Forestar Group Inc. 10-Q

Item 3. Quantitative and Qualitative Disclosures About Market Risk. Interest Rate Risk We are subject to interest rate risk on our senior debt, revolving credit facility and our other note payable. We monitor our exposure to changes in interest rates and utilize both fixed and variable rate debt. For fixed rate debt, changes in interest rates generally affect the fair value of the debt instrument, but not our earnings or cash flows. Conversely, for variable rate debt, changes in interest rates generally do not impact the fair value of the debt instrument, but may affect our future earnings and cash flows. Except in very limited circumstances, we do not have an obligation to prepay fixed-rate debt prior to maturity and, as a result, interest rate risk and changes in fair value would not have a significant impact on our cash flows related to our fixed-rate debt until such time as we are required to refinance, repurchase or repay such debt. At December 31, 2024, our fixed rate debt consisted of $400 million principal amount of our 3.85% senior notes due May 2026, $300 million principal amount of our 5.0% senior notes due March 2028 and $9.9 million principal amount of our 4.0% other note payable due in December 2025. Our variable rate debt consisted of $100 million of outstanding borrowings on our $640 million senior unsecured revolving credit facility at December 31, 2024. The average annual interest rate on our outstanding borrowings of $100 million on our senior unsecured revolving credit facility at December 31, 2024 was 5.9%.