for-20231231

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


(Mark One)
☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended December 31, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period From To

Commission File Number: 001-33662

FORESTAR GROUP INC.

(Exact Name of Registrant as Specified in Its Charter)


Delaware						26-1336998
(State or Other Jurisdiction of Incorporation or Organization)						(I.R.S. Employer Identification No.)

2221 E. Lamar Blvd., Suite 790

Arlington, Texas 76006

(Address of Principal Executive Offices, including Zip Code)

(817) 769-1860

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol

Name of Each Exchange on Which Registered

Common Stock, par value $1.00 per share

FOR

New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). x Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐

Accelerated filer

☒

Non-accelerated filer ¨

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes x No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Stock, $1.00 par value -- 49,913,423 shares as of January 19, 2024


			Page
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets			3
Consolidated Statements of Operations			4
Consolidated Statements of Total Equity			5
Consolidated Statements of Cash Flows			6
Notes to Consolidated Financial Statements			7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			16
Item 3. Quantitative and Qualitative Disclosures About Market Risk			25
Item 4. Controls and Procedures			25
PART II — OTHER INFORMATION
Item 1. Legal Proceedings			26
Item 5. Other Information			26
Item 6. Exhibits			27
SIGNATURE			28


	December 31, 2023		September 30, 2023
	(In millions, except share data)
ASSETS
Cash and cash equivalents	$	458.9	$	616.0
Real estate	2,009.8		1,790.3
Investment in unconsolidated ventures	0.5		0.5
Property and equipment, net	5.8		5.9
Other assets	58.8		58.0
Total assets	$	2,533.8	$	2,470.7
LIABILITIES
Accounts payable	$	65.3	$	68.4
Accrued development costs	99.9		104.1
Earnest money on sales contracts	140.9		121.4
Deferred tax liability, net	50.2		50.7
Accrued expenses and other liabilities	63.4		61.2
Debt	705.3		695.0
Total liabilities	1,125.0		1,100.8
Commitments and contingencies (Note 11)
EQUITY
Common stock, par value $1.00 per share, 200,000,000 authorized shares, 49,909,713 and 49,903,713 shares issued and outstanding at December 31, 2023 and September 30, 2023, respectively	49.9		49.9
Additional paid-in capital	644.9		644.2
Retained earnings	713.0		674.8
Stockholders' equity	1,407.8		1,368.9
Noncontrolling interests	1.0		1.0
Total equity	1,408.8		1,369.9
Total liabilities and equity	$	2,533.8	$	2,470.7


	Three Months Ended December 31,
	2023		2022
	(In millions, except per share amounts)
Revenues	$	305.9	$	216.7
Cost of sales	233.0		169.2
Selling, general and administrative expense	28.0		22.9

Gain on sale of assets	—		(1.6)
Interest and other income	(6.3)		(1.7)
Income before income taxes	51.2		27.9
Income tax expense	13.0		7.1
Net income	$	38.2	$	20.8



Basic net income per common share	$	0.76	$	0.42
Weighted average number of common shares	50.1		49.9

Diluted net income per common share	$	0.76	$	0.42
Adjusted weighted average number of common shares	50.5		49.9


	Common Stock		Additional Paid-in Capital		Retained Earnings		Non-controlling Interests		Total Equity
	(In millions, except share amounts)
Balances at September 30, 2023 (49,903,713 shares)	$	49.9	$	644.2	$	674.8	$	1.0	$	1,369.9
Net income	—		—		38.2		—		38.2
Stock issued under employee benefit plans (6,000 shares)	—		—		—		—		—
Cash paid for shares withheld for taxes	—		(0.2)		—		—		(0.2)
Stock-based compensation expense	—		0.9		—		—		0.9
Balances at December 31, 2023 (49,909,713 shares)	$	49.9	$	644.9	$	713.0	$	1.0	$	1,408.8


	December 31, 2023		September 30, 2023
	(In millions)
Developed and under development projects	$	1,895.7	$	1,760.8
Land held for future development	114.1		29.5
	$	2,009.8	$	1,790.3


	December 31, 2023		September 30, 2023
	(Dollars in millions)
Residential lots under contract to sell to D.R. Horton	16,200		14,400
Owned lots subject to right of first offer with D.R. Horton based on executed purchase and sale agreements	17,500		17,000
Earnest money deposits from D.R. Horton for lots under contract	$	136.1	$	117.1
Remaining sales price of lots under contract with D.R. Horton	$	1,500.8	$	1,319.2


			Fair Value at December 31, 2023
	Carrying Value		Level 1		Level 2		Level 3		Total
	(in millions)
Cash and cash equivalents (a)	$	458.9	$	458.9	$	—	$	—	$	458.9
Debt (b) (c)	705.3		—		673.5		9.9		683.4


			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


	December 31, 2023	September 30, 2023
Lots owned	55,400	52,400
Lots controlled through land and lot purchase contracts	27,000	26,800
Total lots owned and controlled	82,400	79,200

Owned lots under contract to sell to D.R. Horton	16,200	14,400
Owned lots under contract to customers other than D.R. Horton	500	600
Total owned lots under contract	16,700	15,000

Owned lots subject to right of first offer with D.R. Horton based on executed purchase and sale agreements	17,500	17,000
Owned lots fully developed	7,300	6,400


Exhibit Number						Exhibit
10.1*						Separation Agreement and General Release, dated as of January 1, 2024.
10.2*						Consulting Agreement dated as of January 2, 2024.
31.1*						Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*						Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*						Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*						Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS**						XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH**						Inline XBRL Taxonomy Extension Schema Document.
101.CAL**						Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF**						Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB**						Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE**						Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104**						Cover Page Interactive Data File (embedded within the Inline XBRL document contained in Exhibit 101).
_____________________
*						Filed or furnished herewith.
**						Submitted electronically herewith.


	Three Months Ended December 31,
	2023		2022
	(In millions)
Capitalized interest, beginning of period	$	58.5	$	52.5
Interest incurred	8.1		8.2
Interest charged to cost of sales	(6.1)		(5.0)
Capitalized interest, end of period	$	60.5	$	55.7


	December 31, 2023		September 30, 2023
	(In millions)
Unsecured:
Revolving credit facility	$	—	$	—
3.85% senior notes due 2026 (1)	397.7		397.4
5.0% senior notes due 2028 (1)	297.7		297.6
Other note payable	9.9		—
	$	705.3	$	695.0


		Forestar Group Inc.

Date:	January 24, 2024	By:	/s/ James D. Allen
			James D. Allen, on behalf of Forestar Group Inc.
			as Executive Vice President and Chief Financial Officer
			(Principal Financial and Principal Accounting Officer)

SEC Form 10-Q filed by Forestar Group Inc