Forestar Group (FOR) risk factors, FY2024 10-K

Risks Related to our Concentrated Ownership

1. 01Any 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
2. 02We 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
3. 03D.R. Horton's ability to control our Board may make it difficult for us to recruit independent directors
4. 04We 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

Risks Related to Our Business Operations

1. 05The homebuilding and lot development industries are cyclical and affected by changes in economic, real estate or other conditions that could adversely affect our business and financial results
2. 06Our business and financial results could be adversely affected by significant inflation, higher interest rates or deflation
3. 07Supply shortages and other risks related to acquiring land, materials and skilled labor and obtaining regulatory approval could increase our costs and delay lot deliveries
4. 08Public health issues such as a major epidemic or pandemic could adversely affect our business and financial results
5. 09Our business and financial results could be adversely affected by weather conditions and natural disasters
6. 10A health and safety incident relating to our operations could be costly in terms of potential liability and reputational damage
7. 11From time to time, we obtain performance bonds, the unavailability of which could adversely affect our results of operations and cash flows
8. 12Information technology failures, data security breaches, and the failure to satisfy privacy and data protection laws and regulations could harm our business
9. 13Governmental 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
10. 14There can be no assurance that our current business strategy will be successful
11. 15We may have continuing liabilities relating to assets that have been sold, which could adversely impact our results of operations
12. 16Our 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
13. 17Our real estate development operations are highly dependent upon national, regional and local homebuilders
14. 18Delays 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
15. 19Failure to succeed in new markets may limit our growth
16. 20We plan to raise additional capital in the future, and such capital may not be available when needed or at all
17. 21The 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

Risks Related to Our Indebtedness

1. 22We 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
2. 23Dependence on Future Performance
3. 24Risks of Variable Rate Debt
4. 25Change of Control Purchase Option and Change of Control Default
5. 26Our 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
6. 27In 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
7. 28The market price of and trading volume of our shares of common stock may be volatile
8. 29Our business may suffer if we lose key personnel