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Notes Payable | 3 Months Ended
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Dec. 31, 2017
Debt Disclosure [Abstract] |
NOTES PAYABLE | NOTES PAYABLE The Company’s notes payable at their principal amounts, net of debt issuance costs, consist of the following:
|  | December 31, 2017 |  | September 30, 2017
|  | (In millions)
Homebuilding: |  |  |  |
Unsecured: |  |  |  |
Revolving credit facility, maturing 2022 |  | $ | 300.0 |  |  | $ | — |
3.625% senior notes due 2018 |  | — |  |  | 399.7 |
3.75% senior notes due 2019 |  | 499.0 |  |  | 498.8 |
4.0% senior notes due 2020 |  | 498.1 |  |  | 497.9 |
2.55% senior notes due 2020 |  | 397.4 |  |  | — |
4.375% senior notes due 2022 |  | 348.1 |  |  | 348.1 |
4.75% senior notes due 2023 |  | 298.5 |  |  | 298.4 |
5.75% senior notes due 2023 |  | 397.7 |  |  | 397.6 |
Other secured notes |  | 10.8 |  |  | 11.1 |
|  | 2,749.6 |  |  | 2,451.6 |
Forestar: |  |  |  |
Unsecured: |  |  |  |
3.75% convertible senior notes due 2020 |  | 120.7 |  |  |
Other indebtedness |  | 0.3 |  |  |
|  | 121.0 |  |  |
Financial Services: |  |  |  |
Mortgage repurchase facility, maturing 2018 |  | 387.5 |  |  | 420.0 |
|  | $ | 3,258.1 |  |  | $ | 2,871.6 |
Debt issuance costs that were deducted from the carrying amounts of the homebuilding senior notes totaled $11.0 million and $9.5 million at December 31, 2017 and September 30, 2017, respectively. These costs are capitalized into inventory as they are amortized. Forestar’s 3.75% convertible senior notes due 2020 include a purchase accounting adjustment of $12.6 million to increase the notes to their fair value at the acquisition date. Homebuilding: The Company has a $1.275 billion senior unsecured revolving credit facility with an uncommitted accordion feature that could increase the size of the facility to $1.9 billion, subject to certain conditions and availability of additional bank commitments. The facility also provides for the issuance of letters of credit with a sublimit equal to approximately 50% of the revolving credit commitment. Letters of credit issued under the facility reduce the available borrowing capacity. The interest rate on borrowings under the revolving credit facility may be based on either the Prime Rate or London Interbank Offered Rate (LIBOR) plus an applicable margin, as defined in the credit agreement governing the facility. The maturity date of the facility is September 25, 2022. Borrowings and repayments under the facility were $715 million and $415 million, respectively, during the three months ended December 31, 2017. At December 31, 2017, there were $300 million of borrowings outstanding at a 3.4% annual interest rate and $98.0 million of letters of credit issued under the revolving credit facility. The Company’s revolving credit facility imposes restrictions on its operations and activities, including requiring the maintenance of a maximum allowable ratio of debt to tangible net worth and a borrowing base restriction if the Company’s ratio of debt to tangible net worth exceeds a certain level. These covenants are measured as defined in the credit agreement governing the facility and are reported to the lenders quarterly. A failure to comply with these financial covenants could allow the lending banks to terminate the availability of funds under the revolving credit facility or cause any outstanding borrowings to become due and payable prior to maturity. The credit agreement governing the facility and the indenture governing the senior notes also impose restrictions on the creation of secured debt and liens. At December 31, 2017, the Company was in compliance with all of the covenants, limitations and restrictions of its revolving credit facility and public debt obligations. The Company has an automatically effective universal shelf registration statement filed with the Securities and Exchange Commission (SEC) in August 2015, registering debt and equity securities that the Company may issue from time to time in amounts to be determined. In December 2017, the Company issued $400 million principal amount of 2.55% senior notes due December 1, 2020, with interest payable semi-annually. The notes represent unsecured obligations of the Company. The annual effective interest rate of these notes after giving effect to the amortization of financing costs is 2.8%. In December 2017, the Company redeemed $400 million principal amount of its 3.625% senior notes due February 2018. The senior notes were redeemed at a price equal to 100% of the principal amount of the notes, together with accrued and unpaid interest. Effective August 1, 2017, the Board of Directors authorized the repurchase of up to $500 million of the Company’s debt securities effective through July 31, 2018. All of the $500 million authorization was remaining at December 31, 2017. Forestar: On October 5, 2017, Forestar terminated its $50 million senior credit facility. The $50 million senior credit facility included a $50 million sublimit for letters of credit, of which $14.3 million was outstanding at the time of termination. Also on October 5, 2017, Forestar entered into a new agreement providing for a $30 million secured standby letter of credit facility, secured by $40 million in cash, which is included in restricted cash in the consolidated balance sheet. Letters of credit outstanding under the prior facility were transferred to the new facility. Outstanding letters of credit at December 31, 2017 totaled $14.4 million. On October 5, 2017, Forestar had $120 million principal amount of 3.75% convertible senior notes due 2020. The completion of the acquisition resulted in a fundamental change in the notes as described in the related note indentures and as a result, Forestar offered to purchase all or any part of every holder’s convertible senior notes for a price in cash equal to 100% of the aggregate principal amount of the notes, plus accrued and unpaid interest, if any, to the date of repurchase. As a result, Forestar purchased $1.1 million of the aggregate principal amount of the notes. Also, prior to the acquisition, upon conversion of the notes each holder was entitled to receive 40.8351 shares of former Forestar common stock per $1,000 principal amount of notes surrendered for conversion. In connection with the acquisition, the conversion ratio was adjusted in accordance with the indenture governing the convertible notes such that each holder is now entitled to receive $579.77062 in cash and 8.17192 shares of new Forestar common stock per $1,000 principal amount of notes surrendered for conversion. The convertible senior notes are not guaranteed by D.R. Horton, Inc. or any of the subsidiaries that guarantee the Company’s homebuilding debt. On October 5, 2017, Forestar had $5.3 million principal amount of 8.50% senior secured notes due 2022. Pursuant to the indenture governing the notes, the notes were redeemed for $5.9 million on October 30, 2017. Financial Services: The Company’s mortgage subsidiary, DHI Mortgage, has a mortgage repurchase facility that is accounted for as a secured financing. The mortgage repurchase facility provides financing and liquidity to DHI Mortgage by facilitating purchase transactions in which DHI Mortgage transfers eligible loans to the counterparties against the transfer of funds by the counterparties, thereby becoming purchased loans. DHI Mortgage then has the right and obligation to repurchase the purchased loans upon their sale to third-party purchasers in the secondary market or within specified time frames from 45 to 60 days in accordance with the terms of the mortgage repurchase facility. The total capacity of the facility is $600 million; however, the capacity increases, without requiring additional commitments, to $725 million for approximately 30 days at each quarter end and to $800 million for approximately 45 days at fiscal year end. The capacity of the facility can also be increased to $1.0 billion subject to the availability of additional commitments. The Company is currently in discussions with its lenders and expects to renew and extend the facility on similar terms prior to its February 23, 2018 maturity date. As of December 31, 2017, $494.6 million of mortgage loans held for sale with a collateral value of $476.6 million were pledged under the mortgage repurchase facility. As a result of advance paydowns totaling $89.1 million, DHI Mortgage had an obligation of $387.5 million outstanding under the mortgage repurchase facility at December 31, 2017 at a 3.7% annual interest rate. The mortgage repurchase facility is not guaranteed by D.R. Horton, Inc. or any of the subsidiaries that guarantee the Company’s homebuilding debt. The facility contains financial covenants as to the mortgage subsidiary’s minimum required tangible net worth, its maximum allowable ratio of debt to tangible net worth and its minimum required liquidity. These covenants are measured and reported to the lenders monthly. At December 31, 2017, DHI Mortgage was in compliance with all of the conditions and covenants of the mortgage repurchase facility. In the past, DHI Mortgage has been able to renew or extend its mortgage credit facility at a sufficient capacity and on satisfactory terms prior to its maturity and obtain temporary additional commitments through amendments to the credit facility during periods of higher than normal volumes of mortgages held for sale. The liquidity of the Company’s financial services business depends upon its continued ability to renew and extend the mortgage repurchase facility or to obtain other additional financing in sufficient capacities.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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