Segment Reporting

12 Months Ended

Dec. 31, 2012

Segment Reporting

3. Segment Reporting

Our operating segments are defined as a component of an enterprise for which discrete financial information is available and is reviewed regularly by the chief operating decision-maker, or decision-making group, to evaluate performance and make operating decisions. We have identified our chief operating decision-makers (“CODMs”) as two key executives—the Chief Executive Officer and the Chief Operating Officer.

We have identified each homebuilding division as an operating segment. Our operating segments have been aggregated into the reportable segments noted below because they are similar in the following regards: (1) economic characteristics; (2) housing products; (3) class of homebuyer; (4) regulatory environments; and (5) methods used to construct and sell homes. Our homebuilding reportable segments are as follows:

• West (Arizona, California, Nevada and Washington)

• Mountain (Colorado and Utah)

• East (Virginia, Florida, Illinois and Maryland, which includes Pennsylvania, Delaware and New Jersey)

In 2012, we combined our Florida and Illinois divisions into our East reportable segment as they exhibit similar criteria discussed above, including similar economic characteristics, with those divisions in our East reportable segment. As such, all years presented with segment data have been revised to reflect this new presentation.

Our Financial Services business consists of the operations of the following operating segments: (1) HomeAmerican Mortgage Corporation (“HomeAmerican”); (2) Allegiant; (3) StarAmerican; (4) American Home Insurance Agency, Inc.; and (5) American Home Title and Escrow Company. Due to its contributions to consolidated pretax income during the year ended December 31, 2012, HomeAmerican is now considered to be a reportable segment (“Mortgage operations”). All years presented with segment data have been revised to reflect this new presentation. The remaining operating segments have been aggregated into one reportable segment (“Other”) because they do not individually exceed 10 percent of: (1) consolidated revenue; (2) the greater of (A) the combined reported profit of all operating segments that did not report a loss or (B) the positive value of the combined reported loss of all operating segments that reported losses; or (3) consolidated assets.

Corporate is a non-operating segment that develops and implements strategic initiatives and supports our operating divisions by centralizing key administrative functions such as finance and treasury, information technology, insurance and risk management, litigation and human resources. Corporate also provides the necessary administrative functions to support MDC as a publicly traded company. A portion of the expenses incurred by Corporate are allocated to the homebuilding operating segments based on their respective percentages of assets, and to a lesser degree, a portion of Corporate expenses are allocated to the financial services segments. A majority of Corporate’s personnel and resources are primarily dedicated to activities relating to the homebuilding segments, and, therefore, the balance of any unallocated Corporate expenses is included in the homebuilding segment.

The following table summarizes home and land sale revenues for our homebuilding operations and revenues for our financial services operations.

	Year Ended December 31,
	2012		2011		2010
Homebuilding	(Dollars in thousands)
West	$	516,079	$	272,800	$	326,278
Mountain		355,368		316,189		345,794
East		284,695		228,034		254,833
Total home and land sale revenues	$	1,156,142	$	817,023	$	926,905
Financial Services
Mortgage operations	$	35,123	$	17,807	$	21,839
Other		11,758		8,279		8,634
Total financial services revenues	$	46,881	$	26,086	$	30,473

The following table summarizes pretax income (loss) for our homebuilding and financial services operations.

	Year Ended December 31,
	2012			2011			2010
Homebuilding	(Dollars in thousands)
West	$	27,076		$	(16,889	)	$	9,910
Mountain		24,302			1,397			1,060
East		11,011			(7,195	)		(3,048	)
Corporate		(29,772	)		(87,941	)		(88,818	)
Total homebuilding pretax income (loss)	$	32,617		$	(110,628	)	$	(80,896	)
Financial Services
Mortgage operations	$	23,939		$	394		$	10,979
Other		4,559			2,762			(684	)
Total financial services pretax income (loss)	$	28,498		$	3,156		$	10,295

The following table summarizes total assets for our homebuilding and financial services operations. The assets in our Corporate segment primarily include cash and cash equivalents, marketable securities, and property and equipment.

	December 31,
	2012		2011
Homebuilding assets:	(Dollars in thousands)
West	$	459,807	$	346,442
Mountain		332,939		262,787
East		274,199		255,074
Corporate		692,500		852,561
Total homebuilding assets	$	1,759,445	$	1,716,864
Financial services assets:
Mortgage operations	$	122,941	$	80,097
Other		63,055		61,764
Total financial services assets	$	185,996	$	141,861