|
(Mark One)
|
|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
26-1336998
|
(State or Other Jurisdiction of Incorporation or Organization)
|
|
(I.R.S. Employer Identification No.)
|
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
|
Large accelerated filer
¨
|
|
Accelerated filer
x
|
|
Non-accelerated filer
¨
|
|
Smaller reporting company
¨
|
|
Emerging growth company
¨
|
|
|
June 30,
2019 |
|
September 30,
2018 |
||||
|
(In millions, except share data)
|
||||||
ASSETS
|
|
|
|
||||
Cash and cash equivalents
|
$
|
223.0
|
|
|
$
|
318.8
|
|
Restricted cash
|
0.2
|
|
|
16.2
|
|
||
Total cash, cash equivalents and restricted cash
|
223.2
|
|
|
335.0
|
|
||
|
|
|
|
||||
Real estate
|
1,049.5
|
|
|
498.0
|
|
||
Investment in unconsolidated ventures
|
7.3
|
|
|
11.7
|
|
||
Income taxes receivable
|
3.3
|
|
|
4.4
|
|
||
Property and equipment, net
|
2.4
|
|
|
1.7
|
|
||
Deferred tax asset, net
|
21.0
|
|
|
26.9
|
|
||
Other assets
|
18.5
|
|
|
15.4
|
|
||
TOTAL ASSETS
|
$
|
1,325.2
|
|
|
$
|
893.1
|
|
LIABILITIES
|
|
|
|
||||
Accounts payable
|
$
|
18.8
|
|
|
$
|
7.9
|
|
Earnest money deposits on sales contracts
|
84.8
|
|
|
49.4
|
|
||
Accrued expenses and other liabilities
|
67.4
|
|
|
49.6
|
|
||
Debt, net
|
458.9
|
|
|
111.7
|
|
||
TOTAL LIABILITIES
|
629.9
|
|
|
218.6
|
|
||
COMMITMENTS AND CONTINGENCIES (Note 13)
|
|
|
|
||||
EQUITY
|
|
|
|
||||
Forestar Group Inc. shareholders’ equity:
|
|
|
|
||||
Common stock, par value $1.00 per share, 200,000,000 authorized shares,
41,959,866 shares issued at June 30, 2019 and 41,939,403 shares issued at September 30, 2018
|
42.0
|
|
|
41.9
|
|
||
Additional paid-in capital
|
507.3
|
|
|
506.3
|
|
||
Retained earnings
|
145.4
|
|
|
125.1
|
|
||
Total Forestar Group Inc. shareholders’ equity
|
694.7
|
|
|
673.3
|
|
||
Noncontrolling interests
|
0.6
|
|
|
1.2
|
|
||
TOTAL EQUITY
|
695.3
|
|
|
674.5
|
|
||
TOTAL LIABILITIES AND EQUITY
|
$
|
1,325.2
|
|
|
$
|
893.1
|
|
|
Three Months Ended
June 30, |
|
Nine Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(In millions, except per share amounts)
|
||||||||||||||
Revenues
|
$
|
88.2
|
|
|
$
|
23.6
|
|
|
$
|
192.0
|
|
|
$
|
77.0
|
|
Cost of sales
|
75.3
|
|
|
10.0
|
|
|
149.6
|
|
|
48.9
|
|
||||
Selling, general and administrative expense
|
7.9
|
|
|
6.5
|
|
|
19.8
|
|
|
36.1
|
|
||||
Equity in earnings of unconsolidated ventures
|
—
|
|
|
(1.0
|
)
|
|
(0.5
|
)
|
|
(9.6
|
)
|
||||
Gain on sale of assets
|
(1.5
|
)
|
|
(1.3
|
)
|
|
(2.4
|
)
|
|
(4.1
|
)
|
||||
Interest expense
|
—
|
|
|
1.6
|
|
|
—
|
|
|
5.8
|
|
||||
Interest and other income
|
(1.9
|
)
|
|
(2.6
|
)
|
|
(4.1
|
)
|
|
(4.8
|
)
|
||||
INCOME FROM CONTINUING OPERATIONS BEFORE TAXES
|
8.4
|
|
|
10.4
|
|
|
29.6
|
|
|
4.7
|
|
||||
Income tax expense
|
1.5
|
|
|
0.1
|
|
|
6.0
|
|
|
12.6
|
|
||||
NET INCOME (LOSS) FROM CONTINUING OPERATIONS
|
6.9
|
|
|
10.3
|
|
|
23.6
|
|
|
(7.9
|
)
|
||||
INCOME FROM DISCONTINUED OPERATIONS, NET OF TAXES
|
—
|
|
|
—
|
|
|
—
|
|
|
7.2
|
|
||||
CONSOLIDATED NET INCOME (LOSS)
|
6.9
|
|
|
10.3
|
|
|
23.6
|
|
|
(0.7
|
)
|
||||
Less: Net income attributable to noncontrolling interests
|
—
|
|
|
0.9
|
|
|
3.3
|
|
|
2.9
|
|
||||
NET INCOME (LOSS) ATTRIBUTABLE TO FORESTAR GROUP INC.
|
$
|
6.9
|
|
|
$
|
9.4
|
|
|
$
|
20.3
|
|
|
$
|
(3.6
|
)
|
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
|
|
|
|
|
|
|
|
||||||||
Basic
|
42.0
|
|
|
41.9
|
|
|
42.0
|
|
|
41.9
|
|
||||
Diluted
|
42.0
|
|
|
42.0
|
|
|
42.0
|
|
|
41.9
|
|
||||
NET INCOME (LOSS) PER BASIC SHARE
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.16
|
|
|
$
|
0.22
|
|
|
$
|
0.48
|
|
|
$
|
(0.26
|
)
|
Discontinued operations
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.17
|
|
NET INCOME (LOSS) PER BASIC SHARE
|
$
|
0.16
|
|
|
$
|
0.22
|
|
|
$
|
0.48
|
|
|
$
|
(0.09
|
)
|
NET INCOME (LOSS) PER DILUTED SHARE
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.16
|
|
|
$
|
0.22
|
|
|
$
|
0.48
|
|
|
$
|
(0.26
|
)
|
Discontinued operations
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.17
|
|
NET INCOME (LOSS) PER DILUTED SHARE
|
$
|
0.16
|
|
|
$
|
0.22
|
|
|
$
|
0.48
|
|
|
$
|
(0.09
|
)
|
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Retained Earnings
|
|
Treasury Stock
|
|
Non-controlling Interests
|
|
Total Equity
|
||||||||||||
|
(In millions, except share data)
|
||||||||||||||||||||||
Balances at September 30, 2018 (41,939,403 shares)
|
$
|
41.9
|
|
|
$
|
506.3
|
|
|
$
|
125.1
|
|
|
$
|
—
|
|
|
$
|
1.2
|
|
|
$
|
674.5
|
|
Net income
|
—
|
|
|
—
|
|
|
3.3
|
|
|
—
|
|
|
0.6
|
|
|
3.9
|
|
||||||
Stock issued under employee incentive plans (20,463 shares)
|
0.1
|
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Stock-based compensation expense
|
—
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
||||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.5
|
)
|
|
(0.5
|
)
|
||||||
Balances at December 31, 2018 (41,959,866 shares)
|
$
|
42.0
|
|
|
$
|
506.3
|
|
|
$
|
128.4
|
|
|
$
|
—
|
|
|
$
|
1.3
|
|
|
$
|
678.0
|
|
Net income
|
—
|
|
|
—
|
|
|
10.1
|
|
|
—
|
|
|
2.7
|
|
|
12.8
|
|
||||||
Stock-based compensation expense
|
—
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
||||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.1
|
)
|
|
(3.1
|
)
|
||||||
Balances at March 31, 2019 (41,959,866 shares)
|
$
|
42.0
|
|
|
$
|
506.4
|
|
|
$
|
138.5
|
|
|
$
|
—
|
|
|
$
|
0.9
|
|
|
$
|
687.8
|
|
Net income
|
—
|
|
|
—
|
|
|
6.9
|
|
|
—
|
|
|
—
|
|
|
6.9
|
|
||||||
Stock-based compensation expense
|
—
|
|
|
0.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.9
|
|
||||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|
(0.3
|
)
|
||||||
Balances at June 30, 2019 (41,959,866 shares)
|
$
|
42.0
|
|
|
$
|
507.3
|
|
|
$
|
145.4
|
|
|
$
|
—
|
|
|
$
|
0.6
|
|
|
$
|
695.3
|
|
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Retained Earnings
|
|
Treasury Stock
|
|
Non-controlling Interests
|
|
Total Equity
|
||||||||||||
|
(In millions, except share data)
|
||||||||||||||||||||||
Balances at September 30, 2017 (44,803,603 shares)
|
$
|
44.8
|
|
|
$
|
549.4
|
|
|
$
|
80.4
|
|
|
$
|
(44.5
|
)
|
|
$
|
1.2
|
|
|
$
|
631.3
|
|
Net income (loss)
|
—
|
|
|
—
|
|
|
(17.6
|
)
|
|
—
|
|
|
2.0
|
|
|
(15.6
|
)
|
||||||
Settlement of equity awards
|
—
|
|
|
(12.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12.8
|
)
|
||||||
Retirement of treasury shares (2,864,667 shares)
|
(2.9
|
)
|
|
(35.1
|
)
|
|
(6.5
|
)
|
|
44.5
|
|
|
—
|
|
|
—
|
|
||||||
Stock-based compensation expense
|
—
|
|
|
4.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.5
|
|
||||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.8
|
)
|
|
(1.8
|
)
|
||||||
Balances at December 31, 2017 (41,938,936 shares)
|
$
|
41.9
|
|
|
$
|
506.0
|
|
|
$
|
56.3
|
|
|
$
|
—
|
|
|
$
|
1.4
|
|
|
$
|
605.6
|
|
Net income
|
—
|
|
|
—
|
|
|
4.5
|
|
|
—
|
|
|
0.1
|
|
|
4.6
|
|
||||||
Stock-based compensation expense
|
—
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
||||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|
(0.3
|
)
|
||||||
Balances at March 31, 2018 (41,938,936 shares)
|
$
|
41.9
|
|
|
$
|
506.1
|
|
|
$
|
60.8
|
|
|
$
|
—
|
|
|
$
|
1.2
|
|
|
$
|
610.0
|
|
Net income
|
—
|
|
|
—
|
|
|
9.4
|
|
|
—
|
|
|
0.9
|
|
|
10.3
|
|
||||||
Stock-based compensation expense
|
—
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
||||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
(0.2
|
)
|
||||||
Balances at June 30, 2018 (41,938,936 shares)
|
$
|
41.9
|
|
|
$
|
506.2
|
|
|
$
|
70.2
|
|
|
$
|
—
|
|
|
$
|
1.9
|
|
|
$
|
620.2
|
|
|
Nine Months Ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
|
(In millions)
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
||||
Consolidated net income (loss)
|
$
|
23.6
|
|
|
$
|
(0.7
|
)
|
Adjustments:
|
|
|
|
||||
Depreciation and amortization
|
4.8
|
|
|
3.9
|
|
||
Deferred income taxes
|
5.9
|
|
|
(1.0
|
)
|
||
Equity in earnings of unconsolidated ventures
|
(0.5
|
)
|
|
(9.6
|
)
|
||
Distributions of earnings of unconsolidated ventures
|
4.9
|
|
|
8.3
|
|
||
Share-based compensation
|
1.1
|
|
|
4.3
|
|
||
Asset impairments
|
0.5
|
|
|
9.3
|
|
||
Loss on debt extinguishment, net
|
—
|
|
|
0.6
|
|
||
Gain on sale of assets
|
(2.4
|
)
|
|
(4.1
|
)
|
||
Other
|
0.9
|
|
|
1.3
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Increase in real estate
|
(551.5
|
)
|
|
(274.0
|
)
|
||
Increase in other assets
|
(4.1
|
)
|
|
(2.2
|
)
|
||
Increase in accounts payable and other accrued liabilities
|
30.2
|
|
|
11.3
|
|
||
Increase in earnest money deposits on sales contracts
|
35.4
|
|
|
29.7
|
|
||
Decrease in income taxes receivable
|
1.1
|
|
|
16.9
|
|
||
Net cash used in operating activities
|
(450.1
|
)
|
|
(206.0
|
)
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
||||
Property, equipment, software and other
|
(0.9
|
)
|
|
(0.1
|
)
|
||
Investment in unconsolidated ventures
|
—
|
|
|
(0.1
|
)
|
||
Return of investment in unconsolidated ventures
|
0.1
|
|
|
7.4
|
|
||
Proceeds from sale of assets
|
—
|
|
|
228.6
|
|
||
Net cash (used in) provided by investing activities
|
(0.8
|
)
|
|
235.8
|
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
||||
Payments of debt
|
(85.0
|
)
|
|
(10.6
|
)
|
||
Additions to debt
|
435.0
|
|
|
1.5
|
|
||
Deferred financing fees
|
(6.9
|
)
|
|
(0.2
|
)
|
||
Distributions to noncontrolling interests, net
|
(3.9
|
)
|
|
(2.2
|
)
|
||
Settlement of equity awards
|
(0.1
|
)
|
|
(12.8
|
)
|
||
Net cash provided by (used in) financing activities
|
339.1
|
|
|
(24.3
|
)
|
||
|
|
|
|
||||
Net (decrease) increase in cash, cash equivalents and restricted cash
|
(111.8
|
)
|
|
5.5
|
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
335.0
|
|
|
402.2
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
223.2
|
|
|
$
|
407.7
|
|
|
As of June 30, 2019
|
||||||||||
|
As Reported
|
|
Impact of Adoption
|
|
As Adjusted
|
||||||
|
(In millions)
|
||||||||||
Real estate
|
$
|
1,049.5
|
|
|
$
|
8.7
|
|
|
$
|
1,040.8
|
|
Contract liabilities
|
9.9
|
|
|
9.9
|
|
|
—
|
|
|||
Deferred income
|
9.4
|
|
|
(1.2
|
)
|
|
10.6
|
|
|
September 30, 2018
|
||||||||||||||
|
Real Estate
|
|
Other
|
|
Items Not Allocated
|
|
Consolidated
|
||||||||
|
(In millions)
|
||||||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
318.8
|
|
|
$
|
318.8
|
|
Restricted cash
|
—
|
|
|
—
|
|
|
16.2
|
|
|
16.2
|
|
||||
Real estate
|
498.0
|
|
|
—
|
|
|
—
|
|
|
498.0
|
|
||||
Investment in unconsolidated ventures
|
11.7
|
|
|
—
|
|
|
—
|
|
|
11.7
|
|
||||
Income taxes receivable
|
—
|
|
|
—
|
|
|
4.4
|
|
|
4.4
|
|
||||
Property and equipment, net
|
—
|
|
|
1.5
|
|
|
0.2
|
|
|
1.7
|
|
||||
Deferred tax asset, net
|
—
|
|
|
—
|
|
|
26.9
|
|
|
26.9
|
|
||||
Other assets
|
12.4
|
|
|
0.4
|
|
|
2.6
|
|
|
15.4
|
|
||||
|
$
|
522.1
|
|
|
$
|
1.9
|
|
|
$
|
369.1
|
|
|
$
|
893.1
|
|
|
Three Months Ended June 30, 2018
|
||||||||||||||
|
Real Estate
|
|
Other
|
|
Items Not Allocated
|
|
Consolidated
|
||||||||
|
(In millions)
|
||||||||||||||
Revenues
|
$
|
23.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
23.6
|
|
Cost of sales
|
9.9
|
|
|
0.1
|
|
|
—
|
|
|
10.0
|
|
||||
Selling, general and administrative expense
|
2.9
|
|
|
—
|
|
|
3.6
|
|
|
6.5
|
|
||||
Equity in earnings of unconsolidated ventures
|
(1.0
|
)
|
|
—
|
|
|
—
|
|
|
(1.0
|
)
|
||||
Gain on sale of assets
|
(1.3
|
)
|
|
—
|
|
|
—
|
|
|
(1.3
|
)
|
||||
Interest expense
|
—
|
|
|
—
|
|
|
1.6
|
|
|
1.6
|
|
||||
Interest and other income
|
(1.0
|
)
|
|
—
|
|
|
(1.6
|
)
|
|
(2.6
|
)
|
||||
Income (loss) from continuing operations before taxes
|
$
|
14.1
|
|
|
$
|
(0.1
|
)
|
|
$
|
(3.6
|
)
|
|
$
|
10.4
|
|
Net income attributable to noncontrolling interests
|
0.9
|
|
|
—
|
|
|
—
|
|
|
0.9
|
|
||||
Income (loss) from continuing operations before taxes attributable to Forestar Group Inc.
|
$
|
13.2
|
|
|
$
|
(0.1
|
)
|
|
$
|
(3.6
|
)
|
|
$
|
9.5
|
|
|
Nine Months Ended June 30, 2018
|
||||||||||||||
|
Real Estate
|
|
Other
|
|
Items Not Allocated
|
|
Consolidated
|
||||||||
|
(In millions)
|
||||||||||||||
Revenues
|
$
|
77.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
77.0
|
|
Cost of sales
|
42.4
|
|
|
6.5
|
|
|
—
|
|
|
48.9
|
|
||||
Selling, general and administrative expense
|
10.3
|
|
|
0.2
|
|
|
25.6
|
|
|
36.1
|
|
||||
Equity in earnings of unconsolidated ventures
|
(9.6
|
)
|
|
—
|
|
|
—
|
|
|
(9.6
|
)
|
||||
Gain on sale of assets
|
(4.1
|
)
|
|
—
|
|
|
—
|
|
|
(4.1
|
)
|
||||
Interest expense
|
—
|
|
|
—
|
|
|
5.8
|
|
|
5.8
|
|
||||
Interest and other income
|
(1.8
|
)
|
|
—
|
|
|
(3.0
|
)
|
|
(4.8
|
)
|
||||
Income (loss) from continuing operations before taxes
|
$
|
39.8
|
|
|
$
|
(6.7
|
)
|
|
$
|
(28.4
|
)
|
|
$
|
4.7
|
|
Net income attributable to noncontrolling interests
|
2.9
|
|
|
—
|
|
|
—
|
|
|
2.9
|
|
||||
Income (loss) from continuing operations before taxes attributable to Forestar Group Inc.
|
$
|
36.9
|
|
|
$
|
(6.7
|
)
|
|
$
|
(28.4
|
)
|
|
$
|
1.8
|
|
|
June 30,
2019 |
|
September 30,
2018 |
||||
|
(In millions)
|
||||||
Developed and under development projects
|
$
|
988.7
|
|
|
$
|
463.1
|
|
Undeveloped land
|
60.8
|
|
|
34.9
|
|
||
|
$
|
1,049.5
|
|
|
$
|
498.0
|
|
|
Three Months Ended June 30,
|
|
Nine Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(In millions)
|
||||||||||||||
Residential lot sales
|
$
|
87.6
|
|
|
$
|
19.9
|
|
|
$
|
171.6
|
|
|
$
|
61.3
|
|
Residential tract sales
|
—
|
|
|
3.4
|
|
|
—
|
|
|
5.7
|
|
||||
Commercial tract sales
|
—
|
|
|
—
|
|
|
18.5
|
|
|
9.2
|
|
||||
Other
|
0.6
|
|
|
0.3
|
|
|
1.9
|
|
|
0.8
|
|
||||
|
$
|
88.2
|
|
|
$
|
23.6
|
|
|
$
|
192.0
|
|
|
$
|
77.0
|
|
|
June 30,
2019 |
|
September 30,
2018 |
||||
|
(In millions)
|
||||||
Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1.6
|
|
|
$
|
10.2
|
|
Real estate
|
13.6
|
|
|
17.2
|
|
||
Other assets
|
0.1
|
|
|
0.1
|
|
||
Total assets
|
$
|
15.3
|
|
|
$
|
27.5
|
|
Liabilities and Equity:
|
|
|
|
||||
Accounts payable and other liabilities
|
$
|
0.3
|
|
|
$
|
0.6
|
|
Equity
|
15.0
|
|
|
26.9
|
|
||
Total liabilities and equity
|
$
|
15.3
|
|
|
$
|
27.5
|
|
|
|
|
|
||||
Forestar's investment in unconsolidated ventures
|
$
|
7.3
|
|
|
$
|
11.7
|
|
|
Three Months Ended June 30,
|
|
Nine Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(In millions)
|
||||||||||||||
Revenues
|
$
|
0.1
|
|
|
$
|
2.8
|
|
|
$
|
1.9
|
|
|
$
|
14.8
|
|
Earnings
|
(0.1
|
)
|
|
2.7
|
|
|
1.3
|
|
|
24.4
|
|
||||
Forestar's equity in earnings of unconsolidated ventures
|
—
|
|
|
1.0
|
|
|
0.5
|
|
|
9.6
|
|
|
June 30,
2019 |
|
September 30,
2018 |
||||
|
(In millions)
|
||||||
Receivables, net
|
$
|
1.4
|
|
|
$
|
2.7
|
|
Prepaid expenses
|
4.0
|
|
|
3.1
|
|
||
Land purchase contract deposits
|
7.4
|
|
|
4.1
|
|
||
Intangible assets
|
—
|
|
|
0.5
|
|
||
Other assets
|
5.7
|
|
|
5.0
|
|
||
|
$
|
18.5
|
|
|
$
|
15.4
|
|
|
June 30,
2019 |
|
September 30,
2018 |
||||
|
(In millions)
|
||||||
Accrued employee compensation and benefits
|
$
|
5.6
|
|
|
$
|
6.7
|
|
Accrued property taxes
|
1.8
|
|
|
1.7
|
|
||
Accrued interest
|
7.6
|
|
|
0.4
|
|
||
Contract liabilities
|
9.9
|
|
|
—
|
|
||
Deferred income
|
9.4
|
|
|
11.6
|
|
||
Other accrued expenses
|
30.2
|
|
|
27.2
|
|
||
Other liabilities
|
2.9
|
|
|
2.0
|
|
||
|
$
|
67.4
|
|
|
$
|
49.6
|
|
|
June 30,
2019 |
|
September 30,
2018 |
||||
|
(In millions)
|
||||||
3.75% convertible senior notes due 2020, net of discount and fees
|
$
|
115.5
|
|
|
$
|
111.7
|
|
8.0% senior unsecured notes due 2024, net of fees
|
343.4
|
|
|
—
|
|
||
Senior unsecured revolving credit facility, maturing 2021
|
—
|
|
|
—
|
|
||
|
$
|
458.9
|
|
|
$
|
111.7
|
|
•
|
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.
|
|
|
|
Fair Value at June 30, 2019
|
||||||||||||||||
|
Carrying Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Cash and cash equivalents
(a)
|
$
|
223.0
|
|
|
$
|
223.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
223.0
|
|
Restricted cash
(a)
|
0.2
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|||||
Debt
(b)
|
465.8
|
|
|
—
|
|
|
485.8
|
|
|
—
|
|
|
485.8
|
|
|
|
|
Fair Value at September 30, 2018
|
||||||||||||||||
|
Carrying Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Cash and cash equivalents
(a)
|
$
|
318.8
|
|
|
$
|
318.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
318.8
|
|
Restricted cash
(a)
|
16.2
|
|
|
16.2
|
|
|
—
|
|
|
—
|
|
|
16.2
|
|
|||||
Debt
(b)
|
112.4
|
|
|
—
|
|
|
113.2
|
|
|
—
|
|
|
113.2
|
|
(a)
|
The fair values of cash, cash equivalents and restricted cash approximate their carrying values due to their short-term nature and are classified as Level 1 within the fair value hierarchy.
|
(b)
|
The fair value of the convertible senior notes and the senior unsecured notes is determined based on quoted prices, which is classified as Level 2 within the fair value hierarchy.
|
|
June 30, 2019
|
|
September 30, 2018
|
||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||||||
Real estate
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.2
|
|
|
$
|
—
|
|
|
$
|
0.2
|
|
|
Three Months Ended June 30,
|
|
Nine Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(In millions, except share data)
|
||||||||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
|
|
|
|
|
|
|
||||||||
Net income (loss) from continuing operations
|
$
|
6.9
|
|
|
$
|
10.3
|
|
|
$
|
23.6
|
|
|
$
|
(7.9
|
)
|
Less: Net income attributable to noncontrolling interest
|
—
|
|
|
0.9
|
|
|
3.3
|
|
|
2.9
|
|
||||
Net income (loss) from continuing operations attributable to Forestar Group Inc.
|
$
|
6.9
|
|
|
$
|
9.4
|
|
|
$
|
20.3
|
|
|
$
|
(10.8
|
)
|
|
|
|
|
|
|
|
|
||||||||
Discontinued operations
|
|
|
|
|
|
|
|
||||||||
Net income from discontinued operations available for diluted earnings per share
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7.2
|
|
|
|
|
|
|
|
|
|
||||||||
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding — basic
|
41,959,866
|
|
|
41,938,936
|
|
|
41,957,408
|
|
|
41,945,099
|
|
||||
Dilutive effect of share based compensation
|
50,355
|
|
|
27,377
|
|
|
20,931
|
|
|
—
|
|
||||
Total weighted average shares outstanding — diluted
|
42,010,221
|
|
|
41,966,313
|
|
|
41,978,339
|
|
|
41,945,099
|
|
||||
Anti-dilutive awards excluded from diluted weighted average shares
|
—
|
|
|
—
|
|
|
—
|
|
|
28,558
|
|
•
|
the effect of D.R. Horton, Inc.’s (D.R. Horton) controlling level of ownership on us and our stockholders and holders of notes;
|
•
|
our ability to realize the potential benefits of the strategic relationship with D.R. Horton;
|
•
|
the effect of our strategic relationship with D.R. Horton on our ability to maintain relationships with our vendors and customers;
|
•
|
demand for new housing, which can be affected by a number of factors including the availability of mortgage credit, job growth and fluctuations in interest rates;
|
•
|
competitive actions by other companies;
|
•
|
accuracy of estimates and other assumptions related to investment in and development of real estate, the expected timing and pricing of land and lot sales and related cost of real estate sales;
|
•
|
our ability to hire and retain key personnel;
|
•
|
changes in governmental policies, laws or regulations and actions or restrictions of regulatory agencies;
|
•
|
general economic, market or business conditions where our real estate activities are concentrated;
|
•
|
our ability to achieve our strategic initiatives;
|
•
|
our ability to obtain future entitlement and development approvals;
|
•
|
our partners’ ability to fund their capital commitments and otherwise fulfill their operating and financial obligations;
|
•
|
our ability to obtain or the availability of surety bonds to secure our performance related to construction and development activities and the pricing of bonds;
|
•
|
obtaining reimbursements and other payments from special improvement districts and other agencies and timing of such payments;
|
•
|
the levels of resale housing inventory in our development projects and the regions in which they are located;
|
•
|
fluctuations in costs and expenses, including impacts from shortages in materials or labor;
|
•
|
the opportunities (or lack thereof) that may be presented to us and that we may pursue;
|
•
|
the strength of our information technology systems and the risk of cybersecurity breaches;
|
•
|
the conditions of the capital markets and our ability to raise capital to fund expected growth; and
|
•
|
our ability to comply with our debt covenants, restrictions and limitations.
|
|
Three Months Ended
June 30, 2019 |
|
Nine Months Ended
June 30, 2019 |
||||
|
(In millions)
|
||||||
Revenues
|
$
|
88.2
|
|
|
$
|
192.0
|
|
Cost of sales
|
75.3
|
|
|
149.6
|
|
||
Selling, general and administrative expense
|
7.9
|
|
|
19.8
|
|
||
Equity in earnings of unconsolidated ventures
|
—
|
|
|
(0.5
|
)
|
||
Gain on sale of assets
|
(1.5
|
)
|
|
(2.4
|
)
|
||
Interest expense
|
—
|
|
|
—
|
|
||
Interest and other income
|
(1.9
|
)
|
|
(4.1
|
)
|
||
Income from continuing operations before taxes
|
$
|
8.4
|
|
|
$
|
29.6
|
|
|
Three Months Ended June 30, 2018
|
||||||||||||||
|
Real Estate
|
|
Other
|
|
Items Not Allocated
|
|
Consolidated
|
||||||||
|
(In millions)
|
||||||||||||||
Revenues
|
$
|
23.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
23.6
|
|
Cost of sales
|
9.9
|
|
|
0.1
|
|
|
—
|
|
|
10.0
|
|
||||
Selling, general and administrative expense
|
2.9
|
|
|
—
|
|
|
3.6
|
|
|
6.5
|
|
||||
Equity in earnings of unconsolidated ventures
|
(1.0
|
)
|
|
—
|
|
|
—
|
|
|
(1.0
|
)
|
||||
Gain on sale of assets
|
(1.3
|
)
|
|
—
|
|
|
—
|
|
|
(1.3
|
)
|
||||
Interest expense
|
—
|
|
|
—
|
|
|
1.6
|
|
|
1.6
|
|
||||
Interest and other income
|
(1.0
|
)
|
|
—
|
|
|
(1.6
|
)
|
|
(2.6
|
)
|
||||
Income (loss) from continuing operations before taxes
|
$
|
14.1
|
|
|
$
|
(0.1
|
)
|
|
$
|
(3.6
|
)
|
|
$
|
10.4
|
|
Net income attributable to noncontrolling interests
|
0.9
|
|
|
—
|
|
|
—
|
|
|
0.9
|
|
||||
Income (loss) from continuing operations before taxes attributable to Forestar Group Inc.
|
$
|
13.2
|
|
|
$
|
(0.1
|
)
|
|
$
|
(3.6
|
)
|
|
$
|
9.5
|
|
|
Nine Months Ended June 30, 2018
|
||||||||||||||
|
Real Estate
|
|
Other
|
|
Items Not Allocated
|
|
Consolidated
|
||||||||
|
(In millions)
|
||||||||||||||
Revenues
|
$
|
77.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
77.0
|
|
Cost of sales
|
42.4
|
|
|
6.5
|
|
|
—
|
|
|
48.9
|
|
||||
Selling, general and administrative expense
|
10.3
|
|
|
0.2
|
|
|
25.6
|
|
|
36.1
|
|
||||
Equity in earnings of unconsolidated ventures
|
(9.6
|
)
|
|
—
|
|
|
—
|
|
|
(9.6
|
)
|
||||
Gain on sale of assets
|
(4.1
|
)
|
|
—
|
|
|
—
|
|
|
(4.1
|
)
|
||||
Interest expense
|
—
|
|
|
—
|
|
|
5.8
|
|
|
5.8
|
|
||||
Interest and other income
|
(1.8
|
)
|
|
—
|
|
|
(3.0
|
)
|
|
(4.8
|
)
|
||||
Income (loss) from continuing operations before taxes
|
$
|
39.8
|
|
|
$
|
(6.7
|
)
|
|
$
|
(28.4
|
)
|
|
$
|
4.7
|
|
Net income attributable to noncontrolling interests
|
2.9
|
|
|
—
|
|
|
—
|
|
|
2.9
|
|
||||
Income (loss) from continuing operations before taxes attributable to Forestar Group Inc.
|
$
|
36.9
|
|
|
$
|
(6.7
|
)
|
|
$
|
(28.4
|
)
|
|
$
|
1.8
|
|
|
Three Months Ended June 30,
|
|
Nine Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Development projects
|
723
|
|
|
294
|
|
|
1,597
|
|
|
767
|
|
||||
Lot banking projects
|
435
|
|
|
3
|
|
|
627
|
|
|
89
|
|
||||
|
1,158
|
|
|
297
|
|
|
2,224
|
|
|
856
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Average sales price per lot
(a)
|
$
|
77,400
|
|
|
$
|
77,900
|
|
|
$
|
78,800
|
|
|
$
|
75,300
|
|
|
Three Months Ended June 30,
|
|
Nine Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(In millions)
|
||||||||||||||
Residential lot sales:
|
|
|
|
|
|
|
|
||||||||
Development projects
|
$
|
59.0
|
|
|
$
|
23.0
|
|
|
$
|
129.7
|
|
|
$
|
61.8
|
|
Lot banking projects
|
30.6
|
|
|
0.1
|
|
|
45.5
|
|
|
2.7
|
|
||||
Change in contract liabilities or deferred revenue
|
(2.0
|
)
|
|
(3.2
|
)
|
|
(3.6
|
)
|
|
(3.2
|
)
|
||||
|
87.6
|
|
|
19.9
|
|
|
171.6
|
|
|
61.3
|
|
||||
Residential tract sales
|
—
|
|
|
3.4
|
|
|
—
|
|
|
5.7
|
|
||||
Commercial tract sales
|
—
|
|
|
—
|
|
|
18.5
|
|
|
9.2
|
|
||||
Other
|
0.6
|
|
|
0.3
|
|
|
1.9
|
|
|
0.8
|
|
||||
|
$
|
88.2
|
|
|
$
|
23.6
|
|
|
$
|
192.0
|
|
|
$
|
77.0
|
|
Exhibit
|
|
Description
|
|
|
|
4.1
|
|
|
10.1†*
|
|
|
10.2†*
|
|
|
31.1*
|
|
|
31.2*
|
|
|
32.1*
|
|
|
32.2*
|
|
|
101.1**
|
|
The following materials from Forestar’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Total Equity, (iv) Consolidated Statements of Cash Flows, and (v) Notes to Consolidated Financial Statements.
|
*
|
Filed or furnished herewith.
|
**
|
Submitted electronically herewith.
|
†
|
Management contract or compensatory plan or arrangement.
|
|
FORESTAR GROUP INC.
|
|
|
|
|
Date: July 30, 2019
|
By:
|
/s/ Charles D. Jehl
|
|
|
Charles D. Jehl
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial and Principal Accounting Officer)
|
|
(a)
|
The 2018 SIP is established voluntarily by the Company, it is discretionary in nature and it may be amended, altered or discontinued by the Company at any time;
|
|
(b)
|
The grant of the Award is voluntary and occasional and does not create any contractual or other right to receive future grants of awards, or benefits in lieu of awards, even if awards have been granted repeatedly in the past. All decisions with respect to future award grants, if any, will be at the sole discretion of the Company;
|
|
(c)
|
The Award and the Participant’s participation in the 2018 SIP will not be interpreted to form an employment contract or service contract or relationship with the Company or any Subsidiary;
|
|
(d)
|
The Participant is voluntarily participating in the 2018 SIP; and
|
|
(e)
|
The future value of the underlying Shares is unknown and cannot be predicted with certainty.
|
|
(a)
|
Responsibility for Taxes
. Regardless of any action taken by the Company with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related items related to the Participant’s participation in the 2018 SIP and legally applicable to the Participant
(the “
Tax-Related Items
”)
,
the Participant acknowledges that the ultimate liability for all Tax-Related Items is and remains the Participant’s responsibility and may exceed the amount actually withheld by the Company (if any). The Participant further acknowledges that the Company (a) makes no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Award, including but not limited to, the grant, vesting or settlement of the Award, the subsequent sale of Shares acquired pursuant to such settlement, or the receipt of any dividends, and (b) does not commit to and is under no obligation to structure the terms of the grant or any aspect of the Award to reduce or eliminate the Participant’s liability for Tax-Related Items or achieve any particular tax result. Further, if the Participant has become subject to tax in more than one jurisdiction between the Grant Date and the date of any relevant taxable or tax withholding event, as applicable, the Participant acknowledges that the Company may be required to withhold or account for Tax-Related Items in more than one jurisdiction.
|
|
(b)
|
Withholding in Shares
. Subject to applicable law and the Company’s discretion, the Company may require the Participant to satisfy Tax-Related Items by deducting from the Shares otherwise deliverable to the Participant in settlement of the Award a number of whole Shares having a fair market value, as defined in the 2018 SIP, as of the date on which the Tax-Related Items arise, not in excess of the amount of such Tax-Related Items.
|
|
(c)
|
Permissible Withholding Methods
. The Company may satisfy its obligations for Tax-Related Items by:
|
|
|
(i)
|
withholding from the Participant’s cash compensation or fees paid to the Participant by the Company; or
|
|
|
(ii)
|
withholding from proceeds of the sale of Shares acquired upon vesting or settlement of the Award either through a voluntary sale or through a mandatory sale arranged by the Company (on the Participant’s behalf pursuant to this authorization); or
|
|
|
(iii)
|
allowing Participant to pay cash in the amount of the Tax-Related Items.; or
|
|
|
(iv)
|
any other method permitted by the Administrator.
|
|
(a)
|
Description of Electronic Delivery. The 2018 SIP documents, which may include but do not necessarily include: the 2018 SIP, this Agreement, the 2018 SIP Prospectus, and any reports of the Company provided generally to the Company’s stockholders, may be delivered to the Participant electronically. Such means of electronic delivery may include but do not necessarily include the delivery of a link to a Company intranet or the internet site of a third party involved in administering the 2018 SIP, the delivery of the document via e-mail or such other means of electronic delivery specified by the Company.
|
|
(b)
|
Consent to Electronic Delivery. The Participant acknowledges that the Participant has read the “Delivery of Documents and Notices” section of this Agreement and consents to the electronic delivery of the 2018 SIP documents and this Agreement, as described in this section. The Participant acknowledges that he or she may receive from the Company a paper copy of any documents delivered electronically at no cost to the Participant by contacting the Company by telephone or in writing. The Participant further acknowledges that the Participant will be provided with a paper copy of any documents if the attempted electronic delivery of such documents fails. Similarly, the Participant understands that the Participant must provide the Company or any designated third party administrator with a paper copy of any documents if the attempted electronic delivery of such documents fails. The Participant may revoke his or her consent to the electronic delivery of documents described in this section or may change the electronic mail address to which such documents are to be delivered (if Participant has provided an electronic mail address) at any time by notifying the Company of such revoked consent or revised e-mail address by telephone, postal service or electronic mail. Finally, the Participant understands that he or she is not required to consent to electronic delivery of documents as described in this section.
|
By:
|
_____________________________
|
By:
|
_____________________________
|
By:
|
_____________________________
|
Date:
|
_____________________________
|
|
(a)
|
The 2018 SIP is established voluntarily by the Company, it is discretionary in nature and it may be amended, altered or discontinued by the Company at any time;
|
|
(b)
|
The grant of the Award is voluntary and occasional and does not create any contractual or other right to receive future grants of awards, or benefits in lieu of awards, even if awards have been granted repeatedly in the past. All decisions with respect to future award grants, if any, will be at the sole discretion of the Company;
|
|
(c)
|
The Award and the Participant’s participation in the 2018 SIP will not be interpreted to form an employment contract or service contract or relationship with the Company or any Subsidiary;
|
|
(d)
|
The Participant is voluntarily participating in the 2018 SIP; and
|
|
(e)
|
The future value of the underlying Shares is unknown and cannot be predicted with certainty.
|
|
(a)
|
Responsibility for Taxes
. Regardless of any action taken by the Company with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related items related to the Participant’s participation in the 2018 SIP and legally applicable to the Participant
(the “
Tax-Related Items
”)
,
the Participant acknowledges that the ultimate liability for all Tax-Related Items is and remains the Participant’s responsibility and may exceed the amount actually withheld by the Company (if any). The Participant further acknowledges that the Company (a) makes no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Award, including but not limited to, the grant, vesting or settlement of the Award, the subsequent sale of Shares acquired pursuant to such settlement, or the receipt of any dividends, and (b) does not commit to and is under no obligation to structure the terms of the grant or any aspect of the Award to reduce or eliminate the Participant’s liability for Tax-Related Items or achieve any particular tax result. Further, if the Participant has become subject to tax in more than one jurisdiction between the Grant Date and the date of any relevant taxable or tax withholding event, as applicable, the Participant acknowledges that the Company may be required to withhold or account for Tax-Related Items in more than one jurisdiction.
|
|
(b)
|
Withholding in Shares
. Subject to applicable law and the Company’s discretion, the Company may require the Participant to satisfy Tax-Related Items by deducting from the Shares otherwise deliverable to the Participant in settlement of the Award a number of whole Shares having a fair market value, as defined in the 2018 SIP, as of the date on which the Tax-Related Items arise, not in excess of the amount of such Tax-Related Items.
|
|
(c)
|
Permissible Withholding Methods
. The Company may satisfy its obligations for Tax-Related Items through:
|
|
|
(i)
|
the Participant’s mandatory or elective sale of Shares; or
|
|
|
(ii)
|
having the Company withhold a portion of the Shares that otherwise would be issued to Participant upon the vesting or settlement of the Award; or
|
|
|
(iii)
|
Participant tendering Shares previously acquired.
|
|
(a)
|
Description of Electronic Delivery. The 2018 SIP documents, which may include but do not necessarily include: the 2018 SIP, this Agreement, the 2018 SIP Prospectus, and any reports of the Company provided generally to the Company’s stockholders, may be delivered to the Participant electronically. Such means of electronic delivery may include but do not necessarily include the delivery of a link to a Company intranet or the internet site of a third party involved in administering the 2018 SIP, the delivery of the document via e-mail or such other means of electronic delivery specified by the Company.
|
|
(b)
|
Consent to Electronic Delivery. The Participant acknowledges that the Participant has read the “Delivery of Documents and Notices” section of this Agreement and consents to the electronic delivery of the 2018 SIP documents and this Agreement, as described in this section. The Participant acknowledges that he or she may receive from the Company a paper copy of any documents delivered electronically at no cost to the Participant by contacting the Company by telephone or in writing. The Participant further acknowledges that the Participant will be provided with a paper copy of any documents if the attempted electronic delivery of such documents fails. Similarly, the Participant understands that the Participant must provide the Company or any designated third party administrator with a paper copy of any documents if the attempted electronic delivery of such documents fails. The Participant may revoke his or her consent to the electronic delivery of documents described in this section or may change the electronic mail address to which such documents are to be delivered (if Participant has provided an electronic mail address) at any time by notifying the Company of such revoked consent or revised e-mail address by telephone, postal service or electronic mail. Finally, the Participant understands that he or she is not required to consent to electronic delivery of documents as described in this section.
|
By:
|
_____________________________
|
By:
|
_____________________________ Director
|
Date:
|
_____________________________
|
|
/s/ Daniel C. Bartok
|
|
Daniel C. Bartok
Chief Executive Officer
|
|
/s/ Charles D. Jehl
|
|
Charles D. Jehl
Chief Financial Officer
|
|
/s/ Daniel C. Bartok
|
|
Daniel C. Bartok
|
|
/s/ Charles D. Jehl
|
|
Charles D. Jehl
|