Quarterly report pursuant to Section 13 or 15(d)

OPERATING AND REPORTING SEGMENTS

v3.19.2
OPERATING AND REPORTING SEGMENTS
6 Months Ended
Jun. 30, 2019
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 home and land closing revenues less cost of home and land closings, 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,
 
2019
 
2018
 
2019
 
2018
Homebuilding revenue (1):
 
 
 
 
 
 
 
West
$
299,002

 
$
351,647

 
$
571,968

 
$
668,875

Central
290,532

 
260,106

 
482,138

 
451,976

East
275,076

 
265,742

 
518,649

 
499,208

Consolidated total
$
864,610

 
$
877,495

 
$
1,572,755

 
$
1,620,059

Homebuilding segment operating income:
 
 
 
 
 
 
 
West
$
24,074

 
$
33,062

 
$
42,382

 
$
54,183

Central
28,480

 
25,576

 
40,816

 
39,843

East
19,216

 
14,564

 
28,909

 
25,923

Total homebuilding segment operating income
71,770

 
73,202

 
112,107

 
119,949

Financial services segment profit
6,031

 
5,651

 
10,733

 
9,871

Corporate and unallocated costs (2)
(9,298
)
 
(9,402
)
 
(18,928
)
 
(16,674
)
Interest expense
(3,197
)
 
(44
)
 
(7,282
)
 
(180
)
Other income, net (3)
2,368

 
1,778

 
3,414

 
7,103

Net earnings before income taxes
$
67,674

 
$
71,185

 
$
100,044

 
$
120,069

 
(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,
 
2019
 
2018
 
2019
 
2018
Land closing revenue:
 
 
 
 
 
 
 
West
$
30

 
$
1,935

 
$
30

 
$
14,390

Central
693

 
762

 
693

 
887

East
834

 
2,415

 
10,329

 
3,867

Total
$
1,557

 
$
5,112

 
$
11,052

 
$
19,144


(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.
(3)
For the six months ended June 30, 2018, Other income, net includes a favorable $4.8 million legal settlement from long-standing litigation related to a previous joint venture in Nevada.
 
 
At June 30, 2019
 
 
West
 
Central
 
East
 
Financial Services
 
Corporate  and
Unallocated
 
Total
Deposits on real estate under option or contract
 
$
8,724

 
$
13,383

 
$
24,213

 
$

 
$

 
$
46,320

Real estate
 
1,177,788

 
698,204

 
859,891

 

 

 
2,735,883

Investments in unconsolidated entities
 
235

 
6,353

 

 

 
967

 
7,555

Other assets
 
58,691

(1)
114,132

(2)
81,866

(3)
708

 
421,721

(4)
677,118

Total assets
 
$
1,245,438

 
$
832,072

 
$
965,970

 
$
708

 
$
422,688

 
$
3,466,876


(1)
Balance consists primarily of property and equipment and cash.
(2)
Balance consists primarily of development reimbursements from local municipalities and cash.
(3)
Balance consists primarily of goodwill (see Note 10), prepaid expenses and other assets and property and equipment.
(4)
Balance consists primarily of cash, prepaid expenses and other assets and our deferred tax asset. 
 
 
At December 31, 2018
 
 
West
 
Central
 
East
 
Financial Services
 
Corporate  and
Unallocated
 
Total
Deposits on real estate under option or contract
 
$
7,514

 
$
13,870

 
$
30,026

 
$

 
$

 
$
51,410

Real estate
 
1,188,975

 
679,422

 
874,224

 

 

 
2,742,621

Investments in unconsolidated entities
 
8,320

 
6,396

 

 

 
2,764

 
17,480

Other assets
 
51,115

(1)
117,150

(2)
85,869

(3)
1,013

 
298,821

(4)
553,968

Total assets
 
$
1,255,924

 
$
816,838

 
$
990,119

 
$
1,013

 
$
301,585

 
$
3,365,479


(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 10), cash and property and equipment.
(4)
Balance consists primarily of cash.