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Forestar Group Inc. Reports First Quarter 2013 Results

  Forestar Group Inc. Reports First Quarter 2013 Results

Accelerating Value Realization through Higher Residential Lot Sales, Increased
Oil Production and Capitalizing on Multifamily Opportunities

Business Wire

AUSTIN, Texas -- May 08, 2013

Forestar Group Inc. (NYSE: FOR) today reported first quarter 2013 net income
of approximately $4.0 million, or $0.11 per diluted share, compared with first
quarter 2012 net income of approximately $2.8 million, or $0.08 per diluted
share outstanding.

“During first quarter, increased residential lot sales activity continued to
reflect positive momentum and signs of a sustainable housing recovery.
Residential real estate markets in Texas continue to benefit from low finished
lot inventories combined with a significant increase in housing starts.
Multifamily market conditions also remain strong in our target markets, and
during the quarter, we sold Promesa, a wholly-owned multifamily community we
developed in Austin, for $41 million, generating earnings of $10.9 million. In
addition, oil and gas revenues continued to gain momentum, with increased oil
production in the Bakken and Three Forks formations in North Dakota and the
Lansing-Kansas City formation in Kansas and Nebraska, principally due to our
acquisition of Credo Petroleum. We are focused on executing and delivering our
Triple in FOR strategic initiatives to accelerate value realization, optimize
transparency and disclosure and grow net asset value through strategic and
disciplined investments,” said Jim DeCosmo, president and chief executive
officer of Forestar Group.

First Quarter 2013 Significant Highlights

  *Sold Promesa, a wholly-owned multifamily community we developed in Austin
    for $41 million, generating earnings of $10.9 million
  *Sold 446 developed residential lots, a 56% increase compared with first
    quarter 2012
  *Oil production up over 113% compared with first quarter 2012, principally
    due to the acquisition of Credo Petroleum

Segment Reporting Change

Forestar has realigned its reportable segments to better reflect the
underlying market fundamentals and operating strategy of its core businesses.
With this change, we have aggregated our fiber and water resources operating
results in other natural resources. The company manages its operations through
three business segments: real estate, oil and gas and other natural resources.

REAL ESTATE

First Quarter 2013 Significant Highlights

  *Sold Promesa, a wholly-owned multifamily community we developed in Austin
    for $41.0 million, generating earnings of $10.9 million
  *Sold 446 developed residential lots, a 56% increase compared with first
    quarter 2012 – Almost 1,800 lots under option contracts
  *Sold 919 acres of undeveloped land for over $2,900 per acre
  *Sold 3 commercial acres for over $382,000 per acre

Segment Financial Results:

($ in millions)    1Q 2013   1Q 2012   4Q 2012
                                             
Segment Revenues     $  78.7     $  17.9     $  48.4
                                             
Segment Earnings     $  19.4     $  11.6     $  21.7
                                             

First quarter 2013 real estate segment earnings were higher compared with
first quarter 2012 principally due to higher residential lot sales. Real
estate segment earnings declined in first quarter 2013 compared with fourth
quarter 2012 primarily due to lower undeveloped land sales.

OIL AND GAS

First Quarter 2013 Significant Highlights

  *Oil production up over 113% compared with first quarter 2012, principally
    due to the acquisition of Credo Petroleum
  *22 new productive oil and gas wells drilled; 965 producing wells at
    quarter-end, up from 534 wells in first quarter 2012, principally due to
    acquisition of Credo Petroleum

Segment Financial Results:

($ in millions)    1Q 2013   1Q 2012   4Q 2012
                                             
Segment Revenues     $  15.5     $  9.4      $  17.2
                                             
Segment Earnings     $  5.1      $  7.1      $  7.1
                                             

Oil and gas segment earnings decreased in first quarter 2013 compared with
first quarter 2012 principally due to reduced oil volumes associated with our
owned mineral interests, lower oil prices, decreased delay rental revenues and
incremental personnel costs, which were partially offset by increased oil
production attributable to the acquisition of Credo Petroleum. Oil and gas
segment earnings decreased in first quarter 2013 compared with fourth quarter
2012 primarily due to lower oil production, which was partially offset by
higher oil prices.

OTHER NATURAL RESOURCES

First Quarter 2013 Significant Highlights

  *Sold over 191,000 tons of fiber for $15.65 per ton
  *Recreational leasing remains strong

Segment Financial Results:

($ in millions)           1Q 2013   1Q 2012     4Q 2012
                                                      
Segment Revenues            $  3.3      $ 0.7         $  3.0
                                                      
Segment Earnings (Loss)     $  1.3        ($0.9 )     $  0.8
                                                      

First quarter 2013 other natural resources segment earnings were higher
compared with first quarter 2012 principally due to over 162,000 tons of
additional fiber sales and a 35% increase in average pricing per ton. Other
natural resources segment earnings increased in first quarter 2013 compared
with fourth quarter 2012 primarily due to higher fiber sales.

OUTLOOK

“Housing markets continue to show solid signs of a sustainable recovery, with
growing demand for residential lots and increased interest in residential and
commercial tracts. Our backlog remains strong and we are well positioned to
accelerate real estate sales during this housing recovery. Our multifamily
team successfully developed, leased, and monetized our Promesa community in
only 24 months, generating well above cost of capital returns for our
business, reflections of the project quality, experience of our team and
favorable multifamily market conditions. We continue to build a solid pipeline
of multifamily development opportunities, with construction at our multifamily
ventures in Austin and Denver on target to begin delivering units in 2013, and
our sites in Dallas, Nashville and Charlotte should be under construction by
year-end. We will continue to evaluate and acquire additional multifamily
sites to further increase our pipeline of quality multifamily development
opportunities.

“We continue to generate positive momentum through our oil and gas initiatives
to increase exploration activity, production and reserves. During first
quarter, we experienced a significant increase in North Dakota drilling
activity, with approximately twelve Bakken or Three Forks wells (5% average
working interest) reaching total depth during the quarter. We anticipate
drilling activity in the Bakken to accelerate in the second half of 2013. In
addition, exploration and drilling activity in Kansas and Nebraska also ramped
up during first quarter, with 19 wells (59% average working interest) reaching
total depth, ten of which have been economic. Our exploration initiatives in
Kansas and Nebraska are yielding favorable success rates and strong
risk-adjusted returns, and we continue to lease additional acreage in this
basin. During first quarter 2013, Forestar acquired leasehold interests in
over 28,000 net mineral acres in new and existing prospects in Nebraska and
Kansas.

“We continue to increase our momentum toward delivering our Triple in FOR
strategic initiatives, focused on accelerating value realization, increasing
transparency and disclosure, and growing our net asset value through strategic
and disciplined investments. We are off to a great start and we are well
positioned for 2013,” concluded Mr. DeCosmo.

The Company will host a conference call on May 8, 2013 at 10:00 am ET to
discuss results of first quarter 2013. 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 1-877-280-4958 at least 15
minutes prior to the start of the meeting. Those wishing to access the call
from outside North America should dial 1-857-244-7315. 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 1-888-286-8010 in North
America and at 1-617-801-6888 outside North America. The password for the
replay is 95046996.

About Forestar Group

Forestar Group Inc. operates in three business segments: real estate, oil and
gas and other natural resources. At the end of first quarter 2013, the real
estate segment owns directly or through ventures almost 135,000 acres of real
estate located in ten states and fourteen markets in the U.S. The real estate
segment has 14 real estate projects representing approximately 25,980 acres
currently in the entitlement process, and 72 entitled, developed and under
development projects in eight states and twelve markets encompassing almost
14,400 acres, comprised of almost 23,600 planned residential lots and almost
2,400 commercial acres. The oil and gas segment includes approximately 792,000
net acres of oil and gas mineral interests, with approximately 590,000 acres
of fee ownership located principally in Texas, Louisiana, Alabama, and Georgia
and almost 202,000 net acres of leasehold interests principally located in
Nebraska, Kansas, Oklahoma, North Dakota and Texas. These leasehold interests
include almost 6,000 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 produced or withdrawn for commercial purposes
from approximately 1.4 million acres in Texas, Louisiana, Georgia and Alabama
and about 20,000 acres of groundwater leases 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 our ability to achieve synergies and
value creation contemplated by the merger with Credo, and our ability to
promptly and effectively integrate Credo’s businesses. Other factors and
uncertainties that might cause such differences include, but are 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 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.

                                                            
                                                               
FORESTAR GROUP INC.
(UNAUDITED)

Business Segments
                                                               
                                                 First Quarter
                                                 2013          2012
                                                 (In thousands,

                                                 except per share)
Revenues
Real estate                                      $ 78,689      $ 17,922
Oil and gas                                        15,504        9,426
Other natural resources                           3,278       744     
Total revenues                                   $ 97,471     $ 28,092  
                                                               
Segment earnings
Real estate                                      $ 19,446      $ 11,577
Oil and gas                                        5,127         7,128
Other natural resources                           1,252       (863    )
Total segment earnings                             25,825        17,842
                                                               
Items not allocated to segments:
General and administrative expense                 (4,958  )     (4,362  )
Share-based compensation expense                   (10,415 )     (5,231  )
Interest expense                                   (4,539  )     (3,891  )
Other corporate non-operating income              31          64      
Income before taxes                                5,944         4,422
Income tax expense                                (1,993  )    (1,620  )
Net income attributable to Forestar Group Inc.   $ 3,951      $ 2,802   
                                                               
Net income per common share:
Basic                                            $ 0.11        $ 0.08
Diluted                                          $ 0.11        $ 0.08
                                                               
Weighted average common shares outstanding:
Basic                                              35.3          34.9
Diluted                                            35.7          35.2
                                                               
                                                 First Quarter
Supplemental Financial Information:              2013          2012
                                                 (In thousands)
                                                               
Cash and cash equivalents                        $ 86,653      $ 6,801
                                                               
Borrowings under credit facility                 $ 200,000     $ 136,000
Convertible senior notes, net of discount (a)      97,593        -
Other debt (b)                                    31,027      91,865  
Total debt                                       $ 328,620    $ 227,865 

(a)  Represents $125 million convertible senior notes issued February 2013,
      net of unamortized discount
(b)   Consists principally of consolidated venture non-recourse debt.

                                                 
                                                    
FORESTAR GROUP INC.

REAL ESTATE SEGMENT

PERFORMANCE METRICS
                                                    
                                                    First Quarter
REAL ESTATE                                         2013        2012
Owned, Consolidated & Equity Method Ventures:
Residential Lots Sold                                 446           285
Revenue per Lot Sold                                $ 51,900      $ 53,000
Commercial Acres Sold                                 3             -
Revenue per Commercial Acre Sold                    $ 382,700       -
Undeveloped Acres Sold                                919           455
Revenue per Acre Sold                               $ 2,900       $ 2,400
Owned & Consolidated Ventures:
Residential Lots Sold                                 355           137
Revenue per Lot Sold                                $ 52,500      $ 62,000
Commercial Acres Sold                                 3             -
Revenue per Commercial Acre Sold                    $ 382,700       -
Undeveloped Acres Sold                                919           320
Revenue per Acre Sold                               $ 2,900       $ 2,300
Ventures Accounted For Using the Equity Method:
Residential Lots Sold                                 91            148
Revenue per Lot Sold                                $ 49,600      $ 44,600
Commercial Acres Sold                                 -             -
Revenue per Commercial Acre Sold                      -             -
Undeveloped Acres Sold                                -             135
Revenue per Acre Sold                                 -           $ 2,600

                                                                 
                                                                           
FIRST QUARTER 2013

REAL ESTATE PIPELINE

                              In                           Developed &     Total
Real Estate   Undeveloped     Entitlement     Entitled     Under           Acres*
                              Process                      Development
                                                                           
Undeveloped
Land
Owned         87,543                                                       94,444
Ventures      6,901
                                                                           
Residential
Owned                         23,272          9,005        821             35,277
Ventures                                      1,898        281
                                                                           
Commercial
Owned                         2,708           1,201        591             5,077
Ventures                                      387          190
                                                                           
Total Acres   94,444          25,980          12,491       1,883           134,798
                                                             
Estimated Residential                    20,500     3,063         23,563
Lots

* In addition, Forestar owns a 58% interest in a venture which controls
approximately 16,000 acres of undeveloped land in Georgia with minimal
investment. Excludes acres associated with fully developed commercial and
income producing properties.

                                               
                                                  
FORESTAR GROUP INC.

OIL AND GAS SEGMENT

PERFORMANCE METRICS
                                                  
                                                  First Quarter
                                                  2013        2012
Leasing Activity from Owned Mineral Interests
Acres Leased                                        310           805
Average Bonus / Acre                              $ 316         $ 357
Delay Rentals Received                            $ 457,500     $ 1,114,900
Oil & Gas Production
Royalty Interests^1
Gross Wells                                         543           534
Oil Production (Barrels)                            48,200        67,700
Average Oil Price ($ / Barrel)                    $ 85.93       $ 98.10
Natural Gas Production (MMcf)                       377.2         427.9
Average Natural Gas Price ($ / Mcf)               $ 3.04        $ 3.20
BOE Production^2                                    111,100       139,000
Average Price ($ / BOE)                           $ 47.64       $ 57.61
Working Interests
Gross Wells                                         431           9
Oil Production (Barrels)                            99,600        1,500
Average Oil Price ($ / Barrel)                    $ 90.76       $ 73.68
Natural Gas Production (MMcf)                       216.7         24.3
Average Natural Gas Price ($ / Mcf)               $ 3.67        $ 3.75
BOE Production^2                                    135,800       5,500
Average Price ($ / BOE)                           $ 72.47       $ 36.32
Total Oil & Gas Interests
Gross Wells^3                                       965           534
Oil Production (Barrels)                            147,900       69,200
Average Oil Price ($ / Barrel)                    $ 89.19       $ 97.57
Natural Gas Production (MMcf)                       593.9         452.2
Average Natural Gas Price ($ / Mcf)               $ 3.27        $ 3.23
BOE Production^2                                    246,800       144,600
Average Price ($ / BOE)                           $ 61.30       $ 56.80
Well Activity
Mineral Interests Owned ^3
Net Acres Held By Production                        29,000        31,700
Gross Wells Drilled                                 -             4
Productive Gross Wells                              543           534
Mineral Interests Leased
Net Acres Held By Production^4                      30,000        -
Gross Wells Drilled                                 22            -
Productive Gross Wells^4                            422           -
Total Well Activity
Net Acres Held By Production                        59,000        31,700
Gross Wells Drilled                                 22            4
Productive Gross Wells                           965         534

     Includes our share of venture activity in which we own a 50% interest.
^1  Our share of natural gas production is 70 MMcf in first quarter 2013 and
     90 MMcf in first quarter 2012
^2   BOE – Barrels of oil equivalent (converting natural gas to oil at 6 Mcfe
     / Bbl)
^3   Includes wells operated by third-party lessees/operators. Represent wells
     in which we own a royalty or working interest in a producing well
^4   Excludes 8,000 net acres and 1,181 wells in which we have an overriding
     royalty interest
     

                              FIRST QUARTER 2013
                             OIL AND GAS SEGMENT
                              MINERAL INTERESTS

                          MINERAL INTERESTS OWNED ^1

Forestar’s oil and gas segment includes approximately 590,000 owned net
mineral acres principally located in Texas, Louisiana, Georgia and Alabama.

State       Unleased  Leased  Held by     Total ^2
                                 Production
Texas        213,000    12,000   27,000       252,000
Louisiana    117,000    25,000   2,000        144,000
Georgia      152,000    -        -            152,000
Alabama      40,000     -        -            40,000
California   1,000      -        -            1,000
Indiana      1,000      -        -            1,000
Total       524,000   37,000  29,000      590,000

^1  Represents net acres and includes ventures
^2   Excludes 477 net mineral acres located in Colorado, which includes 319
     leased acres and 158 acres held by production
     

                         MINERAL INTERESTS LEASED ^1

Forestar’s oil and gas segment includes approximately 202,000 net mineral
acres of leasehold interests principally located in Nebraska, Kansas,
Oklahoma, North Dakota and Texas, predominantly as a result of our September
28, 2012 acquisition of CREDO Petroleum.

State         Undeveloped  Held by     Total ^2
                             Production
Nebraska       107,000       2,000        109,000
Kansas         40,000        3,000        43,000
Oklahoma       -             17,000       17,000
North Dakota   3,000         3,000        6,000
Texas          6,000         2,000        8,000
Other          16,000        3,000        19,000
Total         172,000      30,000      202,000

^1  Represents net acres
^2   Excludes approximately 8,000 net acres of overriding royalty interests

                               
                                  
FORESTAR GROUP INC.

OTHER NATURAL RESOURCES SEGMENT

PERFORMANCE METRICS
                                  
                                  First Quarter
                                  2013       2012
Fiber Sales *
Pulpwood Tons Sold                  120,600     24,400
Average Pulpwood Price / Ton      $ 11.70     $ 10.18
Sawtimber Tons Sold                 70,900      4,400
Average Sawtimber Price / Ton     $ 22.36     $ 19.48
                                              
Total Tons Sold                     191,500     28,800
Average Price / Ton               $ 15.65     $ 11.59
                                              
Recreational Activity
Average Acres Leased                122,700     130,900
Average Lease Rate / Acre         $ 9.15      $ 8.80

*The majority of our fiber sales were to International Paper at market prices.

                                                         
                                                                 
FORESTAR GROUP INC.
PROJECTS IN ENTITLEMENT

A summary of projects in the entitlement process ^(a) at first quarter-end
2013 follows:
                                                                 
Project                             County                       Project
                                                                 Acres  ^(b)
                                                                 
California
Hidden Creek Estates                Los Angeles                  700
Terrace at Hidden Hills             Los Angeles                  30
                                                                 
Georgia
Ball Ground                         Cherokee                     500
Crossing                            Coweta                       230
Fincher Road                        Cherokee                     3,890
Fox Hall                            Coweta                       960
Garland Mountain                    Cherokee/Bartow              350
Martin’s Bridge                     Banks                        970
Mill Creek                          Coweta                       770
Serenity                            Carroll                      440
Wolf Creek                          Carroll/Douglas              12,230
Yellow Creek                        Cherokee                     1,060
                                                                 
Texas                                                            
Lake Houston                        Harris/Liberty               3,700
San Jacinto                         Montgomery                   150
                                                                 
Total                                                            25,980

       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
^(a)  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
^(b)   ownership interest, are approximate. The actual number of acres
       entitled may vary.

                                                                
                                                                   
FORESTAR GROUP INC.
REAL ESTATE PROJECTS

A summary of our entitled,^(a) developed & under development projects at first quarter-end
2013 follows:
                                                                   
                                           Residential Lots ^(c)   Commercial Acres ^(d)
                                           Lots Sold               Acres
                          Interest         Since       Lots        Sold        Acres
Project      County       Owned^(b)                   Remaining   Since      Remaining^(f)
                                           Inception
                                                                   Inception
California
             Contra
San Joaquin  Costa/       100%             -           -           -           288
River
             Sacramento
Colorado
Buffalo      Weld         100%             -           164         -           -
Highlands
Johnstown    Weld         100%             170         443         2           7
Farms
Pinery West  Douglas      100%             -           -           -           111
Stonebraker  Weld         100%             -           603         -           -
Tennessee
Azalea Park  Williamson   100%             -           173         -           -
Texas
Arrowhead    Hays         100%             -           259         -           6
Ranch
Bar C Ranch  Tarrant      100%             292         907         -           -
Barrington   Harris       100%             61          119         -           -
Kingwood
Cibolo       Bexar        100%             753         722         96          54
Canyons
Harbor       Hood         100%             205         244         2           19
Lakes
Hunter’s     Bastrop      100%             411         79          38          71
Crossing
La Conterra  Williamson   100%             127         373         -           58
Lakes of     Collin       100%             5           280         -           -
Prosper
Maxwell      Collin       100%             820         179         10          -
Creek
Oak Creek    Comal        100%             141         506         13          -
Estates
Stoney       Dallas       90%              149         605         -           -
Creek
Summer       Tarrant      100%             834         440         35              44
Creek Ranch
Summer       Fort Bend    100%             484         646         56               -
Lakes
Summer Park  Fort Bend    100%             -           210         28               62
^(g)
The Colony   Bastrop      100%             441         708         22               31
The
Preserve at  Denton       100%             399         395         -                7
Pecan Creek
Village      Collin       100%             516         244         3                2
Park
Westside at
Buttercup    Williamson   100%             1,428       68          66               -
Creek
Other
projects     Various      100%             2,085       171         218              36
(10)
Georgia
Seven Hills  Paulding     100%             666         420         26               113
Villages of  Dawson       100%             -           1,715       -                57
Burt Creek
Towne West   Bartow       100%             -           2,674       -                121
Other
projects     Various      100%             72          3,021       -                705
(17)
Florida
Other
projects     Various      100%             301         87          -                -
(2)
Missouri
and Utah
Other
projects     Various      100%             499         55          -                -
(2)
                                           10,859      16,510      615              1,792
Projects in entities we consolidate
Texas
City Park    Harris       75%              1,218       93          50               115
Lantana      Denton       55%       ^(e)   774         1,276       -                12
Timber       Collin       88%              -           614         -                -
Creek
Willow       Walter/Fort
Creek Farms  Bend         90%              40          191         -                -
II
Other
projects     Various      Various          7           202         -                129
(2)
Georgia
The          Paulding     75%              289         1,052       -                -
Georgian
                                           2,328       3,428       50               256
Total owned
and                                        13,187      19,938      665              2,048
consolidated
Projects in ventures that we account for using the equity method
Texas
Entrada      Travis       50%              -           821         -                -
Fannin       Tarrant      50%              324         24          -                12
Farms West
Harper’s     Montgomery   50%              244         1,481       -                72
Preserve
Lantana      Denton       Various   ^(e)   1,163       62          16               42
Long Meadow  Fort Bend    37%              1,025       774         119              180
Farms
Southern     Brazoria     80%              603         380         -                -
Trails
Stonewall    Bexar        50%              305         83          -                -
Estates
Other
projects     Nueces       50%              -           -           -                15
(1)
Total in                                   3,664       3,625       135              321
ventures
Combined                                   16,851      23,563      800              2,369
Total

       A project is deemed entitled when all major discretionary governmental
^(a)  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
^(b)   multiple ownership structures within them. Accordingly, portions of
       these projects may appear as owned, consolidated and/or accounted for
       using the equity method.
       Lots are for the total project, regardless of our ownership interest.
^(c)   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
^(d)   interest and are net developable acres, which may be fewer than the
       gross acres available in the project.
       The Lantana project consists of a series of 22 partnerships in which
^(e)   our voting interests range from 25% to 55%. We account for two of these
       partnerships using the equity method and we consolidate the remaining
       partnerships.
^(f)   Excludes acres associated with commercial and income producing
       properties.
^(g)   Formerly Waterford Park
       

A summary of our significant commercial and income producing properties at
first quarter-end 2013 follows:

                              Interest                        
Project    County     Market  Owned      Type          Acres   Description
                                   ^(a)
Radisson                                                                  413 guest
Hotel        Travis       Austin   100%         Hotel           2         rooms and
                                                                          suites
                                                                          257 unit
Eleven       Travis       Austin   25%          Multifamily     3         luxury
                                                                          apartment
                                                                          ^(b)
                                                                          304 unit
360^°        Arapahoe     Denver   20%          Multifamily     4         luxury
                                                                          apartment
                                                                          ^(b)
                                                                          

^(a)  Interest owned reflects our total equity interest in the project,
       whether owned directly or indirectly.
^(b)   Construction in progress

Contact:

Forestar Group Inc.
Anna E. Torma, 512-433-5312