Anna Elizabeth Torma - Senior Vice President of Corporate Affairs Christopher L. Nines - Chief Financial Officer James M. DeCosmo - Chief Executive Officer, President and Director

Mark A. Weintraub - The Buckingham Research Group Incorporated Steven Chercover - D.A. Davidson & Co., Research Division David Woodyatt Steven Eisman

Good day, ladies and gentlemen, and welcome to the Second Quarter 2013 Forestar Group Earnings Conference Call. My name is Dominique, and I'll be your operator for today. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to Anna Torma, Senior Vice President, Corporate Affairs. Please proceed.

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 second quarter 2013 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 presentation slides are now available on the Investor Relations section of our website at forestargroup.com. Before we get started, let me remind you to please review the warning statements 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 Chris for a review of our financial results. Christopher L. Nines: Thank you, Anna, and welcome to everybody joining us on the call this morning. Let me begin by highlighting our second quarter financial results. In second quarter 2013, Forestar reported net income of approximately $500,000 or $0.02 per share compared with net income of $800,000 or $0.02 per share in the second quarter 2012. This first slide provides a high-level reconciliation between our second quarter 2013 and our second quarter 2012 net income and earnings per share on an after-tax basis. The most significant positive variance was lower general and administrative costs, which benefited earnings by $1.1 million or $0.03 per share. In the second quarter of 2012, we incurred expenses of approximately $1.6 million or $0.05 per share associated with the acquisition of Credo Petroleum. Other natural resources segment earnings increased by $900,000 or $0.03 per share primarily due to higher fiber sales and pricing. Real estate segment results improved by approximately $300,000 or $0.01 per share, which principally reflects the benefit of higher average prices for residential lots and commercial tracks. Most significant negative variance was interest expense, taxes and other cost, which negatively impacted earnings by $1.1 million or $0.03 per share principally due to additional interest expense associated with the issuance of $125 million in convertible notes during the first quarter of 2013. In addition, share-based compensation expense increased approximately $1 million or $0.03 per share as compared with second quarter 2012, principally driven by our higher stock price and the mark-to-market impact in our cash-settled awards. Oil and gas segment earnings results were down approximately $500,000 or $0.01 per share principally due to lower oil volumes associated with royalties from our own mineral interests. Now let me turn to the segment results for the quarter. In second quarter 2013, total segment earnings were approximately $13.3 million, up almost 10% compared with $12.2 million in second quarter 2012. Real estate reported segment earnings of $8.1 million in second quarter 2013 compared with earnings of $7.7 million in second quarter 2012. Our second quarter real estate segment results include earnings of approximately $700,000 from the sale of the remaining 440 undeveloped residential acres from our project in Florida. Let me also remind you that our second quarter 2012 real estate segment earnings include a $3.4 million gain associated with the sale of approximately 800 acres from the Light Farms venture located near Dallas. The primary driver of the improvement in real estate segment results is an increase in residential lot and commercial tract prices. The Oil and Gas segment reported earnings of $4.2 million in second quarter 2013 as compared with $5 million in second quarter 2012. This decline is principally due to lower oil production associated with royalties from our own minerals and reduced delay rental payments. Other natural resources reported total segment earnings of $1 million in second quarter 2013 compared with a loss of $500,000 in the second quarter of 2012. This improvement was driven by higher fiber volumes and prices. Now let me turn the call over to Jim for additional operating highlights from the quarter. James M. DeCosmo: Thank you, Chris. And I'd also like to welcome everyone, who's joined us on the call this morning. At the midpoint of the year, I'm confident we're on track to deliver our Triple in FOR initiatives, I believe Forestar's headed in the right direction. To review the key -- a few of the key highlights for the second quarter this year versus the second quarter of 2012. First, a nice step up in average lot pricing with a healthy backlog of banking hundred [ph] lots on the contract. Second, we continue to make good progress in multi-family with 915 units under construction. Of the 3 projects, we have 1 that's currently pre-leasing, the second is expected to start pre-leasing by the end of this month and the third, later in the year. Number 3, oil and gas production is up nearly 170%, which is reflective of our acquisition of Credo and investments in drilling and completion. And 4, number of sales were up to nearly 185,000 tons [ph]. And last, in second quarter, we invested about $36 million of capital and strategic growth opportunities weighted toward oil and gas working interest and the development of lots. We firmly believe these investments will deliver additional value to Forestar and our shareholders. Let's take a closer look at our real estate segment and, in particular, current Texas market conditions. As we shared with you last quarter, the months of supply of finished vacant housing in Texas continues to be at the low end of equilibrium, the primary driver being historically low absolute inventory of new homes. Texas also continues to be a leader in job growth. 303,000 new jobs in the last 12 months accounts for about 12% of the national total. This is the cornerstone of demand. As the table on the right illustrates, Forestar's development projects are well positioned to take advantage of Texas' growth and new home starts. In the 4 major metros of Texas, we have 1,370 finished lots, over 1,000 lots in development and almost 10,500 to be developed. That's a solid pipeline, which enables us to capitalize on the housing recovery. Let's review real estate segment results for the second quarter. The second quarter, real estate segment earnings were $8.1 million, that's up about $400,000 compared to the same quarter last year. Average residential lot prices are up and I think that's reflective of low supplies and good locations and solid builder demand. Sale of 34 commercial acres at over $100,000 an acre is a step in the right direction. As I've said in the past, commercial tract sales generally will follow residential development. It's a function of population growth within the submarket. Residential lot sales are down from the previous quarter primarily due to timing of closings. Lot sales on a quarterly basis has always been a little lumpy, given that a number of contracts call for closings around the beginning or at the end of a quarter. From an annual trend perspective, we continue to expect lot sales this year to be up about 40% over last year. We sold 806 lots in the first half of this year and that's up about 13% from the first half of 2012. Average lot margins in the first half of this year are up roughly 32% above the first half of last year. And I think that's a combination of real price appreciation and mix between the projects. Likewise, our backlog of lots on a contract has increased over 1,900 lots. That's a level we hadn't seen since the downturn began. Barring any significant movement in the schedule, we'd expect lot closings in the third quarter to be in the 400 to 450 range and in the 1,900 to 2,000 range for the year. Shifting gears to multi-family. We're on schedule with our 2 venture projects under construction, that's Eleven located in Austin and 360 located in Denver. Eleven, our 257-unit community in downtown Austin, is over 65% complete and currently ahead of the leasing schedule with almost 20% of the units preleased. We're also looking forward to the first residents moving in this quarter. The initial response to our pre-leasing marketing campaign has been very positive. Plans are to achieve stabilization and sale in 2014. 360, our 304-unit community in Denver, is roughly 35% complete. Preleasing's expected to begin this month with the first units delivered before year-end. The construction of Midtown, Cedar Hill located in Dallas Metro is underway with several building pads already completed. This project is being built on balance sheet, very similar to Promesa, which was very successful and sold in the first quarter of this year. We expect to start construction on Nashville this year and Charlotte early in 2014. In line with our business plan, we're also evaluating a number of prospective sites for future projects. Real estate is headed in the right direction. The teams done a nice job delivering momentum in the business and that's by delivering quality product in locations where people want to be. Going forward, we'll continue to focus on growing lot sales, margins and delivering commercial and residential tract sales. As mentioned, we have 3 multifamily projects under construction and we'll realize the value created once stabilized and sold. In summary, I'm encouraged about our progress and expect the trend to continue. Let's shift to Oil and Gas. In the second quarter this year, oil and gas segment earnings were $4.2 million. That's about $800,000 below the second quarter of last year. The decline is mostly due to less activity in the East Texas and the Gulf Coast basins. Total leasing activity in oil production from royalty interest is down while operating cost is up, which is reflective of the Credo acquisition. Both segment earnings is the EBITDAX reconciliation. EBITDAX is a non-GAAP measure with reconciliation segment earnings included in the appendix. EBITDAX is more reflective of the cash flow generated by the business before capital investments. And as you can see, the EBITDAX is up about $5.8 million year-over-year. Oil production was up over 169% compared with the second quarter of last year. 75% of oil production was generated from working interest investments. That's a fundamental shift from a year ago, when production was driven almost entirely by royalty interest. We fully expect 2013 oil and gas capital investments to drive production, reserves and earnings higher as we go forward. For the quarter, 18 wells were drilled to total depth, 7 in the Bakken/Three Forks and 11 in the Lansing-Kansas City located in Kansas and Nebraska. And last, we leased about 17,300 net acres primarily in Nebraska. Let's take a closer look at the Bakken/Three Forks. Laser drilling in the Bakken/Three Forks continues to ramp up. Operators are transitioning from drilling one-off wells to whole leases, pad drilling, where multiple wells will be drilled in sequence from 1 location. Pad drilling typically enables operators to reduce well cost and increase recoveries. Also, with additional research and testing, operators have the potential to extend the play and lower benches of the Three Forks formation. At quarter end, 53 wells were producing, and we expect to have 78 in production by year-end. And so we'll double the number compared to year-end 2012. Based on operators' drilling plans, we continue to expect 54 wells to be drilled this year, 43 of the 54 producing by year-end. Let me call your attention to the average working interest located on the lower left part of the slide. Wells drilled year-to-date are averaging about 5% working interest. Based on operators' plans, we expect that to increase throughout the year. As a result, we anticipate production will pick up in the latter half of this year and into 2014. At the end of the second quarter, 3 Bakken and 4 Three Forks wells were added to production: 5 of the wells drilled were operated by WPX, with Forestar having only about a 1% to 1.5% working interest; and 2 wells were drilled by Halcon with working interest ranging from 12% up to almost 19%. These 2 wells will help offset the low working interest wells drilled in the first half of the year. What's shown on the map, are 6 additional wells are awaiting completion. Relative to production, 3 Bakken and 4 Three Forks Wells logged additional production rates in the quarter. Average initial production rates are pretty close for both the Bakken and the Three Forks formations at just under 2,000 barrel full equivalents per day. In particular, note the Halcon Three Forks well in the bottom left of the map, where we have almost a 19% working interest. The Three Forks well came in line with a solid initial production rate of just under it 2,400 BOEs per day. We signed a number of AFEs for Bakken/Three Forks wells of similar working interest levels. They're scheduled to be drilled in the second half of this year. IP rates provide some insight and potential well performance. Yet, from a reserve and production standpoint, were primarily focused on the EURs, or the estimated ultimate recoveries. Many operators expect EURs to ramp up from 500,000 BOEs to 600,000 BOEs with some operators targeting as high a 700,000 BOEs per well. Based on engineering calculations, the average type curve for the 52 producing wells in the Bakken/Three Forks, in which we participate, would indicate EUR is averaging about 600,000 BOEs. This is well above the 500,000 BOE level we used to underwrite Credo, which would support returns above our 20% hurdle rate. Let's move south to another important region, Kansas and Nebraska. With our success in the central uplift, we leased over 16,500 net mineral acres in the second quarter and it's primarily located in Nebraska. Year-to-date through the second quarter, we've leased over 54,000 mineral acres, bringing our total leasehold acreage to about 164,000 net acres. Our 2013 plan remains to participate in about 86 wells, a majority of which we'll operate. In the second quarter, we added 11 wells and realized over a 65% success rate. Our perspective, 40% success rate yielded a risk adjusted return north of 100%. We're building a solid pipeline of prospects in Kansas and Nebraska and at the current pace, we should have several years of drilling locations. Now shifting gears to an update on our drilling and completion CapEx program. During the second quarter, we invested about $5.5 million in the Bakken/Three Forks, $2.9 million in Lansing-Kansas City and $3.3 million in various plays in Texas, Louisiana and Oklahoma. In the first half, we invested about $24 million in drilling completion and we ended the quarter with $19 million in commitments. Given higher working interest in the Bakken/Three Forks Wells plus a higher pace of drilling, we expect the level of investment to pick up in the latter half of the year. As the chart illustrates, we anticipate second half reduction to pick up about 20% as compared to the first half of this year. It's to be expected given our investments over the previous 3 quarters. From a cost perspective, we can see our gross margin for the segment is about 30% or $18 of BOE. Keep in mind this cost includes all segment operating cost. After 9 months of operations, transformation from a minerals management strategy to a low-cost high-return oil and gas business is on track. Given the oil and gas market conditions remain relatively stable, I fully expect our results to continue to improve. Shifting gears to other natural resources. Our other natural resources segment includes revenues from our Timberlands and the cost associated with the development of our water business. In the second quarter, fiber sales were up $1.6 million from the second quarter of 2012. During the quarter, we sold nearly 185,000 tons of fiber, that's up over 79,000 tons from the previous year, which is primarily due just to the timing of harvest. For the year, we remain on track to sell about 500,000 tons of fiber. Our average stumpage price in the quarter was up over 27% from a year ago driven primarily by higher mix of sawlog sales and, to a lesser extent, higher stumpage prices. On the last section of the call, I want to update you on the execution of our Triple in FOR strategic initiatives. We're committed to delivering our Triple in FOR strategic initiatives. We've made good progress in the last 1.5 years, driving segment EBITDA performance, improving transparency disclosure and growing Forestar through strategic and disciplined investments. Take a look at a few of the key metrics relative to accelerating value realization: Number 1, triple total segment EBITDA. Our EBITDA for the first half of 2013 was approximately $50 million, and I expect EBITDA to be even stronger in the second half of the year. Number 2, triple oil and gas production. The first half of 2013, oil and gas production is nearly halfway to our Triple in FOR goal. With the capital investments we're making, our goal of 1.1 million BOE requires about a 20% step up in the second half of 2013. I believe that's achievable. Number 3, residential lot sales of 2,200 lots. At the midpoint to the year we've sold over 800 lots and we're on track to sell 1,900 to 2,000 lots. Further demand in Texas continues to strengthen, and I'm encouraged by our backlog with about 1,900 lots under contract. Barring unforeseen events that might derail the housing recovery, I'm confident that we can meet our lot sales goals. In summary, charts illustrate our expectation that the second half of this year should be stronger than the first half. Also, let me close by saying that I'm encouraged by our progress and the momentum that we've generated thus far. I think we're on the right track and also believe we're just getting started demonstrating Forestar's true potential and looking forward to the days ahead. Once again, I want to thank you for joining us on the call this morning, as well as your interest in Forestar. I'd like to open up the call for questions.

[Operator Instructions] The first question comes from the line of Mark Weintraub of Buckingham Research. Mark A. Weintraub - The Buckingham Research Group Incorporated: Jim, first question I had was on the 2,200 lot sales for 2015. I guess given the progress that we've already seen, given the type of environment that you're describing, could that prove to be quite conservative, the 2,200 for 2015? James M. DeCosmo: Mark, the 2,200 was the average annual sales for the 4-year period for '12 through '15. So given 1,365 last year, 1,900 to 2,000 this year, continue to accelerate through '14 and '15. Assuming the housing market space is on track, I think the 2,200 is still a good number. I would tell you, it feels a little bit more conservative today than at the time that we adopted it back in 2011. Mark A. Weintraub - The Buckingham Research Group Incorporated: Okay. But just to clarify, I may have misunderstood then, so that 2,200 lots, that is the expected average for the 2012 through 2015 period, not the goal for 2015? James M. DeCosmo: Correct. Mark A. Weintraub - The Buckingham Research Group Incorporated: My misunderstanding. Okay. Just 1 question to -- if I look at the lots that you still have available and what you were selling, it looks like that the Dallas region, in particular, you have more inventory relative to the amount of product that you're selling. Can you talk a little bit about that? Is it that -- do you expect Dallas to pick up? How is your Dallas inventory different than what you have in the other regions in Texas? James M. DeCosmo: Mark, I think as you are aware, the inventory is variable by market, just based on historic acquisitions as well as sales rates. But we continue to expect whether it's DFW or Austin or San Antonio or Houston for sales rates to continue to increase. But as far as the inventory by market, it's just a function of the projects they required and their size. I think as you know, Cibolo Canyons, for example, which you're familiar with, initially, it had anywhere from, I think, 2,200 maybe to 2,500 lots. So if you were to buy a master plan that had that type of yield, given where we are today, that's going to make a pretty big swing at the market level but -- so I would tell you that the variation among markets today, as far as existing available inventory, is principally a reflection of historic acquisitions. Mark A. Weintraub - The Buckingham Research Group Incorporated: Okay. And I guess, what I mean to say, if you look at, for instance, your lot sales in the second quarter in Dallas, they're 118, and your remaining lots to be developed are north of 4,000 and also you have 640 vacant lots. Whereas in the Austin, you only have 100 vacant developed lots and 2,200 in total, yet your lot sales are higher. Does it take longer to sell through the Dallas inventory typically? Or not necessarily? That's just... James M. DeCosmo: Mark, I would say not necessarily. I would tell you that there's a -- as you'd expect, there's a couple of projects in Dallas that are early in their life and haven't started or are just beginning to generate some sales. So you also have to keep in mind the timing of the projects and where they are in their life. Mark A. Weintraub - The Buckingham Research Group Incorporated: Okay, great. And one last one, just real quick. Any change in your views in terms -- because you'd previously given some indications on the types of profitability you expected from the multifamily developments. Is that pretty much the same today as what you had indicated 3 months ago? James M. DeCosmo: Yes. Yes, Mark, I would say that we still have the same view on cash multiples and the profitability and returns in these projects that we did 2 or 3 months ago.

Your next question comes from the line of Steve Chercover of D. A. Davidson. Steven Chercover - D.A. Davidson & Co., Research Division: My first question, I guess it's just a housekeeping one. Is the second quarter kind of a key quarter for share-based compensation as a line item? James M. DeCosmo: Steve, historically, the first quarter's had more noise in it than the second. And keep in mind that it's very sensitive to the movement in stock price, given the mix between cash-settled awards and those that are settled with stock. Steven Chercover - D.A. Davidson & Co., Research Division: Great. And then I've got 1 real estate and 1 Oil and Gas question. So on Page 27, this is a good table. Looks like your commercial acreage -- that the value for your commercial acreage just over doubled year-over-year. Is that a function of location or the economic environment or a little bit of each? James M. DeCosmo: Little bit of each, more location. Steve, there'll be some commercial sales that are similar to 2012, it could be $50,000 an acre and there could be some that could be as high as a couple of hundred thousand dollars an acre. It's just a function of location. I think if you looked at these commercial tract sales historically, they've tended to be in the $90,000 to $100,000 an acre range. But to your point, there's going to be -- there'll be some variability in that sales price. Steven Chercover - D.A. Davidson & Co., Research Division: Well, maybe can you give us some color, like, this quarter, the $100,000 an acre product, where was that located as compared to last year's $50,000 an acre? And where do you have more inventory? James M. DeCosmo: Yes. Steve, if I recall, last year -- I can tell you this year, a majority of the sales in the second quarter were in Houston. And obviously Houston is in really good shape. And the sales last year, well, Steve, I can't remember exactly where those parcels were located off the top of my head. We can follow up. We can give you some more color on that. But I can't tell you off the top of my head. I know what second quarter this year was. Steven Chercover - D.A. Davidson & Co., Research Division: Got you. And then you did say that your EBITDA is going to be kind of more -- better than the $50 million run rate in the second half. So is that applicable to minerals as well? Because you did say that results should improve. Were you referring to segment EBITDA for minerals or to production levels? James M. DeCosmo: Both. My comment was that we've been investing in oil and gas business really for the last 3 quarters, and we anticipate that those investments will begin to yield additional production which will turn into both earnings and EBITDAX. Steven Chercover - D.A. Davidson & Co., Research Division: Got it. And sorry, 1 last one on real estate, then I'll turn it over it. Your total lot inventory of 10,485 represents about a 5-year supply. So is it safe to assume that you're either looking at your existing land base to kind of keep on building that pipeline or you'll have to buy new acreage to make sure that you always have a 4-, 5-year supply? James M. DeCosmo: Steve, we're always looking at potential acquisitions. I'll tell you that in the first half of 2012, we made a couple of small acquisitions, but not enough to really move the needle or -- relative to lot inventory. I think as you know, there's a lot of demand for land and lot positions and we've continued to be both disciplined as well as patient. So there's a time to make good acquisitions, but the benefit that we have today Steve, is -- and you made the point, is that we've got a good, solid pipeline and we've got inventory to work out of for a while.

Your next question comes from the line of David Woodyatt of Keeley Asset Management.

Is there anything you can report on the possibility of monetizing, to some degree, the resort and the surrounding land? James M. DeCosmo: David, let me first share with you, in the second quarter, I think we received close to $2 million from the district. So we've got cash coming in. As always, we look at and work with the district on ways to accelerate the monetization of that cash flow stream and I would report this morning that we're doing that. As soon as we make some progress to the point that I feel pretty confident that we're going to be able to deliver something, I'll certainly share that with you as well as the market.

Okay. The other question I have is, I know the Atlanta market was hit hard and certainly hasn't been as good as the Texas markets. But it seems like, recently, I've seen some pretty encouraging data about the Atlanta area and housing. How soon might we see something material done with your property in the Atlanta area? James M. DeCosmo: David, I think your comments are accurate. The Atlanta market is improving. Keep in mind that's a relative term and Atlanta was in a pretty deep dark hole relative to housing, so it's headed in the right direction. I will tell you that of the projects that we have that can generate lot sales, that activity has picked up considerably. And we've got maybe 3 or 4 different projects that are now generating sales, so we're encouraged by that. Relative to the other projects that we have entitled, our strategy is to continue to be very disciplined and strategic in those investments and when the market warrants an investment, then we'll invest there. But here again, as I said, it is better and we're seeing some positive results, but I think Atlanta still has a ways to go.

You're next question comes from the line of Steven Eisman of Emrys Partners.

I'm wondering if we could explore something, a little bit more of an overview of the company. This is company that has a market capital of about $740 million for shareholders. But it's quite complicated and hard to understand for such a small market cap. Is there a way to get rid of sales -- dispose of some of the more extraneous businesses like timber, which seems to be not an area of focus to the company and take the proceeds and reinvest in the parts of the company that are clearly a focus? James M. DeCosmo: Yes, Steve, I think that's consistent with some of our actions over the last 2 or 3 years. If you look back, we've sold probably, oh, 220,000, 230,000 acres of Timberland. So we've been very active at monetizing those assets and reinvesting them back into the business. In fact, to your point, since we've spun out in 2008, we've monetized close to $400 million in assets that we don't believe are core or meet our return expectations, and we've reinvested maybe $360 million, $370 million back into the business. So that would support your comment.

And just one more follow-up. You basically have 2 core businesses, being the land development and the oil business. They're not 2 businesses that naturally fit with one another. Is there any thinking within the company about putting the company up basically into 2 companies, so that there would be more clarity as to the entire value of the company, because those of us who own the stock believe that there is great value here. James M. DeCosmo: Steven, we also believe that there's a lot of potential value in Forestar. Keep in mind that when we spun out back in 2008, it was more of a collection or a portfolio of assets and what we've done to date is to begin to take those assets and develop businesses on top of them, which in my opinion is really what creates the real value. We're somewhat early in that process. I think that the business is on the right track but somewhat fledgling. I do believe in time, that we'll have some very nice strategic options. However, today, we're very focused on the businesses at hand and making sure that they're best of class. Not the biggest, but the best in class. And believe that's what will generate the greatest value for shareholders.

But you're not, in principle against necessarily splitting up the company, you just think it's early? James M. DeCosmo: Yes -- Steven, I do think it's early. Today, I think the focus has got to be on proving up these businesses and these assets, and ultimately that's what's going to create the greatest value for the shareholders.

You have a follow-up question from the line of David Woodyatt of Keeley Asset Management.

I just had one more question. Are we, at all, close to seeing some meaningful initial transaction related to the Water Rights? James M. DeCosmo: David, the team that we have that's dedicated to the water business continues to stay very focused on perfecting and garnering withdrawal permits for groundwater in addition to continuing with negotiations and discussions with potential buyers. So I will tell you, I think that were making good progress, yet at the same time, as I've said on a number of different occasions, this is a political and emotionally charged process. So predicting time or the when is extremely difficult. As I've said, I don't think it's an if. It's a when. And I'm encouraged by the progress and the results today. But David, I think it's still a little bit premature that to say that we're going to expect something in the next quarter, the next 2 quarters. But I will say that we're diligently focused on delivering those elements of the business that will create and deliver value for us and that's garnering the withdrawal permits and executing purchase and sale agreements with potential buyers.

This ends today's question-and-answer session. I would like to hand the call back over to Jim DeCosmo for closing remarks. James M. DeCosmo: Thank you. Once again, I want to thank everyone for joining us on the call this morning, as well as your interest in Forestar and hope that you have a great day.

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect, and have a wonderful day.