Quarterly report pursuant to Section 13 or 15(d)

OPERATING AND REPORTING SEGMENTS

v3.7.0.1
OPERATING AND REPORTING SEGMENTS
 6 Months Ended
Jun. 30, 2017
Segment Reporting [Abstract]  
OPERATING AND REPORTING SEGMENTS
OPERATING AND REPORTING SEGMENTS    
We operate with two principal business segments: homebuilding and financial services. As defined in ASC 280-10, Segment Reporting, we have nine homebuilding operating segments. The homebuilding segments are engaged in the business of acquiring and developing land, constructing homes, marketing and selling those homes and providing warranty and customer services. We aggregate our homebuilding operating segments into reporting segments based on similar long-term economic characteristics and geographical proximity. Our current reportable homebuilding segments are as follows:
 
West:
Arizona, California and Colorado
 
 
Central:
Texas
 
 
East:
Florida, Georgia, North Carolina, South Carolina and Tennessee
 

Management’s evaluation of segment performance is based on segment operating income, which we define as homebuilding and land revenues less cost of home construction, commissions and other sales costs, land development and other land sales costs and other costs incurred by or allocated to each segment, including impairments. Each reportable segment follows the same accounting policies described in Note 1, “Organization and Basis of Presentation.” Operating results for each segment may not be indicative of the results for such segment had it been an independent, stand-alone entity for the periods presented.
The following segment information is in thousands: 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2017
 
2016
 
2017
 
2016
Homebuilding revenue (1):
 
 
 
 
 
 
 
West
$
369,574

 
$
332,643

 
$
681,378

 
$
593,689

Central
225,679

 
208,701

 
400,510

 
370,590

East
206,725

 
256,552

 
392,862

 
431,383

Consolidated total
$
801,978

 
$
797,896

 
$
1,474,750

 
$
1,395,662

Homebuilding segment operating income:
 
 
 
 
 
 
 
West
$
35,131

 
$
27,495

 
$
59,143

 
$
43,558

Central
23,230

 
19,784

 
37,120

 
33,678

East
5,285

 
12,322

 
7,721

 
18,181

Total homebuilding segment operating income
63,646

 
59,601

 
103,984

 
95,417

Financial services segment profit
5,557

 
5,763

 
9,847

 
9,809

Corporate and unallocated costs (2)
(7,028
)
 
(6,774
)
 
(15,545
)
 
(14,589
)
Earnings/(loss) from other unconsolidated entities, net
570

 
573

 
943

 
416

Interest expense
(1,620
)
 
(1,672
)
 
(2,445
)
 
(4,960
)
Other income, net
2,080

 
1,545

 
3,190

 
1,828

Net earnings before income taxes
$
63,205

 
$
59,036

 
$
99,974

 
$
87,921

 

(1)
Homebuilding revenue includes the following land closing revenue, by segment, as outlined in the table below.
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2017
 
2016
 
2017
 
2016
Land closing revenue:
 
 
 
 
 
 
 
West
$
—

 
$
65

 
$
11,800

 
$
65

Central
—

 
1,794

 
122

 
3,712

East
4,198

 
192

 
4,431

 
423

Total
$
4,198

 
$
2,051

 
$
16,353

 
$
4,200


(2)
Balance consists primarily of corporate costs and numerous shared service functions such as finance and treasury that are not allocated to the homebuilding or financial services reporting segments.
 
 
At June 30, 2017
 
 
West
 
Central
 
East
 
Financial Services
 
Corporate  and
Unallocated
 
Total
Deposits on real estate under option or contract
 
$
20,491

 
$
23,788

 
$
30,471

 
$
—

 
$
—

 
$
74,750

Real estate
 
1,179,257

 
671,392

 
787,758

 
—

 
—

 
2,638,407

Investments in unconsolidated entities
 
7,708

 
7,205

 
—

 
—

 
1,765

 
16,678

Other assets
 
46,699

(1)
89,947

(2)
73,315

(3)
689

 
260,207

(4)
470,857

Total assets
 
$
1,254,155

 
$
792,332

 
$
891,544

 
$
689

 
$
261,972

 
$
3,200,692


(1)
Balance consists primarily of cash, real estate not owned and property and equipment.
(2)
Balance consists primarily of development reimbursements from local municipalities and cash.
(3)
Balance consists primarily of goodwill (see Note 9) and prepaid permits and fees to local municipalities.
(4)
Balance consists primarily of cash and our deferred tax asset. 
 
 
At December 31, 2016
 
 
West
 
Central
 
East
 
Financial Services
 
Corporate  and
Unallocated
 
Total
Deposits on real estate under option or contract
 
$
25,863

 
$
27,669

 
$
32,024

 
$
—

 
$
—

 
$
85,556

Real estate
 
1,120,038

 
595,485

 
706,540

 
—

 
—

 
2,422,063

Investments in unconsolidated entities
 
7,362

 
7,450

 
—

 
—

 
2,285

 
17,097

Other assets
 
45,624

(1)
94,299

(2)
93,245

(3)
812

 
129,995

(4)
363,975

Total assets
 
$
1,198,887

 
$
724,903

 
$
831,809

 
$
812

 
$
132,280

 
$
2,888,691


(1)
Balance consists primarily of cash and property and equipment.
(2)
Balance consists primarily of development reimbursements from local municipalities and cash.
(3)
Balance consists primarily of goodwill (see Note 9), prepaid permits and fees to local municipalities and cash.
(4)
Balance consists primarily of cash and our deferred tax asset.