,166 $ 96,774 $ 100,311
Undeveloped Acres Sold 2,950 1,000 12,279 1,919
Revenue per Acre Sold $ 2,473 $ 2,576 $ 2,200 $ 2,755
Ventures Accounted For Using the Equity Method:
Residential Lots Sold 56 101 194 192
Revenue per Lot Sold $ 93,306 $ 58,700 $ 67,772 $ 54,407
Commercial Acres Sold 2 2
Revenue per Commercial Acre Sold $ $ 652,886 $ $ 652,886
Undeveloped Acres Sold 258 42 258 42
Revenue per Acre Sold $ 2,306 $ 2,650 $ 2,306 $ 2,650
         
SECOND QUARTER 2014
REAL ESTATE PIPELINE
 
Real Estate Undeveloped

In
Entitlement
Process

Entitled

Developed &
Under
Development

Total Acres (a)
Undeveloped Land
Owned 79,563
Ventures 5,073 84,636
Residential
Owned 21,762 7,794 535
Ventures 1,105 131 31,327
Commercial
Owned 2,668 1,062 523
Ventures     250 123 4,626
Total Acres 84,636 24,430 10,211 1,312 120,589
 
Estimated Residential Lots 16,100 1,998 18,098

_____________________

(a) In addition, at second quarter-end 2014, Forestar owns a 58% interest in a venture which controls approximately 2,000 acres of undeveloped land in Georgia with minimal investment. Excludes acres associated with fully developed commercial and income producing properties.

   
FORESTAR GROUP INC.
OIL AND GAS SEGMENT
PERFORMANCE METRICS
 
Second Quarter First Six Months
  2014     2013   2014     2013
Leasing Activity from Owned Mineral Interests
Acres Leased 1,380 515 3,121 825
Average Bonus / Acre $ 352 $ 343 $ 347 $ 333
Delay Rentals Received $ 14,000 $ 6,000 $ 14,000 $ 464,000
Oil & Gas Production

Royalty Interests (a)

Gross Wells 547 543 547 543
Oil Production (Barrels) 30,400 40,600 63,100 88,900
Average Oil Price ($ / Barrel) $ 91.75 $ 80.75 $ 88.44 $ 83.56
Gas Production (MMcf) 232.4 322.2 518.5 699.4
Average Gas Price ($ / Mcf) $ 4.61 $ 3.18 $ 4.10 $ 3.11
BOE Production (b) 69,100 94,400 149,500 205,400
Average Price ($ / BOE) $ 55.83 $ 45.66 $ 51.55 $ 46.73

Working Interests

Gross Wells 410 449 410 449
Oil Production (Barrels) 206,900 125,200 346,200 224,800
Average Oil Price ($ / Barrel) $ 92.90 $ 87.11 $ 90.77 $ 88.73
Gas Production (MMcf) 227.5 183.1 427.9 399.7
Average Gas Price ($ / Mcf) $ 4.39 $ 3.36 $ 4.84 $ 3.53
BOE Production (b) 244,800 155,700 417,500 291,500
Average Price ($ / BOE) $ 82.59 $ 73.99 $ 80.22 $ 73.29

Total Oil & Gas Interests

Gross Wells (c) 948 983 948 983
Oil Production (Barrels) 225,300 152,700 382,300 286,100
Average Oil Price ($ / Barrel) $ 95.38 $ 90.64 $ 93.75 $ 92.86
NGL Production (Barrels) 12,000 13,100 27,000 27,600
Average NGL Price ($ / Barrel) $ 43.24 $ 26.49 $ 43.17 $ 29.37
Total Oil Production (Barrels) 237,300 165,800 409,300 313,700
Average Total Oil Price ($ / Barrel) $ 92.75 $ 85.55 $ 90.41 $ 87.26
Gas Production (MMcf) 459.9 505.3 946.4 1,099.1
Average Gas Price ($ / Mcf) $ 4.50 $ 3.25 $ 4.43 $ 3.26
BOE Production (b) 313,900 250,100 567,000 496,900
Average Price ($ / BOE) $ 76.70 $ 63.30 $ 72.66 $ 62.31
Average Daily Production

BOE per Day

Royalty Interests 760 1,037 828 1,136
Working Interests   2,690   1,711   2,305   1,610
Total 3,450 2,748 3,133 2,746

Working Interests BOE per Day

North Dakota 1,566 814 1,188 669
Kansas/Nebraska 586 351 562 339
Texas, Louisiana and Other   538   546   555   602
Total 2,690 1,711 2,305 1,610

_____________________

(a) Includes our share of venture activity in which we own a 50% interest. Our share of natural gas production is 50.5 MMcf and 103.2 MMcf in second quarter and first six months 2014, and 57.8 MMcf and 128.0 MMcf in second quarter and first six months 2013.

(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 second quarter 2014 and 2013 as we also own a royalty interest in these wells.

 
FORESTAR GROUP INC.
OIL AND GAS SEGMENT
 
Second Quarter First Six Months
2014   2013 2014   2013
Well Activity

Mineral Interests Owned (a)

Net Acres Held By Production 36,000 36,000 36,000 36,000
Gross Wells Drilled
Productive Gross Wells 547 543 547 543

Mineral Interests Leased

Net Acres Held By Production (b) 41,000 33,000 41,000 33,000
Gross Wells Drilled 45 18 66 39
Productive Gross Wells (c) 401 440 401 440

Total Well Activity

Net Acres Held By Production 77,000 69,000 77,000 69,000
Gross Wells Drilled 45 18 66 39
Productive Gross Wells 948 983 948 983

_____________________

(a) 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 at second quarter-end 2014 and 2013 as we also own a royalty interest in these wells.

(b) Excludes 8,000 net acres in which we have an overriding royalty interest.

(c) Exclude 1,181 wells in which we have an overriding royalty and nine working interest wells as we also own a royalty interest in these wells.

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

 

(Net acres)

Texas 208,000 17,000 27,000 252,000
Louisiana 132,000 3,000 9,000 144,000
Georgia 152,000 152,000
Alabama 40,000 40,000
California 1,000 1,000
Indiana 1,000   1,000
534,000   20,000 36,000 590,000

_____________________

(a) Represents net acres and includes ventures.

MINERAL INTERESTS LEASED

Forestar’s oil and gas segment includes approximately 345,000 net mineral acres of leasehold interests principally located in Nebraska, Kansas, Oklahoma, Texas and North Dakota.

State   Undeveloped   Held By

Production (a)

  Total
Nebraska 223,000 7,000 230,000
Kansas 25,000 6,000 31,000
Oklahoma 23,000 17,000 40,000
Alabama 8,000 8,000
Texas 10,000 3,000 13,000
North Dakota 4,000 4,000 8,000
Other 11,000 4,000 15,000
304,000 41,000 345,000

_____________________

(a) Excludes approximately 8,000 net acres of overriding royalty interests.

   
FORESTAR GROUP INC.
OTHER NATURAL RESOURCES SEGMENT
PERFORMANCE METRICS
 
Second Quarter First Six Months
  2014     2013   2014     2013
Fiber Sales
Pulpwood tons sold 58,200 128,100 86,400 248,700
Average pulpwood price per ton $ 11.42 $ 8.66 $ 10.85 $ 9.19
Sawtimber tons sold 49,600 56,900 78,500 127,800
Average sawtimber price per ton $ 23.23 $ 23.87 $ 22.67 $ 23.04
 
Total tons sold 107,800 185,000 164,900 376,500
Average stumpage price per ton (a) $ 16.86 $ 13.34 $ 16.48 $ 13.89
 
Recreational Activity
Average recreational acres leased 110,000 121,800 113,200 122,200
Average price per leased acre $ 9.69 $ 9.29 $ 9.41 $ 9.29

_____________________

(a) Average stumpage price per ton is based on gross revenues less cut and haul costs.

FORESTAR GROUP INC.
PROJECTS IN ENTITLEMENT

A summary of our real estate projects in the entitlement process (a) at second quarter-end 2014 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
Garland Mountain Cherokee/Bartow Atlanta 350
Martin’s Bridge Banks Atlanta 970
Mill Creek Coweta Atlanta 770
Wolf Creek Carroll/Douglas Atlanta 12,230
Yellow Creek Cherokee Atlanta 1,060
 
Texas
Lake Houston Harris/Liberty Houston 3,700
Total 24,430

_____________________

(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.

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 second quarter-end 2014 follows:

      Residential Lots (c)   Commercial Acres (d)

Project

County Interest

Owned (b)

Lots Sold

Since

Inception

  Lots

Remaining

Acres

Sold

Since

Inception

  Acres

Remaining (e)

Projects we own

California

San Joaquin River Contra Costa/Sacramento 100 % 288

Colorado

Buffalo Highlands Weld 100 % 164
Johnstown Farms Weld 100 % 269 343 2 7
Pinery West Douglas 100 % 45 41 20 94
Stonebraker Weld 100 % 603

Tennessee

Morgan Farms Williamson 100 % 40 133
Weatherford Estates Williamson 100 % 17

Texas

Arrowhead Ranch Hays 100 % 387 6
Bar C Ranch Tarrant 100 % 292 813
Barrington Kingwood Harris 100 % 120 60
Cibolo Canyons Bexar 100 % 831 819 130 20
Harbor Lakes Hood 100 % 215 234 2 19
Hunter’s Crossing Bastrop 100 % 471 39 41 62
La Conterra Williamson 100 % 197 133 58
Lakes of Prosper Collin 100 % 65 220
Lantana Denton 100 % 1,013 749 9 3
Maxwell Creek Collin 100 % 897 102 10
Oak Creek Estates Comal 100 % 188 459 13
Parkside Collin 100 % 200
Stoney Creek Dallas 100 % 221 533
Summer Creek Ranch Tarrant 100 % 942 332 35 44
Summer Lakes Fort Bend 100 % 610 520 56
Summer Park Fort Bend 100 % 69 129 28 62
The Colony Bastrop 100 % 448 701 22 31
The Preserve at Pecan Creek Denton 100 % 506 288 7
Village Park Collin 100 % 749 7 3 2
Westside at Buttercup Creek Williamson 100 % 1,491 6 66
Other projects (9) Various 100 % 1,727 277 133 7

Georgia

Seven Hills Paulding 100 % 750 340 26 113
The Villages at Burt Creek Dawson 100 % 1,715 57
Other projects (18) Various 100 % 242 2,851 705

Other

Other projects (3) Various 100 % 522 431
12,920 13,646 596 1,585
 
Residential Lots (c) Commercial Acres (d)

Project

County   Interest
Owned (b)
Lots Sold

Since

Inception

Lots

Remaining

Acres

Sold

Since

Inception

Acres

Remaining (e)

Projects in entities we consolidate

Texas

City Park Harris 75 % 1,311 458 50 115
Timber Creek Collin 88 % 614
Willow Creek Farms II Waller/Fort Bend 90 % 90 160
Other projects (2) Various Various 9 199 18

Georgia

The Georgian Paulding 75 % 535
1,945 1,431 50 133
Total owned and consolidated 14,865 15,077 646 1,718
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 % 314 1,379 8 51
Lantana - Rayzor Ranch Denton 25 % 1,163 16 42
Long Meadow Farms Fort Bend 38 % 1,307 495 183 120
Southern Trails Brazoria 80 % 739 252
Stonewall Estates Bexar 50 % 340 50
Other projects (2) Various Various 15
Total in ventures 4,187 3,021 207 240
Combined total 19,052 18,098 853 1,958

_____________________

(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.

(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) Excludes acres associated with commercial and income producing properties.

A summary of our significant commercial and income producing properties at second quarter-end 2014 follows:

Project   Market   Interest

Owned (a)

  Type   Acres   Description
Radisson Hotel Austin 100 % Hotel 2 413 guest rooms and suites
Eleven (b) Austin 25 % Multifamily 3 257-unit luxury apartment
360° (c) Denver 20 % Multifamily 4 304-unit luxury apartment
Midtown Cedar Hill (c) Dallas 100 % Multifamily 13 354-unit luxury apartment
Acklen (c) Nashville 30 % Multifamily 4 320-unit luxury apartment

_____________________

(a) Interest owned reflects our total interest in the project, whether owned directly or indirectly.

(b) Construction substantially complete.

(c) Construction in progress.

Source: Forestar Group Inc.

Forestar Group Inc.
Anna E. Torma, 512-433-5312