Quarterly report pursuant to Section 13 or 15(d)

Operating and Reporting Segments

v2.4.0.8
Operating and Reporting Segments
 6 Months Ended
Jun. 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 six homebuilding operating segments (the six 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 the latter part of 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 and the Carolinas

(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 June 30,
 
Six Months Ended June 30,
 
2013
 
2012
 
2013
 
2012
Homebuilding revenue (1):
 
 
 
 
 
 
 
West
$
246,741

 
$
134,263

 
$
435,946

 
$
228,964

Central
127,310

 
102,499

 
218,099

 
174,478

East
75,899

 
45,333

 
132,340

 
83,003

Consolidated total
$
449,950

 
$
282,095

 
$
786,385

 
$
486,445

Homebuilding segment operating income:
 
 
 
 
 
 
 
West
$
34,895

 
$
8,410

 
$
54,058

 
$
11,651

Central
7,263

 
5,336

 
9,643

 
5,652

East
6,765

 
3,271

 
10,001

 
6,077

Total homebuilding segment operating income
48,923

 
17,017

 
73,702

 
23,380

Financial services profit
4,165

 
2,177

 
7,221

 
3,758

Corporate and unallocated (2)
(7,502
)
 
(5,085
)
 
(13,349
)
 
(9,910
)
Loss from other unconsolidated entities, net
(120
)
 
(91
)
 
(275
)
 
(274
)
Interest expense
(4,523
)
 
(6,338
)
 
(9,651
)
 
(13,709
)
Other income, net
685

 
934

 
1,155

 
795

Loss on early extinguishment of debt
(3,096
)
 
(5,772
)
 
(3,796
)
 
(5,772
)
Earnings/(loss) before income taxes
$
38,532

 
$
2,842

 
$
55,007

 
$
(1,732
)
 
(1)
Homebuilding revenue includes the following land closing revenue, by segment:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2013
 
2012
 
2013
 
2012
Land closing revenue:
 
 
 
 
 
 
 
West
100

 
$
—

 
$
5,741

 
$
—

Central
10,340

 
755

 
10,424

 
1,083

East
3,470

 
—

 
3,470

 
—

Consolidated total
$
13,910

 
$
755

 
$
19,635

 
$
1,083


(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 June 30, 2013
 
West
 
Central
 
East
 
Financial Services
 
Corporate and
Unallocated (1)
 
Total
Deposits on real estate under option or contract
$
5,601

 
$
7,570

 
$
8,541

 
$
—

 
$
—

 
$
21,712

Real estate
691,423

 
328,895

 
206,911

 
—

 
—

 
1,227,229

Investments in unconsolidated entities
206

 
9,427

 
40

 
—

 
1,025

 
10,698

Other assets (2)
44,661

 
161,252

 
26,230

 
506

 
275,189

 
507,838

Total assets
$
741,891

 
$
507,144

 
$
241,722

 
$
506

 
$
276,214

 
$
1,767,477

 
 
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.