8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report: November 4, 2015

(Date of earliest event reported)

(Exact name of registrant as specified in its charter)



Delaware	Commission File Number	26-1336998
(State or other jurisdiction of incorporation or organization)	001-33662	(I.R.S. Employer Identification No.)

6300 Bee Cave Road, Building Two, Suite 500

(Address of principal executive offices) (zip code)

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On November 4, 2015, Forestar Group Inc. (the “Company”) issued a press release announcing the Company’s results for the quarter ended September 30, 2015. A copy of the press release is furnished as Exhibit 99.1 of this report.

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On November 4, 2015, the Company announced that Bruce F. Dickson will retire from his position as its Chief Real Estate Officer, effective as of March 31, 2016. A copy of the press release is furnished as Exhibit 99.1 of this report.

Item 7.01. Regulation FD Disclosure

On November 4, 2015, management of the Company will participate in a conference call discussing the Company’s results for the quarter ended September 30, 2015. Copies of the presentation materials to be used by management are furnished as Exhibit 99.2 of this report.

Item 9.01. Financial Statements and Exhibits.



Exhibit			Description

99.1			Press release issued by the Company on November 4, 2015

99.2			Presentation materials to be used by management in a conference call on November 4, 2015, discussing the Company’s results for the quarter ended September 30, 2015.

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.




		FORESTAR GROUP INC.


Date:	November 4, 2015	By:	/s/ David M. Grimm
			Name:	David M. Grimm
			Title:	Chief Administrative Officer



Exhibit			Description

99.1			Press release issued by the Company on November 4, 2015

99.2			Presentation materials to be used by management in a conference call on November 4, 2015, discussing the Company’s results for the quarter ended September 30, 2015.

FOR IMMEDIATE RELEASE

CONTACT: Anna E. Torma

FORESTAR GROUP INC. REPORTS THIRD QUARTER 2015 RESULTS

Tremendous changes at Forestar including four key initiatives:

Reducing costs across the entire organization

Reviewing entire portfolio of assets

Reviewing capital structure

Reviewing additional disclosures

AUSTIN, TEXAS, November 4, 2015—Forestar Group Inc. (NYSE: FOR) (“Forestar” or the “Company”)today reported a third quarter 2015 net loss of approximately ($164.2) million, or ($4.79) per share outstanding, compared with third quarter 2014 net income of approximately $5.2 million, or $0.12 per share outstanding. Third quarter 2015 results include charges of approximately ($153.9) million, or ($4.48) per share, related to a deferred tax asset valuation allowance, impairment of proved properties and unproved leasehold interests associated with non-core oil and gas assets, and severance related charges. To the extent the Company generates sufficient future taxable income, the Company may utilize the tax deductions represented by the deferred tax asset in future tax returns notwithstanding the valuation allowance. Excluding special items, third quarter 2015 net loss was approximately ($10.3) million, or ($0.31) per share.



	Third Quarter
	2015			2014

Net income (loss) per share - as reported		($4.79	)		$0.12

Special items per share:
Deferred tax asset valuation allowance	2.88			—
Proved property impairments - oil & gas	1.24			—
Unproved leasehold interest impairments - oil & gas	0.30			—
Severance related charges	0.06			—
Total special items per share (after-tax)		$4.48			$—
Net income (loss) per share - excluding special items		($0.31	)		$0.12

Focusing on Residential Housing Development, Significantly Reducing Costs and Reviewing Alternatives

“Forestar has made tremendous changes at the Board and management levels. We are focused on creating shareholder value through our core residential housing development business. In addition, we are focused on four key initiatives: to significantly reduce costs across our entire business, review our entire portfolio of assets, review our capital structure to match our real estate focus going forward, and review additional disclosures,” said Phil Weber, Chief Executive Officer of Forestar. “We have taken actions to eliminate over $13 million in general administrative and segment operating expenses, representing a 2016 cost reduction of approximately 22% compared to 2015 run rate levels. Going forward, we expect additional cost reductions as we focus on our core residential housing development business.”

Residential Housing Demand Stable, Despite Construction and Permitting Delays

“We continue to see stable market demand for our communities, with over 1,440 lots currently under option contracts with builders, with average residential lot prices up 4% compared with third quarter 2014. Multifamily

construction activity continued on four existing projects, with two additional multifamily developments, 360° in Denver and Acklen in Nashville, currently nearing completion and experiencing solid leasing activity. In addition, our two stabilized multifamily projects, Eleven in Austin and Midtown near Dallas, are both nearly 95% leased and generating effective rents above our initial underwriting.”

Forestar manages its operations through three business segments: real estate, oil and gas and other natural resources.

Third Quarter 2015 Significant Highlights (Includes Ventures)

Sold 301 developed residential lots for over $76,600 per lot and average gross profit of over $30,500 per lot

Sold 220 acres of residential tracts for over $2,800 per acre

Sold 4,616 acres of undeveloped land for $2,190 per acre, principally from a 50% joint venture

Segment Financial Results:



($ in millions)	Q3 2015	Q3 2014	Q2 2015
Segment Revenues	$28.0	$32.4	$39.4
Segment Earnings	$5.2	$16.0	$15.5

Real estate segment earnings declined in third quarter 2015 compared with the prior year principally due to a $7.6 million gain in third quarter 2014 associated with acquisition of our partner's interest in the Eleven multifamily venture, decreased residential lot sales activity and $1.8 million of interest income in third quarter 2014 related to a loan secured by a mixed-use real estate community in Houston. Third quarter 2015 lot sales reflect the impact of construction and inspection delays associated with abnormally wet weather conditions in second quarter 2015. Real estate segment earnings declined in third quarter 2015 compared with second quarter 2015 principally due to lower residential lot sales activity.

Third Quarter 2015 Significant Highlights (Includes Ventures)

Incurred non-cash impairment charges of approximately ($81) million related to proved properties and unproved leasehold interests, principally in North Dakota, Nebraska and Kansas, primarily due to the continued decline in oil and gas prices

Reduced operating expenses by approximately 36% compared with third quarter 2014

Generated over $11 million in proceeds from the sale of approximately 240 net mineral acres in the Bakken/Three Forks and 9,700 net mineral acres in Oklahoma, and 27 gross / 4 net producing wells

Segment Financial Results:



($ in millions)	Q3 2015	Q3 2014	Q2 2015
Segment Revenues	$13.5	$24.1	$16.2
Segment Earnings (Loss)	($86.2)	$6.0	($56.9)

“Through the successful execution of our initiatives to significantly reduce costs and capital expenditures, the oil and gas segment generated over $18 million in positive cash flow in third quarter 2015, including $11 million from non-core asset sales, compared with ($4) million in negative cash flow in third quarter 2014. Going forward, our oil and gas segment is positioned to generate positive cash flow at third quarter-end 2015 commodity prices,” concluded Mr. Weber.

Oil and gas segment results decreased in third quarter 2015 compared with third quarter 2014 and second quarter 2015 principally due to non-cash asset impairment charges of ($81) million, of which ($65) million is related to proved properties and ($16) million is related to unproved leasehold interests, principally due to the continued decline in oil and gas prices. Total oil and liquids production increased 18% in third quarter 2015 compared with third quarter 2014, driven by new wells commencing production in the Bakken / Three Forks formations in North Dakota. In addition, total oil and gas segment operating expenses were down approximately 36% in third quarter 2015 compared with third quarter 2014, principally due to lower staffing costs and initiatives to reduce oil and gas operating expenses. Second quarter 2015 oil and gas segment results include approximately ($57) million in non-cash charges principally related to impairment of proved properties and unproved leasehold interests and exploratory dry hole costs.

OTHER NATURAL RESOURCES

Third Quarter 2015 Significant Highlights (Includes Ventures)

Sold over 60,000 tons of fiber for $12.41 per ton

97,000 acres under lease for recreational purposes at $8.93 per acre

Segment Financial Results:



($ in millions)	Q3 2015	Q3 2014	Q2 2015
Segment Revenues	$1.7	$2.3	$1.9
Segment Earnings (Loss)	($0.1)	$0.7	($0.0)

Third quarter 2015 other natural resources segment results decreased compared with prior year principally due to lower fiber sales and almost $0.4 million in earnings in third quarter 2014 associated with a groundwater reservation agreement and gain on sale of water rights related to a real estate project in Colorado. Third quarter 2015 other natural resources segment results decreased compared with second quarter 2015 principally due to lower fiber pricing.

Forestar Target Residential Housing Markets Supported by Favorable Fundamentals

“Residential real estate market conditions continue to reflect relatively stable supply and demand fundamentals in our target markets. Despite a slowdown in job growth in Houston, lower housing and finished lot inventories are driving steady demand for our communities which are principally focused on first and second move-up markets, the largest segments of the new home construction market. With stable market demand for our communities and over 1,440 lots currently under option contracts with builders, the company anticipates lot sales in 2015 to be in the range of 1,400 - 1,600 lots.”

“Multifamily market conditions remain solid in our target markets, and our Midtown Cedar Hill multifamily project near Dallas is currently under contract and expected to close by year-end. Going forward, we will continue to strategically invest in multifamily development opportunities, principally located in urban core and other strong sub-markets where the company can achieve attractive risk-adjusted returns.”

Significantly Lower Costs and Focus on Core Residential Housing Development Business

“We are focused on executing our core residential housing development business. In addition, we have restructured our oil and gas business by significantly lowering operating expenses and reducing capital expenditures to generate positive cash flow at third quarter-end 2015 commodity pricing. We are also evaluating our entire portfolio of assets and expect to further reduce corporate and other segment operating expenses as we align the company’s cost structure with our core real estate businesses to maximize long-term shareholder value,” said Mr. Weber.

Chief Real Estate Officer Planning 2016 Retirement

The Company also announced today that Bruce Dickson, Chief Real Estate Officer, plans to retire on March 31, 2016. “We thank Bruce for his outstanding leadership of our real estate segment since 2011, and for his many other contributions to Forestar. We wish Bruce the very best following his retirement next year,” concluded Mr. Weber.

The Company will host a conference call on November 4, 2015 at 10:00 am ET to discuss results of third quarter 2015. The meeting may be accessed through webcast or by conference call. The webcast may be accessed through Forestar’s Internet site at www.forestargroup.com. To access the conference call, listeners calling from North America should dial 1-855-546-9555 at least 15 minutes prior to the start of the meeting. Those wishing to access the call from outside North America should dial 1-412-455-6094. The password is Forestar. Replays of the call will be available for two weeks following the completion of the live call and can be accessed at 1-855-859-2056 in North America and at 1-404-537-3406 outside North America. The password for the replay is 56791336.

About Forestar Group

Forestar Group Inc. operates in three business segments: real estate, oil and gas and other natural resources. At third quarter-end 2015, the real estate segment owns directly or through ventures 106,000 acres of real estate located in 12 states and 15 markets in the U.S. The real estate segment has 11 real estate projects representing approximately 24,400 acres currently in the entitlement process, and 80 entitled, developed and under development projects in 11 states and 14 markets encompassing 10,700 acres, comprised of 17,400 planned residential lots and approximately 1,900 commercial acres. The oil and gas segment includes approximately 914,000 net acres of oil and gas mineral interests, with approximately 590,000 acres of fee ownership located principally in Texas, Louisiana, Georgia, and Alabama, and approximately 324,000 net acres of leasehold interests principally located in Nebraska, Kansas, Oklahoma, North Dakota and Texas. These leasehold interests include about 9,000 net mineral acres in the core of the prolific Bakken and Three Forks formations. The other natural resources segment includes sale of wood fiber and management of our recreational leases, and approximately 1.5 million acres of groundwater resources, including a 45% nonparticipating royalty interest in groundwater rights on approximately 1.4 million surface acres in Texas, Louisiana, Georgia and Alabama and groundwater production from leases on about 20,000 surface acres in central Texas. Forestar’s address on the World Wide Web is www.forestargroup.com.

Forward Looking Statements

This release contains “forward-looking statements” within the meaning of the federal securities laws. Forward-looking statements are typically identified by words or phrases such as “will,” “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “target,” “forecast,” and other words and terms of similar meaning. These statements reflect management’s current views with respect to future events and are subject to risk and uncertainties. We note that a variety of factors and uncertainties could cause our actual results to differ significantly from the results discussed in the forward-looking statements, including but not limited to: general economic, market, or business conditions; changes in commodity prices; opportunities (or lack thereof) that may be presented to us and that we may pursue; fluctuations in costs and expenses including development costs; demand for new housing, including impacts from mortgage credit rates or availability; lengthy and uncertain entitlement processes; cyclicality of our businesses; accuracy of accounting assumptions; competitive actions by other companies; changes in laws or regulations; and other factors, many of which are beyond our control. Except as required by law, we expressly disclaim any obligation to publicly revise any forward-looking statements contained in this news release to reflect the occurrence of events after the date of this news release.



	Third Quarter						First Nine Months
	2015			2014			2015			2014
	(In thousands)
Revenues:
Real estate	$	27,957		$	32,445		$	100,196		$	153,098
Oil and gas	13,485			24,145			42,835			66,076
Other natural resources	1,726			2,250			5,372			7,284
Total revenues	$	43,168		$	58,840		$	148,403		$	226,458
Segment earnings (loss):
Real estate	$	5,154		$	15,987		$	29,747		$	66,859
Oil and gas	(86,192		)	6,002			(146,000		)	16,331
Other natural resources	(77		)	669			(511		)	2,220
Total segment earnings (loss)	(81,115		)	22,658			(116,764		)	85,410
Items not allocated to segments:
General and administrative expense	(8,343		)	(5,190		)	(19,540		)	(15,924		)
Share-based and long-term incentive compensation expense	(2,245		)	(991		)	(5,726		)	(4,523		)
Interest expense	(8,315		)	(8,634		)	(25,851		)	(21,507		)
Other corporate non-operating income	38			139			133			391
Income (loss) before taxes	(99,980		)	7,982			(167,748		)	43,847
Income tax (expense) benefit ^(a)	(64,236		)	(2,755		)	(39,133		)	(15,464		)
Net income (loss) attributable to Forestar Group Inc.	$	(164,216	)	$	5,227		$	(206,881	)	$	28,383

Net income (loss) per common share:
Diluted	$	(4.79	)	$	0.12		$	(6.04	)	$	0.65

Weighted average common shares outstanding (in millions):
Diluted ^(b)	34.3			43.9			34.2			43.8



	Third Quarter
Supplemental Financial Information:	2015		2014
	(In thousands)
Cash and cash equivalents	$	92,640	$	170,606

Senior secured notes	250,000		250,000
Convertible senior notes, net of discount	105,672		102,368
Tangible equity unit notes, net of discount	10,899		19,192
Other debt ^(c)	68,724		57,735
Total debt	$	435,295	$	429,295
Net debt	$	342,655	$	258,689

_____________________

Income tax provision for third quarter 2015 was ($64.2) million which includes a ($98.9) million valuation allowance for our deferred tax asset and is net of an income tax benefit of $34.7 million associated with our third quarter 2015 pre-tax losses.

Weighted average diluted shares outstanding during third quarter and first nine months 2015 exclude 7.9 million shares associated with tangible equity units issued during fourth quarter 2013. The actual number of shares to be issued in December 2016 will be between 6.5 million - 7.9 million shares based on the market value of our stock. Weighted average diluted shares outstanding during third quarter and first nine months 2014 includes 7.9 million shares associated with tangible equity units issued during fourth quarter 2013.

Other debt for third quarter-end 2015 consists principally of $48.1 million in senior secured loans for two multifamily properties, and excludes unconsolidated venture debt and outstanding letters of credit of approximately $144.0 million and $16.2 million, respectively.



	Third Quarter				First Nine Months
	2015		2014		2015		2014
REAL ESTATE
Owned, Consolidated & Equity Method Ventures:
Residential Lots Sold	301		323		1,109		1,834
Revenue per Lot Sold	$	76,623	$	73,653	$	75,019	$	54,354
Commercial Acres Sold	3		4		56		7
Revenue per Commercial Acre Sold	$	28,037	$	589,203	$	216,997	$	369,874
Undeveloped Acres Sold	4,616		637		6,595		13,174
Revenue per Acre Sold	$	2,190	$	3,179	$	2,411	$	2,249
Owned & Consolidated Ventures:
Residential Lots Sold	186		286		699		1,603
Revenue per Lot Sold	$	76,232	$	72,352	$	73,287	$	52,052
Commercial Acres Sold	3		—		27		3
Revenue per Commercial Acre Sold	$	28,037	$	—	$	109,802	$	96,774
Undeveloped Acres Sold	744		637		2,378		12,916
Revenue per Acre Sold	$	2,900	$	3,179	$	2,911	$	2,248
Ventures Accounted For Using the Equity Method:
Residential Lots Sold	115		37		410		231
Revenue per Lot Sold	$	77,256	$	83,711	$	77,973	$	70,325
Commercial Acres Sold	—		4		29		4
Revenue per Commercial Acre Sold	$	—	$	589,203	$	311,995	$	589,203
Undeveloped Acres Sold	3,872		—		4,217		258
Revenue per Acre Sold	$	2,053	$	—	$	2,129	$	2,306

REAL ESTATE PIPELINE



Real Estate	Entitled Acres	Developed & Under Development Acres	Total Acres ^(a)
Residential
Owned	6,902	653
Ventures	1,075	157	8,787
Commercial
Owned	1,065	525
Ventures	210	103	1,903
Total Acres	9,252	1,438	10,690

Estimated Residential Lots	14,930	2,437	17,367

_____________________

Excludes acres associated with commercial and income producing properties, 70,769 undeveloped timberland acres and 24,430 acres in the entitlement process.

PROJECTS IN ENTITLEMENT

A summary of our real estate projects in the entitlement process ^(a) at third quarter-end 2015 follows:



Project	County	Market	Project Acres ^(b)
California
Hidden Creek Estates	Los Angeles	Los Angeles	700
Terrace at Hidden Hills	Los Angeles	Los Angeles	30

Georgia
Ball Ground	Cherokee	Atlanta	500
Crossing	Coweta	Atlanta	230
Fincher Road	Cherokee	Atlanta	3,890
Garland Mountain	Cherokee/Bartow	Atlanta	350
Martin’s Bridge	Banks	Atlanta	970
Mill Creek	Coweta	Atlanta	770
Wolf Creek	Carroll/Douglas	Atlanta	12,230
Yellow Creek	Cherokee	Atlanta	1,060

Texas
Lake Houston	Harris/Liberty	Houston	3,700
Total			24,430

_____________________

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.

Project acres, which are the total for the project regardless of our ownership interest, are approximate. The actual number of acres entitled may vary.

REAL ESTATE PROJECTS

A summary of activity within our projects in the development process, which includes entitled ^(a), developed and under development real estate projects, at third quarter-end 2015 follows:



				Residential Lots ^(c)		Commercial Acres ^(d)
Project	County	Interest Owned ^(b)		Lots Sold Since Inception	Lots Remaining	Acres Sold Since Inception	Acres Remaining^(e)
Projects we own
California
San Joaquin River	Contra Costa/Sacramento	100	%	—	—	—	288
Colorado
Buffalo Highlands	Weld	100	%	—	164	—	—
Johnstown Farms	Weld	100	%	281	313	2	3
Pinery West	Douglas	100	%	86	—	20	106
Stonebraker	Weld	100	%	—	603	—	—
Georgia
Seven Hills	Paulding	100	%	843	240	26	113
The Villages at Burt Creek	Dawson	100	%	—	1,715	—	57
West Oaks	Cobb	100	%	—	57	—	—
Other projects (17)	Various	100	%	245	2,258	—	695
North & South Carolina
Habersham	York	100	%	20	167	—	—
Walden	Mecklenburg	100	%	—	387	—	—
Tennessee
Beckwith Crossing	Wilson	100	%	—	99	—	—
Morgan Farms	Williamson	100	%	86	87	—	—
Scales	Williamson	100	%	—	87	—	—
Weatherford Estates	Williamson	100	%	—	17	—	—
Texas
Arrowhead Ranch	Hays	100	%	—	381	—	11
Bar C Ranch	Tarrant	100	%	366	739	—	—
Barrington Kingwood	Harris	100	%	170	10	—	—
Cibolo Canyons	Bexar	100	%	954	815	130	56
Harbor Lakes	Hood	100	%	231	—	21	—
Hunter’s Crossing	Bastrop	100	%	510	—	54	49
Imperial Forest	Harris	100	%	—	428	—	—
La Conterra	Williamson	100	%	202	—	3	55
Lakes of Prosper	Collin	100	%	151	136	4	—
Lantana	Denton	100	%	1,220	544	14	—
Maxwell Creek	Collin	100	%	941	60	10	—
Oak Creek Estates	Comal	100	%	273	281	13	—
Parkside	Collin	100	%	8	192	—	—
River's Edge	Denton	100	%	—	202	—	—
Stoney Creek	Dallas	100	%	231	477	—	—
Summer Creek Ranch	Tarrant	100	%	983	268	35	44
Summer Lakes	Fort Bend	100	%	675	394	56	—



				Residential Lots ^(c)		Commercial Acres ^(d)
Project	County	Interest Owned ^(b)		Lots Sold Since Inception	Lots Remaining	Acres Sold Since Inception	Acres Remaining^(e)
Summer Park	Fort Bend	100	%	69	130	28	68
The Colony	Bastrop	100	%	455	1,430	22	31
The Preserve at Pecan Creek	Denton	100	%	587	195	—	7
Village Park	Collin	100	%	567	—	3	2
Westside at Buttercup Creek	Williamson	100	%	1,496	1	66	—
Other projects (7)	Various	100	%	1,566	20	135	5
Other
Other projects (2)	Various	100	%	543	320	—	—
				13,759	13,217	642	1,590
Projects in entities we consolidate
Texas
City Park	Harris	75	%	1,311	504	52	113
Timber Creek	Collin	88	%	—	601	—	—
Willow Creek Farms II	Waller/Fort Bend	90	%	90	175	—	—
Other projects (2)	Various	Various		10	198	—	18
				1,411	1,478	52	131
Total owned and consolidated				15,170	14,695	694	1,721
Projects in ventures that we account for using the equity method
Texas
Entrada	Travis	50	%	—	821	—	—
Fannin Farms West	Tarrant	50	%	324	—	—	—
Harper’s Preserve	Montgomery	50	%	513	1,215	30	49
Lantana - Rayzor Ranch	Denton	25	%	1,163	—	50	—
Long Meadow Farms	Fort Bend	38	%	1,514	290	187	118
Southern Trails	Brazoria	80	%	870	126	1	—
Stonewall Estates	Bexar	50	%	363	27	—	—
Other projects (7)	Various	Various		—	193	—	15
Total in ventures				4,747	2,672	268	182
Combined total				19,917	17,367	962	1,903

_____________________

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.

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.

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.

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.

Excludes acres associated with commercial and income producing properties.

A summary of our significant commercial and multifamily properties at third quarter-end 2015 follows:

Project

Market

Interest

Owned ^(a)

Type

Acres

Description

Radisson Hotel

Austin

100

Hotel

413 guest rooms and suites

Dillon ^(b)

Charlotte

100

Multifamily

379-unit luxury apartment

Eleven

Austin

100

Multifamily

257-unit luxury apartment

Midtown

Dallas

100

Multifamily

354-unit luxury apartment

Music Row ^(b)

Nashville

100

Multifamily

230-unit luxury apartment

Elan 99 ^(b)

Houston

Multifamily

360-unit luxury apartment

Acklen ^(b)

Nashville

Multifamily

320-unit luxury apartment

HiLine ^(b)

Denver

Multifamily

385-unit luxury apartment

360° ^(b)

Denver

Multifamily

304-unit luxury apartment

_____________________

Interest owned reflects our total interest in the project, whether owned directly or indirectly.

Construction in progress.



	Third Quarter				First Nine Months
	2015		2014		2015		2014
Leasing Activity from Owned Mineral Interests
Acres Leased	1,720		744		3,343		3,865
Average Bonus / Acre	$	291	$	205	$	298	$	320
Delay Rentals Received	$	98,000	$	—	$	182,000	$	14,000
Oil & Gas Production
Royalty Interests ^(a)
Gross Wells (at end of the period)	533		547		533		547
Oil Production (Barrels) ^(b)	31,800		32,900		102,600		96,000
Average Oil Price ($ / Barrel)	$	45.92	$	91.08	$	47.81	$	89.34
Natural Gas Production (MMcf)	258.3		273.5		775.3		792.0
Average Natural Gas Price ($ / Mcf)	$	2.45	$	4.35	$	2.82	$	4.18
BOE Production ^(c)	74,800		78,500		231,800		228,000
Average Price ($ / BOE)	$	27.94	$	53.30	$	30.60	$	52.15
Working Interests
Gross Wells (at end of the period)	413		447		413		447
Oil Production (Barrels) ^(b)	277,500		229,100		789,500		575,300
Average Oil Price ($ / Barrel)	$	36.87	$	83.17	$	41.23	$	87.74
Natural Gas Production (MMcf)	293.5		226.2		855.9		654.1
Average Natural Gas Price ($ / Mcf)	$	2.20	$	4.12	$	2.60	$	4.59
BOE Production ^(c)	326,400		266,900		932,100		684,400
Average Price ($ / BOE)	$	33.32	$	74.91	$	37.31	$	78.15
Total Oil & Gas Interests
Gross Wells ^(d)(at end of the period)	914		961		914		961
Oil Production (Barrels) ^(b)	309,300		262,000		892,100		671,300
Average Oil Price ($ / Barrel)	$	37.80	$	84.16	$	41.98	$	87.97
Natural Gas Production (MMcf)	551.8		499.7		1,631.2		1,446.1
Average Natural Gas Price ($ / Mcf)	$	2.31	$	4.24	$	2.71	$	4.37
BOE Production ^(c)	401,200		345,400		1,163,900		912,400
Average Price ($ / BOE)	$	32.32	$	70.00	$	35.97	$	71.65
Average Daily Production
BOE per Day
Royalty Interests	813		853		849		835
Working Interests	3,548		2,901		3,414		2,507
Total	4,361		3,754		4,263		3,342
Working Interests BOE per Day
North Dakota	2,589		1,664		2,318		1,347
Kansas/Nebraska	476		707		563		610
Texas, Louisiana and Other	483		530		533		550
Total	3,548		2,901		3,414		2,507

_____________________

Includes our share of venture activity of which we own a 50% interest. Our share of natural gas production was 46.8 MMcf and 129.2 MMcf in the third quarter and first nine months of 2015 and 49.1 MMcf and 152.3 MMcf in the third quarter and first nine months of 2014.

Oil production includes natural gas liquids (NGLs).

BOE – Barrels of oil equivalent (converting natural gas to oil at 6 Mcfe / Bbl).

Represent wells in which we own a royalty or working interest in a producing well. Includes wells operated by third-party lessees/operators. Excludes 31 and 33 working interest wells at third quarter-end 2015 and third quarter-end 2014, as we also own a royalty interest in these wells.



	Third Quarter		First Nine Months
	2015	2014	2015	2014
Well Activity
Mineral Interests Owned ^(a)
Net Acres Held By Production	36,000	36,000	36,000	36,000
Productive Gross Wells	532	547	532	547
Mineral Interests Leased
Net Acres Held By Production ^(b)	45,000	46,000	45,000	46,000
Gross Wells Drilled	7	31	38	97
Productive Gross Wells ^(c)	382	414	382	414
Total Well Activity
Net Acres Held By Production	81,000	82,000	81,000	82,000
Gross Wells Drilled	7	31	38	97
Productive Gross Wells	914	961	914	961

_____________________

Represent wells in which we own a royalty or working interest in a producing well. Includes wells operated by third-party lessees/operators.

Excludes approximately 8,000 net acres in which we have an overriding royalty interest.

Excludes approximately 1,200 wells in which we have an overriding royalty, and 31 and 33 working interest wells at third quarter-end 2015 and third quarter-end 2014, as we also own a royalty interest in these wells.

OTHER NATURAL RESOURCES SEGMENT



	Third Quarter				First Nine Months
	2015		2014		2015		2014
Fiber Sales
Pulpwood tons sold	45,600		71,500		109,100		157,900
Average pulpwood price per ton	$	9.89	$	11.18	$	9.41	$	11.00
Sawtimber tons sold	14,400		21,500		53,800		100,000
Average sawtimber price per ton	$	20.41	$	21.31	$	21.22	$	22.38

Total tons sold	60,000		93,000		162,900		257,900
Average stumpage price per ton ^(a)	$	12.41	$	13.52	$	13.31	$	15.41

Recreational Activity
Average recreational acres leased	97,000		107,800		99,900		111,400
Average price per leased acre	$	8.93	$	8.66	$	9.18	$	9.17

_____________________

Average stumpage price per ton is based on gross revenues less cut and haul costs.

CALCULATION OF NON-GAAP FINANCIAL MEASURES

In our third quarter and first nine months 2015 earnings release and conference call presentation materials furnished to the Securities and Exchange Commission on Form 8-K on November 4, 2015, we used certain non-GAAP financial measures. The non-GAAP financial measures should not be relied upon to the exclusion of GAAP financial measures. These non-GAAP financial measures reflect an additional way of viewing aspects of our operations that, when viewed with our GAAP financial statements and the accompanying reconciliations to corresponding GAAP financial measures, may provide a more complete understanding of our business. We strongly encourage investors to review our consolidated financial statements and publicly filed reports in their entirety.

Reconciliation of Non-GAAP Financial Measures (Unaudited)

The following table shows a reconciliation of net income before special items and earnings per share excluding special items to net income and earnings per share (the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles, or GAAP). Net income excluding special items and earnings per share excluding special items are useful to evaluate the performance of the company because it excludes non-recurring non-cash impairments and other costs, which management believes are not indicative of the ongoing operating results of the business. A reconciliation of net income and earnings per share excluding special items to net income and earnings per share as computed under GAAP is illustrated below:



	Third Quarter					First Nine Months
	2015			2014		2015			2014
	(In millions, except share data)

Net income (loss) - as reported		($164.2	)		$5.2		($206.9	)		$28.4
Net income (loss) per share - as reported		($4.79	)		$0.12		($6.04	)		$0.65

Special items:
Deferred tax asset valuation allowance	98.9			—		98.9			—
Proved property impairments - oil & gas	42.5			—		58.8			—
Unproved leasehold interest impairments - oil & gas	10.3			—		23.8			—
Exploratory dry hole expense and other charges	—			—		6.9			—
Severance related charges	2.2			—		2.2			—
Total special items (after-tax)		$153.9			$—		$190.6			$—
Total special items per share (after-tax)		$4.48			$—		$5.57			$—

Net income (loss) - excluding special items		($10.3	)		$5.2		($16.3	)		$28.4
Net Income (loss) per share - excluding special items		($0.31	)		$0.12		($0.47	)		$0.65

Third Quarter 2015 Financial Results November 4, 2015 Exhibit 99.2

Notice to Investors This presentation contains “forward-looking statements” within the meaning of the federal securities laws. Forward-looking statements are typically identified by words or phrases such as “will,” “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “target,” “forecast,” and other words and terms of similar meaning. These statements reflect management’s current views with respect to future events and are subject to risk and uncertainties. We note that a variety of factors and uncertainties could cause our actual results to differ significantly from the results discussed in the forward-looking statements, including but not limited to: general economic, market, or business conditions; changes in commodity prices; opportunities (or lack thereof) that may be presented to us and that we may pursue; fluctuations in costs and expenses including development costs; demand for new housing, including impacts from mortgage credit rates or availability; lengthy and uncertain entitlement processes; cyclicality of our businesses; accuracy of accounting assumptions; competitive actions by other companies; changes in laws or regulations; and other factors, many of which are beyond our control. Except as required by law, we expressly disclaim any obligation to publicly revise any forward-looking statements contained in this presentation to reflect the occurrence of events after the date of this presentation. This presentation includes Non-GAAP ﬁnancial measures. The required reconciliation to GAAP ﬁnancial measures can be found as an exhibit to this presentation and on our website at www.forestargroup.com. 2

Initiatives Reducing Costs Across the Entire Organization • Taking actions to eliminate over $13 million of G&A and segment operating expenses in 2016 vs 2015, an estimated 22% cost reduction • Additional cost reductions to be identified across organization Reviewing Entire Portfolio of Assets • Core residential housing assets• Non-core, non-residential housing assets Reviewing Capital Structure • Evaluating capital structure Reviewing Additional Disclosures • Reviewing additional disclosures Focusing Forestar on Residential Housing Development 3 Tremendous Changes Underway at Forestar

Third Quarter 2015 Results Impacted By Deferred Tax Asset Valuation Allowance and Impairment Charges Principally Related To Non-Core Oil and Gas Assets 4 ($ in Millions, except per share data) Q3 2015 Q3 2014 Net Income (Loss) - As Reported ($164.2) $5.2 Net Income (Loss) Per Share - As Reported ($4.79) $0.12 Special Items: Deferred Tax Asset Valuation Allowance 98.9 -- Proved Property Impairments – Oil & Gas 42.5 -- Unproved Leasehold Interest Impairments – Oil & Gas 10.3 -- Severance Related Charges 2.2 -- Total Special Items (After-Tax) $153.9 -- Net Income (Loss) – Excluding Special Items* ($10.3) $5.2 Net Income (Loss) Per Share – Excluding Special Items* ($0.31) $0.12 • Q3 2015 financial results include non-cash charges of ($52.8) million, or ($1.54) per share, after-tax, primarily associated with impairment of proved properties and unproved leasehold interests associated with non-core oil and gas assets principally in North Dakota, Nebraska and Kansas • Q3 2015 financial results include a deferred tax asset valuation allowance of ($98.9) million, or ($2.88) per share, as a result of cumulative net losses incurred over the three-year period ending September 30, 2015 primarily due to non-cash asset impairment charges related to the oil and gas segment *Reconciliation to GAAP can be found in the appendix to this presentation Note: Weighted average diluted shares outstanding were 34.3 million in Q3 2015 and 43.9 million in Q3 2014 (Q3 2015 diluted shares outstanding exclude 7.9 million shares associated with tangible equity units issued during Q4 2013)

Segment Results Adversely Impacted By Impairment Charges Related to Non-Core Oil & Gas Assets 5 ($ in Millions, except per share data) Q3 2015 As Reported Q3 2015 Excluding Special Items* Q3 2014 As Reported Segment Earnings (Loss) Real Estate $5.2 $5.2 $16.0 Oil and Gas (86.2) (5.0) 6.0 Other Natural Resources (0.1) (0.1) 0.7 Total Segment Earnings (Loss) ($81.1) $0.1 $22.7 • Q3 2014 real estate segment results include a gain of $7.6 million, pre-tax, associated with acquisition of our partner’s interest in the Eleven multifamily venture in Austin • Q3 2015 oil and gas segment results include non-cash charges of ($81.2) million, pre-tax, principally associated with impairment of proved properties and unproved leasehold interests associated with non-core oil and gas assets principally in North Dakota, Nebraska and Kansas * Reconciliation to GAAP can be found in the appendix to this presentation.

Stable Market Demand in Texas with Construction and Inspection Delays Impacting Lot Sales Timing 6 Texas New Home Inventory Below Equilibrium 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 0 5,000 10,000 15,000 20,000 25,000 30,000 1Q01 1Q02 1Q03 1Q04 1Q05 1Q06 1Q07 1Q08 1Q09 1Q10 1Q11 1Q12 1Q13 1Q14 1Q15 Housing Inventory Months of Supply Equilibrium M on th s of S up pl y Ne w Ho m e In ve nt or ie s Note: Includes ventures Source: Metrostudy and Bureau of Labor Statistics September 2015 vs. September 2014 Austin 3.2% Dallas / Fort Worth 3.2% Houston 1.2% San Antonio 3.7% U.S. Average 2.0% Texas Job Growth vs. National Average • 2015 total lot sales expected to be in the range of 1,400 – 1,600 lots, primarily due to construction and inspection delays 0 500 1,000 1,500 2,000 Q 11 2 Q 21 2 Q 31 2 Q 41 2 Q 11 3 Q 21 3 Q 31 3 Q 41 3 Q 11 4 Q 21 4 Q 31 4 Q 41 4 Q 11 5 Q 21 5 Q 31 5 Re sid en tia l L ot s Developed Lots Lots Under Development Forestar: > 1,440 Lots Under Option Contract

Pipeline of Well Located Class A Multifamily Communities Multifamily Development Projects – Q3 2015 ($ in millions) Project Market FOR Ownership Units % Complete Projected Total Development Cost* Projected Total FOR Contribution* Co m pl et e Eleven Austin 100% 257 100% $40 $25 Midtown Dallas 100% 354 100% 35 11 Un de r C on st ru ct io n 360° Denver 20% 304 99% 56 – 57 4 Acklen Nashville 30% 320 99% 58 – 59 6 HiLine Denver 25% 385 ~45% 71 – 73 6 – 7 Elan 99** Houston 90% 360 ~40% 53 – 55 13 – 14 Music Row Nashville 100% 230 <1% 47 – 48 16 – 17 Dillon Charlotte 100% 379 <3% 81 – 83 28 – 30 69% 2,589 Downtown Edge Austin TBD 234 n/a $48 – 50 TBD Note: Forestar acquired partner’s 75% interest in Eleven venture for $21.5 million in Q3 2014 * Based on estimates, actual results may vary **FOR is limited partner and not developer of this project 7 Po te nt ia l De ve lo pm en t Si te

Third Quarter 2014 Non-Cash Gains and Lot Closing Delays Impact Year-Over-Year Real Estate Results ($7.2) ($2.5) $16.0 $1.6 $1.0 $0.2 ($2.2) ($1.7) $5.2 $0 $10 $20 Q3 2014 Multifamily and Income Producing Properties Residential & Commercial Tract Sales Undeveloped Land Sales Gains* Lot Sales Operating Expenses Interest Income Q3 2015 Segment Earnings Reconciliation Q3 2014 vs. Q3 2015 ($ in millions) Q3 2015 Highlights Residential Lots – 301 lots sold • >$76,600 avg. price per lot - up >4% vs Q3 2014 • ~$30,600 gross profit per lot - down >12% vs Q3 2014, due to mix of lots sold Residential Tracts – 220 acres sold • >$2,800 average price per acre Undeveloped Land – 4,616 acres sold, principally from 50% joint-venture • $2,200 average price per acre • ~$3.0 million in segment earnings 10 Note: Includes ventures *Includes $7.6 million gain in Q3 2014 associated with the acquisition of our partner’s 75% interest in the Eleven multifamily venture in Austin for $21.5 million reflecting the fair market value of the project on the date of acquisition. Includes $0.4 million gain in Q3 2015 related to proceeds from Cibolo hotel and occupancy receipts

Real Estate Segment KPI’s Q3 2015 Q3 2014 YTD Q3 2015 YTD Q3 2014 Residential Lot Sales Lots Sold 301 323 1,109 1,834 Average Price / Lot* $76,600 $73,700 $75,000 $54,400 Gross Profit / Lot* $30,600 $34,900 $34,200 $22,800 Commercial Tract Sales Acres Sold 3 4 56 7 Average Price / Acre $28,000 $589,200 $217,000 $369,900 Undeveloped Land Sales Acres Sold 4,616 637 6,595 13,174 Average Price / Acre $2,200 $3,200 $2,400 $2,200 Segment Revenues ($ in Millions) $28.0 $32.4 $100.2 $153.1 Segment Earnings ($ in Millions) $5.2 $16.0 $29.7 $66.9 YTD Q3 2014 average sales price was approximately $64,600 per lot and average gross profit was approximately $28,000 per lot, excluding almost 370 bulk lot sales. Q3 2014 and YTD Q3 2014 real estate segment results include a 7.6 million gain associated with the purchase of our partner’s 75% interest in Eleven, an Austin multifamily project. YTD Q3 2014 results also include a $10.5 million gain associated with a non-monetary exchange of leasehold timber rights for 5,400 acres of undeveloped land with a partner in a consolidated venture. Note: Includes ventures 11 **** ** * * *

Harvesting Value From Timberland Segment Earnings (Loss) Reconciliation Q3 2014 vs. Q3 2015 ($ in millions) $0.7 ($0.5) ($0.2) ($0.2) $0.1 ($0.1) ($0.5) $0.0 $0.5 $1.0 Q3 2014 Operating Costs Fiber Earnings Gain on Timber Lease Termination Water Earnings Q3 2015 Se gm en t E ar ni ng s (L os s) Q3 2015 Highlights • Sold > 60,000 tons of fiber, 35% lower vs. Q3 2014 due to reduced harvest schedules • Average fiber pricing $12.41 per ton, down 8% vs. Q3 2014 due to lower pulpwood and sawtimber pricing 12Note: Includes ventures Note: Q3 2014 segment results include $0.2 million gain associated with the sale of water rights related to a real estate project in Colorado

Other Natural Resources Segment KPI’s Q3 2015 Q3 2014 YTD Q3 2015 YTD Q3 2014 Fiber Sales Pulpwood Tons Sold 45,600 71,500 109,100 157,900 Average Pulpwood Price / Ton $9.89 $11.18 $9.41 $11.00 Sawtimber Tons Sold 14,400 21,500 53,800 100,000 Average Sawtimber Price / Ton $20.41 $21.31 $21.22 $22.38 Total Tons Sold 60,000 93,000 162,900 257,900 Average Price / Ton $12.41 $13.52 $13.31 $15.41 Recreational Leases Average Acres Leased 97,000 107,800 99,900 111,400 Average Lease Rate / Acre $8.93 $8.66 $9.18 $9.17 Segment Revenues ($ in Millions) $1.7 $2.3 $5.4 $7.3 Segment Earnings (Loss) ($ in Millions) * ($0.1) $0.7 ($0.5) $2.2 * Note: Segment results include costs of $0.6 million in Q3 2015, $0.5 million in Q3 2014, $2.2 million in YTD Q3 2015 and $2.6 million in YTD Q3 2014 associated with the development of our water initiatives. ** Q3 2014 and YTD Q3 2014 results include earnings of $0.2 million associated with sale of water rights associated with a real estate project in Colorado and a $0.7 million gain on termination ofatimber lease in connection with the Ironstob venture 13 ** **

Continued Declining Oil Price Negatively Impact Oil & Gas Results $6.0 $1.2 $4.2 ($5.5) ($1.5) ($5.0) ($13.4) ($10) ($5) $0 $5 $10 $15 $20 Q3 2014 Exploratroy Dry Hole Costs Working Interest Volume Operating Expenses Working Interest Cost of Sales Working Interest Pricing Gain on Sale Legacy Minerals Q3 2015 (Exluding Non-Cash Impairments) Se gm en t E ar ni ng s (L os s) $0.4 $3.6 Segment Earnings (Loss) Reconciliation Q3 2014 vs. Q3 2015 ($ in millions) Q3 2015 Highlights • Incurred non-cash impairment charges of ($81.2) million • Principally related to proved properties and unproved leasehold interests in North Dakota, Nebraska and Kansas • Oil production up >18% vs. Q3 2014** • Avg. working interest oil price down nearly 56% vs. Q3 2014** • Segment G&A expenses down 36% in Q3 2015 vs. Q3 2014 • Generated positive cash flow Q3 2015 vs Q3 2014 • Generated approximately $18.4 million in net cash flow in Q3 2015, including approximately $10.6 million from non-core asset sales, compared with ($4) million negative cash flow in Q3 2014 14 * Q3 2015 non-cash charges Include ($81.2) million principally associated with proved property and unproved leasehold interest impairments, primarily associated with non-core oil and gas assets in North Dakota, Nebraska and Kansas. ** Oil volumes and prices include NGL’s Note: Includes ventures Excluding Non-Cash Impairments

Oil and Gas Segment KPI’s Q3 2015 ** Q3 2014 YTD Q3 2015 ** YTD Q3 2014 Fee Leasing Activity Net Fee Acres Leased 1,720 744 3,343 3,865 Average Bonus / Acre $291 $205 $298 $320 Total Oil and Gas Interests * Oil Produced (Barrels) 278,900 250,500 810,800 632,800 Average Price / Barrel $40.66 $86.13 $44.61 $90.73 NGL Produced (Barrels) 30,400 11,500 81,300 38,500 Average Price / Barrel $11.52 $41.12 $15.80 $42.56 Natural Gas Produced (MMCF) 551.8 499.7 1,631.2 1,446.1 Average Price / MCF $2.31 $4.24 $2.71 $4.37 Total BOE 401,200 345,400 1,163,900 912,400 Average Price / BOE $32.32 $70.00 $35.97 $71.65 Segment Revenues ($ in Millions) $13.5 $24.1 $42.8 $66.1 Segment Earnings (Loss) ($ in Millions) * ($86.2) $6.0 ($146.0) $16.3 Gross Producing Wells (end of period) 914 961 914 961 15 * Includes our share of venture production: 46.8 MMcf in Q3 2015, 49.1 MMcf in Q3 2014, 129.2 MMcf in YTD Q3 2015 and 152.3 MMcf in YTD Q3 2014. ** Q3 2015 oil and gas segment results include approximately $81 million in non-cash charges principally related to impairment of proved properties and leasehold interests associated with non-core oil and gas assets. YTD Q3 2015 oil and gas segment results include approximately $138 million in non-cash charges principally related to impairment of proved properties, leasehold interests and exploratory dry hole costs associated with non-core oil and gas assets, $3.7 million in restructuring costs associated with termination of Fort Worth office lease, retention bonus awards and employee severance costs and ($1.3) million net loss associated with the sale of approximately 27,662 net mineral acres of oil and gas leasehold interests in Nebraska and North Dakota and the disposition of 29 gross (5 net) producing oil and gas wells in Texas, North Dakota, Nebraska, Oklahoma and Colorado for total sale proceeds of $13.1 million.

Reconciliation of Non-GAAP Financial Measures (Unaudited) Forestar’s Segment EBITDA is a non-GAAP financial measure within the meaning of Regulation G of the Securities and Exchange Commission. Non-GAAP financial measures are not in accordance with, or an alternative to, U.S. Generally Accepted Accounting Principles (GAAP). The company believes presenting non-GAAP Segment EBITDA is helpful to analyze financial performance without the impact of items that may obscure trends in the company’s underlying performance. A detailed reconciliation is provided below outlining the differences between these non- GAAP measures and the directly related GAAP measures. Third Quarter Year-to-Date ($ in millions) 2015 2014 2015 2014 Real Estate Segment Earnings in accordance with GAAP $5.2 $16.0 $29.7 $66.9 Depreciation, Depletion & Amortization 2.1 0.7 5.9 2.0 Real Estate Segment EBITDA $7.3 $16.7 $35.6 $68.9 Oil & Gas Segment Earnings (Loss) in accordance with GAAP ($86.2) $6.0 ($146.0) $16.3 Depreciation, Depletion & Amortization 9.2 8.3 24.6 20.7 Oil and Gas Segment EBITDA ($77.0) $14.3 ($121.4) $37.0 Other Natural Resources Segment Earnings (Loss) in accordance with GAAP ($0.1) $0.7 ($0.5) $2.2 Depreciation, Depletion & Amortization 0.1 0.1 0.4 0.4 Other Natural Resources Segment EBITDA $0.0 $0.8 ($0.1) $2.6 Total Segment Total Segment Earnings (Loss) in accordance with GAAP ($81.1) $22.7 ($116.8) $85.4 Depreciation, Depletion & Amortization 11.4 9.1 30.9 23.1 Total Segment EBITDA ($69.7) $31.8 ($85.9) $108.5 16

Reconciliation of Non-GAAP Financial Measures (Unaudited) 17 In our third quarter and first nine months 2015 earnings release and conference call presentation materials furnished to the Securities and Exchange Commission on Form 8-K on November 4, 2015, we used certain non-GAAP financial measures. The non-GAAP financial measures should not be relied upon to the exclusion of GAAP financial measures. These non-GAAP financial measures reflect an additional way of viewing aspects of our operations that, when viewed with our GAAP financial statements and the accompanying reconciliations to corresponding GAAP financial measures, may provide a more complete understanding of our business. We strongly encourage investors to review our consolidated financial statements and publicly filed reports in their entirety. Reconciliation of Non-GAAP Financial Measures (Unaudited) The following table shows a reconciliation of net income before special items and earnings per share excluding special items to net income and earnings per share (the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles, or GAAP). Net income excluding special items and earnings per share excluding special items are useful to evaluate the performance of the company because it excludes non-recurring non-cash impairments and other costs, which management believes are not indicative of the ongoing operating results of the business. A reconciliation of net income and earnings per share excluding special items to net income and earnings per share as computed under GAAP is illustrated below: Third Quarter Year-to-Date ($ in millions except per share data) 2015 2014 2015 2014 Net Income (Loss) – As Reported ($164.2) $5.2 ($206.9) $28.4 Earnings (Loss) Per Share – As Reported ($4.79) $0.12 ($6.04) $0.65 Special Items Proved Property Impairments – oil & gas 42.5 ---- 58.8 ---- Unproved Leasehold Interest Impairments – oil & gas 10.3 ---- 23.8 ---- Exploratory Dry Hole Expense and Other Charges ---- ---- 6.9 ---- Severance-Related Charges 2.2 ---- 2.2 ---- Deferred Tax Asset Valuation Allowance 98.9 ---- 98.9 ---- Total Special Items (after-tax) $153.9 $---- $190.6 $---- Total Special Items Per Share (after-tax) $4.48 $---- $5.57 $---- Net Income (Loss) – Excluding Special Items ($10.3) $5.2 ($16.3) $28.4 Net Income (Loss) Per Share – Excluding Special Items ($0.31) $0.12 ($0.47) $0.65

Reconciliation of Non-GAAP Financial Measures (Unaudited) 18 In our third quarter and first nine months 2015 earnings release and conference call presentation materials furnished to the Securities and Exchange Commission on Form 8-K on November 4, 2015, we used certain non-GAAP financial measures. The non-GAAP financial measures should not be relied upon to the exclusion of GAAP financial measures. These non-GAAP financial measures reflect an additional way of viewing aspects of our operations that, when viewed with our GAAP financial statements and the accompanying reconciliations to corresponding GAAP financial measures, may provide a more complete understanding of our business. We strongly encourage investors to review our consolidated financial statements and publicly filed reports in their entirety. Reconciliation of Non-GAAP Financial Measures (Unaudited) The following table shows a reconciliation of total segment earnings before special items to total segment earnings (the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles, or GAAP). Total segment earnings excluding special items are useful to evaluate the performance of the company because it excludes non-recurring non-cash impairments and other costs, which management believes are not indicative of the ongoing operating results of the business. A reconciliation of total segment earnings excluding special items to total segment earnings as computed under GAAP is illustrated below: Third Quarter Year-to-Date ($ in millions except per share data) 2015 2014 2015 2014 Total Segment Earnings (Loss) – As Reported ($81.1) $22.7 ($116.8) $85.4 Special Items (pre-tax) Proved Property Impairments – oil & gas 65.4 ---- 90.4 ---- Unproved Leasehold Interest Impairments – oil & gas 15.8 ---- 36.8 ---- Exploratory Dry Hole Expense and Other Charges ---- ---- 10.6 ---- Total Special Items (pre-tax) $81.2 $---- $137.8 $---- Total Segment Earnings – Excluding Special Items $0.1 $22.7 $21.0 $85.4

Reconciliation of Non-GAAP Financial Measures (Unaudited) 19 In our third quarter and first nine months 2015 earnings release and conference call presentation materials furnished to the Securities and Exchange Commission on Form 8-K on November 4, 2015, we used certain non-GAAP financial measures. The non-GAAP financial measures should not be relied upon to the exclusion of GAAP financial measures. These non-GAAP financial measures reflect an additional way of viewing aspects of our operations that, when viewed with our GAAP financial statements and the accompanying reconciliations to corresponding GAAP financial measures, may provide a more complete understanding of our business. We strongly encourage investors to review our consolidated financial statements and publicly filed reports in their entirety. Reconciliation of Non-GAAP Financial Measures (Unaudited) The following table shows a reconciliation of total segment earnings before special items to total segment earnings (the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles, or GAAP). Total segment earnings excluding special items are useful to evaluate the performance of the company because it excludes non-recurring non-cash impairments and other costs, which management believes are not indicative of the ongoing operating results of the business. A reconciliation of total segment earnings excluding special items to total segment earnings as computed under GAAP is illustrated below: ($ in millions) Q3 2015 Oil & Gas Segment Earnings (Loss) – As Reported ($86.2) Special Items (pre-tax) Proved Property Impairments – oil & gas 65.4 Unproved Leasehold Interest Impairments – oil & gas 15.8 Total Special Items (pre-tax) $81.2 Oil & Gas Segment Earnings (Loss) – Excluding Special Items ($5.0)


^(a)	Income tax provision for third quarter 2015 was ($64.2) million which includes a ($98.9) million valuation allowance for our deferred tax asset and is net of an income tax benefit of $34.7 million associated with our third quarter 2015 pre-tax losses.


^(c)	Other debt for third quarter-end 2015 consists principally of $48.1 million in senior secured loans for two multifamily properties, and excludes unconsolidated venture debt and outstanding letters of credit of approximately $144.0 million and $16.2 million, respectively.


^(b)	Project acres, which are the total for the project regardless of our ownership interest, are approximate. The actual number of acres entitled may vary.


^(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)	Excludes acres associated with commercial and income producing properties.