Related Party Transactions (Notes)

9 Months Ended

Jun. 30, 2019

Related Party Transactions [Abstract]

Compensation Related Costs, General [Text Block]

Stockholders' Equity and Stock Based Compensation

Stockholders' Equity

The Company has an effective shelf registration statement filed with the Securities and Exchange Commission (SEC) on September 24, 2018, which became effective on October 4, 2018, registering $500 million of equity securities.

Restricted Stock Units (RSUs)

The Company’s Stock Incentive Plan provides for the granting of stock options and restricted stock units to executive officers, other key employees and non-management directors. Restricted stock unit awards may be based on performance (performance-based) or on service over a requisite time period (time-based). Performance-based and time-based 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. The RSUs have no voting rights until vested.

During the three months ended June 30, 2019, a total of 149,400 time-based RSUs were granted. The weighted average grant date fair value of these equity awards was $20.24 per unit, and they vest annually in equal installments over periods of three to five years. Stock based compensation expense for the three and nine months ended June 30, 2019 was $0.9 million and $1.1 million and in both periods includes $0.6 million of stock based compensation expense related to employees that were retirement eligible on the date of grant.

Related Party Transactions Disclosure [Text Block]

Related Party Transactions

On October 6, 2017, the Company entered into a Shared Services Agreement with D.R. Horton whereby D.R. Horton provides the Company with certain administrative, compliance, operational and procurement services. During the nine months ended June 30, 2019 and 2018, the Company paid D.R. Horton $1.6 million and $0.6 million for these shared services and $1.1 million and $0.6 million for the cost of health insurance and other employee benefits. These expenses are included within selling, general and administrative expense in the consolidated statement of operations.

Under the terms of the Master Supply Agreement with D.R. Horton, both companies identify land development opportunities to expand Forestar's portfolio of assets. At June 30, 2019, the Company owned or controlled through option purchase contracts approximately 37,400 residential lots, of which approximately 13,900 are under contract to sell to D.R. Horton. Additionally, D.R. Horton has the right of first offer on approximately 10,200 of these residential lots based on executed purchase and sale agreements. At June 30, 2019 and September 30, 2018, the Company had earnest money deposit liabilities of $83.7 million and $45.3 million related to earnest money deposits from land and lot option purchase contracts with D.R. Horton. In the three months ended June 30, 2019, the Company sold 995 residential lots to D.R. Horton for $75.2 million. In the nine months ended June 30, 2019, the Company sold 1,903 residential lots to D.R. Horton for $145.4 million. In the three months ended June 30, 2018, the Company sold 141 residential lots to D.R. Horton for $10.1 million and 79 residential tract acres to D.R. Horton for $2.0 million. In the nine months ended June 30, 2018, the Company sold 324 residential lots to D.R. Horton for $18.6 million and 79 residential tract acres to D.R. Horton for $2.0 million. In addition, the net impact of the change in contract liabilities or revenue deferrals decreased revenues on lot sales to D.R. Horton by $2.0 million and $3.6 million in the three and nine months ended June 30, 2019 and $3.2 million in both the three and nine months ended June 30, 2018. At June 30, 2019, the Company had contract liabilities of $9.9 million related to its unsatisfied remaining performance obligations in the development of 382 lots that have been sold to D.R. Horton which will be recognized over time as the performance obligations are completed.

During the three and nine months ended June 30, 2019, the Company reimbursed D.R. Horton approximately $10.8 million and $27.6 million for previously paid earnest money and $4.7 million and $8.4 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. During the three and nine months ended June 30, 2018, the Company reimbursed D.R. Horton approximately $2.9 million and $16.9 million for previously paid earnest money and $4.6 million and $12.8 million for pre-acquisition and other due diligence and development costs.

During the three and nine months ended June 30, 2019, the Company paid D.R. Horton $0.6 million and $1.4 million for land development services and $0.1 million for these services in both prior year periods. These amounts are included in cost of sales in the Company’s consolidated statements of operations.

At June 30, 2019 and September 30, 2018, undeveloped land was $60.8 million and $34.9 million. 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 which ranges from 12% to 16% per annum.

At June 30, 2019 and September 30, 2018, accrued expenses and other liabilities on the Company's consolidated balance sheets included $0.7 million and $3.3 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.