Inventory (Tables)

6 Months Ended

Mar. 31, 2019

The components of our owned inventory are as follows as of March 31, 2019 and September 30, 2018:



in thousands	March 31, 2019		September 30, 2018
Homes under construction	$	536,039	$	476,752
Development projects in progress	836,829		907,793
Land held for future development	28,531		83,173
Land held for sale	12,926		7,781
Capitalized interest	144,756		144,645
Model homes	75,318		72,140
Total owned inventory	$	1,634,399	$	1,692,284

Schedule of total owned inventory, by segment

Total owned inventory by reportable segment is presented in the table below as of March 31, 2019 and September 30, 2018:



in thousands	Projects in Progress ^(a)		Land Held for Future Development		Land Held for Sale		Total Owned Inventory
March 31, 2019
West Segment	$	736,249	$	3,483	$	5,077	$	744,809
East Segment	286,404		14,077		4,758		305,239
Southeast Segment	364,900		10,971		3,091		378,962
Corporate and unallocated ^(b)	205,389		—		—		205,389
Total	$	1,592,942	$	28,531	$	12,926	$	1,634,399
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 recoverability tests by reportable segment, where applicable, for the quarter ended March 31, 2019:



$ in thousands		Recoverability 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 March 31, 2019
West	12	9	$	162,362	79.4	%
Corporate and unallocated ^(e)	—	—	30,037		N/A ^(f)
Total	12	9	$	192,399

^(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 fewer than ten closings remaining.

^(c)Some of the communities on the watch list were not tested for recoverability on an undiscounted cash flow basis due to certain quantitative and qualitative considerations that indicated that their carrying values are recoverable.

^(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 a recoverability 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:



	Results of Impairment Analyses
$ in thousands	Three Months Ended						Six Months Ended
Segment	# of Communities Impaired	# of Lots Impaired	Impairment Charge		Estimated Fair Value of Impaired Inventory at time of Impairment		# of Communities Impaired	# of Lots Impaired	Impairment Charge		Estimated Fair Value of Impaired Inventory at time of Impairment
March 31, 2019
West	9	839	$	92,912	$	69,449	9	839	$	92,912	$	69,449
Southeast	—	—	—		—		1	15	858		1,367
Corporate and unallocated ^(a)	—	—	16,111		13,928		—	—	16,260		14,166
Total	9	839	$	109,023	$	83,377	10	854	$	110,030	$	84,982

^(a) Amount represents the capitalized interest and indirects balances that were 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 impaired during the periods presented:



$ in thousands	Three Months Ended	Six Months Ended
Unobservable Inputs	March 31, 2019	March 31, 2019
Average selling price	$350 to $615	$350 to $615
Closings per community per month	2 - 4	1 - 4
Discount rate	14.7% - 16.4%	14.7% - 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 March 31,				Six Months Ended March 31,
in thousands	2019		2018		2019		2018
Projects in Progress:
West	$	92,912	$	—	$	92,912	$	—
Southeast	—		—		858		—
Corporate and unallocated ^(a)	16,111		—		16,260		—
Total impairment charges on projects in progress	$	109,023	$	—	$	110,030	$	—
Land Held for Sale:
West	$	37,963	$	—	$	37,963	$	—
Corporate and unallocated ^(a)	625		—		625		—
Total impairment charges on land held for sale	$	38,588	$	—	$	38,588	$	—
Discontinued Operations:
Land Held for Sale	$	—	$	—	$	—	$	450
Total impairment and abandonment charges	$	147,611	$	—	$	148,618	$	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 March 31, 2019 and September 30, 2018:



in thousands	Deposits & Non-refundable Pre-acquisition Costs Incurred		Remaining Obligation
As of March 31, 2019
Unconsolidated lot option agreements	$	78,047	$	386,913
As of September 30, 2018
Unconsolidated lot option agreements	$	72,191	$	383,150