Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Mar. 31, 2022 | Apr. 15, 2022 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-33662 | |
Entity Registrant Name | FORESTAR GROUP INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 26-1336998 | |
Entity Address, Address Line One | 2221 E. Lamar Blvd. | |
Entity Address, Address Line Two | Suite 790 | |
Entity Address, City or Town | Arlington | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 76006 | |
City Area Code | 817 | |
Local Phone Number | 769-1860 | |
Title of 12(b) Security | Common Stock, par value $1.00 per share | |
Trading Symbol | FOR | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 49,738,344 | |
Entity Central Index Key | 0001406587 | |
Current Fiscal Year End Date | --09-30 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Mar. 31, 2022 | Sep. 30, 2021 |
ASSETS | ||
Cash and cash equivalents | $ 233.7 | $ 153.6 |
Real estate | 1,960.5 | 1,905.2 |
Investment in unconsolidated ventures | 0.5 | 0.9 |
Property and equipment, net | 5 | 2.9 |
Other assets | 31.9 | 39.1 |
Total assets | 2,231.6 | 2,101.7 |
LIABILITIES | ||
Accounts payable | 55.6 | 47.4 |
Accrued development costs | 120.6 | 104.5 |
Earnest money on sales contracts | 141.9 | 148.3 |
Deferred tax liability, net | 23 | 24.4 |
Accrued expenses and other liabilities | 77.8 | 56.7 |
Debt | 705.3 | 704.5 |
Total liabilities | 1,124.2 | 1,085.8 |
Forestar Group Inc. shareholders’ equity: | ||
Common Stock, Value, Issued | 49.7 | 49.6 |
Additional paid-in capital | 639.3 | 636.2 |
Retained earnings | 417.4 | 329.1 |
Stockholders' equity | 1,106.4 | 1,014.9 |
Noncontrolling interests | 1 | 1 |
Total equity | 1,107.4 | 1,015.9 |
Total liabilities and equity | $ 2,231.6 | $ 2,101.7 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 |
Equity [Abstract] | |||
Common Stock, Par or Stated Value Per Share | $ 1 | $ 1 | |
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 | |
Common Stock, Shares, Issued | 49,738,344 | 49,580,389 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement [Abstract] | ||||
Revenues | $ 421.6 | $ 287.1 | $ 829.2 | $ 594.2 |
Cost of sales | 334.1 | 233.8 | 668.3 | 496.7 |
Selling, general and administrative expense | 24.3 | 16.3 | 45.8 | 31.8 |
Equity in earnings of unconsolidated ventures | 0 | (0.1) | (1.1) | (0.3) |
Gain on sale of assets | 0 | 0 | (0.5) | 0 |
Interest and other income | 0 | (0.5) | 0 | (0.8) |
Income before income taxes | 63.2 | 37.6 | 116.7 | 66.8 |
Income tax expense | 15.4 | 9.2 | 28.4 | 16.3 |
Net income | 47.8 | 28.4 | 88.3 | 50.5 |
Net income attributable to noncontrolling interests | 0 | 0 | 0 | 0.1 |
Net income attributable to Forestar Group Inc. | $ 47.8 | $ 28.4 | $ 88.3 | $ 50.4 |
Weighted Average Number of Shares Outstanding, Diluted [Abstract] | ||||
Weighted average number of common shares | 49,820,937 | 48,412,213 | 49,752,153 | 48,270,718 |
Adjusted weighted average number of common shares | 49,878,166 | 48,509,924 | 49,805,517 | 48,351,410 |
Earnings Per Share [Abstract] | ||||
Basic net income per common share attributable to Forestar Group Inc. | $ 0.96 | $ 0.59 | $ 1.77 | $ 1.04 |
Diluted net income per common share attributable to Forestar Group Inc. | $ 0.96 | $ 0.59 | $ 1.77 | $ 1.04 |
Consolidated Statements of Tota
Consolidated Statements of Total Equity (Unaudited) Statement - USD ($) $ in Millions | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Noncontrolling Interest [Member] |
Common Stock, Shares, Outstanding | 48,061,921 | ||||
Beginning balances at Sep. 30, 2020 | $ 871.8 | $ 48.1 | $ 603.9 | $ 218.9 | $ 0.9 |
Net income | 22.1 | 0 | 0 | 22 | 0.1 |
Stock issued under employee incentive plans | 0 | 0 | 0 | 0 | 0 |
Cash paid for shares withheld for taxes | (0.1) | 0 | 0.1 | 0 | 0 |
Stock-based compensation expense | 0.3 | 0 | 0.3 | 0 | 0 |
Ending balances at Dec. 31, 2020 | 894.1 | $ 48.1 | 604.1 | 240.9 | 1 |
Stock issued under employee incentive plans (shares) | 14,722 | ||||
Beginning balances at Sep. 30, 2020 | 871.8 | $ 48.1 | 603.9 | 218.9 | 0.9 |
Net income | 50.5 | ||||
Ending balances at Mar. 31, 2021 | 944.5 | $ 49.1 | 625.3 | 269.3 | 0.8 |
Common Stock, Shares, Outstanding | 48,076,643 | ||||
Beginning balances at Dec. 31, 2020 | 894.1 | $ 48.1 | 604.1 | 240.9 | 1 |
Net income | 28.4 | 0 | 0 | 28.4 | 0 |
Issuance of common stock | $ 23.3 | 1 | 22.3 | 0 | 0 |
Stock Issued During Period, Shares, New Issues | 1,018,503 | ||||
Noncontrolling Interest, Decrease from Redemptions or Purchase of Interests | $ 1.9 | 0 | (1.7) | 0 | (0.2) |
Stock issued under employee incentive plans | 0 | 0 | 0 | 0 | 0 |
Cash paid for shares withheld for taxes | (0.3) | 0 | 0.3 | 0 | 0 |
Stock-based compensation expense | 0.9 | 0 | 0.9 | 0 | 0 |
Ending balances at Mar. 31, 2021 | $ 944.5 | $ 49.1 | 625.3 | 269.3 | 0.8 |
Stock issued under employee incentive plans (shares) | 29,655 | ||||
Common Stock, Shares, Outstanding | 49,124,801 | ||||
Common Stock, Shares, Outstanding | 49,580,389 | ||||
Beginning balances at Sep. 30, 2021 | $ 1,015.9 | $ 49.6 | 636.2 | 329.1 | 1 |
Net income | 40.5 | 0 | 0 | 40.5 | 0 |
Issuance of common stock | 1.7 | $ 0.1 | 1.6 | 0 | 0 |
Stock Issued During Period, Shares, New Issues | 84,547 | ||||
Stock issued under employee incentive plans | 0 | $ 0 | 0 | 0 | 0 |
Cash paid for shares withheld for taxes | (0.1) | 0 | 0.1 | 0 | 0 |
Stock-based compensation expense | 0.4 | 0 | 0.4 | 0 | 0 |
Ending balances at Dec. 31, 2021 | 1,058.4 | $ 49.7 | 638.1 | 369.6 | 1 |
Stock issued under employee incentive plans (shares) | 10,832 | ||||
Beginning balances at Sep. 30, 2021 | 1,015.9 | $ 49.6 | 636.2 | 329.1 | 1 |
Net income | 88.3 | ||||
Ending balances at Mar. 31, 2022 | 1,107.4 | $ 49.7 | 639.3 | 417.4 | 1 |
Common Stock, Shares, Outstanding | 49,675,768 | ||||
Beginning balances at Dec. 31, 2021 | 1,058.4 | $ 49.7 | 638.1 | 369.6 | 1 |
Net income | 47.8 | $ 0 | 0 | 47.8 | 0 |
Stock Issued During Period, Shares, New Issues | 62,576 | ||||
Stock issued under employee incentive plans | 0 | $ 0 | 0 | 0 | 0 |
Cash paid for shares withheld for taxes | (0.4) | 0 | 0.4 | 0 | 0 |
Stock-based compensation expense | 1.6 | 0 | 1.6 | 0 | 0 |
Ending balances at Mar. 31, 2022 | $ 1,107.4 | $ 49.7 | $ 639.3 | $ 417.4 | $ 1 |
Common Stock, Shares, Outstanding | 49,738,344 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 6 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
OPERATING ACTIVITIES | ||
Net income | $ 88.3 | $ 50.5 |
Adjustments: | ||
Depreciation and amortization | 1.3 | 1.5 |
Deferred income taxes | (1.4) | 2.2 |
Equity in earnings of unconsolidated ventures | (1.1) | (0.3) |
Stock-based compensation expense | 2 | 1.2 |
Real estate impairment and land option charges | 6 | 0.9 |
Gain on sale of assets | (0.5) | 0 |
Changes in operating assets and liabilities: | ||
Increase in real estate | (61.1) | (377.3) |
Decrease (increase) in other assets | 3.8 | (6.5) |
Increase in accounts payable and other accrued liabilities | 29.4 | 25.6 |
Increase in accrued development costs | 16.1 | 3.6 |
(Decrease) increase in earnest money deposits on sales contracts | (6.2) | 42.8 |
Decrease in income taxes receivable | 0 | 6.3 |
Net cash provided by (used in) operating activities | 76.6 | (249.5) |
INVESTING ACTIVITIES | ||
Expenditures for property, equipment, software and other | (2.5) | (0.2) |
Return of investment in unconsolidated ventures | 1.5 | 2.2 |
Proceeds from sale of assets | 3.2 | 0 |
Net cash provided by investing activities | 2.2 | 2 |
FINANCING ACTIVITIES | ||
Issuance of common stock | 1.7 | 23.3 |
Purchase of noncontrolling interest | 0 | (2.4) |
Distributions to noncontrolling interests, net | 0 | (0.1) |
Cash paid for shares withheld for taxes | (0.4) | (0.4) |
Net cash provided by financing activities | 1.3 | 20.4 |
Net increase (decrease) in cash and cash equivalents | 80.1 | (227.1) |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | 233.7 | 167.2 |
SUPPLEMENTAL DISCLOSURES OF NON-CASH ACTIVITIES | ||
Note payable issued for real estate | $ 0 | $ 12.5 |
Consolidated Statement of Share
Consolidated Statement of Shareholders' Equity (Paranthetical) - shares | Total | Common Stock [Member] |
Common Stock, Shares, Outstanding | 48,061,921 | |
Stock issued under employee incentive plans (shares) | 14,722 | |
Common Stock, Shares, Outstanding | 48,076,643 | |
Stock Issued During Period, Shares, New Issues | 1,018,503 | |
Stock issued under employee incentive plans (shares) | 29,655 | |
Common Stock, Shares, Outstanding | 49,124,801 | |
Common Stock, Shares, Outstanding | 49,580,389 | |
Stock Issued During Period, Shares, New Issues | 84,547 | |
Stock issued under employee incentive plans (shares) | 10,832 | |
Common Stock, Shares, Outstanding | 49,675,768 | |
Stock Issued During Period, Shares, New Issues | 62,576 | |
Common Stock, Shares, Outstanding | 49,738,344 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited, consolidated financial statements include the accounts of Forestar Group Inc. (Forestar) and all of its 100% owned, majority-owned and controlled subsidiaries, which are collectively referred to as the Company unless the context otherwise requires. The Company accounts for its investment in other entities in which it has significant influence over operations and financial policies using the equity method. All intercompany accounts, transactions and balances have been eliminated in consolidation. Noncontrolling interests in consolidated pass-through entities are recognized before income taxes. The transactions included in net income in the consolidated statements of operations are the same as those that would be presented in comprehensive income. Thus, the Company's net income equates to comprehensive income. The financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, these financial statements reflect all adjustments considered necessary to fairly state the results for the interim periods shown, including normal recurring accruals and other items. These financial statements, including the consolidated balance sheet as of September 30, 2021, which was derived from audited financial statements, do not include all of the information and notes required by GAAP for complete financial statements and should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s annual report on Form 10-K for the fiscal year ended September 30, 2021. In October 2017, Forestar became a majority-owned subsidiary of D.R. Horton, Inc. (D.R. Horton) by virtue of a merger with a wholly-owned subsidiary of D.R. Horton. Immediately following the merger, D.R. Horton owned 75% of the Company's outstanding common stock. In connection with the merger, the Company entered into certain agreements with D.R. Horton including a Stockholder’s Agreement, a Master Supply Agreement, and a Shared Services Agreement. D.R. Horton is considered a related party of Forestar under GAAP. At March 31, 2022, D.R. Horton owned approximately 63% of the Company's outstanding common stock. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. Changes in Presentation and Reclassifications The Company reclassified the change in accrued development costs from the change in accounts payable and other liabilities to the change in accrued development costs in the prior year statement of cash flows to conform to the current year presentation. This reclassification had no net effect on the Company's consolidated operating results, financial position or cash flows. Pending Accounting Standards In March 2020, the Financial Accounting Standards Board (FASB) issued ASU 2020-04, “Reference Rate Reform,” which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (LIBOR) or by another reference rate expected to be discontinued. The guidance was effective beginning March 12, 2020 and can be applied prospectively through December 31, 2022. In January 2021, the FASB issued ASU 2021-01, “Reference Rate Reform - Scope,” which clarified the scope and application of the original guidance. The Company will adopt these standards when LIBOR is discontinued and does not expect such standards to have a material impact on its consolidated financial statements and related disclosures. |
Segment Information
Segment Information | 6 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | Segment InformationThe Company manages its operations through its real estate segment which is its core business and generates substantially all of its revenues. The real estate segment primarily acquires land and develops infrastructure for single-family residential communities, and its revenues generally come from sales of residential single-family finished lots to local, regional and national homebuilders. The Company has other business activities for which the related assets and operating results are immaterial, and therefore are included within the Company's real estate segment. |
Real Estate (Notes)
Real Estate (Notes) | 6 Months Ended |
Mar. 31, 2022 | |
Real Estate [Abstract] | |
Real Estate | Real Estate Real estate consists of: March 31, September 30, (In millions) Developed and under development projects $ 1,861.7 $ 1,824.7 Undeveloped land 98.8 80.5 $ 1,960.5 $ 1,905.2 In the six months ended March 31, 2022, the Company invested $220.4 million for the acquisition of residential real estate and $495.4 million for the development of residential real estate. At March 31, 2022 and September 30, 2021, undeveloped land primarily consisted of undeveloped land which the Company has the contractual right to sell to D.R. Horton at a sales price equal to the carrying value of the land at the time of sale plus additional consideration of 12% to 16% per annum. Each quarter, the Company reviews the performance and outlook for all of its real estate projects for indicators of potential impairment and performs detailed impairment evaluations and analyses when necessary. As of March 31, 2022, the Company performed detailed impairment evaluations of one real estate project with a carrying value of $8.8 million and recorded impairment charges of $3.8 million during the three months ended March 31, 2022 to reduce the carrying value of the impaired real estate project to fair value. There were no impairment charges recorded in the prior year periods. In the three and six months ended March 31, 2022 and 2021, earnest money and pre-acquisition cost write-offs related to land purchase contracts that the Company has terminated or expects to terminate were $1.6 million and $2.2 million, respectively, compared to $0.6 million and $0.9 million in the prior year periods. These land option charges and the impairment discussed above are included in cost of sales in the consolidated statements of operations. |
Revenues (Notes)
Revenues (Notes) | 6 Months Ended |
Mar. 31, 2022 | |
Revenues [Abstract] | |
Revenue from Contract with Customer [Text Block] | Revenues Revenues consist of: Three Months Ended March 31, Six Months Ended March 31, 2022 2021 2022 2021 (In millions) Residential lot sales $ 409.0 $ 280.2 $ 813.1 $ 587.1 Deferred development lot sales 12.5 — 12.5 — Tract sales and other 0.1 6.9 3.6 7.1 $ 421.6 $ 287.1 $ 829.2 $ 594.2 |
Capitalized Interest (Notes)
Capitalized Interest (Notes) | 6 Months Ended |
Mar. 31, 2022 | |
Capitalized Interest [Abstract] | |
Capitalized Interest [Text Block] | Capitalized Interest The Company capitalizes interest costs to real estate throughout the development period (active real estate). Capitalized interest is charged to cost of sales as the related real estate is sold to the buyer. During periods in which the Company’s active real estate is lower than its debt level, a portion of the interest incurred is reflected as interest expense in the period incurred. In the first six months of fiscal 2022 and fiscal 2021, the Company’s active real estate exceeded its debt level, and all interest incurred was capitalized to real estate. The following table summarizes the Company’s interest costs incurred, capitalized and expensed in the three and six months ended March 31, 2022 and 2021. Three Months Ended March 31, Six Months Ended March 31, 2022 2021 2022 2021 (In millions) Capitalized interest, beginning of period $ 52.9 $ 51.0 $ 53.7 $ 48.7 Interest incurred 8.1 11.5 16.3 23.0 Interest charged to cost of sales (10.4) (8.2) (19.4) (17.4) Capitalized interest, end of period $ 50.6 $ 54.3 $ 50.6 $ 54.3 |
Other Assets, Accrued Expenses
Other Assets, Accrued Expenses and Other Liabilities (Notes) | 6 Months Ended |
Mar. 31, 2022 | |
Other Assets, Accrued Expenses and Other Liabilities [Abstract] | |
Other Assets And Other Liabilities [Text Block] | Other Assets, Accrued Expenses and Other Liabilities The Company's other assets at March 31, 2022 and September 30, 2021 were as follows: March 31, September 30, (In millions) Earnest money notes receivable on sales contracts $ 0.4 $ 0.7 Other receivables 0.3 0.4 Lease right of use assets 8.0 6.9 Prepaid expenses 10.2 15.4 Land purchase contract deposits 11.1 10.4 Other assets 1.9 5.3 $ 31.9 $ 39.1 The Company's accrued expenses and other liabilities at March 31, 2022 and September 30, 2021 were as follows: March 31, September 30, (In millions) Accrued employee compensation and benefits $ 9.4 $ 7.9 Accrued property taxes 2.3 3.4 Lease liabilities 8.5 7.3 Accrued interest 7.7 8.5 Contract liabilities 17.7 5.8 Deferred income 6.8 6.8 Income taxes payable 14.7 6.8 Other accrued expenses 9.5 8.9 Other liabilities 1.2 1.3 $ 77.8 $ 56.7 Contract liabilities at March 31, 2022 include $13.5 million related to the Company's remaining unsatisfied performance obligations on 787 deferred development lots that were sold in the period. |
Debt, net (Notes)
Debt, net (Notes) | 6 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt, net | Debt The Company's notes payable at their carrying amounts consist of the following: March 31, September 30, (In millions) Unsecured: Revolving credit facility $ — $ — 3.85% senior notes due 2026 (1) 396.0 395.5 5.0% senior notes due 2028 (1) 296.8 296.5 Other note payable 12.5 12.5 $ 705.3 $ 704.5 ______________ (1) Unamortized debt issuance costs that were deducted from the carrying amounts of the senior notes totaled $7.2 million and $8.0 million at March 31, 2022 and September 30, 2021, respectively. Bank Credit Facility The Company has a $410 million senior unsecured revolving credit facility with an uncommitted accordion feature that could increase the size of the facility to $600 million, subject to certain conditions and availability of additional bank commitments. The maturity date of the facility is April 16, 2025. The facility also provides for the issuance of letters of credit with a sublimit equal to the greater of $100 million and 50% of the revolving credit commitment. Borrowings under the revolving credit facility are subject to a borrowing base calculation based on the book value of the Company's real estate assets and unrestricted cash. Letters of credit issued under the facility reduce the available borrowing capacity. There were no borrowings or repayments under the facility in the six months ended March 31, 2022. At March 31, 2022, there were no borrowings outstanding and $60.5 million of letters of credit issued under the revolving credit facility, resulting in available capacity of $349.5 million. The revolving credit facility includes customary affirmative and negative covenants, events of default and financial covenants. The financial covenants require a minimum level of tangible net worth, a minimum level of liquidity, and a maximum allowable leverage ratio. These covenants are measured as defined in the credit agreement governing the facility and are reported to the lenders quarterly. A failure to comply with these financial covenants could allow the lending banks to terminate the availability of funds under the revolving credit facility or cause any outstanding borrowings to become due and payable prior to maturity. At March 31, 2022, the Company was in compliance with all of the covenants, limitations and restrictions of its revolving credit facility. Senior Notes The Company has outstanding senior notes as described below that were issued pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended. The notes represent senior unsecured obligations that rank equally in right of payment to all existing and future senior unsecured indebtedness and may be redeemed prior to maturity, subject to certain limitations and premiums defined in the indenture agreements. The notes are guaranteed by each of the Company's subsidiaries to the extent such subsidiaries guarantee the Company's revolving credit facility. The Company's $400 million principal amount of 3.85% senior notes (the "2026 notes") mature May 15, 2026 with interest payable semi-annually. On or after May 15, 2023, the 2026 notes may be redeemed at 101.925% of their principal amount plus any accrued and unpaid interest. In accordance with the indenture, the redemption price decreases annually thereafter and the 2026 notes can be redeemed at par on or after May 15, 2025 through maturity. The annual effective interest rate of the 2026 notes after giving effect to the amortization of financing costs is 4.1%. The Company's $300 million principal amount of 5.0% senior notes (the "2028 notes") mature March 1, 2028 with interest payable semi-annually. On or after March 1, 2023, the 2028 notes may be redeemed at 102.5% of their principal amount plus any accrued and unpaid interest. In accordance with the indenture, the redemption price decreases annually thereafter and the 2028 notes can be redeemed at par on or after March 1, 2026 through maturity. The annual effective interest rate of the 2028 notes after giving effect to the amortization of financing costs is 5.2%. The indentures governing the senior notes require that, upon the occurrence of both a change of control and a rating decline (each as defined in the respective indenture), the Company offer to purchase the notes at 101% of their principal amount. If the Company or its restricted subsidiaries dispose of assets, under certain circumstances, the Company will be required to either invest the net cash proceeds from such asset sales in its business within a specified period of time, repay certain senior secured debt or debt of its non-guarantor subsidiaries, or make an offer to purchase a principal amount of the notes equal to the excess net cash proceeds at a purchase price of 100% of their principal amount. The indentures contain covenants that, among other things, restrict the ability of the Company and its restricted subsidiaries to pay dividends or distributions, repurchase equity, prepay subordinated debt and make certain investments; incur additional debt or issue mandatorily redeemable equity; incur liens on assets; merge or consolidate with another company or sell or otherwise dispose of all or substantially all of the Company’s assets; enter into transactions with affiliates; and allow to exist certain restrictions on the ability of subsidiaries to pay dividends or make other payments. At March 31, 2022, the Company was in compliance with all of the limitations and restrictions associated with its senior note obligations. Effective April 30, 2020, the Board of Directors authorized the repurchase of up to $30 million of the Company’s debt securities. The authorization has no expiration date. All of the $30 million authorization was remaining at March 31, 2022. Other Note Payable The Company's other note payable of $12.5 million was issued as part of a transaction to acquire real estate for development. The note is non-recourse and is secured by the underlying real estate, accrues interest at 4.0% per annum and matures in October 2023. |
Earnings per Share (Notes)
Earnings per Share (Notes) | 6 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) per Share | Earnings per Share The computations of basic and diluted earnings per share are as follows: Three Months Ended March 31, Six Months Ended March 31, 2022 2021 2022 2021 (In millions, except share and per share amounts) Numerator: Net income attributable to Forestar Group Inc. $ 47.8 $ 28.4 $ 88.3 $ 50.4 Denominator: Weighted average common shares outstanding — basic 49,820,937 48,412,213 49,752,153 48,270,718 Dilutive effect of stock-based compensation 57,229 97,711 53,364 80,692 Total weighted average shares outstanding — diluted 49,878,166 48,509,924 49,805,517 48,351,410 Basic net income per common share attributable to Forestar Group Inc. $ 0.96 $ 0.59 $ 1.77 $ 1.04 Diluted net income per common share attributable to Forestar Group Inc. $ 0.96 $ 0.59 $ 1.77 $ 1.04 |
Income Taxes (Notes)
Income Taxes (Notes) | 6 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company’s income tax expense for the three and six months ended March 31, 2022 was $15.4 million and $28.4 million compared to $9.2 million and $16.3 million in the prior year periods. The effective tax rate was 24.4% and 24.3% for the three and six months ended March 31, 2022 compared to 24.5% and 24.4% in the prior year periods. The effective tax rate for all periods includes an expense for state income taxes and nondeductible expenses and a benefit related to noncontrolling interests. At March 31, 2022, the Company had deferred tax liabilities, net of deferred tax assets, of $21.9 million. The deferred tax assets were partially offset by a valuation allowance of $1.1 million, resulting in a net deferred tax liability of $23.0 million. At September 30, 2021, deferred tax liabilities, net of deferred tax assets, were $23.2 million. The deferred tax assets were partially offset by a valuation allowance of $1.2 million, resulting in a net deferred tax liability of $24.4 million. The valuation allowance for both periods was recorded because it is more likely than not that a portion of the Company's state deferred tax assets, primarily net operating loss (NOL) carryforwards, will not be realized because the Company is no longer operating in some states or the NOL carryforward periods are too brief to realize the related deferred tax asset. The Company will continue to evaluate both the positive and negative evidence in determining the need for a valuation allowance on its deferred tax assets. Any reversal of the valuation allowance in future periods will impact the effective tax rate. |
Stockholders' Equity (Notes)
Stockholders' Equity (Notes) | 6 Months Ended |
Mar. 31, 2022 | |
Stockholders' Equity Attributable to Parent [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | Stockholders' Equity and Stock-Based Compensation Stockholders' Equity The Company has an effective shelf registration statement, filed with the Securities and Exchange Commission in October 2021, registering $750 million of equity securities, of which $300 million was reserved for sales under its at-the-market equity offering program that became effective in November 2021. In the six months ended March 31, 2022, the Company issued 84,547 shares of common stock under its at-the-market equity offering program for proceeds of $1.7 million, net of commissions and other issuance costs totaling $0.1 million. The Company issued no shares of common stock under its at-the-market equity offering program in the three months ended March 31, 2022. At March 31, 2022, $748.2 million remained available for issuance under the shelf registration statement, of which $298.2 million was reserved for sales under the at-the-market equity offering program. Restricted Stock Units (RSUs) The Company’s Stock Incentive Plan provides for the granting of stock options and restricted stock units to executive officers, other key employees and non-management directors. Restricted stock unit awards may be based on performance (performance-based) or on service over a requisite time period (time-based). RSU equity awards represent the contingent right to receive one share of the Company’s common stock per RSU if the vesting conditions and/or performance criteria are satisfied. The RSUs have no voting rights until vested. In the six months ended March 31, 2022, a total of 394,786 time-based RSUs were granted. The weighted average grant date fair value of these equity awards was $17.76 per unit, and they vest annually in equal installments over periods of three to five years. Total stock-based compensation expense related to the Company's restricted stock units for the three and six months ended March 31, 2022 was $1.6 million and $2.0 million compared to $0.9 million and $1.2 million in the prior year periods. Stock-based compensation expense in the six months ended March 31, 2022 and 2021 included $1.2 million and $0.7 million, respectively, of expense recognized for employees that were retirement eligible on the date of grant. |
Commitments and Contingencies (
Commitments and Contingencies (Notes) | 6 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Contractual Obligations and Off-Balance Sheet Arrangements In support of the Company's residential lot development business, it issues letters of credit under the revolving credit facility and has a surety bond program that provides financial assurance to beneficiaries related to the execution and performance of certain development obligations. At March 31, 2022, the Company had outstanding letters of credit of $60.5 million under the revolving credit facility and surety bonds of $570.8 million issued by third parties to secure performance under various contracts. The Company expects that its performance obligations secured by these letters of credit and bonds will generally be completed in the ordinary course of business and in accordance with the applicable contractual terms. When the Company completes its performance obligations, the related letters of credit and bonds are generally released shortly thereafter, leaving the Company with no continuing obligations. The Company has no material third-party guarantees. Litigation The Company is involved in various legal proceedings that arise from time to time in the ordinary course of business and believes that adequate reserves have been established for any probable losses. The Company does not believe that the outcome of any of these proceedings will have a significant adverse effect on its financial position, long-term results of operations or cash flows. It is possible, however, that charges related to these matters could be significant to the Company's results or cash flows in any one accounting period. |
Related Party Transactions (Not
Related Party Transactions (Notes) | 3 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | Related Party Transactions The Company has a Shared Services Agreement with D.R. Horton whereby D.R. Horton provides the Company with certain administrative, compliance, operational and procurement services. In the six months ended March 31, 2022, selling, general and administrative expense in the consolidated statements of operations includes $2.0 million for these shared services, $3.3 million for the cost of health insurance and other employee benefits and $1.4 million for other corporate and administrative expenses paid by D.R. Horton on behalf of the Company. In the six months ended March 31, 2021, shared services expenses were $2.0 million, the cost of health insurance and other employee benefits was $1.8 million and other corporate and administrative expenses paid by D.R. Horton on behalf of the Company were $1.4 million. Under the terms of the Master Supply Agreement with D.R. Horton, both companies identify land development opportunities to expand the Company's portfolio of assets. At March 31, 2022 and September 30, 2021, the Company owned approximately 64,200 and 64,400 residential lots, respectively, of which D.R. Horton had the following involvement. March 31, September 30, (Dollars in millions) Residential lots under contract to sell to D.R. Horton 19,100 21,000 Residential lots subject to right of first offer with D.R. Horton 17,600 18,200 Earnest money deposits from D.R. Horton for lots under contract $ 134.1 $ 143.1 Earnest money notes from D.R. Horton for lots under contract $ 0.4 $ 0.7 Remaining purchase price of lots under contract with D.R. Horton $ 1,460.8 $ 1,582.7 In the three months ended March 31, 2022 and 2021, the Company sold 5,788 and 3,588 residential lots, and lot sales revenues were $421.5 million and $280.2 million. In the six months ended March 31, 2022 and 2021, the Company sold 10,304 and 7,155 residential lots, and lot sales revenues were $825.6 million and $587.1 million. Lot sales to D.R. Horton and the related revenue in those periods were as follows: Three Months Ended March 31, Six Months Ended March 31, 2022 2021 2022 2021 (Dollars in millions) Residential single-family lots sold to D.R. Horton 4,771 3,358 8,785 6,747 Residential lot sales revenues from sales to D.R. Horton $ 390.2 $ 265.6 $ 718.2 $ 559.6 Tract acres sold to D.R. Horton — 14 — 14 Tract sales revenues from sales to D.R. Horton $ — $ 3.0 $ — $ 3.0 In addition, the net impact of the change in contract liabilities decreased revenues on lot sales to D.R. Horton by $0.5 million and $0.2 million in the three months ended March 31, 2022 and 2021, respectively, and increased revenues on lot sales to D.R. Horton by $1.6 million in the six months ended March 31, 2022. In the three and six months ended March 31, 2022, the Company reimbursed D.R. Horton approximately $2.7 million and $5.4 million for previously paid earnest money and $16.2 million and $37.8 million for pre-acquisition and other due diligence and development costs related to land purchase contracts whereby D.R. Horton assigned its rights under these land purchase contracts to the Company. In the three and six months ended March 31, 2021, the Company reimbursed D.R. Horton approximately $8.0 million and $24.2 million for previously paid earnest money and $7.3 million and $28.2 million for pre-acquisition and other due diligence and development costs. In the three and six months ended March 31, 2022 and 2021, the Company paid D.R. Horton $0.7 million and $1.6 million for land development services compared to $1.2 million and $2.9 million for these services in the prior year periods. These amounts are included in cost of sales in the Company’s consolidated statements of operations. At March 31, 2022 and September 30, 2021, undeveloped land primarily consists of undeveloped land which the Company has the contractual right to sell to D.R. Horton at a sales price equal to the carrying value of the land at the time of sale plus additional consideration of 12% to 16% per annum. At March 31, 2022 and September 30, 2021, accrued expenses and other liabilities on the Company's consolidated balance sheets included $6.6 million and $6.7 million, respectively, owed to D.R. Horton for any accrued and unpaid shared service charges, land purchase contract deposits and due diligence and other development cost reimbursements. |
Fair Value (Notes)
Fair Value (Notes) | 6 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair Value Measurements Fair value is the exchange price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants. In arriving at a fair value measurement, the Company uses a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable. The three levels of inputs used to establish fair value are the following: • Level 1 — Quoted prices in active markets for identical assets or liabilities; • Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and • Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company elected not to use the fair value option for cash and cash equivalents and debt. Non-financial assets measured at fair value on a non-recurring basis primarily include real estate assets, which the company reviews for indicators of potential impairment and performs impairment evaluations when necessary. The following table summarizes the Company’s assets measured at fair value on a nonrecurring basis at March 31, 2022 and September 30, 2021: Fair Value at March 31, September 30, Level 3 (in millions) Real Estate (a) $ 5.0 $ — _____________________ (a) The fair value included in the table above represents only the asset whose carrying value was adjusted to fair value as of March 31, 2022. The fair value was determined using estimated future cash flows of the project discounted at a rate of 16%. For the financial assets and liabilities that the Company does not reflect at fair value, the following tables present both their respective carrying value and fair value at March 31, 2022 and September 30, 2021. Fair Value at March 31, 2022 Carrying Value Level 1 Level 2 Level 3 Total (in millions) Cash and cash equivalents (a) $ 233.7 $ 233.7 $ — $ — $ 233.7 Debt (b) (c) 705.3 — 655.1 12.5 667.6 Fair Value at September 30, 2021 Carrying Value Level 1 Level 2 Level 3 Total (in millions) Cash and cash equivalents (a) $ 153.6 $ 153.6 $ — $ — $ 153.6 Debt (b) (c) 704.5 — 711.2 12.5 723.7 _____________________ (a) The fair values of cash and cash equivalents approximate their carrying values due to their short-term nature and are classified as Level 1 within the fair value hierarchy. (b) At March 31, 2022 and September 30, 2021, debt primarily consisted of the Company's senior notes. The fair value of the senior notes is determined based on quoted market prices, which is classified as Level 2 within the fair value hierarchy. (c) The fair value of the Company's other note payable approximates its carrying value due to its short-term nature and is classified as Level 3 within the fair value hierarchy. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended | 6 Months Ended |
Mar. 31, 2022 | Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Basis of Presentation | Basis of Presentation The accompanying unaudited, consolidated financial statements include the accounts of Forestar Group Inc. (Forestar) and all of its 100% owned, majority-owned and controlled subsidiaries, which are collectively referred to as the Company unless the context otherwise requires. The Company accounts for its investment in other entities in which it has significant influence over operations and financial policies using the equity method. All intercompany accounts, transactions and balances have been eliminated in consolidation. Noncontrolling interests in consolidated pass-through entities are recognized before income taxes. The transactions included in net income in the consolidated statements of operations are the same as those that would be presented in comprehensive income. Thus, the Company's net income equates to comprehensive income. The financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, these financial statements reflect all adjustments considered necessary to fairly state the results for the interim periods shown, including normal recurring accruals and other items. These financial statements, including the consolidated balance sheet as of September 30, 2021, which was derived from audited financial statements, do not include all of the information and notes required by GAAP for complete financial statements and should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s annual report on Form 10-K for the fiscal year ended September 30, 2021. In October 2017, Forestar became a majority-owned subsidiary of D.R. Horton, Inc. (D.R. Horton) by virtue of a merger with a wholly-owned subsidiary of D.R. Horton. Immediately following the merger, D.R. Horton owned 75% of the Company's outstanding common stock. In connection with the merger, the Company entered into certain agreements with D.R. Horton including a Stockholder’s Agreement, a Master Supply Agreement, and a Shared Services Agreement. D.R. Horton is considered a related party of Forestar under GAAP. At March 31, 2022, D.R. Horton owned approximately 63% of the Company's outstanding common stock. | |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. | |
Reclassification, Comparability Adjustment | Changes in Presentation and Reclassifications The Company reclassified the change in accrued development costs from the change in accounts payable and other liabilities to the change in accrued development costs in the prior year statement of cash flows to conform to the current year presentation. This reclassification had no net effect on the Company's consolidated operating results, financial position or cash flows. | |
New Accounting Pronouncements, Policy [Policy Text Block] | Pending Accounting Standards In March 2020, the Financial Accounting Standards Board (FASB) issued ASU 2020-04, “Reference Rate Reform,” which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (LIBOR) or by another reference rate expected to be discontinued. The guidance was effective beginning March 12, 2020 and can be applied prospectively through December 31, 2022. In January 2021, the FASB issued ASU 2021-01, “Reference Rate Reform - Scope,” which clarified the scope and application of the original guidance. The Company will adopt these standards when LIBOR is discontinued and does not expect such standards to have a material impact on its consolidated financial statements and related disclosures. |
Real Estate (Tables)
Real Estate (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Real Estate [Abstract] | |
Schedule of Real Estate Properties | Real estate consists of: March 31, September 30, (In millions) Developed and under development projects $ 1,861.7 $ 1,824.7 Undeveloped land 98.8 80.5 $ 1,960.5 $ 1,905.2 |
Revenues (Tables)
Revenues (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Revenues [Abstract] | |
Revenue from External Customers by Products and Services [Table Text Block] | Revenues consist of: Three Months Ended March 31, Six Months Ended March 31, 2022 2021 2022 2021 (In millions) Residential lot sales $ 409.0 $ 280.2 $ 813.1 $ 587.1 Deferred development lot sales 12.5 — 12.5 — Tract sales and other 0.1 6.9 3.6 7.1 $ 421.6 $ 287.1 $ 829.2 $ 594.2 |
Capitalized Interest (Tables)
Capitalized Interest (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Capitalized Interest [Abstract] | |
Capitalized Interest Costs [Table Text Block] | The following table summarizes the Company’s interest costs incurred, capitalized and expensed in the three and six months ended March 31, 2022 and 2021. Three Months Ended March 31, Six Months Ended March 31, 2022 2021 2022 2021 (In millions) Capitalized interest, beginning of period $ 52.9 $ 51.0 $ 53.7 $ 48.7 Interest incurred 8.1 11.5 16.3 23.0 Interest charged to cost of sales (10.4) (8.2) (19.4) (17.4) Capitalized interest, end of period $ 50.6 $ 54.3 $ 50.6 $ 54.3 |
Other Assets, Accrued Expense_2
Other Assets, Accrued Expenses and Other Liabilities (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Other Assets, Accrued Expenses and Other Liabilities [Abstract] | |
Schedule of Other Assets [Table Text Block] | The Company's other assets at March 31, 2022 and September 30, 2021 were as follows: March 31, September 30, (In millions) Earnest money notes receivable on sales contracts $ 0.4 $ 0.7 Other receivables 0.3 0.4 Lease right of use assets 8.0 6.9 Prepaid expenses 10.2 15.4 Land purchase contract deposits 11.1 10.4 Other assets 1.9 5.3 $ 31.9 $ 39.1 |
Schedule of Accrued Liabilities [Table Text Block] | The Company's accrued expenses and other liabilities at March 31, 2022 and September 30, 2021 were as follows: March 31, September 30, (In millions) Accrued employee compensation and benefits $ 9.4 $ 7.9 Accrued property taxes 2.3 3.4 Lease liabilities 8.5 7.3 Accrued interest 7.7 8.5 Contract liabilities 17.7 5.8 Deferred income 6.8 6.8 Income taxes payable 14.7 6.8 Other accrued expenses 9.5 8.9 Other liabilities 1.2 1.3 $ 77.8 $ 56.7 |
Debt, net - Schedule of Debt (T
Debt, net - Schedule of Debt (Tables) - USD ($) $ in Millions | 6 Months Ended | |
Mar. 31, 2022 | Sep. 30, 2021 | |
Debt Instrument [Line Items] | ||
Long-term Line of Credit | $ 0 | $ 0 |
Debt | $ 705.3 | 704.5 |
Schedule of Long-term Debt Instruments | The Company's notes payable at their carrying amounts consist of the following: March 31, September 30, (In millions) Unsecured: Revolving credit facility $ — $ — 3.85% senior notes due 2026 (1) 396.0 395.5 5.0% senior notes due 2028 (1) 296.8 296.5 Other note payable 12.5 12.5 $ 705.3 $ 704.5 ______________ (1) Unamortized debt issuance costs that were deducted from the carrying amounts of the senior notes totaled $7.2 million and $8.0 million at March 31, 2022 and September 30, 2021, respectively. | |
Senior Notes 3.85% | ||
Debt Instrument [Line Items] | ||
Debt | $ 396 | 395.5 |
Interest rate percentage | 3.85% | |
Senior Notes 5.0% | ||
Debt Instrument [Line Items] | ||
Debt | $ 296.8 | 296.5 |
Interest rate percentage | 5.00% | |
Secured Debt | ||
Debt Instrument [Line Items] | ||
Debt | $ 12.5 | $ 12.5 |
Interest rate percentage | 4.00% |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Attributable to Common Shareholders and Weighted Average Common Shares Outstanding | The computations of basic and diluted earnings per share are as follows: Three Months Ended March 31, Six Months Ended March 31, 2022 2021 2022 2021 (In millions, except share and per share amounts) Numerator: Net income attributable to Forestar Group Inc. $ 47.8 $ 28.4 $ 88.3 $ 50.4 Denominator: Weighted average common shares outstanding — basic 49,820,937 48,412,213 49,752,153 48,270,718 Dilutive effect of stock-based compensation 57,229 97,711 53,364 80,692 Total weighted average shares outstanding — diluted 49,878,166 48,509,924 49,805,517 48,351,410 Basic net income per common share attributable to Forestar Group Inc. $ 0.96 $ 0.59 $ 1.77 $ 1.04 Diluted net income per common share attributable to Forestar Group Inc. $ 0.96 $ 0.59 $ 1.77 $ 1.04 |
Related Party Transactions Rela
Related Party Transactions Related Party Transactions (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions [Table Text Block] | At March 31, 2022 and September 30, 2021, the Company owned approximately 64,200 and 64,400 residential lots, respectively, of which D.R. Horton had the following involvement. March 31, September 30, (Dollars in millions) Residential lots under contract to sell to D.R. Horton 19,100 21,000 Residential lots subject to right of first offer with D.R. Horton 17,600 18,200 Earnest money deposits from D.R. Horton for lots under contract $ 134.1 $ 143.1 Earnest money notes from D.R. Horton for lots under contract $ 0.4 $ 0.7 Remaining purchase price of lots under contract with D.R. Horton $ 1,460.8 $ 1,582.7 In the three months ended March 31, 2022 and 2021, the Company sold 5,788 and 3,588 residential lots, and lot sales revenues were $421.5 million and $280.2 million. In the six months ended March 31, 2022 and 2021, the Company sold 10,304 and 7,155 residential lots, and lot sales revenues were $825.6 million and $587.1 million. Lot sales to D.R. Horton and the related revenue in those periods were as follows: Three Months Ended March 31, Six Months Ended March 31, 2022 2021 2022 2021 (Dollars in millions) Residential single-family lots sold to D.R. Horton 4,771 3,358 8,785 6,747 Residential lot sales revenues from sales to D.R. Horton $ 390.2 $ 265.6 $ 718.2 $ 559.6 Tract acres sold to D.R. Horton — 14 — 14 Tract sales revenues from sales to D.R. Horton $ — $ 3.0 $ — $ 3.0 |
Fair Value Measures and Disclos
Fair Value Measures and Disclosures (Tables) | 6 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Assets Measured on Recurring and Nonrecurring Basis | The following table summarizes the Company’s assets measured at fair value on a nonrecurring basis at March 31, 2022 and September 30, 2021: Fair Value at March 31, September 30, Level 3 (in millions) Real Estate (a) $ 5.0 $ — _____________________ (a) The fair value included in the table above represents only the asset whose carrying value was adjusted to fair value as of March 31, 2022. The fair value was determined using estimated future cash flows of the project discounted at a rate of 16%. |
Fair Value Measurements, Not Measured at Fair Value | For the financial assets and liabilities that the Company does not reflect at fair value, the following tables present both their respective carrying value and fair value at March 31, 2022 and September 30, 2021. Fair Value at March 31, 2022 Carrying Value Level 1 Level 2 Level 3 Total (in millions) Cash and cash equivalents (a) $ 233.7 $ 233.7 $ — $ — $ 233.7 Debt (b) (c) 705.3 — 655.1 12.5 667.6 Fair Value at September 30, 2021 Carrying Value Level 1 Level 2 Level 3 Total (in millions) Cash and cash equivalents (a) $ 153.6 $ 153.6 $ — $ — $ 153.6 Debt (b) (c) 704.5 — 711.2 12.5 723.7 _____________________ (a) The fair values of cash and cash equivalents approximate their carrying values due to their short-term nature and are classified as Level 1 within the fair value hierarchy. (b) At March 31, 2022 and September 30, 2021, debt primarily consisted of the Company's senior notes. The fair value of the senior notes is determined based on quoted market prices, which is classified as Level 2 within the fair value hierarchy. (c) The fair value of the Company's other note payable approximates its carrying value due to its short-term nature and is classified as Level 3 within the fair value hierarchy. |
Basis of Presentation Details (
Basis of Presentation Details (Details) | Mar. 31, 2022 |
Majority Shareholder [Member] | D.R. Horton, Inc. [Member] | |
Entity Information [Line Items] | |
Sale of Stock, Percentage of Ownership after Transaction | 63.00% |
Real Estate - Real Estate (Deta
Real Estate - Real Estate (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Sep. 30, 2021 | |
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | |||||
Real estate | $ 1,960.5 | $ 1,960.5 | $ 1,905.2 | ||
Payments to Acquire Residential Real Estate | 220.4 | ||||
Payments to Develop Real Estate Assets | 495.4 | ||||
Asset Impairment Charges | 3.8 | ||||
Real Estate Carrying Value | 8.8 | 8.8 | |||
Due Diligence Write-Offs | 1.6 | $ 0.6 | $ 2.2 | $ 0.9 | |
D.R. Horton, Inc. [Member] | Maximum [Member] | |||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | |||||
Related Party Transaction, Rate | 16.00% | ||||
D.R. Horton, Inc. [Member] | Minimum [Member] | |||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | |||||
Related Party Transaction, Rate | 12.00% | ||||
Developed and under development projects | |||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | |||||
Real estate | 1,861.7 | $ 1,861.7 | 1,824.7 | ||
Land [Member] | |||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | |||||
Real estate | $ 98.8 | $ 98.8 | $ 80.5 |
Revenues (Details)
Revenues (Details) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2022USD ($)Lot | Mar. 31, 2021USD ($)Lot | Mar. 31, 2022USD ($)Lot | Mar. 31, 2021USD ($)Lot | Sep. 30, 2021USD ($) | |
Revenue from External Customer [Line Items] | |||||
Deferred development lot sales | $ 12.5 | $ 0 | $ 12.5 | $ 0 | |
Deferred income | 6.8 | 6.8 | $ 6.8 | ||
Tract sales and other | 0.1 | 6.9 | 3.6 | 7.1 | |
Revenues | $ 421.6 | $ 287.1 | $ 829.2 | $ 594.2 | |
Number of Lots Sold | Lot | 5,788 | 3,588 | 10,304 | 7,155 | |
Deferred Development Project | |||||
Revenue from External Customer [Line Items] | |||||
Residential lot sales | $ 54.7 | $ 54.7 | |||
Number of Lots Sold | Lot | 787 | 787 | |||
Proceeds from Deposits from Customers | $ 26 | ||||
Real Estate [Member] | Residential Real Estate [Member] | |||||
Revenue from External Customer [Line Items] | |||||
Residential lot sales | 409 | $ 280.2 | $ 813.1 | $ 587.1 | |
Revenues | $ 421.5 | $ 280.2 | $ 825.6 | $ 587.1 |
Capitalized Interest (Details)
Capitalized Interest (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | |
Capitalized Interest Costs [Line Items] | ||||||||
Interest Costs Incurred | $ 8.1 | $ 11.5 | $ 16.3 | $ 23 | ||||
Real Estate Inventory, Capitalized Interest Costs | 50.6 | 54.3 | 50.6 | 54.3 | $ 52.9 | $ 53.7 | $ 51 | $ 48.7 |
Real Estate Inventory, Capitalized Interest Costs, Cost of Sales | $ (10.4) | $ (8.2) | $ (19.4) | $ (17.4) |
Other Assets, Accrued Expense_3
Other Assets, Accrued Expenses and Other Liabilities (Details) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2022USD ($)Lot | Mar. 31, 2021Lot | Mar. 31, 2022USD ($)Lot | Mar. 31, 2021Lot | Sep. 30, 2021USD ($) | |
Schedule of Other Assets, Accrued Expenses and Other Liabilities [Line Items] | |||||
Earnest money notes receivable on sales contracts | $ 0.4 | $ 0.4 | $ 0.7 | ||
Other receivables | 0.3 | 0.3 | 0.4 | ||
Lease right of use assets | 8 | 8 | 6.9 | ||
Prepaid expenses | 10.2 | 10.2 | 15.4 | ||
Land purchase contract deposits | 11.1 | 11.1 | 10.4 | ||
Other assets | 1.9 | 1.9 | 5.3 | ||
Total Other assets | 31.9 | 31.9 | 39.1 | ||
Accrued employee compensation and benefits | 9.4 | 9.4 | 7.9 | ||
Accrued property taxes | 2.3 | 2.3 | 3.4 | ||
Lease liabilities | 8.5 | 8.5 | 7.3 | ||
Accrued interest | 7.7 | 7.7 | 8.5 | ||
Contract with Customer, Liability, Current | 17.7 | 17.7 | 5.8 | ||
Deferred income | 6.8 | 6.8 | 6.8 | ||
Income taxes payable | 14.7 | 14.7 | 6.8 | ||
Other accrued expenses | 9.5 | 9.5 | 8.9 | ||
Other liabilities | 1.2 | 1.2 | 1.3 | ||
Total Accrued expenses and other liabilities | $ 77.8 | $ 77.8 | $ 56.7 | ||
Number of Lots Sold | Lot | 5,788 | 3,588 | 10,304 | 7,155 | |
Deferred Development Project | |||||
Schedule of Other Assets, Accrued Expenses and Other Liabilities [Line Items] | |||||
Contract with Customer, Liability, Current | $ 13.5 | $ 13.5 | |||
Number of Lots Sold | Lot | 787 | 787 |
Debt, net - Additional Informat
Debt, net - Additional Information (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Mar. 31, 2022 | Sep. 30, 2021 | Apr. 30, 2020 | |
Debt Instrument [Line Items] | |||
Line of Credit Facility, Current Borrowing Capacity | $ 410 | ||
Line of Credit Facility, Maximum Borrowing Capacity | 600 | ||
Letter of Credit, Maximum Borrowing Capacity | $ 100 | ||
Letter of Credit, Maximum Borrowing Capacity, Percentage of Revolving Credit Commitment | 50.00% | ||
Repayments of Long-term Lines of Credit | $ 0 | ||
Proceeds from Long-term Lines of Credit | 0 | ||
Long-term Line of Credit | 0 | $ 0 | |
Letters of credit outstanding | 60.5 | ||
Line of Credit Facility, Remaining Borrowing Capacity | 349.5 | ||
Debt | 705.3 | 704.5 | |
Debt Repurchase Program, Authorized Amount | 30 | $ 30 | |
Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Deferred finance costs, net | 7.2 | 8 | |
Senior Notes 3.85% | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 400 | ||
Interest rate percentage | 3.85% | ||
Debt Instrument, Redemption Price, Percentage | 101.925% | ||
Effective interest rate of liability component | 4.10% | ||
Debt | $ 396 | 395.5 | |
Senior Notes 5.0% | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 300 | ||
Interest rate percentage | 5.00% | ||
Debt Instrument, Redemption Price, Percentage | 102.50% | ||
Effective interest rate of liability component | 5.20% | ||
Debt | $ 296.8 | 296.5 | |
Secured Debt | |||
Debt Instrument [Line Items] | |||
Interest rate percentage | 4.00% | ||
Debt | $ 12.5 | $ 12.5 |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Continuing operations | ||||
Net income (loss) attributable to Forestar Group Inc. | $ 47.8 | $ 28.4 | $ 88.3 | $ 50.4 |
Denominator: | ||||
Weighted average common shares outstanding — basic | 49,820,937 | 48,412,213 | 49,752,153 | 48,270,718 |
Dilutive effect of stock-based compensation | 57,229 | 97,711 | 53,364 | 80,692 |
Total weighted average shares outstanding — diluted | 49,878,166 | 48,509,924 | 49,805,517 | 48,351,410 |
Basic net income per common share attributable to Forestar Group Inc. | $ 0.96 | $ 0.59 | $ 1.77 | $ 1.04 |
Diluted net income per common share attributable to Forestar Group Inc. | $ 0.96 | $ 0.59 | $ 1.77 | $ 1.04 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |||||
Income tax expense | $ 15.4 | $ 9.2 | $ 28.4 | $ 16.3 | |
Effective income tax rate, percent | 24.40% | 24.50% | 24.30% | 24.40% | |
Deferred Income Tax Liabilities, Net of Deferred Income Tax Assets | $ 21.9 | $ 21.9 | $ 23.2 | ||
Valuation allowance, deferred tax asset, amount | 1.1 | 1.1 | 1.2 | ||
Deferred tax liability, net | $ 23 | $ 23 | $ 24.4 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Nov. 18, 2021 | Oct. 08, 2021 | |
Class of Stock [Line Items] | ||||||
Equity Securities Registered, Value | $ 750 | |||||
At-the-market Equity Offering Program, Common Stock Available for Issuance | $ 298.2 | $ 298.2 | $ 300 | |||
At-the-market Equity Offering Program, Common Stock Issued | 0 | 84,547 | ||||
At-the-market Equity Offering Program, Net Proceeds | $ 1.7 | |||||
Adjustments to Additional Paid in Capital, Stock Issued, Issuance Costs | 0.1 | |||||
Common Stock Available for Issuance, Value Remaining | $ 748.2 | $ 748.2 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 394,786 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 17.76 | |||||
Stock-based compensation expense | $ 1.6 | $ 0.9 | $ 2 | $ 1.2 | ||
Retirement Eligible | ||||||
Class of Stock [Line Items] | ||||||
Stock-based compensation expense | $ 1.2 | $ 0.7 |
Commitments and Contingencies N
Commitments and Contingencies Narrative (Details) $ in Millions | Mar. 31, 2022USD ($) |
Loss Contingencies [Line Items] | |
Letters of Credit Outstanding, Amount | $ 60.5 |
Special Assessment Bond | $ 570.8 |
Related Party Transactions (Det
Related Party Transactions (Details) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2022USD ($)Lot | Mar. 31, 2021USD ($)Lot | Mar. 31, 2022USD ($)Lot | Mar. 31, 2021USD ($)Lot | Sep. 30, 2021USD ($)Lot | |
Related Party Transaction [Line Items] | |||||
Number of Units in Real Estate Property | Lot | 64,200 | 64,200 | 64,400 | ||
Number of Lots Sold | Lot | 5,788 | 3,588 | 10,304 | 7,155 | |
Revenue, Net (Deprecated 2018-01-31) | $ 421.6 | $ 287.1 | $ 829.2 | $ 594.2 | |
D.R. Horton, Inc. [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related Party Transaction, Selling, General and Administrative Expenses from Transactions with Related Party | 2 | 2 | |||
Related Party Transaction, Expenses from Transactions with Related Party | 3.3 | 1.8 | |||
Costs and Expenses, Related Party | 1.4 | 1.4 | |||
Deferred Revenue, Period Increase (Decrease) | (0.5) | (0.2) | 1.6 | ||
Related Party Transaction, Purchases from Related Party | 0.7 | $ 1.2 | 1.6 | $ 2.9 | |
Due to Related Parties, Current | $ 6.6 | $ 6.6 | $ 6.7 | ||
D.R. Horton, Inc. [Member] | Maximum [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related Party Transaction, Rate | 16.00% | ||||
D.R. Horton, Inc. [Member] | Minimum [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related Party Transaction, Rate | 12.00% | ||||
D.R. Horton, Inc. [Member] | |||||
Related Party Transaction [Line Items] | |||||
Number of Lots Sold | Lot | 4,771 | 3,358 | 8,785 | 6,747 | |
Revenue from Related Parties | $ 390.2 | $ 265.6 | $ 718.2 | $ 559.6 | |
Under Contract [Member] | D.R. Horton, Inc. [Member] | |||||
Related Party Transaction [Line Items] | |||||
Number of Units in Real Estate Property | Lot | 19,100 | 19,100 | 21,000 | ||
Related Party Transaction, Purchase Obligation from Parent | $ 1,460.8 | $ 1,460.8 | $ 1,582.7 | ||
Under Contract [Member] | D.R. Horton, Inc. [Member] | Notes Payable, Other Payables | |||||
Related Party Transaction [Line Items] | |||||
Related Party Deposit Liabilities | 0.4 | 0.4 | 0.7 | ||
Under Contract [Member] | D.R. Horton, Inc. [Member] | Cash | |||||
Related Party Transaction [Line Items] | |||||
Related Party Deposit Liabilities | $ 134.1 | $ 134.1 | $ 143.1 | ||
Right of First Offer [Member] | D.R. Horton, Inc. [Member] | |||||
Related Party Transaction [Line Items] | |||||
Number of Units in Real Estate Property | Lot | 17,600 | 17,600 | 18,200 | ||
Other Expense [Member] | D.R. Horton, Inc. [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related Party Transaction, Amounts of Transaction | $ 16.2 | 7.3 | $ 37.8 | 28.2 | |
Deposits [Member] | D.R. Horton, Inc. [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related Party Transaction, Amounts of Transaction | $ 2.7 | $ 8 | $ 5.4 | $ 24.2 | |
Land [Member] | D.R. Horton, Inc. [Member] | |||||
Related Party Transaction [Line Items] | |||||
Number of Lots Sold | Lot | 0 | 14 | 0 | 14 | |
Revenue from Related Parties | $ 0 | $ 3 | $ 0 | $ 3 | |
Real Estate [Member] | Residential Real Estate [Member] | |||||
Related Party Transaction [Line Items] | |||||
Revenue, Net (Deprecated 2018-01-31) | $ 421.5 | $ 280.2 | $ 825.6 | $ 587.1 |
Fair Value Measurements, Not Me
Fair Value Measurements, Not Measured at Fair Value (Details) $ in Millions | Mar. 31, 2022USD ($) | Sep. 30, 2021USD ($) |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents | $ 233.7 | $ 153.6 |
Debt | $ 705.3 | 704.5 |
Measurement Input, Discount Rate | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other Real Estate Owned, Measurement Input | 0.16 | |
Other Real Estate Owned, Measurement Input | 0.16 | |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and Cash Equivalents, Fair Value Disclosure | $ 233.7 | 153.6 |
Long-term Debt, Fair Value | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and Cash Equivalents, Fair Value Disclosure | 0 | 0 |
Long-term Debt, Fair Value | 655.1 | 711.2 |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and Cash Equivalents, Fair Value Disclosure | 0 | 0 |
Long-term Debt, Fair Value | 12.5 | 12.5 |
Fair Value, Inputs, Level 3 [Member] | Fair Value, Nonrecurring | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets, Fair Value Disclosure | 5 | 0 |
Estimate of Fair Value Measurement [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and Cash Equivalents, Fair Value Disclosure | 233.7 | 153.6 |
Long-term Debt, Fair Value | 667.6 | 723.7 |
Reported Value Measurement [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt | $ 705.3 | $ 704.5 |
Uncategorized Items - for-20220
Label | Element | Value |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | us-gaap_CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents | $ 394,300,000 |