What changed in this filing

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Item 1. Financial Statements

2024-01-24 compared with 2023-07-21 · 87 added, 129 removed, 294 unchanged (42% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

June 30, 2023 September 30, 2022

December 31, 2023 September 30, 2023

(In millions, except share data)

13 unchanged sentences

Commitments and contingencies (Note 11)

Common stock, par value $ 1.00 per share, 200,000,000 authorized shares,

49,903,713 and 49,761,480 shares issued and outstanding

at June 30, 2023 and September 30, 2022, respectively

Common stock, par value $ 1.00 per share, 200,000,000 authorized shares, 49,909,713 and 49,903,713 shares issued and outstanding

at December 31, 2023 and September 30, 2023, respectively

Additional paid-in capital 644.9 644.2

7 unchanged sentences

CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended June 30, Nine Months Ended June 30,

2023 2022 2023 2022

Three Months Ended December 31,

(In millions, except per share amounts)

2 unchanged sentences

Selling, general and administrative expense 28.0 22.9

Equity in earnings of unconsolidated ventures — — — ( 1.1 )

Gain on sale of assets — ( 1.6 )

22 unchanged sentences

$ 49.9 $ 644.9 $ 713.0 $ 1.0 $ 1,408.8

— — 26.9 — 26.9

Stock issued under employee benefit plans ( 125,154 shares)

0.1 — — — 0.1

Cash paid for shares withheld for taxes

— ( 0.7 ) — — ( 0.7 )

Stock-based compensation expense

— 1.9 — — 1.9

Balances at March 31, 2023 ( 49,897,709 shares)

$ 49.9 $ 642.3 $ 555.6 $ 1.0 $ 1,248.8

— — 46.8 — 46.8

Stock issued under employee benefit plans ( 6,004 shares)

Stock-based compensation expense

— 0.9 — — 0.9

Balances at June 30, 2023 ( 49,903,713 shares)

$ 49.9 $ 643.2 $ 602.4 $ 1.0 $ 1,296.5

Common Stock Additional Paid-in Capital Retained Earnings Non-controlling Interests Total Equity

3 unchanged sentences

— — 20.8 — 20.8

Issuance of common stock ( 84,547 shares)

0.1 1.6 — — 1.7

Stock issued under employee benefit plans ( 11,075 shares)

5 unchanged sentences

$ 49.8 $ 641.1 $ 528.7 $ 1.0 $ 1,220.6

— — 47.8 — 47.8

Stock issued under employee benefit plans ( 62,576 shares)

Cash paid for shares withheld for taxes

— ( 0.4 ) — — ( 0.4 )

Stock-based compensation expense

— 1.6 — — 1.6

Balances at March 31, 2022 ( 49,738,344 shares)

$ 49.7 $ 639.3 $ 417.4 $ 1.0 $ 1,107.4

— — 39.7 — 39.7

Stock issued under employee benefit plans ( 21,136 shares)

0.1 — — — 0.1

Cash paid for shares withheld for taxes

— ( 0.1 ) — — ( 0.1 )

Stock-based compensation expense

— 0.8 — — 0.8

Balances at June 30, 2022 ( 49,759,480 shares)

$ 49.8 $ 640.0 $ 457.1 $ 1.0 $ 1,147.9

See accompanying notes to consolidated financial statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended June 30,

Three Months Ended December 31,

(In millions)

3 unchanged sentences

Deferred income taxes ( 0.5 ) ( 2.2 )

Equity in earnings of unconsolidated ventures — ( 1.1 )

Stock-based compensation expense 0.9 0.6

2 unchanged sentences

Changes in operating assets and liabilities:

Decrease (increase) in real estate

87.7 ( 170.3 )

Increase in other assets

Increase in real estate

( 209.8 ) ( 49.9 )

(Decrease) increase in accounts payable and other accrued liabilities

(Increase) decrease in other assets

Decrease in accounts payable and other accrued liabilities

( 0.9 ) ( 8.6 )

(Decrease) increase in accrued development costs

Decrease in earnest money deposits on sales contracts

Decrease in accrued development costs

( 4.2 ) ( 24.3 )

Net cash provided by (used in) operating activities 136.2 ( 10.2 )

Increase in earnest money deposits on sales contracts

Net cash used in operating activities ( 156.7 ) ( 49.8 )

INVESTING ACTIVITIES

Expenditures for property, equipment, software and other ( 0.2 ) ( 0.1 )

Return of investment in unconsolidated ventures — 1.6

Proceeds from sale of assets — 1.6

Net cash provided by investing activities 0.8 1.6

Net cash (used in) provided by investing activities ( 0.2 ) 1.5

FINANCING ACTIVITIES

Issuance of common stock — 1.7

Cash paid for shares withheld for taxes ( 0.2 ) ( 0.1 )

Net cash (used in) provided by financing activities ( 0.8 ) 1.3

Increase (decrease) in cash and cash equivalents 136.2 ( 7.3 )

Net cash used in financing activities ( 0.2 ) ( 0.1 )

Decrease in cash and cash equivalents ( 157.1 ) ( 48.4 )

Cash and cash equivalents at beginning of period 616.0 264.8

Cash and cash equivalents at end of period $ 458.9 $ 216.4

SUPPLEMENTAL DISCLOSURES OF NON-CASH ACTIVITIES

Note payable issued for real estate $ 9.9 $ —

See accompanying notes to consolidated financial statements.

20 unchanged sentences

Horton is considered a related party of Forestar under GAAP.

As of June 30, 2023, D.R.

As of December 31, 2023, D.R.

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

4 unchanged sentences

Pending Accounting Standards

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.

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.

The ASU expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss.

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 guidance is effective for the Company beginning October 1, 2024, 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.

The Company is currently evaluating the impact of this guidance on its consolidated financial statements and related disclosures.

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 guidance is effective for the Company beginning October 1, 2025, with early adoption permitted.

The Company is currently evaluating the impact of this guidance on its consolidated financial statements and related disclosures.

Note 2 — Segment Information

4 unchanged sentences

Real estate consists of:

June 30, 2023 September 30, 2022

December 31, 2023 September 30, 2023

(In millions)

2 unchanged sentences

$ 2,009.8 $ 1,790.3

In the nine months ended June 30, 2023, the Company invested $ 71.0 million for the acquisition of residential real estate and $ 566.3 million for the development of residential real estate.

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

In the three months ended December 31, 2023, the Company invested $ 228.0 million for the acquisition of residential real estate and $ 226.5 million for the development of residential real estate.

At December 31, 2023 and September 30, 2023, 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, no impairment charges were recorded during the three months ended June 30, 2023.

In the nine months ended June 30, 2023 and 2022, impairment charges totaled $ 19.4 million and $ 3.8 million.

In the three and nine months ended June 30, 2023, 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 $ 0.9 million and $ 4.2 million, respectively, compared to $ 1.0 million and $ 3.2 million in the prior year periods.

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

As a result of this process, no impairment charges were recorded for either period presented in the consolidated statements of operations.

In the three months ended December 31, 2023 and 2022, 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 $ 0.2 million and $ 2.4 million, respectively.

These land option charges are included in cost of sales in the consolidated statements of operations.

Note 4 — Revenues

Revenues consist of:

Three Months Ended June 30, Nine Months Ended June 30,

2023 2022 2023 2022

Three Months Ended December 31,

(In millions)

3 unchanged sentences

$ 305.9 $ 216.7

In the three and nine months ended June 30, 2023, the Company recognized $ 10.3 million and $ 24.6 million of revenues as a result of its progress towards completion of its remaining unsatisfied performance obligations on deferred development projects, compared to $ 7.9 million and $ 20.4 million in the prior year periods.

In the three months ended December 31, 2023 and 2022, the Company recognized $ 1.3 million and $ 6.7 million, respectively, in revenues as a result of its progress towards completion of its remaining unsatisfied performance obligations on deferred development projects.

Note 5 — Capitalized Interest

The Company capitalizes interest costs to real estate 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.

Capitalized interest is charged to cost of sales as the related real estate is sold.

During periods in which the Company’s active real estate is lower than its debt level, a portion of the interest incurred is reflected as interest expense in the period incurred.

In the first nine months of fiscal 2023 and fiscal 2022, the Company’s active real estate exceeded its debt level, and all interest incurred was capitalized to real estate.

The following table summarizes the Company’s interest costs incurred, capitalized and expensed in the three and nine months ended June 30, 2023 and 2022.

Three Months Ended June 30, Nine Months Ended June 30,

2023 2022 2023 2022

In the first three months of fiscal 2024 and fiscal 2023, the Company’s active real estate exceeded its debt level, and all interest incurred was capitalized to real estate.

The following table summarizes the Company’s interest costs incurred, capitalized and expensed in the three months ended December 31, 2023 and 2022.

Three Months Ended December 31,

(In millions)

4 unchanged sentences

Note 6 — Other Assets, Accrued Expenses and Other Liabilities

The Company's other assets at June 30, 2023 and September 30, 2022 were as follows:

June 30, 2023 September 30, 2022

The Company's other assets at December 31, 2023 and September 30, 2023 were as follows:

December 31, 2023 September 30, 2023

(In millions)

5 unchanged sentences

$ 58.8 $ 58.0

The Company's accrued expenses and other liabilities at June 30, 2023 and September 30, 2022 were as follows:

June 30, 2023 September 30, 2022

The Company's accrued expenses and other liabilities at December 31, 2023 and September 30, 2023 were as follows:

December 31, 2023 September 30, 2023

(In millions)

9 unchanged sentences

$ 63.4 $ 61.2

Contract liabilities at June 30, 2023 and September 30, 2022 include $ 4.5 million and $ 12.0 million, respectively, related to the Company's remaining unsatisfied performance obligations on deferred development lot sales.

Contract liabilities at December 31, 2023 and September 30, 2023 include $ 3.4 million and $ 3.5 million, respectively, related to the Company's remaining unsatisfied performance obligations on deferred development lot sales.

Note 7 — Debt

The Company's notes payable at their carrying amounts consist of the following:

June 30, 2023 September 30, 2022

December 31, 2023 September 30, 2023

(In millions)

5 unchanged sentences

______________

(1) Unamortized debt issuance costs that were deducted from the carrying amounts of the senior notes totaled $ 5.3 million and $ 6.5 million at June 30, 2023 and September 30, 2022, respectively.

(1) Unamortized debt issuance costs that were deducted from the carrying amounts of the senior notes totaled $ 4.6 million and $ 5.0 million at December 31, 2023 and September 30, 2023, respectively.

Bank Credit Facility

4 unchanged sentences

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

At June 30, 2023, there were no borrowings outstanding and $ 29.8 million of letters of credit issued under the revolving credit facility, resulting in available capacity of $ 380.2 million.

At December 31, 2023, there were no borrowings outstanding and $ 24.3 million of letters of credit issued under the revolving credit facility, resulting in available capacity of $ 385.7 million.

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.

3 unchanged sentences

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

At December 31, 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 of 1933, as amended (the "Securities Act").

17 unchanged sentences

and allow to exist certain restrictions on the ability of subsidiaries to pay dividends or make other payments.

At June 30, 2023, the Company was in compliance with all of the limitations and restrictions associated with its senior note obligations.

At December 31, 2023, the Company was in compliance with all of the limitations and restrictions associated with its senior note obligations.

Effective April 30, 2020, the Board of Directors authorized the repurchase of up to $ 30 million of the Company’s debt securities.

The authorization has no expiration date.

All of the $ 30 million authorization was remaining at June 30, 2023.

All of the $ 30 million authorization was remaining at December 31, 2023.

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, accrues interest at 4.0 % per annum and matures in October 2023.

In December 2023, the Company 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.

Note 8 — Earnings per Share

The computations of basic and diluted earnings per share are as follows:

Three Months Ended June 30, Nine Months Ended June 30,

2023 2022 2023 2022

Three Months Ended December 31,

(In millions, except share and per share amounts)

6 unchanged sentences

Note 9 — Income Taxes

The Company’s income tax expense for the three and nine months ended June 30, 2023 was $ 15.6 million and $ 31.7 million compared to $ 13.0 million and $ 41.4 million in the prior year periods.

The effective tax rate was 25.0 % and 25.1 % for the three and nine months ended June 30, 2023 compared to 24.7 % and 24.4 % in the prior year periods.

The effective tax rate for all periods included an expense for state income taxes and nondeductible expenses.

At June 30, 2023, the Company had deferred tax liabilities, net of deferred tax assets, of $ 33.2 million.

The Company’s income tax expense for the three months ended December 31, 2023 was $ 13.0 million compared to $ 7.1 million in the prior year period.

The effective tax rate for both periods was 25.4 % and included an expense for state income taxes and nondeductible expenses.

At December 31, 2023, the Company had deferred tax liabilities, net of deferred tax assets , of $ 49.3 million.

The deferred tax assets were partially offset by a valuation allowance of $ 0.9 million, resulting in a net deferred tax liability of $ 50.2 million.

7 unchanged sentences

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.

The Company issued no shares of common stock under its at-the-market equity offering program in the nine months ended June 30, 2023.

At June 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.

In the three months ended December 31, 2023, there were no shares of common stock issued under the Company's at-the-market equity offering program.

At December 31, 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.

Restricted Stock Units (RSUs)

3 unchanged sentences

The RSUs have no voting rights until vested.

In the nine months ended June 30, 2023, a total of 512,545 time-based RSUs were granted.

The weighted average grant date fair value of these equity awards was $ 14.76 per unit, and they vest annually in equal installments over periods of three to five years.

Total stock-based compensation expense related to the Company's RSUs for the three and nine months ended June 30, 2023 was $ 0.9 million and $ 3.4 million compared to $ 0.8 million and $ 2.8 million in the prior year periods.

In the three months ended December 31, 2023, a total of 24,000 time-based RSUs were granted.

The weighted average grant date fair value of these equity awards was $ 23.47 per unit, and they vest annually in equal installments over three years.

Total stock-based compensation expense related to the Company's RSUs for the three months ended December 31, 2023 was $ 0.9 million compared to $ 0.6 million in the prior year period.

Note 11 — Commitments and Contingencies

1 unchanged sentence

In support of the Company's residential lot development business, it issues letters of credit under the revolving credit facility and has a surety bond program that provides financial assurance to beneficiaries related to the execution and performance of certain development obligations.

At June 30, 2023, the Company had outstanding letters of credit of $ 29.8 million under the revolving credit facility and surety bonds of $ 616.3 million issued by third parties to secure performance under various contracts.

At December 31, 2023, the Company had outstanding letters of credit of $ 24.3 million under the revolving credit facility and surety bonds of $ 669.1 million issued by third parties to secure performance under various contracts.

The Company expects that its performance obligations secured by these letters of credit and bonds will generally be completed in the ordinary course of business and in accordance with the applicable contractual terms.

6 unchanged sentences

The Company enters into land purchase contracts to acquire land for the development of residential lots.

At June 30, 2023, the Company had total deposits of $ 6.1 million related to contracts to purchase land with a total remaining purchase price of approximately $ 295.7 million.

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

At June 30, 2023, none of the land purchase contracts were subject to specific performance provisions.

Under these contracts, the Company will fund a stated deposit in consideration for the right, but not the obligation, to purchase land or lots at a future point in time with predetermined terms.

Under the terms of many of the purchase contracts, the deposits are not refundable in the event the Company elects to terminate the contract.

Land purchase contract deposits and capitalized pre-acquisition costs are expensed to inventory and land option charges when the Company believes it is probable that it will not acquire the property under contract and will not be able to recover these costs through other means.

At December 31, 2023, the Company had total deposits of $ 8.2 million related to contracts to purchase land with a total remaining purchase price of approximately $ 483.9 million.

At December 31, 2023, none of the land purchase contracts were subject to specific performance provisions.

Note 12 — Related Party Transactions

2 unchanged sentences

Horton provides the Company with certain administrative, compliance, operational and procurement services.

In the nine months ended June 30, 2023 and 2022, selling, general and administrative expense in the consolidated statements of operations included $ 2.8 million and $ 3.1 million for these shared services, $ 6.6 million and $ 5.5 million reimbursed to D.R.

In the three months ended December 31, 2023 and 2022, selling, general and administrative expense in the consolidated statements of operations included $ 1.3 million and $ 0.9 million for these shared services, $ 2.4 million and $ 2.3 million reimbursed to D.R.

Horton for the cost of health insurance and other employee benefits and $ 0.3 million and $ 0.6 million for other corporate and administrative expenses paid by D.R.

2 unchanged sentences

Horton, both companies identify land development opportunities to expand Forestar's portfolio of assets.

At June 30, 2023 and September 30, 2022, the Company owned approximately 53,700 and 61,800 residential lots, respectively, of which D.R.

At December 31, 2023 and September 30, 2023, the Company owned approximately 55,400 and 52,400 residential lots, respectively, of which D.R.

Horton had the following involvement.

June 30, 2023 September 30, 2022

December 31, 2023 September 30, 2023

(Dollars in millions)

8 unchanged sentences

Lot and land sales to D.R.

Horton in the three and nine months ended June 30, 2023 and 2022 were as follows:

Three Months Ended June 30, Nine Months Ended June 30,

2023 2022 2023 2022

Horton in the three months ended December 31, 2023 and 2022 were as follows:

Three Months Ended December 31,

(Dollars in millions)

5 unchanged sentences

Horton $ 0.7 $ 2.7

Tract acres sold to D.R.

Horton 45 — 424 —

Tract sales revenues from sales to D.R.

Horton $ 22.8 $ — $ 55.3 $ —

In the three and nine months ended June 30, 2023, the Company reimbursed D.R.

Horton approximately $ 6.7 million and $ 17.1 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 compared to reimbursements of $ 18.3 million and $ 56.1 million in the prior year periods.

In the nine months ended June 30, 2023, the Company reimbursed D.R.

Horton approximately $ 0.1 million for previously paid earnest money related to those land purchase contracts and in the three and nine months ended June 30, 2022, the Company reimbursed D.R.

Horton approximately $ 4.2 million and $ 9.6 million for previously paid earnest money related to those land purchase contracts.

In the three and nine months ended June 30, 2023, the Company paid D.R.

Horton $ 0.1 million and $ 0.6 million for land development services compared to $ 0.4 million and $ 2.0 million for these services in the prior year periods.

In the three months ended December 31, 2023, the Company reimbursed D.R.

Horton approximately $ 4.6 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 compared to reimbursements of $ 4.7 million in the prior year period.

In the three months ended December 31, 2023, the Company reimbursed D.R.

Horton approximately $13.3 million for previously paid earnest money related to those land purchase contracts compared to reimbursements of $ 0.1 million in the prior year period.

In the three months ended December 31, 2023 and 2022, the Company paid D.R.

Horton $ 0.5 million and $ 0.2 million, respectively, for land development services.

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

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

At December 31, 2023 and September 30, 2023, 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 June 30, 2023 and September 30, 2022, accrued expenses and other liabilities on the Company's consolidated balance sheets included $ 1.4 million and $ 3.2 million owed to D.R.

At December 31, 2023 and September 30, 2023, accrued expenses and other liabilities on the Company's consolidated balance sheets included $ 3.5 million and $ 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.

At June 30, 2023, other assets on the Company's consolidated balance sheet included $2.2 million due from D.R.

Horton related to tract sales to D.R.

Horton in the nine months ended June 30, 2023.

In the three months ended December 31, 2023, the Company acquired a tract of residential real estate from Double R DevCo, LLC (“R&R”) for $11.3 million and simultaneously entered into a finished lot purchase agreement with D.R.

The tract was originally under contract with D.R.

The Company independently underwrote the transaction and chose to close in place of D.R.

R&R is owned and controlled by Ryan and Reagan Horton, the adult sons of Donald R.

Horton, Chairman of D.R.

Note 13 — Fair Value Measurements

8 unchanged sentences

The Company elected not to use the fair value option for cash and cash equivalents and debt.

For the financial assets and liabilities that the Company does not reflect at fair value, the following tables present both their respective carrying value and fair value at June 30, 2023 and September 30, 2022.

Fair Value at June 30, 2023

For the financial assets and liabilities that the Company does not reflect at fair value, the following tables present both their respective carrying value and fair value at December 31, 2023 and September 30, 2023.

Fair Value at December 31, 2023

Carrying Value Level 1 Level 2 Level 3 Total

11 unchanged sentences

(a) The fair values of cash and cash equivalents approximate their carrying values due to their short-term nature and are classified as Level 1 within the fair value hierarchy.

(b) At June 30, 2023 and September 30, 2022, debt primarily consisted of the Company's senior notes.

(b) At December 31, 2023 and September 30, 2023, debt primarily consisted of the Company's senior notes.

The fair value of the senior notes is determined based on quoted market prices in markets that are not active, which is classified as Level 2 within the fair value hierarchy.

(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.

(c) The fair value 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.

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-Q

Item 1. Financial Statements