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Notes Payable | 9 Months Ended
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Jun. 30, 2020
Debt Disclosure [Abstract] |
NOTES PAYABLE | NOTES PAYABLE The Company’s notes payable at their carrying amounts consist of the following:
|  | June 30, 2020 |  | September 30, 2019
|  | (In millions) |  |
Homebuilding: |  |  |  |
Unsecured: |  |  |  |
Revolving credit facility |  | $ | — |  |  | $ | — |
364-day revolving credit facility |  | — |  |  | — |
4.0% senior notes due 2020 (1) |  | — |  |  | 499.6 |
2.55% senior notes due 2020 (1) |  | 399.6 |  |  | 398.9 |
4.375% senior notes due 2022 (1) |  | 349.1 |  |  | 348.8 |
4.75% senior notes due 2023 (1) |  | 299.2 |  |  | 298.9 |
5.75% senior notes due 2023 (1) |  | 398.6 |  |  | 398.4 |
2.5% senior notes due 2024 (1) |  | 496.2 |  |  | — |
2.6% senior notes due 2025 (1) |  | 494.8 |  |  | — |
Other secured notes (2) |  | 46.3 |  |  | 103.0 |
|  | 2,483.8 |  |  | 2,047.6 |
Forestar: |  |  |  |
Unsecured: |  |  |  |
Revolving credit facility |  | — |  |  | — |
3.75% convertible senior notes due 2020 (3) |  | — |  |  | 119.1 |
8.0% senior notes due 2024 (4) |  | 344.8 |  |  | 343.8 |
5.0% senior notes due 2028 (4) |  | 295.8 |  |  | — |
|  | 640.6 |  |  | 462.9 |
Financial Services: |  |  |  |
Mortgage repurchase facility |  | 1,172.9 |  |  | 888.9 |
|  | $ | 4,297.3 |  |  | $ | 3,399.4 |
____________________________ (1)Debt issuance costs that were deducted from the carrying amounts of the homebuilding senior notes totaled $11.7 million and $5.4 million at June 30, 2020 and September 30, 2019, respectively. (2)Homebuilding other secured notes at June 30, 2020 excludes $6.5 million of earnest money notes payable due to Forestar. These intercompany notes are eliminated in consolidation. (3)Forestar’s 3.75% convertible senior notes due March 2020 included an unamortized fair value adjustment of $2.4 million at September 30, 2019. (4)Debt issuance costs that were deducted from the carrying amount of Forestar’s senior notes totaled $9.4 million and $6.2 million at June 30, 2020 and September 30, 2019, respectively. Homebuilding: The Company has a $1.59 billion senior unsecured homebuilding revolving credit facility with an uncommitted accordion feature that could increase the size of the facility to $2.5 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 100% 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 LIBOR plus an applicable margin, as defined in the credit agreement governing the facility. The maturity date of the facility is October 2, 2024. Borrowings and repayments under the facility were $1.06 billion each during the nine months ended June 30, 2020. At June 30, 2020, there were no borrowings outstanding and $127.8 million of letters of credit issued under the revolving credit facility, resulting in available capacity of approximately $1.46 billion. In May 2020, the Company entered into a credit agreement providing for a $375 million 364-day senior unsecured homebuilding revolving credit facility with an uncommitted accordion feature that could increase the size of the facility to $550 million, subject to certain conditions and availability of additional bank commitments. The interest rate on borrowings under the 364-day revolving credit facility may be based on either the Prime Rate or LIBOR plus an applicable margin, as defined in the credit agreement governing the facility. The maturity date of the facility is May 27, 2021. There were no borrowings under the facility for the period from its inception through June 30, 2020. The Company’s homebuilding revolving credit facilities impose restrictions on its operations and activities, including requiring the maintenance of a maximum allowable leverage ratio and a borrowing base restriction if the leverage ratio exceeds a certain level. Both facilities include substantially the same affirmative and negative covenants, events of default and financial covenants. These covenants are measured as defined in the credit agreements governing the facilities 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 facilities or cause any outstanding borrowings to become due and payable prior to maturity. The credit agreements governing the facilities and the indentures governing the senior notes also impose restrictions on the creation of secured debt and liens. At June 30, 2020, the Company was in compliance with all of the covenants, limitations and restrictions of its homebuilding revolving credit facilities and public debt obligations. D.R. Horton has an automatically effective universal shelf registration statement filed with the SEC in August 2018, registering debt and equity securities that the Company may issue from time to time in amounts to be determined. In October 2019, the Company issued $500 million principal amount of 2.5% senior notes due October 15, 2024, with interest payable semi-annually. The annual effective interest rate of these notes after giving effect to the amortization of the discount and financing costs is 2.7%. In February 2020, the Company repaid $500 million principal amount of its 4.0% senior notes at maturity. In May 2020, the Company issued $500 million principal amount of 2.6% senior notes due October 15, 2025 with interest payable semi-annually. The annual effective interest rate of these notes after giving effect to the amortization of the discount and financing costs is 2.8%. Effective July 30, 2019, the Board of Directors authorized the repurchase of up to $500 million of the Company’s debt securities. The authorization has no expiration date. All of the $500 million authorization was remaining at June 30, 2020. Forestar: Forestar has a $380 million senior unsecured revolving credit facility with an uncommitted accordion feature that could increase the size of the facility to $570 million, 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 the greater of $100 million and 50% of the revolving credit commitment. Borrowings under the revolving credit facility are subject to a borrowing base based on Forestar’s book value of its real estate assets and unrestricted cash. Letters of credit issued under the facility reduce the available borrowing capacity. At June 30, 2020, there were no borrowings outstanding and $31.6 million of letters of credit issued under the revolving credit facility, resulting in available capacity of $348.4 million. The maturity date of the facility is October 2, 2022, which can be extended by up to one year on up to two additional occasions, subject to the approval of lenders holding a majority of the commitments. The Forestar revolving credit facility includes customary affirmative and negative covenants, events of default and financial covenants. The financial covenants require Forestar to maintain a minimum level of tangible net worth, a minimum level of liquidity and a maximum allowable leverage ratio. 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. In February 2020, Forestar issued $300 million principal amount of 5.0% senior notes pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended. The notes are due March 1, 2028, with interest payable semiannually, and represent unsecured obligations of Forestar. The annual effective interest rate of these notes after giving effect to the amortization of financing costs is 5.2%. These notes may be redeemed prior to maturity, subject to certain limitations and premiums defined in the indenture agreement. Forestar also has $350 million principal amount of 8.0% senior notes that mature April 15, 2024. In March 2020, Forestar repaid $118.9 million principal amount of its 3.75% convertible senior notes in cash at maturity. Forestar’s revolving credit facility and its senior notes are not guaranteed by D.R. Horton, Inc. or any of the subsidiaries that guarantee the Company’s homebuilding debt. At June 30, 2020, Forestar was in compliance with all of the covenants, limitations and restrictions of its revolving credit facility and senior note obligations. Financial Services: The Company’s mortgage subsidiary, DHI Mortgage, has a mortgage repurchase facility that provides financing and liquidity to DHI Mortgage by facilitating purchase transactions in which DHI Mortgage transfers eligible loans to the counterparties upon receipt of funds from the counterparties. 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. In May 2020, the mortgage repurchase facility was amended to increase its total capacity to $1.35 billion; however, the capacity increases without requiring additional commitments to $1.575 billion for approximately 30 days at the end of the third quarter of fiscal 2020 and first quarter of fiscal 2021 and for approximately 45 days at the end of fiscal 2020. The capacity of the facility can also be increased to $1.8 billion subject to the availability of additional commitments. The maturity date of the facility is February 19, 2021. As of June 30, 2020, $1.39 billion of mortgage loans held for sale with a collateral value of $1.36 billion were pledged under the mortgage repurchase facility. DHI Mortgage had an obligation of $1.2 billion outstanding under the mortgage repurchase facility at June 30, 2020 at a 2.4% 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 leverage ratio and its minimum required liquidity. These covenants are measured and reported to the lenders monthly. At June 30, 2020, DHI Mortgage was in compliance with all of the conditions and covenants of the mortgage repurchase facility.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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