Related Party Transactions (Notes)

3 Months Ended

Dec. 31, 2021

Related Party Transactions

The Company has a Shared Services Agreement with D.R. Horton whereby D.R. Horton provides the Company with certain administrative, compliance, operational and procurement services. In the three months ended December 31, 2021 and 2020, selling, general and administrative expense in the consolidated statements of operations includes $1.0 million and $1.1 million for these shared services, $1.6 million and $1.0 million for the cost of health insurance and other employee benefits and $0.9 million and $1.1 million for other corporate and administrative expenses paid by D.R. Horton on behalf of the Company.

Under the terms of the Master Supply Agreement with D.R. Horton, both companies identify land development opportunities to expand the Company's portfolio of assets. At December 31, 2021 and September 30, 2021, the Company owned approximately 65,700 and 64,400 residential lots, of which D.R. Horton had the following involvement.


	December 31, 2021		September 30, 2021
	(Dollars in millions)
Residential lots under contract to sell to D.R. Horton	20,000		21,000
Residential lots subject to right of first offer with D.R. Horton	18,300		18,200
Earnest money deposits from D.R. Horton for lots under contract	$	134.8	$	143.1
Earnest money notes from D.R. Horton for lots under contract	$	0.6	$	0.7
Remaining purchase price of lots under contract with D.R. Horton	$	1,491.5	$	1,582.7

In the three months ended December 31, 2021 and 2020, the Company sold 4,516 and 3,567 residential lots, and lot sales revenues were $404.1 million and $307.0 million. Lot sales and lot sales revenue to D.R. Horton in those periods were as follows.


	Three Months Ended December 31,
	2021		2020
	(Dollars in millions)
Residential single-family lots sold to D.R. Horton	4,014		3,389
Residential lot sales revenues from sales to D.R. Horton	$	328.0	$	294.0

In addition, the net impact of the change in contract liabilities increased revenues on lot sales to D.R. Horton by $2.1 million and $0.2 million in the three months ended December 31, 2021 and 2020, respectively.

In the three months ended December 31, 2021 and 2020, the Company reimbursed D.R. Horton approximately $2.7 million and $16.1 million for previously paid earnest money and $21.6 million and $20.9 million for pre-acquisition and other due diligence and development costs related to land purchase contracts whereby D.R. Horton assigned its rights under these land purchase contracts to the Company.

In the three months ended December 31, 2021 and 2020, the Company paid D.R. Horton $0.9 million and $1.7 million for land development services. These amounts are included in cost of sales in the Company’s consolidated statements of operations.

At December 31, 2021 and September 30, 2021, undeveloped land primarily consists of undeveloped land which the Company has the contractual right to sell to D.R. Horton at a sales price equal to the carrying value of the land at the time of sale plus additional consideration of 12% to 16% per annum.

At December 31, 2021 and September 30, 2021, accrued expenses and other liabilities on the Company's consolidated balance sheets included $7.7 million and $6.7 million, respectively, owed to D.R. Horton for any accrued and unpaid shared service charges, land purchase contract deposits and due diligence and other development cost reimbursements.