What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-11-17 compared with 2021-11-18 · 83 added, 112 removed, 625 unchanged (24% of the section changed)

8 unchanged sentences

Based upon this assessment, management believes that our internal control over financial reporting is effective as of September 30, 2022.

Ernst & Young LLP, the independent registered public accounting firm that audited our financial statements included in this Form 10-K, has also audited our internal control over financial reporting.

Ernst & Young LLP (PCAOB ID:

42 ), the independent registered public accounting firm that audited our financial statements included in this Form 10-K, has also audited our internal control over financial reporting.

Their attestation report follows this report of management.

49 unchanged sentences

Land development costs (including estimated costs to complete)

Description of the Matter

For the year ended September 30, 2021, the Company’s cost of sales was approximately $1.1 billion, which included the costs of direct land and lot acquisition, land development, and related costs (both incurred and estimated to be incurred) allocated to each residential lot in the project.

Description of the Matter For the year ended September 30, 2022, the Company’s cost of sales was approximately $1.2 billion, which included the costs of direct land and lot acquisition, land development, and related costs (both incurred and estimated to be incurred) allocated to each residential lot in the project.

As discussed in Note 1 to the consolidated financial statements, land development costs are typically allocated to individual residential lots based on the relative sales value of the lots.

4 unchanged sentences

Specifically, the land development cost estimate is sensitive to management assumptions regarding estimated cost of labor, material, and subcontractors.

How We Addressed the Matter in Our Audit

We obtained an understanding and tested the design and operating effectiveness of the Company's process and controls over its land development cost measurement and allocation to lots, including controls over management's review of the estimated costs to complete.

How We Addressed the Matter in Our Audit We obtained an understanding and tested the design and operating effectiveness of the Company's process and controls over its land development cost measurement and allocation to lots, including controls over management's review of the estimated costs to complete.

Our audit procedures included, among others, testing the assumptions used to develop the estimated costs to complete the land development projects by comparing to supporting documentation such as subcontractor bids, contracts, or actual costs from similar or related projects.

12 unchanged sentences

Investment in unconsolidated ventures 0.5 0.9

Income taxes receivable — 6.3

Property and equipment, net 5.7 2.9

51 unchanged sentences

— — 60.8 0.9 61.7

Issuance of common stock ( 6,037,500 shares)

6.0 94.7 — — 100.7

Stock issued under employee benefit plans ( 64,555 shares)

0.1 — — — 0.1

Cash paid for shares withheld for taxes

— ( 0.3 ) — — ( 0.3 )

Stock-based compensation expense

5 unchanged sentences

— — 110.2 0.3 110.5

Issuance of common stock ( 1,448,520 shares)

1.4 32.0 — — 33.4

Purchase of noncontrolling interest, net — ( 1.7 ) — ( 0.1 ) ( 1.8 )

Stock issued under employee benefit plans ( 69,948 shares)

11 unchanged sentences

0.1 1.6 — — 1.7

Purchase of noncontrolling interest, net — ( 1.7 ) — ( 0.1 ) ( 1.8 )

Stock issued under employee benefit plans ( 96,544 shares)

4 unchanged sentences

— 3.3 — — 3.3

Distributions to noncontrolling interests

— — — ( 0.1 ) ( 0.1 )

Balances at September 30, 2022 ( 49,761,480 shares)

11 unchanged sentences

Equity in earnings of unconsolidated ventures ( 1.2 ) ( 0.2 ) ( 0.7 )

Distributions of earnings of unconsolidated ventures — — 4.9

Stock-based compensation expense 3.3 2.6 2.0

Real estate and land option charges 3.0 0.9 1.3

Real estate impairment and land option charges 12.5 3.0 0.9

Loss on extinguishment of debt — 18.1 —

3 unchanged sentences

Increase in real estate ( 142.3 ) ( 585.9 ) ( 281.7 )

(Increase) decrease in other assets ( 14.8 ) ( 3.4 ) 0.3

Increase in other assets ( 1.6 ) ( 14.8 ) ( 3.4 )

Increase in accounts payable and other accrued liabilities 40.9 28.0 15.0

Increase in accrued development costs 17.8 60.1 9.0

Increase in earnest money deposits on sales contracts 49.7 3.9 40.5

(Decrease) increase in earnest money deposits on sales contracts ( 11.5 ) 49.7 3.9

Decrease (increase) in income taxes receivable — 6.3 ( 3.1 )

Net cash used in operating activities ( 303.1 ) ( 168.4 ) ( 391.2 )

Net cash provided by (used in) operating activities 108.7 ( 303.1 ) ( 168.4 )

INVESTING ACTIVITIES

2 unchanged sentences

Proceeds from sale of assets 3.2 — 1.3

Net cash provided by (used in) investing activities 1.0 5.0 ( 0.8 )

Net cash provided by investing activities 1.3 1.0 5.0

FINANCING ACTIVITIES

7 unchanged sentences

Net cash provided by financing activities 1.2 61.4 174.9

Net (decrease) increase in cash and cash equivalents ( 240.7 ) 11.5 47.8

Net increase (decrease) in cash and cash equivalents 111.2 ( 240.7 ) 11.5

Cash and cash equivalents at beginning of year 153.6 394.3 382.8

25 unchanged sentences

Horton owned approximately 63 % of the Company's outstanding common stock.

Changes in Presentation and Reclassifications

Certain items have been reclassified in the prior year financial statements to conform to the presentation and classifications used in the current year.

Accrued development costs have been reclassified from accrued expenses and other liabilities to accrued development costs in the prior year consolidated balance sheet.

The Company has reclassified the change in accrued development costs from the change in accounts payable and other liabilities to the change in accrued development costs in the prior year statement of cash flows.

These reclassifications had no net effect on the Company's consolidated operating results, financial position or cash flows.

Use of Estimates

11 unchanged sentences

FORESTAR GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Real Estate and Cost of Sales

31 unchanged sentences

FORESTAR GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Variable Interests

14 unchanged sentences

Property and equipment, net $ 5.7 $ 2.9

Depreciation expense was $ 0.4 million in fiscal 2021 and $ 0.3 million in both fiscal 2020 and 2019.

Depreciation expense was $ 0.7 million, $ 0.4 million and $ 0.3 million in fiscal 2022, 2021 and 2020, respectively.

The Company’s income tax expense is calculated using the asset and liability method, under which deferred tax assets and liabilities are recognized based on the future tax consequences attributable to temporary differences between the financial statement amounts of assets and liabilities and their respective tax bases and attributable to net operating losses and tax credit carryforwards.

11 unchanged sentences

FORESTAR GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Stock-Based Compensation

11 unchanged sentences

Pending Accounting Standards

In December 2019, the FASB issued ASU 2019-12 related to simplifying the accounting for income taxes.

The guidance is effective for the Company beginning October 1, 2021 and is not expected to have a material impact on its consolidated financial position, results of operations or cash flows.

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform,” which provides optional expedients and exceptions for applying U.S.

In March 2020, the Financial Accounting Standards Board ("FASB") issued ASU 2020-04, “Reference Rate Reform,” which provides optional expedients and exceptions for applying U.S.

GAAP to contracts, hedging relationships, and other transactions affected by the discontinuation of the London Interbank Offered Rate (LIBOR) or by another reference rate expected to be discontinued.

1 unchanged sentence

In January 2021, the FASB issued ASU 2021-01, “Reference Rate Reform - Scope,” which clarified the scope and application of the original guidance.

The Company will adopt these standards when LIBOR is discontinued and does not expect it to have a material impact on its consolidated financial statements and related disclosures.

The Company will adopt these standards when LIBOR is discontinued and does not expect such standards to have a material impact on its consolidated financial statements and related disclosures.

In October 2021, the FASB issued ASU 2021-08, which requires application of ASC 606, “Revenue from Contracts with Customers,” to recognize and measure contract assets and liabilities from contracts with customers acquired in a business combination.

ASU 2021-08 creates an exception to the general recognition and measurement principle in ASC 805 and will result in recognition of contract assets and contract liabilities consistent with those recorded by the acquiree immediately before the acquisition date.

The guidance is effective for the Company beginning October 1, 2023 and interim periods therein, with early adoption permitted.

The Company is currently evaluating the impact of this guidance on its consolidated financial position, results of operations and cash flows.

The guidance is effective for the Company beginning October 1, 2023, with early adoption permitted.

The Company is currently evaluating the impact of this guidance, and it is not expected to have a material impact on its consolidated financial position, results of operations or cash flows.

Note 2 — Segment Information

The Company manages its operations through its real estate segment, which is its core business and generates substantially all of its revenues.

The real estate segment primarily acquires land and develops infrastructure for single-family residential communities, and its revenues generally come from sales of residential single-family finished lots to local, regional and national homebuilders.

The 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.

The Company has other business activities for which the related assets and operating results are immaterial and therefore are included within the Company's real estate segment.

FORESTAR GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 3 — Real Estate

3 unchanged sentences

Developed and under development projects $ 1,932.6 $ 1,824.7

Undeveloped land 80.5 5.4

Land held for future development 89.8 80.5

$ 2,022.4 $ 1,905.2

In fiscal 2021, the Company invested $ 779.7 million for the acquisition of residential real estate and $ 850.7 million for the development of residential real estate.

At September 30, 2021 and 2020, undeveloped land primarily consists of undeveloped land which the Company has the contractual right to sell to D.R.

Horton within approximately one year of its purchase or, if D.R.

Horton elects, at an earlier date, at a sales price equal to the carrying value of the land at the time of sale plus additional consideration of 12 % to 16 % per annum.

During fiscal 2022, the Company invested $ 320.7 million for the acquisition of residential real estate and $ 1.1 billion for the development of residential real estate.

At September 30, 2022 and 2021, land held for future development primarily consisted of undeveloped land which the Company has the contractual right to sell to D.R.

Horton at a sales price equal to the carrying value of the land at the time of sale plus additional consideration of 12 % to 16 % per annum.

Each quarter, the Company reviews the performance and outlook for all of its real estate for indicators of potential impairment and performs detailed impairment evaluations and analyses when necessary.

As a result of this process there were no real estate impairment charges recorded in fiscal 2021 or 2020 and $ 0.8 million of impairment charges were recorded during fiscal 2019.

During fiscal 2021, 2020 and 2019, earnest money and pre-acquisition cost write-offs related to land purchase contracts that the Company has terminated or expects to terminate were $ 3.0 million, $ 0.9 million and $ 0.2 million, respectively.

As a result of this process, the Company recorded real estate impairment charges of $ 3.8 million during fiscal 2022.

There were no real estate impairment charges recorded in fiscal 2021 or 2020.

During fiscal 2022, 2021 and 2020, land purchase contract deposit and pre-acquisition cost write-offs related to land purchase contracts that the Company has terminated or expects to terminate were $ 8.7 million, $ 3.0 million and $ 0.9 million, respectively.

Real estate impairments and land option charges are included in cost of sales in the consolidated statements of operations.

5 unchanged sentences

Residential lot sales $ 1,455.5 $ 1,293.1 $ 880.3

Deferred development lot sales 26.8 — —

Tract sales and other 36.8 32.7 51.5

$ 1,519.1 $ 1,325.8 $ 931.8

During fiscal 2022, deferred development lot sales included 854 undeveloped and partially developed lots that were sold to customers other than D.R.

Horton for a total transaction price of $ 64.1 million.

As part of these transactions, the Company is obligated to complete the development of these lots.

During fiscal 2022, the Company received $ 38.8 million in cash related to deferred development transactions with the remainder of the transaction price due as development of the lots is completed.

During fiscal 2022, the Company recognized revenue of $ 26.8 million related to deferred development transactions.

The remaining revenue will be recognized over time as the Company’s development obligations are completed.

Total revenue from D.R.

Horton was $ 1.2 billion, $ 887.6 million and $ 326.6 million in fiscal 2021, 2020 and 2019, respectively.

Horton was $ 1.2 billion in both fiscal 2022 and 2021 and $ 887.6 million in fiscal 2020.

FORESTAR GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 5 — Capitalized Interest

11 unchanged sentences

(In millions)

Receivables, net $ 0.4 $ 0.4

Earnest money notes receivable on sales contracts $ — $ 0.7

Receivables, net 11.4 0.4

Lease right of use assets 7.5 6.9

1 unchanged sentence

Land purchase contract deposits 10.0 10.4

Other 5.3 5.7

Other assets 1.8 5.3

$ 49.6 $ 39.1

12 unchanged sentences

$ 70.1 $ 56.7

Contract liabilities at September 30, 2022 include $ 12.0 million related to the Company's remaining unsatisfied performance obligations on deferred development lot sales.

FORESTAR GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 7 — Debt

5 unchanged sentences

5.0 % senior notes due 2028 (1)

Other note payable 12.5 12.5

3 unchanged sentences

Bank Credit Facility

In April 2021, the Company's senior unsecured revolving credit facility was amended to increase its capacity to $ 410 million 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.

The maturity date of the facility was extended to April 16, 2025.

The Company has 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.

The facility also provides for the issuance of letters of credit with a sublimit equal to the greater of $ 100 million and 50 % of the revolving credit commitment.

1 unchanged sentence

Letters of credit issued under the facility reduce the available borrowing capacity.

Borrowings and repayments under the facility were $ 58.0 million each during fiscal 2021.

There were no borrowings or repayments under the facility during fiscal 2022.

At September 30, 2022, there were no borrowings outstanding and $ 53.3 million of letters of credit issued under the revolving credit facility, resulting in available capacity of $ 356.7 million.

In October 2022, the Company's senior unsecured revolving credit facility was amended to extend its maturity date to October 28, 2026.

The revolving credit facility is guaranteed by the Company’s wholly-owned subsidiaries that are not immaterial subsidiaries or have not been designated as unrestricted subsidiaries.

The revolving credit facility includes customary affirmative and negative covenants, events of default and financial covenants.

6 unchanged sentences

The notes are guaranteed by each of the Company's subsidiaries to the extent such subsidiaries guarantee the Company's revolving credit facility.

In April 2021, the company issued $ 400 million principal amount of 3.85 % senior notes (the "2026 notes") that mature May 15, 2026 with interest payable semi-annually.

FORESTAR GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company's $ 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.

1 unchanged sentence

The annual effective interest rate of the 2026 notes after giving effect to the amortization of financing costs is 4.1 %.

FORESTAR GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

proceeds from this issuance were primarily used to redeem the Company's $ 350 million principal amount of 8.0 % senior notes due April 15, 2024 on May 7, 2021.

The redemption price of $ 365.6 million included a call premium of $ 14.0 million and accrued and unpaid interest of $ 1.6 million.

The Company recognized an $ 18.1 million loss on extinguishment of debt upon the redemption of such notes.

The Company's $ 300 million principal amount of 5.0 % senior notes mature March 1, 2028 (the "2028 notes") with interest payable semi-annually.

The Company's $ 300 million principal amount of 5.0 % senior notes (the "2028 notes") 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.

15 unchanged sentences

The Company also has a note payable of $ 12.5 million that was issued 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 October 2023.

The note is non-recourse, is secured by the underlying real estate and accrues interest at 4.0 % per annum with interest payments due in October 2022 and at maturity in October 2023.

Note 8 — Earnings per Share

13 unchanged sentences

FORESTAR GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 9 — Income Taxes

26 unchanged sentences

The effective tax rate for all years includes an expense for state income taxes and nondeductible expenses and a benefit related to noncontrolling interests

The Inflation Reduction Act of 2022 ("IRA") was signed into law on August 16, 2022.

The tax provisions of the IRA did not have a material impact on our financial statements.

FORESTAR GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Significant components of deferred taxes are:

13 unchanged sentences

Deferred tax liability, net $ ( 36.9 ) $ ( 24.4 )

At September 30, 2021 and 2020, the Company had no federal NOL carryforwards as a result of NOL carryback claims and taxable income in fiscal 2020.

At September 30, 2022, the Company had tax benefits of $ 1.2 million related to state NOL carryforwards, of which $ 0.7 million will expire between 2030 and 2037 while the remaining $ 0.5 million do not have an expiration date.

6 unchanged sentences

In accordance with the agreement, the Company reimbursed D.R.

Horton $ 0.5 million and $ 0.2 million in fiscal 2021 and 2020, respectively, for its tax expense generated in fiscal 2020 and 2019.

Horton $ 0.7 million, $ 0.5 million and $ 0.2 million in fiscal 2022, 2021 and 2020, respectively, for its tax expense generated in fiscal 2021, 2020 and 2019.

The Company files income tax returns in the U.S.

2 unchanged sentences

The Company is not currently being audited by the IRS or any state jurisdictions.

FORESTAR GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A reconciliation of the beginning and ending amount of tax benefits not recognized for book purposes is as follows:

5 unchanged sentences

Unrecognized tax benefits, end of year $ — $ — $ —

FORESTAR GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

The Company had no unrecognized tax benefits at September 30, 2021 as a result of the recognition of $ 1.6 million of previously unrecognized tax benefits during fiscal 2020.

All of the $ 1.6 million of recognized tax benefits affected the Company’s effective tax rate and was attributable to the NOL carryback provisions of the CARES Act allowing previously uncertain tax attributes to be recognized.

The Company had no unrecognized tax benefits at September 30, 2022, 2021 and 2020 as a result of the recognition of $ 1.6 million of previously unrecognized tax benefits during fiscal 2020.

All of the $ 1.6 million of recognized tax benefits affected the Company’s effective tax rate in fiscal 2020 and was attributable to the NOL carryback provisions of the CARES Act allowing previously uncertain tax attributes to be recognized.

The Company recognizes interest accrued related to unrecognized tax benefits in income tax expense.

2 unchanged sentences

Note 10 — Stockholders' Equity

At September 30, 2021, the Company had an effective shelf registration statement filed with the Securities and Exchange Commission (SEC) in September 2018 registering $ 500 million of equity securities, of which $ 100 million was reserved for sales under the at-the-market equity offering program that became effective in August 2020.

In fiscal 2021, the Company issued 1.4 million shares of common stock under its at-the-market equity offering program for proceeds of $ 33.4 million, net of commissions and other issuance costs totaling $ 1.0 million.

At September 30, 2021, $ 359.9 million remained available for issuance under the shelf registration statement, of which $ 65.6 million is reserved for sales under the at-the-market equity offering program.

In October 2021, after the expiration of the existing registration statement and at-the market equity offering program, a new shelf registration statement became effective registering $ 750 million of equity securities.

The Company has 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 the at-the-market equity offering program that became effective in November 2021.

In fiscal 2022, the Company issued 84,547 shares of common stock under its at-the-market equity offering program for proceeds of $ 1.7 million, net of commissions and other issuance costs totaling $ 0.1 million.

At September 30, 2022, $ 748.2 million remained available for issuance under the shelf registration statement, of which $ 298.2 million was reserved for sales under the at-the-market equity offering program.

Note 11 — Employee Benefit Plans

3 unchanged sentences

Additional employer contributions in the form of profit sharing may also be made at the Company’s discretion.

The Company recorded expense of $ 0.6 million, $ 0.4 million and $ 0.2 million for matching contributions in fiscal 2021, 2020 and 2019, respectively.

The Company recorded expense of $ 0.8 million, $ 0.6 million and $ 0.4 million for matching contributions in fiscal 2022, 2021 and 2020, respectively, which is included in in selling, general and administrative expense in the Company's consolidated statements of operations.

Restricted Stock Units (RSUs)

3 unchanged sentences

FORESTAR GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During fiscal 2022, 2021 and 2020, the Company granted time-based RSUs that vest annually in equal installments over periods of three to five years .

8 unchanged sentences

Outstanding at end of year 621,951 $ 18.94 387,154 $ 20.70 285,863 $ 17.47

The total fair value of shares vested on the vesting date during both fiscal 2021 and 2020 was $ 1.6 million.

Total stock-based compensation expense related to the Company's restricted stock units for fiscal 2021, 2020 and 2019 was $ 2.6 million, $ 2.0 million and $ 1.3 million, respectively, and fiscal 2021, 2020 and 2019 included $ 0.7 million, $ 0.5 million and $ 0.6 million, respectively, of expense recognized for employees that were retirement eligible on the date of grant.

The total fair value of shares vested on the vesting date was $ 2.5 million during fiscal 2022 and $ 1.6 million during both fiscal 2021 and 2020.

Total stock-based compensation expense related to the Company's restricted stock units for fiscal 2022, 2021 and 2020 was $ 3.3 million, $ 2.6 million and $ 2.0 million, respectively.

These expenses are included in selling, general and administrative expense in the Company's consolidated statements of operations.

17 unchanged sentences

FORESTAR GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Other Commitments

20 unchanged sentences

In accordance with the agreement, the Company reimbursed D.R.

Horton $ 0.5 million and $ 0.2 million in fiscal 2021 and 2020, respectively, for its tax expense generated in fiscal 2020 and 2019, and D.R.

Horton reimbursed the Company $ 0.4 million in fiscal 2019 for its tax benefit generated in the nine months ended September 30, 2018.

Horton $ 0.7 million, $ 0.5 million and $ 0.2 million in fiscal 2022, 2021 and 2020, respectively, for its tax expense generated in fiscal 2021, 2020 and 2019.

Under the terms of the Master Supply Agreement with D.R.

12 unchanged sentences

Horton for lots under contract $ — $ 0.7

Remaining purchase price of lots under contract with D.R.

Remaining sales price of lots under contract with D.R.

Horton $ 1,389.7 $ 1,582.7

During fiscal 2021, 2020 and 2019, the Company's residential lot sales totaled 15,915 , 10,373 and 4,132 and lot sales revenues were $ 1.3 billion, $ 880.3 million and $ 351.7 million.

During fiscal 2022, 2021 and 2020, the Company's residential lot sales totaled 17,691, 15,915 and 10,373 and lot sales revenues were $ 1.5 billion, $ 1.3 billion and $ 880.3 million.

Lot and land sales to D.R.

3 unchanged sentences

(Dollars in millions)

Residential single-family lots sold to D.R.

Residential lots sold to D.R.

Horton 14,895 14,839 10,164

6 unchanged sentences

FORESTAR GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

In addition, the net impact of the change in contract liabilities decreased revenues on lot sales to D.R.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In addition, the net impact of the change in contract liabilities increased revenues on lot sales to D.R.

Horton by $ 1.8 million in fiscal 2022, decreased revenues on lot sales to D.R.

Horton by $ 5.6 million in fiscal 2021 and increased revenues on lot sales to D.R.

Horton by $ 2.3 million and $ 4.0 million in fiscal 2020 and 2019, respectively.

Horton by $ 2.3 million in fiscal 2020.

During fiscal 2022, 2021 and 2020, the Company reimbursed D.R.

Horton approximately $ 30.8 million, $ 27.0 million and $ 34.5 million, for previously paid earnest money and $ 61.3 million, $ 36.3 million and $ 13.1 million for pre-acquisition and other due diligence and development costs related to land purchase contracts whereby D.R.

Horton assigned its rights under these land purchase contracts to the Company.

Horton approximately $ 8.7 million, $ 30.8 million and $ 27.0 million for previously paid earnest money and $ 58.9 million, $ 61.3 million and $ 36.3 million for pre-acquisition and other due diligence and development costs related to land purchase contracts identified by D.R.

Horton that the Company independently underwrote and closed.

During fiscal 2022, 2021 and 2020, the Company paid D.R.

1 unchanged sentence

These amounts are included in cost of sales in the Company’s consolidated statements of operations.

At September 30, 2021 and 2020, undeveloped land primarily consists of undeveloped land which the Company has the contractual right to sell to D.R.

At September 30, 2022 and 2021, land held for future development primarily consists of undeveloped land which the Company has the contractual right to sell to D.R.

Horton within approximately one year of its purchase or, if D.R.

3 unchanged sentences

FORESTAR GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 14 — Fair Value Measurements

27 unchanged sentences

Non-financial assets measured at fair value on a non-recurring basis primarily include real estate assets which the Company reviews for indicators of potential impairment and performs impairment evaluations when necessary.

FORESTAR GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

Note 15 — Quarterly Results of Operations (Unaudited)

Consolidated quarterly results of operations for fiscal year 2021 and 2020 were (in millions, except per share amounts):

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

Total revenues $ 307.1 $ 287.1 $ 312.9 $ 418.7

Income before income taxes 29.2 37.6 21.1 58.8

Income tax expense 7.1 9.2 5.2 14.7

Net income 22.1 28.4 15.9 44.1

Net income attributable to noncontrolling interests 0.1 — 0.1 0.1

Net income attributable to Forestar Group Inc.

22.0 28.4 15.8 44.0

Net income per share — basic $ 0.46 $ 0.59 $ 0.32 $ 0.89

Net income per share — diluted $ 0.46 $ 0.59 $ 0.32 $ 0.89

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

Total revenues $ 247.2 $ 159.1 $ 177.9 $ 347.6

Income before income taxes 22.2 13.7 10.3 32.0

Income tax expense 5.4 3.3 0.2 7.5

Net income 16.8 10.4 10.1 24.5

Net (loss) income attributable to noncontrolling interests ( 0.1 ) 0.8 — 0.3

Net income attributable to Forestar Group Inc.

16.9 9.6 10.1 24.2

Net income per share — basic $ 0.35 $ 0.20 $ 0.21 $ 0.50

Net income per share — diluted $ 0.35 $ 0.20 $ 0.21 $ 0.50

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

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 8. Financial Statements and Supplementary Data