Segment Information (Tables)

9 Months Ended

Jun. 30, 2019

Segment Reporting Information [Line Items]

Schedule of segment reporting information, by segment

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, 2018. Financial information relating to the Company’s reporting segments is as follows:

	June 30, 2019
	Homebuilding		Forestar (1)		Financial Services		Other (2)		Eliminations (3)			Other Adjustments (4)			Consolidated
	(In millions)
Assets
Cash and cash equivalents	$	577.9	$	223.0	$	44.7	$	18.6	$	—		$	—		$	864.2
Restricted cash	9.8		0.2		11.1		—		—			—			21.1
Inventories:
Construction in progress and finished homes	5,723.5		—		—		—		(0.9		)	—			5,722.6
Residential land and lots — developed and under development	4,847.4		988.7		—		—		(27.6		)	2.9			5,811.4
Land held for development	64.9		60.8		—		—		—			—			125.7
Land held for sale	42.6		—		—		—		—			—			42.6
	10,678.4		1,049.5		—		—		(28.5		)	2.9			11,702.3
Mortgage loans held for sale	—		—		954.9		—		—			—			954.9
Deferred income taxes, net	154.4		21.0		—		—		3.7			(5.2		)	173.9
Property and equipment, net	234.2		2.4		3.2		214.4		—			—			454.2
Other assets	824.2		29.1		67.7		40.2		(83.0		)	11.7			889.9
Goodwill	134.3		—		—		—		—			29.2			163.5
	$	12,613.2	$	1,325.2	$	1,081.6	$	273.2	$	(107.8	)	$	38.6		$	15,224.0
Liabilities
Accounts payable	$	640.6	$	19.5	$	18.4	$	3.4	$	(0.7	)	$	—		$	681.2
Accrued expenses and other liabilities	1,155.8		151.5		56.9		19.7		(93.7		)	(12.7		)	1,277.5
Notes payable	2,191.3		458.9		796.5		—		—			3.9			3,450.6
	$	3,987.7	$	629.9	$	871.8	$	23.1	$	(94.4	)	$	(8.8	)	$	5,409.3

______________

(1) Amounts 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.

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

	September 30, 2018
	Homebuilding		Forestar (1)		Financial Services		Other (2)		Eliminations (3)			Other Adjustments (4)			Consolidated
	(In millions)
Assets
Cash and cash equivalents	$	1,111.8	$	318.8	$	33.7	$	8.8	$	—		$	—		$	1,473.1
Restricted cash	8.6		16.2		8.1		—		—			—			32.9
Inventories:
Construction in progress and finished homes	5,084.4		—		—		—		1.9			—			5,086.3
Residential land and lots — developed and under development	4,689.3		463.1		—		—		(7.2		)	27.2			5,172.4
Land held for development	61.2		34.9		—		—		—			—			96.1
Land held for sale	40.2		—		—		—		—			—			40.2
	9,875.1		498.0		—		—		(5.3		)	27.2			10,395.0
Mortgage loans held for sale	—		—		796.4		—		—			—			796.4
Deferred income taxes, net	176.5		26.9		—		—		1.1			(10.5		)	194.0
Property and equipment, net	207.1		1.8		3.0		189.2		—			—			401.1
Other assets	673.7		31.4		43.6		0.9		(48.6		)	11.9			712.9
Goodwill	80.0		—		—		—		—			29.2			109.2
	$	12,132.8	$	893.1	$	884.8	$	198.9	$	(52.8	)	$	57.8		$	14,114.6
Liabilities
Accounts payable	$	612.4	$	11.2	$	0.2	$	4.2	$	(3.3	)	$	—		$	624.7
Accrued expenses and other liabilities	1,041.3		95.7		41.9		9.9		(46.1		)	(15.2		)	1,127.5
Notes payable	2,445.9		111.7		637.7		—		—			8.2			3,203.5
	$	4,099.6	$	218.6	$	679.8	$	14.1	$	(49.4	)	$	(7.0	)	$	4,955.7

______________

(1) Amounts 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 and the reclassification of Forestar interest expense to inventory.

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

	Three Months Ended June 30, 2019
	Homebuilding			Forestar (1)			Financial Services			Other (2)			Eliminations (3)			Other Adjustments (4)			Consolidated
	(In millions)
Revenues:
Home sales	$	4,734.6		$	—		$	—		$	—		$	—		$	—		$	4,734.6
Land/lot sales and other	27.5			88.2			—			9.6			(73.2		)	—			52.1
Financial services	—			—			119.6			—			—			—			119.6
	4,762.1			88.2			119.6			9.6			(73.2		)	—			4,906.3
Cost of sales:
Home sales (5)	3,773.0			—			—			—			(1.3		)	—			3,771.7
Land/lot sales and other	23.2			75.3			—			—			(66.0		)	8.2			40.7
Inventory and land option charges	19.2			—			—			—			—			—			19.2
	3,815.4			75.3			—			—			(67.3		)	8.2			3,831.6
Selling, general and administrative expense	387.4			7.9			76.4			8.2			—			0.1			480.0
Gain on sale of assets	—			(1.5		)	—			(22.6		)	—			1.5			(22.6		)
Other (income) expense	(2.5		)	(1.9		)	(4.9		)	(0.1		)	—			—			(9.4		)
Income before income taxes	$	561.8		$	8.4		$	48.1		$	24.1		$	(5.9	)	$	(9.8	)	$	626.7

______________

(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.

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

(5) Amount in the Eliminations column represents the profit on lots sold from Forestar to the homebuilding segment. Intercompany profit is eliminated in the consolidated financial statements when Forestar sells lots to the homebuilding segment and is recognized in the consolidated financial statements when the homebuilding segment closes homes on the lots to homebuyers.

	Nine Months Ended June 30, 2019
	Homebuilding			Forestar (1)			Financial Services			Other (2)			Eliminations (3)			Other Adjustments (4)			Consolidated
	(In millions)
Revenues:
Home sales	$	12,125.8		$	—		$	—		$	—		$	—		$	—		$	12,125.8
Land/lot sales and other	49.2			192.0			—			22.4			(141.8		)	—			121.8
Financial services	—			—			306.4			—			—			—			306.4
	12,175.0			192.0			306.4			22.4			(141.8		)	—			12,554.0
Cost of sales:
Home sales (5)	9,716.5			—			—			—			(3.1		)	—			9,713.4
Land/lot sales and other	37.6			149.6			—			—			(122.2		)	20.0			85.0
Inventory and land option charges	41.0			—			—			—			—			—			41.0
	9,795.1			149.6			—			—			(125.3		)	20.0			9,839.4
Selling, general and administrative expense	1,071.4			19.8			213.4			22.1			—			0.3			1,327.0
Gain on sale of assets	(2.0		)	(2.4		)	—			(51.9		)	—			2.4			(53.9		)
Other (income) expense	(6.1		)	(4.6		)	(12.6		)	(0.4		)	—			—			(23.7		)
Income before income taxes	$	1,316.6		$	29.6		$	105.6		$	52.6		$	(16.5	)	$	(22.7	)	$	1,465.2
Summary Cash Flow Information:
Depreciation and amortization	$	46.4		$	0.2		$	1.1		$	4.3		$	—		$	0.4		$	52.4
Cash provided by (used in) operating activities	$	605.7		$	(450.1	)	$	(65.5	)	$	(2.5	)	$	(2.5	)	$	(4.4	)	$	80.7

______________

(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.

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

(5) Amount in the Eliminations column represents the profit on lots sold from Forestar to the homebuilding segment. Intercompany profit is eliminated in the consolidated financial statements when Forestar sells lots to the homebuilding segment and is recognized in the consolidated financial statements when the homebuilding segment closes homes on the lots to homebuyers.

	Three Months Ended June 30, 2018
	Homebuilding			Forestar (1)			Financial Services			Other (2)			Eliminations (3)			Other Adjustments (4)			Consolidated
	(In millions)
Revenues:
Home sales	$	4,265.5		$	—		$	—		$	—		$	—		$	—		$	4,265.5
Land/lot sales and other	59.1			23.6			—			—			(8.8		)	(1.2		)	72.7
Financial services	—			—			97.1			—			—			—			97.1
	4,324.6			23.6			97.1			—			(8.8		)	(1.2		)	4,435.3
Cost of sales:
Home sales	3,332.8			—			—			—			—			—			3,332.8
Land/lot sales and other	45.4			10.0			—			—			(5.6		)	5.7			55.5
Inventory and land option charges	8.9			—			—			—			—			—			8.9
	3,387.1			10.0			—			—			(5.6		)	5.7			3,397.2
Selling, general and administrative expense	349.1			6.5			71.1			8.1			—			0.1			434.9
Gain on sale of assets	—			(1.3		)	—			—			—			1.3			—
Interest expense	—			1.6			—			—			(1.6		)	—			—
Other (income) expense	(1.3		)	(3.7		)	(4.3		)	(5.0		)	—			1.3			(13.0		)
Income (loss) before income taxes	$	589.7		$	10.5		$	30.3		$	(3.1	)	$	(1.6	)	$	(9.6	)	$	616.2

______________

(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 results of certain subsidiaries that are immaterial for separate reporting.

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

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

	Nine Months Ended June 30, 2018
	Homebuilding			Forestar (1)			Financial Services			Other (2)			Eliminations (3)			Other Adjustments (4)			Consolidated
	(In millions)
Revenues:
Home sales	$	11,122.1		$	—		$	—		$	—		$	—		$	—		$	11,122.1
Land/lot sales and other	109.2			77.0			—			—			(17.3		)	(1.2		)	167.7
Financial services	—			—			273.1			—			—			—			273.1
	11,231.3			77.0			273.1			—			(17.3		)	(1.2		)	11,562.9
Cost of sales:
Home sales	8,761.7			—			—			—			—			—			8,761.7
Land/lot sales and other	88.7			45.5			—			—			(12.3		)	12.6			134.5
Inventory and land option charges	42.8			—			—			—			—			—			42.8
	8,893.2			45.5			—			—			(12.3		)	12.6			8,939.0
Selling, general and administrative expense	976.6			25.6			199.6			17.8			—			0.3			1,219.9
Gain on sale of assets	(13.4		)	(4.0		)	—			—			—			2.9			(14.5		)
Interest expense	—			5.8			—			—			(5.8		)	—			—
Other (income) expense	(4.6		)	(15.0		)	(10.5		)	(11.4		)	—			7.7			(33.8		)
Income (loss) before income taxes	$	1,379.5		$	19.1		$	84.0		$	(6.4	)	$	0.8		$	(24.7	)	$	1,452.3
Summary Cash Flow Information:
Depreciation and amortization	$	39.8		$	0.2		$	1.0		$	5.2		$	—		$	0.4		$	46.6
Cash provided by (used in) operating activities	$	565.2		$	(219.2	)	$	(27.0	)	$	(4.4	)	$	—		$	(8.1	)	$	306.5

______________

(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 and the reclassification of Forestar interest expense to inventory.

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

Homebuilding Inventories by Reporting Segment (1)	June 30, 2019		September 30, 2018
	(In millions)
East	$	1,300.8	$	1,192.0
Midwest	818.5		583.1
Southeast	2,733.1		2,668.7
South Central	2,660.5		2,439.4
Southwest	606.2		499.7
West	2,325.7		2,268.5
Corporate and unallocated (2)	233.6		223.7
	$	10,678.4	$	9,875.1

_________________

(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   June 30,				Nine Months Ended   June 30,
	2019		2018		2019		2018
	(In millions)
Revenues
East	$	675.2	$	529.1	$	1,640.9	$	1,357.9
Midwest	303.3		256.7		800.5		621.7
Southeast	1,388.1		1,263.3		3,607.2		3,293.9
South Central	1,178.0		1,005.4		3,040.8		2,733.2
Southwest	240.6		220.1		557.5		548.6
West	976.9		1,050.0		2,528.1		2,676.0
	$	4,762.1	$	4,324.6	$	12,175.0	$	11,231.3
Inventory and Land Option Charges
East	$	0.6	$	0.3	$	2.3	$	0.9
Midwest	1.3		4.3		1.8		4.7
Southeast	5.1		1.1		8.6		27.3
South Central	3.0		1.5		4.9		3.5
Southwest	0.3		—		0.5		0.8
West	8.9		1.7		22.9		5.6
	$	19.2	$	8.9	$	41.0	$	42.8
Income before Income Taxes (1)
East	$	74.1	$	67.1	$	158.0	$	158.7
Midwest	18.7		23.0		38.8		55.0
Southeast	168.4		156.1		411.6		374.9
South Central	164.3		143.3		389.6		365.2
Southwest	33.5		32.3		69.8		69.1
West	102.8		167.9		248.8		356.6
	$	561.8	$	589.7	$	1,316.6	$	1,379.5

_________________

(1)

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 homebuilding segment based on the segment’s cost of sales, while expenses associated with the corporate office are allocated to each homebuilding segment based on the segment’s inventory balances.