The accounting policies of the reporting segments are described throughout Note A included in the Company’s annual report on Form 10-K for the fiscal year ended September 30, 2017. Financial information relating to the Company’s reporting segments is as follows:



	March 31, 2018
	Homebuilding		Forestar (1)		Financial Services		Other (2)		Eliminations (3)			Other Adjustments (4)			Consolidated
	(In millions)
Assets
Cash and cash equivalents	$	528.9	$	436.4	$	29.1	$	16.4	$	—		$	—		$	1,010.8
Restricted cash	9.4		40.0		6.0		—		—			—			55.4
Inventories:
Construction in progress and finished homes	5,119.6		—		—		—		—			—			5,119.6
Residential land and lots — developed and under development	4,595.2		261.7		—		—		2.4			40.7			4,900.0
Land held for development	86.6		—		—		—		—			—			86.6
Land held for sale	38.2		—		—		—		—			—			38.2
	9,839.6		261.7		—		—		2.4			40.7			10,144.4
Investment in unconsolidated entities	—		17.3		—		—		—			14.8			32.1
Mortgage loans held for sale	—		—		658.2		—		—			—			658.2
Deferred income taxes	218.2		1.4		—		—		—			0.3			219.9
Property and equipment, net	204.8		1.8		3.0		170.8		—			—			380.4
Other assets	543.6		22.5		42.0		3.9		(23.0		)	18.7			607.7
Goodwill	80.0		—		—		—		—			29.2			109.2
	$	11,424.5	$	781.1	$	738.3	$	191.1	$	(20.6	)	$	103.7		$	13,218.1
Liabilities
Accounts payable	$	568.9	$	2.1	$	3.0	$	8.7	$	—		$	—		$	582.7
Accrued expenses and other liabilities	967.9		59.2		35.6		15.2		(23.0		)	(25.3		)	1,029.6
Notes payable	2,623.1		109.8		489.8		—		—			11.2			3,233.9
	$	4,159.9	$	171.1	$	528.4	$	23.9	$	(23.0	)	$	(14.1	)	$	4,846.2

______________


(1)	Results are presented on Forestar’s historical cost basis, consistent with the manner in which management evaluates segment performance. All purchase accounting adjustments are included in the Other Adjustments column.


(2)	Amounts represent the aggregate balances of certain subsidiaries that are immaterial for separate reporting.


(3)	Amounts represent the elimination of intercompany transactions with Forestar and the reclassification of Forestar interest expense to inventory.


(4)	Amounts represent purchase accounting adjustments related to the Forestar acquisition.



	September 30, 2017
	Homebuilding		Financial Services		Other (1)		Consolidated
	(In millions)
Assets
Cash and cash equivalents	$	973.0	$	24.1	$	10.7	$	1,007.8
Restricted cash	9.3		7.2		—		16.5
Inventories:
Construction in progress and finished homes	4,606.0		—		—		4,606.0
Residential land and lots — developed and under development	4,519.7		—		—		4,519.7
Land held for development	101.0		—		—		101.0
Land held for sale	10.4		—		—		10.4
	9,237.1		—		—		9,237.1
Mortgage loans held for sale	—		587.3		—		587.3
Deferred income taxes	365.0		—		—		365.0
Property and equipment, net	194.4		3.0		127.6		325.0
Other assets	518.7		42.2		5.0		565.9
Goodwill	80.0		—		—		80.0
	$	11,377.5	$	663.8	$	143.3	$	12,184.6
Liabilities
Accounts payable	$	575.6	$	1.5	$	3.3	$	580.4
Accrued expenses and other liabilities	933.1		35.6		16.3		985.0
Notes payable	2,451.6		420.0		—		2,871.6
	$	3,960.3	$	457.1	$	19.6	$	4,437.0

______________


(1)	Amounts represent the aggregate balances of certain subsidiaries that are immaterial for separate reporting.



	Three Months Ended March 31, 2018
	Homebuilding			Forestar (1)			Financial Services			Other (2)			Eliminations (3)			Other Adjustments (4)			Consolidated
	(In millions)
Revenues:
Home sales	$	3,672.1		$	—		$	—		$	—		$	—		$	—		$	3,672.1
Land/lot sales and other	13.6			22.6			—			—			(8.5		)	—			27.7
Financial services	—			—			94.9			—			—			—			94.9
	3,685.7			22.6			94.9			—			(8.5		)	—			3,794.7
Cost of sales:
Home sales	2,907.5			—			—			—			—			—			2,907.5
Land/lot sales and other	12.0			16.2			—			—			(6.7		)	2.5			24.0
Inventory and land option charges	30.1			—			—			—			—			—			30.1
	2,949.6			16.2			—			—			(6.7		)	2.5			2,961.6
Selling, general and administrative expense	322.7			5.6			66.7			5.8			—			0.1			400.9
Equity in earnings of unconsolidated entities	—			(1.5		)	—			—			—			1.1			(0.4		)
Gain on sale of assets	—			(2.7		)	—			—			—			1.6			(1.1		)
Interest expense	—			2.1			—			—			(2.1		)	—			—
Other (income) expense	(2.6		)	(1.7		)	(3.2		)	(3.6		)	—			—			(11.1		)
Income (loss) before income taxes	$	416.0		$	4.6		$	31.4		$	(2.2	)	$	0.3		$	(5.3	)	$	444.8

______________


(1)	Results are presented on Forestar’s historical cost basis, consistent with the manner in which management evaluates segment performance. All purchase accounting adjustments are included in the Other Adjustments column.


(2)	Amounts represent the aggregate results of certain subsidiaries that are immaterial for separate reporting.


(3)	Amounts represent the elimination of intercompany transactions with Forestar and the reclassification of Forestar interest expense to inventory.


(4)	Amounts represent purchase accounting adjustments related to the Forestar acquisition.



	Six Months Ended March 31, 2018
	Homebuilding			Forestar (1)			Financial Services			Other (2)			Eliminations (3)			Other Adjustments (4)			Consolidated
	(In millions)
Revenues:
Home sales	$	6,856.6		$	—		$	—		$	—		$	—		$	—		$	6,856.6
Land/lot sales and other	50.0			53.5			—			—			(8.5		)	—			95.0
Financial services	—			—			176.0			—			—			—			176.0
	6,906.6			53.5			176.0			—			(8.5		)	—			7,127.6
Cost of sales:
Home sales	5,429.0			—			—			—			—			—			5,429.0
Land/lot sales and other	43.3			35.5			—			—			(6.7		)	6.9			79.0
Inventory and land option charges	33.8			—			—			—			—			—			33.8
	5,506.1			35.5			—			—			(6.7		)	6.9			5,541.8
Selling, general and administrative expense	627.5			19.1			128.4			9.8			—			0.3			785.1
Equity in earnings of unconsolidated entities	—			(9.1		)	—			—			—			6.4			(2.7		)
Gain on sale of assets	(13.4		)	(2.7		)	—			—			—			1.6			(14.5		)
Interest expense	—			4.2			—			—			(4.2		)	—			—
Other (income) expense	(3.4		)	(2.2		)	(6.1		)	(6.5		)	—			—			(18.2		)
Income (loss) before income taxes	$	789.8		$	8.7		$	53.7		$	(3.3	)	$	2.4		$	(15.2	)	$	836.1
Summary Cash Flow Information:
Depreciation and amortization	$	26.3		$	2.5		$	0.7		$	3.3		$	—		$	0.3		$	33.1
Cash provided by (used in) operating activities	$	90.7		$	(150.2	)	$	(30.7	)	$	(0.5	)	$	—		$	(8.1	)	$	(98.8	)

______________


(1)	Results are presented from the date of acquisition and on Forestar’s historical cost basis, consistent with the manner in which management evaluates segment performance. All purchase accounting adjustments are included in the Other Adjustments column.


(2)	Amounts represent the aggregate results of certain subsidiaries that are immaterial for separate reporting.


(3)	Amounts represent the elimination of intercompany transactions with Forestar and the reclassification of Forestar interest expense to inventory.


(4)	Amounts represent purchase accounting adjustments related to the Forestar acquisition.



	Three Months Ended March 31, 2017
	Homebuilding			Financial Services			Other (1)			Consolidated
	(In millions)
Revenues:
Home sales	$	3,158.1		$	—		$	—		$	3,158.1
Land/lot sales and other	6.3			—			—			6.3
Financial services	—			86.9			—			86.9
	3,164.4			86.9			—			3,251.3
Cost of sales:
Home sales	2,532.1			—			—			2,532.1
Land/lot sales and other	5.6			—			—			5.6
Inventory and land option charges	12.2			—			—			12.2
	2,549.9			—			—			2,549.9
Selling, general and administrative expense	294.5			58.2			2.5			355.2
Other (income) expense	(2.4		)	(3.5		)	(1.8		)	(7.7		)
Income (loss) before income taxes	$	322.4		$	32.2		$	(0.7	)	$	353.9



	Six Months Ended March 31, 2017
	Homebuilding			Financial Services			Other (1)			Consolidated
	(In millions)
Revenues:
Home sales	$	5,955.8		$	—		$	—		$	5,955.8
Land/lot sales and other	34.7			—			—			34.7
Financial services	—			165.0			—			165.0
	5,990.5			165.0			—			6,155.5
Cost of sales:
Home sales	4,776.9			—			—			4,776.9
Land/lot sales and other	26.4			—			—			26.4
Inventory and land option charges	14.5			—			—			14.5
	4,817.8			—			—			4,817.8
Selling, general and administrative expense	562.9			112.9			5.2			681.0
Other (income) expense	(6.5		)	(6.7		)	(2.2		)	(15.4		)
Income (loss) before income taxes	$	616.3		$	58.8		$	(3.0	)	$	672.1
Summary Cash Flow Information:
Depreciation and amortization	$	25.0		$	0.7		$	1.6		$	27.3
Cash (used in) provided by operating activities	$	(240.4	)	$	108.6		$	(3.9	)	$	(135.7	)

______________


(1)	Amounts represent the aggregate results of certain subsidiaries that are immaterial for separate reporting.



Homebuilding Inventories by Reporting Segment (1)	March 31, 2018		September 30, 2017
	(In millions)
East	$	1,188.2	$	1,068.9
Midwest	545.6		492.6
Southeast	2,597.3		2,392.3
South Central	2,326.2		2,199.4
Southwest	536.9		506.1
West	2,415.9		2,352.5
Corporate and unallocated (2)	229.5		225.3
	$	9,839.6	$	9,237.1

_____________________________


(1)	Homebuilding inventories are the only assets included in the measure of homebuilding segment assets used by the Company’s chief operating decision makers.


(2)	Corporate and unallocated consists primarily of capitalized interest and property taxes.



Homebuilding Results by Reporting Segment	Three Months Ended March 31,				Six Months Ended March 31,
	2018		2017		2018		2017
	(In millions)
Revenues
East	$	435.8	$	372.6	$	828.9	$	678.6
Midwest	203.6		168.7		365.0		319.8
Southeast	1,042.0		969.0		2,030.6		1,852.4
South Central	919.0		815.4		1,727.8		1,572.3
Southwest	172.1		126.7		328.5		235.2
West	913.2		712.0		1,625.8		1,332.2
	$	3,685.7	$	3,164.4	$	6,906.6	$	5,990.5
Inventory and Land Option Charges (1)
East	$	0.7	$	6.2	$	0.6	$	6.5
Midwest	0.2		0.2		0.4		0.3
Southeast	25.1		0.9		26.2		1.6
South Central	0.6		1.6		1.9		1.9
Southwest	—		0.1		0.8		0.1
West	3.5		3.2		3.9		4.1
	$	30.1	$	12.2	$	33.8	$	14.5
Income before Income Taxes (2)
East	$	46.7	$	25.9	$	91.7	$	52.2
Midwest	18.7		0.7		32.0		10.9
Southeast	96.3		113.1		218.8		212.7
South Central	120.5		105.8		222.0		202.3
Southwest	22.0		7.2		36.7		11.2
West	111.8		69.7		188.6		127.0
	$	416.0	$	322.4	$	789.8	$	616.3

_____________________________


(1)	To conform to the current year presentation, prior period amounts include earnest money and pre-acquisition cost write-offs.

(2)

Expenses maintained at the corporate level consist primarily of interest and property taxes, which are capitalized and amortized to cost of sales or expensed directly, and the expenses related to operating the Company’s corporate office. The amortization of capitalized interest and property taxes is allocated to each segment based on the segment’s cost of sales, while expenses associated with the corporate office are allocated to each segment based on the segment’s inventory balances.