Note 11 - Operating and Reporting Segments

12 Months Ended

Oct. 31, 2012

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 typically 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)	2012			2011			2010
Revenues:
Northeast	$	233,326		$	201,984		$	298,713
Mid-Atlantic		273,080			199,716			282,052
Midwest		106,719			70,567			93,358
Southeast		128,684			79,453			93,493
Southwest		518,931			425,152			393,639
West		185,851			128,658			178,480
Total homebuilding		1,446,591			1,105,530			1,339,735
Financial services		38,735			29,481			31,973
Corporate and unallocated		27			(104	)		134
Total revenues	$	1,485,353		$	1,134,907		$	1,371,842
(Loss) income before income taxes:
Northeast	$	(4,683	)	$	(99,276	)	$	(92,605	)
Mid-Atlantic		17,262			(17,286	)		(4,762	)
Midwest		253			(8,977	)		(13,226	)
Southeast		(4,828	)		(11,874	)		(11,219	)
Southwest		42,178			29,316			23,192
West		(3,177	)		(40,599	)		(61,769	)
Total homebuilding		47,005			(148,696	)		(160,389	)
Financial services		15,087			8,109			8,899
Corporate and unallocated		(163,340	)		(151,001	)		(143,792	)
Loss before income taxes	$	(101,248	)	$	(291,588	)	$	(295,282	)

	October 31,
(In thousands)	2012		2011
Assets:
Northeast	$	396,073	$	385,217
Mid-Atlantic		200,969		219,287
Midwest		73,305		59,105
Southeast		90,132		83,044
Southwest		235,367		188,321
West		143,851		168,590
Total homebuilding		1,139,697		1,103,564
Financial services		164,634		85,106
Corporate and unallocated		379,919		413,510
Total assets	$	1,684,250	$	1,602,180

	October 31,
(In thousands)	2012		2011
Investments in and advances to unconsolidated joint ventures:
Northeast	$	18,954	$	15,450
Mid-Atlantic		32,014		26,477
Midwest		2,190		2,957
Southeast		4,636		4,687
Southwest		-		-
West		2,490		7,310
Total homebuilding		60,284		56,881
Corporate and unallocated		799		945
Total investments in and advances to unconsolidated joint ventures	$	61,083	$	57,826

	Year Ended October 31,
(In thousands)	2012		2011		2010
Homebuilding interest expense:
Northeast	$	25,507	$	33,833	$	27,105
Mid-Atlantic		9,988		10,180		16,572
Midwest		2,994		2,441		3,807
Southeast		5,310		4,036		5,570
Southwest		15,880		14,552		13,927
West		14,416		10,264		17,896
Total homebuilding		74,095		75,306		84,877
Corporate and unallocated		78,338		96,539		97,482
Financial services interest expense (income) (1)		553		350		(291	)
Total interest expense, net	$	152,986	$	172,195	$	182,068

(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)	2012		2011		2010
Depreciation:
Northeast	$	316	$	677	$	1,167
Mid-Atlantic		370		437		474
Midwest		517		1,825		1,609
Southeast		47		132		356
Southwest		217		292		340
West		302		409		832
Total homebuilding		1,769		3,772		4,778
Financial services		328		391		447
Corporate and unallocated		4,126		5,177		7,351
Total depreciation and intangible amortization and impairment	$	6,223	$	9,340	$	12,576

	Year Ended October 31,
(In thousands)	2012		2011		2010
Net additions to operating properties and equipment:
Northeast	$	2,944	$	191	$	426
Mid-Atlantic		55		19		-
Midwest		218		66		290
Southeast		30		34		-
Southwest		-		28		19
West		-		118		-
Total homebuilding		3,247		456		735
Financial services		21		74		-
Corporate and unallocated		1,791		296		1,721
Total net additions to operating properties and equipment	$	5,059	$	826	$	2,456

	Year Ended October 31,
(In thousands)	2012			2011			2010
Equity in earnings (losses) from unconsolidated joint ventures:
Northeast	$	3,202		$	(4,474	)	$	(29	)
Mid-Atlantic		155			(4,340	)		(391	)
Midwest		598			672			390
Southeast		1,503			676			322
Southwest		-			83			664
West		(57	)		(1,575	)		-
Total equity in earnings (losses) from unconsolidated joint ventures	$	5,401		$	(8,958	)	$	956