Fair Value Measurements

12 Months Ended

Sep. 30, 2015

As of September 30, 2015, we had assets on our consolidated balance sheet that were required to be measured at fair value on a recurring or non-recurring basis. We use a fair value hierarchy that requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value as follows:


•	Level 1 – Quoted prices in active markets for identical assets or liabilities;


•	Level 2 – Inputs other than quoted prices included in Level 1 that are observable either directly or indirectly through corroboration with market data; and


•	Level 3 – Unobservable inputs that reflect our own estimates about the assumptions market participants would use in pricing the asset or liability.

Certain of our assets are required to be recorded at fair value on a recurring basis. The fair value of our deferred compensation plan assets are based on market-corroborated inputs (level 2). The fair value of our available-for-sale marketable equity securities, when outstanding, was based on readily available share prices (level 1).

Certain of our assets are required to be recorded at fair value on a non-recurring basis when events and circumstances indicate that the carrying value may not be recovered. We review our long-lived assets, including inventory, for recoverability when factors indicate an impairment may exist, but no less than quarterly. Fair value is based on estimated cash flows discounted for market risks associated with the long-lived assets. The fair values of our investments in unconsolidated entities are determined primarily using a discounted cash flow model to value the underlying net assets of the respective entities. During the fiscal year ended September 30, 2015, we recorded no impairments for development projects in process and land held for sale impairments of $1.4 million. During the fiscal year ended September 30, 2014, we recorded impairments related to projects in progress of $5.4 million and land held for sale impairments of $0.2 million. During the fiscal year ended September 30, 2013, we recorded impairments related to projects in progress of $0.1 million, land held for sale impairments of $2.1 million, and impairments of unconsolidated entity investments of $0.2 million.

See Notes 2, 4, 5 and 15 for additional information related to the fair value accounting for the assets listed below. Determining which hierarchical level an asset or liability falls within requires significant judgment. We evaluate our hierarchy disclosures each quarter.

The following table presents the fiscal year-end balances of our assets measured at fair value on a recurring basis, and the impairment-date fair value of certain assets measured at fair value on a non-recurring basis, for each hierarchy level. These balances represent only those assets whose carrying values were adjusted to fair value during our fiscal 2015 and 2014:



(In thousands)	Level 1		Level 2		Level 3		Total
Year Ended September 30, 2015
Deferred compensation plan assets ^(a)	$	—	$	669	$	—	$	669
Land held for sale ^(b)	—		—		8,814		8,814
Year Ended September 30, 2014
Available-for-sale marketable equity securities ^(a)	$	24,765	$	—	$	—	$	24,765
Deferred compensation plan assets ^(a)	—		517		—		517
Development projects in progress ^(b)	—		—		14,379		14,379
Land held for sale ^(b)	—		—		4,117		4,117

^(a) Measured at fair value on a recurring basis.

^(b)Measured at fair value on a non-recurring basis.

The fair value of our cash and cash equivalents, restricted cash, accounts receivable, trade accounts payable, other liabilities, cash secured loans, amounts due under the Facility and other secured notes payable approximate their carrying amounts due to the short maturities of these assets and liabilities.

As of September 30, 2014, our investment in marketable equity securities, consisting solely of the shares held in AMH, was in a cumulative unrealized loss position of $1.3 million, which was recorded in AOCI, a component of stockholders' equity, until the assets were sold.

When outstanding, obligations related to land not owned under option agreements approximate fair value. The following table presents the carrying values and estimated fair values of our other financial liabilities as of September 30, 2015 and September 30, 2014:



	As of September 30, 2015				As of September 30, 2014
(In thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Senior Notes	$	1,427,240	$	1,412,173	$	1,435,183	$	1,462,899
Junior Subordinated Notes	57,803		57,803		55,736		55,736
	$	1,485,043	$	1,469,976	$	1,490,919	$	1,518,635

The estimated fair value shown above for our publicly-held Senior Notes has been determined using quoted market rates (level 2). Since there is no trading market for our Junior Subordinated Notes, the fair value of these notes is estimated by discounting scheduled cash flows through maturity (level 3). The discount rate is estimated using market rates currently being offered on loans with similar terms and credit quality. Judgment is required in interpreting market data to develop these estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that we could realize in a current market exchange.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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