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Segment Information
9 Months Ended
Sep. 30, 2017
Segment Reporting [Abstract]  
Segment Information Disclosures
SEGMENT INFORMATION
We operate one principal homebuilding business which is organized and reports by division. We have six operating segments at September 30, 2017: our Central, Southwest, Southeast, Florida, Northwest and Midwest divisions. Our Central division is our largest division and it comprised approximately 43% and 51% of total home sales revenues for the nine months ended September 30, 2017 and 2016, respectively. During the second quarter of 2017, we expanded our division previously known as the Texas division by acquiring land in Oklahoma to form our Central division. Revenues for our Central division consist of home closings in Texas for the three and nine months ended September 30, 2017 and 2016. As of September 30, 2017, Oklahoma in our Central division and our Midwest division had only start-up activities and no revenues.
In accordance with ASC Topic 280, Segment Reporting (“ASC Topic 280”), operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated regularly by the chief operating decision-maker (“CODM”) in deciding how to allocate resources and in assessing performance. The CODM primarily evaluates performance based on the number of homes closed, gross margin, and net income.
The operating segments qualify for aggregation as one reporting segment. In determining the reportable segment, we concluded that all operating segments have similar economic and other characteristics, including similar home floor plans, average selling prices, gross margin, production construction processes, suppliers, subcontractors, regulatory environments, customer type, and underlying demand and supply. Each operating segment follows the same accounting policies and is managed by our management team. We have no inter-segment sales, as all sales are to external customers.