|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
26-1336998
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
|
(I.R.S. Employer
Identification No.)
|
Large accelerated filer
x
|
|
Accelerated filer
¨
|
|
Non-accelerated filer
¨
(Do not check if a
smaller reporting company)
|
|
Smaller reporting company
¨
|
|
Emerging growth company
¨
|
Title of Each Class
|
|
Number of Shares Outstanding as of August 3, 2018
|
Common Stock, par value $1.00 per share
|
|
41,938,936
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(In thousands, except per share amounts)
|
||||||||||||||
REVENUES
|
|
|
|
|
|
|
|
||||||||
Real estate
|
$
|
23,565
|
|
|
$
|
27,992
|
|
|
$
|
46,140
|
|
|
$
|
48,744
|
|
Other
|
—
|
|
|
23
|
|
|
24
|
|
|
1,576
|
|
||||
|
23,565
|
|
|
28,015
|
|
|
46,164
|
|
|
50,320
|
|
||||
COSTS AND EXPENSES
|
|
|
|
|
|
|
|
||||||||
Cost of real estate
|
(9,950
|
)
|
|
(16,918
|
)
|
|
(25,525
|
)
|
|
(28,814
|
)
|
||||
Cost of other
|
(34
|
)
|
|
(108
|
)
|
|
(570
|
)
|
|
(38,724
|
)
|
||||
Other operating expenses
|
(2,968
|
)
|
|
(5,158
|
)
|
|
(4,856
|
)
|
|
(10,240
|
)
|
||||
General and administrative
|
(3,518
|
)
|
|
(28,372
|
)
|
|
(7,263
|
)
|
|
(33,063
|
)
|
||||
|
(16,470
|
)
|
|
(50,556
|
)
|
|
(38,214
|
)
|
|
(110,841
|
)
|
||||
GAIN ON SALE OF ASSETS
|
1,318
|
|
|
29,506
|
|
|
4,064
|
|
|
103,721
|
|
||||
OPERATING INCOME
|
8,413
|
|
|
6,965
|
|
|
12,014
|
|
|
43,200
|
|
||||
Equity in earnings of unconsolidated ventures
|
1,000
|
|
|
2,747
|
|
|
2,529
|
|
|
9,109
|
|
||||
Interest expense
|
(1,605
|
)
|
|
(2,166
|
)
|
|
(3,741
|
)
|
|
(4,401
|
)
|
||||
Interest and other income
|
2,627
|
|
|
622
|
|
|
4,279
|
|
|
1,298
|
|
||||
INCOME FROM CONTINUING OPERATIONS BEFORE TAXES
|
10,435
|
|
|
8,168
|
|
|
15,081
|
|
|
49,206
|
|
||||
Income tax expense
|
(149
|
)
|
|
(11,928
|
)
|
|
(215
|
)
|
|
(28,139
|
)
|
||||
NET INCOME (LOSS) FROM CONTINUING OPERATIONS
|
10,286
|
|
|
(3,760
|
)
|
|
14,866
|
|
|
21,067
|
|
||||
INCOME FROM DISCONTINUED OPERATIONS, NET OF TAXES
|
—
|
|
|
1,229
|
|
|
—
|
|
|
1,647
|
|
||||
CONSOLIDATED NET INCOME (LOSS)
|
10,286
|
|
|
(2,531
|
)
|
|
14,866
|
|
|
22,714
|
|
||||
Less: Net income attributable to noncontrolling interests
|
(865
|
)
|
|
(48
|
)
|
|
(911
|
)
|
|
(88
|
)
|
||||
NET INCOME (LOSS) ATTRIBUTABLE TO FORESTAR GROUP INC.
|
$
|
9,421
|
|
|
$
|
(2,579
|
)
|
|
$
|
13,955
|
|
|
$
|
22,626
|
|
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
|
|
|
|
|
|
|
|
||||||||
Basic
|
41,939
|
|
|
42,259
|
|
|
41,939
|
|
|
42,171
|
|
||||
Diluted
|
41,966
|
|
|
42,259
|
|
|
41,966
|
|
|
42,454
|
|
||||
NET INCOME (LOSS) PER BASIC SHARE
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.22
|
|
|
$
|
(0.09
|
)
|
|
$
|
0.33
|
|
|
$
|
0.50
|
|
Discontinued operations
|
$
|
—
|
|
|
$
|
0.03
|
|
|
$
|
—
|
|
|
$
|
0.04
|
|
NET INCOME (LOSS) PER BASIC SHARE
|
$
|
0.22
|
|
|
$
|
(0.06
|
)
|
|
$
|
0.33
|
|
|
$
|
0.54
|
|
NET INCOME (LOSS) PER DILUTED SHARE
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.22
|
|
|
$
|
(0.09
|
)
|
|
$
|
0.33
|
|
|
$
|
0.49
|
|
Discontinued operations
|
$
|
—
|
|
|
$
|
0.03
|
|
|
$
|
—
|
|
|
$
|
0.04
|
|
NET INCOME (LOSS) PER DILUTED SHARE
|
$
|
0.22
|
|
|
$
|
(0.06
|
)
|
|
$
|
0.33
|
|
|
$
|
0.53
|
|
|
Six Months Ended June 30,
|
||||||
|
2018
|
|
2017
|
||||
|
(In thousands)
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
||||
Consolidated net income
|
$
|
14,866
|
|
|
$
|
22,714
|
|
Adjustments:
|
|
|
|
||||
Depreciation and amortization
|
2,574
|
|
|
2,862
|
|
||
Change in deferred income taxes
|
717
|
|
|
45
|
|
||
Equity in earnings of unconsolidated ventures
|
(2,529
|
)
|
|
(9,109
|
)
|
||
Distributions of earnings of unconsolidated ventures
|
38
|
|
|
12,036
|
|
||
Share-based compensation
|
206
|
|
|
2,259
|
|
||
Real estate cost of sales
|
26,118
|
|
|
28,438
|
|
||
Real estate development and acquisition expenditures, net
|
(260,822
|
)
|
|
(25,623
|
)
|
||
Reimbursements from utility and improvement districts
|
2,212
|
|
|
4,671
|
|
||
Asset impairments
|
—
|
|
|
37,900
|
|
||
Gain on sale of assets
|
(4,064
|
)
|
|
(103,821
|
)
|
||
Other
|
1,173
|
|
|
2,135
|
|
||
Changes in:
|
|
|
|
||||
Notes and accounts receivable
|
2,744
|
|
|
912
|
|
||
Prepaid expenses, land purchase contract deposits and other
|
(4,202
|
)
|
|
(267
|
)
|
||
Accounts payable and other accrued liabilities
|
9,308
|
|
|
(8,175
|
)
|
||
Earnest money deposits on sales contracts
|
29,683
|
|
|
2,040
|
|
||
Income taxes
|
(233
|
)
|
|
19,626
|
|
||
Net cash used in operating activities
|
(182,211
|
)
|
|
(11,357
|
)
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
||||
Property, equipment, software and other
|
(48
|
)
|
|
(41
|
)
|
||
Oil and gas properties and equipment
|
—
|
|
|
(2,400
|
)
|
||
Investment in unconsolidated ventures
|
—
|
|
|
(3,617
|
)
|
||
Proceeds from sales of assets
|
228,555
|
|
|
130,011
|
|
||
Return of investment in unconsolidated ventures
|
468
|
|
|
2,906
|
|
||
Net cash provided by investing activities
|
228,975
|
|
|
126,859
|
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
||||
Payments of debt
|
(541
|
)
|
|
—
|
|
||
Additions to debt
|
250
|
|
|
770
|
|
||
Deferred financing fees
|
—
|
|
|
(148
|
)
|
||
Change in restricted cash
|
17
|
|
|
—
|
|
||
Distributions to noncontrolling interests, net
|
(517
|
)
|
|
(100
|
)
|
||
Exercise of stock options
|
—
|
|
|
548
|
|
||
Payroll taxes on restricted stock and stock options
|
—
|
|
|
(980
|
)
|
||
Net cash (used in) provided by financing activities
|
(791
|
)
|
|
90
|
|
||
|
|
|
|
||||
Net increase in cash and cash equivalents
|
45,973
|
|
|
115,592
|
|
||
Cash and cash equivalents at beginning of period
|
321,783
|
|
|
265,798
|
|
||
Cash and cash equivalents at end of period
|
$
|
367,756
|
|
|
$
|
381,390
|
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
|
(In thousands)
|
||||||
Real estate
|
$
|
389,936
|
|
|
$
|
386,222
|
|
Other
|
3,318
|
|
|
3,346
|
|
||
Assets not allocated to segments
(a)
|
417,605
|
|
|
372,344
|
|
||
|
$
|
810,859
|
|
|
$
|
761,912
|
|
(a)
|
Assets not allocated to segments at
June 30, 2018
principally consist of cash and cash equivalents of
$367,756,000
and restricted cash of
$40,000,000
. Assets not allocated to segments at
December 31, 2017
principally consist of cash and cash equivalents of
$321,783,000
and restricted cash of
$40,017,000
.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(In thousands)
|
||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Real estate
|
$
|
23,565
|
|
|
$
|
27,992
|
|
|
$
|
46,140
|
|
|
$
|
48,744
|
|
Other
|
—
|
|
|
23
|
|
|
24
|
|
|
1,576
|
|
||||
Total revenues
|
$
|
23,565
|
|
|
$
|
28,015
|
|
|
$
|
46,164
|
|
|
$
|
50,320
|
|
Segment earnings (loss):
|
|
|
|
|
|
|
|
||||||||
Real estate
|
$
|
13,254
|
|
|
$
|
11,545
|
|
|
$
|
22,957
|
|
|
$
|
22,018
|
|
Other
|
(140
|
)
|
|
(652
|
)
|
|
(693
|
)
|
|
36,777
|
|
||||
Total segment earnings
|
13,114
|
|
|
10,893
|
|
|
22,264
|
|
|
58,795
|
|
||||
Items not allocated to segments
|
(3,544
|
)
|
|
(2,773
|
)
|
|
(8,094
|
)
|
|
(9,677
|
)
|
||||
Income from continuing operations before taxes attributable to Forestar Group Inc.
|
$
|
9,570
|
|
|
$
|
8,120
|
|
|
$
|
14,170
|
|
|
$
|
49,118
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(In thousands)
|
||||||||||||||
General and administrative expense
|
$
|
(3,389
|
)
|
|
$
|
(27,549
|
)
|
|
$
|
(7,042
|
)
|
|
$
|
(31,577
|
)
|
Share-based and long-term incentive compensation expense
|
(177
|
)
|
|
(1,448
|
)
|
|
(313
|
)
|
|
(2,343
|
)
|
||||
Gain on sale of timberland assets
|
—
|
|
|
28,049
|
|
|
—
|
|
|
28,049
|
|
||||
Interest expense
|
(1,605
|
)
|
|
(2,166
|
)
|
|
(3,741
|
)
|
|
(4,401
|
)
|
||||
Other corporate interest and other income
|
1,627
|
|
|
341
|
|
|
3,002
|
|
|
595
|
|
||||
|
$
|
(3,544
|
)
|
|
$
|
(2,773
|
)
|
|
$
|
(8,094
|
)
|
|
$
|
(9,677
|
)
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
|
(In thousands)
|
||||||
Assets Held for Sale:
|
|
|
|
||||
Real estate
|
$
|
—
|
|
|
$
|
180,247
|
|
Property and equipment, net
|
1,360
|
|
|
1,360
|
|
||
|
$
|
1,360
|
|
|
$
|
181,607
|
|
|
|
|
|
||||
Liabilities Held for Sale:
|
|
|
|
||||
Accounts payable
|
$
|
—
|
|
|
$
|
1,017
|
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
|
(In thousands)
|
||||||
Entitled, developed and under development projects
|
$
|
357,882
|
|
|
$
|
127,442
|
|
Other
|
2,993
|
|
|
2,938
|
|
||
|
$
|
360,875
|
|
|
$
|
130,380
|
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
|
(In thousands)
|
||||||
Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
5,854
|
|
|
$
|
13,119
|
|
Real estate
|
87,972
|
|
|
168,914
|
|
||
Other assets
|
982
|
|
|
21,721
|
|
||
Total assets
|
$
|
94,808
|
|
|
$
|
203,754
|
|
Liabilities and Equity:
|
|
|
|
||||
Accounts payable and other liabilities
|
$
|
1,979
|
|
|
$
|
13,101
|
|
Debt
(a)
|
45,639
|
|
|
85,133
|
|
||
Equity
|
47,190
|
|
|
105,520
|
|
||
Total liabilities and equity
|
$
|
94,808
|
|
|
$
|
203,754
|
|
|
|
|
|
||||
Forestar's investment in unconsolidated ventures
|
$
|
17,965
|
|
|
$
|
64,579
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(In thousands)
|
||||||||||||||
Revenues
|
$
|
2,845
|
|
|
$
|
23,114
|
|
|
$
|
6,226
|
|
|
$
|
45,750
|
|
Earnings
|
$
|
2,661
|
|
|
$
|
6,327
|
|
|
$
|
6,941
|
|
|
$
|
18,548
|
|
Forestar's equity in earnings of unconsolidated ventures
|
$
|
1,000
|
|
|
$
|
2,747
|
|
|
$
|
2,529
|
|
|
$
|
9,109
|
|
(a)
|
As of
June 30, 2018
and
December 31, 2017
, total unconsolidated venture debt outstanding includes
$4,564,000
and
$4,584,000
which is recourse to us.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(In thousands)
|
||||||||||||||
Revenues
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
13
|
|
Cost of oil and gas producing activities
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(10
|
)
|
||||
Other operating expenses
|
—
|
|
|
1,043
|
|
|
—
|
|
|
989
|
|
||||
Income from discontinued operations before income taxes
|
$
|
—
|
|
|
$
|
1,043
|
|
|
$
|
—
|
|
|
$
|
992
|
|
Gain on sale of assets before income taxes
|
—
|
|
|
100
|
|
|
—
|
|
|
100
|
|
||||
Income tax benefit
|
—
|
|
|
86
|
|
|
—
|
|
|
555
|
|
||||
Income from discontinued operations, net of taxes
|
$
|
—
|
|
|
$
|
1,229
|
|
|
$
|
—
|
|
|
$
|
1,647
|
|
|
Six Months Ended June 30,
|
||||||
|
2018
|
|
2017
|
||||
|
(In thousands)
|
||||||
Operating activities:
|
|
|
|
||||
Accounts payable and other accrued liabilities
|
$
|
—
|
|
|
$
|
(3,000
|
)
|
|
$
|
—
|
|
|
$
|
(3,000
|
)
|
|
|
|
|
||||
Investing activities:
|
|
|
|
||||
Proceeds from sale of assets
|
$
|
—
|
|
|
$
|
100
|
|
|
$
|
—
|
|
|
$
|
100
|
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
|
(In thousands)
|
||||||
Other receivables and accrued interest
|
$
|
87
|
|
|
$
|
2,557
|
|
Loans secured by real estate, average interest rate of 5.40%
at June 30, 2018 and at December 31, 2017
|
2,952
|
|
|
3,776
|
|
||
|
3,039
|
|
|
6,333
|
|
||
Allowance for bad debts
|
(26
|
)
|
|
(26
|
)
|
||
|
$
|
3,013
|
|
|
$
|
6,307
|
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
|
(In thousands)
|
||||||
3.75% convertible senior notes due 2020, net of discount and fees
|
$
|
110,515
|
|
|
$
|
108,139
|
|
Other indebtedness — 5.50% interest rate
|
—
|
|
|
290
|
|
||
|
$
|
110,515
|
|
|
$
|
108,429
|
|
•
|
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.
|
|
June 30, 2018
|
|
December 31, 2017
|
|
|
||||||||||||
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
|
Valuation
Technique
|
||||||||
|
(In thousands)
|
|
|
||||||||||||||
Fixed rate debt
|
$
|
(111,335
|
)
|
|
$
|
(111,205
|
)
|
|
$
|
(109,197
|
)
|
|
$
|
(109,114
|
)
|
|
Level 2
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(In thousands)
|
||||||||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
|
|
|
|
|
|
|
||||||||
Net income (loss) from continuing operations
|
$
|
10,286
|
|
|
$
|
(3,760
|
)
|
|
$
|
14,866
|
|
|
$
|
21,067
|
|
Less: Net income attributable to noncontrolling interest
|
(865
|
)
|
|
(48
|
)
|
|
(911
|
)
|
|
(88
|
)
|
||||
Earnings (loss) available for diluted earnings per share
|
$
|
9,421
|
|
|
$
|
(3,808
|
)
|
|
$
|
13,955
|
|
|
$
|
20,979
|
|
|
|
|
|
|
|
|
|
||||||||
Discontinued operations
|
|
|
|
|
|
|
|
||||||||
Net income from discontinued operations available for diluted earnings per share
|
$
|
—
|
|
|
$
|
1,229
|
|
|
$
|
—
|
|
|
$
|
1,647
|
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding — basic
|
41,939
|
|
|
42,259
|
|
|
41,939
|
|
|
42,171
|
|
||||
Dilutive effect of stock options, restricted stock and equity-settled awards
|
27
|
|
|
—
|
|
|
27
|
|
|
283
|
|
||||
Total weighted average shares outstanding — diluted
|
41,966
|
|
|
42,259
|
|
|
41,966
|
|
|
42,454
|
|
||||
Anti-dilutive awards excluded from diluted weighted average shares
|
—
|
|
|
1,774
|
|
|
—
|
|
|
1,663
|
|
•
|
general economic, market or business conditions where our real estate activities are concentrated;
|
•
|
our ability to achieve our 2018 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;
|
•
|
our ability to obtain future entitlement and development approvals;
|
•
|
obtaining 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, and share-based compensation;
|
•
|
the levels of resale housing inventory in our mixed-use development projects and the regions in which they are located;
|
•
|
fluctuations in costs and expenses, including impacts from shortages in materials or labor;
|
•
|
demand for new housing, which can be affected by a number of factors including the availability of mortgage credit, job growth and fluctuations in interest rates;
|
•
|
competitive actions by other companies;
|
•
|
changes in governmental policies, laws or regulations and actions or restrictions of regulatory agencies;
|
•
|
our partners’ ability to fund their capital commitments and otherwise fulfill their operating and financial obligations;
|
•
|
the effect of D.R. Horton's controlling level of ownership on us and our stockholders;
|
•
|
our ability to realize the potential benefits of the strategic relationship with D.R. Horton;
|
•
|
the effect of our strategic relationship with D.R. Horton on our ability to maintain relationships with our vendors and customers; and
|
•
|
the final resolutions or outcomes with respect to our contingent and other liabilities related to our business.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(In thousands)
|
||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Real estate
|
$
|
23,565
|
|
|
$
|
27,992
|
|
|
$
|
46,140
|
|
|
$
|
48,744
|
|
Other
|
—
|
|
|
23
|
|
|
24
|
|
|
1,576
|
|
||||
Total revenues
|
$
|
23,565
|
|
|
$
|
28,015
|
|
|
$
|
46,164
|
|
|
$
|
50,320
|
|
Segment earnings (loss):
|
|
|
|
|
|
|
|
||||||||
Real estate
|
$
|
13,254
|
|
|
$
|
11,545
|
|
|
$
|
22,957
|
|
|
$
|
22,018
|
|
Other
|
(140
|
)
|
|
(652
|
)
|
|
(693
|
)
|
|
36,777
|
|
||||
Total segment earnings
|
13,114
|
|
|
10,893
|
|
|
22,264
|
|
|
58,795
|
|
||||
Items not allocated to segments:
|
|
|
|
|
|
|
|
||||||||
General and administrative expense
|
(3,389
|
)
|
|
(27,549
|
)
|
|
(7,042
|
)
|
|
(31,577
|
)
|
||||
Share-based and long-term incentive compensation expense
|
(177
|
)
|
|
(1,448
|
)
|
|
(313
|
)
|
|
(2,343
|
)
|
||||
Gain on sale of timberland assets
|
—
|
|
|
28,049
|
|
|
—
|
|
|
28,049
|
|
||||
Interest expense
|
(1,605
|
)
|
|
(2,166
|
)
|
|
(3,741
|
)
|
|
(4,401
|
)
|
||||
Interest and other income
|
1,627
|
|
|
341
|
|
|
3,002
|
|
|
595
|
|
||||
Income from continuing operations before taxes attributable to Forestar Group Inc.
|
9,570
|
|
|
8,120
|
|
|
14,170
|
|
|
49,118
|
|
||||
Income tax expense
|
(149
|
)
|
|
(11,928
|
)
|
|
(215
|
)
|
|
(28,139
|
)
|
||||
Net income (loss) from continuing operations attributable to Forestar Group Inc.
|
$
|
9,421
|
|
|
$
|
(3,808
|
)
|
|
$
|
13,955
|
|
|
$
|
20,979
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(In thousands)
|
||||||||||||||
Revenues
|
$
|
23,565
|
|
|
$
|
27,992
|
|
|
$
|
46,140
|
|
|
$
|
48,744
|
|
Cost of real estate
|
(9,950
|
)
|
|
(16,918
|
)
|
|
(25,525
|
)
|
|
(28,814
|
)
|
||||
Operating expenses
|
(2,814
|
)
|
|
(3,959
|
)
|
|
(4,617
|
)
|
|
(7,838
|
)
|
||||
|
10,801
|
|
|
7,115
|
|
|
15,998
|
|
|
12,092
|
|
||||
Interest income
|
1,000
|
|
|
281
|
|
|
1,277
|
|
|
703
|
|
||||
Gain on sale of assets
|
1,318
|
|
|
1,450
|
|
|
4,064
|
|
|
1,450
|
|
||||
Equity in earnings of unconsolidated ventures
|
1,000
|
|
|
2,747
|
|
|
2,529
|
|
|
7,861
|
|
||||
Less: Net income attributable to noncontrolling interests
|
(865
|
)
|
|
(48
|
)
|
|
(911
|
)
|
|
(88
|
)
|
||||
Segment earnings
|
$
|
13,254
|
|
|
$
|
11,545
|
|
|
$
|
22,957
|
|
|
$
|
22,018
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(In thousands)
|
||||||||||||||
Residential real estate
|
$
|
23,253
|
|
|
$
|
24,738
|
|
|
$
|
43,601
|
|
|
$
|
44,786
|
|
Commercial real estate
|
—
|
|
|
2,820
|
|
|
2,000
|
|
|
3,267
|
|
||||
Commercial and income producing properties
|
—
|
|
|
91
|
|
|
—
|
|
|
91
|
|
||||
Other
|
312
|
|
|
343
|
|
|
539
|
|
|
600
|
|
||||
|
$
|
23,565
|
|
|
$
|
27,992
|
|
|
$
|
46,140
|
|
|
$
|
48,744
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Owned and consolidated ventures:
|
|
|
|
|
|
|
|
||||||||
Residential lots sold
|
297
|
|
|
252
|
|
|
601
|
|
|
442
|
|
||||
Revenue per lot sold
|
$
|
77,864
|
|
|
$
|
89,499
|
|
|
$
|
72,235
|
|
|
$
|
89,220
|
|
Commercial acres sold
|
—
|
|
|
16
|
|
|
25
|
|
|
20
|
|
||||
Revenue per acre sold
|
$
|
—
|
|
|
$
|
170,366
|
|
|
$
|
80,678
|
|
|
$
|
161,536
|
|
Ventures accounted for using the equity method:
|
|
|
|
|
|
|
|
||||||||
Residential lots sold
|
8
|
|
|
59
|
|
|
29
|
|
|
166
|
|
||||
Revenue per lot sold
|
$
|
78,940
|
|
|
$
|
66,954
|
|
|
$
|
72,614
|
|
|
$
|
70,207
|
|
Commercial acres sold
|
—
|
|
|
42
|
|
|
—
|
|
|
88
|
|
||||
Revenue per commercial acre sold
|
$
|
—
|
|
|
$
|
318,725
|
|
|
$
|
—
|
|
|
$
|
263,674
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(In thousands)
|
||||||||||||||
Employee compensation and benefits
|
$
|
1,010
|
|
|
$
|
1,241
|
|
|
$
|
1,728
|
|
|
$
|
2,569
|
|
Property taxes
|
945
|
|
|
1,353
|
|
|
1,329
|
|
|
2,244
|
|
||||
Professional services
|
239
|
|
|
453
|
|
|
462
|
|
|
1,283
|
|
||||
Depreciation and amortization
|
28
|
|
|
32
|
|
|
55
|
|
|
67
|
|
||||
Other
|
592
|
|
|
880
|
|
|
1,043
|
|
|
1,675
|
|
||||
|
$
|
2,814
|
|
|
$
|
3,959
|
|
|
$
|
4,617
|
|
|
$
|
7,838
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(In thousands)
|
||||||||||||||
Revenues
|
$
|
—
|
|
|
$
|
23
|
|
|
$
|
24
|
|
|
$
|
1,576
|
|
Cost of other
|
(34
|
)
|
|
(108
|
)
|
|
(570
|
)
|
|
(38,724
|
)
|
||||
Operating expenses
|
(106
|
)
|
|
(574
|
)
|
|
(147
|
)
|
|
(1,545
|
)
|
||||
|
(140
|
)
|
|
(659
|
)
|
|
(693
|
)
|
|
(38,693
|
)
|
||||
Gain on sale of assets
|
—
|
|
|
7
|
|
|
—
|
|
|
74,222
|
|
||||
Equity in earnings of unconsolidated ventures
|
—
|
|
|
—
|
|
|
—
|
|
|
1,248
|
|
||||
Segment earnings (loss)
|
$
|
(140
|
)
|
|
$
|
(652
|
)
|
|
$
|
(693
|
)
|
|
$
|
36,777
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(In thousands)
|
||||||||||||||
Employee compensation and benefits
|
$
|
1,592
|
|
|
$
|
2,230
|
|
|
$
|
3,338
|
|
|
$
|
4,263
|
|
Professional and consulting services
|
1,070
|
|
|
4,377
|
|
|
2,052
|
|
|
5,355
|
|
||||
Facility costs
|
65
|
|
|
223
|
|
|
266
|
|
|
435
|
|
||||
Depreciation and amortization
|
8
|
|
|
84
|
|
|
32
|
|
|
171
|
|
||||
Insurance costs
|
147
|
|
|
165
|
|
|
279
|
|
|
327
|
|
||||
Other
|
507
|
|
|
20,470
|
|
|
1,075
|
|
|
21,026
|
|
||||
|
$
|
3,389
|
|
|
$
|
27,549
|
|
|
$
|
7,042
|
|
|
$
|
31,577
|
|
Exhibit
|
|
Description
|
|
|
|
3.1*
|
|
|
10.1†
|
|
|
10.2†
|
|
|
31.1
|
|
|
31.2
|
|
|
32.1
|
|
|
32.2
|
|
|
101.1
|
|
The following materials from Forestar’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2018, formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Cash Flows, and (iv) Notes to Consolidated Financial Statements.
|
*
|
Filed herewith.
|
†
|
Management contract or compensatory plan or arrangement.
|
|
FORESTAR GROUP INC.
|
|
|
|
|
Date: August 8, 2018
|
By:
|
/s/ Charles D. Jehl
|
|
|
Charles D. Jehl
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial and Principal Accounting Officer)
|
|
/s/ Daniel C. Bartok
|
|
Daniel C. Bartok
Chief Executive Officer
|
|
/s/ Charles D. Jehl
|
|
Charles D. Jehl
Chief Financial Officer
|
|
/s/ Daniel C. Bartok
|
|
Daniel C. Bartok
|
|
/s/ Charles D. Jehl
|
|
Charles D. Jehl
|