Forestar Group Inc.FOR

Forestar Group Inc. Fair Value Disclosure

10-KFiled Nov 19, 20252 min read
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 ValueLevel 1Level 2Level 3Total
 (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 ValueLevel 1Level 2 Level 3Total
(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.

Historical Timeline

Fiscal YearFiled
2025Nov 19, 2025Showing above
2024Nov 19, 2024
2023Nov 17, 2023
2022Nov 17, 2022
2021Nov 18, 2021
2020Nov 19, 2020
2019Nov 21, 2019
2017Feb 28, 2018
2016Mar 3, 2017
2015Mar 4, 2016

About Fair Value Disclosures

Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.

Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.

Other Available Disclosures

Income TaxesRevenueEarnings Per SharePP&EGoodwill & IntangiblesSegmentsDebtCommitmentsStock CompensationNew StandardsPay vs Performance