XML 36 R20.htm IDEA: XBRL DOCUMENT v3.24.3
Related Party Disclosures
 12 Months Ended
Sep. 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. During fiscal 2024, 2023 and 2022, selling, general and administrative expense in the consolidated statements of operations included $5.6 million, $3.8 million and $4.1 million for these shared services, $9.6 million, $8.5 million and $7.4 million reimbursed to D.R. Horton for the cost of health insurance and other employee benefits and $3.1 million, $2.9 million and $6.6 million for other corporate and administrative expenses paid by D.R. Horton on behalf of the Company.

The Company is subject to a Tax Sharing Agreement with D.R. Horton. The agreement sets forth an equitable method for reimbursements of tax liabilities or benefits between the Company and D.R. Horton related to state and local income, margin or franchise tax returns that are filed on a unitary basis with D.R. Horton. In accordance with the agreement, the Company reimbursed D.R. Horton $2.2 million, $1.7 million and $0.7 million in fiscal 2024, 2023 and 2022, respectively, for its tax expense generated in fiscal 2023, 2022 and 2021.

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 September 30, 2024 and 2023, the Company owned approximately 57,800 and 52,400 residential lots, of which D.R. Horton had the following involvement.
September 30,
 20242023
 (Dollars in millions)
Residential lots under contract to sell to D.R. Horton20,500 14,400 
Owned lots subject to right of first offer with D.R. Horton based on executed purchase and sale agreements17,200 17,000 
Earnest money deposits from D.R. Horton for lots under contract$168.4 $117.1 
Remaining sales price of lots under contract with D.R. Horton$1,840.5 $1,319.2 

Lot and land sales to D.R. Horton during fiscal years 2024, 2023 and 2022 were as follows:

Year Ended September 30,
 202420232022
 (Dollars in millions)
Residential lots sold to D.R. Horton13,267 12,249 14,895 
Residential lot sales revenues from sales to D.R. Horton$1,271.4 $1,094.7 $1,230.0 
Decrease in contract liabilities on lot sales to D.R. Horton$2.9 $— $1.8 
Tract acres sold to D.R. Horton32 820 — 
Tract sales revenues from sales to D.R. Horton$15.2 $114.1 $— 
Other revenues from D.R. Horton
$8.5 $1.0 $— 

During fiscal 2024, 2023 and 2022, the Company reimbursed D.R. Horton approximately $27.5 million, $10.9 million and $8.7 million for previously paid earnest money and $22.9 million, $21.8 million and $58.9 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.

During fiscal 2024, 2023 and 2022, the Company paid D.R. Horton $0.9 million, $0.8 million and $2.8 million for land development services. These amounts are included in cost of sales in the Company’s consolidated statements of operations.
At September 30, 2024 and 2023, 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 September 30, 2024 and 2023 accrued expenses and other liabilities on the Company's consolidated balance sheets included $5.2 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 September 30, 2024, other assets on the Company's consolidated balance sheet included $6.5 million of contract assets related to a contract with D.R. Horton.

R&R

During fiscal 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 Horton and Reagan Horton, the adult sons of the late Donald R. Horton, former Chairman of D.R. Horton.