Fair Value Measurements

12 Months Ended

Sep. 30, 2016

As of the dates presented, we had assets on our consolidated balance sheets 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 is based on market-corroborated inputs (Level 2).

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 of these assets 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 on assets deemed to be impaired is determined based upon the type of asset being evaluated. Fair value of our owned inventory assets, when required to be calculated, is further discussed within Notes 2 and 5. The fair value of our investments in unconsolidated entities is 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, 2016, we recorded $13.7 million in impairments on projects in process and impairments on land held for sale impairments of $0.8 million. During the fiscal year ended September 30, 2015, we recorded impairments related to land held for sale 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 impairments on land held for sale of $0.2 million.

See Notes 2, 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 period-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 the periods presented:



(In thousands)	Level 1		Level 2		Level 3			Total
Year Ended September 30, 2016
Deferred compensation plan assets ^(a)	$	—	$	765	$	—		$	765
Development projects in progress^(b)	—		—		34,418		^(c)	34,418
Land held for sale ^(b)	—		—		19,973		^(d)	19,973
Year Ended September 30, 2015
Deferred compensation plan assets ^(a)	—		669		—			669
Land held for sale ^(b)	—		—		8,814		^(d)	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		^(c)	14,379
Land held for sale ^(b)	—		—		4,117		^(d)	4,117

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

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

^(c)Amount represents the impairment-date fair value of the projects in progress that we impaired during the periods indicated. Refer to Note 5 for additional discussion.

^(d) Amount represents the impairment-date fair value of certain land held for sale assets that were impaired during periods indicated. Refer to Note 5 for additional discussion.

The fair value of our cash and cash equivalents, restricted cash, accounts receivable, trade accounts payable, other liabilities, amounts due under the Facility (if outstanding) and other secured notes payable approximate their carrying amounts due to the short maturity of these assets and liabilities. When outstanding, obligations related to land not owned under option agreements approximate fair value.

The following table presents the carrying value and estimated fair value of certain of our other financial liabilities as of September 30, 2016 and September 30, 2015:



	As of September 30, 2016				As of September 30, 2015
(In thousands)	Carrying Amount ^(a)		Fair Value		Carrying Amount ^(a)		Fair Value
Senior Notes ^(b)	$	1,207,526	$	1,253,614	$	1,415,332	$	1,412,173
Term Loan	52,669		52,669		—		—
Junior Subordinated Notes	59,870		59,870		57,803		57,803
	$	1,320,065	$	1,366,153	$	1,473,135	$	1,469,976

^(a) Carrying amounts are net of unamortized debt premium/discounts, debt issuance costs or accretion.

^(b) The estimated fair value for our publicly-held Senior Notes has been determined using quoted market rates (Level 2).

- 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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