Quarterly report pursuant to Section 13 or 15(d)

OPERATING AND REPORTING SEGMENTS

v3.10.0.1
OPERATING AND REPORTING SEGMENTS
6 Months Ended
Jun. 30, 2018
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,
 
2018
 
2017
 
2018
 
2017
Homebuilding revenue (1):
 
 
 
 
 
 
 
West
$
351,647

 
$
369,574

 
$
668,875

 
$
681,378

Central
260,106

 
225,679

 
451,976

 
400,510

East
265,742

 
206,725

 
499,208

 
392,862

Consolidated total
$
877,495

 
$
801,978

 
$
1,620,059

 
$
1,474,750

Homebuilding segment operating income:
 
 
 
 
 
 
 
West
$
33,062

 
$
35,131

 
$
54,183

 
$
59,143

Central
25,576

 
23,230

 
39,843

 
37,120

East
14,564

 
5,285

 
25,923

 
7,721

Total homebuilding segment operating income
73,202

 
63,646

 
119,949

 
103,984

Financial services segment profit
5,651

 
5,557

 
9,871

 
9,847

Corporate and unallocated costs (2)
(9,402
)
 
(7,028
)
 
(16,674
)
 
(15,545
)
(Loss)/earnings from other unconsolidated entities, net
(156
)
 
570

 
(202
)
 
943

Interest expense
(44
)
 
(1,620
)
 
(180
)
 
(2,445
)
Other income, net (3)
1,934

 
2,080

 
7,305

 
3,190

Net earnings before income taxes
$
71,185

 
$
63,205

 
$
120,069

 
$
99,974

 

(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,
 
2018
 
2017
 
2018
 
2017
Land closing revenue:
 
 
 
 
 
 
 
West
$
1,935

 
$

 
$
14,390

 
$
11,800

Central
762

 

 
887

 
122

East
2,415

 
4,198

 
3,867

 
4,431

Total
$
5,112

 
$
4,198

 
$
19,144

 
$
16,353


(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, 2018
 
 
West
 
Central
 
East
 
Financial Services
 
Corporate  and
Unallocated
 
Total
Deposits on real estate under option or contract
 
$
11,790

 
$
15,512

 
$
21,578

 
$

 
$

 
$
48,880

Real estate
 
1,235,184

 
739,853

 
895,010

 

 

 
2,870,047

Investments in unconsolidated entities
 
8,073

 
6,974

 

 

 
1,592

 
16,639

Other assets
 
58,486

(1)
104,174

(2)
117,332

(3)
741

 
178,595

(4)
459,328

Total assets
 
$
1,313,533

 
$
866,513

 
$
1,033,920

 
$
741

 
$
180,187

 
$
3,394,894


(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 real estate not owned, goodwill (see Note 9) and property and equipment.
(4)
Balance consists primarily of cash and our deferred tax asset. 
 
 
At December 31, 2017
 
 
West
 
Central
 
East
 
Financial Services
 
Corporate  and
Unallocated
 
Total
Deposits on real estate under option or contract
 
$
15,557

 
$
21,309

 
$
23,079

 
$

 
$

 
$
59,945

Real estate
 
1,174,285

 
700,460

 
856,635

 

 

 
2,731,380

Investments in unconsolidated entities
 
7,833

 
6,999

 

 

 
2,236

 
17,068

Other assets
 
58,470

(1)
110,173

(2)
144,681

(3)
1,249

 
128,292

(4)
442,865

Total assets
 
$
1,256,145

 
$
838,941

 
$
1,024,395

 
$
1,249

 
$
130,528

 
$
3,251,258


(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 real estate not owned, cash, and goodwill (see Note 9).
(4)
Balance consists primarily of cash and our deferred tax asset.