Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jun. 30, 2020 | Jul. 22, 2020 | |
Entity Information [Line Items] | ||
Entity Current Reporting Status | Yes | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2020 | |
Amendment Flag | false | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2020 | |
Trading Symbol | FOR | |
Title of 12(b) Security | Common Stock, par value $1.00 per share | |
Entity Registrant Name | FORESTAR GROUP INC. | |
Entity Central Index Key | 0001406587 | |
Current Fiscal Year End Date | --09-30 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 48,059,921 | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Address, Address Line One | 2221 E. Lamar Blvd., Suite 790 | |
Entity Address, City or Town | Arlington | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 76006 | |
City Area Code | 817 | |
Local Phone Number | 769-1860 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 26-1336998 | |
Entity File Number | 001-33662 | |
Security Exchange Name | NYSE | |
Entity Interactive Data Current | Yes |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Jun. 30, 2020 | Sep. 30, 2019 |
ASSETS | ||
Cash and cash equivalents | $ 355.6 | $ 382.8 |
Real estate | 1,287.1 | 1,028.9 |
Investment in unconsolidated ventures | 5.5 | 7.3 |
Income taxes receivable | 8.9 | 3.2 |
Property and equipment, net | 1.2 | 2.4 |
Deferred tax asset, net | 0 | 17.4 |
Other assets | 27.1 | 13.7 |
Total assets | 1,685.4 | 1,455.7 |
LIABILITIES | ||
Accounts payable | 26 | 16.8 |
Earnest money on sales contracts | 98.9 | 89.9 |
Accrued expenses and other liabilities | 73 | 79.6 |
Debt | 640.6 | 460.5 |
Total liabilities | 838.5 | 646.8 |
Commitments and contingencies (Note 13) | ||
Forestar Group Inc. shareholders’ equity: | ||
Common stock, par value $1.00 per share, 200,000,000 authorized shares, 48,059,921 and 47,997,366 shares issued and outstanding at June 30, 2020 and September 30, 2019, respectively | 48.1 | 48 |
Additional paid-in capital | 603.5 | 602.2 |
Retained earnings | 194.7 | 158.1 |
Stockholders' equity | 846.3 | 808.3 |
Noncontrolling interests | 0.6 | 0.6 |
Total equity | 846.9 | 808.9 |
Total liabilities and equity | $ 1,685.4 | $ 1,455.7 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2020 | Sep. 30, 2019 |
Equity [Abstract] | ||
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 |
Common Stock, Shares, Issued | 48,059,921 | 47,997,366 |
Common Stock, Par or Stated Value Per Share | $ 1 | $ 1 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | ||||
Revenues | $ 177.9 | $ 88.2 | $ 584.3 | $ 192 |
Cost of sales | 157.1 | 75.3 | 510.3 | 149.6 |
Selling, general and administrative expense | 11.2 | 7.9 | 32.8 | 19.8 |
Equity in loss (earnings) of unconsolidated ventures | 0.1 | 0 | (0.6) | (0.5) |
Gain on sale of assets | 0 | (1.5) | (0.1) | (2.4) |
Interest and other income | (0.8) | (1.9) | (4.2) | (4.1) |
Income before income taxes | 10.3 | 8.4 | 46.1 | 29.6 |
Income tax expense | 0.2 | 1.5 | 8.9 | 6 |
Net income | 10.1 | 6.9 | 37.2 | 23.6 |
Net income attributable to noncontrolling interests | 0 | 0 | 0.7 | 3.3 |
Net income attributable to Forestar Group Inc. | $ 10.1 | $ 6.9 | $ 36.5 | $ 20.3 |
Weighted Average Number of Shares Outstanding, Diluted [Abstract] | ||||
Basic (in shares) | 48,050,379 | 41,959,866 | 48,028,957 | 41,957,408 |
Diluted (in shares) | 48,075,210 | 42,010,221 | 48,074,860 | 41,978,339 |
Earnings Per Share [Abstract] | ||||
Earnings Per Share, Basic | $ 0.21 | $ 0.16 | $ 0.76 | $ 0.48 |
NET INCOME (LOSS) PER DILUTED SHARE | ||||
Earnings Per Share, Diluted | $ 0.21 | $ 0.16 | $ 0.76 | $ 0.48 |
Consolidated Statements of Tota
Consolidated Statements of Total Equity (Unaudited) Statement - USD ($) $ in Millions | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Noncontrolling Interest [Member] |
Beginning balances (shares) at Sep. 30, 2018 | 41,939,403 | ||||
Stock issued under employee incentive plans (shares) | 20,463 | ||||
Ending balances (shares) at Dec. 31, 2018 | 41,959,866 | ||||
Beginning balances at Sep. 30, 2018 | $ 674.5 | $ 41.9 | $ 506.3 | $ 125.1 | $ 1.2 |
Net income | 3.9 | 0 | 0 | 3.3 | 0.6 |
Stock issued under employee incentive plans | 0.1 | 0.1 | 0 | 0 | 0 |
Share-based Payment Arrangement, Decrease for Tax Withholding Obligation | (0.1) | 0 | (0.1) | 0 | 0 |
Stock-based compensation expense | 0.1 | 0 | 0.1 | 0 | 0 |
Distributions to noncontrolling interests | (0.5) | 0 | 0 | 0 | (0.5) |
Ending balances at Dec. 31, 2018 | 678 | $ 42 | 506.3 | 128.4 | 1.3 |
Beginning balances (shares) at Sep. 30, 2018 | 41,939,403 | ||||
Ending balances (shares) at Jun. 30, 2019 | 41,959,866 | ||||
Beginning balances at Sep. 30, 2018 | 674.5 | $ 41.9 | 506.3 | 125.1 | 1.2 |
Net income | 23.6 | ||||
Ending balances at Jun. 30, 2019 | 695.3 | $ 42 | 507.3 | 145.4 | 0.6 |
Beginning balances (shares) at Dec. 31, 2018 | 41,959,866 | ||||
Ending balances (shares) at Mar. 31, 2019 | 41,959,866 | ||||
Beginning balances at Dec. 31, 2018 | 678 | $ 42 | 506.3 | 128.4 | 1.3 |
Net income | 12.8 | 0 | 0 | 10.1 | 2.7 |
Stock-based compensation expense | 0.1 | 0 | 0.1 | 0 | 0 |
Distributions to noncontrolling interests | (3.1) | 0 | 0 | 0 | (3.1) |
Ending balances at Mar. 31, 2019 | 687.8 | $ 42 | 506.4 | 138.5 | 0.9 |
Ending balances (shares) at Jun. 30, 2019 | 41,959,866 | ||||
Net income | 6.9 | $ 0 | 0 | 6.9 | 0 |
Stock-based compensation expense | 0.9 | 0 | 0.9 | 0 | 0 |
Distributions to noncontrolling interests | (0.3) | 0 | 0 | 0 | (0.3) |
Ending balances at Jun. 30, 2019 | 695.3 | $ 42 | 507.3 | 145.4 | 0.6 |
Beginning balances (shares) at Sep. 30, 2019 | 47,997,366 | ||||
Stock issued under employee incentive plans (shares) | 27,993 | ||||
Ending balances (shares) at Dec. 31, 2019 | 48,025,359 | ||||
Beginning balances at Sep. 30, 2019 | 808.9 | $ 48 | 602.2 | 158.1 | 0.6 |
Net income | 16.8 | 0 | 0 | 16.9 | (0.1) |
Stock issued under employee incentive plans | 0 | 0 | 0 | 0 | 0 |
Share-based Payment Arrangement, Decrease for Tax Withholding Obligation | (0.2) | 0 | (0.2) | 0 | 0 |
Stock-based compensation expense | 0.5 | 0 | 0.5 | 0 | 0 |
Distributions to noncontrolling interests | (0.4) | 0 | 0 | 0 | (0.4) |
Ending balances at Dec. 31, 2019 | 825.6 | $ 48 | 602.5 | 175 | 0.1 |
Beginning balances (shares) at Sep. 30, 2019 | 47,997,366 | ||||
Ending balances (shares) at Jun. 30, 2020 | 48,059,921 | ||||
Beginning balances at Sep. 30, 2019 | 808.9 | $ 48 | 602.2 | 158.1 | 0.6 |
Net income | 37.2 | ||||
Ending balances at Jun. 30, 2020 | 846.9 | $ 48.1 | 603.5 | 194.7 | 0.6 |
Beginning balances (shares) at Dec. 31, 2019 | 48,025,359 | ||||
Ending balances (shares) at Mar. 31, 2020 | 48,025,359 | ||||
Beginning balances at Dec. 31, 2019 | 825.6 | $ 48 | 602.5 | 175 | 0.1 |
Net income | 10.4 | 0 | 0 | 9.6 | 0.8 |
Stock-based compensation expense | 0.8 | 0 | 0.8 | 0 | 0 |
Ending balances at Mar. 31, 2020 | 836.8 | $ 48 | 603.3 | 184.6 | 0.9 |
Stock issued under employee incentive plans (shares) | 34,562 | ||||
Ending balances (shares) at Jun. 30, 2020 | 48,059,921 | ||||
Net income | 10.1 | $ 0 | 0 | 10.1 | 0 |
Stock issued under employee incentive plans | 0.1 | 0.1 | 0 | 0 | 0 |
Share-based Payment Arrangement, Decrease for Tax Withholding Obligation | (0.1) | 0 | (0.1) | 0 | 0 |
Stock-based compensation expense | 0.3 | 0 | 0.3 | 0 | 0 |
Distributions to noncontrolling interests | (0.3) | 0 | 0 | 0 | (0.3) |
Ending balances at Jun. 30, 2020 | $ 846.9 | $ 48.1 | $ 603.5 | $ 194.7 | $ 0.6 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
OPERATING ACTIVITIES | ||
Net income | $ 37.2 | $ 23.6 |
Adjustments: | ||
Depreciation and amortization | 4.2 | 4.8 |
Deferred income taxes | 17.5 | 5.9 |
Equity in loss (earnings) of unconsolidated ventures | (0.6) | (0.5) |
Distributions of earnings of unconsolidated ventures | 0 | 4.9 |
Proceeds from Operating Activities | 0 | 0.9 |
Stock-based compensation expense | 1.6 | 1.1 |
Production Related Impairments or Charges | 0.5 | 0.5 |
Gain on sale of assets | (0.1) | (2.4) |
Changes in operating assets and liabilities: | ||
Increase in real estate | (258.8) | (551.5) |
Increase in other assets | (4.2) | (4.1) |
(Decrease) increase in accounts payable and other accrued liabilities | (0.2) | 30.2 |
Increase in earnest money deposits on sales contracts | 2.9 | 35.4 |
(Increase) decrease in income taxes receivable | (5.7) | 1.1 |
Net cash used in operating activities | (205.7) | (450.1) |
INVESTING ACTIVITIES | ||
Expenditures for property, equipment, software and other | (0.6) | (0.9) |
Return of investment in unconsolidated ventures | 2.4 | 0.1 |
Proceeds from sale of assets | 1.3 | 0 |
Net cash provided by (used in) investing activities | 3.1 | (0.8) |
FINANCING ACTIVITIES | ||
Proceeds from Notes Payable | 300 | 435 |
Repayments of Notes Payable | (118.9) | (85) |
Deferred financing fees | (4.8) | (6.9) |
Distributions to noncontrolling interests, net | (0.7) | (3.9) |
Cash paid for shares withheld for taxes | (0.2) | (0.1) |
Net cash provided by financing activities | 175.4 | 339.1 |
Net decrease in cash and cash equivalents | (27.2) | (111.8) |
Cash and cash equivalents | $ 355.6 | $ 223.2 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited, consolidated financial statements include the accounts of Forestar Group Inc. (Forestar) and all of its 100% owned, majority-owned and controlled subsidiaries, which are collectively referred to as the Company unless the context otherwise requires. The Company accounts for its investment in other entities in which it has significant influence over operations and financial policies using the equity method. All intercompany accounts, transactions and balances have been eliminated in consolidation. Noncontrolling interests in consolidated pass-through entities are recognized before income taxes. The transactions included in net income in the consolidated statements of operations are the same as those that would be presented in comprehensive income. Thus, the Company's net income equates to comprehensive income. The financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, these financial statements reflect all adjustments considered necessary to fairly state the results for the interim periods shown, including normal recurring accruals and other items. These financial statements, including the consolidated balance sheet as of September 30, 2019, which was derived from audited financial statements, do not include all of the information and notes required by GAAP for complete financial statements and should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s annual report on Form 10-K for the fiscal year ended September 30, 2019. In October 2017, Forestar became a majority-owned subsidiary of D.R. Horton, Inc. (D.R. Horton) by virtue of a merger with a wholly-owned subsidiary of D.R. Horton. Immediately following the merger, D.R. Horton owned 75% of the Company's outstanding common stock. In connection with the merger, the Company entered into certain agreements with D.R. Horton including a Stockholder’s Agreement, a Master Supply Agreement, and a Shared Services Agreement. D.R. Horton is considered a related party of Forestar under GAAP. At June 30, 2020, D.R. Horton owned approximately 65% 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. Adoption of New Accounting Standard In February 2016, the FASB issued ASU 2016-02, “Leases,” which requires that lease assets and liabilities be recognized on the balance sheet and that key information about leasing arrangements be disclosed. The guidance was effective for the Company beginning October 1, 2019 and did not have a material impact on its consolidated financial position, results of operations or cash flows. As a result of the adoption of this standard on October 1, 2019, the Company recorded right of use assets of $2.7 million and lease liabilities of $2.9 million. Lease right of use assets are included in other assets and lease liabilities are included in accrued expenses and other liabilities in the consolidated balance sheet. Pending Accounting Standards In December 2019, the FASB issued ASU 2019-12 related to simplifying the accounting for income taxes. The guidance is effective for the Company beginning October 1, 2021, although early adoption is permitted. The Company is currently evaluating the impact of this guidance, and it is not expected to have a material impact on its consolidated financial position, results of operations or cash flows. In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform,” which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (LIBOR) or by another reference rate expected to be discontinued. The guidance was effective beginning March 12, 2020 and can be applied prospectively through December 31, 2022. The Company will adopt this standard when LIBOR is discontinued and does not expect it to have a material impact on its consolidated financial statements and related disclosures. |
Segment Information
Segment Information | 9 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | Segment InformationThe Company manages its operations through its real estate segment which is its core business and generates substantially all of its revenues. The real estate segment primarily acquires land and develops infrastructure for single-family residential communities and its revenues generally come from sales of residential single-family finished lots to local, regional and national homebuilders. The Company has other business activities for which the related assets and operating results are immaterial, and therefore, are included within the Company's real estate segment. |
Real Estate (Notes)
Real Estate (Notes) | 9 Months Ended |
Jun. 30, 2020 | |
Real Estate [Abstract] | |
Real Estate | Real Estate Real estate consists of: June 30, September 30, (In millions) Developed and under development projects $ 1,271.7 $ 1,011.8 Undeveloped land 15.4 17.1 $ 1,287.1 $ 1,028.9 In the nine months ended June 30, 2020, the Company invested $385.3 million for the acquisition of residential real estate and $348.6 million for the development of residential real estate. At June 30, 2020 and September 30, 2019, undeveloped land primarily consists of undeveloped land which the Company has the contractual right to sell to D.R. Horton within approximately one year of its purchase or, if D.R. Horton elects, at an earlier date, at a sales price equal to the carrying value of the land at the time of sale plus additional consideration of 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, no real estate impairment charges were recorded for any period presented in the consolidated statements of operations. Real estate impairments, if any, and the land option charges discussed below are included in cost of sales in the consolidated statements of operations. During the three and nine months ended June 30, 2020, earnest money and pre-acquisition cost write-offs related to land purchase contracts that the Company has terminated or expects to terminate were $0.1 million and $0.5 million, respectively, compared to $0.1 million in both periods of fiscal 2019. During the latter part of March and in April, the impacts of COVID-19 (C-19) and the related widespread reductions in economic activity affected the Company’s business operations and the demand for residential lots. The Company’s lot sales pace declined as homebuilders slowed their purchases of lots to adjust to expected lower levels of home sales orders as a result of the pandemic. However, as economic activity and housing market conditions began to improve during the latter part of the quarter, the lot sales pace increased. There is significant uncertainty regarding the extent to which and how long C-19 and its related effects will impact the U.S. economy, capital markets and demand for the Company's lots. The extent to which C-19 impacts the Company’s operational and financial performance will depend on future developments, including the duration and spread of C-19 and the impact on the Company’s customers, trade partners and employees, all of which are highly uncertain and cannot be predicted. If economic and housing market conditions are adversely affected for a prolonged period, the Company may be required to evaluate its real estate for potential impairment. These evaluations could result in impairment charges which could be significant. |
Revenues (Notes)
Revenues (Notes) | 9 Months Ended |
Jun. 30, 2020 | |
Revenues [Abstract] | |
Revenue from Contract with Customer [Text Block] | Revenues Revenues consist of: Three Months Ended June 30, Nine Months Ended June 30, 2020 2019 2020 2019 (In millions) Residential lot sales $ 164.4 $ 87.6 $ 537.9 $ 171.6 Residential tract sales 13.4 — 43.5 — Commercial tract sales — — 2.5 18.5 Other 0.1 0.6 0.4 1.9 $ 177.9 $ 88.2 $ 584.3 $ 192.0 |
Capitalized Interest (Notes)
Capitalized Interest (Notes) | 9 Months Ended |
Jun. 30, 2020 | |
Capitalized Interest [Abstract] | |
Capitalized Interest [Text Block] | Capitalized Interest The Company capitalizes interest costs to real estate throughout the development period (active real estate). Capitalized interest is charged to cost of sales as the related real estate is sold to the buyer. During periods in which the Company’s active real estate is lower than its debt level, a portion of the interest incurred is reflected as interest expense in the period incurred. During the first nine months of fiscal 2020 and fiscal year 2019, the Company’s active real estate exceeded its debt level, and all interest incurred was capitalized to real estate. The following table summarizes the Company’s interest costs incurred, capitalized and expensed during the three and nine months ended June 30, 2020 and 2019. Three Months Ended June 30, Nine Months Ended June 30, 2020 2019 2020 2019 (In millions) Capitalized interest, beginning of period $ 37.9 $ 7.7 $ 23.7 $ 3.2 Interest incurred 11.4 9.3 32.0 15.0 Interest charged to cost of sales (4.1) (1.0) (10.5) (2.2) Capitalized interest, end of period $ 45.2 $ 16.0 $ 45.2 $ 16.0 |
Investment in Unconsolidated Ve
Investment in Unconsolidated Ventures (Notes) | 9 Months Ended |
Jun. 30, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investment in Unconsolidated Ventures | Investment in Unconsolidated Ventures At June 30, 2020, the Company had ownership interests in four ventures that it accounted for using the equity method. Combined summarized balance sheet and income statement information for these unconsolidated ventures follows: June 30, September 30, (In millions) Assets: Cash and cash equivalents $ 1.2 $ 1.6 Real estate 9.4 13.6 Other assets 0.2 0.1 Total assets $ 10.8 $ 15.3 Liabilities and Equity: Accounts payable and other liabilities $ 0.2 $ 0.3 Equity 10.6 15.0 Total liabilities and equity $ 10.8 $ 15.3 Forestar's investment in unconsolidated ventures $ 5.5 $ 7.3 Three Months Ended June 30, Nine Months Ended June 30, 2020 2019 2020 2019 (In millions) Revenues $ — $ 0.1 $ 3.0 $ 1.9 (Loss) earnings $ (0.1) $ (0.1) $ 1.9 $ 1.3 Forestar's equity in (loss) earnings of unconsolidated ventures $ (0.1) $ — $ 0.6 $ 0.5 |
Other Assets, Accrued Expenses
Other Assets, Accrued Expenses and Other Liabilities (Notes) | 9 Months Ended |
Jun. 30, 2020 | |
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 June 30, 2020 and September 30, 2019 were as follows: June 30, September 30, (In millions) Receivables, net $ 0.8 $ 1.1 Earnest money notes receivable on sales contracts 6.5 — Lease right of use assets 3.2 — Prepaid expenses 5.3 3.4 Land purchase contract deposits 5.8 5.1 Other assets 5.5 4.1 $ 27.1 $ 13.7 The Company's accrued expenses and other liabilities at June 30, 2020 and September 30, 2019 were as follows: June 30, September 30, (In millions) Accrued employee compensation and benefits $ 3.8 $ 5.6 Accrued property taxes 2.9 2.1 Lease liabilities 3.4 — Accrued interest 11.0 13.5 Contract liabilities 0.3 2.5 Deferred income 9.4 9.3 Accrued development costs 32.4 35.4 Other accrued expenses 5.1 8.4 Other liabilities 4.7 2.8 $ 73.0 $ 79.6 |
Schedule of Other Assets [Table Text Block] | The Company's other assets at June 30, 2020 and September 30, 2019 were as follows: June 30, September 30, (In millions) Receivables, net $ 0.8 $ 1.1 Earnest money notes receivable on sales contracts 6.5 — Lease right of use assets 3.2 — Prepaid expenses 5.3 3.4 Land purchase contract deposits 5.8 5.1 Other assets 5.5 4.1 $ 27.1 $ 13.7 |
Schedule of Accrued Liabilities [Table Text Block] | The Company's accrued expenses and other liabilities at June 30, 2020 and September 30, 2019 were as follows: June 30, September 30, (In millions) Accrued employee compensation and benefits $ 3.8 $ 5.6 Accrued property taxes 2.9 2.1 Lease liabilities 3.4 — Accrued interest 11.0 13.5 Contract liabilities 0.3 2.5 Deferred income 9.4 9.3 Accrued development costs 32.4 35.4 Other accrued expenses 5.1 8.4 Other liabilities 4.7 2.8 $ 73.0 $ 79.6 |
Debt, net (Notes)
Debt, net (Notes) | 9 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt, net | Debt The Company's notes payable at their carrying amounts consist of the following: June 30, September 30, (In millions) Unsecured: 3.75% convertible senior notes due 2020 $ — $ 116.7 8.0% senior notes due 2024 (1) 344.8 343.8 5.0% senior notes due 2028 (1) 295.8 — Revolving credit facility — — $ 640.6 $ 460.5 ______________ (1) Debt issuance costs that were deducted from the carrying amounts of the senior notes totaled $9.4 million and $6.2 million at June 30, 2020 and September 30, 2019, respectively. Bank Credit Facility The Company has a $380 million senior unsecured revolving credit facility with an uncommitted accordion feature that could increase the size of the facility to $570 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 revolving credit commitment. Borrowings under the revolving credit facility are subject to a borrowing base calculation based on the book value of the Company's real estate assets and unrestricted cash. Letters of credit issued under the facility reduce the available borrowing capacity. At June 30, 2020, there were no borrowings outstanding and $31.6 million of letters of credit issued under the revolving credit facility, resulting in available capacity of $348.4 million. There were no borrowings or repayments under the facility during the nine months ended June 30, 2020. In October 2019, the revolving credit facility was amended to extend its maturity date to October 2, 2022. The maturity date may be extended by up to one year on up to two additional occasions, subject to the approval of lenders holding a majority of the commitments. 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 June 30, 2020, the Company was in compliance with all of the covenants, limitations and restrictions of its revolving credit facility. Senior Notes In February 2020, the Company issued $300 million principal amount of 5.0% senior notes pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended (Securities Act). The notes mature March 1, 2028 with interest payable semi-annually and represent senior unsecured obligations that rank equally in right of payment to all existing and future senior unsecured indebtedness. The notes may be redeemed prior to maturity, subject to certain limitations and premiums defined in the indenture agreement. On or after March 1, 2023, the 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 notes can be redeemed at par on or after March 1, 2026 through maturity. The notes are guaranteed by each of the Company's subsidiaries to the extent such subsidiaries guarantee the Company's revolving credit facility. The annual effective interest rate of the notes after giving effect to the amortization of financing costs is 5.2%. The Company also has $350 million principal amount of 8.0% senior notes due 2024 outstanding. In March 2020, the Company repaid $118.9 million principal amount of its 3.75% convertible senior notes in cash at maturity. The indentures governing the senior notes require that, upon the occurrence of both a change of control and a rating decline (each as defined in the indentures), the Company offer to purchase the notes at 101% of their principal amount. If the Company or its restricted subsidiaries dispose of assets, under certain circumstances, the Company will be required to either invest the net cash proceeds from such asset sales in its business within a specified period of time, repay certain senior secured debt or debt of its non-guarantor subsidiaries, or make an offer to purchase a principal amount of the notes equal to the excess net cash proceeds at a purchase price of 100% of their principal amount. The indentures contain covenants that, among other things, restrict the ability of the Company and its restricted subsidiaries to pay dividends or distributions, repurchase equity, prepay subordinated debt and make certain investments; incur additional debt or issue mandatorily redeemable equity; incur liens on assets; merge or consolidate with another company or sell or otherwise dispose of all or substantially all of the Company’s assets; enter into transactions with affiliates; and allow to exist certain restrictions on the ability of subsidiaries to pay dividends or make other payments. At June 30, 2020, 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 June 30, 2020. |
Fair Value (Notes)
Fair Value (Notes) | 9 Months Ended |
Jun. 30, 2020 | |
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 June 30, 2020 and September 30, 2019. Fair Value at June 30, 2020 Carrying Value Level 1 Level 2 Level 3 Total (in millions) Cash and cash equivalents (a) $ 355.6 $ 355.6 $ — $ — $ 355.6 Debt (b) 640.6 — 660.4 — 660.4 Fair Value at September 30, 2019 Carrying Value Level 1 Level 2 Level 3 Total (in millions) Cash and cash equivalents (a) $ 382.8 $ 382.8 $ — $ — $ 382.8 Debt (b) 460.5 — 497.3 — 497.3 _____________________ (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 June 30, 2020 and September 30, 2019, debt consisted of the Company's senior notes. The fair value of the senior notes is determined based on quoted prices, which is classified as Level 2 within the fair value hierarchy. Non-financial assets measured at fair value on a non-recurring basis primarily include real estate assets which the Company reviews for indicators of potential impairment and performs impairment evaluations when necessary. |
Fair Value Measurements, Not Measured at Fair Value | For the financial assets and liabilities that the Company does not reflect at fair value, the following tables present both their respective carrying value and fair value at June 30, 2020 and September 30, 2019. Fair Value at June 30, 2020 Carrying Value Level 1 Level 2 Level 3 Total (in millions) Cash and cash equivalents (a) $ 355.6 $ 355.6 $ — $ — $ 355.6 Debt (b) 640.6 — 660.4 — 660.4 Fair Value at September 30, 2019 Carrying Value Level 1 Level 2 Level 3 Total (in millions) Cash and cash equivalents (a) $ 382.8 $ 382.8 $ — $ — $ 382.8 Debt (b) 460.5 — 497.3 — 497.3 _____________________ (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 June 30, 2020 and September 30, 2019, debt consisted of the Company's senior notes. The fair value of the senior notes is determined based on quoted prices, which is classified as Level 2 within the fair value hierarchy. |
Net Income (Loss) per Share (No
Net Income (Loss) per Share (Notes) | 9 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) per Share | Earnings per Share The computations of basic and diluted earnings per share are as follows: Three Months Ended June 30, Nine Months Ended June 30, 2020 2019 2020 2019 (In millions, except share and per share amounts) Numerator: Net income attributable to Forestar Group Inc. $ 10.1 $ 6.9 $ 36.5 $ 20.3 Denominator: Weighted average common shares outstanding — basic 48,050,379 41,959,866 48,028,957 41,957,408 Dilutive effect of share based compensation 24,831 50,355 45,903 20,931 Total weighted average shares outstanding — diluted 48,075,210 42,010,221 48,074,860 41,978,339 Anti-dilutive awards excluded from diluted weighted average shares — — — — Basic net income per common share attributable to Forestar Group Inc. $ 0.21 $ 0.16 $ 0.76 $ 0.48 Diluted net income per common share attributable to Forestar Group Inc. $ 0.21 $ 0.16 $ 0.76 $ 0.48 In March 2020, the Company repaid $118.9 million principal amount of its 3.75% convertible senior notes in cash at maturity. The notes had no impact on diluted net income per share in any of the prior periods presented. |
Earnings Attributable to Common Shareholders and Weighted Average Common Shares Outstanding | The computations of basic and diluted earnings per share are as follows: Three Months Ended June 30, Nine Months Ended June 30, 2020 2019 2020 2019 (In millions, except share and per share amounts) Numerator: Net income attributable to Forestar Group Inc. $ 10.1 $ 6.9 $ 36.5 $ 20.3 Denominator: Weighted average common shares outstanding — basic 48,050,379 41,959,866 48,028,957 41,957,408 Dilutive effect of share based compensation 24,831 50,355 45,903 20,931 Total weighted average shares outstanding — diluted 48,075,210 42,010,221 48,074,860 41,978,339 Anti-dilutive awards excluded from diluted weighted average shares — — — — Basic net income per common share attributable to Forestar Group Inc. $ 0.21 $ 0.16 $ 0.76 $ 0.48 Diluted net income per common share attributable to Forestar Group Inc. $ 0.21 $ 0.16 $ 0.76 $ 0.48 |
Income Taxes (Notes)
Income Taxes (Notes) | 9 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company’s income tax expense for the three and nine months ended June 30, 2020 was $0.2 million and $8.9 million compared to $1.5 million and $6.0 million in the prior year periods. The effective tax rate was 1.9% and 19.3% for the three and nine months ended June 30, 2020 compared to 17.9% and 20.3% in the prior year periods. The effective tax rate for the three and nine months ended June 30, 2020 includes a tax benefit of $2.3 million related to the net operating loss (NOL) carryback provisions of the recently enacted Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which allows the Company to carryback a portion of its 2018 NOL. The carryback provisions result in the recognition of previously unrecognized tax benefits and the revaluation of deferred tax assets due to the utilization of NOLs at a higher tax rate in the carryback period. The Company's effective tax rate for all periods includes an expense for state income taxes and nondeductible expenses and a benefit related to noncontrolling interests. At June 30, 2020, the Company had deferred tax assets, net of deferred tax liabilities, of $3.2 million. The deferred tax assets were offset by a valuation allowance of $3.3 million, resulting in a net deferred tax liability of $0.1 million, which is included in accrued expenses and other liabilities on its consolidated balance sheets. At September 30, 2019, deferred tax assets, net of deferred tax liabilities, were $20.7 million, partially offset by a valuation allowance of $3.3 million. The valuation allowance for both periods was recorded because it is more likely than not that a portion of the Company's state deferred tax assets, primarily 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 had no unrecognized tax benefits at June 30, 2020 as a result of the recognition of $1.6 million of previously unrecognized tax benefits during the three months ended June 30, 2020. All of the $1.6 million of recognized tax benefits affected the Company’s effective tax rate and was attributable to the NOL carryback provisions of the CARES Act allowing previously uncertain tax attributes to be recognized. |
Stockholders' Equity (Notes)
Stockholders' Equity (Notes) | 9 Months Ended |
Jun. 30, 2020 | |
Stockholders' Equity Attributable to Parent [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | Stockholders' Equity and Stock-Based Compensation Stockholders' Equity The Company has an effective shelf registration statement filed with the Securities and Exchange Commission (SEC) in September 2018 registering $500 million of equity securities. At June 30, 2020, $394.3 million remains available for issuance under the shelf registration statement. 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 the nine months ended June 30, 2020, a total of 175,325 time-based RSUs were granted. The weighted average grant date fair value of these equity awards was $16.01 per unit, and they vest annually in equal installments over periods of three to five years. Total stock-based compensation expense related to the Company's restricted stock units for the three and nine months ended June 30, 2020 was $0.3 million and $1.6 million, respectively, and the nine month period includes $0.5 million of expense recognized for employees that were retirement eligible on the date of grant. Total stock-based compensation expense for the three and nine months ended June 30, 2019 was $0.9 million and $1.1 million, respectively, and both periods include $0.6 million of expense recognized for employees that were retirement eligible on the date of grant. |
Commitments and Contingencies (
Commitments and Contingencies (Notes) | 9 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Contractual Obligations and Off-Balance Sheet Arrangements In support of the Company's residential lot development business, it issues letters of credit under the revolving credit facility and has a surety bond program that provides financial assurance to beneficiaries related to the execution and performance of certain development obligations. At June 30, 2020, the Company had outstanding letters of credit of $31.6 million under the revolving credit facility and surety bonds of $206.2 million, issued by third parties to secure performance under various contracts. The Company expects that its performance obligations secured by these letters of credit and bonds will generally be completed in the ordinary course of business and in accordance with the applicable contractual terms. When the Company completes its performance obligations, the related letters of credit and bonds are generally released shortly thereafter, leaving the Company with no continuing obligations. The Company has no material third-party guarantees. Litigation The Company is involved in various legal proceedings that arise from time to time in the ordinary course of business and believes that adequate reserves have been established for any probable losses. The Company does not believe that the outcome of any of these proceedings will have a significant adverse effect on its financial position, long-term results of operations or cash flows. It is possible, however, that charges related to these matters could be significant to the Company's results or cash flows in any one accounting period. |
Related Party Transactions (Not
Related Party Transactions (Notes) | 9 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | Related Party TransactionsIn October 2017, the Company entered into a Shared Services Agreement with D.R. Horton whereby D.R. Horton provides the Company with certain administrative, compliance, operational and procurement services. During the nine months ended June 30, 2020 and 2019, the Company paid D.R. Horton $3.8 million and $1.6 million for these shared services and $1.9 million and $1.1 million for the cost of health insurance and other employee benefits. These expenses are included in selling, general and administrative expense in the consolidated statements of operations. 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 June 30, 2020 and September 30, 2019, the Company owned or controlled through purchase contracts approximately 50,700 and 38,300 residential lots, of which D.R. Horton had the following involvement. June 30, September 30, (Dollars in millions) Residential lots under contract to sell to D.R. Horton 14,100 12,800 Residential lots subject to right of first offer with D.R. Horton 15,500 10,600 Earnest money deposits from D.R. Horton for lots under contract $ 91.0 $ 88.7 Earnest money notes from D.R. Horton for lots under contract $ 6.5 $ — Remaining purchase price of lots under contract with D.R. Horton $ 1,016.4 $ 953.8 In the three months ended June 30, 2020 and 2019, the Company's residential lot sales totaled 2,023 and 1,158, and lot sales revenues were $164.4 million and $87.6 million. In the nine months ended June 30, 2020 and 2019, the Company's residential lot sales totaled 6,396 and 2,224, and lot sales revenues were $537.9 million and $171.6 million. Lot and land sales to D.R. Horton during those periods were as follows. Three Months Ended June 30, Nine Months Ended June 30, 2020 2019 2020 2019 (Dollars in millions) Residential single-family lots sold to D.R. Horton 1,991 995 6,287 1,903 Residential lot sales revenues from sales to D.R. Horton $ 159.3 $ 75.2 $ 526.0 $ 145.4 Residential tract acres sold to D.R. Horton 30 — 66 — Residential tract sales revenues from sales to D.R. Horton $ 13.4 $ — $ 20.6 $ — In addition, a decrease in contract liabilities increased revenues on lot sales to D.R. Horton by $2.8 million and $2.1 million in the three and nine months ended June 30, 2020 and an increase in contract liabilities decreased revenues on lot sales to D.R. Horton by $2.0 million and $3.6 million in the three and nine months ended June 30, 2019. During the three and nine months ended June 30, 2020, the Company reimbursed D.R. Horton approximately $7.0 million and $23.2 million for previously paid earnest money and $12.9 million and $26.2 million for pre-acquisition and other due diligence and development costs related to land purchase contracts whereby D.R. Horton assigned its rights under these land purchase contracts to the Company. During the three and nine months ended June 30, 2019, the Company reimbursed D.R. Horton approximately $10.8 million and $27.6 million for previously paid earnest money and $4.7 million and $8.4 million for pre-acquisition and other due diligence and development costs. During the three and nine months ended June 30, 2020, the Company paid D.R. Horton $1.0 million and $3.9 million for land development services compared to $0.6 million and $1.4 million for these services in the prior year periods. These amounts are included in cost of sales in the Company’s consolidated statements of operations. At June 30, 2020 and September 30, 2019, undeveloped land was $15.4 million and $17.1 million. Undeveloped land primarily consists of undeveloped land which the Company has the contractual right to sell to D.R. Horton within approximately one year of its purchase or, if D.R. Horton elects, at an earlier date, at a sales price equal to the carrying value of the land at the time of sale plus additional consideration of 16% per annum. At June 30, 2020 and September 30, 2019, accrued expenses and other liabilities on the Company's consolidated balance sheets included $3.0 million and $2.2 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. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. |
Basis of Presentation | Basis of Presentation The accompanying unaudited, consolidated financial statements include the accounts of Forestar Group Inc. (Forestar) and all of its 100% owned, majority-owned and controlled subsidiaries, which are collectively referred to as the Company unless the context otherwise requires. The Company accounts for its investment in other entities in which it has significant influence over operations and financial policies using the equity method. All intercompany accounts, transactions and balances have been eliminated in consolidation. Noncontrolling interests in consolidated pass-through entities are recognized before income taxes. The transactions included in net income in the consolidated statements of operations are the same as those that would be presented in comprehensive income. Thus, the Company's net income equates to comprehensive income. The financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, these financial statements reflect all adjustments considered necessary to fairly state the results for the interim periods shown, including normal recurring accruals and other items. These financial statements, including the consolidated balance sheet as of September 30, 2019, which was derived from audited financial statements, do not include all of the information and notes required by GAAP for complete financial statements and should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s annual report on Form 10-K for the fiscal year ended September 30, 2019. In October 2017, Forestar became a majority-owned subsidiary of D.R. Horton, Inc. (D.R. Horton) by virtue of a merger with a wholly-owned subsidiary of D.R. Horton. Immediately following the merger, D.R. Horton owned 75% of the Company's outstanding common stock. In connection with the merger, the Company entered into certain agreements with D.R. Horton including a Stockholder’s Agreement, a Master Supply Agreement, and a Shared Services Agreement. D.R. Horton is considered a related party of Forestar under GAAP. At June 30, 2020, D.R. Horton owned approximately 65% of the Company's outstanding common stock. |
New Accounting Pronouncements, Policy [Policy Text Block] | Adoption of New Accounting Standard In February 2016, the FASB issued ASU 2016-02, “Leases,” which requires that lease assets and liabilities be recognized on the balance sheet and that key information about leasing arrangements be disclosed. The guidance was effective for the Company beginning October 1, 2019 and did not have a material impact on its consolidated financial position, results of operations or cash flows. As a result of the adoption of this standard on October 1, 2019, the Company recorded right of use assets of $2.7 million and lease liabilities of $2.9 million. Lease right of use assets are included in other assets and lease liabilities are included in accrued expenses and other liabilities in the consolidated balance sheet. Pending Accounting Standards In December 2019, the FASB issued ASU 2019-12 related to simplifying the accounting for income taxes. The guidance is effective for the Company beginning October 1, 2021, although early adoption is permitted. The Company is currently evaluating the impact of this guidance, and it is not expected to have a material impact on its consolidated financial position, results of operations or cash flows. In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform,” which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (LIBOR) or by another reference rate expected to be discontinued. The guidance was effective beginning March 12, 2020 and can be applied prospectively through December 31, 2022. The Company will adopt this standard when LIBOR is discontinued and does not expect it to have a material impact on its consolidated financial statements and related disclosures. |
Real Estate (Tables)
Real Estate (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
Real Estate [Abstract] | |
Schedule of Real Estate Properties | Real estate consists of: June 30, September 30, (In millions) Developed and under development projects $ 1,271.7 $ 1,011.8 Undeveloped land 15.4 17.1 $ 1,287.1 $ 1,028.9 |
Revenues (Tables)
Revenues (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
Revenues [Abstract] | |
Revenue from External Customers by Products and Services [Table Text Block] | Revenues consist of: Three Months Ended June 30, Nine Months Ended June 30, 2020 2019 2020 2019 (In millions) Residential lot sales $ 164.4 $ 87.6 $ 537.9 $ 171.6 Residential tract sales 13.4 — 43.5 — Commercial tract sales — — 2.5 18.5 Other 0.1 0.6 0.4 1.9 $ 177.9 $ 88.2 $ 584.3 $ 192.0 |
Capitalized Interest (Tables)
Capitalized Interest (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
Capitalized Interest [Abstract] | |
Capitalized Interest Costs [Table Text Block] | The following table summarizes the Company’s interest costs incurred, capitalized and expensed during the three and nine months ended June 30, 2020 and 2019. Three Months Ended June 30, Nine Months Ended June 30, 2020 2019 2020 2019 (In millions) Capitalized interest, beginning of period $ 37.9 $ 7.7 $ 23.7 $ 3.2 Interest incurred 11.4 9.3 32.0 15.0 Interest charged to cost of sales (4.1) (1.0) (10.5) (2.2) Capitalized interest, end of period $ 45.2 $ 16.0 $ 45.2 $ 16.0 |
Investment in Unconsolidated _2
Investment in Unconsolidated Ventures (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Summarized Financial Information | Combined summarized balance sheet and income statement information for these unconsolidated ventures follows: June 30, September 30, (In millions) Assets: Cash and cash equivalents $ 1.2 $ 1.6 Real estate 9.4 13.6 Other assets 0.2 0.1 Total assets $ 10.8 $ 15.3 Liabilities and Equity: Accounts payable and other liabilities $ 0.2 $ 0.3 Equity 10.6 15.0 Total liabilities and equity $ 10.8 $ 15.3 Forestar's investment in unconsolidated ventures $ 5.5 $ 7.3 Three Months Ended June 30, Nine Months Ended June 30, 2020 2019 2020 2019 (In millions) Revenues $ — $ 0.1 $ 3.0 $ 1.9 (Loss) earnings $ (0.1) $ (0.1) $ 1.9 $ 1.3 Forestar's equity in (loss) earnings of unconsolidated ventures $ (0.1) $ — $ 0.6 $ 0.5 |
Other Assets, Accrued Expense_2
Other Assets, Accrued Expenses and Other Liabilities (Tables) - USD ($) $ in Millions | Jun. 30, 2020 | Oct. 01, 2019 | Sep. 30, 2019 |
Segment Reporting Information [Line Items] | |||
Receivables, net | $ 0.8 | $ 1.1 | |
Notes Receivable, Related Parties | 6.5 | 0 | |
Operating Lease, Right-of-Use Asset | 3.2 | $ 2.7 | 0 |
Prepaid expenses | 5.3 | 3.4 | |
Land purchase contract deposits | 5.8 | 5.1 | |
Other assets | 5.5 | 4.1 | |
Total Other assets | 27.1 | 13.7 | |
Accrued employee compensation and benefits | 3.8 | 5.6 | |
Accrued property taxes | 2.9 | 2.1 | |
Operating Lease, Liability | 3.4 | $ 2.9 | 0 |
Accrued interest | 11 | 13.5 | |
Contract liabilities | 0.3 | 2.5 | |
Deferred income | 9.4 | 9.3 | |
Accrued Development Costs | 32.4 | 35.4 | |
Other accrued expenses | 5.1 | 8.4 | |
Other liabilities | 4.7 | 2.8 | |
Total Accrued expenses and other liabilities | $ 73 | $ 79.6 |
Debt, net - Schedule of Debt (T
Debt, net - Schedule of Debt (Tables) - USD ($) $ in Millions | 9 Months Ended | |
Jun. 30, 2020 | Sep. 30, 2019 | |
Debt Instrument [Line Items] | ||
Debt | $ 640.6 | $ 460.5 |
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: June 30, September 30, (In millions) Unsecured: 3.75% convertible senior notes due 2020 $ — $ 116.7 8.0% senior notes due 2024 (1) 344.8 343.8 5.0% senior notes due 2028 (1) 295.8 — Revolving credit facility — — $ 640.6 $ 460.5 | |
3.75% convertible senior notes due 2020, net of discount | ||
Debt Instrument [Line Items] | ||
Debt | $ 0 | 116.7 |
Interest rate percentage | 3.75% | |
Senior Notes 8.0% | ||
Debt Instrument [Line Items] | ||
Debt | $ 344.8 | 343.8 |
Interest rate percentage | 8.00% | |
Senior Notes 5.0% | ||
Debt Instrument [Line Items] | ||
Debt | $ 295.8 | $ 0 |
Interest rate percentage | 5.00% |
Fair Value Measurements, Not Me
Fair Value Measurements, Not Measured at Fair Value (Tables) - USD ($) $ in Millions | 9 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Cash and cash equivalents | $ 355.6 | $ 223.2 | $ 382.8 | $ 335 |
Debt | 640.6 | 460.5 | ||
Production Related Impairments or Charges | 0.5 | $ 0.5 | ||
Fair Value, Inputs, Level 1 [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Cash and Cash Equivalents, Fair Value Disclosure | 355.6 | 382.8 | ||
Long-term Debt, Fair Value | 0 | 0 | ||
Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Cash and Cash Equivalents, Fair Value Disclosure | 0 | 0 | ||
Long-term Debt, Fair Value | 660.4 | 497.3 | ||
Fair Value, Inputs, Level 3 [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Cash and Cash Equivalents, Fair Value Disclosure | 0 | 0 | ||
Long-term Debt, Fair Value | 0 | 0 | ||
Estimate of Fair Value Measurement [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Cash and Cash Equivalents, Fair Value Disclosure | 355.6 | 382.8 | ||
Long-term Debt, Fair Value | 660.4 | 497.3 | ||
Reported Value Measurement [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Debt | $ 640.6 | $ 460.5 |
Net Income (Loss) per Share - E
Net Income (Loss) per Share - Earnings Attributable to Common Shareholders and Weighted Average Common Shares Outstanding (Tables) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Continuing operations | ||||
Net income (loss) attributable to Forestar Group Inc. | $ 10.1 | $ 6.9 | $ 36.5 | $ 20.3 |
Denominator: | ||||
Weighted average common shares outstanding — basic | 48,050,379 | 41,959,866 | 48,028,957 | 41,957,408 |
Dilutive effect of share based compensation | 24,831 | 50,355 | 45,903 | 20,931 |
Total weighted average shares outstanding — diluted | 48,075,210 | 42,010,221 | 48,074,860 | 41,978,339 |
Anti-dilutive awards excluded from diluted weighted average shares (in shares) | 0 | 0 | 0 | 0 |
Earnings Per Share, Basic | $ 0.21 | $ 0.16 | $ 0.76 | $ 0.48 |
Earnings Per Share, Diluted | $ 0.21 | $ 0.16 | $ 0.76 | $ 0.48 |
Related Party Transactions Rela
Related Party Transactions Related Party Transactions (Tables) | 9 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions [Table Text Block] | At June 30, 2020 and September 30, 2019, the Company owned or controlled through purchase contracts approximately 50,700 and 38,300 residential lots, of which D.R. Horton had the following involvement. June 30, September 30, (Dollars in millions) Residential lots under contract to sell to D.R. Horton 14,100 12,800 Residential lots subject to right of first offer with D.R. Horton 15,500 10,600 Earnest money deposits from D.R. Horton for lots under contract $ 91.0 $ 88.7 Earnest money notes from D.R. Horton for lots under contract $ 6.5 $ — Remaining purchase price of lots under contract with D.R. Horton $ 1,016.4 $ 953.8 In the three months ended June 30, 2020 and 2019, the Company's residential lot sales totaled 2,023 and 1,158, and lot sales revenues were $164.4 million and $87.6 million. In the nine months ended June 30, 2020 and 2019, the Company's residential lot sales totaled 6,396 and 2,224, and lot sales revenues were $537.9 million and $171.6 million. Lot and land sales to D.R. Horton during those periods were as follows. Three Months Ended June 30, Nine Months Ended June 30, 2020 2019 2020 2019 (Dollars in millions) Residential single-family lots sold to D.R. Horton 1,991 995 6,287 1,903 Residential lot sales revenues from sales to D.R. Horton $ 159.3 $ 75.2 $ 526.0 $ 145.4 Residential tract acres sold to D.R. Horton 30 — 66 — Residential tract sales revenues from sales to D.R. Horton $ 13.4 $ — $ 20.6 $ — |
Basis of Presentation Details (
Basis of Presentation Details (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Oct. 05, 2017 | Oct. 01, 2019 | Sep. 30, 2019 |
Entity Information [Line Items] | ||||
Operating Lease, Right-of-Use Asset | $ 3.2 | $ 2.7 | $ 0 | |
Operating Lease, Liability | $ 3.4 | $ 2.9 | $ 0 | |
Majority Shareholder [Member] | D.R. Horton, Inc. [Member] | ||||
Entity Information [Line Items] | ||||
Sale of Stock, Percentage of Ownership after Transaction | 65.00% | 75.00% |
Real Estate - Real Estate (Deta
Real Estate - Real Estate (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Sep. 30, 2019 | |
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | |||||
Payments to Acquire Residential Real Estate | $ 385.3 | ||||
Payments to Develop Real Estate Assets | 348.6 | ||||
Real estate | $ 1,287.1 | 1,287.1 | $ 1,028.9 | ||
Due Diligence Write-Offs | 0.1 | $ 0.1 | $ 0.5 | $ 0.1 | |
D.R. Horton, Inc. [Member] | |||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | |||||
Related Party Transaction, Rate | 16.00% | ||||
Developed and under development projects | |||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | |||||
Real estate | 1,271.7 | $ 1,271.7 | 1,011.8 | ||
Land [Member] | |||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | |||||
Real estate | $ 15.4 | $ 15.4 | $ 17.1 |
Revenues (Details)
Revenues (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenue from External Customer [Line Items] | ||||
Other | $ 0.1 | $ 0.6 | $ 0.4 | $ 1.9 |
Revenues | 177.9 | 88.2 | 584.3 | 192 |
Real Estate [Member] | Residential Real Estate [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Residential lot sales | 164.4 | 87.6 | 537.9 | 171.6 |
Land [Member] | Residential Real Estate [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Residential lot sales | 13.4 | 0 | 43.5 | 0 |
Land [Member] | Commercial Real Estate [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Residential lot sales | $ 0 | $ 0 | $ 2.5 | $ 18.5 |
Capitalized Interest (Details)
Capitalized Interest (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | |
Capitalized Interest Costs [Line Items] | ||||||||
Interest Costs Incurred | $ 11.4 | $ 9.3 | $ 32 | $ 15 | ||||
Real Estate Inventory, Capitalized Interest Costs | 45.2 | 16 | 45.2 | 16 | $ 37.9 | $ 23.7 | $ 7.7 | $ 3.2 |
Real Estate Inventory, Capitalized Interest Costs, Cost of Sales | $ (4.1) | $ (1) | $ (10.5) | $ (2.2) |
Investment in Unconsolidated _3
Investment in Unconsolidated Ventures - Additional Information (Details) | Jun. 30, 2020venture |
Schedule of Equity Method Investments [Line Items] | |
Number of ventures under ownership interest using equity method | 4 |
Investment in Unconsolidated _4
Investment in Unconsolidated Ventures - Summarized Balance Sheet Information (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 |
Schedule of Equity Method Investments [Line Items] | ||||||||
Cash and cash equivalents | $ 355.6 | $ 382.8 | $ 223.2 | $ 335 | ||||
Real estate | 1,287.1 | 1,028.9 | ||||||
Other assets | 27.1 | 13.7 | ||||||
Assets | 1,685.4 | 1,455.7 | ||||||
Liabilities | 838.5 | 646.8 | ||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 846.9 | $ 836.8 | $ 825.6 | 808.9 | $ 695.3 | $ 687.8 | $ 678 | $ 674.5 |
Liabilities and Equity | 1,685.4 | 1,455.7 | ||||||
Equity Method Investment, Nonconsolidated Investee or Group of Investees | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Cash and cash equivalents | 1.2 | 1.6 | ||||||
Real estate | 9.4 | 13.6 | ||||||
Other assets | 0.2 | 0.1 | ||||||
Assets | 10.8 | 15.3 | ||||||
Liabilities | 0.2 | 0.3 | ||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 10.6 | 15 | ||||||
Liabilities and Equity | $ 10.8 | $ 15.3 |
Investment in Unconsolidated _5
Investment in Unconsolidated Ventures - Summarized Income Statement Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | |
Schedule of Equity Method Investments [Line Items] | ||||||||
Revenues | $ 177.9 | $ 88.2 | $ 584.3 | $ 192 | ||||
Net income | 10.1 | $ 10.4 | $ 16.8 | 6.9 | $ 12.8 | $ 3.9 | 37.2 | 23.6 |
Equity in earnings of unconsolidated ventures | (0.1) | 0 | 0.6 | 0.5 | ||||
Equity Method Investment, Nonconsolidated Investee or Group of Investees | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Revenues | 0 | 0.1 | 3 | 1.9 | ||||
Net income | $ (0.1) | $ (0.1) | $ 1.9 | $ 1.3 |
Debt, net - Additional Informat
Debt, net - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Jun. 30, 2020 | Apr. 30, 2020 | Sep. 30, 2019 | |
Debt Instrument [Line Items] | ||||
Repayments of Long-term Lines of Credit | $ 0 | |||
Line of Credit Facility, Current Borrowing Capacity | 380 | |||
Line of Credit Facility, Maximum Borrowing Capacity | 570 | |||
Letter of Credit, Maximum Borrowing Capacity | $ 100 | |||
Letter of Credit, Maximum Borrowing Capacity, Percentage of Revolving Credit Commitment | 50.00% | |||
Proceeds from Long-term Lines of Credit | $ 0 | |||
Long-term Line of Credit | 0 | $ 0 | ||
Letters of credit outstanding | 31.6 | |||
Line of Credit Facility, Remaining Borrowing Capacity | 348.4 | |||
Debt Repurchase Program, Authorized Amount | 30 | $ 30 | ||
Senior Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Deferred finance costs, net | $ 9.4 | $ 6.2 | ||
3.75% convertible senior notes due 2020, net of discount | ||||
Debt Instrument [Line Items] | ||||
Interest rate percentage | 3.75% | |||
Maturities of Senior Debt | $ 118.9 | |||
Senior Notes 8.0% | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Face Amount | $ 350 | |||
Interest rate percentage | 8.00% | |||
Senior Notes 5.0% | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Redemption Price, Percentage | 102.50% | |||
Debt Instrument, Face Amount | $ 300 | |||
Effective interest rate of liability component | 5.20% | |||
Interest rate percentage | 5.00% |
Net Income (Loss) per Share - A
Net Income (Loss) per Share - Additional Information (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
3.75% convertible senior notes due 2020, net of discount | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Maturities of Senior Debt | $ 118.9 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |||||
Income tax expense | $ 0.2 | $ 1.5 | $ 8.9 | $ 6 | |
Effective income tax rate, percent | 1.90% | 17.90% | 19.30% | 20.30% | |
Deferred Tax Assets, Net Of Deferred Tax Liabilities | $ 3.2 | $ 3.2 | $ 20.7 | ||
Valuation allowance, deferred tax asset, amount | 3.3 | 3.3 | $ 3.3 | ||
Unrecognized Tax Benefits, Period Increase (Decrease) | 1.6 | ||||
Effective Income Tax Rate Reconciliation, Other Adjustments, Amount | 2.3 | 2.3 | |||
Deferred Tax Liabilities, Other | $ 0.1 | $ 0.1 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Sep. 30, 2018 | |
Class of Stock [Line Items] | |||||
Equity Securities Registered, Value | $ 500 | ||||
Common Stock Available for Issuance, Value Remaining | $ 394.3 | $ 394.3 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 175,325 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 16.01 | ||||
Stock-based compensation expense | $ 0.3 | $ 0.9 | $ 1.6 | $ 1.1 | |
Retirement Eligible [Member] | |||||
Class of Stock [Line Items] | |||||
Stock-based compensation expense | $ 0.6 | $ 0.5 | $ 0.6 |
Commitments and Contingencies N
Commitments and Contingencies Narrative (Details) $ in Millions | Jun. 30, 2020USD ($) |
Loss Contingencies [Line Items] | |
Special Assessment Bond | $ 206.2 |
Letters of Credit Outstanding, Amount | $ 31.6 |
Related Party Transactions (Det
Related Party Transactions (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2020USD ($)Lot | Jun. 30, 2019USD ($)Lot | Jun. 30, 2020USD ($)Lot | Jun. 30, 2019USD ($)Lot | Sep. 30, 2019USD ($)Lot | |
Related Party Transaction [Line Items] | |||||
Number of Units in Real Estate Property | Lot | 50,700 | 50,700 | 38,300 | ||
Number of Lots Sold | Lot | 2,023 | 1,158 | 6,396 | 2,224 | |
Real estate | $ 1,287.1 | $ 1,287.1 | $ 1,028.9 | ||
D.R. Horton, Inc. [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related Party Transaction, Selling, General and Administrative Expenses from Transactions with Related Party | 3.8 | $ 1.6 | |||
Related Party Transaction, Expenses from Transactions with Related Party | 1.9 | 1.1 | |||
Due to Related Parties, Current | 3 | 3 | $ 2.2 | ||
Deferred Revenue, Period Increase (Decrease) | 2.8 | $ (2) | 2.1 | (3.6) | |
Related Party Transaction, Purchases from Related Party | $ 1 | $ 0.6 | $ 3.9 | $ 1.4 | |
Related Party Transaction, Rate | 16.00% | ||||
D.R. Horton, Inc. [Member] | |||||
Related Party Transaction [Line Items] | |||||
Number of Lots Sold | Lot | 1,991 | 995 | 6,287 | 1,903 | |
Revenue from Related Parties | $ 159.3 | $ 75.2 | $ 526 | $ 145.4 | |
Under Contract [Member] | D.R. Horton, Inc. [Member] | |||||
Related Party Transaction [Line Items] | |||||
Number of Units in Real Estate Property | Lot | 14,100 | 14,100 | 12,800 | ||
Related Party Transaction, Purchase Obligation from Parent | $ 1,016.4 | $ 1,016.4 | $ 953.8 | ||
Under Contract [Member] | D.R. Horton, Inc. [Member] | Notes Payable, Other Payables | |||||
Related Party Transaction [Line Items] | |||||
Related Party Deposit Liabilities | 6.5 | 6.5 | 0 | ||
Under Contract [Member] | D.R. Horton, Inc. [Member] | Cash | |||||
Related Party Transaction [Line Items] | |||||
Related Party Deposit Liabilities | $ 91 | $ 91 | $ 88.7 | ||
Right of First Offer [Member] | D.R. Horton, Inc. [Member] | |||||
Related Party Transaction [Line Items] | |||||
Number of Units in Real Estate Property | Lot | 15,500 | 15,500 | 10,600 | ||
Land [Member] | |||||
Related Party Transaction [Line Items] | |||||
Real estate | $ 15.4 | $ 15.4 | $ 17.1 | ||
Other Expense [Member] | D.R. Horton, Inc. [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related Party Transaction, Amounts of Transaction | 12.9 | 4.7 | 26.2 | 8.4 | |
Deposits [Member] | D.R. Horton, Inc. [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related Party Transaction, Amounts of Transaction | $ 7 | $ 10.8 | $ 23.2 | $ 27.6 | |
Land [Member] | D.R. Horton, Inc. [Member] | |||||
Related Party Transaction [Line Items] | |||||
Number of Lots Sold | Lot | 30 | 0 | 66 | 0 | |
Revenue from Related Parties | $ 13.4 | $ 0 | $ 20.6 | $ 0 | |
Real Estate [Member] | Residential Real Estate [Member] | |||||
Related Party Transaction [Line Items] | |||||
Revenue from Contract with Customer, Including Assessed Tax | $ 164.4 | $ 87.6 | $ 537.9 | $ 171.6 |