Note 17 - Operating and Reporting Segments

6 Months Ended

Apr. 30, 2016

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

17. 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, Washington D.C. and West Virginia)
(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 lifestyle 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 any debt repurchases or exchanges.

Evaluation of segment performance is based primarily on operating earnings from continuing operations before provision for income taxes (“Income (loss) before income taxes”). Income (loss) before income taxes for the Homebuilding segments consist of revenues generated from the sales of homes and land, income (loss) from unconsolidated entities, management fees and other income, less the cost of homes and land sold, selling, general and administrative expenses and 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 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 the Company’s segment operations was as follows:

	Three Months Ended April 30,						Six Months Ended April 30,
(In thousands)	2016			2015			2016			2015
Revenues:
Northeast		$54,046			$39,274			$126,550			$90,004
Mid-Atlantic		89,987			76,777			183,807			157,962
Midwest		84,631			73,256			176,551			137,695
Southeast		51,298			49,275			90,550			87,169
Southwest		276,735			190,427			481,060			357,614
West		81,095			27,522			136,673			60,715
Total homebuilding		637,792			456,531			1,195,191			891,159
Financial services		17,003			12,457			35,229			23,579
Corporate and unallocated		(72	)		(39	)		(92	)		(75	)
Total revenues		$654,723			$468,949			$1,230,328			$914,663
(Loss) income before income taxes:
Northeast		$(6,684	)		$(3,812	)		$(3,950	)		$(6,965	)
Mid-Atlantic		1,072			(178	)		3,694			4,999
Midwest		(23	)		1,210			(5,582	)		4,921
Southeast		(7,255	)		(1,202	)		(9,089	)		(2,358	)
Southwest		18,491			14,022			34,860			25,347
West		(4,318	)		(8,963	)		(10,286	)		(11,336	)
Homebuilding income before income taxes		1,283			1,077			9,647			14,608
Financial services		7,385			4,949			17,396			8,754
Corporate and unallocated		(26,272	)		(35,507	)		(57,841	)		(72,523	)
Loss before income taxes		$(17,604	)		$(29,481	)		$(30,798	)		$(49,161	)

(In thousands)	April 30, 2016		October 31, 2015
Assets:
Northeast		$287,781		$321,983
Mid-Atlantic		355,629		342,159
Midwest		169,786		197,899
Southeast		281,694		223,206
Southwest		454,939		465,740
West		298,220		259,943
Total homebuilding		1,848,049		1,810,930
Financial services		160,712		159,981
Corporate and unallocated(1)		509,866		631,387
Total assets		$2,518,627		$2,602,298

(1) Includes $294.1 million and $290.3 million of income taxes receivable, including deferred tax assets, as of April 30, 2016 and October 31, 2015, respectively.