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FORESTAR RE GROUP Reports Operating Results (10-Q)

August 09, 2012 | About:
10qk

10qk

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FORESTAR RE GROUP (FOR) filed Quarterly Report for the period ended 2012-06-30.

Forestar Group Inc. has a market cap of $405.4 million; its shares were traded at around $12.1 with a P/E ratio of 292.4 and P/S ratio of 3.

Highlight of Business Operations:

Second quarter 2012 real estate segment earnings benefited principally from $3,401,000 gain from a consolidated ventures sale of 800 acres near Dallas and increased residential lot and commercial sales. In first six months 2012, segment earnings benefited principally from $11,675,000 gain from the sale of our 25 percent interest in Palisades West LLC for $32,095,000 and increased residential lot and commercial sales. These items are partially offset by decreased retail land sales volume.

Residential real estate revenues principally consist of the sale of single-family lots to national, regional and local homebuilders. In second quarter and first six months 2012, residential real estate revenues increased principally as a result of increased lot sales volume due to demand for finished lot inventory by homebuilders in markets where supply has diminished. In second quarter 2012, we sold the remaining 109 fully developed lots from our River Plantation project located in Tampa for $2,145,000 or about $19,675 per lot, resulting in about $533,000 in segment earnings.

In second quarter 2012, royalty revenues increased principally as result of increased oil production partially offset by decreased oil prices in our owned and consolidated properties and decreased natural gas prices. Increased oil production contributed about $3,441,000 which was offset by $467,000 from decreased oil prices as compared with second quarter 2011. Increased natural gas production contributed about $366,000 which was offset by $533,000 from decreased natural gas prices as compared with second quarter 2011. In first six months 2012, royalty revenues increased principally as result of increased oil production in our owned and consolidated properties. Increased oil production contributed about $6,500,000 as compared with first six months 2011. In first six months 2012, increased natural gas production contributed about $566,000 which was more than offset by $711,000 from decreased natural gas prices as compared with second quarter 2011.

In first six months 2012, other revenues include $1,562,000 in delay rentals received on approximately 5,600 net mineral acres in Louisiana and $287,000 in lease bonuses received as a result of leasing about 800 net mineral acres for an average of about $360 per acre. In first six months 2011, other revenues include $2,132,000 in lease bonuses received as a result of leasing nearly 7,400 net mineral acres for an average of $289 per acre, $1,555,000 related to mineral seismic exploration agreement associated with 31,100 acres in Louisiana and $226,000 related to delay rentals received.

In first six months 2012, net cash (used for) operating activities was ($11,993,000) as expenditures for real estate development and acquisitions exceeded non-cash real estate cost of sales, principally as result of acquiring real estate assets from CL Realty and Temco for $47,000,000. Subsequent to closing of this acquisition, we received $23,370,000 from the ventures, representing our pro-rata share of distributable cash. Also, we invested an additional $14,341,000 in a 289 unit multifamily property currently under construction in Austin and we paid $10,895,000 in federal and state taxes, net of refunds. We received $24,294,000 in net proceeds from a consolidated ventures sale of 800 acres in Dallas and $10,934,000 in reimbursements from two new multifamily ventures which represents our venture partners pro-rata share of the costs. In first six months 2011, net cash (used for) operating activities was ($33,930,000) which is principally due to our acquisition from a financial institution of a non-performing loan secured by a lien on developed and undeveloped land near Houston for $21,137,000, our investment in undeveloped land in San Antonio, Texas for $7,900,000 and our payment of $7,596,000 in federal and state income taxes, net of refunds.

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