Note 7 - Inventories

3 Months Ended

Mar. 31, 2014

Inventory Disclosure [Abstract]

Inventory Disclosure [Text Block]

7. Inventories

a. Inventories Owned

Inventories owned consisted of the following at:

	March 31, 2014
	California		Southwest		Southeast		Total
	(Dollars in thousands)
Land and land under development	$	812,401	$	457,257	$	571,893	$	1,841,551
Homes completed and under construction		350,031		194,030		225,725		769,786
Model homes		74,925		27,212		27,795		129,932
Total inventories owned	$	1,237,357	$	678,499	$	825,413	$	2,741,269

	December 31, 2013
	California		Southwest		Southeast		Total
	(Dollars in thousands)
Land and land under development	$	819,278	$	415,910	$	536,473	$	1,771,661
Homes completed and under construction		280,875		159,927		187,569		628,371
Model homes		82,367		27,466		26,237		136,070
Total inventories owned	$	1,182,520	$	603,303	$	750,279	$	2,536,102

In accordance with ASC Topic 360, Property, Plant, and Equipment (“ASC 360”), we record impairment losses on inventories when events and circumstances indicate that they may be impaired, and the future undiscounted cash flows estimated to be generated by those assets are less than their carrying amounts. Inventories that are determined to be impaired are written down to their estimated fair value. We calculate the fair value of a project under a land residual value analysis and in certain cases in conjunction with a discounted cash flow analysis. During the three months ended March 31, 2014 and 2013, we reviewed all projects under development and held for future development, totaling 361 and 293, respectively, for indicators of potential impairment. Based on the impairment review, we did not record any inventory impairments during the three months ended March 31, 2014 and 2013.

b. Inventories Not Owned

Inventories not owned consisted of the following at:

	March 31, 2014		December 31, 2013
	(Dollars in thousands)
Land purchase and lot option deposits	$	43,325	$	44,005
Other lot option contracts, net of deposits		40,276		54,336
Total inventories not owned	$	83,601	$	98,341

Under ASC Topic 810, Consolidation (“ASC 810”), a non-refundable deposit paid to an entity is deemed to be a variable interest that will absorb some or all of the entity’s expected losses if they occur. Our land purchase and lot option deposits generally represent our maximum exposure to the land seller if we elect not to purchase the optioned property. In some instances, we may also expend funds for due diligence, development and construction activities with respect to optioned land prior to takedown. Such costs are classified as inventories owned, which we would have to absorb should we not exercise the option. Therefore, whenever we enter into a land option or purchase contract with an entity and make a non-refundable deposit, a variable interest entity (“VIE”) may have been created. In accordance with ASC 810, we perform ongoing reassessments of whether we are the primary beneficiary of a VIE. As of March 31, 2014 and December 31, 2013, we had consolidated $10.0 million and $21.7 million, respectively, within inventories not owned (with a corresponding increase in accrued liabilities) related to land option and purchase contracts where we were deemed to be the primary beneficiary of a VIE.

Other lot option contracts also included $27.0 million as of March 31, 2014 and December 31, 2013, related to a land purchase contract where we made a significant deposit and as a result we were deemed to be economically compelled to purchase the land, and $3.3 million and $5.7 million, as of March 31, 2014 and December 31, 2013, respectively, of purchase price allocated in connection with the acquisition of a business during the 2013 second quarter.