Forestar Group Inc.

FORESTAR
ANNUAL
REPORT


F O R E S T A R A N N U A L R E P O R T | 2 0 2 5

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended September 30, 2025
or
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From
To
Commission File Number: 001-33662
Forestar Group Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
26-1336998
(State or Other Jurisdiction of Incorporation or Organization)
(I.R.S. Employer Identification No.)
2221 E. Lamar Blvd., Suite 790, Arlington, Texas 76006
(Address of Principal Executive Offices, including Zip Code)
(817) 769-1860
(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Trading Symbol
Name of Each Exchange On Which Registered
Common Stock, par value $1.00 per share
FOR
New York Stock Exchange
NYSE Texas
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ¨
No þ
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.
Yes ¨
No þ
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes þ
No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of
Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such
files).
Yes þ
No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an
emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth
company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
o
Accelerated filer
þ
Non-accelerated filer
o
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new
or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control
over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by the registered public accounting firm that prepared or
issued its audit report. ☑
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the
filing reflect the correction of an error to previously issued financial statements. ¨
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received
by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐
No þ
As of March 31, 2025, the aggregate market value of the registrant's common stock held by non-affiliates of the registrant was approximately $404 million
based on the closing price as reported on the New York Stock Exchange.
As of November 14, 2025, there were 50,842,077 shares of Common Stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's proxy statement for its 2026 Annual Meeting of Stockholders are incorporated by reference into Part III of this Form 10-K.


FORESTAR GROUP INC.
2025 ANNUAL REPORT ON FORM 10-K
TABLE OF CONTENTS
Page
PART I
Item 1.
Business.............................................................................................................................................................................
3
Item 1A.
Risk Factors.......................................................................................................................................................................
11
Item 1B.
Unresolved Staff Comments .............................................................................................................................................
23
Item 1C.
Cybersecurity ....................................................................................................................................................................
23
Item 2.
Properties...........................................................................................................................................................................
25
Item 3.
Legal Proceedings .............................................................................................................................................................
25
Item 4.
Mine Safety Disclosures....................................................................................................................................................
25
PART II
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.......
26
Item 6.
[Reserved] .........................................................................................................................................................................
27
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations...........................................
28
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk..........................................................................................
39
Item 8.
Financial Statements and Supplementary Data.................................................................................................................
40
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure...........................................
65
Item 9A.
Controls and Procedures....................................................................................................................................................
65
Item 9B.
Other Information..............................................................................................................................................................
65
Item 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections..............................................................................
65
PART III
Item 10.
Directors, Executive Officers and Corporate Governance................................................................................................
66
Item 11.
Executive Compensation...................................................................................................................................................
66
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.........................
66
Item 13.
Certain Relationships and Related Transactions, and Director Independence..................................................................
66
Item 14.
Principal Accountant Fees and Services ...........................................................................................................................
66
PART IV
Item 15.
Exhibits and Financial Statement Schedules.....................................................................................................................
67
Item 16.
10-K Summary..................................................................................................................................................................
69
SIGNATURES .....................................................................................................................................................................................
70


PART I
Item 1.
Business.
Overview
Forestar Group Inc. is a national, well-capitalized residential lot development company focused primarily on making
investments in land acquisition and development to sell finished single-family residential lots to homebuilders. Our common
stock is listed on the New York Stock Exchange (NYSE) and the NYSE Texas under the ticker symbol "FOR." The listing
and trading of the Common Stock on the NYSE Texas commenced on July 1, 2025. The terms "Forestar," the "Company,"
"we" and "our" used herein refer to Forestar Group Inc., a Delaware corporation, and its predecessors and subsidiaries.
We conduct a wide range of project planning and management activities related to the entitlement, acquisition,
community development and sale of residential lots. We generally secure entitlements while the land is under contract by
creating plans that meet the needs of the markets where we operate, and we aim to have all entitlements secured before
closing on the investment. Moving land through the entitlement and development process creates significant value. We
primarily invest in entitled short-duration projects that can be developed in phases, enabling us to complete and sell lots at a
pace that matches market demand, consistent with our focus on maximizing capital efficiency and returns. This strategy is a
unique, lower-risk business model that we expect will produce more consistent returns than other public and private land
developers. We also make short-term strategic investments in finished lots (lot banking) and undeveloped land (land banking)
with the intent to sell these assets within a short time period to utilize available capital prior to its deployment into longer-
term lot development projects. For the year ended September 30, 2025, we sold 14,240 lots with an average sales price of
$108,400. At September 30, 2025, our lot position consisted of 99,800 residential lots, of which approximately 65,100 were
owned and 34,700 were controlled through purchase contracts. Of our 65,100 owned lots, approximately 23,800 lots are
under contract to be sold for an aggregate remaining sales price of approximately $2.1 billion.
We have expanded and diversified our lot development operations across 64 markets in 23 states. We believe our
geographically diverse operations provide a strong platform for us to consolidate market share in the highly fragmented lot
development industry. We also believe our geographic diversification lowers our operational risks and enhances our earnings
potential by mitigating the effects of local and regional economic cycles.
Our customers are primarily local, regional and national homebuilders. The lots we deliver in our communities are
primarily for entry-level, first-time move-up and active adult homes. Entry-level and first-time move-up homebuyers are the
largest segments of the new home market. We also market some of our communities towards build-to-rent operators. We may
engage in the development of multifamily sites as market opportunities arise.
Our real estate origins date back to the 1954 incorporation of Lumbermen’s Investment Corporation, which became a
wholly-owned subsidiary of the predecessor to Temple-Inland Inc. ("Temple-Inland") in 1971. We changed our name to
Forestar Real Estate Group Inc. after Temple-Inland began reporting us as a separate business segment in 2006, and in 2007,
Temple-Inland completed a tax-free distribution of our shares to its stockholders, making us an independent publicly-traded
company. In 2008, we changed our name from Forestar Real Estate Group Inc. to Forestar Group Inc. We became a majority-
owned subsidiary of D.R. Horton, Inc. ("D.R. Horton") in October 2017 by virtue of a merger with a wholly-owned
subsidiary of D.R. Horton. Immediately following the merger, D.R. Horton owned 75% of our outstanding common stock,
and as of September 30, 2025 they owned approximately 62% of our outstanding common stock. As our controlling
shareholder, D.R. Horton has significant influence in guiding our strategic direction and operations. In connection with the
merger, we entered into certain agreements with D.R. Horton including a Stockholder’s Agreement (as amended, the
"Stockholder's Agreement"), a Master Supply Agreement and a Shared Services Agreement. Under the terms of the Master
Supply Agreement, we supply finished lots to D.R. Horton at market terms offered by Forestar and both companies identify
land development opportunities to expand our portfolio of assets.
We manage our operations through our real estate segment. Our national footprint provides diversification in our real
estate investments and our sources of revenues and earnings. At September 30, 2025, we conducted our operations in the
states and markets listed below.
3

State
Market
State
Market
Alabama
Baldwin
Nevada
Las Vegas
Birmingham
Reno
Huntsville
Mobile
New Jersey
Southern New Jersey
Tuscaloosa
New Mexico
Albuquerque
Arizona
Phoenix
Tucson
North Carolina
Asheville
Charlotte
California
Bay Area
Greensboro/Winston-Salem
Modesto/Merced/Stockton
Greenville
Riverside County
Raleigh-Durham
Sacramento
Wilmington
Colorado
Denver
Ohio
Cincinnati/Dayton
Fort Collins
Columbus
Florida
Fort Myers/Naples
Pennsylvania
Philadelphia
Gainesville
Jacksonville
South Carolina
Charleston
Lakeland
Greenville/Spartanburg
Melbourne
Hilton Head
Miami
Myrtle Beach
Ocala
Orlando
Tennessee
Knoxville
Panama City
Nashville
Pensacola
Tallahassee
Texas
Austin
Tampa/Sarasota
Dallas
Volusia County
Fort Worth
Houston
Georgia
Atlanta
San Antonio
Augusta
Savannah
Utah
Salt Lake City/Provo/Ogden
Illinois
Chicago
Virginia
Northern Virginia
Richmond
Indiana
Indianapolis
Virginia Beach/Williamsburg
Maryland
Suburban Washington, D.C.
Washington
Vancouver
Seattle/Tacoma/Everett
Minnesota
Minneapolis/St. Paul
West Virginia
Eastern West Virginia
4

When evaluating new or existing markets for purposes of capital allocation, we consider local, market-specific factors,
including, among others:
•
economic conditions;
•
employment levels and job growth;
•
housing demand and affordability;
•
availability of land and lots in desirable locations at acceptable terms;
•
land entitlement and development processes;
•
availability of qualified subcontractors;
•
new and secondary home sales activity;
•
competition; and
•
performance capabilities of our local management teams.
Business Operations
The majority of our real estate projects are single-family residential communities. We primarily purchase land in the
open market and install the necessary infrastructure to develop the land into finished residential lots for single-family homes.
Our customers are primarily local, regional and national homebuilders. Our managers are responsible for the following
activities related to our land and lot acquisition and development activities:
•
site selection, which involves:
–
a feasibility study;
–
soil and environmental reviews;
–
review of existing zoning and other governmental requirements;
–
review of the need for and extent of offsite work required to obtain project entitlements and to complete
necessary infrastructure; and
–
financial analysis of the potential project;
•
negotiating land acquisition, lot purchase and related contracts;
•
obtaining all necessary land development approvals;
•
selecting land development subcontractors and ensuring their work meets our contracted scopes;
•
planning and managing land development schedules;
•
determining the sales pricing for each lot in a given project;
•
developing and implementing marketing and sales plans; and
•
coordinating all interactions with customers throughout the lot sale process.
5

Our corporate executives and corporate office personnel provide control and oversight functions to many important risk
elements in our operations, including:
•
allocation of capital;
•
cash management;
•
review and approval of business plans and budgets;
•
review, approval and funding of land and lot acquisitions (Board of Directors must approve certain acquisitions as
provided in our certificate of incorporation and the Stockholder's Agreement);
•
environmental assessments of land and lot acquisitions;
•
review of all business and financial analysis for potential land and lot inventory investments;
•
oversight of land and lot inventory levels;
•
monitoring and analysis of profitability, returns and costs; and
•
review of major personnel decisions and incentive compensation plans.
Our corporate executives and office personnel are responsible for establishing our operational policies and internal
control standards and monitoring compliance with established policies and controls throughout our operations. We have a
Shared Services Agreement with D.R. Horton whereby D.R. Horton provides us with certain administrative, compliance,
operational and procurement services. Our corporate executives and office personnel are responsible for, and provide
oversight and review for, the following shared services performed by D.R. Horton:
•
finance and treasury;
•
information technology;
•
internal audit;
•
investor relations; and
•
human resources, payroll and employee benefits.
We have a Master Supply Agreement with D.R. Horton which establishes our business relationship with D.R. Horton as
both companies identify residential real estate opportunities. The agreement provides D.R. Horton the right of first offer to
purchase, at market prices and terms offered by Forestar, up to 100% of the lots from D.R. Horton sourced projects, up to
50% of the lots in the first phase of a Forestar sourced project and up to 50% of the lots in any subsequent phase in which
D.R. Horton purchases at least 25% of the lots in the previous phase. D.R. Horton has no such rights on third-party sourced
development opportunities. The Master Supply Agreement continues until the earlier of (i) the date at which D.R. Horton
owns less than 15% of our voting shares or (ii) June 29, 2037; however, we may terminate the agreement at any time when
D.R. Horton owns less than 25% of our voting shares.
Our Stockholder's Agreement with D.R. Horton and our certificate of incorporation define D.R. Horton’s right to
nominate members to our Board, require D.R. Horton’s consent for certain transactions and establish an investment
committee, which is authorized to approve certain new investments. D.R. Horton has the right to nominate a number of our
Board members commensurate with its equity ownership. As long as D.R. Horton owns at least 20% of our voting securities,
it retains the right to nominate individuals to our Board based on its equity ownership as well as designate the Executive
Chairman.
As long as D.R. Horton owns at least 35% of our voting securities, we must obtain D.R. Horton’s consent to (i) issue
any new class of equity or shares of our common stock in excess of certain amounts; (ii) incur, assume, refinance or
guarantee debt that would increase our total leverage to greater than 40%; (iii) select, terminate, remove or change
compensation arrangements for the Executive Chairman, Chief Executive Officer, Chief Operating Officer, Chief Financial
Officer and other key senior management; and (iv) make certain acquisitions or investments.
6

Land/Lot Acquisition and Inventory Management
We acquire land for use in our development operations after we have completed due diligence and obtained the
development rights (known as entitlements). Before we acquire lots or tracts of land, we complete a feasibility study, which
includes soil tests, independent environmental studies, other engineering work and financial analysis. We also evaluate the
status of necessary zoning and other governmental entitlements required to develop the property for home construction.
Although we purchase and develop land primarily to sell finished lots to homebuilders, we may sell land where we have
excess land positions or for other strategic reasons.
We also enter into land purchase contracts, whereby we obtain the right, but generally not the obligation, to buy land at
predetermined prices on a defined schedule commensurate with planned development. These contracts generally are non-
recourse, which limits our financial exposure to our earnest money deposited into escrow under the terms of the contract and
any pre-acquisition due diligence costs we incur. This enables us to control land with limited capital investment.
We attempt to mitigate our exposure to real estate inventory risks by:
•
managing our supply of land and lots owned and controlled through purchase contracts in each market based on
anticipated future demand;
•
monitoring local market and demographic trends that affect housing demand;
•
limiting the size of our land development projects and focusing on short duration projects;
•
acquiring land entitled for single-family residential housing and managing our development in phases;
•
focusing on developing lots for entry-level housing, the segment where housing demand has been the highest;
•
developing the majority of our lots for a known buyer; and
•
geographically diversifying our land portfolio.
Land Development
Substantially all of our land development work is performed by subcontractors. Subcontractors typically are selected
after a competitive bidding process pursuant to a contract that obligates the subcontractor to complete the scope of work at an
agreed-upon price and within a specified time frame. We monitor land development activities, participate in major decisions,
coordinate the activities of subcontractors and suppliers, review the work of subcontractors for quality and cost controls and
monitor compliance with building codes or other regulations.
We typically do not maintain inventories of land development materials except for work-in-progress materials for active
development projects. Generally, the materials used in our operations have been readily available from numerous sources.
The cost and availability of certain materials, especially steel, transformers, concrete, and petroleum-based materials, is
influenced by changes in local and global commodity prices and capacity as well as government regulation, such as
government-imposed tariffs or trade restrictions on supplies such as steel. Construction time for our lots depends on the
availability of labor, materials and supplies, the weather, and other factors.
We are subject to governmental regulations that affect our land development operations. In recent years, municipalities
and other government agencies were frequently delayed in granting the proper approvals to us, which delayed our
development activities in certain markets.
In select situations, we contract with D.R. Horton for land development services, generally in geographic markets where
we do not have established development teams and capabilities.
Lot/Land Banking
In addition to our residential lot development activities, we also make strategic short-term investments in finished lots
(lot banking) and undeveloped land (land banking) with the intent to sell these assets within a short time period, primarily to
D.R. Horton, utilizing available capital prior to its deployment into longer term lot development projects. We manage our
level of lot/land banking relative to short-term liquidity and expected future cash requirements for lot development projects.
7

Cost Controls
We control development costs by designing our communities efficiently and by obtaining competitive bids for materials
and labor. We monitor our land development expenditures versus budgets for each project, and we review our inventory
levels, margins, expenses, profitability and returns for each project compared to its business plan and our performance
expectations.
We control overhead costs by centralizing certain accounting and administrative functions, monitoring staffing and
compensation levels and applying technology to business processes to improve productivity where practical. We review other
general and administrative costs to identify efficiencies and savings opportunities in our operating divisions and our regional
and corporate offices.
Competition
We face significant competition for the acquisition, development and sale of real estate in our markets. Our major
competitors include numerous local, regional, and national developers, including home builders. Competition also exists for
investment opportunities, financing, available land, raw materials and labor. Some of our real estate competitors are well
established and financially strong, may have greater financial, marketing and other resources than we do, or may be larger
than us and/or have lower cost of capital and operating costs than we have and expect to have. The presence of competition
may increase the bargaining power of property owners seeking to sell. These competitive market pressures can sometimes
make it difficult to acquire, develop or sell land and lots at prices that meet our return criteria.
The land and lot acquisition and development business is highly fragmented, and we are unaware of any meaningful
concentration of national market share by any one competitor. Enterprises of varying sizes, from individuals or small
companies to large corporations, actively engage in the real estate development business. Many competitors are local,
privately-owned companies. We have a few regional and national land developer competitors in addition to national
homebuilders that may develop lots on which they construct and sell homes. During periods when access to capital is
restricted, participants in a weaker financial condition tend to be less active.
Sales Contracts and Backlog
Our lot sales contracts require an earnest money deposit, which can vary in amount across our markets and
communities. We have the right to either retain or refund customer deposits on canceled lot purchase contracts, depending
upon the applicable provisions of the contract or other circumstances. The length of time between the signing of a lot sales
contract and delivery of the lot to the customer (closing) is generally from three to eighteen months. At September 30, 2025,
our lots owned included approximately 23,800 lots (37%) that were under contract to be sold, of which approximately 22,800
lots are under contract to D.R. Horton.
Seasonality
Although the growth of our business and significant changes in market conditions have impacted our seasonal patterns
in the past and could do so again in the future, we generally deliver more lots and generate greater revenues and pre-tax
income in the fourth quarter of our fiscal year. As a result of seasonal activity, our quarterly results of operations and
financial position at the end of a particular fiscal quarter are not necessarily representative of the balance of our fiscal year.
8

Human Capital Resources
People and Culture
We have increased our number of employees from 393 at September 30, 2024 to 433 at September 30, 2025 to support
the growth of our residential lot development business across a geographically diversified platform. At September 30, 2025,
340 of our employees worked in our regional and divisional offices and 93 worked at our corporate office. In fiscal 2025, our
total cost for employee compensation and benefits was $105.3 million. In addition to our employees, we also have a Shared
Services Agreement with D.R. Horton whereby D.R. Horton employees provide us with certain administrative, compliance,
operational and procurement services.
We believe the people who work for our company are our most important resources and are critical to our continued
success. We focus significant attention toward attracting and retaining talented and experienced individuals to manage and
support our operations. Our people are expected to exhibit and promote honest, ethical and respectful conduct in the
workplace. All of our employees must certify to their understanding of and adhere to a code of conduct that sets standards for
appropriate behavior and includes required internal training on preventing, identifying, reporting and stopping any type of
discrimination.
Recruitment, Development and Retention
We are committed to hiring, developing and supporting an energetic workforce and maintaining a productive, positive
and inclusive workplace. We believe that when people feel included and have ample opportunities for professional growth,
they bring forward a variety of perspectives and ideas that strengthen our company. Through our Shared Services Agreement,
with D.R. Horton, we leverage their recruiting team that partners with college campuses and external organizations to identify
promising new talent and established professionals. Through our paid internship program, college students and recent
graduates gain valuable experience working alongside some of the most experienced professionals in the land development
industry. Management is committed to supporting the development of our employees in many ways including onboarding
programs, training and providing employees exposure to senior management. Our management team also supports a culture
of developing future leaders from our existing workforce, enabling us to promote from within for many leadership positions.
We believe this provides long-term focus and continuity to our operations while also providing opportunities for the growth
and advancement of our employees. During fiscal 2025, 40 employees were placed into new leadership positions in our
regional and divisional offices, and of those, 78% were promoted from within the organization.
Compensation and Benefits
We believe our compensation package and benefits are competitive with others in our industry. In addition to base pay,
eligible employees may participate in our incentive bonus and stock compensation plans, which align their compensation to
the interests of our shareholders. We also offer our employees a broad range of benefits, including paid vacation, holidays,
sick time and parental leave; medical, dental and vision healthcare insurance; and life insurance and disability coverage.
Additional benefits offered include a 401(k) savings plan, employee stock purchase plan and access to professional resources
to support employees with their mental and physical health, financial planning, identity theft protection and legal needs. We
are committed to supporting our employees in their health, wellness and financial planning goals. We host events and
challenges, both virtually and in person, to encourage our employees to stay active and healthy. Additional information about
our employee benefit plans is included in Note 11 to the accompanying financial statements.
Workplace Safety and Wellness
The safety and well-being of our employees are our first priority. We take workplace safety seriously at our
development sites and in our offices. Our organization strives for a zero-incident safety culture and full compliance with
safety regulations. We provide certification training to our field personnel through an Occupational Safety and Health
Administration (OSHA) authorized third-party vendor. We also provide our teams with many safety resources, including
safety checklists, policies, procedures, best practices, and communicate with our employees through a monthly safety
newsletter to inform and reinforce our commitment to and concern for their well-being. We also require personal protective
equipment, such as hard hats, high-visibility safety wear and hearing and eye protection be worn as necessary to meet OSHA
requirements. Additionally, because substantially all of our land development work is performed by subcontractors, we
require that they maintain their own safety programs as well.
9

Governmental Regulation and Environmental Matters
Our operations are subject to extensive and complex regulations. We, and our subcontractors, must comply with many
federal, state and local laws and regulations including, but not limited to, zoning, permitting, density and development,
building, environmental, advertising, labor and real estate sales. These regulations and requirements affect substantially all
aspects of our land development and sales processes in varying degrees across our markets. Our properties are subject to
inspection and approval by local authorities where required and may be subject to various assessments for schools, parks,
streets, utilities and other public improvements. We may experience delays in receiving the proper approvals from local
authorities that could delay our anticipated development activities in certain projects.
Our land development activities are also subject to an extensive array of local, state and federal statutes, ordinances,
rules and regulations concerning the protection of health, safety and the environment. Compliance requirements for each site
vary greatly according to location, environmental condition and the present and former uses of the site and adjoining
properties. We believe that we are in compliance in all material respects with existing environmental regulations applicable to
our business. Additionally, our compliance with such regulations has not had, nor is it expected to have, a material adverse
effect on our consolidated financial position, results of operations or cash flows. However, changes in regulations, such as the
climate-related disclosure legislation recently enacted by the State of California could increase our costs to comply with such
regulations, as discussed in "Item 1A. Risk Factors."
Available Information
Our principal executive offices are located at 2221 E. Lamar Blvd., Suite 790, Arlington, Texas 76006. Our telephone
number is (817) 769-1860.
On the Investor Relations section of our website, www.forestar.com, you may obtain additional information about us,
including:
•
our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and other
documents as soon as reasonably practicable after we file them with the Securities and Exchange Commission
("SEC");
•
copies of certain agreements with D.R. Horton, including the Stockholder’s Agreement and Master Supply
Agreement;
•
beneficial ownership reports filed by officers, directors, and principal security holders under Section 16(a) of
the Securities Exchange Act of 1934, as amended (or the "Exchange Act"); and
•
corporate governance information that includes our:
–
corporate governance guidelines,
–
audit committee charter,
–
compensation committee charter,
–
nominating and governance committee charter,
–
standards of business conduct and ethics,
–
environmental policy,
–
human rights policy,
–
code of ethics for senior financial officers, and
–
information on how to communicate directly with our Board of Directors.
We will also provide printed copies of any of these documents to any stockholder free of charge upon request. The SEC
also maintains a website (www.sec.gov) that contains reports, proxy and information statements and other information that is
filed electronically with the SEC.
10

Item 1A.
Risk Factors.
Discussion of our business and operations included in this annual report on Form 10-K should be read together with the
risk factors set forth below. They describe various risks and uncertainties we are or may become subject to, many of which
are difficult to predict and beyond our control. Although the risks are organized and described separately, many of the risks
are interrelated. These risks and uncertainties, together with other factors described elsewhere in this report, have the
potential to affect our business, financial condition, results of operations, cash flows, strategies or prospects in a material and
adverse manner.
Risks Related to our Concentrated Ownership
So long as D.R. Horton controls us, our other stockholders will have limited ability to influence matters requiring
stockholder approval, and D.R. Horton's interest may conflict with the interests of other current or potential holders of
our securities.
D.R. Horton beneficially owns approximately 62% of our common stock. As a result, until such time as D.R. Horton
and its controlled affiliates hold shares representing less than a majority of the votes entitled to be cast by our stockholders at
a stockholder meeting, D.R. Horton generally has the ability to control the outcome of any matter submitted for the vote of
our stockholders, except in certain circumstances set forth in our certificate of incorporation or bylaws. In addition, under the
terms of our certificate of incorporation and the Stockholder's Agreement with D.R. Horton, so long as D.R. Horton or its
affiliates own 35% or more of our voting securities, we may not take certain actions without D.R. Horton's approval,
including certain actions with respect to equity issuances, indebtedness, acquisitions, fundamental changes in our business
and executive hiring, termination and compensation.
For so long as D.R. Horton and its controlled affiliates hold shares of our common stock representing at least 20% of
the votes entitled to be cast by our stockholders at a stockholder meeting, D.R. Horton is able to designate a certain number
of the members of our Board of Directors. Currently, D.R. Horton has the right to designate four out of seven members of our
Board, subject to a requirement that we and D.R. Horton use reasonable best efforts to cause at least three directors to qualify
as "independent directors," as such term is defined in the New York Stock Exchange ("NYSE") listing rules, and applicable
law. The directors designated by D.R. Horton have the authority to make decisions affecting our capital structure, including
the issuance of additional capital stock or options, the incurrence of additional indebtedness, the implementation of stock
repurchase programs and the declaration of dividends. The interests of D.R. Horton may be materially different than the
interests of our other stakeholders.
The interests of D.R. Horton may not coincide with the interests of our current or potential stockholders. D.R. Horton's
ability, subject to the limitations in the Stockholder's Agreement and our certificate of incorporation and bylaws, to control
matters submitted to our stockholders for approval limits the ability of other stockholders to influence corporate matters,
which may cause us to take actions that our other stockholders do not view as beneficial to them. In such circumstances, the
market price of our common stock could be adversely affected, and our ability to access the capital markets may also be
adversely affected. In addition, the existence of a controlling stockholder may have the effect of making it more difficult for a
third party to acquire us, or may discourage a third party from seeking to acquire us. A third party would be required to
negotiate any such transaction with D.R. Horton, and the interests of D.R. Horton with respect to such transaction may be
different from the interests of our other stockholders.
Subject to limitations in the Stockholder's Agreement and our certificate of incorporation that limit D.R. Horton's ability
to take advantage of certain corporate opportunities that are presented directly to our officers or directors in their capacity as
such, D.R. Horton is not restricted from competing with us or otherwise taking for itself or its other affiliates certain
corporate opportunities that may be attractive to us.
11

Any inability to resolve favorably any disputes that may arise between us and D.R. Horton may result in a significant
reduction of our revenues and earnings.
Disputes may arise between D.R. Horton and us in a number of areas, including:
•
business combinations involving us;
•
sales or dispositions by D.R. Horton of all or any portion of its ownership interest in us;
•
performance under the Master Supply Agreement;
•
arrangements with third parties that are exclusionary to D.R. Horton or us; and
•
business opportunities that may be attractive to both D.R. Horton and us.
We may not be able to resolve any potential conflicts, and even if we do, the resolution may be less favorable than if we
were dealing with an unaffiliated party.
New agreements may be entered into between D.R. Horton and us, and agreements we enter into with D.R. Horton may
be amended upon agreement between the parties. Because we are controlled by D.R. Horton, we may not have the leverage to
negotiate these agreements, or amendments thereto if required, on terms as favorable to us as those that we would negotiate
with an unaffiliated third party.
D.R. Horton's ability to control our Board may make it difficult for us to recruit independent directors.
So long as D.R. Horton and its controlled affiliates hold shares of our common stock representing at least 20% of the
votes entitled to be cast by our stockholders at a stockholders' meeting, D.R. Horton is able to designate a certain number of
the members of our Board. Our Nominating and Governance Committee has the right to designate the remaining number of
individuals to the Board, and in any event not less than one. Currently, D.R. Horton has the right to designate four out of
seven members of our Board. Further, the interests of D.R. Horton and our other stockholders may diverge. Under these
circumstances, persons who might otherwise accept an invitation to join our Board may decline.
We qualify as a controlled company within the meaning of the NYSE rules and, as a result, may elect to rely on
exemptions from certain corporate governance requirements that provide protection to stockholders of companies that are
not controlled companies.
So long as D.R. Horton owns more than 50% of the total voting power of our common stock, we qualify as a
"controlled company" under the NYSE corporate governance standards. As a controlled company, we may under the NYSE
rules elect to be exempt from obligations to comply with certain NYSE corporate governance requirements, including the
requirements:
•
that a majority of our Board consist of independent directors;
•
that we have a nominating and governance committee that is composed entirely of independent directors with a
written charter addressing the committee's purpose and responsibilities;
•
that we have a compensation committee that is composed entirely of independent directors with a written charter
addressing the committee's purpose and responsibilities; and
•
that an annual performance evaluation of the nominating and governance committee and compensation committee
be performed.
We have not elected to utilize the "controlled company" exemptions at this time. However, if we elect to use the
controlled company exemptions, our stockholders will not have the same protections afforded to stockholders of companies
that are subject to all of the NYSE corporate governance requirements.
12

We may not realize potential benefits of the strategic relationship with D.R. Horton, including the transactions
contemplated by the Master Supply Agreement with D.R. Horton.
The Master Supply Agreement establishes a strategic relationship between us and D.R. Horton for the supply of
developed lots. Under the Master Supply Agreement, we will, and D.R. Horton may, present lot development opportunities to
each other, subject to certain exceptions. The parties may collaborate with respect to such opportunities and, if they elect to
develop such opportunities, D.R. Horton has a right of first offer or right to purchase some or all of the lots developed by us,
as set forth in the Master Supply Agreement, on market terms offered by Forestar. There are numerous uncertainties
associated with our relationship with D.R. Horton, including the risk that the parties will be unable to negotiate mutually
acceptable terms for lot development opportunities and the fact that D.R. Horton is not obligated to present its lot
development opportunities to us. As a result, we may not realize potential growth or other benefits from the strategic
relationship with D.R. Horton, which may affect our financial condition or results of operations.
D.R. Horton's control of us or the strategic relationship between D.R. Horton and us may negatively affect our business
relationships with other builder customers.
So long as D.R. Horton controls us or the strategic relationship between D.R. Horton and us remains in place, our
business relationships with other builder customers may be negatively affected, including the risk that such other builder
customers may believe that we will favor D.R. Horton over our other customers. In addition, we have in the past relied on
builder referrals as a source for land development opportunities, and there is a risk that builders may refer such opportunities
to land developers other than us as a result of our close alignment with D.R. Horton.
Risks Related to Our Business and our Industry
The homebuilding and lot development industries are cyclical and significantly affected by changes in economic, real
estate or other conditions that could adversely affect our business and financial results.
The homebuilding and lot development industries are cyclical and are significantly affected by changes in general and
local economic and real estate conditions, such as:
•
employment levels;
•
consumer confidence and spending;
•
housing demand;
•
demand for residential lots;
•
availability of financing for homebuyers;
•
availability of financing for companies that purchase our residential lots;
•
interest rates;
•
inflation; and
•
demographic trends.
Adverse changes in general and local economic conditions or deterioration in the broader economy may negatively
impact our business and financial results and increase the risk of asset impairments and write-offs. Changes in economic
conditions may affect some of our regions or markets more than others. If adverse conditions affect our larger markets, they
could have a proportionately greater impact on us than on some other real estate development companies.
The federal government’s fiscal policies and the Federal Reserve's monetary policies may negatively impact the
financial markets and consumer confidence and could hurt the U.S. economy and the real estate market, and in turn, could
adversely affect the operating results of our business. In response to rising inflation, the Federal Reserve raised interest rates
significantly in 2022 and 2023, which led to an increase in mortgage interest rates. While interest rates have since been
lowered and may be lowered further, mortgage interest rates have remained elevated since 2022. The increase in mortgage
interest rates has reduced the affordability of homes and thus affected the demand for finished lots, requiring us to use pricing
adjustments and incentives to adapt to current market conditions. Prolonged periods of elevated mortgage interest rates or
further increases in mortgage interest rates could have an adverse impact on our business and financial results.
13

Deployments of U.S. military personnel to foreign regions, terrorist attacks, other acts of violence or threats to national
security and any corresponding response by the United States or others, domestic or international instability or social or
political unrest may cause an economic slowdown in the markets where we operate, which could adversely affect our
business.
If we experience any of the foregoing, homebuilders may be less willing or able to buy our residential lots.
Additionally, cancellations of lot sales contracts may increase if homebuilders do not honor their contracts due to any of the
factors discussed above. Our pricing and product strategies may also be limited by market conditions. We may be unable to
change the pricing or mix of our product offerings, reduce the costs of the residential lots we develop, or satisfactorily
address changing market conditions in other ways without adversely affecting our profits and returns.
Our business and financial results could be adversely affected by significant inflation, higher interest rates or deflation.
During the past three years, the economy has experienced significant inflationary pressures. Inflation can adversely
affect us by increasing costs of land, materials, labor and our cost of capital. In an effort to lower the current rate of inflation,
the Federal Reserve has raised interest rates significantly, which has resulted in higher mortgage interest rates. The increase
in mortgage interest rates has reduced the affordability of our lots and has required us to use pricing adjustments and
incentives to adapt to current market conditions, which result in lower gross margins. If inflation and mortgage interest rates
remain high or continue to increase, lot affordability may be further impacted, which could reduce our profit margins and
have an adverse impact on our business and financial results.
Alternatively, a significant period of deflation could cause a decrease in overall spending and borrowing levels. This
could lead to deterioration in economic conditions, including an increase in the rate of unemployment. Deflation could also
cause the value of our real estate to decline. These, or other factors related to deflation, could have a negative impact on our
business and financial results.
Supply shortages and other risks related to acquiring land, materials and skilled labor and obtaining regulatory approval
could increase our costs and delay lot deliveries.
The residential lot development industry may experience significant difficulties that can affect the cost or timing of lot
development, including:
•
difficulty in acquiring land suitable for residential development at affordable prices in locations that are attractive
to homebuilders;
•
delays in receiving the necessary approvals from municipalities or other government agencies;
•
shortages of qualified subcontractors;
•
reliance on local subcontractors, manufacturers and distributors who may be inadequately capitalized;
•
shortages of construction materials; and
•
significant increases in the cost of materials and other inputs, including petroleum-based products.
In the recent past, we experienced multiple disruptions in our supply chain, which resulted in shortages of certain
construction materials and tightness in the labor market. This caused our construction cycle times to lengthen and costs of
construction materials to increase. Although our construction cycle times have decreased more recently, if shortages and cost
increases in construction materials and tightness in the labor market increase, our construction cycle time and profit margins
could be adversely impacted.
In addition, newly imposed or increased tariffs, duties and/or trade restrictions, such as those imposed or
increased by the current administration, on imported materials and goods that are used in connection with the construction
and delivery of homes, including steel, aluminum and lumber, may raise homebuilders' costs for these items or for the
products made with them. These factors may cause construction delays or increase costs for homebuilders, which could
reduce the pace of home construction and demand for finished lots.
14

Public health issues such as a major epidemic or pandemic could adversely affect our business and financial results.
The U.S. and other countries have experienced, and may experience in the future, outbreaks of contagious diseases that
affect public health and public perception of health risk. In the event of a widespread, prolonged actual or perceived outbreak
of any contagious disease, our operations could be negatively impacted. Such events have had, and could in the future have,
an effect on our operations, including a reduction in homebuilder traffic, a disruption in our supply chain, tightness in the
labor market or other factors, all of which could reduce demand for our lots. These or other repercussions of a public health
crisis that affect the global economy could have an adverse impact on our results of operations and financial condition.
Our business and financial results could be adversely affected by weather conditions and natural disasters.
Physical risks, including weather conditions and natural disasters, such as hurricanes, tornadoes, earthquakes, volcanic
activity, droughts, floods, hailstorms, heavy or prolonged precipitation, wildfires and others, can harm our business.
Additionally, the physical impacts of climate change may cause these occurrences to increase in frequency, severity and
duration. The climates and geology of many of the states in which we operate, including California, Florida, Texas and other
coastal areas where we have some of our larger operations, present increased risks of adverse weather or natural disasters,
such as wildfires and hurricanes. Any such events can temporarily delay our development work and lot sales, unfavorably
affect the cost or availability of materials or labor, damage residential lots under construction, lead to changing customer
preferences and/or negatively impact demand for residential lots in affected areas. We have experienced short-term impacts
on our lot sales from weather events in recent years. However, there has been no material impact on our business from these
events or material operational challenges resulting from these events, but they could adversely affect our business in the
future.
A health and safety incident relating to our operations could be costly in terms of potential liability and reputational
damage.
Land development sites are inherently dangerous, and operating in this industry poses certain inherent health and safety
risks. Due to health and safety regulatory requirements and the number of residential lots we develop, health and safety
performance is critical to the success of our business. Any failure in health and safety performance may result in penalties for
non-compliance with relevant regulatory requirements, and a failure that results in a major or significant health and safety
incident is likely to be costly and could expose us to liability that could be costly. Such an incident could generate significant
negative publicity and have a corresponding impact on our reputation, our relationships with relevant regulatory agencies or
governmental authorities, and our ability to attract customers and employees, which in turn could have a material adverse
effect on our financial results and liquidity.
From time to time, we obtain performance bonds, the unavailability of which could adversely affect our results of
operations and cash flows.
From time to time, we provide surety bonds to secure our performance or obligations under construction contracts,
development agreements and other arrangements. At September 30, 2025, we had $853.4 million of outstanding surety
bonds. Our ability to obtain surety bonds primarily depends upon our credit rating, financial condition, past performance and
other factors, including the capacity of the surety market and the underwriting practices of surety bond issuers. The ability to
obtain surety bonds also can be impacted by the willingness of insurance companies to issue performance bonds for
construction and development activities. If we are unable to obtain surety bonds when required, our results of operations and
cash flows could be adversely affected.
15

Information technology failures, cybersecurity incidents, and the failure to satisfy privacy and data protection laws and
regulations could harm our business.
We use information technology and other computer resources, including artificial intelligence, to carry out important
operational and marketing activities and to maintain our business records. These information technology systems are
dependent upon global communications providers, web browsers, third-party software and data storage providers and other
aspects of the Internet infrastructure that have experienced cyber security incidents, significant systems failures and service
outages in the past. Additionally, phishing attacks, whereby perpetrators attempt to fraudulently induce employees,
customers, vendors or other users of a company’s systems to disclose personal information to gain access to its data, have
increased significantly in recent years. With the use of artificial intelligence, these phishing attacks may contain highly
convincing language making them difficult to distinguish from legitimate messages. The use of remote work environments
and virtual platforms may increase our risk of cyber incidents that could compromise our data. Further, geopolitical tensions
or conflicts may create a heightened risk of these incidents. Our normal business activities involve collecting and storing
information specific to our customers, employees, vendors and suppliers and maintaining operational and financial
information related to our business, both in an office setting and remote locations as needed. A material breach in the security
of our information technology systems or other data security controls, or those of the third parties we work with, could
include the theft or release of this information. The unintended or unauthorized disclosure of personal identifying and
confidential information as a result of a cybersecurity incident by any means could lead to litigation or other proceedings
against us by the affected individuals or business partners, or by regulators. The outcome of such proceedings, which could
include penalties or fines, could have a significant negative impact on our business.
We may also be required to incur significant costs to protect against damages caused by information technology
failures, cybersecurity incidents, and the failure to satisfy privacy, data protection, and artificial intelligence laws and
regulations in the future as legal requirements continue to increase. The European Union and other international regulators, as
well as state governments, have enacted or enhanced privacy, data protection, and artificial intelligence regulations, such as
the California Privacy Rights Act and the Colorado Privacy Act, and other governments are considering establishing similar
or stronger protections. Among other things, these regulations impose certain obligations for handling specified personal
information in our systems, including notifying individuals regarding information we have collected from them. We have
incurred costs in an effort to comply with these requirements, but our costs may increase significantly if new requirements are
enacted and based on how individuals exercise their rights. Any loss of personal information and failure to comply with these
requirements or other applicable laws and regulations in this area could result in substantial penalties, reputational damage or
litigation.
We routinely utilize information technology security experts to assist us in our evaluations of the effectiveness of the
security of our information technology systems, and we regularly enhance our security measures, which include multiple
redundant safeguards, to protect our systems and data. We use various encryption, tokenization and authentication
technologies to mitigate cybersecurity risks and have increased our monitoring capabilities to enhance early detection and
rapid response to potential cyber threats. However, because the techniques used to obtain unauthorized access, disable or
degrade systems change frequently and increasingly leverage sophisticated technologies such as artificial intelligence, they
often are not recognized until launched against a target. As such, we may be unable to anticipate these techniques, to
implement adequate preventative measures or to identify and investigate cybersecurity incidents. We may also incur costs to
adapt our cybersecurity program to the evolving threat landscape and to investigate and remediate vulnerabilities or other
identified risks.
Although past cybersecurity incidents have not had a material effect on our business or operations to date, in the future,
a significant and extended disruption in the functioning of our information technology systems or a breach of any of our data
security controls could disrupt our business operations, damage our reputation and cause us to lose customers. Additionally, if
a cybersecurity incident is determined to be material, we are subject to additional reporting requirements. We cannot provide
assurances that a cyber incident, including data theft or other significant systems or security failures will not occur in the
future, and such occurrences could have a material and adverse effect on our consolidated results of operations or financial
position.
16

We are subject to litigation or other claims, which could materially and adversely affect us.
Lawsuits, claims and proceedings have been and may in the future be instituted or asserted against us. Some of these
claims may result in significant defense costs and potentially significant judgments against us, some of which are not, or
cannot be, insured against. We intend to defend ourselves vigorously in any litigation that has been or may be instituted
against us; however, litigation is inherently uncertain, and we cannot be certain of the ultimate outcomes of any claims that
have arisen or may arise. Resolution of these types of matters against us may materially affect our ability to conduct our
business in the manner that we expect or otherwise adversely affect us. Litigation, claims or proceedings could also generate
negative publicity that could be detrimental to our reputation.
Governmental regulations and environmental matters could increase the cost and limit the availability of property suitable
for residential lot development and could adversely affect our business and financial results.
We are subject to extensive and complex regulations that affect land acquisition, development and home construction,
including zoning, density restrictions and building standards. These regulations often provide broad discretion to the
administering governmental authorities as to the conditions we must meet prior to acquisition or development being
approved, if approved at all. We are subject to determinations by these authorities as to the adequacy of water or sewage
facilities, roads or other local services. New housing developments may also be subject to various assessments for schools,
parks, streets and other public improvements. In addition, government authorities in many markets have implemented no
growth or growth control initiatives. Any of these may limit, delay or increase the costs of acquisition of land for residential
use and development or home construction.
We are also subject to a significant number and variety of local, state and federal laws and regulations concerning
protection of health, safety, labor standards and the environment. The impact of environmental laws varies depending upon
the prior uses of the building site or adjoining properties and may be greater in areas with less supply where undeveloped
land or desirable alternatives are less available. These matters may result in delays, may cause us to incur substantial
compliance, remediation, mitigation and other costs, and can prohibit or severely restrict land acquisition and development
activity in environmentally sensitive regions or areas. Government agencies also routinely initiate audits, reviews or
investigations of our business practices to ensure compliance with these laws and regulations, which can cause us to incur
costs or create other disruptions in our business that can be significant.
In recent years, advocacy groups, government agencies and the general public have expressed growing concerns
regarding the effects of climate change on the environment. Transition risks, such as government restrictions, standards or
regulations intended to reduce greenhouse gas emissions and potential climate change impacts, are emerging and may
increase in the future in the form of restrictions or additional requirements on land development in certain areas. Such
restrictions and requirements could increase our operating and compliance costs or require additional technology and capital
investment, which could adversely affect our results of operations. This is a particular concern in the western United States,
where some of the most extensive and stringent environmental laws and residential building construction standards in the
country have been enacted, and where we have business operations. We believe we are in compliance in all material respects
with existing climate-related government restrictions, standards and regulations applicable to our business, and such
compliance has not had a material impact on our business. However, given the rapidly changing nature of environmental laws
and matters that may arise that are not currently known, we cannot predict our future exposure concerning such matters, and
our future costs to achieve compliance or remedy potential violations could be significant.
Additionally, actual or perceived sustainability matters and our response to these matters could harm our business.
Increasing governmental and societal attention to sustainability matters, including expanding mandatory and voluntary
reporting, diligence, and disclosure on topics such as climate change, human capital, labor, cybersecurity and risk oversight,
could expand the nature, scope, and complexity of matters that we are required to control, assess and report. In March 2024,
the SEC adopted new rules regarding climate-related disclosures. These rules were subsequently challenged in legal
proceedings, and their effectiveness was stayed by the SEC pending judicial review. In March 2025, the SEC terminated its
defense of the rules; however, if they become effective, they would require public companies to make a wide range of
climate-related disclosures. Similarly, the State of California has enacted its own legislation requiring extensive climate-
related disclosures for companies deemed to be doing business in California, and other states are considering similar laws.
Any of the above factors may alter the environment in which we do business and may increase the ongoing costs of
compliance and adversely impact our results of operations and cash flows. If we are unable to adequately address such
sustainability matters or fail to comply with all laws, regulations, policies and related interpretations, it could negatively
impact our reputation and our business results.
17

The subcontractors we rely on to perform the actual development of our residential lots are also subject to a significant
number of local, state and federal laws and regulations, including laws involving matters that are not within our control. If the
subcontractors who develop our residential lots fail to comply with all applicable laws, we can suffer reputational damage
and may be exposed to liability.
Changes in income tax and securities laws could adversely affect our business and financial results
We are subject to income taxes at the federal, state and local levels, and any changes in tax legislation could adversely
affect our future effective tax rates and the value of our deferred tax assets.
We are also subject to an extensive number of laws and regulations because our common stock is publicly traded in the
capital markets. These regulations govern our communications with our shareholders and the capital markets, our financial
statement disclosures and our legal processes, and they also impact the work required to be performed by our independent
registered public accounting firm and our legal counsel. Changes in these laws and regulations, including the subsequent
implementation of rules by the administering government authorities, may require us to incur additional compliance costs,
and such costs may be significant.
There can be no assurance that our current business strategy will be successful.
Our business strategy is focused on expanding our unique residential lot manufacturing business across a geographically
diverse platform while consolidating market share in the fragmented U.S. lot development industry, primarily through our
strategic relationship with D.R. Horton. There can be no assurance that our unique model will continue to succeed as intended
or that we will be able to continue to execute it effectively because of the risks described elsewhere in this "Risk Factors"
section, or other unforeseen issues or problems that arise. If we are not successful in achieving our objectives, our business,
results of operations, cash flows and financial condition may be negatively affected.
We may have continuing liabilities relating to assets that have been sold, which could adversely impact our results of
operations.
In the course of selling assets, we are typically required to make contractual representations and warranties and to
provide contractual indemnities to the buyers. These contractual obligations typically survive the closing of the transactions
for some period of time. If a buyer is successful in sustaining a claim against us, we may incur additional expenses pertaining
to an asset we no longer own, and we may also be obligated to defend and/or indemnify the buyer from certain third-party
claims. Such obligations could be material and they could adversely impact our results of operations.
Our real estate development operations span several markets and as a result, our financial results may be significantly
influenced by the local economies of those markets.
The local economic growth and strength of the markets in which our real estate development activity is located are
important factors in sustaining demand for our land and lots. Any adverse impact on the economic growth and health, or
infrastructure development, of a local economy in which we develop real estate could materially adversely affect our
business, liquidity, financial condition and results of operations.
Our real estate development operations are highly dependent upon national, regional and local homebuilders.
We are highly dependent upon our relationships with national, regional, and local homebuilders to purchase lots in our
residential developments. If homebuilders do not view our developments as desirable locations for homebuilding operations,
or if homebuilders are limited in their ability to conduct operations due to economic conditions, our business, liquidity,
financial condition and results of operations will be adversely affected.
In addition, we enter into contracts to sell lots to homebuilders. A homebuilder could decide to delay purchases of lots
in one or more of our developments, subject to loss of earnest money, due to adverse real estate conditions wholly unrelated
to our areas of operations, such as corporate decisions regarding allocation of limited capital or human resources. As a result,
we may sell fewer lots and may have lower sales revenues, which could have an adverse effect on our business, liquidity,
financial condition and results of operations.
18

Delays or failures by governmental authorities to take expected actions could reduce our returns or cause us to incur
losses on certain real estate development projects.
For certain projects, we rely on governmental districts to issue bonds to reimburse us for qualified expenses, such as
road and utility infrastructure costs. Bonds are often supported by assessments of district tax revenues, usually from ad
valorem taxes. Slowing new home sales, decreasing real estate values or difficult credit markets for bond sales can reduce or
delay district bond sale revenues and tax or assessment receipts, causing such districts to delay reimbursement of our
qualified expenses. Failure to receive reimbursement for qualified expenses could adversely affect our cash flows and reduce
our returns or cause us to incur losses on certain real estate development projects.
Failure to succeed in new markets may limit our growth.
We may from time to time commence development activity or make acquisitions outside of our existing market areas if
appropriate opportunities arise. Our historical experience in existing markets does not ensure that we will be able to operate
successfully in new markets. We may be exposed to a variety of risks if we choose to enter new markets, including, among
others:
•
an inability to accurately evaluate local housing market conditions and local economies;
•
an inability to obtain land for development or to identify appropriate acquisition opportunities;
•
an inability to hire and retain key personnel;
•
an inability to successfully integrate operations; and
•
lack of familiarity with local governmental and permitting procedures.
We plan to raise additional capital in the future, and such capital may not be available when needed or at all.
As of September 30, 2025, we had a $640 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 facility includes bank commitments of $575 million maturing on December 18, 2029 and
$65 million maturing on October 28, 2026. On October 30, 2025, we exercised the accordion feature under our credit facility
and increased the total commitments by $25 million, resulting in total commitments of $665 million, of which $600 million
matures on December 18, 2029 and $65 million matures on October 28, 2026. The facility also provides for the issuance of
letters of credit with a sublimit equal to the greater of $100 million and 50% of the total revolving credit commitments. We
also have outstanding $300 million principal amount of 5.0% senior notes due 2028 and $500 million principal amount of
6.5% senior notes due 2033, all of which may be redeemed prior to maturity, subject to certain limitations and premiums
defined in the indenture agreements. The notes represent senior unsecured obligations that rank equally in right of payment to
all existing and future senior unsecured indebtedness and are guaranteed by each of our subsidiaries to the extent such
subsidiaries guarantee our revolving credit facility.
We regularly assess our projected capital requirements to fund growth in our business, repay debt obligations and
support other general corporate and operational needs, and we regularly evaluate our opportunities to raise additional capital.
We have an effective shelf registration statement, filed with the SEC 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 we entered into in
November 2024. In fiscal 2025, we did not issue any shares under its at-the-market equity offering program. At
September 30, 2025, the full $750 million remained available for issuance under our shelf registration statement, with $300
million reserved for sales under the at-the-market equity offering program.
We plan to raise additional capital in the future, in the form of additional debt or equity, to have sufficient capital
resources and liquidity to fund our business needs and future growth plans and repay existing indebtedness. Our ability to
raise additional capital will depend on, among other things, conditions in the capital markets at that time, which are outside of
our control, and our financial condition, operating performance and growth prospects. Economic conditions may increase our
cost of funding and limit access to certain customary sources of capital or make such capital only available on unfavorable
terms. We may not be able to obtain capital on acceptable terms or at all. Any occurrence that may limit our access to the
capital markets, such as a decline in the confidence of debt purchasers or counterparties participating in the capital markets or
other disruption in capital markets, may adversely affect our capital costs and our ability to raise capital and, in turn, our
liquidity. Further, we may need to raise capital in the future when other real estate-related companies are also seeking to raise
capital and would then have to compete with those companies for investors. An inability to raise additional capital on
acceptable terms when needed could have a material adverse effect on our business, financial condition and results of
operations.
19

The real estate development industry is highly competitive and a number of entities with which we compete are larger and
have greater resources or are smaller and have lower cost structures, and competitive conditions may adversely affect our
results of operations.
We operate in a highly competitive industry. Competitive conditions in the real estate development industry may result
in difficulties acquiring suitable land at acceptable prices, lower sales volumes and prices, increased development or
construction costs and delays in construction. We compete with numerous regional and local developers for the acquisition of
land suitable for development. We also compete with national, regional and local homebuilders who develop real estate for
their own use in homebuilding operations, many of which are larger and have greater resources than we do or are smaller and
have lower cost structures than we do. Any improvement in the cost structure or service of our competitors will increase the
competition we face. Our business, financial condition and results of operations may be negatively affected by any of these
factors.
Risks Related to Our Indebtedness
We have significant amounts of consolidated debt and may incur additional debt; our debt obligations and our ability to
comply with related covenants, restrictions or limitations could adversely affect our financial condition.
As of September 30, 2025, our consolidated debt was $802.7 million, including $300 million principal amount of 5.0%
senior notes due 2028 and $500 million principal amount of 6.5% senior notes due 2033. Our revolving credit facility and the
indentures governing the senior notes impose restrictions on our ability, and our restricted subsidiaries’ abilities, to incur
secured and unsecured debt, but still permit us and our restricted subsidiaries to incur a substantial amount of future secured
and unsecured debt, and do not restrict the incurrence of future secured and unsecured debt by our unrestricted subsidiaries.
The indentures governing the senior notes allow us to incur a substantial amount of additional debt.
Possible Consequences
The amount and the maturities of our debt could have important consequences. For example, they could:
•
require us to dedicate a substantial portion of our cash flow from operations to payment of our debt and reduce our
ability to use our cash flow for other operating or investing purposes;
•
limit our flexibility to adjust to changes in our business or economic conditions; and
•
limit our ability to obtain future financing for working capital, capital expenditures, acquisitions, debt service
requirements or other requirements.
In addition, our debt and the restrictions imposed by the instruments governing those obligations expose us to additional
risks, including:
Dependence on Future Performance
Our ability to meet our debt service and other obligations, including our obligations under the senior notes and the
financial covenants under our revolving credit facility, will depend, in part, upon our future financial performance. Our future
results are subject to the risks and uncertainties described in this "Risk Factors" section. Our revenues and earnings vary with
the level of general economic activity in the markets we serve. Our business is also affected by financial, political, business
and other factors, many of which are beyond our control. The factors that affect our ability to generate cash can also affect
our ability to raise additional funds for these purposes through the sale of debt or equity, the refinancing of debt or the sale of
assets.
Risks of Variable Rate Debt
Changes in prevailing interest rates may affect the cost of our debt service obligations, because borrowings under our
revolving credit facility bear interest at floating rates. Borrowings under our revolving credit facility primarily bear interest
based on the Secured Overnight Financing Rate ("SOFR").
20

Changes in Debt Ratings
There can be no assurance that we will be able to maintain the credit ratings on our senior unsecured debt. Any
lowering of our debt ratings could make accessing the capital markets or obtaining additional credit from banks more difficult
and/or more expensive.
Change of Control Purchase Option and Change of Control Default.
Upon the occurrence of a change of control triggering event, as defined in the indentures governing the senior notes, we
will be required to offer to repurchase such notes at 101% of their principal amount, together with all accrued and unpaid
interest, if any. Moreover, a change of control, as defined in our revolving credit facility, would constitute an event of default
under our revolving credit facility that could result in the acceleration of the repayment of any borrowings outstanding under
our revolving credit facility, a requirement to cash collateralize all letters of credit outstanding thereunder and the termination
of the commitments thereunder. If any of our or our restricted subsidiaries’ indebtedness together having an aggregate
principal amount outstanding of $40 million or more, in the case of the indenture governing our 5.0% senior notes due 2028,
or $75 million or more, in the case of our 6.5% senior notes due 2033, were accelerated and such acceleration were not
rescinded or such indebtedness were not satisfied, in either case within 30 days, an event of default would result under the
indentures governing the senior notes, entitling the trustee for the senior notes or holders of at least 25%, in the case of the
5.0% senior notes due 2028, or 30%, in the case of the 6.5% senior notes due 2033, in aggregate principal amount of the
applicable series of the notes to declare all such notes to be due and payable immediately. If purchase offers were required
under the indentures for the senior notes, repayment of the borrowings under our revolving credit facility were required, or if
the notes were accelerated, we can give no assurance that we would have sufficient funds to pay the required amounts.
Our debt agreements contain a number of restrictive covenants which will limit our ability to finance future operations,
acquisitions or capital needs or engage in other business activities that may be in our interest.
The covenants in the indentures governing the senior notes and the credit agreement governing our revolving credit
facility impose, and the terms of any future indebtedness may impose, operating and other restrictions on us and our
subsidiaries. Such restrictions affect or will affect, and in many respects limit or prohibit, among other things, our ability and
the ability of certain of our subsidiaries to:
•
incur additional indebtedness;
•
create liens;
•
pay dividends and make other distributions in respect of our equity securities;
•
redeem or repurchase our equity securities;
•
make certain investments or certain other restricted payments;
•
sell certain kinds of assets;
•
enter into certain types of transactions with affiliates; and
•
effect mergers or consolidations.
In addition, our revolving credit facility contains financial covenants requiring the maintenance of a minimum level of
tangible net worth, a minimum level of liquidity, a maximum allowable leverage ratio and a borrowing base restriction based
on the book value of our real estate assets and unrestricted cash.
The restrictions contained in the indentures and the credit agreements could (1) limit our ability to plan for or react to
market or economic conditions or meet capital needs or otherwise restrict our activities or business plans and (2) adversely
affect our ability to finance our operations, acquisitions, investments or strategic alliances or other capital needs or to engage
in other business activities that would be in our interest.
A breach of any of these covenants could result in a default under all or certain of our debt instruments. If an event of
default occurs, such creditors could elect to:
•
declare all amounts outstanding, together with accrued and unpaid interest, to be immediately due and payable;
•
require us to apply all of our available cash to repay such amounts; or
•
prevent us from making debt service payments on certain of our debt instruments.
21

General Risk Factors
The market price of and trading volume of our shares of common stock may be volatile.
The market price of our shares of common stock has fluctuated substantially and may continue to fluctuate in response
to many factors which are beyond our control, including:
•
fluctuations in our operating results, including results that vary from the expectations of management, analysts and
investors;
•
announcements of strategic developments, acquisitions, financings and other material events by us or our
competitors;
•
the sale of a substantial number of shares of our common stock held by existing security holders in the public
market; and
•
general conditions in the real estate industry.
The stock markets in general may experience extreme volatility that may be unrelated to the operating performance of
particular companies. These broad market fluctuations may adversely affect the trading price of our common stock, making it
difficult to predict the market price of our common stock in the future and causing the value of our common stock to decline.
Our business may suffer if we lose key personnel.
We depend to a large extent on the services of certain key management personnel. These individuals have significant
experience and skills as well as leadership and management abilities that are vital to our success. Our ability to attract and
retain our key personnel may be impacted by matters involving reputation, culture, diversity and inclusion, compensation and
benefits and our management of executive succession. We seek to retain our key personnel to have succession and transition
plans in place to address the potential loss of key personnel and to manage personnel transitions due to retirements,
promotions, transfers and other circumstances. However, if our retention, succession and transition implementation efforts are
unsuccessful, the loss of key personnel could adversely affect our business.
22

Item 1B.
Unresolved Staff Comments.
None.
Item 1C.
Cybersecurity.
Risk Management and Strategy
Under our Shared Services Agreement with D.R. Horton, D.R. Horton provides us with certain administrative and
compliance services which includes information technology, internal audit and information technology risk services.
Leveraging these services provided by D.R. Horton related to cybersecurity, we have processes in place for assessing,
identifying, and managing risks from cybersecurity threats that may result in material adverse effects to the confidentiality,
integrity and availability of our systems, operations and data. These processes are a part of our overall risk assessment process.
Risks from cybersecurity threats include, among other things, unauthorized access, data theft, computer viruses, ransomware,
malicious software and other disruptions. We have implemented systems and processes utilizing a multilayered, proactive
approach to identify, evaluate, mitigate and prevent potential cybersecurity threats. Each of these layers contain multiple levels
of protection and leverage industry standard framework including the National Institute of Standards and Technology (NIST)
Cybersecurity Framework. At the management level, these systems and processes are overseen primarily by the D.R. Horton
Chief Information Officer (CIO) and Cyber Security Risk Officer (CSRO).
We have implemented processes to assess, identify, and manage risks from cybersecurity threats, including the following:
•
Multi-factor Authentication: We secure access to our network and systems through multi-factor authentication.
•
Layered Email Protection: We have adopted a layered approach to email protection.
•
Zero-Trust Security Model: We are working towards a zero-trust security model, utilizing group-based access
controls to manage network resources.
•
Continuous Monitoring: We continuously monitor our systems for security anomalies, to help enable early
detection of issues and facilitating a rapid response.
•
Regular Scans: We conduct weekly and monthly scans to identify and prioritize the mitigation of the most critical
vulnerabilities.
•
Quarterly Penetration Testing: We engage third-party consultants to perform quarterly penetration testing,
examining our environment from various perspectives, including end-user and employee use cases, to thoroughly
assess system vulnerabilities.
•
Collaborative Evaluation and Remediation: In collaboration with our third-party consultants, we evaluate the
outcomes of our testing, address and remediate any identified issues, and subsequently re-test the environment to
confirm that the mitigations have effectively resolved the vulnerabilities.
•
Regular Assessments and Gap Analyses: Our cybersecurity team regularly meets with the third-party
consultants to assess overall risk and conduct gap analyses, ensuring the effectiveness of our current cybersecurity
measures.
•
Comprehensive Risk Assessment: Our comprehensive risk assessment includes evaluating potential security
risks associated with the use of external service providers.
•
Incident Response Readiness: We maintain a documented incident response readiness process that details the
procedures to follow in the event of a security incident.
•
Data Backup: We maintain comprehensive backups of all system files to facilitate data recovery during a security
incident.
In addition to the above-described technology controls, we have implemented mandatory training and awareness programs
designed to educate our employees on cybersecurity risks. These include periodic exercises to help employees identify phishing
schemes and other social engineering tactics, and we provide various methods for them to report suspicious activity that may
give rise to a cybersecurity incident.
23

To date, we have not identified any risks from known cybersecurity threats, including as a result of any previous
cybersecurity incidents, that have materially affected or are reasonably likely to materially affect our business strategy, results
of operations or financial condition. However, because the sophistication of cybersecurity threats continues to increase with
rapidly evolving techniques to overcome security measures, the preventative actions we have taken and will continue to take to
reduce the risks may not successfully protect our systems against a future cybersecurity incident. For more information on how
cybersecurity risk could materially affect our business, please refer to Item 1A, "Risk Factors."
Governance
Our Board of Directors (Board) considers cybersecurity and other information technology risk as part of its risk oversight
function. The members of our Board hear presentations on our cybersecurity risks and risk management on an annual basis
from D.R. Horton's CIO and CSRO. These presentations include reviewing current trends, processes and systems used to
mitigate the risk of cybersecurity threats. Our internal audit department also conducts cybersecurity reviews as part of its audit
procedures and presents any findings to the Board. We have protocols by which certain cybersecurity incidents would be
escalated within the Company and, where appropriate, reported to the Board in a timely manner.
We invest a considerable amount of resources in training, tools and other resources to manage risks from cybersecurity
threats. Our cybersecurity program is led by an experienced team that creates cybersecurity policies and procedures and possess
expert knowledge related to controls and safeguards related to cybersecurity. The cybersecurity team, led by the D.R. Horton
CIO, is responsible for assessing and managing risks from cybersecurity threats. The D.R. Horton CIO receives reports on
cybersecurity threats from the cybersecurity team on an ongoing basis and in conjunction with the CSRO, regularly reviews risk
management measures implemented by the Company to identify and mitigate data protection and cybersecurity risks. The D.R.
Horton CIO and CSRO work closely with our legal team to oversee compliance with legal, regulatory and contractual security
requirements.
D.R. Horton's CIO has 36 years of experience working in information technology including roles in the commercial
software development, healthcare, industrial and professional services sectors. While in those roles, the D.R. Horton CIO has
led governance, risk, and compliance technology programs and information security programs. The D.R. Horton CIO currently
reports to the D.R. Horton CFO.
D.R. Horton's CSRO has 24 years of experience working in information technology and cyber security roles including
software development, identity and access management projects, privilege account management and multifactor authentication
implementations. While in those roles, the D.R. Horton CSRO has led projects and implementations for a variety of
organizations that assess and create solutions for security concerns. The D.R. Horton CSRO currently reports to the D.R.
Horton CIO.
Supporting the D.R. Horton CIO and CSRO is a dedicated cybersecurity team that designs and monitors our cybersecurity
control framework as well as implements cybersecurity control systems and solutions. The D.R. Horton cybersecurity team
collectively holds the following degrees and certifications: Master’s in Cybersecurity, Certified Information Systems Security
Professional, Security+, Network+, AQS Certified Cloud Practitioner and Certified Information Systems Auditor.
24

Item 2.
Properties.
Our principal executive office is leased and is located in Arlington, Texas. We also lease office space in other locations to
support our business operations.
Item 3.
Legal Proceedings.
We are involved in various legal proceedings that arise from time to time in the ordinary course of our business. We
believe we have established adequate reserves for any probable losses and that the outcome of any of the proceedings should
not have a material adverse effect on our financial position or long-term results of operations or cash flows. It is possible,
however, that charges related to these matters could be significant to our results of operations or cash flow in any single
accounting period.
With respect to administrative or judicial proceedings involving the environment, we have determined that we will
disclose any such proceeding if we reasonably believe such proceeding will result in monetary sanctions, exclusive of interest
and costs, at or in excess of $1 million.
On April 29, 2025, a verified stockholder of the Company filed a derivative complaint in the Delaware Court of Chancery,
on behalf of the Company, against D.R. Horton, Inc., the Company’s Executive Chairman, and certain of the Company’s
directors. The complaint, which is captioned Mississippi Public Employees’ Retirement System v. D.R. Horton, Inc., C.A. No.
2025-0465-MTZ, asserts claims for breach of fiduciary duty arising out of lot sale transactions between the Company and D.R.
Horton. The complaint seeks judgment awarding the Company damages against the defendants and awarding the plaintiff the
costs and disbursements of the action, including reasonable attorneys’ and experts’ fees.
The Company disputes the allegations of wrongdoing in this matter. Nevertheless, the outcome of this lawsuit is uncertain
and cannot be predicted with any certainty. Accordingly, at this time, the Company is not able to estimate a possible loss or
range of loss that may result from this lawsuit or to determine whether such loss, if any, would have a material adverse effect on
its business, financial condition, results of operations or liquidity.
On September 6, 2024, the Maryland Department of Environment (MDE) filed suit in the Circuit Court for Harford
County, Maryland against the Company regarding various alleged stormwater compliance issues and violations at a project in
Maryland dating from 2022 through 2024, seeking injunctive relief and civil penalties. Since our first discovery of these issues,
we have enhanced our practices and procedures related to stormwater compliance at the project in question, and we are seeking
to resolve these matters through further discussions with MDE. We do not believe it is reasonably possible that this matter
would result in a loss that would have a material effect on our consolidated financial position, results of operations or cash
flows.
Item 4.
Mine Safety Disclosures.
Not Applicable.
25

PART II
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Market Information
Our common stock is traded on the NYSE and the NYSE Texas under the trading symbol "FOR." As of November 14,
2025, the closing price of our common stock on the NYSE and NYSE Texas was $24.42, and there were approximately 718
holders of record.
Dividend Policy
We currently intend to retain any future earnings to support our business. The declaration and payment of any future
dividends will be at the discretion of our Board of Directors after taking into account various factors, including without
limitation, our financial condition, earnings, capital requirements of our business, the terms of any credit agreements or
indentures to which we may be a party at the time, legal requirements, industry practice and other factors that our Board of
Directors deems relevant.
26

Stock Performance Graph
The following graph illustrates the cumulative total stockholder return of an initial investment of $100 on September 30,
2020 in Forestar common stock for the period from September 30, 2020 through September 30, 2025 compared to the same
investment in the Russell 2000 Index and our peer group.
Pursuant to SEC rules, returns of each of the companies in the peer groups are weighted according to the respective
company’s stock market capitalization at the beginning of each period for which a return is indicated. Shareholder returns over
the indicated period are based on historical data and should not be considered indicative of future shareholder returns. The
graph and related disclosure in no way reflect our forecast of future financial performance.
The peer group for the current year is unchanged from the prior year, except The St. Joe Company was excluded in fiscal
2025 solely because a significant portion of its business is now unrelated to the residential development industry and is
primarily focused on hospitality and leasing. This change was made to ensure the peer group remains representative of
companies with similar industry focus, market capitalization, and business models. The companies included in our peer group
consist of American Woodmark Corporation; Beazer Homes USA, Inc.; Century Communities, Inc.; Five Point Holdings, LLC;
Howard Hughes Holdings Inc.; JELD-WEN Holding, Inc.; LGI Homes, Inc.; M/I Homes, Inc.; and MasterBrand, Inc. The peer
group is reviewed annually to ensure continued relevance for performance comparison.
Comparison of Five-Year Cumulative Total Return
Forestar Group Inc.
Russell 2000
Peer Group
Sep-20
Sep-21
Sep-22
Sep-23
Sep-24
Sep-25
0
50
100
150
200
Stock Performance Data:
2020
2021
2022
2023
2024
2025
Forestar Group Inc.
$
100.00
$
105.25
$
63.22
$
152.20
$
182.88
$
150.23
Russell 2000
100.00
147.68
112.98
123.06
156.00
172.78
Peer Group
100.00
128.12
74.19
114.68
160.13
118.67
This performance graph shall not be deemed to be incorporated by reference into our SEC filings and should not
constitute soliciting material or otherwise be considered filed under the Securities Act of 1933, as amended (Securities Act) or
the Exchange Act.
Item 6.
[Reserved]
27

Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to
promote an understanding of our financial condition, results of operations, liquidity and certain other factors that may affect
future results. MD&A is provided as a supplement to, and should be read in conjunction with our consolidated financial
statements and notes to those statements that appear elsewhere in this Form 10-K. This section generally discusses the results of
operations for fiscal 2025 compared to 2024. For similar operating and financial data and discussion of our fiscal 2024 results
compared to our fiscal 2023 results, refer to Item 7, "Management’s Discussion and Analysis of Financial Condition and
Results of Operations" under Part II of our annual report on Form 10-K for the fiscal year ended September 30, 2024, which
was filed with the SEC on November 19, 2024.
The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Actual results
could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to any
differences include, but are not limited to, those discussed under the caption "Forward-Looking Statements" and under Item 1A
—"Risk Factors."
Our Operations
We are a residential lot development company with operations in 64 markets in 23 states as of September 30, 2025. In
October 2017, we became a majority-owned subsidiary of D.R. Horton, Inc. As our controlling shareholder, D.R. Horton has
significant influence in guiding our strategic direction and operations.
We manage our operations through our real estate segment, which is our core business and generates substantially all of
our revenues. The real estate segment primarily acquires land and installs infrastructure for single-family residential
communities, and its revenues generally come from sales of residential single-family finished lots to local, regional and national
homebuilders. We have other business activities for which the related assets and operating results are immaterial and therefore
are included within our real estate segment.
In fiscal year 2025, new home demand continued to be impacted by ongoing affordability constraints and cautious
consumer sentiment during fiscal 2025. Homebuilders have continued to offer elevated levels of sales incentives, such as
mortgage rate buydowns, to address affordability and spur the demand for new homes. Despite current market conditions, our
revenues increased 10% from the prior year period. Our ongoing focus is primarily to develop lots for homes at affordable price
points. While the disruptions in the supply chain for certain construction materials and tightness in the labor market have
largely subsided, delays in receiving the necessary approvals from municipalities are still extending development cycle times in
certain markets, and development costs remain elevated. We attempt to offset cost increases in one component with savings in
another, and we increase our land and lot sales prices when market conditions permit. However, if market conditions are
challenging, we may have to reduce selling prices or may not be able to offset cost increases with higher selling prices.
We remain focused on managing the pricing and sales pace in each of our communities to optimize the returns on our
inventory investments and adjust to local market conditions and demand. To adjust to changes in market conditions during
recent years, we have reduced lot prices where necessary.
We believe we are well-positioned to consolidate market share in the highly fragmented lot development industry because
of our national footprint and strong local teams, our low net leverage and strong liquidity position, lower overhead model,
geographically diverse lot portfolio that is focused on affordable price points and strategic relationship with D.R. Horton. We
plan to remain disciplined when investing in land opportunities and to remain focused on managing our lot sales pace and lot
pricing at each community to optimize the return on our investments.
28

Results of Operations
The following tables and related discussion set forth key operating and financial data as of and for the fiscal years ended
September 30, 2025 and 2024.
Operating Results
Components of income before income taxes were as follows:
Year Ended September 30,
2025
2024
(In millions)
Revenues .................................................................................................................................. $
1,662.4
$
1,509.4
Cost of sales .............................................................................................................................
1,298.9
1,150.1
Selling, general and administrative expense ............................................................................
154.4
118.5
Equity in earnings of unconsolidated ventures.........................................................................
(0.6)
—
Gain on sale of assets ...............................................................................................................
(4.5)
(9.5)
Interest and other income.........................................................................................................
(6.3)
(19.8)
Loss on extinguishment of debt ...............................................................................................
1.2
—
Income before income taxes..................................................................................................... $
219.3
$
270.1
Lot Sales
Residential lots sold consisted of:
Year Ended September 30,
2025
2024
Development projects...............................................................................................................
13,892
14,769
Lot banking projects.................................................................................................................
348
299
14,240
15,068
Average sales price per lot (a) ................................................................................................... $
108,400
$
96,600
_______________
(a) Excludes any impact from change in contract liabilities.
29

Revenues
Revenues consisted of:
Year Ended September 30,
2025
2024
(In millions)
Residential lot sales:
Development projects........................................................................................................... $
1,499.8
$
1,418.5
Lot banking projects .............................................................................................................
43.4
37.9
Decrease in contract liabilities..............................................................................................
1.1
2.9
1,544.3
1,459.3
Deferred development projects ................................................................................................
—
8.1
1,544.3
1,467.4
Tract sales and other.................................................................................................................
118.1
42.0
Total revenues .......................................................................................................................... $
1,662.4
$
1,509.4
Residential lot sales to D.R. Horton and customers other than D.R. Horton consisted of:
Year Ended September 30,
2025
2024
Residential lots sold to D.R. Horton.........................................................................................
11,751
13,267
Residential lots sold to customers other than D.R. Horton ......................................................
2,489
1,801
14,240
15,068
Residential lot revenues from lot sales to D.R. Horton and customers other than D.R. Horton, before deferred
development projects and changes in contract liabilities, consisted of:
Year Ended September 30,
2025
2024
(In millions)
Revenues from lot sales to D.R. Horton................................................................................... $
1,277.6
$
1,271.4
Revenues from lot sales to customers other than D.R. Horton ................................................
265.6
185.0
$
1,543.2
$
1,456.4
Residential lot sales revenues in fiscal 2025 increased compared to the prior year period, primarily due to the increase in
our average selling price per lot which was partially offset by the decrease in lot sales volume. The increase in our average sales
price per lot was primarily due to changes in the regional mix of lot sales.
Lots sold to customers other than D.R. Horton in fiscal 2025 and 2024 included 927 and 124 lots, respectively, that were
sold for $83.4 million and $15.1 million, respectively, to a lot banker who expects to sell those lots to D.R. Horton at a future
date.
Tract sales and other revenue in fiscal 2025 primarily consisted of 414 tract acres sold to D.R. Horton for $91.2 million as
well as 90 tract acres sold to customers other than D.R. Horton for $12.3 million. Tract sales and other revenue to D.R. Horton
in fiscal 2025 includes a multifamily site representing 273 rental units which we developed and sold to D.R. Horton for $10.7
million of revenue. Tract sales and other revenue sold to customers other than D.R. Horton in fiscal 2025 included 42 tract acres
sold for $5.3 million to a third party who expects to sell finished lots to D.R Horton at a later date. Tract sales and other revenue
in fiscal 2024 primarily consisted of 32 tract acres sold to D.R. Horton for $15.2 million and 64 tract acres sold to customers
other than D.R. Horton for $11.8 million.
30

Cost of Sales, Real Estate Impairment and Land Option Charges and Interest Incurred
Cost of sales in fiscal 2025 increased compared to fiscal 2024 primarily due to the increase in revenues. Cost of sales
related to tract sales and other revenues in fiscal 2025 and 2024 was $72.4 million and $17.4 million, respectively.
Each quarter, we review the performance and outlook for all of our real estate for indicators of potential impairment and
perform detailed impairment evaluations and analyses when necessary. As a result of this process, no impairment charges were
recorded during fiscal 2025 and 2024. During fiscal 2025 and 2024, land purchase contract deposit and pre-acquisition cost
write-offs related to land purchase contracts that we have terminated or expect to terminate were $7.2 million and $4.1 million.
We capitalize interest costs throughout the development period (active real estate). Capitalized interest is charged to cost
of sales as the related real estate is sold to the buyer. Interest incurred was $45.5 million and $32.6 million in fiscal 2025 and
2024. Interest charged to cost of sales in fiscal 2025 was 2.4% of total cost of sales (excluding impairments and land option
charges) compared to 2.5% of total cost of sales in fiscal 2024.
Selling, General and Administrative (SG&A) Expense and Other Income Statement Items
SG&A expense in fiscal 2025 was $154.4 million compared to $118.5 million in fiscal 2024. SG&A expense as a
percentage of revenues was 9.3% and 7.9% in fiscal 2025 and 2024, respectively. Our SG&A expense primarily consisted of
employee compensation and related costs. Our business operations employed 433 and 393 employees at September 30, 2025
and 2024, respectively. We attempt to control our SG&A costs while ensuring that our infrastructure supports our operations;
however, we cannot make assurances that we will be able to maintain or improve upon the current SG&A expense as a
percentage of revenues.
Loss on extinguishment of debt of $1.2 million in fiscal 2025 was due to the repurchase and redemption of our $400
million principal amount of 3.85% senior notes due 2026.
The gain on sale of assets in fiscal 2025 and 2024 is the result of $4.5 million and $9.5 million, respectively, of excess
hotel occupancy and sales and use tax revenues collected from the Cibolo Canyons Special Improvement District.
Interest and other income primarily represents interest earned on our cash deposits.
Income Taxes
Our income tax expense was $51.4 million and $66.7 million in fiscal 2025 and 2024, respectively, and our effective tax
rate was 23.4% and 24.7% for 2025 and 2024, respectively. Our effective tax rate for both years includes an expense for state
income taxes and non-deductible expenses and a benefit for stock-based compensation. Our fiscal 2025 effective tax rate has a
benefit for nontaxable income.
At September 30, 2025, we had deferred tax liabilities, net of deferred tax assets, of $85.6 million. The deferred tax assets
were partially offset by a valuation allowance of $0.6 million, resulting in a net deferred tax liability of $86.2 million. At
September 30, 2024, deferred tax liabilities, net of deferred tax assets, were $66.7 million. The deferred tax assets were partially
offset by a valuation allowance of $0.8 million, resulting in a net deferred tax liability of $67.5 million. The valuation
allowance for both periods was recorded because it is more likely than not that a portion of our state deferred tax assets,
primarily NOL carryforwards, will not be realized because we are no longer operating in some states or the NOL carryforward
periods are too brief to realize the related deferred tax asset. We will continue to evaluate both the positive and negative
evidence in determining the need for a valuation allowance on our deferred tax assets. Any reversal of the valuation allowance
in future periods will impact our effective tax rate.
We had no unrecognized tax benefits at September 30, 2025 and 2024.
On July 4, 2025, the One Big Beautiful Bill Act was signed into law (the new law). None of the tax provisions enacted by
the new law have a significant impact on our financial statements.
31

Land and Lot Position
Our land and lot position at September 30, 2025 and 2024 is summarized as follows:
September 30,
2025
2024
Lots owned...............................................................................................................................
65,100
57,800
Lots controlled through land and lot purchase contracts.........................................................
34,700
37,300
Total lots owned and controlled .......................................................................................
99,800
95,100
Owned lots under contract to sell to D.R. Horton ...................................................................
22,800
20,500
Owned lots under contract to customers other than D.R. Horton............................................
1,000
500
Total owned lots under contract .......................................................................................
23,800
21,000
Owned lots subject to right of first offer with D.R. Horton based on executed purchase and
sale agreements........................................................................................................................
17,600
17,200
Owned lots fully developed.....................................................................................................
8,900
6,300
Liquidity and Capital Resources
Liquidity
At September 30, 2025, we had $379.2 million of cash and cash equivalents and $588.9 million of available borrowing
capacity on our revolving credit facility. We have no senior note maturities until fiscal 2028. We believe we are well-positioned
to operate effectively during changing economic conditions because of our low net leverage and strong liquidity position, our
low overhead model and our strategic relationship with D.R. Horton.
At September 30, 2025, our ratio of debt to total capital (debt divided by stockholders’ equity plus debt) was 31.2%
compared to 30.7% at September 30, 2024. Our ratio of net debt to total capital (debt net of unrestricted cash divided by
stockholders’ equity plus debt net of unrestricted cash) was 19.3% compared to 12.4% at September 30, 2024. Over the long
term, we intend to maintain our ratio of net debt to total capital at approximately 40% or less. We believe that the ratio of net
debt to total capital is useful in understanding the leverage employed in our operations.
We believe that our existing cash resources and revolving credit facility will provide sufficient liquidity to fund our near-
term working capital needs. Our ability to achieve our long-term growth objectives will depend on our ability to obtain
financing in sufficient amounts. We regularly evaluate alternatives for managing our capital structure and liquidity profile in
consideration of expected cash flows, growth and operating capital requirements and capital market conditions. We may, at any
time, be considering or preparing for the purchase or sale of our debt securities, the sale of our common stock or a combination
thereof.
Bank Credit Facility
As of September 30, 2025, we had a $640 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 facility includes bank commitments of $575 million maturing on December 18, 2029 and
$65 million maturing on October 28, 2026. On October 30, 2025, we exercised the accordion feature under our credit facility
and increased the total commitments by $25 million, resulting in total commitments of $665 million, of which $600 million
matures on December 18, 2029 and $65 million matures on October 28, 2026. The facility also provides for the issuance of
letters of credit with a sublimit equal to the greater of $100 million and 50% of the total revolving credit commitments.
Borrowings under the revolving credit facility are subject to a borrowing base calculation based on the book value of our real
estate assets and unrestricted cash. Letters of credit issued under the facility reduce the available borrowing capacity. At
September 30, 2025, there were no outstanding borrowings and $51.1 million of letters of credit issued under the revolving
credit facility, resulting in available capacity of $588.9 million.
32

The revolving credit facility is guaranteed by our wholly-owned subsidiaries that are not immaterial subsidiaries and have
not been designated as unrestricted subsidiaries. The revolving credit facility includes customary affirmative and negative
covenants, events of default and financial covenants. The financial covenants require a minimum level of tangible net worth, a
minimum level of liquidity and a maximum allowable leverage ratio. These covenants are measured as defined in the credit
agreement governing the facility and are reported to the lenders quarterly. 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 September 30, 2025, we were in compliance with all of the
covenants, limitations and restrictions of our revolving credit facility.
Senior Notes
We have 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 notes represent senior unsecured obligations that rank equally in right of payment to
all existing and future senior unsecured indebtedness and may be redeemed prior to maturity, subject to certain limitations and
premiums defined in the respective indenture. The notes are guaranteed by each of our subsidiaries to the extent such
subsidiaries guarantee our revolving credit facility.
In March 2025, we issued $500 million principal amount of 6.5% senior notes due March 15, 2033 (the "2033 notes"),
with interest payable semiannually. The annual effective interest rate of the 2033 notes after giving effect to the amortization of
financing costs is 6.7%. The net proceeds from this issuance were primarily used to fund our tender offer to purchase any and
all of our outstanding $400 million principal amount of 3.85% senior notes due 2026 (the "2026 notes"), of which $329.4
million aggregate principal amount was tendered. The repurchase price of $333.4 million included accrued and unpaid interest
of $4.2 million. In September 2025, we redeemed the remaining $70.6 million principal amount of our 3.85% senior notes for
$71.6 million, which included $1.0 million of accrued and unpaid interest. In fiscal 2025, we recognized a $1.2 million loss on
extinguishment of debt related to the repurchase and redemption of our 2026 notes.
At any time prior to March 15, 2028, we may, on one or more occasions, redeem up to 40% of the aggregate principal
amount of the 2033 notes with the net cash proceeds from certain equity offerings at a redemption price of 106.5% of the
principal amount of the 2033 notes being redeemed. At any time prior to March 15, 2028, we may redeem some or all of the
2033 notes at a redemption price of 100% of the principal amount thereof plus a specified "make whole" premium described in
the indenture. We also have the option, at any time on or after March 15, 2028 to redeem some or all of the 2033 notes at
103.25% of their principal amount plus any accrued and unpaid interest. In accordance with the indenture, the redemption price
decreases annually thereafter and the 2033 notes can be redeemed at par on or after March 15, 2030 through maturity.
We also have $300 million principal amount of 5.0% senior notes (the "2028 notes") outstanding, which 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 annual effective interest rate of the 2028 notes after giving effect to the amortization of financing costs is 5.2%.
The indentures governing the senior notes require that, upon the occurrence of both a change of control and a rating
decline (as defined in each indenture), we offer to purchase the applicable series of notes at 101% of their principal amount,
plus accrued and unpaid interest. Under the indenture governing the 2028 notes, if we or our restricted subsidiaries dispose of
assets, under certain circumstances, we will be required to either invest the net cash proceeds from such asset sales in our
business within a specified period of time, repay certain senior secured debt or debt of our non-guarantor subsidiaries, or make
an offer to purchase a principal amount of such notes equal to the excess net cash proceeds at a purchase price of 100% of their
principal amount.
The indenture governing the 2028 notes contain covenants that, among other things, restrict the ability of us and our
restricted subsidiaries to pay dividends or distributions, repurchase equity, prepay subordinated debt and make certain
investments; incur additional debt or issue mandatorily redeemable equity; incur liens on assets; merge or consolidate with
another company or sell or otherwise dispose of all or substantially all of our assets; enter into transactions with affiliates; and
allow to exist certain restrictions on the ability of subsidiaries to pay dividends or make other payments. The indenture
governing the 2033 notes contains certain covenants that, among other things, restrict the ability of us and our restricted
subsidiaries to create certain liens on assets; engage in certain sale and leaseback transactions; 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 us and our
restricted subsidiaries (taken as a whole). At September 30, 2025, we were in compliance with all of the limitations and
restrictions associated with our senior note obligations.
33

Effective April 30, 2020, our Board of Directors authorized the repurchase of up to $30 million of our debt securities. The
authorization has no expiration date. All of the $30 million authorization remained at September 30, 2025.
Other Note Payable
In December 2023, we issued a note payable of $9.9 million as part of a transaction to acquire real estate for development.
The note is non-recourse and is secured by the underlying real estate, accrues interest at 4.0% per annum and matures in
December 2025.
Issuance of Common Stock
We have 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 was reserved for sales under our at-the-market equity
offering program that we entered into in November 2024. In fiscal 2025, we did not issue any shares of common stock under
our at-the-market equity offering program. At September 30, 2025, the full $750 million remained available for issuance under
the shelf registration statement, with $300 million reserved for sales under our at-the-market equity offering program.
Operating Cash Flow Activities
In fiscal 2025, net cash used in operating activities was $197.7 million, which was primarily the result of the increases in
real estate and other assets and the decrease in accrued development costs, partially offset by net income generated in the period
and the increase in earnest money on sales contracts. In fiscal 2024, net cash used in operating activities was $158.4 million,
which was primarily the result of the increase in real estate, partially offset by net income generated in the period and the
increases in earnest money on sales contracts, accrued development costs and accounts payable and other accrued liabilities.
Investing Cash Flow Activities
In fiscal 2025, net cash provided by investing activities was $3.2 million compared to $7.3 million in fiscal 2024. Cash
provided by investing activities in fiscal 2025 and 2024 included $4.5 million and $9.5 million, respectively, of excess hotel
occupancy and sales and use tax revenues collected from the Cibolo Canyons Special Improvement District.
Financing Cash Flow Activities
In fiscal 2025, net cash provided by financing activities was $92.5 million compared to $16.3 million in fiscal 2024. The
cash provided by financing activities in fiscal 2025 was primarily the result of proceeds from the issuance of $500 million
principal amount of our 2033 notes and $280 million of borrowings under our senior unsecured revolving credit facility,
partially offset by the repurchase of our $400 million principal amount of 2026 notes and $280 million in repayments under our
senior unsecured revolving credit facility. The cash provided by financing activities in fiscal 2024 primarily consisted of the
issuance of common stock under our at-the-market equity offering program for net proceeds of $19.7 million.
Critical Accounting Policies and Estimates
General — A comprehensive enumeration of the significant accounting policies of Forestar Group Inc. and subsidiaries is
presented in Note 1 to the accompanying financial statements as of September 30, 2025 and 2024, and for the years ended
September 30, 2025, 2024 and 2023. Each of our accounting policies has been chosen based upon current authoritative
literature that collectively comprises U.S. Generally Accepted Accounting Principles (GAAP). In instances where alternative
methods of accounting are permissible under GAAP, we have chosen the method that most appropriately reflects the nature of
our business, the results of our operations and our financial condition, and have consistently applied those methods over each of
the periods presented in the financial statements. The Audit Committee of our Board of Directors has reviewed and approved
the accounting policies selected.
Accounting estimates are considered critical if both of the following conditions are met: (1) the nature of the estimates or
assumptions is material because of the levels of subjectivity and judgment needed to account for matters that are highly
uncertain and susceptible to change and (2) the effect of the estimates and assumptions is material to the financial statements.
We have reviewed our accounting estimates, and none were deemed to be considered critical for the accounting periods
presented.
34

Revenue Recognition — Real estate revenue and related profit are generally recognized at the time of the closing of a sale,
when title to and possession of the property are transferred to the buyer. Our performance obligation, to deliver the agreed-upon
land or lots, is generally satisfied at closing. However, there may be instances in which we have an unsatisfied remaining
performance obligation at the time of closing. In these instances, we record contract liabilities and recognize those revenues
over time as the performance obligations are completed. Generally, our remaining unsatisfied performance obligations are
expected to have an original duration of less than one year.
Real Estate and Cost of Sales — Real estate includes the costs of direct land and lot acquisition, land development,
capitalized interest, and direct overhead costs incurred during land development. All indirect overhead costs, such as
compensation of management personnel and insurance costs are charged to selling, general and administrative expense as
incurred.
Land and development costs are typically allocated to individual residential lots based on the relative sales value of the
lot. Cost of sales includes applicable land and lot acquisition, land development and related costs (both incurred and estimated
to be incurred) allocated to each residential lot in the project. Any changes to the estimated total development costs subsequent
to the initial home or lot closings in a community are generally allocated on a pro-rata basis to the remaining homes or lots in
the community associated with the relevant development activity.
We receive earnest money deposits from homebuilders for purchases of developed lots. These earnest money deposits are
typically released to the homebuilders as lots are sold. Earnest money deposits from customers are subject to mortgages that are
secured by the real estate under contract. These mortgages expire when the earnest money is released to homebuilders as lots
are sold.
We have agreements with certain utility or improvement districts to convey water, sewer and other infrastructure-related
assets we have constructed in connection with projects within their jurisdiction and receive reimbursements for the cost of these
improvements. The amount of reimbursements for these improvements are defined by the district and are based on the
allowable costs of the improvements. The transfer is consummated and we generally receive payment when the districts have a
sufficient tax base to support funding of their bonds. The cost incurred by us in constructing these improvements, net of the
amount expected to be collected in the future, is included in our land development budgets and in the determination of lot costs.
Each quarter, we review the performance and outlook for all of our real estate for indicators of potential impairment. We
determine if impairment indicators exist by analyzing a variety of factors including, but not limited to, the following:
•
gross margins on lots sold in recent months;
•
projected gross margins based on budgets;
•
trends in gross margins, average selling prices or cost of sales; and
•
lot sales absorption rates.
If indicators of impairment are present, we perform an impairment evaluation, which includes an analysis to determine if
the undiscounted cash flows estimated to be generated by those assets are less than their carrying amounts. These estimates of
cash flows are significantly impacted by specific factors including estimates of the amount and timing of future revenues and
estimates of the amount of land development costs which, in turn, may be impacted by the following local market conditions:
•
supply and availability of land and lots;
•
location and desirability of our land and lots;
•
amount of land and lots we own or control in a particular market or sub-market; and
•
local economic and demographic trends.
For those assets deemed impaired, an impairment charge is recorded to cost of sales for the amount by which the carrying
amount of the assets exceeds the fair value of the assets. Our determination of fair value is primarily based on discounting the
estimated cash flows at a rate commensurate with the inherent risks associated with the assets and related estimated cash flow
streams. When an impairment charge is determined, the charge is then allocated to each lot in the same manner as land and
development costs are allocated to each lot.
35

We rarely purchase land for resale. However, we may change our plans for land we own or land under development and
decide to sell the asset. When we determine that we will sell the asset, the project is accounted for as land held for sale if certain
criteria are met. We record land held for sale at the lesser of its carrying value or fair value less estimated costs to sell. In
performing the impairment evaluation for land held for sale, we consider several factors including, but not limited to, recent
offers received to purchase the property, prices for land in recent comparable sales transactions and market analysis studies,
which include the estimated price a willing buyer would pay for the land. If the estimated fair value less costs to sell an asset is
less than the current carrying value, the asset is written down to its estimated fair value less costs to sell.
The key assumptions relating to real estate valuations are impacted by local market and economic conditions, and are
inherently uncertain. Although our quarterly assessments reflect management’s best estimates, due to uncertainties in the
estimation process, actual results could differ from such estimates.
Recently Adopted Accounting Standards
In November 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-07, "Segment Reporting -
Improvements to Reportable Segment Disclosures," to improve reportable segment disclosure requirements. The ASU expands
public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the
chief operating decision maker and included within each reported measure of segment profit or loss. It also requires disclosure
of the amount and description of the composition of other segment items and interim disclosures of a reportable segment’s
profit or loss and assets. Additionally, all disclosure requirements of ASU 2023-07 are required for entities with a single
reportable segment. We adopted the annual requirements of ASU 2023-07 and the disclosures required are included in Note 2 -
Segment Reporting. The new interim period disclosures are required beginning in the first quarter of fiscal 2026 on a
retrospective basis to all periods presented and will be included in our Quarterly Reports on Form 10-Q at that time. The
adoption of this ASU did not have any impact on our consolidated financial statements.
Pending Accounting Standards
In December 2023, the FASB issued ASU 2023-09, "Income Taxes - Improvements to Income Tax Disclosures," which
requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax
rate reconciliation and modifies other income tax related disclosures. The standard is effective for annual periods beginning in
fiscal 2026. We are currently evaluating the impact of this standard on our consolidated financial statements and related
disclosures.
In November 2024, the FASB issued ASU 2024-03, "Income Statement - Reporting Comprehensive Income - Expense
Disaggregation Disclosures," which requires disclosure of certain costs and expenses on an interim and annual basis in the notes
to the financial statements. The standard is effective for our annual periods beginning in fiscal 2028 and interim periods
beginning in the first quarter of fiscal 2029, with early adoption permitted. We are currently evaluating the impact this standard
will have on our disclosures.
36

Forward-Looking Statements
This Annual Report on Form 10-K and other materials we have filed or may file with the Securities and Exchange
Commission contain "forward-looking statements" within the meaning of the federal securities laws. These forward-looking
statements are identified by their use of terms and phrases such as "believe," "anticipate," "could," "estimate," "likely,"
"intend," "may," "plan," "expect," and similar expressions, including references to assumptions. These statements reflect our
current views with respect to future events and are subject to risks and uncertainties. We note that a variety of factors and
uncertainties could cause our actual results to differ significantly from the results discussed in the forward-looking statements.
Factors and uncertainties that might cause such differences include, but are not limited to:
•
the effect of D.R. Horton’s controlling level of ownership on us and the holders of our securities;
•
our ability to realize the potential benefits of the strategic relationship with D.R. Horton;
•
the effect of our strategic relationship with D.R. Horton on our ability to maintain relationships with our
customers;
•
the cyclical nature of the homebuilding and lot development industries and changes in economic, real estate and
other conditions;
•
the impact of significant inflation, higher interest rates or deflation;
•
supply shortages and other risks of acquiring land, construction materials and skilled labor;
•
the effects of public health issues such as a major epidemic or pandemic on the economy and our business;
•
the impacts of weather conditions and natural disasters;
•
health and safety incidents relating to our operations;
•
our ability to obtain or the availability of surety bonds to secure our performance related to construction and
development activities and the pricing of bonds;
•
the effects of information technology failures, cybersecurity incidents, and the failure to satisfy privacy and data
protection laws and regulations;
•
the impact of governmental policies, laws or regulations and actions or restrictions of regulatory agencies;
•
the effects of changes in income tax and securities laws;
•
our ability to achieve our strategic initiatives;
•
continuing liabilities related to assets that have been sold;
•
the cost and availability of property suitable for residential lot development;
•
general economic, market or business conditions where our real estate activities are concentrated;
•
our dependence on relationships with national, regional and local homebuilders;
•
competitive conditions in our industry;
•
obtaining reimbursements and other payments from governmental districts and other agencies and timing of such
payments;
•
our ability to succeed in new markets;
•
the conditions of the capital markets and our ability to raise capital to fund expected growth;
•
our ability to manage and service our debt and comply with our debt covenants, restrictions and limitations;
•
the volatility of the market price and trading volume of our common stock; and
•
our ability to hire and retain key personnel.
Other factors, including the risk factors described in Item 1A of this Annual Report on Form 10-K, may also cause actual
results to differ materially from those projected by our forward-looking statements. New factors emerge from time to time and
it is not possible for us to predict all such factors, nor can we assess the impact of any such factor on our business or the extent
to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-
looking statement.
37

Any forward-looking statement speaks only as of the date on which such statement is made, and, except as required by
law, we expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking
statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of
unanticipated events.
38

Item 7A.
Quantitative and Qualitative Disclosures About Market Risk.
Interest Rate Risk
We are subject to interest rate risk on our senior debt and revolving credit facility. 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 September 30, 2025, our fixed rate debt consisted of $300 million principal amount of 5.0% senior notes due March
2028, $500 million principal amount of 6.5% senior notes due March 2033 and $9.9 million principal amount of our 4.0% other
note payable due in December 2025. Our variable rate debt consisted of the outstanding borrowings on our $640 million senior
unsecured revolving credit facility, of which there were none at September 30, 2025.
Foreign Currency Risk
We have no exposure to foreign currency fluctuations.
Commodity Price Risk
We have no significant exposure to commodity price fluctuations.
39

Item 8.
Financial Statements and Supplementary Data.
MANAGEMENT’S ANNUAL REPORT ON
INTERNAL CONTROL OVER FINANCIAL REPORTING
The management of Forestar is responsible for establishing and maintaining adequate internal control over financial
reporting. Management has designed our internal control over financial reporting to provide reasonable assurance that our
published financial statements are fairly presented, in all material respects, in conformity with generally accepted accounting
principles.
Management is required by paragraph (c) of Rule 13a-15 of the Securities Exchange Act of 1934, as amended, to assess
the effectiveness of our internal control over financial reporting as of each year end. In making this assessment, management
used the Internal Control — Integrated Framework (2013) by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO).
Management conducted the required assessment of the effectiveness of our internal control over financial reporting as
of September 30, 2025. Based upon this assessment, management believes that our internal control over financial reporting is
effective as of September 30, 2025.
Ernst & Young LLP (PCAOB ID: 42), the independent registered public accounting firm that audited our financial
statements included in this Form 10-K, has also audited our internal control over financial reporting. Their attestation report
follows this report of management.
40

Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Forestar Group Inc.
Opinion on Internal Control Over Financial Reporting
We have audited Forestar Group Inc.’s internal control over financial reporting as of September 30, 2025, based on criteria
established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Forestar Group Inc. (the Company)
maintained, in all material respects, effective internal control over financial reporting as of September 30, 2025, based on the
COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the consolidated balance sheets of the Company as of September 30, 2025 and 2024, the related consolidated
statements of operations, total equity and cash flows for each of the three years in the period ended September 30, 2025, and
the related notes and our report dated November 19, 2025 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s
Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s
internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and
are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the
applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in
all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk,
and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a
reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
Fort Worth, Texas
November 19, 2025
41

Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Forestar Group Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Forestar Group Inc. (the Company) as of September 30,
2025 and 2024, the related consolidated statements of operations, total equity and cash flows for each of the three years in the
period ended September 30, 2025, and the related notes (collectively referred to as the "consolidated financial statements"). In
our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company
at September 30, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period
ended September 30, 2025, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the Company's internal control over financial reporting as of September 30, 2025, based on criteria established in
Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
(2013 framework), and our report dated November 19, 2025 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on
the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to
error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included
evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that
was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that
are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The
communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken
as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit
matter or on the accounts or disclosures to which it relates.
Land development costs (including estimated costs to complete)
Description of the
Matter
For the year ended September 30, 2025, the Company’s cost of sales was approximately $1.3
billion, which included the costs of direct land and lot acquisition, land development, and
related costs (both incurred and estimated to be incurred) allocated to each residential lot in
the project. As discussed in Note 1 to the consolidated financial statements, land
development costs are typically allocated to individual residential lots based on the relative
sales value of the lots. At the time of lot closings, land development activities may not yet be
finalized. To recognize the appropriate amount of cost of sales, the Company estimates the
total remaining development costs. Estimates are affected by changes to the land
development project’s cost of labor, material, and subcontractors.
Auditing the Company's land development cost measurement and allocation to lots can be
complex and subjective due to the estimation required to determine the costs to complete
land development. Specifically, the land development cost estimate is sensitive to
management assumptions regarding estimated cost of labor, material, and subcontractors.
42

How We Addressed the
Matter in Our Audit
We obtained an understanding and tested the design and operating effectiveness of the
Company's process and controls over its land development cost measurement and allocation
to lots, including controls over management's review of the estimated costs to complete.
Our audit procedures included, among others, testing the assumptions used to develop the
estimated costs to complete the land development projects by comparing to supporting
documentation such as subcontractor bids, contracts, or actual costs from similar or related
projects. In addition, we performed procedures related to land development budget changes
during the year as well as performed a predictive margin analytic which included
investigating variances between historical and estimated margins. We also performed a look-
back analysis on completed projects by comparing actual land development costs to land
development budgets as of the beginning of the year in order to evaluate the accuracy of
management’s land development budgets.
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2007.
Fort Worth, Texas
November 19, 2025
43

FORESTAR GROUP INC.
CONSOLIDATED BALANCE SHEETS
September 30,
2025
September 30,
2024
(In millions, except share data)
ASSETS
Cash and cash equivalents ........................................................................................................ $
379.2
$
481.2
Real estate.................................................................................................................................
2,645.1
2,266.2
Investment in unconsolidated ventures.....................................................................................
—
0.3
Property and equipment, net .....................................................................................................
8.1
7.1
Other assets...............................................................................................................................
104.6
85.3
Total assets ................................................................................................................. $
3,137.0
$
2,840.1
LIABILITIES
Accounts payable...................................................................................................................... $
71.0
$
85.9
Accrued development costs ......................................................................................................
131.8
144.6
Earnest money on sales contracts .............................................................................................
193.3
172.3
Deferred tax liability, net..........................................................................................................
86.2
67.5
Accrued expenses and other liabilities......................................................................................
83.1
68.3
Debt...........................................................................................................................................
802.7
706.4
Total liabilities...................................................................................................................
1,368.1
1,245.0
Commitments and contingencies (Note 12)
EQUITY
Common stock, par value $1.00 per share, 200,000,000 authorized shares,
50,833,171 and 50,653,637 shares issued and outstanding
at September 30, 2025 and 2024, respectively......................................................................
50.8
50.7
Additional paid-in capital .........................................................................................................
671.0
665.2
Retained earnings......................................................................................................................
1,046.1
878.2
Stockholders' equity...........................................................................................................
1,767.9
1,594.1
Noncontrolling interests............................................................................................................
1.0
1.0
Total equity........................................................................................................................
1,768.9
1,595.1
Total liabilities and equity.......................................................................................... $
3,137.0
$
2,840.1
See accompanying notes to consolidated financial statements.
44

FORESTAR GROUP INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended September 30,
2025
2024
2023
(In millions, except per share amounts)
Revenues............................................................................................................ $
1,662.4
$
1,509.4
$
1,436.9
Cost of sales.......................................................................................................
1,298.9
1,150.1
1,132.8
Selling, general and administrative expense......................................................
154.4
118.5
97.7
Equity in earnings of unconsolidated ventures..................................................
(0.6)
—
—
Gain on sale of assets ........................................................................................
(4.5)
(9.5)
(1.6)
Interest and other income ..................................................................................
(6.3)
(19.8)
(13.6)
Loss on extinguishment of debt.........................................................................
1.2
—
—
Income before income taxes..............................................................................
219.3
270.1
221.6
Income tax expense.........................................................................................
51.4
66.7
54.7
Net income......................................................................................................... $
167.9
$
203.4
$
166.9
Basic net income per common share................................................................. $
3.30
$
4.03
$
3.34
Weighted average number of common shares...................................................
50.9
50.4
50.0
Diluted net income per common share.............................................................. $
3.29
$
4.00
$
3.33
Adjusted weighted average number of common shares....................................
51.1
50.8
50.1
See accompanying notes to consolidated financial statements.
45

FORESTAR GROUP INC.
CONSOLIDATED STATEMENTS OF TOTAL EQUITY
Common
Stock
Additional
Paid-in
Capital
Retained
Earnings
Non-
controlling
Interests
Total
Equity
(In millions, except share amounts)
Balances at September 30, 2022 (49,761,480 shares).................. $
49.8
$
640.6
$
507.9
$
1.0
$ 1,199.3
Net income................................................................................
—
—
166.9
—
166.9
Stock issued under employee benefit plans (142,233 shares)...
0.1
—
—
—
0.1
Cash paid for shares withheld for taxes....................................
—
(0.7)
—
—
(0.7)
Stock-based compensation expense..........................................
—
4.3
—
—
4.3
Balances at September 30, 2023 (49,903,713 shares).................. $
49.9
$
644.2
$
674.8
$
1.0
$ 1,369.9
Net income................................................................................
—
—
203.4
—
203.4
Issuance of common stock (546,174 shares) ............................
0.6
19.1
—
—
19.7
Stock issued under employee benefit plans (203,750 shares)...
0.2
—
—
—
0.2
Cash paid for shares withheld for taxes....................................
—
(3.4)
—
—
(3.4)
Stock-based compensation expense..........................................
—
5.3
—
—
5.3
Balances at September 30, 2024 (50,653,637 shares).................. $
50.7
$
665.2
$
878.2
$
1.0
$ 1,595.1
Net income................................................................................
—
—
167.9
—
167.9
Stock issued under employee benefit plans (179,534 shares) ..
0.1
0.3
—
—
0.4
Cash paid for shares withheld for taxes....................................
—
(1.8)
—
—
(1.8)
Stock-based compensation expense..........................................
—
7.3
—
—
7.3
Balances at September 30, 2025 (50,833,171 shares).................. $
50.8
$
671.0
$ 1,046.1
$
1.0
$ 1,768.9
See accompanying notes to consolidated financial statements.
46

FORESTAR GROUP INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended September 30,
2025
2024
2023
(In millions)
OPERATING ACTIVITIES
Net income................................................................................................. $
167.9
$
203.4
$
166.9
Adjustments:
Depreciation and amortization ..............................................................
3.5
3.0
3.0
Deferred income taxes...........................................................................
18.7
16.8
13.8
Equity in earnings of unconsolidated ventures .....................................
(0.6)
—
—
Stock-based compensation expense ......................................................
7.3
5.3
4.3
Impairments and land option charges....................................................
7.2
4.1
24.0
Gain on sale of assets ............................................................................
(4.5)
(9.5)
(1.6)
Loss on extinguishment of debt ............................................................
1.2
—
—
Changes in operating assets and liabilities:
(Increase) decrease in real estate...........................................................
(384.8)
(469.9)
206.3
Increase in other assets..........................................................................
(7.4)
(27.7)
(7.0)
(Decrease) increase in accounts payable and other accrued liabilities..
(14.4)
24.7
(12.7)
(Decrease) increase in accrued development costs ...............................
(12.8)
40.5
(18.2)
Increase (decrease) in earnest money deposits on sales contracts ........
21.0
50.9
(14.7)
Net cash (used in) provided by operating activities .....................................
(197.7)
(158.4)
364.1
INVESTING ACTIVITIES
Expenditures for property, equipment, software and other .......................
(2.2)
(2.2)
(1.3)
Return of investment in unconsolidated ventures......................................
0.9
—
—
Proceeds from sale of assets ......................................................................
4.5
9.5
1.6
Net cash provided by investing activities.....................................................
3.2
7.3
0.3
FINANCING ACTIVITIES
Issuance of common stock.........................................................................
—
19.7
—
Additions to debt........................................................................................
780.0
—
—
Repayment of debt.....................................................................................
(680.0)
—
(12.5)
Deferred financing fees..............................................................................
(6.2)
—
—
Cash paid for shares withheld for taxes.....................................................
(1.8)
(3.4)
(0.7)
Stock issued under employee benefit plans...............................................
0.5
—
—
Net cash provided by (used in) financing activities .....................................
92.5
16.3
(13.2)
(Decrease) increase in cash and cash equivalents ........................................
(102.0)
(134.8)
351.2
Cash and cash equivalents at beginning of year...........................................
481.2
616.0
264.8
Cash and cash equivalents at end of year..................................................... $
379.2
$
481.2
$
616.0
SUPPLEMENTAL CASH FLOW INFORMATION:
Note payable issued for real estate............................................................... $
—
$
9.9
$
—
Income taxes paid, net.................................................................................. $
30.8
$
45.7
$
44.7
See accompanying notes to consolidated financial statements.
47

Note 1 — Summary of Significant Accounting Policies
Basis of Presentation
The accompanying consolidated financial statements have been prepared in accordance with U.S. Generally Accepted
Accounting Principles (GAAP) and includes the accounts of Forestar Group Inc. ("Forestar") and all of its 100% owned,
majority-owned and controlled subsidiaries, which are collectively referred to as the Company unless the context otherwise
requires. The Company accounts for its investment in other entities in which it has significant influence over operations and
financial policies using the equity method. All intercompany accounts, transactions and balances have been eliminated in
consolidation. 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. Thus, the Company's net income equates to comprehensive income.
In October 2017, Forestar became a majority-owned subsidiary of D.R. Horton, Inc. ("D.R. Horton") by virtue of a merger
with a wholly-owned subsidiary of D.R. Horton. Immediately following the merger, D.R. Horton owned 75% of the Company's
outstanding common stock. In connection with the merger, the Company entered into certain agreements with D.R. Horton,
including a Stockholder’s Agreement, a Master Supply Agreement and a Shared Services Agreement. D.R. Horton is
considered a related party of Forestar under GAAP. As of September 30, 2025, D.R. Horton owned approximately 62% of the
Company's outstanding common stock.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and
assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ materially from those estimates.
Revenue Recognition
Real estate revenue and related profit are generally recognized at the time of the closing of a sale, when title to and
possession of the property are transferred to the buyer. The Company’s performance obligation, to deliver the agreed-upon land
or lots, is generally satisfied at closing. However, there may be instances in which the Company has an unsatisfied remaining
performance obligation at the time of closing. In these instances, the Company records contract liabilities and recognizes those
revenues over time as the performance obligations are completed. Generally, the Company's unsatisfied remaining performance
obligations are expected to have an original duration of less than one year. See Note 4.
Cash and Cash Equivalents
Cash and cash equivalents include cash, other short-term instruments with original maturities of three months or less and
proceeds from land and lot closings held for the Company’s benefit at title companies.
FORESTAR GROUP INC.
Notes to Consolidated Financial Statements
48

Real Estate and Cost of Sales
Real estate includes the costs of direct land and lot acquisition, land development, capitalized interest and direct overhead
costs incurred during land development. All indirect overhead costs, such as compensation of management personnel and
insurance costs, are charged to selling, general and administrative expense as incurred.
Land and development costs are typically allocated to individual residential lots based on the relative sales value of the
lot. Cost of sales includes applicable land and lot acquisition, land development and related costs (both incurred and estimated
to be incurred) allocated to each residential lot in the project. Any changes to the estimated total development costs subsequent
to the initial lot closings in a community are generally allocated on a pro-rata basis to the remaining lots in the community
associated with the relevant development activity.
The Company receives earnest money deposits from homebuilders for purchases of developed lots. These earnest money
deposits are typically released to the homebuilders as lots are sold. Earnest money deposits from customers are subject to
mortgages that are secured by the real estate under contract. These mortgages expire when the earnest money is released to
homebuilders as lots are sold.
The Company has agreements with certain utility or improvement districts to convey water, sewer and other
infrastructure-related assets it has constructed in connection with projects within their jurisdiction and receive reimbursements
for the cost of these improvements. The reimbursement amounts for these improvements are defined by the district and are
based on the allowable costs of the improvements. The transfer is consummated and the Company generally receives payment
when the districts have a sufficient tax base to support the funding of their bonds. The cost incurred by the Company in
constructing these improvements, net of the amount expected to be collected in the future, is included in the Company's land
development budgets and in the determination of allocated lot costs.
The Company reviews real estate assets for impairment when events or circumstances indicate that their carrying value
may not be recoverable. Impairment exists if the carrying amount of the asset is not recoverable from the undiscounted cash
flows expected from its use and eventual disposition. The amount of the impairment loss is determined by comparing the
carrying value of the asset to its estimated fair value, which is generally determined based on the present value of future cash
flows expected from the sale of the asset. Real estate impairments are included in cost of sales in the consolidated statements of
operations. See Note 3.
Capitalized Interest
The Company capitalizes interest costs throughout the development period (active real estate). Capitalized interest is
charged to cost of sales as the related real estate is sold. 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. During all periods
presented, the Company’s active real estate exceeded its debt level, and all interest incurred was capitalized to real estate. See
Note 5.
Land Purchase Contract Deposits and Pre-Acquisition Costs
The Company enters into land and lot purchase contracts to acquire land for the development of residential lots. Under
these contracts, the Company will fund a stated deposit in consideration for the right, but not the obligation, to purchase land or
lots at a future point in time with predetermined terms. Under the terms of many of the purchase contracts, the deposits are not
refundable in the event the Company elects to terminate the contract. 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. See Notes 3 and 12.
FORESTAR GROUP INC.
Notes to Consolidated Financial Statements
49

Variable Interests
Land purchase contracts can result in the creation of a variable interest in the entity holding the land parcel under contract.
There were no variable interest entities reported in the consolidated balance sheets at September 30, 2025 and 2024 because,
with regard to each entity, the Company determined it did not control the activities that most significantly impact the variable
interest entity’s economic performance.
The maximum exposure to losses related to the Company’s unconsolidated variable interest entities is limited to the
amounts of the Company’s related deposits. At September 30, 2025 and 2024, the deposits related to these contracts totaled
$34.5 million and $23.4 million, respectively, and are included in other assets in the consolidated balance sheets.
Property and Equipment
Property and equipment are stated at cost less accumulated depreciation. The cost of significant additions and
improvements is capitalized, and the cost of repairs and maintenance is expensed as incurred. Depreciation generally is
recorded using the straight-line method over the estimated useful life of the asset as follows:
Estimated
Useful Lives
September 30,
2025
2024
(In millions)
Leasehold improvements ......................................................................
5 to 10 years
$
2.2
$
1.8
Property and equipment........................................................................
2 to 10 years
11.0
9.1
Total property and equipment..............................................................................................
13.2
10.9
Accumulated depreciation...........................................................................................................
(5.1)
(3.8)
Property and equipment, net................................................................................................ $
8.1
$
7.1
Depreciation expense was $1.3 million, $1.1 million and $1.0 million in fiscal 2025, 2024 and 2023, respectively.
Income Taxes
The Company’s income tax expense is calculated using the asset and liability method, under which deferred tax assets and
liabilities are recognized based on the future tax consequences attributable to temporary differences between the financial
statement amounts of assets and liabilities and their respective tax bases and attributable to net operating losses and tax credit
carryforwards. When assessing the realizability of deferred tax assets, management considers whether it is more likely than not
that some portion or all of its deferred tax assets will not be realized. The realization of deferred tax assets is dependent upon
the generation of sufficient taxable income in future periods and in the jurisdictions in which those temporary differences
become deductible. The Company records a valuation allowance when it determines it is more likely than not that a portion of
the deferred tax assets will not be realized. The accounting for deferred taxes is based upon estimates of future results.
Differences between the anticipated and actual outcomes of these future results could have a material impact on the Company’s
consolidated results of operations or financial position. Also, changes in existing federal and state tax laws and tax rates could
affect future tax results and the valuation of the Company’s deferred tax assets and liabilities.
Interest and penalties related to unrecognized tax benefits are recognized in the financial statements as a component of
income tax expense. Significant judgment is required to evaluate uncertain tax positions. The Company evaluates its uncertain
tax positions on a quarterly basis. The evaluations are based upon a number of factors, including changes in facts or
circumstances, changes in tax law, correspondence with tax authorities during the course of audits and effective settlement of
audit issues. Changes in the recognition or measurement of uncertain tax positions could result in increases or decreases in the
Company’s income tax expense in the period in which the change is made. See Note 9.
FORESTAR GROUP INC.
Notes to Consolidated Financial Statements
50

Stock-Based Compensation
The Company’s stockholders formally authorize shares of its common stock to be available for future grants of stock-
based compensation awards. From time to time, the Compensation Committee of the Company’s Board of Directors
(Compensation Committee) authorizes the grant of stock-based compensation to its employees and directors from these
available shares. At September 30, 2025, all outstanding stock-based compensation awards were in the form of restricted stock
units (time based and performance based). Grants of restricted time based and performance-based stock units vest over a certain
number of years as determined by the Compensation Committee. Restricted time based and performance-based stock units
outstanding at September 30, 2025 have a remaining vesting period of up to 4.1 years and 2.0 years, respectively.
The compensation expense for stock-based awards is based on the grant date fair value of the award and is recognized on
a straight-line basis over the remaining vesting period. The fair values of restricted stock units are based on the Company’s
stock price at the date of grant. See Note 11.
Fair Value Measurements
The FASB's authoritative guidance for fair value measurements establishes a three-level hierarchy based upon the inputs
to the valuation model of an asset or liability. When available, the Company uses quoted market prices in active markets to
determine fair value. Non-financial assets measured at fair value on a non-recurring basis principally include real estate assets
which the Company reviews for indicators of impairment when events and circumstances indicate that the carrying value is not
recoverable. See Note 14.
Recently Adopted Accounting Pronouncements
In November 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-07, “Segment Reporting -
Improvements to Reportable Segment Disclosures,” to improve reportable segment disclosures requirements. The ASU expands
public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the
chief operating decision maker and included within each reported measure of segment profit or loss. It also requires disclosure
of the amount and description of the composition of other segment items and interim disclosures of a reportable segment’s
profit or loss and assets. Additionally, all disclosure requirements of ASU 2023-07 are required for entities with a single
reportable segment. The Company adopted the annual requirements of ASU 2023-07 and the disclosures required are included
in Note 2 - Segment Reporting. The new interim period disclosures are required beginning in the first quarter of fiscal 2026 on
a retrospective basis to all periods presented and will be included in the Company's Quarterly Reports on Form 10-Q at that
time. The adoption of this ASU did not have any impact on the Company's consolidated financial statements.
Pending Accounting Standards
In December 2023, the FASB issued ASU 2023-09, "Income Taxes - Improvements to Income Tax Disclosures," which
requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax
rate reconciliation and modifies other income tax related disclosures. The standard is effective for the Company's annual
periods beginning in fiscal 2026. The Company is currently evaluating the impact of this standard on its consolidated financial
statements and related disclosures.
In November 2024, the FASB issued ASU 2024-03, "Income Statement - Reporting Comprehensive Income - Expense
Disaggregation Disclosures," which requires disclosure of certain costs and expenses on an interim and annual basis in the notes
to the financial statements. The standard is effective for the Company’s annual periods beginning in fiscal 2028 and interim
periods beginning in the first quarter of fiscal 2029, with early adoption permitted. The Company is currently evaluating the
impact this standard will have on its disclosures.
FORESTAR GROUP INC.
Notes to Consolidated Financial Statements
51

Note 2 — Segment Information
The Company manages its operations through its real estate segment, which is its only operating segment. The real estate
segment is the Company's only reportable segment. The real estate segment is the Company's core business and generates
substantially all of its revenues. The real estate segment primarily acquires land and installs infrastructure for single-family
residential communities, and its revenues generally come from sales of residential single-family finished lots to local, regional
and national homebuilders. The Company has other business activities for which the related assets and operating results are
immaterial and therefore are included within the Company's real estate segment.
The Company's chief operating decision makers (CODM), are deemed to be a group of four executives; the Executive
Chairman of the Board, the Chief Executive Officer, the Chief Operating Officer, and the Chief Financial Officer. The CODM
use income before income taxes as reported on the Consolidated Statements of Operations as the primary measure to allocate
capital resources and assess the operating performance of the real estate segment. The CODM analyze income before income
taxes at least quarterly to review comparative period variances and to monitor performance, identify trends, and guide strategic
and operational decisions. There are no significant segment operating expenses that are reviewed by the CODM other than
those included in the expense categories reported on the Company’s Consolidated Statements of Operations.
All revenues and real estate assets are attributable to operations in the United States. 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 years ended September 30, 2025, 2024 and 2023, revenues to
D.R. Horton accounted for more than 10% of the Company's total revenues. D.R. Horton is a related party and additional
information regarding transactions with D.R. Horton is disclosed in Note 13 - Related Party Transactions.
Note 3 — Real Estate
Real estate consists of:
September 30,
2025
2024
(In millions)
Developed and under development projects............................................................................ $
2,465.1
$
2,126.1
Land held for future development ...........................................................................................
180.0
140.1
$
2,645.1
$
2,266.2
During fiscal 2025, the Company invested $595.3 million for the acquisition of residential real estate and $1.1 billion for
the development of residential real estate. At September 30, 2025 and 2024, 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.
Each quarter, the Company reviews the performance and outlook for all of its real estate for indicators of potential
impairment and performs detailed impairment evaluations and analyses when necessary. As a result of this process, no
impairment charges were recorded during fiscal 2025 and 2024. During fiscal 2023, the Company recorded non-cash
impairment charges of $19.4 million.
During fiscal 2025, 2024 and 2023 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 $7.2 million, $4.1 million and $4.6 million,
respectively. These land option charges and the impairments discussed above are included in cost of sales in the consolidated
statements of operations.
FORESTAR GROUP INC.
Notes to Consolidated Financial Statements
52

Note 4 — Revenues
Revenues consist of:
Year Ended September 30,
2025
2024
2023
(In millions)
Residential lot sales.................................................................................. $
1,544.3
$
1,459.3
$
1,275.7
Deferred development lot sales ................................................................
—
8.1
29.0
Tract sales and other.................................................................................
118.1
42.0
132.2
$
1,662.4
$
1,509.4
$
1,436.9
Note 5 — Capitalized Interest
The following table summarizes the Company’s interest costs incurred, capitalized and expensed in fiscal 2025, 2024 and
2023.
Year Ended September 30,
2025
2024
2023
(In millions)
Capitalized interest, beginning of year..................................................... $
63.0
$
58.5
$
52.5
Interest incurred........................................................................................
45.5
32.6
32.8
Interest charged to cost of sales................................................................
(30.7)
(28.1)
(26.8)
Capitalized interest, end of year ............................................................... $
77.8
$
63.0
$
58.5
Note 6 — Other Assets, Accrued Expenses and Other Liabilities
The Company's other assets at September 30, 2025 and 2024 were as follows:
September 30,
2025
2024
(In millions)
Receivables, net........................................................................................................ $
20.2
$
28.4
Lease right of use assets...........................................................................................
13.7
9.6
Prepaid expenses......................................................................................................
17.5
13.2
Land purchase contract deposits ..............................................................................
34.5
23.4
Income taxes receivable...........................................................................................
1.4
—
Contract assets..........................................................................................................
—
8.9
Pledged reimbursements asset (1)..............................................................................
14.0
—
Other assets ..............................................................................................................
3.3
1.8
$
104.6
$
85.3
FORESTAR GROUP INC.
Notes to Consolidated Financial Statements
53

The Company's accrued expenses and other liabilities at September 30, 2025 and 2024 were as follows:
September 30,
2025
2024
(In millions)
Accrued employee compensation and benefits........................................................ $
16.9
$
13.5
Accrued property taxes ............................................................................................
6.2
8.2
Lease liabilities.........................................................................................................
14.4
10.2
Accrued interest .......................................................................................................
2.5
7.3
Contract liabilities....................................................................................................
0.7
2.7
Deferred income.......................................................................................................
4.1
4.1
Income taxes payable...............................................................................................
11.9
8.6
Other accrued expenses............................................................................................
4.3
8.0
Pledged reimbursements liability (1).........................................................................
14.0
—
Other liabilities.........................................................................................................
8.1
5.7
$
83.1
$
68.3
_______________
(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.
FORESTAR GROUP INC.
Notes to Consolidated Financial Statements
54

Note 7 — Debt
The Company's notes payable at their carrying amounts consist of the following:
September 30,
2025
2024
(In millions)
Unsecured:
Revolving credit facility ................................................................................... $
—
$
—
3.85% senior notes due 2026 (1)........................................................................
—
398.4
5.0% senior notes due 2028 (1)..........................................................................
298.7
298.1
6.5% senior notes due 2033 (1)..........................................................................
494.1
—
Other note payable ...................................................................................................
9.9
9.9
$
802.7
$
706.4
______________
(1) Unamortized debt issuance costs that were deducted from the carrying amounts of the senior notes totaled $7.2 million
and $3.5 million at September 30, 2025 and 2024, respectively.
Bank Credit Facility
As of September 30, 2025 the Company had a $640 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 facility includes bank commitments of $575 million maturing on
December 18, 2029 and $65 million maturing on October 28, 2026. On October 30, 2025, the Company exercised the accordion
feature under its credit facility and increased the total commitments by $25 million, resulting in total commitments of $665
million, of which $600 million matures on December 18, 2029 and $65 million matures on October 28, 2026. The facility also
provides for the issuance of letters of credit with a sublimit equal to the greater of $100 million and 50% of the total revolving
credit commitments. Borrowings under the revolving credit facility are subject to a borrowing base calculation based on the
book value of the Company's real estate assets and unrestricted cash. Letters of credit issued under the facility reduce the
available borrowing capacity. At September 30, 2025, there were no outstanding borrowings and $51.1 million of letters of
credit issued under the revolving credit facility, resulting in available capacity of $588.9 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. The revolving credit facility includes customary
affirmative and negative covenants, events of default and financial covenants. The financial covenants require a minimum level
of tangible net worth, a minimum level of liquidity and a maximum allowable leverage ratio. These covenants are measured as
defined in the credit agreement governing the facility and are reported to the lenders quarterly. 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 September 30, 2025, the Company was in
compliance with all of the covenants, limitations and restrictions of its revolving credit facility.
Senior Notes
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"). The notes represent senior unsecured obligations that rank
equally in right of payment to all existing and future senior unsecured indebtedness and may be redeemed prior to maturity,
subject to certain limitations and premiums defined in the indenture agreements. The notes are guaranteed by each of the
Company's subsidiaries to the extent such subsidiaries guarantee the Company's revolving credit facility.
FORESTAR GROUP INC.
Notes to Consolidated Financial Statements
55

In March 2025, the Company issued $500 million principal amount of 6.5% senior notes due March 15, 2033 (the "2033
notes"), with interest payable semiannually. The annual effective interest rate of the 2033 notes after giving effect to the
amortization of financing costs is 6.7%. The net proceeds from this issuance were primarily used to fund the Company's tender
offer to purchase any and all of its outstanding $400 million principal amount of 3.85% senior notes due 2026 (the "2026
notes"), of which $329.4 million aggregate principal amount was tendered. The repurchase price of $333.4 million included
accrued and unpaid interest of $4.2 million. In September 2025, the Company redeemed the remaining $70.6 million principal
amount of its 3.85% senior notes for $71.6 million, which included $1.0 million of accrued and unpaid interest. In fiscal 2025,
the Company recognized a $1.2 million loss on extinguishment of debt related to the repurchase and redemption of its 2026
notes.
At any time prior to March 15, 2028, the Company may, on one or more occasions, redeem up to 40% of the aggregate
principal amount of the 2033 notes with the net cash proceeds from certain equity offerings at a redemption price of 106.5% of
the principal amount of the 2033 notes being redeemed. At any time prior to March 15, 2028, the Company may redeem some
or all of the 2033 notes at a redemption price of 100% of the principal amount thereof plus a specified "make whole" premium
described in the indenture. The Company also has the option, at any time on or after March 15, 2028, to redeem some or all of
the 2033 notes at 103.25% of their principal amount plus any accrued and unpaid interest. In accordance with the indenture, the
redemption price decreases annually thereafter and the 2033 notes can be redeemed at par on or after March 15, 2030 through
maturity.
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 annual effective interest rate of the 2028 notes after giving effect to the amortization of financing costs is 5.2%.
The indentures governing the senior notes require that, upon the occurrence of both a change of control and a rating
decline (as defined in each indenture), the Company offers to purchase the applicable series of notes at 101% of their principal
amount, plus accrued and unpaid interest. Under the indenture governing the 2028 notes, if the Company or its restricted
subsidiaries dispose of assets, under certain circumstances, the Company will be required to either invest the net cash proceeds
from such asset sales in its business within a specified period of time, repay certain senior secured debt or debt of its non-
guarantor subsidiaries, or make an offer to purchase a principal amount of such notes equal to the excess net cash proceeds at a
purchase price of 100% of their principal amount.
The indenture governing the 2028 notes contain covenants that, among other things, restrict the ability of the Company
and its restricted subsidiaries to pay dividends or distributions, repurchase equity, prepay subordinated debt and make certain
investments; incur additional debt or issue mandatorily redeemable equity; incur liens on assets; merge or consolidate with
another company or sell or otherwise dispose of all or substantially all of the Company’s assets; enter into transactions with
affiliates; and allow to exist certain restrictions on the ability of subsidiaries to pay dividends or make other payments. The
indenture governing the 2033 notes contains certain covenants that, among other things, restrict the ability of the Company and
its restricted subsidiaries to create certain liens on assets; engage in certain sale and leaseback transactions; 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 September 30, 2025, the Company was in
compliance with all of the limitations and restrictions associated with the 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 remained at September 30, 2025.
Other Note Payable
In December 2023, the Company issued a note payable of $9.9 million as part of a transaction to acquire real estate for
development. The note is non-recourse and is secured by the underlying real estate, accrues interest at 4.0% per annum and
matures in December 2025.
FORESTAR GROUP INC.
Notes to Consolidated Financial Statements
56

Note 8 — Earnings per Share
The computations of basic and diluted earnings per share are as follows:
Year Ended September 30,
2025
2024
2023
(In millions, except share and per share amounts)
Numerator:
Net income............................................................................................ $
167.9
$
203.4
$
166.9
Denominator:
Weighted average common shares outstanding — basic .....................
50,872,335
50,426,040
49,986,526
Dilutive effect of stock-based compensation........................................
187,517
367,914
137,587
Total weighted average shares outstanding — diluted.........................
51,059,852
50,793,954
50,124,113
Basic net income per common share....................................................... $
3.30
$
4.03
$
3.34
Diluted net income per common share.................................................... $
3.29
$
4.00
$
3.33
Note 9 — Income Taxes
The components of the Company's income tax expense are as follows:
Year Ended September 30,
2025
2024
2023
(In millions)
Current tax expense:
Federal........................................................................................................... $
30.0
$
40.8
$
33.9
State and other...............................................................................................
2.8
9.1
7.0
32.8
49.9
40.9
Deferred tax expense:
Federal...........................................................................................................
14.2
13.4
11.5
State and other...............................................................................................
4.4
3.4
2.3
18.6
16.8
13.8
Income tax expense.......................................................................................... $
51.4
$
66.7
$
54.7
A reconciliation of the federal statutory rate to the Company's effective income tax rate follows:
Year Ended September 30,
2025
2024
2023
Federal statutory rate .......................................................................................
21.0 %
21.0 %
21.0 %
State, net of federal benefit..............................................................................
2.6
3.7
3.4
Valuation allowance ........................................................................................
(0.1)
—
(0.1)
Other ................................................................................................................
(0.1)
—
0.4
Effective tax rate..............................................................................................
23.4 %
24.7 %
24.7 %
The effective tax rate for all years includes an expense for state income taxes and non-deductible expenses as well as a
benefit for nontaxable income in fiscal 2025.
FORESTAR GROUP INC.
Notes to Consolidated Financial Statements
57

Significant components of deferred taxes are:
September 30,
2025
2024
(In millions)
Deferred tax assets:
Real estate ............................................................................................................................. $
16.7
$
11.9
Corporate AMT credit carryforwards....................................................................................
16.5
—
Employee benefits.................................................................................................................
4.4
3.8
Net operating loss carryforwards ..........................................................................................
0.7
0.9
Accruals not deductible until paid.........................................................................................
1.2
0.8
Total deferred tax assets.............................................................................................................
39.5
17.4
Valuation allowance..............................................................................................................
(0.6)
(0.8)
Total deferred tax assets, net of valuation allowance.................................................................
38.9
16.6
Deferred tax liabilities:
Deferral of profit on lot sales ................................................................................................
(125.1)
(84.1)
Total deferred tax liabilities........................................................................................................
(125.1)
(84.1)
Deferred tax liability, net............................................................................................................ $
(86.2) $
(67.5)
At September 30, 2025, the Company had tax benefits of $0.7 million related to state NOL carryforwards, of which $0.3
million will expire between 2030 and 2037 while the remaining $0.4 million do not have an expiration date. The Company has
$16.5 million of corporate alternative minimum tax credit carryforwards which do not have an expiration date.
The Company had a valuation allowance of $0.6 million and $0.8 million at September 30, 2025 and 2024, respectively,
because it is more likely than not that a portion of the Company's state deferred tax assets, primarily NOL carryforwards, will
not be realized because the Company is no longer operating in some states or the NOL carryforward periods are too brief to
realize the related deferred tax asset. The Company will continue to evaluate both the positive and negative evidence in
determining the need for a valuation allowance on its deferred tax assets. Any reversal of the valuation allowance in future
periods will impact the effective tax rate.
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 $0.9 million, $2.2 million and $1.7 million in fiscal 2025, 2024 and 2023, respectively, for its tax
expense generated in fiscal 2024, 2023 and 2022.
The Company files income tax returns in the U.S. and in various state jurisdictions. The statute of limitations for the
majority of the Company's tax jurisdictions remains open for examination for fiscal years 2022 through 2025. The Company is
not currently under audit for federal income taxes. The Company is under audit by various states; however, the Company is not
aware of any significant findings by the state taxing authorities.
The Company had no unrecognized tax benefits at September 30, 2025, 2024 and 2023.
On July 4, 2025, the One Big Beautiful Bill Act was signed into law (the new law). None of the tax provisions enacted by
the new law have a significant impact on the Company's financial statements.
FORESTAR GROUP INC.
Notes to Consolidated Financial Statements
58

Note 10 — Stockholders' Equity
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. In fiscal 2025, the Company did not issue
any shares under its at-the-market equity offering program. At September 30, 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.
Note 11 — Employee Benefit Plans
Retirement Plans
The Company has a 401(k) plan for all employees who have been with the Company for a period of six months or more.
The Company matches portions of employees’ voluntary contributions. The Company recorded expense of $1.6 million, $1.1
million and $1.0 million for matching contributions in fiscal 2025, 2024 and 2023, respectively, which is included in selling,
general and administrative expense in the Company's consolidated statements of operations.
In fiscal 2024, the Compensation Committee approved the participation of certain Company employees in D.R. Horton's
Supplemental Executive Retirement Plan (SERP). This plan is a non-qualified deferred compensation program that provides
benefits payable to certain management employees upon retirement, death or termination of employment. Under the SERP, the
Company accrues an unfunded benefit based on a percentage of the eligible employees’ salaries, as well as an interest factor
based upon a predetermined formula. The Company’s liability related to the SERP was $1.9 million at September 30, 2025. The
Company recorded $0.6 million and $0.1 million of expense for this plan in fiscal 2025 and 2024, respectively.
Employee Stock Purchase Plan
In October 2022, the Company’s Board of Directors adopted and, in January 2023, the Company’s shareholders approved
the 2022 Employee Stock Purchase Plan ("ESPP"). The ESPP allows eligible employees the opportunity to purchase common
stock of the Company at a discount at 6-month intervals through accumulated payroll deductions. Eligible employees purchase
common stock of the Company during a purchase period at a discounted price of 85% of the fair market value of the stock on
the designated dates of purchase. The price to eligible employees may be further discounted depending on the average fair
market value of the stock during the period and certain other criteria. Under the terms of the plan, the total fair market value of
common stock that an eligible employee may purchase each year is limited to the lesser of 15% of the employee’s annual
compensation or $25,000. Under the plan, employees purchased 14,822 shares and 6,941 shares for $0.3 million and $0.2
million in fiscal 2025 and 2024, respectively. No shares were purchased under the ESPP in fiscal 2023. The aggregate number
of shares of the Company's stock reserved for issuance under the plan is 2.5 million.
Incentive Bonus Plan
The Company’s Incentive Bonus Plan, which began in fiscal 2025, provides for the Compensation Committee to award
short-term performance bonuses to senior management based upon the level of achievement of certain criteria. For fiscal 2025,
the Compensation Committee approved awards whereby certain executive officers could earn performance bonuses based upon
percentages of the Company’s pre-tax income. Compensation expense related to this plan was $3.1 million in fiscal 2025.
Stock-Based Compensation
The Company’s Stock Incentive Plan provides for the granting of equity awards, such as performance stock units (PSUs)
and restricted stock units (RSUs), to executive officers, other key employees and non-management directors. PSUs are earned
by achieving key performance criteria and RSUs are earned through continued employment with the Company over a requisite
time period. Each stock unit represents the contingent right to receive one share of the Company’s common stock if the
performance criteria and/or vesting conditions are satisfied. The stock units have no dividend or voting rights until vested. At
September 30, 2025, the Company had 2.1 million shares of common stock reserved for issuance and 1.1 million shares
available for future grants under the Stock Incentive Plan.
FORESTAR GROUP INC.
Notes to Consolidated Financial Statements
59

Time-Based Restricted Stock Unit Equity Awards (RSUs)
During fiscal 2025, 2024 and 2023, the Company granted time-based RSUs that vest annually in equal installments over
periods of three to five years. The following table provides additional information related to time-based RSU activity during
those periods. The number of RSUs vested included shares of common stock withheld by the Company on behalf of the
employees to satisfy the tax withholding requirements.
Year Ended September 30,
2025
2024
2023
Number of
Restricted
Stock
Units
Weighted
Average
Grant Date
Fair Value
Number of
Restricted
Stock
Units
Weighted
Average
Grant Date
Fair Value
Number of
Restricted
Stock
Units
Weighted
Average
Grant Date
Fair Value
Outstanding at beginning of year.............
715,875
$
21.63
885,094
$
16.63
621,951
$
18.94
Granted.....................................................
306,300
29.00
178,035
37.94
511,698
14.76
Vested ......................................................
(238,328)
20.82
(293,253)
17.07
(186,812)
18.88
Cancelled..................................................
(25,096)
23.02
(54,001)
18.18
(61,743)
17.63
Outstanding at end of year.......................
758,751
$
24.81
715,875
$
21.63
885,094
$
16.63
The total fair value of shares vested on the vesting date was $5.3 million, $10.5 million and $3.5 million during fiscal
2025, 2024 and 2023, respectively. Stock-based compensation expense related to the Company's restricted stock units for fiscal
2025, 2024 and 2023 was $6.1 million, $5.3 million and $4.3 million, respectively. These expenses are included in selling,
general and administrative expense in the Company's consolidated statements of operations. At September 30, 2025, there was
$12.8 million of unrecognized compensation expense related to unvested time-based RSU awards. This expense is expected to
be recognized over a weighted average period of 2.5 years.
Performance-Based Restricted Stock Unit Equity Awards (PSUs)
During fiscal 2025, PSUs that vest at the end of a three-year performance period were granted to the Company's executive
officers. The number of units that ultimately vest depends on the achievement of three performance criteria which are (i)
relative total stockholder return, (ii) return on inventory and (iii) market share goals, and can range from —% to 200% of the
number of units granted. The three performance criteria are weighted equally. Compensation expense related to these grants is
based on an estimate of the Company's achievement of the three performance criteria, the elapsed portion of the performance
period and the grant date fair value of the award. No PSUs were granted in fiscal 2024 or 2023.
The following table provides additional information related to the PSUs outstanding at September 30, 2025.
Grant Date
Vesting Date
Target
Number of
Performance
Units
Grant Date
Fair Value
per Unit
Compensation Expense
Year Ended September 30,
2025
2024
2023
(In millions)
October 2024
September 2027
99,097
$
35.20
$
1.2
$
—
$
—
FORESTAR GROUP INC.
Notes to Consolidated Financial Statements
60

Note 12 — Commitments and Contingencies
Contractual Obligations and Off-Balance Sheet Arrangements
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 September 30, 2025, the Company had outstanding letters of credit of
$51.1 million under the revolving credit facility and surety bonds of $853.4 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. When the Company completes its performance obligations, the related letters of credit and bonds are generally released
shortly thereafter, leaving the Company with no continuing obligations. The Company has no material third-party guarantees.
Litigation
On April 29, 2025, a verified stockholder of the Company filed a derivative complaint in the Delaware Court of Chancery,
on behalf of the Company, against D.R. Horton, Inc., the Company’s Executive Chairman, and certain of the Company’s
directors. The complaint, which is captioned Mississippi Public Employees’ Retirement System v. D.R. Horton, Inc., C.A. No.
2025-0465-MTZ, asserts claims for breach of fiduciary duty arising out of lot sale transactions between the Company and D.R.
Horton. The complaint seeks judgment awarding the Company damages against the defendants and awarding the plaintiff the
costs and disbursements of the action, including reasonable attorneys’ and experts’ fees.
The Company disputes the allegations of wrongdoing in this matter. Nevertheless, the outcome of this lawsuit is
uncertain and cannot be predicted with any certainty. Accordingly, at this time, the Company is not able to estimate a possible
loss or range of loss that may result from this lawsuit or to determine whether such loss, if any, would have a material adverse
effect on its business, financial condition, results of operations or liquidity.
On September 6, 2024, the Maryland Department of Environment (MDE) filed suit in the Circuit Court for Harford
County, Maryland against the Company regarding various alleged stormwater compliance issues and violations at a project in
Maryland dating from 2022 through 2024, seeking injunctive relief and civil penalties. Since the Company's first discovery of
these issues, it has enhanced its practices and procedures related to stormwater compliance at the project in question, and it is
seeking to resolve these matters through further discussions with MDE. The Company does not believe it is reasonably possible
that this matter would result in a loss that would have a material effect on its consolidated financial position, results of
operations or cash flows.
In addition, the Company is involved in various legal proceedings that arise from time to time in the ordinary course of
business and believes that adequate reserves have been established for any probable losses. The Company does not believe that
the outcome of any of these proceedings will have a significant adverse effect on its financial position, long-term results of
operations or cash flows. It is possible, however, that charges related to these matters could be significant to the Company's
results or cash flows in any one accounting period.
Land Purchase Contracts
The Company enters into land purchase contracts to acquire land for the development of residential lots. Under these
contracts, the Company will fund a stated deposit in consideration for the right, but not the obligation, to purchase land or lots
at a future point in time with predetermined terms. Under the terms of many of the purchase contracts, the deposits are not
refundable in the event the Company elects to terminate the contract. 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 September 30, 2025, the Company had total deposits of $34.5 million related to contracts to purchase land with a total
remaining purchase price of approximately $870.5 million. The majority of land and lots under contract are currently expected
to be purchased within 3 years. None of the land purchase contracts were subject to specific performance provisions at
September 30, 2025.
FORESTAR GROUP INC.
Notes to Consolidated Financial Statements
61

Other Commitments
The Company leases facilities and equipment under non-cancelable long-term operating lease agreements. In addition, the
Company has various obligations under other office space and equipment leases of less than one year. Rent expense for
facilities and equipment was $4.2 million, $3.7 million and $3.1 million in fiscal 2025, 2024 and 2023, respectively. Future
minimum rental commitments, by fiscal year, under non-cancelable operating leases having an initial or remaining term in
excess of one year are: 2026 — $4.1 million; 2027 — $3.8 million; 2028 — $3.4 million; 2029 — $2.4 million; 2030 —
$1.6 million; and $0.4 million thereafter.
Note 13 — 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 2025, 2024 and 2023, selling, general
and administrative expense in the consolidated statements of operations included $7.3 million, $5.6 million and $3.8 million for
these shared services, $14.4 million, $9.6 million and $8.5 million reimbursed to D.R. Horton for the cost of health insurance
and other employee benefits and $1.6 million, $3.1 million and $2.9 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 $0.9 million, $2.2 million and $1.7 million in fiscal 2025, 2024 and 2023, respectively, for its tax
expense generated in fiscal 2024, 2023 and 2022.
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, 2025 and 2024, the Company owned approximately
65,100 and 57,800 residential lots, of which D.R. Horton had the following involvement.
September 30,
2025
2024
(Dollars in millions)
Residential lots under contract to sell to D.R. Horton.....................................................................
22,800
20,500
Owned lots subject to right of first offer with D.R. Horton based on executed purchase and sale
agreements.......................................................................................................................................
17,600
17,200
Earnest money deposits from D.R. Horton for lots under contract................................................. $
179.7
$
168.4
Remaining sales price of lots under contract with D.R. Horton...................................................... $
2,000.0
$
1,840.5
Lot and land sales to D.R. Horton during fiscal years 2025, 2024 and 2023 were as follows:
Year Ended September 30,
2025
2024
2023
(Dollars in millions)
Residential lots sold to D.R. Horton ......................................................................
11,751
13,267
12,249
Residential lot sales revenues from sales to D.R. Horton...................................... $
1,277.6
$
1,271.4
$
1,094.7
Decrease in contract liabilities on lot sales to D.R. Horton................................... $
1.1
$
2.9
$
—
Tract sales and other revenues from D.R. Horton.................................................. $
99.5
$
23.7
$
115.1
FORESTAR GROUP INC.
Notes to Consolidated Financial Statements
62

During fiscal 2025, 2024 and 2023, the Company reimbursed D.R. Horton approximately $20.6 million, $27.5 million,
and $10.9 million, respectively for previously paid earnest money and $26.5 million, $22.9 million, and $21.8 million,
respectively 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 2025, the Company purchased $2.1 million
of water rights from D.R. Horton.
During fiscal 2025, 2024 and 2023, the Company paid D.R. Horton $0.4 million, $0.9 million and $0.8 million,
respectively for land development services. These amounts are included in cost of sales in the Company’s consolidated
statements of operations.
At September 30, 2025 and 2024, 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, 2025 and 2024 accrued expenses and other liabilities on the Company's consolidated balance sheets
included $2.2 million and $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. 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.
FORESTAR GROUP INC.
Notes to Consolidated Financial Statements
63

Note 14 — Fair Value Measurements
Fair value is the exchange price that would be received for an asset or paid to transfer a liability in an orderly transaction
between market participants. In arriving at a fair value measurement, the Company uses a fair value hierarchy based on three
levels of input, of which the first two are considered observable and the last unobservable. The three levels of input used to
establish fair value are the following:
•
Level 1 — Quoted prices in active markets for identical assets or liabilities;
•
Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for
similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be
corroborated by observable market data for substantially the full term of the assets or liabilities; and
•
Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair
value of the assets or liabilities.
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 September 30, 2025 and 2024.
Fair Value at September 30, 2025
Carrying
Value
Level 1
Level 2
Level 3
Total
(in millions)
Cash and cash equivalents (a)............................... $
379.2
$
379.2
$
—
$
—
$
379.2
Debt (b) (c) .............................................................
802.7
—
808.9
9.9
818.8
Fair Value at September 30, 2024
Carrying
Value
Level 1
Level 2
Level 3
Total
(in millions)
Cash and cash equivalents (a)............................... $
481.2
$
481.2
$
—
$
—
$
481.2
Debt (b) (c) .............................................................
706.4
—
683.6
9.9
693.5
_____________________
(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 September 30, 2025 and 2024, 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.
(c) The fair values of the Company's other note payable approximate carrying value due to its short-term nature and is
classified as Level 3 within the fair value hierarchy.
FORESTAR GROUP INC.
Notes to Consolidated Financial Statements
64

Item 9.
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.
None.
Item 9A.
Controls and Procedures.
(a) Disclosure controls and procedures
Our management, with the participation of the Chief Executive Officer and Chief Financial Officer, has evaluated the
effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")), as of the end of the period covered by this report. Based
on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period,
our disclosure controls and procedures were effective in recording, processing, summarizing and reporting, on a timely basis,
information required to be disclosed by us in the reports that we file or submit under the Exchange Act and were effective in
ensuring that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is
accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as
appropriate to allow timely decisions regarding required disclosure.
(b) Internal control over financial reporting
Management’s report on internal control over financial reporting and the report of our independent registered public
accounting firm are included in Part II, Item 8 of this Annual Report on Form 10-K.
(c) Changes in internal control over financial reporting
There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and
15d-15(f) under the Exchange Act) during the quarter ended September 30, 2025 that have materially affected, or are
reasonably likely to materially affect, our internal control over financial reporting.
Item 9B.
Other Information.
During the three months ended September 30, 2025, no director or Section 16 officer adopted or terminated any Rule
10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements (in each case, as defined in Item 408(a) of Regulation S-
K).
Item 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not Applicable.
65

PART III
Item 10.
Directors, Executive Officers and Corporate Governance.
The information required by this item is set forth under the captions "Election of Directors," "Delinquent Section 16(a)
Reports," "Corporate Governance and Board Matters" and "Insider Trading Policy" in our definitive Proxy Statement for the
2026 Annual Meeting of Stockholders.
Item 11.
Executive Compensation.
The information required by this item is set forth under the captions "Director Compensation," "Executive Compensation"
and "CEO Pay Ratio" in our definitive Proxy Statement for the 2026 Annual Meeting of Stockholders.
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The information required by this item is set forth under the captions "Securities Authorized for Issuance under Equity
Compensation Plans" and "Beneficial Ownership of Common Stock" in our definitive Proxy Statement for the 2026 Annual
Meeting of Stockholders.
Item 13.
Certain Relationships and Related Transactions, and Director Independence.
The information required by this item is set forth under the captions "Certain Relationships and Related Party
Transactions" and "Corporate Governance and Board Matters" in our definitive Proxy Statement for the 2026 Annual Meeting
of Stockholders.
Item 14.
Principal Accountant Fees and Services.
The information required by this item is set forth under the caption "Ratification of Appointment of our Independent
Registered Public Accounting Firm" in our definitive Proxy Statement for the 2026 Annual Meeting of Stockholders.
66

PART IV
Item 15.
Exhibits and Financial Statement Schedules.
(a) The following documents are filed as part of this report.
(1)
Financial Statements
Our consolidated financial statements are included in Part II, Item 8 of this Annual Report on Form 10-K.
(2)
Financial Statement Schedules
All financial statement schedules are omitted because they are not applicable or the required information is
included in the consolidated financial statements or notes thereto.
(3)
Exhibits
The exhibits listed in (b) are filed or incorporated by reference as part of this Annual Report on Form 10-K.
(b) Exhibits
Exhibit
Number
Exhibit
2.1
Agreement and Plan of Merger, dated as of June 29, 2017, by and among Forestar Group Inc., D.R. Horton,
Inc. and Force Merger Sub, Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Current Report
on Form 8-K filed with the Commission on June 29, 2017).
3.1
Third Amended and Restated Certificate of Incorporation of Forestar Group Inc. (incorporated by reference
to Exhibit 3.2 of the Company’s Current Report on Form 8-K filed with the Commission on January 22,
2025).
3.2
Second Amended and Restated Bylaws of Forestar Group Inc. (incorporated by reference to Exhibit 3.2 of
the Company’s Current Report on Form 8-K filed with the Commission on October 10, 2017).
3.3
First Amendment to the Second Amended and Restated Bylaws of Forestar Group Inc. (incorporated by
reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the Commission on
January 30, 2018).
3.4
Second Amendment to the Second Amended and Restated Bylaws of Forestar Group Inc. (incorporated by
reference from Exhibit 3.1 to Forestar Group Inc.’s Quarterly Report on Form 10-Q filed with the
Commission on August 8, 2018).
4.1
Specimen Certificate for shares of common stock, par value $1.00 per share (incorporated by reference to
Exhibit 4.7 of the Company's Registration Statement on Form S-3 filed with the Commission on September
24, 2018).
4.2
Indenture, dated as of February 25, 2020, by and among Forestar Group Inc., the subsidiary guarantors
party thereto and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 of the
Company’s Current Report on Form 8-K filed with the Commission on February 25, 2020).
4.3
Supplemental Indenture, dated as of August 29, 2022, among FOR Nevada Development LLC, FOR
California Development LLC, Forestar Group Inc. and U.S. Bank Trust Company, National Association (as
successor to U.S. Bank National Association), as trustee, relating to the 5.000% Senior Notes due 2028 of
Forestar Group Inc. (incorporated by reference to Exhibit 4.3 of the Company's Annual Report on Form 10-
K filed with the Commission on November 17, 2022).
4.4
Description of Securities (incorporated by reference to Exhibit 4.6 of the Company's Annual Report on
Form 10-K filed with the Commission on November 21, 2019).
4.5
Indenture, dated as of March 14, 2025 by and among Forestar Group Inc., the subsidiary guarantors party
thereto and U.S. Bank Trust Company, National Association, as trustee (incorporated by reference to
Exhibit 4.1 of the Company’s Current Report on Form 8-K filed with the Commission on March 14, 2025).
10.1†
Forestar Real Estate Group Inc. Supplemental Executive Retirement Plan (incorporated by reference to
Exhibit 10.5 of Amendment No. 5 to the Company’s Form 10 filed with the Commission on December 10,
2007).
10.2†
Amendment No. 1 to Forestar Group Inc. Supplemental Executive Retirement Plan (incorporated by
reference to Exhibit 10.3 of the Company’s Annual Report on Form 10-K filed with the Commission on
March 14, 2013).
10.3†
Amendment No. 2 to Forestar Group Inc. Supplemental Executive Retirement Plan (incorporated by
reference to Exhibit 10.25 of the Company's Annual Report on Form 10-K filed with the Commission on
March 11, 2014).
67

10.4†
Form of Indemnification Agreement (incorporated by reference to Exhibit 10.3 of the Company’s Current
Report on Form 8-K filed with the Commission on October 10, 2017).
10.5†
Form of Change in Control/Severance Agreement between the Company and its named executive officers
(incorporated by reference to Exhibit 10.10 of the Company’s Form 10 filed with the Commission on
August 10, 2007).
10.6†
Form of First Amendment to Change in Control/Severance Agreement between the Company and certain
named executive officers (incorporated by reference to Exhibit 10.8 of the Company’s Annual Report on
Form 10-K filed with the Commission on February 28, 2018).
10.7
Shared Services Agreement, dated October 6, 2017, between Forestar Group Inc. and D.R. Horton, Inc.
(incorporated by reference to Exhibit 10.7 of the Company’s Form 10-K filed with the Commission on
November 19, 2020).
10.8
Amended and Restated Stockholder’s Agreement, dated as of October 28, 2024, by and between Forestar
Group Inc. and D.R. Horton, Inc. (incorporated by reference to Exhibit 10.1 of the Company’s Current
Report on Form 8-K filed with the Commission on November 1, 2024).
10.9
Master Supply Agreement dated as of June 29, 2017, by and between Forestar Group Inc. and D.R. Horton,
Inc. (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed with
the Commission on June 29, 2017).
10.10
State and Local Tax Sharing Agreement, dated as of April 1, 2019, between Forestar Group Inc. and D.R.
Horton, Inc. (incorporated by reference to Exhibit 10.23 of the Company’s Annual Report on Form 10-K
filed with the Commission on November 17, 2023).
10.11†
Forestar Real Estate Group Inc. 2007 Stock Incentive Plan (incorporated by reference to Exhibit 10.6 of
Amendment No. 5 to the Company’s Form 10 filed with the Commission on December 10, 2007).
10.12†
First Amendment to the Forestar Real Estate Group Inc. 2007 Stock Incentive Plan (incorporated by
reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the Commission on
May 13, 2009).
10.13†
Second Amendment to the Forestar Group Inc. 2007 Stock Incentive Plan (incorporated by reference to
Exhibit 10.22 of the Company’s Annual Report on Form 10-K filed with the Commission on March 3,
2010).
10.14†
Form of Restricted Stock Units Agreement pursuant to Forestar Real Estate Group Inc.’s 2007 Stock
Incentive Plan (incorporated by reference to Exhibit 10.11 of the Company’s Annual Report on Form 10-K
filed with the Commission on March 14, 2013).
10.15†
Forestar Group Inc. 2018 Stock Incentive Plan (incorporated by reference to Exhibit 10.2 of the Company’s
Quarterly Report on Form 10-Q filed with the Commission on May 9, 2018).
10.16†
Forestar Group Inc. Executive Cash Incentive Plan (incorporated by reference to Exhibit 10.2 of the
Company's Current Report on Form 8-K filed with the Commission on November 1, 2024).
10.17†
Form of Restricted Stock Unit Agreement (Employee) pursuant to Forestar Group Inc.’s 2018 Stock
Incentive Plan (incorporated by reference to Exhibit 10.3 of the Company’s Quarterly Report on Form 10-Q
filed with the Commission on May 9, 2018).
10.18
Credit Agreement, dated August 16, 2018, among Forestar Group Inc., the lenders party thereto and
JPMorgan Chase Bank, N.A., as administrative agent (incorporated by reference to Exhibit 10.1 of the
Company’s Current Report on Form 8-K filed with the Commission on August 17, 2018).
10.19†
Form of Restricted Stock Unit Award Agreement (Employee) pursuant to the Company's 2018 Stock
Incentive Plan (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q
filed with the Commission on July 30, 2019).
10.20†
Form of Restricted Stock Unit Award Agreement (Director) pursuant to the Company's 2018 Stock
Incentive Plan (incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q
filed with the Commission on July 30, 2019).
10.21†
Form of Performance Stock Units Award Agreement (incorporated by reference to Exhibit 10.3 of the
Company's Current Report on Form 8-K filed with the Commission on November 1, 2024).
10.22
Amendment No. 1 to Credit Agreement, dated October 2, 2019 by and among Forestar Group Inc.,
JPMorgan Chase Bank, N.A., as administrative agent, and the Lenders named therein (incorporated by
reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the Commission on
October 3, 2019).
10.23
Amendment No. 2 to Credit Agreement, dated April 16, 2021 by and among the Company, JPMorgan
Chase Bank, N.A., as administrative agent, and the Lenders named therein (incorporated by reference to
Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the Commission on April 20, 2021).
68

10.24
Amendment No. 3 to Credit Agreement, dated October 28, 2022 by and among the Company, JPMorgan
Chase Bank, N.A., as administrative agent, and the Lenders named therein (incorporated by reference to
Exhibit 10.1 of the Company's Current Report on Form 8-K filed with the Commission on November 1,
2022).
10.25
Amendment No. 4 to Credit Agreement, dated December 18, 2024 by and among the Company, JPMorgan
Chase Bank, N.A., as administrative agent, and the Lenders named therein (incorporated by reference to
Exhibit 10.1 of the Company's Current Report on Form 8-K filed with the Commission on December 23,
2024).
10.26
Equity Distribution Agreement, dated as of November 19, 2024 among Forestar Group Inc. and the Sales
Agents named therein (incorporated by reference to Exhibit 1.1 of the Company's Current Report on Form
8-K filed with the Commission on November 19, 2024).
19.1
Insider Trading Policy (incorporated by reference to Exhibit 19.1 of the Company's Annual Report on Form
10-K filed with the Commission on November 19, 2024).
21.1*
List of Subsidiaries of the Company.
23.1*
Consent of Ernst & Young LLP.
31.1*
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
97.1†
Forestar Compensation Recoupment (Clawback) Policy (incorporated by reference to Exhibit 97.1 of the
Company's Annual Report on Form 10-K filed with the Commission on November 17, 2023).
101.INS**
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its
XBRL tags are embedded within the Inline XBRL document.
101.SCH**
Inline XBRL Taxonomy Extension Schema Document.
101.CAL**
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF**
Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB**
Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE**
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104**
Cover Page Interactive Data File (embedded within the Inline XBRL document contained in Exhibit 101).
_____________________
*
Filed or furnished herewith.
**
Submitted electronically herewith.
†
Management contract or compensatory plan or arrangement.
Item 16.
Form 10-K Summary.
None.
69

SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Forestar Group Inc.
Date: November 19, 2025
By:
/s/ James D. Allen
James D. Allen
Executive Vice President and Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
Title
Date
/s/ Anthony W. Oxley
Chief Executive Officer and Director
(Principal Executive Officer)
November 19, 2025
Anthony W. Oxley
/s/ James D. Allen
Executive Vice President and Chief Financial Officer
(Principal Financial and Principal Accounting Officer)
November 19, 2025
James D. Allen
/s/ Donald J. Tomnitz
Executive Chairman of the Board
November 19, 2025
Donald J. Tomnitz
/s/ Kellie L. Fischer
Director
November 19, 2025
Kellie L. Fischer
/s/ Samuel R. Fuller
Director
November 19, 2025
Samuel R. Fuller
/s/ Lisa H. Jamieson
Director
November 19, 2025
Lisa H. Jamieson
/s/ Elizabeth (Betsy) Parmer
Director
November 19, 2025
Elizabeth (Betsy) Parmer
/s/ George W. Seagraves, II
Director
November 19, 2025
George W. Seagraves, II
70

STOCKHOLDER
INFORMATION
FORESTAR GROUP INC.
Transfer Agent & Registrar
Computershare
P.O. Box 43078
Providence, RI 02940-3006
781.575.2723
Independent Auditors
Ernst & Young LLP, Fort Worth, Texas
Annual Meeting
The 2026 Annual Meeting of Stockholders will be
held at 2221 E. Lamar Blvd., Arlington, Texas on
January 19, 2026 at 12:00 p.m. CST.
Stock Listing
Forestar’s common stock is listed on the New York
Stock Exchange and the NYSE Texas under the
ticker symbol FOR.
Company Website
Additional information regarding Forestar, including
the Annual Report on Form 10-K and other periodic
reports filed with the Securities and Exchange
Commission, may be obtained from Forestar’s
home page on the internet, the address of which
is www.forestar.com.
A copy of Forestar’s Annual Report on Form 10-K,
as filed with the Securities and Exchange
Commission, will be sent without charge upon
written request made to the company’s Investor
Relations Department at the mailing address below.
Mailing Address
Forestar Group Inc.
2221 E. Lamar Blvd., Suite 790
Arlington, Texas 76006
817.769.1860
BOARD MEMBERS
Donald J. Tomnitz
Executive Chairman of the Board
Samuel R. Fuller
Retired Chief Financial Officer of D.R. Horton, Inc.
Lisa H. Jamieson
Shareholder/Attorney at
Bourland, Wall & Wenzel, P.C.
George W. Seagraves, II
Retired North Region President of D.R. Horton, Inc.
Kellie L. Fischer
Executive Vice President and Chief Financial Officer
of Rangers Baseball Express LLC
Elizabeth (Betsy) Parmer
Attorney at
The Law Offices of Elizabeth Parmer
$QWKRQ\:2[OH\
3UHVLGHQWDQG&KLHI([HFXWLYH2IILFHU

FORESTAR GROUP INC.
2221 E. Lamar Blvd. | Suite 790 | Arlington, Texas 76006 | 817.769.1860 | www.forestar.com



NOTICE OF 2026
ANNUAL MEETING OF STOCKHOLDERS
To Be Held On
January 19, 2026
Dear Stockholders of Forestar:
WHEN AND WHERE THE ANNUAL MEETING OF STOCKHOLDERS WILL BE HELD
You are invited to attend the 2026 Annual Meeting of Stockholders of Forestar Group Inc. Our 2026 Annual Meeting
will be held at our corporate office located at 2221 E. Lamar Blvd., Arlington, Texas 76006, on Monday, January 19, 2026, at
12:00 p.m. Central Time.
PURPOSES OF THE MEETING
At the 2026 Annual Meeting, the stockholders will be asked to vote on the following proposals and to conduct any
other business properly brought before the meeting:
Our Board's Recommendation
Proposal No. 1: Election of Directors: To elect the seven directors named in our proxy
statement
FOR
Proposal No. 2: Advisory Vote to Approve Our Executive Compensation: To seek an
advisory vote on the approval of executive compensation
FOR
Proposal No. 3: Ratific
f ation of Auditors: To ratify t
f
he appointment of Ernst & Young LLP
as our independent registered public accounting fir
f m for
f
fiscal year 2026
FOR
WHO CAN ATTEND AND VOTE
Only stockholders of record at the close of business on November 24, 2025 will be entitled to receive notices about and
to vote at the 2026 Annual Meeting or any later meeting if the 2026 Annual Meeting is adjourned or postponed.
If you ne d
ed help voting y
g your h
shares, please c lall 1-866-232-3037 (t loll f
l fre
f
)e) or 1-720-358-3640 (i(interna itional t loll f
l fre
f
)e).
Sincerely,
DONALD J. TOMNITZ
Executive Chairman
December 16, 2025
Arlington, Texas

Your vote is important. You are invited to attend the meeting in person. If it is determined that a change in the
date, time or location of the 2026 Annual Meeting or a change to a virtual meeting for
f
mat is advisable or required, an
announcement of such changes will be made through a press release, additional proxy materials file
f
d with the
Securities and Exchange Commission, and on the Investor Relations section of our website. Please check this website
in advance of the meeting date if you are planning to attend in person.
If you need directions to the meeting location, you may contact our Corporate Secretary by phone at (817)
769-1860 or by mail at 2221 E. Lamar Blvd., Suite 790, Arlington, Texas 76006. Whether or not you plan to attend the
meeting, and no matter how many shares you own, please vote over the internet or by telephone, or you may also vote
by signing, dating and returning the proxy card by mail. By voting befor
f
e the meeting, you will help us ensure that
there are enough stockholders voting to hold a meeting and avoid added proxy solicitation costs. If you attend the
meeting, you may vote in person, if you wish, even if you have previously submitted a proxy. You may revoke your
proxy at any time by fol
f lowing the instructions under "General Inf
I
or
f
ma
r
tion — How
H
You Can
C
Change or Revoke Your
Vote."
Important Notice Regarding Availability of Proxy Materials for
f
the 2026 Annual Meeting to be held on
January 19, 2026. The Proxy Statement and Annual Report on Form 10-K are available at www.proxyvote.com.

TABLE OF CONTENTS
PROXY STATEMENT SUMMARY ...................................................................................................................
1
Key Operating and Financial Highlights.................................................................................................................
1
Key Performance Highlights...................................................................................................................................
1
Stock Price and Other Data .....................................................................................................................................
1
Corporate Governance Highlights...........................................................................................................................
2
Executive Compensation Highlights.......................................................................................................................
2
PROPOSAL NO. 1 - ELECTION OF DIRECTORS ..........................................................................................
3
Selection of Director Nominees ..............................................................................................................................
4
Director Qualific
f ations............................................................................................................................................
4
Stockholder’s Agreement........................................................................................................................................
4
Director Elections Standard and Resignation Policy...............................................................................................
5
Director Nominees ..................................................................................................................................................
6
How Nominees are Selected....................................................................................................................................
9
CORPORAT
R
E GOVERNANCE AND BOARD MATTERS..............................................................................
10
Board Leadership Structur
t
e.....................................................................................................................................
10
Risk Oversight.........................................................................................................................................................
10
Board Committees and Stockholder’s Agreement ..................................................................................................
11
Audit Committee .....................................................................................................................................................
11
Compensation Committee .......................................................................................................................................
12
Nominating and Governance Committee ................................................................................................................
13
Executive Committee ..............................................................................................................................................
13
Director Independence.............................................................................................................................................
14
Board Meetings .......................................................................................................................................................
14
Other Corpo
r
rate Governance Matters......................................................................................................................
14
Insider Trading Policy.............................................................................................................................................
15
Policies on Business Conduct and Ethics................................................................................................................
15
Communications with Directors..............................................................................................................................
15
DIRECTOR COMPENSATION ...........................................................................................................................
16
Director Fee Schedul
d e .............................................................................................................................................
16
Insurance and Indemnific
f ation ................................................................................................................................
16
Fiscal 2025 Director Compensation........................................................................................................................
17
PROPOSAL NO. 2 — ADVISORY VOTE ON THE APPROVAL OF EXECUTIVE COMPENSATION
18
EXECUTIVE OFFICERS......................................................................................................................................
19
EXECUTIVE COMPENSATION.........................................................................................................................
20
Compensation Discussion and Analysis..................................................................................................................
20
Overview............................................................................................................................................................
20
Advisory Vote ...................................................................................................................................................
22
Compensation Philosophy and Objectives.........................................................................................................
22
Elements of our Compensation Program ...........................................................................................................
23
Other Compensation and Benefits .....................................................................................................................
30
Clawback Policy.................................................................................................................................................
31
Oversight of Executive Compensation...............................................................................................................
31
Compensation Committee Report ...........................................................................................................................
34
Summary Compensation Tabl
a e ...............................................................................................................................
35
Fiscal 2025 Grants of Plan-Based Awards..............................................................................................................
37
Page
i

Fiscal 2025 Outstanding Equity Awards.................................................................................................................
38
Fiscal 2025 Stock Vested ........................................................................................................................................
40
Nonqualifie
f d Defer
f red Compensation Plans...........................................................................................................
40
Potential Payments Upon Termination or Change in Control.................................................................................
42
Securities Authorized for Issuance under Equity Compensation Plans ..................................................................
44
CEO PAY RATIO...................................................................................................................................................
45
PAY VERSUS PERFORMANCE .........................................................................................................................
46
AUDIT COMMITTEE REPORT..........................................................................................................................
50
PROPOSAL NO. 3 — RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM ...........................................................................................................................
51
BENEFICIAL OWNERSHIP OF COMMON STOCK......................................................................................
52
Management ............................................................................................................................................................
52
Certain Other Beneficial Owners ............................................................................................................................
53
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS.................................................
54
Related Party Transaction Policy ............................................................................................................................
54
Stockholder’s Agreement........................................................................................................................................
55
Master Suppl
u
y Agreement.......................................................................................................................................
56
Shared Services Agreement.....................................................................................................................................
57
Tax Sharing Agreement...........................................................................................................................................
57
Related Party Transactions......................................................................................................................................
58
GENERAL INFORMATION ................................................................................................................................
60
Time, Place and Purpos
r
es of Meeting .....................................................................................................................
60
Record Date.............................................................................................................................................................
60
Stockholders Sharing the Same Address.................................................................................................................
60
Difference Between Holding Shares as a Stockholder of Record and as a Benefic
f ial Owner................................
60
Voting Your Shares.................................................................................................................................................
61
Voting in Person at the Annual Meeting.................................................................................................................
62
How You Can Change or Revoke Your Vote .........................................................................................................
62
Quorum
r
....................................................................................................................................................................
62
Abstentions..............................................................................................................................................................
63
Broker Non-Votes ...................................................................................................................................................
63
Required Votes........................................................................................................................................................
63
Proxy Solicitation....................................................................................................................................................
64
DATE FOR RECEIPT OF STOCKHOLDER PROPOSALS............................................................................
65
Voting Questions or Assistance...............................................................................................................................
65
Electronic Delivery o
r
f Proxy Materials...................................................................................................................
65
REQUESTING DOCUMENTS FROM THE COMPANY.................................................................................
66
OTHER MATTERS................................................................................................................................................
67
Page
ii

Proxy Statement Summary
We expect that the Proxy Statement and the accompanying form of proxy will first be released to our stockholders of
record on or about Dece b
mber 16, 2025.
Forestar Group Inc. is referred to as "Forestar," the "Company," "we," and "our" in this Proxy Statement.
Key Operating and Financial Highlights
The Forestar team, led by our executive officers, delivered solid operating and financial results during fis
f cal 2025. Our
results reflect the strength of our experienced operational teams, differentiated business model, broad geographic foo
f
tprint and
strong customer base.
Consolidated revenues for
f
fiscal 2025 totaled $1.7 billion on 14,240 lots sold. Over the last five years, Forestar's
consolidated revenues increased nearly 80% and pre-tax income increased by more than 180% as we have continued to grow
our platform in the fra
f gmented residential lot development industry.
r
Over this same period, earnings per diluted share increased
161% and book value per share increased 92%.
Key Performance Highlights
Lot Deliveries
10,373
14,240
FY 2020
FY 2025
Pre-Tax Income and Pre-Tax Profit Margin
$78
$219
8.4%
13.2%
Pre-Tax Income
Pre-Tax Profit Margin
FY 2020
FY 2025
Note: Dollars in millions, except per share amounts.
Revenue
$932
$1,662
FY 2020
FY 2025
Book Value per Share
$18.12
$34.78
FY 2020
FY 2025
As of and for the Fiscal Year Ended September 30
% Change
Stock Price and Other Data
2025
2024
2023
2022
2021
2025 vs 2021
Common stock price
$26.59
$32.37
$26.94
$11.19
$18.63
43%
Total equity market capi
a talization (in millions)
$1,352
$1,640
$1,344
$557
$924
46%
Book value per common share
$34.78
$31.47
$27.43
$24.08
$20.47
70%
Diluted earnings per common share
$3.29
$4.00
$3.33
$3.59
$2.25
46%
1

Corporate Governance Highlights
Our governance structur
t
e, as establ
a ished by our Corporate Governance Guidelines, ensures robust independent oversight
of management and accountability to stockholders.
Governance
Principles
Corporate Governance Practice
Accountability
to our
Stockholders
P
Our common stock is our only class of stock, with one vote per share.
P
Our stockholders elect directors for one-year terms by a majority vote standard.
P
We do not have a "poison pill" or similar anti-takeover provision in place.
Board
Independence
P
Five of our seven director nominees are independent.
P
We have a separate chairman and chief executive offi
f cer and an independent Presiding Director.
P
Our independent directors meet in executive session.
P
All the members of our three standing Board committees—Audit, Compensation and Nominating and
Governance—are independent.
Board
Composition
P
Three of our seven directors are women and four
f
are men.
P
One of our key Board committee chairs is a woman and two are men.
P
Added two new independent directors in October 2024 through board refreshment, including one
woman and one man.
Board Policies
and Practices
P
Our Board annually reviews its performance and the performance of each of its standing committees.
P
Our Nominating and Governance Committee oversees risks associated with overall governance and
sustainabi
a lity.
P
Our Compensation Committee annually evaluates our Executive Chairman and CEO’s performance.
P
Our Board and Audit Committee oversee cybersecurity risk.
Risk Mitigation
and Alignment
of Interests
P
We prohibit our executives and directors fro
f
m all forms of hedging or pledging Company stock. No
executive offi
f cer or director has any shares of Company stock hedged or pledged.
P
We maintain a clawback policy that appl
a
ies to both cash and equity incentives and is triggered by
either a fin
f ancial restatement or other material harm to the Company.
Executive Compensation Highlights
Our Compensation Committee strives to design a fai
f r and competitive compensation package for
f
executive offic
f ers using
incentives based on Company performance that emphasize the creation of sustainable long-term stockholder value and that will
attract, motivate and retain highly qualifie
f d and experienced executives.
Executive
Compensation
Principles
Executive Compensation Objectives
Business
Resilience
P
Achieve long-term sustainabi
a lity of our business.
Alignment of
Interests
P
Align our executives' interests with stockholders' interests with the goal of maximizing long-term
shareholder value.
Pay-for-
Perfor
f
mance
P
Award compensation that recognizes valuabl
a e short- and long-term individual performance as well as
the Company's overall performance.
Attract and
Retain
P
Attract, motivate and retain highly qualified and experienced executives.
2

Proposal No. 1 – Election of Directors
Our Board of Directors (the "Board") c
"
urrently consists of seven directors, all of whom are up f
u
or
f
re-election at the
2026 Annual Meeting. Six of our didirector w
s
ere elected by our stockholders at the 2025 Annual Meeting. Mr. O lxl y
ey was
ap
i
point d
ed to hthe Boa d
rd in Ap iril 2025. Ea h
ch of hth s
e even didirectors, ifif lelect d
ed at hthe 2026 Annual Mee iting,
i
willll serve until the
2027 Annual Meeting and until his or her successor has been elected and qualifie
f d.
The Nominating and Governance Committee recommended our seven directors as director nominees to the Board of
Directors, each of whom is listed under the heading "Director Nominees" on page 6.
Afte
f r review and consideration by the Board of Directors, as recommended by the Nominating and Governance
Committee, the Board nominated the fol
f lowing seven nominees for election to our Board of Directors:
P
Donald J. Tomnitz
P
Anthony W. Oxley
P
Kellie L. Fischer
P
Elizabeth (Betsy) Parmer
P
Samuel R. Fuller
P
George W. Seagraves, II
P
Lisa H. Jamieson
The Board of Directors Unanimously Recommends that Stockholders Vote "FOR"
Each of our Seven Nominees for Director.
3

Selection of Director Nominees
Ms. Kellie L. Fischer, Mr. Samuel R. Fuller, Ms. Lisa H. Jamieson, Mr. Anthony W. Oxley, Ms. Elizabeth (Betsy)
Parmer, Mr. George W. Seagraves, II, and Mr. Donald J. Tomnitz are standing for election as directors to serve until the 2027
Annual Meeting, or until their replacements are dul
d y elected and meet all requirements. All nominees are presently serving as
directors. Afte
f r reviewing their qualific
f ations, the Nominating and Governance Committee recommended them as nominees
to the ful
f l Board, and the ful
f l Board subs
u
equently voted unanimously to recommend them to the stockholders as nominees.
Mr. Fuller, Ms. Parmer, Mr. Seagraves and Mr. Tomnitz were designated by D.R. Horton for
f
nomination as directors. Ms.
Fischer, Ms. Jamieson and Mr. Oxley were each designated as a Non-Stockholder Designee under the Stockholder's
Agreement with D.R. Horton (as described below) for nomination as directors.
We did not pay a fee to any third party to identify, evaluate or assist in identifyi
f ng potential nominees in fiscal 2025.
Each of the nominees has consented to be named in this Proxy Statement and to serve if elected. If any nominee
becomes unabl
a e to serve, however, the persons named as proxies in the enclosed for
f
m of proxy intend to vote the shares
represented by the proxy for the election of such other person or persons as may be nominated or designated by management,
unless they are directed by the proxy to do otherwise.
Unless you specify o
f
therwise on your proxy, the persons named as proxies in such proxy intend to vote for
f
the election
of the nominees listed below to serve as directors.
Director Qualifications
Our Nominating and Governance Committee is tasked with ensuring that the proper skills and experience are
represented on our Board. Our Corpor
r
ate Governance Guidelines, which are availabl
a e on our website at www.fo
. restar.com
under the "Investor Relations — Corpor
r
ate Governance — Governance Documents" section, include a non-exclusive list of
qualific
f ations that should be considered when reviewing director candidates. The qualific
f ations consider business experience,
independence, an understanding of, r
f
eputation or experience relevant to our business, diversity of backgrounds and skills and
other fact
f
ors. We expect all our directors to possess the highest personal and profes
f
sional ethics, integrity and values. We also
expect our directors to be committed to the long-term interests of our stockholders as a whole. Additionally, we review the
existing time commitments of director candidates to confir
f m that they do not have any obligations that would confli
f ct with
the time commitments of a director of the Company. The Nominating and Governance Committee seeks to recrui
r t candidates
who can contribute diffe
f rent perspectives to the Board, as the Nominating and Governance Committee recognizes the
importance of having a broad range of backgrounds, education, experiences, expertise, perspectives and leadership skills.
Stockholder’s Agreement
In October 2017, we became a majo
a rity-owned subs
u
idiary of D.R. Horton, Inc. ("D.R. Horton") t
"
hrough a merger (the
"Merger") a
"
nd a controlled company under New York Stock Exchange ("NYSE
Y
") r
"
ul
r es. As a controlled company, we are not
required to have a majo
a rity of independent directors, an independent compensation committee, or an independent nominating
committee. However, at this time, we intend to continue to maintain a majority of independent directors and both an
independent compensation committee and nominating committee.
In connection with the Merger, we entered into a Stockholder’s Agreement with D.R. Horton (as amended and restated
on October 28, 2024, the "A&R Sto
S ckhol
k
de
l
r’s A
’
greement") t
"
hat provides for
f
certain Board and Board committee appoi
a
ntment
rights. These provisions also appear in our Third Amended and Restated Certific
f ate of Incorpor
r
ation.
4

Under the A&R Stockholder's Agreement, at all times when D.R. Horton and its affi
f liates benefic
f ially own 20% or
more of our voting securities, the Board will have five directors unless otherwise agreed in writing between us (as appr
a
oved
by a majority of our independent directors) and D.R. Horton. Additionally, D.R. Horton has the right to designate a number
of directors equal to the percentage of our voting securities benefic
f ially owned by D.R. Horton and its affi
f liates multiplied by
the total number of directors that we would have if there were no vacancies, rounded up t
u
o the nearest whole number (and in
any event not less than one). We and D.R. Horton have also each agreed to use reasonabl
a e best efforts to ensure to cause at
least three directors to be considered "independent" under the rules of the SEC and under appl
a
icable listing standards.
Following the appr
a
oval process described above
a
, our Board currently consists of seven directors, comprised of four
individuals designated by D.R. Horton (which includes our Executive Chairman) and three individuals designated by the
Nominating and Governance Committee, as the Non-Stockholder Designees (as defin
f ed in the A&R Stockholder's
Agreement).
For more infor
f
mation on the A&R Stockholder’s Agreement, see the section on "Certain Relationships
i
and Related
Party T
t
ra
T
nsactions — Sto
S ckholde
l
r’s A
’
greement." Additional infor
f
mation regarding the A&R Stockholder’s Agreement,
including a copy of the A&R Stockholder’s Agreement, can be found
f
in our Current Report on Form 8-K filed with the SEC
on November 1, 2024.
Director Elections Standard and Resignation Policy
Our amended and restated bylaws include a voting standard in uncontested elections of directors (as is the case for
f
this
annual meeting) of a majority of votes cast in the election. Under the majo
a rity of votes cast standard, a director nominee is
elected if the number of votes cast "for" the nominee exceeds the number of votes cast "against" the nominee. In contested
elections (that is, those in which the number of nominees exceeds the number of directors to be elected), the voting standard
is a plurality of votes cast, which means the individuals who receive the largest number of votes cast are elected as directors
up to the maximum number of directors to be chosen at the meeting.
Our Board of Directors also adopted a director resignation policy, which is set forth in the Corporate Governance
Guidelines availabl
a e at www.for
f
estar.com under the "Investor Relations — Corpor
r
ate Governance — Governance
Documents" section. This policy sets for
f
th the procedures that will apply in the event that a director does not receive the
requisite majo
a rity of votes cast "for
f
" his or her election. In summary,
r
an incumbent director nominee who fai
f ls to receive the
required vote for
f
election is required to tender his or her resignation to our Executive Chairman for
f
consideration by the
Nominating and Governance Committee of our Board of Directors. The Nominating and Governance Committee will
consider the resignation and, within 45 days afte
f r the date of the stockholders meeting at which the election of directors
occurred, will make a recommendation to the Board of Directors on whether to accept or reject the resignation. The Board of
Directors will act on the Committee’s recommendation within 90 days afte
f r the date of the Annual Meeting of Stockholders.
The director whose resignation is under consideration will not participate in the Committee or Board of Directors’ decision
with respect to accepting or reje
e cting his or her resignation as director. If a resignation is not accepted by the Board of
Directors, the director will continue to serve. If a resignation is accepted and there is a resulting vacancy on the Board of
Directors, that vacancy can be fil
f led by action of the Board.
Following the Board’s decision on whether to accept or reject the resignation, we will publicly disclose the Board’s
decision, together with an explanation of the process by which the decision was made and, if applicable, the Board’s
reason(s) for rejecting the tendered resignation.
5

Director Nominees
Donald J. Tomnitz
Executive Chairman
Age 77
Director Since
October 2017
Tenure
• 8 years
Principal Occupation and Other Information
nald J. Tomnitz has served as Executive Chairman of the Board of Forestar since October
2017. Prior to joining the Company, Mr. Tomnitz was a consultant to D.R. Horton from 2014
to 2017. From 1998 to 2014, Mr. Tomnitz was the Vice Chairman and Chief Executive Offi
f cer
of D.R. Horton, afte
f r having served as its President, Executive Vice President and as President
of D.R. Horton’s Homebuilding Division. Mr. Tomnitz also served on the Board of Directors
of D.R. Horton until October 2014. Before joining D.R. Horton, Mr. Tomnitz was a Capt
a ain in
the U.S. Army, a Vice President of Republic Bank of Dallas, N.A. and a Vice President of
Crow Development Company, a Trammell Crow Company.
Education
Mr. Tomnitz holds a Bachelor of Arts in economics fro
f
m Westminster College and a Master of
Business Administration in fin
f ance from Western Illinois University.
Qualifications
Mr. Tomnitz has significant knowledge and experience in the real estate development and
homebuilding industries, including public company chief executive officer experience.
Kellie L. Fischer
Age 54
Independent Director
Since
October 2024
Board Committees
• Audit
• Compensation
• Nominating and
Governance
Tenure
• 1 year
Principal Occupation and Other Information
llie L. Fischer is the Executive Vice President and Chief Financial Officer of Rangers
Baseball Express LLC (the "Rangers"), which is the holding company of the Texas Rangers
baseball franchise, the Rangers' real estate development entities and REV Entertainment, LLC
(an events and sports management company). Ms. Fischer has held this role since 2005 under
two diffe
f rent ownership groups. From 1999 to 2005, Ms. Fischer served as Controller and
Vice President of Finance of Southwest Sports Group LLC. Prior to joining the Rangers, Ms.
Fischer worked in the audit division of PwC focusing primarily on publicly traded
manufac
f
turing clients.
Education
Ms. Fischer is a Certifie
f d Public Accountant in the State of Texas and holds a Bachelor of
Business Administration degree in accounting fro
f
m Baylor University.
Qualifications
Ms. Fischer brings expertise in accounting and financial reporting as well as management
experience and business acumen.
6

Samuel R. Fuller
Age 82
Independent Director
Since
October 2017
Board Committees
• Audit (Chair)
• Compensation
• Nominating and
Governance
Tenure
• 8 years
Principal Occupation and Other Information
muel R. Fuller retired in 2008, having obtained significant experience in accounting and
financial roles through his employment with D.R. Horton fro
f
m 1992 until his retirement. He
served as Controller of D.R. Horton from 1995 until his promotion to Chief Financial Officer
in 2000 and was a member of the Board of Directors fro
f
m 2000 until 2003. Mr. Fuller was a
Certifie
f d Public Accountant in New Mexico and Texas (retired status
t
).
Education
Mr. Fuller holds a Bachelor of Arts degree in accounting fro
f
m the University of Oregon and a
Master of Business Administration in finance fro
f
m the University of Texas at Arlington.
Qualifications
Mr. Fuller is an expert in accounting and financial reporting and has significant knowledge and
experience in accounting, finance, and internal control over fin
f ancial reporting in a public
company environment.
Lisa H. Jamieson
Age 65
Independent Director
Since
August 2019
Board Committees
• Audit
• Compensation (Chair)
• Nominating and
Governance
Tenure:
• 6 years
Principal Occupation and Other Information
sa H. Jamieson is a shareholder of Bourland, Wall and Wenzel, P.C., where she has been
practicing law since 2018. Ms. Jamieson was a partner with the fir
f m of Shannon, Gracey,
Ratliff & Miller, LLP from 2008 until 2016. From 2016 to 2018, Ms. Jamieson was with the
law fir
f m of Pope, Hardwicke, Christie, Kelly & Taplett, LLP. Ms. Jamieson is experienced in
all fac
f
ets of estate planning and probate law, is Board Certified in Estate Planning and Probate
Law by the Texas Board of Legal Specialization and was a Certifie
f d Public Accountant
(retired status
t
). Ms. Jamieson's practice includes sophisticated business and estate tax
planning, administration of dependent and independent estates, guardianships for incapacitated
adul
d ts and counseling and representing trus
r
tees.
Education
Ms. Jamieson holds a Bachelor of Business Administration degree in accounting fro
f
m Texas
A&M University and is a licensed attorney in Texas, having graduated fro
f
m Baylor University
School of Law. She is a Fellow in the American College of Trus
r
t and Estate Counsel and is a
past President of the Tarrant County Probate Bar. Ms. Jamieson is a for
f
mer Chair of the Real
Estate, Probate and Trust Law Section of the State Bar of Texas, the largest section of the State
Bar. She also has chaired the Guardianship Code Committee of the Section as well as Chair of
the Jurisdiction Committee which revised the jurisdiction statutes of decedents' estates and
guardianships.
Qualifications
Ms. Jamieson provides knowledge in the accounting fie
f ld. She also provides senior leadership
experience gained through her executive level positions held in several sections of the State
Bar and her tenured experience in her law practice. Ms. Jamieson contributes her expertise in
operational management and legal affairs to the Board.
7

Anthony W. Oxley
Age 61
Director Since
April 2025
Tenure
• <1 Year
Principal Occupation and Other Information
thony W. Oxley is President and Chief Executive Officer of Forestar, positions he has held
since January 2024. From 2023 to 2024, Mr. Oxley served as D.R. Horton’s Senior Vice
President – Business Development and oversaw all M&A activity and new market
opportunities for
f
start-up divisions. From 1998 to 2023, Mr. Oxley held a variety of senior
leadership positions at D.R. Horton during his 25-year tenure, including Division President,
Regional Operations Manager, City Manager, Regional Acquisitions Manager, and Business
Development Manager. His responsibilities included land acquisition and development, land
banking, homebuilding operations and day-to-day division management, along with oversight
of property, technology and innovation investments. Prior to joining D.R. Horton, Mr. Oxley
was a partner at the Atlanta-based law firm Hyatt & Stubbl
t
efie
f ld, P.C.
Education
Mr. Oxley holds a Bachelor's degree in history f
r
ro
f
m the University of Northern Iowa and a
Juris Doctor degree fro
f
m Emory University.
Qualifications
Mr. Oxley brings over 25 years of leadership experience in the real estate development and
homebuilding industries. His extensive operational and strategic background provides the
Board with valuabl
a e expertise in business strategy, business operations, fin
f ance, accounting,
risk oversight and corpor
r
ate governance.
Elizabeth (Betsy) Parmer
Age 58
Independent Director
Since
March 2023
Board Committees
• Audit
• Compensation
• Nominating and
Governance
Tenure
• 2 years
Principal Occupation and Other Information
izabeth (Betsy) Parmer is the founde
f
r and owner at the Law Offices of Elizabeth Parmer.
She specializes in large estate divorces and high-confli
f ct family law litigation with a
background of ad valorem tax representation. Ms. Parmer has been practicing law for 30 years.
Since 1995, she has been practicing at the Law Offic
f es of Elizabeth Parmer. She currently
serves as a board member for the charity organization Dayna's Footpr
t
ints.
Education
Ms. Parmer holds a Bachelor of Arts in history f
r
ro
f
m Yale University and a Juris Doctor degree
from the University of Texas at Austin.
Qualifications
Ms. Parmer brings extensive legal experience, management expertise and other business
acumen to the Board.
8

George W. Seagraves, II
Age 67
Independent Director
Since
October 2024
Board Committees
• Audit
• Compensation
• Nominating and
Governance (Chair)
Tenure
• 1 year
Principal Occupation and Other Information
orge W. Seagraves, II retired in 2015 afte
f r a 26-year career at D.R. Horton. Prior to his
retirement, he most recently served as North Region President, a position he had held since
October 2006. Prior to October 2006, Mr. Seagraves held multiple senior leadership positions
at D.R. Horton, including Executive Vice President and Chief Operating Officer for the
Eastern U.S., Northeast Region President and East Region President.
Education
Mr. Seagraves holds a Bachelor of Science degree in landscape architectur
t
e fro
f
m Texas A&M
University.
Qualifications
Mr. Seagraves brings extensive knowledge of the land development and homebuilding
industries, expertise in accounting and financial reporting, management experience and
business acumen.
How Nominees are Selected
Our Nominating and Governance Committee selects nominees based on recognized achievements and their abi
a lity to
bring various skills and experience to our Board, as described in more detail in the Corporate Governance Guidelines
availabl
a e at www.for
f
estar.com under the "Investor Relations — Corpor
r
ate Governance — Governance Documents" section.
The Corpor
r
ate Governance Guidelines encourage board membership composed of a broad range of backgrounds, education,
experiences, expertise, perspectives and leadership skills.
Our Board approves the nominees to be subm
u
itted to the stockholders for election as directors. Our Nominating and
Governance Committee and our Board consider whether non-employee director nominees are independent as defined in the
corporate governance listing standards of the NYSE and whether they have a prohibited conflic
f
t of interest with our business.
Our Nominating and Governance Committee considers director candidates recommended by stockholders who are
entitled to vote for
f
the election of directors at the annual meeting of stockholders and who comply with the advance notice
procedur
d
es for director nominations set for
f
th in our amended and restated bylaws. These procedur
d
es require that notice of the
director nomination be made in writing to our Corporate Secretary, and must be received at our executive offices not less than
75 days nor more than 100 days prior to the anniversary d
r
ate of the immediately preceding annual meeting of stockholders. In
the case of an annual meeting called for
f
a date more than 50 days prior to such anniversary d
r
ate, notice must be received not
later than the close of business on the 10th day following the date on which notice of the annual meeting date is fir
f st mailed
to stockholders or made public, whichever occurs first. In the case of a special meeting of stockholders at which directors are
to be elected, notice must be received not later than the close of business on the 10th day following the date on which notice
of the special meeting date is fir
f st mailed to stockholders or made public, whichever occurs first. Recommendations made by
stockholders in this manner will be evaluated in the same manner as candidates identifie
f d through other means, which
includes taking into consideration the needs of the Board and the qualific
f ations of the candidates. Our amended and restated
bylaws require the notice of director nomination to include certain specified information regarding the nominating
stockholder and the nominee.
9

Corporate Governance and Board Matters
Board Leadership Structure
Mr. Tomnitz has served as our Executive Chairman of the Board since October 2017. Mr. Tomnitz has significant
experience in the real estate and homebuilding indus
d
try a
r
nd as a public company CEO.
Our Board believes that separating the offi
f ces of the Executive Chairman and CEO is in the best interests of the
Company and its stockholders at this time. This allows our Executive Chairman to foc
f
us on overall strategy and vision,
affo
f
rds us the benefits of Mr. Tomnitz’s board leadership experience and enabl
a es our CEO to foc
f
us on managing the day-to-
day operations of the Company. However, should circumstances change in the fut
f ur
t
e, the Board is free to choose its
Executive Chairman in any way it determines is in the best interests of the Company and its stockholders in accordance with
our Third Amended and Restated Certific
f ate of Incorpor
r
ation and amended and restated bylaws.
Our Board performs a number of its functions through committees. All committee members, including the chairs of
each of our Audit Committee, Compensation Committee and Nominating and Governance Committee, are independent
directors under NYSE listing standards. Each committee’s charter expressly provides that the committee has the sole
discretion to retain, compensate and terminate its advisors. The charters of our Audit Committee, Compensation Committee,
and Nominating and Governance Committee are availabl
a e at www.fo
. restar.com under the "Investor Relations — Corpor
r
ate
Governance — Board Committees" section. We will provide a copy of these documents, without charge, upon
u
request to our
Corporate Secretary at our principal executive office. Any changes to the committee charters will be reflected on our website.
Risk Oversight
The Board oversees our risk management processes, and management is responsible for managing risk. The Board
performs its risk oversight role by using several different levels of review. Our CEO reports significant risks to the Board as
necessary and appr
a
opriate. In addition, management reports on, and the Board reviews, the risks associated with our strategic
plan periodically as part of the Board’s consideration of our strategic direction.
Sustainability Matters. Key sustainabi
a lity matters, including environmental and climate-related risks and human
capital risks such as employee health and safet
f y, could have an adverse impact on our company. Our Nominating and
Governance Committee oversee these risks via presentations on these and other related matters with both internal and
external personnel with relevant sustainability responsibilities and expertise. The Board also suppor
u
ts and regularly inquires
about progress in the Company’s reporting of sustainability policies, metrics and related disclosures.
Human Capital Management. The Nominating and Governance Committee oversees a broad range of human capi
a tal
management topics, including culture, talent, recrui
r tment, development and retention. We are committed to building inclusive
teams, producing positive results and improving customer relationships. In fis
f cal 2022, the Company adopted a Human
Rights Policy to set forth the Company's commitment to respect human rights. The Policy states the Company's zero
tolerance for
f
racism or discrimination of any kind, including discrimination based on race, color, genetics, religious beliefs,
f
gender, gender identity or expression, sexual orientation, national origin, disabi
a lity, age, veteran status
t
, marital status,
citizenship status
t
or any other legally protected characteristic by anyone, including our employees, suppliers, customers or
anyone with whom we do business or encounter regularly. The Human Rights Policy is availabl
a e at www.fo
. restar.com under
the "Investor Relations — Corpo
r
rate Governance — Governance Documents" section.
Cybersecurity. Our Company is highly dependent on information technology (IT), and potential IT failures or data
security incidents could adversely impact our operations. Under the Shared Services Agreement with D.R. Horton, D.R.
Horton provides the Company with certain administrative and compliance services which includes infor
f
mation technology,
internal audit and information technology risk services. IT and cybersecurity risk is overseen by the Board through
discussions with, and presentations from, the D.R. Horton IT Cyber Security Risk Offi
f cer (CSRO) and Chief Information
Offi
f cer (CIO). As part of their oversight responsibilities, the Board and the Audit Committee receive periodic reports from
the CIO and CSRO regarding the Company's IT security processes, controls, and ongoing mitigation efforts and as part of
Internal Audit's materials. The most recent presentations to the Board and Audit Committee addressed the Company's
procedur
d
es to maintain IT security, recent upda
u
tes to our cybersecurity program, and key areas of focus. D.R. Horton's
Internal Audit team also performs cybersecurity related procedur
d
es as part of its audit plan and reports any fin
f dings to the
Audit Committee. Additionally, the Company provides mandatory training and awareness programs for
f
employees, including
10

periodic exercises designed to enhance understanding of cybersecurity risks. To our knowledge, the Company has not
experienced a material cybersecurity incident within the last three years. We believe these oversight activities and processes
provide appropriate governance and risk oversight of the Company's infor
f
mation technology and cybersecurity matters.
Independence. Other than Mr. Tomnitz, our Executive Chairman, and Mr. Oxley, our President and Chief Executive
Offi
f cer, all of our current Board members are classified as independent under the NYSE listing standards. We believe the
Company and our stockholders benefit fro
f
m the perspectives of five independent, experienced directors, together with the
oversight provided by the Executive Chairman and the operational insight contributed by our CEO.
Each of the Board’s Committees oversees the management of risks within the scope of the Committee’s assigned
responsibilities. In carrying out this function, each Committee has ful
f l access to management, and may engage advisors as
needed. We believe this division of responsibilities is an effective appr
a
oach for addressing the risks facing the Company and
that our Board composition and leadership structur
t
e support this fra
f mework.
Board Committees and Stockholder’s Agreement
all times when D.R. Horton and its affi
f liates beneficially own 20% or more of our voting securities, no committee
of the Board will have more than three members unless otherwise agreed in writing between us (as appr
a
oved by a majo
a rity of
our independent directors) and D.R. Horton. Each committee of the Board will include in its membership (i) a number of
D.R. Horton designees equal to the percentage of our voting securities benefic
f ially owned by D.R. Horton and its affi
f liates
multiplied by the total number of members that such committee would have if there were no vacancies on such committee,
rounded up t
u
o the nearest whole number (and in any event not less than one) and (ii) at least one member not designated by
D.R. Horton. In addition, at all times when D.R. Horton and its affiliates benefic
f ially own 20% or more of our voting
securities, the Board will maintain a Nominating and Governance Committee.
In October 2017, D.R. Horton and our Board, including each of the members of our Board that are considered
"independent" under the rules of the SEC and the NYSE, elected to waive the requirement that the committees of the Board
consist of three directors, and set the size of each of our Nominating and Governance Committee, the Compensation
Committee and the Audit Committee at four
f
directors. In October 2024, D.R. Horton and our Board set hthe size of e
h
ach of our
No i
minating a d
nd Governance Co
i
mmittee, hthe Compensation Com i
mittee a d
nd hthe A di
udit Com i
mittee at fiv
f
d
e directors, an
increase of one didirector from pre ivious years.
Additional infor
f
mation regarding the A&R Stockholder’s Agreement, including a copy of the A&R Stockholder’s
Agreement, can be found in our Current Report on Form 8-K filed with the SEC on November 1, 2024.
Audit Committee
The Audit Committee Charter has been posted to the Company’s website, which is availabl
a e at www.fo
. restar.com
under the "Investor Relations — Corpor
r
ate Governance — Board Committees" section. Among other things detailed in the
Committee’s Charter, the Audit Committee sets the "tone at the top" and assists the Board in its oversight of:f
•
the integrity of our financial statements;
•
compliance with legal and regulatory r
r
equirements;
•
implementation of new accounting standards;
•
the independent registered public accounting fir
f m’s qualifications and independence; and
•
the performance of the internal audit fun
f
ction and independent registered public accounting fir
f m.
In addition, the Audit Committee prepares the audit committee report included in this Proxy Statement. The Audit
Committee has the sole authority to retain, compensate and terminate our independent registered public accounting fir
f m. Our
Board of Directors has determined that Mr. Fuller and Ms. Fischer are financial experts. In addition, our Board has
determined that all members of the Audit Committee are fin
f ancially literate and independent as defined in the NYSE
corporate governance standards appl
a
icable to audit committee members. The members of the Audit Committee are Mr. Fuller
(Chair), Ms. Fischer, Ms. Jamieson, Ms. Parmer and Mr. Seagraves. The Audit Committee met four times in fis
f cal 2025.
11

Compensation Committee
The Compensation Committee Charter has been posted to the Company’s website, which is availabl
a e at
www.for
f
estar.com under the "Investor Relations — Corpor
r
ate Governance — Board Committees" section. Among other
things detailed in the Committee’s Charter, the Compensation Committee is responsible for the following:
•
determining and approving, either as a committee or together with other independent directors (as directed by the
Board), the Executive Chairman’s and CEO’s compensation;
•
determining and recommending to the Board the compensation of the other executive officers;
•
establishing the compensation philosophies, goals and objectives for
f
executive officers;
•
monitoring incentive and equity-based compensation plans and compensation recoupment policies;
•
administering equity-based plans;
•
preparing a Compensation Committee report on executive compensation for
f
inclusion in our annual proxy
statement; and
•
overseeing compliance with SEC rules regarding stockholder appr
a
ovals of certain executive compensation matters
and equity compensation plans.
The Compensation Committee reviews and considers, among other things, the incentives that our executive
compensation programs create on our risk profile
f
. The Compensation Committee reports regularly to the ful
f l Board. In
addition, under the terms of the Third Amended and Restated Certific
f ate of Incorpor
r
ation and the A&R Stockholder’s
Agreement with D.R. Horton, for so long as D.R. Horton beneficially owns 35% or more of our voting securities, we need the
prior written consent of D.R. Horton to appoint or terminate key offi
f cers or change their compensation arrangements. Thus,
under those circumstances, D.R. Horton's appr
a
oval is also required.
In October 2024, Lockton Companies, a compensation consultant, was engaged to provide advice on the Company’s
executive compensation program structur
t
e. Lockton reports directly to the Compensation Committee. The independence of
Lockton Companies was assessed under appl
a
icable NYSE rul
r es, and it was determined that Lockton’s engagement does not
raise any conflic
f
ts of interest.
The members of the Compensation Committee are Ms. Jamieson (Chair), Ms. Fischer, Mr. Fuller, Ms. Parmer and Mr.
Seagraves. Our Board has determined that all members of the Compensation Committee are independent as defined in the
NYSE corpor
r
ate governance standards appl
a
icable to compensation committee members. The Compensation Committee met
five times in fis
f cal 2025.
12

Nominating and Governance Committee
The Nominating and Governance Committee Charter has been posted to the Company’s website, which is availabl
a e at
www.for
f
estar.com under the "Investor Relations — Corpor
r
ate Governance — Board Committees" section. Among other
things detailed in the Committee’s Charter, the Nominating and Governance Committee is responsible for the following:
•
reviewing the struc
r
ture of the Board, at least annually, to ensure that the proper skills and experience are
represented on the Board, and making recommendations regarding the size of the Board;
•
recommending nominees to serve on the Board;
•
reviewing performance and qualific
f ations of Board members before they stand for
f
re-election and overseeing the
periodic evaluation of the Board;
•
developing qualification criteria for
f
board membership and reviewing potential directors;
•
recommending the membership of the committees of the Board;
•
reviewing corporate governance issues;
•
establishing related person policies and procedur
d
es, reviewing related party transactions and potential confli
f cts of
interest and reviewing the Company’s Standards of Business Conduct and Ethics;
•
reviewing stockholder proposals and recommending to the Board action to be taken regarding stockholder
proposals; and
•
acting in an advisory capacity to the Board regarding activities that relate to issues of social and public concern,
including charitable contributions, governmental and political affairs, community relations, environmental
practices and health and safet
f y programs.
The members of the Nominating and Governance Committee are Mr. Seagraves (Chair), Ms. Fischer, Mr. Fuller, Ms.
Jamieson and Ms. Parmer. Our Board has determined that all members of the Nominating and Governance Committee are
independent as such term is defined in the NYSE corpor
r
ate governance standards. The Nominating and Governance
Committee met four times in fis
f cal 2025.
Executive Committee
The Executive Committee may exercise all the authority of the Board of Directors in the management of our business
and affairs that by state or federal law or the NYSE Rul
R es may be delegated to it by the Board of Directors. The members of
the Executive Committee are Mr. Tomnitz (Chair), Ms. Jamieson and Mr. Seagraves. The Executive Committee did not meet
in fiscal 2025.
13

Director Independence
Our Corpor
r
ate Governance Guidelines are available at www.fo
. restar.com under the "Investor Relations — Corpor
r
ate
Governance — Governance Documents" section. In accordance with our Corporate Governance Guidelines and NYSE rul
r es,
the majority of our directors are independent. In assessing independence under the NYSE rul
r es, we consider a director’s
independence fro
f
m both the Company and D.R. Horton.
Ms. Fischer, Mr. Fuller, Ms. Jamieson, Ms. Parmer and Mr. Seagraves satisfy our director independence standards. Mr.
Tomnitz and Mr. Oxley do not meet our independence standards because they serve as executive officers of the Company.
The Board defines independence as meeting the requirements to be considered independent directors under current
NYSE rul
r es. The Board has establ
a ished the following additional guidelines to assist it in determining director independence:
•
Annually, the Board reviews the relationships each director has with the Company or D.R. Horton (either directly
or as a partner, stockholder or offic
f er of an organization that has a relationship with the Company or D.R. Horton).
Only directors the Board affirmatively determines have no material relationship with the Company or D.R. Horton
will be considered independent, subject to additional qualifications prescribed under the NYSE listing standards or
applicable law.
•
To serve as a member of any Committee of the Board, the director must meet any additional independence
requirements set forth in the Committee’s charter or applicable law or listing standards of the NYSE.
There were no material transactions or relationships between the Company or D.R. Horton and any of our independent
directors dur
d
ing fis
f cal 2025. There are no family relationships between any of the nominees and our executive offi
f cers.
Board Meetings
Our Board typically meets at least four times a year. Our Board met 9 times in fiscal 2025. Each director attended
virtua
t
lly, in person or by confer
f ence call at least 75% of Board meetings and their respective committee meetings (dur
d
ing the
period they served).
At least once each year, our Board holds sessions with only independent directors present. The Chair of the Nominating
and Governance Committee serves as Presiding Director to lead these meetings.
Other Corporate Governance Matters
Under our Corporate Governance Guidelines, a director is deemed to have tendered his or her resignation at the next
regularly scheduled meeting of the Nominating and Governance Committee in the event of a significant change in job status
from the status
t
held at the time of election to our Board. The Nominating and Governance Committee will review whether
the new occupa
u
tion or retirement of the director is consistent with the needs and composition of our Board and recommend
action to our Board. Also, under our Corporate Governance Guidelines, non-employee directors may not serve on the boards
of directors of more than three public companies and no member of the Audit Committee may serve on the audit committee
of more than two other public companies (unless the Board determines that such simultaneous service would not impair the
ability of such director to effectively serve on the Audit Committee). Existing directors must consult the Executive Chairman
of the Board and the Chair of the Nominating and Governance Committee prior to joining another board of directors. The
Executive Chairman of the Board and the Chair of the Nominating and Governance Committee will assess whether the new
membership would present a conflic
f
t or otherwise compromise the ability of that director to dedicate the time necessary to
serve on our Board.
We expect Board members to attend our 2026 Annual Meeting, but from time to time other commitments may prevent
certain Board members from attending. All Board members in office at the time of our 2025 Annual Meeting of Stockholders
attended the meeting either virtua
t
lly, by teleconfer
f ence or in person.
Non-employee directors must retire fro
f
m the Board no later than the annual stockholders meeting fol
f lowing their
77th birthday unless the remaining non-employee directors determine that it would be in the best interest of the Company and
our stockholders for an exception to this policy to be granted. Employee directors must resign fro
f
m the Board at the time they
14

retire or otherwise terminate employment with us, but no later than their 77th birthday, unless otherwise determined by the
Board.
In 2020 and reaffirmed in 2021, 2022, 2023, 2024 and 2025 the remaining non-employee directors determined that it
was in the best interests of the Company and its stockholders that Mr. Fuller, age 82, continue to serve as a director of the
Company. Mr. Fuller was nominated by the Nominating and Governance Committee to be included in this Proxy Statement
for re-election at the 2026 Annual Meeting. As a for
f
mer public company CFO in the homebuilding industry,
r
Mr. Fuller
brings valuable expertise to the Board. His extensive experience and skill set provide important perspective, and he is highly
regarded by the Board, including in his service as Chair of the Audit Committee.
Similarly, in October 2025, the remaining non-employee directors determined that it was in the best interests of the
Company and its stockholders for Mr. Tomnitz, age 77, to continue to serve as a director of the Company. Mr. Tomnitz was
nominated by the Nominating and Governance Committee to be included in this Proxy Statement for
f
re-election at the 2026
Annual Meeting. Mr. Tomnitz brings extensive operational experience and a long tenure in the industry,
r
which the Board
believes provides valuabl
a e insight and perspective. He is highly regarded by the Board for
f
his service and contributions.
Insider Trading Policy
We maintain an insider trading policy that app
a
lies to our directors, offi
f cers, employees and other persons and entities
with access to material non-public information. The policy is designed to promote compliance with applicable federal
securities laws and the NYSE listing standards. Under the policy, individuals covered by the policy, including our NEOs,
directors and their designees, are prohibited fro
f
m engaging in transactions in the Company's securities while in possession of
material non-public information. The policy also prohibits transactions in derivative securities, including options, warrants,
puts, calls or similar instrum
r
ents, short sales of Company securities, and the pledging or holding of Company securities in
margin accounts.
Policies on Business Conduct and Ethics
All directors, offi
f cers and employees are required to abi
a de by our Standards of Business Conduct and Ethics. This code
covers all areas of profes
f
sional conduct, including confli
f cts of interest, unfai
f r or unethical use of corpor
r
ate opportunities,
protection of confid
f ential infor
f
mation, compliance with all applicable laws and regulations, and oversight and compliance.
Our CEO and CFO are also required to abi
a de by our Code of Ethics for Senior Financial Offi
f cers. The Standards of Business
Conduct and Ethics and Code of Ethics for Senior Financial Offi
f cers are availabl
a e at www.fo
. restar.com under the "Investor
Relations — Corpor
r
ate Governance — Governance Documents" section. We will provide a copy of these documents without
charge to any stockholder upon
u
request to our Corporate Secretary a
r
t our principal executive office. Any fut
f ur
t
e amendments
to either of these codes, and any waiver of the Code of Ethics for Senior Financial Offi
f cers and of certain provisions of the
Standards of Business Conduct and Ethics for directors or executive officers, will be disclosed on our website promptly
following the amendment or waiver.
Communications with Directors
Stockholders and other interested parties may communicate with our Board, including individual directors, by
forwarding written comments to the Chair of the Nominating and Governance Committee, who also serves as our Presiding
Director, with a copy to our Corporate Secretary to the fol
f lowing:
George W. Seagraves, II, Nominating and Governance Committee Chair
Forestar Group Inc.
2221 E. Lamar Blvd., Suite 790
Arlington, Texas 76006
Attention: Board Communications
Copy to
py
:
Corporate Secretary
Forestar Group Inc.
2221 E. Lamar Blvd., Suite 790
Arlington, Texas 76006
Attention: Board Communications
15

Director Compensation
Our director compensation program is designed to compensate our directors for
f
the time commitment required to ful
f fill
their responsibilities, to align director compensation with the long-term interests of our stockholders and to assist in recrui
r ting
high-caliber directors.
Director Fee Schedule
The fis
f cal 2025 director fee schedul
d e is as fol
f lows:
Retainer Fee .................................................... $15,000 per quarter, not to exceed $60,000 per annum
Annual Board Committee Fee......................... $5,000 per Committee (paid $1,250 per quarter)
Annual Board Committee Chair Retainer....... $2,500 per Committee (paid $625 per quarter)
As previously disclosed, in October 2024, the Board of Directors appr
a
oved an increase of $10,000 to the retainer fee
f
to
the current total of $60,000 per annum ($15,000 per quarter), which went into effect
f
on January 1, 2025.
In connection with their appointment to the Board, Ms. Fischer and Mr. Seagraves each received a retainer grant of
4,360 restricted stock units in October 2024, which vest ratabl
a y over three years. Such retainer fees paid in restricted stock
units are generally granted to new directors upon
u
initial appointment.
Historically, our non-employee directors received retainer restricted stock unit awards every three years, vesting in
equal installments over three years. Historically, non-employee directors also received an annual award of restricted stock
units concurrently with awards granted to a broad group of Company employees. In fis
f cal 2025, the Board revised its
restricted stock unit awards practice for
f
non-employee directors from a two-grant appr
a
oach to a single-grant appr
a
oach. In
November 2024, each then serving non-employee director received their annual fis
f cal 2025 grant of 2,250 restricted stock
units, which vest ratabl
a y over three years. Due to the revision to a single-grant appr
a
oach, the Board increased the director
annual restricted stock unit award to 2,995 RSUs in fiscal 2026, vesting ratably over three years.
Further, directors are reimbursed for
f
expenses incurred attending Board and committee meetings, including those for
f
travel, food
f
and lodging. Each non-employee director is also eligible to participate in the Company's broad-based health care
plan. Ms. Ja i
mieson a d
nd Mr. Seagraves lelected to par iti icipate in hthe pla i
n in fis
f
l
cal 2025.
Mr. Tomnitz and Mr. Oxley do not receive any fees
f
or compensation for
f
their service on our Board other than
compensation as Executive Chairman and President and Chief Executive Officer which are discussed fur
f
ther below under
"Executive Com
C
pe
m
nsation."
Insurance and Indemnification
All directors are covered under our director and offic
f er liability insurance policies for
f
claims alleged in connection with
their service as a director. We have entered into indemnific
f ation agreements with each of our directors, agreeing to indemnify
f
them to the ful
f lest extent permitted by law for claims alleged in connection with their service as a director.
16

Fiscal 2025 Director Compensation
The fol
f lowing tabl
a e presents compensation earned by non-employee directors for
f
services rendered in fis
f cal 2025 as
calculated in accordance with SEC rul
r es.
Name(1)
Fees
Paid in Cash(2)
Stock
Awards(3)
Total
Kellie L. Fischer(4).......................................................................
$
72,500
$
205,047
$
277,547
Samuel R. Fuller .........................................................................
$
75,000
$
65,048
$
140,048
Lisa H. Jamieson.........................................................................
$
75,000
$
65,048
$
140,048
Elizabeth (Betsy) Parmer ...........................................................
$
72,500
$
65,048
$
137,548
G.F. (Rick) Ringler, III(5) ............................................................
$
16,875
$
—
$
16,875
George W. Seagraves, II(4) ..........................................................
$
75,000
$
205,047
$
280,047
_________________
(1) Only non-employee directors receive compensation for their service on the Board.
(2) Amounts represent director fees paid in cash dur
d
ing fis
f cal 2025.
(3) Amounts represent the grant date fair value of $28.91 per unit for
f
the 2,250 restricted stock units granted to each non-
employee director on November 20, 2024. Additionally, Ms. Fischer and Mr. Seagraves each also received a retainer
grant in connection with their appoi
a
ntment to the Board. Each of their amounts also includes the grant date fai
f r value
of $32.11 per unit for
f
the 4,360 restricted stock units granted to them on October 30, 2024. The grant date fai
f r value of
all of the restricted stock unit awards was determined in accordance with the accounting guidance for
f
share-based
payments. The Company recognizes expense for
f
these awards over the three-year vesting period for
f
those directors
who are not retirement eligible (with such expense recognized at grant for directors who are retirement eligible).
Additional infor
f
mation regarding the Company's equity awards is included in Note 11 to the consolidated financial
statements in the Company's Annual Report on Form 10-K file
f
d with the SEC on November 19, 2025.
(4) Kellie L. Fischer and George W. Seagraves, II were appointed to the Board of Directors effective October 28, 2024.
(5) Mr. Ringler resigned fro
f
m the Board of Directors effec
f
tive October 28, 2024 and therefore did not receive any
restricted stock units in fiscal 2025 and received only one quarter of cash fees
f
.
As of September 30, 2025, each of the fol
f lowing current and former non-employee directors held the fol
f lowing
number of unvested restricted stock units:
Name
Unvested
Restricted Stock Units
Kellie L. Fischer.........................................................................................................................................
6,610
Samuel R. Fuller ........................................................................................................................................
8,151
Lisa H. Jamieson........................................................................................................................................
8,151
Elizabeth (Betsy) Parmer ..........................................................................................................................
10,151
G.F. (Rick) Ringler, III (1) ..........................................................................................................................
—
George W. Seagraves, II ............................................................................................................................
6,610
(1)
Mr. Ringler’s restricted stock units vested in full upon his resignation fro
f
m the Board of Directors on October 28,
2024.
17

Proposal No. 2 – Advisory Vote on the Approval of Executive
Compensation
The Board recognizes that executive compensation is an important matter for
f
our stockholders. Our executive
compensation programs are designed to implement our core compensation philosophy that executive compensation should be
based on Company performance. We believe our compensation programs are aligned with the interests of our stockholders.
Pursuant to Section 14A of the Securities Exchange Act of 1934, and as a matter of good corporate governance, we are
asking you to vote, in a non-binding advisory manner, to approve the executive compensation philosophy and objectives
described in the Compensation Discussion and Analysis (CD&A) section of this 2026 Proxy Statement, and the
compensation of our named executive officers ("NEOs"),
"
as disclosed in this 2026 Proxy Statement.
As an advisory vote, the results of this vote will not be binding on the Board or the Company. However, the
Compensation Committee of the Board of Directors values the opinions of our stockholders and will consider the outcome of
the vote when making fut
f ur
t
e decisions on the compensation of our NEOs and our executive compensation philosophy and
objectives.
Afte
f r consideration of the results of our advisory vote on the frequency of fut
f ur
t
e advisory votes on executive
compensation held at our 2023 Annual Meeting of Stockholders, at which the overwhelming majo
a rity of votes cast supported
holding advisory votes to approve executive compensation every year, the Board of Directors has determined to hold annual
advisory votes on executive compensation. Accordingly, the next advisory vote on executive compensation fol
f lowing the
2026 Annual Meeting will occur at the 2027 Annual Meeting unless the Board of Directors modifies its policy on the
frequency of holding such advisory votes.
In accordance with the for
f
egoing, we are asking stockholders to approve the fol
f lowing advisory resolution at the 2026
Annual Meeting:
RESOLVED, that the stockholders of Forestar Group Inc. (the "Company") a
"
ppr
a
ove, on an advisory basis, the
compensation of the Company’s named executive offic
f ers disclosed in the Compensation Discussion and Analysis,
the Summary Compensation Table and the related compensation tables, notes and narrative in the Proxy Statement
for the Company’s 2026 Annual Meeting.
The Board of Directors Unanimously Recommends that Stockholders Vote "FOR"
Approval of the Advisory Resolution on Executive Compensation.
18

Executive Offi
f cers
Our Current Executive Officers are:
Donald J. Tomnitz
Anthony W. Oxley
James D. Allen
Mark S. Walker
Executive Chairman
President and Chief
Executive Officer
Executive Vice President,
Chief Financial Officer
and Treasurer
Executive Vice President
and Chief Operating
Officer
Non-Director Executive Officers
James D. Allen
Chief Financial Officer
Age 66
James D. Allen, is Executive Vice President, Chief Financial Offi
f cer and Treasurer of
Forestar, positions he has held since March 2020. Prior to joining Forestar, he served as a
Senior Operating Partner at Palm Beach Capi
a tal, a private equity investment firm, from
f
2019
to March 2020. He served as CFO of Hollander Sleep Produc
d
ts, a suppl
u
ier of bedding
products, fro
f
m 2015 to 2018. He has also held a variety of executive roles at both private and
public companies, including Operating Vice President and Group CFO of Sun Capi
a tal Partners
from 2003 to 2014, Chief Administrative Offic
f er of Mattress Firm Inc. and a variety of C-suite
roles at Tandycrafts, Inc. Mr. Allen began his career at PwC. Since February 2
r
016, Mr. Allen
has served on the Board and as a member of the audit and compensation committees of
Flexshopper, Inc. (FPAY).
Mr. Allen holds a Bachelor of Business Administration degree in accounting and management
from Evangel University.
Mark S. Walker
Chief Operating Officer
e 49
Mark S. Walker, is Executive Vice President and Chief Operating Officer of Forestar,
positions he has held since October 1, 2022. Mr. Walker has more than 20 years of experience
in residential real estate. Mr. Walker joined Forestar in 2019 as Region President of the
Company’s East region. Since 2019, his responsibilities have expanded to include leading
Forestar’s Mid-Atlantic, North and Texas regions. Prior to joining Forestar, Mr. Walker
worked for D.R. Horton fro
f
m 2012 to 2019 as a Vice President in land acquisition and
development.
Mr. Walker holds a Bachelor of Business Administration degree in general business fro
f
m the
University of Georgia.
19

Executive Compensation
Compensation Discussion and Analysis
Overview
h
This Compensa ition
i
Discus ision and Analyly isi d
s describibes hthe compensation elements for
f
our NEOs. Our NEOs for fis
f
l
cal
2025 are as f lol
f lows, whihi h
ch reflflects allll indidi ividuals
h
who served as our execu itive offi
fficer d
s dur
d
ing fis
f
l
cal 2025:
•
Donaldld J. Tomnitz, Executive Chairman;
•
An hth
y
ony W. Oxley, Presidident a d
nd
h
Chief Execu itive Offic
f er;
•
James D. Allllen, Execu itive
i
Vice Presidident,
h
Chief Finan ici lal Offifi
f cer a d
nd Treasurer; and
nd
•
Ma k
rk S.
l
Walker, Execu itive Vice Pre isident and Chihief Operating Offi
fficer.
We are a national, well-capitalized residential lot development company focused primarily on making investments in
land acquisition and development to sell fin
f ished single-family residential lots to homebuilders. We conduct a wide range of
project planning and management activities related to the entitlement, acquisition, community development and sale of
residential lots. We primarily invest in entitled short-duration proje
o cts that can be developed in phases, enabling us to
complete and sell lots at a pace that matches market demand, consistent with our focus on capital efficiency. This strategy is a
unique, lower-risk business model that we expect will produce more consistent returns than other public and private land
developers.
We have expanded and diversifie
f d our lot development operations across 64 markets in 23 states by investing available
capital into our existing markets and by entering new markets. We believe our geographically diverse operations provide a
strong platform for us to consolidate market share in the highly fra
f gmented lot development industry.
r
We also believe our
geographic diversification lowers our operational risks and enhances our earnings potential by mitigating the effe
f cts of local
and regional economic cycles.
We became a majo
a rity-owned subs
u
idiary of D.R. Horton in October 2017 by virtue
t
of a merger with a wholly-owned
subs
u
idiary of D.R. Horton. Immediately fol
f lowing the merger, D.R. Horton owned 75% of our outstanding common stock,
and as of September 30, 2025, D.R. Horton continued to own approximately 62% of our outstanding common stock. We have
grown significantly since the merger in October 2017, as described in the "Key O
e
pe
O
rating and Financial Hig
H hl
g ight
g s"
t
section
of the Proxy Summary a
r
bove
a
.
Our Compensation Committee strives to provide a fai
f r and competitive compensation program for executive officers
that will attract, motivate and retain highly qualifie
f d and experienced executives, reward superior performance and provide
incentives based on Company performance, with an overall emphasis on maximizing long-term stockholder value. The
following discussion provides infor
f
mation regarding our compensation objectives and the relationship between our pay
outcomes and the performance of the executive and the Company.
20

Alig
l nm
g
ent of P
o
ay
P
with
i
Perfor
f
ma
r
nce
Our executive compensation program intends to incentivize executives to make business decisions that achieve the
Company's strategic objectives and create shareholder value, without taking excessive risk, and reward them accordingly.
Several key financial and operational highlights that illustrate our strong performance in fiscal 2025 are provided
below. All comparisons are made between fiscal 2024 and fis
f cal 2025.
Financial Highlights
Revenue and
earnings
•
Net income totaled $167.9 million or $3.29 per diluted share.
•
Pre-tax income of $219.3 million, with a pre-tax profit
f
margin of 13.2%.
•
Revenues increased 10% to $1.7 billion.
Maintained
financial
flexibility
•
At year-end, liquidity totaled $968.1
i
milli
lli
,
on consisting of $379.2 million in cash and cash
equivalents and $
d $588.9
il
millilion of availabi
a lity on our revolving credit facility after the reduc
d
tion for
f
outstanding letters of credit.
•
No senior note matur
t
ities until fiscal 2028.
Value
creation
•
Retur
t
n on equity of 10.1%. Retur
t
n on equity is calculated as net income attributable to Forestar for
the year divided by average stockholders' equity, where average stockholders' equity is the sum of
ending stockholders' equity balances of the trailing fiv
f e quarters divided by five.
•
Book value per diluted shar i
e increas d
ed 11% to $34.78.
Operational Highlights
Solid execution
•
Delivered 14,240 residential lots.
•
Further diversifie
f d our operating platfor
f
m and investment in real estate by entering seven new
markets.
•
Ended fis
f cal 2025 with operations in 64 markets and 23 states.
Positioning for
future growth
•
Owned and controlled 99,800 lots across a geographically diverse foot
f
pr
t
int at September 30, 2025.
•
Invested $1.7 billion in land acquisition and development, an 8% increase over fis
f cal 2024.
•
Increased the size of our team by 10% to suppor
u
t the expansion of our platform, including entering
new markets and increasing community count.
•
Roughly 90% of new hires are foc
f
used in local market operations.
Strong
customer
relationships
•
Continued to diversify and expand our customer base by closing lots to 29 unique customers in fis
f cal
2025.
•
15% of the homes D.R. Horton started this year were on a Forestar developed lot.
•
Owned lots under contract to sell increased 13% to 23,800 lots, or 37% of our owned lot position,
which is expected to generate approximately $2.1 billion dollars of future revenue.
In October 2024, the Compensation Committee establ
a ished the Executive Cash Incentive Plan and introduced
performance-based restricted stock units to the Company's fis
f cal 2025 executive compensation program, fur
f
ther reinforcing
the Company’s pay-for-performance compensation philosophy. See "Fisc
i
al 2025 Compensation" on page 25.
21

Advisory Vote
At our 2025 Annual Meeting of Stockholders, appr
a
oximately 97% of votes cast in our advisory vote on executive
compensation were in fav
f
or of the proposal. The Compensation Committee considered this result and made no changes to our
compensation program for fis
f cal 2025 as a result of our stockholders’ support of our existing executive compensation
program. The Compensation Committee will continue to consider the results of stockholder advisory votes on executive
compensation when making fut
f ur
t
e decisions. At our 2023 Annual Meeting of Stockholders, our stockholders voted in favor
of an annual advisory vote on executive compensation. Our Board of Directors has determined that advisory votes on
executive compensation should continue to be held annually.
The Compensation Committee has primary authority over establishing and changing our executive compensation
programs and making specific
f
compensation determinations, while D.R. Horton maintains consent rights over certain
compensation matters.
Compensation Philosophy and Objectives
Our executive compensation program is designed to attract, retain and motivate talented executives to achieve the
Company's key financial and strategic objectives and reward superior individual performance, with an overall emphasis on
maximizing shareholder value. We are guided by the following principles in determining the form and amount of executive
compensation:
•
Compensation should a
l
lign w
g
ith t
t
he
t
perfor
f
ma
r
nce of t
o
he
t
Company a
n
nd perfor
f
ma
r
nce of t
o
he
t
individual.l Fiscal
2025 semi-annual cash performance bonuses were earned based on our pre-tax income for
f
the year. Also, our
restricted stock unit awards generate additional value for executives as our stock price increases and performance-
based restricted stock units are fur
f
ther subj
u ect to various financial and operating performance goals.
•
Compensation should a
l
lign e
g
xe
e
cutives’ and stoc
t
kholde
l
rs’ interests.
t
Our bonuses are designed to incentivize and
reward performance as we continue to grow our residential lot development business. In addition, the use of
equity-based compensation aligns our executives’ interests with our stockholders’ interests and encourages our
executives to foc
f
us on profit
f able growth and long-term performance.
•
Compensation should b
l
e compe
m
titive. Our total compensation, including our base salaries, bonuses and long-term
equity awards, should be competitive with our public and private peers to enabl
a e us to attract and retain key
executives.
•
Retentio
t n. We believe an overall package of appr
a
opriate pay and benefits helps retain executives and managers.
This includes a competitive base salary, cash bonuses, health and welfare benefits, Company matching
contributions under our 401(k) plan and supplemental retirement benefits
f
. In addition, equity awards with vesting
and for
f
feitur
t
e provisions encourage retention.
22

Elements of our Compensation Program
The elements of our fiscal year 2025 compensation program are as fol
f lows:
•
Base salaries;
•
Semi-annual cash performance bonuses;
•
Performance-based restricted stock units;
•
Time-based restricted stock units;
•
401(k) retirement plan benefits; and
•
Health and welfare benefits.
Each element of compensation is evaluated independently to determine whether, in our Compensation Committee’s
judgment, it is competitive within our industry.
r
Our Compensation Committee balances the elements of compensation to
attract executives with the appr
a
opriate level of experience and expertise, motivate executives to achieve supe
u
rior individual
and Company performance and retain executives that are creating value for our shareholders. Our Compensation Committee
believes balancing short- and long-term compensation elements properly incentivizes our executives and mitigates risk. Our
Compensation Committee reviews tally sheets that show all compensation elements on an aggregate basis over the previous
three years. From year to year, the Compensation Committee may also choose to award all or only certain elements of
compensation to an NEO.
Element
Perfor
f
mance Measure
Measurement / Vesting
Period
Base salary...............................................
Continued service subj
u ect to annual evaluation
Evaluated each year
Semi-annual cash performance bonus.....
Company pre-tax income
6 months to 1 year
Long-term equity incentives:...................
Performance stock units........................
Relative Total Shareholder Retur
t
n ("TSR"), Retur
t
n on
Inventory (
r
"ROI") and Market Share
3 years
Restricted stock units............................
Continued service
3 to 5 years
401(k) retirement benefit
f s .......................
401(k) Company matching contribution is dependent on
deferrals elected by the NEO and allowabl
a e under
regulatory l
r
imits
None
Health and welfare benefits.....................
None
None
23

2025 TOTAL COMPENSATION
Executive Chairman
Donald J. Tomnitz
21%
24%
52%
3%
CEO
Anthony W. Oxley
12%
31%
54%
3%
CFO
James D. Allen
21%
23%
53%
3%
COO
Mark S. Walker
15%
30%
53%
2%
Base Salary
Bonus
Equity (1)
All Other Compensation
(1) Equity includes the grant date fai
f r value of both the RSUs and the 2027 PSUs granted in fiscal 2025 based upon
u
the
probabl
a e outcome of the appl
a
icable performance conditions at grant.
24

Fiscal 2025 Compensation
Recently, the Compensation Committee has shifte
f d to a more formulaic incentive-based compensation program for
f
its
NEOs, consistent with its commitment to pay-for-performance. The Compensation Committee's philosophy and guidelines
for considering such an incentive-based program included the following:
•
the program should not encourage excessive risk taking.
•
the program should offer an opportunity for greater compensation for
f
supe
u
rior performance, balanced by the risk
of lower compensation when performance is below expectations.
•
compensation levels should be closely tied to the performance and success of the Company as well as the
executive's contribution to the Company's performance and success.
Afte
f r a thorough review of the Company’s executive compensation program, including consultation with its
independent compensation advisor, Lockton Companies, in October of 2024, the Compensation Committee appr
a
oved the
following changes for
f
the Company’s fis
f cal 2025 executive incentive compensation program to further reinfor
f
ce the
Company’s pay for performance compensation philosophy:
Short-T
t
er
T
m C
r
as
C
h Inc
I
entive Pla
P n:
•
The Committee adopted the Forestar Group Inc. Executive Cash Incentive Plan (the "Cash Incentive Plan"),
"
pursuant to which the Company may grant cash incentive awards to eligible participants, including executive
offi
f cers of the Company, that are payable based on the achievement of pre-establ
a ished performance goals.
Replacing our historic discretionary bonuses, the fiscal 2025 annual cash incentive award granted to the
Company’s executive officers under the Cash Incentive Plan were earned based on the Company’s pre-tax income
performance, with the abi
a lity to earn fro
f
m 0% to 200% of a specified target opportunity. Earned cash incentive
awards are paid semi-annually.
Long-T
g
er
T
m P
r
er
P
fo
r
rmance Stoc
t
k Uni
U
ts
i :
•
The Compensation Committee incorporated performance-based equity awards that are earned when the Company
achieves pre-established long-term performance goals into the Company’s executive equity award program
through the grant of performance-based restricted stock units ("PSUs") a
"
s a portion of the fiscal 2025 equity
awards granted to the Company’s executive offi
f cers. Fiscal 2025 PSUs granted will be earned after a three-year
performance period covering fiscal years 2025 through 2027, subj
u ect to the achievement of relative TSR, ROI and
market share goals, with the ability to earn fro
f
m 0% to 200% of the target number of granted PSUs. The three
performance goals are weighted equally.
The Compensation Committee believes that these changes fur
f
ther strengthen the alignment of executive incentives
with the interests of the Company’s stockholders.
25

Base Salaries
Base salaries are determined based on the executive’s responsibilities, performance, experience and the Compensation
Committee’s judgment. In reviewing the executives' salaries, the Compensation Committee reviews publicly-availabl
a e data
from our peer group companies (see "Competitive Pay Analys
l
is and Peer Group"
u
).
"
Base salaries provide our NEOs a
foundation of fix
f ed compensation, acknowledges the breadth of their responsibilities and recognizes effe
f ctive leadership.
Each of the NEO’s base salaries was increased for fis
f cal 2025 afte
f r consulting with the Compensation Committee's
independent consultant, reviewing an analysis of our peer group practices and to recognize each executive's performance in
their role. The NEO's salary levels remained unchanged for
f
fiscal 2026 from fis
f cal 2025 as the salaries remained aligned with
the salaries of similar executives of similar publicly-traded companies, including members of our peer group and other public
companies within a range of our market capitalization and industrial classification code.
The annual base salaries of our NEOs for fis
f cal years 2024, 2025 and 2026 are set forth in the following table.
Name
Fiscal 2024
Base Salary
Fiscal 2025
Base Salary
Fiscal 2026
Base Salary
Donald J. Tomnitz...........................................................................................
$
420,000
$
500,000
$
500,000
Anthony W. Oxley..........................................................................................
$
420,000
$
500,000
$
500,000
James D. Allen................................................................................................
$
370,000
$
400,000
$
400,000
Mark S. Walker...............................................................................................
$
315,000
$
400,000
$
400,000
2025 Semi-An
-
nual Cas
C
h Per
P
fo
r
rmance Bonuses
During fiscal 2025, in line with our compensation philosophy to award incentive bonuses that link pay with
performance, Mr. Tomnitz, Mr. Oxley, Mr. Allen and Mr. Walker each had the opportunity to earn a performance bonus
("PTI B
T
onus") u
"
nder the Cash Incentive Plan based on the Company’s pre-tax income earned dur
d
ing the year. "Pre-tax
income" or "PTI" means consolidated income before income taxes, as publicly reported by the Company in its consolidated
financial statements prepared in accordance with generally accepted accounting principles. The Compensation Committee
believes that strong profit
f ability increases the value of the Company, which benefits
f
all of our long-term stockholders.
Amounts earned for
f
the PTI Bonus are based on a percentage of the Company’s pre-tax income earned dur
d
ing each
semi-annual period dur
d
ing the fiscal year subj
u ect to a maximum potential payout of 200% of the bonus that would be earned
if 200% or more of the Company’s for
f
ecasted PTI target for the year were achieved. The payout percentages and maximum
potential payout amounts for
f
the PTI Bonus for each NEO in fiscal 2025 are included in the tabl
a e below. The Compensation
Committee set these percentages and maximum payouts at the beginning of fiscal 2025.
The Compensation Committee reserves the right to use its discretion to adjust downward, but not upward, the fin
f al
earned PTI Bonus amounts. The threshold for
f
achieving an annual incentive bonus was the attainment of positive pre-tax
income. If no pre-tax income was attained, then no bonus would be earned under the PTI Bonus. The bonuses earned under
the PTI Bonus program were as set for
f
th in the tables below.
PTI Bonus Payo
a
ut Rates and Maxi
a mu
i
m Pot
P en
t
tial Payo
a
utst
Percent of Pre-Tax
Income
Maximum
Potential Payout
Name
Fiscal 2025
Fiscal 2025
Donald J. Tomnitz.................................................................................................................
0.25 % $
1,350,000
Anthony W. Oxley................................................................................................................
0.60 % $
3,240,000
James D. Allen......................................................................................................................
0.20 % $
1,080,000
Mark S. Walker.....................................................................................................................
0.35 % $
1,890,000
26

2025 PTI Bonus Results
The tables below set for
f
th the Company’s PTI and PTI Bonuses paid for fis
f cal 2025 to Mr. Tomnitz, Mr. Oxley, Mr.
Allen and Mr. Walker:
Mr. Tomnitz
Semi-Annual Period
PTI(1)
PTI Bonus
Percentage
Total Bonus
Earned
1st Semi-Annual Period Ended March 31, 2025
$
62,600,000
0.25 % $
156,500
2nd Semi-Annual Period Ended September 30, 2025
156,679,552
0.25 %
391,699
Annual Amount
$ 219,279,552
$
548,199
Maximum Potential Payout
$
1,350,000
Mr. Oxley
ey
Semi-Annual Period
PTI(1)
PTI Bonus
Percentage
Total Bonus
Earned
1st Semi-Annual Period Ended March 31, 2025
$
62,600,000
0.60 % $
375,600
2nd Semi-Annual Period Ended September 30, 2025
156,679,552
0.60 %
940,077
Annual Amount
$ 219,279,552
$
1,315,677
Maximum Potential Payout
$
3,240,000
Mr. Alle
l n
Semi-Annual Period
PTI(1)
PTI Bonus
Percentage
Total Bonus
Earned
1st Semi-Annual Period Ended March 31, 2025
$
62,600,000
0.20 % $
125,200
2nd Semi-Annual Period Ended September 30, 2025
156,679,552
0.20 %
313,359
Annual Amount
$ 219,279,552
$
438,559
Maximum Potential Payout
$
1,080,000
Mr. Walker
Semi-Annual Period
PTI(1)
PTI Bonus
Percentage
Total Bonus
Earned
1st Semi-Annual Period Ended March 31, 2025
$
62,600,000
0.35 % $
219,100
2nd Semi-Annual Period Ended September 30, 2025
156,679,552
0.35 %
548,378
Annual Amount
$ 219,279,552
$
767,478
Maximum Potential Payout
$
1,890,000
(1) PTI for the first semi-annual period ended March 31, 2025 was rounded to the nearest tenth-million for
f
purpos
r
es of
calculating each NEO's PTI Bonus.
27

2025 Long-T
g
er
T
m I
r
nc
I
entive Awards:
d
Perfor
f
ma
r
nce and Time
i
-Based Awards
d
Our 2018 Stock Incentive Plan gives us the ability to provide our eligible employees, including each of our NEOs,
awards based on shares of our common stock. Our Compensation Committee grants equity awards to align interests of the
executives with the interests of our stockholders, to remain competitive with market practices and to support executive
retention. For fis
f cal 2025, our equity-based incentive awards for NEOs were granted in the for
f
m of performance-based and
time-based restricted stock units.
In making decisions regarding annual equity-based awards, including determining the size of awards, our
Compensation Committee considers previous grants made to the executive, the value and experience the executive brings to
their role, retention incentives and the responsibilities of the executive. In determining the size of equity-based awards, our
Compensation Committee may also consider input from a compensation consultant regarding market practices,
recommendations of the Executive Chairman or the CEO (except the CEO and Executive Chairman do not make
recommendations regarding their own awards) or the judgment of our Compensation Committee. The dollar value of the
awards are not tied to any strict benchmark and may be below, at or above
a
the mid-range of what other comparabl
a e
companies may offe
f r in any given year.
Our Compensation Committee believes that our executive compensation plans should include a mix of performance
and time-based equity awards as the primary long-term components. We believe long-term equity awards align the financial
interests of our executive officers with the interests of our stockholders by focusing more on the long-term performance of
the Company. Each of our named executive officers has the opportunity to earn equity incentive awards based on Company
performance over a three-year period. By awarding performance equity compensation over a longer performance period, our
executives’ interests are better aligned with our stockholders’ long-term interests.
Perfor
f
mance-Based Equity. Beginning in fiscal 2025, we granted our executive offic
f ers equity awards in the for
f
m of
PSUs, which are earned based on the Company’s achievement with respect to key performance goals over a three-year
performance period. The primary purpos
r
e of these awards is to motivate our executives to drive the Company to achieve a
supe
u
rior level of performance for each of these performance metrics which we believe will drive long-term value to our
stockholders.
Time-Based Equity. We continued to grant our executive offic
f ers equity awards in the for
f
m of time-based restricted
stock units ("RSUs") t
"
hat vest over a three- or five-year time period based on continued employment with the Company. The
primary purpos
r
e of these awards is to align the interests of our executives with those of long-term stockholders as well as to
retain the services of our executive officers who have significant experience and have demonstrated supe
u
rior performance in
the homebuilding industry.
r
For fis
f cal 2025, the Compensation Committee reviewed the value and number of PSUs to be awarded for the three-
year performance period and the number and value of RSUs to be granted. In such review, the Compensation Committee
considered the target number of PSUs, the maximum number of PSUs that could be earned and the expected value of the PSU
and RSU awards, as well as all other components of each executive’s compensation.
28

2025 Fisc
i
al Year Equity
i
Awards -
d
Time
i
Based RSUs a
U
nd Target 2027 PSUs
In fiscal 2025, the Compensation Committee awarded the fol
f lowing target number of PSUs (the "2027 PSUs") a
"
nd
RSUs to each of the named executive officers:
Name
Target Number
of 2027 PSUs
Grant Date
Value of 2027
PSUs(1)
Number of
RSUs
Grant Date
Value of RSUs(2)
Equity Pay Mix
(PSUs as % of
Equity)
Donald J. Tomnitz
17,907
$
630,326
19,890
$
575,020
52 %
Anthony W. Oxley
39,707
$
1,397,686
29,400
$
849,954
62 %
James D. Allen
17,565
$
618,288
13,005
$
375,975
62 %
Mark S. Walker
23,918
$
841,914
17,710
$
511,996
62 %
(1) In October 2024, the Compensation Committee approved the target number 2027 PSUs which can be earned based
on the Company’s achievement with respect to Relative TSR, ROI and market share performance goals, as defin
f ed
and fur
f
ther described and discussed below. The grant date was establ
a ished in October when the target number of
shares and performance goals were approved. The grant date fair value of the October 30, 2024 PSUs is $35.20 per
unit as determined in accordance with accounting guidance for
f
share-based payments. Additional infor
f
mation
regarding the Company's equity awards is included in Note 11 to the consolidated financial statements in the
Company's Annual Report on Form 10-K fil
f ed with the SEC on November 19, 2025.
(2) The grant date fai
f r value of the November 20, 2024 RSUs vesting in three years and five years is $28.91 per unit as
determined in accordance with accounting guidance for
f
share-based payments. Additional infor
f
mation regarding the
Company's equity awards is included in Note 11 to the consolidated financial statements in the Company's Annual
Report on Form 10-K fil
f ed with the SEC on November 19, 2025.
2027 PSUs - Pot
P en
t
tial Vestin
t
g at Sep
S
tember 30, 2027
The 2027 PSUs include three performance goals of relative TSR, return on inventory a
r
nd market share (each weighted
at 1/3 of the total award opportunity). The awards are subj
u ect to a threshold for
f
each performance goal and will vest at 0% to
200% of the target number of units granted based on the fin
f al performance rankings afte
f r the completion of the three-year
performance period from October 1, 2024 through September 30, 2027 (the "2027 Perfor
f
mance Period").
"
Relative TSR is
measured as the Company's TSR performance as compared to the TSR of the S&P Small Cap 600 Index over the 2027
Performance Period. Return on Inventory i
r
s (i) the Company’s average pre-tax income over the 2027 Performance Period,
where average pre-tax income is the sum of the Company’s pre-tax income for the trailing three fiscal years fro
f
m the end of
the 2027 Performance Period divided by three (ii) divided by average real estate over the 2027 Performance Period, where
average real estate is the sum of the ending real estate balances of the trailing thirteen fiscal quarters immediately preceding
the end of the 2027 Performance Period divided by thirteen, as reported in the Company’s audited fin
f ancial statements and as
may be adjusted by the Compensation Committee in its sole discretion. Finally, market share is measured as the number of
residential lots sold by the Company divided by the sum of the privately owned "built for sale – fee simple" single-family
housing units started, as defined, and in accordance with the data provided, by the U.S. Census Bureau, in each case dur
d
ing
the four
f
fiscal quarters immediately preceding the end of the 2027 Performance Period.
When determining the target number of 2027 PSUs to grant in October 2024, the Compensation Committee reviewed
the estimated value of these awards in relation to the Company’s consolidated revenue, pre-tax income and other operating
results. The Compensation Committee chose to fur
f
ther incentivize these executive officers by including a maximum payout
at two times the target amounts in the event that maximum performance is achieved on each of the three performance goals.
When the 2027 PSUs were granted, the target and maximum amounts were subjective determinations and not based on any
formulaic method or benchmark. Additional infor
f
mation on the grant date fair value of the 2027 PSUs is set forth in the
"Summary Compensation Table" on page 35 and the "Fisc
i
al 2025 Grants of Plan-Based Awards"
d
tabl
a e on page 37.
29

Other Compensation and Benefits
Qualif
l ie
f d Retir
t ement Benefit
f st
Our employees, including our NEOs, are eligible to participate in the D.R. Horton 401(k) plan, a tax-qualifie
f d defin
f ed
contribution retirement plan. Our NEOs, like all other eligible employees, may contribute 1% to 75% of their earnings, on a
pre-tax basis, into the D.R. Horton 401(k) plan. For 2025, the maximum amount that could be contributed to the plan by a
participant was $23,500 ($31,000 for participants 50 - 59 years old or 64 years old or older, $34,750 for participants 60 - 63
years old). The Company makes a matching contribution to the participants’ accounts in an amount of $0.50 for each $1.00
contributed by the participant up to 6% of his or her covered wages.
SERP
E
2
In fiscal 2024, the Compensation Committee appr
a
oved the participation of certain Company employees in the D.R.
Horton Amended and Restated Suppl
u
emental Executive Retirement Plan 2 ("SERP
E
2"),
"
a nonqualified plan, permitting
eligible participants, including our executive officers, to accrue supplemental Company benefits payabl
a e upon
u
retirement,
separation of service, death or disabi
a lity beginning in fiscal 2025. The SERP 2 provides that if the executive is employed by
D.R. Horton or the Company on the last day of the fis
f cal year, the Company will establ
a ish a liabi
a lity to such executive equal
to 10% of his or her annual base salary a
r
s of the first day of such fiscal year. This liabi
a lity will accrue
r
earnings in future years
at a rate established by the administrative committee for
f
the SERP 2. Mr. Oxley commenced participation in the SERP 2
while employed by D.R. Horton. All of our other named executive officers commenced participation in the SERP 2 in fis
f cal
2025 and will accrue
r
earnings starting in fis
f cal 2026.
The Compensation Committee reviewed the amounts listed in the column titled "Change in Pension Val
V ue and
Nonqualified Defe
e rred Com
C
pe
m
nsation Earnings" in the "Summary Compensation Table" on page 35 for our named execu itive
offifi
f cers for
f
fifisc lal 2025.
h
The above
a
-market por ition of ear ini g
ngs on Mr. O lxl y
ey's outstandidi g
ng SERP
b
2 b lalance was $55,958. We
be
belilieve hthis amount accru d
ed for above
a
-market ear ini g
ngs on Mr. O lxl y
ey's SERP
b
2 b lalance is reasonablbl
a e when compared to our
peer group and reasonablbl
a e r lelative to the total compensation p
k
ack g
age offered to Mr. Oxley.
Health
l
and Wel
W fa
l
re Benefi
e ts
i
We offe
f r the same health and welfare benefits to all ful
f l-time employees, including our NEOs. These benefits include
medical benefits, dental benefit
f s, vision benefits, life i
f
nsurance, salary continuation for
f
short-term disabi
a lity, long-term
disabi
a lity insurance, accidental death and dismemberment insurance, a dependent care spending account, a health care
spending account, a health savings account and other similar benefits
f
.
Perquisi
i te
i s
We generally provide minimal perquisites to our executives. No perquisites in excess of $10,000 were provided to our
NEOs in fiscal 2025.
Fiscal 2026 Compensation
For fis
f cal 2026, the Compensation Committee appr
a
oved a few changes to the NEO compensation programs as
described below.
The Compensation Committee appr
a
oved fis
f cal 2026 PTI Bonus percentages for
f
each executive as set forth in the tabl
a e
below, a slight increase over fis
f cal 2025 PTI Bonus percentages. The target and maximum bonuses that can be earned under
the PTI Bonus program are as set forth in the tabl
a e below.
30

PTI B
T
onus Percentages and Maxi
a mum PTI Bonuses for Fis
F cal 2026
Percent of
Pre-Tax
Income
Maximum
Potential
Payout
Name
Fiscal 2026
Fiscal 2026
Donald J. Tomnitz....................................................................................................................
0.30 % $
1,320,000
Anthony W. Oxley...................................................................................................................
0.65 % $
2,860,000
James D. Allen.........................................................................................................................
0.25 % $
1,100,000
Mark S. Walker........................................................................................................................
0.40 % $
1,760,000
In addition, the Compensation Committee granted 2028 PSUs to each of our NEOs, which will vest based on
performance over a three-year period from October 1, 2025 through September 30, 2028. The 2028 PSUs include four
performance goals - relative TSR, retur
t
n on inventory,
r
market share and book value per share, weighted evenly. The
Compensation Committee added book value per share as a new performance goal for
f
the 2028 PSUs in order to incentivize
our NEOs to grow profit
f ability and continue to build shareholder value. Book value per share is calculated as the percentage
increase in book value per share, which is (i) the Company’s stockholders equity (net assets less noncontrolling interest) as of
the last day of the performance period divided by the number of Company shares outstanding as of the last day of the
performance period, divided by (ii) $34.78, the book value per share at the beginning of the performance period, (iii) minus 1.
Clawback Policy
We maintain a clawback policy that appl
a
ies to certain incentive-based compensation that we grant, which is intended
to comply with the requirements of the New York Stock Exchange Listing Standard 303A.14 implementing Rul
R e 10D-1
under the Securities Exchange Act of 1934. In the event the Company is required to prepare an accounting restatement of the
Company's fin
f ancial statements due to material non-compliance with any fin
f ancial reporting requirement under the federal
securities laws, the Company will recover any excess incentive-based compensation received by a covered executive,
including the NEOs, during the applicable recovery period (generally the prior three completed fiscal years) that exceeds the
amount that the executive otherwise would have received had the incentive-based compensation been determined based on
the restated fin
f ancial statements. The Board of Directors believes that the clawback policy and prohibiting the hedging and
pledging of the Company’s common stock, will further minimize compensation risk and strengthen the alignment of
executives’ interests with those of long-term stockholders.
Oversight of Executive Compensation
Com
C
pe
m
nsatio
t n Com
C
mitt
i ee
t
Our Compensation Committee is composed entirely of independent directors and is responsible for establishing and
administering our compensation programs and philosophies. The Compensation Committee appr
a
oves compensation for
f
our
Executive Chairman and CEO and makes recommendations to the Board regarding the compensation of our other NEOs. Our
Executive Chairman and CEO work closely with our Compensation Committee and recommend executive compensation
amounts, except the Executive Chairman and CEO do not participate in discussions regarding their own compensation.
Further dut
d ies of the Compensation Committee are more fully set forth in the Compensation Committee Charter, which is
availabl
a e at www.for
f
estar.com under the "Investor Relations — Corpor
r
ate Governance — Board Committees" section.
31

Competitiv
t
e Pay
P
Analys
l
is and Peer
P
Group
u
The Compensation Committee believes providing competitive pay is a key factor in attracting, motivating and
retaining executives that drive superior performance. Our Compensation Committee, either alone or with the assistance of a
compensation consultant, such as Lockton Companies for fis
f cal 2025, considers a variety of fact
f
ors to assist with setting
compensation for
f
the NEOs, including evaluating compensation programs and amounts provided to the NEOs of the
companies in our peer group. Although we believe benchmarking the pay of our peer group is useful
f
in determining our
compensation practices and pay levels, we do not target our pay toward any particular peer group benchmark.
The peer group used to establ
a ish initial fis
f cal 2025 target compensation levels was consistent with the peer group used
for 2024. The constituents remained unchanged fro
f
m the prior year, except The St. Joe Company was excluded in fis
f cal 2025
solely because a significant portion of its business is now unrelated to the residential development industry a
r
nd is primarily
focused on hospitality and leasing. The companies comprising our peer group as of September 30, 2025 were selected based
on similarities in industry f
r
oc
f
us, market capitalization and business models and were used to assist the Compensation
Committee in its fiscal 2025 compensation analysis. Our fis
f cal 2025 peer group consisted of:
American Woodmark Corpor
r
ation
Five Point Holdings, LLC
LGI Homes, Inc.
Beazer Homes USA, Inc.
Howard Hughes Holdings Inc.
M/I Homes, Inc.
Centur
t
y C
r
ommunities, Inc.
JELD-WEN Holding, Inc.
MasterBrand, Inc.
Compensation Con
C
sultant
The Compensation Committee may engage an independent compensation consultant or other third-party service
provider to assist with market data and other information relevant to executive compensation programs and decisions. In
October 2024, the Committee engaged Lockton Companies to provide advice and support on executive compensation
matters.
Tally Sheetst
Our Compensation Committee reviews tally sheets for
f
each of the NEOs setting for
f
th compensation for
f
the previous
three years. These tally sheets list the executive’s base salary,
r
proposed bonus and stock awards, actua
t
l and anticipated
401(k) matching contributions and value of health and welfare benefits, in each case, over the previous three-year period.
Evaluation of E
o
xe
E
cutive Cha
C
irma
r
n’s a
’
nd CEO’s P
’
er
P
fo
r
rmance
Our Compensation Committee fac
f
ilitates a process for
f
our independent directors to provide formal feedba
d
ck regarding
our Executive Chairman’s and CEO’s performance. Factors evaluated may include, but are not limited to, increased land and
lot development, lot sales, and other fin
f ancial and non-financial performance measures and objectives, including leadership,
ethics, key initiatives, strategic planning, financial results, succession planning, human resources, communications, external
relations and board relations. Our Compensation Committee determines Executive Chairman and CEO pay.
32

Compensation Oversi
r gh
i
t Gov
G
ernance Pra
P
ctic
t es
Our governance practices divide responsibility for compensation oversight into three levels:
Stockholders:
Stockholders have approved our stock incentive plans and provide an
annual advisory vote on executive compensation. In addition, under the
terms of the A&R Stockholder’s Agreement with D.R. Horton, for so long
as D.R. Horton beneficially owns 35% or more of our voting securities, we
need the prior written consent of D.R. Horton to appoi
a
nt or terminate key
offi
f cers or change their compensation arrangements. Thus, under those
circumstances, D.R. Horton's appr
a
oval is required.
Board and Compensation Committee:
Our Compensation Committee is composed entirely of independent
directors. The Compensation Committee establishes and oversees the
administration of our compensation programs. The Compensation
Committee ensures that stockholder-appr
a
oved plans are administered in
accordance with good governance practices and intent. The Compensation
Committee will also consider the results of stockholder advisory votes on
executive compensation. The Compensation Committee is responsible for
the appr
a
oval of salaries and bonuses of the Executive Chairman and CEO
and long-term equity compensation awarded to each of the NEOs. The ful
f l
Board evaluates the performance of the CFO and COO and acts on
recommendations of the Compensation Committee with respect to CFO
and COO compensation.
Management:
Management determines individual employee bonuses below the executive
offi
f cer level and administers all employee benefit
f
and incentive plans on a
day-to-day basis. Within management, the Executive Chairman serves as a
liaison with the Compensation Committee.
Equity
i
Award Grant Pra
P
ctic
t es
Our practice is to consider equity-based awards annually. In fiscal 2025, equity-based awards were granted dur
d
ing the
first quarter of the fis
f cal year. From time to time, we may grant equity-based awards outside the annual award process, such
as in connection with the hiring of a new employee, for retention purpos
r
es, to reward exemplary performance or for
promotional recognition. Although the Company does not currently grant stock options, certain employees may enroll to
purchase shares under the terms of our 2022 Employee Stock Purchase Plan with purchase dates in January and July of each
year using payroll deductions accumulated dur
d
ing the prior six-month period. The NEOs and certain other executives are not
eligible to participate in the 2022 Employee Stock Purchase Plan.
We do not grant stock-based awards in coordination with the release of material non-public information nor do we
time the release of material non-public information to affect the value of equity grants. Our policy for
f
setting the timing of
stock-based awards does not allow executives to have any role in choosing the price of their stock-based awards. We do not
"back date," "spring load" or reprice stock-based awards.
33

Compensation Committee Report
The Compensation Committee has reviewed and discussed the above Compensation Discussion and Analysis with
management and, based on this review and discussion, recommended to the Board of Directors that it be included in this
Proxy Statement and incorporated by reference in our Annual Report on Form 10-K for
f
the fis
f cal year ended September 30,
2025.
Lisa
i
H. Jamieson, Chai
C
r
Kellie L. Fisc
i
her
Samuel R. Ful
F ler
Elizabeth (Betsy
t
) P
y
armer
George
r
W. Seagraves, III
34

Summary Compensation Table
The fol
f lowing tabl
a e contains compensation infor
f
mation for our Executive Chairman, CEO, CFO, and COO referred to
in this Proxy Statement as our NEOs. The information in the following table is presented in accordance with SEC
requirements.
Name and Principal
Position(1)
Year
Salary
($)
Bonus(2)
($)
Stock
Awards(3)
($)
Non-Equity
Incentive Plan
Compensation(4)
($)
Change in
Pension Value
and
Nonqualifie
f d
Deferred
Compensation
Earnings(5)
($)
All Other
Compensation(6)
($)
Total
($)
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
Donald J. Tomnitz.........
2025
500,000
—
1,205,346
548,199
—
68,424
2,321,969
Executive Chai
C
rman
2024
420,000
1,750,000
600,037
—
—
18,292
2,788,329
2023
400,000
1,550,000
599,994
—
—
17,289
2,567,283
Anthony W. Oxley........
2025
500,000
—
2,247,640
1,315,677
55,958
69,301
4,188,576
Presiden
d
t and Chiefe
Executive Offic
O
er
2024
315,000
1,500,000
889,497
—
34,981
13,328
2,752,806
James D. Allen..............
2025
400,000
—
994,263
438,559
—
54,478
1,887,300
Executive Vic
V e President
and Chief F
e
in
F ancial
Offic
f
er
2024
370,000
625,000
400,011
—
—
14,062
1,409,073
2023
350,000
525,000
399,996
—
—
13,244
1,288,240
Mark S. Walker.............
2025
400,000
—
1,353,910
767,478
—
53,702
2,575,090
Executive Vic
V e President
and Chief O
e
pe
O
rating
Offic
f
er
2024
315,000
625,000
400,011
—
—
13,265
1,353,276
2023
300,000
475,000
299,997
—
—
12,555
1,087,552
(1) Mr. Oxley was not an NEO prior to fiscal year 2024.
(2) The amounts reported in column (d) represent the discretionary cash bonuses earned by the NEOs during the
applicable fiscal year. Beginning in fiscal 2025, the NEO's began participating in the PTI Bonus program under the
Cash Incentive Plan, as described under the section titled "Elements of Our Com
C
pe
m
nsation Program."
(3) The amounts reported in column (e) represents the grant-date fai
f r value of the RSUs granted in the appl
a
icable year
and the 2027 PSUs granted in fis
f cal 2025 and was determined in accordance with accounting guidance for
f
share-
based payments.
h
Th g
e grant d
-date f iai
f r v lalue of hthe 2027 PSUs was based on the pr b
obablbl
a e outcome of hthe a
l
ppl
a
ic b
able
performance co di
ndi itions at grant. If hthe maximum number of 2027 PSUs was us d
ed, the total gran d
t date f iai
f r v lalue of hthe
2027 PSUs w
l
ould b
d be $
e 1,260,653 for Mr. Tomnitz, $2,795,373 for Mr. Oxley, $1,236,576 for Mr. Allen and
$1,683,827 for Mr. Walker.
d
Addidi itional i
l infor
f
ma ition rega d
rding the Company's e
i
qui yty awards is in lcl d
uded i
d in Note 11 to the cons lolididat d
ed fifinancial
statements in hthe Compa y
ny's Annual Report on Form 10-K filile
f
d wi h
ith hthe SEC on Nove b
mber 19, 2025. Mr. O lxl y
ey's
fifisc lal 2024 amount in lcl d
udes a grant of 2,010 RSUs awarded i
d in Dece b
mber 2023 hthat vest over fiv
f
y
e years a d
nd settle in
D.R. Horton common stock.
(4) The amounts reported in column (f) represent the PTI Bonuses earned by the NEOs for
f
fiscal 2025 under the
Company's Cash Incentive Plan. Awards under the Cash Incentive Plan are a percentage of the Company’s pre-tax
income capped at a maximum potential payout, with the applicable percentage and maximum for
f
each NEO appr
a
oved
by the Compensation Committee at the beginning of the fis
f cal year.
(5) The amounts reported in column (g) reflect the above-market portion of earnings credited to Mr. Oxley's account
balance under the SERP 2 dur
d
ing the applicable fiscal year. Additional infor
f
mation regarding SERP 2 is provided
under the section titled "Other Compensation and Benefits."
35

(6) The amounts reported in column (h) for fis
f cal 2025 include the fol
f lowing:
Additional
Life
Insurance
and Long-Term
Disability
Premiums
($)
401(k) Matching
Contributions
($)
SERP 2 Company
Contributions
($)
Total
($)
Mr. Tomnitz .....................................................
7,924
10,500
50,000
68,424
Mr. Oxley.........................................................
8,801
10,500
50,000
69,301
Mr. Allen..........................................................
3,978
10,500
40,000
54,478
Mr. Walker.......................................................
3,202
10,500
40,000
53,702
36

Fiscal 2025 Grants of Plan-Based Awards
The fol
f lowing tabl
a e summarizes fiscal 2025 grants of stock-based compensation and incentive plan awards made to
each of our NEOs.
Estimated Future Payouts Under
Non-Equity Incentive Plan
Awards(1)
Estimated Future Payouts Under
Equity Incentive Plan Awards(2)
All
Other
Stock
Awards:
Number
of
Shares
of Stock
or
Units(3)
Grant Date
Fair Value of
Stock Awards
(2)(3)
$)
N
(#)
($
Approval
Threshold
$
Target
$
Maximum
$
Threshold
Target
Maximum
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(
Mr.
Tomnitz
—
—
1,350,000
—
—
—
—
—
10/30/2024
10/28/2024
—
—
—
8,954
17,907
35,814
—
630,326
11/20/2024
—
—
—
—
—
—
19,890
575,020
Mr.
Oxley....
—
—
3,240,000
—
—
—
—
—
10/30/2024
10/28/2024
—
—
—
19,854
39,707
79,414
1
—
,397,686
11/20/2024
—
—
—
—
—
—
29,400
849,954
Mr.
Allen.....
—
—
1,080,000
—
—
—
—
—
10/30/2024
10/28/2024
—
—
—
8,783
17,565
35,130
—
618,288
11/20/2024
—
—
—
—
—
—
13,005
375,975
Mr.
Walker..
—
—
1,890,000
—
—
—
—
—
10/30/2024
10/28/2024
—
—
—
11,959
23,918
47,836
8
—
41,914
11/20/2024
—
—
—
—
—
—
17,710
511,996
(1) The amounts in column (e) represent the maximum value of the PTI Bonuses that can be paid under the Cash
Incentive Plan for
f
fiscal 2025. Additional infor
f
mation related to the award is discussed under the heading "2025
Semi-Annual Cash Perfor
f
mance Bonuses" on page 26. The actua
t
l earned PTI Bonuses for fis
f cal 2025 are refle
f cted in
the "Non-Equity Incentive Plan Com
C
pe
m
nsation" column of the "Summary Compensation Table" on page 35.
(2) Our NEOs were each awarded a grant of 2027 PSUs on October 30, 2024. The threshold, target and maximum
amounts refle
f ct the number of 2027 PSUs each executive could earn based on the level of performance attained with
respect to three performance goals at the end of the three-year performance period. The grant date fair value of the
2027 PSUs is $35.20 per unit and was determined in accordance with accounting guidance for
f
share-based payments.
Additional infor
f
mation regarding the Company's equity awards is included in Note 11 to the consolidated financial
statements in the Company's Annual Report on Form 10-K file
f
d with the SEC on November 19, 2025. These 2027
PSUs are discussed under the headings "2025 Fisc
i
al Year Equity Awards - Tim
T
e Based RSUs and Target 2027 PSUs"
on page 29.
(3) On November 20, 2024, Mr. Tomnitz, Mr. Oxley, Mr. Allen and Mr. Walker were awarded 19,890, 29,400, 13,005
and 17,710 RSUs, respectively. The RSUs for
f
Mr. Tomnitz vest in three equal annual installments on each
anniversary o
r
f the grant date. The RSUs for
f
Mr. Oxley, Mr. Allen and Mr. Walker vest in fiv
f e equal annual
installments on each anniversary o
r
f the grant date. The grant date fair value of the November 20, 2024 RSUs is
$28.91 per unit and was determined in accordance with accounting guidance for
f
share-based payments. Additional
information regarding the Company's equity awards is included in Note 11 to the consolidated financial statements in
the Company's Annual Report on Form 10-K file
f
d with the SEC on November 19, 2025.
37

Fiscal 2025 Outstanding Equity Awards
The fol
f lowing tabl
a e summarizes outstanding equity awards held by our NEOs at September 30, 2025. All awards will
settle in shares of our common stock unless noted below.
Stock Awards
Name
Grant Date
Number of Shares or
Units of Stock That
Have Not Vested
(#)
Market Value of
Shares of Units
That Have Not
Vested (1)
($)
Equity Incentive
Plan Awards:
Number of
Unearned
Shares, Units or
Other Rights
That Have Not
Vested (2)
(#)
Equity Incentive Plan
Awards: Market of
Payout Value of
Unearned Shares,
Units or Other
Shares of Stock That
Have Not Vested (2)
($)
Footnote
Mr. Tomnitz ............
3/21/2023
12,033
319,957
—
—
(3)
3/28/2024
9,397
249,866
—
—
(3)
10/30/2024
—
—
17,907
476,147
(1)
11/20/2024
19,148
509,145
—
—
(3)
Mr. Oxley................
3/17/2021
520
88,124
—
—
(5)
3/30/2022
1,522
257,933
—
—
(5)
3/21/2023
1,737
294,369
—
—
(5)
12/20/2023
1,608
272,508
—
—
(5)
3/28/2024
9,954
264,677
—
—
(4)
10/30/2024
—
—
39,707
1,055,809
(1)
11/20/2024
29,400
781,746
—
—
(7)
Mr. Allen.................
3/18/2021
2,330
61,955
—
—
(6)
3/31/2022
8,504
226,121
—
—
(6)
3/21/2023
15,451
410,842
—
—
(6)
3/28/2024
7,590
201,818
—
—
(6)
10/30/2024
—
—
17,565
467,053
(1)
11/20/2024
12,519
332,880
—
—
(6)
Mr. Walker..............
3/18/2021
1,554
41,321
—
—
(7)
3/31/2022
5,630
149,702
—
—
(7)
3/21/2023
12,195
324,265
—
—
(7)
3/28/2024
7,962
211,710
—
—
(7)
10/30/2024
—
—
23,918
635,980
(1)
11/20/2024
17,710
470,909
—
—
(7)
(1) Represents the value for
f
all awards based on the closing price of $26.59 of our common stock or $169.47 of D.R.
Horton, Inc. common stock (RSUs that settle in D.R. Horton shares), in each case as reported on the NYSE on
September 30, 2025, the last trading day of fis
f cal 2025, depending on whether the award is settled in our shares or
D.R. Horton's shares.
(2) Represents the target number of 2027 PSUs that may be earned. The 2027 PSUs are described under "Fisc
i
al 2025
Grants o
t
f P
o
lan-Based Awards
d " on page 37, and vest subject to attainment of applicable performance criteria
following completion of a three-year performance period on September 30, 2027. The value of the 2027 PSUs is
based on the closing price of our common stock on September 30, 2025 of $26.59.
(3) These RSU awards vest in three equal annual installments on each of the fir
f st three anniversaries of the grant date.
As a result of retirement eligibility, a portion of the award vests and settles earlier as units are withheld to cover
certain payroll taxes as and when due
d
.
38

(4) These RSU awards vest in three equal annual installments on each of the fir
f st three anniversaries of the grant date.
(5) These RSU awards (covering shares of D.R. Horton common stock on the grant date) vest in fiv
f e equal annual
installments on each of the first fiv
f e anniversaries of the grant date. The awards were granted to Mr. Oxley during
his service at D.R. Horton, prior to his employment at the Company, but continue to vest based on his service to the
Company.
(6) These RSU awards vest in fiv
f e equal annual installments on each of the first fiv
f e anniversaries of the grant date. As
a result of retirement eligibility, a portion of the award vests and settles earlier as units are withheld to cover certain
payroll taxes as and when due
d
.
(7) These RSU awards vest in fiv
f e equal annual installments on each of the first fiv
f e anniversaries of the grant date.
39

Fiscal 2025 Stock Vested
The fol
f lowing tabl
a e summarizes stock-based compensation awards vested dur
d
ing fis
f cal 2025:
Stock Awards
Name
Number of
Shares Acquired
on Vesting
(#)
Value Realized
Upon Vesting
($)(1)
Mr. Tomnitz .....................................................................................................................
29,826
649,482
Mr. Oxley.........................................................................................................................
7,763(2)
465,067(2)
Mr. Allen..........................................................................................................................
18,044
408,579
Mr. Walker.......................................................................................................................
12,226
263,680
(1) The number of shares acquired on vesting includes shares withheld to satisfy tax-withholding obligations. Value
realized upon vesting represents the aggregate dollar value realized by multiplying the number of shares that vested
by the closing market price of common stock on the vesting date.
(2) In lcl d
ude 2
s ,787 h
shares at a v lalue of $360,223 of D.R. Horton common stock g
k grant d
ed to Mr. O lxl y
ey
h
whilil h
e he was
em lpl y
oyed at D.R. Horton prior to j
o j ioi ini g
ng hthe Compa y
ny,
h
which continue to vest based o h
n his service to the Company.
h
The remaining share count and v lalue is related to the vesting of Forestar common sto k
ck.
Nonqualified Deferred Compensation Plans
Under the SERP 2, D.R. Horton (or the Company, commencing in fis
f cal 2025) generally credits an amount to each
participant’s account each year. Pursuant to the SERP 2, if the executive is employed by D.R. Horton or the Company, as
applicable, on the last day of a fiscal year, then D.R. Horton or the Company will establ
a ish a liabi
a lity to such executive equal
to 10% of his or her annual base salary a
r
s of the first day of such fiscal year. This liabi
a lity will accrue
r
earnings in future years
at a rate established by the administrative committee for
f
the SERP 2. Amounts payable under the SERP 2 are not secured or
held in trus
r
t, and the plan participants’ rights to enfor
f
ce payment are the same as a general unsecured creditor. Amounts
deferred under the SERP 2 are payabl
a e within 60 days following the retirement or termination of employment of the
participant, the death or disabi
a lity of the participant or a change in control of D.R. Horton; provided however, specified
employees, as defin
f ed in Internal Revenue Code Section 409A, generally cannot be paid until six months afte
f r separation
from service (or, if earlier, upon a change in control). The form of distribution may be in a lump sum, or in quarterly
installments over a period not to exceed five years, as elected by the participant.
40

The fol
f lowing tabl
a e shows for
f
each named executive offi
f cer aggregate Company contributions, earnings and
withdrawals/distributions during fis
f cal 2025 and the outstanding balance as of September 30, 2025 under the SERP 2. Mr.
Oxley began participating in the SERP 2 while employed by D.R. Horton. In fiscal 2025, Mr. Tomnitz, Mr. Allen and Mr.
Walker began participating in the SERP 2.
Name
Company Contributions in
Fiscal 2025 to
SERP 2(1)
Aggregate Earnings in
Fiscal 2025 to SERP(2)
Aggregate Withdrawals/
Distributions in Fiscal
2025
Aggregate Balance at
September 30, 2025
SERP 2
Donald J. Tomnitz ........
$
50,000
—
—
$
50,000
Anthony W. Oxley........
$
50,000
$
106,537
$
—
$
1,182,780
James D. Allen..............
$
40,000
—
—
$
40,000
Mark S. Walker.............
$
40,000
—
—
$
40,000
(1) Represents the amount of unfunde
f
d, unsecured liabilities credited by the Company on behalf of each participant in
fiscal 2025 under the SERP 2. Such amount is also included in the "All Other Compensation" column of the
"Summary Compensation Table" on page 35.
(2) Represents earnings related to the SERP 2 related to contributions made during Mr. Oxley's service at D.R. Horton,
but accrue
r
d under the plan during his period of service at Forestar dur
d
ing fis
f cal 2025. The rate is determined by the
SERP 2 plan administrative committee and is typically 10% per annum. The portion of earnings considered above-
market ($55,958) for Mr. Oxley is included in the "Change in Pension Val
V ue and Nonqualified Defe
e rred
Compensation Earnings" column of the "Summary Compensation Table" on page 35.
41

Potential Payments Upon Termination or Change in Control
Equity Incentive Awards
Under our 2018 Stock Incentive Plan, the administrator will determine and include in any award agreement the terms
and conditions applicable to any unvested equity awards following the termination of a participant’s employment with the
Company, D.R. Horton or any of their respective subsidiaries. Generally, if a retirement-eligible employee retires, or upon
u
the participant’s termination of employment due
d
to disabi
a lity or death, or upon a change in control of the Company, all
unvested RSUs will vest in full if the participant had continuous status
t
as an employee since the grant date of the award.
Additionally, if a retirement-eligible employee retires, or upon
u
the participant’s termination of employment by Forestar
without cause or due to disabi
a lity or death, a pro-rata portion of the PSUs, determined based on the number of ful
f l months
completed dur
d
ing the applicable performance period prior to the participant’s termination of employment, will remain
outstanding and eligible to vest based on actua
t
l company performance with respect to the appl
a
icable performance goals
during the applicable performance period, subj
u ect to the participant’s execution and non-revocation of release of claims in a
form provided by Forestar. Otherwise, in the event of a participant’s termination, all unvested RSUs and PSUs will
immediately cease to vest, and all unvested RSUs and PSUs and any rights to the underlying shares will be terminated on the
date of termination. Awards of D.R. Horton common stock are generally subj
u ect to the same termination and change in
control treatment pursuant to the applicable award agreements and the terms of the D.R. Horton Inc. 2006 Stock Incentive
Plan.
Quantification of Termination Payments and Benefit
f s
The fol
f lowing tabl
a e summarizes the estimated amounts our NEOs would have been entitled to in the event of a
termination of employment under various scenarios. The amounts shown assume that such termination was effe
f ctive as of
September 30, 2025, and are based on the closing price of our common stock of $26.59 per share on September 30, 2025, (or
in the case of Mr. Oxley's D.R. Horton RSUs, the closing price of D.R. Horton common stock of $169.47 per share on
September 30, 2025). The tabl
a e only includes additional benefit
f s that result fro
f
m the termination of employment or the
change in control of the Company and does not include any amounts or benefits
f
earned, vested, accrue
r
d or owed under any
plan for any other reason. The actua
t
l amounts to be paid can only be determined at the time of such executive officer’s
separation fro
f
m the Company or a change in control of the Company.
42

Potential Payments Upon Termination or Change in Control
Termination of Employment
Payments and Benefit
f s ($)
Normal
Retirement
($)(4)
Without
Cause
($)
Death or
Disability
($)
Change of
Control
($)
Mr. Tomnitz ...............................................
2027 PSUs(1).......................
158,716
158,716
158,716
—
RSUs(2) (3)............................
1,078,969
—
1,078,969
1,078,969
Total ...................................
1,237,685
158,716
1,237,685
1,078,969
Mr. Oxley...................................................
2027 PSUs(1).......................
—
351,936
351,936
—
RSUs(2) ...............................
—
—
1,959,358
1,959,358
Total ...................................
—
351,936
2,311,294
1,959,358
Mr. Allen....................................................
2027 PSUs(1).......................
155,684
155,684
155,684
—
RSUs(2) (3)............................
1,233,616
—
1,233,616
1,233,616
Total ...................................
1,389,300
155,684
1,389,300
1,233,616
Mr. Walker.................................................
2027 PSUs(1).......................
—
211,993
211,993
—
RSUs(2) ...............................
—
—
1,197,906
1,197,906
Total ...................................
—
211,993
1,409,899
1,197,906
(1) Mr. Tom initz, Mr. Oxley, Mr. Allllen a d
nd Mr. W lalker were awa d
rd d
ed a target number o 1
f 7,907 3
, 9,707 1
, 7,565 and
23,918 2027 PSUs, respec itiv lely, for the performance pe iri d
od of October 1, 2024 hthrough
ugh September 30, 2027.
h
The
2027 PSUs are valu d
ed at $26.59 per u init, hthe clo isi g
ng price per h
share of our stock on Septe b
mber 30, 2025.
h
The
amounts present d
ed reflflect pro-rata vesting b
g bas d
ed on hthe number of months from Oct b
ober 1, 2024 hthrough
ugh September
30, 2025, assu i
ming targe l
t lev lel
h
achievement of ap lplic b
able performance goals i, in the event of normal retirement,
termination without cause d
, dea hth or didisabibi
a lility.
i
Wi hth respect to amounts present d
ed b
above, one-thihi d
rd of hthe three y
-year
pe iri d
od ha b
s been com lplet d
ed b
, bas d
ed on itime lelapsed as of Septe b
mber 30, 2025.
(2) F
)
or each NEO the RSU amounts represent each offic
f er’s unvested portion of RSUs, as shown in the "Number of
Shares or Units of Stock Tha
T
t Hav
H
e Not
N
Vested" column of the "Fisc
i
al 2025 Outstanding Equity Awards" table on
page 38. RSUs are valued at $26.59 per unit, the closing price per share of our stock on September 30, 2025 (or in the
case of Mr. Oxley's D.R. Horton RSUs, at $169.47 per unit, the closing price per share of D.R. Horton common stock
on September 30, 2025). The amounts in the tabl
a e refle
f ct accelerated vesting in the event of normal retirement, death
or disabi
a lity, or change in control had such an event occurred on September 30, 2025. Additional infor
f
mation on the
RSUs granted in fis
f cal 2025 is set for
f
th in footnote 3 to the "Fisc
i
al 2025 Grants o
t
f P
o
lan-Based Awards
d " table on page
37.
(3) Because Mr. Tomnitz and Mr. Allen had reached normal retirement age (65) under our applicable plans on September
30, 2025, they would be entitled to vesting upon
u
retirement.
43

Securities Authorized for Issuance under Equity Compensation Plans
The fol
f lowing tabl
a e summarizes shares outstanding and availabl
a e under our equity compensation plans as of
September 30, 2025:
Plan Category
Number of Securities to be
Issued Upon Exercise of
Outstanding Options,
Warrants and Rights(1)
Weighted-Average
Exercise Price of
Outstanding Options,
Warrants and Rights(1)
Number of Securities
Remaining Available for
f
Future Issuance Under
Equity Compensation Plans
(Excluding Securities
Reflected in Column (a))
(a)
Equity compensation plans approved by
stockholders(2)........................................................
857,848
n/a
3,582,776
Equity compensation plans not approved by
stockholders...........................................................
None
n/a
None
Total.......................................................................
857,848
n/a
3,582,776
(1) Consists solely of restricted stock units, which do not have an exercise price.
(2) The number of shares remaining availabl
a e for
f
issuance represents the 1,104,539 shares that may be granted pursuant
to awards under our 2018 Stock Incentive Plan and the 2,478,237 shares remaining available for purchase under our
2022 Employee Stock Purchase Plan (the "ESPP
S
"). Employees purchased 14,822 shares of common stock through the
ESPP in fiscal 2025.
44

CEO P y
ay Ra itio
As required by Item 402(u) of Regulation S-K, we are providing the fol
f lowing information about
a
the relationship of
the annual total compensation of our median compensated employee and the annual total compensation of Mr. Oxley, our
CEO.
To ididen if
tify o
f
ur medidian em lpl y
oyee fro
f
m our em lpl y
oyee p
l
opulation, as wellll as to determine the total compensation of our
medidian em lpl y
oyee a d
nd hthe annualiliz d
ed total compensation for
f
Mr. O lxl y
ey for fis
f
l
cal 2025, we t
k
ook hthe f lol
f lo i
wi g
ng steps:
1.
We determin d
ed hthat, as of September 30, 2025, our em lpl y
oyee p
l
opulation consisted of 433 indidi ividuals (excludidi g
ng
Mr. O lxl y
ey) wi h
ith lall of these indidi ividuals locat d
ed in hthe U inited States.
h
This
l
population consisted of f lul
f l- itime, part-
itime and temporary e
r
mployees.
2.
We b
obt iained a lilis iti g
ng of total compensation p iaid to e
h
ach em lpl y
oye d
e dur
d
ing fis
f
l
cal 2025. For hthis purpos
r
e, total
compensa itio i
n included s lalary o
r
r w g
ages, as a
l
ppl
a
ic b
able, com i
mis isions b
, bonuses, e
i
qui yty awards hthat vest d
ed or were
exer icised d
d dur
d
ing the year a d
nd any o hther cash compensation. Su h
ch amounts were obt iained f
d fro
f
m our payr loll records.
We annualiliz d
ed hthe s lalaries a d
nd wages of our fullll and part- itime em lpl y
oyees
h
who were not em lpl y
oyed f
d for
f
hthe entire
fifisc lal year. The compensa ition measure above
a
wa c
s onsistently applied to all our employees.
Once we identifie
f d our median employee, we calculated such employee’s compensation for
f
fiscal 2025 in accordance
with the requirements of Item 402(c)(2)(x) of Regulation S-K. In addition to the amounts required to be reported as
compensation in the Summary Compensation Table, we included the dollar value of employer paid non-discriminatory h
r
ealth
insurance benefits
f
in the total annual compensation of our median employee and Mr. O lxl y
ey to bett re reflect our employee
compensation practices.
For fis
f cal 2025:
•
hthe tot lal compensa ition of our medidian em lpl y
oyee was $166,267; and
nd
•
hthe annualiliz d
ed total compensation of Mr. Oxley was $4,207,432.
Based on thihi i
s infor
f
ma ition, for fis
f
l
cal 2025, the ra itio of Mr. Oxley's tot lal compensa ition to hthe tot lal compensa ition of our
medidian em lpl y
oyee was 25 to 1.
The pay ratio described above
a
involves a degree of imprecision due
d
to the use of estimates and assumptions but is a
reasonabl
a e estimate that we calculated in a manner consistent with Item 402(u) of Regulation S-K.
45

Pay Versus Perfor
f
mance
As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of
Regulation S-K, we are providing the fol
f lowing information about
a
executive compensation actua
t
lly paid (as defin
f ed by SEC
rules) and certain other performance measures. For further infor
f
mation concerning the Company's pay-for-performance
philosophy and how the Company aligns executive compensation with Company performance, refer to the "Compensation
Disc
i
ussion and Analys
l
is" section beginning on page 20.
The fol
f lowing tabl
a es set for
f
th information regarding the compensation of our principal executive officer (“PEO”), and
the average compensation of our other NEOs compared to Company and peer group performance for the fiscal years listed.
Average
Summary
Compensation
Table Total
for Non-PEO
NEOs(5)
Average
Compensation
Actually Paid
to Non-PEO
NEOs(6)
Value of Initial Fixed $100
Investment Based On
Year
Summary
Compensation
Table Total
for Mr.
Oxley(1)
Compensation
Actually Paid
to Mr. Oxley(2)
Total
Shareholder
Return(7)
Peer Group
Total
Shareholder
Return(8)
Net Income(9)
(in millions)
Pre-Tax
Income
(in millions)
2025
$ 4,188,576
$ 3,378,532
$ 2,261,453
$ 1,687,149
$
150.23
$
118.67
$
167.9
$
219.3
2024
$ 2,752,806
$ 3,377,719
$ 1,850,226
$ 2,164,232
$
182.88
$
160.13
$
203.4
$
270.1
Average
Summary
Compensation
Table Total
for Non-PEO
NEOs(5)
Average
Compensation
Actually Paid
to Non-PEO
NEOs(6)
Value of Initial Fixed $100
Investment Based On
Year
Summary
Compensation
Table Total
for Mr.
Bartok(3)
Compensation
Actually Paid
to Mr.
Bartok(4)
Total
Shareholder
Return(7)
Peer Group
Total
Shareholder
Return(8)
Net Income(9)
(in millions)
Pre-Tax
Income
(in millions)
2024
$
993,488
$ 1,198,158
$ 1,850,226
$ 2,164,232
$
182.88
$
160.13
$
203.4
$
270.1
2023
$ 2,569,434
$ 3,592,107
$ 1,647,692
$ 2,468,745
$
152.20
$
114.68
$
166.9
$
221.6
2022
$ 2,710,839
$ 2,321,786
$ 2,008,835
$ 1,671,559
$
63.22
$
74.19
$
178.8
$
235.8
2021
$ 2,263,124
$ 2,259,809
$ 1,648,862
$ 1,643,444
$
105.25
$
128.12
$
110.5
$
146.6
(1)
The dollar amounts reported in this column are the amounts of the total compensation reported for
f
our PEO,
Anthony W. Oxley, who was our Chief Executive Offi
f cer for a portion of fiscal 2024 and for
f
fiscal 2025. Refer to
“Executive Com
C
pe
m
nsation - Summary Compensation Table.”
(2)
The dollar amounts reported represent the amount of “compensation actua
t
lly paid” to Mr. Oxley, as computed in
accordance with Item 402(v) of Regulation S-K, and do not reflect the total compensation actua
t
lly realized or
received by Mr. Oxley. In accordance with these rul
r es, these amounts refle
f ct “Total Com
C
pe
m
nsation” as set forth in
the Summary Compensation Table for the year, adjusted as shown below for fis
f cal 2025. Equity values are
calculated in accordance with the same assumptions we generally use under the accounting guidance for
f
share-based
payments and refle
f ct changes in the value of awards granted by D.R. Horton (that settle in D.R. Horton shares), as
well as the Company (that settle in Company shares), that continue to vest based on Mr. Oxley's service to the
Company.
Compensation Actually Paid to Mr. Oxley
2025
Summary Compensation Table (SCT) total compensation
$
4,188,576
Less: stock award values reported in SCT for the covered year
(2,247,640)
Plus: fai
f r value as of year-end of stock awards granted in the covered year
1,837,555
Plus: year over year change in fair value as of year-end of outstanding unvested stock awards granted
in prior years
(172,277)
Plus: change in fair value fro
f
m prior year end to the vesting date of stock awards granted in prior years
that vested in the covered year
(227,682)
Compensation actua
t
lly paid to Mr. Oxley
$
3,378,532
46

(3)
The dollar amounts reported in this column are the amounts of the total compensation reported for
f
our former PEO,
Daniel C. Bartok, who was our Chief Executive Offi
f cer in fiscal years 2021, 2022, 2023, and for
f
part of fiscal 2024
through January 1, 2024. Refer to “Executive Com
C
pe
m
nsation - Summary Compensation Table” for
f
fiscal 2024 in our
2025 Proxy Statement.
(4)
The dollar amounts reported represent the amount of “compensation actua
t
lly paid” to Mr. Bartok, as computed in
accordance with Item 402(v) of Regulation S-K, and do not reflect the total compensation actua
t
lly realized or
received by Mr. Bartok. In accordance with these rul
r es, these amounts refle
f ct “Total Com
C
pe
m
nsation” as set forth in
the Summary Compensation Table for fis
f cal 2024 in our 2025 Proxy Statement, with some adju
d stments in
accordance with SEC rul
r es. Equity values are calculated in accordance with the same assumptions we generally use
under the accounting guidance for
f
share-based payments.
(5)
The dollar amounts reported represent the average of the amounts reported for
f
the Company's non-PEO NEOs as a
group in the “Total” column of the Summary Compensation Tabl
a e in each applicable year. The names of the NEOs
included for
f
these purpos
r
es in each applicable fiscal year are as fol
f lows: (i) for 2025, 2024 and 2023, Donald J.
Tomnitz, James D. Allen, and Mark S. Walker and (ii) for 2022 and 2021, Donald J. Tomnitz and James D. Allen.
(6)
The dollar amounts reported represent the average amount of “compensation actua
t
lly paid” to the non-PEO NEOs as
a group, as computed in accordance with Item 402(v) of Regulation S-K. In accordance with these rul
r es, these
amounts refle
f ct “Total Com
C
pe
m
nsation” as set forth in the Summary C
r
ompensation Table for the year, adjusted as
shown below for fis
f cal 2025. Equity values are calculated in accordance with the same assumptions we generally
use under the accounting guidance for
f
share-based payments.
Average Compensation Actually Paid to Non-PEO NEOs
2025
Average Summary Compensation Table (SCT) total compensation
$
2,261,453
Less: average stock award values reported in SCT for the covered year
(1,184,506)
Plus: average fair value as of year-end of stock awards granted in the covered year
964,038
Plus: fai
f r value as of the vesting date for awards that are granted and vest in the same covered year
12,219
Plus: average year over year change in fair value as of year-end of outstanding unvested stock awards
granted in prior years
(159,231)
Plus: average change in fair value fro
f
m prior year end to the vesting date of stock awards granted in
prior years that vested in the covered year
(206,824)
Average compensation actua
t
lly paid to non-PEO NEOs
$
1,687,149
(7)
Total Shareholder Retur
t
n (TSR) is calculated by assuming that a $100 investment was made on September 30, 2020.
(8)
The TSR Peer Group consists of the Peer Group, as used in the Company's stock performance graph in our annual
report on Form 10-K, which is the same peer group disclosed on page 32 under “Competitive Pay A
a
nalys
l
is and Peer
Group.”
(9)
Amounts represent net income reported in the Company's audited fin
f ancial statements for the applicable fiscal year
and are included as required by Item 402(v) of Regulation S-K.
(10)
We have updated our Pay Versus Performance disclosure to identify the financial performance measure that we
believe most directly links compensation actually paid to our NEOs to company performance. Beginning in fiscal
2025, the Compensation Committee approved the PTI Bonus program under which bonuses are earned based on our
Pre-Tax Income ("PTI") for the year. Because PTI is the primary financial metric used in determining actual annual
incentive compensation for our NEOs, PTI has been designated as the Company-Selected Measure for purposes of
this disclosure.
47

Financial Performance Measures
The most important financial performance measures used by the Company to link NEO compensation actua
t
lly paid for
f
the most recently completed fis
f cal year to the Company's performance are as fol
f lows:
•
Pre-tax Income
•
Relative Total Shareholder Retur
t
n
•
Retur
t
n on Inventory
r
•
Market Share
Relationship Between Pay and Performance
described in more detail in the Compensation Discussion and Analysis section, the Company's executive
compensation program for fis
f cal 2025 reflected a variable pay-for-performance philosophy based on the consideration of
several fact
f
ors. Moreover, the Compensation Committee generally seeks to incentivize NEOs to maximize the Company's
value over the long-term and, therefor
f
e, does not specifically align the Company's performance measures with compensation
that is actua
t
lly paid (as calculated in accordance with SEC rul
r es) for
f
a particular year. Pursuant to SEC rules, the fol
f lowing
graphs are provided to show the relationships between infor
f
mation presented in the Pay versus Performance tabl
a e.
48

CAP
(in millions)
TSR
(per share)
Compensation Actually Paid and TSR
Current PEO CAP
Former PEO CAP
Average Non-PEO NEO CAP
Forestar Group Inc. TSR
Peer Group TSR
2021
2022
2023
2024
2025
$0.0
$1.0
$2.0
$3.0
$4.0
$40
$80
$120
$160
$200
CAP
(in millions)
Net Income
(in millions)
Compensation Actually Paid, Net Income and Pre-Tax Income
Current PEO CAP
Former PEO CAP
Average Non-PEO NEO CAP
Net Income
Pre-Tax Income
2021
2022
2023
2024
2025
$0.0
$1.0
$2.0
$3.0
$4.0
$0
$100
$200
$300
49

Audit Committee Report
The Audit Committee assists the Board of Directors in its oversight of the integrity of the fin
f ancial statements;
compliance with legal and regulatory r
r
equirements; the adequacy of internal control over fin
f ancial reporting; and the
independence, qualific
f ations, and performance of the independent registered public accounting fir
f m and the internal auditors.
Our dut
d ies and responsibilities are more fully described in our charter, which is availabl
a e on the Company’s website at
www.for
f
estar.com.
Management is responsible for the financial statements, the effectiveness of internal control over fin
f ancial reporting
and compliance with legal and regulatory r
r
equirements. The independent registered public accounting fir
f m, Ernst &
Young LLP, is responsible for auditing the financial statements and expressing its opinion on the confor
f
mity of the fin
f ancial
statements with generally accepted accounting principles.
In fulfillin
f
g our oversight responsibilities, we reviewed and discussed with management and Ernst & Young LLP the
audited fin
f ancial statements for the year ended September 30, 2025. We also reviewed and discussed with Ernst & Young
LLP the audit plans and the matters required to be discussed by the Publ
u ic Company Accounting Oversight Board. In
addition, we received and reviewed the written disclosures and letter fro
f
m Ernst & Young LLP required by appl
a
icable rules
of the Public Company Accounting Oversight Board regarding the independent auditor’s communications with the Audit
Committee concerning independence and have discussed with Ernst & Young LLP their independence.
Based on this, we recommended to the Board of Directors that the audited fin
f ancial statements be included in the
Annual Report on Form 10-K for
f
the year ended September 30, 2025, for fil
f ing with the Securities and Exchange
Commission.
AUDI
U
T C
I
OMMI
M
TTE
I
E:
E
Samuel R. Ful
F ler, Chair
Kellie L. Fisc
i
her
Lisa
i
H. Jamieson
Elizabeth (Betsy
t
) P
y
armer
George
r
W. Seagraves, III
50

Proposal No. 3 – Ratific
f ation of Appointment of Independent
Registered Public Accounting Firm
The Audit Committee has selected Ernst & Young LLP ("EY")
Y
to continue to serve as the independent registered
public accounting fir
f m for
f
fiscal 2026. The fol
f lowing tabl
a e sets for
f
th the fee
f
s billed or accrue
r
d by EY for
f
profes
f
sional
services rendered for
f
fiscal 2025 and fis
f cal 2024:
2025
2024(1)
Audit Fees ..............................................................................................................................
$
1,025,000
$
980,410
Audit-Related Fees.................................................................................................................
—
—
Tax Fees .................................................................................................................................
—
—
All Other Fees ........................................................................................................................
—
—
Total(2) ............................................................................................................................
$
1,025,000
$
980,410
(1) The amounts shown for
f
fiscal 2024 have been revised to refle
f ct additional fees
f
paid for audit services.
(2) All fees reported above
a
were approved by the Audit Committee. No services were approved pursuant to the waiver of
pre-approval under Rul
R e 2-01(c)(7)(i)(C) of Regulation S-X.
All services provided by the independent registered public accounting fir
f m must be pre-appr
a
oved by the Audit
Committee. Under the Audit Committee's pre-appr
a
oval policy, the Committee pre-appr
a
oves by type and amount the services
expected to be provided by the independent registered public accounting fir
f m dur
d
ing the coming year. Pre-appr
a
oval is
documented in the minutes of the Audit Committee meeting. The types of services the Audit Committee pre-appr
a
oves annually
are the audit, audit-related and certain tax services described above
a
.
The Chair of the Audit Committee may grant approvals between Audit Committee meetings for services not pre-
approved by the full Audit Committee. Such approvals must be reported to the full Audit Committee at its next meeting. Pre-
approval is not required for
f
non-audit services that were not recognized as non-audit services at the time of engagement, if
the aggregate amount of such services does not exceed the lesser of $100,000 or 5% of the total amount of fees paid to the
independent registered public accounting fir
f m dur
d
ing that fis
f cal year. Such services are promptly brought to the attention of
and appr
a
oved by the Audit Committee prior to completion of the current year’s audit. During fiscal 2025, no services were
approved pursuant to this exception.
In addition, the Audit Committee must separately pre-approve any significant changes in scope or fees for any
approved service. No pre-appr
a
oval authority is delegated to management. Quarterly, the committee reviews the specific
services that have been provided and the related fees.
Representatives of Ernst & Young LLP will be present in person or by confer
f ence call at the 2026 Annual Meeting and
given the opportunity to make a statement if they desire to do so and will be availabl
a e to respond to appropriate questions
from stockholders.
Stockholder ratific
f ation is not required for
f
the selection of Ernst & Young LLP because the Audit Committee is
responsible for selecting our independent registered public accounting fir
f m. The selection, however, is being subm
u
itted for
f
ratific
f ation by the stockholders. No determination has been made as to what action the Audit Committee would take if
stockholders do not ratify t
f
he selection.
The Board of Directors Unanimously Recommends that Stockholders Vote “FOR” the Ratification of
the Appointment of Ernst & Young LLP as our Independent Registered Public Accounting Firm for our
Fiscal Year Ending September 30, 2026.
51

Beneficial Ownership of Common Stock
Management
The fol
f lowing tabl
a e sets for
f
th information regarding the benefic
f ial ownership of our common stock as of the close of
business on November 24, 2025 by (i) each of our directors and nominees for director, (ii) each named executive offi
f cer, and
(iii) all current directors and executive officers as a group.
We determined beneficial ownership as reported in accordance with Rule 13d-3 under the Securities Exchange Act of
1934, as amended (the "Exchange Act").
"
Unless otherwise indicated, beneficial ownership includes both sole voting and sole
dispositive power. Even though SEC rul
r es require reporting all the shares listed in the tabl
a e, the directors and executive
offi
f cers may not claim benefic
f ial ownership of all of these shares. For example, a director or executive officer might not
claim benefic
f ial ownership of shares owned by a relative. Unless otherwise indicated, the tabl
a e does not include any shares
that may be held by pension and profit-sharing plans of the corpor
r
ations or endowment funds of educ
d
ational and charitable
institutions for which various directors and offi
f cers serve as directors or trustees.
Amount and Nature of Common Stock
Beneficially Owned
Beneficial Owner (3)
Number of
Shares
Beneficially
Owned (1)
Percent of Class
Non-Em
-
pl
m oy
l
ee Dire
i
ctor
t
sr
Kellie L. Fischer......................................................................................................
2,203
*
Samuel R. Fuller......................................................................................................
30,109
*
Lisa H. Jamieson .....................................................................................................
24,609
*
Elizabeth (Betsy) Parmer.........................................................................................
2,750
*
George W. Seagraves, II..........................................................................................
2,203
*
Named Exe
E
cutive Offi
O
cers
Donald J. Tomnitz ...................................................................................................
128,515
*
Anthony W. Oxley(2)................................................................................................
19,056
*
James D. Allen.........................................................................................................
31,486
*
Mark S. Walker .......................................................................................................
21,284
*
Group
u
All directors and current executive officers (9 persons) as a group........................
262,215
*
*
Less than one percent based on a total of 50,885,325 shares of common stock outstanding on November 24, 2025.
(1) No shares of our common stock were owned by relatives of our directors, named executive officers, or directors and
executive officers as a group.
(2) These shares include Mr. Oxley's 9,263 shares held in trus
r
t.
(3) The number of shares of D.R. Horton common stock beneficially owned by our directors and executive offic
f ers as a
group, on the record date, was 68,719 shares. Individually, Mr. Fuller owns 29,714 shares, Mr. Tomnitz owns 14,000
shares, Mr. Oxley owns 24,904 shares, and Mr. Allen owns 101 shares.
52

Certain Other Beneficial Owners
Based on 13G and 13D filings, the name, address and stock ownership of each person or group of persons known by us
to own benefic
f ially more than fiv
f e percent of the outstanding shares of our common stock as of the close of business on
November 24, 2025 follows.
Shares Beneficially Owned
Name and Address of Benefic
f ial Owner
Number
Percent(4)
D.R. Horton, Inc.(1)....................................................................................................
31,451,063
61.8 %
1341 Horton Circle
Arlington, Texas 76011
The Vanguard Group (2) ............................................................................................
2,777,578
5.5 %
100 Vanguard Blvd.
Malvern, Pennsylvania 19355
Dimensional Fund Advisors LP (3)............................................................................
2,602,177
5.1 %
6300 Bee Cave Road, Building One
Austin, Texas 78746
(1) Based solely upon information contained in the most recently filed Schedul
d e 13D/A of D.R. Horton, filed with the
SEC on November 1, 2024, reflecting benefic
f ial ownership as of October 28, 2024. According to this Schedul
d e 13D/
A, D.R. Horton had sole voting power for 31,451,063 of these shares, no shared voting power, sole dispositive power
for 31,451,063 of these shares and no shared dispositive power.
(2) Based solely upon information contained in the most recently filed Schedul
d e 13G/A of The Vanguard Group,
u
filed
with the SEC on Februa
r
ry 13, 2024, reflecting benefic
f ial ownership as of December 29, 2023. According to this
Schedule 13G/A, The Vanguard Group had no sole voting power, shared voting power for 13,581 of these shares,
sole dispositive power for 2,747,092 of these shares, and shared dispositive power for 30,486 of these shares.
(3) Based solely upon information contained in the most recently filed Schedul
d e 13G of Dimensional Fund Advisors LP,
filed with the SEC on October 31, 2024, reflecting benefic
f ial ownership as of September 30, 2024. According to this
Schedule 13G, Dimensional Fund Advisors LP had sole voting power for 2,550,742 of these shares, no shared voting
power, sole dispositive power for 2,602,177 of these shares, and no shared dispositive power.
(4) The percentages are calculated based on 50,885,325 outstanding shares at November 24, 2025.
53

Certain Relationships and Related Party Transactions
Related Party Transaction Policy
We maintain a written policy and procedur
d
es for the review, appr
a
oval or ratific
f ation of any related party transactions
that we are required to report under this section of the Proxy Statement.
Under the related party transaction policy, any transaction, arrangement or relationship between a related party and us
must be reviewed and appr
a
oved by the Nominating and Governance Committee, unless pre-appr
a
oved under the policy. The
policy deems the following transactions, arrangements or relationships as pre-approved:
•
Compensation arrangements required to be reported under the Director or Executive Compensation sections of the
proxy statement;
•
Compensation arrangements with an executive offi
f cer who is not an immediate fam
f
ily member of another related
party;
•
Business expense reimbursements;
•
Transactions with an entity in which the related party owns less than 10% of the other entity;
•
Transactions with an entity in which the related party is a director only;
•
Transactions with an entity in which the related party is not an executive officer or a partner, if the aggregate
amount involved does not exceed the greater of $1,000,000 or 2% of that entity's total annual revenues;
•
Indebtedness for transactions in the ordinary c
r
ourse of business;
•
Transactions availabl
a e to all employees in the ordinary c
r
ourse of business, including employment by the Company
of an executive officer or any related party provided such employment is appr
a
oved by an executive officer of the
Company who is disinterested in the transaction;
•
Transactions involving a related party where the rates or charges involved are determined by competitive bids,
provided such transaction is app
a
roved by an executive offi
f cer of the Company who is disinterested in the
transaction;
•
Transactions with a related party involving the rendering of services as a common or contract carrier, or public
utility, at rates or charges fixed in confor
f
mity with law of governmental authority;
•
Transactions between D.R. Horton and us that are contemplated by, and appr
a
oved in accordance with
(i) Section 6.2 of our Third Amended and Restated Certific
f ate of Incorpor
r
ation, (ii) the A&R Stockholder’s
Agreement between D.R. Horton and us dated October 28, 2024 and (iii) the Master Supply Agreement between
D.R. Horton and us dated June 29, 2017, all of which were initially approved by our stockholders at a Special
Meeting of Stockholders held on October 3, 2017, provided such transactions are appr
a
oved by our Investment
Committee and/or Board of Directors (independent directors) as contemplated in such governing documents and
agreements; and
•
Transactions between the Company and D.R. Horton subsidiaries, including, but not limited too: Vidler Water
Resources, Inc. Tierra Financial Advisors, LLC, and DHI Title Agency in the ordinary c
r
ourse of business.
Under the policy, the Nominating and Governance Committee, in the course of review of a potentially material related
party transaction, will consider, among other things, whether the transaction is in our best interest, whether the transaction is
entered into on an arms-length basis, whether the transaction confor
f
ms to our Standards of Business Conduct and Ethics and
whether the transaction impacts a director’s independence under the NYS
l
E lis iting sta d
nda d
rds.
r
A elated party transaction that
has been approved or ratifie
f d by the independent members of our Board of Directors does not require approval or ratific
f ation
by the Nominating and Governance Committee.
If we enter into a related party transaction that has not received approval of the Nominating and Governance
Committee or Board of Directors or was not pre-approved under our policy, or if a transaction that was not originally a
54

related party transaction later becomes a related party transaction, the Nominating and Governance Committee must review
the transaction promptly and may ratify t
f
he transaction. Unless there is a compelling business or legal reason for us to
continue with the transaction, the Nominating and Governance Committee may only ratify t
f
he transaction if it determines that
the transaction is fai
f r to us and any fai
f lure to comply with the related party transaction policy was not due to fraud or deceit.
Related party transactions between D.R. Horton and us that have been approved by our Investment Committee (i.e.,
currently transactions of $45.8 million or less, and are of the type contemplated in Section 6.2 of our Third Amended and
Restated Certific
f ate of Incorpor
r
ation, the A&R Stockholder’s Agreement between D.R. Horton and us dated October 28,
2024 and the Master Suppl
u
y Agreement between D.R. Horton and us dated June 29, 2017) may be ratifie
f d by the Nominating
and Governance Committee on a quarterly basis or at the next scheduled meeting of the Nominating and Governance
Committee at which the Committee chairpe
r
rson includes such item on the meeting agenda.
Stockholder’s Agreement
We entered into an Amended and Restated Stockholder's Agreement, dated October 28, 2024, (the "A&R Sto
S ckholde
l
r's'
Agre
g
ement") w
"
ith D.R. Horton that provides for
f
certain Board and Board committee appoi
a
ntment rights and certain approval
rights. For a discussion of the Board and Board committee appointment requirements, see "Proposal No. 1 — Election of
Directors — S
r
to
S ckhol
k
de
l
r’s A
’
greement " and "Corporate Governance and Board Mat
M ters — Board Com
C
mittees and
Stockholde
l
r’s A
’
greement."
Also under the A&R Stockholder’s Agreement and our Third Amended and Restated Certific
f ate of Incorpor
r
ation, we
must maintain an investment committee (which will not be considered a committee of the Board) (the "Investme
t
nt
Committee"),
"
the members of which will be our offi
f cers or employees who are (a) experienced profes
f
sionals in the land
acquisition and development business or (b) the chief executive offic
f er, the chief fin
f ancial offi
f cer, the general counsel or the
president of community development (or any person serving in an equivalent role). Our Executive Chairman will be a
member of the Investment Committee at all times. The other members of the Investment Committee will be appointed by the
Nominating and Governance Committee. Our Investment Committee consists of Mr. Tomnitz, Mr. Oxley, Mr. Allen and Mr.
Walker.
Under the A&R Stockholder's Agreement, the Investment Committee is solely responsible for investment decisions
involving capital expenditures of $45.8 million or less, subj
u ect to an increase each year as described in the A&R
Stockholder's Agreement (each, an "Investme
t
nt Committee Appr
A
oval Transaction").
"
All decisions of the Investment
Committee will require the appr
a
oval of a majo
a rity of the members of the Investment Committee. Investment decisions that
qualify a
f
s Investment Committee Approval Transactions may be ratifie
f d by the Nominating and Governance Committee on a
quarterly basis or at the next scheduled meeting of the Nominating and Governance Committee at which the Committee
chairperson includes such item on the meeting agenda. Any investment decision that does not qualify a
f
s an Investment
Committee Approval Transaction will be subj
u ect to approval by the Board (independent members).
For so long as D.R. Horton and its affi
f liates benefic
f ially own 35% or more of our voting securities, we may not take
any of the following actions without the prior written consent of D.R. Horton: (i) declare or make any extraordinary o
r
r in-
kind dividend with respect to any equity (or equity-linked) securities other than a dividend on a pro rata basis to all
stockholders or a dividend to us or any of our wholly-owned subs
u
idiaries; (ii) issue, sell or place any new class of capital
stock, equity or equity-linked or other voting securities; (iii) issue equity or equity-linked securities or voting securities (a) in
the case of securities issued as employee compensation, constitut
t ing 1% or more of the then outstanding shares of our
common stock in any calendar year or (b) in any case, constitut
t ing 10% or more of the then-outstanding number of shares of
our common stock; (iv) create, incur, issue, assume or otherwise become liabl
a e for
f
or refinance or guarantee and indebtedness
above certain levels; (v) select, terminate or remove certain key officers or change their compensation arrangements; (vi)
make or approve any funda
f
mental change in our business of developing residential and mixed-use real estate; (vii) acquire
(including by way of merger, exchange offe
f r, recapi
a talization, reorganization, liquidation or dissolution) any business, debt or
equity interests, operations or assets of any person, or make any investment in or loan to any person, in any transaction or
series of transactions involving capital expenditures in excess of $45.8 million, subj
u ect to an increase each year as described
in the A&R Stockholder's Agreement, (viii) effe
f ct or approve any voluntary l
r
iquidation, dissolution or winding-up or certain
events of bankrupt
r
cy or insolvency; or (ix) enter into any strategic alliance or commercial agreement of a nature similar to the
Master Suppl
u
y Agreement (as described below) with a person other than D.R. Horton. These restrictions also appear in our
Third Amended and Restated Certific
f ate of Incorpor
r
ation.
55

In addition, at all times when D.R. Horton and its affi
f liates beneficially own 35% or more of our voting securities, we
may not take any of the following actions without approval of a majo
a rity of the independent directors who are not also
affi
f liated with D.R. Horton: (i) enter into, amend, modify, terminate or approve any transaction between us, on one hand, and
D.R. Horton or any of its affi
f liates, on the other hand, or enter into any waiver, consent or election thereunder, including any
amendment or modification to, termination of, or waiver, consent or election under, the Master Supply Agreement (as
described below) (other than an Investment Committee Approval Transaction); (ii) amend, modify or terminate, or enter into
any waiver, consent or election under, the A&R Stockholder’s Agreement or enter into any merger or business combination
with D.R. Horton or any of its affi
f liates; (iii) consummate or approve any merger, business combination or similar transaction
in which D.R. Horton receives consideration for
f
our common stock of greater value on a per share basis or in a different form
than our other stockholders; or (iv) settle any claim between us and D.R. Horton (except to the extent such claim constitut
t es,
or is the subject of, a
f
n Investment Committee Approval Transaction).
For so long as D.R. Horton and its affi
f liates benefic
f ially own 20% or more of our voting securities, we may not amend
or seek to amend our or our subs
u
idiaries’ organizational documents in any manner that could adversely affect the rights of
D.R. Horton under the A&R Stockholder’s Agreement. In addition, we may not amend or seek to amend our or our
subs
u
idiaries’ organizational documents in any manner that could adversely affect the rights of our other stockholders under
the A&R Stockholder’s Agreement.
Except in certain cases, D.R. Horton has a pre-emptive right (but not the obligation) to participate in any issuance of
equity or other securities by us by purchasing up t
u
o D.R. Horton’s and its subs
u
idiaries’ pro rata portion of such equity or other
securities at a price and otherwise upon
u
the same terms and conditions as offe
f red to other investors.
Pursuant to the customary registration rights with respect to our common stock held by D.R. Horton, its affi
f liates and
their permitted transferees provided for
f
by the A&R Stockholder’s Agreement, we file
f
d an effective shelf registration
statement permitting the resale of 15,000,000 shares of our common stock by D.R. Horton, its affi
f liates and their permitted
transfer
f ees with the SEC which became effective on October 2, 2024. D.R. Horton also has the right, subject to certain
limitations, to require us to register our common stock held by D.R. Horton for resale. D.R. Horton also has piggyback
registration rights in connection with offe
f rings of our common stock by our other stockholders or us.
The A&R Stockholder’s Agreement also provides that D.R. Horton and its affi
f liates will not be prohibited from
f
engaging in business opportunities independently of us unless the opportunity is offe
f red to an individual who is both an
offi
f cer, director or employee of D.R. Horton or its affi
f liates and an offi
f cer or director of ours and the offer is made in writing
to the individual in (and as a direct result of) h
f
is or her capacity as an officer or director of us, in which case the Stockholder
(or its applicable affi
f liate) shall not take such opportunity without the appr
a
oval of a majo
a rity of the Company’s independent
directors.
The A&R Stockholder’s Agreement will terminate on the first day that D.R. Horton and its affi
f liates benefic
f ially own
less than 15% of our voting securities, provided that the provisions of the A&R Stockholder’s Agreement relating to D.R.
Horton’s registration rights, the waiver of business opportunities and certain customary p
r
rovisions will survive the
termination of the A&R Stockholder’s Agreement.
Additional infor
f
mation regarding the A&R Stockholder’s Agreement, including a copy of the A&R Stockholder’s
Agreement, can be found in our Current Report on Form 8-K filed with the SEC on November 1, 2024.
Master Supply Agreement
We entered into a Master Suppl
u
y Agreement with D.R. Horton. The terms of the Master Supply Agreement, unless
earlier terminated, continue until the earlier of (a) the date that D.R. Horton and its affi
f liates benefic
f ially own less than 15%
of our voting securities and (b) June 29, 2037.
Under the Master Suppl
u
y Agreement, we will present to D.R. Horton all single-family residential lot development
opportunities (subj
u ect to certain exceptions) that we desire to acquire and develop that have been approved or conditionally
approved by the Investment Committee (a "Company Sourced Oppor
p
tunity");
"
and D.R. Horton has the right, but not the
obligation, to present us with lot development opportunities that D.R. Horton desires Forestar to acquire for development (if
presented to us, a "D.R. Horton Sourced Oppor
O
tunity").
"
56

The fol
f lowing opportunities are excluded fro
f
m Company Sourced Opportunities: (a) any opportunities, developments
or ventur
t
es owned, under contract, the subj
u ect of a letter of intent or otherwise being pursued, by us at the time of the Merger;
or (b) any opportuni
t
ties presented to us by a third-party builder.
We and D.R. Horton will collabor
a
ate regarding all Company Sourced Opportunities and all D.R. Horton Sourced
Opportunities after considering current and fut
f ur
t
e market conditions. If we and D.R. Horton agree to pursue a Company
Sourced Opportunity or a D.R. Horton Sourced Opportunity, such agreement will be evidenced by a mutua
t
lly agreed upon
written development plan prepared at the direction of the Investment Committee (a "Developm
o
ent Plan"),
"
addressing, among
other things, the number, size, layout and proje
o cted price of lots, phasing, timing, amenities and entitlements and will be
referred to as either a "Company Sourced Development" or a "D.R. Horton Sourced Development," as the case may be.
D.R. Horton or its affiliates have (a) a right of first offer
f
("ROFO
O
") t
"
o buy up to 50% of the lots in the first phase (and
in any subsequent phase in which D.R. Horton purchased at least 25% of the lots in the previous phase) in each Company
Sourced Development; and (b) the right to purchase up t
u
o 100% of the lots in each D.R. Horton Sourced Development, at the
then current fair market price and terms per lot, as mutually agreed to by us and D.R. Horton. All lots in a Company Sourced
Development in which a D.R. Horton affiliate participates as a buyer will be equitabl
a y allocated among D.R. Horton and any
other builders in each phase taking into consideration the location, size and other attributes associated with the lots. The
agreement evidencing the ROFO for the lots in the Company Sourced Development (the "ROFO
O
Agre
g
ement"),
"
and the
purchase and sale agreement for
f
the lots in the D.R. Horton Sourced Development (the "PSA"
S
),
"
will be negotiated, finalized
and executed as a part of the Development Plan. D.R. Horton will assign to us on an "as-is," "where-is basis" the contract to
acquire a D.R. Horton Sourced Development after the fin
f alization of the Development Plan and PSA for such D.R. Horton
Sourced Development.
We, at our sole cost and expense, will perform and direct, through our employees, agents and contractors, all fun
f
ctions
relative to diligence, entitlement, fin
f ancing, planning, design and construc
r
tion of all on-site and off-site improvements
required for
f
any development.
In addition to termination for breach or mutual agreement of the parties, we may terminate the Master Suppl
u
y
Agreement at any time that D.R. Horton and its affi
f liates beneficially own less than 25% of our voting securities.
Additional infor
f
mation regarding the Master Suppl
u
y Agreement, including a copy of the Master Supply Agreement,
can be found in our Current Report on Form 8-K filed with the SEC on June 29, 2017.
Shared Services Agreement
We entered into a Shared Services Agreement with D.R. Horton pursuant to which D.R. Horton provides us certain
administrative, compliance, operational and procurement services. During fiscal 2025, we paid D.R. Horton approximately
$7.3 million for
f
these shared services and $14.4 million for
f
the cost of health insurance and other employee benefit
f s. The
amount we pay for
f
these shared services is re-evaluated and agreed to each fiscal year.
In addition to termination for breach or mutual agreement of the parties, the Shared Services Agreement shall
terminate 30 calendar days after it is determined that D.R. Horton owns less than 20% of our voting securities.
Additional infor
f
mation regarding the Shared Services Agreement, including a copy of the Shared Services Agreement,
can be found in our Annual Report on Form 10-K file
f
d with the SEC on November 19, 2020.
Tax Sharing Agreement
We are subject to a Tax Sharing Agreement with D.R. Horton. This agreement sets for
f
th an equitabl
a e method for
reimbursements of tax liabilities or benefits between D.R. Horton and us related to state and local income, margin or
franchise tax retur
t
ns filed on a unitary basis with D.R. Horton. In accordance with this agreement, we reimbursed D.R.
Horton $0.9 million in fis
f cal 2025 for our tax expense generated in fiscal 2024.
Additional infor
f
mation regarding the Tax Sharing Agreement, including a copy of the Tax Sharing Agreement, can be
found in our Annual Report on Form 10-K file
f
d with the SEC on November 17, 2023.
57

Related Party Transactions
D.R. Horton
t
We participate in real property transactions with D.R. Horton at market terms and negotiate pricing in the normal
course of business. These real property transactions are of the type contemplated by the Master Supply Agreement and the
A&R Stockholder’s Agreement. In instances where D.R. Horton already has the land under contract, we may underwrite the
transaction independently and choose to close in place of D.R. Horton afte
f r D.R. Horton assigns us the contract. We will
develop the land into finished residential lots. We will enter into a lot purchase contract with D.R. Horton to sell the lots to
D.R. Horton at negotiated current fair, market prices. Sometimes, D.R. Horton may provide us with land development
services related to these transactions. If land development services are provided, the fees
f
we owe for
f
these services are
deducted fro
f
m the lot sale proceeds we receive from D.R. Horton. Alternatively, we may source the land directly, develop the
land into finished residential lots, enter into a lot purchase contract with D.R. Horton and sell such lots to D.R. Horton or a
third party at negotiated current, fai
f r market prices.
Additionally, we make short-term strategic investments in fin
f ished lots (lot banking) and undeveloped land (land
banking), with the intent to sell these assets within a short time period, primarily to D.R. Horton, without any development
services. For lot and land banking, D.R. Horton reimburses us for
f
any costs incurred dur
d
ing the holding period, which is
typically 6 to 18 months, and pays us a negotiated current fair, market price plus a carrying fee,
f
typically a percentage of the
acquisition cost.
Real property transactions or series of related transactions expected to result in capital expenditures greater than a
certain threshold, currently transactions of $45.8 million or greater, are approved by the Investment Committee and by the
independent members of our Board of Directors as set forth in our Third Amended and Restated Certific
f ate of Incorpor
r
ation
and the A&R Stockholder’s Agreement and in accordance with our Related Party Transaction Policy. Real property
transactions approved by the independent members of our Board of Directors do not require separate ratific
f ation by our
Nominating and Governance Committee under the terms of our Related Party Transaction Policy. Furthermore, under the
terms of the Third Amended and Restated Certific
f ate of Incorpor
r
ation and the A&R Stockholder’s Agreement, we require the
prior written consent of D.R. Horton to acquire any asset or similar acquisitions involving capital expenditures in excess of a
certain threshold, currently transactions of $45.8 million or greater.
At September 30, 2025, we owned or controlled through purchase contracts appr
a
oximately 99,800 residential lots, of
which appr
a
oximately 65,100 were owned and 34,700 were controlled through purchase contracts. Of our total owned
residential lots, approximately 22,800 are under contract to sell to D.R. Horton. Additionally, D.R. Horton has the right of
first offer on appr
a
oximately 17,600 of our owned residential lots based on executed purchase and sale agreements.
At September 30, 2025, we had earnest money deposits of appr
a
oximately $179.7 million fro
f
m D.R. Horton related to
land and lot purchase contracts.
During fiscal 2025, we sold 11,751 residential lots to D.R. Horton for
f
approximately $1.3 billion. In addition, during
fiscal 2025, we sold approximately 414 residential tract acres to D.R. Horton for $91.2 million and recognized $8.3 million of
other revenues fro
f
m transactions with D.R. Horton.
During fiscal 2025, we reimbursed D.R. Horton appr
a
oximately $20.6 million for
f
previously paid earnest money and
$26.5 million for pre-acquisition and other due diligence and development costs related to land purchase contracts identifie
f d
by D.R. Horton that we independently underwrote and closed. At September 30, 2025, we owed $2.2 million to D.R. Horton
for any accrued and unpaid shared service charges, land purchase contract deposits, due
d
diligence and other development cost
reimbursements and other intercompany transactions in the normal course of business. During fiscal 2025, we paid D.R.
Horton $0.4 million for
f
land development services. During fiscal 2025, we paid $0.1 million of fees to D.R. Horton's wholly-
owned title company and purchased $2.1 million of water rights fro
f
m D.R. Horton.
In addition, we lease office space fro
f
m D.R. Horton in various locations throughout the U.S. During fis
f cal 2025, we
paid D.R. Horton aggregate lease payments of approximately $0.4 million for
f
these spaces. During fiscal 2025, we
reimbursed D.R. Horton $1.2 million for
f
corporate and administrative expenses paid by D.R. Horton on behalf of the
Company.
58

The real property transactions described in this "Certain Relationships
i
and Related Party Transactions" section are
usual and customary r
r
eal property transactions for companies in the homebuilding and land development businesses. These
real property transactions are discussed in this section because D.R. Horton owned approximately 62% of our common stock
at November 24, 2025. Other than described and disclosed in this section, the individual executive officers or directors of the
Company and D.R. Horton have no beneficial interest in these real property transactions other than in their oversight or
employment capacity as offi
f cers or directors of their respective companies.
Empl
m oy
l
ment
Taylor Tomnitz, adult daughter of Donald J. Tomnitz, the Company's Executive Chairman, is employed by the
Company as a Marketing Associate in our Arlington offi
f ce. In fiscal 2025, Taylor Tomnitz earned cash compensation of
$111,001 and no equity compensation. Her compensation was consistent with the compensation provided to other employees
of the same level with similar responsibilities.
59

General Infor
f
mation
Time, Place and Purposes of Meeting
Our 2026 Annual Meeting will be held on Monday, January 19, 2026, at 12:00 p.m. Central Time, at our corporate
offi
f ces located at 2221 E. Lamar Blvd., Suite 790, Arlington Texas 76006. The purpos
r
es of the 2026 Annual Meeting are set
forth in the Notice of Annual Meeting of Stockholders.
Record Date
Holders of our common stock as of the close of business on November 24, 2025, the record date, may vote at the 2026
Annual Meeting, either in person or by proxy. At the close of business on November 24, 2025, 50,885,325 shares of our
common stock were outstanding and entitled to vote at the 2026 Annual Meeting. Common stock is our only authorized
voting security, and each share of our common stock is entitled to one vote on each matter properly brought before the
meeting. A list of stockholders as of the record date will be availabl
a e for
f
examination by any stockholder dur
d
ing ordinary
r
business hours at the offi
f ces of Forestar set for
f
th above for at least ten days befor
f
e the 2026 Annual Meeting.
Stockholders Sharing the Same Address
Any broker, bank or other nominee of any stockholder who is a benefic
f ial owner, but not the record holder, of the
Company’s common stock may deliver only one copy of this Proxy Statement and our Annual Report to multiple
stockholders sharing an address, unless the broker, bank or nominee has received contrary instructions from one or more of
the stockholders.
In addition, with respect to record holders, in some cases, only one copy of this Proxy Statement and our Annual
Report will be delivered to multiple stockholders sharing an address unless the Company has received contrary instructions
from one or more of the stockholders. Upon written or oral request, the Company will deliver promptly and fre
f e of charge a
separate copy of this Proxy Statement and our Annual Report to a stockholder at a shared address to which a single copy was
delivered. You can notify y
f
our broker, bank or other nominee (if you are not the record holder) or the Company (if you are
the record holder) that you wish to receive a separate copy of this Proxy Statement and our Annual Report in the future, or
alternatively, that you wish to receive a single copy of the materials instead of multiple copies. The Company’s contact
information for
f
these purpos
r
es is: Forestar Group Inc., 2221 E. Lamar Blvd., Suite 790, Arlington, Texas 76006, Attention:
Corporate Secretary; (817) 769-1860 or by email: InvestorRelations@for
f
estar.com.
Difference Between Holding Shares as a Stockholder of Record and as a Beneficial
Owner
If your shares are registered directly in your name with our transfer
f
agent, Computershare Trust Company, N.A., you
are considered the "stockholder of record" with respect to those shares, and this Proxy Statement and our Annual Report have
been sent directly to you.
If your shares are held in a stock brokerage account or by a bank or other nominee, those shares are held in "street
name" and you are considered the "beneficial owner" of the shares, and this Proxy Statement and our Annual Report have
been forwarded to you by your broker, bank or other nominee, who is the stockholder of record. You will receive separate
instructions from your broker, bank or other holder of record describing how to vote your shares.
60

Voting Your Shares
If you hold shares in your own name as a stockholder of record, you may cast your vote in one of four ways:
•
By Submitting a Proxy by Internet. You may subm
u
it a proxy via the internet 24 hours a day, 7 days a week on the
website www.proxyv
x
ote.com. To be valid, your proxy by internet must be received by 11:59 p.m., Eastern Time,
on January 18, 2026.
•
By Submitting a Proxy by Teleph
e
one. You may subm
u
it a proxy by telephone 24 hours a day, 7 days a week by
calling 1-800-690-6903. Follow the simple instructions provided by the recorded message. To be valid, your
proxy by telephone must be received by 11:59 p.m., Eastern Time, on January 18, 2026.
•
By Submitting a Proxy by Mail. If you wish to subm
u
it your proxy by mail, you must mark your proxy card, sign
and date it, and retur
t
n it in the prepaid envelope that has been provided or retur
t
n it to Vote Processing, c/o
Broadridge, 51 Mercedes Way, Edgewood, NY 11717. To be valid, your proxy by mail must be received prior to
the 2026 Annual Meeting.
•
At the Annual Meeting. You can vote your shares in person at the 2026 Annual Meeting.
If you are a beneficial owner of shares held in street name, your broker, bank or other nominee will provide you with
materials and instructions for voting your shares. The availabi
a lity of telephone or internet voting will depend on the voting
process of the institution holding your shares. Please check with your bank or broker and follow the voting procedures they
provide to vote your shares.
If you properly submit your proxy by one of these methods, and you do not subs
u
equently revoke your proxy, your
shares will be voted in accordance with your instructions.
If your shares are held in your own name as a stockholder of record and you return your signed proxy card or vote by
telephone or internet but do not specify a voting choice, your shares will be voted as follows:
•
FOR the election of all director nominees.
•
FOR the advisory vote on the approval of our executive compensation.
•
FOR ratific
f ation of the selection of Ernst & Young LLP as our independent registered public accounting fir
f m for
f
fiscal year 2026.
61

Voting in Person at the Annual Meeting
If you hold shares in your own name as a stockholder of record, you are invited to attend the 2026 Annual Meeting and
cast your vote at the meeting by properly completing and subm
u
itting a ballot at the meeting. If you are the beneficial owner of
shares held in the name of your broker, bank or other nominee, you are invited to attend the meeting in person, but to vote at
the meeting you must first obtain a legal proxy from your broker, bank or other nominee giving you the right to vote those
shares and submit that proxy along with a properly completed ballot at the meeting.
How You Can Change or Revoke Your Vote
If you hold shares in your own name as a stockholder of record, you may change your vote or revoke your proxy at any
time before voting begins at the 2026 Annual Meeting by:
•
giving written notice of revocation to our Corporate Secretary a
r
t any time before the voting begins;
•
signing and delivering a proxy that is dated after the proxy you wish to revoke;
•
attending the meeting and voting in person by properly completing and subm
u
itting a ballot; or
•
if you subm
u
itted a proxy by telephone or internet, by submitting a subsequent proxy by telephone or internet.
Attendance at the meeting, in and of itself, will not cause your previously granted proxy to be revoked unless you vote
at the meeting.
We must receive your notice of revocation or later-dated proxy at or prior to voting at the 2026 Annual Meeting for
f
it
to be effe
f ctive. It should be delivered to:
Forestar Group Inc.
2221 E. Lamar Blvd., Suite 790
Arlington, Texas 76006
Attention: Corporate Secretary
Alternatively, you may hand deliver a written revocation notice, or a later-dated proxy, to the Corpor
r
ate Secretary a
r
t
the meeting befor
f
e the voting begins.
If you are the beneficial owner of your shares held in street name and you wish to change your vote, please check with
your bank or broker and follow the procedur
d
es provided by them.
Quorum
The presence at the 2026 Annual Meeting, in person or by proxy, of holders of 25,442,663 shares (a majo
a rity of the
votes entitled to be cast by the stockholders entitled to vote as of the record date) is required to constitute a quorum
r
to
transact business at the meeting. Proxies marked "abs
a
tain" and broker "non-votes" (each of which are explained below) will
be counted in determining the presence of a quorum
r
.
If the shares present in person or represented by proxy at the annual meeting are not sufficient to constitute a quorum
r
,
the stockholders by a vote of the holders of a majority of the votes entitled to be cast by the stockholders, present in person or
by proxy at the meeting (which may be voted by the proxyholders at the meeting), may, without further notice to any
stockholder (unless a new record date is set or the adjournment is for
f
more than 30 days), adjo
d urn the meeting to a different
time and place to permit further solicitations of proxies suffic
f ient to constitute a quorum
r
. At any such adjo
d urned meeting at
which a quorum
r
may be present, any business may be transacted that might have been transacted at the meeting as originally
called.
62

Abstentions
An abstention occurs when a stockholder sends in a proxy with explicit instructions to decline to vote regarding a
particular proposal. An abs
a
tention with respect to each of Proposal 1, Proposal 2 and Proposal 3 will not be counted as a vote
"cast" for or against the proposal. Consequently, an abs
a
tention with respect to any such proposal scheduled for a vote at the
annual meeting will not affe
f ct the outcome of the vote.
Broker Non-Votes
Brokers holding shares must vote according to specific instruc
r
tions they receive from the beneficial owners of those
shares. If brokers do not receive specific instruc
r
tions, brokers may in some cases vote the shares in their discretion but are not
permitted to vote on certain proposals and may elect not to vote on any of the proposals unless you provide voting
instructions. If you do not provide voting instruc
r
tions and the broker elects to vote your shares on some but not all matters, it
will result in a broker "non-vote" for the matters on which the broker does not vote. A broker "non-vote" with respect to each
of Proposal 1, Proposal 2 and Proposal 3 will not be counted as a vote "cast" for or against the proposal. Consequently, a
broker "non-vote" with respect to any of these proposals will not affe
f ct the outcome of the vote.
Required Votes
Elect
l
io
t n of D
o
irector
t
sr
To elect a director nominee, the votes cast "for" that nominee must exceed the votes cast "against" that nominee. In
accordance with our Corporate Governance Guidelines, each incumbent nominee who does not receive the required vote for
f
election must tender his or her resignation to our Executive Chairman for
f
consideration by the Nominating and Governance
Committee of our Board of Directors. For more infor
f
mation on the operation of our majo
a rity voting standard, see "Proposal
No. 1 — Election of D
o
irectors." Stockholders may not cumulate votes in the election of directors.
Advi
d so
i
ry Appr
p
oval of the Com
C
pan
m
y’
n s E
’
xe
E
cutive Com
C
pe
m
nsatio
t n
To approve the non-binding resolution regarding approval of executive compensation, the "for" votes cast in fav
f
or of
the matter must exceed the "against" votes cast against the matter.
Ratific
f atio
t n of I
o
nd
I
ep
d
endent Audito
i rs
To ratify t
f
he appointment of our independent registered public accounting fir
f m, the "for" votes cast in fav
f
or of the
matter must exceed the "against" votes cast against the matter.
63

Proxy Solicitation
We are soliciting your proxy for the 2026 Annual Meeting and will pay all the costs of the proxy solicitation process.
Our directors, offi
f cers and employees may solicit the retur
t
n of proxies by personal contact, mail, electronic mail, facsimile,
telephone or the internet. We may also issue press releases asking for your vote or post letters or notices to you on our
website, www.for
f
estar.com. Our directors, offi
f cers and employees will not receive additional compensation for
f
such
solicitation, but will be reimbursed for
f
out-of-pocket expenses. We will request brokerage houses and other custodians,
nominees and fid
f uc
d
iaries to forward solicitation material to the beneficial owners of our common stock. We will reimburse
them for costs they incur in the solicitation.
64

Date for Receipt of Stockholder Proposals
Pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended, stockholders may present appropriate
proposals for
f
inclusion in our proxy statement and for consideration at our annual meeting of stockholders by subm
u
itting their
proposals to us in a timely manner. For a stockholder proposal to be considered for inclusion in our proxy statement for
f
our
2027 Annual Meeting, the proposal must be received by our Corporate Secretary b
r
y August 18, 2026 and must comply with
the requirements of Rul
R e 14a-8. Any stockholder proposal received afte
f r August 18, 2026 will not be considered for inclusion
in our 2027 Proxy Statement.
Our amended and restated bylaws contain an advance notice procedure with regard to items of business to be brought
before an annual meeting of stockholders by a stockholder. These procedur
d
es require that notice be made in writing to our
Corporate Secretary and the item of business must otherwise be a proper matter for
f
stockholder action. The notice must be
received at our executive offices not less than 75 days nor more than 100 days prior to the anniversary d
r
ate of the
immediately preceding annual meeting of stockholders. In the case of an annual meeting called for
f
a date more than 50 days
prior to the anniversary d
r
ate, notice must be received not later than the close of business on the 10th day following the date
on which notice of the annual meeting date is fir
f st mailed to stockholders or made public, whichever occurs first. Stockholder
proposals to be brought before our 2027 Annual Meeting and submitted outside the processes of Rul
R e 14a-8 will be
considered untimely if they are submitted befor
f
e October 11, 2026 or afte
f r November 5, 2026. Our amended and restated
bylaws require that the notice of the proposal contain certain information concerning the proposing stockholder and the
proposal.
Our amended and restated bylaws also contain an advance notice procedur
d
e for
f
the nomination of candidates for
f
election to the Board of Directors by stockholders. For a brief description of the nomination procedur
d
es, see "Proposal No. 1
— Election of D
o
irectors — Sel
S ection of D
o
irector Nominees." Director nominations to be brought by stockholders before our
2027 Annual Meeting will be considered untimely if they are submitted befor
f
e October 11, 2026 or afte
f r November 5, 2026.
In addition to satisfying the deadlines in the advance notice provisions of our bylaws, a shareholder who intends to solicit
proxies in suppor
u
t of nominees subm
u
itted under these advance notice provisions for the 2027 Annual Meeting must provide
the notice required under Rul
R e 14a-19 to the Corporate Secretary n
r
o later than November 20, 2026. In the event that the date
of the 2027 Annual Meeting is changed by more than 30 calendar days fro
f
m the anniversary d
r
ate of the 2026 Annual
Meeting, then notice must be provided not later than 60 calendar days prior to the date of the 2027 Annual Meeting or the
10th calendar day following the day on which public disclosure of the date of the 2027 Annual Meeting is fir
f st made by the
Company. The notice requirement under Rul
R e 14a-19 is in addition to the appl
a
icable advance notice requirements under our
bylaws as described above.
Voting Questions or Assistance
If you have any questions or require assistance with the voting process, please call 1-866-232-3037 (domestic) or
1-720-358-3640 (international).
Electronic Delivery of Proxy Materials
In an effo
f
rt to reduce paper mailed to your home and help lower printing and postage costs, we are offering
stockholders the convenience of viewing online proxy statements, annual reports and related materials. With your consent,
we can stop sending future pape
a
r copies of these documents. To elect this convenience, stockholders may fol
f low the
instructions when voting online at www.proxyv
x
ote.com. Following the 2026 Annual Meeting, you may continue to register for
electronic delivery o
r
f fut
f ur
t
e documents by visiting www-us.comput
m
ersh
r
are.com/in
/ vestor. If you own shares indirectly
through a broker, bank, or other nominee, please contact your financial institution for
f
additional infor
f
mation regarding
enrolling for
f
electronic delivery.
r
65

Requesting Documents from the Company
On our website at www.f
w or
f
estar.com under the "Investor Relations — Corporate Governance — Governance
Documents and Board Committees" sections, you will find the fol
f lowing: (i) Corporate Governance Guidelines, (ii)
Audit Committee Charter, (iii) Compensation Committee Charter, (iv) Nominating and Governance Committee
Charter, (v) Code of Ethics for
f
Senior Financial Officers, (vi) Complaint Procedures for Accounting, Internal Control,
Auditing and Financial Matters, (vii) Complaint Procedures for Employee Matters, (viii) Communications with the
Board of Directors, (ix) Human Rights Policy, (x) Environmental Policy, and (xi) Standards of Business Conduct and
Ethics. You may obtain a copy of any of these documents at no charge through our website or by contacting us for a
printed set. In addition, the 2026 Proxy Statement is available at https://www.forestar.com/investor-home/financial-
p
information/proxy-statements/defau
f
lt.aspx
p
y
p . Our Annual Report on Form 10-K for
f
2025, is available at https://
p
www.forestar.com/investor-home/financial-information/annual-reports/defau
f
lt.aspx
p
p . You may obtain a copy of any of
these documents at no charge through our website or by contacting us for
f
a printed set. The exhibits of the Annual
Report on Form 10-K are available upon payment of charges that approximate our cost of reproduction. You may
contact us for
f
these purposes at: Forestar Group Inc., 2221 E. Lamar Blvd., Suite 790, Arlington, Texas 76006,
Attention: Corporate Secretary.
66

Other Matters
Our Board of Directors knows of no other business that may properly be, or that is likely to be, brought before the
2026 Annual Meeting. If, however, any other business should be properly presented for consideration at the meeting,
including, among other things, consideration of a motion to adjourn the meeting to another time or place, the persons named
in the accompanying proxy will vote the proxy as in their discretion they may deem appropriate.
By Order of the Board of Directors
ANTHONY W. OXLEY
Presiden
d
t and Chief E
e
xe
E
cutive Off
O ic
f er
Arlington, Texas
December 16, 2025
67

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