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Segment Information | 3 Months Ended
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Dec. 31, 2017
Segment Reporting [Abstract] |
SEGMENT INFORMATION | SEGMENT INFORMATION The Company is a national homebuilder that is primarily engaged in the acquisition and development of land and the construction and sale of residential homes, with operations in 79 markets in 26 states across the United States. The Company’s operating segments are its 44 homebuilding divisions, its majority-owned Forestar land development operations acquired in October 2017, its financial services operations and its other business activities. The homebuilding operating segments are aggregated into six reporting segments, as shown below. The Company’s reporting segments are its homebuilding reporting segments, its Forestar land development segment and its financial services segment. The Company’s homebuilding divisions design, build and sell single-family detached homes on lots they develop and on fully developed lots purchased ready for home construction. To a lesser extent, the homebuilding divisions also build and sell attached homes, such as townhomes, duplexes, triplexes and condominiums. The homebuilding divisions generate most of their revenues from the sale of homes, with a lesser amount from the sale of land and lots. The Company’s reportable homebuilding segments are: East, Midwest, Southeast, South Central, Southwest and West. These reporting segments have homebuilding operations located in the following states:
| East: |  | Delaware, Georgia (Savannah only), Maryland, New Jersey, North Carolina, Pennsylvania, South Carolina and Virginia
| Midwest: |  | Colorado, Illinois and Minnesota
| Southeast: |  | Alabama, Florida, Georgia, Mississippi and Tennessee
| South Central: |  | Louisiana, Oklahoma and Texas
| Southwest: |  | Arizona and New Mexico
| West: |  | California, Hawaii, Nevada, Oregon, Utah and Washington
The Forestar land development reporting segment has operations in 16 markets and 11 states, where it owns, directly or through joint ventures, interests in residential and mixed-use projects. The Company’s homebuilding divisions and Forestar are currently identifying land development opportunities to expand Forestar’s platform, and the homebuilding divisions expect to acquire a large portion of Forestar’s finished lots in accordance with the master supply agreement. Forestar’s segment results are presented on their historical cost basis, consistent with the manner in which management evaluates segment performance. The Company’s financial services reporting segment provides mortgage financing and title agency services to homebuyers in many of the Company’s homebuilding markets. The segment generates the substantial majority of its revenues from originating and selling mortgages and collecting fees for title insurance agency and closing services. The Company sells substantially all of the mortgages it originates and the related servicing rights to third-party purchasers. In addition to its core homebuilding, land development and financial services operations, the Company has subsidiaries that engage in other business activities. These subsidiaries conduct insurance-related operations, construct and own income-producing rental properties, own non-residential real estate including ranch land and improvements and own and operate oil and gas related assets. One of these subsidiaries, DHI Communities, recently began developing and constructing multi-family rental properties on land parcels the Company already owned and currently has five projects under active construction. At December 31, 2017 and September 30, 2017, property and equipment balances in the consolidated balance sheets included $115.6 million and $93.7 million, respectively, related to costs incurred by DHI Communities. The results of these subsidiaries are immaterial for separate reporting and therefore are grouped together and presented as other. The accounting policies of the reporting segments are described throughout Note A included in the Company’s annual report on Form 10-K for the fiscal year ended September 30, 2017. Financial information relating to the Company’s reporting segments is as follows:
|  | December 31, 2017
|  | Homebuilding |  | Forestar (1) |  | Financial Services |  | Other (2) |  | Other Adjustments (3) |  | Consolidated
|  | (In millions)
Assets |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 558.0 |  |  | $ | 321.8 |  |  | $ | 24.5 |  |  | $ | 16.0 |  |  | $ | — |  |  | $ | 920.3 |
Restricted cash |  | 8.3 |  |  | 40.0 |  |  | 5.4 |  |  | — |  |  | — |  |  | 53.7 |
Inventories: |  |  |  |  |  |  |  |  |  |  |  |
Construction in progress and finished homes |  | 4,907.8 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 4,907.8 |
Residential land and lots — developed and under development |  | 4,649.2 |  |  | 131.8 |  |  | — |  |  | — |  |  | 46.7 |  |  | 4,827.7 |
Land held for development |  | 100.5 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 100.5 |
Land held for sale |  | 18.2 |  |  | 183.2 |  |  | — |  |  | — |  |  | 2.8 |  |  | 204.2 |
|  | 9,675.7 |  |  | 315.0 |  |  | — |  |  | — |  |  | 49.5 |  |  | 10,040.2 |
Investment in unconsolidated entities |  | — |  |  | 65.1 |  |  | — |  |  | — |  |  | 21.0 |  |  | 86.1 |
Mortgage loans held for sale |  | — |  |  | — |  |  | 538.2 |  |  | — |  |  | — |  |  | 538.2 |
Deferred income taxes |  | 236.3 |  |  | 2.5 |  |  | — |  |  | — |  |  | 0.3 |  |  | 239.1 |
Property and equipment, net |  | 204.3 |  |  | 2.0 |  |  | 3.1 |  |  | 148.3 |  |  | — |  |  | 357.7 |
Other assets |  | 545.3 |  |  | 18.4 |  |  | 34.1 |  |  | 3.8 |  |  | 20.4 |  |  | 622.0 |
Goodwill |  | 80.0 |  |  | — |  |  | — |  |  | — |  |  | 20.0 |  |  | 100.0 |
|  | $ | 11,307.9 |  |  | $ | 764.8 |  |  | $ | 605.3 |  |  | $ | 168.1 |  |  | $ | 111.2 |  |  | $ | 12,957.3 |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |
Accounts payable |  | $ | 567.0 |  |  | $ | 2.4 |  |  | $ | 1.6 |  |  | $ | 4.7 |  |  | $ | — |  |  | $ | 575.7 |
Accrued expenses and other liabilities |  | 997.2 |  |  | 45.5 |  |  | 30.9 |  |  | 18.3 |  |  | (23.8 | ) |  | 1,068.1 |
Notes payable |  | 2,749.6 |  |  | 108.4 |  |  | 387.5 |  |  | — |  |  | 12.6 |  |  | 3,258.1 |
|  | $ | 4,313.8 |  |  | $ | 156.3 |  |  | $ | 420.0 |  |  | $ | 23.0 |  |  | $ | (11.2 | ) |  | $ | 4,901.9 |
______________
(1) | Results are presented on Forestar’s historical cost basis, consistent with the manner in which management evaluates segment performance. All purchase accounting adjustments are included in the Other Adjustments column.
(2) | Amounts represent the aggregate balances of certain subsidiaries that are immaterial for separate reporting.
(3) | Amounts represent purchase accounting adjustments related to the Forestar acquisition and the reclassification of $2.1 million of interest expense to inventory.
|  | September 30, 2017
|  | Homebuilding |  | Financial Services |  | Other (1) |  | Consolidated
|  | (In millions)
Assets |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 973.0 |  |  | $ | 24.1 |  |  | $ | 10.7 |  |  | $ | 1,007.8 |
Restricted cash |  | 9.3 |  |  | 7.2 |  |  | — |  |  | 16.5 |
Inventories: |  |  |  |  |  |  |  |
Construction in progress and finished homes |  | 4,606.0 |  |  | — |  |  | — |  |  | 4,606.0 |
Residential land and lots — developed and under development |  | 4,519.7 |  |  | — |  |  | — |  |  | 4,519.7 |
Land held for development |  | 101.0 |  |  | — |  |  | — |  |  | 101.0 |
Land held for sale |  | 10.4 |  |  | — |  |  | — |  |  | 10.4 |
|  | 9,237.1 |  |  | — |  |  | — |  |  | 9,237.1 |
Mortgage loans held for sale |  | — |  |  | 587.3 |  |  | — |  |  | 587.3 |
Deferred income taxes |  | 365.0 |  |  | — |  |  | — |  |  | 365.0 |
Property and equipment, net |  | 194.4 |  |  | 3.0 |  |  | 127.6 |  |  | 325.0 |
Other assets |  | 518.7 |  |  | 42.2 |  |  | 5.0 |  |  | 565.9 |
Goodwill |  | 80.0 |  |  | — |  |  | — |  |  | 80.0 |
|  | $ | 11,377.5 |  |  | $ | 663.8 |  |  | $ | 143.3 |  |  | $ | 12,184.6 |
Liabilities |  |  |  |  |  |  |  |
Accounts payable |  | $ | 575.6 |  |  | $ | 1.5 |  |  | $ | 3.3 |  |  | $ | 580.4 |
Accrued expenses and other liabilities |  | 933.1 |  |  | 35.6 |  |  | 16.3 |  |  | 985.0 |
Notes payable |  | 2,451.6 |  |  | 420.0 |  |  | — |  |  | 2,871.6 |
|  | $ | 3,960.3 |  |  | $ | 457.1 |  |  | $ | 19.6 |  |  | $ | 4,437.0 |
______________
(1) | Amounts represent the aggregate balances of certain subsidiaries that are immaterial for separate reporting.
|  | Three Months Ended December 31, 2017
|  | Homebuilding |  | Forestar (1) |  | Financial Services |  | Other (2) |  | Other Adjustments (3) |  | Consolidated
|  | (In millions)
Revenues: |  |  |  |  |  |  |  |  |  |  |  |
Home sales |  | $ | 3,184.5 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 3,184.5 |
Land/lot sales and other |  | 36.4 |  |  | 30.8 |  |  | — |  |  | — |  |  | — |  |  | 67.2 |
Financial services |  | — |  |  | — |  |  | 81.0 |  |  | — |  |  | — |  |  | 81.0 |
|  | 3,220.9 |  |  | 30.8 |  |  | 81.0 |  |  | — |  |  | — |  |  | 3,332.7 |
Cost of sales: |  |  |  |  |  |  |  |  |  |  |  |
Home sales |  | 2,521.5 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 2,521.5 |
Land/lot sales and other |  | 31.2 |  |  | 19.3 |  |  | — |  |  | — |  |  | 4.4 |  |  | 54.9 |
Inventory and land option charges |  | 3.7 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 3.7 |
|  | 2,556.4 |  |  | 19.3 |  |  | — |  |  | — |  |  | 4.4 |  |  | 2,580.1 |
Selling, general and administrative expense |  | 304.8 |  |  | 13.6 |  |  | 61.7 |  |  | 4.0 |  |  | 0.1 |  |  | 384.2 |
Equity in earnings of unconsolidated entities |  | — |  |  | (7.6 | ) |  | — |  |  | — |  |  | 5.3 |  |  | (2.3 | )
Interest expense |  | — |  |  | 2.1 |  |  | — |  |  | — |  |  | (2.1 | ) |  | — |
Other (income) expense |  | (14.1 | ) |  | (0.6 | ) |  | (2.9 | ) |  | (2.9 | ) |  | — |  |  | (20.5 | )
Income before income taxes |  | $ | 373.8 |  |  | $ | 4.0 |  |  | $ | 22.2 |  |  | $ | (1.1 | ) |  | $ | (7.7 | ) |  | $ | 391.2 |
Summary Cash Flow Information: |  |  |  |  |  |  |  |  |  |  |  |
Depreciation and amortization |  | $ | 13.1 |  |  | $ | 1.2 |  |  | $ | 0.4 |  |  | $ | 1.4 |  |  | $ | 0.1 |  |  | $ | 16.2 |
Cash (used in) provided by operating activities |  | $ | (101.6 | ) |  | $ | (36.2 | ) |  | $ | 67.9 |  |  | $ | 3.0 |  |  | $ | (8.1 | ) |  | $ | (75.0 | )
______________
(1) | Results are presented from the date of acquisition and on Forestar’s historical cost basis, consistent with the manner in which management evaluates segment performance. All purchase accounting adjustments are included in the Other Adjustments column.
(2) | Amounts represent the aggregate results of certain subsidiaries that are immaterial for separate reporting.
(3) | Amounts represent purchase accounting adjustments related to the Forestar acquisition and the reclassification of $2.1 million of interest expense to inventory.
|  | Three Months Ended December 31, 2016
|  | Homebuilding |  | Financial Services |  | Other (1) |  | Consolidated
|  | (In millions)
Revenues: |  |  |  |  |  |  |  |
Home sales |  | $ | 2,797.7 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,797.7 |
Land/lot sales and other |  | 28.4 |  |  | — |  |  | — |  |  | 28.4 |
Financial services |  | — |  |  | 78.1 |  |  | — |  |  | 78.1 |
|  | 2,826.1 |  |  | 78.1 |  |  | — |  |  | 2,904.2 |
Cost of sales: |  |  |  |  |  |  |  |
Home sales |  | 2,244.8 |  |  | — |  |  | — |  |  | 2,244.8 |
Land/lot sales and other |  | 20.8 |  |  | — |  |  | — |  |  | 20.8 |
Inventory and land option charges |  | 2.3 |  |  | — |  |  | — |  |  | 2.3 |
|  | 2,267.9 |  |  | — |  |  | — |  |  | 2,267.9 |
Selling, general and administrative expense |  | 268.4 |  |  | 54.8 |  |  | 2.7 |  |  | 325.9 |
Other (income) expense |  | (4.1 | ) |  | (3.2 | ) |  | (0.4 | ) |  | (7.7 | )
Income before income taxes |  | $ | 293.9 |  |  | $ | 26.5 |  |  | $ | (2.3 | ) |  | $ | 318.1 |
Summary Cash Flow Information: |  |  |  |  |  |  |  |
Depreciation and amortization |  | $ | 13.3 |  |  | $ | 0.3 |  |  | $ | 0.8 |  |  | $ | 14.4 |
Cash (used in) provided by operating activities |  | $ | (98.3 | ) |  | $ | 59.9 |  |  | $ | 10.2 |  |  | $ | (28.2 | )
______________
(1) | Amounts represent the aggregate results of certain subsidiaries that are immaterial for separate reporting.
Homebuilding Inventories by Reporting Segment (1) |  | December 31, 2017 |  | September 30, 2017
|  | (In millions)
East |  | $ | 1,155.6 |  |  | $ | 1,068.9 |
Midwest |  | 543.3 |  |  | 492.6 |
Southeast |  | 2,470.2 |  |  | 2,392.3 |
South Central |  | 2,281.9 |  |  | 2,199.4 |
Southwest |  | 516.7 |  |  | 506.1 |
West |  | 2,477.7 |  |  | 2,352.5 |
Corporate and unallocated (2) |  | 230.3 |  |  | 225.3 |
|  | $ | 9,675.7 |  |  | $ | 9,237.1 |
______________
(1) | Homebuilding inventories are the only assets included in the measure of homebuilding segment assets used by the Company’s chief operating decision makers.
(2) | Corporate and unallocated consists primarily of capitalized interest and property taxes.
Homebuilding Results by Reporting Segment |  | Three Months Ended December 31,
|  | 2017 |  | 2016
|  | (In millions)
Revenues |  |  |  |
East |  | $ | 393.0 |  |  | $ | 305.9 |
Midwest |  | 161.4 |  |  | 151.1 |
Southeast |  | 988.7 |  |  | 883.4 |
South Central |  | 808.8 |  |  | 756.9 |
Southwest |  | 156.4 |  |  | 108.6 |
West |  | 712.6 |  |  | 620.2 |
|  | $ | 3,220.9 |  |  | $ | 2,826.1 |
Income before Income Taxes (1) |  |  |  |
East |  | $ | 45.0 |  |  | $ | 26.3 |
Midwest |  | 13.3 |  |  | 10.2 |
Southeast |  | 122.5 |  |  | 99.6 |
South Central |  | 101.5 |  |  | 96.5 |
Southwest |  | 14.7 |  |  | 4.0 |
West |  | 76.8 |  |  | 57.3 |
|  | $ | 373.8 |  |  | $ | 293.9 |
______________
(1) | Expenses maintained at the corporate level consist primarily of interest and property taxes, which are capitalized and amortized to cost of sales or expensed directly, and the expenses related to operating the Company’s corporate office. The amortization of capitalized interest and property taxes is allocated to each segment based on the segment’s cost of sales, while expenses associated with the corporate office are allocated to each segment based on the segment’s inventory balances.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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