8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report: March 1, 2017

(Date of earliest event reported)

FORESTAR GROUP INC.

(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

Austin, Texas 78746

(Address of principal executive offices) (zip code)

(512) 433-5200

(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))

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Item 2.02. Results of Operations and Financial Condition.

On March 1, 2017, Forestar Group Inc. (the “Company”) issued a press release announcing the Company’s results for the quarter and year ended December 31, 2016. A copy of the press release is furnished as Exhibit 99.1 of this report.

Item 7.01. Regulation FD Disclosure.

On March 2, 2017, management of the Company will participate in a conference call discussing the Company’s results for the quarter and year ended December 31, 2016. 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.

(d) Exhibits.

99.1	Press Release, dated March 1, 2017
99.2	Presentation materials to be used by management in a conference call on March 2, 2017, discussing the Company’s results for the quarter and year ended December 31, 2016.

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SIGNATURE

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:	March 1, 2017	By:	/s/ Charles D. Jehl
			Name:	Charles D. Jehl
			Title:	Chief Financial Officer

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EXHIBIT INDEX

Exhibit	Description
99.1	Press Release, dated March 1, 2017
99.2	Presentation materials to be used by management in a conference call on March 2, 2017, discussing the Company’s results for the quarter and year ended December 31, 2016.

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EX-99.1

Exhibit 99.1

NEWS RELEASE

FOR IMMEDIATE RELEASE

CONTACT:     Charles D. Jehl

(512) 433-5229

FORESTAR GROUP INC. PROVIDES ADDITIONAL INFORMATION ON EXECUTION OF KEY INITIATIVES AND REPORTS FULL YEAR AND FOURTH QUARTER 2016 RESULTS

2016 was a transformative year for Forestar with exceptional progress on its key initiatives.

2016 Transformation - Highlights

Core Community Development:

• Sold 1,940 developed residential lots for approximately $68,200 per lot with average gross profit of approximately $23,400 per lot

◦ Excluding 235 bulk lot sales from non-core projects, average price was $72,200 per lot with average gross profit of approximately $26,500 per lot

◦ Over 2,100 lots currently under option contracts with builders at year-end 2016

• Sold 298 commercial acres for approximately $44,600 per acre (principally non-core projects)

• Sold 1,792 residential tract acres for approximately $8,700 per acre (principally non-core projects)

Cost Reductions:

• Actions taken to eliminate nearly $60 million in annualized SG&A, once all non-core assets are sold

◦ Reduced SG&A, including discontinued operations, by over 28% compared with 2015 actuals

◦ Additional 34% reduction in work force in March 2017 compared to year-end 2016

◦ Following the March 2017 reduction will have reduced headcount by over 70% compared with 2014 peak

Divest Non-Core Assets:

• Executed non-core asset sales generating $481.9 million in pre-tax net proceeds:

Asset	Pre-Tax Net Proceeds
	(In millions)
Timberland and Undeveloped Land (bulk and retail, ~73,000 acres sold)	$	138.0
Radisson Hotel & Suites	128.8
Multifamily properties (five sold)	118.7
Oil and Gas Working Interests	77.1
Non-Core Community Development Projects (five sold)	19.3
	$	481.9

Strengthened Balance Sheet:

• Reduced outstanding debt by $277.8 million in 2016 and by $323.3 million since third quarter-end 2015

◦ Reduces annual interest expense by approximately $23 million going forward

◦ Year-end 2016 debt to capital ratio of 16%

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• Consolidated cash of $265.8 million at year-end 2016 and $331.4 million as of February 28, 2017

Subsequent Event - First Quarter 2017

• Sold non-core mineral assets for $85.6 million in first quarter 2017

AUSTIN, TEXAS, MARCH 1, 2017—Forestar Group Inc. (NYSE: FOR) today reported full year 2016 net income of approximately $58.6 million, or $1.38 per share outstanding, compared with full year 2015 net loss of approximately $(213.0) million, or $(6.22) per share outstanding. Full year 2016 earnings from continuing operations were approximately $75.5 million, or $1.78 per share outstanding, compared with full year 2015 net loss from continuing operations of approximately $(26.9) million, or $(0.79) per share outstanding.

Full year 2016 results include pre-tax net gains of approximately $153.1 million related to the sale of non-core assets, including discontinued operations, which was partially offset by non-cash impairment charges of $(56.5) million related to six non-core community development projects and two multifamily sites. Full year 2015 results include pre-tax charges of approximately $(264.1) million related to impairment of proved properties and unproved leasehold interests associated with non-core oil and gas assets, a deferred tax asset valuation allowance, and severance related charges.

Significant progress: Sold Non-Core Assets, Strengthened Balance Sheet, Reduced Costs and Focused on Core Community Development Business

"2016 was a transformative year for Forestar. We made exceptional progress executing our key initiatives to divest non-core assets, reduce outstanding debt, reduce SG&A costs and focus on maximizing shareholder value from our core community development business. Key highlights included selling nearly $482 million in non-core assets, reducing outstanding debt by over $320 million since third quarter 2015, and reducing annual interest expense by approximately $23 million going forward. Forestar is actively selling or preparing to sell its nine remaining non-core assets in 2017, four of which are already under contract to be sold. Sales of these remaining non-core assets will generate additional cash and annual SG&A savings,” said Phil Weber, Chief Executive Officer of Forestar.

"In addition to executing these key initiatives, we have focused on maximizing shareholder value delivered from our core community development business. Builder demand for residential lots in our key communities remains steady. We sold 1,940 residential lots in 2016 and we began 2017 with approximately 2,100 residential lots under option contract with builders," continued Mr. Weber.

Fourth Quarter 2016 Financial Results

Forestar reported fourth quarter 2016 net income of approximately $43.7 million, or $1.03 per share, compared with a fourth quarter 2015 net loss of approximately $(6.2) million, or $(0.14) per share outstanding. Fourth quarter 2016 earnings from continuing operations were approximately $43.2 million, or $1.02 per share outstanding, compared with fourth quarter 2015 earnings from continuing operations of approximately $33.3 million, or $0.79 per share outstanding.

Fourth quarter 2016 results include pre-tax gains of $48.9 million related to the sale of over 58,300 acres of non-core bulk timberland and undeveloped land. Fourth quarter 2015 results include pre-tax non-cash impairment charges and changes in deferred tax asset valuation allowance of approximately ($34.8) million principally related to proved properties and unproved leasehold interest impairments related to discontinued operations.

Fourth Quarter 2016 Significant Highlights (Includes Ventures)

• Sold 835 developed residential lots for approximately $67,600 per lot with average gross profit of approximately $21,500 per lot

◦ Excluding 235 bulk lot sales from non-core projects, average price was approximately $78,900 per lot with average gross profit of approximately $29,300 per lot

• Sold 1,539 residential tract acres for approximately $5,700 per acre (principally non-core projects)

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• Sold 178 commercial acres for approximately $7,400 per acre (non-core projects)

• Sold 58,300 acres of non-core timberland and undeveloped land in three separate transactions for net proceeds of $103.2 million which generated combined gains of $48.9 million

• Incurred a $3.9 million non-cash impairment charge of goodwill related to our water interests as a result of entering into an agreement to sell these assets

Fourth Quarter and Full Year 2016 Segment Financial Results (Includes Ventures)

Real Estate

($ in millions)	Q4 2016		Q4 2015		FY 2016		FY 2015
Segment Revenues		$62.5		$102.6		$190.3		$202.8
Segment Earnings		$12.9		$37.9		$121.4		$67.7

Full year 2016 real estate segment earnings were higher compared with full year 2015 due to gain on sale of assets of $117.9 million in 2016, principally due to a $95.3 million gain associated with the sale of the Radisson Hotel & Suites and $20.8 million in gains associated with the sale of five multifamily assets, compared with $1.6 million in 2015, which was partially offset by non-cash impairment charges of ($56.5) million in 2016. Fourth quarter 2016 real estate segment earnings and revenues were lower compared with fourth quarter 2015 principally due to sale of Midtown Cedar Hill and higher undeveloped retail land sales in 2015.

Mineral Resources

($ in millions)	Q4 2016		Q4 2015		FY 2016		FY 2015
Segment Revenues		$1.2		$1.5		$5.1		$9.1
Segment Earnings		$0.7		$1.0		$3.3		$4.2

In fourth quarter and full year 2016, mineral resources segment revenues and earnings decreased principally due to lower realized oil and gas prices and lower production volumes from our royalty interests.

Other

($ in millions)	Q4 2016			Q4 2015			FY 2016			FY 2015
Segment Revenues		$0.8			$1.3			$2.0			$6.7
Segment Loss		($3.7	)		($0.1	)		($4.6	)		($0.6	)

Fourth quarter and full year 2016 other segment loss increased compared with fourth quarter and full year 2015 principally due to the deferral of timber harvest activity in support of our key initiative to divest our non-core timberland and undeveloped land and a $3.9 million goodwill non-cash impairment charge related to our water interests in groundwater leases in central Texas as result of entering into an agreement to sell these assets.

OUTLOOK

Fundamentals Stable in Forestar's Community Development Markets

“Finished vacant home inventories in Forestar's target markets remain in the equilibrium range, vacant developed lot supply remains low, and housing costs remain affordable relative to other markets. Our communities in major markets are well located in areas of housing demand, and favorable job and population growth," said Phil Weber.

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The Company will host a conference call on March 2, 2017 at 10:00 am ET to provide additional information on execution of key initiatives and discuss results of full year and fourth quarter 2016. 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 1-844-634-1445 at least 15 minutes prior to the start of the call. Those wishing to access the call from outside North America should dial 1-615-247-0254. The passcode 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 51065997.

About Forestar Group

Forestar is a residential and mixed-use real estate development company. At year-end 2016, we own directly or through ventures interests in 50 residential and mixed-use projects comprised of approximately 4,600 acres of real estate located in 10 states and 14 markets. In addition, we own interests in various other assets that have been identified as non-core that the company is divesting opportunistically over time. At year-end 2016, our remaining non-core assets principally include over 523,000 net acres of owned mineral assets principally located in Texas, Louisiana, Georgia and Alabama, 19,000 acres of timberland and undeveloped land (including mitigation banking), four multifamily assets and approximately 20,000 acres of groundwater leases in central Texas. On February 17, 2017, we sold our owned mineral assets for $85.6 million. Forestar operates in three business segments: real estate, mineral resources and other. 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; market demand for our non-core assets; 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.

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FORESTAR GROUP INC.

(UNAUDITED)

Business Segments

	Fourth Quarter						Full Year
	2016			2015			2016			2015
	(In thousands)
Revenues:
Real estate (a)	$	62,497		$	102,634		$	190,273		$	202,830
Mineral resources	1,234			1,478			5,076			9,094
Other	766			1,280			1,965			6,652
Total revenues	$	64,497		$	105,392		$	197,314		$	218,576
Segment earnings (loss):
Real estate	$	12,889		$	37,931		$	121,420		$	67,678
Mineral resources	659			1,015			3,327			4,230
Other	(3,651		)	(97		)	(4,625		)	(608		)
Total segment earnings (loss)	9,897			38,849			120,122			71,300
Items not allocated to segments:
General and administrative expense	(4,282		)	(5,262		)	(18,274		)	(24,802		)
Share-based and long-term incentive compensation expense	(1,445		)	1,252			(4,425		)	(4,474		)
Gain on sale of assets	48,891			—			48,891			—
Interest expense	(2,059		)	(8,215		)	(19,985		)	(34,066		)
Loss on extinguishment of debt, net	—			—			(35,864		)	—
Other corporate non-operating income	67			123			350			256
Income (loss) from continuing operations before taxes	51,069			26,747			90,815			8,214
Income tax (expense) benefit	(7,887		)	6,568			(15,302		)	(35,131		)
Net income (loss) from continuing operations attributable to Forestar Group Inc.	43,182			33,315			75,513			(26,917		)
Net income (loss) from discontinued operations, net of taxes (b)	563			(39,481		)	(16,865		)	(186,130		)
Net income (loss) attributable to Forestar Group Inc.	$	43,745		$	(6,166	)	$	58,648		$	(213,047	)
Net income (loss) per diluted share:
Continuing operations	$	1.02		$	0.79		$	1.78		$	(0.79	)
Discontinued operations	$	0.01		$	(0.93	)	$	(0.40	)	$	(5.43	)
Net income (loss) per diluted share	$	1.03		$	(0.14	)	$	1.38		$	(6.22	)
Weighted average common shares outstanding (in millions):
Basic	35.5			34.3			34.5			34.3
Diluted	42.3			42.4			42.3			34.3

	Year-End
Supplemental Financial Information:	2016		2015
	(In thousands)
Cash and cash equivalents	$	265,798	$	96,442
Senior secured notes	5,200		224,647
Convertible senior notes, net of discount	104,673		104,719
Tangible equity unit notes, net of discount	—		8,666
Other debt (c)	485		43,483
Total debt (d)	110,358		381,515
Net cash (debt)	$	155,440	$	(285,073	)

_____________________

^(a)  Fourth quarter and full year 2015 real estate revenues include the sale of Midtown Cedar Hill, a 354-unit multifamily property we developed near Dallas, for $42.9 million.

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^(b)  Fourth quarter and full year 2015 discontinued operations results include non-cash impairment charges of $37.6 million and $164.8 million related to unproved leasehold interests and proved properties.

^(c)  Other debt at year-end 2015 consisted principally of a $23.9 million senior secured note for one multifamily property and $15.4 million secured promissory note associated with our hotel property. 2016 debt excludes approximately $128.3 million of unconsolidated venture debt and approximately $14.9 million of outstanding letters of credit. In 2016, we sold Radisson Hotel & Suites and Eleven for $130.0 million and $60.2 million. The proceeds were used to pay off the related senior secured loans of $39.3 million.

^(d)  At year-end 2016 and 2015, $1,633,000 and $8,267,000 of unamortized deferred financing fees are deducted from our outstanding debt.

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FORESTAR GROUP INC.

REAL ESTATE SEGMENT

PERFORMANCE METRICS

	Fourth Quarter				Full Year
	2016		2015		2016		2015
REAL ESTATE
Owned, Consolidated & Equity Method Ventures:
Residential Lots Sold	835		363		1,940		1,472
Revenue per Lot Sold	$	67,594	$	83,739	$	68,152	$	77,170
Commercial Acres Sold	178		7		298		63
Revenue per Commercial Acre Sold	$	7,442	$	491,723	$	44,623	$	248,278
Undeveloped Acres Sold	1,016		7,267		14,914		13,862
Revenue per Acre Sold	$	2,395	$	2,192	$	2,455	$	2,296
Owned & Consolidated Ventures:
Residential Lots Sold	687		273		1,662		972
Revenue per Lot Sold	$	65,832	$	85,063	$	66,694	$	76,594
Commercial Acres Sold	178		4		294		31
Revenue per Commercial Acre Sold	$	7,442	$	657,530	$	37,312	$	182,184
Undeveloped Acres Sold	540		7,267		14,438		9,645
Revenue per Acre Sold	$	3,123	$	2,192	$	2,485	$	2,369
Ventures Accounted For Using the Equity Method:
Residential Lots Sold	148		90		278		500
Revenue per Lot Sold	$	75,775	$	79,725	$	76,866	$	78,288
Commercial Acres Sold	—		3		4		32
Revenue per Commercial Acre Sold	$	—	$	283,428	$	527,152	$	309,224
Undeveloped Acres Sold	476		—		476		4,217
Revenue per Acre Sold	$	1,567	$	—	$	1,567	$	2,129

YEAR-END 2016

REAL ESTATE PIPELINE

Real Estate	Entitled Acres	Developed & Under Development Acres	Total Acres
Residential
Owned	2,603	466
Ventures	656	145	3,870
Commercial
Owned	335	165
Ventures	179	88	767
Total Acres	3,773	864	4,637

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FORESTAR GROUP INC.

PROJECTS IN ENTITLEMENT

A summary of our real estate projects in the entitlement process ^(a) at year-end 2016 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
Total			730

 _____________________

^(a)  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.

^(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.

UNDEVELOPED LAND

A summary of our non-core timberland and undeveloped land classified as held for sale at year-end 2016 follows:

	Acres
Timberland
Georgia	11,100
Texas (a)	7,900
Total	19,000

_____________________

^(a)  Includes 3,700 acres in Houston that was previously in the entitlement process.

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FORESTAR GROUP INC.

REAL ESTATE PROJECTS

A summary of activity within our projects in the development process, which includes entitled, developed and under development single-family and mixed-use projects, at year-end 2016 follows:

				Residential Lots/Units		Commercial Acres
Project	County	Interest Owned (a)		Lots/Units Sold Since Inception	Lots/Units Remaining	Acres Sold Since Inception	Acres    Remaining
Projects with lots/units in inventory, under development or future planned development, projects with remaining commercial acres only and projects sold out in 2016
Texas
Austin
Arrowhead Ranch	Hays	100	%	6	378	—	19
The Colony	Bastrop	100	%	566	—	27	—
Double Horn Creek	Burnet	100	%	167	—	—	—
Hunter's Crossing	Bastrop	100	%	510	—	54	51
La Conterra	Williamson	100	%	202	—	3	—
Westside at Buttercup Creek	Williamson	100	%	1,497	—	66	—
				2,948	378	150	70
Corpus Christi
Caracol	Calhoun	75	%	65	—	14	—
Padre Island (b)	Nueces	50	%	—	—	—	15
Tortuga Dunes	Nueces	75	%	95	—	4	—
				160	—	18	15
Dallas-Ft. Worth
Bar C Ranch	Tarrant	100	%	467	654	—	—
Keller	Tarrant	100	%	—	—	1	—
Lakes of Prosper	Collin	100	%	187	100	4	—
Lantana	Denton	100	%	3,670	432	44	—
Maxwell Creek	Collin	100	%	1,001	—	10	—
Parkside	Collin	100	%	138	62	—	—
The Preserve at Pecan Creek	Denton	100	%	631	151	—	7
River's Edge	Denton	100	%	—	202	—	—
Stoney Creek	Dallas	100	%	320	376	—	—
Summer Creek Ranch	Tarrant	100	%	983	245	35	44
Timber Creek	Collin	88	%	80	521	—	—
Village Park	Collin	100	%	567	—	3	2
				8,044	2,743	97	53
Houston
Barrington Kingwood	Harris	100	%	176	4	—	—
City Park	Harris	75	%	1,468	—	58	104
Harper's Preserve (b)	Montgomery	50	%	588	1,094	30	49
Imperial Forest	Harris	100	%	84	347	—	—
Long Meadow Farms (b)	Fort Bend	38	%	1,648	149	194	99
Southern Trails (b)	Brazoria	80	%	954	41	1	—
Spring Lakes	Harris	100	%	348	—	25	4
Summer Lakes	Fort Bend	100	%	780	294	56	—
Summer Park	Fort Bend	100	%	125	74	34	67
Willow Creek Farms II	Waller / Fort Bend	90	%	154	111	—	—
				6,325	2,114	398	323

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				Residential Lots/Units		Commercial Acres
Project	County	Interest Owned (a)		Lots/Units Sold Since Inception	Lots/Units Remaining	Acres Sold Since Inception	Acres    Remaining
San Antonio
Cibolo Canyons	Bexar	100	%	1,142	649	97	58
Oak Creek Estates	Comal	100	%	326	227	13	—
Olympia Hills	Bexar	100	%	747	7	10	—
Stonewall Estates (b)	Bexar	50	%	378	8	—	—
				2,593	891	120	58
Total Texas				20,070	6,126	783	519
Colorado
Denver
Buffalo Highlands	Weld	100	%	—	164	—	—
Cielo	Douglas	100	%	—	343	—	—
Johnstown Farms	Weld	100	%	281	317	2	—
Pinery West	Douglas	100	%	86	—	20	104
Stonebraker	Weld	100	%	—	603	—	—
				367	1,427	22	104
Georgia
Atlanta
Harris Place	Paulding	100	%	22	5	—	—
Montebello (b)	Forsyth	90	%	—	224	—	—
Seven Hills	Paulding	100	%	912	341	26	113
West Oaks	Cobb	100	%	6	50	—	—
				940	620	26	113
North & South Carolina
Charlotte
Ansley Park	Lancaster	100	%	—	307	—	—
Habersham	York	100	%	91	96	—	6
Moss Creek	Cabarrus	100	%	—	84	—	—
Walden	Mecklenburg	100	%	—	384	—	—
				91	871	—	6
Raleigh
Beaver Creek (b)	Wake	90	%	31	162	—	—
				31	162	—	—
				122	1,033	—	6
Tennessee
Nashville
Beckwith Crossing	Wilson	100	%	32	67	—	—
Morgan Farms	Williamson	100	%	132	41	—	—
Scales Farmstead	Williamson	100	%	26	171	—	—
Weatherford Estates	Williamson	100	%	8	9	—	—
				198	288	—	—
Wisconsin
Madison
Juniper Ridge/Hawks Woods (b) (d)	Dane	90	%	18	196	—	—
Meadow Crossing II (b) (c)	Dane	90	%	7	165	—	—
				25	361	—	—

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				Residential Lots/Units		Commercial Acres
Project	County	Interest Owned (a)		Lots/Units Sold Since Inception	Lots/Units Remaining	Acres Sold Since Inception	Acres    Remaining
Arizona, California, Missouri, Utah
Tucson
Boulder Pass (b) (d)	Pima	50	%	29	59	—	—
Dove Mountain	Pima	100	%	—	98	—	—
Oakland
San Joaquin River	Contra Costa/Sacramento	100	%	—	—	264	25
Kansas City
Somerbrook	Clay	100	%	185	—	—	—
Salt Lake City
Suncrest (b) (c)	Salt Lake	90	%	—	171	—	—
				214	328	264	25
Total				21,936	10,183	1,095	767

____________________

^(a)  Interest owned reflects our total interest in the project, whether owned directly or indirectly, which may be different than our economic interest in the project.

^(b)  Projects in ventures that we account for using equity method.

^(c)  Venture project that develops and sells homes.

^(d) Venture project that develops and sells lots and homes.

A summary of our non-core multifamily properties, excluding one multifamily site in Austin classified as held for sale, at year-end 2016 follows:

Project	Market	Interest     Owned (a)		Type	Acres	Description
Elan 99	Houston	90	%	Multifamily	17	360-unit luxury apartment
Acklen	Nashville	30	%	Multifamily	4	320-unit luxury apartment
HiLine	Denver	25	%	Multifamily	18	385-unit luxury apartment

 _____________________

^(a)  Interest owned reflects our total interest in the project, whether owned directly or indirectly, which may be different than our economic interest in the project.

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EX-99.2

Information on Execution of Key Initiatives and Fourth Quarter and Full Year 2016 Financial Results March 2, 2017 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. 2

Key Initiatives Reducing Costs Across the Entire Organization • Actions taken to eliminate nearly $60MM in annual SG&A to date* • Additional 34% reduction in force planned in March 2017 • Following reduction in force will have reduced headcount by over 70% compared to 2014 peak • Implemented zero based budgeting Reviewing Entire Portfolio of Assets • Executed $482MM in non-core asset sales in 2016** • Undeveloped land sales (~73,000 acres) - $138MM • Radisson Hotel - $129MM • 5 multifamily assets - $119MM • Oil and gas working interests - $77MM • Non-core Community Development - $19MM • Sold 1,940 residential lots in 2016 • Sold mineral assets for $85.6MM in 2017** Reviewing Capital Structure • Reduced outstanding debt by $278MM in 2016 and $323MM since Q3 2015 • Reduced annual interest expense by approximately $23MM going forward • $266MM cash at YE 2016 and $331MM at February 28, 2017 2016 – A Transformative Year 3 Exceptional Progress Made In 2016 * Expect full cost savings realization once all non-core assets are sold. ** Reflects pre-tax net proceeds

Overview of Assets CORE Water 45% non-participating royalty interest in groundwater rights on 1.4 million surface acres Groundwater leases on 20,000 surface acres in Central Texas – Under Contract* Multifamily Westlake site in Austin – Under Contract* Acklen venture in Nashville completed – 85.6% occupied / 89.1% leased – listed for sale 2/21/17 HiLine venture in Littleton completed – 81.6% occupied / 83.9% leased Elan 99 venture in Houston completed – 65.0% occupied / 71.9% leased Timberland and Undeveloped Land 11,000 acres in Georgia 8,000 acres in Texas – Under Contract* (2 transactions) Community Development 50 entitled, developed or under development projects in 10 states and 14 markets ~ 4,600 acres Two communities in entitlement (CA) – 730 total acres NON-CORE – 9 REMAINING ASSETS 4 * Contracts may provide termination rights to buyers so closings cannot be assured.

Fourth Quarter and Full Year 2016 Results 5 ($ in Millions, except per share data) Revenues * $64.5 $105.4 $197.3 $218.6 Net Income (Loss) – Continuing Operations $43.2 $33.3 $75.5 ($26.9) Net Income (Loss) Per Share – Continuing Operations $1.02 $0.79 $1.78 ($0.79) Net Income (Loss) $43.7 ($6.2) $58.6 ($213.0) Net Income (Loss) Per Share $1.03 ($0.14) $1.38 ($6.22) Note: Q4 2016 & FY 2016 weighted average diluted shares outstanding were 42.3 million compared with 42.4 million in Q4 2015 and 34.3 million in FY 2015 * Excludes oil & gas working interests which are now classified as discontinued operations Q4 2016 Q4 2015 Full Year 2016 Full Year 2015 • Q4 2016 results include pre-tax gains of $48.9 million related to the sale of over 58,300 acres of non-core bulk timberland and undeveloped land. • Q4 2015 results include pre-tax non-cash impairment charges and changes in deferred tax asset valuation allowance of approximately ($34.8) million principally related to proved properties and unproved leasehold interest impairments related to discontinued operations. • Full year 2016 results include pre-tax gains of approximately $153.1 million related to the sale of non-core assets, including discontinued operations, which was partially offset by non-cash impairment charges of ($56.5) million related to six non-core community development projects and two multifamily sites. • Full year 2015 results include pre-tax charges of approximately ($264.1) million related to impairment of proved properties and unproved leasehold interests associated with non-core oil and gas assets, a deferred tax asset valuation allowance, and severance related charges.

Fourth Quarter and Full Year 2016 Segment Results 6 ($ in Millions, except per share data) Segment Earnings (Loss) * Real Estate $12.9 $37.9 $121.4 $67.7 Mineral Resources* 0.7 1.0 3.3 4.2 Other (3.7) (0.1) (4.6) (0.6) Total Segment Earnings $9.9 $38.8 $120.1 $71.3 * Excludes oil & gas working interests which are now classified as discontinued operations Q4 2016 Q4 2015 Full Year 2016 Full Year 2015 • FY 2016 real estate segment results include gain on sale of assets of $117.9 million, principally due to a $95.3 million gain associated with the sale of the Radisson Hotel & Suites and $20.8 million in gains associated with the sale of five multifamily assets, which was partially offset by non-cash impairment charges of ($56.5) million. • Q4 and FY 2016 other segment results include a $3.9 million goodwill non-cash impairment charge related to our water interests in groundwater leases in central Texas as result of entering into an agreement to sell these assets. • Q4 2015 earnings benefitted from higher retail undeveloped land sales. • Q4 and FY 2015 real estate earnings include $9.3 million from the sale of Midtown Cedar Hill, a 354-unit multifamily property we developed near Dallas.

Real Estate Segment - Earnings Reconciliation Q4 2016 $0.3 … $37.9 $6.6 $1.2 $0.4 ($11.0) ($11.4) ($3.9) $(1.1) $12.9 $0 $5 $10 $15 $20 $25 $30 $35 $40 $45 $50 Q4 2015 Opex Mitigation Banking Lot Sales Impairment Multifamily Properties Undeveloped Land Sales Residential & Commercial Tract Sales Gain on Asset Sales Interest Income Q4 2016 ($6.1) Segment Earnings Reconciliation Q4 2015 vs. Q4 2016 ($ in millions) Q4 2016 Sales Activity / Highlights* • Sold 835 residential lots • Core Residential lot sales – 600 lots • ~ $78,900 average price per lot • $29,300 gross profit per lot • Non-Core sales – Community Development • Residential lot sales – 235 lots • Residential tract sales – 1,481 acres • Commercial tract sales – 178 acres • Sold $3.3 million in impervious cover and stream credits 7 *Includes ventures

Real Estate Segment - Earnings Reconciliation FY 2016 $3.1 $67.7 $116.3 $12.1 $11.3 ($15.0) ($55.4) ($7.6) $(1.4) $121.4 $0 $50 $100 $150 $200 $250 FY 2015 Gain on Asset Sales Undeveloped Land Sales Opex Mitigation Banking Impairment Multifamily Properties Lot Sales Residential & Commercial Tract Sales Interest Income FY 2016 ($9.7) Segment Earnings Reconciliation FY 2015 vs. FY 2016 ($ in millions) FY 2016 Sales Activity / Highlights* • Sold 1,940 residential lots • Core Residential lot sales – 1,705 lots • ~ $72,200 average price per lot • $26,500 gross profit per lot • Non-Core sales – Community Development • Residential lot sales – 235 lots • Residential tract sales – 1,481 acres • Commercial tract sales – 286 acres • Sold Radisson Hotel & Suites for $130.0 million, generating $95.3 million gain • Sold 360º multifamily venture interest for a total of $15.1 million, generating $10.8 million in earnings • Sold Eleven multifamily community for $60.2 million, generating $9.1 million gain • Sold Music Row multifamily site for $15.0 million, generating a $4.0 million gain • Sold Dillion multifamily site for $26.0 million, generating $1.2 million gain • Sold ~ 14,900 acres of undeveloped land, generating $28.1 million in earnings • Average price ~ $2,450 per acre • Sold $6.5 million in impervious cover and stream credits • Incurred $56.5 million in non-cash impairments 8 *Includes ventures

Lot Sales and Lots Under Contract 9 0 500 1,000 1,500 2,000 2,500 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 Q 41 5 Q 11 6 Q 21 6 Q 31 6 Q 41 6 Re sid en tia l L ot s Developed Lots Lots Under Development > 2,100 Lots Under Option Contract* Includes ventures $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 0 500 1,000 1,500 2,000 2,500 3,000 3,500 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Bulk Lot Sales Lot Sales Average Lot Margin Average Lot Margin Excl. Bulk Sales Annual Lot Sales and Average Lot Margin * Includes about 500 future lots under contract but not yet under development and not depicted on the graph

For questions, please contact: Charles D. Jehl Chief Financial Officer Forestar Group Inc. 6300 Bee Cave Road Building Two, Suite 500 Austin, TX 78746 512-433-5229 chuckjehl@forestargroup.com

Appendix

0 10 20 30 40 50 60 70 80 90 100 2015 2016 2017E Target Annual SG&A Costs Corporate G&A Segment Operating Costs Project Level Expenses Cost Reductions SG&A costs in 2017 and target are estimates and actual results may vary depending on the timing of completion of non-core asset sales. $87 million $ in M illi on s $62 million Other Corporate Costs 22% Corporate Employee Costs 24% Project Level Expenses 29% Other Segment Operating Costs 7% Segment Employee Costs 18% $8 MM $7 MM $6 MM$5 MM $2 MM Action Taken to Eliminate Nearly $60 million in Annual SG&A Costs Since YE 2015 $28 million Target SG&A Cost - $28 million $38 million 12

Real Estate Segment KPI’s Q4 2016 Q4 2015 FY 2016 FY 2015 Residential Lot Sales Lots Sold 835 363 1,940 1,472 Average Price / Lot $67,594 $83,739 $68,152 $77,170 Gross Profit / Lot $21,493 $35,023 $23,446 $34,398 Commercial Tract Sales Acres Sold 178 7 298 63 Average Price / Acre $7,442 $491,723 $44,623 $248,278 Undeveloped Retail Land Sales Acres Sold 1,016 7,267 14,914 13,862 Average Price / Acre $2,395 $2,192 $2,455 $2,296 Segment Revenues ($ in Millions) $62.5 $102.6 $190.3 $202.8 Segment Earnings ($ in Millions) $12.9 $37.9 $121.4 $67.7 13 Includes ventures

Stable Market Demand in Key Markets *Source: Bureau of Labor Statistics December 2016 vs. December 2015 Austin 1.9% Dallas / Fort Worth 3.3% Houston 0.5% San Antonio 1.9% Atlanta 2.7% Charlotte 1.7% Nashville 3.1% U.S. Average 1.6% Job Growth vs. National Average* Job growth in our key markets holding well above U.S. average (excluding Houston, which still has positive job growth) Finished Vacant Home Inventories at Equilibrium** **Source: Metrostudy • Equilibrium: Balanced supply and demand for Finished Vacant housing for an MSA as measured by months of supply. • For Texas markets, equilibrium is 2.0 to 2.5 months of supply. 14 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 0 5,000 10,000 15,000 20,000 25,000 30,000 Finished Vacant Housing Inventory Months of Supply 4Q Forestar Texas Markets

Non-Core Community Development Projects Update 15 • Non-core asset sales provide tax losses to offset tax gains from other non- core asset sales • Annual carry costs reduced by approximately $3 million for assets sold Community Location Status Interest Owned* Developed Lots Undeveloped Lots Commercial Acres Sold San Joaquin River Antioch Remaining 25 acres 100% --- --- 264 The Colony Austin Sold Dec 2016 100% 81 1,357 5 Caracol TX Coast Sold Dec 2016 75% 47 9 14 Tortuga Dunes TX Coast Sold Dec 2016 75% 95 39 3 Somerbrook Kansas City Sold Dec 2016 100% 12 210 --- Buffalo Highlands Denver Marketing 100% --- 164 --- Stonebraker Denver Marketing 100% --- 603 --- 235 2,382 286 * Interest owned reflects our total interest in the project, whether owned directly or indirectly, which may be different than our economic interest in the project.

Bulk Timberland and Undeveloped Land – “Sale Summary” Purchase Price • $104.2 MM purchase price • Closed December 2016 • $1,786 average price per acre Assets Sold • Approximately 58,300 acres of timberland in Georgia and Alabama • Minerals underlying the timberland also conveyed Structure • Three separate purchase and sale agreements 16

Mineral Interests – “Sale Summary” Purchase Price • $85.6 MM ($75MM received, $10.6MM in escrow for title) • Closed February 17, 2017 Minerals Owned • 44,000 acres held by production • 476,000 undeveloped acres • 520,000 total net mineral acres Target Formations • Haynesville, James Lime, Cotton Valley, Bossier, Austin Chalk, Wilcox, Eaglebine, Frio 17

18 For questions, please contact: Charles D. Jehl Chief Financial Officer Forestar Group Inc. 6300 Bee Cave Road Building Two, Suite 500 Austin, TX 78746 512-433-5229 chuckjehl@forestargroup.com