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Forestar Group Inc. (NYSE: FOR) today reported second quarter 2013 net income of approximately $0.5 million, or $0.02 per diluted share, compared with second quarter 2012 net income of approximately $0.8 million, or $0.02 per diluted share outstanding. Second quarter 2012 results include after-tax expenses of approximately ($1.6) million, or ($0.05) per diluted share, associated with the acquisition of Credo Petroleum Corporation.
“During second quarter, we remained on track executing our Triple in FOR strategic initiatives. In real estate, residential lot demand remains favorable with option contracts with homebuilders at the strongest level since the start of the housing recovery and higher average per lot pricing compared with second quarter 2012. We continue to focus on building a solid multifamily pipeline in our target markets, which continue to exhibit favorable multifamily market conditions. During the quarter, we began construction on a new multifamily community near Dallas and started pre-leasing at Eleven in Austin. Oil and gas operations continued to gain momentum, with accelerating oil production in the Bakken and Three Forks formations in North Dakota and Lansing-Kansas City formation in Kansas and Nebraska. We are focused on accelerating value realization and capitalizing on strategic and disciplined growth opportunities,” said Jim DeCosmo, president and chief executive officer of Forestar Group.
Second Quarter 2013 Significant Highlights
Sold 360 developed residential lots, with average pricing per lot up nearly 29% compared with second quarter 2012
Oil production up nearly 170% compared with second quarter 2012, principally due to the acquisition of Credo Petroleum
Acquired leasehold interests in over 17,000 net mineral acres, principally located in Nebraska and Kansas
Forestar manages its operations through three business segments: real estate, oil and gas and other natural resources.
REAL ESTATESecond Quarter 2013 Significant Highlights
Sold 360 developed residential lots – Over 1,900 lots under option contracts with homebuilders
Residential lot margins up 66% compared with second quarter 2012
Sold 1,042 acres of undeveloped land for nearly $2,580 per acre
Sold 34 commercial acres for over $103,000 per acre
Began construction on Midtown Cedar Hill, 354-unit multifamily community near Dallas, Texas
Pre-leasing begins at Eleven, 257-unit multifamily community in Austin, Texas
Segment Financial Results:
($ in millions)
Second quarter 2013 real estate segment earnings were higher compared with second quarter 2012 principally due to higher average prices for residential lots and commercial tracts sold which were somewhat offset by lower lot sales volumes and commercial acres sold. In addition, second quarter 2013 real estate segment earnings increased primarily due to the sale of the remaining 440 undeveloped residential acres from a project in Florida for $3.5 million, generating approximately $0.7 million in segment earnings. First quarter 2013 results include earnings of $10.9 million associated with the sale of Promesa, a wholly-owned multifamily community we developed in Austin. Real estate segment earnings declined in second quarter 2013 compared with first quarter 2013, excluding the earnings associated with the sale of Promesa, primarily due to lower residential lot sales.