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Forestar Group Inc. Reports Third Quarter 2012 Results

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.”

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