Fair Value Measurements

3 Months Ended

Dec. 31, 2011

Fair Value Measurements [Abstract]

Fair Value Measurements

(10) Fair Value Measurements

As of December 31, 2011, we had no assets or liabilities in our unaudited condensed consolidated balance sheets that were required to be measured at fair value on a recurring basis. 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 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; Level 3 – Unobservable inputs that reflect our own estimates about the assumptions market participants would use in pricing the asset or liability.

The following table presents our assets measured at fair value on a non-recurring basis for each hierarchy level and represents only those assets whose carrying values were adjusted to fair value during the three months ended December 31, 2011 and 2010 (in thousands):

	Level 1		Level 2		Level 3		Total
Three Months Ended December 31, 2011:
Development projects in progress		—		—		6,377		6,377
Land held for sale		—		—		1,600		1,600
Joint venture investments		—		—		—		—
Three Months Ended December 30, 2010:
Development projects in progress		—		—		—		—
Land held for sale		—		—		6,708		6,708
Joint venture investments		—		—		—		—

As previously disclosed, we review our long-lived assets, including inventory for recoverability when factors that 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 joint ventures are determined primarily using a discounted cash flow model to value the underlying net assets of the respective entities. During the three months ended December 31, 2011, we recorded total impairments, including discontinued operations, of $2.3 million, $0.2 million and $29,000 for development projects in progress, land held for sale and joint venture investments, respectively. During the three months ended December 31, 2010, we recorded total impairments, including discontinued operations, of $0.2 million, and $0.3 million land held for sale and joint venture investments, respectively. See Notes 1, 3 and 4 for additional information related to the fair value accounting for the assets listed above. Determining which hierarchical level an asset or liability falls within requires significant judgment. We evaluate our hierarchy disclosures each quarter.

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

Obligations related to land not owned under option agreements are recorded at estimated fair value. The carrying values and estimated fair values of other financial assets and liabilities were as follows (in thousands):

	As of December 31, 2011				As of September 30, 2011
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Senior Notes	$	1,131,935	$	915,741	$	1,132,152	$	856,634
Mandatory Convertible Subordinated Notes		57,500		30,360		57,500		22,747
Junior Subordinated Notes		50,053		50,053		49,537		49,537
	$	1,239,488	$	996,154	$	1,239,189	$	928,918

The estimated fair values shown above for our publicly held Senior Notes and Mandatory Convertible Subordinated Notes have been determined using quoted market rates. 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. 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.