Quarterly report pursuant to Section 13 or 15(d)

Operating and Reporting Segments

v2.4.0.8
Operating and Reporting Segments
 9 Months Ended
Sep. 30, 2013
Segment Reporting [Abstract]  
OPERATING AND REPORTING SEGMENTS
NOTE 12 — 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 seven homebuilding operating segments (the seven states in which we operate) within our homebuilding business. 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 homebuilding operating segments into reporting segments based on similar long-term economic characteristics and geographical proximity. In latter 2012, management's evaluation of segment reporting led to a re-grouping of our homebuilding segments to more closely align them into long-term expected profitability trends and, accordingly, all prior year segment financial information has been updated to reflect our new aggregation. Our current reportable homebuilding segments are as follows:
West:       Arizona, California and Colorado (1)
Central:  Texas
East:       Florida, the Carolinas and Tennessee

(1)    Activity for our wind-down Nevada operations is reflected in the West Region's results.
Management's evaluation of homebuilding 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 our 2012 Form 10-K in Note 1, “Business and Summary of Significant Accounting Policies.” 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 September 30
 
Nine Months Ended September 30
 
2013
 
2012
 
2013
 
2012
Homebuilding revenue (1):
 
 
 
 
 
 
 
West
$
259,669

 
$
186,507

 
$
695,615

 
$
415,471

Central
139,307

 
104,526

 
357,406

 
279,004

East
93,104

 
51,610

 
225,444

 
134,613

Consolidated total
$
492,080

 
$
342,643

 
$
1,278,465

 
$
829,088

Homebuilding segment operating income:
 
 
 
 
 
 
 
West
$
41,298

 
$
15,319

 
$
95,356

 
$
26,970

Central
12,677

 
5,673

 
22,320

 
11,325

East
9,990

 
3,691

 
19,991

 
9,768

Total homebuilding segment operating income
63,965

 
24,683

 
137,667

 
48,063

Financial services profit
4,294

 
2,985

 
11,515

 
6,743

Corporate and unallocated (2)
(8,662
)
 
(7,323
)
 
(22,011
)
 
(17,233
)
Earnings/(loss) from other unconsolidated entities, net
46

 
(74
)
 
(229
)
 
(348
)
Interest expense
(3,462
)
 
(5,009
)
 
(13,113
)
 
(18,718
)
Other income/(expense), net
605

 
(8,276
)
 
1,760

 
(7,481
)
Loss on early extinguishment of debt
—

 
—

 
(3,796
)
 
(5,772
)
Earnings before income taxes
$
56,786

 
$
6,986

 
$
111,793

 
$
5,254

 
(1)
Homebuilding revenue includes the following land closing revenue, by segment:
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2013
 
2012
 
2013
 
2012
Land closing revenue:
 
 
 
 
 
 
 
West
5,875

 
$
6,488

 
$
11,616

 
$
6,488

Central
3,058

 
485

 
13,482

 
1,568

East
—

 
790

 
3,470

 
790

Consolidated total
$
8,933

 
$
7,763

 
$
28,568

 
$
8,846


(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 September 30, 2013
 
West
 
Central
 
East
 
Financial Services
 
Corporate and
Unallocated (1)
 
Total
Deposits on real estate under option or contract
$
13,644

 
$
11,390

 
$
9,877

 
$
—

 
$
—

 
$
34,911

Real estate
738,573

 
370,005

 
236,636

 
—

 
—

 
1,345,214

Investments in unconsolidated entities
205

 
9,340

 
46

 
—

 
1,071

 
10,662

Other assets (2)
33,765

 
167,260

 
30,556

 
553

 
251,165

 
483,299

Total assets
$
786,187

 
$
557,995

 
$
277,115

 
$
553

 
$
252,236

 
$
1,874,086

 
 
At December 31, 2012
 
West
 
Central
 
East
 
Financial Services
 
Corporate and
Unallocated (3)
 
Total
Deposits on real estate under option or contract
$
4,419

 
$
7,168

 
$
2,764

 
$
—

 
$
—

 
$
14,351

Real estate
647,316

 
305,100

 
160,771

 
—

 
—

 
1,113,187

Investments in unconsolidated entities
365

 
10,645

 
16

 
—

 
1,059

 
12,085

Other assets (4)
24,935

 
132,546

 
25,914

 
297

 
252,247

 
435,939

Total assets
$
677,035

 
$
455,459

 
$
189,465

 
$
297

 
$
253,306

 
$
1,575,562

 
(1)(3)    Balance consists primarily of corporate assets not allocated to the reporting segments.
(2)(4)    Balance consists primarily of cash and securities and our deferred tax asset.