Quarterly report pursuant to Section 13 or 15(d)

Operating and Reporting Segments

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Operating and Reporting Segments
 9 Months Ended
Sep. 30, 2011
Operating and Reporting Segments [Abstract]  
OPERATING AND REPORTING SEGMENTS
NOTE 10 — OPERATING AND REPORTING SEGMENTS
As defined in ASC 280-10, Segment Reporting, we have seven operating segments (the seven states in which we operate). These segments are engaged in the business of acquiring and developing land, constructing homes, marketing and selling those homes, and providing warranty and customer service. We aggregate our operating segments into a reporting segment based on similar long-term economic characteristics and geographical proximity. Our reporting segments are as follows:
West: California and Nevada
Central: Texas, Arizona and Colorado
East: Florida and North Carolina
Management’s evaluation of segment performance is based on segment operating income/(loss), which we define as homebuilding and land revenue 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,” to the consolidated financial statements in our 2010 Annual Report on Form 10-K. Operating results for each segment may not be indicative of the results for such segment had it been an independent, stand-alone entity. The following is our segment information (in thousands):
                                 
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2011     2010     2011     2010  
Revenue (1):
                               
West
  $ 32,930     $ 47,207     $ 88,290     $ 127,126  
Central
    156,935       161,658       458,623       535,682  
East
    27,669       24,938       68,341       64,204  
 
                       
Consolidated total
    217,534       233,803       615,254       727,012  
 
                       
 
                               
Operating income/(loss) (2):
                               
West
    363       3,316       (84 )     6,474  
Central
    5,128       6,830       17,203       32,446  
East
    1,721       2,874       5,962       5,989  
 
                       
 
                               
Segment operating income
    7,212       13,020       23,081       44,909  
Corporate and unallocated (3)
    (5,443 )     (5,761 )     (15,620 )     (16,748 )
Earnings from unconsolidated entities, net
    1,797       1,243       3,931       3,832  
Interest expense
    (7,517 )     (8,425 )     (23,036 )     (25,273 )
Other income, net
    876       654       2,872       4,637  
Loss on extinguishment of debt
    0       0       0       (3,454 )
 
                       
 
                               
(Loss)/income before income taxes
  $ (3,075 )   $ 731     $ (8,772 )   $ 7,903  
 
                       
 
     
(1)  
Revenue includes the following land closing revenue, by segment: nine months ended September 30, 2011 — $100,000 in Central Region; nine months ended September 30, 2010 — $1.2 million in Central Region.
 
(2)  
See Note 2 of this Quarterly Report on Form 10-Q for a breakout of real estate-related impairments by region.
 
(3)  
Balance consists primarily of corporate costs and numerous shared service functions such as finance and treasury that are not allocated to the reporting segments.
                                         
    At September 30, 2011  
                            Corporate and        
    West     Central     East     Unallocated (1)     Total  
Deposits on real estate under option or contract
  $ 1,849     $ 10,904     $ 565     $ 0     $ 13,318  
Real estate
    209,044       520,992       68,021       0       798,057  
Investments in unconsolidated entities
    176       10,153       13       441       10,783  
Other assets
    13,103       80,650       7,838       309,794       411,385  
 
                             
Total assets
  $ 224,172     $ 622,699     $ 76,437     $ 310,235     $ 1,233,543  
 
                             
                                         
    At December 31, 2010  
                            Corporate and        
    West     Central     East     Unallocated (1)     Total  
Deposits on real estate under option
                                       
or contract
  $ 50     $ 9,754     $ 555     $ 0     $ 10,359  
Real estate
    191,882       499,176       47,870       0       738,928  
Investments in unconsolidated entities
    110       10,507       29       341       10,987  
Other assets
    3,501       32,961       7,873       420,329       464,664  
 
                             
Total assets
  $ 195,543     $ 552,398     $ 56,327     $ 420,670     $ 1,224,938  
 
                             
 
     
(1)  
Balance consists primarily of cash and other corporate assets not allocated to the reporting segments.