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Item 5. Market for Registrant’s Common Equity

2021-11-18 compared with 2020-11-19 · 20 added, 65 removed, 13 unchanged (87% of the section changed)

6 unchanged sentences

Stock Performance Graph

The following graph illustrates the cumulative total stockholder return of an initial investment of $100 on December 31, 2015 in Forestar common stock for the period from December 31, 2015 through September 30, 2020, compared to the same investment in the Russell 2000 Index and our peer group.

Our peer group consists of the following real estate companies:

Joe Company, Tejon Ranch Co, Five Points Holding, LLC (Class A), and Alexander & Baldwin, Inc.

Consolidated-Tomoka Land Co.

(now CTO Realty Growth, Inc.) was removed from the peer group presented in fiscal 2019 as it is no longer substantially in the same line of business as the Company.

Pursuant to SEC rules, returns of each of the companies in the Peer Index are weighted according to the respective company’s stock market capitalization at the beginning of each period for which a return is indicated.

The following graph illustrates the cumulative total stockholder return of an initial investment of $100 on December 31, 2016 in Forestar common stock for the period from December 31, 2016 through September 30, 2021 compared to the same investment in the Russell 2000 Index and certain peer groups.

Pursuant to SEC rules, returns of each of the companies in the peer groups are weighted according to the respective company’s stock market capitalization at the beginning of each period for which a return is indicated.

Shareholder returns over the indicated period are based on historical data and should not be considered indicative of future shareholder returns.

The graph and related disclosure in no way reflect our forecast of future financial performance.

Year Ended December 31, Nine Months Ended

September 30, 2018 Year Ended September 30,

During the fiscal year ended September 30, 2021, we revised our peer group to include 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;

Masonite International Corporation;

and PGT Innovations, Inc.

These companies were selected based on their industries, similar market capitalization and business model.

Our former peer group consisted of the following real estate companies:

Tejon Ranch Co.;

Five Point Holdings, LLC (Class A);

and Alexander & Baldwin, Inc.

December 31, September 30,

2016 2017 2018 2019 2020 2021

1 unchanged sentence

$ 100.00 $ 165.41 $ 159.40 $ 137.44 $ 133.08 $ 140.08

Russell 2000 Index 100.00 121.31 139.08 155.10 141.31 141.86

Peer Group 100.00 118.44 111.22 89.94 85.79 60.04

Former Peer Group 100.00 94.43 80.21 78.95 57.18 111.99

Russell 2000 100.00 114.65 127.85 116.48 116.93 172.69

New Peer Group 100.00 124.56 109.14 119.80 112.14 148.37

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.

Selected Financial Data.

The following selected financial data are derived from our consolidated financial statements and should be read in conjunction with Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” Item 1A, “Risk Factors,” Item 8, “Financial Statements and Supplementary Data,” and all other financial data contained in this annual report on Form 10-K.

These historical results are not necessarily indicative of the results to be expected in the future.

Year Ended September 30, Nine Months Ended

September 30, 2018 Year Ended December 31,

2020 2019 2017 2016

(In millions, except per share amounts)

Consolidated Operating Data:

Revenues $ 931.8 $ 428.3 $ 78.3 $ 114.3 $ 197.3

Cost of sales (1) 813.7 362.7 49.5 112.6 175.1

Selling, general and administrative expense (2) 45.7 28.9 19.4 75.3 48.5

Equity in earnings of unconsolidated ventures (0.7) (0.5) (4.8) (17.8) (6.1)

Gain on sale of assets (3) (0.1) (3.0) (27.8) (113.4) (166.7)

Interest expense — — 3.7 8.5 20.0

Loss on extinguishment of debt (4) — — — 0.6 35.9

Interest and other income (4.9) (5.5) (6.4) (3.6) (1.7)

Income from continuing operations before taxes

78.1 45.7 44.7 52.1 92.3

Income tax expense (benefit) (5) 16.4 9.4 (25.3) 45.8 15.3

Net income from continuing operations 61.7 36.3 70.0 6.3 77.0

Income (loss) from discontinued operations, net of taxes (6)

— — — 46.0 (16.8)

Net income 61.7 36.3 70.0 52.3 60.2

Net income attributable to noncontrolling interests

0.9 3.3 1.2 2.0 1.6

Net income attributable to Forestar Group Inc.

$ 60.8 $ 33.0 $ 68.8 $ 50.3 $ 58.6

Net Income (Loss) per Basic Share:

Continuing operations $ 1.26 $ 0.79 $ 1.64 $ 0.10 $ 1.80

Discontinued operations $ — $ — $ — $ 1.09 $ (0.40)

Net income per basic share $ 1.26 $ 0.79 $ 1.64 $ 1.19 $ 1.40

Net Income (Loss) per Diluted Share:

Continuing operations $ 1.26 $ 0.79 $ 1.64 $ 0.10 $ 1.78

Discontinued operations $ — $ — $ — $ 1.09 $ (0.40)

Net income per diluted share $ 1.26 $ 0.79 $ 1.64 $ 1.19 $ 1.38

September 30, December 31,

2020 2019 2018 2017 2016

(In millions)

Consolidated Balance Sheet Data:

Cash and cash equivalents $ 394.3 $ 382.8 $ 318.8 $ 323.0 $ 266.1

Restricted cash — — 16.2 40.0 0.3

Real estate 1,309.7 1,028.9 498.0 130.4 293.0

Total assets 1,739.9 1,455.7 893.1 761.9 733.2

Debt 641.1 460.5 111.7 108.4 110.4

Forestar Group Inc.

stockholders' equity 870.9 808.3 673.3 604.2 560.7

_____________________

(1) Cost of sales in fiscal 2017 included impairment charges of $37.9 million associated with the mineral resources reporting unit goodwill and $5.8 million primarily related to our central Texas water assets.

(2) Selling, general and administrative expense in fiscal 2017 included merger related transaction costs of $37.2 million.

(3) Gains on sales of assets in the nine months ended September 30, 2018 and in fiscal 2017 and 2016 represent gains recognized on the sale of non-core assets.

(4) Loss on extinguishment of debt in fiscal 2017 and 2016 is related to the early retirement of a total of $230.5 million principal amount of our 8.50% senior notes and $6.1 million principal amount of our convertible senior notes.

(5) Income tax benefit in the nine months ended September 30, 2018 reflects the release of our federal valuation allowance and a portion of our state valuation allowance.

Income tax expense in fiscal 2017 was impacted by nondeductible merger transaction costs and goodwill impairment.

(6) Income from discontinued operations in fiscal 2017 reflects an income tax benefit of $46.0 million.

Loss from discontinued operations in fiscal 2016 included an impairment charge of $0.6 million related to non-core oil and gas working interests and a loss of $13.7 million associated with the sale of working interest oil and gas properties.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity