Note 3 - Segment Reporting

6 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

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-maker as two key executives— our Chief Executive Officer and 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 and Maryland, which includes Pennsylvania, Delaware and New Jersey)

Our financial services business consists of the operations of the following operating segments: (1) HomeAmerican Mortgage Corporation (“HomeAmerican”); (2) Allegiant Insurance Company, Inc., A Risk Retention Group (“Allegiant”); (3) StarAmerican Insurance Ltd. (“StarAmerican”); (4) American Home Insurance Agency, Inc.; and (5) American Home Title and Escrow Company. Due to its contributions to consolidated pretax income we consider HomeAmerican to be a reportable segment (“Mortgage operations”). 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 table set forth below summarizes home sale revenues for our homebuilding operations and revenues for our financial services operations.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2014		2013		2014		2013
	(Dollars in thousands)
Homebuilding
West	$	189,661	$	164,514	$	326,083	$	299,493
Mountain		146,665		133,768		247,610		267,145
East		94,935		103,852		176,102		167,244
Total home and land sale revenues	$	431,261	$	402,134	$	749,795	$	733,882
Financial Services
Mortgage operations	$	7,352	$	10,494	$	12,471	$	19,538
Other		4,139		3,390		8,243		6,852
Total financial services revenues	$	11,491	$	13,884	$	20,714	$	26,390

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

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2014			2013			2014			2013
	(Dollars in thousands)
Homebuilding
West	$	16,695		$	16,779		$	29,345		$	27,390
Mountain		12,182			14,142			19,541			27,138
East		5,296			4,523			7,957			6,051
Corporate		(6,724	)		(5,655	)		(15,841	)		(15,943	)
Total homebuilding pretax income	$	27,449		$	29,789		$	41,002		$	44,636
Financial Services
Mortgage operations	$	4,501		$	6,855		$	7,060		$	12,854
Other		2,076			1,368			4,604			3,108
Total financial services pretax income	$	6,577		$	8,223		$	11,664		$	15,962
Total pretax income	$	34,026		$	38,012		$	52,666		$	60,598

The table set forth below summarizes total assets for our homebuilding and financial services operations. The assets in our West, Mountain and East segments consist primarily of inventory while the assets in our Corporate segment consist primarily of cash and cash equivalents, marketable securities and our deferred tax asset. The assets in our financial services segment consist mostly of cash and cash equivalents, marketable securities and mortgage loans held-for-sale.

	June 30,		December 31,
	2014		2013
Homebuilding assets	(Dollars in thousands)
West	$	846,832	$	760,450
Mountain		500,365		418,796
East		333,174		297,627
Corporate		809,298		951,809
Total homebuilding assets	$	2,489,669	$	2,428,682
Financial services assets
Mortgage operations	$	66,206	$	99,065
Other		40,686		67,702
Total financial services assets	$	106,892	$	166,767
Total assets	$	2,596,561	$	2,595,449