Leases Leases

9 Months Ended

Sep. 30, 2019

Leases [Abstract]

Lessee, Finance Leases [Text Block]

Leases

We have operating leases for our corporate and division offices, production facilities, model homes, and certain office and production equipment. Additionally, we have finance leases for production equipment which are recorded in homebuilding "Property, plant and equipment, net" and "Accrued expenses and other liabilities" on the accompanying condensed consolidated balance sheets. Our leases have remaining lease terms of up to 10 years, some of which include options to extend the leases for up to 10 years, and some of which include options to terminate the lease.

On January 1, 2019, we adopted ASU 2016-02, Leases (Topic 842), which requires lessees to recognize most leases on the balance sheet as ROU assets with corresponding lease liabilities. See Note 1 for additional discussion regarding the adoption of Topic 842. The ROU assets and lease liabilities are recognized based on the present value of lease payments over the lease term, discounted using our incremental borrowing rate at the commencement date of the lease. We recognize operating lease expense on a straight-line basis over the lease term.

We have elected to use the portfolio approach for certain equipment leases which have similar lease terms and payment schedules. Additionally, for certain equipment we account for the lease and non-lease components as a single lease component. Our sublease income is de minimis.

We have certain leases, primarily the leases of model homes, which have initial lease terms of twelve months or less ("Short-term leases"). We elected to exclude these leases from the recognition requirements under Topic 842, and these leases have not been included in our recognized ROU assets and lease liabilities.

The components of lease expense were as follows:

	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
Lease expense
Operating lease expense	$	8,829	$	24,776
Finance lease expense:
Amortization of ROU assets	125		146
Interest on lease liabilities	25		30
Short-term lease expense	5,530		16,775
Total lease expense	$	14,509	$	41,727

Other information related to leases was as follows:

	Nine Months Ended September 30, 2019
Supplemental Cash Flows Information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	19,515
Operating cash flows from finance leases	30
Financing cash flows from finance leases	116
ROU assets obtained in exchange for lease obligations:
Operating leases	$	11,546
Finance leases	$	6,369
Weighted-average remaining lease term (in years):
Operating leases	4.6
Finance leases	6.9
Weighted-average discount rate:
Operating leases	3.7		%
Finance leases	2.9		%

We are committed under multiple non-cancelable operating and finance leases involving office space, production facilities, model homes, office and production equipment, and automobiles. Future minimum lease payments under these leases as of September 30, 2019 were as follows:

Years Ending December 31,	Operating Leases			Finance Leases
2019	$	9,054		$	215
2020	27,450			860
2021	19,867			860
2022	15,578			860
2023	11,899			860
Thereafter	15,665			3,315
Total minimum lease payments	99,513			6,970
Less:
Imputed interest	(8,043		)	(717		)
Short-term lease payments	(5,796		)	—
Total lease liability	$	85,674		$	6,253

Lessee, Operating Leases [Text Block]

Leases

We have operating leases for our corporate and division offices, production facilities, model homes, and certain office and production equipment. Additionally, we have finance leases for production equipment which are recorded in homebuilding "Property, plant and equipment, net" and "Accrued expenses and other liabilities" on the accompanying condensed consolidated balance sheets. Our leases have remaining lease terms of up to 10 years, some of which include options to extend the leases for up to 10 years, and some of which include options to terminate the lease.

On January 1, 2019, we adopted ASU 2016-02, Leases (Topic 842), which requires lessees to recognize most leases on the balance sheet as ROU assets with corresponding lease liabilities. See Note 1 for additional discussion regarding the adoption of Topic 842. The ROU assets and lease liabilities are recognized based on the present value of lease payments over the lease term, discounted using our incremental borrowing rate at the commencement date of the lease. We recognize operating lease expense on a straight-line basis over the lease term.

We have elected to use the portfolio approach for certain equipment leases which have similar lease terms and payment schedules. Additionally, for certain equipment we account for the lease and non-lease components as a single lease component. Our sublease income is de minimis.

We have certain leases, primarily the leases of model homes, which have initial lease terms of twelve months or less ("Short-term leases"). We elected to exclude these leases from the recognition requirements under Topic 842, and these leases have not been included in our recognized ROU assets and lease liabilities.

The components of lease expense were as follows:

	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
Lease expense
Operating lease expense	$	8,829	$	24,776
Finance lease expense:
Amortization of ROU assets	125		146
Interest on lease liabilities	25		30
Short-term lease expense	5,530		16,775
Total lease expense	$	14,509	$	41,727

Other information related to leases was as follows:

	Nine Months Ended September 30, 2019
Supplemental Cash Flows Information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	19,515
Operating cash flows from finance leases	30
Financing cash flows from finance leases	116
ROU assets obtained in exchange for lease obligations:
Operating leases	$	11,546
Finance leases	$	6,369
Weighted-average remaining lease term (in years):
Operating leases	4.6
Finance leases	6.9
Weighted-average discount rate:
Operating leases	3.7		%
Finance leases	2.9		%

We are committed under multiple non-cancelable operating and finance leases involving office space, production facilities, model homes, office and production equipment, and automobiles. Future minimum lease payments under these leases as of September 30, 2019 were as follows:

Years Ending December 31,	Operating Leases			Finance Leases
2019	$	9,054		$	215
2020	27,450			860
2021	19,867			860
2022	15,578			860
2023	11,899			860
Thereafter	15,665			3,315
Total minimum lease payments	99,513			6,970
Less:
Imputed interest	(8,043		)	(717		)
Short-term lease payments	(5,796		)	—
Total lease liability	$	85,674		$	6,253