Quarterly report pursuant to Section 13 or 15(d)

OPERATING AND REPORTING SEGMENTS

v3.10.0.1
OPERATING AND REPORTING SEGMENTS
9 Months Ended
Sep. 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 September 30,
 
Nine Months Ended September 30,
 
2018
 
2017
 
2018
 
2017
Homebuilding revenue (1):
 
 
 
 
 
 
 
West
$
366,347

 
$
373,708

 
$
1,035,222

 
$
1,055,086

Central
261,636

 
236,884

 
713,612

 
637,394

East
256,598

 
195,005

 
755,806

 
587,867

Consolidated total
$
884,581

 
$
805,597

 
$
2,504,640

 
$
2,280,347

Homebuilding segment operating income:
 
 
 
 
 
 
 
West
$
34,671

 
$
35,026

 
$
88,854

 
$
94,169

Central
24,319

 
26,404

 
64,162

 
63,524

East
14,682

 
4,954

 
40,605

 
12,675

Total homebuilding segment operating income
73,672

 
66,384

 
193,621

 
170,368

Financial services segment profit
6,321

 
5,514

 
16,192

 
15,361

Corporate and unallocated costs (2)
(11,343
)
 
(9,264
)
 
(28,017
)
 
(24,809
)
Earnings/(loss) from other unconsolidated entities, net
894

 
(91
)
 
692

 
852

Interest expense
(53
)
 
(1,116
)
 
(233
)
 
(3,561
)
Other income, net (3)
1,918

 
2,028

 
9,223

 
5,218

Net earnings before income taxes
$
71,409

 
$
63,455

 
$
191,478

 
$
163,429

 
(1)
Homebuilding revenue includes the following land closing revenue, by segment, as outlined in the table below:
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2018
 
2017
 
2018
 
2017
Land closing revenue:
 
 
 
 
 
 
 
West
$
268

 
$

 
$
14,658

 
$
11,800

Central
5,328

 
125

 
6,215

 
247

East
1,251

 
464

 
5,118

 
4,895

Total
$
6,847

 
$
589

 
$
25,991

 
$
16,942


(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 nine months ended September 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 September 30, 2018
 
 
West
 
Central
 
East
 
Financial Services
 
Corporate  and
Unallocated
 
Total
Deposits on real estate under option or contract
 
$
8,509

 
$
15,269

 
$
26,115

 
$

 
$

 
$
49,893

Real estate
 
1,258,824

 
722,418

 
906,051

 

 

 
2,887,293

Investments in unconsolidated entities
 
8,162

 
6,413

 

 

 
1,719

 
16,294

Other assets
 
68,469

(1)
103,369

(2)
119,773

(3)
623

 
202,545

(4)
494,779

Total assets
 
$
1,343,964

 
$
847,469

 
$
1,051,939

 
$
623

 
$
204,264

 
$
3,448,259


(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), property and equipment and cash.
(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.