for-20240630

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 June 30, 2024


☐			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 -- 50,653,637 shares as of July 18, 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


	June 30, 2024		September 30, 2023
	(In millions, except share data)
ASSETS
Cash and cash equivalents	$	359.2	$	616.0
Real estate	2,238.7		1,790.3
Investment in unconsolidated ventures	0.3		0.5
Property and equipment, net	6.5		5.9
Other assets	70.3		58.0
Total assets	$	2,675.0	$	2,470.7
LIABILITIES
Accounts payable	$	70.9	$	68.4
Accrued development costs	112.5		104.1
Earnest money on sales contracts	163.8		121.4
Deferred tax liability, net	52.8		50.7
Accrued expenses and other liabilities	56.0		61.2
Debt	706.1		695.0
Total liabilities	1,162.1		1,100.8
Commitments and contingencies (Note 11)
EQUITY
Common stock, par value $1.00 per share, 200,000,000 authorized shares, 50,607,995 and 49,903,713 shares issued and outstanding at June 30, 2024 and September 30, 2023, respectively	50.6		49.9
Additional paid-in capital	664.6		644.2
Retained earnings	796.7		674.8
Stockholders' equity	1,511.9		1,368.9
Noncontrolling interests	1.0		1.0
Total equity	1,512.9		1,369.9
Total liabilities and equity	$	2,675.0	$	2,470.7


	Three Months Ended June 30,				Nine Months Ended June 30,
	2024		2023		2024		2023
	(In millions, except per share amounts)
Revenues	$	318.4	$	368.9	$	958.0	$	887.1
Cost of sales	246.9		283.9		730.6		698.7
Selling, general and administrative expense	29.3		26.4		86.5		71.3

Gain on sale of assets	(5.0)		—		(5.0)		(1.6)
Interest and other income	(4.4)		(3.8)		(15.7)		(7.5)
Income before income taxes	51.6		62.4		161.6		126.2
Income tax expense	12.9		15.6		39.8		31.7
Net income	$	38.7	$	46.8	$	121.8	$	94.5



Basic net income per common share	$	0.76	$	0.94	$	2.42	$	1.89
Weighted average number of common shares	50.8		50.1		50.3		50.0

Diluted net income per common share	$	0.76	$	0.93	$	2.40	$	1.89
Adjusted weighted average number of common shares	51.1		50.2		50.7		50.0


	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
Net income	—		—		45.0		—		45.0
Issuance of common stock (546,174 shares)	0.5		19.2		—		—		19.7
Stock issued under employee benefit plans (146,835 shares)	0.2		—		—		—		0.2
Cash paid for shares withheld for taxes	—		(2.6)		—		—		(2.6)
Stock-based compensation expense	—		1.8		—		—		1.8
Balances at March 31, 2024 (50,602,722 shares)	$	50.6	$	663.3	$	758.0	$	1.0	$	1,472.9
Net income	—		—		38.7		—		38.7
Stock issued under employee benefit plans (5,273 shares)	—		—		—		—		—
Cash paid for shares withheld for taxes	—		(0.1)		—		—		(0.1)
Stock-based compensation expense	—		1.4		—		—		1.4
Balances at June 30, 2024 (50,607,995 shares)	$	50.6	$	664.6	$	796.7	$	1.0	$	1,512.9


	June 30, 2024		September 30, 2023
	(In millions)
Developed and under development projects	$	2,103.3	$	1,760.8
Land held for future development	135.4		29.5
	$	2,238.7	$	1,790.3


	June 30, 2024		September 30, 2023
	(Dollars in millions)
Residential lots under contract to sell to D.R. Horton	19,500		14,400
Owned lots subject to right of first offer with D.R. Horton based on executed purchase and sale agreements	16,700		17,000
Earnest money deposits from D.R. Horton for lots under contract	$	155.4	$	117.1
Remaining sales price of lots under contract with D.R. Horton	$	1,719.8	$	1,319.2


			Fair Value at June 30, 2024
	Carrying Value		Level 1		Level 2		Level 3		Total
	(In millions)
Cash and cash equivalents (a)	$	359.2	$	359.2	$	—	$	—	$	359.2
Debt (b) (c)	706.1		—		671.3		9.9		681.2


			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


	June 30, 2024	September 30, 2023
Lots owned	57,900	52,400
Lots controlled through land and lot purchase contracts	44,200	26,800
Total lots owned and controlled	102,100	79,200

Owned lots under contract to sell to D.R. Horton	19,500	14,400
Owned lots under contract to customers other than D.R. Horton	900	600
Total owned lots under contract	20,400	15,000

Owned lots subject to right of first offer with D.R. Horton based on executed purchase and sale agreements	16,700	17,000
Owned lots fully developed	5,900	6,400
Owned lots fully developed related to lot banking	300	—


Exhibit Number						Exhibit
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 June 30,				Nine Months Ended June 30,
	2024		2023		2024		2023
	(In millions)
Capitalized interest, beginning of period	$	62.1	$	58.8	$	58.4	$	52.5
Interest incurred	8.2		8.2		24.5		24.6
Interest charged to cost of sales	(5.8)		(6.5)		(18.4)		(16.6)
Capitalized interest, end of period	$	64.5	$	60.5	$	64.5	$	60.5


	June 30, 2024		September 30, 2023
	(In millions)
Unsecured:
Revolving credit facility	$	—	$	—
3.85% senior notes due 2026 (1)	398.2		397.4
5.0% senior notes due 2028 (1)	298.0		297.6
Other note payable	9.9		—
	$	706.1	$	695.0


		Forestar Group Inc.

Date:	July 22, 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