Quarterly report pursuant to Section 13 or 15(d)

OPERATING AND REPORTING SEGMENTS

v3.19.1
OPERATING AND REPORTING SEGMENTS
3 Months Ended
Mar. 31, 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 March 31,
 
2019
 
2018
Homebuilding revenue (1):
 
 
 
West
$
272,966

 
$
317,228

Central
191,606

 
191,870

East
243,573

 
233,466

Consolidated total
$
708,145

 
$
742,564

Homebuilding segment operating income:
 
 
 
West
$
18,308

 
$
21,121

Central
12,336

 
14,267

East
9,693

 
11,359

Total homebuilding segment operating income
40,337

 
46,747

Financial services segment profit
4,702

 
4,220

Corporate and unallocated costs (2)
(9,630
)
 
(7,272
)
Interest expense
(4,085
)
 
(136
)
Other income, net (3)
1,046

 
5,325

Net earnings before income taxes
$
32,370

 
$
48,884

 
(1)
Homebuilding revenue includes the following land closing revenue, by segment, as outlined in the table below:
 
Three Months Ended March 31,
 
2019
 
2018
Land closing revenue:
 
 
 
West
$

 
$
12,455

Central

 
125

East
9,495

 
1,452

Total
$
9,495

 
$
14,032


(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 three months ended March 31, 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 March 31, 2019
 
 
West
 
Central
 
East
 
Financial Services
 
Corporate  and
Unallocated
 
Total
Deposits on real estate under option or contract
 
$
6,659

 
$
12,999

 
$
25,169

 
$

 
$

 
$
44,827

Real estate
 
1,164,724

 
715,356

 
864,498

 

 

 
2,744,578

Investments in unconsolidated entities
 
7,481

 
6,375

 

 

 
1,805

 
15,661

Other assets
 
54,503

(1)
106,268

(2)
83,949

(3)
749

 
345,332

(4)
590,801

Total assets
 
$
1,233,367

 
$
840,998

 
$
973,616

 
$
749

 
$
347,137

 
$
3,395,867


(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.