Segment Information (Tables)

9 Months Ended

Jun. 30, 2021

Segment Reporting [Abstract]

Schedule of segment reporting information, by segment

Financial information relating to the Company’s reporting segments is as follows:

	June 30, 2021
	Homebuilding		Forestar (1)		Financial Services		Other		Eliminations and Other Adjustments (2)		Consolidated
	(In millions)
Assets
Cash and cash equivalents	$	1,673.8	$	116.0	$	101.1	$	51.8	$	—	$	1,942.7
Restricted cash	11.5		—		14.6		0.3		—		26.4
Inventories:
Construction in progress and finished homes	7,837.8		—		—		—		(93.7)		7,744.1
Residential land and lots — developed and under development	5,675.4		1,777.9		—		—		(45.4)		7,407.9
Land held for development	30.4		83.5		—		—		—		113.9
Land held for sale	23.5		—		—		—		—		23.5
Rental properties	303.1		—		—		436.3		(17.1)		722.3
	13,870.2		1,861.4		—		436.3		(156.2)		16,011.7
Mortgage loans held for sale	—		—		1,644.1		—		—		1,644.1
Deferred income taxes, net	152.5		—		—		—		(5.4)		147.1
Property and equipment, net	280.3		2.2		3.4		81.1		—		367.0
Other assets	1,381.5		35.4		122.6		62.7		(111.2)		1,491.0
Goodwill	134.3		—		—		—		29.2		163.5
	$	17,504.1	$	2,015.0	$	1,885.8	$	632.2	$	(243.6)	$	21,793.5
Liabilities
Accounts payable	$	1,171.1	$	45.6	$	—	$	34.2	$	—	$	1,250.9
Accrued expenses and other liabilities	1,773.5		294.9		90.7		14.2		(172.0)		2,001.3
Notes payable	2,620.0		704.1		1,093.6		—		(1.4)		4,416.3
	$	5,564.6	$	1,044.6	$	1,184.3	$	48.4	$	(173.4)	$	7,668.5

______________

(1)Amounts are presented on Forestar’s historical cost basis, consistent with the manner in which management evaluates segment performance.

(2)Amounts primarily represent the elimination of intercompany transactions and, to a lesser extent, purchase accounting adjustments related to the Forestar acquisition.

	September 30, 2020
	Homebuilding		Forestar (1)		Financial Services		Other		Eliminations and Other Adjustments (2)		Consolidated
	(In millions)
Assets
Cash and cash equivalents	$	2,551.1	$	394.3	$	55.6	$	17.5	$	—	$	3,018.5
Restricted cash	9.5		—		11.9		0.2		—		21.6
Inventories:
Construction in progress and finished homes	6,037.5		—		—		—		(53.4)		5,984.1
Residential land and lots — developed and under development	4,901.4		1,304.3		—		—		(33.9)		6,171.8
Land held for development	47.8		5.4		—		—		—		53.2
Land held for sale	28.3		—		—		—		—		28.3
	11,015.0		1,309.7		—		—		(87.3)		12,237.4
Mortgage loans held for sale	—		—		1,529.0		—		—		1,529.0
Deferred income taxes, net	142.3		—		—		—		2.6		144.9
Property and equipment, net	372.8		1.1		3.9		308.9		(3.0)		683.7
Other assets	996.4		34.8		125.8		52.8		(96.1)		1,113.7
Goodwill	134.3		—		—		—		29.2		163.5
	$	15,221.4	$	1,739.9	$	1,726.2	$	379.4	$	(154.6)	$	18,912.3
Liabilities
Accounts payable	$	859.3	$	29.2	$	—	$	12.0	$	—	$	900.5
Accrued expenses and other liabilities	1,438.3		197.8		86.8		12.2		(128.1)		1,607.0
Notes payable	2,514.4		641.1		1,132.6		—		(4.8)		4,283.3
	$	4,812.0	$	868.1	$	1,219.4	$	24.2	$	(132.9)	$	6,790.8

______________

(1)Amounts are presented on Forestar’s historical cost basis, consistent with the manner in which management evaluates segment performance.

(2)Amounts primarily represent the elimination of intercompany transactions and, to a lesser extent, purchase accounting adjustments related to the Forestar acquisition.

	Three Months Ended June 30, 2021
	Homebuilding		Forestar (1)		Financial Services		Other		Eliminations and Other Adjustments (2)		Consolidated
	(In millions)
Revenues
Home sales	$	7,040.1	$	—	$	—	$	—	$	—	$	7,040.1
Land/lot sales and other (4)	30.2		312.9		—		15.9		(303.2)		55.8
Financial services	—		—		188.7		—		—		188.7
	7,070.3		312.9		188.7		15.9		(303.2)		7,284.6
Cost of sales
Home sales (3)	5,219.2		—		—		—		(40.0)		5,179.2
Land/lot sales and other (4)	14.4		256.4		—		—		(243.0)		27.8
Inventory and land option charges	4.9		0.7		—		—		—		5.6
	5,238.5		257.1		—		—		(283.0)		5,212.6
Selling, general and administrative expense	502.0		16.9		127.0		9.6		0.2		655.7
Loss on extinguishment of debt	—		18.1		—		—		—		18.1
Other (income) expense	(7.1)		(0.3)		(8.6)		(1.4)		—		(17.4)
Income before income taxes	$	1,336.9	$	21.1	$	70.3	$	7.7	$	(20.4)	$	1,415.6

______________

(1)Results are presented on Forestar’s historical cost basis, consistent with the manner in which management evaluates segment performance.

(2)Amounts primarily represent the elimination of intercompany transactions and, to a lesser extent, purchase accounting adjustments related to the Forestar acquisition.

(3)Amount in the Eliminations and Other Adjustments column represents the recognition of profit on lots sold from Forestar to the homebuilding segment. Intercompany profit is eliminated in the consolidated financial statements when Forestar sells lots to the homebuilding segment and is recognized in the consolidated financial statements when the homebuilding segment closes homes on the lots to homebuyers.

(4)Homebuilding segment other revenues and other cost of sales include the sale of a single-family rental community for $23.1 million in revenues and $11.4 million of gross profit.

	Nine Months Ended June 30, 2021
	Homebuilding		Forestar (1)		Financial Services		Other		Eliminations and Other Adjustments (2)		Consolidated
	(In millions)
Revenues
Home sales	$	18,909.2	$	—	$	—	$	—	$	—	$	18,909.2
Land/lot sales and other (4)	67.4		907.1		—		45.9		(865.8)		154.6
Financial services	—		—		601.1		—		—		601.1
	18,976.6		907.1		601.1		45.9		(865.8)		19,664.9
Cost of sales
Home sales (3)	14,196.3		—		—		—		(103.3)		14,093.0
Land/lot sales and other (4)	40.9		752.2		—		—		(707.7)		85.4
Inventory and land option charges	16.0		1.6		—		—		—		17.6
	14,253.2		753.8		—		—		(811.0)		14,196.0
Selling, general and administrative expense	1,422.7		48.7		360.4		30.9		0.5		1,863.2
Gain on sale of assets (5)	(13.1)		—		—		(0.9)		—		(14.0)
Loss on extinguishment of debt	—		18.1		—		—		—		18.1
Other (income) expense	(10.4)		(1.4)		(21.4)		5.8		(0.8)		(28.2)
Income before income taxes	$	3,324.2	$	87.9	$	262.1	$	10.1	$	(54.5)	$	3,629.8
Summary Cash Flow Information:
Depreciation and amortization	$	44.2	$	0.3	$	1.3	$	10.5	$	0.4	$	56.7
Cash provided by (used in) operating activities	$	276.1	$	(340.6)	$	96.2	$	(58.2)	$	(8.0)	$	(34.5)

______________

(1)Results are presented on Forestar’s historical cost basis, consistent with the manner in which management evaluates segment performance.

(2)Amounts primarily represent the elimination of intercompany transactions and, to a lesser extent, purchase accounting adjustments related to the Forestar acquisition.

(3)Amount in the Eliminations and Other Adjustments column represents the recognition of profit on lots sold from Forestar to the homebuilding segment. Intercompany profit is eliminated in the consolidated financial statements when Forestar sells lots to the homebuilding segment and is recognized in the consolidated financial statements when the homebuilding segment closes homes on the lots to homebuyers.

(4)Homebuilding segment other revenues and other cost of sales include the third quarter sale of a single-family rental community for $23.1 million in revenues and $11.4 million of gross profit.

(5)In December 2020, the Company sold a single-family rental community for $31.8 million, which resulted in a gain on sale of $13.1 million in the homebuilding segment and $0.9 million in the other businesses.

	Three Months Ended June 30, 2020
	Homebuilding		Forestar (1)		Financial Services		Other		Eliminations and Other Adjustments (2)		Consolidated
	(In millions)
Revenues
Home sales	$	5,207.6	$	—	$	—	$	—	$	—	$	5,207.6
Land/lot sales and other	14.5		177.9		—		8.9		(175.5)		25.8
Financial services	—		—		156.6		—		—		156.6
	5,222.1		177.9		156.6		8.9		(175.5)		5,390.0
Cost of sales
Home sales (3)	4,082.3		—		—		—		(16.8)		4,065.5
Land/lot sales and other	10.2		157.0		—		—		(153.0)		14.2
Inventory and land option charges	4.9		0.1		—		—		—		5.0
	4,097.4		157.1		—		—		(169.8)		4,084.7
Selling, general and administrative expense	415.1		11.2		93.9		7.1		0.2		527.5
Other (income) expense	(0.2)		(0.7)		(6.1)		2.4		—		(4.6)
Income (loss) before income taxes	$	709.8	$	10.3	$	68.8	$	(0.6)	$	(5.9)	$	782.4

______________

(1)Results are presented on Forestar’s historical cost basis, consistent with the manner in which management evaluates segment performance.

(2)Amounts primarily represent the elimination of intercompany transactions and, to a lesser extent, purchase accounting adjustments related to the Forestar acquisition.

(3)Amount in the Eliminations and Other Adjustments column represents the recognition of profit on lots sold from Forestar to the homebuilding segment. Intercompany profit is eliminated in the consolidated financial statements when Forestar sells lots to the homebuilding segment and is recognized in the consolidated financial statements when the homebuilding segment closes homes on the lots to homebuyers.

	Nine Months Ended June 30, 2020
	Homebuilding		Forestar (1)		Financial Services		Other		Eliminations and Other Adjustments (2)		Consolidated
	(In millions)
Revenues
Home sales	$	13,434.2	$	—	$	—	$	—	$	—	$	13,434.2
Land/lot sales and other	49.7		584.3		—		27.2		(548.6)		112.6
Financial services	—		—		364.0		—		—		364.0
	13,483.9		584.3		364.0		27.2		(548.6)		13,910.8
Cost of sales
Home sales (3)	10,569.2		—		—		—		(34.4)		10,534.8
Land/lot sales and other	34.9		509.8		—		—		(477.6)		67.1
Inventory and land option charges	17.3		0.5		—		—		—		17.8
	10,621.4		510.3		—		—		(512.0)		10,619.7
Selling, general and administrative expense	1,135.3		32.8		257.7		23.9		0.4		1,450.1
Gain on sale of assets (4)	—		(0.1)		—		(59.4)		—		(59.5)
Other (income) expense	(9.7)		(4.8)		(17.7)		5.8		—		(26.4)
Income before income taxes	$	1,736.9	$	46.1	$	124.0	$	56.9	$	(37.0)	$	1,926.9
Summary Cash Flow Information:
Depreciation and amortization	$	49.8	$	0.2	$	1.2	$	5.8	$	0.4	$	57.4
Cash provided by (used in) operating activities	$	1,157.0	$	(205.7)	$	(347.7)	$	2.1	$	(16.8)	$	588.9

______________

(1)Results are presented on Forestar’s historical cost basis, consistent with the manner in which management evaluates segment performance.

(2)Amounts primarily represent the elimination of intercompany transactions and, to a lesser extent, purchase accounting adjustments related to the Forestar acquisition.

(3)Amount in the Eliminations and Other Adjustments column represents the recognition of profit on lots sold from Forestar to the homebuilding segment. Intercompany profit is eliminated in the consolidated financial statements when Forestar sells lots to the homebuilding segment and is recognized in the consolidated financial statements when the homebuilding segment closes homes on the lots to homebuyers.

(4)In the nine months ended June 30, 2020, the Company sold two multi-family rental properties for a total of $128.5 million, which resulted in gains on sale totaling $59.4 million in the other businesses.

Homebuilding Inventories by Reporting Segment (1)	June 30, 2021		September 30, 2020
	(In millions)
East (2)	$	1,605.6	$	1,328.3
Midwest (2)	1,225.9		958.5
Southeast (2)	3,510.6		2,919.9
South Central (2)	3,824.6		2,879.9
Southwest (2)	955.7		695.8
West (2)	2,536.6		2,009.1
Corporate and unallocated (3)	211.2		223.5
	$	13,870.2	$	11,015.0

____________________________

(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)Single-family rental properties included in homebuilding inventories at June 30, 2021 totaled $303.1 million, of which $31.7 million were in the East region, $20.2 million were in the Midwest region, $156.3 million were in the Southeast region, $33.5 million were in the South Central region, $25.5 million were in the Southwest region and $35.9 million were in the West region.

(3)Corporate and unallocated consists primarily of homebuilding capitalized interest and property taxes.

Homebuilding Results by Reporting Segment	Three Months Ended June 30,				Nine Months Ended June 30,
	2021		2020		2021		2020
	(In millions)
Revenues
East	$	1,032.7	$	736.3	$	2,703.4	$	1,836.5
Midwest	514.6		373.3		1,396.1		964.6
Southeast	2,300.1		1,629.1		6,133.4		4,096.4
South Central	1,709.8		1,376.4		4,688.8		3,401.5
Southwest	291.0		216.1		766.7		626.8
West	1,222.1		890.9		3,288.2		2,558.1
	$	7,070.3	$	5,222.1	$	18,976.6	$	13,483.9
Inventory and Land Option Charges
East	$	1.4	$	0.2	$	2.7	$	(0.1)
Midwest	0.5		0.4		0.7		1.9
Southeast	1.0		2.0		8.8		6.3
South Central	1.5		1.9		2.1		6.3
Southwest	—		0.1		0.4		0.1
West	0.5		0.3		1.3		2.8
	$	4.9	$	4.9	$	16.0	$	17.3
Income before Income Taxes
East	$	190.3	$	106.9	$	468.8	$	240.1
Midwest	67.2		34.1		177.3		76.4
Southeast	465.3		233.5		1,147.8		567.4
South Central	323.1		201.8		854.6		490.7
Southwest	46.7		29.7		124.8		95.0
West	244.3		103.8		550.9		267.3
	$	1,336.9	$	709.8	$	3,324.2	$	1,736.9