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What changed in Forestar Group Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Forestar Group Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+182 added−162 removedSource: 10-K (2025-11-19) vs 10-K (2024-11-19)

Top changes in Forestar Group Inc.'s 2025 10-K

182 paragraphs added · 162 removed · 140 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

27 edited+3 added−4 removed42 unchanged
Biggest changeAt September 30, 2024, we conducted our operations in the states and markets listed below. 3 Table of Contents State Market State Market Alabama Baldwin County New Jersey Southern New Jersey Birmingham Huntsville New Mexico Albuquerque Mobile Tuscaloosa North Carolina Asheville Charlotte Arizona Phoenix Greensboro Tucson Greenville Raleigh-Durham California Riverside County Wilmington Sacramento Ohio Columbus Colorado Denver Fort Collins Oregon Bend Florida Fort Myers/Naples Pennsylvania Philadelphia Gainesville Jacksonville South Carolina Charleston Lakeland Greenville/Spartanburg Melbourne Hilton Head Miami/Fort Lauderdale Myrtle Beach Ocala Orlando Tennessee Nashville Pensacola Port St.
Biggest changeAt September 30, 2025, we conducted our operations in the states and markets listed below. 3 Table of Contents State Market State Market Alabama Baldwin Nevada Las Vegas Birmingham Reno Huntsville Mobile New Jersey Southern New Jersey Tuscaloosa New Mexico Albuquerque Arizona Phoenix Tucson North Carolina Asheville Charlotte California Bay Area Greensboro/Winston-Salem Modesto/Merced/Stockton Greenville Riverside County Raleigh-Durham Sacramento Wilmington Colorado Denver Ohio Cincinnati/Dayton Fort Collins Columbus Florida Fort Myers/Naples Pennsylvania Philadelphia Gainesville Jacksonville South Carolina Charleston Lakeland Greenville/Spartanburg Melbourne Hilton Head Miami Myrtle Beach Ocala Orlando Tennessee Knoxville Panama City Nashville Pensacola Tallahassee Texas Austin Tampa/Sarasota Dallas Volusia County Fort Worth Houston Georgia Atlanta San Antonio Augusta Savannah Utah Salt Lake City/Provo/Ogden Illinois Chicago Virginia Northern Virginia Richmond Indiana Indianapolis Virginia Beach/Williamsburg Maryland Suburban Washington, D.C.
Our land development activities are also subject to an extensive array of local, state and federal statutes, ordinances, rules and regulations concerning the protection of health, safety and the environment. The particular compliance requirements for each site vary greatly according to location, environmental condition and the present and former uses of the site and adjoining properties.
Our land development activities are also subject to an extensive array of local, state and federal statutes, ordinances, rules and regulations concerning the protection of health, safety and the environment. Compliance requirements for each site vary greatly according to location, environmental condition and the present and former uses of the site and adjoining properties.
We take workplace safety seriously at our development sites and in our offices. Our organization strives for a zero-incident safety culture and full compliance with safety regulations. We provide certification training to our field personnel through an Occupational Safety and Health Administration authorized third-party vendor.
We take workplace safety seriously at our development sites and in our offices. Our organization strives for a zero-incident safety culture and full compliance with safety regulations. We provide certification training to our field personnel through an Occupational Safety and Health Administration (OSHA) authorized third-party vendor.
We became a majority-owned subsidiary of D.R. Horton, Inc. ("D.R. Horton") in October 2017 by virtue of a merger with a wholly-owned subsidiary of D.R. Horton. Immediately following the merger, D.R. Horton owned 75% of our outstanding common stock, and as of September 30, 2024 they owned approximately 62% of our outstanding common stock. As our controlling shareholder, D.R.
We became a majority-owned subsidiary of D.R. Horton, Inc. ("D.R. Horton") in October 2017 by virtue of a merger with a wholly-owned subsidiary of D.R. Horton. Immediately following the merger, D.R. Horton owned 75% of our outstanding common stock, and as of September 30, 2025 they owned approximately 62% of our outstanding common stock. As our controlling shareholder, D.R.
We also provide our teams with many safety resources, including safety checklists, policies, procedures, and best practices, and we communicate with all of our employees through a monthly safety newsletter to inform and reinforce our commitment to and concern for their well-being.
We also provide our teams with many safety resources, including safety checklists, policies, procedures, best practices, and communicate with our employees through a monthly safety newsletter to inform and reinforce our commitment to and concern for their well-being.
Paul West Virginia Eastern West Virginia Nevada Las Vegas Reno 4 Table of Contents When evaluating new or existing markets for purposes of capital allocation, we consider local, market-specific factors, including, among others: • economic conditions; • employment levels and job growth; • housing demand and affordability; • availability of land and lots in desirable locations at acceptable terms; • land entitlement and development processes; • availability of qualified subcontractors; • new and secondary home sales activity; • competition; and • performance capabilities of our local management teams.
Paul West Virginia Eastern West Virginia 4 Table of Contents When evaluating new or existing markets for purposes of capital allocation, we consider local, market-specific factors, including, among others: • economic conditions; • employment levels and job growth; • housing demand and affordability; • availability of land and lots in desirable locations at acceptable terms; • land entitlement and development processes; • availability of qualified subcontractors; • new and secondary home sales activity; • competition; and • performance capabilities of our local management teams.
As a result of seasonal activity, our quarterly results of operations and financial position at the end of a particular fiscal quarter are not necessarily representative of the balance of our fiscal year. 8 Table of Contents Human Capital Resources People and Culture We have increased our number of employees from 303 at September 30, 2023 to 393 at September 30, 2024 to support the growth of our residential lot development business across a geographically diversified platform.
As a result of seasonal activity, our quarterly results of operations and financial position at the end of a particular fiscal quarter are not necessarily representative of the balance of our fiscal year. 8 Table of Contents Human Capital Resources People and Culture We have increased our number of employees from 393 at September 30, 2024 to 433 at September 30, 2025 to support the growth of our residential lot development business across a geographically diversified platform.
We have expanded and diversified our lot development operations across 59 markets in 24 states. We believe our geographically diverse operations provide a strong platform for us to consolidate market share in the highly fragmented lot development industry.
We have expanded and diversified our lot development operations across 64 markets in 23 states. We believe our geographically diverse operations provide a strong platform for us to consolidate market share in the highly fragmented lot development industry.
We believe this provides long-term focus and continuity to our operations while also providing opportunities for the growth and advancement of our employees. During fiscal 2024, 26 employees were placed into new leadership positions in our regional and divisional offices, and of those, 54% were promoted from within the organization.
We believe this provides long-term focus and continuity to our operations while also providing opportunities for the growth and advancement of our employees. During fiscal 2025, 40 employees were placed into new leadership positions in our regional and divisional offices, and of those, 78% were promoted from within the organization.
We also make short-term strategic investments in finished lots (lot banking) and undeveloped land (land banking) with the intent to sell these assets within a short time period to utilize available capital prior to its deployment into longer-term lot development projects. For the year ended September 30, 2024, we sold 15,068 lots with an average sales price of $96,600.
We also make short-term strategic investments in finished lots (lot banking) and undeveloped land (land banking) with the intent to sell these assets within a short time period to utilize available capital prior to its deployment into longer-term lot development projects. For the year ended September 30, 2025, we sold 14,240 lots with an average sales price of $108,400.
At September 30, 2024, 305 of our employees worked in our regional and divisional offices and 88 worked at our corporate office. In fiscal 2024, our total cost for employee compensation and benefits was $77.5 million. In addition to our employees, we also have a Shared Services Agreement with D.R. Horton whereby D.R.
At September 30, 2025, 340 of our employees worked in our regional and divisional offices and 93 worked at our corporate office. In fiscal 2025, our total cost for employee compensation and benefits was $105.3 million. In addition to our employees, we also have a Shared Services Agreement with D.R. Horton whereby D.R.
Horton, utilizing available capital prior to its deployment into longer term lot development projects. We manage our level of lot/land banking relative to short-term liquidity and expected future cash requirements for lot development projects. Cost Controls We control development costs by designing our communities efficiently and by obtaining competitive bids for materials and labor.
We manage our level of lot/land banking relative to short-term liquidity and expected future cash requirements for lot development projects. 7 Table of Contents Cost Controls We control development costs by designing our communities efficiently and by obtaining competitive bids for materials and labor.
Additionally, because substantially all of our land development work is performed by subcontractors, we require that our subcontractors maintain safety programs as well. 9 Table of Contents Governmental Regulation and Environmental Matters Our operations are subject to extensive and complex regulations. We, and the subcontractors we use, must comply with many federal, state and local laws and regulations.
Additionally, because substantially all of our land development work is performed by subcontractors, we require that they maintain their own safety programs as well. 9 Table of Contents Governmental Regulation and Environmental Matters Our operations are subject to extensive and complex regulations.
Competition We face significant competition for the acquisition, development and sale of real estate in our markets. Our major competitors include numerous national, regional and local developers, including homebuilders. In addition, we compete with other development projects offering similar amenities, products and/or locations. Competition also exists for investment opportunities, financing, available land, raw materials and labor.
Competition We face significant competition for the acquisition, development and sale of real estate in our markets. Our major competitors include numerous local, regional, and national developers, including home builders. Competition also exists for investment opportunities, financing, available land, raw materials and labor.
At September 30, 2024, our lot position consisted of 95,100 residential lots, of which approximately 57,800 were owned and 37,300 were controlled through purchase contracts. Of our 57,800 owned lots, approximately 21,000 lots are under contract to be sold for an aggregate remaining sales price of approximately $1.9 billion.
At September 30, 2025, our lot position consisted of 99,800 residential lots, of which approximately 65,100 were owned and 34,700 were controlled through purchase contracts. Of our 65,100 owned lots, approximately 23,800 lots are under contract to be sold for an aggregate remaining sales price of approximately $2.1 billion.
At September 30, 2024, our lots owned included approximately 21,000 lots (36%) that were under contract to be sold, of which approximately 20,500 lots are under contract to D.R. Horton.
At September 30, 2025, our lots owned included approximately 23,800 lots (37%) that were under contract to be sold, of which approximately 22,800 lots are under contract to D.R. Horton.
However, changes in regulations, such as the climate-related disclosure legislation recently enacted by the State of California and the climate-related disclosure rules adopted by the SEC, which are currently under judicial review, could increase our costs to comply with such regulations, as discussed in "Item 1A. Risk Factors." Available Information Our principal executive offices are located at 2221 E.
However, changes in regulations, such as the climate-related disclosure legislation recently enacted by the State of California could increase our costs to comply with such regulations, as discussed in "Item 1A. Risk Factors." Available Information Our principal executive offices are located at 2221 E. Lamar Blvd., Suite 790, Arlington, Texas 76006. Our telephone number is (817) 769-1860.
We also require personal protective equipment, such as hard hats, high visibility safety wear and hearing and eye protection to be worn in certain circumstances at our active development sites.
We also require personal protective equipment, such as hard hats, high-visibility safety wear and hearing and eye protection be worn as necessary to meet OSHA requirements.
We have an active recruiting team that partners with college campuses and external organizations to identify strong new hires and experienced professionals. Our paid internship program provides college students and recent graduates an opportunity to work alongside some of the most experienced professionals in the land development industry.
Horton, we leverage their recruiting team that partners with college campuses and external organizations to identify promising new talent and established professionals. Through our paid internship program, college students and recent graduates gain valuable experience working alongside some of the most experienced professionals in the land development industry.
These include zoning, permitting, density and development requirements, and building, environmental, advertising, labor and real estate sales rules and regulations. These regulations and requirements affect substantially all aspects of our land development and sales processes in varying degrees across our markets.
We, and our subcontractors, must comply with many federal, state and local laws and regulations including, but not limited to, zoning, permitting, density and development, building, environmental, advertising, labor and real estate sales. These regulations and requirements affect substantially all aspects of our land development and sales processes in varying degrees across our markets.
We conduct a wide range of project planning and management activities related to the entitlement, acquisition, community development and sale of residential lots. We generally secure entitlements while the land is under contract by creating plans that meet the needs of the markets where we operate, and we aim to have all entitlements secured before closing on the investment.
We generally secure entitlements while the land is under contract by creating plans that meet the needs of the markets where we operate, and we aim to have all entitlements secured before closing on the investment. Moving land through the entitlement and development process creates significant value.
Horton for land development services, generally in geographic markets where we do not have established development teams and capabilities. 7 Table of Contents Lot/Land Banking In addition to our residential lot development activities, we also make strategic short-term investments in finished lots (lot banking) and undeveloped land (land banking) with the intent to sell these assets within a short time period, primarily to D.R.
Lot/Land Banking In addition to our residential lot development activities, we also make strategic short-term investments in finished lots (lot banking) and undeveloped land (land banking) with the intent to sell these assets within a short time period, primarily to D.R. Horton, utilizing available capital prior to its deployment into longer term lot development projects.
Moving land through the entitlement and development process creates significant value. We primarily invest in entitled short-duration projects that can be developed in phases, enabling us to complete and sell lots at a pace that matches market demand, consistent with our focus on maximizing capital efficiency and returns.
We primarily invest in entitled short-duration projects that can be developed in phases, enabling us to complete and sell lots at a pace that matches market demand, consistent with our focus on maximizing capital efficiency and returns. This strategy is a unique, lower-risk business model that we expect will produce more consistent returns than other public and private land developers.
Entry-level and first-time move-up homebuyers are the largest segments of the new home market. We also market some of our communities towards build-to-rent operators. Our real estate origins date back to the 1954 incorporation of Lumbermen’s Investment Corporation, which became a wholly-owned subsidiary of the predecessor to Temple-Inland Inc. ("Temple-Inland") in 1971.
Our real estate origins date back to the 1954 incorporation of Lumbermen’s Investment Corporation, which became a wholly-owned subsidiary of the predecessor to Temple-Inland Inc. ("Temple-Inland") in 1971.
In recent years, municipalities and other government agencies were frequently delayed in granting the proper approvals to us, which delayed our development activities in certain markets. In select situations, we contract with D.R.
Construction time for our lots depends on the availability of labor, materials and supplies, the weather, and other factors. We are subject to governmental regulations that affect our land development operations. In recent years, municipalities and other government agencies were frequently delayed in granting the proper approvals to us, which delayed our development activities in certain markets.
Our common stock is listed on the New York Stock Exchange (NYSE) under the ticker symbol "FOR." The terms "Forestar," the "Company," "we" and "our" used herein refer to Forestar Group Inc., a Delaware corporation, and its predecessors and subsidiaries.
Our common stock is listed on the New York Stock Exchange (NYSE) and the NYSE Texas under the ticker symbol "FOR." The listing and trading of the Common Stock on the NYSE Texas commenced on July 1, 2025.
Recruitment, Development and Retention We are committed to hiring, developing and supporting an energetic, diverse workforce and maintaining a productive, positive and inclusive workplace. We believe diversity in the workplace produces unique perspectives and fresh ideas and helps us better serve our customers.
Recruitment, Development and Retention We are committed to hiring, developing and supporting an energetic workforce and maintaining a productive, positive and inclusive workplace. We believe that when people feel included and have ample opportunities for professional growth, they bring forward a variety of perspectives and ideas that strengthen our company. Through our Shared Services Agreement, with D.R.
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This strategy is a unique, lower-risk business model that we expect will produce more consistent returns than other public and private land developers.
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The terms "Forestar," the "Company," "we" and "our" used herein refer to Forestar Group Inc., a Delaware corporation, and its predecessors and subsidiaries. We conduct a wide range of project planning and management activities related to the entitlement, acquisition, community development and sale of residential lots.
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Lucie Texas Austin Tampa/Sarasota Dallas Volusia County Fort Worth Houston Georgia Atlanta San Antonio Augusta Savannah Utah Salt Lake City Illinois Chicago Virginia Northern Virginia Richmond Indiana Indianapolis Virginia Beach Maryland Suburban Washington, D.C. Washington Seattle/Tacoma/Everett Minnesota Minneapolis/St.
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Entry-level and first-time move-up homebuyers are the largest segments of the new home market. We also market some of our communities towards build-to-rent operators. We may engage in the development of multifamily sites as market opportunities arise.
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The ability to consistently source qualified labor at reasonable prices remains challenging as labor supply growth has not kept pace with construction demand. We are subject to governmental regulations that affect our land development operations.
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In select situations, we contract with D.R. Horton for land development services, generally in geographic markets where we do not have established development teams and capabilities.
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Lamar Blvd., Suite 790, Arlington, Texas 76006. Our telephone number is (817) 769-1860.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

46 edited+13 added−7 removed112 unchanged
Biggest changeIf the maturity of our revolving credit facility and/or other indebtedness together having an aggregate principal amount outstanding of $40 million or more is accelerated, an event of default would result under the indentures governing the senior notes, entitling the trustee for the notes or holders of at least 25% in aggregate principal amount of the then outstanding notes to declare all such notes to be due and payable immediately.
Biggest changeIf any of our or our restricted subsidiaries’ indebtedness together having an aggregate principal amount outstanding of $40 million or more, in the case of the indenture governing our 5.0% senior notes due 2028, or $75 million or more, in the case of our 6.5% senior notes due 2033, were accelerated and such acceleration were not rescinded or such indebtedness were not satisfied, in either case within 30 days, an event of default would result under the indentures governing the senior notes, entitling the trustee for the senior notes or holders of at least 25%, in the case of the 5.0% senior notes due 2028, or 30%, in the case of the 6.5% senior notes due 2033, in aggregate principal amount of the applicable series of the notes to declare all such notes to be due and payable immediately.
Item 1A. Risk Factors. Discussion of our business and operations included in this annual report on Form 10-K should be read together with the risk factors set forth below. They describe various risks and uncertainties we are or may become subject to, many of which are difficult to predict or beyond our control.
Item 1A. Risk Factors. Discussion of our business and operations included in this annual report on Form 10-K should be read together with the risk factors set forth below. They describe various risks and uncertainties we are or may become subject to, many of which are difficult to predict and beyond our control.
Although past cybersecurity incidents have not had a material effect on our business or operations to date, in the future, a data security breach, a significant and extended disruption in the functioning of our information technology systems or a breach of any of our data security controls could disrupt our business operations, damage our reputation and cause us to lose customers.
Although past cybersecurity incidents have not had a material effect on our business or operations to date, in the future, a significant and extended disruption in the functioning of our information technology systems or a breach of any of our data security controls could disrupt our business operations, damage our reputation and cause us to lose customers.
The covenants in the indentures governing our senior notes and the credit agreement governing our revolving credit facility impose, and the terms of any future indebtedness may impose, operating and other restrictions on us and our subsidiaries.
The covenants in the indentures governing the senior notes and the credit agreement governing our revolving credit facility impose, and the terms of any future indebtedness may impose, operating and other restrictions on us and our subsidiaries.
Upon the occurrence of a change of control triggering event, as defined in the indentures governing our senior notes, we will be required to offer to repurchase such notes at 101% of their principal amount, together with all accrued and unpaid interest, if any.
Upon the occurrence of a change of control triggering event, as defined in the indentures governing the senior notes, we will be required to offer to repurchase such notes at 101% of their principal amount, together with all accrued and unpaid interest, if any.
Similarly, the State of California has recently enacted its own legislation requiring extensive climate-related disclosures for companies deemed to be doing business in California, and other states are considering similar laws.
Similarly, the State of California has enacted its own legislation requiring extensive climate-related disclosures for companies deemed to be doing business in California, and other states are considering similar laws.
Increasing governmental and societal attention to ESG matters, including expanding mandatory and voluntary reporting, diligence, and disclosure on topics such as climate change, human capital, labor, cybersecurity and risk oversight, could expand the nature, scope, and complexity of matters that we are required to control, assess and report. In March 2024, the SEC adopted new rules regarding climate-related disclosures.
Increasing governmental and societal attention to sustainability matters, including expanding mandatory and voluntary reporting, diligence, and disclosure on topics such as climate change, human capital, labor, cybersecurity and risk oversight, could expand the nature, scope, and complexity of matters that we are required to control, assess and report. In March 2024, the SEC adopted new rules regarding climate-related disclosures.
Additionally, phishing attacks, whereby perpetrators attempt to fraudulently induce employees, customers, vendors or other users of a company’s systems to disclose sensitive information to gain access to its data, have increased significantly in recent years. With the use of artificial intelligence, these phishing attacks may contain highly convincing language making them difficult to distinguish from legitimate messages.
Additionally, phishing attacks, whereby perpetrators attempt to fraudulently induce employees, customers, vendors or other users of a company’s systems to disclose personal information to gain access to its data, have increased significantly in recent years. With the use of artificial intelligence, these phishing attacks may contain highly convincing language making them difficult to distinguish from legitimate messages.
Horton is able to designate a certain number of the members of our Board. Our Nominating and Governance Committee has the right to designate the remaining number of individuals to the Board, and in any event not less than one. Currently, D.R. Horton has the right to designate four out of six members of our Board.
Horton is able to designate a certain number of the members of our Board. Our Nominating and Governance Committee has the right to designate the remaining number of individuals to the Board, and in any event not less than one. Currently, D.R. Horton has the right to designate four out of seven members of our Board.
As a result, we may sell fewer lots and may have lower sales revenues, which could have an adverse effect on our business, liquidity, financial condition and results of operations. Delays or failures by governmental authorities to take expected actions could reduce our returns or cause us to incur losses on certain real estate development projects.
As a result, we may sell fewer lots and may have lower sales revenues, which could have an adverse effect on our business, liquidity, financial condition and results of operations. 18 Table of Contents Delays or failures by governmental authorities to take expected actions could reduce our returns or cause us to incur losses on certain real estate development projects.
Horton is able to designate a certain number of the members of our Board of Directors. Currently, D.R. Horton has the right to designate four out of six members of our Board, subject to a requirement that we and D.R.
Horton is able to designate a certain number of the members of our Board of Directors. Currently, D.R. Horton has the right to designate four out of seven members of our Board, subject to a requirement that we and D.R.
Any loss of sensitive information and failure to comply with these requirements or other applicable laws and regulations in this area could result in substantial penalties, reputational damage or litigation.
Any loss of personal information and failure to comply with these requirements or other applicable laws and regulations in this area could result in substantial penalties, reputational damage or litigation.
Changes in these laws and regulations, including the subsequent implementation of rules by the administering government authorities, may require us to incur additional compliance costs, and such costs may be significant. 17 Table of Contents There can be no assurance that our current business strategy will be successful.
Changes in these laws and regulations, including the subsequent implementation of rules by the administering government authorities, may require us to incur additional compliance costs, and such costs may be significant. There can be no assurance that our current business strategy will be successful.
These information technology systems are dependent upon global communications providers, web browsers, third-party software and data storage providers and other aspects of the Internet infrastructure that have experienced security breaches, cyber incidents, ransomware attacks, significant systems failures and service outages in the past.
These information technology systems are dependent upon global communications providers, web browsers, third-party software and data storage providers and other aspects of the Internet infrastructure that have experienced cyber security incidents, significant systems failures and service outages in the past.
The unintended or unauthorized disclosure of personal identifying and confidential information as a result of a security breach by any means could lead to litigation or other proceedings against us by the affected individuals or business partners, or by regulators. The outcome of such proceedings, which could include penalties or fines, could have a significant negative impact on our business.
The unintended or unauthorized disclosure of personal identifying and confidential information as a result of a cybersecurity incident by any means could lead to litigation or other proceedings against us by the affected individuals or business partners, or by regulators. The outcome of such proceedings, which could include penalties or fines, could have a significant negative impact on our business.
Risks Related to Our Business Operations The homebuilding and lot development industries are cyclical and affected by changes in economic, real estate or other conditions that could adversely affect our business and financial results.
Risks Related to Our Business and our Industry The homebuilding and lot development industries are cyclical and significantly affected by changes in economic, real estate or other conditions that could adversely affect our business and financial results.
The U.S. and other countries have experienced, and may experience in the future, outbreaks of contagious diseases that affect public health and public perception of health risk. In the event of a widespread, prolonged actual or perceived outbreak of any contagious disease, such as COVID-19, our operations could be negatively impacted.
The U.S. and other countries have experienced, and may experience in the future, outbreaks of contagious diseases that affect public health and public perception of health risk. In the event of a widespread, prolonged actual or perceived outbreak of any contagious disease, our operations could be negatively impacted.
If we are unable to obtain surety bonds when required, our results of operations and cash flows could be adversely affected. 15 Table of Contents Information technology failures, data security breaches, and the failure to satisfy privacy and data protection laws and regulations could harm our business.
If we are unable to obtain surety bonds when required, our results of operations and cash flows could be adversely affected. 15 Table of Contents Information technology failures, cybersecurity incidents, and the failure to satisfy privacy and data protection laws and regulations could harm our business.
The stock markets in general may experience extreme volatility that may be unrelated to the operating performance of particular companies. These broad market fluctuations may adversely affect the trading price of our common stock, make it difficult to predict the market price of our common stock in the future and cause the value of our common stock to decline.
The stock markets in general may experience extreme volatility that may be unrelated to the operating performance of particular companies. These broad market fluctuations may adversely affect the trading price of our common stock, making it difficult to predict the market price of our common stock in the future and causing the value of our common stock to decline.
Failure to receive reimbursement for qualified expenses could adversely affect our cash flows and reduce our returns or cause us to incur losses on certain real estate development projects. 18 Table of Contents Failure to succeed in new markets may limit our growth.
Failure to receive reimbursement for qualified expenses could adversely affect our cash flows and reduce our returns or cause us to incur losses on certain real estate development projects. Failure to succeed in new markets may limit our growth.
From time to time, we obtain performance bonds, the unavailability of which could adversely affect our results of operations and cash flows. From time to time, we provide surety bonds to secure our performance or obligations under construction contracts, development agreements and other arrangements. At September 30, 2024, we had $809.0 million of outstanding surety bonds.
From time to time, we obtain performance bonds, the unavailability of which could adversely affect our results of operations and cash flows. From time to time, we provide surety bonds to secure our performance or obligations under construction contracts, development agreements and other arrangements. At September 30, 2025, we had $853.4 million of outstanding surety bonds.
We use information technology and other computer resources to carry out important operational and marketing activities and to maintain our business records.
We use information technology and other computer resources, including artificial intelligence, to carry out important operational and marketing activities and to maintain our business records.
We may also be required to incur significant costs to protect against damages caused by information technology failures, security breaches, and the failure to satisfy privacy and data protection laws and regulations in the future as legal requirements continue to increase.
We may also be required to incur significant costs to protect against damages caused by information technology failures, cybersecurity incidents, and the failure to satisfy privacy, data protection, and artificial intelligence laws and regulations in the future as legal requirements continue to increase.
The climates and geology of many of the states in which we operate, including California, Florida, Texas and other coastal areas where we have some of our larger operations and which have experienced recent natural disasters, present increased risks of adverse weather or natural disasters.
The climates and geology of many of the states in which we operate, including California, Florida, Texas and other coastal areas where we have some of our larger operations, present increased risks of adverse weather or natural disasters, such as wildfires and hurricanes.
During the last few years, we experienced multiple disruptions in our supply chain, which resulted in shortages of certain construction materials and tightness in the labor market. This caused our construction cycle times to lengthen and costs of construction materials to increase.
In the recent past, we experienced multiple disruptions in our supply chain, which resulted in shortages of certain construction materials and tightness in the labor market. This caused our construction cycle times to lengthen and costs of construction materials to increase.
However, given the rapidly changing nature of environmental laws and matters that may arise that are not currently known, we cannot predict our future exposure concerning such matters, and our future costs to achieve compliance or remedy potential violations could be significant.
However, given the rapidly changing nature of environmental laws and matters that may arise that are not currently known, we cannot predict our future exposure concerning such matters, and our future costs to achieve compliance or remedy potential violations could be significant. Additionally, actual or perceived sustainability matters and our response to these matters could harm our business.
The facility also provides for the issuance of letters of credit with a sublimit equal to the greater of $100 million and 50% of the total revolving credit commitments. The maturity date of the facility is October 28, 2026.
The facility also provides for the issuance of letters of credit with a sublimit equal to the greater of $100 million and 50% of the total revolving credit commitments.
We also have outstanding $400 million principal amount of 3.85% senior notes due 2026 and $300 million principal amount of 5.0% senior notes due 2028, both of which may be redeemed prior to maturity, subject to certain limitations and premiums defined in the indenture agreements.
We also have outstanding $300 million principal amount of 5.0% senior notes due 2028 and $500 million principal amount of 6.5% senior notes due 2033, all of which may be redeemed prior to maturity, subject to certain limitations and premiums defined in the indenture agreements.
The use of remote work environments and virtual platforms may increase our risk of cyber incidents or data security breaches. Further, geopolitical tensions or conflicts may create a heightened risk of cyber incidents or other data security breaches.
The use of remote work environments and virtual platforms may increase our risk of cyber incidents that could compromise our data. Further, geopolitical tensions or conflicts may create a heightened risk of these incidents.
We cannot provide assurances that a security breach, cyber incident, data theft or other significant systems or security failures will not occur in the future, and such occurrences could have a material and adverse effect on our consolidated results of operations or financial position. 16 Table of Contents Governmental regulations and environmental matters could increase the cost and limit the availability of property suitable for residential lot development and could adversely affect our business and financial results.
We cannot provide assurances that a cyber incident, including data theft or other significant systems or security failures will not occur in the future, and such occurrences could have a material and adverse effect on our consolidated results of operations or financial position. 16 Table of Contents We are subject to litigation or other claims, which could materially and adversely affect us.
Though these rules are currently being challenged in legal proceedings and their effectiveness has been stayed by the SEC, these rules, if they become effective, would require public companies to make a wide range of climate-related disclosures.
These rules were subsequently challenged in legal proceedings, and their effectiveness was stayed by the SEC pending judicial review. In March 2025, the SEC terminated its defense of the rules; however, if they become effective, they would require public companies to make a wide range of climate-related disclosures.
However, there has been no material impact on our business from these events or material operational challenges resulting from these events, but they could adversely affect our business in the future.
However, there has been no material impact on our business from these events or material operational challenges resulting from these events, but they could adversely affect our business in the future. A health and safety incident relating to our operations could be costly in terms of potential liability and reputational damage.
Although our construction cycle times have decreased more recently, if shortages and cost increases in construction materials and tightness in the labor market increase, our construction cycle time and profit margins could be adversely impacted. 14 Table of Contents Public health issues such as a major epidemic or pandemic could adversely affect our business and financial results.
Although our construction cycle times have decreased more recently, if shortages and cost increases in construction materials and tightness in the labor market increase, our construction cycle time and profit margins could be adversely impacted.
As of September 30, 2024, our consolidated debt was $706.4 million, including $400 million principal amount of 3.85% senior notes due 2026 and $300 million principal amount of 5.0% senior notes due 2028.
As of September 30, 2025, our consolidated debt was $802.7 million, including $300 million principal amount of 5.0% senior notes due 2028 and $500 million principal amount of 6.5% senior notes due 2033.
We have incurred costs in an effort to comply with these requirements, but our costs may increase significantly if new requirements are enacted and based on how individuals exercise their rights.
Among other things, these regulations impose certain obligations for handling specified personal information in our systems, including notifying individuals regarding information we have collected from them. We have incurred costs in an effort to comply with these requirements, but our costs may increase significantly if new requirements are enacted and based on how individuals exercise their rights.
Any of these may limit, delay or increase the costs of acquisition of land for residential use and development or home construction. We are also subject to a significant number and variety of local, state and federal laws and regulations concerning protection of health, safety, labor standards and the environment.
We are also subject to a significant number and variety of local, state and federal laws and regulations concerning protection of health, safety, labor standards and the environment.
Due to health and safety regulatory requirements and the number of residential lots we develop, health and safety performance is critical to the success of our business.
Land development sites are inherently dangerous, and operating in this industry poses certain inherent health and safety risks. Due to health and safety regulatory requirements and the number of residential lots we develop, health and safety performance is critical to the success of our business.
We are subject to determinations by these authorities as to the adequacy of water or sewage facilities, roads or other local services. New housing developments may also be subject to various assessments for schools, parks, streets and other public improvements. In addition, government authorities in many markets have implemented no growth or growth control initiatives.
New housing developments may also be subject to various assessments for schools, parks, streets and other public improvements. In addition, government authorities in many markets have implemented no growth or growth control initiatives. Any of these may limit, delay or increase the costs of acquisition of land for residential use and development or home construction.
During the past three years, the economy has experienced significant inflationary pressures. Inflation can adversely affect us by increasing costs of land, materials, labor and our cost of capital. In addition, significant inflation is often accompanied by higher interest rates, which have a negative impact on housing affordability.
During the past three years, the economy has experienced significant inflationary pressures. Inflation can adversely affect us by increasing costs of land, materials, labor and our cost of capital. In an effort to lower the current rate of inflation, the Federal Reserve has raised interest rates significantly, which has resulted in higher mortgage interest rates.
If the subcontractors who develop our residential lots fail to comply with all applicable laws, we can suffer reputational damage and may be exposed to possible liability. We are also subject to an extensive number of laws and regulations because our common stock is publicly traded in the capital markets.
If the subcontractors who develop our residential lots fail to comply with all applicable laws, we can suffer reputational damage and may be exposed to liability.
The subcontractors we rely on to perform the actual development of our residential lots are also subject to a significant number of local, state and federal laws and regulations, including laws involving matters that are not within our control.
If we are unable to adequately address such sustainability matters or fail to comply with all laws, regulations, policies and related interpretations, it could negatively impact our reputation and our business results. 17 Table of Contents The subcontractors we rely on to perform the actual development of our residential lots are also subject to a significant number of local, state and federal laws and regulations, including laws involving matters that are not within our control.
We had an effective shelf registration statement filed with the SEC in October 2021, registering $750 million of equity securities, of which $300 million was reserved for sales under our at-the-market equity offering program.
We have an effective shelf registration statement, filed with the SEC in September 2024, registering $750 million of equity securities, of which $300 million is reserved for sales under the at-the-market equity offering program that we entered into in November 2024. In fiscal 2025, we did not issue any shares under its at-the-market equity offering program.
The European Union and other international regulators, as well as state governments, have enacted or enhanced data privacy regulations, such as the California Privacy Rights Act, and other governments are considering establishing similar or stronger protections. These regulations impose certain obligations for handling specified personal information in our systems, including notifying individuals regarding information we have collected from them.
The European Union and other international regulators, as well as state governments, have enacted or enhanced privacy, data protection, and artificial intelligence regulations, such as the California Privacy Rights Act and the Colorado Privacy Act, and other governments are considering establishing similar or stronger protections.
We are subject to extensive and complex regulations that affect land acquisition, development and home construction, including zoning, density restrictions and building standards. These regulations often provide broad discretion to the administering governmental authorities as to the conditions we must meet prior to acquisition or development being approved, if approved at all.
These regulations often provide broad discretion to the administering governmental authorities as to the conditions we must meet prior to acquisition or development being approved, if approved at all. We are subject to determinations by these authorities as to the adequacy of water or sewage facilities, roads or other local services.
We plan to raise additional capital in the future, and such capital may not be available when needed or at all. We have a $410 million senior unsecured revolving credit facility with an uncommitted accordion feature that could increase the size of the facility to $600 million, subject to certain conditions and availability of additional bank commitments.
As of September 30, 2025, we had a $640 million senior unsecured revolving credit facility with an uncommitted accordion feature that could increase the size of the facility to $1 billion, subject to certain conditions and availability of additional bank commitments.
At the time of filing the new registration statement, $728.1 million of equity securities remained available for issuance under our prior registration statement, which has since expired. Our at-the-market program expired in October 2024, and we anticipate entering into a new at-the-market equity offering program under our September 2024 shelf registration statement.
At September 30, 2025, the full $750 million remained available for issuance under our shelf registration statement, with $300 million reserved for sales under the at-the-market equity offering program.
Removed
In response to increased inflation, the Federal Reserve has raised interest rates significantly in recent years, which, notwithstanding the recent reduction, has resulted in higher mortgage interest rates.
Added
In response to rising inflation, the Federal Reserve raised interest rates significantly in 2022 and 2023, which led to an increase in mortgage interest rates. While interest rates have since been lowered and may be lowered further, mortgage interest rates have remained elevated since 2022.
Removed
In an effort to lower the current rate of inflation, the Federal Reserve has raised interest rates significantly, which has resulted in higher mortgage interest rates.
Added
The increase in mortgage interest rates has reduced the affordability of homes and thus affected the demand for finished lots, requiring us to use pricing adjustments and incentives to adapt to current market conditions.
Removed
A health and safety incident relating to our operations could be costly in terms of potential liability and reputational damage. Land development sites are inherently dangerous, and operating in this industry poses certain inherent health and safety risks.
Added
In addition, newly imposed or increased tariffs, duties and/or trade restrictions, such as those imposed or increased by the current administration, on imported materials and goods that are used in connection with the construction and delivery of homes, including steel, aluminum and lumber, may raise homebuilders' costs for these items or for the products made with them.
Removed
Additionally, actual or perceived environmental, social, governance ("ESG") and other sustainability matters and our response to these matters could harm our business.
Added
These factors may cause construction delays or increase costs for homebuilders, which could reduce the pace of home construction and demand for finished lots. 14 Table of Contents Public health issues such as a major epidemic or pandemic could adversely affect our business and financial results.
Removed
If we are unable to adequately address such ESG matters or fail to comply with all laws, regulations, policies and related interpretations, it could negatively impact our reputation and our business results.
Added
Lawsuits, claims and proceedings have been and may in the future be instituted or asserted against us. Some of these claims may result in significant defense costs and potentially significant judgments against us, some of which are not, or cannot be, insured against.
Removed
The revolving credit facility is guaranteed by our wholly-owned subsidiaries that are not immaterial subsidiaries and have not been designated as unrestricted subsidiaries.
Added
We intend to defend ourselves vigorously in any litigation that has been or may be instituted against us; however, litigation is inherently uncertain, and we cannot be certain of the ultimate outcomes of any claims that have arisen or may arise.
Removed
In fiscal 2024, we issued 546,174 shares of common stock under our at-the-market equity offering program for proceeds of $19.7 million, net of commissions and other issuance costs totaling $0.4 million. In September 2024, we filed a new shelf registration statement, which became effective in October 2024, registering $750 million of equity securities.
Added
Resolution of these types of matters against us may materially affect our ability to conduct our business in the manner that we expect or otherwise adversely affect us. Litigation, claims or proceedings could also generate negative publicity that could be detrimental to our reputation.
Added
Governmental regulations and environmental matters could increase the cost and limit the availability of property suitable for residential lot development and could adversely affect our business and financial results. We are subject to extensive and complex regulations that affect land acquisition, development and home construction, including zoning, density restrictions and building standards.
Added
Changes in income tax and securities laws could adversely affect our business and financial results We are subject to income taxes at the federal, state and local levels, and any changes in tax legislation could adversely affect our future effective tax rates and the value of our deferred tax assets.
Added
We are also subject to an extensive number of laws and regulations because our common stock is publicly traded in the capital markets.
Added
We plan to raise additional capital in the future, and such capital may not be available when needed or at all.
Added
The facility includes bank commitments of $575 million maturing on December 18, 2029 and $65 million maturing on October 28, 2026.
Added
On October 30, 2025, we exercised the accordion feature under our credit facility and increased the total commitments by $25 million, resulting in total commitments of $665 million, of which $600 million matures on December 18, 2029 and $65 million matures on October 28, 2026.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeHorton CIO and CSRO work closely with our legal team to oversee compliance with legal, regulatory and contractual security requirements. D.R. Horton's CIO has more than 35 years of experience working in information technology including roles in the commercial software development, healthcare, industrial and professional services sectors. While in those roles, the D.R.
Biggest changeHorton CIO and CSRO work closely with our legal team to oversee compliance with legal, regulatory and contractual security requirements. D.R. Horton's CIO has 36 years of experience working in information technology including roles in the commercial software development, healthcare, industrial and professional services sectors. While in those roles, the D.R.
Horton CIO has led governance, risk, and compliance technology programs and information security programs. The D.R. Horton CIO currently reports to the D.R. Horton CFO. D.R. Horton's CSRO has more than 23 years of experience working in information technology and cyber security roles including software development, identity and access management projects, privilege account management and multifactor authentication implementations.
Horton CIO has led governance, risk, and compliance technology programs and information security programs. The D.R. Horton CIO currently reports to the D.R. Horton CFO. D.R. Horton's CSRO has 24 years of experience working in information technology and cyber security roles including software development, identity and access management projects, privilege account management and multifactor authentication implementations.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

0 edited+4 added−0 removed7 unchanged
Added
On April 29, 2025, a verified stockholder of the Company filed a derivative complaint in the Delaware Court of Chancery, on behalf of the Company, against D.R. Horton, Inc., the Company’s Executive Chairman, and certain of the Company’s directors. The complaint, which is captioned Mississippi Public Employees’ Retirement System v. D.R. Horton, Inc., C.A.
Added
No. 2025-0465-MTZ, asserts claims for breach of fiduciary duty arising out of lot sale transactions between the Company and D.R. Horton. The complaint seeks judgment awarding the Company damages against the defendants and awarding the plaintiff the costs and disbursements of the action, including reasonable attorneys’ and experts’ fees. The Company disputes the allegations of wrongdoing in this matter.
Added
Nevertheless, the outcome of this lawsuit is uncertain and cannot be predicted with any certainty.
Added
Accordingly, at this time, the Company is not able to estimate a possible loss or range of loss that may result from this lawsuit or to determine whether such loss, if any, would have a material adverse effect on its business, financial condition, results of operations or liquidity.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+2 added−2 removed2 unchanged
Biggest changeSeptember 30, Stock Performance Data: 2019 2020 2021 2022 2023 2024 Forestar Group Inc. $ 100.00 $ 96.83 $ 101.91 $ 61.21 $ 147.37 $ 177.08 Russell 2000 100.00 100.39 148.26 113.42 123.54 156.60 New Peer Group 100.00 88.76 119.55 72.16 113.63 152.60 Former Peer Group 100.00 93.61 123.85 84.92 130.32 156.90 This performance graph shall not be deemed to be incorporated by reference into our SEC filings and should not constitute soliciting material or otherwise be considered filed under the Securities Act of 1933, as amended (Securities Act) or the Exchange Act.
Biggest changeStock Performance Data: 2020 2021 2022 2023 2024 2025 Forestar Group Inc. $ 100.00 $ 105.25 $ 63.22 $ 152.20 $ 182.88 $ 150.23 Russell 2000 100.00 147.68 112.98 123.06 156.00 172.78 Peer Group 100.00 128.12 74.19 114.68 160.13 118.67 This performance graph shall not be deemed to be incorporated by reference into our SEC filings and should not constitute soliciting material or otherwise be considered filed under the Securities Act of 1933, as amended (Securities Act) or the Exchange Act.
The declaration and payment of any future dividends will be at the discretion of our Board of Directors after taking into account various factors, including without limitation, our financial condition, earnings, capital requirements of our business, the terms of any credit agreements or indentures to which we may be a party at the time, legal requirements, industry practice and other factors that our Board of Directors deems relevant. 26 Table of Contents Stock Performance Graph The following graph illustrates the cumulative total stockholder return of an initial investment of $100 on September 30, 2019 in Forestar common stock for the period from September 30, 2019 through September 30, 2024 compared to the same investment in the Russell 2000 Index and our peer group.
The declaration and payment of any future dividends will be at the discretion of our Board of Directors after taking into account various factors, including without limitation, our financial condition, earnings, capital requirements of our business, the terms of any credit agreements or indentures to which we may be a party at the time, legal requirements, industry practice and other factors that our Board of Directors deems relevant. 26 Table of Contents Stock Performance Graph The following graph illustrates the cumulative total stockholder return of an initial investment of $100 on September 30, 2020 in Forestar common stock for the period from September 30, 2020 through September 30, 2025 compared to the same investment in the Russell 2000 Index and our peer group.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock is traded on the NYSE under the trading symbol "FOR." As of November 14, 2024, the closing price of our common stock on the NYSE was $29.61, an d there were approximately 830 holders of record.
Market Information Our common stock is traded on the NYSE and the NYSE Texas under the trading symbol "FOR." As of November 14, 2025, the closing price of our common stock on the NYSE and NYSE Texas was $24.42, an d there were approximately 718 holders of record.
The graph and related disclosure in no way reflect our forecast of future financial performance.
The graph and related disclosure in no way reflect our forecast of future financial performance. The peer group for the current year is unchanged from the prior year, except The St.
During the fiscal year ended September 30, 2024, we revised our peer group to consist of American Woodmark Corporation; Beazer Homes USA, Inc.; Century Communities, Inc.; Five Point Holdings, LLC; Howard Hughes Holdings Inc.; JELD-WEN Holding, Inc.; LGI Homes, Inc.; M/I Homes, Inc.; MasterBrand, Inc. and The St. Joe Company.
The companies included in our peer group consist of American Woodmark Corporation; Beazer Homes USA, Inc.; Century Communities, Inc.; Five Point Holdings, LLC; Howard Hughes Holdings Inc.; JELD-WEN Holding, Inc.; LGI Homes, Inc.; M/I Homes, Inc.; and MasterBrand, Inc. The peer group is reviewed annually to ensure continued relevance for performance comparison.
Removed
We revised our peer group as three of our former peers were acquired during the fiscal year ended September 30, 2024 (M.D.C. Holdings, Inc.; Masonite International Corporation; and PGT Innovations). The companies comprising our peer group as of September 30, 2024 were selected based on their industries, similar market capitalization and business model.
Added
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Removed
Our former peer group consisted of the following companies: M.D.C. Holdings, Inc.; Tri Pointe Homes, Inc.; Century Communities, Inc.; Beazer Homes USA, Inc.; Five Point Holdings, LLC (Class A); The Howard Hughes Corporation; The St. Joe Company; Masonite International Corporation; and PGT Innovations, Inc.
Added
Joe Company was excluded in fiscal 2025 solely because a significant portion of its business is now unrelated to the residential development industry and is primarily focused on hospitality and leasing. This change was made to ensure the peer group remains representative of companies with similar industry focus, market capitalization, and business models.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

58 edited+20 added−9 removed38 unchanged
Biggest changeOperating Results Components of income before income taxes were as follows: Year Ended September 30, 2024 2023 (In millions) Revenues $ 1,509.4 $ 1,436.9 Cost of sales 1,150.1 1,132.8 Selling, general and administrative expense 118.5 97.7 Gain on sale of assets (9.5) (1.6) Interest and other income (19.8) (13.6) Income before income taxes $ 270.1 $ 221.6 Lot Sales Residential lots sold consisted of: Year Ended September 30, 2024 2023 Development projects 14,769 14,040 Lot banking projects 299 — 15,068 14,040 Average sales price per lot (a) $ 96,600 $ 90,900 _______________ (a) Excludes any impact from change in contract liabilities. 29 Table of Contents Revenues Revenues consisted of: Year Ended September 30, 2024 2023 (In millions) Residential lot sales: Development projects $ 1,418.5 $ 1,275.7 Lot banking projects 37.9 — Decrease in contract liabilities 2.9 — 1,459.3 1,275.7 Deferred development projects 8.1 29.0 1,467.4 1,304.7 Tract sales and other 42.0 132.2 Total revenues $ 1,509.4 $ 1,436.9 Residential lots sold and residential lot sales revenues in fiscal 2024 increased compared to the prior year period primarily due to improved demand for finished lots as homebuilders increased their pace of new home starts to better match the stronger demand for new homes, particularly at affordable price points.
Biggest changeOperating Results Components of income before income taxes were as follows: Year Ended September 30, 2025 2024 (In millions) Revenues $ 1,662.4 $ 1,509.4 Cost of sales 1,298.9 1,150.1 Selling, general and administrative expense 154.4 118.5 Equity in earnings of unconsolidated ventures (0.6) — Gain on sale of assets (4.5) (9.5) Interest and other income (6.3) (19.8) Loss on extinguishment of debt 1.2 — Income before income taxes $ 219.3 $ 270.1 Lot Sales Residential lots sold consisted of: Year Ended September 30, 2025 2024 Development projects 13,892 14,769 Lot banking projects 348 299 14,240 15,068 Average sales price per lot (a) $ 108,400 $ 96,600 _______________ (a) Excludes any impact from change in contract liabilities. 29 Table of Contents Revenues Revenues consisted of: Year Ended September 30, 2025 2024 (In millions) Residential lot sales: Development projects $ 1,499.8 $ 1,418.5 Lot banking projects 43.4 37.9 Decrease in contract liabilities 1.1 2.9 1,544.3 1,459.3 Deferred development projects — 8.1 1,544.3 1,467.4 Tract sales and other 118.1 42.0 Total revenues $ 1,662.4 $ 1,509.4 Residential lot sales to D.R.
Operating Cash Flow Activities In fiscal 2024, net cash used in operating activities was $158.4 million, which was primarily the result of the increase in real estate, partially offset by net income generated in the period and the increases in earnest money on sales contracts, accrued development costs and accounts payable and other accrued liabilities.
In fiscal 2024, net cash used in operating activities was $158.4 million, which was primarily the result of the increase in real estate, partially offset by net income generated in the period and the increases in earnest money on sales contracts, accrued development costs and accounts payable and other accrued liabilities.
While the disruptions in the supply chain for certain construction materials and tightness in the labor market have largely subsided, delays in receiving the necessary approvals from municipalities are still extending development cycle times, and development costs remain elevated.
While the disruptions in the supply chain for certain construction materials and tightness in the labor market have largely subsided, delays in receiving the necessary approvals from municipalities are still extending development cycle times in certain markets, and development costs remain elevated.
We plan to remain disciplined when investing in land opportunities and to remain focused on managing our lot sales pace and lot pricing at each community to optimize the return on our investments. 28 Table of Contents Results of Operations The following tables and related discussion set forth key operating and financial data as of and for the fiscal years ended September 30, 2024 and 2023.
We plan to remain disciplined when investing in land opportunities and to remain focused on managing our lot sales pace and lot pricing at each community to optimize the return on our investments. 28 Table of Contents Results of Operations The following tables and related discussion set forth key operating and financial data as of and for the fiscal years ended September 30, 2025 and 2024.
A failure to comply with these financial covenants could allow the lending banks to terminate the availability of funds under the revolving credit facility or cause any outstanding borrowings to become due and payable prior to maturity. At September 30, 2024, we were in compliance with all of the covenants, limitations and restrictions of our revolving credit facility.
A failure to comply with these financial covenants could allow the lending banks to terminate the availability of funds under the revolving credit facility or cause any outstanding borrowings to become due and payable prior to maturity. At September 30, 2025, we were in compliance with all of the covenants, limitations and restrictions of our revolving credit facility.
MD&A is provided as a supplement to, and should be read in conjunction with our consolidated financial statements and notes to those statements that appear elsewhere in this Form 10-K. This section generally discusses the results of operations for fiscal 2024 compared to 2023.
MD&A is provided as a supplement to, and should be read in conjunction with our consolidated financial statements and notes to those statements that appear elsewhere in this Form 10-K. This section generally discusses the results of operations for fiscal 2025 compared to 2024.
If we or our restricted subsidiaries dispose of assets, under certain circumstances, we will be required to either invest the net cash proceeds from such asset sales in our business within a specified period of time, repay certain senior secured debt or debt of our non-guarantor subsidiaries, or make an offer to purchase a principal amount of such notes equal to the excess net cash proceeds at a purchase price of 100% of their principal amount.
Under the indenture governing the 2028 notes, if we or our restricted subsidiaries dispose of assets, under certain circumstances, we will be required to either invest the net cash proceeds from such asset sales in our business within a specified period of time, repay certain senior secured debt or debt of our non-guarantor subsidiaries, or make an offer to purchase a principal amount of such notes equal to the excess net cash proceeds at a purchase price of 100% of their principal amount.
Critical Accounting Policies and Estimates General — A comprehensive enumeration of the significant accounting policies of Forestar Group Inc. and subsidiaries is presented in Note 1 to the accompanying financial statements as of September 30, 2024 and 2023, and for the years ended September 30, 2024, 2023 and 2022.
Critical Accounting Policies and Estimates General — A comprehensive enumeration of the significant accounting policies of Forestar Group Inc. and subsidiaries is presented in Note 1 to the accompanying financial statements as of September 30, 2025 and 2024, and for the years ended September 30, 2025, 2024 and 2023.
Horton on our ability to maintain relationships with our customers; • the cyclical nature of the homebuilding and lot development industries and changes in economic, real estate and other conditions; • the impact of significant inflation, higher interest rates or deflation; • supply shortages and other risks of acquiring land, construction materials and skilled labor; • the effects of public health issues such as a major epidemic or pandemic on the economy and our business; • the impacts of weather conditions and natural disasters; • health and safety incidents relating to our operations; • 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; • the strength of our information technology systems and the risk of cybersecurity breaches and our ability to satisfy privacy and data protection laws and regulations; • the impact of governmental policies, laws or regulations and actions or restrictions of regulatory agencies; • our ability to achieve our strategic initiatives; • continuing liabilities related to assets that have been sold; • the cost and availability of property suitable for residential lot development; • general economic, market or business conditions where our real estate activities are concentrated; • our dependence on relationships with national, regional and local homebuilders; • competitive conditions in our industry; • obtaining reimbursements and other payments from governmental districts and other agencies and timing of such payments; • our ability to succeed in new markets; • the conditions of the capital markets and our ability to raise capital to fund expected growth; • our ability to manage and service our debt and comply with our debt covenants, restrictions and limitations; • the volatility of the market price and trading volume of our common stock; and • our ability to hire and retain key personnel.
Horton on our ability to maintain relationships with our customers; • the cyclical nature of the homebuilding and lot development industries and changes in economic, real estate and other conditions; • the impact of significant inflation, higher interest rates or deflation; • supply shortages and other risks of acquiring land, construction materials and skilled labor; • the effects of public health issues such as a major epidemic or pandemic on the economy and our business; • the impacts of weather conditions and natural disasters; • health and safety incidents relating to our operations; • 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; • the effects of information technology failures, cybersecurity incidents, and the failure to satisfy privacy and data protection laws and regulations; • the impact of governmental policies, laws or regulations and actions or restrictions of regulatory agencies; • the effects of changes in income tax and securities laws; • our ability to achieve our strategic initiatives; • continuing liabilities related to assets that have been sold; • the cost and availability of property suitable for residential lot development; • general economic, market or business conditions where our real estate activities are concentrated; • our dependence on relationships with national, regional and local homebuilders; • competitive conditions in our industry; • obtaining reimbursements and other payments from governmental districts and other agencies and timing of such payments; • our ability to succeed in new markets; • the conditions of the capital markets and our ability to raise capital to fund expected growth; • our ability to manage and service our debt and comply with our debt covenants, restrictions and limitations; • the volatility of the market price and trading volume of our common stock; and • our ability to hire and retain key personnel.
We have reviewed our accounting estimates, and none were deemed to be considered critical for the accounting periods presented. Revenue Recognition — Real estate revenue and related profit are generally recognized at the time of the closing of a sale, when title to and possession of the property are transferred to the buyer.
We have reviewed our accounting estimates, and none were deemed to be considered critical for the accounting periods presented. 34 Table of Contents Revenue Recognition — Real estate revenue and related profit are generally recognized at the time of the closing of a sale, when title to and possession of the property are transferred to the buyer.
The gain on sale of assets in fiscal 2024 is the result of $9.5 million of excess hotel occupancy and sales and use tax revenues collected from the Cibolo Canyons Special Improvement District. Interest and other income primarily represents interest earned on our cash deposits.
The gain on sale of assets in fiscal 2025 and 2024 is the result of $4.5 million and $9.5 million, respectively, of excess hotel occupancy and sales and use tax revenues collected from the Cibolo Canyons Special Improvement District. Interest and other income primarily represents interest earned on our cash deposits.
Generally, our unsatisfied remaining performance obligations are expected to have an original duration of less than one year. 34 Table of Contents Real Estate and Cost of Sales — Real estate includes the costs of direct land and lot acquisition, land development, capitalized interest, and direct overhead costs incurred during land development.
Generally, our remaining unsatisfied performance obligations are expected to have an original duration of less than one year. Real Estate and Cost of Sales — Real estate includes the costs of direct land and lot acquisition, land development, capitalized interest, and direct overhead costs incurred during land development.
The indentures contain covenants that, among other things, restrict the ability of us and our 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 our assets; enter into transactions with affiliates; and allow to exist certain restrictions on the ability of subsidiaries to pay dividends or make other payments.
The indenture governing the 2028 notes contain covenants that, among other things, restrict the ability of us and our 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 our assets; enter into transactions with affiliates; and allow to exist certain restrictions on the ability of subsidiaries to pay dividends or make other payments.
The real estate segment primarily acquires land and installs infrastructure for single-family residential communities and generates revenues from sales of residential single-family finished lots to local, regional and national homebuilders. We have other business activities for which the related assets and operating results are immaterial and therefore are included within our real estate segment.
The real estate segment primarily acquires land and installs infrastructure for single-family residential communities, and its revenues generally come from sales of residential single-family finished lots to local, regional and national homebuilders. We have other business activities for which the related assets and operating results are immaterial and therefore are included within our real estate segment.
For similar operating and financial data and discussion of our fiscal 2023 results compared to our fiscal 2022 results, refer to Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations" under Part II of our annual report on Form 10-K for the fiscal year ended September 30, 2023, which was filed with the SEC on November 17, 2023.
For similar operating and financial data and discussion of our fiscal 2024 results compared to our fiscal 2023 results, refer to Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations" under Part II of our annual report on Form 10-K for the fiscal year ended September 30, 2024, which was filed with the SEC on November 19, 2024.
We believe we are well-positioned to operate effectively during changing economic conditions because of our low net leverage and strong liquidity position, our low overhead model and our strategic relationship with D.R. Horton. At September 30, 2024, our ratio of debt to total capital (debt divided by stockholders’ equity plus debt) was 30.7% compared to 33.7% at September 30, 2023.
We believe we are well-positioned to operate effectively during changing economic conditions because of our low net leverage and strong liquidity position, our low overhead model and our strategic relationship with D.R. Horton. At September 30, 2025, our ratio of debt to total capital (debt divided by stockholders’ equity plus debt) was 31.2% compared to 30.7% at September 30, 2024.
We believe we are well-positioned to consolidate market share in the highly fragmented lot development industry because of our low net leverage and strong liquidity position, low overhead model, geographically diverse lot portfolio that is focused on affordable price points and strategic relationship with D.R. Horton.
We believe we are well-positioned to consolidate market share in the highly fragmented lot development industry because of our national footprint and strong local teams, our low net leverage and strong liquidity position, lower overhead model, geographically diverse lot portfolio that is focused on affordable price points and strategic relationship with D.R. Horton.
Factors that could cause or contribute to any differences include, but are not limited to, those discussed under the caption "Forward-Looking Statements" and under Item 1A —"Risk Factors." Our Operations We are a residential lot development company with operations in 59 markets in 24 states as of September 30, 2024. In October 2017, we became a majority-owned subsidiary of D.R.
Factors that could cause or contribute to any differences include, but are not limited to, those discussed under the caption "Forward-Looking Statements" and under Item 1A —"Risk Factors." Our Operations We are a residential lot development company with operations in 64 markets in 23 states as of September 30, 2025. In October 2017, we became a majority-owned subsidiary of D.R.
Cost of sales related to tract sales and other revenues in fiscal 2024 and 2023 was $17.4 million and $95.1 million, respectively. Each quarter, we review the performance and outlook for all of our real estate for indicators of potential impairment and perform detailed impairment evaluations and analyses when necessary.
Cost of sales related to tract sales and other revenues in fiscal 2025 and 2024 was $72.4 million and $17.4 million, respectively. Each quarter, we review the performance and outlook for all of our real estate for indicators of potential impairment and perform detailed impairment evaluations and analyses when necessary.
At September 30, 2024, we had deferred tax liabilities, net of deferred tax assets, of $66.7 million. The deferred tax assets were partially offset by a valuation allowance of $0.8 million, resulting in a net deferred tax liability of $67.5 million. At September 30, 2023, deferred tax liabilities, net of deferred tax assets, were $49.8 million.
At September 30, 2024, deferred tax liabilities, net of deferred tax assets, were $66.7 million. The deferred tax assets were partially offset by a valuation allowance of $0.8 million, resulting in a net deferred tax liability of $67.5 million.
Interest charged to cost of sales in fiscal 2024 was 2.5% of total cost of sales (excluding impairments and land option charges) compared to 2.4% of total cost of sales in fiscal 2023. Selling, General and Administrative (SG&A) Expense and Other Income Statement Items SG&A expense in fiscal 2024 was $118.5 million compared to $97.7 million in fiscal 2023.
Interest charged to cost of sales in fiscal 2025 was 2.4% of total cost of sales (excluding impairments and land option charges) compared to 2.5% of total cost of sales in fiscal 2024. Selling, General and Administrative (SG&A) Expense and Other Income Statement Items SG&A expense in fiscal 2025 was $154.4 million compared to $118.5 million in fiscal 2024.
Our ratio of net debt to total capital (debt net of unrestricted cash divided by stockholders’ equity plus debt net of unrestricted cash) was 12.4% compared to 5.5% at September 30, 2023. Over the long term, we intend to maintain our ratio of net debt to total capital at approximately 40% or less.
Our ratio of net debt to total capital (debt net of unrestricted cash divided by stockholders’ equity plus debt net of unrestricted cash) was 19.3% compared to 12.4% at September 30, 2024. Over the long term, we intend to maintain our ratio of net debt to total capital at approximately 40% or less.
The indentures governing our senior notes require that, upon the occurrence of both a change of control and a rating decline (as defined in each indenture), we offer to purchase the applicable series of notes at 101% of their principal amount.
The indentures governing the senior notes require that, upon the occurrence of both a change of control and a rating decline (as defined in each indenture), we offer to purchase the applicable series of notes at 101% of their principal amount, plus accrued and unpaid interest.
Investing Cash Flow Activities In fiscal 2024, net cash provided by investing activities was $7.3 million compared to $0.3 million in fiscal 2023. Cash provided by investing activities in fiscal 2024 included $9.5 million of excess hotel occupancy and sales and use tax revenues collected from the Cibolo Canyons Special Improvement District.
Investing Cash Flow Activities In fiscal 2025, net cash provided by investing activities was $3.2 million compared to $7.3 million in fiscal 2024. Cash provided by investing activities in fiscal 2025 and 2024 included $4.5 million and $9.5 million, respectively, of excess hotel occupancy and sales and use tax revenues collected from the Cibolo Canyons Special Improvement District.
At September 30, 2024, we were in compliance with all of the limitations and restrictions associated with our senior note obligations. Effective April 30, 2020, our Board of Directors authorized the repurchase of up to $30 million of our debt securities. The authorization has no expiration date. All of the $30 million authorization was remaining at September 30, 2024.
At September 30, 2025, we were in compliance with all of the limitations and restrictions associated with our senior note obligations. 33 Table of Contents Effective April 30, 2020, our Board of Directors authorized the repurchase of up to $30 million of our debt securities. The authorization has no expiration date.
At September 30, 2024, there were no borrowings outstanding and $32.8 million of letters of credit issued under the revolving credit facility, resulting in available capacity of $377.2 million. 32 Table of Contents The revolving credit facility is guaranteed by our wholly-owned subsidiaries that are not immaterial subsidiaries and have not been designated as unrestricted subsidiaries.
At September 30, 2025, there were no outstanding borrowings and $51.1 million of letters of credit issued under the revolving credit facility, resulting in available capacity of $588.9 million. 32 Table of Contents The revolving credit facility is guaranteed by our wholly-owned subsidiaries that are not immaterial subsidiaries and have not been designated as unrestricted subsidiaries.
SG&A expense as a percentage of revenues was 7.9% and 6.8% in fiscal 2024 and 2023, respectively. Our SG&A expense primarily consisted of employee compensation and related costs. Our business operations employed 393 and 303 employees at September 30, 2024 and 2023, respectively.
SG&A expense as a percentage of revenues was 9.3% and 7.9% in fiscal 2025 and 2024, respectively. Our SG&A expense primarily consisted of employee compensation and related costs. Our business operations employed 433 and 393 employees at September 30, 2025 and 2024, respectively.
We will continue to evaluate both the positive and negative evidence in determining the need for a valuation allowance on our deferred tax assets. Any reversal of the valuation allowance in future periods will impact our effective tax rate.
We will continue to evaluate both the positive and negative evidence in determining the need for a valuation allowance on our deferred tax assets. Any reversal of the valuation allowance in future periods will impact our effective tax rate. We had no unrecognized tax benefits at September 30, 2025 and 2024.
Horton based on executed purchase and sale agreements 17,200 17,000 Owned lots fully developed 6,300 6,400 Liquidity and Capital Resources Liquidity At September 30, 2024, we had $481.2 million of cash and cash equivalents and $377.2 million of available borrowing capacity on our revolving credit facility. We have no senior note maturities until fiscal 2026.
Horton based on executed purchase and sale agreements 17,600 17,200 Owned lots fully developed 8,900 6,300 Liquidity and Capital Resources Liquidity At September 30, 2025, we had $379.2 million of cash and cash equivalents and $588.9 million of available borrowing capacity on our revolving credit facility. We have no senior note maturities until fiscal 2028.
Financing Cash Flow Activities In fiscal 2024, net cash provided by financing activities was $16.3 million compared to $13.2 million of cash used in financing activities in fiscal 2023. The cash provided by financing activities in fiscal 2024 primarily consisted of the issuance of common stock under our at-the-market equity offering program for net proceeds of $19.7 million.
The cash provided by financing activities in fiscal 2024 primarily consisted of the issuance of common stock under our at-the-market equity offering program for net proceeds of $19.7 million.
Horton 20,500 14,400 Owned lots under contract to customers other than D.R. Horton 500 600 Total owned lots under contract 21,000 15,000 Owned lots subject to right of first offer with D.R.
Horton 22,800 20,500 Owned lots under contract to customers other than D.R. Horton 1,000 500 Total owned lots under contract 23,800 21,000 Owned lots subject to right of first offer with D.R.
In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures,” which requires disclosure of certain costs and expenses on an interim and annual basis in the notes to the financial statements.
We are currently evaluating the impact of this standard on our consolidated financial statements and related disclosures. In November 2024, the FASB issued ASU 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures," which requires disclosure of certain costs and expenses on an interim and annual basis in the notes to the financial statements.
Although our quarterly assessments reflect management’s best estimates, due to uncertainties in the estimation process, actual results could differ from such estimates. 35 Table of Contents Pending Accounting Standards In November 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-07, “Segment Reporting - Improvements to Reportable Segment Disclosures,” which is intended to improve reportable segment disclosures.
Although our quarterly assessments reflect management’s best estimates, due to uncertainties in the estimation process, actual results could differ from such estimates. Recently Adopted Accounting Standards In November 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-07, "Segment Reporting - Improvements to Reportable Segment Disclosures," to improve reportable segment disclosure requirements.
Residential lot sales to D.R. Horton and customers other than D.R. Horton consisted of: Year Ended September 30, 2024 2023 Residential lots sold to D.R. Horton 13,267 12,249 Residential lots sold to customers other than D.R. Horton 1,801 1,791 15,068 14,040 Residential lot revenues from lot sales to D.R. Horton and customers other than D.R.
Horton and customers other than D.R. Horton consisted of: Year Ended September 30, 2025 2024 Residential lots sold to D.R. Horton 11,751 13,267 Residential lots sold to customers other than D.R. Horton 2,489 1,801 14,240 15,068 Residential lot revenues from lot sales to D.R. Horton and customers other than D.R.
Bank Credit Facility We have a $410 million senior unsecured revolving credit facility with an uncommitted accordion feature that could increase the size of the facility to $600 million, subject to certain conditions and availability of additional bank commitments.
Bank Credit Facility As of September 30, 2025, we had a $640 million senior unsecured revolving credit facility with an uncommitted accordion feature that could increase the size of the facility to $1 billion, subject to certain conditions and availability of additional bank commitments.
Horton in fiscal 2024 included 12 tract acres sold for $5.1 million to a third party who expects to sell the tract to D.R Horton at a later date. Tract sales and other revenue in fiscal 2023 primarily consisted of 820 tract acres sold to D.R. Horton for $114.1 million and 68 tract acres sold to customers other than D.R.
Tract sales and other revenue sold to customers other than D.R. Horton in fiscal 2025 included 42 tract acres sold for $5.3 million to a third party who expects to sell finished lots to D.R Horton at a later date. Tract sales and other revenue in fiscal 2024 primarily consisted of 32 tract acres sold to D.R.
Horton, before deferred development projects and changes in contract liabilities, consisted of: Year Ended September 30, 2024 2023 (In millions) Revenues from lot sales to D.R. Horton $ 1,271.4 $ 1,094.7 Revenues from lot sales to customers other than D.R. Horton 185.0 181.0 $ 1,456.4 $ 1,275.7 Lots sold to customers other than D.R.
Horton, before deferred development projects and changes in contract liabilities, consisted of: Year Ended September 30, 2025 2024 (In millions) Revenues from lot sales to D.R. Horton $ 1,277.6 $ 1,271.4 Revenues from lot sales to customers other than D.R.
As a result of this process, no impairment charges were recorded during fiscal 2024. During fiscal 2023 we recorded non-cash impairment charges of $19.4 million. During fiscal 2024, and 2023, land purchase contract deposit and pre-acquisition cost write-offs related to land purchase contracts that we have terminated or expect to terminate were $4.1 million and $4.6 million.
As a result of this process, no impairment charges were recorded during fiscal 2025 and 2024. During fiscal 2025 and 2024, land purchase contract deposit and pre-acquisition cost write-offs related to land purchase contracts that we have terminated or expect to terminate were $7.2 million and $4.1 million. We capitalize interest costs throughout the development period (active real estate).
We capitalize interest costs throughout the development period (active real estate). Capitalized interest is charged to cost of sales as the related real estate is sold to the buyer. Interest incurred was $32.6 million and $32.8 million in fiscal 2024 and 2023.
Capitalized interest is charged to cost of sales as the related real estate is sold to the buyer. Interest incurred was $45.5 million and $32.6 million in fiscal 2025 and 2024.
Letters of credit issued under the facility reduce the available borrowing capacity. The maturity date of the facility is October 28, 2026.
Letters of credit issued under the facility reduce the available borrowing capacity.
Horton for $12.8 million. 30 Table of Contents Cost of Sales, Real Estate Impairment and Land Option Charges and Interest Incurred Cost of sales in fiscal 2024 increased compared to fiscal 2023 primarily due to the increase in the number of lots sold.
Horton for $15.2 million and 64 tract acres sold to customers other than D.R. Horton for $11.8 million. 30 Table of Contents Cost of Sales, Real Estate Impairment and Land Option Charges and Interest Incurred Cost of sales in fiscal 2025 increased compared to fiscal 2024 primarily due to the increase in revenues.
Income Taxes Our income tax expense was $66.7 million and $54.7 million in fiscal 2024 and 2023, respectively, and our effective tax rate was 24.7% for both years. Our effective tax rate for both years includes an expense for state income taxes and nondeductible expenses.
Income Taxes Our income tax expense was $51.4 million and $66.7 million in fiscal 2025 and 2024, respectively, and our effective tax rate was 23.4% and 24.7% for 2025 and 2024, respectively. Our effective tax rate for both years includes an expense for state income taxes and non-deductible expenses and a benefit for stock-based compensation.
New factors emerge from time to time and it is not possible for us to predict all such factors, nor can we assess the impact of any such factor on our business or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement.
New factors emerge from time to time and it is not possible for us to predict all such factors, nor can we assess the impact of any such factor on our business or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement. 37 Table of Contents Any forward-looking statement speaks only as of the date on which such statement is made, and, except as required by law, we expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. 38 Table of Contents
This standard will impact our disclosures but will not impact our consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, “Income Taxes - Improvements to Income Tax Disclosures,” which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation and modifies other income tax related disclosures.
Pending Accounting Standards In December 2023, the FASB issued ASU 2023-09, "Income Taxes - Improvements to Income Tax Disclosures," which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation and modifies other income tax related disclosures. The standard is effective for annual periods beginning in fiscal 2026.
In accordance with the indenture, the redemption price decreases annually thereafter and the 2028 notes can be redeemed at par on or after March 1, 2026 through maturity. The annual effective interest rate of the 2028 notes after giving effect to the amortization of financing costs is 5.2%.
Until March 1, 2026, the 2028 notes may be redeemed at 100.833% of their principal amount plus any accrued and unpaid interest, and the 2028 notes can be redeemed at par on or after March 1, 2026 through maturity. The annual effective interest rate of the 2028 notes after giving effect to the amortization of financing costs is 5.2%.
Our determination of fair value is primarily based on discounting the estimated cash flows at a rate commensurate with the inherent risks associated with the assets and related estimated cash flow streams. When an impairment charge is determined, the charge is then allocated to each lot in the same manner as land and development costs are allocated to each lot.
Our determination of fair value is primarily based on discounting the estimated cash flows at a rate commensurate with the inherent risks associated with the assets and related estimated cash flow streams.
We record land held for sale at the lesser of its carrying value or fair value less estimated costs to sell.
When we determine that we will sell the asset, the project is accounted for as land held for sale if certain criteria are met. We record land held for sale at the lesser of its carrying value or fair value less estimated costs to sell.
In fiscal 2023, net cash provided by operating activities was $364.1 million, which was primarily the result of net income generated in the period adjusted for impairments and land option charges and the decrease in real estate, partially offset by the decreases in accounts payable and other accrued liabilities, accrued development costs and earnest money deposits on sales contracts.
Operating Cash Flow Activities In fiscal 2025, net cash used in operating activities was $197.7 million, which was primarily the result of the increases in real estate and other assets and the decrease in accrued development costs, partially offset by net income generated in the period and the increase in earnest money on sales contracts.
Horton in fiscal 2024 and 2023 included 124 and 252 lots that were sold for $15.1 million and $28.2 million, respectively, to a lot banker who expects to sell those lots to D.R. Horton at a future date. In fiscal 2022, we sold 854 deferred development lots to customers other than D.R.
Horton in fiscal 2025 and 2024 included 927 and 124 lots, respectively, that were sold for $83.4 million and $15.1 million, respectively, to a lot banker who expects to sell those lots to D.R. Horton at a future date. Tract sales and other revenue in fiscal 2025 primarily consisted of 414 tract acres sold to D.R.
We also have $300 million principal amount of 5.0% senior notes (the "2028 notes") outstanding, which mature March 1, 2028 with interest payable semi-annually. On or after March 1, 2023, the 2028 notes may be redeemed at 102.5% of their principal amount plus any accrued and unpaid interest.
In accordance with the indenture, the redemption price decreases annually thereafter and the 2033 notes can be redeemed at par on or after March 15, 2030 through maturity. We also have $300 million principal amount of 5.0% senior notes (the "2028 notes") outstanding, which mature March 1, 2028 with interest payable semiannually.
We had no unrecognized tax benefits at September 30, 2024 and 2023. 31 Table of Contents Land and Lot Position Our land and lot position at September 30, 2024 and 2023 is summarized as follows: September 30 2024 2023 Lots owned 57,800 52,400 Lots controlled through land and lot purchase contracts 37,300 26,800 Total lots owned and controlled 95,100 79,200 Owned lots under contract to sell to D.R.
None of the tax provisions enacted by the new law have a significant impact on our financial statements. 31 Table of Contents Land and Lot Position Our land and lot position at September 30, 2025 and 2024 is summarized as follows: September 30, 2025 2024 Lots owned 65,100 57,800 Lots controlled through land and lot purchase contracts 34,700 37,300 Total lots owned and controlled 99,800 95,100 Owned lots under contract to sell to D.R.
The note is non-recourse, is secured by the underlying real estate, accrues interest at 4.0% per annum and matures in December 2025. 33 Table of Contents Issuance of Common Stock We had an effective shelf registration statement filed with the Securities and Exchange Commission in October 2021, registering $750 million of equity securities, of which $300 million was reserved for sales under our at-the-market equity offering program.
Issuance of Common Stock We have an effective shelf registration statement filed with the Securities and Exchange Commission in September 2024, registering $750 million of equity securities, of which $300 million was reserved for sales under our at-the-market equity offering program that we entered into in November 2024.
Other Note Payable In December 2023, we issued a note payable of $9.9 million as part of a transaction to acquire real estate for development.
All of the $30 million authorization remained at September 30, 2025. Other Note Payable In December 2023, we issued a note payable of $9.9 million as part of a transaction to acquire real estate for development. The note is non-recourse and is secured by the underlying real estate, accrues interest at 4.0% per annum and matures in December 2025.
We rarely purchase land for resale. However, we may change our plans for land we own or land under development and decide to sell the asset. When we determine that we will sell the asset, the project is accounted for as land held for sale if certain criteria are met.
When an impairment charge is determined, the charge is then allocated to each lot in the same manner as land and development costs are allocated to each lot. 35 Table of Contents We rarely purchase land for resale. However, we may change our plans for land we own or land under development and decide to sell the asset.
It also requires disclosure of the amount and description of the composition of other segment items and interim disclosures of a reportable segment’s profit or loss and assets. The standard is effective for our annual periods beginning in fiscal 2025 and interim periods beginning in the first quarter of fiscal 2026 on a retrospective basis to all periods presented.
It also requires disclosure of the amount and description of the composition of other segment items and interim disclosures of a reportable segment’s profit or loss and assets. Additionally, all disclosure requirements of ASU 2023-07 are required for entities with a single reportable segment.
The deferred tax assets were partially offset by a valuation allowance of $0.9 million, resulting in a net deferred tax liability of $50.7 million.
Our fiscal 2025 effective tax rate has a benefit for nontaxable income. At September 30, 2025, we had deferred tax liabilities, net of deferred tax assets, of $85.6 million. The deferred tax assets were partially offset by a valuation allowance of $0.6 million, resulting in a net deferred tax liability of $86.2 million.
In fiscal 2024, we issued 546,174 shares of common stock issued under our at-the-market equity offering program for proceeds of $19.7 million, net of commissions and other issuance costs totaling $0.4 million. In September 2024, we filed a new shelf registration statement, which became effective in October 2024, registering $750 million of equity securities.
In fiscal 2025, we did not issue any shares of common stock under our at-the-market equity offering program. At September 30, 2025, the full $750 million remained available for issuance under the shelf registration statement, with $300 million reserved for sales under our at-the-market equity offering program.
Tract sales and other revenue in fiscal 2024 primarily consisted of $19.0 million of revenue recognized related to land banking contracts with D.R. Horton as well as 64 tract acres sold to customers other than D.R. Horton for $11.8 million. Tract sales and other revenue sold to customers other than D.R.
Horton for $91.2 million as well as 90 tract acres sold to customers other than D.R. Horton for $12.3 million. Tract sales and other revenue to D.R. Horton in fiscal 2025 includes a multifamily site representing 273 rental units which we developed and sold to D.R. Horton for $10.7 million of revenue.
Removed
Demand for residential lots, particularly at affordable price points, remained strong during fiscal 2024, and our revenues increased 5% from the prior year period. The supply of new and existing homes at affordable price points remains limited, and low resale supply continues to support the demand for new construction.
Added
In fiscal year 2025, new home demand continued to be impacted by ongoing affordability constraint s and cautious consumer sentiment during fiscal 2025 . Homebuilders have continued to offer elevated levels of sales incentives, such as mortgage rate buydowns, to address affordability and spur the demand for new homes.
Removed
Demographics supporting housing demand remain favorable despite elevated mortgage rates and inflationary pressures, and homebuilders have continued to adjust to current market conditions by using incentives and price adjustments.
Added
Despite current market conditions, our revenues increased 10% from the prior year period. Ou r ongoing focus is primarily to develop lots for homes at affordable price points.
Removed
Horton for a total transaction price of $63.9 million. In fiscal 2024 and 2023, we recognized $8.1 million and $29.0 million of revenues as a result of our progress towards completion of our remaining unsatisfied performance obligations on these deferred development projects. At September 30, 2024, all performance obligations related to these deferred development lot sales have been fully satisfied.
Added
We remain focused on managing the pricing and sales pace in each of our communities to optimize the returns on our inventory investments and adjust to local market conditions and demand. To adjust to changes in market conditions during recent years, we have reduced lot prices where necessary.
Removed
Our $400 million principal amount of 3.85% senior notes (the "2026 notes") mature May 15, 2026 with interest payable semi-annually. On or after May 15, 2023, the 2026 notes may be redeemed at 101.925% of their principal amount plus any accrued and unpaid interest.
Added
Horton 265.6 185.0 $ 1,543.2 $ 1,456.4 Residential lot sales revenues in fiscal 2025 increased compared to the prior year period, primarily due to the increase in our average selling price per lot which was partially offset by the decrease in lot sales volume.
Removed
In accordance with the indenture, the redemption price decreases annually thereafter, and the 2026 notes can be redeemed at par on or after May 15, 2025 through maturity. The annual effective interest rate of the 2026 notes after giving effect to the amortization of financing costs is 4.1%.
Added
The increase in our average sales price per lot was primarily due to changes in the regional mix of lot sales. Lots sold to customers other than D.R.
Removed
At the time of filing the new registration statement, $728.1 million of equity securities remained available for issuance under our prior registration statement, which has since expired. Our at-the-market program expired in October 2024, and we anticipate entering into a new at-the-market equity offering program under our September 2024 shelf registration statement.
Added
Loss on extinguishment of debt of $1.2 million in fiscal 2025 was due to the repurchase and redemption of our $400 million principal amount of 3.85% senior notes due 2026.
Removed
The cash used in financing activities in fiscal 2023 primarily consisted of the repayment of our other note payable.
Added
On July 4, 2025, the One Big Beautiful Bill Act was signed into law (the new law).
Removed
The standard is effective for us beginning October 1, 2025, with early adoption permitted. We are currently evaluating the impact of this standard on our consolidated financial statements and related disclosures.
Added
The facility includes bank commitments of $575 million maturing on December 18, 2029 and $65 million maturing on October 28, 2026.
Removed
Any forward-looking statement speaks only as of the date on which such statement is made, and, except as required by law, we expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. 37 Table of Contents
Added
On October 30, 2025, we exercised the accordion feature under our credit facility and increased the total commitments by $25 million, resulting in total commitments of $665 million, of which $600 million matures on December 18, 2029 and $65 million matures on October 28, 2026.
Added
In March 2025, we issued $500 million principal amount of 6.5% senior notes due March 15, 2033 (the "2033 notes"), with interest payable semiannually. The annual effective interest rate of the 2033 notes after giving effect to the amortization of financing costs is 6.7%.
Added
The net proceeds from this issuance were primarily used to fund our tender offer to purchase any and all of our outstanding $400 million principal amount of 3.85% senior notes due 2026 (the "2026 notes"), of which $329.4 million aggregate principal amount was tendered. The repurchase price of $333.4 million included accrued and unpaid interest of $4.2 million.
Added
In September 2025, we redeemed the remaining $70.6 million principal amount of our 3.85% senior notes for $71.6 million, which included $1.0 million of accrued and unpaid interest. In fiscal 2025, we recognized a $1.2 million loss on extinguishment of debt related to the repurchase and redemption of our 2026 notes.
Added
At any time prior to March 15, 2028, we may, on one or more occasions, redeem up to 40% of the aggregate principal amount of the 2033 notes with the net cash proceeds from certain equity offerings at a redemption price of 106.5% of the principal amount of the 2033 notes being redeemed.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

2 edited+0 added−0 removed3 unchanged
Biggest changeAt September 30, 2024, our fixed rate debt consisted of $400 million principal amount of 3.85% senior notes due May 2026, $300 million principal amount of 5.0% senior notes due March 2028 and $9.9 million principal amount of our 4.0% other note payable due December 2025.
Biggest changeAt September 30, 2025, our fixed rate debt consisted of $300 million principal amount of 5.0% senior notes due March 2028, $500 million principal amount of 6.5% senior notes due March 2033 and $9.9 million principal amount of our 4.0% other note payable due in December 2025.
Our variable rate debt consisted of the outstanding borrowings on our $410 million senior unsecured revolving credit facility, of which there were none at September 30, 2024. Foreign Currency Risk We have no exposure to foreign currency fluctuations. Commodity Price Risk We have no significant exposure to commodity price fluctuations. 38 Table of Contents
Our variable rate debt consisted of the outstanding borrowings on our $640 million senior unsecured revolving credit facility, of which there were none at September 30, 2025. Foreign Currency Risk We have no exposure to foreign currency fluctuations. Commodity Price Risk We have no significant exposure to commodity price fluctuations. 39 Table of Contents

Other FOR 10-K year-over-year comparisons