Inventory (Tables)

9 Months Ended

Jun. 30, 2013



(In thousands)	June 30, 2013		September 30, 2012
Homes under construction	$	324,619	$	251,828
Development projects in progress	498,363		391,019
Land held for future development	341,995		367,102
Land held for sale	10,648		10,149
Capitalized interest	50,019		38,190
Model homes	39,468		40,844
Total owned inventory	$	1,265,112	$	1,099,132

Schedule of Total Owned Inventory, by Segment

Total owned inventory, by reportable segment, is set forth in the table below:



(In thousands)	Projects in Progress		Held for Future Development		Land Held for Sale		Total Owned Inventory
June 30, 2013
West Segment	$	335,239	$	292,881	$	3,639	$	631,759
East Segment	325,765		25,493		2,195		353,453
Southeast Segment	173,784		23,621		2,096		199,501
Unallocated and Other	77,681		—		2,718		80,399
Total	$	912,469	$	341,995	$	10,648	$	1,265,112
September 30, 2012
West Segment	$	261,239	$	318,351	$	2,553	$	582,143
East Segment	279,954		25,130		3,204		308,288
Southeast Segment	118,853		23,621		1,675		144,149
Unallocated and Other	61,835		—		2,717		64,552
Total	$	721,881	$	367,102	$	10,149	$	1,099,132

Recoverability Schedule of Inventory assets Held for Development, by Reportable Segment

The following tables represent the results, by reportable segment, of our community level review of the recoverability of our inventory assets held for development as of June 30, 2012. We have elected to aggregate our disclosure at the reportable segment level because we believe this level of disclosure is most meaningful to the readers of our financial statements. The aggregate undiscounted cash flow fair value as a percentage of book value for the communities represented below is consistent with our expectations given our “watch list” methodology.



($ in thousands)		Undiscounted Cash Flow Analyses Prepared
Segment	# of Communities on Watch List	# of Communities	Pre-analysis Book Value (BV)		Aggregate Undiscounted Cash Flow as a % of BV
Quarter Ended June 30, 2012
West	5	1	$	6,196	81.3	%
East	4	1	7,144		57.1	%
Southeast	3	1	3,087		79.0	%
Unallocated	—	—	1,228		n/a
Total	12	3	$	17,655	72.4	%

Summary of Discounted Cash Flow Analysis

The table below summarizes the results of our discounted cash flow analysis for the three and nine months ended June 30, 2012. The impairment charges below include impairments taken as a result of these discounted cash flow analyses and impairment charges recorded for individual homes sold and in backlog with net contribution margins below a minimum threshold of profitability in communities that were not otherwise impaired through our discounted cash flow analyses. The estimated fair value of the impaired inventory is determined immediately after a community’s impairment.



($ in thousands)	Communities Impaired As a Result of Discounted Cash Flow Analyses Prepared
Segment	# of Communities Impaired	# of Lots Impaired	Impairment Charge		Estimated Fair Value of Impaired Inventory at Period End		# of Communities Impaired	# of Lots Impaired	Impairment Charge		Estimated Fair Value of Impaired Inventory at Period End
Quarter Ended June 30, 2012							Nine Months Ended June 30, 2012
West	1	65	$	1,590	$	4,680	2	116	$	3,788	$	11,058
East	1	68	3,122		4,050		2	93	3,809		7,342
Southeast	1	37	630		2,457		1	37	794		2,457
Unallocated	—	—	389		—		—	—	473		—
Continuing Operations	3	170	$	5,731	$	11,187	5	246	8,864		20,857
Discontinued Operations	—	—	42		—		—	—	60		—
Total	3	170	$	5,773	$	11,187	5	246	$	8,924	$	20,857

Schedule of Inventory Impairments and Lot Option Abandonment Charges, by Reportable Homebuilding Segment

The following table sets forth, by reportable homebuilding segment, the inventory impairments and lot option abandonment charges recorded for the three and nine months ended June 30, 2013 and 2012, as applicable:



	Three Months Ended June 30,				Nine Months Ended June 30,
(In thousands)	2013		2012		2013		2012
Development projects and homes in process (Held for Development)
West	$	—	$	1,590	$	46	$	3,788
East	—		3,122		13		3,809
Southeast	—		630		—		794
Unallocated	—		389		—		473
Subtotal	$	—	$	5,731	$	59	$	8,864
Land Held for Sale
West	$	—	$	—	$	—	$	—
East	—		—		—		—
Southeast	—		—		1,778		208
Subtotal	$	—	$	—	$	1,778	$	208
Lot Option Abandonments
West	$	—	$	19	$	104	$	191
East	—		10		20		574
Southeast	—		59		268		653
Unallocated	—		—		—		2
Subtotal	$	—	$	88	$	392	$	1,420
Continuing Operations	$	—	$	5,819	$	2,229	$	10,492
Discontinued Operations
Held for Development	$	—	$	42	$	—	$	60
Land Held for Sale	—		503		17		503
Lot Option Abandonments	—		—		—		16
Subtotal	$	—	$	545	$	17	$	579
Total Company	$	—	$	6,364	$	2,246	$	11,071

Summary of Interests in Lot Option Agreements

The following provides a summary of our interests in lot option agreements as of June 30, 2013 and September 30, 2012:



(In thousands)	Deposits & Non-refundable Preacquisition Costs Incurred		Remaining Obligation		Land Not Owned Under Option Agreements
As of June 30, 2013
Consolidated VIEs	$	4,900	$	2,649	$	7,549
Other consolidated lot option agreements (a)	76		255		331
Unconsolidated lot option agreements	25,323		281,739		—
Total lot option agreements	$	30,299	$	284,643	$	7,880
As of September 30, 2012
Consolidated VIEs	$	7,203	$	3,346	$	10,549
Other consolidated lot option agreements (a)	430		1,441		1,871
Unconsolidated lot option agreements	17,290		193,711		—
Total lot option agreements	$	24,923	$	198,498	$	12,420


(a)	Represents lot option agreements with non-VIE entities that we have deemed to be “financing arrangements” pursuant to ASC 470-40, Product Financing Arrangements.