Related Party Disclosures

9 Months Ended

Jun. 30, 2024

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

Related Party Transactions

D.R. Horton

The Company has a Shared Services Agreement with D.R. Horton whereby D.R. Horton provides the Company with certain administrative, compliance, operational and procurement services. In the nine months ended June 30, 2024 and 2023, selling, general and administrative expense in the consolidated statements of operations included $4.1 million and $2.8 million for these shared services, $7.0 million and $6.6 million reimbursed to D.R. Horton for the cost of health insurance and other employee benefits and $0.7 million and $1.2 million for other corporate and administrative expenses paid by D.R. Horton on behalf of the Company.

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, 2024 and September 30, 2023, the Company owned approximately 57,900 and 52,400 residential lots, respectively, of which D.R. Horton had the following involvement.

	June 30, 2024		September 30, 2023
	(Dollars in millions)
Residential lots under contract to sell to D.R. Horton	19,500		14,400
Owned lots subject to right of first offer with D.R. Horton based on executed purchase and sale agreements	16,700		17,000
Earnest money deposits from D.R. Horton for lots under contract	$	155.4	$	117.1
Remaining sales price of lots under contract with D.R. Horton	$	1,719.8	$	1,319.2

Lot and land sales to D.R. Horton in the three and nine months ended June 30, 2024 and 2023 were as follows:

	Three Months Ended June 30,				Nine Months Ended June 30,
	2024		2023		2024		2023
	(Dollars in millions)
Residential lots sold to D.R. Horton	2,903		3,187		8,842		7,947
Residential lot sales revenues from sales to D.R. Horton	$	265.6	$	270.4	$	846.6	$	677.4
(Increase) decrease in contract liabilities on lot sales to D.R. Horton	$	(0.2)	$	0.6	$	2.6	$	4.0
Tract acres sold to D.R. Horton	32		45		32		424
Tract sales revenues from sales to D.R. Horton	$	2.1	$	22.8	$	2.1	$	55.3
Other revenues from D.R. Horton	$	1.2	$	0.8	$	2.5	$	1.0

In the three and nine months ended June 30, 2024, the Company reimbursed D.R. Horton approximately $4.4 million and $15.1 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 $6.7 million and $17.1 million in the prior year periods. In the three and nine months ended June 30, 2024, the Company reimbursed D.R. Horton approximately $4.0 million and $22.7 million for previously paid earnest money related to those land purchase contracts. 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.

In the three and nine months ended June 30, 2024, the Company paid D.R. Horton $0.1 million and $0.8 million for land development services compared to $0.1 million and $0.6 million for these services in the prior year periods. These amounts are included in cost of sales in the Company’s consolidated statements of operations.

At June 30, 2024 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, 2024 and September 30, 2023, accrued expenses and other liabilities on the Company's consolidated balance sheets included $1.8 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.

R&R

In the nine months ended June 30, 2024, 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. Horton. The tract was originally under contract with D.R. Horton. The Company independently underwrote the transaction and chose to close in place of D.R. Horton. R&R is owned and controlled by Ryan and Reagan Horton, the adult sons of Donald R. Horton, former Chairman of D.R. Horton.