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þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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26-1336998
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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Title of Each Class
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Name of Each Exchange On Which Registered
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Common Stock, par value $1.00 per share
Preferred Share Purchase Rights
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New York Stock Exchange
New York Stock Exchange
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Large accelerated filer
o
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Accelerated filer
þ
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Non-accelerated filer
o
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Smaller reporting company
o
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(Do not check if a smaller reporting company)
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Page
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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Item 1.
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Business
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•
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Real estate,
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•
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Oil and gas, and
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•
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Other natural resources.
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•
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Recognizing and responsibly delivering the greatest value from every acre; and
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•
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Growing through strategic and disciplined investments.
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•
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Growing segment earnings through strategic and disciplined investments,
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•
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Increasing returns, and
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•
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Repositioning non-core assets.
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•
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Sold 1,883 developed residential lots, with margins up 28% compared with 2012
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•
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Sold 6,811 acres of undeveloped land for about $3,400 per acre
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•
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Sold 171 commercial acres for over $197,000 per acre
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•
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Sold 1,617 acres of residential tracts for nearly $14,200 per acre
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•
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Sold Promesa, a stabilized multifamily community for $41.0 million, generating earnings of $10.9 million
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•
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Oil production up nearly 88% compared with 2012, primarily due to the acquisition of Credo and additional investments in leases obtained through acquisition of Credo principally targeting the Bakken/Three Forks and Lansing-Kansas City formations
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•
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Estimated proved reserves increased 52% to 8.5 million barrel of oil equivalent (BOE) as of year-end 2013 from 5.6 million BOE at year-end 2012
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•
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83 new productive gross oil and gas wells and 18 wells drilling and/or waiting on completion at year-end 2013
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•
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Leased nearly 9,200 net mineral acres to third parties principally in Texas for nearly $2.5 million
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•
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Sold over 609,500 tons of fiber for $15.88 per ton
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Project
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County
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Project
Acres
(b)
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California
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Hidden Creek Estates
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Los Angeles
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700
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Terrace at Hidden Hills
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Los Angeles
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30
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Georgia
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Ball Ground
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Cherokee
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500
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Crossing
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Coweta
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230
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Fincher Road
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Cherokee
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3,890
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Fox Hall
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Coweta
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960
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Garland Mountain
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Cherokee/Bartow
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350
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Martin’s Bridge
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Banks
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970
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Mill Creek
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Coweta
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770
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Serenity
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Carroll
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440
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Wolf Creek
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Carroll/Douglas
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12,230
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Yellow Creek
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Cherokee
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1,060
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Texas
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Lake Houston
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Harris/Liberty
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3,700
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Total
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25,830
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(a)
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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.
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(b)
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Project acres, which are the total for the project regardless of our ownership interest, are approximate. The actual number of acres entitled may vary.
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Residential Lots
(c)
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Commercial Acres
(d)
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Project
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County
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Interest
Owned
(b)
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Lots Sold
Since
Inception
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Lots
Remaining
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Acres
Sold
Since
Inception
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Acres
Remaining
(f)
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Projects we own
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California
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San Joaquin River
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Contra Costa/Sacramento
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100
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%
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—
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—
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—
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288
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Colorado
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|||||
Buffalo Highlands
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Weld
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100
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%
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—
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164
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—
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—
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Johnstown Farms
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Weld
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100
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%
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262
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350
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2
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7
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Pinery West
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Douglas
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100
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%
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—
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86
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20
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94
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Stonebraker
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Weld
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100
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%
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—
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603
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—
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—
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Tennessee
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Morgan Farms
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Williamson
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100
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%
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20
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153
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—
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—
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Texas
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|||||
Arrowhead Ranch
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Hays
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100
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%
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—
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387
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—
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6
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Bar C Ranch
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Tarrant
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100
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%
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292
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813
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—
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—
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Barrington Kingwood
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Harris
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100
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%
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107
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73
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—
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—
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Cibolo Canyons
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Bexar
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100
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%
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810
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756
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130
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20
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Harbor Lakes
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Hood
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100
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%
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211
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238
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2
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19
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Hunter’s Crossing
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Bastrop
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100
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%
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438
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72
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38
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65
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La Conterra
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Williamson
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100
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%
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167
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163
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—
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58
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Lakes of Prosper
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Collin
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100
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%
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41
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244
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—
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—
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Maxwell Creek
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Collin
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100
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%
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876
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123
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10
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—
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Oak Creek Estates
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Comal
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100
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%
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164
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483
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13
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—
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Park Place
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Collin
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100
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%
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—
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200
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—
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—
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Stoney Creek
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Dallas
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100
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%
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155
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|
599
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—
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—
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Summer Creek Ranch
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Tarrant
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100
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%
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|
878
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|
396
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|
35
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|
44
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Summer Lakes
|
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Fort Bend
|
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100
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%
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500
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|
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630
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|
|
56
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|
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—
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Summer Park
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Fort Bend
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100
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%
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17
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|
|
181
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|
|
28
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|
62
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The Colony
|
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Bastrop
|
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100
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%
|
|
445
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|
|
704
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22
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|
|
31
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The Preserve at Pecan Creek
|
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Denton
|
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100
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%
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|
478
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|
316
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—
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|
7
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Village Park
|
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Collin
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100
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%
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|
664
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92
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|
3
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|
|
2
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Westside at Buttercup Creek
|
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Williamson
|
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100
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%
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1,468
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|
27
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66
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—
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Other projects (10)
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Various
|
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100
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%
|
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2,110
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|
|
147
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|
|
247
|
|
|
7
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Georgia
|
|
|
|
|
|
|
|
|
|
|
|
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|||||
Seven Hills
|
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Paulding
|
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100
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%
|
|
711
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|
|
379
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|
|
26
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|
|
113
|
|
The Villages at Burt Creek
|
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Dawson
|
|
100
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%
|
|
—
|
|
|
1,715
|
|
|
—
|
|
|
57
|
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Other projects (18)
|
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Various
|
|
100
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%
|
|
95
|
|
|
2,998
|
|
|
—
|
|
|
705
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|
Florida
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Other projects (2)
|
|
Various
|
|
100
|
%
|
|
301
|
|
|
—
|
|
|
—
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|
|
—
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|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Other projects (3)
|
|
Various
|
|
100
|
%
|
|
500
|
|
|
453
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
11,710
|
|
|
13,545
|
|
|
698
|
|
|
1,585
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential Lots
(c)
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|
Commercial Acres
(d)
|
|||||||||
Project
|
|
County
|
|
Interest
Owned
(b)
|
|
Lots Sold
Since
Inception
|
|
Lots
Remaining
|
|
Acres
Sold
Since
Inception
|
|
Acres
Remaining
(f)
|
|||||
Projects in entities we consolidate
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Texas
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
City Park
|
|
Harris
|
|
75
|
%
|
|
1,287
|
|
|
482
|
|
|
50
|
|
|
115
|
|
Lantana
(e)
|
|
Denton
|
|
55
|
%
|
|
917
|
|
|
864
|
|
|
9
|
|
|
3
|
|
Timber Creek
|
|
Collin
|
|
88
|
%
|
|
—
|
|
|
614
|
|
|
—
|
|
|
—
|
|
Willow Creek Farms II
|
|
Waller/Fort Bend
|
|
90
|
%
|
|
90
|
|
|
315
|
|
|
—
|
|
|
—
|
|
Other projects (2)
|
|
Various
|
|
Various
|
|
|
9
|
|
|
198
|
|
|
—
|
|
|
129
|
|
Georgia
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
The Georgian
|
|
Paulding
|
|
75
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%
|
|
289
|
|
|
1,052
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
2,592
|
|
|
3,525
|
|
|
59
|
|
|
247
|
|
|
Total owned and consolidated
|
|
|
|
|
|
14,302
|
|
|
17,070
|
|
|
757
|
|
|
1,832
|
|
|
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
|
%
|
|
284
|
|
|
1,409
|
|
|
8
|
|
|
51
|
|
Lantana
(e)
|
|
Denton
|
|
Various
|
|
|
1,163
|
|
|
80
|
|
|
16
|
|
|
42
|
|
Long Meadow Farms
|
|
Fort Bend
|
|
38
|
%
|
|
1,167
|
|
|
635
|
|
|
183
|
|
|
116
|
|
Southern Trails
|
|
Brazoria
|
|
80
|
%
|
|
725
|
|
|
266
|
|
|
—
|
|
|
—
|
|
Stonewall Estates
|
|
Bexar
|
|
50
|
%
|
|
330
|
|
|
56
|
|
|
—
|
|
|
—
|
|
Other projects (1)
|
|
Nueces
|
|
50
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15
|
|
Total in ventures
|
|
|
|
|
|
3,993
|
|
|
3,291
|
|
|
207
|
|
|
236
|
|
|
Combined Total
|
|
|
|
|
|
18,295
|
|
|
20,361
|
|
|
964
|
|
|
2,068
|
|
(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)
|
The Lantana project consists of a series of
24
partnerships in which our interests range from
25 percent
percent to
55 percent
. We account for two of these partnerships using the equity method and we consolidate the remaining partnerships.
|
(f)
|
Excludes acres associated with commercial and income producing properties.
|
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°
(b)
|
|
Denver
|
|
20
|
%
|
|
Multifamily
|
|
4
|
|
|
304-unit luxury apartment
|
Midtown Cedar Hill
(b)
|
|
Dallas
|
|
100
|
%
|
|
Multifamily
|
|
13
|
|
|
354-unit luxury apartment
|
(a)
|
Interest owned reflects our net equity interest in the project, whether owned directly or indirectly.
|
(b)
|
Construction in progress.
|
State
|
|
Entitled,
Developed,
and Under
Development
Projects
|
|
Undeveloped
Land and
Land in
Entitlement
|
|
Income
Producing
Properties
|
|
Total
|
||||||||
|
|
(In thousands)
|
||||||||||||||
Texas
|
|
$
|
291,287
|
|
|
$
|
8,456
|
|
|
$
|
32,868
|
|
|
$
|
332,611
|
|
Georgia
|
|
22,503
|
|
|
56,181
|
|
|
—
|
|
|
78,684
|
|
||||
Colorado
|
|
21,959
|
|
|
—
|
|
|
14,272
|
|
|
36,231
|
|
||||
California
|
|
8,915
|
|
|
21,322
|
|
|
—
|
|
|
30,237
|
|
||||
Tennessee
|
|
9,230
|
|
|
130
|
|
|
12,471
|
|
|
21,831
|
|
||||
North Carolina
|
|
—
|
|
|
—
|
|
|
11,799
|
|
|
11,799
|
|
||||
Other
|
|
7,793
|
|
|
278
|
|
|
—
|
|
|
8,071
|
|
||||
Total
|
|
$
|
361,687
|
|
|
$
|
86,367
|
|
|
$
|
71,410
|
|
|
$
|
519,464
|
|
State
|
|
Unleased
|
|
Leased
(b)
|
|
Held By
Production
(c)
|
|
Total
(d)
|
||||
Texas
|
|
205,000
|
|
|
20,000
|
|
|
27,000
|
|
|
252,000
|
|
Louisiana
|
|
125,000
|
|
|
10,000
|
|
|
9,000
|
|
|
144,000
|
|
Georgia
|
|
152,000
|
|
|
—
|
|
|
—
|
|
|
152,000
|
|
Alabama
|
|
40,000
|
|
|
—
|
|
|
—
|
|
|
40,000
|
|
California
|
|
1,000
|
|
|
—
|
|
|
—
|
|
|
1,000
|
|
Indiana
|
|
1,000
|
|
|
—
|
|
|
—
|
|
|
1,000
|
|
|
|
524,000
|
|
|
30,000
|
|
|
36,000
|
|
|
590,000
|
|
(a)
|
Includes ventures.
|
(b)
|
Includes leases in primary lease term or for which a delayed rental payment has been received. In the ordinary course of business, leases covering a significant portion of leased net mineral acres may expire from time to time in a single reporting period.
|
(c)
|
Acres being held by production are producing oil or gas in paying quantities.
|
(d)
|
Texas, Louisiana, California and Indiana net acres are calculated as the gross number of surface acres multiplied by our percentage ownership of the mineral interest. Alabama and Georgia net acres are calculated as the gross number of surface acres multiplied by our estimated percentage ownership of the mineral interest based on county sampling.
|
Texas
|
|
Louisiana
(b)
|
||||||
County
|
|
Net Acres
|
|
Parish
|
|
Net Acres
|
||
Trinity
|
|
46,000
|
|
|
Beauregard
|
|
79,000
|
|
Angelina
|
|
42,000
|
|
|
Vernon
|
|
39,000
|
|
Houston
|
|
29,000
|
|
|
Calcasieu
|
|
17,000
|
|
Anderson
|
|
25,000
|
|
|
Allen
|
|
7,000
|
|
Cherokee
|
|
24,000
|
|
|
Rapides
|
|
1,000
|
|
Sabine
|
|
23,000
|
|
|
Other
|
|
1,000
|
|
Red River
|
|
14,000
|
|
|
|
|
144,000
|
|
Newton
|
|
13,000
|
|
|
|
|
|
|
San Augustine
|
|
13,000
|
|
|
|
|
|
|
Jasper
|
|
12,000
|
|
|
|
|
|
|
Other
|
|
11,000
|
|
|
|
|
|
|
|
|
252,000
|
|
|
|
|
|
(a)
|
Includes ventures. These owned mineral acre interests contain numerous oil and gas producing formations consisting of conventional, unconventional, and tight sand reservoirs. Of these reservoirs, we have mineral interests in and around production trends in the Wilcox, Frio, Cockfield, James Lime, Pettet, Travis Peak, Cotton Valley, Austin Chalk, Haynesville Shale, Barnett Shale and Bossier formations.
|
(b)
|
A significant portion of our Louisiana net mineral acres were severed from the surface estate shortly before our 2007 spin-off. Under Louisiana law, a mineral servitude that is not producing minerals or which has not been the subject of good-faith drilling operations will cease to burden the property upon the tenth anniversary of the date of its creation.
|
State
|
|
Undeveloped
|
|
Held By
Production
|
|
Total
|
|||
Nebraska
|
|
138,000
|
|
|
5,000
|
|
|
143,000
|
|
Kansas
|
|
24,000
|
|
|
5,000
|
|
|
29,000
|
|
Oklahoma
|
|
15,000
|
|
|
17,000
|
|
|
32,000
|
|
Texas
|
|
11,000
|
|
|
2,000
|
|
|
13,000
|
|
North Dakota
|
|
3,000
|
|
|
4,000
|
|
|
7,000
|
|
Other
(a)
|
|
19,000
|
|
|
4,000
|
|
|
23,000
|
|
|
|
210,000
|
|
|
37,000
|
|
|
247,000
|
|
(a)
|
Excludes approximately
8,000
net acres of overriding royalty interests
|
|
Estimated Reserves
|
||||
|
Oil
(Barrels)
|
|
Gas
(Mcf)
|
||
|
(In thousands)
|
||||
Consolidated entities:
|
|
|
|
||
Proved developed
|
3,893
|
|
|
11,385
|
|
Proved undeveloped
|
1,931
|
|
|
2,245
|
|
Total proved reserves 2013
|
5,824
|
|
|
13,630
|
|
Proved developed
|
2,416
|
|
|
10,448
|
|
Proved undeveloped
|
804
|
|
|
1,274
|
|
Total proved reserves 2012
|
3,220
|
|
|
11,722
|
|
Total proved reserves 2011
(a)
|
1,064
|
|
|
8,203
|
|
Our share of ventures accounted for using the equity method:
|
|
|
|
||
Proved developed
|
—
|
|
|
2,332
|
|
Proved undeveloped
|
—
|
|
|
—
|
|
Total proved reserves 2013
|
—
|
|
|
2,332
|
|
Proved developed
|
—
|
|
|
2,572
|
|
Proved undeveloped
|
—
|
|
|
—
|
|
Total proved reserves 2012
|
—
|
|
|
2,572
|
|
Total proved reserves 2011
(a)
|
—
|
|
|
3,283
|
|
Total consolidated and our share of equity method ventures:
|
|
|
|
||
Proved developed
|
3,893
|
|
|
13,717
|
|
Proved undeveloped
|
1,931
|
|
|
2,245
|
|
Total proved reserves 2013
|
5,824
|
|
|
15,962
|
|
Proved developed
|
2,416
|
|
|
13,020
|
|
Proved undeveloped
|
804
|
|
|
1,274
|
|
Total proved reserves 2012
|
3,220
|
|
|
14,294
|
|
Total proved reserves 2011
(a)
|
1,064
|
|
|
11,486
|
|
(a)
|
We did not have any proved undeveloped reserves prior to our acquisition of Credo in third quarter 2012.
|
|
Estimated Reserves
|
||||
|
Oil
(Barrels)
|
|
Gas
(Mcf)
|
||
|
(In thousands)
|
||||
Consolidated entities:
|
|
|
|
||
Year-end 2012
|
3,220
|
|
|
11,722
|
|
Revisions of previous estimates
|
182
|
|
|
1,243
|
|
Extensions and discoveries
|
3,085
|
|
|
2,046
|
|
Acquisitions
|
35
|
|
|
531
|
|
Production
|
(698
|
)
|
|
(1,912
|
)
|
Year-end 2013
|
5,824
|
|
|
13,630
|
|
Our share of ventures accounted for using the equity method:
|
|
|
|
||
Year-end 2012
|
—
|
|
|
2,572
|
|
Revisions of previous estimates
|
—
|
|
|
7
|
|
Extensions and discoveries
|
—
|
|
|
—
|
|
Production
|
—
|
|
|
(247
|
)
|
Year-end 2013
|
—
|
|
|
2,332
|
|
Total consolidated and our share of equity method ventures:
|
|
|
|
||
Year-end 2013
|
5,824
|
|
|
15,962
|
|
|
For the Year
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Consolidated entities:
|
|
|
|
|
|
||||||
Oil production (barrels)
(a)
|
697,700
|
|
|
371,300
|
|
|
151,900
|
|
|||
Average price per barrel
|
$
|
89.40
|
|
|
$
|
85.09
|
|
|
$
|
96.84
|
|
Gas production (millions of cubic feet)
|
1,912.0
|
|
|
1,667.7
|
|
|
1,128.6
|
|
|||
Average price per thousand cubic feet
|
$
|
3.48
|
|
|
$
|
2.76
|
|
|
$
|
4.01
|
|
Our share of ventures accounted for using the equity method:
|
|
|
|
|
|
||||||
Gas production (millions of cubic feet)
|
246.5
|
|
|
321.3
|
|
|
493.4
|
|
|||
Average price per thousand cubic feet
|
$
|
3.25
|
|
|
$
|
2.40
|
|
|
$
|
3.81
|
|
Total consolidated and our share of equity method ventures:
|
|
|
|
|
|
||||||
Oil production (barrels)
(a)
|
697,700
|
|
|
371,300
|
|
|
151,900
|
|
|||
Average price per barrel
|
$
|
89.40
|
|
|
$
|
85.09
|
|
|
$
|
96.84
|
|
Gas production (millions of cubic feet)
|
2,158.5
|
|
|
1,989.0
|
|
|
1,622.0
|
|
|||
Average price per thousand cubic feet
|
$
|
3.46
|
|
|
$
|
2.71
|
|
|
$
|
3.95
|
|
Total BOE (barrel of oil equivalent)
(b)
|
1,057,500
|
|
|
702,800
|
|
|
422,200
|
|
|||
Average price per barrel of oil equivalent
|
$
|
66.04
|
|
|
$
|
52.61
|
|
|
$
|
50.02
|
|
(a)
|
Oil production includes natural gas liquids (NGLs).
|
(b)
|
Gas is converted to barrels of oil equivalent (BOE) using the conversion of six Mcf to one barrel of oil.
|
Year
|
|
Gross Wells
|
|||||||||||||||||||
|
|
|
|
Exploratory
|
|
Development
|
|||||||||||||||
|
|
Total
|
|
Oil
|
|
Gas
|
|
Dry
|
|
Oil
|
|
Gas
|
|
Dry
|
|||||||
2013
(a)
|
|
120
|
|
|
10
|
|
|
—
|
|
|
30
|
|
|
71
|
|
|
—
|
|
|
9
|
|
2012
|
|
40
|
|
|
8
|
|
|
1
|
|
|
9
|
|
|
16
|
|
|
2
|
|
|
4
|
|
2011
|
|
38
|
|
|
1
|
|
|
7
|
|
|
2
|
|
|
10
|
|
|
18
|
|
|
—
|
|
(a)
|
Of the gross wells drilled in
2013
, we operated 55 or 46 percent. The remaining wells represent our participations in wells operated by others. Dry holes were principally located in Kansas and Nebraska.
|
Year
|
|
Net Wells
|
|||||||||||||||||||
|
|
|
|
Exploratory
|
|
Development
|
|||||||||||||||
|
|
Total
|
|
Oil
|
|
Gas
|
|
Dry
|
|
Oil
|
|
Gas
|
|
Dry
|
|||||||
2013
|
|
46.7
|
|
|
6.0
|
|
|
—
|
|
|
18.2
|
|
|
16.8
|
|
|
—
|
|
|
5.7
|
|
2012
|
|
13.0
|
|
|
3.0
|
|
|
—
|
|
|
4.9
|
|
|
2.6
|
|
|
0.2
|
|
|
2.3
|
|
2011
|
|
4.6
|
|
|
0.2
|
|
|
0.4
|
|
|
0.4
|
|
|
2.4
|
|
|
1.2
|
|
|
—
|
|
|
Productive Wells
(a)
|
||||
|
Gross
|
|
Net
|
||
Consolidated entities:
|
|
|
|
||
Oil
|
589
|
|
|
104.4
|
|
Gas
|
393
|
|
|
66.3
|
|
Total
|
982
|
|
|
170.7
|
|
Ventures accounted for using the equity method:
|
|
|
|
||
Oil
|
—
|
|
|
—
|
|
Gas
|
29
|
|
|
1.9
|
|
Total
|
29
|
|
|
1.9
|
|
Total consolidated and equity method ventures:
|
|
|
|
||
Oil
|
589
|
|
|
104.4
|
|
Gas
|
422
|
|
|
68.2
|
|
Total
|
1,011
|
|
|
172.6
|
|
(a)
|
Excludes approximately 1,200 overriding royalty interest wells.
|
|
For the Year
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Pulpwood tons sold
|
375,200
|
|
|
370,200
|
|
|
266,200
|
|
|||
Average pulpwood price per ton
|
$
|
11.86
|
|
|
$
|
9.83
|
|
|
$
|
8.69
|
|
Sawtimber tons sold
|
234,300
|
|
|
123,700
|
|
|
56,800
|
|
|||
Average sawtimber price per ton
|
$
|
22.31
|
|
|
$
|
21.77
|
|
|
$
|
16.13
|
|
Total tons sold
|
609,500
|
|
|
493,900
|
|
|
323,000
|
|
|||
Average price per ton
|
$
|
15.88
|
|
|
$
|
12.82
|
|
|
$
|
10.00
|
|
|
For the Year
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Average recreational acres leased
|
120,400
|
|
|
129,800
|
|
|
174,500
|
|
|||
Average price per leased acre
|
$
|
9.08
|
|
|
$
|
8.73
|
|
|
$
|
8.80
|
|
•
|
our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, including amendments to these reports, and other documents as soon as reasonably practicable after we file them with the Securities and Exchange Commission;
|
•
|
beneficial ownership reports filed by officers, directors, and principal security holders under Section 16(a) of the Securities Exchange Act of 1934, as amended (or the “Exchange Act”); and
|
•
|
corporate governance information that includes our:
|
•
|
corporate governance guidelines,
|
•
|
audit committee charter
|
•
|
management development and executive compensation committee charter,
|
•
|
nominating and governance committee charter,
|
•
|
standards of business conduct and ethics,
|
•
|
code of ethics for senior financial officers, and
|
•
|
information on how to communicate directly with our board of directors.
|
Name
|
|
Age
|
|
Position
|
James M. DeCosmo
|
|
55
|
|
President and Chief Executive Officer
|
Bruce F. Dickson
|
|
60
|
|
Chief Real Estate Officer
|
David M. Grimm
|
|
53
|
|
Chief Administrative Officer, Executive Vice President, General Counsel and Secretary
|
Christopher L. Nines
|
|
42
|
|
Chief Financial Officer and Treasurer
|
Flavious J. Smith, Jr.
|
|
55
|
|
Chief Oil and Gas Officer
|
Phillip J. Weber
|
|
53
|
|
Executive Vice President - Water Resources
|
Item 1A.
|
Risk Factors.
|
•
|
incur or guarantee additional debt;
|
•
|
pay dividends or make distributions to our stockholders;
|
•
|
repurchase or redeem capital stock or subordinated indebtedness;
|
•
|
make loans, investments or acquisitions;
|
•
|
incur restrictions on the ability of certain of our subsidiaries to pay dividends or to make other payments to us;
|
•
|
enter into transactions with affiliates;
|
•
|
create liens;
|
•
|
merge or consolidate with other companies or transfer all or substantially all of our assets; and
|
•
|
transfer or sell assets, including capital stock of subsidiaries.
|
•
|
we may incur construction costs for a property that exceed original estimates due to increased materials, labor or other costs or unforeseen environmental or other conditions, which could make completion of the property uneconomical, and we may not be able to increase rents to compensate for the increase in construction costs;
|
•
|
we may be unable to complete construction and/or lease-up of a community on schedule and meet financial goals for development projects;
|
•
|
an adverse incident during construction or development could adversely affect our ability to complete construction, conduct operations or cause substantial losses, including personal injury or loss of life, damage to or destruction of property, equipment, pollution or other environmental contamination, regulatory penalties, suspension of operations, and attorney’s fees and other expenses incurred in the prosecution or defense of litigation; and
|
•
|
because occupancy rates and rents at a newly developed community may fluctuate depending on a number of factors, including market and economic conditions, we may be unable to meet our profitability goals for that community.
|
•
|
an inability to evaluate accurately local apartment or housing market conditions and local economies;
|
•
|
an inability to obtain land for development or to identify appropriate acquisition opportunities;
|
•
|
an inability to hire and retain key personnel;
|
•
|
an inability to successfully integrate operations; and
|
•
|
lack of familiarity with local governmental and permitting procedures.
|
•
|
unexpected drilling conditions;
|
•
|
facility or equipment failure or accidents;
|
•
|
adverse weather conditions;
|
•
|
title problems;
|
•
|
unusual or unexpected geological formations;
|
•
|
fires, blowouts and explosions; and
|
•
|
uncontrollable flows of oil and gas or well fluids.
|
•
|
decisions and activities of the well operators;
|
•
|
supply of and demand for oil and gas;
|
•
|
actual prices we receive for oil and gas;
|
•
|
actual operating costs;
|
•
|
the amount and timing of capital expenditures;
|
•
|
the amount and timing of actual production; and
|
•
|
changes in governmental regulations or taxation.
|
•
|
fluctuations in our operating results, including results that vary from expectations of management, analysts and investors;
|
•
|
changes in investors’ and analysts’ perception of the business risks and conditions of our business;
|
•
|
broader market fluctuations;
|
•
|
general financial, economic and political conditions;
|
•
|
regulatory changes affecting our industry generally or our businesses and operations;
|
•
|
environmental regulations and liabilities that could have a negative effect on our operating results;
|
•
|
announcements of strategic developments, acquisitions, financings and other material events by us or our competitors;
|
•
|
the sale of a substantial number of shares of our common stock held by existing security holders in the public market; and
|
•
|
general conditions in the real estate and mineral resources industries.
|
Item 1B.
|
Unresolved Staff Comments.
|
Item 2.
|
Properties.
|
Item 3.
|
Legal Proceedings.
|
Item 4.
|
Mine Safety Disclosures.
|
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
|
|
2013
|
|
2012
|
||||||||||||
|
Price Range
|
|
Price Range
|
||||||||||||
|
High
|
|
Low
|
|
High
|
|
Low
|
||||||||
First Quarter
|
$
|
22.82
|
|
|
$
|
16.99
|
|
|
$
|
17.12
|
|
|
$
|
13.87
|
|
Second Quarter
|
$
|
24.68
|
|
|
$
|
19.44
|
|
|
$
|
15.97
|
|
|
$
|
12.00
|
|
Third Quarter
|
$
|
22.57
|
|
|
$
|
19.51
|
|
|
$
|
18.63
|
|
|
$
|
11.13
|
|
Fourth Quarter
|
$
|
23.59
|
|
|
$
|
18.42
|
|
|
$
|
17.80
|
|
|
$
|
13.61
|
|
For the Year
|
$
|
24.68
|
|
|
$
|
16.99
|
|
|
$
|
18.63
|
|
|
$
|
11.13
|
|
Period
|
Total
Number of
Shares
Purchased
(b)
|
|
Average
Price Paid
per Share
|
|
Total Number
of Shares
Purchased as
Part of
Publicly
Announced
Plan or
Programs
|
|
Maximum
Number of
Shares That
May Yet be
Purchased
Under the
Plans or
Programs
|
|||||
Month 10 (10/1/2013 — 10/31/2013)
|
47
|
|
|
$
|
21.76
|
|
|
—
|
|
|
4,997,855
|
|
Month 11 (11/1/2013 — 11/30/2013)
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
4,997,855
|
|
Month 12 (12/1/2013 — 12/31/2013)
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
4,997,855
|
|
Total
|
47
|
|
|
|
|
—
|
|
|
|
(a)
|
On February 11, 2009, we announced that our Board of Directors authorized the repurchase of up to 7,000,000 shares of our common stock. We have purchased 2,002,145 shares under this authorization, which has no expiration date. We have
|
(b)
|
Includes shares withheld to pay taxes in connection with vesting of restricted stock awards and exercises of stock options.
|
Item 6.
|
Selected Financial Data.
|
|
For the Year
|
||||||||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
||||||||||
|
(In thousands, except per share amount)
|
||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Real estate
|
$
|
248,011
|
|
|
$
|
120,115
|
|
|
$
|
106,168
|
|
|
$
|
68,269
|
|
|
$
|
94,436
|
|
Oil and gas
|
72,313
|
|
|
44,220
|
|
|
24,448
|
|
|
24,790
|
|
|
36,256
|
|
|||||
Other natural resources
|
10,721
|
|
|
8,256
|
|
|
4,957
|
|
|
8,301
|
|
|
15,559
|
|
|||||
Total revenues
|
$
|
331,045
|
|
|
$
|
172,591
|
|
|
$
|
135,573
|
|
|
$
|
101,360
|
|
|
$
|
146,251
|
|
Segment earnings (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Real estate
(a)
|
$
|
68,454
|
|
|
$
|
53,582
|
|
|
$
|
(25,704
|
)
|
|
$
|
(4,634
|
)
|
|
$
|
3,182
|
|
Oil and gas
|
18,859
|
|
|
26,608
|
|
|
19,783
|
|
|
22,846
|
|
|
32,370
|
|
|||||
Other natural resources
|
6,507
|
|
|
29
|
|
|
(1,867
|
)
|
|
4,995
|
|
|
9,622
|
|
|||||
Total segment earnings (loss)
|
93,820
|
|
|
80,219
|
|
|
(7,788
|
)
|
|
23,207
|
|
|
45,174
|
|
|||||
Items not allocated to segments:
|
|
|
|
|
|
|
|
|
|
||||||||||
General and administrative expense
(b)
|
(20,597
|
)
|
|
(25,176
|
)
|
|
(20,110
|
)
|
|
(17,341
|
)
|
|
(22,399
|
)
|
|||||
Share-based compensation expense
|
(16,809
|
)
|
|
(14,929
|
)
|
|
(7,067
|
)
|
|
(11,596
|
)
|
|
(11,998
|
)
|
|||||
Gain on sale of assets
(c)
|
—
|
|
|
16
|
|
|
61,784
|
|
|
28,607
|
|
|
104,047
|
|
|||||
Interest expense
|
(20,004
|
)
|
|
(19,363
|
)
|
|
(17,012
|
)
|
|
(16,446
|
)
|
|
(20,459
|
)
|
|||||
Other corporate non-operating income
(d)
|
119
|
|
|
191
|
|
|
368
|
|
|
1,164
|
|
|
375
|
|
|||||
Income before taxes
|
36,529
|
|
|
20,958
|
|
|
10,175
|
|
|
7,595
|
|
|
94,740
|
|
|||||
Income tax expense
(e)
|
(7,208
|
)
|
|
(8,016
|
)
|
|
(3,021
|
)
|
|
(2,470
|
)
|
|
(35,633
|
)
|
|||||
Net income attributable to Forestar Group Inc.
|
$
|
29,321
|
|
|
$
|
12,942
|
|
|
$
|
7,154
|
|
|
$
|
5,125
|
|
|
$
|
59,107
|
|
Diluted net income per common share
|
$
|
0.80
|
|
|
$
|
0.36
|
|
|
$
|
0.20
|
|
|
$
|
0.14
|
|
|
$
|
1.64
|
|
Average diluted common shares outstanding
|
36,813
|
|
|
35,482
|
|
|
35,781
|
|
|
36,377
|
|
|
36,102
|
|
|||||
At year-end:
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets
|
$
|
1,172,152
|
|
|
$
|
918,434
|
|
|
$
|
794,857
|
|
|
$
|
789,324
|
|
|
$
|
784,734
|
|
Debt
|
357,407
|
|
|
294,063
|
|
|
221,587
|
|
|
221,589
|
|
|
216,626
|
|
|||||
Noncontrolling interest
|
5,552
|
|
|
4,059
|
|
|
1,686
|
|
|
4,715
|
|
|
5,879
|
|
|||||
Forestar Group Inc. shareholders’ equity
|
709,845
|
|
|
529,488
|
|
|
509,526
|
|
|
509,564
|
|
|
512,456
|
|
|||||
Ratio of total debt to total capitalization
|
33
|
%
|
|
36
|
%
|
|
30
|
%
|
|
30
|
%
|
|
30
|
%
|
(a)
|
Real estate segment earnings (loss) include non-cash impairments of $1,790,000 in 2013, $45,188,000 in 2011, $11,271,000 in 2010 and $10,619,000 in 2009. Real estate segment earnings (loss) also include the effects of net (income) loss attributable to noncontrolling interests.
|
(b)
|
In 2012, general and administrative expense includes $6,323,000 in costs associated with our acquisition of Credo and in 2011 includes $3,187,000 associated with proposed private debt offerings that we withdrew as a result of deterioration of terms available to us in the credit markets.
|
(c)
|
Gain on sale of assets in 2011, 2010 and 2009 represents gains from timberland sales in accordance with our strategic initiatives announced first quarter 2009 and completed in 2011.
|
(d)
|
In 2010, other corporate non-operating income principally represents interest income related to a loan to a third-party equity investor in the resort development located at our Cibolo Canyons project. We received payment in full plus interest in fourth quarter 2010.
|
(e)
|
In 2013, income tax expense includes a benefit from recognition of
$6,326,000
of previously unrecognized tax benefits upon lapse of the statute of limitations for a previously reserved tax position.
|
•
|
general economic, market or business conditions in Texas or Georgia, where our real estate activities are concentrated;
|
•
|
our ability to achieve some or all of our strategic initiatives;
|
•
|
the opportunities (or lack thereof) that may be presented to us and that we may pursue;
|
•
|
our ability to hire and retain key personnel;
|
•
|
significant customer concentration;
|
•
|
future residential, multifamily or commercial entitlements, development approvals and the ability to obtain such approvals;
|
•
|
obtaining approvals of reimbursements and other payments from special improvement districts and timing of such payments;
|
•
|
accuracy of estimates and other assumptions related to investment in and development of real estate, the expected timing and pricing of land and lot sales and related cost of real estate sales, impairment of long-lived assets, income taxes, share-based compensation, oil and gas reserves, revenues, capital expenditures and lease operating expense accruals associated with our oil and gas working interests, and depletion of our oil and gas properties;
|
•
|
the levels of resale housing inventory and potential impact of foreclosures in our mixed-use development projects and the regions in which they are located;
|
•
|
fluctuations in costs and expenses;
|
•
|
demand for new housing, which can be affected by a number of factors including the availability of mortgage credit;
|
•
|
demand for multifamily communities, which can be affected by a number of factors including local markets and economic conditions;
|
•
|
competitive actions by other companies;
|
•
|
changes in governmental policies, laws or regulations and actions or restrictions of regulatory agencies;
|
•
|
our realization of the expected benefits since our acquisition of CREDO Petroleum Corporation (Credo);
|
•
|
risks associated with oil and gas exploration, drilling and production activities;
|
•
|
fluctuations in oil and gas commodity prices;
|
•
|
government regulation of exploration and production technology, including hydraulic fracturing;
|
•
|
the results of financing efforts, including our ability to obtain financing with favorable terms, or at all;
|
•
|
our ability to make interest and principal payments on our debt and satisfy the other covenants contained in our senior secured credit facility, indentures and other debt agreements;
|
•
|
our partners’ ability to fund their capital commitments and otherwise fulfill their operating and financial obligations;
|
•
|
the effect of limitations, restrictions and natural events on our ability to harvest and deliver timber;
|
•
|
inability to obtain permits for, or changes in laws, governmental policies or regulations affecting, water withdrawal or usage;
|
•
|
the final resolutions or outcomes with respect to our contingent and other liabilities related to our business; and
|
•
|
our ability to execute our growth strategy and deliver acceptable returns from acquisitions and other investments.
|
•
|
Recognizing and responsibly delivering the greatest value from every acre; and
|
•
|
Growing through strategic and disciplined investments.
|
•
|
Growing segment earnings through strategic and disciplined investments,
|
•
|
Increasing returns, and
|
•
|
Repositioning non-core assets.
|
|
For the Year
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(In thousands)
|
||||||||||
Revenues:
|
|
|
|
|
|
||||||
Real estate
|
$
|
248,011
|
|
|
$
|
120,115
|
|
|
$
|
106,168
|
|
Oil and gas
|
72,313
|
|
|
44,220
|
|
|
24,448
|
|
|||
Other natural resources
|
10,721
|
|
|
8,256
|
|
|
4,957
|
|
|||
Total revenues
|
$
|
331,045
|
|
|
$
|
172,591
|
|
|
$
|
135,573
|
|
Segment earnings (loss):
|
|
|
|
|
|
||||||
Real estate
|
$
|
68,454
|
|
|
$
|
53,582
|
|
|
$
|
(25,704
|
)
|
Oil and gas
|
18,859
|
|
|
26,608
|
|
|
19,783
|
|
|||
Other natural resources
|
6,507
|
|
|
29
|
|
|
(1,867
|
)
|
|||
Total segment earnings (loss)
|
93,820
|
|
|
80,219
|
|
|
(7,788
|
)
|
|||
Items not allocated to segments:
|
|
|
|
|
|
||||||
General and administrative expense
|
(20,597
|
)
|
|
(25,176
|
)
|
|
(20,110
|
)
|
|||
Share-based compensation expense
|
(16,809
|
)
|
|
(14,929
|
)
|
|
(7,067
|
)
|
|||
Gain on sale of assets
|
—
|
|
|
16
|
|
|
61,784
|
|
|||
Interest expense
|
(20,004
|
)
|
|
(19,363
|
)
|
|
(17,012
|
)
|
|||
Other corporate non-operating income
|
119
|
|
|
191
|
|
|
368
|
|
|||
Income before taxes
|
36,529
|
|
|
20,958
|
|
|
10,175
|
|
|||
Income tax expense
|
(7,208
|
)
|
|
(8,016
|
)
|
|
(3,021
|
)
|
|||
Net income attributable to Forestar Group Inc.
|
$
|
29,321
|
|
|
$
|
12,942
|
|
|
$
|
7,154
|
|
•
|
Real estate segment earnings benefited from the sale of Promesa, a 289-unit multifamily property we developed in Austin, for $41,000,000, which generated approximately $10,881,000 in segment earnings. In addition, segment earnings also benefited from increased residential lot sales activity, residential and commercial tract sales and interest income associated with yield accretion from a loan we hold secured by a mixed-use community in Houston.
|
•
|
Oil and gas segment earnings decreased principally due to lower oil and gas production volumes associated with royalties and due to reduced lease bonus and delay rental payments received from our owned mineral interests, which were partially offset by higher working interest production volumes and prices attributable to our exploration and production operations principally as result of our acquisition of Credo in third quarter 2012
.
|
•
|
Other natural resources segment earnings benefited from higher levels of timber harvesting activity driven by increased customer demand compared to 2012. In addition, segment earnings also benefited from a
$3,828,000
gain from a partial termination of a timber lease related to land sold from a consolidated venture near Atlanta, Georgia.
|
•
|
Share-based compensation increased principally as result of our higher stock price in 2013 and its impact on cash-settled awards.
|
•
|
Real estate segment earnings benefited from a $11,675,000 gain from the sale of our 25 percent ownership interest in Palisades West LLC, a $10,180,000 gain from the sale of Broadstone Memorial, a 401-unit multifamily investment property in Houston, $8,247,000 in earnings from an unconsolidated venture’s sale of Las Brisas, a 414-unit multifamily property near Austin, a $3,401,000 gain from a consolidated venture’s bulk sale of 800 acres near Dallas, and increased residential lot and commercial tract sales activity.
|
•
|
Oil and gas segment earnings benefited from increased lease bonus revenues, higher production volume and earnings attributable to exploration and production operations from our acquisition of Credo in third quarter 2012, partially offset by lower oil and gas prices and increased depletion and production severance taxes due to higher production volumes.
|
•
|
Other natural resources segment earnings increased principally as a result of higher levels of harvesting activity.
|
•
|
General and administrative expense includes $6,323,000 in transaction costs paid to outside advisors associated with our acquisition of Credo in 2012.
|
•
|
Share-based compensation increased principally as a result of our higher stock price in 2012 and its impact on cash-settled awards.
|
•
|
Interest expense includes a $4,448,000 loss on extinguishment of debt in connection with amendment and extension of our term loan.
|
•
|
Real estate segment earnings were negatively impacted by $45,188,000 of non-cash impairment charges principally associated with residential development projects located near Atlanta, Denver, and the Texas gulf coast and with our decision to acquire certain assets from CL Realty and TEMCO, ventures in which we owned a 50 percent interest. Segment earnings were positively impacted by increased undeveloped land sales and higher residential lot and tract sales. In addition, segment earnings were positively impacted by $3,083,000 as result of settled litigation and reallocation from us to noncontrolling financial interests of a previously recognized loss related to foreclosure of a lien on a property owned by a consolidated venture.
|
•
|
Oil and gas segment earnings declined primarily due to lower lease bonus revenues which was partially offset by increased oil production volumes and higher average oil prices.
|
•
|
Other natural resources segment earnings decreased principally due to lower harvest volume as a result of selling over 217,000 acres of timberland since year-end 2008 and increased costs associated with developing our water resources initiatives.
|
•
|
General and administrative expenses includes $3,187,000 in costs paid to outside advisors associated with proposed private debt offerings that we withdrew as a result of deterioration of terms available to us in the credit markets.
|
•
|
Gain on sale of assets represents the sale of about 57,000 acres of timberland for $87,061,000 in accordance with our 2009 strategic initiatives which we completed in 2011.
|
•
|
Real estate,
|
•
|
Oil and gas, and
|
•
|
Other natural resources.
|
|
For the Year
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(In thousands)
|
||||||||||
Revenues
|
$
|
248,011
|
|
|
$
|
120,115
|
|
|
$
|
106,168
|
|
Cost of sales
|
(156,794
|
)
|
|
(70,039
|
)
|
|
(62,975
|
)
|
|||
Operating expenses
|
(31,952
|
)
|
|
(34,160
|
)
|
|
(36,184
|
)
|
|||
|
59,265
|
|
|
15,916
|
|
|
7,009
|
|
|||
Interest income on loan secured by real estate
|
6,840
|
|
|
3,430
|
|
|
—
|
|
|||
Gain on sale of assets
|
—
|
|
|
25,273
|
|
|
—
|
|
|||
Equity in earnings (loss) of unconsolidated ventures
|
8,089
|
|
|
13,897
|
|
|
(30,626
|
)
|
|||
Less: Net income attributable to noncontrolling interests
|
(5,740
|
)
|
|
(4,934
|
)
|
|
(2,087
|
)
|
|||
Segment earnings (loss)
|
$
|
68,454
|
|
|
$
|
53,582
|
|
|
$
|
(25,704
|
)
|
|
For the Year
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(In thousands)
|
||||||||||
Residential real estate
|
$
|
107,858
|
|
|
$
|
51,369
|
|
|
$
|
36,586
|
|
Commercial real estate
|
18,338
|
|
|
8,320
|
|
|
736
|
|
|||
Undeveloped land
|
22,757
|
|
|
18,924
|
|
|
40,517
|
|
|||
Commercial and income producing properties
|
95,327
|
|
|
38,656
|
|
|
26,820
|
|
|||
Other
|
3,731
|
|
|
2,846
|
|
|
1,509
|
|
|||
Total revenues
|
$
|
248,011
|
|
|
$
|
120,115
|
|
|
$
|
106,168
|
|
|
For the Year
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Residential real estate:
|
|
|
|
|
|
||||||
Lots sold
|
1,469
|
|
|
926
|
|
|
567
|
|
|||
Average price per lot sold
|
$
|
58,101
|
|
|
$
|
52,016
|
|
|
$
|
56,697
|
|
Commercial real estate:
|
|
|
|
|
|
||||||
Acres sold
|
99
|
|
|
83
|
|
|
4
|
|
|||
Average price per acre sold
|
$
|
175,972
|
|
|
$
|
114,846
|
|
|
$
|
185,344
|
|
Undeveloped land:
|
|
|
|
|
|
||||||
Acres sold
|
6,703
|
|
|
9,190
|
|
|
17,130
|
|
|||
Average price per acre sold
|
$
|
3,395
|
|
|
$
|
2,059
|
|
|
$
|
2,365
|
|
|
For the Year
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(In thousands)
|
||||||||||
Employee compensation and benefits
|
$
|
8,073
|
|
|
$
|
10,261
|
|
|
$
|
7,798
|
|
Property taxes
|
7,188
|
|
|
7,903
|
|
|
7,881
|
|
|||
Professional services
|
4,206
|
|
|
4,050
|
|
|
4,938
|
|
|||
Depreciation and amortization
|
3,117
|
|
|
4,340
|
|
|
5,259
|
|
|||
Other
|
9,368
|
|
|
7,606
|
|
|
10,308
|
|
|||
Total operating expenses
|
$
|
31,952
|
|
|
$
|
34,160
|
|
|
$
|
36,184
|
|
|
Year-End
|
||||||
|
2013
|
|
2012
|
||||
Owned and consolidated ventures:
|
|
|
|
||||
Entitled, developed and under development projects
|
|
|
|
||||
Number of projects
|
67
|
|
|
67
|
|
||
Residential lots remaining
|
17,070
|
|
|
20,084
|
|
||
Commercial acres remaining
|
1,832
|
|
|
2,051
|
|
||
Undeveloped land and land in the entitlement process
|
|
|
|
||||
Number of projects
|
13
|
|
|
15
|
|
||
Acres in entitlement process
|
25,830
|
|
|
26,070
|
|
||
Acres undeveloped
|
85,515
|
|
|
89,610
|
|
||
Ventures accounted for using the equity method:
|
|
|
|
||||
Ventures’ lot sales (for the year)
|
|
|
|
||||
Lots sold
|
414
|
|
|
439
|
|
||
Average price per lot sold
|
$
|
58,872
|
|
|
$
|
52,080
|
|
Ventures’ entitled, developed and under development projects
|
|
|
|
||||
Number of projects
|
7
|
|
|
7
|
|
||
Residential lots remaining
|
3,291
|
|
|
3,716
|
|
||
Commercial acres sold (for the year)
|
72
|
|
|
12
|
|
||
Average price per acre sold
|
$
|
226,206
|
|
|
$
|
239,754
|
|
Commercial acres remaining
|
236
|
|
|
321
|
|
||
Ventures’ undeveloped land and land in the entitlement process
|
|
|
|
||||
Acres sold (for the year)
|
108
|
|
|
135
|
|
||
Average price per acre sold
|
$
|
2,737
|
|
|
$
|
2,600
|
|
Acres undeveloped
|
5,547
|
|
|
5,655
|
|
State
|
|
Entitled,
Developed,
and Under
Development
Projects
|
|
Undeveloped
Land and
Land in
Entitlement
|
|
Income
Producing
Properties
|
|
Total
|
||||||||
|
|
(In thousands)
|
||||||||||||||
Texas
|
|
$
|
291,287
|
|
|
$
|
8,456
|
|
|
$
|
32,868
|
|
|
$
|
332,611
|
|
Georgia
|
|
22,503
|
|
|
56,181
|
|
|
—
|
|
|
78,684
|
|
||||
Colorado
|
|
21,959
|
|
|
—
|
|
|
14,272
|
|
|
36,231
|
|
||||
California
|
|
8,915
|
|
|
21,322
|
|
|
—
|
|
|
30,237
|
|
||||
Tennessee
|
|
9,230
|
|
|
130
|
|
|
12,471
|
|
|
21,831
|
|
||||
North Carolina
|
|
—
|
|
|
—
|
|
|
11,799
|
|
|
11,799
|
|
||||
Other
|
|
7,793
|
|
|
278
|
|
|
—
|
|
|
8,071
|
|
||||
Total
|
|
$
|
361,687
|
|
|
$
|
86,367
|
|
|
$
|
71,410
|
|
|
$
|
519,464
|
|
Planning Phase
(a)
|
|||||||||||||
Project
|
|
Market
|
|
Ownership Interest
(b)
|
|
Acquisition of Property
|
|
Project Cost Incurred to Date
|
|||||
|
|
|
|
|
|
($ in thousands)
|
|||||||
East Morehead
|
|
North Carolina
|
|
100
|
%
|
|
$
|
10,628
|
|
|
$
|
1,171
|
|
Littleton
|
|
Denver
|
|
100
|
%
|
|
$
|
13,553
|
|
|
$
|
719
|
|
Westmont
|
|
Tennessee
|
|
100
|
%
|
|
$
|
10,937
|
|
|
$
|
1,048
|
|
Under Construction
|
||||||||||||||||||||||
Project
|
|
Market
|
|
Ownership Interest
(b)
|
|
Estimated Project Cost
(c)
|
|
Project Cost Incurred to Date
|
|
Planned
Number of Units
|
|
Planned
Rentable Square Feet
|
|
Estimated Completion Date
|
|
Estimated Stabilization Date
(d)
|
||||||
|
|
|
|
|
|
($ in thousands)
|
|
|
|
|
|
|
|
|
||||||||
Eleven
|
|
Austin
|
|
25
|
%
|
|
$
|
40,244
|
|
|
$
|
37,123
|
|
|
257
|
|
203,757
|
|
|
2Q 2014
|
|
3Q 2014
|
360°
|
|
Denver
|
|
20
|
%
|
|
$
|
49,120
|
|
|
$
|
31,645
|
|
|
304
|
|
248,684
|
|
|
1Q 2015
|
|
3Q 2015
|
Midtown Cedar Hill
|
|
Dallas
|
|
100
|
%
|
|
$
|
35,600
|
|
|
$
|
7,886
|
|
|
354
|
|
317,525
|
|
|
2Q 2015
|
|
3Q 2015
|
(a)
|
Acquired development site planned for future construction.
|
(b)
|
We may develop and own these projects directly or through ventures. In January 2014, we formed a venture to develop our Westmont project in which our ownership interest is 30 percent.
|
(c)
|
Estimated project costs represent the estimated costs of the project through stabilization. Significant estimation is required to derive these costs and final costs may differ from these estimates. The projected stabilization dates are also estimates and are subject to change as the project proceeds through the development process.
|
(d)
|
Estimated stabilization represents the quarter within which we estimate the project will achieve 90% economic occupancy.
|
|
For the Year
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(In thousands)
|
||||||||||
Revenues
|
$
|
72,313
|
|
|
$
|
44,220
|
|
|
$
|
24,448
|
|
Cost of oil and gas producing activities
|
(42,067
|
)
|
|
(10,842
|
)
|
|
(2,062
|
)
|
|||
Operating expenses
|
(13,312
|
)
|
|
(7,279
|
)
|
|
(3,997
|
)
|
|||
|
16,934
|
|
|
26,099
|
|
|
18,389
|
|
|||
Gain on sale
|
1,333
|
|
|
—
|
|
|
—
|
|
|||
Equity in earnings of unconsolidated ventures
|
592
|
|
|
509
|
|
|
1,394
|
|
|||
Segment earnings
|
$
|
18,859
|
|
|
$
|
26,608
|
|
|
$
|
19,783
|
|
|
For the Year
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(In thousands)
|
||||||||||
Oil production
(a)
|
$
|
62,379
|
|
|
$
|
31,592
|
|
|
$
|
14,711
|
|
Gas production
|
6,657
|
|
|
4,611
|
|
|
4,528
|
|
|||
Other
|
3,277
|
|
|
8,017
|
|
|
5,209
|
|
|||
Total revenues
|
$
|
72,313
|
|
|
$
|
44,220
|
|
|
$
|
24,448
|
|
(a)
|
Oil production includes revenues from oil, condensate and natural gas liquids (NGLs). In 2013, 2012 and 2011, NGLs accounted for $1,639,000, $2,685,000, and $1,051,000 of oil production revenues.
|
|
For the Year
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Consolidated entities:
|
|
|
|
|
|
||||||
Oil production (barrels)
(a)
|
697,700
|
|
|
371,300
|
|
|
151,900
|
|
|||
Average price per barrel
|
$
|
89.40
|
|
|
$
|
85.09
|
|
|
$
|
96.84
|
|
Gas production (millions of cubic feet)
|
1,912.0
|
|
|
1,667.7
|
|
|
1,128.6
|
|
|||
Average price per thousand cubic feet
|
$
|
3.48
|
|
|
$
|
2.76
|
|
|
$
|
4.01
|
|
Our share of ventures accounted for using the equity method:
|
|
|
|
|
|
||||||
Gas production (millions of cubic feet)
|
246.5
|
|
|
321.3
|
|
|
493.4
|
|
|||
Average price per thousand cubic feet
|
$
|
3.25
|
|
|
$
|
2.40
|
|
|
$
|
3.81
|
|
Total consolidated and our share of equity method ventures:
|
|
|
|
|
|
||||||
Oil production (barrels)
(a)
|
697,700
|
|
|
371,300
|
|
|
151,900
|
|
|||
Average price per barrel
|
$
|
89.40
|
|
|
$
|
85.09
|
|
|
$
|
96.84
|
|
Gas production (millions of cubic feet)
|
2,158.5
|
|
|
1,989.0
|
|
|
1,622.0
|
|
|||
Average price per thousand cubic feet
|
$
|
3.46
|
|
|
$
|
2.71
|
|
|
$
|
3.95
|
|
Total BOE (barrel of oil equivalent)
(b)
|
1,057,500
|
|
|
702,800
|
|
|
422,200
|
|
|||
Average price per barrel of oil equivalent
|
$
|
66.04
|
|
|
$
|
52.61
|
|
|
$
|
50.02
|
|
(a)
|
Oil production includes natural gas liquids (NGLs).
|
(b)
|
Gas is converted to barrels of oil equivalent (BOE) using the conversion of six Mcf to one barrel of oil.
|
|
For the Year
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(In thousands)
|
||||||||||
Depletion and amortization
|
$
|
18,417
|
|
|
$
|
4,526
|
|
|
$
|
21
|
|
Production costs
|
12,477
|
|
|
4,472
|
|
|
1,492
|
|
|||
Exploration costs
|
10,959
|
|
|
1,754
|
|
|
549
|
|
|||
Other
|
214
|
|
|
90
|
|
|
—
|
|
|||
Total cost of oil and gas producing activities
|
$
|
42,067
|
|
|
$
|
10,842
|
|
|
$
|
2,062
|
|
|
For the Year
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(In thousands)
|
||||||||||
Employee compensation and benefits
|
$
|
8,168
|
|
|
$
|
4,250
|
|
|
$
|
2,063
|
|
Professional and consulting services
|
1,557
|
|
|
769
|
|
|
241
|
|
|||
Depreciation
|
1,135
|
|
|
429
|
|
|
315
|
|
|||
Property taxes
|
436
|
|
|
312
|
|
|
257
|
|
|||
Other
|
2,016
|
|
|
1,519
|
|
|
1,121
|
|
|||
Total operating expenses
|
$
|
13,312
|
|
|
$
|
7,279
|
|
|
$
|
3,997
|
|
State
|
|
Unleased
|
|
Leased
(b)
|
|
Held By
Production
(c)
|
|
Total
(d)
|
||||
Texas
|
|
205,000
|
|
|
20,000
|
|
|
27,000
|
|
|
252,000
|
|
Louisiana
|
|
125,000
|
|
|
10,000
|
|
|
9,000
|
|
|
144,000
|
|
Georgia
|
|
152,000
|
|
|
—
|
|
|
—
|
|
|
152,000
|
|
Alabama
|
|
40,000
|
|
|
—
|
|
|
—
|
|
|
40,000
|
|
California
|
|
1,000
|
|
|
—
|
|
|
—
|
|
|
1,000
|
|
Indiana
|
|
1,000
|
|
|
—
|
|
|
—
|
|
|
1,000
|
|
|
|
524,000
|
|
|
30,000
|
|
|
36,000
|
|
|
590,000
|
|
(a)
|
Includes ventures.
|
(b)
|
Includes leases in primary lease term or for which a delayed rental payment has been received. In the ordinary course of business, leases covering a significant portion of leased owned mineral acres may expire from time to time in a single reporting period.
|
(c)
|
Acres being held by production are producing oil or gas in paying quantities.
|
(d)
|
Texas, Louisiana, California and Indiana net acres are calculated as the gross number of surface acres multiplied by our percentage ownership of the mineral interest. Alabama and Georgia net acres are calculated as the gross number of surface acres multiplied by our estimated percentage ownership of the mineral interest based on county sampling.
|
State
|
|
Undeveloped
|
|
Held By
Production
(a)
|
|
Total
|
|||
Nebraska
|
|
138,000
|
|
|
5,000
|
|
|
143,000
|
|
Kansas
|
|
24,000
|
|
|
5,000
|
|
|
29,000
|
|
Oklahoma
|
|
15,000
|
|
|
17,000
|
|
|
32,000
|
|
Texas
|
|
11,000
|
|
|
2,000
|
|
|
13,000
|
|
North Dakota
|
|
3,000
|
|
|
4,000
|
|
|
7,000
|
|
Other
(a)
|
|
19,000
|
|
|
4,000
|
|
|
23,000
|
|
|
|
210,000
|
|
|
37,000
|
|
|
247,000
|
|
(a)
|
Excludes approximately
8,000
net acres of overriding royalty interests.
|
|
For the Year
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(In thousands)
|
||||||||||
Revenues
|
$
|
10,721
|
|
|
$
|
8,256
|
|
|
$
|
4,957
|
|
Cost of other natural resources
|
(2,033
|
)
|
|
(2,995
|
)
|
|
(1,928
|
)
|
|||
Operating expenses
|
(6,065
|
)
|
|
(5,989
|
)
|
|
(5,100
|
)
|
|||
|
2,623
|
|
|
(728
|
)
|
|
(2,071
|
)
|
|||
Gain on sale of assets
|
3,828
|
|
|
694
|
|
|
181
|
|
|||
Equity in earnings of unconsolidated ventures
|
56
|
|
|
63
|
|
|
23
|
|
|||
Segment earnings
|
$
|
6,507
|
|
|
$
|
29
|
|
|
$
|
(1,867
|
)
|
|
For the Year
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(In thousands)
|
||||||||||
Fiber
|
$
|
9,584
|
|
|
$
|
6,332
|
|
|
$
|
3,229
|
|
Recreational leases and other
|
1,137
|
|
|
1,924
|
|
|
1,728
|
|
|||
Total revenues
|
$
|
10,721
|
|
|
$
|
8,256
|
|
|
$
|
4,957
|
|
|
For the Year
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Pulpwood tons sold
|
375,200
|
|
|
370,200
|
|
|
266,200
|
|
|||
Average pulpwood price per ton
|
$
|
11.86
|
|
|
$
|
9.83
|
|
|
$
|
8.69
|
|
Sawtimber tons sold
|
234,300
|
|
|
123,700
|
|
|
56,800
|
|
|||
Average sawtimber price per ton
|
$
|
22.31
|
|
|
$
|
21.77
|
|
|
$
|
16.13
|
|
Total tons sold
|
609,500
|
|
|
493,900
|
|
|
323,000
|
|
|||
Average price per ton
|
$
|
15.88
|
|
|
$
|
12.82
|
|
|
$
|
10.00
|
|
|
For the Year
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Average recreational acres leased
|
120,400
|
|
|
129,800
|
|
|
174,500
|
|
|||
Average price per leased acre
|
$
|
9.08
|
|
|
$
|
8.73
|
|
|
$
|
8.80
|
|
|
For the Year
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(In thousands)
|
||||||||||
Employee compensation and benefits
|
$
|
2,280
|
|
|
$
|
1,526
|
|
|
$
|
1,289
|
|
Professional and consulting services
|
2,813
|
|
|
3,570
|
|
|
3,040
|
|
|||
Facility and long-term timber lease costs
|
416
|
|
|
478
|
|
|
455
|
|
|||
Other
|
556
|
|
|
415
|
|
|
316
|
|
|||
Total operating expenses
|
$
|
6,065
|
|
|
$
|
5,989
|
|
|
$
|
5,100
|
|
|
For the Year
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(In thousands)
|
||||||||||
Employee compensation and benefits
|
$
|
8,783
|
|
|
$
|
7,523
|
|
|
$
|
5,662
|
|
Professional services
|
3,416
|
|
|
9,468
|
|
|
6,578
|
|
|||
Insurance costs
|
898
|
|
|
944
|
|
|
1,083
|
|
|||
Facility costs
|
838
|
|
|
766
|
|
|
800
|
|
|||
Depreciation and amortization
|
833
|
|
|
1,114
|
|
|
1,393
|
|
|||
Other
|
5,829
|
|
|
5,361
|
|
|
4,594
|
|
|||
Total general and administrative expenses
|
$
|
20,597
|
|
|
$
|
25,176
|
|
|
$
|
20,110
|
|
|
|
|
|
2013
|
|
2012
|
|
2011
|
||||||
|
|
|
|
(In thousands)
|
||||||||||
Community Development
|
|
Market
|
|
|
|
|
|
|
||||||
Acquisitions:
|
|
|
|
|
|
|
|
|
||||||
Barrington
|
|
Houston
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,950
|
|
Bel-Aire
|
|
Atlanta
|
|
—
|
|
|
548
|
|
|
—
|
|
|||
Heron Pond
|
|
Atlanta
|
|
—
|
|
|
1,003
|
|
|
—
|
|
|||
Lakes of Prosper
|
|
Dallas
|
|
—
|
|
|
8,951
|
|
|
—
|
|
|||
CL Realty/TEMCO
|
|
Various
|
|
—
|
|
|
22,468
|
|
|
—
|
|
|||
Morgan Farms
|
|
Nashville
|
|
6,841
|
|
|
—
|
|
|
—
|
|
|||
Habersham
|
|
Charlotte
|
|
3,878
|
|
|
—
|
|
|
—
|
|
|||
Park Place
|
|
Dallas
|
|
2,177
|
|
|
—
|
|
|
—
|
|
|||
Development:
|
|
|
|
|
|
|
|
|
||||||
Owned projects
|
|
Various
|
|
46,314
|
|
|
17,073
|
|
|
13,117
|
|
|||
Consolidated venture projects
|
|
Various
|
|
19,567
|
|
|
13,701
|
|
|
11,102
|
|
|||
|
|
|
|
|
|
|
|
|
||||||
Multifamily
|
|
|
|
|
|
|
|
|
||||||
Acquisitions:
|
|
|
|
|
|
|
|
|
||||||
Pre-acquisition projects
|
|
Various
|
|
797
|
|
|
962
|
|
|
—
|
|
|||
Eleven
|
|
Austin
|
|
—
|
|
|
—
|
|
|
6,406
|
|
|||
360°
|
|
Denver
|
|
—
|
|
|
—
|
|
|
7,309
|
|
|||
Cedar Hill
|
|
Dallas
|
|
—
|
|
|
—
|
|
|
2,266
|
|
|||
Westmont
|
|
Nashville
|
|
—
|
|
|
10,872
|
|
|
—
|
|
|||
East Morehead
|
|
Charlotte
|
|
4,849
|
|
|
5,779
|
|
|
—
|
|
|||
Littleton
|
|
Colorado
|
|
13,553
|
|
|
—
|
|
|
—
|
|
|||
Development:
|
|
|
|
|
|
|
|
|
||||||
Promesa
|
|
|
|
—
|
|
|
16,783
|
|
|
7,782
|
|
|||
Eleven
(a)
|
|
Austin
|
|
—
|
|
|
(3,157
|
)
|
|
465
|
|
|||
360°
(a)
|
|
Denver
|
|
—
|
|
|
(6,572
|
)
|
|
107
|
|
|||
Cedar Hill
|
|
Dallas
|
|
4,232
|
|
|
87
|
|
|
355
|
|
|||
Westmont
|
|
Tennessee
|
|
1,048
|
|
|
65
|
|
|
—
|
|
|||
East Morehead
|
|
Charlotte
|
|
996
|
|
|
175
|
|
|
—
|
|
|||
Littleton
|
|
Denver
|
|
719
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
|
||||||
Undeveloped Land/Mitigation
|
|
|
|
|
|
|
|
|
||||||
Acquisitions:
|
|
|
|
|
|
|
|
|
||||||
Dierks Galo
|
|
San Antonio
|
|
—
|
|
|
—
|
|
|
7,858
|
|
|||
Cochran Creek
|
|
Atlanta
|
|
—
|
|
|
1,935
|
|
|
—
|
|
|||
Development:
|
|
|
|
|
|
|
|
|
||||||
Owned projects
|
|
Various
|
|
1,638
|
|
|
1,267
|
|
|
1,280
|
|
|||
Total
|
|
|
|
$
|
106,609
|
|
|
$
|
91,940
|
|
|
$
|
66,997
|
|
(a)
|
Includes reimbursements received from the ventures for land and pre-development costs.
|
|
Drilling and Completion Expenditures
|
||
|
Actual
|
||
|
2013
|
||
|
(In thousands)
|
||
Bakken and Three Forks formations of North Dakota
|
$
|
34,985
|
|
Lansing - Kansas City formation of Nebraska and Kansas
|
13,592
|
|
|
Other formations principally in Texas and Oklahoma
|
11,686
|
|
|
|
$
|
60,263
|
|
|
Senior
Credit Facility
|
||
|
(In thousands)
|
||
Borrowing base availability
|
$
|
368,338
|
|
Less: borrowings
|
(200,000
|
)
|
|
Less: letters of credit
|
(3,653
|
)
|
|
Net unused borrowing capacity
|
$
|
164,685
|
|
Financial Covenant
|
Requirement
|
|
Year-End
2013
|
Interest Coverage Ratio
(a)
|
≥ 1.50:1.0
|
|
5.69:1.0
|
Revenues/Capital Expenditures Ratio
(b)
|
≥ 1.00:1.0
|
|
2.85:1.0
|
Total Leverage Ratio
(c)
|
≤ 40%
|
|
32.3%
|
Net Worth
(d)
|
≥ $572.8 million
|
|
$668.1 million
|
Collateral Value to Loan Commitment Ratio
(e)
|
≥ 1.50:1.0
|
|
1.76:1.0
|
(a)
|
Calculated as EBITDA (earnings before interest, taxes, depreciation, depletion and amortization), plus non-cash compensation expense, plus other non-cash expenses, divided by interest expense excluding loan fees. This covenant is applied at the end of each quarter on a rolling four quarter basis.
|
(b)
|
Calculated as total gross revenues (excluding revenues of the Credo entities), plus our pro rata share of the operating revenues from unconsolidated ventures, divided by capital expenditures. Capital expenditures are defined as consolidated development and acquisition expenditures plus our pro rata share of unconsolidated ventures’ development and acquisition expenditures. This covenant is applied at the end of each quarter on a rolling four quarter basis.
|
(c)
|
Calculated as total funded debt divided by adjusted asset value. Total funded debt includes indebtedness for borrowed funds, secured liabilities, reimbursement obligations with respect to letters of credit or similar instruments, and our pro-rata share of joint venture debt outstanding. Adjusted asset value is defined as the sum of unrestricted cash and cash equivalents, timberlands, high value timberlands, raw entitled lands, entitled land under development, minerals business, Credo asset value, special improvement district receipts (SIDR) reimbursements value, Cibolo resort special improvement district hotel occupancy tax (SIDHT) value and other real estate owned at book value without regard to any indebtedness and our pro rata share of joint ventures’ book value without regard to any indebtedness. This covenant is applied at the end of each quarter.
|
(d)
|
Calculated as the amount by which consolidated total assets (excluding Credo acquisition goodwill over $50,000,000) exceeds consolidated total liabilities. At year-end
2013
, the requirement is $572,799,000 computed as: $460,765,000 plus 85 percent of the aggregate net proceeds received by us from any equity offering, plus 75 percent of all positive net income, on a cumulative basis. This covenant is applied at the end of each quarter.
|
(e)
|
Calculated as the total collateral value of timberland, high value timberland and our minerals business, raw entitled land that is part of mortgaged property, Credo asset value, SIDR reimbursements value, SIDHT value divided by total aggregate loan commitment. This covenant is applied at the end of each quarter.
|
|
|
Payments Due or Expiring by Year
|
||||||||||||||||||
|
|
Total
|
|
2014
|
|
2015-16
|
|
2017-18
|
|
Thereafter
|
||||||||||
|
|
(In thousands)
|
||||||||||||||||||
Debt
(a)
|
|
$
|
357,407
|
|
|
$
|
28,247
|
|
|
$
|
28,183
|
|
|
$
|
201,087
|
|
|
$
|
99,890
|
|
Interest payments on debt
|
|
62,635
|
|
|
15,069
|
|
|
27,619
|
|
|
14,478
|
|
|
5,469
|
|
|||||
Purchase obligations
|
|
50,924
|
|
|
50,924
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Operating leases
|
|
16,311
|
|
|
3,283
|
|
|
6,002
|
|
|
4,643
|
|
|
2,383
|
|
|||||
Total
|
|
$
|
487,277
|
|
|
$
|
97,523
|
|
|
$
|
61,804
|
|
|
$
|
220,208
|
|
|
$
|
107,742
|
|
(a)
|
Items included in our balance sheet.
|
|
Payments Due or Expiring by Year
|
||||||||||||||||||
|
Total
|
|
2014
|
|
2015-16
|
|
2017-18
|
|
Thereafter
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Performance bonds
|
$
|
44,336
|
|
|
$
|
44,336
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Standby letters of credit
|
5,873
|
|
|
3,078
|
|
|
2,795
|
|
|
—
|
|
|
—
|
|
|||||
Recourse obligations
|
1,487
|
|
|
658
|
|
|
164
|
|
|
25
|
|
|
640
|
|
|||||
Total
|
$
|
51,696
|
|
|
$
|
48,072
|
|
|
$
|
2,959
|
|
|
$
|
25
|
|
|
$
|
640
|
|
•
|
Investment in Real Estate and Cost of Real Estate Sales
— In allocating costs to real estate owned and real estate sold, we must estimate current and future real estate values. Our estimates of future real estate values sometimes must extend over periods 15 to 20 years from today and are dependent on numerous assumptions including our intentions and future market and economic conditions. In addition, when we sell real estate from projects that are not finished, we must estimate future development costs through completion. Differences between our estimates and actual results will affect future carrying values and operating results.
|
•
|
Accrued Oil and Gas Revenue
— We recognize revenue as oil and gas is produced and sold. There are a significant amount of oil and gas properties which we do not operate and, therefore, revenue is typically recorded in the month of production based on an estimate of our share of volumes produced and prices realized. We obtain the most current available production data from the operators and price indices for each well to estimate the accrual of revenue. Obtaining production data on a timely basis for some wells is not feasible; therefore we utilize past production receipts and estimated sales price information to estimate accrual of working interest revenue on all other non-operated wells each month. Revisions to such estimates are recorded as actual results become known.
|
•
|
Impairment of Real Estate Long-Lived Assets
— Measuring real assets for impairment requires estimating future fair values based on our intentions as to holding periods, future operating cash flows and the residual value of assets under review, primarily undeveloped land. Depending on the asset under review, we use varying methods to determine fair value, such as discounting expected future cash flows, determining resale values by market, or applying a capitalization rate to net operating income using prevailing rates in a given market. Changes in economic conditions, demand for real estate, and the projected net operating income for a specific property will inevitably change our estimates.
|
•
|
Impairment of Oil and Gas Properties
— We review our proved oil and gas properties for impairment whenever events and circumstances indicate that a decline in the recoverability of their carrying value may have occurred. We estimate the expected undiscounted future cash flows of our oil and gas properties and compare such undiscounted future cash flows to the carrying amount of the oil and gas properties to determine if the carrying amount is recoverable. If the carrying amount exceeds the estimated undiscounted future cash flows, we will adjust the carrying amount of the oil and gas properties to fair value. The factors used to determine fair value are subject to our judgment and expertise and include, but are not limited to, recent sales prices of comparable properties, the present value of future cash flows, net of estimated operating and development costs using estimates of proved reserves, future commodity pricing, future production estimates, anticipated capital expenditures, and various discount rates commensurate with the risk and current market conditions associated with realizing the expected cash flows projected. Because of the uncertainty inherent in these factors, we cannot predict when or if future impairment charges for proved properties will be recorded.
|
•
|
Impairment of Goodwill
— Measuring goodwill for impairment annually requires estimation of future cash flows and determination of fair values using many assumptions and inputs, including estimated future selling prices and volumes, estimated future costs to develop and explore, observable market inputs, weighted average cost of capital, estimated operating expenses and various other projected economic factors. Changes in economic and operating conditions can affect these assumptions and could result in additional interim testing and goodwill impairment charges in the future periods.
|
•
|
Share-Based Compensation
— We use the Black-Scholes option pricing model to determine the fair value of stock options. The determination of the fair value of share-based payment awards on the date of grant using an option-pricing model is affected by the stock price as well as assumptions regarding a number of other variables. These variables include expected stock price volatility over the term of the awards, actual and projected employee stock option exercise behaviors (term of option), risk-free interest rate and expected dividends. We have limited historical experience as a stand-alone company so we utilized alternative methods in determining our valuation assumptions. The expected life was based on the simplified method utilizing the midpoint between the vesting period and the contractual life of the awards. In 2013 and 2012, the expected stock price volatility was based on a blended rate utilizing our historical volatility and historical prices of our peers’ common stock for a period corresponding to the expected life of the options. Pre-vesting forfeitures are estimated based upon the pool of participants and their expected activity and historical trends. We use Monte Carlo simulation pricing model to determine the fair value of market-leveraged stock units (MSU's). A typical Monte Carlo exercise simulates a distribution of stock prices to yield an expected distribution of stock prices at the end of the performance period. The simulations are repeated many times in order to derive a probabilistic assessment of stock performance. The stock-paths are simulated using assumptions which include expected stock price volatility and risk-free interest rate.
|
•
|
Asset Retirement Obligations
— We make estimates of the future costs of the retirement obligations of our producing oil and gas properties. Estimating future costs involves significant assumptions and judgments regarding such factors as estimated costs of plugging and abandonment, timing of settlements, discount rates and inflation rates. Such cost estimates could be subject to significant revisions in subsequent years due to changes in regulatory requirements, technological advances and other factors which may be difficult to predict.
|
•
|
Income Taxes
— In preparing our consolidated financial statements, significant judgment is required to estimate our income taxes. Our estimates are based on our interpretation of federal and state tax laws. We estimate our actual current tax due and assess temporary and permanent differences resulting from differing treatment of items for tax and accounting purposes. The temporary differences result in deferred tax assets and liabilities, which are included in our consolidated balance sheet. If needed, we record a valuation allowance against our deferred tax assets. In addition, when we believe a tax position is supportable but the outcome uncertain, we include the item in our tax return but do not recognize the related benefit in our provision for taxes. Instead, we record a reserve for unrecognized tax benefits, which represents our expectation of the most likely outcome considering the technical merits and specific facts of the position. Changes to liabilities are only made when an event occurs that changes the most likely outcome, such as settlement with the relevant tax authority, expiration of statutes of limitations, changes in tax law, or recent court rulings. Adjustments to temporary differences, permanent differences or uncertain tax positions could materially impact our financial position, cash flow and results of operation.
|
•
|
Oil and Gas Reserves —
The estimation of oil and gas reserves is a significant estimate which affects the amount of non-cash depletion expense we record as well as impairment analysis we perform. On an annual basis, our consulting petroleum engineering firm, with our assistance, prepares estimates of crude oil and gas reserves based on available geologic and seismic data, reservoir pressure data, core analysis reports, well logs, analogous reservoir performance history, production data and other available sources of engineering, geological and geophysical information. Oil and gas prices are volatile and largely affected by worldwide or domestic production and consumption and are outside our control.
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
|
At Year-End
|
||||||
Change in Interest Rates
|
2013
|
|
2012
|
||||
|
(In thousands)
|
||||||
2%
|
$
|
(4,472
|
)
|
|
$
|
(5,697
|
)
|
1%
|
$
|
(2,308
|
)
|
|
$
|
(2,901
|
)
|
(1)%
|
$
|
2,308
|
|
|
$
|
2,901
|
|
(2)%
|
$
|
4,615
|
|
|
$
|
5,801
|
|
Item 8.
|
Financial Statements and Supplementary Data.
|
|
Page
|
Audited Financial Statements
|
|
Financial Statement Schedule
|
|
|
At Year-End
|
||||||
|
2013
|
|
2012
|
||||
|
(In thousands, except
share data)
|
||||||
ASSETS
|
|
|
|
||||
Cash and cash equivalents
|
$
|
192,307
|
|
|
$
|
10,361
|
|
Real estate, net
|
519,464
|
|
|
517,150
|
|
||
Oil and gas properties and equipment, net
|
232,641
|
|
|
158,427
|
|
||
Investment in unconsolidated ventures
|
41,147
|
|
|
41,546
|
|
||
Timber
|
10,947
|
|
|
12,293
|
|
||
Receivables, net
|
39,252
|
|
|
33,623
|
|
||
Prepaid expenses
|
5,136
|
|
|
6,455
|
|
||
Property and equipment, net
|
6,112
|
|
|
4,859
|
|
||
Deferred tax asset, net
|
40,398
|
|
|
54,748
|
|
||
Goodwill and other intangible assets
|
66,646
|
|
|
63,868
|
|
||
Other assets
|
18,102
|
|
|
15,104
|
|
||
TOTAL ASSETS
|
$
|
1,172,152
|
|
|
$
|
918,434
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Accounts payable
|
$
|
21,409
|
|
|
$
|
18,320
|
|
Accrued employee compensation and benefits
|
5,814
|
|
|
5,667
|
|
||
Accrued property taxes
|
3,822
|
|
|
4,231
|
|
||
Accrued interest
|
2,343
|
|
|
1,168
|
|
||
Income taxes payable
|
3,876
|
|
|
587
|
|
||
Other accrued expenses
|
32,927
|
|
|
22,648
|
|
||
Other liabilities
|
29,157
|
|
|
38,203
|
|
||
Debt
|
357,407
|
|
|
294,063
|
|
||
TOTAL LIABILITIES
|
456,755
|
|
|
384,887
|
|
||
COMMITMENTS AND CONTINGENCIES
|
|
|
|
||||
EQUITY
|
|
|
|
||||
Forestar Group Inc. shareholders’ equity:
|
|
|
|
||||
Preferred stock, par value $0.01 per share, 25,000,000 authorized shares, none issued
|
—
|
|
|
—
|
|
||
Common stock, par value $1.00 per share, 200,000,000 authorized shares, 36,946,603 issued at December 31, 2013 and December 31, 2012
|
36,947
|
|
|
36,947
|
|
||
Additional paid-in capital
|
556,676
|
|
|
407,206
|
|
||
Retained earnings
|
150,418
|
|
|
121,097
|
|
||
Treasury stock, at cost, 2,199,666 shares at December 31, 2013 and 2,327,623 shares at December 31, 2012
|
(34,196
|
)
|
|
(35,762
|
)
|
||
Total Forestar Group Inc. shareholders’ equity
|
709,845
|
|
|
529,488
|
|
||
Noncontrolling interests
|
5,552
|
|
|
4,059
|
|
||
TOTAL EQUITY
|
715,397
|
|
|
533,547
|
|
||
TOTAL LIABILITIES AND EQUITY
|
$
|
1,172,152
|
|
|
$
|
918,434
|
|
|
For the Year
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(In thousands, except per share amounts)
|
||||||||||
REVENUES
|
|
|
|
|
|
||||||
Real estate sales and other
|
$
|
152,684
|
|
|
$
|
81,459
|
|
|
$
|
79,348
|
|
Commercial and income producing properties
|
95,327
|
|
|
38,656
|
|
|
26,820
|
|
|||
Real estate
|
248,011
|
|
|
120,115
|
|
|
106,168
|
|
|||
Oil and gas
|
72,313
|
|
|
44,220
|
|
|
24,448
|
|
|||
Other natural resources
|
10,721
|
|
|
8,256
|
|
|
4,957
|
|
|||
|
331,045
|
|
|
172,591
|
|
|
135,573
|
|
|||
EXPENSES
|
|
|
|
|
|
||||||
Cost of real estate sales and other
|
(76,628
|
)
|
|
(40,400
|
)
|
|
(44,929
|
)
|
|||
Cost of commercial and income producing properties
|
(80,166
|
)
|
|
(29,639
|
)
|
|
(18,046
|
)
|
|||
Cost of oil and gas producing activities
|
(42,067
|
)
|
|
(10,842
|
)
|
|
(2,062
|
)
|
|||
Cost of other natural resources
|
(2,033
|
)
|
|
(2,995
|
)
|
|
(1,928
|
)
|
|||
Other operating
|
(60,359
|
)
|
|
(55,213
|
)
|
|
(49,132
|
)
|
|||
General and administrative
|
(28,376
|
)
|
|
(32,320
|
)
|
|
(23,326
|
)
|
|||
|
(289,629
|
)
|
|
(171,409
|
)
|
|
(139,423
|
)
|
|||
GAIN ON SALE OF ASSETS
|
5,161
|
|
|
25,983
|
|
|
61,965
|
|
|||
OPERATING INCOME
|
46,577
|
|
|
27,165
|
|
|
58,115
|
|
|||
Equity in earnings (loss) of unconsolidated ventures
|
8,737
|
|
|
14,469
|
|
|
(29,209
|
)
|
|||
Interest expense
|
(20,004
|
)
|
|
(19,363
|
)
|
|
(17,012
|
)
|
|||
Other non-operating income
|
6,959
|
|
|
3,621
|
|
|
368
|
|
|||
INCOME BEFORE TAXES
|
42,269
|
|
|
25,892
|
|
|
12,262
|
|
|||
Income tax expense
|
(7,208
|
)
|
|
(8,016
|
)
|
|
(3,021
|
)
|
|||
NET INCOME
|
35,061
|
|
|
17,876
|
|
|
9,241
|
|
|||
Less: Net (income) attributable to noncontrolling interests
|
(5,740
|
)
|
|
(4,934
|
)
|
|
(2,087
|
)
|
|||
NET INCOME ATTRIBUTABLE TO FORESTAR GROUP INC.
|
$
|
29,321
|
|
|
$
|
12,942
|
|
|
$
|
7,154
|
|
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
|
|
|
|
|
|
||||||
Basic
|
35,365
|
|
|
35,214
|
|
|
35,413
|
|
|||
Diluted
|
36,813
|
|
|
35,482
|
|
|
35,781
|
|
|||
NET INCOME PER COMMON SHARE
|
|
|
|
|
|
||||||
Basic
|
$
|
0.81
|
|
|
$
|
0.37
|
|
|
$
|
0.20
|
|
Diluted
|
$
|
0.80
|
|
|
$
|
0.36
|
|
|
$
|
0.20
|
|
COMPREHENSIVE INCOME ATTRIBUTABLE TO FORESTAR GROUP INC.
|
$
|
29,321
|
|
|
$
|
12,942
|
|
|
$
|
7,154
|
|
|
|
|
Forestar Group Inc. Shareholders
|
|
|
||||||||||||||||||||||||
|
|
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Treasury Stock
|
|
Retained Earnings
|
|
Non-controlling
Interests
|
||||||||||||||||||
|
Total
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
||||||||||||||||||||
|
(In thousands, except per share amounts)
|
||||||||||||||||||||||||||||
Balance at December 31, 2010
|
$
|
514,279
|
|
|
36,667,210
|
|
|
$
|
36,667
|
|
|
$
|
391,352
|
|
|
(1,216,647
|
)
|
|
$
|
(19,456
|
)
|
|
$
|
101,001
|
|
|
$
|
4,715
|
|
Net income
|
9,241
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,154
|
|
|
2,087
|
|
||||||
Distributions to noncontrolling interest
|
(5,259
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,259
|
)
|
||||||
Contributions from noncontrolling interest
|
143
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
143
|
|
||||||
Issuances of common stock
|
—
|
|
|
1,347
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Issuances of restricted stock
|
—
|
|
|
39,595
|
|
|
40
|
|
|
(40
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Issuances from exercises of stock options, net of swaps
|
1,290
|
|
|
127,580
|
|
|
128
|
|
|
1,342
|
|
|
(9,795
|
)
|
|
(180
|
)
|
|
—
|
|
|
—
|
|
||||||
Shares withheld for payroll taxes
|
(1,367
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(77,562
|
)
|
|
(1,367
|
)
|
|
—
|
|
|
—
|
|
||||||
Shares repurchased
|
(12,977
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(906,708
|
)
|
|
(12,977
|
)
|
|
—
|
|
|
—
|
|
||||||
Forfeitures of restricted stock
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
(2,164
|
)
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
||||||
Share-based compensation
|
5,972
|
|
|
—
|
|
|
—
|
|
|
5,972
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Tax benefit from exercise of restricted stock units and stock options and vested restricted stock
|
(110
|
)
|
|
—
|
|
|
—
|
|
|
(110
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Balance at December 31, 2011
|
$
|
511,212
|
|
|
36,835,732
|
|
|
$
|
36,836
|
|
|
$
|
398,517
|
|
|
(2,212,876
|
)
|
|
$
|
(33,982
|
)
|
|
$
|
108,155
|
|
|
$
|
1,686
|
|
Net income
|
17,876
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,942
|
|
|
4,934
|
|
||||||
Distributions to noncontrolling interest
|
(3,694
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,694
|
)
|
||||||
Contributions from noncontrolling interest
|
1,133
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,133
|
|
||||||
Issuances of common stock
|
—
|
|
|
18,469
|
|
|
19
|
|
|
(19
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Issuances of restricted stock
|
300
|
|
|
—
|
|
|
—
|
|
|
(129
|
)
|
|
27,934
|
|
|
429
|
|
|
—
|
|
|
—
|
|
||||||
Issuances from exercises of stock options, net of swaps
|
1,159
|
|
|
92,402
|
|
|
92
|
|
|
899
|
|
|
11,372
|
|
|
168
|
|
|
—
|
|
|
—
|
|
||||||
Shares withheld for payroll taxes
|
(968
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(59,603
|
)
|
|
(968
|
)
|
|
—
|
|
|
—
|
|
||||||
Shares repurchased
|
(1,409
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(94,450
|
)
|
|
(1,409
|
)
|
|
—
|
|
|
—
|
|
||||||
Share-based compensation
|
7,572
|
|
|
—
|
|
|
—
|
|
|
7,572
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Tax benefit from exercise of restricted stock units and stock options and vested restricted stock
|
366
|
|
|
—
|
|
|
—
|
|
|
366
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Balance at December 31, 2012
|
$
|
533,547
|
|
|
36,946,603
|
|
|
$
|
36,947
|
|
|
$
|
407,206
|
|
|
(2,327,623
|
)
|
|
$
|
(35,762
|
)
|
|
$
|
121,097
|
|
|
$
|
4,059
|
|
Net income
|
35,061
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29,321
|
|
|
5,740
|
|
||||||
Distributions to noncontrolling interest
|
(7,269
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,269
|
)
|
||||||
Contributions from noncontrolling interest
|
3,022
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,022
|
|
||||||
Issuances of restricted stock
|
3,747
|
|
|
—
|
|
|
—
|
|
|
3,597
|
|
|
7,298
|
|
|
150
|
|
|
—
|
|
|
—
|
|
||||||
Convertible note issuance proceeds, net of issuance costs and taxes
|
17,058
|
|
|
—
|
|
|
—
|
|
|
17,058
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
TEU issuance proceeds, net of issuance costs - 6,000,000 units
|
120,335
|
|
|
—
|
|
|
—
|
|
|
120,335
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Issuances from exercises of stock options, net of swaps
|
2,106
|
|
|
—
|
|
|
—
|
|
|
(449
|
)
|
|
189,864
|
|
|
2,555
|
|
|
—
|
|
|
—
|
|
||||||
Shares withheld for payroll taxes
|
(1,137
|
)
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
(59,219
|
)
|
|
(1,129
|
)
|
|
—
|
|
|
—
|
|
||||||
Forfeitures of restricted stock
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
(9,986
|
)
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
||||||
Share-based compensation
|
9,035
|
|
|
—
|
|
|
—
|
|
|
9,035
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Tax benefit from exercise of restricted stock units and stock options and vested restricted stock
|
(108
|
)
|
|
—
|
|
|
—
|
|
|
(108
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Balance at December 31, 2013
|
$
|
715,397
|
|
|
36,946,603
|
|
|
$
|
36,947
|
|
|
$
|
556,676
|
|
|
(2,199,666
|
)
|
|
$
|
(34,196
|
)
|
|
$
|
150,418
|
|
|
$
|
5,552
|
|
|
For the Year
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(In thousands)
|
||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
Consolidated net income
|
$
|
35,061
|
|
|
$
|
17,876
|
|
|
$
|
9,241
|
|
Adjustments:
|
|
|
|
|
|
||||||
Depreciation, depletion and amortization
|
29,980
|
|
|
18,926
|
|
|
10,802
|
|
|||
Change in deferred income taxes
|
5,389
|
|
|
(6,506
|
)
|
|
(27,177
|
)
|
|||
Change in unrecognized tax benefits
|
(6,251
|
)
|
|
151
|
|
|
(147
|
)
|
|||
Equity in (earnings) loss of unconsolidated ventures
|
(8,737
|
)
|
|
(14,469
|
)
|
|
29,209
|
|
|||
Distributions of earnings of unconsolidated ventures
|
6,360
|
|
|
3,251
|
|
|
6,597
|
|
|||
Proceeds from consolidated ventures’ sale of assets, net
|
—
|
|
|
24,294
|
|
|
—
|
|
|||
Share-based compensation
|
16,809
|
|
|
14,929
|
|
|
7,067
|
|
|||
Real estate cost of sales
|
104,899
|
|
|
39,360
|
|
|
34,137
|
|
|||
Cost of assets sold
|
—
|
|
|
—
|
|
|
24,931
|
|
|||
Dry hole exploration costs
|
5,837
|
|
|
1,069
|
|
|
—
|
|
|||
Real estate development and acquisition expenditures, net
|
(106,609
|
)
|
|
(91,940
|
)
|
|
(66,997
|
)
|
|||
Acquisition of loan secured by real estate
|
—
|
|
|
—
|
|
|
(21,137
|
)
|
|||
Reimbursements from utility and improvement districts
|
9,945
|
|
|
8,524
|
|
|
10,461
|
|
|||
Other changes in real estate
|
3,146
|
|
|
1,384
|
|
|
(284
|
)
|
|||
Changes in deferred income
|
(2,246
|
)
|
|
1,070
|
|
|
32
|
|
|||
Asset impairments
|
1,790
|
|
|
—
|
|
|
11,525
|
|
|||
Gain on sale of assets
|
(5,161
|
)
|
|
(25,983
|
)
|
|
(134
|
)
|
|||
Other
|
1,491
|
|
|
(21
|
)
|
|
73
|
|
|||
Changes in:
|
|
|
|
|
|
||||||
Notes and accounts receivables
|
(3,864
|
)
|
|
(1,132
|
)
|
|
1,359
|
|
|||
Prepaid expenses and other
|
(795
|
)
|
|
(2,560
|
)
|
|
536
|
|
|||
Accounts payable and other accrued liabilities
|
(1,557
|
)
|
|
(2,527
|
)
|
|
4,549
|
|
|||
Income taxes
|
3,290
|
|
|
(7,914
|
)
|
|
5,209
|
|
|||
Net cash provided by (used for) operating activities
|
88,777
|
|
|
(22,218
|
)
|
|
39,852
|
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
Property, equipment, software, reforestation and other
|
(11,828
|
)
|
|
(2,735
|
)
|
|
(2,044
|
)
|
|||
Oil and gas properties and equipment
|
(96,069
|
)
|
|
(21,416
|
)
|
|
(4,304
|
)
|
|||
Investment in unconsolidated ventures
|
(857
|
)
|
|
(2,318
|
)
|
|
(2,007
|
)
|
|||
Return of investment in unconsolidated ventures
|
3,494
|
|
|
12,654
|
|
|
3,067
|
|
|||
Business acquisition, net of cash acquired
|
—
|
|
|
(152,915
|
)
|
|
—
|
|
|||
Proceeds from sale of multifamily property
|
—
|
|
|
29,474
|
|
|
—
|
|
|||
Proceeds from sale of venture interest
|
—
|
|
|
32,095
|
|
|
—
|
|
|||
Other
|
1,333
|
|
|
42
|
|
|
393
|
|
|||
Net cash (used for) investing activities
|
(103,927
|
)
|
|
(105,119
|
)
|
|
(4,895
|
)
|
|||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Proceeds from issuance of convertible senior notes, net
|
120,795
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from issuance of tangible equity units, net
|
144,998
|
|
|
—
|
|
|
—
|
|
|||
Payments of debt
|
(106,076
|
)
|
|
(74,226
|
)
|
|
(123,399
|
)
|
|||
Additions to debt
|
43,911
|
|
|
203,642
|
|
|
123,397
|
|
|||
Deferred financing fees
|
(438
|
)
|
|
(5,883
|
)
|
|
(3,750
|
)
|
|||
Distributions to noncontrolling interests
|
(7,154
|
)
|
|
(3,266
|
)
|
|
(5,124
|
)
|
|||
Exercise of stock options
|
2,106
|
|
|
1,159
|
|
|
1,290
|
|
|||
Repurchases of common stock
|
—
|
|
|
(1,409
|
)
|
|
(12,977
|
)
|
|||
Payroll taxes on restricted stock and stock options
|
(1,137
|
)
|
|
(968
|
)
|
|
(1,367
|
)
|
|||
Excess income tax benefit from share-based compensation
|
91
|
|
|
366
|
|
|
(110
|
)
|
|||
Net cash (used for) provided by financing activities
|
197,096
|
|
|
119,415
|
|
|
(22,040
|
)
|
|||
Net (decrease) increase in cash and cash equivalents
|
181,946
|
|
|
(7,922
|
)
|
|
12,917
|
|
|||
Cash and cash equivalents at beginning of year
|
10,361
|
|
|
18,283
|
|
|
5,366
|
|
|||
Cash and cash equivalents at year-end
|
$
|
192,307
|
|
|
$
|
10,361
|
|
|
$
|
18,283
|
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
|
|
|
|
|
|
||||||
Cash paid during the year for:
|
|
|
|
|
|
||||||
Interest
|
$
|
13,818
|
|
|
$
|
12,820
|
|
|
$
|
14,166
|
|
Income taxes
|
$
|
4,955
|
|
|
$
|
21,678
|
|
|
$
|
25,335
|
|
SUPPLEMENTAL DISCLOSURE OF NON-CASH INFORMATION:
|
|
|
|
|
|
||||||
Capitalized interest
|
$
|
816
|
|
|
$
|
721
|
|
|
$
|
625
|
|
Noncontrolling interests
|
$
|
2,907
|
|
|
$
|
1,032
|
|
|
$
|
8
|
|
|
Year-End
|
||||||
|
2013
|
|
2012
|
||||
|
(In thousands)
|
||||||
Beginning balance
|
$
|
1,360
|
|
|
$
|
—
|
|
Acquisition of Credo
|
—
|
|
|
1,255
|
|
||
Accretion expense
|
94
|
|
|
26
|
|
||
Additions
|
29
|
|
|
79
|
|
||
|
$
|
1,483
|
|
|
$
|
1,360
|
|
|
At Year-End
|
||||||
|
2013
|
|
2012
|
||||
|
(In thousands)
|
||||||
Unproved oil and gas properties
|
$
|
100,320
|
|
|
$
|
81,672
|
|
Proved oil and gas properties
|
155,262
|
|
|
81,412
|
|
||
Total costs
|
255,582
|
|
|
163,084
|
|
||
Less accumulated depreciation, depletion and amortization
|
(22,941
|
)
|
|
(4,657
|
)
|
||
|
$
|
232,641
|
|
|
$
|
158,427
|
|
|
Estimated
|
|
Carrying
Value Year-End
|
||||||
|
Useful Lives
|
|
2013
|
|
2012
|
||||
|
|
|
(In thousands)
|
||||||
Buildings and building improvements
|
10 to 40 years
|
|
$
|
4,111
|
|
|
$
|
4,835
|
|
Property and equipment
|
2 to 10 years
|
|
8,240
|
|
|
5,745
|
|
||
|
|
|
12,351
|
|
|
10,580
|
|
||
Less: accumulated depreciation
|
|
|
(6,239
|
)
|
|
(5,721
|
)
|
||
|
|
|
$
|
6,112
|
|
|
$
|
4,859
|
|
|
Year-End
|
||||||
|
2013
|
|
2012
|
||||
|
(In thousands)
|
||||||
Goodwill
|
$
|
64,493
|
|
|
$
|
61,680
|
|
Identified intangibles, net
|
2,153
|
|
|
2,188
|
|
||
|
$
|
66,646
|
|
|
$
|
63,868
|
|
|
|
Purchase Price Allocation
|
|||||||||||
|
|
Year-End
|
|
|
|
|
|||||||
|
|
2012
|
|
Adjustments
|
|
Final
|
|||||||
|
|
(In thousands)
|
|||||||||||
Cash and short-term investments
|
|
$
|
2,300
|
|
|
$
|
—
|
|
|
|
$
|
2,300
|
|
Receivables
|
|
9,144
|
|
|
1,003
|
|
(a)
|
|
10,147
|
|
|||
Oil and gas properties and equipment
|
|
140,514
|
|
|
(4,712
|
)
|
(b)
|
|
135,802
|
|
|||
Other properties and equipment
|
|
67
|
|
|
—
|
|
|
|
67
|
|
|||
Goodwill and other intangible assets
|
|
58,396
|
|
|
2,813
|
|
(c)
|
|
61,209
|
|
|||
Other
|
|
676
|
|
|
—
|
|
|
|
676
|
|
|||
Total assets acquired
|
|
211,097
|
|
|
(896
|
)
|
|
|
210,201
|
|
|||
|
|
|
|
|
|
|
|
||||||
Accounts payable and accrued liabilities
|
|
29,927
|
|
|
13
|
|
(d)
|
|
29,940
|
|
|||
Deferred tax liability
|
|
24,700
|
|
|
(909
|
)
|
(e)
|
|
23,791
|
|
|||
Other liabilities
|
|
1,255
|
|
|
—
|
|
|
|
1,255
|
|
|||
Total liabilities assumed
|
|
55,882
|
|
|
(896
|
)
|
|
|
54,986
|
|
|||
|
|
|
|
|
|
|
|
||||||
Estimated fair value of net assets acquired
|
|
$
|
155,215
|
|
|
$
|
—
|
|
|
|
$
|
155,215
|
|
(a)
|
Primarily related to unrecorded seismic and leasehold costs due from partners.
|
(b)
|
Fair value adjustments allocated to near-term expiring leasehold acreage.
|
(c)
|
Goodwill adjustments associated with fair value adjustments for oil and gas properties, net of deferred taxes and working capital adjustments.
|
(d)
|
Primarily related to current income taxes payable.
|
(e)
|
Primarily related to deferred taxes on fair value adjustments of near-term expiring leasehold acreage.
|
|
At Year-End
|
||||||
|
2013
|
|
2012
|
||||
|
(In thousands)
|
||||||
Entitled, developed and under development projects
|
$
|
361,687
|
|
|
$
|
361,827
|
|
Undeveloped land (includes land in entitlement)
|
86,367
|
|
|
82,688
|
|
||
Income producing properties
|
|
|
|
||||
Carrying value
|
99,476
|
|
|
100,855
|
|
||
Accumulated depreciation
|
(28,066
|
)
|
|
(28,220
|
)
|
||
Net carrying value
|
71,410
|
|
|
72,635
|
|
||
|
$
|
519,464
|
|
|
$
|
517,150
|
|
|
Venture Assets
|
|
Venture Borrowings
(a)
|
|
Venture Equity
|
|
Our Investment
|
||||||||||||||||||||||||
|
At Year-End
|
||||||||||||||||||||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||||||||||
|
(In thousands)
|
||||||||||||||||||||||||||||||
242, LLC
(b)
|
$
|
23,751
|
|
|
$
|
21,408
|
|
|
$
|
921
|
|
|
$
|
810
|
|
|
$
|
19,838
|
|
|
$
|
19,576
|
|
|
$
|
9,084
|
|
|
$
|
8,903
|
|
CJUF III, RH Holdings
|
36,320
|
|
|
15,970
|
|
|
18,492
|
|
|
1
|
|
|
15,415
|
|
|
13,701
|
|
|
3,235
|
|
|
3,836
|
|
||||||||
CL Ashton Woods
(c)
|
10,473
|
|
|
15,701
|
|
|
—
|
|
|
—
|
|
|
9,704
|
|
|
15,044
|
|
|
3,544
|
|
|
5,775
|
|
||||||||
CL Realty
|
8,298
|
|
|
8,245
|
|
|
—
|
|
|
—
|
|
|
8,070
|
|
|
7,842
|
|
|
4,035
|
|
|
3,921
|
|
||||||||
FMF Peakview
|
30,673
|
|
|
16,859
|
|
|
12,533
|
|
|
—
|
|
|
16,620
|
|
|
13,331
|
|
|
3,406
|
|
|
2,666
|
|
||||||||
HM Stonewall Estates
(c)
|
3,781
|
|
|
5,184
|
|
|
63
|
|
|
104
|
|
|
3,718
|
|
|
5,080
|
|
|
2,128
|
|
|
2,470
|
|
||||||||
LM Land Holdings
(c)
|
33,298
|
|
|
21,094
|
|
|
9,768
|
|
|
3,086
|
|
|
13,347
|
|
|
13,128
|
|
|
8,283
|
|
|
6,045
|
|
||||||||
Temco
|
13,320
|
|
|
13,255
|
|
|
—
|
|
|
—
|
|
|
13,160
|
|
|
13,066
|
|
|
6,580
|
|
|
6,533
|
|
||||||||
Other ventures (5)
(d)
|
12,723
|
|
|
17,129
|
|
|
29,699
|
|
|
34,357
|
|
|
(31,357
|
)
|
|
(31,275
|
)
|
|
852
|
|
|
1,397
|
|
||||||||
|
$
|
172,637
|
|
|
$
|
134,845
|
|
|
$
|
71,476
|
|
|
$
|
38,358
|
|
|
$
|
68,515
|
|
|
$
|
69,493
|
|
|
$
|
41,147
|
|
|
$
|
41,546
|
|
|
Revenues
|
|
Earnings (Loss)
|
|
Our Share of Earnings (Loss)
|
||||||||||||||||||||||||||||||
|
For the Year
|
||||||||||||||||||||||||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
2013
|
|
2012
|
|
2011
|
|
2013
|
|
2012
|
|
2011
|
||||||||||||||||||
|
(In thousands)
|
||||||||||||||||||||||||||||||||||
242, LLC
(b)
|
$
|
6,269
|
|
|
$
|
4,868
|
|
|
$
|
2,378
|
|
|
$
|
1,512
|
|
|
$
|
1,040
|
|
|
$
|
239
|
|
|
$
|
805
|
|
|
$
|
572
|
|
|
$
|
153
|
|
CJUF III, RH Holdings
|
120
|
|
|
—
|
|
|
—
|
|
|
(652
|
)
|
|
(241
|
)
|
|
—
|
|
|
(652
|
)
|
|
(241
|
)
|
|
—
|
|
|||||||||
CL Ashton Woods
(c)
|
9,018
|
|
|
3,353
|
|
|
—
|
|
|
2,660
|
|
|
1,472
|
|
|
—
|
|
|
4,169
|
|
|
2,024
|
|
|
—
|
|
|||||||||
CL Realty
(e)
|
1,357
|
|
|
2,667
|
|
|
9,141
|
|
|
1,028
|
|
|
1,060
|
|
|
(22,832
|
)
|
|
514
|
|
|
530
|
|
|
(11,416
|
)
|
|||||||||
FMF Peakview
|
1
|
|
|
—
|
|
|
—
|
|
|
(252
|
)
|
|
(116
|
)
|
|
—
|
|
|
(50
|
)
|
|
(23
|
)
|
|
—
|
|
|||||||||
HM Stonewall Estates
(c)
|
2,922
|
|
|
2,500
|
|
|
—
|
|
|
1,082
|
|
|
829
|
|
|
—
|
|
|
452
|
|
|
332
|
|
|
—
|
|
|||||||||
LM Land Holdings
(c)
|
25,426
|
|
|
10,268
|
|
|
—
|
|
|
11,012
|
|
|
1,895
|
|
|
—
|
|
|
3,418
|
|
|
257
|
|
|
—
|
|
|||||||||
Palisades West
|
—
|
|
|
—
|
|
|
16,230
|
|
|
—
|
|
|
—
|
|
|
5,858
|
|
|
—
|
|
|
—
|
|
|
1,464
|
|
|||||||||
Temco
(f)
|
445
|
|
|
702
|
|
|
653
|
|
|
96
|
|
|
(80
|
)
|
|
(42,242
|
)
|
|
48
|
|
|
(40
|
)
|
|
(21,121
|
)
|
|||||||||
Other ventures (5)
(g)
|
5,994
|
|
|
8,790
|
|
|
12,472
|
|
|
176
|
|
|
10,032
|
|
|
(434
|
)
|
|
33
|
|
|
11,058
|
|
|
1,711
|
|
|||||||||
|
$
|
51,552
|
|
|
$
|
33,148
|
|
|
$
|
40,874
|
|
|
$
|
16,662
|
|
|
$
|
15,891
|
|
|
$
|
(59,411
|
)
|
|
$
|
8,737
|
|
|
$
|
14,469
|
|
|
$
|
(29,209
|
)
|
(a)
|
Total includes current maturities of
$37,966,000
at year-end
2013
, of which
$37,822,000
is non-recourse to us, and
$32,323,000
at year-end
2012
, of which
$32,083,000
is non-recourse to us.
|
(b)
|
Includes unamortized deferred gains on real estate contributed by us to ventures. We recognize deferred gains as income as real estate is sold to third parties. Deferred gains of
$835,000
are reflected as a reduction to our investment in unconsolidated ventures at year-end
2013
.
|
(c)
|
We acquired these equity investments from CL Realty in 2012 at estimated fair values. The difference between estimated fair value of the equity investment and our capital account within the respective ventures at closing (basis difference) will be accreted as income or expense over the life of the investment and included in our share of earnings (loss) from the respective ventures. Unrecognized basis difference of
$1,601,000
is reflected as a reduction of our investment in unconsolidated ventures at year-end
2013
.
|
(d)
|
Our investment in other ventures reflects our ownership interests generally ranging from
25
to
50 percent
, excluding venture losses that exceed our investment where we are not obligated to fund those losses. Please read
Note 15 — Variable Interest Entities
for additional information.
|
(e)
|
In
2011
, CL Realty’s loss includes non-cash impairment charges of
$25,750,000
, of which,
$23,255,000
relates to additional non-cash impairments associated with real estate assets sold in
2012
.
|
(f)
|
In
2011
, Temco’s loss includes non-cash impairment charges of
$41,226,000
, of which,
$21,426,000
principally relates to additional non-cash impairments associated with real estate assets sold in
2012
.
|
(g)
|
In
2012
, other ventures earnings include
$5,307,000
related to a consolidated venture’s share of the gain associated with Round Rock Luxury Apartments sale of Las Brisas. Our share of these earnings was
$2,541,000
and we allocated
$2,766,000
to net income attributable to noncontrolling interests. In
2011
, our share of other ventures earnings (loss) includes
$2,164,000
in earnings related to a deferred gain recognized as a result of entering into an agreement to acquire certain of CL Realty’s real estate assets and
$4,869,000
in deferred gains for year 2010 related to CL Realty’s sale of
625
acres to a third party for
$20,250,000
.
|
|
At Year-End
|
||||||
|
2013
|
|
2012
|
||||
|
(In thousands)
|
||||||
Loan secured by real estate
|
$
|
7,610
|
|
|
$
|
18,507
|
|
Other loans secured by real estate, average interest rate of 5.00% at year-end 2013 and 6.24% at year-end 2012
|
7,987
|
|
|
1,875
|
|
||
Joint interest billing receivables
|
3,896
|
|
|
2,375
|
|
||
Oil and gas revenue accruals
|
8,137
|
|
|
5,556
|
|
||
Other receivables and accrued interest
|
11,648
|
|
|
5,372
|
|
||
|
39,278
|
|
|
33,685
|
|
||
Allowance for bad debts
|
(26
|
)
|
|
(62
|
)
|
||
|
$
|
39,252
|
|
|
$
|
33,623
|
|
|
At Year-End
|
||||||
|
2013
|
|
2012
|
||||
|
(In thousands)
|
||||||
Beginning of year
|
$
|
25,149
|
|
|
$
|
28,926
|
|
Change in accretable yield due to change in timing of estimated cash flows
|
(10,950
|
)
|
|
(515
|
)
|
||
Interest income recognized
|
(5,291
|
)
|
|
(3,262
|
)
|
||
|
$
|
8,908
|
|
|
$
|
25,149
|
|
|
At Year-End
|
||||||
|
2013
|
|
2012
|
||||
|
(In thousands)
|
||||||
Senior secured credit facility
|
|
|
|
||||
Term loan facility — average interest rate of 4.17% at year-end 2013 and 4.21% at year-end 2012
|
$
|
200,000
|
|
|
$
|
200,000
|
|
Revolving line of credit — average interest rate of 4.75% at year-end 2012
|
—
|
|
|
44,000
|
|
||
3.75% convertible senior notes due 2020, net of discount
|
99,890
|
|
|
—
|
|
||
6.00% tangible equity units, net of discount
|
25,619
|
|
|
—
|
|
||
Secured promissory notes — average interest rates of 3.17% at year-end 2013 and 2.80% at year-end 2012
|
15,400
|
|
|
34,171
|
|
||
Other indebtedness due through 2017 at variable and fixed interest rates ranging from 4.50% to 5.50%
|
16,498
|
|
|
15,892
|
|
||
|
$
|
357,407
|
|
|
$
|
294,063
|
|
•
|
Level 1 — Quoted prices in active markets for identical assets or liabilities;
|
•
|
Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and
|
•
|
Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
|
|
Year-End 2013
|
|
Year-End 2012
|
||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
|
(In thousands)
|
||||||||||||||||||||||||||||||
Non-Financial Assets and Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Real estate
|
$
|
—
|
|
|
$
|
3,700
|
|
|
$
|
—
|
|
|
$
|
3,700
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Year-End 2013
|
|
Year-End 2012
|
|
|
||||||||||||
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
|
Valuation
Technique
|
||||||||
|
(In thousands)
|
||||||||||||||||
Loan secured by real estate
|
$
|
7,610
|
|
|
$
|
18,025
|
|
|
$
|
18,507
|
|
|
$
|
35,824
|
|
|
Level 2
|
Fixed rate debt
(a)
|
$
|
(126,640
|
)
|
|
$
|
(118,634
|
)
|
|
$
|
(3,989
|
)
|
|
$
|
(4,070
|
)
|
|
Level 2
|
(a)
|
Year-end 2013 includes our
3.75%
convertible senior notes due 2020, issued February 26, 2013 and our amortizing notes associated with
6.00%
tangible equity units, issued November 27, 2013.
|
|
For the Year
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(In thousands)
|
||||||||||
Numerator:
|
|
|
|
|
|
||||||
Consolidated net income
|
$
|
35,061
|
|
|
$
|
17,876
|
|
|
$
|
9,241
|
|
Less: Net income attributable to noncontrolling interest
|
(5,740
|
)
|
|
(4,934
|
)
|
|
(2,087
|
)
|
|||
Earnings available for diluted earnings per share
|
$
|
29,321
|
|
|
$
|
12,942
|
|
|
$
|
7,154
|
|
Less: Undistributed net income allocated to participating securities
|
(585
|
)
|
|
—
|
|
|
—
|
|
|||
Earnings available to common shareholders for basic earnings per share
|
$
|
28,736
|
|
|
$
|
12,942
|
|
|
$
|
7,154
|
|
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
||||||
Weighted average common shares outstanding — basic
|
35,365
|
|
|
35,214
|
|
|
35,413
|
|
|||
Weighted average common shares upon conversion of participating securities
(a)
|
835
|
|
|
—
|
|
|
—
|
|
|||
Dilutive effect of stock options, restricted stock and equity-settled awards
|
613
|
|
|
268
|
|
|
368
|
|
|||
Total weighted average shares outstanding — diluted
|
36,813
|
|
|
35,482
|
|
|
35,781
|
|
|||
Anti-dilutive awards excluded from diluted weighted average shares outstanding
|
1,803
|
|
|
2,713
|
|
|
2,008
|
|
(a)
|
Our earnings per share calculation reflects the weighted average shares issuable upon settlement of the prepaid stock purchase contract component of our
6.00%
tangible equity units, issued November 27, 2013.
|
|
For the Year
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(In thousands)
|
||||||||||
Current tax provision:
|
|
|
|
|
|
||||||
U.S. Federal
|
$
|
(6,004
|
)
|
|
$
|
(11,834
|
)
|
|
$
|
(27,442
|
)
|
State and other
|
(2,066
|
)
|
|
(2,171
|
)
|
|
(3,013
|
)
|
|||
|
(8,070
|
)
|
|
(14,005
|
)
|
|
(30,455
|
)
|
|||
Deferred tax provision:
|
|
|
|
|
|
||||||
U.S. Federal
|
1,148
|
|
|
4,910
|
|
|
26,264
|
|
|||
State and other
|
(286
|
)
|
|
1,079
|
|
|
1,170
|
|
|||
|
862
|
|
|
5,989
|
|
|
27,434
|
|
|||
Income tax expense
|
$
|
(7,208
|
)
|
|
$
|
(8,016
|
)
|
|
$
|
(3,021
|
)
|
|
For the Year
|
|||||||
|
2013
|
|
2012
|
|
2011
|
|||
Federal statutory rate
|
35
|
%
|
|
35
|
%
|
|
35
|
%
|
State, net of federal benefit
|
4
|
|
|
5
|
|
|
10
|
|
Recognition of previously unrecognized tax benefits
|
(15
|
)
|
|
—
|
|
|
—
|
|
State rate change due to acquisition
|
—
|
|
|
(2
|
)
|
|
—
|
|
Acquisition costs
|
—
|
|
|
4
|
|
|
—
|
|
Noncontrolling interests
|
(5
|
)
|
|
(7
|
)
|
|
(6
|
)
|
Charitable contributions
|
—
|
|
|
—
|
|
|
(6
|
)
|
Oil and gas percentage depletion
|
(2
|
)
|
|
(5
|
)
|
|
(8
|
)
|
Other
|
—
|
|
|
1
|
|
|
—
|
|
Effective tax rate
|
17
|
%
|
|
31
|
%
|
|
25
|
%
|
|
At Year-End
|
||||||
|
2013
|
|
2012
|
||||
|
(In thousands)
|
||||||
Deferred Tax Assets:
|
|
|
|
||||
Real estate
|
$
|
75,157
|
|
|
$
|
74,946
|
|
Employee benefits
|
17,902
|
|
|
15,323
|
|
||
Net operating loss carryforwards
|
3,076
|
|
|
11,897
|
|
||
Income producing properties
|
3,529
|
|
|
3,209
|
|
||
Oil and gas percentage depletion carryforwards
|
3,344
|
|
|
3,193
|
|
||
Accruals not deductible until paid
|
960
|
|
|
1,608
|
|
||
Gross deferred tax assets
|
103,968
|
|
|
110,176
|
|
||
Valuation allowance
|
(375
|
)
|
|
(643
|
)
|
||
Deferred tax asset net of valuation allowance
|
103,593
|
|
|
109,533
|
|
||
Deferred Tax Liabilities:
|
|
|
|
||||
Oil and gas properties
|
(46,966
|
)
|
|
(44,631
|
)
|
||
Undeveloped land
|
(5,961
|
)
|
|
(8,345
|
)
|
||
Convertible debt
|
(8,803
|
)
|
|
—
|
|
||
Timber
|
(1,465
|
)
|
|
(1,809
|
)
|
||
Gross deferred tax liabilities
|
(63,195
|
)
|
|
(54,785
|
)
|
||
Net Deferred Tax Asset
|
$
|
40,398
|
|
|
$
|
54,748
|
|
|
At Year-End
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(In thousands)
|
||||||||||
Balance at beginning of year
|
$
|
5,831
|
|
|
$
|
5,831
|
|
|
$
|
7,394
|
|
Reductions for tax positions of prior years
|
—
|
|
|
—
|
|
|
(1,563
|
)
|
|||
Reductions due to lapse of statute of limitations
|
(5,831
|
)
|
|
—
|
|
|
—
|
|
|||
Balance at end of year that would affect the annual effective tax rate if recognized
|
$
|
—
|
|
|
$
|
5,831
|
|
|
$
|
5,831
|
|
|
Real
Estate
|
|
Oil and Gas
|
|
Other Natural
Resources
|
|
Items Not
Allocated to
Segments
|
|
|
Total
|
||||||||||
|
(In thousands)
|
|||||||||||||||||||
For the year or at year-end 2013
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
248,011
|
|
|
$
|
72,313
|
|
|
$
|
10,721
|
|
|
$
|
—
|
|
|
|
$
|
331,045
|
|
Depreciation, depletion and amortization
|
3,117
|
|
|
19,552
|
|
|
651
|
|
|
6,660
|
|
|
|
29,980
|
|
|||||
Equity in earnings (loss) of unconsolidated ventures
|
8,089
|
|
|
592
|
|
|
56
|
|
|
—
|
|
|
|
8,737
|
|
|||||
Income (loss) before taxes
|
68,454
|
|
|
18,859
|
|
|
6,507
|
|
|
(57,291
|
)
|
(a)
|
|
36,529
|
|
|||||
Total assets
|
582,802
|
|
|
312,553
|
|
|
23,478
|
|
|
253,319
|
|
|
|
1,172,152
|
|
|||||
Investment in unconsolidated ventures
|
41,147
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
41,147
|
|
|||||
Capital expenditures
(b)
|
7,265
|
|
|
97,696
|
|
|
2,720
|
|
|
216
|
|
|
|
107,897
|
|
|||||
For the year or at year-end 2012
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
120,115
|
|
|
$
|
44,220
|
|
|
$
|
8,256
|
|
|
$
|
—
|
|
|
|
$
|
172,591
|
|
Depreciation, depletion and amortization
|
4,340
|
|
|
4,987
|
|
|
1,254
|
|
|
8,345
|
|
|
|
18,926
|
|
|||||
Equity in earnings (loss) of unconsolidated ventures
|
13,897
|
|
|
509
|
|
|
63
|
|
|
—
|
|
|
|
14,469
|
|
|||||
Income (loss) before taxes
|
53,582
|
|
|
26,608
|
|
|
29
|
|
|
(59,261
|
)
|
(a)
|
|
20,958
|
|
|||||
Total assets
|
588,137
|
|
|
227,061
|
|
|
24,066
|
|
|
79,170
|
|
|
|
918,434
|
|
|||||
Investment in unconsolidated ventures
|
41,546
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
41,546
|
|
|||||
Capital expenditures
(b)
|
1,093
|
|
|
21,971
|
|
|
292
|
|
|
795
|
|
|
|
24,151
|
|
|||||
For the year or at year-end 2011
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
106,168
|
|
|
$
|
24,448
|
|
|
$
|
4,957
|
|
|
$
|
—
|
|
|
|
$
|
135,573
|
|
Depreciation, depletion and amortization
|
5,729
|
|
|
339
|
|
|
1,029
|
|
|
3,705
|
|
|
|
10,802
|
|
|||||
Equity in earnings of unconsolidated ventures
|
(30,626
|
)
|
|
1,394
|
|
|
23
|
|
|
—
|
|
|
|
(29,209
|
)
|
|||||
Income (loss) before taxes
|
(25,704
|
)
|
|
19,783
|
|
|
(1,867
|
)
|
|
17,963
|
|
(a)
|
|
10,175
|
|
|||||
Total assets
|
657,099
|
|
|
5,484
|
|
|
27,862
|
|
|
104,412
|
|
|
|
794,857
|
|
|||||
Investment in unconsolidated ventures
|
64,223
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
64,223
|
|
|||||
Capital expenditures
(b)
|
739
|
|
|
4,690
|
|
|
153
|
|
|
766
|
|
|
|
6,348
|
|
(a)
|
Items not allocated to segments consist of:
|
|
For the Year
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(In thousands)
|
||||||||||
General and administrative expense
|
$
|
(20,597
|
)
|
|
$
|
(25,176
|
)
|
|
$
|
(20,110
|
)
|
Share-based compensation expense
|
(16,809
|
)
|
|
(14,929
|
)
|
|
(7,067
|
)
|
|||
Gain on sale of assets
|
—
|
|
|
16
|
|
|
61,784
|
|
|||
Interest expense
|
(20,004
|
)
|
|
(19,363
|
)
|
|
(17,012
|
)
|
|||
Other corporate non-operating income
|
119
|
|
|
191
|
|
|
368
|
|
|||
|
$
|
(57,291
|
)
|
|
$
|
(59,261
|
)
|
|
$
|
17,963
|
|
(b)
|
Consists of expenditures for oil and gas properties and equipment, property, plant and equipment and reforestation of timber.
|
|
For the Year
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(In thousands)
|
||||||||||
Cash-settled awards
|
$
|
7,774
|
|
|
$
|
6,465
|
|
|
$
|
1,095
|
|
Equity-settled awards
|
4,281
|
|
|
3,059
|
|
|
941
|
|
|||
Restricted stock
|
538
|
|
|
2,154
|
|
|
2,505
|
|
|||
Stock options
|
4,216
|
|
|
3,251
|
|
|
2,526
|
|
|||
|
$
|
16,809
|
|
|
$
|
14,929
|
|
|
$
|
7,067
|
|
|
For the Year
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(In thousands)
|
||||||||||
General and administrative
|
$
|
7,779
|
|
|
$
|
7,144
|
|
|
$
|
3,216
|
|
Other operating
|
9,030
|
|
|
7,785
|
|
|
3,851
|
|
|||
|
$
|
16,809
|
|
|
$
|
14,929
|
|
|
$
|
7,067
|
|
|
Equivalent
Units
|
|
Weighted Average Grant Date Fair Value
|
|
|
(In thousands)
|
|
(Per unit)
|
|
Non-vested at beginning of period
|
350
|
|
|
$17.03
|
Granted
|
89
|
|
|
18.70
|
Vested
|
(200
|
)
|
|
17.63
|
Forfeited
|
(6
|
)
|
|
17.67
|
Non-vested at end of period
|
233
|
|
|
17.90
|
|
Rights
Outstanding
|
|
Weighted Average
Exercise Price
|
|
Weighted Average
Remaining Contractual Term
|
|
Aggregate Intrinsic Value
(Current Value Less Exercise Price)
|
|
|
(In thousands)
|
|
(Per share)
|
|
(In years)
|
|
(In thousands)
|
|
Balance at beginning of period
|
866
|
|
|
$11.38
|
|
6
|
|
$5,256
|
Granted
|
—
|
|
|
—
|
|
|
|
|
Exercised
|
(285
|
)
|
|
10.16
|
|
|
|
|
Forfeited
|
(1
|
)
|
|
17.80
|
|
|
|
|
Balance at end of period
|
580
|
|
|
11.96
|
|
5
|
|
5,400
|
Exercisable at end of period
|
534
|
|
|
11.46
|
|
5
|
|
5,240
|
|
Equivalent
Units
|
|
Weighted Average Grant Date Fair Value
|
|||
|
(In thousands)
|
|
(Per unit)
|
|||
Non-vested at beginning of period
|
409
|
|
|
$
|
18.99
|
|
Granted
|
275
|
|
|
20.21
|
|
|
Vested
|
(88
|
)
|
|
19.73
|
|
|
Forfeited
|
(15
|
)
|
|
17.49
|
|
|
Non-vested at end of period
|
581
|
|
|
19.50
|
|
|
Restricted
Shares
|
|
Weighted Average Grant Date Fair Value
|
|||
|
(In thousands)
|
|
(Per unit)
|
|||
Non-vested at beginning of period
|
211
|
|
|
$
|
16.95
|
|
Granted
|
8
|
|
|
20.55
|
|
|
Vested
|
(162
|
)
|
|
17.80
|
|
|
Forfeited
|
(10
|
)
|
|
15.02
|
|
|
Non-vested at end of period
|
47
|
|
|
14.99
|
|
|
Options
Outstanding
|
|
Weighted
Average
Exercise Price
|
|
Weighted
Average
Remaining
Contractual
Term
|
|
Aggregate
Intrinsic Value
(Current
Value Less
Exercise Price)
|
|||||
|
(In thousands)
|
|
(Per share)
|
|
(In years)
|
|
(In thousands)
|
|||||
Balance at beginning of period
|
1,756
|
|
|
$
|
20.53
|
|
|
7
|
|
$
|
1,956
|
|
Granted
|
373
|
|
|
18.70
|
|
|
|
|
|
|||
Exercised
|
(85
|
)
|
|
16.25
|
|
|
|
|
|
|||
Forfeited
|
(38
|
)
|
|
24.39
|
|
|
|
|
|
|||
Balance at end of period
|
2,006
|
|
|
20.30
|
|
|
7
|
|
6,433
|
|
||
Exercisable at end of period
|
1,133
|
|
|
22.35
|
|
|
5
|
|
3,251
|
|
|
For the Year
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Expected stock price volatility
|
66.8
|
%
|
|
60.2
|
%
|
|
56.2
|
%
|
|||
Risk-free interest rate
|
1.4
|
%
|
|
1.3
|
%
|
|
2.4
|
%
|
|||
Expected life of options (years)
|
6
|
|
|
6
|
|
|
6
|
|
|||
Expected dividend yield
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|||
Weighted average estimated fair value of options at grant date
|
$
|
11.47
|
|
|
$
|
9.22
|
|
|
$
|
10.11
|
|
|
Estimated Reserves
|
||||
|
Oil
(Barrels)
|
|
Gas
(Mcf)
|
||
|
(In thousands)
|
||||
Consolidated entities:
|
|
|
|
||
Year-end 2010
|
609
|
|
|
6,659
|
|
Revisions of previous estimates
|
197
|
|
|
3
|
|
Extensions and discoveries
|
410
|
|
|
2,670
|
|
Production
|
(152
|
)
|
|
(1,129
|
)
|
Year-end 2011
|
1,064
|
|
|
8,203
|
|
Revisions of previous estimates
|
45
|
|
|
(2,163
|
)
|
Extensions and discoveries
|
86
|
|
|
241
|
|
Acquisitions
|
2,396
|
|
|
7,109
|
|
Production
|
(371
|
)
|
|
(1,668
|
)
|
Year-end 2012
|
3,220
|
|
|
11,722
|
|
Revisions of previous estimates
|
182
|
|
|
1,243
|
|
Extensions and discoveries
|
3,085
|
|
|
2,046
|
|
Acquisitions
|
35
|
|
|
531
|
|
Production
|
(698
|
)
|
|
(1,912
|
)
|
Year-end 2013
|
5,824
|
|
|
13,630
|
|
Our share of ventures accounted for using the equity method:
|
|
|
|
||
Year-end 2010
|
—
|
|
|
3,871
|
|
Revisions of previous estimates
|
—
|
|
|
(95
|
)
|
Extensions and discoveries
|
—
|
|
|
—
|
|
Production
|
—
|
|
|
(493
|
)
|
Year-end 2011
|
—
|
|
|
3,283
|
|
Revisions of previous estimates
|
—
|
|
|
(390
|
)
|
Extensions and discoveries
|
—
|
|
|
—
|
|
Production
|
—
|
|
|
(321
|
)
|
Year-end 2012
|
—
|
|
|
2,572
|
|
Revisions of previous estimates
|
—
|
|
|
7
|
|
Extensions and discoveries
|
—
|
|
|
—
|
|
Production
|
—
|
|
|
(247
|
)
|
Year-end 2013
|
—
|
|
|
2,332
|
|
Total consolidated and our share of equity method ventures:
|
|
|
|
||
Year-end 2011
(a)
|
1,064
|
|
|
11,486
|
|
Year-end 2012
|
|
|
|
||
Proved developed reserves
|
2,416
|
|
|
13,020
|
|
Proved undeveloped reserves
|
804
|
|
|
1,274
|
|
Total Year-end 2012
|
3,220
|
|
|
14,294
|
|
Year-end 2013
|
|
|
|
||
Proved developed reserves
|
3,893
|
|
|
13,717
|
|
Proved undeveloped reserves
|
1,931
|
|
|
2,245
|
|
Total Year-end 2013
|
5,824
|
|
|
15,962
|
|
(a)
|
In 2011, consolidated entities and equity method ventures did not include any proved undeveloped reserves. In 2013 and 2012, proved undeveloped reserves are a result of our acquisition of Credo.
|
|
At Year-End
|
||||||
|
2013
|
|
2012
|
||||
|
(In thousands)
|
||||||
Consolidated entities:
|
|
|
|
||||
Unproved oil and gas properties
|
$
|
100,320
|
|
|
$
|
81,672
|
|
Proved oil and gas properties
|
155,262
|
|
|
81,412
|
|
||
Total costs
|
255,582
|
|
|
163,084
|
|
||
Less accumulated depreciation, depletion and amortization
|
(22,941
|
)
|
|
(4,657
|
)
|
||
Net capitalized costs
|
$
|
232,641
|
|
|
$
|
158,427
|
|
|
For the Year
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(In thousands)
|
||||||||||
Consolidated entities:
|
|
|
|
|
|
||||||
Acquisition of properties
|
$
|
35,806
|
|
|
$
|
4,418
|
|
|
$
|
714
|
|
Exploration costs
|
10,486
|
|
|
1,752
|
|
|
549
|
|
|||
Development costs
|
54,538
|
|
|
15,938
|
|
|
3,597
|
|
|||
Total cost incurred for consolidated entities
|
$
|
100,830
|
|
|
$
|
22,108
|
|
|
$
|
4,860
|
|
|
At Year-End
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(In thousands)
|
||||||||||
Consolidated entities:
|
|
|
|
|
|
||||||
Future cash inflows
|
$
|
544,098
|
|
|
$
|
322,098
|
|
|
$
|
142,043
|
|
Future production and development costs
|
(231,801
|
)
|
|
(104,441
|
)
|
|
(18,929
|
)
|
|||
Future income tax expenses
|
(77,361
|
)
|
|
(50,350
|
)
|
|
(38,681
|
)
|
|||
Future net cash flows
|
234,936
|
|
|
167,307
|
|
|
84,433
|
|
|||
10% annual discount for estimated timing of cash flows
|
(99,383
|
)
|
|
(60,764
|
)
|
|
(31,735
|
)
|
|||
Standardized measure of discounted future net cash flows
|
$
|
135,553
|
|
|
$
|
106,543
|
|
|
$
|
52,698
|
|
Our share in ventures accounted for using the equity method:
|
|
|
|
|
|
||||||
Future cash inflows
|
$
|
4,765
|
|
|
$
|
5,125
|
|
|
$
|
12,346
|
|
Future production and development costs
|
(512
|
)
|
|
(551
|
)
|
|
(1,731
|
)
|
|||
Future income tax expenses
|
(1,616
|
)
|
|
(1,738
|
)
|
|
(3,154
|
)
|
|||
Future net cash flows
|
2,637
|
|
|
2,836
|
|
|
7,461
|
|
|||
10% annual discount for estimated timing of cash flows
|
(1,337
|
)
|
|
(1,423
|
)
|
|
(3,953
|
)
|
|||
Standardized measure of discounted future net cash flows
|
$
|
1,300
|
|
|
$
|
1,413
|
|
|
$
|
3,508
|
|
Total consolidated and our share of equity method ventures
|
$
|
136,853
|
|
|
$
|
107,956
|
|
|
$
|
56,206
|
|
|
For the Year
|
||||||||||
|
Consolidated
|
|
Our Share of Equity
Method Ventures
|
|
Total
|
||||||
|
(In thousands)
|
||||||||||
Year-end 2010
|
$
|
26,810
|
|
|
$
|
4,327
|
|
|
$
|
31,137
|
|
Changes resulting from:
|
|
|
|
|
|
||||||
Net change in sales prices and production costs
|
8,476
|
|
|
153
|
|
|
8,629
|
|
|||
Sales of oil and gas, net of production costs
|
(17,747
|
)
|
|
(1,622
|
)
|
|
(19,369
|
)
|
|||
Net change due to extensions and discoveries
|
32,671
|
|
|
—
|
|
|
32,671
|
|
|||
Net change due to revisions of quantity estimates
|
17,586
|
|
|
(204
|
)
|
|
17,382
|
|
|||
Accretion of discount
|
3,013
|
|
|
466
|
|
|
3,479
|
|
|||
Net change in income taxes
|
(18,111
|
)
|
|
388
|
|
|
(17,723
|
)
|
|||
Aggregate change for the year
|
25,888
|
|
|
(819
|
)
|
|
25,069
|
|
|||
Year-end 2011
|
52,698
|
|
|
3,508
|
|
|
56,206
|
|
|||
Changes resulting from:
|
|
|
|
|
|
||||||
Net change in sales prices and production costs
|
(5,709
|
)
|
|
(2,497
|
)
|
|
(8,206
|
)
|
|||
Net change in future development costs
|
(1,834
|
)
|
|
—
|
|
|
(1,834
|
)
|
|||
Sales of oil and gas, net of production costs
|
(31,732
|
)
|
|
(632
|
)
|
|
(32,364
|
)
|
|||
Net change due to extensions and discoveries
|
5,596
|
|
|
—
|
|
|
5,596
|
|
|||
Net change due to acquisition of reserves
|
86,013
|
|
|
—
|
|
|
86,013
|
|
|||
Net change due to revisions of quantity estimates
|
(2,254
|
)
|
|
18
|
|
|
(2,236
|
)
|
|||
Previously estimated development costs incurred
|
1,007
|
|
|
—
|
|
|
1,007
|
|
|||
Accretion of discount
|
7,377
|
|
|
401
|
|
|
7,778
|
|
|||
Net change in income taxes
|
(4,619
|
)
|
|
615
|
|
|
(4,004
|
)
|
|||
Aggregate change for the year
|
53,845
|
|
|
(2,095
|
)
|
|
51,750
|
|
|||
Year-end 2012
|
106,543
|
|
|
1,413
|
|
|
107,956
|
|
|||
Changes resulting from:
|
|
|
|
|
|
||||||
Net change in sales prices and production costs
|
23,422
|
|
|
415
|
|
|
23,837
|
|
|||
Net change in future development costs
|
(2,897
|
)
|
|
—
|
|
|
(2,897
|
)
|
|||
Sales of oil and gas, net of production costs
|
(56,559
|
)
|
|
(801
|
)
|
|
(57,360
|
)
|
|||
Net change due to extensions and discoveries
|
54,539
|
|
|
—
|
|
|
54,539
|
|
|||
Net change due to acquisition of reserves
|
1,160
|
|
|
—
|
|
|
1,160
|
|
|||
Net change due to revisions of quantity estimates
|
8,673
|
|
|
6
|
|
|
8,679
|
|
|||
Previously estimated development costs incurred
|
4,124
|
|
|
—
|
|
|
4,124
|
|
|||
Accretion of discount
|
13,540
|
|
|
228
|
|
|
13,768
|
|
|||
Net change in timing and other
|
(718
|
)
|
|
(31
|
)
|
|
(749
|
)
|
|||
Net change in income taxes
|
(16,274
|
)
|
|
70
|
|
|
(16,204
|
)
|
|||
Aggregate change for the year
|
29,010
|
|
|
(113
|
)
|
|
28,897
|
|
|||
Year-end 2013
|
$
|
135,553
|
|
|
$
|
1,300
|
|
|
$
|
136,853
|
|
|
For the Year
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(In thousands)
|
||||||||||
Consolidated entities
(a)
|
|
|
|
|
|
||||||
Revenues
|
$
|
69,036
|
|
|
$
|
36,204
|
|
|
$
|
19,239
|
|
Production costs
|
(12,477
|
)
|
|
(4,472
|
)
|
|
(1,492
|
)
|
|||
Exploration costs
|
(10,959
|
)
|
|
(1,754
|
)
|
|
(549
|
)
|
|||
Depreciation, depletion, amortization
|
(19,552
|
)
|
|
(4,905
|
)
|
|
(337
|
)
|
|||
Oil and gas administrative expenses
|
(14,407
|
)
|
|
(8,332
|
)
|
|
(4,445
|
)
|
|||
Accretion expense
|
(94
|
)
|
|
(26
|
)
|
|
—
|
|
|||
Income tax expenses
|
(3,471
|
)
|
|
(4,841
|
)
|
|
(3,645
|
)
|
|||
Results of operations
|
8,076
|
|
|
11,874
|
|
|
8,771
|
|
|||
Our share in ventures accounted for using the equity method:
|
|
|
|
|
|
||||||
Revenues
|
$
|
801
|
|
|
$
|
770
|
|
|
$
|
1,882
|
|
Production costs
|
(123
|
)
|
|
(138
|
)
|
|
(260
|
)
|
|||
Oil and gas administrative expenses
|
(86
|
)
|
|
(123
|
)
|
|
(228
|
)
|
|||
Income tax expenses
|
(178
|
)
|
|
(147
|
)
|
|
(400
|
)
|
|||
Results of operations
|
$
|
414
|
|
|
$
|
362
|
|
|
$
|
994
|
|
Total results of operations
|
$
|
8,490
|
|
|
$
|
12,236
|
|
|
$
|
9,765
|
|
(a)
|
2012 includes only three months of operations from Credo due to our third quarter 2012 acquisition.
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
|
(In thousands, except per share amounts)
|
||||||||||||||
2013
|
|
|
|
|
|
|
|
||||||||
Total revenues
|
$
|
97,471
|
|
|
$
|
60,079
|
|
|
$
|
75,107
|
|
|
$
|
98,388
|
|
Gross profit
|
35,899
|
|
|
22,463
|
|
|
32,608
|
|
|
39,181
|
|
||||
Operating income
|
9,520
|
|
|
3,554
|
|
|
10,612
|
|
|
22,891
|
|
||||
Equity in earnings of unconsolidated ventures
|
913
|
|
|
2,566
|
|
|
3,125
|
|
|
2,133
|
|
||||
Income before taxes
|
7,035
|
|
|
2,109
|
|
|
9,965
|
|
|
23,160
|
|
||||
Net income attributable to Forestar Group Inc.
|
3,951
|
|
|
541
|
|
|
11,830
|
|
|
12,999
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income per share — basic
|
$
|
0.11
|
|
|
$
|
0.02
|
|
|
$
|
0.33
|
|
|
$
|
0.34
|
|
Net income per share — diluted
|
$
|
0.11
|
|
|
$
|
0.02
|
|
|
$
|
0.33
|
|
|
$
|
0.33
|
|
|
|
|
|
|
|
|
|
||||||||
2012
|
|
|
|
|
|
|
|
||||||||
Total revenues
|
$
|
28,092
|
|
|
$
|
35,312
|
|
|
$
|
40,610
|
|
|
$
|
68,577
|
|
Gross profit
|
16,258
|
|
|
18,748
|
|
|
20,636
|
|
|
33,073
|
|
||||
Operating income
|
8,220
|
|
|
3,959
|
|
|
4,843
|
|
|
10,143
|
|
||||
Equity in earnings of unconsolidated ventures
|
724
|
|
|
768
|
|
|
680
|
|
|
12,297
|
|
||||
Income (loss) before taxes
|
5,117
|
|
|
2,203
|
|
|
(1,458
|
)
|
|
20,030
|
|
||||
Net income (loss) attributable to Forestar Group Inc.
|
2,802
|
|
|
811
|
|
|
(703
|
)
|
|
10,032
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per share — basic
|
$
|
0.08
|
|
|
$
|
0.02
|
|
|
$
|
(0.02
|
)
|
|
$
|
0.28
|
|
Net income (loss) per share — diluted
|
$
|
0.08
|
|
|
$
|
0.02
|
|
|
$
|
(0.02
|
)
|
|
$
|
0.28
|
|
|
|
|
Initial Cost to
Company
|
|
Costs Capitalized
Subsequent to Acquisition
|
|
Gross Amount Carried at End of Period
|
|
|
|
|
||||||||||||||||||||||
Description
|
Encumbrances
|
|
Land
|
|
Buildings &
Improvements
|
|
Improvements
less Cost of
Sales and Other
|
|
Carrying
Costs
(a)
|
|
Land & Land
Improvements
|
|
Buildings &
Improvements
|
|
Total
|
|
Accumulated
Depreciation
|
|
Date of
Construction
|
|
Date
Acquired
|
||||||||||||
Entitled, Developed, and Under Development Projects:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
CALIFORNIA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Contra Costa County
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
San Joaquin River
|
|
|
$
|
12,225
|
|
|
|
|
$
|
(3,310
|
)
|
|
|
|
$
|
8,915
|
|
|
|
|
$
|
8,915
|
|
|
|
|
|
|
(b)
|
||||
COLORADO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Douglas County
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Pinery West
|
|
|
7,308
|
|
|
|
|
3,218
|
|
|
|
|
10,526
|
|
|
|
|
10,526
|
|
|
|
|
2006
|
|
2006
|
||||||||
Weld County
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Buffalo Highlands
|
|
|
3,001
|
|
|
|
|
587
|
|
|
|
|
3,588
|
|
|
|
|
3,588
|
|
|
|
|
2006
|
|
2005
|
||||||||
Johnstown Farms
|
|
|
2,749
|
|
|
|
|
2,437
|
|
|
$
|
188
|
|
|
5,374
|
|
|
|
|
5,374
|
|
|
|
|
2002
|
|
2002
|
||||||
Stonebraker
|
|
|
3,878
|
|
|
|
|
(1,407
|
)
|
|
|
|
2,471
|
|
|
|
|
2,471
|
|
|
|
|
2005
|
|
2005
|
||||||||
FLORIDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Hillsborough County
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Bridle Path Estates
|
|
|
2,683
|
|
|
|
|
(2,683
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
|
|
2012
|
||||||||
GEORGIA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Bartow County
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Towne West
|
|
|
936
|
|
|
|
|
(936
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
|
|
(b)
|
||||||||
Euharlee North
|
|
|
269
|
|
|
|
|
138
|
|
|
|
|
407
|
|
|
|
|
407
|
|
|
|
|
|
|
(b)
|
||||||||
Parkside at Woodbury
|
|
|
134
|
|
|
|
|
374
|
|
|
|
|
508
|
|
|
|
|
508
|
|
|
|
|
|
|
(b)
|
||||||||
Coweta County
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cedar Creek Preserve
|
|
|
852
|
|
|
|
|
247
|
|
|
|
|
1,099
|
|
|
|
|
1,099
|
|
|
|
|
|
|
(b)
|
||||||||
Corinth Landing
|
|
|
607
|
|
|
|
|
585
|
|
|
|
|
1,192
|
|
|
|
|
1,192
|
|
|
|
|
|
|
(b)
|
||||||||
Coweta South Industrial Park
|
|
|
532
|
|
|
|
|
476
|
|
|
|
|
1,008
|
|
|
|
|
1,008
|
|
|
|
|
|
|
(b)
|
||||||||
Fox Hall
|
|
|
166
|
|
|
|
|
2,239
|
|
|
|
|
2,405
|
|
|
|
|
2,405
|
|
|
|
|
|
|
(b)
|
||||||||
Genesee
|
|
|
480
|
|
|
|
|
1,176
|
|
|
|
|
1,656
|
|
|
|
|
1,656
|
|
|
|
|
|
|
(b)
|
||||||||
Dawson County
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Woodlands at Burt Creek
|
|
|
71
|
|
|
|
|
1,670
|
|
|
|
|
1,741
|
|
|
|
|
1,741
|
|
|
|
|
|
|
(b)
|
||||||||
SOUTH CAROLINA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
York County
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Habersham
|
|
|
3,878
|
|
|
|
|
642
|
|
|
(239
|
)
|
|
4,281
|
|
|
|
|
4,281
|
|
|
|
|
|
|
2013
|
|||||||
TENNESEE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Williamson County
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Morgan Farms
|
|
|
6,841
|
|
|
|
|
2,223
|
|
|
166
|
|
|
9,230
|
|
|
|
|
9,230
|
|
|
|
|
|
|
2013
|
|||||||
TEXAS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Bastrop County
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Hunter’s Crossing
|
|
|
3,613
|
|
|
|
|
7,586
|
|
|
358
|
|
|
11,557
|
|
|
|
|
11,557
|
|
|
|
|
2001
|
|
2001
|
|||||||
The Colony
|
|
|
8,726
|
|
|
|
|
12,256
|
|
|
161
|
|
|
21,143
|
|
|
|
|
21,143
|
|
|
|
|
1999
|
|
1999
|
|||||||
Bexar County
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cibolo Canyons
|
|
|
25,569
|
|
|
|
|
50,839
|
|
|
1,549
|
|
|
77,957
|
|
|
|
|
77,957
|
|
|
|
|
2004
|
|
1986
|
|||||||
Calhoun County
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Caracol
|
$
|
5,072
|
|
|
8,603
|
|
|
|
|
3,438
|
|
|
2,047
|
|
|
14,088
|
|
|
|
|
14,088
|
|
|
|
|
2006
|
|
2006
|
|
|
|
Initial Cost to
Company
|
|
Costs Capitalized
Subsequent to Acquisition
|
|
Gross Amount Carried at End of Period
|
|
|
|
|
||||||||||||||||||||||||||||
Description
|
Encumbrances
|
|
Land
|
|
Buildings &
Improvements
|
|
Improvements
less Cost of
Sales and Other
|
|
Carrying
Costs
(a)
|
|
Land & Land
Improvements
|
|
Buildings &
Improvements
|
|
Total
|
|
Accumulated
Depreciation
|
|
Date of
Construction
|
|
Date
Acquired
|
||||||||||||||||||
Collin County
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Lakes of Prosper
|
|
|
$
|
8,951
|
|
|
|
|
$
|
137
|
|
|
$
|
180
|
|
|
$
|
9,268
|
|
|
|
|
$
|
9,268
|
|
|
|
|
|
|
2012
|
||||||||
Maxwell Creek
|
|
|
9,904
|
|
|
|
|
(5,889
|
)
|
|
635
|
|
|
4,650
|
|
|
|
|
4,650
|
|
|
|
|
2000
|
|
2000
|
|||||||||||||
Park Place
|
|
|
2,177
|
|
|
|
|
69
|
|
|
|
|
2,246
|
|
|
|
|
2,246
|
|
|
|
|
|
|
2013
|
||||||||||||||
Timber Creek
|
|
|
7,282
|
|
|
|
|
3,456
|
|
|
|
|
10,738
|
|
|
|
|
10,738
|
|
|
|
|
2007
|
|
2007
|
||||||||||||||
Village Park
|
|
|
6,550
|
|
|
|
|
(3,346
|
)
|
|
81
|
|
|
3,285
|
|
|
|
|
3,285
|
|
|
|
|
|
|
2012
|
|||||||||||||
Comal County
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Oak Creek Estates
|
|
|
1,921
|
|
|
|
|
2,728
|
|
|
175
|
|
|
4,824
|
|
|
|
|
4,824
|
|
|
|
|
2006
|
|
2005
|
|||||||||||||
Dallas County
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Stoney Creek
|
|
|
12,822
|
|
|
|
|
3,981
|
|
|
49
|
|
|
16,852
|
|
|
|
|
16,852
|
|
|
|
|
2007
|
|
2007
|
|||||||||||||
Denton County
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Lantana
|
$
|
3,458
|
|
|
31,451
|
|
|
|
|
(4,312
|
)
|
|
|
|
27,139
|
|
|
|
|
27,139
|
|
|
|
|
2000
|
|
1999
|
||||||||||||
The Preserve at Pecan Creek
|
|
|
5,855
|
|
|
|
|
(1,753
|
)
|
|
436
|
|
|
4,538
|
|
|
|
|
4,538
|
|
|
|
|
2006
|
|
2005
|
|||||||||||||
Fort Bend County
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Summer Lakes
|
1,748
|
|
|
4,269
|
|
|
|
|
261
|
|
|
|
|
4,530
|
|
|
|
|
4,530
|
|
|
|
|
|
|
2012
|
|||||||||||||
Summer Park
|
469
|
|
|
4,803
|
|
|
|
|
(153
|
)
|
|
|
|
4,650
|
|
|
|
|
4,650
|
|
|
|
|
|
|
2012
|
|||||||||||||
Willow Creek Farms
|
4,621
|
|
|
3,479
|
|
|
|
|
3,823
|
|
|
90
|
|
|
7,392
|
|
|
|
|
7,392
|
|
|
|
|
|
|
2012
|
||||||||||||
Harris County
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Barrington
|
|
|
8,950
|
|
|
|
|
(4,155
|
)
|
|
|
|
4,795
|
|
|
|
|
4,795
|
|
|
|
|
|
|
2011
|
||||||||||||||
City Park
|
1,130
|
|
|
3,946
|
|
|
|
|
619
|
|
|
1,641
|
|
|
6,206
|
|
|
|
|
6,206
|
|
|
|
|
2002
|
|
2001
|
||||||||||||
Hays County
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Arrowhead Ranch
|
|
|
12,856
|
|
|
|
|
2,228
|
|
|
|
|
15,084
|
|
|
|
|
15,084
|
|
|
|
|
|
|
2007
|
||||||||||||||
Hood County
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Harbor Lakes
|
|
|
3,514
|
|
|
|
|
(742
|
)
|
|
312
|
|
|
3,084
|
|
|
|
|
3,084
|
|
|
|
|
2000
|
|
1998
|
|||||||||||||
Nueces County
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Tortuga Dunes
|
|
|
12,080
|
|
|
|
|
9,441
|
|
|
|
|
21,521
|
|
|
|
|
21,521
|
|
|
|
|
|
|
2006
|
||||||||||||||
Tarrant County
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Summer Creek Ranch
|
|
|
2,887
|
|
|
|
|
(849
|
)
|
|
|
|
2,038
|
|
|
|
|
2,038
|
|
|
|
|
|
|
2012
|
||||||||||||||
The Bar C Ranch
|
|
|
1,365
|
|
|
|
|
210
|
|
|
|
|
1,575
|
|
|
|
|
1,575
|
|
|
|
|
|
|
2012
|
||||||||||||||
Williamson County
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Westside at Buttercup Creek
|
|
|
13,149
|
|
|
|
|
(12,257
|
)
|
|
488
|
|
|
1,380
|
|
|
|
|
1,380
|
|
|
|
|
1993
|
|
1993
|
|||||||||||||
Chandler Road Properties
|
|
|
3,552
|
|
|
|
|
(3,552
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
2004
|
|
2004
|
||||||||||||||
La Conterra
|
|
|
4,024
|
|
|
|
|
(659
|
)
|
|
293
|
|
|
3,658
|
|
|
|
|
3,658
|
|
|
|
|
|
|
2006
|
|||||||||||||
MISSOURI
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Clay County
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Somerbrook
|
|
|
3,061
|
|
|
|
|
(218
|
)
|
|
13
|
|
|
2,856
|
|
|
|
|
2,856
|
|
|
|
|
2003
|
|
2001
|
|||||||||||||
Other
|
|
|
25,081
|
|
|
|
|
(5,673
|
)
|
|
824
|
|
|
20,232
|
|
|
|
|
20,232
|
|
|
|
|
|
|
|
|||||||||||||
Total Entitled, Developed, and Under Development Projects
|
$
|
16,498
|
|
|
$
|
287,050
|
|
|
$
|
—
|
|
|
$
|
65,190
|
|
|
$
|
9,447
|
|
|
$
|
361,687
|
|
|
$
|
—
|
|
|
$
|
361,687
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
Initial Cost to
Company
|
|
Costs Capitalized
Subsequent to Acquisition
|
|
Gross Amount Carried at End of Period
|
|
|
|
|
||||||||||||||||||||||||||||
Description
|
Encumbrances
|
|
Land
|
|
Buildings &
Improvements
|
|
Improvements
less Cost of
Sales and Other
|
|
Carrying
Costs
(a)
|
|
Land & Land
Improvements
|
|
Buildings &
Improvements
|
|
Total
|
|
Accumulated
Depreciation
|
|
Date of
Construction
|
|
Date
Acquired
|
||||||||||||||||||
Undeveloped Land and land in entitlement:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
CALIFORNIA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Los Angeles County
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Land In Entitlement Process
|
|
|
$
|
3,969
|
|
|
|
|
$
|
16,530
|
|
|
|
|
$
|
20,499
|
|
|
|
|
$
|
20,499
|
|
|
|
|
|
|
1997
|
||||||||||
GEORGIA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Bartow County
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Undeveloped Land
|
|
|
3,863
|
|
|
|
|
60
|
|
|
|
|
3,923
|
|
|
|
|
3,923
|
|
|
|
|
|
|
|
||||||||||||||
Carroll County
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Undeveloped Land
|
|
|
5,984
|
|
|
|
|
116
|
|
|
|
|
6,100
|
|
|
|
|
6,100
|
|
|
|
|
|
|
|
||||||||||||||
Land In Entitlement Process
|
|
|
9,309
|
|
|
|
|
2,346
|
|
|
|
|
11,655
|
|
|
|
|
11,655
|
|
|
|
|
|
|
|
||||||||||||||
Cherokee County
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Undeveloped Land
|
|
|
3,382
|
|
|
|
|
94
|
|
|
|
|
3,476
|
|
|
|
|
3,476
|
|
|
|
|
|
|
|
||||||||||||||
Land In Entitlement Process
|
|
|
2,340
|
|
|
|
|
565
|
|
|
|
|
2,905
|
|
|
|
|
2,905
|
|
|
|
|
|
|
|
||||||||||||||
Coweta County
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Undeveloped Land
|
|
|
454
|
|
|
|
|
379
|
|
|
|
|
833
|
|
|
|
|
833
|
|
|
|
|
|
|
|
||||||||||||||
Land In Entitlement Process
|
|
|
2,128
|
|
|
|
|
412
|
|
|
|
|
2,540
|
|
|
|
|
2,540
|
|
|
|
|
|
|
|
||||||||||||||
Dawson County
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Undeveloped Land
|
|
|
2,248
|
|
|
|
|
1,497
|
|
|
|
|
3,745
|
|
|
|
|
3,745
|
|
|
|
|
|
|
|
||||||||||||||
Gilmer County
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Undeveloped Land
|
|
|
2,823
|
|
|
|
|
27
|
|
|
|
|
2,850
|
|
|
|
|
2,850
|
|
|
|
|
|
|
|
||||||||||||||
Lumpkin County
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Undeveloped Land
|
|
|
3,049
|
|
|
|
|
4
|
|
|
|
|
3,053
|
|
|
|
|
3,053
|
|
|
|
|
|
|
|
||||||||||||||
Paulding County
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Undeveloped Land
|
|
|
1,406
|
|
|
|
|
124
|
|
|
|
|
1,530
|
|
|
|
|
1,530
|
|
|
|
|
|
|
|
||||||||||||||
Pickens County
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Undeveloped Land
|
|
|
2,368
|
|
|
|
|
29
|
|
|
|
|
2,397
|
|
|
|
|
2,397
|
|
|
|
|
|
|
|
||||||||||||||
TEXAS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Bexar County
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Undeveloped Land
|
|
|
|
|
|
|
1,351
|
|
|
|
|
1,351
|
|
|
|
|
1,351
|
|
|
|
|
|
|
|
|||||||||||||||
Harris County
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Land in Entitlement Process
|
|
|
685
|
|
|
|
|
1,144
|
|
|
|
|
1,829
|
|
|
|
|
1,829
|
|
|
|
|
|
|
|
||||||||||||||
San Augustine County
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Undeveloped Land
|
|
|
1,495
|
|
|
|
|
|
|
|
|
1,495
|
|
|
|
|
1,495
|
|
|
|
|
|
|
|
|||||||||||||||
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Undeveloped Land
|
|
|
9,276
|
|
|
|
|
6,357
|
|
|
|
|
15,633
|
|
|
|
|
15,633
|
|
|
|
|
|
|
|
||||||||||||||
Land in Entitlement Process
|
|
|
2,334
|
|
|
|
|
(1,781
|
)
|
|
|
|
553
|
|
|
|
|
553
|
|
|
|
|
|
|
|
||||||||||||||
Total Undeveloped Land and land in entitlement
|
$
|
—
|
|
|
$
|
57,113
|
|
|
$
|
—
|
|
|
$
|
29,254
|
|
|
$
|
—
|
|
|
$
|
86,367
|
|
|
$
|
—
|
|
|
$
|
86,367
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
Initial Cost to
Company
|
|
Costs Capitalized
Subsequent to Acquisition
|
|
Gross Amount Carried at End of Period
|
|
|
|
|
||||||||||||||||||||||||||||
Description
|
Encumbrance
|
|
Land
|
|
Buildings &
Improvements
|
|
Improvements
less Cost of
Sales and
Other
|
|
Carrying
Costs
(a)
|
|
Land & Land
Improvements
|
|
Buildings &
Improvements
|
|
Total
|
|
Accumulated
Depreciation
|
|
Date of
Construction
|
|
Date
Acquired
|
||||||||||||||||||
Income Producing Properties:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
COLORADO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Jefferson County
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Littleton
|
|
|
$
|
12,553
|
|
|
|
|
$
|
1,719
|
|
|
|
|
$
|
14,272
|
|
|
|
|
$
|
14,272
|
|
|
|
|
|
|
2013
|
||||||||||
NORTH CAROLINA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Mechlanburg County
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
East Morehead
|
|
|
5,779
|
|
|
|
|
6,020
|
|
|
|
|
11,799
|
|
|
|
|
11,799
|
|
|
|
|
|
|
2012
|
||||||||||||||
TENNESSEE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Davidson County
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Westmont
|
|
|
11,547
|
|
|
|
|
925
|
|
|
|
|
12,472
|
|
|
|
|
12,472
|
|
|
|
|
|
|
2012
|
||||||||||||||
TEXAS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Dallas County
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Cedar Hill
|
|
|
2,266
|
|
|
|
|
5,594
|
|
|
|
|
7,860
|
|
|
|
|
7,860
|
|
|
|
|
|
|
2011
|
||||||||||||||
Travis County
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Radisson Hotel & Suites
|
$
|
15,400
|
|
|
|
|
$
|
10,603
|
|
|
40,390
|
|
|
|
|
—
|
|
|
$
|
50,993
|
|
|
50,993
|
|
|
$
|
(26,602
|
)
|
|
|
|
|
|||||||
Hood County
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Harbor Lakes Golf Club
|
|
|
|
|
1,446
|
|
|
634
|
|
|
|
|
|
|
2,080
|
|
|
2,080
|
|
|
(1,464
|
)
|
|
2000
|
|
1998
|
|||||||||||||
Total Income Producing Properties
|
$
|
15,400
|
|
|
$
|
32,145
|
|
|
$
|
12,049
|
|
|
$
|
55,282
|
|
|
$
|
—
|
|
|
$
|
46,403
|
|
|
$
|
53,073
|
|
|
$
|
99,476
|
|
|
$
|
(28,066
|
)
|
|
|
|
|
Total
|
$
|
31,898
|
|
|
$
|
376,308
|
|
|
$
|
12,049
|
|
|
$
|
149,726
|
|
|
$
|
9,447
|
|
|
$
|
494,457
|
|
|
$
|
53,073
|
|
|
$
|
547,530
|
|
|
$
|
(28,066
|
)
|
|
|
|
|
(a)
|
We do not capitalize carrying costs until development begins.
|
(b)
|
The acquisition date for this land is not available.
|
|
|
2013
|
|
2012
|
|
2011
|
||||||
|
|
(In thousands)
|
||||||||||
Balance at beginning of year
|
|
$
|
545,370
|
|
|
$
|
592,322
|
|
|
$
|
585,090
|
|
Amounts capitalized
|
|
111,428
|
|
|
143,711
|
|
|
66,338
|
|
|||
Amounts retired or adjusted
|
|
(109,268
|
)
|
|
(190,663
|
)
|
|
(59,106
|
)
|
|||
Balance at close of period
|
|
$
|
547,530
|
|
|
$
|
545,370
|
|
|
$
|
592,322
|
|
|
|
2013
|
|
2012
|
|
2011
|
||||||
|
|
(In thousands)
|
||||||||||
Balance at beginning of year
|
|
$
|
(28,220
|
)
|
|
$
|
(26,955
|
)
|
|
$
|
(23,438
|
)
|
Depreciation expense
|
|
(2,185
|
)
|
|
(3,640
|
)
|
|
(3,547
|
)
|
|||
Amounts retired or adjusted
|
|
2,339
|
|
|
2,375
|
|
|
30
|
|
|||
Balance at close of period
|
|
$
|
(28,066
|
)
|
|
$
|
(28,220
|
)
|
|
$
|
(26,955
|
)
|
Item 9.
|
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.
|
Item 9A.
|
Controls and Procedures.
|
Item 9B.
|
Other Information.
|
Item 10.
|
Directors, Executive Officers and Corporate Governance.
|
Name
|
|
Age
|
|
Year First
Elected to
the Board
|
|
Principal Occupation
|
Kenneth M. Jastrow, II
|
|
66
|
|
2007
|
|
Non-Executive Chairman of Forestar Group Inc.
|
Kathleen Brown
|
|
68
|
|
2007
|
|
Partner at Manatt, Phelps & Phillips, L.L.P.
|
William G. Currie
|
|
66
|
|
2007
|
|
Chairman of Universal Forest Products, Inc.
|
James M. DeCosmo
|
|
55
|
|
2007
|
|
President and Chief Executive Officer of Forestar Group Inc.
|
Michael E. Dougherty
|
|
73
|
|
2008
|
|
Founder and Chairman of Dougherty Financial Group LLC
|
James A. Johnson
|
|
70
|
|
2007
|
|
Chairman and Chief Executive Officer of Johnson Capital Partners
|
Charles W. Matthews
|
|
69
|
|
2012
|
|
Retired Vice President and General Counsel of Exxon Mobil Corporation
|
William C. Powers, Jr.
|
|
67
|
|
2007
|
|
President of The University of Texas at Austin
|
James A. Rubright
|
|
67
|
|
2007
|
|
Retired Chairman and Chief Executive Officer of Rock-Tenn Company
|
Richard M. Smith
|
|
68
|
|
2007
|
|
President of Pinkerton Foundation
|
Carl A. Thomason
|
|
61
|
|
2012
|
|
President of Great Northern Gathering and Marketing, LLC
|
Item 11.
|
Executive Compensation.
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
|
Plan Category
|
Number of Securities to be
Issued Upon Exercise of
Outstanding Options,
Warrants and Rights
(1)(2)
|
|
Weighted-Average
Exercise Price of
Outstanding Options,
Warrants and Rights
|
|
Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation Plans
(Excluding Securities
Reflected in Column (a))
|
||||
|
(a)
|
|
(b)
|
|
(c)
|
||||
Equity compensation plans approved by security holders
|
3,686,338
|
|
|
$
|
21.74
|
|
|
1,133,863
|
|
Equity compensation plans not approved by security holders
|
None
|
|
|
None
|
|
|
None
|
|
|
Total
|
3,686,338
|
|
|
$
|
21.74
|
|
|
1,133,863
|
|
(1)
|
Includes approximately 779,000 issuable to personnel of Temple-Inland and the other spin-off entity resulting from the equitable adjustment of Temple-Inland equity awards in connection with our spin-off.
|
(2)
|
Includes approximately 387,000 equity-settled restricted stock units, 416,000 market-leveraged stock units and 41,000 performance stock units, which are excluded from the calculation of weighted-average exercise price. The market-leveraged stock unit awards will be settled in common stock based upon our stock price performance over three years from the date of grant. The number of shares to be issued could range from a high of 624,000 shares if our stock price increases
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence.
|
Item 14.
|
Principal Accountant Fees and Services.
|
Item 15.
|
Exhibits and Financial Statement Schedules.
|
(a)
|
Documents filed as part of this report.
|
(1)
|
Financial Statements
|
(2)
|
Financial Statement Schedules
|
(3)
|
Exhibits
|
(b)
|
Exhibits
|
Exhibit
Number
|
|
Exhibit
|
2.1
|
|
Agreement and Plan of Merger, dated June 3, 2012, by and among CREDO Petroleum Corporation, Forestar Group Inc. and Longhorn Acquisition Inc. (incorporated by reference to Exhibit 2.1 of the Company’s Current Report on Form 8-K filed with the Commission on June 4, 2012).
|
3.1
|
|
Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the Commission on December 11, 2007).
|
3.2
|
|
Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 of the Company’s Current Report on Form 8-K filed with the Commission on December 11, 2007).
|
3.3
|
|
First Amendment to Amended and Restated Bylaws of Forestar Real Estate Group Inc. (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the Commission on February 19, 2008).
|
3.4
|
|
Certificate of Designation of Series A Junior Participating Preferred Stock (incorporated by reference to Exhibit 3.3 of the Company’s Current Report on Form 8-K filed with the Commission on December 11, 2007).
|
3.5
|
|
Second Amendment to Amended and Restated Bylaws of Forestar Real Estate Group Inc. (incorporated by reference to Exhibit 3.5 of the Company’s Annual Report on Form 10-K filed with the Commission on March 5, 2009).
|
3.6
|
|
Certificate of Ownership and Merger, dated November 21, 2008 (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the Commission on November 24, 2008).
|
3.7
|
|
Third Amendment to Amended and Restated Bylaws of Forestar Group Inc. (incorporated by reference to Exhibit 3.2 of the Company’s Current Report on Form 8-K filed with the Commission on November 24, 2008).
|
3.8
|
|
Fourth Amendment to the Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the Commission on November 26, 2012).
|
4.1
|
|
Specimen Certificate for shares of common stock, par value $1.00 per share, of Forestar Real Estate Group Inc. (incorporated by reference to Exhibit 4.1 of Amendment No. 5 to the Company’s Form 10 filed with the Commission on December 10, 2007).
|
4.2
|
|
Rights Agreement, dated December 11, 2007, between Forestar Real Estate Group Inc. and Computershare Trust Company, N.A., as Rights Agent (including Form of Rights Certificate) (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K filed with the Commission on December 11, 2007).
|
4.3
|
|
Indenture, dated February 26, 2013 (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K filed with the Commission on February 26, 2013).
|
4.4
|
|
Supplemental Indenture, dated February 26, 2013 (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K filed with the Commission on February 26, 2013).
|
4.5
|
|
Form of 3.75% Convertible Senior Note due 2020 (included in Exhibit 4.4 above) (incorporated by reference to Exhibit 4.3 of the Company’s Current Report on Form 8-K filed with the Commission on February 26, 2013).
|
4.6
|
|
Second Supplemental Indenture, dated November 27, 2013 (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K filed with the Commission on November 27, 2013).
|
4.7
|
|
Purchase Contract Agreement, dated November 27, 2013, between the Company and U.S. Bank National Association (incorporated by reference to Exhibit 4.3 of the Company’s Current Report on Form 8-K filed with the Commission on November 27, 2013).
|
4.8
|
|
Form of 6.00% Tangible Equity Unit (incorporated by reference to Exhibit 4.4 of the Company’s Current Report on Form 8-K filed with the Commission on November 27, 2013).
|
4.9
|
|
Form of Purchase Contract (incorporated by reference to Exhibit 4.5 of the Company’s Current Report on Form 8-K filed with the Commission on November 27, 2013).
|
4.10
|
|
Form of Amortizing Note (incorporated by reference to Exhibit 4.6 of the Company’s Current Report on Form 8-K filed with the Commission on November 27, 2013).
|
10.1
|
|
Employee Matters Agreement, dated December 11, 2007, among Forestar Real Estate Group Inc., Guaranty Financial Group Inc., and Temple — Inland Inc. (incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K filed with the Commission on December 11, 2007).
|
10.2†
|
|
Form of Forestar Real Estate Group Supplemental Employee Retirement Plan (incorporated by reference to Exhibit 10.5 of Amendment No. 5 to the Company’s Form 10 filed with the Commission on December 10, 2007).
|
10.3†
|
|
Amendment No. 1 to Forestar Group Inc. Supplemental Executive Retirement Plan (incorporated by reference to Exhibit 10.3 of the Company’s Annual Report on Form 10-K filed with the Commission on March 14, 2013).
|
10.4†
|
|
Form of Forestar Real Estate Group 2007 Stock Incentive Plan (incorporated by reference to Exhibit 10.6 of Amendment No. 5 to the Company’s Form 10 filed with the Commission on December 10, 2007).
|
10.5†*
|
|
Amended and Restated Forestar Group Inc. Directors' Fee Deferral Plan.
|
10.6†
|
|
Form of Indemnification Agreement to be entered into between the Company and each of its directors (incorporated by reference to Exhibit 10.9 of Amendment No. 5 to the Company’s Form 10 filed with the Commission on December 10, 2007).
|
10.7†
|
|
Form of Change in Control Agreement between the Company and its named executive officers (incorporated by reference to Exhibit 10.10 of Amendment No. 5 to the Company’s Form 10 filed with the Commission on December 10, 2007).
|
10.8†
|
|
Employment Agreement between the Company and James M. DeCosmo dated August 9, 2007 (incorporated by reference to Exhibit 10.11 of Amendment No. 5 to the Company’s Form 10 filed with the Commission on December 10, 2007).
|
10.9†
|
|
Form of Nonqualified Stock Option Agreement (incorporated by reference to Exhibit 10.12 of the Company’s Annual Report on Form 10-K filed with the Commission on March 5, 2009).
|
10.10†
|
|
Form of Restricted Stock Agreement (incorporated by reference to Exhibit 10.10 of the Company’s Annual Report on Form 10-K filed with the Commission on March 14, 2013).
|
10.11†
|
|
Form of Restricted Stock Units Agreement (incorporated by reference to Exhibit 10.11 of the Company’s Annual Report on Form 10-K filed with the Commission on March 14, 2013).
|
10.12†
|
|
Form of Stock Appreciation Rights Agreement (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the Commission on February 12, 2009).
|
10.13†
|
|
First Amendment to the Forestar Real Estate Group Inc. 2007 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the Commission on May 13, 2009).
|
10.14†
|
|
Second Amendment to the Forestar Group Inc. 2007 Stock Incentive Plan (incorporated by reference to Exhibit 10.22 to the Company’s Annual Report on Form 10-K filed with the Commission on March 3, 2010).
|
10.15†
|
|
First Amendment to Employment Agreement, dated as of November 10, 2010, by and between the Company and James M. DeCosmo (incorporated by reference to Exhibit 10.23 of the Company’s Annual Report on Form 10-K filed with the Commission on March 2, 2011).
|
10.16†
|
|
Form of Market-Leveraged Stock Unit Award Agreement (incorporated by reference to Exhibit 10.18 of the Company’s Annual Report on Form 10-K filed with the Commission on March 14, 2013).
|
10.17†
|
|
Form of Indemnification Agreement entered into between the Company and each of its executive officers (incorporated by reference to Exhibit 10.19 of the Company’s Annual Report on Form 10-K filed with the Commission on March 14, 2013).
|
10.18
|
|
Underwriting Agreement, dated as of February 20, 2013, by and between the Company and Goldman, Sachs & Co. (incorporated by reference to Exhibit 1.1 of the Company’s Current Report on Form 8-K filed with the Commission on February 26, 2013).
|
10.19
|
|
Second Amended and Restated Revolving and Term Credit Agreement dated September 14, 2012, by and among the Company; Forestar (USA) Real Estate Group Inc. and certain of its wholly-owned subsidiaries signatory thereto; KeyBank National Association, as lender, swing line lender and agent, the lenders party thereto; and the other parties thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on September 17, 2012).
|
10.20
|
|
Consulting Agreement, dated effective as of October 1, 2012, by and between Forestar (USA) Real Estate Group Inc. and Craig A. Knight (incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q filed with the Commission on November 9, 2012).
|
10.21
|
|
Guaranty Agreement dated June 28, 2012 by Forestar (USA) Real Estate Group. in favor of Wells Fargo Bank, National Association (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on June 29, 2012).
|
10.22
|
|
Voting Agreement, dated June 3, 2012, by and among Forestar Group Inc., James T. Huffman, RCH Energy Opportunity Fund III, LP and RCH Energy SSI Fund, LP (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on June 4, 2012).
|
10.23
|
|
Guaranty Agreement dated May 24, 2012 by Forestar (USA) Real Estate Group Inc. in favor of Wells Fargo Bank, National Association (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on May 29, 2012).
|
10.24
|
|
Underwriting Agreement, dated as of November 21, 2013, by and between the Company and Goldman, Sachs & Co. (incorporated by reference to Exhibit 1.1 of the Company’s Current Report on Form 8-K filed with the Commission on November 27, 2013).
|
10.25†*
|
|
Amendment No. 2 to Forestar Group Inc. Supplemental Executive Retirement Plan.
|
10.26
|
|
Agreement of Guaranty and Suretyship (Completion) dated January 17, 2014 by Forestar Group Inc. in favor of PNC Bank, National Association (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the Commission on January 17, 2014).
|
10.27
|
|
Agreement of Guaranty and Suretyship (Payment) dated January 17, 2014 by Forestar Group Inc. in favor of PNC Bank, National Association (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed with the Commission on January 17, 2014).
|
21.1*
|
|
List of Subsidiaries of the Company.
|
23.1*
|
|
Consent of Ernst & Young LLP.
|
23.2*
|
|
Consent of Netherland, Sewell & Associates, Inc.
|
31.1*
|
|
Certification of Chief Executive Officer pursuant to Exchange Act rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2*
|
|
Certification of Chief Financial Officer pursuant to Exchange Act rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1*
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2*
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
99.1*
|
|
Reserve report of Netherland, Sewell & Associates, Inc., dated February 6, 2014.
|
101.1*
|
|
The following materials from the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income and Comprehensive Income, (iii) Consolidated Statement of Equity (iv) Consolidated Statements of Cash Flows, and (v) Notes to Consolidated Financial Statements.
|
*
|
Filed herewith.
|
†
|
Management contract or compensatory plan or arrangement.
|
|
F
ORESTAR
G
ROUP
I
NC
.
|
|
|
|
|
|
By:
|
/s/ James M. DeCosmo
|
|
|
James M. DeCosmo
|
|
|
President and Chief Executive Officer
|
Signature
|
|
Capacity
|
|
Date
|
/s/ James M. DeCosmo
|
|
Director, President and Chief Executive Officer
(Principal Executive Officer)
|
|
March 11, 2014
|
James M. DeCosmo
|
|
|
||
|
|
|
||
/s/ Christopher L. Nines
|
|
Chief Financial Officer
(Principal Financial Officer)
|
|
March 11, 2014
|
Christopher L. Nines
|
|
|
||
|
|
|
||
/s/ Sabita C. Reddy
|
|
Vice President Accounting
(Principal Accounting Officer)
|
|
March 11, 2014
|
Sabita C. Reddy
|
|
|
||
|
|
|
||
/s/ Kenneth M. Jastrow, II
|
|
Non-Executive
Chairman of the Board
|
|
March 11, 2014
|
Kenneth M. Jastrow, II
|
|
|
||
|
|
|
||
/s/ Kathleen Brown
|
|
Director
|
|
March 11, 2014
|
Kathleen Brown
|
|
|
||
|
|
|
||
/s/ William G. Currie
|
|
Director
|
|
March 11, 2014
|
William G. Currie
|
|
|
||
|
|
|
||
/s/ Michael E. Dougherty
|
|
Director
|
|
March 11, 2014
|
Michael E. Dougherty
|
|
|
||
|
|
|
||
/s/ James A. Johnson
|
|
Director
|
|
March 11, 2014
|
James A. Johnson
|
|
|
||
|
|
|
||
/s/ Charles W. Matthews
|
|
Director
|
|
March 11, 2014
|
Charles W. Matthews
|
|
|
||
|
|
|
||
/s/ William C. Powers, Jr.
|
|
Director
|
|
March 11, 2014
|
William C. Powers, Jr.
|
|
|
||
|
|
|
||
/s/ James A. Rubright
|
|
Director
|
|
March 11, 2014
|
James A. Rubright
|
|
|
||
|
|
|
||
/s/ Richard M. Smith
|
|
Director
|
|
March 11, 2014
|
Richard M. Smith
|
|
|
||
|
|
|
||
/s/ Carl A. Thomason
|
|
Director
|
|
March 11, 2014
|
Carl A. Thomason
|
|
|
Legal Entity
|
|
Jurisdiction
|
|
% Ownership
|
Forestar (USA) Real Estate Group Inc.
|
|
Delaware
|
|
100%
|
242, LLC
|
|
Texas
|
|
50%
|
4S/RPG Land Company LP
|
|
Texas
|
|
55%
|
Arrowhead Ranch Utility Company LLC
|
|
Texas
|
|
100%
|
Bandera/Lantana, LP
|
|
Texas
|
|
55%
|
Bandera/Lantana II, LP
|
|
Texas
|
|
55%
|
Bellaire/Lantana, LP
|
|
Texas
|
|
55%
|
Bellaire/Lantana II LP
|
|
Texas
|
|
55%
|
Blackberry Island, LP
|
|
Texas
|
|
73%
|
Brazos/Lantana, LP
|
|
Texas
|
|
55%
|
Carlisle/Lantana III LP
|
|
Texas
|
|
55%
|
Chandler Road Properties, LP
|
|
Texas
|
|
100%
|
CL Ashton Woods, LP
|
|
Texas
|
|
80%
|
CL Realty, LLC
|
|
Delaware
|
|
1%
|
CL Chatham, LLC
|
|
Georgia
|
|
25%
|
CL/RPG Land Company, LP
|
|
Texas
|
|
55%
|
CL Texas I GP, L.L.C.
|
|
Georgia
|
|
100%
|
CL Waterford, LLC
|
|
Texas
|
|
100%
|
CL Westpark, LLC
|
|
Georgia
|
|
100%
|
CREA FMF Nashville LLC
|
|
Delaware
|
|
100%
|
Dalmac-Shelton Fannin Farms, Ltd.
|
|
Texas
|
|
49%
|
Dewberry Island LP
|
|
Texas
|
|
74%
|
Double Horn Water Supply Corporation, Inc.
|
|
Texas
|
|
100%
|
FirstLand Investment Corporation
|
|
Texas
|
|
100%
|
FMF Cedar Hill LLC
|
|
Delaware
|
|
100%
|
FMF Construction LLC
|
|
Delaware
|
|
100%
|
FMF Development LLC
|
|
Delaware
|
|
100%
|
FMF Littleton LLC
|
|
Delaware
|
|
100%
|
FMF Morehead LLC
|
|
Delaware
|
|
100%
|
FMF Peakview Manager LLC
|
|
Delaware
|
|
99%
|
FMF Peakview LLC
|
|
Delaware
|
|
20%
|
FMF Robertson Hill LLC
|
|
Delaware
|
|
100%
|
FMF Robertson Hill GP LLC
|
|
Delaware
|
|
100%
|
Forestar Capital Inc.
|
|
Delaware
|
|
100%
|
Forestar Hotel Holding Company Inc.
|
|
Nevada
|
|
100%
|
Capitol of Texas Insurance Group Inc.
|
|
Delaware
|
|
100%
|
Top of Westgate Corporation
|
|
Texas
|
|
100%
|
CCA Hospitality, Inc.
|
|
Texas
|
|
100%
|
Forestar Minerals GP LLC
|
|
Delaware
|
|
100%
|
Forestar Minerals Holdings LLC
|
|
Delaware
|
|
100%
|
Forestar Multifamily Fund GP LLC
|
|
Delaware
|
|
100%
|
Forestar Multifamily Fund LP
|
|
Delaware
|
|
100%
|
Forestar Oil & Gas LLC
|
|
Delaware
|
|
100%
|
Forestar Petroleum Corporation
|
|
Delaware
|
|
100%
|
SECO Energy Corporation
|
|
Nevada
|
|
100%
|
United Oil Corporation
|
|
Oklahoma
|
|
100%
|
CREDO Exploration Progam Ltd 1979
|
|
Colorado
|
|
59%
|
Fortuna Energy LLC
|
|
Colorado
|
|
75%
|
McKinley Resources LLC
|
|
Colorado
|
|
100%
|
Forestar Real Estate Group Inc.
|
|
Delaware
|
|
100%
|
Forestar Realty Inc.
|
|
Delaware
|
|
100%
|
New Georgian, LLC
|
|
Georgia
|
|
75%
|
TEMCO Associates, LLC
|
|
Georgia
|
|
1%
|
Bentwater Links, LLC
|
|
Georgia
|
|
100%
|
P12025, LLC
|
|
Georgia
|
|
100%
|
Seven Hills Homes, LLC
|
|
Georgia
|
|
100%
|
Legal Entity
|
|
Jurisdiction
|
|
% Ownership
|
FORCO Real Estate Inc.
|
|
Delaware
|
|
100%
|
CL Realty, LLC
|
|
Delaware
|
|
49%
|
TEMCO Associates, LLC
|
|
Georgia
|
|
49%
|
Forestar/MWC WCF LLC
|
|
Delaware
|
|
90%
|
Gaillardia/Lantana, LP
|
|
Texas
|
|
55%
|
GBF/LIC 288, Ltd.
|
|
Texas
|
|
74%
|
Gulf Coast-Stonehill, LLC
|
|
Delaware
|
|
80%
|
Harbor Lakes Golf Club LLC
|
|
Delaware
|
|
100%
|
Harbor Lakes Club Management LLC
|
|
Texas
|
|
100%
|
HM Pfluger, Ltd.
|
|
Texas
|
|
49%
|
HM Stonewall Estates, Ltd.
|
|
Texas
|
|
49%
|
Ironstob, LLC
|
|
Georgia
|
|
58%
|
Isabel/Lantana, LP
|
|
Texas
|
|
55%
|
Johnstown Farms, LLC
|
|
Delaware
|
|
100%
|
Juniper/Lantana, LP
|
|
Texas
|
|
55%
|
Kendall/Lantana, LP
|
|
Texas
|
|
55%
|
LIC Ventures Inc.
|
|
Delaware
|
|
100%
|
Hickory Hill Development, LP
|
|
Texas
|
|
50%
|
Rayzor Ranch, LP
|
|
Texas
|
|
25%
|
LM Land Holdings, LP
|
|
Texas
|
|
37%
|
LM Development, LP
|
|
Texas
|
|
99%
|
Madison/Lantana, LP
|
|
Texas
|
|
55%
|
Madison/Lantana II, LP
|
|
Texas
|
|
55%
|
Madison/Lantana III, LP
|
|
Texas
|
|
55%
|
Magnolia/Lantana IV, LP
|
|
Texas
|
|
55%
|
Magnolia/Lantana V, LP
|
|
Texas
|
|
55%
|
Magnolia/Lantana VI, LP
|
|
Texas
|
|
55%
|
Olympia Joint Venture (general partnership)
|
|
Texas
|
|
99%
|
Palmetto/Lantana, LP
|
|
Texas
|
|
55%
|
Preserve at Mustang Island LLC, (The)
|
|
Delaware
|
|
85%
|
Sabine Real Estate Company
|
|
Delaware
|
|
100%
|
San Jacinto I LLC
|
|
Texas
|
|
100%
|
Stoney Creek Properties LLC
|
|
Delaware
|
|
100%
|
Summer Creek Development LLC
|
|
Texas
|
|
100%
|
SWR Holdings LLC
|
|
Delaware
|
|
100%
|
Sustainable Water Resources LLC
|
|
Texas
|
|
100%
|
Timber Creek Properties LLC
|
|
Delaware
|
|
88%
|
/s/ Ernst & Young LLP
|
|
|
Austin, Texas
|
March 11, 2014
|
By:
|
/s/ G. Lance Binder
|
|
|
|
|
|
G. Lance Binder, P.E.
|
|
|
Executive Vice President
|
1.
|
I have reviewed this Annual Report on Form 10-K of Forestar Group Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ James M. DeCosmo
|
|
James M. DeCosmo
|
|
Chief Executive Officer
|
1.
|
I have reviewed this Annual Report on Form 10-K of Forestar Group Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ Christopher L. Nines
|
|
Christopher L. Nines
|
|
Chief Financial Officer
|
/s/ James M. DeCosmo
|
|
James M. DeCosmo
|
|
/s/ Christopher L. Nines
|
|
Christopher L. Nines
|
|
|
|
Net Reserves
|
|
Future Net Revenue (M$)
|
||||||
|
|
Oil
|
|
NGL
|
|
Gas
|
|
|
|
Present Worth
|
Property Group/Category
|
|
(MBBL)
|
|
(MBBL)
|
|
(MMCF)
|
|
Total
|
|
at 10%
|
|
|
|
|
|
|
|
|
|
|
|
Equity Accounting Group
|
|
|
|
|
|
|
|
|
|
|
Proved Developed Producing
|
|
0.0
|
|
0.0
|
|
2,332.3
|
|
4,253.3
|
|
2,096.5
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Accounting Group
|
|
|
|
|
|
|
|
|
|
|
Proved Developed Producing
|
|
2,963.9
|
|
260.7
|
|
10,918.4
|
|
218,349.2
|
|
138,399.5
|
Proved Developed Non-Producing
|
|
636.5
|
|
32.2
|
|
465.9
|
|
35,626.4
|
|
22,244.0
|
Proved Undeveloped
|
|
1,793.9
|
|
137.1
|
|
2,245.2
|
|
58,321.0
|
|
20,036.2
|
Total Proved
|
|
5,394.4
|
|
430.1
|
|
13,629.5
|
|
312,296.6
|
|
180,679.7
|
|
|
|
|
|
|
|
|
|
|
|
All Properties
|
|
|
|
|
|
|
|
|
|
|
Proved Developed Producing
|
|
2,963.9
|
|
260.7
|
|
13,250.7
|
|
222,602.5
|
|
140,496.0
|
Proved Developed Non-Producing
|
|
636.5
|
|
32.2
|
|
465.9
|
|
35,626.4
|
|
22,244.0
|
Proved Undeveloped
|
|
1,793.9
|
|
137.1
|
|
2,245.2
|
|
58,321.0
|
|
20,036.2
|
Total Proved
|
|
5,394.4
|
|
430.1
|
|
15,961.8
|
|
316,549.9
|
|
182,776.2
|
(i)
|
Same geological formation (but not necessarily in pressure communication with the reservoir of interest);
|
(ii)
|
Same environment of deposition;
|
(iii)
|
Similar geological structure; and
|
(iv)
|
Same drive mechanism.
|
(i)
|
Through existing wells with existing equipment and operating methods or in which the cost of the required equipment is relatively minor compared to the cost of a new well; and
|
(ii)
|
Through installed extraction equipment and infrastructure operational at the time of the reserves estimate if the extraction is by means not involving a well.
|
(i)
|
Gain access to and prepare well locations for drilling, including surveying well locations for the purpose of determining specific development drilling sites, clearing ground, draining, road building, and relocating public roads, gas lines, and power lines, to the extent necessary in developing the proved reserves.
|
(ii)
|
Drill and equip development wells, development-type stratigraphic test wells, and service wells, including the costs of platforms and of well equipment such as casing, tubing, pumping equipment, and the wellhead assembly.
|
(iii)
|
Acquire, construct, and install production facilities such as lease flow lines, separators, treaters, heaters, manifolds, measuring devices, and production storage tanks, natural gas cycling and processing plants, and central utility and waste disposal systems.
|
(iv)
|
Provide improved recovery systems.
|
(i)
|
Costs of topographical, geographical and geophysical studies, rights of access to properties to conduct those studies, and salaries and other expenses of geologists, geophysical crews, and others conducting those studies. Collectively, these are sometimes referred to as geological and geophysical or "G&G" costs.
|
(ii)
|
Costs of carrying and retaining undeveloped properties, such as delay rentals, ad valorem taxes on properties, legal costs for title defense, and the maintenance of land and lease records.
|
(iii)
|
Dry hole contributions and bottom hole contributions.
|
(iv)
|
Costs of drilling and equipping exploratory wells.
|
(v)
|
Costs of drilling exploratory-type stratigraphic test wells.
|
(i)
|
Oil and gas producing activities include:
|
(A)
|
The search for crude oil, including condensate and natural gas liquids, or natural gas ("oil and gas") in their natural states and original locations;
|
(B)
|
The acquisition of property rights or properties for the purpose of further exploration or for the purpose of removing the oil or gas from such properties;
|
(C)
|
The construction, drilling, and production activities necessary to retrieve oil and gas from their natural reservoirs, including the acquisition, construction, installation, and maintenance of field gathering and storage systems, such as:
|
(1)
|
Lifting the oil and gas to the surface; and
|
(2)
|
Gathering, treating, and field processing (as in the case of processing gas to extract liquid hydrocarbons); and
|
(D)
|
Extraction of saleable hydrocarbons, in the solid, liquid, or gaseous state, from oil sands, shale, coalbeds, or other nonrenewable natural resources which are intended to be upgraded into synthetic oil or gas, and activities undertaken with a view to such extraction.
|
a.
|
The first point at which oil, gas, or gas liquids, natural or synthetic, are delivered to a main pipeline, a common carrier, a refinery, or a marine terminal; and
|
b.
|
In the case of natural resources that are intended to be upgraded into synthetic oil or gas, if those natural resources are delivered to a purchaser prior to upgrading, the first point at which the natural resources are delivered to a main pipeline, a common carrier, a refinery, a marine terminal, or a facility which upgrades such natural resources into synthetic oil or gas.
|
(ii)
|
Oil and gas producing activities do not include:
|
(A)
|
Transporting, refining, or marketing oil and gas;
|
(B)
|
Processing of produced oil, gas, or natural resources that can be upgraded into synthetic oil or gas by a registrant that does not have the legal right to produce or a revenue interest in such production;
|
(C)
|
Activities relating to the production of natural resources other than oil, gas, or natural resources from which synthetic oil and gas can be extracted; or
|
(D)
|
Production of geothermal steam.
|
(i)
|
When deterministic methods are used, the total quantities ultimately recovered from a project have a low probability of exceeding proved plus probable plus possible reserves. When probabilistic methods are used, there should be at least a 10% probability that the total quantities ultimately recovered will equal or exceed the proved plus probable plus possible reserves estimates.
|
(ii)
|
Possible reserves may be assigned to areas of a reservoir adjacent to probable reserves where data control and interpretations of available data are progressively less certain. Frequently, this will be in areas where geoscience and engineering data are unable to define clearly the area and vertical limits of commercial production from the reservoir by a defined project.
|
(iii)
|
Possible reserves also include incremental quantities associated with a greater percentage recovery of the hydrocarbons in place than the recovery quantities assumed for probable reserves.
|
(iv)
|
The proved plus probable and proved plus probable plus possible reserves estimates must be based on reasonable alternative technical and commercial interpretations within the reservoir or subject project that are clearly documented, including comparisons to results in successful similar projects.
|
(v)
|
Possible reserves may be assigned where geoscience and engineering data identify directly adjacent portions of a reservoir within the same accumulation that may be separated from proved areas by faults with displacement less than formation thickness or other geological discontinuities and that have not been penetrated by a wellbore, and the registrant believes that such adjacent portions are in communication with the known (proved) reservoir. Possible reserves may be assigned to areas that are structurally higher or lower than the proved area if these areas are in communication with the proved reservoir.
|
(vi)
|
Pursuant to paragraph (a)(22)(iii) of this section, where direct observation has defined a highest known oil (HKO) elevation and the potential exists for an associated gas cap, proved oil reserves should be assigned in the structurally higher portions of the reservoir above the HKO only if the higher contact can be established with reasonable certainty through reliable technology. Portions of the reservoir that do not meet this reasonable certainty criterion may be assigned as probable and possible oil or gas based on reservoir fluid properties and pressure gradient interpretations.
|
(i)
|
When deterministic methods are used, it is as likely as not that actual remaining quantities recovered will exceed the sum of estimated proved plus probable reserves. When probabilistic methods are used, there should be at least a 50% probability that the actual quantities recovered will equal or exceed the proved plus probable reserves estimates.
|
(ii)
|
Probable reserves may be assigned to areas of a reservoir adjacent to proved reserves where data control or interpretations of available data are less certain, even if the interpreted reservoir continuity of structure or productivity does not meet the reasonable certainty criterion. Probable reserves may be assigned to areas that are structurally higher than the proved area if these areas are in communication with the proved reservoir.
|
(iii)
|
Probable reserves estimates also include potential incremental quantities associated with a greater percentage recovery of the hydrocarbons in place than assumed for proved reserves.
|
(iv)
|
See also guidelines in paragraphs (a)(17)(iv) and (a)(17)(vi) of this section.
|
(i)
|
Costs incurred to operate and maintain wells and related equipment and facilities, including depreciation and applicable operating costs of support equipment and facilities and other costs of operating and maintaining those wells and related equipment and facilities. They become part of the cost of oil and gas produced. Examples of production costs (sometimes called lifting costs) are:
|
(A)
|
Costs of labor to operate the wells and related equipment and facilities.
|
(B)
|
Repairs and maintenance.
|
(C)
|
Materials, supplies, and fuel consumed and supplies utilized in operating the wells and related equipment and facilities.
|
(D)
|
Property taxes and insurance applicable to proved properties and wells and related equipment and facilities.
|
(E)
|
Severance taxes.
|
(ii)
|
Some support equipment or facilities may serve two or more oil and gas producing activities and may also serve transportation, refining, and marketing activities. To the extent that the support equipment and facilities are used in oil and gas producing activities, their depreciation and applicable operating costs become exploration, development or production costs, as appropriate. Depreciation, depletion, and amortization of capitalized acquisition, exploration, and development costs are not production costs but also become part of the cost of oil and gas produced along with production (lifting) costs identified above.
|
(i)
|
The area of the reservoir considered as proved includes:
|
(A)
|
The area identified by drilling and limited by fluid contacts, if any, and
|
(B)
|
Adjacent undrilled portions of the reservoir that can, with reasonable certainty, be judged to be continuous with it and to contain economically producible oil or gas on the basis of available geoscience and engineering data.
|
(ii)
|
In the absence of data on fluid contacts, proved quantities in a reservoir are limited by the lowest known hydrocarbons (LKH) as seen in a well penetration unless geoscience, engineering, or performance data and reliable technology establishes a lower contact with reasonable certainty.
|
(iii)
|
Where direct observation from well penetrations has defined a highest known oil (HKO) elevation and the potential exists for an associated gas cap, proved oil reserves may be assigned in the structurally higher portions of the reservoir only if geoscience, engineering, or performance data and reliable technology establish the higher contact with reasonable certainty.
|
(iv)
|
Reserves which can be produced economically through application of improved recovery techniques (including, but not limited to, fluid injection) are included in the proved classification when:
|
(A)
|
Successful testing by a pilot project in an area of the reservoir with properties no more favorable than in the reservoir as a whole, the operation of an installed program in the reservoir or an analogous reservoir, or other evidence using reliable technology establishes the reasonable certainty of the engineering analysis on which the project or program was based; and
|
(B)
|
The project has been approved for development by all necessary parties and entities, including governmental entities.
|
(v)
|
Existing economic conditions include prices and costs at which economic producibility from a reservoir is to be determined. The price shall be the average price during the 12-month period prior to the ending date of the period covered by the report, determined as an unweighted arithmetic average of the first-day-of-the-month price for each month within such period, unless prices are defined by contractual arrangements, excluding escalations based upon future conditions.
|
(i)
|
Reserves on undrilled acreage shall be limited to those directly offsetting development spacing areas that are reasonably certain of production when drilled, unless evidence using reliable technology exists that establishes reasonable certainty of economic producibility at greater distances.
|
(ii)
|
Undrilled locations can be classified as having undeveloped reserves only if a development plan has been adopted indicating that they are scheduled to be drilled within five years, unless the specific circumstances, justify a longer time.
|
(iii)
|
Under no circumstances shall estimates for undeveloped reserves be attributable to any acreage for which an application of fluid injection or other improved recovery technique is contemplated, unless such techniques have been proved effective by actual projects in the same reservoir or an analogous reservoir, as defined in paragraph (a)(2) of this section, or by other evidence using reliable technology establishing reasonable certainty.
|