Note 4 - Segment Reporting

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

4.       

Segment Reporting

We operate two principal businesses: homebuilding and financial services.

Our homebuilding operations acquire and develop land and construct and sell single-family attached and detached homes. In accordance with the aggregation criteria defined in ASC Topic 280,

Segment Reporting

("ASC 280"), our homebuilding operating segments have been grouped into four reportable segments: North, consisting of our operating divisions in Georgia, Delaware, Illinois, Indiana, Maryland, Minnesota, New Jersey, Pennsylvania, Virginia and Washington D.C.; Southeast, consisting of our operating divisions in Florida and the Carolinas; Southwest, consisting of our operating divisions in Texas, Colorado and Nevada; and West, consisting of our operating divisions in California and Arizona. During the 2015 third quarter, in connection with transition planning related to the Merger, the chief operating decision makers began evaluating the business and allocating resources based on aggregating our Arizona operating segment within our California reportable segment (and renamed the California segment the "West" segment). Our Arizona operating segment was previously reported within our Southwest reportable segment, and as such, prior periods presented have been restated to conform to our new presentation. In addition, upon completion of the Merger with Ryland on October 1, 2015, we created the new North segment as we did not have operating divisions in those geographic areas.

Our mortgage financing operation provides mortgage financing to many of our homebuyers in substantially all of the markets in which we operate, and sells substantially all of the loans it originates in the secondary mortgage market. Our title services operation provides various title services for our homebuyers in most of our operating divisions. Our mortgage financing and title services operations are included in our financial services reportable segment, which is separately reported in our condensed consolidated financial statements under "Financial Services."

Corporate is a non-operating segment that develops and implements strategic initiatives and supports our operating segments by centralizing key administrative functions such as accounting, finance and treasury, information technology, insurance and risk management, litigation, marketing and human resources. Corporate also provides the necessary administrative functions to support us as a publicly traded company. All of the expenses incurred by Corporate are allocated to each of our operating divisions based on their respective percentage of revenues.

Segment financial information relating to the Company’s homebuilding operations was as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
	(Dollars in thousands)
Homebuilding revenues:
North	$	241,274	$	n/a	$	427,829	$	n/a
Southeast		386,836		198,122		664,318		344,571
Southwest		433,603		185,866		776,637		305,709
West		516,649		315,644		895,261		519,630
Total homebuilding revenues	$	1,578,362	$	699,632	$	2,764,045	$	1,169,910
Homebuilding pretax income:
North	$	17,980	$	n/a	$	27,550	$	n/a
Southeast		31,772		15,137		52,822		25,530
Southwest		46,907		21,985		73,833		33,265
West		74,812		49,582		125,534		75,197
Total homebuilding pretax income	$	171,471	$	86,704	$	279,739	$	133,992

Segment financial information relating to the Company’s homebuilding assets was as follows:

	June 30,		December 31,
	2016		2015
	(Dollars in thousands)
Homebuilding assets:
North	$	1,122,873	$	732,689
Southeast		2,136,333		1,766,241
Southwest		1,860,181		1,470,654
West		2,693,834		2,357,597
Corporate (1)		548,660		1,594,175
Total homebuilding assets	$	8,361,881	$	7,921,356

(1) The assets in our Corporate Segment include cash and cash equivalents and our deferred tax asset, and at December 31, 2015 included goodwill recorded in connection with our merger with Ryland. During the 2016 second quarter, recorded goodwill was allocated to the Company’s reporting units (as of June 30, 2016, approximately $0.3 billion was included in each of the North, Southeast and Southwest segments, and approximately $0.1 billion was included in the West region). As of the end of the period covered by this quarterly report on Form 10-Q, the allocation of goodwill to our reporting units is considered preliminary, as it is based upon estimates and assumptions that are subject to change within the measurement period.