Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2023 | Nov. 13, 2023 | Mar. 31, 2023 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Sep. 30, 2023 | ||
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 Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 283 | ||
Entity Common Stock, Shares Outstanding | 49,909,713 | ||
Documents Incorporated by Reference | Portions of the registrant's proxy statement for its 2024 Annual Meeting of Stockholders are incorporated by reference into Part III of this Form 10-K. | ||
Current Fiscal Year End Date | --09-30 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001406587 | ||
Auditor Name | Ernst & Young LLP | ||
Auditor Firm ID | 42 | ||
Auditor Location | Fort Worth, Texas |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Sep. 30, 2023 | Sep. 30, 2022 |
ASSETS | ||
Cash and cash equivalents | $ 616 | $ 264.8 |
Real estate | 1,790.3 | 2,022.4 |
Investment in unconsolidated ventures | 0.5 | 0.5 |
Property and equipment, net | 5.9 | 5.7 |
Other assets | 58 | 49.6 |
Total assets | 2,470.7 | 2,343 |
LIABILITIES | ||
Accounts payable | 68.4 | 72.2 |
Accrued development costs | 104.1 | 122.3 |
Earnest money on sales contracts | 121.4 | 136.2 |
Deferred tax liability, net | 50.7 | 36.9 |
Accrued expenses and other liabilities | 61.2 | 70.1 |
Debt | 695 | 706 |
Total liabilities | 1,100.8 | 1,143.7 |
Commitments and contingencies (Note 12) | ||
Forestar Group Inc. shareholders’ equity: | ||
Common Stock, Value, Issued | 49.9 | 49.8 |
Additional paid-in capital | 644.2 | 640.6 |
Retained earnings | 674.8 | 507.9 |
Stockholders' equity | 1,368.9 | 1,198.3 |
Noncontrolling interests | 1 | 1 |
Total equity | 1,369.9 | 1,199.3 |
Total liabilities and equity | $ 2,470.7 | $ 2,343 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | |
Earnings Per Share, Diluted [Abstract] | |||
Revenues | $ 1,436.9 | $ 1,519.1 | $ 1,325.8 |
Cost of sales | 1,132.8 | 1,195.1 | 1,096.6 |
Selling, general and administrative expense | 97.7 | 93.6 | 68.4 |
Equity in earnings of unconsolidated ventures | 0 | (1.2) | (0.2) |
Gain on sale of assets | (1.6) | (3.2) | (2.5) |
Interest and other income | (13.6) | (1) | (1.2) |
Loss on extinguishment of debt | 0 | 0 | 18.1 |
Income before income taxes | 221.6 | 235.8 | 146.6 |
Income tax expense | 54.7 | 57 | 36.1 |
Net income | 166.9 | 178.8 | 110.5 |
Net income attributable to noncontrolling interests | 0 | 0 | 0.3 |
Net income attributable to Forestar Group Inc. | $ 166.9 | $ 178.8 | $ 110.2 |
Basic net income per common share | $ 3.34 | $ 3.59 | $ 2.25 |
Weighted average number of common shares | 49,986,526 | 49,818,132 | 48,901,987 |
Diluted net income per common share | $ 3.33 | $ 3.59 | $ 2.25 |
Adjusted weighted average number of common shares | 50,124,113 | 49,849,894 | 48,975,661 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Millions | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Noncontrolling Interest |
Common Stock, Shares, Outstanding | 48,061,921 | ||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Sep. 30, 2020 | $ 871.8 | $ 48.1 | $ 603.9 | $ 218.9 | $ 0.9 |
Net income | 110.5 | 0 | 0 | 110.2 | 0.3 |
Stock Issued During Period, Value, New Issues | 33.4 | 1.4 | 32 | 0 | 0 |
Noncontrolling Interest, Decrease from Redemptions or Purchase of Interests | (1.8) | 0 | (1.7) | 0 | (0.1) |
Issuances of common stock, Value | 0.1 | 0.1 | 0 | 0 | 0 |
Share-Based Payment Arrangement, Decrease for Tax Withholding Obligation | (0.6) | 0 | (0.6) | 0 | 0 |
APIC, Share-Based Payment Arrangement, Increase for Cost Recognition | 2.6 | 0 | 2.6 | 0 | 0 |
Noncontrolling Interest, Decrease from Distributions to Noncontrolling Interest Holders | (0.1) | 0 | 0 | 0 | (0.1) |
Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Sep. 30, 2021 | 1,015.9 | $ 49.6 | 636.2 | 329.1 | 1 |
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture | 69,948 | ||||
Shares Issued During Period, New Issues | 1,448,520 | ||||
Common Stock, Shares, Outstanding | 49,580,389 | ||||
Net income | 178.8 | $ 0 | 0 | 178.8 | 0 |
Stock Issued During Period, Value, New Issues | 1.7 | 0.1 | 1.6 | 0 | 0 |
Issuances of common stock, Value | 0.1 | 0.1 | 0 | 0 | 0 |
Share-Based Payment Arrangement, Decrease for Tax Withholding Obligation | (0.5) | 0 | (0.5) | 0 | 0 |
APIC, Share-Based Payment Arrangement, Increase for Cost Recognition | 3.3 | 0 | 3.3 | 0 | 0 |
Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Sep. 30, 2022 | $ 1,199.3 | $ 49.8 | 640.6 | 507.9 | 1 |
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture | 96,544 | ||||
Shares Issued During Period, New Issues | 84,547 | ||||
Common Stock, Shares, Outstanding | 49,761,480 | 49,761,480 | |||
Net income | $ 166.9 | $ 0 | 0 | 166.9 | 0 |
Issuances of common stock, Value | 0.1 | 0.1 | 0 | 0 | 0 |
Share-Based Payment Arrangement, Decrease for Tax Withholding Obligation | (0.7) | 0 | (0.7) | 0 | 0 |
APIC, Share-Based Payment Arrangement, Increase for Cost Recognition | 4.3 | 0 | 4.3 | 0 | 0 |
Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Sep. 30, 2023 | $ 1,369.9 | $ 49.9 | $ 644.2 | $ 674.8 | $ 1 |
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture | 142,233 | ||||
Common Stock, Shares, Outstanding | 49,903,713 | 49,903,713 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | |
OPERATING ACTIVITIES | |||
Net income | $ 166.9 | $ 178.8 | $ 110.5 |
Adjustments: | |||
Depreciation and amortization | 3 | 2.7 | 2.7 |
Deferred income taxes | 13.8 | 12.5 | 19.2 |
Equity in earnings of unconsolidated ventures | 0 | (1.2) | (0.2) |
Stock-based compensation expense | 4.3 | 3.3 | 2.6 |
Impairments and land option charges | 24 | 12.5 | 3 |
Gain (Loss) on Extinguishment of Debt | 0 | 0 | (18.1) |
Gain on sale of assets | 1.6 | 3.2 | 2.5 |
Other Noncash Income (Expense) | 0 | 0 | (0.1) |
Changes in operating assets and liabilities: | |||
Decrease (increase) in real estate | 206.3 | (142.3) | (585.9) |
Increase in other assets | (7) | (1.6) | (14.8) |
(Decrease) increase in accounts payable and other accrued liabilities | (12.7) | 40.9 | 28 |
(Decrease) increase in accrued development costs | (18.2) | 17.8 | 60.1 |
Increase (Decrease) in Income Taxes Receivable | 0 | 0 | (6.3) |
(Decrease) increase in earnest money deposits on sales contracts | (14.7) | (11.5) | 49.7 |
Net cash provided by (used in) operating activities | 364.1 | 108.7 | (303.1) |
INVESTING ACTIVITIES | |||
Expenditures for property, equipment, software and other | (1.3) | (3.5) | (1.6) |
Return of investment in unconsolidated ventures | 0 | 1.6 | 2.6 |
Proceeds from sale of assets | 1.6 | 3.2 | 0 |
Net cash provided by investing activities | 0.3 | 1.3 | 1 |
FINANCING ACTIVITIES | |||
Issuance of common stock | 0 | 1.7 | 33.4 |
Proceeds from Notes Payable | 0 | 0 | 458 |
Repayments of Notes Payable | 12.5 | 0 | 422 |
Payments of Financing Costs | 0 | 0 | 4.9 |
Proceeds from (Payments to) Noncontrolling Interests | 0 | 0 | (2.4) |
Payments to Noncontrolling Interests | 0 | 0 | 0.1 |
Cash paid for shares withheld for taxes | (0.7) | (0.5) | (0.6) |
Net cash (used in) provided by financing activities | (13.2) | 1.2 | 61.4 |
Increase (decrease) in cash and cash equivalents | 351.2 | 111.2 | (240.7) |
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents, Beginning Balance | 264.8 | 153.6 | 394.3 |
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents, Ending Balance | 616 | 264.8 | 153.6 |
Notes Issued | 0 | 0 | 12.5 |
Income Taxes Paid, Net | $ 44.7 | $ 42.4 | $ 4.3 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2023 | Sep. 30, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in usd per share) | $ 1 | $ 1 |
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 |
Common Stock, Shares, Issued | 49,903,713 | 49,761,480 |
Common Stock, Shares, Outstanding | 49,903,713 | 49,761,480 |
CONSOLIDATED STATEMENTS OF EQ_2
CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Common Stock, Shares, Outstanding | 49,903,713 | 49,761,480 | ||
Shares Issued During Period, New Issues | 84,547 | |||
Share-Based Payment Arrangement, Decrease for Tax Withholding Obligation | $ (0.7) | $ (0.5) | $ (0.6) | |
Stock Issued During Period, Value, New Issues | 1.7 | 33.4 | ||
Net income | 166.9 | 178.8 | 110.5 | |
Issuances of common stock, Value | (0.1) | (0.1) | (0.1) | |
APIC, Share-Based Payment Arrangement, Increase for Cost Recognition | 4.3 | 3.3 | 2.6 | |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | $ 1,369.9 | $ 1,199.3 | $ 1,015.9 | $ 871.8 |
Common Stock | ||||
Common Stock, Shares, Outstanding | 49,903,713 | 49,761,480 | 49,580,389 | 48,061,921 |
Shares Issued During Period, New Issues | 1,448,520 | |||
Share-Based Payment Arrangement, Decrease for Tax Withholding Obligation | $ 0 | $ 0 | $ 0 | |
Stock Issued During Period, Value, New Issues | 0.1 | 1.4 | ||
Net income | 0 | 0 | 0 | |
Issuances of common stock, Value | (0.1) | (0.1) | (0.1) | |
APIC, Share-Based Payment Arrangement, Increase for Cost Recognition | 0 | 0 | 0 | |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | $ 49.9 | $ 49.8 | $ 49.6 | $ 48.1 |
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture | 142,233 | 96,544 | 69,948 | |
Additional Paid-in Capital | ||||
Share-Based Payment Arrangement, Decrease for Tax Withholding Obligation | $ (0.7) | $ (0.5) | $ (0.6) | |
Stock Issued During Period, Value, New Issues | 1.6 | 32 | ||
Net income | 0 | 0 | 0 | |
Issuances of common stock, Value | 0 | 0 | 0 | |
APIC, Share-Based Payment Arrangement, Increase for Cost Recognition | 4.3 | 3.3 | 2.6 | |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 644.2 | 640.6 | 636.2 | 603.9 |
Retained Earnings | ||||
Share-Based Payment Arrangement, Decrease for Tax Withholding Obligation | 0 | 0 | 0 | |
Stock Issued During Period, Value, New Issues | 0 | 0 | ||
Net income | 166.9 | 178.8 | 110.2 | |
Issuances of common stock, Value | 0 | 0 | 0 | |
APIC, Share-Based Payment Arrangement, Increase for Cost Recognition | 0 | 0 | 0 | |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 674.8 | 507.9 | 329.1 | 218.9 |
Noncontrolling Interest | ||||
Share-Based Payment Arrangement, Decrease for Tax Withholding Obligation | 0 | 0 | 0 | |
Stock Issued During Period, Value, New Issues | 0 | 0 | ||
Net income | 0 | 0 | 0.3 | |
Issuances of common stock, Value | 0 | 0 | 0 | |
APIC, Share-Based Payment Arrangement, Increase for Cost Recognition | 0 | 0 | 0 | |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | $ 1 | $ 1 | $ 1 | $ 0.9 |
Accounting Policies
Accounting Policies | 12 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP) and 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. 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. As of September 30, 2023, 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. Revenue Recognition Real estate revenue and related profit are generally recognized at the time of the closing of a sale, when title to and possession of the property are transferred to the buyer. The Company’s performance obligation, to deliver the agreed-upon land or lots, is generally satisfied at closing. However, there may be instances in which the Company has an unsatisfied remaining performance obligation at the time of closing. In these instances, the Company records contract liabilities and recognizes those revenues over time as the performance obligations are completed. Generally, the Company's unsatisfied remaining performance obligations are expected to have an original duration of less than one year. See Note 4. Cash and Cash Equivalents Cash and cash equivalents include cash, other short-term instruments with original maturities of three months or less and proceeds from land and lot closings held for the Company’s benefit at title companies. Real Estate and Cost of Sales Real estate includes the costs of direct land and lot acquisition, land development, capitalized interest and direct overhead costs incurred during land development. All indirect overhead costs, such as compensation of management personnel and insurance costs, are charged to selling, general and administrative expense as incurred. Land and development costs are typically allocated to individual residential lots based on the relative sales value of the lot. Cost of sales includes applicable land and lot acquisition, land development and related costs (both incurred and estimated to be incurred) allocated to each residential lot in the project. Any changes to the estimated total development costs subsequent to the initial lot sales are generally allocated to the remaining lots. The Company receives earnest money deposits from homebuilders for purchases of developed lots. These earnest money deposits are typically released to the homebuilders as lots are sold. Earnest money deposits from customers are subject to mortgages that are secured by the real estate under contract. These mortgages expire when the earnest money is released to homebuilders as lots are sold. The Company has agreements with certain utility or improvement districts to convey water, sewer and other infrastructure-related assets it has constructed in connection with projects within their jurisdiction and receive reimbursements for the cost of these improvements. The reimbursement amounts for these improvements are defined by the district and are based on the allowable costs of the improvements. The transfer is consummated and the Company generally receives payment when the districts have a sufficient tax base to support funding of their bonds. The cost incurred by the Company in constructing these improvements, net of the amount expected to be collected in the future, is included in the Company's land development budgets and in the determination of lot costs. The Company reviews real estate assets held for use for impairment when events or circumstances indicate that their carrying value may not be recoverable. Impairment exists if the carrying amount of the asset is not recoverable from the undiscounted cash flows expected from its use and eventual disposition. The amount of the impairment loss is determined by comparing the carrying value of the asset to its estimated fair value, which is generally determined based on the present value of future cash flows expected from the sale of the asset. Real estate impairments are included in cost of sales in the consolidated statements of operations. See Note 3. Capitalized Interest The Company capitalizes interest costs 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. During fiscal 2023 and 2022, the Company’s active real estate exceeded its debt level, and all interest incurred was capitalized to real estate. See Note 5. Land Purchase Contract Deposits and Pre-Acquisition Costs The Company enters into land and lot purchase contracts to acquire land for the development of residential lots. Under these contracts, the Company will fund a stated deposit in consideration for the right, but not the obligation, to purchase land or lots at a future point in time with predetermined terms. Under the terms of many of the purchase contracts, the deposits are not refundable in the event the Company elects to terminate the contract. Land purchase contract deposits and capitalized pre-acquisition costs are expensed to cost of sales when the Company believes it is probable that it will not acquire the property under contract and will not be able to recover these costs through other means. See Notes 3 and 12. Variable Interests Land purchase contracts can result in the creation of a variable interest in the entity holding the land parcel under contract. There were no variable interest entities reported in the consolidated balance sheets at September 30, 2023 or 2022 because, with regard to each entity, the Company determined it did not control the activities that most significantly impact the variable interest entity’s economic performance. The maximum exposure to losses related to the Company’s unconsolidated variable interest entities is limited to the amounts of the Company’s related deposits. At September 30, 2023 and 2022, the deposits related to these contracts totaled $7.0 million and $10.0 million, respectively, and are included in other assets in the consolidated balance sheets. Property and Equipment Property and equipment are stated at cost less accumulated depreciation. The cost of significant additions and improvements is capitalized and the cost of repairs and maintenance is expensed as incurred. Depreciation generally is recorded using the straight-line method over the estimated useful life of the asset as follows: Estimated Useful Lives September 30, 2023 2022 (In millions) Leasehold improvements 5 to 10 years $ 1.6 $ 1.5 Property and equipment 2 to 10 years 7.0 5.8 Total property and equipment 8.6 7.3 Accumulated depreciation (2.7) (1.6) Property and equipment, net $ 5.9 $ 5.7 Depreciation expense was $1.0 million, $0.7 million and $0.4 million in fiscal 2023, 2022 and 2021, respectively. Income Taxes The Company’s income tax expense is calculated using the asset and liability method, under which deferred tax assets and liabilities are recognized based on the future tax consequences attributable to temporary differences between the financial statement amounts of assets and liabilities and their respective tax bases and attributable to net operating losses and tax credit carryforwards. When assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of its deferred tax assets will not be realized. The realization of deferred tax assets is dependent upon the generation of sufficient taxable income in future periods and in the jurisdictions in which those temporary differences become deductible. The Company records a valuation allowance when it determines it is more likely than not that a portion of the deferred tax assets will not be realized. The accounting for deferred taxes is based upon estimates of future results. Differences between the anticipated and actual outcomes of these future results could have a material impact on the Company’s consolidated results of operations or financial position. Also, changes in existing federal and state tax laws and tax rates could affect future tax results and the valuation of the Company’s deferred tax assets and liabilities. Interest and penalties related to unrecognized tax benefits are recognized in the financial statements as a component of income tax expense. Significant judgment is required to evaluate uncertain tax positions. The Company evaluates its uncertain tax positions on a quarterly basis. The evaluations are based upon a number of factors, including changes in facts or circumstances, changes in tax law, correspondence with tax authorities during the course of audits and effective settlement of audit issues. Changes in the recognition or measurement of uncertain tax positions could result in increases or decreases in the Company’s income tax expense in the period in which the change is made. See Note 9. Stock-Based Compensation The Company’s stockholders formally authorize shares of its common stock to be available for future grants of stock-based compensation awards. From time to time, the Compensation Committee of the Company’s Board of Directors authorizes the grant of stock-based compensation to its employees and directors from these available shares. At September 30, 2023, the outstanding stock-based compensation awards consist of restricted stock units. Grants of restricted stock units vest over a certain number of years as determined by the Compensation Committee of the Board of Directors. Restricted stock units outstanding at September 30, 2023 have a remaining vesting period of up to 4.5 years. The compensation expense for stock-based awards is based on the fair value of the award and is recognized on a straight-line basis over the remaining vesting period. The fair values of restricted stock units are based on the Company’s stock price at the date of grant. See Note 11. Fair Value Measurements The FASB's authoritative guidance for fair value measurements establishes a three-level hierarchy based upon the inputs to the valuation model of an asset or liability. When available, the Company uses quoted market prices in active markets to determine fair value. Non-financial assets measured at fair value on a non-recurring basis principally include real estate assets which the Company reviews for indicators of impairment when events and circumstances indicate that the carrying value is not recoverable. See Note 14. |
Segment Information
Segment Information | 12 Months Ended |
Sep. 30, 2023 | |
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 installs 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) | 12 Months Ended |
Sep. 30, 2023 | |
Real Estate [Abstract] | |
Real Estate | Real Estate Real estate consists of: September 30 2023 2022 (In millions) Developed and under development projects $ 1,760.8 $ 1,932.6 Land held for future development 29.5 89.8 $ 1,790.3 $ 2,022.4 During fiscal 2023, the Company invested $199.4 million for the acquisition of residential real estate and $777.2 million for the development of residential real estate. At September 30, 2023 and 2022, land held for future development 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 for indicators of potential impairment and performs detailed impairment evaluations and analyses when necessary. As a result of this process, the Company recorded real estate impairment charges of $19.4 million and $3.8 million during fiscal 2023 and 2022, respectively. There were no real estate impairment charges recorded in fiscal 2021. During fiscal 2023, 2022 and 2021 land purchase contract deposit and pre-acquisition cost write-offs related to land purchase contracts that the Company has terminated or expects to terminate were $4.6 million $8.7 million and $3.0 million, respectively. These land option charges and the impairments discussed above are included in cost of sales in the consolidated statements of operations. |
Revenue (Notes)
Revenue (Notes) | 12 Months Ended |
Sep. 30, 2023 | |
Revenues [Abstract] | |
Revenue from Contract with Customer [Text Block] | Revenues Revenues consist of: Year Ended September 30, 2023 2022 2021 (In millions) Residential lot sales $ 1,275.7 $ 1,455.5 $ 1,293.1 Deferred development lot sales 29.0 26.8 — Tract sales and other 132.2 36.8 32.7 $ 1,436.9 $ 1,519.1 $ 1,325.8 In fiscal 2022, the Company sold 854 deferred development lots to customers other than D.R. Horton for a total transaction price of $64.1 million. In fiscal 2023 and 2022, the Company recognized $29.0 million and $26.8 million of revenues as a result of its progress towards completion of its remaining unsatisfied performance obligations on these deferred development projects. |
Capitalized Interest
Capitalized Interest | 12 Months Ended |
Sep. 30, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Capitalized Interest | Capitalized Interest The following table summarizes the Company’s interest costs incurred, capitalized and expensed in fiscal 2023, 2022 and 2021. Year Ended September 30, 2023 2022 2021 (In millions) Capitalized interest, beginning of year $ 52.5 $ 53.7 $ 48.7 Interest incurred 32.8 32.9 41.5 Interest charged to cost of sales (26.8) (34.1) (36.5) Capitalized interest, end of year $ 58.5 $ 52.5 $ 53.7 |
Other Assets, Accrued Expenses
Other Assets, Accrued Expenses and Other Liabilities (Notes) | 12 Months Ended |
Sep. 30, 2023 | |
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 September 30, 2023 and 2022 were as follows: September 30, 2023 2022 (In millions) Receivables, net $ 25.7 $ 11.4 Lease right of use assets 7.6 7.5 Prepaid expenses 15.7 18.9 Land purchase contract deposits 7.0 10.0 Other assets 2.0 1.8 $ 58.0 $ 49.6 The Company's accrued expenses and other liabilities at September 30, 2023 and 2022 were as follows: September 30, 2023 2022 (In millions) Accrued employee compensation and benefits $ 11.2 $ 11.6 Accrued property taxes 7.9 6.2 Lease liabilities 8.1 8.1 Accrued interest 7.0 8.0 Contract liabilities 10.0 16.1 Deferred income 4.1 4.1 Income taxes payable 4.4 8.2 Other accrued expenses 4.8 6.8 Other liabilities 3.7 1.0 $ 61.2 $ 70.1 |
Debt (Notes)
Debt (Notes) | 12 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Debt The Company's notes payable at their carrying amounts consist of the following: September 30, 2023 2022 (In millions) Unsecured: Revolving credit facility $ — $ — 3.85% senior notes due 2026 (1) 397.4 396.5 5.0% senior notes due 2028 (1) 297.6 297.0 Other note payable — 12.5 $ 695.0 $ 706.0 ______________ (1) Unamortized debt issuance costs that were deducted from the carrying amounts of the senior notes totaled $5.0 million and $6.5 million at September 30, 2023 and 2022, 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 facility also provides for the issuance of letters of credit with a sublimit equal to the greater of $100 million and 50% of the total revolving credit commitments. 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. The maturity date of the facility is October 28, 2026. At September 30, 2023, there were no borrowings outstanding and $27.7 million of letters of credit issued under the revolving credit facility, resulting in available capacity of $382.3 million. The revolving credit facility is guaranteed by the Company’s wholly-owned subsidiaries that are not immaterial subsidiaries or have not been designated as unrestricted subsidiaries. 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 September 30, 2023, 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 "Securities Act"). 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 (as defined in each indenture), the Company offer to purchase the applicable series of 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 such 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 September 30, 2023, 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 September 30, 2023. Other Note Payable |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings per Share The computations of basic and diluted earnings per share are as follows: Year Ended September 30, 2023 2022 2021 (In millions, except share and per share amounts) Numerator: Net income $ 166.9 $ 178.8 $ 110.2 Denominator: Weighted average common shares outstanding — basic 49,986,526 49,818,132 48,901,987 Dilutive effect of stock-based compensation 137,587 31,762 73,674 Total weighted average shares outstanding — diluted 50,124,113 49,849,894 48,975,661 Basic net income per common share $ 3.34 $ 3.59 $ 2.25 Diluted net income per common share $ 3.33 $ 3.59 $ 2.25 |
Income Taxes
Income Taxes | 12 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The components of the Company's income tax expense are as follows: Year Ended September 30, 2023 2022 2021 (In millions) Current tax expense: Federal $ 33.9 $ 38.3 $ 14.3 State and other 7.0 6.2 2.6 40.9 44.5 16.9 Deferred tax expense: Federal 11.5 10.2 15.8 State and other 2.3 2.3 3.4 13.8 12.5 19.2 Income tax expense $ 54.7 $ 57.0 $ 36.1 A reconciliation of the federal statutory rate to the Company's effective income tax rate follows: Year Ended September 30, 2023 2022 2021 Federal statutory rate 21.0 % 21.0 % 21.0 % State, net of federal benefit 3.4 3.0 3.3 Valuation allowance (0.1) (0.1) — Other 0.4 0.3 0.3 Effective tax rate 24.7 % 24.2 % 24.6 % The effective tax rate for all years includes an expense for state income taxes and nondeductible expenses. Significant components of deferred taxes are: September 30, 2023 2022 (In millions) Deferred tax assets: Real estate $ 10.5 $ 11.5 Employee benefits 2.8 2.8 Net operating loss carryforwards 1.0 1.2 Accruals not deductible until paid 0.8 0.2 Total deferred tax assets 15.1 15.7 Valuation allowance (0.9) (1.0) Total deferred tax assets, net of valuation allowance 14.2 14.7 Deferred tax liabilities: Deferral of profit on lot sales (64.9) (51.6) Total deferred tax liabilities (64.9) (51.6) Deferred tax liability, net $ (50.7) $ (36.9) At September 30, 2023, the Company had tax benefits of $1.0 million related to state NOL carryforwards, of which $0.5 million will expire between 2030 and 2037 while the remaining $0.5 million do not have an expiration date. The Company has a valuation allowance of $0.9 million and $1.0 million at September 30, 2023 and 2022, respectively, because it is more likely than not that a portion of the Company's state deferred tax assets, primarily 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. The Company is subject to a Tax Sharing Agreement with D.R. Horton. The agreement sets forth an equitable method for reimbursements of tax liabilities or benefits between the Company and D.R. Horton related to state and local income, margin or franchise tax returns that are filed on a unitary basis with D.R. Horton. In accordance with the agreement, the Company reimbursed D.R. Horton $1.7 million, $0.7 million and $0.5 million in fiscal 2023, 2022 and 2021, respectively, for its tax expense generated in fiscal 2022, 2021 and 2020. The Company files income tax returns in the U.S. and in various state jurisdictions. The federal statute of limitations for tax years prior to 2020 is closed and the statute of limitations in major state jurisdictions for tax years prior to 2018 is closed. The Company is not currently being audited by the IRS or any state jurisdictions. The Company had no unrecognized tax benefits at September 30, 2023, 2022 and 2021. |
Stockholders' Equity (Notes)
Stockholders' Equity (Notes) | 12 Months Ended |
Sep. 30, 2023 | |
Equity, Attributable to Parent [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | Stockholders' EquityThe 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 the at-the-market equity offering program that became effective in November 2021. In fiscal 2023, there were no shares of common stock issued under the Company's at-the-market equity offering program. At September 30, 2023, $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. |
Compensation Related Costs, Pos
Compensation Related Costs, Postemployment Benefits | 12 Months Ended |
Sep. 30, 2023 | |
Compensation Related Costs [Abstract] | |
Share-based Payment Arrangement | Employee Benefit Plans Retirement Plans The Company has a 401(k) plan for all employees who have been with the Company for a period of six months or more. The Company matches portions of employees’ voluntary contributions. Additional employer contributions in the form of profit sharing may also be made at the Company’s discretion. The Company recorded expense of $1.0 million, $0.8 million and $0.6 million for matching contributions in fiscal 2023, 2022 and 2021, respectively, which is included in selling, general and administrative expense in the Company's consolidated statements of operations. Employee Stock Purchase Plan In October 2022, the Company’s Board of Directors adopted and, in January 2023, the Company’s shareholders approved, the 2022 Employee Stock Purchase Plan (“ESPP”). The ESPP allows eligible employees the opportunity to purchase common stock of the Company at a discount at 6-month intervals through accumulated payroll deductions. Eligible employees purchase common stock of the Company during a purchase period at a discounted price of 85% of the fair market value of the stock on the designated dates of purchase. The price to eligible employees may be further discounted depending on the average fair market value of the stock during the period and certain other criteria. Under the terms of the plan, the total fair market value of common stock that an eligible employee may purchase each year is limited to the lesser of 15% of the employee’s annual compensation or $25,000. The aggregate number of shares of the Company's stock reserved for issuance under the plan is 2.5 million. Our inaugural offering period under the ESPP is July 1, 2023 to December 31, 2023. Through September 30, 2023, we had not yet issued any shares under the ESPP. 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 and have no voting rights during the vesting period. During fiscal 2023, 2022 and 2021, the Company granted time-based RSUs that vest annually in equal installments over periods of three Year Ended September 30, 2023 2022 2021 Number of Restricted Stock Units Weighted Average Grant Date Fair Value Number of Restricted Stock Units Weighted Average Grant Date Fair Value Number of Restricted Stock Units Weighted Average Grant Date Fair Value Outstanding at beginning of year 621,951 $ 18.94 387,154 $ 20.70 285,863 $ 17.47 Granted 511,698 14.76 394,786 17.76 234,000 23.13 Vested (186,812) 18.88 (123,389) 19.98 (92,159) 19.08 Cancelled (61,743) 17.63 (36,600) 19.98 (40,550) 19.66 Outstanding at end of year 885,094 $ 16.63 621,951 $ 18.94 387,154 $ 20.70 The total fair value of shares vested on the vesting date was $3.5 million, $2.5 million and $1.6 million during fiscal 2023, 2022 and 2021, respectively. Total stock-based compensation expense related to the Company's restricted stock units for fiscal 2023, 2022 and 2021 was $4.3 million, $3.3 million and $2.6 million, respectively. These expenses are included in selling, general and administrative expense in the Company's consolidated statements of operations. At September 30, 2023, there was $10.1 million of unrecognized compensation expense related to unvested time-based RSU awards. This expense is expected to be recognized over a weighted average period of 2.9 years. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Other 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 September 30, 2023, the Company had outstanding letters of credit of $27.7 million under the revolving credit facility and surety bonds of $632.3 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. Land Purchase Contracts The Company enters into land purchase contracts to acquire land for the development of residential lots. At September 30, 2023, the Company had total deposits of $7.0 million related to contracts to purchase land with a total remaining purchase price of approximately $427.1 million. The majority of land and lots under contract are currently expected to be purchased within three years. None of the land purchase contracts were subject to specific performance provisions at September 30, 2023. Other Commitments The Company leases facilities and equipment under non-cancelable long-term operating lease agreements. In addition, the Company has various obligations under other office space and equipment leases of less than one year. Rent expense for facilities and equipment was $3.1 million, $2.5 million and $1.7 million in fiscal 2023, 2022 and 2021, respectively. Future minimum rental commitments, by fiscal year, under non-cancelable operating leases having an initial or remaining term in excess of one year are: 2024 — $2.7 million; 2025 — $2.4 million; 2026 — $1.8 million; 2027 — $1.0 million; 2028 — $0.6 million; and $0.1 million thereafter. |
Related Party Disclosures
Related Party Disclosures | 12 Months Ended |
Sep. 30, 2023 | |
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. During fiscal 2023, 2022 and 2021, selling, general and administrative expense in the consolidated statements of operations included $3.8 million, $4.1 million and $4.0 million for these shared services, $8.5 million, $7.4 million and $4.7 million reimbursed to D.R. Horton for the cost of health insurance and other employee benefits and $2.9 million, $6.6 million and $6.1 million for other corporate and administrative expenses paid by D.R. Horton on behalf of the Company. The Company is subject to a Tax Sharing Agreement with D.R. Horton. The agreement sets forth an equitable method for reimbursements of tax liabilities or benefits between the Company and D.R. Horton related to state and local income, margin or franchise tax returns that are filed on a unitary basis with D.R. Horton. In accordance with the agreement, the Company reimbursed D.R. Horton $1.7 million, $0.7 million and $0.5 million in fiscal 2023, 2022 and 2021, respectively, for its tax expense generated in fiscal 2022, 2021 and 2020. Under the terms of the Master Supply Agreement with D.R. Horton, both companies identify land development opportunities to expand Forestar's portfolio of assets. At September 30, 2023 and 2022, the Company owned approximately 52,400 and 61,800 residential lots, of which D.R. Horton had the following involvement. September 30, 2023 2022 (Dollars in millions) Residential lots under contract to sell to D.R. Horton 14,400 17,800 Owned lots subject to right of first offer with D.R. Horton based on executed purchase and sale agreements 17,000 18,900 Earnest money deposits from D.R. Horton for lots under contract $ 117.1 $ 130.1 Remaining sales price of lots under contract with D.R. Horton $ 1,319.2 $ 1,389.7 During fiscal 2023, 2022 and 2021, the Company's residential lot sales totaled 14,040, 17,691 and 15,915 and lot sales revenues were $1.3 billion, $1.5 billion and $1.3 billion. Lot and land sales to D.R. Horton during those periods were as follows. Year Ended September 30, 2023 2022 2021 (Dollars in millions) Residential lots sold to D.R. Horton 12,249 14,895 14,839 Residential lot sales revenues from sales to D.R. Horton $ 1,094.7 $ 1,230.0 $ 1,212.1 Change in contract liabilities on lot sales to D.R. Horton — $ 1.8 $ (5.6) Tract acres sold to D.R. Horton 820 — 85 Tract sales revenues from sales to D.R. Horton $ 114.1 $ — $ 25.9 During fiscal 2023, 2022 and 2021, the Company reimbursed D.R. Horton approximately $10.9 million, $8.7 million and $30.8 million for previously paid earnest money and $21.8 million, $58.9 million and $61.3 million for pre-acquisition and other due diligence and development costs related to land purchase contracts identified by D.R. Horton that the Company independently underwrote and closed. During fiscal 2023, 2022 and 2021, the Company paid D.R. Horton $0.8 million, $2.8 million and $5.7 million for land development services. These amounts are included in cost of sales in the Company’s consolidated statements of operations. At September 30, 2023 and 2022, land held for future development 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. At September 30, 2022, accrued expenses and other liabilities on the Company's consolidated balance sheets included $3.2 million 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
Fair Value | 12 Months Ended |
Sep. 30, 2023 | |
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. 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 September 30, 2023 and 2022. Fair Value at September 30, 2023 Carrying Value Level 1 Level 2 Level 3 Total (in millions) Cash and cash equivalents (a) $ 616.0 $ 616.0 $ — $ — $ 616.0 Debt (b) 695.0 — 633.2 — 633.2 Fair Value at September 30, 2022 Carrying Value Level 1 Level 2 Level 3 Total (in millions) Cash and cash equivalents (a) $ 264.8 $ 264.8 $ — $ — $ 264.8 Debt (b) (c) 706.0 — 570.7 12.5 583.2 _____________________ (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 September 30, 2023 and 2022, debt primarily consisted of the Company's senior notes. The fair value of the senior notes is determined based on quoted market prices in markets that are not active, which is classified as Level 2 within the fair value hierarchy. (c) The fair values 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. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | |
Pay vs Performance Disclosure | |||
Net Income (Loss) | $ 166.9 | $ 178.8 | $ 110.2 |
Insider Trading Policies and Pr
Insider Trading Policies and Procedures | 3 Months Ended |
Sep. 30, 2023 | |
Insider Trading Policies and Procedures [Line Items] | |
Insider Trading Policies and Procedures Adopted | false |
Insider Trading Policies and Procedures Not Adopted | Item 9B. Other Information. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 12 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Accounting, Policy | Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP) and 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. 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. As of September 30, 2023, D.R. Horton owned approximately 63% of the Company's outstanding common stock. |
Use of Estimates, Policy | 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. |
Revenue | Revenue Recognition Real estate revenue and related profit are generally recognized at the time of the closing of a sale, when title to and possession of the property are transferred to the buyer. The Company’s performance obligation, to deliver the agreed-upon land or lots, is generally satisfied at closing. However, there may be instances in which the Company has an unsatisfied remaining performance obligation at the time of closing. In these instances, the Company records contract liabilities and recognizes those revenues over time as the performance obligations are completed. Generally, the Company's unsatisfied remaining performance obligations are expected to have an original duration of less than one year. See Note 4. |
Cash and Cash Equivalents, Policy | Cash and Cash Equivalents Cash and cash equivalents include cash, other short-term instruments with original maturities of three months or less and proceeds from land and lot closings held for the Company’s benefit at title companies. |
Inventory, Real Estate, Policy | Real Estate and Cost of Sales Real estate includes the costs of direct land and lot acquisition, land development, capitalized interest and direct overhead costs incurred during land development. All indirect overhead costs, such as compensation of management personnel and insurance costs, are charged to selling, general and administrative expense as incurred. Land and development costs are typically allocated to individual residential lots based on the relative sales value of the lot. Cost of sales includes applicable land and lot acquisition, land development and related costs (both incurred and estimated to be incurred) allocated to each residential lot in the project. Any changes to the estimated total development costs subsequent to the initial lot sales are generally allocated to the remaining lots. The Company receives earnest money deposits from homebuilders for purchases of developed lots. These earnest money deposits are typically released to the homebuilders as lots are sold. Earnest money deposits from customers are subject to mortgages that are secured by the real estate under contract. These mortgages expire when the earnest money is released to homebuilders as lots are sold. The Company has agreements with certain utility or improvement districts to convey water, sewer and other infrastructure-related assets it has constructed in connection with projects within their jurisdiction and receive reimbursements for the cost of these improvements. The reimbursement amounts for these improvements are defined by the district and are based on the allowable costs of the improvements. The transfer is consummated and the Company generally receives payment when the districts have a sufficient tax base to support funding of their bonds. The cost incurred by the Company in constructing these improvements, net of the amount expected to be collected in the future, is included in the Company's land development budgets and in the determination of lot costs. The Company reviews real estate assets held for use for impairment when events or circumstances indicate that their carrying value may not be recoverable. Impairment exists if the carrying amount of the asset is not recoverable from the undiscounted cash flows expected from its use and eventual disposition. The amount of the impairment loss is determined by comparing the carrying value of the asset to its estimated fair value, which is generally determined based on the present value of future cash flows expected from the sale of the asset. Real estate impairments are included in cost of sales in the consolidated statements of operations. See Note 3. |
Inventory, Interest Capitalization Policy | apitalized Interest The Company capitalizes interest costs 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. During fiscal 2023 and 2022, the Company’s active real estate exceeded its debt level, and all interest incurred was capitalized to real estate. See Note 5. Land Purchase Contract Deposits and Pre-Acquisition Costs The Company enters into land and lot purchase contracts to acquire land for the development of residential lots. Under these contracts, the Company will fund a stated deposit in consideration for the right, but not the obligation, to purchase land or lots at a future point in time with predetermined terms. Under the terms of many of the purchase contracts, the deposits are not refundable in the event the Company elects to terminate the contract. Land purchase contract deposits and capitalized pre-acquisition costs are expensed to cost of sales when the Company believes it is probable that it will not acquire the property under contract and will not be able to recover these costs through other means. See Notes 3 and 12. |
Consolidation, Variable Interest Entity, Policy | Variable Interests Land purchase contracts can result in the creation of a variable interest in the entity holding the land parcel under contract. There were no variable interest entities reported in the consolidated balance sheets at September 30, 2023 or 2022 because, with regard to each entity, the Company determined it did not control the activities that most significantly impact the variable interest entity’s economic performance. The maximum exposure to losses related to the Company’s unconsolidated variable interest entities is limited to the amounts of the Company’s related deposits. At September 30, 2023 and 2022, the deposits related to these contracts totaled $7.0 million and $10.0 million, respectively, and are included in other assets in the consolidated balance sheets. |
Property, Plant and Equipment, Policy | Property and Equipment Property and equipment are stated at cost less accumulated depreciation. The cost of significant additions and improvements is capitalized and the cost of repairs and maintenance is expensed as incurred. Depreciation generally is recorded using the straight-line method over the estimated useful life of the asset as follows: Estimated Useful Lives September 30, 2023 2022 (In millions) Leasehold improvements 5 to 10 years $ 1.6 $ 1.5 Property and equipment 2 to 10 years 7.0 5.8 Total property and equipment 8.6 7.3 Accumulated depreciation (2.7) (1.6) Property and equipment, net $ 5.9 $ 5.7 Depreciation expense was $1.0 million, $0.7 million and $0.4 million in fiscal 2023, 2022 and 2021, respectively. |
Income Tax, Policy | Income Taxes The Company’s income tax expense is calculated using the asset and liability method, under which deferred tax assets and liabilities are recognized based on the future tax consequences attributable to temporary differences between the financial statement amounts of assets and liabilities and their respective tax bases and attributable to net operating losses and tax credit carryforwards. When assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of its deferred tax assets will not be realized. The realization of deferred tax assets is dependent upon the generation of sufficient taxable income in future periods and in the jurisdictions in which those temporary differences become deductible. The Company records a valuation allowance when it determines it is more likely than not that a portion of the deferred tax assets will not be realized. The accounting for deferred taxes is based upon estimates of future results. Differences between the anticipated and actual outcomes of these future results could have a material impact on the Company’s consolidated results of operations or financial position. Also, changes in existing federal and state tax laws and tax rates could affect future tax results and the valuation of the Company’s deferred tax assets and liabilities. Interest and penalties related to unrecognized tax benefits are recognized in the financial statements as a component of income tax expense. Significant judgment is required to evaluate uncertain tax positions. The Company evaluates its uncertain tax positions on a quarterly basis. The evaluations are based upon a number of factors, including changes in facts or circumstances, changes in tax law, correspondence with tax authorities during the course of audits and effective settlement of audit issues. Changes in the recognition or measurement of uncertain tax positions could result in increases or decreases in the Company’s income tax expense in the period in which the change is made. See Note 9. |
Share-based Payment Arrangement | Stock-Based Compensation The Company’s stockholders formally authorize shares of its common stock to be available for future grants of stock-based compensation awards. From time to time, the Compensation Committee of the Company’s Board of Directors authorizes the grant of stock-based compensation to its employees and directors from these available shares. At September 30, 2023, the outstanding stock-based compensation awards consist of restricted stock units. Grants of restricted stock units vest over a certain number of years as determined by the Compensation Committee of the Board of Directors. Restricted stock units outstanding at September 30, 2023 have a remaining vesting period of up to 4.5 years. The compensation expense for stock-based awards is based on the fair value of the award and is recognized on a straight-line basis over the remaining vesting period. The fair values of restricted stock units are based on the Company’s stock price at the date of grant. See Note 11. |
Fair Value Measurement, Policy | Fair Value Measurements The FASB's authoritative guidance for fair value measurements establishes a three-level hierarchy based upon the inputs to the valuation model of an asset or liability. When available, the Company uses quoted market prices in active markets to determine fair value. Non-financial assets measured at fair value on a non-recurring basis principally include real estate assets which the Company reviews for indicators of impairment when events and circumstances indicate that the carrying value is not recoverable. See Note 14. |
Accounting Policies (Tables)
Accounting Policies (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Property, Plant and Equipment | Depreciation generally is recorded using the straight-line method over the estimated useful life of the asset as follows: Estimated Useful Lives September 30, 2023 2022 (In millions) Leasehold improvements 5 to 10 years $ 1.6 $ 1.5 Property and equipment 2 to 10 years 7.0 5.8 Total property and equipment 8.6 7.3 Accumulated depreciation (2.7) (1.6) Property and equipment, net $ 5.9 $ 5.7 Depreciation expense was $1.0 million, $0.7 million and $0.4 million in fiscal 2023, 2022 and 2021, respectively. |
Real Estate (Tables)
Real Estate (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Real Estate [Abstract] | |
Real Estate | Real estate consists of: September 30 2023 2022 (In millions) Developed and under development projects $ 1,760.8 $ 1,932.6 Land held for future development 29.5 89.8 $ 1,790.3 $ 2,022.4 |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Revenues [Abstract] | |
Revenue from External Customers by Products and Services [Table Text Block] | Revenues consist of: Year Ended September 30, 2023 2022 2021 (In millions) Residential lot sales $ 1,275.7 $ 1,455.5 $ 1,293.1 Deferred development lot sales 29.0 26.8 — Tract sales and other 132.2 36.8 32.7 $ 1,436.9 $ 1,519.1 $ 1,325.8 |
Capitalized Interest (Tables)
Capitalized Interest (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Inventory, Interest Capitalization Policy [Table Text Block] | The following table summarizes the Company’s interest costs incurred, capitalized and expensed in fiscal 2023, 2022 and 2021. Year Ended September 30, 2023 2022 2021 (In millions) Capitalized interest, beginning of year $ 52.5 $ 53.7 $ 48.7 Interest incurred 32.8 32.9 41.5 Interest charged to cost of sales (26.8) (34.1) (36.5) Capitalized interest, end of year $ 58.5 $ 52.5 $ 53.7 |
Other Assets, Accrued Expense_2
Other Assets, Accrued Expenses and Other Liabilities (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Other Assets, Accrued Expenses and Other Liabilities [Abstract] | |
Schedule of Other Assets and Other Liabilities [Table Text Block] | The Company's other assets at September 30, 2023 and 2022 were as follows: September 30, 2023 2022 (In millions) Receivables, net $ 25.7 $ 11.4 Lease right of use assets 7.6 7.5 Prepaid expenses 15.7 18.9 Land purchase contract deposits 7.0 10.0 Other assets 2.0 1.8 $ 58.0 $ 49.6 The Company's accrued expenses and other liabilities at September 30, 2023 and 2022 were as follows: September 30, 2023 2022 (In millions) Accrued employee compensation and benefits $ 11.2 $ 11.6 Accrued property taxes 7.9 6.2 Lease liabilities 8.1 8.1 Accrued interest 7.0 8.0 Contract liabilities 10.0 16.1 Deferred income 4.1 4.1 Income taxes payable 4.4 8.2 Other accrued expenses 4.8 6.8 Other liabilities 3.7 1.0 $ 61.2 $ 70.1 Contract liabilities at September 30, 2023 and 2022 include $3.5 million and $12.0 million, respectively, related to the Company's remaining unsatisfied performance obligations on deferred development lot sales. |
Debt - Schedule of Debt (Tables
Debt - Schedule of Debt (Tables) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Debt Instrument [Line Items] | ||
Long-term Debt | $ 695 | $ 706 |
Long-term Line of Credit | $ 0 | 0 |
Schedule of Long-term Debt Instruments | The Company's notes payable at their carrying amounts consist of the following: September 30, 2023 2022 (In millions) Unsecured: Revolving credit facility $ — $ — 3.85% senior notes due 2026 (1) 397.4 396.5 5.0% senior notes due 2028 (1) 297.6 297.0 Other note payable — 12.5 $ 695.0 $ 706.0 ______________ (1) Unamortized debt issuance costs that were deducted from the carrying amounts of the senior notes totaled $5.0 million and $6.5 million at September 30, 2023 and 2022, respectively. | |
Senior Notes 3.85% [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt | $ 397.4 | 396.5 |
Debt Instrument, Interest Rate, Stated Percentage | 3.85% | |
Senior Notes 5.0% [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt | $ 297.6 | 297 |
Debt Instrument, Interest Rate, Stated Percentage | 5% | |
Secured Debt [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt | $ 0 | $ 12.5 |
Debt Instrument, Interest Rate, Stated Percentage | 4% |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The computations of basic and diluted earnings per share are as follows: Year Ended September 30, 2023 2022 2021 (In millions, except share and per share amounts) Numerator: Net income $ 166.9 $ 178.8 $ 110.2 Denominator: Weighted average common shares outstanding — basic 49,986,526 49,818,132 48,901,987 Dilutive effect of stock-based compensation 137,587 31,762 73,674 Total weighted average shares outstanding — diluted 50,124,113 49,849,894 48,975,661 Basic net income per common share $ 3.34 $ 3.59 $ 2.25 Diluted net income per common share $ 3.33 $ 3.59 $ 2.25 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Tax Expense | The components of the Company's income tax expense are as follows: Year Ended September 30, 2023 2022 2021 (In millions) Current tax expense: Federal $ 33.9 $ 38.3 $ 14.3 State and other 7.0 6.2 2.6 40.9 44.5 16.9 Deferred tax expense: Federal 11.5 10.2 15.8 State and other 2.3 2.3 3.4 13.8 12.5 19.2 Income tax expense $ 54.7 $ 57.0 $ 36.1 |
Reconciliation of Federal Statutory Rate to Effective Income Tax Rate on Continuing Operations | A reconciliation of the federal statutory rate to the Company's effective income tax rate follows: Year Ended September 30, 2023 2022 2021 Federal statutory rate 21.0 % 21.0 % 21.0 % State, net of federal benefit 3.4 3.0 3.3 Valuation allowance (0.1) (0.1) — Other 0.4 0.3 0.3 Effective tax rate 24.7 % 24.2 % 24.6 % |
Significant Components of Deferred Taxes | Significant components of deferred taxes are: September 30, 2023 2022 (In millions) Deferred tax assets: Real estate $ 10.5 $ 11.5 Employee benefits 2.8 2.8 Net operating loss carryforwards 1.0 1.2 Accruals not deductible until paid 0.8 0.2 Total deferred tax assets 15.1 15.7 Valuation allowance (0.9) (1.0) Total deferred tax assets, net of valuation allowance 14.2 14.7 Deferred tax liabilities: Deferral of profit on lot sales (64.9) (51.6) Total deferred tax liabilities (64.9) (51.6) Deferred tax liability, net $ (50.7) $ (36.9) |
Compensation Related Costs, P_2
Compensation Related Costs, Postemployment Benefits (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Compensation Related Costs [Abstract] | |
Schedule of Nonvested Restricted Stock Units Activity | The following table provides additional information related to time-based RSU activity during those periods. Year Ended September 30, 2023 2022 2021 Number of Restricted Stock Units Weighted Average Grant Date Fair Value Number of Restricted Stock Units Weighted Average Grant Date Fair Value Number of Restricted Stock Units Weighted Average Grant Date Fair Value Outstanding at beginning of year 621,951 $ 18.94 387,154 $ 20.70 285,863 $ 17.47 Granted 511,698 14.76 394,786 17.76 234,000 23.13 Vested (186,812) 18.88 (123,389) 19.98 (92,159) 19.08 Cancelled (61,743) 17.63 (36,600) 19.98 (40,550) 19.66 Outstanding at end of year 885,094 $ 16.63 621,951 $ 18.94 387,154 $ 20.70 |
Related Party Disclosures (Tabl
Related Party Disclosures (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions [Table Text Block] | September 30, 2023 2022 (Dollars in millions) Residential lots under contract to sell to D.R. Horton 14,400 17,800 Owned lots subject to right of first offer with D.R. Horton based on executed purchase and sale agreements 17,000 18,900 Earnest money deposits from D.R. Horton for lots under contract $ 117.1 $ 130.1 Remaining sales price of lots under contract with D.R. Horton $ 1,319.2 $ 1,389.7 During fiscal 2023, 2022 and 2021, the Company's residential lot sales totaled 14,040, 17,691 and 15,915 and lot sales revenues were $1.3 billion, $1.5 billion and $1.3 billion. Lot and land sales to D.R. Horton during those periods were as follows. Year Ended September 30, 2023 2022 2021 (Dollars in millions) Residential lots sold to D.R. Horton 12,249 14,895 14,839 Residential lot sales revenues from sales to D.R. Horton $ 1,094.7 $ 1,230.0 $ 1,212.1 Change in contract liabilities on lot sales to D.R. Horton — $ 1.8 $ (5.6) Tract acres sold to D.R. Horton 820 — 85 Tract sales revenues from sales to D.R. Horton $ 114.1 $ — $ 25.9 |
Fair Value (Tables)
Fair Value (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value, by Balance Sheet Grouping [Table Text Block] | |
Fair Value, by Balance Sheet Grouping [Table Text Block] | Fair Value at September 30, 2023 Carrying Value Level 1 Level 2 Level 3 Total (in millions) Cash and cash equivalents (a) $ 616.0 $ 616.0 $ — $ — $ 616.0 Debt (b) 695.0 — 633.2 — 633.2 Fair Value at September 30, 2022 Carrying Value Level 1 Level 2 Level 3 Total (in millions) Cash and cash equivalents (a) $ 264.8 $ 264.8 $ — $ — $ 264.8 Debt (b) (c) 706.0 — 570.7 12.5 583.2 |
Accounting Policies (Details)
Accounting Policies (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Jun. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | |
Property, Plant and Equipment [Line Items] | ||||
Property, Plant and Equipment, Gross | $ 8.6 | $ 7.3 | ||
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | (2.7) | (1.6) | ||
Property and equipment, net | 5.9 | 5.7 | ||
Depreciation | $ 1 | 0.7 | $ 0.4 | |
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 4 years 6 months | |||
Majority Shareholder [Member] | D.R. Horton, Inc. [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Sale of Stock, Percentage of Ownership after Transaction | 63% | |||
Building and Building Improvements [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, Plant and Equipment, Gross | $ 1.6 | 1.5 | ||
Property, Plant and Equipment, Other Types [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, Plant and Equipment, Gross | $ 7 | $ 5.8 | ||
Maximum | Building and Building Improvements [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, Plant and Equipment, Useful Life | 10 years | |||
Maximum | Property, Plant and Equipment, Other Types [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, Plant and Equipment, Useful Life | 10 years | |||
Minimum | Building and Building Improvements [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, Plant and Equipment, Useful Life | 5 years | |||
Minimum | Property, Plant and Equipment, Other Types [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, Plant and Equipment, Useful Life | 2 years |
Real Estate - Text (Detail)
Real Estate - Text (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | |
Real Estate Properties [Line Items] | |||
Real estate | $ 1,790.3 | $ 2,022.4 | |
Payments to Acquire Residential Real Estate | 199.4 | ||
Payments to Develop Real Estate Assets | 777.2 | ||
Asset Impairment Charges | 19.4 | 3.8 | $ 0 |
Due Diligence Write-Offs | 4.6 | 8.7 | $ 3 |
Developed and under development projects | |||
Real Estate Properties [Line Items] | |||
Real estate | 1,760.8 | 1,932.6 | |
Land held for future development | |||
Real Estate Properties [Line Items] | |||
Real estate | $ 29.5 | $ 89.8 | |
D.R. Horton, Inc. [Member] | Minimum | |||
Real Estate Properties [Line Items] | |||
Related Party Transaction, Rate | 12% | ||
D.R. Horton, Inc. [Member] | Maximum | |||
Real Estate Properties [Line Items] | |||
Related Party Transaction, Rate | 16% |
Revenue (Details)
Revenue (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenue from External Customer [Line Items] | |||
Revenue from Contract with Customer, Including Assessed Tax | $ 1,275.7 | $ 1,455.5 | $ 1,293.1 |
Deferred development lot sales | 29 | 26.8 | 0 |
Tract sales and other | 132.2 | 36.8 | 32.7 |
Revenues | 1,436.9 | 1,519.1 | 1,325.8 |
Earnest money on sales contracts | 121.4 | 136.2 | |
Deferred Development Project | |||
Revenue from External Customer [Line Items] | |||
Earnest money on sales contracts | 64.1 | ||
Real Estate | Residential Real Estate [Member] | |||
Revenue from External Customer [Line Items] | |||
Revenue from Contract with Customer, Including Assessed Tax | $ 1,300 | $ 1,500 | $ 1,300 |
Capitalized Interest (Details)
Capitalized Interest (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Statement [Line Items] | ||||
Real Estate Inventory, Capitalized Interest Costs | $ 58.5 | $ 52.5 | $ 53.7 | $ 48.7 |
Interest incurred | 32.8 | 32.9 | 41.5 | |
Interest charged to cost of sales | $ (26.8) | $ (34.1) | $ (36.5) |
Other Assets, Accrued Expense_3
Other Assets, Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Sep. 30, 2022 |
Schedule of Other Assets, Accrued Expenses and Other Liabilities [Line Items] | ||
Receivables, net | $ 25.7 | $ 11.4 |
Lease right of use assets | 7.6 | 7.5 |
Prepaid expenses | 15.7 | 18.9 |
Land purchase contract deposits | 7 | 10 |
Other assets | $ 2 | $ 1.8 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other assets | Other assets |
Other assets | $ 58 | $ 49.6 |
Accrued employee compensation and benefits | 11.2 | 11.6 |
Accrued property taxes | 7.9 | 6.2 |
Lease liabilities | 8.1 | 8.1 |
Accrued interest | 7 | 8 |
Contract liabilities | 10 | 16.1 |
Deferred income | 4.1 | 4.1 |
Income taxes payable | 4.4 | 8.2 |
Other accrued expenses | 4.8 | 6.8 |
Other liabilities | $ 3.7 | $ 1 |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | Accounts Payable and Accrued Liabilities | Accounts Payable and Accrued Liabilities |
Accrued expenses and other liabilities | $ 61.2 | $ 70.1 |
Deferred Development Project | ||
Schedule of Other Assets, Accrued Expenses and Other Liabilities [Line Items] | ||
Contract liabilities | $ 3.5 | $ 12 |
Debt - Text (Detail)
Debt - Text (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Apr. 30, 2020 | |
Debt Instrument [Line Items] | |||
Long-term Line of Credit | $ 0 | $ 0 | |
Debt | 695 | 706 | |
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% | ||
Letters of Credit Outstanding, Amount | $ 27.7 | ||
Line of Credit Facility, Remaining Borrowing Capacity | 382.3 | ||
Debt Repurchase Program, Authorized Amount | 30 | $ 30 | |
Secured Debt [Member] | |||
Debt Instrument [Line Items] | |||
Debt | $ 0 | 12.5 | |
Debt Instrument, Interest Rate, Stated Percentage | 4% | ||
Other Notes Payable | $ 12.5 | ||
Senior Notes 3.85% [Member] | |||
Debt Instrument [Line Items] | |||
Debt | $ 397.4 | 396.5 | |
Debt Instrument, Interest Rate, Stated Percentage | 3.85% | ||
Debt Instrument, Face Amount | $ 400 | ||
Debt Instrument, Redemption Price, Percentage | 101.925% | ||
Debt Instrument, Interest Rate, Effective Percentage | 4.10% | ||
Senior Notes 5.0% [Member] | |||
Debt Instrument [Line Items] | |||
Debt | $ 297.6 | 297 | |
Debt Instrument, Interest Rate, Stated Percentage | 5% | ||
Debt Instrument, Face Amount | $ 300 | ||
Debt Instrument, Redemption Price, Percentage | 102.50% | ||
Debt Instrument, Interest Rate, Effective Percentage | 5.20% | ||
Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Debt Issuance Costs, Net | $ 5 | $ 6.5 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||
Net Income (Loss) | $ 166.9 | $ 178.8 | $ 110.2 |
Weighted average number of common shares | 49,986,526 | 49,818,132 | 48,901,987 |
Dilutive effect of stock-based compensation | 137,587 | 31,762 | 73,674 |
Adjusted weighted average number of common shares | 50,124,113 | 49,849,894 | 48,975,661 |
Basic net income per common share | $ 3.34 | $ 3.59 | $ 2.25 |
Diluted net income per common share | $ 3.33 | $ 3.59 | $ 2.25 |
Income Taxes - Income Tax Expen
Income Taxes - Income Tax Expense Table (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | |
Current Income Tax Expense (Benefit), Continuing Operations [Abstract] | |||
Current Federal Tax Expense (Benefit) | $ 33.9 | $ 38.3 | $ 14.3 |
Current State and Local Tax Expense (Benefit) | 7 | 6.2 | 2.6 |
Total | 40.9 | 44.5 | 16.9 |
Deferred Income Tax Expense (Benefit), Continuing Operations [Abstract] | |||
Deferred Federal Income Tax Expense (Benefit) | 11.5 | 10.2 | 15.8 |
Deferred State and Local Income Tax Expense (Benefit) | 2.3 | 2.3 | 3.4 |
Total | 13.8 | 12.5 | 19.2 |
Income Tax Expense (Benefit), Total | $ 54.7 | $ 57 | $ 36.1 |
Income Taxes - Reconciliation T
Income Taxes - Reconciliation Table (Detail) | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21% | 21% | 21% |
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Percent | 3.40% | 3% | 3.30% |
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Percent | (0.10%) | (0.10%) | 0% |
Effective Income Tax Rate Reconciliation, Other Adjustments, Percent | 0.40% | 0.30% | 0.30% |
Effective Income Tax Rate Reconciliation, Percent, Total | 24.70% | 24.20% | 24.60% |
Income Taxes - Deferred Taxes T
Income Taxes - Deferred Taxes Table (Detail) - USD ($) $ in Millions | Sep. 30, 2023 | Sep. 30, 2022 |
Components of Deferred Tax Assets [Abstract] | ||
Deferred Tax Assets, Inventory | $ 10.5 | $ 11.5 |
Deferred Tax Assets, Tax Deferred Expense, Compensation and Benefits, Employee Benefits | 2.8 | 2.8 |
Deferred Tax Assets, Operating Loss Carryforwards | 1 | 1.2 |
Deferred Tax Assets, Other | 0.8 | 0.2 |
Deferred Tax Assets, Gross, Total | 15.1 | 15.7 |
Deferred Tax Assets, Valuation Allowance | (0.9) | (1) |
Deferred Tax Assets, Net of Valuation Allowance, Total | 14.2 | 14.7 |
Components of Deferred Tax Liabilities [Abstract] | ||
Deferred Tax Liabilities, Tax Deferred Income | (64.9) | (51.6) |
Deferred Tax Liabilities, Gross | (64.9) | (51.6) |
Deferred Tax Liabilities, Net | $ (50.7) | $ (36.9) |
Income Taxes - Text (Detail)
Income Taxes - Text (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | |
Operating Loss Carryforwards [Line Items] | |||
Deferred Tax Assets, Operating Loss Carryforwards | $ 1 | $ 1.2 | |
Deferred Tax Assets, Valuation Allowance | (0.9) | (1) | |
Unrecognized Tax Benefits | 0 | 0 | |
State and Local Jurisdiction [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Deferred Tax Assets, Operating Loss Carryforwards | 1 | ||
Deferred Tax Assets, Operating Loss Carryforwards, Subject to Expiration | 0.5 | ||
Deferred Tax Assets, Operating Loss Carryforwards, Not Subject to Expiration | 0.5 | ||
D.R. Horton, Inc. [Member] | Reimbursement To Parent [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Related Party Transaction, Amounts of Transaction | $ 1.7 | $ 0.7 | $ 0.5 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2023 | 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 | $ 300 | |
At-the-market Equity Offering Program, Common Stock Issued | 0 | ||
Common Stock, Shares Authorized | $ 748.2 |
Compensation Related Costs, P_3
Compensation Related Costs, Postemployment Benefits (Details) - USD ($) | 12 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Defined Contribution Plan, Cost | $ 1,000,000 | $ 800,000 | $ 600,000 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Purchase Price of Common Stock, Percent | 8,500% | |||
Employee Stock Purchase Plan, Maximum Percent of Annual Compensation | 1,500% | |||
Fair Market Value Of Common Stock Available For Purchase To Eligible Employees Maximum | $ 25,000 | |||
Stock Issued During Period, Shares, Employee Stock Purchase Plans | 0 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value | $ 3,500,000 | 2,500,000 | 1,600,000 | |
Stock-based compensation expense | 4,300,000 | $ 3,300,000 | $ 2,600,000 | |
Share-based Payment Arrangement, Nonvested Award, Excluding Option, Cost Not yet Recognized, Amount | $ 10,100,000 | |||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 2 years 10 months 24 days | |||
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Number, Beginning Balance | 621,951 | 387,154 | 285,863 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Number, Ending Balance | 885,094 | 621,951 | 387,154 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | $ 16.63 | $ 18.94 | $ 20.70 | $ 17.47 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 511,698 | 394,786 | 234,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 14.76 | $ 17.76 | $ 23.13 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | (186,812) | (123,389) | (92,159) | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value | $ 18.88 | $ 19.98 | $ 19.08 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | (61,743) | (36,600) | (40,550) | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value | $ 17.63 | $ 19.98 | $ 19.66 | |
Restricted Stock Units (RSUs) [Member] | ||||
Stock-based compensation expense | $ 4,300,000 | $ 3,300,000 | $ 2,600,000 | |
Minimum | Restricted Stock Units (RSUs) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | |||
Maximum | Restricted Stock Units (RSUs) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 5 years |
Commitments and Contingencies (
Commitments and Contingencies (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Letters of Credit Outstanding, Amount | $ 27.7 | ||
Special Assessment Bond | 632.3 | ||
Land purchase contract deposits | 7 | $ 10 | |
Purchase Obligation | $ 427.1 | ||
Long-Term Purchase Commitment, Period | 3 years | ||
Operating Lease, Expense | $ 3.1 | $ 2.5 | $ 1.7 |
Lessee, Operating Lease, Liability, to be Paid, Year One | 2.7 | ||
Lessee, Operating Lease, Liability, to be Paid, Year Two | 2.4 | ||
Lessee, Operating Lease, Liability, to be Paid, Year Three | 1.8 | ||
Lessee, Operating Lease, Liability, to be Paid, Year Four | 1 | ||
Lessee, Operating Lease, Liability, to be Paid, Year Five | 0.6 | ||
Lessee, Operating Lease, Liability, to be Paid, after Year Five | $ 0.1 |
Related Party Disclosures (Deta
Related Party Disclosures (Details) $ in Millions | 12 Months Ended | ||
Sep. 30, 2023 USD ($) Lot | Sep. 30, 2022 USD ($) Lot | Sep. 30, 2021 USD ($) Lot | |
Related Party Transaction [Line Items] | |||
Selling, general and administrative expense | $ 97.7 | $ 93.6 | $ 68.4 |
Number of Units in Real Estate Property | Lot | 52,400 | 61,800 | |
Number of Lots Sold | Lot | 17,691 | 15,915 | |
Revenues | $ 1,436.9 | $ 1,519.1 | $ 1,325.8 |
Revenue from Contract with Customer, Including Assessed Tax | 1,275.7 | 1,455.5 | 1,293.1 |
D.R. Horton, Inc. [Member] | |||
Related Party Transaction [Line Items] | |||
Selling, general and administrative expense | 3.8 | 4.1 | 4 |
Employee Benefits and Share-Based Compensation | 8.5 | 7.4 | 4.7 |
Costs and Expenses, Related Party | 2.9 | 6.6 | 6.1 |
Deferred Revenue, Period Increase (Decrease) | 0 | 1.8 | (5.6) |
Related Party Transaction, Purchases from Related Party | 0.8 | 2.8 | 5.7 |
Accrued Liabilities and Other Liabilities | 3.2 | ||
D.R. Horton, Inc. [Member] | Deposits [Member] | |||
Related Party Transaction [Line Items] | |||
Related Party Transaction, Amounts of Transaction | 10.9 | 8.7 | 30.8 |
D.R. Horton, Inc. [Member] | Other Expense [Member] | |||
Related Party Transaction [Line Items] | |||
Related Party Transaction, Amounts of Transaction | 21.8 | 58.9 | 61.3 |
Residential Real Estate [Member] | Real Estate | |||
Related Party Transaction [Line Items] | |||
Revenue from Contract with Customer, Including Assessed Tax | $ 1,300 | $ 1,500 | $ 1,300 |
D.R. Horton, Inc. [Member] | |||
Related Party Transaction [Line Items] | |||
Number of Lots Sold | Lot | 12,249 | 14,895 | 14,839 |
Revenues | $ 1,094.7 | $ 1,230 | $ 1,212.1 |
D.R. Horton, Inc. [Member] | Land held for future development | |||
Related Party Transaction [Line Items] | |||
Number of Lots Sold | Lot | 820 | 0 | 85 |
Revenues | $ 114.1 | $ 0 | $ 25.9 |
D.R. Horton, Inc. [Member] | Under Contract [Member] | |||
Related Party Transaction [Line Items] | |||
Number of Units in Real Estate Property | Lot | 14,400 | 17,800 | |
Related Party Transaction, Purchase Obligation from Parent | $ 1,319.2 | $ 1,389.7 | |
D.R. Horton, Inc. [Member] | Under Contract [Member] | Cash [Member] | |||
Related Party Transaction [Line Items] | |||
Related Party Deposit Liabilities | $ 117.1 | $ 130.1 | |
D.R. Horton, Inc. [Member] | Right of First Offer [Member] | |||
Related Party Transaction [Line Items] | |||
Number of Units in Real Estate Property | Lot | 17,000 | 18,900 |
Fair Value, Not Measured at Fai
Fair Value, Not Measured at Fair Value (Detail) - USD ($) $ in Millions | Sep. 30, 2023 | Sep. 30, 2022 |
Reported Value Measurement [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt | $ 695 | $ 706 |
Estimate of Fair Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and Cash Equivalents, Fair Value Disclosure | 616 | 264.8 |
Long-term Debt, Fair Value | 633.2 | 583.2 |
Cash and cash equivalents | 616 | 264.8 |
Debt | 695 | 706 |
Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and Cash Equivalents, Fair Value Disclosure | 616 | 264.8 |
Long-term Debt, Fair Value | 0 | 0 |
Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and Cash Equivalents, Fair Value Disclosure | 0 | 0 |
Long-term Debt, Fair Value | 633.2 | 570.7 |
Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and Cash Equivalents, Fair Value Disclosure | 0 | 0 |
Long-term Debt, Fair Value | $ 0 | $ 12.5 |