Forestar Group Inc (NYSE:FOR) Q4 2015 Earnings Conference Call - Final Transcript

Mar 05, 2015 • 10:00 am ET


Forestar Group Inc (NYSE:FOR) Q4 2015 Earnings Conference Call - Final Transcript


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Good day, ladies and gentlemen and welcome to the Forestar Group's Fourth Quarter and Full Year 2014 Earnings Conference Call. My name is Denise, and I'll be the operator for today. At this time all participants are in listen-only mode, later we will conduct a question-and-answer session.

[Operator Instructions]

As a reminder, this conference is being recorded for replay purposes. I would now turn the conference over to Anna Torma. Please proceed.

Anna E. Torma

Thanks and good morning. I would like to welcome each of you who have joined us by conference call or webcast this morning to discuss Forestar's fourth quarter and full year 2014 results. I'm Anna Torma, Senior Vice President, Corporate Affairs. Joining me on the call today is Jim DeCosmo, President and CEO; and Chris Nines, Chief Financial Officer. This call is being webcast and copies of the earnings release and the presentation slides are now available on the Investor Relations section of our website at

Before we get started, let me remind you to please review the warning statements in our press release and our slides as we will make forward-looking statements during the presentation. In addition, this presentation includes non-GAAP financial measures, the required reconciliation to GAAP financial measures can be found at the back of our earnings release and slides or on our website. Now let me turn the call over to Jim for some opening comments.

James M. DeCosmo

Thank you, Anna, and I would also like to welcome everybody who's joining us on the call today. This morning, I want to simply say that Forestar is committed to maximizing long-term shareholder value.

2014, we delivered record real estate segment EBITDA of over $100 million, further execution of our strategy. On the other hand, the oil and gas segment financial performance was not up to our standard. Segment earnings were adversely impacted by oil price-driven impairments, yet we were successful growing production and proved reserves by 20%.

Given unacceptable results and low oil prices, we've restructured our oil and gas business and we're intently focused on generating cash flow and earnings as a positive step in the right direction towards maximizing long-term shareholder value.

Also, since last call, we've implemented several initiatives specifically focused on enhancing shareholder value. First, we repurchased approximately 1.5 million shares in the fourth quarter of 2014 for $25 million. Second, our Board of Directors voted to recommend declassifying the board so that all directors would be elected annually.

Third, Forestar added two new shareholder-proposed directors to the board in February that should expand the board's perspectives.

And the fourth, last and most important, we've listened to our shareholders regarding complexity, capital requirements and the mix of our businesses. As a result, our board, management team and advisers are engaged in evaluating strategic alternatives to enhance shareholder value, and that includes a comprehensive review of our oil and gas business.

Now let me turn the call over to Chris for a review of our financial results.

Chris Nines

Thank you, Jim. Let me begin by