Inventory (Tables)

3 Months Ended

Dec. 31, 2018

The components of our owned inventory are as follows as of December 31, 2018 and September 30, 2018:



in thousands	December 31, 2018		September 30, 2018
Homes under construction	$	478,539	$	476,752
Development projects in progress	925,728		907,793
Land held for future development	83,177		83,173
Land held for sale	6,997		7,781
Capitalized interest	151,886		144,645
Model homes	75,793		72,140
Total owned inventory	$	1,722,120	$	1,692,284

Schedule of total owned inventory, by segment

Total owned inventory by reportable segment is presented in the table below as of December 31, 2018 and September 30, 2018:



in thousands	Projects in Progress ^(a)		Land Held for Future Development		Land Held for Sale		Total Owned Inventory
December 31, 2018
West Segment	$	785,702	$	58,129	$	—	$	843,831
East Segment	277,300		14,077		3,906		295,283
Southeast Segment	357,172		10,971		3,091		371,234
Corporate and unallocated ^(b)	211,772		—		—		211,772
Total	$	1,631,946	$	83,177	$	6,997	$	1,722,120
September 30, 2018
West Segment	$	763,453	$	58,125	$	—	$	821,578
East Segment	280,761		14,077		4,580		299,418
Southeast Segment	358,126		10,971		3,177		372,274
Corporate and unallocated ^(b)	198,990		—		24		199,014
Total	$	1,601,330	$	83,173	$	7,781	$	1,692,284

^(a)Projects in progress include homes under construction, development projects in progress, capitalized interest, and model home categories from the preceding table.

^(b)Projects in progress amount includes capitalized interest and indirect costs that are maintained within our Corporate and unallocated segment. Land held for sale amount includes parcels held by our discontinued operations.

Schedule of Undiscounted Cash Flow Analysis Prepared

The table below summarizes the results of our undiscounted cash flow analyses by reportable segment, where applicable, for the quarter ended December 31, 2018 (the period that such analyses were required):



$ in thousands		Undiscounted Cash Flow Analyses Prepared
Segment ^(a)	# of Communities on Watch List^(b)	# of Communities ^(c)	Pre-analysis Book Value (BV)		Aggregate Undiscounted Cash Flow as a % of BV ^(d)
Quarter Ended December 31, 2018
West	3	—	$	—	—	%
Southeast	1	1	2,225		71.3	%
Corporate and unallocated ^(e)	—	—	387		N/A ^(f)
Total	4	1	$	2,612

^(a) 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.

^(b)Number of communities in this column excludes communities that are closing out and have less than ten closings remaining.

^(c)Number of communities in this column is lower than the number of communities on our watch list because it excludes communities due to certain qualitative considerations that would imply that the low profitability levels are temporary in nature.

^(d)An aggregate undiscounted cash flow as a percentage of book value under 100% would indicate a possible impairment and is consistent with our "watch list" methodology. The book value of each project assessed for recoverability on an undiscounted cash flow basis includes all inventory costs applicable to the project as of the date of the analysis, including capitalized interest and indirects.

^(e) Amount represents capitalized interest and indirects balance related to the communities for which an undiscounted cash flow analysis was prepared. Capitalized interest and indirects are maintained within our Corporate and unallocated segment.

^(f) N/A - not applicable.

Schedule of Discounted Cash Flow Analysis

The following table presents, by reportable segment, details of the impairment charges taken on projects in progress for the periods presented:



$ 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 time of Impairment
Quarter Ended December 31, 2018
Southeast	1	15	$	858	$	1,367
Corporate and unallocated ^(a)	—	—	149		238
Total	1	15	$	1,007	$	1,605

(a) Amount represents capitalized interest and indirects balance that was impaired. Capitalized interest and indirects are maintained within our Corporate and unallocated segment.

Quantitative unobservable inputs for inventory impairment

The following table presents the ranges or values of significant quantitative unobservable inputs we used in determining the fair value of the communities we impaired during the periods presented:



$ in thousands	Three Months Ended
Unobservable Inputs	December 31, 2018
Average selling price	$	412
Closings per community per month	1 - 2
Discount rate	16.8		%

Schedule of inventory impairments and lot option abandonment charges, by reportable homebuilding segment

The following table presents, by reportable segment, our total impairment and abandonment charges for the periods presented:



	Three Months Ended December 31,
in thousands	2018		2017
Projects in Progress:
Southeast	$	858	$	—
Corporate and unallocated ^(a)	149		—
Total impairment charges on projects in progress	$	1,007	$	—
Discontinued Operations:
Land Held for Sale	—		450
Total impairment and abandonment charges	$	1,007	$	450

^(a) Amount represents capitalized interest and indirects balance that was impaired. Capitalized interest and indirects are maintained within our Corporate and unallocated segment.

Summary of interests in lot option agreements

The following table provides a summary of our interests in lot option agreements as of December 31, 2018 and September 30, 2018:



in thousands	Deposits & Non-refundable Pre-acquisition Costs Incurred		Remaining Obligation
As of December 31, 2018
Unconsolidated lot option agreements	$	71,644	$	367,026
As of September 30, 2018
Unconsolidated lot option agreements	$	72,191	$	383,150