What changed in this filing

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Item 1. Financial Statements

2026-04-23 compared with 2026-01-22 · 99 added, 72 removed, 353 unchanged (33% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

December 31, 2025 September 30, 2025

March 31, 2026 September 30, 2025

(In millions, except share data)

14 unchanged sentences

51,008,733 and 50,833,171 shares issued and outstanding

at December 31, 2025 and September 30, 2025, respectively

at March 31, 2026 and September 30, 2025, respectively

Additional paid-in capital 674.2 671.0

7 unchanged sentences

CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended December 31,

Three Months Ended March 31, Six Months Ended March 31,

2026 2025 2026 2025

(In millions, except per share amounts)

4 unchanged sentences

Interest and other income ( 1.6 ) ( 1.0 ) ( 3.9 ) ( 3.3 )

Loss on extinguishment of debt — 1.1 — 1.1

Income before income taxes 43.9 40.7 64.8 62.6

1 unchanged sentence

Net income 32.2 31.6 47.7 48.1

Net income attributable to noncontrolling interests

Net income attributable to Forestar Group Inc.

$ 32.1 $ 31.6 $ 47.5 $ 48.1

Basic net income per common share $ 0.63 $ 0.62 $ 0.93 $ 0.95

18 unchanged sentences

$ 50.9 $ 673.6 $ 1,061.5 $ 1.0 $ 1,787.0

— — 32.1 0.1 32.2

Stock issued under employee benefit plans ( 123,408 shares)

0.1 0.2 — — 0.3

Cash paid for shares withheld for taxes

— ( 1.5 ) — — ( 1.5 )

Stock-based compensation expense

— 1.9 — — 1.9

Balances at March 31, 2026 ( 51,008,733 shares)

$ 51.0 $ 674.2 $ 1,093.6 $ 1.1 $ 1,819.9

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

10 unchanged sentences

$ 50.7 $ 667.7 $ 894.7 $ 1.0 $ 1,614.1

— — 31.6 — 31.6

Stock issued under employee benefit plans ( 153,854 shares)

0.1 — — — 0.1

Cash paid for shares withheld for taxes

— ( 1.6 ) — — ( 1.6 )

Stock-based compensation expense

— 1.7 — — 1.7

Balances at March 31, 2025 ( 50,823,800 shares)

$ 50.8 $ 667.8 $ 926.3 $ 1.0 $ 1,645.9

See accompanying notes to consolidated financial statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended December 31,

Six Months Ended March 31,

(In millions)

6 unchanged sentences

Impairments and land option charges 7.1 2.0

Loss on extinguishment of debt — 1.1

Changes in operating assets and liabilities:

1 unchanged sentence

( 67.1 ) ( 495.2 )

(Increase) decrease in other assets

Increase (decrease) in accounts payable and other accrued liabilities

Decrease (increase) in other assets

11.4 ( 16.8 )

Decrease in accounts payable and other accrued liabilities

( 6.3 ) ( 40.0 )

Decrease in accrued development costs

8 unchanged sentences

FINANCING ACTIVITIES

Borrowings under revolving credit facility — 100.0

Additions to debt — 745.0

Repayment of debt ( 9.9 ) ( 574.4 )

Deferred financing fees — ( 6.3 )

Stock issued under employee benefit plans

Cash paid for shares withheld for taxes ( 2.0 ) ( 1.6 )

13 unchanged sentences

Noncontrolling interests in consolidated pass-through entities are recognized before income taxes.

Net income attributable to noncontrolling interests is zero for all periods presented in the Company's statements of operations.

The transactions included in net income in the consolidated statements of operations are the same as those that would be presented in comprehensive income.

11 unchanged sentences

Horton is considered a related party of Forestar under GAAP.

As of December 31, 2025, D.R.

As of March 31, 2026, D.R.

Horton owned approximately 62 % of the Company's outstanding common stock.

23 unchanged sentences

Segment assets that are reported as total assets and capital expenditures are reviewed by the CODM and are presented on the consolidated balance sheets and consolidated statements of cash flows, respectively.

For the three months ended December 31, 2025 and 2024, transactions with D.R.

For the three and six months ended March 31, 2026 and 2025, transactions with D.R.

Horton accounted for more than 10% of the Company's total revenues.

3 unchanged sentences

Real estate consists of:

December 31, 2025 September 30, 2025

March 31, 2026 September 30, 2025

(In millions)

2 unchanged sentences

$ 2,709.7 $ 2,645.1

In the three months ended December 31, 2025, the Company invested $ 110.1 million for the acquisition of residential real estate and $ 304.6 million for the development of residential real estate.

At December 31, 2025 and September 30, 2025, land held for future development primarily consisted of undeveloped land which the Company has under contract to sell to D.R.

In the six months ended March 31, 2026, the Company invested $ 156.2 million for the acquisition of residential real estate and $ 537.8 million for the development of residential real estate.

At March 31, 2026 and September 30, 2025, land held for future development primarily consisted of undeveloped land which the Company has under contract 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.

1 unchanged sentence

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, 2025 and 2024, 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 $ 0.8 million and $ 1.1 million, respectively.

In the three and six months ended March 31, 2026 and 2025, 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 $ 6.3 million and $ 7.1 million, respectively, compared to $ 0.9 million and $ 2.0 million in the prior year periods.

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

1 unchanged sentence

Revenues consist of:

Three Months Ended December 31,

Three Months Ended March 31, Six Months Ended March 31,

2026 2025 2026 2025

(In millions)

6 unchanged sentences

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 three months of fiscal 2026 and fiscal 2025, 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, 2025 and 2024.

Three Months Ended December 31,

In the first six months of fiscal 2026 and fiscal 2025, 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 six months ended March 31, 2026 and 2025.

Three Months Ended March 31, Six Months Ended March 31,

2026 2025 2026 2025

(In millions)

4 unchanged sentences

Note 6 — Other Assets, Accrued Expenses and Other Liabilities

The Company's other assets at December 31, 2025 and September 30, 2025 were as follows:

December 31, 2025 September 30, 2025

The Company's other assets at March 31, 2026 and September 30, 2025 were as follows:

March 31, 2026 September 30, 2025

(In millions)

7 unchanged sentences

$ 93.0 $ 104.6

The Company's accrued expenses and other liabilities at December 31, 2025 and September 30, 2025 were as follows:

December 31, 2025 September 30, 2025

The Company's accrued expenses and other liabilities at March 31, 2026 and September 30, 2025 were as follows:

March 31, 2026 September 30, 2025

(In millions)

10 unchanged sentences

$ 79.1 $ 83.1

_____________

(1) In certain projects, the Company has entered into agreements to be reimbursed for eligible infrastructure costs from municipal districts as funds are available to the district.

The Company has pledged certain of these future reimbursements as collateral to a third party, and the third party issued bonds against this collateral.

The Company received the cash proceeds from the third-party bond issuance.

The Company has no future performance obligations related to the cash proceeds received, no obligations related to any future interest or principal payments to the third-party bondholders, and the third party has no recourse against the Company for the reimbursement of these funds.

However, under the applicable accounting rules, since the Company pledged only certain reimbursements and not the entire amount, the Company recorded a non-cash transaction to increase assets and a related liability for the amount of the unpaid balance of the third-party bonds.

The asset and liability will be reduced as the third-party bonds are repaid by the municipal district.

Note 7 — Debt

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

December 31, 2025 September 30, 2025

March 31, 2026 September 30, 2025

(In millions)

5 unchanged sentences

______________

(1) Unamortized debt issuance costs that were deducted from the carrying amounts of the senior notes totaled $ 6.8 million and $ 7.2 million at December 31, 2025 and September 30, 2025, respectively.

(1) Unamortized debt issuance costs that were deducted from the carrying amounts of the senior notes totaled $ 6.5 million and $ 7.2 million at March 31, 2026 and September 30, 2025, respectively.

Bank Credit Facility

The Company has a $ 715 million senior unsecured revolving credit facility with an uncommitted accordion feature that could increase the size of the facility to $ 1 billion, subject to certain conditions and availability of additional bank commitments.

The current capacity of the facility reflects additional bank commitments of $ 25 million and $ 50 million obtained in October 2025 and March 2026, respectively.

Of the total commitments, $ 650 million matures on December 18, 2029 and $ 65 million matures on October 28, 2026.

2 unchanged sentences

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

At December 31, 2025, there were no borrowings outstanding and $ 57.4 million of letters of credit issued under the revolving credit facility, resulting in available capacity of $ 607.6 million.

At March 31, 2026, there were no borrowings outstanding and $ 42.9 million of letters of credit issued under the revolving credit facility, resulting in available capacity of $ 672.1 million.

The revolving credit facility is guaranteed by the Company’s wholly-owned subsidiaries that are not immaterial subsidiaries and 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 December 31, 2025, the Company was in compliance with all of the covenants, limitations and restrictions of its revolving credit facility.

At March 31, 2026, 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").

2 unchanged sentences

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

Until March 1, 2026 , the 2028 notes may be redeemed at 100.833 % of their principal amount plus any accrued and unpaid interest, and the 2028 notes can be redeemed at par on or after March 1, 2026 through maturity.

The 2028 notes can be redeemed at par after March 1, 2026 through maturity.

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

16 unchanged sentences

and merge or consolidate with another company or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of the assets of the Company and its restricted subsidiaries (taken as a whole).

At December 31, 2025, the Company was in compliance with all of the limitations and restrictions associated with its senior note obligations.

At March 31, 2026, 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 December 31, 2025.

All of the $ 30 million authorization was remaining at March 31, 2026.

Other Note Payable

3 unchanged sentences

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

Three Months Ended December 31,

Three Months Ended March 31, Six Months Ended March 31,

2026 2025 2026 2025

(In millions, except share and per share amounts)

Net income $ 15.4 $ 16.5

Net income attributable to Forestar Group Inc.

$ 32.1 $ 31.6 $ 47.5 $ 48.1

Weighted average common shares outstanding — basic 51,001,796 50,795,094 50,999,492 50,807,945

4 unchanged sentences

Note 9 — Income Taxes

The Company’s income tax expense for both the three months ended December 31, 2025 and 2024 was $ 5.4 million.

The effective tax rate was 26.0 % for the three months ended December 31, 2025 compared to 24.7 % in the prior year period.

The effective tax rate for both periods included an expense for state income taxes and nondeductible expenses as well as a benefit for nontaxable income.

At December 31, 2025, the Company had deferred tax liabilities, net of deferred tax assets , of $ 86.8 million.

The Company’s income tax expense for the three and six months ended March 31, 2026 was $ 11.7 million and $ 17.1 million compared to $ 9.1 million and $ 14.5 million in the prior year periods.

The effective tax rate was 26.7 % and 26.4 % for the three and six months ended March 31, 2026 compared to 22.4 % and 23.2 % in the prior year periods.

The effective tax rate for all periods included an expense for state income taxes and nondeductible expenses and a benefit for stock-based compensation and nontaxable income.

At March 31, 2026, the Company had deferred tax liabilities, net of deferred tax assets , of $ 83.7 million.

The deferred tax assets were partially offset by a valuation allowance of $ 0.6 million, resulting in a net deferred tax liability of $ 84.3 million.

7 unchanged sentences

The Company has an effective shelf registration statement, filed with the Securities and Exchange Commission in September 2024, registering $ 750 million of equity securities, of which $ 300 million is reserved for sales under the at-the-market equity offering program that the Company entered into in November 2024.

During the three months ended December 31, 2025, the Company did not issue any shares under its at-the-market equity offering program.

At December 31, 2025, the full $ 750 million remained available for issuance under the Company's shelf registration statement, with $ 300 million reserved for sales under the at-the-market equity offering program.

During the three and six months ended March 31, 2026, the Company did not issue any shares under its at-the-market equity offering program.

At March 31, 2026, the full $ 750 million remained available for issuance under the Company's shelf registration statement, with $ 300 million reserved for sales under the at-the-market equity offering program.

Stock-Based Compensation

3 unchanged sentences

The stock units have no dividend or voting rights until vested.

In the three months ended December 31, 2025 , the Company granted 114,565 PSUs to its executive officers.

In October 2025, the Company granted 114,565 PSUs to its executive officers.

The number of units that ultimately vest depends on the achievement of four performance criteria which are (i) relative total stockholder return, (ii) return on inventory, (iii) market share goals, and (iv) book value per share, and can range from 0 % to 200 % of the number of units granted.

2 unchanged sentences

The grant date fair value of these equity awards was $ 26.06 per unit.

Compensation expense related to this grant was $ 0.2 million in the three months ended December 31, 2025, based on an estimate of the Company’s achievement of the four performance criteria, the elapsed portion of the performance period and the grant date fair value of the award.

In the three months ended December 31, 2025, a total of 321,285 RSUs were granted.

Compensation expense related to this grant was $ 0.3 million and $ 0.5 million in the three and six months ended March 31, 2026, respectively, based on an estimate of the Company’s achievement of the four performance criteria, the elapsed portion of the performance period and the grant date fair value of the award.

In the six months ended March 31, 2026, a total of 321,285 RSUs were granted.

The weighted average grant date fair value of these equity awards w as $ 27.07 p er unit, and they vest annually in equal installments over periods of three to five years.

Compensation expense related to this grant was $ 1.4 million in the three months ended December 31, 2025.

Stock-based compensation expense in the three months ended December 31, 2025 included $ 1.1 million of expense recognized for employees that were retirement eligible on the date of the grant.

Total stock-based compensation expense related to the Company's equity awards for the three months ended December 31, 2025 was $ 3.1 million compared to $ 2.6 million in the prior year period.

Compensation expense related to this grant was $ 0.4 million and $ 1.8 million i n the three and six months ended March 31, 2026, respectively.

Stock-based compensation expense in the six months ended March 31, 2026 included $ 1.1 million of expense recognized for employees that were retirement eligible on the date of the grant.

Total stock-based compensation expense related to the Company's equity awards for the three and six months ended March 31, 2026 was $ 1.9 million and $ 5.0 million, respectively, compared to $ 1.7 million and $ 4.3 million in the prior year periods.

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 December 31, 2025, the Company had outstanding letters of credit of $ 57.4 million under the revolving credit facility and surety bonds of $ 811.4 million issued by third parties to secure performance under various contracts.

At March 31, 2026, the Company had outstanding letters of credit of $ 42.9 million under the revolving credit facility and surety bonds of $ 848.4 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.

21 unchanged sentences

Land purchase contract deposits and capitalized pre-acquisition costs are expensed to cost of sales 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, 2025, the Company had total deposits of $ 34.1 million related to contracts to purchase land with a total remaining purchase price of approximately $ 695.4 million.

At March 31, 2026, the Company had total deposits of $ 28.1 million related to contracts to purchase land with a total remaining purchase price of approximately $ 524.1 million.

The majority of land and lots under contract are currently expected to be purchased within 3 years.

Non e of the land purchase contracts were subject to specific performance provisions at December 31, 2025.

Non e of the land purchase contracts were subject to specific performance provisions at March 31, 2026.

Note 12 — Related Party Transactions

2 unchanged sentences

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

In the three months ended December 31, 2025 and 2024, selling, general and administrative expense in the consolidated statements of operations included $ 1.8 million for these shared services, $ 4.2 million and $ 3.5 million reimbursed to D.R.

Horton for the cost of health insurance and other employee benefits and $ 0.5 million and $ 0.2 million for other corporate and administrative expenses paid by D.R.

In the six months ended March 31, 2026 and 2025, selling, general and administrative expense in the consolidated statements of operations for both periods included $ 3.6 million for these shared services, $ 7.7 million and $ 6.9 million, respectively, reimbursed to D.R.

Horton for the cost of health insurance and other employee benefits and $ 0.8 million and $ 0.5 million, respectively, for other corporate and administrative expenses paid by D.R.

Horton on behalf of the Company.

1 unchanged sentence

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

At December 31, 2025 and September 30, 2025, the Company owned approximately 65,600 and 65,100 residential lots, respectively, of which D.R.

At March 31, 2026 and September 30, 2025, the Company owned approximately 63,500 and 65,100 residential lots, respectively, with which D.R.

Horton had the following involvement.

December 31, 2025 September 30, 2025

March 31, 2026 September 30, 2025

(Dollars in millions)

8 unchanged sentences

Lot and land sales to D.R.

Horton in the three months ended December 31, 2025 and 2024 were as follows:

Three Months Ended December 31,

Horton in the three and six months ended March 31, 2026 and 2025 were as follows:

Three Months Ended March 31, Six Months Ended March 31,

2026 2025 2026 2025

(Dollars in millions)

4 unchanged sentences

Decrease in contract liabilities

$ — $ — $ — $ 1.2

Tract sales and other revenues from D.R.

In the three months ended December 31, 2025, the Company reimbursed D.R.

Horton approximately $ 7.8 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 $ 4.2 million in the prior year period.

In the three months ended December 31, 2025, the Company reimbursed D.R.

Horton approximately $ 1.7 million for previously paid earnest money related to those land purchase contracts compared to reimbursements of $ 10.0 million in the prior year period.

In the three months ended December 31, 2024, the Company purchased $ 2.1 million of water rights from D.R.

In the three months ended December 31, 2025 and 2024, the Company paid D.R.

Horton $ 0.2 million and $ 0.1 million for land development services.

$ 14.8 $ 2.0 $ 20.2 $ 4.0

In the three and six months ended March 31, 2026, the Company reimbursed D.R.

Horton approximately $ 12.2 million and $ 20.1 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 $ 4.0 million and $ 8.2 million in the prior year periods.

In the three and six months ended March 31, 2026, the Company reimbursed D.R.

Horton approximately $ 1.8 million and $ 3.5 million for previously paid earnest money related to those land purchase contracts compared to reimbursements of $ 4.6 million and $ 14.6 million in the prior year periods.

In the six months ended March 31, 2025, the Company purchased $ 2.1 million of water rights from D.R.

In the three and six months ended March 31, 2026, the Company paid D.R.

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

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

At December 31, 2025 and September 30, 2025, land held for future development primarily consisted of undeveloped land which the Company has under contract to sell to D.R.

At March 31, 2026 and September 30, 2025, land held for future development primarily consisted of undeveloped land which the Company has under contract 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 December 31, 2025, accrued expenses and other liabilities on the Company's consolidated balance sheets included $ 6.3 million owed to D.R.

At March 31, 2026, accrued expenses and other liabilities on the Company's consolidated balance sheets included $ 5.2 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 compared to $ 2.2 million at September 30, 2025.

9 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 December 31, 2025 and September 30, 2025.

Fair Value at December 31, 2025

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 March 31, 2026 and September 30, 2025.

Fair Value at March 31, 2026

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 December 31, 2025 and September 30, 2025, debt primarily consisted of the Company's senior notes.

(b) At March 31, 2026 and September 30, 2025, 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.

1 unchanged sentence

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