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Forestar Group Inc. Reports Third Quarter 2014 Results

AUSTIN, Texas--(BUSINESS WIRE)--Nov. 5, 2014-- Forestar Group Inc. (NYSE: FOR) today reported third quarter 2014 net income of approximately $5.2 million, or $0.12 per diluted share outstanding, compared with third quarter 2013 net income of approximately $11.8 million, or $0.33 per diluted 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.

Subsequent Events

  • $46.5 MILLION RECEIVED FROM CIBOLO CANYONS SPECIAL IMPROVEMENT DISTRICT
  • PLANS TO REPURCHASE UP TO $55 MILLION IN STOCK UNDER EXISTING SHARE REPURCHASE PROGRAM

“On October 24, 2014 we received $46.5 million from the Cibolo Canyons Special Improvement District (CCSID). The proceeds from CCSID were associated with a $48.9 million Hotel Occupancy and Sales and Use Tax Revenue Bond issued by CCSID on October 24, 2014. Proceeds received from the CCSID, along with available liquidity, are expected to be used to repurchase up to $55 million in common stock, which today, represents almost 10% of the company's current market capitalization. The successful revenue bond issuance by CCSID is a reflection of the tremendous value that has been realized through the vision and execution of our Cibolo Canyons mixed-use development including the award-winning JW Marriott San Antonio Hill Country Resort and Spa. Following these share repurchases, we expect to have adequate liquidity to fund and deliver our Growing FORward strategic initiatives, focused on increasing total segment earnings, return on assets and opportunistically selling non-core assets,” said Jim DeCosmo, president and chief executive officer of Forestar Group.

Third Quarter 2014 Significant Highlights

  • Sold 323 developed residential lots, with average lot prices and profit per lot up over 30% compared with third quarter 2013
  • Acquired our partner's 75% interest in the Eleven multifamily venture in Austin for $21.5 million, resulting in a $7.6 million gain, reflecting the fair market value of the project on the date of acquisition
  • Increased working interest oil production over 55% compared with third quarter 2013
  • Added nine new Bakken/Three Forks gross wells with strong initial production, including one 19% working interest well with initial production of 4,128 barrels of oil equivalent per day, the highest production rate of any Bakken/Three Forks well we have participated in to date

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

REAL ESTATE

Third Quarter 2014 Significant Highlights (Includes Ventures)

  • Sold 323 developed residential lots; highest quarterly average lot price and profit per lot since becoming stand-alone public company
  • Acquired our partner's 75% interest in the Eleven multifamily venture in Austin for $21.5 million, resulting in a $7.6 million gain, reflecting the fair market value of the project on the date of acquisition
  • Sold four commercial acres for $589,200 per acre
  • Sold over 635 acres of undeveloped land for nearly $3,200 per acre
           

Segment Financial Results:

 
($ in millions) 3Q 2014 3Q 2013 2Q 2014
Segment Revenues $ 32.4 $ 50.4 $ 55.2
Segment Earnings $ 16.0 $ 13.2 $ 27.3
 

Real estate segment earnings were up in third quarter 2014 compared with third quarter 2013 principally due to a $7.6 million gain associated with the acquisition of our partner's interest in the Eleven multifamily venture, which more than offset lower residential lot and undeveloped land sales. In third quarter 2014, average lot prices were over $73,650 per lot and average gross profit was almost $34,900 per lot, the highest average quarterly lot prices and margins reported, reflecting stable homebuilder demand in our markets. Real estate segment earnings decreased in third quarter 2014 compared with second quarter 2014 primarily due to a $10.5 million gain associated with the exchange of timber leases for undeveloped land from Ironstob venture and higher residential lot, tract and undeveloped land sales in second quarter 2014.

OIL AND GAS

Third Quarter 2014 Significant Highlights (Includes Ventures)

  • Increased oil production by nearly 39% compared with third quarter 2013, principally due to working interest investments in the Bakken/Three Forks and the Lansing-Kansas City formations
  • Generated gains of $3.3 million principally associated with the sale of leasehold interests in 348 net mineral acres in North Dakota and acquired 558 net mineral acres of leasehold interests in Bakken/Three Forks
  • Added nine Bakken/Three Forks gross wells; 23 Bakken/Three Forks gross wells waiting on completion at quarter-end
           

Segment Financial Results:

 
($ in millions) 3Q 2014 3Q 2013 2Q 2014
Segment Revenues $ 24.1 $ 22.1 $ 24.4
Segment Earnings $ 6.0 $ 8.5 $ 9.5
 

Oil and gas segment earnings decreased in third quarter 2014 compared with third quarter 2013 and second quarter 2014 principally due to higher exploration costs associated with our working interest investments, lower oil prices, and lower production volumes related to our owned mineral interests, which were partially offset by $3.3 million in gains principally associated with the sale of 348 net acres of leasehold interest in the Bakken/Three Forks, and increased working interest oil production. Third quarter 2014 exploration costs include a $2.3 million dry hole charge associated with an exploratory well in Oklahoma. Second quarter 2014 oil and gas segment earnings include $5.7 million in gains associated with the sale of various oil and gas properties in Oklahoma and North Dakota.

OTHER NATURAL RESOURCES

Third Quarter 2014 Significant Highlights (Includes Ventures)

  • Sold nearly 93,000 tons of fiber for $13.52 per ton
  • Generated $0.2 million in earnings related to previously announced groundwater reservation agreement
  • Sold water rights related to real estate project in Colorado, generating gain of almost $0.2 million
           

Segment Financial Results:

 
($ in millions) 3Q 2014 3Q 2013 2Q 2014
Segment Revenues $ 2.3 $ 2.7 $ 3.5
Segment Earnings $ 0.7 $ 0.5 $ 2.1
 

Third quarter 2014 other natural resources segment results increased compared with third quarter 2013 principally due to $0.2 million in earnings associated with a groundwater reservation agreement and a $0.2 million gain associated with the sale of water rights related to a real estate project in Colorado.

OUTLOOK

Real Estate Markets Remain Stable

“We are well positioned to capitalize on the housing recovery through 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 from a pipeline of 38 well-located communities. In 2015, we expect 40 communities to generate sales to meet homebuilder demand. Our multifamily team continues to acquire and develop high-quality multifamily communities, with four multifamily projects currently under construction at end of third quarter and four future development sites in our pipeline. During third quarter we opportunistically acquired our partner’s 75% ownership in the Eleven venture, resulting in an attractive investment basis within a strong multifamily submarket in downtown Austin which has benefited from solid rent growth and high occupancy levels. Going forward, our 100% ownership of the Eleven multifamily community is expected to provide Forestar with multiple options to continue to realize the value we have created with this project. We plan to continue to evaluate and acquire additional well-located residential and multifamily sites going forward.

Production and Well Performance Increasing; Exploring Position in Prospective Resource Play

“We continue to invest in exploration and drilling, growing production, reserves and value. Drilling and completion activity continued in third quarter, with nine gross Bakken/Three Forks wells (10% average working interest) generating initial production and approximately 10 - 15 gross Bakken/Three Forks wells anticipated to begin production in fourth quarter 2014. Well performance in the Bakken/Three Forks in 2014 continues to improve and outperform underwriting expectations. Working interest production is expected to increase over 40% in 2014 compared with 2013, resulting in approximately 1.2 million BOE of total production in 2014, up 15% compared with 2013. However, lower oil pricing is expected to reduce fourth quarter 2014 segment earnings. In addition to our working interest investment opportunities in the Bakken/Three Forks and Lansing-Kansas City formations, we have secured leasehold positions in 24,000 net mineral acres in a prospective resource play in Oklahoma and commenced exploratory drilling.

Focused on Delivering Growing FORward Initiatives

“We remain focused on executing our Growing FORward strategic initiatives through disciplined investments in our real estate and oil and gas businesses. Stronger than expected cash flows and available liquidity, combined with $46.5 million in cash proceeds from the Cibolo Canyons Special Improvement District, are expected to be used to repurchase up to $55 million in common stock, which today, represents almost 10% of the company's current market capitalization. Repurchases will be made under the company's existing share repurchase program and will be accomplished from time to time through open market or privately negotiated transactions, subject to market conditions, legal requirements and other factors. Following these share repurchases, we anticipate maintaining sufficient available liquidity which is expected to adequately fund our Growing FORward strategic initiatives, which are focused on increasing total segment earnings, return on assets and opportunistically selling non-core assets,” concluded Mr. DeCosmo.

The Company will host a conference call on November 5, 2014 at 10:00 am ET to discuss results of third 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 1-877-299-4454 at least 15 minutes prior to the start of the meeting. Those wishing to access the call from outside North America should dial 1-617-597-5447. 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 23767820.

About Forestar Group

Forestar Group Inc. operates in three business segments: real estate, oil and gas and other natural resources. At third quarter-end 2014, the real estate segment owns directly or through ventures almost 120,000 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 11,300 acres, comprised of almost 17,800 planned residential lots and approximately 2,000 commercial acres. The oil and gas segment includes approximately 948,000 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 358,000 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, 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 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

 

 
Third Quarter First Nine Months
2014     2013 2014     2013
(In thousands)
Revenues:
Real estate (a) $ 32,445 $ 50,356 $ 153,098 $ 170,264
Oil and gas 24,145 22,095 66,076 53,430
Other natural resources 2,250   2,656   7,284   8,963  
Total revenues $ 58,840   $ 75,107   $ 226,458   $ 232,657  
Segment earnings:
Real estate $ 15,987 $ 13,197 $ 66,859 $ 40,747
Oil and gas 6,002 8,499 16,331 17,869
Other natural resources 669   549   2,220   2,792  
Total segment earnings 22,658 22,245 85,410 61,408
Items not allocated to segments:
General and administrative expense (5,190 ) (4,648 ) (15,924 ) (14,935 )
Share-based compensation expense (b) (991 ) (3,492 ) (4,523 ) (15,367 )
Interest expense (8,634 ) (5,231 ) (21,507 ) (14,892 )
Other corporate non-operating income 139   24   391   80  
Income before taxes 7,982 8,898 43,847 16,294
Income tax (expense) benefit (2,755 ) 2,932   (15,464 ) 28  
Net income attributable to Forestar Group Inc. $ 5,227   $ 11,830   $ 28,383   $ 16,322  
 
Net income per common share:
Diluted $ 0.12 $ 0.33 $ 0.65 $ 0.45
 
Weighted average common shares outstanding (in millions):
Diluted (c) 43.9 36.1 43.8 35.9
 
     
Third Quarter
Supplemental Financial Information: 2014     2013
(In thousands)
Cash and cash equivalents $ 170,606 $ 54,769
 
Borrowings under credit facility 200,000
Secured senior notes 250,000
Convertible senior notes, net of discount 102,368 99,122
Tangible equity unit notes, net of discount 19,192
Other debt (d) 57,735   36,049
Total debt $ 429,295   $ 335,171
Net debt $ 258,689   $ 280,402
_____________________

(a)

  First nine 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 nine 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 nine months 2013 since year-end 2012, which impacted the value of vested cash-settled awards.

(c)

Third quarter and first nine months 2014 weighted average diluted shares outstanding includes 7.9 million associated with our tangible equity units issued during fourth quarter 2013.

(d)

Third quarter-end 2014 consists principally of $38 million of senior secured construction loans for two multifamily properties. Excludes approximately $91.2 million of unconsolidated venture debt and approximately $10.1 million of outstanding letters of credit.
 
           
FORESTAR GROUP INC.
REAL ESTATE SEGMENT
PERFORMANCE METRICS
 
Third Quarter First Nine Months
2014     2013 2014     2013
REAL ESTATE
Owned, Consolidated & Equity Method Ventures:
Residential Lots Sold 323 547 1,834 1,353

Revenue per Lot Sold

$ 73,653 $ 56,473 $ 54,354 $ 55,257
Commercial Acres Sold 4 19 7 56
Revenue per Commercial Acre Sold $ 589,203 $ 257,548 $ 369,874 $ 169,725
Undeveloped Acres Sold 637 1,340 13,174 3,301
Revenue per Acre Sold $ 3,179 $ 4,955 $ 2,249 $ 3,647
Owned & Consolidated Ventures:
Residential Lots Sold 286 414 1,603 1,028
Revenue per Lot Sold $ 72,352 $ 56,866 $ 52,052 $ 55,417
Commercial Acres Sold 2 3 37
Revenue per Commercial Acre Sold $ $ 426,554 $ 96,774 $ 115,892
Undeveloped Acres Sold 637 1,314 12,916 3,233
Revenue per Acre Sold $ 3,179 $ 5,001 $ 2,248 $ 3,668
Ventures Accounted For Using the Equity Method:
Residential Lots Sold 37 133 231 325
Revenue per Lot Sold $ 83,711 $ 55,251 $ 70,325 $ 54,752
Commercial Acres Sold 4 17 4 19
Revenue per Commercial Acre Sold $ 589,203 $ 239,710 $ 589,203 $ 277,739
Undeveloped Acres Sold 26 258 68
Revenue per Acre Sold $ $ 2,650 $ 2,306 $ 2,650
 
                   
THIRD QUARTER 2014
REAL ESTATE PIPELINE
 
Real Estate Undeveloped

In
Entitlement
Process

Entitled

Developed &
Under
Development

Total Acres (a)
Undeveloped Land
Owned 78,918
Ventures 5,073 83,991
Residential
Owned 21,762 7,675 556
Ventures 914 207 31,114
Commercial
Owned 2,668 1,065 524
Ventures     247 122 4,626
Total Acres 83,991 24,430 9,901 1,409 119,731
 
Estimated Residential Lots 15,407 2,349 17,756
_____________________
(a)   In addition, at third 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
 
Third Quarter First Nine Months
2014     2013 2014     2013
Leasing Activity from Owned Mineral Interests
Acres Leased 744 7,530 3,865 8,355
Average Bonus / Acre $ 205 $ 260 $ 320 $ 270
Delay Rentals Received $ $ 98,000 $ 14,000 $ 562,000
Oil & Gas Production

Royalty Interests (a)

Gross Wells 547 543 547 543
Oil Production (Barrels) (b) 32,900 41,800 96,000 130,700
Average Oil Price ($ / Barrel) $ 91.08 $ 86.38 $ 89.34 $ 84.47
Gas Production (MMcf) 273.5 304.9 792.0 1,004.3
Average Gas Price ($ / Mcf) $ 4.35 $ 3.69 $ 4.18 $ 3.29
BOE Production (c) 78,500 92,700 228,000 298,100
Average Price ($ / BOE) $ 53.30 $ 51.15 $ 52.15 $ 48.10

Working Interests

Gross Wells 423 458 423 458
Oil Production (Barrels) (b) 229,100 147,100 575,300 371,900
Average Oil Price ($ / Barrel) $ 83.17 $ 98.67 $ 87.74 $ 92.66
Gas Production (MMcf) 226.2 236.5 654.1 636.2
Average Gas Price ($ / Mcf) $ 4.12 $ 3.71 $ 4.59 $ 3.60
BOE Production (c) 266,900 186,400 684,400 477,900
Average Price ($ / BOE) $ 74.91 $ 82.52 $ 78.15 $ 76.89

Total Oil & Gas Interests

Gross Wells (d) 961 992 961 992
Oil Production (Barrels) 250,500 177,500 632,800 463,600
Average Oil Price ($ / Barrel) $ 86.13 $ 100.13 $ 90.73 $ 95.64
NGL Production (Barrels) 11,500 11,400 38,500 39,000
Average NGL Price ($ / Barrel) $ 41.12 $ 30.46 $ 42.56 $ 29.68
Total Oil Production (Barrels) 262,000 188,900 671,300 502,600
Average Total Oil Price ($ / Barrel) $ 84.16 $ 95.95 $ 87.97 $ 90.53
Gas Production (MMcf) 499.7 541.4 1,446.1 1,640.5
Average Gas Price ($ / Mcf) $ 4.24 $ 3.70 $ 4.37 $ 3.41
BOE Production (c) 345,400 279,100 912,400 776,000
Average Price ($ / BOE) $ 70.00 $ 72.11 $ 71.65 $ 65.83
Average Daily Production

BOE per Day

Royalty Interests 853 1,008 835 1,092
Working Interests 2,901 2,026 2,507 1,750
Total 3,754 3,034 3,342 2,842

Working Interests BOE per Day

North Dakota 1,664 795 1,347 711
Kansas/Nebraska 707 535 610 404
Texas, Louisiana and Other 530 696 550 635
Total 2,901 2,026 2,507 1,750
_____________________

(a)

  Includes our share of venture activity in which we own a 50% interest. Our share of natural gas production is 49.1 MMcf and 152.3 MMcf in third quarter and first nine months 2014, and 60.9 MMcf and 188.9 MMcf in third quarter and first nine months 2013.

(b)

Oil production includes natural gas liquids (NGLs).

(c)

BOE – Barrels of oil equivalent (converting natural gas to oil at 6 Mcfe / Bbl).

(d)

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 2014 and 2013 as we also own a royalty interest in these wells.
 
           
FORESTAR GROUP INC.
OIL AND GAS SEGMENT
 
Third Quarter First Nine Months
2014     2013 2014     2013
Well Activity

Mineral Interests Owned (a)

Net Acres Held By Production 36,000 35,000 36,000 35,000
Gross Wells Drilled
Productive Gross Wells 547 543 547 543

Mineral Interests Leased

Net Acres Held By Production (b) 46,000 35,000 46,000 35,000
Gross Wells Drilled 31 31 97 70
Productive Gross Wells (c) 414 449 414 449

Total Well Activity

Net Acres Held By Production 82,000 70,000 82,000 70,000
Gross Wells Drilled 31 31 97 70
Productive Gross Wells 961 992 961 992
_____________________

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

(b)

Excludes approximately 8,000 net acres in which we have an overriding royalty interest.

(c)

Excludes approximately 1,200 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 358,000 net mineral acres of leasehold interests principally located in Nebraska, Kansas, Oklahoma, Texas and North Dakota.

             

State

Undeveloped

Held By
Production (a)

Total
Nebraska 237,000 10,000 247,000
Kansas 19,000 8,000 27,000
Oklahoma 22,000 18,000 40,000
Alabama 8,000 8,000
Texas 11,000 2,000 13,000
North Dakota 4,000 4,000 8,000
Other 11,000 4,000 15,000
312,000 46,000 358,000
_____________________

(a)

  Excludes approximately 8,000 net acres of overriding royalty interests.
 
           
FORESTAR GROUP INC.
OTHER NATURAL RESOURCES SEGMENT
PERFORMANCE METRICS
 
Third Quarter First Nine Months
2014     2013 2014     2013
Fiber Sales
Pulpwood tons sold 71,500 65,700 157,900 314,400
Average pulpwood price per ton $ 11.18 $ 8.85 $ 11.00 $ 9.12
Sawtimber tons sold 21,500 74,900 100,000 202,700
Average sawtimber price per ton $ 21.31 $ 21.52 $ 22.38 $ 22.47
 
Total tons sold 93,000 140,600 257,900 517,100
Average stumpage price per ton (a) $ 13.52 $ 15.60 $ 15.41 $ 14.36
 
Recreational Activity
Average recreational acres leased 107,800 118,700 111,400 120,900
Average price per leased acre $ 8.66 $ 8.63 $ 9.17 $ 9.08
_____________________
(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 third 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 third 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 % 45 128
Weatherford Estates Williamson 100 % 17

Texas

Arrowhead Ranch Hays 100 % 387 6
Bar C Ranch Tarrant 100 % 292 813
Barrington Kingwood Harris 100 % 132 48
Cibolo Canyons Bexar 100 % 867 851 130 20
Harbor Lakes Hood 100 % 217 232 2 19
Hunter’s Crossing Bastrop 100 % 483 27 41 62
La Conterra Williamson 100 % 200 130 58
Lakes of Prosper Collin 100 % 74 211 4
Lantana Denton 100 % 1,065 697 9 3
Maxwell Creek Collin 100 % 912 87 10
Oak Creek Estates Comal 100 % 214 356 13
Parkside Collin 100 % 200
Stoney Creek Dallas 100 % 221 533
Summer Creek Ranch Tarrant 100 % 963 311 35 44
Summer Lakes Fort Bend 100 % 614 516 56
Summer Park Fort Bend 100 % 69 129 28 62
The Colony Bastrop 100 % 449 704 22 31
The Preserve at Pecan Creek Denton 100 % 519 275 7
Village Park Collin 100 % 753 3 3 2
Westside at Buttercup Creek Williamson 100 % 1,496 1 66
Other projects (9) Various 100 % 1,759 245 133 7

Georgia

Seven Hills Paulding 100 % 753 337 26 113
The Villages at Burt Creek Dawson 100 % 1,715 57
Other projects (18) Various 100 % 268 2,825 705

Other

Other projects (3) Various 100 % 526 426
13,205 13,355 596 1,589
 
               
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 % 601
Willow Creek Farms II Waller/Fort Bend 90 % 90 160
Other projects (2) Various Various 10 198 18

Georgia

The Georgian Paulding 75 % 535
1,946 1,417 50 133
Total owned and consolidated 15,151 14,772 646 1,722
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 % 315 1,378 8 51
Lantana - Rayzor Ranch Denton 25 % 1,163 16 42
Long Meadow Farms Fort Bend 38 % 1,332 470 187 116
Southern Trails Brazoria 80 % 748 243
Stonewall Estates Bexar 50 % 342 48
Other projects (2) Various Various 15
Total in ventures 4,224 2,984 211 236
Combined total 19,375 17,756 857 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 third quarter-end 2014 follows:

                   
Project Market Interest

Owned (a)

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

Source: Forestar Group Inc.

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