What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2023-11-17 compared with 2022-11-17 · 77 added, 117 removed, 591 unchanged (25% of the section changed)

12 unchanged sentences

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of Forestar Group Inc.

To the Stockholders and the Board of Directors of Forestar Group Inc.

Opinion on Internal Control Over Financial Reporting

23 unchanged sentences

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of Forestar Group Inc.

To the Stockholders and the Board of Directors of Forestar Group Inc.

Opinion on the Financial Statements

37 unchanged sentences

CONSOLIDATED BALANCE SHEETS

September 30,

September 30, 2023 September 30, 2022

(In millions, except share data)

41 unchanged sentences

$ 166.9 $ 178.8 $ 110.2

Basic net income per common share attributable to Forestar Group Inc.

$ 3.59 $ 2.25 $ 1.26

Basic net income per common share $ 3.34 $ 3.59 $ 2.25

Weighted average number of common shares 50.0 49.8 48.9

Diluted net income per common share attributable to Forestar Group Inc.

$ 3.59 $ 2.25 $ 1.26

Diluted net income per common share $ 3.33 $ 3.59 $ 2.25

Adjusted weighted average number of common shares 50.1 49.8 49.0

7 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)

1 unchanged sentence

— — 166.9 — 166.9

Issuance of common stock ( 84,547 shares)

0.1 1.6 — — 1.7

Stock issued under employee benefit plans ( 142,233 shares)

18 unchanged sentences

Stock-based compensation expense 4.3 3.3 2.6

Real estate impairment and land option charges 12.5 3.0 0.9

Impairments and land option charges 24.0 12.5 3.0

Loss on extinguishment of debt — — 18.1

2 unchanged sentences

Changes in operating assets and liabilities:

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

Decrease (increase) in real estate

206.3 ( 142.3 ) ( 585.9 )

Increase in other assets

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

( 7.0 ) ( 1.6 ) ( 14.8 )

(Decrease) increase in accounts payable and other accrued liabilities

( 12.7 ) 40.9 28.0

(Decrease) increase in accrued development costs

( 18.2 ) 17.8 60.1

(Decrease) increase in earnest money deposits on sales contracts

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

( 14.7 ) ( 11.5 ) 49.7

Decrease in income taxes receivable

Net cash provided by (used in) operating activities 364.1 108.7 ( 303.1 )

6 unchanged sentences

Issuance of common stock — 1.7 33.4

Proceeds from debt — 458.0 300.0

Repayments of debt — ( 422.0 ) ( 118.9 )

Additions to debt — — 458.0

Repayment of debt ( 12.5 ) — ( 422.0 )

Deferred financing fees — — ( 4.9 )

2 unchanged sentences

Cash paid for shares withheld for taxes ( 0.7 ) ( 0.5 ) ( 0.6 )

Net cash provided by financing activities 1.2 61.4 174.9

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

Net cash (used in) provided by financing activities ( 13.2 ) 1.2 61.4

Increase (decrease) in cash and cash equivalents 351.2 111.2 ( 240.7 )

Cash and cash equivalents at beginning of year 264.8 153.6 394.3

2 unchanged sentences

Note payable issued for real estate $ — $ — $ 12.5

Income taxes paid (refunded), net $ 42.4 $ 4.3 $ ( 3.1 )

Income taxes paid, net $ 44.7 $ 42.4 $ 4.3

See accompanying notes to consolidated financial statements.

42 unchanged sentences

These earnest money deposits are typically released to the homebuilders as lots are sold.

Earnest money deposits from D.R.

Horton are subject to mortgages which are secured by the real estate under contract with D.R.

These mortgages expire when the earnest money is released to D.R.

Horton as lots are sold.

See Note 13 for related party transactions and balances.

Earnest money deposits from customers are subject to mortgages that are secured by the real estate under contract.

These mortgages expire when the earnest money is released to homebuilders as lots are sold.

The Company has agreements with certain utility or improvement districts to convey water, sewer and other infrastructure-related assets it has constructed in connection with projects within their jurisdiction and receive reimbursements for the cost of these improvements.

6 unchanged sentences

Real estate impairments are included in cost of sales in the consolidated statements of operations.

Capitalized Interest

C apitalized Interest

The Company capitalizes interest costs throughout the development period (active real estate).

53 unchanged sentences

Non-financial assets measured at fair value on a non-recurring basis principally include real estate assets which the Company reviews for indicators of impairment when events and circumstances indicate that the carrying value is not recoverable.

Pending Accounting Standards

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.

The guidance was effective beginning March 12, 2020 and can be applied prospectively through December 31, 2022.

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 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, 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

6 unchanged sentences

Real estate consists of:

September 30,

(In millions)

2 unchanged sentences

$ 1,790.3 $ 2,022.4

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.

During fiscal 2023, the Company invested $ 199.4 million for the acquisition of residential real estate and $ 777.2 million for the development of residential real estate.

At September 30, 2023 and 2022, land held for future development primarily consisted of undeveloped land which the Company has the contractual right to sell to D.R.

1 unchanged sentence

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, 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.

As a result of this process, the Company recorded real estate impairment charges of $ 19.4 million and $ 3.8 million during fiscal 2023 and 2022, respectively.

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

During fiscal 2023, 2022 and 2021 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 $ 4.6 million $ 8.7 million and $ 3.0 million, respectively.

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

These land option charges and the impairments discussed above are included in cost of sales in the consolidated statements of operations.

Note 4 — Revenues

7 unchanged sentences

$ 1,436.9 $ 1,519.1 $ 1,325.8

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

In fiscal 2022, the Company sold 854 deferred development lots 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 in both fiscal 2022 and 2021 and $ 887.6 million in fiscal 2020.

In fiscal 2023 and 2022, the Company recognized $ 29.0 million and $ 26.8 million of revenues as a result of its progress towards completion of its remaining unsatisfied performance obligations on these deferred development projects.

FORESTAR GROUP INC.

13 unchanged sentences

(In millions)

Earnest money notes receivable on sales contracts $ — $ 0.7

Receivables, net $ 25.7 $ 11.4

17 unchanged sentences

$ 61.2 $ 70.1

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

Contract liabilities at September 30, 2023 and 2022 include $ 3.5 million and $ 12.0 million, respectively, related to the Company's remaining unsatisfied performance obligations on deferred development lot sales.

FORESTAR GROUP INC.

13 unchanged sentences

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.

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.

Borrowings under the revolving credit facility are subject to a borrowing base calculation based on the book value of the Company's real estate assets and unrestricted cash.

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

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

The maturity date of the facility is October 28, 2026.

At September 30, 2023, there were no borrowings outstanding and $ 27.7 million of letters of credit issued under the revolving credit facility, resulting in available capacity of $ 382.3 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.

4 unchanged sentences

At September 30, 2023, the Company was in compliance with all of the covenants, limitations and restrictions of its revolving credit facility.

The Company has outstanding senior notes as described below that were issued pursuant to Rule 144A and Regulation S under the Securities Act.

The Company has outstanding senior notes as described below that were issued pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended (the "Securities Act").

The notes represent senior unsecured obligations that rank equally in right of payment to all existing and future senior unsecured indebtedness and may be redeemed prior to maturity, subject to certain limitations and premiums defined in the indenture agreements.

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

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.

2 unchanged sentences

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

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

2 unchanged sentences

The annual effective interest rate of the 2028 notes after giving effect to the amortization of financing costs is 5.2 %.

The indentures governing the senior notes require that, upon the occurrence of both a change of control and a rating decline (each as defined in the indentures), the Company offer to purchase the applicable series of notes at 101% of their principal amount.

If the Company or its restricted subsidiaries dispose of assets, under certain circumstances, the Company will be required to either invest the net cash proceeds from such asset sales in its business within a specified period of time, repay certain senior secured debt or debt of its non-guarantor subsidiaries, or make an offer to purchase a principal amount of the notes equal to the excess net cash proceeds at a purchase price of 100% of their principal amount.

The indentures governing the senior notes require that, upon the occurrence of both a change of control and a rating decline (as defined in each indenture), the Company offer to purchase the applicable series of notes at 101% of their principal amount.

If the Company or its restricted subsidiaries dispose of assets, under certain circumstances, the Company will be required to either invest the net cash proceeds from such asset sales in its business within a specified period of time, repay certain senior secured debt or debt of its non-guarantor subsidiaries, or make an offer to purchase a principal amount of such notes equal to the excess net cash proceeds at a purchase price of 100% of their principal amount.

The indentures contain covenants that, among other things, restrict the ability of the Company and its restricted subsidiaries to pay dividends or distributions, repurchase equity, prepay subordinated debt and make certain investments;

9 unchanged sentences

Other Note Payable

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, 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.

In August 2023, the Company repaid the $ 12.5 million principal amount, together with accrued interest, of a note payable that was issued as part of a transaction to acquire real estate for development.

The note was non-recourse, was secured by the underlying real estate and accrued interest of 4.0 % per annum.

Note 8 — Earnings per Share

3 unchanged sentences

(In millions, except share and per share amounts)

Net income attributable to Forestar Group Inc.

$ 178.8 $ 110.2 $ 60.8

Net income $ 166.9 $ 178.8 $ 110.2

Weighted average common shares outstanding — basic 49,986,526 49,818,132 48,901,987

1 unchanged sentence

Total weighted average shares outstanding — diluted 50,124,113 49,849,894 48,975,661

Basic net income per common share attributable to Forestar Group Inc.

$ 3.59 $ 2.25 $ 1.26

Diluted net income per common share attributable to Forestar Group Inc.

$ 3.59 $ 2.25 $ 1.26

Basic net income per common share $ 3.34 $ 3.59 $ 2.25

Diluted net income per common share $ 3.33 $ 3.59 $ 2.25

FORESTAR GROUP INC.

5 unchanged sentences

(In millions)

Current tax expense (benefit):

Current tax expense:

Federal $ 33.9 $ 38.3 $ 14.3

12 unchanged sentences

Valuation allowance ( 0.1 ) ( 0.1 ) —

Tax benefits previously unrecognized — — ( 2.0 )

Non-controlling interests — — ( 0.3 )

Tax rate benefit in carryback years — — ( 1.0 )

Other 0.4 0.3 0.3

Effective tax rate 24.7 % 24.2 % 24.6 %

The effective tax rate for fiscal 2020 includes a tax benefit of $ 2.3 million related to the net operating loss ("NOL") carryback provisions of the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"), which allowed the Company to carryback a portion of its fiscal 2018 NOL.

The carryback provisions resulted in the recognition of previously unrecognized tax benefits and the revaluation of deferred tax assets due to the utilization of NOLs at a higher tax rate in the carryback period.

The 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.

The effective tax rate for all years includes an expense for state income taxes and nondeductible expenses.

FORESTAR GROUP INC.

28 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:

Year Ended September 30,

2022 2021 2020

(In millions)

Unrecognized tax benefits, beginning of year $ — $ — $ 1.6

Decrease for tax positions taken in prior years — — ( 1.6 )

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

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.

In fiscal years 2022, 2021 and 2020, no significant interest related to unrecognized tax benefits was recognized.

At September 30, 2022, there were no accrued interest or penalties.

The Company had no unrecognized tax benefits at September 30, 2023, 2022 and 2021.

Note 10 — Stockholders' Equity

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.

In fiscal 2023, there were no shares of common stock issued under the Company's at-the-market equity offering program.

At September 30, 2023, $ 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.

FORESTAR GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 $ 0.8 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.

The Company recorded expense of $ 1.0 million, $ 0.8 million and $ 0.6 million for matching contributions in fiscal 2023, 2022 and 2021, respectively, which is included in selling, general and administrative expense in the Company's consolidated statements of operations.

Employee Stock Purchase Plan

In October 2022, the Company’s Board of Directors adopted and, in January 2023, the Company’s shareholders approved, the 2022 Employee Stock Purchase Plan (“ESPP”).

The ESPP allows eligible employees the opportunity to purchase common stock of the Company at a discount at 6-month intervals through accumulated payroll deductions.

Eligible employees purchase common stock of the Company during a purchase period at a discounted price of 85 % of the fair market value of the stock on the designated dates of purchase.

The price to eligible employees may be further discounted depending on the average fair market value of the stock during the period and certain other criteria.

Under the terms of the plan, the total fair market value of common stock that an eligible employee may purchase each year is limited to the lesser of 15 % of the employee’s annual compensation or $ 25,000 .

The aggregate number of shares of the Company's stock reserved for issuance under the plan is 2.5 million.

Our inaugural offering period under the ESPP is July 1, 2023 to December 31, 2023.

Through September 30, 2023, we had not yet issued any shares under the ESPP.

Restricted Stock Units (RSUs)

2 unchanged sentences

RSU equity awards represent the contingent right to receive one share of the Company’s common stock per RSU if the vesting conditions and/or performance criteria are satisfied and have no voting rights during the vesting period.

FORESTAR GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During fiscal 2023, 2022 and 2021, 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 885,094 $ 16.63 621,951 $ 18.94 387,154 $ 20.70

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.

The total fair value of shares vested on the vesting date was $ 3.5 million, $ 2.5 million and $ 1.6 million during fiscal 2023, 2022 and 2021, respectively.

Total stock-based compensation expense related to the Company's restricted stock units for fiscal 2023, 2022 and 2021 was $ 4.3 million, $ 3.3 million and $ 2.6 million, respectively.

2 unchanged sentences

This expense is expected to be recognized over a weighted average period of 2.9 years.

FORESTAR GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 12 — Commitments and Contingencies

11 unchanged sentences

At September 30, 2023, the Company had total deposits of $ 7.0 million related to contracts to purchase land with a total remaining purchase price of approximately $ 427.1 million.

The majority of land and lots under contract are currently expected to be purchased within two years.

The majority of land and lots under contract are currently expected to be purchased within three years .

None of the land purchase contracts were subject to specific performance provisions at September 30, 2023.

FORESTAR GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Other Commitments

1 unchanged sentence

In addition, the Company has various obligations under other office space and equipment leases of less than one year.

Rent expense for facilities and equipment was $ 2.5 million in fiscal 2022, $ 1.7 million in fiscal 2021 and $ 1.1 million in fiscal 2020.

Rent expense for facilities and equipment was $ 3.1 million, $ 2.5 million and $ 1.7 million in fiscal 2023, 2022 and 2021, respectively.

Future minimum rental commitments, by fiscal year, under non-cancelable operating leases having an initial or remaining term in excess of one year are:

4 unchanged sentences

2028 — $ 0.6 million;

and none thereafter.

and $ 0.1 million thereafter.

Note 13 — Related Party Transactions

10 unchanged sentences

Horton $ 1.7 million, $ 0.7 million and $ 0.5 million in fiscal 2023, 2022 and 2021, respectively, for its tax expense generated in fiscal 2022, 2021 and 2020.

FORESTAR GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

6 unchanged sentences

Horton 14,400 17,800

Residential lots subject to right of first offer with D.R.

Horton 18,900 18,200

Owned lots subject to right of first offer with D.R.

Horton based on executed purchase and sale agreements 17,000 18,900

Earnest money deposits from D.R.

Horton for lots under contract $ 117.1 $ 130.1

Earnest money notes from D.R.

Horton for lots under contract $ — $ 0.7

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

Horton $ 1,319.2 $ 1,389.7

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.

During fiscal 2023, 2022 and 2021, the Company's residential lot sales totaled 14,040, 17,691 and 15,915 and lot sales revenues were $ 1.3 billion, $ 1.5 billion and $ 1.3 billion.

Lot and land sales to D.R.

7 unchanged sentences

Horton $ 1,094.7 $ 1,230.0 $ 1,212.1

Change in contract liabilities on lot sales to D.R.

Horton — $ 1.8 $ ( 5.6 )

Tract acres sold to D.R.

2 unchanged sentences

Horton $ 114.1 $ — $ 25.9

FORESTAR GROUP INC.

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 in fiscal 2020.

During fiscal 2023, 2022 and 2021, the Company reimbursed D.R.

4 unchanged sentences

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

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.

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.

At September 30, 2022 and 2021, accrued expenses and other liabilities on the Company's consolidated balance sheets included $ 3.2 million and $ 6.7 million owed to D.R.

At September 30, 2023 and 2022, 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.

At September 30, 2022, accrued expenses and other liabilities on the Company's consolidated balance sheets included $ 3.2 million owed to D.R.

Horton for any accrued and unpaid shared service charges, land purchase contract deposits and due diligence and other development cost reimbursements.

29 unchanged sentences

(c) The fair values of the Company's other note payable approximates its carrying value due to its short-term nature and is classified as Level 3 within the fair value hierarchy.

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

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