Note 11 - Operating and Reporting Segments

12 Months Ended

Oct. 31, 2011

Segment Reporting Disclosure [Text Block]

11. Operating and Reporting Segments

Our operating segments are components of our business for which discrete financial information is available and reviewed regularly by the chief operating decision maker, our Chief Executive Officer, to evaluate performance and make operating decisions.  Based on this criteria, each of our communities qualifies as an operating segment, and therefore, it is impractical to provide segment disclosures for this many segments.  As such, we have aggregated the homebuilding operating segments into six reportable segments.

Our homebuilding operating segments are aggregated into reportable segments based primarily upon geographic proximity, similar regulatory environments, land acquisition characteristics and similar methods used to construct and sell homes.  Our reportable segments consist of the following six homebuilding segments and a financial services segment:

Homebuilding:

 (1) Northeast (New Jersey and Pennsylvania)

 (2) Mid-Atlantic (Delaware, Maryland, Virginia, West Virginia, and Washington D.C.)

 (3) Midwest (Illinois, Minnesota, and Ohio)

 (4) Southeast (Florida, Georgia, North Carolina, and South Carolina)

 (5) Southwest (Arizona and Texas)

 (6) West (California)

Financial Services

Operations of the Company’s Homebuilding segments primarily include the sale and construction of single-family attached and detached homes, attached townhomes and condominiums, urban infill and active adult homes in planned residential developments.  In addition, from time to time, operations of the homebuilding segments include sales of land.  Operations of the Company’s Financial Services segment include mortgage banking and title services provided to the homebuilding operations’ customers.  We do not retain or service mortgages that we originate but rather sell the mortgages and related servicing rights to investors.

Corporate and unallocated primarily represents operations at our headquarters in Red Bank, New Jersey.  This includes our executive offices, information services, human resources, corporate accounting, training, treasury, process redesign, internal audit, construction services, and administration of insurance, quality, and safety.  It also includes interest income and interest expense resulting from interest incurred that cannot be capitalized in inventory in the Homebuilding segments, as well as the gains or losses on extinguishment of debt from debt repurchases or exchanges.

Evaluation of segment performance is based primarily on operating earnings from continuing operations before provision for income taxes (“(Loss) income before income taxes”).  (Loss) income before income taxes for the Homebuilding segments consist of revenues generated from the sales of homes and land, (loss) income from unconsolidated entities, management fees and other income, less the cost of homes and land sold, selling, general and administrative expenses and minority interest expense.  Income before income taxes for the Financial Services segment consist of revenues generated from mortgage financing, title insurance and closing services, less the cost of such services and certain selling, general and administrative expenses incurred by the Financial Services segment.

Operational results of each segment are not necessarily indicative of the results that would have occurred had the segment been an independent stand-alone entity during the periods presented.

Financial information relating to operations of our segments was as follows:

	Year Ended October 31,
(In thousands)	2011			2010			2009
Revenues:
Northeast	$	201,984		$	298,713		$	364,876
Mid-Atlantic		199,716			282,052			297,706
Midwest		70,567			93,358			117,308
Southeast		79,453			93,493			119,779
Southwest		425,152			393,639			422,808
West		128,658			178,480			234,740
Total homebuilding		1,105,530			1,339,735			1,557,217
Financial services		29,481			31,973			35,550
Corporate and unallocated		(104	)		134			3,523
Total revenues	$	1,134,907		$	1,371,842		$	1,596,290
(Loss) income before income taxes:
Northeast	$	(99,276	)	$	(92,605	)	$	(341,147	)
Mid-Atlantic		(17,286	)		(4,762	)		(85,817	)
Midwest		(8,977	)		(13,226	)		(24,390	)
Southeast		(11,874	)		(11,219	)		(67,891	)
Southwest		29,316			23,192			(60,777	)
West		(40,599	)		(61,769	)		(304,539	)
Total homebuilding		(148,696	)		(160,389	)		(884,561	)
Financial services		8,109			8,899			6,255
Corporate and unallocated		(151,001	)		(143,792	)		206,287
Loss before income taxes	$	(291,588	)	$	(295,282	)	$	(672,019	)

	October 31,
(In thousands)	2011		2010
Assets:
Northeast	$	385,217	$	456,544
Mid-Atlantic		219,287		177,503
Midwest		59,105		47,818
Southeast		83,044		58,765
Southwest		188,321		206,001
West		168,590		195,808
Total homebuilding		1,103,564		1,142,439
Financial services		85,106		101,795
Corporate and unallocated		413,510		573,326
Total assets	$	1,602,180	$	1,817,560

	October 31,
(In thousands)	2011		2010
Investments in and advances to unconsolidated joint ventures:
Northeast	$	15,450	$	16,437
Mid-Atlantic		26,477		12,568
Midwest		2,957		4,432
Southeast		4,687		4,528
Southwest		-		35
West		7,310		-
Total homebuilding		56,881		38,000
Corporate and unallocated		945		-
Total investments in and advances to unconsolidated joint ventures	$	57,826	$	38,000

	Year Ended October 31,
(In thousands)	2011		2010			2009
Homebuilding interest expense:
Northeast	$	33,833	$	27,105		$	28,566
Mid-Atlantic		10,180		16,572			18,452
Midwest		2,441		3,807			3,712
Southeast		4,036		5,570			8,050
Southwest		14,552		13,927			23,914
West		10,264		17,896			23,639
Total homebuilding		75,306		84,877			106,333
Corporate and unallocated		96,539		97,482			94,136
Financial services interest expense (income) (1)		350		(291	)		(507	)
Total interest expense, net	$	172,195	$	182,068		$	199,962

(1) Financial services interest income and interest expenses are included in the Financial services lines on the Consolidated Statements of Operations in the respective revenues and expenses sections.

	Year Ended October 31,
(In thousands)	2011		2010		2009
Depreciation:
Northeast	$	677	$	1,167	$	1,533
Mid-Atlantic		437		474		577
Midwest		1,825		1,609		3,671
Southeast		132		356		1,196
Southwest		292		340		503
West		409		832		1,009
Total homebuilding		3,772		4,778		8,489
Financial services		391		447		489
Corporate and unallocated		5,177		7,351		9,549
Total depreciation and goodwill and intangible amortization and impairment	$	9,340	$	12,576	$	18,527

	Year Ended October 31,
(In thousands)	2011		2010		2009
Net additions to operating properties and equipment:
Northeast	$	191	$	426	$	41
Mid-Atlantic		19		-		34
Midwest		66		290		170
Southeast		34		-		122
Southwest		28		19		-
West		118		-		22
Total homebuilding		456		735		389
Financial services		74		-		11
Corporate and unallocated		296		1,721		350
Total net additions to operating properties and equipment	$	826	$	2,456	$	750

	Year Ended October 31,
(In thousands)	2011			2010			2009
Equity in (losses) earnings from unconsolidated joint ventures:
Northeast	$	(4,474	)	$	(29	)	$	(31,156	)
Mid-Atlantic		(4,340	)		(391	)		(3,866	)
Midwest		672			390			(1,808	)
Southeast		676			322			(4,359	)
Southwest		83			664			(4,824	)
West		(1,575	)		-			(28	)
Total equity in (losses) earnings from unconsolidated joint ventures	$	(8,958	)	$	956		$	(46,041	)