Inventory (Tables)

12 Months Ended

Sep. 30, 2013



(In thousands)	September 30, 2013		September 30, 2012
Homes under construction	$	262,476	$	251,828
Development projects in progress	578,453		391,019
Land held for future development	341,986		367,102
Land held for sale	31,331		10,149
Capitalized interest	52,562		38,190
Model homes	37,886		40,844
Total owned inventory	$	1,304,694	$	1,099,132

Schedule of Total Owned Inventory, by Segment

Total owned inventory, by reportable segment, is set forth in the table below. Inventory located in California, the state with our largest concentration of inventory, was $388.1 million and $350.9 million at September 30, 2013 and 2012, respectively.



(In thousands)	Projects in Progress		Held for Future Development		Land Held for Sale		Total Owned Inventory
September 30, 2013
West Segment	$	339,319	$	292,875	$	16,572	$	648,766
East Segment	331,894		25,491		3,833		361,218
Southeast Segment	178,624		23,620		8,208		210,452
Unallocated & Other	81,540		—		2,718		84,258
Total	$	931,377	$	341,986	$	31,331	$	1,304,694
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 & 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 September 30, 2013, 2012 and 2011. 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
Year Ended September 30, 2013
West	1	1	$	11,080	117.6	%
East	3	3	9,588		107.0	%
Southeast	1	1	5,257		128.6	%
Unallocated	—	—	1,755		100.0	%
Total	5	5	$	27,680	114.9	%

Year Ended September 30, 2012
West	14	8	$	28,467	94.7	%
East	12	8	30,052		91.8	%
Southeast	5	3	9,247		116.5	%
Unallocated	—	—	5,193		100.0	%
Total	31	19	$	72,959	96.7	%

Year Ended September 30, 2011
West	18	15	$	58,848	88.4	%
East	7	5	16,436		94.6	%
Southeast	4	3	11,017		60.3	%
Unallocated	1	—	9,707		100.0	%
Total	30	23	$	96,008	87.7	%

Summary of Discounted Cash Flow Analysis

The table below summarizes the results of our discounted cash flow analysis for the fiscal years ended September 30, 2012 and 2011. The impairment charges below include impairments taken as a result of these discounted cash flow analyses and also 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)	Results of Discounted Cash Flow Analyses Prepared
Segment	# of Communities Impaired	# of Lots Impaired	Impairment Charge		Estimated Fair Value of Impaired Inventory at Period End
Year Ended September 30, 2012
West	2	116	$	3,902	$	11,058
East	2	93	4,316		7,342
Southeast	1	37	796		2,457
Unallocated	—	—	473		—
Continuing Operations	5	246	9,487		20,857
Discontinued Operations	—	—	60		—
Total	5	246	$	9,547	$	20,857

Year Ended September 30, 2011
West	12	859	$	20,150	$	33,066
East	4	86	1,611		10,671
Southeast	3	278	5,182		6,022
Unallocated	—	—	2,362		—
Continuing Operations	19	1,223	29,305		49,759
Discontinued Operations	—	—	276		—
Total	19	1,223	$	29,581	$	49,759

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 taken as a result of these discounted cash flow analyses and also impairment charges recorded for individual homes sold and in backlog with net contribution margins below a minimum threshold of profitability, held for sale impariments and lot option abandonment charges recorded for the fiscal years ended September 30, 2013, 2012, and 2011:



	Fiscal Year Ended September 30,
(In thousands)	2013		2012		2011
Development projects and homes in process (Held for Development)
West	$	46	$	3,902	$	20,150
East	13		4,316		1,611
Southeast	—		796		5,182
Unallocated	—		473		2,362
Subtotal	$	59	$	9,487	$	29,305
Land Held for Sale
West	$	228	$	—	$	(51	)
East	123		100		193
Southeast	1,778		208		169
Subtotal	$	2,129	$	308	$	311
Lot Option Abandonments
West	$	104	$	301	$	405
East	20		1,320		2,048
Southeast	321		792		390
Unallocated	—		2		—
Subtotal	$	445	$	2,415	$	2,843
Continuing Operations	$	2,633	$	12,210	$	32,459
Discontinued Operations
Held for Development	$	—	$	60	$	276
Land Held for Sale	17		503		78
Lot Option Abandonments	—		16		2,552
Subtotal	$	17	$	579	$	2,906
Total Company	$	2,650	$	12,789	$	35,365

Summary of Interests in Lot Option Agreements

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



(In thousands)	Deposits & Non-refundable Preacquisition Costs Incurred		Remaining Obligation		Land Not Owned - Under Option Agreements
As of September 30, 2013
Consolidated VIEs	$	4,491	$	4,633	$	9,124
Other consolidated lot option agreements (a)	—		—		—
Unconsolidated lot option agreements	32,822		284,005		—
Total lot option agreements	$	37,313	$	288,638	$	9,124
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.